[ Page 271 ]

CONTENTS

Routine proceedings

Supply Act, No. 1,1978.

Royal assent –– 271

Oral questions

Tax sharing agreement. Mr. Barrett –– 271

Youth containment legislation. Mr. Gibson –– 272

Use of ministerial stationery. Ms. Brown –– 273

Beef income assurance cheques. Mrs. Wallace I –– 273

Issuance of timber licence to Doman Industries Ltd. Mr. King –– 273

Cowichan Bay moratorium. Mrs. Wallace –– 274

B.C. copper smelter. Mr. Lea –– 274

Function of Ed Hameluck with CLEU. Hon. Mr. Gardom replies –– 274

Budget debate

Mr. Stupich –– 275

Mr. Gibson –– 289

Mr. Stephens –– 299

Hon. Mr. McGeer –– 301

Presenting reports

Law Reform Commission of B.C. report on the Absconding Debtors Act and Bail Act. Hon. Mr.

Gardom –– 306

Legal Services Commission annual report 1976-77. Hon. Mr. Gardom –– 307

The House met at 2 p.m.

Prayers.

MR. SPEAKER: Hon. members, I am advised that His Honour the Administrator is about to enter the chamber. All please rise.

His Honour the Administrator entered the chamber and took his place in the chair.

SUPPLY ACT, NO. 1,1978

CLERK OF THE HOUSE: Supply Act, No. 1,1978. In Her Majesty's name His Honour the Administrator doth thank Her Majesty's most loyal and dutiful subjects, accepts their benevolence and doth assent to this bill.

His Honour the Administrator retired from the chamber.

MR. ROGERS: Mr. Speaker, in the Speaker's gallery today are two visitors from South Australia, Mr. and Mrs. Keith Russack. Mr. Russack is the MLA for the constituency of Goyder in the South Australian parliament in Adelaide. I ask all members of this House to make him welcome.

HON. MR. CHABOT: We have in the Speaker's gallery today 11 students from the David Thompson Senior Secondary School in Invermere, with their principal, Mr. Dave Harrison, and Mrs. Harrison. I'd like the members to welcome them.

MR. LEA: Mr. Speaker, we have in the gallery today a visitor from Kingston, Jamaica, a friend of mine, Tony Gambrill. I ask the Rouse to make him welcome.

HON. MR. GARDOM: Mr. Speaker, I'm very pleased to say that today in the gallery we have some representatives of that historic pillar of democracy, Greece. Sitting up here we have representatives of the Hellenic community in Vancouver: Mr. Angelo Pappas, who is the president of the Hellenic Community Association, Mr. Papoutsakis, Mr. Capadoucas, and Mr. Jim Pappajohn.

MRS. WALLACE: Mr. Speaker, I'm very pleased to have in the gallery today a good friend visiting me from Surrey, a former member of the B.C. provincial marketing board, Mrs. Margaret McDonald. I ask the House to join me in welcoming her.

MS. SANFORD: Mr. Speaker, seated in the gallery today is a representative from the B.C. Federation of Labour, Johanna den Hertog, who is here this afternoon to hear the response of the official opposition to the budget speech. I ask the House to make her welcome.

MR. SHELFORD: Mr. Speaker, I'd like to introduce three people from the future transportation centre of northern British Columbia: the mayor of Kitimat, George Thom; alderperson Fran Bouchard and city manager Ben de Kleine. I'd like the members to make them welcome.

MR. COCKE: Mr. Speaker, I've been informed that there are some students from the New Westminster area - the Royal City - visiting Victoria. I only hope that when they go back they don't report the proceedings today in any other way than would bless this group. Thank you.

HON. MR. McCLELLAND: Mr. Speaker, I had a pleasant surprise when I glanced into the gallery a moment ago; and I would like to introduce and have the House welcome my cousin from North Vancouver, Marilyn Crane.

Oral questions.

TAX SHARING AGREEMENT

MR. BARRETT: I have a question for the Minister of Finance, Mr. Speaker, I would ask the minister if he could inform this House when the government of British Columbia and the government of Canada reached agreement on the federal share of the reduction of the sales tax.

HON. MR. WOLFE: Mr. Speaker, the discussions surrounding the current budget of this province and the budget of the federal government, and proposals embodied in them, have been involved for some months. Until such time as each budget is read and introduced, one can't be sure what the commitments in them would be and, therefore, what the final agreement would be, or involvement of this province. Therefore there is an undertaking by this province, which would arise out of this budget and which is evidenced in the bills which are before the House.

MR. BARRETT: A supplementary question: I want to thank the minister for an answer to a question I didn't ask. I'd like to ask the minister: at what date did an agreement settle

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itself, at what date was an agreement reached between the federal government and the provincial government as to the cost-sharing formula of the reduction of the sales tax?

HON. MR. WOLFE: There is no substantial agreement, Mr. Speaker, until such time as the budget is introduced in either House.

MR. BARRETT: On a supplementary, Mr. Speaker: was the agreement with the federal government contingent upon the date that it was announced or was it understood that it would come into effect once the budgets were read?

HON. MR. WOLFE: Mr. Speaker, I think I've already covered the questions the best that I can under the circumstances.

MR. BARRETT: On a supplementary: the minister has acknowledged that some discussion took place with Ottawa, which indicates....

HON. MR. WOLFE: Am I not supposed to discuss anything like that?

MR. BARRETT: Well, no, that's fine, which indicates that the policy was not arrived at....

HON. MR. WOLFE: That may have been your attitude.

MR. BARRETT: Do you want to answer before I finish? Are you touchy about something?

Mr. Speaker, since the minister admits that it wasn't osmosis that led to this conclusion....

AN HON. MEMBER: Who?

MR. BARRETT: Does he work f or you too -Osmosis? (Laughter.)

I would ask the minister whether or not the initial discussions took place....

MR. KING: The Premier's telling him.

MR. BARRETT: I'll ask the Premier later, if he feels envious, but I'm asking the minister now: can he confirm that the initial discussions took place around this proposal last September?

HON. MR. WOLFE: Mr. Speaker, many discussions took place offering different proposals to do with the economy of Canada, what governments should do by way of directing the economy, et cetera. So certainly discussions back as far as a year ago, or even last fall particularly, did take place.

MR. BARRETT: Thank you. Last supplementary....

MR. SPEAKER: Order, please. We're on the fifth supplementary.

MR. BARRETT: We're on the last one. This is the last one, not the fifth one.

MR. SPEAKER: Please proceed.

MR. BARRETT: Is it not true that if the initial discussions were as late as last September, a late calling of this House, and a presentation of the budget later by two months than is normal practice, saved the provincial government $40 million that could have been spent in job relief and unemployment relief in this province rather than politically waiting for this moment? Is that not true, Mr. Minister of Finance?

HON. MR. WOLFE: No.

MR. BARRETT: Are you sure? (Laughter.)

HON. MR. BENNETT: Quit while you're losing!

YOUTH CONTAINMENT LEGISLATION

MR. GIBSON: Mr. Speaker, I have a question for the Attorney-General. Will the Attorney-General be making a statement on the very serious situation raised by the finding of the youth containment legislation unconstitutional by the courts?

HON. MR. GARDOM: Yes.

MR. GIBSON: Supplementary, Mr. Speaker. I wonder if the Attorney-General could say when. And could he say in the interim how many youths in containment centres are affected by this rule?

HON. MR. GARDOM: In response to the hon. member's question, I'm prepared to make a statement this afternoon. It's fairly lengthy and I'd rather not take up the time in question period, unless the House would like me to do so. However, if the House would like me to take up the time in question period, I'd be more than delighted. I just seek the House's guidance, Mr. Speaker.

MR. SPEAKER: I think we have the House's agreement.

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USE OF MINISTERIAL STATIONERY

MS. BROWN: Mr. Speaker, my question is to the Minister of Human Resources. Will the Minister of Human Resources tell the House whether he has ever used the stationery of his cabinet office to solicit memberships for the Social Credit Party?

HON. MR. VANDER ZALM: I don't recall ever having done that.

MR. LEA: But did you do it?

MR. BARBER: It was a year ago February that this opposition first began asking questions about the now-notorious Bawlf report, and the transcripts thereof, of the Minister of Municipal Affairs and Housing. However, my question is not about the tabling of the transcripts. The minister assured me last week privately that they would be tabled last week and I presume it will happen this week.

My question to the Minister of Municipal Affairs and housing is: has the minister ever used the stationery of his cabinet office to solicit memberships for the Social Credit Party or any other party which he presently supports?

Interjection.

HON. MR. CURTIS: The questioner may be out of order; I'm not sure, Mr. Attorney-General. To the best of my knowledge, I don't recall ever using ministerial stationery. It may have happened but I don't recall it.

BEEF INCOME ASSURANCE CHEQUES

MRS. WALLACE: My question is for the Minister of Finance. Can the minister confirm reports from the British Columbia Cattlemen's Association that the government has not paid 1977 beef income assurance cheques on time and that they will be at least one month late?

HON. MR. WOLFE: No, I can't confirm that.

MRS. WALLACE: Supplementary, then. In view of the fact that it has been reported by the Cattlemen's Association to me that this is the case, can the minister tell me whether or not this is one of the consequences of the government's decision to delay this session so that we are now in the unprecedented situation of being in a new fiscal year with a budget and an interim supply bill first introduced yesterday?

HON. MR. WOLFE: Mr. Speaker, this my have to do with the fact that supply was not proclaimed until today, but I will be glad to look into it.

MRS. WALLACE: Will the minister undertake to add to those late cheques interest payments to compensate for the interest being paid on bank loans by the more than 2,000 hard-pressed cattle producers caught in the bind as a result of this government's bungling on sessional timing?

MR. SPEAKER: The question alludes to the answer to the previous question.

ISSUANCE OF TIMBER LICENCE

TO DOMAN INDUSTRIES LTD.

MR. KING: Mr. Speaker, a question to the Minister of Forests. Will the minister table with the House the agreement or any documents pertaining to the issuance of a timber licence to Doman enterprises with respect to the construction of a pulp mill and a sawmill?

MR. SPEAKER: It is not in order to ask for tabling of documents in question period.

MR. KING: Well, Mr. Speaker, would the minister table them after the question period? That would be quite satisfactory.

MR. SPEAKER: The question does injury to the guidelines.

MR. KING: It won't injure the minister too much, Mr. Speaker.

MR. SPEAKER: Is there a supplementary that would be in order?

MR. KING: Well, do these documents exist, and would the minister at least be willing to confirm that?

MR. SPEAKER: The question is in order.

HON. MR. WATERLAND: Mr. Speaker, I'll take that question as notice.

MR. BARRETT: Oh, you don't know whether you've signed a deal or not, eh?

MR. KING: Is the minister now informing the House....

MR. SPEAKER: Is this a new question?

MR. KING: No, a supplementary.

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MR. SPEAKER: The previous question was taken as notice.

MR. KING: Well, a new question on the same subject. (Laughter.)

MR. SPEAKER: Hon. member, in order to be fair to all members of the House, perhaps I should recognize any other member wishing to ask a question, and then revert to you. Anyone else? A new question, the member for Revelstoke-Slocan.

MR. KING: Is the minister indicating to the House, then, that a timber licence has been issued to Doman enterprises and he is not aware of whether an agreement does exist for the construction of a pulp mill and a sawmill, after making public statements that this indeed was the case?

MR. SPEAKER: The question is somewhat argumentative. The minister may wish to answer the question.

MR. KING: I would never want to argue, Mr. Speaker. Just answer. Don't be afraid.

Interjections.

MR. SPEAKER: Order, please.

COWICHAN BAY MORATORIUM

MRS. WALLACE: I have another question relative to Cowichan Bay, and my question is to the Minister of the Environment. Now that the task force studying the Cowichan estuary has been granted a two-month time extension, can the minister assure this House that a moratorium will be placed on any development in the Cowichan Bay area until such time as the task force reports?

HON. MR. NIELSEN: No, there is no moratorium.

MRS. WALLACE: Is the minister saying, then, that he is prepared to go ahead and take action prior to the report of the present task force?

MR. SPEAKER: It is doubtful whether the question is in order because it has to do with the future activity of the administration.

B.C. COPPER SMELTER

MR. LEA: Mr. Speaker, a question to the Minister of Mines. On January 3, the Minister of Forests announced in Merritt that the new policy of the government is that there is no copper smelter needed in B.C. at the present moment or in the foreseeable future. Does the minister agree with that statement by the Minister of Forests?

HON. MR. CHABOT: Well, Mr. Speaker, I'm not aware of the statement. I would think that it would be an economic plus for British Columbia if we were to have another copper smelter established in this province.

MR. LEA: Supplementary to the Minister of Mines and Petroleum Resources: I wonder if he, the Premier and the Minister of Forests (Hon. Mr. Waterland) could get together and look at the article written by the Minister of Forests for the people in his riding, and straighten this out. There are many people being misled, Mr. Speaker; and the question is: will the minister meet with the Premier and the Minister of Forests and straighten this matter out?

AN RON. MEMBER: Chaos!

MR. SPEAKER: Order, please.

HON. MR. CHABOT: Mr. Speaker, I suggest, if the member has some evidence to back up what he is saying, that he submit it to the members. If there is some difference of opinion between ministers in this regard, I'd be glad to discuss it with my colleagues.

MR. LEA: Mr. Speaker, I'll table that in the House after the question period.

MR. SPEAKER: Thank you. The Attorney

General, a question on notice.

HON. MR. GARDOM: No, I'm responding to a question, Mr. Speaker.

MR. SPEAKER: So ordered.

FUNCTION OF

ED HAMELUCK WITH CLEU

HON. MR. GARDOM: The hon. second member for Vancouver-Burrard (Mr. Levi) directed a question a couple of days ago concerning the job function of Mr. Ed Hameluck with the Co-ordinated Law Enforcement Unit. The response is: under the general supervision of the deputy director of the Co-ordinated Law Enforcement Unit, policy analysis division, Mr. Hameluck was to examine the phenomenon of organized crime in B.C. That was one of his

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principal duties. He has left the service; he tendered his letter of resignation for personal reasons. An undertaking of the confidentiality of information has been received from him.

HON. MR. HEWITT: Mr. Speaker, I'd like to make a statement.

Leave granted.

HON. MR. HEWITT: Mr. Speaker, this refers to a question that was directed to the Minister of Finance (Hon. Mr. Wolfe) by the member for Cowichan-Malahat (Mrs. Wallace) in regard to farm income assurance payments. MY understanding is that 400 cheques have gone out in regard to farm income assurance and the other cheques will be going out shortly. There is no set time for delivery of these cheques to the producers. It takes time to audit the material and as the material comes in, the payments are processed. The funds are certainly in the budget for the year 1977-78, and it is just a matter of timing. There is no delay, Mr. Speaker.

MRS. WALLACE: In reply to the statement, I am pleased to hear that the cheques are now in the mail. Certainly the minister must have been aware of the concern of the ranchers. When he speaks about "no particular time, " I think that is open to some comment because certainly there are specific times that have been established in....

Interjections.

MRS. WALLACE: It's not a question; I'm simply replying to the minister's statement.

I think there is built into the scheme a timing system. Certainly the farmers believe that to be the case and were concerned about the lateness of the cheques. I am very pleased to hear that they are now at least partially on the way.

HON. MR. GARDOM: Apropos of the question from the hon. member for North Vancouver (Mr. Gibson) , I've got a response that is fairly lengthy. Would you like to get along with the budget speech or...?

MR. SPEAKER: Would you like it tabled or would you like to hear the question now? Shall we hear the statement? I hear questions for tabling. The ministers tables a document.

Orders of the day.

ON THE BUDGET

(continued)

MR. STUPICH: Yes, it's a new suit, one for which I paid 7 per cent sales tax.

Since this is my f first time of rising in debate since the opening of this session, I would like to join with those who congratulated you on your elevation to the position of Speaker. I certainly hope that this bodes well for the session and I think, in view of our experience so far, certainly the opposition is very well pleased and does congratulate you and looks forward to enjoying having you sit in your chair as Speaker, for the duration of the parliament.

Mr. Speaker, when I arose in this debate last year, I recall the Premier holding up a copy of my speech notes and congratulating me on the speech. It's not a deliberate move on my part that he does not have a copy in his hands this time. It's just that the last page is hot of f the press and there wasn't time to get one to him. But I am sure there are copies enough around right now if he would care to have one. Perhaps he will hear some of it; I hope he will. Perhaps, Mr. Speaker, he will even listen to some of it.

The Minister of Finance yesterday pulled out a plum in the form of a two-point reduction in the provincial sales tax and said: "What a good government are we!" Pretty weak, Mr. Speaker.

I would suggest that the statement used in my hearing, a statement made by the first member for Vancouver Burrard (Ms. Brown) yesterday, better capsulizes the conduct of this government in office. She said this government is a take-a-dollar, give-a-dime government. For every dollar they have taken away from the people of this province over the last two years, they intend to give back a dime of it - 10 per cent.

MR. BARRETT: Ottawa's dime at that.

MR. STUPICH: That's the Socred shuffle that we have all come to expect, Mr. Speaker. It's just like the Vander Zalm zig-zag we saw last year when the Minister of Human Resources took extra Ottawa dollars provided for the handicapped and passed on to the handicapped only a few cents.

Mr. Speaker, this Socred shell game has got to stop or both the economy and public trust in our political institutions will continue to go from bad to worse. The people of this province have gone through two very difficult years of unemployment, of inflation eating away at the family budget, tax increases and

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user-rate increases every time they turned around. Family businesses are going bankrupt at an unprecedented rate for the province of British Columbia. The bitter pill to swallow was that many of these difficulties were created or compounded by the politically vengeful and economically primitive policies of the Social Credit millionaires' cabinet for whom the bottom line is the manipulation and the exploitation of British Columbians as a political market. It has been a rude awakening for those trusting people who believed and acted on the false promises and misleading election advertising by that coalition of opportunists. Those people no longer believe in Socred fairy tales. They know this budget is no vehicle to better times, Mr. Speaker; it's only a pumpkin.

The budget presented yesterday in this Legislature is a bitter disappointment to those people who trusted this group when they were campaigning for election. I'll come to some details of that, Mr. Speaker, if the minister will contain himself.

The budget shows no imagination in approach to the problems of the people of British Columbia, but worse than this, it shows no vision of the potential for this province to solve these problems and become an economically sound partner in the future of their country.

The Minister of Finance, in introducing this budget, said that it honours the Social Credit government's commitment to lower the cost of government to people. That was the promise, Mr. Speaker. Do you recall? I'm glad he reminded the people of this province that his government had made such a commitment, because this government, through outrageous tax and user rate increases, has cost the people of this province thousands of dollars per family since taking office late in 1975.

The sales tax was increased two years ago by 40 per cent. Let's have some applause for the people who've been paying that 40 per cent increase in sales tax. The government benches were wild with applause when these announcements were made two years ago.

Ferry rates were raised anywhere from 50 to 300 per cent, with the average in excess of 100 per cent. Mr. Speaker, let's have some applause for the tourists who didn't come to British Columbia in the face of those heavy increases in ferry rates.

Hospital co-insurance was increased between 400 per cent and 650 per cent. There's been no applause for the people who've been taken advantage of, who've been lying in hospital beds. Medical-care premiums were increased 50 per cent. Ambulance rates were increased 200 per cent.

Electricity rates have been raised 31 per cent, natural gas rates 36 per cent.

AN HON. MEMBER: How are your wages?

MR. STUPICH: I haven't had an increase in that period of time, Mr. Speaker. Perhaps the hon. member opposite has. There have been all kinds of suspicion about some of the things that are going on.

The local taxpayer's share of education costs - Mr. Speaker, how about some applause for the local taxpayers, whose share of the educational budget has gone up 61.5 per cent?

Home heating costs have gone up 56 per cent. It costs us an average of 139 per cent more to insure our cars.

MR. BARRETT: Well, we've got to pay Robbie Sherrell's salary.

MR. STUPICH: These tax increases have cost the average family of four in British Columbia an extra $1,300 per year for two years now, and this government is giving back, according to the Minister of Finance, $125 million -roughly 10 cents on the dollar, Mr. Speaker.

This government has massively and callously increased the cost of government in this province and now it wants to be congratulated for minimal cutbacks not initiated on their own, but forced upon them by the action of the federal government.

This wasn't their initiative. Remember when the Economic Council of Canada recently urged the provinces - in particular the B.C. government where the need was greatest - to reduce sales taxes in order to help the economy? Our Minister of Finance vigorously opposed that suggestion and said to the Economic Council: "No way."

Mr. Speaker, this wasn't a new idea. I advanced it in this Legislature in January of last year and it wasn't a new idea then. I quoted Mrs. Judith Maxwell of the C.D. Howe Research Institute, who recommended at that time, some 16 months ago, that Ottawa reimburse the provinces for the revenues they would lose in reducing their sales tax. So this programme has been under consideration by the federal government for quite some time.

We know that it has been discussed with the provincial governments, although the Minister of Finance wasn't told about it. It was known about long enough for it to be in the printed budget speech made available to us yesterday because the federal reimbursement is sitting there; the Premier just didn't get around to telling him about it. But nevertheless, as the

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Leader of the Opposition (Mr. Barrett) suggested, it could have been made available to the people much earlier and help us turn around the economy much earlier than it has.

Interjection.

MR. STUPICH: The Minister of Economic Development (Hon. Mr. Phillips) is amused, Mr. Speaker. I hope he will continue to be amused as I carry on with my remarks.

Two weeks ago Mr. Chretien cam from Ottawa and met Mr. Wolfe with the final offer that this government just couldn't refuse; they couldn't turn down this offer. It wasn't their initiative. They were obliged to effect this reduction in sales tax - not because they wanted to, not because they knew that it should have been done, but because they were obliged to by the federal government. Thanks not so much to the initiative of the federal government, I suppose, but thanks in particular to the fact that we have a federal election in the offing, we now have some relief in the province of British Columbia, relief at the rate of 10 cents on the dollar, relief from this idiotic and disastrous Socred policy of squeezing the economy until it chokes.

This government wants plaudits for reacting in the way that it has. Mr. Speaker, it's like stealing someone's wallet and then, when forced to return some of the contents - some 10 cents on the dollar - asking the victim to say thanks. Take $1,300 from a family in one year and give back $125. Take a dollar, give a dime.

Some two years ago the Premier expressed concern about the proportion of provincial revenue that was coming from direct charges on the individual in the form of sales tax and individual income tax. Mr. Speaker, you'll remember discussions about the Clarkson Gordon report and about the Premier's speech that was appended to that. It's been used many times in the Legislature. I'll quote from the Premier's remarks:

"The financial review" - and of course this is over two years ago now -"discloses an alarming trend. More and more government revenues are coming from taxes collected from people. Personal income taxes return by far the largest cash contribution to government and are the fastest growing revenue source. The 5 per cent" - 5 per cent then, Mr. Speaker -"is next. Together, these two items will return more than $1 billion." He's was concerned about that, concerned about the rate at which these two taxes were increasing their contribution to government financing.

Let's just take a look, Mr. Speaker, and see how sincere he was in voicing this concern, and whether or not this concern for taxpayers was just another hollow mockery dreamt up by his large staff of public relation manipulators. Let's look at the figures which measure the performance rather than the promises of this car-dealer cabinet.

In the last year that the NDP was in office, sales tax and personal income tax accounted for 36.8 per cent of the budget - the last budget that we introduced. In the budget just brought down by this Social Credit government, a government which, according to the Finance minister, made a commitment to lower the cost of government to people, sales tax and personal income tax accounts for 48 per cent of the revenue.

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: It has gone from 36.8 per cent up to 48 per cent, and last year it was even higher before this two point reduction in sales tax. So he voices his concerns -crocodile tears - and then proceeds to increase that revenue from those sources from 36.8 per cent of the total up to 48 per cent of the total of a much higher base.

In direct contradiction to what the Minister of Finance and the Premier have been saying, the people of British Columbia know that they are being asked to foot a larger and larger percentage of the cost of government. No catchy slogans, no advertising jingles can hide that fact.

In a recent report by the National Council on Welfare on taxation - a report that was made available to all members in the House, I believe - and on bearing the burden, sharing the benefits, and the distribution of income, it is pointed out that health insurance premium are a form of taxation, and a very regressive one at that.

"Many people may not think of health insurance premiums as taxes, yet they are. The health insurance premium, after all, is a fee charged by the government to pay for government service - the basic definition of a tax. Only three provinces - British Columbia, Alberta and Ontario -have chosen to take advantage of this particular form of taxation. Quebec funds its health insurance programme through a payroll tax. All the other provinces fund theirs from the general revenues raised by income, sales and other taxes" - all other six, Mr. Speaker - "while the provinces

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which charge premiums provide no free or reduced-cost health insurance to their lowest income families. The eligibility limits are not even equal to the poverty line in medium-sized cities."

Mr. Wolfe has assured us that the drop in sales tax from 7 to 5 per cent will give the British Columbia family an extra $10 a month to spend this year. I want to make it clear that I support this measure. I support any measure which will help to relieve and to reduce this viciously regressive tax burden on the people of this province. But it's just a token gesture, Mr. Speaker. This government has taken a dollar from us and now, belatedly and unashamedly, they're giving us back a dime.

MR. BARRETT: Six cents of it from Ottawa.

MR. STUPICH: It isn't even their own dime, as has been pointed out. They're getting it back from the federal government. The estimates show that the federal government's contribution will increase by $208 million over last year's total. The provincial government has agreed, in turn, to take back -with remorse that is two years late in coming - the increase it imposed in March, 1976. Thank goodness for the upcoming federal election. Nothing else could have made possible this Vander Zalm sleight-of-hand with federal money. This provincial government is given $208 million of public money and it agrees to reduce sales tax to its pre-Socred level.

As I said, Mr. Speaker, I welcome this move. I believe it will have a psychological effect on our economy, far surpassing the number of federal dollars involved.

I quote from the budget at this point, Mr. Speaker. You can recall the words used by the Minister of Finance yesterday in announcing this rollback in tax and the effect that he expected it to have on the economy: "The business sector will not only be encouraged by the reduced sales tax on machinery and equipment purchases but, with the general sales tax cut, will enjoy the effects of increased consumer demand."

That, Mr. Speaker, is the point. That is the main hope in this budget, that there will be increased consumer demand. That is the only hope in this budget for the people of this province and for the small business that is mentioned so often in this budget.

I believe that 40 per cent increase in sales tax effected two years ago had a disastrous effect on our economy when this Social Credit government increased it. I hope the beneficial effect comes close to approaching the disastrous effect of what was so obviously a political move on their part some two years ago. I sincerely regret the lost two years during which our economy suffered, a loss from which we will be a long time in recovering.

I must add my regret, Mr. Speaker, that at a time when the provinces have been urged to accept a federal offer to cut sales tax by three points in an attempt to get the economy moving, and particularly in B.C. where it is needed so desperately, this government refused to go further than the two percentage point decrease. The offer was made. The federal government stood to back it up partially. We should have gone the three points and really gone to encourage the economy, Mr. Speaker. I regret we didn't go as far as the federal government wanted us to go. That only confirms the deep reluctance this government has for reducing the sales tax, because, this vital step proves how wrong their solutions have been and how much the Socred policies have contributed to B.C.'s accelerating problems during the past two years.

There is another aspect of these figures which I'd like to draw to your attention, Mr. Speaker. The 1978 gross budget of $3.83 billion, after deducting transfers from the federal government in the amount of $593 million, amounted to some $3.24 billion. The 1979 gross budget presented to us in this document, of $4.28 billion, after deducting the $801 million federal transfer nets at $3.49 billion of provincial money. This represents an increase in our provincial budget, that is net of the federal transfers, of approximately $262 million - $262 million more of provincial money in this budget.

However, Mr. Speaker, an inflation factor of 8.7 per cent applied to the 1977 figure indicates that the budget should be increased by $352 million just to keep pace. In other words, in terms of last year's dollars, the provincial budget - leaving out the federal contribution - has declined by $100 million. There is less of our money going into it.

Instead of the stimulus that this province so desperately needs, this provincial government's expenditures taken alone would aggravate the depression from which we now suffer. To add insult to that injury, the minister criticized the federal government for creating the increased deficit in federal spending which, in part, made possible this artificial balancing of the provincial budget.

I note that revenues from forests of this province are projected to increase by approximately 100 per cent. That is entirely due to the continued prosperity of the United

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States housing industry and the devaluation of the Canadian dollar. I don't know whether I should thank goodness for the latter, but certainly the government cannot take credit for the former.

We can also see, Mr. Speaker, that owing in part to the incredible increases in domestic petroleum prices that we all have to bear -prices that the Premier proposed and supported at federal conference levels - petroleum and natural gas revenues are up 47 per cent. But there are other factors to this increase. This government may properly take some credit for the high domestic price of petroleum prices, for the high domestic price of natural gas and for the low revenue from exported petroleum products. However, this particular government cannot take credit for the establishment of the B.C. Petroleum Corporation, which provides almost $200 million for this particular year's revenue. Almost the amount of the increase in sales tax imposed by this same government just two years ago, an increase which is now being rolled back, courtesy of the federal government. And, as I am being reminded from all around, this particular group voted against that legislation when it was introduced in the House, legislation which is now providing $200 million for the people of British Columbia, and will provide more.

Government takes much credit for the increased drilling activity in the Peace River area, drilling activity which far exceeds previous records. There is another way of looking at these figures, Mr. Speaker. A normal increase would be acceptable and would be approved by all. A fantastic increase indicates a giveaway of our resources.

Interjections.

MR. STUPICH: A giveaway of our resources that reminds me of a phrase I used in speaking in a similar debate just one year ago: "Province for sale. Come and grab it; come and buy it; come and take it...."

It's an invitation to the petroleum companies to rush in and buy our resources before they are faced with the re-election of a people's government that will insist on getting a fair share for the non-renewable resources.

The Conservative government of our neighbouring province of Alberta - the government headed by Peter the Red - at least has the good sense to invest the returns from non-renewable resources so that they will be available for the development of that province. This government before us now has no long-range plans; it plans only for its own electoral survival.

[Mr. Rogers in the chair.]

Then we come to reforestation, Mr. Speaker. I must confess that, when I f first read the press accounts of the Premier's remarks on that subject, I was taken in. I was optimistic. You will recall that last year's allocation to this most vital of our expenditures was slashed and that not even the whole of that meagre remainder was spent. Partly out of....

Interjection.

MR. STUPICH: The member for Burnaby North (Mrs. Dailly) suggests that the member doesn't want to listen - wish I could catch that mosquito. So, partly out of belief that this dismal performance was at least not to be repeated, partly out of a sort-of naive desire to believe even Socred admen in this instance, partly out of my regret that we were not able to do more than we did in our short time in government, I was happy to hear of what seemed to be a genuine concern for the fate of our forests.

Mr. Speaker, no one who is in public life in the province of British Columbia could not be interested in forests. It's certainly the most important activity in the whole province.

My own interest in it goes back some 40 years when I read a book - it wasn't a printed book at that time, and I doubt that it ever was printed - put together by a surveyor by the name of Alfred Hagen. Some of the people in the industry will know him; I doubt that anyone in the House will. At that time, he warned the people of British Columbia that if we continued to cut our forests and continued to cut our best timber in the way we were doing - this was over 40 years ago - we would face a serious problem in the province of British Columbia. Mr. Speaker, he was ahead of his time. He thought the problem would be on us much earlier than it was; changing technology has postponed it, but the problem is still very real.

My interest was renewed upon reading the Sloan commission reports, and upon reading of the millions of acres of NSR - not sufficiently restocked - forest land in the coastal areas and in the interior of the province of British Columbia. The warnings that the Sloane commission gave to the governments of the day, and to the people of British Columbia, about the need to do something about these millions of acres of forest land that were not being replanted,

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that were not growing merchantable timber the way they should be - warnings that go back some 25 years or so....

More recently, I think the people of British Columbia generally have become more and more aware of the need to do something about the millions of acres - the number changes over a period of time; we change standards, we change definitions. I'm not sure just how many millions of acres there are that need replanting right now, Mr. Speaker; however, it is certain that the dollars provided in this budget will do nothing to deal with the problem.

Mr. Speaker, the figures don't show anything like the kind of concern the adman felt. In March of 1975 the NDP government allocated 19.8 million 1975 dollars to that programme. That figure, as good as it looked, when compared - and I hope the Premier is listening to this as well - to the $4.98 million voted in the Socred budget for fiscal 1973, given the circumstances of our forests, was altogether too low. The $19.8 million provided by us was too low. In 1978, after a great blaring of trumpets, the government comes down with a $19.8 million figure - that same figure - plus an additional $10 million that they got from the sale of ferries and from capitalizing on special funds. A grand total of $29.8 million, in terms of 1978 dollars, will buy only as much reforestation as $19.8 million 1975 dollars would have done, even if it is all spent; and there's nothing in the record of this Socred government, past or present, that gives me any confidence in that regard.

That's another bottom line from this bottom-line government, stripped of the hypo job. What we have, after years of brutal slashes, is a paper increase only; and that is the measure of their concern for our forests.

Mr. Speaker, I would like to talk a little more about that $76.1 million. That is an amount derived entirely....

DEPUTY SPEAKER: Hon. members - if I could have your attention for a minute - it's becoming very difficult for the Speaker to understand and hear in the chamber. Could the private conversations perhaps take place at a later time?

MR. STUPICH: Back to the $76.1 million, Mr. Speaker, to the job-creating programme. The money was supposed to have come from sound business management - an amount derived entirely, perhaps even more than entirely, by selling off assets this government inherited from the previous NDP administration; it involved the sale of ferries in the amount of

$48.4 million and the closing out of certain special funds in the amount of $29.8 million -good sound business administration: sell our ferries, close out special funds. It is, in short, a draw-down, not of previous revenue surpluses, but of one-shot revenues.

By Socred logic, circa 1976, it would be part of a deficit. Had it not been for this one-time realization of assets and special funds totalling $78.2 million, we would have ended that particular year with a deficit of $2 million - a deficit, Mr. Speaker.

Not that I am opposed necessarily to the creation of jobs by selling ferries. If the only way this government can create employment is by selling off ferries, well then, let it be, if it really does create jobs. But let's call it as it is, Mr. Speaker: deficit-financing camouflage.

Interjection.

MR. STUPICH: Yes, how do we define that? In fact, we could almost equate this fancy accounting with the conversion of funds for political purposes. How about that? Conversion of funds for political purposes. I'm surprised the Premier hasn't interrupted this debate to make another announcement of grave importance: that the Minister of Finance has been fired while an investigation is conducted into his conversion of first-class ferries already paid for into a second-class lease deal so the Socred cabinet could cash in the difference for personal propaganda purposes.

Let's take a look, Mr. Speaker, at some of the other propaganda proposals to spend this one-shot revenue surplus. An accelerated industrial development program - $10 million will be used to buy shares in B.C. Development Corporation. As the minister said, this is his third budget. This is the f first move on his part to provide any additional funds for BCDC. Probably it is a measure of the importance of that minister in charge of that corporation and some recognition of the lack of ability of that minister to produce anything by way of economic development. Ten million dollars in three years. If that particular minister's performance over the last two years is any indication, we can look forward to very little in the way of temporary, let alone permanent, employment as a result of this particular $10 million contribution from the sale of ferries.

An accelerated - the emphasis is mine -summer works programme will be provided with $5 million. How that figure pales into insignificance in view of the weight of the problem, Mr. Speaker. In our budget for the year ended March 31,1975, the NDP government

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provided a special provincial employment programme in the amount of $35 million. Not $5 million, $35 million, Mr. Speaker. In the year ended March 31,1976, almost $27 million of this amount was spent. And this government boasts about providing $5 million for what they call an accelerated programme. Precious little relief for the unemployed at that rate, Mr. Speaker.

An accelerated mining programme will receive $5 million. Presumably, Mr. Speaker, this is to reopen some of the mines that have been closed in the two years this government has been in office, or perhaps there will be safeguards to make sure they open new ones. Close down the old ones and open up new ones. Perhaps they will have some rules so that the mining industry will be obliged to dig new holes rather than to open up the old ones. Not much employment there.

The provincial highways programme will receive almost $28 million. Well, Mr. Speaker, by some strange coincidence, if you look at the estimates for highway construction capital, we note a decrease of $23 million. So they're going to increase it $28 million and pull it down $23 million on the other hand. That's great. A net increase of $5 million. Social Credit flimflam.

MR. BARRETT: Used-car-dealer accounting.

MR. STUPICH: After taking into account inflation, Mr. Speaker, this much-praised budget - much praised on that side of the House - promises to do much the same as last year with respect to highway construction.

An accelerated recreational facilities programme will have $5.5 million. Mr. Speaker, by comparison, $14 million was spent on this programme in the year ended March 31,1976; $16 million was spent on that programme in the year ended March 31,1975; and $7 million in the year March 31,1974, the first year of operation - $7 million, then $16, then $14, then a two-year period when nothing happened except that people were invited to submit applications and they've been submitting them regularly. I would suggest by now, Mr. Speaker, that probably this $5 million won't cover even 10 per cent of the applications that are sitting there. That's $5 million for a programme that three years ago was getting $16 million a year.

The rest of the programmes in this list, Mr. Speaker, together don't add up to much more. They will probably be as effective as the amount spent on smile buttons.

We've heard much in this budget about the government's good management of public funds.

Since taking office in 1975, Mr. Speaker, the Social Credit government has increased taxes drastically, as outlined earlier, while at the same time cutting back on services.

I don't know whether many of you have noticed or not, but ferries are not running as often as they used to. Did anyone notice? Food service on them isn't as good as it used to be. Has anyone noticed?

They've cut back on services to senior citizens. Has anyone noticed that the budget for GAIN decreased $27 million this year below last year? Has anyone noticed? Remember GAIN was going to be so much better? There is a $27 million decrease in the GAIN programme provided for in this budget. There is a cutback on services to the handicapped. People living in northern coastal communities have to put up with reduced shipping services. They have cut back on services to the working people of this province by failing to appoint people to the compensation review boards, allowing the backlogs to develop. They have cut services to the working women in this province by cutting back on essential services such as day care.

They have cut back services to farmers in this province. Mr. Speaker, I don't think the farmers are going to be fooled by the amount provided for in the budget with respect to income assurance. They know that it was a five-year programme. They know that it runs until the end of this year, in any case. They know that the dairymen have been pushed out of the programme already. They know that the $37.8 million provided for in the budget will not be spent. They know that the amount provided for last year wasn't spent. It was underspent by some $7 million, and they will know on reading this that this figure, while it may look good in the budget and may be intended to buy votes, certainly is not going to maintain the farm income assurance programme as it was intended to be maintained when it was negotiated by the government, by the B.C. Federation of Agriculture and by the component groups.

There's now a limit on the amount of liability that ICBC will accept on school insurance. We all know that - another cutback in services. We've heard recently the liquor stores won't take back empty beer bottles -another cutback in services. Every day there's another announcement by this government about another service that is going to be cut back or will not be provided. Providing less service, charging more money - doesn't sound like good management to me, Mr. Speaker. Any fool could accomplish that kind of balancing.

[ Page 282 ]

MR. KING: They did!

MR. BARRETT: Then hire an American at $80,000 to cap it off.

Interjection.

MR. STUPICH: Mr. Speaker, the Premier is suggesting that he is a better fool because he's been able to do things that we weren't able to do. I take his word.

Mr. Speaker, what is even more amazing is that they have managed to provide the people of the province with less service by running up $215 million worth of overruns in the past year. I suppose. Mr. Speaker, that you have to be a better fool to do that kind of thing. They found that they could not provide the people of this province with decreased services for the amount of money they originally estimated they would need, so they dipped into the taxpayer's pocket for an additional $215 million.

MR. LAUK: You spill more than we spend!

MR. STUPICH: Mr. Speaker, I hope the people of this province remember, the next time they have to sit in line for two hours waiting for the next ferry, or the next time they find the back porch overflowing with beer bottles, that they have Social Credit good management to thank for these benefits.

While the Social Credit government has been spending more of our money to give us less, they have completely ignored the provincial economy. Unemployment in the province remains at an unacceptably high level. The official unemployment rate is 9.1 per cent as of this morning; some 151,000 people are officially listed as seeking jobs. If we were to include those in despair who have ceased to look, those figures would increase by another 25 per cent or so. Today's unemployment statistics show the continuation of a grim fact. We have climbed onto a much higher plateau of unemployment in B.C. this year. In December, 1975, the last month under NDP administration, the actual unemployment figures for British Columbia were 82,000 jobless, for a 7.5 per cent rate. During the succeeding two years, that has grown to 115,000 without jobs, an average of about 1,300 more people without jobs for every month of Social Credit, up to and including January of this year.

But in that month, Mr. Speaker....

Interjections.

HON. MR. PHILLIPS: Table your source.

DEPUTY SPEAKER: Order, please.

MR. KING: The unemployed are just as unproductive as you people.

MR. STUPICH: In that month the increase in actual unemployment - the Dominion Bureau of Statistics figures - took off onto a new plateau.

Interjection.

MR. STUPICH: It all comes from DBS.

Today's figures show that in March there were 108,000 unemployed British Columbians; that's 2,000 more than there were in March of last year.

In February there were 6,000 more unemployed than a year earlier, and we began in 1978 with 3,000 more unemployed than we had in 1977. In the first quarter of this year jobless figures have aggregated 11,000 more than the comparable period of 1977. That is an average of 3,666 more unemployed for each month this year so far, and we're only three months into the year. So the gap between those who can find work and those who cannot is increasing drastically under Social Credit.

The figures show it. In 1975 there was an unemployment rate of 7.5 per cent; in March '78, it has increased to 9.1 per cent. British Columbia workers at all economic levels will be asking themselves today who is next.

Unemployment and scandalous tax increases that the people of this province have had to bear have had a direct effect on businesses all around the province. Bankruptcies are up 90 per cent in the first eight months of 1977; 408 businesses with a total investment of $124 million collapsed in this period. There are a lot of empty stores and offices in our communities. I have some in my own community, Mr. Speaker, and I'm sure every member of the House can come up with similar examples.

A story from the Nanaimo Daily Free Press, dated March 31,1978: Ron Foulds & Son, a 25-year old business, which in peak times employed about 100, cut staff to a skeleton crew of about eight. Keith Morris and Son Ltd. had employed up to 18, and shut down operations completely in February. They sold equipment valued at more than $200,000 when new. Reg Dorman's Trucking and Fuel and Sinclair Ganderton announced major cutbacks in staff and business operations. Both are well-established local companies. The decision to cut back is costing almost 60 jobs.

I'm sure every member in the House could come up with examples such as these. It's rather ironic, I suppose, but one of these

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firms mentioned - Reg Dormqn's - during the 1975 election campaign took time out from its work and asked its employees to drive their equipment down to Victoria and protest about the lack of government jobs. They took a day of f f rom work to do that, and then went back to work. This firm is now laying off the same people who helped them campaign for the re-election of the Social Credit Party in 1975. It's rather ironic, Mr. Speaker.

The Social Credit government is directly responsible for the difficulties in which these businesses have found themselves. People who are not working have no money to spend on houses, cars, furniture, clothing, eating in restaurants, entertainment. As a result, businesses suffer. People who have paid out more of their monthly pay cheques on increased car insurance, ferry rates, electricity, natural gas, medical care and sales tax have fewer dollars to spend on consumer goods, and again, business suffers.

Mortgage foreclosures were at an all-time high last fiscal year, and are expected to double this year. At the end of this year they were occurring at a rate of 20 per day in Vancouver. Mr. Speaker, it is a litany of failure: failure to understand, failure to care, failure to accept responsibility. It is, of course, also an utter failure to execute campaign promises. There are today unemployed people, desperate small business people, professionals without adequate income, and those who wonder if their job will be the next to disappear, who, in December, 1975, pasted on the bumpers of their autos the slogan: "Get B.C. moving again. Elect the Socreds."

MR. BARRETT: "Work with Bill."

MR. STUPICH: What a bitter memory that must be for them now, Mr. Speaker.

I could spend a lot of time contrasting Socred performance with Socred promises, but, Mr. Speaker, it would be quite irrelevant today. No matter what the promises of December, 1975, events in the last two years, mostly of the government's own making, have overtaken British Columbia. The government must provide leadership to the people of this province, who are struggling with the worst economic circumstances since the Depression of the '30s. How do we measure that leadership? We do not measure the concern, for example, of General Motors for the safety of their automobiles by reading their advertisements. The way we measure their concern is by asking how much money they spend on safety features. In just the same fashion, we do not measure Socred concern for the people of this province by the language of their public relations men. Rather, we measure that concern or leadership by looking at the bottom line.

Mr. Speaker, last year's budget called for expenditures of $3.83 billion. The provincial gross budget increased by 4.3 per cent, a decline from the 1976 increment of 5.1 per cent, but that's another story. What I want to point out is how much this year's budget exceeds last year's cumulative total of $3.83 billion, plus 4.3 per cent growth -discounting, of course, for inflation. It is only that figure which will tell us how much this government cares about the unemployed, the struggling business people, the families that are losing their homes - and one of them was in my office yesterday - and so on.

This government is allocating $100 million less of provincial government money in terms of relative dollars than it did last year. There is a new bottom line in the fiscal debates in this province, Mr. Speaker, given that the measurement for the government's concern is their willingness to provide stimulus to the economy. It is a $100 million deficit in concern, leadership, responsibility and achievement as measured by real dollars instead of the inflated, Madison Avenue-flim-flam this government hides behind.

This government's failure to provide any leadership or direction in the economy is reflected in some of the predictions for 1978. In its March 18th story on Woodward Stores Ltd. the Financial Post noted: "Woodward's strength in Alberta remains the chief attraction for security analysts who are still a little jittery about the vulnerability of British Columbia's economy."

According to the Conference Board in Canada, "Forestry and mining are expected to weaken this year given the outlook for international markets and the probability of decline in the residential construction boom south of the border." We're getting the same forecasts from other publications, Mr. Speaker. The Commercial Letter refers to the dependence upon export markets of Canada in general and B.C. in particular, and the likelihood that those export markets will not be as good insofar as the United States is concerned, which is our main customer, and will not be so good insofar as Japan is concerned as well. These forecasts are coming from all sources and likely - unfortunately - will ring true.

It is ironic that in the same issue of the Financial Post, as I referred to above, there is a story of the British Labour Party's initiative in successfully wooing a $370 million Ford motor plant into Wales. One of the attractive features of that Labour Party's

[ Page 284 ]

offer which made Ford choose Britain instead of six other European countries was British Rail's agreement to lay a track right into the plant. Compare that kind of government initiative, Mr. Speaker, in luring secondary industry to Britain with the situation in British Columbia.

The Social Credit government has halted the Dease Lake extension of the BCR. There is every reason to believe it will abandon the Fort Nelson line as well. So much for government supplying the necessary infrastructure. The silence in this budget on that vital need will echo through the north and echo through the entire B.C. economy in the months to come.

And not to put too fine a point on the British Labour Party's example, the generation of income, Mr. Speaker, should also be noticed. Assuming no other jobs were available and that workers will earn an average of $200 per week, the government will save $25 million a year in welfare payments and gain some $15 million per year in personal taxes plus sales tax from workers' increased spending power, and perhaps $1 million in profit tax from Ford as well - a total gain of up to $50 million a year in taxes to cover the outlay that was necessary in supplying these infrastructure costs and incentive payments in three years or so. Surely, Mr. Speaker, worthwhile.

Once again, compare that to the unemployed workers who resulted from the shutdown of the Railwest plant in Squamish.

MR. BARRETT: No faith in B.C.

MR. STUPICH: The Socreds sat on their hands, allowed railcar contracts to go South or east and eventually closed Railwest.

MR. BARRETT: Where is the confidence, where is the faith? No faith in B.C.

MR. STUPICH: "The government should not be in the marketplace" was their reasoning. Besides, the federal government has to pick up the unemployment insurance tab, not the Socred government.

For the same Neanderthal economic reasons the government is getting out of the construction business. B.C. Building Corporation is a contradiction in terms, as the government no longer believes in construction of buildings or the ownership of them. The B.C. policy is to rent, not to own; to contract out, not to build. Such an abdication of leadership has directly contributed to the 34 per cent currently unemployed in the construction industry in the province of British Columbia.

The forecasts of the Financial Post are not unique. The Bank of Montreal shares the same pessimistic view. Reflecting on the stagnant state of the B.C. economy, Mr. Fred McNeill, chairman of the Bank of Montreal, said: "B.C. cannot look forward to a particularly strong year in 1978. Growth in the gross provincial product would only match last year's gain of just over 4 per cent, " he said. That 4 per cent figure caused much suffering last year, Mr. Speaker.

You will recall that Bill Hamilton of the Employers Council of B.C. accurately predicted the growth figure. The Minister of Finance had predicted a 5 or 6 per cent growth rate. Mr. Hamilton's words of January 25,1977, ring true today:

"Should our performance not match his (Mr. Wolfe's) expectations, the government's revenue picture could be seriously affected. The latest information we have from the federal government, which collects income tax on behalf of the province, is that there will be a $169.8 million shortfall in income tax revenue for the province of British Columbia in the fiscal year just ended. This indicates that real income in B.C. is down from last year as a result of the high number of people out of work in our province."

Mr. Speaker, I said last year at this time that the choice facing this province was between the government assuming a prudent, manageable debt, as do all other governments of the western world, and on the other hand an increasing number of citizens being forced into unmanageable, personal debt.

I have noticed in other contexts - Socred rhetoric notwithstanding - that the province's debt, which we have always had, is increasing; it's almost $1 billion this year. And thereby hangs the tale, Mr. Speaker; for the people of this province pay a price, an immense and outrageous price, for this continuation into the late '70s of funny-money theories. This government attempts to present to the people of British Columbia the face of fiscal, economic orthodoxy. But to the capital markets of the world, to prospective investors, to industries looking for the resources we have to offer, it presents a wholly unorthodox face, a twisted and primitive face that no one can understand. If this budget debate does no more than make a contribution to the understanding of that, it will be of historic value to B.C.

We have a double-A bond rating in B.C. - not a bad rating, but not the best, which is triple-A. Mr. Speaker, I would suggest there

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is a reason for this. The reason that it is not bad is that the province's government has a well-secured and dependable income, based on the stewardship of assets of immense value and on the skills and energy of its people. Just as any private citizen or business in the province would enjoy a good credit rating, so does B.C. Indeed, a private borrower in circumstances parallel to those of B.C.'s would enjoy the highest credit rating.

Suppose that you were a banker, Mr. Speaker, having $100,000 to loan out and that you were approached by two businessmen, each of whom wanted to borrow the entire $100,000. One businessman cells you that he is a conventional, orthodox businessman who has always held a prudent debt, managed it well, recorded it in his business records in the conventional fashion, and that he has such-and-such income and assets, as all businessmen on both sides of this House do. The other businessman tells you, to your satisfaction, that he also has adequate assets and income. But, although he has always had debt, he doesn't like to call it that or to record it in his accounts in the ordinary way. Indeed, he tells you that, in his public statements, his public utterances for the benefit of his customers, he always preaches against borrowing. He goes on to tell you, Mr. Speaker, that he refuses to accept responsibilities which are accepted by all other businessmen. He tells you that, for doctrinaire reasons, he will not accept responsibility for the success of subsidiary operations from which his income derives.

Well, Mr. Speaker, as a banker, you would obviously prefer to deal with the first businessman. If you were to deal at all with the second businessman, you would assign to him a lower rating than that to which his income and assets would otherwise entitle him - in short, Mr. Speaker, a double-A instead of a triple-A rating. The most easily measured cost of this primitive unorthodoxy, this absolute refusal for doctrinaire reasons to do business in an ordinary way, is the increased cost of credit. I will leave it to the minister to calculate the savings to this province that could be secured by a triple-A rating.

There are far greater costs associated with this contorted, primitive, fiscal unorthodoxy; for we deal not only with people on the capital market but with foreign countries and with industrialists. This is a different kind of a cat, as you know, Mr. Speaker. They like to have the Premier make speeches about keeping government expenditures low; but they want the Premier to draw the line at certain critical times and places. For example, I'll not hold my breath waiting for the forest industry to call for increased public expenditures. But neither will I hold my breath waiting for them to refuse government participation in the development of a chip-exporting dock facility, should one be proposed.

The central theme of the budget presented to the House yesterday is the ongoing Socred belief in a phased withdrawal of government participation from the economy of British Columbia, accomplished by restricting growth in government spending to at least one per cent below the growth rate in the provincial economy. At a time of massive unemployment and economic stagnation this government is, in effect, telling the people of the province of British Columbia that it refuses to accept its critical role as far and away the largest employer and economic agent in the provincial economy. Was it W.R. Bennett or R.B. Bennett who wrote yesterday's speech?

Combined assets of all government enterprises - the ones directly under the control of this government - exceed the total assets reported by the 50 largest corporations in B.C., while the gross flow of government enterprises exceeds $7 billion a year. The notion that any institution of that size can disclaim responsibility for general economic circumstances is simply absurd. In times of severe, extreme economic distress, the private sector cannot be looked to as the sole key to economic growth, as the budget suggests on page 9 - a whole section of the budget is devoted to this theme, and the specific reference is on page 9. The muscle, the potential, the capability to provide the impetus for economic growth is associated with governments and with a handful of multinational corporations who, because they have no particular stake in B.C., cannot be expected to bail us out.

Mr. Speaker, this government has led our province into an economic morass. Rather than admit it by retracing its steps, it hopes someone else will find a way out for us. It's begging the private sector to extricate our province from the Socred mess, but the private sector has survival problem of its own and is looking desperately for some stimulating sign of leadership from the government. After all, it's the government which wears the crown. The private sector will follow an intelligent government that shows a will to correct its mistakes in order to get us out of this economic morass, but private companies cannot lead. In times of stress they concentrate on saving themselves, not all of society. That's

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the Crown's special responsibility under our system.

In the Employers' Council of B.C., February, 1978, business trends survey, Bill Hamilton says - and again, Mr. Speaker, this is a document that I'm sure has been available to all members of the House: "However, some hesitancy about the rate of continued growth seems reflected in the fact that investment intentions are more modest than in the last survey for the majority of the firms participating." He goes on to say: "Lack of demand has been the main factor limiting output for the last three surveys. Its impact has been growing. Currently 84 per cent of our respondents regard it as a limiting factor."

Mr. Speaker, this government has the resources at its disposal to attack unemployment, to attack inflation, to create the demand essential for business and to do so without increasing burdens or deficits or taxes.

What's required for business in this province, Mr. Speaker, is not a one-shot, politically inspired fund of $10 million to provide them with a little bit more credit. That amount could be used up in any one of a number of medium-sized communities in the province. What is required is the leadership that will provide employment which will in turn provide a much-increased and maintained level of demand, yet Socred policy refuses to maintain growth in government supported economic activities, let alone provide the necessary leadership for the rest of the economy.

No substantial industry can be attracted to this province without the assurance of public policies designed to stimulate when stimulus is required, to provide fundamental infrastructure on an ongoing basis, and to provide active, intelligent partnership in the development of this province.

In the hope that resident small business will somehow rescue the economy and people of British Columbia from the depression created by Socred taxation policies, this government has proposed several minor tax concessions, while shirking its major responsibility to provide economic leadership to the business community in this province.

In order to maintain an ideological position, this government is asking the people of B.C. to bear the burden of more than 100,000 unemployed, hundreds of failing businesses, increasing numbers of foreclosures on homes, and a grim economic outlook in the years ahead.

This society expects its government, as a minimum, to provide social and public services while holding taxes at a reasonable level over the long run. However, government must also assume and properly, discharge its responsibility to create the infrastructure and economic climate essential to industry, job creation, the succession of business both large and small.

In short, Mr. Speaker, it has to have some plan for the development of British Columbia. By refusing to act in a positive and direct manner in the economy, this government has failed the people of British Columbia, has assured them of a long and bitter period of economic recession.

Industry, Mr. Speaker, expects of government to hold taxes on it to the lowest possible level, but it also expects of government that it will assume and properly discharge its responsibility to create the infrastructure and the economic climate essential to industry, to job creation, to the success of business.

That is the responsibility which is in the first paragraph of page 5 of the throne speech, and various passages of the budget speech, and the bottom line this Social Credit government flatly rejects. That's a policy that business accepts and not just business in British Columbia, but business internationally.

Mr. Speaker, I think I've told you this story before. You will recall when the NDP were in office we were looking forward to the development of a steel mill in this province based on iron ore coming from abroad, on technology coming from abroad and even on investment coming from abroad, a steel mill that would have been the basis of industrial development in the province of British Columbia.

Mr. Speaker, I met one of the principals of the firm that was negotiating with the province of British Columbia. I met him in Japan. He was speaking in Japanese. I needed an interpreter. I asked him why he would want to build his steel mill in the province of British Columbia when the manpower and the technology were in Japan, the business was well developed in Japan, when the iron ore was coming from Brazil, and all we were providing from B.C. was the coal.

He said: "We would prefer to build it in Japan but we're running out of room to build steel mills. We would prefer to build it in Brazil, where the iron ore is, secondly. Thirdly, and last choice, we would go to the province of British Columbia."

But he also said, Mr. Speaker - and lie was speaking in Japanese and it was being translated: "We need the coal and we recognize

[ Page 287 ]

when we're dealing with the government of the province of British Columbia that we're dealing with a government that believes in the value-added factor." The only way they could get that coal was to agree to develop something by way of a steel industry in the province of British Columbia.

MR. BARRETT: What's wrong with that?

MR. STUPICH: I suggested to him, Mr. Speaker, that that government might not always remain in office and, unfortunately, we need the coal. We recognize when we're dealing with the government of the province of British Columbia that we're dealing with a government that believes in the value-added factor. The only way they could get that coal was to agree to ' develop something by way of a steel industry in the province of British Columbia.

I suggested to him, Mr. Speaker, that that government might not always remain in office and, unfortunately, my words were prophetic. His response to that remark was that we have to deal with the situation as it exists today and we know today; we have a government that believes in the development of its own province for its own people. They were prepared to do that. Then the government changed hands, Mr. Speaker, and we sent over to Japan a minister whose only interest was to increase the sale of coal, and he failed even in that regard. No steel mill; no more sale of coal.

Mr. Speaker, in charming public relations advertising language but stripped of the adman's charm, this government means: the unemployed can remain unemployed and grow in number; businesses can continue to fail; needed public services can continue to wither on the vine. We have a fiscal doctrine and we will not abandon it. We have a doctrine to keep and an electoral strategy, not an economic strategy, to maintain. That doctrine and strategy, which, in its simplest form, is the stark proposition that Socreds must rule at any cost to the public of this province, provides that although economic leadership is desperately needed, it shall only be provided if and to the extent that the federal government agrees to carry the can. The Vander Zalm zig-zag federal contribution up $208 million; sales tax down $107.5 million.

The Socred doctrine and strategy, Mr. Speaker, calls for a balanced set of books, however achieved. Not the books of housekeepers or small-business people or of industries, but just provincial government books. Whatever the need for stimulus, however desperate the circumstances of British Columbians, that doctrine will be served.

Mr. Speaker, it is a doctrine which cannot work. This provincial government is the largest single employer in the province and however ruthlessly it slashes essential services, it will remain so. Its assets are literally immense. No matter how recklessly it may dispose of some of them for whatever bargain basement prices, they will remain so.

Mr. Speaker, if you take the assets, as I have done, of all the Crown corporations and agencies as listed in public accounts, the latest one available to us, you will find that the assets directly under the control of this government add up to $12.22 billion - almost $12.25 billion, Mr. Speaker. If you look at the assets of British Columbia's top 50 companies .... MacMillan Bloedel alone, for example, has less than 1.9 per cent of the assets controlled by this government, and that's by far the largest. If you look at the total for the top 50, you find that it adds up to less than the total of the government's assets: $11.7 billion - $0.5 billion less than the assets controlled by this government. In terms of cash flow, the sales for those same top 50 companies is $9.8 billion. The cash flow generated by the government activities was $7.9 billion in the last fiscal period.

Mr. Speaker, we're too big to stand by and watch what happens. Direct government revenue and expenditures of the public accounts only stand at $4 billion per year. The notion that any institution, even approaching that size, can disclaim responsibility for general economic circumstances is simply absurd.

(Mr. Speaker in the chair.]

MR. STUPICH: The notion that any substantial industry can be attracted to this province without being assured of public policies designed to stimulate when stimulus is required, to provide fundamental infrastructure, to be an active, intelligent party to the development of the province, is absurd on the face of it. What would you say, Mr. Speaker, if, as the representative of a major industry, you were urged to invest heavily in a province and at the same time you were told that the government would, for doctrinaire and electoral strategy reasons, refuse to provide the stimulus that only government can provide? Or suppose that you had been considering the possibility of opening up a small business in the province, or just maintaining one, and you hear of the unemployment, you hear of the business failures, the mortgage closures, et cetera,

[ Page 288 ]

and you hear at the same time a provincial government disclaimer of responsibility for assuring the people will be able to buy your merchandise?

Mr. Speaker, we have a dogma and an electoral strategy. That's the answer coming f rom this government: come to see us a month or so before election time and things will be different, but for now we can only examine or consider one set of books at a: time. And if in our lust for the discovery of red ink in accounts, however arbitrarily defined, then however critical that small arbitrarily defined segment might be to however large and complex and critical a black-ink industry, we stomp it out.

Mr. Speaker, these industries and businesses and farm operations know that this government will be providing some stimulus by way of public expenditure sometime just before an election. Whether it is needed or not, the strategy of this government is to spend just before an election.

Mr. Speaker, the theme of the budget handed down yesterday is this government's utter refusal to participate in, much less to lead, the recovery from the economic ills which it to a very large degree created with the massive fiscal shocks of 1976 and 1977, hammer blows which were entirely motivated by partisan, political purposes because the Socreds wanted to kill the OP, not to fight unemployment, not to fight business recessions. The Premier and his millionaire cabinet have said over and over again that killing the NDP is their first priority. It is their only priority, and they are pursuing it no matter how badly the province is hurt or how sick the economy becomes from the fallout of their political hatred.

These ills are not of the private sector's making, and their cure is beyond its scope. There are dozens of ways, Mr. Speaker, that this government could assume its economic responsibility, a responsibility which would be theirs even if they had not so massively contributed to the present difficulties.

In closing, let me suggest just a couple of ways, Mr. Speaker. Instead of concentrating so much of its reforestation efforts on public relations, the government could have proposed for the first time in this province a genuine and massive effort to begin forestry as tree farming. They could have proposed to this House not a $10 million programme but a $100 million programme. Mr. Speaker, an expenditure of that size would bring us only close to Weyerhaeuser's expenditures on reforestation in its privately held lands in the northwest United States, where they spend $14 per acre-year instead of the 13 cents per acre-year spent in British Columbia. Such a programme could provide for expanded seedling nursery capacity, an effective programme of research and development to direct the planting of genetically superior trees of the right species in the right forest lands, and finally, for the planting of trees on the 8.4 million acres of good forest land in this province that has been logged off but not replanted. Such a programme would provide the kind of assistance which business in this province needs: that is, immediate jobs that would provide people with the purchasing power to create the demand that business in this province needs.

That such a programme is a sound business investment that would pay for itself and begin to pay for itself immediately in the form of increased allowable cut is amply illustrated by Weyerhaeuser's willingness to spend even more money on the same kind of forest lands, growing the same species in a similar climate for sale in the same market for the same price. It would be just as sound an investment for the people of British Columbia as it is for Weyerhaeuser, without even considering the incalculable value of the stimulative effect. But it looks as though such a programme will not be innovated until it has to compete for labour, material and capital in an overheated economy.

Second, Mr. Speaker, we note that the allocation for Housing and Municipal Affairs has increased by about $35 million - a substantial increase in percentage terms but one that will afford slim comfort for those who understand the need for rapid transit in this province. Once again, Mr. Speaker, it's a programme that can be prudently financed in a variety of ways, that absolutely has to be undertaken soon, that would provide the genuine and lasting business activity so desperately required.

That there is a pressing need for such programmes there can be no doubt. Ask the unemployed, the failing businessman, the family losing its home. That such programmes are desperately required, quite apart from their general economic effects, there can be no doubt. Ask the logger, the forester, the commuter, the traffic engineer. That these programmes are good, sound business investment there can be no doubt. Ask Weyerhaeuser. That this provincial government has the unique combination of economic capability and responsibility to mount such programmes, there can be no doubt. Ask the voter.

This government has created with its own hands an economic mess unparalleled since the

[ Page 289 ]

1930s. With this budget it merely stands back f rom it to declare that it will take no part in cleaning up the mess because it has an overriding political priority. That's what we have here, Mr. Speaker: take a dollar, give a dime. Mr. Speaker, the opposition will have no difficulty in joining with the people of this province in voting no to this budget.

MR. GIBSON: Mr. Speaker, I would like to start out with a tribute to the remarks of the hon. member for Nanaimo (Mr. Stupich) . I enjoyed and learned from his remarks, as always, and I believe this House is fortunate to have such a competent financial critic in its midst. I had to contrast that with what I saw on the television last night, Mr. Sinclair Stevens, back in Ottawa, who impressed me more as a man who knew nothing about his subject and was sharing his knowledge with the rest of the country. (Laughter.)

AN RON. MEMBER: he was like the Socreds.

MR. GIBSON: Is he? You can agree or you can disagree with the hon. member for Nanaimo, but he is always well informed, well researched and well thought out.

HON. MR. GARDOM: Then what is he doing over there?

MR. LAUK: Because he also has principles, Garde.

MR. SPEAKER: Hon. members, we have recognized the member for North Vancouver-Capilano. I think he has the floor.

MR. GIBSON: Mr. Speaker, I'm calling this the "golden rule" budget. It is based on the old saying that "who has the gold makes the rules." (Laughter.) The Minister of Finance has the gold in 1978.

I don't agree with some of the things he said in his opening remarks. He said: "This budget is possible because of the government's good management of public funds." A lot of the budget I agree with, but there is too much Social Credit horn-blowing here. You can take credit for the economy; I guess that's politics. But, Mr. Speaker, the good Lord put the minerals underground and the trees above the ground. The Americans are buying the lumber at high prices. The Arabs hiked up the value of oil and gas. The Canadian taxpayer increased the federal contribution by $200 million to British Columbia. So let's not give all the credit to the allegedly good management of the economy. I'll have some more to say about that allegedly good management.

Interjections.

MR. GIBSON: I'm going to, Mr. Premier. It is quite a long speech. You have to be balanced.

Mr. Speaker, I gave my general economic development thoughts in the throne speech debate. Today I will pretty well follow the order of the budget speech in making my comments and adding a few ideas as we go along.

First of all, with respect to the introductory section, I agree with the government in its contention that the control and reduction of inflation must remain a paramount concern of this and the other governments of Canada. I also believe that that concern is not mutually exclusive with sound policies for the reduction of unemployment. In fact, in the upside down economic world of today, the classic anti-inflationary tools of high interest rates and high unemployment do not, in fact, cut inflation. They simply add to costs and build in more costs in the economy. There is a definite case for greater economic management and economic guidance by governments in this country.

MR. LAUK: Ah! A social democrat here.

MR. GIBSON: In the same introductory section, I note that the Premier has been having informal meetings with the British Columbia labour and business leaders. I'm glad to hear that. I hope that when the Premier makes his intervention in the budget debate he will elaborate on the ends that he is seeking to achieve and the information that he is receiving.

Interjection.

MR. GIBSON: I am instructed I should ask the Premier if these meetings have been held at Chez Pierre.

The government in the budget debate makes a comment on the exchange rate. I very much agree that that exchange rate windfall that we receive in British Columbia, particularly in our major resource industries, must be put into productivity and into the building of jobs rather than going exclusively to the payment of either higher dividends or higher wages. The only long-range protection for wages in British Columbia is increasing our productivity in those basic industries.

The exchange rate, in my opinion, is now low enough. The labour cost gap between the United

[ Page 290 ]

States and Canada, the United States being our major trading partner....

Interjection.

MR. LAUK: You missed that one.

MR. GIBSON: What was it?

MR. LAUK: He said it was a careful plan -the way they staged the exchange rate.

MR. GIBSON: Oh, I see.

MR. LAUK: It's part of the federal economic plan.

MR. GIBSON: By the governor of the Bank of Canada in his spare time.

The labour cost gap between the United States and Canada, which on an index of 100 in 1971, both countries taken as equal at that time for comparison purposes, by 1976 it seemed Canada had soared over 160 with the United States sitting at something like 135. That gap has now come down to about f five points on that index at this point in time. So we are becoming competitive again and that's because of the decline in our exchange rate. So it has dropped far enough to do that. But if it goes much further, in my opinion, Mr. Speaker, we get into an area where a further decline in the exchange rate will bring unacceptable pressure on our cost of living because of our necessary imports.

I had occasion last year to ask the Minister of Finance what loans, for which he acted as fiscal agent, were denominated in U.S. dollars or other foreign currency. The minister supplied me with the list, which he tabled in the House. The total of that list was very extensive. It was $1.26 billion, most of it issued very recently, in terms of very large British Columbia Hydro issues.

As I make my calculation, Mr. Speaker, due to the decline in the value of the dollar, the Canadian dollars that we will have to expend in paying back those obligations - that the citizens of British Columbia will have to spend somehow in their rate structure in paying back those obligations - have risen by something like $175 million so far because of the declining exchange rate and the additional interest payments that will have to be paid every year. Because the fall in the value of the Canadian dollar - something like $15 million; that's a very rough calculation -shows that while within limits a decline in the value of the Canadian dollar is useful to British Columbia, it can go too far. I think that our government should now be exhorting the national government to take what steps they can to hold the dollar at about the present value.

HON. MR. WOLFE. How would you do that?

MR. LAUK: Peg it at 85 cents for one year.

MR. GIBSON: The Minister of Finance says: "How would you do that?" I don't pretend it's an easy question. It calls for some pretty fundamental restructuring of the economy, in my opinion, but that's rather beyond the scope of this debate.

I want to take some issue with the statement at page 9 of the budget booklet. The Minister of Finance has been talking about what a wonderful job they did in bringing spending under control and says that with the extra f funds thereby saved it can be used this year to fight unemployment. And then he makes this statement: "This would never have been possible had we borrowed to pay our way out of the inherited difficulties of prior years. The funds that will create jobs today are funds that otherwise would have gone to service deadweight debt."

Now that paragraph, of course, is an attempt to justify the savage fiscal measures of 1976, and, in my opinion, it does not. First of all, if one wants to talk about deadweight debt, the debt still exists. If members would care to consult the first table at pages 46 and 47, they will find that at least as of March 31,1977 - and it is still there this year, to my knowledge - there is a deficit repayment debt, so-called, of $261 million, which is still paying interest. In fact, the interest marked in the estimates of the Ministry of Finance to pay for that debt have risen by several million dollars this year.

So the minister is not against deadweight debt, as far as I can see. He would simply like to use that deadweight debt which he's keeping on the books for a tool in the next election. I think all citizens in this province should examine carefully how that debt is used in the next election, because it certainly will be.

Incidentally, members looking at that same table will note a dramatic decline in the value of outstanding cheques as of the year end. I can only assume that perhaps has something to do with the cashing of a $181,000, 000 cheque, if you will recall that one being passed. It was in the float at that time.

MR. LAUK: Evan the paperhanger.

[ Page 291 ]

MR. GIBSON: But the real point on this particular statement of the minister is that that statement of his does not make economic truth. It simply stakes out a political claim. The fact of the matter is, had the minister not raised the sales tax in 1976 that he's reducing in 1978, our economy would have flowed a good deal more smoothly in that year. An additional $200-some million would not have been taken out of the income stream....

MR. LAUK: Three hundred million.

MR. GIBSON: Oh, you're counting ICBC as well?

MR. LAUK: No.

MR. GIBSON: About a $500 million total. I can't agree with a statement like that.

The next portion of the budget refers to private sector action. There are some statements here I want to welcome. The government says: "This government's commitment to spending restraint is not based on any simply perceived notion of the appropriate size of government." That, I think, is something of a backing-off of Social Credit dogma. What the appropriate size of government is depends on the activities that the public wishes the government to engage in. The United States, I think, has an expenditure of its gross national product of something like six or seven percentage points less than Canada. At least four or five of these percentage points would be accounted for if the U.S. public sector looked after the payment of medicare expenses, as they do in Canada. There would be no different economic activity; there would just be a different accounting book.

So really, a lot of this is in the way you do your accounting. I'm glad the government evidenced a willingness to show that kind of flexibility.

The next quote on this page that is very important is this: "We should remind ourselves that in the externally dependent resource-based British Columbia economy, government deficit spending has a more limited impact on increasing domestic production and employment than in a more diversified province producing more products for its own consumption." Translated, what that means is that if you spend an extra dollar in British Columbia, only something like 50 cents - we don't have the exact f figures on this - is going to stay in this province. The other 50 cents are going to go outside this province, whether to Ontario or abroad, to buy various kinds of imports into British Columbia. So direct stimulation through deficit is only about 50 per cent efficient in helping along the British Columbia economy, one of the reasons why direct expenditure programmes are more efficient in the creation of jobs and one of the reasons as well that the reduction in the sales tax will only have about half of the fiscal effect that might appear on the surface in terms of generating economic activity.

Later on at page 11 the government mentions that through its efforts, the ratio of provincial spending to the gross provincial product has been reduced from 7 per cent in 1975-76 to less than 15 per cent in the coming fiscal year.

Again, Mr. Speaker, I would say it's a matter of accounting; and I would caution British Columbians that they have to look at books very carefully. Out of these figures, which started at 17 per cent, have been taken such things as the Insurance Corporation of British Columbia, the British Columbia Ferry Corporation, the activity represented by the Buildings Corporation of British Columbia, and so on. The reduction, therefore, in spending as a proportion of gross provincial product is a good deal less than I per cent. It's by no means something to be overlooked, but again, a good deal less than the government claims.

Continuing, then, in the same section on page 12, the government makes an excellent case with respect to British Columbia's position on the tariff. I have said before in this chamber, Mr. Speaker, that it costs each man, woman and child in British Columbia about $500 per person per year, as a result of the fact that we are subject to the general Canadian tariff. We buy on protected markets; we sell on world markets. British Columbia must obtain better details, to make our case in obtaining gradual reform of this situation which has continued for too long. It's continued for 100 years; it hasn't done Canada any good and it hasn't done us any good.

At the moment we still have a considerable ambiguity over the steel tariff situation. We don't know for sure what's happening after June, when the current federal government agreement runs out; and there are 1,000 jobs in British Columbia that are dependent on that. I understand representations are underway now, again, with Ottawa, and we simply must have a clarification on this.

In terms of the most recent quotas on shoes and textiles - just another recent irritant, really more than an irritant - I've obtained the best figures I can as to the expenditure by British Columbians at the retail level on clothing and shoes; and the rough figures I get are that there is something like $300

[ Page 292 ]

million expended on clothing every year, and something like $40 million expended on footwear. Now these quotas, according to many trade sources, have bumped up prices in these fields in which everybody buys, every consumer in the province buys - food and clothing, basic for children and everyone else - have bumped up prices between 10 and 20 per cent. In other words, that's putting between $35 and $70 million extra tax a year on the British Columbia consumer, right there because of these quotas.

These are the kinds of numbers that I say the Ministry of Finance and the Ministry of Economic Development ought to focus on, ought to determine and develop in sufficiently provable ways to make a strong case in that regard, on British Columbias account, to Ottawa.

Interjection.

MR. GIBSON: Yes, the federal sales tax is added into that, Mr. Member.

Interjection.

MR. GIBSON: Would you give us the numbers, Mr. Minister? Would you give us the number? British Columbians should know the numbers, too.

HON. MR. PHILLIPS: We have.

MR. GIBSON: It's not enough to say: "We have. " It's not enough to sit on your statistics and not make them available to the citizens of this province.

The next Section 1 was really a little puzzled by; its entitled: "Federal budget deficits dampen investor confidence." I thought it was a little ironic that a minister who was benefiting from several hundred million dollars - you're getting $800 million for this budget from Ottawa...

MR. LEA: From deficit financing.

MR. GIBSON: ... from deficit financing should have the gall to talk about deficits. I suppose, Mr. Minister, that Ottawa could get rid of its deficit by getting rid of its contributions to the provinces; and that's the kind of thing you would like to suggest. I would not suggest it. But what I am saying is that it is not responsible for one Minister of Finance to say to another that he should cut his deficit, without being rather specific as to what expenditures should be cut or what taxes should be raised. That is one of the reasons that I support the general thrust of British Columbia, with respect to an input of the British Columbia government into an upper House in the Canadian government, where provinces would take their authority and take their responsibility in questions of this kind, so that one could not simply make flowery statements about it being bad to have deficits, but would have to come up with some answers.

Interjection.

MR. GIBSON: Well, I think it's a pretty flowery statement, Mr. Minister, unless you give some solutions. I say quite simply that a Finance minister has a responsibility when he makes a statement of that kind to give some indicated directions.

The next Section 1s headed: "A favourable outlook for the budget." The government trumpets the increase in oil and natural gas revenue - which is a wonderful thing for all of us - and an increase in the social service tax revenue of $83 million over the year. I would remind the minister of the forecast last year, that he was guessing low, that he'd underestimated his budgetary revenues. I think this is conclusive proof of it because, if there's any one yield that you should be able to tell accurately, it's that social services tax. And he mentions other overages and shortfalls in funds.

lie does not, unfortunately, give us a detailed revenue-surplus forecast for the balance of the year; and I'd like to ask the minister why that is not possible. He gives an expectation of a revenue surplus - those are his words. You see, I'm just looking for these 12-month figures; that's all.

Interjections.

MR. SPEAKER: Order, please. Would the Minister of Finance please come to order?

MR. GIBSON: Mr. Speaker, I'm truly glad to have this opportunity to dialogue with the Minister of Finance across the floor.

MR. SPEAKER: Yes, but it's not permitted in orderly debate, hon. member. I would encourage you to please address the Chair.

MR. GIBSON: Perhaps we could ask leave? I guess we'll have to take this one up in estimates because the Speaker won't let us chat across the floor.

Interjections.

[ Page 293 ]

MR. GIBSON: The next Section 1s basically a forecast of the British Columbia economy. I was glad to see a real growth forecast of 5 per cent. We have done well compared to the rest of Canada this year.

MR. LEA: We're almost as well off as Newfoundland now.

MR. GIBSON: I fear that while our forecast for next year may be quite good, we remain basically an unstable economy in our trading patterns. The lumber pattern is very cyclical. It looks like next Year will be good. The same thing with newsprint. Pulp now is very definitely, in the words of the budget, in a "less fortunate position." It looks like two or three years in that capacity working out. It doesn't mean it's the wrong time to start a pulp mill. The minister is shaking his head there. I hope you are right, Mr. Minister; it may be shorter than that. I hope so. It doesn't mean it isn't the right time to start a pulp mill; it probably is the right time. Looking at it strictly from revenue purposes, the pulp sector is going to be weak for the next year.

I would mention in passing something which the Minister of Forests is no doubt aware of: Canada as a whole spends less on research and development in the pulp and paper industry than Weyerhaeuser spends by itself down in the United States. -That is one of the reasons why our competitive position in this field has been eroding.

The copper markets have been very bad. It looks like they are firming a bit, and the molybdenum is not bad. The coal, in the words of the budget debate, is indeed going to be facing a "challenging year." The forecasts on coal have been far too optimistic. It is one of the reasons that the plans of the Minister of Economic Development (Hon. Mr. Phillips) , the wild plans early announced on the basis of no facts for northeast coal, have fallen awry.

One of the buoyant factors of 1977 that is unlikely to be quite so buoyant in 1978 is the labour situation. But let us hope that it is more or less as good, because I think that a great deal of education has taken place on both the labour and management side in the last three or four years in British Columbia. There have been some rough times, and people learn from rough times.

British Columbia has had, really, some remarkable progress over the years in terms of employment. I'd like to look on the bright side now, which is employment. I'm quite prepared to give credit to the previous government as well as the present government and the government before.

HON. MR. VANDER ZALM: That destroys your credibility.

MR. GIBSON: Credit where it is due, Mr. Minister.

In 1962, out of the total population of British Columbia, 33.19 per cent of British Columbians were employed and were working at jobs. By 1972, this had risen up to 39.11 per cent; and by 1977 it was up to 42.64 per cent. This is a tremendously important trend. What it says is that if we were a family of 100 people, 33 people were working in 1962 to support that family and there are 42.5 working in 1977. Which makes us what? - almost one-third richer in terms of the number of people that are supporting us. That is the fundamental reason in British Columbia, and in Canada, why we have had some of the fastest growing personal income per capita in the world. The ratio of the working people to the total population has been rising steadily over that period.

I might say - and here, Mr. Minister, is why I said I'd give credit to the previous government - in terms of percentage increase in jobs over those years, the two greatest years were 1973, when the percentage increase was 6.19 per cent; and 1974, when it was 5.92 per cent. So these things aren't all bad. But leaving aside who created the jobs - whether it was a government or whether it was the private sector - the fact of the matter is that we are much better off in British Columbia than we were 15 years ago because a much greater percentage of our people are working.

But after running through this review of the economic outlook for British Columbia, I know it is clear to the minister and I think it is clear to all members that we are relying on industries that are basically cyclical and unstable for our basic jobs in this province. We have to live by exports, and more and more we are going to have to be putting technology and brain power into those exports rather than just resources. I would suggest that sector-by-sector industry committees, as I mentioned in the throne speech debate, is the right way to approach that: to identify those individual opportunity areas for British Columbians to get ahead. That applies to import substitution as well as exports, incidentally, in my opinion.

We come to the minister's revenue forecast. First of all, we'll look at his expenditure proposals. The budget is said to be up by 9.8 per cent. The newspapers have all published

[ Page 294 ]

9.8 per cent, so it must be right. But, Mr. Speaker, if you compare apples and apples, this year's budget is up aver last year's budget by 11.7 per cent, not 9.8 per cent. That is a difference; that is a very significant difference. If you compare the budget estimates that we got at this time last year with the budgetary estimates that we're getting this year, when the budget is brought in, it is up 11. 7 per cent. It is not a correct comparison to take a ratio between what is projected for the coming year with what actually happened last year. What actually happens this year will, as usual, be more than is currently projected. So you have to compare either the two actuals or the two projections...

AN HON. MEMBER: There will be an overrun.

MR. GIBSON: ... to make a proper forecast. I say on that basis that the budget of British Columbia is up by 11.7 per cent and not 9.8 per cent.

On the revenue side, the general pattern is a very rosy one for the minister. Using very round numbers, his general taxation revenues went up about $200 million, and that allowed him to cut them by about $200 million and still have more expenditure because he had a couple of windfalls: almost $200 million -very round numbers - in natural resource revenues and a little more than $200 million extra in from the federal government. The result is about a 10 per cent windfall and, Mr. Speaker, this enables you to write a very pleasant budget, which the minister has done.

The next section of the budget relates to small business, and the first announcement of tax changes that the minister made in his talk the other day related to the social services tax - the 7 per cent tax now 5 per cent tax -on new and repair production machinery for small business, which is to be eliminated for one year, and which is to encourage the expansion of plant and equipment in the small business sector. I agree with that; I think it's a first-class move. It's one that I have advocated for some time. The only thing I ask is this: why is it only small business? Because big business creates jobs, too, in British Columbia, and as long as we are trying to get things going like pulp mills and mines and things like that that provide the basis for a lot of economic activity in British Columbia, why should we not extend the advantage of the sales tax exemption for productive plant and equipment to that part of the industrial sector as well?

The $1 million training programme for small business, I think, is an excellent move, and the attempt to ease the reporting requirements - the paper work, the red tape - is one that I welcome, though I will suspend judgment on its efficacy until such time as we get actual reports that certain forms have been eliminated.

With all of this I still believe that we need a small business Act in this province, and I still believe that we need a small business set aside purchasing policy by the government and its emanations in this province which, as the hon. member for Nanaimo (Mr. Stupich) pointed out, constitute . the largest asset base, and I suppose by far the largest single purchasing entity in this province as well.

The next section of the budget is the accelerated job development programme, which is a good thing. It is spoiled a little bit by the way it's introduced. There is $76.1 million to be available for this purpose: "The $76.1 million is the surplus resulting from our government's sound management of the 1976-77 provincial budget." It's just another case, Mr. Speaker, where it would have been much nicer if the government hadn't been quite so anxious to make political points. It would have been a little more accurate, because that $76 million comes from selling B.C. ferries for $48 million and leasing them back, and cancelling about $28 million in special funds.

Interjection.

MR. GIBSON: Well, Mr. Minister, it may have been a whale of a deal, but the fact of the matter is that we're paying interest on that money every year. So we've traded that off and now you're going to spend it. It seems to me that I wouldn't brag about acquiring that capital in that particular way. The money was in the special funds....

HON. MR. WOLFE: You'd ignore that kind of a deal.

MR. GIBSON; No, I didn't say I'd ignore that kind of deal. What I said is you shouldn't suggest that was money that was acquired through sound management. It was acquired by selling off an asset, that's all. So don't brag about the fact. It's not like you found something somewhere; you sold off an asset to get the money.

AN HON. MEMBER: He admits that.

MR. GIBSON: I think he does admit that, Mr. Member. I think he admits it quietly before he

[ Page 295 ]

goes to sleep at night; he just talks into a little corner of his pillow.

In the accelerated programme itself, I have some questions with it, but generally I support it. I would like an assurance from the minister that all of the $10 million which will be put into the B.C. Development Corporation will, in fact, be expended in productive ways during the next fiscal year, or else it shouldn't be counted as part of the programme for the next fiscal year. Only that part that is going to be expended should be counted.

The accelerated reforestation programme is long overdue.

AN HON. MEMBER: It still is.

MR. GIBSON: The expenditures that were budgeted for last year were some $20 million, down from the year before, incidentally. It was $20.8 million last year, down from $22.8

million the year before. As a matter of fact, my information is that the budget will be under spent by over $1 million in this particular fiscal year. So now the minister must assure this House, or the Minister of Forests (Hon. Mr. Waterland) or whoever is in charge of this programme must assure this House, that they are really going to be able to do it, that they really intend to do it, because year after year when it comes to the crunch the programme that gets sliced, among others, is the reforestation programme. I've seen that happen over the last several years in this House, and' it must not happen again this year when it's been made a centrepiece, and rightly so, of the government's job-creation programme. The fact of the matter is that there's not enough in the way of seedlings available for a very rapid expansion of the government's reforestation programme, and this takes a couple of years to bring on stream. You don't plant the seeds, you plant the seedlings after they've been matured somewhat in nurseries. So there's a limit to how fast you can expand this, but there's no limit except for administration and availability of manpower as to how fast you can expand programmes for thinning and spacing. I suggest to the government that they should have no hesitation for undertaking that kind of work to the extent that actual reforestation jobs aren't available. I personally believe that more than $10 million should be made available for this, and any parts of this programme that can't be carried out for one reason or another should be put into this reforestation programme.

The accelerated summer works programme we welcome, and again wish it was more, because this one is particularly targeted to the youth in our economy who have such very high unemployment rates. The accelerated mining development programme.... The Minister of Mines (Hon. Mr. Chabot) is looking like a Cheshire cat, and I hope he will make a good speech on this during the course of this debate.

The provincial highways programme - $27 million extra. I'm glad of that, Mr. Minister of Highways. I want to make a representation as I have made so often. One per cent for bikeways, please. They do that down in Oregon. It has produced wonderful bicycle paths. Our climate is different in British Columbia, I agree with you. Maybe one per cent isn't the right number, but set aside a portion every year for building bike trails in this province. There is a large number of enthusiasts with the fitness concern - I won't say craze; I won't say fad; those aren't the right words - in this country today, so ably set forth by the Minister of Health. Bikeways we should have by all our highways. I thank the minister for making a note of that.

Interjection.

MR. GIBSON: Not every one, Mr. Minister. Some should have two. One per cent, Mr. Minister.

The other programmes - they are all good. The others are lesser in magnitude. I'm concerned at the estimate that this programme will produce or rather will create direct employment for an estimated 10,000 people. What I would like to know from someone during the course of this debate is how many man-years. The $76 million isn't going to create 10,000 man-years of employment when you consider the materials that are required, the housing in remote areas and so on. So is it going to be 5,000 man-years, 7,000 man-years -what will it be? That's the honest and understandable way to state it. It should be stated in man-years rather than in particular number of jobs.

Interjection.

MR. GIBSON: Man-years is what they should be stated in, every single one of them. Person-years.

AN HON. MEMBER: It should be stated in election years.

MR.GIBSON: Mr. Speaker, the department-by-department programme of the

[ Page 296 ]

government I propose largely to deal with during the estimates debate, but there are some highlights that I would like to refer to.

The first is the secretariat on research and development which is being set up in the Ministry of Education. It is only a start, surely, at $87,000; it must expand a good deal. But the fact that it has been established is something that I welcome very much. The target which is set out - if I can f find it here - is to ensure that British Columbia becomes a research centre of Canada. That is a target that the minister concerned has articulated for many years and now has a chance to go after and prove it. I wish him the very best in the world in doing that because we are the natural centre for Canada in that kind of thing. Because we have not had the kind of federal disbursal of research around the country and Canada that they have had down in the United States, we've never achieved the position of California in research that we should have.

The new secretariat must identify the major research programmes in Canada and in the world and see which of them can be cajoled to British Columbia with the explanation of the things we have to offer them. A lot of shoe leather is going to have to be expended in that effort; we're going to have to knock on a lot of doors and say: "Corporation X or world health programme Y, or whatever it is, here's where you should be." I say that the government must pressure the federal government very firmly on this and must insist that a proper disbursal of research funds be given around this country, particularly in British Columbia.

I feel that we must, to a greater degree than we have in the past, fund some of our own research. I, for a number of years, have been suggesting that the provincial government should be directly funding research into ocean engineering. Most of the coal research in Canada is done in Alberta, and yet we have most of the metallurgical coal and a tremendous amount of the thermal coal. As well, I hope that the minister or his secretariat will take up the suggestion in the throne speech debate that a major brain research centre for the world be established here in British Columbia. I know that the minister himself will find it difficult to comment on that because of his profession and his connections in that area. But it is something that I very devoutly believe in.

The next major programme in the department-by-department review I would comment on is the long-term care programme, and only for sufficient time to say that it's a very good thing. I know there are some start-up problems; I've received a number of representations from constituents. But I have every reason so far to believe that they are being coped with as quickly as the staff can, and I wish the minister well in that.

The field of education, unlike that of research, I found very disappointing. We saw an increase which was such that the president of the B.C. School Trustees Association issued a news release today, April 11, because of the fact that the basic mill rate had been raised by two and a half points. Mr. Atkin said that this would increase local property taxes for school purposes by almost 16 per cent.

That is quite a raise, when you consider it comes under the authority of a minister whose programme it has always been and a government whose programme it has been since the last election to remove the school tax from the residential property owner. The information I have is that, of the additional funds going into basic education this year, $63 million extra will come from local government, from local taxpayers, and only $15 million will come from the central authority, the provincial government, thereby pushing even more of the load of basic educational expenditures on the local taxpayer. I think that is a regressive step in this budget.

The Human Resources portfolio is given very little mention in the review of the Minister of Finance, for reasons that I can understand.

HON. MR. VANDER ZALM: He is doing a good job.

MR. GIBSON: No, Mr. Speaker, the reason is not, as the minister suggested, that he's doing a good job. I don't question that the minister is very popular - that was not my point - but there is some unfortunate budgetary fallout here for the handicapped and the pensioners of this province. Even after adjustment of the new budget for the transfer out of many responsibilities formerly under residential care into the long-term care programme, and then after adjusting for what you might call 7 per cent inflation which it has to grow by just to keep up with, this budget in those adjusted terms is $25 million below even last year. Even last year was underspent by $30 million. I say that is not fair to the needy people of this province and I say it's not fair to this Legislative Assembly, which year after year, consistently in that department, is being asked to vote more funds than are actually used and we leave here with the impression that the money has been provided and then it is not used for

[ Page 297 ]

needy people.

I fear we're going to see that again this year, Mr. Speaker. I have a very concrete example. Last month the minister announced that, effective July I of this year, he was going to add $20 to the $265 per month now going to recipients of the handicapped persons income allowance. I understand, incidentally, that 50 per cent of this increase is to be financed by the federal government. I want the minister to know that handicapped British Columbians are taking that as something of an insult and something of a doublecross by their government. It's an insult because in January, 1976, the provincial government froze that pension at a $265 level and since then its purchasing power has dropped by almost 18 per cent. That $20 increase only makes up one-third of that loss in purchasing power. During the '75 election campaign the Social Credit Party promised that if they were elected they would index benefits. In fact, benefits were in practice already being indexed. And then they cut that; they froze it. I don't know if the minister really realizes how much that freezing has done to take away from handicapped people and pensioners in need, had he allowed those benefits to go up as they should with the cost of living. I have made some calculations, which I will give to him.

As a result of no cost-of-living indexing, the total purchasing power of the handicapped benefits from the time this government cane to power until this month is about $5,875, 000 -money that has not gone to handicapped people that should have, to keep them current with the cost of living. I can provide the minister with the figures he will need for each month, to go back that couple of years and live up to that promise. But it's going to cost him some money to do it and he's not going to be able to under spend his budget by quite as much -$5,875, 000 right in that category, of which the federal government would have picked up half.

Now that I have outlined how the minister has treated the handicapped, let me talk about those in the 60- to 64-year-old group on GAIN for seniors. They, too, were promised in the 1975 election that Social Credit would index their pensions. Instead, they got the exact opposite: as of January 1,1976, their benefits were frozen at $265 and it has not increased since then. Those individuals have been done out of cost-of-living benefits of some $5.5 million as of this month.

Now let's talk about the 100,000 individuals in this province aged over 65 who receive old-age security, GIS and, in addition to that, a maximum $38.88 Mincome from the provincial government. They too were promised in 1975 that this provincial supplementation would be increased to keep pace with the rising costs. They were deceived because what they got from this government was the exact opposite. The fact that the Social Credit government c;; to power and failed to live up to that promise for seniors over 65 means that it has now cost them $6,166, 000 in that particular category. In summary, there are about 125,000 handicapped and seniors in this province who have been done out of $17,572, 000 by that minister through failure to index as promised.

I point out again, f first of all, that these funds would have been 50 per cent contributed by the f federal government, so in a sense he's done the province out of half that money too. I would also remind him that in October, 1976, the federal government changed the terms of its cost-sharing arrangements in these areas, which was an unexpected windfall the minister could have applied.

As a result of these changes, the provincial government's revenue is about $10,388, 000 million more than it would have been in respect to these categories of benefit recipient. So he's made $10,388, 000 million. He's failed to pay out $17,572, 000 million as promised in the election campaign, and he calls it a deal. I call it a very bad thing for the people in need in this province. When we see that going on, and the minister at the same time underexpending his estimates by $30 million, I say that that is not the intent of this Legislature, Mr. Speaker, and I say it is not the wish of the people of this province, however popular the minister may think himself.

Mr. Speaker, in terms of Municipal Affairs, I have a couple of bouquets to hand out. I am very happy with the fact that revenue-sharing programme under a formula basis are finally in place for local government. As a matter of fact, I would point out that the increase for this year of $31.60 for each municipal taxpayer is about equal to the total per capita grant at the time I joined this Legislature over four years ago. So I have to say that is real progress, and I'm very glad to say that.

In addition, finally, the provincial government "will begin in 1978 to pay grants to municipalities equivalent to full, general municipal property tax on government buildings." It's been a long time a-coming, but finally we've got it. Now the next thing the government must do is ensure its Crown emanations - and in particular the British

[ Page 298 ]

Columbia Railway which each year is taking $150,000 to $200,000 out of the municipalities in my constituency, and taking it out in the sense of not paying their fair share of taxes - do the same thing.

The next section of the budget relates to government financial control. I'm glad the minister included a section on pensions. I will not speak on it at great length right now, rather waiting until his estimates, but the whole question of pensions in our society is a kind of a f financial timebomb that is there ticking away. The percentage of our people who are getting older is increasing. The retirement age is going down, irrespective of the recent Act of Congress passed in the United States changing it to 70.

The fact of the matter is that people are retiring earlier in North America and in Canada. Many of our pension plans are simply not able to pay the kind of benefits people expect when they retire. It's a very complicated. lengthy topic that, as I say, I'll address during the minister's estimates. But as the minister knows, the major pension plans in this province have unfunded liabilities to the extent of hundreds of millions of dollars.

Under the section relating to the financing of Grown corporations, 1 note that the British Columbia Hydro Corporation is to receive $110 million less this Year in capital. The overall capital requirements go up by about $100 million, but Hydro gets $110 million less.

, The other Crown corporations that are going to get capital are not really of the profit-making variety, as Hydro is. Hydro is carrying for the government, at the present moment, the social cost of running the transit system. The Minister of Finance has found a way of hiding in B.C. Hydro $60 million worth of transit deficit which should be in the estimates of some government department, because it does not have anything to do with the provision of heat, electricity and gas to residences and industry around this province, and it constitutes an unfair tax, an incorrect tax, levied on these people at the instruction of the government through B.C. Hydro in order to finance the transit system. That is not, in my view, an honest way of financing the transit system. It should be done straight ahead, through the government accounts. I know the minister winces because that would , increase his precious figure concerning the percentage of the gross provincial product, but it's part of the true cost of government and it should not be hidden away in B.C. Hydro's books.

British Columbia Railway, I see, is to receive a capital allocation of $70 million. That suggests that the government has made a policy decision to carry on with the upgrading of the Fort Nelson extension. I say to the minister that if that is the policy of the government, it must be very minutely justified. He must be able to prove to this House that it's not just a question of politics, but it's a question of benefit to the province - benefit widely described, as broadly described as he likes, but overall benefit to the province for the expenditure of this fund.

The British Columbia Railway has been a sinkhole for money in recent years. We simply have to be more careful in the future. I am concerned to see this $70 million here, and I'm very, very concerned that it should be properly accounted for.

The major portion of the budget is its revenue measures. The big one, of course, is the sales tax reduction. In discussing the sales tax reduction, let no one in this House forget who put on the sales tax increase in the first place.

Interjections.

MR. GIBSON: Members from the government side are saying: "And why was it done? What are the reasons?" I said it at that time, Mr. Speaker, and I continue to maintain that all the government was doing was transferring to individuals the debt that it otherwise would have had to shoulder. And it would have been more appropriate to take those measures in a more measured way and not to double the ferry rates in one year, because tourists down in California talk about "doubling something".... They could put it up 30 per cent a year for three years and they don't talk about it. That doesn't hurt our tourist industry. It would have been more appropriate not to be quite as fast on ICBC as the minister responsible for ICBC there. Look at the profit that he cranked out by the raising of those rates - well beyond what was necessary. But there was a political pattern in the whole thing. We have been through all this, Mr. Speaker - that's water under the bridge.

For this year I very much welcome the decrease in the sales tax. You can make economic arguments as to whether you are better to cut sales taxes or whether you are better to cut income taxes, but in this case we co-operated with the rest of the country, and we should have done that. That was a bit of a sacrifice for British Columbia because, as I said earlier, the impact of these extra dollars tends to bleed out of British Columbia

[ Page 299 ]

- about 50 per cent goes to the rest of Canada and to imports from elsewhere. Nevertheless, it does help break the inflation psychology which is still in our country. It will be a great help on the cost of living - something like I per cent over a year. There is the very practical fact that the federal government is helping to pay for it. So I understand the minister making that reduction. I wish he had never put the increase on in the first place -I don't think it was necessary - but I'm glad he made it now. It will be of assistance to the needy. So the minister has helped the consumer by returning the consumer to his former sales tax position - $400 million and some later.

Next year, Mr. Speaker, if I may presume to give the minister some advice, I hope he will help the producer by lowering income tax rates. The incentives in this nation still need increasing. As long as we have hard work and production we can spread the wealth around. Without hard work and production there is no wealth to spread around. In my view, the income tax structure, as it presently is, is something that is just a little too heavy, for maximum incentive to the people of this country.

The other revenue measures are largely good. I would like to lobby the minister for one specific addition next year. I know he had had representations on it, and I want to add to them. I would like to see an elimination of the sales tax on solar heating equipment, which would give a very concrete governmental push towards an important conservation measure and a kind of construction technology which is rapidly developing but is still costly enough that it needs a nudge for general acceptance by homeowners.

HON. MR. WOLFE: Would you send us a letter on that from Ottawa?

MR. GIBSON: No. I'll send you a copy of a letter that I got from a constituent a few weeks ago. I thought it was a good idea and I undertook to raise it with you in the debate, Mr. Minister.

In summary, Mr. Speaker, I have to say it's not a bad budget. The minister has been very fortunate in his revenues, but he has done many of the things that I've advocated in previous budget debates. Based on that, I'm going to say something unusual. I don't want it misunderstood, so I'm going to put some caveats on it in advance. I want to make it very clear that this government does not have my general confidence. I do not believe its past actions have earned that. I want to make it clear that this budget is by no means perfect, in my opinion. I think it is as much a result of good luck as good management. That's what I believe. In particular, I give credit for cutting of sales tax that shouldn't have been raised in the first place.

I want to say as well, Mr. Speaker, that I have some differences with the emphasis in the budget. There are, I believe, some omissions. Some things I would have liked to have seen more spent on. Other things I will deal with in the estimates debate. But that said, I have come to the conclusion that it is not a bad budget, and on balance I will support it.

MR. STEPHENS: Mr. Speaker, I'll pick up where the member for North Vancouver-Capilano (Mr. Gibson) left off, and say that I too will support this budget. Now that I've got that out of the way, Mr. Speaker, I can go to work on it. It's certainly mostly good, mostly because at last this government has adopted the strong Conservative policies that we've been advocating for so long.

MR. KING: Who's we?

MR. STEPHENS: The Liberal government is beginning to learn, Mr. Speaker.

One of the things that bothered me, Mr. Speaker, was that, knowing there are good things in this budget, I'm surprised that the official opposition sat on its hands so firmly while the budget speech was being delivered. Surely members of the official opposition must recognize, Mr. Speaker, that some of the things in this budget have actually been advocated by them. It's unfortunately about a year late, but nevertheless it's a step in the right direction and I'm delighted to see some of the changes.

I'd like to talk about a word, Mr. Speaker, that the Premier of this province uses frequently, and used frequently during the last election campaign, and that is the word 'accountability." As I understand accountability, Mr. Speaker, it's an acceptance of a responsibility for failures, and it's been very obvious to me....

What's happened? Is the sun coming up? Have I been here that long?

Interjections.

MR. STEPHENS: Mr. Speaker, I've noticed in the short time that I've been here that hardly a member of the government has spoken, with one exception, without blaming the official opposition, or the former government, of this province for everything that's gone wrong, and

[ Page 300 ]

taking full credit and not giving any credit to the former government for everything that they determine is good. Surely after two and a half years, Mr. Speaker, there must be something that this government is prepared to take responsibility for - some failures and some weaknesses that it should accept responsibility for. This applies to both sides of the House.

I think an example of what I'm talking about, Mr. Speaker, is that the government refuses to accept the responsibility for the weakness of the mining industry in British Columbia. Its excuse for that is that the world markets in British Columbia are weak, and therefore we can't be expected to do anything about that. Now there's no doubt that there's some truth in that. But when the lumber market is strong, when it's strong because of the devaluation of the Canadian dollar, then this government should take that into account and not simply claim, as they have done, that this increasing lumber market is due to good management of this government.

The 2 per cent reduction in sales tax, Mr. Speaker, I applauded when it was announced, but I applauded a little too hard and perhaps a little too soon. At that time I took the hon. Minister of Finance at his word when he said that the 2 per cent reduction was due to the good management over the past two years of this government. The fact of the matter is, it was reduced I per cent because, perhaps, of the good management of this government and I per cent because of the subsidy which was handed to us by Ottawa.

MR. KEMPF: It was raised 2 per cent because of the mismanagement of the last government.

MR. STEPHENS: There we are again. What a line! Don't they ever get tired?

Mr. Speaker, I would like to ask the Minister of Finance whether he does not consider it appropriate that this subsidy that's coming to us from Ottawa, is subsidizing the reduction of the sales tax, should not be passed on to the people of this province. And the best way to pass that on would be, quite frankly, to have reduced the sales tax by another percentage point.

Let's talk about the $76 million that's going to be used to create 10,000 jobs. Mr. Speaker, 1 really would like to know by what formula the minister has been able to calculate this. There seems to be some special formula that's missing here. By this reasoning - and I hope it's right; I hope this $76 million will create 10,000 jobs - it seems to me if we use that formula we can simply multiply that by 10. If this government will spend $760 million we can virtually eliminate unemployment in this province.

MR. KEMPF: Don't count on it.

MR. STEPHENS: It's certainly not a Conservative philosophy, and it surprises me that the minister would pull 10,000 jobs out of a hat to be created by a fixed sum of $76,000. 1 just hope, Mr. Speaker, that this government is as good at creating jobs this year as it was in demolishing them last year.

Let's talk about the $20 million that has been set aside for small business. A paltry sum to begin with, but the question that has to be asked is: why does small business need it in the first place? Why has this government taken money out of the pockets of the small businessman for the last two years and made it so difficult for him to operate and to progress and advance that it now finds it necessary to launder that money through the civil service and, of all things, loan it back to the small businessman with a rate of interest attached to it. I do not think or feel, Mr. Speaker, that this is sound judgment.

I would like to refer to the budget speech where it says: "Our government will attempt to ease the reporting requirements that now irritate many businesses." And I would like to ask the minister just what is meant by the word "attempt"? Surely we can get something more than an attempt. I would like to feel, and I'm sure that the people of this province would like to feel, particularly the small businessman, that the reduction of red tape in this province is going to be something that this government is determined to do, and not simply going to attempt to do. If the government can't do it, I'd like to know who can.

In talking about agriculture - and I'll have much more to say about this during the estimates - I note that there is $35.4 million under the farm income assurance programme, and it's claimed to be the largest appropriation of farm income assistance in any province. Mr. Speaker, the question that needs to be answered is: why is it necessary that more assistance is required for farmers in this province than anywhere else? The answer to the problem is not to continue increasing the financial assistance from government, but to get to the root of the problem. We must make farming more profitable. As I said earlier, we will be talking more about this when we get to the estimates.

Now there is an interesting thing in here

[ Page 301 ]

that's rather enjoyable. It's unfortunate that the member for Comox (Ms. Sanford) is not here. There is a promise in the Highways section of this budget to complete the road from Sayward to Port McNeill. This promise goes back, I think, to somewhere around Dan Campbell's time. The former minister from Comox, I believe, campaigned on this promise back in the early 1960s. It's been a promise that has appeared in almost every election; it's still here, and the road is not yet complete.

There is a mention in the budget of legal aid. This is a subject that is near, but not so dear, to my heart, Mr. Speaker, and something that I'll be spending a considerable amount of time on in the estimates. For the time being let me say that the continually increasing cost of legal aid is really just a glorified form of welfare being paid to some lawyers who require assistance. The legal profession needs to take a brand new look at the legal aid system of this province. It needs to stop demanding more and more money from the government, simply to line their own pockets.

The capital tax reduction is welcomed. I would have asked the minister to have totally exempted all businesses from this tax, and I would remind the minister that the present government, when sitting on this side of the House, voted against that legislation when it was introduced.

[Mr. Rogers in chair.]

MR. STEPHENS: What about the claim of this government that spending is being kept in line? While it's quite true that the amount of spending is being held below the growth rate of the province, as it should be, it's quite apparent that the amount of spending by this government over the past three years has been gigantic. If we compare the present budget with the last budget of the former government, we find that in British Columbia we're now spending almost $1 billion more than we did three years ago. If this is an indication of holding spending in line, my suggestion is that we can do much better.

Let's make some comparisons. Yesterday the Conservative government in the province of Manitoba also handed down a budget. That is a province whose growth rate is comparable to British Columbia's. While we are increasing our spending by 9.8 per cent - which the member for North Vancouver-Capilano (Mr. Gibson) corrected to 11.7 per cent - the province of Manitoba's spending is going up only 3 per cent. That is careful planning in this time of need. You talk about holding spending in line. You are trying - and I compliment you for what you are trying to do -but we can do better.

AN HON. MEMBER: No hospitals. No roads.

MR. STEPHENS: In summary, then, Mr. Speaker, and keeping within my pledge to be brief, I compliment generally the government on this budget; and I shall be supporting it.

MR. BARRETT: Where is the opposition? You are falling apart.

HON. MR. McGEER: Mr. Speaker, I really don't know whether the opposition wishes to have the question called now or not.

Interjections.

HON. MR. McGEER: The first member for Vancouver East (Mr. Macdonald) says that he can't wait to get up on his feet and speak. No doubt he wishes to rush in after the leader of the Liberal party (Mr. Gibson) and the leader of the Conservative party (Mr. Stephens) and support the budget as well. Because, as the leader of the Liberal party and the leader of the Conservative party have pointed out, it is a very supportable budget. And that's nice, because it is such an unusual thing for the opposition to do - to compliment them. It is a traditional thing for the opposition to oppose the budget. We respect and admire the objectivity that they have shown. I might only wish, Mr. Speaker, that we could also have had the support of the opposition parties in those very tough days when measures had to be taken that made this budget possible. It didn't just happen, Mr. Speaker. If you are going to enjoy a dance, somebody has to wax the dance floor. If you are going to enjoy a banquet, somebody has to work in the kitchen and cook the meal. If you are going to have a high harvest, somebody has to go out in the fields and do the work and sow the seeds. That's what this Social Credit government did, and some of the harvest is beginning to come in now. But, as the Premier said, this was the third step. There will be a fourth, and a fifth, and many, many after that. Each step will be larger, more confident, always forward, to a bigger and better future. We won't have to face, as I have said before, the backsliding that was British Columbia's lot during that ill-fated experiment with socialism.

The former Minister of Finance, the member for Nanaimo (Mr. Stupich) , stood up and decried the fact that increased income was

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necessary for the province. Nobody wanted to increase insurance rates, or break an election promise and increase taxes. But these were to meet the bills, not of Social Credit's making, but of the making of the member who stood up here and complained about it. That, Mr. Speaker, is hypocrisy - to leave government with a stack of bills and obligations. For months and months, these things came home to roost. I can tell you that it's not an easy job to be a Minister of Finance, or the head of a Crown corporation that lost amounts of money which were a record in Canadian history.

Interjections.

HON. MR. McGEER: "Oh, come on! " says the second member for Vancouver East (Mr. Barrett) . But these are the facts. You find a corporation anywhere in Canadian history that lost as much as your corporation did in the first two years of its existence.

It wasn't just that, Mr. Speaker. It was inheriting a plan, with one week to make a decision, that would have lost a further $120 million. That's what the government was faced with: a further $120 million, which would have brought the total losses of that corporation, in just three years, to over $300 million.

Interjections.

HON. MR. McGEER: "Ridiculous, " said the second member for Vancouver East. Those were the facts. That's why, Mr. Speaker, all these measures, that the member for Nanaimo complains about now, had to be undertaken. I tell you, if the people of British Columbia ever wanted to blow the bank roll and come home with a stack of bills that high just after an election, they would only have to invite that group back into office again. But the people of British Columbia have cause, and never, never again will that happen.

I want to refer, if I may, Mr. Speaker, particularly to the speech of the member for North Vancouver-Capilano (Mr. Gibson) . You know, I'd like him to stay because he's made two very fine speeches in this House. It's almost a deathbed repentance and we're going to wish him well in his new venture.

AN HON. MEMBER: Is this an announcement? Are you announcing his candidacy?

HON. MR. McGEER: No, I think he should have that privilege later this week, or next week, or whatever it is.

He'll have an opportunity, if he's successful, to go to Ottawa and work for some of the things that he's talked about in these last two speeches. I want him to know that should that happen and he takes that 3,000 mile journey down there, he'll certainly have my support for the things that he talked about.

He said during the throne speech, Mr. Speaker.... I think it is worth repeating because it's a fine quotation. "You should protect people, you should protect employment, but you cannot af ford in the long run to protect individual industries. You've got to protect instead your competitive position in the world." How very true, and that's precisely what the policies of the Social Credit government are intended to do - not to protect individual industries, but to protect our competitive position in the world.

The reason again is an obvious one. All the things that we need and enjoy as consumers, whether it's cars, television sets, many of the goods that are in our homes, what we wear on our backs, the equipment that's in this room - the many, many things that we enjoy as consumers here in British Columbia - somehow we've got to be able to produce to have those things and enjoy them. That's the essence of the situation that we have here in British Columbia, and so how can we do it?

We only have three choices, Mr. Speaker. Firstly, we can produce ever more of our unprocessed resources - ever more, ever more, ever more - so that we try and trade these things for the consumer goods that we enjoy now and wish to enjoy in the future. Now that's an obvious course. We're following it, but it's a difficult one when you try and project a long way into the future.

The second one, Mr. Speaker - and this is one where the member for North Vancouver-Capilano can help us out tremendously here in British Columbia - is to take our resources and process them further, because what we're doing with them now is we're producing to the level of tariff barriers, then we're sending those resources and the jobs they create for others elsewhere. How much more sensible to process the resources close to the source and sell the finished products. This is what British Columbia has been denied for 110 years.

MR. LEA: By what?

HON. MR. McGEER: By the tariff barriers, the national policy laid down by Sir John A. Macdonald, and this is what we have to break in British Columbia. This can only be done by the federal government. They hold the key to this, and this is where the member.... Because

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were these tariff barriers gone, our future in British Columbia would be assured. We would just process our natural resources to the next step and the next step and the next step.

What is economically sound everywhere in the world is to process the resources close to where they are found. The only thing that prevents that is tariff barriers, and they're designed tariff barriers to protect jobs at a cost of efficiency. So other countries would like to have the jobs that go with our resources. They've been getting them for 110 years, and it is time that situation ended. It requires co-operative action, but basically the initiative of the federal government, and that's where the member can help us.

HON. MR. BENNETT: We'll give him our position papers to take down with him.

HON. MR. McGEER: Well, the third area that we can pursue.... Me member spoke of this. We are taking some initiatives, but they're small initiatives and it's going to be 10 or 20 years before we'll begin to see the results of this.

The third is for us to move into a realm where tariff barriers become such a small consideration compared to the total value of what you produce that they disappear in their significance. This is to go for science and technology, where brains are what count in the quality of the goods, where you can sell them anywhere in the world at the prices of your choosing.

Years ago - and I have spoken about this in the House before, Mr. Speaker - the company that I worked for, a high technology company, believed that none of their products should be sold for less than a 25 per cent net return on their investment, something Which is unheard of in the resource field, and always will be unheard of. So if you're interested in getting a large flow of capital that will allow for growth and expansion and jobs and high wages and everything else, you need to have that tremendous margin of profit in the item that you sell.

That doesn't come with unprocessed resources and it seldom comes with even processed ones when they are doing simple things that any nation or any group of workers can perform. You have to break into something entirely new before you can enjoy the sorts of fruits that now accrue to a selected few corporations, most of them located in the United States, a few in Western Europe and a few in Japan.

So we are hoping, Mr. Speaker, to have a share of those fruits. That is why the government has taken a few steps, one of them mentioned by the member in this budget - the formation of a research secretariat and the founding in the past year of Discovery Park. We hope within a few weeks to be able to announce the first tenants, in two separate locations for Discovery Park, which will be the first practical step forward in bringing us into the high technology area.

We have announced, Mr. Speaker. two further programmes that are designed to co-ordinate with this and provide an impetus to these high technology industries. The first of these is our programme of industrial post-doctoral fellowships, a concept which has been pioneered by our federal government and nations other than Canada, whereby people who are first leaving the high technology nests of our universities and would normally leave British Columbia, as they have done all throughout history, will now be given an opportunity through funding by the provincial government to take their first job in industry here in British Columbia.

Most areas of the world that use high technology people find that they must be within 500 miles of the centre which graduates them, because that is where these industries cluster. They do so because the people who have the high technology skills go out and work in that area. Now by providing these industrial post-doctoral fellowships it is our hope that those people who have always left British Columbia in the past will remain here, that the industries having a first year of utilization of these people will then begin to reform their own technology and start to build into this area.

The second program that we have announced - the graduate research engineering and technology awards - are at the pre-doctoral technology level. Here we are trying to encourage co-operation between university departments and industries so that thesis work of the students will only be undertaken with the government paying for the graduate student If industry approves the particular project. It is our hope, therefore, that industries in British Columbia will begin to see the advantage of graduate work being done within departments like physics, chemistry, engineering and so on, where the projects that are worked on for graduate degrees will be ones that have practical value to industries of British Columbia.

Those two programmes are underway and they cover post-graduate and graduate work. Then at the undergraduate level we are encouraging co-operative programme between industry and universities. There is a possibility that BGIT will be moving into this soon in the near

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f future as well. The idea is that people who are undergraduate students get credit towards their BA or BSC, whatever it might be, by spending as much as half of their time working in industry. So a person who is taking a chemistry degree will get credit towards his chemistry degree by spending half the time working in industry. What is discovered as a result of this, Mr. Speaker, is that first of all....

Interjections.

HON. MR. MCGEER: Mr. Speaker, I have this terrible trouble in this House with these unruly constituents from the riding of Point Grey. (Laughter.)

HON. MR. GARDOM: Order!

DEPUTY SPEAKER: Hon. member, perhaps you could make arrangements to see them in your constituency office. (Laughter.)

HON. MR. MCGEER: I wish I could. But 1 could tell you two things, Mr. Speaker: first of all, they would never run where they lived or live where they run. (Laughter.)

Well, before I was interrupted, Mr. Speaker, I was just describing the co-operative programme that is going on in some of our universities, which I hope will be expanded, bringing the relationship ever closer between the high technology that we do have in our institutions in this province which are generously funded by the public's money, and industry, which so far has failed to take advantage of the opportunities that that high technology provides. By bringing them closer together, we may succeed in achieving this objective of having Vancouver the research capital of Canada.

[Mr. Speaker in the chair.]

There are, as the member for North Vancouver-Capilano (Mr. Gibson) pointed out, some natural advantages that we have in this province in that regard; and he enumerated one, which is the prospect for high-technology underwater development, because this inside passage is the largest area of deep, protected water on the North American continent. If we're to exploit minerals on the sea bed, if we're to learn how to win the riches of the Arctic Ocean, if we're to begin to understand the prospects for harvesting food and other riches from the sea then, of course, we've got to develop underwater technology to a far higher plane than exists now; and surely British Columbia is the place for that to take place.

We have - and I think many members are aware of this - one of three meson facilities in the world, three meson factories. And amongst other things there's the prospect that this will turn out to be a new and superior method for treating many forms of cancer. The applications go far beyond that. A whole unique stable of radio-isotopes is made from a facility of this kind; and that will, we hope, soon be in commercial production. But other places that don't have these kinds of facilities can't, of course, can't get into the game; and so we've got that natural advantage here in this province.

I don't want to take a lot of time up in the budget to go into science, because I know that some of the members are terribly keen to hear about developments in the Ministry of Education. After all, with this stunning budget that the Minister of Finance has been able to produce for the people, it's going to be a good year in the field of education. The universities received, with one exception, the largest percentage increase for higher education of any province in Canada this year. The universities have done well; and the colleges, I Mr. Speaker, have done extraordinarily well.

The large increase that's gone to the colleges this year reflects the government's interest in diversifying opportunities for post-secondary education in British Columbia. Much of the new money that's available will go to the emerging colleges in the rural parts of British Columbia. It also reflects the priority the government is placing on offering programmes that will produce marketable skills for the youngsters of our province.

The need to expand post-secondary educational and training opportunities to all our citizens has long been recognized by the government; and it was in response to this need that the community college programme was started some 12 years ago. Now we have 14 colleges located throughout the province.

Now this past year the government has moved to create a series of provincial institutes. These institutes will take a specialty area and have the whole province as their mandate. That's why we created a marine training institute; it will cover that field for the whole province.

The Emily Carr College of Art, BCIT, the Pacific Vocational Institute, and soon to come, a Justice Institute - we have two sets, then, of institutions working. One set will have the whole province as its mandate in a particular field. The other, will cover regions

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of the province and offer a variety of programmes in the academic and technical fields.

I want to take an opportunity to commend the colleges and the institutes for the job that they have done and are doing.

MR. COCKE: They won't reciprocate.

HON. MR. MeGEER: 1 think that the colleges and institutes will have good reason to reciprocate to the Minister of Finance after the budget that he just brought down.

But these colleges and institutes, Mr. Speaker, cannot meet all of the needs which still exist, because first of all, they don't extend into the upper academic reaches - that is, the third- and fourth-year academic programmes. Apart from a small amount now being done on a regional basis by some of our universities, this remains a crying need that has to be fulfilled on a cost-effective basis for the province. It doesn't look after the needs of individuals who, for one reason or another, are geographically, financially or psychologically prevented from attending one of our coastal universities.

The needs of these people, Mr. Speaker, can only be met on a co-ordinated province-wide basis. We need to find a way to mobilize our educational resources, to tap those of other lands so that we can bring to all of our students and all of our citizens the educational and training opportunities that are now available in our larger centres.

So, Mr. Speaker, the Speech from the Throne announced that there would be an Open Learning Institute created to fulfill this objective. That Open Learning Institute will offer a complete range of post-secondary programmes from basic vocational to upgrading, to career and academic, right up to the university degree level. This institute, Mr. Speaker, will be established under the Colleges and Provincial Institutes Act, just as the Marine Training Institute, Pacific Vocational Institute and so on. It will be governed by a board, as the others are governed. The board will be chosen after consultation with our colleges and universities and institutes. There will be a principal, just like we have with our other colleges and institutes, who will be the chief executive officer.

The mission of this Open Learning Institute will be to develop, distribute and provide courses and programmes of study in these areas.

1. Academic transfer courses for first and second year;
2. Academic courses for third and fourth year;
3. Career and vocational programmes leading to appropriate certificates and qualifications;
4. Career and vocational upgrading courses and programmes.
5. Adult basic education leading to or related to appropriate certificates or qualifications.
6. Community education courses and programmes related to local and provincial interests and needs.

That's a broad mandate.

In all of these, the task will be to co-operate and to collaborate with existing agencies and institutions to the end that wasteful duplication may be avoided. A major purpose of the institute, in addition to offering the degrees and certificates that we talked about, will be to give a full range of credentials to those adult citizens for whom geographic and social distance have been factors in limiting or denying them the opportunities. I want to make this very clear: the Open Learning Institute will give that opportunity to every single citizen of the province. Wherever they may live, whatever their geographical circumstances, whatever their age, whatever their background, the Open Learning Institute is available to them without prejudice or handicap. We're here to serve the needs of the citizens of British Columbia; we're here to provide the maximum services that we can provide in the most cost-effective fashion; that's what the Open Learning Institute is intended to do. In other words, it'll be concerned with virtually all the learning interests of adult citizens; it will enter into relationships with organizations and agencies in British Columbia and elsewhere for the production, purchase and distribution of teaching and learning materials.

The press has given undue emphasis to one of these matters, the university degree completion programmes. But this is only one of an array of learning needs our citizens have which will be supplied by this institute. Mr. Speaker, the Open Learning Institute is not being brought into being to compete with existing institutions or colleges or universities. We cannot afford and we will not tolerate wasteful duplication of effort. The Open Learning Institute will collaborate and co-operate with existing programmes. It will encourage new developments and delivery systems and it will itself meet unmet needs.

Mr. Speaker, no one will deny the usefulness and effectiveness of face-to-face instruction. But this requires having a sufficient number

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of people grouped together who live in geographic proximity, have this common interest in a course and therefore can enrol in it together. We have to f find new methods, obviously, of bridging this gap where this cannot be achieved. That's what the Open Learning Institute is all about.

The British Open University has already demonstrated that face-to-face instruction is not a necessity. That's the important point, because you can have delivery of quality education without that traditional element. This is what we want to make use of in British Columbia.

Our announcement with the British Open University was merely to let people know that we were going to make available to the citizens of our province an array of superb courses and materials developed by that institution. It's not foisting a foreign educational system on British Columbia. What we are doing is entering as partners into a world-wide enterprise of preparing these open-learning materials. You cannot use traditional textbooks; you cannot use any of the traditional methods and succeed. The cost of putting together a quality course whether it's at the university or at a vocational level, may run into the millions - $2 million or more for a single course. It's quite beyond the capability of a province like British Columbia to provide the full array of materials that our citizens will require. Therefore we must enter into partnership with others. It' s not just the British Open University; it's world-wide.

This very week my deputy is in Britain as the keynote speaker to an international congress of open-university systems which is being held in the United Kingdom. They think that highly of the work that he has done and what our ministry has done.

I just would like in closing to alert the members to some of the difficulties and the problems that we face in getting this great project underway.

First of all, if it is to be a success, the quality of the programmes that are offered must be without question. This, Mr. Speaker, is the most difficult part. I have explained, the cost of doing it well is very, very high. We cannot hope from within British Columbia to prepare the full range of programmes. What we can do is to prepare some, use them for ourselves and offer them to the world.

Secondly, if this programme is to be a success, then the students must have transferability of the credit between this and the other institutions, and that transferability must be simple and readily available. We have to have a system of quality control to see not only that the programmes are outstanding but the method of delivery is succeeding as well. That in itself is not an easy thing to achieve.

Finally, the institute must not engage in competition with existing institutions. It must be venturesome in meeting unmet needs, but we cannot afford in British Columbia for our institutions to be duplicating each other, working at cross purposes with each other and spending the taxpayers' dollars more than once to do the same job.

Well, it should be obvious, Mr. Speaker, that we are committed to the open-learning institute, and the concept that goes with it. The institute must be a device for encouraging excellence in learning and, through that, for improving the quality of life of our citizens.

I want to thank my colleagues in government, and the Minister of Finance, for providing the means this year of giving to the field of education the first $1 billion budget. I sat in this House, not many years ago, when, as a member of the opposition, like others, I gasped because the province of British Columbia was able to afford, in total, it's first $1 billion budget. Now, just a few years later, Mr. Speaker, $1 billion for education alone.

It is through education that the citizens of our province will have the greatest opportunity to improve the quality of their lives. This is what the mandate of educators must be. They are succeeding in British Columbia. But with this tremendous boost in resources which has been made available due to the fantastic budget of my colleague, the Minister of Finance, the quality of education will improve, the quality of life in British Columbia will improve. The public in their wisdom will recognize that; and they will elect, and re-elect, and re-elect and re-elect this government. And we will have $2 billion budgets, $4 billion budgets, $6 billion budgets and $8 billion budgets for education alone - and they will still be balanced budgets. That's the quality of life that will come to British Columbia, if the public retains its confidence, as it justly should, in this great government.

Mr. Lockstead moves adjournment of the debate.

Motion approved.

Presenting reports.

Hon. Mr. Gardom presents the report of the

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Law Reform Commission of British Columbia on the Absconding Debtors Act and Bail Act.

Hon. Mr. Gardom presents the Legal Services Commission Annual Report 1976-77.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 5:50 p.m.