[ Page 1021 ]

CONTENTS

Routine proceedings

Oral questions.

Backlog of WCB cases. Ms. Sanford — 1021

Government controls in forest industry. Mr. Gibson — 1022

Use of pep pills by long-distance truckers. Mr. Wallace — 1023

Human Resource's minister's statement about civil servants. Ms. Brown — 1023

Payment of gratuity to public servant. Mrs. Dailly — 1024

Subsistence hunting permits. Mr. Nicolson — 1024

ICBC collection of premiums. Mrs. Wallace — 1024

Committee of Supply: Ministry of Finance estimates.

On vote 2.

Hon. Mr. Wolfe — 1025

Mr. Macdonald — 1026

Mr. Stupich — 1027

Hon. Mr. Wolfe — 1030

Mr. Wallace — 1032

Hon. Mr. Wolfe — 1033

Mr. Barber — 1034

Mrs. Jordan — 1039

Hon. Mr. Wolfe — 1042

Mr. Barber — 1043

Mr. Wallace — 1047

Hon. Mr. Wolfe — 1048

Mr. Nicolson — 1050

Mr. Cocke — 1051

Hon. Mr. Wolfe — 1051

Statement

Appointments to Workers' Compensation Board. Hon. Mr. Williams — 1052

Routine proceedings

Committee of Supply: Ministry of Finance estimates.

On vote 2.

Mr. Cocke — 1053

Mr. Nicolson — 1054

Mrs. Wallace — 1055

Hon. Mr. Wolfe — 1055

Appendix — 1056

THURSDAY, FEBRUARY 17, 1977

The House met at 2 p.m.

Prayers.

MR. SPEAKER: Hon. members, it is with regret that I bring to your attention the death of a former member of this Legislative Assembly, Jacob Francis Huhn, who sat as a member in this House representing the constituency of North Peace River from 1960 to 1966. He passed away Tuesday at his home in Fort St. John. With your permission, I will see that an expression of sympathy goes out to the members of his family on behalf of the members of this Legislative Assembly.

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, I would like to present to the members of the House and those in the galleries today the Hon. Romeo LeBlanc, the federal Minister of Fisheries and the Environment, who is our guest today and meeting with members of my ministry.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I would like to share the official welcome of the government to Minister LeBlanc. Beyond that, I would like to welcome him personally as an old friend and, at the risk of being embarrassing to him, one of the finest men I have ever met in public life.

MR. A.B. MACDONALD (Vancouver East): M. l'orateur, je voudrais dire quelques mots au grand Ministre de Poissons. Bienvenu, et gardez votre dos! (Laughter.)

HON. P.L. McGEER (Minister of Education): Mr. Speaker, I take great pleasure this afternoon in introducing in your gallery a class of UBC political science students who are with their professor, Dr. Jerry Christianson. I hope that the students won't be bored this afternoon by too many lectures from the opposition.

MS. K.E. SANFORD (Comox): I would like the House today to welcome the delegation from the B.C. Federation of Labour. The members from that federation have been meeting with members of all sides of the House all morning and expressing their very real concern surrounding the Workers' Compensation Board. Would the House make them welcome?

MR. W.G. STRONGMAN (Vancouver South): Today it gives me a great deal of pleasure to introduce a group of students from the Northwest Baptist Theological College. I would ask the assembly to make them welcome.

MS. SANFORD: In addition I have two classes that will be attending the House this afternoon from Georges P. Vanier Senior Secondary School at Courtenay. At 3 o'clock we will be joined by a journalism class from that school, accompanied by their teacher, Mr. Brent Reid, and their sponsor, Ginny Cleary. But seated in the gallery right now is a class sponsored by Crown Zellerbach from Georges P. Vanier Senior Secondary School, accompanied by their teachers, Olive Scott and Delbert Doll. I wish the House would make them welcome.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): Mr. Speaker, the priest who led us in prayer today at our opening is a very highly regarded member of the church in the greater Victoria area. I would like the House to welcome Father Hanley of St. Joseph's parish in Saanich.

MR. D.G. COCKE (New Westminster): Mr. Speaker, visiting with a number of MLAs in the House today are senior executive members of the Canadian Universities Faculty Association of B.C. I would hope that everyone will assist me in welcoming them into the gallery, as I notice they're here. I do hope that the Minister of Education (Hon. Mr. McGeer), particularly, welcomes them to the gallery today.

HON. L.A. WILLIAMS (Minister of Labour): Mr. Speaker, I would ask the members to join me in welcoming Mr. George Johnston, president of B.C. Federation of Labour, Mr. Len Guy, secretary-treasurer of that organization, and a group of delegates from B.C. Federation of Labour who met with me and will meet with others today to discuss matters that are important to that federation.

Hon. Mr. Nielsen tabled, with leave, the Fraser River Upstream Storage Review Report.

Oral questions.

BACKLOG OF WCB CASES

MS. SANFORD: Mr. Speaker, my question is to the Minister of Labour regarding the Workers' Compensation Board. Would the Minister of Labour advise us how many cases are waiting to be heard before the board of review at this time?

HON. MR. WILLIAMS: Mr. Speaker, I can't give the precise number at this time, but within the past month the number has been 1,100.

MS. SANFORD: Mr. Speaker, I wonder if the minister could tell us how long a time the backlog

[ Page 1022 ]

represents. In other words, how many months back does this 1,100 represent?

HON. MR. WILLIAMS: Mr. Speaker, I've asked for a specific breakdown on that matter. The information is at my office now and I'd be pleased to table a return because the number of cases over a period of time varies greatly from half a month on up. That's why I'll give you a complete breakdown as to the number of cases per month that are awaiting consideration.

MS. SANFORD: I'm wondering if the minister is prepared to appoint at this time an additional board of review in order to begin to handle that backlog.

HON. MR. WILLIAMS: Mr. Speaker, I'm seeking a fourth chairman for the boards of review and I hope to be able to make the appointment very shortly.

MS. SANFORD: As a final supplementary, Mr. Speaker, I'm wondering if the minister could also advise us if he has consulted with labour groups prior to making the recommendations with respect to the appointments to be announced tomorrow. If so, who were they?

HON. MR. WILLIAMS: I wonder if the member would be good enough to repeat that question so I can understand specifically what she wants.

MS. SANFORD: Mr. Speaker, I wonder if the minister would tell the House whether or not he has consulted with labour groups with respect to recommendations that they might have for appointments to be announced tomorrow replacing those who were fired on Wednesday — yesterday — at the Workers' Compensation Board.

HON. MR. WILLIAMS: Mr. Speaker, the member is wrong in some of her assumptions. I didn't fire anybody yesterday — that's not my authority. I'll be making an announcement later this afternoon with respect to the composition of the new board.

Specifically, in answer to your question as to whom I consulted with, I did not consult with any labour groups, but I did speak to people in the trade union movement.

MS. SANFORD: I'm wondering then if the minister consulted with employers' groups — specifically, the Employers Council or any other employers' groups.

HON. MR. WILLIAMS: The answer is no.

GOVERNMENT CONTROLS
IN FOREST INDUSTRY

MR. GIBSON: Mr. Speaker, I have a question for the Minister of Forests about an apparent telegraph signal that he sent to the forest industry through the February 14 number of the authoritative Beale's Newsletter. The quote here says: "Waterland tells us there's one sector of the forest industry that worries him." Then it quotes the minister: "But if this particular part of the industry fails to play the game, there will be government control and I will implement it."

Would the minister identify, for the benefit of the House, the sector of the forest industry that he plans to put under government control?

HON. T.M. WATERLAND (Minister of Forests): Mr. Speaker, the entire forest industry is under the control of the provincial government in one way or another. I don't know if you could call it a telegram or not, or a telegraph signal. I was speaking with Mr. Beale of Beale's Newsletter, and I don't think that I said any particular sector of the industry. I said there are individual corporations within all sectors of the industry which are not as good corporate citizens as they could be, and if they don't improve their corporate citizenship then those existing rules would have to be enforced more stringently with them than they probably have been in the past.

MR. GIBSON: A supplementary then, Mr. Speaker, because this goes further than I thought it does. Does the minister mean that all sectors of the industry are going to be put under tighter government control?

HON. MR. WATERLAND: Right now, Mr. Speaker, all sectors of the industry are under government control. Those companies whose corporate citizenship isn't what it should be are under the same controls as everybody else, but the....

MR. COCKE: Who decides?

MR. SPEAKER: Order, please.

HON. MR. WATERLAND: The rules and regulations under which the industry operates are enforced on all parts of the industry. Some sectors of the industry attempt to get beyond the controls which are in existence and, as the government becomes aware of them, then we enforce them.

MR. GIBSON: A supplementary then, Mr. Speaker: is the minister saying that there will be selective enforcement of regulations based on his concept of corporate citizenship?

[ Page 1023 ]

HON. MR. WATERLAND: No, Mr. Speaker, the minister did not say that at all.

USE OF PEP PILLS
BY LONG-DISTANCE TRUCKERS

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, to the Minister of Education, responsible for ICBC, who also happens to be a physician and would have an interest in this question, I'm sure: in light of the fact that Mr. Keith Godfrey, the ICBC traffic research manager, stated to the select committee of the Ontario Legislature on highway safety that some trucking companies provide their drivers with pep pills to keep them awake on long hauls, and in view of the vehement denials by the B.C. trucking industry that this practice does go on, can the minister tell the House if ICBC, in its role as an insurer, has come across such cases? If so, how many?

HON. MR. McGEER: Mr. Speaker, I'm not aware of any but I'll take the question as notice and get the information.

MR. WALLACE: A supplementary, Mr. Speaker: since this is a pretty serious allegation and rather a blanket condemnation of one of the important industries in the province, will the minister be holding any personal conversations with Mr. Godfrey when he returns from Ontario?

HON. MR. McGEER: I'd be pleased to do so.

MR. WALLACE: Could I ask the minister if Mr. Godfrey was in any way appearing before the Ontario committee of the Legislature as a representative of ICBC or of any arm of the British Columbia government?

HON. MR. McGEER: Not to my knowledge, Mr. Speaker, but I'll take that as notice, too.

HUMAN RESOURCES MINISTER'S
STATEMENTS ABOUT CIVIL SERVANTS

MS. R. BROWN (Vancouver-Burrard): My question is directed to the Minister of Human Resources. Would the minister tell this House who authorized him to threaten the civil servants of this province with being uprooted and sent to Fort St. John and Dawson Creek if they criticized the government?

HON. D.M. PHILLIPS (Minister of Economic Development): What's wrong with the north? Are you against the Peace River country?

MR. SPEAKER: Order, please. The question is irregular in that it draws an assumption, hon. member. Would you please rephrase the question so that it's in a parliamentary manner?

Interjections.

MR. SPEAKER: Order, please. The hon. first member for Vancouver-Burrard has the floor.

MS. BROWN: I'm defending you. The minister does not even know who his friends are! Mr. Speaker, I am quoting from a statement made by the hon. Minister of Human Resources — who makes statements on everybody's department over there — to the Chamber of Commerce yesterday, indicating that any civil servants who criticized in his department would find themselves in Dawson Creek or Fort St. John. I want to know on whose authority he's threatening the civil servants of Victoria. That's all.

HON. W.N. VANDER ZALM (Minister of Human Resources): I wish I had been there. That sounds like a good speech. I never heard anything like that. I don't know where the member got the information. I really don't. There was nothing like that suggested.

MS. BROWN: The Daily Colonist, that great newspaper, Mr. Speaker, that fights for the people of this province, dated February 17, 1977: "Chamber Laps Up Talk." There it is, Mr. Speaker. Now is he accusing that great newspaper of not telling the truth in reporting his speech, Mr. Speaker? That's my supplemental.

HON. MR. VANDER ZALM: I haven't read the article. I don't know what the article says but I don't believe it says anything like the member has mentioned.

Interjections.

MR. SPEAKER: Order, please.

MS. BROWN: When one takes into account the various groups that have been attacked by that member, to be attacked by that minister, too, is indeed a rare honour. So I am not disturbed by the fact that he accuses me of playing games with the truth.

However, the exact quote is: "'There is room in my ministry for people poking fun at the minister. There's room in Fort St. John, there's room in Dawson Creek....' he said, interrupted by loud laughter and applause." Now were you misquoted?

MR. SPEAKER: Could I draw to the hon. member's attention Beauchesne at page 147? It is

[ Page 1024 ]

irregular to inquire whether statements made in a newspaper are true, hon. member.

PAYMENT OF GRATUITY
TO PUBLIC SERVANT

MRS. E.E. DAILLY (Burnaby North): Mr. Speaker, to the hon. Provincial Secretary, 16 days ago the Provincial Secretary took as notice my question on the gratuity which was paid to Mr. Broadbent and informed the House that she would give us a full report on the reasons for that payment. Could we have it now?

HON. G.M. McCARTHY (Provincial Secretary and Minister of Travel Industry): Mr. Speaker, when the information is available to me, it will be filed in the House.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: Coverup!

MR. SPEAKER: Order, please.

MRS. DAILLY: A supplemental. She says "when the information is available." As I've waited 16 days, could she give me some determined time date when we can expect this?

HON. MRS. McCARTHY: I was trying to save time for the hon. members so more questions could be asked on the floor of the House.

SOME HON. MEMBERS: Oh, oh!

HON. MRS. McCARTHY: Let me explain to you. The person who processed the order that the hon. member brought to the attention of my ministry was away, and that person is going to file the report on return. When that information is available we will certainly bring it before the House.

SUBSISTENCE HUNTING PERMITS

MR. L. NICOLSON (Nelson-Creston): A question to the Minister of Recreation and Conservation concerning subsistence hunting permits normally granted to native persons at this time of the year: has the minister instituted a new policy of requiring that these people submit to a needs test at the Department of Human Resources before his department will grant a subsistence hunting permit?

HON. S. BAWLF (Minister of Recreation and Conservation): I thank the member for the question. I'll have to take that as notice.

ICBC COLLECTION OF PREMIUMS

MRS. B.B. WALLACE (Cowichan-Malahat): Mr. Speaker, my question is for the Minister of Education relative to ICBC. I myself and other members of our caucus have received literally hundreds of complaints from car owners who are receiving bills for additional premiums that they are supposed to owe on last year's Autoplan premium.

MR. L.B. KAHL (Esquimalt): File the letters.

MRS. WALLACE: They have receipts that indicate these premiums were paid in full. Why are they being billed a second time, Mr. Minister?

HON. MR. McGEER: Mr. Speaker, these would be cases where the amount put on the form and charged by the agent was incorrect. So in cases where people overpaid, money is returned; in cases where they underpaid, then they pay the same as everybody else. We do our best, but we can't be responsible for all the errors that are turned in.

MRS. WALLACE: I have a supplemental, Mr. Speaker. You know, that sounds very fine on the surface, but in the cases that I have had pointed out to me, the figures that they paid last year and the figures they are being billed for this year are relative. If they have paid, say, for six months last year or paid half the premium that this year's premium is, they're still being billed for $30 to $60 additional for that half-year. It doesn't make sense, Mr. Minister. Would you look into it?

HON. MR. McGEER: Please send any that are incorrectly billed to me and we'll get them straightened out.

MR. GIBSON: On a point of order, Mr. Speaker, during the question period the Minister of Labour (Hon. Mr. Williams), if I understood him correctly, indicated that he would be making a statement on the Workers' Compensation Board later on this afternoon to a press conference. I wonder if leave might be granted for him to make the statement to the House right now, as it should be.

MR. SPEAKER: Hon. member, speaking to your point of order, you know it's irregular and out of order for one member to ask leave on behalf of someone else to make a statement to the House.

Orders of the day.

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

[ Page 1025 ]

ESTIMATES: MINISTRY OF FINANCE
(continued)

On vote 2: minister's office, $95,034 — continued.

HON. E.M. WOLFE (Minister of Finance): Having used all of the list of expletives that were distributed yesterday, I'm surprised that we are once again back here today. However, as a backdrop for further discussion of the estimates of the Ministry of Finance, in which a budget has been presented with estimates balanced with expenditures, it might be interesting to challenge the members of the House to see if they can recognize who said these words:

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that that option no longer exists and that, insofar as it ever did exist, it only worked by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment as the next step. That is the history of the past 20 years."

Mr. Chairman, that statement was made within 30 days, and I would ask any member to offer whom the quotation comes from.

MR. N. LEVI (Vancouver-Burrard): Karl Marx's grandson.

HON. MR. WOLFE: It comes from Prime Minister James Callaghan, the leader of the Labour Party government in Great Britain.

Mr. Chairman, yesterday the federal minister, the Hon. Robert Andras, tabled the estimates for the coming year in the House of Commons. Having had a brief look at these figures and news reports on them, I thought a comment might be appropriate on behalf of the Department of Finance.

In presenting the federal budget estimates in the House of Commons yesterday, the Hon. Robert Andras, president of the Treasury Board, reported a saving of $970 million in the 1977-78 expenditures for the federal government under the new federal-provincial cost-sharing agreement. Mr. Chairman, this saving comes from the fact that the federal government is no longer meeting its obligation towards hospital and medicare expenditures by the provinces entirely through cash payments from its budget. Rather, it is replacing some of the cash payments with transferred personal income tax points — namely 8.143 points. Federal revenue from the personal income tax will be accordingly reduced.

While on the face of it it would seem the reduction in expenditure is offset by a reduction in revenue, I pointed out yesterday in the House in reply to a question from the Member for Oak Bay (Mr. Wallace) that the federal government is unilaterally reducing its contribution from the 50-50 principle of sharing which they initiated in the first instance and is leaving the provinces the major responsibility of risk and coping with the excessive cost increases in the established programmes of hospital and medical care and post-secondary education.

What is not evident in the reports from Ottawa on the federal estimates for 1977-78 is the payment under the revenue guarantee to the provinces. While the federal government did meet the provinces part way on this matter, the saving for the federal government between the old and new arrangements on the revenue guarantee is about $500 million in 1977-78, of which the loss to B.C. is approximately $60 million.

Mr. Chairman, throughout the entire discussions on these new fiscal arrangements, the provinces consistently hit at this fiscal dividend the federal government was obtaining at the expense of the provinces as a result of the federal proposals. In a nutshell, Mr. Chairman, what we're saying is that the ongoing viewpoint of the impact of these changes causes a dividend in favour of the federal government in lieu of the gap which will widen between the exposure to provincial costs in these programmes as opposed to the potential money being transferred and the growth allowed for it.

So in viewing the initial statements made yesterday with regard to the reduction in the federal estimates of $970 million, I'm simply saying that until we see the revenue side and know what compensating difference there is in the transfer of tax points and know also what has been worked into this in lieu of revenue guarantee, it is difficult to view whether this is to the advantage of the provinces or not. At the outset it would seem doubtful.

Mr. Chairman, following on some questions yesterday, I'd like to offer some brief information regarding grants in lieu of municipal taxes in the place of federal or provincial government buildings. I think there is a fact of life here which is not appreciated in the debate which takes place from municipal leaders in the ongoing discussion about the 15-mill grant. The point I wish to make is that although assessments were frozen beginning in 1974 for all other purposes, they have not been frozen for the purposes of the valuation of provincial government buildings.

As an illustration, the grants between 1974 and 1976 in lieu of provincial government buildings have increased 88 per cent from $1.4 million in 1974 to $2.699 million in 1976. The reason for this is that the full assessed values of provincial land and buildings have been revised in each year. The comparable figures are: in 1974 the full assessed values of provincial land and buildings is $118.3 million; for 1976, it is $214 million. That's an increase in these assessed values of 81 per cent. I think this fact has to

[ Page 1026 ]

be appreciated. What it amounts to, Mr. Chairman, is that with the freezing and other tax assessment levels, the impact of these increased assessments is that rather than viewing it as the 15-mill rate presently, it's more like 28 to 30 mills, on a comparable basis.

Mr. Chairman, one of the members — the member for North Vancouver–Capilano (Mr. Gibson) — yesterday brought up the subject of negative income tax. For the benefit of the members of the House, there is some information here that might be of value in support of the ongoing review of this matter. We all know that the proposition for guaranteed annual income, using a negative income tax system, presupposes the removal of a multitude of other plans and social benefit plans across Canada, the administration core of all of this, and the saving in the staff structure. So breaking this down into three major elements, first of all, there are an estimated 200 federal Acts which, in one way or another, provide transfer payments to individual Canadians. Even on the provincial level, we have programmes as diverse as GAIN or the shelter allowance for elderly renters which are also forms of transfer payments. So it will be necessary to examine many pieces of federal and provincial legislation with an eye to their individual appropriateness for integration into a guaranteed-income scheme.

First of all, there are the income-maintenance pieces of legislation. These would be integrated into a guaranteed annual income scheme. Programmes here include, at the federal level, family and youth allowance, old-age security and guaranteed-income supplements. In 1974-1975, Ottawa paid out approximately $5.2 billion to 5.4 million recipients, an average of $971 per recipient.

In the case of social insurance legislation, these programmes include unemployment insurance, workers' compensation, Canada Pension Plan and, during the same period, the federal government paid out to Canadians $1,610 per recipient. Then under the heading of the Canada Assistance Plan, under the proposed social services Act, with few exceptions, all allowances paid through the Canada Assistance Plan would be stopped and incorporated under such a guaranteed annual income plan. So during the same period of time, 1974 to 1975, an approximate $800 per recipient was paid to Canadians. I think, Mr. Chairman, this will primarily provide some background statistics in support of the kind of money which was paid out, on average, across Canada some two years ago now.

Mr. Chairman, a final matter which I don't think was appreciated in comments made yesterday is the nature of the economy and the retail business during the past 10 months. I reported to this House yesterday that although arguments might be to the contrary insofar as the impact of taxation and other policies put in place by this government are concerned, in fact over the past 10 months in British Columbia retail sales showed an overall growth of 12.1 per cent. Then in the case of retail sales, excluding food, in a 10-month period ending December, these showed an increase of 13.0 per cent. Then in the case of department store sales — we have heard some gloomy predictions about department store sales — there was an increase of 10.6 per cent. These are on real-dollar terms as obtained from Statistics Canada. Then we have retail sales for motor vehicles in the same 10-month period, ending December, 1976. Here there was an increase of 17.3 per cent. Lastly, Mr. Chairman, we have here provincial government revenues for retail sales tax, adjusted to 5 per cent, eliminating the tax increase, wherein we reveal that in a 10-month period ended January 31, there was an increase of 9.14 per cent.

MR. MACDONALD: Mr. Chairman, I have two or three questions to the minister relating to his responsibilities as Minister of Finance in making representations when he attends federal-provincial meetings of Finance ministers. The questions will be very brief. I'm referring particularly to the Canadian income tax laws which, I suggest to the minister, are very inequitable in that they provide dodges and escape hatches for wealthy people in Canada with the result that the ordinary people of Canada pay too much tax.

I am just going to refer to a couple of examples right now, and ask whether the minister has made representations about them. One of them is that wealthy people who have made their money in British Columbia and in Canada depart for more than 183 days every year — because if they sojourn in Canada for fewer than 183 days they are not residents any more — for warm climes and tax shelters, and don't pay their proper tax, although they are fully Canadian and they have made their money here, into the national treasury of which we get a part. That's the definition of "residence." It is very loose and means that all kind of people — a handful, but these are big fortunes — have built a residence outside and transferred their investments outside of the province. And while they are still really British Columbians or Canadians, they don't pay on their taxable income. They still have to pay on what's left in Canada, true, but they don't pay regular income tax. It's a dodge and a shelter. I am asking the minister whether he has made representations on that particular matter at any federal-provincial conference, and what his opinion of it is.

The second thing is a very good programme for those who need a first house. That is the Registered Home Ownership Savings Plan. But there is a dodge there, Mr. Minister, and I wonder if you have taken this up with your counterparts in Ottawa. The dodge is that wealthy people who have their home — and it

[ Page 1027 ]

might be jointly owned between them and their wives — sign a quitclaim of this home in favour of their wives. But they have plenty of assets. They quitclaim it to their wife so that they don't have a home. The result is that they, of all people, qualify for the $1,000 deduction for 10 years, making a total of $10,000 under the Registered Home Ownership Savings Plan. Now the plan is good for those people who need homes. But when it becomes a tax shelter for those who already have a home and lots of money, then I say that's a dodge, and the minister should be taking that up with Ottawa. I would like to ask his opinion on that, which is a very widespread practice at the present time in British Columbia and in Canada. In other words, a beneficial social programme is being taken advantage of by wealthy people who don't need that programme, in effect as a tax dodge. I want to know the minister's opinion about that.

Question No. 3: I am asking the minister in relation to income tax refunds which are sold off on Granville Street and on Hastings Street, as the minister knows, at a tremendous discount to the moneylenders. Lots of people are taking discounts of 50 to 60 per cent, and losing, in effect. They are poor people who need the money right away. They are selling their income tax refunds for cash, discounting them to moneylenders at a substantial 50 to 60 per cent loss to the individuals. Has the minister at federal-provincial meetings taken up the position that all that has to happen in this field of undoubted exploitation is that the Ministry of Finance in Ottawa has to make the income tax non-assignable? It's a very simple turn of the pen, like a UIC cheque. Has the minister taken up that position with Ottawa so that we wouldn't have to try, far less effectively, to do it through our consumer protection laws? If so, what is the federal response? Those are the three questions.

MR. D.D. STUPICH (Nanaimo): I notice that the first member for Vancouver East, Mr. Chairman, is asking if the minister wants to respond, I am quite willing to....

MR. CHAIRMAN: I have to recognize the members as they stand, sir.

MR. STUPICH: Okay, Mr. Chairman. I have had an opportunity to review the Blues for part of yesterday afternoon, and I would like to comment on some of the items raised in the Blues. First, just a partial response as opposed to the minister's quotation from Prime Minister Callaghan about "spending our way to prosperity." I'd like to renew — not my challenge, Mr. Chairman, this time — my invitation. I think it would be good for the minister, good for me, and certainly good for the public, if they had an opportunity to participate in discussions between the minister and myself about several things in the budget, such as this business about whether it should be called "deficit financing," the way in which we manage the provincial economy, the importance of government action — that is government financial and economic dealings, and the importance to the provincial economy. I would certainly welcome an opportunity to enter into a public discussion with the minister on these issues.

The matter of succession duties I think is something on which I would welcome an opportunity — not a challenge, Mr. Chairman, this time, but an invitation if you would accept that — to discuss these matters in a more public forum where members of the general public and the press would also have an opportunity to enter into the discussion with us about the wisdom of government action or government inaction in these different areas — and in other areas if he likes — and the wisdom on behalf of the people of British Columbia.

I note in the Blues from yesterday that the minister, in talking about the reorganization of his department, later on, I believe, credits at least some of this to recommendations from the B.C. Savings and Trust report that was finally paid for by the government. He mentioned the cost in one place. It was around $140,000 or something like that. I got the inference when he gave that figure that he thought it was a very expensive report.

It would seem to me that if any single one of these recommendations was a result of having studied that report, then perhaps any single one of these recommendations, or any single one of these actions, would have more than paid for the cost of the report. I'd like some comment from the minister as to whether or not he thinks the report was worth the money that was put into it, or whether it was worth substantially more or less, or what. I believe that simply dropping that figure and leaving, in my mind, from the way he said it, the impression — perhaps I just have a suspicious mind — that it cost us more than it should have to get that report....

In my own opinion — and I haven't had the advantage of having seen the report — from knowing the kind of people who were on that committee and the kind of responsibilities that we gave to them, I would think that the report was very worthwhile. But I would welcome the minister's comments. He's certainly in the best position to discuss that since he has had an opportunity to read what he described last year as a two-foot-thick report.

He's chuckling. I don't know whether it was or not, but he did say that it stood two feet high. Now whether that was on end or flat wasn't said — it's not in Hansard.

HON. MR. WOLFE: We're on metric now.

[ Page 1028 ]

MR. STUPICH: Well, I'll let you translate that while I'm continuing to review some of the comments in the Blues. I'm reading again from the Blues: "In the past year Treasury Board has been meeting on a regular basis and giving careful scrutiny on all requests for expenditures." I'm wondering just when that process started. It says during the last year, but I hardly think it could have taken place during the whole year.

I suppose it's not quite explicit from this reading whether Treasury Board reviews these requests after or before the fact. I'm sort of guided into asking that question, Mr. Chairman, because of a newspaper story as recent as November 23, 1976. The headline is: "Cominco Gets Big Rebate." But why? The Minister of Mines and Petroleum Resources (Hon. Mr. Chabot) was asked, and he said well, it happened before he came so he doesn't know the reason. The Minister of Finance said he didn't know the reason either although he signed the order-in-council approving it and although, presumably, Treasury Board had looked at it before, or was going to look at it afterwards, or was not operative in that particular manner at that date.

Nevertheless he said that he would find out and he did. He found out the next day and told us. But I just feel that if the staff was working at that time, they let him down rather badly by not informing him why he should sign this order for almost $1 million. If it wasn't working at that time, of course, that's the explanation. Hopefully, the next time the minister approves a payment of $1 million, or any sum, he will know why that particular payment was being approved.

Mr. Chairman, as the minister anticipated, we did get into a discussion yesterday of quarterly reports. I think we perhaps haven't heard all we're going to hear about quarterly reports yet. I welcome what the minister said in his opening remarks about quarterly reports and the importance of them. "With this publication, residents of British Columbia have the most up-to-date reports in all of Canada on their government's finances." Well, that would be great, Mr. Chairman, if we had them and if they were up to date. Certainly, as I pointed out yesterday, I thought the first quarterly report came out in very good time, the second one in nothing short of miraculous time but the third one we're still waiting for.

He hasn't really told us, although he did talk about it yesterday in answer to my question, about some of the reasons for it being late. But he has not given any indication as to just when we might expect to see the third quarterly report. He did say, as quoted in the Blues: "Our current estimates indicate both revenues and expenditures will be within 1 per cent of original forecasts." It would appear from that, Mr. Chairman, that figures are available to the Minister of Finance. We would like to have those figures; we should have those figures now as we're discussing his estimates. I believe it was the hon. leader of the Liberal Party (Mr. Gibson) who went one step further and suggested that we should have those figures, we should have that third quarterly report, even before we discuss vote 2, which we're on right now.

The minister did say that the information was before us in the form of the nine-month statement. But, Mr. Chairman, that's different. You appreciate that and I do but perhaps the minister needs some explanation. There is a difference between the kind of nine-month statement that has been the pattern in the province of British Columbia and the quarterly report initiated by this government for the first time ever. I give them full marks for that. It has full up-to-date reporting and more up-to-date information than any other province, with the exception of Ontario — perhaps it is even more up to date here.

Nevertheless, it's different because the quarterly reports are a forecast as well as an historical record of money received and disbursed. It's that forecast that is important to us in discussing where the province really is. You can't simply look at the nine-month statement and project from that what is going to happen. The minister himself referred to this in part yesterday by saying that there was a change.

Last year at the time of the sales tax money coming in.... It should have been coming in at a certain time but it was held up because of the post office strike. Perhaps, Mr. Chairman, we should be saying because of a dispute between the management and labour of the post office, because if there is a strike it's not one party that's to blame; it's both.Something has happened in the negotiating process.

In any case, there was a breakdown in the service that distorted the figures. The minister apparently has them, is saying roughly what they are, is saying what the net result will be, but is not making available to the members of this House — who are being asked to vote his salary — just what information is available to him. He had promised to make it available to the members of the House, he had promised to make it available to the people of the province, but on this date, February 17, some 48 days after the end of the third quarter, it is still not available to us.

My question, again, is: when will this information be made available to us? He made some reference to the fact that it is held up because of difficulty in getting information from some of the Crown corporations. Is it one of these reports that we are waiting for? Is it more than one of them? Is it any one in particular? Just what is the hold-up, and when might we expect to see the third quarterly report?

Mr. Chairman, I think the minister did get into, in his opening remarks, a discussion of the anti-inflation programme. I want to say at the outset that this government disagrees with the proposition that this programme should be decontrolled or dismantled at

[ Page 1029 ]

an early date. British Columbia's position on the timing of decontrol — that is, removing the wage-and-price controls — reflects both the requirements of the provincial economy and the view of the current economic management needs of Canada.

Mr. Chairman, I have to question that. I'm sure you can find authorities who would agree with the minister's statement. For example, the leader of the Liberal Party (Mr. Gibson) would agree with the minister's statement with respect to an early end to controls. But when you start getting out into the rest of the community, Mr. Chairman, you find it more and more difficult to get people to agree with carrying on the control programme, especially since the federal government is indicating more and more that it is getting near the end of that control programme. To pretend to maintain that control programme, all of the time saying to the people who are entering into what everyone agrees will be a very difficult year in the province of British Columbia from the point of view of labour-management discussions, because there are so many of them coming up, that we should maintain the AIB controls programme in the face of these negotiations, in the face of the threats or promises — depending upon your point of view — coming from Ottawa, I think is nothing short of doing a disservice to the province of British Columbia.

Mr. Chairman, when we talk about authorities saying we need the control programme, the one province in Canada, I suppose, we might say is milking the rest of the country — we might say that even B.C. is paying a tithe — is the province of Ontario. Nevertheless the province of Ontario is the economic province in the Dominion of Canada. That is the province where most of our heavy industry is. That is the province where our exports of manufactured articles emanate from. That is the province that is really keeping this country going, economically speaking. The rest of us ship out exports of raw materials generally, but Ontario is dependent upon manufacturing to a much greater extent than any other province.

Ontario has taken the lead in saying that we should abandon the control programme, that it is hurting Canada's trade position relative to the rest of the world. It's not just the province of Ontario. The employers in the province of British Columbia are calling for an end to the control programme because they believe that it's hurting them in their attempts to get the economy of British Columbia moving again. I could quote from the business page of the Province, February 3, 1977, referring to the Employers Council of B.C.:

"The council wants to see the controls removed as soon as possible subject only to implementation of decontrol legislation, but they want them removed as soon as possible. The government's objective should be a rapid return to a soundly based economy with maximum freedom of decision for individuals and groups and relative price stability."

Now, Mr. Chairman, we all want those things. Labour has argued from the beginning that these things can best be accomplished by getting rid of the control programme. Employers increasingly are arguing that we should abandon the control programme. The province of Ontario is arguing that we should abandon the control programme. The federal government is promising or threatening to abandon the control programme. For B.C. to be dragging its feet at this particular point in time, as I said, Mr. Chairman, is doing a disservice to the people in the province of British Columbia. Being as dependent upon economic activity as we are, upon exports as we are, to be dragging our feet in the face of the mounting evidence, the mounting pressure and the mounting promises or threats that we will be abandoning the programme in the relatively near future, B.C. should be joining that, participating in it, and helping to work our way out of the control programme. Since it is going to happen anyway, let's be a partner to the programme to work our way out of the control programme rather than insisting — and we can't do it anyway — that the programme carry on, even after all the others have reached the decision that the programme should be abandoned.

Mr. Chairman, I still have some concern about the prospects for 1976 and 1977. In spite of what the prospects are — 1976 as well, although 1976 is behind us — I still wonder what the public accounts are going to show when we do finally see them. The minister quoted from an economic report turned out by McLeod, Young and Co. talking about the position of B.C. having substantially improved within the last fiscal year. It talked about deficit financing, about the B.C. Ferries, the B.C. Buildings Corporation and substantial borrowings.

I reminded him yesterday, Mr. Chairman, that this was one way of taking out of the budget some $40 million to $60 million. It made it easier to balance this year. But even with that, I have questions as to whether or not we're really going to, and I will have questions at least until I see the nine-month report.

The minister did answer one question I had about the deficit repayment Act. The total amount borrowed was $181 million. This was a question I put to him yesterday, Mr. Chairman, and he answered it.

All we borrowed, Mr. Chairman, was the exact same amount of money that we gave to ICBC. We gave it to them and borrowed it back immediately, and that was the maximum amount of money borrowed.

I'm a bit confused here, or the minister is — one or the other. He probably has more and better advisers than I have, but he did say something to the effect

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that the total amount was $261 million authorized. Now as I recall, that particular legislation authorized the borrowing of $400 million, not $261 million. Bill 3, British Columbia Deficit Repayment Act 1975-76, authorized borrowing of up to $400 million, I believe. The minister says $261 million. I have a question there and I didn't have an opportunity to check it out this morning.

But, Mr. Chairman, my point is that all we had to borrow, in spite of all of the criticism of three and one-third years of NDP government in the province of British Columbia, was enough to make up for the political decision of this government to give $181 million to ICBC. We argued at the time that ICBC didn't need that $181 million and, Mr. Chairman, I think we proved to you that ICBC didn't need the $181 million. Certainly the answer tabled in the House a few days ago would prove to the people of the province that ICBC didn't need that $181 million because, by the end of December with just two months to go to the end of their claims year, they had not only that $181 million still available but an extra $92 million as well — 50 per cent more than the amount we gave them. I believe the figure was $272 million still available at the end of December. Obviously they didn't need the money.

But that's not what I'm coming to right now, Mr. Chairman. The Minister of Finance, in response to the question yesterday went a little further. He said the debt has been reduced to $150 million in the meantime, "but we do anticipate further borrowings will be required in the near future." And that's where he gets into the total authority of $261 million.

Mr. Chairman, if all we needed at the end of March in 1976 was enough money to give to ICBC because of a political decision to do so — all we had to borrow was $181 million — and if things have gone so well and the economy improved so much by the end of the second quarter that they had turned what was going to be a $130-million deficit into a breakeven position by the end of the second quarter, and if we were on the upgrade to that extent, one would anticipate that we were going to do even better in the third and fourth quarter. It's not necessarily so, but there's that possibility. If we had recovered to the extent of $130 million over the course of the year in one quarter, then what happened in the next two quarters? That question is, of course, still unanswered. Nevertheless, if things were going that well in the second quarter, leaving open the question of the third and fourth quarters, why is it we're going to have to borrow more money now? If we have broken even or had the modest surplus, if we have managed through cash management to reduce that $181-million borrowing to $150 million, then why, Mr. Chairman, are we going to have to borrow anything further than that $31 million? That would indicate a breakeven position completely.

If we had to go out and borrow $31 million, so that we were back where we were at March 31, 1976, I can see that. That would mean we had broken even completely. But I wonder: is that what the Minister of Finance has in mind, that we might have to borrow back that $31 million by which we had reduced the $181 million? Or if we are going to borrow more than that, why are we borrowing it in face of his statement to the effect that we will have roughly balanced in the fiscal period ending March 31, 1977?

I think by now the minister may be able to respond to the questions of the first member for Vancouver East (Mr. Macdonald).

HON. MR. WOLFE: The first member for Vancouver East is always interested in income tax payment problems. I can recall him raising questions of this type in years gone by.

Dealing with the first one, he referred to the so-called non-resident tax dodge of Canadian residents who might live across the border, perhaps in Blaine or somewhere, or anywhere else and...

MR. MACDONALD: Hawaii, Puerto Rico.

HON. MR. WOLFE: ...record over 183 days to avoid Canadian tax. Of course, there are reciprocal arrangements between the two taxing authorities, the United States and Canada. If you live over the 183 days in the United States, you're still required to pay a proportionate amount of your tax in Canada on a reciprocal arrangement.

But the matter, to answer your question, has not been brought up recently in my term or memory, except that I can only say that there is such a reciprocal arrangement. I can take the matter up at an early opportunity, but I haven't recalled that it was under discussion at the meetings which I have been at.

You also mentioned the so-called tax dodge of a home under the home savings plan under the federal income tax of $1,000 a year, where a person could put through some kind of a quitclaim to give the house to his spouse and this kind of thing. Of course, this is the law as it stands now — the tax advantage for home savings. I think, from what I am advised, Ottawa is looking into this matter and are concerned with this particular item you've mentioned. I'll be glad to look into that as well.

You mentioned income tax refunds. This is a matter that gets a great deal of attention — the exploitation of it by certain elements who want to use excessive interest rates and so on. As you know, the Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) has been dealing with this matter and I think that you should direct that question to him. It was brought up at federal meetings recently and there has been no resolution in terms of non-assignability

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of these refunds, but it has been under discussion. I think it might be better, or more appropriate, if you addressed that question to the Minister of Consumer and Corporate Affairs.

The member for Nanaimo (Mr. Stupich) mentioned, as he has previously, that he would like to see a public debate between myself and himself or anyone else, and that this would be much better to discuss matters of our legislation and tax plans and, particularly, I think, succession duties. My answer to him before has been, and is now: what better place to debate these matters than right here? It almost sounds to me that he doesn't want to debate the matter here. He wants to debate the matter somewhere out in a community hall or something, but you couldn't ask for a more public forum than this one, Mr. Member. With respect, I think this is the place for matters of government policy, tax policy and so on to be debated. Once again he brings up the credit union report and this time he refers to the "two feet of volumes" that was involved in that. He asks if it was worth it. Well, as you know, we had some concern over paying for the bill as the year went along. Having read the report and having had my officials look at it, my answer to your question is: no, it's not worth it. In terms of the value, translated into the money that was paid for the report, I would say the answer is no. I am not criticizing the time and effort that went into the report by the consultants and myriad of people who were involved in it. They obviously did a dedicated job, but in terms of what could be garnered from it, I would say that it has not been worth the price that had to be paid.

You asked about Treasury Board meeting regularly. I can only tell you again that they do meet regularly and we are, as you know, enlarging our staff backup — which has been non-existent before — to properly examine programmes on a continuous basis and to give more of an opportunity to examine individual, daily requests for expenditures. You mentioned the Cominco refund as an example of lack of attention to these expenditures. The Cominco refund was a confusing result of a tax audit that adjusted depreciation over a five-year period in which an overpayment had been made. So it was a simple refund requiring, under the Act, an order-in-council.

Interjection.

HON. MR. WOLFE: Once again, the quarterly report comes up. I'll say, once again, Mr. Member, that it will be released very soon. It's not quite ready but you'll be seeing it very shortly.

MR. STUPICH: A day? A week?

HON. MR. WOLFE: I mentioned yesterday that the nine-month comptroller-general's statement contains within it basically what will be in the quarterly report. If you take the 1976 and the 1975 nine-month statements through to December, you've got all the information right there with the exception of the Crown corporations. Now several of the major ones have already published their information. Certain other ones are not available but as explanation for some of the information I would offer this: that December 31 is a year-end cutoff for certain corporations, which I would prefer not to mention, and because of year-end adjustments, some of their information has been delayed in being received. But this will be tabled at a very early date.

On the anti-inflation programme, you obviously disagree with British Columbia's position with regard to wanting to sustain the programme now that it is in place. I would say, Mr. Chairman, that in light of the current debate surrounding the anti-inflation programme and the anticipation people might acquire that this programme will be dismantled and the discussion about decontrols, your policy indication is doing a disservice to the problem we have in British Columbia. You related the problem when you said that we were looking at a difficult year. For you to be advocating that we agree with decontrol, I think, does a disservice to the province of British Columbia. In fact, Mr. Member, it's true that, of the provinces in Canada, there are only about three which are really advocating the dismantling of the programme. Only three. So that leaves seven that want to keep it on.

AN HON. MEMBER: Which three?

HON. MR. WOLFE: Well Ontario and Quebec are two of them. Once again you reminded me of the deficit repayment Act. In fact you asked a question yesterday to which I'd answered that there had been borrowing of $181 million of which $150 million are now outstanding. I intimated that we did anticipate further borrowing.

I would remind the member, Mr. Chairman, that the Act that was passed originally authorized $400 million, based on the anticipated deficit. So when the deficit was finally concluded, the amount was $261 million. That is the authority for the total borrowing that is involved.

MR. STUPICH: Is it $261 million? According to the legislation it was $400 million.

HON. MR. WOLFE: That's my understanding. If you'll follow page.... "Our indication of the further requirement for the near future for more borrowing is strictly based on the cash flow requirements at this time and in the future." Because we can't make arrangements for borrowing, you know, on a 24-hour basis, we have to provide for what might be necessary. Even though sometimes it provides cash on

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hand, this can be reinvested to good advantage.

MR. WALLACE: Mr. Chairman, I just want to ask the minister for a few more comments on this debate over anti-inflation decontrol because I think the confusion which exists and the lack of federal leadership deserves some discussion. On January 20, the Premier, in answering a question that I asked in question period, said: "I'd like to clear up some misunderstanding that the member for Oak Bay has." He went on to say: "The First Ministers' conference that was concluded just before Christmas reaffirmed that the programme would stay in place until its conclusion in 1978." I'm quoting from Hansard; that's what the Premier said.

On January 24, Donald Macdonald, the federal minister, stated in a speech in Toronto that he "would be happy to see controls end earlier than the planned date." This was just a month after the conference to which the Premier quite rightly referred.

Then on February 2, just two or three weeks ago, Donald Macdonald again is quoted as saying: "If I were asked to lay a bet" — which, I might say, seems a very strange turn of phrase for the federal Minister of Finance to be using about inflation, the most crucial issue that faces this country — "about the end of controls, I would think that some time after January next would be a fair one." Then he went on to say that a date may have to be set by Ottawa because the provinces cannot agree on when to terminate the programme.

I took the trouble to get the federal Hansard. As recently as February 7 in question period in the federal House the minister did the most incredible waffling in response to questions about what the federal government believes it should or should not do about removing controls and instituting the decontrol programme. I'm quoting from the federal Hansard of February 7. The federal minister says:

Mr. Speaker, I have asked the provinces to continue their participation. In the meantime a group representative of several government of Canada departments will be calling on the provinces for the purpose of discussing the provisions which we set before the meeting last week and seeking their support in particular for a general agreement in which the private sector would participate to restrain inflationary expectations after controls.

Mr. Stevens of the opposition asked the minister how many contacts would be sent out from the federal government. Mr. Macdonald replied: "Mr. Speaker, each of the provinces will be visited by the group representative of the Anti-Inflation Board, my department and the Department of Labour."

Later on in the same series of answers, Mr. Macdonald, answering on the second occasion Mr. James Gillies, said:

The general economic climate would appear to favour decontrol. But the ambiguous and difficult thing is that there is not that reduction in expectations necessary. If we can get a commitment on the part of all the major decision-makers in the community to restrain expectations after controls come off, indeed we could look to do so at an early date.

Later on he says:

Naturally the economic situation may change over time. That is all the more reason that not only the provinces but the business sector and the union movement should agree on participating with this government in effective decontrol and post-control measures so that we can indeed take advantage of getting controls off as soon as we can.

These answers so delightfully run in opposite directions at the same time that I'm not surprised that unions and employers and the man in the street wonder just what on earth is really happening in regard to the national programme for continuing to deal with inflation and provincial participation in that programme.

Although the member for Nanaimo (Mr. Stupich) and I disagree on the time at which controls should be removed, I think he made the point very well that the federal government is creating additional problems by appearing not to know what it wants to do and when. If you read these answers in federal Hansard as recently as 10 days ago on February 7, what Mr. Macdonald is really saying is: "Maybe we will and maybe we won't; in the meantime we need agreement from the provinces."

I think that this province, at least, deserves credit for making itself plainly in favour of pursuing the programme to December 31, 1978. In the meantime we should communicate with these other decision-makers, as Mr. Macdonald refers to them, in an attempt to ensure that when the controls do come off, there just won't be some sudden surge of inflation all over again.

There are so many contradictory headlines. We've got Mr. Joe Morris, the president of the Canadian Labour Congress, saying that controls will end pretty soon. One of the consequences of that kind of statement, of course, is that labour negotiations are going to be incredibly difficult this year in British Columbia because unions want to know when controls will end or if they will end shortly and what kind of attempt to restrict their expectations will be imposed after the official controls are removed.

I would like to know, Mr. Chairman, if the minister can tell if our government is participating in the kinds of consultations which Mr. Macdonald described in the federal House 10 days ago. He said there would be representation from the AIB, the Department of Labour and his own ministry, the Ministry of Finance.

I wonder if I'm assuming too much when I refer to

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the minister's statement yesterday. I've checked the Blues, and the minister said: "It is becoming increasingly apparent that the federal government will terminate the controls programme this year, perhaps even as early as July." The minister made that statement in the House yesterday, and I'm wondering if he's come to that conclusion as a result of these meetings that are taking place in every province with representatives of the AIB, the Ministry, of Labour and the Ministry of Finance federally.

It seems to me that for all the disadvantages of the controls programme — and anybody has to admit that there have been some inequities.... I would do my former national leader (Mr. Stanfield) the credit of pointing out that even when the national Conservative Party fought the 1974 election on the issue of controls, he admitted it would be a rough kind of justice. I don't think anyone denies that the controls programme has not been applied completely fairly or evenly and that wages have been in many respects controlled much more severely than profits. That is one major reason why we can expect some measure of continuing unrest in industrial relations.

If you look at the figures, the 1976 consumer price index, excluding food prices, rose 8.6 per cent. Actually, at that point in time, Mr. Macdonald admitted publicly that the slowing of the inflation rate in 1976 had been due almost entirely to food prices. But on the other hand — and he seems to be very good at saying opposite things at the same time — he acknowledged very readily that in the months ahead there would be much higher prices for food and that in fact there might be another surge of inflation which would exceed the 8.6 per cent that had been attained in 1976.

If there is that much uncertainty to our capacity to control inflation, is this the time to talk about taking off the controls? In my view as a layman in these economic matters, I think it would be very foolish to take off controls in the near future, particularly in light of the kind of statements we're seeing from the large labour unions. They are delaying the negotiation of contracts as much as possible because of the uncertainty; and if they do negotiate, they will certainly negotiate a one-year contract. So the whole aura around the anti-inflation measure issue is immensely confusing — almost as confusing as the transfer of tax points in cost-sharing agreements. Not quite as confusing, but almost.

I just would like to make the point, Mr. Chairman, that in the overall scope of controls I think they have been remarkably successful. They have certainly slowed inflation from double-digit, as the minister mentioned yesterday, to 8.6 per cent in 1976. That's no mean accomplishment. It seems that the conditions which justified this kind of massive interference by government in the marketplace are just as evident today as they were — maybe not quite as much, but they are certainly clearly in evidence today.

The statements that we read by various groups about wanting to catch up after controls are removed, I think, should scare every one of us into realizing that for all the disadvantages of the control programme, and some of the inequities, perhaps for the greater good of the whole country removal of controls must be tackled in a very cautious and extremely careful manner. I would like to support the minister completely in this regard. What we are really saying is: do we want to gamble with another surge of inflation and even worse unemployment than we have today, or do we feel that if we all make a little bit of a sacrifice in restraining our demands on the economy as a whole, the very least we might accomplish is to prevent unemployment getting worse? That is a pretty limited goal in itself.

The last point I just wanted to make, Mr. Chairman, is to ask the minister if, from the discussions to this date with the federal government, he can tell us whether it appears likely that at least the federal government will soon be making an announcement one way or the other as to whether there will be an end to controls in the near future, or are they proposing to go on waffling around, one day saying it might be January, the next day it might be July, or the next day something completely different. It seems to me the confusion and the conflicting statements from the top financial man in the country is just making the whole climate for employers and employees immensely more difficult. Since the minister made the statement yesterday that he felt they might end as soon as July, would he care to elaborate why he made that statement? Is it based on those consultations which are now going on with Mr. Macdonald?

HON. MR. WOLFE: I share the member's concern over the conflicting information. What I said yesterday about it becoming increasingly apparent that the date will be soon is strictly conjecture on our part, based on a variety of statements which have emanated from Ottawa. I happened to attend the press conference that you referred to, where he was asked the question. The federal minister was pressured to answer when they might come off. Could he give them a date? He finally came forward with the answer that you quoted, that if you wanted to flip a coin, or if you wanted to bet, it would be early 1978. There were other dates mentioned, but they were all sort of thrown out very loosely.

We have the growing opinion in British Columbia that they do have a date in mind, but that is strictly conjecture. Therefore I think we want to reiterate our position, and that of many of the provinces in Canada, that we do think this is premature to talk about it now. Some 900 employees have been

[ Page 1034 ]

established and have developed experience in how to handle these matters, and to simply throw all that into the trash can would be foolish. In any event, as far as the date goes, we just simply do not know. We are continuing to urge — as we hope they will hear — that it will carry on to the conclusion of the original three-year period.

I might say that reference has been made to an ongoing discussion with meetings to be held in the provinces. Members from the Anti-Inflation Board are here at meetings today — which I was supposed to attend and was not able to attend...

MR. WALLACE: They should be in here listening.

HON. MR. WOLFE: ...with Mr. Pepin, the chairman. The purpose of these meetings right across Canada is to discuss not the date of dismantling but the subject of decontrol. We are making our position very clear once again to the AIB people of how we feel about the premature elements of discontinuing the programme. But it is, after all, going to be a decision of the federal cabinet, not of the Anti-Inflation Board. Therefore, in my view, acting on instructions, we'll have to abide by whatever the political decision turns out to be.

Interjection.

HON. MR. WOLFE: That's another matter to be decided, Mr. Member, but I could say this: for individual provinces to develop different programmes in isolation would be fraught with a lack of success.

MR. C. BARBER (Victoria): I rise to speak on a number of subjects and, first of all, to talk about the failure of this government to honour one of the most significant campaign promises they made to the people of Victoria. That promise was that they would pay their fair share of property taxes on the buildings they own in the city of Victoria. That promise is, among others, one of the direct responsibilities of the Minister of Finance. It is a promise which was not kept, has not been kept, and shows no signs of being kept.

One of the more laughable advertisements that appeared in the last campaign, Mr. Chairman, is an advertisement that appeared in the Times on November 27, 1975: "The Team That Works." I'll table it if anyone wonders about it. I would like to read it, although I don't mean to be unkind because I really do consider my colleague from Victoria a personal friend. We've known one another for a long time and I worked on his very first campaign as alderman, although not on his second, I must confess. "The Team That Works — They'll work hard for this community and its people. They'll work hard for a return to responsible government. On December 11, put them to work for you."

They go on and on and talk on a line that I think is extremely important and is, again, the responsibility of this minister. "More ways they'll work for you." They promise to fight for fairer taxes for Victoria by making the provincial government accept its fair share of property taxes. I'm sure no one denies that that party — that coalition — campaigned repeatedly throughout that entire campaign in our capital city on the promise to correct a historic inequity. During the same campaign our people made the same promise because we recognized similarly, for the same reasons being put forward then, that it was unfair and unjust and could not, in any sense, be made rational by the previous procedures. I wish that our government had done more. I'm embarrassed that they didn't. I think they should have.

Interjection.

MR. BARBER: Well, I don't care what the former Premier said. I'm concerned about what this Premier said, because our Premier lost and yours is in power. Yours is the one who made the promise and so did you. It's your responsibility to keep your promises. If they were made honestly, they should be kept immediately without fail or hesitation or reserve, because they were made without reserve.

The fact is that the previous government was defeated. That's right. They were defeated. The fact is that this government now in power was elected — how obvious and how banal. Do we need to talk about that any more? Probably, politically, I suppose so. The fact is also — and this is the one that's most crucial now because you won and we lost — that one of your responsibilities is to honour your promises. Mr. Chairman, this Minister of Finance has been in power going now into his second year. They have hopelessly failed to honour this promise. They have failed to honour a most significant promise to the people of the capital city and I think they have no excuse.

During our administration the McMath report was commissioned. During that administration, recognition at least was taken of the fact that this historic inequity, inherited over many years, could no longer be rationalized or justified. That report, of course, was cut short by this government. That report was suppressed for six months. That report was finally released when finally they realized they had a legal obligation to do so and could find no further excuse for suppressing it. The report contains substantial and reasonable recommendations in favour of the province paying its property taxes on virtually all of its holdings in the Province of British Columbia. We'll be debating that report at some length later on in this debate. But particularly now,

[ Page 1035 ]

I'm concerned about the failure of that coalition and that minister to honour its promise.

Is it not fair to ask, Mr. Chairman, whether that promise was made honestly, whether it was intended that it be kept? Certainly the people of Victoria believed that the promise was made honestly. They believe that the promise was intended to have been kept.

This government has won the unique distinction of having been described by the mayor of Victoria as "the biggest welfare bum in British Columbia." One presumes that's no great source of pride for that government. They certainly don't quote him very often. The biggest welfare bum in British Columbia is the provincial government that, in the capital city, fails to pay its fair share of property taxes. I want to introduce some figures into the debate. They were provided to me by the B.C. Assessment Authority and by the City of Victoria itself. The figures from the Assessment Authority date from its publication of March 8, 1976. The figures from the City of Victoria were released by the mayor of Victoria in correspondence, in public debate and through local newspapers. I'd be happy to table them if there is any doubt.

The assessed value of land owned by the Province of British Columbia in the capital city at 100 per cent is $18,189,220. Improvements to the buildings there on that land, again assessed at 100 per cent, is an additional $31,792,570. The taxable assessed value, therefore, is $42,033,647.

HON. MR. BAWLF: Is that 100 percent?

MR. BARBER: That's what I said: 100 per cent. That's the basis on which the Assessment Authority publishes those figures from which I'm quoting, March 8, 1976. It's not another trick from the Chamber of Commerce or the tourist bureau. It's the Assessment Authority saying so. Let me repeat, the taxable assessed value at 100 per cent is $42,033,647 on land and improvements held by the provincial government in the capital city. Now the mill rate, of course, is applied to that figure. The province last year actually paid a mill rate of 15 and, applied to that figure, contributed to the city of Victoria the sum of $630,504.70. That's information directly from the mayor's office.

HON. MR. WOLFE: Did you say $42 million?

MR. BARBER: Yes, I'll give it again. The total assessed value of the land and buildings owned by the province in the capital city is $42,033,647. The mill rate was applied to that figure. The mill rate of 15, which is the only one that the province presently honours, produced, therefore, as a payment to the city of Victoria, the sum of $630,504.70.

Now in fact the general mill rate last year was 48.56. It was not 15 mills but rather more than three times that. On the basis of the general mill rate, rather than the special one which only the province pays, the total tax at 100 per cent assessment should have been $2,038,631.

[Mr. Rogers in the chair.]

I'm well aware of that, and I'll get to that. I want to know what your position is and I want to know how much longer it's going to be frozen. I want to know what you're going to do to honour your campaign promise to pay your full and fair share of property taxes in the city of Victoria.

Because it should have been $2,038,631, the people of Victoria suffered a loss of $1,408,127. Again, those figures are provided to me by the Assessment Authority and by the mayor of Victoria.

There's an interesting coincidence, Mr. Chairman. The loss, on that basis, to the city of Victoria was $1,408,000. The increase this year in taxation required by the city of Victoria to conduct its business just happens to be $1,487,154. It's quite remarkable, and surely an unpleasant irony for the treasurer of the city of Victoria, that the amount that the city has to raise this year — an extra $1.4 million — is almost identical to the amount that the province failed to pay, had they honoured their campaign promise. The difference between this year and last year for the city of Victoria — the extra amount that they're required to raise — is 14.7 per cent.

Because the amounts are so nearly identical — $1,487,154 that was increased; $1,408,127 that was not paid — the city of Victoria was required to increase its taxes by 14.7 per cent. They could have been reduced by 14.7 per cent. This province, had it honoured its campaign commitment, would have seen that there would have been virtually no tax increase whatever in the city of Victoria. None. Zero. Had they honoured their commitment, the tax increase about to be faced by the taxpayers of the city of Victoria would not have been met at all.

Now in the city of Victoria that's no small matter because, as you know, Mr. Chairman, we're in the position in my riding of seeing that better than 60 per cent of the people who live here are tenants. Of those, I understand, more than 45 per cent are retired persons on pensions, low and fixed incomes. Those people pay property taxes. They pay them through their landlords; they pay them through their rent. They're affected by these increases.

The unhappy irony is the fact that this province, having failed to honour its campaign promise, sees the city of Victoria having to raise taxes to the equivalent of $1.4 million when it just happens that it was the same $1.4 million that the province failed to pay. It tells us that either the promise was not meant

[ Page 1036 ]

honestly...

HON. MR. BAWLF: Your figures are wrong.

MR.BARBER: ...or will only be kept prior to the next election when it serves their political purposes.

If these figures are wrong, then they have been wrongly provided by the mayor of Victoria, by one of the aldermen, Mr. Hays, and by the B.C. Assessment Authority.

HON. MR. BAWLF: You're assuming that the province has paid nothing.

MR. BARBER: If they are wrong....

MR. CHAIRMAN: Order, please, Hon. members. The second member for Victoria has the floor.

MR. BARBER: I'm not making any such assumption. The province actually paid last year, at 15 mills, $630,504.70. They should have paid $2,038,631, had they honoured their promise. The difference is $1.4 million. Is that clear?

AN HON. MEMBER: Say it again, Charles.

MR. BARBER: I'll say it again.

MR. CHAIRMAN: Hon. member, kindly address the Chair.

MR. BARBER: The mayor of Victoria, describing this government as the biggest welfare bum in the province, says the maximum loss — he has said it; I have said it; they said it during the campaign and they didn't much quibble on that detail during the campaign — was $1,408,127.

Now what if they had paid at the present rate, Mr. Chairman? The loss to the people of Victoria would still be this year, I am informed, slightly better than $200,000. Do you dispute that figure? I ask the Minister of Finance: does he dispute that figure? If he does, then I suppose I'd better get back to the mayor because that's what I understand from the city of Victoria is the figure. If I'm misinformed, I apologize. I'm simply quoting from public authorities that I am sure are telling the truth.

HON. MR. BAWLF: Nobody pays 100 per cent assessment.

MR. BARBER: I'm well aware of the arguments about assessment....

MR. CHAIRMAN: Hon. member, kindly address the Chair. You're aware of the rules.

MR. BARBER: I'm aware of the rules, and I'm aware of the argument, and I'm aware of the promises that this group has failed to keep. They came into power having made that promise. They've been in power going into their second year and they've failed to keep it. What is their excuse, Mr. Chairman? What is the reasonable excuse? Was the promise phony? Was the promise not intended to be kept or even remembered? Is the promise about to be kept and does the Minister of Finance have good news for the people of Victoria? If so, I will be happy to hear it.

MR. KAHL: Move the capital to Vancouver.

MR. BARBER: On the basis of the old and much-argued-about assessment, the minimum loss is better than $200,000 last year. On the basis of 100 per cent assessment — which is what that party has argued about for a long time, and what we understand the legislation they are shortly to introduce will in fact bring into reality in this province — the loss is $1.4 million. A loss of $200 is unfair, a loss of $200,000 is not going to be forgotten, a potential loss of $1.4 million cannot be excused. These guys have no excuse, Mr. Chairman. They made the promise. The people of Victoria insist that they keep the promise or admit to the people of Victoria that it was a phony promise from beginning to end. I'd be happy to hear what the minister may say in defence of his failure to keep the promise. However, there are a couple of other matters I also wish to raise.

MR. KAHL: Read that phrase again about the failure to keep their promise.

MR. BARBER: The people of Victoria are listening.

MR. KAHL: Not to you.

MR. BARBER: I want to talk about the Assessment Authority, Mr. Chairman. I want to talk about a problem with legislation. I want to talk about the fact that assessment to municipal government has been increased by $3.1 million this year because of the failure of that government to maintain a pattern and to honour an expected financial commitment to municipal government. I'll get to that in a moment.

I'm first of all concerned with the failure of legislation and the failure of the minister to act in the face of an obvious and grave loophole in the Assessment Act. I do so on behalf of the member for Prince Rupert (Mr. Lea) who raised this matter earlier in the House, who is at the moment working on a fairly important project which will shortly be drawn to the attention of this House, and who therefore cannot be here today. Accordingly, on behalf of the

[ Page 1037 ]

member for Prince Rupert, I wish to trace the curious history of Can-Cel's application to reduce its assessment in the city of Prince Rupert. I want, using that case and tracing that history, to demonstrate, Mr. Chairman, that there are indeed loopholes — one most significant one is in section 24 of the Act — that the minister has failed utterly, even on the advice of the Assessment Appeal Board itself, to take any action on whatever.

MR. CHAIRMAN: Hon. member, I must remind you that you can't discuss legislation during Committee of Supply.

MR. BARBER: I'm discussing the course of a particular assessment, the significance of that in this minister's debate, and our call on the minister to accept responsibility, to take action here and now by making a commitment to take action later when discussing legislation, to take action as a member of those benches to tell the people of British Columbia that the obvious inequity....

MR. CHAIRMAN: Hon. member, that still involves discussing legislation and therefore it's out of order.

MR. BARBER: Well, Mr. Chairman, I wonder if you would be so good then as to tell me when, if not now under the minister's general responsibility, as I was advised that one could discuss his general responsibilities under his own office vote....

MR. CHAIRMAN: Hon. member, you can discuss his administrative responsibility at this time.

MR. BARBER: Well, as you know, Mr. Chairman, the Minister of Finance is responsible for, among other things, the Assessment Authority. Would you tell me when I may discuss failures of that minister to deal responsibly with problems of the Assessment Authority and with the problems of the people of Prince Rupert in regard to this particular piece of decision-making that has occurred?

MR. CHAIRMAN: Well, it's only the duty of the Chair to advise you what is in order and what is not in order, and I've advised you.

MR. BARBER: Well, is it unfair to ask what is in order, Mr. Chairman?

MR. CHAIRMAN: It's the duty of the Chair to advise you when you are in order.

MR. BARBER: Well, I'll just keep going anyway. I believe that this minister should be responsible, and if I may therefore phrase it somewhat more generally and philosophically and not attempt at this moment to tie it to a specific piece of legislation, thus not offending the apparent rules of the House, I will do so.

The minister is responsible for seeing that fair play and fair treatment is accorded all levels of government throughout this province. I wish, therefore, to trace a particular case and draw a general conclusion, which I believe will persuade the minister to do his job. He has failed to do it in this instance. I'm sure he will do it after this most excellent tracing prepared for me by the member for Prince Rupert.

Can-Cel, as you know, was ordered by the Pollution Control Board a number of months ago — actually, there were several orders, I understand — to install several million dollars worth of clean-up equipment at its sulphite plant at Prince Rupert. This equipment was important and immediately necessary in order to improve environment quality in Prince Rupert.

Can-Cel, having been ordered by the Pollution Control Board to do so, then attempted to have its 1975 assessment reduced retroactively. At first, Can-Cel was turned down by the Assessment Authority. Their appeal for retroactive consideration was denied. On September 8, 1976, Can-Cel went to the Assessment Appeal Board, for which this minister is responsible. Can-Cel went to the Assessment Appeal Board. Sitting for the board was Mr. W.M. Anderson, chairman; Mr. J.Y. Gardner, member; Mr. M.J. O'Connor, member. The appellant was, of course, the Canadian Cellulose Co. Ltd., largely owned by the people of British Columbia. The respondent was the assessor of area No. 25, otherwise known as the northwest assessment district, Mr. H.R. Jones.

The appeal was considered beginning on September 8, 1976. The appeal was considered exhaustively, in our opinion, and they rendered a judgment on December 31 that found in favour of Canadian Cellulose. The significance of that, Mr. Chairman, for which the minister is indeed responsible, is precisely this: Prince Rupert is now stuck with making good a loss of $784,000 in tax revenues which they should have been accorded. They should have been paid by Canadian Cellulose Ltd. They are stuck for more than $750,000 because of a problem. I'll go into that problem later.

Now the basis of the judgment issued on December 31 by the Assessment Appeal Board may be found in section 24(6) of the Assessment Act. If I may quote it briefly:

"Notwithstanding subsection (1) or anything to the contrary in this Act, (a) except as provided in paragraphs (b), (c) and (d) in sections 25 and 27, land and improvements shall be assessed at the same value and on the

[ Page 1038 ]

same basis at which the land and improvements were assessed for the calendar year 1974; (b) where a change in the value of land and improvements occurs by reason of (1) a change in the physical characteristics of the land or improvements or both, or" — and this is the most key part, Mr. Chairman — "new construction or new development thereto, thereon or therein, or changes in zoning and reclassification."

That's the key piece of legislation for which, as you know, that minister is responsible.

The phrase in dispute, therefore, was "new development." The first time around they were turned down because the phrase "new development" was not construed or understood to include the order by the Pollution Control Board to compel Can-Cel to upgrade its pollution, its cleaning and its filtering facilities. Upon appeal, that definition, which does not appear anywhere in the legislation and is not otherwise provided for, was found to be at fault. The Assessment Appeal Board, in its ruling of December 31, did, therefore, interpret that the new development met the requirements placed by the PCB on Canadian Cellulose to clean up its act, so to speak. This has established a very major loophole, Mr. Chairman. The loophole is obvious to you, I'm sure. What it means is that any agency of government — the Pollution Control Board, the Workers' Compensation Board — which compels an industrial concern to install equipment or in any other fashion alter its facilities so as to bring that equipment or those facilities up to safer standards, may cause local taxpayers to bear the entire burden of that cost.

It was not the city of Prince Rupert that expected to have to pay for the installation of this anti-pollution equipment, Mr. Chairman.

AN HON. MEMBER: But that's the way it worked out.

MR. BARBER: But that's certainly the way it worked out. What would happen, Mr. Chairman, to the city of Victoria if the Pollution Control Board decided to force B.C. Forest Products on Gorge Road to install cleaning and scrubbing equipment? Could B.C. Forest Products go back to the city of Victoria and say: "Hold on a minute! We've been compelled to establish a new development under the terms of section 24 of the Assessment Act. We're not going to pay our assessment; we're going to appeal it"? On the basis of this precedent they would have every expectation of winning. On the basis of the failure of this minister to comprehend the significance of this decision, municipal councils throughout British Columbia are now wondering who's next. First of all, Prince Rupert got it; the city of Victoria might get it next. I suppose it's just possible that the minister's own riding might get it sometime, and then maybe we'll see some action.

Through no fault of its own, Mr. Chairman, the city of Prince Rupert has been stuck with making up $784,000 because the minister has failed to act responsibly, or even knowledgeably, or even interestedly, to close an obvious loophole. This is an extremely important failure — there are others. I will get back to tracing the events.

On January 14, 1977, the Assessment Appeal Board itself told the Minister of Finance that he had better get off his chair and take some action. It's clear to me from the reading of their 1976 annual report, signed by its chairman, Mr. Anderson, that they themselves were not satisfied with the fairness of their decision in regard to the Prince Rupert case, because they recommend to the minister that action be taken. The minister, as usual, has failed to even respond, much less to take positive action. Their own annual report tabled in this House says in the third paragraph:

"A large percentage of appeals heard during 1976 involved section 24(6) of the Assessment Act" — parenthetically, Mr. Chairman, the one to which I've just been referring — "and included appeals from a number of major industries arguing questions of law, rather than appraisal problems per se. In interpreting this section the board requested the assistance of the supreme court, by way of stated case and for instances."

They continue in another paragraph:

"The board has previously submitted to the Minister of Finance, the Hon. Evan Wolfe, its recommendation that section 24(6), (7), (8), (9), (10), and (11) of the Assessment Act be repealed due to the inequities in assessment which magnify themselves each year."

They continue with their advice:

"The board must request that section 11 of the Assessment Act be amended with the insertion of 'by the Assessment Appeal Board' in place of 'under the provisions of section 67.' The obvious reason for this request is that the present wording allows for appeal to the courts without reference to the board. This section as written, in effect, does away with the necessity for the Assessment Appeal Board."

There are some significant problems here. The one we're debating today is the failure of leadership on the part of that minister to act on competent advice from agencies of the Crown to close a loophole, the failure of leadership to close that loophole and to protect municipal government throughout British Columbia. We're concerned about the failure of leadership on the part of that minister to act sensibly, rationally and quickly to prevent every municipal council from being stuck in the same way that Prince

[ Page 1039 ]

Rupert has been stuck by this decision.

Let me repeat, Mr. Chairman, that because the minister has failed to act, the Assessment Appeal Board itself has tried to act. They made a decision on December 31 of last year. On January 14 of this year they indicated their obvious dissatisfaction with the fairness of that decision, which they felt they had to make by virtue of the legal interpretation of the language of the Act, and recommended to the minister that those sections be repealed all together. I think they've taken a very fair and very reasonable approach.

AN HON. MEMBER: Hear, hear!

MR. BARBER: The problem is that the minister has been totally unreasonable and hasn't acted at all.

However, it's not just the Assessment Appeal Board which has acted in a responsible manner. Other jurisdictions have as well. On January 19, the mayor of Prince Rupert sent — at least, we received it in our office then — the following telegram:

CANADIAN CELLULOSE COMPANY LIMITED, THE GOVERNMENT-OWNED FOREST PRODUCT CONCERN, HAS WON AN ASSESSMENT APPEAL BOARD JUDGMENT ON ITS WATSON ISLAND SULPHITE MILL WHICH, UNLESS OVERTURNED BY THE SUPREME COURT, WILL AWARD THE COMPANY A REFUND OF $784,000 ON ITS 1976 TAXATION. THIS AWARD BY THE BOARD WAS BASED ON AN INTERPRETATION OF SECTION 24 OF THE ASSESSMENT ACT. 'WE CONSIDER THE ACT, AS PRESENTLY WRITTEN, TO BE AMBIGUOUS LEGISLATION WHICH CAN RESULT IN A NUMBER OF SUCCESSFUL, LARGE CORPORATION PROPERTY TAXATION APPEALS FOR MILLIONS OF DOLLARS.'"

MR. CHAIRMAN: Hon. member, once again I must draw your attention to the fact that you are discussing an area of legislation, and we are here to discuss the estimates of the minister.

MR. BARBER: And I'm here to discuss the responsibility of this minister, Mr. Chairman. He is responsible for all of those things, and the people know it. He is responsible for the Assessment Appeal Board and the Assessment Authority. He's responsible for acting on the reasonable and legitimate requests of municipal governments in British Columbia for protection. He's responsible to tell us what he's going to do. He's responsible to answer these questions. I think this is a very reasonable debate and I am proceeding quite cautiously.

MR. CHAIRMAN: Hon. member, I will quote from Sir Erskine May's Parliamentary Practice.

MR. BARBER: Oh, I've read that bit, Mr. Chairman.

MR. CHAIRMAN: Oh, you have? That's fine if you have. I'll read it again. It's on page 725. It says: "Legislation, and matters involving legislation, can only be discussed in supply under a substantive motion." I bring that matter to your attention.

MR. D. BARRETT (Leader of the Opposition): There's no legislation. You've got your radar on backwards.

Interjection.

MR. BARBER: That's right; it has been passed. I'm urging the minister to consider acting on his responsibilities, to act on the best advice he seems to have received from his own agencies, and from us, to close a loophole. I have read the bill very carefully.

MR. CHAIRMAN: Hon. member, now I must bring your attention to the fact that you have three minutes left.

MR. BARBER: I was watching that. I'll continue with the telegram. I don't think the people of Prince Rupert would particularly enjoy your apparent willingness to get off the topic. The people of Prince Rupert have been hit with a bill for more than $750,000 thanks to the failure of that minister to act responsibly. I'll continue with the telegram and, later on, jump up again and continue with my remarks.

The telegram ends as follows:

ALTHOUGH PRINCE RUPERT MAY NOT BE ABLE TO ACCEPT BENEFIT FROM NEW LEGISLATION, WE BELIEVE THAT THE ASSESSMENT ACT SHOULD BE REVISED TO PROTECT OTHER MUNICIPALITIES AND SCHOOL DISTRICTS.

Before I sit down, observing the time limit, I ask the minister if he would care to respond to any of the advice that's been given and care to tell us whether or not he intends to exercise any leadership whatever to protect the municipalities of British Columbia from being stuck in the way that Prince Rupert has been stuck. If the minister declines to answer, I'll be up again.

MR. CHAIRMAN: The hon. member for North Okanagan.

MRS. P.J. JORDAN (North Okanagan): Ski capital of the world, Mr. Chairman. If I might add, it's the only place I know of in British Columbia now where they are skiing happily every day. Accommodations are at half price, if anyone would care to go.

Mr. Chairman, that act that preceded me is a hard

[ Page 1040 ]

act to follow, not because we are unsympathetic to the plight and the problems of people in Prince Rupert, but it's his total involvement of what he calls total debate with totally sweeping statements which generally are totally wrong that we particularly enjoy. I do understand that rumour has it that it is a total authority on the totals of welfare.

Without interfering with the minister, who I think is quite capable of answering his own charges, I would like to address myself just for one moment, before I bring up a couple of matters of concern to the people of the constituency of North Okanagan, to some of the comments that were made by the hon. member for Victoria (Mr. Barber). I would suggest to him, if he would like to listen, that if the people of Victoria are unhappy with Victoria being the capital of British Columbia, there are many other communities that would very much like to have it. We would be very glad to bid on it. In fact, I am not sure I wouldn't recommend to the Minister of Finance that if the unhappiness continues, we recommend to the Premier that we put the capital of this province and the seat of government up for tender throughout the province.

I assure you, Mr. Member, while there is always room for more, your figures were totally out of context. Victoria has received, in lieu of taxes from the government of British Columbia in the last few years, in 1972, $300,000; in 1975, $400,000; and this year, Mr. Member, $750,000, well over a 100 per cent increase since 1972 and, in fact, nearly a 100 per cent increase since last year. That's a very sizeable amount of money which goes a long way towards helping the city of Victoria balance its budget.

MR. BARBER: The mayor doesn't think so.

MRS. JORDAN: And I would say again, if the people are unhappy about this in Victoria — not that we wish them any ill will — I believe there are many other communities that would like to have the seat of government there. I think the member should also be aware that while we don't begrudge it in other parts of the province because we are very proud of our capital city and we do want to give it many benefits, the Capital Regional District has recently had $400,000 per year to spend solely on the beautification of the city of Victoria and the area encompassed in the Capital Regional District.

MR. BARBER: That was the same grant we gave them.

MRS. JORDAN: I am sure that Prince Rupert would like to have that, Mr. Member. I would also advise the member that there is over $500,000 of capital moneys in the works within the city of Victoria and slated for next year. Mr. Member, $750,000 in lieu of taxes in the form of a grant; $400,000 a year for the Capital Regional District; and $500,000 worth of works in progress within this year — I think that's a very handsome contribution towards the city of Victoria.

As I say, there is always room for more. But looking at it from the other parts of the province, Mr. Member, as we have a responsibility to do, we think you are, indeed, getting a great deal of assistance. I say we give it with pride, but we must remember the problems elsewhere.

O would also remind the hon. member that the Minister of Municipal Affairs and Housing (Hon. Mr. Curtis)....

MR. CHAIRMAN: Hon. member, kindly address the Chair.

MRS. JORDAN: Through you, Mr. Chairman. This no doubt would interest you, Mr. Chairman, because you have some serious housing problems in your area. You might recall that the hon. Minister of Municipal Affairs and Housing issued a forgiveness of $100,000 for subsidized housing in the city of Victoria, a great relief to the individual taxpayers of this area. Again I say, we give it willingly because those moneys come from the rest of the province. But we do feel that the member is doing a disservice to the constituency he represents when he doesn't bring forth the total truth.

I also might just add that the cost to many of the municipalities throughout this province and many people in coming to Victoria to present their problems to government is an extreme burden. We feel that it costs our aldermen, our regional district representatives, our hospital board representatives, our community service representatives, our industrial representatives, our tourist representatives and the many other people who must come to Victoria to transact their business, at least $50 a day minimum for the barest necessities of food and shelter, plus their transportation. That, Mr. Member, goes directly into the economy of Victoria. That's why you're able to have some beautiful hotels and some beautiful buildings here, because the rest of the province is contributing daily to the direct economy of Victoria. We do so gladly, but I assure you happily that if you continue to complain, the other members from this province will seek to have the Premier put the capital or the seat of government out for tender because many of us would like to have it.

Interjection.

MR. CHAIRMAN: Hon. member, I'm having some difficulty in relating this to the estimates of the Minister of Finance. Perhaps we could get back to his budget.

[ Page 1041 ]

AN HON. MEMBER: Hear, hear!

MRS. JORDAN: I suppose you weren't in the chair, Mr. Chairman, when the subject was discussed. The reason that I did stand, though, was to bring to the minister's attention just a couple of points which are of concern to the people in the North Okanagan constituency.

Interjection.

MRS. JORDAN: As a matter of fact I hear it's quite good, Mr. Member.

They are concerned about the philosophy that our government has, and that they hope will have, in terms of assessment of home property and taxation of home property. Our philosophy, Mr. Chairman, is to encourage and to recognize the need and the opportunity for individuals to have private home ownership — to own their homes, to own their own farms. In this time of high costs it's a very difficult process although the government has done well in stimulating this opportunity. But the second phase of this philosophy is the inevitable picture of taxation through assessment and the resulting costs of the taxation policy adopted by the government and the municipalities. I would ask the minister to bear in mind — as legislation is being drawn, as policies through the finance department are being drawn and as he is hearing representation from and in conversation with the assessment authority — that the people of British Columbia want to see a philosophy, reflected in our assessment and taxation policies, of encouraging people to take the benefits and have the opportunity to be in their own homes. They don't want to be moved out of their homes by taxation or have their homes confiscated by taxation.

As a companion to that, it's always been a matter of concern to me and to many people that — perhaps not intentionally — the general philosophy of people who have been in municipal governments for a long time, often provincial governments, and those who work within the civil service or the bureaucracy of these areas, is to feel that home taxation is a very legitimate form of taxation. It's a form of taxation that can be used fairly liberally. I propose to the minister, through you, Mr. Chairman, that this is a wrong philosophy. When we relate the cost of housing today to taxation, there is simply no real relationship, because the value of your property is only real when you sell your property. I don't want to get into the matter of assessment at this time. I only want to speak in a philosophical sense. But there has been a tendency to use this as a punitive form of taxation. People tend to want to improve their homes and the resulting fact is that their taxes increase.

The same is in place with industry. If an industry comes in and buys an old building, fixes up the building and then landscapes in order to contribute to the community, it results in higher taxation. I feel that we should entertain a policy whereby we could offer incentive taxation — to homeowners particularly, although I'd like to see it also for industry — whereby if people fix up their homes so that they are an addition to the community, then they don't receive a punitive tax increase. In fact there may be a level from which we can work where they would receive an encouragement. I'm glad we're together on that, Mr. Member. It's nice to be together on many things. I think we have to recognize that a nice residential area or a nice industrial area in a community not only increases the value of the individual piece of property, but that that value is only reflected, as I mentioned, when the land is sold.

The second thing is that I think we have to recognize that this type of development improves the value of the community itself — not in terms of dollars and cents, but in terms of being a nice place to live, a place where people want to go and a type of environment that is stimulating to people, rather than depressing.

The third thing is that we are spending a great deal of time and energy, as we should, on environmental management today. I believe we must recognize through incentive taxation for homes that this type of management of home property is part of environmental management. It provides green areas. You can get into the whole biological balance and all sorts of areas. But it is a very major and contributing part of environment. Again, it should be an incentive rather than a punitive approach.

I feel also that this applies to industry. I believe that if you look at the figures, you will find that industrial developments don't change hands that much. In other words, a company will go into a community and make a major investment. It is established there, and it may remain there for many years, almost ad infinitum. These companies should be encouraged by the municipal officials to upgrade the appearance of their property, to landscape, to put their parking at the back, where possible, so that our industrial areas can be, should be and will be an aesthetic advantage to the community in terms of the benefits to the local community people and, secondly, in terms of environmental management. Once again, once their basic assessment is established and they are there and they continue these improvements, then I believe we should entertain a policy whereby there would be an opportunity to offer them some form of incentive to keep it up and to improve it.

Speaking of the Assessment Authority, Mr. Chairman, I would like to mention this. I don't want to sound overly critical. I certainly am a great respecter — and I have said it many times in this House — of many of the professional civil servants.

[ Page 1042 ]

But there is a problem with public relations and public courtesy in the Assessment Authority. I don't know how widespread it is in terms of every individual, but I do know there is enough concern on the part of the public that several members are having this brought to their attention.

This is the attitude of some of the assessors when they go on to people's private property, into their homes: either, "So what are you complaining about your taxes for? You're rich"; or, "Aren't you lucky to have this? You should be willing to pay your taxes." In other words, it is a negative attitude, it is a discourteous attitude, and it is an attitude of adjudication, which is not their prerogative or their business.

No one knows when one sees a person's home that is a nice home, and well cared for, and beautifully landscaped, whether this is the result of the fact that they have wealth and they can afford a gardener and a repairman, or, in fact, the result of their priorities. The assessor himself may like to frequent the pub three nights a week, have a boat and a number of other things, whereas the private homeowners may have their priorities as their home. It may be really financially very difficult for them to develop this home. That is where their family priorities are, and they shouldn't be punished for it, nor should they be the subject of ridicule, rudeness or adjudication by someone who is, in essence, their employee.

So I would ask the minister, without in any way damaging the whole reputation of the Assessment Authority, if he would ask them to embark upon a public courtesy and public information programme. If it is not acknowledged by individual members of the Assessment Authority, then the public should have the right to make this known and name the individual, and that individual should be probably removed from that position. I would think that would be fair justification for movement to other employment.

The last point that I would like to bring to your attention, Mr. Minister, is again in the area of assessment and zoning. That is the problem we are having in many areas of the province — certainly in the North Okanagan. I think it has been mentioned by others, but I would like to draw your attention to it today.

You have people who have agricultural land in small parcels. They are zoned into agriculture in terms of the regional plan or the municipal zoning, and they are in the agricultural land freeze. Yet they are taxed as either improved properties or development properties. In other words, there is a false taxation in effect in certain areas of British Columbia. There can be no justification for this approach.

At this time there is no avenue through which the municipality can make alterations. So I would ask the minister if he would be prepared to see that there are provisions so that land that is in the land freeze, that is agricultural, that is zoned into agriculture, can be assessed on that basis rather than as improved property or development property.

The second point of concern — and I don't know the solution — is where there may well have been commercial land which has been down-zoned in order that the municipal council can bring in land-use contracts or bring in other types of development tools. This property is down-zoned, but its use hasn't changed. The use it was in may well have not been compatible with its taxation then, but is still compatible with the use that it is down-zoned to. But in fact, the taxes and the assessment are not reduced accordingly.

So we have two rather grievous movements in this area: (1) the use of zoning and downzoning to gain control, which may well reduce the capability and the capital value of that land, as well as the income value; (2) there's no adjustment of the assessment or taxation of that land.

I would hope the minister could advise whether there is some avenue through which these people can have a more equitable situation.

HON. MR. WOLFE: Mr. Chairman, dealing with some of the last questions raised first from the member for North Okanagan (Mrs. Jordan), she mentioned the need for incentive for improvements by householders and how it worked against the system for this kind of effort would produce increased assessments. This is certainly a problem in the entire system of assessing homes particularly, and we've given this a lot of thought. All I can say at this stage is that we're studying it, but what you suggest does fly in the face of the basics of the assessment valuation system where, if one home is better than another one, it's worth more on the assessment roll, it's worth more in the marketplace, and so on. But I certainly agree with your proposition. We should not be providing a disincentive to people to improve their properties both externally and internally.

You mentioned the Assessment Authority and the indications of improper attitude in certain places. I know that the head of the authority is aware of this; you've made him aware of this. He is following up, and I certainly will see that that is done.

You referred to the matter of land in the land freeze. This is a concern of many members. As you and all members know, there is further legislation proposed which the House has not had an opportunity to review yet. I mentioned this yesterday; it is in the system and we hope to be bringing forward this legislation at an early date. Perhaps that is something we could discuss further at that stage. What you're actually saying is that this kind of property involved inside of a land freeze

[ Page 1043 ]

should be separately treated from normal farmland, rural property, et cetera.

I certainly would not want to sit down without referring to the member for Victoria (Mr. Barber) and his comments earlier. I don't know where to start except to compliment him on his performance; it was academy award stuff.

AN HON. MEMBER: Oh, come on!

HON. MR. WOLFE: Yes, I want to compliment him.

Interjection.

HON. MR. WOLFE: He's a little way away from facts — almost 180 degrees.

Interjections.

HON. MR. WOLFE: No, no. First of all, he's referring to the fact that the grants have not been increased. At least he tried to transfer the fact that grants, based on 15 mills, should have been based on $2 million rather than on $630,000. So what he's suggesting, I think...

MR. BARBER: You haven't kept your promise.

HON. MR. WOLFE: ...is that we should be paying Victoria for grants in lieu of taxes on provincial properties based on 100 per cent of the values of those properties. That's exactly what your formula suggested, Mr. Member. On comparison that would say that any local resident should pay on the basis of 100 per cent of his property. A property worth $100,000, at 48 mills, would mean taxes would be $4,800. Now is that what you're proposing?

You're nodding your head. I think what you're suggesting is that the provincial government pay on the basis of 100 per cent but local residents don't. You're proposing a different system than would apply to anyone else. Far, far greater.

MR. BARBER: Neither I nor the mayor said that.

HON. MR. WOLFE: In this whole debate regarding treatment of local municipalities, we shouldn't ignore what has taken place in estimates this year because I think, by and large, municipalities have received better than average treatment to other people involved in the provincial budget. I would suggest that the member look at vote 197 — grants to municipalities, including the per capita grants, revenue sharing — which shows an increase of $15 million, or 12 per cent. So to be fair, one has to consider that Victoria, like any other municipality, is enjoying, or will enjoy, the benefits of those increases in terms of other things than the grants in lieu.

Furthermore, I'd like to mention, before leaving this continuous debate on grants in lieu of taxes, that often reference is made that the federal government pays on the basis of the full mill rate and the provincial government does not. Keep in mind, Mr. Chairman, two important facts. The federal government exempts far more local properties than does the provincial government in calculation of the assessment base for this purpose. For instance, in the city of Victoria, the federal government, in the calculation of what they pay in lieu of local properties, exclude wharves and docking facilities. In greater Victoria, just as examples, they do not include Royal Roads school or the naval yard drydocks. These are just examples of local properties owned by the federal government which they do not include in their assessment base.

Furthermore, in the calculation of the grant that they pay, they base theirs on one-half of the value applied to provincial government properties. So they do not pay on the basis of assessment, as is allowed to take place in the case of the provincial argument.

I might say also, as has been said by the other ministers, that in this coming year Victoria has enjoyed certain other subsidies. For instance, the Minister of Municipal Affairs and Housing (Mr. Curtis) has reduced the requirement for subsidized housing. This was eliminated at a saving to Victoria of $100,000. Then $400,000 a year goes to the Capital District Commission. No other municipality receives this type of benefit.

There's $500,000 in works in the Inner Harbour. No other city receives these kinds of benefits. Mr. Chairman, the member referred to the Assessment Authority and the fact that we failed to take action. I can only say that we did — this entire House — approve a bill that was passed amending section 24 which, in effect, for the year 1977, opens the door to reduction of assessments. He didn't point this out in mentioning the actions that have been taken with regard to the current situation.

Coming down to the last item you mentioned, Mr. Member, which was Can-Cel, this matter is before the supreme court in the nature of two appeals, one by Prince Rupert, one initiated by the Assessment Authority, and just now the government has extended the time limit allowed for that appeal to the end of March to give them lots of latitude. I think that's the place for a matter of that type to be resolved, not by interference by this minister.

MR. BARBER: I'm aware of the course of the appeals and I, like my colleagues, have voted in favour of the amendment which was brought in so hurriedly by that particular minister. I'm well aware of the implications of it. What I'm trying to establish is a concern of policy and a failure of leadership, Mr.

[ Page 1044 ]

Chairman. I think that's been fairly well documented. It has large and considerable implications for taxpayers throughout British Columbia. The minister carefully — and, I presume, purposely — chose to ignore the implications of that debate. The City of Prince Rupert, at the moment, is still stuck for three-quarters of a million dollars, and the proceedings at the supreme court may result in their continuing to be stuck for three-quarters of a million dollars.

The obvious argument therefore, Mr. Chairman, is precisely this: is the minister willing to allow that municipality — or any other — to be put in such an untenable position? They are not just stuck with the three-quarters of a million, Mr. Chairman. They are also stuck with court costs. The people of British Columbia, through the Assessment Authority, are also stuck with court costs. There are a number of payments, quite above that, which Can-Cel is refusing to make at the moment which the people of Prince Rupert, directly and indirectly, will have to absorb. Were the minister taking action when he should have, long ago, things need not have come to this state. We would not today be dealing at the supreme court when, in fact, had we dealt more thoroughly, and that minister more properly, in this Legislature with the problem, such an aspect of it would never have arrived at all.

HON. MR. WOLFE: I don't agree with you, but carry on.

MR. BARBER: I appreciate that you don't agree, but that happens to be our position and, by the way, I believe it's also the position of the City of Prince Rupert.

Interjection.

MR. BARBER: I've already mentioned I'm speaking on his behalf because he's conducting the people's business on a most important project.

Interjection.

MR. BARBER: You didn't think that when you were in opposition and your own leader was never in the House.

Interjection.

MR. BARBER: Come on!

MR. BARRETT: He's in the Cariboo, checking on some highway contracts.

MR. CHAIRMAN: Hon. members, the second member for Victoria has the floor.

MR. BARBER: Thank you, Mr. Chairman, I'd like to continue to review this failure of leadership, if I may, and later on to talk about the problems of any capital city in any province in Canada because they really are quite unique. Any absurd Socred suggestion that the capital city be somehow put up to tender surely will not be taken seriously by even that minister.

MR. BARRETT: One of Sam Bawlf's ideas.

MR. BARBER: In the throne speech, we read on page 5 this line, and I'll be very brief: "At this session you will be asked to approve legislative proposals to provide a formula for sharing between my government and local governments."

This is another one of the very odd jokes. The minister maintains that the people of British Columbia, through their municipalities, have benefited in some substantial way. He conveniently neglects to point out — as we will later be pointing out — that the operating grant to the B.C. Assessment Authority has been cut by the provincial government by $3.1 million this year. What that means is that municipalities will have to make up the difference. He didn't tell us about that particular act of generosity because it doesn't serve his political purposes to do so. In fact they've been stuck. If I may point out again, it's that kind of two-faced and two-fisted government with which we're previously and presently familiar. They give with one hand and they take away with the other.

Interjection.

MR. BARBER: The whole package — $3.1 million? What kind of sharing is that?

Interjection.

MR. BARBER: You call that sharing?

MR. CHAIRMAN: Hon. members, kindly address the Chair.

MR. BARRETT: You're on bald tires, selling old used cars.

HON. MR. WOLFE: You're purposely confusing the House.

MR. BARRETT: Oh, listen to who's talking! You're talking to a used-car salesman now.

MR. CHAIRMAN: The second member for Victoria has the floor.

MR. BARBER: Not only have they received advice

[ Page 1045 ]

from the Assessment Appeal Board, from the council of Prince Rupert and from this Legislature, but they've also received advice from the Union of British Columbia Municipalities which, in its newsletter, shortly after it became clear that the minister was flopping entirely in his dealing with this particular problem, published the following under the title "Assessment Ruling":

"Finance Minister Evan Wolfe told the Legislature the government will not interfere with the B.C. Assessment Appeal Board's ruling that allowed a Prince Rupert firm, Can-Cel, to avoid paying $784,000 municipal taxes last year after the Pollution Control Board ordered it to implement costly pollution control measures.

"Mr. Wolfe also said that the government has no plans to amend the section of the Assessment Act which permits corporations not to pay municipal taxes for taking certain pollution control measures. He added that any corporation ordered by a provincial board to spend money could use the same loophole.

"Prince Rupert council advises that the sum Can-Cel thus avoided paying in taxes will now have to come out of the pockets of all local taxpayers. The ramifications of the Can-Cel ruling are far-reaching and will be closely examined by the UBCM executive immediately."

Now that's how much confidence the UBCM has in this particular finance minister's leadership, Mr. Chairman. After all of that and this advice, the minister continues to fail to announce the kinds of policies that are necessary today in order to protect municipalities like Prince Rupert.

All of these people have advised him, Mr. Chairman, including these respected members on the opposition benches and, as usual....

AN HON. MEMBER: Name one!

MR. BARBER: I could name all of them but I wouldn't want to bore you.... The minister has continued to fail to act. Let me point out again the implications of this particular precedent, Mr. Chairman. The Pollution Control Board, the Workers' Compensation Board and other regulatory agencies in this province have the authority to compel corporations to make certain changes in their plant and facilities. The implication of this minister's failure is that agencies of government like the Pollution Control Board and the Workers' Compensation Board may, by simply doing their job properly, compel municipalities like Prince Rupert and cities like Prince George and Victoria, to pay, on behalf of those businesses, for the clean-up of their industries and the improvement of their facilities.

It's not fair, Mr. Chairman. It cannot be defended. The minister's failure to act cannot be excused. He brings in an amendment and announces no policy. He makes no commitment whatever in this House or, to my knowledge, anywhere else to defend the interests of those taxpayers in those municipalities. Indeed, here we have in UBCM's own newsletter a very substantial and powerful attack on that minister's failure to act in a responsible way. I for one do not want to have to go back to the council of the city of Victoria and tell them that they have no protection when the Pollution Control Board goes after B.C. Forest Products on the Gorge Road and orders certain improvements. They can have the cost of those improvements borne by the local taxpayer and not by the company itself. If anyone has to do that, it should be the minister. I'm not aware of any response that the minister has made to the City of Prince Rupert. I'm certainly aware that his failure to act has been viewed as most unsatisfactory by them. This is a dangerous and costly precedent, Mr. Chairman. One wonders if the minister even comprehends it. One wonders if the minister even realizes the implication. May I say it for the third time? It now means that any regulatory agency of government simply doing its job properly by compelling businesses to clean up their acts may result in local municipalities and not the businesses having to bear the cost on the burden of those decisions.

AN HON. MEMBER: Shame!

MR. BARBER: The Pollution Control Board did a proper job ordering Can-Cel to clean up. The minister has done a wholly improper job permitting Can-Cel to wiggle out of it. The minister has failed to act responsibly and must account to this Legislature for that failure. It's a very grave mistake and I hope he makes amends. I'd like to repeat that all of these remarks were made on behalf of the member for Prince Rupert. I would like to repeat that he, personally, and the municipal council of his own city are extremely concerned about this issue and are looking for more leadership from the Minister of Finance. They're looking for more answers from the Minister of Finance and they are not satisfied by being told:

"Well, it's in front of the Supreme Court and we'll see what happens. Well, we introduced an amendment and it does allow certain exemptions, although we are not prepared to announce any. Well, it does mean that something or other could happen, but, gosh, we're not prepared to take any action ourselves because that would be interfering."

The job of this minister is to exercise leadership and develop policy. The job of this minister is to

[ Page 1046 ]

protect these municipalities. He hasn't done it.

The third and final point I want to bring up has been raised by other members and I've raised it before myself. The minister tells us that it's part of the revenue-sharing plan of the province of British Columbia to force municipalities to pick up an extra $3.1 million this year.

Interjection.

MR. BARBER: That's one heck of a plan, Mr. Chairman. That's a remarkable strategy. I'm sure they're very impressed. They must have wakened up with smiles on their faces when they read it that morning. They read it in the papers because the minister didn't tell them. They read it in the papers because he didn't notify them directly at all. They read it in the papers because eagle eyes in the opposition benches and in the press gallery found out that they were going to be stuck for another $3.1 million. Is that what they call revenue sharing? Is that the definition of it? It's not defined anywhere else. It's not defined in the throne speech — just vague and rambling references to their hope, fond and unrealized, that revenue sharing would be introduced in this province.

In the city of Victoria, this so-called revenue sharing results in the people of my city being faced with a $75,000 increase this year. In the municipality of Saanich, represented by no less than the Minister of Municipal Affairs and Housing (Hon. Mr. Curtis), the extra cost will be $80,000 to $100,000. In the city of Vancouver, it will be some $600,000. Is that what they call revenue sharing? Is that the revenue sharing that Minister of Municipal Affairs has been talking about?

Now it's no secret — I've raised this before — that the mayor of Saanich and the Minister of Municipal Affairs are not close personal friends. Even so, surely it's not necessary for the mayor of Saanich to have to be stuck by that government with an extra bill of $80,000 to $100,000 just because they don't get along. Surely the MLA for Saanich would be a little more concerned about the people of Saanich.

The argument is simply this: thanks to that minister, Mr. Chairman, the municipalities of British Columbia are being stuck this year with an extra bill of $3.1 million for the Assessment Authority. In the budget, the Assessment Authority's operating grant from the province has been cut by $3.1 million. Someone has to make up the difference. The Ford Foundation, I presume, has not been asked for a grant. I haven't heard of an LIP programme winging in from Ottawa to make up the difference. I presume God has not dropped a pot of gold on the floor of the Legislature for the municipalities to pick up. Someone makes up the difference. It's the municipalities.

The Minister of Municipal Affairs, by what bitter irony, finds that in his own municipality he's under attack because they're being stuck for a bill for $80,000 to $100,000. In my own riding, the bill is $65,000. That's revenue sharing, eh? That's what the promises resulted in? Big deal! What a promise! What a way to keep it! Big deal and good show — $3.1 million bucks!

How does the minister justify that? How does he call that revenue sharing? Part of a strategy, a piece of a plan, part of the whole pie, he tells us. He sounds like the Minister of Economic Development (Hon. Mr. Phillips). "We have a big strategy. Just don't ask us to tell you what it is; it'll be coming down along. We'll announce it in time for the next election — don't worry."

It is not satisfactory. Let me review it. They have failed to keep their campaign promise to the people of Victoria. They have failed to pay their full and fair share of property taxes. Had they kept that promise, I'm sure they would have been the first to tell us. Had they kept the promise, the minister would no doubt have stood up in this Legislature and told us they were doing so. Had they kept the promise, my colleague from Victoria would have been running to the mayor of Victoria and saying, "Hey, guess what? I finally got it out of them. I kept my promise; they've agreed to keep their end of the bargain. Gee, we're paying our property taxes this year." You bet! If they'd kept their promise that would have been headlines, and I would have been the first to congratulate them. They would have deserved the headlines; they would have deserved every word of type; they would have deserved every photograph with the minister's arm around the mayor, saying, "Here's your cheque; we're keeping our promise." The fact is they have kept no such promise; there have been no such announcements; we have seen no such progress.

Any attempt to pretend that the CIDC — the Capital Improvement District Commission — somehow should be construed as a way of keeping that promise is absolutely foolish and unbelievable. If I could remind the minister, as it happens I was a member of the CIDC for a while and I know just how it works. It does not apply its funds exclusively to the city of Victoria. It applies them to what's called the capital improvement district set up by a special piece of legislation under the previous Social Credit government.

It is well known to any competent authority on municipal government that capital cities are in unique and sometimes very troubling positions throughout Canada — they are in any jurisdiction. They have unique problems that require unique solutions. There is a Capital Improvement District Commission and I'm glad we have it. To pretend that the grant to that commission somehow honours their promise is

[ Page 1047 ]

completely unbelievable, and it certainly does not satisfy the mayor of Victoria.

To pretend that $500,000 worth of new construction on public works in the city of Victoria somehow honours the promise is equally foolish and unbelievable. In fact, it adds to the problem. As my colleague from Victoria has properly pointed out during the campaign — but not so much since — the more office space that goes up, paying only 15 mills instead of 45, the greater the difficulty for the city of Victoria. To tell us that by putting up another building you've somehow solved the problem is nonsense. You have added to the problem.

[Mr. Schroeder in the chair.]

It's not by any means just the city of Victoria that's faced with this particular difficulty. The B.C. Assessment Authority on March 8, 1976, provided to me seven pages — page after page after page of property holdings in the city of Victoria.

Suggestions that the city be held up for tender and the capital be put elsewhere don't solve the problem either. There is only one capital city. There was only one body of promises made by that party. Had they kept their promises they would have been the first to announce it. They've done no such thing. I wonder why they haven't kept those promises, Mr. Chairman? I wonder why they haven't made those announcements?

Their failure to do so, I believe, will cost them hundreds and potentially thousands of votes in the next campaign. Surely that message will get through. That's the last one that I want to leave. If they don't understand anything else, if they don't know the meaning of a promise and the consequence of their failure to keep it, they understand votes, Mr. Chairman. I know you do. You got re-elected; you understand votes. You know that if you promise a whole people in a capital city — the only one we've got with all the special problems and aberrations that any such jurisdiction contains — you're going to pay your fair share of property taxes, and when you're into your second year of government and you still haven't done it, you're in big trouble.

My colleague from Victoria (Hon. Mr. Bawlf), much as I like him, is in big trouble. He hasn't kept that promise, and the mayor and the council are furious. His own supporters are angry and embarrassed. His own supporters wonder why it hasn't been kept.

You're going to talk about repetitious debate, Mr. Chairman. Don't worry, I'll head you off by telling you that I think this minister appears to have no significant comprehension of the unique problems of any capital city. If so, he hasn't exercised it in any serious way at all.

There are other cities in British Columbia that also have provincial government property in them. There are also other cities with universities, with B.C. Rail facilities, with B.C. Hydro facilities, with Crown corporations and agencies, with other offices of the provincial government, that are in the same position. Other members of this side of the House will be defending their cities. Hopefully, backbenchers on that side will do the same.

The McMath commission quite properly and responsibly examines all of that. They suppressed its recommendations as long as they could. They got it in just under the legal deadline, but now at least we have it. Those recommendations must be acted upon in a serious way by that minister.

All the same, on behalf of the people of Victoria, I'm reminding that government that they made a promise. They're into their second year of government and they have yet to keep it. They surely would have told us if they had. They have no excuse for failing to keep it. I hope that one day soon the minister will stand up and admit proudly that they have recognized the failure and the error of their ways, the forgetfulness of their promising, and announce that they've kept it after all. They've certainly not done so so far.

MR. WALLACE: Mr. Chairman, I appreciated the minister's further comments at the start of the debate this afternoon regarding this whole sorry area of federal cost sharing. I've been doing a little more research on some of the figures. I just want to ask the minister if he would confirm some of the serious financial problems which will be facing this government or any government in the next few years as a result of the federal-provincial agreement.

The minister confirmed yesterday that the cash settlement part of the agreement would be $2.5 billion, and that in subsequent years the amount of cash Ottawa would provide for hospital care, medicare and post-secondary education would be related to the gross national product. I have just been checking out the figures in British Columbia. From 1973 to 1974 the gross national product increased by 16 per cent, and our hospital costs for that same period increased by 34.5 per cent. These are figures that I am quoting from direct inquiry of hospital programmes.

HON. MR. WOLFE: What period was that?

MR. WALLACE: It was 1973-74. The gross national product that I'm quoting from is from Statistics Canada. They give the figure in constant dollars, but I've worked it out in percentages because I know the hospital costs are in percentage figures.

In 1974-75 the gross national product went up by 14 per cent. In British Columbia the cost of operating hospitals went up by 32.6 per cent. In each case, taking these most recent years as figures, our cost of

[ Page 1048 ]

operating hospitals went up at exactly double the rate at which the federal government is proposing that it should put up its share of hospital costs in the years ahead.

Now I haven't been able to find all the figures to relate this in terms of millions of dollars, Mr. Chairman, but one of the very important reasons for which I think controls must be kept on, and one of the reasons I didn't go into earlier on this afternoon, is the fact that hospitals are extremely labour-intensive. And I'm not referring to the obstetrical department when I talk about labour. I'm saying that 80 per cent of hospital costs are incurred by wages. When we see the disparities between the gross nation product increase and the increase of hospital costs.... It should be possible for the minister's department to work out at least in some approximate way the gap between the federal funds we will be receiving and the increased costs which hospitals and medicare will be facing in this province in the next few years.

I wonder if the minister could tell us what the breakdown on that $2.5 billion is. How much is British Columbia getting out of that cash settlement that was agreed to in Ottawa a few weeks ago? How does that compare with the specific hospital, medicare and post-secondary education payments that we were receiving under the previous formula? It is not being made clear to the people in this province that we took a hosing in that negotiation whereby Ottawa put so many tax points on the table and so much cash on the table and said to the provinces: "Take it or leave it." That's becoming very clear that's exactly how that conference ended.

There's no doubt at all that the rate at which hospital and medicare costs are rising in this province and all across Canada far exceeds the rate at which the gross national product is increasing. While one might take the attitude that the provinces entered into discussion with the federal government and came to an agreement and we must live with it, that's one thing. But I think what is much more important is to try and pin down, from these percentages that I've quoted, the reduction in dollars that we will be receiving which would otherwise be going towards maintaining the standards we now have in our hospitals in this province. It's no good howling and screaming and complaining two or three years from now when we have to go the route that Ontario has just gone by closing down over a thousand hospital beds and laying off several hundreds of hospital workers because of lack of funding. Every minister in this cabinet should be very concerned about that particular issue arising from that financial agreement that will become increasingly obvious and more serious in the years ahead.

In 1974, Mr. Chairman, 288,000 full-time employees were employed in the hospitals in Canada. It is an extremely vital form of employment at a time when unemployment and inflation are our two main problems. But you can't employ hospital workers if the money isn't available to pay them. It's quite clear that, starting next year, the fraction of total hospital costs that this province faces to be paid by the federal government will be much less than in recent years. I wonder if the minister, who is obviously making calculations and having conversations with his advisers while I am talking, could at this point give me some answers as to the approximate reduction in dollars that we can anticipate, compared, let us say, to last year, just in the area of hospital and medicare. Let's be as simple as we can. It means nothing to the people of this province to try and follow all the complicated formulas of tax points, transfers and all the other complicated terminology. What I think is very important and that the people of British Columbia should know is what the reduction in absolute dollars is that we can anticipate to go towards hospitals and medicare next year, compared to what we had last year under the old formula.

HON. MR. WOLFE: Mr. Chairman, I don't know if this would answer the member's question, but if he would refer to his estimates.... For example, for the coming year in the revenue section, on page 65, you'll see there under "Contributions From Other Governments: Established Programmes Financing" — I'm looking at the blue book, Mr. Member — that it's $310.3 million, which is what we term the half-cash portion of the transfer of the programmes during the coming year.

Now the estimated shared-cost programme entitlements for the coming year, had we stayed on in former basis without the transfer of funds, would have been $458.2 million for the three programmes — hospital, medicare and post-secondary education. That's contemplating the programmes continued on a capped basis.

On the other hand, we are now moving into a system with the transfer of personal income tax points and one corporate income tax point. The value of that transfer is some $212.7 million, estimated in the coming year and including certain adjustments —  I won't try to explain — and the other side being the cash portion of $310.3 million that I mentioned, less the levelling amount in the formula and revenue guarantee cash portion of replacement, totalling $44.7 million. I could supply you with a copy of this reconciliation, Mr. Member, if it would be of any assistance. I don't know if that answers your question but you started to show concern over the escalation in the cost of these programmes on a historical basis as related to the lower rate of increase of the gross national product. That is basic to one of the problems associated with the new formula, that in the cash portion transferred to the provinces, it only escalates

[ Page 1049 ]

at the growth rate of the gross national expenditure — which is about the same as the gross national product — and unless we are in a position to control these cost increases which are 80 per cent payroll, certainly, over a period, we will suffer under the financial end of the scheme. It's going to be up to the provinces to show better control in the growth of the cost of these expenditures.

I will be glad to hand to you a copy of this reconciliation.

MR. WALLACE: I certainly would appreciate documentation on this to explain it. When we get to the debate on the ministries of Health and Human Resources, this is such a crucial and fundamental moving of the goalposts, if I can use that corny expression, that a lot of the other debate we will probably have as to items within the ministry doesn't really matter much if we are going to have a considerable reduction of the total amount of revenue available from Ottawa in the first place.

We can sit and argue about priorities within the amount of money available to various ministers, but if we have had this very crucial changing of the formula which reduces the money available in the first place, then we have to try and be as knowledgeable about the consequence of these figures if we are going to make the estimates debate of the Minister of Health and the Minister of Human Resources meaningful at all.

Since 80 per cent of the hospital budgets result from wages — and I presume this government has made that plain to Mr. Pepin and his friends from the Anti-Inflation Board — does the evidence seem to indicate that our concern over the serious problems that would arise from removing controls by having to negotiate wage increases in the hospital field far above the rate at which the gross national product increases.... Aren't Mr. Pepin and Mr. Macdonald and a few of the other federal people who seem so keen to remove controls just as soon as possible aware of the fact that this is almost an inevitable consequence if the controls are removed and wage negotiations conducted in an atmosphere of catch-up result in the escalation of hospital costs? I quoted for 1973-74 and 1975-76.

It seems to me there is just not enough of a dialogue to emphasize that this is one of the crucial consequences that will follow the early removal of controls right on the heels of this new financial agreement, which is very much to the detriment of the provinces and certainly to this province. I would like to know to what degree the provinces at the conference recognized this, protested about it and didn't get anywhere. It seems to me from the Manitoba comment that I quoted yesterday, the federal negotiators said: "Well, that's what we are putting on the table, and you can take it or leave it."

Maybe that has to be our attitude of resignation, but I think it is important that this minister and this government as soon as possible spell out exactly to the people in simple, understandable terms just how much less money we are likely to get from Ottawa in this important area of hospital and health care.

There is one other subject I would like to touch on briefly. I know that banking is basically a federal responsibility, but I am most impressed by the progress of the credit unions in British Columbia. I don't say that just because they have opened a very excellent branch in Oak Bay — which they have. We have repeatedly heard in the budget debate, and rightly so, that it is vital to keep much in the way of savings in British Columbia. If money is invested as savings, it can be put to work, hopefully to create jobs and solve some of our unemployment difficulties.

I would like to know to what extent we have satisfactory consultation with our federal colleagues in the area of banking. I think it is nothing less than shocking that the chartered banks, when they are asked to try and meet the same kind of service to the public that the credit unions do, immediately start screaming that they would have to lower the interest rate that they pay on savings accounts. They were just recently asked to get out of the dark ages of banking by, instead of computing the interest due twice a year, just straining themselves a little bit and compute the interest once a month. We have the credit unions in British Columbia computing interest on a daily basis.

We have representatives of the chartered banks going in front of a committee of the House of Commons in Ottawa in this day of computers and instant feedback and printouts and all the sources of rapid information, saying, "Oh, dear me! If you ask us to compute interest once a month, the cost of doing this will be so enormous that we will be obligated to reduce the interest that we pay to the person with the savings account."

I think it's about time either this province or, better still, the federal government put the chartered banks in their place. The credit unions not only calculate your interest on a daily basis but they even seem to be able to open their doors on a Saturday. Mind you, I suppose their motto could be "Never on Monday," but at least they are open Tuesday through Friday, and Saturday.

It really bothers me that the chartered banks should take this kind of arrogant, threatening approach by suggesting that if they're asked to compete in real terms, and hours of opening, and interest rates, and computing of interest due and so on, this would result in their inability, because of the added cost, to go on paying the interest rate they now pay on savings accounts. I think it's about time that that kind of threat be brought right out in the

[ Page 1050 ]

open by both federal and provincial levels of government.

I just discovered today that Donald Macdonald has postponed further debate on the Bank Act for another six months. Is he scared of the banks? To what degree are we, as a provincial government, able to discuss these matters with our federal colleagues? How recently did we discuss it? Would the minister care to tell us if the kind of interpretation you get in the media is an accurate reflection of the way the chartered banks can threaten the government or threaten investors? Is this six-month postponement related to the hassle they're having in trying to get the banks to come out of the dark ages?

MR. CHAIRMAN: Hon. member, I must remind you that according to the standing orders, we can only debate under this minister's salary vote those areas for which he is responsible and his conduct. It would appear that a wide-ranging discussion on the Bank Act, which is a federal statute, would be improper at this time. I have allowed as much leniency as I believe I can.

MR. WALLACE: Thank you, Mr. Chairman. Yes, I think you've been most lenient.

The point that I started out from was the importance of encouraging savings in British Columbia and that it appears the credit unions have done a tremendous job in encouraging investors, including myself I might say, to put what small amounts of money they can save into credit union savings accounts rather than one of the chartered banks. This is for the very obvious reason that I've quoted.

I just wondered then, to try to keep very strictly to the vote, Mr. Chairman, what policy, if any, this government has in regard to its deposits and its choosing that if it has short-term deposits of $100 million, to take an arbitrary figure — how much of that is currently being deposited with the credit unions in British Columbia. I think this government should be giving greater support to the kind of initiative and fair play and service that the credit unions are giving in this province — far superior, I think, to the banks. I wonder if, as a very legitimate question in this minister's vote, you could tell me, compared to perhaps last year and the year before, to what degree government deposits with the credit unions have increased.

HON. MR. WOLFE: Mr. Chairman, dealing with the last item first, at the present time the provincial government has $28 million on deposit with the credit unions, and this figure was as high as $38 million on the first of this month. Deposits from time to time are put out to tender, and the credit unions enjoy a great respect in terms of their competitiveness and, I think, a more than average share of deposits which are placed. I'm told that it wasn't so long ago that deposits by the provincial government with credit unions were somewhere around $10 million. I think they are enjoying a better proportion today than was the case before.

I know there is some doubt as to whether a discussion of the banks is appropriate under this debate, but I could only say that this has been a continuous discussion at federal meetings and at a recent meeting, late last fall — I think it was November, when just the provinces met in Toronto — they developed a uniform proposal from all of the provinces towards the White Paper on banking, which I can produce. In addition to that, there are certain items of specific interest to British Columbia which we are now developing through a committee for further proposal to the federal minister. I think he's had a considerable number of submissions since the development of the White Paper, and that may be more the reason why he's delaying it than any other, plus the traffic of other legislation they're faced with. But we are preparing a further submission. One important point involved where credit unions are concerned is their requirement to fit into the federal clearing system. The reserve requirements will mean that they have to submit a great deal more money on deposit than they used to. We're asking that this money be placed in each province. That is, in British Columbia the money they would have to increase their reserves by would be invested in British Columbia.

MR. WALLACE: Mr. Chairman, can I just ask one quick follow-up on that? The argument that I've heard presented so often by the chartered banks is that the rules are easier for credit unions and that they do not, in fact, have to have such large deposits in reserve to cover their commitments. Is the minister, Mr. Chairman, telling us that credit unions, after the Bank Act is revised, will have to meet the same deposit requirements as the chartered banks?

MR. L. NICOLSON (Nelson-Creston): Mr. Chairman, I have just a fairly short question. I think one of the mistakes some members in this House make sometimes is that they talk too much on a large, grand scale about negotiations with Ottawa and large things. I've certainly felt that if I can get things down to a small enough and concise enough point, I've found the Minister of Finance to be very, very approachable and responsive. I asked that he consider last year the case of propane gas. Of course, this year in the budget speech he acted upon this. I'd like to say — well done, Mr. Minister of Finance!

Now I have another little thing which we've had some correspondence on, a very small thing, but a thing that's very important to some people. It would

[ Page 1051 ]

seem to be an oversight or perhaps an injustice. I had a little petition from the members of the Nelson and District Diabetic Association and also a resolution of the British Columbia Diabetic Association proposals made to your government concerning the abolition of the 7 per cent sales tax on syringes and other diabetic supplies. I did write to the minister on July 9. I got a very speedy response on July 20 saying that it was under consideration. Almost anything this minister has told me he would take under consideration in terms of sales tax reform he has acted upon. Maybe it slipped my notice, Mr. Chairman; maybe he's already acted upon this. But I would like to ask the minister if he has had time to act upon this or if it is still under consideration.

MR. CHAIRMAN: Shall vote 2 pass?

MR. W. S. KING (Revelstoke-Slocan): No!

MR. CHAIRMAN: The member for New Westminster.

MR. COCKE: Good heavens, Mr. Chairman! Imagine asking a question like: "Shall vote 2 pass?"

MR. KING: That minister hasn't justified his salary.

MR. COCKE: I hate to stand up in this House and ask the kinds of questions that I must ask him, because, Mr. Chairman, the other ministers, whom I feel should be responsible for making a definitive decision to be careful to honour commitments of the past that have been made by this House — not by any particular government, but made by the House.... They are not made, and therefore, Mr. Chairman, bring some dishonour to this House.

Mr. Chairman, in 1973 the member for West Vancouver–Howe Sound (Hon. Mr. Williams) got up in the House and made a resolution that this House should support medical aid for Vietnamese children affected in that holocaust that went on for years and years in Vietnam. The House discussed this resolution. As a matter of fact, I was asked to put forward a government resolution which would generally embrace what the member for West Vancouver–Howe Sound had put forward at that time.

Mr. Chairman, the House voted on the resolution. Some of the money was spent — $300,000 out of $2,250,000 roughly. I recognized that the total amount would have been spent had not the Vietnamese situation blown up and the committee, an all-House committee....

Interjection.

MR. COCKE: Look, how this gets into finance I'll certainly very quickly tell you.

This all-party committee decided, in its own wisdom, that they could not spend all the money at the time because Vietnam had really blown up. It wasn't until after the December election in 1975 that things began to get back to normal where the money could once again be spent. Members such as the member for Oak Bay (Mr. Wallace) were on the committee; members such as the now Minister of Labour were on the committee. The member for Comox was on the committee; I happened to be on the committee as well.

We've all received a good deal of mail, Mr. Chairman, about this whole question. Why didn't we spend the money, the mail says, with the change of government? Well, the message that is going out from the now Minister of Health (Hon. Mr. McClelland) is that there was no money. Mr. Chairman, I suggest to you that when this House passes a resolution around finance.... The House unanimously passed that resolution on finance. The money is there if it's prioritized by the new government. If it isn't prioritized by the new government, Mr. Chairman, then I suggest to you that the new government isn't carrying out a commitment that was made by the whole Legislature.

Mr. Chairman, you're looking at the vote, I presume, that we're looking at at the present time. I want the Minister of Finance to tell us definitely why it was suggested by one minister at least, the Minister of Health, and possibly another minister, the Minister of Labour. Although I've never heard him say definitively that the money was not available for the Vietnam situation, I've certainly heard the Minister of Health. It has been reported to me that he has told people definitively that the money wasn't available, and therefore we're ignoring a commitment made by this Legislature in 1973.

Now I'm just asking the Minister of Finance how one of the ministers of that government can make a statement that the money is not available. Let's not go through the Clarkson Gordon high flyer; let's not go through that kind of situation. Let's tell me definitively if there's and good reason why we can say that money wasn't available when this new government took over and the new Minister of Finance took his place as Minister of Finance in the government of B.C.

HON. MR. WOLFE: I think the member is aware that this matter was debated in 1973. No funds were set aside at that time or since for the provisional payment of $2.25 million. That's about the only way I can answer your question, Mr. Member. There were no funds set aside under the previous government, or up to this day in fact, for the provision of the payment of that obligation.

[ Page 1052 ]

MR. COCKE: Well, Mr. Chairman, I can understand that. There was no vote set up for it, but it was a resolution passed by this House. Being a resolution passed by this House, that automatically sets a priority on that much money.

There was discussion on whether we should take it out of the $5 million in the agricultural.... But that was food and there was only so much of that available — only $1 million, as I recall. But that doesn't matter. When you require the money, you go to general revenue and you get the money out. As a matter of fact, a couple of times I've thought to myself of talking to the deputy minister or the minister, or somebody down there, just to make sure that we were getting interest on the money that we weren't spending, the money that could very well have been allocated irresponsibly.

The Minister of Labour recalls very vividly why we did not allocate the money at the time. We didn't because the situation in Vietnam was far too inflamed at the time. We felt that the money might be wasted and therefore we wouldn't be doing our duty to the people of British Columbia. But when the thing was resolved in that area, generally speaking, it strikes me that the new government, who had this time almost a three-party position on that committee, could very well have seen to it that priority was put forward — if necessary to even make a vote of it. That money was there so the committee could be reactivated and not be treated offhandedly by the Minister of Health, who said there's no money available, as if he didn't care. Everybody then in the House favoured the resolution, and that meant the now government was relatively well represented by a number of parties.

I suggest, Mr. Chairman, that committee be reactivated as quickly as possible and that the money be found. It was thought to be a priority then; I suggest to you that it's thought to be a priority now. There are wounded children in Vietnam, children who had absolutely no responsibility whatsoever for that disaster. We've played a very small part in picking up some of our responsibility in the Third World particularly.

I suggest that the Minister of Finance now stand and say he at least will support the position that I've put forward, since his opposite number in Health seems to disregard the significance of this particular area.

HON. MR. WOLFE: I would only ask the member in return, with respect, that if this resolution was passed during their tenure in office in 1973, and if he did feel so strongly about it at that time, why did he not take action to set these funds aside in some kind of a fund or reserve?

MS. BROWN: He just told you why!

HON. MR. WOLFE: There's nothing been set aside. It was within his tenure in the former government to take this kind of action.

MR. COCKE: Mr. Chairman, I have a good deal of respect for the Minister of Finance, but it strikes me that the Minister of Finance didn't listen to what I was saying. I felt that one could depend on the Ministry of Finance to see to it that a commitment is kept. I didn't need to worry when we were government that a commitment would be kept; it would be.

I didn't have that concern, and have to ask that Minister of Finance to make up a special portfolio for money or reserves, when most of the money, I understand, is kept in the treasury. I never thought, nor did the rest of the committee...an all-party committee. Not one person, as I recall, walked up to me in those days and said: "Let's make sure that we've got an allocation." We felt that the allocation was made by this House. We felt that the people in this House who, incidentally, happen to be omnipotent around such matters....

MR. R.L. LOEWEN (Burnaby-Edmonds): Pardon?

MR. COCKE: That's a little too big for you, son, but we'll get to you with your English instructions later, just before 11 o'clock.

MR. CHAIRMAN: Order, please, hon. members.

MR. COCKE: Aside from that, Mr. Chairman, we didn't feel that we were threatened. And I suggest right now, Mr. Chairman, that it would only be in the service of our province and its integrity that one or two of the ministers across the floor would get up and suggest that they will put forward this resolution again. The reason I say that, Mr. Chairman, is as follows: I don't think that if I put this resolution forward it would carry any significant weight any longer. But I think that a minister of the Crown putting forward this resolution now would be certainly serving the provincial needs.

APPOINTMENTS TO
WORKERS' COMPENSATION BOARD

HON. MR. WILLIAMS: Mr. Chairman, I would ask leave of the committee to make a brief statement.

Leave granted.

HON. MR. WILLIAMS: Mr. Chairman, I wish to announce to the committee that the Lieutenant-Governor-in-Council has today appointed Dr. Adam S. Little as chairman of the Workers' Compensation Board. At the same time the order

[ Page 1053 ]

provided for the appointment of provincial court judge Jerome Paradis as vice-chairman, and two new commissioners — Mr. Sam Brown, who is research director for the Teamsters' Joint Council, and Mr. Dennis Davis, a consultant to the construction industry. Dr. Little has been director of medical services of the board since March, 1974. Prior to that time he was associated in various capacities at the University of Alberta.

Judge Paradis was the first administrative chairman of the boards of review under the Workers' Compensation Act. He served in that capacity during the year of the formation of the boards of review and was elevated to the provincial court bench in February, 1975.

Mr. Brown has been research director of the Teamsters' Joint Council No. 36 since 1964, and during that period of time has led a distinguished career in health and safety matters with respect not only to his union, but to the workers generally in the province of British Columbia.

Mr. Davis has been a private consultant to the construction industry for the past five years. From 1964 to 1969 he was an executive vice-president of Peterson Electrical Construction Company Limited. Prior to that time he was a member of the management committee of Neonex International. During his extensive and varied background in executive management matters, he served as the executive assistant to the president of the Sun Publishing Company Limited.

All four of these appointments are effective February 18,1977.

MR. CHAIRMAN: Thank you. Just as a matter of order, the minister is aware of the fact that these statements cannot be tabled in committee. If the minister wishes to table such a statement, leave will need to be granted again, when we move into the House.

MS. SANFORD: Mr. Chairman, is it in order to respond then to the statement made to the committee?

MR. CHAIRMAN: By leave. Shall leave be granted?

Leave granted.

MS. SANFORD: First of all, I would like to thank the Minister of Labour for making the announcement to the Legislature this afternoon. This is an announcement that we have been anxiously awaiting for a period of time.

I would also like to say that it's regrettable in my view that the minister did not consult with the major groups — that is, the labour movement, as well as the Employers Council, or the employers' groups involved — in order to ensure that the people that have been appointed would, indeed, be acceptable to both groups. It seems to me that in the interests of public relations this would have been a wise move on the part of the minister.

I would also like at this time to wish the commissioners well, and to get on with the job because they have a very big job in rectifying the problems that exist at the Workers' Compensation Board now. I hope that it is with all speed that they can get on to providing the services to the workers of this province.

MR. COCKE: Mr. Chairman, I certainly don't want to hog the debate this afternoon.

MRS. JORDAN: Okay, you can sit down.

MR. COCKE: The member for North Okanagan....

MR. CHAIRMAN: Order, please.

MR. COCKE: No, I'm referring to this whole question. The member for North Okanagan was in the House — I'm sure I remember her vividly — the day we voted on that resolution. She voted with enthusiasm; she voted with sincerity. Yet now, Mr. Chairman, she suggests that I should let this issue, a very significant and important issue, an issue which to some extent is part of the honour of the Legislature of B.C....

Now, Mr. Chairman, the Minister of Finance says, "Why was not the money earmarked?" I suggested that it was not necessary. I whispered over to the old Minister of Finance: "Should we have earmarked that money? Should we have tied a tag to it?" He said, "Why would you?" or "Was it necessary?" or words to that effect. There are ways and means, particularly when everyone is informed of the fact that money is necessary to fulfil an obligation.

But one doesn't have to put it in a special drawer or earmark it a special way. I'm sure that the then deputy minister would never have let us get into that kind of trouble. I'm positive he wouldn't. He would have told me; he's an old friend of mine. He'd have phoned me up and he'd have said: "Dennis, you'd better earmark this money." He didn't think anything of it. Neither did I, Mr. Chairman, because I was sure that when the money was necessary, when the Minister of Labour and when the member for Oak Bay and the rest of them decided that things were okay and settled down in Vietnam, the money would be there, available and sent.

So I suggest the Minister of Finance just stand in the House now and say to us: "We're going to talk in cabinet about striking another committee so that we

[ Page 1054 ]

can fulfil the obligation of the Legislature on behalf of the people of B.C."

It's a matter of honour, Mr. Chairman, just a straight matter of honour, to do the thing that we set out to do in the first place.

MR. NICOLSON: I had hoped that the minister could at least respond to the question concerning the taxation on diabetic supplies. I've tried to keep things in a very manageable, concise form, Mr. Chairman; I'm speaking directly to the minister's area of responsibility.

The minister has certainly had ample warning of the question. He told me it was under consideration on July 20. This might very well be something that has slipped by my notice. Perhaps the minister has acted upon this; perhaps he also acted upon this when he modified the rate of sales tax on such things as propane gas. I would like to know if it has been done, or if it's still under consideration, or if there's perhaps no intention to do this for some reason or other. Perhaps the minister could respond to that.

HON. MR. WOLFE: In response to the member who asked about diabetic supplies, I can indicate to him that the matter is under more active consideration. We have had a number of people bring this to our attention. I'll have to check a little further on the ramifications.

There are cases involved in medical supplies and medicaments where it becomes impractical to separate the exemption you request from a multitude of other items which are not exempt. By trying to exempt one that you want to support, you bring in a whole bag of other items which you didn't intend to. So we will have a look at it.

MRS. WALLACE: I want to draw the minister's attention to a slightly different item at this point in time. During the course of his budget speech he commented on the fact that for the first time this government was going to embark on a new method of accounting for office space. On page 16 of the budget he indicated that government building space would be charged out to each department for the operation and maintenance costs of that space.

MR. CHAIRMAN: Hon. member, this question perhaps might better be asked the Minister of Public Works (Hon. Mr. Fraser) when his vote comes.

MRS. WALLACE: Well, Mr. Chairman, if you'll just bear with me for a moment I think that the Minister of Finance is, in my opinion, embarking — it's his baby as it were — on a new method of accounting. Inasmuch as he is responsible for the public accounts of the province, I feel that this is the only opportunity I will really have to bring this up because it relates more to finance than to the specific building space or the actual physical facility. It is rather a matter of accounting for those facilities.

MR. CHAIRMAN: If you limit your debate to the accounting procedures.

MRS. WALLACE: Thank you, Mr. Chairman. Further on in the budget speech, the minister indicated in the next paragraph: "Expenditures for the ministries in 1977-1979 are increased a total of $33 million for the rental charge of government-owned buildings." This is for the first time in next year's budget. Reading that, one might be led to believe that the minister was talking about a total of $33 million for all the operation and maintenance costs of government buildings. But the minister knows, and I know, that that is not quite what he meant, even though a person reading that budget speech could very readily believe that the $33 million was the total cost of operation and maintenance of those government, buildings that was going to be charged for the first time to the various departments.

You know, when a new method or a new thing is introduced into a budget, it arouses a little bit of curiosity. I did a little calculating and checking around because what goes in must come out, so in looking at the accounting of the Department of Public Works — and I'm speaking of the accounting in that department — I see that there is a great deal more than $33 million being taken out of that department and turned over to the B.C. Buildings Corporation. In fact, the total amount for the various items in that department is something like $90 million all told, and I'm wondering just how that figure was arrived at, Mr. Minister, through you, Mr. Chairman. When I go through the various accounts shown in the estimates for all the departments, I notice that in the minister's department, for example, there is something like $1,666,000 charged out for buildings; the Provincial Secretary, $5 million; the Attorney-General, $16 million — this is supposedly all part of this new system, Mr. Chairman — $227,000 for Economic Development; $2.3 million for Environment; $2.3 million for Agriculture; $1.7 million for Transport and Communications; Education, $19 million. Supposedly this is all part of this new plan, Mr. Chairman. At least one would think it were part of a new plan, because it's that separate vote for each separate department within the government.

Mr. Chairman, when I add all these together I come up with something like $98 million. Now that just doesn't add up. We've got $33 million in the budget, we've got $98 million here, and yet transferred over to the B.C. Buildings Corporation we

[ Page 1055 ]

have only $90 million. Now does this mean, Mr. Chairman, that we're giving $98 million worth of money for $90 million in return in the way of office and maintenance and operation? You know, I'm a little confused with these figures, Mr. Minister.

I'm also concerned about the Buildings Corporation itself, and I think that the financing of the Buildings Corporation is something that I can't speak about in this particular estimate because the minister is not only the fiscal agent for that corporation, but he is also one of the interim directors. I'm a little concerned that we are sitting with three interim directors while the Act specifically calls for five. I'm also concerned, Mr. Chairman, that we are turning over this vast amount of money for the maintenance and operation of our office buildings with apparently no strings attached, because the only report that that Buildings Corporation is required to make to this chamber, according to the Act, is that it must present a financial statement showing its assets and liabilitities each year — that's all.

Now I'm curious, Mr. Chairman, if the B.C. Buildings Corporation is going to be subject to the rent ceiling, or are they going to be able to up our rents by 10.6 per cent or more? Are they subject to the rents? Are we going to be faced with rent increases each year by the Buildings Corporation, and how are we going to know? What about this room, Mr. Chairman?

MS. BROWN: Can we afford to stay here?

MRS. WALLACE: Yes, can we afford to stay here? How much are they going to charge us for this room? How much are they going to charge us for this room? Are they going to find cheaper accommodation? The member for North Okanagan (Mrs. Jordan) was suggesting that earlier.

Interjection.

MRS. WALLACE: Yes, he's going to put it out to tender. Is that what the Buildings Corporation is going to do with our costs for our buildings? I suggest, Mr. Chairman, that we have given away the complete control of any accountability for the cost of operation and maintenance of our government buildings. This is a very neat way to sidestep the accountability of government office space, and I am very surprised at the minister.

I can appreciate what he is trying to do; he is trying to charge out in his neat little accountant's mind everything in its right department and in its right section. I am wondering, Mr. Chairman, just how much this is going to cost the taxpayers of British Columbia not only for the extra accounting costs involved in this kind of a manoeuvre but how much it is going to cost. We no longer will have any direct accountability. We are put in a position where the B.C. Buildings Corporation has the complete control over all the building, maintenance, rental and space for the government of British Columbia.

I suggest the Act is very clear. All they have to do is give us a report of assets and liabilities. There will be no requirement on behalf of the Buildings Corporation, unless that minister is prepared to assure us as fiscal agent of that corporation that there is some such provision instituted. I think we are leaving it wide open. I very much regret that the minister has seen fit to take this action without putting in the necessary safeguards.

He has indicated that he is very careful and very cautious about accounting for every dollar by this means of charging back to each ministry the cost of accommodation occupied by them. He is being very meticulous and precise in this accounting. Yet he is turning that money over to an organization which is not accountable in any degree of exactness to this Legislative Assembly in any comparable degree to the way it was when it was under the Minister of Public Works.

I would ask the minister if he would try and clarify this situation for me.

HON. MR. WOLFE: The member for Cowichan is interested in the building occupancy charges which appear in every vote. As we have said earlier — I think yesterday — this could be handled more easily under the estimates of the Minister of Highways and Public Works. He has the complete analysis of this; the charges for these go in and out of his department. Insofar as Finance is concerned, there is a vote in Finance where we are asked to pay for the occupancy charges within our department.

I could explain that by saying that it covers for office space some 150,897 square feet, and for storage space some 27,326. The total charge in the department, including the cost of leases for outside space beyond the properties owned by the Buildings Corporation, is $1,666,000. For government-owned occupancy charges, the minister or the Buildings Corporation will include the costs of operating and maintenance for each building, as well as estimates for the cost escalation. It will include estimated costs for operating overhead and plant maintenance for a zone allocated to individual buildings on the basis of operating costs. Thirdly, the base rent was calculated by referring to the rate per square foot charged by the private sector for comparable space and establishing one rate for each classification of buildings, and applying these rates to the various ministries.

I would refer further information for the member to the Minister of Highways and Public Works.

The House resumed; Mr. Speaker in the chair.

[ Page 1056 ]

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

HON. W.R. BENNETT (Premier): Mr. Speaker, before we move adjournment, I just know that this House would like to take the opportunity to wish a happy birthday to one of the pages who serves us so courteously in such a friendly way. While having to sit through this House must age them prematurely, they do have calendar birthdays such as the rest of us. I hope you will all wish happy birthday to Lisa Steel.

Hon. Mr. Hewitt files answers to questions. (See appendix.)

Hon. Mr. Bennett moves adjournment of the House.

Motion approved.

The House adjourned at 5:51 p.m.

APPENDIX

67 Mrs. Wallace asked the Hon. the Minister of Agriculture the following question:

How much has been spent to date, under your estimates for the current year, for the following items: (a) under Vote 4, Agricultural Aid to Developing Countries; and (b) under Vote 8, World Food Relief?

The Hon. J. J. Hewitt replied as follows:

"Amount spent to date (a) under Vote 4, Agricultural Aid to Developing Countries, $35,073; and (b) under Vote 8, World Food Relief, $1,256,776."