[ Page 4549 ]

CONTENTS

Routine Proceedings

An Act Respecting the Televising and Other Broadcasting of Debates and Proceedings of the Legislative Assembly of British Columbia (Bill M202). Mr. Leggatt.

Introduction and first reading –– 4549

Oral Questions

British Columbia Systems Corporation. Mr. Levi –– 4549

B.C. Rail resignation. Mr. Leggatt –– 4550

Northeast coal development. Mr. Leggatt –– 4550

Resignation of Don Watson. Mr. Leggatt –– 4550

Mr. Barrett –– 4550

Budget debate

On the amendment.

Mr. Cocke –– 4551

Hon. Mr. Phillips –– 4556

Mr. Stupich –– 4560

Mr. Howard –– 4563

Division on the amendment –– 4567

Hon. Mr. Waterland –– 4567

Tabling Documents

Public Service Commission annual report for the 1980 calendar year.

Hon. Mr. Wolfe –– 4568

The House met at 2 p.m.

Prayers.

HON. MR. HYNDMAN: In the members' gallery today we have a special visitor from Vancouver South. On behalf of the Minister of Environment (Hon. Mr. Rogers) and myself I ask members to join in welcoming Mr. Bill Keeley.

MR. GABELMANN: Every year Crown Zellerbach arranges tours of the precincts of the Legislature for students in high schools in constituencies in which Crown is a major employer. In the gallery today is a large group of students from the Campbell River area together with some of their teachers and officials of Crown Zellerbach. I'd ask like the House to make them welcome.

MR. RITCHIE: I ask the House to welcome a group of students under the leadership of Mr. Arthur Ross, 15 of whom are from Cape Breton College and approximately 15 from the Fraser Valley College. It is a student exchange program, and I'd the House to welcome them to British Columbia and to this House.

Also, I have a younger sister of mine and her husband, Lillian and Peter Berry, visiting us from Toronto, Ontario. Would the House please welcome them.

HON. MR. PHILLIPS: It's my pleasure today to welcome visitors from that great province of Manitoba. Visiting us in the gallery are the Hon. Frank Johnston, Minister of Economic Development and Tourism, and his lovely wife Hazel. I hope the House will make them feel warm and welcome in the great province of British Columbia.

HON. MRS. McCARTHY: I would like to ask the House to welcome a gentleman who is no stranger to this Legislature, but who I believe is visiting for the first time as a member of the private sector after doing a very good job for the province of British Columbia in the public service. I'd like the House to welcome Mr. David Brown.

Introduction of Bills

AN ACT RESPECTING THE
TELEVISING AND OTHER BROADCASTING
OF DEBATES AND PROCEEDINGS OF THE
LEGISLATIVE ASSEMBLY OF BRITISH COLUMBIA

On a motion by Mr. Leggatt, Bill M202, An Act Respecting the Televising and Other Broadcasting of Debates and Proceedings of the Legislative Assembly of British Columbia, introduced, read a first time and ordered to be placed on the orders of the day for second reading at the next sitting of the House after today.

Oral Questions

BRITISH COLUMBIA SYSTEMS CORPORATION

MR. LEVI: I have a question for the Minister of Finance. I have a small preamble: last year I tried on three different occasions to get an answer from this minister on the Systems Corporation, and I'll try again this year. Last July the B.C. Systems Corporation announced that they were opting for the IBM main-frame architecture, and I would like the minister to tell the House what steps have been taken to dispose of $11 million worth of Honeywell equipment that presumably will become surplus to the needs of the Systems Corporation.

HON. MR. CURTIS: Mr. Speaker, I have a little bit of a preamble in return: I think I did assist the member to the fullest extent possible last year. In order that I can deliver an absolutely complete and correct response to the hon. member, I'll take the question as notice and will bring it to the House just as soon as possible.

MR. LEVI: I have a new question, Mr. Speaker. Just to remind the minister, I asked him on April 29, 1980, and July 24, 1980, and ironically he gave exactly the same reply as he just gave now, that he was going to assist me, but he never did.

I have a new question: can the minister confirm that the conversion to the IBM main-frame option that the Systems Corporation has opted for, which is proposed to be completed by September of this year. will cost in excess of $25 million more than what appears in the budget?

HON. MR. CURTIS: Mr. Speaker, I think that I would also want to be completely accurate in responding to that question. I will also take that question as notice. Of course I remind the hon. member that my estimates were presented last year; there was ample opportunity then to discuss the question of the B.C. Systems Corporation. I think Hansard will show the extent to which the member pursued these several questions at that time.

MR. SPEAKER: The question is taken as notice. A new question from the member for Maillardville-Coquitlam.

MR. LEVI: It might interest the minister to know that I was on government business down in Winnipeg last year when his estimates came up.

MR. SPEAKER: Order, please.

MR. LEVI: Can the minister confirm that the B.C. Systems Corporation's staff has ballooned to nearly 600 people? That is not counting the number of people who are hired through what are known as body-shop operations within the data processing system.

HON. MR. CURTIS: Mr. Speaker, I think that the member would want to check his figures very carefully.

MR. LEVI: Is the minister saying, Mr. Speaker, that the figures are not correct? If they're not, would you mind telling me on what he bases his information?

HON. MR. CURTIS: Mr. Speaker, I simply advised the hon. member that he should check his figures very carefully. I did not deny the figures offered in the question.

Interjections.

HON. MR. CURTIS: I don't take questions lightly in this House, and I trust that members opposite won't take the answers lightly. I will also review that particular point in preparing information for the hon. member and bring it to this House as soon as possible.

MR. LEVI: Last year at one of its meetings the Committee on Crown Corporations passed unanimously a motion recommending that the government add to the schedule of the

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committee the B.C. Systems Corporation and the B.C. Buildings Corporation. Has the minister decided to recommend to the cabinet that the B.C. Systems Corporation in fact be added to the work of the Crown corporations reporting committee?

HON. MR. CURTIS: Mr. Speaker, that matter is under review with respect to the B.C. Systems Corporation. The member will know that I am not the minister responsible for the B.C. Buildings Corporation.

MR. LEVI: I didn't mention it in the question.

MR. SPEAKER: Order, please.

MR. LEVI: Mr. Speaker, the minister appears to be uninformed about the B.C. Systems Corporation. Can he tell the House when he last attended a board meeting of the B.C. Systems Corporation?

HON. MR. CURTIS: Mr. Speaker, some months ago. I have not attended regular meetings of the B.C. Systems Corporation board. One step, which I took last year because I believed it was appropriate, was to step down as chairman of that particular Crown corporation. That is in line with this government's policy with respect to inviting individuals from the province at large to serve on various boards of directors. I must confess that other activities, including three months of Treasury Board work in preparation of the budget, precluded my participation in a number of activities which I would normally have attended to.

MR. LEVI: My God, it's tougher getting answers out of this minister than that little minister of economic development.

Can the minister tell us, on the basis of what he knows about the operation of the Systems Corporation — which is somewhat miniscule — whether he is satisfied with the operation?

Interjection.

MR. LEVI: He is the minister who has to answer this. Is he satisfied up to this point in time with the operation of the Systems Corporation?

MR. SPEAKER: The first part of that question is clearly out of order. Its scope is beyond the time of question period. But the second part is in order.

HON. MR. CURTIS: Mr. Speaker, there is no corporation managed by people which cannot be improved. I am generally satisfied with the operation of the British Columbia Systems Corporation. We have added to the board of directors, as the member would know from public record as well as from questions answered in this House. I am satisfied that we have a very competent board of directors and a good senior administration. That is not to say that there is no room for continued improvement in the performance of that or any other corporation, whether private or public. I am satisfied that the board, senior management and employees are striving toward that perfection.

B.C. RAIL RESIGNATION

MR. LEGGATT: Mr. Speaker, my question is addressed to the Minister of Industry and Small Business Development. In his capacity of having responsibility for B.C. Rail, can the minister advise the House whether anyone on the board of B.C. Rail has tendered or submitted a resignation since January of this year?

HON. MR. PHILLIPS: Mr. Speaker, the answer to the member's question is no.

NORTHEAST COAL DEVELOPMENT

MR. LEGGATT: The minister's principal advisers — both his private consultants, Dalcor, and the senior officials in his department — recommended that there should be a six-month delay in the delivery date for northeast coal, expressing doubt that that coal could come on stream at the projected delivery date. Would the minister advise the House what penalty is to be incurred in the event northeast coal is not delivered on time.

HON. MR. PHILLIPS: I'd like to correct the answer to my previous question. Mr. Don Watson resigned as a director of the British Columbia Railway due to his interests in B.C. Cellulose — reasons which he made known at that time.

In answer to the second question, there could be problems with the development of the coal mine in view of the weather conditions. There could be strikes. There could be problems in bringing the mine on stream, and there are no penalties that I'm aware of at the present time.

RESIGNATION OF DON WATSON

MR. LEGGATT: I appreciate the minister's correction to the first question. I'd like to follow that up with this question. Can the minister give this House an assurance that none of the reasons that Mr. Watson has for resigning are related to BCR's involvement in the northeast coal development?

HON. MR. PHILLIPS: In answer to the member's question, I'll put it this way. In my deliberations and discussions with Mr. Watson when he was advising me of his reasons for resigning, none of them, let me assure this House, had anything to do with the development of northeast coal. I would suggest that if the member wishes to pursue that matter further he should do so directly with Mr. Watson. But I want to assure the House once and for all that none of the reasons given by Mr. Watson in his discussions with me had anything to do with northeast coal, and I regretted that Mr. Watson had to resign, because he was of a great deal of assistance to me when we were trying to put our first independent board of directors together.

MR. BARRETT: Now that the minister has recalled that Mr. Watson has resigned from the board of B.C. Rail, can he tell us whether or not he was present at the board meeting at which Mr. Watson submitted his resignation?

HON. MR. PHILLIPS: Mr. Speaker, I want to make sure that I'm accurate in this. I'm not aware that Mr. Watson resigned at a board meeting. If he did resign at a board meeting I was not present, but Mr. Watson personally delivered a letter of resignation to me which I have on file.

MR. BARRETT: Can the minister tell the House whether or not he was present at any board meeting attended by Mr. Watson at which northeast coal was discussed?

HON. MR. PHILLIPS: My answer to that question would have to be yes, if I can recall from memory. I'd have to check the records because I want to be perfectly honest with

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the House, and I have nothing to hide. I want to tell the Leader of the Opposition that I have nothing to hide. I would have to check the records, but I do know that at least prior to September.... But I'd be quite happy to check through the minutes of the board meetings and advise the Leader of the Opposition at what meetings Mr. Watson was present and what aspects of northeast coal were discussed at those meetings.

MR. BARRETT: On a supplementary, Mr. Speaker, I did not accuse the minister of lying to the House.

MR. SPEAKER: Order, please.

MR. BARRETT: Well, I didn't, and I want to make that clear.

I ask the minister: does he recall specifically any meetings of the B.C. Rail board at which he was present where details, any aspects, general terms, or any conversation about northeast coal...? I'm not asking the Premier: he'll get his turn. I'm asking the minister. Were you present at any meetings, through you, Mr. Speaker, at which any aspect of northeast coal was discussed, and did you have any exchange that you recall with Mr. Watson about northeast coal at those meetings?

HON. MR. PHILLIPS: The question from the Leader of the Opposition has a tendency to insinuate some discussion or something, and I know the Leader of the Opposition would not want to insinuate that to the Legislature. Therefore I will provide the Leader of the Opposition with the dates of the meetings at which Mr. Watson was present when there was discussion of northeast coal. I'm happy to advise the House that I shall take that question on notice.

MR. PASSARELL: Mr. Speaker, I rise under the provisions of standing order 35 to request leave for the adjournment of the House to discuss a definite matter of urgent public importance.

MR. SPEAKER: Please state the matter.

MR. PASSARELL: Within two weeks Amax of Canada will start dumping 12,000 tonnes of toxic waste a day into the Nishga food fishery at Alice Arm. An early acceptance of this motion will spare the residents of the Nass Valley and other coastal communities the adverse effects of toxic wastes upon their lives. I have a motion to move, should the urgency of this matter be recognized by the Chair.

MR. SPEAKER: While I am waiting for the motion, I would like to thank the hon. member for advising the Chair in advance of the session so that proper consideration could be given to the motion.

My review of the motion indicates that it would be out of order on the grounds that we have an opportunity at hand, being in the budget debate, for full discussion of the matter suggested in the motion. There is no question about its urgency; it is only a question of whether it can be discussed without adjourning the business of the House. I say the motion is out of order.

MR. BARRETT: On that point, Mr. Speaker....

MR. SPEAKER: There is no point, hon. member.

MR. BARRETT: I would just like to bring to your attention that we are on an amendment, not the main motion.

MR. SPEAKER: Hon. members, on a quick review of the amendment itself, it appears as though the amendment was designed to provide for as broad a debate as possible....

Interjection.

MR. SPEAKER: The motion is out of order.

Orders of the Day

ON THE BUDGET

(continued debate)

On the amendment.

MR. COCKE: Mr. Speaker, I rise to support the amendment for a number of reasons, and I am shocked that there are no speeches in support of the amendment from the other side of the House. I am particularly shocked when I've seen what some of the members across the floor have had to say about this government, its way of doing business, northeast coal and so on, in the recent past.

Mr. Speaker, we've been treated by one of those members to a series of theorems — as I would represent them — his theory being that what we have to do here is to get away from demand-side economics. We've got all this new language — supply side, demand side. We've got Milton Friedman and all sorts of other economists. some of whom lead us astray. I heard the member for North Vancouver–Seymour (Mr. Davis) speak in criticism — but very mild criticism — of the budget and the taxation that's going on. I heard him mention that we should get down to something in the order of 12 percent of the gross provincial product as a realistic amount for a provincial budget.

I know that Great Britain listened to Milton Friedman, and we've seen what happened to Great Britain since. I know the United States is taking a similar line. Somehow that kind of economics always ignores the huge budgets for armaments. They manage to rationalize them off to the side, that they really don't count. In this province I don't think we're spending a lot on our arsenal. Notwithstanding the Minister of Human Resources (Hon. Mrs. McCarthy) and her imagination, we have very little, I guess, to spend on defence. Therefore most of the money that is being spent in the budget on our kind of economics is for people services, as we have all noted.

I would like to draw the members' attention to the United States versus Canada in terms of the cost of health care. In Canada the cost of our entire health-care system — when I last saw that costed out — was 7.1 percent of our gross national product, paid for on a cooperative basis by all of us, either through taxation or some other form of premium. In the United States, where they don't have the same kind of proposition — people have to pay for their own for the most part — it’s 9.2 percent of their gross national product. We have to make up our minds whether we let the poor devil who is sick suffer economic hardship beyond endurance, and go for that sort of system, or whether we adopt the kind of system we

[ Page 4552 ]

have here where we share, as brothers and sisters, the good and the bad luck in terms of cost. Ours is a more economical system; that goes without saying.

You can go into many other areas of human services. I'm not standing here recommending that we as government should pick up the tab for everything, but I am suggesting that there are vital aspects of living, such as health care, which were once regarded as an area for the private sector but which are now adopted almost universally in those countries that have decided to go that route, which is to say that they should be a public obligation. I remember the days when medicare was looked upon as a commie plot. Nowadays even doctors' wives will admit that it's a first-class program — and I'm looking at one. Wouldn't you admit it?

MS. BROWN: Yes.

MR. COCKE: In any event, if we listened to reactionary statements such as, "Let's get it down to 12 percent," after having paid a miniscule part of the health-care program and a little bit for education and something in terms of human resources for those less privileged than the rest of us, there'd be nothing left. It's unrealistic, because we find that if they total the cost of health care alone in the United States, it would cost 9.2 percent of their gross national product until they became as efficient as we are — that is, if they went into a system such as ours. Over the 9.2 percent.... And if you're going to go up to only 12 percent, you haven't got a lot left — something over 3.8 percent left to pay for everything. That's the fallacy.

I'm not very pleased with this budget from a number of standpoints, but that isn't the one. I am displeased with the deceit of the budget. I'm very concerned about the fact that the budget ignores resource industry development and its return to the people in this province. It shows massive cuts. We've got the Minister of Finance, on the one hand, telling us that this province is going to have virtually a depression over the next year, if you believe his budget figures regarding the return of revenue from the resource sector. On the other hand we have the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland), speaking on February 27 of this year — that's not an archaic speech; that's relatively contemporary — to the Mining Association of British Columbia, And what did he say? He said at that time: "I'm sure we all agree it's been a good year." No, he rethought that. He said: "No, it's a great year for B.C. mining." Having said that, he went on to say: "The government is on your side." We know that. Then he went on to say: "We're not afraid to say we're bullish on mining." And we would agree they're bullish on mining and other things. "We're not afraid to admit we're pro-development when development is in everyone's best interest."

However, what is the telling part of this speech? The telling part is where he says — and remember this in the context of our budget that we're discussing now showing a return from mining and forestry dropping down to practically zilch: "Right now the mining industry in this province is booming. We're in the middle of a period of expansion" — not depression, recession or bad times for the mining industry — "which approaches, and will soon surpass, the boom times of the late sixties and early seventies." How do we put those two statements together — the statement of the Minister of Energy, Mines and Petroleum Resources and the statement of the Minister of Finance? We can't put them together; it's impossible. Logic is out the window.

He goes on say: "The surge of activity in recent years is partly due to the cyclical nature of mining, exploration and development, but is also due, in large measure, to industry-government cooperation and to industry-government sharing the same goals." Great! So they're sharing the same goals, they're going to have a boom, and yet we look at the budget and it says we're expecting much, much less from that particular sector. Who are we trying to kid? Are the cynics correct — the cynics who say that by underestimating to this extent we are really trying to produce a surplus, so that next year there can be massive homeowner grants, massive goodies for the folks? Then suddenly the Premier goes to Government House and asks that a writ be dropped. Oh, heaven help us. Can't we be saved from that kind of politics?

MS. BROWN: Again.

MR. COCKE: The member says, "again" and another member says: "Call an election now." Mr. Member for Prince Rupert (Mr. Lea), they're not going to call the election now. How could they on this budget? Have you been home to your constituency? They'll tell you.

The Minister of Energy, Mines and Petroleum Resources went on: "I don't want to spend much time going into details on these projects" — he's referring now to the northeast coal project — "or making apologies for those who feel the government did not act swiftly enough." He then started to speak considerably about northeast coal. He said: "The fact of the matter is that northeast coal is being developed now and it has far-reaching implications for British Columbia and for Canada. Once again the mining industry, working with government, will be making a crucial contribution to the prosperity of our province and our nation."

We've been asking questions of the Minister of Industry and Small Business Development (Hon. Mr. Phillips), asking him to give us just a few basic details of the northeast coal development. How much are the taxpayers of this province going to be asked for as their contribution, as their subsidy to this development and, in the long run, their subsidy of the steel industry in Japan? We're getting no answers. It is interesting to me that the Minister of Energy, Mines and Petroleum Resources gave no answers. He said: "The fact of the matter is that northeast coal is being developed now and it has far-reaching implications...." That says nothing.

Then he goes on with another vague statement: "Some have criticized the government's involvement with industry in developing northeast coal. Some say that the costs incurred by government establishing the necessary infrastructure will exceed the benefits accruing to British Columbia and Canada." Does he then say they are wrong? No. He says: "Well, these critics fail to see how northeast coal will be good for the provincial economy." Hey, that's a very incisive statement — something like the minister who is responsible for that northeast coal. He says: "Especially when other coal prospects in the region are made into mines...." We've been told that there is no further market. Even the member for North Vancouver–Seymour indicated that there would have to be a massive, 11 million tonne increase in order to make it a paying proposition. Since then we've heard from Japan and all the other regions in the world stating that there just is not that market, but the minister is leaning on that and suggesting that other mines will be developed. I wonder if we will be paying for the infrastructure there as well. How far afield are they? How far away from the central development are they?

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Anyway, Mr. Speaker, I suggest to you that we are really in a great quandary. I'm going to come back to northeast coal in a minute. I just want to read a couple more comments. He suggests here that: "The critics also failed to recognize the importance of northeast coal to the B.C. mining industry. Right now the industry's bright outlook is based mainly on the development of new metal mines. Yet from 1983 to 1985, and perhaps thereafter, coal will become more and more important to the industry and also the provincial economy."

I say that the minister's speech spoke for itself. If it were not going to be a cost factor, if it were such a tremendous boom, if it were such a tremendously great economic venture for the taxpayers of this province, who do you think would be told first? The taxpayers. Governments do not like to be unpopular, so therefore when they make a good deal they say they made a good deal and they tell you how they made a good deal. But this government has told us nothing other than the fact that there have been some possible deals made.

If it goes ahead one more inch before there is a revelation of everything going on in that situation, I say it is an absolute sin. There is no way this government or any government should get away with making all their decisions behind the closed doors of cabinet, not revealing who they're helping and why they're helping them. I say to you again, Mr. Speaker, that if they were actually helping the taxpayer they would have already told us how and why. Is it any wonder then that we on this side of the House have to say that we can't support the budget, and therefore must support the amendment? We're not alone, Mr. Speaker. Let me get off that aspect of it for a minute and let's look at the other side; let's look at another area.

Remember we're paying a marked increase in personal taxes. That regressive sales tax has been increased despite the fact that the Premier announced two years ago that it was permanent. We all remember it; we sat here and heard him tell us that it was permanent. And what do we find? Now it's up. The 7 percent went to 4 percent; the 4 percent goes to 6 percent — a 50 percent increase. For what? Putting it into that context, we know that resource revenues are underestimated. They must be — either that or we're going into a bust.

Listen to the other aspect, the other side of things. I want to quote to you from the B.C. School Trustees Association report. They've given all the MLAs, I'm sure, a fact sheet. If you haven't got one, I'll certainly get mine copied and send it on to you. What did they say the facts are? In order to get at the facts, they ask a few questions:

"Why are school district budgets doubling or tripling in some areas? Answer: they're not. The average school district budget is up 15 percent for 1981 — that's just 2 percent more than inflation to pay for additional programs such as education for the gifted and handicapped.

"How is it that Victoria can get involved in setting local school taxes? Answer: the provincial government sets the basic mill rate that school boards must levy on their taxpayers. This mill rate has nothing whatsoever to do with how much the local school boards plan to spend during the year. It's based on a province-wide, cost-sharing formula."

Don't forget, because they don't mention it here, that the Minister of Education in concert with the cabinet decides what that mill rate should be, not just the formula. They decide what the mill rate would be, which affects the formula and takes the taxing process back to the homeowner, sloughing it off.

For five years I've been standing in this House, along with my colleagues, saying that they were on a very bad track. They have increased that mill rate over 50 percent since they've been government. Then you go home and your constituent says: "What's happening to the cost of education?" The cost of education is going along at a normal increase.

MRS. DAILLY: An average of 15 percent.

MR. COCKE: Roughly 15 percent this year, but it wasn't that high last year. But they blame the school boards. They blame everybody but the actual people who decided the policy — the government. I only wish people could understand the hypocrisy of what goes on over there; I only wish, Mr. Speaker, that even people who are relatively close to government would get a better handle on what's happening.

We see a Premier who's suggesting that we should be out of here by the May 24 weekend, justifying it by saying there is going to be very little legislation. Well, I can tell my colleagues not to expect much legislation. Over the last three or four years we've been seeing the Legislature reduced in its power by vesting the power of the Legislature in the cabinet. Where do they make their decisions — in open debate? No, Mr. Speaker. not in open debate or in public debate; they make their decisions behind closed doors. What are their decisions? So far their decisions have been very bad.

Sometimes we smile in opposition. I sent a note to a government member the other day. He was saying something about lacklustre this or that or the other thing. I said: "You listen to the press, who don't listen to the Legislature." I said in the note: "Well, you know, what we're actually doing is watching you take a step at a time, and each step you take, you step on a banana skin." When will it end? I predict never. There is someone up there watching this process.

I want to go onto another question asked in this BCSTA report: "Then why hasn't the mill rate declined as property values have risen?" It says here that that's been a decision of the provincial government. Basically it's a matter of dollars and cents — the more a local taxpayer pays towards local education, the less the provincial government has to contribute. That's the key.

We asked the minister from Point Grey (Hon. Mr. McGeer); we're now asking the minister from Oak Bay (Hon. Mr. Smith): for heaven's sake get a little courage, act into that cabinet room and turn this process around. It's gone too far. It's absolutely asinine. The only reason it's in this particular bailiwick is by virtue of the fact that you can blame someone else — at least it looks that way.

I say that we've got to really think very carefully in this province about what we're doing, but until such time that this Legislature gets the facts, there is no way there can be properly considered debates in this House. We need the cabinet to come in here, open their books, tell us what's going on and let us know what we can anticipate in terms of future policy.

We have the amendment. The government has decided, one way or another, to not give it too much attention in terms of speaking or defending their position. Because of the northeast coal proposition I'm going to give them an opportunity to get up and say their piece. So I would move, seconded by the member for Skeena (Mr. Howard), that the amendment be amended by adding the following words....

HON. MR. CHABOT: Can't you make up your mind?

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MR. COCKE: We made up our minds, Mr. Minister, that we would wait for a day or two and find out whether or not you would answer questions. You haven't.

MR. SPEAKER: Order, please. Let's hear the amendment.

HON. MRS. JORDAN: You're amending your own amendment.

MR. COCKE: That's right, we're amending our own amendment.

HON. MRS. JORDAN: That's sloppy.

MR. COCKE: It's not sloppy at all. The jade queen speaks again.

MR. SPEAKER: Order, please. Please address the Chair.

MR. COCKE: Mr. Speaker, the amendment is that the amendment be amended by adding the following words: "to provide a public subsidy for the export of coal from northeastern British Columbia to Japan." Add that to the substance of the words in the amendment, and that is the subamendment.

MR. SPEAKER: Hon. members, the amendment, even if it were otherwise in order, would not be in order at this moment because a subamendment, like an amendment, requires notice in this House. So perhaps the member would like to give notice of a motion. It would appear on the order paper at the appropriate time and could be considered at that moment.

MR. COCKE: Mr. Speaker, on a point of order, the standing orders and all precedents have been researched for this particular amendment, and there has been no precedent with respect to that, nor any Speaker's decision. Mr. Speaker, I think it would be a very dangerous decision to set a precedent such as you are now thinking about, because that silences a question being put before this House, and I think that that kind of thing should never be tolerated in terms of House decisions. There's no question that the amendment is not substantive. It's a subsidiary amendment. On that basis I see no reason why it should not be accepted.

MR. SPEAKER: I have listened carefully to the member's opinion. I would be very happy to look at any precedent which the member would care to show which would support that particular opinion. Nonetheless, it would appear to the Chair to follow logically that if an amendment requires notice, then a subamendment would also require at least the same notice. That particular logic prevails in many of the other precedents that are established, not as touching this particular issue but as touching other issues. In the absence of a precedent which would clearly indicate this, I would be prepared to do a little further research and come back momentarily with a decision in this regard. I will accept another opinion though. The hon. member for Skeena on the same point of order.

MR. HOWARD: Yes, or a new one, whichever you prefer. I take it from your last sentence that you are going to take this matter under advisement.

MR. SPEAKER: Hon. members, it's under advisement right now. I'm accepting an opinion on either side, because if it is a precedent-setting decision that I'm going to make, I would certainly enjoy the opinions of both sides of the House.

MR. HOWARD: Then on the same point of order, I think what you identify as logic is probably peculiar logic, Mr. Speaker.

MR. SPEAKER: Order, please. That's out of order.

MR. HOWARD: There are two classes of motions or amendments by which we can proceed: one is substantive and the other is subsidiary. A subamendment is always identified as being subsidiary in this category. I think you have no choice, Mr. Speaker, but to accept it. If you want to proceed otherwise, then precedent-setting as it may be, the only other course available to us is to challenge that decision.

MR. SPEAKER: Thank you.

I'll accept an opinion from the member for Prince Rupert.

MR. LEA: Mr. Speaker, first of all you said that what led you to your conclusion was logic and common sense. I'm afraid that if you're going to follow that rule, we may be ruleless in the House for some time to come. I think that we do have to go by the rules, not by what we might assume at any given point is logic or common sense, whether we so regard them as logical or commonsense. But anything that I have read in this matter — and I spent considerable time in the last day and a half reading some of the work that has been done by this Legislature by the Clerks themselves....

MR. SPEAKER: Order, please. We don't refer to the Clerks in this House.

MR. LEA: We don't refer to them? Oh, in that case — by those who we're not allowed to refer to.

Anything that I've read in those papers have led me to the conclusion — as a matter of fact, it's in black and white in those papers — that there's an awful difference between a substantive motion and a subsidiary motion. That's what we're dealing with now, a subsidiary motion to the substantive motion, and it does not follow logically or reasonably that because one needs notice the other doesn't. So I don't think, Mr. Speaker, with all due respect, that it's us that has to do the research.

MR. SPEAKER: Thank you. I appreciate that opinion.

I'll accept an opinion from this side.

HON. MR. HEWITT: Thank you, Mr. Speaker. The subamendment or amendment to the amendment that's been raised would appear to me to be of considerable material importance to the original amendment. As a result it would only follow that as an original amendment requires notice, this amendment to the amendment, which is material, should also require notice in order for all in this House to be prepared to debate the issue should it be accepted.

MR. SPEAKER: I appreciate that opinion. I already have the hon. member for New Westminster's opinion.

[ Page 4555 ]

MR. COCKE: Mr. Speaker, on a point of order, the argument that the Minister of Agriculture raises — giving members an opportunity to discuss it or to think about it for two days.... How does he, therefore, hold with the policy in the throne debate where there's no need for any kind of notice? Frankly, though notice is historical and precedent, I think it's rubbish myself, but that's the size of it. As far as his argument is concerned, how does he put the two in tandem?

MR. SPEAKER: Hon. members, I believe I have sufficient opinion. I think I have your opinion, hon. member. On a point of order? How can you seek the floor?

MR. LEA: Mr. Speaker, because of the impasse we seem to be into and because of the importance of the subamendment to us, and I believe to all members of the House, a brief recess would be in order so that we can continue with a smooth flow of this House.

Interjections.

MR. LEA: They just don't want to discuss what's going to happen to the taxpayers' money in coal.

MR. SPEAKER: Hon. members, there is no impasse. The Chair is simply listening to opinions. A decision will be reached. I declare a short recess until such time as the decision has been reached, and I will ring the division bells at such time as I require your attendance.

The House took recess at 3:10 p.m.

The House resumed at 3:31 p.m.

MR. HOWARD: Mr. Speaker, I want to raise a point of order dealing with an instance in 1973 where a subamendment to an amendment "that Mr. Speaker do now leave the chair for the House to go into Committee of Supply" was moved and accepted without the requisite notice for the subamendment having been given. I apologize for not having this information available earlier, but we were not able to find any rulings to the contrary and therefore felt there would be no difficulty.

I would draw to your attention the Journals of the House dated February 22, 1973, 2 p.m.: "...the House resumed the adjourned debate on the motion 'That Mr. Speaker do now leave the chair'... The debate continued. Mr. D.A. Anderson moved in amendment, seconded by Mr. Gardom, that the motion 'That Mr. Speaker do now leave the chair'.... Then there proceeds an amendment, which I don't need to read. That notice in the Orders of the Day, for that day, February 22, appears under item 26 as: "Mr. D.A. Anderson to move," and is an exact recitation of the motion he subsequently moved, notice having been given.

On the same day, February 22, 8 p.m. — that was when we had evening sittings — " 'That Mr. Speaker do now leave the chair' for the House to go into Committee of Supply. The debate continued." This is at page 105: "Mr. Phillips moved a subamendment, seconded by Mr. Smith, that the amendment to the motion 'That Mr. Speaker do now leave the chair' be amended by adding after the word 'taxation' in the fourth line...", which is a subamendment.

There is no indication in the order paper for February 22 of notice having been given for that particular subamendment. I also draw your attention to the fact that on that particular day the debate was adjourned on the motion of one Mr. Schroeder. So I wonder if Your Honour would take those into recognition: a subamendment was moved, the requisite notice not having been given; it was accepted by the Chair, and I submit that constitutes practice where there are no rulings to the contrary.

MR. SPEAKER: The fact that the sequence of events to which the member has just referred has notice, although notice was proceeded upon with only one day of elapsed time, according to my review of the records.... The implication is definitely there that it was the original intent that notice was required, or else it would not have appeared in the Votes and Proceedings of February 21.

I have all of the opinions which I require, and I would bring the following ruling. Standing order 56 says: "Only one amendment and one subamendment may be made to a motion for Mr. Speaker to leave the chair for the House to go into Committee of Supply or Ways and Means." The eighteenth and the nineteenth editions of May reflect the drastic changes in the supply procedure in the United Kingdom, and as such are not of assistance in providing guidance on the interpretation of this standing order. As in other amendments, the ordinary rules of debate apply to amendments to this question with these exceptions: (1) amendment to this question is unaffected by the relevancy rule — Beauchesne's fourth edition at page 171; (2) the rule which prohibits reference to matters involving legislation does not apply to this amendment — May's seventeenth edition. page 756; (3) only one amendment and one subamendment are permitted; and (4) notice is required — May's sixteenth edition, page 728, and also in the B.C. Journals, April 11, 1918, page 148. Rules regarding the amendment to this particular motion are well established, both in the United Kingdom and in this House. A subamendment, by nature, is intended to amend the very same amendment which requires notice. Sometimes we assume that because we say subamendment it is less in importance than the amendment.

Thirdly, in the absence of any Speaker's decision or any other authority which would exclude the subamendment from the restrictions which are ordinarily attached to the amendment itself, it must surely follow that the rules applicable to the amendment are equally applicable to the subamendment. The absence of objection means that the consent of the House was implied and, of course, with leave, notice could be waived. I so rule.

MR. HOWARD: I challenge your ruling. Mr. Speaker.

Mr. Speaker's ruling sustained on the following division:

YEAS — 29

[ Page 4556 ]

NAYS — 23

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

MR. KING: Mr. Speaker, I didn't see the Minister of Municipal Affairs (Hon. Mr. Vander Zalm) on his feet when the voting for the affirmative took place. Perhaps I'm mistaken, but it looked to me like he was sitting down.

MR. COCKE: Mr. Speaker, I ask leave that we go to the subamendment.

Leave not granted.

MR. MUSSALLEM: On a point of order, I officially notify you that it has come to my attention that when the first division bells rang they were not heard in three of the offices, and if they were heard it was only poorly. This is not a new situation, and I appeal to your judgment that this could be rectified.

MR. SPEAKER: Hon. members, during the recess, if not during the last session, we had undertaken to spend a considerable number of dollars to make sure that division bells are heard in every office. If we have failed, I must accept that responsibility, and I apologize to the House.

On the amendment.

HON. MR. PHILLIPS: I must say that I'm certainly very happy to be able to take my place in the debate and to inform the House that I intend to vote against the amendment which the socialists have before this Legislature. The reason I have to vote against it is that it is very typical of the socialists to put an amendment on the floor and really say nothing. It is meant strictly to criticize this very sound budget. It is probably one of the best budgets ever brought down in the province of British Columbia, at a time when other governments across this nation are bringing in deficit budgets.

I'm also very pleased to have the opportunity to take my place in the debate this afternoon and to say a few words about northeast coal, I want to tell you just how pleased I am that the socialists opposite have finally stated their position emphatically. They are against the development of northeast coal. So far in this debate — and since the announcement of northeast coal — they have been reluctant to come out and really show their true colours. But this afternoon they have finally put their position forward. I want all the people of this great province to know that the socialists opposite are against the development of northeast coal. I want to tell you that that group opposite has great rear vision, without even using a rear-view mirror.

[Mr. Strachan in the chair.]

I want to recall for the people of this great province of ours that that group opposite has been against every development that has ever taken place in the province of British Columbia. They were against the development of our two-river policy. I want to tell you that if we had listened to them we'd be reading with candles in the province of British Columbia today. They've been against the development of our dams. They've been against the development of highways. They have been, and still are, against the development of bridges to carry the commerce of the lower mainland. They're against powerlines. They're against gas pipelines. They're against mining development. They're against the development of our natural resources. Generally they're against everything that is good for the economy of this great province we live in. When I listen to the opposition and to other critics of this great development, I have to ask myself this question: where has the vision, courage and foresight gone from this great nation of ours — the vision, the courage and the guts that our forefathers had to develop this country?

If we had continued to listen to the carping socialists opposite we'd still be riding on horses and reading by candlelight. Their policies are against development. Sometimes I think they think that all we have to do to find the money to provide the services that we enjoy in this great province today is to go out and pick the money off a tree. They fail to realize that it is a strong and growing economy which provides the tax money to pay the social services bill in this province.

I'm not against social services. With this great and growing province which we have, I think we can all enjoy the benefits of our natural resources. But we can't enjoy the benefits of those natural resources unless they are developed. We can't enjoy the results of those developments if the resources stay in the ground. But they talk about subsidizing economic development. Their policy is that they want to use taxpayers' money to go and buy the economy that already exists, and not create one single new job. They want to use the taxpayers' money to go out and buy companies that are going broke so that they can truly use the taxpayers' money to subsidize those enterprises.

I want to say once and for all that there is no subsidization of northeast coal by the taxpayers of British Columbia. Let's get that straight: there is no subsidization of northeast coal. I guess what bothers the socialists is that they thought northeast coal would never be developed. Then, when they heard the announcement, they were so amazed that they didn't really know how to criticize it. They didn't know whether they were going to criticize it or not. They didn't know whether they were for it or against it. But finally, this afternoon, we smoked them out, and they have come out emphatically.

What amazes me is that the socialists over there — if I recall the budget debate last year — were saying that we weren't doing anything as a government to create new jobs. Here we have a project that will create thousands and thousands of jobs, diversify our economy, provide economic development for decades to come, and they've finally come out against it. I think their attitude must be that they're really unhappy with this government because we're not spending a huge portion of our budget to pay off debts, because we haven't borrowed for the future. We're paying as we go — let every government in Canada try and follow our example — and we can pay as we go. We can take money and invest in the future economy of this province because we've done a good job of running the finances in this province, and because of no other reason.

[ Page 4557 ]

I remember that not long ago in this Legislature there was some criticism of how the federal government didn't put enough money into northeast coal. I'll tell you why they couldn't put money into northeast coal. They didn't have it to put in. They don't have it to put in because they haven't done a good job of running the finances of Canada. When I pay my income tax bill and 20 cents out of every dollar goes to alleviate a debt which has been created by that government, as a taxpayer it doesn't make me very happy. But in this province, because we have had sound fiscal policies, we are able to take some of that money and we are able to invest it in the future economy of this province. If we hadn't run this province the way we've run it and had good fiscal responsibility and paid as we went, we wouldn't have those dollars to put into developing the economy for decades and decades — we'd be paying it off to the banking system in repayment and in interest.

No, in this province, because we have been fiscally responsible, we can take a very small portion of our overall budget — it is a very small portion of our overall budget — and we can invest it in the future economy. When a government or a country fails to invest in the future, then that country is destined to financial ruin. All you have to do is look at what's happening in Ottawa today to realize how true that is, because that is what is happening.

Now there has been a lot of talk about whether it's a grant or a loan. I want to tell you, when it comes to the federal government putting money into the future economy of this province or developing any infrastructure, whether it's a grant or a loan or a subsidy depends on what part of the country it is going to.

Interjection.

HON. MR. PHILLIPS: Yes, I'm right. When it comes to western Canada it seems to be a subsidy, but if it's in any other province in this country, it's called a loan or a grant. But if the federal government had a surplus, I'm sure we might have been able to talk them into investing in the future. But as it is, thank heavens, they are putting some money into the port at Ridley Island.

I don't want to talk too much about port development on the west coast other than to say this: we are told by the federal government that only the National Harbours Board can run the ports in this country. British Columbia, Alberta, the city of Victoria, the city of Prince George or the city of Prince Rupert were not capable of running a port. It has to be run for the good of Canada. You go to Rotterdam, Antwerp, Hamburg, Sydney or practically any port in the United States, and who runs the ports? They're not controlled 3,000 miles away by a bureaucracy called a National Harbours Board. They're run by independent entities within those cities.

MR. LEGGATT: You've seen them all.

HON. MR. PHILLIPS: Yes, I've seen them all. You'd better believe I've seen them all. I just wish I could instil into the people of this province some of the vision and courage that the port authorities in those individual cities have. If you go to Rotterdam they've got thousands and thousands of acres reclaimed out of the sea for future port development. You go to the little country of Singapore and they've got thousands of acres prepared for future development. But we as Canadians have to look backwards because we have no courage or guts — either that or we haven't got the money to put into the development of our ports. If you look at any country and the history of any country without port development and transportation facilities, that particular country doesn't survive for long; it goes backwards.

I'm looking at the member for Nanaimo (Mr. Stupich). Who had the courage to go into Duke Point and develop that harbour facility? It wasn't the NDP or the federal government. I had to drag them kicking and screaming into the development of Duke Point. But the member for Nanaimo knows how beneficial that port development will be to Nanaimo. As a matter of fact, because of the great development at Duke Point, Nanaimo looks to the future with a great deal of courage because they know they're going to have a strong economy. The NDP have faith in it because they're building a new multimillion dollar hotel on the backs of the development put in by this government and the British Columbia Development Corporation — the Comrade Hilton.

I'm happy to speak against this motion. This amendment really says that we should not increase taxes. In saying that we should not increase taxes. that means that we're either going to cut programs.... They don't want to cut programs, because they stand in this Legislature and say we should be spending more and that we're not doing enough for Health, Human Resources or Education. So they want us to spend more money, but they don't want us to raise taxes. That, leaves only one alternative; that alternative is deficit financing.

Surely we can learn from history. All you have to do, my friends, is look, for instance. at the city of New York. It's a financial disaster because of overspending on social programs that they couldn't afford. All you have to do is look to our own country — overspending, not being fiscally responsible and building up huge debts that every taxpayer today, the sons and daughters of the taxpayers of today and the grandchildren of the taxpayers of today will be paying for. I'm glad that I'm not part of any government that spends today and asks my son or my grandsons to pay for it. I want to be part of a government that is fiscally responsible and says "pay as you go."

MR. LEGGATT: What about B.C. Rail?

HON. MR. PHILLIPS: There are the merchants of gloom over there. I'll talk to you about British Columbia Railway, which has been the best economic tool of any investment by the taxpayers of British Columbia and has done more to make this economy sound. It's this government that was the first government in history to put money into B.C. Rail and recognizes how great a contribution the British Columbia Railway has made to the economy of this province. It's because of B.C. Rail that we can subsidize the ferry system to Vancouver Island and transit on the lower mainland. It's because British Columbia Rail has had the vision and the courage, and it opened up the economy of our north country. One dollar generated in the north country is multiplied into $5 or $10 in the lower mainland area.

Taxes. I want to tell you, Mr. Speaker, that we are recognizing for the first time in history that the taxpayers of this province owe a great debt to the British Columbia Railway. We wouldn't have the economy that we have today if it wasn't for British Columbia Rail. Those merchants of gloom over on the other side — those socialist hordes — are against everything that we on this side of the House have ever done.

[ Page 4558 ]

They say that we're putting onerous taxes on the people of this great province. Mr. Speaker, I want to tell you that we're reducing taxes to the people of this province. Maybe the gang on the opposite side of the House is against a reduction in personal income taxes for about 40 percent of the taxpayers in this province. Maybe the socialist hordes are against that, Maybe, on the other side of the House, they're against having a reduction in the tax for small businesses. I think they are because their amendment really says that. They say we're putting onerous taxes on the people of British Columbia. I say we're reducing taxes to a large number of the people of British Columbia, and we're putting the taxes on the people who can most afford to pay them. We're relieving those who are not as fortunate as others of some of the onerous burden of taxation. I want to tell you that in the five years that we've been government this is the only government in the jurisdiction that has increased services to people, at the same time building a strong economy and reducing taxes. We will continue to follow that philosophy.

The only reason that we can invest some of our money in the future economy is because we have the money to invest. It's a very small portion of our overall budget that we're investing in the future economy, so that the young people who are growing up today will have the same opportunity to have a job that we had when we were growing up in this province.

Mr. Speaker, for the record I want to give you a few facts and figures on northeast coal. What I'm going to do is give you a breakdown of the estimated private and public sector investment for the Bullmoose and Quintette mine development as a result of the agreed sale to the Japanese steel industry. I want to tell you that these are 1980 dollars, and they are the best preliminary estimates that we have. They are for costs only and they do not include interest or inflation. It is estimated that the private sector will invest $881 million in bringing their mine developments on stream, versus the provincial government investing $111.3 million in infrastructure. That figure for private sector investment includes: Quintette coal-mine development, $530 million; Bullmoose mine development, $150 million; private-sector port facility investment, $73 million; private-sector investment in the townsite, $128 million — for a total investment by the private sector of $881 million.

The British Columbia Railway will invest in a spurline, which will serve for decades to come and will serve other mine development in the area: upgrading the existing line, $35 million; the Anzac branch line, $310 million; rolling stock, $27.2 million — for a total of $372.2 million. The investment in the Anzac spurline of $310 million will not be totally recovered by the first two mines.

I don't think that it would be fair to ask for the first two mine developments in that new inland empire to be saddled with the total costs of that spur line, because that spur line will be there for decades and will be available for use by other coal-mines in the area.

It's been said that that is a large investment — $310 million to build a short spur line. In that figure is $150 million for approximately ten miles of tunnels. A little quick arithmetic and you will find that we have estimated over $15 million a mile to build the tunnels. I want to tell you that that investment of $310 million today will be worth billions of dollars by the turn of the century. I want to give you a small example, When we were building the first power dam on the Peace River, I remember the socialist hordes saying in those days when it was going to cost $880 million: "Oh, it's going to break the province. It's too soon. We should wait." We moved forward with our two-river policy and thank heaven we did, or, as I say, we'd be reading by candles in British Columbia today. I want to contrast the cost of constructing that first dam for $880 million. We're thinking about building a tea kettle in comparison to the size today at Site C. What's the cost to the people who use hydro in this province? We're talking about $2 billion to $3 billion for a dam a fraction of the size of the original one.

So I am saying to the people of British Columbia that this investment of $310 million to build a railway into a resource rich area which is capable of shipping 30 million tonnes of coal is a good investment, and the longer we leave it the more costly it will be. It's an investment in the future and one which will not depreciate even though we may have to depreciate it on the books of the British Columbia Railway. The cost of that line will not depreciate. The value of that line will appreciate and will be there for future generations.

The Canadian National Railway's upgrading of their line from Prince George to Prince Rupert will be paid for by the movement of coal, but that upgraded line will be there for the movement of grain and other bulk commodities from western Canada because it is being upgraded. Upgrading costs $125 million; rolling stock costs $62 million. The total is $187 million. We're going to build a townsite, and there have to be some community services. For these community services, it's estimated that the bill will be $25 million. What is the federal government putting in? They would be contributing $20 million for port site preparation and $4 million for the townsite, because of shared programs, totalling $24 million. I want to reiterate that the provincial government and the local government will be putting in $136.3 million versus $881 million being invested by the private sector.

Not too long ago there was some criticism of the environmental aspects of northeast coal. I want to set the record straight and tell this House and the people of British Columbia the story on environment when it comes to northeast coal. Time sure does fly. We have completed 37 studies with regard to the environment during the pre-feasibility stage in planning for northeast coal. The provincial and federal governments spent and cost-shared $2,160,389 on these studies. During this period, our own Ministry of Environment spent an additional $500,000 to $800,000 on environmental impacts. I have ensured that in order to process permits, monitor progress and manage the development the Ministry of Environment will have sufficient funds in its budget this year to do so, and, indeed, there is $750,000 in the budget of the Minister of Environment (Hon. Mr. Rogers) to monitor the progress of northeast coal development.

To date, this is one of the best planned projects, environmentally, of any project of this magnitude ever undertaken in this province. The province has accepted responsibility for environmental studies and has met the spirit and intent of processing guidelines for all major off-site support facilities — for example, the railway, highway, hydro and townsite. The province also initiated studies of potential coal dust problems in the Prince Rupert area. These studies, done by some of the best experts in private and public sectors, proved that he problems could, and would, be overcome.

With regard to the coal mines themselves, they will meet the requirements of every act and regulation that exists. I want to emphasize, for the record, for all British Columbians inside and outside of this House, that there will be no changes

[ Page 4559 ]

in those laws to accommodate these developments. I hope that, once and for all, those who are concerned about the environmental impacts of northeast coal will now have those concerns relieved, because I want to emphasize again that no project of this magnitude has ever had so much emphasis on environmental studies and environmental impact.

I just want to get back to speaking against this amendment. I want to assure the members opposite that when my estimates come up or when I have an opportunity to speak in this House again there will be lots of opportunity to ask further questions on northeast coal. I will be quite prepared to answer them. I'll be quite prepared to answer all your questions.

MR. LEGGATT: In question period too?

HON. MR. PHILLIPS: Well, yes, in question period, if you phrase the question so that you give me an opportunity to give the proper answer.

MR. LEGGATT: I will.

HON. MR. PHILLIPS: As I said before in this House, I don't have the courtroom training of some of my critics on the opposite side of the House, and I must be very careful that I hear the question properly and that I give the proper answer. But I want to assure the House that I will do my utmost. I will call on all my resources and all my training as an MLA, and I will do my utmost to ensure that the story is out.

I want to say something against this amendment. I want to tell all members of this House that even though the NDP — the socialist hordes over there — may criticize and try and make the people of British Columbia believe that things aren't so good in British Columbia, nowhere else in any jurisdiction in North America, or in area that I've travelled in in the world — and it's been extensive travel — is there more opportunity for the people than exists in our great province of British Columbia. I defy the socialist hordes opposite to find me a jurisdiction that enjoys more social benefits than are enjoyed by the people of British Columbia under a free enterprise government. Yet they say we're putting on onerous taxes. Did I not read an article in the newspaper the other day that said wages outstrip inflation? I know that article wouldn't have been in the paper if the socialists had still been in government, because they had runaway inflation in the three years they were government. Runaway inflation is one of the biggest problems in any socialist country. I also want to say that I think you'd be hard pressed to find any jurisdiction anywhere where there is more stability in the economy than exists in the province of British Columbia. I think, also, you'd be hard pressed to find another jurisdiction that pays better wages than we do in the province of British Columbia — all accomplished because of good fiscal management under a free enterprise government. I think you'd be hard pressed to find another jurisdiction anywhere that has a lower rate of inflation than we have here in British Columbia.

HON. MR. GARDOM: The opposition should resign.

HON. MR. PHILLIPS: No, I don't think they should resign, because at times they're a pretty good opposition. At other times they're not a very good opposition, but that's where they belong. They're better at that by far than they are in government, because we've had an example of that.

What I'm really pointing out to the House, Mr. Speaker, is that with regard to opportunity, security, stability, wages, inflation and environment, you won't find a better place anywhere in the world, my friend. than exists right here in British Columbia. It exists because of the good policies of a free-enterprise government, not because of anything the socialists created. It's been created by opportunity for investment in the private sector. Certainly we tax them, but we tax them fairly. We ensure that out of the development of our natural resources there indeed is a fair return to the people of British Columbia. Let me tell you that there is also a fair return to the workers in our natural resource and manufacturing industries and, indeed. In all areas of our business community in British Columbia.

The socialists opposite are great theorists, but name me one jurisdiction anywhere in the world that has had a socialist government or has followed a socialist philosophy and enjoys the benefits as we do in British Columbia under a free enterprise government.

HON. MR. GARDOM: Name one!

MR. LEGGATT: Saskatchewan.

HON. MR. GARDOM: You used to say "Sweden."

MR. LEGGATT: I can go on endlessly: Denmark, West Germany. Would you like another list?

HON. MR. PHILLIPS: I don't want to talk about another country and I don't want to talk about that great land across the sea. Under a socialist Labour government, Britain had the lowest return to their workers of any country in the European Economic Community. That's why Henry Ford built his plant there. The workers were paid less than they were.... You talk about subsidization, Mr. Speaker! What did the socialists do to Henry Ford when he wanted to put up a plant in England? There were massive subsidies. Oh, I want to tell you, they talk about subsidies. What was the Leader of the Opposition going to do when he was in government? What did he say about subsidies? He was going to build a railway; it was called "the way out." He was going to subsidize a railway to Alaska to haul American products through our province with no benefit to the economy of British Columbia.

Interjections.

HON. MR. PHILLIPS: Oh, you remember that, do you? I have to laugh, Mr. Speaker.

Interjection.

HON. MR. PHILLIPS: I wish I had more time, because I do have some more to say.

But there is just one thing I want to say. When those socialists opposite start talking about subsidizing a rail line or subsidizing a development, what did the then leader of the NDP say? What did the second member for Vancouver East say when he was going to build his railway to Alaska? He said: "Forget the report" — and he's talking about the royal commission report — "let's build the railroad." And Barrett pointed out the government put $357 million annually into the provincial highways system. which doesn't generate any money. He's saying: "Let's build the railway. If we have to

[ Page 4560 ]

subsidize it, fine." But now that they're in opposition, oh, how they've changed their tune.

I've just got one more word I want to say — I have lots more to say — but I want to put this firmly on the record, Mr. Speaker. What did their leader say on March 26, 1979, when he was talking about the British Columbia Railway, and building the railway into Alaska? He said: "The first agreement ever signed between British Columbia and the federal government was arrived at between the New Democratic Party when we were in power and the federal government to arrange for a subsidy and cost-sharing for building the railway right through to Alaska." It was subsidizing the railroad right through to Alaska, and here they're against northeast coal when we're going to build a spur line into a new inland empire that will be there for generations and will serve British Columbia, and not the Alaskans and not the Americans to the south. It will serve British Columbians, provide thousands and thousands of jobs and increase in value every day.

Mr. Speaker, they're against it, but when they were government they were willing to subsidize the construction of a railway to Alaska to haul American oil. What about that railway? Where was it going to start? It was going to start in Prudhoe Bay and end up in Watson Lake — start nowhere and finish nowhere.

My time is up. I want to thank you for bearing with me. Very shortly I will certainly avail myself of the opportunity to say a few more words about the economy of British Columbia.

MR. STUPICH: I'm going to say something that I think will get an immediate response from the other side of the House: there are times when I sit in this House and think I've been here far too long.

You won't remember it, Mr. Speaker, but there are some in the House who will remember that up until the end of 1975 it was the practice for ministers when they spoke in the throne speech debate and the budget debate to tell us something about what's going on in their ministries. We've just listened to a 39-minute speech from the Minister of Industry and Small Business Development. For three of those minutes he talked about northeast coal; the rest of the time he was telling us about socialism. Certainly he's well versed on that subject — his version of it. There were three minutes out of a 39-minute speech to tell us about his ministry. We've heard other ministers speak in this debate, and we heard them earlier in the throne speech debate. Very few of them had anything at all to say about what was going on in their ministries. They simply carried on the political campaign of the last election; and apparently we're getting ready for the political campaign of the next one, whenever that might come.

[Mr. Davidson in the chair.]

I rather welcomed the ministerial speeches of previous days, because it was an opportunity for the ministers to report to the House and to the public, and it was an opportunity for the members to hear something about what they were doing or why they weren't doing what they should be doing. We get very little of that now. During the course of that same 39-minute speech we were told that the minister will have something to tell us later on, if we'll simply be patient. Someday maybe he'll answer a question. Someday perhaps he'll tell us something about what he's doing, what he's trying to do or what he isn't doing. But certainly not today. He needed more time. He had only 39 minutes at his disposal, and it required 36 of those minutes to talk about socialism, which left him only three minutes to talk about his ministry. That certainly was a great contribution to the knowledge of the members in the House and of the public generally.

A couple of the ministers — one is in his seat right now; the other isn't; they are the Minister of Transportation and Highways (Hon. Mr. Fraser) and the Minister of Consumer and Corporate Affairs (Hon. Mr. Hyndman) — had something to say about a project in Nanaimo. They've invited me to respond. I'm not sure just how it fits into this amendment, but since they raised it I think I'd like to say something about it. And there's the newspaper story here: "NDP Hotel Draws More Barbs." The Minister of Transportation and Highways had quite a bit to say about it during the course of his speech. He had not very much to say about transportation and highways but quite a bit to say about a hotel being built in Nanaimo. He raised the question of why we didn't do something for low-cost and senior citizens' housing, if we really wanted to do something in the community. The Minister of Consumer and Corporate Affairs picked up the ball and ran with it for some 25 minutes. There was very little about his ministry but a lot about what we are doing in Nanaimo. They didn't tell the whole story at that. I think most people in the province are aware right now that one of the things this very same organization is doing is assisting in a very substantial way in the development of a senior citizens' housing project. They didn't bother mentioning that.

One of the things they didn't mention was that the only commercial project of any size going on in downtown Nanaimo is the office building that is currently being built by the Nanaimo Commonwealth Holding Society. One of the things they didn't mention is that were it not for the hotel proposed by the Nanaimo Commonwealth Holding Society, and the assistance it will give to the parking project, downtown Nanaimo would likely die on the vine. This is in spite of a $25 million fund for downtown redevelopment set up one year ago. At that time I predicted that none of that money would be spent in the next fiscal period. If you'll look at the budget speech, Mr. Speaker, you'll see that we've still got that $25 million sitting there in a fund doing nothing for downtown development anywhere in the province — as I predicted one year ago. In Nanaimo the lead is being taken by the Nanaimo Commonwealth Holding Society, which is made up almost entirely of NDP members but not completely so.

There is one other thing that the Minister of Transportation and Highways and the Minister of Consumer and Corporate Affairs forgot to mention. After the 1979 provincial election campaign, when the Socred candidate in Nanaimo didn't do all that well, the Social Credit Party in Nanaimo reached the conclusion that one of the reasons for our electoral success in Nanaimo was the high visibility of our property involvement in that community. So they were going to do the same thing. They went out with great fanfare and bought a building. And then what? Silence. Finally I asked one of the news media representatives in Nanaimo: whatever happened to that building that the Socreds bought? Oh, they had to let that go; they weren't able to make the payments. Well, they forgot to mention that when they were talking about what we're doing in Nanaimo. We've been doing it since 1954; we've never missed a payment and we've never lost anything. They tried it for six months; they were unable to run that kind of business in the community of Nanaimo and they had to give up.

[ Page 4561 ]

Interjection.

MR. STUPICH: I've been asked what the Socred mayor has to say about our project in Nanaimo. I think the Socred mayor of Nanaimo is trying to forget that he ever had anything to do with the Socred Party.

The Minister of Industry and Small Business Development said the NDP is against northeast coal. He said we're against everything. We have never spoken in opposition to northeast coal as such. What we are opposed to is using taxpayers' money to pay for it.

I made notes. At the beginning of his remarks he said he was going to tell us all about the northeast coal development. He said we were opposed to the two-dam policy. What he went on to say about this northeast coal not costing us a penny reminds me of what the Columbia River power deal was not going to cost us. Remember "Nothing is freer than free, my friends"? The Premier and Minister of Finance of the day said it wasn't going to cost us a nickel. The fact that we sold the downstream flood-control benefits for something like $117 million, which at that time were conservatively estimated to be worth $12 billion, didn't matter, because we were getting all these dams built and losing all this land that was being flooded — we were getting all that for nothing. The latest figures that have come out.... We put this question on the order paper every year and the answer last year was over $1 billion — we're one year behind. This project that was not going to cost us anything has cost the taxpayers of B.C. over $1 billion. That was supposed to be freer than free. Now the minister tells us that it's not going to cost us a nickel. Well, at least it has gone up a little — inflation.

Then he started telling about the things we were putting money in. But that doesn't really count because the railroad that we're going to pay for is going to be used for something else — maybe. Maybe something else will happen. Maybe somebody else will open up a coal mine. If they do, that will help pay for the line — maybe. Maybe there will be contracts for more coal. Right. But it's still maybe, isn't it?

At the present time the only known contracts for selling coal — if they are really contracts; there's still some doubt about that, I understand — will not come anywhere near paying for the $2.5 million that is mentioned in the budget as the cost for the infrastructure of this program. And we're asked to believe that the taxpayers are not going to pay anything. Sure, we're going to put money into the Ministry of Environment and they're going to do work. Sure, we're going to put money into B.C. Hydro and it's going to do work. We're going to put money into Highways and it's going to do work. We're going to put money, I suppose, into Industry and Small Business Development. We're going to borrow hundreds of millions of dollars for BCR, but none of that is going to cost the taxpayers anything. I wonder where it's going to come from.

He told us about the benefits of this northeast coal. It's going to diversify our economy. I wonder what diversification means in the mind of that minister. Currently we are shipping coal from the southeast corner of the province. It's going on the railroad and it's going to Japan. He's proposing now to start shipping it from the northeast as well. That's the same thing. We're shipping coal out of our province to another country. Is that diversification? It's certainly not what I understand by diversification. And that was the first benefit he mentioned.

Thousands upon thousands of new jobs. I agree. They're in Japan, but at least they're new jobs. That's something, but there's precious little for B.C. in that. And then this business of not one cent. He said not five cents — another time he said not one cent — of the taxpayers' money, and then started detailing all the areas to which taxpayers' money would be going.

I was interested in his reference to the announcement of the Duke Point development — when he had to drag the federal government, kicking and screaming, into Duke Point. I shouldn't be saying this because I think Duke Point is a great development in Nanaimo. We need it there, it's going ahead, and I'm personally pleased that it is going ahead. But I can recall the occasion when it just happened, by coincidence, to be right in the middle of an election campaign — as a matter of fact two election campaigns, provincial and federal at the same time. Our Minister of Industry and Small Business Development shared the platform with the federal representative, Hon. Ray Perrault, and, with their arms around each other, they told the assembled crowd what a great pair they were, how great the Liberal government was in making this contribution to Duke Point, and how great the provincial government was in making its contribution. They were both there, hoping to elect a Social Credit candidate provincially and a Liberal candidate federally. And they both failed in those attempts. Certainly at that time there was no indication that either one of them was a reluctant bride or bridegroom. They seemed to be very happy in each other's company and very pleased to be assisting each other in their respective election campaigns.

There was something in his remarks that really puzzled me. I took it down — perhaps incorrectly — I'm going to be interested in looking at the Blues tomorrow. "This government," he was talking about the one currently in office, "was the first to put money into B.C. Rail." I just don't understand what he means. Certainly the first Social Credit government sunk hundreds of millions of dollars into B.C. Rail. And one of the first things the NDP government did when it was elected was to have an investigation with experts from the CNR and the CPR to determine what sections of BCR desperately needed upgrading. We found out what a sorry state of maintenance and repair it was in and immediately took action to have it improved. There was a second investigation by experts equally as good to determine the safety and operating standards on that railroad. Again the report was acted upon.

Those were positive steps we took, although we didn't like it because it was a railroad going to open up resources. We continued the construction of the Dease Lake line — we weren't the ones who stopped it. Mr. Speaker, he said this government in office now is the first one to spend any money on the BCR. They were the ones who first stopped any construction on the BCR. No other government in the history of British Columbia has ever stopped any construction program on the BCR except the one that's in office right now. They didn't quite have the political nerve to stop the Fort Nelson line; they certainly considered it very strongly, but they were getting too close to the election. That could happen yet, I suppose.

We're told that there's no taxpayers' money going into it. Well, we know that hundreds of millions of dollars of taxpayers' money have gone into it already. We know that in the budget this year there's an amount of $70 million to pay interest and that when BCR proceeds to borrow several hundreds of millions of dollars more in connection with the

[ Page 4562 ]

northeast coal development, the interest cost for B.C. Rail will escalate. We know that the $70 million provided in the budget this year will probably be only half enough three or four years down the road. The annual subsidy to BCR which must be paid by the taxpayers will represent money going out of the pockets of B.C. taxpayers to provide jobs in Japan — thousands upon thousands of jobs, to use the minister's own words — but unfortunately not in B.C.

He said we were always against development. When we arrived in office, the first thing we had to deal with was the plan of the previous Social Credit administration to let Prince Rupert be closed down — Canadian Cellulose's operation. It would have been the end of Prince Rupert for the time being. They were letting it happen. We took steps to see that it didn't happen because we were interested in the economic development of B.C.

The next thing we had to deal with almost immediately was the Social Credit program to allow Ocean Falls to die. They've been re-elected and, of course, they've proceeded with that plan. They've killed that town. We're against development! They're the ones who have been losing these job creating possibilities.

Because there was a desperate shortage of railroad cars on the continent, we were the ones who took steps to open up a railcar manufacturing plant — that was the next thing we had to do. The government led by the present Premier threatened to close down that plant. He promised the workers that he wouldn't really do it until he'd gone up to talk to them; he forgot that promise. They closed it down. Within two months B.C. Hydro, looking for railcars, had to go down to the States to try to get some extra railcars within two months of closing down Railwest. In the event that the northeast coal development actually does start shipping coal and there is any kind of economic improvement on the North American continent, where are the railcars going to come from? We've closed down the only facility we had for making them. We couldn't get enough railcars in 1973 to keep up to the expanding economy when the NDP was in office. We had to build our own. We haven't needed them since. That's been no problem since.

In the event that we do use a couple of billion dollars of taxpayers' money, directly or indirectly, to get this northeast coal development going, where are we going to get the railcars? The whole thing will flounder because of a shortage of railcars, because this government that believed so much in economic development closed down the opportunity that we would have had to build those railcars.

AN HON. MEMBER: Then they'll blame it on somebody else.

AN HON. MEMBER: Then they'll blame it on Ottawa.

MR. STUPICH: Yes, they're very good at blaming things on somebody else. Remember they had to put through a 50 percent increase in sales tax and they blamed it on the previous three years of NDP administration. That was the second largest increase in sales tax ever implemented. The previous one was a two-thirds increase implemented by the previous Social Credit administration. But then, of course, we have had the benefit of some five years of Social Credit administration in the province. Now, once again, it is necessary to increase the sales tax by 50 percent. Because of what this government has accomplished in the last five years in office, it's necessary to put through the largest increase in terms of dollars of any tax ever imposed by any administration in the province of British Columbia: 50 percent increase in the rate to bring in an extra $400 million-plus. Mr. Speaker, that's Social Credit progress.

I've just had something referred to me from the Vancouver Sun Saturday edition. It's headed "Recovery":

"The last time the provincial sales tax was burnped up two percentage points, it was to enable the provincial economy to recover from three years of NDP government. The latest increase, presumably, is to enable it to recover from five years of Social Credit."

That's an editorial, Mr. Speaker, not a letter to the editor. The only thing wrong with the increase, from their point of view, is that it won't be nearly enough to recover from five years of this particular government.

I did want to throw in a couple of things about what's happening in my own constituency in connection with this. I was pleased, as the member for Nanaimo, to see two cabinet members in my riding attending a function on Sunday. That's great. I like all this attention, and certainly the group sponsoring the event was very happy to see two cabinet ministers there. Everything was going well; it was the opening of a new Navy League Cadet building, very welcome in the community. There was no problem. They didn't have to deal with any arguments or anything like that. Things were going along very well; everybody was very happy.

There were a couple of other instances, though, when they would have liked to have had at least one cabinet minister present. But there was a problem, so the cabinet ministers didn't appear. There was the meeting in Ladysmith on Thursday evening, when a couple of civil servants had to be there to present their report on behalf of the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) — a report that completely ignores all environmental concerns, a report that has been attacked by the Ladysmith city council and by the Cowichan Valley Regional District, all of whom have tried to get input into what they are proposing to do with Ladysmith harbour and all of whom have been ignored. That minister is determined to go ahead with his plans in spite of all the local opposition, in spite of all the concern locally about what this is doing to the Ladysmith harbour. But did the minister concerned have the courage to go to that meeting and try to explain his position? He was not able to be there. He could be in Nanaimo on Sunday, attending something else where there was no flak, but he couldn't be at the meeting in Ladysmith Thursday evening to defend what he was pushing down the throats of the Ladysmith people.

The following evening there was another meeting, this time in Nanaimo. The subject of Brannan Lake came up. I don't suppose there's a topic that has exercised the community as much as that one — not just this time, but three years previously. One of the newspapers sent out a coupon that people had to take positive steps to clip, fill in, and mail or bring into the office. In a couple of weeks they received 2,000 of these coupons back, which gives you some idea of the feeling in the community — that's a very positive response. You can get people to sign a petition if you hand it to them and say, sign here; some will sign very easily, But to actually clip a coupon, fill it in and mail it or bring it in requires some positive step. So there is real concern in the community about this. Was there a minister there to tell the people why it was being turned over to Corrections? Mr.

[ Page 4563 ]

Speaker, the minister couldn't make it. We can get two of them on Sunday, when nobody's really bothered about anything — everybody's happy — but we can't get them to come on occasions when the local people are worked up about something and would like one of the political representatives there, so that he or she might be questioned. They just aren't able to make that.

This is an interesting note in the budget. They're still blaming the NDP for the problems they're having today. They're blaming the federal government. They're blaming forestry revenue for running short of money. The 1981 budget speech on page 8 — this may have been raised previously: "While forestry revenue declined as expected...." This is one of the reasons we're having to put the sales tax up 50 percent. Unfortunately there didn't seem to be any consultation with the Minister of Forests, because we see the deputy minister's message, page 1 of the report tabled in the House very recently, the first paragraph: "Forest revenues to the province increased to $514 million, surpassing the 1979 record by $55 million." The year 1980 was $55 million higher than the previous record, and yet the budget has the nerve to tell us that forest revenues declined, as expected. How can one credit anything in the budget when we're given figures and statements like that?

When I spoke in the debate on the original motion I expressed some concern about the Canada-bashing that is so much a feature of the budget and of most of the speeches we hear from across the way. The Minister of Industry and Small Business Development (Hon. Mr. Phillips) went into that at great length today. He talked about his pay-as-you-go policies. He didn't read the last section of the budget, where it points out that this year B.C. taxpayers will be borrowing $1.5 billion. It's coming out of the other pocket, but it's still $1.5 billion being borrowed. On top of a $6 billion budget they're borrowing $1.5 billion. That's pay-as-you-go? I really don't understand it.

But apart from that the Canada-bashing, the complaining about what the government is doing about their deficits.... A report that came out in the news media recently attracted a lot of attention. The particular news story I have is dated March 5, 1981. This is the headline: "$12 Billion Means Every Person Taken for $500." Then the story goes on:

"What does $12 billion really represent? When the Consumer and Corporate Affairs department says the oil companies ripped off the Canadian public for $12 billion during a 15-year period, that means every man, woman and child in Canada would have been bilked of $500. To put it another way, $12 billion would have paid the salary of 600,000 families earning $20,000 annually."

I haven't heard every word of the debate that has taken place during the past week, but can you recall hearing one cabinet minister express any concern at all about this $12 billion ripoff? I can't. They're complaining about Ottawa not spending enough money in B.C. The Minister of Industry and Small Business Development did that in his speech just minutes ago at the same time as he was talking about them running a deficit: they should still be spending more in B.C., and they're doing such a bad job of handling the finances of the country, but not one word about this $12 billion — according to this story — bilked from the people of Canada at the rate of $500 per capita.

It's great fun knocking Canada; it's great to be against the federal government. They all do it: the budget speech is full of it. But when it comes to really protecting the interests of Canadian taxpayers.... After all, the federal government is our government. Sure, we're paving the taxes, paying the costs, getting the benefits and whatever. But most of this money is going to foreign owners of international oil companies, and there is not one word of concern from the cabinet ministers opposite about $500 being taken out of the pockets of every man, woman and child. It's much more fun to attack Canada. These people, loyal ministers of the Crown, so much enjoy attacking Canada. but they have not one ounce of concern for the people of Canada when they will accept without one voice, one note, one word, this kind of ripoff, this kind of bilking of the people of Canada.

I doubt that there is, but if there is any one member opposite with any kind of conscience left, that member will join us in voting for this subamendment.

MR. HOWARD: There are obviously no Social Credit members at this moment interested in dealing or, probably, able to deal adequately with the amendment, because they know in their heart of hearts that the amendment is right on the mark. This is onerous taxation, unnecessary taxation and politically and foully expedient taxation. If you want to identify the budget.... You know, there are a few words that come to mind, as come to everybody's mind from time to time when faced with a budget of this nature. Some adjectives describing it can be developed into an appropriate acronym, and maybe that's what I can do here. I certainly see this budget as being: (1) hypocritical; (2) ugly; (3) grabbing; and (4) harmful. You put those together into an acronym and it spells Hugh. The "Hugh" budget — it just happens to be the minister's first name, and it is quite appropriate, I think, to point out what it is.

It has been mentioned on other occasions by other speakers that it is a budget which feeds upon inflation and glories in the fact that inflation is taking place. The very fact that there are tax positions in the budget that are indexed to inflation indicates how shameful this government is. It has indexed taxes, hoping thereby that inflation will continue its rampant run. The Minister of Finance will not have to worry any longer, insofar as a few taxes are concerned, about any projections or tax increases. They can just roll along automatically. The medical-care premium is one of those; it's been there for a while. The tobacco and gasoline tax are two others that are indexed.

There is also an index in reverse. One would expect that if the government says, "Yes, we want to index taxes on the take side," then we should index them on the give side as well to give some benefit to taxpayers. We have a 10 percent surcharge at the provincial level on taxes above $3,500 to raise an expected $15.4 million. There is no indexing there to elevate that $3,500 figure or to preserve some balance or integrity to it. But the Minister of Finance knows full well, in his anticipation and hope, that inflation will continue, and as salaries increase along with inflation more and more people will be moving into that $3,500 figure and more and more people will be paying the 10 percent surcharge. The minister will rub his hands and say: "That's lovely, because the more money they make, the more we get." That's a shameful procedure.

I think, and I've said this on other occasions, that as long as this government or anybody in it persists in making a

[ Page 4564 ]

reference to the $261 million debt, I believe it was, which this government manufactured in 1976, then someone has to put forward the countering argument. So long as they continue to tell that myth, then the truth has to be put there for balance purposes if for no other reason.

[Mr. Speaker in the chair]

The Minister of Municipal Affairs (Hon. Mr. Vander Zalm) was on "Capital Comment" the other day. I wrote down his words while he was talking about debt, and he said this: "We don't create a debt for future generations."

AN HON. MEMBER: Did he really say that?

MR. HOWARD: He said that. I saw him; others saw him. I wrote it down. Maybe others wrote it down. "We don't create a debt for future generations."

Interjection.

MR. HOWARD: I wouldn't call that a fib, because somebody in the House may say that that's unparliamentary. That $261 million in 1976 — and I say it again — was manufactured by the former Minister of Finance. It was contrived. It was developed. It was false, and any continued reference to that being the legacy that this government found in financial matters when it came to office is likewise false and has to be put into some context. Do you know what's happened, Mr. Speaker, as a result of that manufactured debt, that fictitious debt? One of the things that's happened is that this government has squandered about $125 million of the taxpayers' money in interest charges to service that debt. That's the taxpayers' money — all for the purposes of keeping alive a falsehood in the first place.

The budget makes a reference to debt at the federal level, Mr. Speaker. It says that every household in British Columbia will be paying $1,500 a year to service the national federal debt in Ottawa. I suppose, if you worked that out on a per capita basis, every man, woman and child in B.C. pays $600 just to pay the interest on the national debt. I have no quarrel with those figures — I assume they're accurate — but I would like to point out a couple of other figures. Debt at the provincial level — which this government denies exists, but which in fact does exist — is going to cost every household in this province this year $570 to service the debt — $570, or $228 for every man, woman and child in B.C., just to service the debt created by this government's management or mismanagement of the finances. That's worth putting on the record. They contemplate in this coming year, Mr. Speaker, $1.5 billion in borrowings. That's going to load every man, woman and child in this province with an additional $84 to service that $1.5 billion. Why don't they talk about that in terms of debt?

This is a government which glories in the idea of debt and yet denies that it exists. It wants to see it happen and yet hides from the fact that it's there. It requires the residents of this province to pay the debt-service charges on that debt, and yet refuses to acknowledge the fact that it does exist. That's hypocrisy, Mr. Speaker.

Speaking of debt, I want to get to that decision by the Minister of Finance — and probably by his deputy as well — to attempt to borrow for the B.C. Railway $100 million in Europe in the first part of February — February 5, I believe, was the date. The rate at that time would have been about 13.5 percent, and that was the thing that the investment people who were handling this issue — although it didn't get to be an issue in fact — were looking at. In February of this year they were seeking to borrow $100 million in U.S. dollars at 13.5 percent — not taking into account the discount rate, because that would add dollars to it. What that meant was that the government of this province was prepared to drive B.C. Rail further into debt, and was also prepared to pay at least $13.5 million a year in interest charges to foreigners. They didn't even bother to try to raise the money on the Canadian market. They weren't even concerned enough to say to people in this province: "How about you putting up some of this $100 million that we'll need, so that when we pay the interest we'll at least be paying it to our own residents and to our own citizens?" No, sir, they went to Luxembourg, out of the country, The minister extended his long arm out there, through some investment dealers, on behalf of B.C. Rail and said: "I'd like to get $100 million for B.C. Rail." B.C. Rail didn't even know about this to start with, that's one thing: B.C. Rail wasn't borrowing the money; they found out about it afterwards.

Now what was the purpose of that attempt to raise $100 million from the U.S. "Eurodollar market? Was it for northeast coal? The minister has said — and I've got a couple of quotations from the newspapers around that time — and he said it in the House the other day, although he misstated it, but I understand he has since corrected Hansard: "No, the purpose of going to Europe to try to borrow $(U.S.)100 million was not for northeast coal. It was for B.C. Rail generally." Now that's important, Mr. Speaker — "for B.C. Rail generally." Remember, the minister was acting as the fiscal agent for B.C. Rail under an order-in-council passed on February 6. After the government decided to go to the market to get that money, they thought they better regularize it and appoint the minister as fiscal agent.

What's the function of a fiscal agent? The function of a fiscal agent, and the minister knows this, is implied in the word "agent." The minister acts as an agent for B.C. Rail, not as its master. B.C. Rail, in this instance, would have decided: (1) how much money they required to borrow on the money markets; (2) what they would require it for; (3) how much they were prepared to pay in interest rates from the advice that they would get; and (4) the term of the borrowing, which would have something to do with the reason for borrowing it. B.C. Rail would have decided all that and would then have gone to the minister as fiscal agent and said: "Mr. Minister, we want to borrow $100 million for purposes A, B, C, D, etc." That's what a fiscal agent is.

In this instance no such decision was made. The minister decided that B.C. Rail was going to borrow $100 million. The roles were reversed. The minister decided that he was going to have some political interference in the operation of B.C. Rail and determined for that company how they were going to get this money. He talked with Mr. Norris, the president of B.C. Rail. Do you know what he said? "I can't talk about that." I asked him myself, on the telephone. I had a number of questions about that attempt to borrow $100 million — purpose, capital expenditures and what it was for. He said: "I can't talk about that." That's all Mac Norris would say. At one point he loosened up and said that I had better talk to the Minister of Finance about that. That's who we're talking with.

[ Page 4565 ]

MR. BARRETT: Who said that?

MR. HOWARD: Mr. Mac Norris, president of B.C. Rail. He can't talk about it. Nobody made a decision in B.C. Rail. They just suddenly woke up one morning and found out that the Minister of Finance was going to drive them $100 million in debt. What does the minister want the $100 million for? It's worth asking what the minister wanted $100 million for B.C. Rail for. He wanted it for B.C. Rail so it could meet its $71 million debt service charges that it owes this year on debt that it already has. That's why he wanted it — borrowing money to pay interest on money that they've already borrowed, That's the purpose. It's also for refinancing some $(U.S.)10 million that's coming due this year on the books of B.C. Rail. You can argue validity....

MR. LEA: Is that a + b?

MR. HOWARD: That's the a + b theorem. I've often wondered what Social Credit was all about and now that I'm seeing what they're doing here with juggling the books I can see. There's the minister of little business shaking his paper. He didn't even remember that one of the board of directors of B.C. Rail resigned.

That's what they wanted the $100 million for, Mr. Speaker. They'd borrowed $100 million in order to pay the interest on the money that they'd already borrowed. That's financial irresponsibility, and it's destructive to the financial integrity of B.C. Rail in this province and injurious to B.C. Rail's future attempts to borrow money for whatever purposes it needs it. That kind of activity is even worse than that engaged in by the federal government in its creation of debt, and the minister sits there and fiddles away with his paper and so on.

Why did they go to the U.S. market in Europe? Let's ask that question. Why did they go to the U.S. market in Europe rather than the U.S. market in the United States? They're borrowing U.S. dollars. One simple reason is this, and the minister knows this: if he had gone as self-appointed fiscal agent for B.C. Rail to the United States' market in New York, he would have had to file a prospectus outlining in detail what they wanted the money for. The securities and Exchange Commission of the United States would say: "Look, man, you may be an exempt institution in Canada or in B.C., but you're not here. We want a prospectus of what you want that money for."

The minister knows that by going to Luxembourg and trying to borrow on the U.S. "Eurodollar market the requirements for disclosure there are minimal, to say the least. That's why they went to Europe: because they didn't have to tell the truth. They didn't have to disclose the purpose of borrowing the money, because the requirements of the exchange in Luxembourg are down near the bottom. Even the Liberals in Ottawa, as much as I dislike that crowd of phonies that run this federal government, would not be so — "dishonest" comes to mind as the word, but I wouldn't use it, Mr. Speaker — even they wouldn't be so devious and irresponsible in their dealings as this Minister of Finance has been in his attempt to find that money in Luxembourg. It's an unconscionable act.

MR. SPEAKER: Order, please. Hon. member, we cannot attribute to another member of this House any word or description that would question the minister's integrity or his honesty. I find that the word "devious" is clearly unparliamentary. Would the hon. member please....

MR. HOWARD: With great respect to the Chair, Mr. Speaker, you need go no further. I will not use that word "devious." If I did use it, I withdraw it. "Unconscionable" is more fitting, in any event.

That's why they went to the U.S. dollar market in Europe. They wouldn't have to tell anybody what they were doing over there; they just want to borrow the money. Let's deal with that attempt a little bit further. They went to the U.S. market. They could have done that in the United States as well. They went to borrow U.S. dollars so that they could, because of a particular provision in the Railway Finance Act, increase the debt of B.C. Rail above the statutory limit of $900 million. They can do that. I don't know what B.C. Rail owes at the moment. Its net debt position is $730 million, or something of that sort. The statutory limit of $900 million.... They borrow $100 million on top of that; it's up to $824 million. They're approaching the limitation mark. But if they borrow in U.S. dollars, then they can go above the mark. That's just a side reason for going to Luxembourg.

Another question comes to mind, with respect to this fiasco attempt to borrow this money. Who handled it? Who was the investment firm in Canada that the minister dealt with? Was it the traditional consortium or syndicate of investment dealers that handled B.C. government-backed bonds, or was it somebody else? People in the investment community tell me it was Wood Gundy on the Canadian side that was the lead manager in trying to put together that package of $100 million.

Let's have a review of what the Eurodollar market is all about over the past little while, to see whether or not they could get the $100 million, The other day the minister talked about these windows that are there, that are open from time to time. You reach in the window, you get your money and you give them a note saying you'll pay it back again. Then the window slams shut before the next guy in line gets a chance. The reason for that is that there aren't too many U.S. dollars floating around in Europe. available to be borrowed, as compared with the amount of U.S. dollars on the U.S. market. So there are small amounts of money available. In the U.S. Eurodollar market from January 1980 until just a few days ago the maximum amount of money available for borrowing and borrowed on any given day was $150 million — the limit.

There's a committee meeting over there, Mr. Speaker. They're discussing whether they should vote for this amendment or not. Let them continue.

Numbers of days go by when there's no money at all. When there's no market there's no borrowing. Week after week sometimes go by. So remember, first, if it was Wood Gundy or whoever it was, that they should have known that the maximum amount of money they could get in Europe anyhow was $150 million in any one day, and B.C. Rail wanted $100 million. That's one point to remember. Secondly, for borrowings on the U.S. Eurodollar market in the last year the maximum term has been 12 years. Most of them are shorter term — five-year, seven-year and ten-year borrowings. That's just the complexion of that market. The investment dealers that you dealt with should have known that as well. First, they anticipated borrowing more than they knew would be available, given a couple of other factors that I'm going to tell you about in a minute. Second, they wanted

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to borrow it for a period of time longer than had been the case in the last year or so on that same market. They were almost out of the ballpark before they started.

On the day in question.... This brings us to Wood Gundy, the investment community. I say again, friends and companies in those businesses tell me that Wood Gundy was the key investment dealer in Canada seeking to put together this package to get that $100 million. On February 5 Wood Gundy, the same company representing the same outfit, was the lead manager — meaning they handled the show — for a $50 million U.S. borrowing for Eldorado Nuclear Ltd. That's on the same day that they were talking about $100 million for B.C. Rail. Wood Gundy was successful in getting $50 million at 13 1/4 percent. Those notes are due in 1986 — five-year borrowing. On the same day Ontario Hydro borrowed $100 million at 13 1/2 percent, U.S. bearer bonds. Whose name do I see right down here? Wood Gundy Ltd. If Wood Gundy was the company doing this — that's what I was told; if I'm wrong I'll retract it — Wood Gundy was involved in two borrowings that self-same day, the net result of which was borrowing $150 million on the same market on which they were also seeking to borrow $100 million for B.C. Rail. They knew they couldn't get it.

Either Wood Gundy took the Minister of Finance along the garden path and led him to believe they might get it and then dumped it or Wood Gundy didn't know what it was doing in the first place. I don't know which, but I do know that here's a news clipping that the Minister of Finance certainly needs to explain and expand upon. This is February 14, 1981, in the Sun. The article says that in response to questions, I suppose, about this matter, "Finance Minister Hugh Curtis, Friday, accused investment dealers of 'a disturbing absence of professionalism.' "

Interjection.

MR. HOWARD: I don't know. I only know what the article says — that he accused investment dealers of "a disturbing absence of professionalism." That reference that he made, related to what the article says, was spreading a rumour — spreading a rumour that B.C. Rail would borrow $100 million to finance northeast coal development. We will take the minister at his word — it's in the newspaper and he said it near his house — that they didn't want the $100 million for northeast coal. Was that the rumour? Was that the absence of professionalism? I talked with three separate divisions of investment dealers in Canada. Each one of them told me that they knew the $100 million attempt was not for northeast coal. Each one of them singly, individually and voluntarily said: "Oh, no, we understood that was for general purposes of B.C. Rail and did not relate to northeast coal." Who's spreading the rumours? I don't know. The minister himself has said it was not for that. But what he has said is that there's a disturbing absence of professionalism, and he has thereby smeared the whole investment community — everybody except him. Either whoever handled that issue made a fool of the minister or the minister was a fool in the first place to attempt to see if he could borrow money on a market where it wasn't available.

The news clipping also says in the minister's own words: "Any decision in this matter will be made by the underwriters." Now, a question has to be asked. Did the investment dealers, or the investment dealer — and if it was Wood Gundy, that would be worth knowing — underwrite this issue; and if so, why doesn't B.C. Rail now have the $100 million?

There are two ways of getting money in the bond market. One is through an investment dealer that underwrites, and says: "I guarantee you'll get your money." The other is on a best-efforts basis, which says: "Well, we won't guarantee you'll get your money, but we'll try to flog the bonds through the system. We'll try to raise it for you." But if underwriting is a guarantee, any reputable investment dealer is bound to stand up to that. There is a reference by the minister to underwriting. That's worth knowing.

That activity in February of this year has injured B.C. Rail's chances of borrowing money at the going rate. Oh, they can borrow money, but they're going to have to pay through the nose for it, which means the taxpayers of B.C. are going to have to pay through the nose whether that money is for paying interest on debt already created or for northeast coal. The investment community knows what happened with this fiasco, and they've been in the business for a long period of time. They know very well that entering the market to try to borrow, say, $100 million, you can easily move within a range of a quarter or half a point. And I say today that that fiasco, that abortive attempt, which one investment dealer told me it was — he put it in stronger words — cost the taxpayers of this province an untold amount of money in interest charges a bit above the market, whenever we go to market to get that money. It was all to satisfy the feeling in the investment community that this minister, through his attempts to borrow that money, tried to make fools of the investment community, tried to pull a sandy on them, tried to do an end run around the investment community and tried to mislead them into thinking one thing that was not the case. That's regrettable.

MR. BARRETT: Evan, you look good for once.

MR. HOWARD: Yes, the former minister would not have tried anything so unconscionable as that.

That activity alone, that attempt alone, that one move in the first part of February this year — all in secret, all behind the scenes, all done to try to circumvent the normal relationship between government and consortiums and syndicates in the investment business, for what purpose no one really knows except the minister — that activity alone, without any reference to anything else, in my view, represents a sacrifice of dignity, honour and responsibility, and an abandonment of moral purpose for the trivia of being able to gloat over being able to put one over on the general public.

MR. SPEAKER: Order, please. I must pause to ask the hon. member if he's casting aspersions upon the character of another member of this House.

MR. HOWARD: I am not casting aspersions on the character of another member of this House; I'm talking about the character of this government. That activity, that abandonment of moral purpose, is a true measure of this government's total and absolute loss of whatever integrity, moral worth and common cause it ever did have, and good enough reason to have a vote on this thing right away, because obviously nobody else is going to say anything.

MR. SPEAKER: Hon. members, the question is that the motion that Mr. Speaker do now leave the chair for the House

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to go into Committee of Supply be amended by adding the following: "But this House regrets that the Minister of Finance has introduced onerous, unnecessary and expedient tax increases."

Amendment negatived on the following division:

YEAS — 23

NAYS — 29

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

On the motion.

HON. MR. WATERLAND: I'm very pleased to take my place in this budget debate and support the very responsible budget brought down by our Minister of Finance.

Not only does this budget provide the government with the ability to continue to expand those social services which all the people of British Columbia need and deserve, but it also provides the government with the ability to make investments so that the future of our province and citizens can be secured.

We have just finished debating a rather frivolous amendment. I guess we debated the amendment but, quite frankly, I never heard any members in the opposition speak to the amendment when they were supposedly debating it.

A great deal has been said since we started this budget debate on the northeast coal, and I would like to add a few comments to what has been said. This northeast coal is a part of our government's investment in the future. It's a part of the investment that will give us the ability to ensure that these many social services which we enjoy today will be available to us in the future, because as our population expands, the cost of providing these services will increase. If we make these investments today we need not increase the levels of taxation in the future as our economic and taxation base expands.

There's been much said about the tremendous investment that the government of British Columbia will be making to help the coal companies export coal to Japan. Let's look at the investments. I think the Minister of Industry and Small Business Development (Hon. Mr. Phillips) gave you some numbers. The actual direct investment by the government in northeast coal is minimal. What we're doing is investing in services for people who will be living, working and producing in the northeast. The government, through its normal programs, will help to establish a community at Tumbler Ridge, a community where thousands of British Columbians will eventually be able to live, work and enjoy life in B.C. I think that is a very proper investment for the government of British Columbia to make.

We will be investing in schools and hospitals. We'll be investing in recreational facilities. We'll be assisting that community in the development of water supply and sewage facilities. We'll be helping to provide power for the community of Tumbler Ridge and for the tremendous coal industry that's about to be born in that part of the province. I'm not ashamed at all; I'm encouraging and supporting our government's investment in the future of this province and in the people who will be fortunate enough to have jobs and opportunities, not only in the immediate area of the coal-mines but also in the rest of the province as well. We have a community at Chetwynd which will benefit tremendously by our investment in a new community at Tumbler Ridge.

We will see a new coalport developed which won't be just a coalport. It will have the ability to service many products from all over this great country of ours, which will be exported from the west coast of Canada. I'm sure it's very surprising to most people in the world when they consider that a country the size of Canada, with exports shipped to the Pacific Rim, has but one major west-coast seaport. By having only one port, I think the entire economy of western Canada is put in jeopardy. If there is a major disruption in rail traffic through the Fraser Canyon, the entire western half of our nation suffers from an inability to get its produce to the marketplace. I think that an investment in the northeast, which will result in tremendous investment in Prince Rupert to develop a second major port for Canada, is essential not only to our province but to all of western Canada as well. I think that we as a government should make no apologies, but should be very proud to have caused this type of investment to take place. which will secure our future and that of the rest of western Canada as well. It's absolutely essential that we have another port.

The other day I was in a discussion with some of my ministry staff. We were talking about our ministry's involvement in the northeast sector and the new developments to take place there. As we looked at the maps showing rail lines. powerline rights-of-way, highways, and where the community and the mines will be, I could just imagine all of this mass of equipment and personnel and expertise that is being mobilized now to move into that 10,000-square-mile part of British Columbia to tap those vast riches that are there and have not yet been touched. If you look at the riches of that part of British Columbia, I don't think, really, that you can find a 10,000-square-mile area anywhere in the world that has as much wealth per square mile as that northeast part of British Columbia has. Of course. the coal resource is the obvious one and the one that is receiving the attention now, but the coal is but a part of the resource, and the coal that will be mined in the two mines on the two initial contracts is but a very small part of the entire coal-producing potential of that part of British Columbia. There is a potential for perhaps a dozen mines in that part of our province — mines that will help us to develop our economy. Coal-mines are but one of the

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resources there. Oil and natural gas are other reasonably obvious resources. By accessing that part of the province, by making it a place where people can live and work and explore, I'm sure that our oil and gas reserves will be added to very measurably.

We've talked about coal, but the geology of that part of British Columbia also lends itself to other mineral occurrences as well. As our Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) said the other day: "You don't have mines in the future unless you look for them today." If that part of the province is accessed it and made a livable area for people, the chance of finding other mineral deposits and other mineral wealth will increase as well.

And, of course, we have the forest resource — 10,000 square miles of forest that can be accessed. Much of it is outside of our allowable cut right now because there is no access to it, but putting in this infrastructure and the access will make our forest resource in that area another resource that's available to help create jobs and opportunities and wealth for British Columbia.

I think it's rather amazing that an area this size in North America, with the wealth that it holds, has not been developed up until this time. It's not the last frontier in British Columbia though; there are other areas which, if governments in the future will have some imagination, can also be developed. I was thinking that if that part of British Columbia were a European country, it would be a small country in area, but it would probably be one of the wealthiest countries in Europe.

I've developed a few numbers showing the areas of some of our European countries, the populations they support, and the gross national products of the countries. Then I tried to relate that to the 10,000-square-mile area in the northeast of British Columbia. For example, Denmark is a rather small country of about 17,000 square miles. It has a population of over five million people and it has a gross national product of about $56 billion. If you related that type of use of their 17,000 square miles to the 10,000 square miles of the northeast coal development area, you would support a population of three million people there, and you would have a gross product of $32 billion a year, just based upon a straight arithmetic comparison of the areas and the wealth of Denmark. Of course, the wealth per square mile in the northeast of British Columbia is much, much greater than that of Denmark or any other European country. If this tremendous resource area were located anywhere else in the world, the government in that other area would be pulling no stops in order to develop it, to increase the chance of their people making a living and being prosperous. They would use it.

Yet our negative socialists across the House say that we don't have any iron-clad guarantees that we're going to be able to repay the cost of building hospitals or schools or recreational facilities for the people. They say these first two contracts that we've developed are not going to pay for the cost of building a railway. Of course they're not. It's just a means of accessing a vast treasure-house of resources that will benefit the people of British Columbia, not only in that area but in all of British Columbia and in all of Canada. Just imagine the mobilization of the thousands of people and the millions of dollars of equipment that are going to go into developing that resource, and all the people that manufacture and service that equipment throughout the country, and our trading partners in the world, more particularly in British Columbia. I think that we would be ashamed if we were not working to develop that type of a resource. I'm glad that at least this government has enough faith in the future of British Columbia and enough confidence in the people of British Columbia to be able to see a way of making that resource work for us.

Several members opposite have said: "Well, if you develop the northeast, then you're not going to have any opportunity for further coal development in the southeast." Perhaps they are not aware that right now there are mines under construction and in the advanced planning stages in the southeast which will increase the production of coal from that part of British Columbia by four million to five million tonnes a year — about a 50 percent increase over and above what it's producing now. The people in the southeast are saying: "Hey, hold up a bit. You're forcing too much economic development into this part of the province. Our infrastructure cannot accept any more than that. Our roads, outdoor recreational facilities, wildlife and environment will be too heavily impacted if you push too much more development in that part of the province."

I believe it was Premier who said: "Let's diversify; let's develop other areas where there won't be that tremendous people impact on the environment." There are many opportunities in the northeast for outdoor recreational experiences in a brand new area and for developing new resources. But the people in the southeast are saying: "Hey, hold up. Why don't you slow down a bit? You're going too fast. You're trying to develop our resources. You're putting too much pressure on our part of the province. Let's diversify." That's what we're trying to do. That's what's happening.

They say that the southeast was developed without any subsidies by government. Well, if building highways into the southeast is any different than building highways into the northeast, I would agree with them. If building hospitals, schools and recreational facilities in the southeast is any different than doing it in the northeast, I guess I would agree with them — or any of these things that government do.

The capability of the rail transportation system into the southeast will be stretched to its maximum when the current planned expansion comes onstream. So if they were to expand any further, additional rail expenditures would be required as well.

The socialists, in their true style, are saying, "No, stop, don't do anything," and being absolutely and completely negative. That is the normal, negative, socialist approach: "Don't do anything. Don't press for the development of our province. Don't provide any opportunities and jobs for the people of British Columbia." They say to us: "What are you doing to create jobs in B.C. ?" Well, this is what we're doing: we're developing our resources and we're providing some opportunities for the people of B.C. We're pretty proud of being able to do that, and we're proud of the fact that we have managed our finances over the last few years in such a way that this will happen.

Hon. Mr. Waterland moved adjournment of the debate.

Motion approved.

Hon. Mr. Wolfe presented the sixty-second annual report of the Public Service Commission for the 1980 calendar year.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:51 p.m.