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CONTENTS

Routine proceedings

Supreme Court Amendment Act, 1977 (Bill 19)

Introduction and first reading –– 1439

Registered Nurses Amendment Act, 19'77 (Bill 26)

Introduction and first reading –– 1439

British Columbia Payment to Canada of Federal Income Tax on Behalf of Natural

Gas Producers Repeal Act. Committee stage.

On section 3.

Mr. Gibson –– 1439

Hon. Mr. Wolfe –– 1439

Division on motion to report the bill complete –– 1439

Report and third reading –– 1440

Travel Agents Registration Act (Bill 21) Second reading.

Hon. Mr. Mair –– 1440

Mr. Levi –– 1440

Succession Duty Repeal Act (Bill 12) Second reading

Hon. Mr. Wolfe –– 1442

Mr. Barrett –– 1443

Mr. Veitch –– 1452

Mr.Cocke –– 1457

The House met at 8 p.m.

MR. J.J. KEMPF (Omineca): With the indulgence of the House, we have in the gallery with us tonight a gentleman from my hometown and from that great constituency of Omineca, Mr. Walter Vandenhoek, and I'd like the House to make him welcome.

Introduction of bills.

SUPREME COURT

AMENDMENT ACT, 1977

On a motion by Hon. Mr. Gardom, Bill 19, Supreme Court Amendment Act, 1977, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

REGISTERED NURSES

AMENDMENT ACT, 1977

On a motion by Hon. Mr. Gardom, Bill 26, Registered Nurses Amendment Act, 1977, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the day.

HON. G.B. GARDOM (Attorney-General): Mr. Speaker, I move the House proceed by leave to public bills and orders.

Leave granted.

HON. MR. GARDOM: Mr. Speaker, committee on Bill 10.

BRITISH COLUMBIA PAYMENT TO CANADA OF FEDERAL INCOME TAX ON BEHALF OF NATURAL GAS PRODUCERS REPEAL ACT

The House in committee on Bill 10; Mr. Schroeder in the chair.

Sections 1 and 2 approved.

On section 3.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Chairman, just a short question to the minister: why is the Act retroactive to December 31, rather than the more usual date of January I?

MR. D. BARRETT (Leader of the Opposition): No one should be under any illusions as to what the House is saying "yes" to tonight. They're saying "yes" to a $6 million retroactive gift to the oil companies and I'm opposed to this retroactive section. The decency would be, at least, to have the oil companies pay up until the time this bill passes. But to make it retroactive is too sleazy. Do you know anybody else that gets a retroactive reduction on their ferry rate, ICBC, sales tax or income tax? No. But the oil companies get it tonight from Social Credit. We know what your game is.

MR. GIBSON: Well, I asked a serious question of the minister and I'd be very glad if he'd answer. Why is it December 31 rather than January 1, which is much more usual in legislation of this kind? I'm a little bit worried about legal entanglements at the end of the year.

MR. BARRETT: No legal entanglements. The oil companies get their way.

HON. E.M. WOLFE (Minister of Finance): Mr. Chairman, there's no particular reason why it should be December 31 or January 1.

MR. BARRETT: If there's no particular reason, at least you'd have the decency to have it March 31. But you give it to them retroactively. You're giving money to the oil companies as it is. No television, no radio - in the dark of the night you're shoving this kind of legislation through, picking on the people. Shame!

Section 3 approved.

Title approved.

HON. MR. WOLFE: Mr. Chairman, I move that the committee rise and report the bill complete without amendments.

Motion approved on the following division:

YEAS - 29

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NAYS - 12

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

The House resumed; MR. Speaker in the chair.

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

Bill 10, British Columbia Payment to Canada of Federal Income Tax on Behalf of Natural Gas Producers Repeal Act, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 21, Mr. Speaker.

TRAVEL AGENTS REGISTRATION ACT

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): I'm encouraged to note that the House is apparently in the mood for a trip tonight, which makes this legislation most appropriate.

The bill has received wide publicity and great support and seems to have support not only from the industry that it will ultimately govern but from all segments of society. I will therefore confine my remarks on second reading to a rather brief summation of its purpose.

It is designed, Mr. Speaker, to assure consumers who pay for travel services in advance of their vacation - in advance of receiving those services -that they will receive either the services contracted for or compensation in the event that they do not receive those services and a refund is not available. This will be achieved by licensing the approximately 500 travel agents and wholesalers in the business in the province. It will provide for a travel services compensation fund which will be contributed to entirely, and administered by - in part at least - the industry itself, and provisions which will require travel agents and wholesalers to maintain trust accounts for those moneys which are paid in advance of services but for which services have not yet been given.

It is expected, Mr. Speaker, for those who are fiscally minded, that the cost of administering this bill will be minimal. We expect that it will, when in place, eliminate the tragic situations that have developed over the years in this province where people - often elderly, often people who have saved their moneys for a trip - have been deprived of the trip and of the funds they have paid by reason of a wholesaler or a travel agent being unable or unwilling to provide those services.

I think all sides of the House know very well the circumstances of a number of failures over the last few years, and it is hoped - indeed, I am confident -that the case will be that the passage of this bill will eliminate, for all time, the tragedies of those situations. I therefore, Mr. Speaker, have great pleasure in moving second reading of this bill now.

MR. N. LEVI (Vancouver-Burrard): It is the intention of this side of the House to support the bill but there are some very serious concerns about the way it is going to be handled, particularly - and I shall have something to say about this - concerning the trust account problem that can come up. The other thing is that the bill is welcome. I think that perhaps the travel industry business would also welcome a bill to protect the travel industry from the government, certainly over the past year.

MS. K.E. SANFORD (Comox): That's a good idea.

MR. LEVI: Generally speaking, and certainly from the words of the former president of the B.C. chapter of the American Society of Travel Agents, Mr. Taylor, who is now not the president, he was saying a couple of years ago that most tour operators are honest. I certainly would agree with that. There's no question it's a very worthwhile industry, but what has happened is that there are a number of freebooters and buccaneers that came in and have been able to make a great deal of money by simply conning the public, Mr. Speaker. There's the very recent case of the people who were leaving for Hawaii and the company went belly up. It's only because of some public-spirited citizen that the senior citizens involved in that one were able to get to Hawaii in any case.

The industry has been asking for some years for this kind of legislation. The initial legislation started to be prepared some two years ago under the previous Minister of.... I would like to ask if it's Corporate and Consumer Affairs or Services,

HON. MR. MAIR: No, it is Consumer and Corporate Affairs.

MR. LEVI: Oh, it's gone back to being Affairs, has it?

HON. MR. MAIR: Affairs, yes. Services when your wife is present. Affairs when she is not.

MR. LEVI: Oh, I thought we'd got over that one. It's Corporate and Consumer Affairs. Well, that Act was brought in under the reorganization bill. The very thing we argued against last year, Mr. Speaker, is now

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giving me an awful lot of problems. You must have been aware of all the problems we had when we used to refer to it as Consumer Affairs, Mr. Minister. We changed it to Consumer Services. So we've gone back to Consumer Affairs. The legislation was introduced - or rather, was planned - two years ago and I did have an opportunity to correspond with Mr. Gerald Heifitz, who I know has been of inestimable value both to the previous government and to this one in drawing up the legislation.

I would say that the minister was being, perhaps, a little overly optimistic about the wide support because, certainly, in terms of the principle of the bill there's wide support that consumers, in terms of the travel industry, must be protected. The industry believes that and so does the government and so do we on this side. But the problem is, how is it going to work? That's the important thing. The experience that they are having in provinces like Ontario and Quebec, which have legislation - certainly Ontario has had to amend its legislation twice now, I think, particularly as related to the trust fund management. Today, as a matter of fact, we did get a letter from Hagen's Travel that was addressed to the minister. It particularly goes into the question of the problems that can arise around the business of the management of the trust funds, how they report and how, in fact, you can get the money or the interest from these trust funds in such a way that it will help build up the fund.

I did have an opportunity to speak to some of the people today and I was, frankly, a little confounded that we were going to go ahead with second reading, because they've only had an opportunity to meet with the minister's staff once on the basic components of the bill. They met last week and at that time they did say that they were very concerned about the whole business of where the money would come from in regard to the trust funds.

I'd like to quote, if I might, from the letter that was sent by Hagen's Travel. It is actually their brief but I don't think at the moment that it purports to represent the industry's position. Nevertheless, they indicate in here that there can be some serious problems. The man who wrote it, who is Mr. Kurt Maurer, the president of Hagen's Travel, states:

"Subsection 4." - I don't want to deal with the subsection but rather with the principle - "The account should be an interest-bearing account and the interest earned shall go into the fund." Then he goes on to describe some of the complexities. They don't know how any bank that pays sufficient interest on the chequing account, if at all, would offset charges against such an account which the bank normally makes. Obviously the trust account must be a chequing account because of the large number of transactions flowing through it. The monthly receipts from clients are about $500,000 for payments. He goes on to quote, for instance, the January figures from their own January, 1977, books that they processed some 1,100 Canadian cheques and 500 U.S. dollar cheques.

The Minister indicated in his opening remarks that this would be a minimal problem in respect to administration. The industry is a little bit concerned that this is going to be, perhaps, minimal for the government but very, very heavy in terms of the industry itself. There have been some suggestions that the route to go in lieu of the fund would be to have significant bonds, very high bonds. Mr. Heifitz has gone as far as to suggest this in terms of performance bonds in the industry rather than this way.

The important thing is, I would think, that the minister needs to have an opportunity to hear from the industry about its very serious concern about this very crucial part of the bill if it is going to be successful. In view of that, and in view of the fact that this did come on rather suddenly, Mr. Speaker, I would move adjournment of this debate until the next sitting of the House.

Motion approved.

MRS. E.E. DAILLY (Burnaby North): There was a remark made by the Minister of Consumer Services and Corporate Services that we consider was an affront to wives. We would ask him to withdraw it.

MR. SPEAKER: First of all, hon. member, it is not a point of privilege as such. If there was something said by the hon. minister that offended yourself or a member of the House, I think that you have a right to ask the hon. minister to withdraw.

I'm sorry, but I didn't catch any such remark from the minister but....

Interjection.

MR. SPEAKER: It's difficult, hon. member. One moment, please. I'm speaking to the hon. member for Burnaby North, who raised the matter. I didn't hear a remark, hon. member.

MR. G.R. LEA (Prince Rupert): I think you did, but you didn't understand it.

MR. SPEAKER: Order. I'm afraid you have to indicate through the Chair what remark it is that you wish the hon. member to withdraw if there is no other way of reconciling it, because I didn't hear anything that I thought was offensive in terms of parliamentary language.

MRS. DAILLY: Mr. Speaker, it was with reference to his definition of his department, an explanation to the member for Vancouver-Burrard, in which he

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referred to the difference between services and affairs. The inference taken was an affront to wives of this province.

MR. SPEAKER: Would the hon. member withdraw any remark that was offensive to the other members of the House?

HON. MR. MAIR: Well, Mr. Speaker, I note with great interest that the member misnamed my department as Consumer Services and Corporate Services again. However, 1 certainly intended no disrespect to anyone. 1 thought that this was a remark made in good fun. However, if the member didn't take it in good fun, then of course I withdraw it.

HON. MR. GARDOM: Second reading of Bill 12, Mr. Speaker.

SUCCESSION DUTY REPEAL ACT

HON. MR. WOLFE: Mr. Speaker, Bill 12 is just a very brief, simple bill to remove the Succession Duty Act. This bill, which proposes the repeal of the succession duties, is part of the government's announced policy of encouraging investment in British Columbia. This repeal will assist in the success of this policy in two ways: first, it will encourage British Columbia residents to remain here and invest their funds in this province; second, it will encourage potential residents or investors to invest their money in British Columbia in a way that will assist economic development and job creation.

The current legislation is basically unfair. Since the imposition of the capital gains tax, there has been some double tax on property and securities. Mr. Speaker, this happens on the death of the owner because the securities he or she holds are deemed to have been sold at death under the capital gains provision of the federal Income Tax Act and bequested under the Succession Duty Act provisions. This again has tended to discourage investment in this province.

This government believes the tax system should support necessary government services without discouraging investment in the province. We're not going to encourage as many people to develop businesses or provide for British Columbians to continue with existing business operations in many cases unless we offer some encouragement in this regard. We believe revenues from other taxes can effectively support government services without the investment-disco urging Succession Duty Act. I would like to remind hon. members that British Columbia is not the first province to retire from this death tax field. The federal government gave up estate taxes at the end of 1971 and five provinces do not now levy an inheritance tax, including neighbouring Alberta, which, we know, is a vibrant, bustling economic region.

There is generally a significant time lag in collecting duty from estates and this will have the effect of minimizing the loss financially in this fiscal year. We expect during 1977-1978 to collect some $13 million of the $25 million ordinarily expected from the Succession Duty Act. Mr. Speaker, I said in my budget speech that $25 million is about average for annual collections but this has varied slightly over the years. In 1972 collections were $22.6 million and they have ranged upward from that to $28.6 million in 1976.

A total of 13,350 estates were filed in the fiscal year ending 1975 and some 13,863 during 1976. Hon. members may be interested to know that of the. 13,350 estates filed under the Act during 1975, 1,906 were dutiable. Of these only 22 estates had a net value of $1 million or more and returned 30.16 per cent of the total duties. The bulk of the duty came from estates valued at under $1 million and of this about 23 per cent of the duty came from estates which were valued at under $150,000.

I'd like to submit, for the benefit of members, Mr. Speaker, a schedule of the impact of succession duties on various estate sizes for the calendar year 1975. As I've just mentioned, it indicates that of the total revenue generated of $28.6 million during that year, the vast majority comes from estates that are under $500,000. A sizeable number, namely 1,207, or 63 per cent of the numbers of dutiable estates, were under $150,000. 1 think the point to be made there, Mr. Speaker, is that of the people who are subject to succession duties, a sizeable number of estates are medium- to smaller-sized estates which, I think, most citizens of British Columbia would be surprised to learn are dutiable at the present time.

So with leave, Mr. Speaker, I'd like to submit this schedule of the impact of duties during the year 1975. As a further case in point, 1 have obtained three typical examples of estates where you have a male deceased and a wife surviving at age 43, at age 53, and at age 63. In the case of a relatively young woman who is widowed with a reasonable type of estate where you have a pension involved, Mr. Speaker, you can very often have an estate which gets in the dutiable category and be involved with taxes ranging from $4,600 in one case to $7,500, to some $12,000 in another case.

I'm referring to taking one of these cases - which I'll refer to as example 1 - where the person is left with a house with a mortgage and, after deducting the mortgage, the house is valued at $60,000. We have insurance of $40,000; cash and bonds of $25,000; a car; and a pension of a considerable amount -$15,000 per annum. When -you take the present value of the pension into consideration, which ' is a thing which is often not appreciated when valuing estates,

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you then have a total estate of $284,000 ...

MR. BARRETT: Are you including the family home?

HON. MR. WOLFE: ... including the pension and including the family home.

Interjection.

HON. MR. WOLFE: No, not in this case, Mr. Speaker. There we have the exceptions of the house and the insurance and the pension, so you have a net....

Interjection.

HON. MR. WOLFE: I have not completed my explanation, Mr. Member. With the basic exemption of $125,000 and the net value of the estate being $168,000, you have a taxable value of $43,000 and, therefore, a tax of $4,600.

The only point being made here, Mr. Speaker, is that of the total dutiable estates of 1,900, there were over 1,200 which were in categories of this kind. We should appreciate the fact that it is not strictly a rich people's tax but is a tax which bears on a great many people who either have to file and adhere to the regulations - hire lawyers, et cetera - or are subject to various degrees of tax, disposition of assets, et cetera.

Now, Mr. Speaker, the opposition has initially responded to the budget speech by labelling it a "rich-a-care" budget because of the proposed elimination of the Succession Duty Act. I feel confident they will be changing their thinking now and supporting this legislation, realizing the importance of encouraging investment in British Columbia.

This is not "rich-a-care" legislation, Mr. Speaker, it is "job-a-care" legislation.

MS. SANFORD: Job-a-care?

HON. MR. WOLFE: The hon. members across the way don't normally seem to understand that their policy of taxing everyone to death destroys initiative and jobs. Money has fled this province to other areas and this has drained our region of revenue that could have been invested in job-creating enterprises.

Mr. Speaker, it is quite clear that as long as tax havens exist elsewhere in this country, British Columbia will lose substantial money that could and should be invested in this province. In addition to encouraging investment, we will, over the next while, save substantial sums in the operation of the succession duty branch. About 50 per cent of the estates received in the branch are processed in two weeks. Mr. Speaker, this is no small consideration. The members laugh. About 40 per cent are processed inside of one month. The others take anywhere from three months to more than a year, Mr. Speaker, with the time for processing all estates averaging out at about four weeks per estate.

MR. LEA: How much did it cost?

HON. MR. WOLFE: I might say, in concluding my remarks, that although I've mentioned there are now five provinces that do not have succession duties -the sixth being ourselves - we understand that the province of Ontario is actively considering a similar move, Mr. Speaker.

I'd like also to quote from a variety of responses that we've had to this measure, but I'll single out one that comes from the British Columbia Farmers' Institute, which I think is most typical. This reads:

"Dear Sir:

"The board of directors for district A Farmers' Institute wishes to congratulate and thank the provincial government for its recent action repealing the gift tax and succession duties in British Columbia. It is our firm belief that without your action many farmers would have been forced to quit in the next few years.

"As you are aware, the farmers in British Columbia are still confronted by a myriad of problems. Your action was a boost for the lagging morale of our industry, which is suffering acutely from the effects of diminishing returns on its investment. We will hope that this is only the first step of actions designed by your government to help the endangered agricultural industry."

Mr. Speaker, no less a person than the mayor of Victoria, not sometimes to be considered the best of friends with the government in Victoria, is also a very great supporter of this action, and I quote from a recent article in a Victoria paper:

" 'The only ray of light in a gloomy budget, ' the mayor said, 'was the elimination of succession duties. As a lawyer, I know that millions of dollars left the province because of the gift tax, ' he said. 'It isn't only the money directly involved but the money that stands behind it, ' he added."

Mr. Speaker, we have many more responses of this kind and to give the other members an opportunity to debate this topic I move the bill be now read a second time.

MR. BARRETT: Mr. Speaker, I doubt if there will be another debate in this House that will more clearly define not just the philosophy that is a matter of difference between the official opposition and the government, but I would imagine the Conservative

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and the Liberal spokespersons as well may be supporting the government. That has certainly been the position, as I understand it, from newspaper clippings and if I'm wrong I hope that the hon. members I referred to will accept my apology and I welcome their conversion.

Before I go into the main burden of my remarks, Mr. Speaker, I'd like to ask the minister one question. Were the figures that you provided us an administrative study in terms of cost in the department and examples? Was there a study done within the department? Or how was this brought about? Was there a study done, Mr. Minister? I would like to know. Just yes or no.

You don't care to answer, Mr. Minister?

HON. MR. WOLFE: We're not in committee, Mr. Member.

MR. BARRETT: No, I appreciate you're not in committee. But you just told me you weren't in committee. You could say "yes" in a lot shorter time that you just gave me that answer.

Well, Mr. Speaker, I have to make that point and I want people to put that in the back of their mind or on the back burner just for a moment as I deal with a number of other things that the member said.

First of all, Mr. Speaker, I think it important that I quote an authority on this subject, a recognized British Columbia spokesperson. I want to read what that person said - not the former Premier, W.A.C. Bennett, though I'll quote him later. But. I want to quote another person who really had a great deal, I think, of thoughtful things to day.

"In this instance I propose to support the bill because I believe we're in a whole new ball game in terms of taxation in Canada." That's when the bill was first introduced in this House.

"We shouldn't at this stage look at this legislation and say succession duties are out. We should at least allow them to stand on trial in this province. I think they create substantial revenue., "

If you don't think $21 million is substantial, my friend, well you're looking at a different code of ethics than I am. A definition of this tax, not only in the total amount of money, but described.in terms of ethics. Isn't that interesting? If one were to be a philosophy major, one could review the impact of ethics in relative terms to the amount of money it involves. If it's a dollar it's not much ethics. But if it's $21 million it's a different code of ethics.

"I used to hold the view, when I first entered this House, that the revenue received from succession duties was not commensurate with the cost of collecting them."

Did we hear that tonight, Mr. Speaker?

"I checked on this point with those who are involved and it is my view that we pay very little proportion of what we collect in succession duties-, therefore they represent a substantial revenue."

The opinion of this spokesperson, Mr. Speaker, is a direct, clear contradiction to the Minister of Finance, making the point that it's a code of ethics involved when it was $21 million, making the point that the cost of collecting it is not very much at all, and then further making this point that some of the arguments that we have heard in just the last few minutes are injurious to growing British Columbia business.

It seems to me that the substantial exemptions provided take care of that feature. One, two, three -the arguments by the Minister of Finance have a contrary opinion to this spokesperson. If you accept this spokesperson's word, then that minister is wrong.

Let us review: (1) a code of ethics - $21 million has to be collected; (2) the portion of what we pay to collect it is very small; (3) it has no impact whatsoever on business investment; (4) it's not me who will destroy the Minister of Finance's argument; that will come later, but I will rely initially on this spokesperson - it's going to drive people out of British Columbia. I'd like the members to name one person whom succession duties have driven out of British Columbia.

There are four points made by this spokesperson in direct contradiction to the Minister of Finance. Who am I quoting, Mr. Speaker? I ask the press gallery to lay down their pens. It is a moment of high embarrassment.

I am quoting Mr. Evan Wolfe, the then member for Vancouver Centre.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: He was speaking on March 13,1972.

MR. G.V. LAUK (Vancouver Centre): Resign!

MR. BARRETT: Twelve days short of five years ago that member stood in this House and made these devastating arguments against those who would be opposed to succession only to find that now the limited Hansard of 1972 has come home to haunt him. That's not a slim ghost by any means, but certainly a very weak performance by the Minister of Finance.

Mr. Speaker, four devastating arguments, and then the last point that he made was that it wasn't double taxation. Who am I to read his own words back to the mouth and.the ears of the minister, Mr. Speaker? Far be it from me to rub it in.

I ask the press not to copy this because I wouldn't want to see this be a feature, editorial in The

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Vancouver Sun - well, now that I've blown the whistle, it'll probably be - or a feature editorial in the Vancouver Province, now that I've blown the whistle, or maybe even on page 6. When we get finished kicking the university professors around for picking up a few bucks on the side, or workers in this province asking for 30 per cent more, we might even get a little squib under: "Help Wanted - Millionaires Let Loose in British Columbia."

Will we see a page 6? Oh, not on your life! Naughty, naughty! Will we see a banner headline in any of those establishment papers? Oh, no! Will we see the minister quoted? I don't think you should count on it, gang. It is "millionaires' midnight" coming up three hours from now. It's the start of the protection and the payoff of the traditional establishment who has spawned that coalition legislation we're dealing with tonight.

Mr. Speaker, I thought we were going to have a conjured-up tear for some widow who was described chapter and verse in example No. 1. Oh, yes, this poor dear widow was left with over $200,000 and this terrible succession duty would destroy her chance at future happiness after the loss of her husband because out of the estate of over $200,000 she would have to pay $4,300.

Interjections.

MR. BARRETT: Mr. Speaker, if that is the avowed concern of this particular group, then triple the exemptions! Quadruple the exemptions! It's not the little estates that provide the bulk of this money, it is the multi-millionaires of this province who have been -forced to cough up a fair share of the vast wealth they've accumulated out of the resources of this province.

To spawn an argument that some poor little widow is contributing the bulk of $32 million already collected in nine months is to strain all credibility, especially when we remember what this member said when he supported this legislation five years ago short of 12 days. The poor little widow! One estate alone last year left $28 million - one estate alone! I want to hear it for the children, and for all those who were left, because after estate duties, Mr. Speaker, they were only left $21 million to comfort them over the next part of their life. Out of $28 million, they only had $21 million to take home. Let's hear it for them tonight.

The little widow is the case we got. Then we come to the farmers' part, Mr. Member. Did any of you here get the impression that the farmers were paying succession duty after the minister gave that explanation? Why, he said in his budget speech: "With the passing of this at midnight tonight, no farmer will ever be faced with paying succession duty again." He said it on television, with that noted interviewer, Mr. Jack Wasserman. He said: "We're protecting the farmers."

MR. A.B. MACDONALD (Vancouver East): Farmercare.

MR. BARRETT: Farmercare? No, Mr. Member, you've got it wrong. Mr. Member, the farm - both unincorporated and incorporated - was totally exempted from succession duty under the direction of the former Minister of Agriculture sitting here as my colleague, the member for Nanaimo (Mr. Stupich) . For two years in this province, not one farm - unincorporated or incorporated - that has passed on within a family has had to pay a single penny of succession duty.

What the minister tried to do in a quiet voice tonight was to slide over, in the letter that he read, the gift tax. Yes, the gift tax!

You can't move adjournment now, brother; he's getting his speeches put back to him. I haven't even started on my stuff. I'm still working on what he used to say. (Laughter.)

Not one farmer for two years paid.

HON. MR. WOLFE: I like it. I like it.

MR. BARRETT: You like it. You love it! That's a point that I'm coming to too, Mr. Speaker. I think the House is going to have to rule on whether the millionaires should be allowed to vote on this legislation. You love it. You love it. I'm going to have to go around this province with.... Well, that's one way we'll win a majority here - if the millionaires can't vote.

Interjection.

HON. MR. WOLFE: Gary, will you step outside, please?

MR. BARRETT: We'll have a majority of what's left, I'll tell you. Even the Whip can't vote. He's in enough trouble as it is. Now he can't vote. (Laughter.)

AN HON. MEMBER: Does that include the Minister of Mines?

MR. BARRETT: No, the Minister of Mines (Hon. Mr. Chabot) is in the category that shops in Alberta to buy a suit to save the 7 per cent sales tax.

SOME HON. MEMBERS: Oh, oh!

MR. BARRETT: You know, Mr. Speaker, I suppose the philosophy is: "Let's get this over with. Let's get it out of the way." "I love it, I love it, " he

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says. Guess what? I think that's going to be repeated around this province by somebody. In the middle of the debate, what did he say? "I love it, I love it." Avarice!

Interjection.

MR. BARRETT: Boy, oh boy! Now let's deal with some of the other statements. The gift tax. When we were in government, Mr. Speaker, there was an attempt to leave the impression around this province that we were taxing gifts between husbands and wives and wives and husbands. Don't go now! You can send your wife the money. She can collect it; it won't be taxed. You can do it tomorrow. Do you know what the exemption was on a gift? All those people who got excited in this province about this legislation -the gift tax dealt with any gift over $9,999 between husband and wife.

MS. SANFORD: A year.

MR. BARRETT: A year. How many wives do you know who got a gift from their husband of $9,999 in one year?

MR. SPEAKER: Hon. member, you're now....

MR. BARRETT: On the succession duty. He raised the gift tax.

MR. SPEAKER: You're now speaking about another bill, which is Bill 11.

MR. BARRETT: He raised it. He related it.

MR. SPEAKER: I suggest that you save your remarks about the gift tax legislation until we get to that bill.

MR. BARRETT: It's husband-and-wife legislation. Will he withdraw his? He was the one that raised it. It's the same question. He's the one that raised it.

Interjection.

MR. BARRETT: Okay, I won't speak about the gift tax. But if I had spoken about the gift tax, I would have pointed out that it affects $9,999. Since I'm not allowed to speak about it, Mr. Speaker, we'll deal with that $9,999 exemption later on. '

But he referred to it. In the letter that he read from the Farmers' Institute, he said: "We are thankful about the changes in the Succession Duty and the Blank Tax Act." Now you fill in the words that I can't use. Farms were exempt for two years and the blank taxes had very little effect on relations between Blank and Mrs. Blank. (Laughter.)

MR. WALLACE: You have Block and Mrs. Block.

MR. BARRETT: I'm not naming names. If the blank fits, wear it. (Laughter.) Mr. Speaker, you can be sure I will never refer to this as blankety-blank legislation. The public will decide that itself.

What is the question on exemptions? The incredible thing is, Mr. Speaker, that out of slavish devotion to that coalition, many of the backbenchers will be supporting this legislation without the appreciation that it will not be helping their constituents or themselves.

MR. KEMPF: We'll decide that, Dave.

MR. BARRETT: Well, I certainly hope you do, and I hope you use all the powers that you're able to muster up to decide it.

Mr. Speaker, the minister said that he wanted to encourage investment in B.C. How much money was lost? It is anticipated by the end of this year, Mr. Speaker, that - it is an unusual year, indeed - but we may reach $40 million in this fiscal year alone. Now, Mr. Speaker, let us deal with this magnificent sum of $40 million. Just yesterday, after an exhaustive day of traveling, some 60 citizens of this province came to this Legislature on crutches, in wheelchairs, with physical handicaps that were obvious, Mr. Speaker, to anyone who cared to see.

MR. KEMPF: And Rosemary gave them a road map.

MR. BARRETT: Mr. Speaker, without the facetious remarks that may attest to a heartless backbencher, I'm talking about a government that was faced with a situation.

Mr. Speaker, these people were powerless citizens, of no great import in the passing decisions of this province. They are citizens who, for no other reason than they have the handicap bestowed upon them by fate, will never be at the helm of the ship of state, will never be called upon to participate because of their undesired, unwanted physical handicaps. By the very nature of chance they are dependent upon the rest of us in a so-called Christian society to provide them with their succour and their comfort, as is our responsibility as a civilized community.

We witnessed this pathetic scene yesterday in this Legislature of these people asking that a meagre $22.50 a month be passed onto them out of the coffers of this government, passing on an already-agreed-upon increase from general revenues for their pensions, while this government ignored that plea under the very serious charge made by the member for North Vancouver-Capilano (Mr. Gibson) about privileges of this House related to a letter from the minister.

[ Page 1447 ]

HON. W.N. VANDER ZALM (Minister of Human Resources): Where is he?

MR. BARRETT: I don't know where your Premier is either - I guess he's embarrassed to hear this tonight. Mr. Speaker, these people can't get their $22.50 a month, but the millionaires are going to get their $40 million back a year under Social Credit. So we have $22.50 a month, in a heartless, cruel, unthinking decision, withheld from the handicapped of this province, but we have specious arguments and little games going on by a group that's trying to justify a hand-back of some $40 million.

MS. R. BROWN (Vancouver-Burrard): Shame!

MR. BARRETT: What is that quote from the Bible about how difficult it is for a camel to pass through the eye of a needle?

HON. MR. WOLFE: Don't get in over your head now.

MR. BARRETT: Over my head? My ancestors were in that book a long time before you were, Mr. Member - you embellished it a little bit, but my relatives did the groundwork - and I remember what they said. They talked about the good Samaritan. They talked about the relative ethics that you talk about in here, and you relate your ethics to the amount of money, the morality and the commitment. You talk about going through life and pulling up your own bootstraps and making it on your own, and the myth that somehow you're going to break through these poor little newspaper boys who made it to the top, saving up their pennies and dimes from delivering the Sun and The Province every night, and now the big government's going to take their money away from them. We're not talking about the men who made the millions. We're talking about the fat-cat sons who are going to inherit it. That's what we're talking about. And who is it who used the word "fat cats"? Not me, Mr. Speaker. Don't label me as a person who would put such a label on the wealthy. No, sir. I only like to quote other people who have been in this House too.

Twenty-two dollars and fifty cents - we can't afford it for the handicapped. Five years ago less 12 days, in that same famous debate in this House, these following words were said: "My friends, I don't wonder. . . ." Excuse me. For those who never saw the rerun of this movie you must understand how it went, and for appropriate background noise it would be most appreciated if there'd be unthinking desk pounding at the appropriate cue. Now: "My friends, I don't wonder at all that some of these representatives of the fat cats are preaching their doctrine, blah, blah, blah." (Laughter.) That was an attack on you, Mr. Member for Oak Bay (Mr. Wallace) , made by one of the more rational members of this House who, on occasional fancies of full flight, would insult groups of people to make his point:

My friends, I don't wonder at all that some of these representatives of the fat cats are preaching their doctrine tonight. I'm going to tell you this. They talk about double taxation, with the federal income tax, saying that we wanted larger exemptions. As long as I'm Minister of Finance I will never agree to tax the people with low incomes and let the people with the wealthy estates off scot-free, my friend - never. That might be the new policy of the Tory party in this province but I want to say that's the reason I left the Tory party and that's the reason the ordinary people will not vote for the Tories in the next election. That's really the reason now.

Now I want to say this. As far as these people who share their money in this country, who make this money in this province, if they want to go to Barbados or Nassau or somewhere else for a tax saving, let them go. I agree for the first time in this session with the first member for Vancouver East. He said: 'Good riddance, my friend, to those millionaires because we want only people in this province who are willing to take their fair share of responsibility to pay their share of taxes to build this country.' "

Who was it who spoke those words in eloquence?

AN HON. MEMBER: What a difference a Bennett makes!

MR. BARRETT: I don't mind reading somebody else's stuff, but will you stop reading my notes? The quote was mine, Hansard! What a difference a Bennett makes! Do you know who said those words? Gosh, darn! Gee-whillikers! Holy cats! It was none other than W.A.C. Bennett himself who attacked the fat cats! Those labels on rich people even upset me -calling the people in West Vancouver, Kerrisdale and the ritzy parts of this province "fat cats." He was never ruled out of order. Huh! You've never been in the House when he's been in full flight. Any Speaker who would try to rule him out of order would faint! Fat cats! The ghost of W.A.C. is still with us. May his health last a long time and may I say, in the traditional sense, that I hope he lives another 130 years. But his finest hour was when he delivered this speech because he said it as a self-made millionaire who made his own dollars, worked hard, sweated through the hardware store, made it on his own, fought through the giant corporations, made millions and then announced: "My millions, too, will be taxed so that the ordinary people of this province can have some succour and comfort."

What a difference a Bennett makes! Oh, if I could have said that, for sure! Because what is wrong with that quote, Mr. Speaker, was that in an aberration, in

[ Page 1448 ]

a moment of regret some four months later, the great Social Credit Party had a convention in Kelowna and they came forward with what was known in the spring of 1972 as the Kelowna Charter.

AN HON. MEMBER: Garter?

MR.' BARRETT: The Kelowna Garter - the Kelowna Charter. It was devised to hold the party up before they went into that election. Do you know what the former Premier W.A.C. Bennett said in a moment of temporary lack of recall about his earlier commitments? He said: "Vote for me!" He had brought this bill in; he had fought for it. Caught up in political zeal, abandoning what was described here by that member as a code of ethics, in a moment of political zeal and political fervour, he said: "Vote for me and I'll eliminate the tax, that bad tax that some bad politician brought in four months ago!" Selective memory.

The Social Credit policy on this position has been nothing but a political party of hypocrisy -hypocrisy on the basis of commitments made in this House, statements made in this House, promises made to the people of this province, agreed to in legislation in this House only to witness tonight, Mr. Speaker, an unspeakable presentation of specious arguments, nonsensical whimsy about widows and unfounded statements that money will leave this province purely on the basis of paying off an election debt to the wealthy of this province - just to pay off an election debt to the wealthy of this province.

Mr. Speaker, I said the other day I would welcome a nice, calm rational debate with the Premier of this province about issues facing the people of this province - the lack of capital investment - this very afternoon. In hearing a windup statement about the need for capital investment by borrowing deficit financing through B.C. Hydro, we heard the statement from that very own minister's lips saying that capital expenditures by a Crown corporation were good for employment. It would provide jobs. I accept that argument, although I did not accept his explanation of the bill.

But if that gem of an argument had some validity some few hours ago, Mr. Speaker, with 112,000 people unemployed, is this the time to pull $40 million out of the economy that could be providing jobs and comfort to citizens of this province who need it?

What is the story that we get throughout this province from Social Credit? "Practise restraint." Yet tonight, the very word from that minister was that this bill would encourage the millionaires. Encourage the millionaires! But practise restraint, the rest of you peasants out there - especially the handicapped. Oh, yes! We can't give you that $22.50 a month; it might upset the bookkeeping. Squeeze them for another nickel.

We are collecting more and more, and I might say more than any other time. We never chased any millionaires out. As a matter of fact, millionaires are admitting they made more money under the NDP than they ever made under this bunch.

Mr. Speaker, let us presume that that member's statement is correct - which it is not. Let us do a 24-hour twist. I have not heard one government member utter a single word of compassion for those people who were here yesterday asking for $22.50. But when I attacked this legislation, what is the defence? Oh, squeeze another poor millionaire.

That's really the comparison. It is the litmus test of the mentality of this coalition government. It is a litmus test that shows you are blue, Mr. Chairman. You are blue with the Tory blood running through your veins, based on some antiquated idea that power has a right to money and that it should not be taxed.

Mr. Speaker, I would ask that those nervous birds down at the end to please stop chirping. You bother me. I want you, Mr. Speaker, to protect me from the vicious assaults from those backbenchers.

Mr. Speaker, on February 22 of this year we asked the Minister of Finance if there was a report prepared in his department giving a breakdown of administrative costs. We asked the minister if there was a report prepared on how much was involved. This was the exchange as reported in Amor de Cosmos' paper.

Old Amor! Old Amor, if he was alive today, would have had a front-page story about this bill. Old Bill Smith knew where it was happening.

"A report being prepared by the Finance ministry on the effects of lifting succession duties will not be made public. Finance Minister Evan Wolfe left no doubt about that when asked in the Legislature Monday by David Stupich (NDP-Nanaimo) if the report had been completed: 'I don't have such a report, ' Wolfe answered.

" 'Is the study still underway?' Stupich asked.

" 'There is no report, ' Wolfe answered.

" 'Will you table such work as has been done to date?' Stupich asked.

" 'There is no point in that; there is no report.' "

Well, he tabled some of it tonight.

So it really doesn't exist, Mr. Speaker, and I ask the Clerks not to register any document that doesn't exist, even if they got it from the minister. It's a document that doesn't exist because the minister denied its existence just a matter of a few days ago.

It isn't a matter of waiting five years, Mr. Member, to have your words come home and haunt you. It's a matter of days!

Let's deal with the arguments to encourage money

[ Page 1449 ]

to remain in British Columbia. There is no proof, Mr. Speaker, whatsoever that any single citizen would be so irresponsible as to leave British Columbia to avoid the succession duty - no proof of that whatsoever. However, if that indeed is the case, then we can measure the words of former Premier W.A.C. Bennett: "Let them go."

To encourage investors in British Columbia, Mr. Speaker, that cash or that money is already held in investments in this province. Do you mean to tell me that all of these super-wealthy people have cash under their mattresses and that they only pull it out at the time of succession duty, and we send someone in from the government to count the cash under the mattress? Not on your life! It's invested in the lifestream of this province as it exists.

Mr. Speaker, we heard the member say that 1977-78, even after this is over, in the short period of time before the bell struck midnight the night of the budget speech ... he admits tonight in this House that $13 million would be collected. Thirteen million dollars makes a lot of $22.50s a month for the handicapped.

What about the elderly - the pioneers who helped build this province and also helped build the riches?

When we brought in the whole question of Pharmacare, the drug programme that was paid for by the citizens of this province, I remember that the debate that went on said: where will we get the money to pay the $18 million that Pharmacare will cost?

The member for Vancouver-Burrard said at that time: "What greater way for citizens to contribute to the well-being of the elderly of this province than to have succession duties collected to pay for this particular programme?" And it more than paid for it.

Mr. Speaker, there is no evidence that anyone was forced to sell a small business or a farm. Let's end that myth. His own department - and I challenge the minister to.disprove this - cannot lay any evidence in front of this House that a significant portion, if any, of small farms or businesses had to be sold to pay the succession duty. The succession duties have been superseded by federally imposed capital gains tax, says the minister. Not so! This argument is not valid on technical and revenue grounds. Technically, the capital gains tax is imposed on the increase in the value of the given asset. Why didn't you explain that,

Mr. Minister? Why did you leave us with half the information?

Now we come to the question of how many people are involved. If there is great concern about 1,200 estates affecting widows, Mr. Speaker, then let the government give greater exemptions to widows - double the exemption. But instead of that we get these nonsense arguments.

In 1975, Mr. Speaker, 13,300 estates were assessed. That is what the minister said. Only 1,906 were liable for duties. We're talking about 1,906 estates 'out of 13,300 that the minister says were assessed. Of the 1,906 against which duties were assessed, about 1,200 were valued at less than the exemption level. Did you say that, Mr. Minister? You kind of left that out, through you, Mr. Speaker. That was kind of fudged, so let's go over it slowly.

I asked you to repeat it. Of the 1,906 against which duties were assessed, about 1,200 were valued at less than the exemption level. What does that leave? They paid duty only because they had beneficiaries who were strangers, not widows. The minister' didn't make that clear, Mr. Speaker. We were left with the impression that these 1,200 cases involved similar cases to example 1. They paid taxes because they were not widows, and I want to correct the impression left by the minister who, I are sure, would not want to leave the House with the impression that 1,200 widows had to pay. Oh, no! He wouldn't want to leave that impression at all. They paid duty only because they had beneficiaries who were strangers or not in the direct line of succession.

Listen to this. We've heard tonight that it's to save money going out of the province, Mr. Speaker. Two hundred and sixty-nine of the 1,906 that were assessed were out-of-province estates. We had the power to reach out of the province. Did the minister hare that with the House tonight? I don't recall hearing him say that. We're saying here about 13 to 14 per cent of all the estates that were taxed were out-of-province estates. Even if they ran out of British Columbia, we reached them through the relatives, Mr. Speaker.

Do you know how much we collected on those that the minister did not tell us about? My information is that out of those 14 per cent of the estates we collected $8.4 million in out-of-province money. Now he wouldn't tell us that tonight, would he? There was an impression mistakenly left by the minister - I don't believe he had the intention of doing that - that once they left the province he couldn’t tax the estate. But we can, because if the heirs live in British Columbia we can tax those states.

Interjection.

MR. BARRETT: Yes, $8.4 million. These two groups paid $8.4 million - that's right.

Interjection.

MR. BARRETT: We're not talking about the widows that you described, Mr. Minister of Finance. When you described it you left the impression that these 1,200 widows.... They weren't widows.

Interjection.

[ Page 1450 ]

MR. BARRETT: Yes - out-of-province and the other group. Well, why didn't you mention that these 1,200 estates weren't widows? Did you neglect that? If you did, I'm sorry. I want to correct the minister's statements. He meant to say the 1,200, but he didn't mean they were all widows.

HON. MR. WOLFE: I accept your apology.

MR. BARRETT: Oh, I accept your correction.

These two groups paid $8.4 million, or 30 per cent of the approximate $28 million of duties assessed in 1975. Is the $28 million figure wrong? That's not what you quoted here earlier tonight. We'll have to check the Blues, but you never got the $28 million, through you, Mr. Speaker. .

Now this is the key, Mr. Speaker, and this is really what we're talking about here. There is a population in this province of well over two million people. Seventy per cent of all the tax money collected in 1975 under this legislation came from 430 super rich people in this province - 430 estates wealthy enough to contribute $17.4 million. Four hundred and thirty estates had so much money that they paid the 70 per cent of the succession duty - hardly a robbing affair on the poor, Mr. Speaker.

No such robbing of the poor widow. If the minister really means to protect the poor widow and if the minister likes to abandon the impression that somehow they're getting hurt, I'm willing to accept his amendment tonight to knock off the top 30 per cent - except the out-of-province ones - and let us collect out of the average of 430 estates that $17 million.

How do you justify the appeal to the working people of this province to cool their ardour for an increase in wages? How do you justify the appeal to the nurses and the psychiatric staff to adjust their demands down? How do you appeal to the Mincome recipients who are forced to go on GAIN to lower their expectations? How do you appeal to the other two million citizens of this province who have been told by this government to practise restraint, when by your own figures you show us that you're going to relieve approximately 430 families of paying $17 million a year?

We're not here to govern for the rich. We're not here to give special favours to anybody, especially the rich, at a time when you make great statements politically to the working people of this province -the unorganized workers, the small businessmen, people on fixed incomes. You make the hollow appeal on the basis of restraint, and yet it is revealed here, an undisputed fact, that 430 families in 1975 paid the bulk of those taxes of $17 million.

I describe it as hypocrisy, Mr. Speaker. I have no other choice of word - hypocrisy. If you're going to pass this legislation, the least you could do as a political party is to have the decency to abandon this mocking call of restraint to the handicapped, to the poor, and to the unorganized and organized workers in this province.

Mr. Speaker, I want to calculate this, and I hope the minister will get up and correct me if I'm wrong. Of these 430 estates, let's narrow it down further. Only 22 estates in the whole province of British Columbia were valued at $1 million or more, and they paid $8.6 million or 30 per cent of the total assessments. Is that incorrect, Mr. Minister?

It is not incorrect. Through you, Mr. Speaker, it is a fact that only 22 estates were assessed at over $1 million. Do you know what the odds are - 22 out of 2.2 million? We've got I I millionaires in this House, in the government alone - I I millionaires out of 34 members. The odds of being a millionaire in Social Credit are three to one in terms of legislators. The odds of being hit by this tax in estates in one year valued at over $1 million is 22 out of 2,200, 000. What does that boil down to my friend, the chartered accountant? What are the odds?

AN HON. MEMBER: He wouldn't know.

MR. BARRETT: Three to one if you're a Social Credit MLA. One in three is a millionaire, the second third are trying to get there, and the other one-third are just to be happy to be in the cabinet.

Mr. Speaker, 50 per cent of the 430 were in the range of a half-a-million dollars to one million dollars, and paid $4.8 million, or 17 per cent of the total assessments. Forty-seven per cent of all the money collected was collected from 72 estates. Hardly an attack on the widows of this province. Forty-seven per cent of every penny collected under the assessments in 1975 came from estates above half a million dollars and up.

Is that correct in the non-report, Mr. Speaker? I wouldn't like to read a report that is leaked that is incorrect. Anyway, the report doesn't exist, but I notice you're checking the figures anyway. We'll read it together out loud in this non-report that you didn't get. If you'd like a copy of it to check with yours, I'll send it over.

Mr. Speaker, we're checking together this non-report that the minister said didn't exist when my friend for Nanaimo (Mr. Stupich) asked for it. That's what he said: "This report doesn't exist." But y you notice how he corrected me when I made a slight error on the non-report?

No corrections now. Forty-seven per cent of the money comes from 72 estates, and you give us a crocodile tear for the mythical widow that you're protecting. Three hundred and fifty-seven of the estates were valued at between $200,000 and $500,000 and paid $6.8 million or 24 per cent of the total assessments. Is that incorrect, Mr. Speaker? Is

[ Page 1451 ]

that incorrect from the non-report?

What this all amounts to is that B.C. succession duties are essentially a tax on relatively large accumulations of wealth. Only the super-rich pay, Mr. Speaker, and as long as I am a public servant in this province I will fight for the rights of every citizen, rich or poor. But in this case the rich can very well fend for themselves. It's those people outside, those 60 handicapped citizens who mustered up a demonstration in front of this House yesterday asking for a meagre $22.50.... The Minister of Human Resources (Hon. Mr. Vander Zalm) finds it necessary to write specious memos saying why he can't give them the money, why the Minister of Finance can't pass along the $22.50 to somebody who's in a wheelchair. But we find that 72 estates contributed a total of 47 per cent of the $28 million collected.

What do those people with wealth have over this government that those handicapped people don't have by way of compassion? I can't think of a more stark contrast in 24 hours, reading the report that the minister denies exists back to the minister. While I read the report that he denies exists, he's checking my reading of it in his non-existent copy. It reveals that 72 per cent of the people paid around $13 million, 47 per cent of the money. Sixty handicapped people come over here and they get to meet one backbencher and explain their plight. They're asking for $22.50 a month, and they're going to justify a giveaway of millions and millions of dollars to the wealthy.

Interjection.

MR. BARRETT: Mr. Member, whatever you say and whatever you truly believe in, it will be difficult for me to comprehend how you can rationalize a forgiveness of some $28 million a year in taxes and at the same time refuse to give the handicapped $22.50 a month. At least you should do both.

MR. KEMPF: You shovelled it out of the back of the truck and then you sold the truck.

MR. BARRETT: Mr. Speaker, if you talk about shovelling money out of the back of a truck, this is funnelling $40 million back into the coffers of the Cadillacs and the Rolls Royces of this province, and every single one of them will have it in their glove compartment. Open up the trunk in every Cadillac tonight; open up the trunk in the Rolls Royce. It's unbelievable - just unbelievable - those attitudes. I hope that that member will go back to his constituency and stand up and say the words that he said here tonight to the people of his riding.

MR. KEMPF: I already have!

MR. BARRETT: I hope you'll stand up in front of those hard-working people in Houston and in Vanderhoof and tell them yes, yes, yes, you fought for the millionaires tonight. This is because a large number of the cases of estates valued are below that figure.

Mr. Speaker, the exemption level is either a flat $150,000 or $125,000 plus the value of the residence annuity and $25,000 of life insurance. The minister tonight when he read the exemptions did not quite give a clear explanation that the family home is exempt, but I notice that when that was pointed out he certainly agreed that the family home was exempt so that that poor widow was protected.

AN HON. MEMBER: You were jumping up and down in your seat.

MR. BARRETT: I wasn't jumping up and down in my seat, Mr. Member. I asked you a few questions. Don't you start jumping up and down. You'll get a chance at the wrap-up. If you feel this flippant about it, through you, Mr. Speaker, if you feel this gay and delighted about your own words being read back to you, your own statements saying there was no report - and five years ago you were saying that it's not your code of ethics to give away $21 million - if you feel comfortable about that, I'm not going to judge you; someone else will.

But there are far more non-political admonitions in this whole life, Mr. Speaker, about what our moral responsibility is to other human beings. We're healthy; we're at least able to fend for ourselves. It's only by fate that those of us who arrived here are lucky and enjoy some of the comforts of life. But our moral obligation is to protect the poor and the weak and those who can't struggle for themselves. And you mock this speech! Why, yesterday 60 handicapped people asked for a lousy $22.50, and you mock it and give away $40 million and think it's funny.

Well, I don't find it funny one bit. I'll say what I have to say and fight for what I believe in because tonight When I go home, I'm going to sleep with a clear conscience - I'll tell you that, Mr. Speaker.

Mr. Speaker, the nine-month report indicates that $50 million less was spent on Human Resources than we budgeted. There are lower expenditures in Housing and in Health. And $32 million will be given to the millionaires. We have an ironic twist on Robin Hood tonight, Mr. Speaker: this will be a robbery for the poor to provide for the rich.

An incredible, insensitive and frankly stupid decision by a government that is screaming "practise restraint, we need more investment" has sucked up close to $500 million out of the economy by taxing the ordinary people of this province through ICBC, through medicare premiums, through income tax. Of all the years to do this, why this year? If you want to

[ Page 1452 ]

demonstrate to the people of this province that you believe the wealthy will lead the way, of all the years to do it, why this year? This is rubbing the people's noses in it, Mr. Speaker; it's rubbing salt in the wounds. It's telling everybody out there: "We ask for your vote but don't ask for our responsibility.-

This is the most irresponsible act by this government in the 14 months you've been in power. Irresponsible not only as a loss of money, but how do you expect psychological understanding of your appeal to ask for restraint when you give money to the millionaires? It makes a hypocrisy of your argument when you go out to people and say: "Don't ask for more, Mr. Worker; don't ask for more, Madame Nurse; don't ask for more, retired pensioner. Don't ask for more - but we're going to give to the millionaires."

And you sit smug, happy, content, insensitive, and you're going to ram it through.

And I'll tell you this, Mr. Speaker: any time the Premier wants to go on television with me on this issue, I'm ready. I'm ready. Lay it on the line. As a matter of fact, Mr. Speaker, if the Premier of this province feels so strongly about this legislation, let him resign his seat and I'll resign mine, and we'll call by-elections on this very issue in both ridings at this time, Mr. Speaker. Let the people of this province decide where they think.

You know why, Mr. Speaker, the Premier isn't here; you know why the government is going to ram this 1 legislation through. Because it has no commitment to the ordinary people of this province, and the best that I can say for you is that you're shameless.

MR. E.N. VEITCH (Burnaby-Willingdon): That was quite a show. Actually, 1 do believe that the Hon. Leader of the Opposition believes what he said; it's too bad that he's so misinformed.

Certainly it's a pleasure, sir, to take my place in this debate on Bill 12, the Succession Duty Repeal Act, as we do more toward fulfilling another promise which we made to the people whom we canvassed on December 11,1975.

Your Honour, ever since this Act was proposed by the Hon. Minister of Finance, the opposition, namely the New Democratic Party, has attempted both inside and outside of this House to delude unwary citizens of our province into believing that this bill was merely a gift to a few rich folk and indeed that the beneficial effects of this legislation would be for the wealthy and the wealthy alone.

It's my desire, sir, in the time that I'm allotted tonight, to convince every thinking member of this assembly of the fallacy of that presumption and indeed to find out the potential that bills of this type have for increasing investment potential and job capabilities, together with all of the attendant advantages that industrial and economic expansion can provide for all of the citizens of British Columbia.

I hasten to add at this point that I'm not in the position of being one of that small percentage of individuals to whom the opposition refers would be affected by succession duties. I can therefore speak with absolute liberty in pursuing the points which I have to make today.

Mr. Speaker, we sat in this parliament and listened day by day as the opposition hammered away at the Minister of Economic Development, while speaker after opposition speaker cried for an increase in economic activity within the province. They failed to offer one single constructive solution as to how this could be obtained.

While the Succession Duty Repeal Act is no panacea for economic ills, Mr. Speaker, I feel it's a step in the direction of providing assistance to one of the components that make up economic activity and expansion in a competitive enterprise society. And that component, sir, is capital. W.A.C. Bennett realized this in 1972. In section 5 of the Kelowna Charter he stated:

"Further to the announced policy of the provincial government to form a Crown corporation, The B.C. Development Corporation, which will supply new, low-interest loans for the processing of farm products and for secondary manufacture, the provincial government will also, at the next session of the Legislature, in order to build up capital in the hands of British Columbians, cancel succession duties and cancel the gift tax in this province."

Mr. Speaker, it's widely known throughout the Dominion of Canada that every dollar that is earned by an individual is taxed on an average, from all combined sources - municipal, provincial, federal, sales tax, excise tax, property tax, and the like - at the rate of approximately 46 cents. This means that anything that is accumulated by an individual for future savings or investment, before allowing for the basic necessities of food, shelter and other items, must come out of the remaining 54 cents on every dollar. When an administration in any jurisdiction further taxes the dollar by means of death duties, estate taxes, succession duties, and/or gift tax, this is tantamount not only to double taxation, but often to treble taxation.

Mr. Speaker, I consider that to be basically unfair. Most large holders of capital and capital estates hold this opinion as well - in fact, so much so that they use every legal means at this disposal to make sure that Big Brother government is unable to wrest the savings and accumulations of a lifetime from them. They do this by setting up an elaborate system of funds, corporations and trusts in jurisdictions that are more favourable to capital holders. In doing so, it is

[ Page 1453 ]

estimated that countless billions of dollars are driven underground in North America - billions of dollars which could and would become productive investment capital which would build our factories, open up our natural resources and employ our citizens, who would in turn pay taxes to provide the funds whereby governments could' expand their services to those people who cannot help themselves.

It's about this that I wish to speak for a few moments. At this point I would like to quote from an eminent personality in the field of finance. This is from an address by William B. Laurie, who's the president of the Institute of Chartered Accountants of British Columbia, when he spoke to the Prince George Rotary Club on February 8,1977. In referring to succession duties and gift tax, he stated:

"One of the, main thrusts of the provincial budget was the removal of succession duties and the repeal of the Gift Tax Act to strengthen investor confidence in British Columbia. This has been labelled "rich-a-care, ' a plum for wealthy supporters of the Social Credit Party. I know, and you know, that this is pure political posturing. Wealth is not confined to any one party. There are some awfully rich socialists about, but that is not the point anyway.

"Succession duties have been a nuisance tax for years. The cost of collecting approximates the duties collected, and has, in my opinion, resulted in a very elaborate scheme of estate freezes or the exodus of wealthy families to other domains where succession duties do not exist. Gift tax is purely a form of taxation to prevent people from giving away their estates to their families during their lifetime, thereby avoiding succession duties.

"What is the history of death duties? They go back centuries to the tribal days where, upon the death of a male member of a tribe, the chief took possession of. all the deceased's chattels, but he had to look after the widow and orphans for the period of their dependency. England introduced a legacy tax in the 18th century, and a succession duty and estate tax in the 19th century. Ontario introduced a limited succession duty in 1892. Subsequently, all provinces entered into the field and the federal government introduced the Dominion Succession Duty Act in 1941. In the 1940s, all provinces except Ontario and Quebec suspended duty legislation under agreement with the federal government, whereby federal succession duties were doubled and split with the contracting provinces.

"To the surprise of almost everyone, the federal tax reform legislation of 1970-1971 repealed the federal Estate Tax Act and the Gift Tax Act. The federal government did this in anticipation of the recovery of additional taxes through capital gains taxes arising on deemed dispositions of property at a fair market value on the death of a taxpayer, and upon making gifts or undervalued transfers.

"The provinces generally adopted the position that it would be a long time before post-1971 capital gains would be sufficiently great to yield the same revenues as those received from death taxes. As a result, each of the provinces, other than Alberta, reintroduced provincial succession duty legislation. Since that date Prince Edward Island, Newfoundland and Saskatchewan, subsequently reintroduced by the NDP, joined Alberta in dropping succession duties. Since that date all of the provinces that have not repealed succession duties have raised the exemption or reduced the rates to a level which was not of a confiscatory nature. This did not apply to B.C., which still maintained a minimum rate of 15 per cent to a high of 32 per cent on estates in excess of $1-M, 000.

"Dr. Louis 0. Kelso, adviser to Senator Hubert Humphrey, published a survey of estate tax legislation in the United States and Canada in 1973. He concluded that these estate taxes impounded capital and placed large sums in the hands of political bureaucrats to the detriment' of the national economy.

"As can be readily seen, death taxes levied by the provinces, combined with federal capital gains taxes, virtually destroyed an estate. Since many estates are of an unliquid nature, i.e., shares in a private company or family business, the death of a principal has frequently resulted in the winding up or sale of a family business. Estate planning became a very attractive pursuit by businessmen, not just the wealthy, as estates over $250,000 attracted very heavy duties, depending on the relationship of the beneficiary to the deceased.

"It is now very difficult to generate any sympathy for the heirs of the wealthy. Generally the very wealthy are more mobile than the middle class. In many cases the larger companies went public, leaving the business owner with marketable securities which he could take to tax-free havens along with his beneficiary. As usual, it was the middle group that suffered more acutely, as they are the measure of our British Columbia economy. Their wealth was centred in small business corporations, usually, with two or more generations actively involved in the business. They probably had major capital investments in portable sawmills, planer mills and service

[ Page 1454 ]

industries employing thousands of persons, and their wealth was largely locked in.

"Upon the death of one of the members, the family faced not only succession duties but also capital gains tax. Succession duties, as formerly levied by the province of British Columbia, would require that certain of the corporate assets be liquidated and distributed to the estate. This distribution, of course, would attract income tax, and the 10-year-clause net proceeds of the distribution used to pay the succession duties. In addition, owing to the capital gains section of the Income Tax Act, the estate also had to pay capital gains tax on fair market value, less the adjusted cost base of the property owned by the deceased. In these days of rampant inflation, the result was a very punitive tax. Frequently the end result was the liquidation of the business of the sale to an outsider to generate the necessary liquidity to pay all of the taxes.

"IS it any wonder that under these conditions British Columbia was experiencing difficulty in attracting risk capital and, more importantly, keeping employment at a high level when many of our small businessmen were being trapped by punitive taxation?

"Don't believe it when someone tells you that only the wealthy will gain by the repeal of succession duties in British Columbia. In fact, British Columbia, along with Alberta, will now become very attractive places in which to invest. "

AN HON. MEMBER: Or to die!

MR. VEITCH:

"Investment, as you know, creates the economic development that provides jobs and increasing tax revenues to fund government services.

"Our government in Victoria is to be congratulated for removing a nuisance tax which produced little or no revenue but which was having a detrimental effect on our province's economy. Restraining government spending and stimulation of the private sector will help to restore our economy to vigour. And the elimination of succession duties is a necessary part of that plan."

Mr. Speaker, the repeal of succession duties and gift tax does not in fact help the rich and hurt the poor or middle class. Under the present Act, Your Honour, preferred beneficiaries, spouses, children, parents, et cetera, have an exemption of up to $150,000, with special exemptions for family residences and farms. Thus a larger portion of all beneficiaries are not taxed heavily and often not taxed at all. On the other hand, persons with larger estates, having the ability to earn and garner this wealth throughout a lifetime, usually had sufficient resources available to them to protect their heirs by the simple expedient of removing the taxable assets to a province like Alberta, where there is no succession duty, and setting up discretionary trusts. A member of the opposition the other day referred to capital as being frozen labour. For the purposes of this debate I will accept that definition and state here and now, uncategorically, that millions of dollars are frozen. Millions of dollars of job-producing capital are frozen in elaborate systems of trusts and funds. Further, sir, the $25 million to $30 million that we collected by way of succession duties and gift tax in this province is merely the tip of a huge reservoir of funds that could become available for investment if more jurisdictions within this country were able to see the light and enact progressive legislation such as Bill 12.

As far back as 1956, Mortimer Adler, a renowned American economist and financial adviser, told the select Senate committee on death duties and gift tax his opinions on the policy of continuing this imposition. Dr. Adler stated:

"For reasons now primarily discussed - the tendency of ownership, or at least the nominal ownership, of capital to increase in a geometric progression - an industrial economy finds it necessary from time to time to counteract excessive concentrations of economic power in certain households. It does this through steeply graduated death taxes and gift taxes.

"Little if any thought seems to have been given to the fact that while this eliminates one type of concentration, it promotes others. At most the effect of these taxes on the concentration of ownership of capital, in particular families from generation to generation, is to limit personal ownership without promoting the ownership of diffused capital."

Dr. Adler continued:

"Let me explain. Very large personal estates can avoid taxes through the assistance of component tax counsel and can postpone and greatly minimize the impact of such levies.

"Franklin Roosevelt answered criticism of the socializing effect of federal estate gift taxes by saying in 1939 that while the government collected its taxes in cash, the business organizations, established and nurtured by the deceased capitalist, still remain."

What President Roosevelt neglected to observe, Mr. Speaker, was that the necessity of raising cash to pay such taxes frequently resulted in the sale of closely held businesses to a former competitor and away from the family of the deceased.

[ Page 1455 ]

MR. LAUK: What did Abe Lincoln think of this?

MR. VEITCH: Next time you see him, you ask him, hon. member.

Mr. Speaker, the present form of our succession and gift tax aggravates the concentration of capital ownership in another way. Where it is otherwise impossible by long-term trust and astute devices to avoid the disseminating effect of succession and gift taxes, large capital holdings today are transferred to tax-exempt foundations.

MR. LAUK: Slim, you're going to see him before I do.

MR. VEITCH: In most cases such bequests are a kind of compulsory charity. The establishment of charitable trusts is more often traceable to the tax laws than to genuinely charitable motives. As contrasted to the quiet martyrdom of paying estate taxes, the establishment of a personal foundation permits some use of one's imagination in disposing of a fortune. There is no cash under a mattress, Mr. Speaker, but it's just as inaccessible.

In 1969, it was estimated that there were .7,300 charitable foundations in the United States with assets of more than $5 billion. The latest statistics show the numbers increasing at a rapid rate. When viewed in the light of objectivity, these foundations and trusts are subject to the following criticism: they, in effect, convert concentrated private ownership into concentrated public ownership. In legal theory, as well as in legislative contemplation, the holdings of charitable foundations are public property. It should therefore be acknowledged that the transfer of productive wealth to charitable foundations gives huge impetus to state control over capital. The establishment of tax-exempt foundations therefore promotes socialism and works against private initiative and private enterprise.

As great fortunes further accumulate in tax-exempt areas, away from those areas which have an imposition of taxation, such as is true of British Columbia' today, these funds do not perform the function of private property. They do not provide a means whereby individual households in the economy can, through ownership of capital, participate in the production of wealth to a degree beyond the mere capacity of labour.

Interjections.

MR. VEITCH: Only political ones. Yes, hon. member, frozen capital is indeed frozen labour. It is frozen opportunity, sir, for the citizens of that jurisdiction which is so shortsighted as to continue the imposition of a tax that benefits none.

I'm sure, in proposing changes to the succession and gift tax laws in this province, the importance of these laws to the provincial revenue was considered.

It is interesting, Mr. Speaker, to note that in 1956, in the United States of America, the federal estate and gift tax collections together accounted for only 1.5 per cent of the total revenue of the federal government. It is also noteworthy, sir, that the percentage of total revenue contributed by this form of taxation has continued to recede. When we consider the effect that revenues from this type of taxation have had on British Columbia's economy, we can see that it was less than I per cent of the total annual provincial budget.

Hence, sir, the contribution these taxes make to support government is not sufficient to deter modifying them if doing so will significantly promote the transition to new, productive capital expenditures. As we pointed out before, Your Honour, due to various tax savings existing throughout the country and the system that can be employed to mitigate the load of succession duty taxation, large successions were rarely taxed, and the average family succession of the middle class was not taxable. In fact, Your Honour, it is doubtful that the cost of administration of the Act made the whole thing plausible.

As every estate in British Columbia, whether productive of revenue or not, had to file returns and had to be processed, which created nothing more than more and more bureaucracy, the Act only caught, as a rule, small estates where the heirs did not come within the preferred class. The most common type was a gift to a nephew or a niece or a friend -very often to a person who had cared for the deceased during their declining years and had received the gift in gratitude for the devotion. An estate for $1 million was thus likely to avoid taxation. On the other hand, an estate for, say, $40,000 left to other than a preferred beneficiary would attract a tax of about $4,000.

At this point, I would like someone else to contribute to this debate. This is from Mrs. D.S. McMillan, Box 338, Qualicum Beach, British Columbia. Mrs. McMillan said:

"When I heard your announcement in Monday's news of the lifting of the succession duties and gift tax, I sighed a sigh of relief. My husband had returned to work at the M & B logging camp on the west coast with the worry of how to raise money to pay the taxes on his mother's estate . . ." If you think this is funny, hon. member, that's why you're where you are today, and that's why we're here.

"Mrs. McMillan had passed away suddenly on January 10 while we were on a short vacation. The woods were shut down, and it

[ Page 1456 ]

was the only time we could take a few days. We were not aware of this very sad situation until we phoned home to say we were on our way home to check on things. We arrived home on the 15th, driving straight home from southern Oregon to help with the arrangements.

"The will was taken to the lawyer on the 17th for the benefit of out-of-town relatives. We heard from our lawyer yesterday that we were going to have to put out a sum of $23,000. The lawyer, Mr. William Pool, says we are not able to take advantage of your good news."

MR. LEVI: How big was the estate?

MR. VEITCH: Maybe you'll learn if you listen for a minute, hon. member.

"The thing is that by the time we paid out for the lawyer, the property assessor, who has settled for $1,000, left to each of the seven grandchildren and to six other relatives, plus other bills and costs that come due, we will likely be out of the pocket.

"Since five of the children are students, we will very likely have to pay the gift tax for them. Four of them are students, some of them requiring financial help to stay in university."

Nephews and nieces, Mr. Member.

AN HON. MEMBER: It isn't a tax problem.

MR. VEITCH: It's a tax problem as well.

"One of the girls is a typist, and occasionally needs financial help.

"I assure you that our earnings are well spoken for. The McMillan family are not without, nor do we have a comfortably large income to relax on. We do not allow ourselves to get in debt and we work hard to save a little. My husband is 56 and I am 53. Now is not the time to dip into savings or borrow money. Since my mother-in-law's estate was still in limbo and still being sorted out and evaluated, couldn't we possibly benefit by your good news? If you can't help us out of this dilemma, perhaps we would give up being British Columbia born and move elsewhere where the cost of living comfortably under such a circumstance is not a strain.

"Please excuse the errors; I'm not a typist. I am a very tired one, and a very tired one-finger typist trying to get things sorted out.

"I expect Mrs. McMillan felt proud to keep her old family property in the family, instead of selling it and living in a comfortable apartment. I think she rather hoped that some of the grandchildren might like to built on it at some time. I think the family built their home on it some 50 years ago, a very modest one at that.

"We don't want to sell the property, as the family really loved that piece of land. But we also don't want to dip into savings at this point in life. I do hope you have some good news for the McMillan family." Is this "rich-a-care"? I think not, hon. members.

MR. MACDONALD: How big was the estate?

MR. LAUK: This lady didn't say how big the estate was.

MR. VEITCH: Mr. Speaker, if you would have that hon. Jack-in-the-box be quiet for a moment....

MR. MACDONALD: How big was the estate?

MRS. P.J. JORDAN (North Okanagan): You weren't listening. He told us.

MR. VEITCH: Mr. Speaker, the result of this taxation was the flight of large sums of money from British Columbia, mostly to Alberta, draining our provincial economy of other sources of revenue and a harsh tax on small estates not protected by' tax consultants and lawyers. The opposition must have been apprised of this problem by their senior financial people. After all, they had an opportunity to cure the evils of this Act and to make it viable. They either did not see fit to do so or apparently remained unaware of the need to do so. For reasons which I have pointed out, it is highly unlikely that any succession duty or Gift Tax Act would succeed as long as any other province provides a tax haven.

I sincerely want to commend the government on their forward-looking legislation in eliminating succession duties and gift taxes. It should be pointed out that this is only one step along the way, only one part of the many components that make up the whole in industrial activity and industrial expansion in this province, or indeed within this country.

Sir, if we are to expand our economy, at least two more factors must be added to capital, and these are materials and the need for service and labour, the last one being a purely human factor. It must be pointed out quite clearly, sir, that if we are to succeed, these three quantities must flow together on some sort of reasonably homogeneous basis. As I have said many times before, we've got to change our thinking in British Columbia and push a more positive button.

You know, Your Honour, I don't believe there is any place else in the world where so many people love a winner. We love to have winners in sports; we admire greatness in the arts. But for some unknown reason, when someone succeeds in the world of

[ Page 1457 ]

business we say that there must be something wrong with it; there must be something phony somewhere. It's time we passed on the same accolades which we give to winners in sports to those people - yes, those men and women - who are willing to invest in our province and provide jobs whereby people can pay taxes and build roads, sewers, and, yes, hospitals and churches. Does not this same sort of individual demand some sort of special recognition in our society?

Labour is of vital importance to our society but so is capital and the individual who makes things happen. Legislation such as we are debating today will help capital come to British Columbia, but in order to have that capital employed properly it is important that we start to work together.

I was interested, sir, in reading the speech given recently to the British Columbia Truck Loggers' Association by the president of MacMillan Bloedel, Mr. C.C. Knudsen. Mr. Knudsen said:

"You may have noticed recently that Jack Munro and I have given considerable space, as letter writers, to a Vancouver newspaper. We have cited our statistics and our positions are quite clear to the public, to the union members and to my shareholders.

"The industry's problems on the coast have been identified dozens of times and many people have identified their favourite villains. The fact is there are no villains. We must look for solutions, not scapegoats. It is our opinion that what we need now is to stop arguing and settle down to doing something. We will have to do the job ourselves.

"No Messiah is coming along to lead us out of the wilderness, and in the absence of a Messiah I would like to suggest that both labour and government join with industry in an effort for all of us to become part of the solution instead of each one of us being part of the problem."

And to that, hon. members, I add my loud amen.

Yes, Mr. Speaker, the repeal of succession duties and gift tax is a step along the way, a step towards not only providing greatly needed capital investment in our province but a step towards increasing confidence - confidence in British Columbia, to paraphrase the Minister of Finance in last year's budget, as a place to build, a place to grow, a good place to live and a good place to do business. I support this legislation 100 per cent.

MR. D.G. COCKE (New Westminster): It's a long time since I've heard so many clichés read in this House. I want to deal with some of the things he talked about in a moment or two, but first I would like to bring to your attention a nice little orange and black booklet. It looks like the NDP policy book according to its colour.

Mr. Speaker, this is the British Columbia Chamber of Commerce, 1975-76. You know what they were asking for? They were saying: "Socreds, pay a debt." And let me tell you what the debt was. I want to remind you about a little sign that we all saw in so many stores and in so many real estate offices. What did that sign say? "What you vote for today, you live with tomorrow." Oh, how they found that out in this province! Oh, how they found that out in B.C.! They're living with it. They're living with disaster and they're clapping about disaster, Mr. Chairman. They're banging their desks about disaster. What a disastrous, what a chaotic group, Mr. Chairman, yes, that's true. What you vote for today, you live with tomorrow. You sure have taught us that lesson well.

Well, now we're paying off. Who are we paying off? Well, let me tell you who you are paying off. This is a recommendation of the Chamber of Commerce of British Columbia, 1975-76. What was their recommendation? I'll read it to you for those of you who have trouble. Succession duties discourage incentive and the accumulation and retention of capital in British Columbia which would be available for investment. In addition, with federal capital gains taxes, of which the provinces receive a share, succession duties result in double taxation. Not all provinces impose a succession duty, and since British Columbia does, the province is at a disadvantage in both attracting and retaining capital within the province.

This is their recommendation:

"That the exemption for a spouse and immediate family be increased to $500,000 to be competitive with other industrialized provinces and to promote investment in the province; that an exemption be provided for the passing to children of closely held small and medium-sized businesses, including incorporated farms."

Well, MR. Speaker, the incorporated farms, the ordinary farms and the family farms were all taken care of by the previous government. They were all taken care of by the previous government. We read the Act. As a matter of fact, we created it. They were taken care of, but right now we're taking care of the friends of this disastrous' group that sits across the way from the opposition.

Now, Mr. Speaker, where do they get all this information about the detrimental effects of succession duty? Where do they get the specious arguments like the one I heard read a few minutes ago? They get them from little vested interests. I heard: him quoting people who have absolutely no authority whatsoever. But here's the Brookings Institute research report. What do they say? The Premier doesn't care what they say, Mr. Speaker. He stands to gain a great deal on this new piece of

[ Page 1458 ]

legislation. I hope he steps outside when the vote's going on.

AN HON. MEMBER: He's getting his.

MR. COCKE: Mr. Speaker, let me quote to you from, this research report No. 49. Let me read this about succession duties.

Interjections.

MR. LEA: You inherited the leadership, now you're going to get the money.

MR. BARRETT: Get Papa's money.

MR. SPEAKER: Order, please! The hon. member for New Westminster has the floor.

MR. COCKE: What do Brookings say, Mr. Speaker? I'll tell you what Brookings says and let me quote this into the record: "What kind of transfer tax is desirable?"

AN HON. MEMBER: I'm your dad's lawyer - I get it all.

MR. COCKE: Would you read this for me?

Mr. Speaker, the Brookings Research Institute says as follows:

"What kind of transfer tax is desirable? Present federal estate and gift tax taxes scored well on several criteria generally applied to taxes of any kind. Compared with most taxes, .they have little effect" - listen to this, Mr. Premier - "on the allocation of resources. They tend to check entrepreneurial drive less than other taxes, and although they come out of savings more than other taxes, they do not either encourage or discourage risk taking."

What in the blazes are we talking about in this House about jobs?

Interjection.

MR. COCKE: Oh, you know, Mr. Speaker, when you're quoting real authorities what do they say? They're going to bring jobs into B.C. because they're going to get rid of the Succession Duty Act. Let me go on, Mr. Speaker.

"They are collected at times and under circumstances that are relatively convenient for both taxpayer and tax administrator. But compared with the problems they raise, they yield very little revenue, and on grounds of equality they're not that satisfactory. So if tax equity is defined as equal treatment for similarly circumstanced taxpayers, the present federal estate and gift taxes don't rank that high."

But, Mr. Speaker, they don't have any of the undesirable effects that this government talks about, such as reallocation of resources, such as reduction of jobs. It is a total smokescreen.

I was interested to hear the member for Burnaby talking in terms of Roosevelt's comments on these kinds of taxes. He was attacking Roosevelt for being in favour of a succession duty tax. Mr. Speaker, let me say this: had they not brought in legacy taxes that he was talking about, had they not brought in succession duty taxes that he was talking about, at the turn of the century and just before, those huge estates that still dominate the western world would have been even more gross - much more.

No, Mr. Speaker, I suggest to you that the attack on Roosevelt isn't going to change my mind. The attack on succession duties isn't going to change my mind. The arguments that I like to listen to, the arguments that I feel are valid, are the arguments that the old Premier made when he said: "Not on your life." How he had that change of heart in 1972 1 can only suggest was brought about by some very strong arguments put forward by some of his very rich supporters.

MR. LAUK: His sons got to him. They laid the wood on him.

MR. COCKE: Instead of creating jobs, as they should be as a government, they are going around pushing this legislation. They should be getting 112,000 people back to work.

MR. D.D. STUPICH (Nanaimo): It's 140,000.

MR. COCKE: The member for Nanaimo says it's 140,000, and I believe that. Certainly 112,000 is the very base core.

Interjection.

MR. COCKE: Isn't that interesting, Mr. Speaker? We smelled smoke in here the other day and somebody said his brain got working.

MR. STUPICH: It couldn't have been that.

MR. COCKE: No, Mr. Speaker, it couldn't have been that because it has'never done so since we've seen him.

No, the Leader of the Opposition was totally correct in his suggestion that they're overlooking the needs of people. I have been out talking to a number of students recently. You know, those students are angry. As a matter of fact, the member for Vancouver Centre today went over to UBC and talked to a

[ Page 1459 ]

couple of thousand students. What were those couple of thousand students saying? They were saying: "How, at a time like this, can they raise our tuition fees but, at the same time, give the millionaires a $40 million break?" I find it difficult to answer that question, Mr. Speaker.

MR. LAUK: The rich get richer and the poor get poorer.

MR. COCKE: Mr. Speaker, I see no excuse for a government overlooking their obligations in the area of education, and yet they're doing it. I see no excuse for a government overlooking their obligations in the area of the disabled, and yet they're doing it. But they have an obligation to that group they made a promise to, that group that said during the election: "What you vote for today, you live with tomorrow." That's the group we're paying off tonight. That's the group this Star Chamber is paying off tonight, Mr. Speaker.

Interjections.

MR. COCKE: The small farm. You know, if that member for Shuswap (Mr. Bawtree) would read the legislation that's currently in force, he would find -even he would find - that his estate wouldn't be taxed. Oh, in that case you've got a million bucks in the bank over and above your farm, because if you haven't you've got the same kind of lawyer as that person from whom that letter came.

[Mr. Schroeder in the chair.]

No, Mr. Speaker, they've been fed a line. The poor member for Shuswap has gone to a caucus meeting and somebody told him this is a good idea. They've told him also that he's likely going to have to - or his family, or his estate - pay some small token amount. But I doubt if you're going to have to pay anything. I don't know the size of your estate, although I know the size of your farm is pretty good.

DEPUTY SPEAKER: Hon. member, please address the Chair.

MR. COCKE: Mr. Speaker , r, I suggest to you that he just check the old legislation. It doesn't need rescinding for his sake; it needs rescinding for these people.

Most of these people in the Chamber of Commerce don't really feel that way. It's the big powerful ones, Mr. Speaker, that have made their point and have got through to this government. They're easy to get through to, because it's those people who paid the piper that now call the tune. It's those people who say to the Minister of Human Resources: "Neglect the disabled!" It's those people who say to the Minister of Education: "Neglect the students, because we want ours and we want it now."

You know, I wasn't surprised that they talked the member for Omineca (Mr. Kempf) into taking this position but I'm shocked at the member for Shuswap (Mr. Bawtree) . I worry about what the member for Shuswap is going to say and with what kind of enthusiasm he is going to say it when he goes back up there to Salmon Arm, Enderby and Armstrong. What are you going to say up there?

AN HON. MEMBER: They'll string you up for being a pinko.

MR. COCKE: What are you going to say up there when you get back to defend your position, which will then be securely on the record of this House forever in history? Bravado now, but wait until we see the timidity then. I just can't wait to see it.

Interjection.

MR. COCKE: I wouldn't tell my brother-in-law or anybody like that - never, never! I might hint to him a little bit - just a word or two here and there might cross my lips, but I'll be very careful.

MRS. JORDAN: They're always threatening!

MR. COCKE: Mrs. Member from North Okanagan.... She and I have been here some time together. Any time she makes those kinds of statements, it just makes me smile. Yes, I'm trying to tell you something.

Mr. Speaker, the member for Burnaby-Willingdon (Mr. Veitch) said that the Leader of the Opposition was misinformed. The Leader of the Opposition tonight read from the same report that the Minister of Finance (Hon. Mr. Wolfe) has. The Leader of the Opposition tonight spoke exactly the way it is.

The member for Burnaby-Willingdon was talking about the cost of collecting and the fact that the large estates were the ones that got off scot-free. We found out that 47 per cent of the money comes from the large estates. That was after he heard from the report that didn't exist but that they both have. But he stood up and made that statement, and I can only think that the reason he had to was because he was pressing on, reading his whole speech - not debating. Had he been debating that speech, he wouldn't have got up and read something that runs counter to what is actually a fact in British Columbia. Maybe he's quoting something about some other jurisdiction in never-never land, but I'll tell you - it's not true here, Mr. Speaker.

We're not trying, by taking this position, to delude unwary citizens, as he indicated. We're not trying that

[ Page 1460 ]

at all. I'll tell you what we're doing. We're reflecting the thoughts and the feelings of the people of this province. They know for whom the bell tolls; they know what succession duties are all about.

The tired Attorney-General (Hon. Mr. Gardom) should go and get some more sleep. We thought he had enough of it for two weeks that he was away. But if he's that tired, run along and get some more sleep.

AN HON. MEMBER: British Columbia's second industry: public inquiries.

MR. COCKE: Hey, when we first said that, there were only seven. Now there are nine inquiries. Snow White and the Nine Dwarfs.

I also listened to that member over there talk about the countless billions - it's said with such authority - driven underground. You know what he was talking about, Mr. Speaker? He was talking about your church. He called the Carnegie Institute a Commie front. Mr. Speaker, he said that's pure socialism. In his terms, you know what that means. He's one of the more right of the right. Somebody told me one time that he was somewhat right of Genghis Khan. But I don't think Genghis Khan is around now to prove one way or the other.

But certainly I would agree. You don't drive countless billions underground. You don't drive anything underground, Mr. Speaker. I spent 20 years in the fife insurance business where the accountants run back and forth and the life insurance men run back and forth taking care of those with whom they are concerned - mostly those with relatively large estates.

Interjection.

MR. COCKE: There aren't any. You know that I was a manager for many years. I don't have the kind of thing like Wolfe Chevrolet-Oldsmobile as a sort of a backup. I am sure that that's going to be left intact for the kids. The Minister of Finance is the last one that should be putting this bill forward.

AN HON. MEMBER: Eat your heart out!

MR. COCKE: There's no need to eat my heart out. I just don't want to see them getting breaks while some of my disabled brothers and sisters aren't. So don't you talk to me about eating my heart out. You go back on up there to Houston and you talk to those people who have needs. There are lots of them in your riding, particularly since you've been there.

DEPUTY SPEAKER: Order, please.

MR. COCKE: Everybody's got a need. They've got a need for a new MLA.

DEPUTY SPEAKER: Order, please.

MR. COCKE: Sorry, Mr. Speaker.

MR. KEMPF: They corrected that on December 11,1975.

DEPUTY SPEAKER: Order, please, hon. members.

MR. COCKE: I just want us to clearly understand just what this all means, What it means is that we are giving the people the low priority and the wealthy the high priority. It's to be expected from a group that's preoccupied with success, as they call it. Do you know how they measure success, Mr. Speaker? They measure it in the millions. Add another zero and it's more success.

They don't measure the work that's being done quietly by some preacher who's holding somebody's hand for nothing - being paid nothing. No, no, no, Mr. Speaker. I've listened to that success syndrome, that success story over there, just too long. No, they measure success by money, and they're proving it certainly now. They are proving it by bringing in a bill that ignores those in need; they are bringing in a bill that enriches the rich even more.

Mr. Speaker, I was around when the federal government took in the succession duties and asked the provinces to get out of that taxing field. They set up the estate tax, which incidentally was a far better taxing system than the succession duties ever were. We improved it some, but it had to be improved more, brought more in line, I think, with what was then the federal estate tax in order to make it fair.

When they got out of it, who jumped right back into it? This province, and they jumped back in hard. As a matter of fact, I think, Mr. Speaker, you were there at the time - certainly I was. We might have had some shady memories about it but we all remember the arguments that were used at that time. The arguments were strong then and they're just as equally strong now.

Mr. Speaker, one of the things that I noticed when we heard of that letter from the McMillan family was the final line saying, "Please excuse the errors." I would suggest, from my standpoint, that I would say to the author of the letter, "Yes, we'll excuse the errors, " because there were a number in that letter. The kind of taxing - that $23,000 taxing - would have occurred on a relatively large estate. Now, Mr. Speaker, if it didn't, and if there is to be nothing left, then I would like to suggest that they better get some other tax advice than what they're getting now.

There are no flights of money from B.C. Somebody show me where the flights of money from B.C. have been as a result of succession duties. The flights of money that are going on in this province now are flights away from the Social Credit

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government, flights away from a government that's been so bottom-line, so abusive to small-business people, to the workers, generally to their constituency in this province. They've been merciless in attacking the economy and they're attacking it again.

But, you know, this is more of a principle thing. When they attacked it before, they took out billions. The Leader of the Opposition said a half a billion dollars. But we're told that the ripple effect of that -or the multiplier effect - had the damage of $2.5 billion. Well, Mr. Speaker, this is only a matter of $40 million, but look at the principle that's involved. The principle is that they're taking it from the wrong people and they're giving it to the wrong people.

So, Mr. Speaker, after attacking Roosevelt for his positions and after taking all of the positions that they're going to take over the next while, I suggest to you that those backbenchers and those government people should go back and reassess this bill and reassess the damage that they're doing to themselves. They're not creating jobs. They're not creating an influx of money into the province. Those are arguments that are totally groundless. What they're really doing is just this: giving support and succour to these people who have the sufficient influence to influence their brothers in the chamber of commerce to come out with these kinds of recommendations. I don't really think, Mr. Speaker, that they all believe what they're doing. I believe, Mr. Speaker, that they would far prefer now to get rid of this ugly thing.

I think you agree with that. I think the Speaker would just love to see this bill go down and be left to die on the order paper. It's a great embarrassment to the government, a great embarrassment to everyone in the House, particularly in view of the fact that people who are eminently qualified indicate very clearly that this kind of legislation isn't in fact warranted, particularly at a time when our economy is suffering. If they must do it, then they should do it when they can meet their other demands.

The Leader of the Opposition (Mr. Barrett) was , talking about the disabled tonight. That wasn't even our own money, that $22. That didn't even come from British Columbia. That money came from Ottawa to our treasury. The Minister of Finance sits on it and the Minister of Human Resources denies it to the people who need it. Not even our own money - Ottawa money. Sometimes we have a difficult time getting our Ottawa money.

Well, Mr. Speaker, I suggest to you that the government should repent. They should walk down the road to Damascus tonight. Get rid of this ugly legislation and let's get on with doing something positive for the people, not this kind of reward to our rich friends. That's what we need tonight, Mr. Speaker.

Hon. Mr. Gardom moves adjournment of the debate.

Motion approved.

MR. SPEAKER: Hon. members, before we adjourn this evening I have a report to read to the House. I'm sorry the hon. member for Revels toke- Slocan (Mr. King) is not here at the moment. I'd hoped that he would be.

Subsequent to oral question period today the hon. member for Revelstoke-Slocan sought to move adjournment of the House pursuant to standing order 35 on a matter of urgent public importance, namely a decision of the public service nurses to serve strike notice on the government as a result of the Government Employee Relations Bureau refusal to agree to binding arbitration. The hon. member proposed that a resolution of the House seeking to instruct the Government Employee Relations Bureau would remedy the problem.

It is not for the Chair to adjudicate upon the merits or the efficacy of the proposed motion, nor must I determine the urgency of the matter. I must, however, decide if the need for debate at this time is so urgent that all other business of the House should be immediately set aside. In accordance with the precedence by which I am bound, I am unable to conclude that there has occurred a sudden emergency in provincial affairs as contemplated by standing order 35.

The matter raised fails on a further ground, that at the present time nothing more is involved than the ordinary administration of the law under the Public Service Labour Relations Act, the Public Service Act and the Labour Code of British Columbia. I refer, hon. members, to a ruling of the Chair, Journals, 1976, at page 115, dealing with a strike vote - an imminent strike of the employees of B.C. Ferries -and to May, 17th edition, at pages 364 and 366.

Further, hon. members, the member for North Vancouver-Capilano (Mr. Gibson) sought to raise a matter of privilege yesterday. As I understand the member, he alleges that the Minister of Human Resources (Hon. Mr. Vander Zalm) has written a letter in response to inquiries regarding federal-provincial cost-sharing agreements which contains inter alia the following paragraph. "Therefore when income assistance increases were granted in October, the budget for the handicapped was still $128 million. It was not increased because it cannot be increased without providing the opposition the opportunity to scrutinize the expenditure in the Legislature during the budget debate."

The member claims that the breach of privilege lies in a reflection on the character or proceedings of the House by alleging a lack of action. As I read this letter, the minister alleges that an increase in benefits

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can only be done through the budgetary process, and such could not take place in October, 1976, as the House was not sitting. This statement involves commentary on the parliamentary procedures of this House. I cannot see that it casts any aspersions on this House or on any member regardless of whether or not the comments are concurred in by other members.

A further paragraph reads as follows: "Again, I can only reiterate that to suggest that there ever has been the $22.50 that could be passed along indicates a gross misunderstanding by opposition critics." In my opinion this paragraph involves a comment on the position taken by certain members. This comment does not infringe on the rights of those members, nor does it constitute a comment on the character or proceedings of the House.

In dealing with the letter as a whole I find that neither the dignity of the House nor the rights of the members are infringed upon. Accordingly, I rule that no prima facie case of breach of privilege has been raised.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 10: 52 p.m.