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CONTENTS

Routine Proceedings

Miscellaneous Statutes Amendment Act, No. I (Bill 24). Hon. Mr. Williams.

Introduction and first reading –– 5729

Committee of Supply: Ministry of Transportation and Highways estimates. (Hon. Mr.

Fraser)

On vote 189: minister's office –– 5729

Mr. Lockstead

Mr. Passarell

Social Service tax Amendment Act, 1981 (Bill 12). Second reading.

Mr. Stupich –– 5734

Mr. Cocke –– 5735

Mr. Hall _ –– 5737

Hon. Mr. Curtis –– 5738

Division on second reading –– 5739

Finance Statutes Amendment Act, 1981 (Bill 13). Committee stage. (Hon. Mr. Curtis)

On section 33 –– 5739

Mr. Howard

Reading and Receiving Petitions

Establishing the Windy Bay--Dodge Point ecological reserve.

Clerk-Assistant –– 5742

The House met at 10 a.m.

Prayers.

HON. MR. FRASER: Mr. Speaker, I would like to advise the Legislature that yesterday, during the discussion of my estimates in committee, unknowingly I used a phrase that I find completely unsuitable. I wish to assure everyone — and I believe all members well know — that it was certainly not my intention to be offensive or disrespectful to anyone. Nevertheless, it was most unfortunate that the phrase was used. I wish to apologize most sincerely and unconditionally for it.

MR. SPEAKER: Hon. members, the Chair has no knowledge. Apparently what the minister is speaking of must have happened in committee. Perhaps the best place to have made the correction would have been in committee. With leave of the House, I'm sure it's acceptable here.

MR. BARNES: Mr. Speaker, I want to make a point of personal privilege.

MR. SPEAKER: I don't know if that exists, but please proceed.

MR. BARNES: Whatever the procedure would be, I would like to make some comments in reference to the same remarks that were made by the Minister of Transportation and Highways, if that's permitted.

MR. SPEAKER: We'll accept the minister's statement as a statement and then we will allow a response.

MR. BARNES: First of all, I would like to accept the minister's apology on behalf of the members on this side of the House. Obviously the minister is a person held in high regard by all members in the House. He has had a long, successful career in public service. I can appreciate the sincerity with which he made those remarks regarding a comment he made yesterday in Committee of Supply. However, he did not state what those remarks were. For the edification of those who are here today and the people in the gallery — in order to put things into perspective — I would like to refer to those remarks that were used. I would further like to make some comments with respect to how these things can happen inadvertently. This is why all of us have to be constantly on guard with respect to ensuring that we are not taking leave of our responsibilities when we are in public service and carrying on our duties in official capacities.

The specific remark that the minister was referring to has to do with his estimates yesterday in debating the returns to this province from gas tax revenues and use of the highways and the problems that the province is having with Ottawa in terms of a fair return for taxes that had been collected from the use of the roads in this province. The minister referred to Ottawa as having questionable principles in this matter, indicating that he does appreciate the importance of principles. He went on to say, Mr. Speaker, that the "nigger in the woodpile is Ottawa," which I'm sure he meant as an expression of condemnation of their attitude with respect to British Columbia. In that respect he was indicating that Ottawa has become the nigger and the troublemaker. In other words, the people of Canada, who are Ottawa, are in disrespect in the eyes of that minister.

Although he did say that inadvertently, there can be little question in my mind that subconsciously it is an attitude that even that minister has been unsuccessful in avoiding. This is why, Mr. Speaker, we on this side of the House have attempted time and time again to raise questions of human rights, human dignity and justice to ensure that our Human Rights Code is effective in dealing with problems of discrimination and racist attitudes and to ensure that our educational system reflects our desire to ensure that people are not going to unconsciously make expressions that they would not make had they thought about it. That should be part of the educational system.

As well, Mr. Speaker, we have even attempted to get the Attorney-General (Hon. Mr. Williams) to exercise his authority under the Criminal Code of Canada with respect to a racist organization called the Ku Klux Klan in this province. Again we've been denied opportunity to express, on behalf of the people of British Columbia, the indignation they have experienced as a result of the indifference on the part of that government in dealing with these matters.

The question is one that cannot be taken lightly, notwithstanding the fact that the minister apologized to this House — and I accept his apology. But I think that the Legislature is the final place of authority in this province and the ultimate place to which people took for redress and support of principles that we all live by and the traditions that we cherish and regard as inalienable as far as individuals are concerned. To have the minister, even inadvertently, have such a slip indicates to me that we have gone too far in expressing our personal views and are being too comfortable and cosy in this chamber at a time of a crisis in housing and people being displaced because of indifference on the part of government fiscal policies and different programs that are coming down without reference to the public. I suggest we could all do with a little refresher course on what the concept of parliamentary democracy is all about and what duties those officials who are in a position of authority have to be familiar with and understand.

This is not a condemnation of the minister, it's really a condemnation of all of us. I'm sure that we have allowed ourselves to relax too much and not get on with the serious responsibilities we have. Sometimes it takes an unfortunate situation such as happened yesterday to bring us to our senses. I do not believe this is an isolated incident. I think it occurs all the time, and to have had it happen in this Legislature absolutely and undeniably exemplifies my point. If it happens here, where people live or die on their political faux pas, and where individuals survive by their successes with respect to the electorate, then I think that clearly illustrates that we have begun to lose our senses, and we're showing a great deal of disrespect for this chamber. I don't believe that it can be left unaddressed. I personally would like to have the government indicate that its rhetorical comments are more than that, and that it is prepared to take the initiatives that it should take with respect to showing the public that it really is not inclined toward racism or supporting racism, and to take affirmative action particularly to undermine any initiatives that are happening on the part of any groups that would deny any Canadian or British Columbian their rights on the law.

Perhaps the minister should sponsor some of these initiatives himself. We've been trying to get a human rights report

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that was done by the Minister of Labour (Hon. Mr. Heinrich) and submitted by Mr. John McAlpine. Why hasn't that been tabled? That's an example, Mr. Speaker.

MR. SPEAKER: Order, please, hon. member. In a reply to a statement it is not proper to enter into a debate. Therefore I would like to have the hon. member keep his remarks within the bounds of the statement made by the minister.

MR. BARNES: Thank you, Mr. Speaker. I appreciate your advice. I would suggest to you that everything that I'm saying is directly relevant to what the minister said yesterday, notwithstanding the fact that he did apologize. What I'm suggesting to the minister is that if he is sincere about what he said.... He said that he is apologizing, and he wants the chamber to believe that he means what he said. I would suggest that he implore his colleague the Minister of Labour to table the document that was commissioned to Mr. John McAlpine with respect to the effectiveness of the Human Rights Code against racism in this province.

MR. SPEAKER: Order, please.

MR. BARNES: To me that is not out of order. It certainly cannot be out of order.

MR. SPEAKER: The hon. member may feel that his remarks would be in order, and they certainly would be in the proper order of business in the House, but not at this particular time. I trust the hon. member would soon reach the conclusion of his remarks.

MR. BARNES: Thank you, Mr. Speaker. I would just like to advise the Speaker that it is rather unusual, sir, that a Minister of Transportation and Highways would be referring to Ottawa as "a nigger in the woodpile" when he's talking about highways. If that is in order, I can see no way in which I can be out of order, no matter what I say with respect to that issue.

MR. SPEAKER: Order, please.

MR. BARNES: So I'm saying that it has happened. I did not create the situation. The minister has apologized, but that does not mean that he has the right to stymie anyone who wishes to make a comment with respect to what he said. I think that it is appropriate. I don't believe that any member in this House should desire to have this matter cut short. In fact, I would hope that other members would stand up and express their views with regard to this matter. It is probably one of the most important things that's happening today, sir, in this chamber.

MR. SPEAKER: It would not be in order at this time, hon. member.

MR. BARNES: I would implore the Minister of Highways to contact the Minister of Labour and ask him to table that document...

MR. SPEAKER: Order, please.

MR. BARNES: ...that was used to cut off...

MR. SPEAKER: Order, please. I must now ask the member....

MR. BARNES: ...protest by the people of British Columbia against racist activity.

MR. SPEAKER: Order, please.

MR. BARNES: This is is what it's all about. I am offended by what that minister said, and I think that other people in this province are — black, white and all other colours. I don't believe, sir, that I should be ruled out of order on the question of asking him to put up or shut up.

MR. SPEAKER: Order, please.

MR. BARNES: I'm not just interested in his remarks. I would like to know what action he intends to take.

MR. SPEAKER: Order, please, hon. member. I think that the hon. member knows full well the rules of the House, and that there would be a vehicle by which the debate on which the member is now entering could be in order. However — if I could speak to the member without being interrupted — the member knows full well that in response to a statement it is not in order to embark upon a full-fledged debate upon any subject, merely to respond to the statement. I think that all members are aware that the debate upon which the second member for Vancouver Centre has embarked has now gone far beyond the bounds of the statement which the minister himself made. I trust that the hon. member would soon conclude his remarks.

MR. BARNES: Mr. Speaker, I shall do that. I appreciate your advice. I would simply ask how one determines the scope and consequences of the remarks which were made yesterday by the minister. It's affected me in a number of ways, and I'm sure there are other people who are affected. I would just like to use the opportunity to explain to the House that it doesn't necessarily mean that one has to condemn another person for such remarks. It simply reveals the fact that the remarks exist. Whether they are subconscious or whatever, they did happen and they do have a negative effect upon other people who are the recipients of the remarks.

Saying "I'm sorry" when you've run over someone with a bulldozer is little consolation. Those remarks go down in the permanent records of this parliament and they will be circulated all over the province, perhaps all over the world. They're there for people to read for ever and a day. I think it should be clear that this House does not condone such remarks. Not only do we not condone them, but we're going to go a step further and indicate that we're prepared to ensure they are not made again, inadvertently or otherwise, by members of this House. We will seek to raise the level of consciousness and responsibility on the part of public officials, and do something about the school system — do something about spending money to enlighten people about their responsibilities as citizens of the province.

That's what I'm suggesting that side of the House do instead of holding gala events, as they will be doing next week with B.C. Place and the stadium, while there's no housing for the people....

[Mr. Speaker rose.]

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MR. SPEAKER: Order, please, hon. member. I have reminded the hon. member on at least two occasions that his remarks have now gone beyond the bounds of orderly response to the statement made. I would ask now that the hon. member soon conclude his remarks or else we will have to ask him to resume his seat.

[Mr. Speaker resumed his seat.]

MR. BARNES: Mr. Speaker, I am concluding my remarks by simply asking the minister if, when he takes his place in the debate which will follow, he will indicate to the House his intentions with respect to my suggestions concerning the Human Rights Code and his colleague the Minister of Labour, and the Attorney-General and the Criminal Code of Canada, with respect to prosecuting hate-mongers, We'll leave it at that, Mr. Speaker, and see what the minister and his colleagues do from here on in.

HON. MR. GARDOM: Mr. Speaker, I would like to refer this assembly to a gentleman with whom I've had the honour and privilege of close association since 1966, a gentleman who has served and continues to excellently serve the people of this province, and a gentleman whose horoscope today says he is versatile and that members of the opposite sex find him challenging and attractive. I ask all hon. members to join with me in wishing our colleague and good friend the Attorney-General (Hon. Mr. Williams) a very happy birthday.

MR. SPEAKER: I would remind hon. members that in making introductions they should refrain from making statements which could be seen to be argumentative.

MR. GABELMANN: Mr. Speaker, I'd like the House to join with me in welcoming a group of students here today from Zeballos.

HON. MR. ROGERS: Mr. Speaker, I'd like the House to join me in welcoming Craig and Michael Duggan, two students from North Vancouver who are visiting the Legislature for the first time. They are accompanied by their mother, who is also my executive assistant.

Introduction of Bills

MISCELLANEOUS STATUTES
AMENDMENT ACT, NO. I

Hon. Mr. Williams presented a message from His Honour the Lieutenant-Governor: a bill intituled Miscellaneous Statutes Amendment Act, 1981.

Bill 24 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

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

ESTIMATES: MINISTRY OF
TRANSPORTATION AND HIGHWAYS

(continued)

On vote 189: minister's office, $213,962.

MR. LOCKSTEAD: I have one or two very short questions for the minister this morning. Mr. Minister, I hope you can answer one question for me right off the top regarding your announced intention to increase ferry fares throughout the system in the B, C. Ferry Corporation and on some Highways-operated ferries as well. Before you answer that question, I do want to remind you that on the coast of this province those ferries are our highway links. We had people living in the metropolitan areas and people who don't have to utilize the system standing in this Legislature yesterday talking about user-pay, saying that we shouldn't subsidize and on and on. On much of the coast of British Columbia we have no choice. We need that transportation system. As much as it needs modernizing, upgrading and all these things, the fact is that we totally rely on that system. I just wanted that on record.

You might look at it another way, Mr. Chairman. What we could be saying is that if we're going to have tolls on our highways on the coast of British Columbia, then why not have tolls into Prince George, Kamloops or Kelowna? Of course, we couldn't do that, could we? I'm suggesting to you that these vessels are our highways. I wonder if the minister would be good enough to tell this committee right now when and by how much he intends to increase those fares.

HON. MR. FRASER: The member for Mackenzie has asked about ferry fares. I think what you really requested was the policy of increases if and when required. I'd just like to say that yes, there is a new policy which was announced last year. Following what happened, we had two increases last year. Following the second increase it was announced that we would only increase annually from then on, and only if required, of course. That is the policy of the B.C. Ferry Corporation and it will be carried out in relation to its 1981-82 operations.

I'm not so sure that a fare increase is required. I emphasize that. The way it looks now, it certainly will be required for fuel costs alone, which have just skyrocketed. They do burn a lot of fuel. It will not be increased until after the busy season that we're just entering. I don't want to get specific, but I would suggest that if and when it is required, the amount would be decided on before October 1 in each year. It wouldn't confuse the travelling public of British Columbia or affect them at the high-volume time. It appears to me that we will unfortunately have an increase again this year because of fuel prices alone. It has nothing to do with any other operational costs. I don't like to be pessimistic, but I think we have to live with that for some time to come. I'm referring to Canada trying to get up to world oil prices and relieve the federal treasury, so the consumer pays and not just the treasury of Ottawa. It appears that we are maybe about halfway on the road to that. We're looking at doubling the existing fuel costs that we all use, wherever we use them — whether in an automobile, a ferry or whatever type of transportation — for the next two to three years in moving up closer to world oil prices.

As far as the government is concerned, Mr. Chairman, this year in the estimate books we're budgeting for $63 million for a subsidy for B.C. Ferries from general revenue of the province. This is after all fares have been collected. As a member of government I feel that they're fairly generous in this. The amount of the subsidy advances every year. It is based on the principle that the cost of maintaining or building a mile of highway is incorporated per mile into the subsidy; it

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is also based on the mileage that the ferries travel. We don't have an ad hoc situation; we have a fairly definite principle and policy to follow. As an example, if we add mileage to the routes that B.C. Ferries run, which we have been doing, this automatically triggers the subsidy to go up. Alternately, if we reduce routes — we haven't done too many — it would automatically trigger in that way and reduce the subsidy. In turn, it would reduce the operating costs if they were to cut back on routes.

While I'm on the subject, there's one that may be in the offing. The board of directors have made no decisions, but as you know in the summer months our base is Bella Bella–Prince Rupert. In the winter months the vessel runs from Tsawwassen to Port Hardy and from Bella Bella to Prince Rupert. We're looking at whether it is really necessary to run from Tsawwassen in the winter months. We're looking at the other option of having it based year-round at Port Hardy. There are pros and cons on that. If we decided to run it year-round from Port Hardy and not in the winter months from Tsawwassen, there would be an example, as I see it, of a reduction in subsidy of whatever the mileage is from Tsawwassen to Port Hardy. I might say that we're having a lot of observations made to us, particularly by the people in North Island, to have exactly this happen. In other words, they want the economy that the ferry system brings to that community of Port Hardy on a 12-month basis instead of the four to five months during the summer. So I say, no decisions have been made.

The other observation I have is that I really think that when the run from Tsawwassen north was instituted it was done for the purpose of drawing from a larger customer area. It appears now, with the change of times, that this mightn't be necessary, and that they would get all the business they could handle 12 months a year running out of Port Hardy. We're looking at those options now.

Regarding B.C. Highways ferries, those policies will be reviewed in the same manner as B.C. Ferries, and I think the same conditions exist, based mostly on the spiralling cost of fuel.

MR. PASSARELL: Mr. Chairman, at the beginning of my presentation I'd first like to praise the minister — I know it's been a difficult morning for him — for the television reception in Good Hope Lake. After our discussions in 1979 the minister took my suggestion, and he has benefited a number people up north by installing the television reception units in Good Hope Lake, Dease Lake, Meziadan, Bob Quinn and a number of other Highways camps in the north, and it's been a tremendous benefit to the Highways employees. But one of the problems is that there are a number of residents who live within a small distance of the camps and are being denied television reception from the units put in place by the Ministry of Transportation and Highways. A suggestion — and I know the minister and I have held discussions on this matter — is to see if some improvement could be made to the present television reception, particularly in Good Hope Lake so that the the residents who are living directly across Good Hope Lake, within 100 feet of the Highways maintenance camp, could pick up television. We have the technology right now. I know the minister is in a difficult situation because of federal licensing involved with television reception, but it would be a tremendous improvement for the children who live across from the camp. as well as the miners who live down Highway 37, if they could pick up television from the Good Hope Lake repeater earth satellite station that the ministry has put in. It would cost a few thousand dollars, but it would be well worth it for the public relations of this government and a definite improvement to the lifestyles of the individuals who live around the area.

The second issue I'd like to discuss is the government aircraft that the minister is responsible for. In the last tabling we noticed over 1,300 flights were allowed by the government last year. Some ministers have used this government aircraft as a commuter service. I've seen a change in the position of the government — and a position I agree with — concerning spouses going on the flights. I totally agree with this; I think it's a good idea, and maybe it would help improve the level of debate in this Legislature if we had our wives travelling with us more often. It's a good movement, a new change of position, and I hope the minister would encourage more cabinet ministers to travel with their spouses.

Secondly, on the same issue, because it is a government aircraft, there is no reason opposition members should be denied travelling in it also at times. I think the present policy is that a cabinet minister has to invite a member from the opposition to fly in the aircraft. Is that the position, Mr. Minister?

Interjection.

MR. PASSARELL: He has to be invited. The case I'm making is that when the government aircraft goes into my riding, for instance, there seems to be no reason why we can't save the taxpayers a few dollars, if the government aircraft is going into it, instead of incurring the higher cost of a commercial flight and the longer time that it takes. There could be a little bit of cooperation in this House if we knew a little bit about where the government aircraft was going — just in discussion in the hallway or something. If the minister is going into a particular riding of an opposition member, it might be worthwhile to take that member in.

A third point on the government aircraft is that presently the system works with the air-ambulance service being under involved. My concern and, I think, the concern of a lot of individuals across this province is that if a cabinet minister is flying on the government aircraft, you could — I underline the word "could" — run the risk of having that cabinet minister flying in one part of the province when the air ambulance is needed in another part of the province. Hopefully it will never arise that an individual who needs air ambulance service would have to wait an additional hour or two while a cabinet minister was flying somewhere. I don't know what suggestions could be made. Maybe we could have one government aircraft for government travel by cabinet ministers or whatever and another aircraft particularly for evacuation by air-ambulance service in this province, so that we don't risk that government aircraft being in the air when it is needed.

In 1979, as the minister is aware, we had a very similar situation where the government aircraft was involved in the southern part of the province when it was needed up at Watson Lake. That was resolved. I state again that it wasn't because a cabinet minister was involved. The craft was coming over to Vancouver when it developed some mechanical problems, and it took an extra three or four hours — I think it was — to go up to Watson Lake.

It would be nice if we could have some additional funding to maybe have a government air-ambulance jet stationed right

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in Prince George to take care of all the northern constituencies. Instead of having a government aircraft stationed in Vancouver or Victoria, have one stationed, particularly, right in Prince George. It has a fine medical centre that could be the terminus for many medical problems in the north. Have the government aircraft stationed right in Prince George, increase the hospital funding and have Prince George as the terminus for all northern health care and have the air ambulance service in the north. I think the member for Prince George South (Mr. Strachan) would agree with me on that.

A specific constituency issue I would like to talk about is Highway 37. I know the minister has travelled it a number of times. The major problem right now is the dust. You're never going to get away from it. It's picking apples out of the air if you think any government can build a dirt road and not have dust. But the minister will be receiving a petition soon from the residents of Cassiar because the problem has really gotten out of hand with the Arrow trucks going on the road now and the need for calcium to be put on the highway. I know there was a starter project last year, if I'm not mistaken, to do approximately 30 miles of calcium between Cassiar and Dease Lake. This is an excellent program and we'd like to see it stretched right along Highway 37. With the tourists coming up Highway 37 now, it's a very dangerous situation, driving behind a large Arrow truck in the dust conditions. I would certainly hope that the minister could find additional funding to put calcium right along Highway 37 on the unpaved stretches. If I'm not mistaken.... Was the calcium part of the budget increased by 10 percent, Mr. Minister? It's in that area. That's an excellent start. I would certainly hope that we could find an additional sum of money to put calcium on Highway 37. A human life can never be valued at a thousand dollars or a million dollars. We're not asking for pavement; we're asking for calcium. I think it's something the minister could do.

The fourth issue I'd like to talk about is the Nass road. The minister, myself and a number of residents have held meetings on the Nass road. Right now the residents of the Nass valley have a 300-name petition that they would like to give to the minister. The minister is aware that the Nass road is a private logging road owned by Can-Cel. A Mr. Argon wrote a letter to Mr. Martyn, the secretary of the IWA up in the Can-Cel operation. This is becoming a big issue in the area.

[Mr. Strachan in the chair.]

Just to paraphrase part of his letter, he said: "I came into the Nass with my parents in 1914. The road problems have dogged the Nass valley ever since." It's kind of difficult to even look at any of the roads in 1914 and try to make a comparison, with the vast improvements that have happened this year. "In 1950 Can-Cel came to this area and built a road just good enough to exploit the timber and for the millions of dollars taken out of the valley. There certainly has not been much put into the roads, unless one counts the desolate looking slash throughout the area. More power to your effort. And don't forget the gas tax we all pay to use this road. The tax goes up and the road gets worse."

The residents of the Nass valley do pay gas tax on this particular road, even if it is a private road. The only way out is through the private logging road that Nass owns — to get to Terrace. I'd like to give this to the minister now. He'll be getting a formal copy; it's just to see the amount of people who are concerned about the Nass road. I don't know what the minister can offer on this suggestion. It would be very difficult to take over the Can-Cel road, because it is a private logging road, and the intent of the road is to bring timber out of the Nass camp and take it to their mill in Terrace.

I would certainly hope the minister could do something about the road, such as straightening parts of it. Another issue on this matter is that the children from Greenville going to school every morning have to go onto the Can-Cel road. There are approximately 60 children going to school on a bus, and there are logging trucks and poor conditions on the road itself, portions of which fall off into the Nass River. I would certainly hope that the minister could bring forward some positive suggestions.

Another issue is the pavement on the Stewart road. This has been appreciated by a number of residents; I think just about everyone in Stewart is pleased with the pavement aspect, from Stewart south to Kitwanga. This is an excellent program and I hope it will start to go further north from Meziadin up towards Dease Lake. That area certainly needs some type of pavement.

On the issue of spending money on highways, we see what the hon. member for North Island (Mr. Gabelmann) said concerning headlines yesterday about the $100 million-plus for a new highway north on the Island, and the question of its being perhaps another campaign issue. What I suggest to the minister is that you have an excellent highway in place now — the Stewart-Cassiar highway. It needs improvement, but the problem is that we improve the highway one year, do a little bit of work for 20 or 30 miles, and then leave it. Within two years it's fallen apart again. What we have to do is have a concerted effort to start from the north or the south and just work to the middle point to improve the highway. If we just do spot-type improvements over 20 or 30 miles, leave it for two or three years and have that fall apart again, then do the same work every two or three years all over, that's a burden on the taxpayers. We have a good road and it's probably going to be one of the major tourist highways in the north, if it's not already.

It appears that more tourists are using Highway 37 than are using the Alaska Highway. Years ago residents and tourists would take the Alaska Highway up into Alaska and the Yukon, and follow it back. What we see now is that residents are breaking up their travelling by going up the Alaska Highway and coming back on Highway 37. For the encouragement of better roads in this province, as well as the tourist industry, we should definitely start improving Highway 37, and not just in small parts.

Another issue which the minister has been helpful with to a certain extent is local employment. We know that around many highway camps there are large concentrations of native people. To have some kind of special program to encourage local employment of the native people.... I know you have a successful program in the summertime, and I would hope the program hasn't been cut back in hiring local help on summer programs.

Another issue is the rest spots the Highways ministry makes along Highway 37. We have found many of the highway rest spots on Highway 37 are in a deplorable condition. Garbage in many of them has been hanging around for two or three months. It's difficult to have a weekly service at times, but there should be some type of monthly service, because with spring and summer coming there are more tourists. There will be more garbage, and we're finding more bears

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and other pests coming to the highway rest spots. It's difficult for the Ministry of Highways to run provincial camping spots, but the four or five areas along Highway 37 should be cleaned up, and we hope the minister can help with this. It is a black eye for the residents up north, and an eyesore for the tourists who are using our roads and seeing these deplorable conditions in rest spots along the highway.

I hope Mr. Gallagher can offer some suggestions on the issue of ferries. There are four northern MLAs who would like to use the Prince Rupert run. There have been discussions with the minister and ourselves about using our ferry passes. I was told approximately three months ago, when I asked B.C. Ferries if I could use my plastic ferry card on the Rupert run.... The office in Victoria said no, it's only good for this run.

Consequently I talked with the minister and he said that wasn't the case — you can use your ferry pass to go up north on the Prince Rupert. It was just erroneous information given by a staff member from this office. But my concern, and probably that of other northern MLAs, is the use of the staterooms. If we're going to be on this ferry for approximately 18 hours, the four northern MLAs should be entitled to a stateroom on the ferry. The minister was cordial enough to give us correspondence he had in which directors were entitled to the staterooms on the Rupert ferry. There was no mention of MLAs. I would certainly hope that policy could be changed so northern MLAs are entitled to have staterooms on the ferry and so all MLAs are entitled to use the ferry route and not just leave it for directors to get staterooms. I know it's difficult to travel that length of time. Once we get off the terminus at Prince Rupert it would be nice to have a stateroom for the long trip.

Could the minister clarify another situation on that northern Prince Rupert run? Are we entitled to take our family once on one family pass on the Prince Rupert run? The minister could elaborate on that. I would hope that could be increased. For some of us who do have families, I know that would be an encouragement.

On some specifics in the minister's estimates, could the minister stipulate here, in the House, what new contracts there are for Highway 37 this year?

HON. MR. FRASER: Just repeat that again, please.

MR. PASSARELL: What new construction is there for Highway 37 this year? I was pleased to see the minister's booklet yesterday concerning the Highways. But that went for last year. I'd like to know a little bit and I think the residents of the Atlin constituency would also like to know what new contracts there are.

In highway maintenance we've seen grants, contributions and subsidies down by 22 percent in the budget this year. Maybe the minister could elaborate why there is a cutback on that specific program and if it's being picked up in another section of highway maintenance. I think all of our northern MLAs as well as the rural members of this province have to depend on highway maintenance for the improvement of their roads in our particular ridings.

Highway construction is up by approximately 11 percent or 12 percent this year. The specific question is: what is the cost to the northeast coal projects this year? I think approximately four tenders have been put out for new highways in that particular new project in the northeast. I would like to know what type of comparison that is to the new projects in the Atlin constituency.

Another issue in the minister's estimates is Hydro development. The description in the estimates themselves stipulates exactly what that is. If and when — and hopefully the Stikine dam will never be built.... Just as a suggestion to the minister, right now you have a beautiful bridge at the Stikine. That bridge would be approximately 300 feet under water if this dam goes through. I would certainly hope that before this dam ever goes through that bridge could be used in the Nass or moved somewhere else and certainly not just thrown away, wasted and left on the bottom of the backup of this Hydro development.

In the engineering branch, last year there was $50,000 for motor vehicles. I would guess this is for the buying of new motor vehicles in the engineering branch. This year there is not a penny allocated for new vehicles. One of the problems that engineers have is that they come out of a regional office and they have to drive to a specific area. It's too expensive, so the ministry can't get into flying engineers around in a helicopter. I'm just wondering why there is not a penny this year for motor vehicles. One of the situations in the engineering branch is that they have to monitor any construction and do the final inspection of projects. It could be — by cutting back from $50,000 to not a penny this year for new vehicles — a detriment to having proper monitoring programs on new highway projects in this province.

I'd like to speak briefly on the motor-vehicle branch and Mr. Whitlock, concerning the Kitsault project, Mr. Chairman, through you to the minister and hopefully to Mr. Whitlock. We had an issue with Kitsault concerning individuals who are just moving up into the area having to go to Prince Rupert to renew their driver's licence. This was becoming an expense because the only way out was to fly. There is no road out of Kitsault so individuals were going down to Prince Rupert to renew their licence and change of address, for new drivers coming into this province. I would hope that the motor-vehicle branch could bring an individual into this camp, maybe once a month, for renewals.

Last year there was $52,000 in the area of motor vehicles; there's not a penny this year for new vehicles. Last year there was nothing for interministry rentals; this year there's almost $300,000. I'd like to know why there is the large increase of $300,000 for rentals between ministries.

With regard to the air services branch, I made suggestions earlier concerning the government aircraft and the air ambulance service being stationed in rural and northern areas and not in Vancouver and Victoria.

The B.C. Ferries issue that's been brought to this House's attention a number of times is the need to get some type of ferry service into Stewart. It's been a dream of many people up north to have a ferry service into Stewart. It's the most northern ice-free port in the province. With the opening at Kitsault, and to give some encouragement to it, we could run some type of northern line out of Prince Rupert — maybe twice a month or once a week — up into Kitsault and Stewart for the movement of freight and individuals on their daily jobs.

On the air transport assistance program, it's a good program. I've seen a large increase in development of airports in rural areas in this province. I certainly hope that will continue. I notice there's been an increase of $200,000 or $300,000 — to almost $4 million, Mr. Minister?

Interjection.

[ Page 5733 ]

MR. PASSARELL: Okay. It's a good program to put this type of funding into airports across this province — not into areas that have airports but into isolated rural areas. One case in point is Atlin, where the ministry started to build an airport and, I guess, is continuing. Presently the new community organization that was set up by the Ministry of Municipal Affairs has voted unanimously — all 11 members — to state their opposition to the further development of this airport in this particular area. The majority of the residents of Atlin are not opposed to the airport concept but to where the airport is located. It's within the townsite, and the residents of Atlin feel that that area could be used for residential use and not for an airport. Most people don't want to build around an airport or, once they've secured Crown land in a residential area, to know that there's an airport in their back yard. I certainly hope the minister would take a second look at spending any further money on the Atlin airport before some type of secondary feasibility study has been done. A number of studies have been done at the local level on where that airport could be moved — outside the town area, further up the highway going north on the north side of the road, to move the airport out of the residential area and put it north of the townsite.

Another concern I have is the cutback in B.C. Rail. Hopefully we in the northwest will receive BCR one day.

I hope the minister can offer some answers to the numerous questions I raised, particularly on the new construction cost and what's going on on Highway 37, which many residents up north want to know about.

HON. MR. FRASER: To the members of the committee and specifically to the member for Atlin, he's raised lots of points on that great part of British Columbia. However, I'll try and go through them. I don't think I'll give everything a complete reply, but we can get started on some of them.

First of all, television in Good Hope Lake. Yes, our ministry put television in for our crews in the remote areas — Good Hope Lake, Dease Lake and places like that. We had a real problem with staff turnover. As you know, there really isn't much to look forward to without television. I'd remind the member that at that time I had the responsibility of communications as well. Everything worked together, but to get stability of employment we put television reception in these remote areas — with the dish. The problem now is that where our staff have got it, it expands to other members of the community who are not directly connected with Highways, and, of course, they want it. I believe there's ben correspondence on this. Now we're very reluctant to expand it and get into problems with the government of Canada through their licensing. I think we've made a recommendation that if the community — other than the Highways people — would form their own group, we would gladly cooperate on that basis — in other words, their own group applied for the licensing.

AN HON. MEMBER: With funding?

HON. MR. FRASER: Well, I guess it would amount to that to a degree. I can't speak for my colleague, because the funding would come out of his.... I was thinking that we have the base apparatus in the Highways ministry. It's something to be worked out, but I think the licensing part has to be done at the local level.

Regarding government aircraft, you touched on that slightly, Mr. Chairman. Yes, government aircraft are the responsibility of this ministry. As you know, we have a fine government air service that serves all of our province. They are not a Tuesday-to-Thursday group; they work seven days a week, 24 hours a day and 365 days a year. Our pilots and mechanics do an excellent job. I guess we have some pilots with 20 years' experience flying just in British Columbia. There isn't much that they don't know. They do a first-class job. Their job priorities are: first, air ambulance, and second, the ministers and government staff. We have lots of occasions when we burnp, as they call it, ministers' flights or staff flights we have lots of staff flying on the government air service for the air ambulance. I would just like to make this comment on that. You mentioned something about an aircraft located in Prince George. I guess that's certainly worth looking at. We take our direction on the ambulance from the health services branch. They have not recommended that that happen. I would think the reason is that so many facilities — the dispatch and everything — are here in Victoria. Certainly we don't close the door on that. We'd like to bear the health services side of that, but they haven't requested that up to the present time.

I would make another observation regarding the air ambulance. The government has eight aircraft; four of them are jets. Of the four jets, two of them have now been permanently equipped for air ambulance alone. In other words, all the kits and what they require for emergency services are in those two aircraft on a permanent basis. They are the ones that are prioritized for air ambulance. As a matter of fact, there's only one seat available on those two aircraft for any passengers. The rest of the seats have been pulled out. They have all their life-saving apparatus bracketed in the back of the aircraft, so that it's not pulled in and out and transferred from one aircraft to the other. We've upgraded that service to the degree that we have two. That's all they really do. But they will take the odd flight — I'm not saying that they won't — for a cabinet minister or a staff member. There's only one proper seat, so they can only haul one passenger. I was pleased to see that the government air service has done that on their own.

Regarding Highway 37 and the dust problem, I'm aware of that. Last year we tried, Mr. Member, to put calcium on bridge approaches and where we still have some of the famous Bailey bridges. Calcium's not the best to give better visibility, but last year we also went to asphalt oil as a dust retardant. We got a lot of complaints about that. The fact of the matter is that I don't know whether the application was wrong or right. These are always the dangers. I think we had the usual thing happen to us: we started the program and then it started to rain. I got a lot of very nasty letters about that, but we are going to try that again this year, and we hope the weather is with us when we do it.

You mentioned the Arrow Transportation operation that hauls from Stewart to Cassiar — a distance of 300 miles. That was freight and commerce that was going out the other way through Whitehorse. Now we've got that all based in British Columbia's economy, We're trying to accommodate both the economics — jobs and so on — as well as tourism. I might say that Arrow Transportation are now doing a lot better job themselves. But for the first six months they were having difficulty in coping with the roads. They put more miles on the roof of those large B-trains than they put on the wheels. But that's been cut materially, and the drivers are better experienced; and we're glad of that economy coming from

[ Page 5734 ]

them. Also, on a gravel road it complicates things for the other type of traffic. We're trying to get a handle on it.

The Nass Valley. Well, Mr. Member, we have a real problem that's been there forever. As you know, we have said that we'll get some access for Greenville  — build a bridge across the Nass River. We're now in the process of leading up to that. Drilling for the foundations is now going on, and a contract will probably be called this fall. When you get on the south side of the Nass, all the way to Terrace the roads belong to Can-Cel; and they're not very cooperative, I might say. They want to haul with 16-foot bunks. They maintain their roads; they're in a TFL — a tree-farm licence. It's important to the economy of that area. Again, we have interaction, as we call it, of the people with their vehicles. I haven't got a ready solution to that. I think that Can-Cel and the 2,000 people who live on the north side of the Nass.... I think we've all got to get together to see if they can't do something better cooperatively. What Highways would like to see, and what the people of the Nass don't want to see.... We'd like to take them over from Aiyansh and get them to connect to 37; but that's a fair distance too, and it's easier said than done. They're going out of the road that way; they're really going around. The other way is more direct to Terrace.

Regarding paving, yes, we've done a lot of work on the road. There is a paving contract to be completed — another lift to put on. That's what will happen there this year. We're going to do some more work from Meziadin north — a fair amount of maintenance. Employment locally is our policy. We do the best we can. We even hire the natives where they have equipment for snowplowing, I understand. I'm getting back into the Nass area now.

Rest stops. I agree with the member that there should be no reason for that at all. I'm sure our senior people will follow that through. We have a district manager at Dease Lake, and we have maintenance out of there. Again, I think that more traffic means more litter. We just have to maintain them more. I've seen the black bear and the grizzlies eating this; it does attract them. I think we should do a little better job.

You mentioned passes for northern MLAs on the B.C. Ferry Corporation. Really what you're saying is that some ferry staff have said that your passes are not valid on what we call the north run — either Tsawwassen or Port Hardy to Prince Rupert. I think that's been cleared up; if it hasn't we'll take it up with the board of directors. My feeling is that all MLAs, whether they're from the north, south, east or west, should have a valid B.C. Ferry pass. I'm not saying that I would win that, but I think it has to reviewed and clarified. I don't blame the staff; I think we have to deal with that matter at the board of directors level, and we intend to do it. Regarding the four northern MLAs, it has already been cleared up. I really don't think that any of our MLAs will abuse the pass by making a steady run from Tsawwassen or Port Hardy to Prince Rupert. In other words, I don't think it's going to have a heavy impact on the system. If it does, other means may have to be found.

Regarding staterooms, I agree that it should be cleared up in the same way, that MLAs on the 20-hour north run should be entitled. Again, the board of directors will have to clarify that.

The family part. I think that's taking it one too far. Most or all of our benefits, as elected people, apply to us and not to the family. I don't know whether we can stretch the family side to get the ferry pass, but we'll try to bring that too.

AN HON. MEMBER: We're given one family pass on that route, aren't we?

HON. MR. FRASER: I'm not even sure myself, Mr. Member.

There is construction on 37. The Miller job, as I call it, is still going on south of the Nass. The L.G. Scott paving job is still going on for this year.

I would like to go into the cost of northeast coal in more detail. I believe there is a figure in the budget this year. It's funded in this budget at approximately $18 million, and that's upgrading two existing roads. By "upgrading" I mean putting 12 to 18 inches of gravel on it. One is called the Boundary road and the other is the Fellers Heights road. The roads exist, and they're of a low standard. We have to get them up to a better standard for access to Tumbler Ridge.

We have awarded one large contract already. The contract is at work, and I think the price was approximately $5 million. That's a new road access from Chetwynd to Tumbler Ridge. We anticipate letting two more contracts in the 1981-82 year on that specific road.

You mentioned the Stikine is flooded. I'm not going to get into that because you're getting me drawn into a controversy regarding future dams. If that happens — and every thing's "if" — I'm sure we'll retrieve that fine bridge we have across the Stikine. That's been our policy at Mica — retrieving the bridge and using it elsewhere. Yes, the Nass River's a good place to ' use it. I think they want me to sit down and shut up, so I'll accommodate them for now.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. GARDOM: Second reading of Bill 12, Mr. Speaker.

SOCIAL SERVICE TAX
AMENDMENT ACT, 1981

(continued)

MR. STUPICH: Mr. Speaker, one of the things I wanted to say about this was that in the 1976 budget the Minister of Finance of the government of the day introduced legislation and imposed measures the need for which he attributed to the mismanagement of the province's financial affairs for some three years. Because the NDP government had been in government for just over three years, it was necessary for the government to levy new imposts to bring in an extra approximately $300 million. Now we find that after some five years of Social Credit good management, as far as the government is concerned, $300 million wouldn't be nearly enough. They have to levy tax increases and rely on inflationary measures which are built into many of these tax increases to produce not an extra $300 million but an extra billion dollars. That kind of good management we can't afford for too long.

Of course, one of the examples of this is the sales tax increase. If you recall, the last time the sales tax was increased was in the spring of 1976 when the need for raising the sales tax was, as I say, laid at the feet of the outgoing NDP administration. Now we find it necessary to increase the sales tax by an even greater rate, because in those days we were increasing it from five points to 7 points, a 40 percent

[ Page 5735 ]

increase. Now we're increasing it by 50 percent. The rate has gone from 4 percent up to 6 percent. As I say, that kind of good government we can't really afford too long.

Not only that, but when the sales tax was last reduced.... You may recall that by coincidence the budget speech was delivered the day after April Fools Day, and it did refer to this reduction in the sales tax, and the election was called the very next day. But when the budget was introduced, the Minister of Finance of the day said it was a permanent reduction from 6 points down to 4 points. He reassured people that never again would it be necessary in the province of British Columbia to raise the sales tax. The Premier also went on record as saying that it was a permanent reduction. Premier Bill Bennett was quoted in the press as saying the B.C. sales tax cut was permanent. He added later that he could not bind future governments. Of course we all realize he cannot bind future governments.

I'm sure the implication he intended at the time was that in the event there was a change in the administration and he lost his position as Premier with someone else taking over, it was possible that the incoming administration might do all kinds of irresponsible things. But certainly the assurance was given to the people of the province that never again would an administration led by him increase the sales tax. But of course that was two years ago. That was the day before the election was called. The election was called and this administration was returned to office. We now find that things have gone so badly in the province that the promise given by that Premier and by the Minister of Finance that we were experiencing a permanent reduction in sales tax because of the administration of this government.... You can't have it both ways. Well, they can have it both ways; they're certainly going to try. The need to increase it in 1976 was our fault; the need to increase it in 1981 is somebody else's fault. It's never the fault of this government when this government happens to be in office. It's the fault of the government if they're out of office; it's the fault of some other factors if they're in office.

It isn't necessary to increase the sales tax by 50 percent at this point in time. We don't believe it's necessary. We're opposing this. We opposed it during the budget speech debate. We're opposing it now that the legislation is before us, and we intend to vote against it.

MR. COCKE: On second reading of Bill 12, I would first like to say that we were absolutely shocked that a bill of this kind and this magnitude would be put before the Legislature. You see, we believed some of the statements made by the Premier and some of the members of the Social Credit caucus that what happened previously — a reduction from 7 percent to 4 percent — was a permanent thing and that we could probably look forward to even further reductions of the sales tax in this province,

I see here a quote from the then Minister of Finance. On April 2, 1979, he said: "The new sales tax of 4 percent is lower than the rate in effect at any time in the last 25 years. Isn't that magnificent. Then he went on to say: "British Columbia is the only province that has ever lowered the general sales tax rate permanently."

MR. HOWARD: Permanently?

MR. COCKE: In perpetuity. As one past member of this House used to say when he really got going: "In perpetuity and even longer." I'm not sure how he rationalized that. The then Minister of Finance said: "British Columbia is the only province that has ever lowered the general sales tax rate permanently, and now has the lowest sales tax rate of any province in Canada that charges the tax." That obviates Alberta. He was believed. Let me tell you who believed the marshmallow maverick himself.

AN HON. MEMBER: Kempf?

MR. COCKE: That's the man. What did the member for Omineca say in the debate? He said: "The government and the Premier have made a commitment to the citizens of British Columbia that the reduction in sales tax is here to stay." I'll bet that when we vote in second reading the marshmallow maverick will once again melt and will get up and support the increase in sales tax that Bill 12 faces us with.

I'm also surprised that we're debating Bill 12 on May 22, when it's retroactive to April 1. I know the community has all been well apprised and well appraised of what's going on.

I would like to go on and further quote the member for Omineca.

MR. KEMPF: Good stuff'.

MR. COCKE: Good stuff is right. I want that member to get up in the House and explain how he felt the way he did. He went on to say: "There is a long-term commitment, straightforward honesty and planning for the citizens of this province." Yes, straightforward honesty. I'm not sure what kind of honesty that is. Honesty is usually honesty, and any descriptive adjective around honesty is probably redundant, but that's neither nor there.

Interjection.

MR. COCKE: Mr. Speaker, that witty member for North Peace River (Mr. Brummet) has me in stitches, and it's very difficult for me to stand here and oppose the bill with a smile on my face from all that wit across the way.

Mr. Speaker, the whole thing is a question of what we can expect from a government that a few short years ago made a promise and gave an undertaking that was so reliable that that MLA believed every word they said. That MLA now sits in this House. How do you think the public felt? He probably should have been a little more sophisticated and a little more cynical in his outlook. But the general public were duped when that bill was brought in reducing the sales tax from 7 percent to 4 percent in 1979.

Interjection.

MR. COCKE: Mr. Speaker, the member implores me to read his remarks. I have read enough of his remarks now to realize that the reading of his remarks doesn't really give one much edification. Let me tell you why. He goes up into his constituency and tells them how he opposes the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. McClelland) and this minister and that minister. Then he comes back down here, that marshmallow maverick, and doesn't get up to vote against them, doesn't get up to say a word against them; and he's not going to get up on this issue.

MR. KEMPF: That's absolutely untrue.

[ Page 5736 ]

MR. SPEAKER: Order, please. The member for New Westminster would help me to maintain order if he would contain his remarks to the bounds of the bill before us.

MR. COCKE: I don't know how it is I walk the straight and narrow and then all of a sudden get this magnetic force moving me off.

MR. KEMPF: To the left. Always to the left.

MR. SPEAKER: Order, please.

MR. COCKE: Always to the left, Mr. Member. If you're on the right, I never want to be any closer to it than I am now — and that's two sword lengths across this legislative chamber.

MR. SPEAKER: Order, please. Back to the bill.

MR. COCKE: Mr. Speaker, I'm sorry that I have departed from the bill.

HON. MR. McGEER: You were never on it.

MR. COCKE: The member for Point Grey — my dear friend — says I didn't get on it. I am on it.

I am suggesting, Mr. Speaker, that on April 11, 1978, the Premier was quoted as having said that Ottawa will pick up half the cost of the 2 percent cut in B.C. sales tax. Mr. Bennett said he had no qualms about accepting the money, saying: "It's not a gift. It comes from the B.C. taxpayers anyway." He told a news conference in Victoria that B.C.'s sales tax is permanent. That wasn't in the chamber; he told a press conference it was permanent. He made a deal. He also said that Ottawa was going to help us pay for it. Good enough. What's happened? We're still getting the money from Ottawa. That well hasn't dried up, so I suggest that this was a very bad trick played on the people of British Columbia.

Mr. Speaker, I would hope against hope that we'll have a good look at this whole question. You know this government is very handy at reminding us of the good old days of 1975 and 1976 and comparing it to now.

Interjection.

MR. COCKE: Yes, I remember what's good and what's bad. I remember that in 1975 there was a tax burden of $1.4 billion. Now there's $3.36 billion worth of taxes in our province. There has been inflation, but in that short period it hasn't been an inflation as great as the inflation in terms of the demands of this government on the taxpayers of this province, even if in return the people were getting adequate service. What are we getting for this additional sales tax? Are more hospital beds available? I'm not suggesting more are needed. I see no evidence. I see waiting lists of 12,000 for elective surgery in this province. Is the sales tax going to help that?

I say that this is a wastrel government. They could be spending less in that particular area and getting better service, but they don't know how to go about it. It's a government of boondoggles. They've been so busy trying to improve their image and overcome their mistakes that they have not given a good account of themselves in running this province like you'd run any good business. It is not being run properly. That's why we're facing this 50 percent increase in our sales tax. At the time it was lowered the government admitted it was a regressive kind of tax. They just didn't want to make a move on the income tax — I mean, to the extent they could have — which is not nearly as regressive.

This tax affects poorer people to a far greater extent. The lower your income, the more demands are made on that income in terms of percentage. This tax affects that greatly. If I could afford to go out and buy a Rolls-Royce — and I'm sure that ability could be found in this House — I could afford to pay the sales tax. On the other hand, if I happen to be a working-poor person and have to go out and buy clothes for myself, my wife and my family over the age of 12 — welcome, Mr. Minister — I'm hard pressed to raise that additional money.

MR. BRUMMET: Let's put it this way: under the NDP you wouldn't have a job.

MR. COCKE: Look at it this way: under the NDP everybody in this province had a smile on his face. Now look at them. We've got the longest faces — you would agree, Mr. Speaker — in this province since the advent of this government. The folks in this province expected something besides the bungling and mismanagement that have brought us to the point where we've had to have a 50 percent increase in this tax rate.

AN HON. MEMBER: Your lie didn't work in Kamloops.

MR. COCKE: Just in case Hansard recorded that statement, it didn't do badly. We are up 1.5 percent; you're down 6 percent. That's not bad. That's 41 on our hit list. We're referring now to Kamloops.

I suggest that the province has been duped by a very simple, little bill — Bill 12. It has come along very quietly and informed us that when we go to the store and purchase most items — or for that matter, when we purchase most items in the province beyond food and certain other exclusions — we're going to be paying a good deal more for those items. Why were we told at the time that it was permanent? What has changed? The Minister of Finance tells us that resource income is down. What evidence do we see that resource income is down? So far, Mr. Speaker, I see very little evidence of it. As a matter of fact, it would appear to me that even our natural gas revenues are going to be improving, because our market is improving.

Interjection.

MR. COCKE: "Can't get much worse," the minister says. If the announcements that are coming out in terms of our market are true, then it would strike me that we're not doing all that badly. Mr. Speaker, thank heaven the government found a way to improve access to those revenues by taking over that important asset at the wellhead. Otherwise we were locked in for years at 30 cents per thousand cubic feet.

The 1981-82 budget tells us that the $6.6 billion budget is necessary. Well, Mr. Speaker, I contend it's necessary for one reason. Despite the fact that many previously budgeted items are now being moved out into Crown corporations, I suggest the reason that budget is as high as it is is because we have a

[ Page 5737 ]

wastrel government. We have gone over the estimates to date. We've moved resolutions in committee to reduce government spending in areas where we feel that government spending is wasteful. I know you don't know, Mr. Speaker, what happens in committee. But let me inform you for the first time ever that not one of those resolutions has been accepted by that government. The resolutions have been reported, but not the content thereof. Therefore I'm just informing you. We've asked the government not to be wasteful and not to throw away money.

If they had followed our advice, we wouldn't be in a position today where we're standing in the Legislature on May 22 arguing about a 50 percent increase in the sales tax that hits the pocketbook of every British Columbian. Around this issue there has to be a great deal of anger. The anger is mainly owing to the fact that the people were promised this reduction would hold — promised by the Finance minister, by the Premier and by other members of the government. As citizens, we feel that when the Premier speaks, he's giving us information that's valid and information that will carry. On April 11, 1978, he said that this is permanent — a 2 percent provision is permanent.

The whole question of a sales tax cut — back then — was one that the opposition and the government applauded, and the backbenchers believed. Now here we are with this increase. I just want to ask this question: if this government is re-elected — and don't say "when, " because you're no more sure than fly to the moon — are they going to do it to us again? Are we going to go from 6 percent to 7 percent to 8 percent? Where will it stop?

MR. HOWARD: It'll come down just before the election.

MR. COCKE: Maybe the day before. The people in the province have been told a message by Bill 12, and the message is: they're not to be trusted. I hope the people in this province remember that clearly, because it was such a short time ago, and at a time when they claimed they were in difficulty because of a previous government. What's happened now? I suggest two things: they're in difficulty because of their own governing, bungling and mismanagement, and they're prepared to go and take it out on the people of British Columbia with this absurd increase in tax.

We won't be voting for it. We will vote against it, and we will hope that responsible members of that back bench will either withdraw from the vote — put on their running shoes — or will have the courage to stand up in this Legislature and put their votes where their mouths are.

I had hoped the member for Omineca was going to follow me in this debate. He's gone. I still hope that he'll have the courage to come in here and say that his statement in April 1978, on page 649 of Hansard, that "our government and our Premier have made a commitment to the citizens of British Columbia that the reduction in the sales tax is here to stay...." I hope he'll take the government on for placing him in a position where he made that statement. He went on to say: "There is a long-term commitment of straightforward honesty and planning for the citizens of this province." Just on the basis of those remarks, he has to come in and clear the air. Help us all out, and help the government see the wrong that's been perpetrated by Bill 12.

MR. HALL: Mr. Speaker, of all the taxes we have in this province the sales tax is one of the most interesting. If you examine the genesis of this tax and the vagaries of the fortunes surrounding the tax it could, I suppose, be the basis of a chapter of political history in the province that would be of interest to both economists and political scientists. Possibly, because it's of interest to both political scientists and economists, it might be worthwhile looking at it from those points of view. However, it is a little unfortunate that the treatment of this tax is so very often used in ways that are less than savoury in the eyes of the political parties in the province, always to the complete exclusion of the government of the day.

What bothers me is that when the tax goes up for economic reasons the government uses politics to explain it, but when the tax goes down for political reasons they use economics to explain it away. That really is the most cruel and unsatisfactory reasoning for responsible cabinets to try and get away with that kind of fiscal behaviour.

Let us examine what has happened since 1978. I won't bother going back to the original acronym SSMA to describe the tax all those years ago. Let's just deal with the most recent years. In 1978, in a fairly hurried and pressure-ridden series of meetings, province after province agreed — I presume with the necessary arm-twisting by the federal government — that if they reduced their sales tax they would get some accompanying benefits. This province was one that agreed. I can't remember whether this minister was then the Minister of Finance. He shakes his head, so it was obviously his predecessor.

A deal was made as of that day that if they reduced the sales tax, which had gone up, by the way, according to them, for economic reasons — but we know it was really for political reasons.... The tax had gone to 7 percent. In a signed, sealed deal with the federal government they received benefits in income tax from the federal government that allowed this government to reduce the sales tax by 3 percent. That was the same in other provinces, with differing figures. Basically there was no net loss in revenue to the Crown provincial. In short, we should have seen a joint thank you trumpeted around the province in large black letters from one government to the other for an attempt by the two of them to put more money in the hands of people — to try and reduce the effects and ravages of inflation and of the hard times that people were having in 1978.

That cut, as my colleagues from New Westminster (Mr. Cocke) and Nanaimo (Mr. Stupich) said, was supposed to be permanent. Now we've seen a different kind of thing altogether. We've seen the tax go up 50 percent. The same paper that included this 50 percent tax increase by these taxmasters opposite bashes Canada. It has the almighty gall to kick Canada in the teeth and to go on a sort of self-congratulatory exercise throughout the budget document, pummeling Ottawa, when, in actual fact, the very root, basis, cause and financial support in this particular exercise was provided in the first place by their handshake in 1978. That's really a bit much. It's no wonder that people start to — as my colleague from Saanich and the islands (Hon. Mr. Curtis) knows, and I've talked about this — get cynical in their turn and say that politicians are all the same. That's just too much for the public to swallow. That you can put it up from 5 percent to 7 percent and blame an outgoing government, bring it down and not congratulate and share with the federal government the benefits and praise that should accrue to you, and then go to this extent and attack Ottawa, who really provided you with the base income from the first year.... I just don't think that's good politics or fiscal wisdom.

[ Page 5738 ]

What about the sales tax? Why are we using the sales tax as one of our main sources of revenue? Why haven't we gone on, as the Social Credit Party has always stated and believed, basing taxes on ability to pay and on income tax? Why are we using this regressive tax method that is now 7 percent of our purchases? Why have we taken this route — a route that has been described by most economists as regressive? It's been described by my colleagues as hurting people with lower incomes the most. We know that food's exempted. We know that clothing for children up to the age of 15 is exempted. Nevertheless, people with lower incomes pay a larger percentage of their incomes out in sales tax. I just can't understand a government, which purports to stand for people, using a tax like this in the way that it does. What we should be doing is going towards reducing sales tax, not increasing it.

[Mr. Strachan in the chair.]

I just think that in this day of inflation and spiralling costs, when we're seeing costs of essential products like, for instance, gasoline, which I consider to be next door to an essential product, especially in view of the failure of this government to provide a decent transportation system, rising quickly towards $2 a gallon and soon no doubt — within our time in here — towards $3 and $4 a gallon, as it's getting to be in Europe, rising in a geometric kind of progression, we should certainly be looking at our tax structures in a different way, rather than just piling on simple regressive sales tax. I think it's a sign of hopelessness and a sign that the government really is doing the easiest thing it can. It's just juggling figures.

As I said in the budget speech, it is really planning for a budgetary surplus, planning for a programmatic announcement in the spring of 1982 so that they can buy their way back to stardom. This minister can then say that by the sweat of his brow and by dedication to duty and all those other things, spoken in the mellifluous tones he uses, he single-handedly brought the province up again, and we can all go to an election.

That's his plan. I've said it before and I'll say it again. He thinks we're going to go out through those revolving doors in February of next year in the middle of the budget speech with the kinds of surpluses he knows the public accounts are looking at. I think it's time we all started to put the public on notice that that's their plot. This sales tax is part of it. It's unnecessary and I won't vote for it.

HON. MR. CURTIS: Mr. Speaker, the remarks which were made two days ago in the opening of debate on Bill 12, and then made at greater length today with respect to the social services tax increase, have focused on two or three particular points, with the exception of a few remarks made by the second member for Surrey just moments ago. We can engage in semantics, I suppose, and that is sometimes a cop-out response. I don't believe in cop-out responses, but when the federal assistance for sales tax was announced by Ottawa it was referred to as a temporary measure. I think it's important to put that in the correct historical context.

As an example, when that arrangement was accepted, the province of Ontario said: "Very well, we're going to reduce the sales tax in Ontario from 7 percent to 5 percent, and we will do it for six months. And indeed, that drop lasted for six months, if not exactly six months — I'm subject to correction by the record. In fact, British Columbia stayed down for three years, and contrary to the comments by the hon. member for New Westminster, it did not go down in one jump. The record will show that it went from 7 percent to 5 percent, and then to 4 percent.

I like the second member for Surrey, Mr. Speaker. I get along well with all members in the chamber most of the time. There are the odd exceptions. When I hear the second member for Surrey make reference to some master plan as far as this Minister of Finance is concerned, to indicate that in about nine, ten or eleven months from now, by dint of hard work and through my great skill, we are suddenly going to have a massive surplus, I wish that member's prediction was likely to come true. But I fear that it won't.

In closing debate, I'm not going to revisit all the points which were made in the 1981 budget document presented to this House on March 9. I will take credit for one thing only: that the budget document of March 1981 was probably the most detailed and straightforward and open budget presented to the people of British Columbia in the history of this province. We raised the sales tax — and I realize we're speaking of the sales tax in this particular bill — because it was necessary.

Interjection.

HON. MR. CURTIS: You know deep in your heart that I speak the truth, Mr. Member, through you Mr. Chairman. We had one unacceptable alternative, an alternative which has been taken by our sister provinces in recent years and which we do not want to face in British Columbia — a deficit budget. That was the alternative.

Interjection.

HON. MR. CURTIS: "Terrible," the second member for Vancouver East (Mr. Macdonald) says. Well, I hope Hansard heard that but I'll offer the interjection in order that the record will show that the socialists still believe that deficit financing and losing money each year is acceptable. Let the record show that. We went through all of that in 1972 to 1975 and the people of British Columbia will not forget that. "Lose as you go, " is their motto.

MR. HOWARD: That's false, Hugh, and you know it.

MR. SPEAKER: The House will come to order. All members are reminded that parliamentary language is always a feature of the Legislative Assembly.

HON. MR. CURTIS: In any event, Mr. Speaker, we have the interjection by the second member for Vancouver East. I think we will enjoy using that in the years to come, particularly at the time of the next election.

The social services tax in British Columbia is still among the lowest in Canada. While the sales tax was not increased in the great province of Ontario in the 1981 budget earlier this week, a number of other taxes were. We stand by the necessity of the increase. I believe that all members should support the increase. I'm confident that all members on this side of the House will support the increase, as unpalatable as it was to introduce.

Mr. Speaker, with respect to Bill 12, I move second reading.

[ Page 5739 ]

Motion approved on the following division:

YEAS — 27

NAYS — 17

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

Bill 12, Social Service Tax Amendment Act, 1981, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Committee on Bill 13, Mr. Speaker.

FINANCE STATUTES AMENDMENT ACT, 1981

(continued)

The House in committee on Bill 13; Mr. Davidson in the chair.

Sections 31 and 32 approved.

On section 33.

MR. HOWARD: Mr. Chairman, this section seeks to increase B.C. Hydro's borrowing capacity or limit from $6.4 billion to $7.2 billion — an $800 million increase in debt for B.C. Hydro. Before we start to examine that, I wonder if I could pose some questions to the minister about the intention here and just what this means in the context of one of the appendices in the budget about Crown corporation financing and so on. In appendix D on page 57 of the printed budget speech, Crown corporation financing projections for 1981-82 are identified for B.C. Hydro as being $925 million. Could the minister advise the House if B.C. Hydro has borrowed any of that $925 million projection within the current fiscal year? If so, how much has been borrowed, where and on what terms?

HON. MR. CURTIS: Mr. Chairman, with respect to this section, answering the last part of the hon. member's question first, we have undertaken three very successful public issues for British Columbia Hydro since December 22 last. Those three issues comprised a $150 million Canadian public issue which was priced on December 22, a $100 million Canadian issue which was priced in March, with a closing in April — I believe it was April 14, as I recall — and then the last of the three, a $400 million public issue in United States dollars in the U.S., which was actually in two tranches — it comprised $150 million of ten-year bonds and $250 million of 30-year bonds. One of the significant things about all three issues is that the emphasis was on the longer term. The first one was $150 million with a 30-year term; the second issue was 25 years. Then, as I've indicated already, we took two bites of this particular U.S. issue, which is priced toward the end of April at $150 million in short and $250 million in long.

I think that the member was seeking an indication as to what this additional borrowing authority will be for. Through the Chair, is that correct?

MR. HOWARD: You're anticipating. Of the $925 million identified in the budget as being a borrowing or a fund requirement for B.C. Hydro in the fiscal year 1981-82, how much, if any, of that projected $925 million has been borrowed? And then, of course, how much is left to borrow?

HON. MR. CURTIS: Mr. Chairman, I think the best way to answer that is that we have not reached the borrowing ceiling which is in existence now until the passage of this bill. The outstanding borrowing limitation as of May 15, 1981, was $351 million. So we're really looking at two things. The hon. member referred to the borrowing requirements as set out for Crown corporations on page 57 of the budget document. I'm sure he understands — and he identified it as such — that those are the borrowing requirements of $925 million. I think historically, and quite correctly, you seek a higher ceiling than you actually foresee as being required, specifically in the year in question. So we're increasing the borrowing limit in this section by an amount of $800 million, but we have some of the previous ceiling unused.

MR. HOWARD: Perhaps I'm not phrasing the question properly. The budget says $925 million of long-term borrowing requirements. The minister said a while ago that he classified a ten-year term as short-term. I've always understood that fell in the category of being medium-term borrowing. But apart from that, whatever that means, in the fiscal year 1981-82, within which we are now, long-term borrowing requirements with British Columbia Hydro were projected at being $925 million. Of that $925 million, how much has been borrowed, if any?

HON. MR. CURTIS: Mr. Chairman, I think we're very close to the right question and the right answer here. Really the borrowing started in December after the receipt of the triple-A rating last year and so on. We borrowed $150 million, then $100 million and then $400 million. We have borrowed a total of $650 million in this most recent period through long-term bonds. The member and I are going to have a discussion in the corridor — a very friendly discussion — as to whether ten years is medium or short. That can be debated ad nauseam. I think that answers his question. We have already borrowed $650 million in the Canadian and U.S. market for this particular Crown corporation. We have not offended against the borrowing limit, which is already in statute. Through this section we now seek to raise the borrowing limit. We had a cushion, and indeed we will still have a cushion in the ceiling.

[ Page 5740 ]

[Mr. Mussallem in the chair.]

MR. HOWARD: Mr. Chairman, it's such a pleasure to see you in the chair, sir.

Let's go back to page 57, appendix D, of the budget speech. It says at the top of the page: "Crown Corporation Financing, 1980-8l." As I understand it, that's the period ending on March 31, 1981, the last fiscal year. During that period, it is expected that the investment requirements of Crown corporations met by borrowing will total so much money. This consists of $710 million for British Columbia Hydro. Within that figure of $710 million for that fiscal year, was there included the $150 million Canadian borrowed in December and the $100 million Canadian borrowed a bit later than that? That was borrowed in that 1980-81 fiscal year, so I assume the two Canadian issues of $150 million and $100 million, for a total of $250 million in the previous fiscal year, was part of the $710 million. Am I correct?

[Mr. Strachan in the chair.]

HON. MR. CURTIS: Mr. Chairman, first of all on appendix D, page 57, which has been raised by the hon. member, he's quite correct. During the current fiscal year, the year now ended since we're working with a March document, the investment requirements of Crown corporations met by borrowing will total $1.06 billion. Then he speaks specifically of the $710 million. That was the best estimate, and I would think it would be very close to the completely accurate estimate for that fiscal year. Much of the $710 million would have been borrowed short-term and then later covered by at least the first long-term issue which was priced in December, but I would think probably not the second issue, the $100 million issue, because it did not close until April 14, which would be the start of this fiscal year.

So we're talking about three things, really. What did Hydro require for borrowing in last fiscal year — that's $710 million; what will it require in this fiscal year — that's $925 million. I may have unintentionally misled the member and confused the debate by pointing out that we have through this year-end period raised $650 million, the bulk of which would, in fact, retire the short-term borrowing undertaken by Hydro.

MR. HOWARD: What I'm trying to get to is this. Of the $925 million projected as a requirement for this fiscal year, within which we are now, some has been borrowed — presumably the second hundred Canadian 25-year issue — because of the closing date of that; also, I would assume, because of the date of the prospectus for the U.S. borrowing of the $400 million being April 16. So presumably that $400 million is part of the $925 million. That's all I was trying to get.

HON. MR. CURTIS: Yes, that's correct.

MR. HOWARD: That was the first question I asked. That leaves roughly $425 million left to borrow on behalf of B.C. Hydro in the current fiscal year. How, within that, do you compute or identify borrowings in U.S. funds? For instance, of the two tranches, as the minister referred to them, the $400 million U.S. borrowed in April would bring in — at a rough exchange rate, in very round figures of, say. 20 percent — $480 million or $475 million or $970 million Canadian, or something of that sort. Because you borrowed it in U.S. funds, do you have to include that as being a portion of the $925 million?

HON. MR. CURTIS: It would not be correct to include that, because, again — to use the phrase which shows in the budget on page 57, "long-term borrowing requirements" — a considerable portion of the $400 million U.S., translated into the appropriate Canadian amount would be employed to retire short-term debt which Hydro.... In a number of instances, of course, the province itself is loaning in the short-term to B.C. Hydro at market rates — managing the trusteed funds which have been discussed a number of times. So we're in process.

If the question is also where we think we will go for the next issue, that depends entirely on the market of the moment. We have our group ready in the Canadian market, our group ready in the United States market, and we also have a group ready in Europe. Whether that group is to be used or not is a matter for some debate. A rollover is occurring here in terms of transferring from short-term borrowing by Hydro to long-term secured financing.

MR. HOWARD: The minister is saying that Hydro needs another net amount of roughly $425 million out of this $925 million. Whether they're U.S. or Canadian funds and whether part of the funds will be to retire bank debt is not material to what we're getting at now. Roughly $425 million might go to the Canadian market, the U.S. market or the Eurodollar market in Europe. There is no clear idea when or how. There's no idea when Hydro will need the money. That should be fairly understandable.

HON. MR. CURTIS: Now we're speaking about two very specific things. Hydro needs the money and, given the increased borrowing limit, we can accommodate Hydro through the trusteed funds to which I referred. They're borrowing within the context of the act which is before us and are amending the B.C. Hydro and Power Authority act. That money might be loaned to them for a two-week period by the province of British Columbia, using our cash flow and trusteed funds. It might be loaned to them on a day-by-day basis, because we are loaning in the short term. As the market appears right to us and to Hydro, we would then go into the long-term market. Given the legislative authority which is requested in this amendment, we would not withhold money from Hydro, but rather they would be borrowing from the province's available cash at current, very short-term market rates. Clearly, Hydro doesn't like to borrow at those high rates.

MR. HOWARD: Some of the borrowing from the funds which are under trusteeship by the province.... The minister was kind enough to provide this information to me. I don't have the letter in front of me right at the moment, but it did indicate that some of those borrowings were at 17.25 percent — not all, but the $250 million of the long-term or 30-year U.S. borrowing was at 15 percent. I believe the other was at 14.5.

To me there's a very serious thing happening here, because there's only one group in society that pays for this: the people who use the services of B.C. Hydro. When we look specifically and simply at electricity, which is Hydro's greatest source of income, by far the greatest number of people in

[ Page 5741 ]

the province use electricity for lights and cooking, generally speaking, and for heating in many regards — even though they use oil, they still use electricity to run the oil burner.

I submit that B.C. Hydro's activity in terms of what it wants to do is completely out of control with no authority in government except this desire and this response on the part of government to Hydro's saying they need more money: "Okay," they said, "we'll bring in a bill, and we'll increase your borrowing capacity. We'll raise the ceiling. You can borrow more money." I don't think there's any attempt whatever by government and the fiscal agent of B.C. Hydro, the Minister of Finance, to say to Hydro: "Wait a minute, what are you doing with this massive debt load?"

Let's show what happened, Mr. Chairman. I don't know if you look at your Hydro bill this way or if anybody else does. In 1979 on the electricity bill of residents of this province — to keep the lights on in the house, to operate their stove, to keep the furnace going in the winter, dress up the Christmas tree with lights — for every $10 that every resident in British Columbia paid to B.C. Hydro, $3.88 went to pay the interest on Hydro's debt. Of the Hydro bill visited on the general public in this province, 38.8 percent went to pay interest. That was in 1979. There was a lot of low interest by today's figures and interest rates in any event. There was a lot of low-interest money that Hydro had to pay interest on. Its annual report shows that Hydro had bonds outstanding ranging anywhere from 3 1/4 percent up to 7 percent through 12 3/4 percent, which was the highest interest rate I can pick out quickly, looking over their schedule of long-term debt.

Now we're talking about $(U.S.)150 million at 14 1/2 percent already committed; $(U.S.)250 million at 15 percent already gone, 30 years; and $150 million Canadian in December — and I think the interest rate was 13 1/2 percent — 30 years. The minister just now said we're looking for another $425 million of the $925 million looked for. At what interest rate will that be in long-term money today? I haven't looked at any recent bond sheets to find out where it's going, but it's higher than 15 percent.

Two years ago, residents in this province paid 38 percent of their hydro bill to pay the interest on Hydro's debt. Last year that percentage of the hydro bill went up to 39.6 percent, and that's with relatively low-interest carrying charges, a maximum of 12 3/4 percent. The more Hydro's low-interest borrowings mature, the more they're going to have to refinance at a higher interest rate. On December 16, 1981 — that's this year — $100 million in 9 3/4 percent bonds is coming due. I don't think anybody has any way of projecting what the interest rates are going to be in December of this year. All of the analysts and people who talk about it indicate that they're not going to come down significantly from where they are now. But even if they are at the 15 percent level, which Hydro had to pay to get $250 million in the U.S. market in April of this year, that's a 5 1/4 percent increase in interest rate payable on a rollover of that 9 1/4 percent stuff that's coming due in December. All the way down the line it goes that way. In 1982 some 8 7/8 percent bonds and some 5 1/4 percent bonds are coming due. In December 1982 some 9 3/4 percent bonds are due, and so on. It goes on in that fashion, not to mention the 4 percent and 3 1/4 percent bonds that were issued by the former B.C. Power Commission or the bonds that were issued by the old B.C. Electric Co., some of which are coming due within the next year or two at 4 1/4 and 5 percent and so on.

Hydro does not have a history of paying its debts. It has a history of borrowing more money to roll it over, to refinance it. The more it refinances that at the higher interest rates, the more it's going to sock it to the average general public in this province who need electricity to keep homes warm, lit and running. At the end of March last year, as I said, 39.6 percent of the residential Hydro bill went to pay the interest on the debt. At the rate we're going, well above 40 percent of the Hydro bill will go to pay the interest on the debt. That is not a very attractive or appealing thing to look forward to.

I'm not going to get into the question of whether or not, at this point, Hydro is doing the proper thing in terms of the size of the projects that it looks at. That's an engineering and technical argument which we can have another time. Incidentally, I think that once you embark upon it, there is a certain validity to questioning Hydro's perception of the size, the style and the magnitude of the projects that it's looking at. It can do a similar sort of thing without having multibillion dollar dams sitting around the province. But the point I want to get to on this situation here is that the government is coming to the House and saving: "We want to increase the borrowing potential, increase the limit" — maybe they won't get up to the limit, but basically that's what the government is seeking to do — "by another $925 million in the budget." Some of that — $500 million — will be within the S800 million increase; they had $300 million residue from the earlier limit. All those are just minor figures when you look at the fact that what is sought to be accomplished here is to permit B.C. Hydro to drive itself and the people in this province further and further into debt at higher and higher interest rates.

The net result, Mr. Chairman, is when you get your hydro bill in your house, figure out the percentage and find out that you're paying 40 percent for Hydro's mismanagement and for the provincial government's inability to get a handle on what Hydro is doing. Mr. Chairman, you and other members in the House should look twice as to whether or not we should go along with this request contained within this clause before us. I think Hydro has got a lot to account for. The Crown corporations committee was set up by this Legislature after a glowing speech by the Premier saying how that Crown corporations committee, in theory, was going to be able to operate to make Hydro accountable to the general public. It hasn't happened. It hasn't happened partly because Hydro's approach to accountability to the Crown corporations committee is to look upon that committee with some disdain and some disinterest.

MR. KEMPF: Not true.

MR. HOWARD: "Not true," says the Chairman of the Crown corporations committee. How does he know? He hasn't even got the guts to stand up and call meetings of the committee. He's receiving money under false pretences.

MR. CHAIRMAN: Order, please. I'm sorry, hon. member, but I will have to ask you to withdraw the imputation towards another hon. member of the House.

MR. HOWARD: Which was what, Mr. Chairman?

MR. CHAIRMAN: The reference to guts, hon. member. Would the member please withdraw in good parliamentary tradition.

[ Page 5742 ]

MR. HOWARD: Well, if that's a word, Mr. Chairman, that you find offensive, then there's no question about that at all.

MR. CHAIRMAN: The member withdraws.

Hon. members, although I recognize the concern of the member for Skeena, we are discussing a borrowing authority section of the bill. All members of the committee are reminded of that.

MR. HOWARD: That's exactly what I'm doing. I'm discussing the borrowing, the effects of the borrowing, the interest rates payable and the effect on the residents of this province who have to use Hydro's services.

I was expanding that to say that Hydro is coming to this Legislature — through the Minister of Finance — without having given any account of what it wants to do with the money or anything else. The only avenue of accountability that B.C. Hydro is required to follow is another statute of this Legislature called the Crown Corporations Reporting Act. That was set up specifically so that this Legislature could establish a committee which would say to B.C. Hydro: "You have got to be responsible to the general public and you're going to do it through this committee." I'm saying that it's offensive to our concept of democracy and legislative sanction to have Hydro come to the Legislature to ask for this increased borrowing capacity and power and yet at the same time have members in this Legislature who refuse to let that Crown corporations committee meet so we can find out from Hydro what they want the money for. That's offensive to democracy.

You, Mr. Chairman, I and other members of that Crown corporations committee unanimously directed that member for Omineca (Mr. Kempf) to call meetings of the Crown corporations committee on the third Thursday of every month. He's failed, refused and neglected to do it. He's wilfully obstructing the instructions of that committee.

As a result of that, we're now faced with a request by B.C. Hydro, through the fiscal agent thereof, for an additional $800 million in borrowing capacity. We can't get to B.C. Hydro to find out what that's for. That's shameful and disgraceful. Every time the general taxpayer picks up his hydro bill from now on and sees in there that more than 40 percent of his hydro bill is going to pay the interest on this massive and offensive debt, I hope he remembers at election time that it ain't B.C. Hydro that's the problem; it's its fiscal agent, the Committee on Crown Corporations and the Premier, who are refusing to permit some sensible examination of what B.C. Hydro is doing. That's the force of the argument I wanted to make.

HON. MR. CURTIS: I think there are a couple of things which should be offered for the committee's consideration following the remarks we've just heard from the member for Skeena. I would not want him to leave the impression with the committee that Hydro is labouring under such a debt load that it is unable to retire debt as it proceeds, because indeed, almost without exception — that's the caveat that I have to apply — the debt which is now retiring, the Hydro debt itself, would have had the sinking fund provision. Therefore the principal amount to be retired has been reducing as well through the sinking fund process. Clearly in terms of rollover — debt being transferred into other debt — that applies again in the majority, where there is the very short-term debt incurred by the Authority and financed through the trusteed funds to which I referred earlier which are available to the province of British Columbia.

Mr. Chairman, I note also that the increase in borrowing limit for B.C. Hydro also occurred during the years 1972-75. We have to put it in context. We have to recognize that this has happened over a good number of years. In October of 1974 the increase was one-half billion dollars in borrowing limit for B.C. Hydro. In July 1975 that was raised a further $750 million, so that's a total of $1.25 billion dollars in that relatively short space of time. Bills of this nature come before the Legislature on a fairly consistent basis. I will take full responsibility, as I must and as I happily do, as the fiscal agent for British Columbia Hydro and other Crown corporations, when we are discussing the borrowing activities of British Columbia Hydro or British Columbia Railway, and I won't duck that responsibility at all.

I think the member would admit that his remarks did stray into other areas of responsibility for British Columbia Hydro which do not fall under my portfolio. I'm the fiscal agent, admittedly. Not an easy job; it's fairly tough job, in concert with being the fiscal agent for a number of other Crown corporations. I will answer all the questions that relate to that in my estimates, bills and sections of this kind. I can't — without offending the Chair — respond to other points raised with respect to a very large Crown corporation such as British Columbia Hydro.

I think the record should also show today that in general terms — I think the committee will find it of some use — the capital expenditure program for this fiscal year 1981-82 is estimated to be $458 million for electric generation facilities, $267 million for electric transmission facilities, $152 million for electric transportation facilities and $272 million for electric and gas distribution, and other services. In very general terms there's the very broad breakdown as to what the capital plans are on the part of British Columbia Hydro for this particular fiscal year.

HON. MR. GARDOM: I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Reading and Receiving Petitions

CLERK-ASSISTANT: Mr. Speaker, pursuant to standing order 73(6), in the matter of the petition presented to the House on May 21, 1981, by the hon. member for Atlin (Mt. Passarell), the said petition is irregular in the following respects:

1. In contravention of standing order 73 (5), the petition is not subscribed by at least three petitioners on the sheet containing the prayer of the petition.

[ Page 5743 ]

2. The additional signatures appended to the petition subscribe to a resolution not identical in terms of the prayer of the said petition.

All of which is respectfully submitted, Ian M. Horne, QC, Clerk of the House.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.