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CONTENTS

Statement. British Columbia's position re anti-inflation programme

Hon. Mr. Bennett — 765

Mr. Gardom — 766

Mr. King — 766

Mr. Gibson — 767

Mr. Wallace — 767

Routine proceedings

Anti-Inflation Measures Act (Bill 16) Hon. Mr. Wolfe.

Introduction and first reading — 768

Budget debate (continued)

Mr.Loewen — 768

Mr. Lockstead — 769

Social Services Tax Amendment Act, 1976 (Bill 11) Second reading.

Mr. King — 774

Mr.Lca — 777

Mr. Gibson — 780

Amendment to delay second reading.

Mr. Gibson — 783

Mr. Lauk — 783

Mr. Wallace — 785

Mr. Nicolson — 787

Division on time of adjournment — 788

Statement. Correspondence concerning patriation of the constitution.

Hon. Mr. Bennett — 788

Mr. Macdonald — 789

Mr. Gibson — 789

Mr. Wallace — 789

Privilege. Alleged improper passage of special warrant. Mr. King — 789

Hon. Mrs. McCarthy — 790

Mr. King — 790

Mr. Speaker — 790

Mr. Lauk — 790

FRIDAY, APRIL 9, 1976

The House met at 10 a.m.

Prayers.

MR. SPEAKER: Hon. members, it is with regret that I have to inform the House that the former executive assistant, Mark Holtby, who worked from 1972 to 1974 in the NDP caucus, passed away yesterday. I am sure that the members of the House would join with the Speaker in expressing our concern to Mr. Holtby's family.

HON. W.R. BENNETT (Premier): Mr. Speaker, I ask leave to make a statement.

Leave granted.

HON. MR. BENNETT: Mr. Speaker, you will recall that I have made it clear on several different occasions that British Columbia supports the spirit and intent of the national wage and price controls. We intend to provide strong provincial leadership towards the same goal. We intend to both preach and practise restraint, and have already demonstrated this in many of the actions we have taken to date.

Controls and interference with our market economy are necessary in a time of temporary crisis. We hold firmly to that view. We are also of the opinion, however, that the national controls must be dismantled as soon as inflationary pressures are reined in.

The economy should be allowed, as soon as is practicable, to find its proper equilibrium undistorted by crisis controls that are ill-suited to interfering with the market forces for anything but the shortest time possible. For these reasons, we support the legality of the national duty to act in emergency situations for the life of a particular emergency.

The provinces have a duty and a responsibility to provide leadership towards fighting inflation. We in British Columbia accept this responsibility and this duty and intend to take all steps possible to ensure that the purchasing power of British Columbians is protected. We support rent controls under the present circumstances. Marketing boards' prices and retail food prices must be monitored very closely. We want the full legal capacity, should it prove necessary in the future, to freeze prices for a limited period of time.

These are vital steps to attack runaway prices and government spending. As I said in late February, my government is going to review the whole process by which pricing decisions for public-sector operations and services are made. In the long run, it will be a much better system for everyone if price decisions involving Crown agencies are subjected to systematic and independent review by a third party. Our officials have been instructed to get to work on that project so that appropriate changes can be made as soon as possible.

In the meantime, we want to have it firmly on the record that our public-sector suppliers of commodities and services are being run on sound management principles, are as efficient as possible and are running their operations in a manner consistent with the spirit and intent of the national attack on inflation. Any agreement that we sign with Ottawa will make this clear, and when we bring in our own system of reviewing public prices and rates, it will be clear that we want nothing less than full acceptance of the principle of accountability to the people of B.C.

It is my government's intention to present a bill before this assembly today to give authority to the B.C. government to enter into an agreement with Canada under the federal anti-inflation Act to carry out anti-inflation programmes. This will allow, for example, Victoria to agree with Ottawa to have the national guidelines apply to the provincial public sector for a period of time, most likely to April 1977. Any agreement will make it clear that the arrangement is temporary and is meant to give united support to the war on inflationary pressures. Agreements between governments on complex economic matters are not arrived at overnight.

I'm hopeful that we can conclude our discussions fairly quickly, but judging by the experiences of the other provinces, we will have to provide some reasonable time for these discussions. Let me make it clear that we are with the rest of the country, that into next year the national guidelines will apply to the provincial public sector, and that for the life of the agreement we intend to refer all public-sector compensation agreements arising since October 14, 1975, to review by the Anti-inflation Board.

As soon as better provincial machinery is in place to give proper leadership in public-sector bargaining and pricing, we will exercise the option to withdraw such questions from the national authorities. We want to emphasize that the B.C. Legislature must have a part to play in giving direction to our own economy.

Mr. Speaker, I urge all hon. members to support our war against inflation. With the support of all British Columbians, the war against inflation will be won. Inflation plays no favorites; it hurts everyone. It's the cruelest tax of all, Mr. Speaker. It cuts into everyone's take-home pay. However, if we are not united, the price spiral will continue. Government spending will again get out of hand. We cannot and will not allow that to happen.

HON. G.B. GARDOM (Attorney-General): Mr. Speaker, I ask leave of the House to make a companion statement on the same subject.

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Leave granted.

HON. MR. GARDOM: Mr. Speaker, on March 10 the Minister of Justice for Canada (Hon. Mr. Basford) announced that the federal anti-inflation Act and its guidelines would be referred to the Supreme Court of Canada for a ruling as to their constitutional validity.

As is the normal practice in constitutional cases before the Supreme Court, all of the provinces have been afforded an opportunity to intervene in these proceedings which, of course, will involve questions of considerable constitutional significance.

In the last few weeks, Mr. Speaker, the Government of British Columbia has given careful consideration to this reference, and specifically as to whether it would intervene. I wish to announce this morning that British Columbia will take part in the reference because of the very important constitutional issues to the country that will be raised, such as the extent to which the federal government can legislate over the private sector, which under the BNA Act is an area normally subject to provincial control.

You will recall, Mr. Speaker, that on February 27 the hon. Premier publicly stated that the government of this province is committed to doing everything possible to help the national attack against inflation. I wish to make it clear that our intervention in the reference will not in any way modify that position. As the Premier said this morning, this province is proceeding with its negotiations with the federal government to conclude an agreement whereby national anti-inflation guidelines would be made applicable to the provincial public sector.

However, Mr. Speaker, British Columbia is mindful of the potential long-term implications a decision of the Supreme Court of Canada, based on certain principles, could have on the division of powers between the federal government and the provincial governments. We consider that the distribution of powers between the provinces and the federal government, as set out in sections 91 and 92 of the BNA Act, must be preserved in order not to curtail the constitutional autonomy of the provinces.

It is therefore B.C.'s submission that exceptions to this general rule of provincial autonomy whereby the Parliament of Canada can intrude into the provincial domain are limited to where national emergency conditions exist, for under such circumstances, according to the provisions of the BNA Act, the federal Parliament can enact legislation affecting what are normally provincial powers on the basis of the peace, order and good government of Canada provision contained in that statute.

In our view, Mr. Speaker, it is obvious that the federal anti-inflation Act in ordinary circumstances would amount to a considerable intrusion into established areas of provincial jurisdiction, most notably that of the property and civil rights — for example, powers to regulate increases in wages and prices. Hence, British Columbia will advance arguments to the Supreme Court that such intrusion is proper only if the court concludes that there is a situation of emergency, in degree and reality sufficient to properly commit Parliament to exercise the powers in questions.

In summary, Mr. Speaker, we are entering the case on the basis of support of the federal position, but on the clear understanding that evidence must be led as to the exceptional conditions that prevail and that without such proof the Government of Canada cannot encroach upon that which is historically a provincial constitutional jurisdiction.

Needless to say, Mr. Speaker, this will be one of the most important constitutional cases of our time. British Columbia appreciates the need for the federal legislation but at the same time clearly indicates that in so doing British Columbia is in no way accepting any watering down of its provincial rights.

MR. W.S. KING (Leader of the Opposition): Mr. Speaker, I thank both the Premier and the Attorney-General for their statements on the position which British Columbia is taking with respect to the anti-inflation programme. They have promised that the position would become clear, and I'm pleased that they have now been able to take a clear stand which will undoubtedly reveal itself when the legislation is presented to the House.

I hope, Mr. Speaker, that in the Premier's concern and the reasons he stated this morning in the House for reaching agreement and participating in the federal programme he is not only mindful of the ravages of inflation as it affects and erodes wages, but mindful too of the need for equity in terms of a programme to fight inflation.

I noted, Mr. Speaker, that the Premier talked about rent controls as they now exist. He talked about control of the public sector in the bargaining relationship. He talked about acceptance of the four-three principle, which means that the province will vest in the federal government the authority to control the private and public sectors in the Province of British Columbia. But I hope his omission of any reference to the high cost of capital, to the high and often usurious interest rates and to the need for housing programmes is not an indication that these considerations will be absent from the legislation which the government brings in, and indeed that they will not be absent from this government's dialogue with the federal government in terms of persuading the federal government to meet these needs in providing an equitable and fair anti-inflation programme, which not only rides in a major way on the backs of working people but also recognizes the need for some concomitant programme to ensure that

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the results of this inflation fight are not an accelerating rate of unemployment, as we seem to see at the moment.

I would say, with respect to the Attorney General's (Hon. Mr. Gardom's) presentation, that it is interesting to find the province's approach to the court reference with respect to constitutional authority — and I wonder, Mr. Speaker, whether or not British Columbia's initial acceptance of federal regulation of not only the private sector but the public sector, too, is not somewhat of a precedent in terms of accepting and, indeed, inviting further incursions into the constitutional realm of the Province of British Columbia. I wonder whether or not there would be some conflict in terms of the final positions stated by the Attorney-General and, indeed, the apparent basis of the agreement which they have accepted. In any event, we will be looking forward with great interest to the legislation when it is presented, and I trust there will be adequate opportunity for full analysis and dialogue at that time.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, I thank the Premier for a very helpful statement that I think had to be made, and it was made in a timely fashion. The anti-inflation programme got off to a shaky start in some areas. It was therefore under attack in some respects, but it is more essential to British Columbia than to any other part of this country that it succeed because of the tremendous component of our economy which is export and therefore needs to have prices that are competitive in this world. So I think the government has done a good thing in giving not only their moral but also their legal support to the anti-inflation programme.

Government prices, the prices of the agencies of the government of the province of British Columbia, are a very important part of the cost of living in this province, and I might say, Mr. Speaker, that some of the prices have been raised very quickly in some areas by this government in the first three or four months of their term. I hope that this new body which is to be established will be able to restrain these prices which bear heavily on the ordinary person.

On the other side of the coin is the acceptance of federal guidelines for the provincial public service, which I think is a good thing. But the two must balance. People must have control of prices, if there is to be control of their incomes.

In respect of the remarks of the Attorney-General, I am glad that he is intervening in this case. The balance between federal and provincial powers is always a delicate question in our country. Provincial legislatures must always maintain their position. It's up to the federal government to argue for their powers; it's up to us to argue for ours. If we do not argue forcefully they are always in danger of being eroded. The balance, if anything, I suggest, Mr. Speaker, must in these days shift further towards the provinces, and I hope and know that the Attorney-General will proceed vigorously in that direction.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I also would like to acknowledge, as I have already done, statements by the Minister of Transport and Communications (Hon. Mr. Davis) about the new style we seem to be developing where at least some reasoned and orderly statements are given to the House, and the opposition is not left to wonder what's going to happen next. I feel that the Premier's statement is, as the Liberal leader said, very timely. We had already referred from this side of the House in the budget speech debate to the frequent public statements that the Premier had made that sooner or later he would be signing an agreement with the federal government regarding price and wage control in the public sector. I notice that Quebec is reported as not being interested in signing such an agreement and is thinking of setting up its own anti-inflation board.

I feel, in the light of statements by the Minister of Finance (Hon. Mr. Wolfe) regarding recent federal unilateral actions on joint sharing programmes, that we must tread very warily with the federal government, despite the well-motivated reasons that the Premier outlined — in the face of the severity of inflation and the fact that it is unquestionably our No. 1 problem in Canada today, and certainly in British Columbia. Nevertheless, I don't think the example of the federal government in recent months would encourage me to think that we can enter into such a crucial kind of agreement, in the light of the Attorney-General's reservations, without some real concern.

Anyone who was fortunate enough to attend the University of Victoria last weekend when Mr. Bora Laskin and others spoke.... We had a Canadian scholar of some note from Queen's University in Kingston who pointed out the very sensitive and highly inflammatory nature of the constitution at the present time when there are so many areas in which it is being questioned.

So I agree that inflation must be tackled on a united front. I'm not convinced that signing an agreement with the federal government is the answer. I very much welcome the stress which the Premier placed on the temporary nature of the agreement — that the controls would last for the shortest time possible, and that accountability would be the mainstay of every action that this government will take. If that is the path they will follow, they will certainly have my strongest support as a member of the opposition.

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1 am glad that this statement has been made to clarify the kind of question I raised in the House yesterday about the B.C. Steamship Corp. having its dispute with the unions, which had negotiated a wage increase in excess of guidelines. We've heard conflicting statements, and I've read conflicting reports in the newspapers as to whether or not B.C. Steamship and the unions could take their own dispute to the Anti-Inflation Board without interference from the provincial government. Examples on our provincial doorstep and examples at the national level have not always led to the equitability which every speaker has stressed as being the only hope for wage-and-price control programmes.

Our own former national leader, Robert Stanfield, when he fought an election on this issue, mentioned that wage-and-price control is a rough kind of justice. But it doesn't have to be as rough as it appears to be developing in this country at the present time. I echo the strong feelings of the other two leaders in the opposition side of the House that if it turns out to be very much a wage-control programme but without any real control over prices, the programme is doomed to create only a very serious amount of labour unrest all across Canada.

I'm glad that the Minister of Labour (Hon. Mr. Williams) is showing such earnest attention to my remarks.

Introduction of bills.

ANTI-INFLATION MEASURES ACT

Hon. Mr. Wolfe presents a message from His Honour the Lieutenant-Governor: a bill intituled Anti-Inflation Measures Act.

Bill 16 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the day.

ON THE BUDGET
(continued debate)

MR. R.L. LOEWEN (Burnaby-Edmonds): Mr. Speaker, I am pleased to rise again this morning. I am particularly pleased about the Premier's statement in respect to us in British Columbia signing the federal anti-inflation programme and joining that programme. It is one thing to sign and become part of this agreement; it's another thing to put pressure on the federal government.

I can't help but think of the quote by Colbert when I think of the federal policy on taxation: "The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least amount of hissing." I congratulate again — and I reiterate some of the things I said yesterday — our cabinet for coming through with a budget with only a 5.4 per cent increase from the previous year. But I have to reiterate that the federal government increase is 16 per cent, and as a province joining this anti-inflationary programme, it behooves us to put pressure on the federal government, in every way possible, and to join the geese in hissing as loudly as possible, and insisting that they as well bring their expenditures of tax funds under control.

There was a question put to me yesterday during my speech, from the hon. member for New Westminster (Mr. Cocke). He asked me the question, and I'm not sure whether he wanted me to answer or not what I knew about New Westminster. Well, I don't want to tell you all the things I know about New Westminster. I wouldn't want to tell you about the taxes I pay at present in New Westminster and the different organizations I'm involved in and the businesses that I'm involved in in New Westminster.

However, if he is really interested in New Westminster I'd like to offer him two books that the mayor of New Westminster gave to me several days ago about New Westminster — that is, if he's really interested in learning about New Westminster.

I also took a little time to try to explain what was happening in both private and corporate taxation at this time, and particularly I took a little time to explain what was happening on the corporate level. I honestly have the feeling that if the well-meaning socialists on this side of the House really understood corporate tax, there'd be very few of them sitting on this side. In fact, they just might move over to the heavies on this end of the House. (Laughter.)

Seriously, there is only so much that the province can produce for public services, and when that amount, both privately and in corporations, amounts to frequently an average of over 50 per cent, how much more can be produced by the people and the corporations of this province for social services?

I also spoke just a little about business, and I'd like to again read a statement from Mr. Wadsworth, the chief executive officer of the Canadian Imperial Bank:

"Today business is criticized and attacked from all sides and has itself in a relatively weak position to offer an effective defence. Business is at times attacked for poor products and service, and when justified, such criticism is of a kind we should encourage.

"Unfortunately, the major thrust of attack over the last several years has shifted to profits. Many Canadians have become emotional at the very mention of the word 'profit' and are quite prepared to go along with any government policy which will lower the level of business return.

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"Also, to a surprising extent, many employees of private enterprise fail to appreciate the role of profit in our society and the importance to them personally. If employees whose jobs and incomes depend on the profitable operation of their firms do not appreciate the function of profits, how can we hope to persuade those Canadians who are employed at various levels in the public sector?

"The misguided attacks on profits point to a serious lack of understanding of the type of society in which we live. Much of the blame for this situation has to fall on the shoulders of the business community, which has failed to explain, or which has failed to communicate, its role in an effective manner.

"Most young people who enter the work force during the last decade have had little or no training in economics and business subjects."

I'd like to include many politicians as well.

"We are now in a much more complicated society than prevailed even a generation ago. We in business have a responsibility to see that both directly, through formal education, and by our own actions, those assuming their place in our society are better informed.

"While it is important to educate the general public, it is, of course, equally vital to express to those in government the role that business plays in our system."

"In closing I'd like to quote J.K:

"Oh that there might in B.C. be
"A duty on hypocrisy,
"A tax on humbug,
"An excise on solemn plausibility." (Laughter.)

MR. D.F. LOCKSTEAD (Mackenzie): Once again it is a pleasure to take my place in this debate and discuss this budget which was presented to this House a short time ago, and the budget that was presented outside of this House a short time ago, and several other budgets that have been distributed around this province. However, I think I'll stick to the budget that we had presented to this House about two weeks ago, for local consumption.

It's nice to speak on a Friday morning, Mr. Speaker; everything is quiet, everybody's relaxed, everybody goes up for coffee....

MR. WALLACE: Just don't get stirred up, Don.

MR. LOCKSTEAD: Oh, no. I'll be very mild, and short, Mr. Speaker.

In my opinion, Mr. Speaker, and some of my colleagues have said this but I would like to reiterate, this is a revenge budget. In my opinion, it's an overly inflated budget for political reasons.

The government has, for example, increased the sales tax by 40 per cent, from 5 to 7 cents on the dollar — a regressive tax, a tax that hurts the low-income people much harder than the well-do-do and the rich. On one hand this government gives the senior citizens a $50-a-year increase in the homeowner's grant and then takes it away from them with the other hand — a most regressive tax.

While discussing the proposed tax increase, Mr. Speaker, I don't think that people living in unorganized rural areas are going to be very pleased with their assessments from $1 to $50 when in some areas no services exist whatsoever, particularly in areas, such as in my riding, like Texada Island, Roberts Creek and Lund, where a large proportion of people living in that area are senior citizens. Some of these people, really, are just barely getting by now, Mr. Speaker. I really think it's a very unfair type of tax, certainly for seniors.

It would appear that this government has passed special warrants to unofficially inflate the expenditures of the fiscal year just ended, and for political reasons. That includes a cheque for $181.51 million that was written prior to the beginning of this fiscal year, and not needed because ICBC has at its disposal the revenue from premiums that were paid for this year's auto insurance. This government, Mr. Speaker, is quickly losing its credibility.

We in British Columbia are at the mercy of external pressures in our economic position. Very nearly every provincial government — certainly our senior governments — in this time of economic recession is facing grave financial problems. But I might suggest to this government that we could create jobs for people in British Columbia by proceeding with the economic development of secondary industry: copper smelters, a steel mill, petroleum refining plants — all to help create jobs for our people and to make this province more self-sufficient.

Just a word or two on health, Mr. Speaker, before I press on. A 50 per cent increase in Medicare and a $1- to a $4-a-day increase in acute care, which is another regressive tax. This charge for general care, in my opinion, should come out of general revenue, Mr. Minister of Health, through you, Mr. Speaker. We would probably receive under the federal-provincial agreement just as much funding if Medicare and acute care were funded in this way.

In a constituency like mine, which has a particularly high percentage of elderly people who require acute care, I know that this extra cost will be unacceptable. A tax rate that applies regardless of a person's income is the most vicious type of tax conceivable. How much will we be losing of the federal government's share by virtue of what this government is doing? This province may well lose a couple of million dollars.

Mr. Speaker, one other topic on health. The

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Minister of Health announced not too long ago the cutback and reduction in funding for ambulance service — emergency ambulance health care. Certainly in a riding like mine this service is extremely important. One small example: about three weeks ago the Department of Health decided to move an ambulance from Halfmoon Bay down to Sechelt, which means that if that ambulance is placed in Sechelt, and there are no ambulances in Pender Harbour or Egmont, that ambulance must go 34 miles one way and 34 miles back in case of an emergency. A lot of people can die in 70 miles, Mr. Speaker.

I will be continuing to press my efforts for the Minister of Health to have an ambulance service placed either at Pender Harbour or in that general area to serve the people in that particular area.

One short note on education as well, Mr. Speaker. I know that the school boards in my riding are very concerned about this government's intention regarding funding for school districts. School board budgets for 1976 are up only 19.3 per cent. This represents the cost of maintaining present programmes, including the 200 additional teachers authorized to implement special programmes for children with learning disabilities. If local school boards cut back on educational programmes to avoid higher local taxes, the cuts can be accomplished only in the period September to December 1976. This means that a 10 per cent cut in the total budget requires a 25 per cent cut in school programmes in September 1976. The teachers' salaried session represents about 68 per cent of the total operating budget of the school board.

Approximately $10 million in costs is shifted from the province to local taxpayers for each 1-mill increase in the tax rate levied by the province and the district's share of education costs. Each $1 million reduction in the teachers' salaried session of the budget will result in 120 fewer teachers in September 1976.

A cut of $30 million in the school board budgets could mean a loss of 3,600 teaching jobs by September 1976. A loss of 3,600 teachers would raise the pupil-teacher ratio from the present 19.14 to 22.02 and produce large increases in class sizes — and that's the thing, the class size, Mr. Speaker — and the loss of many programmes for children with learning disabilities. If 3,600 classroom teaching jobs were lost, the average size of classes in B.C. would jump by more than five students, from 25.9 to 31.1 per class.

In School District 46, Sechelt, where the mill rate is now 32.5 mills and the mill is worth in that area about $85,000, there could be, in order to maintain the standard of education, a mill increase of 10. If the school board does not see fit to increase the mill rate to that extent, there will have to be a decrease in services such as the laying off of school aides — and, by the way, I might tell you now that they have already notified the school aides that their services will not be required next year — dropping the school programme for the mentally retarded, which is being picked up by the local school board, and the layoff of teachers, once again increasing the class size so that teachers become little more than baby-sitters and not able to deliver the type of education that the parents, teaching staff and school board would like to see.

Much the same situation exists in School District 47, Powell River, where one mill is worth $128,155. It appears that the mill rate would have to be increased by 6.5 mills to retain the present level of education.

Under this government's policy, if the mill rate is not increased, the district can expect to have a shortfall of about $1 million. This could lead to a dismissal of 40 to 50 teachers and once again increase the class size to unlivable limits. I expect, Mr. Speaker, to be discussing this matter further under the Minister's estimates.

My riding, as you know, Mr. Speaker, relies heavily on the B.C. Ferries and the Department of Highways ferry services. I want to be very straightforward, and I hope someone is taking notes for the Minister of Transport and Communications (Hon. Mr. Davis), because I'd like to notify this government now that I will be opposing the removal of the commuter card system in my riding, and fares for the residents of the Sunshine Coast and the Powell River regional areas should not be increased.

I know that there have been some abuses, as pointed out in recent newspaper articles, of the commuter card system, but I've pointed out to the minister ways and means by which this could be corrected — not just to the present minister but to the former minister as well. I know that there are abuses in the commuter card system, and I think they could be easily corrected.

One method that I suggested to the minister was that new commuter cards be issued. Print 20,000 new tickets immediately of a contrasting colour, then announce that the new tickets would be handed out in return for the old tickets upon proof of residence on the Sunshine Coast and the Powell River regional area. Set a deadline of say one month, and by the end of one month the old commuter cards would not be honoured and the new ones would have to be used. That would help solve that problem, but I'm very much opposed to the removal of the commuter card in that area.

Those ferries are our highways, and there are no tolls on highways, Mr. Speaker. The B.C. ferry system in my opinion is another form of public transit, and fare increases such as are being considered by the present government hit the ordinary working people the hardest.

Not too long ago this government sold the Prince George.

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I guess it's water under the bridge, but the sale of this vessel is extremely regrettable, bordering on irresponsible, in my opinion. This vessel was 30 per cent booked a month ago. There was no way that this vessel could have lost money for the British Columbia Steamship Corp., in my opinion. This vessel was sold in spite of pleas of literally thousands of people and communities from all of the B.C. coast and Alaska, believe it or not. As a matter of fact, I understand the mayor of Ketchikan made a special trip down here to discuss this matter with the minister but didn't receive a very good reception. They sold the boat.

The government has indicated that the Queen of Surrey may be sold as well, or put in mothballs. I would suggest to this government, Mr. Speaker, that we keep the Queen of Surrey in service and put the minister in mothballs.

AN HON. MEMBER: Hear, hear! The Liberals did it.

MR. LOCKSTEAD: I think the Queen of Surrey should replace the Queen of Prince Rupert on the Kelsey Bay-Prince Rupert run. I further believe that the present Queen of Prince Rupert should perhaps be placed on the coast route from Vancouver to Alaska and to coastal points in British Columbia, and serving all the coastal points of British Columbia.

I would as well, Mr. Speaker, like to see a connecting ferry link from Bella Coola to Ocean Falls to Bella Bella with a vessel similar to the Comox Queen, which is a 26-car ferry and very seaworthy, so that that area may enjoy and participate in economic growth with the rest of the province. For a family of four to leave Ocean Falls for a vacation and return, or for any other reason, it costs about about $425 just for the airfare. That's really unacceptable, Mr. Speaker. This proposed ferry route could connect with the Queen of Surrey at either Bella Bella or Ocean Falls and/or with the Queen of Prince Rupert at the same communities.

Mr. Speaker, when the Sechelt Queen is in place and serves on the Powell River-Comox route, hopefully soon, as the overloads and waits even now can be up to eight hours, Mr. Minister.... By the way, this is a Highways ferry and they're doing as good a job as they can; it's just totally inadequate at the moment. Men the Queen of Nanaimo or the Queen of Tsawwassen is placed on Route 3, Langdale to Horseshoe Bay, there will be tremendous pressures on the Powell River Queen, which is only a 50-car vessel, because of anticipated increased ferry traffic.

In past summer seasons, the Powell River Queen has been supplemented by the Pender Queen, a vessel that should have been scrapped years ago. The Pender Queen was broken down very often last summer and, in my opinion, is totally inadequate for that route. I therefore suggest to the government that the Queen of Sidney be placed on a direct route from Earls Cove at Powell River to Horseshoe Bay, a direct route that would take three hours and twenty minutes each way, two return trips each day. This route, coupled with the present route of the Powell River Queen, would relieve traffic pressure on Highway 101 and the long lineups at Langdale. It would, as well, offer a better service to commercial traffic going to Powell River and assist the small businessmen there at the same time.

If for some reason the Queen of Sidney could not be placed on that direct route, I would ask this government to consider placing the Queen of the Islands, when it is no longer needed on the Powell River-Comox route, on Route 7 — that is Saltery Bay to Earls Cove. I hope that the government will take my suggestions seriously.

I expect as well, Mr. Speaker, to be discussing the consequences of this government's position on the Darling report — I think all members of this House are aware that the Darling report is similar to the Jones Act, where Canadian merchandise is transported on Canadian bottoms — under the estimates of the appropriate minister.

One other topic on transportation, Mr. Speaker: many of the small, private companies, transport shipping companies in the coastal area, are facing severe financial problems. I know that the Coast Ferry Co., for example, which serves the small communities and logging camps in my riding, has had severe financial problems and, in fact, last year had to withdraw service for a while because of these difficulties. Furthermore, it has been brought to my attention that Nootka Sound Services is also in trouble. The M.V. Uchuck, serving 14 logging camps on the west coast of Vancouver Island, is in imminent danger of going out of business. That vessel serves some 14 logging operations, including a native Indian logging camp. Tahsis gets about 60 per cent of its wood from these independents.

What I'm really suggesting to the minister, and to this government, is that the provincial government proceed to look at ways and means of ensuring that remote coastal communities will not be left stranded. To date this government, as far as I am aware, has displayed no interest in this matter.

There is a bit of a controversy going on at the moment surrounding the Princess Marguerite and the labour dispute. I do recall, Mr. Speaker, I think a Social Credit campaign promise that there would be no political interference in these Crown corporations, and yet I see an article here in the Victoria Times dated April 7:

"Since coming to power, the Socreds have loaded the board of the B.C. Steamship Co. with cabinet ministers — Transport minister Jack Davis, Deputy Premier Grace McCarthy,

[ Page 772 ]

Attorney-General Garde Gardom and Economic Development Minister Don Phillips."

Well, I'm very surprised. I'm very shocked. It smacks to me of political interference, Mr. Speaker. I think it's entirely possible. It's another matter that I hope to be discussing further in this House at a future date. One of the major things our government did when we were in power was, for social and economic reasons, to purchase the town of Ocean Falls. To quote the British Columbia Lumberman of April 1, 1975, they say: "Buy of the Century." I think I'll quote two or three short paragraphs from this article, Mr. Speaker, because I think it pretty well sums up what we in this House should know about Ocean Falls:

"Skeptics who believe Ocean Falls should have been turned into a penal institution will have to deal with Ted Vesak."

Ted Vesak, by the way, is the general manager of the Ocean Falls Corp.

"And that may not be an easy matter. Vesak, now manager, accountant, chairman of the Ocean Falls Corp. and former pulp and paper planner for Crown Zellerbach, will tell you straight out. He believes in the future of Ocean Falls. 'I've studied it inside and out', he says. He will also tell you that Ocean Falls is sitting in the middle of the largest untapped block of timberland left in the province's west coast.

"Vesak, who came to Ocean Falls to work for Crown Zellerbach in 1954 and later left the Vancouver head office job to go back, is convinced that the provincial government got the buy of the century. For the $1 million paid to Crown Zellerbach by the provincial government, the government received a five-storey hotel, a wood mill, a roundwood mill, a newsprint mill, schools, apartment buildings, subdivisions, a hydro dam, commercial buildings, recreation facilities and 45 acres of townsite valued at $50 million."

Now I know that this government is not going to let Ocean Falls go down the tube because some of the members, just to quote from Hansard when they spoke on Bill 164, page 2620, April 12, 1973.... For example, the hon. Minister of Labour (Hon. Mr. Williams) said:

Thank you, Mr. Speaker. We will support this bill. (Good.) As I listened to the Hon. Member for North Peace keep talking...,

The member for North Peace at the time was talking at some length, I believe, 14 hours as I recall — South Peace, sorry.

...I didn't know whether he was going to end up supporting it or not supporting it. But at least we have him fairly identified at the beginning of this debate.

As I listened to the Member for North Peace — that's what it says here, North Peace — I thought back over the months and the years that Crown Zellerbach was operating Ocean Falls and the difficulties that they had. I recalled that some many, many months before this last (1972) election the government of the day was made aware by Ocean Falls that they were going to discontinue operations of that mill and of that whole town.

I am quoting from Hansard, the hon. Minister of Labour.

Nothing was done. No move was taken by the former government whatsoever to stop the destruction of that community. However, in the few months before the election campaign, the then Minister of Lands, Forests and Water Resources (Mr. Williston) recognized the political implications of allowing that town to disappear and took some action — or tried to take some action.

Then there was an interjection by an hon. member and a reply by the hon. Minister of Labour.

That's right, Mr. Provincial Secretary (Hon. Mr. Hall). They weren't particularly concerned about saving the town, but with saving the seat.

It's typical of the former (Social Credit government) administration that they would think of the community as a conglomeration of physical assets that would appear on the balance sheet, and would fail to recognize that a community and its strength consist of the people in that community. They were prepared to stand by and see those people and that community destroyed.

Well, that's exactly right. Had it not been for the good fortune that the NDP was elected in 1972, Ocean Falls would not exist today, Mr. Speaker.

AN HON. MEMBER: Hear, hear.

MR. LOCKSTEAD: Excuse me just a moment, Mr. Speaker. Someone has made off with my notes. Here we are. Thank you. The former Minister of Lands and Forests and a director of the Ocean Falls Corp., the Hon. R. Williams, commissioned a study by Simons and Company to look into the best way to upgrade and modernize that plant and how to best utilize the timber and resources of the central coast area. This study, I presume, included how best to include Bella Coola and Bella Bella in the economic development of that area. The report was presented to the minister's office sometime last December and has not yet been tabled in the House, and I am asking the government to table that report now so that the people in Ocean Falls may have some indication as to their future under this government.

I stress as well, Mr. Speaker, that Ocean Falls should not be allowed to deteriorate or to be sold to a private corporation. In my opinion, the only way that a private corporation will purchase Ocean Falls is if the government is prepared to once again give away the vast timber resources of that central coast area,

[ Page 773 ]

and that must not happen.

Three or four days ago the member for Fort George (Mr. Lloyd) discussed the former Minister of Lands and Forests — and that was Mr. Williston under the previous Social Credit government — but I would like to point out to that member....

He failed to mention that it was during Mr. Williston's term in public office that large areas of this province were alienated from the people of this province, and at little or no cost to foreign-controlled companies, Mr. Member, and very often, in those days, without a real regard for the environment.

Discussing the environment, I see the Minister of Environment (Hon. Mr. Nielsen) is in the House, and I hope that that Minister of Environment will not let himself be bulldozed by other ministers, but make a sincere effort to co-ordinate the activities of the Department of Lands and Mines and all the other resource industries in this province.

The resources at Rivers Inlet, on the Kimsquit and on Chilco Plateau must remain in the hands of the people.

HON. A.V. FRASER (Minister of Highways): Stay out of my riding! (Laughter.)

MR. LOCKSTEAD: It's just a few trees. While we're on the subject of timber resources, Mr. Speaker, I would like to remind this government and the people of this province that a large number of tree farm licences will be coming up for renewal in the next three or four years. Tree farm licences, as you are aware, are 21-year leases on Crown timber issued with some abandon by the previous Social Credit government. I suggest to the government, through you, Mr. Speaker, that this government not even consider renewing a tree farm licence until the Pearse royal commission report has been received and tabled and all members of this House, and the people of this province, have had the opportunity to study and make recommendations on that report.

About 10 per cent of the people of my riding are native Indians and are located in four major communities and some smaller reserves along the coast. The NDP, while we were the government, were able to start to do some of the things that these people had requested over many years, For example: home acquisition grants; community recreation funds; the right to vote in local and school board municipal elections — that type of thing.

But more importantly, our government helped these people, at their request, on economic development, primarily by guaranteeing or underwriting loans for individual projects such as the purchase of the Artic Harvester, the hotel and co-op at Bella Bella and many other projects.

In regard to the Artic Harvester, Mr. Speaker, I know this matter was raised, I think, two days ago by the hon. Minister of Finance in regard to another question. He expressed concern over the urgency of the order-in-council that was passed December 3 of last year. Well, I would like this House to know that it was not only a matter of some urgency, but of extreme urgency. If that order-in-council guaranteeing a loan to SIB International, which is a company of the Sechelt Indian Band, had not been passed at that time, they, of course, would have lost the vessel. In order to borrow the money from the B.C. Credit Union, they simply had to have a government guarantee in order to obtain that loan.

I should point out to you that it's not a bad deal. The federal government has a five-year lease that runs six months of the year, so the work for the vessel is guaranteed. The other six months of the year the band hopes to use that vessel for fishing off the west coast.

I know that we did not accomplish all that we would have wished in the three years that we were the government, but we did make progress when you consider that, prior to our government, the native Indian people had never been able to meet with the cabinet of W.A.C. Bennett. I hope that this government will continue to follow the pattern and example that was set by the NDP government.

Interjection.

MR. LOCKSTEAD: Well, it was a good example, Mr. Member.

HON. K.R. MAIR (Minister of Consumer Services): How about the Indian band in Kamloops?

MR. LOCKSTEAD: Well, you'll have your kick at the cat. You can talk about the Indian bands.

Mr. Speaker, one other topic I would like to canvass very briefly is the MLA salary. You know, one of the most important, if not well-known, aspects of governing a Canadian province lies in providing the opposition with resources necessary to do its very important job. In a parliamentary democracy government members can very rarely criticize, even slightly, anything the government says or does. Thus the whole burden of providing alternatives, of expressing contrary public opinion, lies with the opposition.

In constituencies like Mackenzie, like mine, this task is added to the greater one of maintaining contact with thousands of citizens, dealing with their problems, conveying their thoughts on legislation and so on. Democracy cannot survive unless both these functions are carried out fully and energetically. That is why in the NDP, when we formed a government in 1972, ample provision was made for secretarial and research assistants to opposition members. In the face of considerable criticism we also increased the

[ Page 774 ]

incomes of MLAs so they would not have to spend time earning extra money to support their families.

I myself did not realize how important that matter was until, like all MLAs, I had to face the very heavy expenses associated with being a member, and constituents who visited me in Victoria will agree that I do not entertain them royally.

Interjection.

MR. LOCKSTEAD: Well, I could float a loan.

I was happy to be able to devote my whole time to being a member, and I was especially happy that the income, while not great, made it possible for an ordinary person like me to run successfully. Nobody wants a system, Mr. Speaker, in which only the rich can seek public office.

All of this is a lengthy explanation for why those of us in the opposition are so disturbed at the signs of the new Social Credit government, like the old one, which has no idea of the importance of providing opposition members with the resources that are necessary to do our job for you and the citizens of this province.

I believe, Mr. Speaker, that once again this job of representing the people will become the preserve of the rich, and ordinary working people will not be able to afford to seek office. You should remember that the majority of people in British Columbia are working people, Mr. Speaker. Reducing the salary of MLAs, particularly members in ridings like mine — large rural ridings — smacks to me as another means being used by the present government to throttle the opposition, along with reducing secretarial staff, cutting off mailing privileges and research assistants.

Mr. Speaker, before I conclude, I can see that this budget is going to greatly affect the people in my riding. For example, I understand that the anticipated highway projects such as the Langdale-Gibsons bypass is not to proceed this year. It has been postponed. Continued reconstruction of 101 and a number of other major projects will not be proceeding this year. I do hope that the Minister of Highways (Hon. Mr. Fraser) will stand up in cabinet and fight for a bigger budget. I think you deserve it, Alex — oh, Mr. Member. I know, Mr. Minister of Highways, that it is a tough situation in regard to you having your budget reduced like that. It makes it difficult for all of our ridings, but I believe there are some priority items in ridings like mine, which I hope to be discussing with you later, that really have to be done this year.

To conclude, Mr. Speaker, this government's budget is regressive, inflationary and will create unemployment. I cannot support it. Thank you.

Hon. Mr. Fraser moves adjournment of the debate.

Motion approved.

HON. MRS. McCARTHY: Mr. Speaker, I would appreciate having leave to file a report, if I may.

Leave granted.

Hon. Mrs. McCarthy presents the report of the Pacific National Exhibition financial statement for the year ended November 30, 1975.

HON. MRS. McCARTHY: Public bills and orders. Second reading of Bill 11, Mr. Speaker.

SOCIAL SERVICES TAX
AMENDMENT ACT, 1976
(continued)

MR. KING: To capsulize and recapitulate what I had to say last night, if I may, with respect to second reading of this bill, I had noted, Mr. Speaker, that the bill is a regressive measure. I believe the Minister of Finance (Hon. Mr. Wolfe) has at least tacitly agreed this to be the case, with respect to the increase in sales tax as a method of generating additional revenue in the amount of $200 million to the provincial treasury over the next year.

I pointed out, Mr. Speaker, that there are other avenues available to the government to raise this kind of capital. It seems to me that consideration should have been given to an increase in the royalties on export coal. I pointed out that those royalties had risen from a mere 10 cents a ton in 1972 to $1.50 per ton royalty payment in 1975. Despite that, Kaiser Resources realized a higher profit than at any time in their history. So they are obviously able to afford that kind of increased return to the province on a non-renewable resource.

I pointed out also, Mr. Speaker, that we can expect increasing volumes of export coal from British Columbia. There are contracts coming due which provide for ever-increasing volume shipments to mainly our customers in Japan to support their steel industry. Surely British Columbians deserve something more out of their resource development than simply the jobs that accrue from mining development. That can only come by way of royalty payments.

I think it's clear, Mr. Speaker, that when we have a situation as we do in the mining industry, particularly coal mining, where a new technology and a new method and approach to mining allows for the stripping of mountains rather than the old underground mining methods that used to be used. We've watched a major erosion of jobs through coal development, particularly. Due to the large shovels that they are able to utilize in bringing the coal to the market the jobs have drastically shrunk, and that's

[ Page 775 ]

true generally in the mining industry.

I recall a survey that was done on employment in the mining industry generally in British Columbia, I believe in 1969. It was a 10-year review of what had happened to jobs in the mining industry. While production had increased in significant volume, there had been a major erosion of the number of jobs necessary to produce and dig out the minerals and the subsurface wealth of this province. So it is clear that the jobs alone are not adequate recompense to this province in terms of the exploitation of our resources.

The only way, then, that we can ensure that a fair return is granted to our people is that not only taxation on the backs of people, through regressive sales taxes and so on, but also the natural resources of the province can help to pay for the social programmes which the people of this province deserve.

I pointed out, Mr. Speaker, that if in fact the government insisted on going the way of an increased sales tax, which this party certainly disagrees with, it would have been more equitable to use resource royalty payments or indeed increases in the income tax, because the income tax recognizes the low-income earner. It's a progressive tax which places the heaviest burden on those who are most able to pay, rather than on the backs of those who can ill afford it, whereas the bill we have before us under consideration today, Mr. Speaker, has exactly the opposite effect. Indeed, it bears more heavily on those who can ill afford a higher cost for the basic commodities which they require to sustain themselves.

I pointed out, Mr. Speaker, that in at least six states in the U.S.A., the first sales tax application — I believe to the first $500 — was allowed applicable to income tax returns, that way providing some exemption, some relief for those on low income.

It is interesting to note what the effect of a personal income tax would have been in this province, and I refer to the book entitled Provincial and Municipal Finances, 1975, published by the Canadian Tax Foundation in Toronto. In it they have some interesting tables, Mr. Speaker, dealing with levels of personal income tax.

The minister indicated that it would have been necessary to go from a level of about 30 per cent to about 38.5 per cent in income tax increase to achieve the same revenue that is being realized through the sales tax increase — $200 million. I point out that other provinces have relatively higher ratios of personal income tax than British Columbia. British Columbia, I think, is rated at just over 30 points, They're presently charging just over 30 points of the income tax, and other provinces are at a much higher level than that. The province of Quebec, for instance, is at 35.72 at the moment. Alberta, I believe, is the only one lower than British Columbia in terms of the provincial marginal rate for income tax. Alberta is at 12.22, British Columbia at 14.34, Prince Edward Island claims 16.92, Nova Scotia 18.10, Saskatchewan 18.80, Newfoundland 18.80 and New Brunswick 19.51.

It is clear that British Columbia requires a particularly and relatively low portion of income tax in this province, and it might well have been increased as the most equitable way of generating the revenue which the minister has indicated he needs.

There is another matter, Mr. Speaker, that I should mention, and that is the vendor's commission which is allowed on the sales tax collection programme.

It is my understanding that the vendor is allowed 3 per cent on the first $2,500 and 1 per cent on the balance over $2,500, in terms of his fee for collecting and the administrative work involved in transmitting the tax to the Crown. While I haven't been able to calculate the increase in the vendor's commission — and I understand the Finance department has not been able to do so either — it's obviously going to be a major increase in the revenue generated through the vendor's fee in collection of the increased sales tax because it means $2 million, and we're dealing with the percentage of that.

Now we don't object to sensible measures to support small business, Mr. Speaker, but I suggest that small businesses are not going to receive any major benefit from this. Their volume is so low that the cost of administration and collection of the sales tax would, in all probability, be a liability rather than any benefit.

On the other hand, it seems to me that the major beneficiaries of the vendor's collection would be those very large corporations and companies that do a large volume of business. Certainly I'm not persuaded that this province in any way should take from the poor, as it were, through a higher sales tax to assist large corporations such as Eaton's, Simpsons Sears, Wolfe Motors and perhaps some others. This seems to be a negative way of raising the kind of revenue and paying increased commissions to those who don't need it, really, at the expense of those who can ill afford it.

Interjections.

MR. KING: I'm sure that's not the Minister of Finance's objective, too. But I believe the effect is as I have stated it.

Mr. Speaker, there are many things wrong with the approach, as I stated at the outset. We certainly think a variety of alternatives and options offered themselves to the government, and which were riot only more equitable but perhaps just as simple and easy to collect, which seems to be one of the government's motives for introducing the increased sales tax — simply that it was a simple and easy way

[ Page 776 ]

of generating revenue.

I don't see any major complication in increasing the royalty payments on export coal. I see no great problem or complexity in continuing to push the federal energy commission for permission to increase the price of our export natural gas. Our government was able to attain these methods, and to very significantly increase revenue to the province over the past couple of years. Surely, if the new government's relationship with the federal government is as healthy and friendly as they have indicated to us, I see no reason why they should be confronted with a major obstacle either.

So there are a number of other alternatives that would be as simple in terms of application and collection, and that are unquestionably more equitable in terms of ability to pay. Therefore, I certainly oppose the direction taken by this bill.

I would note, too, in terms of the approach that there are other ways in which the sales tax militates against particular groups in society — groups, for instance, that are obliged to take meals on a regular basis in restaurants, groups that find themselves in this position as the result of the kind of work they do. I think of railroad people who, as a matter of course in their employment, are obliged to lay over in other towns, and as a consequence eat many meals in restaurants.

MR. J.J. KEMPF (Omineca): When did you pay sales tax on meals?

MR. KING: I believe there is a tax on meals above a certain level.

MR. KEMPF: No, there's not.

MR. KING: Well, that'll be very interesting to hear from the Minister of Finance. It was certainly my understanding that there is a tax on meals above $2.50.

Interjections.

MR. KING: That's off, is it?

That's fine. I hope you're correct. I was under the impression it was still on meals. I may well be wrong, but I'll certainly check into that further. That's one example; I cite a variety of them.

I cite the example of the young family — perhaps unorganized; they do not have the benefit of trade union representation and a union rate of pay — perhaps at the minimum wage, facing the great dilemma of trying to provide shelter for a family of perhaps four or five children.

Certainly the exemptions that are offered in terms of schoolbooks and clothing for people under 15 do little to recognize the higher household costs of maintaining a family of that size. Again, I think the approach just has to be wrong. I think the exemptions are a pale and inadequate way of attempting to militate against the hardship that accrues to the family in those kinds of circumstances.

I certainly hope the government will reconsider this bill. I hope they will look to their other options, which are manifold. If they are reluctant to increase royalty payments to an extent that would generate the kind of revenue required this year, certainly they could make a move which would provide part of that revenue and go the income tax route in terms of raising the portion of the revenue which is necessary to the provincial budget this year. It seems to me that's the most equitable and fair way, particularly, Mr. Speaker, in light of an announcement this morning by the Premier that an accord has been reached with the federal government on the application of further restraint against working people.

I find it extremely difficult on the one hand to ask for restraint in terms of wage demands — in terms, indeed, of prices by small businesses — when at one and the same time the government is increasing the cost of commodities which they must buy to exist and live on. This is a double standard for the government, Mr. Speaker, and I think it's an important one because surely, if the government expects cooperation in terms of the fight on inflation, they must demonstrate a fair and even-handed approach on all parties in combating inflation.

I suggest that the cooperation of our citizens, whether they be trade unionists or whether they be the business community, is predicated largely on their concept of fairness. The government has to be above reproach in demonstrating fair play and equity in appealing for restraint. Certainly they're in a very difficult position to convince anyone when they are introducing legislation presumably to impose restraint on people and at one and the same time a companion bill to significantly and almost brutally increase the costs to the lower-income groups and load additional hardship on them.

This, in my view, Mr. Speaker, will create a massive resentment and a massive resistance to the government's stated intention of mounting a fair programme to combat inflation. I regret that, because I believe everyone in this nation — not only in the province — is genuinely concerned about inflation and would be prepared to do something about it if a programme is demonstrably fair and cuts equally against all sectors of society. That appears not to be the case.

In considering the bill before us it appears that the large corporations, the large wage-earners of $100,000 and $300,000 a year — I understand there are a few of them in British Columbia working for

[ Page 777 ]

certain forest companies and so on — are required to contribute no more under the provisions of this bill than the family of five who are struggling to get a start in life, who are struggling to provide for their family shelter and health and dental care, and to live in some kind of semblance of self-respect and decency.

I think it's extremely regrettable, Mr. Speaker, that the government has taken this approach. I can assure you that our group in the House will be opposing this unless the government reconsiders and offers some practical suggestions for a more even-handed and a more equitable approach to those who can afford to pay in this province.

MR. G.R. LEA (Prince Rupert): Mr. Speaker, we were on the third reading of Bill 3 for so long — as someone else said, it's always a surprise to see the Finance minister (Hon. Mr. Wolfe) take his place — that it throws one off.

We on this side of the House, through our leader, have put our case that we will not support this legislation, Bill 11, to allow an increase in sales tax — or the "social services tax," as it is called — of two points, taking it from 5 per cent of every dollar to 7.

MR. LOEWEN: It's not 5 per cent to 7 per cent of every dollar. Not all dollars are involved in that.

Interjections.

MR. LEA: Mr. Speaker, when the member for Burnaby-Edmonds takes his place again, maybe he can make all the points that he would be able to make, which are probably not that many, but he'll have that opportunity as this debate continues.

I am against this bill for two reasons. No. 1: the reason that's been pointed out many times against this kind of tax — that it does hurt the lower-income and the middle-income people much more than it hurts people in a higher income bracket. There's no doubt about that,

You know, one of the things which surprises me, Mr. Speaker, is that the government and people who ran for the Social Credit Party said that they were going to put this province back on a businesslike basis.

AN HON. MEMBER: We will.

MR. LEA: Now I cannot understand, Mr. Speaker, how you can take that approach and then bring in tax measures that during a recessionary period are going to hurt every small business in this province. You cannot through taxes take money out of the hands of the consumer during a recessionary period and hope that the comer hardware store, or the comer clothing store, is going to come through that in a way that will allow him to carry on his business or her business. It just cannot happen. When you take $200 million out of the economy....

AN HON. MEMBER: What do you know about it?

MR. LEA: I deal with live business, Mr. Speaker. Now it's impossible to take millions of dollars out of the economy through taxation and hope to get this province moving again, as was the slogan of the Social Credit Party during the last campaign. You can't have it both ways.

HON. MR. MAIR: It wasn't on a businesslike basis before. You do admit that?

MR. LEA: Yes, it was. You see, the real difference, Mr. Speaker, is that some of the people on the other side who have been small shopkeepers think that you run the economy of a province and the government of a province the same way that you run a small business. That is not the case at all. If you were to bring the same kind of approach and rules to running a small business into government, it would be a sad day for the people of British Columbia because, in effect, businesses do not owe any social obligation to anyone.

MR. LOEWEN: What?

SOME HON. MEMBERS: Oh, oh!

Interjections.

MR. LEA: Now that is not to say, Mr. Speaker, that some people in small business do not recognize that there is a moral obligation, but there is no rule of business that says you owe a social obligation to anyone.

HON. MR. MAIR: No one says a person does either.

MR. SPEAKER: Order, please. The member for Prince Rupert has the floor.

MR. LEA: Mr. Speaker, I can see I've touched a nerve. Even the Minister of Municipal Affairs (Mr. Curtis) lost his voice and went back to the voice that he was born with for just a second. That's your normal voice, right?

Interjections.

MR. LEA: Now let's examine what I'm saying.

MR. LOEWEN: Absolutely insulting!

[ Page 778 ]

MR. LEA: How much money taken out of the economy with the new ICBC rates — out of consumer spending? How much money taken out of the economy if Bill 11 passes this House?

AN HON. MEMBER: What do you mean, "out of"?

MR. LEA: Out of the economy. Consumer spending, Mr. Member. If you don't understand that, then you don't understand anything. In a time of recession if you take money out of the economy and you lengthen that loop of circulation in the economy, then you are asking for trouble. Now if the money isn't out there in that economy to be spent in short-loop circuits during the recessionary period, then you're going to find that the small store owner, the small shopkeeper, will not be able to sell the produce because the money won't be in the pocket of the spender. Now if you can't understand that, then I don't know what you do understand. There's a rule of economics that during a recessionary period you hold back on taxation, even lower taxation, and during good economic times you raise taxes. You can afford to raise taxes and take some money out of that economy.

HON. MR. MAIR: ICBC isn't a tax.

MR. LEA: Every other jurisdiction in the whole western world does exactly what I'm suggesting you should be doing, but when we mention that that should be done in this House, all you get is a harangue from the other side that they're businesslike in their approach. They don't understand, Mr. Speaker, that they are responsible for the entire economy of this province and that they have social obligations. They have another obligation that other businesses do not have. In times of company recessions they can afford to lay people off. That is their duty to the shareholders — to make a profit at any cost and to lay people off if they need to be.

But there is another responsibility that government has, and that is to keep the economy going but at the same time try and maintain jobs in the economy and try to keep people in a standard that they can get along with without suffering the ravages of being poor. Now that's quite understandable, and I think that that government should recognize they do have a responsibility in government that they do not have in their own business, and that is a social responsibility to this province.

HON. MR. MAIR: Explain how ICBC is a tax.

Interjections.

MR. LEA: Oh, I wish he'd be quiet, Mr. Speaker, because if he didn't open his mouth we'd never suspect how stupid he really is. (Laughter.)

SOME HON. MEMBERS: Order, order!

AN HON. MEMBER: That one was on the list.

MR. SPEAKER: Order!

AN HON. MEMBER: He didn't say "arrogant, " Mr. Speaker — that's on the list.

MR. LOEWEN: You said that business people were stupid.

MR. LEA: I said you were, not business people.

MR. SPEAKER: Hon. member, I would ask you to withdraw the word "stupid" in respect to an hon. member of this House, as it was used just a moment ago.

MR. LEA: I withdraw, Mr. Speaker.

MR. SPEAKER: Thank you.

MR. LEA: But it is not on the list, is it, Mr. Speaker?

MR' SPEAKER: As a matter of fact it is.

MR. LEA: I couldn't even say "less than bright"? Am I allowed to say that?

MR. SPEAKER: Unfortunately not now, hon. member. You know that by the rules of the House, you cannot say it by another device or another means.

MR. J.R. CHABOT (Columbia River): Be a statesman, not an orang-outang!

MR. LEA: I'm not here to be a statesman, Mr. Member; I'm here to fight for the people of this province. You cannot be a statesman against a government that doesn't take a statesmanlike approach. You cannot do that. You have to fight fire with fire, and when they bring in legislation that hurts working people in this province to a greater degree than it hurts anyone else, then we have a right, on this side of the House, to stand up and try to fight for the rights of people in this province.

Now what do they mean by restraint, Mr. Speaker? Let's take a table from 1 to 10, and say that some people are living at 1 level and some people are living at the 10 level, in terms of the standard of living.

[ Page 779 ]

[Deputy Speaker in the chair.]

Interjection.

MR. LEA: Well, after this legislation I'll be down around the 3 level.

It's impossible, Mr. Speaker, to say to the people of this province: "Okay, some of you are living at the 9 level right now, and we are going to ask you to use restraint. Some are living at, say, the 4 level, and we are going to ask you to remain at 4, but we are going to allow the person at 9 to come down to 8½."

That's ridiculous, Mr. Speaker. It's just absolutely ridiculous to tax working people to the point where in some cases they cannot even afford proper clothing for themselves, when at the same time the kind of restraint that the government is putting in will only stop the rich from taking one less trip to Hawaii. They may have to buy a Chevrolet instead of a Cadillac, or they may have to buy a Volkswagen instead of a Chev. Now what kind of restraint is that, Mr. Speaker, when you're asking working people to suffer and asking the rich to go one less time this year to Hawaii? Is there any equity, Mr. Speaker, in that kind of programme? I suggest that there is none at all.

I'm going to say another thing on this sales tax. I know, and I think everybody in this room knows, that it's wrong to put it up. Furthermore, the tax is wrong in the first place, and I, as part of the last government, will take some degree of blame for not starting point-by-point to get rid of that tax altogether, instead of increasing that tax. I still believe that we should have begun to lower that tax, point-by-point, and keep with the graduated income tax scale. Even it has some inequities in it, because as we know, if you're in business in this province, there are certain expenditures that you can make that are income-tax deductible that everyone knows aren't probably spent on that business. So anybody who makes money on a T4 slip is in much worse shape than a person who can file his tax returns under a business. Everyone knows that.

HON. MR, MAIR: Just like an MLA.

MR. LEA: I know that because I've been in business. It was lawful and I took advantages, Mr. Speaker, of those areas in the transit situation....

DEPUTY SPEAKER: Mr. Member, may I interrupt you just long enough to remind hon. members of the House of standing order 36: "Every member desiring to speak is to rise in his place uncovered and address himself to Mr. Speaker." If members wish to make some statement regarding....

Interjections.

DEPUTY SPEAKER: Order, please! I address myself to the Minister of Consumer Services (Hon. Mr. Mair). If the minister wishes to speak, the standing orders require that he shall stand and address himself to the Speaker; other than that, he is not to interrupt the one who is on his feet. Just a reminder for those who are new to the House.

MR. LEA: Mr. Speaker, I appreciate that. Although I know it offends the Chair to break one of the rules, at this point it doesn't offend me, because I doubt very much whether any of those members will have the guts to stand up and defend this increase on this tax.

AN HON. MEMBER: Hear, hear!

MR. LEA: I doubt it. But if they do, Mr. Speaker, it's only between us in this House — we will not tell anybody in their constituencies what they've done. We won't tell anybody.

MR. G.H. KERSTER (Coquitlam): Don't bet on it!

MR. LEA: I'd be very interested if the Minister of Finance, when he sums up, could point out any economist who says that a sales tax on retail goods is a fair and equitable tax. I would like the House to assign the Minister of Finance to try and bring back an authority from any economist who says that this tax is fair and equitable. I doubt very much whether the minister can bring back that kind of reference, except from Major Douglas.

Interjection.

MR. LEA: I doubt it. Okay, I'd appreciate it. Bring it back; I'd like to see where any economist says that the tax that is in effect, and the one that you are proposing, is a fair and equitable tax to working people. I'd like to see it.

Interjection.

MR. LEA: The hon. Liberal leader (Mr. Gibson) says that he couldn't find it. I've looked; I couldn't find it.

HON. E.M. WOLFE (Minister of Finance): He hasn't read very much!

MR. LEA: He's read a great deal more than some members in this House, I suspect.

Now as I said, there are two reasons. First, it isn't an equitable tax, because it affects people at the lower end of the scale more than it affects those at the top; affects people in the middle income more

[ Page 780 ]

than it affects those people at the top.

When you are asking for restraint, if you do not put into effect a taxation system which is fair to everyone, then people will not respect the government that places that tax on the books. Regardless of the party that is in power, I believe it is incumbent upon government to try and bring in legislation that will have the respect of people in the province, no matter what that legislation deals with. Because if they do not, as a government, take that approach, then every bit of legislation brought in after that by that government or following governments will be much easier criticized by people in general. They'll have less respect for the law when they know that governments are bringing in laws that are basically unfair to working people, low-income and middle-income people. I think every government should take that into consideration when bringing in any law.

I suggest that the people of this province will consider this not a fair taxation or a fair bit of legislation, and this will therefore hurt the credibility of not only this government but the governments that follow, and other pieces of legislation to follow.

The second point I brought up is that you can't through government continually take money out of the consumer spenders in this province during a time of recession and hope.... And the backbone of this province, Mr. Speaker, are the working people and the small businessmen in this province. That's the economic and social background of this province — the small business people and the working people of this province, not the multinationals, not the multinational corporations that come in and rape our province, take the money out, plunder and rape it, sometimes with the help of the provincial governments and national government.

As legislators our obligation is to the backbone, the small businessmen and the working people of this province. I suggest to you this tax, as I mentioned, will hurt the working people directly and hurt the businessmen in this province indirectly by taking money out of consumer spending. It seems to me that this government is hell-bent on taking every dollar it can out of the working man's pocket, and that has to affect the sales of small business people in this province.

What happens then, Mr. Speaker? Corporation taxes will go down. I'd be very careful, Mr. Minister, through you, Mr. Speaker, when trying to come up with what kind of sales tax you are going to get back this year, because if they don't have the money to spend, that tax revenue will probably drop to the province too. Income tax will drop because the shop owner, if he isn't having the sales, will have to lay off — the last person hired is the first person fired. And it's going to be a cumulative effect.

What you're doing to this economy is going to put a strain on the purse of the Minister of Human Resources (Hon. Mr. Vander Zalm) like you have never seen before, because you are going to have to put more money out; you are going to take less money in. That is, in effect, what you are doing with the kind of taxation measures you are putting into effect during a recessionary period.

I submit that it's absolutely wrong! It's the wrong way to go. You hurt working people directly, hurt the business community indirectly, and the revenues of this province indirectly. You will pay more money out of spending for social services from government because of what the taxation policy you are bringing in does to the economy of this province.

I really think that you should withdraw this bill. Withdraw it, and do as other members have suggested: get your revenue from other sources — coal, natural gas. Take a look at the income tax scale and see if you can't work something out that will tax the rich a little more than it taxes the average person in this province. Take a look at it. Don't be ashamed to do it.

You know, the former Premier of the Social Credit Party (Hon. W.A.C. Bennett) often took a second look. He didn't suffer for it. As a matter of fact, he gained some stature for doing just that. I suggest, Mr. Speaker, that the hon. Minister of Finance could gain some stature in this province now by saying: "I've listened to reasonable argument. I've changed my mind. I'm convinced now that it is unfair, not only to the people, but to the economy of this province, and I'm going to change it." The stature he would gain from that would far overshadow what has happened in the House thus far in this session.

AN HON. MEMBER: The minister is up — he's a regular Jack-in-the-box.

MR. GIBSON: I don't know why the minister is so anxious here; there's a lot of good advice yet to be given to him.

Speaking earlier on this morning in another debate....

Interjections.

DEPUTY SPEAKER: Order!

MR. GIBSON: In another debate the hon. member for Burnaby-Edmonds (Mr. Loewen) had something of great interest to say. Sorry he's not here right now, but I would like to quote his remarks because I'm like the previous speaker. I consider him to be the leader of the intellectual caucus of the Social Credit Party, and he stated that the art of taxation, Mr. Speaker, is to pluck the goose in such a way as to get the largest amount of feathers for the least amount of hissing. Mr. Speaker, the people of B.C. are certainly being

[ Page 781 ]

plucked by this sales tax.

We heard, on the moving of second reading, a pathetic defence by the Minister, lasting not longer than five minutes...

AN HON. MEMBER: Shocking!

MR. GIBSON:...of this new imposition of $200 million of the most regressive possible tax on the backs of British Columbians.

AN HON. MEMBER: Hear, hear!

MR. GIBSON: A completely inadequate justification...

AN HON. MEMBER: No justification.

MR. GIBSON:...of the government's moves, because I believe there is no justification for this tax at this time.

HON. MR. WOLFE: Are you going to vote against it?

MR. GIBSON: Yes, I'm going to vote against it, Mr. Minister, but wait until the end of the story.

Interjections.

MR. GIBSON: Wait until the end of the story. Don't ask to ruin the suspense.

MR. G.V. LAUK (Vancouver Centre): He's trying to muzzle the opposition.

Interjection.

MR. GIBSON: Will you model one for me?

DEPUTY SPEAKER: Please address the Chair, Mr. Member,

MR. GIBSON: Thank you. During the speech of the hon. second member for Vancouver-Burrard (Mr. Levi) a minister opposite — I think it was the Minister of Consumer Services — called out: "Find a better way." They've already been told a better way, Mr. Speaker. They appear to have no memories, but we'll go through it again briefly.

The minister in his opening remarks said that this decision was made, and I think I quote these words properly, "with great reluctance," and he said the reason was, and I think again I quote properly: "because of a substantial shortfall in revenue." I say, Mr. Speaker, that neither of these reasons is correct; neither is valid.

The decision was made for two reasons — first of all, to rejigger and raise the tax structure in British Columbia, for reasons of the government's which I will get into later, and secondly, to raise that tax structure in such a way and in such a time as to put the blame on the former government.

Now, Mr. Speaker, maybe they can put the blame for the deficit on the former government...

Interjections.

MR. GIBSON: ...but they can't put the blame for the new tax structure on the former government. This has to rest squarely on their shoulders, and this 2 per cent sales tax is wrong.

Was it done with great reluctance? I suggest it was not done with great reluctance, Mr. Speaker.

Interjections

MR. GIBSON: I suggest it was a political delight to the government to raise this particular tax at this particular time...

AN HON. MEMBER: Watch the goose.

MR. GIBSON:...because they thought they could escape the opprobrium that normally attaches to such a move by blaming it on the former government.

AN HON. MEMBER: Kill the goose....

MR. GIBSON: But they won't be able to.

Is there a substantial shortfall in the budget as contemplated that needs to be looked after by this additional $200 million? I say there is not, Mr. Speaker, and I use the Minister's own figures to arrive at that conclusion. The question is: is an extra $200 million required?

The Minister suggested that the existing tax system of the province, before amendment, by virtue of the 2 per cent sales tax and other minor amendments, would generate....

AN HON. MEMBER: Other minor amendments?

MR. GIBSON: Other minor amendments in dollar terms, Mr. Minister. I'm glad the minister across the floor pointed that out. This sales tax is by far the largest revenue increase in this budget, just as the regressive ICBC rates were much the largest increases in user charges which don't appear in this budget. But the Minister gave us some citations as to how the automatic progression of the provincial tax system yields extra revenue in a time of growth.

He noted that in 1975 the gross provincial product increased 10 per cent and revenues went up 11.2 per cent. In other words, at the 10 per cent level of

[ Page 782 ]

provincial growth, revenues rose more than 10 per cent. He then cited in 1973 and 1974 another benchmark on the graph, and I would invite you, Mr. Speaker, to draw a mental graph and connect these points, when the gross provincial product was growing at an annual rate of around 18 per cent and the tax system was throwing off an increased yield of 23.9 per cent, again significantly above the growth rate.

If you put those two things on a chart and then have a look at what the minister suggests will be the growth figure in the economy for the next year, which is 14 per cent, what number do you arrive at as the probable growth in the yield of the tax system? You do not arrive at the minister's predicted figure of 13.7 per cent. This figure is ridiculous on the face of it because it is less than the growth in the gross provincial product, when none of the other figures he gave us were — a very, I would suggest, distorted figure, Mr. Speaker.

Rather, you arrive at a growth in the provincial economy — or rather in the provincial tax yield — of 16.7 per cent, a very significant difference, Mr. Speaker, a difference which, if you calculate out, you will find that the revenue increase one would contemplate by the automatic operation of the existing tax system will be in the coming year $104 million more than the minister has predicted in his budget. I suggest that there has been a clear underestimation of revenue here. I suggest that there is $100 million there in that budget that is going to be produced, which thereby obviates the need in revenue terms for 1 percentage point of the sales tax.

Now the new tax is to raise $200 million. Where is the other $100 million to be found? The other $100 million is to be found in this coming year by borrowing against capital projects, not against current account, not against operating account, but recognizing that all the problems of the past can't be picked up in one year. It's just too much of a shock to the provincial system.

Interjection.

MR. GIBSON: Rough economic moves, Mr. Speaker, always bring in their train waste, because the adjustments that people are asked to make are too much for them to make without altering their patterns tremendously. Therefore the right thing to do was to admit that the growth of the economy next year will bring $100 million more than the minister has predicted and find the other $100 million by borrowing against capital projects, against new highways to be built, against new public buildings to be built and so on. The authority, I might add, is now there as a result of the passage the other day of Bill 3 and other borrowing authorities of the government. Bill 3, of course, provided only for matters lost in the deficit of last year, but other sections of the Revenue Act and access to certain...

MR. D.G. COCKE (New Westminster): They've got draft legislation over there that would permit them to do that.

DEPUTY SPEAKER: Order, please.

MR. GIBSON: ...of the ICBC accounts and certain of the housing funds, as the hon. member for New Westminster (Mr. Cocke) says, and so on would make this possible.

Their alternative of going ahead with the sales tax has an impact which is extraordinarily severe. As many speakers have said, and I will not repeat their arguments, it is regressive. It bears much more heavily on the low income person than the high-income person. Beyond that, Mr. Speaker, there was an attempt in the introduction of this sales tax increase to suggest that, of the $200 million, $90 million, almost half of it, would be paid for by corporations.

AN HON. MEMBER: Nonsense!

MR. GIBSON: Mr. Speaker, that is absolutely nonsense. Corporations do not pay taxes of this kind. They pass them on to their customers, or they pass them on to their shareholders, or they pass them on to their employees in the form of lower wages. Corporations are not charitable institutions. They do not absorb taxes. They pass them on in every case.

AN HON. MEMBER: Every schoolboy knows that.

MR. GIBSON: And every schoolboy knows that. The Minister of Finance (Hon. Mr. Wolfe) ought to know that. He ought not to import such blatant horse feathers into the budget debate.

AN HON. MEMBER: Hear, hear!

AN HON. MEMBER: Goose feathers.

DEPUTY SPEAKER: Please proceed.

MR. GIBSON: So let's take that as established, Mr. Speaker. Corporations do not pay that $90 million tax. It is going to be paid by the ordinary person of British Columbia in the form of higher prices for the services they receive from the corporations or in the form of lower dividends to the shareholders of the corporation or in the form of lower wages to the people working for that corporation. That's clear. There is no question about it.

Once we admit that, what is the impact of this new tax on the cost of living in the province of

[ Page 783 ]

British Columbia? The hon. member for Burnaby-Willingdon (Mr. Veitch) suggested the other day that his calculator gave a little bit different results as to the incidence of this sales tax on income than did mine. Mr. Speaker, you have to start from this understanding. The sales tax is going to take $200 million out of the income stream of the province of British Columbia. The personal income for 1975 as reported in the budget is $14.9 billion. I don't have a figure for British Columbia, but on a national basis personal disposable income, which is what the ordinary person has left after taxes, runs about 80 per cent of the total personal income. If personal disposable income is what you have to spend, it's what the retail sales tax is levied on. Personal disposable income in British Columbia, therefore, is in the neighbourhood of $12 billion. From that, of course, should be deducted a certain amount of funds which are saved rather than spent, and the national average is around 7 or 8 per cent.

So we are looking at a round $11 billion of personal, disposable, expended income in the coming year that this tax will be operating against. The incidence of that tax, Mr. Speaker, is therefore clearly in excess of 1 per cent overall and, I would submit, closer to 1.3 per cent. Mr. Member for Burnaby-Willingdon (Mr. Veitch), run that one through your calculator and see what happens.

The increase, Mr. Member — 1.3 per cent. I don't think he has his calculator with him, Mr. Speaker; neither do I. But one can do simple sums in their head. If you divide $200 million by $11 billion, that's about what you get.

As a matter of fact, you get more than that, don't you? Let's look: 200 by 1,100 — that's very high. It's a very high figure.

Mr. Speaker, the next point I would suggest to you is that this tax is never going to come off. The history of sales taxes in this country, and around the world, has been that they never come off. So we are being asked to make what is an irreversible step here on a figure that, as I am doing the calculations in my head now, is much closer to a full 2 per cent increase than I had thought. It's a very serious increase, and it is unnecessary, as I have suggested, Mr. Speaker, and it is wrong.

But I don't necessarily expect the government to buy that argument. I can appreciate that the government might say: "Well, the tax system might not generate the yield you say it will, and we can't take that chance." But I have a solution for them, Mr. Speaker, which will get them off that hook without the necessity of the House, at this time, taking the irreversible step of increasing that sales tax by 2 per cent that I believe to be wrong. We all know, Mr. Speaker, that cash reserves of the province are certainly adequate for the next six months. Given the ordinary operation of the tax system, given the $400 million authority just issued to the government pursuant to the passage of Bill 3, given the $170 million plus currently lying in the ICBC coffers, we know that cash is adequate for the next six months. We know that a sales tax put on now will not be removed.

Therefore I submit to this House, Mr. Speaker, that there is only one proper procedure, given these facts, given that the government has not made a case for the urgent need for these funds and given that a strong case has been made that they will never be needed at all: that logical move is to defer for a period of six months the decision — which the government says must be taken and I say does not have to be taken — to increase by a full 2 percentage points, which is to say 40 per cent of the existing tax rate, the social services tax on the people of British Columbia.

I would therefore move, Mr. Speaker, that in the standard motion that the bill be read a second time now, the word "now" be deleted and the words "six months hence" be substituted.

DEPUTY SPEAKER: The proposed amendment to the bill in the name of the member for North Vancouver-Capilano says that the final word in the motion shall be deleted and that "six months hence" shall be substituted. The amendment appears to be in order.

MR. GIBSON: Thank you, Mr. Speaker. I will just say one further thing before sitting down. I have done my long division while Your Honour was considering the question of whether or not the amendment was in order. The impact on the disposable income of British Columbians is closer to, and indeed slightly in excess of, 1.8 percent.

MR. LAUK: Mr. Speaker, I support this amendment, and I am pleased to do so. The hon. Minister of Finance and his government have brought forward an increase to the sales tax which logically but unhappily affects large families and those with lesser income than the average, and indeed cuts drastically, as the Liberal leader pointed out, into the income of the average family. I cannot understand why this bill should be read now. When the government says, "Find a better way," it is obvious to this side of the House, Mr. Speaker, that they have not done the research or the investigation necessary to find a more equitable taxation structure in this province. It is for that reason that this amendment is a good amendment and that we urge that the Minister of Finance hoist this amendment and not read it a second time but wait for six months. In that six months he and his department and colleagues should be constructively working to find a better way. Perhaps while they are considering it, Mr.

[ Page 784 ]

Speaker, they should consider the arguments that have been made by the members of the opposition for alternative taxation systems to increase the revenues to the province.

It is clear from the remarks made by the Minister of Finance that he did not have the time to bring down what he described as an earlier budget. He says: "We only had three months in office, and we had to rush this budget, and we brought it down late." That's why we passed the interim supply bill, Mr. Speaker.

I fear, Mr. Speaker, that this government is moving in haste in too many directions. They raised the ICBC rates with little thought, I say with respect, Mr. Speaker. They have brought down the budget — granted late, but obviously ill-considered, to the minister through you, Mr. Speaker.

I urge the minister to accept this motion to not read this bill a second time for six months. I urge the minister to consider the alternative taxation structures that have been suggested by the members of the opposition. Indeed, I plead with him: let's take a step in a more positive direction in terms of taxation. Certainly we as the NDP are open to some criticism in this regard. We accept that criticism, and we say to you that if you will hoist this bill for six months, we will work and support you in finding alternative tax structures in this province. We are willing to do that; we are willing to become as constructive as we can in supporting that approach.

We agree with you that you didn't have time to bring down a proper budget. We agree that you didn't think out properly what you were doing when you raised the sales tax. For that reason, we urge the government to accept the Liberal leader's amendment.

Do you know that Britain, Mr. Speaker, is reducing taxes under a social democratic government? Why are they reducing taxes? Why are they reducing the sales tax? I wonder why the Minister of Finance hasn't asked that question of himself and his colleagues, because the answer is there. The answer is: to increase and strengthen the consumer purchasing power and thereby increase the activity in the economy and get us rolling again. We would support that. We would do so constructively as Her Majesty's Loyal Opposition.

The government has done the opposite. I think although we have been very critical of this government for the increases they have made in ICBC, for lifting the food price freeze, for allowing gas prices, propane and fuel to go up, for allowing Hydro increases, we even will turn our head for the moment on the betrayal of an election promise to freeze taxes. If this government will lift this bill we will work positively to determine a better tax structure for our people — the people we all represent in the province of British Columbia.

We look sadly at the budget, Mr. Speaker, in relation to Bill 11. The sales tax is perhaps the worst or the best example, depending on how you view it, of what's wrong with the budget. What's wrong with it is that rather than determining creative approaches to taxing ordinary people in this province, they have turned to traditional approaches. If I may paraphrase the Rev. Archer's prayer this morning, Mr. Speaker, he said: "Save us all from being afraid of a new idea or unreceptive to a new thought, lest we pull down the shades of our minds and exclude the light."

Mr. Speaker, I think it's appropriate that we do work together as responsible legislators in this province and relieve the ordinary consumer — the ordinary person. I'm disappointed that the Minister of Finance is distracted at this point, because I make these remarks very sincerely to him. On this side of the House, Mr. Speaker, we have seen this government act in a retrograde fashion using old ideas, uncreative ideas. Who suffers? The low-income family, the low wage-earner suffers. We have had ICBC increases beyond anybody's expectation. They lifted the price freeze on government rates, Hydro and transit. Food prices were allowed to move upward, and at the same time they have been a partner of the federal government, it seems, in freezing wages.

Well, how can they freeze wages on the one hand and raise these rates of taxes on the other, and call themselves an equitable government? I don't think it was a malicious act. I think it was a hasty, poorly researched, not-well-thought-out act on their part.

I charge them with the responsibility to work cooperatively and positively with opposition. Let's stop the mud-slinging, let's stop the name-calling, and let's get down to work like responsible legislators.

The sales tax is considered, Mr. Speaker, by even the most right-wing governments across the western world as a regressive and unduly punishing tax on the lower-income families.

The economic impact is obvious. Consumer strength is lowered. We don't have the capacity to create the activity. This tax, together with increases in rates in other areas, deals death blows to the economy. Now if they could take their blinkers off, if they could draw up their shades, which the Rev. Archer referred to so eloquently this morning, they can see the alternative suggested by the Liberal leader (Mr. Gibson) and by members of the opposition.

I could think of no other person more prominent in the field of knowledge of taxation, Mr. Speaker, than a man who has been awarded the highest honour Canada can bestow on one of its citizens — the Order of Canada. He is a distinguished citizen who we all, on all sides of the House, believe contributed a great deal to the British Columbia economy, to its government and to its society. I consider him to be one of the experts in British Columbia with respect to taxation. Let me quote you some of the things that

[ Page 785 ]

he said about the sales tax.

He said, Mr. Speaker, when the sales tax was first proposed many years ago: "The sales tax is an easy way to get revenue, but a dangerous way for a government do do business, since it did not call for careful budgeting. It will add fuel to the fire with new demands for increased wages and industrial strife." The more things change, Mr. Speaker, the more they stay the same.

HON. MR. CURTIS: When was that?

MR. LAUK: "It should have imposed" — meaning the government — "an unearned increment tax," not taking money from the poor man, but from inflationary dollars. He says: "This is an unfair tax, the sales tax. It falls heaviest on large families least able to bear it. It is hard on farmers, whose taxes should be at the lowest possible minimum but who will have to pay this tax on all their tools, tractors and machinery."

W.A.C. Bennett said that, Mr. Speaker, and he said that on March 20, 1948, when he was a member of the Progressive Conservative right-wing coalition.

In the same debate, Mr. Speaker, he said eloquently and knowledgeably....

MR. WALLACE: Come on back, fellows, come on back.

MR. LAUK: Mr. Bennett urged the government to withdraw its budget for the next fiscal year, an unprecedented action to bring in a new budget without the ill-considered, unfair, retrograde sales tax — which is exactly what the Liberal leader is proposing, Mr. Speaker.

What is the alternative that W.A.C. Bennett offered to that Legislature in this very room more than 20 years ago? He said there were many other ways the government could raise money, and he suggested increased taxes on mining and forest operations.

Mr. Speaker, I think that a man who has distinguished himself in this Legislature and in the history of British Columbia should not be dismissed as an old-timer. We shouldn't consider that his advice is no longer valuable to the citizens of the province of British Columbia. I think that we should accept his advice today because, as I have indicated, it is even truer today than it was in 1948. It is truer today with the pressures on the lower-income families. With these increases in rates plunged on the ordinary family all together in a few months, this becomes not only a wounding blow to those families but a death blow to those families.

I would urge every member of this House to consider the remarks of Mr. W.A.C. Bennett and consider this amendment as being a useful, constructive one giving this Legislature pause for a period of time for six months to get to what Mr. W.A.C. Bennett described in 1948 as a call for careful budgeting. We expected the government to live up to its election promise and not increase taxes. We knew, at the same time, that it wouldn't be easy in these times, that it would call for careful budgeting, for creative thought and for careful consideration of how we can tax the people in the most equitable fashion possible.

It is clear from the remarks from the Minister of Finance, and he has admitted it, that they didn't have time and that they were doing the best they could. All right; we accept that. But we say this: in six months, and within that six months, your Department of Finance and all of the experts available can be brought together to set up a tax structure that would be second to none in this country — second to none in its fairness and equity to ordinary people.

I submit, therefore, Mr. Speaker, that all the members of this House should support this very considered and reasonable amendment by the hon. Liberal leader (Mr. Gibson). Remember, don't be afraid, Mr. Minister of Finance, through you, Mr. Speaker, of a new idea, nor be unreceptive to a new thought, lest you pull down the shades of your mind and exclude the light.

DEPUTY SPEAKER: Just before the Chair recognizes the hon. member for Oak Bay, may I alert the members of the House as to the procedures in which we are now involved. We are now on the proposed amendment to the bill and, as such, we must more properly limit the scope of our debate to the wording of the amendment. We must be discussing the reasons why this bill should be considered six months hence. I didn't wish to interrupt the previous speaker because he was doing so well.

MR. WALLACE: Might I ask, Mr. Speaker, if you are anticipating that I might not do quite as well? (Laughter.)

I'll address my remarks very clearly to the amendment because I want to have the opportunity to speak on the principle of the bill in second reading. So I shall speak on the amendment. This is the advantage that a member has, Mr. Speaker, over the Liberal leader who has given up an opportunity to speak twice by introducing an amendment.

I strongly support the amendment for the following reasons. There has been debate in the House as to exactly what the deficit facing the government is but, even more importantly, debate about what revenue might be expected out of the economy in the coming fiscal year. I already raised the point in the budget debate that between 1974

[ Page 786 ]

and 1975 the growth in revenue from provincial personal income tax, at a time when the economy grew by less than 1 per cent, was something of the order of $155 million. Between the 1975-76 fiscal year and the projected 1976-77 fiscal year, the growth in provincial income tax revenue is projected to go from $658 million to $815 million, which is almost the same increase despite the fact that the budget, on page 13, expects a possible growth in the economy — a real growth in the economy — of 4.5 per cent, four and a half times what it was between 1974 and 1975 and what it was between 1975 and 1976.

I won't repeat all the arguments you have already heard about the unfair nature of the sales tax. I think it's very obvious that people in lower income groups have less flexibility with their personal budgets. They are in a position to buy a much higher percentage of essential commodities and fewer luxuries, and if you increase their contributions to sales tax by 40 per cent, it is a very serious financial penalty to these lower-income groups. But that really isn't the essence of the amendment.

The essence of the amendment is to suggest that since there are various unknown factors of considerable dimension in the coming fiscal year in regard to government revenue, if this bill were delayed for six months and if the economy in that six months continues to pick up at something of the rate of 4.5 per cent, and since personal income tax revenue is one of the first and earliest ways in which the provincial government gets possession of the tax revenue, as contrasted to money from cost-sharing programmes with Ottawa and many other forms of revenue, it would seem to me that six months from now the government would know one thing: they would know whether the economy is picking up at approximately 4.5 per cent.

If that were happening, as I am sure the Minister of Finance would agree, he would know from month to month just what increase in personal income tax revenue was accruing to the government.

If it looked as though the revenue might exceed the projected $815 million, which is your projected figure for income tax revenue, and I can refer you to the page....

It's on page 31 at the bottom of the page. Budget estimate for 1976-77 is $815.9 million from personal income tax. I'm just suggesting, Mr. Minister of Finance, through you, Mr. Speaker, that six months from now you will have a much better idea as to whether the projected pick-up in the economy with diminution of unemployment and more people working, and more people earning money and more people paying income tax...and that $815.9 million is probably underestimated.

Let us assume, for the sake of argument, that the economy does improve and that is underestimated by $100 million; you immediately know that the $200 million that you thought you required from increased sales tax could at least be cut in half.

If — let us hope — the economy does pick up by 4.5 per cent, you might not need the $200 million from sales tax at all. I'm not trying to be smart-alecky and say that we know that the economy will pick up by x, but the Minister of Finance has already predicated some of his tax proposals on the fact that lumber markets are picking up in the United States. We just heard a statement in the newspaper the other day that housing starts in Canada in the month of March are up by 63 per cent, and there are indications that the mining industry is looking forward to renewed investment and expansion.

So there are reasonable grounds to assume that the minister's figure, projected for personal income tax revenue, is too low. So, Mr. Speaker, I can't think of a better way of a government exercising prudent options than by looking at the prospect six months from now, re-evaluating its projected figures for income tax revenue, and if they're much higher than are presently projected in this budget, there might not be the need to impose sales tax as a means of getting another $200 million out of the economy.

Another factor which is perhaps less important, but I think should be considered, is that if the people of British Columbia knew that six months from now the sales tax might go up by 2 per cent there would be much increase in consumer spending and buying in the next six months, which in turn, in itself, would be a boost to the economy and stimulate employment as people start to buy goods and services in the awareness that six months from now they are going to be more expensive.

I heard some interjections in the debate which suggested or implied that, of course, this is something of the order of a temporary measure to get us out of our present financial mess. I think it's very important that we get one thing very clearly on the record. The examples of tax increases of this nature ever being reversed are very unusual. I'm not even sure that there are any examples where a tax in the nature of a sales tax, which is so easy to impose, the money is so easy to collect.... You have a cheap tax collector in the form of the retail merchants of a province, who get paid a very minimal commission for collecting the money on behalf of the government. So it's easy to apply, easy to collect and relatively easy to calculate the increased revenue from x per cent increase.

I think the best example of a tax that's never been repealed, as I recall — and I may be wrong on the date.... But it seems to me that income tax in Britain was introduced during the First World War as a temporary measure — or was it Canada? But I do remember reading somewhere that the first introduction of income tax was described as being a temporary emergency measure during the First World War.

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Well, that temporary measure, Mr. Speaker, seems to have endured, and I have the horrible feeling that it's about to endure for another 50 years or more.

So it would be misleading to imply that we have a temporary problem in raising money, and that once the deficit of the present situation is corrected we can perhaps look forward to the day when the 7 per cent will again be 5 per cent.

But as far as the amendment is concerned, Mr. Speaker, I do believe, I really do feel sincerely, that there is a lot of merit in remembering and comparing the projected figures on personal income tax in a year when we expect a 4.5 per cent growth in the economy with the increase of the previous year, when there was less than 1 per cent. There is a real possibility.... I'm not saying that it will come to pass. I hope it will, because it means that the economy is on the move. But if indeed unemployment is reduced and that figure of $815 million is proving to be underestimated, six months from now the Minister of Finance might well feel confident that in the course of the full 12 months of the fiscal year, that $815 million might well be $100 million higher or even $200 million higher, which would make it no longer necessary to have a sales tax increase.

But at the same time I agree that today it's extremely difficult, if not impossible, to know how accurate that projected figure of $815 million is. But it seems to me that an increase in sales tax is imposing hardships at a time of restraint, particularly on people earning minimum wage and people on Mincome. I worked out the figures approximately in the budget speech. It was almost, I think, 250,000 or 200,000 people who were either on Mincome, social assistance or minimum wage, and then, of course, people just above minimum wage, who are maybe earning $3 or $3.25 or $3.50 an hour, must constitute a very sizable number of the population also.

So it would seem that if six months is all we need to try and avoid a real hardship to hundreds of thousands of citizens in the province, when, as I feel, there is the real opportunity or a real chance that revenue from other sources will be higher than you've estimated, would it not seem reasonable — what harm or what loss could there be — at least to postpone this for six months? If at the end of six months you can turn to the opposition and say, "Well, look, these other sources of revenue are not any higher than we estimate, and we still need the $200 million," then it would seem that you could impose the tax at that time and be sure at least of collecting $100 million in the remaining six months of the fiscal year.

I'd like to talk on the principle of the sales tax as such, Mr. Speaker, but these are my comments as far as the amendment goes.

MR. L. NICOLSON (Nelson-Creston): I think this is an excellent amendment. I was sitting here thinking of the tremendous impact that such a measure was going to have on the everyday lives of British Columbians. I was searching for some solution, for some constructive suggestion, when the member for North Vancouver-Capilano (Mr. Gibson) suddenly delivered this amendment from out of the blue to hoist this for six months. I think that it's justified on the basis which has been outlined and emphasized by both that member and the member for Oak Bay (Mr. Wallace) in terms of what the effects might be on personal income tax revenue, but I think we should even look at the sales tax itself. There's almost a tacit implication that sales tax hasn't been increased for some number of years, and yet sales tax is increased every year because the base is increased.

Interjection.

[Mr. Speaker in the chair.]

MR. NICOLSON: In fact, estimates of what the effect of revenue of sales tax would be changed between February 20 and the tabling of the departmental estimates by $44 million. Now that's in about one month. Now, just imagine if we were to look at this for six months. What if this same trend were to continue — $44 million a month for six months? Mr. Speaker, we would more than make up the amount of money that we are proposing to raise by this 40 per cent increase in the rate of social service tax.

The Minister got up in second reading, and he talked about other jurisdictions, as if that was a defence for raising this most regressive form of taxation. The Minister did not give any evidence of an impact study that was made of the harmful effects that this increase would have on retail trade or consumer spending. I think that six months would give the opportunity for a complete survey to be taken, for people to perhaps appear before a standing committee of the Legislature or a task force that might be assigned by that minister.

You know, Mr. Speaker, that minister is getting a reputation for inflexibility. People are saying that he's rodomontade. You hear people out in the halls referring to him as the "rodomontade Minister of Finance."

I'm afraid that if this continues people about the land will be saying that British Columbia has a rodomontade Minister of Finance because he will not consider a six-month hoist of this bill...

Interjections

MR. NICOLSON: ...in order that proper impact studies can be done, in order that the small

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business people of the province can bring to his attention the effects which they would anticipate from such a major measure.

I don't think it can be overemphasized that this can hardly be expected to be a temporary measure. That isn't the history of taxation, and there is an increase in sales tax each year. I've constructed an index of social security tax based on the year 1967, a sort of 10-year survey, and I've indexed the revenue of $154 million collected in 1967 and taken that as a base year of one.

The index rose by six points to 1.06 by 1968. It rose eight points to 1.14 in 1969. Between '69 and '70, it rose by 19 points to 1.33. Between '70 and '71 it only rose three points, but was followed in '71 by a 23-point increase and again between '72 and '73 by a 20-point increase. In '73-74, a 41-point increase and '74-'75, a 39-point increase. Between 1975 and 1976, there was a 52-point increase without any change in the rate.

In fact, in spite of new exemptions, I think it is too early — I don't think that the government has looked at the possible effects of this. In fact, this measure might contribute in contributing to a decrease in retail sales; it will certainly contribute to a decrease in anticipated revenue from this increase. So they might not get so much of an increase as might be anticipated.

It will increase unemployment. It will increase almost every depressive measure that can be placed on the economy of this province. It's part of a blueprint for depression, and it is not a step to be embarked upon lightly. So as the member who put forth this amendment has suggested, we should take a look at the economy. There are many forecasts of at least some short-term improvements in terms of lumber sales. I know that in my part of the province, lumber sales are doing well.

As I pointed out, there is a natural growth in sales tax revenue regardless. In that department's estimates of a month before the year-end estimates, there was a $44 million discrepancy. So, as I suggest, if we were to continue at the present rate — 5 per cent — for the next six months, and if that rate of discrepancy were to continue — in other words, if revenues were to run $44 million almost per month in excess of what has been anticipated — even in half a year we would make up what they seek to make up by a 40 per cent increase in the rate of sales tax.

So it's with genuine concern that the members in the opposition are urging the government to take a little bit more time. Don't be in such a rush. You know, already, and perhaps in the vein of the member for Vancouver Centre, you might look to the book of prayer. You know, so far you have done the things which you ought not to have done, and you have not done the things which you ought to have done. If you continue, there'll be no health in you, and there'll be no health in the province of British Columbia.

Hon. Mr. McGeer moves adjournment of the debate.

Motion approved.

Hon. Mrs. McCarthy: Mr. Speaker, I move that the House at its rising do stand adjourned until 2 p.m. this afternoon.

Motion approved on the following division:

YEAS — 27

NAYS — 16

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

HON. MR. BENNETT: Mr. Speaker, I would like to file certain correspondence from the Prime Minister of Canada, and seek the permission of the House to make a statement in respect thereto.

Leave granted.

HON. MR. BENNETT: I table herewith a letter from the Prime Minister of Canada, dated March 31, 1976, and a document dated November 10, 1975, which is an attachment to that letter.

To place the matter in context, let me say that the letter and enclosure involve the subject of the patriation of the constitution, a subject on which my government, through ministerial committee, is presently formulating a provincial position.

I do not, at this point, intend to make any statement as to what that position may be, but it will become apparent in the near future. The Prime Minister of Canada has decided to table the letter and document in the House of Commons in Ottawa

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today, and I have undertaken to do likewise.

I advise the House that I have expressed to the Prime Minister of Canada my dismay that his letter and the draft proclamation, sent to all premiers in Canada, summarizes discussions which have taken place between some provinces and the Government of Canada, without there having first been any cleared official discussions with my government. In point of fact, arrangements for these discussions were made some months ago to commence on Tuesday of next week.

Regarding the draft proclamation, I have. also recorded my concern that it contains concepts significantly different from those agreed to in the meetings held in Victoria in 1971, or discussed at any other time by first ministers.

The two other alternatives referred to in the Prime Minister's letter have not been accorded equal treatment — with the draft proclamation, which may well be acceptable only to the Premier of the province of Quebec. This method of negotiation may lead to unnecessary divisiveness throughout the country and may well impede a consensus being reached between all governments, which we view as essential to effective constitutional change in Canada.

I wish to assure the House that I look forward to the meeting next Tuesday, and subsequent negotiations with all first ministers, as we believe British Columbia has a substantial contribution to make to this important subject.

MR. A.B. MACDONALD (Vancouver East): Mr. Speaker, just shortly, there's no doubt the Prime Minister of Canada is forcing the pace. There is no doubt that he is taking very unilateral steps in the direction of patriation.

At the same time, within the Canadian family the patriation of the constitution, in the very near future, is of great importance to us as a nation, and so I hope that the Premier will not stand too much on protocol, that he will cooperate in this meeting, even though it's thrust upon him in a rather undignified fashion, I must admit — and that we will be as cooperative as possible — that is, British Columbia — to try and seek a formula whereby Canada as a nation with its own constitution may make its way through the balance of this century and into the 21st century.

MR. GIBSON: Mr. Speaker, the early importance of patriation seems very clear to me, as is the importance of patriation in harmony with the thoughts of the various provinces of Canada.

I will say no more than that general statement of principle at this moment, as a result of the fact that the opposition was not afforded the courtesy, on a matter as important as this, of having an advance look at the important documentation which the Premier tabled. As soon as I have had a chance to study that, I will have more to say, and I wish that it had been possible to have a prior look at it.

MR. WALLACE: Mr. Speaker, I would also say that it is very difficult to make any kind of really intelligent comment when we don't know what the contents of the tabled documents are. But beyond that, I agree with the member for Vancouver East (Mr. Macdonald). It is quite obvious that a country of the state of development as Canada should not require a constitutional change to involve Westminster. But at the same time, we're hearing a great deal, and have heard a great deal of lip service, about the importance of Confederation. I agree with that, but I think there will have to be much more evidence, by action rather than lips, as to the fact that surely the very basic concept in having Confederation succeed is consultation between the provinces and the federal government.

I just repeat my comments of earlier this morning that there are evidences that would lead any objective person to wonder just how well we are making out in the whole consultative process with Ottawa. This particular issue that's been raised, with regard to a conference on Tuesday of such importance, leads me to support very strongly statements that the Premier has made. We, the Conservative Party, either provincially or nationally, are not looking for a hassle, and we're not trying to be awkward. But the obvious need for early, full and fair consultation should surely be the pre-eminent requirement, and if that is not the case, then I think there is little hope that the kind of negotiations that will have to take place will be done and in the atmosphere that we would all wish for and feel justified in asking.

MR. KING: Mr. Speaker, I wish to raise a matter of privilege which occurred in this House yesterday, namely a statement by the Provincial Secretary (Hon. Mrs. McCarthy). I would refer to the Blues of Thursday, April 8, the night sitting, where the Provincial Secretary spoke and indicated that a special warrant had been passed improperly by members of the opposition who, at that time, were on Treasury Board, and specifically the member who was Minister of Finance (Mr. Stupich), a special warrant issued in the amount of $134,126.98.

The Provincial Secretary indicated that a special warrant had been issued for that amount to pay for the cost of dispersing Land Magazine and 885,000 postcards.

Mr. Speaker, I have checked, and caused a check to be made of the registry. I can unearth no such special warrants, and I would refer, Mr. Speaker, to the report of the comptroller-general, 1975-76, showing interim financial statements for the nine months ended December 31, 1975.

1 would point out that the Provincial Secretary

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indicated that on December 17 a special warrant had been issued, and there is no such record in the report of the auditor-general, Mr. Speaker.

Under those circumstances I submit that the Provincial Secretary has no alternative but to apologize to the House for giving erroneous information and making erroneous statements of a very serious nature.

HON. G.M. McCARTHY (Provincial Secretary): I would be pleased to give the information to the House.

Last night when I referred to the order-in-council that was requested by the Hon. Robert Williams, the then Minister of Lands, Forests and Water Resources, I referred to a letter that was written by Mr. Williams on December 15 to the Treasury Board, in which he requested an order-in-council.

If, in my remarks, I did not make it clear that it was a request, and if in my remarks....

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please.

HON. MRS. McCARTHY: I assure the House that I was referring to a request by the hon. minister for an order-in-council, which was signed by the then Minister of Forests.

Interjections.

MR. SPEAKER: Order, please. The hon. Provincial Secretary has the floor for the moment.

HON. MRS. McCARTHY: Mr. Speaker, that was the meaning of my address to the House last night, and I now clarify it.

Interjections.

MR. KING: To be precise, I will read back the Provincial Secretary's statement.

Interjections.

MR. SPEAKER: Order! Order!

MR. KING: There is a clear statement, Mr....

[Mr. Speaker rises.]

MR. SPEAKER: Order! Would the hon. Leader of the Opposition please take his seat?

The hon. Leader of the Opposition brought to the attention of the House certain statements with the Blues. The hon. Provincial Secretary has indicated to the House what she intended to say, if it was not exactly said in those words.

Interjections.

MR. SPEAKER: Order!

Interjections.

MR. SPEAKER: Order!

She has said, and tried to clarify for the benefit of the House, what she had intended to say. If it was a matter of privilege, then I will be taking it into consideration to see just what the breach of privilege might have been. But at this point it is not going to develop into a debate as to whether it is or is not a matter of privilege.

There has been a statement by yourself, as Leader of the Opposition, and a statement clarifying the matter by the Provincial Secretary, and that is where it ends for the moment.

[Mr. Speaker resumes his seat.]

Interjections.

MR. KING: Would the Provincial Secretary mind filing the documents?

HON. MRS. McCARTHY: I'd be very pleased to, Mr. Speaker.

Interjections.

MR. SPEAKER: What is the member rising on?

MR. LAUK: On the point of privilege, Mr. Speaker.

Mr. Speaker, I would ask you to take into consideration the alleged breach of privilege; the alleged breach of privilege is a misleading of the House.

Interjections.

MR. SPEAKER: Order! A statement was made by the Leader of the Opposition (Mr. King), and a clarifying statement was made by the Provincial Secretary (Hon. Mrs. McCarthy).

MR. LAUK: Would Your Honour consider whether or not...?

MR. SPEAKER: The Provincial Secretary has agreed to file a document with the House, and that is where it ends.

MR. LAUK: Would Mr. Speaker not consider whether or not this is a breach of privilege? I think

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that's your duty with respect to....

MR. SPEAKER: I will take it under consideration.

MR. LAUK: Thank you. Hon. Mrs. McCarthy moves adjournment of the House.

Motion approved.

The House adjourned at 1: 12 p.m.