[ Page 791 ]

CONTENTS

Routine proceedings

Committee of Supply; Ministry of Finance estimates.

On vote 92

Mrs. Dailly –– 791

Mr. Gibson –– 791

Mr. Lauk –– 794

Hon. Mr. Wolfe –– 797

Mr. Levi –– 798

Hon. Mr. Wolfe –– 801

Mr. Nicolson –– 802

Hon. Mr. Wolfe –– 803

Mr. Stupich –– 803

Hon. Mr. Wolfe –– 804

Mr. D'Arcy –– 804

Hon. Mr. Wolfe –– 805

Mr. Mussallem. –– 806

On vote 94.

Mr. Stupich –– 806

Hon. Mr. Wolfe –– 807

On vote 97

Mr. Stupich–– 807

Hon. Mr. Wolfe –– 807

On vote 99.

Mr. Stupich –– 807

Hon. Mr. Wolfe –– 808

On vote 100

Mr. Stupich –– 808

Hon. Mr. Wolfe –– 808

Mr. Macdonald –– 810

On vote 105

Mr. Stupich –– 811

Hon. Mr. Wolfe –– 811

On vote 106

Mr. Stupich –– 811

Hon. Mr. Wolfe –– 812

On vote 107

Mr. Stupich –– 812

Hon. Mr.Wolfe –– 812

Mr. Barrett –– 812

The House met at 8:30 p.m.

MR. COCKE: Mr. Speaker, we've had a supper break. I was just wondering if my point of order had been taken into consideration.

MR. SPEAKER: I think we'll have something to report to you shortly.

Orders of the day.

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

ESTIMATES: MINISTRY OF FINANCE

(continued)

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

MRS. DAILLY: I appreciate the point the Minister of Finance (Hon. Mr. Wolfe) was making this afternoon when he said that his ministry is inundated with requests for exemptions for sales-taxed item I can appreciate that, Mr. Minister, through you, Mr. Chairman.

There is one particular item that I would ask you to give some consideration tog and perhaps inform the House whether there would be a possibility of removing the sales tax from this particular item. The item I am referring to is the Linde oxygen-walker tank.

MR. CHAIRMAN: Hon. member, may I interrupt you for a moment? This afternoon we allowed some discussion on the removal of taxes -where they could be done by regulation, which is under the administrative duties of the Minister of Finance.

MRS. DAILLY: I believe this could be done by regulation.

MR. CHAIRMAN: We will allow this then. Please continue.

MRS. DAILLY: For those who may not be aware, Mr. Chairman, there are some of our citizens -not too many, fortunately - who have a very severe lung disability which requires them to rent these oxygen tanks, which they mu t have with them at all times, with the tubes attached and so on. Without these tanks, these people would be in hospitals, unable to perform their regular work duties. I have met one particular person who is using one of these tanks - I think it takes a tremendous amount of courage to go around with this particular tank. Because of their very severe lung ailment, they are listed as totally disabled.

At the present time they are charged sales tax on the rental of these tanks. If they were in a hospital and classified as orthopedic cripples, they wouldn't be charged for the tank. This is why I am bringing this particularly to the minister's attention, because it doesn't seem too rational a regulation. The regulation eliminates the sales tax if you are in the hospital using these tanks; but if you happen to be able to walk around with the tank, you are still charged the sales tax on the rental.

Because these have to be used all the time, the sales tax per year amounts to $60. The total cost of the rental is $720 - $60 tax. That is really my main question to the minister. Would he give some consideration to this one? Fortunately, I don't think it affects too many of our citizens, but it does seem an unfair burden.

HON. MR. WOLFE: I vaguely recollect this matter. If the member could refresh my memory by sending me that material, I'd be glad to look into it.

MR. GIBSON: I'd like to raise a number of questions with the minister - first of all, in his capacity as director of British Columbia Hydro Corporation.

I want to talk to him about the transit lawsuits in the corporation and the subsidy that is being paid by customers of electricity and natural gas in other parts of the province to look after this transit subsidy. I want to point out to the minister that the policy of his board is in direct conflict with the proposals of the Premier, as given to the First Ministers' Conference in February of this year. I think the Premier should understand that.

HON. MR. BENNETT: The federal government didn't accept it.

MR. GIBSON: 1 think he should give his minister instructions to follow the government of British Columbia policy.

HON. MR. BENNETT: If it had been endorsed, we might. The federal Liberals turned it down.

MR. GIBSON: At page 14 of his brief the Premier makes this point: "Steps should be taken to stress economic efficiency in the operation of Grown corporations. Where such

[ Page 792 ]

corporations are asked to deviate from efficiency norms to pursue social objectives...." I don't blame the Premier for leaving. It's embarrassing to hear the conflict between this and Hydro's policy. "It ."It would be preferable for governments to provide open and direct subsidies to offset costs." Those are good words, Mr. Chairman.

Later on at page 37, the Premier had a topic under policies concerning regulatory intervention; he had a specific section: "Reduce Cross-subsidization. User charges for products and services should be applied %here practicable at a level sufficient to cover incremental cost. Hidden subsidies should be replaced by direct visible support." These are very good principles.

British Columbia Hydro transit division lost roughly $60 million, and probably will do so again this year. The minister was on record last night in replying - I think it was to the hon. member for Nanaimo (Mr. Stupich) ; it may have been the first member for Vancouver East (Mr. Macdonald) as well - that none of this was going to come out of the budget.

HON. MR. WOLFE: I didn't say that.

MR. GIBSON: You said that Hydro, wasn't getting any grant in respect of that.

HON. MR. WOLFE: I said it wasn't in the budget.

MR. GIBSON: And it certainly wasn't in the budget.

MR. CHAIRMAN: Address the Chair, please, hon. members. We cannot have the debate going across the floor.

MR. GIBSON: I can understand why the minister doesn't want it in the budget, because that would add another quarter of I per cent or something to his precious percentage of the gross provincial product that he is spending, putting it in the books rather than off the books in the non-budgetary account. But the fact of the matter is, by charging this cost to the gas and electricity customers of Hydro, he's engaging in the very cross-subsidization that the Premier warned us against. I say that he should assume that social cost in his budget and thereby make it easier for B.C. Hydro to raise money and to get lower interest rates on the money that it borrows, thereby benefiting all British Columbia consumers. The minister, in his capacity as a director of B.C. hydro, should do that which his Premier recommends that all governments in Canada should do.

Next - with respect to his role as a director of British Columbia Hydro Corporation - the board of B.C. Hydro is authorized for up to, I think it is, 15 positions. I want to ask the minister why only four of these are filled. One is filled by a minister of the Crown, and I have no objection to that - he can answer to this Legislature. One is filled by the minister; one is filled by the chairman of the board, Mr. Bonner; one is filled by a retired B.C. Hydro employee; and another one by a lawyer.

Mr. Chairman, I say to you that this is a wildly unrepresentative group of B.C. Hydro's customers. I have no objection to these people being on the board, although I have expressed my views about Mr. Bonner being on the board. But leave that apart. To me, it seems just elementary that some of these 15 authorized positions should be there for a consumer representative, for a small-business representative, for a representative of rural areas, , for a representative of industrial customers, for representatives, in short, of the very many people that require and benefit from and pay for the service of the B.C. Hydro Corporation. it's democratic and it's elementary justice, instead of this most important, largest corporation in British Columbia being run by a small coterie of four people - not a woman on the board - a small coterie of four men who cannot bring to bear the full range of opinion that should be brought to bear on the decisions of a company as important as B.C. Hydro.

I want to go on and ask the minister something about his remarks in the budget concerning public service pensions. Last year in the minister's estimates I asked him if he would undertake an overall study of the status of public service pensions in the province of British Columbia, and report to his House. I would like to know what has been done. I consider the report that was made in this year's budget entirely inadequate. it mentions, for example, that studies are underway to determine the appropriate funding levels for the public service and teachers' pension plans. That's not good enough. We want a bit more data than that.

Last October, the Provincial Secretary (Hon. Mrs. McCarthy) revealed to the province the astonishing information that public service pension plans were underfunded to the extent of $883 million - a tremendously serious shortfall in the actuarial funding of those plans. Let there be no mistake, the pensions are going to be paid one way or another. The government stands behind them. The question

[ Page 793 ]

is: How is it going to be paid for? Is it going to be paid for on a sound, funded basis? Or is it going to be paid for in some other way, out of the general pocket of the taxpayer? The Provincial Secretary, at that time, made a statement that this situation would hopefully be cleared up by 1978. 1 want to ask the minister who has overall charge of these funds: Is it going to be cleared up by 1978? Exactly what is the situation in the pension fund in the province of British Columbia? What's the policy? Is it full funding? Is it pay-as-you-go? Or is it something in between, and if it's something in between, what change is that going to mean in contribution rates? The change in contribution rates that the minister specifies in his budget for this year seems to be relatively slight. The difference between the budget this year and last is not sufficient to make the major adjustments in these plans that are necessary.

I want to ask the minister a particular question of detail. In his budget he states that the teachers' pension fund contribution this year will be $40.6 million. That coincides with what is in the green book of estimates. But he goes on to say that the public service superannuation fund this year will be $30.6 million, when, in fact, what we have in the estimate book is $52 million. I would like him to explain that discrepancy: $30.6 million in the budget, $52 million in the green book of estimates for the public service superannuation plan.

HON. MR. WOLFE: Blue book.

MR. GIBSON: Well, unless I'm color blind, it's a green book. Oh, you have a different book, you have a blue book. Are the numbers the same?

Mr. Chairman, I now want to allude a little bit to a dialogue on paper I have had with the minister in recent days about sales tax on automobiles. It seems to me improper that you should have to pay sales tax more than once on a car. You buy it once, Mr. Member, and then the same car is sold again. Why should sales tax be payable again on that same item?

I'm just asking, Mr. Chairman. Is this something done to keep up the price of new cars for new-car dealers? I don't know. I'm asking that question.

Mr. Chairman, there is another discrimination in favour of car dealers, as you know. If you trade a car in, you only pay sales tax -not purchase tax, Mr. Member, sales tax - on the difference between the price of the car you are buying and the price of the car you are trading in. This too discriminates in favour of car dealers. If I want to do a private deal and sell my car in one place and buy another car in another place, I don't have the advantage of that deduction; both those sales taxes have to be paid. To me, the sales tax is rigged in favour of the car dealers and against the consumers. I'd like to know the minister's explanation of that. Why does tax have to be paid more than once on the same, car when it is resold? Why is there this special treatment for a trade-in allowance which, of course, rebounds mostly to the benefit of the dealers who take most of the trade-ins.

AN HON. MEMBER: You gave this talk last year.

MR. GIBSON: Mr. Member, I didn't give this particular talk last year. Some things I do repeat, but this one I didn't. It is only the best ones I repeat. We'll see if this one stands the test of time for next year. I'm sure it won't be cleared up by next year.

HON. MR. WOLFE: Are you in the market? Can we consider you in the market?

MR. CHAIRMAN: Order, please, hon. members -a little less levity.

MR. GIBSON: As a matter of fact, my car is getting a little old, I'll confess that.

HON. MR. WOLFE: Talk to the man on your left.

MR. GIBSON: Mr. Chairman, I want to say something to the minister about appropriate measures of indexation. As he well knows, this is of tremendous importance to this province. Contracts of all kinds - not only labour-management contracts, but private contracts of various kinds - contain references to indexation for inflation. Pension plans contain that kind of reference.

I read a very interesting talk which was given on March 9 to St. Mary's University by the chairman of the Royal Bank of Canada, Mr. Earle McLaughlin. I don't agree with Mr. McLaughlin on everything he says and does. One of the most foolish statements that has ever been made in Canadian business was his statement that no woman is suitable and available for his board of directors. I gather there are one or two women on that board now. But he had something of intelligence and moment to say in this particular talk. He made the point that:

"Indexation cannot insulate our country

[ Page 794 ]

from all kinds of changes without itself being inflationary and feeding the very vice that it seeks to compensate for. In particular, indexation cannot insulate without being inflationary from two kinds of price changes: those that are imported, and about which we in Canada can do nothing" - the price of bananas or the price of coffee, that kind of thing - "and those things that are relative price changes."

I have in mind here such things as the cost of energy, which has gone up so dramatically in recent years.

"The signal which the marketplace is sending to the world, in - terms of such things as energy price changes, is conservation - try and cut back on your consumption and be more economical in the use of this rare good - and indexation cannot insulate the world from that economic fact."

If we try and do it, it leads us into error.

I had some correspondence with Mr. McLaughlin and asked for his estimate of what was, in fact, what he calls "pure domestic inflation." That is, inflation which is adjusted to take out the fact of foreign price changes, which we in Canada cannot control, and relative price changes, as opposed to the general drift of prices upwards. His estimate, which may or may not be right, for the year 1977, shows a total increase in the consumer price index of about 8 per cent, a strictly domestic inflation of 6.5 per cent - which is the GNP deflater with the import prices removed - and what he refers to as "true domestic inflation" of 4.3 per cent. In other words, true domestic inflation is only about 54 per cent of the nominal consumer price index. As I say, these figures may or may not be exactly the ones that ought to be used but the principle is there.

I would request the minister to make a study of this and, at some time, make a policy statement on behalf of the government of British Columbia. Because, as I say, it is so very important in the very many private and public relationships in this province that are in one way or another governed by indexation. It is simply a fact of life that such things as the falling dollar, for example, are a message to us in Canada that to some extent we have to change our way of living. If we try and compensate for that by indexing the entire amount we're going to get back into exactly the problems we started out with.

Mr. Chairman, that is the essence of my representations to the minister at this time.

MR. LAUK: Mr. Chairman, yesterday I asked the minister about Mr. Charles Brazier, who sits on the board of Hydro. I asked him specifically what company boards he sits on as a director, other than that of Hydro, and secondly, what contracts of supply or service were let by Hydro to these companies on whose boards he sits as a director during his term of office as a director of Hydro.

The minister filed this afternoon in the House a copy of the list of directorships of Mr. Brazier, which I now have. There is no indication about the contracts that were let to any of these by Hydro. I wish the minister would stop wasting the time of the committee. Are you prepared to answer?

HON. MR. WOLFE: Yes.

MR. LAUK: Thank you.

HON. MR. WOLFE: Mr. Chairman, I must apologize to the member; it was an oversight. I've supplied the committee with a list of the directorships as requested, and at this stage I am advised that there are no companies listed here who have contracts with Hydro.

MR. LAUK: At any time?

HON. MR. WOLFE: Well, if you're covering an extended period of time....

MR. LAUK: Mr. Chairman, what concerns me is that....

HON. MR. WOLFE: You didn't indicate a period of time.

MR. LAUK: Well, I said during his term of office, so he's been sitting on the board since, I'm told, January, 1976. I'm also told that there were outstanding contracts with one company, and I'll just mention that to you and make a point. Now I'm sure it's not going to bring down the government or grind B.C. Hydro to a halt; I'm sure you're relieved. But, Mr. Chairman, this is the kind of practice that I feel we should avoid. It's a shabby way to run Grown corporations.

I wish in no way to place any criticism on the shoulders of Mr. Brazier, whose reputation within his profession is above reproach. But the point is, Mr. Chairman, Mr. Brazier is well known to be one of those individuals, among others in the city of Vancouver and in the major cities of the country, who sit on national boards and boards of various major companies throughout Canada It is, of course, important that we attract this kind of person

[ Page 795 ]

to Crown corporations, but it is equally as important that we be impeccable about the kind of conflict-of-interest situations that may arise when we appoint such persons, who sit on a myriad of others boards of major corporations.

Now Mr. Brazier retired from the board of Foundation Western Ltd., on whose board he sat between 1972 and 1975; he ceased to be a director as of January 14,1976, of Foundation Western Ltd. Now that's fine - retiring from that board to go on Hydro. But what on earth happened? A junior partner in his law firm takes his place on that board. Now that just doesn't wash. David Johnston, another person of impeccable record within his profession, but a junior partner of Mr. Brazier....

Interjection.

MR. LAUK: No, generally; a first-class type. Oh, of course, I've no criticism of them as individuals within their professions and within their activities in public life, but that's not the point. The responsibility that we have - and that government, and particularly the minister responsible for this corporation have - is to ensure that this kind of sloppiness does not take place. No one can tell me that Mr. Brazier does not have apparent influence on his junior partner, who took his place on Foundation Western, a company which has had a contractual relationship with Hydro, on whose board Mr. Brazier now sits.

Now it seem to me that that is sloppy. And people say: "Well, are you demanding a bit more than we should demand?" I think we're demanding a minimum when we say: "Could you keep at arm's length whatever former associations you've had with other companies? Keep it clean." Now I have no evidence whatsoever, Mr. Chairman, that Foundation Western has benefited by Mr. Brazier's presence on the board. I have no evidence of that. But surely on the face of it, the public is entitled to have clear evidence that there can be no improper advantage to Foundation Western. Now that's a point that I think should be made.

Now here's another point, just to give you some background on the opposition's critique of the board of Hydro. Mr. Chairman, last year I mentioned that Mr. Hungerford, a member of the board of Hydro, was also a member on Westcoast Transmission. I pointed out the very close contractual and other business relationship between B.C. hydro and Westcoast Transmission.

I got an absolute stone wall when I raised this question last year. Without any announcement whatsoever, I read in the latest edition of Hydro's report that Mr. Hungerford had resigned earlier in the year before his term was up. Now if the government is going to respond to opposition criticism, it's their responsibility to make it clear that they have. Nobody in the world knew that Mr. Hungerford resigned. I'm assuming that he resigned because of the conflict-of-interest situation. I know that it's regrettable to lose people of great competence when they aren't interlocking in various other boards, but we have a tremendous responsibility, it seems to me, to protect the integrity of the Crown corporation against any accusation that unfair advantage has been given to private corporations in relation to it.

Mr. Chairman, on April 10,1978, 1 sent a letter to the minister. I stated:

"Please find enclosed a copy of a letter from a person named ... a diabetic. The letter speaks for itself and requests reductions in sales tax with respect to those essentials that a diabetic must use on a continuous basis. The letter, in my view, is well thought out, represents a legitimate area of concern. This is therefore to request the Minister of Finance during this session seriously consider the proposal and reduce sales tax appropriately.

"May I have your views on this matter before your estimates as I'll be meeting with the person named and others of the Vancouver and district branch, Canadian Diabetic Association, in due course."

Now I have not as yet - although it was only on April 10 that I sent this letter - received a reply. I think for the benefit of the minister, and to refresh his memory and the committee's, I'll just read portions of this letter, which I think sets out really well the problem that diabetics have with respect to the extra cost imposed by the sales tax. The letter is addressed to myself:

"Two years ago, March, 1976, a brief containing the following proposal was presented to the government of British Columbia by the B.C. division of the Canadian Diabetic Association: 'That the provincial sales tax be removed on the purchase of insulin needles, syringes and testing supplies used in the control of diabetes.' To date, the only action taken by the government is to increase the sales tax, and that was at a time when the sales tax was at 7 per cent.

"Taxation of these items was not a national one even in 1976, according to a

[ Page 796 ]

research study conducted by a person named for the Canadian Diabetic Association. Alberta, Yukon and the Northwest Territories have no tax. The Canadian precedent has been set by Saskatchewan, Manitoba and Newfoundland. In these provinces, insulin, needles, syringes and testing materials have been specifically exempt from sales tax. Surely the province of British Columbia should be able to follow their example and remove from diabetic equipment a tax which adversely affects between 50,000 and 75,000 members of the provincial population.

"Follow-up letters in May, 1976, from the Canadian Diabetic Association to both the Minister of Health and the Minister of Human Resources have elicited no positive result. Mr. McClelland's reply on June 1,1976, states: 'I can offer no immediate action as far as this request is concerned.' Two days later, Mr. Vander Zalm wrote: 'I feel that this is a matter which must be discussed with the Hon. Mr. McClelland.' Subsequent correspondence with Mr. McClelland indicated that the matter was in committee.

"With the advent of Pharmacare, Mr. Vander Zalm assured the people of the province that those suffering from chronic conditions such as diabetes would have the f financial. burden of their condition alleviated. He specified coverage for insulin needles and syringes, which applies to approximately 35 per cent of the diabetic population. Testing materials, which are necessary to all diabetics, were not mentioned and are not included in Pharmacare coverage. In theory, the plan sounds excellent. In practice, the only persons with full coverage are those on old age pension, disability pension and social assistance. The remaining population is subjected to $100 deductible per family unit, whether that family unit consists of one or 23 members. In addition, the complicated, inconvenient and inefficient means of claiming Pharmacare coverage will discourage a large percentage of the population from even sending in a claim.

"At this point, I feel as one crying in the wilderness. I can no longer sit back and wait for someone else to rectify a situation which I believe to be unjust. This month represents to me a quarter of a century of living with diabetes, controlled by an estimated 10,000 injections of insulin and 15,000 urine tests for glucose and acetyl. My insulin would be a useless commodity without the needles and syringes with which to inject it. As a brittle, juvenile diabetic, my glucose level must be continually assessed to regulate the dosage of my insulin. I'm one of the fortunate diabetics. I am not yet blind, nor am I suffering from renal failure. I do have other complications, but thus far have been able to function as a contributing member of society. Others are not so fortunate, and the financial burden for their acute care falls on the government of British Columbia.

"To reiterate, insulin needles and syringes for 35 per cent of the diabetic population and testing materials for all diabetics are a necessity to life and thus should not be classified along with cigarettes and liquor as luxury items, which are subject to the social services tax.

Hopefully, in the past two years Mr. Vander Zalm has had the opportunity to give the proposal for the removal of sales tax and diabetic supplies more than a cursory perusal and discussed the same with Mr. McClelland. Perhaps by this time, Mr. McClelland has given some thought to how far exemptions should extend. Unfortunately, their political history appears to offer no guarantee that this will be the case. Therefore, I'm respectfully requesting, Mr. Lauk, your assurance that this matter not be overlooked or adjourned when the House sits next month.

"Yours sincerely,

Janice M. Richardson,

Charter Member, Vancouver and district branch,

Canadian Diabetic Association."

Now from my own investigations, Mr. Chairman, with respect to the sales tax, we're talking here not about the casual purchase of materials for testing and the materials for needles and syringes. We're talking about what could exceed hundreds of dollars a month. We're talking about a very expensive amount of equipment that is needed by diabetics. The costs that are involved with these item towards the end of the year are quite formidable, because it's very much a part of their daily lives. It is not a casual or occasional thing. It's at least every day, sometimes several times a day, depending on the insulin programme the diabetics are using. I think it's clear that the quickest decision can be made. As a revenue to the

[ Page 797 ]

province, if it's not substantial, then it is not needed; if substantial, then it works that very heavy burden on the 75,000 diabetics who are the only ones who have to bear that burden. In other words, here is a clear policy area, Mr. Chairman, that the minister must, I say, act on as quickly as possible - that is to say, right now. I'm sure that it will be applauded throughout the province as an act of generosity on the part of the government, but also as an act of justice, to alleviate this more than a nuisance to diabetics throughout the province.

You know, diabetes does not have any class distinctions, nor is there a partisan stripe attached to those who may have it. I think that there's no need to fear that these diabetics are all New Democrats who would benefit from the generosity of the government. I think, Mr. Chairman, that that is my point.

I would ask the minister to comment on whether or not he will look more closely at the Hydro board, with respect to conflict-of-interest situations - emphasizing, of course, that I make no personal attack on the integrity of Mr. Brazier or Mr. Johnston, whom I know very well, and whom I think are of the highest integrity. But the people are entitled to have it clear in their own minds that no possibility of favouritism. in the letting of Hydro contracts exists.

Secondly, the minister now has before him the opportunity to be a hero - which I will applaud and support - in making a policy decision that sales tax will be lifted forever and all time from these materials that are needed by our diabetics in the province of British Columbia.

HON. MR. WOLFE: With regard to the matter of diabetic needles and syringes, I wonder if the member is aware that these are deductible under Pharmacare...

AN HON. MEMBER: The new universal

Pharmacare.

HON. MR. WOLFE: ... the new universal Pharmacare, Mr. Member, that previously was not available to persons under 65 and now would certainly be available to those persons, up to the extent of $100 a year. Are you aware of that, Mr. Member?

MR. LAUK: No.

HON. MR. WOLFE: Anyway, the new universal Pharmacare programme would take care of the very instance you are raising.

MR. LAUK: But you didn't hear the letter. She dealt with that.

HON. MR. WOLFE: What is the date of the letter?

MR. LAUK: April, 1978. She dealt with that in her letter. I could read it for you.

MR. CHAIRMAN: Order, please. You must go through the Chair.

HON. MR. WOLFE: I am advising you that the diabetic needles and syringes are available for claim under the Pharmacare program .

MR. LAUK: Mr. Chairman, I'm sorry that the minister missed my point, and the point that was set out in the letter very carefully. I'll just go through it again.

HON. MR. WOLFE: You're saying there should be no tax on it.

MR. LAUK: That's right - no sales tax. Now she says: "With the advent of Pharmacare" -and she's referring to this - "Mr. Vander Zalm assured the people of the province that those suffering from chronic conditions such as diabetes would have the financial burden of their condition alleviated. He specified coverage for insulin needles and syringes, which applies to approximately 35 per cent of the diabetic population. Testing materials, which are necessary to all diabetics, were not mentioned and are not included in Pharmacare coverage."

Now testing materials, in many cases, amount to more than the needles and syringes.

HON. MR. WOLFE: How much?

MR. LAUK: She didn't mention figures.

HON. MR. WOLFE: About $10 or $20 a year.

MR. LAUK: Oh, no, it's more than that.

MR. CHAIRMAN: Order, please.

MR. LAUK: About $10 or $20 a year? I'm told it's more.

HON. MR. WOLFE: No.

MR. LAUK: But I think her letter succinctly sets out an argument for removing the sales tax altogether from these things, because the revenue back to the government is not, I'm convinced, so substantial that we can't do

[ Page 798 ]

this on behalf of the diabetics.

HON. MR. WOLFE: Mr. Chairman, I appreciate hearing this information, but it would appear that if he's referring now to testing materials, I'm advised that they wouldn't amount to more than $10 to $20 a year, and the tax that he's making a case for being removed would therefore be 50 cents to a dollar per year.

MR. LAUK: Well, if that's the tax, but I'm told that's not the case.

MR. LEVI: I wonder if I could draw the minister's attention to the public accounts for 1976-77. On C11 there is a special warrant, No. 4, which deals with the agreements for the leasing of the ferries. At that time a special warrant for $1.5 million....

HON. MR. WOLFE: What page?

MR. LEVI: On C11. That's before it gets to be numbered.

That payment, presumably, relates to the bi-annual. payments which have to be made as a result of the ferries and then the subsequent leasing back. I'm also informed that the negotiations which took place with respect to the sale of the ferries and the leasing back were handled by the Ministry of Finance. I just wanted to state that, Mr. Chairman, so that I am under the right minister, because I have some questions I want to ask.

In 1976 'the firm of McLeod, Young and Weir wrote to the Ferry Corporation, and sent five copies of a submission with respect to lease-financing ferry boats for the B.C. Ferries. Part of their submission, on page 24, relates to expenses: "B.C. Ferries would be expected to pay the expenses of arranging the transaction, other than the lessor's in-house legal and out-of-pocket expenses. They would consist primarily of...." They come to a total amount of $36,500. I'd like to ask the minister - if he has still got his public accounts in front of him.... On page E246 of the estimate book, about halfway down the page is an item under McLeod, Young, Weir and Company Ltd. - $85,000. When the minister gets up to answer some of the questions, perhaps he could tell me if he has any idea what this $85,000 was. Was it related to the expenses that they expected to incur in the negotiations for the ferries? They set it out for $36,500, but there is an item of $85,000.

The other thing I want to ask the minister to comment on is that the total sale of the ferries came to $45 million. Subsequently, the companies that bought the ferries.... McLeod, Young and Weir handled two of the ferries. McLeod, Young and Weir dealt with the Queen of Coquitlam, which they bought in July, 1976; then they did the Queen of Alberni in July, 1976. The Canada Trust Company - the Montreal Trust and the Canadian Trust Company -purchased the third one for an approximate value of $45 million.

I'm informed by people in the financial community that it is usual to pay a commission of 0.5 per cent to I per cent of the value of the total transaction to the people involved, which would, depending on what the commission was, take it to somewhere between approximately $200,000 to $450,000. Who got the commission? First of all, was there a commission paid, and if there was, who got the commission? Did Mr-Leod Weir get it? Is the extra $49,000 in the payment in public accounts related to their end of the commission? Was any commission paid? Apparently that's the usual practice in such purchases. Perhaps the minister might like to comment on that.

Also in public accounts, on page E213, there is a company called BritCan Consulting Ltd. BritCan Consulting Ltd. received $34,171. BritCan Consulting Ltd. is a company that was formed, I think, in 1976. One of the shareholders is a man called Chestnut. Mr. Glen Chestnut was formerly in charge of the MacMillan Bloedel Canadian Steamships Company, and is a man who is very well experienced in the whole area of shipping and transportation.

HON. MR. WOLFE: I was only going to interrupt to suggest that I'd be happy to answer these questions, but I'm wondering if it wouldn't be more readily handled through putting them on the order paper. I'm sure I could not answer those specific questions right offhand.

MR. LEVI: Well, let me just make my point. We are talking now about a $45 million sale of three ferry boats. I understand that the whole deal was arranged and negotiated by the Ministry of Finance. This is not some small deal. We are talking about $45 million. If the minister, sometime down the road during the course of this session wants to table a number of answers, that's fine, but I also want to make some points.

I have one other payment I want to draw to his attention. BritCan received $34,171. There is also another payment that was made to Mr. R.G. Chestnut for $19,074. We are now in the same fiscal year, 1976-77. 1 mentioned before

[ Page 799 ]

that the BritCan Company is noted by the registrar of companies and that Mr. Glen Chestnut is one of the directors. Now for my question to the minister; he can answer it now or later on. As I understand it, Mr. Chestnut was working for. the Ministry of Transport and Communications at the same time his firm received $34,000, the firm in which he is a principle. Now to BritCan. Was BritCan involved in the negotiations for the sale of the ferries? So there are a number of questions. Perhaps we'll go from the top again and get the minister so he has them in order.

First of all, I presume- because I've gone on and he hasn't stood up on a point of order that I'm in the right ministry. I'm okay there. Right. Now, I want to know about whether the usual practice of paying a commission on such a large transaction was followed. If that was the case, who received the commission and how much? Is it McLeod Young Weir, because McLeod Young Weir have a payment of some $85,000, and in their original submission to the Ferry Corporation they suggested that their expenses would come to about $36,000. 1 would like to know about the role of BritCan, who received $34,000, and whether they had any role at all in negotiating this contract.

Then there seems to be a problem that Mr. Chestnut, who was in receipt of a salary under the Ministry of Transport and Communications, I presume, because I think he was hired as a consultant, was also a principle in the company. That's where we are with that, Mr. Minister. I would appreciate it if we- could get some clarification on that. You know very well what the position of this side was in respect to the ferry sale and leasing back. I'm not going to go into that. That's very adequately stated in Hansard in 1976 and again last year.

What I would like to do now is to move to some questions in respect to the System Corporation, which I didn't cover last night. I would like to do it now. I didn't get an opportunity to ask the minister about the manager of the corporation. I would like to know, first of all, if Mr. Alexander was selected as a result of an advertisement, and then presumably on a short list, and then was accepted. Then I want to know if it is a fact that he worked previously for the Ontario government. I would like to know if that's a fact that he did work for the Ontario government.

I would presume that we're probably dealing with Woods Gordon in respect to the firm that was hired to look for somebody to be the manager of the British Columbia Systems Corporation. If that is the case, can the minister tell the House whether in looking and evaluating Mr. Alexander's background, there is any information as to his role in the setting up of the Ontario government's computer agency? The Ontario government, at the time that Mr. Alexander, I believe, worked for them, had an agency.

Why I'm'asking this is because yesterday, when we were discussing the System Corporation, it was my contention, and has been f or a couple of years, that the corporation was set up in a very quick manner. It sought to integrate all of the computer services of the government in such a rush, and I think it was a rush. Then I indicated last year that we could not accept the minister's suggestion that this would come in at about $22 million. It didn't; it cane in at almost $30 million. This year we're looking at $32 mil I ion.

HON. MR. WOLFE: Including indirect costs.

MR. LEVI: Well, you mention the indirect costs.

MR. CHAIRMAN: Order, please, hon. member. I must ask the minister to refrain until such time as the Chair recognizes the minister. I appreciate it's easier if you have these debates across the floor but it does make it very difficult for Hansard and for me to maintain some order. Please continue.

MR. LEVI: The important thing is that up until now, we have no accurate indication from anyone about just what this monstrosity is going to cost. All we know is that it's costing more and more money. We were told in the introduction of the bill that this was going to save money.

Interjection.

MR. LEVI: Yes, well, I'm very proud of that one. I hope you're proud of the $100 million underspending - taking it away from people. Now let's go to Mr. Alexander.

Interjections.

MR. LEVI: Oh, we'll deal with you tomorrow about your little trip up to the north. You took good government money, went up north and came back, having told them exactly what he told them here. My, my, that's a very sound expenditure of public money, that is.

The headline says: "Ontario Kills Own Computer Agency After Losing $2 Million in

[ Page 800 ]

Five Years." "After losing $2 million in the past five years, the Ontario government has quietly killed an elaborate programme to improve efficiency by centralizing computer services." Now that sounds very familiar. The minister last year used almost the same words: "We're going to set up this corporation to centralize and improve the computer services." Let's remember that the man who is presently directing the B.C. Systems Corporation is the person who came from Ontario.

Now I asked the minister before if he is aware of any information that might have been contained in the management consultants' report regarding the operation of the Ontario system. Presumably when management consultants go out and interview people, they also check back. They check back into the background to see what kind of work they've been doing in the system. We have it here, and the minister has the information in front of him.

He talks about the computer system established in 1973, after being recommended by the committee on government productivity: "A blue-ribbon panel of top civil servants and business leaders." Now they even went about it differently than this government. They didn't use any blue-ribbon business leaders, they just used some top civil servants. It was officially disbanded three weeks ago on April Fools' Day. "In proposing the programme, the productivity committee said the creation of a single agency would enable the government to take advantage of economies of scale and provide better computer services to the programme managers."

Now this particular news report has got to be of very significant import to what's going on in this province. The government has set out to follow exactly the same mechanism as Ontario. In fact there has to be some of the Ontario influence, because we've hired one of their key people - perhaps their key person. The government decided three weeks ago to scrap the whole system. Now it would seem that because the minister has not taken the private sector into his confidence, we have to rely on the observations that they make outside of the system as to exactly what is going on.

Now I'd like the minister to tell me whether in the process of setting up this system there is a cross-benefit analysis going on. Has the government started such a process? Has the corporation started such a process, so that we can adequately understand exactly what is going on with this very huge expenditure of money? We've not had a great deal of information, and we need it. But certainly in the light of the Ontario experience, I think the minister has to be somewhat alarmed that heading up the system in this province is the person who headed up the system in the other province.

Again I ask you: when it came to the selection of this man, were they made aware of his role in that operation, and what kind of information was forthcoming about the operation? Presumably they would have to go to these people.

I'd like to just deal with one other area, and then I'm prepared to sit down. Certainly I don't think we've asked him this year, but over the past two years when we've dealt with his estimates, we have talked about the savings and trust organizations that the previous government set up. We talked about the report; we asked if he would be prepared to table the report. He has persistently argued that he was not prepared to table the report. I'll ask him now if he's prepared to make the report available to the House, because it is important that we know just what kind of work went into that kind of operation and into developing what subsequently became a piece of legislation.

The reason I raise this is because the minister in some of his remarks in answering some questions on a range of topics, particularly in relation to small businesses, has pointed out that in his own budget speech there are provisions for the small business community. Now I want to ask the minister whether at any time in the course of his ministerial duties he has ever had the opportunity to talk to the Minister of Finance in Alberta, or to any of the ministers in Alberta, and discuss the Alberta treasury branch's operations. The treasury branch's operation in Alberta really is that the Alberta government, in a small way, is in the banking business, has been since 1938, continues to be and is expanding that role.

They're in it for a number of reasons. They initially went into it, of course, in the '30s because some of the banks had closed down their operations and there was nothing available to people. So they set up some of these operations, which operated on deposits and loans made available to people who needed loans. At the present time in the treasury branch's operation in Alberta - and the latest report I have is from March 31,1977 - they have something like 51,000 borrowers, they are looking at over $1 billion of deposits, and they're making a very strong focus in the area of assisting small business people.

I would remind the minister that the legislation in relation to the Savings and Trust Corporation of 1975 envisages that thing particularly. They in Alberta do it through

[ Page 801 ]

the treasury branches. Now there is no way that we on this side can accept the proposition from the minister that because you somehow put - and he suggests $10 million in the special funds, in terms of small business - that amount through the government bureaucracy, this is going to be administered in such a way that it's going to make money available to small-business people. That has not happened up until now.

Has the government looked at a vehicle - a viable vehicle, not a grant-making vehicle in the budget every year - such as the Alberta treasury branch's operation? After all, if there's a bastion of free enterprise and conservatism anywhere in Canada, it's in Alberta. And yet, that government has continued to expand the treasury branch operation, particularly over the last six years - significantly expanded - and they have gone into the whole business of direct loans to business people. They have even set up a 15-year mobile home program at reasonable rates in terms of the loan situation. They have looked at the mortgage situation. All of these problem are problems that are here in British Columbia, and most of the people who are involved in those problems in this province have no access to the money market because they're not able to qualify at the banks or even the credit unions. But it seems that in Alberta the operation is a viable one. They have something like $250,000 deposited.

The Premier shakes his head. Well, he's the kingpin of free enterprise. I gather that Peter the Red in Alberta is also very much interested in that kind of thing, and yet they've been prepared to develop this. We're not suggesting that the Savings and Trust Corporation was a unique piece of legislation. It was unique for this province, in an attempt to do something in an organized way, to make money available.

Now I ask the minister: at the present time - and I don't really want him to hide behind the idea that that's a policy question, and we can't answer it - is the government looking at some kind of reasonable vehicle for making funds available, particularly to small business people? And I don't mean on a grant basis and I don't mean through the B.C. Development Corporation, because that's a very, very small operation. Or are we just going to hobble along in the same old way? Every year we'll take a look at how much we can put into the fund. We really touch less than 2 per cent through the BCDC, in terms of what kind of investment goes on in this province. So we're not going to be looking at very much help for people who need the kind of assistance that is made available in Alberta through the treasury branches.

I've covered three areas, Mr. Chairman. I've covered the ferry area, I've covered the B.C. Systems Corporation and I've covered the treasury branches. I saw the minister writing, so I'll sit down and give him an opportunity to answer some questions.

HON. MR. WOLFE: Mr. Chairman, I indicated earlier, when the member was asking questions regarding the transactions surrounding the sale of the ferries, that these might be better asked on the order paper. He asked whether there was a commission paid on these transactions and how much and who received the commissions. I will 1 have to get that information and report back. Perhaps he could put the question on the order paper in due course.

AN HON. MEMBER: Report back tomorrow.

HON. MR. WOLFE: I would be glad to, Mr. Member.

MR. LEVI: Would you do that? That would be better.

HON. MR. WOLFE: Incidentally, I might say that what is of ten overlooked in terms of the transaction of the ferries - and constant reference has been made to the fact that sale of assets is to produce surplus - is the fact that it was a very profitable economic transaction. This is really not emphasized, because the interest rate on the lease-back was something just over 7 per cent. I would like to have anybody stand up here and tell me they wouldn't be happy to enter into a long-term transaction to lease one of those ferries at 7 per cent.

So, Mr. Chairman, there were questions asked about the manager of the Systems Corporation. Certainly this position was well advertised and developed through a short list, as per usual, through an agency. He was a past director of computer services in the Ontario government. And yes, I know and have met many times the Provincial Treasurer for Alberta, Mr. Leitch, and I'm quite aware of their treasury branch system there.

MR. GIBSON: Are you going to write me a letter about my questions?

MR. LEVI: He's an absolute mine of information. You ask him a question; he tells you, "yes, I've spoken to Mr. Leitch, " and "yes, I know what the treasury branch is, " and

[ Page 802 ]

that's it.

Just sit down a minute; I'll get around to it in a minute. You know, one would think that he would take the opportunity....

HON. MR. WOLFE: You asked me ridiculous questions two years ago and expect me to come up with the answers right here?

MR. LEVI: You've got a deputy minister alongside you - what are you talking about? He was there two years ago, if you weren't. You mean you can't tell me if commission was paid on a $45 million deal? I find that absolutely amazing. You were asked last year about some of these things.

HON MR. WOLFE: That's right. I told you I'd get you the information. Now just be patient.

MR. LEVI: Okay. As long as you bring it back to the House, that's fine. I do not have to put it on the order paper.

But I'm talking about the treasury. I thought you would have taken the opportunity to tell us a little bit about what you think we might be able to develop in this province on a more permanent basis to aid people who need those kinds of loans, particularly small businessmen. All he tells us is that he had a chat with Mr. Leitch. That's all he did.

In respect to the Systems Corporation, I asked him many questions, but a specific one was: Do they have an ongoing cost-benefit analysis going on? Have they got such a study? Surely they have to be alarmed about what has happened in Alberta. Have they set up or have they required that there be a cost-benefit analysis done as they go along? After all, they are pooling enormous amounts of assets there in terms of all of the equipment and they are hiring a lot of people. We would like to know what some of the goals are that have been worked out beyond what we were told last year in the debate; that's all we want to know. Or are we going to have to wait all the way until next year until we get an annual report? I'm suggesting to the minister that we are signaling, in a very real way, a danger area in terms of the operation of the Systems Corporation in view of what has happened in Ontario.

Interjection.

MR. LEVI: He can't just shrug his shoulders. That's a very serious problem. They spent some five years looking at this thing. They finally decided to wrap it up. One of the key architects of that thing is now in this province running the system that the minister is responsible for, Mr. Chairman.

HON. MR. McGEER: That's ridiculous.

MR. CHAIRMAN: Hon. member, I believe this point has been well canvassed.

MR. LEVI: Why? Is it because the Minister of Education (Hon. Mr. McGeer) says it's ridiculous? He just came into the House. He doesn't know what has been going on and all he can say is: "Ridiculous."

Interjections.

HON. MR. McGEER: You don't understand what they did. You should read the story.

MR. LEVI: All we want to know from the minister is what are they doing to safeguard the system here. And I've asked him about cost-benefit analysis. Is that something that is too difficult? He's on the board. Has that been discussed? Re is obviously aware of what's gone on in Ontario. Was that discussed? Surely you have to show some concern about that. Have you in fact introduced some mechanism that will offset some of the problems they have had?

We went through this in the debate last year about the problems of these central operations when the federal government got out of it, and the problems they were having in Ontario. They were not being competitive. That's a big issue here too in terms of whether this operation is going to be competitive. It was indicated last night that they are not going to be competitive in the beginning. The experience in Ontario is that they were never competitive. Are we going to be facing the same thing?

MR. NICOLSON: Mr. Chairman, 1 would hope there would be some answers to these things. I think the minister might count himself a little bit lucky that some of these questions are being raised at this hour of the evening. I think the member for Vancouver-Burrard (Mr. Levi) has raised three very important issues and questions.

I'd like to take the minister back to last evening. Yesterday afternoon I asked a question about a little bit more detailed breakdown on payments. And last evening, between the Member for Nanaimo (Mr. Stupich) and the minister, we learned a great deal about sources of revenue. I'm particularly interested in a little further breakdown of an item labelled in the revenues, $50.8 million

[ Page 803 ]

under the title of "Other federal payments." last evening the minister gave a breakdown: $34.8 million hospital insurance, diagnostic services Aet, et cetera. Toward the finish he said: .. and Pacific Rim National Park recreation and conservation programmes and salmon enhancement bring the total up to $50.8 million, " which is approximately $2.6 million. Could I ask the minister for a breakdown of how much is for salmonid enhancement, how much for Pacific Rim National Park, and if there are any breakdowns on recreation and conservation programmes?

HON. MR. WOLFE: Mr. Chairman, the remainder of the amounts I was describing last night include Pacific Rim National Park, $659,000; salmonid enhancement programme, $1,765, 000; and provincial emergency programme, $160,000. I believe those were the items I summarized.

AN HON. MEMBER: That's PEP.

HON. MR. WOLFE: I'd like to refer to two or three questions raised by the Liberal leader, who, I notice is back in the House.

MR. GIBSON: You said you were nearly through.

HON. MR. WOLFE: Pardon me, I didn't see you there earlier. You seem to be sitting down low in your seat.

Among other matters, you referred to transit losses in Hydro and the fact, once again, that this, as I indicated earlier, is not provided for in the upcoming year's estimates.

As the member well knows, there is a programme under study for an urban transportation authority. Reference was made to this in the throne speech, and also it's referred to in the annual report of B.C. Hydro. Of course, when that is forthcoming it will likely have some type of revenue impact. But it is not provided for in the budget or in the estimates for the current year.

You referred to Hydro and the fact that it has four board members and, under the Act, there is provision for further members. What were the government's plans in this regard? I think the Premier has stated previously, and would reiterate, I'm sure, that further board members will be appointed. Naturally we will take some of your suggestions into consideration, but he has announced that these appointments will be made.

You referred to the overall problem of the superannuation and pension funds. This is a very large subject which concerns us all. I think you had some difficulty reconciling figures in the budget speech, page 37, to the estimates. As we read them, they're the same figures. There's a figure of $30.6 million for the public service superannuation fund -that's the government contribution, the employers' contribution - and for teachers' pension fund, $40.6 million. That's on page 37 of the budget speech. You will find those two numbers in the blue estimate book, vote 227 and vote 61.

MR. GIBSON: But vote 227 is $51 million.

HON. MR. WOLFE: No.

MR. GIBSON: Yes, it is.

HON. MR. WOLFE: That's $51 million in total, but if you look into the detail on page H290 you'll see government contributions to provincial government pension plans, $30.6 million. Okay?

MR. NICOLSON: Just one other thing. I thank the minister for giving those figures. Could he indicate whether these are new revenues or whether they're up from last year and, if so, what they were last year?

HON. MR. WOLFE: Mr. Chairman, I don't have that answer right in front of me. I'll get it for you, though.

MR. STUPICH: Mr. Chairman, a couple of years ago I asked the minister about the B.C. Savings and Trust report. Quoting from Hansard, April 27,1976, at that time the minister replied: "I have not read the report. As recently as last week I read one section of it. I cannot indicate at this stage whether, in fact, we will be prepared to file the report, because I don't know what's contained within the report. The task force report is tremendously large - about two feet deep." I wonder whether the minister has had time to get beyond the first section, and whether or not we- might be advised whether the House will have access to that report.

MR. CHAIRMAN: Thank you, hon. member. The question was asked earlier, or very close to it.

MR. STUPICH: I thought it was a report that the hon member....

MR. CHAIRMAN: Perhaps that's correct.

MR. STUPICH: Yes, I don't think it was the B.C. Savings and Trust report.

[ Page 804 ]

Shall I repeat the question, Mr. Chairman? Apparently the minister didn't hear it. I wonder whether the minister has had time in the almost two years that have elapsed since April 27,1976, to read beyond the first section. Secondly, will he make the report available to the House?

Well, Mr. Chairman, we'll just let the record show that the minister didn't even nod or shake his head, let alone get up to answer the question.

HON. MR. WOLFE: I just wanted to be sure, Mr. Chairman, that he was through with the question.

This question was raised last year, as the member quite correctly indicated.

MR. STUPICH: Two years ago. Not last year.

HON. MR. WOLFE: Two years ago? In any event, I think I answered the question at the time. The report, as I recall, contains information received on a confidential basis by the developers of the report from other provinces and corporations, which would make it inadvisable to file. We have developed and used certain information from the report, but not in the broad sense.

MR. STUPICH: Mr. Chairman, the minister anticipated my next question, and that was to wonder whether or not the government was making use of any of the recommendations.

HON. MR. WOLFE: I answered that last year.

MR. STUPICH: I don't recall it from last year. I do have the Hansard from two years ago, but....

HON. MR. WOLFE: I did.

MR. STUPICH: Okay. But, Mr. Chairman, what I would like to know now is whether the minister can tell us any more about the sections of the report that he is using. Specifically, what recommendations has he picked out of the report?

HON. MR. WOLFE: Mr. Chairman, primarily those surrounding the cash management recommendations and ideas expressed, not all of which could be adapted into our system. Also, there had been considerable progress made in this area prior to the report being received.

MR. D'ARCY: To the Minister of Finance, one of the happier things that has happened in the past year is that the government of B.C. has begun to pay its full taxes on property that it owns. The chief delinquent taxpayer in British Columbia is now British Columbia Hydro and Power Authority on the Columbia River Treaty projects and on the W.A.C. Bennett Dam on the Peace River, as well as a few other properties, such as the Kootenay Canal, which do pay school taxes but do not pay general taxes.

[Mr. Veitch in the chair.]

Mr. Chairman, just to indicate to the minister the amounts of money involved, I would suggest that the delinquency in taxes comes to around $25 million a year. This is a direct subsidy by the government of British Columbia to the British Columbia Hydro and Power Authority, because these are taxes which are not collected both to the provincial government here in Victoria and to the school districts and regional districts and municipal governments of British Columbia. I would note that the biggest amount of the $25 million, in fact, would accrue to the provincial government.

To give you some idea of the amounts involved in my particular area, just in my own riding of Rossland-Trail, at last years' mill rates, B.C. Hydro and the Keenleyside Dam would be paying some $630,000 in regional district taxes, some $540,000 to the provincial government, some $320,000 to the city of Castlegar and $2.9 million in school taxes which would have been divided roughly 60 per cent provincial and 40 per cent local. That's a total of $4.4 million on that one property alone.

If we look at some of the other properties in the area, we have the Duncan Dam - $80,000 regional district; $110,000 provincial; just under $500,000 school taxes into Kaslo-Creston school district. The Mica Dam, which has still not been assessed to this date for its machinery - that is its generators and turbines - were it to have last years' mill rates applied to it, would be generating over half a million dollars to its particular regional district, $1.1 million to the provincial government itself, and just under $6 million to the school district.

MR. CHAIRMAN: Hon. member, it would appear to the Chair that it may require legislation to force a Crown corporation to pay taxes.

MR. D'ARCY: No, Mr. Chairman, it would require an order-in-council and policy by the Minister of Finance, the minister in charge of

[ Page 805 ]

British Columbia hydro.

Mr. Chairman, while these amounts that I've indicated are very large amounts to the areas concerned, I would point out that for British Columbia Hydro they represent, at the most, 3 per cent, including the Bennett Dam, which I think would probably generate about $10 million to the Peace River communities. At the most, it would be about 3 per cent of the total revenues of British Columbia Hydro. As I've said before in this House, the taxation situation for B.C. Hydro is compounded in its unfairness for these communities, because B.C. Hydro does pay full taxes on its other generating stations, the ones it inherited from the B.C. Electric Company. It does pay full taxes on its substations, transmission lines, office buildings, works depots and so forth around the province.

All the communities in the province benefit from full taxes from British Columbia Hydro, except those which have had the misfortune to have had Columbia River Treaty projects built in them, or in the case of the Peace River, the W.A.C. Bennett Dam. Since the government itself is now paying full taxes, I think it's a total absurdity that this large and wealthy Crown corporation is paying taxes to most people but discriminates against a few communities in this province who have seen tremendous environmental damage and changes in their structures over the years due to the activities of the provincial government and its arms-length advocate, B.C. Hydro. I would hope that the Minister of Finance could give the House some indication that he's considering some changes in this regard. I gather that he and certain of his cabinet colleagues have in their hands at this time a brief from at least one regional district asking that they have a good look at this, and I think this change is long overdue.

Mr. Chairman, just beyond this $25 million subsidy, I would like to also reiterate to the committee that the British Columbia Hydro transit subsidy serves about 60 per cent of the population of British Columbia, but British Columbia Hydro serves gas and electricity to 90 per cent of the population. This means that 30 per cent of the people of the province of British Columbia are subsidizing transit losses for the other 60 per cent. I consider this totally unfair, and some of the communities I have mentioned who are not receiving tax benefits from B.C. Hydro not only are facing that subsidy to that corporation, but they're also subsidizing the transit losses in greater Vancouver and greater Victoria. I would hope that the minister is seriously considering correcting some of these anomalies during this fiscal year.

HON. MR. WOLFE: Mr. Chairman, I appreciate the member's remarks regarding Hydro and the property tax. We have received a brief, and I'm sure it's probably the same one that you are referring to. Considerable study has gone into the matter of the properties on which Crown corporations of a variety of description pay or don't pay property taxes, and they differ in nature in a great degree. I might say that for their annual report for the year ended March 31,1977, B.C. Hydro has indicated grants, school taxes and water rentals of $46 million, an increase over the previous year from $39.5 million.

MR. D'ARCY: That's why it's unfair.

HON. MR. WOLFE: In any event, I'm just saying that they are currently paying property taxes or school taxes on all buildings with exception of the hydro projects themselves, and are also paying grants in lieu of taxes to municipalities. So the consideration you were referring to is whether they should not pay property taxes on the projects themselves because they are currently paying them on all other facilities.

While I have an opportunity, Mr. Chairman, I would like to refer back to an inference left by the member for Vancouver Centre (Mr. Lauk) - the one with the files in the basement - who referred to a current director of hydro, Mr. Charles Brazier, who had formerly been a director of Foundation Company and ceased to be a director of Foundation Company when he joined the Hydro board in January of 1976. The inference was left that even though he was not on the board, Foundation was still perhaps having contracts with Hydro.

I am advised that this is not the case, that the last contract which Foundation Company had to the best of my recollection or knowledge is about nine years ago. So this would be far previous to any period of time in which Mr. Brazier was a director of B.C. Hydro. I thought I should make that clear to the committee.

MR. D'ARCY: A point I have to repeat to the minister, just in case he didn't get it, is that most of B.C. Hydro's generating facilities in the province do indeed pay full taxes. It's only the Columbia River Treaty projects and W.A.C. Bennett Dam which do not and some other projects associated with the Columbia River which pay school taxes but not general taxes.

Mr. Chairman, I would have to point out

[ Page 806 ]

again that private sector projects, notably those operated by West Kootenay Power and Light and Cominco Ltd., do now and always have in the past paid full taxes. While it may surprise the minister to hear this, I have always advocated that no government should take unto itself rights and privileges which they are not prepared to extend to the private sector. Here is a classic example of just such a case, and it's being perpetuated by this minister.

Mr. Chairman, we have lost many, many things in the Kootenays due to the Columbia River Treaty. I'm not going to go into the terrible financial aspects of it but we have lost many things. Environmentally we have gained nothing out of that treaty except some short-term construction booms which left us with expenses and scars and overdeveloped facilities which the public that are left there and the industries that are left there have to pay for. If we could get one thing out of it, it would be taxes out of the energy.

Surely no part of this province which had a natural gas energy resource or a coal energy resource or an oil energy resource would consider itself so unlucky to see that resource removed from its area without a single benefit accruing to that area in terms of jobs or revenue or taxation. But that is the situation that we face in the Kootenays with Columbia River Treaty projects because an energy resource that is natural to the area, indigenous to the area has been developed, is being extracted, is being shipped away. There are no jobs and no tax dollars for the local communities that are left.

MR. MUSSALLEM: Mr. Chairman, a matter I wish to bring to your attention tonight is a very small thing, but it has been well written that the small little things of the world 'confound the things that are mighty. So this being small makes it nonetheless important.

In the Taxation Act, farmland of 10 acres must produce a gross of $1,600 per year. That is the minimum amount. It could be five acres; it must still produce $1,600. This, I think, is grossly unfair. I know the minister has been advised by farmers but I think he has been advised by the wrong people, the big operators, who would like to see farming maintained on a large farming basis. But in the Fraser Valley with the small farms, small people operate probably with a job but at the same time a family farm that can produce income. But there is no way of producing $1,600 gross on five acres of land unless it's an exotic type of production such as bulbs or chickens or something like that - exotic production of things.

However, I know one person who with 10 acres is producing breeding stock - exotic types of cattle. He can Just barely make it but not quite. I believe that the minister is being unduly restrictive in not allowing the small farm to produce as a farm, because they lose heart, they do not work and they do not operate. I suggest to him that the old system of $100 per acre was more reasonable and a $500 per year minimum. But the $1,600 is too high. The advice has been given, I think, from people who operate in larger spheres.

So I appeal to the minister to take this into consideration. It is very important. Hundreds of these small pieces that could be productive would be more productive if they were used in conjunction with farmers' markets that could be put in strategic locations, privately operated in the Fraser Valley, where people would not always have to go to the supermarket, where they could buy products in season, operated by a small producer on five acres, on two acres, where the family would be involved, where no salaries would be paid and where production could ensue.

The other way, of course, is to treat all these pieces of agricultural land as preferred pieces, and charge them the farm rate and negotiate the fact that, should they be sold for development, back taxes would be paid. I won't go into that; you all know what I'm talking about. But I feel it is inequitable and improper that the minister should set this arbitrary figure of $1,600 gross per year, and say that should be it, because it is not f air to a small producer. They lose heart, and consequently we will lose a great deal of production. And w-'re losing budding farmers, families of farmers who can work in these small areas. I think that is very important.

Again I say it's the little things of the world that confound the things that are mighty, and this is an important area that should be considered.

Vote 92 approved.

Vote 93: administrative and support services, $1,072, 434 - approved.

On vote 94: office of the comptroller-general, $4,002, 470.

MR. STUPICH: Mr. Chairman, I'm just curious. I notice, in some of the votes, the number of staff members has gone down. In this one it is going up appreciably, and we do have the added office of the auditor-general this year under a separate section. I'm just wondering what's

[ Page 807 ]

happening here, that they're going from 162 up to 196 staff members. There must be some change of some kind.

HON. MR. WOLFE: Firstly, Mr. Chairman, we're finding that, notwithstanding the advent of the auditor-general, there is increased need for internal audit capability, field audit capability and so on, to say nothing of the sort of upgrading of financial systems requirement that comes through the comptroller-general's ' office. What you're looking at here is an increase of 15 positions, which were acquired by transfer from the Vancouver Resources Board, in addition to which, by order-in-council, the establishment was increased by 19 positions for other reasons.

Vote 94 approved.

Vote 95: computer and consulting services, $6,801, 506 - approved.

Vote 96: Purchasing Commission, $2,045, 495 -approved.

On vote 97: taxation administration, $4,797, 307.

MR. STUPICH: Mr. Chairman, this is one of the votes where I mentioned the number of staff has gone down - exactly 5 per cent. I am surprised. I thought the sales tax people, in particular, could always use more staff members. And not only that, they always make more than it costs to hire them; and I'm surprised the number in total has gone down. There must be some change in classification or something, as the number of consumer tax inspectors has gone from two up to 30, but still we're down in total. There must be something.

HON. MR WOLFE: Mr. Chairman, the reason is that we've decreased by 12 positions due to the repeal of the succession duty and gift tax, which was the responsibility of the income tax branch.

MR. STUPICH: 1 did not think there were 12 people in that branch.

HON. MR. WOLFE: Yes.

MR. STUPICH: Mr. Chairman, I'm just very surprised at that answer because, as I recall last year in discussing the work of that branch - and I don't have my estimates here for last year - I read a very long list of duties for that branch under Mr. Prowse. It looked after many responsibilities besides succession duty and gift tax, and yet I don't think there are any more than 12 people in total in that branch.

HON. MR. WOLFE: Succession duties?

MR. STUPICH: Well, not only succession duties; it was ... I've forgotten the classification.

HON. MR. WOLFE: Succession duties and gift taxes.

MR. STUPICH: There was a larger title than that. By the time I go and get the red book from last year and read out the duties of that group ... I don't recall just how many people were in it, but I didn't think there were that many people in total, let alone all of them involved in succession duties. I'm just trying to give somebody time to read. I think there must be something more than that.

Mr. Chairman, even with that explanation, if the whole 12 were coming out of that one area - and I really question that explanation -then it means that there's absolutely no increase at all in taxation administration; and I question the wisdom of that policy, in not having more people in taxation administration.

HON. MR. WOLFE: Mr. Chairman, in last years estimates there were 53 staff positions in the income tax branch, and I'm saying that in next year's estimates the taxation administration has been decreased by 12 positions due, as I say, to the repeal of the succession duties and gift tax. These positions are: one economist 3, seven audit accountants, and four clerical positions - a total of 12. 1 think there were in addition other supernumerary employees who were relocated internally.

MR. STUPICH: I guess the other question on this vote then, Mr. Chairman, is that I am surprised there is no provision for any increase in taxation administration, and I wonder why the minister hasn't found it wise to do something about beefing up that branch.

Vote 97 approved.

Vote 98: Assessment Act appeal boards, $400,000 - approved.

On vote 99: government agencies, $5,684, 386.

MR. STUPICH: If the minister has had an

[ Page 808 ]

opportunity to visit with, or to meet the various government agents around the province - and I would think by this time he would have - I would think it likely that from every one of the government agents in the province he's had a request for more assistance. I haven't had time to examine this in detail, but I notice that the sum total of all of the requests for additional help is to reduce the number in this vote by six. Now maybe some of them have been closed, or maybe something else has happened. I just wonder whether the minister has any comment on that.

HON. MR. WOLFE: This reduction is primarily due to the removal of vacant positions that were not filled in last year's numbers. To be specific, the establishment was decreased by a net figure of six positions, resulting from abolishing 14 positions and adding eight temporary continuous positions - moved from the temporary 04 vote code to the permanent position - a net decrease of six.

MR. STUPICH: Mr. Chairman, the minister and I agree in our mathematics. I said they went down by six, and he agrees with me that it went down by six. But I'm wondering whether he hasn't, indeed, had requests from every government agent in the province for more assistance - maybe not every one. I'd like him to tell me whether or not he is under pressure from the government agencies around the province to have more staff. These are the people that are really in the forefront of delivering government services to the general public, and my short experience as Minister of Finance was that all of them - well, perhaps not some of the smaller ones, where I see there are two, or three or four people, but certainly any of the medium-sized or large agencies - are desperate for additional staff members. Has the minister had a request from these people? Is he simply holding them at bay until conditions improve in the province such that tie can afford to hire a few more people for some of these medium-sized and larger offices, or is lie waiting for a change of government or something, so that they'll get the kind of staff that they need to properly serve the public's needs?

HON. MR. WOLFE: No, I don't think we receive continuous request for additional staff, except for temporary staff during particularly busy periods, when we hire primarily temporary staff.

Vote 99 approved.

On vote 100: Interest on public debt, $21,853, 323.

MR. STUPICH: Yesterday evening we established, on the income side of this, that the interest on short-term deposits currently is running at 8.25 per cent. I'm wondering what interest the government is paying on the public debt this time.

HON. MR. WOLFE: It would be approximately 8 to 8.5 per cent, Mr. Chairman.

MR. STUPICH: The next question then. The provision has gone up by something like a little over 50 per cent. Last year we spent -that is the last year for which we have a record, ending March 31,1977; and I believe the amount of the public debt has remained constant since that time - $15.6 million, and I'm wondering why it's necessary to increase the provision by 50 per cent.

HON. MR. WOLFE: Where do you get the $15.6 million?

MR. STUPICH: Public accounts. In the year ended March 31,1977, we actually spent a little bit more than was provided for in the 1978 estimates. Now we're increasing the provision by 50 per cent. The amount of the public debt, I believe, has not changed.

HON. MR. WOLFE: Mr. Chairman, the actual interest expense for the 1977-1978 year is expected to be $22.5 million, and, as you can see, the budget for the upcoming year is $21.8 million.

MR. STUPICH: My next question, Mr. Chairman, on this is: has the amount of the public debt changed from the March 31,1976, figure of $271 million?

HON. MR. WOLFE: No, it was $261 million.

MR. STUPICH: Well then, Mr. Chairman, I'm at a loss to understand why we're going to spend so much money in interest on the public debt, when the debt hasn't changed over a period of three years - three years, because we're projecting a year ahead - and yet the amount being provided for has gone up so much. Has the interest gone up that much? The rate?

HON. MR. WOLFE: I don't understand.

MR. STUPICH: Okay, I'll try again. As of March 31,1976, the amount of the public debt was established, through an exchange of

[ Page 809 ]

cheques, and all that sort of stuff that went on then - about which we may disagree. I think the figure was $271 million - maybe $267 million, somewhere in that neighbourhood.

During that fiscal year, from April 1,1976, to March 31,1977, we had that debt for that whole 12-month period. It never changed. According to public accounts, there was no record of it changing. We spent in that period $15.6 million, which would indicate an interest rate of about 7 per cent. I don't know how we got that good a rate.

In the year ended March 31,1978, we estimated that it would cost us a little less than $14 million. The minister is telling me that it cost about $20 million. Now how did it go up? Why did it go up from $14 million to $20 million, if the amount of the debt didn't change? Did the interest rate change?

HON. MR. WOLFE: I failed to observe for the benefit of the member that the original 1977-78 estimate was prepared when the debt was $150 million. Since that time, the debt has become $261 million, so the estimate for that period, 1977-78, was low, and the final interest figure became $21.5 million. The original estimate was prepared on the basis of a liability of $150 million.

MR. STUPICH: The next question, Mr. Chairman, is: when did this government find it necessary to increase the amount of the public debt?

We went through a long story as to who was responsible for how much of the debt and all that. And the minister has now said that at the end of the fiscal year during which the election occurred, some three months and 20 days after the election, the debt was established at $150 million. He is now telling us that the debt is up to $267 million. My question is; when did this government find it necessary to go an additional $117 million into debt?

Mr. Chairman, I would like to give the minister an opportunity to find out just when this government found it necessary to borrow. I know it's giving him a bit of trouble. I don't think he realized himself that his fiscal management was so bad that he had to borrow an extra $117 million somewhere along the line. I think this is a rude awakening for him, and perhaps for some of the other members on that side of the House.

HON. MR. WOLFE: But you're just asking for the date, which I'll get for you.

MR. STUPICH: I appreciate that, but the Chairman says if I sit down and you don't stand up, then we pass on to the next vote. I'm simply trying to explain to the Chairman why I have to wait and give you some time to figure this out. Perhaps you'll simply stand up and tell me that at some time, during the course of your administration, between April 1,1976, and today - April 25,1978 - you did indeed find it necessary to borrow an additional $117 million. 'Fess up and then we can move on to the next vote, because that seemed to be the situation. You did run us into the hole $117 million somewhere or another and you had to borrow that additional money.

Mr. Chairman, in view of the minister's inability to find that answer, let's just say that that is the situation. We were $150 million in debt on March 31,1976, three and a half months after the election, and today we are $267 million in debt. So somewhere during that period the minister borrowed another $117 million.

Now if we can go on beyond that point, Mr. Chairman, we're earning some $32 million on investments at a rate of 8.25 per cent. We're estimated to be paying $21 million at a rate of between 8 per cent and 8.5 per cent. It would appear as though it's not particularly good business to be paying a little bit more interest, a little higher rate, when we could always go and borrow that money back when we wanted to, presumably. Why is the minister not paying off the public debt when he has the money on hand to do so and since his credit is good enough to get short-term funds if he needs them? Can he tell us what is the policy with respect to public debt?

HON. MR. WOLFE: 1 indicated earlier today that due to the changes from one month to the next in cash availability, it would not be appropriate to prematurely pay off the debt, even though at one particular period of time we might have the available funds to do so. There will be a plan developed where we will attempt to repay the debt, depending on our ability to acquire these funds through careful management.

MR. STUPICH: Well, Mr. Chairman, we've actually gone beyond the revenue point right now. I wonder if the minister could give us some idea as to just how long a term those funds are invested for. Is it 30, 60, 90,120 or 180 days? Probably a mix, but what is the

Mix?

What I'm thinking, Mr. Chairman, is that with that amount of money involved, something in the neighbourhood of $300 million.... Well, it's more than that because we're earning 8.25

[ Page 810 ]

per cent and we're going to earn $32 million, so we must have $360 million cash invested in short-term deposits. It would seem to me that with $360 million cash on hand the minister would be in a position to at least reduce the debt to what it was at the end of the fiscal year during which the election took place, and we wouldn't have this problem tonight. We'd be down to the $150 million again. When the minister said we will develop an orderly payment of this as we have surplus cash, and we now have $360 million, it would seem to me he's very near the point of being able to start this orderly retirement of the debt, at least to the extent that he increased the debt.

MR. MACDONALD: I don't profess to understand Social Credit economics. I understand the A+B theory, but you people totally baffle me. The member for Nanaimo (Mr. Stupich) has said that since you've assumed office you have increased the public debt of this province by $117 million so that now your interest burden is $22 million. Now that's news to me. I've been telling the people in Vancouver East that this is the bottom-line, hard-nosed bunch that certainly wouldn't over spend their budget - on a scale that the NDP never did when they were in office. I can tell you that. We never had a debt like that.

HON. MR. WOLFE: You had a deficit like that.

MR. MACDONALD: We never had a deficit. We had balanced budgets! Where do you get all this nonsense?

HON. MR. WOLFE: You just don't like the sounds of it.

MR. MACDONALD: There is more hoax than hype in your message.

MR. WOLFE: The truth hurts.

MR. CHAIRMAN: Order, please.

MR. MACDONALD: There's more calm than conviction in what you say. Now the hour of truth has struck. These people are running the province into debt.

Now I want to ask if the debt is $261 million. I don't understand these financial matters but I'want some plain answers.

Mr. Chairman, I understood that we rushed some money to ICBC - I think it was $181 million. Then ICBC didn't need the money so they lent it back to the government. My question is: is that $181 million - I may have the figure wrong but I don't think so - still owing to ICBC? I ask that simple question. Is that part of the $261 million?

HON. MR. WOLFE: No.

MR. MACDONALD: It's not part of it. Does the government of British Columbia owe $181 million to ICBC?

HON. MR. WOLFE: No.

MR. MACDONALD: Well, would the minister, then, tell us what is the breakdown of this $261 million debt? Does that include parity bonds?

[Mr. Rogers in the chair.]

HON. MR. WOLFE: No, there are no parity bonds in the debt indicated of $261 million.

I might say, in answer to the member for Nanaimo, that the information he wants, I think, is on page 48 of the budget speech - a complete breakdown of treasury bills, the date they were issued and the date of their maturity.

MR. MACDONALD: Well, Mr. Chairman, the minister has satisfied me about that ICBC thing. Was that paid back to ICBC or is it just sort of cancelled and forgotten about? What happened with that $181 million? It was granted to ICBC to save its life, as I understand it, and then I thought it was lent back to the government of British Columbia. Was it paid back to ICBC? The minister might tell us about that. When you run a cheque through the bank you pay so much handling charges and that's an expense to the province, even though nothing changed in the transaction here.

The other question I want to ask - and I think we're entitled to an answer - is: what is the extra $117 million which the government has run us into debt? The Premier wasn't present, but as the member for Nanaimo made very clear, if we're now paying $22 million in debt-interest charges where a year ago we were paying $14 million then the debt has increased to the province. Oh, the Premier shakes his head. He didn't have the benefit of reading the....

The fact is, Mr. Chairman, we are now paying $22 million in debt-interest charges. The Premier shakes his head but the Minister of Finance has just confirmed that. That is the estimate. So somehow your Minister of Finance, Mr. Premier, has been running the province into debt while you've been running out in the

[ Page 811 ]

boondocks and telling them that you're a bottom-line bunch who would never do a thing like that. The public debt of British Columbia has increased by $117 million over the last year or year and a half.

HON. MR. BENNETT: Why do you try and mix them up? You left the debt.

HON. MR. MACDONALD: Well, what's the answer? I'm asking the Minister of Finance how this increased debt came about when the minister brought down budgets which he said were surplus. What is that $117 million made up of?

MR. STUPICH: Mr. Chairman, I'm just going back, for the moment, to this comment of the minister's that although he is calculating on earning interest on an average cash position of some $360 million this year it is not advisable to pay off the debt because he should keep this cash in case it is needed in the short term. I notice from the table to which he drew my attention that some of these short-term deposits are for as much as two years. I think the shortest is for one year. So it would seem as though it is not anticipated that the cash is going to be needed in a very short term. I'll make my point again that rather than paying this interest on debt the government is obviously in a position to pay off at least part of the debt, as I said earlier, at least to the extent that they have increased it by since April 1,1976. For two years that cash could be used. Okay, so it is tied up for two years. But the first of these treasury notes comes due on September 1,1978, in the amount of $50 million, by which time we will have something like $360 million-plus, according to the government's estimates of revenue. So it would seem as though we would be in a position at least to pay $50 million off on the debt at the time that debenture matures.

I do not know whether the minister is prepared to tell us any more other than at some point in time he will give some consideration to orderly repayment of the debt. I would welcome some comment from him on that.

HON. MR. WOLFE: Mr. Chairman, I did indicate earlier that we are looking forward to a plan for orderly repayment of the debt, given the circumstances where we are able to afford to do so. After all, this debt was accrued due to the deficit which we incurred on taking office: $261 million.

MR. STUPICH: I was all ready to let the vote go through, until the minister threw that in. He has admitted previously in questioning that the debt as at March 31,1976, was $150 million and that's the amount on which we paid interest in the first year. After that, we were paying interest on $261 million, and because of that the interest expense has gone up to something like $20 million because the debt was increased. If he had let it go at that, we'd be on to the next vote. But when he starts trying to confuse us by saying that the debt was actually $261 million and the cost was only $14 million interest, that was a real bargain; I know we were paying ICBC 10 per cent.

Vote 100 approved.

Vote 101: grants, contributions and subsidies, $16,481, 000 - approved.

Vote 102: interest on deposits, $3,400, 000 -approved.

Vote 103: incidentals, $1,860, 500 -approved.

Vote 104: advances under various statutes, $250,000 - approved.

On vote 105: salary contingencies, $21,064, 320.

MR. STUPICH: Mr. Chairman, I think it is worthy of some comment from the minister, when it has gone down from $41 million to $21 mil I ion.

HON. MR. WOLFE: In prior years the salary contingencies vote included an amount for general salary increases from a base amount. This year the negotiated salary increases, under the government employees union, are included in the salaries shown in each ministry's estimates. Therefore the provision for salary increases is not required, except for non-union staff and the estimate for salaries for new positions. That's the reason for the substantial reduction in the amount of the vote.

Vote 105 approved.

On vote 106: Treasury Board, $9,148, 468.

MR. STUPICH: I was just trying to read the description of vote 106. 1 notice the number of staff members has gone from 80 up to 90. While the minister was explaining the previous vote, I was trying to find out just why, with

[ Page 812 ]

an increase in staff, the amount provided for this has gone down. I didn't have time to find it, so it's up to him to give it to me, I guess.

AN HON. MEMBER: They're having a sale.

MR. STUPICH: They're having a sale? They're having more people to stop the garage sale, and yet apparently they're getting them cheaper.

MS. BROWN: Selling more and getting less.

MR. STUPICH: Anti-inflation measures have gone down. I'm not sure what that means. The minister took advantage of the opportunity on several occasions to speak about the steps that this government might take in the event that we got out of the anti-inflation programme. He announced his desire to have some kind of a control programme in the province of British Columbia in the event that we got out of the federal programme. The federal programme is winding down. Now if the minister was going to do something more here, it seem that the amount provided for anti-inflation programmes has gone down. I don't know how that can be done. Maybe he's ready now.

HON. MR. WOLFE: Mr. Chairman, I think under the anti-inflation measures we were not required to spend the total amount of the provision for last year. This is primarily for the committee and other part-time staff associated with that programme.

The other question regarding the reduction in the vote has to do with other expenditures the main item there_ being the Meg Plan reduction. There's not a sizeable amount required for the Meg Plan in other expenditures. That's code 90, under vote 106.

Vote 106 approved.

Vote 107: building occupancy charges, 3,737, 896.

MR. STUPICH: Mr. Chairman, I'm not going to ask the questions we asked last year about how many square feet and how many dollars per square foot and all that stuff. But I do see that it's a 150 per cent increase in the amount. Are we getting more space or is it more expensive space? Is it more expensive because BCBC is harder to deal with than the private sector was before. Just why is it that it's going to cost so much more money to house the Ministry of Finance than was estimated last year? Perhaps the amount that was estimated last year was inadequate. That may be it or might be part of the explanation. 1 don't know.

HON. MR. WOLFE: Mr. Chairman, I think more detail on this could be provided through the Minister of Highways and Public Works. In any event, the main item involved in finance would be the Douglas Building. There is greater usage being made of the Douglas Building.

MR. STUPICH: Perhaps you could tell me, are we somewhere near that figure this year? You did give an estimate in another vote as to what it was costing in the fiscal period just ended, for %which we don't have public accounts yet. But was the $1,666, 187 somewhere near the right figure or did it prove to be inadequate?

HON. MR. WOLFE: The other item I didn't mention, Mr. Chairman, is the property taxes to be paid by the Buildings Corporation as an additional cost due to the proposed transfer of the treasury branch from the legislative buildings.

MR. STUPICH: I guess the other question I thought he was going to answer was whether or not the $1,666, 000 was adequate in the year just ended. Are we somewhere on target there or...?

HON. MR. WOLFE: I would have to get that figure for you, I think.

MR. BARRETT: What is the process of negotiating the rental charges to the various ministries, Mr. Minister?

HON. MR. WOLFE: I think that's a good question, and it should be directed perhaps to the Minister of Public Works (Hon. Mr. Fraser) .

MR. BARRETT: Mr. Chairman, the Minister of Finance has got this item in his budget. Now I want to know how this is calculated. Is there a formula? Is there a rental increase charge? Is it related to the total overall budget? Is there a percentage that you aim for? I would like to know what the formula is.

HON. MR. WOLFE: Mr. Chairman, these rates are arrived at as an amortization of the valuation placed on the building. There is a staff member delegated at each ministry who has that responsibility. They arrive at it, as I say, through the Buildings Corporation to establish market values. Therefore the

[ Page 813 ]

amortization includes interest, maintenance, 3

et cetera.

MR. BARRETT: Well, are you saying amortization of existing mortgages on the buildings, or are you thinking of current public work and then the current costs? Is that what you are saying?

HON. MR. WOLFE: Yes.

MR. BARRETT: You're making that estimate.

Would the minister provide the House with a list of the buildings, and what they are considered to be worth, and what the amortization charges are estimated to be on those buildings, and the market value? Could you give me that list?

Mr. Chairman, this is an area that can be totally manipulated unless there is a consistent scale that we can deal with as an opposition. Now the minister has enunciated the policy of how the formula is arrived at.

Unless we know what the amortization figures are, or what the current assessed values are, they could be manipulated year to year and that figure could be manipulated year to year.

MR. LEA: It's A plus B.

MR. BARRETT: No, it's not A plus B. There was more sense to A plus B.

So I would ask the minister if he would table with this House or make available the list of the buildings so that we know what we're dealing with.

HON. MR. WOLFE: Mr. Chairman, through the auspices of the Buildings Corporation, that information will be forthcoming.

MR. BARRETT: Before I finish then, as I understand it you're making a commitment to this House that that minister will be able to provide us that information, either before or during his estimates.

HON. MR. BENNETT: Don't say when.

MR. BARRETT: Donot say when?

HON. MR. BENNETT: You can't direct a minister when to do it.

MR. LEA: I see - get the vote through and say when later.

MR. BARRETT: Mr. Minister, we were doing okay until the Premier started coaching him. I'm in no hurry. You're in no hurry. I know you %Want to do the people's business. All I want from the minister is a commitment. I appreciate all the information he has given me so far.

HON. MR. BENNETT: Just say you understand.

MR. BARRETT: Bill, easy! (Laughter.) You're the only ventriloquist's dummy whose lips are moving before the message arrives, for crying out loud. This is incredible. It's like a videotape that's about two seconds out.

I Aunt to ask the minister through the Premier what the answer is.

HON. MR. BENNETT: I'll tell you.

MR. BARRETT: If I ask the minister directly - if the Premier would slip his hand back out from behind the minister's jacket and let the minister speak for himself or if he wishes to write the minister a note.... It's just a very easy question to answer. I want the list that obviously exists as the touchstone for making these rental charges. The minister says that that would be available from the Minister of Public Works. I just want to know from the minister: is he informing me that it will be available from the Minister of Public Works before his estimates or during his estimates so we could discuss them? That's all I would like to know. Could you tell me that?

You know, we observed a little exchange earlier today, Mr. Chairman, when the Premier waved down good old Cyril and said: "That's the kind of thing we want to avoid, isn't it, Cyril?" Remember that? Well, No. 2 example. This is the kind of thing we want to avoid, isn't it, Cyril? That's right. That's why he's packing it up.

MR. CHAIRMAN: Hon. member, would you please relate this to vote 107?

MR. BARRETT: I certainly will. Here we are, at 10:45 p.m., on a day that the government has sustained very little embarrassment, and who goofs it but the Premier's bad advice to the Minister of Finance. It's embarrassing Cyril, who is non-partisan in his analysis of wasted time.

All I ask the Minister of Finance, who has given me this wonderful information, is: will he let the House and the people of this province know that that information that I ask from you, sir, will be available before or during the Minister of Highways and Public Works' estimates? Would you advise him of my question and ask him that the material be made available?

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HON. MR. WOLFE: Mr. Chairman, I feel sure the material will be available and I'm sure that the minister, under his estimates, will be happy to provide that information.

MR. BARRETT: I want to thank the Minister of Finance.

Vote 107 approved.

The House resumed; Mr. Speaker in the chair.

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

MR. COCKE: On a point of order, Mr. Speaker. I would wonder whether or not the Speaker has come down with the ruling on the point of order that I put forward at 6 p.m. today.

MR. SPEAKER: The ruling will be given to the House shortly.

Hon. Mr. McClelland moves adjournment of the house.

Motion approved.

The House adjourned at 10:47 p.m.