1984 Legislative Session: 1st Session, 33rd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

MONDAY, JANUARY 30, 1984

Afternoon Sitting

[ Page

2943 ]

CONTENTS

Routine Proceedings

Oral Questions.

Public funding of intervenors in Kemano hearings. Mr. Howard –– 2943

Status of Women council funding. Ms. Brown –– 2944

BCILA concerns over tree-farm licences. Mr. Skelly –– 2944

David Thompson University Centre. Mr. Nicolson –– 2944

Cascade Creek. Mr. Rose –– 2945

Tabling Documents –– 2946

Committee of Supply: Ministry of Finance estimates. (Hon. Mr. Curtis)

On vote 34: minister's office –– 2946

Hon. Mr. Curtis

Mr. Stupich

Mr. Lea

Mr. Howard

Mr. Passarell

Mr. Mitchell

Mr. Lockstead

Appendix –– 2966

MONDAY, JANUARY 30, 1984

The House met at 2:04 p.m.

Prayers.

MR. SPEAKER: I wish to advise all hon. members that Mr. John

Holtby, formerly first Clerk-Assistant to the Ontario Legislature, with

the cooperation of the Parliamentary Centre in Ottawa has been made

available to this House and will be with us for the forthcoming session.

HON. MR. SMITH: Mr. Speaker, I have the pleasurable duty

today of welcoming to the House and to the precinct a large number of

representatives of the Vancouver Status of Women, who are meeting today

with both caucuses. Our caucus met with them and had a very full and

fruitful discussion. I ask the House to make them welcome.

MR. SKELLY: Mr. Speaker, I would like the members to welcome

a number of people from the forest industry in the central interior of

British Columbia. Among them are Ross Martin, chairperson of the B.C.

Independent Logging Association, and Howard Lloyd, a former member of

this Legislature and chairperson for forestry and legislation of the

BCILA. They are accompanied by Frank Drougel, general manager of the

Central Interior Logging Association. They met with our caucus today,

Mr. Speaker, to discuss forestry issues in the interior.

MS. BROWN: Mr. Speaker, I would like to add my voice to the

Attorney-General's in welcoming the women from the Vancouver Status of

Women council, as well as volunteers and supporters from the North

Shore Women's Centre, the YWCA, Simon Fraser University Women's Centre,

East Side Family Place, West Side Family Place, Hastings Family

Drop-in, White Rock Women's Place, Battered Women's Support Services,

Women Against Violence Against Women, the Vancouver Rape Crisis Centre,

the Women's Health Collective, the Women's Research Centre, and the

Service, Office and Retail Workers' Union.

MR. PELTON: Mr. Speaker, if my glasses serve me well this

afternoon, I believe I see a number of people from my riding in the

back of your gallery. Certainly I recognize Mr. David Vernon, who is a

solicitor in Maple Ridge. He is also the chairman of our local chamber

of commerce. I would like the House to welcome him and those other

people from Dewdney who are here this afternoon.

MS. SANFORD: I would like to introduce to the Legislature

Peter Johnston from Lasqueti Island, who is a member of the parents'

committee concerned about education in School District 69.

MR. NICOLSON: Visiting us from the heritage city of Nelson

are Howbart and Rosmund Sorensen of Nelson, and I wish the House to

make them welcome.

MR. CAMPBELL: I'm pleased to welcome Ed and Ruth Arnt, and

Lance and Ann Arnt, from Okanagan North. I would ask you to make them

welcome here today.

MR. HOWARD: At this time, Mr. Speaker, I rise under standing

order 54 to ask the unanimous consent of the House to move a motion

relating to the October 5 suspension of the Leader of the Opposition.

MR. SPEAKER: Hon. members, while this particular period in

our proceedings has been ruled on as one on which a motion of that kind

cannot be introduced, because of the uniqueness of the situation and

the lack of precedent I nonetheless, and without forming a precedent,

will put the question to the House. Shall leave be granted?

Leave not granted.

MR. SPEAKER: I heard several noes, hon. members.

MR. HOWARD: I noticed there were several noes. Mr. Speaker will notice, if it could be entered in the Journals , that they all came from that side of the House, led by the Premier.

Oral Questions

PUBLIC FUNDING OF

INTERVENORS IN KEMANO HEARINGS

MR. HOWARD: Mr. Speaker, I would like to direct a question to

the Minister of Energy, Mines and Petroleum Resources. Has he or the

government decided to reconsider the government's policy decision to

refuse funding for public interest groups who may be interested in

appearing as interveners in the Kemano completion project hearings, in

the interest of providing a balance between the general public, the

interveners and Alcan?

HON. MR. ROGERS: No, Mr. Speaker.

MR. HOWARD: May I ask a supplementary question, Mr. Speaker?

I wonder if the minister could tell the House whether he has made any

approach to the Utilities Commission or to Alcan regarding the

possibility of Alcan funding interveners at the hearings as part of its

application costs.

HON. MR. ROGERS: I have had several discussions with Alcan and have advised them that they can fund anyone they choose.

MR. HOWARD: Awfully generous of you.

In view of the minister's policy of no assistance for interveners in

the Kemano hearings, can the minister explain why the Ministry of

Energy, Mines and Petroleum Resources has been mailing Alcan publicity

material in Alcan envelopes through the government post office at

public expense?

HON. MR. ROGERS: No, Mr. Speaker, I cannot explain that, but

I will endeavour to get the answer and bring it back to the House. It

is news to me. I thank the member for bringing the information forward.

MR. HOWARD: Who's running this show? Alcan? I ask the minister whether he considers himself to be a wholly owned subsidiary of Alcan.

I ask the minister, in seeking to find the answer to that earlier

question about which he didn't have any previous knowledge — I doubt

very much whether he didn't — at the

[ Page 2944 ]

same time to explain why the government makes

assistance available to Alcan, in pursuance of its cause, and refuses

possible assistance to the general public in the pursuance of the

general public's cause.

HON. MR. ROGERS: I am following the stated policy of the government.

STATUS OF WOMEN COUNCIL FUNDING

MS. BROWN: A question for the Attorney General, Mr. Speaker.

Can the Attorney-General confirm that continued funding for the

Vancouver Status of Women council for the upcoming fiscal year is going

to be protected?

[2:15]

HON. MR. SMITH: The member understands, I think, that I can

confirm no funding for the 1984-85 fiscal year. We're doing estimates

today of the 1983-84 fiscal year that has yet to be completed. No final

decisions on any kind of grant funding for 1984-85 in my ministry have

been made. While I would like to be able to say something more

reassuring, I am unable to confirm any of the funding at this time.

BCILA CONCERNS OVER

TREE-FARM LICENCES

MR. SKELLY: I have a question for the Minister of Forests. At

recent hearings into the granting of a tree-farm licence to CanFor Ltd.

in Chetwynd, the B.C. Independent Logging Association asked that the

hearings be adjourned until a full public review had been conducted

into the impact of these licences on communities in the interior of the

province. Has the minister agreed to the BCILA request, and has he

decided to suspend the process of granting these treefarm licences

until a full public review has been conducted?

HON. MR. WATERLAND: No.

MR. SKELLY: Supplementary to the Minister of Forests. In Hansard

of June 29, 1978, the minister stated that before new licences are

established, government agencies must forward plans, in order to

prevent the development of land use conflicts which will later require

withdrawals of licences after they have been granted. Will the minister

advise whether the Ministries of Environment, Lands, Parks and Housing,

Energy, Mines and Petroleum Resources and Agriculture have submitted

plans with respect to the new rollover TFLs being proposed for the

interior, and if so, why in the case of the CanFor TFL hearings in

Chetwynd none of these agencies were present or submitted plans?

HON. MR. WATERLAND: Well, I'm afraid that in that mini-speech

the member just made the question somehow got lost. I wonder if he'd

ask me the question.

MR. SKELLY: I'm asking the minister if he intends to keep the

promise he made in 1978 that in order to avoid the kinds of problems

that appear to be developing in the proposed CanFor tree-farm licence,

other government agencies involved in land use management be allowed to

make their submissions to those hearings openly and in public.

HON. MR. WATERLAND: There has always been a great degree of

cooperation between my ministry and other ministries involved in land

use decisions, and I'm sure that will continue in the future.

MR. SKELLY: Clearly the cooperation is between ministries and not between the minister and the public, Mr. Speaker.

I have a further question for the Premier. The B.C. Independent

Logging Association has written to the Premier on a number of occasions

— March 16, 1983; July 13, 1983; September 7, 1983 — requesting a

meeting to outline their concerns over such issues as contracting

clauses in the interior and the granting of rollover tree-farm

licences. Is the Premier prepared to say why he has not acknowledged

the letters of the BCILA or agreed to meet with them to discuss these

issues?

HON. MR. BENNETT: All matters relating to particular

ministries are referred to the ministers. It has not been my policy to

try to develop policy in isolation or in absence of the ministries.

Their policy decisions come to cabinet where they are given my

consideration as well as the consideration of others.

MR. SKELLY: A supplementary to the Premier. Between the dates

when the BCILA first wrote to the Premier and today's date, has the

Premier ever met with the Council of Forest Industries and asked them

to submit their proposals for forest management in British Columbia and

in fact received proposals and suggestions from the Council of Forest

Industries? I would be further interested if the Premier would answer

this question: have any of those people who have applied for rollover

tree-farm licences in the interior also donated money to the Social

Credit Party for the last election campaign?

HON. MR. BENNETT: Again, any matters relating to the Forests

ministry would be dealt with by the Forests minister. No, I have no

idea who donates to any political party. I know that member is out

soliciting funds for his leadership campaign, and he is probably making

a list of those who give and don't give to him, but we don't operate

that way.

DAVID THOMPSON UNIVERSITY CENTRE

MR. NICOLSON: My question is to the Minister of Education.

Has the Minister of Education written at any time in the past six

months or communicated information to either the president of the

University of Victoria or to the administrator of Selkirk College

stating that the success of the David Thompson University Centre

warrants its continuation?

HON. MR. HEINRICH: The answer is yes. I did about six months ago, but times have changed.

MR. NICOLSON: I've been assured by the office of the Ministry

of Universities, Science and Communications that funds were allocated

for the university component of the David Thompson University Centre.

In view of the fact that those funds were allocated, will the minister

advise why he

[ Page

2945 ]

unilaterally decided to kill David Thompson University Centre?

HON. MR. HEINRICH: Mr. Speaker, this is a government decision

which I wholly support, and there are a number of reasons why it came

to pass. The question would indicate an answer which would probably

take up the rest of question period, but I think in fairness to other

members I will keep it brief. It is sufficient to say that the cost of

the operation was roughly double per student compared to all other

colleges and institutes in British Columbia.

Secondly, the per capita cost within the area that the member

referred to, Selkirk and the David Thompson University Centre, is

roughly $276, and the provincial average is about $111. As a matter of

fact, of the two adjoining colleges in the location of Selkirk and the

David Thompson University Centre campus, I think East Kootenay is

something like $118 per capita, and Okanagan is $105.

It was a difficult decision to make. At this time when there are in

fact insufficient funds, it seems to me that in the interests of

everyone we should preserve those colleges and institutes which are

doing well and have a significant enrolment — not an enrolment of 370

full-time equivalents, 90 of which were on the university program.

Selkirk College at Castlegar is not that far away, and the Rosemont

campus at Nelson is in good hands.

CASCADE CREEK

MR. ROSE: Mr. Speaker, I'd like to direct a question to the

Minister of Environment. It concerns the inundation of the Cascade

Creek area in the Hatzic valley, with which the minister is undoubtedly

familiar. I'd like to ask the minister whether he intends to amend his

storm drainage guidelines so that the residents of this area will be

able to qualify for provincial assistance. At the moment the

deductibles are so high that it makes it virtually impossible for the

residents to claim any damages from the province whatsoever.

HON. MR. BRUMMET: Mr. Speaker, we have some guidelines for

disaster relief and we are doing everything possible. My staff is out

there trying to accommodate the people and are taking everything into

consideration, but we can't totally abandon the guidelines.

MR. ROSE: Mr. Speaker, we are not asking the minister to

abandon his guidelines, but the matter is that the upfront money has to

come from the residents before they can qualify for provincial

assistance, and most of them can't afford it.

Has the minister considered that the portion that the province would

pay could be awarded according to the assessed damages — say at 75

percent or 80 percent — regardless of whether the residents put up the

money in the beginning or later?

HON. MR. BRUMMET: I'm not quite clear what the member is asking.

I know that we have asked people to submit their applications for damages, and

we have assessors and appraisers looking at them as quickly as possible, particularly

with respect to the land damage. Every effort is being make to get that money

out to them as quickly as possible.

MR. ROSE: Will the minister assure the House, Mr. Speaker,

that the residents will not, in order to qualify, be required to put up

their portion first, before any government money comes into that area?

HON. MR. BRUMMET: I don't think I can give that assurance.

Some people may already have spent some money to fix up something, so

how can I say that they shouldn't spend anything until the government

money is there? I have assured the member that we will get the money to

these people as quickly as we can. Every effort is being made to

process the applications, with the cooperation of the municipality and

the regional district, as quickly as possible.

MR. ROSE: Mr. Speaker, a final supplementary — I said that

the last time but it really is this time. The allocation for bridge

repairs under that same fund has been increased to $350,000 from about

$170,000. Is the Ministry of Highways going to be asked to put up the

deductible in that case? We're saying that it's fine for those people

who can afford to put up their portion of the money, but will the

minister not use that as an excuse to deprive those who can't of the

provincial responsibility share?

HON. MR. BRUMMET: Mr. Speaker, I was under the impression

that the money for the Ministry of Highways comes from the same

government that the money for disaster relief comes from.

Hon. Mr. McClelland tabled the annual report of the Ministry of Labour for 1982-83.

MR. SPEAKER: Hon. members, the Chair has been advised that

there are two matters to be dealt with at this time. In deference to

that, I will come back to the Provincial Secretary after I recognize

the member for Nelson-Creston.

MR. NICOLSON: Mr. Speaker, I ask leave to make a motion for

the adjournment of the House for the purpose of discussing a definite

matter of urgent public importance. Briefly stated, the matter is the

economic crisis in the Nelson region, where unemployment is in excess

of 25 percent and the government has announced its intention to close

the David Thompson University Centre without consultation with the

community or consideration of the economic impact. As a further delay

to consideration of this matter will force students to make alternate

educational plans, I feel that this matter is urgent and should be

debated forthwith.

MR. SPEAKER: The Chair will undertake to review the

submission and bring a response back to the House at the earliest

opportunity, without affecting the member's urgency aspect.

MR. SKELLY: I also rise under standing order 35 to ask leave

to move an adjournment of the House to discuss a definite matter of

urgent public importance. The matter relates to the rolling over of

forest licences into tree-farm licences, which will transfer control of

millions of hectares of provincial lands, including lands not

considered productive forest lands, to private administration. This

transfer is taking place without sufficient public analysis as to the

costs and benefits to our citizens, and there is clear evidence that

jobs will be lost both in the government and in the private sector,

[ Page 2946 ]

and that returns to the treasury will be decreased, forcing further cuts in government services to the people.

Mr. Speaker, at the truck loggers' recent convention the minister

announced that new tree-farm licences would be granted in spite of the

deficiencies in information and in the public involvement process. For

this reason I would urge that you consider this a matter of extreme and

urgent public importance.

[2:30]

MR. SPEAKER: Thank you, hon. member. As undertaken earlier, I

will bring a response back to the House at the earliest opportunity,

without prejudice to the urgency aspect.

Hon. Mr. Chabot tabled the following reports: the forty-eighth annual report

of the business done in pursuance of the Pension (Public Service) Act for the

year ended March 31, 1983; the forty-second annual report of the business done

in pursuance of the Pension (Teachers) Act for the year ended December 31, 1982;

the forty-fourth annual report of the business done in pursuance of the Pension

(Municipal) Act for the year ended December 31, 1982; the twenty-eighth annual

report of the business done in pursuance of the Legislative Assembly Allowances

and Pension Act,

Part II, for the year ended March 31, 1983; the seventh annual

report of the business done in pursuance of the Public Service Benefit Plan

Act for the year ended March 31, 1983.

Hon. Mr. McGeer tabled the following reports: the annual report of the Ministry

of Universities, Science and Communications; the ninth annual report of the

Universities Council of British Columbia; the third annual report of the Knowledge

Network of British Columbia.

Hon. Mr. Brummet tabled the following reports: the annual report of the Ministry

of Lands, Parks and Housing for 1982-83; the annual report of the Ministry of

Environment for 1982-83; the annual report of the British Columbia Housing Management

Commission for 1982; the annual report of the salmonid enhancement program for

Hon. Mr. Rogers tabled the annual report for 1981-82 of the British Columbia Utilities Commission.

MR. SPEAKER: Hon. members, the Chair tables the annual audit of the office of the auditor-general.

Orders of the Day

HON. MR. GARDOM: Mr. Speaker, before calling Committee of

Supply, I'm sure all hon. members, including those who are not aware,

would like to express the very best wishes for a speedy and complete

recovery to the second member for Vancouver East (Mr. Macdonald), who

has been slightly under the weather recently.

The House in Committee of Supply; Mr. Strachan in the chair.

ESTIMATES: MINISTRY OF FINANCE

On vote 34: minister's office, $172,432.

HON. MR. CURTIS: Mr. Chairman, I look forward to....

[Applause] They're just hoping their expenditure requests for the next

fiscal year are approved.

I look forward to answering questions of the committee over the course of the coming hours.

MR. STUPICH: Mr. Chairman, I can appreciate that the minister

is somewhat embarrassed. Certainly anyone would be, I would think, to

have been in his position in the past four years. I can understand why

he would like to have vote 34 swept under the rug and dealt with very

quickly indeed.

Interjections.

MR. STUPICH: I'm not hearing all these remarks, and I'm afraid I might be missing something.

I recall, for example, the minister on two occasions — the two most

recent budget speeches — telling us that B.C. was going to lead the

nation in growth by every measure; the economic growth in the province

would be greater than in any other province in Canada; we would show

Canada the way. We have been leaders in some ways, and I would like to

make a few points about that.

Contrary to the minister's approach to this, I think it's important

enough that we do take some time to discuss it. I intend to take just a

few minutes running over the financial picture and some of the things

that the minister has said — not what he said today, but on previous

occasions. I expect my colleagues will have something to say, and I

expect others, including myself, will have some specific questions as

well. But we don't intend that the vote will pass as quickly as the

minister might hope.

I recall the budget presented in the House on July 7, when the

minister said, supported by the Premier.... He went around the province

saying that B.C. was going to lead the country in economic growth if

his party was re-elected to office. I'm certain that in saying that

they really believed that that would be the case and B.C. would be the

leader. Certainly the Premier in his budget....

Interjection.

MR. STUPICH: Mr. Chairman, if the Premier wants to get up on

his feet and ask me a question, which he'll have an opportunity to do,

I'll be only too happy to deal with it. But I feel that remarks should

be made through you to the others, and if anyone over there wants to

ask me a question, the proper way is for that person to get your

attention, to address you, to have the question put to me through you,

and I'll deal with it in that way.

To get back to my point of the Premier and the Minister of Finance

talking about what a great future there was for the province of British

Columbia in economic growth, he did the same thing in 1982 — I believe

the date was March 29. I'm not sure; I'm forgetting what day in March

the budget was. Certainly in 1983 it was July 7. Yet we find that the

minister's own friends — the government's own friends at least, friends

of the party in power — are complaining that that is not happening.

[ Page 2947 ]

Very recently there was a newspaper story in the Province ,

dated Friday, January 27. "B.C. Facing 'Slow Growth.' British Columbia

is facing another year of slow growth, according to the Employers'

Council of B.C." One would expect that if that particular organization

was going to say anything at all about what this government was doing

it would be doing its best to say good, helpful things, rather than

complaining that under the party in power B.C. is going to be leading

the nation backward, not forward, and that our record is likely to go

on being worse than that of almost any other province in the country.

This story goes on to say: "In a study to be released next week, the

council predicts the B.C. economy will grow by 2.8 percent, below the

3.3 percent level forecast for Canada as a whole by the Conference

Board earlier this week and immediately attacked by Finance Minister

Marc Lalonde as too gloomy."

I would like the Minister of Finance, if he can, to stand up today

and tell us that the picture presented to the citizens of British

Columbia by the Employers' Council is too gloomy, if he has information

to share with us today in the House, to share with the public outside

of the House, information that will make everyone believe that the

Employers' Council conclusions are too gloomy, and that B.C. will be

much better off than is predicted in this story. I certainly would like

to be reassured by the minister that such is the case.

I wish, and I'm sure the minister wishes, that he could stand up and

tell us that. I myself would have some difficulty in believing the

minister if he did tell us that. Not that I would suggest for one

moment that he would deliberately mislead me — or you, Mr. Chairman.

I'm thinking of his predilection in the past to present political

documents as budgets — politically inspired documents that were in no

way related to actual fiscal or financial estimates of what was

actually going to happen in the province. They were political documents

designed to win elections or to make excuses for something not having

happened in the way the minister had said it would happen.

Interjection.

MR. STUPICH: Not that particular minister. We can't say that

that particular individual, in his office as Minister of Finance, had

two budgets. But there was one, as the member for Comox (Ms. Sanford)

points out. The very first Minister of Finance under the new Social

Credit administration did produce two budgets, one following the other

by 10 days. Most of the figures were the same, but some of the words

were substantially changed.

MS. SANFORD: Political.

MR. STUPICH: That was indeed a political document, but the

figures themselves were not that bad. They did bear some relationship

to what actually happened. But the figures presented by the current

minister during the past four years, all four budgets.... I've said

this on previous occasions, and given him the opportunity to comment,

to explain, or at least to show some interest. Up to this point he

hasn't, and so I will try again.

You will recall, Mr. Chairman, that in 1981 we were told there was

going to be a balanced budget. But when the budget came out in 1982, I

believe, with the figures showing what was happening over a three-year

period, 1981 actually showed a cash drawdown of some $330 million. You

will recall, Mr. Chairman, that in 1982 not only were we told we were

going to catch up the $330 million that we drew down the year before,

but there would be a further surplus of, I think, some $290 million. In

other words, the actual surplus for that one year would be in excess of

$600 million. You will recall that once again we drew down our cash

reserves by some $280 million. Worst of all by this minister, you will

recall that the budget for 1983 predicted a balanced budget, yet the

latest figures released by the minister show he was $978 million out —

almost $1 billion out.

Surely this bears some comment. Some people on that side of the

House need some help from the minister in explaining finances. There

are still some people on that side of the House who think it was the

NDP that created debt in the province. I wouldn't be a bit surprised if

there are still one or two over there who think that when we left

office there actually was a debt in the public accounts of the

province. Some of them probably haven't had the opportunity to read

public accounts and to learn that the orders-in-council creating debt,

for the first time in the history of the province since February 1952,

came on March 31, 1976, three and a third months after the NDP

administration went out of office.

I think these things are worth explaining. I think the minister

should tell us about them. The minister might want to comment, for

example, on the way he and the government have complained about the

rate at which the federal government is leading us along this path to

greater and greater debt, with little to show for it. But what about

the provincial government? What's been the history of the province as

far as the provincial government is concerned? Speaking again from the

point of view of debt, I remember saying on a previous occasion —

again, the minister at the time didn't think it wasn't worth commenting

on — that it took us 104 years in the province of British Columbia —

that is, up until the end of 1975 — for the gross public debt,

including contingent liabilities, to add up to a total of $4 billion by

December 31, 1975, and it took the present Social Credit administration

only seven years to almost quadruple that figure. That's some

achievement. What do they have to show for it? The minister doesn't

even think it's worth commenting on.

[2:45]

There wasn't much warning that we were going to be dealing with

Finance estimates today, Mr. Chairman. That's not a complaint; that's

the way the game is played and we accept that. I just picked up at

random some press releases that have come from the Premier's office

that are in a file presented to me by my secretary. I had a whole list

of them here, each one of them indicating one more way in which the

government was adding to the provincial debt and one more way in which

it was borrowing money: the issuing of parity bonds, borrowing $200

million from the Bank of Commerce. To the best of my knowledge, that's

the first time it's been done in quite that way.

Under the old Social Credit administration, it used to be that Crown

corporations borrowed money internally by selling parity bonds. By the

time the NDP were elected, there was a substantial amount of money

outstanding by way of parity bonds — some $228 million. But the bulk of

that money owed was in the province of British Columbia; we owed it to

ourselves. We were a bit concerned because these bonds could be called

at any time, that there could be a run on the bank and they might all

be called at once. The advice from staff was that it was simply too

high a figure for the economy

[ Page 2948 ]

of British Columbia to stand. So the advice from the ministry staff at the time was to reduce that figure.

Mr. Chairman, I'd be willing to wager that there isn't anyone on the

Social Credit side of the House who recalls that we did not increase

the debt of the province. We reduced the direct debt. We reduced the

parity bonds outstanding. There was $228 million outstanding when we

reached office. There was $125 million outstanding when we left office.

Probably by now it's all been cashed in. Interest rates went up after

that and people cashed them in. But we set about a deliberate policy of

actually reducing government debt rather than simply piling debt upon

debt, as the minister is doing. There was one handed to me just today

by my colleague from Burnaby North (Mrs. Dailly), which said: "Finance

minister Hugh Curtis today announced cabinet approval of a Canadian $24

million borrowing by the province from the Industrial Bank of Japan."

There's nothing wrong with borrowing from Japan; it's another place

where we can borrow money. My point is that never before have we had to

go to Japan to borrow money. It's only because we have a Social Credit

administration in office in the province of British Columbia that we

seem to have to go all over the world looking for ways in which we can

borrow more money.

Mr. Chairman, do you remember the story in 1976-77 when the then

minister pulled off a coup? He didn't go and borrow money; he sold

three ferries. We are going to be paying for them for a period of 18

years. We're going to be paying $90 million for ferries for which we

received some $37 million. It cost a great deal. You can call that

borrowing money. We sold ferries and we're going to be buying them back

for a period of 18 years. Apparently we're doing the same thing now.

We're not doing it with railroad cars, believe. I had a very quick look

at this press release that shows we're doing the same thing with some

of the railroad cars that are shipping coal out of the Tumbler Ridge

area.

Treasury bills and bonds are being issued. We haven't dared go the

route that W.A.C. Bennett went when he issued the parity bonds. The

parity bonds were instant debt in that the holder could at any time

call on the government to pay back those funds. This government knows

that its financial credibility stands so low that it doesn't dare issue

any bonds that can be cashed at any time without notice.

I have some concern about the way in which this government is

handling the finances of the province of British Columbia. The most

recent reflection of that was the drop in our credit rating — not a

large drop; nevertheless a drop. At the time the drop was said to be

because of the apparently uncontrolled rate of growth of our total debt

between the public debt and the Crown corporation debt. There was no

control over it. It was just running on and on. The minister and the

government were apparently helpless or perhaps preferred not to do

anything at all about it and were not showing any real concern.

It used to be the tradition, before that member entered the House —

I've been here a little longer than he has — that when a minister

introduced the estimates of his own salary vote he would stand up and

tell us something about what was going on in his ministry. In the case

of the Minister of Finance in those days, he would tell us something

about what was happening in the province. Certainly it was done in the

budget in printed form. But he would then go on in presenting his

estimates to elaborate on some points, give us some hope — whether

there was real hope or not — for the future, and give us caution. It

was generally more caution than hope from

W.A. C. Bennett; that was his style. But at least he led into a

discussion of his salary vote by going through the motions of

suggesting to the members of the House that there was some rational

reason for voting his salary. This minister gave us no reason to vote

in favour of his salary. He simply said: "Well, there they are. We're

11 months through the year. Why not approve them?" Mr. Chairman, unless

he has a little bit more to say in favour of paying his salary than

simply the fact that the fiscal year is 11 months gone, I think the

minister hasn't earned the right to get that salary.

HON. MR. CURTIS: Mr. Chairman, I'd like to deal with some of

the points raised by the hon. member for Nanaimo. He covered a fair

variety of points, some of which we have debated before in Committee of

Supply. I indicated in my opening remarks, brief though they were, that

I would be prepared to discuss the estimates of the Ministry of Finance

and the amount voted for my salary over the course of the coming hours.

If that is the committee's wish, I'll be quite happy to do it. I

certainly did not expect that there would not be some debate.

I would first refer the member to the forty-third edition of the Financial and Economic Review ,

which is one of the longer-lasting documents in financial reporting in

the province. Last year's issue is the forty-third edition, and it has

continued over that number of years as a complete review of the year

just ending. The reason I mention it is that all members of the

committee, including the member for Nanaimo, may want to examine some

of the remarks that are contained in it. This is not a political

document, in the way that some material presented to the House is;

rather, this is a ministry report on the financial and economic status

of the province for a particular period.

Facing page 3 — not identified as page 2 — is a very concise

summary

of the anatomy of the 1981-82 recession, and I commend that to the

committee. It shows that that which the member spoke of in the early

part of his remarks — that is, the decline in gross provincial product

— was 12 percent through the period of the recession. It is correct to

say — and this is the point that this government has made, and, indeed,

made in the course of the election campaign in 1983 — that the economy

suffered very severely through that recessionary period. One observer

made the comment that the economy was in free fall. Certainly it was

dramatic, severe and sudden. It was made all the more so by the fact

that we had missed, if you will, the 1980-81 recession which hit most

of North America. To emphasize that point, I would refer the committee

and the member to the second quarterly financial report for fiscal

'83-84, which shows how rapidly our economic stats had increased as

opposed to Canada as a whole in the period '79-80 and to the latter

part of 1981. Then occurred that very dramatic decline of approximately

12 percent.

Well, we have started up again, and that is not just the hope; it is

the commitment we have made to the people of this province, the

commitment I can make again today as my estimates are debated, and the

commitment every member of our government can make. It's far more than

hope; it's a clear indication that the drama of the recession is behind

us. There are difficulties ahead, there can be no doubt about that.

There are uncertainties.

MR. LEA: What are they?

[ Page 2949 ]

HON. MR. CURTIS: I hear an interjection from the newly

reformed constructive member for Prince Rupert — reportedly. The

uncertainties, he knows as well as I, are interest rates in the United

States, the recovery in the rest of the world where we trade, and

therefore the health of our export market.

It's sufficient to say, though, with respect to the forecasts we now

have.... The hon. member for Nanaimo spoke about the Conference Board

forecast. I think he knows as well as I, and as well as all members of

this House, that forecasts vary from organization to organization and

from individual to individual. As I see it, the Conference Board of

Canada in its most recent forecast is the most pessimistic of a group

of several who offered their views with respect to the economic growth

of the country. The same would apply to the economic growth in any

particular province. We see the Conference Board number which we have

both discussed. Data Resources of Canada is forecasting 5.1 percent for

1984. The economists associated with the Bank of Nova Scotia forecast

4.5 percent. Dominion Securities Ames' economists are looking at 3.8

percent. The Toronto Dominion Bank is proposing 4.2 percent. Again, all

of these are national rates of growth. McLeod, Young, Weir and Co. Ltd.

forecast 4.5 percent. The Royal Bank of Canada, I believe in its Econoscope magazine, is forecasting 4.9 percent. The Economic Council of Canada is forecasting 4.3 percent.

Conference Board forecast was pessimistic. I think he said "too

gloomy." I am perhaps not quoting him completely correctly, but

nonetheless the Conference Board of Canada forecast as very recently

released is the lowest of all the indicators or all of the agencies who

make it their business to offer intelligent guesses with respect to

economic growth in the country and its regions and its provinces.

[3:00]

The point is, Mr. Chairman, that in the seven and a half months,

approximately, since the 1983-84 budget was presented, our forecasts

have varied relatively little, but as they have varied so have those of

other agencies, private and public, who examine the economic health of

the province, other provinces and the country.

The member spoke about the parity bonds which were issued by the

former Social Credit government. Yes, it is correct, I think, that

there were those who were concerned with respect to the liability

facing the provincial treasury from time to time. Nonetheless, that was

a particularly useful and a particularly popular instrument for its

time in the recent history of the province. In looking back on parity

bonds, I think the member for Nanaimo would realize that we undertook a

variation of parity bonds, and I emphasize "variation" because they

weren't instantly cashable. That was the undertaking of the so-called

housing bonds — the HAED bonds. They were quarterly cashable.

Incidentally, the refunds on those have been insignificant. There has

been very little in the way of cashing those in, notwithstanding the

change in interest rates in the interval. But that sale was extremely

successful, and I think the only difficulty we had was that the supply

did not meet the demand in all parts of the province. Certainly a

number of people were disappointed that they could not obtain the

number of bonds which they had hoped. That was just a couple of years

ago, and it was an undertaking which I enjoyed doing on behalf of the

people of the province. I've been asked recently if we would do

something similar at some time in the future, and while we have no

particular plans to undertake the housing and employment development

bonds in the immediate future — we have not discussed it — it is a

possibility at some particular point.

The member also spoke about the provincial credit rating which is

assigned to British Columbia Hydro by the U.S. firms of Moody's

Investors Service Inc. and Standard and Poor. I said earlier in this

session that of course I was disappointed that our credit rating was

moved from a triple-A, the highest rating, to the next highest. We

happen to believe — and I think events to come will indicate — that we

still deserve the highest possible credit rating offered by those two

firms. The interesting thing is that one would have expected that a

downgrading of the credit rating by those two firms would have affected

the yield required to be paid by B.C. Hydro in the United States

market; not so in the Canadian market and not so in the European-U.S.

dollar market.

It was just a number of weeks after the downward revision of the

credit rating that we undertook a borrowing for B.C. Hydro, as the

former government did from time to time, in the United States market,

in U.S. dollars. The issue was eminently successful, and followed by

another one later in the fall, perhaps even more successful, with no

noticeable effect with respect to the coupon rate paid on those bonds

as a result of the downgrading. Very recently, undertaking a commercial

paper program in the United States, the same firms have assigned us the

highest possible credit rating for the short-term paper. That is

confidence. That has just occurred.

Mr. Chairman, I cannot forecast when a triple-A credit rating will

be restored to British Columbia, but I do assure the committee, and I

assure British Columbians, that I believe that we shall have very good

reason to seek a restoration of that highest triple-A credit rating in

the early future. I intend to do so.

MR. LEA: Mr. Chairman, I suppose one of the things that as

legislators we have to deal with is that the budget we're now

discussing really was brought in in July 1983 and that at the time the

government and the minister currently under discussion were saying that

that budget was going to help economic recovery in the province. So I'm

not going to compare us to other provinces, although when you do that

the government doesn't come out looking that well. But oftentimes it's

like comparing apples and oranges because of the different economies

between one province and another. For instance, in Ontario, where they

have more of a manufacturing base, it's understandable that their

economy is going to pick up a little more quickly than an open economy

like ours that deals strictly in extraction and selling, with some

secondary and tertiary applications into the international marketplace.

But we can compare B.C. to B.C. I think that's a fair kind of

analysis to do. And when you start taking a look at the statistics

comparing B.C. to B.C. and what's happened to us since the introduction

of that budget, we don't come out that well. Going back to June 1983,

and working it up to December, there were 1.2 million people employed,

and almost 181,000 out of work at that time. Then you go to July, and

we have 10,000 less employed. Then you go from July to August — 27,000

more unemployed. In September there were 16,000 more unemployed;

October, 18,000 more not employed. There was a slight increase by 8,000

in December 1983. The unemployed level has remained fairly constant. As

I said, it was 180,000 in June. It went up to 183,000 in July, 188,000

immediately after the budget in July, then back

[ Page 2950 ]

down to 172,000, then down to 167,000. In November

it went back up to that July figure of 183,000, and in December again

183,000 unemployed. In percentage terms in December we had 13.7 of our

employable work force unemployed. In June 1983 it was 13.1 percent. So

we have a higher rate of unemployed now in November and December 1983

than we had when the budget was brought in. So that's comparing oranges

with oranges.

The government could say: "Well, if we hadn't done what we were

going to do, things would have been worse." And that's always a rather

intangible thing to discuss: how much worse it would have been. But

obviously, the recovery that was supposed to have come about because of

the budget did not come about. You can follow it up with statistic

after statistic. You can look at bankruptcies. Consumer bankruptcies in

the year 1982 were 2,085. In 1983 they were 2,652 — an increase of

27.19 per cent. Business bankruptcies in 1982 were 1,042. In 1983 they

were 1,279 — an increase of 22.74 per cent, bringing the total increase

in bankruptcies — taking both of them in — to an increase of 25.71 per

cent. Again, comparing oranges to oranges it doesn't took like a great

economic recovery; in fact, it looks just the other way around. It was

supposed to be restraint equals recovery, and in some cases it looks

like restraint equals more recession. Then you take a look at the rest

of Canada and compare bankruptcies. The total aggregate of bankruptcies

in the rest of Canada decreased by 13.4 percent where ours went up

25.71 percent.

You cannot really look at the economic figures coming in since the

budget and have any degree of confidence that the budget helped bring

around economic recovery. All the indicators would indicate that

exactly the opposite is happening.

What disturbs me more than some of the figures we're looking at, Mr.

Chairman, is that when the minister makes his remarks to the House, I

have the feeling that I'm listening to someone who is only concerned

with bookkeeping and not economics; not looking at our future with any

sort of vision. After the minister had said "Things aren't that rosy;

we're still going to have our troubles," I interjected: "What kind of

troubles?" He then went into the fact that if only the economy in the

United States would pick up, if housing starts would pick up, then our

economy would be well on the way to recovery.

It's very difficult to relate those remarks to the facts. The fact

of the matter is that we have a forest industry in this province that

is in crisis, both in the short term and in the long term. We have a

fishing industry that is in crisis, both in the short term and in the

long term. We have a mining industry in crisis both in the short term

and in the long term. For the minister not to deal with an economic

vision of what he sees as the solutions to some of these crises in our

major industries indicates to me that we're getting a bookkeeper's

report instead of an economic vision coming from the government.

I'd like to deal for a few moments with some of the problems that I

see in those industries, and the problems that are not being addressed

by this government.

In the short term the government is struggling to get some economic

activity going, and that's laudable, but I think we have to understand

first of all the economic levers that are available to us as a

province. We have limited economic levers. Many of the economic levers

that are needed to manipulate an economy are not within our

jurisdiction, but within the federal jurisdiction: interest rates,

tariffs, exchange controls and money supply. None of those are here, so

we're left with limited economic levers, and I think the provincial

government can only be judged by those economic levers that they have

some jurisdiction over. I know we all like to criticize and take credit

for economic levers that we don't really have any power over.

So what are the economic levers that a provincial government has?

They have the ability to raise taxes. They have taxation policies that

they can put in effect which will have some economic impact on our

province. They also have the opportunity to spend that money, and they

can be judged on how they spend the money. Other than raising and

spending money, which governments at the provincial level should be

judged on, they have one other lever which they can put into effect:

resource management. There has not been one word from the Minister of

Finance, who is the chief steward of our economy, about those economic

levers and what the government is doing to enhance our economy through

those economic levers.

No one can argue that when revenues are not coming in because of a

slowdown in the economy you obviously can't spend the kind of money

that you'd like to, or possibly that you have in the past. There is no

doubt that people in the province want some restraint in government

spending. But I think it is also obvious that the people in this

province want restraint that's applied in a commonsense way and that

has some fairness about it. That's really what they want. So restraint

with fairness is the object, I would think.

[3:15]

If you're not going to have the same amount of dollars to spend but

you still demand that you're going to keep your level of services at an

acceptable level, then you have only two options: you can let those

service levels fall to an unacceptable level, or you can look at two

other means of keeping them at that acceptable level. You can either

borrow money or you can do some extra taxation in order to keep those

levels up, or you can do a combination of both — you can borrow some

money and you can tax.

I for one am not going to stand up and say that during these

recessionary times the government shouldn't go out and borrow money to

keep those services at a proper level. I don't think anybody would say

that. But I think we also have to take a look at some taxation.

Obviously we don't want to tax corporations where there is a chance

that we're going to hurt economic recovery, so I think we have to take

a look at it case by case and ask where we can apply some taxation that

won't hurt economic recovery. There are profits that we should be

taxing and bringing into the central treasury to help keep those

services up. I would suggest taking a look at the banks, which are

making extraordinary profits. It seems rather strange that they're

doing that when everyone else is not. When the interest rates were high

the banks were making all sorts of money. Now that the interest rates

are lower the banks are making even more money. Obviously we have to

take a look at taxing in some areas such as the banks.

When you start taking a took at some of the figures, it's

astounding; for instance, if you look at the aggregate tax rate on

chartered banks — and these are national figures — the Bank of Montreal

had a pre-tax income of $239 million. They paid no tax at all; the tax

rate was zero. The Bank of Nova Scotia had a tax rate of 15.6 percent;

the Toronto-Dominion had 16.1 percent; the Royal Bank of Canada had

zero; the Canadian Imperial Bank of Commerce had 20.2 percent. The

[ Page 2951 ]

aggregate average of the tax rate on the Canadian

banks was 8.5 percent, when they themselves admit that they're making

greater profits than ever before. I think that the citizens of the

country would be glad to pay an 8.5 aggregate amount of tax on our

profits or on our earnings. We would only be too happy to. So I think

the government has an obligation to take a look at the banking system

in this province and in this country and raise some revenue from the

banks.

Also, I think we have to take a look at certain income earners.

There is no magic solution or quick fix in the short term to get our

economy where we would like to have it. In the long term I think there

is great room for optimism if we apply ourselves cooperatively and

diligently to the task, but in the short term you can't go out and

create an economy that isn't there that doesn't make sense. There's no

doubt that in the short term we're going to have to share a little with

each other as citizens. Whether we are corporate citizens or individual

citizens, we have an obligation during bad times to share. It seems

incongruous to me that we would ask some of our citizens to live on

$8,000 to $12,000 a year, which oftentimes is the complete family

income, when other citizens are living on $75,000, $80,000, $100,000

and $500,000 incomes. I'm not saying to straighten it right across the

board, but I think the government would find a much better reception to

its restraint program if people could see that it was applied fairly.

It's not moral to allow some people to make three trips to Hawaii in

a year when some people can't make a trip to the dentist; that just

doesn't seem to be fair. Until we can turn our economy around I can see

no other choice but for citizens in this province and in this country

to share with each other and to accept restraint, but only if it's

applied evenly and fairly throughout society. I don't think the

government has done that. What they're doing is saying that those of us

who are working will opt for economic recovery at the expense of the

few. That is wrong, but that's what the government's restraint program

is doing.

Mr. Chairman, I would also like to take a look at the government's

spending. First of all, I would like to deal with some of the long-term

problems in our economy. One of the ironies is that if we do

restructure our economy to meet new demands in the international

marketplace, we're going to have to start applying new technologies

more and more both to our extraction and to our processing and

manufacturing section. The irony is that if we're successful in that

endeavour, then we are going to be looking at jobless wealth creation,

and by our economic recovery and restructuring we are going to be

putting people out of work exponentially in processing and

manufacturing, in office work and in middle management. People are

going to be disappearing into the unemployment figures exponentially if

we're successful in turning and restructuring our economy to be a

healthy vibrant economy. It's one of those ironies for us. In the long

term, though, it's something that has to be done, and there's not one

word from the minister about those horrendous structural problems that

we have in our economy, which are bringing around structural

unemployment. It's going to increase.

Mr. Chairman, if we have an economic future in this province, one of

the areas we are going to have to apply ourselves to is education. Any

investment in education is a good investment, because an investment in

our people, their training and their education has the potential of

returning great wealth to us in the future.

It doesn't have to be exotica either. I met a guy on the ferry who

is an out-of-work welder. He wanted to go back to school in this

out-of-work period and upgrade his skills as a welder, but the courses

that were available during good times are not available during bad

times. That's like cutting your nose off to spite your face. We should

enhance those programs during bad times. When we have people out of

work, obviously it's an opportune time for retraining, training and

education generally.

You know, we don't come out too well compared with other provinces

in what we spend on a percentage basis out of our economy for

education. We are very low. The percentage of the total budget that

goes into education from all provinces is 21.2 percent. In this

province it's 15.5 percent. So we're behind the aggregate. And when you

start comparing us to places like Newfoundland, which is a

comparatively poor province.... They're putting 25.3 percent of their

budget into education compared to our 15.5 percent; Prince Edward

Island, 24.1; Nova Scotia, 24; Ontario, 20.6; Alberta, 17.6;

Saskatchewan, 15.9; Manitoba, 18.3. We're lagging behind in the very

area that we should be applying ourselves to. If we have a future, our

economic future at this point is not so much in investing in capital

assets but in investing in human assets. That's really where it is.

If we had all the capital investment we wanted in this province —

and this government is always talking about how we need capital

investment to come into our province — we would have no idea as a

society what to invest it in. Do we need more pulp mills? We can't sell

the pulp we're producing now. Do we need more sawmills? We can't sell

the lumber we're producing now. Our problem is that in those areas of

production we do have, we cannot see where there's going to be a demand

for those products that would cause us to go in and increase

production. For any increase in demand, we have more than adequate

supply in our economy already. We have done precious little research in

this province to find out what direction we should go in — precious

little effort, precious little money. We are way behind most of the

other western democracies. On a percentage basis, out of our gross

provincial product we put an alarming lack of money and effort into

research. We have to have.... I'm not talking about a gigantic

government, bureaucratic research program; what I'm talking about is

getting research money in where it's going to be effective.

Most of that, I would suggest, would be in small and intermediate

business areas. They are the ones historically which have shown us that

they can be the innovators, that they come up with the ideas, that

they're more efficient and that they're vibrant.

MR. MICHAEL: Good free-enterpriser.

MR. LEA: I'm talking about a market economy; you can call it

what you want. I'm talking about the small enterprises in a market

economy that have shown us the way in innovativeness and efficiency.

I'm not suggesting that we should put a gigantic research program

together that would either go to a government bureaucracy or to big

corporate bureaucracies which have shown little in the way of being

innovative. What they usually do with research money is make it a tax

write-off on profits. The problem is that the companies that need it

the most and the companies that have shown historically that they're

the most innovative cannot use that kind of incentive because, in most

cases, they're not

[ Page 2952 ]

making the kind of profit where they could write it

off in the first place. Secondly, when they do get a good idea, they

can't get any capital to follow it through, either working capital or

for the capital assets.

For the Minister of Finance, the economic steward of this province,

not to make some opening statements about some of the horrendous

problems we face in restructuring our economy.... We know for a fact

that if we're going to be successful we have to have a highly trained,

highly skilled workforce. Much of that money should be going into the

training of management. Much of that money should be going into the

training of scientific skills that we're going to need if we're going

to be able to do the research and then apply the research. It's

incredible: no economic vision to deal with the problems.

[3:30]

Our mining industry. Our major product is copper. When you take a

look at the new competition that's coming on stream from some of the

other countries, like Chile and Zaire, and the fact that they're so

heavily in debt that they're oftentimes selling their products in the

international marketplace at below their cost of production just to get

a balance of payments to pay off their debts, it's pretty hard for our

mining industry to compete there. On top of that, many of the uses for

copper are not going to be there any longer. I can think of things like

fibre optics, which are taking the place of copper. A mining industry

in crisis — there's not one word from the minister. A forest industry

in crisis, especially on the coast, where there has been no investment

to speak of back into the forest industry, so that we can utilize

smaller wood, so that we can have better utilization of our forest

industry.

Again the irony of ironies. A new sawmill in Port Alberni, with more

modern technology, has the same output as the old sawmill but with half

the workforce; a 100 percent increase in productivity but half the

workforce is out of work. That's going to increase in the sawmill

industry and in the pulp mill industry. As we modernize those plants,

we're going to be putting people out of work. But we must modernize

those plants. I'm not suggesting that we act like Luddites and try to

destroy the technology. I think we should embrace new technology to

make ourselves more competitive in the world, but we just can't put

those workers out to dry. What we have to make sure of is that we have

a taxation policy that will tax the yield from those new technologies.

We are going to have to bring that money around through the taxation

system, into our economy, and create worthwhile jobs with dignity in

our society on the service side of the economy. What better place to

create those jobs than in education? Have some immediate employment,

which is always a nice result in a recession. But the downstream

benefits from that kind of investment are incalculable. We know that if

we have a future, that's where we have to put our money. When you look

at the statistics, we are about six percentage points behind the

aggregate amount in Canada.

It's not a case of being ashamed of ourselves — which I know we as a

province are for having those kinds of figures staring us in the face.

It's not only the social disgrace; it is economic stupidity in the long

run.

Another reason why we in North America have been in such trouble

over the years is that our wealth — we are no exception; we have a more

open economy than most and are therefore more vulnerable — has been

created in what is called high-volume standardized production. The old

high-volume standardized production called for some pretty skilled

people throughout the entire workforce. At one time the only thing that

was exportable — and mobile — was capital. It could move around. The

technocracy was not exportable because they could not get the skilled

workers in third-world countries to apply themselves to that

high-volume standardized production. Now, though, the new technologies

are calling for very few skilled people on the top and unskilled or

semi-skilled people as the majority of the workforce. We're losing

those jobs out of our economy. They're going to third-world countries

where there is cheap labour and often very few environmental standards.

There is no way we can stop it. We cannot compete in the international

marketplace any longer in high-volume standardized production. We must

look at flexible production, and that calls for the very highly

skilled, highly trained workforce that I was talking about — to do both

the research and the development after we find out what we can produce

that we can be competitive with in the world marketplace.

Those are real problems. They're not problems that we're dreaming up

over here. I can't believe that they aren't problems that many members

on the other side are aware of. I think we're all aware of them, as

legislators. Maybe the Minister of Finance is the only one who isn't

aware of it — or he doesn't want to face those horrendous structural

problems in our economy. But they are there and they have to be dealt

with. To leave the impression that high technology and an increased

demand for our goods from the United States, especially in forest

products, is going to be the answer to our economic future is just not

true. It is evading the question. I think that the people in this

province for the most part are ahead of us. They're ahead of their own

government. They actually understand some of those problems out there

much better than some people in government. If that is the case — and I

suspect it is — we must look like horses' fools. We have to start

talking about those problems and letting them we know we understand

some of those basic structural problems in our economy and are prepared

to deal with them.

I would like to deal with one more topic. I think we need an export

corporation. The major companies in this province do a very good job,

for the most part, of marketing their own goods, but little companies

and intermediate companies who want to market in the world often find

it difficult to do it on their own. They need an agency to do it for

them. I am not suggesting a government bureaucracy — maybe only some

seed money — but a corporation made up of representatives from those

different sectors in the economy.

MR. CHAIRMAN: Honourable member, the time under standing orders has elapsed. There is another mechanism, as you are aware.

MR. LEA: I'll just sit down for a second and be right back up, because I would like to finish that thought.

MRS. WALLACE: I was very interested in what my colleague from

Prince Rupert was saying, and I would certainly like him to continue. I

would be very pleased if he would be able to carry on.

MR. LEA: I was talking about an export corporation. I see an

export corporation put together that would enhance the availability of

markets for intermediate and small business, especially in

manufacturing and processing. I call it an export

[ Page 2953 ]

corporation for the lack of a better name. I want to describe its function.

By enhancing the availability of those world markets to our people,

what we can do is to search out in the world more areas for the

products that we make now. I think that's important. We're not just

going to have our economic restructuring happen overnight; in the

meantime we have to survive. So we have to have an export corporation

that will look for new markets for those things we already produce. The

export corporation I have in mind should also have another function: it

should have the expertise available to it that as it goes out into the

world, it looks for the possibility for new products that we can

produce here, even if it is just an idea. If we had an effective

research program in this province, that export corporation could go out

into the world and bring those ideas back and dovetail them into our

research program to see whether we couldn't develop it and develop a

new product for a new market. It could come back with ideas that could

possibly be put directly into one of our existing companies. This would

enhance our output of goods into the international marketplace. It

really is not being done with any amount of effort and not a lot of

capital.

Again, that would be another investment in our economic future.

Every time we look at investing money at this point, I think we have to

keep in mind that we should be investing that money as much as possible

into those areas that have the ability to pay back to us in the future

a great deal more than the investment we're putting in today. Education

is one of those areas that is very important. An export corporation is

very important, but it has to be met with an effective research program

when it arrives back here in British Columbia. Other nations are doing

it much more effectively. Their governments help their business

community a great deal more in searching out markets for those things

they already produce and looking for new products that we could

produce. We are lagging way behind in that area.

My biggest complaint about this minister, as we discuss his salary

votes, is that I feel like I'm dealing with a bookkeeper. I'd like to

feel I'm dealing with a bookkeeper and a person with an economic

vision. I'd like to see the government share with us and with the

people of this province their real concerns about our economic future

and not to gloss it over with simplistic phrases like "recovery will

come around through restraint." We have the statistics from the last

budget till now proving that if it's going to happen, it surely isn't

the most effective way to get economic recovery. I'd like to know which

economic theorist put it forward in the first place. I think the people

of this province need more vision from this government as to what the

problems are, and what some of the solutions are.

[Mr. Pelton in the chair.]

In closing, Mr. Chairman, I think the government oftentimes is

afraid to say, "We see these problems but we don't have any immediate

answers, and if we don't have immediate answers the people will see us

as not having all the answers and therefore will not look on us so

favourably politically." I don't believe that. I believe the people in

this province would be a lot happier if they just knew that we

understood the problems. If they felt we understood them, they would

have some patience with us, some time for us, and would say, "At least

they understand the problems and they're working on them, and we've got

a lot to offer." The people will say that.

It's not just government that has all the answers, not just big

business. There are people in this province who have a lot of ideas —

and a lot of good ideas. I don't feel the government is tapping in to

those people. They feel that politically they have to come up with all

the answers, and it's not possible. Nor is it desirable. An economic

vision is what I was looking for; all I found was a bookkeeper.

HON. MR. CURTIS: I'd like to respond to a couple of the

themes developed by the member for Prince Rupert. The hon. member spoke

about the views of the people of the province and, in his closing

remarks, about the fact that they have much to offer in the way of

ideas with respect to improving British Columbia's economic health. I

couldn't agree more that they do indeed have an interest in the future

of the province, and that they have a host of suggestions to offer.

That, Mr. Member, was the key motivation, among others, when I

undertook a consultative process — an overworked phrase, I will admit,

Mr. Chairman, but nonetheless something that has not been done that

much in the last 12 to 15 years in British Columbia. I refer to

meetings which I concluded just last week with a variety of groups

covering the whole spectrum of activity in the province. It's a process

which started approximately — and I can report on it with more

accuracy, if that is the member's wish — in the latter part of

November, and which continued, as I say, until just a few days ago:

some 18 groups ranging all the way from the Employers' Council of

British Columbia, the British Columbia Federation of Labour, the Mining

Association of British Columbia, the education coalition, the British

Columbia Chamber of Commerce. The list is a matter of public record. It

certainly can be retrieved by that member's research offices, or I can

provide it to him. I will be speaking about it in the course of the

next few weeks.

I was hopeful that we would, through that process.... These meetings

were not limited as to the amount of time we made available. We made

ourselves available. Most meetings occurred in Victoria; a couple

occurred in Vancouver. If the member checks with the organizations who

went to the trouble of bringing their views together for discussion by

themselves, and then of putting them in written form or in a

combination of written and verbal presentation, I think that they had

virtually unlimited time to identify problems in their particular areas

of activity, and to speak about those as well as about the provincial

economy as a whole. It was instructive for me. In the meetings one

senior official of the Ministry of Finance was with me at all times, in

order that the views expressed were not simply made to the political

side of government, but also to the officials who carry out the

policies which are developed by the government. The list really was

very comprehensive.

[3:45]

I intend, Mr. Chairman, to do much more of that in 1984. I will

start that again if the opportunity is appropriate. Depending on the

business of the House and other matters, I intend to start that in mid

to late summer, and to continue right through the fall; to make myself

available not only in Victoria and Vancouver but in other parts of the

province as well. We will hear again from the same groups, but I hope

we can expand the list and can expand the geographic representation of

those consultations. We did a great deal of listening and

[ Page 2954 ]

challenged some points which were offered. We have

summarized all of them. They have been of assistance in preparing the

1984-85 budget, but contrary to the role of bookkeeping which the

member has alluded to, I suggest that the views which have been

expressed, and which I have shared with my colleagues in the cabinet

and will share in greater detail through the course of the late winter

and spring, will indicate that some of those views will serve British

Columbia and British Columbians well for a number of years.

It is a process of open consultation, a process which I was pleased

to be able to undertake on behalf on the government — quite apart from

the contacts which are held by special groups with individual

ministers. One would expect the representatives of the IWA, as an

example, to meet with the Minister of Forests from time to time. One

would expect the Council of Forest Industries to meet with the Minister

of Forests from time to time. One would obviously expect, regardless of

the party which has been elected to government, that the B.C.

Federation of Agriculture would meet with the Minister of Agriculture.

We didn't intrude in those discussions with the specific

responsibilities of individual ministers. On the contrary, in the

Ministry of Finance we attempted to understand in greater detail and on

a more up-to-date basis the views of those organizations and

individuals — those interest sectors in the province — with respect to

policies which are developed by the Ministry of Finance and then

forwarded for consideration by the Premier, the executive council and

the government caucus.

A number of our discussions focused on the general tax burden in

British Columbia, and I think that we also learned a great deal in that

regard. We heard from most groups which came to us with respect to tax

policies which may have been appropriate five, ten and fifteen years

ago but which now have caused some difficulty for that particular

activity.

The member spoke about an export corporation. Well, Mr. Chairman,

looking to the member who raised it for his acknowledgement, and to you

for guidance, the question of an export corporation is a matter surely

that would be dealt with first, I would think, by the Minister of

Industry and Small Business Development (Hon. Mr. Phillips), who is

responsible for that particular area of activity, and then by the

Premier in the course of the budget debate or the debate on the

Premier's estimates. But rather than let the member think that I'm just

dismissing the suggestion, clearly this government has recently placed

great emphasis on more and more trade missions. The member himself said

that this is an open economy and more open than most. Well, it's one of

the most open economies. In my earlier interjection before he took his

place in the debate, I did not say we are absolutely helpless against

higher interest rates and the world economy but rather that those are

important factors when one is functioning in an open economy. I think

the member knows that I'm not identifying those as impossible obstacles

with respect to the health of the province but rather putting them in

perspective as significant factors in terms of the health of the

province. Trade missions were the subject of some criticism, but if I

were asked I would recommend to the Premier — and I think others would

as well — that this government should accelerate and expand its trade

missions, and indeed there is an indication already that that is

occurring.

We have to get out in the world and meet our very aggressive

competitors. We must get out and point out the advantages of doing

business with British Columbia firms and individuals. On the basis of

the success that I have seen in that area so far, it is clearly an

extremely important undertaking by the government of the province on

behalf of the people who live here and who want to come and work here.

I think one of the more attractive aspects of the trade missions

which I have examined, and the one in which I participated, is the

happy blending of private sector individuals and government

representatives. It is not just a question of ministers moving to one

particular region or country but rather taking along representatives of

those areas of economic activity in the province which can be expanded

and where we have a proven record and where we have expertise.

I indicated that I was not going to speak at length with respect to

an export corporation, but I did not want to remain silent on the

importance of the kind of international activity which this government

has undertaken and which I am certain will be continued and, indeed,

accelerated.

MR. STUPICH: Mr. Chairman, I'm at the point where I'm ready

to ask a couple of questions. The minister introduced his budget on

July 7 and I spoke on July 8, and on July 8 said that he was

overestimating his deficit by some $500 million to $600 million, which

of course at the time — July 8, 1983 — was an outrageous statement. It

took the credit union economic analysis dated August to catch up

somehow or other; I'm not suggesting they read what I had to say, but

perhaps they worked it out on their own. They came up with a figure of

some $500 million to $600 million, by coincidence. A columnist in the Vancouver Sun , Marjorie Nichols....

HON. MR. BENNETT: What are you going to do if they're wrong?

MR. STUPICH: Mr. Chairman, I'd love to answer that question,

but I really believe that the proper way is for the Premier to have the

intestinal fortitude to stand up on his feet and ask the question. Then

I'll answer it.

On August 19, 1983, Marjorie Nichols in the Sun , in a

headline column, said: "Books Say Things Not So Bad as Painted by

Socreds." And, again, it was being said that the deficit projected by

the minister was, as I had said on July 8, perhaps some $500 million to

$600 million overstated.

Then in December or January someone else got into the act —

Professor Laudadio. He produced figures, the minister responded to the

figures, the professor responded to the response, and Marjorie Nichols

got into the act again. None of them read my remarks. Nobody remembers

that I said it on July 8, except me. My colleagues don't remember.

HON. MR. CURTIS: That's your problem, Dave, not ours.

MR. STUPICH: I know. I have a problem; I appreciate that. But the minister may recall me saying that.

HON. MR. CURTIS: I recall.

HON. MR. BENNETT: When you're leader they'll listen.

MR. STUPICH: Well, you have some personal experience in that area, and you're better qualified than me to comment on that.

May I simply say, Mr. Chairman, that the Premier — who insists on interrupting

about something that has nothing at all

[ Page

2955 ]

to do with vote 34 — on October 8, eight days after the end of the second quarter,

produced a printed quarterly report. Now that's some feat of legerdemain.

It took some doing to get a printed report out. I see you frowning; actually,

it was the second quarterly report produced by this government, and it was produced,

I believe, within eight days.

Mr. Chairman, I don't want to make a big issue of that. I don't want

to lose the minister's attention. That's not the point of my story. The

point is that today is January 30. We are within, I would think, hours

or days or, perhaps, a week — certainly no more than a fortnight — of

being in a position to produce a third quarterly report. With that

quarterly report in our hands, we will be much better able to talk to

the minister about the minister's salary. If we were months away from

it — if we were dealing with the estimates, as we should be, in March,

April or May — I could say that it wouldn't make any sense to wait for

the report that's going to come out in January or February. But, Mr.

Chairman — whichever one of you is Chairman at the moment — it's

January 30. We could have that third quarterly report in a matter of

hours. Why is it that we're proceeding with the minister's vote today?

I'm inclined to move a motion that we delay discussion of this until we

have the third quarterly report, but I'd rather that the minister did

that. I'd rather the minister say he just hadn't thought of it, that it

just hadn't occurred to him that we're that close to having at our

fingertips much more information that would be useful to us in

discussing his salary vote, and let's put off discussion of this vote

until we have that information.

MRS. WALLACE: Maybe that's why they're having it now.

MR. STUPICH: The member for Cowichan-Malahat is getting ahead

of me. She's sitting behind me, but she's ahead of me. The obvious

answer would seem to be that if the minister is not prepared to ask

that we defer discussion of this until we get the quarterly report, he

has some reason for wanting to get this discussion completed before we

see that quarterly report.

There may be another reason. If there is another reason, I invite the minister to answer the question.

I've got one more question. I want to compliment the minister on his

activity in consulting different groups in the community in the

budgetary process. I honestly believe that is a forward step, and I

hope it truly will be consultation, and I hope it will grow and be

meaningful. I think that's good. I have a question that's somewhat

related. While saying that I think the minister did the right thing in

doing that, I am concerned about a newspaper report about what was

described as a budget leak. To the best of my knowledge, the minister

never commented upon the budget leak. It was a column by — again, I'm

going to the newspapers for my stories — Allen Garr in the Province : "Sizeable Budget Leak Generated." It would appear....

Interjection.

MR. STUPICH: The minister of lands, forests, etc., said that I must

have been reading. At least I can read; I don't have to hire people to read

to me. I can read, and I did read this story: "Sizeable Budget Leak Generated."

Now while I welcome budget consultation, and while even this, the minister may

say, is not something terribly important, at least I do want him to be invited

to comment upon it. Is it something that happened in error? Is it something

that happened because it was important to get the information out quickly and

it didn't really matter whether people knew in advance of the budget becoming

public knowledge that they were being laid off? That programs were being slashed?

That the government was going to be as draconian as it has proven to be in recent

months? It didn't really matter that this was found out ahead of time, and

therefore no harm was done? Was this a budget leak that was done intentionally

so that people would have a few extra hours' foreknowledge that their jobs

were going to be terminated? Just what was the explanation? Was this really

a budget leak? If so, was it a budget leak that the minister himself considers

important? If so, what steps did he take to inquire into it? As a result of

his inquiry, did he feel that the buck stopped at some level below that of his

own desk?

[4:00]

HON. MR. CURTIS: Frankly, Mr. Chairman, a budget leak, in the

traditional British Commonwealth parliamentary sense, would be a matter

which would cause me, without being requested, to tender my resignation

from this portfolio to the Premier. We did analyze the claims that were

made, with the notification to which the member has referred. We did

analyze that, and I found that it did not constitute a leak in the

usual sense.

Interjection.

HON. MR. CURTIS: The member for New Westminster (Mr. Cocke)

has just arrived and interjects. The "usual sense" would be, in my

view, with respect to a tax measure where some particular benefit might

be gained. As I say, in the classic, in the typical, in the

well-established British parliamentary tradition. In much the same way,

I think were I the federal Minister of Finance, Mr. Lalonde, I would

have found it incumbent upon me to resign after he was caught thumbing

through the budget document with television cameras peering over his

shoulder. We recall that from 1983.

I was confused by the theme developed by the member for Nanaimo (Mr.

Stupich) when he spoke about the quarterly report. Incidentally, I

think the member is a gentleman, an honourable member — we're all

honourable members — and he will accept that when the House Leader of

the government side says, "I would like your estimates to be dealt with

on such and such a day," then that happens. That is why I'm here today,

rather than this Thursday or Friday, or a week Wednesday, or whenever

it may be. I wish that my estimates could have been dealt with much

earlier than this, but that's not the case. I was confused by the

member's statement regarding the quarterly report, because I think he

is mistaken. The second quarterly report....

MR. STUPICH: It was 1976 or '77.

HON. MR. CURTIS: The member interjects: "1976 or '77." I

understood him to be referring to 1983, because the second quarter

closed on September 30, 1983, and the second quarterly report for 1983

was released on November 22. With a reporting process and with an

expenditure and revenue system as large and complex as the

third-largest provincial government in the country, Mr. Chairman, I

expect my officials to work miracles, but I don't expect them to

produce a quarterly report 8, 10 or 12 days following the close of that

quarter.

[ Page 2956 ]

The next quarterly report, for the quarter ending December 31, is

not yet in my hands, and is not likely to be for some little time. Here

we are on January 30, and I think the member would acknowledge, on

review, that we've usually had some five to six weeks intervening —

occasionally a little more, but I target generally for something just

under six weeks following the close of the quarter for the release of

the next quarterly report. So if it's a question of discussing my

estimates this week, Mr. Chairman, or next week, then I must indicate

to the committee that the quarterly report would not be available for

that particular discussion; not because I choose not to release it, but

because it would simply not be in final form.

I do apologize if I did not hear the member for Nanaimo indicate that it was 1976 or 1977 to which he was referring.

I also want to point out that the member for Prince Rupert (Mr.

Lea), who is not at the moment in his seat, spoke early in his remarks,

and I didn't respond at that time, with respect to the bank tax, or

taxing the banks, or, putting it another way, accessing revenues from

the activities undertaken by banks in British Columbia. Mr. Chairman,

it is a matter now in the statutes of British Columbia. It is also

correct to say that this government led the way in Canada in terms of

acquiring, for the people of British Columbia, a portion of that

corporation capital tax. That was put in place some two to three years

ago and has been followed by other provinces in the interval.

MR. STUPICH: Mr. Chairman, I tried to indicate to the

minister, when I was talking about that second quarterly report being

only seven days old when it was printed, that it wasn't the most recent

second quarterly report. At the time, of course, it was a feat of magic

to do it. It was associated with a political speech that the Premier

was making and it was handy to have it ready then. At least this

minister has never done that particular thing; it was done by a

previous Minister of Finance.

I still have some concern, Mr. Chairman, and I'm going to go over it

again. Were this the last minister to be dealt with then I could see

why we should be dealing today with the estimates of the Finance

minister, but there are some 14 ministers still to be dealt with. While

the Minister of Finance took direction from the House Leader — which I

would expect him to do — I wonder whether he suggested to the House

Leader: "Might it not be more appropriate, in view of the particular

nature of my work and my responsibility in the House, to delay my

estimates just in case the third quarterly report for the year is ready

in time for the discussion?" I wonder whether the minister had any

thought of that at all; whether he considered it or whether he raised

it with the House Leader.

To get back to the budget leak, I'm not sure I'm completely

satisfied with the minister's answer. He described how he views a

budget leak as being a want of confidence in the minister himself. I'm

going to read a little more from the story: "The news that went out

ahead of time included information to the effect that rent controls

would be removed." It would seem to me that there could very well be

people in the community who might stand to gain or to lose much with

even a few hours' notice that rent controls were to be removed. It

might well be that substantial deals were in the process of being made

— substantial in that they might affect substantial rent properties.

The knowledge of rent controls being leaked out — not publicly and not

necessarily known to both parties in a discussion, but simply leaked

out quietly and passed on by friends to friends — might very well have

put a lot of money in the pockets of some people or, conversely, taken

money out of the pockets of others.

I wonder whether the matter should have been treated quite as

lightly as the minister treated it. I did ask him how far up in his

ministry the matter went, and at what level within his ministry he felt

that the buck stopped. He said he didn't believe he had any

responsibility; if anyone gained or lost because of this advance

knowledge, then it was not his neck that was on the chopping block. He

didn't indicate whether or not anyone else's was. Perhaps the fact that

some sizeable amounts of money may very well have been made or lost

wasn't important. Perhaps no one was even chastised. Perhaps it was

brought to no one's attention. We don't really know. He said that there

was some investigation and it was simply considered not to be a matter

important enough to cause the minister himself to resign. As I recall,

that was his answer.

HON. MR. CURTIS: Mr. Chairman, in the event it had been

indicated that there had been any gain as a result of special knowledge

in matters associated with the budget, then the buck would clearly have

stopped with me as the minister, and not with an official. But that was

not the case. I do recall that it was raised immediately after the

budget of July 7. I recall that some concern was expressed, and one

columnist was referred to. But I think it falls more into the category

of an indication of government policy, rather than a specific leak on a

tax or a fiscal measure, which would directly impact upon the Ministry

of Finance and would give benefits to individuals who had early or

first knowledge prior to its being announced in this House.

MR. HOWARD: I listened earlier to the minister's comments

about trade missions going to other countries, indicating to those

other countries and to people in them that it's good business to do

business with B.C. That's a laudable perspective. It's a concept we've

advocated steadily and regularly for a long time: that one of the

responsibilities of government is to be of assistance in that regard,

to be a helpmate in that regard, and to do other things as well in

terms of the economy.

But if we're going to have ministers go to other countries simply to

assist in selling the products that we now produce, then we're likely

to continue for too long a time in the cast or mould that we have been

in, namely that of producing raw materials and of founding our economy

on our extensive natural resources, with the least amount of processing

of those resources — in other words, selling raw or near raw materials.

If that is the purpose and intent of these trade missions, I would

submit to you that it is rather short-sighted. I don't want to rehash

any of the events that were discussed during April and May a year ago,

but they were discussed, and some of us argued at that time the

necessity of attempting to develop trade with China in forest products.

We were castigated for making such a suggestion.

[4:15]

Interjection.

MR. HOWARD: I heard the words of castigation: "How ridiculous

can you be? There is no market over there." Yet I was pleased to hear

that shortly after the Legislature was laid off last October 21 the

Minister of Forests (Hon. Mr. Waterland) headed for China to deal with

trade matters. That's

[ Page 2957 ]

commendable and long overdue. But we still have to

face the fundamental fact that there is a requirement and obligation to

deal with our domestic economy as well and to make the same kind of

effort on the home front as is being made on the export front. If it is

the case that a certain international market may require — to mention

lumber for the sake of the argument — dimensions that we do not

normally produce for the North American market-standard 2-by-4, 2-by-6,

2-by-8 and so on — then I think we're obliged to work with industry to

gear up for that particular market. That's the sort of thing that

should be involved in trade missioning. It's the sort of thing that

should be involved at home. I heard the Minister of Forests on CFTK in

Terrace applaud the fact that a small lumber manufacturer in his own

constituency — I believe it was in Merritt — had acquired a market for

the sale of forest products in China.

I see the minister shaking his head. I don't know if he's shaking

his head about having said that or not, but I understood that's what

had occurred, that he thought that was okay. So did I. There should be

a great deal more of it, because the difficulty we're in is that the

lumber industry tends to gear itself up to the line of least

resistance. This is what the trade missionaries or whatever they're

going to be called should keep their eye on. For many years the line of

least resistance has been the sale of dimension lumber for the housing

market in the United States. We have virtually permitted all our eggs

to be put in that one basket.

So I say yes, go on those trade missions and talk about selling the

products that are here in B.C., but there is a companion obligation, I

submit, to develop and have known to the general public an industrial

strategy within the province that would be of help to industry in being

able to gear up to serve those particular markets for products other

than the ones which we produce right now. What is our economic activity

in B.C.? It is based largely on the extraction and processing of the

province's raw or natural resources. I mentioned that earlier. In the

primary industries the raw resource production is about 8 percent of

the gross domestic product. Manufacturing, exclusive of wood and paper

products, is about 10 percent — not a very large segment of the total.

The great bulk of our gross domestic product is taken up in the service

sector — in other words, in the segments of our industrial or economic

activity in the province that live off the primary resource industries

and what limited manufacturing we have. Business, personal services,

wholesale and retail trade, finance, insurance, real estate,

transportation, communications and even the public service are all

service industries living off the production of our primary and

processing industries.

It looks, from a very quick examination of this, that about 18 to 25

percent of the gross domestic product is wealth-producing and the other

75 percent lives off that. We can't export the other 75 percent. We

can't export the bureaucracies that exist in government. We can't

export the transportation system, the communications and storage and

finance and insurance. We can export some of the production that is

associated with a service industry in the computer sense. High

technology is a service industry that is connected with wealth

production and we can export some of that. But by and large we cannot.

We're not talking about exporting the service side of our activities;

we are talking about exporting goods produced in either their raw or

near-raw state or in their manufactured state.

I maintain that the trade missions that the minister is talking

about appear to be simply for the purpose of selling and exporting the

raw material, whether it be coal or the semi-finished product or

whether it be pulp. But they're not really doing adequate service to

this province and its future. We need to expand our activity at home in

dealing with and assisting in developing value-added activity in this

province. Value-added activity around a raw resource not only employs

people in that added activity but it creates additional wealth and adds

additional wealth to the regular or ordinary value of the raw material.

I'll give you an example in the copper industry. In B.C. we have at

various times produced, when the copper markets are good, about 20

percent of the copper that is produced in Canada. We have more than

sufficient copper-production capacity to support an additional smelter

in this province. But by and large, with one exception, and that's the

Afton Mines operation, we export and have exported for many, many

years, our copper production in its next-to-near-raw state. The mining

industry employs miners either to work underground or on open-pit

operations to mine the ore. It employs people in the second phase,

namely of running that ore through a concentrator, removing the

impurities and the unwanted items from it and coming up with a thing

they call copper concentrates. We then ship that out of the province,

largely to Japan, and it is in Japan that the people are employed in

the smelting, refining and the production process of producing copper

wire, copper tubing and other copper products, and we buy them back

again.

So while we may get one dollar for the copper concentrates that we

sell, we fork out four or five dollars for the same product when it

comes back again. The additional four or five dollars that we pay for

that product that was mined here and is a natural resource in British

Columbia goes to provide employment for people in other countries,

provides access by government to taxation in other countries, provides

wealth for service industries in other countries to live on that

value-added wealth production taking place in those other countries. On

that kind of gain we always come out on the short end. We are the

losers. The nation is the loser on the balance-of-payments question.

Depending on where the exchange rate is going — up or down — vis-à-vis

the other country's currency, we may lose or we may gain a little bit

on that side. But it is not sufficient to overcome the general deficit

position that we are in by exporting raw materials and buying back the

finished product.

I forget the author or I would certainly attribute it to that

person, but I read about an economist who likened the economy to a

sailing ship. He said that in our economic system it is capitalism

which provides the wind and the gusto for the sailing ship. It is the

capitalist system which is seeking the profit, seeking the return on

investment — return, incidentally, as quickly as it can; that's the way

it functions — but it is government that has to provide the rudder to

keep the ship from running aground. It is government that has to

provide the policy direction as to what serves the interests of the

whole ship. The whole ship is British Columbia. If it is going to be a

continuation of those policies that we have had in the past, which are

simply, as I understand them, that government's only purpose is to

create the climate within which "the capitalist system will feel

comfortable and will be able to function," then we're headed for

continuing disaster. Government, I maintain, cannot remain aloof from

being the captain or the rudder or the director of that particular ship

[ Page 2958 ]

as to where it is going, to keep it away from bad

waters. That, I think, is probably more important in the long run than

simply becoming a trade mission, a handmaiden to the producing capacity

that we already have in the province.

Much was made a while ago of Toyota establishing a manufacturing

plant in B.C. to process aluminum into wheels for its automobiles. It

is located in the lower mainland somewhere — Richmond or Delta or one

of those areas. As I understand it, Toyota will cast or make the wheels

here, will put them on a ship and send them over to Japan, where the

workers will put them on automobiles, and then they will ship the

automobiles back again. That was the original context. I see the

Premier shaking his head. I understand from that that he is negative

about what I'm saying — not surprising. If that's not the case, it is

neither here nor there, because it is not the major point that I want

to get to.

The major point I want to get to is that there was government

assistance to Toyota to establish the plant in this province. To what

extent that assistance exists, as between the federal and the

provincial government levels, I don't have the information readily

available. But government stepped into the picture, or was asked to

step into the picture, responded to something and said: "We'll help

out. We'll provide some kind of assistance." That's okay. That's a fair

enough concept to have. If it is necessary to use public funds.... The

Minister of Industry and Small Business Development (Hon. Mr. Phillips)

advocates this policy, incidentally: that, yes, it is necessary to use

public funds to provide subventions or subsidies or handouts or helping

money to industry. That's considered to be a matter of public policy. I

submit that it should be expanded and that there should be some

guidelines surrounding it. There should be some knowledge about how

this system functions, instead of doing it on a kind of ad hoc basis.

[4:30]

There should be connected with it, in my view, the perception that

if some industry wants to move in the direction of processing further

the products that we have here, then there should be some kind of

regional social responsibility involved. It should not just be a case

of the particular company itself saying, "We want to locate here in

location A," and government responding by saying: "Well, that's okay

with us. Here's some taxpayers' money to help you out." That's exactly

what happens now. There should be some conversation with groups like

that to say: "What about location B? That's an area that is seriously

disadvantaged. That's a area that has some positive aspects insofar as

the particular product is concerned." As long as there's a failure to

use that kind of activity.... We may have some economic activity as a

result of the trade mission, and I'm sure that if we do, various

ministers will be the first to tell us about it, including the Minister

of Finance. I'm not decrying that. But that's where we'll hear it from

first. He says "maybe." I say okay, that's fair game. We understand

that type of activity. But it won't be good enough in the long range to

serve the interests of the people of the province of British Columbia

if it is simply a trade mission which is going abroad in order to sell

the things we're producing now and nothing is happening domestically to

see where we are going within this province.

I dislike the phrase "hewers of wood and drawers of water." It is a

cliché that has been used so often that it's almost too commonplace to

use, but it's an understandable phrase. It may be an exaggerated phrase

in one sense or another when applied to particular industries and

relationships. Nonetheless, it is one that has such common usage that

if you don't use it people don't understand what you're talking about

in hose terms. If we don't do that, that's what we will continue to be.

We will continue to be responding or reacting to situations in other

parts of the world — responding to, reacting to, demands of the

corporate world about what the corporate world wants in order to serve

its position and its balance sheet. There needs to be the social

responsibility, the economic responsibility and the guidance and rudder

provided by government for the benefit of all of the province, not just

for the benefit of one particular economic part of it.

We can argue about trade commissions for a long time. We engaged in

them ourselves, I understand, when we were government. That was a good

thing to do. I think I'd like to leave that particular subject matter.

I was interested, seriously, in what the minister had to say about

that. I think the Minister of Industry and Small Business Development

has made something like a dozen or 15 trips on trade missions to other

countries over the time he has been the minister. Arising out of that

we see one item called northeast coal, but he's continually on these.

As I said, the Minister of Forests (Hon. Mr. Waterland) was in China,

and what the result of that will be.... The Minister of Agriculture

(Hon. Mr. Schroeder) was in different places in Europe dealing with

agricultural products. All well and good. The basic thing is results

and responses and some indication of what may flow from this, but if

it's that operation in isolation from what's going on at home and what

needs to go on at home, it's too short-range. It's not broad enough in

its perspective of what we really need in this province.

MR. PASSARELL: I have four short questions for the minister.

They're constituency problems basically. The first one is the sales tax

for the community of Atlin. One of the problems, Mr. Minister, is that

the three or four small businesses in the community of Atlin are being

hurt because people are going 60 miles north up into the Yukon and

buying the same products without having to pay the sales tax. The small

businesses in the community of Atlin are finding it difficult to

compete if people are going to come into the community, say, to the

Atlin General Store and have to pay a sales tax on an item when they

can drive 60 miles up into the Yukon Territory and buy the same product

cheaper, without the sales tax. I know it's a difficult problem,

because if you make an exception for the community of Atlin, then,

particularly along the B.C.-Alberta border, people would be saying:

"Well, if you did it for Atlin, why can't we have it here?" It's

something I wish the minister could look at. It's an isolated problem.

There are no other communities around where there is competition.

People are going up into the Yukon. Something could be worked out there.

The second problem is the sales tax on building supplies. It's

difficult in a restraint program, but if we could cut back the sales

tax on it, by maybe 50 percent, it would encourage small business and

individuals working on their homes and putting money through the system

by going out and developing their homes.

The third issue is that many residents in the far north build log

homes. Right now some jurisdictions in the United States, particularly

Vermont, are taking away any kind of tax on log homes — property tax,

sales tax. I read an

article just last month about log-home building in

the United States where there is no property tax; by building with logs

you

[ Page 2959 ]

receive benefits. Forest industries in this

province are a major business. It might be worthwhile to look into some

kind of revenue-generating by encouraging people to build with logs and

get a tax benefit.

Interjection.

MR. PASSARELL: Vermont, in particular.

The third issue compared with the log-home building is the property

tax, which you are responsible for. I know it's a dilemma in which an

individual improves his home, if he builds with logs, and finds his

assessment going up. It might be beneficial for northern rural

residents to put some kind of a limit — maybe a $5,000 limit — on which

you could build on with logs and not have your property tax go up

because of working with logs. It could work out to be very beneficial

for the province, and in particular for our forest industry.

The last issue is another constituency issue, the northern tax

benefit program, which the federal government has embarked upon to

dismantle. In the last few years the minister and I have talked about

this. This is basically a federal program in which northern residents

receive tax-free benefits on tool allowances, bushing flights and so

on. The federal government is dismantling this program, and I would

like some input by the provincial minister into his federal counterpart

to continue this program, which is very beneficial to northern

residents and northern workers, who are going to be hit very hard once

the federal government dismantles it.

Those are the four constituency problems which I raise to the minister, and I would appreciate his comments.

HON. MR. CURTIS: The sales tax question in Atlin was alluded

to by the member. Similarity would be found in the northeast and

southeast of the province. While he didn't say it, he would certainly

admit that it is also to be found to the east in Alberta. I have had

conversations with more than one minister responsible for taxation in

Saskatchewan under the former and subsequent administrations, and the

problem is, I suppose, to be found in Lloydminister, but not

exclusively. I have gone to the northeastern

section of the province

and to the southeast — specifically to the northeast — to discuss this

issue with people who have an easy hour's drive to communities such as

Grande Prairie. I can't offer any assurance to the member with respect

to Atlin into the Yukon, nor can I offer any assurance to a member —

the Minister of Industry and Small Business Development (Hon. Mr.

Phillips), as an example, representing South Peace — with respect to

Dawson Creek into Alberta. We have discussed it. It's not a question of

saying: "No, we don't want to examine it." One can have a corridor. One

can draw another boundary, but where does that boundary lie? The member

knows that I, along with a number of other ministers, have been in

Atlin, and I will come up again to discuss it with some of the

residents of that community, as indeed I must in Dawson Creek,

Chetwynd, Cranbrook, Sparwood, Elkford and even Fernie.

Sales tax on building supplies. I would have difficulty commenting

on whether that is such a good idea that I would like to act on it or

that it is an idea that I am not prepared to act on — obviously one of

these days we will move to a budget for the new fiscal year — except to

say that others before him have indicated their wish that the sales tax

be removed from a variety of building supplies. The member will know

that there are a number of exemptions already in place, particularly

with respect to heat loss, weatherproofing and so on. I would like the

information from the state of Vermont on log homes. That frankly is the

first time I have heard of this particular measure. If the member would

send that along, I would be grateful for it. The associated comment,

some allowance by the assessment agencies or assessment authority with

respect to homes built from logs: I would think that we would have

similar requests for homes built by other materials that are native to

B.C. Still, I could discuss that with the member at any particular time

and would happily receive what he might have in writing to offer on

that.

With respect to the northern tax benefit program and its imminent

dismantling, I shall, at his request and with anything that he wants to

provide in an underlining way, take that to the Minister of Finance for

Canada or, if more appropriate, ask my officials to take it to their

counterparts.

MR. MITCHELL: I was kind of at a loss sitting here looking at

all these Social Credit members sitting over there and not

participating in what I consider is the most important debate that we

have today, which is the Minister of Finance's estimates. Maybe they

are at a loss for words and have no program that they wish to provide

or any suggestions to make to the minister.

I was also very disappointed that the Minister of Finance in his

opening remarks did not bring to this House a fair speech on where

British Columbia is going to go. We had a budget last year — and I say

it was last year, even though we are still in the same fiscal year —

that laid out certain benefits that were going to take place within

that budget. It was going to give some direction and improve the

economics of British Columbia. Because we have gone to this late date,

I was quite convinced, Mr. Chairman, that the minister was going to be

able to show this House what that budget and what his ministry have

given to British Columbia.

[4:45]

I also know from reading the papers that many of the various

ministers have taken sojourns throughout the world. I felt that because

the taxpayers have been paying for these trips, the Minister of Finance

especially should have brought back to this House in his opening

remarks a report on some of the businesses he has contacted and what

type of potential new industry these trips have produced.

I think it's important, Mr. Chairman, that we MLAs in this House

accept the responsibility that each one of us accepted upon our

election, and that is to pave some path that will lead this province

into a future of industrialization to produce secondary jobs for youth

that are coming along and for those who have been, in one way or

another, displaced from other occupations. We must give serious

consideration to where this province is going to go and what new

industry this province can support.

As one who grew up in this province, the same as did the minister,

we have watched job after job leave the greater Victoria area, leave

Vancouver Island — not only leave and be resettled in some other

locality, but they have gone out of business. Now there is a change in

technology that every one of us here accepts. Every one of us accepts

that these changes will come, but we must be prepared to look at where

British Columbia is going. We must look at utilizing the excess of

power that this province is producing, and we must look seriously at

using that power to produce aluminum or some other secondary industry.

We cannot just sit back on a band-

[ Page 2960 ]

aid program of using that power and selling it to

our neighbours to the south. I was really disappointed that the

minister didn't bring to this House, to the members or to the citizens

of British Columbia his government's ideas and his government's hopes.

I say the most important thing that this province and each one of us as

MLAs must look at is what jobs we are going to produce for our youth

and what jobs we are going to produce for the people who want to make

this province their home.

It bothers me that maybe the minister is not concerned about the

future of B.C. Maybe he is not concerned about the types of jobs that

are available and what jobs that we in the school boards and we as

parents can direct our children and our grandchildren into. I say that

because I thought the minister might also have brought some

confirmation, one way or another, of this rumour that is running around

the Legislature and government service that he will be leaving that

particular position and will have another job with B.C. Hydro. I

believe the Minister of Finance (Hon. Mr. Curtis), in all fairness to

him, will fit right into B.C. Hydro if it means continuing to add more

substantial debt to this province. During the four years that he has

had the honour of holding that particular position, the debt of this

province has skyrocketed like never before. If you read the financial

statements that have come out of B.C. Hydro, the debt added by that

particular organization as a millstone for the people of this province

has been as horrendous as the other debts we have gone into.

I am not one, and I never have been one, who believes we should

borrow our way to prosperity, because you do not. I know that you, Mr.

Chairman, would never, in your own home, incur the debt for your

children or grandchildren that this province has done without

establishing a more secure job situation that the public can have some

hope in. I feel the minister failed in his address to give us that

direction, just as he failed to confirm or deny the rumour that he will

be leaving that particular position and going to B.C. Hydro. Maybe he

will be getting a promotion that pays a little more and that he can add

his pension on to. I'm not sure how that goes. I think the minister

should shed some light on these rumours, because I for one, and I know

the rest of the members as well, would like to get some direction on

where we are heading.

I would also like to bring up one constituency problem. I hope you

will not rule me out of order, Mr. Chairman. When I tried to bring it

up where I believe it should have been brought up — that is, in the

discussion of Bill 22 — the Speaker ruled me out of order, and I

received assurance from the minister that I could bring it up under his

estimates. I am convinced in my own mind, from studying all the

parliamentary guidelines, that I'll be out of order. I was ruled out of

order by the Speaker, and I have to give some credit to him. It was at

8:30 in the morning after an all-night session, and I feel that my

explanation did not get through to his wise and thoughtful beliefs. He

thought I was out of order, and to get him off the hook I believe the

minister said I could bring it up under his own estimates.

Interjection.

MR. MITCHELL: Are you going to make a point of order and bring in closure?

MR. CHAIRMAN: To the estimates, please.

MR. MITCHELL: Yes, Mr. Chairman, I will get right back to