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FRIDAY, FEBRUARY 6, 1970

The House met at 2 p.m.

BUDGET DEBATE

MR. SPEAKER: The Honourable the Premier.

HON. W.A.C. BENNETT: Mr. Speaker, I know I express the best wishes of all members of the House when we say we're glad to see that you're back today, and we hope completely recovered from the flu, but we did miss you.

MR. SPEAKER: The Honourable Member for Burnaby Edmonds.

MR. G.S. DOWDING (Burnaby-Edmonds): Mr. Speaker, I'm afraid the Honourable the Premier beat me to welcoming you back after your brief illness. While you were gone some things happened that I hope won't happen again. There was a resolution on the Order Paper that dealt with the question of the financing of B.C. Hydro and its rates and its capital and we found, in your absence, we couldn't debate this during the Throne Speech proceedings. For the sake of the Premier, the Honourable the Minister of Finance, and the rest of the members of the House, I hope we can talk about it, he today, and the rest of us during the continuing debate.

MR. SPEAKER: The Honourable Member for Vancouver Centre.

MR. H.P. CAPOZZI (1st-Vancouver Centre): Mr. Speaker, it is with a great deal of pleasure that I extend to the members, and particularly today to the Premier, a happy New Year, because it is the New Year or happy New Year in the Chinese community, and this year, as you all may or may not know, is the Year of the Dog. Now, under that, it is one of the most auspicious years in the Chinese calendar, and I think that today it is a great omen for both the Budget and for the people of British Columbia in 1970, because it is associated with benevolence and good fortune, and it is also a time of comparative tranquility and tinged with humanitarianism and fellowship.

I note that there is something for all parties in the Year of the Dog, and for those opposite it is also a year in which there will be less dissidence and rebellion in the months to come, and conciliatory efforts should bring positive results. I am sure that all of you, in acknowledging not only the greeting of happy New Year but the tremendous contribution made by the Chinese Community, will welcome in the Year of the Dog.

MR. SPEAKER: The Honourable the Second Member for Vancouver–Point Grey.

MR. G. B. GARDOM (2nd-Vancouver–Point Grey): Mr. Speaker, apropos the first member from Vancouver Centre's remarks of welcome to the Chinese New Year, from the bilingual side of the House, Gung Hay Fat Choy Son Hay.

MR. SPEAKER: I'm not sure just what the honourable member said, but I'm sure all members join with me in hoping it was parliamentary.

The Honourable the Premier and Minister of Finance.

HON. W.A.C. BENNETT: Mr. Speaker, I wish to move, seconded by the Honourable Minister of Labour and Attorney-General (Hon. L.R. Peterson), that the Public Accounts for the Fiscal Year 1968-69 be referred to the Select Standing Committee on Public Accounts.

MR. SPEAKER: You've heard the motion, are you ready for the question? All those in favour say Aye. Contrary minded No. The motion is carried.

MR. BENNETT: Mr. Speaker, I am pleased to file the Report of the Comptroller-General pursuant to the provisions of the Audit Act, chapter 22, R.S.B.C. 1960, the Interim Financial Statements for the first nine months of this Fiscal Year ending December 31st.

MR. SPEAKER: The Honourable the Minister of Finance presents Financial Statements.

MR. BENNETT: Mr. Speaker, it is also a pleasure for me to present the first Message from His Honour the Lieutenant-Governor at this Session.

MR. SPEAKER: The Lieutenant-Governor transmits herewith Estimates of sums required for the service of the Province for the fiscal year ending March 31st, 1971; Schedule A, Sums required by Her Majesty to make good certain sums expended for the public service for the period ended March 31st, 1969, and to indemnify the several officers and persons for making such expenditure; and recommends the same to the Legislative Assembly. At Government House, dated February 5th, 1970.

BUDGET ADDRESS

MR. BENNETT: MT. Speaker, I'm sorry to have to move this motion so soon after you've taken your seat as Speaker once more.

I move, seconded by the Honourable Attorney-General, that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

Mr. Speaker, speaking on this motion that I was very happy to move, I wish to say that the strong, renewed mandate the voters of British Columbia granted this Social Credit Government in the election last August indicated once again the wide acceptance by the citizens of the Province of this Administration's fiscal and economic development policies and an endorsement for their continuation. Over the 17 1/2 years since the formation of this Government in 1952, fiscal policies have been strict adherence to pay-as-you-go budgeting, no direct debt, low and equitable tax rates, and adequate cash reserves to safeguard levels of government services. Economic development policies have been to encourage development of our natural resources to the advantage of the citizens of the Province, create a strong transportation network, ensure an abundant supply of electric power, a strong transportation network, ensure an abundant supply of electric power, and generally provide a climate for the growth of our free-enterprise economic system. The great growth in our productive wealth and the outstanding improvement in the Province's financial resources during the 17 successive years it has been my privilege to introduce this Government's budgets to the Legislature are a clear indication of the effectiveness of these policies. Further, our strong current financial position is a particular credit to the Province in the light of existing extreme National and international fiscal and monetary difficulties.

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Mr. Speaker, I would like to emphasize that because of these policies and performance the Government of British Columbia today enjoys the highest credit rating in Canada from the two foremost international credit rating agencies — Moody's Investors Service, Incorporated and Standard and Poors' Corporation of New York.

Mr. Speaker, I am happy to say that I am optimistic over the outlook for the Province as we enter the decade of the seventies. Because of the planning undertaken by this Government through the fifties and sixties decades the Province is in an advantageous position, financially and economically, for still greater growth.

The Government's first policy in this new decade is for people — to provide continuing improvement in government services through increased social and economic benefits. To make sure increased funds are available for services to people in education, health, hospital and medical care, social services, and urban growth, we must have continued economic growth, Mr. Speaker, particularly in the northern resource areas of the Province. It is this Government's intention to further open up British Columbia's northland by improving road, rail, and power-line communications. To this end the British Columbia Government-owned Pacific Great Eastern Railway is moving ahead on its northern extensions from Fort St. John to Fort Nelson and from Fort St. James to Dease Lake. At the start of this decade we have 675 miles of railway under construction, more than anywhere else in the free world. More mature economies generally have their railway transportation systems established, but British Columbia is a young, developing economy and has great need to extend its transportation network to create the jobs, economic base, and wealth for our rapidly growing population. This policy has proven itself and given great dividends in the exciting sixties, the decade just closed. The developments of the sixties carried into the seventies will make British Columbia's future secure and our people more prosperous.

Rampant inflation continues to be the greatest threat to the free world economies of today. This Administration's fiscal policies have always been non-inflationary, under completely balanced budgets for both current and capital expenditures. Also, in view of the seriousness of the current financial situation, this Government has refrained from competing for capital funds in the world money markets since September, 1967, and we are the only government in Canada that has done that. But this has been a great challenge for the Province because, with our population growing at a rate over double that of the rest of Canada, with a large number of citizens coming from other provinces, we have required a strong expanding economy to provide the,necessary jobs. However, this Government will cooperate with the National Government in the fight against inflation and solicits the active support of all business, labour, and consumers in the Province. Notwithstanding our greater wealth-creating potential, unless the rate of inflation is brought within more reasonable limits every citizen of British Columbia will lose and mostly the workers of British Columbia will lose. Wage and price increases above productivity will quickly erode workers' pensions and set aside the advantage of savings.

In this 1970 budget, the comparisons will not start from 1952, Mr. Speaker, but they will be from the start of the 1960 decade, into the middle of that decade, and in comparison with the first year of this new decade to show British Columbia continuing to expand on all fronts in services to people.

The dynamic growth of the Province of British Columbia during the last decade of our first century in the Confederation of Canada has been unparalleled in this Nation. And the major part of this growth has been financed from our own resources with little or no financial assistance from the Government of Canada, despite the significant contribution our economic development makes to the National income.

A transportation network is essential for economic development. In the earlier settled and developed areas of Canada the Federal Government financially assisted in the development of their transportation network. But in British Columbia the last two decades have been important in our development. Extensions of the Pacific Great Eastern Railway into our northern areas are being financed by the people of British Columbia, as are our massive hydro-electric developments. In contrast, in our neighbour State of Washington, the massive Grand Coulee Dam was not only built during a depression period when wages and interest rates were low, but also was financed and subsidized by the United States Federal Government under the economic development policy of former President Roosevelt. Major improvements and extensions to our highway network have been financed almost entirely from Provincial Government revenues, as have the construction and operation of our extensive coastal ferry fleet. The National tariff policies and railway freight rates have also worked to the disadvantage of British Columbia in relation to the rest of Canada, and particularly the central regions of our Nation.

This Government believes, as have many previous British Columbia Administrations, of all political parties, that the Federal Government should recognize the importance of this Province's development for the generation of National income which allows the Government of Canada to assist the less wealthy areas of our Nation. I would like to report to honourable members that I submitted proposals to the Prime Minister of Canada last fall, once again requesting Federal Government financial participation in the construction and operation of the Pacific Great Eastern Railway and construction of the Trans-Canada Highway Second Narrows Bridge. We are asking no more consideration on these outstanding issues than those given all other regions of Canada.

Since my budget of last year there have been three Prime Ministerial meetings of the Constitutional Conference. Honourable members and the public of British Columbia have been able to view the proceedings of two of these meetings through National television coverage. The study and evaluation of our Constitutional needs will take time and British Columbia will continue to actively participate in the deliberations and discussions.

British Columbia's position on the Canadian Constitution is premised upon Canada as one Nation from the Pacific to the Atlantic, But, in our view, the strength of the Nation lies in the individual citizen. It is for this reason British Columbia endorses the principle of a guaranteed annual income and a National standard minimum wage which will give all Canadians a sense of equality and encouragement in developing the greatness that is Canada. We believe the guaranteed annual income should replace all support payments on behalf of people and the income equalization payments paid to certain Provincial Governments. The significance of these latter payments are indicated in the following list of payments being made by the Federal Government in the current fiscal year, and you will find them listed in the printed copy of this Address.

Quebec, $343,069,000; Nova Scotia, $90,028,000;

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Newfoundland, $85,996,000; New Brunswick, $83,093,000; Manitoba, $42,147,000; Prince Edward Island, which has as many people as Victoria, $16,857,000; Saskatchewan, $7,117,000. I notice by the press just yesterday that they are getting a further adjustment of ten or twelve million dollars this year, as well. Ontario, of course, receives Nil; Alberta, Nil; British Columbia, Nil.

These total payments, going to these special Provinces, in one year, and they could go every year, amount to $668,307,000. I would point out, as I have at the Federal Conferences, Mr. Speaker, in advocating the minimum income for Canadians, that these payments to governments of these Provinces have not alleviated the regional disparities in income and standard of living at all, the money is not getting to people. This Government in British Columbia, and I know we speak for the people of this Province, want to help poor people everywhere in Canada, and if there are more poor people in certain areas in Canada, then there will be a larger percentage of those people get this Federal Government help from our taxes, and we welcome that, and we want our help to go direct to people and not to Provincial Governments.

I would point out, just as an aside, that at some of these Federal-Provincial Conferences we go to, British Columbia has one representative and these Provinces that get all these grants have dozens of representatives there — dozens of them at all these Conferences.

Mr. Speaker, the Federal Minister of Finance presented the Government of Canada tax reform proposals last November. The Government of British Columbia is presently studying their significance in relation to the further development of our young economy and effect upon our own tax structure and fiscal needs. The proposed higher personal exemption allowance is something I have been encouraging, at every Conference, but it should be introduced now and not delayed until 1971. A flat-rate capital-gains tax similar to the United States tax appears to us less complicated than the method proposed. In any event a capital-gains tax should not be applied to discourage home-ownership in any way.

The Government of Canada, in its fight against inflation, has elected to cut back on essential staff and public works. However, I have pointed out to the Federal Government that their committing the country to record high interest rates is one of the chief causes of inflation. The higher cost for the Federal Government is in the expense of its borrowings for both new funds and refunding issues as Government of Canada debt is issued almost entirely without sinking fund retirement provisions. For example, the Government of Canada has two billion dollars worth of maturing debt during the present year 1970 alone which in the absence of Federal Government sinking funds, must be refunded at substantially higher interest rates. This is in stark contrast to the operations of the Government of British Columbia which has no debt and thus no refunding or annual debt servicing costs.

An encouraging sign in the monetary field is the international acceptance of Special Drawing Rights as a means of increasing liquidity for the settlement of international trade accounts. I am pleased to see this measure of stability in the world monetary markets in view of British Columbia's dependence on world export markets.

Sustained high levels of population growth and economic expansion in the Province reflect in increases of almost 11 per cent in electric sales and over 13 per cent in gas sales by British Columbia Hydro and Power Authority in the year 1969, and I want to take this opportunity of thanking and congratulating the directors of Hydro on the wonderful job they have done for the people of this Province. British Columbia has the highest per capita use of electricity of all the provinces and the largest annual percentage increase in use. The increase in electric demand required a continuation of the significant expansion of the Authority's electric generation, transmission, and distribution facilities, which has taken place during this past decade of the 60's. I will recommend to this Legislature that the Authority's borrowing authorization be increased by $250,000,000. Mr. Speaker, during the current tight-money, high interest-rate situation the Authority will be required to use this authorization with the utmost caution.

At the Gordon M. Shrum Generating Station on the Peace River, generating units four and five became operational last year which, with the first three units placed in service in 1968, brings this station to one-half its ultimate capacity of 2,300,000 kilowatts. These additions raised the Authority's total generating capacity at the year-end to in excess of 3,500,000 kilowatts, an increase of almost 14 per cent over the previous year. Equipment contracts have been let for three of the five remaining units to be installed at this station in the Peace River.

On the Columbia River Project, Mica Dam, the last of the three Treaty Projects in British Columbia, is scheduled for completion by April, 1973. During 1969, work on the dam proceeded on schedule.

The Arrow Project was named Hugh Keenleyside Dam in honour of the former co-chairman of the British Columbia Hydro and Power Authority at a dedication ceremony on June 9, 1969.

The second 500-kilovolt transmission-line from the Gordon M. Shrum Generating Station was completed to Kelly Lake near Clinton during 1969 and is scheduled to be extended to the lower mainland by 1971. The two lines comprising this high-capacity north-south transmission system are advantageously located for serving many areas of the Province; for example, the lateral being extended westward to Prince Rupert with a link to Kitimat. The increased electric need of the developing coal industry in the East Kootenay area will be initially met by a 230-kilovolt transmission-line linked to a United States transmission network. Ultimately, with the installation of generating capacity at Mica Dam in the 70's, 500-kilovolt transmission facilities will be extended to augment the supply of power to the Southern Interior of the Province.

The installation in 1969 of three direct-current submarine cables from the lower mainland to Vancouver Island, and additional converter facilities, has added 312,000 kilowatts of capacity to serve the growing load on Vancouver Island. Plans are under way to strengthen the transmission-line system serving Vancouver Island north of the terminal at Duncan through the construction of a 230-kilovolt line. Extensions were carried out last year in the lower mainland transmission network to meet the increasing demand for electricity in this very highly industrialized region of our Province. Distribution facilities were, correspondingly, extended throughout the Authority's service area, particularly assisted in the more remote, less-populated regions through the Government's increased rural electrification subsidy.

The Pacific Great Eastern Railway experienced another year of exciting accomplishments in 1969. Operating revenues and the volume of freight handled reached record levels as the railway continued to push new trackage further into Northern British Columbia. Last year, car loadings and freight

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carried increased significantly from 1968, and over the last ten years the increases have been substantially greater than that experienced by the National railways. An 8.4 per cent increase in 1969 operating revenues contributed to a net profit, after all expenses, including all depreciation, of $764,131. This is a tremendous record for a developing railroad. I remember well the members saying, and the editorial writers writing, that the Government would be lucky if they could have a developing railroad and not have a loss of about 5 to 10 million dollars a year, but this is operating in the black, Mr. Speaker, and I am so happy to report that situation. Major increases in grain, wood chip, pulp, paper, and asbestos shipments contributed significantly to the higher revenues.

Industrial expansion and diversification throughout the railway's service area continue to add impetus to its growth and give further justification for the extensions into our northern areas. Work is proceeding on the 250-mile line to Fort Nelson extension from Fort St. John, getting close to our northern boundary. The extension to Takla Lake is operational to Fort St. James and the remainder of the mileage is scheduled for completion by the end of this year. Plans are under way to extend this line further into the north-west part of the Province, to Dease Lake. Accordingly, I will recommend a $50,000,000 increase in the railway's borrowing authority to this Legislature.

The large and growing volume of freight shipments required the acquisition by the railway in 1969 of four giant 3,000-horsepower locomotives, ten insulated box cars, and one hundred 70-ton box cars. The recent completion of the new repair and maintenance centre at Squamish will permit more efficient manufacture and repair of car equipment.

Mr. Speaker, in the Budget Address we deal with three fiscal years, and sometimes it is difficult for members to follow them as the Speech is being read. The first year that we deal with is the year already closed at the end of March, 1969.

The early availability last year of the British Columbia Financial and Economic Review, the Abridged Public Accounts of the Province for the fiscal year ended March 31, 1969, and the annual reports of the Crown corporations, and the tabling of the detailed Public Accounts on the first day of this Legislative Session have provided honourable members and the public with information on the Provincial Government and Crown corporations' operations during their last completed fiscal year.

The results of this Government's sound fiscal policies show up clearly in the Provincial statement of financial condition at March 31, 1969. Significant increases are recorded in the value of fixed assets, total assets, and excess of assets over liabilities and reserves.

Fixed Provincial Government assets at March 31, 1969, totalled $1,150,000,000 an increase of $73,000,000 from the previous year, and almost 2 1/2 times the March 31, 1960, in one decade. The total at that time was $473,000,000, the fiscal year in which the debt of the Province was completely offset by sinking-fund investments. It is important to remember, Mr. Speaker, that the marked increase in the value of fixed assets of the Government of British Columbia over this period which, incidentally, are wholly paid for, and the only place in Canada where the Finance Minister can say that, and these do not include the Province's large investment in capital for education, hospital, and social services facilities, the shared, capital works programmes of local governments, or the great increase in the fixed assets of our Provincial Crown corporations., Total Provincial Government assets rose from $1,778,000,000 at March 31, 1968, to $1,967,000,000 at March 31, 1969. The Provincial surplus, or excess of assets over liabilities and reserves, reached $1,452,700,000 at March 31, 1969, an increase of $123,840,000 during the one fiscal year.

Revenue in the 12 months ended March 31, 1969, totalled $963,000,000, up $153,000,000 from the previous year. Expenditures, including all capital expenditures, were $924,900,000 or 18.5 per cent higher than the $780,800,000 of expenditures in the fiscal year of the previous year, 1968.

The excess of revenue over expenditure in the 12 months ended March 31, 1969, was $38,831,000. After taking into account the statutory appropriations from the revenue surplus authorized at the 1969 Legislative Session, which amounted to $130,000,000. The Province's cumulative cash reserve on April 1, 1969, was $50,000,000.

You will see in Table I in the printed Address that in 1952 the total of all the Fixed Assets owned by the Provincial Government was $188,000,000, and the net debt was $222,000,000. At the end of last December — December 31, 1969 — there was no net debt and the value of the Fixed Assets was not $188,000,000 but $1,231,152,000.

And that is the report of the fiscal year that is past, Mr. Speaker.

Strong world demand for our productive output and continued economic development in the Province resulted in a substantial rate of economic growth throughout 1969, especially in the areas of investment, employment, income, and housing.

The estimated population of British Columbia at year-end was 2,108,000. Our annual rate of population growth is more than double the rate for the rest of Canada. Seventy-one per cent of the increase was a result of net immigration into British Columbia, mostly from other Provinces in Canada, and is the highest rate in all Canada.

The Provincial labour force expanded to 836,000 in 1969, or 39,000 more than in 1968. Employment in British Columbia during the last calendar year increased 5 per cent, or over three times the rate of increase in the rest of Canada.

Private and public investment in 1969 was an estimated $2.9 billion, up over 11 per cent from the previous year. Construction activity has been particularly strong in the forest and mining industries, trade, finance, commercial services, housing, and by Provincial Government departments and institutions.

Residential housing starts in the Province in 1969 were up by 22 per cent over the previous year, despite high interest rates and rising costs. Residential construction values are expected to reach $557,000,000 in 1969, over $48,000,000 more than in 1968, and this is residential construction alone.

The selling value of the Province's factory shipments increased 10 per cent from 1968 to a total of $3.9 billion.

The forest industry, the leading sector of our economy, expanded vigorously in 1969. Paper production increased over 11 per cent, pulp production 10 per cent, and timber scaled 8 per cent. Forest product exports through British Columbia ports in the first ten months of 1969 were up 11 per cent over the same period in 1968. Over $600,000,000 worth of forest industry capital projects are under construction or planned at the present time in our Province, Mr. Speaker.

The value of mineral production soared to an all-time high of $460,000,000 last year, over 13 per cent more than in 1968. Metals accounted for $292,000,000 of the total, and

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63 per cent of the increase. The value of crude oil and natural-gas production rose to $88,000,000, up 18 per cent from the previous year. The huge coal shipments to Japan beginning this year will increase coal production greatly. Continued rapid growth of the mining industry is indicated as millions of dollars are being spent on mining exploration and hundreds of millions of dollars on mining plant construction.

A record number of tourists spent some $375,000,000 in the Province in 1969, an increase of 8 per cent over the previous year.

Retail sales were up 10 per cent in 1969 over 1968. While consumer prices rose 4.6 per cent over 1968 for Canada as a whole, the 1969 consumer price index for Vancouver City showed a comparative gain of 3.6 per cent. The value of cheques cashed in British Columbia went from $46,639,000 in 1968 to $58,765,000 in 1969, a 26 per cent increase in the one year. Vancouver Stock Exchange trading almost doubled in value in the one year to $1,147,7 35,000.

The significant economic growth of 1969 speaks for itself, and the expectations for 1970 are based on this spectacular background of development. Mr. Speaker, barring severe disruptions in labour and management relations and world trading conditions, the outlook for the Provincial economy in 1970 is indeed favourable. Scheduled increases in shipments of coal and copper to Japan are expected to give an enormous boost to mining and other industries in the Province. With indications of capital investment holding at the strong 1969 level, especially in the primary resources sector, and employment and business activity growing steadily, the coming year should establish another peak in British Columbia prosperity and progress.

Mr. Speaker, I now wish to deal with the present fiscal year, for the nine months that started last April 1st and ended on December 31, 1969. The interim financial statements of the Comptroller-General covering the Government of British Columbia's operations during the period April 1 to December 31, 1969, which I will table today, confirms again the excellent financial health of the Province and reports accrued revenues of $847,458,000 and accrued current operating and all capital expenditures of $796,000,000.

In relation to the time-month period of 1968, revenue accruals are up $158,470,000 or 23 per cent and expenditure accruals $146,700,000 or 22.6 per cent. Expenditure increases occur mainly — and this is for the nine month period only — in: Education, $37,648,000; hospital insurance services, $13,481,000; highways, $31,248,000; medical care, $12,530,000; social assistance, $11,095,000; grants to municipalities, $3,704,000; and home-owner grants, up $8,015,000.

I now turn, Mr. Speaker, to have a look ahead at the next fiscal year, the year that will start on April 1st of this year.

The budget submitted by the Government for the consideration of this House proposes a total expenditure on both current operating and all capital projects of the Provincial Government of $1,165,460,000 during the 12 month period of the next fiscal year. This represents an, increase in one year of $141,388,000 and is our assessment of the needs of our citizens for the Province of British Columbia for services in a period of restraint. As in every year since this Government took office, this is a fully balanced budget. No tax increases are proposed.

An annual increase of nearly 14 per cent in a government budget, financed completely within the limits of a provincial tax structure which, Mr. Speaker, by the way is the lowest in Canada, is a clear indication of the strength of the British Columbia economy, notwithstanding the current problems of inflation, tight-money, and record high interest rates. The additional moneys are to be devoted, in part, to further economic development of the Province to provide the base for more jobs for our labour force and increased income for workers, business, and Government, which will keep us moving ahead. But the greater portion of this increase, it will be noted, will be used to expand services and benefits to our citizens.

Major increases occur in the Departments of Education, Health and Hospital Insurance, Highways, Provincial Secretary which is mainly the Over-all Medical Services, and Rehabilitation and Social Improvement for our people. Mr. Speaker, this is a citizens' non-inflationary budget with no tax increases; a dividend of progressive, sound government, Mr. Speaker.

In the printed copy of the Budget Address you will find Table No. 2, which will give for each Department the expenditures of the present fiscal year and the new estimates for the new fiscal year, and showing the increases, how they make up this total of over $141,000,000.

Our rapidly expanding population and accelerated growth in the secondary and post-secondary levels of our education system maintain Department of Education as the largest single item of expenditure in the Provincial budget. The Province proposes to spend $362,461,000 on all phases of education, a one-year increase of $41,890,000. Major increases occur in grants to school districts, up $17,000,000; Operating grants to Provincial universities, up $12,000,000; and regional colleges, technical and vocational schools, up $3,250,000. Legislation will be introduced today increasing the maximum Provincial home-owner grant from $150 to $160, effective in the next fiscal year, which has the effect of offsetting a further $5,000,000 in local school-tax levies upon resident home-owners or a total of $55,000,000 in local school-tax credits.

The Department of Health Services and Hospital Insurance is estimated to spend $228,949,000, or $30,952,000 more this coming year to carry out its programmes for the benefit of all citizens. Payments to hospitals for patient care will require an additional amount in one year of $25,000,000.

Honourable Members will notice, in the estimates tabled in the House today, the change in name of the Department of Social Welfare to the Department of Rehabilitation and Social Improvement. This new designation is more reflective of this Government's philosophy of assisting those of our population who haven't got the advantages of other people.

Mr. Speaker, the erosion of the purchasing power of those British Columbia citizens on fixed incomes through inflation is of particular concern to this Administration at this time, in view of the current high rate of inflation. This Government's fiscal policies have been to ease the burden of inflation and support of government on the individual citizen through completely balanced budgets with no borrowing, low tax rates, and encouragement of strong economic development. At the same time, we have adjusted for the effects caused by inflation outside of our control by increasing benefits to those in need. We already pay the highest rates for those in need in British Columbia, in all Canada, Mr. Speaker, but they will be increased. Honourable members will recall that last August the maximum supplementary benefit to the blind and disabled was doubled from $30 to $60 per month. The current high cost of living points out the necessity for an increase in other allowance rates. Effective April 1, 1970, the

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supplementary allowance payment to old age pensioners will be increased to ensure these senior citizens a monthly income up to a maximum of $150. Further, the social allowance rates will be increased by $5 for every head of household and also $5 for each dependant. To cover the increased costs of providing nursing and boarding-home rates by $15 per month to a maximum of $135, also on April 1, 1970. The total additional cost of these increased allowances is estimated for the coming year to be $8,750,000. Also, an increase of $2 in the municipal per capita grant, from $28 to $30, will be recommended to cover the municipalities share of the increased cost. Mr. Speaker, it will amount to twice the increased cost, for these increases to the municipalities. Total expenditures of the Department of Rehabilitation and Social Improvement next year will be $108,113,000, an increase of $20,341,000 in the one year. That shows, Mr. Speaker, that this Social Credit Government really cares.

To expand our Province, and to open it up, appropriations of the Department of Highways are increased $12,703,000 to $150,668,000 to allow for expansions of the highway construction programme and of our coastal ferries operations.

Department of the Provincial Secretary expenditures provide $10,000,000 more this next year for the British Columbia Over-all Medical Services Plan. Last year, when we had the amount of $50,000,000 in, some of the members said it was a fictitious amount and wouldn't be spent. We had to have an additional warrant for $2,000,000, and this year we require an estimated $10,000,000 more; and $1,650,000 for the 1971 Centennial Celebrations commemorating British Columbia's entry into the Confederation of Canada on July 20, 1871, which made Canada, in truth, a nation from shore to shore.

Expenditures of the Department of Lands, Forests, and Water Resources are up $10,371,000 in fiscal year 1970/71 to $56,192,000. Establishment of the Cariboo Forest District, with headquarters at Williams Lake, and increased commitment in the clearance of the Mica Pondage raises Forest Service expenditures by an additional $5,004,000. Projects under the Canada-British Columbia Joint Development Act require $1,700,000 more, and preparation of the Libby Reservoir in British Columbia $2,500,000 more this coming year in the Water Resources Service.

The decrease of $2,425,000 in expenditures of the Department of Labour reflects the final payment by the Provincial Government in the current year of the grant for $10,000,000 to increase Workmen's Compensation pensions.

The Province of British Columbia has an excellent staff administering the people's business. The budget provides $7,000,000 for salary increases this next year to be made according to the recommendation of the Civil Service Commission. This is the eighth successive year salaries of Provincial civil servants have been increased and is in addition to annual salary increments and also in addition to the promotions. Over the past 18 years the average Civil Service salary has increased 141.7 per cent while the Consumer Price Index has increased 45.2 per cent.

The Provincial New-home Building Assistance grant of $1,000, or alternative $5,000 maximum second mortgage at a considerably lower interest rate than National Housing Act first mortgages, has proven a real encouragement to citizens desiring to build and own their homes. However, tight-money conditions and even higher mortgage interest rates continue to persist. In this temporary period of most unfavourable financial conditions, your Government desires to assist, even further, persons to obtain their own home. In the case of persons who have been renting in the Province for at least two years, and that means renting any accommodation, not necessarily a whole home, the Government proposes an outright grant of $500 or a second mortgage of up to $2,500 to purchase an existing home. As this is a measure of assistance during these particularly trying financial times, it will be effective for a one-year period only, but will be reviewed from time to time.

This will take a considerable amount of capital, Mr. Speaker, because — not like building new homes — there are hundreds of thousands of existing homes right now. We hope that many owners of homes will sell the homes to their tenants — not only the tenant who lives there, because that would tie a person in to dealing with his landlord — but other tenants as well. Because they will be getting a better price than the home originally cost them, because of inflation, we hope they will sell them at reasonable prices. We hope that they will take a first mortgage at lower than present market rates, and the Provincial Government then making the $2,500 second mortgage available for this group, it could be the down payment. So they could continue to pay rent and own their own home.

I say, Mr. Speaker, this will take a lot of capital, so approval will be sought for $25,000,000 appropriation from current-year revenues to expand the Provincial Home Acquisition Grant Fund.

To continue the Provincial Government- owned Pacific Great Eastern Railway's construction push into our resource rich northern regions, the Government will submit for approval the investment of an additional $35,000,000 in the share capital of the railway company, also from current-year revenues.

The Government deems these budgetary proposals essential to meet the growth needs of this, the fastest-growing Province in Canada. Despite the record level of expenditure the budget is non-inflationary, by being completely balanced by revenue income within the limits of existing low tax rates, and no borrowings. This record of achievement is highly regarded by the world financial leaders and envied by many capitals.

I earlier indicated by optimistic outlook for the Province as we enter the decade of the 70's. Certainly the buoyant economic conditions within the Province and a favourable outlook for our export markets indicates a Provincial Government revenue yield that will balance our expenditures in the next fiscal year without an increase in any tax rates. However, our dependence upon world markets for the sale of the greater portion of our productive wealth and our lack of control of the economic conditions in these markets suggests, and certainly realism indicates, we should not anticipate a continued annual growth in Provincial Government revenues at the extraordinary rates of recent years. Mr. Speaker, this situation could change for the reasons which I have previously mentioned — loss of markets, unsettled management and labour conditions — but whatever the outcome the policy of this Government will continue to be balanced budgets and the accumulation of a reasonable cash surplus to meet such an exigency. Because if this situation comes, and hurts jobs, this Government will not hesitate to move even stronger than we have moved to date I will introduce into the House today an amendment to the Succession Duty Act. This legislation proposes higher exemptions on the valuation of survivors' pensions from $100 a month to $250, and also a larger exemption on the

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family home, which will be completely exempt, because this Government believes that the basis of our good life is the family, and this amendment will make the family home completely exempt from succession duties. These changes over and above the other exemptions that are already in effect, will materially reduce the succession duties on our citizens.

Total Provincial Government estimated revenues are $1,166,177,000 for the 12 months ending March 31, 1971, an increase of $141,695,000 over this year's estimates.

Table 3 in the printed Address will show the comparisons with the last year's estimates and this year's estimates, and the increases.

The significance of this substantial increase in British Columbia Government revenues is revealed in a comparison of Provincial tax rates. In addition to having the lowest tax rates in Canada, British Columbia has one of the best comprehensive medical care plans at subsidized, low premiums. The continued difficulty of the other provinces and the Federal Government to maintain and contain their expenditures within the limits of government revenues, even at their higher tax rates, offers further evidence of the effectiveness of this Social Credit Government's fiscal and economic development policies. The other provinces have been steadily raising taxes and indications are that some provinces will be raising their taxes still higher in this coming year.

In Table 4 in the printed Budget Address, you will see the comparison of all the main provincial tax fields with every Province in Canada, showing that British Columbia has the lowest tax rate in this nation.

While the Government proposes to continue an advance on all fronts in services to people during this new decade, added emphasis will be placed on environmental control. British Columbia is abundantly blessed with a wealth of natural resources to support a high standard of living, and a magnificent natural environment for enjoyable living and recreation. The protection of our environment, therefore, is of great importance both for this and future generations. During the past decade, Government emphasis was to draw to the attention of business, the individual citizen, and municipal governments the threat of the various types of pollution and the responsibility of each and every one to respect and contribute to a high standard of environmental quality. But, Mr. Speaker, the emphasis in the 1970's is to be on direct action and the Administration has already moved in this direction. In the budget two years ago additional per capita grants were made available to municipal governments for pollution control. At the last Session, statutory approval was given to subsidize the capital costs of municipal sewage-treatment plants to the extent of 75 per cent of the excess annual cost over a basic 2-mill levy in the local area. Also, at that Session, private industry was encouraged to install pollution-abatement equipment by completely exempting from property taxation treatment plants and equipment installed in areas under Provincial Government jurisdiction. Industry was already receiving accelerated depreciation allowance on treatment plants and equipment under the British Columbia Income Tax Act. We but have to look to more mature, more densely populated areas on this continent to see the results of uncontrolled pollution. Everyone in the Province should recognize his responsibility and accept the challenge to see it is not repeated in our beautiful British Columbia, and I pledge that this Government in the 70's will act, Mr. Speaker.

Now I wish, in a few minutes, to make a budgetary analysis. A particular service of the Provincial Government, for example, education, involves appropriations in more than one department. It is necessary, therefore, to examine at this point the funds provided the various Government services throughout all departments.

The foremost policy of this Social Credit Government is the improvement and advancement of Government programmes in the fields of education, health, social services, and Provincial development. And in this $1,165,460,000 budget, emphasis continues to be placed in these areas of activity. Provincial development provides the means by which Government services may be increased without the penalty of increased tax rates.

The next year the Government proposes to appropriate 88 per cent of the total budget for human betterment and Provincial development services. In dollar terms, Provincial Government expenditures on these services — and these are alarming figures, Mr. Speaker, but wonderful figures — in these fields alone of human betterment and Provincial development in one decade. In 1960, $288,000,000; in the middle of the decade, $447,000,000; and in the first year of the new decade, at the end of the ten-year period — not $288,000,000, not $447,000,000, but $1,027,000,000 in the next fiscal year.

In addition to these appropriations of Government revenues the Province also allocates investment funds for human betterment and Provincial development capital projects. For example, since January, 1969, a total of $229,393,000 has been allocated for capital funds; $165,032,000 to the British Columbia Hydro and Power Authority for essential power development in addition to approximately $50,000,000 in cash flow from the Authority's own operations used for capital projects, $44,441,000 to the school districts for essential school construction, and $20,000,000 to regional hospital districts for essential hospital construction. And I want to say, Mr. Speaker, that while we are going to give priority to those areas that need school construction, that there is no freeze on school construction in British Columbia and there will be none.

Table 5 of the printed copy of the Address will show these figures and the comparisons of these three 5-year periods, Mr. Speaker.

The educational qualification of the British Columbia labour force, I am pleased to say, is the highest in Canada. Appropriately, therefore, the Government proposes to spend $367,380,000 or 31 per cent of next year's budget on education. As to these percentages of the budget, Mr. Speaker, members should keep in mind, in comparing them to other Provinces, not only that we include new services all the time like Medicare and so forth in the gross, so that the percentage keeps going up as well as the gross included for these other services. Also must be borne in mind that our percentages are on the total budget, capital as well as operating, where other Provinces only treat their budget as operating and keep the capital separate. So watch these figures, Mr. Speaker, when making comparisons.

Table no. 6 in the printed Address will show the increases on education over these five-year periods.

Although all segments of the education system continue to grow, the burgeoning demand for regional colleges has been a feature of this past year. While the student growth rate has been slowing at the elementary-school level, the need for expanded services at the secondary and post-secondary

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stages is expected to continue well into the 1970's.

The elementary and secondary public-school system will absorb 64 per cent, or $235,390,000, of total education expenditures in the fiscal year ending March 31, 1971. Provincial Government grants to school districts will amount to $158,000,000, an increase of $17,000,000 over the current year. Along with the proposed $10 increase this year in the maximum Provincial Government home-owner grant, the cost of public school education will continue to have a minimal impact upon the resident home-owner. In 1969, the average home-owner's contribution through property taxes to the total cost of public school education in the Province was only 8.5 per cent.

Paced by record grants for operating and capital purposes of $92,000,000 to the three public universities, Provincial Government expenditures on post-secondary education this next year will aggregate $131,990,000, or 36 per cent, of the total Provincial education expenditure. Requirements of the expanding regional colleges and vocational schools also contribute to the rise in post-secondary expenditures.

Full-time enrolment at the six operating regional colleges and the British Columbia Institute of Technology stood at 6,600 in September, 1969, and another 5,700 students were engaged in part-time programmes. Enrolment at the three public universities rose by 2,000 students to a total of 31,500 in September, 1969.

Enrolment at the nine Provincial vocational schools has also grown rapidly as a result of expanded adult occupational training and apprentice and pre-apprentice training courses. A record number of apprentices are currently enrolled in 75 designated trades, and nearly 2,000 graduated last year. Night-school enrolment throughout the Province continues to increase.

Student aid has reflected the post-secondary growth pattern and the appropriation for Provincial Government scholarships and bursaries has been increased by another $400,000 over the current year to $3,300,000. The total in 1965 was $670,000. Almost 14,000 scholarship and bursary awards have been made in the current school-year.

The comprehensive health and social services programmes of the Provincial Government required $416,000,000, or 36 per cent, of the total budget for the next fiscal year. $416,000,000 next year, only $115,000,000 in 1960, and only $170,000,000 in 1965.

Table 7 in the printed Address will give the full details.

The continued pressure of providing hospital facilities for our rapidly growing population and accelerating costs of hospital care raise total outlays for payments to hospitals next year to a record $176,796,000. When hospital insurance started, not many years ago, it only took $14,000,000. This amount is 3 1/2 times the $48,994,000 paid to hospitals as late as 1960, and represents an expenditure of over $83 on behalf of every resident in the Province, as compared to $31 in 1960. $83 on each resident, not on each family. Just imagine, if we continued the premium system, what the premiums would be today. Hospital construction currently underway throughout the Province is valued at approximately $40,000,000 and will provide 909 acute-care beds and 420 extended-care beds. Projects nearing the construction stage are estimated to cost an additional $25,500,000. The Government's policy of progressive patient care provides hospital care for the whole range of patients' needs from low-cost basic bed units to intensive-care units, and I am glad that the Minister and his Department is giving further study on this very important question of hospital care.

Appropriations this coming year for the Province's comprehensive social services programmes total over $122,000,000, as compared to an expenditure of $67,000,000 in 1965 and $43,526,000 in 1960.

Ninety-eight per cent of our residents are now covered by the Province of British Columbia comprehensive medical care plan at modest premium rates. With the operation of the Medical Services Commission firmly established, a degree of specialization has been attained. The Medical Services Association and C.U. and C. Health Services Society carriers are principally group plans. The British Columbia Medical Plan has, from its beginning, received individual memberships and, therefore, has the bulk of the low-income, subsidized group covered under the plan. Total Government cost of the medical care programme including the Federal contribution for the coming year will amount to $60,000,000.

In keeping with the Department of Mental Health's policy of developing regional and community based programmes throughout the Province, six new mental health centres were opened this past year at Cloverdale, Courtenay, Cranbrook, Haney, Kamloops, and New Westminster. The 170-bed Eric Martin Institute of Psychiatry in Victoria was also completed in 1969. The British Columbia Youth Development Centre for severely emotionally disturbed children in Burnaby is being phased into operation. Completion of the Glendale Hospital, a 300-bed extended care unit in Victoria, is expected by the end of this year. During 1969, more than 16,000 patients were cared for in Mental Health Branch facilities. An operating and capital outlay of $39,562,000 will be made for mental health services next year, compared to $13,000,000 in 1960 and $18,000,000 in 1965.

To promote and maintain our high health standards requires a total of $17,364,000 in the coming year, compared to $9,787,000 spent on public health services in 1960. The enforcement of sanitary and air and water quality standards by the Health and Pollution Control Branches of the Provincial Government Service is safeguarding the quality of our environment, and these activities will be intensified as I have indicated earlier in this Address. Other health services programmes are constantly being expanded to meet the needs of our growing Province.

To maintain and expand the high levels of Provincial Government services to the citizens of the Province within the limits of a completely balanced budget at low tax rates is a constant challenge, requiring the Government to be the vanguard in opening up new areas of the Province in anticipation of private development to follow. This next year an estimated $243,645,000 of the British Columbia budget will be devoted to Provincial development. Table 8 in the printed Address will give all the details of the Departments involved.

The Province's numerous ferry routes and multiple highways system will require an expenditure of $159,000,000 next year, compared to $79,000,000 in 1960. Moreover, Provincial grants to municipalities of $27,200,000 for construction and improvement of municipal streets and roads through per capita grants bring the total appropriation for highways and ferries to $187,037,000 this coming year. The expenditure provides for the completion this year of British Columbia's newest Trans-Provincial Highway, the 673-mile Yellowhead Route No. 16 from Prince Rupert to the Alberta boundary and the Yellowhead Route No. 5, from Kamloops to Tete Jaune Cache. Along with current work on the Alberni-Tofino Highway, the Queen Charlotte Islands, Cariboo Highway, the Lougheed Highway, and the Patricia

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Bay Highway, surveys are now being carried out for a connecting link between Kelsey Bay and the northern part of Vancouver Island.

Continued expansion in the British Columbia forest products industry requires increased Provincial Government investment in the development and safeguarding of our valued forest resources. This next year a total of $32,001,000 will be expended on all phases of Government forest services. Of particular significance for the Province's future economic development is the planting of 35,000,000 seedlings by the Provincial Forest Service and industry during the current planting season.

An estimated $24,000,000 is needed for Provincial lands, settlement, and agricultural projects this coming year, while only $3,800,000 was required at the start of the 1960 decade.

The appropriation for tourism, trade, and industrial development will total $5,147,000 for next year as compared to $841,000 in the beginning of the decade of the 60's. Included in this expenditure is British Columbia's first annual Festival of Sports, to be held between May 16th and June 1st and featuring international as well as interprovincial competition. And I ask all the members, and all the people in the Province, to support this annual Festival of Sports to encourage our youth in this Province. Promotion of other off-season travel attractions will ensure another record year for tourism similar to 1969 when over 10,000,000 tourists spent in excess of $375,000,000. The inspiring British Columbia Pavilion at this year's World's Fair in Osaka, Japan, stands as a lofty 160-foot-high testimony to British Columbia's greatly expanded role in world trade, and especially in Pacific Rim trade.

British Columbia's population growth-rate at double the rest of Canada places great pressure upon our local governments to provide essential local services. This is most significant considering that over 80 per cent of the population resides in the 139 incorporated municipalities in the Province. Provincial Government policy over a number of years now has recognized the rapidly growing needs of the local governments, and generous financial assistance has been provided.

The extent of the Government of British Columbia assistance to municipalities, and particularly the major urban centres, is revealed in the latest available publication of the Federal Government Bureau of Statistics on municipal government finance. And I want to emphasize that this is a Federal Government publication, not one of ours. This is a 1968 Federal survey. In 1969 it would show British Columbia's treatment of municipalities would be even better.

In this comparison, which will be in the printed Budget Speech, you have the total revenues of these main centres in Canada and then the percentage of the Provincial Governments' contribution to the total revenue of the municipalities. Montreal: The Federal Government said those figures were not available. In Halifax, the Provincial Government's share to Greater Halifax only amounted to 16 per cent. Toronto, 27 per cent. Winnipeg, 13 per cent. Regina (Liberal), 11 per cent. Calgary (Social Credit), 17 1/2 per cent. But in Greater Vancouver, 36 per cent, Mr. Speaker, 36 per cent.

Mr. Speaker, the municipalities and the school boards naturally keep all their own revenue, but they also receive from the Provincial Government what we collect, $653,000,000 or $307 per capita, compared to $150 per capita in 1965, and $104 per capita in 1960. In other words, they keep all their own revenue and get 56 per cent of the Provincial Government's revenue, 56 per cent, the highest in this nation, Mr. Speaker. As a further indirect, but very important at this particular time, aid to municipal governments, the Province has refrained from entering the world money markets for now well over two years. Nor does the Province borrow from any bank or other financial institution. This means that total credit facilities are available to local governments without competition from the Province.

Therefore, Mr. Speaker, I would especially say to our good friends, the great bankers in our Province, that they make representations to their Head Offices, because in all other parts of Canada the Provincial Government draws heavily from their resources, but not in British Columbia. So we would ask our bankers to be especially free with their credit at favourable rates to municipalities, not only on short-term but on a percentage of long-term bonds as well. Because the municipalities in British Columbia are number one credit. Our municipalities are in the best financial shape of municipalities in any part of this nation.

AN HON. MEMBER: Are you prepared to guarantee them at the bank?

HON. W.A.C. BENNETT (Minister of Finance): The bank doesn't need it; their credit is so good.

Mr. Speaker, who not only guarantees, but raises all the capital for all the schools and the hospitals in this Province? When they pass a by-law they say they raise the money, but they don't raise a single nickel, the Government of British Columbia raises all the money. My friend says, and he rightly says "The people's Government."

This Table 9 is a very extensive Table, comparing 1960, 1965, and 1971 and deals with municipalities and the benefits they receive from the Provincial Government in the comparison with those years, and I ask you to especially study these in great detail.

Mr. Speaker, I am glad to come to the conclusion of this Address.

Mr. Speaker, the careful allocation of this record one billion one hundred and sixty-five million dollar budget will lay the foundation for continued orderly growth of the Province in the great decade of the 70's.

The outstanding achievements of this Social Credit Administration have been made possible by the strict adherence to fundamental Social Credit policies of fiscal and economic policies introduced at the beginning by this Government in 1952. In budget after budget I have detailed the dividends to the citizens of the Province from these dynamic policies. With a clear, strong mandate from the people of the Province to continue, we can look forward to greater achievements and greater dividends in the great decade of the 70's.

British Columbia holds a unique position among the world's economies as a young, dynamic-growth area and its management in the light of unsettled world conditions requires the cooperation of all segments of government, business, labour, and consumer.

Mr. Speaker, with this cooperation I have every confidence the dynamism of the 60's will be overshadowed by the results of the Social Credit Government in the great decade of the 70's. (applause)

On the motion of Mr. Barrett, the debate was adjourned to the next sitting of the House.

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The Hon. W.A.C. Bennett presented to Mr. Speaker nine Messages from His Honour the Lieutenant-Governor.

The following Bills were introduced, read a first time, and Ordered to be placed on the Orders of the Day for second reading at the next sitting after today:-

Bill (No, 3) Initiated An Act to Amend the Municipal Treatment Plant Assistance Act,

Bill (No. 4) Initiated An Act to Amend the Provincial New-home Building Assistance Act,

Bill (No. 5) Initiated An Act to Amend the Municipalities Aid Act,

Bill (No. 6) Initiated An Act to Amend the Provincial Home-owner Grant Act,

Bill (No. 7) Initiated An Act Respecting the Purchase of Unissued Shares of the Capital Stock of the Pacific Great Eastern Railway Company,

Bill (No. 8) Initiated An Act to Amend the Pacific Great Eastern Construction Loan Act, 1954,

Bill (No. 9) Initiated An Act to Amend the British Columbia Hydro and Power Authority Act, 1964,

Bill (No. 10) Initiated An Act to Amend the Income Tax Act, 1962,

Bill (No. 11) Initiated An Act to Amend the Succession Duty Act.

The House adjourned at 4 p.m.