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FRIDAY, FEBRUARY 5, 1971

The House met at 2:00 p.m.

BUDGET DEBATE

MR. SPEAKER: The Honourable the Minister of Finance.

HON. W.A.C. BENNETT (South Okanagan): Mr. Speaker, I wish to move, seconded by the Honourable the Attorney-General, that the Public Accounts for the fiscal year 1969-1970 be referred to the Select Standing Committee on Public Accounts.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker….

MR. SPEAKER: The motion is not debatable.

MR. McGEER: I know it has been the long followed practice of this House, that this motion, which is a referral to a Select Standing Committee, be introduced without notice of motion. Nevertheless, it is an instruction to the Select Standing Committee on Public Accounts because this is the only instruction, by tradition, which they have received over the years….

MR. SPEAKER: Order.

MR. McGEER: …and if this motion is to be introduced, without notice, then this should be a motion which can be amended, without notice. I wish to amend this motion by adding…

MR. SPEAKER: Order, please, order.

MR. McGEER: "… including details of the financial statement of the boards commissioned and Government enterprises."

MR. SPEAKER: The honourable Member has contempt of this Chair. It won't be tolerated long. Be seated. One moment, please.

AN HON. MEMBER: You can't make an amendment?

MR. SPEAKER: No, there is no amendment to this motion. The Member, by his own admission, has stated that for many years the long established policy of this House is that, under this and former administrations, indeed, dating back to 1947, this motion has been introduced, without notice, to refer the Public Accounts to the Public Accounts Committee.

The only matter that can be debated, if, indeed, it could be debated at all, is whether or not these accounts should go to the Committee. It is unthinkable, after a hundred years of parliamentary practice, that accounts would not go for surveillance by the committee. Under these circumstances, the matter is not debatable and I rule there is no further discussion and that the matter raised is out of order.

AN HON. MEMBER: Question.

MR. SPEAKER: I think I have explained myself well. Would the Member be seated? There is no ruling to be made, no ruling to challenge. It is long established custom.

MR. G.H. DOWDING (Burnaby-Edmonds): I just want to remind you, once more, you are the eyes and ears of this Assembly but you speak through this Assembly. If this Assembly wants to change the rules, it is up to you to decide the matter and we can then challenge a ruling.

MR. SPEAKER: One moment, please. If the Assembly wants to change the rules of this Assembly it can be done by putting notice on the Order Paper, not by standing impertinently in one's place and arguing with the Chair (interruption).

MR. DOWDING: Section 642, page 8, says that any instructions to a committee can, at any time, be altered by this House.

MR. SPEAKER: Would the honourable Member please be seated? The Member, in his opening remarks, stated that it had been a long established practice of this House that the motion had been introduced to the Assembly, without notice. It has indeed been the practice for the past 25 years, since 1947. If I left any inference that I was referring to the honourable Member from Burnaby-Edmonds in connection with impertinence I regret it, because it was not my intention. But I do insist that this matter, because of the tremendous amount of tradition that is attached to it because of the tremendous amount of problems that were faced by parliamentarian after parliamentarian over hundreds of years of tradition, we dare not, I do not think, interfere with the financial procedures of the Parliaments of the Commonwealth (interruption). What is the point of privilege?

MR. D. BARRETT (Coquitlam): The point of privilege, Mr. Speaker, is that, I'm sure, that in the heat of exchange of words, I'm sure that the word, "impertinence," was not applied to any Member and I would suggest that it be stricken from the records.

The motion was agreed to.

The Hon. W.A.C. Bennett (Minister of Finance) presented the Report of the Comptroller-General pursuant to the provisions of the Audit Act, chapter 22, R.S.B.C. 1960, for the nine months of the fiscal year ending December 31, 1970.

The Hon. W.A.C. Bennett presented to Mr. Speaker a Message from His Honour the Lieutenant-Governor, enclosing the Estimates.

MR. BENNETT: I move, seconded by the Honourable the Attorney-General that the said message, and the Estimates accompanying the same, be referred to the Committee of Supply.

The motion was agreed to.

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

Speaking to this motion, Mr. Speaker, I consider it an honour to be moving the traditional Canadian parliamentary system motion of supply in this year 1971 — the year in

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which we are celebrating the close of British Columbia's first hundred years and the entry into our second century of membership in the Canadian Confederation.

In the early days of the young Nation, the Federal Government recognized the importance of British Columbia's strategic position and rich resources to the evolving country and encouraged the Province to become the sixth Province in the Confederation that assured a Nation, for the first time, "from sea to sea." But the first hundred years have not been without hardship and frustration for the Province, particularly because of a remoteness from our National Capital. However, events of the past two decades have rapidly altered British Colombia’s position in Confederation and it will play an increasing role in the Canadian economy in our second century (applause).

National and international economic conditions, aggravated by management-labour differences within important sectors of our industry, restrained the usual buoyancy of the British Columbia's economy this past year. Contrary policies of the Federal Government, which concurrently support high interest rates, inflation and also high unemployment have compounded the situation for British Columbia.

Through these annual Budget Speeches, briefs to the Federal-Provincial Conferences and discussions with Canadian Government and banking officials, I have continually stressed the danger of high interest rates, tight money and deficit Federal Government financing upon the continued prosperity of the Canadian economy and, particularly, the threat to increased unemployment. All regions of Canada are now reaping the harvest from these Federal policies.

The problem is of a greater magnitude for British Columbia, because of the continued large inflow of jobseekers into the Province from other Provinces. Over the past year, British Columbia's population growth rate was over two and a half times and our labour force growth rate over three times the rates for the rest of Canada. In the light of these conditions, the British Columbia Government has had to review its position in relation to the economy. It is our view that bold new policies are required to stimulate the economy and provide jobs for our people.

I want to say here, Mr. Speaker, I wish the Member from Cowichan-Malahat wouldn't interfere at this time. I wish to say, Mr. Speaker, that it is the Government's policy…

MR R.M. STRACHAN (Cowichan-Malahat): I would like a point of order, Mr. Speaker.

MR. SPEAKER: State the point of order.

MR. STRACHAN: Before he moved the present motion, the Minister of Finance tabled with this House, a Message from his Honour the Lieutenant-Governor that is now the property of this House. As a Member of this House, I have asked to have access to that document. It has been refused me and, right now, I am asking you, Mr. Speaker, to make available to me, as a Member of this House, the document that belongs to this House (interruption).

MR. SPEAKER: In a matter of time it will take the Honourable the Minister of Finance to complete his statement, the Estimates will be available to all Members of the House. I think that no one has any privileges here.

MR. STRACHAN: A long standing precedence in this House has made this document available to Members of this House the minute they were on the table. Now, is this long standing precedence going out the window? We just had a lecture about long standing precedence.

MR. SPEAKER: Order, please.

MR. STRACHAN: I'm asking, once again, Mr. Speaker. These documents belong to this House, they always have. They don't belong to the Premier. They don't belong to the Speaker. They belong to this House. As a Member of this House, I demand these documents. I don't want closure or secret documents. They belong to this House now, not an hour and a half from now (interruption). That is the proper procedure. I would like any document that is tabled on that desk. Under whose orders are we being refused this document at this time? That's what I want to know.

MR. SPEAKER: Order. The Member has raised nothing in his argument, other than the precedence he refers to about passing Estimates to him during the reading of the Budget Speech. In this particular case, there is some secrecy attached to the documents, obviously, because of the discontinuance of certain practices. The Estimates are in the custody of the Speaker, for the safety of all Members and all Members will receive copies of the Estimates very shortly.

MR. STRACHAN: What happens outside the House? The change of practices outside the House should not affect a change of practices inside the House.

MR. SPEAKER: Will the Minister proceed? Order, please.

MR. BENNETT: Mr. Speaker, I was endeavouring to make an appeal to the people of the Province, when I was so politely interrupted (interruption). I was saying that the four-letter word for the Social Credit Government, this coming year, is spelt J-O-B-S — jobs. It is our wish, it is our desire, it is our determination that more jobs be created within British Columbia. The Government not only will take action on its own account, it will seek the cooperation of business, of labour, of all segments of the economy and, especially, from every citizen in this Province to bring this about. I want to stress that this is the minimum objective, let nobody say it is the maximum. The minimum objective this year is to increase the number of jobs of people gainfully employed from October 1, 1970, to October 1, 1971, by a minimum of 25,000.

Honourable Members are aware of the brief submitted by the Province to the Federal-Provincial Conference in Ottawa last fall. The Government of Canada has offered no encouragement they will meet our requests. British Columbia must, therefore, take care of its own budgeting. But our options are limited. British Columbia has no control over monetary policy, no control of National financial institutions, and no control over immigration — immigration within Canada or without Canada. These are all controlled by the Government of Canada.

The Government control of monetary policy is of particular significance in the current state of the Canadian economy. On two occasions last fall, I wired the Prime Minister of Canada, drawing to his attention that his policy of high interest rates, in a period of high inflation and high national unemployment, was not good for our Nation. The text of my telegram sent on November 30, 1970, was, as follows: "Most damaging factor hurting our economy is high

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interest rates by the chartered banks and the high mortgage rates for new homes. Strongly urge immediate drastic action."

It is encouraging to note the recent reduction in interest rates but the Federal Government, with its full responsibility for monetary policy, should effect immediate and substantial further reductions in money rates to stimulate our lagging National economy.

Although lacking any monetary policy control, this Government has initiated policies to give added strength to the British Columbia economy. Work projects have been augmented to provide additional jobs. Because of the fiscal policies introduced and adhered to by this Social Credit Administration, over the almost nineteen years since taking office, the Province is in a fortunate financial position to undertake these projects at this time.

The emphasis in the Provincial Government policies in this Budget will be twofold. One — the creation of additional jobs and, two — the maintenance of high standards in education, hospital and medical care, and social services established by this Government.

Mr. Speaker, in my Budget Address a year ago, I stated as follows: "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."

Honourable Members may also recall my reports to the citizens of the Province during the past year on the state of Provincial Government finances. Much lower revenues from the forest industry, as a result of a depressed world lumber market, and from the construction industry as a result of management-labour problems, both greatly affected Provincial revenues. At the same time, the Province faced much higher costs in social services, as well as the general downswing of the Canadian and world economic climate.

Provincial revenues in the fiscal year ending March 31, 1971 — this is the year that we're now in — indicate, Mr. Speaker, sufficient strength to balance total current and all capital expenditures. However, the state of the economy and the revenue needs for further large expansion in Government expenditures required, not for just one year but for the next decade, emphasized the need to undertake a review of the Provincial tax structure.

The British Columbia tax structure adheres closely to the principle of ability to pay. For example, the personal income tax increases at a faster rate the higher the income; many tax exemptions are allowed on the necessities of life under the social services tax; the annual home-owner grant makes the net property tax payment more reflective of ability to pay. Further, a proper balance between the cost of certain services and the revenues received from users of such services must be maintained.

The most criticized tax from an equity standpoint is the property tax. The British Columbia Government has been the most progressive and generous of any Government in Canada in reducing the burden of the property tax upon residential and farm home-owners through the annual home-owner grant. While recognizing that British Columbia home-owners enjoy the lowest property taxes in Canada, the Government is prepared to introduce budget proposals to further reduce the municipal property tax burden. This continuing shift away from the property tax is in keeping with this Government's policy of encouraging home-ownership.

Honourable Members, the significance of the financial support given individual municipalities by the British Columbia Government is, perhaps, little realized. I would like, therefore, to detail at this point the per capita grant and home-owner grant payments to our largest and most important municipality in our Province, the great city of Vancouver. In 1971, this municipality will receive, through the per capita grant, $6,071,438 for municipal streets and roads expenditure; $4,187,937 for pollution, policing, and parks expenditure; $1,231,125 for ambulance services and tourism and industrial development; and $820,750 for social services expenditure. The estimated payment to Vancouver for home-owner grants, next year, is estimated at $12,300,000. Total Provincial Government grants, over and above shared programmes and so forth, to the city of Vancouver to support its municipal services, which are normally supported by the property tax, therefore, will be of the order of $24,600,000 this next fiscal year. I'm not suggesting any increase there. As can be seen, Provincial Government payments to the city of Vancouver allow for substantial reduction in property tax levies in this municipality. I would, therefore, add that an advantage of the property tax for the municipalities, and one which is generally overlooked is its stability as a revenue source over time, regardless of general economic conditions. It is not subject to sudden changes, as is the case with the Province's consumption and royalty taxes on forestry.

Expansion of the Provincial economy over the next decade will finance part of the increased cost of Government services, but a modest adjustment in taxes is required to maintain a balance between income and outflow. British Columbia Government tax rates for the individual citizens have not been increased for nine years. In the interest of the citizens and the economy over the long term, I consider modest tax adjustments to be now appropriate to finance our bold policies.

In regard to Federal-Provincial relations, Mr. Speaker, the Oxford Dictionary defines "confederation" as "an alliance between states" and "a body of states united for certain common purposes." Implicit in the definition is a mutual respect of problems. I suggest, Mr. Speaker, the mutual respect in the Canadian Confederation insofar as British Columbia is concerned, has been mostly one-sided for a long time, and the present Federal Administration continues to overlook our problems in favour of other regions of Canada.

The unique problems that result from our phenomenal population growth are a case in point. While our population is growing at over double the rate of the rest of Canada, the most striking characteristic is the large proportion of the increase coming from other regions of Canada. During the past five years, for example, over 75 per cent of our new population has so originated and this trend continues. This large influx places immediate demands upon the physical and financial resources of the British Columbia community. The majority of the wage-earners in this group come searching for jobs, so the community must create jobs for them. Many require retraining and Government income maintenance support at the cost of the British Columbia taxpayers. The new residents require housing at a time when mortgage interest rates are excessively high and availability of funds too low, which the British Columbia Government has countered with a large infusion of subsidized housing capital. Then these newcomers are entitled to the same high standard of Government services in health, hospital and medical care, education and social services available to British Columbia

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residents, because they are citizens of our great Nation of Canada. The Federal Government continues to ignore the excessively high cost placed upon the taxpayers of British Columbia in having to meet the demands of these new residents from other Provinces. By providing services and facilities to these people from the rest of Canada, it could be said that British Columbia is solving the problems of the rest of Canada.

The apparent current Government of Canada policy that one region of Canada cannot grow faster than any other put of the country is entirely unacceptable to this Government. We have a responsibility to the people of British Columbia and Canada to maintain a high level of economic activity in the Province that will generate new jobs and continue to improve the standard of living of our people. We also have a responsibility to the new British Columbia citizens from the other Provinces. We have no control over the movement of these people. If they continue to come to British Columbia, and they will, it has been conservatively estimated our population will be almost three times today by the start of the twenty-first century. The Province has, and must, grow to provide the necessary jobs. So, you see, Mr. Speaker, we just cannot be held back on the development of British Columbia.

British Columbia has been offered a $35 million loan by the Federal Government to finance job-creating projects. This Province has suggested to the Government of Canada, and is on record on a number of occasions, as to the need for low-interest loans to municipalities for essential local projects. While the loan fund has been accepted completely for our municipalities, I do not consider loans at Canada Pension Plan interest rates as low-interest loans.

The present stage of industrial development in British Columbia excludes most of our industry from any tax benefit under the special allowances and incentive loans offered by the Federal budget last fall. The income tax advantage enjoyed by industry in other regions in Canada from these Federal Government fiscal policies results in our industry really being penalized. And this after British Columbia industry was penalized more than any other in Canada because of our heavy commitment to world markets when the Government of Canada, in effect, revalued the Canadian dollar with its "unpegging" on May 31, 1970, which I say, Mr. Speaker, was just taking an easy way out of a problem that could have been solved in a more constructive manner.

If the Government of Canada is seriously concerned about the state of the Canadian economy and interested in providing more jobs in a united Canada, I suggest more effective options are open than those chosen in the latest Federal budget. British Columbia's views on this subject have been expressed a number of times. Growth in the economically dynamic regions of Canada is essential to generate the wealth necessary to assist the slower economic growth areas. Federal policies to the contrary will only contribute to a decline in our Nation's importance in the world trading market and a lower standard of living for our citizens right across our Nation.

The Federal White Paper on Social Security, published last fall, proposes some progressive action in income maintenance, but is far removed from British Columbia's repeated suggestion of a guaranteed annual income. The Federal Government still has not acted to convert their equalization payments to certain Provincial Governments to income support for people, as British Columbia has proposed on many occasions. With the over $800 million being paid out by the Government of Canada in equalization payments in the current year to these certain Provincial Governments, plus unemployment insurance benefit payments, the universal old-age security payments and other income support programmes, the Federal Government has an adequate basic pool of funds available to introduce a guaranteed annual income plan. As I have stated a number of times, the wide regional disparities in Canada will persist until basic Canada-wide standards of income and minimum wage are assured.

Mr. Speaker, the Government of Canada and the Provinces continue to explore the need for change in the Canadian Constitution. Mr. Speaker, it is fitting that in this, our Centennial Year, British Columbia will host the Prime Minister of Canada and the Premiers of the other Provinces at a Constitutional meeting in Victoria in June and, I'm sure, all the citizens of our Province will welcome them very warmly indeed.

I wish to make a few remarks, Mr. Speaker, regarding our Crown corporations. First, the British Columbia Hydro and Power Authority and, here, I wish to compliment the man who has headed this Authority from the start, Dr. Shrum. It shows with increasing years, only come added vitality and added wisdom. Ten years ago, when he and the University of British Columbia severed their connections, this allowed the Province to have the benefit of his services. Within ten years he has been able to give more service to British Columbia than he could have given to a university in a hundred years. He has given greater service, perhaps, than any other man in this Province.

The rate of demand growth for power in British Columbia has abated, due in part to last year's work stoppages and moderated economic activity in the forest and construction industries. Sales of electricity in the Province by the British Columbia Hydro and Power Authority increased by 6.4 per cent over 1969, and gas sales 5.8 per cent. Between 1960 and 1970, the Authority's electricity sales increased two and a half times, from 5.6 to 14 billion kilowatt-hours in 10 years.

The forecast of electricity-demand growth in the Province points up the importance of developing and using our power resources wisely and carefully. To assist in the evaluation of our power-developing capabilities, and in keeping with this Government's policy of ensuring a supply of hydro power for our expanding economy, the Government has instructed the British Columbia Energy Board to report on the best use of public and private energy resources in the Province over the next fifteen years.

Development of the Authority's power generation, transmission and distribution systems continues unabated. Installation of the sixth 227,000-kilowatt generating unit at the Gordon M. Shrum Generating Station on the Peace River will be completed this year, increasing the generating capacity at this site to 1,362,000 kilowatts. Work continues on the installation of two more 227,000-kilowatt units, for completion in 1972. Construction of the Mica Dam on the Columbia River is on schedule. Approval has been given the Authority for power development at this site. Redevelopment of the hydro-electric generating plant at Jordan River on southern Vancouver Island will be completed this year and will provide 150,000 kilowatts of peaking capacity. The Whatshan Generating Station redevelopment project, presently under way in the southern interior, will supply 50,000 kilowatts in 1972, next year.

Extensive expansion of the Provincial electric grid to effectively transmit and distribute the greatly increased generating capacity of the system continues. The Provincial

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Government's $2 million annual rural power subsidy continues to allow the Authority to extend its service into remote, sparsely populated areas of the Province and we will be asking, this year, that the Authority do everything it can to step up that development.

The thrust of the Pacific Great Eastern Railway over the last two decades into the central interior of the Province and beyond to the northeast and northwest sectors of British Columbia has opened the vast undeveloped mineral and forest storehouses in these areas. This pioneer railway, which, at present, leads all North America in construction of new rail routes, will hail our Centennial Year with the completion of the 250-mile northeast extension from Fort St. John to Fort Nelson, and the first 80 miles of the 420-mile northwest extension from Fort St. James to Dease Lake. Moreover, the balance of the Dease Lake extension has been surveyed and 100 miles is now being cleared, with construction contracts for this portion to be let this year, 1971. Bids have been called for clearing another 100 miles and the entire line is expected to be completed to Dease Lake by 1974. These extensions represent 668 miles of new track, a remarkable 60 per cent addition to the 1,121 miles of rail lines now operated.

The Pacific Great Eastern Railway had a dynamic year in 1970 with carloadings and revenues soaring to the highest levels in the company's 58-year history. Our vice-president and general manager, Mr. Broadbent, is entitled to special commendation. Gains in shipments of lumber, plywood, wood chips, manufactured iron and steel, and piggyback traffic helped to push carloadings to a record 106,400, up 84 per cent from 1960 and over 8 per cent from 1969. Operating revenues totalled $31,354,000, compared with $28 million in 1969, and $13 million in 1960. Net profit after all costs, including interest and depreciation, was $896,900, compared to a deficit of $2,904,800 at the start of the 1960's.

The continuance of this impressive railway growth experienced in the first year of the 1970's will result in the most dramatic decade of the railway's history. As rail routes penetrate the rich mineral and forest areas of northern British Columbia, new jobs and new communities will be created in increasing numbers. This growth will, in turn, stimulate economic activity in all parts of British Columbia and greatly augment incomes, including the income of the National Government.

I would like to refer, Mr. Speaker, to the economic conditions and the outlook. The British Columbia economy had to contend with adverse factors during 1970. The Federal Government's monetary policies, coupled with a sharp decline in housing starts in the United States and work stoppages in certain sectors of our industry, restricted our usual growth in capital investment, productive output, employment, income and housing.

British Columbia's population at December 31,1970, continued to reflect the highest annual growth rate in Canada, with a 3.4 per cent increase to an estimated 2,187,000 people. Not surprisingly, the labour force rose from 836,000 in 1969 to 877,000 this past year, an increase of 5 per cent.

Total private and public capital investment outlays rose moderately over 1969. Major gains were recorded in utilities, mining industry, Provincial Government institutions, the service industry, and trade, finance, and commercial service sectors. The housing sector has considerable pent-up demand and a large potential employment capability, but requires lower mortgage interest rates and an increased supply of money.

The gross Provincial product increased over 7 per cent in 1970 to an estimated $9,250 million.

The mineral industry experienced another year of strong growth as total value of production rose to $497 million, a 7 per cent increase over 1969. Copper, molybdenum and coal production increased significantly. Commencement of coal shipments on long-term sales contracts with the Japanese steel industry assures continued strength in this sector. The improved outlook for crude oil and natural gas can also be noted. The commitment of a portion of our mineral output under long-term contracts will help stabilize the Province's economy.

The forecast for pulp and paper and other wood products is good. With housing starts in the United States on the upturn, 1971 should see the forest industry move ahead once again.

The revenue from the tourist industry was $475 million in 1970, a 10 per cent increase over 1969. The value of exports through British Columbia customs' ports displayed great strength, with a 13.6 per cent increase to an estimated $2,600 million.

The long-run outlook for British Columbia's economic progress is excellent but, to some degree, is dependent upon the Federal Government formulating policies more suitable to nationwide economic growth.

I wish now, Mr. Speaker, to refer to the Public Accounts for the year that closed on March 31, 1970, the last completed year.

In the Budget Address, it is customary to review three fiscal years — the last complete fiscal year that has closed, the current fiscal year of operations and our estimates for the next fiscal year. Within a few months of the end of the last fiscal year ended March 31, 1970, financial statements for the Province and its Crown agencies were distributed through the publication of the Financial and Economic Review, the Abridged Public Accounts and the Crown corporations' annual reports. The detailed Public Accounts for the Government for the fiscal year ended March 31, 1970, were tabled at the opening of this Legislative Session.

Being free of annual deadweight debt charges and following realistic financial policies, this Province has once again recorded substantial Government gains in total assets, not only gain in total assets, but fixed assets and excess of assets over liabilities and reserves. There was an increase of $239,400,000 in total Provincial Government assets during the fiscal year, from $1,967 million at March 31, 1969, to $2,207 million. Fixed assets rose from $1,150 million at March 31, 1969, to $1,262,700,000, up over $112 million, or 9.8 per cent. The Provincial surplus, or excess of assets over liabilities, at March 31, was $1,537 million, a 5.8 per cent increase from the previous year.

Revenue receipts increased from $963 million for the fiscal year ended March 31, 1969, to $1,169 million in the past fiscal year, a strong 21.3 per cent gain — and all from higher economic activity. Expenditures, including all capital outlays, registered a 24.8 per cent increase, as $1,154 million was expended in the fiscal year ended March 31, 1970, compared to $924 million in the previous fiscal year. The budgetary cash reserve went from $50,061,000 to $64,900,000 as revenues exceeded all expenditures by $14,900,000. It's the first table printed in the Budget Address, Mr. Speaker, which will soon be made available to all Members of the House. It shows what has happened over the two decades. In 1952, the Province's net debt was $34

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million more than all its fixed assets. At the end of December, 1970, there was no net debt and the flexed assets were $1,315 million (applause).

I now refer to the present fiscal year, Mr. Speaker. The Audit Act requires the Comptroller-General to prepare for submission to this Legislature a statement of the Province's revenue and expenditure for the nine-month period ended December 31, 1970, on an accrued basis. This report is tabled today.

Accrued revenues during the period April 1 to December 31, 1970, were $909,600,000, up $62 million over the same 1969 period.

Expenditure accruals, including all capital, in these nine months were $888 million, having increased $92 million over the same 1969 period. Major expenditure increases have occurred in social assistance, up $32,700,000 in the nine months; education, in the nine months on the accrued basis, up $27,200,000; hospital insurance services, up $25,300,000; medical care, up $11,795,000; fire suppression, up $5,900,000; water resources, up $4,772,000; mental health care, up $2,700,000; and grants to municipalities, up $2,426,000.

I will now deal briefly, Mr. Speaker, with the first two years out of the three that are under review today. I'll now refer to the financial proposals for our next fiscal year, which starts on April 1 of this year and ends on March 31, 1972.

The challenge for the Government to keep British Columbia moving ahead on all fronts is large indeed. This is particularly so, when many of the difficulties confronting the British Columbia community result from causes outside the Province's control. Because of our large reliance upon world markets for the purchase of our products, National and international economic conditions are important factors in our budgetary planning. So, too, are the actions and policies of our Federal Government. These were the challenges confronting this Government in establishing budgetary policy for the fiscal year ending March 31, 1972. Mr. Speaker, we have opted for a continuation of dynamic growth to increase the supply of jobs for our fast-growing labour force and to maintain the high level of Government services to the people of this Province.

The expenditures presented for the consideration of the honourable Members today to cover Government programmes during the fiscal year ending March 31, 1972, which is our next fiscal year, total $1,300,692,600 (applause). As in all Budgets of this Administration, and this is the nineteenth, they include all capital as well as current operation requirements. Mr. Speaker, this is a record Budget to create jobs (applause).

The printed Budget Speech, Table number 2, will show an estimate of expenditures by department, the present fiscal year estimates as compared to the estimates of the next fiscal year, and showing the increase of next year over the present year of $135,232,600.

Our achievements in our first century are closely identified to the educational attainments of our citizens. Therefore, it is vital for our future prosperity that the education system be encouraged to the utmost of our capabilities. So, in the fiscal year ending March 31, 1972, an expenditure of $398,023,600 is proposed for the Department of Education. This is, by far, the largest single departmental expenditure. An increase of $35,562,600, over the current fiscal year, reflects in $14 million more for school district grants; $9 million more for operating grants to our universities; $6,250,000 more for grants to regional colleges and technical and vocational schools; $5,500,000 more for the school tax portion of home-owner grants; and $1,260,000 more for teachers' pensions. Legislation will be introduced today increasing the maximum annual homeowner grant from $160 to $170. This means the Province will be contributing $60,500,000, annually, to offset local school tax levies upon resident home-owners.

Expenditures of the Department of Health and Hospital Services and Hospital Insurance are estimated to be $264,054,000, up over $35 million over the current fiscal year. Payments to hospitals for patient care, alone, are increased $30 million and, now, total $205 million in one year. In the Department of the Provincial Secretary, $10 million more, or a total of $70 million is provided for the Government's contribution to the British Columbia over-all Medical Services Plan.

Also, the estimates of this department now include the appropriations for senior citizen housing grants, which have been increased from $2,600,000 this year to $4,200,000 next year (applause). Total expenditures, next fiscal year, for the Department of Rehabilitation and Social Improvement are estimated to be $136,615,100, and these people in need, Mr. Speaker — I do not agree with the critics — these people in need are entitled to good treatment from the citizens of the Province of British Columbia. The Government is concerned about the burden of social assistance costs upon the municipalities. Accordingly, this budget reduces the municipal share of these costs from 20 per cent to 15 per cent (applause), while still maintaining the $2 per capita grant for municipal social services, which, this last year, amounted to $3,100,000, which will mean, as far as we can estimate, the municipal share, in effect, will be 12 per cent.

I have emphasized in the past, and I do so again, this Government's Budgets are to benefit our people. In the Budget proposed here, the $868,693,000 for the Departments of Education, Health Services and Hospital Insurance, and Rehabilitation and Social Improvement and for the British Columbia over-all Medical Services Plan is more than the whole total Provincial Budget of only five years ago. The $112 million one-year increase in the appropriations for these departments is 83 per cent of the total budgetary increase of the coming year.

The Department of Highways, which includes the operations of the British Columbia Ferries system, receives an additional $7,301,200, or almost $158 million. Mr. Speaker, we cannot judge closely, sometimes, about the estimate on highways because contracts have a lot to do with weather and so forth. But it is going to be the Government's policy to have a bold policy of new highway construction throughout the whole Province this coming year (applause). This appropriation will create additional jobs, at the same time extending and improving our transportation network facilities.

Appropriations for the Department of Lands, Forests, and Water Resources have been increased $4,200,000.

There is a decrease of $671,000 in the Department of Industrial Development, Trade, and Commerce, which results from the highly successful British Columbia Pavilion at the Osaka, 1970, World's Fair, which is now concluded, and is not in this coming year's estimate.

The Government maintains a progressive attitude toward the British Columbia Civil Service. Employee remuneration and benefits are constantly under review to ensure comparability with other employers. The Government proposes a two-fold increase this fiscal year. Firstly, to keep

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salaries of civil servants apace with the increase in the cost of living, $7 million more is provided, the tenth consecutive annual increase. The increases will be made according to recommendations of the Civil Service Commission and are additional to annual salary increments and additional, as well, to promotions. Secondly, legislation submitted at this Session gives greatly improved superannuation benefits. Since 1951, the average British Columbia Civil Service salary has increased 164 per cent, while the Consumer Price Index has increased 47.4 per cent.

The Provincial Home-acquisition Plan has been an unqualified success during its first five years of operation. Since the introduction of the plan, the Government has provided $85 million for outright grants or second mortgage financing. A total of $29,200,000 has been approved for 53,200 housing grants, and over $51 million for 12,200 second mortgage loans. Accordingly, I am recommending, Mr. Speaker, a further $20 million be added to the Provincial Home-acquisition Grant Fund from the current year revenues, or the budgetary cash reserve, to ensure continuance and a build up of new homes, because when you build new homes you employ all the trades and all the suppliers and it has a tremendous effect on employment.

Mr. Speaker, in addition, to create additional jobs, I am recommending, this is over and above the estimates, that $15 million for accelerated park development be taken from the budgetary cash reserve (applause).

The Government established a $5 million Crop Insurance Stabilization Fund in 1967 to assist farmers who suffer crop failures, because farmers take all the risks of ordinary business people, plus the direct risks of nature, and they are very important to our economy. But adverse crop conditions this past year have resulted in a large drawdown from this fund and I am, therefore, recommending a $5 million appropriation from the current fiscal year revenues, or the budgetary cash reserve, to replenish this Fund for Crop Insurance.

Perhaps, which is most important, Mr. Speaker, are the social problems which inflict a great deal of grief and sorrow upon individuals result from the use of alcohol, cigarettes and drugs. This Government has made a contribution for many years to both the Alcoholic and Narcotic Foundations and these will be continued. However, it is the Government's conviction that a more aggressive and expanded education, prevention and rehabilitation programme must be undertaken to alleviate these problems. As the work will be a continuing programme benefiting future as well as present generations, I will recommend the establishment of a $25 million perpetual fund, with the annual interest earnings being used to finance the programme. The Fund will be known as the "Drug, Alcohol, and Cigarette Education, Prevention, and Rehabilitation Fund" and will be set up out of the current fiscal year revenues, or from the budgetary cash reserve. As in the other perpetual funds established by this Government, an advisory committee will be appointed to recommend on the distribution of the Fund's income. I would say that these Funds that I have outlined, over and above the Budget, these Funds total $65 million.

I now wish to deal, Mr. Speaker, with the revenues for the next fiscal year.

The British Columbia economy has shown some selective weaknesses during the twelve months since my last Budget but, due to our basic financial policies of balanced budgets and no debt, we have come safely through this period. The tax adjustments proposed today will meet our basic needs for fully balanced budgeting and have been selected so as to be as equitable as possible. In addition, they have been selected with a view to the relationship between the benefit received from a Government service and the revenue contributed to the support of that service. The revenue adjustments proposed are, and they are three in number:

One, and this is the reason why this procedure was adopted today, Mr. Speaker, to which there was some objection. Effective immediately, gasoline taxes will be increased 2 cents per gallon, and still be the lowest in Canada. The gasoline tax will be 15 cents per gallon in place of 13 cents; the coloured gasoline tax will be 3 cents per gallon in place of one cent, except for purchases by farmers and commercial fishermen, which will remain at one cent; and the tax on motor fuels, other than gasoline used in commercial motor-vehicles, will be 17 cents per gallon in place of 15 cents. British Columbia has the highest highway construction costs in Canada and the present level of motor fuel tax rates are not providing the appropriate share of costs from motor-vehicles. These adjustments in the motor fuel taxes, therefore, are made to improve the balance between the revenue contribution made by road-users and the construction and maintenance costs of the British Columbia highway network.

Number 2, Mr. Speaker, effective immediately….

AN HON. MEMBER: The Wallace tax.

MR. BENNETT: No, it's not going to be known as the Wallace tax. Effective immediately, a cigarette and tobacco tax will be operative. The rate will be 8 cents per package of 25 cigarettes, which is the lowest rate in Canada, and the tax on tobacco, cigars and other tobacco products will be scaled accordingly. However, Mr. Speaker, cigarettes and other tobacco products will be immediately exempted from the 5 per cent social services tax, giving a net increase of 5 cents per package of 25 cigarettes. These new revenues will be used to augment our health and social services expenditures.

Third and last, Mr. Speaker, effective April 1, 1971, the start of our fiscal year, a hotel and motel room tax of 5 per cent will be operative. It is considered that our tourists should make a modest contribution to our expenditures on their behalf.

Including the additional revenues from these tax adjustments, Government revenues for the fiscal year ending March 31, 1972, are estimated to be $1,301,232,000, to be completely in balance and provide a cash surplus of $539,800.

Table 3 in the printed Budget Address will be the revenues for the different sources compared with the estimates of the present fiscal year.

The financing of an expenditure budget of $1,300,000,000, which provides an increase of $135 million over the current fiscal year, which is about double the per capita of the great state of California, with only modest tax adjustments, accents the basic strength inherent in the British Columbia economy. I draw the honourable Members' attention to Table 7, depicting comparative Provincial Government tax rates of all Provinces in Canada and, even after these adjustments, British Columbia's tax rates remain the lowest in Canada.

Mr. Speaker, this Budget continues the high level of services provided for the people of the Province by this Government. It supplies the funds necessary to further economic expansion in the Province and generate additional

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revenues in the future to keep pace with our growth. In addition, Mr. Speaker, over $400 million in capital for construction projects will be arranged by the Provincial Government for the Provincial Crown agencies, the British Columbia Hydro and Power Authority, Pacific Great Eastern Railway Company, British Columbia School Districts Capital Financing Authority and the British Columbia Regional Hospital Districts Financing Authority.

By agreement with the Provinces, Mr. Speaker, some of which had great troubles in financing, the Government of Canada, and I commend them for that, has accelerated Dominion-wide by one month, the remittance of Provincial income taxes collected by the Federal Government. They were always three months behind before, now they are two months. As a result, British Columbia will receive thirteen monthly payments in the fiscal year ending March 31, 1971, instead of the usual twelve. As the extra payment, totalling $28 million, is rightfully future revenue and only received once, it will be taken directly to the budgetary cash reserve account. Similarly, for similar reasons, an estimated $11 million advance payment, this fiscal year, under the Federal Technical and Vocational Training Capital Assistance programme will be deposited into this account.

Now, I want to speak for a moment or two, Mr. Speaker, regarding our environment, which is the most important of all. Any person, perhaps, can have perfect environment if there are no people. Perhaps you could have lots of jobs, if you don't care about the environment. A great, important thing in our society is how we solve both at the same time — and that is our policy.

The accumulated effects of large-scale pollution, especially by industrial nations, is now one of the world's major problems. The tendency in this area has been to act upon the condition after the problem has developed and the environment damaged. The Government of British Columbia, however, is acting now to preserve the Province's healthful climate and abundance of unspoiled recreational areas. Legislation enacted in 1956 established the Pollution Control Board and initiated the procedure for developing our resources in a manner least disruptive of the natural environment. All motor-vehicles manufactured since January 1, 1971, and licensed in British Columbia, are now required by law to meet pollutant-emission standards.

This Government has introduced several financial assistance programmes to promote pollution control measures. An increase in the annual municipal per capita grant was made in 1968 for pollution control projects. The Government subsidizes the capital cost of local government sewage treatment plants. Industrial pollution treatment plants and equipment installed in the rural areas are exempted from Provincial property taxation. Moreover, the British Columbia Income Tax Act provides accelerated depreciation allowance on industrial pollution control equipment.

I would emphasize, however, Mr. Speaker, that the problem of pollution is everyone's responsibility. The collective effort of all levels of Government, business, industry and the individual citizen is required to safeguard British Columbia’s surroundings and heritage.

The progressive planning of this Government in the social and economic fields is markedly evident in a comparison of expenditures for education, health and social services, and Provincial development since the beginning of the 1960's. A total of $288 million was spent for these services in 1960. In 1965, it went up to $447 million, in contrast to next year — $1,155,864,000, four times the 1960 expenditure. This next fiscal year, 89 per cent of our total Provincial revenue will be expended on these services. Table 4 gives the details and comparison between 1960 and 1965 and the next fiscal year.

Especially dealing with education, Mr. Speaker, to meet the continuing challenge in the field of education, this Budget provides an all-time-high of $403,960,000, or 31 per cent of our total Provincial revenue in the next fiscal year. While the education of our young citizens and other citizens is vital, the Government must maintain a balance with other important Government services, such as health services. Table 5 gives a detailed comparison of these expenditures of 1960, 1965 and 1972, so that we will have a comparison of which way we are going.

Including the annual home-owner grant, Mr. Speaker, the Government of British Columbia is now paying over 90 per cent of the residential and farm home-owners' share of the total cost of public education. Over 90 per cent!

Last fall, the Government accelerated the authorizations for public school construction, including gymnasiums and activity centres, to take up some of the slack in the British Columbia construction industry. These new facilities, which include almost 900 classrooms, will meet the needs of our continually increasing student enrolment, as well as furthering the programme of promoting physical fitness and amateur sports.

As education costs accelerate with the progression in the level of education, it is important to seek the most efficient and economic means of educating our young students. Accordingly, the Government is encouraging the establishment of regional colleges throughout the Province to complement the nine strategically located Provincial vocational schools. In 1971, nine colleges will be operating with an estimated enrolment of 8,750 students. The three Provincial universities and the Institute of Technology meet the students' demands and needs for the highest academic and technical knowledge. The broad programmes offered in post-secondary education require an expenditure of $149,316,000, compared to $34,800,000 in 1965, and $8,100,000 in 1960. So the expenditure in higher education has gone up from 1960 to next year, from $8 million to over $149 million.

Current enrolment in the Provincial vocational schools is now almost 36,000, up 13.8 per cent in the one year. A new $1,500,000 multipurpose student centre under construction will greatly augment the facilities of the British Columbia Institute of Technology.

Total enrolment in our public universities will be an estimated 34,750 in September, 1971, a rise of 175 per cent over 1960. The Province is again providing substantial university operating and capital grants in this Budget. In the fiscal year ended March 31, 1970, Provincial operating grants to universities made up 78.1 per cent of the total university general operating budgets, while student fees made up 18.7 per cent.

Student scholarship and bursary aid will reach $3,750,000 this coming year in contrast to $312,000 in 1960. Scholarship awards are available to deserving students at all educational institutions in the Province on an equal opportunity basis.

In regard to health services, this coming fiscal year, the total expenditure on hospital insurance, social services, medical care, and mental and public health will be over four times greater than the outlay in 1960. Table number 6 gives the details and comparison of the three years.

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An outlay of $206,900,000 will be needed for the operation of regional hospitals throughout the Province, compared to the $48,900,000 spent in 1960. Hospital construction now under way totals approximately $60 million and will add 729 acute care beds and 573 extended care beds. The British Columbia hospital system provides maximum patient services to our residents as its care units range from intensive, acute, activation and rehabilitation, to extended care. The department, Mr. Speaker, is always taking further co-operation from the National Government and will continue to expand the programme. Out-patient treatment is being increased to free additional beds, and efforts are being made to assure essential medical treatment is available in the isolated areas of the Province.

The low-cost, subsidized, comprehensive British Columbia medical care plan, available to all citizens of our Province, now covers over 2,131,000 people, or 98 per cent of our population, and requires an appropriation of the next fiscal year of $70 million, partly ours, partly the Federal's. Through the subsidization of overall medical rates and the low-income premium subsidy, there is no reason for any resident of the Province to be without medical care. That's what makes it difficult for the people who come from that rich State of California to find in this Province, that we have such a high state of medical care for everyone, and hospital insurance at a dollar a day, which will continue (applause).

Expenditure on Provincial mental health programmes will be an estimated $44,200,000, greatly enlarged from the $18,800,000 spent in 1965, and the $13,500,000 in 1960. There are now 17 regional community health units, 10 of which have been opened in the last four years. In 1970, approximately 19,000 patients, 60 per cent of whom were out-patients, received care and treatment, a 19 per cent increase over the one year. Provincial Government facilities will be greatly expanded with the opening later this year of the 300-bed Glendale Hospital here in Victoria.

This Budget provides public health expenditures of $18 million. A total of 82 community health centres now operate in British Columbia, providing high-quality health care throughout the Province. An expanded home care programme carried out by the public health nursing staff has freed many hospital beds for acute cases.

Now, Mr. Speaker, I wish to refer to Provincial development, which makes all the other expenditures possible, and we should always keep that in mind.

Provincial development expenditures next fiscal year total $256,531,000 as compared to $136 million in 1965, and $105 million in 1960. The Government is introducing bold new spending programmes in resources development designed to create a maximum number of jobs. Table 8, in the printed Budget Speech, will show how the highways and ferries have grown from $79 million in 1960, to over $167 million next year. Forests from $13 million in 1960, to over $36 million in 1972. Lands, settlement and agriculture from $3,800,000 in 1960 to over $25 million next year. Recreation and conservation from $3,300,000 to $9,300,000, but that doesn't include that $15 million. Water resources are up from $1,050,000 in 1960, to $8,158,000 next year; tourism, trade and industrial development $841,000 up to $4,268,000.

An outlay of $167,786,000 will be made for the Provincial highway and ferry transportation facilities, up from $104 million in 1965 and $79 million in 1960. The $27,513,000 in Provincial grants to municipalities for upgrading municipal streets and roads will bring the Provincial Government's overall expenditure to $195,299,000. Major projects planned — and these are only a few of them, there will be many, many more — include the Vancouver Island Highway extension between Kelsey Bay and Beaver Cove, final contract on the Stewart–Watson Lake Highway, the final contract on the Cowichan Lake Road, and the conversion of the Trans-Canada Highway, which is no longer the Trans-Canada Highway, because they are sharing no more — it will be known as British Columbia Highway number 1 — between Bridal Falls and Hope, and a section of the Lougheed Highway, both into four-lane highways.

Forest management, protection and reforestation programmes require an expenditure of $36 million. In 1960, the expenditure was $13 million. Land expenditures on the development and protection of our valuable recreation assets for the enjoyment of our residents and visitors alike amount to $9,300,000 plus this $15 million which I mentioned earlier.

The British Columbia Festival of Sports will help to make 1971 another record tourist year. Also the Vancouver Exhibition Trade Fair and the British Columbia International Trade Fair, running from June 2 to 12 will consolidate the major industrial promotional gains made last year at the World's Fair in Osaka, Japan.

And here I ask that all municipal governments throughout the Province lend full cooperation both for tourist promotion and for industrial development. It is for these purposes that we increased the per capita grants just a few years ago.

Now, I especially want to refer to Provincial financial aid to local governments. This Government's financial aid to local governments has grown almost five times since 1960. This coming fiscal year, assistance will total $766 million, compared to $163,800,000 in 1960. On a per capita basis, municipal aid was $104 in 1960, and $150 in 1965, and $347 next year. These grants, shared-cost programmes and so forth are in Table 9 and take three pages to illustrate. They are higher and better than are received by the municipalities and cities of any place, not only in this Dominion but in any place on this continent (applause).

Provincial Government grants to municipalities for the support of street and road projects, pollution, policing, parks, ambulance services, tourism, industrial development, social services, and home-owner tax assistance will total $105 million this next fiscal year. Table number 10 shows the comparison of cities, districts, towns and villages and they all receive the same type of formula.

Mr. Speaker, the Budget Speech has taken about five minutes longer than I expected but the reasons are, I'm sure, apparent to all Members of the House.

Mr. Speaker, we celebrate, this year, our first century in the Canadian Confederation. We can look back upon one hundred years of outstanding achievement. While the first eighty years were relatively slow and laboured, the Province has revealed its true potential in the last two decades. It is fitting and proper to honour the pioneers — and we were blessed with great pioneers who had the first vision of greatness in our Province. In addition, we should also pay respect to British Columbians of recent times, whose achievements have brought the Province to the forefront in world and Canadian affairs.

Through this record Budget, the Government is ensuring the continuance of the Province's dynamic growth. The bold policies underlying the Budget will create many additional jobs, at the same time, promoting a high standard of Government services. Sound financial policies will continue to be followed to maintain a stable environment in the

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Province and allow progressive economic development to continue.

The spirit in British Columbia in 1871 when we joined Canada one hundred years ago was one of resourcefulness and foresight. Mr. Speaker, in 1971, this spirit is, if anything, even greater. I am sure British Columbia will move to a more dominant position and make a far greater contribution to the great Canadian Confederation in the years ahead (applause).

A debate arose, which, on the motion of Mr. Barrett, was adjourned to the next sitting of the House.

The Hon. W.A.C. Bennett presented to Mr. Speaker twelve 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. 11) intituled Special Funds Appropriation Act.

Bill (No. 12) intituled Accelerated Park Development Act.

Bill (No. 13) intituled An Act to Amend the Provincial Home-owners Grant Act.

Bill (No. 14) intituled An Act to Amend the Gasoline Tax Act, 1948.

Bill (No. 15) intituled An Act to Amend the Gasoline Tax Act, 1958.

Bill (No. 16) intituled An Act to Amend the Coloured Gasoline Tax Act.

Bill (No. 17) intituled An Act to Amend the Motive-fuel Use Tax Act.

Bill (No. 18) intituled Cigarette and Tobacco Tax Act.

Bill (No. 19) intituled Hotel and Motel Room Tax Act.

Bill (No. 20) intituled An Act to Amend the Mining Tax Act.

Bill (No. 22) intituled An Act to Amend the Assessment Equalization Act.

Bill (No. 21) intituled An Act to Amend the Taxation Act.

The House adjourned at 3:54 p.m.