[ Page 533 ]

CONTENTS

Routine proceedings

Budget debate (continued)

Mr. King — 533

British Columbia Deficit Repayment Act, 1975-1976 (Bill 3) . Second reading.

Mr. D'Arcy — 539

Mr. Barber — 543

Mr. King — 549

Mr. Levi — 550

Mr. Macdonald — 551

Hon. Mr. Bennett — 552

Division on second reading — 556

The House met at 10 a.m.

Prayers.

MRS. P.J. JORDAN (North Okanagan): Mr. Speaker, in the House today are a group of juveniles in the gallery who are here to observe this Legislature — not only to observe it but to learn so that one day they will know fully about legislative reporting, and that one day they, in the conduct of their work, will not only be good legislative reporters but a credit to that most noble profession. I would ask the House to welcome them.

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr. Speaker, we have today in the House a group from Surrey, the 15th Surrey Guide group, Kuskanook District, Sumac Division. Mrs. Patterson, Mrs. Golonco and Mrs. Kerr, and 12 Guides from Surrey: we welcome them here.

Orders of the day

ON THE BUDGET

(continued debate)

MR. W.S. KING (Leader of the Opposition): Mr. Speaker, I have been waiting patiently for an opportunity to take my place and make some remarks regarding the budget. I note that we've been making brief excursions into the in-and-out of this debate for the last number of days, and it's rather difficult to remember all the speakers who have participated, and those who have made certain remarks that one would like to respond to.

Mr. Speaker, I do recall the remarks of the new Minister of Mines, the member for Yale-Lillooet (Hon. Mr. Waterland), when he gave his maiden speech last night, and I would like to comment briefly on the presentation he made.

I want to commend the member for prefacing his remarks with an admonition to the House that perhaps we could all try to acquit ourselves a little more modestly without the kind of rather acrimonious feeling and the rather acrimonious comments that have been exchanged back and forth across the floor. I think that's a commendable approach to the affairs of the public in this province. I think the member commented on the remarks from the second member for Victoria (Mr. Barber), and associated himself with that kind of approach to the public's business.

I must say though, Mr. Speaker, that although that was a brave start, and I commend him for it, I wish that he had remained with that approach because I found it completely inappropriate, excessive and rather scurrilous to find such phrases in his speech as the observation that: "Once again on December 11, this province returned to the free world." Now that's an excessive and exaggerated charge against an opposing political party. We're quite aware of the fact that Social Credit opposes the New Democratic Party and their policies, as we oppose theirs, but to suggest in such an excessive way that freedom has stopped in this province because of a change of government is childish and just unrealistic.

I would ask: freedom for who?

HON. K.R. MAIR (Minister of Consumer Services): For whom.

MR. KING: After listening to the.... All right, I accept the grammatical correction, freedom for whom, and I hope that the members are equally generous in correcting the grammar of other members of this House who perhaps need it more than I do.

Mr. Speaker, I don't know who the minister is more interested in when he talks about freedom. I notice that he devoted a great deal of his remarks to pointing out that the mining companies are now free to come back into the province and exploit the resources of this province and I hope he doesn't mean that they are free to go back into the parks, mining again, so we have repeats of the Buttle Lake thing, mining and logging in the Tweedsmuir Park and the Wells Gray Park like we used to have under the former Social Credit administration.

I noted that the minister made some brave comments when he was first sworn in, Mr. Speaker, and he pointed out that he was not a patsy for the mining industry. I hope that he never gets tagged with that name of patsy, because his remarks last night certainly indicated to me that perhaps his assessment of freedom was more related to the unrestricted and unregulated right of mining companies to come into this province and exploit and extract our resources with very little regulation and control by government. If that's his assessment of freedom, Mr. Speaker, I think it's one which the people of this province will not tolerate for very long in this day and age.

Mr. Speaker, it's very difficult to tread the fine line between the matters under debate as far as the budget goes in a general way and the matters which are before the House in Bill 3. I hope that Mr. Speaker will be somewhat tolerant if we cross that fine line once in a while because the budget does deal with the need to borrow, the government's alleged need to borrow. While it's true we have a bill before the House which is under debate, also I think that in the broadest, general terms I should be free to comment on the events of the past number of months that have convinced the opposition — and I point out not only the Official Opposition, but I believe the total opposition and certainly a growing number of

[ Page 534 ]

citizens in British Columbia — that the financial approach being taken by the government is basically a political approach. It is an approach that is designed to bring about a self-fulfilled prophecy that there was going to be a large deficit on the books of British Columbia, and it seems that the government is prepared to go to any extreme to make sure that that prognostication comes true.

Mr. Speaker, we've had so many conflicting statements from the ministers responsible that it's difficult to recite them all. I have never in all my life seen such an exercise in inconsistency and conflict between ministers of the government. Some of my colleagues have recited very ably the constant changing positions that the Minister of Finance and the Premier have taken with respect to the financial position of the province. I understand now that the latest irony in this whole affair, which the citizens of British Columbia are seeing more clearly as the transparent ploy which it is, is that the Minister of Education (Hon. Mr. McGeer) has now made a statement to the public media that, indeed, the government will now borrow some money from ICBC that they transferred to that institution by a cheque of questionable legality, just on March 30. I repeat, Mr. Speaker, what a nonsensical, what an Alice in Wonderland, what a ridiculous kind of administrative approach to the affairs of this province.

I suggest that any elementary grade school child in this province would question the administrative wisdom of, on the one hand, transferring a cheque for $181 million to a Crown corporation, with the main objective being to enact that transfer within the fiscal year of 1975-76 so that it might be associated with the previous administration, and the the ridiculous mental gymnastics that justify the borrowing back of those precise funds a few short days later. Of all the nonsense one ever heard, this has to take the cake!

AN HON. MEMBER: He said he wasn't going to cash the cheque, though.

MR. KING: Now, Mr. Speaker, that's true. I think the Premier suggested that these cheques should not be cashed. I wonder if the president of the ICBC, who happens to be the Minister of Education (Hon. Mr. McGeer), will simply endorse the cheque and put it in his other pocket. What kind of nonsense is this in terms of any reasonable financing of the province's affairs? These are the people who proclaimed themselves to be the sound administrators, the capable businessmen, during the election recently held.

I think it's unfortunate, and I wonder about the cost to the province of this kind of financial transfer back and forth. There is bound to be a cost involved in the handling of that money. Apparently the only justification for incurring that additional cost to the province is the political objective of the government in terms of trying desperately to identify an inflated and an unrealistic deficit with the former government. That's patently obvious.

Mr. Speaker, the Minister of Finance (Hon. Mr. Wolfe) has said he didn't need the funds now. The minister in charge of ICBC has indicated they didn't need the funds. The Clarkson, Gordon report has indicated that it was a government policy move to make this transfer. Certainly there was no advice in the Clarkson, Gordon report urging the government to take this kind of policy direction.

I note that in an editorial in this morning's Province the same point is made, that it was simply a policy decision of the government to use that approach to financing. It's unrealistic under those terms to even really go into any great lengths in terms of debating the precise financial circumstances of the province.

So it is unfortunate that so much time in this House has to be devoted to a debate on this kind of illusory deficit which the government is trying to develop so desperately. It is such a difficult problem for them to give any credence to in the public mind.

Mr. Speaker, I want to say a few things about the climate in this House over the past few weeks since the opening day. I want to point out that the climate has been wanting, certainly, and I am not suggesting that this side of the House is innocent and that side of the House is totally guilty. I think it's incumbent upon all members.... We've had some good speeches with a bit of a refreshing approach involved in them — one by the member for Victoria (Mr. Barber) and it has been mentioned by some of the government backbenchers that language should not be too excessive, and that our obvious political disagreement, in terms of policy, should not degenerate to the point where we are attacking each other as human beings. I think that is good advice.

But I do want to make this point, Mr. Speaker, that the budget itself, in my view, in many ways set the tone for the kind of acrimony we've seen in this House this session. I think the budget is acknowledged — indeed it was acknowledged — by virtually every columnist in every newspaper, every media source in this province, as excessively political.

Interjection.

MR. KING: Well, perhaps, but you were the one who was wearing the bifocals, my friend. I have a pretty clear view of where I'm going, but I understand, over the years, you've had some trouble with direction. You found that the Liberals, perhaps, didn't offer any light at the end of the tunnel, and that's why you were prepared to jump to the Socred benches. So you know more about lights and tunnels than I do.

[ Page 535 ]

Mr. Speaker, seriously....

Interjection.

MR. KING: No, I always know the head end of the trains. My friend from Columbia River (Mr. Chabot) was on the tail end. (Laughter.)

Mr. Speaker, I do suggest that the budget was inflammatory. It set an unfortunate climate and an unfortunate stage for this session. Unfortunately, I think the Premier has to learn that the government is not only responsible for the policy decisions regulating the affairs of the people of this province, but he has a responsibility to this House also in terms of setting an example, in terms of giving some leadership so there can be orderly debate in this House and so there can be some sense of fair play in terms of the opportunity for all members to participate fully in the debates.

What we have had, Mr. Speaker, is a series of agreements as far as the opposition is concerned that were not honoured in this House — and I am not going to accuse anyone of dishonourable conduct or telling untruths. But obviously there is a need for some organization and some understanding, particularly on the Premier's behalf. If a Whip system is to work in this House, he, as the first minister on the government side, has to be prepared to support and honour the agreements which his Whip provides. The Premier got up oozing unctuous pomposity here last week and suggested that the Whip system had broken down and he suggested....

Interjection.

MR. KING: I don't think there is anything too inflammatory about that. I think that's a good line. He lectured this House, Mr. Speaker, about the need for the Whip system to work, and he said or intimated that the opposition Whips had not complied with an agreement which he, on the government benches, understood was in effect.

I want to read from Hansard the concluding paragraph of the hon. member and the response from his own Whip. The Whip for the government side said:

Mr. Speaker, I think it's fitting that the Whip opposite has just spoken. I shouldn't let it pass. I believe that it's most important for the Whip system to work. I will cast no remarks on what I've made or what I've said except to say that I did appeal to the hon. member — we had an agreement — and for this time to go through with it, even if he didn't agree with it.

AN HON. MEMBER: Hear, hear!

MR. KING: The government Whip is saying, look, I was trying to get an agreement but the opposition Whip wouldn't agree.

Interjections.

MR. KING: Mr. Speaker, this is the record of the House. I'll read it again.

MR. G. MUSSALLEM (Dewdney): Mr. Speaker, I think it's fitting that the Whip opposite has just spoken. I shouldn't let it pass. I believe that it's most important for the Whip system to work. I will cast no remarks on what I've made or what I've said except to say that I did appeal to the hon. member — we had an agreement — and for this time to go through with it, even if he didn't agree with it.

Even if he didn't agree with it — entirely. He saw fit not to do so.

HON. MR. MAIR: He broke his word.

MR. KING: Mr. Speaker, it's the right of our Whip not to agree with the government.

Interjections.

MR. KING: Oh, no! He said....

Interjections.

MR. SPEAKER: Order, please!

MR. KING: Mr. Speaker, the member for Dewdney (Mr. Mussallem) said in this House that he went to our Whip, the member for New Westminster (Mr. Cocke), and tried to thrust an agreement on him to which the member for New Westminster, the opposition Whip, did not agree. It's on the record. It's in the Blues. Now under those circumstances it completely cuts the ground from under the statement the Premier made that the opposition had broken any agreement. It completely cuts the ground from under and it's a matter of public record. Under those circumstances....

Interjections.

MR. KING: Under those circumstances, Mr. Speaker....

MR. SPEAKER: One moment, please. The hon. member for Dewdney (Mr. Mussallem), are you on a point of order?

MR. G. MUSSALLEM (Dewdney): Yes, a point of order. That statement is known by the term as convoluting the facts.

MR. SPEAKER: That's not a correct point of order, hon. member.

[ Page 536 ]

MR. KING: Perhaps they are convoluted words. I don't know. But they are the words of the hon. member, on the record in Hansard.

AN HON. MEMBER: Read it again.

MR. KING: All right. I'll read it again. This is for the third time.

Interjections.

MR. KING: The member for Dewdney:

MR. G. MUSSALLEM (Dewdney): Mr. Speaker, I think it's fitting that the Whip opposite has just spoken. I shouldn't let it pass. I believe that it is most important for the Whip system to work. I will cast no remarks on what I've made or what I've said except to say that I did appeal to the hon. member — we had an agreement — and for this time to go through with it, even if he didn't agree with it.

That is an acknowledgement he had no agreement. Even if he didn't agree with it entirely, he saw fit not to do so. I appealed to him with all the eloquence at my command — I think he sits there and nods his head — I said this was no time to argue a division on the question of Whips. He agreed with me, except he would not meet my request. He would not meet my request!

Interjections.

MR. KING: Mr. Speaker, is the government saying: "Look, unless you run by our rules, satisfy every demand of the government through direction to the Whip from the Premier, we are not going to play ball at all."? That's the original poor-little-rich-boy syndrome.

MR. SPEAKER: Order, please. The member for Dewdney on a point of order. State the point of order, please.

MR. MUSSALLEM: The point of order is that he is twisting the words into his own meaning; that's what I say is convoluting. That's the point of order. The point of order is: read it correctly.

AN HON. MEMBER: That's right.

Interjections.

MR. SPEAKER: One moment, please. Hon. member for Dewdney, that's not a correct point of order, but if you feel in any way that a member has misquoted you or incorrectly quoted you, you will get up immediately following his address and bring this to the attention of the House.

MR. KING: Mr. Speaker, I had been reading from Hansard, and I quoted this precise section. Surely the member is not going to argue with his own words. If he wishes to place some new and unfathomable meaning on them, well, that's his prerogative and he's free to do that. But the words stand for the public record, as quoted in Hansard.

What I want to say in proceeding with this matter.... Mr. Speaker, it's not my intention to inflame the feeling in the House by retracing this. I think it's necessary to go back over the record of what has taken place with the hope that the Premier will understand that if there is to be any orderly system of procedure rather than operate with the reckless abandon and the complete lack of control that has characterized this session so far — then he has to understand that the Whips must be left free to attempt to come to their agreements. They must also be left free to refuse to agree when there are matters upon which they cannot find accord.

I think the first lesson the Premier has to learn, Mr. Speaker, is that he cannot dictate to the Whips. They must be free to make some agreements, and they must have the government's assurance, and their party's assurance, that those agreements will be honoured and respected.

I want to say that under these circumstances, followed as they were yesterday by the blatant breaking of an agreement which the Whips had regarding the order of business in this House by the government, I reluctantly withdrew the opposition Whip and invited the Premier to make a statement of good faith in the House regarding his intentions on the Whip system, at which time I certainly would be prepared to reinstitute the Whip system. But until we have that — until we have that kind of understanding — it's a charade anyway and of little benefit. We have to have assurance and we have to have the secure knowledge that agreements that are made will be honoured.

It's certainly no excuse, and it's not valid, to say that the Whip system broke down years ago. The Whip system and the order of government in this House broke down this session, Mr. Speaker, with the introduction of a highly volatile, inflammatory budget, an apparent approach by the Premier to try to bulldoze his way through this House without respect to any recognition of opposition rights in the House. I think that's extremely unfortunate.

Mr. Speaker, to move to the matters contained in the budget in a more general way, I'd just like to reiterate some of the concerns my party has with the approach taken by the government in writing this budget, and the approach taken in attempting to document their political prophecies of doom and gloom which, in my view, are adversely affecting not only the economic strength of this province, but certainly the good financial name of the province.

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The members on this side have quoted chapter and verse from the government's own publication indicating that we do, indeed, have a strong economy in British Columbia. I think most business people who understand finances at all understand that the cash balance on hand is certainly not the only measure; in fact, it's a minuscule measure of the real strength of this province. The real measure of the strength of this province lies in the resource wealth, both natural and human.

There is no question that under those yardsticks British Columbia comes through extremely strong by comparison to any other area in Canada or, indeed, the world. For the government to take the approach that the province is hovering and teetering on the brink of financial chaos is irresponsible.

AN HON. MEMBER: Hear, hear!

MR. KING: It's childish in terms of any mature leadership and any concern and respect for the best interests of the province.

Mr. Speaker, I would hope that the government, after winning the election, would come into office and try to come up with policies which we could debate — policies we may not agree with, policies we might support to some extent or want to modify. But, unfortunately, the whole thrust of the debate so far, and the whole thrust of government action so far, is the political objective, the obsession with demonstrating doom and gloom, that the economy of the province is weak, that the cash reserves are in problems.

The spectacle of the Premier saying, on the one hand, "Don't cash that cheque, it might bounce," and subsequently saying, "Well, I think it will be honoured all right" — that's irresponsible.

I want to say, Mr. Speaker, that the people of this province who, perhaps with some justification, chastened the NDP for errors in administration and management, expected more from the new government. They certainly expected a much more mature, rational approach to business than we've had from this government so far.

I have had phone calls from all over this province from people who voted Social Credit, saying: "My gosh, I was shocked, completely shocked on opening day of the session when I heard the words of that budget, the inflammatory political tenor of it, crying doom and gloom about the province's economy, escalating costs and taxes to working people, moderate-income people, and saw the government benches break up in great rounds of hilarity, desk-thumping and so on." It was a shocking performance for many of the people out there who were concerned by the extra costs they were being subjected to.

I can tell you, there is a reaction from that opening day spectacle that is going to haunt that government for the next couple of years. They'd better pull up their boot straps if they hope to recover from that kind of irresponsible approach to the management of the affairs of this province.

Mr. Speaker, what we have is a petulant government that apparently only wants to continue to fight the last election. They are more interested and concerned with a continuing attack upon the integrity and the credibility of the opposition than they are concerned with their sober responsibility of accepting their office and coming up with answers to the many problems that face British Columbia. And, certainly, there are many problems.

There are many problems that affect this nation across its length and breadth. It is true that many of our sister provinces have problems in terms of financial strength. It's true that many of them are operating from a deficit budgeting position.

You know, Mr. Speaker, this is the whole concept of the federal state and the sharing arrangements which we have in this nation: transfer payments so those have-not provinces may get a break from the stronger provinces, and the people of our nation may share more equitably in the fruits of the whole nation. I think it does no one any good to have the strong provinces taking such a myopic view towards financial affairs and sound economic management in this province.

Certainly there's hardship in the Atlantic provinces, and at this time I think it behooves British Columbia to attempt to develop some leadership in the federal-provincial conferences of this nation, instead of sitting at home petulantly crying about the position they find themselves in and attempting to dump the political blame on their predecessors.

Mr. Speaker, the spectacle of the ICBC money transfer is comparable, you know, to the position our government found itself in when we assumed office in 1972. At that time we would have been free to calculate all of the debts that were generated by Crown corporations but guaranteed by the province — certainly with respect to the Columbia River Treaty, through B.C. Hydro, with respect to provincial guarantees for loans to B.C. Rail and Ferry Authority and the transit authority.

There is no question but what this government, our government, could have demonstrated a deficit of over $1 billion. Mr. Speaker, that would have been actually unrealistic, as the present performance is unrealistic by the Social Credit government. It

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certainly wouldn't have strengthened the position of British Columbia, either in national affairs or international affairs, and that's why we chose to do the responsible thing, which was to get on with the business of running government and develop our own policies which we were elected to initiate in the province. I suggest that it's about time the Social Credit government lived up to the kind of mature charge which the people of this province have also placed upon them.

There's been a great deal of pamphleteering, I might say, in the House over the past few weeks, and I also have a few articles I would like to read from the various press media. One in particular, I think, demonstrates that which I have just said regarding the real finances of the province. I would like to quote someone who I think would be recognized; he's quite an authority on financing, not only by people on this side of the House but by people on the government side as well.

It deals with the kind of thing I've been talking about: the reality of whether a government guarantee against Crown corporation debt is really a deficit. If that's true, it's publicly acknowledged that British Columbia is staggering under a tremendous debt load from the development of the two-dam policy from the previous provincial government.

I'd like to read to you, Mr. Speaker, an article from The Vancouver Sun, September 27, 1963, by a UBC tax expert Ralph Loffmark. He says that the policy was overstated. The article is by Tom Ardees:

"Professor Ralph Loffmark, the University of B.C. economics professor who is a Social Credit candidate in Point Grey, said today that it is not right to claim the province is debt-free. The assertion that there is no debt is not true, Loffmark told the Sun: 'I think it is not right to say that the province is debt-free.'"

I quote from another portion:

"Loffmark, an internationally recognized authority on taxation, made the statement in calling for what he termed a much higher morality in political debate in B.C."

He goes on:

"'There is indirect debt, lots of it,' Loffmark said. The Sun had asked the professor to expand on a press release in which he said: 'The voters can decide Monday whether they wish to sell the B.C. Hydro, B.C. Ferries and the Pacific Great Eastern Railway, because this is exactly what opposition critics imply when they say these organizations are a burden upon the province,' his release continued. 'These men of little vision have attacked government financial policy, charging that the provincial debt is overwhelming the people of British Columbia.'"

He goes on:

"'If this were done, the provincial debt would then amount to less than $260 million. We would then have a lower total debt than in 1952 when Social Credit first took office. We would also be turning back these important, publicly owned, money-making assets to private interests.'"

That is precisely the dilemma we face today, Mr. Speaker: if the government accepts that the Insurance Corp. of British Columbia is a useful social instrument, then why do they insist on the double standard of applying different financial support to that Crown corporation than they do to Hydro, which they defended, and their tax experts defended, in the past? Complete double standard, and they can't have it both ways.

I want to point out to you, too, Mr. Speaker, that with respect to the Clarkson, Gordon report — which was not an audit, as we pointed out, and my hon. friend from Alberni (Mr. Skelly) pointed out last night — that they wrote in their report a disclaimer of any inference that there was an audit, or that they had provided a full investigation of the books of this province. They clearly stated....

MR. R.L. LOEWEN (Burnaby-Edmonds): They always do.

MR. KING: Mr. Speaker, the member down the way seems to be somewhat exercised. He should try to contain himself, because he apparently doesn't like to listen to facts that are valid, that are sound, that are ordinary common business practices that are appreciated by most of the citizens of this province. You don't have to be a member of this Legislature to understand reasonable, basic, fundamental accounting practices and sound financial management. The people are getting the message out there; they understand what's happening.

I was going on to say that the Clarkson, Gordon report was none of those things which the budget attempted to infer that it was. It certainly was not an audit. The firm never had access to all the financial figures. They were provided with certain figures by the government, and that's contained in the report.

I want to remind the House, Mr. Speaker, that it's not the first time that a Social Credit government has attempted to draw certain conclusions from reports made by recognized chartered accountants and advertising firms and so on in this province.

I would read from an article in The Vancouver Sun, Mr. Speaker, dated April 2, 1959. It's an editorial in The Vancouver Sun, and it states: "Socred League Repudiated."

MR. SPEAKER: Hon. Member, I would draw your attention to the fact that you have two minutes left.

[ Page 539 ]

MR. KING: Oh my goodness! I didn't realize the time had gone so fast. Okay, I'll be very brief.

It simply points out, Mr. Speaker, that:

"Wood Gundy Ltd. has acted quickly to repudiate the use of its good name in an advertisement published by the British Columbia Social Credit League. The ad ran full page in The Sun last Saturday. 'Wood Gundy's December, 1958, report clearly shows Premier Bennett right on B.C. finances,' the ad blazoned.

"The company said: 'We did not authorize the use of our name or the publication of the advertisement. Our booklet merely presents figures given us by governments. We do not attempt to interpret them. We disassociate ourselves from this.'"

I suggest, Mr. Speaker, that precisely the same approach was taken by the current Social Credit government in the misrepresentation of the Clarkson, Gordon report in an effort to justify their self-fulfilling prophecy that the finances of British Columbia are in less than sound condition. That's a disservice to themselves. It's a disservice to the former government. It's a disservice to the people of British Columbia, and certainly it's something that impairs not only the financial and economic strength of the province but the credibility of politics in this province, not only through Canada but throughout the rest of the world, because that budget speech, Mr. Speaker, is put out on an international basis. It's distributed throughout the markets and the governments of the world, and I certainly decry...and I'm sad at the kind of intemperate language that was introduced in that budget speech, because that is the legacy that has been left in this House, too: a legacy of inflammatory remarks, a legacy of intemperate statements. I just am sorry, Mr. Speaker, that we could not have expected more sound, mature leadership from our newly elected government.

Hon. Mr. Nielsen moves adjournment of the debate.

Motion approved.

HON. G.M. McCARTHY (Provincial Secretary): Second reading of Bill 3, Mr. Speaker.

MR. SPEAKER: The hon. member for Rossland-Trail had the floor. Hon. Member, may I draw to your attention, before you start, that you have a maximum of 31 minutes left in second reading.

BRITISH COLUMBIA DEFICIT
REPAYMENT ACT, 1975-1976

(continued)

MR. C. D'ARCY (Rossland-Trail): I am sure that will be enough. Mr. Speaker, I'm going to try to keep my remarks to the principle of Bill 3, and try not to stray on to what would seem to be extraneous matters.

I closed my remarks, Mr. Speaker, last night with a brief discussion on some pertinent facts relating to the 1975 British Columbia economy. I would like to close with an item involving retail trade in this province which grew in the seven years ending in 1972 by $1.7 billion or $240 million a year. In the last three years, however, it grew by $2 billion, an average annual rate of $670 million, $430 million more than in the previous seven, and an effective growth rate of 160 per cent.

Now perhaps we are going to be better in the next few years. Perhaps we won't. One thing I know, the present government has said so much about the economic state of the province that they're going to be hard pressed for explanations, not only if they do not improve, but certainly if they don't show the same kind of a growth record.

Mr. Speaker, I would like, just before I leave the subject of retail trade, to mention that I am somewhat concerned, particularly relative to Bill 3, because it's a revenue bill and it assumes that the government may need to borrow. In the last fiscal year — although I intend to show that that's irrelevant later on in my speech — they intend to show that in this fiscal year they need to borrow $400 million, or up to $400 million. I suppose they're not committed to go the full amount, providing presumably that they pay it all back by midnight, March 31 next, and do that out of current revenue.

Of course, as I said last night, current revenue is dependent upon the ability of the economy of B.C. — which is the people of B.C. — to pay. The ability to pay, I submit, Mr. Speaker, depends on the amount of disposal income in the hands of the taxpayers and citizens of British Columbia at any given time. I note, Mr. Speaker, that by the admission of the government there has been something over $200 million taken in ICBC rate increases so far in 1975. Averaged out over the fiscal year, that's roughly $17 million or $18 million a month.

We see that the Crown intends to increase the operating costs of corporations to the extent that they will be paying $3 million a month more in corporation taxes, which inevitably have to be passed on to the consumer, and I certainly don't blame the corporations for that.

We see that there will be $17 million more per month roughly extracted — and I believe that's a

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conservative figure, but I'm going to use conservative figures — extracted from the taxpayers of this province, and hence out of disposable income, in sales taxes. We see that there will be $1 million more taken in tobacco taxes — $1 million a month; $1 million more a month in income taxes; $1 million a month more in hospital co-insurance; $1 million a month more in medical fees, which will be borne mostly by employers.

It is hard to project, but I'm looking at the Price Waterhouse report, which was so generously supplied to me by my friend from North Vancouver-Capilano (Mr. Gibson), and in trying to correlate that against the budget statements it would appear that there will be $6 million a month, averaged over the last nine months of the fiscal year, taken in increased B.C. Ferry prices. This makes a total, Mr. Speaker — and I believe this is a conservative estimate — of $49 million a month less of disposable income in the hands of British Columbians. That represents nearly 10 per cent of retail sales in this province.

That's $49 million a month less in disposable income, $49 million a month less for savings; that means $49 million a month less for investment by British Columbians in job-intensive secondary industry, because that's who does the investment that we're concerned about in this province — the private sector. The private sector is not some mythological thing; the private sector are the citizens of British Columbia, and they have $49 million a month less in disposable income, in investment income, due to the cavalier actions of this government.

Now, Mr. Speaker, I would like to directly return to Bill 3 in a more precise form and discuss why it may be so important to have it, or why it may not be so important to have it. One of the members of this House suggested that it really wasn't needed, that it was rather a political vendetta. I don't know about that, Mr. Speaker, but I do know that it is an economic vendetta. That party which sits on the treasury benches of this House came to Victoria last December convinced in their own mind that there was fiscal and economic chaos in this province.

HON. MR. MAIR: We were right.

MR. D'ARCY: They looked very hard for the financial chaos in the government. They looked very hard for deficits. When even after months they had trouble finding them, they began writing cheques that weren't needed to create one. Now that's politics, and that's all right. I don't mind if they write cheques, because I'm not suggesting there's any defalcation of funds. I think that in time the public accounts of this province will show that there's been no funny business with money, so it really doesn't matter whether they put it on last year or this year. What I am concerned about is the economic situation in this province that could be created by the actions of any government in order to prove their point.

HON. MR. MAIR: Why didn't you think of that in the last three and a half years?

MR. D'ARCY: Mr. Speaker, this government is so convinced, so sanctimoniously convinced of the correctness of its economic theory, that they don't care what happens to this province's reputation locally, across this country or internationally. Mr. Speaker, I would like to suggest to you one of the major reasons I think the government would suggest they need a loan and they need to borrow, having created a deficit situation in the last week of the last fiscal year, a deficit situation that did not exist before that, but which they created by writing cheques, and continuing to write cheques long after they knew their accounts were overdrawn.

I have before me, Mr. Speaker, a statute listed as chapter 223, RSBC 1960: Loan Authorization Cancellation Act. Section (2) reads:

"Notwithstanding any provision of any other Act, no power for the borrowing or raising of money by the province by the issue and sale of debentures or treasury bills or notes, or by the issue and sale of British Columbia stock under the inscribed Stock Act, otherwise conferred by or under...."

I won't take the time of the House reading these statutes, but they are various loan Acts, running right up into the 1950s.

Yet on the surface this Act would make it illegal for the province to borrow money, except that section (2), which is the operative section, has a subsection (2); it's a little one-and-a-half liner, Mr. Speaker, and it says: "Subsection (1) does not apply to subsection (3) of section (35) of the Revenue Act."

Being a curious sort of individual, I had my secretary go over to the Queen's Printer to get me a copy of the Revenue Act. I studied it very carefully, particularly a reference to subsection (3) or section (35) of the Revenue Act of this province. With your leave, Mr. Speaker, I'll read it into the record:

"The Lieutenant- Governor-in-Council may, in addition to all other moneys authorized to be raised or borrowed by this, or any other Act of the Legislature, in anticipation of provincial revenue, borrow" — borrow, Mr. Speaker — "borrow or raise from time to time, in such manner and at such times as may be deemed expedient, by the issue and sale of treasury bills or notes, payable out of such revenue, and notwithstanding anything contained in section 36, within the fiscal year in which they are issued, such amounts which may be deemed requisite to meet the lawful expenditures of the

[ Page 541 ]

province for such fiscal year."

I submit, Mr. Speaker, that under subsection (3) of section (35) of the Revenue Act, this province has all the borrowing power it needs; it does not need Bill 3, and it hasn't needed it since midnight the other night. We are taking up the time of this House, the time and money and energy of the people of British Columbia, the legislators here, debating a bill which is not needed under the statutes of British Columbia — the Revenue Act and the Loan Cancellation Act.

Mr. Speaker, I submit that this situation is far more ridiculous than the one the hon. Liberal leader brought up the other night when we were debating post facto a question of adjournment long after the clock had gone by.

The time has gone by for the necessity of Bill 3. The time has gone by; it went by when the clock struck midnight on March 31, 1976. It went by. If the province was in a cash-flow deficit position at that time, the province was breaking the law, but there is nothing that we can do about it now; we only have to accept that the province broke the law.

Under the Revenue Act, and the provisions of it, the province can, if it is necessary, as it says, borrow or raise from time to time any moneys it may need, providing, of course, it balances its books by March 31 next.

Mr. Speaker, we have debated a bill which was patently ridiculous two days ago, and we are continuing to debate it. I would suggest that the government do all the people of this province a tremendous favour by withdrawing the bill. Or if that is perhaps too hard on their pride, perhaps when such time as the debate on it adjourns, perhaps the House Leader could somehow neglect to call it again this session and it could mercifully die on the order paper.

I am terribly concerned about this kind of information circulated in the province by a government which does not need borrowing power, which is putting a bill before the House, I know not for what. I can only assume that they want to extend the debate as long as they can, because the longer they extend the debate the more they think it is going to discredit the province in the eyes of, I presume, the national and international community. I certainly don't want to see that; I don't think anybody wants to see that.

Mr. Speaker, whoever sits on the treasury benches, whoever sits on this side, whatever political party and partisan interest we have, I would suggest that the well-being of the people of B.C. is far more important than partisan political interest in this House — even as the budget speech suggested that business and job opportunities in British Columbia are far more important than partisan politics.

Mr. Speaker, there has been a great deal of discussion in this House on this bill and on the budget. On the question of losses, the one I particularly want to deal with is the B.C. Ferries system operating losses.

There are those in this province who would suggest that British Columbia ferries are part of the highways system. Some time ago the former Social Credit government removed tolls on bridges, on tunnels and on most, if not all, of the interior ferry system because, they said, they were part of the highway system. It is interesting to note that the costs of operating and maintaining the highway system in the last three years were $72 million, $124 million, and budgeted $129 million — although I think that's rather light. It is perhaps unfortunate that my good friend from Quesnel (Hon. Mr. Fraser) is not in his chair. I'm sure he has lots of time to sit in the House because there is not much money in the budget for him to do anything with his Highways department.

Mr. Speaker, I would note that I have in my riding one of eight ferries in the West Kootenay district. There's only one in my riding; it's a free ferry. Last year it cost $140,000 to operate. It cost $65,000 in capital expenditures because its machinery had not been replaced for 30 years. It served this province well, but was due for replacement. Over $200,000, Mr. Speaker, the taxpayers of this province put into a ferry — a small, short cable-ferry — in my riding. Are we to say, on the basis of the arithmetic of that party over there, that that ferry has a deficit of $105,000 outstanding for last year? That's your bookkeeping — I don't think so.

Are we to say that the entire highway system has a deficit of $124 million because that's what it cost to repaint the centre lines, to plough and sand, to repair potholes? I don't think so. But that's what it costs. I submit that the ferry system which enables British Columbians to get from the various islands to the mainland, and inter-island, should also, at least in terms of operating expenses, be part of that highway system.

Mr. Speaker, we have been told that there is a tremendous shortage of funds. One of the statements made.... I believe it was made outside this House, so he may have been misquoted; I don't know whether he was or not. But a new member of this House, and a new minister — the member for Surrey who is now Minister of Human Resources (Hon. Mr. Vander Zalm) — was reported to have stated that there was $80 million worth of fraud in social assistance in the Human Resources department in this province. He shakes his head; perhaps he didn't say that. I do recall hearing him say that there was a certain amount of fraud in the Human Resources department — he nods his head. Were you referring to it as annually or over a period of years?

AN HON. MEMBER: Are you on Bill 3?

MR. D'ARCY: I'm on Bill 3, Mr. Member, and

[ Page 542 ]

through you, Mr. Speaker, because Bill 3 says that due to an underestimated cash outflow we have to borrow some money. So I am wondering where some of these funds have gone.

Interjections.

MR. DARCY: Well, Mr. Speaker, there are 600-plus social workers on payroll in this province, on the payroll of the provincial government. Many of them were there when the former member for Kamloops, the Rev. Mr. Gaglardi, was Minister of Human Resources — I believe it was called Rehabilitation at that time. There was not a heavy turnover in that service. Most, if not all, were on the payroll when my colleague second from Burrard (Mr. Levi) was Minister of Human Resources. They're the same people — the same people, Mr. Speaker.

We are suggesting — or I thought I heard the present Minister suggesting — that they may have been party to a defalcation of funds that would be of absolutely colossal proportions because they were either very sloppy, very incompetent or very crooked. I personally don't believe that is true of the dedicated professionals who make up the field staff of the Department of Human Resources in this province.

I am wondering if a minister of the Crown, or anyone else, suggested that there had been an $80 million, or whatever it was, fraud if there had not been a demand, a hue and cry, for investigation. Suppose it had been Commonwealth Trust or suppose it had been a private company. I am wondering, Mr. Minister, if you have asked or if you have talked with the Attorney-General (Hon. Mr. Gardom). I'm sorry he is not in his seat. I know it would not be his style to interfere with the operations of anybody else's department. But surely you could have asked him or discussed with him the possibility of an investigation so that even if some or all of these funds couldn't be recovered, at least we could perhaps prevent their flying away in fiscal 1976-77, because I would submit that, from the tone of the budget speech and from the tone of the language in Bill 3, the government needs every penny it can get. Certainly I and no one else wants to see this slur cast on the integrity of the field staff of the Department of Human Resources who are scattered all over the province.

Just to give you some idea of the magnitude of this, if it was $80 million, Mr. Minister, through you, Mr. Speaker, it would be, roughly, $133,000 per social worker, on the average. They are certainly doing well by themselves in Trail where we have six workers; that would mean a cool $1 million per year.

Interjections.

MR. D'ARCY: Mr. Member for Kamloops (Hon. Mr. Mair), is that Heckle or Jeckle over there?

Interjection.

MR. D'ARCY: That's Jeckle. I think I'll deal with this in greater detail under that minister's estimates which will be coming up sooner or later. I certainly want to give him a chance. He is a new member of this House and a new minister and I have no reason to believe at this point that he's not at least potentially competent in his duties.

Mr. Speaker, there were several references in the budget to restoring the economy, to salvaging the situation, and we have been told again by speakers from the government side, notably the Minister of Education (Hon. Mr. McGeer), that we have a substantial need to salvage the economy — to salvage the business of the province. I note, however, that a statement was made earlier this year — and, to my knowledge, no attempt has been made to refute it — that there was a growth in the assets of this province during the last three and a half years slightly in excess of $2 billion.

Could we have the government at some time tell us, for instance, what would be the book value of the shares of Canadian Cellulose owned by B.C. Cellulose? What would be the book value of those?

Interjections.

MR. SPEAKER: Order, please.

MR. D'ARCY: What would be the book value of private companies, private shares traded freely in the stock market but owned, at the present time, by a holding agency which is a Crown corporation? They haven't dealt with any of those figures because they are not convenient to talk about.

Last night one of my colleagues, the first member for Vancouver Centre (Mr. Lauk), made what would and should have been and in fact were some very serious allegations in this House. He used some language which, in most cases and in most parliaments, would have been challenged. He referred to NSF cheques, illegal cheques; he referred to the Finance minister (Hon. Mr. Wolfe) as "paperhanger Evan." I would suggest that I did expect someone on the government benches to jump up and demand that he withdraw those charges.

MR. R.E. SKELLY (Alberni): No grounds.

MR. D'ARCY: But they didn't. They sat there in silence. They sat there in silence, Mr. Speaker, because that member was right.

HON. MR. VANDER ZALM: We consider the source.

MR. D'ARCY: That member was right! That's

[ Page 543 ]

why they sat there. I have shown earlier in my discussions this morning that as of midnight the other night Bill 3 was totally unnecessary, totally unneeded, and a complete charade of what we are supposed to be doing in this House. Now perhaps the government didn't intend it that way when it carried on with the debate past midnight. Perhaps they thought nobody would notice what the Revenue Act said. But I think it far more likely, Mr. Speaker, that they never knew about the law and they never knew about the law because they had never inquired about the law. They had never sent for the law. They had never read the law. They didn't care about the law. And they don't particularly care about this Legislature.

SOME HON. MEMBERS: Oh, oh!

MR. D'ARCY: They had assumed that they could write cheques in the last days of the fiscal year — perhaps thousands of them, large and small — and that somehow, through this House, would pass the necessary legislation for them to be retroactively legal when they overdrew those accounts. The time is past for that. They can no longer make it retroactive. We have a comptroller-general in this province — a very distinguished civil servant — Mr. Minty. The job of the comptroller is to control things, to control expenditures which perhaps happen in one year and are put on the next year, or happen in one year and are attempted to be made retroactive. He does the same thing with revenue.

MR. SKELLY: He keeps the government honest.

MR. D'ARCY: Yes, that's right. He's there to keep the government honest and to protect the interests of both the government, the opposition and also the taxpayers and the investors of this province.

There is no way, Mr. Speaker, that the government can go out either under Bill 3 when it's passed, as I assume it will be, or under section 3(35) of the Revenue Act, and raise funds, as it notes here, "by the issue and sale of treasury bills or notes." There is no way they can go out and raise those moneys and not include them in revenue for 1976-77. There is no way they can go back and put them into revenue for 1975-1976, because the books are closed. The books are closed on that year.

I, and I think most of the people in British Columbia, will be very, very happy when the time comes and the books are closed on the debate of Bill 3 and we have forgotten all about Bill 3 and the kind of fancy-Dan funny business that this government has tried to suggest to this Legislature, to the press and to the people of this province. That is the kind of thing which I didn't come here to Victoria, either in 1972 or in 1975, to fight and argue about for weeks on end. I think we have more important things to do in this House.

I think we have to be concerned about, as I said earlier, the level of business and job and professional opportunities for people in British Columbia, not just the health and welfare but the quality of life of everyone who lives in British Columbia, or chooses to come to live in British Columbia. That is our job here regardless of our partisan feelings and I wish to heaven, Mr. Speaker, that all of us would get down and do the job.

MR. C. BARBER (Victoria): I propose this morning, Mr. Speaker, that we have a bit of fun. I suggest that the fun will come from an examination of the strange history of Bill 3, the peculiar contents of it and the odd and frequently contradictory remarks made by the members of the treasury bench. I suspect that a bit of voodoo surrounds this bill. Bill 3, the voodoo bill, the bill that sticks and sticks again and sticks once more the people of British Columbia.

The voodoo Bill 3 has been discredited more ably by the members of the cabinet than by any member of the opposition, discredited in fact by the singular inability of the members of the cabinet to get together and tell the same story. In fact, the stories they've been telling simply don't add up. The conflicts are too clear, apparent, strong and self-evident, and it's been impossible for them to proceed with it as they expected.

I want to remind you, if I may, Mr. Speaker, of the, great journalist, I.F. Stone — and I propose to do an I.F. Stone number.

Interjections.

MR. BARBER: You've never heard of I.F. Stone? I.F. Stone, who happily still lives, has made a career, a distinguished and eminent career, by spending many hours peering through thick glasses sorting out the several stories told by governments in power, and determining from among those stories the truth of each of them. He's made a career, I.F. Stone has, of determining for the people's benefit just how it is that the people in power have failed to get together and tell the same story when they're working on the same hoax. He did it most eminently with the war in Viet Nam. He's done it on the Pentagon papers.

I propose to do a bit of it this morning on Bill 3. I propose to demonstrate to the people of British Columbia how inconsistent, how much in conflict, how full of holes and discrepancies have been the entire proceedings leading to the flop, the failure, of the hoax called Bill 3.

Interjection.

MR. BARBER: Now let's start out gently enough,

[ Page 544 ]

if we may, by talking about the stage. Let me describe briefly, Mr. Speaker, the players on this stage which we shall call Bill 3. Imagine if you will that we have just dimmed the lights and the players are before us.

HON. L.A. WILLIAMS (Minister of Labour): How come you're so clean and the House is so dirty?

Interjection.

MR. BARBER: What we're going to see is that this particular stage has 15 actors. Now one of the problems with this particular play is that five of the actors used to be enemies of the other ten. That's a very difficult thing for any director to put together. One of them was opposed to three of them in every instance for the last five, ten and 15 years. No wonder the stagecraft has fallen apart. One of them even tried for the Liberal leadership, another was a Liberal leader, and three of them sat in the Liberal Party. Another was a former Liberal federal cabinet minister.

What's going on here? An embarrassing and an awkward situation where five out of fifteen — one out of three — of the players used to be the enemy to the other ten. This is very embarrassing and no wonder it's begun to fall apart, and it has fallen apart most evidently in the failure of the government to persuade the people of British Columbia of the need for this thing called Bill 3.

One of the problems that any coalition government has is that a coalition government, not based upon principle but upon political opportunity of the moment, has enormous difficulty when conflicts arise in falling back on political principle, because the political principle was never there in the first place. We have seen the failure of the cabinet to get together and to tell the same story in order to persuade the people of British Columbia consistently about the nature of the hoax.

The chief contradiction on that side, the chief discrepancy that we may see, has been determined by the public, by the press, and by ourselves here. It is that between the Premier (Hon. Mr. Bennett) and the Minister of Finance (Hon. Mr. Wolfe). The Minister of Finance has a most unfortunate surname; his name is Wolfe. But I suspect he is no wolf at all. This Wolfe, in fact, is a kind of sheep in sheep's clothing. Now happily today, for his own sake and the blushing of his own red ears, were he here to hear these compliments...he's in Ottawa, but later on I will propose a remedy. I have a solution to these problems and, if you will bear with me, in a few moments I will outline it.

But anyway, I think we see that the chief conflict, although there have been others, lies between the Premier and the Minister of Finance. You may remember a certain dancing event in the corridor, when the Minister of Finance was waltzed away by the Premier. I doubt that they actually wanted to dance together. I doubt this very much. They're both virile men. I suspect there were other causes. We will get to those causes in a moment, but may I remind you I'm just setting the stage.

First of all, we have just explained that there are the 15 character actors who have inherently a conflict because five of the ten of them used to be enemies of the ten. This is a big problem.

Let's go back, though. In order to set the stage for this hoax called Bill 3, it was necessary for the government to persuade the people of British Columbia that we were in a horrible financial condition. To do so they developed a report, the Clarkson, Gordon report, and publicized it at considerable expense to the taxpayers throughout the land.

But again from the start they had a problem: they named one of their own bagmen, one of their own hacks, a fellow named Ian Adam, to co-ordinate the report.

MR. J.J. HEWITT: (Boundary-Similkameen): Are you questioning his integrity?

MR. BARBER: Had the Province newspaper not pointed out the fact that Ian Adam was in fact formerly an employee, presently an executive member of the Social Credit Party, they might have gotten away with it. However, Mr. Adam withdrew — a wise move.

MS. R. BROWN (Vancouver-Burrard): A comedy of errors!

MR. BARBER: This was the first mistake they made, and sure enough, the Clarkson, Gordon report got off to a most shaky start.

You may recall some other errors made when they attempted, on again and off again, to schedule the release of the report. It is my belief that the first draft of the report was itself sufficiently uncritical that the Premier said: "Send it back. It isn't bad enough. Make it worse!" Well, sure enough it came back, and they made it as bad as they could.

But even then the firm of Clarkson, Gordon felt compelled to say, in order to protect its own reputation, that they had not actually conducted an audit; they merely conducted a review of the figures supplied to them by those who allegedly wanted those figures objectively reviewed.

The Social Credit government, wanting to use figures to discredit us, and supplying their own figures in order to allow someone else to discredit us, had a very, very serious mistake loaded onto its back at that point. We begin to see the collapse of the

[ Page 545 ]

strategy called Bill 3 in the roots of that report. No one believed, initially, that that was going to be a serious document. We'll later see, as I hope to demonstrate this morning, that even the Social Credit government has not employed all of the figures in the Clarkson, Gordon report, but rather only some of them. They have ignored the other figures that do not serve their political purposes.

[Deputy Speaker in the chair.]

However, Clarkson, Gordon came down on February 20 with their report.

In order to examine Bill 3 and the alleged need for the money the Deficit Repayment Act requires, let's look for a moment at what Clarkson, Gordon has to say about revenue, and I.F. Stone-like, if we might, take a look at what the budget says about revenue because — dare I say it? — there are discrepancies. They don't actually use the same figures; column A isn't the same as column B.

What we see is that over a period of a few weeks, when it became clear to the government that the strategy leading to Bill 3 wasn't working, they had to change the numbers.

MRS. B.B. WALLACE (Cowichan-Malahat): No!

MR. BARBER: Yes, they did. I'm shocked to say it. I am shocked. As a 26-year-old naive and idealistic young member of the Legislature, I am shocked to say that my elders would apparently not use the same figures, time and time again.

There are five major discrepancies between the Clarkson, Gordon report.... Only five that I choose this morning, having only 40 minutes to point them out — five, and I want to talk about revenue.

In revenue we see that the budget speech, generally — and there are reasons for this and we will get to them later — portrays higher figures than Clarkson, Gordon does. This is part of the voodoo I'm talking about. Remember, this is all something of a miracle play — if I might remind you of 14th century mediaevalism — the kind of miracle play in which strange things occur — deus ex machina.

Under revenue, the privileges — the licence and the natural resource taxes and royalties — accruing to the Province of British Columbia in the budget speech are $80.6 million higher than what Clarkson, Gordon anticipated. Their figure was $397.2 million. Already the sleight-of-hand is beginning; already the voodoo is at work; already the magicians are at play over there — $80.6 million higher in the budget speech. Again we see that when Clarkson, Gordon doesn't serve their political purposes they ignore it. They do it again. Let's talk about interest.

They talk about interest accruing to the general revenue of the Province of British Columbia.

Clarkson, Gordon's prediction for this year was $26 million. In the budget speech, for their political purposes, they ignore Clarkson, Gordon and they tell us it's another $4 million higher.

The third major discrepancy: it's in the form of the Canadian, or the federal government, share of joint-service programmes and the costs therefore — moneys that accrue to the Province of British Columbia. Once more there is a discrepancy. Remember I.F. Stone, with his thick glasses, poring over it by midnight and the midnight oil. And we find another error.

Clarkson, Gordon says $558.2 million; the budget adds somewhere another $1.7 million of yours and mine. In contributions from other governments, other provincial governments within the country, Clarkson, Gordon predicts $21.9 million, but somehow the Minister of Finance has found another $2.3 million.

Finally, in succession and gift taxes — a sore point on that side of the House — Clarkson, Gordon anticipate $25 million, but sure enough, the budget speech comes in at $27 million.

Is it not clear, Mr. Speaker, that Clarkson, Gordon has a certain political role to play, and when that role is not played at their figures, the government has chosen to ignore their figures to develop their own.

They do the same thing on the expenditure side. Again, for reasons that will become clear later, and in the light of a remedy that I propose later, Clarkson, Gordon is generally lower than the government. Again, they have used the report when it suits their political purposes, and they've ignored the parts of it that don't suit their political purposes. I want to point out to this House three major discrepancies herein.

The Department of Finance, in the budget speech, proposes $5.6 million more in expenditures than Clarkson, Gordon proposes. But remember, it's been the same government all along making the same figures available to Clarkson, Gordon as to the Department of Finance. In Municipal Affairs it's $8.6 million higher and in Finance it's only $64.4 million higher.

The government — which two months ago gave these figures, these anticipated expenditures, to Clarkson, Gordon in order to tell Clarkson, Gordon and thereby the people of British Columbia — proved that we have this enormous deficit — we're terribly bankrupt; everything's all wrong — now comes in in its own budget speech with another set of figures. Remember, what happened in the interim is that that strategy began to fall apart. It fell apart because they couldn't tell the same story, because five out of the ten of them used to be enemies of the other ten, and they couldn't agree.

What have we seen? We have seen here in the Clarkson, Gordon report produced on February 20

[ Page 546 ]

and in the budget that came down on March 26 a panoply of discrepancy, of conflict and of contradiction leading to the failure of Bill 3 — the hoax called "Bill 3" to persuade the people of British Columbia that we need even a penny of that money.

I want you to think, Mr. Speaker, if you might, of a big balloon, and in favour of the ink generally reserved for deficits, let's make it a red balloon. Imagine the huffing and the puffing into this balloon called "deficit" that's been going on since that government took office on December 22. Huff and puff — Clarkson, Gordon; huff and puff, budget speech! Big bad wolf? No, he's not a wolf; he's a sheep in sheep's clothing. He's a gentle, fine man who, unfortunately, has spilled the beans.

Imagine that balloon being filled and filled with the hot air of that government until finally, as we have seen, it has blown up in their faces. It has blown up in their faces.

I want to go back to the main stage, Mr. Speaker. I want to demonstrate again to the people of British Columbia how, with those character actors over there, how with the bill called Bill 3, brought on by a Page onto this magical stage of ours, they had to pretend that there had been in the recent past no growth, and that in the near future no growth could be expected either, thus again substantiating, or trying to, the need for $400 million.

The problem is, referring again to I.F. Stone and the way he finds out these things, that their own facts contradict their own arguments. On page 34 of the budget speech the words appear: "Clearly the facts have revealed the shocking need for such action." But the problem is, on page 6 of the same budget speech — they hope that you're not going to flip back the 28 pages to find out the discrepancy — and as well in the British Columbia Department of Economic Development Summary of Economic Activity for 1975, we see clearly within that speech and within the summary that there has been substantial growth in the gross provincial product and that British Columbia has fared most well compared to all of Canada as a whole, fared most well despite the fact that our own economy in this province is so clearly dependent upon the economies and the growth of other nations in the world.

Their own budget speech on page 34 is contradicted by what their own budget speech on page 6 says about growth. They just can't get the facts straight; they can't tell the same story. Maybe one man wrote page 6 and someone else wrote page 34. But it's fairly clear that the arguments they've advanced, trying to demonstrate that there is no growth and, accordingly, a need for a $400 million loan, have fallen apart.

To persuade people of the alleged need for Bill 3 they have also had to withhold from you and I, as taxpayers, revenues that belong right now to the people of British Columbia. Under the previous administration it was clear and stated government policy to transfer to consolidated revenue all of the funds and revenues from the B.C. Petroleum Corp. But the Clarkson, Gordon report demonstrates that the Social Credit government has chosen not to do that in this instance because it wouldn't serve their political case to do so. Clarkson, Gordon — the part of the report now that they ignore and have not referred to — clearly shows that a political decision was made to leave $26 million in the hands of the corporation until after the end of the fiscal year, which expired on Wednesday night. Once again they have withheld revenue in order to create the apparent need for deficit financing from the people of British Columbia. They didn't have to do it; no one believes that they succeeded in persuading us of the need to do it.

But to further persuade people of the need for Bill 3 they had to force, before the end of the fiscal year, in completely unnecessary expenditures, the sum of $264.5 million. How did they do it? May I remind you again of our journalist friend who spent a lot of time comparing figures and pointing out discrepancies. They did it most spectacularly, and unsuccessfully, by two nights before the fiscal year ended transferring $181 million to ICBC. This has proven to be a most embarrassing matter, as we shall shortly see again, and as anyone who listened to the radio this morning has already learned.

They forced, for political purposes, expenditures that were not required in order to create this big red balloon called deficit which has, as I proposed, blown up in their faces: $181 million for ICBC forced; $26 million for the transit bureau forced; $32 million for B.C. Hydro forced; $20 million for B.C. Rail forced; $7.5 million for the Department of Education forced. And when this opposition over a period of four days in question period attempted to elicit from the Minister of Education the urgent need for these $7.5 million in special warrants, four days in a row the Minister of Finance could not tell us; four days in a row he didn't know. The sheep in sheep's clothing didn't know.

HON. H.A. CURTIS (Minister of Municipal Affairs): Stacks of unpaid bills.

Interjections.

MR. BARBER: There was $264.5 million forced for political purposes through the accounts of the Province of British Columbia for this fiscal year.

May I remind you...?

MS. BROWN: Why didn't he answer?

Interjections.

[ Page 547 ]

DEPUTY SPEAKER: Order, please.

HON. MR. CURTIS: Unpaid bills!

MS. BROWN: Why didn't he answer?

Interjections.

DEPUTY SPEAKER: Order, please! Hon. members, please, the member for Victoria has the floor.

HON. MR. CURTIS: Will you never understand? Unpaid bills! People are waiting for money.

MR. BARBER: This $264 million in enforced expenditures was designed to attempt to persuade the people of British Columbia of the necessity for Bill 3.

I want to go back to the main stage and look at the sequence of events.

HON. MR. CURTIS: Distortion, distortion!

Interjections.

HON. MR. CURTIS: I am angry.

SOME HON. MEMBER: Ohhh!

DEPUTY SPEAKER: Order, please!

Would the hon. minister please restrain himself until his anger passes away? (Laughter.)

Interjections.

MR. BARBER: A glass of water, Hugh.

There is a most peculiar history to this bill. When you look at the dates and remember the events, strange and peculiar things have occurred. I should like to remind this House that the Clarkson, Gordon report came down on February 20, that Bill 3 in its first reading came down on March 23, and that the budget came down on March 26.

What does that mean, Mr. Speaker? It means to me, clearly, that this strategy has been developed, these reports released, the budget timed to frighten and to confuse the people of British Columbia, to create the phony impression of disaster, and to permit Bill 3 to be passed without serious scrutiny.

Let me remind you that first of all Clarkson, Gordon, full of holes as it is, came down to frighten the people, then Bill 3 came down to frighten the people even more, and then finally the budget came down. The problem for the government is that the strategy has collapsed, it has fallen apart, the centre did not hold; the ministers could not keep their mouths shut and the government backbenchers could not keep straight faces. The strategy has fallen apart and the government has been badly embarrassed.

MR. J.J. KEMPF (Omineca): Voodoo!

MR. BARBER: The story collapsed, the hoax has fallen apart because, if I may remind you, the cabinet couldn't agree on the same story. Bill 3 was introduced before the budget speech in the apparent hope that it would sugar-coat the bad medicine that speech contained in order that it would go down easier in the throats of the people of British Columbia. That hasn't worked either.

On March 29 we entered the Bill 3 debate. The first collapse in the ranks occurred on March 29. On March 29, and I quote from the Victoria Times of that date:

"The Premier said outside the House that Bill 3 must be passed before Wednesday, midnight, the end of the current fiscal year."

Unfortunately, when the first collapse occurred the press was around, and I quote again from the Times, Mr. Speaker:

"Whatever the reasons for this apparent need to pass Bill 3 by midnight, the Premier was not prepared to let the Minister of Finance explain them.

"In a corridor huddle with the press, as Mr. Wolfe was telling the press that the bill should be passed as soon as possible but that it was not absolutely essential that it be passed by midnight Wednesday, the Premier walked over, took Mr. Wolfe by the arm, and saying 'peace and love,' walked him away from the press. He walked him down the corridor."

I suggested before, Mr. Speaker, that the Premier, a virile man and the father of several children, did not actually want to dance with the Minister of Finance; he wanted to keep shut the mouth of the Minister of Finance because the press had just overheard the Minister of Finance spilling the beans. He spilled the beans. He told the truth. He admitted that the bill was not required by midnight at the end of the fiscal year.

Interjection.

MR. BARBER: Now we'll see how this happened. After this embarrassment, the second collapse in the ranks occurred. After the Premier waltzed the Minister of Finance down the corridor, on March 30 — one day later — the Premier indicated that there was no longer any emergency and that a failure to pass Bill 3 by midnight was of no great concern nor worry to him. Unfortunately, he was contradicted again by one of his own ministers. He was contradicted this time by the good doctor — the Minister of Education and the minister responsible

[ Page 548 ]

for ICBC (Hon. Mr. McGeer) .

Remember, Mr. Speaker, almost half of the $400 million anticipated in Bill 3 has been alleged to have been caused and created by ICBC — $181 million. But unfortunately, as recently as this morning, and if I may quote from that esteemed newspaper, the Victoria Colonist. (The hoax has fallen apart again. The second collapse occurred just this morning):

"ICBC boss Pat McGeer made no comment when he tabled documents to show that the supposedly broke corporation had, in fact, $15 1.5 million invested in short-term loans and $17.5 million invested in long-term loans."

This was very embarrassing. The second collapse, here it is. The corporation is also sitting on a cheque for $181 million forwarded March 30, one day before the end of the fiscal year. Remember, we were supposedly bankrupt and needed the $400 million by the end of that fiscal year, forwarded to the provincial government to bail the insurance firm out of debt. The cheque itself, which was approved on the last day of the fiscal year, is simply not required — and don't take my word for it, Mr. Speaker. Take the word of the Premier and the Minister of Education, who have both informed this House that the $181 million drawn the day before the accounts closed for the last fiscal year will not actually be cashed.

There's been much talk in this House about rubber cheques, about Evan the paperhanger, about $3 bills. I don't know enough myself about the Revenue Act to determine whether or not the issuance of that cheque was legal or not. I presume the House will eventually decide it. There's clearly some question, but just as clearly it's apparent to the people of British Columbia that it was not a very responsible act on the part of the government to say that on March 30, when we needed the money, $400 million by midnight the following night, it was also permissible to write a cheque for $181 million. These are very peculiar economics. Even Major Douglas wouldn't have approved of this one. How responsible is it to have done that, Mr. Speaker? We'll see in a moment what happened to that particular cheque.

But the third and most recent collapse occurred in two parts. It occurred last night during a most embarrassing admission by the Minister of Education (Hon. Mr. McGeer) and it occurred again on the radio this morning when the Minister repeated the same statement. I may quote, if I might, from the Blues. Mr. McGeer, the Minister of Education and responsible for ICBC said last night:

Against that cash position, Mr. Speaker...operating expenses of about $27 million a month, or $1.3 million a working day for 11 more months. ICBC will have used up all its cash and short-term investments some time after the end of October this year.

If I may interject, that's October of this calendar year, 1976.

At that time it will begin to require some of the cash transferred by the government to look after these $169 million in unpaid claims.

From the Blues last night. I presume Hansard as usual got it right.

The third collapse occurred last night when the Minister of Education revealed the fact that's been apparent to us for weeks that ICBC doesn't need the money, that the cheque was not required on March 30. It's not required today. It won't be required until October, if then.

Mr. Speaker, and members of this House, one of the advantages of sitting on the opposition side is that one occasionally is able to read faces. I saw last night the face of the Premier when the Minister of Education made that remark. It sunk. It sunk like quicksand. I saw him look over at the Minister of Education and the Premier did not like what the Minister of Education had just said. It may be that the Premier himself remembered what he, the Premier, had said on February 26.

Now I get to the heart of the strange journey of this cheque for $181 million, because it turns out, Mr. Speaker, that Bill 3, half of whose $400 million was allegedly required by ICBC, a bill which we propose is not needed at all and is a phony loan that was never required in the first place, turns out to be an opportunity for the government to borrow its own money back and to pay interest on it at the same time.

I suspect the Premier was embarrassed last night by what the Minister of Education said because he remembered what he said on February 26. I quote the Premier in an article in the Vancouver Province of that date:

"Referring to the matter of borrowing to cover the $400 million deficit, Mr. Bennett said that first his government would have to seek authority from the Legislature to borrow, since that was extinguished when the other Bennett government made the government 'debt-free.' The $400 million figure he said is the 'outer limit' which will be needed to meet the province's financial needs. Depending on the cash flow, the amount of borrowing could be lower."

Here is the significant quote, the embarrassing leak, the third collapse in the story, the third collapse in the hoax.

"'At the same time,' Mr. Bennett said, 'the $175 million which the government will pay to ICBC to cover two years of operating deficits will be available for government agencies to borrow.'"

To borrow! On the radio this morning the Hon.

[ Page 549 ]

What's going on here, Mr. Speaker? Where is the emergency? Two days before the end of the fiscal year they write a cheque for $181 million. Now we're told they're not going to cash it. Now we find this morning, as the Minister of Education hinted last night, that ICBC doesn't actually need the money until October, and in the meantime, the government itself is going to borrow the money that the government itself advanced to ICBC on the pretext that the government itself was broke. What's going on here? What's going on here? They write a rubber cheque to a corporation that doesn't need it, that won't cash it and, it will turn out, loan it to the government itself, and they say that this party cooked the books. What nonsense!

I have a solution, Mr. Speaker. I will not actually propose a bill. I will not actually put it in the form of a motion, but I suggest it most sincerely, I suggest it from the heart, from the pity and from the compassion I feel for the failure of that government to persuade the people of British Columbia of the allegedly dire need for Bill 3. I would propose we might call it the "car dealers vindication Act."

The "car dealers vindication Act" would permit the members of the cabinet to say inside the House as best they can, once they get the story together, whatever they feel they have to say for political purposes, but would permit the members of the back bench and the members of the opposition to say outside the House what we all know to be true.

The "car-dealers vindication Act 1975-1976" will allow the government back bench to keep a straight face when they observe the Minister of Finance contradicting the Premier, who in turn was contradicted by the Minister of Education, all of whom are contradicted by the facts. (Laughter.) It will permit that government to save face in a most embarrassing situation. The "car dealers vindication Act 1975-1976" is an opportunity for that government to save face, like they need to.

The people on the streets of Victoria, Mr. Speaker, and I conclude now, are laughing. They are laughing at the failure of this government to tell the same story, to persuade the people of the need for Bill 3. I propose to you, Mr. Speaker, and to the members of the government benches, that Bill 3 and the shambles with which it has been handled by yourselves, has hurt you more than you know. It has embarrassed you. It is the first — but surely not the last — major shambles concocted by a coalition government whose members agree neither on philosophy nor principle nor the facts, and who can not even agree with one another, much less agree to tell to the people of British Columbia the facts and the case regarding the alleged deficit.

It has hurt you more than you know. I suggest that for your own sakes you withdraw it; you could do no better now.

DEPUTY SPEAKER: I recognize the hon. Leader of the Opposition, and just before he speaks, may I just have this reminder for the House, particularly for the new members of the House: it is not the practice in the House to use the names of members in debate. Although I would not consider it an offence, particularly when it involves new members, nonetheless I think there is an advantage in adhering to the practice, and I would suggest that we do so.

MR. KING: Okay, Harv — I mean, Mr. Speaker, I'm sorry. (Laughter.)

DEPUTY SPEAKER: Order, please. (Laughter.)

MR. KING: Mr. Speaker, I would just like to make a few comments about Bill 3, and I'm not going to go into any great detail on it. I think the case has been made extremely well and in an articulate fashion, both by the last speaker and by many others on the opposition side.

I see no purpose in prolonging further debate on this; I think the government has been smoked out, with the help of the opposition, but, as the last speaker indicated, mainly by their own inability to stick to the same story and have a common position with respect to the financial needs of the province. The whole spectacle of the transfer of money to ICBC, and then subsequent admissions that it was not necessary, that it will be available for borrowing back, has to be the height of financial irresponsibility and ineptitude that this province has ever seen.

Mr. Speaker, I would just like to quote briefly. I think it's....

Interjection.

HON. G.B. GARDOM (Attorney-General): $50,000 a day, that's what it's costing ICBC.

MR. KING: Is that what it's going to cost to transfer this money back and forth between the government and ICBC? I don't doubt for one moment that there will be a high cost incurred by the people of British Columbia simply to satisfy the political commitments of that government, and I say that's regrettable.

I think that the final conclusion that is most appropriate in this whole debate — which deals with a highly foolish transaction by the government — could best be summed up by quoting one of the government's former members, and I would say one of their most articulate and illustrious members, one that I know the Attorney-General would have great admiration for and pay great attention to. I quote the

[ Page 550 ]

Interjection.

MR. KING: There was only one better, and that was John Tisdalle — that's the only one better. He was a bit more evangelical about his approach, but perhaps they understood the A plus B theorem better than any current Social Credit member.

I want to refresh the minds of the government on Herb's approach to financing Crown corporations, through the bond-burning — you know, the flaming-arrow spectacle in Kelowna some years ago — and the whole proposition of contingent liabilities, Herb was attacking the opposition, and he made this observation:

"The opposition, while complaining that we are reducing our debt too fast, in the next breath complain that we are running the province too far into debt with our contingent liabilities.

"Then in the next breath they want the government to take over B.C. Electric, which would mean an addition of, perhaps, $800 million to our contingent liabilities.

"They also want us to build the Mica Dam, which will cost in the neighborhood of $750 million, and undertake the Peace River development, which would mean at least another $1 billion. Where would that put our contingent liabilities?"

I want to say, Mr. Speaker, that hard on the heels of Herb's admonition, the Social Credit government of that day did, indeed, take over B.C. Electric. They seized the company; they never expropriated it. They did, indeed, build the Mica Dam and they did, indeed, build the Peace River Dam. And there was no concern expressed at that time for the fantastic increase in the guaranteed contingent liabilities with which this province was faced.

Contrast that approach, Mr. Speaker, to finances which epitomized the Social Credit administration for over 20 years in this province with the story they are now trying to peddle to the public that because there was a shortfall in ICBC funds this had to be met immediately out of general revenue. This is completely contrary to the practice they had pursued over the years — completely contrary to their self-admitted approach to financing over the years.

Mr. Speaker, as I said at the outset, I don't want to prolong this debate. I think the opposition has adequately demonstrated the rather ludicrous ploy that Bill 3 is. We cannot support the bill and, seriously, I think it's regrettable. It's the first time in my recollection that a bill that was simply destined to guarantee a political promise was brought before this House. It's very, very difficult for the opposition, or for the public, to view it in any serious manner other than the political approach that it is.

I want to say, in conclusion, that we cannot support the bill. We find it reprehensible that politics have degenerated in British Columbia to the point where this Legislature is being used as a method of trying to give credence to a political promise of a party during an election campaign. So, Mr. Speaker, we will be opposing the bill.

MR. N. LEVI (Vancouver-Burrard): Mr. Speaker, I would like to congratulate my colleague from Victoria (Mr. Barber) who gave an excellent explanation of the kind of jiggery-pokery that has taken place on the other side. I was thinking while he was talking that the only one who is missing over there, from the kind of description he gave of the play that he gave, was the old "Wizard of Oz." My gosh, there's his son. He just walked in. The old "Wizard of Oz" himself, the old master, W.A.C., is the only one who is missing.

You know, it's interesting that with all of the efforts by the Premier to make the province aware.... Good morning, Mr. Premier, it's nice to see you. It is nice to see him because he is the architect of Bill 3, not the Minister of Finance. Yet in all of the discussion that has gone on for three days we haven't heard from him. In the old days his father would never have missed an opportunity to get up and have a go in this one. But we haven't heard from him. What he has done is to assign the roles, very much as my colleague, the Member for Victoria, has described. He's back again and waving. One would think he was mute and he has to use sign language.

AN HON. MEMBER: Do you want him to do a performance, in case you can't hear?

MR. LEVI: Ah, the noise level has risen 50 per cent, Mr. Speaker. Have you noticed? The Member for Kamloops (Hon. Mr. Mair) is back, and up goes the noise level by 50 per cent.

Interjections.

MR. LEVI: But there we have over there, for three days, a description of how terrible the finances of the province are. Yet the other night on television, with Mr. Andy Stephen of the press gallery, there was the Premier being interviewed. Mr. Stephen said to him: "Surely, Mr. Premier, we are in serious trouble — the province is broke; nobody can cash their cheques." The next thing I could see was the old fandango crab dance: "No, no, no, that's not what I said. We are not broke. We are not broke." Then he got on his bicycle and pedalled all the way backwards: "No, no, we're

[ Page 551 ]

AN HON. MEMBER: Little black sheep.

MR. LEVI: We used to have somebody like that in the House back in 1969 — the former member for Vancouver Centre, Herbie Capozzi, You remember that, Mr. Attorney-General. Surely you remember: he used to sit over there and he was claqueur leader then. He used to lead the claque. Now we've got to the point where the Premier has enough time to be able to lead the claque himself.

I think that the member for Victoria (Mr. Barber) has put it in a very concise way, albeit humorous and in some ways very cynically humorous. What has happened to that government over there in terms of their attempt to panic the citizens of this province?

You know, we have a new game now. It's called who's got the cheque, who's got the cheque. Where is this cheque?

HON. MR. MAIR: Where's the money? There's the money? Where's the money?

MR. LEVI: Has ICBC got the cheque? Has the Minister of Finance got the cheque? Who's got the cheque? That's the new game. Anybody who produces games for children in the province better produce a game called who's got the cheque, because nobody seems to know.

We've had a complete disregard for this Legislature. We have had no attempt by the government, after the House first met on the 17th.... They said things were in a mess, it's urgent, and then three days ago we have them come in with an attempt to pass this bill. No explanations, no facts. Again, as the member for Victoria (Mr. Barber) said, they gave up on relying on the Clarkson, Gordon report, it having been completely discredited by people on this side.

You know, we had a little short, sharp speech the other night, a kind of filler, from the Minister of Environment (Hon. Mr. Neilsen) who got up and he told us of the cash-flow position and the liquidity position. He talked about in 1972 how the perpetual funds were $85 million and the special funds were $257 million. What he didn't tell us was that in 1975 the perpetual funds had gone up to $100 million and the special funds had gone up to $422 million. You know, he only told half the story. In this House, Mr. Member — and you are a new one — you are going to have to give both sides of the story. It is important that you give the facts, because if you don't give the facts people back home won't believe you.

DEPUTY SPEAKER: Order, please. May we have a little more attention? The second member for Vancouver-Burrard has the floor.

MR. LEVI: Thank you very much, Mr. Speaker. That's very good of you.

I'm going to conclude now because the Premier (Hon. Mr. Bennett) has indicated that he wants to say something, and I would hope that we do hear from him because I see he's going through his notes. He's trying to find something to say on this.

AN HON. MEMBER: Page 9 of the Clarkson, Gordon report.

MR. LEVI: Clarkson, Gordon report, and then go to page 22, and then flip over to the budget speech, and then when you can't find enough material go to The Vancouver Sun and The Daily Colonist.

I have heard over there — just in closing — that they talk about the $100 million overrun. You know, we have never denied that we spent $100 million more on people than we intended to when we first did the estimates. In no way did we ever deny that we would make money available for people who need it ...

MR, G. HADDAD (Kootenay): You don't spend money you don't have.

MR, LEVI:...but what we see now....

Interjection.

MR. LEVI: The Minister of Public Works (Hon. Mr. Fraser) has woken up. Welcome back to the group.

We have never denied this, but I'll tell you this, that in the three short months you've been in government you have spread an aura of fear out there. You have cut back programmes. You have denied services to senior citizens and to children and to people and to women in this province, and that's the way you're going. We have no regrets for the $100 million overrun, no regrets whatsoever.

Interjections.

MR. A.B. MACDONALD (Vancouver East): Mr. Speaker, the silence of those members opposite is wonderful to hear, but it is surprising that they've said so little about the justification for this bill. I

[ Page 552 ]

I'm not going to repeat anything that's been said already in this debate, but I think it's kind of disgraceful that we take a great insurance company like ICBC and turn it into a money-lender. Lend it money, they lend it out back to the government, lend it to the bank and so forth. That's what we're in. We're in the money-lending business. I think it's kind of disgraceful in this province that we have people like the Minister of Education (Hon. Mr. McGeer) going around this province, and going to the teachers' federation and telling them that the late NDP government frightened away investment capital from the province of B.C. — and I read that with my own eyes.

It's like everything else connected with this government. It's pure political hoax and flim-flam because last year, the year 1975, capital and repair investment in the province of British Columbia rose by 9 per cent, the best record in all of Canada, and yet these people are running around the province, running down our financial state of affairs and doing the province, Mr. Premier, through the Speaker, irreparable harm.

You know, it's all very well for you to say we need to borrow $400 million and lend it out and so forth, when you don't need to do so, but you have hurt the province of British Columbia by this political chicanery of the last few days irreparably in the money markets of the world.

Interjection.

MR. MACDONALD: And we turn on national television.... And you're proud of this? You're proud of this, you businessmen, you bottom-line guys.

You're proud of this — that you turn on the national television and you see it going over the national news: "B.C. broke; empty pockets."

AN HON. MEMBER: We've got to give them the facts.

MR. MACDONALD: It simply is not the case. You have been doing damage to the province. You might never have been found out except for that little loan to the ICBC of $181 million. Somebody who is broke doesn't do that; when they've got empty pockets they don't shovel money out like that, Mr. Premier. They don't shovel money out like that.

AN HON. MEMBER: Where were you yesterday?

MR. MACDONALD: As I said, I did not intend to speak on this thing. I think you were wrong constitutionally and legally and you broke the law when you issued the cheque, even though it wasn't cashed on March 30, and the Lieutenant-Governor hadn't signed the order-in-council till March 31. That was illegal, but you were playing a political game, and what's a little illegality among members of the Legislature?

SOME HON. MEMBERS: Order!

MR. MACDONALD: But what it comes down to, Mr. Speaker, is simply this: we have had a financial hoax which has misrepresented the finances of the Province of British Columbia throughout all of Canada, and you, gentlemen opposite and ladies opposite and members of the government, have broken the 11th commandment, which is: "Thou shalt not be found out." (Laughter.)

Interjections.

HON. W.R. BENNETT (Premier): Mr. Speaker, just a few points of clarification on this bill before this House unanimously endorses it, because I'm sure that all of us don't want to create any problems for the Government of British Columbia. All of us are aware that the Government of British Columbia, at some point in this year, will have to borrow money.

AN HON. MEMBER: Which year?

HON. MR. BENNETT: This year — the fiscal year we're in right now. All of us are aware that the deficit was predicted and these losses were predicted not only by the Clarkson, Gordon review but by a senior member of the Finance department who, in concern for this professional integrity after the phony statement — phony financial projection — by the two former Ministers of Finance, spoke out to protect his integrity, the integrity of himself and his department, spoke out because their integrity was at stake.

He said that those projections were wrong and that this province would have a deficit. That deficit was caused because last year they predicted that we would receive more money than we actually did. They predicted that we would spend less than we actually spent. Simultaneously, they covered up the costs of the Crown corporations, particularly ICBC, and information has been indicated to this House that the ministers who were directors of ICBC knew, as late as 1974, about the projected deficits and what they would have to do to cover it. They never told the public then — in 1974 — they never told the public in '75, and they didn't dare tell them during the election of December what the true state of the finances of ICBC really were.

This bill, Mr. Speaker, gives us authority to borrow

[ Page 553 ]

MR. G.V. LAUK (Vancouver Centre): Its a hoax!

HON. MR. BENNETT: ...to cover losses from current accounts and losses that have been incurred in operating — not capital investment, but operating — for the first time, some of the Crown corporations. I want you to remember that word "operating, " Mr. Speaker, because there seems to be some sort of rationalization for deficit financing now. They're trying to draw a distinction between deficit financing for capital construction and deficit financing for operating.

Well, let me tell you that the losses incurred by ICBC, losses that nobody's arguing about now that they've lost the money — $181 million — they even agree to that now. They finally admit that.

Interjections.

HON. MR. BENNETT: They were all lost from operating, not capital, Mr. Speaker. Those weren't capital losses; the capital losses are still there. They're capitalized, and the start-up cost is, but the $181 million is an operating loss.

MR. MACDONALD: They're not losses.

HON. MR. BENNETT: They're losses; they're operating losses. They are not represented in buildings or construction or in physical assets; they're represented by the money that was paid out and will have to be paid out to meet the claims of the people who bought insurance in good faith, paid their premium money and expected that corporation to have the money there to honour those claims.

Interjections.

HON. MR. BENNETT: That money was trust money. Here we try to get....

Interjections.

DEPUTY SPEAKER: Order, please.

HON. MR. BENNETT: Here we have....

Interjections.

DEPUTY SPEAKER: Order, please! The Hon. Premier has the floor.

HON. MR. BENNETT: Here we have the NDP trying to sell us on their new kitchen-table financing. And what's that? They try to tell us that because they didn't have to pay the money right now, even though they incurred the debt — contracted the debt — somehow it wasn't a debt. Kitchen-table financing!

You know, Mr. Speaker, when you were early-marrieds, as all of us were, we all had trouble with our budget. The Attorney-General said that his experience of budgeting has led him to turn all the financing over to his wife.

AN HON. MEMBER: The former Attorney General.

HON. MR. BENNETT: The former Attorney-General (Mr. Macdonald) I should say.

MR. MACDONALD: My wife, not to his. (Laughter.)

HON. MR. BENNETT: You might say that all young married couples go through a period until they find out the realities of financing, and as they run up bills and they find out that they're contracting more debts than their income, the wives always stick a few bills in the drawer and they don't pay them. They hold them back, and then one day the cheque coming doesn't cover the bills that are due, and so they are forced to go to the finance company, Mr. Speaker, and pay high interest rates to pay for the debts they incurred. And somehow, all of a sudden, the debt that wasn't a debt has become a debt indeed, and a heavy weight upon those people.

That's the kind of financing they're trying to tell us at ICBC — that when they contract against claims and collect premiums, somehow, because they haven't had to pay the money out yet for the accidents, they don't owe the money. How ridiculous! How ridiculous, and yet ICBC, through the actuaries, studies by the accountants, their own and outside accountants, say that those losses over the first two years will be around $181 million, and if that corporation....

AN HON. MEMBER: Get to the point!

MR. LAUK: Sit down while you're ahead.

HON. MR. BENNETT: And if that corporation is to meet its obligations and maintain the money in trust to pay for those claims to the people of B.C., then it must have that money in its treasury.

I go back to the arguments of the NDP when they were selling the province on ICBC, when they said: "We'll set up an insurance corporation and you'll only have to pay $25 a month." Now that was the first mistake in a series of mistakes, because they lived with that figure and they tried so hard to keep the premium rate to the $25 that they started to cover up the true costs. That's why they got in a mess. They married themselves to some of their

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What other reason, Mr. Speaker, did they say we needed the Insurance Corp. of British Columbia for? So when it collected all those premiums in advance it would collect interest on the money, and that would help create prosperity in British Columbia — give interest to the corporation that would help reduce the cost of the premiums. That's what they said! They'd collect all the money in the beginning of the year and you pay out gradually through the year. At the end of the year, if the company ceased to exist, all the money would be expended — if the premiums were calculated to meet the cost of claims.

But they didn't even keep that commitment. Where did they invest the money? Was it here for the good of British Columbia? Was this money invested and held in British Columbia to help government agencies or government or business get going? No, they invested the money in...$24 million last year in the Royal Bank of Canada — this is February, 1975. The Banque Canadienne Nationale, the Mercantile Bank, the Toronto-Dominion Bank, the Bank of Nova Scotia — that's where the money was deposited, not in British Columbia but in the eastern banks.

I have to laugh when the former Minister of Economic Development (Mr. Lauk) thinks that when you make a deposit in the branch at Main and Hastings, that somehow the money stays at Main and Hastings. You know those eastern banks take the money back for their central investment account. They don't necessarily keep it in British Columbia. You remember the great fight British Columbia had to get a bank in this province, to get financial activity in this province away from eastern Canada; and the very argument for that bank and for British Columbia institutions was to hold the capital of British Columbia in this province.

Yet where did you, when you were running ICBC, invest the money? You put it in the Bank of Nova Scotia, the Toronto-Dominion Bank, the Bank of Montreal. That's where you put it, and you keep talking about your great concern for the B.C. Central Credit Union and the credit union movement and here under long-term investments...and this is February 28, 1975. What were the long-term investments in the B.C., Central Credit Union by that government who really worried about helping the credit union movement?

AN HON. MEMBER: Tell us how much.

HON. MR. BENNETT: One hundred dollars. (Laughter.) One hundred dollars.

Now they want, Mr. Speaker, to pretend that the deficits of 1974 and 1975 of ICBC, if somehow we wouldn't magically pay them, even though the money is owing — and everybody agrees it's owing — but somehow it's a debt that they can say: "It wasn't incurred by us because it wasn't paid out when we were there." (Laughter.)

That's the very argument they're making: if it isn't paid in two days then it isn't our debt. That's why they've had the filibuster. That's why they've been holding up passage of this bill. That's why we've had them reading newspapers, trying to fill their 40 minutes, because they thought they could embarrass the government, even if it hurt this province, and try to bring some degree of confusion to the debate that would make everybody believe that the debt of ICBC for 1974 and 1975 wasn't placed squarely on their doorstep.

Well, it is! The people know it is. It's there; it's a debt. It had to be paid, and we made a commitment when we became government that we would not penalize this year's drivers to pay off the debts of the past. We said the government would pay off those debts, give ICBC a chance, because the NDP had ruined any opportunity for that corporation to work. We said we would make the insurance company viable, have the rates reflect the anticipated claims, as insurance must do, but not pay off the past debts through those premiums. Mr. Speaker, we're just meeting that commitment, and it's a commitment I'm proud we made.

The second member for Victoria (Mr. Barber) went through quite a thing about how it was a book-cooking procedure. He went through the money to the BCR and said that the money to the BCR was somehow a plot of the Socreds, the new government. Well, I have here an order-in-council, April 3, 1975. Who signed that order-in-council as Minister of Finance? A Mr. D. Barrett. Who signed that order-in-council as presiding member of the executive council? A Mr. D. Barrett.

MR. L.B. KAHL (Esquimalt): Where is he now?

MR. BENNETT: Well, double signatures. What does that special warrant say? It says: "A special warrant be prepared to be signed by the Lieutenant-Governor for the issuance from the consolidated revenue fund of the sum of $20 million." That's $20 million for the BCR — April, 1975. That party was government when they gave the $20 million to BCR, and let there be no mistake about that.

MR. D.G. COCKE (New Westminster): It was a loan.

HON. MR. BENNETT: It wasn't a loan. It shows in the financial review of last year that it was a grant. Don't play games with the people of B.C., Mr.

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What about B.C. Hydro? He talked about money being transferred to B.C. Hydro to cover the losses on transit — nothing to do with electrical generation, nothing to do with capital, but operating losses for transit. Why transit? Well, clearly transit was being run by the government. Government was buying the buses, making Hydro run them, making them incur the losses. It was affecting Hydro, and so Hydro has had the transit deficit paid by government. Government created the problem of the deficit. But that wasn't just our opinion. It was a good idea, but who gave the first commitment to pay the deficit of the transit losses in Hydro?

Here's a letter signed October 29. It's addressed to the Deputy Minister of Finance. It says:

"You may recall something about the $10 million transit subsidy that was promised by the Premier to B.C. Hydro" — the former government — "and I have agreed with B.C. Hydro that this will be payable January 15, 1976. Signed, David D. Stupich, Minister of Finance."

AN HON. MEMBER: Who was that?

HON. MR. BENNETT: Yes, here we have the first commitment to pay the deficit of the transit losses. Even then they knew there were going to be losses. They started the commitment and you can bet all the losses would have been paid if they had managed to win the election and get into government once more. They would have done what we have done: pay those transit losses, because the government caused Hydro to incur them.

It wasn't a plot of this government, Mr. Second Member for Victoria. It was initiated by your former Minister of Finance, the member for Nanaimo (Mr. Stupich), meeting a commitment of the former Premier who is not now a member of this House.

AN HON. MEMBER: He will be.

HON. MR. BENNETT: He was meeting a commitment of his. You're wrong again, Mr. Member. That was started in motion by your party as government, and I feel sorry that they didn't take it upon themselves to take you into their confidence — and have you make that speech in this House, which has proved to be totally incorrect.

He talked, Mr. Speaker, he talked about the money from the B.C. Petroleum Corp. as though all of a sudden we'd done something different by not transferring all the funds. You didn't even read the review or you don't even know the history of the corporation because in the year ended March 31, 1974, it collected $19 million. How much did it transfer to government that year? Nothing. In the year ended March 31, 1975, it collected $92 million. How much did it transfer to government that year? Only $26 million, because the policy, Mr. Speaker, was to keep money there in reserve to pay the debts that the corporation would owe to the federal government, the $50 million-odd that we owe to pay for the producer's tax.

Yet last year for the first time the corporation and the government got desperate, not telling the public it was in financial difficulty — the corporation had expected revenues of around $150 million — and decided to transfer $193 million to try and bail out the government. But we weren't the ones breaking government policy. Government policy was changed last year in desperation, hoping they could hold on, maintain the financial cover-up, get that winter election over and hopefully then do something, goodness knows what, if they reeled back into power, or snuck back into power because the people couldn't find out what was happening. Well, the people did know what was happening. They smelled a rat, a financial rat, and on December 11, Mr. Speaker, they spoke out clearly that they knew something was wrong.

That’s the reason for this bill, Mr. Speaker, a bill to give this government, the people's government of British Columbia, the opportunity to have the credit to raise the money to pay off last year's bills. And this year, with our recovery budget, we're on our way back to building this province.

We're on our way back to creating opportunity for British Columbians. No more kitchen-table financing. No more financial cover-ups. No more borrowing for current account, because the last time this province had to borrow for current account was not 1960 or 1952, or even 1940; the last time we had to borrow to cover day-to-day expenses was in the Depression, and this is the first borrowing that British Columbia has had to have since the Depression to cover current accounts.

MR. LAUK: Arrogance, absolute arrogance.

HON. MR. BENNETT: Nothing to do with the argument about capital financing and operating financing, as that group over there has tried to indicate by quoting that famed economist, Frances Russell. (Laughter.) Nothing at all. Mr. Speaker, as

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you know, this government is making moves this year in placing the ferries back into authority where they will truly reflect the difference between capital and operating. We'll be making financial moves that will put this province and this government and the Crown agencies on a sound financial basis.

Because of the history of financial manoeuvring from that government with the Crown corporations, by the end of this year or next year, we will no longer have cabinet ministers sitting in management of Crown corporations. They will operate independently for the people of British Columbia, independent from political interference, but protected for the public by an independent review council that will review all of their rate applications.

Mr. Speaker, I move speedy passage of Bill 3.

Mr. Speaker, I was asked to table certain documents, and I do so now.

[Mr. Speaker in the chair.]

Motion approved on the following division:

YEAS — 34

NAYS — 16

Division ordered to be recorded in the Journals of the House.

Bill 3, British Columbia Deficit Repayment Act, 1975-1976, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 12:40 p.m.