[ Page 1115 ]

CONTENTS

Routine proceedings

Oral questions

Lighthouse Communications Ltd. Mr. Gibson — 1115

Human rights branch inquiries. Mr. King — 1115

Administering of secrecy oath to M.H. Davidson. Ms. Brown — 1115

Cooperation with federal government on Kootenay Lake. Hon. Mr. Nielsen answers — 1116

Vancouver East by-election. Mr. Stupich — 1116

Keep Women Alive Programme. Mr. Levi — 1117

Government impact on inflation. Mr. Gibson — 1117

Employment of Ron Worley. Ms. Brown — 1117

Wages of Harry Jerome. Mr. Lea — 1117

Committee of Supply: Department of Finance estimates.

On vote 61

Mr. Stupich — 1118

Hon. Mr. Wolfe — 1119

Mr. Stupich — 1120

Mr. Lea — 1120

Hon. Mr. Wolfe — 1121

Mr. Lea — 1121

Hon. Mr. Wolfe — 1122

Mr. Gibson — 1122

Mr. Cocke — 1123

Hon. Mr. Wolfe — 1124

Mr.Lauk — 1124

Hon. Mr. Wolfe — 1125

Mr. Gibson — 1125

Mr. Stupich — 1125

Hon. Mr. Wolfe — 1126

Mr. Lea — 1126

Mr.Lauk — 1127

Mr. Stupich — 1127

Hon. Mr. Wolfe — 1128

Mr. Lea — 1128

Mr. Gibson — 1128

Mr. Macdonald — 1128

Mr. Stupich — 1128

Hon. Mr. Wolfe — 1128

Mr. Stupich — 1129

Mr.Cocke — 1129

Mr. Lea — 1130

Mr. Stupich — 1131

Hon. Mr. Wolfe — 1132

Mr. King — 1132

Hon. Mr. Wolfe — 1133

Mr. Stupich — 1133

Mr. Cocke — 1134

Mr. Gibson — 1135

Mr. Nicolson — 1136

Hon. Mr. Wolfe — 1136

Mr. Gibson — 1136

Mrs. Wallace — 1136

Hon. Mr. Wolfe — 1137

Ms. Sanford — 1137

Hon. Mr. Wolfe — 1137

Ms. Sanford — 1138

Mr. Cocke — 1138

Mr. Stupich — 1139

Mr. Macdonald — 1140

Mr. Lea — 1141

Mr. Wallace — 1142

Hon. Mr. Wolfe — 1143

Mr. Wallace — 1144

Hon. Mr. Wolfe — 1145

Mr. Wallace — 1145

Hon. Mr. Wolfe — 1146

Mr. Wallace — 1146

Hon. Mr. Wolfe — 1146

Mr. Wallace — 1147

Hon. Mr. Wolfe 1147

Mr. Wallace — 1147

Ms. Sanford — 1147

Mr. Stupich — 1148

Hon. Mr. Wolfe — 1148

Mr. Lea — 1149

Ms. Brown — 1149

Mr. Gibson — 1150

Mr. Lea — 1151

Hon. Mr. Wolfe — 1151

Mr. Gibson — 1151

Hon. Mr. Wolfe — 1152

Mr. Gibson — 1152

Mr. King — 1152

TUESDAY, APRIL 27, 1976

The House met at 2 p.m.

Prayers.

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr. Speaker, I would ask the House to join me in welcoming a group of students from various lower mainland municipalities. They are here today travelling Victoria, and are sponsored by Crown Zellerbach. They are in the legislative session today, and I'd like to welcome them.

HON. K.R. MAIR (Minister of Consumer Services): Mr. Speaker, I would like the House to welcome a visitor from Australia, Mr. David Pluckrose, Commissioner for Consumer Affairs for the State of Queensland, Australia. Mr. Speaker, Mr. Pluckrose is on a world tour to observe legislation and administration of other consumer affairs jurisdictions. He is commencing his North America tour here and I would ask the House to make him welcome.

MR. G.H. KERSTER (Coquitlam): Mr. Speaker, visiting the House and in the gallery today are a group of students from Centennial high school in Coquitlam with their teacher Mr. Dubasov. I'd like the House to make them welcome.

Oral questions.

LIGHTHOUSE COMMUNICATIONS LTD.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I have a question for the Minister of Mines. Could the Minister advise the House if Lighthouse Communications Ltd., headed by Mr. Ian Fothergill, is serving his department in any capacity?

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources): In answer to the question from the hon. member, Mr. Speaker, no, at this time Lighthouse Communications is not. I did ask Lighthouse Communications a couple of weeks ago to make a presentation for me to a group of mining support companies, but at this time it is not employed by the department.

MR. GIBSON: On a supplementary, Mr. Speaker: is the minister then confirming that he approached Lighthouse to do work for a mining industry group? Did he make any suggestions to that group that Lighthouse would be an appropriate communications consultant?

HON. MR. WATERLAND: The Lighthouse Communications group was employed by the department, and no suggestion whatsoever was made to the mining group that Lighthouse should do any work for them.

MR. GIBSON: On a further supplementary, Mr. Speaker: the minister just said the Lighthouse group was employed by the department, but I understood his first answer to say they were not doing any work for the department. Could he say which it is?

HON. MR. WATERLAND: To the hon. member — perhaps he has a hearing problem: I said they were not at this time doing any work, but they have in the past done a short job for the department.

HUMAN RIGHTS BRANCH INQUIRIES

MR. W.S. KING (Leader of the Opposition): A question to the Minister of Labour, Mr. Speaker. Yesterday I queried him regarding the status of the Human Rights case involving Dr. Johanna Bruhn-Mou and the College of Dental Surgeons. I would ask the minister whether he has received representation on behalf of either of those parties, either from them individually or through a solicitor on their behalf.

HON. L.A. WILLIAMS (Minister of Labour): I gave the hon. member the answer yesterday in my request for advice from Dr. Bruhn-Mou. I have not had representations made to me by solicitors for either party. However, to make it perfectly clear so that there is no question as to the meaning of my answer, I did communicate with the solicitors for the College of Dental Surgeons for one purpose only: that was to obtain as quickly as I could a copy of the reasons for judgment in the Supreme Court of British Columbia action. They provided me with a copy of those reasons for judgment. But no representations have been made to me by lawyers for either party.

ADMINISTERING OF
SECRECY OATH TO M.H. DAVIDSON

MS. R. BROWN (Vancouver-Burrard): Mr. Speaker, my question is to the hon. Provincial Secretary. On April 15, there was an order-in-council 1248 which appointed a Mr. M.H. Davidson consultant to the Treasury Board on labour negotiations relating to the public service. I think the order-in-council also said that he was to be paid $250 a day. I am wondering whether you could tell me whether Mr. Davidson did take the public service oath, first of all, as required by law and, secondly, could you tell the House what Mr. Davidson's qualifications are?

HON. G.M. McCARTHY (Provincial Secretary):

[ Page 1116 ]

Mr. Speaker, to the hon. first member for Vancouver-Burrard: firstly, to answer your question regarding the oath of secrecy, I do not, from my office, have the oath of secrecy administered. It is done through the Clerks' office and, as such, the Clerks' office calls the various consultants, employees and so on. That is why, in a previous question period, I was not aware that one former questioner had not taken the oath of secrecy, nor had they. In answer to whether or not Mr. Davidson has indeed taken the oath of secrecy, I cannot tell you that. As you have pointed out, his appointment was approximately April 15, and whether or not the Clerks' office has got around to that at this point, I am not sure.

As to what Mr. Davidson's position is with the Treasury Board, he is appointed to the Treasury Board and is responsible to them but will act in a capacity to give advice to the government — i.e. the employer — through the Treasury Board on all of the negotiations that are done in the public service. He is hired as a consultant at the present time at the rate that you mentioned.

MS. BROWN: Mr. Speaker, to the minister: I am wondering whether it wouldn't be a safeguard to check whether the oath has been taken by consultants before actually getting them to do jobs for the government since there seems to be a law somewhere on the books that says this is necessary.

SOME HON. MEMBERS: Order!

MR. SPEAKER: First of all, hon. member, that was more of a statement than a question.

MS. BROWN: A supplemental then, Mr. Speaker.

Interjections.

MS. BROWN: Is there a regulation that says that consultants to the government should take the oath of secrecy? That's my first question. My second question is: since, hopefully, the answer is yes, wouldn't the minister be advised to check — out of curiosity, if nothing else — whether appointments have taken the oath before giving them jobs to do on behalf of the government?

HON. MRS. McCARTHY: Mr. Speaker, I think the member knows that this is a new policy which was initiated that we felt that all members who are working in confidential positions should, indeed, take the oath of secrecy. Since that time there have been a number that have had to be processed and I don't think we should reflect on the speed with which that is being done. However, I would be very pleased indeed to take your advice that once in a while we should check to see if they are all done. We should not reflect on the efficiency of the Clerks' office; I think it's being done very well and we are not certainly....

Interjections.

MS. BROWN: On a further supplemental question, Mr. Speaker. I would certainly like to clarify that I wouldn't dare reflect on the efficiency of the Clerks' office.

SOME HON. MEMBERS: Oh, oh!

MS. BROWN: My second question had to do with Mr. Davidson's qualifications. I am wondering whether the minister would outline those for the House.

HON. MRS. McCARTHY: Mr. Davidson comes very well qualified to the government. If the member would like to have the background information I would be glad to make it available to her, and to the House if necessary, but you appreciate that we had established that before we hired him.

CO-OPERATION WITH FEDERAL
GOVERNMENT ON KOOTENAY LAKE

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, in answer to a question brought forward by the member for Nelson-Creston (Mr. Nicolson) regarding the Kootenay Lakes, in January of 1975, the Inland Waters Directorate was approached for assistance, identification and analysis of biological samples. The province has expressed its willingness to consider a cooperative involvement in efforts on Kootenay Lake, has provided some information on the nature of the sampling programme in progress at this time, but to date the federal government has not advised us as to the details of the programme nor the extent to which they wish to involve the province. It's believed that additional information will perhaps be made available from the federal government to our regional staff in the near future.

VANCOUVER EAST BY-ELECTION

MR. D.D. STUPICH (Nanaimo): Mr. Speaker, to the Provincial Secretary. I wonder if she could tell us whether or not she has requested a report from the registrar of voters, Mr. Morton, as to the progress of enumeration in Vancouver East.

HON. MRS. McCARTHY: To the member for Nanaimo, Mr. Speaker, the answer is yes.

[ Page 1117 ]

MR. STUPICH: Mr. Speaker, a supplementary. Can she tell us what was the answer to that request for information?

HON. MRS. McCARTHY: I would like to give you the answer, but I have not received the reply, but when I do I'll be pleased to give you the answer.

KEEP WOMEN ALIVE PROGRAMME

MR. N. LEVI (Vancouver-Burrard): To the Provincial Secretary, Mr. Speaker. Before the Easter break, the minister reported on the $17,000 grant to the breast cancer project, and at that time I asked her if she could inform us whether the professional advisory committee was consulted by your department before the grant was made. You said you would report back.

HON. MRS. McCARTHY: I believe I took that question as notice and I'll have to report to you at a later date.

GOVERNMENT IMPACT ON INFLATION

MR. GIBSON: Mr. Speaker, to the Minister of Consumer Services. In view of the tremendous concern, a proper concern, expressed by the minister in the rise in the cost of living in British Columbia of 2.4 per cent, more than any other part of Canada by far, and in view of the revelation that 2.1 points of those 2.4 were caused by the ICBC increases, and in view of the report by Dr. Cragg of the University of British Columbia that the sales tax increase will boost up the cost of living in British Columbia next month by another 1 per cent, will the minister ask his own government to cease its devastating impact on inflation in this province?

AN HON. MEMBER: Hear, hear!

HON. MR. MAIR: No.

AN HON. MEMBER: Oh, arrogance!

EMPLOYMENT OF RON WORLEY

MS. BROWN: Mr. Speaker, the hon. Provincial Secretary also took one of my questions as notice on April 13, and I'm wondering whether she has a reply for us to date. The question had to do with Mr. Ronald Worley and the question at that time was: in what capacity was he employed by the government? On that date you said that you would take the question as notice and that you would return as quickly as possible with a complete answer. I'm wondering whether you have that.

MR. SPEAKER: The hon. member knows that the hon. minister has the right to take a question as notice. You can perhaps refer the question to her by suggesting that you would like an answer. You can't insist on any particular time, Hon. Member, when any hon. minister has to provide the answer to the House.

MS. BROWN: I appreciate that, Mr. Speaker, and I'm not insisting. I was merely asking whether the hon. minister now had the answer.

WAGES OF HARRY JEROME

MR. G.R. LEA (Prince Rupert): Mr. Speaker, a question to the hon. Provincial Secretary. As I recall it, when Mr. Harry Jerome was made an employee of the province, it didn't state in the order-in-council his wages. Could you tell us how much money and fringe benefits Mr. Jerome will be making?

HON. MRS. McCARTHY: To the member for Prince Rupert, Mr. Jerome's salary is $24,000 annually. As far as fringe benefits are concerned, he would receive the ordinary benefits that accrue to that kind of an appointment. It would not be anything more than his expenses. His expenses are curtailed within the province of British Columbia and to give the report within six months. Naturally it's a study on all of the recreational and sports programmes within the province of British Columbia, so he will have some travelling expenses which this province will pay. for. He is extremely qualified to do this position. We're very proud to have him.

MR. LEA: As I understand it also, it is a six-month appointment, I believe. But under an order-in-council appointment there are certain fringe benefits like pension, medical and that sort of thing. Is there any possibility that Mr. Jerome will be kept on after the six-month period?

MR. SPEAKER: Hon. member, I think that at this point that question is out of order in that you're asking a minister to reflect on and anticipate an event that may not happen.

HON. MR. MAIR: Mr. Speaker, at this time I would like to table an answer to a question raised about a week ago by the hon. member for Comox (Ms. Sanford). I think this answer will also take care of that question which is on the order paper — if I may at this time. (See appendix.)

Presenting reports.

HON. P.L. McGEER (Minister of Education): Mr. Speaker, with leave I wish to table the annual report and the audited financial statement of the Insurance

[ Page 1118 ]

Corp. of British Columbia for the year ended February 29, 1976.

Leave granted.

Hon. Mr. Waterland presents the 1975 annual report for the British Columbia Forest Service.

Hon. Mrs. McCarthy presents a statement of receipts and disbursements of the Capital Improvement District Commission for the year ending March 31.

Hon. Mr. Waterland files answers to questions 23, 40 and 41. (See appendix.)

HON. MR. WILLIAMS: Mr. Speaker, yesterday in responding to a question from the hon. Leader of the Opposition in connection with the board of inquiry involving the College of Physicians and Surgeons, I indicated that the hearing would commence May 3. I wish to correct that; the hearings will commence May 10 and 11.

Orders of the day.

The House in Committee of Supply; Mr. Schroeder in the chair.

ESTIMATES: DEPARTMENT OF FINANCE

(continued)

On vote 6 1: minister's office — $78,246.

MR. D.D. STUPICH (Nanaimo): I suppose the Minister of Finance is being consistent, at least, in not telling us anything at all before he asks us to vote for something, and he's not really telling us anything about the thrust....

HON. E.M. WOLFE (Minister of Finance): That's right.

MR. STUPICH: I'm not sure whether you were saying that's right when the member down here suggested you were telling all you knew by saying nothing. You were agreeing that that's right?

Well, Mr. Chairman, it would seem that the minister is trying to prove that as time goes on. We would like to have some explanation from him from time to time ask just what he has in mind, how he sees things developing in the province.

For example, we've gone through a tough year economically, not just for the province but for the whole country, for the whole western world. Certainly B.C., along with the rest, has gone through a very tough year. I take it from the estimates of revenue for this year that the government is expecting some improvement in the economy, but I would like to have the Minister of Finance tell us something about his expectations.

I expect, for example, from the figures for forestry revenue that he does expect an upturn in our largest of all industries. He does show that he expects to take more money in from stumpage than the latest revised figures for the fiscal period 1975-76. I think we'd like some explanation from him as to just what he is basing this kind of expectation on — not that we disagree, but we would like to hear something from the Minister of Finance before we consider whether or not we will vote for his salary — something from him as to just what he used in basing some of his revenue forecast.

Royalties and stumpage are up. We expect the same thing from the information that I did give earlier in a debate. I pointed out that the number of housing starts in the United States are expected to be some 50 per cent higher than last year — a figure of 1.6 million, as a sort of an average among the estimates that have been prepared. I wonder whether the Minister of Finance, in projecting stumpage revenue of $80 million, has some other information that would enable him to come down with a more definitive appraisal as to just what is going to happen in logging. What does he expect this is going to do to the rest of the economy?

Certainly, stumpage is obviously going to be up. If stumpage is up, we would expect the forestry companies to be doing better; we would expect an increase in logging tax revenue. We expect an increase in logging corporation revenue and hence in corporation income tax, which was not all that good last year.

Apart from the direct improvements in revenue, as a result of increased expectations from forestry, there is, of course, the effect this will have on the total community. In spite of the measures that the government seems to have followed, to have adopted in an apparent attempt...or at least the result will be to depress the economy.... It would seem as though in this period of inflation along with high unemployment they have chosen a route which can do nothing other than decrease our possibilities of coming out of this economic slump.

What do they expect will be the indirect results of improvement in logging — in revenue from logging industries? Personal income tax, for example, for the whole community is bound to be up if our largest of all industries increases. Of course, we have already moved the sales tax rate increase, but what effect will this have on our total economy? Does he really expect that there will be a 40 per cent increase on top of what would be a normal increase this year simply by changing the rate? Has he given any thought at all to what effect the increased levies that the government has imposed will have on our total

[ Page 1119 ]

economy?

Surely in preparing the budget he must have given thought to all these questions and should be able to tell us something about his general opinion as to the direction the economy is moving and what he expects this year — if not quarter by quarter, certainly as the year moves along.

We all expect that the forest industry is going to improve. Of course, the government in power will likely try to take unto itself the credit for this improvement in the forest industry, just as last year the then opposition party tried to blame us for the downturn in forestry. They are now in a position, if it does improve, to take the credit for it.

But I think the minister could perhaps give us something more reasonable in the way of a presentation than was presented in the budget speech itself, which was admittedly.... I think the minister himself admitted that it was a straight political document when he.... Maybe this is a question we will come to later, Mr. Chairman: whether it was he or someone else who authorized or instructed that a revised edition be printed for circulation.

As I said, we know that B.C., along with many other governments, is in the middle of a bad economic cycle — perhaps at the bottom of it. Certainly anything I've read would indicate that we are not so much approaching the bottom or just leaving the bottom; we are right at the bottom now. Any change at all is bound to be a change for the better. We have already indicated to the minister that he should have taken this into account a little more in his planning, that he perhaps would have been wise to have considered not so much the necessity to balance a budget in a fiscal year, which is really quite an artificial period; he might better have been looking at a period of a cycle, rather than one simple year. What, in his opinion, is an economic cycle? Would it be three years, five years, or would it be 10 years or some such figure?

These are the kinds of things that maybe he had in mind when he was considering the budget, or at least some of the things to which he should have been giving some thought.

Apart from the straight matter of finance, Mr. Chairman.... I don't intend to speak long now. I'd like to get some kind of a general statement from the minister. I would appreciate it very much if he could or would respond at this time in a general way as to how he sees the economic situation in the province.

But there is one other thing I think we really want to know early in the debate of this vote: exactly what are the areas of responsibility we should question this minister about?

For example, Hydro: would that come under the Minister of Finance or would there be some other minister responsible for it? In former years the Premier has had a tremendous load of responsibility, not just in the last three years but in the last 23 years. Now I think we have to be clear in our minds as to just exactly which minister is responsible for the various areas of responsibility that were previously accepted by the Premier.

HON. MR. WOLFE: Mr. Chairman, in answer to the member's question: I would ask for his indulgence in suggesting that questions surrounding Hydro might properly be placed under the Premier's estimates. Secondly, questions covering the B.C. Railway might properly come up under Economic Development since the minister there is responsible for the railway.

I would like to take this opportunity to table an answer to a question which came up a few days ago under the debate on the social services tax Act. I just forget which member raised the question, but he wondered what impact the removal of building tax on materials would have. I have the answer to that question here.

Interjection.

HON. MR. WOLFE: I am advised that I should not table it in committee. We will table this in the House at a later time.

The indication is that the amount of social service tax applied to all building materials would, at 7 percent, be $85 million, and on residential building materials only, $34 million.

I rather expected the member for Nanaimo might go into other matters and go on a little longer than he did. He wanted to hear our attitude about the general viewpoint of the economy and our expectations for the coming year. I wouldn't say that those have changed to a great degree with what you found in the budget speech on page 13. We look upon the coming year with, you might say, cautious optimism, primarily accenting the fact that we expect greater things from the second half of the year than from the first half of the year.

A very important thing that affects logging and lumber, which you have asked about, is, of course, housing starts in the United States, It's highly important to this province — housing starts both in the eastern side of the United States as well as the western side. Our estimates covering next year's increased revenues are based on an overall year's housing starts of 1.5 million in the United States. Anything we've been able to determine since even budget day, in talking to people knowledgeable in this field, still seems to bear out the fact that this is neither a high nor a low figure; it seems to be a reasonable expectation for the coming year in the United States. We all know the importance this bears on our own estimates of revenue.

Secondly, an influencing factor is the anti-inflation

[ Page 1120 ]

programme in Canada, which we have mentioned in the budget speech. One can wonder whether this would have an optimist effect or a pessimistic effect on the expectations of revenue for the year.

As you well know, the estimates on increased revenues without tax increases for the coming year were based on 14 per cent overall improvement. I realize there are some members who believe this is low, but even at this stage I don't think I could say in my own opinion that it is low. We have given this very constant review, prior to arriving at these budget figures, to the extent that we were all persuaded — on Treasury Board and within the cabinet — that this was quite a reasonable figure. As you can imagine, there are many members in the cabinet who would wish to estimate revenues higher, but they were finally persuaded that this is not necessarily a reasonable expectation.

Mr. Member, you asked about logging tax, income tax and corporation taxes. These are individually developed on the advice of federal departments. You can imagine, and as you well know from your past experience, these are cold, hard figures when you start talking about income tax and corporation tax. After all, corporation taxes represent previous year's income and represent what has gone by during a previous period.

By and large, our expectations for the estimates of revenue for the coming year — a question which you were asking — are based on the facts of a reasonably cautious optimism, based on a definite pickup as the year goes along, particularly in the second half.

MR. STUPICH: Mr. Chairman when the minister makes reference to my past experience I perhaps should point out at this time that he's had more experience in the office of the Minister of Finance than had I.

However, our concern is that he has not been anxious enough to try to collect a larger share of his revenue demands, or even more dollars, from, the resource industries. Certainly it was our conscious effort during our time in office — that is, the previous administration's time in office, not simply my time as Minister of Finance — to try to get a larger share of our revenue from the exploitation of our resources and, in particular, to attract more attention to the exploitation of our depleting resources. Of course, part of that was the Mineral Royalties Tax Act that has been criticized widely in B.C., and perhaps even outside of B.C. to some extent. While it has been blamed for some of the downturn in our economy in the province, I think, Mr. Chairman, that you'll recognize that we were not properly blamed for that — that it was international economics rather than what was happening in the province of British Columbia that hit our mining.

If I could just comment from a publication — certainly not known to be an NDP one — it's the Executive and it's from the October, 1975, issue. They are quoting from a Bank of Commerce newsletter to the effect that the Canadian Diamond Drillers Association in projecting their trends, and projecting them years ahead.... I think that's one of our concerns, and we tried to bring that out in the earlier debate, that instead of planning for one year ahead or several months ahead, a maximum of one year ahead, we should be trying to develop plans that are much further ahead.

But certainly the diamond drillers association are prepared to go ahead and are projecting the trend that there will be no drilling in Newfoundland by 1976; none in New Brunswick by 1980; none in Ontario, Manitoba, Saskatchewan or British Columbia by 1982. Now at a time when they had no reason to believe that the NDP would not remain in office, they anticipated that drilling for ore in British Columbia would go on even longer than they expected it would go on in Ontario; so they weren't blaming the lack of drilling in B.C., or what was happening in B.C., on the previous administration.

What about coal, for example, Mr. Chairman? Perhaps this isn't the time to raise it if the minister has in mind doing something. But we did increase the return for coal to the province quite substantially — from $0.5 million up to in excess of $10 million, but we were still bringing in just a little over 4 per cent of the value of that coal to be returned to the people from the exploitation of this resource.

We've increased the sales tax on people. Does the minister have in mind doing anything at all about getting a higher return to the people of the province from the exploitation of this depleting resource?

What about copper? We can't really tell from the estimates of revenue whether the government feels this is the time, now that copper prices have started moving up. Through nothing that has happened here in the province of British Columbia but rather something that has happened in Africa, copper prices have started moving up. Does the minister really believe that this is the time to abandon our policy of getting for the people of the province a share of the revenue from the exploitation of this resource? I would like him to comment on what he thinks should be the direction. Should we be getting more money from direct development, in particular depleting resources, or do they intend to follow their campaign promises to back away from getting money from the development of resources?

MR. G.R. LEA (Prince Rupert): Mr. Chairman, I would like some help from the minister, because I've been trying to sort out in my mind exactly what happened to the $181 million cheque that was written to ICBC and then after that the $181 million loaned back by ICBC to government. Try as I may, I

[ Page 1121 ]

can't find one dollar of money that changed hands. I can just follow through as I see it and see if the minister can correct me and tell me if I am correct, or maybe there is some other explanation.

The government, as I understand it, wrote a cheque. Well, first of all they brought in a bill, Bill 3, asking for the authorization for the government to borrow $400 million. Mr. Chairman, $181 million of that was said to be because ICBC needed the money. Then a cheque was written to ICBC by the government for $181 million. After that the $181 million was loaned back to the government.

Now if I can just follow that cheque for a moment — a cheque written to ICBC drawn on the account of the government, in the bank, I would suppose. So ICBC gets the cheque. They take the cheque to the bank and say: "Here's a $181 million cheque that we would like deposited to our account in ICBC." Now at the time the government said they didn't have any money in the bank, but they do have an overdraft situation if they want it. So it's like having money in the bank. So there were two ledger entries that happened in the bank as I see it — an overdraft of $181 million in the bank on the government's part, so they say you have $181 million less, or you have an overdraft of $181 million; then in the ICBC account they say you have $181 million. Then ICBC lends the money back to the government.

Then the government, it seems to me, would put the cheque in the bank again. Then there would be the ledger entries again. They'd say: "Well, the government doesn't have an overdraft at this point because the $181 million is returned to the bank." So, in fact, ICBC at no time, except maybe for one or two days, had $181 million in their bank account. So actually they didn't get $181 million to lend back, because there was an overdraft on the government's part that they were lending back to the government. (Laughter.)

Now it just seems a little irregular. You know, maybe I just can't get it straight but I wonder if the minister, when he gets up, would explain where one dollar actually changed hands. All I can see are four ledger entries at the bank, and what finally ends up is that the government of British Columbia, the people of British Columbia, owe ICBC $181 million, approximately $19 million or $20 million a year at 10 per cent interest, which could be termed by some people as a sneaky subsidy of $20 million to ICBC a year. If they need a little more they can say we'll pay a little on the principal that didn't exist. No money existed! Two, four ledger entries are all that happened. No money changed hands! No cash changed hands!

Now I would like the minister to explain. Maybe I have it all wrong, Mr. Chairman, but it seems to me that that's what happened. If you logically follow the sequence of the cheques, no money changed hands. Now possibly the minister can set me straight. A lot of my constituents are worried about it, because they seem to feel the same way as I do. I talked to a lot of people in the province, Mr. Chairman, and there are a lot of people convinced that no money actually changed hands.

They're saying — and I can't say that I agree with them — that maybe it was a sham, that maybe $181 million of that Bill 3 wasn't needed after all and that no money changed hands. Four ledger entries and the province ends up getting a sneaky subsidy to ICBC, if they need it, but, at very best making it look like the NDP government, the former administration, put the province $181 million in the hole. Now it seems just a bit strange. I'm a bit perplexed. Maybe the minister will answer that one before we let him get his salary.

HON. MR. WOLFE: Mr. Chairman, I imagine I'll be getting my salary any moment now, so I will, with pleasure, try to answer that question.

I think the fact that the member raises the question demonstrates the fact that lie is a candidate to have been on the previous board of ICBC, because they went into this whole situation without seeming to be able to appreciate the problem that was developing. I would ask him a question in answer to this, as to whether he felt that the insurance company was overdrawn by $26 million before the end of their fiscal year in cash and if, in fact, they billed all their premiums for the coming year at the beginning of the year and had 80 per cent of their revenues in their pocket before the end of March, whether it wouldn't be, in fact, a good investment for them to loan the government money at 10 per cent. Would you indicate to me whether you think that's a good policy for the insurance corporation to follow, and therefore whether you might have been eligible to sit on the insurance corporation board?

MR. LEA: I've accepted the fact that we lost the election, but the Minister of Finance hasn't. Now what I'm asking him — and I wasn't on the board of directors of ICBC — is to trace that $ 181 million and let this House and the people of British Columbia know whether there was actually any money changed hands. I'm suggesting that no money changed hands — none at all — except for the period of a few days when there were four ledger entries in the bank.

Now I would like to know why the government owes ICBC $181 million when no money changed hands. It's called "kiting." In other circles, it's called "kiting."

HON. K.R. MAIR (Minister of Consumer Services): No, it's not!

MR. LEA: Oh, I'll tell you, that minister should know.

Now let me just ask again. Maybe the minister

[ Page 1122 ]

didn't understand me. I'd like to have him trace for the House and for the people of British Columbia what actually happened. I'd like him to take the cheque from the time it was written to ICBC, what happened in the bank and what the ledger entries were, because I can't see where any money changed hands.

All that happened is that the government now owes ICBC $181 million when no money changed hands. I suggest, Mr. Chairman, that corporations do that all the time to try....

Interjection.

MR. LEA: That's right. Do they ever!

I'd just like to know why that kind of corporate trickery was pulled on the people of British Columbia. I want the minister, in detail, to explain to me where that cheque went and what the ledger entries were in the bank, because no money changed hands, I suggest. All that has happened is that the province owes ICBC $181 million, which I assume they're not all getting this year. They would only be getting the interest on that and possibly some payment on the principal, so to suggest that they needed that $181 million immediately doesn't make sense.

HON. MR. WOLFE: I think it's very clear in questions previously placed in the House, and answered, that the money did change hands. The member is not correct in stating and assuming and alleging that the money did not change hands. The cheque was issued to ICBC, they wrote a cheque in return and received treasury bills to this extent. That is very clear. I think you follow that.

MR. LEA: Oh, I followed that.

HON. MR. WOLFE: Yes, you do. It seems clear also that as the year goes along with the insurance corporation its claims will exceed its revenues and, in the course of several months passing, they will need to retrieve some of these treasury bills. This is a fact of life in the insurance business where all of the premiums are billed at the initial stages and they have to refinance the money as they go along. So a cheque did change hands, went through the bank, and was issued back in exchange for treasury bills.

Interjections.

MR. LEA: I would like the minister to explore what I have put forward: that actually four ledger entries took place in the bank but really no money changed hands.

When the ICBC deposited their cheque, on their bank card they were up $181 million. I can only assume by remarks made by the government that there wasn't enough money in the bank in the government's account to cover that cheque, so there was an overdraft situation. Then ICBC loaned the money back. I would assume that they wrote a cheque back to the government. What happened in the bank then? Two more ledger entries. ICBC doesn't have the $181 million on their card any more, and the overdraft is covered by the cheque from ICBC. No money changed hands.

I would like the minister to go into detail and tell me exactly the flow of that cash, over there and back, and actually whether ICBC ever received the $181 million for more than a few days when the government didn't have any money anyway. It doesn't make sense.

HON. MR. WOLFE: Mr. Chairman, I think it's very clear that ICBC did receive a cheque, did deposit it, and did issue a cheque back to the government. Now the alternative would have been, Mr. Member, for the insurance company to loan the same amount of money to some New York bank, which I don't think you would have recommended yourself. So the simple fact that they loaned the money back to the government by issuing a cheque is a simple way of recording the transaction in a businesslike manner, and there is nothing untoward about it. It's a simple fact that they loaned the money to the people of the province of British Columbia.

MR. LEA: I would just like to get it straight that ICBC didn't receive any money. They didn't use any of that money. There were four ledger entries in the bank. That's all that happened. That's all that happened, and I admit that they received a cheque, that they deposited the cheque; then the cheque came back to the government and the government deposited the cheque and the overdraft situation was taken care of. But ICBC did not have the $181 million, Mr. Minister, through you, Mr. Chairman. They just didn't have it. They didn't have the use of that money. Why not just give them the equivalent of the interest? Why go through all that jiggery-pokery?

I think, Mr. Chairman, what it was was to make Bill 3 look justifiable. That's the only reason that it was done that way. They could just as easily, Mr. Chairman, have written a cheque for $20 million a year, or the equivalent amount of what the interest on $181 million is going to be. I would like the minister to tell me whether, in fact, that isn't true: that that could have been done just as easily that way as opposed to going through all of that cheque writing back and forth, and for ledger entries.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Chairman, I'd like to pursue this a little bit from another direction. I well remember the day in this

[ Page 1123 ]

House — I'm pretty sure it was March 30 — when the minister reported to us that the government had $25 million in the bank that day. I think he said there were cheques outstanding of $245 million with another $14 million in payroll cheques to come through the next day. The minister said that one of those cheques which was outstanding was a $181 million ICBC cheque.

Now the particular question of internal departmental control that I wish to raise is: who is charged with authorizing the issuance of cheques? Did that person authorize the issuance of a cheque in the amount of $181 million in full knowledge that there was not that kind of cash in the bank at that time? Nor, if I may so, sir, within the next little future — because we were coming to the end of the fiscal year, and at that time the province had to be debt-free by law — was there likely to be that kind of cash in the bank. Who in the department has the authority to authorize the issuance of an NSF cheque? Who did that specifically? That's the first question.

Interjection.

MR. GIBSON: Because the minister told us, Mr. Member. A cheque is NSF when you issue a cheque and there's not enough money in the bank to cover it. You know that perfectly well, Mr. Minister of Education (Hon. Mr. McGeer), and if you handle your own finances in any other way but that you're in bad shape.

AN HON. MEMBER: He should talk to the president of ICBC.

MR. GIBSON: Annual income 20 shillings, annual expenditure 19/6; result: happiness. Annual expenditure 20/6; result: misery.

MR. G.S. WALLACE (Oak Bay): Micawber.

AN HON. MEMBER: Speaking of whom?

MR. GIBSON: You! That side of the House, of all groups, Mr. Chairman, should understand that philosophy.

MR. WALLACE: Why are you Liberals fighting among yourselves?

MR. GIBSON: Here we have a case where, according to the minister's own admission in this House, there were $245 million worth of cheques outstanding on a day when we had $25 million cash in the bank and 24 hours before the time when this province had to be technically, completely debt-free. I say that's an NSF situation.

So back to my question before the ridiculous intervention by the Minister of Education, who should know better, as to who authorized the issuance of that NSF cheque. Question No. 1.

Question No. 2: As these moneys went back and forth....

AN HON. MEMBER: Washed.

MR. GIBSON: Washed back and forth, indeed, Mr. Member...between the bank and the Government of the Province of British Columbia and the Insurance Corporation of British Columbia, with the exchange of instruments like treasury bills, were there financial charges from the banks or from any fiscal agent that made this transaction a charge on the people of British Columbia, other than the strict bookkeeping entries? Were there transfer charges — and I assume there were, Mr. Chairman, because there usually are when you're shuffling cheques back and forth — paid to the bank or any other fiscal agent? Just as an example, was there an NSF charge? There may not have been on of those because you may have a friendly banker, I don't know, but what were the financial charges in moving those funds back and forth? I'll leave it with those two short questions right now, Mr. Chairman.

MR. D.G. COCKE (New Westminster): Mr. Chairman, I didn't want to rise on the $181 million but I did notice some of my colleagues....

Interjection.

MR. COCKE: Well, the fact of the matter is, Mr. Chairman, that....

Interjection.

MR, COCKE: The Finance minister sits over there, mute as usual, and he starts talking from his chair. He never stands up to the microphones and answers the questions the way he is supposed to in this House. Let me read to the Minister of Finance a section from an Act....

Interjection.

MR. COCKE: Mr. Chairman, this is the kind of answer that we get from the Minister of Finance. A little while ago the member for Nanaimo (Mr. Stupich) asked the question: who's going to answer for Hydro in this House? He said: "The Premier will answer for Hydro." You know what will happen two or three days from now when the Premier comes back? The Premier won't answer for Hydro, and I'll tell you why. He'll refer us to the British Columbia Hydro and Power Authority Act in this province.

[ Page 1124 ]

He'll say: "Would you care to check section 4 of the B.C. Hydro and Power Authority Act?" Section 4 says: "The authority is for all its purposes an agent of Her Majesty the Queen in right of the province, and its powers may be exercised only by and as an agent of Her Majesty, the Minister of Finance as fiscal agent of the authority."

MR. WALLACE: Good try, Evan.

MR. COCKE: Mr. Chairman, wouldn't that have been interesting if we'd been caught in that bind? Some of us have been around long enough to know that that's the kind of bind we've often been caught in, over on this side of the House.

He won't answer for Hydro, Mr. Chairman, and I'm awfully sure that his colleague, the Premier, or Prime Minister, or whatever he's calling himself today, won't answer either, certainly if he's looking at the law.

Now I'm going to sit down on this one because I'd like us to get back to $181 million and I've got a number of other questions I'd like to ask later. But I certainly didn't want to let that one slip by. Mr. Chairman, who answers for Hydro in this House? That's the question.

HON. MR. WOLFE: Mr. Chairman, I'd like to answer that question because there might have been some ambiguity earlier. You should direct your questions on Hydro either to the Premier or to the Minister of Transport and Communications (Hon. Mr. Davis) . This is very natural. The Minister of Transport and Communications is on the board and I am advised that previously the former minister of forestry, who was a director of Hydro, took the questions on the estimates for the Hydro. I am sure you are aware of that.

MR. G.V. LAUK (Vancouver Centre): There are some questions, I am sure, that can be asked of the ministers who are on the board of directors of Hydro, but by virtue of the fact that the Minister of Finance is the fiscal agent for Hydro, he must answer the financial questions with respect to Hydro. That's always been the case; there has never been any departure from that.

But I have a question on the $181 million ICBC rubber cheque. Could the minister or the government have guaranteed the account payable of ICBC rather than issuing a cheque? If so, why wasn't that done?

Are you going to answer the question? Did you hear what I said?

I will repeat it again. Could the hon. minister have guaranteed the accounts payable of ICBC without issuing a cheque from the government? If so, why wasn't that done?

Let me answer the question for the minister. (Laughter.) It's always sufficient to guarantee the accounts payable of Crown corporations, and Crown corporations' accounts payable are always guaranteed. There's absolutely no reason whatsoever why this government could not have done so, but they didn't, because politically they had to have some excuse to pay a subsidy to ICBC. The minister nods his head. They had to pay a subsidy. They had to go through this cheque-cutting operation, pay the interest on a loan back and then they say to the public: "Well, we don't subsidize Crown corporations. We're just paying interest on a loan from ICBC." It was just a shell game.

Now that's the answer I know the minister is about to give.

HON. MR. WOLFE: Mr. Chairman, I think the member was asking whether in fact the government could guarantee the payables of the insurance corporation. I believe that was the question. Well, the payables of the insurance corporation, Mr. Member, are 90 per cent represented in claims — thousands of claims. Now you suggest that the insurance company, in a position to not pay those claims, simply asked the government to guarantee them and that this would satisfy thousands of claim-holders. I suggest to you that that wouldn't be proper. As we covered in previous questions in this House and today, a cheque was issued. It's a businesslike transaction. There's no rubber cheque or fraudulent matter involved. The cheque went through the bank and was returned in exchange for treasury bills.

MR. LAUK: Clearly, you're answering a question on behalf of all of the possible claimants and projected....

Interjection.

MR. LAUK: No, that $181 million does not represent the debt of ICBC, and you know it. You're projecting....

Interjection.

MR. LAUK: I didn't mention an amount. I said you're projecting also in that $181 million projected possible — or even, if you like, probable — claims against the insurance corporation. However, it doesn't amount to that. It doesn't amount to $181 million. That's just a bunch of nonsense. Get back to your human rights branch and straighten it out.

Mr. Chairman, it's quite clear that this hoax — this smokescreen — was put up to avoid breaking yet another promise that you made to the electorate of this province. It's also quite clear that you did it to avoid dealing responsibly with whatever debt the ICBC had, and "responsibly" would be to avoid the

[ Page 1125 ]

tremendous increases in rates that were suffered by every automobile user in this province. You did so because you were not careful in thinking of the possibilities — you and the Minister of Education (Hon. Mr. McGeer) and your colleagues. You were not careful in the same way that you designed a budget that also has provided great hardship to the people of this province. You did so without thinking of the effects of such rate increases and tax increases on the people. You did so not heeding the words of W.A.C. Bennett when he said that such tax and rate increases were just excuses for lack of careful budgeting.

Now getting back to that rubber-cheque situation, you issued a cheque to ICBC for $181 million. The Minister of Education, who got that cheque, rushed over to the president of ICBC and spoke to him and got his commitment that he would not cash the cheque, because it was NSF.

You immediately then borrowed $181 million from the insurance corporation. It was a shell game. You must admit it was a shell game. You could have done the same thing by entering in our books an account payable guarantee or some item that would have satisfied the budget representation, but you didn't do it. You did it to create a hoax and this is what we're after now. We want you to come clean. As I said before, Mr. Minister of Finance, all the letters and calls that I've received from all over this province say: "Get Evan to come clean." That's what we're asking you to do.

HON. MR. WOLFE: Mr. Chairman, the reason we continue to hear questions about a cheque to ICBC for $181 million is based on the fact that the members opposite aren't happy with the government paying over the deficit in the insurance corporation. Look at them, Mr. Chairman, the architects of this deficit, sitting there in absolute piety, as though their hands are clean of this whole mess, asking why we had to pay the insurance company the amount of that loss last year — just nothing but ridiculous.

Not only did they object to us paying that $181 million, but when we had to have the borrowing authority, they delayed the passage of the bill for some eight or 10 days, because it hurt them, didn't it? They just didn't like us paying for this deficit which they created, Mr. Chairman, and which the insurance company needed to start out from scratch on a clean bill for the coming year. It's very clear why they keep raising this point. They don't like us paying the insurance corporation for their loss.

MR. GIBSON: Mr. Chairman, if I may speak to the minister's recent remarks as someone who was certainly not an architect of the ICBC's deficit and indeed a constant critic of it, the minister has failed to answer two very clear questions I asked him.

No. 1, who in his department has the authority to authorize the issuance of such a cheque — and that specific cheque in the amount of $181 million — and did they do it in the knowledge that at that time there was nothing like sufficient money in the bank to cover it? That is question No. 1.

Question No. 2 is: what financial charges were made upon the Crown and eventually on the people of British Columbia as these funds washed back and forth between the banks and the government and the Insurance Corporation of British Columbia, either in terms of bank charges or payments to financial agents, or any other kind of charges?

Two very simple, specific questions.

HON. MR. WOLFE: Mr. Chairman, there are no charges for these cheques that I'm aware of. I would like to ask the member whether he would advocate that the Minister of Finance handle the funds of this province on the basis that enough cash is left in the bank at all times to cover outstanding cheques. To my mind, it would be a substantial waste of funds to leave funds in the bank to cover all outstanding cheques at all times.

MR. GIBSON: I'm glad to give him a little bit of advice, Mr. Chairman. I would say that there should be enough money in the bank every day to cover the cheques that come into the bank that day. That much is very clear. A not unusual way of doing that is to arrange for a sufficient line of credit so that if more cheques come in than you expect, they're automatically covered by the bank. The fact of the matter is that in this particular case we were nearing the end of the fiscal year. We were a little more than 24 hours away, at which time no line of credit with any bank was legally possible. That is why in this particular situation we were in an NSF period, and I would like to know who authorized that. Who authorized the issuance of that cheque?

MR. STUPICH: Mr. Chairman, I would like to pursue this question of the cheque just briefly, but first I would ask for your cooperation for a moment. I realize this isn't the time for it, but the students weren't in the gallery until 3 o'clock. I would ask the House to join me in welcoming a group from the Nanaimo Senior Secondary School. I suggested to them that this might be the time for estimates and it's a much more interesting period than normal debates. It's a period of questions and answers, and I'm hoping that we'll get the kind of answers that will make it interesting to them as they observe the proceedings.

Now I'm going to ask the questions, and I'll give the minister an opportunity, Mr. Chairman, to answer them.

With respect to this cheque that seems to be attracting so much of our attention today — and

[ Page 1126 ]

simple answers, of course, would get us off that and onto something else — I'd like to know what date the cheque for $185 million, or whatever the precise amount was, was cleared through the government's bank account and what day the ICBC cheque cleared through ICBC's bank account. Now there are two very specific questions, Mr. Chairman. I'd like the minister to answer those.

I'd like also to give him an opportunity to correct or rephrase something he said about this money earlier in response to a question. I think maybe he didn't mean to say what I heard, at least, when he said that ICBC would probably need this money back, sometime during this period. Now, Mr. Chairman, it concerns me that the minister is nodding in agreement. I would remind him that last year, last fiscal period ending February 29, 1976, ICBC was able to finance its operations completely by borrowing only $28 million from the bank. That was enough to keep it going until its premium revenues started coming in.

I would remind him that one of the ICBC directors — the actuary who did the calculations — said that the premiums for the 1976-77 period were set at a level higher than was required to meet the obligations of ICBC during this fiscal period. On that basis, in that ICBC seemed to have almost enough cash last year with the rates being very low and that the premiums for this period that have already been collected or that are going to be collected on the instalment plan are higher than will be needed for what is expected to be the loss experienced this year, it would seem to me that it is entirely unlikely that ICBC will need any of that $181.5 million back prior to the time that premiums will start to be collected, hopefully in January of 1977. Because we think this year the government will not have the need to deliberate for two months as to what it is going to do with respect to premium levels.

So the dates the cheques cleared the two accounts.... I'd like him to comment again on the need — the unlikely need — for ICBC to have that money back.

HON. MR. WOLFE: Mr. Chairman, the member just on his feet must have missed an earlier question in the House which dealt with the dates that these cheques were cleared. I am looking at the member for North Vancouver–Capilano (Mr. Gibson) who asked this very question. Is that not so?

Interjection.

HON. MR. WOLFE: Yes, you asked the entire question. I gave the answer.

Interjection.

HON. MR. WOLFE: Just nod your head, Mr. Member.

MR. CHAIRMAN: Order, please!

HON. MR. WOLFE: You asked a specific question as to when the two cheques were cleared. The answer to the question, Mr. Member, is approximately April 8, maybe the 9th.

Interjection.

HON. MR. WOLFE: That's correct. Secondly, I answered that question some time ago in this House.

Mr. Chairman, there seems to be some doubt as to whether the insurance corporation will, as the year goes along, require funds. I am advised on their own forecasts that, come about mid fall to late fall, they definitely are going to be in requirement of further cash based on their own estimates. As you get into the last four, five, six months, it is definitely forecast that they will require funds.

MR. LEA: Mr. Chairman, there is no doubt in my mind, and I don't think any other member's mind, that there probably will be money needed by ICBC. That is not the point in question.

But I'd like to put it into a different sort of circumstance if I can.

HON. MR. WOLFE: I'll bet you would.

MR. LEA: Let's take the government and call it the parent and call the child ICBC — the subsidiary of the government. Let's relate it to a family situation because I want the minister to understand. The parent has two children, possibly. So the child comes to the parent and says: "By the way, I am $ 10 short a year in my operating expenses. I would like another $10." The government says: "Right" — or the parent says: "Right. I want to give that $10 to you, son, but I want to do it in a way that will let your brother think that you owe quite a bit of money — more than you actually owe — because I want it to look like I am helping you but I don't want to help him. So I want to make it look kind of fun. So what I am going to do — I am going to write you a cheque for $100. Now I don't have any money in the bank but I do have an overdraft situation at the bank. They'll honour the cheque. What I want you to do is take the $100 cheque to the bank and cash it. I don't want you to spend any of the money. What I want you to do is loan back to me the $100. Then I will give you 10 per cent. I will give you $10.

Interjection.

MR. LEA: With interest, of course — right. Thank

[ Page 1127 ]

you, Mr. Minister — right. We're going to compound this all the way along the line. You see, the kid didn't actually get any money. He didn't get the $100 to loan back.

HON. MR. MAIR: Is this a clean story, Graham?

MR. LEA: Oh, it's clean. If it weren't, I'm sure you wouldn't understand it. (Laughter.) I know you, Rafe.

Now so we get this ridiculous situation of the parent company giving no money to the subsidiary, no money at all, no money coming back, but the parent owing the child some money. But we don't want the brother to know. But the brother finds out — the brother being the public in B.C. It's absolutely ridiculous. As the member for Nanaimo found out, both cheques cleared the bank on the same day — on the 8th. He's his own grandpa. I mean, it's getting more ridiculous all the time. Why don't they just admit they wanted to get some money to ICBC? They found a way to do it but they didn't need $181 million that they said they needed in Bill 3. They didn't need the money. If they did need it, why didn't some money...?

The government said they had to borrow money; that's why they brought in Bill 3. Now they have said they've borrowed $181 million of that $400 million from ICBC, which they say they gave to ICBC. They said they didn't have any money so they had to borrow some money. Then they said: "Well, we'll write them an NSF cheque and when they loan us back the nonexistent money, that's half of that Bill 3 taken care of." It's just absolutely ridiculous. Unless the minister gets up in the House and explains everything in detail....

AN HON. MEMBER: Bill 1-1/2.

MR. LEA: It's absolutely ridiculous. I think the minister knows it; I think he knows it. He's an accountant, he's been around, he runs his own business. He knows that it is ridiculous. Is he asking the people of this province to swallow that cock-and-bull story? It is absolutely ridiculous. The $181 million from Bill 3 wasn't needed. The money didn't exist.

HON. MR. MAIR: Sure it was.

MR. LEA: The government borrowed back their own money they didn't have! It's stupid! It's absolutely stupid! Let's hear the answer, in detail. What happened?

Interjections.

MR. LAUK: The minister indicated that ICBC will need some money by middle or late fall. Those estimates were indicated in this House by the Minister of Education (Hon. Mr. McGeer) some time previous in debate in this House. However, since that time, the Minister of Education has announced that the accident rate upon which those projections were based is declining from day to day. He also said that in the House.

Now if we are to believe the Minister of Education is consistent.... Would anyone here believe that the Minister of Education would not be consistent...

AN HON. MEMBER: Shall we raise our hands? (Laughter.)

MR. LAUK: ...the fact that he was once a Liberal notwithstanding? (Laughter.) Let's put it this way: if the Minister of Education is consistent, then the projections that the Minister of Education talked about — the ICBC projections for the need for this kind of money by October of this year — should have to be revised. Those projections also did not amount to $181 million. They were based on the claims as they were coming in, on a month-to-month basis, and didn't amount to that much by any stretch of the imagination. So really it's a rather specious argument for the minister to say: "Well, why are you arguing that ICBC doesn't need the money?" The fact is that they don't need $181 million. They just don't. They certainly don't need any money until October, yet we went through the charade to justify Bill 3, which was a total and complete political hoax. It should not have been brought before this House. It was a sham and I think that we on the opposition side of the House proved to the public of British Columbia that it was a sham. All we want from the minister now is for him to admit that an easier way could be found. You just guarantee, as we guarantee automatically anyway, the debt of Crown corporations. That's why the whole contingency liability nonsense was thought up in the first place by someone in the past, Mr. Chairman: so we could eliminate the direct provincial debt. I think that probably it has some merit — not for the reasons it was first done — but why didn't we do that with ICBC? I'll tell you why — political revenge act, Bill 3. It was a sham. I think the hon. Attorney-General (Hon. Mr. Gardom) should ask the registrar of companies and the chairman of the securities commission and the deputy minister and six puny judges to investigate this terrible situation. (Laughter.)

MR. STUPICH: Mr. Chairman, I don't know whether we're finished ICBC or not. I'm not sure we're going to get any more answers. We may get more questions.

On April 9, 1976, order-in-council 122 1, under the British Columbia Deficit Repayment Act, provided

[ Page 1128 ]

for the sale of treasury bills in the amount of $250 million. I wonder whether this was sufficient to cover the bank position as at March 31, 1976. Is that why this amount of $250 million is in the order-in-council, or just exactly how did we arrive at this amount?

HON. MR. WOLFE: Mr. Chairman, the amount indicated by the member was just an outside amount that might be required, inside of which we could borrow up to, of which we have borrowed now $181 million in treasury notes. Incidentally, these are very flexible and can be repaid at any time, on demand.

MR. STUPICH: My question, Mr. Chairman, was whether or not this was sufficient to cover the bank position as at March 31, 1976. Was that what you had in mind at the time you arrived at this figure — enough to cover the bank position as at March 31, 1976?

MR. LEA: Mr. Chairman, I would like to ask the minister if there was any money — cash on hand — in the British Columbia Petroleum Corp. or any asset that could have been turned into cash readily without leaving that corporation in dire straits? Was there approximately $25 million that could have been transferred from the British Columbia Petroleum Corp. Into general revenues in this province prior to the end of the last fiscal year?

MR. GIBSON: Mr. Chairman, following up these questions about cash status, I have a question that I just like to ask from time to time: I wonder if the minister could tell me, just very roughly, what British Columbia's cash position is today?

MR. LEA: Mr. Chairman, I asked the minister whether or not he would tell me whether there was any cash in the British Columbia Petroleum Corp. that could have been transferred to general revenue prior to the end of the fiscal year 1975-76. I see he's not getting up and I'd like to redirect that question to the former Attorney-General, the member for Vancouver East (Mr. Macdonald), and see whether he could answer that question.

AN HON. MEMBER: No. (Laughter.)

MR. A.B. MACDONALD (Vancouver East): Mr. Chairman, in answer to the hon. member's question (laughter): BCPC always had a cash reserve which was part of the assets of the province and would have existed up to March 31. There could have been — and I would think it would be at least $25 million — transferred from BCPC. Now I hope I've answered your question and, if you have supplementaries, between the two of us we will answer them. (Laughter.)

HON. MR. WOLFE: I appreciate the answer from the member for Vancouver East (Mr. Macdonald) — the only member for Vancouver East — and I am sure that he would want to point out, if he had more time to do so, that we'd have had to pay interest on that transfer of funds.

MR. MACDONALD: Oh, yes. That's true. You should, in fairness to the corporation.

HON. MR. WOLFE: Yes, only fair.

MR. CHAIRMAN: Order, please.

MR. STUPICH: Mr. Chairman, I'm wondering whether there is anyone to whom I could direct this question about the $250 million — other than the Minister of Finance. Perhaps you could help me. (Laughter.)

Really, the point of my question — and maybe this will help him answer it — is that we went through a considerable debate that, as he pointed out earlier, lasted some eight days — not a period during which we delayed passage of the bill, Mr. Chairman, but a period during which the Minister of Finance delayed passage by not answering questions, and he seems to be following the same route here.

Now what I want to know is: was $250 million enough to cover the bank overdraft at March 31, 1976? It took us several days to decide that the government needed authority to borrow $400 million — that's what Bill 3 was all about. Now does this order-in-council mean that when they came right down to borrowing the money, they found out that all they needed was $250 million out of that $400 million? That's what I want to know, Mr. Chairman. Now to whom shall I address this question? The former Attorney-General (Mr. Macdonald)?

HON. MR. WOLFE: Mr. Chairman, it was stated repeatedly during the debate on Bill 3 that the authority under Bill 3 was to obtain authority to borrow up to $400 million, which would have been the anticipated book deficit of the Province of British Columbia for the year ended March 31.

The warrant, or the order-in-council you referred to earlier, of $250 million was an initial authority required under order-in-council, which is required under Bill 3, to advance a loan against that, and which was just the maximum amount required at that time.

MR. COCKE: Mr. Chairman, if the member for Nanaimo would like to pursue that, I would certainly yield to him.

MR. CHAIRMAN: The member for New Westminster defers to the member for Nanaimo.

[ Page 1129 ]

MR. STUPICH: Mr. Chairman, as I said earlier, we went through a long debate in this House deciding whether or not it was proper for the government to borrow $400 million to meet a deficit that they attributed to the previous administration. The Premier said that he commissioned Clarkson Gordon to come up with a report proving that we needed $400 million, that we were going to be $400 million overdrawn by March 31, 1976.

It would now appear from this order-in-council that instead of being $400 million overdrawn on March 31, 1976, we were overdrawn an amount within $250 million — something less than $250 million — because $250 million was going to be enough to cover the overdraft position at March 31, 1976.

Of that $250 million, $181.5 million — or $185 million — was transferred to ICBC. So it would appear that something less than $65 million was enough to cover the rest of the deficit of the province that included a lot of transfers to Crown corporations which we had not anticipated transferring. So the deficit was much less than the projected figure in the Clarkson Gordon report of $400 million — $150 million, at least, less, Mr. Chairman. Does the minister have any comment on that?

MR. COCKE: Mr. Chairman, I'd be embarrassed, too, and I feel for the Minister of Finance.

Interjections.

MR. COCKE: No, no, I understand. I have a warm feeling for him in my heart, because he recognizes he got sucked into a situation where he had to justify all that campaign material that was spouted across this province.

Let me just read for a second from the economic outlook, 1976, published by friends of the Socreds, the Employers' Council of British Columbia. And if they aren't friends of the Socreds, they ain't got no friends.

What do they say on their very first page? Page 1: introduction summary, the very first paragraph, and the first few words say as follows: "The recession in the western industrialized world has now passed its low point...." In the western industrialized world. We were told by the Socreds that the only place there was a recession was in British Columbia, and that recession was caused by the New Democratic Party. And if it wasn't caused by the New Democratic Party, it was caused by the New Democratic Party government. The Minister of Labour (Hon. Mr. Williams) doesn't quite understand, but in any event.... You know, they weren't your very best friends when you were a Liberal, but now that you're a Socred, they accept you.

Mr. Chairman, they go on to say: with most countries either poised for or already into recovery. The United States is clearly the leader; Japan, Canada, western Europe, aided by the momentum of a U.S. recovery, are gearing up."

In view of that, and in view of any government and its fiscal responsibility to the people, shouldn't they have been watching cash flow very carefully so as not to hurt people? Yes, they should have. And that's exactly what the NDP were doing. But what did the Socreds do immediately they took power? They saw to it that cash flow was adjusted in such a way as to not only hurt but to abuse the people in this province worse than they have ever been abused in history.

Let me just give you a couple of historical points. Remember the situation where the Minister of Finance was saying that they had to pay their claims.

Interjection.

MR. COCKE: Yes, I should know that. But, Mr. Chairman, when I was on that board we saw to it that the premiums got out so the people could pay us so there could be a cash flow in that company.

What did you do? You delayed and you delayed; you couldn't make up your minds. You sat around like a bunch of people who were completely unused to doing business. What kind of a business government is this? You were waiting and waiting so you could really put it to the people. Mr. Chairman, it was either incompetence or abusing the people of this province — creation of an illusion that wasn't really in the best interests of anybody in this province.

Mr. Chairman, we're now paying $40 million a year in interest, according to the minister's own estimates. He's got it set aside.

Interjection.

MR. COCKE: Check your estimates, Mr. Member. You're not likely to speak in the estimates, but in any event, why don't you just check them for fun?

MR. WALLACE: Yes, vote 69.

MR. COCKE: That's right, and that's precisely what we're being asked to endorse today.

I just can't understand what's going on in that minister's mind. You know, he was a very nice chap; he's always tried to get along. But then he gets stuck with a political vendetta, and he has to be the guy that's out in the forefront. I feel sorry for him because really he's a nice fella. He really is; he's a real nice guy.

Mr. Chairman, I want to ask one more question of that nice guy. I'd like the minister to stand up and give us an absolute undertaking that the first

[ Page 1130 ]

minister.... I'm worried about getting hoarse and.... Even some of my colleagues kind of agreed that Ray Williston used to answer on Hydro.

I happen to have been sitting in the House when that member, when that Minister of Lands, Forests, Water Resources, and practically everything else under heaven, did not answer. He would point out, when we got down to his estimates, that the fiscal agent was the Premier and that we'd missed our chances. Now I don't want to be placed in that position. If the Premier is going to answer the questions on Hydro — great. Fine. Just as long as we know somebody's going to answer the questions on Hydro.

Certainly, Mr. Chairman, as I read the Act, the Minister of Finance is the fiscal agent — section 4, verse 2. Would the minister just give us, an undertaking? — a little more than a nod of the head; let's put it in Hansard. Will the first minister answer questions on Hydro?

HON. MR. WOLFE: Mr. Chairman, I answered that question earlier — I guess you were out of the House, Mr. Member. I indicated with your cooperation that questions on Hydro would properly come up either under the Premier's estimates and/or the Minister of Transport and Communications.

MR. G. MUSSALLEM (Dewdney): Why don't you stay in the House — stick around and pay attention?

Interjections.

MR. CHAIRMAN: Order, please.

MR. LEA: One final question on ICBC and the $181 million. I don't think there's any doubt in anybody's mind what really happened. It was as I outlined earlier: no money changed hands. If that's the case — that they said that ICBC needed $181 million, but ICBC didn't get the $181 million because both cheques cleared on the same day — they didn't get it. So if they needed it, what did they need it for when they didn't get it? There has to be some answer to that, I would think, other than political jiggery-pokery. It either means that they didn't need it, or it was needed politically. If it was needed politically, then we're back to Bill 3.

Mr. Chairman, either the Prime Minister, or the Premier, takes upon himself to be the Minister of Finance himself, or he gives it to someone who is strong or someone who is pliant, depending on the personality of the Premier himself.

I would suggest to you that in this case, because of the lack of answers that we've been getting in this House, he appointed someone who is pliant so he can really, in fact, be the Minister of Finance himself.

That's exactly what is happening here. That is why we're not getting any answers, because that minister is not even kept abreast of what is happening within his own department.

I'd suggest to you, Mr. Chairman, that he's being bypassed. He was bypassed, he admits, when there was an order given to change the budget speech. He admits that. I suggest to you that he doesn't know the answer to the questions that are being asked of him. He doesn't know because he's being by-passed by civil servants; he's being bypassed by his colleagues, and he doesn't know the answers.

I suggest to you, Mr. Chairman, that there are members in that government back bench sitting there right now who know that when I tell the story of the $181 million...especially a person who has a long history in the credit unions in this province and knows how that thing is done, the member for Boundary-Similkameen (Mr. Hewitt); a member who sat in this House as a cabinet minister, the member for Skeena (Mr. Shelford); a business person, the first member for Victoria (Mr. Bawlf); Vancouver South (Mr. Rogers and Mr. Strongman ; Burnaby-Willingdon (Mr. Veitch). They all know but they're not willing to stand up and question it because the carrot is being held out of cabinet posts after the session.

SOME HON. MEMBERS: Oh, oh!

MR. LEA: That's what they're doing. They know darned well that there's political chicanery going on with that $181 million, but they're not willing to stand up and take their place and talk about it, but I'll guarantee you after the new cabinet posts are filled that those who remain there will be on their feet once in a while. That's how it works. Did you ever notice, Mr. Chairman, how when some votes are taken, like the social services tax, that some members aren't even in the House to be recorded?

MR. CHAIRMAN: Order, please.

MR. LEA: Like the member for Skeena (Mr. Sheford) — he learned some tricks over the years. They can't hold your name up and say you voted for it, Mr. Member.

MR. CHAIRMAN: Order, please.

MR. LEA: So I'm suggesting....

MR. CHAIRMAN: May I interrupt the member?

MR. LEA: Sure!

MR. CHAIRMAN: May I interrupt the member just long enough to remind him that standing order 40 (3) says: "No member shall reflect upon any vote

[ Page 1131 ]

of the House passed during the current session, except for the purpose of moving that such vote be rescinded." So I ask that the member refrain from reflecting on votes that have already passed.

Interjections.

MR. LEA: It seems to me, Mr. Chairman, that we may as well forget the $181 million and what happened to it, because the minister is not going to answer.

HON. MR. WOLFE: Mr. Chairman, you must forgive them. They know not what they do. (Laughter.)

MR. WALLACE: Author!

HON. MR. WOLFE: This question has been answered over and over and over again, but they don't like the answer. It hurts! The $181 million smarts a little, doesn't it, Mr Member?

MR. LEA: No.

HON. MR. WOLFE: Oh, yes. That's $181 million you created. That's the whole reason they keep asking the question, because it hurts. Deep down it hurts, that $181 million. So that's why they keep asking the question. They know the money was paid to pick up the deficit for last year. They know full well, and they just don't like it.

MR. LEA: One final question. If the money was needed, why didn't they get the money? They don't have the money.

HON. MR. MAIR: They did get it!

MR. LEA: They don't have it. They loaned it back to the government. So they didn't need it, right?

AN HON. MEMBER: They got it!

MR. LEA: They got it? They had it for how many hours on the same day?

HON. L.A. WILLIAMS (Minister of Labour): How do you pay your debts?

MR. LEA: "How do you pay your debts," the Minister of Labour says. When you owe money you pay the person you owe and he keeps the money. You know that's how you pay debts. I mean, you are a lawyer. You may not do it that way, you know.

The fact of the matter is that the ICBC does not have the $181 million. If they needed it, why don't they have it? It's that simple. Tell us why they don't have it.

Interjections.

MR. CHAIRMAN: Order, please.

MR. STUPICH: Mr. Chairman, I was hoping we could keep this on a relatively high plane, at least for the first hour while the Nanaimo students are here. It is, as I say, a period of questions and answers. So I dissociate myself from these wild political.... (Laughter.)

Mr. Chairman, I would like to ask some questions. We have had some, you know.... The member said we'd like to have some answers. Mr. Chairman, we have an answer. We found out that one day after we finished debating a bill that was supposed to prove to the people of the province, and to the members in the Legislature who were asked to vote for it, that the government needed $400 million to meet an overdraft at the bank, one day after we finished debating that bill they found out that all they needed was $250 million, and that included the $181.5 million transferred to ICBC. There were other things in there that weren't needed, but we found out that rather than $400 million, we had really been debating something within $250 million. I appreciate.... I'm not reflecting on what the House did. I'm just saying that perhaps we should move a motion to do that and start all over again on the basis of this order-in-council.

However, Mr. Chairman, I would like to ask some questions and, granted, some of these may have been answered. I am out of the House sometimes. I'm not sure whether anyone has asked about the costs of the Clarkson Gordon report. That question may have been asked. If it hasn't been asked, I would like to ask the minister if he knows the cost of that report.

I would like to ask him a little more about the report itself.

AN HON. MEMBER: The cost of the Clarkson Gordon report?

MR. STUPICH: The cost of the Clarkson Gordon report.

The minister, on an occasion somewhere or other — I think not in the House but somewhere — did say that he received a copy of the report as early as February 10. That is eight days before the report itself was actually dated and 10 days before it was released. The minister said that it was.... He described it, I believe, at that time as an incomplete draft. The hon. member for North Vancouver–Capilano (Mr. Gibson) on April 5 asked a question about the Clarkson, Gordon report — asked: "Did he, or any other member of the government, receive in whole or in part an advance draft of the

[ Page 1132 ]

Clarkson Gordon report before its final submission?" Well, as I say, that question was answered. The minister admitted receiving it on February 10.

But under further questioning about the fact that he apparently had this report eight days before the final report was dated, the minister did say, in a very specific.... "I would like to assure the House, Mr. Chairman, with regard to the Clarkson Gordon report, that I received the only copy of this report and that no change was made in any figure supplied by this report."

Now my question, Mr. Chairman.... I think the wording there is very precise: "No changes were made in any figures." What I'm wondering, Mr. Chairman, is: were there any additional figures supplied in the eight days between the initial incomplete draft — in other words, was it incomplete with respect to some of the figures, was it incomplete with respect to some of the wording, were words added or words subtracted? There would be nothing wrong in this if the government was trying to present its particular point of view, and assuming that it was not imposing anything on Clarkson, Gordon that they were not prepared to sign, there would be nothing wrong with that. But were there any changes made — I don't think changes in figures supplied, but were additional figures supplied that were incorporated in the report after the initial draft was received? Were some figures deleted, or were there changes in the prose itself that made the initial draft an incomplete one?

HON. MR. WOLFE: The member asked the cost of the Clarkson Gordon report. I indicated earlier, I think, that it was $50,000 including expenses. I recognize the continuous attempts to throw disfavour on the report and the fact that it was influenced in some way, and I can assure you this has not been the case. It's the report of the Clarkson Gordon Co. and there have been no figures altered.

MR. STUPICH: Mr. Chairman, I note again that the minister is very careful to say that there were no figures changed. Now that, Mr. Chairman, with respect.... Lawyers always say with respect when what they mean is no respect, and I leave it to the Minister to decide whether or not I mean that in this case, because he keeps saying no figures were changed. He's being very careful not to answer the question as to whether additional figures were supplied after the first draft was received, whether some figures were deleted, or whether the prose of the report itself was changed.

I'm not trying to throw any disfavour on the Clarkson Gordon report at all, Mr. Chairman. I may be trying to throw some on the government itself, and I did say that there could be some changes made in this report that would be entirely consistent with Clarkson Gordon still putting their name to it, because they say in this report that all they were asked to do and all they were doing was consolidating information that the Minister of Finance had made available to them. That's what they were asked to do and that's what they were doing.

It would be entirely within the scope of this description of the report had the government said: "Some of the figures that were given to you we want to withdraw. We want to add some additional figures. We want to change some of the prose in your report." As I say, that could well have been done in negotiation with Clarkson Gordon. Now I don't know why the Minister has to be so precise in his wording if indeed such changes were made.

Why not admit what changes were made and let it go at that rather than coming back over and over and saying no figures were changed? Because in saying that, Mr. Chairman, he leads us to suspect that many other things were changed. We have to draw our own conclusions or use our own imagination to determine just what changes were made when the Minister insists on saying over and over no figures were changed.

Now is the Minister standing with that answer? Is that all he's going to say about changes in the Clarkson Gordon report?

MR. W.S. KING (Leader of the Opposition): Mr. Chairman, I'd like to explore this matter of the $181 million cheque that was directed to ICBC and the subsequent revelation that this amount had been loaned back to the government one day after its receipt by ICBC. I'm curious, Mr. Chairman. I have difficulty understanding finance matters. It's not one of my long suits and I'm looking for some help from the Minister of Finance in terms of understanding this kind of procedure.

I wonder what the term of that loan is? I wonder if the Minister of Finance could tell us how long the government has loaned this $181 million back from ICBC which was directed to ICBC from the government in the first place. Is it a one-year term? Is it two, or is it three? Because I'm interested in knowing what's going to happen with the interest that accrues to ICBC presumably from that $181 million to the government. As I calculated, it'll be somewhere in the order of $18 million if that loan is of a one-year tenure.

On the other hand, if the loan is for three years and it's not reduced — the principal is not reduced — then similarly it would multiply in that amount over those years that it's in effect. I'm wondering why the government chose to put ICBC in such a financial position that they could not only liquidate alleged debts that that corporation had at the time, but appreciate interest on a loan to the government to the tune of $18 million a year.

Now I can only conclude as a layman that that will

[ Page 1133 ]

be a surplus in the hands of ICBC. I'm wondering whether or not the government has a master plan to use this interest payment, in effect as a subsidy to ICBC, to generate a surplus which might be used two or three years down the road for the purpose of coming up with reduced automobile insurance rates — perhaps even fortuitously on the eve of a new election.

AN HON. MEMBER: Oh, oh!

MR. KING: I wonder if that's the motivation, because it seems difficult for me to conceive of this poor Crown corporation, which the government claims was in dire straits from a financial point of view, now in the happy position of sitting back and reaping $ 18 million a year in interest rates from the government. For what purpose? For what purpose? What is the tenure of that loan? What is the precise interest rate? I understand it's 10 per cent. What is the anticipated use to which that accrued interest will be put within the corporation?

HON. MR. WOLFE: Mr. Chairman, the member has asked the term of the treasury notes. Those are drawn for a one-year term and they can be liquidated on demand from either party in question. It's very doubtful that any one of those treasury notes would be outstanding a year from now. As I explained earlier, because of the surplus of cash in the insurance corporation at the beginning of the year which will decrease as the year goes along, they won't be in a loaning position or an investing position come mid year or a little later. We are all aware of this. Therefore it is also doubtful that the interest revenue to the insurance corporation for the entire year from the loan to the Province of British Columbia would be as much as $18 million.

I think it's an obligation of the insurance corporation to show good financial prudence to put out its money as it's available. It has done so with a loan to the Government of British Columbia as well as other short-term investments. But they are definitely going to have to draw down and demand these notes back as the year goes along. We anticipate this. Therefore there won't be as much as 10 per cent of $181 million accruing to them from this investment for the year. I would not anticipate that.

MR. KING: Mr. Chairman, I assume, then, that the province's finances are not in all that bad shape either if we are going to be able to liquidate that loan within the period of one year.

HON. MR. WOLFE: We'll have to get another loan.

MR. KING: It's not a loan?

HON. MR. WOLFE: I said we'll have to get another loan.

MR. KING: Oh, you'll have to get another loan. Well, that's quite interesting. I am to assume then, apparently, that a portion of this debt will be liquidated over the course of one year so that we might be looking at even half of that revenue in interest to ICBC over the course of the one-year tenure. That's assuming the loan is not renewed at the expiry of the one year. But we are still looking at something perhaps in the order of $10 million to ICBC, which is a pretty significant chunk of cash.

As I say, the indications were, on the basis of the government's figures, that the $181 million loan completely liquidated any alleged debt which ICBC had. So we are looking at a situation now where ICBC will have a brand new source of revenue guaranteed from the government which, in effect, in my view, is a subsidy for the current operating year. I wonder if the government is anticipating reducing premiums commensurate with that increased windfall of cash that ICBC has received. I wonder if the minister can answer that question.

HON. MR. WOLFE: Mr. Chairman, I don't understand the member's inference that there is a subsidy. This money which was in the hands of the insurance corporation could have been loaned to anyone else.

MR. STUPICH: Mr. Chairman, with your permission, I will move on to a slightly different tack.

Interjections.

MR. STUPICH: I seem to have the minister's permission anyway. I did raise this in an earlier debate, and I think the minister registered a bit of surprise at the time, but perhaps he has had some time to look into it in the meantime. The Clarkson Gordon report shows the forecast of budgetary revenue to be $2.9 billion. The budget figures — that is, the budget speech figures — show a figure in excess of that, Mr. Chairman, of $2.918 billion, almost $2.919 billion. Now can the minister tell us why the figures are different? I think perhaps it's because they used figures that were a different month, but I would like some confirmation of this.

HON. MR. WOLFE: Mr. Chairman, I think about the only explanation I can give, without going into the detail of all the items, would be that the one estimate was prepared perhaps two months later than the other one.

MR. STUPICH: I did suggest, I think, when I spoke on this a couple of weeks ago, that likely that

[ Page 1134 ]

was it, that the Clarkson Gordon forecast was based on December figures and the budget probably on January figures. Now the minister has had plenty of time since then to see the comptroller-general's figures for February, and even for March, and I am wondering whether, in view of those figures, he would now be able to revise the budgetary revenue for 1975-76. The total here is shown as almost $2.92 billion, up almost $20 million from the forecast that was prepared on the basis of information available a month previous. There is now two months' additional information available and I wonder what the revised figure is.

HON. MR. WOLFE: Mr. Chairman, I am not sure I understand the question, but I believe the answer would be, if it's the question I think it is, that we have indicated as a matter of policy that we will be publishing quarterly reports as soon as we can get these established.

It would be, I think, even if I had the figure in front of me, misleading to indicate at this stage what the position was in those intervening two months until the final figures have been taken off.

MR. STUPICH: Mr. Chairman, we had no hesitation in reporting.... Well, the previous administration, Mr. Barrett and myself, reported in mid December as to what we felt the budgetary revenue forecast would be on the basis of November information, and that was $2.98 billion, the budgetary revenue. The government had no hesitation in presenting the Clarkson Gordon report and the Premier even introduced it as an investigation, as research into finance, although Clarkson Gordon say it was nothing of the kind. Yet we had no hesitation at all in saying: "Well, our forecast for revenue for the period is $2.9 billion, down $80 million from the figure that we had a month earlier. We had no hesitation in coming up with a budget speech prepared probably on the basis of information available in February — January information, that is — no hesitation in saying, well, the forecasts for revenue are going to be higher.

It would look as though the economy or the government revenue is going to be better than we anticipated when Clarkson Gordon were supplied figures up to the end of November or December. Now the minister seems to be reluctant to tell us whether in the light of the experience of the last two months we can expect an even higher revenue.

During the course of the debate, I believe, on Bill 3, I pointed out that the difference between the figures that Mr. Barrett and I presented in December and the figures in the budget speech, the difference in budgetary revenue of $80 million.... The gap had been closed by $30 million in that one month and I asked whether or not the minister would be able to tell us whether the gap was still closing. Now I did that several weeks ago and I was hoping the minister would be able to give us some indication. Certainly we don't want a precise measure. We know that the figures for March cannot be complete for some time yet, but there is the same kind of interim information available now for February and for March as was available when the budget speech was presented and as the Clarkson Gordon material was put together.

MR. COCKE: Mr. Chairman, in line with what the member for Nanaimo (Mr. Stupich) is talking about, and just how invalid the Clarkson Gordon report was as far as the government was concerned, their direction, let me give you an idea of how this government was operating.

We recall that the Clarkson Gordon report came out on February 20. Three days after that report came out, what did the Minister of Health (Hon. Mr. McClelland) say about his own particular area of activity? Let me quote from the Vancouver Sun of February 23: "The Health minister, Bob McClelland, said today there is no active proposal within the government to raise hospital or medicare rates."

No active proposal to raise hospital or medicare rates, Mr. Chairman. That's flying in the face of the old Clarkson Gordon syndrome.

Mr. Chairman, this group really have done a great disservice to this province. They have hit both ways. They created this artificial debt and then they kicked the pants — as the Consumer Services minister (Hon. Mr. Mair) would recommend....

Interjection.

MR. COCKE: I'm not going to say it as graphically as you did, because you said it outside the House and you can get away with that sort of thing. But you can't say those kinds of words in the House, Mr. Chairman, and particularly with a chairman who is so very much opposed to that kind of language. He, however, associates himself with you.

I also look today at the Victoria Times and they talk about how a one-two punch could mean a 16 mill increase, a 16 mill rise. This is the Minister of Finance who during an election campaign fought recently was going around this province as a campaigner suggesting to the municipalities: "What you need is the Socreds. We'll look after you." Boy, how they've looked after them! They've hurt them in health. They've hurt them in municipal affairs. They've hurt them in education. Mr. Chairman, and with all of that, they're trying to justify this no-answer position with respect to the kite work that was going on with the $181 million, the work....

Interjection.

[ Page 1135 ]

MR. COCKE: Well, Mr. Chairman, have you heard any answers? You're unbiased. You're sitting there in that chair totally unbiased. We know that you were elected as a Social Crediter, but we know that the minute you get into that chair, you become totally unbiased. He's nodding his head. He's unbiased, and he's agreeing with me totally, Mr. Chairman. I like a Chairman like that who will be unbiased and will let his feelings be known by the way he nods his head.

HON. G.B. GARDOM (Attorney-General): He's biased if he agrees with you totally. (Laughter.)

MR. COCKE: Mr. Chairman, so much for the....

AN HON. MEMBER: You're attacking the Chair.

MR. CHAIRMAN: Order, please! We're on vote 61.

AN HON. MEMBER: The Liberals are trying to get rid of you, Harv! (Laughter.)

MR. COCKE: Mr. Chairman, I don't really think that we have to make too many points with respect to the direction of this province, but we certainly must say that as an opposition we have to do our very best to see to it that the people in this province understand what this government is all about. We have to let the people in this province know that even the Health minister (Hon. Mr. McClelland) having a good grip on his portfolio, surely, by February 23 and having met....

Mr. Leader of the Opposition (Mr. King), don't you dare tell me that that Minister of Health hadn't been in cabinet meetings discussing the draft of the Clarkson Gordon report well before the public knew about that report. Despite that he was able to get up....

AN HON. MEMBER: The Liberals lot him into cabinet once in a while.

MR. COCKE: Yes, I was wondering how come he got there. I guess they just didn't have enough sprinkling of Liberals to get around, I would hate to be the Highways minister (Hon. Mr. Fraser) right now, Mr. Leader of the Opposition. Ohhh, his record isn't very good! He's been a Socred.

MR. CHAIRMAN: Vote 61, please.

MR. COCKE: Oh, Mr. Chairman, I must get back to vote 61. The whole thing, I think, I am trying to prove here is that the Minister of Health said that there had been absolutely no discussion as late as February 23 around the question of increasing hospital rates to individuals or, for that matter, increasing the rates to medicare participants. What happened? There was a 150 per cent increase to medicare participants because the Minister of Finance said: "Look we've got to keep it going across the board. We've got to keep those revenues rolling so that we can....

Interjection.

MR. COCKE: What? — 400 per cent, however. I beg your pardon — 400 per cent to those people who are ill, going to the hospital, the acute-care section of the hospital, and 700 per cent to those chronically ill, even those in the constituency of Cariboo, Mr. Minister of Highways. Watch your back! I'm not sure what these people are trying to do to you.

Mr. Chairman, they have been all over the ball park. They won't answer questions with respect to how come, why they need all this money, and at the same time they are rapping it to every sector of our society. Let the Minister of Finance get up and prove once again, as he did in the good old days when he sat just over there — that was between '69 and '72 when he was probably as straightforward a member as you could ever find in this House. Mr. Chairman, he didn't fluke into that cabinet surely. He has had sound experience with either the Liberals or the Conservatives over the years. I suggest that he can answer a few questions here that would be revealing to the people in B.C.

MR. GIBSON: Mr. Chairman, I'll just very briefly start out by repeating the two outstanding questions I have on the floor that the minister hasn't answered: who authorized the $181 million NSF cheque for ICBC at a time when the money wasn't in the bank? Question 1.

Question 2: what is the approximate cash position of British Columbia today? Because I think that Ministers of Finance traditionally have known that; this minister ought to know if he hasn't answered the question.

Just having recapped those questions — I'll keep repeating them briefly until the minister does answer them — I would ask: what is his intention with respect to the report on the cash management of the Government of British Columbia as reported in the column of George Froelich in the Vancouver Sun the other day and done by the B.C. Central Credit Union?

Mr. Froelich suggested that this was an excellent report, of such excellence indeed that another government — the Government of Massachusetts, I believe — had already been making inquiries of the minister to ask if they could receive a copy. But again, according to the columnist, the minister is sitting on that report, I would ask him first of all if it is correct that this report exists — I assume it was commissioned by the previous government; secondly,

[ Page 1136 ]

what it contains; thirdly, when he plans to release it.

MR. L. NICOLSON (Nelson-Creston): The same question that has been raised by the member for North Vancouver–Capilano (Mr. Gibson) also brings another question to my mind: that is, about the authority under which the $181 million cheque was signed.

We see that the cheque was dated on March 30, 1976. We also note that the order-in-council which would apparently give some of the authority for the writing of that cheque was passed by the executive council on March 30.

But it was not passed by the Lieutenant-Governor, it was not approved by the Lieutenant-Governor, did not become law until March 31. Therefore the cheque was passed without approval of the Lieutenant-Governor. It was written without approval.

I want to know, also, who authorized the signing of that cheque, or the vouchering of that cheque, without approval of the Lieutenant-Governor. It hadn't been up to Government House; it hadn't been back. That's a law, and it's a law that should be kept. You know, if a person is caught driving impaired, it's an automatic suspension, lifting of licence. When government breaks the law, we don't even have a clear admission that it was done and that it won't happen again.

AN HON. MEMBER: Was this a case of signing impaired?

MR. NICOLSON: Well, yes, it was sort of an impaired signing. A very good suggestion, Mr. Member. I think that whoever was signing impaired should maybe have their licence lifted or something for a number of months.

AN HON. MEMBER: Hear, hear!

MR. NICOLSON: Really, seriously, you know, what laws are we going to obey in this province? Who did it? Who authorized the signing of that cheque?

HON. MR. WOLFE: Mr. Chairman, we've had repeated questions on the ICBC, which I believe we've canvassed pretty well. Perhaps the member didn't hear some of the earlier ones. But they obviously don't like the answers to those questions, because they don't like the government paying the insurance corporation for their deficit, period. Yes, this is correct. As a matter of fact, the member for North Vancouver–Capilano (Mr. Gibson) supported the payment for that deficit, and I'm curious to know why he doesn't understand why we wanted to pay them.

I'd like to answer his question — if he wouldn't mind just waiting a moment. He raised a question regarding a study of cash management which was in a newspaper column recently, and I'd just like to inform him that this was presented to us, shortly after we took office, by the credit union. It's a fantastically large document, about two feet deep, of studies relating to the various matters of government — one of them being, I understand, having to do with cash management.

Now we have been in discussion with the previous ministers involved with ordering this study over the matter of a bill which they had been presented with for $155,000. We received this report at the request of the task force who prepared it, not at our request.

But, in the meantime, we have not read the report or given it study. I've recently had a look at one volume of it — just as recently as last week, Mr. Member. We're now dealing with the matter of looking at it, and we're negotiating in an attempt to arrive at a proper conclusion to the bill which is owing for this, because we really feel that it is excessive, that there is no proper documentation on our files or provided to us by the former ministers for having authorized the purchase of this, or the amount authorized for it. So this has been our reticence in approving it.

We have made, I might say, quite some improvements in attempts to upgrade our cash-management system, and these are still going on.

MR. GIBSON: Mr. Chairman, I thank the minister for that information. I would ask him again, though: will he undertake to make that study public? Because irrespective of how the payment of the bill is eventually arrived at, presumably this is an important study for British Columbians to have to appreciate potential improvements in the internal workings of the government, and I would ask him if he would make that undertaking.

HON. MR. WOLFE: Mr. Chairman, until I have reviewed the matters in report and know what they contain, and also members of my department, I would hesitate to give that commitment, but I certainly would at a later date.

MR. GIBSON: Just a follow-up. I wonder if the minister might undertake to, say, have that done within a couple of months, make that decision within a couple of months?

MRS. B.B. WALLACE (Cowichan-Malahat): Mr. Chairman, my question deals with a slightly different aspect, and hopefully we can get some more precise answers than we've been getting.

I note that vote 61, of course, is much larger than it was last year, because we now have a separate Minister of Finance. It makes up a fairly considerable

[ Page 1137 ]

portion of the total moneys for which the Minister of Finance is responsible. I note, too, that the staff increase has increased from one to four in vote 61. But I note, too, that in the overall staffing of the Department of Finance there appears to be an increase of some 47 bodies within the department.

AN HON. MEMBER: How many skeletons?

MRS. WALLACE: Yes, I'm just wondering how many skeletons are in there. I'm wondering if there is an increased responsibility — you know — just what has gone in to making up this quite sizable increase in staffing in a department that, as far as I can see, has really not gone into any increased or extended endeavours or included any additional responsibility, nor any drastic increase in other funding apart from these bodies.

I'm wondering whether we could have some explanation of why we have so many additional people and just how they are going to be used.

HON. MR. WOLFE: That's a very good question, Madam Member. In answer to it, if I just may summarize, there's an increase of 47 positions indicated in the department. Of course, as you know, the new minister's office being separated from the other accounts for one increase. General administration is an increase of six. Control and audit is an increase of 23. The other major one is the Purchasing Commission, which is an increase of 11 positions.

Most of these that I am now answering to were covered in orders-in-council back in April, 1975, under the former government, which saw fit to increase the staff at that time in the Finance department. There would appear to be a need for increased coverage both in the audit and control department, in the Purchasing Commission, and, as I mentioned, in general administration, but these were, by and large — 90 per cent — involved in orders-in-council passed last April by the former government which were not included in last year's budget.

MS. K. SANFORD (Comox): Mr. Chairman, I would like to ask the Minister of Finance who did authorize the change in the budget speech. I still shudder at the blatant political nature of that speech, and particularly do I shudder at the direct attack on other administrations around the world. If he is not able to tell us who authorized it, I wonder if he could let us know whether or not, at least, he did not authorize it. I wonder if he could give us that information.

The other question that I have relates to the possibility of a surplus in this year's budget. I recall that a couple of years ago when the Minister of Finance (Mr. Barrett) was answering questions on the budget at that time, he indicated to the House how the money would be spent — on what kinds of services and where the money would go.

I know that the Minister of Consumer Services (Hon. Mr. Mair) had indicated that he feels that the predictions made by this government will be within $1,000 of the actual amount collected. I find that'a rather incredible statement for the Minister of Consumer Services to make, because it's obvious that a lot of things can happen that will change the circumstances. Budgets do not always come within $ 1,000, particularly when you're talking about a $ 3.6 billion budget.

We have seen various cuts in services such as the ambulance services and cuts in funding for various programmes such as Women's Place at Campbell River, for instance. We've also seen cuts in the Highways budget itself. I'm wondering if the minister could indicate to us, if there is a surplus this year, how the money might be allocated throughout the various departments.

HON. MR. WOLFE: Mr. Chairman, I'm glad the member raised the question which perennially comes up regarding the budget speech, and the versions of it, and so on, because I believe this is entirely magnified out of all proportion. I have last year's budget speech here, and as I attempted to mention earlier, the discrepancies between it and the published and distributed version are really substantial. There's not a page in this where I can't point out financial, substantial differences between what was said in the House and what was said in the distributed version. I'd just like to quote two. For instance, in the Minister of Finance's (Mr. Barrett's) speech of a year ago February, there's an item not in the budget speech which was distributed: "I am informed that we will be able to announce for the Ocean Falls company a profit for this year. It's not going to be very much, but it's better than a loss. We said that we would buy Ocean Falls and operate it et cetera.

Now that was not in the distributed version of the budget speech.

Second item: "Bank profits last year are up 23 per cent in one year. I think there's even an admonition against that in the Bible." This is a favourite topic of the former Finance minister, as you all know, but I could go through this document and on every page there's a substantial matter referred to in the speech as spoken in the House that is different completely from the distributed version of the budget speech.

HON. MR. MAIR: On a point of order, Mr. Chairman, unless I'm mistaken in what I heard when I was in my office picking up a file, the member for Comox (Ms. Sanford) suggested that I said to the House to the effect that I did not see our budget

[ Page 1138 ]

going over $1,000, or being out more than $1,000. I did not say that.

AN HON. MEMBER: Order!

HON. MR. MAIR: No, I think I'm on a legitimate point of order, Mr. Chairman. If that statement was made about something I said, I did not say it.

MS. SANFORD: Mr. Chairman, if I could just follow up on that, I did not indicate that it had been stated in the House, Mr. Minister, but it refers to an article that I read in the press, and perhaps the press misinterpreted what you had said. That could well be, but this is something that I did read and pick up, and I could certainly provide you with the copy of that if you so wish, Mr. Minister, and if you wish to correct it.

To follow up, Mr. Chairman, the Minister of Finance indicated that there were several discrepancies in the version of the budget speech as presented in the House from that which was distributed throughout the province and throughout the rest of the world. I think he misses the point, which is that the original distributed version is the one that has been altered. I assume that the government was so embarrassed when they recognized what damage they had done in terms of attacking these other governments in other countries that they reconsidered and halted the printing, in effect, in order to make the changes.

We have two distinct versions that are printed and published. My question to the minister is whether or not he is the one who authorized the Queen's Printer to halt the printing and to make that change deleting the references to the other nations.

MR. COCKE: Mr. Chairman, there's no question that the Minister of Finance has difficulty, but it's early in his trip in this particular area, and I certainly feel somewhat sorry for him. But every time I think of how sorry I should feel for him, then I'm admonishing myself sort of unconsciously, because I sat here and I listened to that Minister of Finance on budget day read a speech that I found pretty darned hard to take — so much so, of course, he found it hard to take.

You know, he dances around. He uses Hansard, and then the budget speech.... How many of those things were printed? You printed some and then you got embarrassed; then you stopped printing them and you started printing others. Mr. Chairman, I despair. I really do. All the time he was reading that budget speech what was he doing? He was saying: "We want everyone to be full of restraint" — full of restraint, representing a government that hasn't shown one inkling of restraint, raising prices, raising this, raising that. And the Minister of Transport (Hon. Mr. Davis), I guess, is away creating those new ferry rates right now.

Mr. Chairman, there is no restraint from their standpoint. They want the people to restrain themselves, but they're not prepared to restrain the government in this province.

I can give you a little bit of the philosophy of that. That same minister wasn't in the House when I suggested before that he and I had a chat prior to mid April, 1975. At that time he wasn't suggesting restraint, Mr. Chairman; at that time he was telling us on behalf of his own company.... We had other admonitions from the Automotive Retailers' Association, telling us what the ICBC should be paying body shops.

Interjection.

MR. COCKE: Why don't you go back to Hawaii and rest for a while? Mr. Chairman, the member for Coquitlam (Mr. Kerster) rides his white charger into this House. He doesn't stand up and speak into his microphone and talk about the Finance department; he sits back in his chair and admonishes me to be careful.

Let me suggest that the required rate by the Automotive Retailers' Association was $19.39, $19.78 and $26 graduated, and you've seen this report, I'm sure. You were in the business at that time, and I suspect you may even be now. I certainly know my good old colleague, the Whip from the other side (Mr. Mussallem), is still there. You know, the Minister of Finance now wasn't preaching restraint then. He was talking about $23 or $24 an hour, but I think, he was willing to settle; in his letter he indicated quite clearly that they needed at least a minimum of $21 an hour to operate.

That's fair enough, Mr. Chairman, but we were awfully high compared to any other jurisdiction in this country. Maybe our automobile repair people are not quite as efficient as they are elsewhere. I'm just trying to indicate to you that while he did his trip — as the member for Comox (Ms. Sanford) said — on this House and on this opposition during the budget speech, he sure wasn't a few months earlier doing that same kind of thing when he was saying "get those rates up." There was no restraint then.

That's why I find it so difficult to sit back with any kind of patience at this time or, for that matter, during the reading of the budget speech. Mr. Chairman, I suspect that the minister is a little bit embarrassed to answer some of the questions that have been put to him — and a little bit embarrassed for awfully good reason. He's a little bit embarrassed because what we have seen....

AN HON. MEMBER: You're too embarrassed to read that whole letter.

[ Page 1139 ]

MR. COCKE: I'll read the whole letter if you care to take up time in your estimates. Okay, we'll put it on the record, Mr. Chairman.

But what we have seen is headlines like this: "One-Two Punch." We've seen that kind of headline for practically every day, every hour since the Social Credit have been in government. Yet they ask the people to sit still.

Interjection.

MR. COCKE: Yes, Mr. Chairman, I'll read the letter; the minister would like me to. "He said at the time, as a director of the Insurance Corp. of B.C., 'I'm sure you're aware that body shop rates are currently applying....'"

MR. CHAIRMAN: Order, Mr. Member. You will relate this to 61, will you?

MR. COCKE: Mr. Chairman, I can only relate it to that member by virtue of the fact that that member's boss, the minister, asked me to read this letter so we can get it into the record.

AN HON. MEMBER: It's a personal smear.

MR. COCKE: A personal smear! I couldn't believe.... That was one Minister that I didn't think would do a job like he did on budget day. He talks about me standing up here on a personal smear. I have never seen such rubbish emanating from the mouth of a Minister. And he's talking about a personal smear!

Mr. Chairman, I'm not blaming him as a businessman for asking for more; I'm just saying that it's not consistent with this terrible, terrible preoccupation now with restraint. And most of that restraint is directed at the former government — isn't that funny? It's not directed at this new government that is raising taxes, raising medicare rates, raising hospital per diem rates and doing it with gay abandon.

Interjection.

MR. COCKE: He wants a reason. I'll give you the reason. I'll give you the reason, Mr. Member for Coquitlam (Mr. Kerster). I'll give you the reason: because they want to put the fire to the people in this province now, and then two or three years from now after building up a big heavy reserve....

Interjection.

MR. COCKE: You could even buy your shoe polish out of it...after building up a huge reserve, giving the people favours, passing out the candies before the next election. Mr. Chairman, that's dishonest government.

MR. CHAIRMAN: Now to vote 61, please.

MR. COCKE: Mr. Chairman, I'm not going to continue with this letter if the minister feels that it's a smear. But the fact of the matter is that I'm just suggesting an inconsistency here.

Interjections.

MR. KING: If you can't stand the heat, get out of the kitchen.

MR. STUPICH: Mr. Chairman, with respect to the estimated revenue for the province — I did ask the minister earlier, looking at the figures for, for example, coal, minerals and metals royalties — the fact that the.... Unfortunately, we can't tell from this as we don't have a breakdown.

But I'm wondering whether, in view of the forecast and optimistic statements in the budget speech about the increase in coal production, and when I see the figure of $12.9 million was estimated last year.... I know that may not be the revised estimate, but I don't have the revised one, and the figure this year is some $400,000 less. Does this tell us that the royalty for coal is expected to change, or that the royalty from minerals...?

I'm not asking right now for government policy; I'm asking how this figure of $12.5 million is arrived at. Did we anticipate some changes in royalties in either coal or minerals? I'm wondering whether the figure for the B.C. Petroleum Corp. last year, $150 million, is included in these petroleum and natural gas royalties, licences and fees — $230 million last year; this year $275 million. If so, how much of that is expected to come from BCPC?

Interjection.

MR. STUPICH: Okay. It's on the estimated revenue, and I'm looking straight at the estimates book under minerals, code 53-330. We see $12.9 million last year from coal, minerals and metals royalties. For the year of March 31, 1977, the figure is now under $12.5 million. What I'm wondering is whether or not this forecasts any change, for example, in coal royalties. Coal royalties under the previous administration changed so that the average rate, instead of being something like 14 cents a ton, went up to $1.50 or $2 a ton. That's $1.50 under our administration, and we did say that it was going up again.

The fact that there's no growth — as a matter of fact, there's a slight decrease in this figure — leads me

[ Page 1140 ]

to ask whether, in arriving at this figure of $12.5 million, the minister took into account the optimistic statements in the budget speech about coal production and new coal fields being opened up — certainly the expectation in the industry that coal production will increase. Now the fact that this figure doesn't increase means either the estimate for last year was too high, or' that the royalty is going to change, or it may mean that the royalties on metals is going to change.

I say again, Mr. Chairman, that I am not asking in advance for government policy, but simply asking what was the basis on changing this downwards by $400,000. Further, I did ask about the BCPC revenue. The figure immediately below that, $230 million last year and $275 million this year: is the BCPC money included in that code?

HON. MR. WOLFE: Mr. Chairman, in reply to one of the questions — I don't know if I have the answers to both questions — the coal mineral royalties estimate of a year ago was high by almost $2 million. All I can say is that the estimate for the upcoming year is higher than what we will have obtained for the completion of the current year — at least to the year ended March 31, 1976.

I'm just not clear on your other question, Mr. Member, regarding the petroleum corporation.

MR. STUPICH: I'll ask the petroleum question first then: where is the BCPC revenue in estimated revenue? Is it in that code immediately below? Well, then, how much of the $275 million forecast for 1977 is BCPC revenue?

HON. MR. WOLFE: Well, Mr. Chairman, I will have to get you the answer for that.

MR. STUPICH: I would like to pursue this question of the coal revenue just a little more. The information that I did get in the short time that I was Minister of Finance was that the revenue for the calendar year 1975, as I recall it — or it could have been for the fiscal year 1975-76 — was expected to be $10.3 million from coal alone. Now the minister has said that the estimate last year for coal, minerals and metals royalties, $12.9 million, was approximately $2 million high, which means the figure should have been $10.9 million, which means the royalty revenue from everything other than coal would only be $600,000. Now I find that rather strange. I certainly expected that the mineral royalty was going to bring in more than $600,000. It could be that the information that I recall was optimistic, but it was one that I did receive from the department.

Again, I can only think that if the coal revenue was last year in excess of $ 10 million, the total for this year of $12.5 million, which does include mineral royalties, means either that there will be no changes in coal royalties or that coal royalties will be down, since we are expecting an increase in production, or that mineral royalties are going to be abandoned and this figure of $12.5 million represents only what is expected from coal, or that the figure is lower than the minister really expects will be derived from this source.

I guess we will just have to finish on my note that this figure is really lower than the minister expects from this source, or that government is anticipating changes in royalty policy, particularly with respect to coal since that's obviously the large contributor in this area.

Now I would hope that it's not the case. I would hope that what the minister is really telling us by his silence in this instance is that he is artificially keeping that figure low rather than telling us he is going to change the coal royalty downwards. If anything, Mr. Chairman, it should go up. I did try to make this point earlier.

I understand now that BCPC revenue is in this code 53-331. I did ask the minister if he can tell us how much of this amount is BCPC revenue. I was hoping he would answer that question.

MR. MACDONALD: Mr. Chairman, I hope the minister has made notes of the other question, because I am changing the subject slightly.

The minister made a trip to Ottawa in the month of December, shortly after being sworn in, and I am sure that's a memorable thing that sticks in his memory. He met there with some officials of the federal government in terms of the anti-inflation guidelines. Now since that time, no doubt the minister — who is the principal member of the executive council engaged in the fight against inflation, I would think, apart from the Premier and the Minister of Consumer Services (Hon. Mr. Mair) — has, no doubt, been in touch with the federal government, the Hon. Donald Macdonald and the Anti-Inflation Board on a pretty consistent basis. My question to the minister is whether or not he has had any communication with the federal government about: the raise in the rates of ICBC, which were 200 or 300 per cent; in terms of the rise in the rates of sales tax, which was 40 per cent; Hydro was 12 per cent; per diem hospitalization,400 per cent; medicare....

Interjection.

MR. MACDONALD: Thumper Macdonald is no relative of mine. (Laughter.) And I want you to know that the guys who spell it "Mc" are the illegitimate children — and I have no hesitation in saying that — through history of the "Macs". So I am not defending that minister.

[ Page 1141 ]

I am asking whether this government has had any talks about the impact on the cost of living that has been brought about by the governmental increases that have happened in the last couple of months. Have there been any representations at all, or discussions, about the effect of those increases on the cost of living in the province of British Columbia?

HON. MR. WOLFE: Mr. Chairman, as the member is aware, there is a bill before the House dealing with this whole matter of our authority to...the Anti-Inflation Measures Act, which gives approval for, or at least authority for, our advancing into an agreement with the federal government covering their inflation programme. Generally speaking, we have not been in touch with them on these other matters.

MR. MACDONALD: I'm talking about the period where there was no attempt by the Province of British Columbia to introduce any kind of controls as to prices in the public sector or the governmental sector. Now in that period prior to any effect the bill might have for the future....

Interjection.

MR. MACDONALD: Were there no representations or discussions at all about...? Because what you've done, Mr. Minister, is that through governmental measures you've increased the cost of living in this province 1 to 1.5 per cent more than the rest of Canada. So were there no discussions or representations, or did you not explain this to the Anti-Inflation Board?

MR. LEA: Mr. Chairman, earlier, in discussing an earlier bill, I asked the Minister of Finance if he could present some names to the House of economists who put forward the idea that the sales tax was a fair and equitable tax. He said he could do that, and I've no reason to doubt the minister can do that. Out of curiosity alone I'd like to see how an economist could come to the conclusion that a sales tax on retail goods can be a fair and equitable tax between the rich and between the poor.

MR. GIBSON: Genghis Khan!

MR. LEA: Genghis Khan maybe, as the Liberal member points out.

But I would be interested in seeing a different kind of economic philosophy as to how the retail sales tax can be interpreted as a fair and equitable tax. I would like to ask the minister if he couldn't bring that in today and slip it to me in the hall or something.

Regardless of that, Mr. Chairman, I wonder if the minister could explain to the House, because he's the minister in charge of collecting that tax, in his terms, in his English, as to how he figures that that social services tax, as it is called, is a fair and equitable tax. Now it's obvious that we, as human beings living within the province, only need a certain amount of essentials and after that it's almost surplus and a luxury to have more than other people. So I wonder if the minister could explain to the House, why he feels that the.... Obviously he's read the economists who explain why the retail sales tax is fair and equitable. Whether he would explain to the House, either in his terms or quoting from those economists....

HON. MR. WOLFE: I'll get it for you.

MR. LEA: The minister says he'll get it for me, and I really appreciate that, Mr. Minister. But even before you get it will you explain in your terms how you feel it's fair and equitable?

HON. MR. WOLFE: I'll get the formulas.

MR. LEA: No, I mean surely that's fairly fresh in your memory. But I just don't know how it is fair and equitable. But forget the economists. I know you are going to get that for me.

Interjection.

MR. LEA: Oh yes, I'd like to get that, but right now I'd like to hear from you, Mr. Minister, through you, Mr. Chairman, on why you feel it is fair and equitable.

Interjection.

MR. LEA: Oh, I'll read those too, if you get the formulas. I'd like to read those after I hear your views.

HON. MR. WOLFE: Well, I'll get them for you.

MR. LEA: That will give me another one. That will give me five views, but I would like to hear yours. I wonder if we could have that, Mr. Chairman, now.

HON. MR. WOLFE: Okay, I'll get them.

MR. LEA: No, Mr. Chairman, I feel that the minister is misunderstanding me. I want him to explain in his own words and in his own thoughts why he feels it is a fair and equitable tax, because he said it is. And then after, just to prove it, I want him to give me the books, so I can see where he got his ideas. I'd like to read the books.

HON. MR. WOLFE: I think you'd better get a little air.

[ Page 1142 ]

MR. LEA: Oh, I don't need any air. What I want is some information, and so far all we've been getting is air instead of information. But I would like some information. I think that this isn't a joking matter, that the minister has stated in this House that the retail sales tax is a fair and equitable tax.

HON. MR. WOLFE: I said it was not regressive.

MR. LEA: Well, he said it isn't regressive. Could he explain also then one other thing? What's the difference between being unfair and inequitable and regressive? I want to hear all those things. To me that man's a fountain of knowledge, and I really want to hear, and I'll write them down.

AN HON. MEMBER: Get your dictionary.

MR. LEA: The member for Omineca said get me a dictionary. Believe me, I have one in my desk and it uses words like it and that, the — those big ones. I'll write them down and look them up later, but I just want to hear it in the minister's own words.

MR. WALLACE: I want to ask just a few questions on different issues, Mr. Chairman. The minister has acknowledged by a statement recently that he's deeply concerned about the proposed unilateral action of the federal government in regard to the various financial programmes covered by the Fiscal Arrangements Act. Before I just specifically ask the minister a few questions about that, I wonder if he could answer a couple of questions from the Clarkson Gordon report on page 17, which relate to hospital insurance income from Ottawa and Canada Assistance Plan income.

I don't want to confuse the issue. I am talking about rules and regulations which pertain today or pertained in the fiscal year 1975-76 at a time when hospital costs were soaring, when we were in a recession, and the Canada Assistance Plan, if anything, should have been providing increasing amounts of money for this province. Yet the Clarkson Gordon report shows that hospital insurance cost-sharing was $55 less than had been anticipated.

Now that can only mean one of two things. It either means that the federal government was not paying the share that we had calculated as a government, either unilaterally or because the ground.rules had been changed, or somehow or other we are not being given the precise figures for the cost of hospitalization in British Columbia.

MR. GIBSON: Or the forecast was wrong.

MR. WALLACE: Another possibility, I suppose, is that the forecast was wrong. But $55 million out of $255 million is a very large margin of error. As far as hospitalization is concerned, the cost-sharing arrangement, as the minister probably knows, relates only to acute- and extended-care hospitals, by and large. The cost-sharing formula is close to 50 per cent. So I would find it difficult — and I do find it difficult — to understand how the figures are out by $55 million.

As far as the Canada Assistance Plan is concerned, it was out by $27 million. Now this would seem to me to be a very substantial margin of error adding up, in this case, to $82 million in one fiscal year. So whether I ask a series of questions, Mr. Chairman, and ask him to answer them all, or whether you want me to pop up and down, I am quite willing to do either. But I have a few questions in addition to those I've asked.

HON. MR. WOLFE: I'm sorry, Mr. Member, I don't have the same copy of the report in front of me. It has different page numbers. You referred to the Clarkson Gordon report. I'll have to get the same copy you have.

MR. WALLACE: Yes, well, Mr. Chairman....

HON. MR. WOLFE: What's the page number?

MR. WALLACE: It's preceded by the Premier's address. It's page 17: appendix 1, continued. It's the Province of British Columbia general fund revenue forecast, year ending March 31, 1976. It's the second part of that under the title of: "Other Governments' Joint-Service Programmes." Then it outlines the federal government's hospital insurance, Canada Assistance Plan, medicare and other. I can go on to other items, Mr. Chairman, but it is important that we establish why that amount fell short by $82 million. That isn't peanuts. Since I want to ask some questions about where we are at in federal-provincial financial arrangements that are pending — very serious ones — I think it would be important to differentiate this first question I asked in relation to the 1975-76 year.

But the minister had stated in the House a couple of weeks ago that when the federal government changed the Income Tax Act in 1972 they made a commitment that by these changes provinces would be compensated to the degree that the provinces lost income as a result of the federal tax changes. All provincial Premiers and Ministers of Finance, judging by the news reports, are stunned to discover that the federal government plans, apparently in a unilateral way, just simply to terminate these payments.

I wonder if the minister could tell us first of all what has been the total sum of these payments that British Columbia has received since 1972. I know the minister quoted a figure of $14 million which would be applied retroactively for the year 1974, but I

[ Page 1143 ]

wonder what sum of money he had calculated would be forthcoming in 1976-77, which presumably now will not be forthcoming.

If you look at the Clarkson Gordon report in detail, it's a very important fact that in the fiscal year ending March 31, 1976, that sum of money from other government programmes adds up to $558.5 million. That again is a very substantial part of the total provincial budget. Now it obviously fell short in the two specifics I have outlined, but what is even more important, and what concerns me more, is: what are we facing in the future and to what degree was the likely federal proposal included or not included in the minister's calculations when he tried to calculate government revenue for 1976-77? That's why I'm wondering what these compensation payments amounted to on an average and what the minister was anticipating in the year 1976-77, which presumably will not now be forthcoming.

In this whole area of federal-provincial relations, one of the other moves made by the federal government, again in a unilateral way, was to make mineral royalties no longer tax deductible, while the provincial government, to some degree, reimbursed the companies.

Nevertheless, this was another example of where the federal government moved the goal posts and it cost the province money. We're running into more and more areas of federal-provincial cost-sharing programmes that seem to have that result. Again that leaves us with two conclusions. Either British Columbia, in a docile way, just has to decide to change its own tax structure to make up for the, revenue it will no longer receive from the federal government, or we raise some very substantial ruckus at the federal-provincial level.

This is one reason why I express strong reservations about all this rather pontifical approach to patriating the constitution. We are being asked, as loyal Canadians, to get all excited about patriating the constitution and building a stronger confederation. I could go on in all these glowing terms, but until we, as taxpayers, can be reasonably assured that we're getting a fair break financially in so-called federal-provincial relations....

When you have a relationship with another party, it isn't up to just one party to move the goal posts when it chooses to do so. The curt and rather abrupt way, apparently, in which the federal minister notified the provinces I think is a very undesirable way to act in such an important area of federal and provincial financing. I am quoting a great deal from news reports and if the minister had been informed much sooner, privately, then I would have to modify my criticism.

But on the other hand, the next obvious question is that.... I believe Premier Schreyer requested the federal government to make this issue the primary item on the agenda of the ministers' conference in June. So I'd like to ask the minister if, at this point in time, with all these uncertainties...what is the government's basic position, or what will its basic position be to the federal government in this whole issue of review of cost-sharing programmes as covered by the Fiscal Arrangement Act? I gather that it is a five-year Act, which expires in 1977, and presumably between now and then we, hopefully as provinces, renegotiate mutually acceptable terms.

I'm left wondering whether in fact the federal government has just taken this rather rigid position as its initial salvo in the battle to try and reduce the federal share in the formula or whether, in fact, the federal government feels sufficiently strapped for revenue and has enough of a tax problem that it has decided to take this rather rigid position. In other words, would the minister tell us if he believes that this is negotiable or that the federal government's actions in a unilateral way to this point in time symbolize the way the federal government plans to act between now and 1977?

HON. MR. WOLFE: Mr. Chairman, if I could just deal with the last question. The member has asked with regard to the revenue guarantee — he raised certain alternatives — but as to whether my impression of what has happened, as unilateral as he says it is, is that they're in sort of drastic attempts to restrict their expenditures.... They're looking to the provinces as an avenue to save these expenditures, to try to cut down on their exposure.

The revenue guarantee, I'm given to understand, which was based on guaranteeing the provinces the same return as existed under the former Income Tax Act as would be generated from the new tax Act coming in in 1972 — that was the purpose of it — initially used a formula, which I could not describe to you, which turned out to be more lucrative to the provinces than they had anticipated.

Meantime the Province of Ontario was making recommendations that what's known as a macro approach be adopted, using personal incomes, et cetera, to project what the income should have been to the province under the revenue guarantee. So I believe that the federal government, in consternation, having arrived at the fact that the guarantees to the provinces were costing more than they anticipated, have reverted to the formula as actually indicated by the province of Ontario somewhere along the piece.

That's just a general impression I have, but it is being introduced all of a sudden at the expense of the province's projected revenues, and I might say we did not learn this until very recently. I think you mentioned the figure of $14 million in the upcoming year's operation which would be the adjustment for 1974, I believe, and we do not currently have this within our estimates, in the terms of revenue.

[ Page 1144 ]

1 think you also asked about the shared cost under the hospital insurance.... I might say that a year ago the revenue from the cost-sharing under the hospital service was overestimated, as it was with many other items, so the final figure which was arrived at was much less. The upcoming year's estimate for this shared-cost programme is $651 million. The original estimate for last year was $643 million. The final projected figure was considerably less than that.

So, to sum it up, the original hospital-sharing programme revenue item was overestimated. I might say in answer to a previous question regarding the amount of revenue due to the petroleum corporation under vote 53-331, it is $195 million.

MR. WALLACE: Mr. Chairman, I presume also then that the minister states that the Canada Assistance Plan figure was also overestimated, similar to the hospital insurance contribution from the federal government. If not, he can correct that later.

Earlier on this afternoon there was some discussion about who was responsible for Hydro. I don't wish to try and argue responsibility, but I do want to ask a financial question which I think is intimately related to this minister's responsibility. Again, it's from the Clarkson Gordon report. I think it's best if I just quote the paragraph, Mr. Chairman. It's on page 29 of appendix 3:

"An actuarial survey of the employees' pension plan indicated a deficit in the plan of $41 million at December 31,1974, and conditions which caused the deficit, together with subsequent changes in the plan, will result in an additional deficit, the amount of which has not been determined."

Now, Mr. Chairman, I find this whole question of pension plans very puzzling at times. There may be a very legitimate reason for this problem in the B.C. Hydro plan. I know, for example, that the workers' compensation system is having problems with adequate financial reserves since pensions and disability allowances have been indexed to increases in the cost of living without, at the same time, having increased contributions at the front end. There may be a similar kind of explanation on the B.C. Hydro pension fund, but there was a $41 million deficit a year and a half ago which is expected to get a great deal worse. I wonder, first of all, why there is this deficit. Secondly, what is the minister's direct responsibility in supervising the B.C. Hydro employees' pension fund?

Mr. Veitch in the chair.

HON. MR. WOLFE: Greetings, Mr. Chairman. I might say, Mr. Member, you refer to the indicated problem in the B.C. Hydro pension plan, and it's fair to say that this same actuarial, you might say, deficiency is a growing problem in all pension plans in Canada, being expressed right across Canada by Finance ministers and others. The Finance minister of Ontario released a considerable document on this just a month ago.

You refer to the Hydro pension plan. I also might refer to the provincial government superannuation plan and the comments in the Clarkson Gordon report regarding the workers' compensation and the comments there regarding the actuarial sufficiency in the plan. The only thing I can give you in answer to this at the moment is that we've asked for a report on these matters from the superannuation commission of the government which we are waiting for now.

MR. WALLACE: Well, the point I'm trying to make, Mr. Chairman, is that it's all very well to say that everybody's having that problem. It's like a whole bunch of people falling into the water and none of them can swim. It doesn't really help one guy to know that the others are going to drown as well. I'm just a layman, but again it sort of relates to this kind of debate we've had about whether or not a government can issue cheques without cash in the bank and the individual can't do it. It's the same with some of these pension funds.

I would like to know what steps the government is taking, within the limitations or the difficulties of inflation, at least not to mislead the contributor to a pension plan. If I were an employee of B.C. Hydro, perhaps age 55, who has a few years to go and is looking forward to a pension, I'd be very disturbed to read the Clarkson Gordon report.

I could go a step further. Again, it sort of relates to the federal-provincial financial arrangements that the Canada Pension Plan, from which provincial governments borrow money at a very favourable rate of interest.... In fact, I have a report here on my desk somewhere that states that the Canada Pension — also mentioned in Maclean's Magazine, as a matter of fact, on April 5 — that that money is loaned to the provincial governments at a lower rate of interest than you and I, as individuals, could earn by putting our money in Canada Savings Bonds.

Anyway, I don't want to get into a long hassle about the Canada Pension Plan, but the fact is that next year the Canada Pension Plan will have been in existence just long enough that the payments in pensions will equal the money coming into the plan. In fact, in the following year there'll be a $200 million deficit, I understand, and in the following year a $400 million deficit, assuming that the federal government leaves the rate at 3.6 per cent of earnings.

The point I'm making is that provincial governments have borrowed money from Canada Pension Plan funds. Presumably within a year or two that source of borrowing is going to dry up, since the money will all be needed to pay the pension, and I

[ Page 1145 ]

wonder if the minister has any comment to make in that regard in planning this year. For example, I heard him mention earlier in debate this afternoon that the government might have to borrow more money this year.

Without reflecting on a bill, Mr. Chairman, the House has given authority for further borrowing. Could the minister tell us if any of that borrowing was planned to be derived from Canada Pension Plan funds? Perhaps even more importantly, at what point are we at this year in the amounts that we have borrowed? How much money have we borrowed from that source?

HON. MR. WOLFE: Mr. Chairman, I could get those figures — they're in the back section of the budget speech. You'll find the distribution between internal funds borrowed and external funds, and so on. I can get that for you in a minute.

MR. WALLACE: What was the interest rate?

HON. MR. WOLFE: I think that's indicated in the same schedule right towards the back of the budget speech.

This is, as I mentioned, a problem we are concerned about, having to do primarily with inflation and the tendency to increase the benefits in pension plans over a period of years to more or less terminal funding. If you arrive at the point where you are going to pay benefits on the basis of terminal earnings on an escalating salary, the way they escalate today, it's obvious that pension plans are not going to be able to cope with this. We have a situation to look at here, and we hesitate to deal with it until we have full information.

MR. WALLACE: On a more general note, I would recall for the House that the Premier, in presenting the Clarkson Gordon report, made the statement that, 'more and more revenues are coming from taxes collected from people." That's a direct quote. While the former government certainly made its mistakes, one of which was its handling of ICBC, the figures show that during the tenure of the former government — and I'm quoting from a survey done by Neale Adams in the Vancouver Sun on March 15 of this year — between the 1971-72 fiscal year and the 1975-76 fiscal year the percentage increase in revenue from natural gas and mineral royalties was 466. So it would seem quite clear that the former government was indeed trying to raise a greater percentage of total revenue from resources and less from people.

This seems to me to be a very sound philosophy. Yet so far in this session, and certainly in the budget, there has been very little, if anything, put forward by the Minister of Finance to outline how this government plans to stimulate natural resource base industries in order to get these dollars out of the resources rather than getting them from people with the kind of sales tax which we've all objected to.

I wonder at this point if the minister can give us some idea what options were considered in determining how the budgetary changes would be applied prior to this budget being brought down. I suppose it would be breaking the rules of the House, perhaps, to ask what the policy will be in regard to mineral royalties, but mineral royalties were such an essential element in the election battle of last year, and we've heard numerous statements outside the House by the minister concerned that there will be legislation, but the fact is that the budget, as we see it today, offers very little that I can determine to boost the forest industry or the mining industry. I think we're entitled to ask, because of the stress that was laid on mineral royalties in the election campaign, what if any options were considered by the minister in the budget preparation.

In the same theme, Mr. Chairman, I wonder if I could ask if the government has abandoned its commitment to abolish succession duties. This was another fairly central theme — succession duties and mineral royalties, which together add up to about $50 million in revenues. There is no mention of either of these elements in the minister's budget.

We also on this side of the House, perhaps not with good grace, have accepted a 10 per cent reduction in our salaries and allowances, Mr. Chairman. I make this remark with no personal intent towards the particular deputy minister who happens to be in the House, but I notice that within three years the salaries of deputy ministers went from $25,000 to $45,000. The Premier had also stated when we discussed salary reductions that senior personnel and some departmental assistants to ministers would perhaps also have their salaries reduced. I wonder if the minister could tell us just who else besides the MLAs and the ministers will be having a reduction in their salaries.

I already asked in question period about the salaries of senior officials in the Crown corporations, and at that time I was assured that there had been no voluntary approach by senior executives in B.C. Hydro, — nor had the minister responsible made any approach on the matter. I feel that if it seems reasonable that we as legislators should have a 10 per cent cut, I can think of many other highly paid persons in our society.

After all, it's very popular to nibble away at the income of highly paid people — ourselves included — but I just think it should be kind of fair and equitable, maybe across the board. I really don't see why there should be such high salaries paid to various other strata of government-employed personnel and why we as MLAs should be singled out for a 10 per cent cut. I wonder if the minister would care to

[ Page 1146 ]

comment on that.

HON. MR. WOLFE: Mr. Chairman, as the member is aware, the cut in members' salaries and ministers' salaries was done as a gesture regarding inflation and as a demonstration to everyone concerned as to what we wanted to show the people of this province we were prepared to do, and I think this is important.

You ask who else was included in these cuts. I think the answer to that question is certain executive assistants in the ministers' offices — I don't think it included all of them. In any event, there are certain executive assistants whose salaries were cut, as well as other allowances paid to the Speaker, Deputy Speaker, et cetera.

I might say with regard to your comments about senior deputy ministers that their salaries were raised over a year ago and have been frozen since that time. They were not increased in the upcoming year's budget, so in effect their salaries are frozen for almost a period of two years.

MR. WALLACE: One other question I think is worth asking, since the government has committed itself to quarterly financial statements. Some time ago the president of the Chartered Accountants Institute of British Columbia, Mr. Gray, made the statement that he felt there should be the same standards of financial reporting for companies either owned or controlled by the provincial government. In fact, I understand that the president of the chartered accountants' association was in contact with the Finance minister in January and made that suggestion. He felt that both interim and year-end statements should be available to the public free of charge since public money is involved when the government purchases part or total control of the company. I wonder if the minister has taken steps to ensure that.

To give the committee an example, Mr. Chairman, there were conflicting figures produced as to whether or not the Princess Marguerite made a profit of a few thousand dollars or a loss of quite a lot of thousands of dollars, and I presume that if we had interim financial statements available publicly this kind of confusion would be corrected and the public would have a much better awareness.

There are just two other points that I think are worth asking the minister, who is responsible, for example, for the Purchasing Commission. I understand that just in the last year to year and a half, the total amount of government expenditure on computers has approached $36.5 million. Apparently these computers for the different departments of government have not been bought after submitting the offer to tender. Again, I'm not picking on the particular company that was lucky enough to get all the business, but my information is that IBM has been supplying all the computers to government departments.

For example, Mr. Chairman, B.C. Hydro installed a $3.5 million IBM computer without calling tender and the Workers' Compensation Board has as a $ 1.5 million IBM unit, and apparently other departments including Simon Fraser University and the B.C. Institute of Technology and others which I won't take up the time of the committee to list. I wonder if the minister is aware of this and whether he feels that the Purchasing Commission really has no reason to exist unless it starts off from the first step of ensuring that the government buys the best equipment in competition from all the retailers in the market place.

The last point that I would like to raise with the minister is one which he was kind enough to answer in a letter regarding the handicapped and the 12-cent deduction from the taxation on each gallon of gas. I'll refresh the minister's memory. He wrote back to me on this issue on January 30. It relates, Mr. Chairman, to the fact that in order to qualify under section 1 I of the gasoline tax Act for the 12-cent refund a person must either be an amputee or permanently confined to a wheelchair or in receipt of 100 per cent disability pension through active service in any war.

The case I raised with the minister did not qualify, but it seemed to me that these are rather strenuous qualifications which at one time might have been reasonable, but I wonder if the minister is aware of the increased mobility of our society and the cost of transportation and the inflationary factors which are much more likely to penalize an amputee or somebody confined to a wheelchair or somebody in receipt of 100 per cent pension.

Did the minister give consideration, or, perhaps more appropriately, will he now give consideration either to relaxing these restrictions because some people are in a wheelchair a large part of the time, but not entirely, and other people don't have.... This gentleman I wrote to the minister about has an 80 per cent pension. He's been driving some 40 or more years without a single accident. It seemed to me that here's the kind of case that would really merit the 12-cent refund out of each gallon of gas.

The last point that I might ask the minister: has he thought at any time of increasing the amount of the refund — that's 12 cents — at a time when the total tax was 17 cents? Would it not also seem reasonable that these groups who were handicapped could do with a little more favourable consideration as to the amount of the refund?

HON. MR. WOLFE: Mr. Chairman, with regard to the last point on handicapped and the gas tax, I recall the letter and I'm not unsympathetic to the problem, and if I could just cite the regulation governing the gasoline tax refund which reads as follows, covering rebates:

[ Page 1147 ]

"For the operation of a motor vehicle on public highways by any person who has suffered the loss of a limb, or who is permanently confined to a wheelchair, or who is in receipt of a 100 per cent disability pension through active service in any war while in Her Majesty's service."

As you mentioned, the problem here, I presume, is that the individual is not 100 per cent disabled and yet is confined to a wheelchair. This has been a regulation which has probably been ruled on by many others, but I'm not unsympathetic to it and certainly, could have that matter reviewed.

You mentioned Mr. Gray and the CA's report. We had a meeting with them to consider their report and I agree personally with many of the things recommended in it. We have delayed implementing to some extent the measures in there because the comptroller-general has been very ill. Mr. Minty, as some members may not be aware, has had a heart condition and has been confined to home for the last three months. We wanted him to participate in these recommendations. In any event, as I say, I basically agree with most of what's in there.

You mentioned Crown corporations and we would like to consider that they could also be providing quarterly information, but we have to really find out whether this is also practical.

You mentioned the Purchasing Commission and tendering on computers. I think it's inherent in the complications of computers that it is a difficult matter to tender on, and I might say that we've given considerable amount of review to the problem of various computer installations, which are growing and changing rapidly, and how they relate from one department to the other. For instance, you mentioned something about how we've recently bought computers in the amount of $36 million. I don't know where you got that figure, but the biggest installation is the new Honeywell installation in the Transport and Communications department which arrived some time ago now, and it's on a lease. Most of these pieces of equipment are on lease. I believe the lease for this piece of equipment is something over $ 100,000 per month.

We are concerned with the relationship between the computers in various departments and what appears to be considerable duplication, and we have retained a consultant — which is now at the beginning stage — to get a report on this. I might say that he will be looking at Crown corporation installations as well as those within government, and he is currently interviewing all the personnel involved. The purchasing commission, with regard to this, does not get involved in Crown corporations. Crown corporations have their own purchasing facilities, and therefore our purchasing commission here does not involve itself in Crown corporations.

MR. WALLACE: Just one final point, Mr. Chairman, regarding the refund of gasoline tax. It may not be a figure that the minister has available this moment, but there are many people in the province who would like to pursue this issue and have the minister review it. I wonder if he could tell us, or find out for us, what actual total sum of money is refunded in the course of one fiscal year. I would very much appreciate knowing what kind of money we are talking about. If the restrictions are to be relaxed, we will at least know what basic cost to the government we start with and whether it would be doubled or tripled or whatever. I don't expect the minister has that readily available.

HON. MR. WOLFE: Mr. Chairman, no, I don't have that information, but we can get it.

I would just like to ask a question of that member — and I think I am equally sympathetic to the problem: where would he draw the line? If a person is disabled, to what extent would they need to be? You would have to arrive at some conclusion as to when a person was or wasn't eligible.

MR. WALLACE: Mr. Chairman, this give and take in committee is very interesting when we can ask each other questions. I agree, since medical evidence and medical judgments would enter into it, that the present regulations are nice and finite and clear-cut. A person obviously is either minus a limb or not minus a limb, and someone has adjudged him 100 per cent disabled and nothing less. But I do feel that while it would not be easy, we could, perhaps, set a lesser level of disability — now whether that is 75 per cent or 50 per cent, I don't know.

But mobility to a person who uses a wheelchair, or to a person who has a limb missing, is such a very important handicap to them in earning their livelihood. Therefore while I can pay for a gallon of gas without too much trouble, it is just that much more difficult for somebody with, perhaps, a 50 per cent disability in an injured limb. So I agree that it isn't easy when you start relaxing these restrictions to just have the same degree of control, but I do feel that there is a deserving group of people out there who would be very happy to know that the minister is reviewing the regulations.

MS. SANFORD: Mr. Chairman, I asked two questions previously and I would just like to remind the minister that he neglected to answer them at that time. I am wondering if he might consider doing so now.

As I indicated earlier, we had some information from the previous Minister of Finance — and this is some two years ago — about how any surplus that might accrue in any given year would be spent. He indicated quite clearly to the House that if there was

[ Page 1148 ]

a surplus the government was, in fact, prepared to spend it in given ways. I am wondering if the Minister of Finance could indicate to the House, if in fact there is a surplus and it becomes obvious perhaps in July or August or whatever, what areas or which departments would receive any additional funding that might accrue, or if in fact the government has considered that possibility at all.

The second question was a direct question as to whether or not the minister had himself authorized the change in the budget — that is, the halting of the printing at the Queen's Printer, with the changes taking out the references to the other countries.

HON. MR. WOLFE: Mr. Chairman, the member asked the question that if a surplus developed during the year, what would be our decision and which department wp would favour. I would not be expecting to make that decision myself. The government would make a decision at the time to put the additional revenues or, you might say, surplus which was indicated, wherever it was most needed.

MS. SANFORD: I realize that they would make decisions in concert, but I know that when the budget was discussed — as I say, some two years ago — the government at that time had made up its mind, had taken some preliminary discussions on this, and we were informed in the House as to how those surplus revenues might be spent. But you have not done that to date.

MR. STUPICH: Mr. Chairman, I just want to pursue a little farther this business of the $400 million versus the $250 million. Now that we have agreed that the deficit, instead of being the $400 million talked about in Bill 3, was actually only well, I shouldn't say only — was actually $250 million on March 31 rather than the $400 million talked about on the bill, I am wondering about certain items and as to whether or not these were included. For example, we know what the grant to ICBC was, of course, but there was a grant proposed to the transit bureau — $26 million.

I don't really expect the minister to be able to tell us what date that cheque cleared the bank, but was this $26 million paid over by March 31,1976? In other words, was it included in the total deficit of $250 million? Was the grant to B.C. Hydro, in the amount of $32.6 million, actually paid over by March 31, 1976?

It may be that you would want to defer this until we get into further discussion of Bill 5, but I'm wondering also about B.C. Railway. Certainly I'll accept your joint advice as to whether I should leave this for now. But we have earlier discussed grants to B.C. Railway that were recorded by B.C. Railway as amounts that were going to be repaid. We discussed it generally during earlier debates; I don't think we've discussed it in the debate on Bill 5 yet — although I am prepared to leave this until committee stage on that bill, if you prefer.

But I have copies of the minutes of the board of directors meeting, dated January 9, 1975, where the directors of B.C. Hydro report the receipt of $15 million, such grant to be repaid to the province prior to March 31, 1975; also the minutes of a meeting dated March 19, 1975, when they report this grant of $15 million, rather than be repaid prior to March 31, would now be repaid not later than June 30 ,1975; and minutes of a meeting dated June 2, where there is further reference to the payment of this amount of money, and in this case the date is removed entirely. They're talking about a further grant of $20 million that was also going to be repaid. I'm wondering whether or not it is still the intention of the government that this total of $35 million be repaid to the government, and whether it's expected that this will come in this fiscal period?

I note that the borrowing authority that is being increased with Bill 5 is much more than is needed to carry on B.C. Railway in this period. Clarkson, Gordon tell us that there is still $23 million borrowing authority available to the railroad, that they will need an additional $60 million to cover it for the balance of the calendar year. So it would appear that the proposed increase in borrowing authority will be more than adequate to repay to the government the $35 million that was recorded by the directors of BCR as a grant that was going to be repaid to the government. The question is whether or not the government intends to recover that in this period.

There still is a bill before us — although it seems to be sitting — that would guarantee borrowing on behalf of B.C. Harbours Board, and which would enable B.C. Harbours Board to repay to the government some $25 million that it owes. Is it the intention of the government to have B.C. Harbours Board borrow that money and repay it to the government at this time? A number of detailed questions, Mr. Chairman.

HON. MR. WOLFE: Mr. Chairman, the member for Nanaimo comes back over various questions he delights in asking, which we did under Bill 3 and other matters raised earlier.

In any event, I wish to clarify the fact that because an order-in-council is obtained to allow authority to borrow $250 million in treasury notes, it does not have a direct relationship on the deficit indicated by the Clarkson Gordon report. One has to add into this total consideration outstanding cheques which any one day can vary from $50 million to $125 million, $150 million. It is a very difficult figure to anticipate, and I'm sure the member appreciates that.

[ Page 1149 ]

He asked the question whether the payment to ICBC has been paid — $181 million. The answer is yes. Whether the grant to Hydro of $32.6 million has been paid. The answer is yes. Of course, he comes back to the matter of the B.C. Railway grant of $35 million. He's read the B.C. Railway annual report, and it's shown in there as a grant received. As I once again indicate, the order-in-council, which is a legal document covering this, clearly states that this was nothing more nor less than a straight grant to B.C. Railway. We're going by the legal indication of the order-in-council. You asked the question whether this grant will be returned to revenue this year in the province: the answer is no.

MR. LEA: Mr. Chairman, a number of members have asked, and have received no answer, in regard to the second-edition printing of the budget speech. The member for Comox (Ms. Sanford) asked that, and received no answer. As I recall....

HON. MR. WOLFE: I gave an answer.

MR. CHAIRMAN: Hon. Member, I believe that's been well canvassed, hasn't it?

MR. LEA: No, I'm going to throw in a new item, Mr. Chairman, and go back over what happened from the beginning.

What happened is that all of a sudden we have a new budget — an edited budget. At that time the Minister of Finance said that he wasn't aware that there had been a printing of an abridged version of the budget speech. Then when he did become aware that in fact it had happened, he said that it was a government decision. I'm willing to accept that; it was a government decision.

[Mr. Schroeder in the chair.]

But what has been asked in this House is: what government member asked what civil servant to pass the order on to the Queen's Printer to change the printing of the budget? Was it a consultant that was asked by government? Was it a permanent civil servant? Was it the Deputy Minister of Finance that was contacted by cabinet, someone from cabinet, ordering that the budget be changed?

We'd just like to get straight what the line of command was. The Minister of Finance says he wasn't consulted or didn't know it was going to be changed — didn't know it had been changed. What we are trying to find out from the government is what government member — what cabinet member — went to what civil servant and ordered that civil servant to order the Queen's Printer to change the budget printing. I would think that would be a very simple question to answer. I would ask the Minister of Finance to please answer that question. What member of cabinet ordered what civil servant — or was it a civil servant that was ordered by cabinet — to order the Queen's Printer to change the budget?

MS. R. BROWN (Vancouver-Burrard): Mr. Chairman, I would like to follow up on the member for Prince Rupert (Mr. Lea), because it is quite possible that it wasn't a member of government who ordered this change. Is it possible, Mr. Minister of Finance, that you were responding to some other pressures from people outside of the House? We really are kind of interested to find out who authorized the changes in the printing of the budget. Was it the hon. Leader of the Opposition (Mr. King) when he tried to make a special issue of it in the House and pointed out to you, Mr. Minister of Finance, how derogatory some of the statements in the budget were? Was that what your government responded to? In fact, are you prepared to tell us that it really was the hon. Leader of the Opposition who authorized this changing of the budget? Would you please let us know? This is a very serious matter. It has nothing to do with what you read.

Comparing the statements made in last year's budget address to what was printed doesn't make any kind of sense to us. Last year we had a Minister of Finance who was very adept. He knew his department. He could read in his speech all manner of things which would not have been in the printed budget, because he really did know his department. Now you read from a speech and that speech was published. Then there was a second edition of the published speech. What we want to know is: who authorized whom to tell the Queen's Printer to make those amendments in that published speech? We know that you are not responsible for that because you weren't here., Mr. Minister of Finance. You found out about it as a result of being told. So we're not holding you responsible for this. Somebody took over your responsibilities for you in your absence. Who was that person? Who took on your job and did it for you? Who are you protecting?

MR. CHAIRMAN: Order!

MS. BROWN: It's nothing to be ashamed of. We think it was a wise decision that you amended the speech.

MR. CHAIRMAN: Order, please.

MS. BROWN: Thank you, Mr. Chairman.

MR. CHAIRMAN: Please address the Chair.

MS. BROWN: Oh, through you, Mr. Chairman, it was a very wise decision, through you, Mr. Chairman,

[ Page 1150 ]

that it was changed. What we want to do is give credit where credit is due. That is all that we are trying to do. That is all that the hon. member for Comox (Ms. Sanford), through you, Mr. Chairman, to the hon. Minister of Finance, is trying to do. Now was the official Leader of the Opposition responsible for that? We think that credit should be given where credit is due. We would appreciate the Minister of Finance replying to this very simple question, through you, Mr. Chairman.

MR. GIBSON: Would the minister like to answer, Mr. Chairman?

MR. CHAIRMAN: I recognize the member for North Vancouver–Capilano.

MS. BROWN: Say something to us.

MR. GIBSON: Well, I'll just start out by mentioning that I have two questions that the minister hasn't answered for me either, Mr. Chairman. Who authorized the $181 million NSF cheque to ICBC? — very simple question — and what is the approximate cash position of the Province of British Columbia? Every minister ought to know that.

I'll go on and ask him another question. I hope he has the answer to this....

Interjection.

MR. GIBSON: He's got an answer.

HON. MR. WOLFE: Thank you, Mr. Chairman. I related to this question earlier. Perhaps you didn't hear the answer. You asked what the present cash position is. This will be revealed when our quarterly report is released. It would be inaccurate and misleading to try to indicate from present figures until we have the entire April picture, et cetera, recorded, which does affect the year-end deficit. I understand that many members opposite are trying to create a picture where the deficit is not going to be as large as it really is. So I say to you, Mr. Member, that these pieces of information that you referred to are going to be available to the people of British Columbia through our intentions to develop a quarterly financial report.

MR. GIBSON: Mr. Chairman, I suggest to you that that is absolute nonsense.

HON. MR. WOLFE: Oh, is that so?

MR. GIBSON: Absolute nonsense! Mr. Minister you have a cheque book.

Interjection.

MR. GIBSON: Every day you write out a few cheques to pay your bills.

MR. CHAIRMAN: Please address the Chair.

MR. GIBSON: Every day, Mr. Chairman, the minister writes out a few cheques to pay his bills. I'm talking now about his personal account which is much simpler, I appreciate, than the accounts of the Province of British Columbia. But I hope he would have no lower standards for the Province of British Columbia than for his own personal account.

Every day he writes out a cheque or two and sees what the balance is in his own personal bank account. Every day he can, if he wants, phone up the banker and say: "What is the balance standing to my credit in your bank at this particular day?"

These things are simple enough to do and, in the province of British Columbia, they should be done. Previous Finance ministers...and we have their own accounts and stories — possibly apocryphal — but nevertheless stories about how the Hon. W.A.C. Bennett used to keep on his desk every day a statement of the cash position of the province.

Now, Mr. Chairman, it just seems to me that a Minister of Finance should know these things, just roughly. If he could just tell us within $10 million we'd feel so much better. We know it's possible because one day he did bring into this House, on March 30, a statement that there was $245 million worth of cheques outstanding and $25 million in the bank. Now that was a shocking figure, but at least it was a figure he delivered. Why doesn't he know that figure today? I don't think that's a good enough answer.

I'll go on and ask the next question. The forecast revenues of the province's coming year are tremendously important, and I want to relate to the minister two figures that he gave in his budget address and ask him just to draw a little chart in front of him. When economic growth was 10 per cent in the province of British Columbia, according to the minister, the tax system generated increased revenues of 11 per cent. In other words, in the increased revenues were more than economic growth, even at that relatively low level of growth. This is nominal growth, of course. Then in another historical year, when the economy grew by about 18 per cent, tax revenues grew by almost 24 per cent. Imagine, Mr. Chairman, marking those two figures down on a chart and you put, oh, let's say, economic growth on the abscissa and tax yield on the ordinate — it doesn't matter which way you do it — and you draw a more or less straight line between them. Then you interpolate and you say if economic growth this year is the 14 per cent the minister says it's going to be, what does history teach us the increased tax yield will be?

[ Page 1151 ]

Now, Mr. Chairman, the minister in his budget suggested that it would be 13.7 per cent. I can't believe he drew that simple line, because if he drew that line he would find it's 16.7 per cent. How in the name of all that is simple, Mr. Chairman, can this minister tell us that in a year of economic growth of only 10 per cent, tax revenues grew at 11 percent — in other words, more than the economic growth — and yet in a year where the economy grew 14 per cent he's predicting the revenues will grow less by only 13.7 per cent?

Mr. Chairman, I suggest to you that that's nonsense. That's why I suggested in a previous debate that the tax system is going to yield at least $ 100 million more next year. I suspect that in the back of his mind there the minister knows it and this is just a nice little surplus that he's building up to give away goodies in future years. I'd like to see him stand up right now and just deal with those figures, just deal with the two firm historical points on that graph that he set out before this House, and then tell us how he has the technical simplicity, or whatever the word might be, to pretend to us that tax revenues in the coming year are going to grow less than the nominal growth of the economy.

MR. LEA: Mr. Chairman, I'd like to follow up a bit on what the member for North Vancouver–Capilano (Mr. Gibson) has been talking about. I think it's obvious to the House that when the figures that the Liberal leader has asked for...when the government wants to make those figures available it can be done on short notice. The figures are available.

MR. GIBSON: Of course they are.

MR. LEA: Now I suggest to you that there's a grey area between the end of the fiscal year and for the next three or four weeks when it's really an arbitrary decision as to what fiscal year those bills being paid are finally going to end up in. I would suggest that probably the government is letting as much from this current fiscal year, the 1976-77 fiscal year, wind up in the 1975-76 fiscal year, so it would be rather embarrassing for the minister to give the figures to the hon. Liberal leader knowing full well that that's the game plan.

HON. MR. WOLFE: I must comment on what the member just raised. He intimated that there was a game plan by this government to generate more expenses from next year and put them into this year, or something like this. These regulations are laid down very strenuously by the comptroller-general. He is the one who determines what expenditures in April relate to March, and so on. It has nothing to do with our government policy. The comptroller-general determines these things.

MR. LEA: In that case, let's have the figures. It's that simple.

MR. GIBSON: Mr. Chairman, the minister pops up and down quickly enough on political questions, but on questions of simple, hard fact he is noticeably reticent. Talking about those forecasting procedures, did the estimates that were given in the budget vary from the official estimates which were given to the minister by his department? Was there any change at the political level of estimates produced by the officials as to revenues for the forthcoming year?

I want to go on and ask him another question, Mr. Chairman. The Clarkson Gordon report has been held forth, not only by the minister but I would say virtually by the entire Social Credit Party in this House as sort of a touchstone or Bible on which we are to assess the finances of the province in this year.

This has been a very, very useful document, Mr. Chairman. It has given something that we have never had in this province before, namely an opportunity, in advance of the budget debate and in advance of the estimates, to know what the financial position of the province is going to be at the end of the year. It's been a very, very useful report, Mr. Chairman, and 1, generally speaking, have gone along with that report, with the conclusions; and what I want to know from the minister.... This report, of course, was sought by the government because they wanted to know in advance of the session what was the situation from the last fiscal year.

Now I suggest what's good enough for one year is good enough for another year. If the minister wanted to have an account of the last year of the NDP before we debated the budget and the estimates in this House, I would suggest to him that I would like to have a report on the first year of Social Credit next year, before we have to debate the budget and the estimates. So I'm asking the minister if he will undertake to produce, or have produced, another report, whether it is by Clarkson Gordon or whatever reputable accounting firm, next year at approximately the same time, in any event available before the budget debate so that we will know, just as this year we knew the true state of the fiscal year, the last fiscal year of the NDP, next year the true state of the first fiscal year of Social Credit.

It seems to me that that is straight down the line with the philosophy the minister has been expounding, that he would want to be as open as possible in the financial dealings and accountability in giving this House the facts to work with. Will he give us that guarantee that next year we will have the same kind of document?

HON. MR. WOLFE: Mr. Chairman, I think it's

[ Page 1152 ]

implicit. The member suggested that we intend to be an open government and we do intend to be an open government. It's implicit in the fact that we've announced quarterly reports. He will have the information he's asking for. He will have the information that he wants to have at that very moment, and this has not been available to this Legislature in the complete history....

AN HON. MEMBER: Clarkson Gordon is a forecast. It's not a historical....

HON. MR. WOLFE: No, it isn't. In any event, this information is going to be available to all members on the basis of quarterly information, Mr. Member — all right? Mr. Member, don't you want a quarterly report?

AN HON. MEMBER: We want a quarterly report....

HON. MR. WOLFE: You never provided it when you were in office. Why didn't you do that?

Interjections.

HON. MR. WOLFE: No, you didn't. No, you didn't, Mr. Member. This is a new departure towards providing public information throughout the year.

Mr. Chairman, the member for North Vancouver–Capilano (Mr. Gibson) refers to the revenue estimate. He has the opinion that there should be an increase of 15 per cent. I have the opinion that it should be 14 per cent. Now we have to live with that estimate in government. You don't have to live with it. You can go around with sort of your own estimate which you can have great joy in developing. But in any event we have to tie ourselves to an estimate for the coming year. We, in any event, disagree on this point and I just want to state that fact.

Interjection.

MR. GIBSON: Mr. Chairman, we sure do disagree on that estimate, but I would say the difference is that I've produced some historical examples for my figures and the minister hasn't. As a matter of fact, I was using the minister's own figures, and....

Interjections.

MR. GIBSON: I think I'm on my feet, Mr. Chairman.

I want to say one other thing about the quarterly reports which the minister implied would substitute for the Clarkson Gordon report, which of course is absolute nonsense. I think the minister is trying to wriggle a little bit off the hook.

The Clarkson Gordon report, as he well knows, gave a forecast before the end of the fiscal year as to what the fiscal year results would be in total. No quarterly report is going to give that. Quarterly reports are, by their nature, historical. Quarterly reports are historical.

Interjection.

MR. GIBSON: Are you going to tell us that from now on quarterly reports are going to forecast what is going to happen in the next quarter? Surely that's not what you are telling us.

Interjections.

MR. GIBSON: He seems to be nodding his head and saying yes. That's very interesting, Mr. Chairman. I would ask him to stand up and explain that a little more, because all I want is, before the end of the fiscal year and in time for the budget debate, the total year-end estimates.

Interjection.

MR. GIBSON: Will the minister confirm that? Mr. Chairman, the minister was just sitting in his seat, nodding his head, and then mumbling yes, and now he won't stand up and give us a precise confirmation that before the budget debate we will have estimates as to what the accounts of the province will be in total for the next fiscal year.

MR. CHAIRMAN: Hon. Member, may I remind you that we can ask questions but we cannot insist on answers?

HON. MR. WOLFE: Mr. Chairman, I would like to refer back to the member's favourite topic, which is that we should be anticipating revenues of 16 per cent. I thought he might be interested to know that our estimate is considered very optimistic by the federal officials and by other provinces.

MR. KING: Well, Mr. Chairman, the minister does not answer precise questions. He was asked whether or not quarterly reports from this point forward are going to give a prognostication, or are they going to give an estimate of what future revenues may be.

I think the Liberal leader (Mr. Gibson) has pointed out quite properly that historically quarterly reports deal with the past, with the historical performance of the province rather than anticipating what will occur in the future.

The minister full well realizes that if the new procedure is going to be continued, which is to give a report, a forecast, as the Clarkson Gordon report did,

[ Page 1153 ]

of what the revenue position of the province would be at the end of the fiscal year, that's one thing, but certainly quarterly reporting is a different system and a different approach altogether. I think the point that the member for North Vancouver–Capilano made is a valid one. Having once embarked on the procedure of forecasting revenue at the end of the fiscal year to some extent by an impartial, independent agency, then I think the government is duty-bound to continue that procedure. I hope the minister will confirm that that is the intention of the government.

HON. MR. WOLFE: Mr. Chairman, it would be impossible for me to describe to you now the contents of any quarterly report. Suffice it to say — and it's all I can tell you at this stage — that we'll report on financial results for a period. We haven't really come down to a conclusion on what can be incorporated in it, Secondly, whether it also provides an adjusted budget for the year in process is something we'll just have to determine whether we can do or not.

MR. KING: Mr. Chairman, I think we have no alternative but to conclude, on this side of the House, that the government is involved in portraying for the last fiscal year an improper picture of the province's finances. I think that they are clearly embarked on a programme in the current year which is destined to generate surplus revenue not only to the public treasury of this province, but to Crown corporations such as ICBC which are, in effect, receiving a subsidy from this government so that they might also build up a surplus.

I think it's fair to say — and, Mr. Chairman, I'll go so far as to predict — that there will, in fact, be a surplus of hundreds of millions of dollars within this current fiscal year and in the fiscal years to come, until we reach the year just prior to the election, when, I predict also, Mr. Chairman, the rates for ICBC will be slashed through the benefits of the interest revenue they are drawing with the compliments of the government in the intervening period of time. I predict also that the sales tax increase — that punitive and destructive sales tax increase that has been witnessed in the current budget — will be reduced significantly and dramatically, if not eliminated altogether, on the eve of the next provincial election, in an effort to buy the votes of the people of British Columbia with their own money.

MR. CHABOT: How much?

MR. KING: They're being punished now. We're seeing rates going up on the ferry system in an unconscionable way. We're seeing the gas tax. We're seeing the Crown corporations moved into a position where they can generate a surplus, in the same way that the government of this province, through that silent Minister of Finance who refuses to answer questions, is committed to generating a surplus so that the votes of the people of B.C. can be bought back just prior to the next election with their own money. It's the same old game, Mr. Chairman, that the previous Social Credit administration was notorious for and had great electoral success for years by virtue of, and I believe that the current administration sees that as too much of a good thing to relinquish. The promises of an open system of reporting on the finances of the province are so much political rhetoric, which the Minister of Finance has confirmed today are going to be meaningless. It's simply going to be a report on past performance, a fait accompli which is already available at year-end reporting, rather than accurate estimates of what revenue will be forthcoming to the province on a calculated basis for the future.

I can only conclude, Mr. Chairman, that the minister has embarked on a gigantic financial cover-up which is going to generate a surplus through punitive measures launched against the citizens of this province for the political purposes of that Social Credit government. I regret that, and I believe it's time for adjournment.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Wolfe files answers to questions.

Hon. Mrs. McCarthy moves adjournment of the House.

The House adjourned at 5:59 p.m.