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CONTENTS

Tabling Reports Ministry of Energy, Mines and Petroleum Resources annual report, 1978.

Hon. Mr. McClelland –– 1641

Routine Proceedings

Oral questions.

Administration of Justice. Mr. Leggatt –– 1641

Sunshine Coast ferry service. Mr. Lockstead –– 1642

Electronic price scanners. Mr. Levi –– 1642

Government housing corporation. Mr. Gabelmann –– 1643

Budget debate.

Mr. Hyndman –– 1643

Mr. King –– 1647

Hon. Mrs. Jordan –– 1650

Mr. Leggatt –– 1653

Mr. Ree –– 16.56 Mr. Hall –– 1657

Hon. Mr. Curtis –– 1661

Division –– 1662

Committee of Supply; Ministry of Finance estimates.

On vote 85.

Hon. Mr. Gardom –– 1662

The House met at 2 p.m.

Prayers.

HON. MR. VANDER ZALM: Mr. Speaker, it is not often I have the pleasure of having my wife Lillian here, but she is here today with two friends from California: my cousin Coby Vink and her friend Donna Westwood from Palo Alto, California. Also visiting with us is Dr. Rodney Foxwell from Langley. I would ask the House to bid them welcome.

MR. RITCHIE: Mr. Speaker, I am pleased to introduce a few friends to the House today: Mr. Brian Hambley, school board chairman of School District 34, Dr. Morton Jacobs, his wife Dee and daughter Anne, and 13 students from Lewis and Clark College in Portland, Oregon. Would the House please make them welcome.

HON. MRS. McCARTHY: I would like the House to welcome four people in the members' gallery who are representing Vancouver–Little Mountain today. Would you please welcome Peggy Lee, Flora McIntyre, Elaine Wong and Shirley Klok.

HON. MR. HEWITT: Mr. Speaker, in the gallery with us today is a Mrs. Dorothy Pickeral from Penticton. I ask the House to bid her welcome.

Hon. Mr. McClelland tabled the annual report of the Ministry of Energy, Mines and Petroleum Resources for the year 1978.

Oral Questions

ADMINISTRATION OF JUSTICE

MR. LEGGATT: I see the Attorney-General (Hon. Mr. Williams) is here, and I'd like to ask him a further question on the statement that he made last week with respect to the matter concerning his Deputy Attorney-General. In the report to the House last week, the Attorney-General indicated that based on his interviews with regional Crown counsel Weddell — this is in the Mickey Moran case — it is clear that, contrary to the report of Chris Bird in the course of the telecast, Brian Weddell had no complaint about Deputy Attorney-General Vogel's interference in the Moran case. My question is this: would the Attorney-General indicate to the House whether the interference that is referred to in his report took place prior to the charges being heard, or was that interference subsequent to the charges being heard?

HON. MR. WILLIAMS: Mr. Speaker, my discussions with regional Crown counsel Brian Weddell indicates that there was no interference from Mr. Vogel before, during or after.

MR. LEGGATT: Would the minister advise the House whether there was any conversation or communication at all between Deputy Attorney-General Vogel and Mr. Weddell?

HON. MR. WILLIAMS: Mr. Speaker, if there was — and I'm not saying that there was-there was none in respect to this case.

MR. LEGGATT: Perhaps the minister could advise the House whether the question of the refusal to take a breathalyser charge was discussed by the Deputy Attorney-General, Mr. Vogel, with any of the Crown officials.

HON. MR. WILLIAMS: It was not discussed.

MR. LEGGATT: Mr. Speaker, my question to the Attorney-General concerns the report that he made. In his reference to the Wendy King case he indicated that the chief constable in Vancouver and the deputies were satisfied that Mr. Vogel was giving a lawyer's opinion when he expressed the opinion that he would prevent the calling of John Farris as a witness in the Wendy King case. Now that the minister has had a chance to inquire into this matter with eminent counsel, can he advise the House what that lawyer's opinion was? Why was an opinion given that Mr. Farris would not be an appropriate witness in that particular case?

HON. MR. WILLIAMS: Mr. Speaker, based upon the evidence that was made available to the Deputy Attorney General during his discussion with two police officers, the indication was Mr. Farris could give no evidence which would advance the Crown's case, which is one of the criteria to be considered.

MR. BARRETT: On a supplementary, could the Attorney-General please inform the House, in light of the answer he has just given, why Mr. Farris was subsequently subpoenaed?

HON. MR. WILLIAMS: Mr. Speaker, I don't know whether it was in this House or elsewhere, but I've already answered this question a number of times. I'm happy to do it again if the Leader of the Opposition doesn't know.

Subsequent to the decision which was made by Crown counsel having responsibility for that case in December 1978 — that Mr. Farris would not be called because he could not advance the Crown's case — the matter of the use of wiretap evidence was considered by other Crown counsel who are specialists in this field. It was based upon their view of the matter that the decision was changed.

MR. MACDONALD: I have a supplementary question to the Attorney-General. Did the Deputy Attorney-General ever say anything, either to a meeting of police or to other people concerned with that case, to the effect that if a subpoena were to be issued to Mr. Farris, he would have it cancelled — or words to that effect?

HON. MR. WILLIAMS: It's my understanding that he did not use those words.

MR. MACDONALD: Mr. Speaker, could I ask the Attorney-General what words he did use?

HON. MR. WILLIAMS: I am advised that during this lengthy discussion undertaken between the Deputy Attorney-

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General and the two police officers, the Deputy Attorney General made it clear he did not believe that Mr. Farris' evidence would advance the Crown's case, and therefore he should not be called as a witness. But I have to remind the members, Mr. Speaker, that there were no charges laid at that time.

MR. MACDONALD: I have just a short supplementary question on that. Would the Attorney-General then check as to whether, following that statement of the Deputy Attorney General, he at any time indicated that if somebody else issued a subpoena he would see that it was withdrawn or cancelled or something of that kind? Could the Attorney-General come back to the House and give us that answer?

HON. MR. WILLIAMS: I'd be pleased to take the question on notice, Mr. Speaker.

MR. LEGGATT: Has the Attorney-General now decided to provide the House with a list of the witnesses who were interviewed and examined in respect to the inquiry?

HON. MR. WILLIAMS: Is the member making reference to the review I conducted of this matter?

MR. LEGGATT: Yes.

HON. MR. WILLIAMS: My statement set them out, Mr. Member.

MR. LEGGATT: I wonder if the minister would clarify his last answer. Is the minister telling us that the persons named in the statement were the only persons interviewed by either himself or his assistant in his inquiry?

HON. MR. WILLIAMS: Mr. Speaker, the ones mentioned in the statement were the only ones I interviewed.

SUNSHINE COAST FERRY SERVICE

MR. LOCKSTEAD: A question to the Minister of Transportation and Highways, who is also responsible to this Legislature for the activities of the B.C. Ferry Corporation.

On or about March 10 of this year the B.C. Ferry Corporation assured myself and residents of my riding that a supplementary vessel would be placed on route 7 between Earls Cove and Saltery Bay, serving theSunshine Coast-Powell River area. Today it's been confirmed that B.C. Ferries will not now be doing so, leaving the people of the Sun shine Coast and the Powell River area without adequate service and waits of six or eight hours during the peak summer period. My question is: can the minister assure the House and the residents of theSunshine Coast that a supplementary vessel will be provided for that route during the peak summer period?

HON. MR. FRASER: I'll have to get that information for the member but I believe this may involve a ferry stretched from 50-car capacity to 70-car capacity. That could be the reason. They think the larger vessel can look after the increased traffic.

MR. LOCKSTEAD: I appreciate that, but I remind the minister that that ferry was stretched well over a year ago. We did have a supplementary vessel all last summer, after the ferry was stretched. In spite of that we still had waiting periods of up to four hours.

MR. SPEAKER: The question, please.

MR. LOCKSTEAD: My question is: has the government decided to discontinue the use of resident commuter cards for residents of the Sunshine Coast and Powell River area and the Gulf Islands?

HON. MR. FRASER: I'll come back with the information regarding the extra vessel. To answer your last question, the government hasn't decided anything.

MR. LOCKSTEAD: I thank the minister for taking that question as notice — the second question; it wasn't my last question. This is my last question: has the B.C. Ferry Corporation decided what amount, if any, ferry rates will be increased this year and, if so, when?

MR. SPEAKER: The first part of the question is in order; the second part is not.

HON. MR. FRASER: You're referring to future policy, but I might say that the government haven't made any decisions at all. As a matter of fact it isn't before the government at the present time.

ELECTRONIC PRICE SCANNERS

MR. LEVI: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. At the present time, a number of supermarket food stores in B.C. are utilizing electronic scanners to calculate food bills, and these stores have discontinued individual product pricing. This practice in other Canadian Jurisdictions and in California has led to some consumer confusion. Can the minister advise the House if he or his officials have held discussions with retailers and/or the Retail Council of British Columbia with regard to the desirability of retaining price stickers on individual products in situations where the electronic scanners are used?

HON. MR. NIELSEN: Some discussions have been held.

MR. LEVI: Can the minister advise whether he has reviewed the situation in Ontario wherein an informal agreement exists between the government and the Retail Council of Ontario to maintain the use of price stickers?

HON. MR. NIELSEN: The situation in Ontario has been reviewed by ministry officials. I'm not sure what conclusions they have reached from those studies. Yes, that information has been part of our study.

MR. LEVI: Has the minister requested that retailers in British Columbia maintain individual product pricing where electronic scanners are introduced?

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HON. MR. NIELSEN: We have not requested that, no.

MR. LEVI: Can the minister advise whether he has reviewed the Quebec legislation which requires that price stickers be maintained on products sold, despite the use of electronic scanners?

HON. MR. NIELSEN: Mr. Speaker, the use of scanners in any jurisdiction has been reviewed by ministry officials, and the information gathered will be used for our analysis of what would best be suited for British Columbia.

MR. LEVI: Has the minister initiated a study or requested reports on the use of electronic scanners and individual product pricing? Is that something that is happening at the moment?

HON. MR. NIELSEN: Yes.

MR. LEVI: Would the minister undertake to make those reports available to the House when they are completed?

MR. SPEAKER: That question is not in order.

GOVERNMENT HOUSING CORPORATION

MR. GABELMANN: I direct my question to the Minister of Lands, Parks and Housing. On March 20 last, in answer to my question whether the government had decided to re-establish the Housing Corporation, the minister replied that "we already have a housing corporation in the province." The Housing Corporation chairperson, Mr. Thomas Toynbee, some time ago announced the final disposition and the liquidation of the corporation. Has the minister instructed Mr. Toynbee to reactivate the Housing Corporation pursuant to his answer on March 20?

HON. MR. CHABOT: Yes, Mr. Speaker, we do have a housing corporation called the B.C. Housing Management Commission of British Columbia. In reply to your question regarding the Housing Corporation of B.C., which was involved in the acquisition of rental units in British Columbia such as Casa Loma, we have no intention of reinsituting that corporation.

Orders of the Day

MR. SPEAKER: Members will remember that as the House closed on Friday I undertook to bring to the House an opinion. You will recall that an hon. member, responding I believe to the general sense of the House, withdrew certain words he had uttered in the course of debate. When it appeared that another hon. member, upon taking his place in the debate, was about to repeat those words, objection was taken. At that time I expressed the opinion that the effect of a withdrawal of words spoken was, so to speak, an expunging of those words from the record in the House, but not, of course, from the official record of the debate as reported by Hansard.

The question then arose as to what extent, if any, the objectionable words, without being repeated, could be alluded to in the course of subsequent debate. As the dignity of the House has been preserved by a withdrawal of the objectionable words, which as I have said may not be repeated, it is my view that the general freedom to pursue a proper area of debate should not be unduly limited simply because in that area of debate unparliamentary words have previously been used.

I do not feel it wise, however, for the Chair to endeavour to make a ruling to be construed as applicable in all future exchanges of a like nature. The particular circumstances must always govern, consistent with order in the House and preservation of the general freedom of debate.

ON THE BUDGET
(continued debate)

MR. HYNDMAN: Mr. Speaker, I am very happy to rise and join in the debate on the budget as we move into its closing hours. Because my place in this debate comes toward the conclusion of the remarks of many, in the course of my address today I would like to consider a number of topics which members have addressed, in an effort to highlight those areas in which there is, as one might expect, disagreement between the government and the opposition, but also to highlight with some interest some areas in which the group to your left, Mr. Speaker, has had some positive and supportive words to say to the government. I must say I'm going to be fascinated to watch, as the vote takes place, the degree to which the opposition benches arc full. Perhaps some sudden afflictions of cold or the flu will cause certain members to your left who had some good things to say about the budget to be temporarily removed from this chamber.

One of the issues that clearly has produced divided opinion in this chamber is the debate surrounding the Marguerite. I think it's fair to observe that the opposition has taken a fundamentally different view than the government as to what should be done with the Marguerite, and its future. I found it most interesting that last week in a Victoria-based newspaper which is, I think it's fair to say, certainly no great friend and usually a critic of the government, appeared a column by the editor. Because it is written by a Victoria journalist and produced in a Victoria newspaper, one would assume the commentary is somewhat balanced from the point of view of Victoria citizens. It appeared in the newspaper Monday, the issue dated March 21-27. It's an editorial by Derry McDonnell entitled "On Free Enterprise and the Marguerite." As I say. the interesting thing about this editorial is that it comes from a Victoria-based newspaper whose editorial record, generally, is to be critical of the government. The comments of Mr. McDonnell are quite interesting in addressing, if we might put it this way, just who is right on the issue of the Marguerite, if one stands back from the government and from the opposition in this assembly and seeks the independent view of, in this case, a well-known Victoria Journalist.

Reading from that editorial, Mr. Speaker, the comment is as follows:

"But was the basic decision to get rid of the Marguerite justified? Unquestionably, yes. We'd be willing to bet not more than 10 percent of those 40,000 people who signed CFAX's petition have ever travelled on her, especially during the peak tourist season. If they had, they would know that whatever charm she exuded because of her age and design and

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workmanship, she had more than lost in inadequate seating capacity, fuel inefficiency and clumsy handling facilities at each end of her run...."

"So what was the Marguerite? A vital link in the Island's transportation system? A unique mini-cruise ship on a par with the Love Boat? Not on your life. She was merely the part-time fuel pump for Victoria's part-time tourist industry, and that's all she was. What's more, age, overloading and rising fuel costs were threatening her with cardiac arrest.... "

"So there you have it. This was a sound decision taken by the government… We rate the degree of difficulty at 8 and give them 7.5 for execution and style. That's 59 out of a possible 80, or 74 percent. Not bad."

Mr. Speaker, for many who followed the Marguerite debate it's been difficult to stand back and get something of an independent view as to the correctness of the decision. Certainly the correctness of the decision has divided this House during debate. My observation in passing is that it's interesting to see a locally based newspaper, generally not supportive of the government, to endorse as unquestionably correct the decision that's been taken.

So the Marguerite issue is one that clearly has divided government and opposition in this debate, as has the question of financial aid to independent schools, provided for in this budget. Now last year, 1979, was an election year. It appeared, Mr. Speaker, that the group on your left sought to endorse the government's program of financial aid to independent schools. So it appeared from literature circulated by them during the election.

This year it's 1980, a new year. Last year's election is a year behind us, the next election is not likely in the very near future, and the position has changed. Again we see dividing us, as one of the benchmarks by which the public can define its preference, its choice on the policy issues in provincial affairs, the question of financial aid to independent schools. Apparently, Mr. Speaker, this session the position of the opposition will be advanced with some refreshing unanimity. We'll watch with interest during the estimates of the Minister of Education (Hon. Mr. Smith) to see whether all members of the opposition join in the general opposition position of opposition to financial aid to independent schools.

Turning to an area of somewhat more interest and curiosity, there have been some common themes of agreement during this debate. I find it refreshing that members of the opposition have been prepared to send some accolades on various topics to ministers and the government. I think it's a constructive sign for provincial affairs. I think it's useful, as we approach the debate and the vote today, to review some of the areas in which opposition speakers have had positive things to say about government policy as reflected in the budget document.

There is first the question of the new forestry program — the massive long-range infusion of capital into our precious renewable forest resource. It's fair to say, Mr. Speaker, that a number of opposition spokesmen have given the government credit for taking the initiative in establishing that program. In that respect, on both sides of this House, members are as one.

Also, in terms of our energy policy, while some members of the opposition have had reservations about the scope and extent of the energy policy in the budget, it's clear also that some members have given credit for some of the tax incentives provided to encourage energy-saving. The government's recent low-interest loan program has again drawn some support from members to your left, as has the downtown revitalization program, a program that will commit $25 million towards the regenerating and rebuilding of some downtown cores throughout British Columbia. So in those areas I think it's refreshing and good to see a commonality of view between some members of the opposition and the government.

Mr. Speaker, I was going to add BCRIC to one of the general topics of budgetary relevance that had drawn some support from members of the opposition. When the recent BORIC acquisitions were announced — the acquisition of an interest in MacMillan Bloedel Ltd. and the taking of an option with respect to Kaiser Resources Co. — I believe it's correct to say that the word "sensible" was used by two members of the opposition in speaking on behalf of their caucus on those two steps. I would have thought that meant there was again some general common, positive feeling both on your left and your right, sir, as to the policy of the government in this regard.

However, after listening to the member for Coquitlam Moody (Mr. Leggatt) the other day, I'm not sure if that's a fair analysis, because as I listened to him I derived the impression that he thought the option on Kaiser and the acquisition in respect to MacMillan Bloedel were a little too conservative and cautious. If I heard him correctly, his reservation or complaint was that any of the investments so far undertaken by BCRIC were those permitted as permitted investments under the Trust Companies Act, and were just a little too conservative and, gosh, not risky enough at all. There was certainly a strong suggestion, if I listened to the member correctly, that BCRIC should perhaps be involved in somewhat riskier ventures or investments than those permitted under the Trust Companies Act. If those remarks be true, Mr. Speaker, that member would appear to be suggesting that he doesn't wish to see sensible investments being pursued by BCRIC, but rather he would like to see BCRIC looking at investments not permitted under the Trust Companies Act and of a risker nature. I hope we'll hear more from that member on those comments as the session continues. So I don't think we can say that in terms of the recent BCRIC moves there is the unanimity which at first appeared when a couple of the members to your left described them as sensible, because subsequently we've had a call for more risktaking by BCRIC.

Mr. Speaker, the major area where I'd like to compare some of the comments of the government and the opposition is that of housing policy, because the general questions of housing provision, supply of accommodation, rents and mortgage interest are ones of proper concern to all of us in this assembly. Because it's a major topic of concern today, I think it's extremely worthy of note, Mr. Speaker, that on one major aspect of housing policy there has been, through this debate, a widespread and very strong common view between the government and the opposition as to one of the major steps that should be taken right away by the federal government to assist British Columbia in what is a very unique accommodation problem. That's the question of capital cost allowances either under the old MURB program or programs of a similar nature which give to prospective private sector investors in the housing market some incentive to come in

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and crank up the supply of rental housing and housing for home purchase. I want to say more about that in just a moment, because I think it's very remarkable that the opposition, who are not normally committed to strong free enterprise concepts, have strongly endorsed the return of the capital cost allowance — very much a private sector concept — as one of the major steps that should be taken in public policy in Canada today to get the ball rolling.

Along the way, the opening question really is to what degree the government at the provincial level is properly accountable for the housing crunch that is on today. Generally, in my submission, the commentators write and the analysts say — and our position would be — that the prime responsibility is that of the federal government. The federal government is the level of government which directs and controls fiscal and monetary policy, meaning our interest rates and our tax rates. Interest rates directly impact on the development of housing and the ease or difficulty with which housing can be acquired. Tax policy determines depreciation policy, which, again, is a major force in determining how much of our housing stock will be built. I think the fairest estimate is that at the provincial level efforts can be made, but in the area of housing the responsibility must be that of the federal government. As I've listened to the debate, it would appear that the opposition would disagree with that view, suggesting strongly that somehow the solution to the housing problems currently facing British Columbia lie largely at the provincial level. That's intriguing, because if one reviews the cyclical nature of housing and goes back to 1975 when again there was a housing crunch underway in this province, the echo from the members of the New Democratic Party then was somewhat different than it is today.

Cast your memory back, for example, to February and March 1975, about five years ago, when in the cyclical nature of the housing industry we had a problem similar to that being faced today. On February 11, 1975, there was a headline story in the Vancouver Sun: "Rents, Prices Rise, Vacancies Fade." The story opens as follows: "If you're out to rent or buy a place to live in it's hard to see how things could get much worse. Central Mortgage and Housing Corporation has just reported that the apartment vacancy rate in greater Vancouver in December was effectively zero." A couple of weeks later the headline in the Vancouver Province was: "Apartment Vacancies Dive." The story opened: "Fewer than 100 vacant apartments were found in a survey of the lower mainland in December by the CMHC." In a separate story about the same time was this: "B.C. House Prices up 36 Percent."

Five years ago British Columbia faced the similar difficulty of a severe shortage of rental accommodation, rising house prices and high interest rates. The member for Nelson Creston (Mr. Nicolson) was then Minister of Housing. In the Victoria Daily Colonist, April 19, 1975, he had this to say about the basic level of responsibility for that kind of problem: "The slump is partly a national and partly an international phenomenon caused primarily by rising interest rates as governments have tried to counteract the inflationary impact of the energy crisis." Well, it's five years later, and the member for Nelson-Creston now sits on your left, Mr. Speaker, and, like St. Paul on the road to Damascus, there's apparently been a conversion and his view of the world is different. He and his group apparently have the new-time religion whose fault the housing has become now. It's no longer a national and international phenomenon; now it's apparently a provincial problem to be dealt with.

We will not shirk our provincial responsibility, for the reasons I'm going to point out. But I think, in passing, it's fascinating to note how about ten feet of purple carpet can drastically redefine in the members' minds the real reasons for and the sources of the housing problems in Canada today.

HON. MR. MAIR: Where you stand depends on where you sit.

MR. HYNDMAN: Precisely. Well said, Mr. Member. In the course of the debate, though, I think we've seen the group to your left recognize the truth of the answer that the responsibility is federal, because a number of the opposition — and quite correctly — have joined with government speakers in calling on the federal government to reinstitute the capital cost allowance form of incentive in an effort to get house-building, accommodation-building and rental construction in this province moving again. I think the number of those speakers who have called for a re-entry of that kind of policy really reflects their underlying agreement with the fact that it's basically at the federal level that these problems have to be addressed.

If there is a thing I want to stress today it is to call on Ottawa — adopting the words of the Finance minister's budget, at page 30 — to immediately reintroduce, at least for British Columbia, incentives to increase the supply of rental accommodation and housing through a reintroduction of the capital cost allowance program. Members on both sides of this House have called for such a reintroduction. I think it is fair to say that call today is a unanimous view of this assembly. Not a speaker in this debate has spoken against the re-entry of capital cost allowance incentives. I think it's fair to say the overall judgment of this assembly would be that that would be a very constructive and much-needed step in British Columbia today.

The benefits of the federal government's taking such a step are these. First of all, it's the kind of policy which can immediately be implemented at the stroke of a pen. All it's going to take is an amendment to the regulations under the Income Tax Act, and that can be done virtually immediately in Ottawa. Apart from the immediate nature of the remedy, it is a very specific remedy which can be applied to the specific case of British Columbia. It needn't necessarily be applied across the board, across the country.

The fact is that the vacancy rate in British Columbia is the lowest across Canada, for a couple of reasons. In addition to our being back to a program of sustained and solid economic growth, the general migration into this province is at its highest level in 25 years, including non-workforce as well as workforce people. I think a fair case can be made that British Columbia is in a unique situation in its vacancy problem.

If the new federal government is concerned to show that it has a new desire to understand, deal with and remedy the problems of the west and the Pacific Rim, this would be a very positive first step forward to show that Ottawa is attuned to the needs and requirements of the far west. It's a simple program. It's easily implemented with a stroke of the pen. It can be done on a pinpoint basis to deal with British Columbia only, or perhaps only those parts of British Columbia where the problem is severe. The solution can be retracted when the problem has been solved. When, cyclically, the housing

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stock is built again and the problem has been solved, Ottawa can, with a simple stroke of the pen, modify the program or, if felt necessary, terminate it.

This is a time and this is a geographic area where this kind of program is needed again. It can be implemented right away. If we believe what we read — that the new government of the Prime Minister is sitting in Ottawa, concerned to show that it's listening to the west, monitoring our concerns and anxious to help — in the area of the return of capital cost allowance incentives to spur the construction of rental accommodation and housing for people, now is the time to act for British Columbia.

I mentioned a moment ago that on both sides of the House in this debate there has been welcome and, in some sense, surprising agreement that the program of capital cost allowance incentives should be returned as one of the major ways to do something about British Columbia's housing problem. But having said, Mr. Speaker, that on both your left and your right members agree that this program should be reintroduced, there is between the groups to your left and right a difference in perception as to what that program is. Today I hope to clarify, for the benefit particularly of the first member for Vancouver Centre (Mr. Lauk), the nature of that program.

A return to the capital cost allowance incentive system — a return to the MURB program is not an example of government intervention into the economy, thereby showing free enterprisers that sometimes you have to rely on government. Rather it is a step away from government intervention in the economy and is a step back to letting the private sector do its own thing as the solution. What I would like to make clear today is that the first member for Vancouver Centre, in calling quite correctly for a return of the capital cost allowance incentive programs to aid housing. Is endorsing and embracing — I would say warmly embracing a return to a private sector principle. It is not the case, as he suggested, that the MURB program with a capital cost allowance program constitutes government intervention in the economy as an example to free enterprisers of how sometimes even the private sector has to ask for the government to get involved.

Mr. Speaker, I'd just like to go back historically and outline briefly the history as to why the MURB program came into effect and why it was discontinued. In doing that, I think we'll sec that all of those who call for the return of MURBs, for the return of CCA incentives, are calling for a return to the private sector, are calling for government to take a step back from interference with housing.

If you cast your mind back to pre-1972 in this country, you would go back to a time at which the federal government had not become largely involved in housing programs. The private sector, up to 1972, was heavily involved in the provision of' housing, rental accommodation, and apartments. Particularly in the sixties and the late fifties, particularly during the time of British Columbia great resource boom, when all kinds of people were moving here and requiring accommodation, we did not have the kind of accommodation crunch that we've seen in the seventies. The reason is that the private sector was doing an excellent job of providing an ample supply and an ample choice of rental accommodation and housing on its own. The reason was very simple. It had nothing to do with political philosophy, nothing to do with party labels. It had everything to do with the centuries-old system of accounting — the accounting system that everyone uses, which takes account of depreciation as a permitted deduction from income in determining expense and in determining profit.

The concept of depreciation is based on the very simple and correct concept that tangible assets wear out over time and have to be replaced. If you have a tangible asset on your balance sheet, it is wrong to suggest that it maintains its original value over the years, if in fact it's wearing out. For example, a wood-frame apartment building ultimately must be replaced. Therefore on your books of account you must periodically show its depreciating value as it wears out. And that's what happened. Wood-frame apartment buildings could be depreciated at 10 percent. It's not a question of socialism or free enterprise, it's a question of accounting. But because depreciation is not a cash expense wherein each year the owner of a building has to write a cheque for the amount of the depreciation, because it's not a drain on cash flow, the result of being allowed to take depreciation as an expense against your apartment rental income is that you maintain a cash flow that enables you to go on building other housing and further apartments. The system works very well. You are able to do this largely through funds generated yourself, you needn't go out and borrow high-interest mortgages, and rents stay modest.

All through the sixties in Vancouver, we saw how well the system worked in terms of apartment accommodation. Landlords were competing for tenants. You could walk along English Bay in Vancouver Centre and you could see the landlords stringing signs from apartment buildings: "Move into my building"; "Six months rent free"; "Win a trip to Mexico" landlords competing for tenants, competing for their goodwill, and the best kind of rent control in the world at work. If your landlord didn't treat you well, there were five vacancies in the same block and five landlords after you and, boy, that kept your landlord on his toes. And that's how it should he.

Well, about 1972, Mr. Speaker, the planners and the think-tankers in Ottawa decided somehow that this accounting concept of taking depreciation was all wrong it was a mistake, it was some kind of break for people and it should he abolished. And so in the 1972 federal tax overhaul, we saw people prohibited from taking depreciation on apartment buildings. In spite of the predictions, the inevitable happened, Denied the normal accounting right to take depreciation, people stopped building apartment buildings. The supply of accommodation dried up, prices rose, a crisis emerged. The government stepped into the marketplace and took away an accounting right and caused the problem. The private sector was doing a first-rate job in this province of developing accommodation. As a consequence of the government stepping in and interfering, and taking away the depreciation right, there was the predicted accommodation shortage across this country.

What did the government do? Well, they tell you they brought in the MURB program, which was a modified right to once again take depreciation. But that was a step back to the private sector — the government stepping back from its interference and saying to the private sector, at least partially: "All right, you can go back to what you used to do before we interfered." So the first member for Vancouver Centre (Mr. Lauk), I'd respectfully suggest, is wrong when he implies the MURB program is some kind of government intervention that has solved the accommodation problem. The MURB program is the withdrawal of government from its interference and a tacit recognition that government interference

[ Page 1647 ]

with the private sector housing process of the sixties caused most of the housing program problems of the seventies. We're saying today — and speakers have said this through this debate — that a return to a full capital cost allowance system is the best way to go to generate a rental accommodation and a housing stock in this country at prices people can afford.

I wanted first to point out that in this debate on both sides of this House there has been a call to the federal government to reinstitute the depreciation tax incentives which have built so much apartment rental accommodation and housing in this country. I hope the message goes out to Ottawa that on both sides of this House that call is going forward. But in saying that I do want to point out and stress that what we're calling for is a return, if you like, to a pure private sector system. We're not calling for government aid or government intervention; we're calling for government to correct its incorrect interference with depreciation accounting systems.

There are a couple of other areas in this debate where both sides of the House have had differences of view. There's been a question of the degree to which the government should be involved at the provincial level in the actual production of housing stock. Members on your left have called for a return of a Housing Corporation of British Columbia type of f vehicle. The members on our side, Mr. Speaker, have suggested other alternatives. Again, we tend as humans to forget but if we go back five years and wish to review in summary the experience of the previous government with HCBC and its involvement in attempts to provide housing, we can't do a lot better than to read a Victoria comment of February 1975 written by Barbara McLintock in the Vancouver Province. It's a commentary on how the then NDP government was doing with the Housing Corporation. The heading across the article read as follows: "A Comedy of the Absurd With a Bad Script.'' I don't wish to recite in detail case after case of difficulties that emerged with HCBC attempting to provide and produce housing. The difference in this debate would be that members to your left arc suggesting direct reinvolvement, the way HCBC used to be involved in housing. I'd suggest to you, Mr. Speaker, that that just didn't work.

Again the member for Coquitlam-Moody (Mr. Leggatt) made some reference to HCBC projects in his area that he's visited where people now seem happy and the projects are well managed. I don't believe he mentioned what was at one time called Mountainwood, which is just adjacent to him in Burnaby, but I think the experience is the same with all of them. It took the vending of those projects to the private sector to get them fixed up, filled and well managed. That's what it took. I think the regrettable experience shows Lis that a better route to go than the direct provision of lumber and nails is, instead, for the government to create the framework or the climate within which, on a competitive basis, the private sector is invited in to participate. Let me illustrate how that is working under the budget of the present government.

I'm suggesting that history tells us direct efforts at housing by the provincial government generally haven't worked in this province. The HCBC experience of the previous government, I'd respectfully suggest, caused a lot more problems than it solved. In the core of Vancouver one of the prime problems to be addressed, if you're talking about solving the housing problem, is the creation of land. It's not just a problem of structure on the land. It's not just a problem of people having the buying or the rental power to afford the Structure, although that may be a problem in other parts of the province. In the core of Vancouver we're virtually out of land, and, therefore, the housing problem in the core of Vancouver has the added burden of producing the land or the space on which additional housing can go. In this budget — and I'm glad the minister's here — through the excellent work of BCDC a couple of initiatives are going forward which are going to provide better chances for more exciting housing in greater Vancouver. The first is the Lonsdale Quay redevelopment at the foot of Lonsdale in North Vancouver, as well as the major revitalization of downtown New Westminster. In both those cases, through the initiative of the BCDC, we're going to have in land-short Vancouver some exciting new places to live. As well, Mr. Speaker, on the north shore of False Creek as part of the whole B.C. Place complex, we'll see new, innovative and exciting places to live, and that is going to be the results of government doing no more than setting the competitive framework within which the private sector is invited to come in with its imagination, its energy and its competitive drive to produce the best housing possible. That's the other way to go and it's a better way.

Mr. Speaker, I'd love to go on and on about this great budget. In closing may I just compare the broad psychological views of the opposition and the government toward the budget and the future of the province. It's an area, regrettably, where there is a big difference between the two groups in this assembly. On your left, the opposition member for Maillardville has told us that the "rainy clay" has arrived in British Columbia. The first member for Vancouver Centre (Mr. Lauk) has told us there will be a depression in British Columbia early in the 1980s. He has advised British Columbians to sell their stocks and bonds, sell their homes, hoard gold — and, I presume, "stuff your gold in jam cans and stuff those in the mattress." Well, that's one view, Mr. Speaker; it's the opposition view.

I think the Minister of Finance puts it pretty well for the government and members of the Social Credit Party: "Into the eighties in great financial shape." That's where we are, and that's where we're going. Our Minister of Finance is prepared to back his view up with a five-year economic forecast, and all members of this government are prepared to back that up with optimism, faith in our future and a great faith in our people. Those who feel that way about our great British Columbia, Mr. Speaker, should join in the vote and support this budget.

MR. KING: Mr. Speaker, this is the first opportunity I've had to make some remarks with respect to the large new budget which the government has introduced. Perhaps, just before I address myself to the precise contents of that document, Mr. Speaker, I might be indulged for recognizing some of the members of the government side of the House who have been elevated since the last session of the Legislature, and some of those whom I think arc entitled to some special recognition as a consequence of their conduct over the past year since the House last met. I'd just like to make a few of those special recognitions today, I think it's an appropriate time to hand out some awards to government members.

I'd like to dedicate to the Premier a life-size looking glass and a vote of confidence from Ray Loewen, Ed Smith and George Kerster, Mr. Speaker. I think he's earned that this last year.

I think the Minister of Human Resources (Hon. Mrs.

[ Page 1648 ]

McCarthy) has some special recognition coming as well; I think that minister deserves a fine pair of leather gloves with the right index finger missing off one hand.

I think that Judge Larry Eckardt also deserves a fine pair of leather gloves, perhaps with an additional index finger on the right hand, the one missing off the minister's right hand.

The member for Central Fraser Valley (Mr. Ritchie), I think, has earned distinction. I'd like to deed to him a free ride on the Royal Hudson as a tourist promotion, Mr. Speaker, because I think he deserved better things in the tourist area than he got, quite frankly.

The Minister of Agriculture (Hon. Mr. Hewitt) — I would like to will to him something that he sorely misses: a final draft of next year's energy policy. And I would like to dedicate to the Minister of Energy (Hon. Mr. McClelland) a first draft of last year's energy policy, Mr. Speaker.

The member for Dewdney (Mr. Mussallem) should not be overlooked, that lovable Whip from the government side. I would like to extend to the member for Dewdney a vote of confidence and another glass of Fraser River water. I think he's earned that. I think the new Minister of Tourism (Hon. Mrs. Jordan) would do well to pay attention to the startling results of that glass of Fraser water and consider bottling it and serving it free to all our tourist visitors in the province over the coming year.

I think Dan Campbell distinguished himself in government service, and I think that he deserves a return flight to Ottawa and perhaps a thousand-dollar bill of spending money, Mr. Speaker. I think that's the least he's entitled to.

I would like to see George Lenko recognized, and I would extend to him an old copy of A Man called Intrepid, autographed by the Minister of Human Resources, Mr. Speaker.

I think Ron Greig, a chap who used to labour with great dedication in the Premier's office.... I'd like to extend to him a city map of Victoria for when he next comes out, because no one has heard from him since he left the Premier's office, and I think he might indeed get lost.

Jack Kelly. I think you've all heard of Jack Kelly, and I think he deserves recognition for faithful service to that government's objectives. I'd like to dedicate to him a letter from the Minister of Human Resources declining to accept his resignation. I think that would make him feel better — it would be similar to the gold watch treatment to those long-service employees.

Ellen McKay. I'd like to see her receive a job offer from Austin Taylor, Jr.

The second member for Vancouver South (Mr. Hyndman), who just spoke. I would extend to him an autographed copy of Great Expectations, signed by the Minister of Tourism (Hon. Mrs. Jordan).

Ed Smith. Remember Ed Smith? I'd like to send him an application form for the job of Social Credit Party's chief caucus researcher. I think he might be in reasonable line to apply for that job.

The Minister of Municipal Affairs (Hon. Mr. Vander Zalm). I extend to him a leadership draft from four Fraser Valley constituencies.

The Minister of Health (Hon. Mr. Mair) — a leadership draft from "Whistling" Smith.

To the Attorney-General (Hon. Mr. Williams) — a new telephone with a cord long enough to reach his associate deputy minister's office.

To "Whistling" Smith — a new pocket calculator to meet the challenge of computing party finances.

To Austin Taylor, Jr. — a fair return on investment. To the Minister of Forests (Hon. Mr. Waterland) — a duplicate of Ray Williston's key to the cabinet chamber. To the hon. Minister of Consumer and Corporate Affairs (Hon. Mr. Nielsen) — a personal portrait by Karsh.

Mr. Speaker, I think they're all entitled to the recognition they deserve. I don't think we in this House should be too stinting in our recognition of government achievements. We should be prepared and willing to recognize them from time to time.

MR. SPEAKER: Hon. member, it was entirely out of order, but the House seemed to enjoy it. Please proceed.

MR. KING: Well, I'm not sure it was, Mr. Speaker, since there's some cost involved, and that's what the budget deals with.

I want to make some remarks regarding the proposal put forward in the budget for the great expenditures.... I think the last speaker referred to them as "a massive long-range infusion of capital into the Forests ministry's five-year plan." I want to serve notice on the Minister of Forests that I intend to ask a great many questions of him and his staff when his estimates are before the House. I do want to congratulate the minister with respect to — do you feel threatened, Mr. Minister? — pulling together a great wealth of data contained in the five-year analysis put together by his department. There's a lot of good information there, and that in itself is useful to members of this House, and certainly useful to the public as well. But I do not see any revolutionary new plan for increased intensive forest management in the province of British Columbia. I do not see the budgeting of any major infusion of capital with respect to intensive forest management in this province. I want to put on the record my understanding of the budgetary provisions contained in the budget statement and in the material associated with the minister's five-year plan.

The suggestion is that over the next five years we have $1.4 billion to be dedicated to intensive forest management. That's the inference to be taken from the budgetary comments, and certainly that's the inference to be taken from the minister's report. But, Mr. Speaker, according to my understanding — and I hope the minister can correct me if I'm wrong — what he has done is simply take the annual budget of the Ministry of Forests in total, add that up over a five-year period and say: "Look, this is the money that is going to intensive forest management." Well, that, of course, is nonsense. That figure, in the area of $785 million over the next five years, is the total budget for administering the Forests ministry, including the minister's office, the general administration, the funding of all the field offices, the fire protection program, and all those myriad details associated with the ministry which in no way relate to intensive forest management or new initiatives in regeneration.

The other large figure contained in the estimates is obtained, as I understand it, by a change in accounting procedure — that is, by taking the total amount spent by the private sector companies, which is deductible from stumpage costs, and changing it from an expenditure by those private companies to an expenditure by the government. That's fine.

[ Page 1649 ]

That 's legitimate, but the point is that there's not one nickel of new money contained in that bookkeeping procedure. It is simply a new method of calculating the expenditures by the, private sector which are ongoing in their own programs of silviculture and forest regeneration. That leaves us, then, with the grand sum of $146.6 million to be allocated aver the next five years to intensive forest management. When you divide that sure into a five-year budgetary program, I suggest to you and to the House that that is a pitiful sum to apply to the urgent need of intensive forest management in the province of British Columbia.

We require expanded nursery capacity. We require increased research into genetic improvement of species. We require major site preparation in terms of ensuring the success of seedlings planted. In addition, we have a backlog, in terms of unplanted area. Of 1.8 million acres — almost 2 million acres that have not been adequately restocked. In order to come to grips with that backlog, to say nothing of the financial wherewithal to just maintain current annual regeneration, we are in no way addressing ourselves to the problem financially. I suggest that it's a bit of a sham for the government to proffer this plan as being an infusion of massive new capital funds into the forest sector. In fact it's a very small amount, and in my view it in no way comes to grips with the large capital needs in terms of ensuring that our forest industry is going to be a healthy one and provide a sound enough resource base to maintain our current even flow of allowable cut so there will not be reductions in forest production in this province or large-scale lay offs of individuals dependent upon that industry for their livelihood.

I put this view forward now so that the minister might have an opportunity, before his estimates come before the Legislature, to get more precise details on the source of the funds outlined in the budget and to persuade me and to persuade the House that my assessment is not a correct one. Quite frankly, I hope that is the case. Because the forest industry is so fundamentally important to the economic well-being of this province. I hope I'm misinterpreting the figures the government has put forward. But I think it's only fair to advise the minister that this is my understanding and, indeed, this is the appraisal I have received from people in the private sector and from some of the major industries in terms of understanding the capital figures contained in the budget. So the onus is clearly on the minister to persuade me and to persuade the Legislature that the program he has put forward is somehow being misunderstood.

During the throne speech debate I very briefly raised the question of a change in the assessment on agricultural land. In raising this question and saying that it was initiated by order-in-council I seem to have incurred the wrath of the former Minister Of Finance, the Provincial Secretary (Hon. Mr. Wolfe). Well, I know that during the last session of the Legislature enabling legislation was passed; I believe it was Bill 31, the Finance Statues Amendment Act. Nevertheless, the precise formula for reclassifying and calculating the basis upon which an agricultural classification could he preserved was indeed developed by the cabinet and put out by order-in-council I believe it was order-in-council 1710 — toward the end of the last session, at the end of June 1979. My Only error was In saying it was after the session ended: I concede that. Nevertheless, it did not co me to the attention of the House. There are literally hundreds of orders-in-council put out every week by the cabinet. It's virtually impossible to keep track of all of them. But that's not the paint. The point is that literally hundreds of people in my riding and, I suspect, all around the province –– certainly in Okanagan North — were unaware of the formula change in the assessment of agricultural land.

Now I don't argue with the government's motivation, their objective, which is to bring farmland into production. I can understand that and I approve of that direction. What I do not understand and strongly disapprove of is doing that in a scattergun kind of way, which provides no recognition for those pioneers who are now living on farmland at ages beyond 65, or for those handicapped people who live on farms, and who, because of their disability or because of the inevitable debility of age, cannot maintain farm production. Under those circumstances, this particular application of a minimum earning requirement to farmland is virtually chasing them off the land.

I cited the case of one gentleman in his eighties who had farmed this parcel of land all his life, and whose taxes were slated to increase from $I to $2,900. It's true that, subsequent to a visit to my office, he was able to go hack and appeal to the Assessment Authority and have that classification changed. He was one of the fortunate ones, Mr. Speaker. I have in my possession here files on, I'd say, at least 35 people who were not successful in their appeal to the Assessment Authority . I'm not going to take the time of the House to read out each and every one of these letters complaining of the fact that they were taken by surprise by the government, and that there was no flexibility in the program, and that senior citizens who had pioneered in the agricultural sector in this province are being dealt with in an extremely punitive way by a government order-in-council that was, in fact, introduced after secret deliberations of the council rather than through full debate in this legislative chamber. That, in my view, is a heavy-handed way to go, an unfair way to go, and it weighs most heavily and unjustly on the senior citizens and the handicapped people of this province, who are not land speculators.

I make this appeal to the government, and ask the government to reconsider their policy, at least to the extent that anyone aged 65 or anyone drawing a handicap disability pension who has lived on a farm for l5 years should he exempt from the minimum earning requirement set for speculators and other people. That is a simple policy change that is required I believe that the government entered into tills situation rather innocently. I don't think it was their intention to punish seniors and handicapped. But now, having seen the particular device in action, and having been able to touch bases with the regional assessment authorities. Who have recognized that it's a burdensome and unfair kind of provision for seniors, I think it would he most appropriate for the government to reconsider and bring in the policy amendment which I am advocating.

The requirement that they should have lived on the farm for 15 years would ensure that they were, in their own n right, bona fide farmers and not someone who had just purchased for a quick capital gain. The exemption for those people 65 years of age or over would he a recognition that they had made a contribution to the economy of the province of British Columbia and that they should not be forced off their land in their twilight years. There are grandfather clauses provided in a whole variety of statutes, Mr. Speaker, and I suggest this is certainly one where a grandfather clause should he provided so people can continue to live in the surroundings they've enjoyed most of their lives.

[ Page 1650 ]

[Mr. Davidson in the chair.]

The only flexibility in the proposed legislation as it stands now, that I am aware of — and I have been in touch with the Ministry of Agriculture; I've received correspondence from the deputy, who kindly laid out his policy understanding for me, and I've been in touch with the assessment boards — is for those people who newly acquire a farm and require large capital investment to get it into production. It's called the emerging and developing farmland classification, and that's a good provision for young people going into farming, who are required to bring it into production within a set plan and with certain undertakings of capital investment. But the status of a senior or a handicapped is altogether different. I'd be most willing to share my file on this matter with the members across the way.

I just wanted to say in conclusion — I'm going to have a good deal more to say about this when the ministerial estimates are before the House.... What I'm seeking are some reasonable responses from the ministers on that side. I do not seek to score political points on this issue. People are suffering out there, and I want the minister to understand that and address himself to it, not to engage in a "who can score the most political points on the backs of suffering people."

I just want to conclude by noting that the former speaker referred to massive capital investment in forestry. I want to tell him that the only massive capital investment I can see is in travel expenses for the ministers. I've had a look at the budget and at the increases in the various important ministries Really, I see no higher increase beyond inflation in forestry than I see in any other area of government responsibility. Would you believe that in 1979 the travel expenses for the ministers of the Crown were $338,759; in 1980 they are up to $467,835 — an increase of $129,076 in one year just for travel expenses by the cabinet. That's a 30 percent increase. The Minister of Forests (Hon. Mr. Waterland) and the gentleman who has just taken his seat are suggesting to us that there is some significant capital cost increase in the Forests ministry. I suggest to you that the increase in budget for intensive forest management does not even keep pace with the budgetary increase for travel expenses by those wayward ministers on the other side, and I think that's a shame.

It's significant that the Premier enjoyed the highest increase of all — no, I guess it was the second highest increase. The highest was to the Minister of Intergovernmental Relations (Hon. Mr. Gardom), and that's a new portfolio. It went from no dollars to $30,000. The Premier, the guy who is going to set a tone of fiscal restraint and great responsibility... his travel budget went from $33,775 up to $55,000. It's an increase of over $21,000 in one year for travel. That's the guy they call "Bunker Bill," Mr. Speaker. No wonder he's not available when the press or the opposition want to get in touch with him or, indeed, when federal ministers want to get in touch with him. With a travel budget like that it's no wonder that he's seldom available to deal with the real economic issues of this province.

I'm going to conclude now but I do hope that the Minister of Forests has taken note of the comments that I've had to make and will come into his estimates prepared to give out more precise information and respond in a specific and an honest way to the many questions that the opposition benches are going to have for him. That is a request that I put forward most genuinely to each and every minister on the government treasury benches.

HON. MRS. JORDAN: Mr. Speaker, just before beginning, perhaps I might offer to you, because I haven't had the opportunity before, most sincere congratulations upon your new appointment. I'm sure the day will come when you'll be thankful — on pay day, if at no other time. But we appreciate the control you've exercised over the House and the dignified approach that you have to your position, and we hope that it will be contagious.

It's always a pleasure to follow the member for Shuswap-Revelstoke (Mr. King), especially when he's leaving the House. I have a message for you, actually, just before you leave, Mr. Member. It was in relation to your effort in your awards program in which you billed yourself as being original, scintillating and witty. I just wanted to advise that member that I have just received a note that said: "We wish to afford a vote of confidence in the member for Shuswap-Revelstoke. We the undersigned offer support and guidance to our boy. Stick to the railroading. Signed, Mother, Dad, Audrey, your kids and Dave Barrett." So I suggest to the member that it was.... Try again. It's known as the Wes Black formula.

I was also listening with great interest to the member's comments about the assessment formula in relation to seniors, and I was surprised that in expressing his concern he didn't make mention of the fact that there are a number of opportunities for the seniors that he described to take advantage of provincial programs that would assist them.

First of all, if their land is overassessed, of course, there is the board of variance where adjustments can be made. Secondly, Mr. Speaker, if it is a small holding there is the opportunity for seniors to have a property tax deferment. This was a program that was brought in by the NDP, and I must say quite candidly that it's not one that I tended to favour at the time, and I really am not that favourably impressed with it at the moment. Nonetheless, it does offer an opportunity for seniors, if they want to stay on their property and feel that their taxes are too high, to defer those taxes indefinitely, and then the tax burden can be recovered from their estate. What appeals to me more is that there is the home and homesite family severance, so if it's a holding in the ALR and the family has worked it for years, there is an opportunity for the mother and father, or the seniors, to remove a portion of land to live on themselves, and to pass the rest of the land on to their family who are younger and can farm it more actively, or to sell it, as they see fit.

I would also like to ask that member what his position is when he is talking about the seniors and their opportunity.... I would also remind you, before mentioning anything else, that there's an additional $50 homeowner grant for elderly people, which increases their homeowner grant to $630 per year. This would be of great help on most pieces of property held for that time which they would want to live on and which would have a tax assessment in the neighbourhood that member is describing.

I wonder where that member stands in relation to the young family living on the so-called smallholding or pony farm. What does he feel about them? They are taking land, developing it and utilizing it. They are providing a lifestyle for their children which is beneficial; it gives them an opportunity to learn about agriculture and to have animals and learn

[ Page 1651 ]

how to manage them, whether they are horses, pigs or sheep. I wonder what that member would say when those people say: "In essence, we are holding land for the future and future food production, for when it is needed and when it's economically viable. We are, in fact, managing this land well and providing an environmental contribution by providing green spaces for our municipalities and people who like to drive in the country." I wonder what his position would be there. Would he advocate that there should be assessment relief for them also? Does he acknowledge that the preservation of agricultural land in the future can take many forms, not just active production of food, which in fact may not bring an appropriate sale price to justify its cost of production.... What would his position be there? Does he agree that there are multiple ways in which land capable of food production can be preserved, and it need not be in the traditional style that he and his party have advocated? Does he feel that small-production marketing should in fact go through a marketing system? Or should it be a free-market approach? Should it have the opportunity to undercut the orderly marketing system, which frequently is assisted in the area of recovering costs of production by the taxpayers of the province?

I listened to his comments very carefully and am very sympathetic should there be people in the plight that he described. I believe there is the opportunity to relieve that plight, in terms of existing legislation, in terms of the homeowner grant, and perhaps in terms of a new attitude on the part of all members of this Legislature as to how land capable of producing food can be preserved in a realistic sense for the future when it would be needed.

The budget itself and the debates surrounding it have been of particular interest to me. I find the budget very exciting. I find it contains a lot of original ideas. I don't suppose one would class it as sensational, but I'm not sure that the job of government is to be sensational. We had rather a lot of that in 1973, '74 and '75; we almost sensationalized ourselves out of the forest industry, the mining industry — expertise in these areas. We sensationalized ourselves out of our right to own private lands, and into higher taxation. We sensationalized ourselves into the national sensation where our Premier was considered a buffoon in Ottawa, and where our presence at the bargaining table was described politely as a joke. So I would suggest the approach taken by this budget has taken into account that sensationalism is just that. What the people of this province expect from their government is not sensationalism but imagination, dedication, leadership and capability — and that is in the budget.

It's disappointing, in reviewing the debate, that the objective of the opposition hasn't been what I understood it to be and what I hope we practised when we were in opposition: to advocate either new programs or restyling programs in a manner that was practical at the time and financially possible. I haven't heard any of that from the opposition during this debate. In fact, speaking of sensationalism, the only sensational or revealing remark they have made was that of the member for North Island (Mr. Gabelmann), who has not only displayed in this House his willingness, but went on public television and said "My one objective is to destroy this government and cause an election." That philosophy has been prevalent throughout the debate on this budget.

Mr. Speaker, I would suggest to you that that's the exact opposite of what the public of this province demand. They are not interested in an election. They just had an election, and they made very clear that they want a free enterprise government with a conscience and with an understanding of people's needs; with the capability to develop the type of economy that is healthy and in which individuals can exercise their own purchasing choices and their own development opportunities and choices. That's what this budget does.

To suggest that a budget of this stature — when you compare it to the rest of the budgets in Canada — is worthy of nothing more than to be torn apart in a negative way, leading to an election that the people don't want and can't afford and which would preclude the ability of the administration and the people themselves to implement the benefits of this budget, is nothing short of irresponsible and, I believe, Mr. Speaker, has been rejected by the people. Certainly when I was in the interior and in Vancouver on the weekend, I found people appalled that any responsible member of this Legislature, at $30,000 a year plus expenses, would have no more objective than to sit in this House to try to destroy this province. They expressed to me their desire to have much more value for the dollars they are paying all of us. I would hope that is the approach reflected in this budget, and I believe it is.

We've heard cries that the budget doesn't do anything.  would suggest, Mr. Speaker, that it does provide economic stimulus to the province, it does continue the government's policy of fiscal responsibility, and it does enable British Columbians to benefit from the opportunities of the 1980s by setting a budget policy with a longer-term approach and with more forward-looking perspectives. And it does provide a number of government initiatives in support of both the people and the industries of this province.

We've just heard the member for Shuswap-Revelstoke (Mr. King) show once again his inability to understand the forestry program. I'm not going to go into the details — I'm sure the Minister of Forests (Hon. Mr. Waterland) is quite capable of doing that — but I would bring to your attention that there is a $1.4 billion five-year forest management program, and that this has been received by the industry with loud acclaim, stating that it is the first time there has been a long-range program, that there is the money to back up this program and that over the last three years the effort has been made to have the plant in place to carry out this program.

In speaking of plants I would refer directly to the constituency of Okanagan North, which I have the honour to represent, where we see one of those plants coming into fruition. We have a new forestry research seedling orchard where we know that money is spent to develop new silvicultural practices, and the seedlings needed to carry that out are developed in such a way that they have a very high survival rate. When we look through history in other provinces — and I don't want to be negative about them — we see where millions and millions of dollars were spent on silvicultural and reforestation programs that were wasted because the research had not been done, the ability was not there and the plant was not in place. Mr. Speaker, that is not the case in British Columbia. We will enjoy good value for our dollars, we will enjoy a very high survival rate of this imaginative program, and it will benefit all of us. In the ministry for which I have responsibility — it's new, and I'm very pleased to have it — I would say that this aspect of the forest industry, along with many others, will do a great deal to benefit the industry of tourism.

They say that the budget is too high. I wonder what they would like cut out. An energy development program? Are

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they opposed to the $10 million for this new energy research and development agency? Or the $1.5 million for pilot projects for examining methods of recovering more oil from existing resources? Or the $1.8 million for accelerated construction of access roads to northeast natural gas fields? Do they oppose those? Mr. Speaker, you talk about long-range planning, you talk about putting your dollars into an area that's going to provide jobs and provide the valid information and infrastructure for those jobs to be there and for the tax revenues to continue the type of needs that our British Columbians will have in their budget. I ask why they would vote against that. Frankly, I support it.

Mr. Speaker, it's not just our word. The forest industry in these areas has applauded us for stabilizing and bringing certainty to the industry. I would mention Mr. Bill Hamilton, head of the Employers Council, who applauded the government's statement that the federal government should tend to its own concerns of resource management and not interfere in the resource management of British Columbia. That's the exact opposite of the position taken by the NDP when they were in office. As you know, they were willing to trade away the management of some of our prime resources for no other reason than to have them nationalized, to perpetrate a philosophy that they believe is most successful, but which has proven most unsuccessful in every other jurisdiction of the world.

Mr. Speaker, the chamber of commerce, which is the business organization of this province, are pleased at the budget, and they suggest that it should be supported because it reinstates resource management, and because it shows foresight. They are impressed with the removal of the sales tax from home heating fuels and home electricity. They also said that they had suggested that to the government last year and were pleased we had taken their advice. They are happy with the reduction of sales tax on fuel-efficient cars. Are the opposition opposed to this? I believe these are all imaginative, sound programs and policies, and they have been brought about not by tax increases, as happened under the NDP… You will recall, Mr. Speaker, when the members stand up, time and time again applauding the budgets that were brought in under the NDP jurisdiction, the time they were in office, that the increase in spending the government experienced at that time was brought about totally by increases in taxation — sometimes punitive and confiscatory taxation — whereas this budget and its capabilities are brought about by sound management, by an ability to understand the economy today and its future, and by an ability to harness the positive forces of people and the positive forces of an economy in the world, which is somewhat difficult. They've brought it about through tax reductions to encourage people to start at home. That's where policies begin — at home. To conserve on fuel utilization and energy utilization — do you call that unimaginative?

The next thing they say is that we're not spending enough. Here we've reduced taxes on small businesses, we've brought in a program which will allow people to pool their resources for venture capital, to provide much-needed money for small businesses in British Columbia of a venture nature, and they themselves, as individuals, enjoy the benefit of income tax reductions. Are the NDP opposed to that? But at the same time, Mr. Speaker, Health ministry expenditures have risen to $226 million, the highest in our history; the Medical Services Commission, $345 million; Hospital Programs have been allocated $795 million; and Human Resources spending has increased 17 percent to $763 million. We have the highest spending on human health in this province in our history, and at the same time we are removing taxes from prescription drugs, those other factors that are needed by people in relation to their health practices, and we see the increase in the homeowner grant.

What about our municipalities? The Minister of Municipal Affairs (Hon. Mr. Vander Zalm) has received telegrams and phone calls. There have been public statements by municipal leaders and the UBCM to say that never in the history of any free society have the municipalities received as many benefits as they do in this budget.

Mr. Speaker, I'd just like to read, for your interest, how this affects the constituency of Okanagan North. Revenue-sharing, which is an unconditional grant, represents a contribution of a 34 percent increase in British Columbia. Vernon, which is the central city of Okanagan North, last year received $946,258 and has a 21 percent increase this year to $1,144,631; Coldstream, an 18.9 percent increase in unconditional grants this year, from $245,826 to $292,262; Armstrong, in the member for Shuswap-Revelstoke's (Mr. King's) constituency — and he neglected to mention this, I noticed — had a 19.2 percent increase from $115,499 to $137,645; Lumby — and you know where Lumby is, this very exciting metropolis which is one of the centres of the forest industry in this province, and which will benefit a great deal from the continued forest management program — received a 20.6 percent increase in their unconditional municipal grants from $55,375 to $66,809. Mr. Speaker, this can only come about through a budget that has evolved from management, from understanding, and which includes tax cuts. Yet the opposition says that there is nothing of benefit in the budget.

What about the $25 million program for downtown revitalization? I applaud that — I think it's one of the most imaginative programs introduced this year in some very imaginative considerations. As Minister of Tourism, I would advise you that this is not only a shot in the arm to the municipalities, but this is a shot in the arm to the tourist industry. Most importantly, this is for us, the citizens, who use our downtowns, shop there and drive to work through them every morning. We can drive through and say: "My, it's good to be alive! Isn't this attractive!" It makes our lives more pleasant. That is one of the major objectives of this government. It's not only to have British Columbia be bountiful in the eighties but to have it be beautiful, not only for ourselves, which is most important, but for those who come to visit us. Again, that can only happen through this type of budget.

There is much I could say, but there are other members who want to talk. I could go on about the highway acceleration program and what this means to the constituency of Okanagan North. We have Nahn's corner being blasted here and there right at this time. The paving on Monashee Highway 6 will link the Arrow Lakes to the Okanagan in a manner that wasn't dreamed of ten years ago. Those people who shop and visit within our area and who have been isolated up until now will have an opportunity over the next two or three years to reach a populated area safely and in comfort. I applaud the Minister of Transportation and Highways (Hon. Mr. Fraser) for that.

Looking at the constituency of Okanagan North, in less than eight months, through the Minister of Industry and Small Business Development (Hon. Mr. Phillips), we have

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ten new industries, all of which have received assisting grants to help them expand their manufacturing capability or to start new manufacturing industries. Lumby, Fauquier and Cherryville have all received these funds –- funds which wouldn't be available if the NDP government were still in power, as we know from their record.

When I look through Okanagan North's record this year I see the money that went to cultural and recreational development, helping people develop a more interesting life for themselves and develop their talents and in turn provide more in British Columbia for this very vital and exciting tourism industry of the future. People in the future will look to do things. They will come not only to see our natural attributes and to enjoy our fine restaurants and accommodation; but they will want to play with us and will want to know our cultural feelings and be a part of that. Through the assistance of this budget people in all communities will have the seed money they need to get started, not only, as I mentioned, for their own development and for their community's enjoyment, but to be part of this vital industry which provides more jobs to more people than any other industry we know of.

Mr. Speaker, this budget represents a strong statement of confidence in British Columbia. It's a budget that builds for our people in the 1980s and prepares us and gives us the opportunity to plan for that future. It's a budget that serves people. Everything in this budget that is done is done for people. It is a responsible budget, it is sensitive and it is forward-looking. On top of this, it gives us as citizens the opportunity to enjoy not only the personal freedoms that we aspire to in British Columbia but the financial freedoms, because in doing this it contains the tax cuts that we need so that we have just a little bit more money in our pockets to make our own choices about how we want to spend that money. That's an important part of personal freedom.

I fully support the budget. I believe the people of Okanagan North, whom I have the honour to represent, would be very disappointed if the opposition didn't show faith and concern and support the programs that we've outlined by voting for the budget. So I would ask them, through you, Mr. Speaker, to be true and loyal to those people they represent, to support the wishes of the people of this province and to support this type of budget with this type of opportunity. Certainly I intend to support it with pride.

MR. LEGGATT: Mr. Speaker, first of all I'd like to congratulate you on your appointment. I've been up several times, but it has slipped my mind. I do apologize. I sincerely hope you have a successful tenure. It's a very difficult job — maybe a short tenure, given the vicissitudes of this place. Again, my congratulations.

I did want to say, first of all, that I was most interested in some of the remarks made, particularly, by my colleague who sits to my left, the second member for Vancouver South (Mr. Hyndman). He waxed somewhat eloquently, both Friday and today, around a number of issues which had been raised prior to his remarks. Particularly, he seemed somewhat concerned about the remarks I had made around the economic strategy that seems to be developing in the operation of BCRIC. He suggested I was standing up saying BCRIC should be making riskier investments. I wouldn't characterize them as riskier; I would say more imaginative. Why would I suggest they should be more imaginative? Well, if one looks, first of all, at the annual report of BCRIC, you can recall the great sales job done on the people of British Columbia about the purpose of this particular corporation. This was going to be a corporation which would marshal the savings of British Columbians, and would be a marvellous tool in an engine of development for the province. It would create employment; clearly it was going to solve all of the things that hadn't been solved in the private sector. This was going to be the private-sector engine which would take the place of the role of government in the economy.

In fact, the first annual report shows a couple of things that are interesting. As of December 31 the investments of BCRIC located outside of the province of British Columbia were 23 percent. This great British Columbia corporation that was to be used as an engine and a vehicle for developing the province is now taking the savings of British Columbians, the investments of British Columbians and the assets which previously we as British Columbians all owned in the Crown corporations and is, to a large extent, now using those assets to invest in Alberta. I'm not opposed to developments and investments in the energy field. It's clearly one of the areas we must seriously look at. But I ask the second member for Vancouver South to think about this. I seriously question the advantage of using BCRIC and taking the savings of British Columbia to invest around the world. Surely that was not the purpose of this particular corporation. So when I rose and suggested that BCRIC was becoming nothing more than another holding company, I think the first annual report will reflect that. It invested in MacMillan Bloedel. It decided that somehow or other an investment in Canadian Pacific wasn't appropriate. It hasn't yet invested significantly in trying to repatriate the economy in British Columbia, which surely should have been one of its major responsibilities.

My friend and colleague from Vancouver South had some very interesting things to say about housing. He deplored government interference. I think some of his phrases are worth quoting. "Setting the competitive framework, " he suggests, is the answer; "selling to the private sector, developing a climate in the private sector." [Applause.] I'm glad the member approves of that. I want to explain to my colleague that, in fact, the housing market has never been in the private sector. When most of the people in this room bought their homes they bought them at interest rates which were subsidized by Central Mortgage and Housing Corporation. Many of the people around this province bought their homes at 6.25 percent or 6.5 percent, guaranteed by Central Mortgage and Housing Corporation to the bank.

AN HON. MEMBER: It was the prevailing rate.

MR. LEGGATT: It was not the prevailing rate. That rate is artificially determined. If it were the prevailing rate it would be a higher rate. The only reason for the guarantee was to keep that rate at an affordable level; it has always been that way. Surely the members of this House are not arguing that people can now pay 20 percent to the bankers and moneylenders and still have a reasonable housing program. It just won't work that way. It's simply impossible to ask capital to be rewarded at that particular level from the sweat and hard work of British Columbians. So when my friend from Vancouver South suggests we leave it to the private sector, the private sector will determine that interest rates in the housing field are going to go to 20 percent. I hope my colleague and friend will stand up in his constituency and say that he

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supports 20 percent interest rates for housing. Those will be the interest rates you will have to pay, because that is the logical conclusion of saying you should have pure housing in the free enterprise sector. It's because that is the international and national rate of capital. As the Premier of this province has pointed out many times, that's a rate we can't do very much about. I don't accept that we can't do very much about it. It is a rate that's untenable for the average income-earner in the province of British Columbia, and we have to interfere in it.

My colleague did not comment upon the government's attempt to interfere in the rate, which is the $200 million program at 9¾ percent. I presume that's one of those pieces of government interference he thinks should be left alone, that the government should stay out of the market. What are they doing interfering by setting that 9¾ percent and using my tax money and your tax money and everybody's tax money to subsidize that particular rate? Clearly, the reality is that the government hasn't interfered enough in the housing market. Instead of a $200 million program, they should have advanced a $1 billion program, and that $1 billion program should have been provided at 9¾ percent. The figures show that the cost to the treasury would have been a modest $40 million a year. That's a very good and wise investment of the taxpayers' money in the province, and that would have created employment in the housing industry where, clearly, the major demand is now. The major demand for growth and employment is in that industry, and that would have created thousands and thousands of jobs all across the province of British Columbia.

Now I do congratulate the government for the $200 million program. It's a good program. But it's not enough, and it isn't a program that is planned, in terms of consistency, with land available. There should be a long-term program in terms of providing serviced lots....

MR. HYNDMAN: To the private sector?

MR. LEGGATT: Yes — to the private sector. I would agree with the member for Vancouver South that small building contractors should have more land available to them to provide that housing stock. The problem is that because of the law of supply and demand in terms of land, you can't do it without interfering in the private sector. And that's where the agricultural land reserve and the conflicts come in. Now, the pressure on the ALR is going to be just tremendous to again provide more serviced land for the thousands and thousands of young people who are now wanting and demanding a house, because we give them that dream. You can't take that dream away; it's still there. Everyone wants to own their own home; they want a chance to participate; and, yes, they even want to sell it at a profit.

MR. MUSSALLEM: Would you take that dream away?

MR. LEGGATT: I wouldn't take that dream away, but my friend from Dewdney will take that dream away if he doesn't see that the private sector can't fulfil the dream. The dream can only be fulfilled with a proper combination of public and private cooperation in terms of the provision of housing stock. Government has made a modest first move, not properly planned, but nevertheless they've stumbled onto something that might work out next year — if they're still here. I want them to seriously consider a $1 billion program in terms of housing. Don't worry about B.C. Place and all of the monuments you want to build to get yourself re-elected; just provide housing stock to the thousands and thousands of young people in this province who need it and who demand it, and you'll go a long way towards starting to cure two of the major problems in our economy: inflation and unemployment.

When we talk about the private sector.... My colleague for Vancouver South no doubt likes the system of the free market in the way we develop capital, the way we provide capital to people who need it. That's the traditional concept in British Columbia and Canada which has been through the development of the private banking system in Canada. In Canada we have five major banks: the Royal Bank, the Canadian Imperial Bank of Commerce, the Bank of Montreal, the Bank of Nova Scotia, and the Toronto Dominion Bank. As a group, they make enormous profits and they pay very little tax. As a group — and this is important, Mr. Speaker — they hold more assets than 200 of the largest corporations in Canada, other than financial corporations. Just think of it! Our five major banks control more assets than the 200 largest non-financial corporations all rolled into one. Do you know they make Imperial Oil and General Motors of Canada look tiny? Each and every one of those five big banks has a return on equity higher than Imperial Oil, and they do better as an investment than the entire petroleum industry, which has been doing superbly and is at an all-time high.

They still can't touch what has happened in Canada in terms of what we've done in promoting that cautious group of individuals in Toronto called the Bay Street bankers. They are unreal. Let's look at their tax rate. If you are earning $15,000 a year in British Columbia — that's not very much above survival — you pay 18 percent. That's exactly the rate that the five major banks in Canada pay in tax. Mr. Speaker, that is a national disgrace. We have allowed those five banks and their smaller colleagues — there are six more that are still very powerful — to grow and grow and to dominate the financial institutions of Canada to such a degree. And then my friend from Vancouver South says: "Let the free market handle it." Five banks dominate the financial decisions of this entire country. They make this government look very tiny. It doesn't matter very much what Social Credit does here. The five banks are laughing all the way to the bank. You can't let the free market do that, because that is not a free market. The institution of banking has now dominated and controlled the economic life of Canada. We need to interfere in that private sector, and the government must interfere in that private sector in a very major way.

When we've looked at the overall budget to try to see what it's done and what it hasn't done, there is a group of citizens in our community which continues to be ignored by the budget. The reason I suspect they're ignored is because they don't have very much political clout, and that's young people between the ages of 15 and 24. At the present time, if you look at the unemployment rate in that category on a Canada-wide basis, about 12.6 percent are unemployed; 387,000 young people in that group who are available for employment are unemployed. It's now 14.4 percent, if you went to the unadjusted figure. In British Columbia that figure is 13.5 percent of young people aged 15 to 24 who are

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available for employment and are unemployed in the province of British Columbia.

This isn't really a partisan question, but I think we have to start looking at changing the way society operates in terms of its young people. I have strong reservations, for example, around that movement which is so opposed to compulsory retirement. I was a little disappointed, for example, that Kathleen Ruff, who did, I think, such an excellent job in the province of British Columbia, chose to lead off her first program on "The Ombudsman" with the CBC by protecting a pilot who obviously wasn't suffering any financial pain from his worries about having to retire and possibly allow some young fellow to come along and be a pilot. We have got to think seriously about opening the bottom end of the employment scale for young people; grey heads can't continue to control all of those positions.

AN HON. MEMBER: What about grey beards?

MR. LEGGATT: Grey beards too.

But, you know, I listened to the Minister of Tourism (Hon. Mrs. Jordan) get up and tell me how imaginative the budget was. It's not an imaginative budget. I think anybody, trying as we will to be as objective as possible.... I'm saying there are some things in there that are interesting, but imagination it doesn't have.

There's nothing in here to create employment. Let's look at some of the things that can be done. In terms of job training, by the way, the amount that this government has been spending in regard to job training and in regard to post-secondary education has continued to decline in real terms, both in terms of the amount that the federal government has been.... The federal government has been picking up all the slack and this government has simply been sitting back allowing it to increase its investment.

But, again, employment can no longer be created in the traditional way. The fact is that the investment that has received a guarded accolade, or a guarded bouquet, in the forest industry cannot, if it continues to operate in the same way, provide significant new employment. The reason is that at the present time most of the capital expenditure of the major mills has been made. Crown Zellerbach and MacMillan Bloedel have made very significant investments; the purpose of those investments is to improve their competitive position and also reduce their labour force. The more capital intensive the industry becomes the less people we are able to employ.

So what's the answer, since we're trying to put ourselves out of the business of employment in the labour force? Well, there's nothing the matter with a billion and a half. I see the Minister of Forests (Hon. Mr. Waterland) here; I'm glad to see he's listening to this debate. It could perhaps be more. The trouble is that it's very late. The statistics now show that we will have, in a period before the turn of the century, 35 percent less fibre in the province of British Columbia than we have now. That's going to mean less employment no matter how many ways we slice it. The kind of intensive forest management that's necessary to even keep our employment level at the present has to be even more than the five-year program the minister has announced. I see he's shaking his head. I'll be interested to hear what he has to say in terms of what is an appropriate amount in terms of maintaining the present employment level and maintaining the present fibre levels in terms of the total industry.

But, nevertheless, you have to create new forms of employment. Let me give you some examples. Along the Fraser River, for example, there are literally hundreds and hundreds of man-years that should be employed to take the wood off those beaches to provide, I would say, free wood, to people who wish to burn it, or modestly priced wood. Tremendous numbers of man-years could be employed simply in cleaning up every river in the province of British Columbia, using that wood resource to fire our homes, encouraging the turnover from oil, as has been done to some extent — and the government, I know, has taken away the sales tax on wood-burning stoves; that's good. Now we can start providing people with fuel at a very modest cost, if we simply organize the removal of wood debris up the coasts and along the rivers. There is a tremendous employment potential in that area that has never been tackled.

I mentioned earlier the question of the private sector and the provision of land in terms of housing stocks. One of the difficulties we're having lies in this problem of seeing municipalities unprotected from the pressure of industrial development. I mean that a council such as Langley, Abbotsford or Chilliwack is constantly under pressure from its own citizens to remove land from the agricultural land reserve in order to improve its revenue position and reduce the mill rate. Now I would suggest, Mr. Speaker, that that's an example of what bad planning is all about. Industry, I believe, should be developing a pool of funds with special grants and aid to those municipalities which have a significant section of their land in the agricultural land reserve. When they have that significant section of land, it seems to me they should be entitled to go to the fund that has been developed by industry, in order to protect their farmland.

I see no reason why the citizens of a farm community should be in a position of, in essence, subsidizing other communities in order to protect this valuable resource, the agricultural land reserve. So it seems to me that if the government wished to show some imagination in this field they would develop a formula around an industrial tax from which there could be a pool. Farm communities could call upon the pool to assist them in terms of the actual revenues required, and to some extent remove the pressure they're getting from their own citizens to remove farmland from the reserve and place industry in the area.

The other advantage of that is that it stops the whipsaw effect of every municipality constantly competing for industrial development. The result is that in many cases they're willing to give away the store if only they can get an industry there which will improve their tax base. I'm suggesting that the right answer is to rationalize that, to provide an appropriate pooling arrangement rather than an equalization arrangement.

The other aspect briefly dealt with previously is that this budget does not come to grips with the question of foreign ownership. I'm somewhat concerned that we still haven't seen legislation in the province of British Columbia to deal with the purchase of land from abroad. There are a number of other jurisdictions.... Prince Edward Island, I guess, has one of the oldest laws which restricts non-resident land ownership. You can only buy 20 acres in Manitoba. Alberta has legislation which restricts foreign ownership. I'm not saying that we should be absolute purists about it; I'm aware that there is a role of some kind. But I believe a balance has to be struck, Mr. Speaker. I believe that we would look at either

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size limitation or area limitation in terms of foreign investment, because if we don't, young people will never have an opportunity to own anything in the province.

I'm always happy to put the Minister of Municipal Affairs (Hon. Mr. Vander Zalm) to sleep, because I know he's the kind of person who enjoys it.

The non-Canadian investment in B.C. farmland is probably even more of an emergency and a crisis. Here again, I think we all need to take a very serious look at that kind of investment.

One of the ways to develop surpluses, by the way.... I've gone on far too long; I can see that. One of the interesting ways to develop surpluses is not to tell people about the programs you have in place. I want to put on record that the present Pharmacare program provides for 80 percent of the cost of drugs to be reimbursed by the government on claiming it with the program. At the present time there is no notice that I've been able to discover that that refund is available to the citizens of British Columbia. I have some serious questions to raise, Mr. Speaker, as to why this government hasn't gone on record as notifying the people that they're entitled to those refunds. We are looking at a great many people who will not have an opportunity of presenting their claims, for two reasons. One is that they're not notified. The only notices are in drug stores, and obviously unless you're buying drugs constantly, you won't be reminded of them at the time.

But there's another problem, and that is that those carriers of the plans, who are traditionally under extended coverage, have different deadlines for claims under their plans. They have deadlines in June, etc., which means that those who are filing with the extended plans are missing the deadline under the government plan. I know this is simply a matter of planning and bookkeeping and so on, but I'm hopeful that we will see some advertisement to the people of British Columbia that they are entitled to file 80 percent of their drug expenses over the first $100 by March 31. It seems to me a worthwhile and useful expenditure to notify people of the benefits they have under that particular program.

I'm going to conclude this rather boring address by saying that the one thing this budget has been clearly short on is imagination. I live in hope of seeing another look at job creation, and a more imaginative approach to the cost-of-living; but we'll see what develops.

MR. REE: I was most interested to listen to the awards from the member for Shuswap-Revelstoke (Mr. King) this afternoon, and I have considered the appropriate award, bequest or wish that we might have for him. It is that at a very early date, and certainly not later than the next election, he enjoys the benefits of his pension.

Interjections.

MR. REE: His legislative pension, obviously.

I've listened to the debate going on here for the last three weeks, and I'd like to commend one of the members of the opposition, the second member for Vancouver Centre (Mr. Barnes), for his honesty in a comment that he made early in the session, when he asked the Speaker for some arrows so that he might be able to shoot them at this side because they did not have any of their own. It appears that this has been the modus of the opposition since this House has sat, and particularly during the debates — all of the arrows that they have been able to muster have been provided from the fourth estate, and they have not been able to come up with any of their own. In light of that, I would like to correct the member for Rossland-Trail (Mr. D'Arcy) in his impression that we have been alleging that the opposition have possibly been controlling or have an interest in the media. Mr. Member, I suggest that the media has had the control or direction of the opposition to such an extent, in fact, that the other day on the radio — I believe it was on CJOR — the hotliner, in answering a question as to why he took the position he did, indicated that it was required because the media had to be in opposition, and that that might be because the opposition is not doing the job it's supposed to do.

At any rate, it's been most interesting to listen to the arguments and the debate coming out with respect to the budget. The antagonism towards any power development in this province.... Well, we can go back to the original two-river system, which was opposed by the opposition back in, I believe, the sixties. They're adverse to the Rossland Dam, the Site C development, to the Cheekye-Dunsmuir line. They would possibly like no power on the Island here, so that we would have no night sittings; but they just seem to be adverse to any development of power. Their B.C. Petroleum Corporation policy of penalties with respect to lack of drilling frightened the drilling operators out of the province, so there was no development during their period of 1972-75. All of this opposition to the development of power has finally allowed me to see what NDP actually means, and it's not necessarily New Democratic Party. I think it's just the "no dam power" party. That to me is just what the NDP stands for. They want no dam power in this province. Their only suggestion for power comes from that member for Nelson Creston (Mr. Nicolson), who, I think, supports his colleagues out of Saskatchewan in dealing with nuclear power. Again, there is a definition of the NDP for that — it's the "Nuclear Development Party," and I feel this is more indicative of their policies, or lack of policies, than anything as far as a new democratic party is concerned.

I listened to the member for Coquitlam-Moody (Mr. Leggatt) here. The other day he was criticizing the surplus of $500 million that the government has from its previous budget, its revenues from last year, and he was indicating that in any organization 5 or 10 percent out in its calculations as to its revenues, the comptrollers or the planners should be fired. I might suggest to that gentleman, I don't think he is probably capable, or that many of us here are capable, of anticipating our revenue for the next year within 5 percent — that is, if we have any enterprise, we cannot calculate what our revenue in the next year would be. I cannot do it with any certainty, within 5 percent of what my actual revenue will be. I'm sure that any member over there who has any interests outside his remuneration as an MLA cannot calculate what his revenue will be for the next year within 5 or 6 percent of what it actually ends up being.

He also indicated that it was a dreadful mistake to have this surplus. One other member indicated that a surplus was just as bad as a deficit. I feel that a surplus certainly cannot be as bad as the deficits we sustained during 1972-75, which we are still paying for; and, in fact, last year and this year we have had to pay $26 million towards them. That is $26 million which could have been used for other developments within the province — for assisting in homes, accommoda-

[ Page 1657 ]

tion, medical care, hospitals, highways, social services — a number of projects which we are all losing because the opposition wished to invest its money in diminishing-return projects rather than in projects that this government sees fit to invest in. It is utilizing its revenue in appreciating projects — projects which will give a return to the province, give a return to the people of British Columbia, to free them from costs in the future.

Again, the member from Coquitlam-Moody was uttering a quasi-platitude about the $200 million mortgage program by suggesting that it should be $1 billion and not $200 million. Well, if we had been in the position to offer a $1 billion mortgage program — which I think would be a very desirable program for the people of the province, although there are other things the people need — it would have been criminal of us, because we would have been taxing the people of the province too heavily in the past to pay for this and subsidize housing.

It's most interesting to note that the member for Coquitlam-Moody supports the provision of property, building lots, to private contractors. It was always my understanding that the opposition were adverse to home ownership. I wonder whether their policy has changed in the last while, since they've been in opposition and are trying to get votes from that segment of the community.

[Mr. Speaker in the chair.]

I found it interesting that that member is moving further away from the seat of power on the opposition benches. I don't know whether that's an indication of one thing or another; but he seems to be further removed from the leader's chair this year.

AN HON. MEMBER: They let him in for question period.

MR. REE: What questions?

He did seriously criticize that $500 million surplus. Well, without that surplus .... Look at the benefits and the programs that are being instituted for the benefit of the people of the province in this year's budget — the additional moneys that are available for hospitals and medicare treatment, for transportation, for highway expansion, for the development of the highway system in the lower mainland, the Annacis Island freeway, additional moneys for education, for medical care, and for our denticare. The plan for the implementation of the five-year forestry program, which is being proposed, will bring continual benefit to the people, to maintain employment in the province and to maintain a usable yield from forestry, without the industry of the province suffering in any one particular year. We are planning for energy self-sufficiency. If we had not had this surplus, we would have not been able to do a great number of the worthwhile programs which the government is entering into in this coming year. Mr. Speaker, this is a very sound and solid budget. It has been well thought out and planned for the people of the province now and in the future. I must endorse this budget as I know every member of this assembly should do.

MR. HALL: As this debate now draws to a close, I think I should tell you that I will be the last speaker from this side of the House. [Applause.] Is that welcome relief or congratulations; I'm not sure.

I want to go over the debate in some detail. I've sent out for more material because I know the Minister of Finance particularly wants to fully understand what it is we've been trying to say from this side of the House and what his colleagues on the other side of the House have also been trying to say in the last ten days.

Before I do that, Mr. Speaker, I have a message. As often happens with ceremonial occasions, one of the awards that my colleague for Shuswap-Revelstoke (Mr. King) was giving out was missed, and that was a gift to the member for Omineca (Mr. Kempf). It's simply a storage box for his collection of old cassette tapes. I know he'll enjoy that in the years to come and cherish it as he looks back on his memoirs and records of the peak periods in his career as chairman of the Social Credit caucus.

Mr. Speaker, the budget debate, the fifth debate since the return to power of the minister's party, has covered a fair amount of territory. We've seen the ministers on the other side of the House, from the treasury benches, rise to support this budget. We've seen the members of the opposition oppose the proposals in the budget from a number of points of view. We've seen the supporters of the government telling us that it's just what is required to meet today's problems, and on this side of the House we've taken our places to demonstrate that the plan that should be the case, the basis of the budget, that should be the modus operandi of the treasury benches in the next few years, is woefully inadequate.

Indeed, I think we demonstrated to you, Mr. Speaker, that there is no plan on the other side. There is no economic plan on the other side upon which to pin this budget. In the debate, for instance, on the amendment, we, the member for Nanaimo (Mr. Stupich) and myself in particular, said that just by throwing money at a problem, it won't go away. If there's a capsule comment that could reflect the state of mind of the Minister of Finance and his advisers about this budget it is simply: "If you've enough money and you've got some problems, just put them together and they'll go away."

Mr. Speaker, that isn't going to happen. It won't go away. The problems facing the government and British Columbia won't go away because of this budget, no matter how much money the Minister of Finance has to apply to those problems. I don't want to go over the ground again of the problems of unemployment, cost of living and interest rates that we dealt with in the amendment. Overtaxation to produce surpluses guaranteed by underexpenditure is the story of this budget. That's how we get to the bottom line that seems to attract so much attention from the treasury bench spokespeople on the other side.

The story of the budget, the $5.8 billion — not the two pieces of legislation we'll be discussing tomorrow — is how it's going to meet the problems and how it's going to play its part in the role chosen by the government to meet and to enter today's economic world. We've often been accused in budget debates of not putting any flesh on the bones of criticism. We've been criticized in the past by members opposite for not putting forward some proposals, that because we're against the simple arithmetical calculations we're against those expenditures. That's not so, Mr. Speaker. Our vote against the budget is against the government's economic strategy, against the government's plan.

Our votes about the economic expenditure of dollars will

[ Page 1658 ]

come in vote-by-vote discussion whether they're for or against. We've been critical in the past four budgets. We've always put forward constructive proposals, as well as being harshly critical. I think every single member on this side of the House has put forward proposals during the last ten days. If the members opposite don't choose to hear them, that's their problem. But I'll tell you this: all we've heard from the other side is a refighting of the 1975 election, a paraphrasing of all of the false advertising of the 1975 campaign and adulation about $5.8 billion.

The Minister of Finance, the Minister of Forests (Hon. Mr. Waterland) and the Provincial Secretary (Hon. Mr. Wolfe), all of whom have spoken in the debate and who don't understand what it is that the opposition is trying to say, and that's fair enough in the debate.... I now include the member for North Vancouver-Seymour (Mr. Davis). Three of those members, and here I don't include the member for North Vancouver-Seymour, seem to have been overwhelmed by the sheer size of the budget. When I listened to the member for North Vancouver-Seymour I was just reminded that he, as distinct from every other member on the other side who could have just as easily used last year's budget speech debate this year.... He is one Socred in this House who couldn't use last year's budget speech this year-one member only. Last year everybody who spoke in the budget debate was full of admiration. They talked about "getting things under control," "realistic increases in levels of expenditure," "tight belts," "don't do anything that we haven't already told the municipalities to do." The member for North Vancouver-Seymour said that he admired that approach. It's the first jurisdiction anywhere in North America, I think he said, that took this position, and he welcomed it. That member can't say that today. That member cannot use the same budget speech of 1979 in 1980.

Mr. Speaker, we've had some critical things to say and we've had some proposals to make. This budget fails, in our view, to develop a coherent, economic strategy, one that would create opportunities for employment, one that would see the economic base of the province diversified. A strategy that would do that has got to start somewhere, Mr. Speaker. It may as well start with the Minister of Finance — a brand new, shiny minister. Such a strategy must begin with the natural resource sector since that's the backbone of the economy. It's highly amenable to government control because of provincial resource ownership, and an appropriate strategy can be broken down for that sector. Nowhere in this budget or in his speech has he referred to them.

Let's take, for instance, the maximization of economic rents. Rents are revenues received over and above the normal returns to capital and labour. Of late, resource revenues have been substantially above normal cost of production. The result has been record profit levels — high wages in the resource sector and high returns to the Crown. Rents are collected by the province in the form of stumpage and royalties, and they are far lower than they could be. For example, stumpage is considerably higher than in the northwest United States. Mineral royalty rates on B.C. coal are derisive. Rents gained by the province are not being spent in a coherent way.

The record revenue surplus of last year, a windfall gain from soaring commodity prices — that's the luck that commentators have been talking about; you can call it whatever you want, but that's the luck that economic commentators have been talking about — is largely being disbursed across the range of government activities. It could have been mobilized as part of an economic development fund comparable to the heritage funds of Alberta and Saskatchewan. There's a danger that cuts in the normal budget could be acute in future years if and when resource rents decline due to recession. Mobilizing these rents for investment purposes would direct those windfall gains to the goal of economic diversification. That's what been done in Saskatchewan. There is no sign in the budget speech of this kind of approach.

A related question is: who gains those rents? B.C. companies have earned record profits in the last year, particularly in the mining and forestry sectors. The present government feels that these profits will result in higher investment and further development of the resource base. I suggest to you, Mr. Minister, that's questionable. That is not guaranteed. Nobody in your ministry or the ministry of the member for South Peace River (Hon. Mr. Phillips) will give you any firm information that that's to be the case. The B.C. forest industry is, given its present structure, a mature industry. We can expect little in the way of creation of new capacity unless new products are developed. This is unlikely in view of the past practices of the integrated majors. Profits have, in part, gone to buy up competitors, to bid up the price of private land. Investment is not up, and it's not likely to be.

Another point, Mr. Minister of Finance, is that foreign ownership means that substantial portions of these record profits are being leaked out of the provincial economy via the unusually high dividend rates that have been paid. So, again, we have failed to gain the kind of economic rent we should have gained. Economic forecasts show little new capital investment. I mentioned a few of the base statistics in my contribution to the amendment debate.

Those facts are there. They are not culled by any radical group or from any magazine rack, but they are from the conference board. They are from the B.C. Employers Council and the surveys done by the honourable Bill Hamilton. Economic forecasts show little new capital investment in the province in 1980. That's hardly surprising in view of the current recession, but it does imply that the rents — that is, the gains I spoke of earlier — would be better invested via the public sector.

On this point, resource companies are using their profits in ways that add no new capacity for jobs. For example, oil companies and BCRIC are buying to establish concerns with no net gain to the provincial economy. Kaiser Resources uses its profits to bail out Kaiser Steel of the U.S. — no net gain. That's what members along the bench here have been saying about BCRIC.

The discussion about BCRIC... the vote has been taken. The battle, on the first round anyway, has been dealt with. But we're still here to tell you that BCRIC isn't doing a good job. I think we all want to see BCRIC do a good job, heaven alone knows. The resources of BCRIC that we all applauded and that form the backbone of BCRIC are those that were seen and voted for in the main by this party when we were on that side of the House.

The economic development strategy that I'm talking about would identify further opportunities for processing our natural resources. This is the forward linkage of the kinds of things that you should be doing. It's notable in the so-called five-year forest plan that the member for Yale-Lillooet (Hon. Mr. Waterland) talks about that it doesn't touch on that area at all, despite indications that some small companies are pioneering new products with some success.

Limited incentives are given to encourage further proces-

[ Page 1659 ]

sing of minerals. It's still notable that B.C. now smelts less copper-our major mineral product-than any other major producer. Again, the question of furthering processing demands comes up, and that is that attention be paid to the issue of foreign ownership. Because unless you've got some part of the decision-making process, it is not going to happen. In this light it's worth noting that Kaiser — our largest coal producer — is now effectively controlled by its customers, a consortium of Japanese steel companies. Opportunities in the fishing industry are inhibited by the near monopoly recently gained by far eastern trading houses.

There are criticisms, yes, Mr. Speaker. There are suggestions as well from this side of the House on every budget speech I've ever heard in 14 years in this House. Opportunities of further processing include in forestry the manufacture of building materials to higher specifications. In newsprint there's been little expansion over the past few years. In finished wood products for non-construction use....

Interjection.

MR. HALL: I'm talking about capacity, Mr. Member. I'll come to you in a minute or two. We've got some figures on you that are going to be very interesting.

Methanol as a potential energy source, other chemicals and the natural gas and petrochemical field... no mention at all in your stuff, Mr. Member for South Peace River (Hon. Mr. Phillips), or in the minister's budget speech. Any such initiatives would diversify a highly vulnerable staples-based economy. Some industrial opportunists will gain advantage if they could obtain energy at less than going prices. These are not mentioned in the government's energy policy.

Those are the forward linkages that could come from involvement in the economy, from getting hold of the thing and rattling it around a little, having a look at it and making up your mind to do something. You should be seizing the opportunity because, as I said before, having an effect on the provincial economy cannot be obtained every day. There are only certain days, certain times and certain opportunities where you can grasp the chance. If the government doesn't see that it's got a role to play in this, of course, those opportunities are missed all the time.

The backward linkage — that is what can happen from this kind of thing backing into the resource field — involves deciding which imports of the resource industry could be produced locally. In large terms it's never been done, but we have some industries which are natural candidates and deserve encouragement — producers of logging machinery and capital equipment for mines. The fact that this area is given little thought is suggested by current energy development policies. For example, the $1 billion for Cheekye-Dunsmuir involves huge capital expenditures outside the province. Alternatives with higher local content — small-scale hydro, refurbishing of existing house stock, refitting — don't seem to have been reconsidered. They don't seem to have attracted the attention at all of the treasury benches, according to the material in front of us in this budget debate.

The government's energy policy fails to discuss these opportunities, as does the budget. A relevant energy policy for B.C. would be one that used our resources in order to create a newer, potentially world-competitive industrial sector. Again I mention some of the modern technologies that should be looked into.

These aren't ideas that I believe are cast in stone or that we should be wedded to forever and a day. I'm saying that they are ideas which have merit not only in themselves but because they have been so conspicuously ignored by the government opposite, who have simply undergone a mathematical exercise of incremental budget production. That's what's happened over there. That's why we come up with a figure of 5.8, a combination of incremental budget production and a one-shot political sideshow of expenditures related to surplus.

While I'm on the subject of the figures of the accounts of the province, Mr. Speaker, I want to take a moment to offer some particularly serious criticism of the minister who presented the budget, and I suppose his predecessor. Ten days ago the auditor-general of the province, Mrs. Morrison, released her second report since she took on the task of auditing the government's books. In a report strongly critical of the Socred government accounting practices, the auditor general reveals disturbing information about the bookkeeping of the province. Obviously, with such a large budget, $5 billion, involving many people who handle financial transactions, there will be occasional problems. But the auditor general reports that control over provincial revenue and expenditure failed to meet the most recognized basic standards. This recurring theme throughout Mrs. Morrison's report is made even more serious by the statement that many of the problems identified in the 1978 report have not been rectified. There are 24 recommendations, you'll be interested to know, from last year's report which haven't been acted on at all.

In her latest report the auditor-general touches upon accounting methods which, she says, are so inconsistent that questions can be raised as to whether identifiable policies are actually in existence. She reports that insufficient controls exist to ensure that revenue is billed, collected and accurately recorded. She identifies the Ministries of Education, Health, Human Resources, Municipal Affairs, Housing and the Provincial Secretary as examples where the collection of accounts receivable from other governments and agencies was unduly delayed because of lack of corrective action concerning billing and collection in the ministries themselves. Stories of accounting foul-ups such as the transfer of $4.3 million from the superannuation fund account to the general fund account without the knowledge of signing officers of the superannuation account, the transfer of $300,000 to a government bank account in the United States without the knowledge of the treasury section of the Finance ministry, and unrecorded investment of $350,000 from a special purposes fund all point to the need for a clean-up of sloppy accounting procedures in government bookkeeping.

I was particularly disturbed to read about problems within the accounting and management systems of the public trustee. As an MLA I've had occasion to deal with the public trustee, and I'm sorry to see that that department, which is responsible for the function of official guardian and official administration of our citizens, isn't being too well handled by this Ministry of Finance. For instance, non-cash assets, which are jewellery, real estate and automobiles, totalling $27 million are recorded in the public trustee's records. The comptroller-general records a balance of $59.7 million. Most of the differences were identified, but an unreconciled balance of $2 million remained as of the date of the audit.

The Minister of Municipal Affairs (Hon. Mr. Vander Zalm) should perhaps check into the $1.9 million in the

[ Page 1660 ]

report, criticizing his ministry. Property held in that ministry isn't accounted for correctly.

Mr. Speaker, Mrs. Morrison also detailed problems of missing securities in the jurisdiction of the public trustee. Other ministries received criticism. It's obvious the government has been conducting its bookkeeping in a way that would be unacceptable to anyone who has responsibility for balancing a household or business budget. We hope the auditor-general's recommendations receive the attention they deserve, and we look with some anticipation for the minister's presenting us with legislation that has been foreshadowed. I welcome that, and I hope we have a good debate about it.

What's worse, Mr. Speaker, there are two single foul-ups that I want to draw attention to, because they affect members of the House and prevent its appointed agencies from doing their work. I refer to the failure of the Minister of Finance to have his staff report to the auditor-general on time.

On this statutory failure of the minister's staff I quote page 8 of the auditor-general's report:

"Due to numerous and continuing revisions of the financial statements and to delays in receiving related notes, I experienced serious difficulties in completing my reports in good time. The Financial Control Act requires the comptroller-general to submit the statements constituting the public accounts of the Ministry of Finance on or before the 30th of September in each year. Although my audit field work was substantially completed by the 30th of September, 1979, the financial statements in final form were not delivered to me until the 15th of February, 1980."

Now that's pretty grim, in my view. It's only by imposing extensive additional work on the auditor-general's staff to examine and re-examine that it was possible for the auditor general to meet the deadline imposed upon her by the statutes of this province.

Secondly, we had the failure of the minister to meet the statutory requirements here in this House of presenting public accounts for the last complete financial year. It clearly states that the public accounts have to be presented within 15 sitting days of the session. We have heard only half the story. That follows on in tandem from the report of the auditor general.

This is the first Minister of Finance who ever failed to keep the books as laid down by Social Credit philosophy — by presenting them to this House. The documents tabled on opening day are nothing more than a slightly expanded version of the document that used to be delivered to MLAs in September or October of the financial year-end.

MR. RITCHIE: How would you know?

MR. HALL: The member for Central Fraser Valley asks how we would know. How would he know? He wasn't even here then. At that time he was looking for a Conservative nomination somewhere, so I don't know how he would know anything about it.

Mr. Speaker, perhaps you would examine the remedies and punishments for that poor performance. I think we could go to a justice of the peace and lay an information .... But I really like the member for Saanich and the Islands (Hon. Mr. Curtis). We'll give him another day before we ask the Sergeant-at-Arms to check the key to that small room downstairs. Nevertheless, it's a pretty pathetic performance by that ministry. If you had been there a little longer, perhaps with some help from the Speaker we'd be more personal. I think it's a serious omission.

During the debate there's been some detailed criticism of particular programs that are a part of the general overall speeches given to us on budget day. Tomorrow more will be forthcoming from this side of the House as we deal with the finance bills and the estimates.

In the general picture we have dealt at some length with the obvious inability of the Ministry of Industry and Small Business Development to meet that ministry's mandate. The minister was in earlier but he has now left. But I'm sure he reads the Blues, and he'll pick up the information from them.

For the Ministry of Industry and Small Business the most recent figures tabled in this House show the following: the 1979-80 estimates contain $36 million on programs which the minister spoke about at some length. The ten-month figures given to us on budget day indicated that $22.5 million of that $36 million had been spent; on a proportionate basis that figure should have been about $30.4 million. We're $8 million short of expenditures in the Ministry of Industry and Small Business at a time when, as I said, if ever there was a ministry of government that should be doing something it's the ministry headed by that loquacious, voluble, excitable minister from South Peace River.

The partial public accounts for 1978-79, tabled on opening day, February 29, show that the estimates for the Ministry of Industry and Small Business for that year were a total of $29.2 million. Of that $29.2 million how much is spent on all the great programs the minister is always telling us about? It's $17.9 million, a shortfall of $11.3 million. An amount of $11.3 million was allocated for expenses, for budgetary plans, for work and something for that minister to do, and was never spent. He has no plan and no program. That's the validity, that's the reference, that's the connection between some of the things we've been saying on this side of the House. Again, either pathetically weak leadership or inexcusably poor budgeting is responsible; it's one or the other.

Here is a detail: out of the much-vaunted estimate of $1 million for small business training two years ago, less than 20 cents of each of those dollars was expended. What kind of a program is that? I remember reading the speeches of the Minister of Industry and Small Business and how he was going to do this and do that. Out of the money given to him for that program he spent less than 20 cents on a dollar. He got more than $1 million of publicity out of it, I'll tell you that. Perhaps that's all he wanted.

The latest figures indicate that out of an allotment of $5 million for metro area small business assistance, which again was part of a one-shot political sideshow surplus bill passed here a year ago, as of January 31, 1980, not a single nickel had been spent. Not a nickel, not a penny. We all stood up and voted in our places on this side about that special revenue appropriation bill. We heard speeches — the desks were banged. "Onward and upward!" said the minister. Ten months later not a penny was spent. That's how you got your surplus. You should get off your fat surpluses and do something about putting the programs into effect. Nothing had been spent; ten months, no action. That's the kind of cynical political arithmetic, the type of sideshow economics, that won't meet the challenges that were mentioned in the para-

[ Page 1661 ]

graph that appears over the top of the photo of the minister's head on page 1 of the budget.

Mr. Speaker, the budget, big and bombastic though it is, won't serve the people in the eighties. It's not responsible, contrary to the words appearing over the top of the minister's head on page 1 of the budget.

Our main criticism of the budget is that it's not responsive or sensitive to the three areas outlined in speech after speech after speech — again, in counter-distinction to the claim printed over the top of the minister's head in the budget speech.

Lastly, Mr. Speaker — and I think the minister may know what I might be going to say next — our real worry is that the serious problems, the crisis situation in housing, mortgage rates, planning for the future.... The best solutions, in fact, are, in their turn, over the minister's head.

We won't be supporting this simplistic, incremental, big-spending budget, which is supposed to be the best because it's the biggest. We won't support it and you can make all the speeches you like about politics. We know that you like to fight the fight of 1975; we know that some of you, like the minister from Kamloops, fought the fight of '79 in one of his contributions. There was another fight just recently — that of 1980 — and I want to tell the members opposite that they should examine the results of that election in 1980 very closely. I would advise the member for Kamloops and the two members who represent the ridings of the East Kootenays to look at the people's decision in 1980. I'd like the members opposite — the member for Omineca (Mr. Mr. Kempf), for instance — to look at the federal vote in Omineca. I'd like that member to look at how the New Democratic Party candidate, Mr. Patrick, fared in his riding. Interjections.

MR. HALL: All these fellows want to bet. I'll tell you what: I'll make all the wagers you like. All you do is just call the election.

MR. SPEAKER: Order, please. Would the hon. member who has the floor please address the Chair. It will assist us in maintaining order.

MR. HALL: Yes, Mr. Speaker. Maybe a wager is indicated between gentlemen, but the real wager, the real test, will be the next election. In not supporting this budget I welcome the call of the next election as soon as possible.

MR. SPEAKER: The Minister of Finance closes the debate.

HON. MR. CURTIS: In this House, in my office, and by reading the Blues where necessary, I've listened to and reviewed this debate over a good number of days with considerable interest. I thank some members for their very constructive observations. Mr. Speaker, I must express dismay, however, over the short-sighted nature of some of the comments which have emerged from members of the official opposition, because frankly — and the member for Mackenzie (Mr. Lockstead) would be in this group on this occasion — in a rush to criticize, the official opposition has failed to grasp, to appreciate or to admit some of the most salient features of the 1980-81 budget document. This year's budget is much more than a summary of revenue and expenditure plans for the coming year. It is a thoughtfully prepared plan designed to marshal the province's financial strength to meet the many economic and social challenges of the 1980s.

Major new initiatives have been launched to regenerate British Columbia's natural resource strength — and we'll be speaking about that in the course of coming weeks and months to effectively respond to the challenges of the new energy situation and to improve important public services.

MR. LEA: Who wrote that?

HON. MR. CURTIS: Mr. Member for Prince Rupert, you ask that question whenever you run out of something else to say.

In spite of these accomplishments, the budget has been attacked for the issues that it supposedly does not deal with, Mr. Speaker, from the opposition's rhetoric over these past almost two weeks, we are told that the government is pursuing a fiscal policy approach which is insensitive to the problems of inflation, unemployment and high interest rates. These charges are not correct. The increase in the consumer price index in British Columbia for 1979 was 7.7 percent; for Canada as a whole it was 9.1 percent. It's clear that this government's policies have contributed significantly to our low inflation rate.

Interjection.

HON. MR. CURTIS: Mr. Speaker, I listened quietly, patiently and with objectivity as the second member for Surrey (Mr. Hall) read extensively from notes in wrapping up for the official opposition, and I would simply ask for the same courtesy now.

It has to be remembered that in the last year of that party in power the inflation rate in this province stood at an unacceptable 11.1 percent. What this means then — and it will be admitted by all, I'm sure, in this House — is that the inflation rate has decreased by over 30 percent in just over four years of Social Credit government. The budget further attacks inflation with selective tax reductions aimed at reducing the impact of higher energy costs on the public and moderating other basic living costs. And they were spelled out in considerable detail.

On the question of unemployment, the seasonally adjusted unemployment rate for 1979 was 7.7 percent, which was down from 8.3 percent in 1978. Our problem now is that we have made British Columbia such an attractive place in which to live and work that we cannot provide the jobs fast enough. The labour force in British Columbia is increasing — make no mistake about that, members opposite. The budget seeks to help alleviate this problem by providing significant funding for new capital projects which will expand employment opportunities while building for the province's future economic growth.

Interest rates, as members opposite must know, Mr. Speaker, are not set by a provincial government; and some would argue that Canadian interest rates are not even set in the nation's capital. But be that as it may, the current high level of interest rates is of concern to this government. This should be evident — indeed it is to many of our citizens — by our commitment of $200 million to mortgages for new hous-

[ Page 1662 ]

ing in this province at an interest rate of 9¾ percent, and our continued assistance to farmers and small businessmen through other programs — through the agricultural credit program and the low-interest loan program.

I'd also like to reply to concerns about the apparent rise in the ratio of provincial spending to gross provincial product. For 1980, British Columbia's gross provincial product is expected to approximate $35 billion, an increase of 11.5 percent over 1979. Because of the inclusion of substantial surplus and statutory appropriations from current and prior fiscal years in the 1980-81 general fund expenditure totals, spending is slated to expand by some 16.8 percent to $6.15 billion. On the surface, this will increase the ratio of provincial spending to GPP to about 17.5 percent, equal to the level witnessed in 1975-76. Members should note, however, that the effects of this high spending share are entirely different from those which applied in 1975-76. In no way will the spending of surpluses restrict or constrain the economic room available for private sector expansion. In fact, it will help. The purposes to which these funds are dedicated will bolster future opportunities for the private economy, and further, if the surplus and statutory appropriations are excluded from the general fund account, a better picture of this government's ongoing fiscal policy directions will emerge. Without these surplus allocations 1980-81 expenditures are expected to approximate only 15.8 percent of GPP, and the spending growth rate falls to 9.9 percent — some 1.5 percent below the projected increase in nominal gross provincial product.

It's also interesting to note the source of the surplus funds which have permitted the special allocations for 1980-81. Our past surpluses are not the result of personal taxation, but reflect the extraordinary growth in the province's natural resource revenues. In 1979 and 1980 alone, these revenues were up over 70 percent — or over $500 million — as a result of unprecedented international commodity price increases. It's both impossible to assess and presumptive to expect similar gains this coming year, so our decision has been to reinvest these funds for British Columbia's economic future through the surplus appropriations announced in the budget. While the alternative of further tax reductions is, no doubt, a politically appealing one, it would be financially irresponsible to fund them from such a volatile revenue resource.

Members of this House can rest assured that this Social Credit government has not departed and will not depart from its long-standing commitment to expenditure restraint, and to the opening of economic room for the growth and the expansion of the private sector. In short, the 1980-81 provincial budget is one for British Columbia's future, which should be supported by all members of this House, and with great pleasure, Mr. Speaker, I move that you do now leave the chair for the House to go into Committee of Supply.

Motion approved on the following division:

YEAS — 30

NAYS — 26

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

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

ESTIMATES: MINISTRY OF FINANCE

On vote 85: minister's office, $118,976.

HON. MR. GARDOM: Mr. Chairman, I would move that the committee rise and report great progress and ask leave to sit again.

MR. BARRETT: Speaking to the motion, Mr. Chairman, if we're moving the Minister of Finance's estimates, to do the job properly we need that second volume of Public Accounts which, I think, may be overdue on a statute basis. I ask the minister to advise the House when he will provide us with the second book.

MR. CHAIRMAN: Order, please. The debate is not in order at this time.

MR. BARRETT: In terms of adjourning I appreciate that, Mr. Chairman, but to do our job properly we must have that document.

MR. CHAIRMAN: Order, please. Hon. member, that should properly be raised in the House, not in committee. Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Gardom moved adjournment of the House. Motion approved.

The House adjourned at 5:35 p.m.