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CONTENTS

Routine Proceedings

Budget debate

Mr. Stupich –– 4419

Hon. Mr. McGeer –– 4428

Mrs. Wallace –– 4432

TUESDAY, MARCH 10, 1981

The House met at 10 a.m.

Prayers.

Orders of the Day

ON THE BUDGET

Interjection.

MR. STUPICH: Mr. Speaker, I appreciate the Attorney-General's attempt at levity this morning. May I just say that between the hours of 3 o'clock when I left the building and 8 o'clock when I returned I didn't really have time to shorten the speech. I think it was Abe Lincoln who first said — or at least the first time I ever heard of it being said — that the length of a speech varies in inverse proportion to the time that you have to prepare it; and since I had little time, it's going to be very long.

Mr. Speaker, it's been called Black Monday. I recall that when I rose to speak in the budget debate two years ago it was the day after April Fool's Day. I spoke on the Monday, and that evening the Premier called an election. I think there's little fear of that happening after the introduction of this particular budget. I say fear; the fear would be in the minds of the government, but anticipation would be in the minds of the people of the province: I think they would welcome an election at this particular point in time. There's no question but that March 9, 1981 — my brother's birthday — will be a black day in the calendar of most British Columbia citizens.

HON. MR. PHILLIPS: Black and beautiful.

MR. STUPICH: The minister of whatever — small business development — says: "Black and beautiful." We'll deal with that "black and beautiful" aspect of his remark a little later in my remarks.

If it were needed — and I'm not sure it is, Mr. Speaker — the budget presents the most telling evidence yet that British Columbia needs a change in government. The Social Credit government has shown that it is not the least bit shy when it comes to picking the pockets of B.C. taxpayers. This is significant, not merely for the damage done to household budgets by Mr. Curtis' budget yesterday, but also for the attitude it betrays. There is an attitude on the government benches that no matter how tough things have been economically, the taxpayer can afford to pay more — a terribly insensitive approach during a year of tough labour negotiations. Workers will know that a big chunk of whatever they hope to gain at the bargaining table — whatever gains they apparently make — has already been taken away from them by the Social Credit government opposite in the budget presented yesterday. It is significant because a budget which has benefited from inflation to the degree that this one has is now causing even greater inflation. Having virtually indexed medicare premiums, hospital fees, ferry rates, the Minister of Finance now announces he has indexed cigarette and tobacco taxes. Far from fighting inflation, the government has been living off inflation for years.

Take the specific example of sales tax. The minister announced a 50 percent increase in the rate of sales tax, from 4 percent to 6 percent; but when it works through the system, a 50 percent increase in tax amounts to an almost 80 percent increase in revenue from that source alone.

The government has not been content to get fat from inflation; it has decided to go out and cause more. This is surely the result of the taxation measures announced yesterday.

Inflation is the number one concern in the minds of people today, but how the Minister of Finance and his colleagues have escaped noticing this fact is beyond me. The people of this province, like any other, look to their government for answers. What do they get? The very simple answer is that they get a pounding. There is no question but that these budget measures contribute to inflation. There is no question but that most families in the province will be worse off. I estimate that a typical family of four will be at least $850 poorer during the coming 12 months as a result of the budget measures announced yesterday. Or, to put it another way, the cost of living in British Columbia will be $850 higher.

I'd just like to refer to page 6 of the budget this morning where the minister is talking about the economy, the worker days lost, the pressure on labour-management negotiations: "It is crucial at this time for all parties in the collective bargaining process to exercise restraint." At the very time when the minister is projecting to take an additional $800 million out of the pockets of British Columbian taxpayers, he has the gall to urge workers to exercise restraint. A 20 percent increase in spending on the part of government, and urging individuals in the community to exercise restraint.

Not content with benefiting from inflation, the Social Credit government has institutionalized it and given it a shot in the arm to boot. It is clear that the Minister of Finance has brought in a tougher budget than is warranted under the circumstances. I suppose as an opposition party, from a clearly political partisan point of view, we should be pleased about this. But on behalf of British Columbia citizens we are anything but pleased. Some of the old Social Credit politicians used to say that if the people have not suffered enough, it is their God-given right to suffer more. I suppose that is fundamentally true, but I, for one, am saddened by the budget measures announced yesterday.

The budget yesterday is that of a government which is over its head in financial commitments. No one denies that we face financial difficulties as a result of the downturn of sales of natural gas to the United States last year. But the problems faced by the Social Credit administration are not entirely external. Capital appropriations from revenue surplus, which account over the years for grandiose schemes and now for the northeast coal development, are taking their toll.

The push is on to find more sources of revenue, and the government has looked the taxpayer in the eye and said: "You're going to get it." I guess, following the budget presentation yesterday, the B.C. taxpayer can say that they have had it. They have had it with the Social Credit administration. They have had it with election campaign tactics. They have had it with mistakes. They have had it with tax increases. I think they are ready for a change.

In my remarks today I intend to deal at some length with the current fiscal position of the government. I intend to examine briefly the spending priorities of the government. Finally, I'll deal with some of the specific measures in the budget tabled yesterday.

First, dealing with the fiscal position of the government specifically with the 1980-81 provincial budget — it was just a year ago that the same Minister of Finance who pre-

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sented yesterday's budget brought down a record $5.5 billion operating budget. The Minister of Finance proposed further expenditures of $600 million for a total of $6.1 billion. He predicted a surplus of $250 million. The 1980-81 budget was the latest in a series of what I call the "easy surplus" budgets.

Because of booming markets for B.C. resources, caused by world shortages and the decline in the Canadian dollar, the provincial government had several fat years. To take a simple example, natural gas revenues more than doubled during the 1979-80 fiscal year alone. Total natural resource revenue doubled during the two-year period from April 1978 to March 1980.

Interjection.

MR. STUPICH: My colleague says "fool's paradise" — they expected that kind of thing to go on happening indefinitely.

In defending the same Minister of Finance's budget address a year ago, the hon. Minister of Universities, Science and Communications had this to say: "Mr. Speaker, I note that some are even calling it lucky that we've got such prosperity in British Columbia. Lucky. Well, to paraphrase a former federal member who noted that when his party was in power good times came, and when the other party was in power poor times came — are you going to vote for good luck or bad luck?" The people of British Columbia do not feel very lucky today. The budget measures announced by the Minister of Finance (Hon. Mr. Curtis) yesterday are going to take at least $850 annually from the average family in British Columbia. I don't consider that good luck at all.

It is evident that the good luck of the Social Credit government began to turn sour during the last fiscal year. A simple glance at page 38 of the budget presentation shows a capsule summary of government operations for 1980-81. The revised estimate tabled yesterday shows a marked deterioration from the original forecast. Rather than a surplus of $250 million on the operating budget, the minister now shows $84 million. This slide did not occur suddenly, out of a vacuum or out of the blue. The minister, although he would not answer questions in the House yesterday, was obviously aware of the problem during the sittings of the 1980 session of the Legislature. He declared a freeze on hiring in the provincial government, which was implemented in varying degrees throughout the ministries for the balance of the year. I'll have more to say about those particular savings later in my remarks.

In addition the Minister of Finance implemented a number of revenue measures quietly throughout the year. These include: two sets of ferry rate increases; a $30 million boost in water rates levied against B.C. Hydro, which was passed on to B.C. consumers by B.C. Hydro; increases in all manner of vehicle licence and inspection fees; a host of new fees for Crown land applications, and many others. It was only through a series of measures implemented by the Minister of Finance on both the revenue and expenditure side that the province avoided a deficit in the current fiscal year. Let no one forget that we came close to having to dip into reserve funds in order to pay 1980-81 expenditures.

Resource dependency. I think it important that all members of this assembly understand that what has happened during the last fiscal year is a logical consequence of the fact that our economy and our government depend to a large degree upon the exploitation and sale of natural resources. I'd just like to again refer briefly to the budget. On page 5 it says: "Second, while export sales of lumber and natural gas to the United States weakened, much of the slack was taken up by increased sales" — and I want you to notice what the slack was taken up by — "of pulp and paper to West Germany and Italy, coal to South Korea and Brazil, and metals, coal and forest products to Japan." Then the minister goes on to say: "The diversification of the British Columbia economy paid dividends in 1980."

That's diversification? Increasing the export of our raw materials and slightly processed materials to more countries — that's diversification of the economy? There's no diversifying in that. It's simply continuing the same pattern and increasing our dependence upon the exploitation of our natural resources.

Last year the government budgeted $764 million from petroleum and natural gas. The revised estimate according to yesterday's budget is $447 million. This is a drop of $317 million, which is a pretty sizeable sum in anyone's books. At the same time, however, there was a greater than expected revenue from forestry.

The point is that resource revenues are erratic, depending as they do on world markets and other forces. Fluctuations in revenue from these sources are inevitable. That is one reason why my colleagues and I find the Canada-bashing which took place throughout the minister's speech yesterday to be offensive and a totally misleading way to characterize the current budgetary difficulties, This Canada-bashing on the part of this administration didn't start this year; it didn't start last year. You will recall a comment in the budget last year. Reading from the March 1980 budget: "The federal election results could make this more difficult." It's talking about negotiations with the federal government. That early in the game the Minister of Finance was decrying the results of the federal election and anticipating greater difficulties in dealing with Ottawa. It runs throughout the 1981 budget. I've noted page numbers on which I noted Canada-bashing — pages 2, 8, 9, 10, 17, 23 and a whole section from pages 28 to 31, devoted to Canada-bashing at the very time that the government is talking about entering into new negotiations.

It's like the labour-management situation in my riding, where MIPEA and CUPE are at loggerheads and where I'm told — I hope to find out from the minister — that the MIPEA negotiator arrived at the meeting to negotiate and said: "Let's sit down and negotiate. The last offer we made is where our position is; now you proceed to negotiate to our position."

The Minister of Finance said yesterday what British Columbia's position is, and he's talking about going into negotiations. He's going to wait for the federal government to show its cooperation by moving entirely to the British Columbia position. It's the theme of the budget — Canada-bashing. There can be no reason for it other than partisan political gain.

I suppose there have been people from every political stripe in every part of this country who have from time to time tried to blame Ottawa for some problem. I think the Minister of Finance went too far in this approach yesterday. When he says British Columbia's resources and wealth belong to British Columbians and we will share this wealth, but we will do so because that is our choice, not because Ottawa says we must, it does British Columbia a disservice. That's no way to enter into negotiations, Mr. Speaker. British Columbians want to remain Canadians, Mr. Minister, and I suggest that there is a great peril for anyone who suggests otherwise. Sharing with other Canadians is part of being a Canadian.

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Fluctuations in resource revenues are a part of a resource-based economy. You cannot divide Canadians from each other, or the facts from reality, by rhetorical sleight of hand. If the members of the Social Credit cabinet spent as much time worrying about how to avoid tax increases as they do about who to blame, then all British Columbians would be better off.

In 1976 this administration introduced a number of very repressive tax increases. They blamed the outgoing NDP administration for the need to do this. Five years later down the road — and I see the Minister of Agriculture (Hon. Mr. Hewitt) is applauding that; his is one of the budgets that have been reduced substantially and he's applauding it — in 1981, they're blaming the federal government. Mr. Speaker, I would suggest that the people of British Columbia want an end to excuses, want an end to this government looking for scapegoats, an end to the kind of tax increases introduced yesterday.

Capital funds, capital projects, capital craziness. I shouldn't let these introductory remarks pass without commenting on the myth of the balanced budget in B.C. There is a myth perpetrated by the Minister of Finance that this government has been remarkably successful in paying its own way. While it is true that this government has not ascribed any debt to operating expenditure on current account, it is far from true that we're self-financing. We are, of course, liable for the borrowings of Crown corporations, school districts, hospital boards and the like throughout the province. According to information tabled yesterday, the net indirect debt of the province at the end of the current fiscal year will be $8,570 million; at the end of the coming fiscal year — that's the one we're talking about in this budget — this total will exceed $10 billion.

HON. MR. BENNETT: Are you against Hydro?

MR. STUPICH: What we're against is the unmitigated gall of the Minister of Finance in standing up and saying: "We're balancing our budget." This is a staggering sum to owe anyone, particularly looking at today's interest rate.

I'd like to refer again to the budget. On page 1, in the second paragraph, and I support this statement, it says: "The budget is a total statement of the financial position of the province." It must be a total statement, not just picking a little bit out of the financial picture and saying this is where we are.

Then we look at page 57 of the budget — Crown corporations financing — and we see that in the fiscal year just about ended, the Crown corporations guaranteed by the provincial government will borrow $1.06 billion, and in the fiscal year under consideration now, the Crown corporations will be borrowing $1.59 billion. And we talk about a balanced budget. Mr. Speaker, it's like you going to your wife and saying: "I'm going to balance my budget, and I'm going to help you balance the family budget by guaranteeing loans so that you can borrow approximately one-quarter of my annual salary. In total, we've got a balanced budget, because I don't owe any of that money. I'm guaranteeing that you'll pay it back out of the earnings that I'm going to give you." But it's still a balanced budget. It's balanced except for $1.6 billion, roughly one-quarter of the total budget. We're not against this borrowing; we're against the Minister of Finance saying that he isn't borrowing it.

In addition, the provincial government is directly liable for some moneys borrowed by the minister's predecessor following the 1975 election. It's interesting that at this juncture the Minister of Finance was so anxious for scapegoats that he went out and created a problem in order to create the need for a scapegoat which he then found. This reference keeps coming up — it's in the budget again this year — about the need to borrow money some five years ago.

Finally, it says on page 12: "The government will have to finance a further instalment on the debt resulting from the socialist administration between 1972 and 1975." Mr. Speaker, I accuse the minister of joking when he puts that in the budget, because I know he wouldn't be lying and I know he's smart enough to know that isn't true. So he must have been joking when he said that.

Mr. Speaker, I stood up in this House a year ago and said that by the end of March 1980 the government would have one billion dollars cash on hand invested in term deposits. One of the members opposite says that I'm wrong. Yes, I was wrong because the total in fact is $1.1 billion.

It took us a long time to find out, but the financial statements for the year ended March 31, 1980, were presented to this House yesterday, and the total of the question that I put on the order paper a year ago, when I asked how much the government had on hand in cash and temporary investments.... That question remained unanswered until the end of the session. We resumed sitting in December, and that question was still unanswered, but yesterday we got the answer — in excess of $ 1.1 billion in cash and temporary investments. Some of these temporary investments may be a bit questionable because of the $30 million advance to B.C. Buildings Corporation, and I'm not sure that that should really be considered a current asset. Nevertheless it's a very small part of the picture.

On March 31, 1980, this government was sitting on $ 1.1 billion in cash that it had taken from the people of the province of British Columbia. By now, with the surplus that we are currently experiencing, the guess this year is that it will be at least $100 million. We will have in excess of $1.2 billion cash on hand on March 31, 1981. But we'll have to wait a year to find out that I'm right. Last year I was told that I was wrong. I recall the Premier saying that I was wrong, but he never did give us the right figure. We have the figure now; I was short.

Certainly Crown corporation debts must be considered as belonging to the province of British Columbia, but the Social Credit government goes on boasting of its surplus budget. In doing so, it's falling into a trap. By shifting all of this debt to Crown corporations, the government has created an illusion which perhaps it alone has fallen under. With the illusion of budgetary surpluses has come a variety of capital projects. Once taken in by the faulty premise that the provincial government is not mounting debt, it became an easy decision to spend every dime that came available beyond this year's current need on capital projects.

The result, Mr. Speaker, has been one surplus appropriate bill after another. Year after year we have been subjected to yet another speech from the Minister of Finance on what a wonderful job the government has done managing the province's finances. We have been told again and again ad nauseam that the people of British Columbia are so lucky to have a Social Credit government that we can create yet one more monument to their vanity or establish yet another capital program.

Last year they were in such a good mood that they gave us two revenue surplus bills: Bill 5 and Bill 7 — one of them was

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really an adjustment of the estimates of expenditures, but nevertheless there were two revenue surplus bills. At the same time the Crown corporations have been urged, prodded and in some cases ordered to take on major capital spending projects which would drive them deeper and deeper into debt. The BCR, for example, has not asked for the privilege of building the Anzac spur. This is how we have wound up with the B.C. Place project, together with Transpo '86. This is why the province seems on the verge of taking over the Pier B-C project, which has escalated from a $25 million capital cost to nearly $100 million. This is why we are building a $130 million bridge on the Fraser River in a location that residents at both ends are trying to stop. This is why the province has jumped in with both feet and its eyes closed to invest nearly a billion dollars on developing a coalfield which will lose more money for the people of B.C. with every tonne of coal that is sold. Moreover, it is the reason why the province has no fiscal reserves to fall back on when times do get tough.

I say to the members opposite that they expected the provincial government's finances to look rosy at every turn. They should have kept their rose-coloured glasses on and stayed at home. In this less than perfect world things sometimes go a little awry. The people of British Columbia had no idea how far things could go astray until they experienced five years of the present Social Credit regime, but I have no doubt they are learning. So the government went its merry way, appropriating surpluses for every conceivable project, purposes which they might find politically useful at a given point in time.

There is an interesting discussion in the background papers to the budget on the idea of a resource revenue stabilization fund. There is no question that such a fund would be useful in British Columbia. The background paper contains these words: "The government has been under pressure to spend revenue surpluses quickly, rather than draw them down when revenue growth is weak. Therefore the usefulness of that account has been limited." The pressure, if any, for these surplus appropriations has come from within the Social Credit caucus.

Where was the public clamour to get the province committed to the Premier's dream for False Creek in Vancouver, which he calls B.C. Place? Where were the lobby groups demanding a commitment in excess of one billion dollars to produce the Premier's vision of the city of tomorrow on that part of Vancouver's landscape? Who was it who forced the Hon. Grace McCarthy to commit all of her time and $100 million of the province's money to build a glass-slipper convention hall on Burrard Inlet? Where was the letter-writing campaign that forced the government to get us involved in a world's fair at Transpo '86? Who was it standing over Don Phillips' shoulder, forcing him to announce that the province would underwrite northeast coal? Mr. Speaker, the government has been spending like there was no tomorrow. Unfortunately for them, and for all of us, tomorrow has come.

During the current fiscal year, according to the Minister of Finance's presentation yesterday, we came close to a deficit — that's the year ending at the end of this month. The government has been caught short. It has bills waiting to be paid from commitments made on capital projects in a headlong rush of spending plans developed in the past few years. This, Mr. Speaker, is the financial position of the government going into the 1981-82 fiscal year.

Every government faces a decision on how it shall appropriate scarce resources between competing priorities. Based on the past five fiscal years, we can get some idea of the priorities of the Social Credit government. The budget, on page 1, contains something that I think everyone can endorse: "In this budget we demonstrate once more this government's solid commitment to bold and imaginative projects." That would be great if it were true. But where is the truth of that statement in this budget? Brave words, but during this period of, I think, chronic difficulties with the provision of human services, particularly in the area of health, there continue to be unacceptably long delays in getting hospital beds in this province. Open-heart patients have to wait six months to get an operation; some die waiting. The waiting time for a long-term care bed on the lower mainland still approaches a year. The government's construction program lags behind needs. Rural health care continues to be a shambles. The former Minister of Health (Mr. Mair), who left the sinking ship opposite for a new life, promised a rural health corps to deal with the situation. A former Minister of Health, Wesley Black, detailed the deplorable situation for all to read in his report on the healthcare system in B.C. The throne speech for the current session promised such a measure. Where is this item in the budget? Unfortunately, nowhere to be found.

In human resources the government's lack of concern for the neediest among us is legendary. Some minor — and, I might add, long overdue — measures are included this year to help handicapped youngsters, but there is no marked overall improvement in this area. To take just one obvious example, the shelter allowance for a single person remains at $130 per month. Our caucus research staff did a survey of 23 urban centres in British Columbia and found that a $130 shelter allowance is inadequate to meet the average monthly rent for a one-bedroom unit. For the poorest among us it is another year of dipping into food money to pay the rent.

In the area of education the province's share of school costs has continued to decline. According to recent information published by the B.C. School Trustees Association, the provincial contribution will drop to 33 percent from 37 percent last year. The effect — and I'll deal with this later — will be higher property taxes at the local level.

In the crucial area of housing the performance can only be described as dismal in the extreme. The $200 million mortgage program announced with such fanfare a year ago has gone. There was no announcement, as was generally expected yesterday, that there would be a repeat during the current year or any new effort. Expenditures on housing grants actually drop from $13.4 million estimated last year to less than $12.5 million this year. I don't know whether you're aware, but there is a housing crisis in the province — a real one. Yet expenditure priorities of this government do not permit them to respond in any coherent fashion. We have been advised that the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) will be presenting a White Paper later this month. All I can say is that the minister has a lot to make up for. If this budget is any indication of the priority this government places on housing, then British Columbians are in trouble.

These are a few examples of the spending priorities in this budget which my colleagues and I find objectionable. Over the next ten days of the budget debate and throughout the consideration of the estimates my colleagues will be pointing out all of the various areas where action is needed, where

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priorities should be rearranged and where waste can be eliminated. The government made some attempt at this last year. Reading from page 2 of the budget: "Early last summer I imposed a freeze on hiring and on all new consulting contracts. This prompt action enabled us to implement a more carefully designed program of cutbacks in consultation with individual ministries."

Well, let's just take a look at page 62 of the budget to see which areas were cut back and how effective the minister's freeze on hiring and employing consultants was. Page 62 is a table of general fund expenditures by principal services. I've marked the ones where there was some reduction. In general government there was actually an increase. In protection of persons and property — and one has to look at Public Accounts to get the definition of that, but it's police costs and that sort of thing — there was a reduction there of $19 million. The Minister of Transportation and Highways (Hon. Mr. Fraser) was no doubt pleased to make his contribution to this new efficiency, to this freeze on hiring, because it was his estimates that were cut back. There is a saving of $86.8 million in the Ministry of Transportation and Communications. So the freeze on hiring and the cutback on hiring consultants, credited with saving us so much money and expenditures last year, came almost entirely out of the Ministry of Transportation and Highways.

But there were a couple of others. Natural resources and industries. The Minister of Forests (Hon. Mr. Waterland) made a contribution to this as well, because the Minister of Forests cut back on his expenditures by $9.8 million, according to the revised estimates. I assume that in order to balance the budget presented by the Minister of Finance he asked the Minister of Forests to cut back on hiring, tree planting and research. Certainly the Minister of Forests made a significant contribution to the small surplus we have this year by cutting back $9.8 million. If there's any ministry that should not have cut back.... With the fanfare that was in the budget last year about what the government was going to do to rebuild forestry in this province and then for that ministry to experience a cutback of $9.8 million.... The government should take no credit for that kind of cutback on expenditures. The next ministry to experience a cutback is Housing. The government talks about what a great job it has done for housing and what a great job it's going to do. There's less in the budget this year than last year, and one of the ministries that experienced a cutback during the year was Housing with a cutback of $5.7 million. The largest by far was the Ministry of Transportation and Highways. The second largest, aid to local governments, was cut back by over $20 million.

The budget talks in different places about this secure revenue for the municipalities, yet when the shoe starts to pinch, one of the areas that is cut back significantly is aid to local government. The Minister of Finance talks about the success of his hiring freeze and the success of his attempts to control expenditures. Where did he get the money from? He stopped highway construction, cut back in reforestation and reduced aid to local governments. Those are the three areas. Is that something to be proud of in an economy that we are told is booming?

I cannot help but notice the inclusion of efficiencies achieved to control government growth as a line item in each ministry's estimates. It appears that the government has done nothing more than print the last round of cuts at Treasury Board in the estimate book as if they should somehow be voted on by the Legislative Assembly. It reminds me of the previous minister's brainwave of including recruitment savings in each ministry to again show some alleged savings brought on by action on the part of the administration. Three years ago it was recruitment saving; now it's efficiencies achieved to control government growth. I predict this latest gimmick will go the way of recruitment savings and be cast upon history like so much discarded rubble.

I say to the Minister of Finance that the people of British Columbia want policies and not gimmicks. The introduction of such a gimmick would be merely funny if it did not occur alongside the massive, unwarranted tax increases of this current budget; and it assumes a character bordering on the obscene when viewed alongside the profligate spending of this government on monuments and other capital projects that British Columbia neither needs nor can afford. A very quick calculation shows that the government has capital requirements close to $10 billion in major projects in the next five years — roughly what our contingent liability totals at this time doubled in the next five years.

If there is no hint in this budget as to where the money was coming from — other than from borrowing at the same time as we're talking about a balanced budget — are these sound spending priorities? Can these be considered efficiencies achieved to control government growth? I think not. Somehow, somewhere along the way, they've gone a little astray. The people of British Columbia have found themselves with a government they didn't quite expect, and they cannot quite afford.

Most British Columbians are concerned today about the escalations of strikes, lockouts and protests which currently characterize the labour scene. Certainly I'm concerned. I'm concerned about the effect in my own community. I'm concerned about the long, drawn-out CUPE, MIPEA situation; I'm concerned about the one-day work stoppage. We're all concerned, I think, about what's happening in the province. At any given moment of time, one can only argue about the degree to which government is responsible for inflation, or responsible for this situation. I think the Minister of Finance was remiss in not discussing this problem in his speech, just as I would be remiss in not mentioning it in my remarks today.

The current labour unrest does not occur in a vacuum; it didn't happen out of nowhere. It's a direct result of four or five years of really tough times for working people. In several of the last few years, wage increases have lagged behind the inflation rates. This means that the workers — many of them — have suffered real drops in purchasing power. In tight economic times, a drop in purchasing power is a difficult thing for any family to manage. Where has been the voice of the Social Credit government in protesting, or even in coming to terms with this situation? Have they recognized the beating that working people are taking? Did they take swift and responsible measures to maintain a balance between wages and prices? Did they recognize the consequences of labour unrest which would inevitably occur because this situation continued? Obviously they did not. In fact, the Social Credit government took steps to inflict even more damage by increasing taxes and user fees to the point where they wrecked the average working family's budget.

Because prices were increasing faster than wages, the corporations managed to increase their share of our gross provincial product during the last few years. Because of tax increases and increases in the value of shipments of nonrenewable resources, the government increased its share of

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our gross provincial product. Yesterday's further tax hikes will add to the problem. One major union has already said that the budget will come to the bargaining table. It could not have been otherwise. There is no doubt that the Social Credit government experiment is taking place at the expense of working people in the province.

Recently we heard the Minister of Agriculture running around calling for an immediate provincial election, hoping that the Social Credit government would somehow benefit from the current labour strike. The hon. minister somehow believes that the current labour unrest will help his political party get re-elected. A more blatant form of political opportunism would be hard t imagine. A government that allows and even encourages the trade union movement to fall into a position where a catchup in wages is required is a government that refuses to understand the need to find a balance in our society. And that government has the gall to believe that they can go to the electorate campaigning against a troubled labour-management climate and get re-elected on that basis.

[Mr. Davidson in the chair.]

How stupid does the Minister of Agriculture think that voters of British Columbia are? Does he really believe that British Columbians will re-elect his party to clean up a mess of its own creation? My colleagues and I are certainly prepared to accept the challenge — if indeed that is what it is — because we believe that no matter which party is in power, we cannot have a stable labour relations climate based on a low wage policy. Prosperity in this province can never be built in a climate where wages continue to fall behind prices. It may be difficult for members of the Social Credit government to understand this point, because they so often believe that money in the hands of the car-dealers, millionaires and corporate treasuries is somehow better than money in the hands of working families. We need a government in British Columbia which treats all sectors in our economy with some fundamental respect. We need a government which is prepared to listen and understand reasonable demands, whatever their source. Above all, in the present climate, we need government which can understand and talk to and with the trade union movement. The need for social harmony demands this. The needs of our economy demand this.

I say to the members opposite, if you believe confrontation with labour is going to help you politically, you'd better wise up quickly. My colleagues and I intend to win the next election, but not at the expense of economic growth, and certainly not at the expense of the social bonds which are necessary for a healthy society.

Before I leave the subject of labour, I note on page 12 of the background papers that the government is predicting that between 1980 and 1982 the unemployment rate will rise by almost 20 percent to 8.1 percent and continue to increase thereafter to an average of 8.4 percent in the years 1983-85. Nobody is expecting miracles from this government, but for the Finance minister to boast extravagantly about our economy, to undertake no programs to increase employment except a speedup in the export of a depleting resource, and to simply accept an ever-increasing unemployment rate is quite unacceptable.

Recent studies by Dr. Harvey Brenner of Johns Hopkins University indicate that for every long-term increase of 1 percent in the unemployment rate, the mortality rate increases by 2 percent. Similar increases are observed in suicides, divorces and emotional breakdowns. One can readily paint a graphic picture of the human costs associated with the trend so casually predicted in the minister's background papers.

Influences beyond the reach of provincial governments affect unemployment rates, but that fact cannot be used to defend this government's abject surrender. Unemployment is a curse. We should do everything possible to alleviate it.

Dealing with tax increases, the 1981-82 budget will be remembered above all for these tax increases. These increases are sizeable, without doubt. They are also, for the most part, very unfair.

Mr. Speaker, if I may.... This is something a little different; I have to have your attention this time. I'm going to ask for a moment for me to sit down, because the Leader of the Opposition has an announcement that will be of great interest. I'm asking leave for the Leader of the Opposition to make a brief statement.

Leave granted.

MR. BARRETT: Mr. Speaker, I don't intend to take much time of the House. I want to apologize to the House for missing most of the minister's speech yesterday.

I'm pleased to announce that the federal Minister of Labour responded yesterday to my telegram in terms of the current dispute between the Telecommunications Workers Union and the B.C. Telephone Co. I have submitted an idea to the federal minister that both parties have agreed to discuss under the auspices of the mediator. I hope, God willing, that this will be a basis of some movement in that dispute. I thought it important to notify the House that the idea has been accepted for discussion, and the federal mediator will call both parties to discuss it.

MR. STUPICH: Mr. Speaker, I don't mind the Leader of the Opposition missing the minister's speech yesterday. I would like to have had him here this morning, but I'm pleased that he brings that announcement to us.

HON. MR. WOLFE: He's gone again.

MS. BROWN: He's doing the job that Heinrich should be doing. Somebody's got to do your guys' job.

MR. STUPICH: Mr. Speaker, it's been suggested that he's doing the job that the Minister of Labour (Hon. Mr. Heinrich) should be doing. I suggest he's doing the job that the Premier should have been doing. Yesterday the Minister of Finance (Hon. Mr. Curtis) talked about labour unrest and expressed concern about labour demands, urging them to be responsible. Yet apparently this government has taken absolutely no interest at all in a labour-management dispute that has been hurting the citizens of British Columbia for some 14 months.

I think everyone on both sides of the House is hoping that the negotiations that have been prompted by the Leader of the Opposition will bear fruit within hours. Certainly that is one dispute that is hurting not only the relations between the employees and the staff of B.C. Telephone Co., not only the customers of B.C. Telephone Co., but also the whole community. It is also contributing a great deal to the kind of labour-management unrest that we are experiencing in the province in other labour-management negotiations. So my congratulations to him.

[ Page 4425 ]

It's an anticlimax but I'd like to go on discussing yesterday's budget speech. Getting back to this question of tax increases, as I say, this budget will be remembered above all for the tax increases introduced yesterday — very unfair tax increases.

On page 35 of the budget, the minister boasts: "To ensure that tax increases are borne fairly and equitably, I have placed great emphasis on ability to pay." Well, that's a claim, but it's unfortunately a claim that cannot go unchallenged. Of the $625 million net tax increase — that's in additional taxes levied, or increases in existing taxes — only the $15.4 million income tax surcharge is directly related to ability to pay. The refundable tax credit, which will involve a revenue loss of $70 million in the year after next, is also related to income. To the extent that ability to pay is related to size of business, the increase of $30.3 million in corporation tax and the revenue loss for small businesses of $18.9 million, yielding a net of $10.4 million, also qualifies. But the great bulk of the tax increase, involving some $500 million, was deliberately chosen to shift the tax load away from those who can afford it to those who will be cruelly injured by it. To increase regressive tax measures by $500 million is bad enough; the reference to ability to pay is worse.

While on the subject of rhetoric, I must touch upon the presentation of onerous gas taxes as "conservation measures." For the British Columbia worker going to and from his place of work, or the B.C. homemaker going to and from shopping, what does this mean? Will the budget reduce their appetites for gas and oil? Will the worker go to work less frequently or perhaps not at all? Or will the worker and homemaker — convinced at last of the error of their ways — cash in a few short-term deposits, of which this government has so many, and buy a new super efficient $10,000 automobile? The budget itself predicts increased motor-fuel tax revenues of about $157 million. Mr. Speaker, in order to reach that prediction, some estimate must have been made of the conservation effected by the tax increases. We wait with stretched patience for the minister's figures on who will be induced to reduce gas consumption, and by what amount.

Mr. Speaker, things would be bad enough if the tax increases began and ended with yesterday's budget. Unfortunately, our misfortune grows worse. Still to come, no doubt, are this year's medicare and hospital fees; and there are the joys of indexed liquor and tobacco taxes. Some stores at Christmas offered the gift that goes on giving, and our Finance minister offers the budget that goes on taking.

The next big take is going to come in the field of property taxes. Mr. Speaker, we're dismayed to discover that this government has once again chosen not to increase the homeowner grant. No increase is a decline in real dollars. That grant is the only mechanism that can be used to alleviate the very serious imbalance that exists between municipal and provincial taxing ability. No one can seriously doubt that the distribution of responsibility between provincial and municipal governments is very seriously mismatched against the distribution of taxing authority. For example, the citizen suffers from that imbalance: transfers from the provincial government to school districts decreased as a percentage of school budgets from 37 percent in 1980 to 33 percent in 1981. As the Province newspaper said in its editorial of February 24: "Something has to give."

The bottom line after deduction of the $380 homeowner grant is that school property taxes rocketed by 140 percent. Recent estimates are for increases in school taxes to homeowners as follows: Burnaby, 196 percent; Coquitlam, 160 percent; Delta, 106 percent; North Vancouver, 77 percent; Richmond, 116 percent; Surrey, 406 percent; Vancouver, 135 percent. If this government consistently withholds revenue from local authorities — and, as I pointed out earlier, that's one of the areas they cut back when things got tough — if it consistently refuses assistance through the homeowner grant, the traditional device, then this government is essentially legislating property tax hikes. The possibility of a California-type taxpayers' revolt cannot be dismissed. I sincerely hope that is not what the Social Credit government is after.

The people of British Columbia are as anxious as any that their funds be spent carefully. For that reason they will be outraged to discover that while their provincial government proceeds doggedly with projects, the costs of which increase daily, they refuse to provide any relief whatever from the injurious property taxes.

To make this clear to the Minister of Finance I should quote some of his own remarks from Hansard dated March 5, 1975. At that time he wasn't the Minister of Finance; he was in opposition.

A very simple choice facing local government in this province right now is to pass along what has to be described as an absolutely intolerable tax increase for general purposes and for education or to consider for the first time seriously and severely cutting back on those services which have traditionally formed part of municipal operation. It is that serious for 1975. You pass along an increase which is not acceptable to the people who pay the bill — the taxpayers. the property owners, the tenants — or you cut back in services in a manner which has not been seen in many years in British Columbia, if indeed it has been seen at all in the past.

In that speech the Minister of Finance of today expressed a clear concern for ratepayers and tenants. We can only wish that he would read his old speeches and use his present authority to do something about his previous concerns.

The people of British Columbia hoped to see in this budget, for the first time, some concrete measures to lead in the transition to a more mature economy.

The province of Alberta set up a heritage fund in 1976 now totalling some $8 billion to finance the shift from a resource-extractive economy to a different kind of economy. The province of Saskatchewan started a similar fund two years later. Working with much less in the way of nonrenewable resources than either Alberta and British Columbia, it will soon have a fund in excess of $1 billion. What do we have here in British Columbia? We're told we have a booming economy. In Saskatchewan they were told they had a booming economy. In Saskatchewan they reduced the income tax rate. In Saskatchewan they have no medicare premiums. In Saskatchewan they have a heritage fund. What do we have in British Columbia?

First, there are no funds to finance any shift. Second, there are no plans. Third, while everyone else in the world, noting that natural resources and especially energy resources are appreciating in value at a rapid pace, is husbanding these resources very carefully, we have in British Columbia a government obsessed with the fear that coal and natural gas are going out of style; therefore selling such resources quickly, sometimes at a loss, is the thing that has to be done for British Columbia.

I can recall a previous apostle of Social Credit in this House, in the administration that was voted out of office in 1972, saying at the time this government was trying to start

[ Page 4426 ]

mining in a park at Buttle Lake — Western Mines — that we had to get these minerals out of the ground or they would go rotten. It would appear that philosophy still rules in the Social Credit administration. "We have to get rid of this coal; we have to get rid of this natural gas today; we can't afford to leave it in the ground; it's going up in value too much; it'll be worth too much to us later on; we have to get rid of it before it becomes too valuable."

For an established coal mine producing more than four years Alberta receives minimal royalties of 5 percent of selling price. In British Columbia we have invented negative royalties. We estimate that the northeast coal structure, for which we are charging $3 per tonne for Denison Mines and $2.50 for Teck Corp., will cost at least $10 per tonne, for a net subsidy from the taxpayers, a net negative royalty, of at least $7 to $7.50 per tonne.

HON. MR. FRASER: File the backup papers on that.

MR. STUPICH: I wasn't going to do this, but the Minister of Transportation and Highways asks me to file my backup papers on those figures. We've been trying to get backup papers and information about the northeast coal development for some time, and it's been regrettably lacking. They're holding that very close to the chest. One wonders why they're afraid to share this information with the people of British Columbia.

Let's look at the budget speech itself, since we don't have any backup papers. Let's look at page 19. "The project is awe-inspiring in scope. It is by far the largest development in British Columbia's history, with combined public and private investment exceeding $2.5 billion." Yesterday we tried to find out from the Minister of Finance how much of that would be provided by government and how much would be provided by industry. We were told: "Wait until you hear the budget." We're still waiting.

Let's look at that $2.5 billion figure. If we were to amortize that over the term of the contract for the coal and if we're looking at the coal target of 7.7 million tonnes — there's absolutely no evidence that we are going to sell any more than that — we find that, whoever's investment it is, simply to amortize that debt of $2.5 billion over the term of the coal contract will take $55 per tonne. There's nothing included in that for the operating costs of mining of for the shipping of the coal. Simply to amortize the investment in the structure will take $55 per tonne. I would suggest that the subsidy figure which I have announced is much less than what we are actually going to realize when the true story unfolds.

The minister responsible for this fiasco declared that if the government can only secure contracts for an additional 11 million tonnes per annum, we might break even. We have contracts for 7.7 million. If only we could get somebody to buy another 11 million tonnes, then maybe we wouldn't have to pay them to take it away from us; maybe we'd break even. We wouldn't get anything for it, but at least we wouldn't be losing on the deal. He's dreaming about the day when suddenly somebody will appear on the scene and say they want another 11 million tonnes per annum. Does the minister realize we are talking of an energy resource, the value of which in the ground appreciates annually? It's going up all the time. Why this undue haste to hurry up and get rid of it before it becomes worth enough to at least pay for the cost of getting rid of it?

He wants the Japanese to take it from us. People in other countries are prepared to pay the very high and rapidly escalating prices for coal and petroleum and natural gas. More than any other single factor, it is upon these energy resources that the ability to provide manufacturing jobs depends. That is why the Japanese are so happy to have us spend $2.5 billion — it's in the minister's own speech in the background papers — to facilitate the movement of coal to their economy. Aren't we great benefactors! We are going to put up $2.5 million to ship them coal that they will use to develop their economy, and they will send the manufactured products back to us. The Japanese know that at any time when sellers can be induced to sell prematurely, real windfalls are experienced by the buyers.

Canada has gone through this before. You'll remember Canada's rush to export 1.7 billion barrels of oil between 1970 and 1974 for $7.4 billion. It was great to have that $7.4 billion come in in those years. On average it was $4.35 per barrel. Its value in the world market today is almost ten times that. It's costing us almost ten times that amount to buy back the oil that we were in such a hurry to export.

The same thing could happen in the not-too-distant future with respect to natural gas and perhaps even coal. Its value to us as an essential catalytic ingredient for new manufacturing employment is incalculable. The only thing that can be said of that sale of the oil is that at least we didn't have to put up a combined $2.5 billion public and private investment in railways and the like. Corporations don't care about these concerns. That's not a criticism; it's just not their business. They operate on margins. The cost to society of premature resource depletion is irrelevant to corporations. The recently tabled federal report showed that the oil companies did very well while we were taken on oil export leases.

The worst case of resource mismanagement before us is the forest industry, which should be a renewable resource. The forest industry provides 50 percent of all the value-added factor in B.C. manufacturing industries; 15 percent of capital and repair expenditures; 65 percent of provincial exports; from 15 to 25 percent of provincial revenues; about one quarter of the total employment in the province.

Earlier I spoke of the consequences of a resource-based economy in terms of provincial government revenue. The Social Credit government has been a little reticent about collecting its share of resource rents, to be sure, but any resource-based economy must face the prospect of fluctuations. On page 8 of the forest and range resource analysis report, in that vital industry the minister responsible banally predicts the loss of 12,000 hectares — more than 25 percent of our forest land. At current rates of direct and indirect employment, that represents a loss of 70,000 jobs.

Indeed, if we may assume that the present pattern loss of the best land continues, the figure could be even higher. As if to ensure that the Forests Minister (Hon. Mr. Waterland) does not prove wrong, the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) immediately set about selling off 15,000 hectares of forest land for summer cottages and hobby farms.

As we sell our minerals, our coal, our natural gas, we diminish the fundamental economic base of the province. While this happens, we are losing our timber-growing capacity. By diminishing our present economic base without firm and disciplined plans for new industries the government commits the most irresponsible of public acts. The real capital by which British Columbia prospers is not to be found in government coffers; it is to be found first among our

[ Page 4427 ]

people, second in our bounteous inheritance of natural resources. A government which hacks away at the fundamental economic fibre and declares to the public that all is well because its books are balanced is guilty of misleading advertising to say the least.

You may recall that we in the NDP established a railcar manufacturing plant which, for a brief while, made some real contribution to this province. It was aborted by the Socreds. It could now be building the rolling stock that will be needed as part of this northeast coal development. Such a plant would also provide a substantial demand for steel. It would be an important part of the industrial infrastructure for a fully developed economy.

It is possible not just to reserve funds to finance a shift away from natural resources, as Alberta does, and Saskatchewan does, but to fill strategic vacancies by government planning and initiatives. Why is there no requirement in any of our natural resource licences to secure some minimum of the hardware used from B.C. resources? We do assemble a little forest industry equipment, but precious little. We manufacture even less.

A study recently done by the IWA shows that for one large U.S. firm the high technology, well-paid spinoff jobs are to the greatest extent possible, kept in the U.S., with the Canadian jobs limited almost entirely to the hands-on variety; and that, of course, has very serious implications for the research and development sector.

The record in the mining industry, offering great potential in associated hardware, is far worse. That situation can be readily addressed, but it cannot be done by repeating vague promises about a resource revenue stabilization fund. It won't be helped by the northeast coal deal. It requires firm, disciplined planning and a solid commitment to diversifying our economy.

On page 25 of the budget address the Minister of Finance devoted half a page to describing the need for economic diversification and his government's general resolve to accomplish it. This was followed by vague references to the tourist industry and, searching hard for specifics, a blurb about the feature film industry.

In the budget there is some further reference to this, page 26: "The province will continue its commitments under the industrial development subsidiary agreement, which has proven to be an immense success since its introduction in 1977, This province will contribute more than $18 million to the program, specifically for community industrial park projects in...." Mr. Speaker, it was rather interesting as I listened yesterday to the minister tell us where those industrial parks were going to be built.

First on the list: Kamloops. Now I guess I can't say who represents the riding in Kamloops; no one does at the present time. But certainly after the most recent election it was a Social Credit riding. I expect that will change, but for the time being we can only assume that this was planned for a Social Credit-held riding. The second place: Cranbrook. Mr. Speaker, I ask you, who represents the Cranbrook area? Certainly not someone on this side of the House. Campbell River: one for the NDP. Two to one so far. Squamish: Mr. Speaker, who represents the Squamish area? No one on this side of the House. Three to one for the government's side. Elkford: four to one. Invermere....

Out of six places where industrial parks are going to be built, five are in Social Credit-held ridings. What a coincidence. It is a sign of the lack of progress by the Social Credit government that capital investment from January 1980 to June 1980 was four times as great in the commercial sector as it was in the manufacturing sector. I thought it was just in Nanaimo that everybody was building shopping centres and nothing else, but apparently it's happening all over the province. It is for that reason that manufacturing continues to decline as a relative provider of the value-added factor and of employment.

Interjection.

MR. STUPICH: Mr. Speaker, the Minister of Agriculture and Food (Hon. Mr. Hewitt) likes to interject. I think I'll throw in at this point, as I said earlier, that his is one of the estimates that has actually been decreased. There is a nominal increase in terms of dollars for operating the Ministry of Agriculture and Food, but included in the estimates for the Minister of Agriculture and Food is $6 million that is being given to ICBC. It's been turned over to ICBC. This is the administration that said when it was in opposition: "There should not be one dollar of taxpayers' money going to ICBC." The moment they were re-elected in December 1975 one of their first acts in government was to give $187 million of taxpayers' money to ICBC and to borrow it back the same day because ICBC didn't need it. Now there's a further gift of taxpayers' money to ICBC. The Minister of Agriculture and Food would be better to stand up in the House and tell us why his ministry, in terms of real dollars, has experienced a decline under his stewardship of 40 percent in the money it has available for servicing the needs of what I consider to be one of the most important industries in the province. Certainly his Premier doesn't. It was his Premier, I believe in Terrace, who said: "Why should we save agricultural land in the province of British Columbia? We don't have to worry about raising our own food. We can import all the food we need." That is the expression of concern that this government has for agriculture. Its attitude towards the preservation of agricultural land is that the sooner we can get away from the embarrassment of having agricultural lands, the better off British Columbians will be. Let's get rid of all the farmland; let's cut back on the estimates for the Ministry of Agriculture and Food. Most important of all, let's get rid of the Minister of Agriculture and Food.

Going back to my remarks, Mr. Speaker. It's for that reason that manufacturing continues to decline as a relative provider of the value-added factor and of employment. It is for that reason that the manufacturing workforce has dropped from 15.9 percent of employment in 1978 to 14.7 percent in 1980. It is largely for that reason that projected unemployment is so tragically high.

If there is one theme that I feel is appropriate to this budget it is the nerve or the gall of the Minister of Finance. He's a Minister of Finance who tells us in his budget that people should be responsible in their demands at the same time as he is telling them that the government is going to take an extra $1 billion out of the economy. He's a Minister of Finance who proudly boasts about producing a budget that is a balanced budget and not a deficit at the same time as he is telling us that he is going to borrow approximately 25 percent of the budget. He's a Minister of Finance who persists in Ottawa-bashing at the same time as he is going to go to Ottawa and try to negotiate a better deal for the people of British Columbia. He's a Minister of Finance who talks about a booming economy at the same time as he introduces in-

[ Page 4428 ]

creased tax measures to increase his budgetary revenue in excess of 10 percent. The gall of the Minister of Finance to stand up and do all these things to us on black Monday!

The people of British Columbia had a fading hope of finding in this budget substantial relief against the endless series of surcharges imposed by this administration. Quite apart from the tax increases announced in the budget, there are the increases in hydro and natural gas costs, the increases in ferry rates, the increases in hospital insurance and ICBC increases. They have gone on, it seems, forever. The people had a right to hope that this government would have discovered that royalties for coal could have been increased at least to the planned 1976 level. We announced the increase in 1975, effective April 1, 1976. That increase has yet to be implemented. Every tax and every cost in doing business with this government has been increased regularly since that time, but there's been absolutely no change in the revenue coming to the government from the depletion of that particular natural resource. The people of B.C. hoped that this budget would at long last reveal effective measures to catch up on the tragic backlog of hospital bed construction. They hoped to see an end to long waiting lists for surgery in hospital beds. They had a right to hope to see a substantial reversal of the shifting of education costs to homeowners. They have watched the provincial government's share of local government costs shrink. They have watched the municipal governments, out of desperation, hiking the property tax again and again.

Unlike the provincial government, local authorities have no alternative. They can't get money from resources as this government can; they don't have any resource revenues to give away, as this government did. Remember the giveaway of Canadian Cellulose; remember the giveaway of Plateau Mills; remember the giveaway of Kootenay Forest Products; remember the giveaway of Panco Poultry; remember the giveaway of Ocean Falls. Most of these enterprises were producing revenues for the people of British Columbia. We no longer have those sources of revenue. We don't have this revenue coming from our natural resources, as they do in Alberta, as they do in Saskatchewan.

The people of B.C. hoped to discover in this budget some indication that this government is at last coming to understand that we can't go on living forever on our natural resource capital. They had hoped to see some mechanism like Alberta's Heritage Fund or the instruments of the Saskatchewan government designed to find and encourage alternatives to our resource-extractive industries. The people of B.C. hoped to see a declared end to the building of Social Credit monuments. The people of B.C. hoped for some assistance in dealing with devastating interest rates, particularly in the housing market. But this Minister of Finance, Mr. Speaker, couldn't even find the time to go to a meeting to deal with these ruinous interest rates.

Mr. Speaker, you will recall, when I tried to get an emergency debate on this question of rising interest rates, I was assured by the Premier that everything was in good hands, because the Minister of Finance was going to attend a meeting of Ministers of Finance where that would be discussed with the governor of the Bank of Canada. And then, three days later, we were told that the Minister of Finance just didn't bother going to the meeting. I think he didn't even say he didn't have the time; he simply didn't bother going. That's the extent of their interest in this problem of ruinous interest rates.

Unfortunately, all of those hopes were dashed by the Minister of Finance speaking yesterday. Instead British Columbians were pounded by further tax increases — the obvious ones in the budget and the ones that are hinted at: the increase in medicare premiums, for example, that is being hinted at; the increase in property taxation in rural areas that is spoken about in the budget. Instead came the sober realization that the government intends to continue with this capital binge. This government is prepared to finance the big-ticket projects out-of the taxpayers' pockets. Inflation is to become a way of life — fed rather than fought by this Social Credit administration.

Mr. Speaker, it is a disappointing budget, one which the loyal opposition will fight in the days, in the weeks and in the months ahead.

HON. MR. McGEER: Mr. Speaker, I'm surprised that the chief financial critic for the New Democratic Party should have terminated his speech so early, because had he spoken longer, we might have been able to hear one or two positive thoughts for the people of British Columbia as to how we might move ahead, perhaps an alternative budget which that member has occasionally presented in the past.

MRS. WALLACE: How about you writing one?

HON. MR. McGEER: Well, I used to do that when I was in opposition, Madam Member. And the reason why is that it would be impossible to improve upon the budget that our Minister of Finance has presented to the province of British Columbia. I can tell you this, that no one would have wished more passionately to be able to bring better news in a financial sense to the people of British Columbia than our Finance minister. But the province is well served that in times of some financial trouble in our country — not brought in any measure, Mr. Speaker, by the policies of the government of British Columbia — we have as responsible and far-sighted a Finance minister as we have in British Columbia today.

I would commend all British Columbians, including the opposition, to read that document carefully, to reflect upon it and perhaps on second reading, Mr. Member for Prince Rupert (Mr. Lea), to understand it. Because there is an important message for the future in that budget. The message is that British Columbia and Canada can be a province and a country of enormous potential for the future, but that can only happen when there are wise and far-sighted financial policies. If such policies are practised and practised well at the provincial level but are abandoned at the federal level, then we are all in trouble.

I was intrigued at the one brief appearance of the Leader of the Opposition in this chamber, since he found it necessary neither to listen to the presentation of the budget nor to the presentation of his own party, but instead offered to us the prospect of his good offices to mediate some of the labour problems in British Columbia. I can vividly recall the last act of that Premier and his government before they were justifiably turned out of office, which was to call a special session of the Legislature to take away labour's bargaining rights. Perhaps it's a deathbed repentance for their own days in power when their mismanagement of the economy as well as their mismanagement of labour-management relations left this province in tatters, with a debt that regrettably, despite all the difficulties, we're still having to pay off.

[ Page 4429 ]

I want to congratulate the Minister of Finance because, faced with the alternative that we have in British Columbia today to run a deficit, which was the route chosen by the New Democratic Party — and they were running it up awfully fast, hundreds of millions of dollars in one year.... We'd be in the poorhouse in British Columbia today had we persisted for any length of time with those irresponsible policies to cut the services and make the people suffer for the mismanagement. This is the part that hurts the Minister of Finance, hurts the government and hurts us all: we must, if we are to continue with fiscal responsibility in British Columbia and to continue to supply the general and generous level of services that we have, for the moment burden ourselves with increased taxes.

The economy is strong, our potential is great, but we have had to give up, at least temporarily, the privileged position we have had in British Columbia with respect to taxes. However, if we manage our affairs well and wisely, we will still be able to enjoy prosperity and growth and continue to give the substantial social advances that this province has been able to enjoy in the past five years — advances in the social sphere that would not have been possible were we left with the dismal financial management that was characteristic of the NDP during those unfortunate years when they were in power in British Columbia.

One only has to look at the federal policies with respect to provincial natural resources to understand the difficulty that British Columbia is in today and how those difficulties would have been compounded had we had a socialist government in British Columbia at the same time as we have a socialist government in disguise in Ottawa. You only have to look at the precipitous drop in our income from natural gas to recognize that of the 2 percent increase in sales tax which has become necessary to support services in British Columbia, 1 percent of that alone can be equated to our decreased income from natural gas as opposed to two years ago. The other 1 percent can be accounted for by what we might reasonably have been able to anticipate in growth from those resources had not the federal policy eliminated our opportunity to benefit to the extent that is possible here in British Columbia.

What have we done? There has to be some glimmer of understanding over there in the opposition before we can even have a debate in this Legislature, much less be faced with the dreadful prospect that the NDP would ever again have power in this province. Why do I say that? I say it because when the NDP was in power in this province, the Premier of the province, backed by the NDP caucus, went to Ottawa and offered to give up our natural resources here in British Columbia if the federal government would socialize them.

SOME HON. MEMBERS: Shame!

HON. MR. McGEER: How many remember that? Yes, they remember it, and how well they remember it. You know they can't wait to get the opportunity to do that again. Yes, they would give away our resources to the federal government if the federal government would only nationalize the oil and gas industry here in British Columbia. The federal government has now embarked on that policy, and what are they waiting for? They're waiting for the NDP in British Columbia to get into power so they can get it all. If that were to happen, where would the income be derived from to support these services in the future? Would we increase income taxes on individual people by another 30, 40 or 50 percent because we would no longer have the income from our resources? What alternatives do the NDP suggest should be the case for British Columbia if their policy of giving away our natural resources to the federal government were to be implemented in exchange for the whole program being nationalized across Canada? Well, I can tell you, if there is anything that would make me want to stay in politics and fight, it would be to protect British Columbia from that kind of a disaster.

What has been the consequence of the national energy policy? I'm sure that the Minister of Energy is going to speak much more eloquently to this point, but it cannot be repeated too often. We have pursued the course of maximum regret in Canada as a result of that national energy policy. The exploration rigs, which are our heritage for tomorrow, are leaving this country in numbers even greater than they left when the NDP was in power. The NDP and the Liberals have similar policies with respect to exploration — the kinds of policies that would drive the future right out of Canada.

That's what their policy was. We saw the effects of their policy. It's a policy that has been adopted on a national scale by the Liberal Party with the same disastrous results for western provinces. I want to tell you how bad those results have been. They're so bad that the Premier of Saskatchewan and four federal NDP MPs have climbed out of bed with the Liberals. Why did they get out of bed with the Liberals when Ed Broadbent won't get out of bed with the Liberals and when Dave Barrett wants to get into bed with the Liberals? I know the Liberals, and I would advise against getting into bed with them if I were in the NDP. You've got to know who the bride is and who the groom is.

MR. LEA: What was it like? You were in bed with them for years?

HON. MR. McGEER: Well, Mr. Speaker, not as a member of an opposition party.

I can tell you that the Premier of Saskatchewan is a lot smarter than the Leader of the Opposition in British Columbia or the leader of the national NDP, because he can see the necessity of resources being managed by the provinces. He can see the cost that has come to the NDP government in Saskatchewan because of that national energy policy. He knows that it is badly hurting every single citizen of Saskatchewan in the same fashion that it is hurting every single citizen of British Columbia.

I can tell you that if there has been some change in the NDP policy, if they believe that resources should be owned and managed by the province, now is the time for them to say that. Now is the time for them to declare whether or not they want these resources managed here in British Columbia or want — which is their official policy — to give them all away to Ottawa and let Ottawa manage them the way they're managing them now. We're demanding a price for our gas which makes it non-competitive with other fuels, and so we shut down our gas plants and we let our pipelines remain at minimum capacity.

We set unrealistic ground rules for the exploration of oil and gas that is driving the drilling rigs out of British Columbia-Canadian drilling-rigs-to search for oil and gas in the United States. Is that helping us achieve any self-sufficiency? Is that building for the future of British Columbia? No sir, Mr. Speaker, that's the worst possible result we could have. If one were to set a policy in Ottawa that would bring about the worst imaginable result in every aspect, what has been done

[ Page 4430 ]

in Ottawa today would be the perfect policy: decrease oil and gas exploration; compromise the future; buy foreign oil that you don't need; subsidize what you don't have — oil; tax what you do have — natural gas. That's the way to put us in the worst possible position five and ten years from now.

That's the policy that you people in the opposition like. They're only following what you offered to do for them some years ago. The only New Democratic Party leader in Canada who understands that is Blakeney, the Premier of Saskatchewan. He's been able to persuade a few of the MPs from that province, but he hasn't yet been able to get it into the head of your national leader or your provincial leader. It's disaster for Canada. We only have to look at the budget, examine the revenues past and present and project these into the future to recognize the disaster it's bringing for British Columbia. It's totally unnecessary, because the resource is there in abundance.

I listen not just to your policies with respect to energy, but your policies with respect to all of the resource development.

Interjection.

HON. MR. McGEER: We'll come to land and your land policies, but before we do that I want to come to coal and your coal policies.

Interjection.

DEPUTY SPEAKER: Order, please. Honourable members, all members will have an opportunity to participate in this debate, but only one member will participate at a time.

HON. MR. McGEER: The New Democratic Party policy is solidly against development of northeast coal in British Columbia. You've opposed it at every turn. The member for Coquitlam, the member for Prince Rupert, the Leader of the Opposition and now the finance critic have all been against the development of the northeast coal.

MR. LEA: Nonsense! We're against giving it away.

HON. MR. McGEER: In the time that they were in office here in British Columbia they never laid the groundwork for any resource development policies in the future. All they did was mess up what we already had. If you're in favour of the development of northeast coal, stand up and say so, but don't get up here and say we're giving it away, because all you've done is place yourself solidly against this development.

I thank heavens that people with the vision and imagination of this group over there weren't in charge of Canada at the time of Confederation. We'd have never built the CPR. You wouldn't be in favour of building roads or railroads or any other kind of development into any of the resources of British Columbia or Canada. All you can hope to do is to nationalize something that free enterprisers had developed before to try to get more for yourselves and wind up ruining the whole thing. That's been the record of socialism. It doesn't matter whether it's in Europe, Great Britain or North America, it's characteristic. Never develop anything; only try and grab what someone else has done and mismanage it when you get it. That was your record here between 1972 and 1975.

That's what happened to our mining industry. All mining exploration in British Columbia vanished; all the drilling rigs in northeast British Columbia left; no new mines opened. And what did they want to do after they had ended all the exploration and got all the people out of British Columbia? They offered to give it to the national government if only they would socialize it. That's the attitude and approach to resources.

Your policies haven't changed. You only have to listen to the speeches on the other side of the House to recognize that they're still against all development. There are billions of tonnes of coal in the northeast part of British Columbia. Not one sack of coal will come out of northeast British Columbia to benefit the people of our province or of Canada until you have a powerline in there to run the machinery, until you have a townsite in there to house the miners who go in, until you have a railroad to take the coal out and a port from which to ship it.

If you're against all of those things you're against the development. The coal can lie there forever, just as the western part of North America would have lain forever dormant as far as Canada is concerned unless someone had the courage and vision to build a railroad. The first step in resource development is to have vision and the next step is to have courage. And when governments have those two characteristics, then groundwork is laid for the future. Since the NDP have neither of those characteristics, never will they be able to develop for the future. Only will they be able to run down what we have at the present — if they have office. That's been their record.

I say that this budget was not only a realistic one, but it was one that had the essential vision and courage which is the necessary ingredient for the people of British Columbia to be able to enjoy in the future the rich level of services that has been brought to them by Social Credit governments. It starts with hospitalization, medicare, SAFER, denticare, chronic care. In your time of office, may I ask, what social developments did you bring in? What social developments did you have the resources to bring in? You never brought any in, because you didn't have any money to bring them in with. Why didn't you have any money to bring them in with? Because you never had any policies to develop the wealth of British Columbia, which until this point in time has been dependent upon our resources. Our gas, an important resource for the future — totally undermined by the national energy policy; retrievable, but not without a government in British Columbia that is prepared to fight for our rights.

Why should resources belong to the provinces and be managed by the provinces? Because it's the heart of the economy of the western half of this nation. If you have a government in Ottawa that mismanages the resources, as the federal government is doing with its national energy policy, there is no way a provincial elector can defeat that government if the majority of the votes are coming from the central and eastern parts of Canada that don't have the resources and therefore don't care if they're managed badly or well. For them it's an abstract exercise: they can indulge their political science theory and their socialism. But for us in the west it's our bread and butter, and we've got to have wise management of those resources. If the policies that produce that are not coming from Ottawa, as they should, then there must be a provincial government that will stand up for the rights of the citizens of this province and look after their vital interests. That's something that you weren't prepared to do when you were in office.

The Minister of Finance made the wise decision: that is, to protect the high level of services to people, their health and

[ Page 4431 ]

security, their education for the future. These are costly services. I want to tell you how costly, because the Minister of Finance reminded us. Education is so costly that at $1.5 billion a year it equals the amount of money British Columbia has to pay to service its share of the national debt, that's how costly it is. It costs $1.5 billion a year, and health is even more costly.

So we are going to have to have sources of income within our province to protect that tremendously rich social dividend that is characteristic of our free enterprise way of life here in British Columbia. Part of building for that future — and I hope the opposition will listen closely to this — is laying the groundwork so that income will be earned in the future to protect that level of services. Our natural resource revenues this year will not produce the income to protect that level of services.

That's why we've had to take this step, which is deeply regretted, of increasing our social services tax. With wise management of resources that step would not have been necessary. With wise management of resources in the future that social services tax can be reduced, but not if we give away our resources, not if we continue with that stupid resource management policy in Ottawa, and not if we fail to lay the groundwork for expansion in the future. That's what the northeast coal development is all about, billions of tonnes of coal lying in ridges as far as the eye can see to the horizon. All that's required to start bringing those rich resources into production so that every British Columbian can enjoy the fruits is to lay in the power, build the townsite, construct the railroad and produce the port. That's all that's required, and you people are against it. Shame on you!

We won't see the benefits for some years. Yes, there'll be some immediate turnover as the investment begins to produce sales tax, jobs and all the things that go with construction, but the real solid meat of the dividend — the real, solid part of it — is down the road a few years when the sales are not just a few million tonnes, as these initial sales have been to get the project underway, but are many times that. And then, Mr. Speaker, let it be remembered what the people in the opposition had to say now; let it be remembered what their vision of the future is; let it be remembered the extent of their courage; and especially, Mr. Speaker, let it be remembered what their record was in office.

MR. LEGGATT: They'll have to clean up your mess.

HON. MR. McGEER: Well, Mr. Speaker, I recall the mess the NDP sought to clean up when they took office in 1972 with a surplus of several hundred million dollars, no debts, and money coming in so fast the Premier couldn't even count it. That's the mess they had to clean up. And they sure cleaned it up fast — left us with a debt that we're still trying to pay off.

[Mr. Speaker in the chair.]

There is a different kind of infrastructure being laid in British Columbia today, Mr. Speaker — also for our industrial future, for which I would like to particularly thank the Minister of Finance and the government — and that relates to our Discovery Parks and our thrust to commence high-technology manufacturing in our province. Historically, in British Columbia we've relied on our resources — our coal, our gas, our lead, our zinc, our copper, our lumber, our pulp. All of these resources have provided jobs, security and wealth; but we have exported in relatively unprocessed form most of our resources. We carried through the processing up until the point where reciprocal tariffs were erected against goods from Canada, and then we have left the labour-intensive part to the nations who have imported the wealth of our forests, our mines and our waters. Now the government is embarking upon a new set of policies in which we will use our ingenuity to put labour content into goods which do not necessarily have a high resource component in them. These are the industries that have grown nine fold faster than the low technology industries in the past 25 years. These are the industries that not only British Columbia but also all of Canada have found themselves virtually excluded from since World War II.

One example is the trade deficit that Canada runs up in the computer industry that has increased from $500 million three years ago, $900 million two years ago, $1.9 billion today, and estimated to be $5 billion three years from now — all coming from components that have virtually no natural resource value to them.

We're going to use computers and the other high-technology goods, that are now being produced by the advanced nations of the world, in Canada. If we carry on with our present industrial policies in Canada, we will discover that our natural resources must be sold off at an accelerated rate just so that we can break even. Escalations of this kind in some of the natural resources that we possess are virtually impossible. Therefore we have little choice in Canada but to become part of the new industrial revolution and, therefore, set our policies that will allow us to participate in this new industrial revolution and thereby give our Canadians the opportunities for both careers and wealth that stem from success in this highly competitive area.

In order to do this we must recognize that high-technology industry is not based upon resources; it's free to locate wherever. Ingenious labour and inventiveness can be found. Therefore, Mr. Speaker, if we're to participate, we must be in a position to prepare our young people to be able to use their minds with the same ingenuity as is found elsewhere in the world. We must as well recognize that when people manufacture in the high-technology realm, they're not doing so for a tiny, protected market, whether it's Canada, Korea, one of the small European countries or any of the disadvantaged nations of the world. They manufacture on a world mandate basis, and therefore before they roll their sleeves up they must know that the product they have can be sold around the world and beat the competition wherever it might be found. If our taxation policies and trade policies are out of step with the world, we can survive in the resource industries because the resources are here and not elsewhere. But we cannot survive in high-technology industry. It merely means that the high technology industry will go to where the taxation and trade policies are competitive with the rest of the world. We must get in step in British Columbia and Canada with whatever the world polices are that permit these new industries to flourish and grow at the rate which today is nine times greater than the traditional industries of British Columbia and Canada. Our Discovery Parks and high technology policies represent the initial steps British Columbia is taking to place us on a competitive basis with these other nations and other areas of the world. But we cannot have in British Columbia and Canada taxation policies which are non-competitive. It's the ultimate route to failure, because those industries will locate

[ Page 4432 ]

elsewhere and our foreign trade deficit will escalate beyond all manageable proportions.

So it's not simply an option that we should pursue this course of action in British Columbia. In my opinion, it is a requirement — one that has to be practised not just by a province like our own but by the national government. It was for this reason that I had the pleasure to testify last week before the Senate Foreign Relations Committee on the steps that need to be taken by Canada to allow us to be an equal partner with the other nations of the world in high-technology goods. I'm hoping that our national government will recognize the trouble that Canada is in with respect to its diminutive research and development policy, its non-competitive taxation structure, its failure to perform in this area since World War II and the deepening trend of our trade deficit. That insight must come through in Ottawa with respect to this aspect of our industry, just as it must develop with respect to natural resource policies.

We are approaching the lunch hour on our first day of sitting. We have three members of the opposition surviving beyond the noon break. I don't know if they blow a whistle here for socialists to go to lunch.

I will say this: the New Democratic Party in British Columbia is not just out to lunch in the dining room now; they're out to lunch on the future of British Columbia. Let it be known that their policies were bankrupt when they had power in this province. Let it be known that they were prepared to climb into bed with the federal Liberal government — give away our resources — and that they're in bed with them today. Let it be known that they're not fighting for the future of British Columbia, whether it comes to gas policy or coal or any of our other natural resources. Let it be known, Mr. Speaker, that they are just against development in British Columbia. They have never had any vision for the future, nor any courage. They're not fit to be the opposition in British Columbia, let alone the government.

MRS. WALLACE: Mr. Speaker, I would seek your guidance. I would expect, from the last speaker's closing remarks, that you would be prepared to accept an adjournment at this point in time.

Interjections.

MR. SPEAKER: Order, please. Is there a motion?

MRS. WALLACE: If the House Leader is not prepared to accept an adjournment, then certainly I'm prepared to carry on.

MR. SPEAKER: Please proceed, hon. member.

MRS. WALLACE: It's always interesting to listen to the minister of science, technology and all those grandiose things. When he talks about the building of the CPR I wonder whether or not he realizes that it was his former affiliate party that gave away the great part of the land base of Canada in return for the building of that railway. Now it would seem that this government is moving in the same direction, giving away our coal resource, not even in return for the building of a railway. They are preparing to tax the people of British Columbia and Canada to cover the costs involved in the construction of the infrastructure for northeast coal and yet are prepared to sell that coal at a cost less than will give a return — even anywhere near an amount that will give a return — just for the costs of getting rid of that coal. That is a giveaway, if I ever saw a giveaway. It has nothing to do with economics or good business judgment or anything else.

Certainly, if we look around the world to what's happening when Japan is dealing with other countries — for example, Australia, where they have offered concession after concession to the Australian government.... The most recent offer was to contribute $5.5 million to contribute towards the port construction there, and still Australia is playing it cautious and saying, "No, let's just take it easy," because they value that resource and recognize that that resource means jobs for Australians. It means a return to Australia rather than a giveaway to the Japanese, and that whole facet I intend to deal with later.

To begin with, I just wanted to quote very briefly from page 2 of the budget speech, where the Minister of Finance told us that they recognized that they were in trouble some months before, and they made a fast survey of the various ministries to see where cutbacks could be made. They brought in a hiring freeze. As we know, this affected ministries that provide services to the community, such as Health, Human Resources, the agricultural industry — which is a resource industry, of course.... But many of those ministries were hit by that hiring freeze and by the cutbacks that were initiated in a desperate attempt to try and balance this year's budget.

Then on page 8, at the bottom of the page, the minister says that "the province will be working to some very fine financial tolerances in 1981-82, leaving little margin for error. I cannot overstate how difficult this makes budget planning." Well, if past performance is any example of the fine tolerances to which this government is able to work in budgeting, then I don't look for anything in the line of a balanced budget next year — or anything even close to what the minister spent three hours telling us about yesterday — because all you have to do is pick up one of the documents that he filed yesterday with that budget to get some kind of grasp of the tremendous errors that have occurred in budgeting over the past fiscal year.

He talked about causing various ministries to cut back, and I'll certainly talk about that too. But what I'm speaking about right now are the special warrants that this government has issued. These are expenditures, as you well know, which are beyond anything discussed within this Legislature — completely beyond the scope of any of the debates and discussions that occupy a lot of time and cost the taxpayers a lot of dollars in discussing how moneys will be spent and what priorities will be given. Votes are passed in this Legislature and then the government proceeds to ignore those votes. They go around and ask ministers how they can cut back on votes legitimately passed by this Legislature. On top of that, they pass special warrants to cover expenditures that are not included in those budget estimates.

There will always be margins of error, but when the Minister of Finance talks about working to fine tolerances and trying to come up with very precise figures.... The fact that he turns in, along with that budget, a statement of special warrants passed in January, February and March of this year in excess of $225 million — $227,877,000, if my addition is correct.... If that's the kind of tolerances that minister is talking about, then we can expect a very different kind of performance during 1981 and 1982 than is outlined in the budget which he has presented to us this year.

[ Page 4433 ]

That budget means nothing if he is prepared to have that kind of money issued under special warrants over and above anything discussed in the estimates and the budget debate in this Legislature. At the same time he is prepared to go to ministers and ask them to cut back on their expenditures, to put on a hiring freeze and to curtail services that have been passed in this Legislature. Then we know that the budget document that's presented in this House really is meaningless and the time and effort spent in debating it is not worth the cost to the taxpayers, because they really don't intend to abide by those budget guidelines in any way, shape or form. In reviewing the table which you attached to the budget on the operating budgetary expenditure by ministry, we see a whole lot of revised estimates. Many of those are revised downwards.

Transportation and Highways has been curtailed something like $20 million from the amount of money that was voted during this last legislative session. Provincial Secretary has a $19 million reduction. Municipal Affairs is down by $5 million. I'm just picking the ones that are rather excessive. Industry and Small Business is down by nearly $8 million. Human Resources is down by $9 million. Agriculture is down by $6 million. Reductions that have been made in the spending of this province are contrary to the decisions of this Legislature, just as the special warrants are increased expenditures contrary to the decisions of this Legislature. That's high-handed cabinet government. It simply ignores the democratic process. It doesn't give due credit to the process that takes place in this Legislature. In fact, it borders on contempt for this very institution. It's shocking!

I mentioned that the Ministry of the Provincial Secretary was cut back — a cutback of $9 million. When we look at the budget statement, it doesn't show that revised estimate. It shows the original estimate, and makes a comparison in the amount that's being expended this coming year related to that original estimate rather than what was actually expended. The same is true for Human Resources.

I have some grave concerns about what is happening in Human Resources. My colleague for Nanaimo (Mr. Stupich) has mentioned the problem with the shelter allowance for people on social assistance. It's estimated by officials of that ministry in my constituency that over 50 percent of the recipients of social assistance are spending some portion of their support allowance to cover shelter. I submit, Mr. Speaker, that when an agent of this government in the person of the rentalsman allows rental increases ranging from $35 to $65 in various apartment houses in the Duncan and Cowichan area, and then another agent of this government responsible for funding shelter for the less fortunate people in that area is obligated to ensure that that allowance increases accordingly.... Those allowance increases are not happening.

Rental increases are evident all around this province and perhaps more evident in the larger centres. But I'm talking about a relatively small community where I know, in fact, that those rental increases have gone up as much as $35 to $65 in one particular apartment. It means that many seniors living there and many people in receipt of social assistance are using the money that should be allocated for food and clothing and transportation. They're eroding that amount and putting it into much-needed shelter, because there are no alternatives. I've had people come into my constituency office practically in tears. They have been looking and looking and Human Resources have been looking. There are no alternative accommodations. Those people are forced to use money that should be allocated to feed themselves and their families — to buy milk, eggs, other protein, fresh vegetables and fruit — and they're having to use that money and put it into shelter.

Then we wonder why our health costs are so high and why they keep escalating. We've just passed nutrition week, Mr. Speaker, and March is nutrition month. If we don't allow enough funding to allow people to provide an adequate diet for themselves and their families, then we can expect our health costs to continue to escalate.

It's very true that what we eat has a great influence on our state of well-being, and if there's not money to buy milk for children, the denticare program is going to be flooded with children with problems with their teeth. And if we don't have money to buy protein, fresh vegetables, vitamins and minerals, then the medical profession is going to be flooded the same way. That's what's happening and it's going to continue and to be escalated.

The policy of Human Resources — and they're always Ottawa-bashing, Canada-bashing, but they're not above accepting any grants that come from Ottawa. I'm speaking in this particular instance of the old-age pension. I have a couple in my constituency — the husband is a senior citizen, the wife is much, much younger. She's handicapped; she's in receipt of GAIN. They have a child. Every time the husband's senior citizen pension increases with the cost-of-living allowance that the federal government grants, the wife's GAIN allowance decreases accordingly. So now, in 1981, the wife's receipts are less than they were back in 1975. Those are the kinds of steps being taken by the Ministry of Human Resources.

They talk about giving adequate care and caring about people, and yet in order to keep a few more dollars in the kitty they're prepared to cut back, cut back and cut back, and they're prepared to accept that Liberal government funding from Ottawa. They tie it to the cost-of-living allowance given to a senior citizen in this province, and because his wife is not a senior citizen and is in receipt of GAIN her allowance is cut back every time his increases. I think that's a shocking attitude and a very wrong way for that ministry to proceed. When we see that it's underexpended this year by an amount of something like $9 million, then my concerns are very grave for the unfortunate people that find themselves in this position.

Another announcement that has concerned me very much in the Cowichan Valley, where we have a very high percentage of unemployed in the 18-to-25 year bracket, is the discontinuance of the youth employment program. When the announcement was made, the Minister of Finance went to the paper and said: "Well, the opposition is talking about something they don't know anything about. They should wait until they see what I have for them in the budget." Well, yesterday we saw, and what we're facing is increased taxation and nothing to assist young people.

It was interesting that the very same edition of the paper that carried the announcement about the cutbacks and the wiping out of the youth employment, program carried another article in the second section which detailed the difficulties young people have in getting summer employment. It was interviews with university students at the University of Victoria outlining the problems that they face and the lack of opportunity there is for young people trying to get employ-

[ Page 4434 ]

ment, trying to enable themselves to continue with their education. Yet this government sees fit to wipe out that youth employment program.

That's a callous move. It's disheartening to young people, discouraging, and it means that we're going to see more and more young people on the labour market. Because if they are not able to afford to continue their education, they're going to become permanent or temporary dropouts from the higher educational institutions, and we're going to find them out in the permanent labour market. And in spite of what the minister says about the employment in the north, there is not enough in this budget that will be meaningful enough at all to affect those young people about whom I'm so concerned.

Another thing that was mentioned in the budget is the reduction in the percentage of the assessed value for property tax from 14-something down to 11. Now that's a very creditable move, and I agree that that probably will work very well in the larger centres. But there are many small communities around this province — two of them have come to my attention; one is Lake Cowichan and one is Ladysmith — where assessed values have not escalated in the same way that they have escalated in other areas in this province. That means that because the assessment base has not escalated, the reduction to the 11 percent in those small areas is putting those communities in the position where, in order just to collect the same amount of tax — without anything for inflation — as they collected last year, they would have to have a special dispensation from the inspector of municipalities in order to increase their mill rate by that amount. I think that is something that the Minister of Finance and the Minister of Municipal Affairs (Hon. Mr. Vander Zalm) overlooked when they were doing this particular portion of the budget.

The Minister of Finance isn't here, but I would very strongly urge the Minister of Municipal Affairs that they have a second look at that 11 percent assessment base in small communities where the assessment rate has not escalated with inflation, because it is working a real hardship on some of those small communities.

Mrs. Wallace moved adjournment of the debate.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:28 p.m.