[ Page 6859 ]

CONTENTS

Routine Proceedings

Oral Questions

Tax increases. Mr. Stupich –– 6862

Cominco closure in Trail. Mr. D'Arcy –– 6862

Mr. Lank

Government fee increases. Ms. Sanford –– 6862

Cabinet tour to Kootenays. Mrs. Dailly –– 6862

Prospectors' assistance. Mr. Nicolson –– 6862

Tour of northeast coal project. Mr. Leggatt –– 6863

Northeast coal cost-benefit analysis. Mr. Leggatt ____ 6863

Nursing home fee increases. Mr. Cocke –– 6863

"B.C. Spirit" logo. Mr. Lockstead –– 6863

Social Credit Party advertising. Mr. Lockstead –– 6863

B.C. Hydro rates. Mr. D'Arcy –– 6864

Tabling Documents

British Columbia public accounts, March 31, 1981.

Hon. Mr. Curtis –– 6864

Comptroller-general's report

Hon. Mr. Curtis –– 6864

Estimates of Sums Required for the Service of the Province. Hon. Mr. Curtis.

Introduction –– 6864

Budget Address

Hon. Mr. Curtis –– 6864

Employment Development Act (Bill 26). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Special Appropriations Act (Bill 11). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Motive Fuel Use Tax Amendment Act, 1982 (Bill 23). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Housing and Employment Development Financing Act (Bill 39). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Corporation Capital Tax (Bank Rate Increase) Amendment Act, 1982 (Bill 38).

Hon. Mr. Curtis.

Introduction and first reading –– 6874

Tobacco Tax Amendment Act, 1982 (Bill 29). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Gasoline Tax Amendment Act, 1982 (Bill 22). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Social Service Tax Amendment Act, 1982 (Bill 30). Hon. Mr. Curtis.

Introduction and first reading –– 6874

Taxation (Rural Area) Amendment Act, 1982 (Bill 21). Hon. Mr. Curtis.

Introduction and first reading –– 6875

Finance Statutes Amendment Act, 1982 (Bill 36). Hon. Mr. Curtis.

Introduction and first reading –– 6875

Health Cost Stabilization Act (Bill 12). Hon. Mr. Neilsen.

Introduction and first reading –– 6875

Municipal Expenditure Restraint Act (Bill 32). Hon. Mr. Vander Zalm.

Introduction and first reading –– 6875

Home-Owner Grant Amendment Act, 1982 (Bill 17). Hon. Mr. Vander Zalm.

Introduction and first reading –– 6875

Tabling Documents

Remissions and refunds made under the authority of Taxation (Rural Area) Act.

Hon. Mr. Curtis –– 6878

B.C. Lotteries branch annual report, March 31, 1981.

Hon. Mr. Wolfe __ 6878

Pension (Municipal) Act annual report, December 31, 1980.

Hon. Mr. Wolfe –– 6878

Pension (College) Act annual report, August 31, 1981.

Hon. Mr. Wolfe –– 6878

Public Service Labour Relations Act applications, 1981.

Hon. Mr. Wolfe –– 6878

Purchasing Commission annual report, December 31, 1981.

Hon. Mr. Curtis –– 6878

Statement of unclaimed money deposits, 1981.

Hon. Mr. Curtis –– 6878

Estate Administration Act annual returns.

Hon. Mr. Curtis –– 6878

Assessment Appeal Board annual report, 1981.

Hon. Mr. Curtis –– 6878

British Columbia Railway annual report, 1981.

Hon. Mr. Phillips –– 6878

The House met at 2 p.m.

Prayers.

MR. HOWARD: I'd like to rise on a question of privilege, Mr. Speaker.

MR. SPEAKER: Order, please, hon. member. Perhaps we could do the introduction of guests and....

MR. HOWARD: So long as it doesn't interfere with the first opportunity, Mr. Speaker.

MR. SPEAKER: So ordered.

HON. MR. CURTIS: A number of ladies and gentlemen have travelled a considerable distance for the presentation of the budget address today. I will not ask the House's indulgence while I go through a long list, other than to say that may they all be welcome, particularly those who have come from eastern Canada, the eastern United States and Europe.

I would particularly like to ask the House to welcome Sheila Curtis, who is in the House this afternoon, and our daughter Sue.

MR. KEMPF: With us on the floor of the House this afternoon is Mr. Colin Seeley. It is my great pleasure to announce his presence. Mr. Seeley is president of the Omineca Social Credit Association. I would ask the House to make him very welcome.

HON. MR. BENNETT: I have not seen them both in the gallery, but I understand that the leader of the Conservative party, Mr. Brian Westwood, is here, and the leader of the Liberal party, Shirley McLoughlin. I ask the House to welcome them.

MR. KING: Since everyone on that side seems to have overlooked the fact, I would like to introduce Mr. Bernie Smith, provincial president of the Social Credit Party. He is not a financier or a banker, but he is a good old cop off the beat, and I think he should be acknowledged.

MR. SEGARTY: I would like to take this opportunity this afternoon to welcome to Victoria His Worship Mayor Tyrone Colgur for the city of Cranbrook. Mr. Colgur was kind enough to bring my daughter Helen and my oldest son Justin down to visit me for the week, and for that I thank him. I'd like the House to welcome him this afternoon.

MR. BARNES: If the Premier wishes I will defer, but in case he doesn't I will introduce one of our mutual friends: the mayor of the city of Vancouver.

MR. RITCHIE: Mr. Speaker, would the members please welcome an old friend of mine, Mr. Aart Spyker, from Central Fraser Valley.

MR. SKELLY: Mr. Speaker, there are a number of people on the front lawn of the parliament buildings who are here to attend a soup kitchen. Unfortunately they couldn't make it into the precincts, but I would ask the members to make them welcome and also to take into consideration their plight during deliberations in this session.

MR. STRACHAN: Mr. Speaker, from Prince George South I would like to welcome Mr. Larry Hart, Mr. George Dimor, Mr. Lorne Jackson and Mr. Doug Randall.

HON. MR. VANDER ZALM: Mr. Speaker, I would ask the House to welcome the president of the Surrey constituency, Mr. David Penn.

HON. MR. PHILLIPS: Mr. Speaker. I'd like to ask the House to welcome my wife Joan, who is here to listen to her first budget speech, and from the great constituency of South Peace River, the president of the Dawson Creek Chamber of Commerce, Phil Sykes.

HON. MR. HEWITT: Mr. Speaker, the Minister of Finance (Hon. Mr. Curtis) talked about people coming from far and wide, and I'd like to have the House mention Kathy Schweizer from Orlando, Florida, who's in the House today.

HON. MR. SMITH: Mr. Speaker. I see at least four mayors here from the capital region whom I would like to specifically welcome: Mayor Peter Pollen of Victoria, Mayor Couvelier of Saanich, Mayor Sealey of Sidney, and Mayor J. Rangel of North Saanich.

HON. MR. GARDOM: In the unlikely event — remote though it may be — that there's anyone in the gallery who has not yet been welcomed, I would bid them a special welcome.

MR. BARNES: Mr. Speaker. I want to apologize to the mayor. I'm so familiar with him that I forgot to mention that it's Mayor Mike Harcourt. I didn't put his name on it.

MR. SPEAKER: Hon. members, before we proceed to the member who is seeking the floor on, I think, a matter of privilege, I would like you to understand that we have guests on the floor of the House today because it is a ceremonial day. We have television cameras on the floor of the House because it is a ceremonial day. We will be turning up the lights, which are rather severe, and I trust it will meet with the members' approval. We will also have a short recess while the television crew come to take their stations, if that is the wish of the House. Is it agreed that we proceed on that basis?

SOME HON. MEMBERS: No.

MR. SPEAKER: Order, please. I hear some noes.

MR. BARRETT: Mr. Speaker. there's a presumption that the House has agreed to these proceedings before hearing a matter of procedure to be raised by my colleague the member for Skeena (Mr. Howard). That is why I've said no. I think this matter should be discussed, and we should hear the member for Skeena.

MR. SPEAKER: The objection is not on a question of leave; it is on the question of an opinion. Therefore I recognize the member for Skeena.

MR. HOWARD: Mr. Speaker, obviously that is exactly the question of privilege that I wanted to raise with you and with the House. This is the first opportunity I’ve had.

[ Page 6860 ]

The question of privilege is a very fundamental one. It relates to that fundamental matter of free and unfettered access by the public to the full proceedings and debates of this Legislative Assembly. The Mother of Parliaments at Westminster established the principle decades ago that the full proceedings and debates be made available to the public, issued by an official reporting staff under the authority of Mr. Speaker. I emphasize those two phrases: "full proceedings" and "official reporting staff."

You drew attention to the cameras, which I contemplated noting as a prelude to the question of privilege. Those cameras are here to record some of the proceedings of the Legislature; in other words, to record on a selective basis this afternoon. That's information that I obtained for myself. It was later officially confirmed that that was their purpose — and I'll deal with that in a moment or two. Let me say first that the cameras that are here and the other connecting electronic media equipment are the property of the Government Production Centre. Some of the personnel operating the equipment are employees of the Government Production Centre. The Government Production Centre is under the authority and control of the Provincial Secretary (Hon. Mr. Wolfe) and the deputy minister of that department, Douglas Heal, and this is the first time that the Government Production Centre has been in the Legislature for any purpose whatsoever.

They are not, Mr. Speaker, an official reporting staff as, say, the Hansard staff is an official reporting staff. I submit to you that the government, through the Provincial Secretary and Douglas Heal, is in a position to provide edited and juggled versions of what is proposed to be filmed this afternoon. To place this Legislature under such control, to place this Legislature basically in the pocket of government, is unconscionable and must not be permitted.

Under today's date and a time of 11:25 a.m., I received from Mr. Speaker's office a bulletin confirming that the cameras and other electronic recording equipment would be used selectively to record proceedings this afternoon. My question of privilege is that the age-old right of this Legislature to provide the public with free and unfettered access to the full — and I emphasize full — proceedings and debates of this Legislature is being interfered with by permitting the government-controlled Government Production Centre to film the proceedings this afternoon on a selective basis.

Before I identify the motion which I propose to found upon this question of privilege, I would urge Your Honour to not delay in making your decision, because a delay will play into the government's hands and permit the government controlled Government Production Centre to proceed to film selectively and thus do what I maintain my question of privilege does not permit them to do. If Your Honour needs time to examine this matter, I suggest that a short recess would perhaps be the course to follow, and that nothing further be permitted to happen this afternoon until Your Honour has had a chance to examine this question of privilege. If Your Honour finds that there is a case based upon that question of privilege, I intend to move that this House declares it to be in the public interest to have the full proceedings and debates of this House recorded for transmission by television by an official reporting staff under the authority of Mr. Speaker.

MR. SPEAKER: Order, please. On the same matter of privilege, if we are to enter debate we must first of all find the motion in order. Would the House permit the Speaker to review the facts of how the arrangements were made?

In reviewing the motion, and in trying to determine whether or not it is in order, I would like to remind the House of the procedure by which we have arrived at this point. Then perhaps the motion itself may be withdrawn.

MR. HOWARD: Mr. Speaker, I think reviewing how we got to this point is really going to be seriously embarrassing to Your Honour.

MR. SPEAKER: Order, please.

MR. HOWARD: I suggest that it's not appropriate in any event.

MR. SPEAKER: In a time of recess the Speaker must prepare himself, the House, its furnishings and proceedings in such a way that when the members come back together, and before the House can really express itself and its desires, certain provisions will be made. In making those provisions, if any new matters or procedures are deemed to be advisable, then in my humble opinion it is the Speaker's responsibility to review those matters with the members when we come together and see whether or not it is the House's wish that we proceed on those assumptions. On the matter of televising budget day, the House has for the past number of years, to my remembrance, continuously given assent only to the televising of the budget debate. That was the basis on which the Speaker had to proceed. Let me say that television coverage of the budget speech is a practice established by the House.

The number of agencies — may I please just acquaint you with the dilemma — requiring access to this coverage is constantly increasing. The ideal coverage requires at least three camera positions. This year five stations or networks expressed an interest in coverage here. The resulting scenario, as you can all understand, could be about 15 cameras on the floor of the House. So it was obvious to the Speaker at least that some kind of cooperation was necessary. Therefore some kind of common feed was necessary, but a common feed supplied by one network was not acceptable to some of the other networks.

Therefore a suggestion by Mr. Speaker to provide a Hansard-type coverage appeared to have some merit, and consultation with representatives from both caucuses showed the approach to be acceptable. The networks agreed, the unions agreed, and equipment and staff was seconded to Mr. Speaker for the day and is under Mr. Speaker's direction. The guidelines for today's television — if it is agreed to by the House — are simple. They are the same as the guidelines for Hansard. Those members recognized by the Chair will be on camera. Coordination is provided by the former chief of Hansard, who is eminently qualified. A common feed is available to all agencies requesting it, and the other arrangements regarding the scope of broadcasting are unchanged.

Now perhaps the House could give the Chair some direction as to how it wishes to go before I even look at the motion itself — some assistance.

MR. HOWARD: Assistance in what?

MR. SPEAKER: Order, please. I'll accept an opinion.

[ Page 6861 ]

HON. MR. GARDOM: Mr. Speaker, it has been the custom and the convention and the practice of this House under a number of administrations, including the former administration, that the budget speech would be televised. Mr. Speaker has informed the House of the arrangements that have been made, the proposed modus operandi, and the government finds those totally satisfactory. I would certainly make the point with all respect to the hon. member who raised this issue that his premise was farfetched and incorrect to say the very least. It is very clear from the remarks of Mr. Speaker that what we have here is a conduit process only. We wouldn't have anything else but that.

MR. HOWARD: Partly as to what the government House Leader said and partly as to what you had indicated as well, sir, the fundamental point is that this is the first time that the Government Production Centre has been in the chamber. The second thing is that that was not the subject matter of a discussion for approval. The third thing is that I discussed this question with you, Mr. Speaker, you will recall, in your home in Chilliwack from my home in Terrace on the telephone a couple of weeks ago, and I raised with you on the telephone the very danger that I raise today in my question of privilege — namely, that there is the opportunity for editing and juggling and manipulating what flows out of here. And you will recall, Mr. Speaker, that you indicated to me at that time that you had no idea what would happen to that television feed after it got out of this chamber.

Interjections.

MR. SPEAKER: Order. please. Hon. members, I will accept one further opinion; but the purpose, of course, is not to have the debate which could ensue if the motion is in order. I think it is not in order to have it in advance, but I'll accept the opinion of the member for New Westminster.

MR. COCKE: Mr. Speaker, you will recall that I met with you as chairman of our caucus, and at that point we discussed the whole question of Speaker-controlled television cameras in the House. I felt at that time and I feel now that had that been what we were facing at the present time.... I realize there is seconding, but the seconding is coming from the media centre, which is a totally government-control led organization. I did not get that impression when we had our discussion. So, Mr. Speaker, I believe that any comment that I might have made at that time would be irrelevant in the context of the situation I now find myself in.

MR. SPEAKER: Hon. members, the question before us is clearly this: the House has not heretofore spoken clearly on the matter of televising any of the proceedings of the House, Therefore any televising of any proceedings of this House by whatever agency is a matter of consent of the House itself. Without that consent, a matter of privilege does not even exist — because a matter of privilege assumes that some privilege of a member assumed and predicted by the standing orders is being contravened — and as a result the matter of privilege then becomes academic. Therefore, in the opinion of the Chair, what is required is an expression of the House itself as to whether or not in this instance television shall proceed or not proceed. It therefore becomes my responsibility to ask whether the House will express itself on that question.

MR. HOWARD: I need to challenge your ruling that there's no question of privilege...

MR. SPEAKER: Order. please.

MR. HOWARD: ...because. I submit, there is. I think Your Honour is wrong, and I challenge your ruling.

MR. SPEAKER: Order. please. There is a challenge to the ruling that a matter of privilege does not exist.

MR. LEGGATT: On that point....

MR. SPEAKER: There can be no debate on the challenge, hon. member, and I must accept the challenge to that ruling.

I ask the House: shall the ruling of the Chair be sustained?

Hon. members, as you know, the rules of the House require that during the taking of a division all strangers be required to leave the floor of the chamber. Is that our intention or shall leave be granted that they remain?

Leave granted.

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

YEAS — 29

NAYS — 26

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

MR. SPEAKER: Shall leave be granted for the televising?

MR. HOWARD: For the full televising, starting right now, Mr. Speaker, yes.

MR. BARRETT: You've given us some background, Mr. Speaker, and now you're asking for leave. It's not clear to me that the Speaker has absolute and complete control; it's not clear to me that every aspect of the sitting will be covered. As

[ Page 6862 ]

a consequence, Mr. Speaker, you're placing us in a position to vote for an agency other than the absolute control of the Speaker in every aspect of this House. Mr. Speaker, that impinges on our privileges. It makes it impossible to delegate any authority outside of the Speaker, and the Speaker gets such authority from a duly selected standing committee of this House. So asking for leave is abrogating the rights of this House and delegating authority to an agency that is not under absolute control of the Speaker, and that would be a precedent. Mr. Speaker, take some time to consider, but don't ask us to participate in giving leave of any of the absolute powers of this House through the Speaker and the standing committees.

Leave not granted.

Oral Questions

TAX INCREASES

MR. STUPICH: I have a question for the Minister of Finance. Can the minister confirm that the government has already imposed tax increases for 1982-83 of some $300 million to $500 million in the form of increases for government fees and user rates?

HON. MR. CURTIS: Hon. member, through you, Mr. Speaker, in view of the fact that I hope to be able to give the budget speech today and then subsequently participate in a variety of debate, I would take the question as notice.

COMINCO CLOSURE IN TRAIL

MR. D'ARCY: My question is to the Minister of Energy, Mines and Petroleum Resources. Mr. Speaker, for the first time in three-quarters of a century Cominco Ltd. is going to be closing its operations this summer in Trail and Kimberley, idling some 6,300 people. In the last two years the government has imposed water licence increases of 1,200 percent on this company which lost $20 million in its operations last year. I would like to ask the minister if the government did an economic impact assessment before the water licence increase was imposed on this hydroelectric energy intensive operation.

HON. MR. McCLELLAND: Mr. Speaker, there were a number of studies done both by my ministry and the Ministry of Finance.

MR. NICOLSON: Has the minister decided to table those studies?

HON. MR. McCLELLAND: No, Mr. Speaker.

GOVERNMENT FEE INCREASES

MS. SANFORD: Can the Minister of Finance explain why he has failed to impose any limit on government fee increases, such as the 25 percent to 50 percent hike in bus fares, the 30 percent hike in ICBC rates and the 30 percent hike in medicare premiums, in view of the 10 percent wage controls announced on February 18?

MR. SPEAKER: This question could undoubtedly take up the entire question period. Is it the intent of the House to entertain this kind of a question?

HON. MR. CURTIS: It is an all-encompassing question. We are now commencing the budget process. I suggest to the hon. member that there will be ample opportunity not only for me to answer questions from members opposite but for other members who have responsibility with respect to the corporations which have been mentioned in her question.

MS. SANFORD: Is he taking it as notice?

HON. MR. CURTIS: Yes.

CABINET TOUR TO KOOTENAYS

MRS. DAILLY: Could the Minister of Finance confirm that the cost to the taxpayer for the cabinet tour to the Kootenays last fall was in excess of $100,000?

HON. MR. CURTIS: Mr. Speaker, I would have to take that question as notice, because I do not have....

MS. BROWN: Don't you know anything, Hugh?

HON. MR. CURTIS: Mr. Speaker, as an hon. member in this House, I take the question as notice. The actual cost will be returned to the member who asked the question in due course.

MR. SPEAKER: Is there a supplementary question?

MRS. DAILLY: I wonder if I could redirect that question to the minister who was probably in charge. I had hoped that perhaps the Minister of Finance would have it at his fingertips, but he doesn't.

MR. SPEAKER: Hon. member, under the rules I don't know how we redirect a question taken as notice.

MRS. DAILLY: No, but I have a new question to the Provincial Secretary (Hon. Mr. Wolfe), who I believe was on the cabinet tour of the Kootenays and was generally in charge of protocol and so on for these tours. Could he give me an idea if the cost of that tour was in excess of $100,000?

MR. SPEAKER: I think that is a question of somewhat the same form as the one just taken as notice. Perhaps there's a new question.

PROSPECTORS' ASSISTANCE

MR. NICOLSON: Mr. Speaker, can the Minister of Energy, Mines and Petroleum Resources explain what consultation took place with B.C.'s recession-battered mining industry and the various chambers of mines throughout the province before the virtual elimination of the grub-stake allowance officially known as the prospectors' assistance grant?

HON. MR. McCLELLAND: Mr. Speaker, I'm not sure what the member means by virtual elimination. We have consultation with the mining associations around British

[ Page 6863 ]

Columbia and individual mines practically daily, and that will continue.

MR. NICOLSON: Is the minister aware that information has gone out through his department informing prospectors that the prospectors' assistance grant will not be available or that if it is available it will be substantially reduced this year? I believe the total level last year was maybe around $300,000.

MR. SPEAKER: Hon. members, the purpose of question period is to ask questions, not to bring information to the House.

TOUR OF NORTHEAST COAL PROJECT

MR. LEGGATT: My question is directed to the Minister of Industry and Small Business Development. Can the minister now advise the House the cost of his recent media tour of the northeast coal project? Specifically we'd like to know the cost of the helicopters, and also if you've got a figure for the total cost of that promotion.

HON. MR. PHILLIPS: Mr. Speaker, I'm glad the member asked that question and I'll be quite happy to get him the answer. We gave the media of this province the opportunity to see that great coal project. We're proud of that coal project, and we intend to show it to other members of the media.

I want to ask the member a question, Mr. Speaker. Is he against helicopters? They were against planes once. They said, "don't pave the highways," because they were against automobiles.

MR. SPEAKER: Order, please. The scope of the answer should not be beyond the scope of the question. The member for Port Coquitlam–Moody has a new question, I'm sure.

NORTHEAST COAL COST-BENEFIT ANALYSIS

MR. LEGGATT: The minister will have the opportunity of asking me questions after the next election.

In May of last year I asked the minister to table the cost benefit analysis on the northeast coal project and he advised that it hadn't been completed yet. Nearly a year has gone by and I wonder if the minister can bring the House into his confidence, Mr. Speaker, and tell us whether the cost-benefit analysis on the project is complete. If it is, would he tell us when we're going to see it?

HON. MR. PHILLIPS: Mr. Speaker, I want to tell you that the cost-benefit analysis is in its final draft, and in due course the member will have the opportunity to read the very positive report that shows the benefits of northeast coal for one and all in this province to see.

MR. LEGGATT: I have a further question, Mr. Speaker. In March 25, an order-in-council was passed authorizing the additional expenditure of $45 million for the purpose of northeast coal. Would the minister advise the House why he needed the $45 million without the authority of the Legislature and also whether he used part of the money to pay for the helicopters that went all over that thing.

HON. MR. PHILLIPS: Mr. Speaker, the member is full of bright questions today, but I would suggest that we're about to hear the budget speech from the Minister of Finance and when the crepe-hangers over there quit asking stupid questions.... Your question will be answered in due course.

NURSING HOME FEE INCREASES

MR. COCKE: Thank you, Mr. Speaker. Doesn't he add credibility to this chamber?

Mr. Speaker, I'd like to ask a question of the Minister of Health. Can the Minister of Health advise why his ministry has seen fit under present circumstances to punish senior citizens and the disabled by increasing nursing home fees 61.5 percent over the past two years? They were $195; now $315.

HON. MR. NIELSEN: Mr. Speaker, the member for New Westminster is completely incorrect when he suggests that the senior citizens of British Columbia are being punished. The services which are provided to the senior citizens by way of the Ministry of Health certainly would not be recognized by any intelligent human being as punishment. The fees which are required to be paid are not out of line and have been developed with every consideration possible. I think I am not required to answer the balance of the question.

MR. COCKE: Mr. Speaker, I would supplement my question by asking whether the minister cannot see the irony in the government's restraint program, in light of their 61.5 percent increase to these defenceless people?

MR. SPEAKER: Does the minister wish to answer? I did not hear a question there.

HON. MR. NIELSEN: I'll accept your interpretation.

[Laughter. ]

"B.C. SPIRIT" LOGO

MR. LOCKSTEAD: A question to the Minister of Transportation and Highways. Can the Minister of Transportation and Highways explain the priority of spending at least $150,000 to paint the "B.C. Spirit" logo on the side of the vessels operated by the B.C. Ferry Corporation? While the minister is on his feet, can he confirm that Baker Lovick, a Toronto-based firm, was paid more than $25,000 for consultancy fees and design work on the "B.C. Spirit" logo?

HON. MR. FRASER: In reply to the member for Mackenzie, as usual you've got your facts all mixed up. It didn't cost $150,000 to paint the "B.C. Spirit" logo on the fine B.C. ferries we have. I'll get you the figure, but it's somewhere in the range of $60,000.

Regarding the advertising agency, you should direct your question to another minister; that isn't part of my responsibility.

MR. SPEAKER: Order, please. Hon. members, in question period, as in debate, we direct our questions and our answers through the Chair, please.

SOCIAL CREDIT PARTY ADVERTISING

MR. LOCKSTEAD: Once again, could the Minister of Health confirm that once again advertising for the Social Credit Party is being paid for by the taxpayers of this province?

[ Page 6864 ]

HON. MR. FRASER: Would I confirm? No, I will not.

B.C. HYDRO RATES

MR. D'ARCY: Once again to the Minister of Energy. In the month of March B.C. Hydro went to the Utilities Commission to ask for a 31.5 percent hike in their rates that, by their own submission, was not based on increased operating cost but in fact on a policy directive from the government through to its wholly owned and controlled energy subsidiary. Has the government decided to recognize the economic facts of life and ask for reconsideration of this 31.5 percent increase in power rates imposed on industrial Hydro customers, considering the lack of jobs and employment in British Columbia today?

HON. MR. McCLELLAND: For the first time in the history of this province British Columbia Hydro is a regulated utility. It now has a board of directors representing every part of this province. As a result, Mr. Speaker, it now is, as many people in British Columbia have been asking for many years, much more responsive to the needs of the community. Far be it from me to move in an area where a free hand has been given to the British Columbia Utilities Commission in regulating our largest and most important utility.

Orders of the Day

Hon. Mr. Curtis tabled the public accounts of British Columbia for the fiscal year ended March 31, 1981.

HON. MR. CURTIS: Mr. Speaker, I move that the public accounts for the fiscal year 1980-81 be referred to the Select Standing Committee on Public Accounts and Economic Affairs.

Motion approved.

Hon. Mr. Curtis tabled the report of the comptroller-general in accordance with section 8 (4) of the Financial Administration Act, the interim financial statements.

ESTIMATES OF SUMS REQUIRED
FOR THE SERVICE OF THE PROVINCE

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 1983, including Schedule E sums required by Her Majesty to make good certain sums expended for the period ended March 31, 1981, and to indemnify the several officers and persons for making such expenditure, recommending the same to the Legislative Assembly.

Hon. Mr. Curtis moved that the said message and the estimates accompanying the same be referred to Committee of Supply.

Motion approved.

HON. MR. CURTIS: Mr. Speaker, I move that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

BUDGET ADDRESS

HON. MR. CURTIS: Mr. Speaker, in speaking to the motion now before the House, may I say that it is an honour to present to this House the British Columbia budget for the fiscal year ending March 31, 1983.

In spite of the inherent wealth and diversity of the British Columbia economy the repercussions of inflation, high interest rates and international recession are being felt throughout the province.

Members will know that ours is an open economy. Our linkages are outward, with a national and international economy. These links are the basis of our past and future prosperity, but they also represent a fundamental and intractable reason for the economic turbulence we face today. Our industries have grown, developed and competed in markets beyond this province and beyond this country. By forging these strong links we have contributed to and shared in the growth and prosperity in such parts of the world as the United States, Japan and Europe. We have become an integral and dynamic part of the international economic community. While we share in international growth and prosperity, we also share in the effects of market weakness and instability when they occur.

We could not avoid the current international recession. As with all regions and communities in North America, we are feeling the impact of high-interest-rate policies established in Ottawa and in Washington. We are feeling the effects daily and directly, through the crushing burden of interest rates on mortgages and personal and business loans; and indirectly, through the loss of sales opportunities and markets for our business. So it is that a province of boundless economic potential is in the midst of a period of layoffs, unemployment and uncertainty.

In assessing what can be done, we must have the wisdom to recognize those forces beyond our control, but similarly we must resist the temptation to say that nothing can be done. To be sure, we are only one of ten provinces in Canada, and Canada is only one of many industrial nations. It is also true that primary responsibility for domestic interest-rate policies and management of the national economy rests with the government of Canada. But I believe, and this government believes, that economic leadership and perseverance by a provincial government can make a difference.

Mr. Speaker, this government will not abandon the battle against unemployment against inflation and against high interest rates. We will intensify the fight. Our overriding goals will continue to reflect a commitment to provide rewarding employment for British Columbians, to maintain a dynamic and a prosperous economy led by a thriving private sector, and to provide public services of the highest quality.

These are basic and essential goals — goals never to lose sight of. But we have an open, outward-looking economy and our tools are limited. In last year's budget we had some choices. At that time the economy was strong and was expected to remain relatively strong. We could continue to provide a diverse array of high-quality public services, although it required restraint measures, and, just over a year ago, it required tax increases.

Today we have fewer choices. The cost of providing public services continues to escalate, revenue growth is down substantially, the economy is faltering and people are hurting. What was affordable last year is not affordable this year. Major tax increases are not an option, for they would impose a burden on our citizens and bring harm to the economy. I do not propose to increase a wide range of personal, consumer and business taxes for the new year.

The objectives I have set for the 1982-83 budget are the following: to provide economic stimulation and create employment, particularly in those sectors and communities

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hardest hit by world recession; to ensure that the burden of restraint and adjustment to current economic circumstances is shared fairly among all British Columbians; to maintain the high quality of public services provided by the government of British Columbia.

[Mr. Davidson in the chair.]

Mr. Speaker, the actions of one provincial government can make a difference. This budget reflects my commitment and the commitment of the government of British Columbia to provide economic leadership. This budget will make a difference.

We can, and we shall, provide economic stimulation to soften the blows struck by world recession and draconian interest-rate policies. We can, and we shall, ensure that the burden of restraint is shared fairly among all segments of the population, and not shouldered only by those without sufficient power to protect their incomes when conditions are adverse. Mr. Speaker, we can, and we shall, protect and preserve the high quality of vital public services available to all British Columbians.

As I indicated a few moments ago, we are prepared to say today that increased taxation is unacceptable, that major tax increases would impose a burden on the private sector, on those with fixed incomes, on the poor and on the unemployed. We are reaching the point beyond which heavier taxation would undermine our economic future by discouraging investment initiative, by removing incentives to work, and by penalizing those who take risks in pursuit of economic betterment.

We are prepared to say that government is large enough, that the public sector is consuming a sufficiently large share of our limited economic resources. We are prepared to say that increased public services can be provided only if government becomes more efficient or if savings are made elsewhere.

Finally, Mr. Speaker, we shall continue to resist the borrowing trap into which many other governments have fallen, seldom to emerge. Prudent families would never borrow to buy groceries, although many borrow for a new car, and most will borrow for a new home. This government adheres to similar rules of careful financial management. We shall not borrow to finance the ongoing operation of programs, although it is both appropriate and necessary to borrow for major capital purchases such as schools, hospitals and railway facilities.

The government of British Columbia has earned the highest credit rating — the AAA rating — in international financial markets. That rating represents a direct endorsement of responsible fiscal management by this government. It is a direct endorsement of the fact that only once since 1952 has a British Columbia government borrowed directly to pay for the operation of government programs. It is a rating that saves our people millions of dollars annually in reduced interest costs, and it is a rating we shall not risk for reasons of short-term expediency.

Achievement of our goals would be difficult even under more favourable fiscal circumstances. The challenge is doubly difficult in light of the currently weak revenue situation. Extraordinary measures have been and will continue to be necessary. But leadership is what government is all about. I am confident that with public support from all segments of British Columbia society we shall succeed. We shall do so fairly, firmly and with collective will and determination.

I can report, Mr. Speaker, that this budget is very much a collective effort and a collective statement from all members of this government. My colleagues have been fully supportive and deeply involved in many aspects of the budget process. Their cooperation was freely given and that has been an essential element. I pay tribute to them today.

Current economic circumstances need little elaboration. Far too many British Columbians are seeing firsthand the effects of high interest rates and weak markets for our products. Nevertheless it is helpful to look at the national and international economy, to which our provinces economic fortunes are closely linked.

Internationally, the war against inflation is being fought vigorously, particularly in the United States and the United Kingdom. In both countries the selected anti-inflation weapon has been a restrictive monetary policy — high interest rates. In both countries it is felt that the appropriate method to hold down prices is to reduce the ability of people and corporations to make major purchases. This has been accomplished by interest rate policies designed to make the cost of borrowing money virtually prohibitive.

Few will argue with the importance of arresting inflation, and few will debate that high interest rates have reduced demand in the economy, but there are many who question the insensitive way in which these policies have been applied. High interest rates hurt most those people and industrial sectors that rely heavily upon borrowed money and those with the least access to pools of money of their own — homeowners, would-be homeowners, farmers, fishermen, those working in the construction industry and small business people for whom the cost of borrowing to run their business has become unbearable.

The consequences of these policies are well known by the governments that practise them. They have recognized the cost and have made a conscious decision to accept that cost of driving down inflation. So vigorously, however, have these blunt and inequitable measures been applied that a major recession has been inflicted on both the United States and the United Kingdom. Canada's own economic policies bring no comfort, for we are following the same path. The federal government has pursued high interest rates in lock-step with those in the United States. We are told that high interest rates in Canada represent a deliberate policy to deal with inflation in this country. We are told that we really do have a made-in-Canada economic policy. If this is the kind of policy we make in Canada, then perhaps we should look elsewhere.

As an example. the Japanese government has succeeded in adopting interest rate policies distinct from those in the United States. The prime lending rate in Japan in February was less than 7 percent, compared to more than 16 percent in Canada and the United States. This has been achieved by saving more and consuming less that other countries. Japanese savings in 1980 represented some 31 percent of gross national product, compared to 22 percent in Canada. Higher domestic savings allow that country's capital needs to be met without the necessity of high interest rates to encourage and attract foreign capital. They have been able to finance their own economic growth, rather than relying on others.

Although Canadian savings are relatively high among western industrial nations, our young resource-economy requires massive amounts of capital to finance its development. When these capital needs are not met from our own savings, we have to look to others to fill the gap. Attracting international investment dollars, particularly in the hostile

[ Page 6866 ]

climate for investment created by federal government policies, has locked us into the use of high interest rates to compete for capital with the United States.

Mr. Speaker, I shall not debate Canadian monetary policies in this forum, except to say that there are alternatives to high interest rates. The Premier of the province presented a series of policy proposals to the economic summit of first ministers in early February. British Columbia's proposals called for government to show leadership by exercising fiscal restraint, by expediting major developmental and energy projects, by pursuing measures to enhance our transportation system, by promoting exports, and by providing low-interest development money through encouraging Canadians to save by way of federal-provincial tax-free bonds. We offered proposals that ultimately would have allowed some reduction in Canadian interest rates, while creating employment opportunities and continuing the battle against inflation in a less destructive manner.

There was little willingness on the part of other governments in this country, particularly the federal government, to pursue or examine these initiatives. Nevertheless, the government of British Columbia has proceeded with important measures, and this budget will outline yet more steps to be taken.

The consequences for British Columbia of high interest rates have been devastating. Business bankruptcies are increasing and the values of some investments, representing lifetime savings and hard work, are literally being wiped out. Added to these difficulties are the effects of the North American recession on our major industrial activities — forest-based industries, mining and manufacturing. Approximately 60 percent of British Columbia lumber, for example, is sold in United States markets to supply a housing-construction industry which is experiencing its worst slump since the Second World War.

We have kept a close watch on the economic situation during the past year. In 1981 the provincial economy performed surprisingly well, in spite of serious work stoppages and market deterioration in the second half of the year. Real economic growth is estimated to have been 2 percent, with business investment continuing to be a major source of strength, increasing an estimated 16.6 percent over 1980. Similarly, housing starts reached a record level of close to 42,000 units last year.

Unemployment rates continued to be relatively low, averaging 6.2 percent until August, when the effects of international recession began to have a serious impact. By February of this year the unemployment rate had reached 8.7 percent.

The effects of market weakness hit the lumber industry first and hardest, as lumber production in 1981 declined by 13 percent from 1980 levels. Lumber prices remain low and unemployment in the forest sector has become a serious problem in many communities. Continued high interest rates and the prolonged United States recession have created unemployment and economic hardship throughout the province.

The situation has been aggravated by the recent pattern of inflation and wage settlements. British Columbia's 14.3 percent inflation rate was a primary factor behind a substantial increase in settlements in 1981. Settlements in the private sector averaged 14.2 percent, while those in the public sector escalated by 14.4 percent.

With the serious and extensive weakening in economic conditions, many employees in the private sector have accepted wage and salary rollbacks or shorter work weeks as a way of avoiding layoffs for an unfortunate few. This recognition that low prices and production levels cannot support high levels of employment unless there are limitations on wage increases is both responsible and commendable. It underscores a general attitude of fairness which I believe appeals to most British Columbians — a willingness for many to make minor concessions so that a few will not carry an inordinate burden.

Although the short-term economic situation is troublesome, we must not lose sight of the great opportunities in British Columbia's future. Our strong and varied resource base will continue to provide rewarding employment for British Columbians: through our forest resources; our mineral wealth our diverse and abundant supplies of energy; and the natural magnificence and magnetic attraction of our province to visitors from around the world. The problem we are facing is serious, but it is short-term. National and international recovery will come, inflation is beginning to moderate, and interest rates are expected to move downward.

Although real economic growth for British Columbia is forecast to reach only 1.4 percent in 1982, it is projected to rebound to an average 3.5 percent over the period 1983 to 1986 inclusive. This compares with the Canadian economy as a whole which is expected to experience a decline of 0.5 percent in 1982 and to average 3.4 percent growth over the 1983 to 1986 period.

Inflation this year should decline to the 10 to 11 percent range in British Columbia, compared to last year's 14.3 percent. With inflation in the United States now moderating, and with the recent weakening of international oil prices, the prospects are good for a continued improvement in the rate of inflation during the next few years. Responsible economic management by all governments in Canada is essential, however, if these anticipated gains are to be realized.

Speaking of the province, Mr. Speaker, to a considerable degree the province's finances are dependent upon major developments in the economy, most of which in turn reflect our close relationship with the national and international economy. Revenue from income taxation falls if unemployment rises and economic activity declines. Growth in sales tax revenue weakens if individuals and businesses are cautious and restrain their purchases of taxable items. Revenue from fuel taxes falls or rises depending upon conservation efforts and the level of activity in industries which consume large quantities of fuel.

The factors affecting revenue from resources are similar, because this revenue represents a return to the owners of those natural resources — all British Columbians — over and above the costs of extraction and processing. When markets are weak and prices for resource products are low, revenue from this source will be correspondingly low. Because markets for resource products are extremely volatile and because government sometimes forgoes revenue to maintain employment in resource sectors, such revenue is subject to exceptionally wide variations.

Looking at the expenditure side of the ledger, a somewhat different picture emerges. Although program costs inevitably expand to meet the needs of a growing population, short-term economic weakness does not lead to reduced demands for government services. Health programs, for example, must respond to citizen needs for health care services — needs which bear little relationship to existing economic conditions. Similarly, the demands on the educational system

[ Page 6867 ]

remain the same, or may even increase, during periods when job opportunities are more limited.

There are, in fact, many government programs which require increased expenditure during difficult economic times. Social assistance programs such as GAIN must fill a greater need when the economy falters. In addition, the government has a key role to play in providing jobs and economic stimulation to counter short-term unemployment problems. As I mentioned earlier, the provincial government alone cannot influence international markets, but it can provide some stimulus where it is most needed.

Looking at the fiscal year which ended March 31, 1982, I am pleased to be able to report to the House that in spite of revenue weakness and expenditure pressures greater than anticipated, we've been able to meet our fiscal objectives for the year. This has been possible only because a number of steps were taken to increase revenue and a rigorous expenditure restraint program was put in place. Together these actions produced savings of approximately S150 million.

In reviewing the 1981-82 fiscal year one observes that forest revenue was particularly weak, reflecting the major strike and severe market deterioration which occurred during the year. Forest revenue was 64 percent lower than the level of the previous year and only one-fifth of the 1979-80 level. In fact, as I have indicated repeatedly in our quarterly financial reports, revenue from natural resources has been the main factor in the erosion of our revenue position during the last two fiscal years.

We have seen total revenue from natural resources fall from $1.3 billion in 1979-80 to $613 million in 1981-82 — a decline of 53 percent. This alone demonstrates the volatile nature of natural resource markets, but it also reflects the actions of the federal government, which has taken a larger share of energy revenues as part of the national energy program. Since that program was introduced in 1980, the retail price of natural gas in Vancouver has risen from $2.48 to $4.35 per thousand cubic feet. Of this increase, more than 60 percent has been taken by the federal government, while the government of British Columbia has received less than 5 percent.

Taxation revenue was particularly strong early in 1981-82, although a number of serious weaknesses developed later in the year as a result of poor economic conditions. The most pronounced effects were observed in sales tax collections. After adjusting for inflation and the higher tax rate, sales tax revenue during the second half of the year actually fell below the level of the previous year.

One positive revenue development was a significant upward revision to the province's personal income tax entitlement under the federal-provincial tax collection agreement. Hon. members will know that personal and corporation income taxes are collected for the province by the federal government, with interim payments made until final tax collections are assessed and appropriate adjustments occur. A major upward adjustment of $281 million was received in 1981-82 in respect of tax collections for earlier years. Late payments such as this have resulted in interest-free loans to the federal government, and last year alone represented a loss to the province of $69 million. The fact that such a major adjustment payment was necessary reinforces British Columbia's view that the tax collection arrangements with the federal government are inadequate and should be restructured.

Overall operating revenue on a cash basis is estimated to have reached S6.66 billion for the 1981-82 fiscal year. This represents an increase of 15.1 percent from the previous year and is approximately one-half of 1 percent more than the forecast contained in last year's budget plan. I must stress that it was only through careful monitoring and additional revenue measures that it has been possible to stay within the 1981-82 budget plan.

Once such revenue initiative was the review and adjustment of literally hundreds of fees charged by the government for a variety of licences and services. In many cases the government of the day has been providing services such as safety inspections and motor-vehicle title searches for fees well below the cost of providing the service. The common element in all cases has been a service provided to individuals or organizations at a cost that has been largely or partially borne by the general taxpayer. The central objective of the fees and licences review has been to shift a greater proportion of the cost of such services to the recipient of the service and away from the taxpayer.

I must stress that the cost of the program has not changed as a result of this policy. The only change has been a reduction in the amount of costs recovered from taxpayers and an increase in the proportion of costs recovered from users. In this way we have been able to supply additional taxpayer dollars to the funding of universally available public services such as health and education.

A further significant revenue initiative was the increased rental charged to utilities for the use of provincial rivers and river valleys for electricity generation purposes. The increase in water rentals was intended to bring the price of electricity more in line with oil and natural gas prices and to reflect to a greater degree in electricity prices the cost of hydroelectric power projects. British Columbians place a high value on the magnificent heritage of rivers and river valleys for recreation, farming and wildlife purposes. It is quite appropriate that these values be reflected in the price of electricity and passed on to those who benefit from its use.

Some critics have suggested that government fees should not have been increased. that poor economic conditions made it a bad time for such increases. Let us be clear that these critics are also saying, in effect, that it was a good time to place a greater burden on the general taxpayer. That, I submit, is very questionable logic. In total, adjustments to fees, licences and water rentals brought in revenue of more than S50 million in 1981-82. In the absence of these measures. total operating revenue would have been an estimated S6.6 billion. slightly below the projected figure contained in last year's budget.

Reflecting for a moment. Mr. Speaker. I recall that at this time last year, approximately. members of the opposition and some individuals in the news media were repeatedly accusing me of deliberately underestimating government revenue. Today I am reporting that those careless and erroneous charges have been refuted by the facts. Objective observers — and there are many — would be interested to read in Hansard the many comments made by the members opposite on this topic during the spring of 1981.

Looking at he expenditure side for 1981-82 reinforces the earlier comment that while a slumping economy can sharply reduce revenue. expenditure pressures continue and may even increase. Last year's budget plan forecast total operating expenditure of S6.61 billion. I now estimate that actual spending reached S6.75 billion. Unanticipated expen-

[ Page 6868 ]

diture pressure was particularly acute in the Ministries of Health and Forests.

Now, Mr. Speaker, 1982-83. The lean financial picture that I have described for 1981-82 is expected to carry on well into the current fiscal year. In fact, 1982-83 revenue growth will be down significantly from last year — in large part because of the economic situation, but also because of reduced federal contributions for health and post-secondary education.

This year alone British Columbia faces a $122 million reduction in federal contributions for health and post-secondary education programs. During the next five years the reduction will reach almost $700 million.

Hon. members will recall that in the November 1981 federal budget the Minister of Finance for Canada presented a proposal to reduce transfers to the provinces. The 1982-83 reduction for British Columbia was estimated at that time to be $108 million, although the federal minister stated quite clearly that negotiations would follow.

Mr. Speaker, since the beginning of 19811 or my officials attended 25 meetings on federal — provincial fiscal arrangements, 12 of them since the federal budget was tabled. In spite of genuine attempts by provincial governments to find a compromise, the federal government failed to show any flexibility. There was no negotiation in any sense of the word. In fact, the anticipated revenue loss to British Columbia is now greater than the original estimate contained in the federal budget.

Reduced contributions from the federal government, coupled with the downturn in the economy, have limited considerably my budget choices this year. In the absence of other initiatives, a continuation of prevailing revenue and expenditure trends would have led to a substantial fiscal gap in the 1982-83 fiscal year. Our projections show, for example, that if no corrective steps were taken, the gap between revenue and expenditure in this new year would have exceeded $1 billion.

Closing such a gap with revenue measures would have required, for example, an increase in the social service tax rate from 6 percent to 11 percent. In terms of expenditure, this is equivalent to the entire cost of operating the Ministry of Education in the year just ended. These are dramatic and unlikely examples, but they show the magnitude of the problem and the limited options available.

The budget framework for 1982 is, therefore, one of restraint. But it is restraint with a difference. It is restraint which serves the goals of fairness and equity among British Columbians. It is restraint which serves the goals of continued financial responsibility in government. It is restraint which creates rather than suppresses opportunity by allowing us to do more with less.

The centrepiece in the budget framework is the two-year economic stabilization program announced by the Premier of British Columbia in February. The program contains a number of elements which together represent a responsible approach to restraint. It is a program of economy for government which is far more sensitive than the severe and heartless program of restraint so bluntly imposed on the private sector by high interest rates and sagging markets. Let me review briefly the major elements of the program.

First, the program puts in place an overall 12 percent limit on spending increases by the provincial government, municipal governments, school districts, hospital districts and a host of other provincially funded agencies. While some program-by-program flexibility is both necessary and desirable, we shall adhere to the overall guidelines.

Second, the program includes the compensation stabilization program, which applies compensation guidelines to all provincial public-sector employees. The program will be administered by an experienced and impartial commissioner, Mr. Edward Peck, and includes a basic inflation-protection factor of 10 percent for the first year. Provision has also been made in the first year for an additional 2 percent for special circumstances, such as improved productivity performance or skill shortages, and for a possible further 2 percent adjustment to be added or subtracted to correct serious distortions resulting from past compensation experience. Salaries of the most highly paid public-sector executives are frozen pending a review of compensation relationships among public- and private-sector executives.

Mr. Speaker and hon. members, we too have a direct responsibility for showing leadership. Members of this Legislative Assembly received, by formula, an 11.9 per cent pay increase on January 1 of this year. During this session members will be asked to approve a legislative amendment which will roll back that increase to 8 percent in 1982. I am hopeful that this proposal will receive the unanimous support of this House.

The compensation stabilization program is designed to meet several objectives, the most important of which is the need for an equitable sharing of the burden of restraint imposed upon British Columbians by the world economic situation. Employees in the private sector are all too aware of the sometimes insensitive and unyielding way in which the marketplace restrains — through layoffs, unemployment and business bankruptcy. Responding to these realities, many employees have accepted wage and salary rollbacks or shortened work weeks as a way of assisting employers to hold on to markets and avoid widespread job loss. Such pressures are not present in the public sector, particularly if governments are willing simply to borrow and tax to pay an ever-increasing wage bill.

Shifting to the taxpayer the cost of large wage settlements is unacceptable to this government. So we have chosen instead to put in place a program that will ensure equity between employees in government and employees in the private sector.

By restraining growth in public-sector salaries the need to lay off public employees to meet overall expenditure objectives will be minimized. Wages and salaries directly or indirectly account for more than 60 per cent of government expenditure. Achievement of expenditure restraint in the absence of limitations on compensation increases would have required major social-program reductions and the loss of jobs for many of our employees — an unattractive prospect for the government, its employees and the taxpayer.

In order to obtain authority for the compensation stabilization program, I shall introduce legislation which defines the scope of the program, sets the framework for the guidelines and provides for the establishment of the office of the commissioner. Upon legislative approval, detailed regulations relating to the administration of the guidelines will be issued. Public opinion has been sought and will be reflected in the legislation, the guidelines and the regulations.

A third major element of the economic stabilization program will include measures to stimulate the economy and create much-needed jobs. Economic stimulation requires that the government put more money into the economy than it

[ Page 6869 ]

takes out in the near term. We must take a leadership role in maintaining the level of demand in the economy, but it must be done in a financially responsible manner.

To repeat, we shall not resort to borrowing for operating purposes in order to accomplish this. Rather, I shall present a program involving more rapid expenditure of moneys now held in special purpose funds, combined with a program of capital spending, for which financing over a longer period is both necessary and appropriate.

Hon. members will note that the estimates of revenue and expenditure for the current year are presented on the new basis of accounting, which I announced in last year's budget and applied in subsequent quarterly financial reports. The new policy adopts generally accepted accounting principles and is part of our overall program to reform and update government financial practices. Detailed discussion of he changes will be found in a background paper to this budget.

The budget plan I am proposing today projects general fund expenditure of $7.23 billion, balanced by revenue of the same amount.

A broader, more comprehensive perspective is obtained from consolidated revenue and expenditure figures, bringing general fund revenue and expenditures together with that of special purpose funds and accounts. On this basis, revenue for the year is projected to be $7.33 billion, an increase of 7.2 percent from last year.

This is substantially less than the 10 to 11 percent rate of inflation projected for this year, and it is a significant real reduction in revenue from last year.

The estimate of consolidated expenditure for 1982-83 is $7.69 billion, an increase of 8.1 percent from actual expenditure in 1981-82. This is well within the 12 percent expenditure growth limit established by the economic stabilization program.

Mr. Speaker, the difference between consolidated expenditure and revenue for the current year is $358 million. The budget I am tabling here today injects $358 million more into the economy than we are withdrawing in revenue.

Directly and indirectly this stimulus alone will create some 9,000 jobs in British Columbia. It is an economic stimulus to assist British Columbians during this period of short-term weakness.

Further stimulation will be provided by the massive program of capital spending the government has underway. Two months ago, I announced a review of capital spending by the government. The purpose of that review was to assess approximately 600 capital projects, or requests for approval of capital spending. We now have completed that review, having paid special attention to the needs of certain communities for projects that will create employment and bolster a sagging construction industry.

Projects now underway, or beginning this year, represent a total capital spending program of S3.6 billion. Of this total, $1.2 billion will actually be spent during the 1982-83 fiscal year, providing close to 40.000 jobs. Included in this amount are northeast coal development, British Columbia Place, a light rapid transit system for the greater Vancouver region. schools, hospitals, courthouses and other capital projects — projects that will provide jobs for today while building our economic and social capital facilities for tomorrow.

The northeast coal project merits special mention. It deserves comment because of its many critics in the opposition and because this project is such a driving force in our economy. I want to spend a few moments with it. Northeast coal alone will account for nearly one full percent of British Columbia's real economic growth and will create 5,800 jobs in the current year. That is an essential contribution to our economy today, and it will be an engine of northern growth and development for years to come.

Mr. Speaker, I challenge the critics of this vital project to come forward and tell us they would cancel the northeast coal development. I challenge the critics to show a better way to stimulate the economy today, while securing our economic future.

I cannot overemphasize that we are able to provide this major stimulus without borrowing to fund ongoing programs. It is an accomplishment made possible because this government has, in the past, funded programs responsibly. We have not allowed the provincial finances run down to the point where there would be no funds available to deal with the difficult situation such as we face today. Rainy-day money has been set aside in special purpose funds and in the revenue surplus account. This careful financial management combined with the economic stabilization program allows us to maintain essential social and economic programs as well as to provide for the economic stimulation now called for.

[Mr. Speaker in the chair.]

As I announced in last year's budget, in future we shall stabilize revenue and expenditure by means of the resource revenue stabilization fund. I shall therefore table legislation which formally creates this special government fund. At the same time most other special funds will become accounts of the general fund, their purposes to remain unchanged. The resource revenue stabilization fund will build up a contingency balance in periods of strong economic growth to be used to counter future economic and financial weakness. This special fund will become a central element of responsible financial management in British Columbia in the years ahead.

The budget framework I have outlined will enable us to reach our goals of providing economic stimulation, of spreading the burden of restraint fairly among all British Columbians, and of maintaining the high quality of public services in our province. The fiscal course I am charting today is narrow: there will be little room to manoeuvre if revenue or expenditure deviate negatively from the fiscal plan. At the end of this fiscal year our cash balance is expected to be only slightly more than the revenue collected by the province in one week. If the economy fails to respond as we are anticipating. more difficult decisions will be required, but I am confident that the toughest decisions have been made and that the worst is over.

Mr. Speaker. the task of compiling the 1982 expenditure budget has been complex and has involved man\, difficult decisions. Without the cooperation and support of my cabinet colleagues. It would have been impossible.

In all expenditure areas, three basic questions were asked. Firstly. how can we deliver a better service at lower cost? Secondly. do programs provide a service fairly, efficiently, and to those with the greatest need for the service'? And thirdly, does the program represent an appropriate use of limited resources during a difficult year in the economy?

The measures taken have been balanced and realistic. Programs that support citizens most in need have been fully funded, while programs not meeting the test of necessity during a tough year have been trimmed back. In order to achieve their objectives in the current year, ministries will

[ Page 6870 ]

have to operate at maximum efficiency. Program managers and others in British Columbia's dedicated and capable public service will be challenged to the limit. I am confident that the challenge will be met positively and with enthusiasm.

The expenditure guideline contained in the economic stabilization program called for a limit of 12 percent on expenditure increases in 1982-83 over last year. Most programs will meet the guideline, and those that exceed it will be balanced by programs where expenditure will increase less than 12 percent. Overall government expenditure growth will be within the prescribed limit.

I shall review briefly some of the major programs that are to meet the 12 percent guideline. First, grants to school districts will be limited to a 12 percent increase. School enrolment in British Columbia has been declining in recent years, while the number of teachers has continued to rise. The average number of pupils per teacher has declined from 22 in 1971 to 17 in 1981, a 23 percent reduction. Our teachers are better paid than those of any other province and our provincial educational system now stands as one of the best in Canada.

Although further improvements are possible, it will not be a simple matter of spending more money. Rather, we must harness more effectively and innovatively the talents of our professional educators. I am confident that they, as well as other professionals in the public sector, will meet the challenge of restraint with continued dedication and commitment to excellence in our schools.

While expenditure restraint in the education area is clearly essential, this budget also makes provision for a program of assistance that will reduce the burden of education costs on local property tax payers. This program, announced last month by my colleague the Minister of Education (Hon. Mr. Smith), will bring about a fundamental restructuring of the education financing system in the province and provide a substantial reduction in residential property taxes for school purposes.

Mr. Speaker, in 50 of the province's 75 school districts, school taxes in 1982 will be less than they would have been under the former system. For example, a typical taxpayer in Vancouver will pay $121 less, in Vernon $108 less and in Terrace $144 less. Under the old system, residential property taxes provided 12 percent of the total cost of education. Under the new system the residential taxpayer will shoulder an even more modest share of these costs — less than 10 percent.

The provincial government will assume responsibility for the financing of some 90 percent of school operating costs. In addition to paying directly for 75 percent of these costs, the province will continue to contribute to education financing by way of the homeowner grant, payments to school districts for debt servicing, and contributions to the teachers' pension plan. The total contribution of the government of British Columbia to public school education in the 1982-83 fiscal year will amount to approximately $1.65 billion, or $3,400 per student enrolled. Under this financing arrangement the provincial government will assume responsibility for nonresidential school taxes. A uniform non-residential mill rate will be set by the province, although no increases will be made in 1982 for those school districts where the 1981 mill rate was below the uniform rate of 55 mills announced for 1982. As a result, non-residential mill rates will decline in areas where previously they were comparatively high and will remain at last year's level in areas where they have been relatively low.

In addition to property-tax relief for those carrying the greatest burden, it is appropriate for the achievement of equity that those paying minimal property taxes make an increased contribution. I am therefore announcing two other changes to provincial property taxes.

First, there will be an increase from $75 to $125 in the minimum property tax payable in British Columbia. The new minimum, which is approximately $10 a month, in our view represents an extremely small minimum contribution on the part of most property owners in this province. The minimum for seniors and others eligible for the supplementary homeowner grant will remain at $1.

Secondly, the rural property mill rate, which has been set at 10 mills since 1917, will be raised to 12 mills for the 1982 taxation year. For the average rural taxpayer this will mean an average monthly tax increase of $1.60.

Finally, Mr. Speaker, I am establishing today an education cost stabilization account, from which a total of $75 million will be expended for purposes of restraining increases in school property taxes.

Still within the area of education, operating grants to colleges and universities also will be restrained. Here again British Columbia has funded and developed a college and university network which ranks with the best in the country. Our advanced educational system offers diverse opportunities, provided through internationally reputable universities and research facilities, community-based colleges and institutes. The average operating cost per full-time equivalent student in British Columbia's colleges and universities has risen from $2,560 in 1971 to $7,227 in 1981 — an expenditure increase well ahead of the rate of inflation over the same period and well ahead of most other provinces in Canada.

At the same time, Mr. Speaker, tuition fees at British Columbia colleges and universities are among the lowest in Canada and actually have declined by 34.9 percent after accounting for inflation over the past decade. Similarly, the share of operating costs covered by student tuition fees has declined substantially in recent years. During the early 1960s student fees provided more than one of every five dollars required to operate our colleges and universities. Today, less than one of every ten dollars comes from student fees.

During a difficult year it is necessary and appropriate to limit operating grants to colleges and universities. I must emphasize, however, that the government pays the full cost of servicing the debt associated with the capital facilities of colleges and universities. These commitments must be met and will be met.

A number of important restraint initiatives also will apply to provincial programs of assistance to local government. In the past there have been several different programs involving expenditure to or revenue from local government. This has resulted in an excessively complicated administrative structure which will be simplified and improved this year.

In particular, the Revenue Sharing Fund, which was introduced in 1977 by this government to provide an assured and predictable method of sharing provincial revenue with local government, will be broadened to include several additional programs. The sewerage assistance program, the utility underground program and the restructure assistance program will be financed now from the Revenue Sharing Fund.

Most significantly, the requirement that local government pay a share of social welfare costs will be phased out over two years. This will result in an important cost saving to local governments. For example, the saving to municipalities will

[ Page 6871 ]

be $26.6 million in 1982-83 alone. In the future these costs will continue to be carried by the senior levels of government. With this program consolidation it now will be possible to reduce the diverse and costly financial interaction between the province and local government. Program efficiency and service to the taxpayer will be improved.

Mr. Speaker, payments to local government under the Revenue Sharing Fund have increased by an average annual rate of 23 percent since 1979-80. That's a generous increase by any standard — far in excess of the 9 percent growth in provincial revenue during the same period.

It should be emphasized that the revenue-sharing formula does not require local government to share in provincial revenue losses resulting from cutbacks in federal transfer payments. Therefore, 1982-83 payments into the Revenue Sharing Fund will again grow faster than provincial revenue, although the changes in funding arrangements I have outlined will reduce unconditional transfers to municipalities. Local property tax payers will be protected from substantial tax increases by the application of the 12 percent guideline to the budgets of local government, including school districts.

Mr. Speaker, this government's commitment to a high quality of life in our urban areas is by no means restricted to programs to assist local government. The province has taken a direct leadership role in a number of key urban development areas. The Premier last week confirmed that Expo '86 will go ahead. It will include the Canada Pavilion on Pier B-C, later to become a trade and convention centre that will bring significant lasting benefits to British Columbia.

The light rapid transit system for the greater Vancouver region represents a historic undertaking dedicated to improving the movement of people within this large and growing urban area. British Columbia Place will make a major contribution to life in the city of Vancouver by providing housing accommodation for a broad range of income groups and by giving British Columbians a stadium that will serve athletes and spectators alike for many years to come. Similarly, Mr. Speaker, the new Annacis Island crossing over the Fraser River will substantially ease traffic congestion in the southern part of the Vancouver urban region. While grants for transit will be held to less than 12 percent, I've been assured that the high quality transit services in numerous centres around the province will not be jeopardized by this restraint measure.

In some program areas the government commitment to vital services can only be met by expenditure growth in excess of 12 percent. The provision of policing services to smaller communities, for example, has been threatened by reductions in federal expenditure commitments for RCMP contracts. This government is not prepared to sacrifice community safety and protection, leaving us little choice but to provide funds that will replace those withdrawn by Ottawa.

Similarly we will not compromise the high standard of services to the needy and the elderly in British Columbia. In fact, the troubled economy will place additional expenditure demands on such programs of assistance as GAIN, Pharmacare and services for families and children. This expenditure is essential; therefore the increase will exceed 12 percent.

Mr. Speaker, governments often are criticized for failing to maintain high standards of health care. In this regard may I say that the entire health-care delivery system of British Columbia occupied a great deal of time and received careful consideration during the past year. The Minister of Health (Hon. Mr. Nielsen) has consulted extensively with Treasury Board and with me as Minister of Finance. I want to commend and express appreciation to the Minister of Health for the manner in which he has contributed to British Columbia's first-class health care system.

Frankly, sir, it is mv view that, as a government, we have not fully emphasized the extent of the health services which are offered to the people of this province. One need not took far beyond our provincial boundaries to appreciate the fundamental principle to which we adhere. That principle is this: that no individual and no family in British Columbia will face devastating costs as a result of illness or injury. Health care in this province. In every respect, is among the best to be found anywhere in the world. This government undertakes to maintain the integrity of that service. Expenditure on health care will exceed the 12 percent guideline. In particular, the government will continue to commit substantial resources to priority health-care areas. For example, the budget proposes a 24.6 percent increase in spending on the long-term care program. With approval of this funding it will be possible to provide 675 new long-term beds. Despite our revenue constraints, necessary improvements in the health delivery system must proceed. Offsetting economies must be made elsewhere in the budget so that vital health services to British Columbians can be maintained.

In order to meet this undertaking I propose a special appropriation from which to maintain the quality and integrity of the health-care system in this period of sluggish revenue growth. As provincial revenue recovers, it is my intention that support for the health-care system will again be met from the normal operating revenue of the government. But for the current year I am creating the health cost stabilization account for the purpose of protecting the standard of health care in this province. This fund will provide $77.8 million to help cover the cost of medical and hospital service for all British Columbians. In some activities, Mr. Speaker, significant additional expenditure is required when it is not appropriate for the cost to be home by the taxpayer. In the area of fish and wildlife resource management, expenditure increases will be offset by enhanced revenue from the sale of fishing and hunting licences. Again, this reflects a desire on the part of this government to have a greater proportion of the costs for services such as these shifted from all taxpayers to those who primarily benefit from services provided.

Turning again to economic development, the focus will be on provision of short-term stimulation of employment, consistent with building the long-term economic base of our province. I discussed at some length the way in which this budget provides for an overall expenditure injection into the economy — through consolidated expenditure exceeding consolidated revenue through the current year, and through a program of capital construction that will create employment and assist the slumping construction sector.

In particular, provision is being made for a number of direct employment initiatives. Today I am proposing to establish a special account, the employment development account with an initial allocation of $132.9 million. The account will be managed and coordinated by a special cabinet committee on employment development which will start immediately to set priorities and to expedite the necessary program initiatives. This account will bring together into a single policy framework a number of programs from different ministries, in addition to receiving $25 million in new funding.

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The new cabinet committee will give priority to training programs, the objective being to prepare people now for the employment opportunities that will emerge as the economy recovers and a series of major projects go forward. Effective manpower planning and training programs will be a critical element in avoiding skill shortages and giving maximum employment opportunities to British Columbians in the years ahead. Short-term employment opportunities will also be created by the Ministry of Forests programs to protect and enhance the forest resource base. Silviculture and forest protection will both receive a substantial expenditure boost.

It must be stressed that this is only a first step toward a major employment development program which will include initiatives in job creation, housing, forest resource development and human resource development. For every program where expenditure exceeds the 12 percent guideline, there must be other programs where expenditure falls short of the guideline. Ministries where expenditures will be restrained to increases below 12 percent this year include Transportation and Highways; Energy, Mines and Petroleum Resources; and Agriculture and Food. In addition, Mr. Speaker, I am proposing that the $26.1 million annual installment payment required to retire the debt incurred by the previous government in 1975-76 be refinanced. This is a year of restraint, during which it is more appropriate that such expenditure be directed to employment creation and social programs. I shall therefore table legislation authorizing the government to refinance the 1982 debt retirement payment.

Restraint involves more than reductions in particular programs; it also involves improved overall government efficiency. Across government, steps are being taken to improve the efficiency and effectiveness of programs. The provisions of the Financial Administration Act implemented this year will provide new and improved approaches to financial management and control. The estimates of revenue and expenditure that I've tabled today have also been restructured to provide an improved vote structure, to be more informative, and to provide superior accountability for expenditure of public funds.

We shall also continue to implement cash management and investment policies that will ultimately offer considerable savings to taxpayers. Interest earned by careful cash management and investment of public funds totalled more than $100 million and saved taxpayers millions of dollars in 1981-82.

I outlined earlier the high priority given to containing the growth of government and limiting the tax burden on British Columbians. The economic stabilization program will hold in check the cost of government cost savings that will be passed on to citizens through restraint on tax and government fee increases.

There will be no increase in personal or corporation income taxes this year. We will continue this year to apply the small business tax rate at 8 percent, which is one-half of the general corporation tax rate. There will be no increase in the social service tax rate this year.

In last year's budget I announced a provincial personal income tax credit. The benefits of this tax credit are now available to 40 percent of British Columbia families and about 75 percent of elderly tax filers in this province. Depending upon income and deductions, a family of two adults and two children could receive a credit of up to $214.

I shall also table legislation to authorize British Columbia housing and employment development bonds, as a new mechanism to put the savings of British Columbians to work. Provision will be included for the issuance of bonds on which the interest is exempt from provincial income tax and, if agreed to by the government of Canada, exempt from federal income tax. The funds raised by these bonds will be made available through the Cabinet Committee on Employment Development for low-interest housing programs and employment initiatives in the province. The legislation will initially authorize up to $250 million in bonds to be issued.

I have stressed repeatedly that a primary government objective is to ensure that the burden of restraint is spread fairly among all British Columbians. I have also stressed, sir, that our current economic difficulties owe their origins primarily to high interest rates. These rates have placed an enormous cost burden on many segments of our population.

Unfortunately, high interest rates have also provided inadvertent benefits to some that most people would agree are not appropriate. One such group is Canada's chartered banks. Since 1977, for example, chartered banks have realized an average after-tax return on shareholders' equity of more than 21 per cent, significantly and consistently higher than other financial institutions and industrial sectors. Not all of these excessive profits have resulted from high interest rates. The banks have, since 1977, benefited considerably from federal government tax provisions, enabling them to reduce their income tax liabilities by enormous amounts. As a result, some of Canada's banks have recorded very large net incomes and yet have paid very little federal or provincial income tax. For example, in 1976 income taxes paid to British Columbia by the chartered banks totalled $15.5 million. In 1980, in spite of large profits, those banks paid only $5.8 million in British Columbia income taxes. At a time when many families, individuals and businesses are struggling to cope with high interest rates, are paying their fair share of taxes, and are faced with widespread economic uncertainties, this privileged position for banks is both unfair and inappropriate. It is a problem that governments have avoided for too long. I shall therefore table legislation providing for a tax increase which will apply only to chartered banks, effective May 1, 1982. The increase in revenue from this measure, estimated at $15 million for the 1982-83 fiscal year, will be used to partially fund the new British Columbia employment development program outlined earlier in this budget address.

Mr. Speaker, I am committed to a restraint program that is fair to all British Columbians. I believe, and I am confident that those in the financial community will agree, that this is a reasonable and fair contribution to those British Columbians being hurt seriously by high interest rates and unemployment.

Today I am announcing another significant tax change in connection with provincial energy policy. Considerable interest has been expressed recently in having motor vehicles converted to use compressed natural gas or propane. These are clean, efficient gasoline substitutes which are in plentiful supply in British Columbia. To encourage substitution of these fuels for gasoline, effective midnight tonight, there will be no provincial fuel tax applied to propane or compressed natural gas. This represents an estimated reduction in the average fuel cost per kilometre for vehicles using propane or compressed natural gas of approximately 20 per cent. As a further measure, this government will provide to individuals

[ Page 6873 ]

grants of $200 each to assist with the conversion of automobiles to compressed natural gas. These initiatives will complement the federal grants available for this same purpose.

I am also announcing today, Mr. Speaker, a number of minor taxation-related amendments. They include additions to the list of items which farmers may purchase exempt from social service tax; and an increase in fines and penalties under a number of taxation statutes, to ensure prompt payment and full compliance.

Finally, I am announcing the government's intention to negotiate a reciprocal taxation agreement with the government of Canada. Under this new agreement the federal government will agree to pay grants in lieu of provincial social service tax, fuel taxes and a number of other provincial taxes not previously paid by the federal government. In return, the government of British Columbia and its agencies will pay all constitutionally valid federal excise taxes. Under this agreement it is estimated that the government of British Columbia will realize a net financial gain of approximately $8 million in the first year.

In addition, Mr. Speaker, I shall continue discussions with the federal government on other areas where reform can and should be pursued. I am particularly concerned about the current federal-provincial arrangement governing the collection of personal and corporation income taxes. As I mentioned earlier, under this arrangement the federal government administers the collection of income tax for the province, remitting the revenues collected over a period of years as final information becomes available.

Our taxpayers are losing millions of dollars due to slow payments under this must unsatisfactory arrangement. Moreover, the federal government has used its dominant role in the tax collection agreement to unilaterally force upon provinces a substantial amount of the cost of federal tax initiatives. Such actions have been taken without full consultation and with no recognition given to the provincial contribution. The lack of a suitable amending formula with respect to both the tax collection agreement and the established programs financing arrangement is clearly inappropriate. It is a persistent federal-provincial problem and one for which I shall continue to seek a cooperative resolution.

If fundamental problems with these taxation arrangements cannot be resolved, the government of British Columbia is prepared to develop its own personal and corporation income tax system to serve better the needs of British Columbians. Some provinces have done this successfully and several others are currently giving consideration to self-administration of income taxes. Our ultimate decision, however, will be determined by how we can most effectively meet the social and economic aspirations of British Columbia citizens. I have advised the federal government of our intention to withdraw from the tax collection agreement if satisfactory progress is not made toward removing the deficiencies in the current system.

Mr. Speaker, not long ago a newspaper in greater Victoria ran a very humorous cartoon portraying the Ministry of Finance as a group of marauding pirates out to fleece a bewildered pair of British Columbia citizens in a small rowboat. The message was clear enough that the Ministry of Finance is single-mindedly using tax and fee increases to ravage an unsuspecting public. But as I thought about that cartoon it occurred to me that it illustrated a deeper contradiction that has emerged in British Columbia — in fact in much of the western world — in recent years. Many of us have lived through a period of plenty — a period of growth, prosperity and rising expectations. As citizens, we have also come to expect high quality. We've come to demand much of government — high-quality health care, first-rate education system; we expect protection in our communities from crime and fire, a clean environment and rewarding employment opportunities. Yet there is a contradiction: we are all citizens with great expectations of government but at the same time we are all. In one way or another, taxpayers, and as such we understandably do not wish to pay higher taxes; most would prefer lower taxes or no taxes at all. The contradiction is this: we cannot go on placing greater and more costly demands upon government for new and better public services and for solutions to new and more complex problems unless we are prepared to pay. Government has no money of its own — only the taxpayers' money. The citizen demanding services and the taxpayer footing the bill are one. Such contradictions are not isolated. We are also consumers at the same time as we are either employers or employees. As consumers, we abhor inflation: yet, how many will refuse a wage or salary increase when productivity has not improved? How many producers will reject a price increase when their product has not improved?

Mr. Speaker, if you will forgive me, I am reminded of that most memorable quote by Walt Kelly: "We have met the enemy, and he is us.'' All of us — taxpayers, citizens, employers and employees. even those of us on both sides of this House — at times have lived such contradictions. We have become victims of our own prosperity. We have allowed ourselves the luxury of drift.

A missing ingredient has been leadership — economic leadership. In a rising sea of conflicting currents we need a steady hand at the tiller — not at the till, aimlessly taking more and giving less.

This is a leadership budget to lead us through the storm. This budget will attain the objectives I have set out to meet. First, it will provide economic stimulation in the short term, while building the economy for the long term. Second, it will help to ensure that restraint is shared equitably among all British Columbians. Finally, it will protect and enhance the quality of public services in our province.

This is not a budget of illusions. It will not turn the international economy around. But it will carry us through without harsh and inequitable sacrifice, and it will pave the road to recovery.

I believe the greatest accomplishment of this budget has been the meeting of our objectives without major tax increases, without substantial cuts in public services. and without mortgaging our future and our children's and our grandchildren's future by borrowing for operating purposes. I believe that the budget framework I have outlined today will hold government expenditure in British Columbia to a level which our economy can support in the longer term. This budget will preserve our province's status of having one of the leanest, most effective government sectors in Canada. This is a status in which we can take pride. It is a status which, by avoiding government strangulation of the private sector, will assure the continuing health of our economy. It is also a status not enjoyed by many governments in Canada.

The federal government currently spends one of every five dollars received in revenue just to meet debt-servicing obligations. If we in British Columbia had followed the federal example, we would have a financial disaster on our

[ Page 6874 ]

hands today. The sales tax today would be 11 percent, not 6 percent. Our personal income tax rate would be 54 percent, not 44 percent. Mr. Speaker, our province has vast economic potential. Lasting prosperity can be ours, but this is a turbulent and competitive world. There are no quick fixes; there are no free rides. All British Columbians must pull together and we must dedicate ourselves to the effort and ingenuity required to turn our potential prosperity into real prosperity. We hope that the worst of the world recession is now over and that the international economy will recover. Mr. Speaker, we shall be ready. Our industries will be strong and our workforce willing and able. The sacrifices we make today will ensure strength, stability and prosperity tomorrow and from tomorrow's prosperity we shall again build up our finances. We shall use the resource revenue stabilization fund to provide the financial security that will see us through the difficulties of future years.

Last year in concluding the budget speech, Mr. Speaker, I referred to our good fortune. I referred to our resource heritage and wealth, our unsurpassed recreational opportunities and our public services which are among the finest in the world. Looking back over this past year and looking toward the future I am thankful that we have been able to provide economic stimulation at this difficult time, that we have imposed financial discipline on ourselves to make this possible and that as a government we have applied restraint in a fair and a forward-looking manner. Finally, I am thankful for the good fortune, Mr. Speaker, to be part of a government that is offering leadership to British Columbians through these challenging times.

MR. NICOLSON: On a point of order, I believe it is customary for the minister to make a motion at the beginning of the speech and also at the conclusion.

MR. SPEAKER: As long as the motion is made — and I recall it being made at the beginning — it is before the House and will be called again before the question is put.

MR. STUPICH: Mr. Speaker, I've had the opportunity to hear the minister and I'd like an opportunity to review some of the Hansard reporting of it. I move adjournment of this debate until the next sitting.

Motion approved.

MR. SPEAKER: I declare a short recess for distribution of the proposed estimates. I will recall you with the ringing of the division bells.

The House took recess at 4:31 p.m.

The House resumed at 4:41 p.m.

Introduction of Bills

EMPLOYMENT DEVELOPMENT ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Employment Development Act.

Bill 26 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.

SPECIAL APPROPRIATIONS ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Special Appropriations Act.

Bill 11 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.

MOTIVE FUEL USE TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Motive Fuel Use Tax Amendment Act, 1982.

Bill 23 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.

HOUSING AND EMPLOYMENT
DEVELOPMENT FINANCING ACT

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Housing and Employment Development Financing Act.

Bill 39 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.

CORPORATION CAPITAL TAX
(BANK RATE INCREASE)
AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Corporation Capital Tax (Bank Rate Increase) Amendment Act, 1982.

Bill 38 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.

TOBACCO TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant- Governor: a bill intituled Tobacco Tax Amendment Act, 1982.

Bill 29 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.

GASOLINE TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Gasoline Tax Amendment Act, 1982.

Bill 22 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.

SOCIAL SERVICE TAX AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Social Service Tax Amendment Act, 1982.

[ Page 6875 ]

Bill 30 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.

TAXATION (RURAL AREA) AMENDMENT ACT, 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Taxation (Rural Area) Amendment Act, 1982.

Bill 21 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.

FINANCE STATUTES AMENDMENT ACT. 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor: a bill intituled Finance Statutes Amendment Act, 1982.

Bill 36 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.

HEALTH COST STABILIZATION ACT

Hon. Mr. Nielsen presented a message from His Honour the Lieutenant-Governor: a bill intituled Health Cost Stabilization Act.

Bill 12 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.

MUNICIPAL EXPENDITURE RESTRAINT ACT

Hon. Mr. Vander Zalm presented a message from His Honour the Lieutenant- Governor: a bill intituled Municipal Expenditure Restraint Act.

Bill 32 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.

HOME OWNER GRANT AMENDMENT ACT, 1982

Hon. Mr. Vander Zalm presented a message from His Honour the Lieutenant-Governor: a bill intituled Home Owner Grant Amendment Act. 1982.

Bill 17 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.

MR. BARRETT: Mr. Speaker, on a point of order. I wish to ask your advice. I have in front of me estimates for the fiscal year ending March 31, 1983. I'm desirous of knowing if that's it in terms of the estimates. Have I only received half a document?

According to the practice of this House, there are detailed breakdowns in the estimates comparing proposed expenditures with the expenditures of the year before. For example, if you turn to any of the ministry offices, there are global figures in an unprecedented manner, unless this is just a précis and the details are forthcoming.

I would ask for your ruling, Mr. Speaker, if my suspicions, founded on this government's past behaviour, are valid, which they should not be. If another document is not forthcoming, do I lose my earliest possible time to bring to your attention a matter of privilege: that the accounts are being fudged a bit, that the accounts are not being presented in the normal manner, as they have been in the past? Before I make the accusation on a point of privilege, I would like to know whether or not this is it, or if we have not been given complete documents.

AN HON. MEMBER: Good for you.

MR. BARRETT: Good for me. What about the taxpayers who are having the facts hidden from them?

If that's it, I want to know whether or not I've lost the time for privilege. Can I know whether or not they intend to give us more information, or is that it?

AN HON. MEMBER: You're on your feet.

MR. BARRETT: Well, Mr. Speaker, I'm on my feet, and the indication is that I have to raise on a matter of privilege here right now without prior notice. I raise a matter of privilege, and I'll need some order paper to write out a motion that we have full accounts.

Mr. Speaker, just to point it out to you, there are no motion papers available to the members in the House.

MR. HOWARD: Use the back of an envelope.

MR. BARRETT: Would this be permissible, Mr. Speaker? Would you accept the motion on the back of an envelope? Could I have a recess until proper documents are made available to all MLAs to conduct the business of the House? How embarrassing!

On a matter of privilege, Mr. Speaker. I move that all documents that are not....

MR. SPEAKER: Order, please. Hon. member, in a matter of privilege the matter is stated and the motion is held on hand until the matter for privilege can be considered.

MR. BARRETT: I thought I'd made my case, Mr. Speaker. The motion I intend to move is that all documents that are normally part of the estimates be made available to this House forthwith. The reason that I intend to move this motion is that it appears by the government's silence that this House is being given an estimates book that is radically different from any other that's been presented in the history of this House and it has been given at the end of the budget speech, where the question of privilege would forever be gone unless it were raised right now. If this is the only document we are to see, it is my opinion that the government has deliberately set out to withhold information that is normally part of the House's business and that has been presented in the past.

If the members are to do their job on a motion of privilege....

[ Page 6876 ]

MR. SPEAKER: Thank you, hon. member. In a matter of privilege, the matter is stated briefly. The motion, if found in order, is then debated, but we do not embark upon debate under the motion until the motion is first of all determined to be in order.

MR. BARRETT: I am giving you reasons, Mr. Speaker. My privileges have been abridged.

Does the government give an undertaking that every single detail that was available to this House in every past session will be available now? The government is silent, Mr. Speaker.

MR. SPEAKER: Order, please.

MR. BARRETT: I have no other alternative than to raise this question as a matter of privilege. The documents are being withheld from the House and the figures are being fudged in the present presentation.

MR. SPEAKER: I think we have the matter stated, hon. member.

MR. BARRETT: Yes, I certainly have stated the matter, and I've got a case for the matter. Now I'd like to move.

MR. SPEAKER: Order, please. We must first of all find out if there is a matter of privilege, and then the motion will be read. We have the statement concerning the matter of privilege. If the member would now submit the motion, we'll find out whether or not we have a matter of privilege.

MR. BARRETT: The motion reads as follows: that all documents that are normally part of the estimates be made available to this House forthwith.

MR. SPEAKER: I must observe, without purporting to give a legal opinion, that in the Financial Administration Act, section 20(l), it says: "The estimates of revenue and expenditure for each fiscal year shall be prepared in a form directed by the Treasury Board for presentation to the Legislative Assembly by the Minister of Finance."

MR. HOWARD: Oh, you did cook the books!

HON. MR. CURTIS: Withdraw!

MR. SPEAKER: Order, please.

In view of this provision, I cannot find a matter of privilege.

MR. BARRETT: You are compelling me to respond by challenging your ruling when you haven't given a ruling — which I would have expected — but an interpretation for the government. I am surprised that the Chair has given a reason for the government's action, without the government saying why it has taken this action.

MR. SPEAKER: Order, please.

MR. BARRETT: I'm shocked, Mr. Speaker, that the government has remained silent.

MR. SPEAKER: Order.

MR. BARRETT: You are giving an interpretation, not a ruling.

MR. SPEAKER: Order, please.

MR. BARRETT: You are giving an interpretation for the government, not a ruling.

MR. SPEAKER: Order.

MR. BARRETT: Are you ruling that I don't have a point of privilege?

MR. SPEAKER: Order, please.

MR. BARRETT: Are you ruling that?

MR. SPEAKER: Let me rehearse for the hon. member the matters concerning privilege. If any member believes that he has a matter of privilege, he stands on his feet, in his place, states the matter briefly, and has in hand — without referring to it — a motion which, if it is found that he does have a matter of privilege, is then called upon and is then moved. That is the procedure in this House. Sometimes — as a matter of fact, most of the time — the Speaker takes a matter of privilege under advisement and deliberates over it for as many hours as is required to come up with a well-considered opinion. Sometimes, when a matter of privilege does not exist and is obviously not present, the Speaker may, if he wishes, rule immediately.

In today's procession the member stated his case. He read the motion, which was not necessary. The Speaker has found that a case of privilege does not exist, and therefore the motion itself is out of order.

On a point of order, the member for Skeena.

MR. HOWARD: The point of order I want to raise with you, Mr. Speaker, involves that very booklet identified as the estimates for the fiscal year. Hidden within there, unable to be discovered, are tens of millions of dollars of padded expenses which were able to be identified in preceding sessions as travel expenses, office expenses, advertising, propaganda and furniture. They're now hidden and are not available.

Obviously, as a result of our ability in the last session to identify them as padded expenses, the government sought to cover them up. The government, by virtue of the very statute that you quoted, Mr. Speaker, has rewritten this document to hide from public view their excessive expenditures in those areas that I enumerated.

Secondly, Mr. Speaker, speaking about rehearsal, the speed with which one of the Clerks at the table was able to find that statute and draw it to Your Honour's attention suggests to me that the rehearsal took place beforehand.

MR. SPEAKER: Would the member please state his point of order.

MR. HOWARD: The point of order is that here is a crowd of people who, by their history, are able to cook the books. They are able to show that certain things have happened which have not. They have manipulated financially for years in this province, and now they're doing it again.

[ Page 6877 ]

MR. SPEAKER: Would the member please state his point of order.

MR. HOWARD: The point of order, regretfully, Mr. Speaker, is that in the process of doing that they've dragged Your Honour's office into it as well, and the Clerk's.

HON. MR. CURTIS: On a point of order, Mr. Speaker, I would draw to Your Honour's attention that unfortunately, the first day after we returned, the member for Nelson-Creston (Mr. Nicolson) referred to me as dishonest and a coward. I would ask the member to withdraw.

MR. SPEAKER: The statement alleged is a statement which escaped the Chair completely. Therefore I would have to ask the hon. member, if he made such a statement, to please withdraw it.

MR. NICOLSON: Mr. Speaker, matters should be drawn to the attention of the Chair at the first opportunity, but I will withdraw the remarks which I made.

MR. BARRETT: Are you making a ruling, Mr. Speaker, that there is no question of privilege in the matter raised by me?

MR. SPEAKER: That was the ruling.

MR. BARRETT: The reason again for the ruling, Mr. Speaker?

MR. SPEAKER: Reasons were given.

MR. BARRETT: May I have them again, please, Mr. Speaker?

MR. SPEAKER: It is the Financial Administration Act, section 20(l): "The estimates of revenue and expenditure for each fiscal year shall be prepared in a form directed by the Treasury Board for presentation to the Legislative Assembly by the Minister of Finance." Does the member wish to challenge the ruling?

MR. BARRETT: Mr. Speaker, I appreciate the quote from the statute and your saying to me that the government has the legal right to do anything it wants with the books of this House. That is what you are saying.

MR. SPEAKER: Order, please.

MR. BARRETT: That's correct. Look at what happened to the $45 million order-in-council. It’s not here.

MR. SPEAKER: Order, please. Hon. member, the provisions of the standing orders are that if the member wishes to challenge the ruling, it's open to him. No further debate is possible.

MR. BARRETT: Mr. Speaker, I think you're making a hasty ruling. I don't think that the whole act has been searched. Normally you take time, peruse it and come back in with a ruling. I ask you to do the same thing now. I got up immediately so that I wouldn't lose time in terms of the earliest possible moment. If you don't do this, it leaves a cloud of suspicion about rehearsal, as raised by my colleague the member for Skeena (Mr. Howard).

MR. SPEAKER: Order. please. Hon. member, the avenue open is to challenge the ruling. If the member wishes to challenge the ruling, that's open, but other than that there is no further debate.

MR. BARRETT: Mr. Speaker, this House is being bulldozed, and facts are being kept from it. It's all a rehearsal. This government is hiding facts. The whole thing is a fake.

MR. SPEAKER: Order, please.

HON. MR. CURTIS: Mr. Speaker, I rise on a point of order. I think that in view of the inflammatory and wild statements which have been made. Any number of things could have gone wrong, but....

Interjections.

HON. MR. CURTIS: Just dig the hole a little deeper, Mr. Member.

I believe that the most recent Chairman of the public accounts committee, the hon. second member for Surrey (Mr. Hall). received some time ago an outline of the new estimates format which was proposed. I say "I believe" because it was dispatched. I don't recall that it was acknowledged.

I therefore submit that at least one member of the official opposition knew that a format change was not only contemplated but was foreseen by the Financial Administration Act. If I'm incorrect, the member will obviously tell me so.

For those members who fear that information which is rightfully theirs is not available in this document, with the development of the Financial Administration Act and with improved procedures for open government, we will when I say "will" in the future tense, I mean we will in the matter of a very few working days — have the capacity for any member to make any inquiry about any expenditure by government within this fiscal year now started. Therefore the wild accusations that....

Interjection.

HON. MR. CURTIS: No, this information, sir, would not be available by asking in question period.

Yes. we could have produced seven volumes, but the position taken was that any member who requires more detailed information will have it by computer printout as soon as is humanly possible on any expenditure which is proposed for the fiscal year ending March 31, 1983. The accusations, therefore, that this is only half the story, and the other accusations that have been made, I find, as a member of the House, quite distressing. It's quite the opposite, Mr. Leader of the Opposition. We are providing this year — and have the capacity to provide this year — more information for the members of this House than has been the case in the recent history of this province.

MR. SPEAKER: I didn't get the point of order to which I'm expected to respond.

[ Page 6878 ]

MR. BARRETT: Mr. Speaker, I want to reply to the point of order that was actually a ministerial statement. If the minister is assuring this House that before every estimate the full breakdown of expenditures will be made available off the computer for the opposition during those debates in committee, then that could have been said right at the start and we could have avoided this. Is the minister assuring the House that if any member requests a computer breakdown of specific expenditures prior to the minister's votes being called, it will be provided to this House?

HON. MR. CURTIS: In response, Mr. Speaker, I've made the statement indicating the greater capacity to provide a variety of financial information, and this was the first opportunity I had to get to my feet, because there seemed to be a little bit of a contest going on on the other side.

Interjection.

MR. SPEAKER: Order, please. Hon. members, I don't know on what basis we are continuing the debate. I will accept a reply to a ministerial statement from the hon. Leader of the Opposition.

MR. BARRETT: In response to the minister's statement, we all know the capacity of the computer. That's not the question. We all have faith in the buttons being able to be pushed. What we're asking is: will the...?

HON. MR. CURTIS: You heard what I said.

MR. BARRETT: Yes, I certainly did hear what you said. And I still didn't get the answer that I want: an assurance that if any single member asks for those breakdowns of every single proposed expenditure, they will be brought to this House before that particular minister's estimates are debated in the House. Nothing could be more forthright or clear, and I ask the minister clearly: will that material be made available on request from any member of this House prior to the ministerial estimates going to committee, and in committee?

Interjections.

MR. SPEAKER: Any further business?

Interjections.

MR. SPEAKER: Order, please. Hon. members, under some other order of business this debate might be able to be continued, but not at this point.

MR. HALL: On a point of order, Mr. Speaker, my position in the last session of parliament was mentioned by the Minister of Finance, and he is quite correct when he says that the communication was addressed to me as Chairman ofPublic Accounts in that particular parliament regarding the formulation of estimates. That's an ongoing thing. In fact it's still a study as far as I'm concerned, and material is still being collected. Frankly, I take exception to the presumption by the Minister of Finance that somehow I'm a representative of the opposition on that committee. I am the Chairman of that committee, elected by this House.

I want to tell the minister, who thinks that's funny: if he thinks I'm a messenger boy for him to take stuff to the opposition, he's wrong. I will never fulfil that function for him.

Hon. Mr. Curtis tabled remissions and refunds made under the authority of section 23 (1), (2), and (3) of the Taxation (Rural Area) Act.

Hon. Mr. Wolfe tabled the annual report of the B, C. lotteries branch for the fiscal year ended March 31, 1981; the forty-second annual report of the business done in pursuance of the Pension (Municipal) Act for the year ended December 31, 1980; the thirteenth annual report of the business done in pursuance of the Pension (College) Act for the year ended August 31, 1981; and applications pertaining to the Public Service Labour Relations Act dealt with by the B.C. Labour Relations Board in 1981.

Hon. Mr. Curtis tabled the thirty-ninth annual report of the Purchasing Commission for the period ended December 31, 1981; the statement of unclaimed money deposits for the year 1981; the annual returns of the official administrators in accordance with section 51 of the Estate Administration Act; and the annual report of the Assessment Appeal Board for the calendar year 1981.

Hon. Mr. Phillips tabled the financial statements of the British Columbia Railway for the year 1981.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:16 p.m.