2009 Legislative Session: Fifth Session,

38th 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, February 18, 2009

Afternoon Sitting

Volume 38, Number 4

CONTENTS

Routine Proceedings

Page

Introductions by Members

Tabling Documents

Office of the Auditor General, report No. 15, 2008-2009, Wireless Networking and Security in Victoria Government Offices: Gaps in the Defensive Line

Statements (Standing Order 25 b )

Jos Konst and Smithers ski hill

D. MacKay

All-Native Basketball Tournament

G. Coons

Grouse Mountain

R. Sultan

Guru Ravidass Sabha

R. Chouhan

Squamish Nation Waterfront Greenway

K. Whittred

Advocacy for renters

S. Herbert

Oral Questions

Budget provisions for public safety

C. James

Hon. J. van Dongen

S. Simpson

M. Farnworth

Hon. W. Oppal

Economic forecasts and budget process

B. Ralston

Hon. C. Hansen

R. Fleming

B.C. Hydro revenues and rates

J. Horgan

Hon. B. Lekstrom

Petitions

D. Chudnovsky

S. Hawkins

Budget Debate (continued)

B. Ralston

D. Jarvis

M. Karagianis

Hon. M. Polak

H. Lali

Hon. B. Bennett

D. Chudnovsky

[ Page 13775 ]

WEDNESDAY, FEBRUARY 18, 2009

The House met at 1:37 p.m.

[Mr. Speaker in the chair.]

Prayers.

Introductions by Members

D. Chudnovsky: I have a number of introductions today. Mr. Speaker, as you know — because I've reminded you on a number of occasions — the best high schools in British Columbia are in Vancouver-Kensington. You remember that, don't you?

Mr. Speaker: I do remember.

D. Chudnovsky: I want to introduce to the House a number of students who are….

Interjections.

D. Chudnovsky: The heckling comes later.

I want to introduce to the House a group of students from Sir Charles Tupper Secondary School who are here today with their teachers and supervisors. Could the House please make them welcome.

As well, two dear friends of our family are here visiting from Hamilton, Ontario. I'd like to introduce Ruth and Yaacov Goldberg. Ruth is the keeper of my wife's family history. She organizes the family tree. It goes back to 1722. It's a full-time job. We want to thank her for doing that and welcome her and Yaacov to the House.

Hon. J. McIntyre: Today in the members' gallery we have a very special guest representing his country of Greece. We have Mr. Georgios Ayfantis, the newly appointed consul general at Vancouver. He's making his first official visit to Victoria. We had a very instructive meeting this morning, just learning more about his interests here in British Columbia. I ask the House to please make him feel very welcome.

[1340]

D. Thorne: I have the honour today to introduce the grade 11 honours social studies class and teachers from Gleneagle Secondary School in my riding. They're all sitting up in the best seats in the House. We did a tour, and they're having a wonderful time. Would you all please make them very welcome.

Hon. B. Lekstrom: I am pleased to introduce a number of visitors from around the country. We have today possibly the largest-ever gathering of the Mount Allison University alumni here in the B.C. Legislature.

In addition to two staff that work in the buildings — Matt MacInnis, my executive assistant, as well as Katy Fairley, my former legislative assistant — joining us among the Mount A grads are Henry Skey from Victoria; Dave Rathbun from Cheverie, Nova Scotia; Randy Rose from Riverview, New Brunswick; and Daniel "Fuzzy" Koivisto from Calgary. Will the House please make them all welcome.

B. Ralston: It's my pleasure to introduce today several guests from the Canadian Office and Professional Employees Union, local 378: Andy Ross, president; Gwenne Farrell, who's a vice-president and also the national secretary-treasurer of the national organization; and Mike Bruce, director of communications. Would the House please make them welcome.

D. Hayer: We have in the House some very special delegates and guests from a variety of organizations, including Indian Buddha Society, the Chetna Association of Canada and Shri Guru Ravidass Sabha in Burnaby. This sabha propagates the teaching of a guru, Sat Guru Ravidass, who was a visionary in 15th-century India. He openly fought against man-made inequalities such as caste, creed and discrimination against all individuals, while promoting universal love, peace and tolerance.

Next month the sabha will be celebrating the 632nd birthday anniversary of Sat Guru Ravidass, and they will be spreading Nagar Kirtan to the community.

The society is represented here today by its president, Bill Basra, along with 20 other delegates and volunteers, including Santokh Jassal, Lamber Rao, Jai Birdi, Ram Saroop Chandharah and Chandra Bodalia, one of the top photographers from our communities. They have been volunteering their time to help the community.

They met with the opposition and the government side today. Would the House please make them very welcome and thank them for all the hard work they're doing.

C. Trevena: I hope the House will make welcome two women I met earlier today: Susan Murphy, who is the president of the B.C. Council of the Canadian Federation of University Women, and Kathy Torhjelm from the Nanaimo branch. I hope the House will make them very welcome.

J. Nuraney: I, too, would like to add my welcome to the group from the Guru Ravidass Sabha who are here with us today. It is a group who are loyal and dedicated people who are serving not only their community but a community at large in Burnaby, and I am very proud that they are all here today to be with us in this House.

I would like to make a particular mention of President Bill Basra and Jai Birdi, who are with them today, who are really the backbone and the core of this group and have worked so very hard for the community in the past and now, as I speak.

[ Page 13776 ]

I would also like to acknowledge the presence of Chandra Bodolia, a very well-known and a very well-liked person in our community. So please, would the House join me in welcoming this group who are here upstairs in the gallery.

N. Simons: I'd like to welcome today to the House Laney Bryenton and Cindy Chapman of the B.C. Association for Community Living, who I know are working tirelessly with both sides of the House to ensure that the voice of people with developmental disabilities and their families are heard. Will the House please make them welcome.

Hon. I. Black: I want to add my welcome to the students from Gleneagle, many of whom are constituents of mine. Nice to see you guys here.

I also want to acknowledge something that some of you don't probably know, which is that May 12 is a very, very important day, not just because we get to see what's going to happen electorally, but because it's my son's tenth birthday. He happens to be here today. So I want you to help me make him feel welcome, and I've assured him we're all going to be very well-behaved.

[1345]

R. Chouhan: Today in the gallery we have about 36 members of a delegation who have joined us today.

They are Bill Basra, Santokh Jassal, Ram Saroop Chandharah, Paramjit Singh Kainth, Hukam Chand, Giani Pooran Singh, Lamber Rao, Jai Birdi, Nachattar Benji, Shinda Ahir, Kamal Jassi, Surinder Sandhu, Surjit Bains, Raj Kumar Mehmi, Jai Ram Bains, Chaman Banga, Mohinder Sidhu, Paramjit Mehmi, Kishan Lal Sidhu, Rashpal Bhardwaj, Surinder Ranga, Sutey Parkash Ahir, Chandra Bodalia, Harmesh Chumber, Michael Ghira, Hardev Saroa, Gurbax Dhanda, Davinder Dhami, Malkiat Sohpal, Paramjit Lakha, Malkiat Puar, Kamaljit Lakha, Dilbagh Rai, Amrik Kalsi, Prem Sund, Gurmukh Sidhu and GD Guddu. Please join me to welcome them all.

J. Horgan: I just want to inform members of the House that today marks my 25th wedding anniversary, and I know members will want to offer their sympathies to my beloved spouse and my reason for living, Ellie.

C. Evans: As you know, it takes a very special kind of person to represent the South Okanagan, and I've been looking here…. A former member of the territory, Jim Beattie, is somewhere loose in the buildings, but it would appear that there are so many people that have come today to watch the opposition eviscerate the budget that there's no room for Jim. I just want to close by saying that he used to be a lonely MLA, but he is now elevated to the highest career level you can get. He's farming in Ontario.

Tabling Documents

Mr. Speaker: Hon. Members, I have the honour to present the Auditor General's report No. 15, 2008-2009, Wireless Networking and Security in Victoria Government Offices: Gaps in the Defensive Line .

Statements

(Standing Order 25

b) JOS KONST AND SMITHERS SKI HILL

D. MacKay: Just a short 50 years ago — as we get older, the years pass very quickly, but 50 years ago is a short time — a young fellow by the name of Jos Konst lay in a hospital bed in the Bulkley Valley District Hospital in Smithers, looking at the Smithers ski hill with a pair of binoculars. You can do the math yourself. I'm not going to tell you how old Jos was, but he was 11 years old 50 years ago. So he was looking at the ski hill — which, by the way, is the best ski hill in British Columbia bar none. He dreamed of connecting the town of Smithers to the ski hill.

A few short years ago Jos actually approached the Smithers Rotary Club and asked them if they wanted to take on a dream that he had 50 years ago. And do you know what? The rotary club said yes. They gave him $5,000 immediately, and they went out, and they started fundraising. I can tell you the fundraising through the community was tremendous. Everywhere they went, they got money to help build this project.

Today that dream is a reality. You can now ski from the top of the Panorama ski run in Smithers to the downtown valley where Smithers is located. It's a vertical drop of 3,775 feet, and there's nothing nicer than whizzing down that ski run and having the air flow through your hair.

Remember if you can dream it, you can do it. Jos Konst did it, and Smithers is better place for it.

ALL-NATIVE BASKETBALL TOURNAMENT

G. Coons: I'd like to take this opportunity to once again acknowledge a very important event that occurs yearly in Prince Rupert on Tsimshian traditional territory, the All-Native Basketball Tournament. Last week it was the 50th anniversary.

[1350]

This week-long tournament, which occurs at the beginning of February, has a long and prestigious history. What started out with a small number of teams has flourished to 68 teams from all over British Columbia, including our American neighbours to the north. Over 900 athletes came to town in droves to take home the glory.

This is one of the largest annual sporting events in Canada. This was truly an international spectacle, as we allowed the Hydaburg, Alaska, teams to take home the

[ Page 13777 ]

masters and seniors titles and the Metlakatla, Alaska, the women's title.

North Shore, from the Lower Mainland, captured the intermediate in a hard-fought battle with their local friendship house team. Special thanks must go to the many sponsors and to the all-native tournament society, especially Clarence Martin and Peter Hogan.

Also included at this year's 50th was a cultural day with over 300 singers, dancers and drummers from nine different nations, who performed individually and as a group. This showcase of talent and culture is the real spirit of British Columbia.

My good friend Sam Bryant must be acknowledged for his tenacity in the organization of this magnificent event. The organizing committee realized that this was not just a basketball tournament but a potlatch, where people from many nations come together to revive acquaintances and establish new relationships. It was a culture fest for nine straight days.

Michael Curnes from the city of Prince Rupert also organized the first annual native film festival that showed 13 films and documentaries in the newly converted film facility. In addition, Brian Robinson put together the first annual native music fest, featuring ten great regional musicians and groups. My favourite was the Nassville Five, from the Nass Valley — a great hit.

Hon. Speaker and those in the House today, I encourage you all to book for the 51st All-Native Basketball Tournament and culture week next February in Prince Rupert.

GROUSE MOUNTAIN

R. Sultan: With acknowledgment of my friend from Smithers, I would like to tell the House about another jewel of our province: Grouse Mountain. In its 82nd year of operation, this landmark not only provides a beautiful backdrop for all those beautiful photographs of Vancouver; it attracts over a million visitors a year. They jog, climb or gondola to the top. There they find the best B.C. has to offer: spectacular scenery, hiking, skiing, B.C. food and beverages in a gourmet restaurant.

One night last weekend downhill skiers lit their red flares in single file and made S-curves down the cut — a spectacular display seen from all over the city of Vancouver, marking the beginning of the 365-day countdown for the 2010 games. Grouse Mountain stayed open 24 hours straight for that entire weekend as a test event for their plan to open 24-7 throughout every day of the entire winter games.

Grouse Mountain continues to invest in its recreational infrastructure — this year alone, $12 million. They opened the season with two new chairlifts and a brand-new attraction, the mountain zip line. Later this year they'll be erecting B.C.'s first urban wind turbine to generate green power, and they continue to improve the famous Grouse Grind, contributing to the fitness levels on the North Shore.

Grouse Mountain is an important economic engine — the largest youth employer we have on the North Shore. Tens of thousands of youth find their first job there. When the world arrives for the winter games, Grouse Mountain will showcase the best our province has to offer.

GURU RAVIDASS SABHA

R. Chouhan: Earlier today, along with many other members and the leader of the official opposition, I had the privilege and honour to receive and host a reception for the delegation from Guru Ravidass Sabha, also known as the Gilley temple in Burnaby.

Under the leadership of the president, Mr. Bill Basra, and trustee Mr. Hukam Chand, the 36-member delegation is here from all over the Lower Mainland, Vancouver Island and India to celebrate the 632nd birthday of Shri Guru Ravidass.

Guru Ravidass taught spirituality in the 14th century in India, based on emancipation from the oppression of the Indian caste system. He was born in an oppressed community considered untouchable. From childhood itself, Guru Ravidass Shri had spiritual traits and soon came to be known as a highly enlightened saint. He started preaching these spiritual ideas to the rich and poor alike.

[1355]

His popularity increased day by day, and soon kings and queens of different princely states became his disciples. He stood for equality for everyone. He raised his voice against racism. He taught the oneness and omnipresence of God and that the only way to moksha is to free the mind from duality.

To pay a true homage to Guru Ravidass, we need to celebrate his birthday every day so that his message of love and equality reaches out to everyone. Once again, please join with me to welcome the members of the Guru Ravidass Sabha and the Gilley temple to this temple of democracy.

SQUAMISH NATION WATERFRONT GREENWAY

K. Whittred: This last Sunday was a beautiful day, and my husband and I went out and enjoyed a walk along what is the new Squamish greenway in my community. A few weeks ago the city of North Vancouver and the Squamish Nation together officially celebrated the completion of the Squamish Nation Waterfront Greenway, and this is part of a North Shore trail which will eventually link Horseshoe Bay with Deep Cove.

This particular portion will link the city's waterfront park along the waterfront to King's Mill Walk, which is a little bit further to the west. As you enter this portion of

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the Squamish trail, you go through a wonderful gateway that is an impressive piece of public art created by local first nation artist Wade Baker. It's called Gateway to Ancient Wisdom , and it's a stainless steel and red cedar sculpture greeting visitors to the Squamish Nation and inviting them to enjoy the trail.

It's through this relationship-building between the city of North Vancouver and the Squamish First Nation that has made this waterfront pathway a reality. In fact, through its work on this trail, the city of North Vancouver has received national acclaim. Last year the city had the honour of receiving an award of merit in the urban design category at the 2008 Design Exchange Awards for its portion of the trail. This is a highly prestigious award which recognizes the values of design and partnerships across the country.

I welcome all of you, the next time you come to the North Shore, to take this breathtaking walk along the Squamish Nation trail, and I particularly invite you to admire the amazing work of renowned Squamish artist Wade Baker.

ADVOCACY FOR RENTERS

S. Herbert: I rise today to speak about standing up for renters. In my community of the west end of Vancouver we know something about renting and renters. Over 80 percent of my constituents in the West End rent, myself included.

My community has been facing challenges which it hasn't seen for many years. Large property management companies like Hollyburn Properties and smaller companies like Gordon Nelson Investments have been buying up massive numbers of buildings and have proceeded to evict, threaten to evict or proposed to increase rents by up to 73 percent to good tenants who have always paid their rent and their yearly rent increases for many years.

This crisis has now started to spread to many other communities including Victoria, Kamloops, Kelowna and Comox, to name a few. You know things are bad when people who were once housed are ending up on the street or paying such high rents that they can't afford to eat.

But there are those standing up for change — volunteer groups like Renters at Risk and non-profits like Tenants Resource and Advisory Centre, groups without a lot of resources but with a passion for creating a balanced landlord-tenant relationship. They've worked with those struggling with the language, struggling with the forms. They've worked with landlords to make sure that they know their rights. They've worked with many to ensure that they can stay in their homes.

In troubled economic times we must be doing more to keep people housed. People need to know that their government is watching out for them so that they can have stability and confidence for their future. They are calling on us to change the Residential Tenancy Act. We can, and I believe we must, act now. I thank them for their activism on behalf of the renters of British Columbia.

Oral Questions

BUDGET PROVISIONS FOR PUBLIC SAFETY

C. James: Gang warfare has been escalating in B.C. for the last two years. Last week we saw the Premier hold a press conference in Vancouver. He said he was going to finally start addressing the challenge. Then yesterday his Finance Minister turned around and tabled a budget that cuts anti-crime programs.

[1400]

My question is to the Attorney General. Why should British Columbians trust this government to address crime, when the budget contains cuts to courts, prosecutors and Corrections?

Hon. J. van Dongen: Our government remains committed to the agenda that was laid out by the Premier. As we indicated, we were working on a number of issues that we have worked through, including 168 additional police officers that will all be devoted to fighting organized crime, fighting gun violence.

That money was negotiated with the federal government, and additional dollars were also achieved through our provincial RCMP agreement. Those are all new dollars, all additional dollars, in addition to all of the traffic fine revenue that we are putting to local governments and that they use to hire additional police officers.

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

C. James: Unbelievable. Unbelievable, when we see another killing yesterday. This government has words and no action, once again.

The facts are in the budget. Page 137 — the budget for protection of persons and property cut by $35 million since 2007-2008. And this is even more shocking: it will be cut by another $84 million in the next two years.

The minister can try and explain: "We're partnering with this, and we've got the dollars somewhere else."

The facts are clear. The numbers are not there. This budget has been cut. When is this government going to stand up and tell the truth to the public? They're doing nothing to fight gang crime.

Hon. J. van Dongen: I talked about additional police officers to the specialized integrated teams. The Premier also announced additional prosecutors — ten specialized prosecutors, senior prosecutors, to support the 16 specialized prosecutors…

Interjections.

[ Page 13779 ]

Mr. Speaker: Members.

Hon. J. van Dongen: …working with the police. We also confirmed the $185 million of capital spending on new prisons.

I haven't heard the Leader of the Opposition…. I haven't heard her make a decision. Take action. Take action, Member. Take action on the issue of the Willingdon pretrial facility, because it is your NDP mayor that now talks about retroactively changing zoning. What is your opinion about that, hon. Member?

Interjections.

Mr. Speaker: Members.

Leader of the Opposition has a further supplemental.

C. James: We all know that action speaks louder than words. This budget cuts support for crime and safety — cuts support. Twenty-three killings last year alone, 13 shootings in this year alone, and what are the government's priorities in yesterday's budget? Cuts to courts. Cuts to prosecutors. Cuts to Corrections. Resources to protect British Columbians are down next year and the year after that.

No matter which way anyone on this side tries to explain it, the numbers are clear. There are cuts in community safety.

So I'd like to ask anyone on that side of the House: will you stand up and say to the public how you can say you're supporting community safety when you've cut the budget this year and next?

Hon. J. van Dongen: I suggest that the member talk to the police. And what do the police say? What do they say?

Interjections.

Mr. Speaker: Members.

Continue, Solicitor General.

[1405]

Hon. J. van Dongen: I'm going to tell you what the police say. What the police say is that they need amendments in the Criminal Code. They need amendments with respect to disclosure, and they need amendments with respect to wiretapping. I'm asking the member opposite if she's made the necessary phone calls to support those changes.

But what else do the police say? I'll tell you what else the police say. They say — and I quote Cpl. Peter Thiessen: "Frankly, we don't think it's a resource problem. It's a problem of how quickly we need to do our job. We have to work within a set of rules that, for lack of a better term, is handcuffing us in many ways to move quickly when we have information."

That's what he says. "The provincial government has provided us with a number of new tools that they announced last Friday that is going provincewide. That has been a huge help."

That is what the police say.

S. Simpson: Clearly, this minister has learned well from his political master. He doesn't show the political courage to stand up, be accountable when he gets caught up in numbers that don't add up. Instead, just like the Premier, he points his finger at everybody else. Well, British Columbians have had enough. They have had enough.

Now that B.C. is the gang capital of Canada, as we've heard — over 30 killings in the last couple of years, a woman murdered in front of her four-year-old child yesterday — who knows what tomorrow brings?

Now the Premier and this Finance Minister are cutting the budgets for the courts, for prosecutors and for Corrections. When will the grandstanding end? When will you finally stand up and own up to the fact? It's a political problem for you. You don't care about the problem of safety in our community.

Hon. J. van Dongen: I want to, on behalf of the government, again express our concern for the families of victims — of all victims. I want to reiterate the message of the Premier that this government will do whatever it takes, whatever is necessary. We have made major increases in policing over the term of our government. We continue to do that. We continue to focus additional resources, such as Crown prosecutors and jails for offenders. We will do whatever it takes.

If anyone is guilty of grandstanding, it is the members on the other side of the House who can't even support a simple decision such as a prison properly located on Willingdon in Burnaby.

Mr. Speaker: The member has a supplemental.

Interjections.

Mr. Speaker: Members.

S. Simpson: This situation with gangs and gun violence has been spiralling out of control in this province for months and months and months. It didn't start last Friday. The Premier has made commitments that are rhetorical only, that there's no substance behind. The first substantive thing that we see from this government in relation to this is this budget.

And what do we see in the budget? We see cuts for courts, cuts to prosecutors, cuts to essential services. That's the reality when you look where the money is.

My question to the minister is this. At what point is this government going to bring forward a real program with real resources, stop misleading the people of this

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province as a government and move on? It's time to do something about gang violence.

Hon. J. van Dongen: I can't believe what I just heard from that member. When you look at the number of increases and the substantial dollars of increases in policing — 950 additional police officers since 2002; $128 million of new money in provincial policing…

[1410]

Interjections.

Mr. Speaker: Members.

Hon. J. van Dongen: …an 89 percent increase since 2001; $66 million into integrated policing in this province; $53 million of additional federal money that the province negotiated with the federal government; another $17 million on top of that in our provincial RCMP agreement; additional prosecutors on the organized crime file…. And this member has the nerve to say that this agenda started last Friday.

The fact is, Member, we've been working on these issues for considerable periods of time while you've been talking about it.

Interjections.

Mr. Speaker: Members, before we continue….

Interjections.

Mr. Speaker: Members. People get a chance to ask the question; people get a chance to answer the question. Let's take a little bit of time and think about that.

M. Farnworth: Grandstanding is the minister, the Attorney General and the Premier standing at a press conference, saying they've got a plan and knowing full well it's not funded in this budget. That is grandstanding. So my question to the….

Interjections.

Mr. Speaker: Members.

Sit down for a second, Member.

Interjections.

Mr. Speaker: Members.

Member, continue.

M. Farnworth: The member over there thinks holding the budget is a prop. Well, guess what. After I've seen what this government is prepared to spend on public safety, yeah, it is a prop. That's all it is.

Interjections.

Mr. Speaker: Members.

Continue, Member.

M. Farnworth: So my question….

Interjections.

Mr. Speaker: Members.

Continue, Member.

M. Farnworth: My question to the Solicitor General is this. He said he wants to do everything possible. Then why is that not reflected in this budget? Why is it that only cuts are reflected in this budget?

Hon. J. van Dongen: Our budget supports our agenda to fight crime — organized crime — and gun violence in this province. There's $185 million in capital investment — in new, modern, safe facilities for prisoners. If the member opposite wants to demonstrate his commitment to public safety, he might want to convey to the mayor of Burnaby — the NDP mayor of Burnaby — the safety record of the North Fraser pretrial facility and the good work of the professional corrections staff in that facility.

He knows of the safety record. It's in his community, and I'm wondering when he is going to stand up to the NIMBYism, the political opportunism that's going on in Burnaby right now. When is he going to stand up to say: "You know, this isn't in the public interest"? When is he going to do that?

Mr. Speaker: Member has a supplemental.

M. Farnworth: Your Solicitor General, your Attorney General, your Premier and government failed in a budget to address the serious issue of public safety and court services in this province. So my question….

[1415]

Interjections.

M. Farnworth: Hon. Speaker, we're not getting an answer from the Solicitor General, so let's try the Attorney General. How do cuts to court services and prosecutors in this budget result in better public safety for the people of British Columbia?

Hon. W. Oppal: The member for Vancouver-Hastings quite dramatically said that the gang problems have been escalating for the last three or four months or number of months. I have news for him. They've been with us for decades. They were with us in the 1970s when the Big Circle Boys established themselves here. They were here….

[ Page 13781 ]

Interjections.

Mr. Speaker: Members.

Continue, Attorney.

Hon. W. Oppal: I'm quite prepared to run out question period if they want to do that.

Interjections.

Mr. Speaker: Members, Members.

Continue, Attorney.

Hon. W. Oppal: I was there in the '80s, and I was there in the '90s. We had some of the worst gang warfare in the 1990s. That was the height of Indo-Canadian gang violence. That was when the Dosanjh brothers were gunned down in broad daylight. That's when Mr. Olson, an innocent victim walking his dog, was shot.

Interjections.

Mr. Speaker: Members.

Hon. W. Oppal: Where were you then? Where were your bright ideas at that time? And you want to bring up the question of prosecutors? Let me….

Mr. Speaker: Thank you, Attorney.

Next question.

Interjections.

Mr. Speaker: Members.

ECONOMIC FORECASTS

AND BUDGET PROCESS

B. Ralston: I think the Attorney General forgot in his wandering down memory lane that the criminologist Mr. Plecas from the University College of the Fraser Valley said that the number of gangs in British Columbia has gone from under ten at the beginning of this century up to over a hundred. The Attorney General seems to have forgotten that fact.

My question is to the Minister of Finance. The budget is based on forecast numbers from January 9. Back then the Finance Minister was predicting no deficit in this fiscal year. Why would the Minister of Finance expect anyone to believe his budget when it's based on a forecast that's clearly out of date?

Hon. C. Hansen: This year, as we do every year, we engage with our Economic Forecast Council in the months leading up to the budget. What the Economic Forecast Council was telling us as of the middle of January was that we should expect, in British Columbia, GDP growth in 2009 of zero percent on average.

That is why, in building the budget, we do what we do every year, and that's build in extra levels of prudence. We actually built the budget based on economic forecasts of 0.9 percent reduction in the economy compared to the zero percent that the Economic Forecast Council had indicated as recently as the middle of January.

But I can tell you that the way we build budgets today is a pretty dramatic shift from what we saw in the 1990s. We rely on our independent, outside advice. We don't make up numbers and project revenues that don't exist like they did in the 1990s.

Mr. Speaker: Member has a supplemental.

[1420]

B. Ralston: Back in the middle of January the minister was predicting no deficit in this fiscal year. The Economic Forecast Council asked to meet with the minister again prior to his tabling the budget.

Why wouldn't the minister meet with those experts and table a budget that's realistic, based on economic reality today, not upon his fantasies?

Hon. C. Hansen: I met with the Economic Forecast Council on December 5, which is their tradition every year — that the Finance Minister will engage with the Economic Forecast Council. This Economic Forecast Council is made up of 12 of Canada's leading economists from all across Canada.

At the time that I met with them on December 5 we indicated to them that we would entertain changes to their forecast up to the middle of January. We did that this year, and we took their forecast. We built the extra level of prudence into it by not using the zero number that they had indicated to us on average as of the middle of January, but in fact lowered the GDP expectation to minus 0.9 percent. That is what we have built this budget on.

R. Fleming: Can the minister explain how personal income tax revenue can go up in this budget as thousands of people are losing their jobs? The economy is in the midst of a recession. We lost 68,000 full-time positions in January alone in British Columbia.

Is the minister and his budget telling us that when the economy goes down, personal income tax revenue goes up? Or is he banking on a September surprise — a new budget that's actually based on the cold reality going on in the economy?

Interjections.

Mr. Speaker: Members.

Minister, just take your seat.

[ Page 13782 ]

Interjections.

Mr. Speaker: Members.

Hon. C. Hansen: Actually, this brings back memories of when I first became a member of this Legislative Assembly in 1996 when a government was re-elected based on a manipulated budget, based on political revenue projections that did not exist, that could not be substantiated.

I remember in 1996 a Minister of Finance of an NDP government that came in and asked for a little wiggle room and brought in a new budget that was totally different from the fudge-it budget that Glen Clark and the NDP tabled going into the 1996 election.

We base our revenue projections on the best independent advice that we can get. The revenue projections that are contained in this budget are based on the economic analysis by independent sources and based on the expert and independent advice of some of the finest public servants that have served this province, that work in the Ministry of Finance.

Mr. Speaker: The member has a supplemental.

R. Fleming: Well, I can't wait to see that Finance Minister wiggle out of a budget that doesn't even increase moneys for Olympic Games security when his federal counterpart says we need a billion.

Let's look at another assumption in this budget. The minister likes to talk about confidence, but British Columbia right now has the lowest consumer confidence in Canada, and one of the hardest hit areas in our economy is retail sales. Can the minister explain how he expects sales tax revenue to go up in his budget when sales and retail confidence are tanking?

[1425]

Hon. C. Hansen: As I've travelled around British Columbia over the last number of months at times when we have seen the global economic crisis getting worse day by day and week by week, what I have found in every corner of British Columbia is British Columbians who do have confidence in this province, who actually believe that we are on a sound, solid economic footing as a result of the work that we've done over the last eight years.

British Columbians know that we are going to weather this economic challenge better than just about any other jurisdiction in North America. British Columbians will be asked the question in a few months' time as to which leadership they have more confidence in as we go into the next decade.

B.C. HYDRO RevenueS and RATES

J. Horgan: Here's some more fictional fun with figures for the Minister of Finance. Yesterday B.C. Hydro announced their third quarterly revenues were down $29 million. That's third-quarter revenues down $29 million. Yet in the budget the minister's depending on Hydro dividends increasing by 27 percent.

So where are you getting your expert advice on this one — the Wizard of Oz? Either you're going to raise rates, or you're going to be using pixie dust. That's the only way this is going to add up.

Interjections.

Mr. Speaker: Well, we're really going to wait for silence now. Members.

Hon. B. Lekstrom: I thank the member for the question. B.C. Hydro works diligently on all of our behalf, and I think you would share that vision about a Crown corporation that is second to none. Their revenue that they bring in on behalf of every British Columbian is based on the projections that they put forward and through their filings with the BCUC. I'm sure the member is aware of what they have put forward in their documents before the BCUC this year.

The ability for them to generate revenue on behalf of each and every one of us, not just in this Legislature but in this province, benefits each and every one of us as ratepayers of B.C. Hydro. I'm confident that, although you feel that the numbers are not there to suffice what you believe you'd like to spend, we believe they are.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

J. Horgan: I do, although I'm now brimming with confidence after hearing that answer from the Minister of Energy. I'm still not clear how it is that you could have a reduction in revenue in the third quarter and a 27 percent increase in dividend the next year.

But since the Minister of Energy is on his feet, perhaps he can riddle me this. The budget says that the average cost of electricity is going to be $55 a megawatt hour next year. But by policy, this government is mandating that Hydro buy its energy from independent power projects for anywhere between $75 and $100 a megawatt hour. Is that more wizardry?

To the Minister of Energy: how do you reconcile prices up here for private power, prices down here at the market?

Hon. B. Lekstrom: Again, thank you to the member for the question. How do we reconcile it? I mean, I can tell you…. I know you've read about the heritage contracts that we have with B.C. Hydro. The new power that comes on line, whether it be through the IPPs — which

[ Page 13783 ]

I know you would like to put a moratorium on, put over 1,100 people out of work….

[1430]

Interjections.

Mr. Speaker: Minister, just take your seat.

Members.

Interjections.

Mr. Speaker: Members. We're just going to wait for a second.

Continue, Minister.

Hon. B. Lekstrom: We do want to talk about this, as I said. For the opposition to cheer shutting down over 1,100 jobs in rural British Columbia is shameful. To take away $4.5 billion worth of investment going on in British Columbia, mostly northern and rural British Columbia, is appalling.

You wonder why the people of British Columbia don't trust you. All you have to do is listen to the questions you ask.

But let's be clear on something. There are 46 independent power projects operating in this province today. Roughly half of those projects were begun under the leadership of the NDP in the 1990s. So don't be too hypocritical, ladies and gentlemen. These are good projects. They're good jobs for rural British Columbians and all British Columbians, and they're good projects that we're going to support on this side. You can shut them down if you want.

[End of question period.]

Interjections.

Mr. Speaker: Members.

D. Chudnovsky: I have a petition to present.

Mr. Speaker: Proceed.

Petitions

D. Chudnovsky: The petition is signed by constituents calling on the government to protect the residents of British Columbia from the health hazards, pollution, nuisance and interruption to normal daily life from all residential wood-burning smoke and odour.

S. Hawkins: I present a petition on behalf of myself and the member from Lake Country — 11 citizens of Kelowna who are concerned about the privatization of B.C. Hydro.

Hon. I. Chong: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

Hon. I. Chong: I see a number of guests have just arrived in the gallery. I have visiting from Glenlyon Norfolk School, a junior school in my riding, 44 grade 5 students and five adults. They've just missed question period, but I'm sure they're very interested in the debate that's about to follow. I would ask the House to please make them all very welcome.

Orders of the Day

Hon. M. de Jong: Of course, question period is replayed at 11 o'clock tonight on local channels, Mr. Speaker.

I call continued second reading debate on the budget.

Budget Debate

(continued)

B. Ralston: It's my privilege to resume debate on the budget, carrying on from where I left off yesterday. I want to begin by talking about the third quarterly report, because that is a document that's tabled with the budget and gives an indication of recent activity in the economy and how it's had an impact on government finances and government projected revenue.

During the fall just past, the Minister of Finance was pressed by myself, among others, to come forward, given the extraordinary financial events that had taken place both in the United States and around the world and the impact of the financial crisis in September as it began to work its way into the real economy — that impact on government revenue here in British Columbia.

[1435]

[K. Whittred in the chair.]

The minister did make a minor concession by tabling the second quarterly report, ordinarily tabled in early December, on November 24 last year — 2008. In that quarterly report, that chronicles economic activity from the perspective of the government up to the end of September of last year.

What this budget is about is the credibility of the economic forecast that the minister is using in the budget that he just tabled yesterday, and this quarterly report gives some indication of just what the real activity in the economy is. It's interesting to note that the projected surplus before a forecast allowance at the end of the first quarterly, three months prior to the end of September, was $1.77 billion, and then with a forecast allowance reducing that to just over a billion dollars.

[ Page 13784 ]

At the end of the first quarterly, at the end of the first three months after the budget was tabled, the government was projecting a billion-dollar surplus. At the end of the second quarterly, given the changes that had gone on, obviously there were drastic downward revisions. The surplus before the forecast allowance fell $800 million from $1.77 billion to $950 million, with a forecast allowance of $500 million, making for a surplus projected to year-end of $450 million.

As one can surmise by simply listening to those figures, that's a very precipitous drop. It's a big drop in projected government revenue. Obviously, forecasting is difficult in this environment and the subject of much comment as people, particularly in the financial industry, look back on just how wrong forecasts were. Indeed, there's some debate in the financial industry about how effective some of the quantitative forecasts have been or have not been, given the predictive power that they claim for themselves and the actual result in the sense that they completely missed and failed to anticipate the collapse of the markets in September.

Obviously, forecasting has its challenges, and certainly conventional forecasting has been severely tested and its credibility shaken. Nonetheless, there are relatively traditional sources or streams of revenue for the provincial government that are easily identified and are traditionally composed together in a forward-looking outlook to make a forecast as to what projected revenue might be in this fiscal year.

With the budget, the third quarterly was tabled, not prior to the debate we had last week in the previous session, when the minister suddenly decided mid-January…. Apparently there was a day — we're still not given any specifics; still not shared with the public — where projected revenue dropped $300 million. It's left to talking points for government members and cabinet ministers. It's repeated but never explained. No documents are provided about just how that epiphany came about, but apparently that's what is claimed.

At that point the minister revised his public stance. Up till then he was saying publicly and stating publicly that he did not expect to deliver a deficit budget in the new fiscal year. That's the budget he just tabled. In mid-January that changed, necessitating the debate that we had last week.

[1440]

But the figures for the third quarter were not shared with the public or with members of the Legislature. There's no special insight that we're permitted to have. We simply received the documents with the budget yesterday, along with everyone else.

What is striking about the third quarterly report is the degree to which government revenue projections have tumbled again. If in the previous quarter projected government revenue declined $800 million, the projected revenue decline in the last quarter is $900 million, leaving a projected surplus to year-end of $50 million. That's on a budget of almost $39 billion — so a very, very small percentage. There's no forecast allowance included in that — in other words, no margin for error.

Ordinarily as you approach the end of the fiscal year, the forecast allowance diminishes. Obviously you have history behind you instead of prospective revenue, and that's a traditional reduction of the forecast allowance. But it is striking here that there's no forecast allowance at all. Indeed, this theme of not using a forecast allowance at all is a theme that is expanded in the budget that's just been tabled. So I might divert slightly from my discussion of the third quarterly.

It's significant that the deputy minister, who is statutorily required to place his cautions on the budget at the very front of the budget, in a document says: "Unlike previous years…."

I'm reading from what he says, and this is a significant change to practice. It's a significant change to some of the strong claims that have been made by the government to prudent financial management. It's a significant change, significant enough that the Deputy Minister of Finance, in the front of the budget, feels obliged to note it.

He says: "Unlike recent years, there are no forecast allowances included in the fiscal plan, and the government will be managing risks to the fiscal plan through expenditure management and use of the contingency vote."

The whole point of the forecast allowance was to build in a cushion, if you will, or a margin of error, some flexibility, recognizing the difficulty in making economic predictions and particularly predictions over a full budget year. So the use of the forecast allowance, much touted and much ballyhooed as a prudent way to demonstrate a measure of caution in estimating government revenue and to give the government some leeway in achieving its targets, has been abolished. It's not present in this budget.

That's very clear when one sees what's been tabled here in the budget — for the reason that that particular forecast allowance is no longer convenient to the government in the fiscal story that it chooses to tell at this time in the electoral cycle, a couple of months before the election.

If it were included, which ordinarily it would…. The minister himself, when he closes debate, will explain — or perhaps some enterprising journalist will ask him — why that is the case. There's nothing in the budget itself other than the stark comment of the deputy minister, the senior public official responsible for preparing the budget, that there has been this change made — a change to past practice of all the budgets of this century.

It's not clear why that is done. But if the $750 million forecast allowance were added, obviously that would increase the projected deficit by some considerable amount.

[1445]

[ Page 13785 ]

I think it follows — although some commentators, government supporters, have said otherwise — that there is a risk. Indeed, the document that's also tabled with the budget — the fiscal and economic review, which is an analytical survey of the province's economy in many respects — and prepared by public officials suggests that the risks to the forecast are more on the down side than they are on the up side. I think that's a prudent caution.

Just as one can overshoot — in the sense of underestimate — the potential surplus that one might accumulate in a good year, it's also prudent…. It follows, I think, fairly straightforwardly that one could also underestimate the degree to which government revenue might turn down further.

While one — certainly from the perspective from the Finance Minister or the perspective of a finance critic — might indeed wish that the recession is short, that it's shallow and that we build out of it as a province, because the impact of the recession on people throughout the province will be tough…. If the prediction is not a good one — and recent events show that it's very, very difficult to make accurate predictions…. If events turn downward, it would seem there is no forecast allowance built into that budget that at least acknowledges that the prediction that's made is one that might not be accurate.

If we were to add the $750 million forecast allowance to the $495 million deficit that's forecast in this budget — and I'll get to the likelihood and the veracity, as I see it, of that number — it would obviously be a deficit of over a billion dollars. It would be $1.245 billion.

Perhaps the minister is wary of the political effect of saying that the deficit is going to be over a billion dollars. I'm not sure. I'm not sure why these principles that have been touted so often — cautious and prudent budgeting with a provision for a forecast allowance — have been pushed aside at this time in the electoral cycle, although I think the public might have an idea.

To return to the third quarterly. The third quarterly predicts a simple surplus of $50 million. That is fine budgeting indeed. In fact, that's projecting to the end of March. So the final months of the budget that will compose the remaining three months are obviously January, February and March.

We've heard from the minister, from other ministers, from the Premier, from the member for Kamloops in an interview — and I think other members who've got the talking points — that government revenue shifted downwards in January — not captured by the third quarterly report, but shifted downwards in January by $300 million.

We've seen a decline of revenue projections in the second quarter, down $800 million in the third quarterly, down $900 million — a shift in January that's spoken of but not documented of $300 million in a single day.

Is it not reasonable to assume, to guess — from my position, not having access to the if not daily summaries of government revenue from different sources available to the minister, certainly weekly briefings from senior staff as to what is going on in the economy and its impact on government revenue…. It's difficult to imagine that given all that's taking place in the economy, this number will be borne out by the end of March.

Unfortunately for the public — in order to assist the public in making this judgment — the reality of the cycle is that the public accounts of the province, including the final numbers for the budgetary year ending March 31, won't be tabled until the end of June — that is, after the election.

But my prediction is that in this budget year, this fiscal year to March 31, there will be an actual deficit. Contrary to what the minister says, contrary to the prediction that's contained in the third quarterly report, there will be an actual deficit.

[1450]

When you look at other corroborating economic evidence, the last quarter in the United States — October, November, December — saw a close to 4 percent decline in real GDP. The Japanese economy, the second-biggest economy in the world and one of our major trading partners — indeed, our first trading partner in the Asia-Pacific — saw a decline of 3.3 percent in the last quarter — annualized, a decline in GDP of 12 percent.

I looked at the Wall Street Journal on line this morning prior to preparing this speech. The Wall Street Journal and the U.S. Department of Commerce are predicting an over 4 percent decline in the first quarter — that is, the quarter we're now in: January, February and March of this year — in the United States. A 4 percent decline in GDP — that's obviously very, very troubling.

For the minister to table the kind of budget that he does seems to me to at least challenge an emerging economic orthodoxy of commentators, experts, economists and business people not only here but around the world about what's taking place in the real economy.

I can well understand why members of the Economic Forecast Council wanted to meet with the minister again prior to the budget being tabled, because between January 9 and yesterday…. It's a long time in the world of international finance and the economy these days, and as everyone points out, things are very, very volatile. So the minister, I would say, does not serve the public well by refusing to engage in that kind of realistic discussion.

I fervently hope, as I say, for a short recession and a quick recovery, as I'm sure he does. But that may not be the case. That may not be the case, and the job at hand, the task at hand, is to prepare for the possibility — and that possibility seems to be growing — of a sharper and deeper downturn than might have been expected only several months ago and even at the beginning of January, just a month and a half ago.

This is the topic of discussion among finance ministers in the G7 and other government leaders around the world. The OECD, the Organization for Economic

[ Page 13786 ]

Cooperation and Development, has 30 members. Canada is a member of that. They recorded the biggest decline in output since they started reporting records in 1960, for just the previous quarter. That was reported just yesterday.

They go on to say that leading indicators for non-members of the OECD…. China is an important and certainly emerging economy, an economic powerhouse and, as will become clearer as we head further into this century, one of the leading economies in the world, if not destined to be perhaps the leading economy by the end of the century. But China, India, Russia and Brazil….

What the OECD says is that the outlook has significantly deteriorated in major non-OECD member economies that are also facing strong slowdowns. They go on to say that more action is required to restore confidence in the global financial system, and they chronicled some of that at their recent meeting of G7 finance ministers in Rome.

[1455]

Some of our traditional customers…. Some of our traditional links with Great Britain, although perhaps not as important as it was historically for what is, of course, British Columbia…. The Confederation of British Industry — that's the major employers, the equivalent of the Business Council of British Columbia — in an

article on Monday predicted the biggest drop in output since the war and a drastic increase in unemployment. They're predicting a drastic contraction of the economy there.

They're "revising its forecasts down sharply…." I'm reading from an

article in The Guardian newspaper: "The CBI is revising its forecast down sharply and now expects the economy to contract by 3.3 percent this year, down from its previous forecast in November of a 1.7 percent decline as the global economic downturn continues to worsen. It expects GDP growth to flatten out at zero percent in 2010."

That's just some of the grimmer news from some of our major economic partners, our traditional allies. As the minister has stressed, that's not quite as confident in B.C.'s relative economic autonomy and independence from global economic trends.

Those are our major trading partners — whether it's the United States, whether it's Asia-Pacific or whether it's Europe. Those are the economic influences on the economy here in British Columbia. Their forecasts are changing rapidly, and there's a greater risk on the downside.

Indeed, the Deputy Minister of Finance talks about the risks to the predictions in the budget. So this is not something that I have devised myself.

I'm going to simply quote the three-year fiscal plan on page 43, which talks about risks to the fiscal plan. These risks don't seem to have been fully accounted for in the budget that the minister has tabled. So if I might — and I'm quoting:

"The major risks to the fiscal plan stem from changes in factors the government does not directly control. These include assumptions underlying revenue and Crown corporation and agency forecasts such as economic factors, commodity prices and weather conditions; the outcome of litigation, arbitrations and negotiations with third parties; potential changes to federal transfer allocations, cost-sharing agreements with the federal government and impacts of the provincial income tax bases arising from federal tax policy and budget changes; and" — significantly — "utilization rates for government services such as health care, family and child services, and income assistance."

There's a table over the page which talks about the impact of some of those changes on…. They call it "key variables on the surplus." However, I don't know whether that's something that wasn't edited. Perhaps it would be key variables on the deficit at this point.

It looks at key fiscal sensitivities. If there's an increase in nominal GDP, the annual fiscal impact here in British Columbia is $150 million to $250 million. So the reverse is true, obviously. If the GDP declines 1 percent, that has an impact in the upper end of the range of $250 million.

The impact of lumber prices on the government budget is there. Natural gas prices, an increase of a dollar. A decrease is a $275 million to $325 million impact on the bottom line of the government.

Interest rates. An increase of one percentage point reduces the fiscal impact on the government of $80 million, so a decrease in interest rates would have a positive effect.

Debt. An increase of $500 million has an annual impact of minus $18 million.

These are the risks that are set out by the ministry, by the deputy minister, in composing this budget. Have they been fully accounted for either in the projection to the year-end that's contained in the third quarterly or in the numbers that have been tabled here with the budget yesterday?

[1500]

Significantly, the deputy minister…. It is important to look at what the deputy minister has done, because the deputy minister sometimes has spoken in news media. Certainly, qualifications on the budget placed there by a deputy minister in pursuit of his or her statutory duties are something that are very important to pay attention to, to understand what the budget is really all about. It's a question of the deputy minister exercising their proper jurisdiction, their proper independence and their statutory obligation to step forward and say: "Here is where this budget has some qualifications."

One has to only think back to…. These can be the sign of things to come in the sense of problems that will result in the fiscal management or arrangements that the government has chosen to pursue. One can recall that Deputy Minister of Finance Tamara Vrooman, who has now left government service, put a significant quali-

[ Page 13787 ]

fication on the budget several years ago about the budget of several health authorities. Those budgets, she said at the outset of the budget, had not been finalized.

So when it came to presenting the budget, the budget had not been finalized in several key health authorities, comprising a huge percentage of the health budget, which of course is a big percentage of the overall provincial budget.

Indeed, that note and that relationship of difficulty in finalizing the budget so that those health authorities…. The running of a deficit by those health authorities has continued to be an issue, has continued to dog the government and continued to dog the Minister of Health, indeed leading to extraordinary expenditure this year to attempt to help those health authorities close the deficit, at least temporarily, although that's not carried forward into the new fiscal year that's projected in the budget.

Just to close on that point, what the Deputy Minister of Finance is pointing to is significant aspects of the budget where there are real reservations about the fullness of the disclosure and the degree to which the budget reflects what's really going on with government finances.

This deputy has filed in the letter that's with it a number of qualifications and comments on the budget. I want to talk about those, because I think they're certainly worth looking at, and I think they also point, when you consider them individually and certainly when you consider them collectively, to a budget that doesn't reflect the fiscal reality of the province and that doesn't reflect the reality of what's going on in various areas of government expenditure.

For example, and I'm reading from the document:

"The Port Mann bridge has not been included in the fiscal plan as final agreement has not been reached with Connect B.C. Development, and accounting treatment has not been finalized. The implications are discussed further in the topic box on the Port Mann bridge found on page 52 of the Budget and Fiscal Plan ."

There's a more detailed consideration.

So the impact of that deal, which is not concluded, on the province's finances is not included in the budget. The deal hasn't been concluded. The Deputy Minister of Finance says that you've got to take that and set it aside, because it isn't included in the budget. So what are the implications for the budget year or next budget year? Not clear. Not clear. Accounting treatment, as he says, hasn't been finalized.

[1505]

Next, again, this is Mr. Trumpy. This is the Deputy Minister of Finance, and I'm going to read again from the budget document. "The province is assumed to reach an agreement with the federal government over the funding of the Olympic security, part of which will require a one-time payment to the federal government before the end of 2008-09."

What the Deputy Minister of Finance — not me, not the NDP, not anyone else — is saying is that this budget will require a one-time payment to the federal government before the end of the fiscal year. It's not in the budget but will have to be accounted for and paid within this fiscal year.

The minister is, of course, privy to any ongoing negotiations — which seem, I'm sure from his perspective, interminable — but we were promised that in the budget. Apparently, that agreement has not been concluded. The number hasn't been included in the budget, but relatively reliable sources — federal ministers; Canadian Senators; senior officials from the last games in, I think, Salt Lake City; Olympic officials; security experts; people familiar with the changed security environment post-9/11 — have all said that the security bill for the Olympics is, in the present context, likely to be over a billion dollars.

Of that and the cost-shared agreement, the province would have to come up with half. What the deputy minister is saying is that that number, those dollars, will have to be expended within the fiscal year 2008-2009.

Let's assume, just for the sake of argument — and I don't think it's an unreasonable assumption; I think it's pretty grounded in reality and pretty grounded in all the opinions of all the people that have examined this question and continue to debate it — that there will be another $500 million required to pay for Olympic security costs in this budget year. Now, it's not clear what the accounting treatment of that will be, but it seems from what Mr. Trumpy says here that that will come from the operating budget of the government. So that's another $500 million.

We have a projected deficit of $495 million. We don't have a forecast allowance, but we certainly have another expenditure that's likely to be — certainly as they said on the convention centre — in the range of $500 million, perhaps more, that's going to be required in this fiscal year. So how is this budget a budget that realistically sets out the financial reality that faces the government when that payment has to be made in this fiscal year?

Mr. Trumpy, the deputy minister and secretary to the Treasury Board, goes on to say: "Unlike recent years, there are no forecast allowances included in the fiscal plan, and government will be managing risks to the fiscal plan through expenditure management and the use of the contingency vote."

It's significant that the contingency itself, separate from the forecast allowance, which is now abolished…. There is a contingency, as there is in most budgets. Even the people who run non-profit associations or sports organizations or…. It's fairly basic accounting that you include a small contingency for those things you can't predict which might be expenditures that come up during the year that you need to pay for. That's going to be there. The contingency has been slightly reduced, and through expenditure management.

The Leader of the Opposition, in her economic statement in October, made a number of suggestions

[ Page 13788 ]

about expenditure management, whether that was a reduction in government advertising, a reduction in contractors, a reduction in travel. Some of those seem to have…. I think they're fairly obvious measures, but the government certainly didn't include those in their economic statement in October. Many of those policies have been put in place, but at a certain point there's a point of no return in terms of grinding out any reductions through that.

[1510]

Perhaps I might pause. I understand there's a member that wishes to make an introduction, if I could briefly allow that member to interrupt.

Introductions by Members

M. Karagianis: I appreciate the member for Surrey-Whalley giving me this opportunity. I see today in the gallery two friends of mine, and I'd like to introduce them to the House: Mark Bridges and Kody Bell. I hope the House will make them very welcome.

Debate Continued

B. Ralston: I appreciate the member for Esquimalt-Metchosin giving me that opportunity to take a brief break. I'm not so confident that the break that comes from the other side might be the same as the generous one offered by the member for Esquimalt-Metchosin, but I might be wrong.

Again, looking at what the deputy minister has to say about expenditure management. It's striking that he goes on to say in another line in these qualifications on the budget: "Further" — not my spin, not my

interpretation; these are the exact words of the deputy minister — "savings of $250 million are to be identified and achieved by 2011-2012."

There's a reference to expenditure management and using contingencies, but there are further savings which are as yet unidentified. So what we heard from the Minister of Finance and the Premier was that directives went out prior to the end of this fiscal year — I think in December, if I'm not mistaken. All those traditional measures of expenditure control — looking at discretionary expenditure, consultants, travel, managed use of all of those tools…. The traditional ability sometimes of a minister to move funds from one STOB — what are called STOBs, standard points of the budget — to the other….

In other words, if a portion of the budget had not been expended, sometimes it's moved to another portion of the budget within the overall budget prior to the end of the fiscal year. That practice was prohibited, again, to grind down on costs, supposedly.

All of those practices are in place — at least, according to what we've heard from the minister and the government. Those practices presumably have yielded what savings can be yielded from that practice, yet the Deputy Minister of Finance feels obligated to note, in a very unusual note, that further savings of $250 million are to be identified and achieved by 2011-2012. We don't know where we're going to cut. We don't know when we're going to cut, but we're going to cut another quarter of a billion dollars from the budget.

That, obviously, has implications, but traditionally, in budgeting, those…. A budget is a road map of intentions of the government in broad terms. While not categorizing every specific expenditure, it sets out, in broad terms, the direction of the government and where they hope to make expenditures and where they hope to achieve savings.

Yet the deputy minister here is saying and noting in this very unusual comment: "Well, they say they're going to make further savings, but they haven't been identified." That's a very unusual comment, and I think it's one that again suggests that the budget that's presented to us does not reflect the true intentions of the government beyond May 12. It doesn't reflect the reality of the economic situation and is something to approach with caution when examining some of the statements that the Minister of Finance and the Premier have made about the budget.

[1515]

The next comment that the Deputy Minister of Finance makes about the budget is: "The report on the advice received from the minister's Economic Forecast Council, which was last updated on January 9, on the economic growth outlook for British Columbia, includes the range of forecasts for 2009 and 2010."

I think I've commented on that rather fully, but it's worth emphasizing that that's something that the deputy minister felt necessary to bring to the attention of the reader, the public and anyone who chose to rely on some of the assertions made in the budget document.

In addition, the minister notes…. It's a bit of an echo of the qualification that the previous deputy minister made on health budgets. Again, I'm quoting from the document.

"Three-year aggregate financial plans for health authorities, school districts and universities and colleges have been compiled by the Ministries of Health Services, Education, and Advanced Education and Labour Market Development based on funding included in respective ministry budgets. Individual plans for health authorities and post-secondary institutions, including strategies for managing spending pressures, will be subsequently developed and reflected in the updated fiscal plan in the first Quarterly Report ."

What the deputy minister feels obliged to point out to the public here is that the individual plans for health authorities — very reminiscent of what happened several years ago when previous Deputy Minister Tamara Vrooman felt obliged to point out — and post-secondary institutions won't become public until the first quarterly report, which is not tabled until after the election, in late June or early July.

[ Page 13789 ]

Once again, this budget is incomplete and unreliable in a very significant aspect of expenditure. It's all set out here, all in the words of the deputy minister. Health authorities, universities…. If there are university students or university teachers, college instructors, teachers at trade schools, prospective students — the individual plans for those institutions…. It says in the somewhat Delphic language of deputy ministers: "including strategies for managing spending pressures."

What that means, in my

interpretation, is that if there's a need perceived to cut costs to those institutions, to cut government revenue or government subsidies to those institutions, that will be all revealed — not now, not in this budget, not before this Legislature, not before the election but only after the election.

If you're in Dawson Creek and attending Northern Lights College, if you're in Terrace and attending Northwest College, if you're in Prince George attending the University of Northern British Columbia or Caledonia College, if you're in Kamloops attending David Thompson University, you should be wary of what the government says about protecting education and education services in this economic climate.

What the Deputy Minister of Finance says is that you aren't being told what the strategies for managing spending pressures are, and you won't be told until after the election. The plan is not to tell you before, and that's clear. That will be an update to the budgetary process.

The deputy minister also sets out some comments about the capital plan. "The capital plan includes $2 billion for accelerated infrastructure projects." The word of qualification is: "based on the assumption that the federal government will contribute $1 billion from federal infrastructure programs announced in the January 27 federal budget."

[1520]

So there is a number that is put out publicly. The government talks about $2 billion over three years. But of that, the part they aren't quite as forthcoming about, although I don't think they would deny it, given that the Deputy Minister of Finance has it here in black and white, is that half of that money — fully half of that money — comes from the federal government in the federal budget of January 27, just weeks ago, and is not something that forms part of the provincial budget.

One assumes and expects that that program will get rolling, but many mayors — whether it's the mayor of my city, Mayor Dianne Watts or whether it's the new mayor of Vancouver, new Mayor Gregor Robertson…. Other mayors have expressed a concern that when it comes to rolling out these infrastructure projects, the federal response in these matters is very slow where individual municipalities often, in the case of the city of Surrey, have compiled lists of projects that they see as worthy additions to civic infrastructure, valuable public projects that are through the zoning, through the preplanning stage, sometimes with engineering complete, ready to go.

I met with the mayor of Westside not too long ago, now West Kelowna. There are infrastructure projects in that community, for example, that are ready to proceed. The mayor is anxious that there be, obviously, not only provincial participation but that there be federal participation.

There is a concern at the Union of B.C. Municipalities level, at the level of leadership in the towns and cities of the province, that that federal money will not flow as quickly as it should. Nonetheless, there is that federal commitment. I'm sure that members not only on that side of the House but on this side will pressure individual federal Members of Parliament to advance those projects as quickly as they can.

While one looks at infrastructure — and there has been much discussion in many quarters about infrastructure certainly in recent times…. I think it's important to look on infrastructure as more than simply make-work or an addition or an empty addition or sometimes not a valuable addition to what's being done by government in the economy, and the importance of infrastructure and the attitude with which it's approached.

Indeed, because there has been so much recent discussion in the United States leading up to the adoption of the stimulus package — and there has been some partisan debate about the relative value of tax cuts and infrastructure spending…. What the American Congress appears to have landed on in passing the infrastructure package that they did is that there's a heavy component of infrastructure that comprises the stimulus package.

Mr. Felix Rohatyn a former investment banker who I think is best known for having guided New York City through its financial troubles some decades ago — very distinguished investment banker, former American Ambassador to France — spoke recently in an

article in one of the American business magazines about viewing infrastructure as an investment, as an important investment and as a way to advance many of the shortcomings of whether there are transportation systems or other infrastructure requirements…. He's obviously speaking of the United States.

He speaks of the necessity to establish…. This is an American investment banker, and I'm not necessarily advocating that, but the degree to which he says it's an important aspect of a recovery plan in the United States…. He's strongly of the view that infrastructure spending is required as the first order of the day, rather than what he calls tax cuts. That's a partisan debate in the United States, where Republicans tend to advocate tax cuts and rebates.

[1525]

He says: "Rebates may be saved in a time of uncertainty, much as the first round of rebates were. Moreover, passing too many 'special' tax credits and 'incentives'

[ Page 13790 ]

has created a pinball tax system that is peppered with targeted tax exceptions and different treatments for different types of incomes." That is "a system that breeds evasion, resentment, and that has cruelly become centred on the wages and salaries of the American middle class. There will be time enough in the next Congress to fix that system. Let's hold off on any changes, including rebates, until then."

What he says is that he advocates, as a first priority, what he calls a national infrastructure bank that would enter into partnerships on a project-by-project basis with state and local governments, private capital and infrastructure users. There's a program that he sets out. He talks about many of the things that have been part of the debate in Canada, whether it's seismic upgrading of schools, whether it's reviving the transportation network…. He advocates that as a way forward.

I think that the only response, really, to the infrastructure program that the government has tabled is: is it sufficient? Does it meet the demand that's there? And relative to some of what G20 nations have said, is that infrastructure recommended?

Obviously, it varies from province to province or from country to country, but as a rough rule of thumb, the G20 nations have advocated 2 percent of GDP. The federal government stimulus package in terms of infrastructure is about 1.6 percent of GDP. The stimulus package, if it can be called that in terms of the infrastructure, in this government's proposal, is far less than that. Given the circumstances of British Columbia, that may be adequate.

We'll have to assess that as we go forward, and that's why up-to-date and accurate assessment of where we're at in the economy and whether the recession is a shallow one or not is important. If the recession is deeper than is anticipated, certainly by the projections that are contained in this budget, it might be necessary to shift emphasis in that direction. Certainly that's the view of people like Mr. Rohatyn, a distinguished investment banker, and many others who have joined in on this issue of public infrastructure.

But the stimulus that public infrastructure brings is acknowledged, particularly in British Columbia, where much of the recent boom was construction-led. There is a core of skilled construction workers. There's expertise, whether it's in housing or whether it's in other kinds of public infrastructure. Those people are there; they're willing to work.

The economy is clearly turning down. The 68,000 full-time jobs lost according to Stats Canada in January indicate the rapidity with which that change is occurring, so a shift to infrastructure is important. People are waiting for announcements. They're waiting for the government to get going. There seem to have been some announcements, but even the funds that are promised and were announced prior to the budget — which are now contained in the budget — don't seem to have been rolled out very rapidly.

Although the government is perhaps quick to make those announcements, in terms of any actual work being undertaken or getting started, there's not a lot been done yet. I know that people are waiting for that. Certainly in my community of Surrey, the mayor and the council have a very detailed list of good projects that could benefit from an infusion of public infrastructure money right now.

[1530]

The other thing that one looks at, and these were canvassed somewhat in question period, although perhaps not, given the brevity that's necessary in question period. There are other assumptions that are made in the budget which don't seem to accord with the economic reality of the present situation of the province.

When one looks at retail sales, there's a projection in the budget of an expectation that retail sales will increase 1.3 percent in 2009 and climb by 4.4 percent for the next four years. Given the decline in the last quarter — October, November and December just passed — of 3.1 percent downward, it seems unrealistic to some that that projection of an increase…. In a year in which everyone agrees there's going to be — at least 2009 — a recession, that may be simply unrealistic.

[S. Hammell in the chair.]

This is significant not because one doesn't have sympathy with retailers but…. One of the major sources of government revenue in any given year is the retail sales tax, the Social Service Tax Act, and the budget estimate for 2009-10 is $5.087 billion. That's an increase over — just below — a revised downward forecast of $4.998 billion. So the revenue that's predicted in the budget is based on an assumption that doesn't appear to be borne out by projection of retail sales.

In other words, if retail sales are going to decline, given that the retail sales tax is a function of the dollar value of sales, it seems unlikely that the return from retail sales tax would increase. So that doesn't seem to be realistic, and I question that assumption.

I hope I'm wrong, for the sake of retailers in the province, but I think the Christmas sales, the traditional bump at Christmas that retailers experienced, weren't there in the same force and measure that people expected. That doesn't bode well for the retail sales in the new year. That assumption — and it's a big source of government revenue — doesn't seem to be supported by economic reality.

A couple of other projections that are included in the budget. Personal income tax — there is a budget estimate of $6.562 billion, up from a revised forecast of $6.219 billion. Again, it's an expected increase in personal income tax. Obviously, that comes from employment income

[ Page 13791 ]

for the most part. At a time when unemployment is rising and people are losing their jobs, their ability to pay income tax on their income ends at the point — certainly is reduced drastically — when they lose their job.

Is it realistic to make that kind of projection, given that projection of increased unemployment and its likely impact upon personal income tax returns to the province in its budget? Again, that's an important aspect of provincial revenue. The biggest single heading of taxation revenue for the province is personal income tax.

It's understandable why the Minister of Finance didn't want to meet with the forecast council after January 9, because it's very likely that based on the stream of economic data that's flowing in from all over — from every source of the economy — they would want to revise those predictions downward. The budget would change in many ways that the minister chooses or would care not to acknowledge.

[1535]

On sales tax, I say that the budget is unrealistic. On personal income tax projections, I say that the budget is unrealistic.

The member for Malahat–Juan de Fuca canvassed, in the question period just past, the issue of B.C. Hydro revenue. What is the fact, aside from the rhetoric of the minister who failed to answer the question, is that the third-quarter profit in 2008 is $29 million less than its 2007 third-quarter profit.

Yet in the budget the government predicts that overall revenue for B.C. Hydro will be increased and the dividend that B.C. Hydro will pay to the Crown will go up. I say — and I'm supported solidly by the member for Malahat–Juan de Fuca — that this projection is unrealistic.

The degree to which this budget overestimates likely revenue, in major headings, is very, very clear. I'm expecting that in the speeches that follow, different members on this side of the House in their respective critic areas will examine more precisely the projected revenue ministry by ministry, and we'll get a fuller picture of the budget as a whole.

Certainly, what is clear is that this budget can't be relied upon as a reliable and accurate gauge of the economic activity in the province. Given that, the commitments that the government claims to make on the basis of the budget can't be relied upon either.

One other area that the government likes to talk about — and doesn't talk about very much but recently has talked about perhaps a bit more — is the debt-to-GDP ratio.

Debt-to-GDP is a measure on government books of the ability of the government to pay back debt that's accumulated based on the relative strength of the economy. If it goes up, it indicates a greater percentage of debt relative to the size of the economy. Generally speaking, the lower the debt-to-GDP ratio, the better off one is in the sense of the capacity of the economy to enable the government to repay debt.

One thing that the government doesn't talk about is the rapid growth in what are called contractual obligations, which are now disclosed in the public accounts. They aren't a debt, but they are future obligations of the government which are bound in legal language and require the government to continue to pay over lengthy periods of time.

Those are traditionally associated with public-private partnerships or privatized infrastructure and are the agreements that go with…. After the construction of the public asset, there are agreements that require the private operator to maintain the facility over a number of years. In the case of the Abbotsford Hospital, it's over 35 years and, in the case of some of the other public-private partnerships, lengthy periods of time but typically 30 to 35 years.

The OECD, in a consideration of these kinds of infrastructure, has pointed out the difficulty that comes when you bind government to those kinds of obligations over the long term.

[1540]

As of July 2008 the total accumulated obligation on behalf of the government, in these kinds of contractual obligations, is $54.7 million. In the last three years these obligations have skyrocketed. In the public accounts for 2005-06, contractual obligations were $27.6 million, so a virtual doubling in just under three years.

These are hard costs that it's impossible for the government to escape. Indeed, in this OECD document, which is a neutral rendering of it, what they point out is that when you make that commitment to a service or a maintenance contract over that length of time, unless you have very, very strong clauses that enable the government to reopen and renegotiate, you may be locked into providing service in a way that forbids you or bars you from taking advantage of future technological change or better ways of delivering the service.

It's easy to imagine over a period of 25 or 30 years, whether you're engaged in hospital maintenance or preparing food, that there might be better ways — and perhaps cheaper, more efficient ways — of achieving the same result. Yet when you're locked into a contract for that length of time, unless there is a very, very strong provision for renegotiation, the government will be bound to pay a higher cost on behalf of the taxpayers for many, many years.

Obviously, one of the advantages of a change in direction in the government is that the government can change its priorities and choose to fund other methods of service delivery. Once you've signed one of these agreements and locked it in for 25, 30 or 35 years, it's very, very difficult to escape from that.

It ties the hands of future governments. It bars the way to innovation and change. It means that you have

[ Page 13792 ]

to continue paying what may become, in the fullness of time, a very uneconomic rate for the provision of services. Yet there's no escape from the contract short of buying the whole thing out and paying for it again — in other words, paying for it twice.

The government touts the advantages of these kinds of agreements, but objective observers point out these potential problems. These are problems that the government certainly never talks about in its discussion about public infrastructure.

Certainly in the case of things like the Port Mann bridge, the tolling structure is not a document that has been released publicly. The minister has made some assurances, but until we see the documents, we don't know what the toll will be and what the ability of the government to block future toll increases will be.

I personally, given the acceleration of the cost of the project, very much doubt that the toll on opening day will be $3. Maybe it'll be a special on opening day, but it will rapidly go up thereafter.

I think people will find, if and when that structure is open in four years, that the cost will have gone up from the estimated $3.3 billion — it always does — and the tolls will not be the tolls that the Premier speaks of now. Nor will the tolls be the tolls that the minister speaks of now. They will be much more expensive.

But in that area, as in so many other areas, the government is more concerned about making these kinds of financial arrangements with major international infrastructure firms than worrying about the impact on the daily lives of citizens, whether it's through fees increases in any number of areas in their everyday life.

British Columbians have experienced that increase and the impact on their standard of living, drastically, over the last eight years. Whether it's medicare premiums, hydro rates, ICBC rates or ferry fares, there's a long list where fees and charges to individuals and individual families have increased much faster than people's average wages have increased.

[1545]

Indeed, average wages, according to Statistics Canada, have been more or less static. The top 15 percent of the population, according to Statistics Canada, has increased their average income over the last ten years, but average people — average incomes — have not. They've been virtually static for the last ten years.

With that, Madam Speaker, I'm going to draw to a close. It's clear that this budget does not reflect economic reality. The promises that are contained in this budget cannot be relied upon. The budget that's put forward, in every area that I've set out and qualified by the deputy minister, can't be relied upon. The promises that it contains are shallow and not to be trusted.

The question that remains for British Columbians when they go to polls on May 12 is: do they wish to return a government that didn't take care of them, taxed ordinary people with fees and gouged them during good times, and can they be trusted to take care of them in bad times?

I'm confident that the answer will be a resounding no. The people will reject this arrogant and out-of-touch government.

Interjections.

B. Ralston: We're nearing the time when the members opposite are finally paying attention because they might have to get up and defend themselves. I look forward to that opportunity to hear them say something rather than simply braying like cattle across the floor.

D. Jarvis: I rise today as I have many times before, some 18-plus times. I represent some 60,000 people in the North Shore riding of North Vancouver–Seymour, and I wish to thank them for their continual support. They have been very kind to me in the past.

[Mr. Speaker in the chair.]

Also, I wanted to mention my past and present riding association and all my campaign supporters over the last four elections anyway. They know, I think, that I do appreciate all the help that they've given me. I also thank them for the support at my nominating meeting last Thursday.

I want to thank, once again, my constituency assistant Jennifer Anderson — she's been with me since 1995; that was a vintage year — and also all my legislative assistants that I've had over the years, some 20-plus of them. My latest one is Stacie Dley. It's not that I've been hard on my legislative assistants. It's just that I've trained them too well, and they've all been yanked up into higher posts throughout the system. Actually, one of my legislative assistants ended up as the Minister of Education. Few of you realize that.

This has been a tremendous province for me. I was born here four or five generations ago, and it has a very deep history. Over the last 150 years since 1858, beautiful B.C. has had some 37 different governments.

If you were to look at those plaques out on the exterior doors on the wall as you enter this chamber, you'll see a list of all the MLAs that have been elected in the past across this diverse province. Just under 900 MLAs have actually been elected, as you're probably aware, since we first became a government. We all should be very proud that we have joined that select group of people. Considering that millions of people have passed through this province, there are very few of us who can say that they were MLAs.

[1550]

The plaques are a history in themselves, and the present members should take the time to read them. There's a B.C. story in every one of those plaques, believe me.

[ Page 13793 ]

For example, in the election of 1924, member John McKie, duly elected from the Creston area, was killed on his way to the legislative opening when the train he was riding on was blown up by the Sons of Freedom sect. The words "crime" and "terrorism" really mean nothing in B.C. in view of our past history. Every decade something new comes along to consider as a dangerous happening.

Nevertheless, I believe we are beyond those fractured days of the past. Today we are perhaps a little bit — perhaps, I should say, a bit — more sensible, within reason, with each other. I'm pleased to see this week that all of you have arrived at this Legislature safe and sound. B.C. has an interesting and historical background, and it remains so even today.

I had the opportunity to listen for almost two hours to the Finance critic of the NDP, and I find it very difficult that he wishes B.C. well. He is obviously very disappointed that our budget includes a temporary deficit of only $495 million and not the $3 billion or $4 billion that he actually expected. The Finance critic is unhappy, I guess — so much for due diligence to the taxpayers. That is the reason that B.C. went from No. 1 to No. 10 in the 1990s.

The past seven months have been dark and gloomy, with all the economic predictions of despair due to the worldwide downturn of the banks and the markets. There's been a frenzy of red ink south and east of our borders, somewhat driven by panic and not necessarily all by logic.

Here in B.C. we should be relatively optimistic. This government came through those dark days of the '90s and has built that time into a stable economic base for us to work with — and not slip deep into the abyss, as some of the NDP politicians would suggest or hope. The Leader of the Opposition suggests we should do more without spending more. How, I wonder, does she equate being fiscally responsible with her free-spending attitude?

Both the throne speech and the budget speech emphasize that this government is in the best position, having a strong and viable track record that indicates not only our accomplishments of the past eight years but our focus on a strong, kind, optimistic and fiscally proper economy. That will allow us to continually move forward as the economy improves, and this is a positive attitude. It is not dark and gloomy, as some would have you think.

Over the last eight years we have made great inroads in our trade agreements with the likes of China and India, and we shall continue to do so. When I was coming out of high school, the world population was about 2.6 billion people. Today it's approaching six billion and still growing. So things happen rather quickly in the world. Asia, especially India and China, just won't be going back into the Third World status after their decades of growth.

We in B.C. are therefore positioned to take advantage of this with all our technology, our resources and our heritage as a Pacific country. The world meltdown will smooth itself out, and we shall all recover, believe it or not.

[1555]

We in B.C. should be relatively optimistic, as I said. We are predicting that if the private sectors can't be sustained, the public sectors perhaps should be there to assist. Prudent planning with sound economic policies will be the linchpin of this government. So far there have been some slippages, but a positive attitude and hard work should carry us through.

The government laid out changes to transform this province, which can now be seen on every urban street corner and in every rural landscape. All of us have experienced changes, and since 2001 there has been a change in the quality of our family lives in British Columbia. Prudent planning with sound economic policies has been the linchpin of this government.

Employment was unsurpassed in the last eight years, and we plan to hold that line to the best of our abilities at the present time. But we are facing pressures from across the line in forestry and housing industries — just for example, those two. Having to table a deficit budget is extremely unpalatable to me and to a lot of members of the government caucus. However, we cannot stand on strict ideology if it means further harming those affected by the global downturn.

Education and health care are primary concerns to us — hence Bill 48, which was passed a few days ago. The choices are not always ours. When the U.S. sneezes, we all catch colds. We will have to ensure that this is a short-term problem and get back to a balanced budget as soon as economically feasible. I have no doubt that this government can do so. We have proven to be a very prudent government in the past, which puts us in a good position to weather this present economic turn.

When we first took office in 2001 we were faced with the 9/11 disaster, avian flu, SARS, forest fires and on. We came through these adversities, and we shall come through this economic turmoil as well. We in B.C. now have the lowest cancer mortality, and children being born today have the longest life expectancy. This does not just happen without these kinds of positive outcomes, unless we have a good plan and financing and investment in education and research.

We have the second-lowest mortality when it comes to cardiovascular disease — touch wood — and we're the first in all health outcomes. This is progress from a government who, contrary to the cries that we don't spend enough on health care…. Health care spending since 2001 has gone up every year, from $8.3 billion to over $15 billion, and 90 percent of all budgeted new operational spending in the next three years will go to health care.

This could not have been done had we not been fiscally responsible in the past, and we intend to continue being responsible — fiscally responsible, that is — into the future.

[ Page 13794 ]

We are No. 2 in university education completions. We know that education is a catalyst to bettering our society. In environmental quality we are now No. 1 — first place — in North America and the second-lowest in emissions in North America. We are a government that is a world leader when it comes down to the issues of environmental stewardship.

My electorate in North Vancouver–Seymour need to know that this government does listen to them. They want to hear what is important to their everyday lives. Their children's education and advanced education, such as Capilano University which this government formed last year…. It is important that they know there will be jobs to support their family's needs.

[1600]

Some benefits to North Vancouver–Seymour from this budget will be that we're going to put $1.3 billion to invest across B.C. to replace and renovate expanded K-to-12 schools. So district 44 in North Vancouver will no doubt benefit from this education spending.

This government is planning to spend $1.7 billion. It will be invested across B.C. over three years in post-secondary facilities, including the projects to increase student capacity. Again, we will benefit from that on the North Shore.

Throughout B.C. $2.5 billion in capital spending will be invested in the health sector over three years. These investments support the new construction of hospitals and upgrades, and we know that the Lions Gate will benefit on this.

There is another $2.3 billion for major transportation and capital infrastructure, including improvements for the Sea to Sky Highway.

I even asked the minister this morning if we were going to get anything over there, and he gave me a nice smile. We really don't know what that means, but I assume that the upper levels in the Second Narrows Bridge area will experience some kind thoughts from the minister on that.

I wanted to say that education, along with health care, is one of our primary ministries to this government. Education, since 2001, has increased from $7.6 billion to over $10.7 billion. It is our desire to continue to commit funding to education from K-to-post-secondary.

My constituents want to see economic stability and quick recovery from this present recession. The psychology of this recession seems to be all through the media. If the trend continues with respect to the seniors bubble, and there is no reason to doubt it, a major question won't be: "Where will they live, and how can they ensure that they have proper accommodations to live in?"

This is an immediate concern when you see that 20 percent of the North Shore residents are in that particular classification. The North Shore has a proportionately higher senior population than the rest of the province, and I cannot stress enough that all levels of government need to be concerned and involved. We must look to ensure that our assisted living, our housing and health care supports are in good shape now, as senior numbers are going to be one-half of our population and then two-thirds, and so on. We seniors aren't going away.

To conclude, through good fiscal management this government has established a strong financial foundation upon which to build for the future. The opposition's spending is illogical, and it misses the boat when it comes to family needs. It is education and health care and jobs first, which is a sound approach. Therefore, I would support this budget, and I thank you for my time on the floor.

M. Karagianis: I'm happy to stand and take this opportunity to talk about the budget that was tabled. It's very interesting that we've all watched the phenomena south of the border here with the Obama campaign, and of course, the big slogan that Obama came to victory on was "Yes, we can." It's a slogan that he has continued to carry on as he has begun to rebuild confidence in the U.S.

I think, in sharp contrast, we have here in British Columbia now a "No, we can't" budget. That has set the theme for British Columbia from this government and this Premier — that "No, we can't" — and the list of things that we cannot do has a huge bearing on my constituency.

[1605]

[S. Hammell in the chair.]

It's interesting to me that what we heard from the government was recycled, reused, re-announced, repromised — a hackneyed regurgitation of past ideas that the Liberal government has been running with for many years. In fact, we've seen no new ideas coming out of this government.

What we have seen are ideas that look exactly like their old ideas, which are a heavy reliance on privatization, tax cuts, deregulation, abandoning workers' rights, cuts to services, and downloading, whether it's onto families or onto municipalities. There is nothing fresh here. There is nothing new.

You'd have to ask yourself, as we run into an election campaign period here that's very critical for the province at this point: why would we have a government deliver a budget that says: "No, we can't"? Why would we have a government ready to deliver a budget that's full of old, used ideas that didn't work particularly well in the past? This regurgitation doesn't have a lot of promise for us going into the future.

You know, I talk to my constituents all the time. The things I have heard from my constituents that are the most critical to them are things that this government once again has completely overlooked and neglected —

[ Page 13795 ]

and continues to demonstrate how out of touch they are with the needs of our communities.

In fact, over and over again I have heard on the doorstep in my community that families are looking for affordable housing, that they are looking for child care and that they are concerned about how Olympic cost overruns and dollars spent on privatization schemes will affect the ability for the government to put real investment into the things that matter to them.

Many of my families live from paycheque to paycheque, and they are concerned about their future. When they hear from the government the list of things that can't be done, things that actually will benefit them, that will affect their day-to-day living and their ability to get from payday to payday…. When they hear the government say, "No, we can't. Those are not priorities for us…."

The people in my constituency were looking for this government to remove the gas tax to make life more affordable for them, but what did the Premier say? The Premier of this province said: "No, we can't. We can't make life more affordable for you." That's part of the "No, we can't" budget of the Premier.

The budget speech and the throne speech very clearly outlined that there would be no increase in child care at a time when the families in my community actually need to be able to get both parents out working. As we know, as job losses and cutbacks affect families, their reliance on having two people working in the family is growing more and more critical for their ability to get from payday to payday. Yet we have a government that, when people are waiting for increases in child care opportunities, says no. "No, we can't. We can't give you that."

When we looked at the loss of forest workers' jobs and whether or not the government was going to actually look at finding some solutions to that, what did the government say? "No, we can't." When we looked at the things that concern my constituents around waiting lists in hospitals, did we see anything in this budget that is going to improve that? No, because the government has said: "No, we can't."

My constituents have looked to the government to help provide seniors care for all those people who are looking after parents, concerned about parents, looking for increased home care so that seniors in our communities could live longer, healthier lives at home. What did they hear from the government? "No, we can't." The government cannot provide that for us. That's what we heard from this Liberal government.

When we asked if there would be some relief for post-secondary education, for the young people in my community, what did we hear from the government on their priorities? "No, we can't. We can't provide that for you."

[1610]

Class size and special needs assistance. Have we seen the government step forward and say: "We heard the concerns of communities across this province. We are going to find ways to alleviate the heavy toll that it's taking for enormous class sizes and the lack of special needs care?" Did we see that from this government? No, what we heard from this government is: "Priority. No, we can't do that for you in this budget."

So it concerns me greatly that at a time when we were expecting and hoping that a budget would be delivered that would deliver optimism and some hope for families — some of the things they need most critically and vitally to make their lives easier and better and help invest in their futures — they were turned away by this government and told: "No, we can't. We cannot do those things for you."

What we've seen is a whole number of cuts here to programs — and generally to the needs of communities — that I think are going to be even more devastating in the future. You know, you only have to read the first page here, the opening page of the budget, to see that the government has, in fact, missed the boat on a whole number of areas. Not just on the areas here where they've said to my community: "No, we can't. We can't help you with the things that would actually allow you to get to work or assure you that seniors care and education resources are going to be there for your communities."

In fact, we're looking at a number of things here that indicate that even in their fiscal plan…. And I think it was very clearly and well and thoughtfully laid out by the member for Surrey-Whalley that spoke earlier.

I want to actually draw attention to a couple of the key admissions here in this first page of the budget that I think really tell a lot more. They kind of show the underbelly of this failed budget. It says here right early on, when the government's sort of laying out the materials for their economic plan, that a lot of this is based on an assumption that the federal government will contribute a billion dollars — based on an assumption.

So we have no solid backing here for this. This is based on an assumption, and in fact, when you see how many of the things within this budget are critically dependent on federal dollars that have not been confirmed yet…. We're going into a budget here that will take us into an election campaign with no reliance whatsoever that there are real resources here. This is based on assumptions. There are things excluded from here.

I'm particularly fascinated as the Transportation critic to see that the Port Mann bridge has not been included in the fiscal plan. We know for a fact that well over a billion dollars of taxpayers' money is going to be loaned to a private sector corporation. It would seem to me that that would be pretty critical to have in your budget as part of the overall plan here. If those figures are missing, when would we see the actual amount of dollars that are being committed by taxpayers of this province to a privatization scheme?

I know that these cost overruns and the continual proliferation of privatization schemes that the govern-

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ment has involved ourselves in…. The public is aware of this. The public is concerned about this. Here is one of the huge projects that they have been promising, and the fiscal plan is missing entirely. How responsible or irresponsible is that — that the government has not included that and will not include that, presumably, in time for us to go into the election and see what the implications will be?

We've talked often in this House, we've asked questions for a long time, and we've asked questions in this current sitting about Olympics cost overruns and things like the security budget. So I think it's no surprise whatsoever that that's not been clarified here in this budget. The government admits this. They lay this out very clearly. They talk about further cost savings up to $250 million to be found in the future.

I'm going to talk in a minute about the number of cuts in this budget and how that will affect communities across this province and certainly my constituents here in Esquimalt-Metchosin.

But this is definitely forecasting that there will be further cuts as well. So while we have a government saying, "We have a budget that is very restrained and at the same time has got some kind of hope for the future," we can see that there's another underlayer here, another underpinning of more cuts to come. When will we hear about those, Madam Speaker? Well, presumably not until after the election.

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The electorate is about to go to the polls here in less than 90 days without information — without adequate, clear, open and accountable information — on what it is that they are going to get here when they cast their vote on May 12.

I also noted here that there's no forecast allowance included in this. Again, it indicates…. I know that the member for Surrey-Whalley outlined very clearly what the hazards are of this. But I think that people in my constituency will understand that that runs a very, very fine line. That means that there is a very, very fine line over which it's very easy to fall — with no forecast allowance to fall back on. It would seem even just on page 1 of this, outlining the things that have been excluded, assumed — or in some cases, alluded to in the way of a $25 million cut to come further on in the fiscal period here….

It just says to me that, in fact, this budget going into this year is fairly meaningless. There are just far too many things here that are either not included, assumed without any reality, or that say to us that there will be a lot more to come. You know the old saying that one shoe has dropped. The other one will drop here after May 12.

So I would say that it's a lousy budget from that perspective. We're going into a very important process here in the province of British Columbia, and there's no clear accountability around a budget that we're going into this process with.

Let me just talk a little bit more about some of the cuts here, because I think it's very important to look at some of those cuts and think about: what are the real implications here? Because as much as we are uncertain about what the future is going to bring, I know the government has relied very heavily on the idea that in two years the recession will be over, that we'll be out of it and on with the good years again. But the reality is that no one knows that.

You know, the U.S. has been unable to halt or predict where their recession is going. We will be implicated in that whether we like it or not. The global economy at this point is still in a state of chaos. There is no ability at this point for anyone to predict. Lots of guessing. Lots and lots of guessing can go on, but we've seen over the last couple or six months here in North America that even some of the best-trained and most respected economic advisers on the continent have been unable to guess and judge accurately what has happened or what is going to happen in the future.

It would seem to me, going into this period, this assumption somehow that by simply saying it will be over in two years…. It's not only untrue but irresponsible, because we don't know. We don't know, and it would seem to me that our margin of error here has been removed, with no forecast allowance. So we're in fairly, fairly serious jeopardy here going into the future with a budget that has got all kinds of loopholes, pitfalls and sand traps in it.

When I look at the number of things here that the government has either refused to disclose or is outright cutting…. You know, 12 percent cuts to Environment. Forests Ministry cut 13.6 percent. Health dollars looking to drop past 2009. B.C. Housing cut by 15 percent. These are the very essential things that my community has said concern them a great deal — whether or not the government is truly going to invest in the things that are meaningful for them, like affordable housing.

In fact, it would seem to me that if we are at a time of fiscal restraint, the thing we most need is security around affordability issues, and we are getting none of that from government.

School boards. It says here they're going to cut $12 million from their budget, and additional dollars in education are not even going to cover salaries. It's very clear at this point that we're going to see more losses out of education budgets.

A 20 percent cut to treaties funding. Now, that affects very directly my community, because I do have first nations who are in the course of treaty negotiations. So 20 percent cuts to their resources.

[1620]

Justice services cut 14 percent. We've had a huge discussion in this House over the last couple of weeks over issues of crime and safety in the Lower Mainland. There is chaos. There is no question whatsoever that

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this government is failing absolutely on this crime and safety file, and now they're about to cut justice services at a time when they have promised that they are going to resolve this gang war. But, in fact, we've seen no resources there, and now we see justice services will be cut.

We also see the Ministry of Children and Families. I think the increase in dollars was something like 0.99 percent or 0.09 percent or something similar. So a less than 1 percent increase there, which means no additional children will be protected in the province of British Columbia. Zero growth in MCFD. So hold the line there. Not one more child will be cared for or protected, and no increases whatsoever in the budget for MCFD.

Let's think about the dismal record that this government has shown in eight years during economic boom times. They have continued to under-resource the Children and Families Ministry over and over again to the detriment of this province. It's been a huge scandal that this government has worn, and here we are now going into recessionary times, and they said, "No, we're not going to care for any more children in this province," — despite the fact that a poor economy often has very adverse effects on children.

Let's be frank. We're living in a time when for the fifth year in a row we have the highest level of child poverty in the entire country. Again the government has said: "No increase for children and families in this province." We're not acknowledging in any way or delivering any kind of solutions on this issue of child poverty.

A 50 percent cut to the arts. We live in a city here that is so reliant on arts as being one of the great communities that can take a dollar, stretch it further, make a living on a shoestring. Yet the government is now going to cut that — right? At a time when we have an Olympics event, a worldwide event coming to this province, our artists, our talent does not get a showcase here because this government has cut funding to the arts by 50 percent.

The flip side of this, the anomaly to this, and I think the most bitter pill, is that this is at the same time that we have a government who has had a double cost overrun on the convention centre — almost half a billion dollars squandered there. A new roof is going on to B.C. Place, almost $400 million — right? Where is the justice there?

We are cutting the funding for arts. We are giving no additional money to children and families in this province. We refuse to put any kind of money into affordability solutions for families. But we can still put big, expensive roofs on B.C. Place, and we can run into half billion cost overruns on the convention centre.

I don't even have time in this particular budget debate to go into the squandering of money on privatization schemes that's costing this province double or triple what projects should cost us. Certainly they are job-generating, but at what price? We could be employing many more people and building much more infrastructure and investing a lot more into our communities if we weren't giving huge amounts of money away to private corporations to take money from our taxpayers for 20 and 30 years into the future.

I thought it was very interesting that com