[ Page 425 ]

CONTENTS

Routine proceedings

Tabling reports

British Columbia Steamship Co. annual report. Hon. Mr. Davis — 425

Budget debate

Hon. Mr. Curtis — 425

Mr. Barrett — 431

Hon. Mr. Chabot — 437

Mr. Skelly — 442

FRIDAY, JANUARY 28, 1977

The House met at 10 a.m.

Prayers.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): Mr. Speaker, I'd like to draw to the attention of the House this morning two groups visiting in the galleries. First, from the constituency of Saanich and the Islands, is a group of Saltspring Rangers who will be observing our deliberations for a while and then touring the parliamentary precinct. Secondly, a former associate of mine in broadcasting who has gone on to assist young people in terms of entering broadcast journalism, Barrie McMaster, has with him 10 members of his senior class of broadcast journalism — students from BCIT in Burnaby. Would the House welcome both groups?

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): I would like to take this opportunity to extend my congratulations and ask the House to join me in congratulating the Minister of Agriculture (Hon. Mr. Hewitt) on his fifth consecutive 39th birthday.

MR. L.B. KAHL (Esquimalt): Mr. Speaker, seated in the gallery this morning is a group of adult students — 17 in number — from the Pacific Centre in my constituency. They are accompanied by their most capable instructor, Gladys Kraft, and I would like the House to bid them welcome, please.

MR. E.N. VEITCH (Burnaby-Willingdon): Mr. Speaker, seated in the gallery this morning is my wife Sheila. As well, I would like to bid welcome to Mr. McMaster and his group from the broadcasting class of BCIT which is situated in the great riding of Burnaby-Willingdon.

Hon. Mr. Davis tables the annual report of the British Columbia Steamship Company (1975) Ltd. for the year ending December 31,1976.

Orders of the day.

ON THE BUDGET
(continued debate)

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): Mr. Speaker, I rise to support this budget. It's also my first opportunity to participate in debates in this session of parliament, and I would like to extend my own congratulations to those members of the government party who, since I last spoke, were elevated to cabinet position. I've enjoyed working with them as members of the caucus and now as colleagues in government.

Since I last reported on Municipal Affairs and Housing in this House, Mr. Speaker, the two ministries have been joined together in what this government believes to be a logical and productive way. The two sections of the ministry remain distinctly separate in some essential respects, but where co-ordination appeared sensible, it has been carried out and, in my view, carried out very well. Payroll and accounting procedures, personnel matters and mechanics of office operation have all been merged for efficiency and greater effectiveness. In some ways this would seem to resemble that which has existed in the Ministry of Health for a number of years — where a single minister reports to the House, while senior departmental people, public service personnel, deal with a variety of programmes that must be compatible and yet where clearly separate skills are necessary.

And so, in Municipal Affairs and Housing, in our relationships with the people of British Columbia, with members of this House and with representatives of local government, we can now offer the degree of co-ordination that they expect and that, in my view, assures prompt, fully informed, fully co-ordinated response.

The housing section of this budget, particularly the housing and development vote of $71.77 million, is sufficient to guarantee that the province of British Columbia can adequately meet the demands of our citizens for a wide variety of accommodation: ownership, rental, mobile homes, cooperatives. That $71.7 million is an amount which reflects more than grants and subsidies to organizations and individuals. It also ensures that proper cost control and accounting methods are firmly in place. In my first year responsible for this ministry, it became apparent that this was one area of the ministry's activities to which I had to address myself with the greatest possible attention and speed. It's to the credit of all the staff in the housing section of the ministry that this degree of control has been implemented in approximately one year — control that was not in place in the first years of the former Department of Housing from late 1973. You see, Mr. Speaker, we spent a great amount of time in just over 12 months, just simply sorting out the maze through which the old department appeared to wander in its first years. It's a complicated and often bewildering story.

Even in the context then, and we have to go back to that period, of an extremely tight housing market, it's obvious now that the former government had no well-defined plan and did not really understand what it wanted to do in housing or the dollar costs involved. It was in fact — and this is abundantly clear now, Mr. Speaker — anything at any cost. There was a lack of co-ordination between ministries and, to a certain extent, a lack of accountability. It's a matter

[ Page 426 ]

of record, Mr. Speaker, that in the fall of 1974, while the housing fund was considered ample at some $50 million, there were commitments of one kind or another for several times that amount of $50 million.

There were few, if any, projections as to the ultimate cost to the province, to the taxpayer. Apparently it was understood, in round figures, where the Central Mortgage and Housing Corporation commitment to British Columbia stood. But there was a lack of management restraint and a lack of an overall understanding of the despair of some individuals.

A few examples may be of use to the House today. Pitt Meadows is at the top of the list. This was a proposal-call project. In its first conceptual stage, the development was to comprise approximately 480 duplexes — 480 or 490 — to be disposed of, it was thought, as one-third co-op, one-third rental, and one-third sale. The firm of Community Builders Ltd. was authorized to proceed with securing a land-use contract. Negotiations were protracted, and that's something of an understatement.

In August, 1974, the former Minister of Housing authorized Dunhill Development Corporation to pay out $2.5 million for the project. Now notwithstanding his good intentions, I'm sure, 1974 stretched into 1975 — still no land-use contract with Pitt Meadows, but the people of British Columbia, through the former government, had advanced up to 100 per cent of the value of the land.

It was in the spring of last year — in April, 1976, I believe — that this government brought the situation to an abrupt halt until we could be assured that public dollars were fully protected. However, even then it was too late in some respects. You see, Mr. Speaker, there was a clause in the original agreement signed by the former government to the effect that if the project was not well underway, foreclosure would take place and the original interest rate built into the agreement would accelerate from 8 per cent to 12 per cent. However, even that did not happen, because of a trigger date in the agreement. That clause in the agreement dated October, 1974, would have allowed the Crown to waive its option to purchase the development prior to the execution of a land-use contract. Somehow, regrettably, that key date of April 1, 1975, was permitted to slip by unnoticed and with no action.

Now, of course, in the context of our present housing situation, there is no ready market for 480 duplexes — units of special housing — on that land, if indeed there ever was, even in that tight housing crunch.

The Pitt Meadows problem has occupied a tremendous amount of time in this ministry since December, 1975, and I'm now hopeful that the matter can be resolved in a satisfactory way. We're not out of the woods on it. We hope to provide a mix of housing and also, which is our responsibility, to protect the public's heavy tax-dollar interest.

Most members, Mr. Speaker, will also know of another major socialist project called Burnaby-200. This was initiated in 1974 with the intention that it would be a sensitive development regarding open space, environmental considerations, low density. Architects were commissioned to produce a development concept, and that original proposal projected a yield of six units per acre, a disastrously low density in relation to a comprehensive development of 240 acres unless, of course, it was to be in single-family lots.

Nevertheless, the concept was accepted by the former minister (Mr. Nicolson) who, I understand, expressed satisfaction with the proposal. In April, 1975, a report by the district of Burnaby planning department endorsed the low-density conservation approach and suggested a high level of capital contributions from the developer. In spite of the already weak economic profile, a decision was made to add to the land — to purchase another 13.8 acres of land, at $1.2 million, from the Lake City Industrial Park. The number of additional units to be made possible through this purchase did not cover the increased cost. In fact the purchase and servicing of the additional land eventually added $1,700 per unit to the cost of all the units to be produced in the total project.

Also in June, 1975, the government of the day acceded to Burnaby's request for a park, the Lake City land, a school site, and substantial contributions for a recreation centre, and all of this costed out to another $1,800 per unit over the entire development.

Yet another critical decision on Burnaby-200 related to the acquisition of 21 acres of municipal land purchased for $40,000 per acre. This one, Mr. Speaker, staggers the imagination, for it was land that had been acquired earlier by the Department of Highways, then returned to the municipality, then sold to the Department of Housing. An internal recommendation was that the municipal land should not be purchased for anything above the 1965 valuation of approximately $7,000 an acre. The Department of Highways, however, was persuaded to return the land to Burnaby for nothing, who then asked and received the 1975 valuation price of $40,000 an acre. The transaction was approved by the former Minister of Housing.

HON. W.N. VANDER ZALM (Minister of Human Resources): Shame!

HON. MR. CURTIS: It's very clear now that this project, designed to yield 1,370 units, was overdesigned and the density was much too low to meet any target of generating affordable housing without a very significant write-down or loss, not by

[ Page 427 ]

the government but by the people of the province of British Columbia. The density has worked out to 5.6 per acre, and parks and school sites account for 44 per cent of the total land in the project. The bare development per unit, at approximately $4,500 per acre, is actually not that bad, but when we add in architectural fees and other costs it amounts to about $7,000 per unit. Further, the project has resulted already in payment of at least $1 million in consulting fees. Seventy-four acres of the 244 acres were purchased at an average of $50,000 an acre.

Now if we use this as the value of Crown land and assume a realistic $9,000 per unit, the project could lose $10 million. If a pessimistic value is realized — that is, $6,200 an acre — the loss would be $14 million. That's housing at any cost, Mr. Speaker.

HON. MR. VANDER ZALM: Shame!

HON. MR. CURTIS: There is one key paragraph in the summary prepared for me with respect to Burnaby-200: "Careful scrutiny of the files in our office indicates that in the initial stages of this project no meaningful controls were exercised."

Mr. Speaker, the list goes on, again setting out the problems with which this ministry has wrestled as a result of decisions made prior to December, 1975.

Riverview: a runaway locomotive in terms of escalating costs, recognized in the housing industry in British Columbia as a classic example of lack of skilled government management and careful cost control.

Roy Road in Saanich: a project in which the hon. second member for Victoria (Mr. Barber), before the commencement of this session, took great delight in referring to as "underwater housing."

Somehow, however, the member, Mr. Speaker, neglected to observe that the provincial expenditure for Roy Road — to use his term, "underwater housing" — was on April 30, 1973, up to and including December, 1975, when the provincial expenditures on this project include just under $81,000 made under the federal-provincial agreement, and almost $397,000 funded solely provincially. That is a total expenditure of $478,000 on Roy Road underwater housing before the change of government.

The second member for Victoria often speaks of a fairness and reasoned thinking in this House. I would have thought that he would have been a little more objective in his criticism. He talks about community relations and understanding various problems. It would have been nice to have seen an objective position taken by the second member for Victoria in terms of the decisions and commitments made for the Roy Road project by the former government, the a party of which he is now a member.

Mr. Speaker, Burke Mountain, the northeast sector of the Greater Vancouver Regional District: a total of....

Interjection.

HON. MR. CURTIS: Mr. Member, I've heard the interjections.

The criticism which was launched against this government within recent weeks neglected to observe, through you, Mr. Speaker, that this project was initiated during the former government's regime. Now fair enough: criticize if you will, but recognize that it is an inherited project, an inherited problem, that somehow was left out.

Burke Mountain: a total of $20 million for the purchase of 2,600 acres, working out to about $7,700 an acre. Again, this is not a bad price if all of Burke Mountain could be developed. The ministry knows, and I must tell the House right now, that we could not sell the land for the price paid for it. But with care, skill and a watchful review of all aspects, we think it can be scaled down and integrated with the entire growth strategy for the northeast sector of the Greater Vancouver Regional District — this instead of another socialist government decision made in comparative isolation and in a great hurry.

Tantalus Village in Squamish: here, Mr. Speaker, instructions for development were based on growth projections for increased employment at the Railwest car manufacturing plant and related railway activities. If I am incorrect I hope I will be corrected by the former minister, but from all available information it appears that somewhere midway through the Housing department's plans for this project, the British Columbia Railway cut the projected work force in Squamish in half but did not bother to communicate that vital information to the Department of Housing. Port Hardy and Prince Rupert mobile-home parks: no detailed cost estimates; no feasibility studies; no pro forma; no accurate, useful soil studies. Today in Prince Rupert the market is estimated at about $12,000 for a mobile-home pad. The inherited cost of the province's project in that city is $21,000 per pad. After months of work, after sorting through a lot of material, after countless hours of evening and weekend overtime by many members of the ministry's staff, we have just now received a detailed, accurate report on all land controlled by the ministry — for what reason I don't know.

In the first years of its life, the Department of Housing was involved in all sorts of land exchanges in various forms with no central records kept. The department was created in November, 1973, and the Act at that time made provision for the housing fund, but no attempt was made to set up records for it until about one year later, in September, 1974. Again, in the initial stages there were no records of housing commitments, either in total or by programme.

[ Page 428 ]

Admittedly, the first attempt at this was made when the 1975-76 estimates were prepared.

In housing, Mr. Speaker, as in so many other matters which we have examined as a new government, the philosophy of the former government was: "We can do it all. We can do it best. We don't need anyone's help." How wrong that has proven to be! That assumption was grossly incorrect.

To repeat, Mr. Speaker, it is not just a question of providing housing in the Greater Vancouver Regional District, in Burnaby, in Pitt Meadows, in Prince Rupert or wherever it may be. Again, the methods which resulted in a lack of clear fiscal accountability....

Real costs were hidden, not deliberately, through sloppiness. The ministry will not tolerate that now.

This ministry's relationship with HCBC, formerly Dunhill, has been completely restructured, tightened and strengthened, in order that no costs to the public can go unidentified. Similarly, where HCBC undertakes a project and competes effectively in the marketplace, the financial statements produced later on the floor of this House will accurately reflect its success.

Mr. Speaker, developing large tracts of land by big government, i.e. the province, and then leasing that land to individuals who we know would prefer to own their own land creates economic consequences that are staggering in terms of dollar requirements by government. This was recognized very early on by CMHC during the life of the former government. CMHC was moved to restrict its lending to this province for land developments which were to be leased for five years. That alone should have been a signal.

CMHC was concerned, and when the feds are concerned about spending money, someone here should really take note. (Laughter.)

Housing at any cost was a conscious decision, possibly justified to a certain extent in a period of housing shortage. However, I find and this government finds unacceptable the concept of housing at any cost and with no knowledge of that cost.

Programmes and projects were conceived in a highly inflationary period. We see that now, in hindsight: families who could afford housing were literally bidding for homes. That's a matter of record. Apparently the former government did not recognize that housing supply and demand is cyclical and has been for generations. Many homes or dwelling units purchased in that period of 1973 to 1975 are now the subject of concern, even within recent days. We see examples of family overcommitment in terms of shelter. We see attrition of equity and a resultant higher foreclosure rate.

Well, Mr. Speaker, so much for the problems of the past, for those things that have demanded a tremendous amount of attention in 12 months. They are one by one by one, I hope, being resolved but not without difficulty and not without substantial cost to the taxpayer. We are still attempting to put it all together. Where from here?

First, Mr. Speaker, to restate a very fundamental fact, this government's commitment is to the provision of a variety of housing for our citizens, present and future — ownership, rental and senior citizens' accommodation. But rather than attempting to do it all on our own and identifying ourselves as the only experts in town, we want to assist in the delivery of housing through the private sector in cooperation with local governments, and, where absolutely essential, by government initiative alone.

Secondly, it is to recognize that the delivery of housing does not necessarily mean building houses. Instead, we see it as our job now in the ministry to do these things: establish residential standards; establish a uniform and readily understood series of regulations; examine and encourage innovative forms of housing; increase the efficiency of the private sector — and they can improve their efficiency; respond to the strong citizen desire for ownership without overlooking the needs of tenants and seniors. In other words, it is to make certain — so very simply — that the consumer has a choice of shelter.

The change in emphasis is working. Preliminary figures indicate a record year for urban housing starts in British Columbia during 1976. Those urban starts totalled 29,750, an increase of 4 per cent over the previous record year of 1973, an increase of 12 per cent over 1975. Of particular note in this area is that metropolitan Victoria exceeded its previous record year by 6 per cent. Although metropolitan Vancouver will not have a record for 1976, starts were up 25 per cent in 1976 over 1975. When final figures are available it is anticipated that total starts for British Columbia, urban and rural, could set a new record out of 1976.

In regard to the type of housing units being built, it should be pointed out that only 28 per cent of the units started in metro Victoria for the period January to November, 1976, were single-detached houses. In 1975, 37 per cent of the starts were single-detached. The percentage of single-detached starts in metro Vancouver has remained stable at about 50 per cent over the last two years. For the province as a whole, single-detached starts continue to represent between 55 and 58 per cent of all starts.

The current upturn in housing production began in mid-1975 and appears to have coincided with a decline in British Columbia's population growth rate from 3 per cent to about 1.3 per cent. This reduction in growth has been the result of a severe decline in the migration of families from other provinces as well as a decline in international immigration to British Columbia. Traditionally in years prior to that, British

[ Page 429 ]

Columbia had a net gain of about 3,000 to 4,000 families per year from other provinces. In 1975-76, in fact, there was a small net outflow of families from the province. Partly as a result of this reduction in demand, we've seen vacancy rates increase and the inventory of newly completed, unoccupied dwelling units in metro Vancouver and metro Victoria is at well over 3,000 units.

In addition, as all members will know, house prices have stabilized over the last several months. With the decline, therefore, of new housing demand and the present high level of building activity, we're quickly catching up on a backlog of demands for housing. But we may be on something of a plateau and the demand could increase again. It is difficult to know exactly when the backlog demands will be satisfied. A possible indication would be a sudden increase in the inventory of newly completed, unoccupied dwelling units, followed by a decline in the level of building activity. Whether this will happen in 1977, no one can say this early in the year, particularly when the fall in mortgage interest rates is presently reinforcing the demand — and I'm delighted to see it — by bringing home ownership within the income range of lower- and middle-income families. A reasonable forecast, this early in the new year, for housing starts of all types in British Columbia during 1977 would be 32,000 to 33,000 units.

Mr. Speaker, the key to this government's housing policy, announced and debated during the 1975 election campaign and now well underway, relates to the identification, designation and disposition of Crown land suitable for housing throughout the province. I can tell you that the activity is proceeding rapidly, with highly satisfying and encouraging results. We're very encouraged by the response not only from the potential consumer — some of them are extremely anxious to get going — but local government as well. Detailed compilation of Crown land inventory is still in progress. But a preliminary estimate of Crown acreage within the boundaries of incorporated municipalities in this province suggests a figure of 550,000 acres suitable for housing. Only a portion of that land is developable in the immediate future, and those half-million acres do not include the very large tracts of land that lie beyond municipal boundaries and that have been identified as adjacent to, but outside, the boundaries of municipalities. That land will also, in many instances, ultimately be available for housing development. I quote the figures without in any way counting agricultural land, land that is frozen for one purpose or another, and Crown land that is free but needs to be serviced, can be sold and can be developed for housing present and future people of British Columbia.

Now this is a major undertaking in this ministry, and I would like to express my appreciation to the Minister of Environment (Hon. Mr. Nielsen) and to his staff, as well as staff in Municipal Affairs and Housing, for the tremendous effort that has gone into this concept, because a great deal of work has had to be done.

Most importantly of all, we see no reason at all why first lots under this government's Crown land housing programme cannot be available for sale as early as this fall, 1977. Our rural subdivision programme progresses well. Representatives of the ministry have visited, I believe, every regional district — they may have missed one — and we expect to process the first four development proposals with regional districts within a few weeks.

Again, Mr. Speaker, we as a government were elected in this province because we believe that private initiative — private enterprise — is one of the greatest resources our society possesses. Nowhere is there a clearer example of the truth of that proposition than in my ministry. Early in 1976 I announced an assisted-rental programme in conjunction with the federal government. The programme represents the happy combination of private financing, private initiative and government assistance, research and subsidies. The programme is based on the theory that, if people are given a reasonable financial incentive, they will respond in the public interest.

The NDP struggled to produce just over 1,000 units of rental accommodation in their last two years in office. The new assisted-rental programme will result in the commitment of 4,000 rental units in this province in one year — more than had been built by private enterprise and government over the last three years. The limit to the number of units created will be set — logically, obviously — by the marketplace, continuously monitored by government, financial institutions and investors.

I'm also pleased to announce, Mr. Speaker, that in spite of all this activity, the housing fund, after this new fiscal year, is designed to no longer require new capital injection from consolidated revenue. To repeat, sales proceeds from our existing portfolio of assets, land improvement, serviced land, and so forth, and the revenue from the sale of Crown land for residential purposes will place this government in the position of requiring no further new capital from consolidated revenue for housing production.

Mr. Speaker, in my earlier remarks I brought into serious question the methods employed in the first years of the Housing ministry under the socialists — not the motivation, but the methods. With respect to fiscal control I referred to a much tighter and more responsible relationship with the Housing Corporation of B.C., formerly Dunhill. In addition, I've given highest priority to the immediate improvement of our management and accounting procedures to ensure that public dollars in this ministry are used in the most responsible and

[ Page 430 ]

productive manner possible.

I totally reject the proposition that big government does its best. It does not. What big government does best is create the climate, the environment in which local governments and the private sector can successfully produce a variety of affordable housing for the citizens of B.C.

Mr. Speaker, two major changes contained in the 1977-78 budget for the ministry are not readily apparent to members. Both are of special interest and, I hope, assistance to local governments and, again, they underscore this government's philosophy.

We are correcting the inequitable and inappropriate cost levied against eight municipalities and all components in the Greater Vancouver Regional District in subsidizing provincial rental housing. We have in the past penalized those communities which have historically participated with other levels of government in production and operation of government housing. In reality we have been penalizing the good guys. The communities to be immediately relieved of this 12.5 per cent share of operating subsidy are: Cranbrook, Dawson Creek, GVRD components, Langley district, Port Alberni, Prince George, Prince Rupert, Saanich and Victoria. The 1976 municipal share of operating subsidy, when finally calculated, would have been about $850,000 to $870,000. Projections for 1977 amount to about $907,000. That subsidy will, from now on, be carried entirely by the province.

Mr. Speaker, I've continually referred to the responsibilities of municipalities to accept a fair share of growth to house today's citizens, our sons and daughters and our new arrivals. But this cannot be a one-way street for we recognize the heavy municipal costs associated with that growth.

Members are aware that last year I announced a provincial grant to municipalities of $500 per eligible dwelling unit. I'm also pleased to announce, Mr. Speaker, that this grant is doubled to $ 1,000 per unit, effective next Tuesday, February 1. The importance of this will not be lost on members or our colleagues in local government when it's recalled that the federal grant of $1,000 for qualifying units, coupled with this doubled provincial assistance, will now generate $2,000 per new approved dwelling unit in British Columbia. I emphasize that application for this grant is based on a building permit issued, and the grant will be paid on completion of the unit.

This government recognizes the financial difficulties with which local government wrestles every day. We ask for their cooperation, and we offer very significant financial assistance, a doubling of that grant, as part of our recognition of the overall problem.

In the fiscal year beginning this April 1, Municipal Affairs and Housing will provide a total of $140.7 million in financial assistance to B.C.'s municipalities and regional districts. This represents an 11.7 per cent increase over the corresponding figure in last year's budget. I'm proud to say that this government's programme of financial assistance to local government is, in the new fiscal year, the largest in the history of this province. The local government grant, traditionally known as the per capita grant, is the largest single component of British Columbia's municipal grant structure. The total funding to be distributed through the per capita grant this year will be $68.3 million. Such a large sum bears, I think, compelling witness to this government's firm belief in generous levels of unconditional funding for municipalities.

The initial distribution of this year's per capita grants is based on preliminary 1976 census figures received from Census Canada. When later figures are received later in the year, that revised data can be used to adjust the grants. Judging from preliminary indications, very few municipalities have experienced slight decline from the 1971 census populations on which the local government grant has been based for the past five years.

Mr. Speaker, we are going to do a number of other things for local government: financial compensation allocated to municipalities experiencing growth in the last five intercensal years; provision has also been made in the ministry's budget for an increase of $3.2 million in homeowner grant payments. The homeowner grant is admittedly not a direct transfer to local government, but the tax relief it provides to citizens helps considerably in lightening the tax property load. This government has enriched the value of the homeowner grant for seniors as a social policy instrument.

Grants under the Sewerage Facilities Assistance Act will be increased by $4.6 million to $15.6 million. The infusion of funds here will sustain a very important, albeit costly, programme for the province. An additional $4 million will be pumped into the interim revenue-sharing programme, raising its value by 13-1/3 per cent to $34 million.

In detail, the interim revenue-sharing programme for the new year breaks down as follows: Municipalities and regional districts will receive a basic grant of $30,000; provincial commitments to water-facilities assistance will increase by $1 million, to a total of $4 million; the municipal incentive grants of which I spoke earlier; and then there is the additional $100 lower-density incentive grant through the municipal affairs section of the ministry.

The largest programme of all in the total revenue sharing, of course, is the relative sharing grant that will benefit municipalities to the tune of $22.5 million this coming year. Fifty per cent of this total, which has grown by $2 million over last year's allotment, will be distributed on the basis of relative operating costs, and details will be sent out to local

[ Page 431 ]

government within the next few days.

Although we recognize increasing financial pressure on local government and its taxpayers and have responded to that situation, I cannot close without referring municipalities and regional districts to this year's provincial call for restraint. The demand for more and improved local services is always present in a council chamber or in a regional board office. I urge municipalities, as they sit down in March and April and early May to work out their own budgets, to pare wherever possible, particularly in terms of non-essential activities.

Mr. Speaker, in the last few minutes I've attempted to give the members of the House a lot of numbers and I've described a lot of programmes. The purpose has not been just to pile up statistics, but to substantiate what is already becoming evident to many: that in terms of housing we are correcting the problems of the past and moving forward from there, and that this government's record of municipal assistance is, and will be, the best the province has ever experienced, and this year is only the beginning.

MR. D. BARRETT (Leader of the Opposition): Mr. Speaker, I have just one note to make. I have been approached by a number of backbenchers who want to learn by experience how to get into a cabinet, and since I'm not able to give the time to counsel everyone individually, I thought that the best thing I could do is to give them the advice across the floor of the House when cabinet ministers wouldn't be around. They don't stick around for the debates — a few of them do and I'm going to talk about that — but for the rest of you, the only advice I can give is this: I've given it a great deal of thought and I've come up with one conclusion. Your problem is you all joined one party at the wrong time. What you have to do is quit Social Credit, join the Liberals and then renounce your new faith. Come back in that way and you make it into the cabinet.

Now some of you fellows have made the mistake of actually joining Social Credit, thinking you had a chance for the cabinet that way. But it's not the way it works, fellas, and since I haven't got the time to handle each one of you separately, the best advice is: join the Liberals first. The odds are, on a Liberal background you've got a better chance.

Now the Minister of Energy, Transport and Communications (Hon. Mr. Davis), the Minister of Education (Hon. Mr. McGeer), the Minister of Agriculture (Hon. Mr. Hewitt), the Minister of Labour (Hon. Mr. Williams), the Attorney-General (Hon. Mr. Gardom), the Minister of Human Resources (Hon. Mr. Vander Zalm), the Minister of Housing (Hon. Mr. Curtis) — there it is, gang. It's obvious. Some of you've made the mistake of belonging to that party for years, like the member for Omineca. It's his second time around and he used to be a cabinet minister. I don't know why he's not in the cabinet now. The only conclusion I can come to is that he wasn't....

Interjection.

MR. BARRETT: Skeena now. Whatever happened to Omineca?

Interjection.

MR. BARRETT: Yes, Omineca. Well, where he made a mistake was he switched ridings, not parties.

AN HON. MEMBER: So did you.

MR. BARRETT: That's his problem. Be careful, Mr. Minister of Mines (Hon. Mr. Chabot) . You just made it, Mr. Minister of Mines. One of the old guard and you just made it because there was a spot open. I understand that it certainly wasn't based on anything other than a flip of a coin. So I just want to tell you that I can't spend any more time with the backbenchers. That's the best advice I can give them.

AN HON. MEMBER: If you can give them advice how to get in you can also give them advice how to get out.

MR. BARRETT: I certainly can. You keep on opening your mouth, Mr. Member, and you'll get out in a hurry. You certainly will. And I have a special complaint that I'm going to take up with you separately. As my MLA, you're a flop. But I don't want to raise that here; that's taking undue advantage.

Mr. Speaker, I want to talk a little bit about the cabinet ministers. I want to say how much I appreciate some of the cabinet ministers who take their duties in this House very seriously. I want to particularly thank the Minister of Energy, Transport and Communications (Hon. Mr. Davis) for sitting through all of the opposition criticism on that particular department. I think that it's very important for ministers to show that amount of, frankly, courtesy to the official opposition and a degree of responsibility. I want to thank the minister for doing that.

The other ministers, Mr. Speaker, can gauge their own attendance in the House. We understand how busy the cabinet is, but I think it is important that an effort should be made, and it has been made by that minister, to be in the House when the opposition spokesperson is speaking on that particular ministry.

I have a few comments to make about the Minister of Municipal Affairs and Housing (Hon. Mr. Curtis), but he's gone, It's interesting to hear the Minister of Municipal Affairs and Housing attack the former

[ Page 432 ]

Minister of Housing. I was in this House for years when Social Credit did absolutely nothing in the field of housing. That minister suffered all the pangs of birth of the programmes that he brought in, including the purchase of Dunhill that was attacked in the most irresponsible manner by that member and other Social Credit opposition members. After that minister bearing the pangs of birth, we hear a sanctimonious statement by the minister who is not enjoying the child. If it hadn't been for the hard work of that minister, none of those programmes would have got off the ground — none of them. He didn't inherit a department that had a philosophy or a commitment to public housing. He inherited a zero — a blank. The problems we faced in terms of the fact that there was no housing in this province related to the earlier Social Credit lack of activity.

I also want to make one other comment about that minister, and that is not a single word about the senior citizens of this province. He didn't mention to this House that there's been a cut from $10 million to $4 million for senior citizens' housing. He didn't mention that at all! There are 8,300 senior citizens in this province waiting for housing. The news they get from Social Credit is that the amount of money to be spent on them is cut from $10 million to $4 million. The human tragedy of elderly couples faced with the need for accommodation is highlighted by other problems, but certainly in their golden years one would expect that they would have the priority of this government. That is not the case.

MR. D.G. COCKE (New Westminster): Well, they're not millionaires, of course.

MR. BARRETT: Of course they're not millionaires. They made it possible for other people to become millionaires, though, Mr. Member, and we do have a moral obligation to these people.

Mr. Speaker, I'm going to divide my speech into two 19½-minute parts. I'm going to talk about these three pages out of the budget, because this is where the false story of the budget is told. Now I would never use unparliamentary words, Mr. Speaker, like the member for North Vancouver–Capilano (Mr. Gibson) who said it was a flim-flam budget. Even though I agree with him that it is a flim-flam budget, I would never use the words "flim-flam" in this House. Therefore I'm just going to say that it's a false budget. I'm not going to say the speech is false, because that would be putting something on the minister that he might not want to identify with. But if we turn to page 10, Mr. Speaker, what do we find? We find that the minister says, at the bottom of page 10:

"Our forest products industry should show continued improvement, particularly in lumber exports to the United States, where housing starts are expected to rise from a level of 1.5 million units in 1976 to 1.8 million units in 1977."

Now, Mr. Speaker, let us take a look at how this reflects in estimated revenue. We are told by the minister — who is not, I'm sure, fibbing to any one of us — that there is going to be an increase in the forest industry. Shall we assume that it's going to be a modest increase? Mr. Speaker, let us examine what the budget says in terms of the revenue from the increase. If there's going to be an increase in sales, is it not logical to assume that stumpage fees will go up, and we get more money in stumpage fees if we're selling more timber? Is that logical? Is it logical to assume that if we're selling more lumber the tax on the forest industry would go up? Is that correct to assume that?

AN HON. MEMBER: Correct.

MR. BARRETT: One could assume that if they're boasting that there's going to be a modest increase then it would reflect in figures. Now somebody is not telling the Minister of Finance the truth. I don't know who it is, but someone is not telling him the truth, because after he made that statement we find on the first three pages of the budget, under revenue, the following information: the logging tax in 1977 was estimated to be $27 million. With an increase in sales the logging tax drops to $10 million, and they're expecting 60 per cent less. Now how can more sales mean less money? Is that Social Credit monetary theory?

Now the next thing: timber leases are not related to revenue, but they're down. Timber revenues are not necessarily related to the great markets. But the next one is timber royalties. It says on page 10 that we're going to sell more. Timber royalties: $8 million in 1976; $7 million in 1977. How can you sell more and make less?

But this is the most revealing figure of all to prove the case that someone has not told the truth to the Minister of Finance. Timber sales: that is the amount of money that we get back directly related to the sales of timber internally and on the export market. If they go up, our revenue goes up; if they go down, our revenue goes down. Is that correct, Mr. Member for North Vancouver (Mr. Gibson)?

Interjection.

MR. BARRETT: Yes, it's complicated. Your father would have said it far more clearly, but Harvard kind of messes things up. (Laughter.)

If the sales go up, the revenue to the Crown goes up. In 1976 the estimated revenue was $80 million, although I expect that the real revenue will be around $65 million to $70 million, as the minister quoted on

[ Page 433 ]

television just last night. I watched him after supper. Do you know what it is? It's down from an estimate of $80 million to $50 million.

MR. G.R. LEA (Prince Rupert): More legislation to come in.

MR. BARRETT: There is 37 per cent less revenue expected after they tell us in the budget speech that our forest products industry should show continued improvement. Somebody has lied to the Minister of Finance, and I want to know who it is. No one should be permitted to embarrass the Minister of Finance in this manner. I think it is absolutely wrong that the minister has been placed in this position. I hope that he finds out who's been doing this to him.

He says in the speech that the other areas are going to do well too. On page 11: "Increased Japanese demand for British Columbia mineral production, particularly copper and coal, is forecast. Coal should have volume and value increases of more than 20 per cent in 1977." A ton of coal sells for close to $50 a ton.

lnterjection.

MR. BARRETT: Well, let's say $50 a ton, Mr. Member. It's going to have a value increase in one year, according to page 11, of 20 per cent. That means another $10 a ton value increase. Is that correct? It will be, very roughly, $10 a ton more, according to this statement.

Now what does that mean? That means that if you believe this page, that should be reflected on this page: "Revenue." But what do they say? Somebody has been lying to the minister, Mr. Speaker, because this is what they tell us. Even though there is going to be an increase of 20 per cent in the value of coal, we find that royalties, including coal, are going down.

MR. COCKE: They're a bunch of bunglers.

MR. BARRETT: How about that? I have been worried about this for a whole week. I can't tell you how much it embarrasses me to have to raise the fact that somebody has lied to the minister, given him two different statements to make and made him look foolish.

MR. LEA: They're rolling back the economic speedometer.

MR. BARRETT: He works hard enough at it himself without someone else putting the words in his mouth. The minister has been given false information in his budget speech because his revenues don't bear out what he's been saying. I think we should give him a chance to go back and rewrite it. He should be given that chance. No one should be placing that minister in that position.

Royalties are going from $12.8 million down to $5.3 million, a drop of 58 per cent.

MR. C. BARBER (Victoria): Shame!

MR. BARRETT: Petroleum and natural gas royalties: down from $275 million to $245 million. Why, they tell us that production has never been greater in natural gas!

Mining tax was $15 million last year; this year it will be $11 million, down 26 per cent.

Mineral land tax, $15 million last year, will be $9 million this year, down 40 per cent; mineral resource tax will be $11 million this year — there was none last year. That is a net difference, Mr. Speaker, of a loss to the Crown of $36 million — $36 million less in tax money back to the people of British Columbia. At the same time, he's telling us that increased demand for mineral production, particularly copper and coal, is forecast.

Along with that $36 million that could go to schools, hospitals, roads, bridges and anything else, including jobs and people, is the fact that since April, 1976, a $1-a-ton royalty more on coal, that was supposed to have been paid and it was agreed by the former Minister of Mines sitting over there that the mining companies could pay, has never been collected. From now on only the people sitting in this Legislative Assembly should know this, because other people in this province are going to get angry if they find out that the coal companies haven't been asked to pay a tax that they were ready to pay. We will have line-ups at the ferries, with people saying: "Look, I understand the rate has gone up but I don't want to pay because I want the same approach as the coal companies. You just put the price up but just give me a wink and a nod and tell me I don't have to pay when I go on the ferry."

MR. W.S. KING (Revelstoke-Slocan): The giveaway gang.

MR. BARRETT: No, it's worse than a giveaway, Mr. Member. It is embarrassing to the Minister of Finance who has been given two sets of books by somebody, and I want to know who it is who has embarrassed that minister this way. No minister of the Crown would ever dare to author this document himself. It was done for him and he put his name to it. Well, I don't know who it was. I don't know if it was the Premier or who it was, but back to the drawing board. How can he say one thing on pages 10 and 11 and say something else on the estimated revenues?

Now another thing I don't want to get out of this House, Mr. Speaker, is who's paying taxes in this

[ Page 434 ]

province? There's going to be a tax revolt around this province if they find out who is getting skinned. While the oil companies and the mining companies get away with murder, and the millionaires get away with murder, guess what's going on in his books with the ordinary people? If you don't correct it, Mr. Minister, I may have to go around this province and tell the people. And I want to give you some time to straighten up and fly right. Let's take a look at what's happening. Let us examine what the poor working people, including the press gallery, are asked to pay for, Mr. Speaker — even the working press, who struggle through these figures day and night to come up with the truth, so that they will be printed on the editorial pages of the Vancouver "Fun" and the Vancouver "Pravda"...I mean Province.

The corporate income tax: Is there anybody here on this side of the House who pays corporate income tax?

AN HON. MEMBER: No.

MR. BARRETT: No, you're in the wrong category. If you incorporate yourself.

MR. J.J. KEMPF (Omineca): An attack on the press.

MR. BARRETT: An attack on the press? No, on the editorial pages of the press. The rest of the press is okay, like putting classified ads where there should be provincial news. (Laughter.) You know, you've got to fill up space.

Corporate income tax, 1977: $251 million. How about a little wink there, all you corporation owners over there. You know what's happening, don't you? Don't smile when I get to this part. In 1977, the corporations paid $251 million; 1978, $283 million — an increase of 12 per cent. The corporate capital tax: $35 million, down to $33 million — a 5 per cent drop in tax! The mining companies have had a drop in there.

Personal income tax — that is the rest of those people out there who don't pay attention to politics or to the big high finance of budgets. Guess what they're going to get socked with, gang. Personal income tax in 1977: $815 million; in 1978 $1.1 billion — an increase of almost $300 million or 36 per cent in one year. Oh, wait, wait, wait. Before they all go rushing out challenging those figures: Yes, there is going to be a new transfer system of points of income tax back to the provincial government. Yes there is. And, yes, I'm using percentage figures on a relative basis.

Two points I want to make: One is that the gross figure I'm quoting on personal income tax is much higher — three times higher — than the corporate income tax, so if I am using relative figures on a percentage basis it's to the advantage, on a comparison, to the smaller figure. Then I go on to point out that, yes, there is a transfer, but overall, of 36 per cent.

Let us assume, for advantage of argument to the government, that 16 per cent of that increase comes from the new transfer. It means that in one year they are anticipating an increase of 20 per cent in the revenue from income tax because of the four points they put on last year and burdened the poor working people of this province — and the reporters and others — while the corporations are smiling all the way to the bank. Then we hear that minister say to this House: "Oh, but we need another method of financing." I don't think they need another method of financing; they've been given gifts by this government — gifts by Social Credit.

To base it even further, if the minister was really concerned about financing, I would recall to him that in this very House we passed legislation permitting us to go into our own financial institution.

Now, Mr. Speaker, somebody is attempting to embarrass the Minister of Finance again. Mr. Minister, you have on your desk, and have had on your desk since February of last year, a report prepared by the credit unions of British Columbia to assist in the development of a new financing method for business and individuals in this province. To come in here and decry the fact that there is no alternative financing method when you've kept that report secret on your desk is shameful, Mr. Minister! Absolutely shameful! You've kept that report secret, which was an opportunity for the government of British Columbia to go into alternate financing for ordinary citizens at less than exorbitant interest rates. Will you be ripping out pages 10 and 11 in your speech, or will you be changing the revenue estimates?

You know, Mr. Speaker, just two days ago I spoke to an elderly gentleman who has observed Social Credit for some 25 years. I asked him if he was a masochist — but he denied it. He's observed them for 25 years and he said to me: "Do you know what this budget is, Mr. Barrett?" I said no. He said: "They found this one in W.A.C. Bennett's old files. They dusted it off, and brought it back." They delivered it as their own because they may be deliberately underestimating revenues only to build up a surplus at the expense of programmes to the people and have the minister come in next year, stick his thumb in the pie and say: "Oh, what a good boy I am!" They are using that minister in a manipulative way that I find absolutely embarrassing.

Then they went further, Mr. Speaker, to suggest to him that deficits should be avoided at all costs, and he spent some time talking about that. What a direct threat on his own business, if he only sold cars to everybody who had cash. It can't be done! That's no way to treat a minister. That's no way to push him

[ Page 435 ]

around. That's no way to foist those kinds of archaic ideas and double statements on an honourable gentleman like that minister. Who would dare do that to him? — have him say one thing and then the figures prove something else.

MR. LEA: How much do you get for a used province?

MR. BARRETT: Well, I don't really know. But it embarrasses me to think that a minister of the Crown has been so badly used. I think I can express nothing but compassion for that minister.

There is, Mr. Speaker, a deliberate underestimation in this budget, based on no increase in revenues at all from the projections of last year. There is a deliberate underestimation of $125 million that they should be collecting, which they will not be or will be partly collecting — $125 million necessary for the economic stimulus of this province, which the very minister talked about. That will not be available.

[Mr. Veitch in the chair.]

I find that small comfort to the 92,000 people who are unemployed in this province; and I find it small comfort to those young married couples who are driving by the empty new homes that the Minister of Housing is boasting about; and I find it small comfort to those people who are driving by the used-car lots with now double problems: not only do they wonder whether or not they're getting a good deal, but do they have the money for it in the first place?

One of the most hypocritical things in the speech relates to tourism, and again the minister has been embarrassed. Whoever wrote the throne speech said that vehicle traffic was up all over British Columbia, except on Vancouver Island where you can't bring a vehicle because it costs you an arm and a leg.

MR. D.F. LOCKSTEAD (Mackenzie): And the Sunshine Coast.

MR. BARRETT: And the Sunshine Coast. But vehicle traffic was up everywhere in this province. For a vehicle to travel in this province it must have gasoline. Has there been a reduction in gasoline tax, Mr. Speaker? Not to my knowledge. Gasoline prices are going to go up, and the Minister of Energy, Transport and Communications (Hon. Mr. Davis)...I don't know what he said in the hallway, but I can bet you he said: "I ain't going to stop it." Did you?

HON. J. DAVIS (Minister of Energy, Transport and Communications): Blame the feds.

MR. BARRETT: Blame the feds! Whooee! (Laughter.)

MR. BARBER: Don't tell Pierre that! You are the feds!

MR. BARRETT: Mr. Speaker, I'd ask you to clear the galleries because what I'm going to say next will only be embarrassing to the public. He's blaming the feds when we are one of the provinces that has legislation to control that increase, and all he has to do is give a wink and sign his name to an order-in-council keeping those prices down. And he's blaming Ottawa!

All the reporters put their pens down. I don't want that word to get out to the people that he has the power to save them that money, especially in northern British Columbia, where a certain member has made a whole career on gasoline prices only to get smacked on the head again with another three cents.

You promise to support an increase in the price of gasoline of 10 cents a gallon, my friend, and you'll make it to the cabinet. Just tell them you agree with another dime on a gallon of gas, put in your time in the cabinet and fade out of public life, and you'll coast, partner — through you, Mr. Speaker.

Vehicle traffic is up! Estimated revenue from gasoline tax in 1977 is $175 million. If vehicle traffic is up, that means more gasoline is sold. What is the estimate for gasoline tax collected because more vehicles are on the road? Why, we find an amazing thing! While there is more vehicle traffic and more gasoline sold, the estimate for the amount of gasoline tax has gone down.

MR. KING: How about that!

AN HON. MEMBER: That's flim-flam!

MR. BARRETT: Flim-flam, Mr. Member?

MR. KING: What do you believe?

MR. BARRETT: Flim-flam? From $175 million last year down to $171 million — a deliberate underestimation so that there can be some padding in the budget. That's what it is. That's not flim-flam, Mr. Speaker, that's crass dishonesty, planned, deliberately conceived, and delivered in this House!

You go around peddling the story in this province that you're fiscally responsible. Mr. Speaker, they are fiscal liars.

DEPUTY SPEAKER: Hon. member, as you are full well aware, the word "liar" is not parliamentary language. I would ask you to withdraw it.

MR. BARRETT: Well, Mr. Speaker, I said they are

[ Page 436 ]

"fiscal liars."

Now what's it going to be? I'm confused. They say one thing on one page, and another thing on another page, and I've got to come up with a conclusion.

DEPUTY SPEAKER: Hon. member....

MR. BARRETT: Yes, sir?

DEPUTY SPEAKER: You have been in this House much longer than I and you know full well that the word "liar" cannot be used in this House.

AN HON. MEMBER: When a member is offended.

MR. N. LEVI (Vancouver-Burrard): Which member's offended?

MR. BARRETT: Mr. Speaker, you are correct. (Laughter.) I withdraw that word. They are prevaricators.

AN HON. MEMBER: Order!

MR. BARRETT: Mr. Speaker, I withdraw that, too. In my opinion, they have not told the truth — and you know it, too.

We had the Minister of Recreation and Conservation (Hon. Mr. Bawlf) get up in this House and say: "Poor little Charlie Barber caused all the problems!" I have never known a 26-year-old citizen who has upset more cabinet ministers and got more things done for his riding than that member for Victoria. I have never seen a cabinet minister come in and devote his first major speech on the budget as a cabinet minister, devote his whole time, to a 40-minute analysis of a back-bench opposition member's statements.

What's he worried about? You know that this 26-year-old couldn't possibly match your expertise, wisdom, knowledge and acquisition of wealth. You know, Mr. Speaker, he told us that tourism was going to improve. How does he stand on the fact that the estimate of vehicle traffic gasoline tax is going down?

Mr. Speaker, we see in this budget a deliberate shift from the ability-to-pay concept to the ability to have influence. There is a new concept in taxation: a shift from ability to pay to ability to have influence. The oil companies have influence with that government; the coal companies have influence with that government; the mining companies have influence with that government; the forest companies have influence with that government; the millionaires have influence with that government. The only people who don't have influence with that government are the people who voted for them. The ordinary citizens of this province have been skinned tooth-and-nail, right down to the bone, by a government that is arrogant in office after only 18 months, and that has the audacity to say: "We're Canadians, not socialists."

AN HON. MEMBER: Restraint! Restraint!

MR. BARRETT: Restraint! "Hold yourself in, gang, because we've got to pay off the oil companies, the mining companies, the forest companies and the millionaires. The rest of you are down on the list somewhere. We'll think of it, probably about 60 days before an election."

Perhaps the most dishonest budget that was ever presented in this House was presented by that minister. It's not his fault; someone else did the job. He's been used. I'm sure he has not been driven out of the House; he's gone out to check on the figures himself.

AN HON. MEMBER: He's talking to Williams.

MR. BARRETT: Oh, he's talking to his lawyer. (Laughter.)

AN HON. MEMBER: I can guarantee you he's not ashamed.

MR. BARRETT: Mr. Speaker, this is a totally cynical and political document. After having had these months in office, we would have expected some leadership, some statesmanship, a statement of philosophy, direction and goals in this province, not a kind of hand-wringing, wistful appeal to a laissez-faire, Dickensian type of economics — not Adam Smith, Charles Dickens. That's what's happened: an appeal to some kind of simplistic philosophy that all will be well if the rich will deign to give us a nod and a favour.

The old master-servant relationship that has come forward in this government is typified by this budget. "Restrain yourself. Don't ask for more because those of us at the trough want to have a second time around." Millionaires — gobble, gobble, gobble! Oil companies — gobble, gobble gobble! Mining companies — gobble, gobble, gobble! The government is a turkey. It is a moving feast, Mr. Speaker, ready to be carved up by every single company or individual who has influence. We have not seen the likes of this since the turn of the century when the CPR used to do all the skinning.

Interjection.

MR. BARRETT: Yes, Mr. Member. You yawn and feign boredom. You're safe for another 20 months. Why, you might even fly over Kamloops, open one of the windows in the jet, drop out a cigar butt and say, "I'm thinking of you, folks," 30,000 feet above real

[ Page 437 ]

problems in a stratosphere of ancient history and an attitude that rationalizes every single thing on the basis of: "Oh, after all, all we're doing is fighting socialism." "Fighting socialism" is the catch-word....

DEPUTY SPEAKER: Hon. member, it is my duty to warn you that the three-minute light is on.

MR, BARRETT: It can't be.

DEPUTY SPEAKER: It can be.

MR. BARRETT: The previous speaker took up all my time.

Mr. Speaker, I will try to be as brief as I can, The second 19½ minutes of my speech is now what I'm starting. In the second 19½ minutes, I want to deal with a very, very serious problem: the fact that there is no philosophy with this government. We are moving into very serious times in this country, not the least of which include the threat of separation by Quebec. But let's put that problem aside for a moment.

The real ground of problems in this country, Mr. Speaker, is a common thread of insecurity from coast to coast in this country. A lack of jobs, a lack of economic security and a lack of the thought of a secure future for one's children — that is a thread across this country, whether it is spoken in English, French, Italian, or any other language. What this country desperately needs is a new direction and new leadership by the federal government, by the provincial governments and all the political parties. But to subject ourselves to a narrow, silly, emotional debate on separatism, on the language issue, without addressing ourselves to the basic economic problems of this country, Mr. Speaker, is political failure by our leadership.

We should have from this provincial government a clear-cut statement of philosophy on the economy of this country, on the energy policy of this country, and the development of transportation and infrastructure related to the development of our own resources.

I'll wrap up the last 19½ minutes by saying to you, Mr. Speaker, that I rarely get aggravated in this House, because I have always come to enjoy my time in this great place with a sense of humour. As great men fumble around and events go past us, I've understood that humour is far more important than anything else. But on occasion I lose my humour. When I find that a government has had the opportunity to stand up and say here in this wealthy province, with this additional revenue that we should be collecting, "we will be providing jobs, homes, security and retirement for our people," but instead we find empty promises and punishment to the citizens, I lose my humour. Mr. Speaker, I lose my humour when I begin to realize the devastating effect to small businesses on Vancouver Island, the devastating effect to the individual lives of tens of thousands of citizens of this province.

Mr. Speaker, where is your philosophy? For two years now you've said you're against socialism. We know that! We're for it! The question is: what are you for, other than the mining companies, the oil companies, the millionaires and the privileged?

We want a government with an even hand and fairness, Mr. Speaker, and the people of this province can't expect anything less. I'm ashamed of you, and so is one of the newspaper articles ashamed of you. The thing that disturbs me, Mr. Speaker, is that I agree with the conclusion of that particular article, even though I'm ashamed of you. After you've presented this budget it is obvious that you are shameless.

DEPUTY SPEAKER: The hon. Minister of Mines and Petroleum Resources.

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): Thank you, Mr. Speaker.

MR. LEA: Chobs! Chobs! You got your chob! (Laughter.)

HON. MR. CHABOT: It's always a pleasure, Mr. Speaker, to have the opportunity to speak in the budget debate on behalf of the people I represent in Columbia River. I would hope that as a rookie cabinet minister the normal courtesies will be accorded the new minister. (Laughter.) For the benefit of those people in the galleries, that normal courtesy is silence when the new member is speaking.

AN HON. MEMBER: You were a rookie last year.

HON. MR. CHABOT: It's also a pleasure, Mr. Speaker, to follow an $80,000-MLA. I've never had the privilege, Mr. Speaker, of following a member of the Legislature who spent so much to get elected in this House as the Leader of the Opposition.

MR. KING: Who are you kidding? What about that member? His Dad bought him a seat.

MR. LEA: He had to bring in succession duties to get elected. (Laughter.)

HON. MR. CHABOT: That figure of $80,000 does not include the payoff to one Bob Williams.

Mr. Speaker, I want to refer — and unfortunately the Leader of the Opposition is out and he's watching the TV cameras whirl and talking into microphones right now — to one of the speeches he made just prior to the session opening in Halifax. He was speaking to

[ Page 438 ]

the Maritime School of Social Work, and that was some speech. It was a speech that was untruthful. It was a speech that, in my opinion, was irresponsible as well. You know, the Leader of the Opposition used to be a social worker, Mr. Speaker, and I recall very vividly that when he was the Premier of this province he used to tour the province and tell the people: "We must have brotherly love." Brotherly love — that's what he taught and that's what he wanted the people to accept. But that isn't what he said when he was in Halifax, when he stated: "The Social Credit government will not spend any money to develop resources. Things are getting worse in the province — and I'm loving every minute of it."

HON. W.R. BENNETT (Premier): Shame!

HON. MR. CHABOT: "I'm loving every minute of it!" That was the very statement from a man who had been the Premier of this province, which I consider to be highly irresponsible and not in the best interests of the people of this province. It appears to me, Mr. Speaker, that that member will say almost anything to attempt to gain power in British Columbia again. He's prepared to jeopardize and affect the economy of this province by irresponsible statements.

MR. R.E. SKELLY (Alberni): What about the secret police?

HON. MR. CHABOT: He's suggesting that the people of this province should suffer more and, if they are suffering, he's happy for it.

AN HON. MEMBER: Terrible! Terrible!

HON. MR. CHABOT: It's quite obvious, Mr. Speaker, when one examines the facts of this budget, that that member has no respect for truth or facts — none whatsoever!

Interjections.

HON. MR. CHABOT: For a new minister you're supposed to be quiet. (Laughter.)

This is a strange session, indeed. I have been attempting to find out what's really wrong with the official opposition. There appears to be an air of disunity over there.

AN HON. MEMBER: Wait until Rosemary gets back.

HON. MR. CHABOT: There appears to be an air of disunity. Morale appears to be low. They can't get their act together. They don't seem co-ordinated. There appears to be something wrong. I'm wondering, Mr. Speaker, whether there's a possibility of a power struggle for the leadership of that party.

SOME HON. MEMBERS: Oh, oh! Really?

HON. MR. CHABOT: I'm wondering whether there is. I'm sure that the people of this province are wondering, too. The people in the galleries, when they see the disunity and the disorganization in your ranks, are wondering what's happening over there. You're not fulfilling the role for which you're elected.

AN HON. MEMBER: Where's Rosemary?

HON. MR. CHABOT: I'm sure, Mr. Speaker, that this will be resolved when Rosemary returns from wherever she's at and that she'll be able to pull the troops together and unite that party once again.

Mr. Speaker, unfortunately the member for New Westminster (Mr. Cocke) is not here. I just wanted to make a reference to a statement he made in the House yesterday while he was here. He's here from time to time, I have to admit. But I never cease to be amazed at the kind of attitudes and the kind of statements that flow from that member. You know, he talked about private insurance companies. Mr. Member for Revelstoke-Slocan (Mr. King), up in your riding they think you're pretty amazing, too, in that you haven't gone back to your riding. (Laughter.)

Mr. Speaker, the member for New Westminster suggested yesterday that private insurance companies are flocking back to British Columbia and that there is a gravy train as far as selling auto insurance is concerned.

Interjections.

HON. MR. CHABOT: Mr. Speaker, the member for Prince Rupert (Mr. Lea) is another one.

Interjections.

HON. MR. CHABOT: I mention a gravy train — he's going down to a second-hand store to see if he can sell another chest of drawers. (Laughter.)

It's quite obvious that there is no big gravy train in competing against ICBC in the sales of auto insurance in this province. That's clearly indicated, because only one company has come to British Columbia to offer its services or to attempt to compete against ICBC.

MRS. B.B. WALLACE (Cowichan-Malahat): To whom are they offering it?

HON. MR. CHABOT: The member opposite know full well that ICBC is geared to provide auto insurance at cost to the British Columbia driving

[ Page 439 ]

public. This is clearly reflected in the rates and rebates which are taking place this year. You know, with the financial ability that was demonstrated while the member for New Westminster was on the board of directors of ICBC and the company was wallowing in debt — $181 million of debt — if they had remained in government, that corporation, on the basis of the information and the statements he made yesterday, would be facing a debt load of $500 million today.

SOME HON. MEMBERS: Right on.

HON. MR. CHABOT: That former government, Mr. Speaker, has left a legacy of debt throughout this province. If that member is not stupid, I'm sure that he recognizes the fact that ICBC could not continue incurring hundreds of millions of dollars of debts.

But, Mr. Speaker, I can accept some of these erroneous statements from the Leader of the Opposition and the member for New Westminster with a certain degree of charity. But I certainly can't accept the irresponsible statements from the first member for Vancouver East (Mr. Macdonald) . Last Friday, when talking about M.E.L. Paving and BCR, he said this: "Mr. Speaker, the charge is fraud, criminal possibly, or civil." Mr. Speaker, this member is either ignorant — and I'm sure he isn't — of the facts in this case, or he is being deceitful or dishonest in his interpretation of the facts.

SOME HON. MEMBERS: Right on.

HON. MR. CHABOT: I never cease to be amazed by some of his statements, Mr. Speaker. He goes on to speak about the need to demolish Oakalla. Oh, it had to be razed to the ground, he said. He urged the government to take action to ensure that it was. I recall, very clearly, the whine 14 years ago from the former member for Coquitlam, when he used to talk about the need for the removal of Oakalla because of the conditions to which the people were subjected there — the drippy cow barns, the stench. Would you believe they did nothing while they were in government about closing Oakalla?

You talked in opposition, year after year for the last 14 years that I recall, and you did nothing while you were in government. You stand condemned by your inaction.

AN HON. MEMBER: Right on!

HON. MR. CHABOT: I want to thank the government for its reduction in the sales tax on propane because I recall contacting the B.C. Energy Commission just a couple of years ago on behalf of my constituents in Columbia River to see if there was possibly a way in which they could stop the massive increases in propane costs in British Columbia. It had tripled in price in approximately 18 months to two years, while the socialists were in office. They did nothing about it.

I advocated to the B.C. Energy Commission that they should regulate these massive, unnecessary increases, as far as I was concerned. The B.C. Energy Commission, an arm of the government of the day with political appointees, Mr. Speaker, was unwilling to help the people who were purchasing propane in rural British Columbia or anywhere else. So I am pleased to see that the government has taken action to reduce the tax on propane in British Columbia.

I am now pleased to discuss current activities and future activities in the field of Mines and Petroleum Resources. I am pleased to have the responsibility in that ministry. I first want to deal with an erroneous statement being referred to on an almost daily basis by the socialists across the floor relative to the punitive tax measure they imposed on the mining industry of British Columbia.

The Leader of the Opposition (Mr. Barrett) repeatedly indicates his government imposed on the mining industry a little 5 per cent sales tax, the little sales tax which he indicates every working man in this province pays, and that should be applicable to the mining industry in this province.

MR. BARRETT: It's now 7 per cent.

HON. MR. CHABOT: That is correct. It is now 7 per cent. The Leader of the Opposition is correct.

But the former Premier is careful to evade the true facts of the type of punitive tax measures his government imposed that stifled mining exploration and development in this province. As an example, he fails to talk about the super-royalties that would be applicable on copper if it reached the price of 95 cents per pound. The super-royalty would be virtually equal to the so-called "little 5 per cent sales tax." With an increase in copper to $1.20 per pound, his super-royalty would then be approximately three times the amount of his so-called 5 per cent sales tax, and would escalate very dramatically with an increase in the value of copper.

MR. SKELLY: When did the price reach 95 cents?

HON. MR. CHABOT: A couple years ago it was over 95 cents.

Mr. Speaker, the Leader of the Opposition might be able to fool some of the people with his fictitious interpretation of his tax imposition, but he certainly was not able to fool those people who found it necessary to move to other countries and other regions of this nation to find gainful employment in their professions.

The disruption that they caused in the three and a

[ Page 440 ]

half years his government was in office has denied British Columbians the opportunity to be gainfully employed in the mining industry. It has been difficult restoring confidence to this industry after the turmoil that was generated during the socialist regime.

Coal royalties in the application of the new mineral resource tax, which replaces the Mineral Resource Tax Act, are expected in the next fiscal year to increase revenue in the province by approximately $4 million more than last year. Mining activity is coming back to British Columbia after having reached a dramatic low of exploration expenditure in 1975. As confidence continues to return, activity will further accelerate.

Mineral claims staked in 1976 total over 28,000 as compared to approximately 11,000 claims in 1975. Mr. Speaker, we are on the road to recovery.

AN HON. MEMBER: Hear, hear!

HON. MR. CHABOT: Although coal production in 1976 was down due to labour disputes at Kaiser Resources and Fording Coal, exploration activities accelerated very dramatically in 1976, which resulted in expenditures of approximately three times those of 1975, which totalled $3.5 million. The main interest in coal during 1976 was directed to metallurgical coal in the Peace River and Crowsnest coal fields. Major exploration and development programmes are underway on virtually all of the coal licence areas.

In the Peace River there was activity at the Carbon Creek property, the Sukunka-Bullmoose, Quintette, Cinnabar Peak, Pan Ocean and Saxon properties. B.C. Hydro has been continuing its studies of the Hat Creek thermo-coal deposit as a source of electrical energy. Activity in the east Kootenay centred around the Elco mining property at Elk River; the Crows Nest Industries property at Line Creek; the Kaiser Resources property at Hawsmore Wheeler, their hydraulic underground operation; and at Rio Algom's Sage Creek property.

Activities are in various stages of development throughout the province and 1977, hopefully, will result in decisions being made that will result in the expenditure of billions of dollars that will generate thousands of new jobs for British Columbians.

Mr. Speaker, I have examined the figures of expenditure in exploration and development of hardrock minerals in British Columbia during the last five years and notice that the expenditure decreased very dramatically in 1973, 1974 and 1975. In 1972 the sum of $38 million was expended for this endeavour; 1973, $28 million — a progression; in 1974, $19 million; in 1975, $15.6 million; and from the figures provided for me, in 1976 the expenditure was $18 million. This clearly indicates expenditures for exploration bottomed in 1975, and we are at this time returning to greater interest in mining exploration.

Exploration activity in 1976 reflects a pronounced change in an area of interest in the province. There has been a decrease in exploration activity on Vancouver Island, in the Cariboo and northern Rockies, and significant increases east of Kelowna and in the Goldstream area north of Revelstoke. Exploration activity has accelerated in the Stikine and Skeena areas. Significant increases in uranium prices have generated a number of significant exploration programmes, particularly in the southeastern part of the province.

The major concentration of exploration activity was southeast of Kelowna. Exploration for uranium also took place north of Lytton, in the vicinity of Grand Forks, in the Bugaboo Creek area and east of Atlin. Drilling activity resumed in 1976 on the Stikine copper deposit, after being halted because of the attitude and the punitive tax measures of the former government.

The majority of exploration activity was centred in north-central British Columbia, no doubt because of the extension of the BCR and because of important copper deposits in that region — important gold, copper and zinc deposits east of the Cassiar-Stewart Highway, in the vicinity of Dease Lake. Declining copper prices in the latter part of 1976 have had a very detrimental effect on exploration activity as well as profitability of the existing mines in British Columbia.

This province has some of the lowest copper grades, and therefore must adapt more sophisticated means of production than anywhere else in the world. The mining companies in British Columbia have done a great job in being able to compete on the international market with the low grades of copper deposits which they work. Our ability to further expand copper output is very much dependent upon the level of economic activity of our trading-partner countries such as Japan, United States and Europe. British Columbia has been seriously affected due to the oversupply of copper in the world because copper is over 60 per cent of our mines' metal production. The current price of copper effectively makes most of our copper mines marginally profitable, and the royalty imposed by the former government would have put them in a loss position and would have created vast unemployment in the mines of this province.

HON. J.A. NIELSEN (Minister of Environment): Tell them about the mining areas you are quoting — tell them how they voted in Williams Lake and places like that.

HON. MR. CHABOT: We are fortunate that our export of this production is in the form of concentrates, primarily to Japan. We are also fortunate that the

[ Page 441 ]

next most valuable commodity, molybdenum, is enjoying a strong demand and a record high price. There is no problem with the market demand in prices of other metals and minerals we produce.

Mr. Speaker, 1976 has witnessed the coming into production of the first mine since the former Social Credit government was in office, with the opening of Northair Mines, a gold-silver property which went into production in March, employing approximately 60 employees. The commencement of production at Atlin's silver mine, with approximately 10 employees, clearly indicates that the small mining companies have come back to British Columbia.

The Equity placer copper-silver deposit, which was mentioned by the member for Omineca (Mr. Kempf) the other day, and which is immediately south of his community of Houston, is expected to go into production in 1979 with a work force of approximately 200 employees. Construction is expected to start in 1977, with 300 employees on the construction site for approximately two years. The putting into production of this new mine will cost about $60 million.

The Noranda Goldstream property near Revelstoke is expected to involve capital expenditures of approximately $50 million and generate 200 permanent mining jobs. Construction, hopefully, will start in 1978 and a projected production is for 1979.

The uranium property of Rexspar Minerals and Chemicals at Birch Island will involve capital expenditures of approximately $30 million and will generate 85 new jobs. Although this proposed mine is in the early stages of development and environmental studies, it is expected, provided all environmental conditions are met, to go into production in 1978.

Another mine that is closer to the production stage than the previously mentioned mines is Afton near Kamloops, which involves the capital expenditure of approximately $80 million. It is on schedule in its construction phase with approximately 450 construction workers on site, and is expected to go into production in October of this year with a work force of 350 employees.

At the Afton site will be the first true copper smelter in the province, a new copper smelter, which we drastically need in British Columbia — large-scale smelters — in order to further refine our copper concentrates and generate employment for our people.

Mining exploration, Mr. Speaker, has come back to British Columbia. Government legislation and attitude has generated confidence in the mining community, and with investors, which will result in additional revenue to the government in order to provide social revenue to the government in order to provide social programmes for people as well as employment opportunities. Mr. Speaker, as far as mining is concerned, a new day has arrived in British Columbia.

I would now like, Mr. Speaker, to discuss the petroleum-resource side of my ministry, and I'm very gratified with the exploration activities that are taking place at this time. Yesterday we witnessed a very beneficial sale of oil and gas rights on behalf of the people of British Columbia. The tender-bonus total is $8,795,000 for a total revenue to the province of $8,953,000. This land sale generated the highest average per-acre price in the petroleum industry's history.

As an example of the increased activity and interest in drilling for oil and gas in British Columbia, the average price per acre in 1975 was $11 per acre; in 1976 it increased to $18; and this last sale was $25.50. This increased value reflects itself in the ability of British Columbia providing additional services for people from the additional revenue. In comparing the increased activity between 1975 and 1976, Mr. Speaker, we find that in 1975 there was well authorization approved on 78 wells; in 1976 it increased to 173. Footage drilled in 1975 was 362,777 feet, and in 1976 this escalated to 775,397 feet. Wells spudded in 1975: a total of 53; in 1976: 138. Bonus-bid revenue totalled slightly in excess of $12 million in 1975, and in 1976 exceeded $43 million.

This clearly indicates that the petroleum and natural gas industry has significantly revived its interest in exploration and development within the province in 1976.

MR. COCKE: There's a lot of gas coming from over there!

HON. MR. CHABOT: In view of the fact that very little geophysical work had been done in '74 and '75, few exploration programmes had been developed. However, the industry had displayed a remarkable ability to recover — so much so that there is every indication that the 1976-1977 winter drilling season will be one of the best in our history. The main catalysts for the renewed exploration and development were the increased wellhead price for gas and a lower and more realistic royalty rate for oil, both of which have resulted in increased net-back to the producer and thus a more reasonable rate of return on investment.

Gas production during the first nine months of 1976 was 275 million thousands of cubic feet as compared to 292 million thousands of cubic feet during the same period in 1975. This decrease is due largely to declining reservoir-producing capabilities and to the lack of significant new discoveries.

Oil production increased slightly from 10,885,000 barrels to the end of September, 1975, to 11,124,000 barrels during the same period in 1976. Although it is generally conceded that the prospects for finding

[ Page 442 ]

significant additional new oil reserves are not promising, the future for new gas discoveries is excellent.

Mr. Speaker, I'm pleased with the developments that are taking place in the petroleum industry and in the mining industry of British Columbia. It clearly indicates to me that confidence has been restored in British Columbia to this basic resource industry.

I'm sure that, as time unfolds and as new programmes are initiated, the further development of our second most important industry in this province will reflect itself in allowing the government of this province to generate additional revenue to provide additional social services to people and employment for the people of this province. Mr. Speaker, the programmes and the policies initiated by that former government were detrimental to the people of this province. For a party that suggests that it is always working in the best interests of the people in British Columbia, it denied the people of this province the right to be gainfully employed.

Interjections.

HON. MR. CHABOT: No, they're not alone. They pay only lip service to the people of this province. Their actions clearly indicate what they were doing to the ability of people being gainfully employed.

SOME HON. MEMBERS: Right on.

HON. MR. CHABOT: This budget clearly indicates the confidence in the ability to generate jobs for people in this province. This government is clearly on record as being interested in generating jobs, not destroying jobs, as your government did when you were in office.

AN HON. MEMBER: Budget gang.

HON. MR. CHABOT: Yes, Mr. Speaker, they speak against this budget because they recognize that this budget is in the best interests of all British Columbians.

AN HON. MEMBER: Right on!

MR. R.E. SKELLY (Alberni): I'd like to congratulate the new Minister of Mines (Hon. Mr. Chabot) for his appointment to cabinet, and the other new ministers for their appointments as well. I'm only sorry that some of the deadwood in the cabinet wasn't removed.

I'd like to make a few comments on this speech that the minister just finished. He did all right when he was rereading the annual report of his department, and I'm sure that he's saved Hansard a little time — they won't have to produce his speech today; simply take the pages out of the annual report of his department and delete the references which were essentially political and not true.

The minister said that the present Leader of the Opposition spoke in Halifax, making damaging statements about the economy of British Columbia and statements damaging to British Columbia. No statement made by that member of the opposition could ever have been so damaging as the ones that were made around this province prior to the last election campaign, when present Social Credit ministers were going out lying to the people about what that last government was doing.

SOME HON. MEMBERS: Oh, oh!

MR. SKELLY: If the shoe fits....

MR. SPEAKER: Order, please. You know, hon. member, that it's unparliamentary to accuse an hon. member of the House — even past hon. members of this House — of lying to the people. I'd ask you to withdraw that phrase.

MR. SKELLY: I was talking about people who were involved in the last Social Credit campaign.

MR. SPEAKER: Order, please.

MR. SKELLY: A good many of them weren't elected.

Interjection.

MR. SKELLY: Present ministers included.

MR. SPEAKER: Hon. member, withdraw the imputation that members of this House lied.

MR. SKELLY: Present company excluded.

AN HON. MEMBER: Withdraw!

MR. SPEAKER: No, not a qualified withdrawal, hon. member — an unqualified withdrawal.

MR. SKELLY: I unqualifiedly withdraw the implication that present ministers lied, but they went around the province, Mr. Speaker, saying that the former government had set up a secret police.

AN HON. MEMBER: Is that a lie?

MR. SKELLY: Was that true?

MR. G.V. LAUK (Vancouver Centre): Sounds like a lie to me.

[ Page 443 ]

MR. SKELLY: When we confronted the present Attorney-General (Hon. Mr. Gardom) and asked him whether there was a secret police established in the province and asked him where in the civil service that secret police was located, he refused to answer the question.

Interjection.

MR. LEVI: You spoke on it — yes, you did.

HON. MR. CHABOT: You're lying now.

MR. SKELLY: Mr. Speaker, I ask you to ask the Minister of Mines to withdraw the statement that a member of this House is lying.

MR. SPEAKER: Order, please. There was an exchange across the floor, directed towards the opposition by the hon. Minister of Mines and Petroleum Resources, in which I heard him to say: "You're lying now." I'd ask him to withdraw that statement.

HON. MR. CHABOT: Mr. Speaker, the statement was made on the basis of the member for Vancouver-Burrard (Mr. Levi) suggesting that I made certain statements during the last election campaign which were untrue, and if my calling him a liar offends the member then I'll have to withdraw that. But he wasn't telling the truth, Mr. Speaker.

MR. SPEAKER: Order, please. That is the kind of a qualified withdrawal that's unacceptable to the House, hon. minister. The indication across the floor of the House was clear. I'd ask the hon. minister, under the rules of the House, to unqualifiedly withdraw the imputation of lying.

HON. MR. CHABOT: Mr. Speaker, I withdraw that, that he's a liar.

MR. SPEAKER: Thank you, hon. member.

HON. MR. CHABOT: But he wasn't telling the facts as they are.

MR. SKELLY: May I ask, Mr. Speaker, how much time has been taken from my speech by the minister's accusation that another member was a liar.

MR. SPEAKER: None, hon. member. There's a hold button on the timeclock which is activated by the Hansard staff as soon as an interruption takes place.

MR. SKELLY: Excellent.

The minister has stated that there was a decline in mining activity in the province while the NDP government was in office. Certainly that is true; there was a decline in mining activity throughout the world.

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): Except in the Yukon.

MR. SKELLY: Yes, there were claims filed and refiled in the Yukon, yes. But the member mentioned that some mines had come on stream this year that were under construction and under development. He mentioned Northair Mining Company.

AN HON. MEMBER: One mine.

AN HON. MEMBER: How many shut down?

MR. SKELLY: Northair Mines announced that they would go ahead with development in the fall of 1975, under the NDP government.

He mentioned Afton Mines. When did they announce that they were going ahead with development of a copper mine and a copper smelter in the province? Under the NDP government. Under the New Democratic Party government the major mines that are being developed in this province announced that they would be developing in the coming year.

He mentioned that Stikine Copper had stopped drilling. That was in September, 1972 — two years before mineral legislation and mineral royalties legislation were announced by this government.

He also talked about the increase in drilling ventures in the province, Mr. Speaker. While he didn't say so directly, he implied that that was the result in some change in policy on the part of this government. That's not true. The change in federal tax legislation, which allows the rich people of this province — other provinces and other countries — to invest in drilling ventures as co-venturers and to write it off against their other income, has increased the drilling not only in British Columbia, but more so in Alberta than in British Columbia. Not any result of the provincial government now in office, but the policy of federal government in making tax concessions again to the rich.

I'd like to thank you, Mr. Speaker. I appreciate the opportunity to take part in the debate on the budget speech, although there is certainly very little hope and encouragement to the people of this province for a recovery from the depression that has plagued us in the past few years. Last year the government labelled its budget speech as a recovery budget, but it burdened the people with some of the most predatory tax measures in a single year of any budget in the history of this province. It was that budget and other government charges imposed on the people of

[ Page 444 ]

British Columbia, more than any other reason, that has stalled the economic recovery in British Columbia and has destroyed the natural initiative and vitality of the people of this province, which is the real basis of the economy.

You know, Mr. Speaker, I was frankly surprised by the budget. I expected that after the recovery budget of last year, which had virtually destroyed our local economies in this province by excessive taxes and extremely high government charges, we would see a budget to recover from the recovery, that government would loosen its oppressive grip on the financial affairs of this province, and possibly allow us to recover some of that native economic initiative and vitality I was talking about.

But when the budget came down, there wasn't a single hint of any government effort to stimulate the economy or to encourage citizens to work toward economic recovery. Oh, yes, there was the repayment of campaign debts to the mining companies and there was an admonition to workers to work hard and get paid less. There was a concession to the rich kids of this province which allows them to contribute less and inherit more. There was absolutely no move on the part of the government to loosen its grip on our economy and to allow our economy to expand in its normal fashion, an expansion which was intentionally throttled by that government during its last year's budget.

After the budget was dropped in the House, Mr. Speaker, I attempted to analyse the political motives behind the fiscal measures which were presented — not the economic motives, they were only too painfully clear. But it appears that this government, more than any other government in Canada, has submitted, in its activities in the timing of its announcements and the way it announces new developments, to a public relations regime more characteristic of an American government than a Canadian one in the way it manipulates political opinion.

In the emphasis on restraint and the way they chopped back on social programmes, in those announcements I suspected that the Socreds had somehow been convinced by their own rhetoric in the last campaign, and by the political myths that they had invented as election issues. When I heard the speeches of some Social Credit backbenchers, some of the ministers and the minister who has just spoken (Hon. Mr. Chabot), in reply to the budget and throne speech, I almost accepted the theory that they had been befuddled by their own election myths.

But no, even if the backbenchers are baffled by that type of image-making and political rhetoric, surely this wouldn't affect the high-priced help in the Premier's office whose responsibility it is to draft budgets and make announcements, the type of stage-managers whose job it is to mold public opinion for this government. These people certainly couldn't be convinced by the products of their own creation and their own imagination. There must have been another political motive.

I believe the rationale for perpetuating the oppressive economic regime in this province that was imposed in last year's budget is to delay the effect in British Columbia of the recovery associated with the Carter economic programme in the United States until such a time as it is more appropriate to the Social Credit objective of victory at the next provincial election. To the timing of such public utility investment proposals as the Revelstoke Dam, the Hat Creek proposal, the Kitimat pipeline and coal and natural gas developments in the northeast and the East Kootenays, all of which have been accelerated to be in progress at the time of the next provincial election, even though necessary environmental studies for these projects have been accelerated with what has been termed "indecent haste" by some people in the government service and biologists not associated with the government.... In other words, while economic recovery is being delayed because of the dictates of political stage-management, the environment of this province is being sacrificed to accommodate the political timetable of the Social Credit government.

Let me give you an example in my riding, Mr. Speaker, of the technique which the government has used to delay a necessary social expenditure until such time as it is more politically expedient. Early in the months of 1976 the government announced to the citizens of the Alberni Valley that they were third on the priority list for an intermediate-care centre. The priority list had been prepared not by the previous government, but by senior staff in the Departments of Housing, Human Resources and Health.

On the assurance that their project had priority, and with the plans approved by the various departments and by CMHC, the Alberni Intermediate-Care Society proceeded to obtain an estimate of construction costs. The facility would have been completed and occupied by last fall, filling a desperate need in the Alberni Valley for boarding-home and nursing-home facilities.

But suddenly the minister decided it was time for another study of intermediate care. On June 18, 1976, the minister wrote to the Alberni-Clayoquot Regional District stating that a comprehensive plan for the development of long-term care facilities would be announced in the late fall of 1976, and that for this reason no further approvals would be given to intermediate-care facilities.

Then in September the Minister of Health (Hon. Mr. McClelland) wrote that he would have a programme of long-term ambulatory care ready to announce by the end of 1976. He had already been

[ Page 445 ]

involved in the jargon by that time. It wasn't "long-term care facilities" any more; it was "long-term ambulatory care."

Finally, after a meeting with the Minister of Health in mid-December, at which meeting he was presented with a petition signed by 5,200 citizens, people of the Alberni Valley, all they got was a letter saying that the whole programme had been turned over to the Community Care Facilities Licensing Board, which had been asked to co-ordinate and develop the long-term care programme — more stalls, stalls, stalls.

AN HON. MEMBER: Pass the buck!

MR. SKELLY: In the meantime, the Parksville-Qualicum Beach area, which has the highest percentage of seniors of any population area in the province — 21 per cent of the people in that area are over 65 years of age — is also in desperate need of intermediate-care facilities. They've also been caught in this cynical shuffle between the Minister of Human Resources (Hon. Mr. Vander Zalm) and the Minister of Health over intermediate-care facilities.

When the Minister of Human Resources got up to speak in the budget debate, he was proud of the fact that his budget had been cut back and underspent in the last year. Naturally he emphasized the decline in the number of people on social assistance. He said, Mr. Speaker, that the number of people on social assistance this year had dropped over the last three years. But what he didn't say — he was very careful in his use of statistics — is that the number of people on social assistance has been dropping for the last four years. They dropped every single year under the NDP government. This is simply a continuation of that decline, mainly attributable to programmes that we established when we were in office.

AN HON. MEMBER: Hear, hear!

MR. SKELLY: But this decline in the Minister's budget, Mr. Speaker, is cold comfort to the people in the Parksville-Qualicum area and the Port Alberni area who have been stalled off for over a year in the construction of personal- and intermediate-care facilities, only to be told by the Deputy Minister of Human Resources that the budget for adult-care programmes last year was under-spent by $9 million because the department "did not end up funding some of the nursing-home facilities it had anticipated when drawing up last year's budget."

SOME HON. MEMBERS: Shame!

MR. SKELLY: They had purposefully cut back on adult-care facilities, on intermediate and personal care, and under-spent that budget by $9 million.

What does that $9 million represent in terms of seniors from Port Alberni and from the Parksville area who are being forced out of their homes, their home towns and their circle of friends and relatives into institutions in Vancouver and Victoria; how much in terms of extra hardship for working families, with the senior member desperately needing nursing care, who are forced to carry that extra burden at home, when the minister's adult-care programme is under-spent by $9 million?

What comfort is it to those senior citizens and their families to hear that the Premier and his circle of millionaires, who can easily afford to keep their parents in relative luxury that they themselves will inherit, not as a result of their own efforts, this small group, have declared themselves a dividend from the public trough this year to the tune of $25 million at the expense of needed adult care facilities?

While the needs of senior citizens are being neglected, as a consequence of the dictates of political timing, monumental developments are proceeding under the authority of the Minister of Economic Development (Hon. Mr. Phillips), the Minister of Mines and Petroleum Resources (Hon. Mr. Chabot) and the Minister of Energy (Hon. Mr. Davis), projects that will have serious economic and environmental impacts that will leave serious economic and environmental debts that our children will be forced to bear.

The car dealers and the accountants in the Social Credit caucus are good at manipulating variables that are quantifiable in terms of bucks. But when the frame is expanded to include future generations, and the debt load that we will be leaving to them when non-dollar variables are added to the financial frame, then they're unable to cope.

The Minister of Finance talks in this budget about the theorists who advocate deficit financing and the problem of accumulated debt that will be left to our children. But, at the same time, in the two budgets that he's presented, the gross debt of the province will have been increased by almost 50 per cent over the gross debt of 1975-1976 fiscal year, the last year the NDP was responsible for drafting the budget.

Much of this debt will be accumulated to finance the accelerated growth of B.C. Hydro under the direction of Robert Bonner, with little, if any, overt direction or competent direction from the provincial cabinet. The accelerated growth of Hydro is based on realistic projections in the growth of electrical demand. If Hydro goes ahead with many of the projects under study, our children will find themselves with a surplus of dams, no demand for the power that could be produced by those dams, and a huge burden of debt and interest payments, as well as environmental ruin in this province.

The Minister of Environment (Hon. Mr. Nielsen), who's not here today, doesn't appear to be too

[ Page 446 ]

concerned about all of this. During the last election the present Premier, who's not here as well, promised us a super-Minister of the Environment. Some people expected that he would appoint a real devil's advocate who would take a strong position in cabinet and who would challenge the huge utilities and corporations whose projects endanger the natural environment of this province. We were all disappointed when the present minister was appointed because he knew nothing about the subject and appeared to care even less.

When the McGregor River project was accelerated by B.C. Hydro last year, and when they advised the regional district of Fraser–Fort George that construction would go ahead without completion of the necessary environmental studies — even though the information available at that time suggested the McGregor would destroy the salmon fishery on the Fraser River, an industry employing thousands of people and returning to this province $40 million annually in the gross value of the catch — there was no comment whatsoever from the Minister of Environment.

When Hydro proposed construction of the Site C dam on the Peace River, that would flood thousands of acres of farm land cleared and cultivated by the effort of the pioneer citizens that the member for Omineca talks about time after time in this House, land which will be desperately needed in the next few years, what action did the minister take? Again, no comment.

When the Minister of Mines and Forests (Hon. Mr. Waterland) and the Minister of Economic Development (Hon. Mr. Phillips), after a helicopter tour of the coal development proposals in the Kootenays, proposed that environmental constraints on coal mines should be lifted and that regional district input on developments would "throw the whole process into a disruptive mess," what was the comment from the Minister of Environment? Again, nothing.

Most recently, the Kitimat pipeline proposal threatens the environment of the whole northern and central coast of the province and of Vancouver Island, one of the most productive areas of the province in terms of salmon and halibut production, and one of the most ecologically sensitive areas on earth. And this project has no proven long-term benefit to the people of British Columbia. It's estimated by the consortium themselves that it could produce 150 jobs after the pipeline is constructed.

Interjections.

HON. MR. WOLFE: Session ending soon?

AN HON. MEMBER: No, the Socreds are too cheap to give me a waste basket.

AN HON. MEMBER: Use your mouth.

AN HON. MEMBER: After I read your stuff, I need one.

MR. SPEAKER: Order.

MR. SKELLY: That's okay. The clock is stopped, I understand.

Interjection.

MR. SKELLY: This project, Mr. Speaker, has no proven long-term benefit to the people of British Columbia, only 150 jobs when the pipeline is in operation. But what we are doing is putting our whole coastline in jeopardy in one of the most dangerous areas for maritime navigation on the west coast of America in order to provide a means for an American oil corporation to bypass stringent environmental protection regulations in the United States. We are selling out to an American consortium who would have to face stringent environmental regulations if they asked for approval of a pipeline in the United States.

MR. C. D'ARCY (Rossland-Trail): Who do they represent over there anyway?

MR. SKELLY: The consortium has stated that the project could be completed by April, 1979 — again, getting close to the next election — based on approval to construct by July, 1977, less than six months from now. Engineering studies are in progress right now to ensure that construction can commence immediately once the project has been approved by the National Energy Board.

This government is responsible, Mr. Speaker, for the right-of-way of that pipeline over British Columbia's territory. It is responsible for the shoreline of this province, and the central and northern coast, and the northern coast of Vancouver Island. It is responsible for the foreshore in Kitimat harbour and for approval of the oil off-loading facilities. But what position has the Minister of Environment (Hon. Mr. Nielsen) taken? Absolutely no comment. No comment even though he has jurisdiction for the right-of-way, for the shoreline, and for the port facilities.

MR. KING: I said good morning to him today and he was stuck for an answer. (Laughter.)

MR. SKELLY: He had to consult the Premier. (Laughter.) What position has the Minister of Environment taken on any serious environmental issues? No comment. Has he publicized the studies produced by the consortium on marine and terrestrial

[ Page 447 ]

impacts? Not available. Has he conducted studies of his own, or published critiques of studies done on the consortium studies? Not interested. Not available.

What the minister has done is not to call to account those large multinationals involved in these projects. What he did in the House a few days ago was to attack those organizations such as SPEC — organizations which rely mainly on volunteer contributions of money and effort to act as spokesmen for the environment of this province. He has attacked their judgment; he has denied them access to reports which are available to his department; he has attacked their studies — again, done on a voluntary basis by experts with limited financial resources — without revealing his own sources of information and the basis of his attack on their studies. In short, as the super-minister of the environment he has been a colossal failure.

AN HON. MEMBER: Right on!

MR. SKELLY: He has environmental jurisdiction in name only, and he has sold himself out to those heavyweights in the cabinet, and outside the cabinet, in order to hold on to his job. Mr. Speaker, last fall when the Premier was considering changes in the cabinet I wrote to him and I asked him to consider the removal of Mr. Nielsen and to have him replaced by an independent environmental ombudsman whose duty it would be to defend the future generations of British Columbia and their interest in the preservation of our environmental assets, and who would have the power to produce independent environmental impact studies and the duty to hold public hearings before any major development is permitted.

I got a reply from the Premier saying: "Thank you for your comments." The present minister has shown no interest in defending the environment. He's got no credibility in cabinet, which is dominated by developers. As a result, future generations in this province will be burdened with an environmental deficit and a lower quality of life, as well as a colossal financial debt that will be imposed by major public utility and mineral developments.

I again call on the Premier to sack that minister and to consider the alternative of an independent environmental ombudsman. I also call upon the government, as some of their backbenchers have had the courage to do, to take an unequivocal stand in opposition to the supertanker route through Dixon entrance and Hecate Strait to Kitimat.

Mr. Speaker, the performance of this government in fiscal, social, and environmental areas has been disastrous to the people presently living in the province, people who have been looking for strong political leadership to encourage economic recovery in British Columbia without mortgaging the quality of their children's lives in financial, social and environmental terms. This budget speech indicates that the leadership the people of this province have been seeking is lacking and has been substituted for political image-making. It is not likely to be restored until the New Democratic Party is returned to office in the next provincial election.

Mr. Mussallem moves adjournment of the debate.

Motion approved.

Hon. Mr. Chabot moves adjournment of the House.

Motion approved.

The House adjourned at 12:39 p.m.