[ Page 7553 ]

CONTENTS

Routine Proceedings

Revenue Sharing Amendment Act, 1982 (Bill 15). Report stage.

(Hon. Mr. Vander Zalm).

Third reading –– 7553

System Amendment Act, 1982 (Bill 18). Committee stage. (Hon. Mr. Curtis).

On Section 1 7553

Mr. Levi

On section 2 –– 7554

Mr. Levi

Mr. Hall

Third reading –– 7557

Income Tax Amendment Act, 1982 (Bill 20). Committee stage. (Hon. Mr. Curtis).

Third reading –– 7557

Taxation (Rural Area) Amendment Act, 1982 (Bill 21). Committee stage.

(Hon. Mr. Curtis).

On section 2 –– 7557

Mr. Stupich

Mrs. Wallace

Mr. King

Mr. Cocke

Ms. Sanford

Division

On section 4 –– 7562

Mr. Stupich

Third reading I .. I I –– 7562

Compensation Stabilization Act (Bill 28). Committee stage. (Hon. Mr. Curtis).

On section 9 –– 7562

Mr. Cocke

THURSDAY, MAY 13, 1982

The House met at 10 a.m.

Orders of the Day

HON. MR. GARDOM: I ask leave to proceed to public bills and orders, Mr. Speaker.

Leave granted.

HON. MR. GARDOM: Report on Bill 15, Mr. Speaker.

REVENUE SHARING AMENDMENT ACT, 1982

Bill 15 read a third time and passed.

HON. MR. GARDOM: Committee on Bill 18, Mr. Speaker.

SYSTEM AMENDMENT ACT, 1982

The House in committee on Bill 18; Mr. Davidson in the chair.

On section 1.

MR. LEVI: I want to ask the minister a couple of questions. This section is the one that really places the major authority of decision-making into the hands of Treasury Board. The other day the minister was talking about this particular system, and I want to quote him because he got into some kind of philosophy which I didn't quite understand.

First of all, he said he wasn't aware that there was any concern by any of the directors of the Systems Corporation with respect to the changes that are being spelled out in this amending act: "I think they very clearly understand the need for restructuring of the relationship between the government and the board, on the basis of several years' experience. When the System Act was first introduced, of course, certain things were expected to happen, and they may or may not have happened."

I'd like to ask the minister what he has in mind when he says, first of all, restructuring. Because as I pointed out the other day when he introduced the bill, the government had previously taken a very specific stand about its attitude to Crown corporations; they referred to it as arm's length. Well, what they've done here is remove the arm and embrace the board itself. What is this need for restructuring of the relationship? Perhaps the minister will tell us this, because it may give us some indication as to the government's thinking about how it might deal with other Crown corporations.

HON. MR. CURTIS: Yes, Mr. Chairman, I did allude to a restructuring of the relationship. However, it might be more accurately described as a return to the original relationship, if you will. As the member knows, and as I recall saying in second reading, when the Systems Corporation was originally established, the board of directors comprised members of Treasury Board. So the relationship in the case of the Systems Corporation was very much a captured relationship, if you will, between the government and the Systems Corporation. Then gradually the evolution occurred where members were appointed to the board who were not members of the executive council. Now we are down to a situation where only one member of the executive council, namely myself, is a member of the board, and I moved even further away by stepping down as chairman, as the member knows, approximately two years ago, and an individual by the name of Mallory Smith was appointed chairman.

So the government does not have absolute hands-on control — you speak of arm's length and hands-on — of the Systems Corporation board of directors, nor do we want it. But I think there are those instances where the very fact that the Systems Corporation is a Crown corporation whose only client, essentially, is government.... It differs very significantly from a number of other Crown corporations, such as Hydro, the Development Corporation and so on. This corporation, much as is the case with the Buildings Corporation, has just one major client, and that is the government and its component ministries. Therefore I've indicated the change which has occurred in the makeup of the board. We have felt for some time that the Systems Corporation, inasmuch as it impacts on the costs of government in a number of ways, should be subject to the direction of Treasury Board not in terms of every single step, but with respect to undertaking new programs and introducing new techniques. We felt that Treasury Board should at least have that relationship, in order that it may rule on the appropriateness of some new endeavour which the Systems Corporation would propose or has in fact proposed.

MR. LEVI: Mr. Chairman, we're dealing with the first section. "Section 2(9), of the System Act, RSBC 1979, C.399, is amended by adding "subject to the directions of Treasury Board" after "and may." Section 2(9) in the act says: "The board shall manage, or supervise the management of, the affairs of the corporation and may (a) exercise and carry out the powers...." The reason I rise on this question is that there is a very fundamental change taking place here with respect to the Treasury Board — and, I understand, the function of the Treasury Board. They have to know what's going on in terms of financial considerations. That's as I see the Treasury Board; it relates primarily to expenditures.

Now I'd like to ask the minister, Mr. Chairman, whether it's getting into the business of policy development in this particular Crown corporation, as I understand it does in ministries. We've never really had a very clear explanation in this House of what exactly the Treasury Board does as it has been restructured under the present government; I knew what it did previously. We know that the Treasury Board is quite a large organization within the minister's ministry. The reason I said the other day that I feel the amendment guts the power of the board is that, really, what you have is that very ominous group of people, the Treasury Board....

HON. MR. CURTIS: Very what?

MR. LEVI: Ominous; they're there. I know that when I was a minister, whenever you had to go to Treasury Board you never quite knew what you were going to get. However, the new board — the board under the present government — is a large, very powerful structure, which gets involved in policy-making in a very big way. At least, that's what I'm given to understand. There is a move here to have the Treasury Board preempt the role of the board of directors, because you're amending the section which says the board shall

[ Page 7554 ]

supervise the management of affairs — unless they're just office boys and they're going to be stamping a few things. Perhaps the minister might tell us what the Treasury Board is really going to do in relation to the Systems Corporation.

I appreciate what he's saying about the service nature of this corporation. Yes, it's providing services to all sorts of ministries. The major criticisms that we have with the development of this Crown corporation are the speed with which they tried to take over all the data-processing and the size that it has now reached in terms of the money it takes in. As I said the other day, we started at $22 million in 1978, and here we are up to about $70 million. Added to that will be $65 million of long-term debt.

The minister made what I think was a rather odd remark. He might want to comment on this. Certain things were expected to happen, and they may or may not have happened. What was expected to happen, and what didn't happen? In my opinion, because of the speed with which the Systems Corporation operated, they preempted some of the role of the ministries in terms of their data-processing, and caused a great deal of confusion. Added to that, of course, was that in the middle of everything the BCRIC shares were brought out. That was part of the function of the Systems Corporation, although most of it was contracted out. What is the Treasury Board actually going to do in this? Is this a pattern that is being set for other Crown corporations?

HON. MR. CURTIS: Mr. Chairman, I think — I know; strike "think" — that I answered that in my first response to the member in committee this morning, indicating that not all Crown corporations have precisely the same function, or the same clients, if you will, and that the only comparison between the B.C. Hydro and Power Authority and B.C. Systems Corporation is that they are both Crown corporations. The similarity ends there. So I feel that I have dealt with that.

With respect to Treasury Board, I don't suggest that it is inappropriate to discuss it in relation to this section today, but we could more effectively canvass it during my estimates. Treasury Board is very much a committee of cabinet. It does not set policy. It sets decisions within policy established by the executive council. It certainly spends a great deal of time reviewing expenditure forecasts and actual expenditures throughout government.

Again, to return to the first situation which obtained when the Systems Corporation was established, the ministers who formed the board at that time were all Treasury Board. The Systems Corporation then was very much directly under the control of government. That is not the case with this amendment, but if the Systems Corporation is requested by a ministry to undertake a new program, or if the Systems Corporation, on the other hand, suggests to a ministry that it might be able to develop a new system for a ministry or for two or three ministries, then clearly there is going to be increased expenditure. It is at that point that I think Treasury Board should be informed and should be able to say to the Systems Corporation: "We have also analyzed this. Notwithstanding the desire of the ministry or the desire of the Systems Corporation or both, having reviewed that and any number of other factors, we recommend to the Systems Corporation board that this not occur at this time, that it be modified, that it be postponed." Any number of factors could be brought into the discussion at that point.

MR. LEVI: My concern really relates not, as the minister had indicated, to Treasury Board, which is made up of ministers. I am talking about the superstructure under the ministers. That is what has happened with the Treasury Board in this government. There is a large amount of staff. The ministers are too busy to have the time, really, to do the function that the minister is describing. We may well get antagonism, a pull and a shove going on between line bureaucrats in Treasury Board and appointed volunteer board members whose role has now been preempted, not by cabinet ministers but rather by the bureaucracy. I think that is where you could very well have some serious trouble.

Also, if this becomes a pattern, although it is a service corporation, you may have difficulty recruiting people to serve on boards. Frankly, I was very surprised, as I said the other day.... Having met the chairman, I was certainly impressed that things were going along and that he knew what was going on. But here we have a new entity. I would suggest that the minister may very well regret this move, because you can create that antagonism between line bureaucrats — I'm talking about the professional civil servants — and the people who saw their function as being voluntary and as making a contribution to the citizens of the province. That could be a very serious setback.

Section 1 approved.

On section 2.

MR. LEVI: This is restraint by the government in its finest form. This is the second time in two years that they've increased the allowable debt level. The other day when the minister introduced the bill he gave us some figures, and although he didn't give us the total figure, I added them up and it came to something like $39 million. Those were the figures in relation to the building, the service costs and the interest costs. He was going to indicate to us what the rest of the money was for, which he did not do the other day. And what is the rest of the money for? We're going up to over $60 million. As I understand it, the building at the moment, according to the figures the minister gave, will come to some $39 million. Now what are we doing with the other $16 million or $17 million? What's actually taking place here? He indicated he would tell us that.

HON. MR. CURTIS: Mr. Chairman, the committee will be aware that we are discussing here subsection 2(b), not subsection 2(a), which deals with some other aspects. I assisted the member the other day to the greatest extent possible in terms of the upper limit that we feel is appropriate. The member asked, through the Chair on that occasion, if I was going to be back next year asking for still more. Well, Mr. Member, I don't know. In years gone by we have seen, under your administration and ours, the gradual increase of borrowing authority for Crown corporations, depending on circumstances as they apply.

It is unlikely — and I want to underline the word "unlikely" — that there will be a need for a further borrowing increase next year, but I don't guarantee it. Let Hansard be very clear on the point. It is unlikely — don't rule it out entirely, but it is unlikely — that we will have to seek further borrowing authority in fiscal '83-84.

The increase of $15 million: we're talking about two different sets of numbers. The member nods his head in

[ Page 7555 ]

agreement. First of all there is the increase in the borrowing authority, and then the figures I gave the member the other day which dealt essentially with the building. The proposed increase of $15 million from $50 million to $65 million is to permit the corporation to complete the construction of the new headquarters facility and to meet other obligations, other obligations quite distinct from the building, and I think the member understands that.

MR. LEVI: I understand what the minister is saying, but he is not telling me anything. The other day when he introduced the bill, he talked about $24 million for the building, $6.4 million for land and parking, $2.9 million for fees and others, $5 million for capitalized interest and $0.6 million for the uninterruptible power.

It was a very interesting experience for me to go into the Systems Corporation, when I went on the visit, and find that the corporation was completely and absolutely at the mercy of B.C. Hydro. If they decided to cut off the power, the whole system would just collapse. That's an interesting expenditure, the uninterruptible power.

HON. MR. CURTIS: Do you support that?

MR. LEVI: Yes, I think it is an excellent idea. My God you go in and you don't find a secondary power system in an operation like that — all those blinking lights which contain, as I was told, some 250 billion bits of information. Can you imagine that, all in those little twinkling things? And all of a sudden somebody in Hydro slips a switch and the whole thing doesn't operate.

We've got $38.9 million....

HON. MR. McCLELLAND: Is it bigger than a breadbox?

MR. LEVI: Oh, much bigger than a breadbox. It looks more like a coffin standing on end, chopped in half. A coffin for me, not for a big fellow like you.

All I want the minister to do is to tell me what's going to happen to the other $17 million, because we're up to $39 million on an increase last year to $50 million, now we're going for $65 million. That's all I've asked him, and he hasn't told us. What is the extra money for? Last year when I asked you what you were going to be doing with this money, you were probably just about as sure as you are now as to how much money you would require. Mr. Minister, we're going to $65 million, we've been at $50 million, and the expenditures on this building so far, from the figures you gave us, are $40 million. But you are looking at $65 million. What is happening to the other $25 million? What is that for? I suggested last year — and I suggest this year — that you are not going to be able to complete this building for the amount of money that you are telling us. Last year we discussed $25 million for the building, and we are already up to $38.9 million. We could be looking at the total amount of this money you are borrowing which will represent the actual cost of the building at $65 million. That is a long way from $25 million. I pointed out to you the other day that your department has all sorts of accounting mechanisms. Presumably you can do the kind of planning that you do. All I am saying to you is: what is the other $25 million for? I don't need it in detail.

HON. MR. CURTIS: First of all I want to assure the member and the committee that I would be staggered if the extreme case that the member identified just a few minutes ago occurred; that is that the building would accelerate in cost to the extent he mentioned. With respect to the increase which has occurred in the interval from the time the building was first proposed until now, when it is moving along very well in terms of its construction schedule, one item alone — that is the uninterruptible power supply — increased the cost by $600,000. That could have been significantly higher. I indicated the other day in second reading that we were looking at a more sophisticated uninterruptible power supply with an estimated cost of $1.5 million. We simply said that that's too expensive. We cut it back to the lesser version — a simpler system — at $600,000. The balance of the money referred to in this portion of the section is for a number of obligations, some of which are not directly related to the building itself. The member says on the one hand that he doesn't want a detailed list, but again I assure the member that there are those additional obligations and they are factored into the increased borrowing authority.

MR. LEVI: I am not going to be quite as reasonable as the minister expects me to be. I expect some information. For instance, if you are dealing with an increase, as we did with the cost of the building.... The $600,000 for uninterruptible power pales in significance compared with the other costs of $6.4 million for land and parking. I am putting that aside, because that is what he tells us the building is going to be at the moment. He talks of $25 million to cover other presumably significant obligations. I don't want to know all the nuts and bolts, but what is he talking about? Is he talking about the acquisition of equipment? Is he talking about money they have to pay, perhaps, to Honeywell because they had to back out of the contract? If that is the case, how much? We've got the fount of all information here, so now we're in business. Could you tell us what the $25 million is for?

HON. MR. CURTIS: I don't ask the member to be reasonable, but the member would know that there is the need to buy additional equipment in the course of a corporation developing as this one has and is. There is a need for working capital. There is the need to retire some existing debt, and we expect that there will be a requirement for additional capacity in the Systems Corporation. I can't spell it out yet, because that is still in the discussion stage.

The member would understand that we have identified requests for additional capacity which, on a wish-list basis, ministries would like to have or the corporation would like to provide. That is not to say that those would stand the careful review of the corporation management, corporation board of directors and Treasury Board in the final analysis. Nonetheless, I think it would be irresponsible of us to come to this House late in this session and say suddenly: "Great Scott! We don't have enough money to carry out the work which is on the books and committed."

This is quite apart from the building. It is the building, in one respect, but on the other hand the growth of the Systems Corporation. That is why we identified the need for this increased authority early on and brought this bill to the House early on. To do otherwise, I suggest, even though a number of these things might not occur.... That is why I allude to my earlier remark that I think it unlikely that we will have to come back next year. We have gone to the upper limit, and

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then we will very carefully screen the various factors which go into achieving somewhere below that limit.

MR. HALL: Great Scott, you've only got one customer, and that's yourself. So, Mr. Minister of Finance, if you've only got one customer and you're in charge of all the books, I think it's a legitimate question. What do you need this extra money for? Surely when you're setting up the invoice to your only customer — yourself.... You don't tell us how you obtain the financial information that goes on those invoices. It's a figure you pluck out of the air and one that you've never justified in this House under examination of your estimates.

Tell me, Mr. Chairman, what portion of every dollar charged by the Systems Corporation by invoice — what we see in the books that are presented to us on the day the Minister of Finance makes his budget speech — goes to buying new equipment? What portion should go towards buying new equipment? Is this the only game in town? You're in charge of the table, the dice, the shaker and the bank, and you're the only player. You won't tell us what the ingoing figures are and what the outgoing figures are. Great Scott, Mr. Minister, if you're the man who makes the invoices and pays the bills, somebody has to ask the questions. I think it's a perfectly legitimate question. What makes up that shopping list of an extra $25 million? What is being paid for by the various ministries in their monthly billings? What portion of those millions of dollars is a true reflection of actual costs? I think those are pertinent questions which relate to this section. I encourage you to respond to the member.

HON. MR. CURTIS: First of all, the Systems Corporation files an annual report.

Interjection.

HON. MR. CURTIS: The member for New Westminster is still grumpy. Day after day I hope I can see just one smile — one slight upturn to his lips. I saw it. Great Scott, I saw it. Will he smile in section 3?

Mr. Chairman, I'm not making light of the questions that have been posed in a reasonable way by the two members from the NDP. To go back to the member for Maillardville-Coquitlam (Mr. Levi), he said: "I don't need the nuts and bolts, but what sort of thing do you need the money for?" I hope I'm not quoting him incorrectly. I indicated the kind of factors that go toward this increase in borrowing authority which is before this committee at this point in time. With respect to the hon. second member for Surrey, I don't want to let the suggestion be left that we are not reporting fully to this assembly and to the people of B.C. in terms of what makes up the operating costs of the Systems Corporation over the year.

Again, Mr. Chairman, I would refer the member for Surrey to the annual reports, which are produced by the Systems Corporation. I also point out that if the members wish a specific detailed list of the proposed factors that would make up the increase, I would be happy to provide it. I would not be in a position to provide it to the committee today, but I would undertake to provide it in detail with the understanding that it is the proposed expenditure lift for capital and operating for the Systems Corporation in the course of the coming months and into the next fiscal year and beyond.

MR. LEVI: If ever there was a need for this corporation to be attached to the Crown corporations reporting committee in terms of the schedule investigation, the minister has really explained to us why that committee could serve a very useful function in this respect. The minister has been in this House long enough to know that when you put a bill before the House, people are going to ask questions. We don't have to go into a long debate, but you haven't even presented any kind of list.

That corporation is in a lot of trouble. It started out four years ago at $22 million, and it's up to over $70 million in terms of charges. We've never had an explanation from the minister or even from the previous minister as to how these charges were arrived at. We know there is a great deal of unhappiness in terms of the ministries. We're already running to $65 million in terms of capital debt. You can't just come in here and say "Great Scott" — the minister's wandering around in a wasteland of no information. I would appreciate getting a list of what this is for, now that the minister has indicated.... I thought he would have had it at his fingertips. In other debates in this House, members have always wanted to know what the money is for.

There's a section on leasing that we're going to be dealing with later on. It's a good idea to have the government do that. If you can get a cheaper arrangement, that's fine. There's also a section here that shows the unbusinesslike approach to the development of this act, when they kept all surplus money, taking it away from the corporation. They said to me: "If they'd let us keep a little of the money we make, we wouldn't have to keep going back to the government. We could buy the things we need." Okay, so they're doing that.

We simply don't have a good enough explanation on this. Maybe the minister will observe now, or when we get into his estimates, whether or not he has decided to recommend to his colleagues that this Crown corporation be placed on the schedule for the Crown corporations reporting committee. If we in this province are to really understand how Crown corporations operate and what their relationship is with the government, not the twisting, changing relationship.... It would have been of great assistance to that committee to have had the opportunity to deal with the Systems Corporation in its developing stage. We would then have had a chance to observe what takes place when you start to build up a Crown corporation.

I would appreciate it if the minister would bring in the list which he said he would provide for us. Since I don't intend to get up again, would he indicate whether they've given any thought to putting this corporation under the Crown corporations reporting committee?

HON. MR. CURTIS: Yes, we have. Since the discussion in my estimates last year, we have considered it; we've not reached a conclusion. Either we will undertake that in the interval before my estimates are dealt with in Committee of Supply or, obviously, there will be considerable discussion as to why it should or should not occur. I think that is a more appropriate discussion in the estimates — if in fact it is required at that point. Yes, I've made the undertaking. I shall provide the member and other interested members with a more detailed list with respect to what is called for in the $15 million. That shall be forthcoming within a matter of a few working days.

Sections 2 and 3 approved.

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Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Davidson in the chair.

Bill 18, System Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 20, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1982

The House in committee on Bill 20; Mr. Davidson in the chair.

Sections 1 to 10 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 20, Income Tax Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. McCLELLAND: Committee on Bill 21, Mr. Speaker.

TAXATION (RURAL AREA) AMENDMENT ACT, 1982

The House in committee on Bill 21; Mr. Davidson in the chair.

Section 1 approved.

On section 2.

MR. STUPICH: Mr. Chairman, in talking about this bill in second reading yesterday the minister told us that there were costs, I think, in the neighbourhood of some $90 million that the provincial government bears in these areas. I'm wondering, as I asked yesterday, whether or not it included the cost of the highway system, for example. What costs are actually supposed to be recovered by this rural taxation? He compared them with municipalities and there's obviously a different cost, and I'm just wondering what it is.

HON. MR. CURTIS: Mr. Chairman, obviously the costs are pretty well understood, I think, by all members of the committee. They are, essentially, highways in all respects, not the least of which would be snow removal and the general maintenance which carries on, and policing. Perhaps in the estimates — of the Minister of Transportation and Highways (Hon. Mr. Fraser) that could be provided in more detail, but the figures I quoted in second reading would stand the test in discussion at this point or in those estimates.

MR. STUPICH: Mr. Chairman, we were opposed to this bill yesterday in second reading and we are certainly opposed to this section. As I understood it, yesterday the justification for increasing the rural taxation rate by 20 percent on top of an assessment increase of about 100 percent was that the government is obliged to cover certain costs in rural areas. I ask again whether it's fair to assume that the rural taxpayer should pay the burden of highways that really connect municipalities, rather than serving the rural areas themselves? I just don't see his comparisons or his justification and rationalization for increasing the tax rate by 20 percent if it's based on the costs that the provincial government has to bear in those areas. I can see policing in rural areas — again, perhaps not highway patrol but police protection generally might be related to the property value in those areas — but I would argue very strongly against allocating the cost of highway construction and even highway maintenance to the rural areas that, as I say, connect municipalities rather than stand on their own.

HON. MR. CURTCURTIS: Mr. Chairman, we have a difference of opinion, which is fair enough. I wasn't just referring to the cost of building and maintaining a highway in a rural area but rather the rural area roads which serve that particular part of the province. In some instances they may be relatively basic roads. I also made the point clear that it was essentially policing and highways, not exclusively policing and highways. There are many other costs. This is not a factoring in of the cost of maintaining Highway 97, which is used virtually by all British Columbians in a given point of time, or Highway 16, but rather the multitude of roads which lead to a particular highway. It's the general cost.

MRS. WALLACE: Mr. Chairman, I just can't let this section go without dwelling a little further on what the minister is really doing to the rural areas with this particular section. I discussed with him in second reading the problem occurring in Cowichan where because of the increased assessments the provincial government stands to increase its income some 31 percent by that 2 mill increase in the tax rate.

The minister has said he has to have this extra money to provide for roads and policing. Well, we have municipalities in my constituency also, Mr. Chairman, the municipality of North Cowichan, for example. For the year 1981 North Cowichan had expenditures for roads in the amount of $1,035,000, and expenditures for policing were $550,000. That's a total of $1,585,000. Do you know what that municipality received from the provincial government last year? They received revenue-sharing grants of $1,326,000, and secondary roads $285,000, for a total of $1,611,000, which is more than the costs of their roads and their policing. That's what's happening in the municipalities. Yet that minister will stand up and tell us that he has to up the take from the rural areas by 31 percent to cover those costs. It's nothing but a grab of the taxpayers' money to go into the coffers of the provincial government, Mr. Chairman. That's what this section is all about.

In the unincorporated areas — and I gave some of these figures yesterday — in the regional district, the 10 mill levy to the province has risen from $694,274 in 1972 to a 12 mill levy in 1982, which will generate $1,807,508 — an increase

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of over 160 percent in ten years in dollars out of the rural taxpayers' pockets, Mr. Chairman. The government is not spending that kind of money on the rural areas; the government is collecting this money to put in its pocket for its own special projects, and that's why we're concerned about this section.

MR. KING: Mr. Chairman, I share the concern my colleagues have expressed. Certainly in my constituency we have vast rural areas and agricultural areas, and the kind of cost increase that is now being imposed on those lands is really the straw that is breaking the camel's back. We've discussed major increases in virtually every other area of licensing and user fees, and now to attach this rather spectacular increase to rural land is, in my view, unjustifiable.

I want to ask the minister a couple of questions I'm not quite clear on, and he can perhaps help me with them. It's my understanding that leased Crown lands for recreation purposes and so on are still subject to taxation as well as their lease fees. Will this 20 percent increase apply to them as well? I think the minister would be aware that in the Shuswap Lake area particularly there are literally hundreds of lots leased by local people....

HON. MR. CURTIS: And Green Lake and so on.

MR. KING: Yes, a whole variety of recreational areas. I would point out, Mr. Chairman, that in most of those areas there is no service whatsoever, neither road access nor power transmission. They're virtually isolated recreational lots. The lease fees that have been placed upon those properties have accelerated in absolutely spectacular fashion. I raised this point in the last two years in the debates on the estimates of Lands, Parks and Housing. These tremendous cost increases in the lease fees, if my understanding is correct, are going to be compounded by this 20 percent increase in taxation, and the result is that British Columbians are having to divest themselves of those lands; they simply can't afford it any longer. What we're seeing is the transfer of this recreational land to rich outsiders, either citizens of Alberta or Americans, because local people simply can't afford any more to have their little recreational lot which, in many cases, they gain access to by boat without any cost whatsoever to the government. To burden and further encumber those properties with this kind of tax increase, when over the last two years we've seen 300 percent increases in Crown lease fees, is just brutal. I ask the minister to correct me if I'm wrong, but it's my understanding they're still subject to the same taxation, the same rural formula. I would like some assurance from the minister that he will have a special look at these areas where absolutely no government service or cost is involved.

HON. MR. CURTIS: The two members opposite who have spoken have indicated their opposition to this section, and that is to be expected. I indicated that in closing second reading, Madam Member — it was yesterday, May 12, when we concluded second reading on this.

I also said in second reading that virtually all property owners in rural areas — that is, the non-incorporated areas — received fewer services than in virtually all municipalities, and I think the assessed values reflect that. We can have a discussion on assessments. But I think the assessed values reflect the accessibility of a particular parcel of property in an unincorporated area. That is therefore reflected in the tax bill which is paid. The increase must be kept in perspective, Mr. Chairman, because it is one of the very few increases which occurred this year across the entire range of taxes. This is not, as the member for Cowichan-Malahat (Mrs. Wallace) suggested.... The revenue from this is relatively small. The interjection could come very quickly that it is still a tax bill to be paid by property-owners, by citizens of British Columbia. But in terms of its total amount for the province, and matched against the total budget of the province, it is relatively small.

We thought that it was appropriate that there be a slight lift in order to better reflect the amount paid by the benefiting taxpayer, as opposed to all taxpayers in British Columbia. That's why, for the first time in 65 years, we made the decision to give the rural tax rate this slight lift. I can understand that there are those who are opposed to it. But again, I recall the remarks made by the member for North Peace River (Mr. Brummet) in second-reading debate on this particular point.

Recreational lots? I will not speak of the lease fee which is charged, because that is not before us and it is not dealt with in this bill. But, yes, the member is correct. Whether it is in the Shuswap, the Cariboo or on Vancouver Island, if there is a recreational lease, then the lease is paid and, in addition, the rural tax rate is levied. Both are levied. We could have a discussion as to the advantages for those who lease recreational property as opposed to those who would own it. Certainly, if they lease it, they are not involved in mortgage payment as such on the land, but I think that's perhaps straying a little from this particular section.

MR. KING: I can appreciate that the minister wants to confine the examination to the section that's before us. But it's a little difficult, in discussing a tax increase on rural land, to ignore the other revenues that accrue to the government from that rural land, particularly with respect to leased lots. The fact of the matter is that those leases have accelerated in spectacular fashion. I have received exceedingly heavy correspondence from the Okanagan and Shuswap Lake areas on this point. I'm suggesting to the minister that if he imposes through this particular device a further increase on British Columbians who are able to enjoy a little bit of isolation through the lease of recreational land sites — whether they be on the lakeshore or of a mountain nature.... When no services whatsoever from the government flow to those areas.... The majority of them have no highway access. There are no power lines. There's no cost of providing water; the citizens provide their own. Indeed, they are looking for a little bit of isolation to enjoy the beautiful resources of British Columbia that this government talks about. What you are doing, Mr. Minister, is simply forcing British Columbians off that recreational land and developing a policy where only the very rich can afford to enjoy the resources of the province. Those very rich are usually imports rather than British Columbians, particularly under the administration of this government. I think it is totally unacceptable.

The minister says that we disagree on it, but what can be the possible rationale for increasing charges when there is no government service? The minister has a valid argument about government cost going up when there is a government service extended, but in cases where there is absolutely no government service whatsoever, that suggests to me that this government is gouging rather than proceeding with any realistic user fee or cost analysis. That is completely unforgivable, in my

[ Page 7559 ]

view. I know that the thousands of British Columbians throughout the interior and the coastal area as well, where recreational lease land is involved — and we are seeing this kind of 20 percent increase in taxation on those small isolated plots — are going to be completely up in arms, and justifiably so. They argue that they have invested considerable money to build a small cabin or camp on these lands, at no cost to the government. Much of it is only accessed by boat or by hiking. There is no government cost involved, yet here we have a government that is prepared to impose a 20 percent tax increase and gouge these people. There is absolutely no cost imposed on the government. It is absolutely scandalous, and there is no way that I support this provision.

MR. CHAIRMAN: Hon. members, before I recognize the member for Cowichan-Malahat, I would again draw all members' attention to the fact that in committee we are bound by our standing orders on strict relevance to the section. I would commend that to all members.

MRS. WALLACE: I can assure you that I will be strictly relevant. I am talking about the 20 percent increase that this particular section is imposing on rural taxpayers.

Last year the minister estimated that this particular 10 mill levy would net the provincial treasury something like $40 million, if my memory is correct. I would suspect that the Cowichan area is an average cross-section of rural areas. We are facing a 31 percent increase just at the 10 mill rate because of increased assessments, because this government has increased the assessments by the amounts that they have increased them. That was their decision and it certainly works for their benefit, because with those increased assessments the 10 mill levy would now increase the take to the provincial government by 31 percent, or bring it roughly to an estimated $52 million. On top of that they are going to give us a 20 percent increase by raising it up to 12 mills, which will net the treasury approximately $62 million. I think my figures are approximately correct. I have just done them quickly here on a pad of paper. That is a 65 percent increase that this one little section is imposing upon rural taxpayers. That is what this is doing, and that is why we are so adamantly opposed to it and why we're suggesting to the minister that he should think again.

In these days of what that government says is restraint — when we must practise restraint, when we are telling people that they must withhold their spending and cut back on their demands — he is imposing a 65 percent increase upon rural taxpayers. In Cowichan, because of that 31 percent increase in assessments, the regional district is lowering their mill rate. They are being responsible. They are looking at their money needed to carry out the services that they must carry out, and they are reducing their mill rate. But because of this minister and this particular section of this bill, while the regional board reduces its mill rate the local taxpayers are going to be faced with higher tax bills.

Let me tell you that our regional board is now promoting a publicity campaign so that the taxpayers will know who is responsible for those increased taxes. The local taxpayer will know that they have acted responsibly at the lower level and have lowered their mill rate at the local level, but that the provincial government is the government that has their hands in the taxpayers' pockets to the extent of a 65 percent increase. That's why we're opposing this section and that's why the voters of this province are going to oppose this minister and this government when they have a chance to do so at the polls. You're tax-grabbing for your own purposes, and not for anything to do with the services you're providing. Those services are very minimal. This money is not related to that at all. If you can show me where you're going to improve the services to the rural areas by 65 percent over last year, then I will believe that that's the real intent. But that's not going to happen. You're grabbing this money for your own purposes, and I'm entirely opposed to it.

MR. STUPICH: When the minister was telling us what services are supplied, I took it down as policing — highways and policing. That could be my error. Were there three services mentioned?

HON. MR. CURTIS: Mr. Chairman, I think it would be appropriate to point out that I said they essentially were policing, highways, road construction and maintenance, among others.

MRS. WALLACE: What are the others?

HON. MR. CURTIS: All of us, as members serving the people of British Columbia, would know the services which are provided to British Columbians, whether we live in a municipal area or a non-municipal area, and I don't think it is provincial services....

MR. KING: There's no policing up there, for gosh sakes. There are no highways. Shame on you.

HON. MR. CURTIS: The member for Shuswap-Revelstoke interjects and says that there is no policing up there. That is not correct, and the member knows it. That does not mean that an RCMP constable would be seen twice a day, but it does mean that the police service of the province of British Columbia, contracted with the Royal Canadian Mounted Police, is available when required, no matter where one is in the province of British Columbia — not necessarily to worry about a relatively minor matter, but certainly to be available should some serious situation develop. The member knows that.

You're opposed to an increase in taxation in rural areas. I understand that the opposition would be opposed to that. We did not relish increasing the tax rate this year. I indicated last year that, while we were not increasing it last year, we saw the time coming when it would have to be increased. It was therefore increased as is before us now for 1982.

MRS. WALLACE: Sock it to them.

HON. MR. CURTIS: Madam Member, if you had been a member of the government from your side of the House, with your philosophy, you would have bombarded the people of B.C. with tax increases this year. You would have drowned us with tax increases because of your proven inability — 1972-75 — to run a government. This is limited taxation.

MS. SANFORD: The minister should know better.

HON. MR. CURTIS: I know very well, Madam Member for Comox.

MR. COCKE: You're blowing your cool.

[ Page 7560 ]

HON. MR. CURTIS: No, I'm perfectly cool, and I'm smiling, which is more than the member for New Westminster can do.

MR. KING: You smile while you gouge. You think it's funny that you're gouging.

MR. CHAIRMAN: Order, please. I'll ask the member for Shuswap-Revelstoke to come to order.

HON. MR. CURTIS: Mr. Chairman, I indicated before and I say again, when one considers the services that are available — and it's okay to use, as an example, a very remote piece of property in a remote section of British Columbia.... That is one type of rural land. There are others, and the member for Cowichan-Malahat (Mrs. Wallace) would know that there are some immediately beyond the boundary of a municipality — North Cowichan, for example — or just beyond the city of Nanaimo, for the member for the constituency of Nanaimo (Mr. Stupich). The same with Comox. There are those properties also. One could argue instructively, I think — but it is not before us in this bill — the need for a variable rate perhaps. But then you will never find the precise guideline to follow in that respect. If 12 mills is appropriate in Colwood, quite apart from the additional levies which are agreed upon by the electorate in that rural area, is 12 mills appropriate on some piece of property 50 kilometres from the city of Fort St. John? That, I suggest, is discussion for another day.

We have before us here, understandably, the official opposition opposing a tax increase. We have, on the other hand, the government of the day saying that we believe this is appropriate. We believe that it is moderate. I don't expect the people whose taxes increase to applaud and to be elated. On the other hand, Mr. Chairman, that's the responsibility of government. The increase is modest. It is the first increase in this rate since 1917.

The members opposite know that there are two factors, assessments and tax rate. This bill and this section deal with tax rate only, not assessments.

MR. CHAIRMAN: Hon. members, before recognizing the member for Nanaimo, I would again advise all members that we are on section 2, which we must remain strictly relevant to. Clearly we are beginning to slip into what can best be described as a repeat of the debate in second reading.

I wonder before recognizing the member for Nanaimo if the committee would give the Chair consent for an introduction.

Leave granted.

MR. CHAIRMAN: Hon. members, with us today in the gallery are approximately 60 students from Burnsview Junior Secondary School, with their teachers Mr. Moser and Mr. Godwin, and I would ask the House to give them a very warm welcome. For the information of the House, hon. members, Mr. Moser is not only a teacher with Burnsview; he is also an alderman for Delta and is the NDP candidate in the next provincial election. I would ask for a special welcome for him.

MR. STUPICH: Thank you, Mr. Chairman, and especially for that special welcome.

HON. MR. CURTIS: On the section, Dave, and not on the candidate.

MR. STUPICH: The minister has cautioned me to be on the section. Mr. Chairman, I think he's the one who has to be cautioned. He gave a good speech, but he didn't deal with the questions that were asked about section 2. Yesterday, speaking in second reading, very precisely, or at least with some degree of precision, he said: "Provincially supplied services to rural areas cost the government something in the order of $90 million to $100 million." I was asking for some detail as to what those services are and what they cost. That figure is fairly precise — $90 million to $100 million is what it's costing to service rural areas. How much is for policing? How much is for road maintenance? I'm not sure from what the minister said earlier when he was speaking about highways whether the capital cost of major highways like the Trans-Canada Highway is included in that figure. I'm just not sure from what he said.

HON. MR. CURTIS: You were out of the House, I think. I made that very clear.

MR. STUPICH: No, I heard you say it, but I didn't know which way you said it. I was sitting right here when you talked about Highway 97, and I wasn't sure whether you said that's included in the $90 million to $100 million. Tell me what makes up this $90 million to $100 million.

HON. MR. CURTIS: Mr. Chairman, with respect, I think we could discuss that in estimates of various ministers, because almost every ministry of government in one way or another provides some service to the people of British Columbia who live in the "rural areas," and I identify only two as being the majors — that is, highways and policing. But there are many others. We could hear from the ministers in the treasury benches at length as to the costs, and I think the members know that. There are a variety of services which are provided which would be described as municipal if they were within a municipality. I'm not speaking of the general services which are available to all of us, which are provided by our provincially collected taxes, but rather the taxes which within a municipality would be considered of that nature.

MR. STUPICH: Mr. Chairman, I could quite easily ask each minister what his contribution towards this is. What I'm really asking the minister right now — and I don't seem to be getting through — is: where did he get the figure of $90 million to $100 million? Did it come to him in a dream, or did it just come off the top of his head as he was speaking — that maybe it's $90 million to $100 million, when it could be $20 million or $200 million? Surely he has some basis for using that fairly precise figure, or for having used it yesterday. If he hasn't a basis, well, he should simply tell us, and we'll go on to the next argument.

HON. MR. CURTIS: In an attempt to assist the House in second reading, Mr. Chairman, I indicated — and I think that the members will be in a position to determine the validity of the figure — quite clearly that in 1981 provincially supplied services to rural areas cost all taxpayers, through their provincial government, somewhere in the order of $90 million to $100 million. The figure did not come in a dream; it was not plucked out of the air. The figure was gathered in

[ Page 7561 ]

order that, when introducing the budget, I could determine the appropriate factor by which the rural tax rate should be increased.

MR. STUPICH: Mr. Chairman, I think what I heard the minister saying is that somebody else made a guess, and he used the guess that somebody else made. The other thing I'd like to say is that in telling us that a 20 percent increase in the rate of taxation is — I have forgotten the word he used — a "modest" increase.... I don't think that was quite it.

MR. KING: He said "modest."

MR. STUPICH: I don't think it was "modest;" it was something like that, but that's the tenor. Anyway he said that it is a modest increase to increase it by 20 percent. I suppose my next question would be to ask him this: if the government employees came in and asked for only 20 percent, would he consider that a modest increase?

MR. CHAIRMAN: That would, of course, not be appropriate under this section, hon. member.

HON. MR. CURTIS: Mr. Chairman, I think in connection with this increase in this bill I have used the words, "modest" and "moderate." I would think that they could be easily defended when one again points out that this is the first time this rate has been changed since the period of World War I in 1917.

SOME HON. MEMBERS: And what about assessments?

HON. MR. CURTIS: Assessments are not before us in this section or in this bill.

SOME HON. MEMBERS: Oh, oh!

HON. MR. CURTIS: Well, the members know that as well as I. It's not my rule. I look to the Chair for guidance if I'm incorrect.

MR. CHAIRMAN: The Chair has given that indication, hon. members.

MR. STUPICH: Mr. Chairman, there is no question but that this is a revenue grab, and for the minister to say, "Well, I'm not really affecting revenue; all I'm doing is changing the rate of taxation, and in the event that assessments go down, we'll really collect less taxes," when he knows full well what has happened in the field of assessments.... It is a revenue grab, and we're opposed to it.

MR. COCKE: Mr. Chairman, I've been listening very carefully to the minister's arguments. With his argument about "the first time since 1917," he's trying to give some sort of an impression that this is the first increase of any nature since 1917. The fact is that we are dealing with percentages, and percentages are only relative to the value of the property. The values of the properties have been going up since 1917. The minister has raised them 65 percent this year, and he tells us that this is because of the fact that there are required services out there — the requirement for policing and so on and so forth. I would ask the minister, in the face of that tremendous restraint put on the hospitals and the health-care field for the very people that we're talking about — the people in the rural areas — by that same minister.... We are discussing no restraint here whatsoever. The minister is able to high-bind out for a 65 percent increase, and on the other hand he tells hospitals to hang in there for 7.65 percent — ridiculous, on the face of it.

MR. CHAIRMAN: Order, please. Hon. members, it would be virtually impossible to conduct our continuing canvassing of our bills in committee if we were to bring in items such as health care or other items on each and every section. That may very well be the wish of the individual members, but the Chair has no alternative but to enforce the orders which are before us.

MR. COCKE: On a point of order, the minister was trying to explain to us just a few moments ago where the money would be spent. I gave him one particular area that he had omitted to talk about. I believe that it is quite relevant to speak about.... If we are taxing, surely we are taxing to provide some service. The minister talked about that service, so I merely suggested that one of the services is health care. I believe, Mr. Chairman, that if you think about it, it is in order.

MR. CHAIRMAN: The Chair has thought about it and regrets that it cannot come to the same conclusion as the member.

MS. SANFORD: Mr. Chairman, I want to let the minister know that the constituents within my constituency do not consider this a moderate increase in any way, shape or form. The cost of land has been increasing at a huge rate in the constituency of Comox. There is a very large growth rate in that area. It is a desirable place to live and, as a result, they have had these huge values placed on their land and then are faced with this kind of increase as well. It's a situation where many of them are out of work, of course. Companies are closing down, going bankrupt. These are the people who are also faced with these increases being placed on them by the government. This is just one of umpteen dozen increases that the government has put on. They're frightened of what this government is doing to them.

I was interested to hear the minister say that part of the increase is going towards highway construction. With the increase in population in the constituency of Comox there is no doubt that the additional money that's going to be raised through this section of the bill is needed desperately for the alternate highway route that the government has been talking about for a number of years. Will the additional money mean that the people in the constituency of Comox are not going to have to wait as long for an alternate highway?

HON. MR. CURTIS: I will assist the member as much as possible, but again I suggest that the merits of constructing a particular road or highway would be dealt with more appropriately in the estimates of the Minister of Transportation and Highways (Hon. Mr. Fraser).

While we are in debate in committee, I think it's important to talk not about the 65 percent — the percentage quoted by the member for Cowichan-Malahat, who is not now in her seat.... As I indicated in second reading, this increase in the tax rate from 10 mills to 12 will bring the provincial government an additional $4.7 million for all the services it

[ Page 7562 ]

provides to the rural areas. When matched with a budget of several billion dollars, it is not a large amount. The words I have used — relative, moderate and modest — are not intended to back away from the fact that it is an increase in the tax rate. The member knows we are speaking of relatively small amounts of money. The increase expected to be generated as a result of this lift from 10 mills to 12 mills is $4.7 million.

I cannot comment on behalf of the Minister of Transportation and Highways whether a road will or will not be constructed. You would be offended if I did attempt to speak on behalf of the minister, and so would the Chair.

MR. CHAIRMAN: That is correct, hon. member.

MS. SANFORD: Mr. Chairman, I can see that the minister is not going to give me any information on this. I just wanted to point out that whenever we talk to the Minister of Highways on this particular question, he says: "But it's the Minister of Finance and the Treasury Board that are responsible in terms of how quickly we're able to get these roads done." So the Minister of Finance says it's up to the Minister of Highways, and the Minister of Highways says it's up to the Minister of Finance. I'll try through the Minister of Highways, but I'm sure that he will tell me it's Finance.

Section 2 approved on following division:

YEAS — 26

NAYS 21

An hon. member requested that leave be asked to record the division in the Journals of the House.

Section 3 approved.

On section 4.

MR. STUPICH: This is the section that takes out of the legislation the amount of the fee and transfers it to the cabinet. I wonder if the minister can tell us what his plans are for amending this fee. I don't suppose he has any idea how much revenue this is bringing in. I can appreciate it is not equal to the cost. If he has any information at all as to what he is getting now, and what his plans are with respect to this section, then we could be better informed as to whether we should vote for it or against it.

Interjections.

HON. MR. CURTIS: It was the other day when noise in the House led me to an incorrect comment, so I'm going to wait. We are on section 3, Mr. Chairman?

MR. CHAIRMAN: Section 4. Section 3 has passed.

HON. MR. CURTIS: With respect to section 4, I think the member for Nanaimo (Mr. Stupich) and I should just check again, because it is section 3 which deals with repealing paragraphs, and substituting a fee that is established under the regulations. I understood the member's question to relate.... We're even, Dave. With leave, we could go back and discuss section 3, but section 4 is not the topic the member raised. As you wish, Mr. Chairman.

MR. CHAIRMAN: Hon. members, it is inappropriate and beyond the Chair's competence to give leave in committee. We have passed section 3 and are now on section 4.

Sections 4 to 6 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Bill 21, Taxation (Rural Area) Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. McGEER: Committee on Bill 28, Mr. Speaker.

COMPENSATION STABILIZATION ACT

(continued)

The House in committee on Bill 28; Mr. Davidson in the chair.

On section 9.

MR. COCKE: Mr. Chairman, we are back to the Compensation Stabilization Act. Section 9 is the section that gives the cabinet all the power to do whatever they like with compensation for public servants, municipal employees, hospital workers and so on across the province. It's a very interesting phenomenon that we see before us. We see a number of actors. We see, for example, the Minister of Finance, who has said that the first ministers' press conference on February 18 was valid and that somewhere between 8 percent, 12 percent and possibly as high as a 14 percent increase could be part of the program. So the Minister of Finance becomes the straight man in this act, because

[ Page 7563 ]

here he is, as innocent as all get out, trying to press this clause, along with the rest of this totally inappropriate bill. He's trying to press that totally inappropriate clause through the committee. While he's doing that, the Premier is running around undercutting him. The Premier says: "Oh, I've changed my mind. New guidelines: 5 percent, or less." He said that 6 percent was terrible, yet on February 18 that genius mentioned.... Obviously he's a genius. Anybody whose mind works this quickly has to be a genius.

AN HON. MEMBER: He belongs to Densa, not Mensa.

MR. COCKE: My colleague is correct — Densa, not Mensa. In any event, I feel that the Minister of Finance has been used, and that he's having a terrible time trying to answer, in this very appropriate section of the bill, what's going on around here. We ask, on behalf of the people of this province, what in blazes is going on. It was with a good deal of consternation that we had before us a bill that did away with the collective bargaining process and made the autocratic government the sole arbitrator of what's going to happen in the future for all these different services.

We had announcements that under this section Mr. Peck would have some guidelines, and we also had announcements of what those guidelines might be. In second reading the Minister of Finance got up and said: "Those will be the guidelines." That's not that long ago. That's the way it turned out, Mr. Member for Surrey (Mr. Hall), just for that day, because walking around the halls of the legislative buildings was the Premier, with nothing better to do than stand before the bright lights of television and tell the world that 6 percent was too much; it should be 5 percent or less. This was also reported through the medium of print.

Interjection.

MR. COCKE: Well, my colleague from Surrey again suggests that the Premier may have been walking and thinking at the same time, and that would be extremely difficult. In any event, I suggest to the Minister of Finance that unless he gets up and tells us what's going on under this section, he is party to a conspiracy that is completely, absolutely and totally political. The first minister is trying to alienate leaders of unions, because there is another actor in this. I note that the Premier is taking shots at John Fryer, the head of the BCGEU, to the extent that Mr. Fryer is suggesting that he may resort to the courts. It strikes me, Mr. Chairman, that they're looking for a fight. The Premier is suggesting that it's just those labour leaders that he is out to get. But, Mr. Chairman, let me tell you what and who this affects: it affects the right of free people in a free, democratic society to bargain. I can note by the looks on some of the faces in that back bench over there that that doesn't occur to that group. But, Mr. Chairman, freedom is a very precious thing in our society, and when that freedom is taken away by arbitrary pieces of legislation and arbitrary clauses like section 9.... What does section 9 do? It moves every decision with respect to the amount available to the workers in this province behind the closed doors of cabinet. They decide what's best for the people who have served so long and hard.

I don't believe we should be discussing this kind of program in this Legislature. I believe we should be discussing in this Legislature ways and means to obviate sections like section 9 and get on with the work of the people and press for jobs. This section has not yet become law, but we see hospital beds closing down all over the province because of the announcements that were made by the Premier and by the Minister of Finance, subject to this section that gives them the right to decide. They'd already decided on one amount, and then suddenly, for political reasons, the Premier comes charging in here and says that he supports the bill reluctantly, and then goes out in the hall and announces 5 percent.

MR. LEA: Or less.

MR. COCKE: Yes, or less. That 5 percent would be set subject to this section. Any kind of setting of wages by government, when we have free collective bargaining, is the craziest way of doing business that I've ever heard of. But now, to go that second step, what does the Premier want?

Mr. Chairman, I suggest that the Minister of Finance should get up now. He should tell us what's going on. He should tell us just exactly what this section means. By now he should have had an opportunity to discuss with the first minister, the Premier, what on earth he means. Maybe he can give us an interpretation of the whole scenario right now. If it is an election they want, it is an election we would love to participate in. Further to that, it is an election that the people in this province so sadly want, so let's go on it. But for goodness' sake, tell us what's going on. You have a story in the House and a story in the hall. Watching the Premier dancing around in another press conference out there in the hall, not coming clean with the people, is just a little more than this opposition can stand. We have a right and a responsibility to find out what's going on. I have never in my life seen a situation where a government is so disparate in terms of its different approaches and different explanations to this assembly and now to this committee.

I listened very carefully yesterday and all I could hear, when my colleagues were asking questions on this section, was stonewall. I could hear a pin drop. The minister gave a few weak suggestions but could come up with no explanation at all about the difference between two members of treasury bench, let alone two members of cabinet. If Treasury Board, which is a very powerful committee of cabinet, can't put its act together, how can we expect the government to put their act together? I guess we don't. But we still an answer under this section, Mr. Chairman: what is going on? We want to know what the guidelines are. Did the minister in fact make the statement, which appears in Hansard, that the guidelines were as the Premier had originally outlined? And now what does he have to say to the Premier of the province, who's make a wildly contrasting statement with respect to his guidelines'?

Having said all that, Mr. Chairman, I would like to reiterate that we people in a free society resent beyond words governments getting in and setting controls on any and all sectors, and particularly on a vulnerable section like the public service.

Mr. Chairman, I'll tell you who's suffering: people in every constituency in this province. Because, you see, who believed the guidelines? The hospital administrators, the hospital boards, believed them, so you see a raft of beds closing down. School boards believed them, and you see schools closing down; there were a number of announcements in Burnaby. You see services suffering in the face of massive unemployment at a time when we should be employing people and letting the free collective bargaining process

[ Page 7564 ]

work. No, we're not, Mr. Chairman. We're back to this autocratic, stupid way of doing business: alienating people, dividing and conquering.

Let's hear the answer. What's going on? Is there any determination on the part of the Minister of Finance to stand up and 'fess up and tell us just what's going on over there? The people want to know.

The House resumed; Mr. Davidson in the chair.

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:01 p.m.