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CONTENTS

Routine proceedings

Smoke Alarm Installation Act (Bill M 202) Mr. Rogers.

Introduction and first reading –– 657

Budget debate

Hon. Mr. Bawlf –– 658

Mr. Levi –– 662

Mr. Davis –– 669

Mr. Macdonald –– 672

Hon. Mr. Wolfe–– 679

Division –– 681

Committee of Supply: Ministry of Finance estimates.

On vote 92 –– 682

Presenting reports

Select Standing Committee on Standing Orders and Private Bills, first report.

Mr. Mussallem –– 682

The House met at 10 a.m.

Prayers.

MR. KEMPF: In the gallery with us this morning are two couples from the constituency of Omineca, and from my home town of Houston: Mr. and Mrs. Frank Rippel and their daughter and son-in-law, Mr. and Mrs. Gary Woodbeck. Mr. and Mrs. Rippel are among the group of people who are the entrepreneurs of this province; Mr. Rippel is a logger and his wife operates a small flower and gift shop in Houston. I would like the House to make them welcome.

MR. STRONGMAN: I have two friends seated in the gallery today from Toronto, Mr. Ben Mattiuzzo and Miss Leslie MacIver. Both Miss MacIver and Mr. Mattiuzzo are with Air Canada. I would like the House to make them welcome.

HON. MR. McGEER: Mr. Speaker, I wouldn't have tried to rise a third time this morning if it weren't that we had some very distinguished guests in our Legislature, Dr. and Mrs. Frank Brouellet. Dr. Brouellet is the state superintendent for public instruction in the state of Washington. I would ask the members to make our guests welcome.

MR. SMITH: I would like to draw to the attention of the me ers of the assembly this morning the presence in the gallery of an old friend and his wife - friends of mine from Fort St. John - Mr. and Mrs. Dudley Wagner. Mr. Wagner is associated with the petroleum business, in that he has been working with companies associated with exploration, drilling and testing in the Fort St. John area since the oil patch first became known in northeastern British Columbia.

HON. MR. BAWLF: The member for Esquimalt (Mr. Kahl) has asked me to draw to the attention of the House that this morning in the galleries we have Mr. Mel Tucker, with 16 people from the Church of the Nazarene on Craigflower Road in his constituency. Also here this morning is Mr. Brown from Belmont Secondary School with his class of grade 9 students. I would like you to make them welcome.

HON. MR. MAIR: Mr. Speaker, I would like to draw to the House's attention that a constituent and friend of mine is in the gallery today, Mr. Glen Henderson. I'd ask the House to make him welcome. May I also, while 1 have the floor - this being a great time for real estate people in the history of British Columbia - bring to the attention of the House that Mr. Henry Block is either in the gallery or is about to be in the gallery. I would ask the House to make him very welcome.

HON. MRS. McCARTHY: Mr. Speaker, on the desks this morning are some objects which were, I think, known in the olden days as eyeglasses, and were used by the sailors of olden times. I would like to tell the members that within that packaging is a poster and an invitation to our Captain Cook Bicentennial. This poster will be, and is being, distributed at the present time on our west coast to the different marinas, boating associations, yacht clubs. et cetera.

It contains the invitation to visit with the tall ships which will be in the harbours of Victoria and Vancouver early this year; the two Japanese tall ships, the Kaiwa Maru and Nippon Maru; and then later, at the end of July, the tall ships' race, which will culminate in an assembly of tall ships in a naval review in July in both Vancouver and Victoria. It will tell the very many people in boating associations on our west coast of our very warm and friendly invitation to visit British Columbia.

1 would just like to share these with the House and to ask them if they will - and particularly the member for New Westminster (Mr. Cocke) - take them into their own constituencies and make sure that the message is given to all of those within their constituencies that we welcome people to our shores this year in the Captain Cook Bicentennial.

MR. COCKE: Mr. Speaker, through you to the Minister of Travel Industry: that member for New Westminster will certainly do her bidding.

Introduction of bills.

SMOKE ALARM INSTALLATION ACT

On a motion by Mr. Rogers, Bill M 202, Smoke Alarm Installation Act, introduced, read a first time and ordered to be placed an orders of the day for second reading at the next sitting of the House after today.

Orders of the day.

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ON THE BUDGET

(continued debate)

HON. MR. BAWLF: At adjournment at the last sitting, Mr. Speaker, I was outlining a number of reasons that this will be perhaps the most outstanding year, certainly a highly significant year, in the history of the conservation side of this ministry. More about that a little later, but first, since we've just had some comments in connection with the Cook Bicentennial year, I'd like to say that I'm delighted to hear that the member for New Westminster (Mr. Cooke) has finally got on side with this effort, not only to recognize a great historical event and personage but also to bolster our tourist economy in this province, Mr. Speaker.

I'd just like to give you an idea of what the results of that effort are showing to date. We have had in the first quarter of this year, Mr. Speaker, traveling on our B.C. ferries in numbers of people and vehicles, a 20 per cent increase over a similar period for last year, which represents the second successive year of major increases in traffic on the B.C. ferries. And, Mr. Speaker, we had the pleasure of celebrating those ferries carrying their 100-millionth passenger this past month. The ferries carried their 100-millionth passenger and that's after a start, Mr. Speaker, of only 16 years ago. It was only 15 years ago, roughly, that those ferries carried their first one-millionth passenger. It's a tremendous milestone, I think - a credit to the people who work in that service, the excellent effort of all concerned over the years in delivering that service.

But, Mr. Speaker, I'd also like to say that this summer will be, without question, the all-time record of traffic carried on the B.C. ferries, surpassing any previous year by a very considerable margin. 1 think that those results are directly due, and the credit is directly due, to the outstanding efforts of the hon. Minister of Travel Industry (Hon. Mrs. McCarthy) and her promotion of this province far and wide.

Mr. Speaker, I'm disappointed that the second member for Victoria (Mr. Barber) isn't here today because...

AN RON. MEMBER: He's out leading a children's parade.

HON. MR. BAWLF: ... I would just like to say, Mr. Speaker, hat he has indulged in some very misleading statements in this House in recent weeks in connection with the allegation that there has been a reduction of employment by the provincial government and its Crown corporations in this city of the order of some 900 jobs. The preposterous figure that he attaches to that is some $90 million in economic benefits for this area. Mr. Speaker, that is absolutely untrue and I would challenge him - I have challenged him - to prove it. He doesn't have any real, factual basis for those statements, and I must say that this is undermining a tremendous effort that is being made by all concerned in this community to reinforce and expand the economy of this area.

Mr. Speaker, in the circumstances and recalling that that was the member who stood up here in his maiden speech in this House and lectured members on all sides about the performance and deportment of an MLA, who then subsequently led the campaign across this province and beyond to tell people it was too expensive to come to Vancouver Island, and then have the audacity to come in here, into this House, and complain that people didn't come in sufficient numbers, but then furthermore, with no factual basis, totally exaggerated the problem of tourism in that particular year - in fact, grossly overestimated the problem - now he comes and criticizes the hon. Minister of Travel Industry (Hon. Mrs. McCarthy) for expending moneys to promote tourism in this province, the results of which I've just recited. Now we have a $240 million travel industry on this island, Mr. Speaker, and if we've got a 20 per cent increase in travel to this island on the ferries, I don't need to tell you that's a $50 million benefit to this island.

MR. STUPICH: Slowly recovering.

HON. MR. BAWLF: Slowly recovering, my eye! Mr. Speaker, I would suggest the member for Nanaimo (Mr. Stupich) consult his colleague, the member for Comox (Ms. Sanford) , about the incredible impact that the B.C. Ferries new off-season package tours are having on her constituency. They have booked their hotels solid.

Those people had three years to do something about that, Mr. Speaker, and they didn't do anything about it. All we had on B.C. Ferries were shutdowns, delays, long lineups, inefficiency.

Interjections.

MR. SPEAKER: Order, please, hon. members. Every member has the opportunity during a budget debate to stand up and make his speech,

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and every member has the right to make that speech uninterrupted. Please proceed.

HON. MR. BAWLF: Mr. Speaker, that second member for Victoria (Mr. Barber) is not contributing , in a positive way to this community when he creates hysteria, and when he stands in this House and relates misinformation which will mislead people of this community. But it's consistent with the performance of that group over there throughout this entire debate on this budget and their frivolous amendments on it.

MR. LAUK: Are you afraid of the second member for Victoria? What are you afraid of?

HON. MR. BAWLF: The member opposite mentions fear. What are you afraid of, Mr. Member?

MR. LAUK: What are you afraid of?

HON. MR. BAWLF: You're afraid to debate this budget. You've run from one amendment to another, and every one of them has collapsed.

Now we hear at last from the member for Nelson-Creston (Mr. Nicolson) who has been complaining that there isn't adequate funding for the conservation side of my ministry. So here is a budget in which the Minister of Finance (Hon. Mr. Wolfe) has increased funding for the conservation department 50 per cent. A $6 million increase in funds at the administrative disposal of that department, and that member over there has not stood up, nor has any member on that side of the House, and said one word about conservation, not one word about the tremendous boost that this is for conservation in this department. They don't care about the resources, they don't care about the fish and wildlife of this province. All they want to do is run, run, run from this budget.

Mr. Speaker, in the absence of any positive ideas from that side of the House, I just want to take a minute to outline - and I'm sure that the members opposite will be thoroughly bored with anything so mundane as this - the programmes which this tremendous increase in budget will enable in this department. I've said that it will be an outstanding year for conservation. It can't all be measured in terms of money, but this budget is just an indication of where we're going with this department.

I've outlined the reorganization of the department this year, which will see for the first time the establishment of a new fisheries branch, bringing together all of the elements of the provincial government which are concerned with our fisheries - salt water, fresh water, sportsmen, commercial fishermen and processors. This is an industry which is of vital importance to this province, in both its commercial and sport aspects, and it's one which has long been overdue for this approach. The jurisdiction is federal, and it's all the more reason we must have a comprehensive approach at the provincial level to ensure that our provincial interests are well represented.

I outlined the fact that we would have a separate wildlife branch, which would be working this year to produce for the first time in the province a series of individual species management plans, so that the public of this province will have access to a stated set of goals and objectives and management principles for the management of each and every species which make up our wildlife resource.

I mentioned that we will be establishing the position of a chief conservation officer, which position will enable us for the first time to adequately co-ordinate and direct the methods and procedures of enforcement to protect our fish and wildlife resources, which will enable us to institute proper training programmes and carry out much-needed liaison with other enforcement agencies and with the Ministry of the Attorney-General.

I mentioned that this year the province and the federal government jointly will be spending more than $20 million in the rehabilitation of the fisheries in this province through the salmonoid enhancement programme. The province's part in that will include management of some 22 projects which will reach throughout Vancouver Island; the north coast, which will go through the interior up the Thompson River; the upper Fraser River; the Skeena. These projects are just the first step in what will be a $150 million expenditure over the next, five years aimed at doubling our fisheries resource in this province, and many more millions of dollars thereafter. This year, with the assistance and direction of our new fisheries branch, we will be executing an agreement with the government of Canada to carry out those projects for the years to come. It will be a very, very important agreement, and it's a very important initiative in the economy of this province to reinforce and enhance this vital part of our employment opportunities.

Mr. Speaker, the Minister of Finance, in his budget address, has touched on an accelerated fisheries programme, and there are so many things involved in these various initiatives that I could not possibly take the time of the

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House to relate.

Let me give you just an idea of what this represents. Looking beyond our salmon and related species, which I have just touched upon in the salmonoid enhancement programme, this province recognizes that there are many, many other areas which can be enhanced in both commercial and sport fishing - for example, the development of the marine plant industry. This is an infant industry which is largely dependent at present on an ability to direct the private sector into sustainable quantities of the resource. The industry worldwide is becoming more dependent upon cultured or famed products for more reliable sources and particularly for quality control of the extracts which they take from them. This industry's world production has more than doubled in recent years, but the demand far outstrips that. Market demands for one derivative, algin, continue to grow at 6 to 8 per cent per year. This market alone is worth $91 million in the United States.

The kelp stock of the northeast Pacific represents the world's largest unexploited marine resource. A new algin extraction plant would require an annual harvest of about 25,000 to 50,000 tons per year, and several areas on the B.C. coast would probably sustain such a harvest. But more reliable information has been needed for definite harvest strategies to be prescribed. So this year a new fisheries branch will be working to prove up an existing culture system particularly suited to the coast of B.C., to complete our estimate of resource yield, to conduct a pilot commercial harvest and to determine the effects, if any, of that harvest on commercial fish species.

The second area is shellfish management and development. The market demand for B.C. shellfish remains exceptionally strong and we foresee a continuation of this demand. There is one retail food chain in the state of California which alone has a standing order for every oyster that we could produce out of this province at the present time. The private sector is responding to this opportunity, and we have had a tremendous surge of bona fide applications for oyster leases. They've tripled in the last year.

Our current objectives are aimed at doubling oyster production over the next five years and developing under-utilized clam resources. In 1975, the geoduck clam fishery did not exist, Mr. Speaker - the name, of course, perhaps inspires some mirth. In 1977, the geoduck clam fishery produced a $500,000 value to the B.C. economy. We've discovered that this resource exists in deeper waters and in greater quantities in areas where it was hitherto not known to exist. We have been able to develop techniques for the extraction of the geoduck, and this is, of course, a valuable food product. Surveys of the resource in 1976 identified new sources of the clam, and proposed surveys for this year should complete the exploration of our entire coast. Co-operative marketing work with the Ministry of Economic Development has identified new markets in Japan, Hong Kong, Singapore, France and Germany. The Asian market is currently buying. Restrictions on harvesting in Washington have resulted in an annual shortfall of four to five million pounds per year. So we can see there is a tremendous demand here.

Our industrial stimulation proposal for the shellfish industry in all of its aspects includes completion of the geoduck resource exploration, increased technical service - and that's in the area of advising on culture techniques and assisting in lease arrangements, lease assessments, and so forth - particularly to the oyster industry in order to meet demands from the private sector.

Exploration of under-utilized species such as cockles, horse clam , razor clams, octopus and others is still going on.

This is building upon the base of our small business in this province. It is opening up new avenues for investment for large and small concerns. We have the development of new fisheries and new product processing. We have an initial federal-provincial programme where we have done some exploratory fishing for prawns in the south coastal area and have identified new stocks. There are additional promising areas on the west coast of the Queen Charlotte Islands that warrant exploration as well. Market demand and unit value for the prawns is high. There are other species. Side-striped and humpback shrimp are similar to the prawns and have a high potential unit value and market demand. Because the species are comparatively unknown, there is a need for some development work on the handling and the processing; and similarly in the market for canned herring prepared in the Japanese style. This is a known market in B.C. and B.C. producers have the capacity and the capability to produce the quality of product for this market. We are helping them to develop this new foreign market by the development and production of a test shipment.

I could go on with a long, long list here of the initiatives that we're taking in the fisheries area, and in other areas in this ministry, which will not only be of great benefit in the overall management of these

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resources for the public, but will also stimulate job-creation and bring about increased investment in our province. And I might say that every indication is that the investors are coming back, in spite of the sorry mess that those people opposite left in this province; they're coming back, they're looking for these opportunities, and we're making every effort to accommodate them, encourage them and create an appropriate climate because that investment means employment for not only this particular time but for our young people in years to come.

No kind of quick, make-work projects are these; these are projects which will have lasting benefit to the province and ensure that the employment benefits endure. And I might just say that we expect that we will have hundreds of people employed in these efforts immediately this year; and so that is not to say that these are long-range objectives. There will be hundreds of British Columbians employed through our salmon-enhancement efforts, through our efforts on commercial fisheries. I might say also - just one other area; and this is not to say that this is a lesser priority, but I realize that I omitted to mention this among the things in the list - that we have a major programme for rehabilitation of trout-spawning stream - clearing debris and obstructions from trout and salmon streams throughout the province to provide access to spawning sites and improve juvenile-rearing capacity. Long-term benefits would accrue to both resident and tourist anglers, as well as fishing resorts; and the improved natural production reduces the need of hatchery stocking, which is very costly. But I must say that that hatchery production is nevertheless of great benefit as well, and we will be increasing that capacity to produce in hatcheries with the addition of a water supply to our newly-opened Fraser Valley fish hatchery. That project, Mr. Speaker, as you will know, has doubled our capability to produce and stock sport fish in our lakes and streams in this province, and that is in support of a sport fishing industry which is partly accountable for a $1.4 billion tourist industry in this province. The best estimate we have is that sport-fishing accounts for about $160 million of that spending by visitors.

And rehabilitation of lake fisheries for trout, Mr. Speaker: we will be undertaking a stepped-up programme using procedures to remove undesirable fish, coarse fish and so forth, and restock the lakes with trout; and this will be an effort to reinforce the sport-fishing opportunities in the Kamloops, Cariboo and Kootenay areas - and that will be underway this summer. All of these programmes will be employing people in the short run to obtain these objectives this year; but they will have a lasting benefit in employing people through tourism in our fishing industry, and in related supporting industries for years to come.

Now, Mr. Speaker, I've gone on at some length about this particular aspect, and it may be that it isn't of interest to the members opposite. I haven't noticed them taking a good deal of interest in it; but I must say that this is exactly the kind of thing which is bound up in this budget. There are opportunities in every aspect of this budget for investment, for job creation. This budget creates an opportunity which is unprecedented in the conservation area of my ministry, but it is not solely devoted to that by any means. There is such a long list of benefits which I know have been recited in this House. But this is a case in point, when I say that those members opposite, in persisting and running off into broad, sweeping rhetoric, talking about their frivolous amendments and avoiding the main thrust of this budget, have really done the people of this province a disservice.

AN RON. MEMBER: The Conservative leader said he would support the budget.

HON. MR. BAWLF: They have a responsibility, Mr. Speaker, to share in creating a positive climate in this province. They have a responsibility to make positive criticism and to contribute useful ideas in the debate here and to communicate the things that are there in this budget - which is an outstanding budget - to the people of this province, to encourage them to participate - as they are -in bringing the economy of this province further forward as the leader in this country. It is the leading economy in this country as this time.

Interjections.

HON. MR. BAWLF: Mr. Speaker, I just want to sum up the situation we have then. I'm going to go back to a remark I made the other evening, just to begin. We had three years of that government in which they increased spending annually by approximately $2 billion. Overall in three years, in the face of driving inflation in this province, they increased their spending 136 per cent.

Mr. Speaker, in the same three budgetary

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fiscal periods this government has increased its spending a total of 25 per cent, but it has put the budgets of the Ministry of Education and the Ministry of Health both over the billion dollar mark. It has brought long-term care to this province, which is so sought after by all enlightened people. It has brought so many other benefits. 1 just am terribly disappointed that that opposition haven't got the guts to stand up and support an outstanding budget.

AN HON. MEMBER: Rear, hear!

MR SPEAKER: On a point of-order?

MR. NICOLSON: I am rising just to correct statements attributed to myself, or rather the lack of statements attributed to myself. I would draw to the minister's attention that I spoke for aver 20 minutes on the potential danger...

MR. SPEAKER: Order, please.

MR. NICOLSON: ... to 25 per cent of the bighorn sheep population...

MR. SPEAKER: Order, please, hon. member.

MR NICOLSON: ... in the Todhunter-Chauncey Creek area.

MR. SPEAKER: Order, please. Under standing order 42, 1 remind hon. members that no m member may speak twice to a question, except in explanation of a material part of his speech which may have been misquoted.

MR. NICOLSON: Yes, and I was misquoted inasmuch as the minister claimed....

MR. SPEAKER: Order, please. As I understand it, the member said this is not a misquotation, but it was something that the member did not say in the House. Is that true?

MR. NICOLSON: Mr. Speaker, the minister got up in this House and said that I did not mention one word relative to conservation.

MR. SPEAKER: Order, please.

MR. NICOLSON: If the minister had had the courtesy to at least...

MR. SPEAKER: Order, please.

MR. NICOLSON: ... read my remarks, if he was not going to listen to them...

MR. SPEAKER: Order, please.

MR. NICOLSON: ... he would know that I had been talking about the...

MR. SPEAKER: Order, please.

MR. NICOLSON: ... annihilation of 25 per cent of the bighorn sheep in this province, and that's conservation, Mr. Minister.

(Mr. Speaker rises.]

MR. SPEAKER: Hon members, I would commend....

Interjection.

MR. SPEAKER: Order, please. Would the member withdraw the imputation of lying? Please withdraw immediately.

Interjection.

MR. SPEAKER: Withdraw.

Interjections.

MR. SPEAKER: Order, please. The member will withdraw. Under the standing orders....

Interjections.

MR. SPEAKER: Order, please. Would the member please be seated?

Interjection.

MR. SPEAKER: Under the standing orders, any member who must repeatedly be called to order and who will not acquiesce to that request, must be excused from the chamber for the remainder of the sitting. The hon. member has displayed an unwillingness and therefore the Speaker has no alternative but to ask the member for Nelson-Creston to be excused from the chamber for the remainder of the sitting.

Interjection.

MR. SPEAKER: Order, please. Sergeant-at-Arms.

[Mr. Speaker resumes his seat.]

MR. LEVI: Before I get into my speech, Mr. Speaker, I would like to draw the House's attention to a legislative colleague of all of

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us, particularly of those on this side. He's Grant Notley, the leader of the NDP in Alberta, and a member of the Legislature, who is sitting up in your gallery. I would like the House to welcome him.

The previous speaker went to some lengths to describe his department, Mr. Speaker. I'm wondering what he's going to have left for his estimates. I would like to point out to that member.... It seems that like many of the ers over there, he's making a virtue of the fact that all history in this province seem to have started on December 11,1975, and that he has no knowledge of what took place before.

The Minister of Recreation and Conservation should remember, Mr. Speaker, that he does have increases in his Recreation budget, but I would remind him that in 1972 that department had a budget of $11.8 million, and in 1975 it had a budget of $47.4 million. That's well over a 300 per cent increase, and I have yet to witness any phenomenal increase in terms of that particular ministry at the moment. So let him go back further than just the time when he was elected, when he somehow thinks that the whole world starts.

He made a great speech about the increase in the ferry system and the number of passengers being carried. It's up 20 per cent. Well, that's very nice. I think that's very good for the ferry system and it's very good for the economy, but up 20 per cent from what - from the incredible damage that they did in 1976 and 1977 to the economy of Vancouver Island, so that somehow it is coming up to the level of 1975 again? Does he see something virtuous in that?

All too of ten we have in this province, in this country, the idea that you can go ahead and destroy an economy because you want to be a bottom--line government, then as you start to improve things, that somehow you should take a lot of credit for that - when you've already done incredible economic damage. It's almost similar to the situation, Mr. Speaker, on the federal level where we've had a Prime Minister for 10 years who has done more damage to the economy than anybody else, and now we're told by the press that he's the only person who can save us. It's the same kind of silly thinking on the part of the government, when they operate this way.

When the Minister of Finance read his budget speech, one can say, I think, that the major facet that came out of the budget was the reduction of the sales tax. There was nothing very startling about anything else. There were increments that would be required every year except that there was an issue around the sales tax. I just want to deal with the sales tax question and see later on that the minister listens closely - whether in his estimates we're going to be able to elicit some idea of what they were thinking about when they got involved in the reduction of the sales tax.

It should be remembered, Mr. Speaker, that it was the minister and his government %to decided that they had to increase the sales tax by 40 per cent. Now we have yet to learn -in fact, we have never been informed at all by this government - just how it arrives at its economic policy making. We do not have, in British Columbia, a visible economic advisory body, so I presume that the minister is relying primarily on his staff and some of his colleagues in terms of the development of economic policy. We have never found out what the basic reason was for the severe increase in the sales tax, because presumably if they had done the studies, they would have known that whatever they would have gained in terms of increased sales tax would have been offset by the incredible loss, particularly in the retail trade industry, where there were declines in sales. As a result, this has reflected itself in the corporation tax.

So we don't know where the minister gets his information from or how policy is formulated. We do know that sometime last year, at the financial ministers' meeting and then at First Ministers' meetings, some discussion was made in respect to the sales tax. The impetus for the reduction of the sales tax came primarily from the federal government. They were able to dangle in front of the provincial government an option which they had not had available to themselves before. If you are prepared to reduce the sales tax by three points, we'll provide for the "have" provinces two-thirds of the loss. Now that was useful for the federal government, because the federal government also needed to show some leadership in terms of economic policy. So that's what they came up with.

The Minister of Finance, Mr. Speaker, has not been candid with us about what happened in these discussions. I would hope that in his estimates we are going to be a little bit more successful. If it was that when the minister became aware of the offer by the federal government of the sales tax reduction he went to his cabinet colleagues and said: "Look, we probably have a way out of the woods here, in terms of the negative effects of our 7 per cent sales tax, by taking advantage of the offer that the federal government has given to us...."

Now I don't know whether the minister is

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aware, but part of the programme that the federal minister announced in terms of the sales tax came as a result of some recommendations that were contained in the Economic Council of Canada annual report, which is entitled "Into the '80s." Now I said "part of the recommendation" and I think what I should really say is that his proposal to the provinces to cut the sales tax was really only part of the recommendation because the recommendation by the Economic Council of Canada was that first of all, if you are going to reduce the sales tax by 2 per cent, then you must be able to say to the provinces - and the provinces to the people - that this tax will remain in force for at least two years. On the federal level we only have a six-month guarantee, and on the provincial level we only have a one-year guarantee. 0

AN HON. MEMBER: Untrue.

MR. LEVI: Untrue? Read the budget speech, my friend. We only have a one-year guarantee that it's going to stay on with a reduction down to 5 per cent. Now I think it's important that the minister, when he was making up his speech, might have mentioned to us, if he understood what the Economic Council of Canada was talking about, that it was important, that you can't just bring it in for a brief period to leave a lot of people hanging there as to what exactly is going to happen. You've got to be able to demonstrate to the people that there's going to be some confidence exhibited in the economy and the f future of the economy by starting to plan ahead. This budget only takes us until March 31 next year. We have no idea whatsoever what that government plans in terms of the sales tax situation.

Now many of the members of this House will recall that two years ago, when the government brought in a range of taxation increases, there was severe criticism from the opposition, from economists and from businessmen -and not only in British Columbia but from people across the country - in which they emphasized that the worst thing that can happen in times when the economy is very slow is that you start putting on very exacting, overburdening taxes simply because you want to raise money. It does nothing for the stimulation of the economy.

But, going back to the sales tax, the minister, in his speech, has given us no indication past one year. So what really is going to happen in terms of the sales tax? The recommendation of the council was that, not only do you give a guaranteed period that the sales tax be at the level it is - and possibly be reduced further to create stimulation - but you also do something about the personal income tax situation. That personal income tax situation in this province is something that people have to be aware of, and that the government has to be aware of, in terms of what the problems are. Who is paying, really, the major tax burden in the province? That's a significant question in this province.

I'm not going to read from the minister's budget speech in respect to these particular figures because, after all, the budget speech is a partisan political document. What I'd like to do is to go to the Statistics Canada publication, published in April of this year -which covers the fiscal year ending March 31,1978 - it's entitled "Provincial Government Finance." it's a review of all the expenditures, of all the provincial government financing in the various provinces. I think, Mr. Speaker, that it is important that the minister understand that the ratio of contributions which exists between the personal income tax in this province and the corporation tax in this province represents a gap that is getting increasingly wider, and that one has to question it from a number of points of view. At the end of 1977 in British Columbia, the personal income tax that was paid represents some 22.5 per cent of the revenues of the province, but the business tax represents only 6 per cent.

Now one of the things that has happened in respect to the business tax proportion is that it is significantly lower in terms of gross amounts. That is because the economy in the province continues to stagnate, the bankruptcies continue to increase, and, despite what the Minister of Economic Development (Hon. Mr. Phillips) told us the other day about the 13,000 businesses that were started last year, the economic health of this province is not good, particularly in relation to the revenues that are received from the corporate sector. That has to be of concern to the Minister of Finance (Hon. Mr. Wolfe) . But what he has chosen to do is to take a short-range, almost election-type strategy, and to say: "We have reduced the sales tax by two percentage points."

There have been a number of interviews over the last two weeks, particularly in the retail industry, about how the tax is benefiting sales. All right, it's too early to tell at the moment. It's not something that will be shown particularly, I think, until late November-December probably, when a lot of the figures are in.

But we do have some experience to call upon, and that is the experience of the province of

[ Page 665 ]

Ontario, which went this route some two years ago. They went this route two years ago in order to stimulate the economy, and they did reduce the sales tax. Mr. Speaker, they had the same problem when they had reduced the sales tax, because what they failed to do was to offer some stimulus in terms of more purchasing power for low income people - you know, removing them from those tax brackets so that they would retain more money.

But we have another element now, that has come in right at this time, which has created havoc also in the business community. Again, Mr. Speaker, it's not sufficient for the minister to come in here and say that the stimulus he's giving to this economy is to reduce the sales tax by two percentage points, because at the moment we have a situation where the Canadian dollar is at 87J - 88J in terms of the U.S. dollar; and we have from the exporting industries in this province great cheer. They're very happy, their profits are up. In the lumber industry the sales are up too; but the prof its are way up. What about the real victims of that kind of policy? The government tells us that it is generous, because it has reduced the sales tax. We're fighting the battle of a lower Canadian dollar, our imports are costing more and people in the province are paying more for these goods. We're not just talking about jewels; we're talking about things like food, which is costing more. So what do we have? We have a stand-off situation. You take off the 2 per cent, the dollar is still trying to find some reasonable level at 90 cents, everybody is happy in the export industry; but those of us in British Columbia who are consumers are paying more. So the 2 per cent is of f set by the more expensive cost of goods, which is not leading to an increase in the retail sales industry in terms of sales. It's an offset. The reason that it's a stand-off is that the government hasn't gone far enough, and neither did the federal government.

I don't know what that minister spoke about at the First Ministers' Conference, or whether he has any understanding that you can't take a single tax issue and just say that this is our solution to getting the economy going, without doing a number of other things. You don't have to be an economic genius to know that the only way that you're going to be able to stimulate the economy in the sense of getting people to spend more money is to leave them more money to spend. And the sales tax is a rather simplistic approach in the way that the minister has gone. It's simplistic because he has to have a number of other measures.

This leads me to discuss for a minute the need in this province, as the member for North Vancouver-Capilano (Mr. Gibson) has often said, for the setting up of some kind of economic council that is made up of a number of citizens and experts in the province who have some understanding of what are the needs and what are the impacts on the economy.

It's interesting that in the greater Victoria area there is such an economic advisory council, and that grew out of the incredible depression that was created by the policies of that government in 1976 when they taxed everybody and they doubled the ferry rates and they set out - that was not their intention, but that's what happened - to destroy the economy on this island. As a result of that, the member for Victoria recommended that there be such a council set up. There was a lot of heeing and hawing from many people, particularly people in this House, but the citizens of Victoria decided to do this and they set up such a council. They have a fulltime executive director and they're making an attempt to understand the needs of the economy. Well, if they can do it in Victoria where you have something like 250,000 people in the greater Victoria area, then we certainly need such an advisory council in the whole of this province. And I don't want anybody to yell across: "Well, you were the government for three years, why didn't you do it?". We didn't do it, but that doesn't mean to say that it's not something that has to be done. It does have to be done, because we can't simply leave to the government the development of economic policy ideas within the Ministry of Finance. It's got to go beyond that. Somehow you've got to bring together the various sectors of society to talk about these things.

It's not always that governments listen to these recommendations that come from the Economic Council of Canada, for instance. But what I find most useful about what the Economic Council of Canada does is the incredible research work that goes to back up some of the recommendations they make, and that's useful to all governments. So most of the basic work on the broad scope is done by what goes on in the Economic Council of Canada, and it gives the opportunity for a provincial government, if it's prepared to discuss - and I would hope that they are prepared to discuss - with the community the setting up of an economic advisory council, and they will do the research that's appropriate to the needs in the economy of British Columbia. That's the only way we can go. Because whether it's that government over there, whether it's this party that comes in next time, or you get a change over the next

[ Page 666 ]

25 years, if you're not going to have a central theme in terms of what the economic direction of this province is, then we'll continue to have the kinds of things that existed over the past 10 years.

Some of this economic policy-making has got to transcend all these political party lines. We have to talk about the future of the province. We don't want one government that comes in, as we did in 1972, and found that services were so bankrupt in terms of what kind of impact they were having on people.... Then we had to set out to double and triple the budgets because the previous government wouldn't do it. Then that government is followed by a government that decides to cut back again, with no recognition of the social cost to the people that are involved, whether it's in social services, whether it's in health, whether it's in recreation or conservation. That does nothing whatsoever for the continuing development of the province if you're going to have governments that are going to take this narrow, cynical, political view, particularly as this group did when they decided to load everybody down with impossible taxes. Now they're coming into the House and every one of them is telling us that everything is on the increase. Well, we know that, because you decreased everything. Now you're trying to bring it up to the level that it was in 1975. Well, if that's the scenario for economic development, then the province is in worse shape than I thought it was.

So from time to time we might get from the members over there.... Instead of standing up, Mr. Speaker, like a lot of automatons that are plugged into some central machine that operates out of the Premier's office, which has a big hopper that pours in the gobbledegook that they spew out, they might offer this House and the people of the province something more than: "You did not do this in 1972 and 1973, " and "how bad it was in 1975." We're in 1978. We fought the election in 1975. We lost; you won, now get on with the job. And here you are, two and a half years later, with no direction. The only direction comes from the little Minister of Finance (Hon. Mr. Wolfe) who thinks he's going to come in with a big bundle when he tells us he's going to reduce the sales tax by 2 per cent.

You know, back of that kind of reduction in sales tax, presumably, is the same kind of thinking and logic and research that went into his reduction of the succession duties. He told us last year that they had done studies on the impact of reducing or taking away the succession duties on the investment climate of British Columbia. He's never produced the studies, and the investment climate of British Columbia has continued to increase at the same rate aver the past 10 years - 5 to 8 per cent.

We've seen no startling results from that. What we have seen is a dramatic reduction in the revenues of the province. This year, if they would have the succession duties on, it would come to about $60 million a year. That $60 million would accelerate the kind of programmes that need to be put back into the position they were in before. The minister has yet to discuss what is missing even in this budget speech new sources of revenue. There is a very glaring problem in respect to the gathering of taxes, as I said before, where you have a tremendous gap between the percentage of money that is paid by personal income tax and what is happening in terms of the corporate income tax. That's a very serious problem. If we're only going to rely on the existing revenue tax procedures that we have, then we're going to have a very serious problem in this province. We're going to have to look for more revenue sources and they obviously have to come, in the first instance, from the resource-based industries.

We have constantly asked the minister why it is that he forgoes these kinds of revenues. Why does he forgo the royalties on coal? Why does he forgo that $10 million or $15 million that he could collect from the sale of coal, taking it from $1.50 per ton to $2.50 per ton? That is something that that industry could easily absorb. There would be objections because it's part of their contribution in terms of the state and it's a realistic economic rent in terms of the resource. But we don't have that at all. We have a government that operates on a very narrow revenue tax base, and they don't seem to want to go beyond that. All they seem to do is to reduce the revenue tax base, and as a result of that reduce programmes. I'm not going to go into a catalogue now of the reduction of programmes, because we're going to have an opportunity, during the estimates of the ministers, to really put into perspective exactly what's going on.

I saw that the Minister of Human Resources (Hon. Mr. Vander Zalm) announced yesterday that his grants program came to $6.4 million. Well, in my simple mathematics, in 1975 our grants programme was almost $10 million. Now the minister will surely say, when he gets up in his estimates, that that wasn't a decrease, that was an increase, because that's the kind of double-think that we have over there.

HON. MR. VANDER ZALM: You don't understand.

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MR. LEVI: If we gave $10 million in 1975 and he gave $6 million in 1978.... That's not a reduction, my friends, because he says: "I don't understand."

HON. MR. VANDER ZALM: That's not true.

MR. LEVI: That's what we've had. Let me give you an example, Mr. Speaker. I think it was the member from Esquimalt (Mr. Kahl) yesterday who was reading from a lot of newspaper clippings and he talked about cutbacks in services. Let me give you the definition that I ran into in 1975 of a cutback in service -and I'm sure that the Minister of human Resources has the same problem.

I can think of one particular agency, as an example, that was receiving, let's say, $200,000 in the current year. They came to us with a new budget and they asked for $300,000, and we may have decided to give them $250,000. They went to the press and they said: "Levi's cut us back by $50,000." Yes, the minister knows what I'm talking about. That's the new kind of thinking. If you don't give them what they ask f or, then you've cut them back. If you remind them that they're getting 20 or 25 per cent more than they had the previous year, well, that's not what it is. So for the member for Esquimalt, he can't just come in here with a handful of clippings. He's got to do a little bit more research.

But when we get into the estimates.... We are going to get into the estimates of the Minister of Health (Hon. Mr. McClelland) , whom we heard the other night telling us about $700 million worth of building programmes. Most of it is in his head, some of it is on paper. The Children's Hospital is going up, and yes, it was all your invention; nothing started before 1975.

Interjections.

MR. LEVI: Yes, we will soon show you the difference. Everything that was built – the new extended-care homes, the intermediate-care, the new childrens facilities - was all the creation of that minister.

HON. MR. McCLELLAND: That's right.

MR. LEVI: We don't accept that and we will have an opportunity to demonstrate to that minister when the estimates come on that you've got to tell, as the Minister of Economic Development (Hon. Mr. Phillips) talks about, the true facts, not the minister of un-fact telling us his facts.

So here we are. That is the state that we're in. I want to go back f or a minute to the whole issue of the narrow tax base, the failure of that Minister of Finance to be able to tell this House that there will be a continuing growth in terms of the collection of taxes in areas which are new and which can afford to pay these taxes, and that there will be a reduction in the areas where there are people who cannot afford to pay them.

I want to give you another example. One of the major campaign speeches of the previous government was that they were going to transfer the debt load from the local taxpayer to the central government. After all, the Union of B.C. Municipalities is a constant pusher of the issue that welfare should come out of general revenue, that school costs should come out of general revenue.

Referring again to the Stats Canada publication.... The minister might take note and then we're going to go after him in his estimates anyway. I understand he's the first one on the block next week, so that should be very interesting. If you didn't know that, Mr. Minister of Human Resources, we've been told that he's going to be the first one in the barrel. We're looking forward to that.

On March 31,1978, according to the provincial government finances, there is a section which relates to revenues from local governments and their enterprises. Mr. Speaker, just for a minute I want to be able to demonstrate to you what is happening in terms of the province of British Columbia. If you take the province of Newfoundland, their revenue in terms of the government is 0.1. You have the same in Nova Scotia. When you get to New Brunswick, it's 2.9 I'm talking now about millions of dollars; I'm not talking about percentages. So when we get to Nova Scotia, we're talking about $2.9 million. When we go to Ontario, it's $1.4 million. We get to Manitoba, it's $3.3 million. We get to Saskatchewan, it's $5.5 million. We get to Alberta and it's well under a million. And then we get to British Columbia and it's either a misprint on my part, Mr. Minister of Finance, or there's a problem. It says $30.8 million. Those are the revenues that come from local government enterprises and local government as revenue to this province.

Now I can recall watching this very carefully when I was the Minister of Human Resources because we had to deal with the municipalities in respect to their contribution for the welfare system. They pick up up to 10 per cent; there's no per capita now. In 1975, that section of British Columbia for those contributions amounted to just under

[ Page 668 ]

$25 million. And here we are - and this is an estimate figure because it's the end; it was published this month - in British Columbia it's of the order of $30.8 million. Last year at the end of the fiscal year 1977 it was $29.6 million. That is a very serious problem here, Mr. Speaker. It's a problem that the minister is going to have to address himself to. If it's the policy of that government to remove the taxation load from the local taxpayer to the provincial government, then something is going wrong. Something is going very seriously wrong.

If the revenues that the government receives from the local municipalities is increasing, we can go even further than that. We'll deal with that under the Minister of Education's estimates, where we're finding a dramatic shift in the burden to the local taxpayers of school costs. In the city of Vancouver, the provincial government contribution in terms of the operating costs is going to be down to 5 per cent.

Now something serious has happened. What we have to wonder about, what we really have to wonder about, is what is happening to the revenue-gathering situation in respect to the government. If they are shifting the burden to the local taxpayer, which they are doing all the time, then what is happening to the other revenue?

HON. MR. WOLFE: What about revenue sharing?

MR. LEVI: Never mind about revenue sharing. We're talking about the gross effects. It's all very nice to say revenue sharing. You go to the local municipalities and if you can convince them....

DEPUTY SPEAKER: Please address the Chair.

MR. LEVI: If you can convince the local municipalities that they are paying less, Mr. Speaker, than they were paying two years ago, then you're going to have a fine job doing that. All we get out of the municipalities is that the local load has increased and the provincial load has decreased. That's what's happening, with your tax revenue sharing or not. Tax revenue sharing! The subtleties and the not-so-subtle approaches to putting up the mill rate in terms of school taxes - that hasn't gone up. That doesn't mean that there is more money being paid. I don't know one municipality in this province that has said a good word about the policy of the provincial government in respect to their debt load. You name one. Just name one, because I can't think of one. You wait until they go to the UBCM convention, Mr. Speaker, this year, and hear the kind of crying that you will get from the local municipalities. A constant shift to the local taxpayer in direct contradiction to what you said you would do when you were campaigning.

And why? Why is that happening? Because you're not able to get the revenues f rom the other sources? Or because you have no imagination in which to develop new revenue sources? New revenue sources - that's what you've got to do. You've got a resource industry here, base industries which can afford to pay more. But what you have chosen to do is not only to saddle the local taxpayers but saddle the people on the lower income levels. The dramatic rise in the gap between the payment of taxes by people on personal income tax and people within corporations is dramatic. It's too dramatic for the minister to be able to say very easily, "Well, we have the revenue sharing." Yes, you're the only one who's clapping. My, my my-

We'll have a chance to go at that next Monday and he will have an opportunity to tell us exactly the benefits of his revenue sharing and we'll be able to tell him some of the opinions from the local mayors and aldermen of the municipalities. The other day, in talking to the school board people in Vancouver where they have a reduction of something like $9 million, they've got to find another $9 million. They found $9 million. They're going to give it to the separate schools. 'That's going to happen to the school system in Vancouver? You'll have an opportunity to tell us that next week, Mr. Speaker, because that is what has happened. That's one of the realities of life in this province under that government. They made a very quiet, calculated decision to shift the burden to the municipalities. At the same time they shift the burden to the municipalities one would think somehow there would be a decentralization of power. Along with the burden that is carried by the municipalities would go some of the decision-making. I mean, that's the government, the great people who were going to bring freedom into the province. Freedom. Talk to the school boards; talk to the people who run the schools, and talk about the incredible, centralist policies of the government. Centralists - that's what they are.

I'm going back to the original part of my speech which dealt with the sales tax. We are not negative over here in terms of the sales tax. If the sales tax, even in the way it has been introduced, will do some good, that's

[ Page 669 ]

good for the province. But the point is that you can't simply take one isolated facet of some new economic policy, which is just that alone, and think that somehow that's going to do the job. It's not going to do the job. You've got to have other things to go along with it. You've got to have something in relation to the involvement of the government. If the government is not going to be involved, then things are not going to happen, despite the fact that we constantly hear from the other side that if the free enterprise system is left to itself it can do the job. Well, we on this side have been convinced for well over 40 years that the free enterprise system cannot do the job. If we need a better example of their inability to do the job, we just have to look around and see the mess that the whole of Canada is in. Then look at the free enterprise policies of that government in respect to their ability to do the job. I remember that when the previous government was in, there was a great deal of discussion about the need for housing, particularly for affordable housing. Where did the stimulus come from? The stimulus came from the government because affordable housing was something that was not coming from the private sector. In 1972 the government of the day was spending $7 million on housing; by 1975 that figure had gone up to something like $78 million. What is the legacy from that? The

Minister of Consumer and Corporate Affairs (Ron. Mr. Mair) indicated the other day that there is a surplus, a good vacancy rate. Okay, the vacancy rate is good for those people who can pay $400 or $500 a month. He's taken the ceiling off of the $400 a month. But we must not be confused by the idea that somehow it will eventually come down to $300 and $200. We keep talking about affordable housing - and we have no direction from the Minister of Housing

(Ron. Mr. Curtis) on this. People who have incomes of $12,000 or $10,000 are not able to take advantage of this kind of situation. The stimulus has got to come from somebody. If the private sector is not going to do it, then the government has got to do it. In the beginning of the report by the Economic Council of Canada, they were talking about overall development. I want to read a couple of statements from the report:

"While real gross national expenditure grew by 4.9 per cent in 1976, this increase was mainly concentrated in the first six months of the year. This growth was largely sustained by consumer expenditures on goods and services, particularly on semi-durables and non-durables. Total fixed investment hardly increased at all, and the residential construction was almost entirely responsible for the growth that did occur in this area."

This is important, Mr. Speaker: "Total fixed investment hardly increased at all, and residential construction was almost entirely responsible for the growth that did occur in this area." They go on to say: "Thanks to successful! government assistance programmes, housing starts reached an all-time high of 273,000 units in 1976."

Free enterprisers aver on that side, Mr. Speaker, can rail all they want about "It's not the role of government to get involved in the economy." And yet, if you look around, you'll find that if the government did not get involved in some parts of the economy, where would it be?

This isn't coming from the government of Saskatchewan or from the former government of Manitoba or from the government of the NDP; this is coming from the federal government. This report was endorsed, presumably....

Interjection.

MR. LEVI: Oh, it's not worst. I think what is even worse, if you disagree with it, is that one of the people who endorsed this document is the sister of the member for Dewdney (Mr. Mussallem) . She's a me member of the Economic Council of Canada; she's not a screaming socialist. Ian Barclay: now there's a screaming socialist if I ever saw one.

DEPUTY SPEAKER: Your time under standing orders has expired.

MR. KAHL: Mr. Speaker, I would like to correct some things the previous speaker mentioned. He continually referred to the member for Esquimalt as someone who in his speech yesterday had referred to and used newspaper clippings. I believe he should correctly have been referring to the me member for Coquitlam (Mr. Kerster) who spoke just ahead of me.

DEPUTY SPEAKER: The second member for Burrard (Mr. Levi) accepts your correction. Thank you for that point of order which, in fact, was a point of order - which is a very pleasant change.

MR. DAVIS: Mr. Speaker, I want to talk about the power of private enterprise to provide jobs, to increase incomes, to help us pay for much-needed people program s in this province. I want to refer more specifically to

[ Page 670 ]

remarks in the budget about the desirability -indeed, the imperative - of restraining government expenditures. I'll quote from the budget: "It's now a part of national strategy by governments to show restraint. British Columbia initiated this strategy and is pleased to see it receive such widespread approval." I hope it does receive widespread approval, in the sense of action. I'm glad to see that this province - this government, at least - is following its own advice in that connection. Again, in the budget statement by the hon. Minister of Finance (Hon. Mr. Wolfe) , I read that there is need for a fundamental and continuing reassessment of the size and economic role of the public sector. That's clearly required. "To meet this challenge our government has directed, and continues to direct, its policy efforts towards the practice of fiscal responsibility" - in other words, balancing budgets - "to control public spending and reduce the government's share of total economic activity.... Our government has consequently pursued the objective of holding provincial spending growth below the rate of increase in gross provincial product to stimulate private sector expansion." And finally: "Through our efforts the ratio of provincial spending to gross provincial product has been reduced from 17 per cent in 1975-1976 to less than 15 per cent in the coming fiscal year. Our eventual target is 12 per cent."

Now, Mr. Speaker, that's history - that's making history. It's the first time in many decades in this country that any government at the provincial level has reduced, one year after another, the part of the provincial pie which it has taken from the people of that province and spent as a provincial administration. Our national government has been an even more serious offender in this regard. It has continued to increase, year after year, the number of dollars which it has taken out of the pockets of Canadians and spent as a government in this country.

If one goes back to the '20s, for example, all levels of government - federal, provincial and municipal - took about 15 per cent of the national income and spent it according to the whims of those who were then elected to office. Fifteen per cent was the figure in the inter-war years; it had been 10 per cent before World War I. It rose to 25 per cent in the '50s, more than 30 per cent in the '60s. It's now more than 40 per cent in aggregate. Of the order of 45 per cent of our national income is now spent by governments in Canada. If this trend continues, every second dollar that every Canadian earns will be taken from that Canadian and spent by government.

That's the situation in the United Kingdom today. Government in the United Kingdom takes of the order of 50 per cent of all the income of people who live in the United Kingdom and spends it in government, by government, for government-sponsored purpose.

The federal share in this country has risen and the provincial proportion has risen. Only the municipal share has remained relatively constant over the last four or five decades. In 1930, the federal government spent around 6 per cent of our national income. In 1950, they spent 13 per cent; in 1960 it was 17 per cent; currently about 20 per cent of our national income is taxed away from Canadians and spent by the federal government in Ottawa.

In the provinces, in 1930, 4 per cent; in 1950, 7 per cent; in 1960, 9 per cent; 1970, 15 per cent. Currently of the order of 18 per cent of the national income is taxed away from people in each province and spent by provincial administration. Only the municipalities have held relatively constant, with a figure of around 8 per cent of national income throughout all of those years.

Now this government has reversed the trend. There's been a sharp swing up and a sharp swing down. When the New Democratic Party took over as government in 1972, about 12 per cent of the income of this province was being taken f rom the people of this province by the then provincial administration. That figure reached 17 per cent by 1975. It has now been trimmed back to 15 per cent and, as the Minister of Finance said in his budget address, the target figure is 12 per cent. That's the kind of turnaround that the people, not only of this province but of other provinces, should demand of their governments. It's the kind of good management, of improved administration, of better administration that we should demand from our national leaders in Ottawa.

It will at least give the private sector breathing room; it will give individuals an opportunity to show their own initiative. It will give them an opportunity to use their enterprise to do things for themselves and, in doing that, produce more wealth, not only for them elves, their industry and their employees, but, through tax shields, governments and government-sponsored programmes, social programmes, health program s and educational programmes which are so essential for us all and so essential for making the best of the talents which the good Lord has given our people. That is a very important policy, a very important approach.

Now I personally think that governments collectively - the federal government, the

[ Page 671 ]

provincial government and the municipal government taken together - should not take more than one-third of the national income. It should not take more than one dollar out of every three that Canadians earn and spend it in ways which people in government, heads of government, deem best for all the people in this country. In other words, the target for Canada should be 33 per cent of national income taken by government, not 45 per cent as at present. That 33 per cent should be seen in the context of experiences in other countries, performances elsewhere. I have mentioned the United Kingdom up around 50 per cent. Most countries in western Europe take between 40 and 50 per cent of the national income and spend it in ways which please governments more than they please people.

The figure in the United States is of the order of 33 per cent - 34 per cent currently. In Japan it's around 25 per cent. There are many countries in which the share of the national wealth taken from the people and spent at the dictates of government is 25 per cent or less. So the 33 per cent figure, the one dollar out of every three that I am recommending, is more a norm in the world today, certainly in the developed world today. It's not an exceptionally low figure. It's possible of attainment, however, Mr. Speaker, and that's why I am recommending a number of that order of magnitude.

Now there have been some discussions carried out between the provinces and the federal government with respect to the size, the order of magnitude - indeed, the immensity of government spending. In the early 1970s there were several federal-provincial conferences in which this matter came up, but there was no consensus. Indeed, if there was a consensus, it was to the effect that each level of government should be able to go its own way; that its level of spending was open-ended; that there should be no restraint, one as opposed to another; that the federal government should in no way be limited, and the provinces, individually, separately, and collectively, would not be limited either. Open-ended spending, competing for the tax dollar, competing in terms of programmes which appeal to people in the electoral sense of the word - this is bound to drive the percentage up.

I think, therefore, it is essential -certainly it's very desirable - to have some amount, some figure, some percentage imbedded in the constitution of this country. One dollar out of three, for example, should be the maximum take of government permitted by federal-provincial agreement. It should be something imbedded in the British North America Act, our constitution. Something as fundamental as this should be in the constitution of Canada in order to protect not just the private sector, but people, individuals, individual initiative; to protect us from big government becoming even bigger; to protect us from the growth of government expenditures, many of which are aimed at vote getting and projects which may appeal temporarily but which tend, through their immensity, to limit the private sector, to limit private enterprise, to impinge on the freedom of the individual.

There's a common belief that if you gather taxes in a general way, if you do not earmark the taxes, if you finance individual programmes without relating the cost of those programmes to taxes paid by people, somehow the people won't notice that they're being punished, that their freedoms are being limited, that they have less scope for their own individual enterprise, that their freedoms are being undermined.

There's been reference to the so-called user-pay principle. That's a bad phrase. It's become an unpopular phrase across Canada, and for the wrong reasons. As much as possible, activities - especially activities involving hardware, business, businesslike activities -should pay for themselves and be seen to pay for them elves. One- of the reasons we create Crown corporations is to relate the cost of programmes to the benefits or the values of those programmes. I'm all for packaging up and containing programmes as much as possible, letting the people know how much they cost. Let them feel directly the expenditures involved; let them be able to assess for themselves the values of the programmes. Only if the user pays, or knows what proportion of the cost of a programme the user is paying, do they have any way of intelligently exercising their vote at the next election.

They can't understand programmes which are paid for totally, or largely, out of general revenue. It's all lost. It's all blurred. It's all fuzzed-up. You pay income tax and sales tax and a few other general taxes, and it all goes into one pot. Governments, cabinets, ministers, top-level administrators, make all the decisions for you. They slice up the pie; they obscure. They are not accountable because taxes, fees, are not directly related to programmes. We must relate programmes much more directly to their costs. Let those who are advocating programmes also raise the funds necessary to pay for the programmes. Only in that way can the people out there, all of us, participate in the decision-making process;

[ Page 672 ]

only in that way can we really know whether we are getting value - people value, not just dollar value - for the programmes that are being advanced by government.

I had some responsibility for energy and for transportation with this government. I can say, as a broad generalization, that in the energy area the users of energy pay for the energy they receive. Energy in this province, broadly speaking, is on a 100 per cent user-pay basis, and that's as it should be. Indeed, energy is being used wastefully and a 100 per cent user-pay formula makes a lot of sense.

But in the transportation area, and this is true in many countries - not just in this province, not just across Canada - the user rarely pays. In the case of aircraft, especially small aircraft operation, private plane operations and float plane operations in this province, we have a 100 per cent user-pay operation or thereabouts. Larger aircraft, jet-type operations, have 90 per cent user-pay or so. Getting into trucking and certainly the use of the private automobile, we're down in the 80 per cent or less category.

There are many other areas in which the user pays less because there is a public value -B.C. Ferries, B.C. Rail for northern development, especially urban transportation. Urban transportation is a good example of a people-oriented programme and there's a very good case for the public-at-large paying a large part of the cost of public transportation in our cities and towns. If the user only pays a third or 30 per cent of the cost of a programme of that type, I certainly find that acceptable. I find it acceptable to use public moneys for the development of a large region in the northern part of this province, but those should be deliberate choices. They should be known to be deliberate programmes. The reason should stand out clearly as to why subsidization is there. Otherwise, the user should pay most, if not all, of the costs of a programme.

On the transportation side in provincial government accounts, transportation is now of the order of a $1 billion-a-year activity. It's a major activity. The shortfall in terms of income relative to outgo is of the order of half a billion dollars, and it's important that that outgo be clearly identified as to its value as between the services rendered.

But the main point I want to make here today to you, Mr. Speaker, is that as much as possible, programmes should be packaged up and their incomes and outgoes clearly identified, so that not only those in the top levels of government know what is going on but the people out there know what's going on. As I said before, we've created Crown corporations in order to make these activities better understood, better managed, more accountable not just to the government, not just to this Legislature, not just to us as members, but to the people out there so that they can judge how well their affairs are being administered.

But I come back to my main theme, Mr. Speaker - and this is one of the reasons why I unreservedly endorse this budget. Governments must show restraint. They must contain their expenditures. They must leave more elbow room for the private sector, for private initiative, for the individual to do what the individual believes is best not only for him but for his community.

I've seen references to government expenditure being limited to, say, I per cent less than the growth of the economy. That is an improvement, certainly, over what has been experienced. I trust this government will be able to contain its expenditures even core than that because if we simply follow the 1 per cent formula, it's going to take us 25 years to get back to the two-f or-one, or 33 per cent figure I mentioned earlier 33 per cent as the maximum for all governments to spend in Canada. One-third is the maximum of all national income to be collected by governments and spent by governments in this country. I believe it should be a number of that order of magnitude imbedded in our constitution. I believe that governments at all levels should have to work within some such overall number. I believe that they should be required to act responsibly because a discipline of that nature is imbedded in the basic law of the land - the British North America Act, the Canadian constitution.

Mr. Speaker, I endorse this budget. I'm glad to know that restraint is now the word across Canada. I'm proud to have been part of a government which really sold the idea of effective restraint to other Premiers and to the Prime Minister of this country. We're going to have to do a lot more in this connection, but I do think that British Columbia would not only serve its people well but the people of all of Canada if we were also to be endorsing an overall figure as to the maximum slice of the Canadian economy that can be taken by government and spent by government in the future.

MR. MACDONALD: Mr. Speaker, I'm rising this Friday morning to oppose the budget.

SOME HON. MEMBERS: No, no!

[ Page 673 ]

MR. MACDONALD: I feel kind of sad about that. It's the third budget of the Minister of Finance of British Columbia, our financial medicine man, and I remember what a fine start he got off to. It's almost two years ago when he rushed $181 million on March 31,1976, to ICBC because the poor thing was suffering a bad pain in the exchequer and it was dying in the arms of the government from need of a financial transfusion.

Our Minister of Finance rushed them that financial assistance and then the same day they rushed it back again and lent it to the government, and they did not need the money. Our financial medicine man killed two birds with one stone there. He saved the ICBC that the NDP had left in such terrible financial condition, and then they lent money to the government so the government could say they were in debt. But it was just a little bit to contrived. I doubt sometimes that the Minister of Finance, imaginative as he is, can tackle the real problem of the province of British Columbia, because he was born with that silver foot in his mouth.

They say that the NDP left the province of British Columbia in debt, and the Attorney-General (Hon. Mr. Gardom) nods. The millionaires know it, the press lords know it, the car dealers know it and the turncoats know it, but the people, bless them, are beginning to doubt it.

Oh, that Minister of Finance, when he goes out into the province of British Columbia, is worried about those pesky assets that the NDP built up during its term of office. While he's trying to convince everybody of the terrible financial wreck that the NDP left the province in, these pesky assets keep sticking to his fingers and he has to try and peddle them off, peddle those assets. It's embarrassing for that Minister of Finance to be selling the assets we built up while, at the same time, we're said to have left the province in a financial wreck. And I want to list, I want to put on the record some of those assets, built up for the people of B.C. by the NDP government.

HON. MR. WOLFE: Don't forget the debts.

MR. MACDONALD: The Minister of Finance says: "Don't forget the debts." Now let me just deal with that first. has the Minister of Finance ever told the people of this province that the NDP government, in its three and a half years in office, reduced, as the member for Alberni (Mr. Skelly) said, the parity bonds that were outstanding and were a direct debt of the province? The NDP reduced that Social Credit debt from $254 million outstanding to $125 million. Take your pencil out, Mr. Minister of Finance, and I'll tell you what condition we left the province in. Give us credit for $129 million in direct reduction of provincial debt in parity bonds. Give us credit for some of the assets we left behind: the greenbelt land - will you look that up? - $15 million, an asset left behind to build up for the benefit of the people; the agricultural land reserve, $25 million; the special and perpetual funds, improved by $150 million in our term of office; Panco Poultry, $10 million more than we paid for it; the ferries that you sold, $48 million - don't forget to tell the people about that. Can-Cel, Kootenay, Plateau, the Westcoast shares - all successful enterprises of the NDP government, valued by the Minister of Finance at $151 million, but obviously undervalued by that Minister of Finance because Can--Gel itself is worth $500 million.

Everybody knows, too, that we not only left the province in debt - all the millionaires know that - but they know that we killed the mining industry. Is that right?

SOME RON. MEMBERS: Yes; right.

MR. MACDONALD: That's what they say. The millionaires know it, the press lords know it, the car dealers know it and the turncoats know it, but the people, bless them, doubt it. Here's a book that should be burned. It's called The Annual Report of the Ministry of Mines and Petroleum Resources, 1976. Page A79 lists the total value of mineral production year by year, and during the NDP period.... I'm going to read into the record what happened as we killed that mining industry, so they say. In 1972, when we came into office, total value of production %us $636 million. In 1973, it was $1.109 billion - a big increase. In 1974, $1.264 billion - another increase; 1975, which was a difficult year financially, $1.364 billion. Increases year after year! They ought to burn that book. That book's embarrassing to them.

HON. MR. BAWLF: When were the mines developed?

MR. MACDONALD: The mines and the first copper smelter ever begun in this province were begun under an NDP government. Afton Mines - look it up. The Minister of Rec and Con is one of those people, like the speaker who preceded me, who doesn't believe government should do anything for people. They cut back all government expenditures - tight money. Well, that's great for the rich and the

[ Page 674 ]

powerful and the privileged. You complain about our budget where for the f first time something seeped down to the ordinary people of the province in services that they had never had before. These people who get up and are so pietistical about tight money, I guess they want to cut back all government....

Interjection.

MR. MACDONALD: Yes, cut it back to the police force. All the millionaires need is a police force and maybe a fire brigade; they don't even need the Legislature. Cut it all back because the danger is that something might seep back to the ordinary people of the province, when government is active and working for the people. They are like a lawyer who says: "Oh, what a shame it would be to see this fine estate frittered away on the beneficiaries." That's their philosophy.

Interjections.

MR. MACDONALD: Does that describe your lawyer too, Mr. Speaker?

Well, what about the lost revenues? The Minister of Agriculture (Hon. Mr. Hewitt) said we shovelled money out of the back of the truck, eh? That's what he said. You know what you're doing - through the Speaker - you're shovelling money out of the back of the province in lost resource revenues on an unbelievable scale. You shovelled out of the public treasury $39 million in lost inheritance taxes. You say there should be no free lunch, eh? No free lunch, they say, but they're perfectly willing that the poor little rich kids shall have a free lunch. That part doesn't bother them in the slightest. There was $39 million lost in the inheritance taxes after all the wealthy families of the province of British Columbia had rallied around the new Socred coalition. They all are now able to sing as one, in unison: "The pearly gates are toll-free now. All men are not created equal." That's their song, that's the bounty that they owe to this government; and that's the kind of province they believe in, a province dominated by an elite, a province with an aristocracy of wealth passing on from generation to generation, and that's not the kind of social democracy for which we stand on this side of the house.

They're shovelling revenues out of the back of the province. They repealed the mineral land tax that was $39 million in revenue brought in under the NDP administration in three years. The Mineral Royalties Act -mining was healthier in the NDP years than it is today.

"Oh, " they say, "share the burden." I'm not going to go through all the impositions that this government has placed on the people, but I'm just going to flip through them because they've been put on the record many times. ICBC went up 100 to 300 per cent; ferry rates, 80 to 50 per cent; sales tax, 40 per cent rise until Jean Chretien twisted the wrist of the Prime Minister of British Columbia and forced him to reduce it; hospital insurance up; medical premium ; bus fares; electricity rates; natural gas rates; ambulance costs; gasoline costs - and I'll come back to that to show how the responsibility for those costs lies on this government; school taxes; home heating - you name it. They increased the burden upon the ordinary people of the province while lightening the burden for the rich and powerful in this province.

As the member for Nanaimo (Mr. Stupich) pointed out - and this should be restated -whereas in 1975 personal and sales tax developed only 36 per cent of the provincial budget, now it develops 48 per cent, I think, in the current budget. So that's putting the load on people and taking it off industry and resources through bad husbandry and bad planning.

Now, Mr. Speaker, within the limits of my time I'm coming back to resources for a moment, but I want to refer to three little words in that budget speech that simply say: "Effective October 1,1974." It shows that this government intends to adopt the vicious principle of retroactive tax legislation and force that upon the Legislature. It's an abuse of the powers of the state reminiscent of the Star Chamber.

There was a supreme court decision of November 23,1977, and the Minister of Finance lost that decision. It was called "Canfors and the hon. Minister of Finance of British Columbia."It relieved Canfors of the corporate capital gains tax upon $8 million worth of assets. But the Minister of Finance had won that decision in the Court of Appeal of British Columbia, and he had won that decision in the court of appeal on February 18,1977. So now he interposes with legislation effective October 1,1977, thereby negativing the Supreme Court of Canada. Now the minister can change tax laws, but to change them retroactively, even by six months, is fiscal tyranny. The minister by this measure is determined to make liars out of the authors of prospectuses issued since that time.

DEPUTY SPEAKER: Hon. member, I must interrupt you to remind you that there's a

[ Page 675 ]

bill before the House.

MR. MACDONALD: I'm discussing the principle of retroactive tax legislation which is referred to in the budget speech, and which means that auditors who have certified company balance sheets since October I are now declared to be liars retroactively by the Minister of Finance. Certainty and confidence in the business community is destroyed by this kind of legislation. If there is legislation before this House, then it should be withdrawn.

You know, the idea that governments can step in between the court of appeal decision which they won and the supreme court decision that they lost, and negative and nullify the decision of the highest court of the land is something that should not be allowed to happen in any province or country of the world. The Supreme Court of Canada judges laboured in vain in interpreting a section of the Corporation Capital Tax Act which the government then whisked out from under their sight retroactively after they decided against the Minister of Finance. This is a clumsy, stupid and intolerable attempt to nullify a court decision after it was handed down, something that's never before happened in this province and I hope never will happen again.

Let me briefly refer to the question of the overruns in that budget. There are no overruns in the budget right now, but what has happened to public transit? What's happened to public transit? The Minister of Municipal Affairs is in his seat. In the 1977 throne speech, the minister came like a tiger, Mr. Speaker, and said he was going to introduce to this House an urban transport authority Act. Oh, but in the meantime the chairman of B.C. Hydro, Mr. Robert Bonner, objected and said before the Grown corporations committee.... This is undoubtedly his attitude, that Hydro can perfectly well run transit. So now all we see in the budget in terms of public transportation are these words: "To undertake important new initiatives in the field of urban transit."

Now what a climb-down is there in terms of doing anything for public transit in this province. The Minister of Municipal Affairs has lost his battle to do anything for the straphangers of this province. The Minister of Finance is bringing in a budget where he has expenditures slated for, I think, - $4.28 billion without doing anything in that budget, for transit. Hydro is now running a deficit in terms of public transit, Mr. Speaker, which we're told in the committee is about $65 million to $70 million a year. Now where do you see that in the budget which is a true reflection of the financial affairs of this province? Nowhere.

HON. MR. CURTIS: Wait for the bill.

MR. MACDONALD: Mr. Minister, you've been shot down.

MR. BARBER: We've been waiting for three years.

HON. MR. CURTIS: Aw, Charles, you exaggerate.

MR. MACDONALD: In this budget, either there will be a special warrant issued for the $65 million to $70 million deficit of B.C. Hydro for transportation, as there was last year in the sum of $32 million, in which case this is a false budget, or it will mean that the urban transportation deficit is to be paid through electricity and gas rates by all of the people of the province. I point out that with traffic thickening and the exhaust pollution increasing, this is a government that has turned its back upon public transit in its two years in office because it is a people service in which they do not believe.

Mr. Speaker, I ask the minister this: Is this a true budget or is it not? Are there going to be expenditures for public transportation or not? Is it going to be special warrant as it was last year, or not?

HON. MR. CURTIS: Nonsense. Wait for the bill.

MR. MACDONALD: Wait for the bill. Last year it was a special warrant: $32.6 million. Why shouldn't the budget reflect ... ? Have you no policy? Were you not able to get anything in the budget for transit at all? Is it going to be an overrun situation? You know, Mr. Speaker, this government had almost $100 million in overruns.

AN HON. MEMBER: No, $215 million.

MR. MACDONALD: Oh, no, it couldn't have been that much. Was it $215 million in overruns?

Interjections.

MR. MACDONALD: It was $215 million in a single year - and these are the bottom-line business people who know how to plan.

AN HON. MEMBER: Where is it in the budget?

[ Page 676 ]

MR. MACDONALD: Well, I just pointed out that transit isn't in there and that's going to be another little overrun this year, I would think. You know what they suffer from: they are leaderless, they are indecisive. When they run into a problem like public transportation, they dither and stall. What happened to that bill that you promised? What happened to the bill you promised would be brought in in 1977, Mr. Minister? What happened to it? It was there in the throne speech.

I wanted to say something to the Minister of Health (Ron. Mr. McClelland) , but he's not in his seat at the present time. But he may be listening to me back in his office, because he may know that his number is coming up. I just want to say this. You know, the Minister of Education (Hon. Mr. McGeer) got Mr. Sherrell as a non-Canadian to run ICBC. What's the Minister of Health been doing? Let me read the section of the Public Service Act: "The commission, in appointing any person to any position in the public service, shall appoint a Canadian citizen; but if no qualified Canadian citizen applies for a position, the commission may appoint another person as a temporary appointment."

Now I say that the Minister of Health has been breaching that section, by its words and by the spirit of it, because he comes out - in the very important speech and hearing section of his ministry - and he's proud of the fact that he has been hiring American citizens, although there are qualified Canadians in the province of British Columbia, graduates of the UBC training course who are looking for work.

The Hon. Mr. McClelland said: "It is true that the speech and hearing services division has hired many Americans. We should be very happy to hire Canadians, but we are not satisfied that the people being graduated by UBC are able to fulfill the jobs available." Mr. Speaker, the qualified Canadians whom we on this side of the House are talking about -and I've had many representations from people who are interested - are graduates of the University of British Columbia in a specialist course in this subject. For the minister to refuse employment to those qualified graduates, or to give them an opportunity for the training in the field that supplements that education, is, I say, a breach of section 34 of the Public Service Act. tie's set up a little committee and tried to dodge the issue. This government is not living up either to the spirit or the letter of the Public Service Act.

I want to refer again to some of our resource revenues that have been lost by this government. I want to briefly recall, and put on the record, what I said earlier about coal, and add one or two remarks to that.

The government could easily have additional public money from coal royalties in this province, because the price of coal has increased since 1973 from about $20 a long ton to about $56 at the present time. In that period of time the profits of the middleman company, Kaiser Resources, have risen from $2 million in 1973 to $12 million in 1974; in 1975 they were up to $64 million, which an American company extracted from the people of British Columbia to export our coal to Japan; $52 million in 1976; $57 million in 1977, in net profit to Kaiser Resources. And that's not to mention Fording Coal, which is a smaller operation.

There is easily an additional $10 million or $20 million a year in coal royalties that are available to this government, if they were willing to use the resources of the province, instead of the ordinary people of the province, to help f finance the costs of government. As I pointed out before, it could easily be done through a coal board similar to the British Columbia Petroleum Corporation, which would concern itself not only with production and conservation of the resource but also with the development of new mine sites.

When revenues of that kind leave the province, they leave the province forever. Kaiser Resources does not have in this province any business establishment or even a building. They could be gone tomorrow and they would take with them the profits they have made practically royalty-free from this government. Up at Sparwood they have a few temporary buildings, shacks and a big mining operation.

MR. KEMPF: Bring them to their knees and take them over, eh?

MR. MACDONALD: Bring them to their knees -when their profits in 1975 went up to $64 million and you cancelled out the royalty. What that government stands for is to see the God-given resources of the province of British Columbia sold off through international companies on the markets of the world without any economic rent or royalty whatsoever coming back to the people who own those resources. I say they are profligate guardians of the public interest - bad trustees. There is no other jurisdiction anywhere in the western world that would permit that kind of exploitation by international companies of a resource that, once gone, is gone forever. No

[ Page 677 ]

one would ever do that.

I've got a number of letters, and I want to talk for a moment about natural gas. Again, in natural gas, the giveaway has been an unbelievable giveaway of the resources of the province of British Columbia. Here's a little letter from Baldonnel, British Columbia, and it says: "I am writing in deep concern about our natural gas prices. Our natural gas has gone from 51 cents per thousand cubic feet in July to $1.05 per MCF in November; this is over an 100 per cent increase." And there are a number letters to the same effect.

I'm going to sum up this situation fairly quickly and then deal with oil.

This government boasts that it has $195 million in this budget in terms of the sale of natural gas leases. But I'd point out that when you've sold a lease you've sold it for 30 years; it's renewable up to 30 years. You've sold a capital asset of this province. And what has been the cost of that sale of a capital asset of the province of British Columbia? Who's paid for it? We have the annual report of the B.C. Energy Commission of this year. It says this, and it should be written into the record:

"The commission's report to the Lieutenant-Governor-in--Council as made in September, 1977: major recommendations were that the price of old gas should be increased from 65 cents to 78 cents per 1,000 cubic feet effective November 1, and that the price of new gas should be increased from 85 cents per 1,000 cubic feet to $1.03 per 1,000 cubic feet on the same day.

Other recommendations affecting producers, economic environment were:

that the natural gas credit system should be suspended, that oil royalties should be reduced, and that lower oil royalties should apply to production using advanced recovery techniques. A wholesale price for natural gas was also recommended. All of these recommendations were accepted by the Lieutenant-Governor-in-Council."

I think the order-in-council was December 30, 1977.

By that kind of a price increase - and this was the second price increase during the terra of the Social Credit government - you increased to the consumers of this province the cost of their natural gas fuel by 36 per cent in two years. You increased - and you can work it out on the volume of gas produced - to the producing companies of the province of British Columbia their revenue per year by $120 million a year. And, of course, you passed it all through to the consumer because

BCPC is making more money as the government agency than it was the year before. So you've passed that obligation. I say, Mr. Speaker, that those increases in the field price of natural gas are exorbitant, that they're not backed up by any reasoning whatsoever in this report. These recommendations were not made public, not supported, and were passed on to the Lieutenant-Governor, giving an additional $120 million to the natural gas companies of the province of British Columbia.

Now, of course, you need exploration and development in the field of natural gas, but let me say this: in 1975 and 1976 we had a very successful and just right exploration and drilling programme in the province of British Columbia. The expenditure in that year in the field was about $180 million. We are now in a position to turn up the tap, and whenever the gas companies come to you, give them whatever they want. That's what's been happening in this province. You're going to have a surplus of natural gas. By 1981 the f figures are over seven trillion cubic feet and you'll have nothing to do with it except export it to the Americans. That's an appreciating, depleting, natural resource where this government has exorbitantly increased the company take, which we will be paying dearly for for many years.

Now I know these are complicated subjects, because they involve figures. I'd be glad to debate them further and listen to what government members say, but I'll say this, Mr. Speaker: on this subject of the giveaway of British Columbia, they don't say anything. They don't attempt to reply to the kind of thing I'm presenting in facts and figures.

What's happened, Mr. Speaker, in the case of crude oil? I don't have my notes with me now, so I'm going to speak from memory. Premier Bennett went down to the energy conference in 1976, and he said that the field price that we should pay for crude oil per barrel was the world price. It was then $8 a barrel. He said that right then there should be a $2 increase and that if oil was at $13 a barrel, that would be a bargain.

The province of B.C. produced about 16 million barrels of crude oil per year. In the period that the Social Credit government has been in office, they have seen an increase in the price per barrel of crude oil going to those producers in the Peace River country of $4. Every time the barrel goes up by one dollar, it means three to four cents additional for the motorist at the pump. Every dollar of increase comes to an additional $32 for an average family, or, in the period of this government, another $128 per average family in increased gasoline prices at the

[ Page 678 ]

pump. In the case of home-heating oil there are equivalent increases because it comes from the same barrel.

Has the government attempted to recapture any of the swelling revenues of the international oil companies? They have given it away. The report I referred to talks about recommending a further reduction in royalties on crude oil, even though the companies have had this, but it should be borne in mind, Mr. Speaker, that there was already a reduction by this government in the royalty on crude oil -a reduction from 46 per cent to 40 per cent. Now this Energy Commission reports - and they say it's accepted by the government - a further reduction. So instead of trying to recapture some revenue for the people of the province, or trying to protect the consumer of gasoline at the pump or of home-heating oil, this government has actually reduced the imposition on them.

if you take that $4 per barrel increase in that period of time and you multiply it by the 1976 figures on the production of crude oil from the Peace River country, you find that the after deducting the royalty, the additional net gain in annual profit for the oil companies of the province of British Columbia comes to $38 million. What a giveaway. This is old petroleum and there's no additional capital expenditure required. The government even eliminates the incentive bonus that we had built into the price in the NDP days, whereby some of it had to be reinvested back in the good earth of British Columbia - a system that was working very well.

The report eliminates that, and the report even says, as I've suggested, that royalties should be reduced - after there had already been a reduction by this government from 46 per cent to 40 per cent. A few oil companies who have the old wells in the Peace River area are just pumping it out. The pipelines are paid for, the hardware is in place and there are no new expenditures. The additional revenue of those international companies is $38 million a year. So there's $128 million a year extra for the natural gas companies and $38 million extra for the little bit of crude oil that we produce - about 15 to 20 per cent of our requirements. There's no attempt in the province of British Columbia to keep the domestic price lowered and no attempt to protect the consumer. It's a giveaway of astronomical size.

Mr. Speaker, I want to record that the Minister of Forests (Hon. Mr. Waterland) thinks this is very funny. He yawns, and he makes faces, and he does not care. He does not believe that the province, once sold, can never recover. He doesn't believe it. He won't answer what I am saying, and I should call them charges, because they are charges of gross, profligate disposition of the natural resources of the province of B.C.

Interjection.

[Mr. Rogers in the chair.]

MR. MACDONALD: You say it may come back to Canada. But let me read this from the Province newspaper of March 29,1978: "U.S. Finns Slash Canadian Investment." The article says: "U.S. multinational firms have cut their 1978 investment budget in Canada by $830 million while deciding to raise capital spending in other industrial nations, particularly in Europe, according to a U.S. Commerce department survey." That same survey, Mr. Speaker, had this to say in respect to oil: "While budgets have been trimmed for mining and oil, plans for the manufacturing centre were generally stable."

Budgets have been trimmed for mining and oil in Canada, and yet, bit by bit, with no attempt to protect our position, we sell off this country and allow exorbitant profits to the international companies. Imperial Oil's profits have steadily increased from 1973 to 1977, far beyond the AIB guidelines, needless to say, because those guidelines were a reality for the working people on wages and salaries in this province, Mr. Speaker, but for the oil companies that I'm talking about they were meaningless. The profits of Shell, the profits of Pacific Pete, and the profits of Dome Petroleum have all increased far over and beyond the guidelines that applied to the rest of the people of this province.

Let the Premier hear this, Mr. Speaker, the U.S. Senate committee investigation made it very clear that the Social Credit Party is receiving campaign funds from the international oil companies. That's a matter of documented public record in a country that has more open records than we do in this country of Canada.

They have reaped, Mr. Speaker, a rich harvest in return for the campaign funds that they have donated to the Social Credit Party: $38 million additional in oil per year, $120 million additional in natural gas per year and the exorbitant profits being made out of natural resources.

HON. MR. BENNETT: You don't care what you say, do you?

[Mr. Speaker in the chair.]

[ Page 679 ]

MR. MACDONALD: Jean Chretien complains....

Get up and answer it. These figures have never been rebutted on the floor of this House. It is a giveaway of astronomical proportions. This is a government for the rich and the powerful and you say, Mr. Speaker, that we've been shovelling money out of the back of a truck. We gave better services to all of the people in this province during our term in government and we're proud of it. But this Socred coalition is shovelling money out of the back of this province on a scale that is unbelievable. You know, we're bleeding away with this kind of sell-off of Canada's resources, this exploitation, this profiteering in our resources. You bleed this country to death.

Jean Chretien, the Minister of Finance of Canada, complains that the outflow of dividends and profits and so forth is now greater than the inflow and our dollar is falling and our interest rates are up more than double the rise in the gross national product. The result for the people of Canada of selling off their country bit by bit is not only to sap the independence of that country but it is unemployment and it is inflation.

When the NDP was in power, Mr. Speaker, we made some successful attempts to return control and management and good husbandry of our natural resources to the people of the province. We developed, from our depleting national resources, a return in money into the treasury of this province which went into goods and services for the people of the province. But we are now seeing, Mr. Speaker, and I'm nearing the end of my time, and it's kind of sad because once you sell a country, you've sold it for good. Westcoast Transmission we bought for $22 million and it is now an asset in the hands of the Premier of British Columbia, who is interrupting me, of $35 million. That's $35 million we made for the people.

MR. SPEAKER: Your time is up.

MR. MACDONALD: Mr. Speaker, I'm talking a little bit more. I'm getting a little playback. Behind this budget, which has increased and continues to increase taxes and rates, apart from this sales tax thing, is a giveaway of resource revenues unparalleled, which is part of the problem of Canada as a nation because it inevitably saps Canada's independence as well as its economy.

MR. STEPHENS: I rise on a point of order concerning the member for Nelson-Creston (Mr. Nicolson) in his earlier comments here this morning. The Speaker made a ruling when the member rose and he said, referring to standing order 42, that "no member may speak twice to a question except in explanation of a material part of his speech which may have been misquoted." That's as far as the Speaker went and that effectively ruled against the member trying to make his point.

However, the order goes on further and it says, "...misquoted or misunderstood." That "misunderstood, " I submit, is the point on which the member had a perfect right to stand and be heard because the Minister of Recreation and Conservation (Hon. Mr. Bawlf) did, in fact, say that the member did not in his speech say anything about conservation when in fact, when you refer to page 359 of Hansard, April 12, you will see that the member did in fact say much about conservation. It's my submission that the ruling of the Speaker in this case perhaps didn't go far enough and had it gone far enough, would have permitted the hon. member to make his point. I think it's a precedent that we should avoid setting. I have noticed in the past when the Speaker raises this point, often the word "misunderstood" is left out of the ruling. I'm just suggesting that perhaps the member was correct. He should have been permitted to make his point.

MR. SPEAKER: The point is well taken.

HON. MR. WOLFE: We had an interesting debate on the budget and I've listened very carefully for valid criticisms. Some of them could be considered and studied, but I haven't heard one concrete, established criticism that could be considered valid.

For instance, a gem this morning was the second member for Vancouver-Burrard (Mr. Levi) . I believe he stated: "There's nothing outstanding in this budget, just sales tax." I want you to remember that, Mr. Speaker- just sales tax.

HON. MR. BENNETT: He's against the sales tax cut. Go tell the people.

HON. MR. WOLFE: How else could we afford to make a reduction in sales tax costing this government .... ?

MR. LEVI: On a point of order, if the minister insists on quoting me, he must quote me correctly.

MR. SPEAKER: Order, please. If there is a correction to be made, it must be made at the conclusion of the speech, hon. member.

[ Page 680 ]

HON. MR. WOLFE: Mr. Speaker, I very carefully recorded what he said. He stated: "There is nothing outstanding in this budget, just sales tax."

HON. MR. BENNETT: That's right. He's against the sales tax cut.

HON. MR. WOLFE: So aside from what his own views are on the reduction of sales tax, the point is this government has been able to afford, through good management, to reduce sales taxes. I repeat: through good management we've been able to afford to reduce, without any time limit....

SOME HON. MEMBERS: Oh, oh! You're just too much!

HON. MR. WOLFE: Sure, we get some benefit from Ottawa....

MR. LEVI: Oh, "some" benefit!

HON. MR. WOLFE: Yes, less than half of it. Ours is a permanent reduction - a temporary windfall from Ottawa, certainly. So there's nothing outstanding, just sales tax, Mr. Speaker.

MR. LEVI: Temporary or permanent?

HON. MR. BENNETT: A temporary measure in Saskatchewan.

HON. MR. WOLFE: A temporary measure -short-term, yes. It's the same thing that was adopted by Saskatchewan without any time limit.

MS. SANFORD: Until the election, right.

HON. MR. WOLFE: Mr. Speaker, they've also criticized the fact that aver the past two years we've had to increase taxes, user fees, et cetera, which were not necessary. We've proven that the alternative to that was massive debt in this province. We'd have incurred an additional $900 million of additional debt. Think of the interest costs loaded on your back, Mr. Member...

HON. MR. BENNETT: On the backs of your children.

HON. MR. WOLFE: ... on the backs of your taxpayers and the future taxpayers of this province. That $900 mil I ion was the alternative.

MR. MACDONALD: And you throw away revenues.

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

HON. MR. WOLFE: They laugh about overexpenditures, Mr. Speaker, and I've stated categorically in this House that this administration will be within 2 per cent of its budget of estimates for the past year -not $200 million, but within 2 per cent. I think that's pretty good fiscal control, Mr. Speaker.

And what do we hear? Their favorite this morning was from the member for Vancouver East (Mr. Macdonald): succession duties, tossing money out the back door. We've removed succession duties for the privileged people of this province. Are they attacking their friends in Saskatchewan?

MR. MACDONALD: We're attacking you.

HON. MR. WOLFE: They're attacking the Premier of Saskatchewan for having taken exactly the sane measures. All provinces in this country are studying the removal of succession duties. They realize what it implies.

HON. MR. BENNETT: What government is in Saskatchewan?

HON. MR. WOLFE: That's a good question. Is that the NDP government of Saskatchewan?

HON. MR. BENNETT: Alan Blakeney.

HON. MR. WOLFE: He has removed the same innocuous tax that was in place in this province. Mr. Speaker, the same member got up here and criticized the amendments before this House to corporation capital taxes. I don't intend to deal with those because we'll debate these later, but what must be said is that the measures adopted in that Act were made necessary - because poor legislation was drafted by that government which was eventually attacked by diligent taxpayers. At the risk of some substantial loss in the revenues of that tax, we've had to make a correction in the bill. So let's place the blame where it really lies, Mr. Speaker -right over there where that tax was organized.

And I'd like to state just one more thing with reference to the remarks this morning. We heard the old cry about royalties on coal. That's a favourite gem, Mr. Speaker -royalties on coal. Just the other day here the member for Delta (Mr. Davidson) laid it out in front of us. He proved to this House that rather than just having a royalty of $1.50 a ton on coal in British Columbia, when you add

[ Page 681 ]

in all of the other taxes which are collected throughout municipalities, provincial taxes, et cetera, the actual rate of tax per ton in British Columbia extracted by governments is over $10 per ton, greater than the province of Alberta, Mr. Speaker.

So, Mr. Speaker, I'd like to wrap this up because I know we want to get on to the business of this House, but I just want to repeat those beautiful words: "Nothing outstanding in this budget." How about the accelerated job development programme, $76 million, which has gone to harness the surplus created by good management - it's as simple as that - to create jobs in British Columbia? How about the small business package? Not a word said about that. This measure is being acclaimed right across Canada. I have a letter here from John Bulloch, of the Federation of Independent Businessmen. I'll read just a sentence or two:

"Your April 10 budget was a real shot in the arm for British Columbia's small business community. It was, in fact, the best small business budget in Canada, a fact we have recognized in our next mandate. Your proposals to eliminate the sales tax for new and repaired production machinery, the new $500,000 exemption limit for the capital tax, the new resources available to upgrade management skills and the pledge to reduce paper and regulatory burdens on small firms have created a new confidence and excitement among our B.C. membership that will pay off in new jobs and improved performance."

Mr. Speaker, that's what small business thinks about this budget, and there's been not a word over there about the small business package.

AN HON. MEMBER: Oh, nonsense.

HON. MR. WOLFE: And lastly, Mr. Speaker, notwithstanding a balanced budget, they say there's nothing outstanding in this budget. How about two ministries now accounting for over $1 billion each - the Ministry of Health and the Ministry of Education? How about increased premium assistance for low-income residents through the medical plan? How about the first grants to independent schools ever in British Columbia?

How about the new SAFER programme aiding 15,000 new households? How about the homeowner grant? For a third consecutive year it will again be increased for our senior citizens who own their own homes.

Mr. Speaker, there's been not a word about the long-term health-care plan that was initiated in January and is bringing significant health-care benefits to British Columbia citizens.

MS. SANFORD: Not true, not true.

HON. MR. WOLFE: Nothing outstanding in the budget? How about the increased financial assistance for young first-time home buyers?

HON. MR. BENNETT: Right on.

HON. MR. WOLFE: Mr. Speaker, how about the revenue-sharing programme? They belittled that here this morning - the revenue-sharing programme that will supply municipalities with increased funds for municipalities to pay for local programmes. And for the first time, Mr. Speaker, the provincial government will pay grants to municipalities equivalent to full general municipal property taxes.

Mr. Speaker, nothing outstanding in this budget? That's unbelievable. You know, there are not many provinces in Canada that can boast of the combination of balanced budgets and social programmes that British Columbia provides along with encouragement to the private sector, particularly small business and individual entrepreneurs. So, Mr. Speaker, let's get on with the business of this House...

HON. MR. BENNETT: They wouldn't dare vote against it.

HON. MR. WOLFE: ...and vote in favour of this budget. It's the best budget British Columbia has ever had. Mr. Speaker, I therefore move that the Speaker do now leave the chair to go into Committee of Supply.

Motion approved on the following division:

[ Page 682 ]

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

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

ESTIMATES: MINISTRY OF FINANCE

On vote 92: minister's office, $105,330.

The House resumed; Mr. Speaker in the chair.

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

Presenting reports.

Mr. Mussallem from the Select Standing Committee on Standing Orders and Private Bills presented the committee's first report, which was read as follows and received:

Mr. Speaker, your Select Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

The standing orders have been complied with relating to the petitions for leave to introduce the following private bills: An Act to Amend the Royal Canadian Legion Act, An Act Respecting the Royal Trust Company and Royal Trust Corporation of Canada, An Act to Amend the Vancouver Charter, and An Act to Incorporate St. Vincent's Hospital at Vancouver, British Columbia.

Your committee recommends that the petitioners be allowed to proceed with the said bills.

All of which is respectfully submitted, G. Mussallem, Chairman.

Hon. Mr. Gardom. moves adjournment of the House.

Motion approved.

The House adjourned at 12:50 p.m.