[ Page 1057 ]

CONTENTS

Routine proceedings

Committee of Supply: Ministry of Finance estimates.

On vote 2.

Mr. Cocke — 1057

Mr. Stupich — 1057

Hon. Mr. Wolfe — 1060

Mr. Wallace — 1060

Hon. Mr. Wolfe — 1063

Mr. Cocke — 1063

Mr. Nicolson — 1063

On vote 4.

Mr. Stupich — 1064

Hon. Mr. Wolfe — 1064

Mr. Nicolson — 1064

Mr. Cocke — 1064

Mr. Veitch — 1065

On vote 5.

Mr. Wallace — 1065

Hon. Mr. Wolfe — 1066

Mr. Lauk — 1067

On vote 9.

Mr. Stupich — 1067

Hon. Mr. Wolfe — 1068

Mr. Nicolson — 1068

Mr. Skelly — 1068

On vote 10.

Mr. Stupich — 1069

Mr. Skelly — 1070

Division on vote 10 — 1070

On vote 11.

Mr. Stupich — 1071

Hon. Mr. Wolfe — 1071

On vote 14.

Mr. Stupich — 1071

Hon. Mr. Wolfe — 1071

On vote 15.

Mr. Wallace — 1071

Hon. Mr. Wolfe — 1072

Mr.Skelly — 1072

THURSDAY, FEBRUARY 17, 1977

The House met at 8:30 p.m.

Orders of the day.

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

ESTIMATES: MINISTRY OF FINANCE
(continued)

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

MR. D.G. COCKE (New Westminster): Mr. Chairman, before dinner and before the minister had an opportunity to have any kind of dialogue, I brought up a question with respect to whether or not an allocation would be made to uphold the honour of the British Columbia House. That would be an allocation to fulfil the obligation of a resolution that passed in this House in 1973, a resolution that was introduced by the member for West Vancouver–Howe Sound, who is, Mr. Chairman, probably better known to you now as the Minister of Labour (Hon. Mr. Williams). The resolution was discussed among different members of the House and finally one that could be agreed upon was presented by myself at the time. That resolution was to provide $2.5 million, or roughly that — $2.25 million — to wounded children in Vietnam. I would just hope now that the new government will put forward a similar resolution. I hope that the Minister of Finance (Hon. Mr. Wolfe) has had an opportunity to discuss this with his colleagues.

MR. D.D. STUPICH (Nanaimo): Mr. Chairman, I'd like to discuss a little further this question of the B.C. Ferries financing. I did make reference to this in my remarks yesterday when I suggested that the main reason for this was to remove this expenditure from the budget and also to get the revenue of some $30-odd million into the current fiscal year. The minister, in replying to that, pointed out that it was a very good deal for the province, that in effect, we achieved a financing arrangement that was costing us only 7 per cent and that this, indeed, was an excellent deal for the province. Of course, Mr. Chairman, I suppose that if it were 7 per cent, then I think one would have to agree that it was an excellent deal.

I did put a question on the order paper a few days ago. The answer came forth in time for me to throw some more figures into the record. I note from the reply that the total cost to the province of the three ferries that were sold was some $47,931,000. We made a profit on that, so at least we're ahead. In selling them to this financing company, we sold them for almost half a million dollars more — $48,442,000.

Then we proceeded to leave these ferries back from the agency to which we had sold them at an annual rate of $4,819,800 for a period of 18 years, which adds up to some $86,756,400.

The minister said in all honesty that if we stopped right there it would have been a 7 per cent deal. But he went on to say in his remarks that this did not include the cost of buying back the ferries. That's all very well, Mr. Chairman, but I don't think we can exclude that. Certainly at the end of the 18-year period the ferries would still be very useful for transportation in the province. While it might not be of any particular interest to me as an individual, you're young enough, Mr. Chairman, that it would still be of interest to you and to some other members of the House. So I think we have to take that into consideration.

If we do take that into consideration, if we do calculate that it's going to cost us a total of $86.7 million to rent those ferries back — we're going to buy them back, according to the reply on the order paper, at 17 per cent of the original figure in excess of $8 million — we find that instead of the original $47.9 million, we are paying $94,991,540 for these same three ferries that were paid for to a large extent by the previous administration out of current operating revenue.

Now maybe that was or wasn't wise — it depends on the finances at the time. But, Mr. Chairman, the minister said that this was a 7 per cent financing deal. As I calculate it, if we had invested that amount of money — not the original cost, but the amount we got back, the $48,442,000 — at 10.89 per cent for these 18 years, we would have arrived at this total of $94,991,540.

So in effect, Mr. Chairman, taking into account the final purchase price, we are dealing not with a 7 per cent cost item, but with a cost item at 10.89 per cent. In addition to that, Mr. Chairman, we are locked into an 18-year agreement. Now the way it was before, if we had the revenue in any one year to pay off whatever money we might have had to borrow to finance these out of operating revenue or short-term debts, we could have paid it off at any time at all and saved any further finance costs, but we are locked into this deal at the Tate of 10.89 per cent for some 18 years.

Now, Mr. Chairman, I still have some concern, although the question and the answer would indicate that the final price of buying them back is fixed. As I recall the report that was tabled in the House some 10 or 11 months ago, there was a proviso in there that the company which bought these ferries from us and that would be leasing them back to us would be protected in the event there was any change in the income tax legislation that in any way at all impaired their income. Mr. Chairman, it's not appropriate now, but when the Minister of Transport and

[ Page 1058 ]

Communications (Hon. Mr. Davis) is offering us his estimates, I intend to ask then whether or not we could have a copy of the final lease agreement tabled in the House.

Mr. Chairman, the deal to lease the ferries — while the minister may say it was a good deal, a 7 per cent deal — I still say that it's really a tax dodge. There's no question about it. It was a tax dodge by the company that bought and is leasing the ferries back to us. It's really a ripoff on the taxpayers of Canada and, to some extent, of British Columbia. A ripoff or tax dodge — I think the fact that it is described properly in those words is backed up by the fact that the federal government — the Minister of National Revenue (Hon. Mrs. Begin), if you like — has seen fit to change that legislation to close the door to these kinds of deals. We were able, as the report indicated to us last year, to get in under the wire on this one by hurrying and by getting in before the doors were closed to those kinds of arrangements.

So the federal government certainly recognized that this kind of arrangement was against the interests of the Canadian taxpayers and they closed the door to it. But the B.C. government, in managing to get in under the wire, was taking advantage of the fact that the federal government's legislation had not yet changed. So it was a ripoff. It was a tax dodge for some companies, and the people of British Columbia in effect are paying for that by having entered into this particular agreement.

I deny, Mr. Chairman, that it is a 7 per cent deal.

Interjection.

MR. STUPICH: Mr. Chairman, I hear some interruptions about the CNR. I think we'll have an opportunity to discuss that when we get to the Minister of Transport and Communications. With your permission, I'll leave that, Mr. Chairman, until we do get to that minister.

Interjections.

MR. STUPICH: Mr. Chairman, it's suggested that I don't like the sound and I don't like the answers. Earlier on I offered to the minister an opportunity to discuss issues like this publicly as well as in this forum, and he took that to mean that I prefer not to discuss them in this forum. I'm quite prepared, Mr. Chairman, to discuss them in this forum until the minister is won over to the logic of my arguments, if that's what he prefers. I think he would prefer that we spend a fairly limited amount of time here, but I would prefer that in addition to that we have an opportunity to discuss them outside of this arena where there is an opportunity for the public and the press not just to listen, but to discuss these matters with us.

The federal agreement and the cost to Canada has been discussed to quite an extent by other members. I don't propose to get into that. I do question some of the remarks that, although they are properly under Finance, have been made more by the Premier than by the Minister of Finance. That is with respect to the improved agreements that we have — the DREE agreements and the improved ARDA agreements. I wonder, Mr. Chairman, whether they are indeed improved over what we had previously.

I noticed a story in The Vancouver Sun recently. It was a column of Marjorie Nichols talking about the new ARDA agreement and the improvements that had been obtained or that were being discussed by the Premier and officials in Ottawa. With respect to ARDA, the story reads: "The new cost-sharing scheme under ARDA would require total expenditures by both levels of government over five years of about $55 million." That's both levels. Now ARDA generally is shared 50-50, so that means that the federal government will be contributing, over five years, half of that per year for a total of $5.5 million per year. Now the estimates before us for ARDA would indicate that we expect to get $6.5 million this year. It would seem that the new, improved, better ARDA agreement for British Columbia is going to produce something like an average of $1 million a year less than the agreement under which we have been operating to this point.

The same thing, Mr. Chairman, applies with respect to DREE. It talks about DREE. "A similar five-year DREE plan calls for the expenditure of some $70 million with Ottawa picking up half this bill." It goes on to say that B.C. last year, and the Premier, I think, in particular — I'm not sure about the Minister of Finance — said that B.C. had not been getting its share of money from the DREE programme.

Now we're talking about spending a total of $70 million over five years, which would be shared equally between the federal and the provincial, which would mean that $7 million a year is what we would be getting from Ottawa for a period of five years. Then to say that last year we got only $8 million.... Now $7 million to me, Mr. Chairman, is $1 million less than $8 million, not more. So it would seem that these tremendous improvements that the Premier and the Minister of Finance have been discussing with Ottawa are obtaining for the people of British Columbia $1 million less a year from each programme rather than something more.

Mr. Chairman, naturally I was rather disappointed to hear the minister's evaluation of the B.C. Savings and Trust, but I asked for it. I asked him for an evaluation of the value of this report. I was disappointed Mr. Chairman, when he said he felt the report was not worth — and here I quote from his

[ Page 1059 ]

figures — "something more than $145,000 that it cost us." But the only part of the new programme that he talked about that he related specifically to the B.C. Savings and Trust's report was the one, I think, reading from the Blues here.... He is talking about the new financial management and the cash manager, I suppose, Mr. Patrick O'Neill: "His sole function in co-ordination with Crown corporations is to manage the government's overall cash on a daily basis so that we can examine the proper use of our cash flow with the object of developing the most interest income possible."

Now, Mr. Chairman, admittedly the minister did say that some of this was already under consideration before they saw the B.C. Savings and Trust report, but he admitted also that the B.C. Savings and Trust report helped him in his consideration of this new programme. I would think that if that new programme, for which one person was hired — perhaps more, but certainly one person has been identified as the one responsible for that programme.... If the B.C. Savings and Trust report contributed anything at all in the development of that programme, surely it must have been worth the $145,000 that it cost us. The quotation is actually "more than $145,000." But apart from that, Mr. Chairman, I think we had his evaluation of it.

I know from what he said that there is some material in that report — and I accept his evaluation of that as well — that is confidential and shouldn't be released. I appreciate that. But I wonder whether some of the recommendations or some of the material in the B.C. Savings and Trust report.... After all, it is a report that was paid for by the people of British Columbia. I'm just wondering whether or not at some date the minister would consider making at least some of the information in that report available to the public in the province of British Columbia. Certainly the opposition would appreciate having some of the information available. We recognize the need to maintain some of it as confidential.

With respect to the AIB programme, I have my own time limits at this particular point. I won't get into this in any great detail. I think the point I was trying to make, Mr. Chairman, is that it's something like.... Wasn't it King Canute who tried to hold back the tide? I think he came to the conclusion that it was impossible. I would like our Minister of Finance to come to the same conclusion. With the federal government talking about getting out of the programme at an early unspecified date, with the two largest, most influential provinces in Canada talking about the need to get out of this programme, and a third one that he didn't name.... But with Ontario and Quebec saying "Let's get out of it," and the federal government saying "We're going to get out of it," it would seem to me, Mr. Chairman, that we are indeed going to get out of the AIB programme at a fairly early date. My argument, quite apart from the fact that this government has not really given the support to the AIB programme that the previous NDP administration did....

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: You'll recall, Mr. Chairman, the effectiveness of our price freeze programme. You'll recall, Mr. Chairman, that on previous occasions I have told you that officials from the federal government have looked at the NDP administration with some degree of chagrin. The only administration in the whole of Canada that bit the bullet, that came to grips with this problem of inflation, was the NDP administration in the province of British Columbia when we froze prices for a certain period to allow the AIB programme to take effect with the control of prices.

We were the only administration that did that, and senior officials in the Department of Finance at Ottawa, in speaking to me when I was there as Minister of Finance, said that they wished their own Minister of Finance and the federal government had the intestinal fortitude to come to grips with price control in the way that the government in the province of British Columbia did. We made the programme work for the period during which we were government. This new government backed away from the programme almost immediately. They retained the wage control part of the programme, but they abandoned the price control immediately.

All I'm asking, Mr. Chairman, is that they now recognize that with the federal government backing out of the programme, and with the two largest — economically speaking — provinces backing away from the programme, B.C. must also accept the fact that we are getting out of the programme, and should work to get out of it in the best way in the interests of the people of British Columbia, rather than trying to pull a King Canute and saying: "We'll hold back the tide. We won't let Canada get out of this programme. We'll stop it." We can't stop it. Let's find the best way out of it in the interest of the people of Canada and of British Columbia.

The responsibilities of the provincial government, and here I talk again about the possibility of the minister and myself talking about some of these issues...Mr. Chairman, very briefly, my concern is that this government from its very beginning — that is, after it got over the period of blaming the NDP for everything that had gone wrong in B.C., in Canada and in the whole western world — instead of blaming all of that on the NDP government in the province of British Columbia, should accept the responsibility for what is happening, economically speaking, here in the province of British Columbia.

[ Page 1060 ]

I made the point of adding up some figures from public accounts. I find that by adding together the province of British Columbia investments and the investments of all of the Crown corporations and government agencies, the people of British Columbia own — according to these totals, and they're right; I don't pretend they're accurate to the fourth decimal place — and control, through our elected government, almost $11 billion in assets. The figure I have is $10,788 million — almost $11 billion in assets. There's no corporation in the province that in any way compares with the size of the people's investment in what's happening in British Columbia. According to public accounts, those same assets generate total revenues of almost $6 billion a year. These are public accounts dated March 31, 1976: $5,830 million, almost $6 billion in total revenue a year. It used to be said that when the United States sneezed Canada catches a cold. Mr. Chairman, if the government of British Columbia is not concerned about the overall economic conditions in the province of British Columbia, or is concerned about them and backs away from having any effective input into what is happening, economically speaking, in the province, it has a terribly depressing effect — and it has had in the past year — upon our whole economy. We have to recognize that this government, owning and controlling $11 billion in assets, with revenue totalling almost $6 billion (on figures that are a year old) has a tremendous influence on what's happening in this province.

We talk about deficit financing. We have to get into definitions as to what is deficit financing and what isn't. When is it capital? When is it current operating? And how should these things be financed? But, Mr. Chairman, we can't get away from the responsibilities that the government has for controlling the economics of this province so that there will be a reasonable level of employment in this province; so that there will be a reasonable level of economic opportunity in this province; so that the citizens of British Columbia will be able to prosper and will be able to live economically in this best of all Canadian provinces. The responsibility for that must not fall on something that happened during a period of 3.3 years ago — more than a year ago; not on what is happening in Quebec; not even entirely on what is happening in the western world. A large measure of that responsibility has to fall upon the shoulders of this particular government and, in particular, upon the shoulders of the Minister of Finance of the province of British Columbia. That's what I've been trying to say and that's what I'd like to debate with him publicly.

HON. E.M. WOLFE (Minister of Finance): Mr. Chairman, on the question raised by the member regarding ferries, I don't understand his logic in suggesting that the effective rate of interest on the lease payments on the transaction involving the ferries is somewhere around 10 per cent. The contract calls for 7.09 per cent as the contracted lease payments per annum against the capital cost of $48.4 million for the three ferries. There is an option at the conclusion of the term of the contract wherein the Ferry Corporation has an opportunity to buy back the ferries at that time at 17 per cent of original cost. So if you calculate that repurchase into the total amount of payments, you then come up with an average interest rate of 7.71 per cent over the 18-year term.

MR. STUPICH: It's not logical. Do you think they're doing us a favour to help us out?

HON. MR. WOLFE: Mr. Chairman; the point is that this particular matter which the member throws a cloud over as being illegal was entirely proper under the tax laws at the time. The laws have since been changed...

MR. STUPICH: Why did they change them?

HON. MR. WOLFE: ...but at the time this transaction was entered into by this government....

AN HON. MEMBER: Because the provinces were starting to do what Ottawa has done all along.

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

HON. MR. WOLFE: I might say, with regard to his comments on the anti-inflation programme and this province's position regarding having the programme stay on, that it's interesting to hear the NDP's attitude on the fact that this should phase out when, I understand, Manitoba is now saying — through Premier Schreyer — that it wants the programme to continue after 1977.

Just one last comment, Mr. Chairman, with regard to the fact that this year has been a disaster in the economy of British Columbia: I would point to page 24 of the budget speech where the gross provincial product is shown to increase from $18.3 million to $21.3 million. That's an increase of 16 per cent in the gross provincial product during 1976. That's a very healthy increase for the province of British Columbia, compared to the rest of Canada. Furthermore, capital investment during the same period has risen from 10 per cent. So I think it's utterly preposterous to suggest that the measures that this government invoked have caused a financial disaster and economic gloom for British Columbia.

MR. G.S. WALLACE (Oak Bay): Mr. Chairman, as the debate continues on the estimates of the Minister

[ Page 1061 ]

of Finance there are two or three rather simple points that can be made at this time.

First of all, I think that taxation should still continue to be based on the ability to pay. Without going into a long debate about the merits or demerits of the sales tax, I think that one particular item deserves the minister's attention and reconsideration. I am talking about the sales tax as applied to B.C. Hydro bills. If there's one part of my correspondence from constituents that is taking a very high profile this session, it is not only the very deep concern about the third increase in hydro rates in two years, which is about to be imposed in March, but the fact that as the hydro bills increase there is a 7 per cent tax on an ever-increasing essential service.

MR. CHAIRMAN: Hon. member, I hate to interrupt you but this is a matter better discussed under the budget debate. It seems to me I remember it having been covered at that time. If there is new material to be discussed under B.C. Hydro rates, perhaps it would better be raised under the estimates of the minister responsible for that Crown corporation, with your permission.

MR. WALLACE: Well, Mr. Chairman, you know that I have the highest respect for your duty as Chairman, but on this occasion I have to suggest that very clearly this minister is responsible for the administration of many statutes dealing with taxation, one of which is expected to raise $710 million by March 31, 1977. I would, with the greatest respect, ask whether it is not absolutely right that under this minister's salary vote I should discuss the sales tax.

MR. CHAIRMAN: I cite for you page 725 of the 18th edition of May. It says that: "The administrative action of a department is open to debate, but the necessity for legislation and matters involving legislation can only be discussed in supply on a substantive motion." I would suggest to the member that perhaps the matter presently being discussed would better be discussed in the budget debate and, indeed, it was, to my best recollection.

MR. WALLACE: Mr. Chairman, could I ask you this point?

MR. CHAIRMAN: There is one way in which it can be permitted, and that is with leave of the House.

MR. WALLACE: I would like to ask your guidance because this vote 7, which is part of the overall responsibility of this minister, states very clearly that the description provides for the administration of all taxing statutes which are the responsibility of the Minister of Finance. I am at a loss to know why you're making this point at this stage in the debate when, in point of fact, many other members and the general thrust....

MR. L.B. KAHL (Esquimalt): What vote are we on?

MR. WALLACE: If you would wake up, you would know what vote we're on.

MR. KAHL: Well, you don't know.

MR. CHAIRMAN: Order, please.

MR. WALLACE: We're on the minister's salary, vote 2.

MR. CHAIRMAN: Hon. members, the member for Oak Bay has the floor. Please proceed, hon. member.

MR. WALLACE: Mr. Chairman, this minister's responsibility is to raise revenue by taxation. I was always under the understanding that regardless of government or political stripe, taxation was applied, as a general rule, on the ability of the taxpayer to pay. I am talking about an essential service, which is the provision of heating and lighting, much of which is provided by one particular source, B.C. Hydro. Not only are these rates escalating — and we'll debate that later — but there is a 7 per cent sales tax, which in the case of people on fixed incomes is becoming a very punitive element of the total taxation picture in this province. I want to point out — and I thank the minister for answering the questions that I placed on the order paper — that the total amount of sales tax derived from B.C. Hydro bills will be somewhere in the neighbourhood of $32 million for the current fiscal year, which is about 4.5 per cent of the total amount of revenue derived from all the sales tax.

I would like to suggest that if, as this government has shown in the past, contributions can be graduated in relation to the means and the age of the patient, for example of medicare, persons who have $1,000 or less of taxable income pay half the medicare rate. I am suggesting that kind of sensible precedent could well be recognized and emulated in regard to the application of sales tax on such essentials as B.C. Hydro bills.

We have acknowledged that while the anti-inflation measures have slowed down inflation, there is no doubt that, even with the federal indexing of old-age pension, that increase in pension in no way keeps up with the increasing rate at which essential costs are rising. One of these essential costs is heat and light.

To a lesser degree, the same applies to telephone services. Again, I'd appreciate the minister answering the question I placed on the order paper which shows

[ Page 1062 ]

that somewhere in the neighbourhood of $11 million will be derived from sales tax imposed on telephone bills for the current fiscal year, which is approximately 1.5 per cent of the total sales tax revenue. Now perhaps it may well be that telephones are a somewhat less essential service than B.C. Hydro. But there is no doubt that this is an area that the minister could well reconsider in that it does impose a hardship on pensioners and people who are either on fixed incomes or whose incomes increase at a rate much less than the rate of inflation.

A similar aspect that I would like to mention, Mr. Chairman, relates to the sales tax which is applied to certain medical supplies for patients who have artificial openings on their bodies as a result of surgery. Here again we are talking about a very small part of the total sales tax revenue. We are talking about adhesive supplies for persons who have to wear a colostomy bag or a ureterostomy bag or some similar kind of receptacle on their body. The unusual situation seems to be that the actual equipment is tax-free but the supplies and the materials that are used to attach the receptacle to the body are subject to sales tax. When I first raised this in the House I got the impression that there must be just some oversight by the minister's department and that it made no logical sense at all. It seems to me that if the philosophy of the government is that the actual equipment is tax-free, then the adhesive material that attaches it to the body should surely be tax-free. I don't know if the minister overlooked this issue when I raised it in the budget debate, but I'm raising it again. He's had correspondence, Mr. Chairman, from the society that looks after the interest of patients who have had to have this surgery. It just seems to me that the unfortunate individual who's had to go through life with this particular disability could certainly do with a tax break to a degree which would have very little, if any, significance on the total amount of sales tax revenue.

The last point I want to make, Mr. Chairman, is just to say that 1, too, was a member of the all-party committee of this House that tried to implement a unanimous recommendation of all parties of this House in relation to the children of Vietnam. We know that — we've discussed it many times in this House — the tremendous natural advantages and blessings which we have just from happening to live in British Columbia. In the context of the global village, a wealthy province like British Columbia should be looking at other parts of the world and trying to take on some of the burden of helping other lands less fortunate, quite apart from politics or the reason why people fight stupid wars. This House, at the initiation of the present Minister of Labour (Hon. Mr. Williams), who was then a Liberal member of the opposition, unanimously passed a resolution that we would provide, as I recall, $2.25 million worth of aid to the children of Vietnam. The rather ironic twist to this whole story, Mr. Chairman, is that that committee, which functioned very well but too diligently, was so concerned about accountability to this House and to the people of the province who were putting up the $2.25 million, that we, as committee members, went to unusual lengths to ensure that the money would be disbursed through recognized agencies such as the Save the Children Fund, the Red Cross, the Quakers (Society of Friends) and various other established agencies, who could report back to the committee and ensure that this $2.25 million would not suffer the same fate as foreign aid often does.

The sad consequence of this committee's diligence and concern about accountability meant that when we were on the point of deciding how to disburse that money, there was a provincial election in this province and the government changed. Since then, there has been stony silence from this government as to whether or not the word of British Columbia means anything in the world. That resolution in this House was not a political resolution and it was not the resolution of one party or two parties. It was the resolution of all parties in this House that we should recognize the suffering and the damage that had been done to many children in the massive bombing of North Vietnam.

I would suggest that this is no time to be nitpicking as to whether or not the money was spelled out in some particular government account. The question now is: does the word of British Columbia mean anything in international circles? I happen to think that this House interpreted the feeling of all British Columbians that it was not any kind of political gesture. The very fact that it was initiated by a member of the opposition and approved by all parties in the House, I think, demonstrates very clearly the sentiment that we all had — that as a wealthy province in a troubled world it was not at all unreasonable, and perhaps might set the example for other countries, to try and show the kind of sympathy and humanity that's so tragically missing from much of the debate that goes on in this House and in other chambers.

I'm very pleased that the Minister of Labour (Hon. Mr. Williams) is in his place, because I know that he offered the resolution and was gratified to have it accepted by the House in exactly the framework that I've tried to describe tonight. I know that he believes that this House should keep the commitment that was made, albeit when a different government was in power.

So I'm just asking the question now: does the government not feel that it has an obligation to fulfil that was, undertaken by the whole House, not just by the government of the day? If it feels that way, what can we anticipate from the Minister of Finance? Will

[ Page 1063 ]

he be allocating the $2.25 million or will he be restructuring or reinsituting the committee that was given the responsibility of disbursing these funds?

I suppose, in a very last-ditch appeal, I would suggest that if in fact the government has made the conscious decision not to keep the commitment, at least let us know, and let the people of the province know, so that I can then answer a lot of the mail that I get as to whether or not that original commitment by the government will be carried through.

HON. MR. WOLFE: Mr. Chairman, I know that the member has brought up the matter of the resolution regarding the Vietnamese children before — in the budget debate, I believe — and the member opposite also brought it up earlier. I was not familiar before now with this subject, but I'll be happy to look into it. I just want to mention that there might be a legal point here constitutionally — whether we have the authority to expend funds passed by this House without it having been put through in the normal measure by message or by government measure, et cetera. But I'll be happy to look into it, because I really have not been familiar with the proposal that was made back in 1973.

You mention the subject of cancer dressings and, in particular, special equipment and medical supplies such as colostomy bags. There are a variety of these materials that do become a subject of controversy regarding sales tax. Some are exempt and some are not, I know. Of course, all prescription supplies are exempt from sales taxes. I can say this: that during the course of the past year there has been a lot of discussion about cancer dressings. We have authorized a grant for an organization — I believe it's the Eastern Star, who do a great deal of work in preparing cancer dressings — to equate with the amount of sales tax they were previously paying on the materials put into the preparation of all of these cancer dressings.

I don't know what the position is on colostomy bags, but I'll certainly look into it.

MR. WALLACE: The bags are tax-free but the adhesive is not.

HON. MR. WOLFE: Yes. I suppose the question, Mr. Chairman, then comes up as to how you differentiate that adhesive from what I would get....

MR. WALLACE: Put it on prescription.

HON. MR. WOLFE: You'd have to put it on prescription, yes.

The member also asked questions regarding the tax on B.C. Hydro bills. I know that he's had that question on the order paper. The tax, of course, is the same that has prevailed for years, the difference being now that the rate instead of being five, as it was before, is seven. One must keep in mind, in looking at the size of the total revenue generated from that, two things: first, that it includes both commercial and residential; and secondly, there's a substantial additional tax involved in other utilities aside from Hydro that is also involved in the collection of sales taxes on their billings.

He mentioned B.C. Telephone. Of course there's tax there on the basic bill but not on the long-distance charge.

MR. STUPICH: Mr. Chairman, I have one very brief and explicit question on vote 2. I notice provision for an administrative assistant, and I wonder whether the minister has one.

HON. MR. WOLFE: The answer is yes; he, was just appointed about a month ago.

MR. COCKE: I'm delighted to hear what the minister has to say about the Vietnam situation — that he'll look into it. One of the reasons we have decided not to put forward a resolution is that we feel the resolution or the supply or whatever should come from the government because it makes it a lot easier to put it forward.

I would suggest, however, that in order to depoliticize it — and don't forget, we're dealing with maimed children in Vietnam — you set up an all-party, non-political committee, as we had before. I don't want to suggest, Mr. Chairman, that we have anything more than just the thought in terms of upholding what we felt to be a promise. I would suggest that if in a reasonable length of time something of this nature isn't put forward, then there will naturally be something put on the order paper for us all to look at over the next few months as long as we're in session.

MR. L. NICOLSON (Nelson-Creston): In listening to the member for Oak Bay (Mr. Wallace) — I brought up some rather similar things earlier today — might I suggest that the minister consider the whole realm of adhesives. Whether somebody gets a Band-aid because they have a cut finger or.... I think this example today points up just how ridiculous some of our sales tax imposts are, and that it's a very dramatic thing. But perhaps even in the lesser sense, should not even Curads and, Band-aids be exempt from tax, if they are not already? Certainly people don't buy these as a luxury; they don't consume them wantonly. It would appear to me that the whole realm of adhesives and first-aid supplies should be tax exempt.

Getting back to the matter which I brought up in terms of syringes for diabetics, I can't really imagine anyone wanting to use a syringe for anything other than perhaps an illegal purpose. Really, that doesn't strike me as being a justification for not allowing it. A

[ Page 1064 ]

medical syringe is obviously something that one does not use on oneself unless one has to. I know that the minister has been responsive in the past in looking into these matters and I'm sure he will, but I would just like to put that perspective on it. In the matter of adhesives, perhaps the whole matter of Band-aids, first-aid supplies and everything should be considered.

MR. STUPICH: Mr. Chairman, I must confess that in trying to keep track of the large number of political appointments made by this government, we did miss the one about a month ago. I'd like to know who is the minister's executive assistant. What was his occupation?

HON. MR. WOLFE: His name is Richard Ewing. He has worked with Bell Canada, he has been an investment counsellor and he's a resident of Vancouver.

Vote 2 approved.

Vote 3: administrative and support services, $903,968 — approved.

On vote 4: controlling and audit branch, $2,830,063.

MR. STUPICH: Just very briefly, I know we're in the process of appointing an auditor-general, and I noticed in this vote that under this branch there is included the audit of the various Crown agencies, Crown corporations, commissions and all that. I just wondered, again if the minister could explain to us how he'll be certain that the roles will not be overlapping?

I want a bit of time to catch up.

HON. MR. WOLFE: The distinction there in terms of the auditor-general's responsibilities.... In general terms, I think that the responsibility the comptroller-general is left with is more or less in financial reporting, documentation of government records and so on. But at this stage, as we all know, the auditor-general is not on board and it is not known exactly when he will be. So I think the forecast is prepared here on the basis of the status quo.

MR. NICOLSON: Mr. Chairman, under this vote we see the control and examination of various Crown corporations and indebtedness guaranteed by the Crown. Has the minister examined the exponential growth of the indebtedness of B.C. Hydro since the company first became a Crown corporation in 1963? Does he know the rate at which this indebtedness is doubling? I do; I've worked this out, Mr. Chairman.

The indebtedness of B.C. Hydro is following an exponential growth of doubling every four and a half years. I would like to point out to the minister that at the present rate of growth, by the year 1999 the indebtedness of B.C. Hydro will be $128 billion. Is the minister looking at the rates of growth of debt in Crown corporations? Would he consider asking somebody to analyse the exponential growth of these corporations?

HON. MR. WOLFE: As soon as I look up the word "exponential," I guess the answer is yes. I would think that we could debate this further under the bill for the Hydro loan in which we are asking for an additional $650 million.

MR. STUPICH: I have just this one question, Mr. Chairman. I've asked this before. The minister said we could expect the quarterly statement soon, and it is not going to tell us very much anyway. I know he told us that it isn't available already, but I wonder — this is my last chance, I think, to ask him — how soon is soon? Is that one day, one month? Can he give us any more definite ideas as to when it will be coming?

HON. MR. WOLFE: Just soon — a little bit sooner than it was this afternoon.

MR. COCKE: Mr. Chairman, I had some real hopes — and so did the former Minister of Finance, the member for Nanaimo (Mr. Stupich) — until I read an article in the local press. When I talk about local press oftentimes I'm referring to New Westminster. In the local press I read an article in which a quote was attributed — and I'll have to paraphrase — to the member for South Burnaby, Burnaby South....

AN HON. MEMBER: Burnaby-Willingdon!

MR. COCKE: Burnaby-Willingdon (Mr. Veitch). There we are. Thank you very much. I knew I'd get it sooner or later, with a little help.

The member is apparently on a committee with the Minister of Finance, and that committee is the recruitment committee for the auditor-general. He said one of his greatest moments of pride is in the fact that they are moving towards securing an auditor-general. This was early this fall. He said that within a year.... They were then getting into a sort of medium list, a short list. I wonder if the Minister of Finance is really serious about appointing an auditor-general during the life of this government.

Interjection.

MR. COCKE: Look, I'm not asking members on this side of the House on that committee, I'm asking the chairman of that committee.

[ Page 1065 ]

HON. MR. WOLFE: Mr. Chairman, the member is obviously not aware that I'm not on the committee.

MR. COCKE: Well, Mr. Chairman, certainly the auditor-general, when he comes on force, will be of great significance to the Minister of Finance. Is the Minister of Finance interested in the fact that that committee, chaired by the Minister of Agriculture (Hon. Mr. Hewitt), is dragging its feet?

MR. E.N. VEITCH (Burnaby-Willingdon): On a point of order....

AN HON. MEMBER: No, not on a point of order — argument.

MR. VEITCH: Perhaps not on a point of order, but just on a point in respect to the audit or-general's committee, perhaps I could answer that question. I still hope that we will have an auditor-general within a year. The committee is working, including your members, and they're working very well, hon. member. One of them is the former Minister of Finance. So perhaps you could speak with him.

Vote 4 approved.

On vote 5: computer and consulting services, $3,500,010.

MR. WALLACE: Mr. Chairman, we've heard a great deal recently about the government overhauling the inadequacies of the existing computer service. We hear that computers were purchased by the former administration which were underused and where the government is now creating a new Crown corporation to bring together all the computer services and put the whole matter to rights, as it were. I'm very interested to know, in more specific terms, just exactly what is happening.

I understand, for example, from the University of Victoria that the government was almost going out of its way, asking various agencies such as the University of Victoria to use the computer time because the rent was very considerable and the machinery was underused.

[Mr. Veitch in the chair.]

I notice that an order-in-council on November 9 transferred the authority for the whole management of the government computers to the Minister of Finance. I also note that there's a contingency in this vote of $3.5 million that's very close to the bottom of the page, for the minister's benefit. It seems to me that we should have some more specific description of just exactly how this new Crown corporation will work.

I'm amazed that apparently the system has already been put together, although we have not in this, House yet debated the legislation to set up the Crown corporation. I know that time and time again in this House the government always tells the opposition that they can't spend a single penny that has not been authorized. Yet would the minister care to explain to me how they've already set up this B.C. Systems Corporation — and I presume the B.C. Systems Corporation is spending money — and we still haven't passed a piece of legislation which sets it up?

I'm just a country boy when it comes to all these technicalities, but it seems to me any time we get into a debate and ask the government to spend money which has not been allocated by this House through the previous budget debate, we're told that such and such cannot be done. I'd be very interested to know, first of all, what are the mechanics for having created this Crown corporation when we haven't debated the legislation which will be required to set it up.

There have been conflicting reports in the press in the fall of last year. For example, in the Vancouver Province on October 8 it was stated that ICBC, the motor-vehicle branch, B.C. Hydro and B.C. Rail would all come under the workings of the new computer systems corporation. But a later statement in December suggested that ICBC and B.C. Hydro would not be part of this overall systems corporation function. I'd just like to know what it has been costing prior to setting it up.

There was a figure stated in the Jack Wasserman column on December 6, and I would like to have confirmed or denied the figures that were then quoted. Jack Wasserman in The Vancouver Sun of December 6 stated that there was a computer gathering dust in Victoria at a cost of nearly $100,000 a month in rentals to the B.C. government. This is described as the Honeywell computer which had been purchased in order to develop a reservation service for the B.C. Ferries, and that its lease rate was almost $1 million a year. Now is that true or is that a exaggerated figure? The statement was made that the cost would escalate each year by $25,000 until 1977, when the rental for the Honeywell computer would be $125,000 a month. Apparently it was being suggested that the province had been approaching universities and BCIT and I don't know how many other organizations, pleading with them to use the computer to try and justify its cost. I would like to know its cost and I would like to know the percentage of time the computer has been used since it was purchased.

I understand from another statement in The Daily Colonist on January 13 that the government is locked into a contract on that particular computer. I wonder if the minister could tell us how that contract relates to the new Systems Corporation that's being set up.

The last point I'd like to make is the whole

[ Page 1066 ]

problem of secrecy or privacy in regard to the government's increasing use of computers in these various areas I've mentioned — the B.C. Hydro, ICBC and others. I understand that at the present time there is no specific legislation that establishes any protection in relation to computer services. There is always potential danger in relation to who has access to the information which goes into the computer. We realized some time ago from the Watergate example and perhaps from the federal example involving the so-called blacklist that governments have a tremendous opportunity, if they choose, to invade the privacy of the individual and to act upon information which subsequently penalizes the individual and he doesn't even know that it's being done to him.

I think there's a great concern on the part of many people and certainly I personally feel that with the ever-increasing use of government computers, while it may make the government operations more efficient financially, there is a danger that it would lead to the abuse of private information. I wonder if the minister would recognize this and tell us whether he's contemplating any new legislation to try and provide the public with the assurance that their privacy will be protected. It's just another reflection of this very general problem in our modern society that more and more arms of government and more and more powers in the hands of government are extremely dangerous if they're abused.

I can long remember the number of times the present Attorney-General (Hon. Mr. Gardom) stood on this side of the House and pleaded that whatever legislation might be well motivated, there must be cheeks and balances. Once again, I would suggest that the present Minister of Labour (Hon. Mr. Williams) well remembers the Attorney-General's speeches from this side of the House, to the effect that no matter how well motivated a government might. be in trying to bring about social reform, or progress in society, the power invested in legislation had to contain checks and balances so that such matters as the freedom and rights and the privacy of the individual would be protected.

There was an excellent editorial in the Vancouver Province of October 12, entitled: "Computerized Privacy." I won't take the time of the House to read parts of that necessarily, but I think the point was being made that we shouldn't be so concerned about the administrative efficiency or the financial economy of government services and completely overlook the fact that to bring that about by the use of computers should sacrifice, or run the risk of sacrificing, the privacy of the individuals, information about whom goes into these computers.

So I've asked a series of questions. What has it been costing? How have we set it up without legislation? What are the expected costs in the next 12 months. And, perhaps of equal importance, what guarantee do I as an individual have that my privacy will be protected in relation to any of my personal information involved in the computer services?

HON. MR. WOLFE: Mr. Chairman, this is a very big and complex subject. We should call in a computer expert to talk about it. In any event, the primary objective involved here, Mr. Chairman, is to consolidate the sort of proliferation of data processing services and equipment that was in existence and had grown very rapidly in various departments into one area. Now in terms of the estimates, this now appears under vote 5 in Finance and takes in what was previously in Energy, Transport and Communications and, to some extent, in some other departments. But it is all entirely in Finance, out of which we are charging other departments the amount of $9.451 million and an assessment and schedule has been prepared as to what to charge to the various ministries included in that $9.4 million. I might say with regard to that, that the development of the systems group and the expertise to arrive at proper means of charge-out is still ongoing so that this is primarily an estimate of what each department's usage would be. The development of accurate means of charge-out will take place in the ensuing months.

You asked about legislation. This is being prepared now and has not been completed, so there is no systems corporation at this point. But the start-up development of the project — to get it ready — has been underway and is being paid for out of the vote for the current year which is still in place.

Interjection.

HON. MR. WOLFE: It appears on the left of your computer consulting services under vote 5, and was formerly in Energy, Transport and Communications.

You were quite rightly concerned about privacy and access to personal information and so on, and I think you can be sure that this type of thing will be embodied in whatever legislation comes forward. I don't have it here with me, naturally, but I am sure this is one of the concerns that exists.

Secondly, you would have the satisfaction, Mr. Chairman, that the mere fact that there would be consolidation of the data processing would make it more easily subject to the privacy control that you're concerned about — the fact that you wouldn't have computer installations here, there and yonder where it would be more difficult to control the privacy of information.

Now you mentioned the subject of the Honeywell installation which has received attention lately. This is a very large and very quality-type installation of hardware. Actually it's two computers which can be

[ Page 1067 ]

separated, and the total lease cost entered into by the previous government over a five-year period is something over $7 million, which was phased in. I think the first year was something like $700,000, and so on, so by the conclusion of the contract the total lease is $7.2 million. This computer was ordered during mid-1975 in contemplation of a reservation system, primarily for the ferries, and certain other objectives. Since that time, of course, plans have not gone forward to use it in that capacity. It is not compatible with and nor does it easily fit into the existing major installations within the government, but there is a plan now for its usage. Currently it's not being used to a very high percentage, but any new installations....

lnterjection.

HON. MR. WOLFE: Well, I think you'd have to say one day it might be used 5 per cent and another day it might be used 20 per cent, but on average, I am told, it would be about 15 per cent. It's very hard to come up with a figure as to what the degree of usage is on a 30-day basis.

There is a plan, though, that half of the Honeywell will be incorporated in a new reprogramming of the medicare plan. In other words, there's a specific programme which can be suitable to fit into the Honeywell, so in the near future — I would say within a six-month period — half of the Honeywell installation will be gainfully employed in the medicare system. The other half is being negotiated with the Department of Education to be used in the Vancouver area. Beyond that, we don't know the specifics of that. But it's very likely that within the next six months to one year the computer would be used to a much higher degree of efficiency. It's a good piece of equipment, but we think it was ordered prematurely and without enough consideration for the existing plant, which cannot be adapted very easily. There are major IBM installations in the government area and they all need upgrading. They are running to capacity, and a plan has been developed to do this with one large IBM 158 which has been contracted for in cooperation with the University of Victoria. So the sort of rationalization of these plans is working together with outside agencies, such as universities, and I think we are making very fortuitous arrangements out of this that can benefit all parties.

You asked, for instance, about B.C. Hydro and ICBC, which have major installations now and naturally have plans to alter them from time to time. There's no contemplation of forcing them into. whatever is in mind here, but this legislation is still being put together.

MR. WALLACE: The reservation programme has been abandoned?

HON. MR. WOLFE: That's correct.

MR. G.V. LAUK (Vancouver Centre): Mr. Chairman, one of the problems that an opposition MLA has is coming up with a compliment every once in a while, and it's called a weakness. Nevertheless, I would like to say this insofar as a computer service is concerned: if one were to think of one of the most positive aspects of the budget it's the cost-control measure insofar as rental of space is concerned and charging it out to various departments, and equally with computer service. It's something that the NDP administration should have done and didn't. We should, as my mother says, give credit where credit is due, and the hon. minister should know that there are some of us on this side who appreciate that you're taking care of overuse, let's say, of computer services. That's a good cost-control measure.

I am a little puzzled, however, when I am told that, on the other hand, computer services are underused. But I do think various departments may tend to jam up the system unnecessarily and cost-control measures such as this would discourage that. At the end of the year they would be charged out with that kind of a figure.

So good work! Next year we hope for a budget that will actually provide jobs and get down to the real substantive issues, but that's not bad for 14 months.

Vote 5 approved.

Vote 6: Purchasing Commission, $1,315,344 — approved.

Vote 7: taxation administration, $4,322,478 — approved.

Vote 8: Assessment Appeal Board, $100,000 — approved.

On vote 9: government agencies, $4,917,294.

MR. STUPICH: I'm referring again to the Blues, the report of the minister's opening remarks, and I note a new, expanded role — or perhaps I'd be quoting him more properly to say he's looking at it as being the former role — for the work of the government agencies or, at least, to "expand the responsibility of the 51 government agencies." As I count them, there are 52 — but I think there is one new one in this period and perhaps that's why he said 51 when I believe there are 52 provided for in estimates.

From having listened to many of the government agencies all over the province, I know the important

[ Page 1068 ]

work that they're doing already. I think it's a good idea to these offices that are recognized publicly as being the local manifestation of government, the place where people turn. But the thing that concerns me is that they have been understaffed in the past; they found it very difficult to provide the service that is demanded of them in the past. Yet the minister is contemplating giving them a great deal more responsibility with absolutely no increase in staff, even though there is an increase by one in the number of agencies. I wonder if the minister would care to elaborate on how he sees the new role.

HON. MR. WOLFE: Mr. Chairman, it's been a trend over some years, which the member for Nanaimo (Mr. Stupich) would have recognized, of erosion in the responsibilities of government agents and their importance in various communities because of the growth of other departmental facilities in each area — for instance, in the Attorney-General's department, the growth of courts which might have previously been operated as a function from a financial point of view of government agents. They performed quite a multitude of different services, and their original function is small communities, something which has been part of the history of British Columbia, has been eroded over the years. I have discovered that this has been the case.

It has been the wish of this government and the Premier that we re-instate the importance of the government agent in these communities, because it has been a part of them. So we want to emphasize that, and I've tried to do this throughout the departments.

MR. STUPICH: My concern is that although maybe some of the responsibilities have been taken away from them, the increasing volume of work, because of the increasing population and increasing Problems, has put an almost impossible load on the existing staff. I know that is the case with respect to Nanaimo because they used to come to me regularly and ask me to intercede on their behalf with the Minister of Finance to try to get some additional assistance, not just for the smaller ones but even in the larger ones like Nanaimo. Even in Nanaimo they would dearly love to have at least one more staff member, and I know that is true of many other agencies.

Now I agree with the minister that they should be doing some of the things that have been eased away from them, but I just feel that it's going to be necessary for them to have more staff if any significant change in direction is going to be embarked upon in the fiscal period before us now. Perhaps the minister is talking about some rather long-range plans here and that it will be a very gradual shift; but even with that I had hoped that in spite of the importance of controlling costs in this period, there would have been some increase in staff for the government agencies.

I recognize that governments are feeling that costs have to be controlled, that staff have to be kept down, but I do feel it's important also to give service. I think many of the government agencies throughout the province could serve the public to better advantage if there was some increase in staff allowed for in this particular vote. Now I have made my plea. It's probably falling on deaf ears, but I've made it.

MR. NICOLSON: It's very easy for people who live in Vancouver or live in Victoria; they have access to so many government departments. They can just walk right in off the street and talk to these people. In the other areas of the province it is through the government agent that they have a chance t6 meet with government. So I would like to back up and second the expressions of the member for Nanaimo.

HON. MR. WOLFE: Mr. Chairman, with regard to Nanaimo, the member for Nanaimo raised a question of that agency a year ago. I visited there during the year, during the period when it was quite busy, and discussed the matter with the assistant agent. I think since that time there has been one additional staff member added.

MR. R.E. SKELLY (Alberni): Possibly I should have discussed this question with the member for Nanaimo before bringing it up here. I'd like to talk about a proposal for a government agency in the Parksville–Qualicum Beach area of Vancouver Island. It's a rapidly growing area of Vancouver Island — in fact, possibly one of the fastest-growing areas on the Island.

There is a real need for a government agency in that area. I believe that we're fairly isolated in the Parksville–Qualicum Beach area from an office providing a broad range of government services. If we wish to contact the district agriculturalist we have to go to Courtenay; if we wish to contact the land commissioner we have to go to Port Alberni or Nanaimo. For problems with homeowner grants, taxes, that type of thing, people living in the rural areas of Parksville–Qualicum Beach area have to travel 30 to 50 miles to get to the nearest government agency. What we really need in the Parksville-Qualicum area is a provincial government office which offers a wide range of provincial government services such as those that would be offered by a government agent.

The village of Parksville has approached the minister, I believe, during the last year or the last few years requesting the establishment of a government agency or sub-agency in the Parksville–Qualicum Beach area. I'm wondering if this' minister has done a

[ Page 1069 ]

study of people from that area who are served out of the Nanaimo office, or out of the Courtenay office, or the Port Alberni government agent's office, and whether those people might best be served by locating a government sub-agency in the Parksville–Qualicum Beach area.

One of the problems we've experienced in our area in addition to the rapid growth and the influx of population is that many of these people — 21.8 per cent, in fact — are over the age of 65. It's very difficult for these people to get around to travelling 30 to 50 miles to the existing government agencies in centres such as Nanaimo, Port Alberni and Courtenay. If a government agent or sub-agency was located in Parksville or Qualicum Beach that would, in a large measure, solve the transportation problems that these people are presently experiencing.

I'm wondering if the minister would consider the establishment of a sub-agency in that area, or if he would do a study of services that are provided to Parksville-Qualicum residents in the other government agencies on central Vancouver Island, or if it might be much better to locate a sub-agency in Parksville or Qualicum Beach.

HON. MR. WOLFE: Mr. Chairman, we have sort of a criterion that is used to survey requests for new agencies, and it has been looked at in terms of this request at Parksville. Of course, there are agencies at Nanaimo, Port Alberni and Courtenay. With the fact that the nearest major hospital would be Nanaimo, about all I could say at this stage is the survey didn't indicate that it would be practical, based on the needs of staffing such an agency and so on. But we can have a look at it again. This was reviewed in November and I have the figures in front of me. Basically, it reduces to the fact that the only service this sub-agency could offer would be vital statistics, and it wasn't felt that it was that far a distance to Nanaimo to require it.

MR. SKELLY: I have just a further question. Although vital statistics would be one of the services provided, the government agency does carry a lot of information that people require for assistance in filling out homeowner grant applications, difficulties with tax forms and this kind of thing. That type of assistance is provided by a government sub-agency, and we don't have that type of assistance in Parksville. Information about the rentalsman service — again, that type of information is provided through the agencies in Port Alberni, Nanaimo and Courtenay, but it isn't available at a central location in Parksville. There are services in Parksville — such as Human Resources and Highways — which possibly should be combined in a central government office where people can get the information they require. I'm wondering if the minister would be willing to do a complete study of the provision of government services through a single agency in Parksville. I think it would be very helpful to the people in that area.

Vote 9 approved.

On vote 10: interest on public debt, $13,875,000.

MR. STUPICH: Mr. Chairman, it's kind of a shame to spoil what has been a very successful evening, a very successful day so far, by introducing politics at this hour of the night. I was hoping that the acting House Leader might relent — repent, if you like — and not bring forward this vote at this time. This is not finance, this is not economics — this is politics. As I say, we've been getting along so well this evening that it's a shame.

In answer to a question that I raised yesterday, the Minister of Finance did say that the maximum amount borrowed at any time was $181 million, precisely the amount that was given to ICBC as a political move, not an economic move. I recall the Minister of Education (Hon. Mr. McGeer), who is responsible for ICBC, saying at the time that ICBC needed this money to pay salaries and to pay claims. That same minister, responding to a question on the order paper, reported that as of December 31, 1976, ICBC still had this $181 million in tax, and an additional $91 million on top of this.

Mr. Chairman, it was not necessary to borrow any money. The $40 million provided for in estimates last year — I suppose we have to excuse that on the grounds.... Let's assume and let's give them the benefit of the doubt and say that the Minister of Finance and the government honestly felt that $40 million would be required to pay the interest on some $400 million in debts.

The logic of the arguments presented by the opposition at that time — even though it may have convinced them — would not have been sufficient for them to have changed the budget or to have changed the estimates at that time. But surely the events that have transpired since that date should have convinced the government that it was not necessary to borrow money other than for political reasons. And those same political reasons could justify giving that money back to the government. ICBC doesn't need it. It was not proper to load the consolidated revenue with the expense of paying off that political debt, of trying to embarrass the previous NDP administration which is long since gone. It wasn't necessary to do that. It has thrown a load on the general taxpayers of the province of British Columbia of $181 million that never should have been put there in the first place. We never should have had the $40 million in estimates last year, and we certainly have no need for any provision this year if the money that was given to ICBC last year was now going to be given back to the government.

[ Page 1070 ]

Mr. Chairman, we can't accept and we can't vote in favour of this interest on public debt when it is nothing more than a political manoeuvre. It's politics, Mr. Chairman.

AN HON. MEMBER: Shame!

MR. STUPICH: As I say, it's a shame that after having gotten along so well in discussing the estimates of the Minister of Finance, after approving his salary with little pressure, after being very cooperative all afternoon and all evening...

MR. D. BARRETT (Leader of the Opposition): Now he turns into a disaster.

MR. STUPICH: ...I hoped — I honestly did hope — Mr. Chairman, that the government would not bring forward vote 10. I expect now they feel they can't withdraw.

AN HON. MEMBER: Shame!

MR. STUPICH: Mr. Chairman, the only thing we can do is to vote against vote 10, because this has nothing to do with economics and nothing to do with provincial finances, but everything to do with politics. And as the member for North Vancouver–Seymour says, it's nothing but a continuing attempt to exact political vengeance on the people who dared to vote NDP in 1972. Mr. Chairman, we oppose this vote.

MR. SKELLY: I just wanted to reinforce, Mr. Chairman, what the former Minister of Finance was saying. In fact, I'd like to hear some response from the present Minister of Finance.

AN HON. MEMBER: He's got nothing to say.

MR. SKELLY: The Premier when he was speaking during the budget debate said that he would hold this interest on public debt up in front of the people, to flog the people, for years and years to show how the NDP government supposedly mismanaged the finances of the province. In fact, most of the expenditures made on that so-called deficit for the year 1975-1976 were made after the NDP government left office — $181 million of that so-called deficit was a transfer to and from the ICBC corporation which took approximately two or three days to fulfil.

But the Premier admitted that this public debt was created by his party, and that he was keeping this interest on public. debt in front of the people in order to flog the electorate to show them that the NDP had mismanaged the economy. It is straight political motivation, keeping this interest on public debt in front of the people, and the Premier has admitted it. I am wondering if the Minister of Finance and the present government, in, recognition of the $272 million surplus that has been socked away in ICBC and surpluses socked away in other Crown corporations, is not going to transfer some of those funds to pay off the principal on this public debt. Then that $13 million can be released for government expenditures in needed areas such as services to senior citizens, senior citizens' housing, intermediate care, things which this government is depriving the people of this province of, needed services that the people of British Columbia are being deprived of, as the Premier admitted, for politically designed reasons.

I am wondering if the Minister of Finance has considered that proposition.

MR. CHAIRMAN: Shall vote 10 pass?

SOME HON. MEMBERS: No!

MR. CHAIRMAN: I believe the ayes have it.

MR. BARRETT: Division!

MR. CHAIRMAN: Division on vote 10.

MR. BARRETT: There wasn't even one aye! We won! You didn't even call for the ayes! They don't even want to support their own minister. Shame on them.

AN HON. MEMBER: No ayes over there.

MR. BARRETT: No ears on the chairman!

Vote 10 approved on the following division:

YEAS — 25

NAYS — 17

[ Page 1071 ]

Mr. Barrett requests that leave be asked to record the division in the Journals of the House.

On vote 11: grants, contributions and subsidies, $30,160,000.

MR. STUPICH: There was something in the throne speech, I believe, about the new finance-sharing formula with municipalities and I wonder whether the reduction in the operating grant for the B.C. Assessment Authority, from $4,200,000 down to $1,100,000, is an example of the new deal for municipalities, or is there some other explanation for this reduction to something like a quarter of the amount previously provided for? As I see it, it is a shifting of this additional financial burden to the local taxpayers. Any other explanation?

HON. MR. WOLFE: Mr. Chairman, the additional amount paid was not according to the legislation. The legislation, properly described, would call for an operating grant of $1.1 million. It was felt that having had the benefit for two or three years of the extra amount for start-up costs, it was quite appropriate to revert to the original formula of 0.1 per cent of the total assessment which is involved in the Authority. One has to view this reduction along with the total of revenue-sharing which appears in the Municipal Affairs vote, in which case you'll find that there's an increase of some 12 per cent in the total amount appropriated for municipalities.

MR. STUPICH: Mr. Chairman, I'm still concerned about this reduction. Is the minister suggesting that the $1.1 million will be enough for the Assessment Authority to operate on, or simply that it's the government's position that while they need $4 million for operating expenses, the provincial government's responsibility was just to get them started and after that start-up period it would be the responsibility of the local taxpayers?

Vote 11 approved.

Vote 12: interest on funds and deposits, $3,500,000 — approved.

Vote 13: incidentals $788,510 — approved.

[Mr. Schroeder in the chair.]

On vote 14: salary contingencies (all ministries), $41,362,498.

MR. STUPICH: Mr. Chairman, I'm just wondering how this figure has been calculated so precisely to the eighth significant figure. Is there some formula that the minister has used, or what exactly does this represent? Maybe I can just recite some poetry or something, Mr. Chairman, while the minister's looking for an answer to that one.

HON. MR. WOLFE: Mr. Chairman, this is the salary contingency vote and, generally speaking, is made up of the requirements estimated for cost-of-living increases throughout the year, for salary increases, and an additional amount for positions that may be required.

MR. W.S. KING (Revelstoke-Slocan): It's as clear as mud.

MR. STUPICH: New employees, increases in salaries and increases in cost of living, and yet the amount has been reduced from $53,320,243 — again eight significant figures — down to $41,362,498. Now it would seem to me there must have been more new employees in the previous year. I don't think that really happened because I think there were the same restrictions on hiring a year ago, so it would seem that there are going to be less new employees, or the government anticipates not just a little bit of a reduction in the increase in cost of living, but a very substantial decrease in the rate of cost-of-living increase, or something else. Again I wonder how he can get it down to the eighth significant figure.

HON. MR. WOLFE: Mr. Chairman, the reduction can be accounted for (a) because last year had a tremendous amount of retroactivity, and (b) because of the effects of the anti-inflation programme — the reduced amount of increase required.

Vote 14 approved.

On vote 15: Treasury Board, $10,765,913.

MR. WALLACE: Mr. Chairman, I notice there's quite a dramatic increase in staff from 52 to 80. I wonder if the minister could explain that. When the government's policy is to try and trim the staff of the provincial government, this seems to be quite a substantial increase. Perhaps to save time I'd like to ask one or two itemized questions about some very substantial increases in costs.

Travel expenses go from $23,000 to $87,000. There's a new item: "professional and special services — $120,000." Could we hear what that's all about? The office expenses are almost tripled, and office furniture and equipment goes from $4,500 to $68,000. I wonder if we could have some information on these very substantial increases.

HON. MR. WOLFE: This vote includes the part of the staff of the Public Service Commission — namely 55 — which is now incorporated in GERB, the

[ Page 1072 ]

Government Employees Relations Bureau, and 15 new positions added to that to make a total of 70 for GERB, plus 10 positions from Transport and Communications, which are the anticipated staff requirements of the new Treasury Board staff.

MR. WALLACE: Can I assume — and this is a very dangerous time in the evening to assume anything — that these additional travel expenses, office expenses and office furniture expenses result from the addition of these staff members to the ministry? Particularly, could the minister tell me about "professional and special services — $120,000"?

MR. CHAIRMAN: Shall vote 15 pass?

MR. WALLACE: Mr. Chairman, I think it's just a matter of giving the minister a moment or two to define what that $120,000 is for. At a time of restraint, I think a new item of $120,000 in a minister's budget is worth questioning. I'd just be interested to know what professional and special services this item is referring to.

HON. MR. WOLFE: It would be professional services and/or consultants required in the new structure of GERB, Mr. Member. I could get you further information later on it.

MR. SKELLY: I noticed there's a vote of $100,000 for anti-inflation measures in this vote 15. Last year there was no expenditure at all. I suppose if it was $1 last year, it would be an increase of something like nine million per cent, which seems on the surface to be inflationary.

But I'm wondering just what the $100,000 is for and what services are provided by the province under the Anti-Inflation Measures Act. What's that money for?

HON. MR. WOLFE: Mr. Chairman, this is primarily the travel and other expenses related to the anti-inflation committee for the many meetings that are required to take place in terms of negotiations with Ottawa and so on. There's another item in there that I'll just have to look up for you; I can't put my hand on it.

MR. SKELLY: Who are the members of the anti-inflation committee?

HON. MR. WOLFE: There are about four or five staff members, but the cabinet members are the Attorney-General (Hon. Mr. Gardom), the Minister of Labour (Hon. Mr. Williams), the Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) and myself as chairman.

Vote 15 approved.

Vote 16: building occupancy charges, $1,666,187 — approved.

Vote 17: computer and consulting charges, $1,595,502 — approved.

The House resumed; Mr. Speaker in the chair.

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

Leave granted for a division to be recorded in the Journals of the House.

Hon. Mr. Williams moves adjournment of the House.

Motion approved.

The House adjourned at 10:27 p.m.