CONTENTS

Monday, March 3, 1975
Afternoon sitting

Speaker's ruling

Disclosure of public service settlement figures — 281

Routine proceedings

Oral Questions

Casa Loma Motel purchase. Mr. Phillips — 281

CBC Columbia treaty documentary. Mr. McGeer — 283

Eviction of Aberdeen Hospital patients. Mr. Wallace — 283

Eviction notices to Casa Loma residents. Mr. McClelland — 283

Columbia River Hydro costs. Hon. R.A. Williams answers — 284

Budget debate (continued)

Mr. Bennett — 284

Mr. McGeer — 296

Mr. Wallace — 303

Statement

Announcement of inquiry into Columbia River costs and their allocations. Hon. R.A. Williams — 315

MONDAY, MARCH 3, 1975

The House met at 2 p.m.

Prayers.

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, in the gallery today is a group of students from Parklands Senior Secondary School in North Saanich, accompanied by their teacher, Mr. Robin Hay. I wonder if the House would welcome them.

MS. K. SANFORD (Comox): I would like to introduce a group of students today who are here from Campbell River Senior Secondary School, sponsored by Crown Zellerbach. They are with their teachers, Ms. Chris Round and Mr. David Brown. I Mould ask the House to join me in welcoming them.

HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, we will be having with us this afternoon visiting us in the gallery some of the members and the spouses of the B.C. Denturists Society, who are conducting their annual meeting here in Victoria. At this time I would ask the House to welcome them.

MR. SPEAKER: Hon. Members, the Hon. Member for North Vancouver–Capilano (Mr. Gibson) raised a matter of privilege last Thursday, and I propose to deal with it at this time. It was a complaint relating to the disclosure of settlement figures between public service bargaining units and the government. He cites the Provincial Secretary (Hon. Mr. Hall) as stating on February 25 to the House during question period: "I intend to adhere to the agreement I have with the union involved not to release the details of settlements until all negotiations are complete."

The Hon. Member considers news of disclosure to the public and not to the House to be a breach of privilege of the Members and a contempt. There's no evidence from the Hon. Member that press releases or public statements to the newspapers and media have been made by the Hon. Provincial Secretary. Therefore, the fact that the public has become aware before some Hon. Members of this House does not preclude the information having been received by the Employers Council of British Columbia by some other simple means. For example, the public may be astute enough to examine existing orders-in-council. Had they done so, certainly the information sought in question period would have been easily discovered. That means, of course, that the Hon. Member for North Vancouver–Capilano could have satisfied his curiosity without the assistance of question period. I have secured most, if not all, of these orders-in-council for the Hon. Member. I have them here and I'll send them to him.

Both May and Beauchesne declare that information already available in public documents, such as orders-in-council, statutes or government reports, should not be sought in oral question period. It follows, therefore, that such readily accessible information can hardly be the springboard for a matter of breach of privilege.

In the 18th edition of May, page 327, it states: "Questions requiring information set forth in accessible documents, such as statutes, treaties, et cetera, have not been allowed when the Member concerned could obtain the information of his own accord without difficulty." Thus no prima facie breach of the privilege of the House can be attributed to the Provincial Secretary, nor need this decision of these existing facts require at this time any consideration by the House as to the whole subject of the release of information outside the House.

MR. G.F. GIBSON (North Vancouver–Capilano): I would only say to your Honour, on a point of order, that if these questions should not be sought in question period, perhaps the answer should not be denied in question period either.

I think I may later be able to bring before your Honour information which would indicate that in fact this information was made public by an agency under the aegis of the Provincial Secretary, but I will attempt to check that further.

MR. SPEAKER: May I add to the Hon. Members that the information that was sought in question period about settlement of negotiations with public service units…? These were made by order-in-council in January — January 16 — February 6, and also before this House met. All of them were before this House met, and they were all public documents.

Oral questions.

CASA LOMA MOTEL PURCHASE

MR. D.M. PHILLIPS (South Peace River): I'd like to direct a question to the Minister of Housing today. In view of the recent disclosure by the president of Dunhill Development regarding the Casa Loma Motel purchase, will the Minister assure the House that Dunhill did not fraudulently mislead Central Mortgage and Housing in their application for mortgage money in order to obtain an amount higher than 90 per cent of the declared purchase price of $3,177,500?

HON. L. NICOLSON (Minister of Housing): Mr. Speaker, I know of no fraudulent procedure. I'd be pleased if the Member would enlighten me more on what his fears are on this matter.

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MR. PHILLIPS: A supplementary question, Mr. Speaker. If Central Mortgage and Housing were not directly misled in being asked to put up more than 90 per cent of the mortgage, then the House has been misled by the Minister as to the actual cost to the public Treasury for the purchase of the Casa Loma development, when he said that the end, completed — and he stressed "completed" — cost of this development would be $3,177,500. Yet the application to Central Mortgage and Housing was for approximately that same amount, indicating that the end cost to the province is going to be approximately one-third of a million dollars more. Would the Minister please explain? Either he misled the House in giving the completed cost of the project or he has misled Central Mortgage and Housing by applying for more than 90 per cent mortgage on the cost.

HON. MR. NICOLSON: Mr. Speaker, I am glad that the Member made me aware of what his fears are. The purchase price is as I announced. The total loan application for Casa Loma was as reported in The Province on Saturday: $3,528,500. The difference between the purchase price of the buildings from Casa Loma Motel Ltd. and the loan amount requested can be accounted for in the following estimated project cost, and, of course, final costs will not be known until after completion.

Administration costs for Dunhill Development will be $33,000. There is a contingency for modification, which has been requested by the B.C. Housing Management Commission — such as equipping units for the handicapped, ramps, double glazing on some windows, furniture for indoor and outdoor recreation areas — in the amount of $100,000. There is interest on advances, until the CMHC loan is received in June, of $218,000. All the above items are recognized as legitimate project costs by Central Mortgage and Housing Corp., and they will be funding whatever figure eventually becomes the total project cost. This is the normal procedure followed in all section 43 applications.

You see, Mr. Speaker, it is the province which is putting in the front-end funding, and until the mortgage is received it is an accepted procedure that interest costs be borne on those, on the advances. Then when we pay off the final $3.1 million…. We are making those advances which I explained earlier — the $540,000, and then there is the $300,000-odd. There will be interest charged on that at the rate of 10.375 per cent, which is the same interest rate charged to us, Mr. Speaker, by the federal government. So that is an equitable agreement.

Then, when we pick up the total cost upon completion there will be a period until we get the advance from Central Mortgage and Housing, which we anticipate in June. So it is estimated that these costs — that is, our carrying costs until we can get financing from Central Mortgage and Housing and it is agreed to by Central Mortgage and Housing — will be figured into the project costs in terms of the cost through poor administration, through the B.C. Housing Management Commission.

I'm very happy to have this opportunity, Mr. Speaker, to explain this.

MR. SPEAKER: Does the Hon. Member have a further question?

MR. PHILLIPS: In view of the Minister's statement which he just made in the House, I'm afraid I have no alternative but to accuse the Minister of…

MR. SPEAKER: Order, please!

MR. PHILLIPS: …misleading this Legislature.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please! Would the Hon. Member withdraw that statement? This is a question period, in addition, besides making speeches.

MR. PHILLIPS: Mr. Speaker….

MR. SPEAKER: Please, would the Hon. Member…?

MR. PHILLIPS: On a point of order, the Minister, when questioned in this Legislature, clearly stated that this project completed, and he emphasized….

Interjections.

MR. SPEAKER: Order, please!

MR. PHILLIPS: I'm on a point of order — yes, right now! He clearly emphasized that this project would cost the Department of Housing $3,177,500 and he specified "completed." And I say the Minister misled this House on the cost of this project.

MR. SPEAKER: Order!

AN HON. MEMBER: We have it — a week ago Tuesday in Hansard.

MR. PHILLIPS: We have it, Mr. Speaker, and I'd like your ruling on it. We have it in Hansard that the Minister definitely specified, and put emphasis on the fact, that this project would cost $3,177,500 completed — and he specified completed.

MR. SPEAKER: Order, please. This is question period and you are out of order at this time. It's not

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the proper way to do it, as you well know. You really should withdraw a statement attacking another Member. You are entitled to state your opinion and let the public judge between you, but not to insult another Member in the House.

MR. PHILLIPS: Mr. Speaker, the Minister of Housing just made his statement during the question period, and it's now that I say he's misleading….

MR. SPEAKER: I ask you that you withdraw that statement because it is not parliamentary, and you know that.

HON. R.M. STRACHAN (Minister of Transport and Communications): It's wrong in fact.

MR. PHILLIPS: All right, Mr. Speaker, the….

MR. SPEAKER: Would you kindly do so, please? Then we'll get on with question period.

MR. PHILLIPS: Yes, Mr. Speaker, I'll withdraw it.

I have a further supplementary question to the Minister….

AN HON. MEMBER: Withdraw!

MR. PHILLIPS: I did withdraw.

MR. SPEAKER: The Hon. Member withdrew.

AN HON. MEMBER: Yes, what's the matter with you?

MR. PHILLIPS: A further supplementary question to the Minister, Mr. Speaker. Are there involved in the extra costs of the Casa Loma project any moneys to convert the 32 motel units to suitable living accommodation for senior citizens?

HON. MR. NICOLSON: Hon. Member, in the interests of giving accurate information, I'll answer that question properly on Wednesday.

CBC COLUMBIA TREATY
DOCUMENTARY

MR. P.L. McGEER (Vancouver–Point Grey): I have a question for the Minister of Lands, Forests and Water Resources. With respect to the documentary film on the Columbia which appeared on CBC television, did the Minister give permission to officials of the CBC in preparation of that documentary to go through the B.C. Hydro files?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): The answer is no, Mr. Speaker.

EVICTION OF
ABERDEEN HOSPITAL PATIENTS

MR. G.S. WALLACE (Oak Bay): I'd like to ask the Minister of Health, with regard to Aberdeen Hospital, what measures are being taken to find alternative accommodation for the 93 patients presently housed in that 75-bed hospital who will be evicted when the hospital closes.

HON. D.G. COCKE (Minister of Health): Mr. Speaker, I'm not at all sure that that hospital is going to close. At the present time, we are negotiating with that hospital, and I suspect that it's a regularly used business ploy to assist in getting the kind of deal that the present owner of the hospital would like to get. We, naturally, are disturbed that there could possibly be a number of patients who would be dislocated, but certainly I'm quite aware of the problem and am in touch with it at all times. At the present time, I'm not really terribly concerned, but if it occurs, we'll certainly make the necessary arrangements.

MR. WALLACE: A supplementary question, Mr. Speaker. I recognize the Minister's concern and the statement about negotiations, but it's my understanding the negotiations have gone on for some considerable time. I wonder if the Minister could tell the House if a specific offer has ever been made for that property and what that sum of money was, in relation to the asking price of $1.5 million.

HON. MR. COCKE: Well, Mr. Speaker, I think that it would be a little unbusinesslike if I start giving all our side of the negotiations in this particular place at this time. Needless to say, I suspect that ultimately arrangements can be made. I just hope that that's the case. But I think that we have to be careful on behalf of the public that we don't spend any more money than is absolutely essential in order to get that facility into the hands of the Juan de Fuca Society.

MR. WALLACE: Just a final quick supplementary, Mr. Speaker. Has any final deadline date been set by the owner of the hospital by which negotiations either have to come to a successful end or the place be closed down?

HON. MR. COCKE: I can't really answer that definitively.

EVICTION NOTICES TO
CASA LOMA RESIDENTS

MR. R.H. McCLELLAND (Langley): I'd like to ask the Minister of Housing again a question on Casa Loma Motels. Is it true, Mr. Minister, that some people in the motel units are being given written

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eviction notices, some of them dated March 1, at this time?

HON. MR. NICOLSON: Yes, Mr. Speaker, they were given written notices, but we have had the B.C. Housing Management Commission contact the owners and the people there, and they're making arrangements right now. Nobody is going to be radically displaced.

MR. McCLELLAND: Well, on a supplementary, Mr. Speaker: are you guaranteeing to this House today then that no one will be evicted from Casa Loma either under the terms of the rentalsman Act or under the terms of the Innkeepers Act?

Interjection.

MR. McCLELLAND: Mr. Speaker, the Minister has said on an earlier occasion that he will operate 32 of those units under the terms of the Innkeepers Act, which allows him to evict people because they are undesirable. I'm suggesting that handicapped people in that unit now have been given eviction notices, and they haven't been told that their accommodation is secured. I'd just like the Minister to tell us that he guarantees that those people will not be evicted.

MR. SPEAKER: I may point out to the Hon. Member that according to the rules it would be beyond his competence in question period….

MR. McCLELLAND: Well, we know it's beyond his competence, Mr. Speaker. What we want to know is whether those people will be evicted or not.

Interjections.

MR. SPEAKER: Order, please. I don't think it's within the competence of the Minister to issue eviction orders. That is a subject of the courts, and it's also the subject of the rentalsman, I presume. It's also a subject of the housing commission.

MR. McCLELLAND: Mr. Speaker, you presume it's to do with the rentalsman. The Minister has said that it will not be to do with the rentalsman. Those units will be operated under the Innkeepers Act, which is outside the jurisdiction of the rentalsman. He can evict those people because he considers them to be, as it says in the Act, undesirable — section 7 of the Act. I'm only asking him to guarantee, Mr. Speaker, assure the House that those people will not be evicted.

Inteijections.

MR. SPEAKER: This is not officially connected with the Government, as far as I know.

HON. MR. NICOLSON: The Hon. Member is trying to infer motives. The reason I said that it could be operated under the Innkeepers Act was because of the subject of the zoning. If the zoning is given, it would probably be all consolidated under one residential zoning.

The Member has tried to lead this House to believe that I had some ulterior motive in mentioning the Innkeepers Act. That has certainly nothing to do with it.

COLUMBIA RIVER HYDRO COSTS

HON. R.A. WILLIAMS: Mr. Speaker, I'd simply like to further clarify the point made by the Hon. Member for Vancouver–Point Grey with respect to the CBC and the programme, "The Reckoning." It is that numerous questions — I would think 10 pages of questions — were made with respect to facts on the Columbia. Some of the data which were not generally available to the public — all of the answers were provided. That's all I am aware of.

MR. McGEER: Mr. Speaker, could I ask a supplementary question? Was the source of the document tabled in this House from one of the CBC employees, directly or indirectly, or did it come directly from officials of Hydro?

HON. R.A. WILLIAMS: No, the source was no employee, directly or indirectly, involved with the Canadian Broadcasting Corp.

MR. McGEER: Supplementary, Mr. Speaker: was it from the B.C. Hydro?

HON. R.A. WILLIAMS: The data which the material was based on, of course, is from B.C. Hydro.

MR. McGEER: Mr. Speaker, a further question. Has the Minister made inquiries about the typewriter? Was it a B.C. Hydro typewriter that did the title page, or was it a typewriter from some other source?

HON. R.A. WILLIAMS: Well, as usual the Liberals are not the least bit interested in the solid issues involved. The material was received from a consultant to the government.

Orders of the day.

ON THE BUDGET

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker, I'm pleased to rise in my place and comment on this budget, or this non-budget, because

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this budget ranks as the most politically expedient and most irresponsible and dangerous budget which has ever been laid before the people of British Columbia in recent years.

Examination would indicate that this may be the first deficit budget in many, many years in this province.

HON. D. BARRETT (Premier): Now you say "may be."

MR. BENNETT: I will speak further on this.

The Minister of Finance (Hon. Mr. Barrett) and Attorney-General (Hon. Mr. Macdonald) are fond of quotations and old sayings. I think that one which characterizes this budget best is: "When your outgo exceeds your income, your upkeep becomes your downfall." When your outgo exceeds your income, Mr. Minister of Finance, your upkeep becomes your downfall.

I would hope that today the Minister of Finance and Premier will stay in the House this afternoon because usually he ducks and runs when people are speaking.

This budget contains $700 million in expected, hoped-for new revenue, Mr. Speaker, to the provincial Treasury, and almost all that money must be retained in the hands of this big government — a government of big bureaucracy which ignores local government, the housing problems, education, and employment opportunity in this province. It's a budget of broken promises — promises to the people of British Columbia made by this government which have been forgotten because of the demands of this out-of-control bureaucracy, what it's doing and the threat it's placing on our revenues. It's a politically expedient budget because this government is continuing a reckless programme of self-centred spending without any regard for leadership — the leadership that British Columbians want to bring restraint to our economy at this particular time.

How can the people of British Columbia join in the battle to defeat inflation when their government lays before them a $3.2 billion budget? How can the ordinary people of this province expect to bring an end to inflation — the cruellest tax of all, Mr. Speaker — when there is a total bankruptcy of government leadership?

I think at this time we should take a look at the broken promises and political expediency which characterize this budget and last year's budget and some of the statements that were made last year by this Minister of Finance in presenting his budget and the fact of what those statements mean today.

Last year in his budget, the Minister of Finance said: "Our government came to office in the fall of 1972 with a mandate to increase the public financial return on the resources of this province."

AN HON. MEMBER: What a laugh!

MR. BENNETT: This budget, Mr. Speaker, in fact shows that the revenues from resource taxation have fallen as a percentage of total revenue. The Minister of Finance, in addition to relying on greater revenue from personal and income tax, has found it necessary to add taxes on gasoline, and to increase the corporate taxation on capital.

Last year the Premier said the voters of this province called for a programme designed to eliminate taxes from residential property. In 1975 they're still calling. Today we are no closer to this goal. Property taxes are skyrocketing in this province and the "son of homeowner grant" has gone nowhere in relieving the education tax on property in this province. The figures given by the Minister are unrealistic in eliminating education costs from property taxes. He knows it; the people of the province know it.

Last year the Premier said: "Municipalities which lack the taxing flexibility of senior governments, yet face increasing costs every year, will find in this budget several substantial programmes designed to assist them." But in this year's budget not only are there not any concrete programmes on which local government can count in planning its budget, but there is not sufficient new revenue for local government to keep pace with increasing costs.

Local government leaders are unanimous in this position. I refer, as well, to the remarks of His Worship the mayor of Vancouver who said of this budget: "There's going to be a huge increase in property taxes this year and there's no way around it." Referring to the budget's somewhat vague, iffy promise of revenue-sharing, His Worship said: "We're getting a promise of some nebulous amount of money in the future, and it's still a third of nothing." A third of nothing for the municipalities of this province.

Again quoting from last year's budget, the Premier said: "Despite major innovative social policies, our government has been prudent." I remember that word well. He used it several times last year. "This prudence," he went on to say, "is also reflected in the good news that none of the spending programmes to be proposed in today's budget will require an increase in tax rates for the individual citizens of this province."

How quickly a year goes by. Prudence is gone this year: the word is not mentioned once in the budget and it's been replaced by new taxes by an irresponsible government which has replaced prudence with expediency in this time of extreme inflation and hardship on our people.

Last year the Minister of Finance spoke of good returns from those natural resources because of his government's policies. And yet the policies continue but not the good returns.

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Revenue from the mining industry has declined dramatically, Mr. Speaker, as you well know. And it has declined in the forest industry as well. As the Minister of Finance asked then: "Where are all those gloom-and-doom boys? He talked about all the gloom-and-doom boys last year, and he talked about the gloom-and-doom boys this year.

I'll answer that. There are 38 gloom-and-doom boys sitting over across the aisle in this Legislature, 38 Members who, collectively, as government, have achieved the gloomiest outlook for this province, this resource economy, that British Columbians have ever known. Not gloom-and-doom, perhaps, but maybe the glum-and-dumb boys would be a better description.

You know, when we talked about the mining industry in last year's budget, the Minister of Finance went on to say: "A truly impressive 55 per cent annual growth in the value of mineral production was registered last year, as the value reached $993 million, up from $637 million in 1972." He went on to attack some unnamed Members in the House who were predicting that the whole mining industry would collapse. That's what he said last year. Well, has the mining industry collapsed, Mr. Speaker? What's happened to the search for new minerals? Let's just take a look at some of the indicators: the search and the number of mineral claims in this province.

In 1971 there were 36,000 claims; that accelerated to 53,000 in 1972. You would have thought, with the record world revenues in 1973, that it would have accelerated further, but it dropped — dropped to 24,000, Mr. Speaker. In 1974 it dropped further to just 10,643. Is that the buoyant mining industry the Premier talks about?

At the same time, the Yukon was going the other way: 3,000 claims in 1972; 7,000 in 1973; 12,000 in 1974. His programmes have been good for the Yukon but not too successful for building the mining industry, both as an employment base and a base on which to finance government, in this Province of British Columbia in 1975.

It must be noted that this government, which took all the credit a year ago, must now search 3,000 miles across this country, or around the globe, to attach the blame for the continued deterioration in our resource economy, because never have British Columbians seen a budget with so many scapegoats, none of whom live in British Columbia. They took all the credit when things were going right, and now the Minister of Finance would have us believe — in advance he's prepared his scapegoats — that it's Ottawa's fault, the Americans' fault, the Japanese' fault, when nothing goes right, but not the fault of the Government of British Columbia, not this Government of British Columbia — no, no, no.

You know, the Minister of Finance told us just one year ago that the province continues to meet the provincial Crown corporations' capital requirements from its own internal investment funds. That was in the budget speech last year. The province continues to meet the provincial Crown corporations' capital requirements from its own internal investment funds….

AN HON. MEMBER: Is that so?

MR. BENNETT: …thus keeping away from costly borrowings in the public market.

In the same budget year to which the remarks of this Minister of Finance referred, he has found it necessary to borrow $375 million during the time of the highest interest rates in history. Not only did the Minister of Finance decline to give British Columbians the opportunity to participate in this financing, to participate on the same conditions that were offered outside the country, but he refuses to disclose who the lenders are for $200 million of that total. It gets curiouser and curiouser.

AN HON. MEMBER: What's the interest rate?

MR. BENNETT: We hear, in this year's budget, that just one year later Crown corporations would borrow almost $1 billion. Costly borrowings last year; prudent financial planning this year: what a difference a year makes! What a difference a few months makes in the attitude and in the actions of this government and the Minister of Finance.

Last year the Minister of Finance said: "As I stated in our budget a year ago, this government's first priority is to provide the best social services possible for the people of the province within our fiscal capabilities." The Premier obviously believes that he can get the best for less, although, with the record of this government, I doubt it. This year the social services section of the budget declines to 61 per cent of the total budget compared with 68 per cent last year. On last year's tax base that is a drop of 10 per cent.

AN HON. MEMBER: That services budget: inflation will eat it all up.

MR. BENNETT: Beyond the broken promises, and the expediency, Mr. Speaker, this budget is worth boting for what it doesn't say. I quote from an article by The Vancouver Sun business editor on this 1975 budget — that great Vancouver newspaper, The Vancouver Sun, which I had the privilege of suing some years ago on remarks made in this House by Members who are here now, but may not be here later. This is what The Vancouver Sun says, the business writer

"Nowhere in the 52-page document is there an attempt to come to grips with the eight

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major economic problems confronting the world and British Columbia.

"Instead, the watchword of the day is to continually use political superlatives.

"Nowhere is there an attempt to indicate what B.C.'s economic growth in real terms will be this year other than the optimistic federal projection that Canada will show real economic growth of about 3 per cent. The budget predicts that British Columbia will fall within this range.

"Nowhere is there an attempt to indicate how much inflation is expected to subside this year, if at all. Instead we are told 'we can expect inflation to moderate from the present level.'

"Nowhere is there a projection indicating what private and public investment will be this year. Instead, we are told it 'will continue at an encouraging level….'

"Nowhere does the budget note that most of that profit (of Can-Cel) was shown because pulp and paper is in extremely high demand and market prices soared last year….

"Nowhere is there an attempt made to come to grips with the issue that the United States is facing one of the most serious recessions ever and that forecasts for a major economic upturn later this year are no longer accepted in Washington….

"All in all, a disappointing performance."

This was a quotation from the business writer of The Vancouver Sun, and it sums up this budget very well.

"The Premier had the opportunity to try to get business, labour and every British Columbian to recognize that, economically, the situation from a world viewpoint is serious. Instead he dredged up old slogans about the nasty multinational corporations and big companies. Hardly a theme needed at this time when British Columbia needs more capital investment to support its social programmes." When we consider what a budget really is, Mr. Speaker, perhaps the Minister of Finance has forgotten just what a budget means and what it means to the people of this province. I went to the dictionary, and the definition of budget was:

"A detailed presentation of revenue and expenditures for (in the case of government) the coming year."

Now, all public organizations and governments have budgets. Most families, especially in this time of inflation and rising costs, have budgets. Most single persons have budgets to balance the outgo with income. The purpose of a budget is to forecast income and, within the framework of that income, to create priorities for expenditure so that you can accurately plan and guarantee continuity of those items of priority that demand first call on expenditures.

Now, in the case of a family, the first priorities would be food, shelter, clothing, and then into such areas as they may decide within the framework of their income. Most families in these times of economic uncertainty are being more cautious in their budgeting. They are practising restraint — restraint that will help to ease the inflationary pressure that threatens our economy. In many instances, that restraint is involuntary and demanded by necessity; there just isn't the money available. The families of this province know what a budget is.

For many British Columbians, today the necessity for restraint in their budgets is caused by unemployment, not the statistical unemployment of percentages and seasonal adjustments to make it look better, but that most real unemployment of all, their own. Over 100,000 British Columbians fall into this category, many forced to live on the restricted income of unemployment insurance. Their budgets have declined. They know what a budget is; they are practicing restraint.

Some of the unemployed citizens of British Columbia have an even more difficult problem because these are the citizens who do not qualify for unemployment insurance or welfare so they must budget to live off their savings. They know what a budget is; they know very well what a budget is.

Then there are the thousands upon thousands of British Columbians on welfare. They must live on a restricted budget, yet face the high cost of inflation that erodes those goods and services they would buy because of the loss of purchasing power. They know what a budget is.

Then there are citizens on pensions. They too must show restraint in their budgets because of fixed incomes and declining purchasing power. They know what a budget is.

Then there are those still fortunate enough to be employed in British Columbia in 1975 and still lucky enough to have work and wages. They are practising restraint, not only because inflation has robbed most of their purchasing power but also because government, this government, is demanding and taking more of their income away to pay for the rising cost of government bureaucracy.

Inflation and big government go hand-in-hand in robbing the purchasing power from the people of British Columbia. These are the twin villains who are increasingly taking more and giving less in benefits. Whatever benefits they appear to have are an illusion. These citizens know what a budget is.

Then there are business citizens, mostly small companies, many family company units. They too must budget. They are practising restraint from necessity because they are buffeted by rising costs

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and inflation and higher costs through taxes to feed the government bureaucracy. Their only hope of staying alive in a declining economy is to budget and to compound further our problem of unemployment in this province by reducing the number of employees in order to reduce overhead in those areas where they still have financial self-determination. Mr. Speaker, they know what a budget is.

Understanding the need for restraint and the foot-on-the-floorboard drive of this government to inflation encouragement is not good enough. The light-hearted way in which the Premier, as Minister of Finance, gave a review of this province's finances last Friday was frivolous and often cynical. These people, and the citizens of B.C., know what a budget is, Mr. Speaker, but does the Premier know that budgets, from necessity, quite often call for restraint? The people of British Columbia expected a more responsible document from this Legislature and from this Premier and Minister of Finance last Friday.

You know, the way the Premier presented this budget, with wishful optimism and an "I am sure everything's great, and look on the bright side" sort of attitude, I am sure that if he'd been a news reporter covering the story of the Titanic, his story would have read: "Titanic stops in the middle of the Atlantic to take on crushed ice." That's the sort of optimism that was presented in this budget, a sort of wishful-thinking on expected revenues that may not be there at the end of the year.

You know, Mr. Speaker, this budget clearly represents a new system of financial accounting for the Province of British Columbia. The Minister of Finance chooses to describe this new system of accounting as realism. According to the Minister, this budget is real because it represents, in his own mind, a true estimate of revenue and expenditure when contrasted to the system of budgeting and the manner of determining revenue and expenditure in this province. Now for many years in this province revenues were underestimated. By the early 1950s we'd built up a considerable debt from a series of deficits — deficit budgets in this province.

That tradition of deficits and debts was reversed, and recently it's been traditional in British Columbia that revenue was underestimated and expenditures were kept within budget. The net result of this approach was to ensure a hedge, a real dollar hedge, against the uncertainties of economic prediction in an increasingly complex and fast-moving economic picture in British Columbia, Canada and throughout the western economies. It's interesting to note that it was this principle of underestimating revenues which save this Minister of Finance's neck in the 1974 fiscal year.

There would have been chaos were it not for the revenue side underestimate, because revised estimates for the 1974 fiscal year, tabled in this House last Friday, show overruns on the expenditure side of approximately $350 million.

MR. D.M. PHILLIPS (South Peace River): That'll happen next year, too.

MR. BENNETT: That's an incredible sum, equal to approximately $175 for every man, woman and child in the province, or approximately $700 for the average family unit. That was the amount of the underestimate on expenditures in the year 1974.

MR. PHILLIPS: Way over 10 per cent.

MR. BENNETT: Could the province have withstood the Premier's realism in 1974?

And now, for 1975, the Minister of Finance has presented a budget of realism to the people of British Columbia, which requires the asking of some very serious questions. Is it realistic to expect that this government can control its spending habits in 1975, to eliminate all budgetary overruns?

MR. PHILLIPS: The Premier hasn't got a serious bone in his body.

MR. BENNETT: Realistically they must do this, because there is not a red cent of hedge in this budget. Perhaps I should say a blue cent. Can a government with an overrun of $350 million in 1974 not overrun by a single penny in 1975?

MR. PHILLIPS: No!

MR. BENNETT: On the basis of this budget, failure to live within the estimates of expenditure, even by the Premier's own optimistic accounting, will mean a deficit.

Now let us apply the realism tag to the estimate side. Never in the history of this province, since the days of the Tolmie government, have so many "ifs" been ascribed to estimates of revenue, Mr. Speaker. Estimates of revenue from natural gas will come true if the federal government raises the export price. Much-needed assistance for local government will be available if Ottawa comes through. Estimates from personal taxation will be met if the economy improves in May. In almost every case this so-called budget of realism will become fact only "if," Mr. Speaker.

In almost every case, estimates of revenue for 1975 are subject to serious question. Certainly they are the most optimistic revenues and estimates presented to this House in decades. Yet they come at a time when optimism is hardly the word to describe the economic climate in British Columbia, Canada or those trading nations whose economies play such an important role in determining what will happen in

[ Page 289 ]

British Columbia.

My party has sought to achieve the most competent analysis available with respect to every category of revenue estimates, and in almost every case we find serious challenges to the accuracy of these estimates, Mr. Speaker.

During the debate on this budget Hon. Members of the opposition will spend considerable time challenging the veracity of these estimates.

The essential point then, Mr. Speaker, is that economically and politically all the ifs raised by this Minister of Finance must be answered in the most optimistic response possible in order to balance this budget.

A continued economic slump in our key resource base, a decline in consumer spending, continued high unemployment and its effect on personal income tax revenues or a continued slump in corporate economic activity taken individually or together could produce a serious shortfall in the revenue which this government expects to receive. A shortfall of even 1 or 2 per cent could bring this budget into deficit position. And this must be taken together with the rather difficult-to-make assumption that the Barrett government of waste and welfare can bring its spending habits under control, something not evident in earlier budget years since they have been the government of this province.

Now it is particularly interesting to note that the estimates of welfare contained in this budget and estimates of revenue from the forest sector do not support the optimistic character of the revenue predictions. The federal government's share of programmes — mostly welfare payments to this province — will increase by over $200 million. Is that optimistic? Estimates of revenue from the forest sector are off approximately one-third from last year, and neither of these critical elements of this budget support the Minister of Finance's contention that the economic climate will improve sufficiently to give this budget any measure of credibility.

The conclusion is the spectre of a shortfall on the revenue side and an overrun on the expenditure side. A more characteristic definition of this budget than "realism" is "a gambling long-shot." In these economically difficult times of 1975, that's not good enough for any government and certainly pot good enough for the people of British Columbia.

At a time, Mr. Speaker, when stringency and restraint in government are required more than ever, we have a very inflationary budget, highlighted by a 48 per cent increase in expenditure, the basis of which is a highly questionable, hypothetical shot in the dark. Even if the estimates contained in this budget come close to being correct, the inflationary force of this budget on the purchasing power of British Columbians will be unprecedented and, by itself, the force of this budget will be to tax the purchasing power of our people.

Inflation, Mr. Speaker, as you know, is the cruellest tax of all, and totally irresponsible when it results from the actions of government, which is there to protect the people and lead the economy, and not lead it further down the road to inflation and robbing of the purchasing power of the citizens of British Columbia.

You know, statements contained in the budget speech with respect to the increase in capital investment in British Columbia could be among the most misleading in this budget. The Minister of Finance is proud to note the 18.5 per cent increase in capital investment, according to the most recent figures available. But the Minister notes correctly: "A high proportion of this investment activity was undertaken by this provincial government and its agencies." Now if the portion of new capital investment derived from public funds were extracted from the total of the investment, capital investment in British Columbia in 1974 would have been a very different picture.

Moreover, Mr. Speaker, capital investment has become a very misleading economic indicator in terms of the policy of this government. Traditionally, capital investment has been an important yardstick in evaluating the new job opportunities coming on stream in a given year. Yet since the arrival of this Finance Minister, this yardstick is very much less meaningful, because public fund capital investment by this government more often than not has created no new jobs.

Let me quickly detail some of the government's investments which have had little or no impact on job creation. We have the purchase of or public investment in Westcoast Transmission stock, B.C. Telephone stock, Meadowbrook, Plateau Mills, Casa Loma, pinko-Panco Poultry, Dunhill Development, Kootenay Forest Products, and many more, but none of this investment of public capital has created jobs in British Columbia. We created, by purchasing that stock, not one new job at Westcoast Transmission, nor any new jobs at B.C. Telephone. So that investment of public capital cannot be used as a yardstick to measure the creation of new jobs in British Columbia.

In this area of non-job producing capital investment, it is interesting to note that much of the government capital used to purchase existing companies or operations has left the province and sometimes even the country, as in the case of funds received by the vendors of and to Dunhill, which have moved construction capital to Washington state and to California.

MR. PHILLIPS: Aren't they going to build more houses?

[ Page 290 ]

MR. BENNETT: The characteristics of the present government's suspect capital investment programme is that in many cases it only signifies the change of ownership, Mr. Speaker — not the creation of new job-producing enterprises.

Moreover, the Minister of Finance's statement ignored the hundreds of millions in capital spending by the mining industry which has been shelved as a direct consequence of the policies of this government.

It did not mention the curtailment of new plant investment by the forest industry, nor does it mention the general subject of the fear the providers of capital have for this province. It is a shame, Mr. Speaker, that people now boast of their plans to move capital to Alberta, to Washington, to California or elsewhere. It's a shame that that should happen to British Columbia.

MR. PHILLIPS: That's where the Minister of Labour (Hon. Mr. King) tells them to go looking for their jobs: "Go to Alberta, Manitoba."

MR. BENNETT: This budget confirms that capital investment in British Columbia is being shifted from the private sector to the public sector. Government capital investment in 1974 was 40 per cent of the total — 40 per cent! In 1972, government capital investment was only one-third of the total in British Columbia.

It must, therefore, be obvious to you as well as to other Members, Mr. Speaker, that since the last year of the former government the private sector is down and the government sector is up.

Furthermore, housing capital investment is down from 25 per cent of the total capital investment in 1972 to 20 per cent in 1974. Unfortunately, most of this percentage drop is the result of investment from the private sector drying up in the construction of housing.

The continuing theme of unrealism which characterizes the statements of the Minister of Finance in this budget is further borne out by comparative figures for capital investment in the pulp and paper sector of British Columbia's forest industry. The Minister of Finance says, and believes, that British Columbia is doing very well. But let's look at the facts.

In the January, 1975, edition of Pulp and Paper, the industry magazine, capital investment figures are given for the period 1974 through 1976, a very meaningful time-frame, Mr. Speaker. In British Columbia for the period of 1974-76, projects underway or on the drawing board amount to capital expenditures of only $168 million. In the one buoyant sector of the forest economy, pulp and paper, for the same period in Quebec and Ontario, projects underway or on the drawing boards total $1,350 million.

Investment in the job-producing primary segment of the British Columbia economy is only 14 per cent of the total for Ontario and Quebec. Is that a figure to be proud of, Mr. Minister of Finance? Is that a figure to be proud of when British Columbia has consistently led the rest of Canada in construction of facilities in our forest industry and when now we're falling so dramatically and drastically behind Quebec and Ontario?

The same severe decline in capital investment exists with small companies as well. The Minister of Finance's expressed concern for the condition of small businessmen does not square with the facts. For the period December, 1972, to December, 1974, small businesses — those employing less than 20 persons — declined from 47,734 to 44,969 in British Columbia. They didn't participate in this glowing optimism and economy which the Premier talks about. That's a drop, Mr. Speaker, a loss of 3,000 small businesses in the Province of British Columbia after just two and a half years of this government and this economy under the control of this Finance Minister.

The position of the opposition on this budget, that it gives people less, is further substantiated by the estimate of expenditure for Public Works. In 1972 that department received $31 million; in 1975 it is to receive $90 million, a remarkable 300 per cent increase in three years. I call attention to the Public Works estimate because this department accurately reflects the cost of government, Mr. Speaker. That's the money that sticks as it comes to government and doesn't get back in services to people.

The creation of buildings: it is the Public Works which must pay the rent on high-priced office space, which in the Victoria area alone has jumped to $5 million per year in just three years. Public Works must pay the bills for the antique desks which now adorn so many offices in the cabinet Ministers' offices. We all know the tale of the $30,000 cabinet table.

The remarkable increase in the budget for Public Works over the past two years, and now into the third year, I think very dramatically proves our contention that this is a government out of control.

This is a big government of big numbers, which is now requiring more and more of our people's money just to take care of itself. This is being done without restraint and without any leadership to our people to show restraint, Mr. Speaker.

HON. MR. BARRETT: A $30,000 cabinet table? Would you stake your seat on that figure?

MR. BENNETT: By contrast, the Department of Economic Development will receive….

Interjection.

[ Page 291 ]

MR. BENNETT: Well, it's funny that you don't question any of the very important statistics dealing with the economy and employment and the loss of small jobs.

HON. MR. BARRETT: Would you stake your seat on that figure?

MR. BENNETT: If that is the one statistic you question….

HON. MR. BARRETT: Did you check the figures at all?

MR. BENNETT: Yes.

By contrast, the Department of Economic Development will receive $5 million, or about 6 per cent of Public Works. It is the Department of Economic Development, which is clearly charged with the responsibility of developing an industrial base, which will lead to new employment opportunities for British Columbia.

HON. MR. BARRETT: Who told you there's a desk for $30,000?

MR. BENNETT: A comparison of these two departments is very clear — a strong statement of this government's priorities. In the opinion of my party, they are hopelessly reversed when the Minister of Finance talks about job security. He can only mean job security for the friends of this government employed by it, and that figure from the latest estimate is now approaching 50,000 people.

There is nothing in this budget save a very vague proposal to spend $15 million in the forest sector which cannot create the nearly 100,000 jobs needed in British Columbia to achieve employment for our people.

The incredible thing about this government's record on housing is that it does not understand that the lack of housing affects real people with real hopes and frustrations to own their own homes. Most people in British Columbia want more than shelter for shelter's sake. They do not wish to be tenants of either the large landlord or the state; they wish to have the opportunity to own their own homes. They are becoming increasingly alarmed by the record of this government, which is strong in bureaucracy and short in performance in building houses or allowing houses to be built in British Columbia. This department, which so far has three major ideas, is a proven failure.

Its first idea was the purchase of the Dunhill Development Corp. for the purpose of getting administrative and technical know how. For nearly $6 million, it got a proven lemon. Any help it has gotten must be called "lemon-aid." It's best idea was to increase the administrative section of the department, and, after allowing $360,000 last year, it now proposes to spend $3 million for administration. The administrative section of this department is to be increased by 900 per cent. If there had been a 900 per cent increase in housing starts, all the young people in British Columbia would have been proud of the Minister of Housing (Hon. Mr. Nicolson). However, to spend an additional $20 million for housing and development and require 140 new administrative people at headquarters is irresponsible and shocking in a time when the public wants restraint, better value for their tax dollars and direct results of their dollars.

The next idea that this department had was to purchase properties at excessive prices which had already been built or to purchase properties where the developer was going broke halfway through his development. In total, initiative which should have been expected from this department is simply not there. It has become strong on bureaucracy and short on building houses.

As I said at the beginning, housing affects real people. Let me just relate to this House the situation faced by one of those people. I received a letter some weeks ago from a gentleman in Richmond. He is a 26-year old and he has been married for four years. He has two sons, one six months old and the other three years old. Out of his take-home pay of $860 per month, $280 goes for rent; $300 per month goes to his wife for food and clothing for the children; $80 goes toward a car payment, insurance and gasoline; and he budgets $50 for telephone and incidental expenses. Each month this family of four is committed to expenses of $710. They have $150 left for discretionary spending or emergencies, a movie, an evening at the pub, a babysitter, holidays.

These people are typical of British Columbians who are hard working, just starting out with young families and who desire to own their own homes. This man's problems, like tens of thousands of British Columbians, are the direct consequence of policies, programmes and inflation created by this present government. A combination of no construction of rental units, the fleeing of investment capital from this province as a consequence of ever-increasing taxation, the artificially high price of land, and the lack of any working programme to help increase revenues to local government has made it impossible for many British Columbians of a moderate income to own their own homes. These conditions are a direct result of this government.

These conditions didn't exist in 1969 or 1970 or 1971 or 1972 when it was possible for a young family, willing to make the sacrifice, to get into a small home of their own for $1,000 down or $1,500 down. Homes were never more affordable, never more obtainable, never closer to the reach of the

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average man in British Columbia or the young couple starting out. Yet this is a no-home government, and the people of British Columbia are going to tell it to go home the first chance they get.

The only clear policy the Minister of Housing has is to totally disrupt the housing market and hinder new construction, while every day the threat that more and more British Columbians will become tenants of either the landlords or the state grows and becomes more serious.

I want to return to the condition of this gentleman from Richmond because he knows what a budget is all about. With respect to his discretionary income — the family's spending money — he is in an overrun position if he spends more than $150 per month. Certainly he can't afford $40-per-yard broadloom carpet or an antique desk.

He knows, as do all British Columbians, that a budget is a statement of priorities for individuals, for families, for companies, and to the tune of $3.2 billion, for governments too. He knows what a budget is, and every young couple that ever hoped to own a home in this province know what a budget is and they know that the budget they have to meet in the Province of British Columbia at this time takes home ownership further and further away as a possibility for them in British Columbia in 1975.

This man believes that there is something wrong with a system which exists in a vast province like British Columbia where he, unless he wins a lottery, will have to wait until his children approach school age before he can think about affording to take them to a home of their own. His wife can't work sooner because it would require some serious compromises in their family life with a young family, and the children would be without their mother in their formative years. This is a very unsatisfactory option for British Columbians who place a high priority on the quality of life in British Columbia.

The housing estimates barely handle the inflationary increase. Last year's housing record was pitiful, Mr. Speaker, and no level on which to base this year's housing approach in the Province of British Columbia.

For education too, Mr. Speaker, this is a short-change budget. The 23 per cent increase for universities' operating costs will be largely absorbed by inflation and the probable necessity of the universities being asked to meet wage settlements which the government itself has already agreed to. This area has already been suitably commented on by Dr. Jewett of Simon Fraser University in the press, but it was indicated from the budgets of the universities that they can hardly meet the existing programmes with the amount given by this government.

Interjection.

MR. BENNETT: Yes, Dr. Jewett. Her comment was: "Wow!"

AN HON. MEMBER: "Wow"? My golly!

MR. BENNETT: "Wow!" That's right.

The expenditures for universities on capital are now well below the increasing capital provided in the late '60s and up to 1972. When the inflation factor is applied to the 1975 figures, the case that the universities are falling into a period of neglect becomes quite apparent, Mr. Speaker. The $12 million provided this year, because of that inflation, is the equivalent of having a cutback on university capital expenditures of 50 per cent from the $15 million level reached by 1972. When you take the inflation of the three years since them, this would be a cutback on their capital expenditures of 50 per cent. Is that meeting the needs of education in this province?

Similarly, operating grants to school districts will not accommodate existing wage settlements made to turn the screw a little further. Last year's so-called $8 million add-on priority grants have been absorbed into the total, to be made available for local grants to education.

Perhaps the most significant point to be made in commenting on this department is the obvious trend towards the central control of the Department of Education itself. Nearly 100 new people are to be added to the head office administration of education. Nearly $2 million more are allocated for beefing up the ivory tower, Mr. Speaker.

The track record of this department thus far can only be described as staggering chaos, because the on-again, off-again research and development sections of this department have created total bewilderment out there among the people of the province and particularly among the working teachers and the school trustees; yet from last year's estimate of $700,000 for research and development we see a rise to $2.3 million. Last year this expenditure, as I've indicated, simply created chaos. The Department of Education became the fire department, Mr. Speaker. Yet this budget provides an over 300 per cent increase for research and development — hopefully not to provide a 300 per cent increase in the type of confusion that took place in that department in the year 1974.

As I've already indicated, an important aspect of this budget is the new escalation of disagreements between British Columbia and the Government of Canada, and the scapegoating of the federal government with respect to NDP policies which are failures or which have been promised but in two and a half years have not come into being. Ottawa will determine whether or not we get revenue sharing — not the British Columbia Minister of Finance. Ottawa

[ Page 293 ]

was wrong in indexing income tax. Ottawa doesn't know anything about the export price of natural gas. Two years ago the Premier would have given away all of British Columbia's natural resources if Ottawa would only nationalize them, or socialize them, or commit themselves to his political philosophy, but today he's arguing about whether British Columbia…and what share they're going to get.

The $1.93 Louisiana gas price is the most ridiculous bit of political grandstanding that we've seen in British Columbia in decades, because that gas is unregulated in-state gas which never leaves Louisiana, Mr. Minister of Finance, and doesn't come under any regulatory control.

Has the Minister of Finance ever mentioned in this House that the average price of all natural gas sold in the United States is less than $1?

All British Columbians, I'm sure, believe that British Columbia export gas should not be sold to American customers for less than they pay for their own gas. Because it is a premium fuel in terms of the environment and efficiency, it should be accorded a premium price. But suggesting that British Columbia gas should be sold at the price of a minimal amount of interstate Louisiana gas is like saying that all desks are as expensive as some of the desks found in this Legislature.

The true reason that the Premier is adopting the same stance as his Arabian friends in charging the highest price in the marketplace is that natural gas revenues are the only resource revenues left to this government which have not or are not heading to some sort of major economic collapse. We've seen the mining industry and the forest industry decline. There appears to be only one industry left on which we can pin our hopes to balance the type of budget which he presented to this Legislature.

Rather than be reasonable and cooperative with the federal government, which is itself committed to higher export gas prices…

HON. MR. BARRETT: What do you think the price should be? What's your opinion?

MR. BENNETT: …this Minister has found it necessary to go international with his grandstand act in order to try to balance this budget. You can bet that if it doesn't balance a year from now or six months from now, he'll blame it on Ottawa. It will be Ottawa's fault, not his fault, not accountable in British Columbia. They are already preparing where to present the blame. It's the first time the excuse has been developed well in advance of the fact, and in this budget they've developed their excuse early.

HON. G.R. LEA (Minister of Highways): I thought you said we didn't plan.

MR. BENNETT: Reflecting on the remarks by the Minister of Finance about this province's relationship with the Government of Canada, I'd like to draw the attention of the Premier to a speech given by the Hon. federal Member for Vancouver Centre, the Minister of National Revenue (Hon. Mr. Basford):

"Addressing the Vancouver Board of Trade, the Minister stated that it is time to bring an end to the Maginot line of provincial insularity. 'One of the most overworked slogans in the political lexicon is "Bring us together,"' he said, 'but that is precisely what this country and this province need. Co-operation rather than disputes; tact rather than tantrum — these are the principles that must become the foundation of a new approach to politics for this province.'"

And now is not the time for tantrums, Mr. Speaker, through you to the Minister of Finance. As the Member and Minister from Vancouver Centre concluded: "In good times we can perhaps afford this kind of political behaviour; but in present economic times, we cannot."

Not only does the Minister not agree with your attitude, Mr. Minister of Finance, he does not agree with your highly optimistic economic predictions which form the basis for estimates of revenue contained in this budget.

HON. MR. BARRETT: Does he agree with my policies?

AN HON. MEMBER: What policies?

MR. BENNETT: Like a great portion of this budget…

MR. P.C. ROLSTON (Dewdney): It took 12 guys to write that.

MR. BENNETT: …revenue-sharing moves into….

Interjections.

MR. BENNETT: I see by the Vancouver newspapers, in a column, that the Deputy Minister of Finance (Mr. Bryson) is being replaced by one of the political writers (Mr. Eliesen) that wrote this budget. No wonder it was written more on a political basis than on a factual, numerical basis. It is unfortunate that Mr. Eliesen has achieved such prominence in the Finance department.

MR. PHILLIPS: There's $200,000 in the budget for Mr. Eliesen too.

MR. BENNETT: Unfortunate, Mr. Speaker.

[ Page 294 ]

lnterjections.

MR. BENNETT: The people of B.C. are paying too much in a declined economy for this Minister of Finance and this government. The price is staggering.

lnterjection.

MR. BENNETT: The unemployed out there…don't laugh at the comedy routines and the slapstick and the Keystone-Cops attitude of this government and this cabinet as it reels from crisis to crisis. They don't find it funny when they're trying to get along on unemployment insurance or welfare to know that this government has now solved its own unemployment problem and is well-ensconced in comfortable offices and can take trips around the world. It's no comfort to them that their cabinet is able to travel and afford a joke book now. It's no comfort to the people of British Columbia.

Like a great portion of this budget, the words "revenue sharing" move over into the iffy-iffy country of an iffy-iffy budget. If expenditures can be restrained, as proposed by Treasury Board in December, we wind up the year with $500,000 of surplus against the budget of $3.2 billion. Then maybe local government can get more. If the economy, using the Premier's own prediction, picks up in May, 1975, his budget revenues will fall in place with his hopes. If the federal government goes along.

If you're wrong, you'll ruin this province. Oh, that's funny; that's funny. If the province goes along with an increase in gas export prices, the municipalities will share in that hope.

The farce in all of this, of course, is that municipalities are in the process of settling budgets. Now, Mr. Minister of Finance: the municipalities are settling their budgets now; not next month, not midsummer, but now. They need to know now, not some airy-fairy, iffy promise developed in the research and publicity department of your….

Interjection.

MR. BENNETT: One of your new ghostwriters in the Finance department.

Interjection.

AN HON. MEMBER: Why don't you go shave?

MR. BENNETT: Furthermore, Mr. Speaker, municipalities work on the calendar year. By the time they get to an unknown number of dollars from the gas exports, they'll be halfway through their expenditure programmes for the year we're in now. This deliberately iffy approach to the real financial problems of the municipalities is so unrealistic that it is difficult to take seriously.

How much better it would have been if this Minister of Finance had taken the three areas of revenue enjoyed by the province — namely, corporation and personal income taxes, natural resource revenues and sales tax revenues — and simply shared them on a formula basis with municipal governments. The total revenue from all of these areas, Mr. Speaker, is $1,948 million, by the Premier's own estimate, nearly 66-2/3 per cent of the revenues he says we are going to get. And in view of the fact that last year's growth in provincial revenues was estimated to have produced only $1,352 million this year, obviously the Finance Minister is expecting growth in this revenue which he's not willing to share with municipal governments, with local governments.

In other words, this year the growth in revenues of the province are expected to go up by 46 per cent, while the provincial government leaves the municipalities with iffy promises. It should be recognized that if the export price goes to $1.50, the municipalities would receive only $20 million, or approximately a $10 lift in the per capita grant. A $10 lift in the per capita grant — if! — would only meet the present costs of standing still. A $ 10 lift in the per capita grant would only meet the present cost of standing still.

It is alarming that the total wage bill of this province is approaching, in this government, $600 million in this province. During a period of little more than two years we have increased the overhead of the provincial government by 300 per cent but the per capita grants to the municipalities over the same period of time by only 6 per cent. Consider that, Mr. Speaker. The overhead of this provincial government has increased by 300 per cent, but the per capita grant. to municipalities over the same period has increased by only 6 per cent. Is this sharing? Is this caring? Is this concern for the plight of municipal governments? Is this sharing with them the capital they must have to serve the people of this province? The waste and extravagance of this government in maintaining its own central bureaucracy at the expense of municipalities is unacceptable and disgraceful.

It is clear now that the days of British Columbia's economic independence, not only from the rest of Canada but from the international money-lenders, are at an end as a consequence of three years of using our funds and misallocating our funds by the Minister of Finance. The province's internal financing capability has all but been destroyed, and we see plans for borrowings this year by Crown corporations of almost $1 billion.

The Minister of Finance points out with pride the high credit rating accorded the Province of British Columbia by two American credit-rating institutions. I might say that apparently we still enjoy with those

[ Page 295 ]

institutions a book credit rating. The same Minister fails to point out as yet that the Government of British Columbia has no long-term debt, but this budget appears to be a big step in what could be that unfortunate direction.

However, statements made in this House by the Premier and president of the railway in this session indicate that providers of capital are questioning the strength of this government. In the Crown corporations where there is debt financing we learned two weeks ago of financing arrangements for certain B.C. Railway cars. The president of the railway outlined these terms in this House — that we were paying the U.S. prime rate plus 1.5 percentage points. When these agreements were first made, and until very recently, the U.S. prime rate was at 12 per cent, meaning that a Crown corporation on an equipment purchase was paying an effective interest rate of 13.5 per cent. Now I don't know of any government with a triple-A credit rating that pays 13.5 per cent.

AN HON. MEMBER: Hear, hear!

MR. BENNETT: Another Crown corporation, Mr. Speaker, borrowed $100 million at 10.25 per cent.

AN HON. MEMBER: What did Can-Cel pay?

MR. BENNETT: This is a fixed, non-adjustable, long-term loan.

These interest rates do not support the contention of the Minister of Finance that corporations and agencies of this government enjoy the same preferred status as they did two and a half years ago. In fact, on that one loan for 25 years at 10.25 per cent, just a drop in the lending rates between then and now will cost our people of this province millions of dollars in extra interest.

I have found this budget to be, in many ways, the easiest to analyse but in so many ways the saddest budget documented in British Columbia since, perhaps, the disaster budgets of the Tolmie government.

It accelerates an alarming trend of lowering the priority given to people services: education, health and human resources are down from 68 per cent of the budget in 1974 to 61 per cent in 1975.

It replaces an expanding reliance on revenue income from resource industries with dependence on people taxes, Mr. Speaker. Taxes which directly affect people are up on a staggering scale, while revenues from forestry and mining are dramatically down. Property taxes — just to the province, not concerning the rise in property tax to the municipalities — are up $5 million. Those are people taxes. Sales taxes — which our people pay — are up $155 million. Personal income taxes are up $172 million. Gasoline taxes are up $60 million. Hotel taxes are up $3 million. And look, liquor income is up $50 million. I guess the only escape in British Columbia these years is to drink more, because liquor taxes are predicted to be up $50 million more this year.

Resource taxes: forestry is down $125 million from last year's estimates; mining is down $6 million. More from people and less from resources — it projects an alarming reliance on external borrowing which suggests that the bad mismanagement of internally controlled social capital accounts is forcing us to obtain secret borrowing from unknown loaners. It projects enormous deficits from Crown corporations which, in the past, ran at a profit in most cases.

The logical explanation is that the mismanagement and perhaps the squandermania affecting the government operations are now prevalent throughout other government enterprises. There is talk of millions more to cover the losses of B.C. Railway. Who knows about ICBC? B.C. Hydro is $3.6 million down. B.C. Ferries — who knows what their loss is? In fact, there's only one big winner in the public area, and that's the Liquor Control Board, and they're talking about $155 million.

This budget projects an enormous ongoing increase in the bureaucratic structure of government. The wage bill of this province in 1975 is approaching $600 million, compared to $228 million in 1972. From the estimates, the wage bill for the coming year adds up to $579 million plus a further $116 million for professional and special services. And that comes closer to $700 million, Mr. Speaker.

The budget, in effect, totally rejects the so-called restraint order issued by the Treasury Board in December and later publicly confirmed by the Minister of Finance. Salary contingencies alone are $82 million in this budget. Rentals for accommodation for the new people go from $8 million to $15 million.

Successive budgets of this Minister of Finance have escalated 25 per cent in 1973, 27 per cent in 1974 and 28 per cent in 1975 — or 48 per cent beyond the estimates of 1974 and the budget of a year ago. The 1973 budget was overspent by $377 million. This 1975 budget reveals that this government overspent the 1974 budget by $342 million. In just two budget years this government has overrun expenditures of $719 million.

The budget provides no evidence that the immediate financial needs of local government are to be met. For example, to match the government's own spending designs over 1974 estimates, the per capita grant should be approximately $51 or, if taken against the amended estimates, it should be about $42 instead of $34.

The budget gives built-in recognition to the probability of enormous increases in the numbers

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likely to be seen on welfare assistance: $55 million more for welfare.

The budget confirms that capital investment in British Columbia is being shifted from the private sector to the public sector. Government capital investment in 1974 was 40 per cent of the total in British Columbia; in 1972 it was only one-third. It is therefore obvious that since the last year of the last government the private sector is down.

Mr. Speaker, the British Columbia Social Credit party in 1975 would provide leadership for British Columbia. Our proposal for revenue sharing that came out of our Harrison workshop and was later advocated in this House during the fall sitting is the only answer for the financial difficulties of municipal government. We advocate a specific share of both the provincial income tax share, resource revenues and the sales tax to be allocated to the municipal government. Later in this session we will introduce two bills to bring this about — one entitled the Resource Revenue Sharing Act and the other the Municipal Consultation Act. Only then will the homeowners of this province be spared the fantastic tax increases on their property caused by this NDP government, and only then will our municipal governments be financially able to receive and encourage the very necessary construction of new homes desired by our citizens.

To further encourage the construction of new homes our party would provide the finances through a B.C. housing corporation to bring low-cost, serviced lots onto the market, with the help and cooperation of municipal governments and regional governments. Our target for 1975 would be 50,000 new, affordable homes for British Columbians. This would also assist in the creation of jobs to ease the burden of unemployment in our province.

Our people want work and wages, Mr. Speaker. The people of British Columbia have a right to work and wages in this province; and to further assist them in 1975 our party would provide more money to the Department of Economic Development, not less, to create an industrial base of further job opportunities for our citizens.

We advocate low-cost loans, plus feasibility and marketing aid for British Columbians with initiative who will help create employment and economic stability in this Province of British Columbia. The British Columbia Social Credit Party would provide leadership in restraint, in fighting the cruel tax of inflation. Uncontrolled increases in the number and cost of this centralized bureaucracy would be stopped immediately, and more of the public's tax dollars would be returned in benefits, rather than being wasted in feeding this growing bureaucracy.

The British Columbia Social Credit Party wants work and wages and opportunity, Mr. Speaker. Opportunity for British Columbians! What we don't want is the waste and welfare and unemployment of the Barrett NDP government. We condemn as unnecessary and inflationary those tax increases imposed in this budget.

Now the Premier has called the opposition the "doom-and-gloomers." But I am confident in the future of British Columbia, and I am confident of the effort and initiative by which our people will guarantee that future. I am not confident of the NDP ability to achieve that future, nor am I confident of the financial management of the present Minister of Finance. Mr. Speaker, we oppose this budget.

HON. MR. BARRETT: On a point of order. One of the statements made by the Leader of the Opposition was that the Minister of Finance was misallocating funds. I would ask him to withdraw that statement.

MR. SPEAKER: Does the Hon. Member impute any improper motives or improper conduct on the part of the Minister of Finance?

Interjection.

MR. SPEAKER: I think there's a distinction, but I don't think you've made that distinction. You can't allocate funds and misallocate them without authority of law. If you're suggesting that he's been doing it without authority of law….

MR. BENNETT: Mr. Speaker, if it will clarify it, the word "misallocation" was used in the context that the Minister of Finance didn't know what he was doing.

MR. P.L. McGEER (Vancouver–Point Grey): Thank you, Mr. Speaker.

HON. MR. BARRETT: Did you really meet with him?

MR. McGEER: No, no, no. You've fooled him. Mr. Premier, I'm going to come to that a little later.

I couldn't have been more pleased, Mr. Speaker, unless the television cameras had been here. I must say that the Premier put on a vintage performance on Friday. I want to compliment him on his style. He was forceful. He dealt with the opposition barbs. He produced this fantastic budget. You know, they used to talk about "Bet-a-million Bixby," the Scott Fitzgerald character. We've got "Bet-a-billion" Barrett. And after it was all over and that $1.1 billion increase had been laid before the people of British Columbia, I could see the cameras fading away from the Premier in that very dapper outfit and the television commercial coming on and saying: "Will it be cash or Chargex?" (Laughter.)

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Interjections.

HON. MR. BARRETT: Would you like a five-minute recess to get the rest of your Members here?

MR. McGEER: A better turnout than usual, Mr. Speaker.

HON. MR. BARRETT: Are all the planes grounded?

MR. McGEER: Somebody said that the only light they could see at the end of the tunnel after that budget address was the train coming the other way. I don't know if that's right, but I can tell you this: compared with this spending spree that the Premier is proposing, he makes King Farouk look like a belt tightener.

MRS. P.J. JORDAN (North Okanagan): Figuratively speaking.

MR. McGEER: Figuratively speaking.

MR. R.T. CUMMINGS (Vancouver–Little Mountain): How about Turner?

MR. McGEER: Oh, we're going to tell Mr. Turner about this budget. You know, the Leader of the Opposition didn't think the revenue estimates could be reached. I'm not so sure about that. I think they can. But John Turner is going to have to learn the facts of life about the British Columbia budget, because if you look on page…whatever the page is…I always lose the pages in the budget. I get to looking at the pictures, you know.

The only thing you don't get in the budget is a clear picture of the finances of British Columbia. Beautiful pictures of these children running around with smiles on their faces — I hope that the future will be as bright as the picture would suggest. But the revenue shown for British Columbia — yes, here it is on page 24 — shows that Canada (that's John Turner) is going to have a bill from the provincial government that has gone from $380 million to $643 million in one year, by far the largest item. Mr. Speaker, you know, for Mr. Turner that represents a little present from the Province of British Columbia of $263 million in one year. I'm sure that he'll be pleased to learn about that — almost $1 million a day.

Mr. Speaker, it is my pleasure this afternoon to bring down the seventh Liberal budget. It is a tradition. I haven't brought it in today in a locked case and I'm not wearing a new pair of shoes, but I hope that the budget will be recognized for what it is: a fully balanced budget; a dynamic budget; none of this backward looking, fearful job-security budget the NDP talked about; something which challenges the future; a budget with excitement; a budget with opportunity. These are the features of the seventh Liberal budget, just as they have been the principal features of the six preceding Liberal budgets.

I might add that the Liberal budgets have always differed radically from those of the government of the day, but they have been consistent in purpose.

MR. J.R. CHABOT (Columbia River): They always will.

MR. McGEER: This seventh Liberal budget will follow that very fine tradition that has been developed for growth and fiscal responsibility.

The problem with Social Credit budgets was that they never told the truth about revenue. They told the truth about expenditures, but they never told the truth about revenue.

Mr. Speaker, the problem with this NDP budget is that it tells the truth about revenue but it is not telling the truth about expenditures. The Leader of the Opposition (Mr. Bennett) said that there would be a deficit. I don't think there is going to be a deficit; I think there is going to be an election.

MR. CUMMINGS: Are you ready?

MR. McGEER: Yes, certainly we're ready. The question is: are you, my friend? (Laughter.)

HON. MR. LEA: Are you going through it with the same leader?

MR. McGEER: Are you going with the same leader? After this budget, you should be having second thoughts.

HON. MR. LEA: Are you going with the same party? United they stand; divided they fall.

MR. McGEER: But I will say this: when Premier "W.A.C." Barrett took over finance, he found the old Social Credit budgets in the file, and he came up with a budget that had all of the Social Credit faults and none of its virtues. Since then he has abandoned the Social Credit position of denying factual information on revenues in the budget and has made an attempt to give us honest revenues. The Leader of the Opposition dislikes that approach. He wants to go back to the old days of dishonest revenues. He found that a better practice, but I suppose it runs in the family.

The NDP, on the other hand, has given us a very loaded picture of expenditure, and one that I can't believe could or would be implemented. We'll have a surplus, I'm sure, next year.

The Premier will be able to stand up in the House,

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if he is still Premier, and make the Leader of the Opposition appear foolish once again by showing that he really had used restraint by not using the loaded figures that he's given in the budget, but instead comes up with a tidy surplus. Well, it'll be another fiscal trick, a new twist, but again denying the people of British Columbia the full and straightforward facts about the finances of this province — something which has been denied them for well over a generation.

In some ways, the budget reads like one of these real estate ads, where if they say there's a gentle brook in the back, you know there's a raging torrent eating away the foundation. If it's a "stylish old home," you can bet the only thing that's holding it up is the termites holding hands underneath the beams.

When I read page 6 of the budget, for example, I came across this little item: "The Premier has decided to be an honest man about revenues." Hon. Members, you may recall that in these Liberal budgets of the past, the revenue figures I always gave were greeted with hoots of laughter. How is it possible that revenue figures as high as the Liberals quoted could possibly take place? But again, as my friend from Columbia River (Mr. Chabot) has discovered after a few years, it was just a little case of diddling the figures by a year — just a little case of that, so that what we were being given always was last year's revenues.

That policy was followed right through the Premier's 1974 budget, the one he gave a year ago. I said at that time, Mr. Speaker, in giving what I thought were realistic revenue forecasts, that if I wasn't $250 million closer to the truth on what the revenues would be in British Columbia, I'd buy the Premier and the Leader of the Opposition (Mr. Bennett) a dinner, and I'm not a big spender. Luckily, Mr. Speaker, I don't have to deliver that dinner because the figure I gave of $2,480 million for probable revenues was within 1 per cent of being accurate. I was $308 million closer to the truth than the Premier, Mr. Speaker — the $250 million was just because I was being canny.

The Premier said $2,172 million a year ago, but now he has changed his mind and upped that by about $350 million to $2,515 million. What does he give as an excuse? Right here on page 6 of the budget:

"Hon. Members will note that from the report of the comptroller-general to be tabled in the House today that to December 31, 1974, a number of revenue sources have exceeded earlier expectations. Most notable is the substantially higher level of personal and corporate income tax revenues."

The one item in the budget that you can get with accuracy is personal and corporate income taxes, because the federal government gives honest forecasts of that. It's available not just to the government, but to every Member of this House. To come up with that as a feeble explanation for revising revenue estimates is to take the people of this House and the people of British Columbia for absolute fools. My voice broke, I got so worked up over that. (Laughter.) I'm going to break into tears in a minute, Mr. Speaker, at the way the people of British Columbia are being taken, year after year, by statements in a published document that will go, I suppose, into the archives of British Columbia, and which year after year after year will be a testimony to lack of truth in government. You frown, Mr. Speaker, but look at these year after year after year, not telling the story of the finances of British Columbia.

I submit that this document, basically, does no better a job than has been done in the past. It calls for expenditure increases of $1.1 billion. In effect, what that does is to add two years' growth in the economy into a single year's budget because we've decided to go straight on revenue.

I don't think that's so; I don't think it's going to happen. I hope it isn't going to happen because our Premier Barrett, if he increases spending by that amount, will have thrown gasoline on the fires of inflation and have engaged an unforgivably irresponsible act of the chief stewardship of this province.

Look through that budget — the $1.1 billion increase — and ask yourself this: what have we really got in that budget that represents an investment for the future? There's no wealth creation in that budget at all. Whatever the government has done in the way of moving into the economic sector has been merely to take over existing corporations and businesses.

If they start up a huge bureaucracy like the ICBC, they just displace other people in the insurance industry. If they take over forest companies, they're merely doing themselves what private industry did before. There are no new jobs, no new production.

AN HON. MEMBER: What about Ocean Falls?

MR. McGEER: No new jobs there. You're just keeping the thing going, that's all.

HON. D.G. COCKE (Minister of Health): It would have closed down. The same with Can-Cel.

MR. McGEER: What you've done over there is to trade jobs in private industry for jobs under the government. You've taken revenues, taxes from people who are working and producing, and you've blown them on non-productive programmes.

HON. MR. COCKE: Complete nonsense. Absolute nonsense.

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MR. McGEER: Having Premier Barrett in charge of Finance is like putting a rabbit in charge of a lettuce patch. It wouldn't be so bad if there weren't so many other rabbits that are friends. We're interested in the lettuce production in this province…

HON. MR. LEA: Why are you telling Harvey?

MR. McGEER: …not a feast for the NDP spenders. Rabbits in charge of the lettuce patch.

I did send the Premier a telegram supporting a position in principle with regard to resource revenues in this province. I thought his back needed stiffening before he went down to that bargaining session. He came back proclaiming a victory. As the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) said, there hasn't been a victory like that since Napoleon visited Moscow.

He was only there a day. I think if he had stayed two days he would have come home in a barrel. If one can believe the accounts of the meeting, after giving us his position that he was going back to Ottawa to fight for, he takes off his jacket, puts his arms on the table and says, "Let's make a deal." Like he was right down there from a Kingsway used car lot: a good deal and a good deal more.

After all of 15 minutes of negotiation he was ready to give up. So the federal team retired into the next room while they thought it over, and he was to give a knock on the door when he was ready. They didn't have time to go to the washroom. Tap, tap, tap on the door. "We give up."

He came back to British Columbia trumpeting about his victory. Some victory!

Interjection.

MR. McGEER: Victory? I hope we don't have too many of those.

What should have happened here is that those four western Premiers should have been together with a common position on resource taxation.

HON. MR. COCKE: Sure, go with the rest of them and give it all away.

MR. McGEER: Give it all away? No, no, Mr. Speaker, those resource revenues belong here in British Columbia; they belong here in British Columbia.

If the deal is different in Confederation, if we were to have free trade so that the people of this province had the same opportunities as those in central Canada to appreciate and enjoy the benefits of a common market in manufacturing, if we had equal access to world markets, if there weren't this protection of eastern industry, I for one would have a very different attitude toward the extra wealth that comes to the west because of the richness of the depleting resources.

But when we don't have equal opportunity, when those resources are finite and are diminishing, then we need those revenues now to build the infrastructure of industry in this province and give us in the future the opportunities which we don't have now.

AN HON. MEMBER: Tell that to Trudeau.

MR. McGEER: I have, and I will again.

I think, Mr. Speaker — and I'll say it again and again — that we need free trade in this country so the west can reach its destiny. I applaud the Economic Council of Canada for finally having the gumption to stand up to the protectionist industries of the east and say the only thing that makes economic sense for this country.

I want to go into the details of the Liberal budget, having gone over some of the preliminary ground.

Our budget calls for revenues of $3,134 million — slightly under the Premier's forecast because we're going to give some cuts in the budget, which I'll come to later.

We forecast expenditures of $2,992 million, for a difference of $142 million. That's our predicted surplus. That almost exactly equals the value of the outstanding parity bonds; so we would reiterate our intention to recall the parity bonds in this province and end the floating crap game.

To go briefly through the various departments and what we have in store for them, I'll go through the expenditures.

Minister Without Portfolio. Down to $78,000. That's an 80 per cent cut for him, and I'll come to the reasons why. Well, I might as well say it now. He hasn't done anything useful; he won't do anything useful. It's a time for trimming back, and we might as well start right there.

The Premier's office. We're cutting that $10,000. It's only a small cut but it's symbolic. We're reducing, Mr. Speaker, the salary increases for the executive assistant and administrative assistant from 33 per cent to 10 per cent. This is because they've given the Premier bad advice, and there's no reason why they should get a larger increase than the administrative assistants to the Members of the opposition side.

As the debate wears on and you see the quality of the opposition Members' presentation versus that of the budget, the common sense of this particular economy measure will become evident.

We've also cut $1,000 off the Premier's travel allowance. He's had a nice tourist trip to China; he's been to Europe; he's been to Japan. He's had an opportunity to travel the world. We feel that this year, particularly in view of the care he's got to show

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as Minister of Finance, he needs to be at home and won't require all this public travel money. Now very quickly.

Agriculture. Fifty million. That's down $10 million, and I'll explain why.

Attorney-General. One hundred million. Sorry, Mr. Attorney-General; we've nailed you for $15 million.

Consumer Services. Down $1 million to only $1.5, and I'll deal with that one very quickly again. No performance; just a proliferating bureaucracy. We've got to take the red pencil to the estimates this year and chop out the useless things. We won't eliminate her entirely but just to get it down to a modest increase and not this sort of bloated thing that's in our estimate figures.

Education. This really hurts me, Mr. Speaker: down $38 million, which is 5 per cent.

Housing. Down 78 per cent. We're taking $70 million off the housing budget.

Human Resources. This is the biggest cut of all, $93 million down — to $423 million.

MS. R. BROWN (Vancouver Burrard): You sure don't like poor people.

MR. McGEER: We're coming to the reasons for that. I think you'll see that the budget is very, very generous in that respect, but not profligate.

Provincial Secretary. Down $5 million to $72 million.

Public Works. Twenty million off the Barrett budget to $70 million.

Recreation and Conservation. Seventeen million down there, to $30.4 million.

We've not touched Legislation, Finance, Labour, Lands and Forests, and Mines. We've left those as the same, and we have two increases, Mr. Speaker. The increases come in Economic Development — an increase of 300 per cent, an increase of $15 million there — and cities and municipalities, an increase of $20 million there. So the net change is an increase of $231 million, increases of $35 million for a total expenditure of $2,992 million, and I resisted that temptation to go for the sensation with a $3 billion budget.

Revenues, as I said, are down for these reasons: the first is that cutting into the Human Resources department is going to mean that the federal government pays $46 million less into our Treasury, because part of that is a shared cost. But they'll still be going up from $380 million to $600 million, so we've not put a bad tag on them.

The other reductions are in the fields of manufacturing and natural resources because we have got to build something into this budget for the future. So the tax cut is to eliminate mineral royalties and for the government to go 50-50 in exploration for the resource companies and in research for industry. Those cuts conceivably could cost the treasury $30 million.

The reason why we are putting money into this particular sphere, Mr. Speaker, is because there is a hierarchy of dollars in an economy. Every dollar has equal purchasing power but every dollar doesn't have equal value. The highest tier of dollar value is that which goes into this government. It's in category No. 1.

It is this category that we have consistently advocated be nourished by Liberal budgets. It's a category that Social Credit would never nourish because they didn't understand the value of it.

I will say this: Premier Bennett, former Minister of Finance, understood it for the private sector and he didn't actively harm the industries that wanted to undertake this process of discovery on their own. But the NDP has totally eliminated the top category in the hierarchy of dollars, namely discovery. Discovery is the highest because it leads to growth.

If you discover a mine then at some future time there is production of jobs and wealth. If you invent a computer, at some future time there is growth in jobs and wealth. Nothing equals the value of these discovery dollars.

That's why we provide the tax cut for resource industries that will undertake discovery again — the petroleum companies that will search for new wells and hopefully the manufacturing organizations that will undertake scientific research to invent and develop new products.

The second in the hierarchy of dollars, Mr. Speaker, is that which goes into automatic production. One could cite nuclear power plants, dams, the installing of computers. They are the kind of things which, once the money has been spent and once the labour has been done, then wealth continues to flow from that without any further input of labour.

I think the Social Credit government understood that. They were certainly prepared to invest in dams but they weren't prepared to invest in higher technology nor were they prepared to invest in nuclear power.

Again, the NDP has even killed that side of the economy. And as you go down this hierarchy, Mr. Speaker, at each lower level down, the value depends on what has taken place before at a higher level. If you start with a dollar at the top in exploration, that filters down through the economy and that dollar is turned over again and again and again. Secretaries don't generate wealth and income. People in services don't generate wealth and income. They are further down this hierarchy.

Next in line at the third level is manufacturing. Of course, there's a real wealth here, particularly if it's for export. That money, though it depends in the

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initial instance on the levels above it, nevertheless can be turned over to the levels below.

Then we come to the service industries, and they live off the first three levels. Now we are beginning to get into the area where the NDP expenditures escalate. Nothing in the first two — but service? Yes, sirree! You listen to the Minister of Human Resources (Hon. Mr. Levi) talk about all the services he wants to supply.

Lastly and at the bottom of the hierarchy is the non-service and non-productive items. It's fine to cycle dollars back again but those that depend on the last two don't generate any basic wealth at all and they merely take the Province of British Columbia around in circles.

That's where the budget of the New Democratic Party is concentrated. The top levels have been killed off, and the bottom levels have been boated up to an irresponsible degree. This is why we have to take hold of certain expenditures in the government, and say no. People who aren't at the top-producing end can only have what's available and left over. If you pump 40 to 50 per cent wage increases in at the bottom service levels, you're feeding the fires of inflation and taking away the life blood of the future.

I suppose it's a little like taking all the fruit off the tree. Some of it has to be put back in the ground and then you have got to tend the ground before you get the crop in the future. If you eat it all and you never plant any seed and you let the garden waste, there just isn't going to be an orchard in the future.

This is what's so wrong about the New Democratic Party approach. As the Member for North Vancouver–Capilano (Mr. Gibson) has said on many occasions, "You're wonderful at spending the wealth; you just haven't a clue as to how to create it."

AN HON. MEMBER: What about Can-Cel?

MR. McGEER: Yes, how about Can-Cel? They still don't understand. Where's the new growth there? None….

AN HON. MEMBER: They were going to close it down.

MR. McGEER: …You ought to understand about chickens and eggs.

HON. MR. COCKE: Why don't you read the statistics of B.C.? There's more input.

MR. McGEER: That's the problem, Mr. Speaker; I am reading the statistics. I am also reading the line-by-line budgetary estimates and it makes a shocking story, Mr. Speaker. I can tell you this: when the estimates come up and the individual Ministers stand up to justify line by line what they've done, they're certainly going to get a grilling from me and, I judge, from the other Members of the opposition that cabinet Ministers have never had in this province before. What's in there simply won't stand scrutiny. You'd better do your homework, all of you, and come in and justify every single one of those civil servant increases and every one of the programmes that you put forward. Because they cost high and they benefit low.

Interjection.

MR. McGEER: Mr. Minister, I'm going to be here when your estimates come up, and the rest of you too. Agriculture — that's one, Mr. Speaker, because the Minister (Hon. Mr. Stupich) has applied for a tremendous increase. I said minus $15 million for him, but he still gets 333 per cent increase. That's not bad for one year…

AN HON. MEMBER: How much did you pick up…?

[Mr. Dent in the chair.]

MR. McGEER: Just one vote — 65. That will save the public of British Columbia $61,000. That's your consultant and his office. He's giving you enough bad advice, and I think if we get rid of him there'll be bigger dividends than just the $61,000. So I'll leave your budget because I think that the people of British Columbia have to have their health looked after but they don't have to have bad advice.

Mr. Speaker, Education cut $38 million. But there's still a $163 million increase, 30 per cent in one year. I think the teaching profession would accept a statement by the government, if the government had the backbone to give it, saying: "Look here, there's only so much any government can do in a single year. Thirty per cent is all we can afford now. If things go well, there will be more later. But things must go well."

Housing. Minus $70 million, because I think if the government gets the devil out of the housing business the crisis will be over and we'll start to get some construction underway.

The Minister (Hon. Mr. Nicolson) reminds me of a third-class heavyweight who gets into the ring, gets decked in the first 30 seconds of the fight, gets packed off to the dressing room, comes to on the rubbing table, as he does when somebody asks him a question in the House, and says: "I can lick any man." His answers to the question show ineptitude in the House and an inability to account for the continual mistakes the government is making in the real estate field. It's taking revenue that's needed for other things and using it in a counter-productive way.

Don't fire him from the cabinet. Just leave him in

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the corner with nothing to do and he won't cause any harm.

Human Resources. I know that this will perhaps seem a harsh thing to say, but in one year the expenditures on Human Resources have gone from $284 million to $423 million. In my budget, that's a 50 per cent increase in one year. We want to be generous to the disadvantaged, Mr. Speaker, and a 50 per cent increase in one year is generous. But again, limits must be placed on every Treasury. You can't just go up, because you're in power, and say: "I want the keys to the vault and a shovel."

HON. MR. COCKE: What are you going to cut out?

MR. McGEER: If you spend in this way, taking everything….

HON. MR. COCKE: Specifically, what would you cut out?

MR. McGEER: Well, we're going to ask the Minister…. Heavenly days, you didn't know what was going on; none of you on Treasury Board did. Suddenly you were presented with a bill for $103 million over the estimates you approved and we approved. The thing just got turned away and you still haven't brought any restraint. Look at the budget this year: that $103 million and another $100 million on top of that. You people in Treasury Board have just got to get hold of this; it's a tiger. You've got to get your hands on it and control it.

That Minister (Hon. Mr. Levi) may have the best motives in the world but he has no sense at all when it comes to money. None.

Public Works. We've cut that by $20 million. It's a nice thing to have so many buildings renovated and improved. But, again, a 50 per cent increase in one year is enough, and that's the budget that we provide. If you cut that budget $20 million, it's still 50 per cent above a year ago. Some of these things just have to be postponed a year or two until the Treasury can stand it.

Recreation and Conservation. That's cut $17 million — only a 20 per cent increase in one year. But if the parks all don't get built in one year, it won't be the end of British Columbia. If the choice is postponing that extra park construction for one year or providing the kinds of tax incentives that will start mining, gas and oil exploration going, and scientific t research to build new products and jobs for the future, it's better to make that postponement.

So even though the Liberal budget doesn't provide for 48 per cent increases, it nevertheless provides for increased spending of $600 million. It's balanced. That much we can afford.

The Premier with his budget has not, as the Attorney-General (Hon. Mr. Macdonald) suggested to him, provided job security at all. What he has done, Mr. Speaker, is to have unwittingly provided an insecurity for the future. By spending now all the money at the bottom of the hierarchy of dollar value, he's impairing what should come to the Treasury in the future.

I have before me a budget of the Province of Alberta for 1975.

MR. G.S. WALLACE (Oak Bay): A very good budget.

MR. McGEER: Yes, an excellent budget. I think you should be proud of your colleagues. I'm sure that were we in the Province of Alberta, Mr. Member, we might find one or two minor faults with it, but I will say that while it doesn't have any beautiful pictures from the photographic department, it does have a clear picture of the state of finances of the Province of Alberta.

All across Canada we see spending increases: Quebec, 14 per cent; Saskatchewan, 14 per cent; Prince Edward Island, 14 per cent; Ontario, 14 per cent; Alberta, 17 per cent; Canada, 27 per cent (a little bit of slippage there); but, British Columbia, 48 per cent! Who is feeding the fires of inflation in Canada? Who is the least irresponsible politician in power when it comes to the economy?

MR. C. LIDEN (Delta): The First Member for Vancouver–Point Grey (Mr. McGeer).

MR. McGEER: It is pretty obvious. The leader of the New Democratic Party of British Columbia.

HON. R.M. STRACHAN (Minister of Transport and Communications): You said "the least irresponsible." Don't forget that. I agree with you — that's what you said.

MR. McGEER: Mr. Speaker, may I amend what I said? If ever that Minister and I agree, I will amend my position, for I will know I said something wrong. I hope it is satisfactorily corrected; who is the least responsible politician in economic power today?

AN HON. MEMBER: John Turner.

MR. McGEER: Rivaled only by the former leader, the present Minister of Transport and Communications (Hon. Mr. Strachan) in this province, in his mismanagement of ICBC. There is an inefficient corporation, run with taxpayers' subsidies. Where else in the world is consolidated revenue used to support an insurance corporation? They used to charge the same, and pay taxes. That was only a year ago.

[ Page 303 ]

HON. MR. COCKE: Whom did they pay taxes to?

MR. McGEER: They paid taxes to the government.

HON. MR. COCKE: Everyone then said they were losing money, Pat, so let's don't….

MR. McGEER: They paid taxes. They paid taxes and we enjoyed the benefits of those taxes. Now all we do is to spend the money out of consolidated revenue.

HON. MR. COCKE: That is $200 million invested in our economy, and you know it.

MR. McGEER: Mr. Speaker, they are economic illiterates over there. They are putting the Treasury of British Columbia to the worst use to which a government has ever put the Treasury of British Columbia. We can only hope that before too long there will be a Liberal budget in this province that can be implemented.

MR. G.H. ANDERSON (Kamloops): Don't hold your breath.

MR. McGEER: Only when that day arrives will we have this balance of social justice and economic growth. The people have been denied this opportunity for too many years.

I for one intent to vote against this inflationary budget of Premier Barrett.

AN HON. MEMBER: Oh, oh!

MR. McGEER: We will call on him to repent during the estimates, and we will offer our assistance in trimming the expenditures in making a realistic and growth budget, If he fails to take advantage of this offer, we will await the opportunity to tell the people of British Columbia what has happened during the term that the NDP has been in office, and exhort them to turn them out and never let them back in!

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I will accept the comments of my neighbour on the right that I'm just a little guy and I need a lectern for my notes.

Mr. Speaker, I appreciate the opportunity to present the considered opinion of the Progressive Conservative Party on the Barrett budget.

We are often laughed at and the media has a real time about the little party, the one-seat party in the House. But this doesn't bother us, Mr. Speaker. We have a larger percentage of support in this province than is generally understood at the present time. I wouldn't want to leave this House with any impression other than the fact that many people in this party have studied the budget and given me the value of their comments and advice, and we will attempt to present our position in a moderate and balanced way without some of the rhetoric we heard earlier on this afternoon.

Mr. Speaker, there is no question that this budget, to the man in the street, is mind-boggling inasmuch as it deals in enormous sums of money and enormous percentage increases in both projected revenue and projected expenditure. This must come as a very great surprise to many of the people in the province, because as recently as September 4 of last year the Premier and Minister of Finance was releasing a document which related to budget figures up to that time. I quote from the headline — which, of course, was not the Premier's headline — but the headline in The Vancouver Sun which stated: "Belt Tightening Promised in B.C." A subheading states: "Barrett Backs Inflation Parley."

Interjection.

MR. WALLACE: Mr. Minister, you had your turn on Friday and you'll have another turn at the end. So just let me have my say. But I appreciate the help you're giving me, because under the heading it's also stated: "Capital Spending Curb Pledged." I'm quoting from The Vancouver Sun of September 4, 1974.

"Premier Dave Barrett endorsed today a call for a national conference on inflation. He warned that governments, his own included, must be prepared to take tough measures to lick the problem.

"The Premier, speaking at a press conference where he released a financial and economic review of the province, said: 'B.C. is in good shape financially, but the government plans to cut back on capital expenditures.'"

That was September 4, 1974. I won't read a great deal of this article, but I do feel that there are one or two parts that one should comment upon.

"He said the pace of projects initiated by his government over the past two years will not be threatened, but he cautioned the people of British Columbia not to expect to have 26 per cent increases in expenditure in next year's budget like that of the past two years."

This is all a quote from the Minister of Finance's conference on September 4, 1974 — that particular paragraph that, "the people of B.C. should not expect to have 26 per cent increases in expenditure in next year's budget" — the one we're now debating — "like those of the past two years."

What do we find, Mr. Speaker? We find that if we look at the proposed budget for 1975-6, even on revised figures for last year, the expenditures will be up 28 per cent. The Minister was certainly right when he said we couldn't expect it to go up by 26 again.

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No, sir! It's gone up by 28. When we look at the revenue, Mr. Speaker, we find again for 1976 that even on revised figures projected revenue will be up by 31 per cent. Certainly if you take the original projected revenue for the year ending the end of March, 1975, and compare it with projected revenue for the year which will end in March, 1976, the revenue projected is up by 48 per cent.

This, Mr. Speaker, has to have one asking why the Minister of Finance went through 180 degrees in his financial thinking between September 4, 1974, and February, 1975. Has the Minister of Finance acquired some financial genius in the meantime to advise him to completely refute his own words in a few months? Certainly, Mr. Speaker, I don't think there can be any argument that the very spending programmes which the Minister of Finance said we could not anticipate in September are exactly the kind of programmes that we have before us in this budget.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Those earlier words are non-operative.

MR. WALLACE: Perhaps the Member for West Vancouver–Howe Sound is quoting a famous comment by a former press correspondent, that the former comments in September are now non-operative.

Interjection.

MR. WALLACE: No, that's Ron Ziegler.

Interjection.

MR. WALLACE: We feel this budget should have struck a balance between inflation control, job creation and cost control. In these areas there should have been a more realistic appraisal of priorities.

We agree with the government that trading jobs for inflation is not the solution.

AN HON. MEMBER: Hear, hear!

MR. WALLACE: But we disagree with the government that all of the responsibility and all of the capacity to deal with inflation lies in the hands of the federal government. Certainly, the federal government does have the major role to play through the Bank of Canada and through the control and alteration of interest rates. We accept that. But this budget leaves the impression that the provincial government really can do very little to bring about some dampening of the fires of inflation, and we don't believe that that is so. We believe that government, as the largest employer in this province and as the responsible body to handle such vast sums of taxpayers' money, should have as its primary responsibility the job of setting an example to every individual in the province on the matter of responsible spending and buying.

We in this party were in agreement with the Minister of Finance's statement in September since it did seem to recognize the most frequent comment I hear everywhere I go by citizens, many of them with very little real political interest or very little interest in the details of political life in this province. One fact they know very clearly is that this government sure knows how to spend the money.

We don't have to depend necessarily on what I say or what opposition Members say. I'm delighted that the lady Minister of Education (Hon. Mrs. Dailly) has just taken her place because in a press release on February 26 of this year, the lady Minister….

Interjection.

MR. WALLACE: Oh, dear me! This liberation movement can make speechifying very difficult. I happen to like to approach and address the female sex as "ladies," but I see this is creating a problem. I'll just refer to the Hon. Minister of Education because I sometimes think that male Ministers can be gentlemen.

HON. MR. BARRETT: Do you think a lady Minister can be a gentleman?

MR. WALLACE: No, no. Equality can't be equated with sameness, Mr. Minister. In fact, if I might inject that comment, I think this is the real danger of the liberation movement: we are confusing equality with sameness. But anyway, that's another subject. I had better get on with this speech. I'll quote from the….

Interjection.

MR. WALLACE: The government's trying to throw me, and they're doing a good job of it, Mr. Speaker.

The Minister of Education stated in a press release on February 26: "It is neither reasonable nor rational to expect the continuation of the programme" — she is referring to part of her programme — "when rampant inflation is coupled with the worst recession in years." There it is, Mr. Speaker, straight from a government cabinet member: "…when rampant inflation is coupled with the worst recession in years."

There is no doubt that the government itself certainly recognizes the existence of the very serious problem of inflation. We have to ask to what degree this budget in some way reflects a responsible, balanced way to try and meet the three objectives which it should have, the three objectives I mentioned earlier being job creation, control of

[ Page 305 ]

inflation and cost control in government.

The Minister mentioned the worst recession in many years. I agree that there is certainly recession in the United States, with many unemployed in the automobile industry particularly.

I think, in passing, that it is reasonable to comment that in former years, with the kind and degree of recession in the United States, we could probably have expected by this time to have 10 to 12 per cent unemployed. I think there's some reason for some optimism. Perhaps this province is not as much in the clutches of economic forces in the United States as possibly we keep repeating.

But all the man on the street knows is that he's constantly in a frantic race to keep up with the cost of living. Employees in this province fight legitimately and earnestly for wage increases which appear to put more money in their pocket but they come to the sad conclusion that this does not seem to purchase any more goods. The dollar in net terms is worth less.

Since inflation hits every single individual we believe that this budget should have given meaningful relief to the individual in the most effective way. The most effective way is to put real money back in the employee's pocket. Our proposal to do that would be by a cut in personal income tax which is still the No. 1 source of government revenue.

The government is dedicated to an interest in the individual and calls itself the people's government. It would seem that the best way to help the largest number of individuals to fight inflation would be a tax cut. For those who are paying the lowest level of tax, it would be of real value in that you would be keeping money in their pockets which otherwise they would be paying to federal and provincial governments through the income tax structure.

We certainly believe in the government's desire to provide the necessary social reform, better social programmes, and to expand the range of programmes to those in need: the elderly, the handicapped and the sick.

I might say, from my own personal role in this House over the last few years, that that particular failure of commitment has to be the one that puzzles me the most. One of the strenuous commitments this party made in opposition was to meet the needs of the elderly person, and particularly the elderly, sick person who required some measure of care. I sat in this House, first of all as a Socred and later on as a Conservative, listening to this party repeatedly committing itself to fill the tragic gap in social need which was being callously ignored by the government of that day.

I would just like to quote from Hansard in the very first session I was in this House when the present Minister of Finance (Hon. Mr. Barrett) was Leader of the Opposition. On January 26, 1970:

Of course, one of the things that's also missing from the throne speech is the chronic-care hospitals promise. You remember that promise? That was good for an election in 1965, '60, 1963. As a matter of fact one of the Members who used it as a lead item in his '63 campaign and was elected at that time lost in '66 because he didn't fulfil that promise, but he is back in the House, Mr. Speaker, and I hope to see him on his feet fighting for chronic-care hospitals as soon as possible. But some of the Members on that side of the House, Mr. Speaker, are committed to the philosophy, "why ruin a good promise by doing something about it?" They've been using these promises year in and year out and hundreds of people, thousands of people, are faced with economic ruin because of the fantastic cost of chronic hospital care.

That was the present Minister of Finance's comment in the throne speech of 1970. I would just mention in passing, the quote from the debate of February 10, 1971, when the present Minister of Health (Hon. Mr. Cocke) said as follows:

Most of my remarks so far have referred to all retired British Columbians. One of the sad facts of life is that illness and chronic health problems in many cases are unavoidable during the retirement years. We've repeatedly advocated government action to provide adequate chronic-care facilities in British Columbia. That need still exists and is still a top priority.

This government has, it claims, something of the order of $700 million more to spend in the coming fiscal year. Quoting the papers that are attached to the budget on page 33: "We estimate there is a need for approximately 6,000 intermediate care or nursing-home beds in British Columbia."

Mr. Speaker, we have $700 million to spend and we cannot, apparently, find it in our hearts to look after 6,000 of the most deserving, the most needy, the most blatantly ignored senior citizens in our midst. I'm frankly puzzled because, in fairness to this government, they have met many of the promises they made on the election platform. But I have to ask the question: is the ideology and the political mileage of an insurance and automobile insurance programme more important than looking after the serious social and medical needs of 6,000 senior citizens? I think that is a tragic lack of sense of priorities, particularly when, as I've tried to demonstrate, for at least five years — from the time this government was in opposition — it made the commitment to fill the tragic gap which was ignored by the government of that day.

I never bring forward proposals in this House without attaching the tab, and I will talk more about this during the health estimates. I have recently visited Alberta and had a very good and accurate up-to-date look at the costs in Alberta. At the present time, for intermediate care, the government is paying

[ Page 306 ]

a day and the patient pays $3 a day. Based on our 6,000 citizens, some of whom are covered under social assistance programmes at the present time, I would say that the operating cost would approximate $25 million a year for the 6,000 senior citizens I'm talking about.

I just happen to think that this is a most crying need. It's particularly disappointing that a government so dedicated to helping the poor and the needy and the underprivileged should be so tragically neglecting 6,000 very deserving senior citizens who are not asking for handouts. They're only asking for economic justice. Any other kind of citizen who finishes up requiring hospital care of some kind in this province, whether it's extended care or acute care, pays a very minimal amount of money out of their pockets. But this group of 6,000 pays the whole shot. I would like to ask the Minister of Finance, surely, in this gluttonous budget with gobs of money at $10 million and $20 million and $30 million a crack, surely he can find at least part of the $25 million I'm talking about to pay only what the recipients justly deserve: some government share of the cost of these facilities. This government frequently talks about the poor. They're a segment of society which any government must be committed to helping.

You know, Mr. Speaker, I think we have to keep our sights on money values and wages these days. I heard a newscast on the radio last night that dockworkers are negotiating a wage increase, which they have every legitimate right to do. I understand that if they come close to getting what they're asking for, the average wage of a dockworker will be $22,000 a year.

Mr. Speaker, it seems to me the Socreds certainly knew how to look after the rich, and the NDP are conscientiously trying to look after the poor. But I'm beginning to wonder who's really concerned enough to look after the middle-income earner and give him or her economic justice in these inflationary times.

Even with the effort of this government to help the poor and the less fortunate, let us look at the No. 3 source of government revenue after federal sharing programmes. That is sales tax, which brought the government $325 million in 1975 and is calculated to bring in $480 million in the next fiscal year. We all know that by way of the sales tax you pay your 5 per cent, whether you're rich or poor. The burden on the low-income earner and those on fixed incomes — people paying 5 per cent on clothes or furniture or soap or essentials, which we all have to buy. Surely a reduction of sales tax, again, would be most beneficial to low-income earners and would be a realistic measure to protect them against inflation.

We note in this budget speech, Mr. Speaker, a tendency to justify tax increases by comparing ourselves with other provinces. I think if we take the trouble to compare ourselves again with Alberta, we'll find that Alberta does not have a sales tax.

Alberta has recently used its surplus to reduce personal income tax, and our party in this House would have chosen to alleviate inflation for a large number of citizens by reducing personal income tax and by reducing sales tax from 5 per cent to 4 per cent, with the long-term objective of reducing it progressively until it is non-existent. This reduction of income and revenue at this point of time would have reduced projected revenue for 1976 by $96 million.

The government budget projects increased revenue of $1.046 billion in 1976 over the estimates of 1975. We think that this is highly inflationary and that with the measures of tax reduction and sales tax reduction, the kind of realistic goal of really helping the individual citizen would be realized.

I think it's interesting, Mr. Speaker, to take a look at the source of revenues and the way in which the position of certain main sources of revenue has been rearranged in the 1976 budget compared to the 1975 budget.

In the year ahead of us, personal income tax tops the list with $655 million projected, as compared to $474 million last year. Income from sharing of joint plans with the federal government will be $643 million compared to $380 million, and for the future year, 1976, sales tax is the No. 3 source of revenue, which it was last year.

But when we get to the No. 4, 5 and 6 spots, Mr. Speaker, it is corporation tax now and it used to be Lands and Forests that was in the No. 4 spot for the source of revenue. Petroleum and natural gas, with $230 million projected for the next year, is in No. 5 spot, and motor fuel, including gasoline, is in the No. 6 spot.

Liquor is now the eighth source or revenue, projected to provide $155 million instead of $108 million. Since the government has talked a great deal about resource revenue, we should stop and ponder the fact that Lands and Forests, which used to be the fourth source of revenue to the province, in the coming year is source No. 7.

We also have the admitted statement by the Minister of Finance that revenue from mineral royalties is only $15 million this year and will only be $9 million next year. If there was ever a case of putting the cart before the horse, then his comment on mineral royalties had to be it. He said that the small amount. of money from royalties proved that they were not punitive. What it really proves is that the mining industry is in a deep recession. If it can only produce minerals that in turn provide $15 million in royalties this year and $9 million next year, it is a reflection of the very serious financial situation in the mining industry as a whole, not the other way around. If the Minister could give us the argument

[ Page 307 ]

that the mining industry was buoyant and only paying small royalties, there might be some sense in the Minister's comment. But to suggest that the small royalty revenue indicates all is well and that the industry is not being over-taxed I submit really has to be mixing up cause and effect in a tragic way.

The Minister of Finance himself has often said in this House that he's just a country boy. That's one of his favourite comments — that he doesn't understand some of the intricacies and complexities of government or finance. I think that in this budget there are many areas where, unfortunately for the people of British Columbia, he's demonstrating that fact.

I feel that I try to speak for the vast majority of the individual men and women in British Columbia in reading this budget — the ones who are squeezed in the middle as a result of the budget. I say the middle because the Minister claims to have adopted the poor of this province as his own. His recitation of the original labour, Christian-socialist, CCF and NDP concerns for the underprivileged was certainly the most attractive part of his address, because it is the only identifiable and only consistent legacy of the democratic left in British Columbia. The problem as we see it is that the Minister of Finance has neglected the legitimate interests of many other citizens — the middle group, as I mentioned.

In the former government we saw a real concern to build close friendships with big business. We don't deny that big business should get a fair deal in British Columbia, but big business should not be the only sector to get a fair deal. It seems to me, Mr. Speaker, that what both the Minister of Finance and the Leader of the Opposition (Mr. Bennett) have failed to understand is that the only way that big business, small business, the ordinary guy, the working poor and all the middle-income people in B.C. can do well is if everyone in British Columbia does well.

We feel that this budget will make many of the people of this province doubly suspicious of this government, because they see the tremendous amounts of money being spent, much of it on administration — I'll touch upon that in a moment — and they feel that in these great expenditures the government has never heard of management and administration, much less cost control. This budget would seem to make the message loud and clear: despite the Minister of Finance's statement of September 4, 1974, the government has no intention of shutting off its inflationary expenditure tap.

Our proposal would be to allow the Minister of Finance a 20 per cent increase in expenditures for the fiscal year 1975-76, over and above the revised estimates for 1974-75 — and that's a significant concession in itself, in view of the cost overruns which we feel cause the people of this province to wonder about the management ability of this government.

In passing, Mr. Speaker, I might say that I was fascinated by one paragraph when the Minister of Finance, as he likes to do, was castigating these terrible federal politicians. On page 6 of the budget, he's complaining about the indexation of federal income tax, which was implemented without consultation.

HON. MR. BARRETT: The Tories wouldn't do that.

MR. WALLACE: Well, actually the federal Tory position is clearly in favour of the indexation of income tax, Mr. Minister.

HON. MR. BARRETT: They want a consultant.

MR. WALLACE: I agree that on the lack of consultation, you have a beef on that aspect, but what I'm saying loud and clear is that the Conservative opposition in Ottawa has strongly supported indexation of income tax. Mr. Stanfield was one of the ones who spoke early and loudly about the fact that the first beneficiary of inflation is the government, which takes in more and more tax on increasingly higher wages unless it elevates the tax brackets for the appropriate groups which are earning larger gross incomes.

Mr. Speaker, the interesting thing on page 6 is that the Minister of Finance states:

"As the result of the federal government's action it is estimated British Columbia will have to forgo about $65 million in income tax revenue in 1975, $100 million in 1976 and $185 million in 1977 at current rates of inflation."

Then comes the very revealing sentence, Mr. Speaker:

"The cumulative reduction in revenue in the five years 1974 to 1978 inclusive is expected to be in the neighbourhood of $700 million."

— which I think, Mr. Speaker, reveals an acceptance by this Minister of Finance of a continuously accelerating rate of inflation. If you look at the sums of money which he anticipates we will lose provincially because of indexation of person income tax by the federal government, when he looks ahead at 1977 and 1978, it surprises me that he shows such a lack of confidence that inflation is going to do anything else but continually get worse.

HON. L. NICOLSON (Minister of Housing): Leave the twisting to them — that's not your act.

MR. WALLACE: That isn't twisting, Mr. Minister. If you just want to calculate the figures you'll find that the Minister of Finance can only come up with this figure of $700 million in the four-year period by

[ Page 308 ]

assuming that inflation is going to continue at least at the rate of the present time and maybe more. We again feel that the No. 1 problem for this province and for Canada is to try and deal with inflation and that the best example can be set first and foremost by governments at all levels.

I got away from my notes, Mr. Speaker. I was saying that we feel a 20 per cent increase of government expenditure for the next year would be perfectly reasonable. We see it in the light that we would be allowing 12 per cent for inflation, 3 per cent for population growth and 5 per cent for real increases in the quality of services. So we would suggest to the Minister of Finance that he roll back the expenditures of this government to $3 billion in the fiscal year 1975-76, with the $225 million saved going to a reduction in the rate of provincial income tax combined with federal-provincial income tax of 20 per cent of this total — combined tax equivalent — which would be a reduction of the equivalent of $100 in income tax for every man, woman and child in B.C.

The posture switch we see adopted by the Leader of the Opposition is worthy of comment in this budget debate. We feel that Social Credit and big business should cease to be so engrossed in the game of deceiving each other for their own exclusive political or financial advantage and mutually deceiving the people of the province that any policy, except a return to the good old days of Social Credit, will bring economic ruination of this province. We feel that Social Credit and big business….

HON. MR. BARRETT: Shocking!

MR. WALLACE: …will have to realize, in their own interests, that those so-called good old days are never going to return again. We feel that Social Credit and big business will have to grasp the fact that what the majority of the people of B.C. want is a combination of rational, economic development plus social, capital-based, qualitive improvements in their communities, their working environment and their daily lives. We do feel, however — and I am repeating what has been said earlier this afternoon — that there is a lack of specific incentives in a….

Interjection.

MR. WALLACE: Oh, Mr. Minister, I am not too concerned about who is in the House or who is out of the House. The fact is that I am just concerned that I am putting into the record of this House the position myself and this party.

Mr. Speaker, our position is that the budget does not provide an adequate number of specific incentives for our oil and gas, mining and forest industries to give an effective stimulus to job creation and to provide for future provincial revenue. We believe, in regard to the use of social capital, that we should be — we will be, in fact — proposing a series of regional social development funds. These funds would be the windfall profits from the B.C. Petroleum Corp. and other government enterprises which, we feel, should not be put into one big bag and called consolidated revenue. It's all too easy for the money to be used in the manner which we have already criticized: namely overspending by administrative costs in government departments.

Of course, I have to think again about the Province of Alberta where, even if the price of natural gas rises again, it is folly, in our view, to cover increased annual operating expenditures from what is eventually a declining resource.

As we mentioned in the throne debate, social and community development in some of the regions of our province under the former government were behind. But the regions cannot catch up on their legitimate needs in qualitative improvements by the unrealistic and tricky-dicky municipal-assistance programme which the Minister has proposed in the budget.

We believe, first of all, that the budget does not even say now much the municipalities are going to get. One thing I do know, Mr. Speaker: when the Minister of Finance first talked about the likely increase in natural gas exported to the United States, he anticipated a $180 million windfall. He stated that, in his view, it would be very fair and equitable for $60 million to go to the federal government, $60 million to the provincial coffers and $60 million to the municipalities. In my view, that was a clear recognition: one, of the needs of the municipalities and, secondly, that something of the dimension of $60 million would not be out of line.

What do we find in the budget? Now we find a very iffy proposition. We find that if the price goes to a certain figure, there might be this much money; and if it goes to another figure at another date, there might be that much money. We just feel that that is not fair to the municipalities. The record is very clear.

It could not be more clear than right here in the City of Victoria where we are debating the budget, where municipal workers are on strike and where the percentage increase they are seeking is something in the order of 46 per cent. Certainly in my riding of Oak Bay exactly the similar problem exists, where even an offering by the municipality in the order of 20 per cent is being rejected. So the municipalities, without any question of doubt, are facing the same inevitable rise of costs which represents the inflationary economy we are living in.

The Minister of Finance, as I said a moment ago, recognized this need for financial aid. He is on record as having made it plain that he might consider as much as $60 million to the municipalities. The

[ Page 309 ]

statement in the budget really leaves the municipalities very doubtful as to how much they will receive. To be fair, I commend the Minister of Finance for at least trying to put the arithmetical formula upon which grants are based on something not five years old. I think that that is certainly a measure to be commended.

We believe that there should be regional social capital funds administered by the regional districts and the municipalities themselves.

We are concerned about the attitude of the government and the official opposition to business. It seems to us that we are looking at two extremes: the official opposition would be very happy to behave advantageously for the benefit of big business; this government, on the other hand, is so suspicious of business that we find that all they can do is increase corporate income tax when already the revenue is overflowing into the coffers of this government.

People say that the Premier is bad for business and bad for the economy.

HON. MR. BARRETT: Who says that? Name names.

MR, WALLACE: Of course, we have the Leader of the Opposition, who claims he would be good for business. But the question is: "Whose business and how good?"

MRS. D. WEBSTER (Vancouver South): What kind of business — monkey business?

HON. MR. BARRETT: Yes, whose business?

MR. WALLACE: Mr. Speaker, I said we would try to be balanced, fair….

HON. MR. BARRETT: Unbiased.

MR. WALLACE: I did not say unbiased, Mr. Speaker. (Laughter.) If I was a man who was smart enough to be unbiased, I wouldn't be in politics in the first place.

HON. MR. BARRETT: Only the dead are unbiased.

MR. WALLACE: We believe that the reduction of corporate income tax for small businesses is a sound measure which we heartily endorse. As I said a moment ago, we believe that the calculation of the per capita grant to the municipalities is sound. But these proposals which we can commend are somewhat small in number compared to our concern about the budget as a whole.

For the great majority of the individual people of the province who must finance what I have described as a gluttonous budget, for these people, it is an unacceptable budget. What would be sensible, responsible, progressive government should have addressed itself to certain areas at this time. We would just like to list the way we would tackle the present situation.

First of all, it would have instituted meaningful incentives to create jobs, promote rational economic and social capital development and lay the groundwork for future economic activity which could be planned and phased.

Secondly, and equally important, we believe, it would have set spending guidelines and spending limits across the board for all departments of government and would thus have brought in effective measures of cost control.

I would refer back to the Treasury memo, which I quoted in the throne speech, which showed that the Treasury Board was concerned about departmental spending. I would hope that perhaps, as the Minister winds up this debate, he will tell us whether in effect, come midnight on March 31 of this year, there will then be an opening of the floodgates and departmental civil servants can throw the Treasury memo out the window and get back to the kind of spending which the memo described as "spending at the top of the cycle."

Our third proposal would have been to give measurable relief to all those who work in British Columbia together with their families, those who are constantly buffeted day by day by the vicious and continuing escalation of inflation. We would have attempted to give recognition of the fact that we realize how seriously inadequate is the present budget to deal with the maintenance of the purchasing power of the dollar. We feel that the province needs employment now and it needs planning for the future. It needs cost control and it needs effectiveness of expenditure. It needs inflation relief for the people and it needs economic stimulus, which we believe could be provided by a cut in personal income tax.

We ask the question: what does the budget actually do in relation to these three essential objectives? We feel it has offered minute programmes for economic stimulus and job recovery. We feel that what the Premier has offered in the way of programmes out of a $3.25 billion dollar budget are really peanut programmes. These, coupled with the lack of incentives for realistic productive investment, will really help very little in the battle against unemployment, In fact, Mr. Speaker, I think it's quite reasonable to comment that when the Minister of Finance outlined the $70 million surplus to be spent in job creation, essentially the only new measure is the special employment programme for the lumber section of the forest industry to which $15 million is allocated.

[ Page 310 ]

We have $20 million for a student employment programme which is a continuation of what happened last year. We have a continuation of the Community Recreational Facilities Fund, which we completely approve of and support, and always have done. And we have an item which I'd like to touch on later: $20 million for the ferry capital expenditures fund. But, essentially, that $70 million surplus, which is to create jobs, creates only one new programme.

Our second criticism would be that the budget has encouraged the departments and agencies of the government to continue to indulge in hopelessly excessive increases in their expenditure. In fact, we would make the comment that, in the race between John Turner and Dave Barrett as to who can abstract the most money out of the pockets of the people of B.C., it is now obvious that Dave Barrett has clearly won.

HON. MR. BARRETT: Who said that?

MR. WALLACE: I said that.

HON. MR. BARRETT: That's another biased comment.

MR. WALLACE: Certainly the net effect of this budget, even with income tax indexing on a partial basis to adjust for increases in the cost of living, will be to raise the tax load on the people of this province and really deny them even the slightest measure of inflation relief.

We regret that, in the budget, the Premier sets up Ottawa as the strawman in his arguments. I would fault him, not for his target which justifies criticism, but for his political incompetence in dealing with Ottawa, since his so-called strategy is a sham. We don't think we should forget to let the people of this province know that fully one-half of the increase in this budget — one-half — is coming out of the individual men and women of British Columbia. This is not an election budget, Mr. Speaker, and in terms of where it's likely to leave B.C., it's not even a pre-election budget.

I could offer one backhanded compliment to this government. That is that everyone in British Columbia is expressing amazement that this amount of money can be extracted from the taxpayer in the fiscal year 1975-76. Everyone is amazed that by various devices, including the squandering of windfall natural gas profits, there will be enough revenue to cover the most extravagant expenditure in government that B.C. has ever seen.

Interjection.

MR. WALLACE: Of course you're extravagant. Everyone in the province is talking about this extravagance of government.

MR. PHILLIPS: Extravagant!

HON. MR. BARRETT: You don't make sense. Not enough money here, not enough money there, but don't be extravagant.

MR. WALLACE: Well, if you'll just hold on, Mr. Minister, I'll explain how we would readjust and reallocate spending and fund raising.

HON. MR. BARRETT: Wild, irresponsible opposition. Not so much from you, but from them.

SOME HON. MEMBERS: Oh, oh!

HON. MR. BARRETT: At least he sticks around the House.

DEPUTY SPEAKER: Order!

AN HON. MEMBER: Where's the powder? (Laughter.)

MR. WALLACE: We feel it's time for this government to take a serious look at the criticism that we're making and perhaps back off from some for the administrative expenditures at least. I'll quote you a figure in a moment.

For example, as I read the budget in Education, it takes an additional $2.50 of administration to provide $1 in services, direct services, to the recipient. This, in a specific example, is what I'm trying to state. I'll give you some of the figures in a moment, Mr. Speaker. We believe, sincerely, that the government has lost sight of the fact as to how much is being spent in departmental administration and in bureaucracy which really produces very little direct advantage to the individual taxpayer.

We feel it's bad enough that the citizens are burdened by John Turner.

Interjection.

MR. WALLACE: He's the debonair domo of the eastern Canadian port, now a Liberal establishment. (Laughter.) But I don't think the Minister should laugh, because I haven't got to my description of him yet.

We feel that the burden of John Turner is compounded by the free-spending, happy fiscal warrior in Victoria, backed by a department stuffed with cast-off NDPers and shopworn Socred fiscal hacks.

SOME HON. MEMBERS: Oh, oh!

[ Page 311 ]

HON. MR. BARRETT: The last part is a little bit rough.

MR. WALLACE: Well, Mr. Speaker, I'm indulging in a little poetic licence here. If the Minister of Transport and Communications (Hon. Mr. Strachan) is extending me the honour of comparing me to Robbie Burns, then of course that's a compliment indeed.

HON. MR. BARRETT: If you two guys had your way, we'd have everybody on porridge!

MR. WALLACE: We feel, Mr. Speaker, that this government is imprisoned in the old socialist credo that people will only be truly happy when the government takes more. We feel that in fiscal measures the people are only happy when the government takes its fair share and not a nickel more. We believe that the budget demonstrates, in fact, that this Minister of Finance has beaten John Turner in the tax grabbing race.

I quoted a moment ago the financial figures from the Department of Education which, as we see it, suggest an increased administrative cost to provide further service to the recipient. I have to recall the way in which the education budget was handled at this time last year. We debated the budget, and within a very few weeks the Minister of Education had announced further large additional expenditures. I'm not debating how accurate or how necessary they were, but it's still absolutely incredible to me that we could spend a day or two debating one department and decide how much it required to provide the service in the province and within a few weeks have the Minister admit that something in the order of $20 million more was needed for school boards and $4.5 million for universities, and subsequently another few millions for colleges. I just hope that our education budget is not going to be the same mockery this year and that the figures that have been presented to this House, Mr. Speaker, which show an increase of 23 per cent, really have been calculated in a realistic, meaningful way and that this, in fact, is the sum of money which this government feels will meet the need of education in this province.

To amplify the kind of charge I made a moment ago, let me say that the cost of administration in the estimates of education is up from $3.9 million to $6.3 million. The staff, Mr. Speaker, in the Department of Education, in my estimates, increases from 177 members to 270. And that's not all. We've seen, in press releases and other areas of the Department of Education recently, a surprising amount of uncertainty and confusion at an administrative level, I'm referring to the termination of employment of people like Dr. Knight and, subsequently, of several members of the research and development section which he was heading.

I can tell the people on the other side, through you, Mr. Speaker, that if they're not impressed by the fact that every member of the public is worried about your administrative expenditures, I'll tell you something else they're all worried about, and that's the state of education in this province. We can talk about gobs of money going into an increased educational expenditure, but not one word about the quality of education or what the end product is for all the money that we're spending. I would suggest that if that party chooses to remain indifferent to the concerns of the people in this province about these two very vital public issues….

Interjections.

DEPUTY SPEAKER: Order, please! It's a little too noisy for the Hon. Member.

MR. WALLACE: This means I have to shout louder, Mr. Speaker.

Mr. Speaker, I have pointed out that the administrative costs of education in the estimates are up by around 50 per cent at a time when the Department of Education seems to be adrift and sadly lacking in any clear definition of where education is going and what the basic attitudes and policies of the department are.

The staff, as I said, will be increased from 177 to 270 in administration in the Department of Education, and the budget will be up by 50 per cent.

Then, Mr. Speaker, it's interesting to look at the research and development part of the budget, which I referred to a moment ago. Not only have we dismissed practically all of the members who were employed in that capacity but, lo and behold, the budget shows that estimates of expenditure for research and development will increase from $750,000 to $2.3 million.

[Mr. Speaker in the chair.]

Mr. Speaker, I was just asked today by a member of the media whether I would support a call for the resignation of the Minister of Education. I said that at the present time I'm just as concerned as most parents across this province as to what on earth appears to be going on in the Department of Education. In trying to be fair, it is conceivable that we have not heard both sides of the story to the degree that we can make a fair judgment of the performance of this Minister of Education.

But I will say that education in British Columbia right now is causing many people a great deal of anxiety and dissatisfaction and confusion. Unless this Minister in the debate on her estimates can give us far more satisfactory answers to many of the questions

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that are being asked than she has given until this point in time, then I would certainly seriously consider supporting statements that have already been made that perhaps the Minister should resign.

If there is one area of government expenditure which appears to be giving us very poor end products for the money that's being poured in at the front end, it has to be education. I'm not suggesting any revolutionary return to some of the rigid policies that have marked education in the past, either in this province or in other countries I could mention, including my own originally. I think that there is a clear challenge to blend the basic requisites and requirements of education with an imaginative and innovative approach. But at the present time there's serious concern in all communities about lack of direction and specific delineation of what the Department of Education is doing with the system. This is happening, Mr. Speaker, at a time when larger and larger sums of money are being expended in our educational system.

Interjection.

MR. WALLACE: The Minister of Finance quite rightly criticized the fact that I would cut income tax and yet would want more programmes. I think it's fair to say that we would raise more money in different ways.

I'm really surprised that the Minister of Health (Hon. Mr. Cocke), who is most sensitive to taxation and programmes that spend the tax dollars, and who is well aware of the ravages of smoking which must inevitably cause tremendous costs in our hospital and health services, has not had more effect on the Minister of Finance, when, for example, they discussed what tax should go up and when they decided to put 2 cents on a gallon of gas.

I would suggest that nobody has to smoke cigarettes. We've got a miserable little tax of 8 cents a pack on cigarettes.

Interjection.

MR. WALLACE: Eight cents a pack, I think, Mr. Minister.

HON. MR. BARRETT: Does your wife smoke?

MR. WALLACE: No, and I don't smoke.

HON. MR. BARRETT: Well, it's easy for you. (Laughter.)

MR. WALLACE: But I do drink. I must say that I enjoy Haig scotch; I think that I am contributing my fair share to the revenue of this province.

Mr. Speaker, just a quick statistic: deaths from lung cancer in 1972 in British Columbia were 541, and in 1973 there were 596. Some of the recent unofficial figures show that lung cancer is rapidly increasing among ladies — sorry, females. I have to watch that use of the word "lady."

But seriously, it seems to me that there is an element of — I hesitate to use the word "hypocrisy" — but the 2 cent tax on gas which is being added seems to me to be put forward on the claim that it will get people out of their cars and onto the buses. One of the other statements made by the Minister of Finance was that you can get out of your Cadillac and use a smaller car.

Now, Mr. Speaker, gasoline went up last year by about 8 cents all of a sudden during the Arab oil crisis and there has been no appreciable change in the motoring habits of the public. Furthermore, it is not possible or easy for many employees to utilize the bus service. The bus service is quite inadequate, and in many parts of the province it is vital that people use their motor vehicles.

I think this is just another burden on their attempt to fight the cost of living by putting another 2 cents on gasoline. I would think that it would make much more sense to raise the tax on cigarettes, which presently brings in $21 million a year at 8 cents a pack. You could certainly lay your hands on another $10 million by increasing it to 12 cents a pack. This is one of the areas where I would like the Minister of Finance to know that we just don't suggest expenditure of revenues without saying where you get the revenues.

In the area of housing, I think it is important to commend the government for attempting to help the renter in this province. But I do feel that we were indulging in a little bit of semantics when the Minister of Finance referred to an "income test" when I questioned the validity of using the phrase "means test." The fact of the matter is that I would like an explanation as to why the renter's grant is to be related to income when the homeowner's grant is the same for everybody, whether you are a poor man or a millionaire.

It seems to me that there is an element of confusion here or a double standard on deciding on this item of the budget. I think, frankly, that more could have been allocated to the renter's grant. The Minister of Finance, in introducing the budget, quoted what I thought was a very pitiful example — that a husband and wife with two children, if their income was $4,000 a year (which is the poverty level) would receive $100 a year. I would think that if I were in the position of the breadwinner, with a wife and two children trying to get by on $4,000 a year, to receive $100 a year to help pay for shelter would seem to be a rather pathetic contribution.

So, here again, we feel that priorities have not been allocated in the best possible way. While we are

[ Page 313 ]

complaining about excessive expenditures in certain areas of the budget, we certainly feel that in relation to the renter's grant there could have been a more generous approach taken to the low-income level.

We feel that there are other areas deserving of comment, particularly the proposed bank which the government will create. I would like to talk at a little more length on that. With regard to the question of the bank — or whatever the Minister of Finance proposes to put in place of the bank — the Minister of Finance, in describing in the budget his reason to seek a new financial institution, has outlined some of the basic reasons. Certainly we would go along with the idea that anything that creates competition — realistic competition, demonstrable competition — is worthwhile for all the depositors and borrowers in the province.

But we are very nervous to envisage a financial institution where many of the financial affairs of arms and agencies of government will be left with no choice but to deal in their day-to-day business with this new government-sponsored institution. And as we have complained in the past about this government setting up various boards and corporations on which it appoints members of this party and Ministers of this government, we see the same potential danger, or we see a potential danger, depending upon the way in which the new financial institution is to be set up. Time and time again in this House, serious concern is expressed about Crown corporations and the degree to which Ministers of the Crown serve on these corporations or serve in other similar agencies, such as the forest products board which is to be set up under legislation from the fall session to include at least one MLA.

We would hope that when the Premier and Minister of Finance winds up the debate — no, that's wrong. I hope that someone on that side of the House will certainly be able to give the people of the province, and certainly the Members of the opposition, some better insight into what exactly this new financial institution will be all about.

There have been many vague and general statements made by the Minister of Finance, and we can't say strongly enough how uneasy we are that the new proposed institution may leave some very serious potential for political manipulation in an area which, as recognized in the British North America Act, has to be very clearly under the supervision and control of the federal government. I can only assume as a layman that the Minister of Finance believes he has found some way, in practice, to get around some of the restrictions of the federal legislation. At any rate, because of the uncertain and non-specific statements which have been made, I think it would be very much in the interests of the people of the province if the Minister of Finance would very shortly give this House some of the details of his new, proposed institution.

I think it's a little unfair that the Minister should be so harshly critical of the banks, who apparently have a profit of 23 per cent, when we look at some of the figures in this budget — of the tremendous increase in money which has been taken from the taxpayer by government and which is, in many departments, as I said earlier, to be used up in additional administrative expenses.

For example, the revenue, even over revised figures, is up 32.3 per cent by 1975, and in 1976 we are looking at another estimated increase of revenue of 28.7 per cent. So it would seem to us, as I have said many times and purposefully, that if the banks are making a healthy profit, the Minister of Finance is certainly taking a very large, unhealthy slice of wages and salaries from the people's pockets in this province.

Again, to reiterate the sales tax situation in 1975, by the end of March this Minister will have taken 22.6 per cent more in sales tax, and this will go up by the end of the fiscal year 1976 to $480 million, an increase of 47 per cent over the original estimate for 1975.

We feel that this government, in regard to its taxing practices and bureaucratic waste, is very much in the same league as the federal government.

The NDP used to campaign against corporate welfare burns. Well, we just think that the NDP in British Columbia has become one colossal governmental welfare burn. But on the other hand, Mr. Speaker, I should interject that we don't believe that the people of this province, despite their concern, are about to sell their souls to the devil just to put Social Credit back into power in this province.

AN HON. MEMBER: Hear, hear!

MR. WALLACE: But we wonder, in light of the….

MRS. JORDAN: You sound nervous.

MR. WALLACE: Nervous? Who's nervous?

We feel, in the light of this budget, that this government, by its actions and its financial proposals, really cannot claim to be a people's government because, like so many other governments, you are so busy taxing and spending and grabbing and wasting. You are really just another government around this province.

HON. MR. STRACHAN: Be fair.

MR. WALLACE: I am being fair in terms of what people tell me.

HON. MR. BARRETT: Mincome, Pharmacare.

[ Page 314 ]

AN HON. MEMBER: Community services. Oh, your people are wonderful.

Interjections.

MR. WALLACE: Well, that is only part of the picture, Mr. Speaker. I've said many times in this House, and I say again, that many of these social programmes certainly deserve our support and would be continued, I assure you, by a Conservative government. And they cost money.

But, Mr. Minister, through you, Mr. Speaker, at this late stage in the afternoon it's obvious that I've missed the point that while you have to tax…. Rather, I should say that I have failed to make my point. I've failed to make the point clear that…

MR. R.H. McCLELLAND (Langley): Right on three times now.

MR. WALLACE: …the function of government is to tax in order to raise the revenue for two main purposes: economic development of a realistic nature that will, in fact, create real wealth and create more dollars to provide the other function of government, which is social reform and social programmes.

It is sad if I have missed making the point that the government is failing to achieve these goals simply because it is spending so much money on its own internal administration. We do not, in any way, reject the concept that the disadvantaged and the sick and the elderly and the poor are entitled to be assisted through programmes of social reform which have to be financed by the taxpayer. That certainly is basic. What we are trying to say is that this government is over-taxing and overspending in ways which do not realize the goals which I mentioned a moment ago.

We certainly may be perceived in this House, and in the press gallery, to be just a little party; although, Mr. Speaker, even at that our polls show a substantial and steady 20 per cent of support. Even if we are a little party, I would have to ask if in any democratic society one can afford to treat lightly the voices of those who are supported by 20 per cent of the voters. We feel that if the election comes this year, or if it comes next year, our party will be instrumental in leading a revolt of a broad-based group of citizens and taxpayers of this province who are fed up with the socialist excesses that I have mentioned, and the Socred sellouts that I have mentioned, and are, in fact, fed up with extremes.

HON. MR. STRACHAN: The royal "we."

MR. WALLACE: We, the Conservative Party, feel….

Interjections.

MR. WALLACE: That's right. I think, Mr. Speaker, I'm really going to make it by 6 o'clock after all.

But we do feel that this government ignores some of the points I've raised at its own peril. The feeling of people in this province is that they are being overtaxed at both provincial and federal levels and that a great deal of the tax money is not being spent in a judicious, or in the most productive way. In terms of the unemployment problems facing the province this budget fails, in any realistic way, to set out programmes which will create new jobs.

The last point I would like to make, Mr. Speaker, simply relates to the whole item of financing of political parties also. The Minister of Finance made no further mention in his presentation of the budget regarding the kind of concepts he believes in to control financing of political parties and election campaigns. I would simply repeat to him that, in the legislation he has said will be brought down, he give consideration to some of the basic ideas which we believe in our party would provide a fairer and more equitable electoral system. We are finding that fund raising for political parties, in the light of federal legislation, has made it extremely difficult for provincial parties to raise money. Whether or not other federal parties are funnelling money to their provincial counterparts is quite beside the point. The intent of the federal legislation is to make tax credits available to donations to federal parties, and whether or not this loophole in the legislation is being utilized by other parties, again I say is beside the point.

I do feel that the Minister of Finance should look most seriously at the concept of placing not only a ceiling on spending by parties both during and between elections, but should consider the two examples of the federal legislation, namely (1) that some per capita payment be made available to candidates, and (2) that individual donations to candidates should be given some form of tax credit in relation to provincial income tax payable.

I realize that that last subject is quite a large issue in itself, but we do know the Minister of Finance is to bring in legislation dealing with an elections Act. I'm not sure whether it's under the Provincial Secretary (Hon. Mr. Hall) or the Minister of Finance, but whoever it is — I think it's the Provincial Secretary — I would hope that some real discussion takes place on that side of the House as to how basically important it is not only to suggest that we have a fair and equitable electoral system but, in fact, that the government shows the leadership to make it so.

Hon. Mr. Lorimer moves adjournment of the debate.

Motion approved.

HON. R.A. WILLIAMS (Minister of Lands, Forests

[ Page 315 ]

and Water Resources): Mr. Speaker, I ask leave to make a statement.

Leave granted.

HON. R.A. WILLIAMS: Further to question period this afternoon, and the question from the Hon. Member for Vancouver–Point Grey (Mr. McGeer), I wish to further advise the House that the consultant referred to this afternoon was Professor Ian MacDougall of Dalhousie University. Professor MacDougall is a law professor with an economics degree. Professor MacDougall affirms the confidentiality of the material that he provided me and I'm satisfied with respect to his reports to me in that regard. I'd like to advise the House that this is the precise document that Professor MacDougall provided me with and I'd like to table this with the House, since the previous one was a copy of this document.

MR. SPEAKER: Shall leave be granted?

Leave granted.

HON. R.A. WILLIAMS: The covered, bound document is the document that I received.

Professor MacDougall indicates that the title page may have been placed on the body of the material by his staff. This data was provided my office as background material by Professor MacDougall, who was carrying out a different project on our behalf.

The substance of the committee's activities — that is, the cost reallocation committee on the Columbia River treaty — is, of course, very clear and was in the material provided with the House.

The government, I should announce, has determined that an inquiry into the question of Columbia River costs and their allocations should be undertaken, and that terms of reference of that inquiry will be announced in due course.

Presenting reports.

Hon. Mr. Macdonald presents:

report of the Law Reform Commission of British Columbia on Civil Rights Project 3, Parts 3 and 4;

annual report of the Law Reform Commission of British Columbia for the calendar year, 1974;

third report of the Workers' Compensation Board administering the Criminal Injuries Compensation Act for the period January 1, 1974, to the end of the year;

second report of the B.C. Energy Commission.

Hon. Mr. Hall presents the 56th annual report of the Public Service Commission.

Mr. Speaker, pursuant to the requirements of the Legislative Library Act, chapter 216, section 10, presents the annual report of the librarian for 1974.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 6:08 p.m.