[ Page 7783 ]

CONTENTS

Routine Proceedings

Limitation Amendment Act, 1982 (Bill 48). Hon. Mr. Gardom

Introduction and first reading –– 7783

Oral Questions

Use of government aircraft. Mr. Passarell –– 7783

Expenses of Minister of Consumer and Corporate Affairs. Mr. Macdonald –– 7784

Funding for rape relief centres. Ms. Brown –– 7784

Clifford Olson trust fund. Mr. Leggatt –– 7784

Dismissal of Crown counsel. Mr. Macdonald –– 7785

B.C. Packers Ltd. Mr. Lea –– 7785

Seizure of goods at Prince Rupert. Mr. Howard –– 7785

Court of Appeal Act (Bill 2). Report. (Hon. Mr. Williams)

Third reading –– 7785

Geothermal Resources Act (Bill 5). Report. (Hon. Mr. McClelland)

Third reading –– 7785

Gasoline Tax Amendment Act, 1982 (Bill 22). Committee stage. (Hon. Mt. Curtis)

On section 3 –– 7785

Mrs. Wallace

Mr. King

On section 7 –– 7787

Mr. Howard

Mr. Mitchell

Mr. Mussallem

Mr. Leggatt

Division

Third reading –– 7790

Motive Fuel Use Tax Amendment Act, 1982 (Bill 23). Committee stage,

(Hon. Mr. Curtis)

On section 2 –– 7790

Mrs. Wallace

Division

Third reading –– 7791

Financial Administration Amendment Act, 1982 (Bill 24). Committee stage.

(Hon. Mr. Curtis)

On section 3 –– 7791

Mrs. Wallace

Mr. Stupich

Mr. Hall

Division

Third reading –– 7793

Agriculture and Food Statutes Amendment Act, 1982 (Bill 31). Committee stage.

(Hon. Mr. Hewitt)

On section 2 –– 7793

Mrs. Wallace

On section 3 –– 7794

Mrs. Wallace

On section 4 –– 7795

Mrs. Wallace

Division

On section 9 –– 7796

Mrs. Wallace

Third reading –– 7796

Health Cost Stabilization Act (Bill 12). Committee stage. (Hon. Mr. Nielsen)

On section 1 –– 7796

Mr. Cocke

Third reading –– 7797

Hydro and Power Authority Amendment Act, 1982 (Bill 40). Committee stage.

(Hon. Mr. McClelland)

On section 2 (continued) –– 7797

Mr. Cocke

Mr. Hall

Mr. Barrett

Mr. Howard

Mr. Leggatt

Taxation (Rural Area) Amendment Act (No. 2), 1982 (Bill 34). Hon. Mr. Curtis

Introduction and first reading –– 7806

Division

WEDNESDAY, MAY 26, 1982

The House met at 2 p.m.

Prayers.

HON. MR. BENNETT: In the gallery this afternoon is Bill Wright from Richmond who is, among other things, vice-president of the British Columbia Social Credit Party. Sitting with him is Dick Gibbons from West Vancouver. I'd ask the House to bid them welcome.

MR. KING: Mr. Speaker, in your gallery today we have a group of 18 senior citizens from the city of Revelstoke who are visiting Victoria along with their tour guide Miss Cheryl Richardson. I would request the House to extend a very warm welcome to them all.

MR. STRACHAN: One of the outstanding independent schools in the central interior is Prince George College, which was begun by Bishop Fergus O'Grady in the mid-1950s. Would the House please welcome teacher Allan Boras and 50 students from Prince George College, who are in the precincts today.

MR. LAUK: The second member for Vancouver Centre (Mr. Barnes) and I would ask the House to welcome a group of students from the greatest high school in the world, Britannia, who are visiting the precincts with their teacher and guide Mr. Guy.

HON. MR. McCLELLAND: In the precincts of the building today are some young students from Langley Elementary School. They are not able to be in the gallery, but I'd like the members to make them welcome as they tour the buildings. They are about 35 grade seven students, along with four persons from the school helping them out. I'd also like to welcome the Mountain Secondary School band, which I believe should be somewhere in the gallery today. Some of the members may have had the opportunity to hear them play on the steps of the Legislature today. They are quite a band. They took first place in the Kiwanis music festival in Vancouver this year, first place in the Coquitlam music festival, first place in the Abbotsford music festival and second place in the New Westminster music festival. I'm told that's a record number of awards for any band in any single school year in British Columbia, and I'd like the House to make them welcome.

HON. MR. VANDER ZALM; In the precincts today, and hopefully visiting the House just a little later, is a group from Johnston Heights Junior Secondary School, and 50 exchange students from Prince Edward Island. On behalf of myself and the second member for Surrey, I would ask the House to bid them welcome.

HON. MR. BENNETT: I have a second introduction. Visiting the Legislative Buildings today are 70 grade seven students with three of their teachers, plus parents, from my home community of Westbank, across the lake from the beautiful city of Kelowna. Would you please bid them all welcome.

Introduction of Bills

LIMITATION AMENDMENT ACT, 1982

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

Bill 48 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.

Oral Questions

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL: Mr. Speaker, I have a question for the Minister of Transportation and Highways. The surveys and mapping branch of the Ministry of Environment, which is responsible for all aerial photographs and maps required by the government, was told yesterday that the two Beechcraft King Air 200 aircraft normally used for this work will not be available this summer. Can the minister confirm that these aircraft, controlled by the air division of his department, will not be available because they've been diverted to transporting Social Credit politicians around this province?

HON. MR. FRASER: Mr. Speaker, the two King Air aircraft referred to by the member for Atlin are on a scheduled service between Vancouver and Victoria, and they won't be on aerial photography. They're carrying government personnel steadily on a scheduled service between Vancouver and Victoria.

MR. PASSARELL: The minister is surely aware that these particular aircraft we're discussing are specifically designed for photography and, indeed, were originally purchased for this work. The surveys and mapping branch, whose work normally would be well underway because of the seasonal aspects of this work, have been completely frustrated in making alternative arrangements. Can the minister confirm that he has specifically rejected a proposal from the Ministry of Environment, whereby Environment would lease two additional aircraft and then loan them to Highways so the King Air 200s could be properly employed for their rightful purpose instead of shuffling cabinet ministers and government executives around on political business?

HON. MR. FRASER: Mr. Speaker, it is correct that they are equipped for that, but they are also equipped to haul passengers, and that's what they're doing. There are hundreds of public servants travelling between Vancouver and Victoria. That's the run they are on and they are far more economical than what we had on the run, which were the jets.

MR. PASSARELL: I thought there were commercial aircraft between Vancouver and Victoria.

Mr. Speaker, the logs for government aircraft are normally tabled with the budget. Can the minister explain why he has not yet tabled the government aircraft logs?

HON. MR. FRASER: The first part of your accusation is not correct. They are not normally tabled with the budget. I

[ Page 7784 ]

haven't got the logs. As soon as I get them, they will be tabled.

EXPENSES OF MINISTER OF
CONSUMER AND CORPORATE AFFAIRS

MR. MACDONALD: I have a question for the Minister of Consumer and Corporate Affairs. Did the minister receive approximately $1,509 of public money as payment towards a trip he took to Arizona at the end of February, 1981?

HON. MR. HYNDMAN: With respect to that and what may be related matters, I think I've made it extremely clear that until the report of the auditor-general is released I should have no comment on details. Following that I would be happy to comment fully.

MR. SPEAKER: The minister takes the question as notice.

MR. MACDONALD: In view of the fact that the auditor-general cannot deal with the question of extravagance — or even vouchers, if they are properly audited — in view of the fact that the auditor-general has made it perfectly plain that her work is one thing, legislative work is another thing and they can both go on together, and in view of the fact that these particular vouchers are not before the public accounts committee because they were paid after March 31, 1981, I ask the minister: when was this trip planned, when were the reservations for the trip made and what was the purpose of the trip?

AN HON. MEMBER: It was taken as notice.

MR. MACDONALD: No accountability?

MR. SPEAKER: Order, please.

HON. MR. HYNDMAN: Unlike the member asking the question, I do not presume to prejudge what will be in the report of the auditor-general. I shall take the question as notice and, as I said, be extremely happy to provide details and comment following the release of that report.

FUNDING FOR RAPE RELIEF CENTRES

MS. BROWN: My question is to the Attorney-General. Some time ago the minister took as notice a question which I asked him concerning the funding of rape crisis centres. The question pointed out, using the statistics of the Attorney-General's department, that in the 88 days since funding was terminated approximately 5,237 women could have been raped in British Columbia and the $151,000 earmarked for funding would have earned $5, 876.69 in interest. My question to the minister is: is he now ready to tell the House how many centres have received funding since February 26? Secondly, will the nearly $6,000 of interest earned be added to the $151,000 for distribution to the rape crisis centres?

MR. SPEAKER: Parts of the question are in order.

HON. MR. WILLIAMS: Mr. Speaker, the number of rape centres funded since the date mentioned by the member is one. We are currently completing the examination of six applications from organizations which are prepared to operate centres throughout this province. I wish to advise you, Mr. Speaker, and the member that much more than the amount of money that she mentions will be expended for this purpose.

MS. BROWN: I just want to confirm, Mr. Speaker, that the interest earned on that $151,000 is going to be included. That's all I'm trying to find out.

MR. SPEAKER: It involves a future decision.

CLIFFORD OLSON TRUST FUND

MR. LEGGATT: Mr. Speaker, my question is also directed to the Attorney-General. On February 25 and on April 14 of this year, the solicitors for the parents of the victims of Clifford Robert Olson wrote to the Attorney-General asking for information concerning the trust fund of some $100,000 which was set up, and they also asked for financial assistance to commence legal action. Could the Attorney-General advise why he has not yet responded to those letters which he has received?

HON. MR. WILLIAMS: Mr. Speaker, the matters to which the member refers and other aspects of problems associated with the parents of the victims of Olson are still receiving consideration. I hope to be able to give a much fuller response to the lawyers representing that group than would be possible if I responded to those questions.

MR. LEGGATT: Mr. Speaker, the solicitors for the parents also requested a copy of a legal opinion which the Attorney-General had prepared concerning the status of this so-called trust fund. I also understand he gave a commitment to them that he would provide a copy of that opinion so they would be assisted. Could the Attorney-General advise the House why he has not yet provided a copy of that special legal opinion he requested on the trust fund?

HON. MR. WILLIAMS: Mr. Speaker, I think that the premise on which the member's question is based is in error.

MR. LEGGATT: Would the Attorney-General advise why he has, on three separate occasions, cancelled proposed meetings with the parents?

HON. MR. WILLIAMS: That's not accurate. A meeting arranged with the parents was cancelled because of newspaper publicity, which the parents did not wish. I subsequently arranged for another date. The date was not convenient to the parents because of the shortness of notice. No further meeting has been arranged because of the sittings of this Legislature.

MR. LEGGATT: To the Attorney-General again, the Olson case is one that is almost without precedent in Canadian jurisprudence. The Attorney-General has treated it as such by authorizing payment of $100,000 to the murderer. Could the Attorney-General advise the House if he has now decided to recommend special legislation to compensate the parents of these victims for their catastrophic loss?

[ Page 7785 ]

DISMISSAL OF CROWN COUNSEL

MR. MACDONALD: I have a question for the Attorney-General. My question relates to the firing of A.K. Hoem, regional Crown counsel. In view of the fact that this Crown counsel, who was a bird dog of a prosecutor, was the one who recommended charges against the member for Central Fraser Valley (Mr. Ritchie) and was the Crown counsel involved in the preparation of evidence in the case of Ed Murphy, Douglas Holme and the surveillance that was part of that investigation, how can the Attorney-General justify his summary discharge because in the case of Duckworth and Cristensen the judge made very usual remarks about there not being enough evidence for any jury to convict? What was the real reason for the discharge?

HON. MR. WILLIAMS: Mr. Hoem has consulted counsel with respect to this matter. I'm not sure at the moment, whether a writ has been issued. I'll take the question as notice.

MR. MACDONALD: No writ has been laid before this Legislature. As far as I know, no writ has been issued at this point. The Attorney-General should answer to this Legislature for this kind of summary action, and not hide.

I'll ask the Attorney-General another question. In view of the fact that the Attorney- General, having punished Hoem for a judgment call, thereupon made the remark that he "can't say whether other persons are being disciplined, but that's a possibility," isn't that rank intimidation of prosecutors who are diligently applying the law without fear or favour?

HON. MR. WILLIAMS: The answer is no.

B.C. PACKERS LTD.

MR. LEA: Could the Minister of Environment inform me whether the government has met — through either him and other ministers or him alone — with representatives of B.C. Packers to discuss the closure of their groundfish plant in Prince Rupert? What was the outcome of that meeting?

HON. MR. ROGERS: Yes, we have met. There are several considerations that will be considered by the economic development committee of cabinet at our next meeting, which is next Tuesday. At that time we will make an announcement.

MR. LEA: Can the minister tell me whether he has informed the union involved of the decisions and recommendations that have been made so far? It was the union and a citizens' group that brought it to government's attention. Has the union been informed by the minister of what he just told me?

HON. MR. ROGERS: The union approached the economic development committee of cabinet. At the request of the union and at the recommendation of the committee, we had the meeting with the company. I have not had a discussion with the union or with the citizens' group since that time, because it is my intention to first report to the committee and then have the committee report to the people who brought us the request in the first place.

SEIZURE OF GOODS AT PRINCE RUPERT

MR. HOWARD: I would also like to direct a question to the Attorney- General. Inasmuch as residents of northern coastal communities must regularly travel — by North Coast Air Services and by other forms of transportation — to Prince Rupert to purchase household items and commodities like food, clothing and, indeed, alcohol, can the minister tell me why, on three separate instances on May 12, RCMP officers visited the North Coast Air Services Ltd. terminal at Prince Rupert and confiscated alcohol, some of it from sealed cartons, which had been left at the terminal for safekeeping? Can the minister tell the House if those recent seizures constitute the practice of the RCMP harassing residents in these outlying northern communities?

HON. MR. WILLIAMS: I am not aware of the circumstances that the member relates in his question. If he would provide me with the particulars, in addition to those he has given in his question, I would be happy to have the matter examined immediately.

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: Report on Bill 2, Mr. Speaker.

COURT OF APPEAL ACT

Bill 2 read a third time and passed.

HON. MR. GARDOM: Report on Bill 5, Mr. Speaker.

GEOTHERMAL RESOURCES ACT

Bill 5 read a third time and passed.

HON. MR. GARDOM: Committee on Bill 22, Mr. Speaker.

GASOLINE TAX AMENDMENT ACT, 1982

The House in committee on Bill 22; Mr. Davidson in the chair.

Sections 1 and 2 approved.

On section 3.

MRS. WALLACE: I note that in the explanation for this section it says: "compressed natural gas and liquefied petroleum gas are deemed to be liable to tax under this Act for the purposes of the Gasoline (Coloured) Tax Act and the Social Service Tax Act." I raised this point earlier with the minister, and he indicated to me that he would have an amendment before this House to ensure that the farm community would not have to fib about the use of natural gas in order to be tax-free.

The way this bill reads it means that if you buy natural gas to propel your vehicle you are tax-free, but if you buy it to use

[ Page 7786 ]

in the production of food on the farm, you will have to pay an escalating tax which is tied to inflation. The farm community has estimated that it's going to cost them something like $26 million this year on gasoline alone and that it will escalate to perhaps $75 million by 1990. Surely we can't let this section go without some explanation or assurance from the minister that natural gas is going to be completely exempt for farm production and not subject to this escalating gasoline tax which farmers are now faced with under the Gasoline (Coloured) Tax Act.

HON. MR. CURTIS: I don't recall that I said there would be an amendment as such, but I think I did answer the member's concern on this specific point when second reading debate closed.

The committee will know that a number of regulations and interpretations have to flow from this act and from any amendments to it.

MRS. WALLACE: Section 3 says:

"Section 4 is further amended by adding the following:

"(7) Notwithstanding this section and section 8, no person is required to pay or collect tax on compressed natural gas or liquefied petroleum gas that is purchased to propel a a motor vehicle.

"(8) For the purposes of the Gasoline (Coloured) Tax Act and the Social Service Tax Act, compressed natural gas and liquefied petroleum gas are deemed to be liable to be taxed under this act."

I think that's clear enough. If we pass this section, it says that they are deemed liable to tax.

My understanding of a regulation is that it cannot exceed the scope of the act. How can the minister assure this House that he's going to bring in a regulation which supersedes the intent of the act? It seems to me completely beyond the scope of this act. Just the assurance that this is going to happen under a regulation doesn't seem to be in line with legislative procedure or even in line with legislative possibility. If you have a piece of legislation that says something is to be taxed, there is really no way you can bring in a regulation under that act to say that it won't be taxed. Let me tell you, there are a great many farmers who are very concerned about this. Just the simple assurance from this minister that he's going to bring in a regulation when this act definitely says it's going to taxed is contrary to all rules and regulations of this Legislature.

HON. MR. CURTIS: Mr. Chairman, the member has expressed concern for the agriculture community. The concern is unfounded, because in the context of section 3, it is taxed and exempted under the Gasoline (Coloured) Tax Act. I've discussed this with the Minister of Agriculture and Food (Hon. Mr. Hewitt) and I must say that I think he's satisfied. I did allude to this in the closing of debate. Upon passage of this we will certainly see it as our responsibility to communicate this to the farming community in the province of British Columbia. I would share that with the critic, the member for Cowichan-Malahat (Mrs. Wallace).

MR. KING: I want to take up briefly with the minister some of the concerns expressed by my colleague for Cowichan-Malahat and to question the minister with respect to the application of this particular tax to greenhouse operators. There is one such greenhouse operating in Revelstoke. The minister can appreciate that that's a fairly cold climate with a very heavy snowfall. In order to provide a uniform heat for that kind of operation, there's a very heavy expenditure required in either natural gas or some form of petroleum fuel for heating over a long winter in our community. It used to be a fact that greenhouses were included as an agricultural operation, recognizing that they produce not only flowers for that type of commercial use but also vegetable crops and plants for distribution in the area. My concern is whether or not greenhouses may once again be exempted from that very onerous fuel tax as a valid agricultural operation, which I believe generally to be the case. I would like the minister's response.

HON. MR. CURTIS: The point raised by the member for Shuswap-Revelstoke is not related to a mode of fuel use in this section. I don't know how far I could go in dealing with this particular section, but the commercial use of any fuel is seen to apply under other statutes as taxable and that would apply in this case in this section. Farm use is deemed to be commercial, whereas the member for Cowichan-Malahat (Mrs. Wallace) was speaking of the movement of a farm vehicle — tractor or whatever — on a farm property. We could debate at some length the desirability of exempting from tax fuel used for heating in agriculture, but I think that moves beyond the ambit of this section.

MR. KING: I appreciate the minister's response. It just seems to me that under this provision there's a pretty wide latitude left beyond the use for motor vehicles, and the minister had indicated to my colleague that regulations would issue upon proclamation of these amendments. I see no reason why a simple regulation could not take account of the very difficult economic times that farm enterprises are having and go beyond simple exemption for motive fuel purposes. I don't think we're asking for a precedent here and, with due respect, I don't think we're talking about an unrelated thing. In the course of the past year I have had correspondence with the minister over this that he may recall. It seems to me that certainly there's latitude here to restore the status to what it used to be. It's my understanding from the greenhouse operators that the application of this taxation is a relatively new one — in the last couple of years. Prior to that they used to be adjudged as an agricultural enterprise and enjoyed the same exemption that we are now asking for. If there is a more appropriate place for the discussion, I'm certainly in the minister's hands on that. I would be glad to raise it again during his estimates if he thinks that's more appropriate.

HON. MR. CURTIS: I think it would be more appropriate under my estimates, and I look forward to that discussion. I cannot respond too readily, inasmuch as the fuels about which the member speaks would be taxed under the Social Service Tax Act and not the Gasoline Tax Act, which is being amended by this bill.

MRS. WALLACE: I hate to belabour the point, but we've had some experience in definitions by that ministry as to what constitutes a farm tractor, and I think here we have the same thing with a motor vehicle. What constitutes a motor vehicle on the farm? I'm a bit hesitant to leave it in the hands of the minister in view of the kind of experiences we've had previously relative to sales tax. He talks about regulations; my

[ Page 7787 ]

understanding is that he did indicate during second reading — I'll have to check the Blues on that — that an amendment would be forthcoming which would make this very clear. Once again, to leave this to regulations that are made by some person at some time down the road defining what constitutes a motor vehicle seems to me to leave it in limbo.

HON. MR. CURTIS: I cannot agree. A motor vehicle is quite clearly defined, and has been so defined over a good number of years in the province of British Columbia. When I spoke on budget day, I indicated that we were further broadening the exemption with respect to fuel for farm vehicles. I'm not aware of any confusion that has arisen, particularly since budget day. I want to see the broadest possible interpretation of the definition of a farm vehicle within the law. There is not only a dictionary description of a tractor, there is also one in terms of our interpretation. I offer the member the assurances of the ministry that we seek more exemptions, rather than fewer. I will be happy to share that with her at the appropriate time, when the instructions are issued by the consumer taxation branch.

Sections 3 to 6 inclusive approved.

On section 7.

MR. HOWARD: I have a brief question for the minister. This is the section that contains a minimum fine. In other words, when a person commits an offence and is found guilty, there's no discretion in the hands of the court to do anything else except to impose a fine: $200 for a first conviction, and for subsequent convictions not less than $500. What is the rationale for that?

HON. MR. CURTIS: There has been debate, and I'm sure there will be debate in other statutes this session, with regard to the minimum fine. This section does indicate that there is a minimum fine of $200 to $500 on a first conviction, and of $500 to $2,000 on a subsequent conviction. Some members of this committee disagree as to the appropriateness of a minimum fine. It should be pointed out that we are concerned about infractions that are much more than just simple mistakes but are, rather, deliberate attempts to evade a taxation statute. It's one of the unpopular aspects of being Minister of Finance.

MR. HOWARD: I think that's the argument the minister should be putting forward if no minimum were proposed: namely, that the determination as to whether it's a mistake, accident, deliberate attempt on the part of the individual to contravene the law or whatever is a decision the judge should make, not a decision the minister should make. I asked the minister first what the rationale was for a minimum fine. I don't think he dealt with that.

HON. MR. CURTIS: I'm sorry if I did not correctly and completely hear the member in his first remarks. We are attempting to bring a rationale to a variety of fines set out in taxation statutes. They have been discussed in committee and in the context of other bills. It is certainly not the intention of the consumer taxation branch to pursue someone who has made a simple mistake but, rather, the very deliberate and quite widespread infractions which occur. I feel this is appropriate. We discussed this at some length in my ministry through the course of the fall and winter. Again, we are concerned where someone, not by oversight but deliberately, sets out to evade the payment of tax which others, those of us who follow the rules, are paying.

I trust that answers the member. I'm not sure it will satisfy him, but that is the rationale.

MR. HOWARD: The rationale appears to be a desire to make the policeman the judge, or to make some unknown person in the public service, someone who examines the records, the judge and determinator as to whether it's an accident or whatever. It's usurping the function of the court.

In any event, I assume it's government policy to establish minimum fines for infractions. Am I correct in that?

HON. MR. CURTIS: Yes, that is correct with respect to taxation statutes. I can't speak for other ministries and I can't speak beyond this section, but that is correct. Fines have been left untouched for a good number of years.

In his preamble to the question, the member for Skeena indicated that this is to make the policeman the judge. I disagree; I don't see that occurring at all. After all, the consumer taxation branch of the province of British Columbia's Ministry of Finance determines if a charge in fact should be laid; and then the court process takes place. In the event of a minor infraction, of course we're not going to pursue, but the authority should be there for those instances where a deliberate infraction, the avoidance of payment of tax, in this or any other statute, is determined. The consumer taxation branch then would see that a charge is laid.

MR. HOWARD: Exactly the same sort of reasoning would prevail if there were no minimum. The consumer taxation branch or the minister, whoever makes that decision, is going to make it on the basis of whether or not they perceive a certain action to be accidental, or with intent to deceive or work fraudulently under the act. That exists now. We're talking about the fact that you are removing the discretion of the judge. You're intruding upon the discretionary power of the court to do that.

The minister says it's government policy with respect to taxation statutes. It's government policy with respect to the individual owner-operator of a retail gasoline service station. It's government policy with respect to the poor individual trying to eke out a living, who, if he happens to make more than one or two mistakes — if they are mistakes — may find himself in court automatically facing a $200 fine, or a $500 fine on a subsequent occasion; I'm talking about just the first offence. This doesn't jibe with the government's position on securities legislation. People in the securities business — stockbrokers, promoters or others — can engage in bilking the public out of thousands and thousands of dollars; and the minister's own government is proposing to this House that in those instances there be no minimum fine. The government's approach to the securities business, stockbrokers and stock promoters is that crooked dealings may take place with no minimum fine if they contravene securities legislation as proposed to this House, but they're going to nail the poor retailer, the individual owner-operator of a service station, with a minimum fine and give the court no discretionary powers whatever. Why is that? The two just don't mix, unless of course you're playing more favourites with the big-money people than with the operator of a corner service station.

[ Page 7788 ]

MR. CHAIRMAN: Before recognizing the minister, I will advise the member for Skeena that while the first part of his questions was very much in order under this bill, any reference to an act which obviously does not fall within the purview of the minister currently before us is out of order.

HON. MR. CURTIS: Mr. Chairman, I concur with your observation in terms of the comparison the member for Skeena has drawn. I am distressed that he would infer that. There are 178 people in 14 offices of the consumer taxation branch of the Ministry of Finance. History will prove the accuracy of the statement that they are not interested in the small infraction. They do not have the resources nor the time to make a nuisance of themselves and harass individuals who, for one reason or another, have made an error with respect to this particular taxation act. Quite the contrary, I Think the member knows that the resources of the ministry's taxation branch would be directed to those contravening the statute on a very large scale. Obviously that is the point. We do not have a history, through several governments, of going out and bothering individuals because there might have been a minor infraction. A certain amount of common sense is required and is used in a statute of this kind.

MR. HOWARD: I am not going to argue that point with the minister, except to point out to him that the act applies across the board. There are no exemptions in it about size of operation.

Secondly, the rationale the minister has just advanced to the committee is exactly the same type of reasoning and explanation that the Liberal government in Ottawa, under Pierre Elliott Trudeau, used to advance for its desire to get extraordinary powers from parliament and say: "But we're not going to use them." Then we find out some months or years later that they do use them. It is the same type of argument and the same sort of approach that the minister is using today — the doctrinaire approach and attitude of the Liberal Party in Ottawa. Have those guys in Ottawa infected this government all across the board? Have they turned them all into Liberals?

MR. CHAIRMAN: Order, please, hon. member. Again, we are on section 7, and the member was doing so well.

MR. HOWARD: We were doing so well until the minister admitted that he is basically a Liberal and that that is the kind of thing he wants in the act. He laughs about it, but that is precisely where we are.

MR. MITCHELL: Like many members on this side of the House, I would like to register our opposition to the minimum fine. I say this from a little bit of experience in the enforcement of many of these regulations that are on the statute books. It turns the courts of this province back many years, so that they do not have the discretion to consider the individual, the situation and some of the background that went into the particular offence. I feel that the minister is attempting to use all these regulations as revenue-producers. As you go back in the history of municipalities — especially in smaller communities — and read some of the history of our southern neighbour, you see that enforcement of petty little bylaws and regulations was one of their revenue-producers. In fact, the police were literally instructed in some cases.... I can remember many cases in my own experience where a policeman was hired, issued a uniform, a gun, a ticket book and a quota. Municipalities actually had a section in their budgets that depended on X thousands of dollars being raised by the fines that the police went out to collect. That was used to keep down the mill rate. I feel that all these minimum fines are designed for one thing: to raise money. In this court system fines cannot be used in this manner. I remember one time coming in from Port Renfrew — and I am glad I have the protection of the House — and I ran out of gas, so I siphoned the gas from my outboard motor into my car. If I'd been caught, I would have been faced with a minimum fine of $200, my name would have gone on the CPIC and my record would be on all the police records of Canada.

Another experience I had — and this is my personal experience — was travelling from Prince Rupert to Terrace, and at 1 a.m. running out of gas. I eventually found a house with some lights on, I went in, and the gentleman there had a number of chainsaws. He drained those chainsaws, we put the gas into the car, and he said to me: "You know, you're not paying any road tax on this. Don't get caught." All right, it was a matter of survival — either stand outside in the middle of the night between Terrace and Prince Rupert.... If I had been picked up, they would have checked and I would have appeared in court. They would have checked the CPIC machine and it would have recorded that I had a conviction. I would have been sentenced to a minimum fine for my second offence. For getting my family out of the wilderness into Terrace, I would have had a minimum fine of $500. Under the circumstances, Mr. Speaker, if I had presented that evidence to the court they would have accepted it. But because the judges and the courts would be tied to this minimum fine, the hands of the court would have been tied. I know the Minister of Finance would have chuckled with glee. He would have got another $700 from an NDPer, and this would have been a great feather in his cap.

The thing is, there are a lot of other people out on that street; there are a lot of farmers, there are a lot of sportsmen, there are a lot of loggers in the same position. A minimum fine that is that restrictive and punitive is going to destroy the intent of the court system and the intent of justice. It's going to bring in more revenue to the province. The public is going to have the same opinion they have in some of these smaller municipalities that use the fine system to raise revenue. Some of the terror stories that tourists who have travelled through some of the southern towns in the U.S. will tell you.... All they are doing there, between speed traps and petty little regulations — they're put into jail and they're fined — is raising money. I don't think that the court system or any of our regulations or any of our legislation should be used solely as punitive methods of raising funds. If we must raise money, let's raise it in the manner of taxation or royalties — along that line — but let's not use the regulation with a minimum fine. I say the minimum fine should be taken out, and the court system only should decide what the offence should be.

HON. MR. CURTIS: Mr. Chairman, I was attempting to conjure up the image of the member for Esquimalt–Port Renfrew draining chainsaws and then chewing his way home, but it isn't quite complete in my mind.

Mr. Chairman, I want to assure the member that this is not going to be a revenue-producer for the treasury of British Columbia. If we were to consider the costs involved in stopping that member of an evening while driving from point

[ Page 7789 ]

A to point B in order to find that he had taken coloured gasoline from a lawnmower, an outboard motor or whatever, I think that we would very quickly, before we even started any I paperwork, exhaust any amount of money which would be derived from the penalty section of this bill. Furthermore, nowhere does it say that because one is charged, one is considered guilty. This is designed — as I've said repeatedly, and as it applies to other statutes — with a view to the large user who would evade the gasoline tax statutes of the province of British Columbia on a deliberate and persistent basis, and therefore would erode the revenue base of the province of British Columbia.

To assist another member, I have indicated that there are 178 men and women employed in the entire consumer taxation division of the Ministry of Finance. While I do not condone, and I'm sure the member does not condone. the illegal use of coloured gasoline, surely he would have to agree — and past history will confirm this, rather than just my assurance this afternoon — that it is not our intention to harass the individual, nor is it our intention to stop literally hundreds of cars on a holiday weekend on the Hope-Princeton highway to determine if one or two have put some coloured gasoline into their automobile.

Let's keep our perspective on this thing. Our perspective should be that this is for someone who is very large and who is consciously, for purposes of evading tax, utilizing coloured gasoline. I know we can have the debate, but the member must understand what I've been saying. He must know that common sense has prevailed in the consumer taxation branch of the ministry. Even when that side formed government, common sense prevailed, and it will continue to prevail.

[Mr. Strachan in the chair.]

MR. MITCHELL: The one thing the minister seems to forget is that although he talks about the people in his own department, this becomes a regulation that is enforced by every policeman in this province. It becomes an offence that policemen, on their routine checks in certain areas, check for on a regular basis because of abuses. If there was a section in that act that gave assurance that people who were caught in an emergency would not be charged.... But when someone is out on the road enforcing these regulations.... The minister keeps talking about these large abusers of the gasoline tax. Because of this minimum fine, people are caught up in that net. There is nothing in the act that gives any chance for a person to give a reasonable explanation or that provides for an emergency situation. If he is picked up a long way from home where he's not known, he can be charged, because that is a part of an act, a provincial statute which is enforced.

This is my big fear. I'm not afraid for those who are going out purposely and abusing it. I can understand the need for the minister to have some teeth in it. The minimum fine goes back to bad legislation, and there is nothing in it. If the minister would say that he would bring in an amendment so that those who are caught in an emergency situation would be exempt, or something like that.... How many times do you have emergency exemptions? I know I've abused it twice that I'll admit to.

AN HON. MEMBER: How many times that you won't admit?

MR. MITCHELL: You prove it.

This is the situation that worries me. There is nothing in he regulations, and the minister, with his flowery talk, says t's only for the large abusers. But it's the little guy that gets picked up in the road cheek. that gets caught and has this minimum of $200, or $500 for a second offence. I think it's wrong.

MR. MUSSALLEM: It has often been said that confession is good for the soul, and I'm delighted to hear the hon. member for Esquimalt–Port Renfrew (Mr. Mitchell) make this confession. I only hope that if there is anything else that he has on his mind at this time.... This is the time to do it. I would say go forth and do it no more.

My view of this act — and I'm supporting this section — and as the minister has mentioned a couple of times, is that the opposition seems to have failed to see.... This is not a small amount of money. I remember in 1971 when I think a study was made on how much the government was losing from this coloured gasoline tax act. There were amendments made then to try and stop the losses. The losses were estimated to be $1.25 million, and that was considered a very low estimate. I imagine at the present time it could be millions. It's a larger figure than we think, and I applaud the minister's position. He's putting those who are making a business out of this on notice that they will be caught and they will pay the fine. It's not the man who takes a little gas out of his lawnmower to get home — I don't think the ministries interested in that, and neither are the judges. But the government is interested when we find that taxes are being evaded — the neighbour's paying the bill. I think evasion of tax has to have a high penalty, and this traffic is very, very high.

I understand that at one time gasoline was bought as clear gas, and the supplier supplied the individual with an envelope of colour to put in his tank. They never put the colour in. Now it's all coloured gasoline. But it didn't stop the traffic. The traffic is still on, as many of us know.

I applaud what the minister is doing. In this Legislature only a little while ago — not this session but last session — on the Pollution Control Act they were saying that having a small fine for polluters is a licence to pollute. The fine is too low and we should make the minimum fine higher. You can't have it both ways. This heavy traffic calls for a high fine to give notice that they will be charged and if found guilty will be fined heavily. The second offence is worth $500. That's a good way to do it, because that's bad traffic and should be stopped. I applaud the minister's section, and I will vote for it.

MR. LEGGATT: I really have trouble following the logic of the minister and my colleague for Dewdney. The minister says that it's designed for the large user. The member for Dewdney suggests that the fine should be large. I agree. But the section says: "Not more than $500." The maximum under this section is $500. If you've got somebody big out there defrauding the government of millions, which my friend suggests is probably taking place, why are we only fining him $500 maximum? Surely we should have a higher maximum and no minimum. That's what makes sense, because what we want to have is the flexibility so the court can make some decisions around the real justice of the case. What you're doing is giving the court a discretion of $300. That's the only discretion they have under the section. They either fine somebody $200, $300, $400 or $500, and that's all the

[ Page 7790 ]

discretion they have on a first offence. If you've got somebody big who you really want to tackle, a $500 fine is a slap on the wrist if the guy is making millions, as my friend here suggests could be happening.

The point is still one that I don't think the minister has accepted. I still believe he is listening to the advice of those who wish to have their departments more effective. I can understand that kind of advice being given, but it's a very big price to pay for that kind of efficiency. A $200 minimum fine is not a deterrent to this offence, but it means a big, heavy injustice for someone who, for example, might violate section 23. It's not section 23; I think it's section 5. It's the one that deals with failing to comply with the return. That can be inadvertence, but there is a mandatory provision in here that you must make a return with regard to your sales, etc. That section doesn't say only if it's advertent or deliberate. It can be inadvertent. The person doing it through inadvertence can be caught up in the law and face a $200 minimum fine with the best will of the people enforcing it. You're handing a lot of clout to that guy who walks into the service station and says: "I can nail you for a $200 minimum fine." If he doesn't like the way he combs his hair, he can proceed. Mat we want is the discretion on the part of the judge so he can say: "Wait a minute. This really wasn't anything serious; it wasn't anything deliberate." Then he can treat it with a sense of justice and fairness.

That is why the minimum fine question is the only one we're dealing with. I could buy the idea of increasing the maximum if you've got someone who is playing fast, loose, high, wide and handsome. Again, that's when you want to give the judge some discretion so he can nail the guy for a venal offence, one that has defrauded the government of a great deal. But this section doesn't say that. All he's got is a $500 fine. There's a big difference between a conspiracy to deliberately deny the government their fair taxes and somebody who inadvertently fails to make a return or perhaps slips up once, as my colleague may have done at some time in deliberately putting chainsaw gas into his car.

It's all very well to say that they probably don't want to fine or charge people like that. I'd rather have a discussion so that if they do, the court can say: "You haven't done anything wrong, brother. Goodbye." That isn't what we have here; what we have is justice by bureaucracy. That's why we oppose it. It is wrong. I am very interested to hear the minister say that it is a policy of his department that on taxation statutes there should be minimum fines. That is also a policy of the income tax department. It is a policy throughout most tax statutes. That doesn't make it any more right. It is a very wrong policy. It is a policy that denies justice to people. For that reason we oppose this section. We think there should be no minimum, but on a first-offence maximum I would say the minister would find a willing ear on the opposition side if he felt $500 wasn't a sufficient sanction for a serious offence.

HON. MR. CURTIS: I think the member who has just taken his seat is perhaps misinformed on one point. That is that the service-station operator is not required to file a return in this regard. That is more than just a detail. That immediately offers a safe haven for the individual service-station owner or lessee who might inadvertently permit some coloured gasoline to be used improperly. He is not involved at all. This occurs at the bulk-plant or the oil-company level. That is where the return occurs. The member and I disagree. He has said, "Why not make the maximum much higher?" but, as I observed to him in an interjection on another bill recently, it is not just the fine but the tax which has been evaded. It could be a fair amount in the event that someone is charged and found guilty under this section.

Section 7 approved on the following division:

YEAS — 27

NAYS — 25

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

Sections 8 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.

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

Bill 22, Gasoline Tax Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 23, Mr. Speaker.

MOTIVE FUEL USE TAX AMENDMENT ACT, 1982

The House in committee on Bill 23; Mr. Davidson in the chair.

Section 1 approved.

On section 2.

[ Page 7791 ]

MRS. WALLACE: I don't want to belabour the argument, but section 2 is the same as the section we just dealt with in the previous bill. This section imposes minimum fines. We have taken a very definite stand and have presented some very definite arguments expressing our opposition to this concept. The minister tries to tell us that they've only got 178 employees, or 118 — whatever it is — and that somehow they're the ones who don't have time to go around picking up these people. I would suggest this is something that is outside the venue of the Minister of Finance when the charge is actually laid. It has nothing to do with the Minister of Finance. It is a police officer who does this, and the case then comes into court. A minimum fine is a concept we cannot accept. We want to go on record at every opportunity to oppose this particular section, and we so do, Mr. Chairman.

Section 2 approved on the following division:

YEAS — 27

NAYS — 25

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

Sections 3 to 5 inclusive passed.

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 23, Motive Fuel Use Tax Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 24.

FINANCIAL ADMINISTRATION
AMENDMENT ACT, 1982

The House in committee on Bill 24; Mr. Davidson in the chair.

Sections 1 and 2 approved.

On section 3.

MRS. WALLACE: Mr. Chairman, I have some real concerns about this particular section because of the government's move here to deduct management fees from special trust funds and any funds with respect to which management services are provided by the ministry. Certainly the special funds which have been set up by previous administrations, many of them by the one of W.A.C. Bennett — or at least the few that are left, I should say, perhaps — really should remain inviolate.

[Mr. Strachan in the chair.]

But I am even more concerned about the trust funds, because since the recapture of the trust funds, those funds now sit in general revenue. with moneys — not all government money, as in the case of the Farm Income Assurance Fund; that's the one I'm thinking about — from producers bearing interest which will, in all probability, go into general revenue. Now this particular section of this bill makes it possible for the Minister of Finance, at his discretion, to charge management fees with no limits. You know, the harder up this government becomes, the more grasping it becomes. Here is a real move to go into collecting money, transferring dollars into government coffers out of the pockets of people — particularly in the instance of the Farm Income Assurance Fund where we have no assurance that that interest is going to be calculated to help defray the costs of farm income assurance. There's no assurance of that at all. We may find that those programs are limited or restricted because of that. Now we have a case where the minister, at his discretion, not only doesn't have to pay the interest on that but can turn around and charge a management fee for administering that fund. It just gets to be a little heavy-handed, Mr. Chairman, and certainly it's not the kind of legislation that I think we should be discussing at this particular time when all those funds have been recouped and put into general revenue.

Now, after wiping them out and putting them into a trust fund, we're going to be faced with a management fee to operate them. To me, that seems just out of the realm of reality entirely. I'm really concerned about this. There are no limits. It's a discretionary thing, so it can be put on at the whim of the minister in any amount that he happens to see fit. I have some great misgivings about this, Mr. Chairman.

MR. STUPICH: Mr. Chairman, I might not have said anything, depending upon what the minister answered, so I just don't know. I'll add to the question by asking whether or not this legislation would give the minister the authority to levy an assessment for administration purposes against all of the Crown corporations, for example. The minister is the fiscal agent for a number of them. Does that mean they will be charged a fee for service, whether or not they want that service? Does it mean that the pension funds, for example,

[ Page 7792 ]

would be charged a fee for service? Does it open up the door for charging all of those funds a fee for service?

HON. MR. CURTIS: Mr. Chairman, yes, the answer is essentially as the member for Nanaimo has put it. In the Ministry of Finance we administer about $8 billion in special funds and trusteed funds, as the members opposite would know. It is the intention that we will charge a fee for service to more properly reflect, I think, the cost of servicing that particular fund. There are some exceptions, and I dealt with these in the closing of second reading debate. In the First Citizens Fund, as an example, there would be no management fee, because that does not form part of consolidated revenue, so that one is exempt. I have no problem with the principle of charging a fee, having served for a short time on a regional district, where indeed the regional district would be requested to undertake a specific service for a specific portion of the region, not applying to all. Therefore a fee would be levied. That might be an administration fee with respect to a swimming pool or a special service in an electoral area. It had no direct relationship to all the other parts of the region. I think the principle of a management fee is not unknown and is probably more appropriate than that which has been the case in the past. Certainly there is no intention of being unreasonable here. It's going to be set at a level to recover the cost, so clearly someone responsible for a fund upon which a fee is levied would quite properly go to the media very quickly and say it is an absurd charge. It is to recover the costs. I think that we're going to find the two sides of the House in disagreement on this point.

MR. STUPICH: Mr. Chairman, I wish I could feel confident that the minister will always be reasonable. I'm thinking, for example, of the pension funds, which the government is really ripping off by borrowing money from the funds and paying 9. I percent, at the same time as it had in excess of a billion dollars — it doesn't today — in various term deposits on which it was probably earning something in nature of 16 percent. Without having the authority to levy any fee they were making 7 percent interest on something in excess of $220 million. I don't feel confident that the minister will always be reasonable.

I don't think we can feel confident about the minister being reasonable in dealing with B.C. Hydro. We know that water licence fees have been increased so that the users of electricity will pay an extra $150 million into government coffers in 1982. I wonder how much more this is going to mean the users of electricity will have to pay for electricity so that B.C. Hydro in turn will be able to pay the government the management fee. In short, Mr. Chairman, I would ask the minister how much money he expects to raise from this source in the fiscal year ended March 31, 1983?

HON. MR. CURTIS: Mr. Chairman, about $3.6 million in all, and that can be measured against the amount which I indicated earlier — in excess of $8 billion. Further, I guess it would be more appropriate in my estimates, but the returns on pension funds are higher than the member has indicated. Certainly we've been moving toward market, but I feel that doesn't belong on this section. I would agree with the member in terms of what happened in the past. That doesn't happen now.

MR. STUPICH: Mr. Chairman, it may be more appropriate in estimates, but in this case I was dealing with the money the government has borrowed from the pension funds to finance the deficit that they incurred on March 31, 1976. At last reading that was 9.1 percent. The minister agrees, Mr. Chairman, for the sake of Hansard.

HON. MR. CURTIS: I now hear precisely what the member was speaking of. He was speaking of one specific matter, and I concur that he is correct. I was speaking in mote general terms with respect to the amount which is realized on pension funds generally, particularly in the last period of high interest rates.

MR. CHAIRMAN: The Chair also recognizes, hon. members of the committee, that this section does discuss a management fee.

MR. STUPICH: The discussion right now is hinging on whether or not the minister can be relied upon to be reasonable. As I pointed out with respect to stealing money from the pension funds, seven points on $200 million means $14 million a year from that one bit of larceny. I was going to say petty larceny, but it's anything but petty.

SOME HON. MEMBERS: Order!

MR. CHAIRMAN: The hon. member is not imputing any dishonour to another hon. member?

MR. STUPICH: Of course not, Mr. Chairman. You know I wouldn't do that. It's the government that's being larcenous, not the minister.

The minister gave us the figure of $3.5 million, and I appreciate it. My next question is: how much of this is coming from the pension funds and how much from B.C. Hydro? I know other members are interested in other areas, but I'm concerned about those two.

HON. MR. CURTIS: I don't have a precise breakdown, but I think one could work out the factor in terms of the amount of money which would be rolled over or which would be accessed from time to time. As the member knows, some of our money is out for a very short period of time, and in other instances it's out for much longer. I'm sorry, I don't have that detail.

MR. STUPICH: When we do get to the minister's estimates, I would like to ask him how much of this is expected to be raised from B.C. Hydro and how much from pension funds.

MR. HALL: This question of a management fee, Mr. Chairman, raises a philosophical question in terms of a service other than those services currently being provided by Crown corporations that have been set up by this government to do work which was previously done by line departments of government — namely, Public Works or Finance. I refer, of course, to B.C. Systems and B.C. Buildings. There was a time when the work done by those people was work which was normally discussed in here under estimates. That work was taken out of our direct purview by establishing Crown corporations. Now we've got a different kind of thing. We have here a ministerial function, a non-hardware ministry,

[ Page 7793 ]

and philosophically I haven't quite made up my mind about that yet. I hope it will always be an ever-changing sort of approach. So we have a new philosophy or, at least, if not a new philosophy, a new attempt or approach, and that is the management fee. I want to ask the minister if he envisions a point in time when the Ministry of Finance will be charging out its services as the Queen's Printer does, as B.C. Systems and B.C. Buildings do. In short, how will he recover the cost of the Treasury Board? The Treasury Board, with its ever growing staff, doesn't do all its work for this minister. It does its work for the whole of the administration. In fact, Treasury Board can be found everywhere. At one time it was the Public Service Commission, but now it's Treasury Board. Somebody's won a fight over there, I would imagine, and this gentleman looks like the winner.

To get back to the section and discuss management fees, I think it's important to know where we're going, and this minister is indelibly imprinting his particular style of administration on the government. I want to know whether that indelible footprint or palmprint is the one we really want to see. In order to be able to vote intelligently for this, I would like to know where we're going with this idea,

HON. MR. CURTIS: The member has raised an interesting point. Obviously — and I don't say that in a derogatory sense; I say it perhaps to myself — the Ministry of Finance cannot levy a fee against other ministries or sections of government for every single activity which we undertake. The second member for Surrey has raised the question of the Treasury Board. Would the Treasury Board at some point say: "In order to process your request, ministry X, that will be 2 percent of the cost of your request"? No. we're not contemplating that at all. I would certainly resist that if it were suggested within government. But here we're speaking of, as I've indicated and as the member well knows as a former minister, the amount of time and skill required to administer several billions of dollars. I indicated this in response to an earlier question.

From the discussions we've had within the ministry which have led to this point in the House, we feel as we bring a number of people into the treasury section — not Treasury Board — that it is appropriate to charge, rather than the general taxpayer, the fund or activity which is forcing us to do this work. It is appropriate to charge a fee for that. I used the comparison earlier on of another level of government, which may or may not assist members in appreciating the reason for this. I don't expect them to accept it blindly, but I certainly have no intention of seeing the ministry, so long as I am responsible for this portfolio, levying fees within government.all over the place. In this case it's quite, a significant task, and we can, directly trace the travel and activities, here or out of province, which are required. I think it's only appropriate, in the interests of the general taxpayer, that we attempt to recover some of that cost.

[Mr. Davidson in the chair.]

Section 3 approved on the following division:

YEAS — 27

NAYS — 24

Hon. Mr. Williams requested that leave be asked to record the division in the Journals of the House.

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 24, Financial Administration Amendment Act, 1982, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Committee on Bill 31, Mr. Speaker.

AGRICULTURE AND FOOD STATUTES
AMENDMENT ACT, 1982

The House in committee on Bill 31; Mr. Davidson in the chair.

Section 1 approved.

On section 2.

MRS. WALLACE: I would like to ask the minister for an explanation of this particular section, which appears to remove the limit on this bill. As I understand it, the previous bill allowed only 25 percent of the payments to come from the provincial treasury, and this bill apparently removes that 25 percent limit. As this piece of legislation implies federal involvement, is the minister anticipating a further extension

[ Page 7794 ]

of the ARDA agreement? Or is he expecting that it won't happen, and that is why he is removing this limit? If so, why is no funding provided for in this bill? Where is the funding coming from? Is this just a nothing piece of legislation?

I would like the minister to explain what he's trying to do here.

[Mr. Strachan in the chair.]

HON. MR. HEWITT: I'm looking at section 2 of Bill 31, which is the Agricultural Credit Act amendments. The member seems to be talking about section 1, which deals with the removal of the 25 percent limit. I'd just like some clarification.

MRS. WALLACE: I'm sorry. Yes, it's section 1.

MR. CHAIRMAN: Section 1 has been passed. Shall section 2 pass?

HON. MR. HEWITT: Mr. Chairman, I believe the member was speaking on section 1. I'm quite prepared to respond to the question raised. She may wish to ask leave.

MR. CHAIRMAN: Leave can't be granted. The section has been passed, and the committee has no authority to do that.

MRS. WALLACE: On a point of order, Mr. Chairman, you were not in the Chair at the time that we started discussion on this bill, but there was a great deal of noise in the House at the time. In fact the Chairman called for order at that point to get some attention. We've obviously slipped over section 1 inadvertently. If there is some way that we could revert to it, I think it would be in the best interest of both sides of the House. I ask for leave.

MR. CHAIRMAN: Please proceed on section 2.

MRS. WALLACE: If the minister would answer the question then.

HON. MR. HEWITT: With regard to the Agricultural and Rural Development (BC) Act amendment, by deleting section 3 (2) of that act, it allows some flexibility for the provincial Minister of Agriculture and Food to expend more than 25 percent of the amount expropriated in the fiscal year. If the member was looking at the original legislation, she'll note that where no agreement has been reached or there is no anticipation of an agreement being reached, we would not have the flexibility if we don't enter into an agreement with the federal government. We would be limited to that 25 percent restriction. We may wish to proceed to spend those moneys within my budget on a provincial type of program. As you are aware — and you raised it in my estimates yesterday — at the present time we are in discussions to extend the current agreement, which falls due in July of this year, for another year. Failing that, we would not have the ability to spend more than 25 percent.

MRS. WALLACE: In effect, it would appear that you are not anticipating successful negotiations with the federal government on this. As a result of that, we're having several million 50-cent dollars down the tube because we will lose that portion of the commitment that hasn't been expended by the feds. There is no way that this is going to provide the use of that extra federal money; this is just going to provide the provincial share of about $5 million. We will lose that other $5 million unless you're successful in negotiating an extension of the ARDA agreement. Is that correct?

HON. MR. HEWITT: Repealing this particular section gives us the flexibility to ensure that we do have a type of program available to the farm community. I am not anticipating that we will not get an extension of that agreement. I'm hopeful that we will. I've had some discussion with the honourable Herb Gray. We are working now to put together an agreement which will allow us to have that extension. If it is granted, there is no problem; if it wasn't granted, for whatever reason, it would still enable us to have the flexibility to proceed with a program of our own.

MRS. WALLACE: Section 2 of Bill 31 amends section 2(2) of the Agricultural Credit Act. It appears that this extends the definition to include more items. Is that the purpose of this amendment to section  (2) under 2(h), where it adds: "purchase of plant materials and supplies, the purchase of production quotas and the acquisition of working capital"? Is this an addition to the scope of this act?

HON. MR. HEWITT: That particular amendment is basically to clarify section 2 of the Agricultural Credit Act. The wording that was in that particular subparagraph (h) tended to leave some confusion in the minds of those people who are well versed in legalese. This clarifies it and indicates that it allows for a new subsection, you might say, and then provides for other purposes relating the development of the operation of farms as are authorized by regulations. It expands that and gives us the ability to cover all the items, plus others.

MRS. WALLACE: I thank the minister for his explanation. It's both for legal reasons and to expand it.

Section 2 approved.

On section 3.

MRS. WALLACE: This of course still deals with the Agricultural Credit Act. As I recall, this section 4(2) that's being repealed is the one that allows the minister to discount a loan. Why is he repealing this section?

HON. MR. HEWITT: We have repealed section 4(2) of the Agricultural Credit Act, but if the member would look at the amendment bill, she'll note that we have added section 4.1(1), which deals with discount or reimbursement of loan principal or interest. Section 4(1) in the original act deals with the lending of money. We also add section 4.2, which deals with the recovery of moneys that may have been paid out improperly. We've expanded that section. Also, Madam Member, as mentioned in second reading, we have included in section 4 those references that were in the Agricultural Land Development Act. This is the consolidation I talked about in second reading, which would allow the Agricultural Land Development Act to fall under the Agricultural Credit

[ Page 7795 ]

Act. Then we will have all our financial credit programs under one piece of legislation.

Section 3 approved.

On section 4.

MRS. WALLACE: In his response to my question about section 3, the minister in fact gave me some information about section 4. I therefore waited until we moved on to that. Certainly this is a very debatable section. The provisos that were established under the Agricultural Land Development Act, whereby you took a claim against land and applied it to land, had some reasonable basis. To take any agricultural credit.... If a farmer defaults through high interest costs, let's say, or for whatever reason, that credit may be on any number of things, as we have just talked about in a previous section. That credit could be on the farm equipment, the quota, the machinery, I would expect on the stock, the animals, the birds, whatever. If he defaults on the loan, this section gives the minister the right to put a lien against his property, to file with the Land Registry in two different ways. I'm trying to find the exact words here:

"The minister may forward to the Surveyor of Taxes for a rural area, or to the collector of a municipality for land in the municipality, a certificate containing a description of the land, the name of the farm operator or of the owner or occupier, and the total amount outstanding, whether then payable or not.

"(2) The Surveyor of Taxes or the collector shall add the amount to the assessment roll and it shall then be deemed to be taxes for all purposes of the Taxation (Rural Area) Act or the Municipal Act, including collection and recovery."

It's taking that loan, which for some reason.... Certainly there could be a good many reasons in this time of high interest and low return, as well as the cost-price squeeze that farmers are facing. This farmer could find himself with his whole property gone because he simply cannot meet that tax bill. This seems very heavy-handed treatment for the farm community at a time when we're very critical of banks for foreclosing too quickly; at a time when we are talking a lot about extended credit, when members of the business community are approaching the banks and asking them to hold off on foreclosures. Here we have a piece of legislation that is going to put the farmer in a very vulnerable position, where any debt that he may incur on any kind of property or equipment can immediately be applied to his tax bill. And if he can't pay his taxes, of course we know what happens — he loses his property. This particular section seems very heavy-handed and unfair treatment.

HON. MR. HEWITT: Mr. Chairman, I hope I can clarify this for the member. She is dealing with two separate issues. Section 4(2) primarily deals with interest reimbursement, where we have paid an amount of money to a farm operator, calculated under the interest reimbursement program, and have found at a later date that he is not eligible for that. Therefore we have the ability to deduct the amount that he has been paid in error from any future money. When you move to section 4(2)(1), under the heading of "Debt treated as taxes," and then over the page to sub-subsections (2) and (3), what you're seeing there, Madam Member, is a transfer across, almost word for word, of sections out of the Agricultural Land Development Act. It's just providing, in the Agricultural Credit Act, the same sections that were in the Agricultural Land Development Act.

There's a difference between those two sections. One is a recovery of moneys paid improperly to an ineligible person. The other is a debt that was not repaid, and therefore the ability to place a charge on the tax notice or assessment roll and to register a charge in the land titles office. There are two separate issues being dealt with there.

MRS. WALLACE: It's that second issue that I'm taking exception to. You may recall that I indicated that that may have been reasonable for a debt which occurred strictly related to the land; but when you take any debt that a farmer may be responsible for and has government backing for under the Agricultural Credit Act — that can be for any number of things, including what we've just passed on quotas, machinery and all kinds of different things — and you take that and put into place those dollars owing, which may be quite a sizeable amount, to such an extent that the farmer has to fold up his tent because he's not going be able to meet that.... It's going to be considered part of his taxes. He's not going to be able to pay them. He's going to be in default of his taxes and he's going to lose his operation.

It seems to me that this piece of legislation is simply driving farmers into bankruptcy. It seems a very poor time to bring this kind of step into place. It’s very heavy-handed at a time when interest rates are so high, and the minister's own interest reimbursement program is so limited that it's hardly doing anything to help the farm community. Those kinds of costs are going to accrue, those kinds of situations are going to happen, and we're going to find farmers forced out of possession of their land as a result of this piece of legislation. It's an unfair way to treat the farm community at a time when financial costs and interest rates are so high. Farmers are facing a tremendous amount of debt, much of which is out under the Agricultural Credit Act. I just cannot accept that, Mr. Chairman.

Section 4 approved on the following division:

YEAS — 27

NAYS — 25

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

[ Page 7796 ]

Sections 5 to 8 inclusive approved.

On section 9.

MRS. WALLACE: I want to congratulate the minister on this section. I'm very glad that the Minister of Finance (Hon. Mr. Curtis) is in the House, and for his information I would like to read the section. Section 10 is amended and renumbered, and "the maximum penalty that may be prescribed or imposed for contravention of a regulation is a fine of $2,000." No minimum, Mr. Chairman.

Sections 9 to 13 inclusive approved.

Title approved.

HON. MR. HEWITT: 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 31, Agriculture and Food Statutes Amendment Act 1982, reported complete without amendment, read a their time and passed.

HON. MR. GARDOM: Committee on Bill 12.

HEALTH COST STABILIZATION ACT

The House in committee on Bill 12; Mr. Davidson in the chair.

On section 1.

MR. COCKE: Mr. Chairman, we will squelch the rumour that the House is running about as well as the rest of the government. What we're dealing with here is an appropriation — how we call it stabilization I'll never know — of $77.8 million for hospitals. You'd never know that the hospitals or the health-care system can look forward to this appropriation, because they feel they've been robbed. We know that there is a shortfall of at least $84 million in our hospital budgets this year.

Mr. Chairman, a year ago we warned that the cutbacks in the less expensive areas and most productive areas of health care would severely damage the system. We're finding that that's occurring, which is not to suggest that this is the only problem we face. I am suggesting that if we saw real stabilization in this section, if we saw an effort to put some money into reorganizing at the community level, instead of spending all of our time totally preoccupied with reorganizing the ministry itself.... When we discussed this bill in principle yesterday, I suggested that the minister's further expenditure on his report to, among others, the Socred caucus.... It's a report that must have cost a fair amount of money and one that in this day and age, unless it's a piece of political propaganda, shouldn't even be considered by anyone knowledgeable in the field of health care. One of the things that report said was that we in B.C. have a very high utilization of hospital beds. I said yesterday and I say again today that that was just a terribly unfair comparison. Yes, the report indicated that our hospital days are something in the order of 8.5 compared to anywhere from 4 to 6 in the United States. Comparing what to what?

I can remember going to Prince Edward Island years ago, and at that time they took care of chronically ill people in chronic hospitals or at home. For some unknown reason, our hospitals have been overloaded — and I'm talking about our acute hospitals now — with chronically ill people. It's a system that is unable to respond to the needs of the people of B.C.

I suspect that most of the $77.8 million that we're voting for here has been spent. I also suspect that it is a means of broadcasting that the government is doing something. Moreover, it's a means of putting another item in the budget. Why wasn't it there in the first place?

This is not the place for a prolonged debate on health care. If we ever get to the minister's estimates, that's where I feel that debate should occur. But I believe that in this province today we're being badly served with a totally disorganized health-care situation and that the expenditures should be on coordination. I don't suggest for one second that we don't have a large budget; we do. We know we get major sums from the federal government and we know that we get major sums from user fees, but I'm talking in excess of half of the $2.2 billion in the budget. In excess of half of that comes from elsewhere.

We will all be much more satisfied when we see a streamlining that will make our health system something to be proud of in today's terms, so that we will not be facing a waiting list for elective surgery of some 12,000 people and will have a health system that will provide us an opportunity to save lives, not divert ambulances. I suggest that then the people would be most grateful.

We're not voting against this. It's an addition, probably an afterthought forced upon the ministry after having spent the money. I'll support the section.

HON. MR. NIELSEN: I have just a few comments. I agree with the member for New Westminster that the appropriate place to discuss the overview of health care in the province is during the estimates, which will be along at the appropriate time.

The member commented on an overview, nonetheless, with respect to health. I would agree with him that the people of any province — our province of B.C., certainly — would feel more comfortable if they felt that the delivery of health care across our country was not in any danger at all. That is one of the concerns that many ministers of health in Canada are investigating now because of their concerns along with the concerns of others.

The moneys which are being appropriated in this bill will be used for various aspects of health care in the province, not only for hospitals, although hospitals will receive a portion of that money.

I am just commenting, not arguing, about figures. One of the problems which we find in the Ministry of Health, and in the health field in British Columbia, I think, has been a desire — not necessarily for negative reasons — or method which has developed over the years where it is very difficult to accurately evaluate costs in the health field in a precise form. There is no question that over the years, for reasons not

[ Page 7797 ]

immediately known — maybe reasons which have been forgotten — health costs were deemed to be in a category quite inappropriate for that expenditure. That is beginning to change and an attempt is being made to specifically identify costs and to develop programs which more realistically approach the funding method.

The final comment I have is that I share the concern of people in the health field, particularly in the hospitals, where they argue that to some degree they are trapped by a system which is in need of considerable overhaul. That is being considered and done. For purposes of this very brief bill, the $77.8 million will assist the ministry, obviously, in paying out moneys necessary for health-care costs in the province.

Section 1 approved.

Title approved.

HON. MR. NIELSEN: 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 12, Health Cost Stabilization Act, reported complete without amendment, read a third time and passed.

HON. MR. WILLIAMS: Committee on Bill 40, Mr. Speaker.

HYDRO AND POWER AUTHORITY
AMENDMENT ACT, 1982

(continued)

The House in committee on Bill 40; Mr. Davidson in the chair.

On section 2.

MR. COCKE: Again in this section we are giving Hydro a blank cheque. There has been a tremendous amount of criticism of Hydro and their ability, as a Crown corporation, to place this province deeply in debt. This government, which tries desperately to make sure that they don't have an operating deficit from the governmental activities, certainly gives a creature of this government an opportunity to carry us deeply in the hole. We are moving Hydro's borrowing from $7.2 billion to $8.3 billion. That is $1.1 billion of increased borrowing in a time of restraint. I find the only aspect of this section and bill that leads me to be rather less accusatory than I was the last time it came before me is that it isn't an ignominious bill this time. I do believe, having listened over the years to criticism of the fact that Hydro has not provided sufficient research into alternatives, that they've been as slow as can be in the development of geothermal power. I know we're getting somewhat nearer to the first geothermal power station in the interior or up around Pemberton. Those are the kinds of things we should have been watching for and enthusiastically applauding. Instead, we say: "Spend her. Take your $1.1 billion and run. If you want any more, come back next year to the Legislature and we'll give it to you again."

I wonder what the discussions are between the cabinet and Hydro when they come in asking for this kind of borrowing power. I think the government listens to the minister who is on the board. He becomes totally convinced that the only way to go is to continue to throw us more deeply into debt, and the cabinet says:"Okay, let's prepare a bill, bring it before the House." They, prepare a section such as this, put it before the committee, and the committee votes to give them additional borrowing power of $1.1 billion. I wouldn't mind so much if I didn't continually hear this government talk about our not being in debt. Since this group has been in power, we have had more Crown corporations than Carter has pills. There's anew Crown corporation developing every day.

I'm getting right back to the section, Mr. Chairman. The section reminds me of all the borrowing that's going on. What could be a greater reminder than $1.1 billion?

Mr. Chairman. I find it very difficult to support this section. I find it particularly difficult with all those Liberals over there. Those Liberals in that cabinet use to sit on this side of the House and vote against this section every time it came before the committee. I sat and witnessed it year after year. The Attorney-General (Hon. Mr. Williams), the Minister of Intergovernmental Relations (Hon. Mr. Gardom) and all the rest of them voted against that $1.1 billion — or whatever the sum was at that time. They won't vote against it today, nor will anyone on the government side. The reason they won't vote against this $1.1 billion increase in borrowing power is because that government is a creature of Hydro, not the reverse. It's a gargantuan monster gone wild. It's got us so deeply in debt — and continues to get us deeper in debt — that we are now standing here in the quiet of the afternoon and giving them another $1.1 billion.

The Health minister (Hon. Mr. Nielsen) isn't giving the hospitals what they need. The other ministers aren't giving the creatures of government what they need. But we'll give Hydro the opportunity to go into the market and borrow $1.1 billion at fantastic interest rates. How could one support that?

Will the minister get up and tell us what they are going to do with the $1.1 billion they already have? It's such a nice brush stroke: a little bit of this and a little bit of that. Mr. Chairman, read Hansard and see how definitive that statement was, It's the normal kind of definitive statement I would expect from the Minister of Energy.

Mr. Chairman, I am not really very happy about this particular section of this particular bill.

MR. HALL: Sixteen years ago I contracted, on behalf of my wife and I in my new house, a regular monthly payment to B.C. Hydro for the services that B.C. Hydro was providing for me. It was a regular monthly amount. I had occasion to cheek that just recently because I was curious to find out where my money was going each month. I seem to have too much month left at the end of my money, which is a frequent happening for a lot of people these days. On checking, I found that my hydro bill — which is how most people describe this activity, and that's what we're really getting down to when we're discussing this section — had gone up 400 percent in 16 years. My wages haven't gone up 400 percent in 16 years, but then I'm in a funny trade. Other people's have; some people's haven't. Hydro has gone up 400 percent in 16 years. I now read the newspapers and find out that it's going to go up roughly 100 percent in the next three years.

[ Page 7798 ]

My question to the minister — and it's a genuine question; I'm here to get information as well as anything else — is this: I'd like the minister to tell us what effect this section will have on our monthly hydro bills in terms of debt servicing.

The last time I worked this out, Bob Strachan was in the House. In those days it was about 26 cents on every dollar to service debt. It's got to be about 50 cents now. I'd like the minister to tell us that. I don't see how we can really swallow 50 cents on every dollar of hydro's bills servicing debt. That's megadebt. When half your bill is to pay debt, that's megadebt. That's crushing, unsupportable, Socred megadebt. That's the best way I can put it. That's not restraint. I'd like to know what the effect is of the kind of borrowing in section 2 that lifts the borrowing power of B.C. Hydro to $7 billion. What effect does that have? Working its way through the system, soaking up some of the available capital from coast to coast — and offshore as well — what effect is it going to have? More importantly, in the short run, what effect is it going to have on the public, who are paying their hydro bills? What effect is it going to have at the bargaining table? How can I go out and carry the Premier's message of restraint and at the same time say: "Oh, by the way, you'll be paying more for your hydro."

How can I go out and carry the Minister of Health's (Hon. Mr. Nielsen's) message about not getting sick? For God's sake, don't go to the hospital — and you're going to pay more interest on your hydro bill.

You can't have it both ways over there. You can't tighten the belt on one side of the ledger unless you tighten it on the other. That's why we find this kind of activity a little hard to take. That's why we can't allow this unfettered borrowing to go on, this headlong plunge into further debt, without a much more rational explanation than that which we're getting.

Simply stated, it's a 400 percent increase, with 100 percent already asked for — the headlines are already out in the newspaper — because of government action. There's no water.... It's you people who have put the increased costs on your own corporation. You're increasing user charges for those corporations. Now you've got this going on. What's the cost of it all in terms of the bill that I'm asking my wife to pay out of our wages, our cheque? And that goes for the 2.5 million people who live in British Columbia.

That's just one aspect of it. There's the industrial side of it they have to pass that charge on. When they pass that charge on, I know what happens. I used to be an executive in a department store. As soon as we got an increased hydro bill, up went the prices: on went the nickel on top of the cigarettes, on went the nickel on the box of confectionary, on went the nickel on the drugs, on went the nickel on all the things that the Hudson's Bay, which I used to work for, used to sell. Pass it on. As long as they get their 12.5 percent on invested capital including accounts receivable.... Pass it on. So it's a vicious circle. Because, you see, it's not only just the question of the increased bill; it's the profit on the increased bill that has to be passed on. You don't have to be much of an economist to know that goes on — particularly in the service industries. It's on and on and on.

[Mr. Strachan in the chair.]

Mr. Minister, in a quiet little chat on a Wednesday afternoon, I'd like you to tell us what Mr. and Mrs. Average Consumer, for a start, can expect to be paying in the form of debt payments out of every dollar on their Hydro bills, and a more rational explanation of what is going on in terms of Hydro's program of trying to do with less.

HON. MR. McCLELLAND: I'll attempt to answer a couple of the questions asked this afternoon.

This borrowing authority is not a blank cheque for B.C. Hydro. The borrowing authority simply gives Hydro the authority to attempt to borrow that money as needed. I remind the members again that the Minister of Finance of the province of British Columbia is the fiscal agent for B.C. Hydro. Hydro makes no borrowings without the approval of the fiscal agent. Hydro's board of directors, which was appointed to serve as one more watchdog over Hydro's activities, can pass resolutions approving borrowing up to certain levels, but only as approved by the Minister of Finance. So the Minister of Finance has the responsibility, because the province guarantees the debt of B.C. Hydro, to actually make those borrowings. In the past couple of years, a very good relationship has been developed between B.C. Hydro's financial management group and the Minister of Finance's financial management group. There is more responsibility built into Hydro now than there ever has been.

You will also recall that I've mentioned that the British Columbia Utilities Commission has now, for the first time in the history of B.C. Hydro, the responsibility for full regulation of Hydro's rates and the way in which Hydro operates. That's a measure of accountability which has not been there before.

The total debt of B.C. Hydro represents about 5 percent of gross provincial product. The ratio is lower than it was 20 years ago. I also would confirm to the member that a very substantial part of all our B.C. Hydro bills is for debt servicing. It's about 46.5 percent at the present time. Last year it was 48.25 percent, so it's down somewhat this year. I expect it will be reduced somewhat more as Hydro moves to a more realistic and better operational ratio between its assets and its debt.

I'm sure the member is right that his Hydro bill has increased 400 percent in the past 16 years. I guess a lot of things have, unfortunately, the way our inflationary society has been operating. If the member was talking about his salary as a member of this Legislative Assembly, I think that probably 16 years ago it was around $5,000 or $8,000 at the most. I expect that it's increased over 1,000 percent since then. Everything is relative.

I think that Hydro's debt is very large, and it's a matter that should concern this House. Rightfully so, it becomes part of the debate. But I don't accept that Hydro is out of control or unmanageable. I think some of the measures we've put in in the past two years have shown that we can manage Hydro's operation. We are certainly managing its debt, I believe, in a more responsible manner than in the past; at least with more responsibility, perhaps not better.

I gave this House last week, and I don't remember it ever happening before, a very detailed list of all the projects for which this borrowing is required. It's in Hansard. I also explained that as a result of some of the scrutiny, both internally at Hydro and externally by the ministry and the B.C. Utilities Commission, those projects have already been scaled down quite substantially from a total of around $1.8 billion in actual projects down to just about $1.5 billion. That's a substantial $300 million reduction as a result of having a second look at some of the load forecast requirements of B.C. Hydro.

[ Page 7799 ]

With that, I urge that in order that Hydro can continue to operate responsibly and in a manner which will ensure that British Columbia's energy needs are met over the next year, all members support this section.

MR. HALL: I appreciate the answers. There's 46.5 percent currently. That's before we borrow the difference between $7.2 billion and $8.3 billion. That's $1.1 billion. It's 46.5 percent now. When we borrow that $1.1 billion, it's going to go up.

HON. MR. McCLELLAND: No.

MR. HALL: Okay, we'll take the minister's word for it. It is 46.5 percent now. That is 46.5 cents on every dollar going to service debt. I thank the minister for that answer.

I said that a 400 percent increase over 15 or 16 years may fit into a number of things. A lot of people have wrong ideas about values of certain products now compared to the thirties and forties and so on. It is amazing to look at how long it used to take a worker in our basic industry to cam enough money to buy basic products compared to now. Some very amazing facts come out. He mentions, of course, our own individual cases. You can't really compare what was happening 16 years ago in this House to what is happening now. All of the MLAs, unless they were retired gentlemen — if I can use that expression — that the Premier of the day used to often think we were.... He used to think that the indemnity was only the re-election money. He used to say that outside in the corridor, you may be interested to know, Mr. Chairman. He thought that the $5,000 to $8,000 indemnity was just the money to get re-elected with. You can't compare the tasks of the two jobs now.

I have one last question. Is any of this $1.1 billion of new borrowings scheduled for repayment of old debt?

HON. MR. McCLELLAND: When I shook my head at that comment about whether or not that portion of the total bill would be higher next year.... I expect it won't be, because a couple of things have happened. One of them is that we have established an interest ratio which should bring that down year by year. It has come down in the past year and I would hope it will come down next year as well. Also, the B.C. Utilities Commission has ordered B.C. Hydro to establish a rate stabilization fund out of surplus revenue, which Hydro has not done up to this point. A good portion of revenue from surplus sales of electricity now must be put into a rate stabilization fund at the order of the B.C. Utilities Commission, which should help improve that situation even more.

As I mentioned in opening second reading of this bill some time ago, about 2 percent of the principal amount of the debt is deposited annually to sinking funds from Hydro's general revenue to ensure some orderly retirement of these debts.

MR. BARRETT: I have a couple of questions for the minister. Can he tell the House if it is the intention of the government within the foreseeable year — in terms of the statements that have to be made to the Securities Exchange Commission and the disclosures — to sell off any of B.C. Hydro's assets, such as the gas distribution system?

HON. MR. McCLELLAND: The answer is no.

MR. BARRETT: Mr. Minister, could you tell us if at any time in the last five years since your administration the Minister of Finance has refused Hydro's request for borrowing?

HON. MR. McCLELLAND: I haven't been involved in all that time. I think that question would he more likely asked of the Minister of Finance.

MR. BARRETT: Do you recall any time since you've been directly involved?

HON. MR. McCLELLAND: I am not involved directly. The Minister of Finance is the fiscal agent. There may have been times; I couldn't answer that question. I would suspect that since there is a good working relationship between B.C. Hydro and the government of British Columbia that that kind of thing wouldn't likely, happen. Those things would be worked out between the two parties. I would expect that that is the way we operate our Crown corporations.

MR. BARRETT: In response to the member for Surrey (Mr. Hall), the minister left the impression that the Minister of Finance was monitoring these things. I do not recall any single instance where the provincial government has said no to any specific project of funding by B.C. Hydro. I don't believe it's happened. Mr. Minister, I know you are busy, but I find it a little bit surprising that you don't know. Having made the statement to the House that the Minister of Finance can do this, you don't know whether or not he has done it. It is not incompetence, but I find it puzzling. You of all people. When you were in opposition there was never a quiet moment from you on a bill like this. Screaming, wild accusations and unfounded charges were part of your method of operation. Now you come in this House and you can't even answer a question that you opened yourself. You're the Minister of Energy, Mines and Petroleum Resources, and you don't even know whether or not any, single Hydro request has been stopped by the Minister of Finance. You're candid about it, but I'm shocked that you, the know-it-all opposition member who made wild, irresponsible charges, admit that you don't know what's going on. I'm shocked. That doesn't square with your image of quiet responsibility this afternoon. It doesn't square with the impression that everything is under control. You don't know what the heck is going on. You come in here to try to tell that member that everything is hunky dory. When we left office.... I'll show you how much debt you're piling up on the people of this province. Hydro is out of control, and you as the government haven't got an idea from day to day what Hydro is doing. You come in here and rubber-stamp borrowings, and you don't even know whether or not the Minister of Finance has ever turned down a request. Hydro is running circles around you,

When was the last time you did an audit of how many engineers they've got on staff over there and what kind of restraint is going on over there? When was the last time you asked questions about the administration over there" When was the last time that you gave a report to this House or an explanation of why in the six years of your administration the debt charges that my friend from Surrey has mentioned have gone up from $133 million a year in our last full year in office to $400 million a year under the bungling of Social Credit?

Are you asking us to be accountable for this kind of massive borrowing by B.C. Hydro when you're the fellow

[ Page 7800 ]

who ran around and attacked us for borrowing money at 9 3/4 percent? Wouldn't you like to get 9 3/4 percent money in Canadian today? Why did you attack it then? Because you were irresponsible in opposition and you're irresponsible in government. There was no way that money could be borrowed anywhere else in the world in terms of the needs of British Columbia, and you nearly destroyed a market for us to borrow money on a competitive basis. You drove away a chance for the people of this province to have a wider range of borrowing potential because of irresponsible statements when you were in opposition — wanton irresponsibility. I was under the impression, when you made those attacks and charges, that you would be a good supervisor, a good watchdog, but you are the worst government, in terms of supervising Hydro, that has existed in this province since that became a Crown corporation.

Look at these shocking figures! We had a nice, quiet little afternoon.... Who was it who put a $100 million charge on the backs of businesses in this province with the sneaky way of picking up new tax revenue? It was your government. What's a hundred million to you? Not very much. You blew $11 million on a cockamamey heroin treatment program that you never justified. You throw more money away on little wild schemes, because you are Mister Know-it-all.

AN HON. MEMBER: Fourteen million.

MR. BARRETT: Fourteen million, was it? Oh, well, what's the difference to him? He comes in here this afternoon for a quiet little talk about how the Minister of Finance will supervise it, but if he's asked a simple question once under Social Credit that the Minister of Finance stop the borrowing, he doesn't even know the answer. Incompetence, bungling....

AN HON. MEMBER: Slothfulness.

MR. BARRETT: "Slothfulness" may indeed be a word to be used. I'm telling you that you show no sense of the responsibility that you proclaimed so piously when you ran around this province attacking borrowings. You have driven the taxpayers of this province into debt; you have doubled the debt in five years and you intend to double it again with the likes of this bill.

Well, I find it very interesting. This so-called group of businessmen who told the people of British Columbia that they were going to show fiscal responsibility showed the people of British Columbia that they are incompetent in dealing with massive amounts of money; ruined the money market that could have saved the taxpayers hundreds of millions of dollars, by irresponsible statements during the time they were in opposition; attacked statements that were in the SEC declaration of B.C. Hydro, acted wantonly and destructively as a group while in opposition and, as a consequence, cut off access to European borrowing at a time when we had the leverage and the debt load of B.C. Hydro was not nearly as high as it is now.

That member in particular was one of the wild, irresponsible members of the opposition, and now he comes in piously this afternoon asking for a billion and says, "Oh, well, don't worry, the Minister of Finance will supervise it," but when asked a question, he doesn't even know when, if ever, the Minister of Finance said no. He casually announces that he is going to go ahead, and that B.C. Hydro goes ahead.

Are you aware that the corporation was talking about export after completion of Mica? Are you aware of that? I'm referring to the Revelstoke project above Mica. Are you aware of that? Did you approve of that export? Is that a government policy?

AN HON. MEMBER: It's not export.

MR. BARRETT: No, they're just going to sell it to the Americans. It's not export; it becomes Canadianized in the transmission lines. You don't even know what's going on. You are as much a failure in this responsibility as you were when you were the Minister of Health, only this time there's no Rafe Mair to clean up after you.

Interjection.

MR. BARRETT: Oh, picking on you! I sat through all that garbage that he threw across here. He destroyed a marketing possibility for us to borrow money in Europe — petrodollars — and now we're faced with interest rates of 17, 18 and 19 percent because of Social Credit bungling. You've driven the debt load up from where we paid $133 million six years ago to where we're now paying $400 million in interest, and you try and tell that member down there that it has piled up over 20 years. You go ahead and talk and chat over there. You're driving this province's credit rating to a very thin edge. You're irresponsible in terms of the kind of borrowings you're piling up.

HON. MR. WATERLAND: It's a triple-A edge.

MR. BARRETT: My good friend, do you realize what they're doing in terms of this massive Hydro borrowing? They're jeopardizing funds in the private sector as well in terms of driven-up costs for industry. Has there been one word of explanation in here to the forest industry or to the mining industry as to why it has to pick up the additional bill of the water licence fees that you found as a nice, sneaky way of collecting more money from the private sector? Cominco is closing down this summer. They've got an additional $9 million bill to pay because of the increase in water licences as a roundabout way of paying this massive debt on B.C. Hydro. I haven't heard a single word out of the Ministry of Mines in sympathy to Cominco and the workers up there. The charges you brought on them! Send a card of sympathy. Some big deal! The Minister of Forests (Hon. Mr. Waterland) hasn't said a word about any kind of help to the forest companies in terms of the additional charges that they'll get out of this irresponsible management of Hydro. You have no supervision of Hydro. You put in your political man, Robert Bonner, and it's been politics from day one, and there has been no supervision of B.C. Hydro.

You come in here and say the Minister of Finance will supervise.... Do you know what you would have done if we had given you that kind of answer when we were in government? You would have frothed at the mouth, which was a frequent occurrence. You talked about kids in the Empress Hotel and made up anything you wanted when you were opposition. Now you're responsible, and what you reveal when you're responsible is that you don't know what's going on. What a failure! But you think it's okay because you're Social Credit and you're protecting free enterprise. You tell us and you tell the taxpayers why the people of this

[ Page 7801 ]

province — whether they were Social Credit, Liberal, Conservative, NDP or anything else — had a debt load of $133 million a year in 1974, and under Social Credit in 1980-81, it was $400 million a year.

Supervision? Control? Restraint? You tell us the last time there was an outside audit of staffing and supervision at B.C. Hydro. What do their expense accounts look like? Are they still flying the Mitsubishi? Come on, Mr. Minister. That B.C. Hydro has become a spoiled brat in British Columbia because its parent has neglected the kind of supervision that it should be giving.

Who is it out there that every one of us hears about when we travel around this province? What are the complaints about? They are about B.C. Hydro: "Insensitive, huge charges, massive debt." We get a chance to ask a few questions in the House today and the minister doesn't even know whether or not the Minister of Finance (Hon. Mr. Curtis) once told Hydro they couldn't have what they wanted. That spoiled brat!

You're not running Hydro, Hydro's running you. Hydro has more power than this cabinet has. They tweak their thumb on their nose at you, Mr. Minister, and laugh at you all the way to New York when they put us deeper, deeper and deeper into debt on the American market. It was your irresponsible statements in opposition that cut out access to petrodollars. What administration borrowed $300 million in Canadian funds over a nine-year period at 9.75 percent and had irresponsible opposition members running around all over this province saying: "Oh, naughty, naughty. They're taking Arab money"? They deliberately left the impression around this province that we had sold B.C. Hydro to the Arabs. Me, of all people!

The fact that they even loaned money was incredible in terms of the international situation at that time, and I went out to get the best deal for the British Columbia taxpayer that I could, and it's never been equalled since by this government. I borrowed at 9.75 percent in Canadian money. Oh, they laughed when they were in opposition when I did it. They got on the hotlines and they said: "Oh, we're going to be driven into debt."

This is nothing more than a fiscal wrecking crew when it comes to B.C. Hydro. You stand up there and tell the member for Surrey (Mr. Hall) that the Minister of Finance is supervising, and you can't even tell us one instance. Do you blame it on your staff that you weren't prepared to come in here? Who do you blame when you don't even know the answers when you're talking about driving the taxpayers of this province deeper and deeper into debt by something which was once a proud, publicly owned Crown corporation and that has now become nothing but a fiscal albatross around every homeowner in this province? Lord knows what you would have done if you'd gone nuclear. The only thing that stopped you going nuclear was a political decision, thank goodness, by the Premier when he got scared.

Interjection.

MR. BARRETT: Well, my dear friend, you take a look at Washington state, and the billions of dollars of debt piled up down there because of irresponsible governments like this one here. You have people cutting off their hydro in their homes. In Washington state they are in debt now to the tune of $12 billion to $14 billion for non-completed nuclear plants. There's not been a kilowatt out of them, and they're not going to complete them. Who is making up that power? We are. You don't tell me that you're not exporting power. The only thing Hydro is bragging about is peddling some interrupted power to Washington state. When does the change take place between interrupted power and firm power under political pressure?

I don't think this government has learned a single thing about the Ontario experience in regard to that kind of commitment. The gentle little walk in here today and the gentle little talk about money.... You've piled debt on the backs of the Canadian and British Columbia taxpayers in an unparalleled manner. God rest the soul of W.A.C. Bennett. If he were here in this House today, he wouldn't believe that that party that's bringing in this bill would dare call itself Social Credit in terms of the debt that it's piling up. Whatever happened to "pay as you go" under Social Credit? Whatever happened to the philosophy of not putting this province in hock to the moneylenders? You tell me, Mr. Chairman.

We've gone from $133 million a year in interest charges and they used to scream "irresponsibility" — to $400 million a year in interest charges. and there's not a peep out of the minister to indicate that he knows a fig of what's going on. He comes in here and tells us that the Minister of Finance is supervising it, and then, when asked a simple question — "Do you know of one time when he's stopped something?" —he said: "I don't know."

That member was part of that same old screaming gang. It's partly that member's responsibility that access to alternate competitive marketing for financing, for cheaper money, was cut off because of irresponsible political statements just to gain power. You attacked those markets. You certainly did. When was the last time you went to Europe and got some lower-cost money? Not in a pig's eye. You're paying $45 million up front to lower the cost of borrowing for those crazy tunnels and leaving debt all over this province — debt that the taxpayers will have to pay. Cece Bennett never would have had them in the cabinet.

MR. CHAIRMAN: Order, please. I will ask the Minister of Industry and Small Business Development (Hon. Mr. Phillips) to cease what he is doing. The Chair finds it offensive.

Please continue with section 2 of Bill 40.

MR. BARRETT: Mr. Chairman, I want to thank you for telling the minister to stop being normal.

MR. LAUK: He's got some sort of twitch.

AN HON. MEMBER: You've driven him out.

MR. LAUK: Are you going out for your medication now?

MR. BARRETT: I hope you don't go out and borrow more money in the name of the taxpayer. We are in enough of a mess now, I’ll tell you that.

The people of British Columbia have never heard the whole story of what's gone on under B.C. Hydro, under the mismanagement of Social Credit — incompetence and bungling mismanagement.

HON. MR. McCLELLAND: Tell us the whole story.

[ Page 7802 ]

MR. BARRETT: The whole story is right here in the annual reports. Debt service has gone up from $133 million six years ago to $400 million a year, and every time you turn on a light switch you are paying for Social Credit incompetence. You don't even know what your power needs are. You talk about the public utilities commission, and B.C. Hydro appears in front of it. You are asking us to give a blank cheque to this kind of borrowing. You go up to the hearings at Site C, and the first position of the government, through Hydro, is: "We need more power." Then you walk away three weeks later and say: "We've reconsidered our position." Have you not broken up Hydro's team on Site C? Answer that question. Are the personnel that were with Hydro still on that Site C team? Do you know that? Answer that. Write it down. I'd like to know whether or not you know the answer to that.

You tell me what supervision you are effecting. When was the last time you said no to that spoiled brat — that wild cookie monster, B.C. Hydro — that gets any single thing it wants and has driven debt sky-rocketing out of this province? Have you done any projections or research on the point we may be reaching with this massive debt, where people start cutting off Hydro and going to alternate power? Have you done any checking on that? What is your policy under this borrowing in terms of upping the permissible amount that Hydro will buy back from private power producers? Do you know the answer to that? I would like to know from you today exactly what kind of fiscal responsibility you're going to show to cut this debt down and cut that monster off.

You talk about restraint here. You tell people to cut back their incomes, and you cut back hospitals. Hydro is out of control and is showing absolutely no restraint, and you've given no indication that you've pared a single penny of expenses from Hydro — nothing. How do you manage to double and triple the debt in short years like this? You tell us. The Columbia River Treaty was bad enough. You're careless and absolutely out of control, and you have done nothing to supervise Hydro.

You come in on a quiet Wednesday afternoon and you think that the bill is going to go through, that the nice, polite NDP will say that you're fiscally responsible. You've bungled the control of this Crown corporation; you've given every single shred of evidence that you've cut off alternative markets for money; you've proven this afternoon that you don't even know one instance where your government, through your Minister of Finance, has said no to Hydro.

You're the same yeller, hootin' and hollerin', the same irresponsible wild screamer you were in opposition. Now you are there as the minister responsible and you don't even know what's going on.

Boy oh boy! Future generations of this province, the taxpayers, people unborn, and the children of this province are going to be paying for this fiscal nightmare, this fiscal mismanagement, this fiscal mess from that minister and his government, at an escalating rate that's been unparalleled in the history of any other Crown corporation of this province — debt doubling, debt tripling. You come in here and you say: "Whatever we allow them to borrow, they have to doublecheck." Why don't you really be gutsy and say every single borrowing from now on must be approved by the Legislature, because the corporation's out of control? Oh no, you won't do that. You've got rubber-room figures for restraint out in the hallway, but you have no restraint on B.C. Hydro.

If you want the people of this province to start believing you — that you're fiscally responsible — show some paring of Hydro's budget, not this kind of massive borrowing power. Show some restraint. You're spending money like drunken sailors over there — absolutely out of control. You have no idea of what's happening. You're shovelling money out of the back of a truck and pouring debt on top of debt, and people have their power rates going up 300 percent and 400 percent.

I remember when the now Premier of this province promised that there would be fiscal restraint and control over the Crown agencies. What's another $1.5 billion? What's another promise? You don't even know one single instance where the Minister of Finance has turned down a request by B.C. Hydro for borrowing. You have piled debt on the backs of small businesses in this province, and debt and costs on the back of large businesses. Cominco is closing down. Wouldn't that extra $9 million from the water licences help keep some of the jobs in British Columbia? If you really believed that you wanted to keep jobs in this province, why didn't you show it by policy? Debt, debt, debt! Massive debt! Fiscal irresponsibility!

I'd like to hear the minister's explanation of why debt costs have gone up from $133 million a year to $400 million a year. Tell us why. Tell us whether or not you are going into competitive markets to borrow money. Tell us where you are looking for new money. Tell us how you are looking for new money. Tell us what kind of fiscal team you have put together to try to find those markets. Give us some idea that there is some new thinking and leadership. At least we deserve that much. Don't you know? I'd like to hear. Have you got a team out there studying the money markets to find out whether or not we have access to some of that money from the Middle East at the same rates or a little bit better rates than what we were able to get? What's available in Europe? Who are you dealing with in Europe? Do you have anybody over in Vancouver today, when we have a major international meeting of bankers? Have you done any sort of PR over there? Do you have anybody from the government?

I'd like to hear about this so-called sophisticated money management that you said you were going to bring in as a government — this so-called control over Crown corporations. You've doubled the debt of this province in five years. You're absolutely out of control. You've shown no ability to have personal fiscal restraint when you hire hotel rooms. Tell us what you spent on a limousine in New York when you were there for a couple of days. Tell us about that. Tell us about how you travel when you are on business. Tell us about that, will you?

MR. CHAIRMAN: Order, please. We are discussing the borrowing limit of the Hydro Authority.

MR. BARRETT: Was the money for limousines charged to Hydro or to the minister's account? Tell us how you justify the high living you're involved in — limousines in New York, while the taxpayers of this province are stuck with these bills. I want to tell you, Mr. Chairman, I find it a little bit much. This government has learned how to live high off the hog on borrowed money that the taxpayers have to pay for. There's no explanation whatsoever for it. There was an admission by the minister this afternoon that he doesn't even know if the Minister of Finance (Hon. Mr. Curtis) turned down a borrowing once. Have they shown any restraint? Try taking a cab in New York once in a while — it's a lot cheaper. We'd feel a lot better about it, Mr. Minister. Fess up.

[ Page 7803 ]

Interjection.

MR. BARRETT: No, it's not safe on a subway. He's got a gold watch. They'd strip him of that in New York. But a taxi is okay.

Show us that you've shown some sense of restraint in I terms of your own leadership, in terms of your responsibility to Hydro. Debt, debt, debt. Tell us, Mr. Minister, what do you know about Hydro as a day-to-day operation? I think it's nothing.

HON. MR. McCLELLAND: There weren't very many questions in there. There was an awful lot of bitterness. The first member for Vancouver East carries bitterness a long time. He's still angry and bitter that when some of us were in opposition we perhaps showed the government of the day up for the incompetent fools they were, and kicked them out of office.

MR. CHAIRMAN: Order, please. Could we return to the section of the bill?

HON. MR. McCLELLAND: Mr. Chairman, I'm just responding to the same kind of comments that were made by the Leader of the Opposition — whom I did not interrupt.

That incompetence in the operation of Hydro by the fiscal agent of the day, who is the present Leader of the Opposition, resulted in not only the government falling but also the Leader of the Opposition losing his own personal seat, because people knew that there was no control in B.C. Hydro in those days. The fiscal agent did not take up his responsibility. That responsibility was turned over to a political appointment, David Cass-Beggs, who was named chairman of Hydro during those days.

Interjections.

HON. MR. McCLELLAND: Yes, and other political appointments. In those days the fiscal agent did not live up to the responsibility that was necessary to protect the taxpayers of British Columbia.

I'd like to commend the present Minister of Finance, who has taken his responsibility as fiscal agent for British Columbia Hydro increasingly seriously. He plays the role of fiscal agent. He does not abdicate that role. He has set up, in my opinion, one of the finest financial teams in North America, to ensure that British Columbia gets the best deal on the money markets of the world. That's one of the reasons that B.C. Hydro and this government — one of the few jurisdictions in North America that has — have a triple-A rating on the money markets of North America.

The member asked a couple of questions about when we last looked at the staff of B.C. Hydro. I would like to answer, perhaps, with a question: when was the last time anybody on that side of the House took their responsibilities seriously during the time that they had to audit and manage Hydro? Which government finally appointed a real board of directors to manage B.C. Hydro? Which government finally appointed the B.C. Utilities Commission and gave it total responsibility for the regulation of B.C. Hydro as a regulated utility? Which government put a seven-year moratorium on nuclear exploration and development in British Columbia? It certainly wasn't the socialists. It was the Social Credit government who put in those.

The Leader of the Opposition gets his pious act together and talks about borrowing money for British Columbia Hydro as though it had never been done before. During the years that that party was in power there was borrowing for B.C. Hydro in the same manner as today. If you take inflation into account, the borrowing was probably even more on a per capita basis. In October 1974 the increase over the year before was 5500 million at a time when the inflation rate was probably 7 or 8 percent and bank rates were down around 10 percent. In 1975 it was up three-quarters of a billion dollars at a time when the inflation rate was probably less than 10 percent and the bank prime interest was probably under 10 percent as well. It is not as though the previous government had no borrowings, because they did. Certainly they were questioned at the time. I believe that all borrowing should be questioned, as we have been doing during the discussions here today and earlier last week.

The member talked about export power. There is a policy n place at the present time, both by the government and by he Crown corporation, that we do not build for export and hat we export only interruptible power. That is what we have been doing. Some years have been good and some years haven't. This past year just happens to be a record year in terms of power which was available for export and also a market which happened to be available at the same time. As a result of that, however — and as a result of the full regulation of British Columbia Hydro's operations for the first time in history — Hydro has, as I mentioned before, been ordered to place some of that revenue from surplus sales into a rate stabilization fund, which we hope will help protect the taxpayers and the consumers of B.C. Hydro in the future. That will be a fund that will be there in perpetuity as long as the policy's in place. It is the National Energy Board which regulates whether or not British Columbia Hydro can sell firm or interruptible power, not this government. At the present time, Hydro's export licences do not allow it to sell export power, except in two small cases which I've mentioned in this House before: Hyder, Alaska and Point Roberts, Washington.

For the first time ever, the audit of B.C. Hydro has begun and begun in earnest. Through regulation and through the rate hearings which are presently going on, as the member will recall — except he probably didn't pay any attention to it, because he was too interested in putting on a show here — British Columbia Hydro was ordered by the British Columbia Utilities Commission to cut back its expenses by 5 percent. He asked: "When was the last time Hydro was told to cut back its expenses?" The last time was this year, Mr. Chairman. In response to that order from the B.C. Utilities Commission, Hydro has managed to cut back its expenses by over 9 percent. It's probably the first time, and it's interesting that Hydro should be the first of the major Crown corporations to show that kind of efficiency and response to the need for restraint.

Interjection.

HON. MR. McCLELLAND: It's not 0.9, Mr. Member, it's over 9 percent.

We talk about Hydro being out of control and everything else, but for the first time in history Hydro is under control. The B.C. Utilities Commission has control of B.C. Hydro. It is not a political organization. There is no opportunity for this government to interfere in those rates.

[ Page 7804 ]

MR. BARRETT: Who's Bob Bonner?

Interjections.

MR. CHAIRMAN: Order, please. I'll ask all hon. members to come to order. The minister has taken his place in debate. There will be no interruptions.

HON. MR. McCLELLAND: I'm sorry I attempted to answer the member's questions, Mr. Chairman, because it's obvious he didn't want the answers — he never wants the answers in this House. He likes to get up and do his Wednesday afternoon thing around 5:30 every Wednesday afternoon. It's a shame that he didn't have more of his own members around to listen to him today. They're all out in the hall having a smoke. But next time perhaps you could schedule it a little more carefully, Mr. Leader of the Opposition, and you'll have your own people interested as well.

MR. HOWARD: I'm always delighted to listen to the Minister of Energy. He answers every question by the usual mud-slinging approach, but that is typical. We accept that he can't do anything other than that.

I do want to make a comment in reply to his statement about what the Minister of Finance has done with respect to borrowings and debt of Crown corporations. The Minister of Finance, as a result of a decision made by that Minister of Finance — probably with the full endorsement and support of the cabinet, because it was a political decision — in October of 1980 cost the people of this province hundreds of thousands of dollars, perhaps into the millions of dollars, of extra interest which they would not otherwise have had to pay, and all because the Minister of Finance tried to play a political game with the investment committee. The Minister of Finance, with the full support of this minister dominated by Hydro, went to New York in October of 1980, or thereabouts, and told the team of investment dealers in New York City who had, until that time, handled Hydro and other Crown corporation borrowings in U.S. funds, that they were going to have a new partner. The Minister of Finance, with the full endorsement and support of the Minister of Energy, forced Wood Gundy, an investment dealer in Canada, upon the group of investment dealers in the United States. He told them whom they were going to work with.

AN HON. MEMBER: Do you agree with that?

MR. HOWARD: Sure he agrees with that. He said: "We're going to have Wood Gundy in your syndicate from now on. You're going to have it."

Interjection.

MR. HOWARD: If you want to say something, stand up on your feet, as you usually do, and reply, Mr. Minister, but don't mutter those inanities from your seat where they can't be heard and Hansard doesn't pick them up.

You're involved in a syndicate for the borrowing of funds on behalf of a client by earning your way into it, by competency and ability, but this government and that minister decided they were going to do it a different way. They imposed another member of the syndicate upon that group in the United States through which, when borrowings are made in the U.S. market, they are made in U.S. funds. The result of that imposition.... Even if you speak in terms of a few basis points of difference in an interest rate, the cost is probably about 15 basis points. In simple mathematics, if you take the difference between 10 basis points and 15 basis points on a borrowing, on an interest rate, and multiply it by the hundreds and hundreds of millions of dollars that Hydro has borrowed in the United States, you come up with a fantastic amount of money imposed as extra cost on the citizens of B.C. — all because this government wanted to pay off their friends in a political way.

[Mr. Davidson in the chair.]

The Minister of Energy stood there and had the unmitigated gall to laud this Minister of Finance as being competent and able in acquiring the best rates for this province. What that Minister of Finance did was to acquire the worst possible rates that you could get under whatever rating the bond market groups in the United States give you. That's what happened: a sellout completely for political purposes, a sellout of the interests of the people in this province. As far as the minister was concerned, it wasn't good enough that for every dollar B.C. residents pay for their hydro bill, 40 cents goes to pay the interest on the debt. That wasn't good enough for him; he wanted to knock it up a bit.

If you take the 40 cents on the dollar that now has to go to pay interest on this massive debt of Hydro's, plus the amount of money in sinking funds, plus the interest that will have to be paid on this $1.1 billion increase that is sought here now, people will be paying 50 cents on the dollar in interest. For every Hydro bill they receive they will be paying twice over for the electricity they get. The other 50 cents will go to pay the interest on this staggering, immense debt. The Leader of the Opposition raised this quite properly and quite effectively, and the only response he got from the Minister of Energy was caterwauling and moaning about something else; he did not deal with the question.

The Minister of Energy is ashamed to stand up here and justify and explain to this House how his Minister of Finance has caused the taxpayers of this province hundreds of thousands, virtually millions, of dollars in extra interest rates because he played politics with the investment community. He couldn't deal straight with them. He forced them to accept a new partner in the investment houses, and then went with this new partner to Europe to try to foist a $100 million debt onto B.C. Rail. That's what happened. It wasn't just the simple question of forcing the group in the U.S. to accept another partner. That was bad enough. But when that new partner tried to do an end run around his other partners in attempting to raise that $100 million in Europe, that's when they legitimately and properly got their back up and said: "We're being taken by that two-bit, insignificant, cheap government in the province of British Columbia, and we're not going to stand for it." The effect is extra interest rates that we as citizens have to pay, all for the bungling mismanagement and political connivance of this government.

The Minister of Energy, Mines and Petroleum Resources has the unmitigated brass to stand up and wander off in some direction not germane to the subject matter under discussion — the extra $1.1 billion that he, as the minister, wants to force the people of this province to borrow. The minister nodded his head in assent earlier that he agreed, in the initial instance, with the move to force a new investment dealer on the group that was already there. Why doesn't he take the

[ Page 7805 ]

next step of openness with the general public and tell them how much extra money that has cost the taxpayers of this province? Will he take that next step? Not likely, because he doesn't have that history of full and complete frankness; just the element of frankness necessary to serve his own purposes, and not the element of frankness necessary to serve the truth.

Interjection.

MR. HOWARD: I hear the mutterings, down the end of the chamber, of backbenchers on the Social Credit side who support the idea that Hydro should go deeper and deeper in debt. They support the idea that their own residents — in Omineca, Kootenay or wherever the noise is coming from — are going to have to pay 50 cents on the dollar for interest to B.C. Hydro; they'll get 50 cents worth of electricity and pay 50 cents to service the debt. That is the kind of explanation that should be given to the people of this province.

The government, at one time, said to municipalities: "Look, when you send out your tax notices, tell the people that you're getting the taxes at this rate because the provincial government is involved and is helping you out." Municipalities had to do that. Why don't you tell Hydro to print something on their Hydro bill and say to the guy who's paying the bill: "Look here, you're paying $50 for Hydro, but $25 of that is for electricity and the other $25 is to pay the interest on the debt that we've driven you into." Why don't you be honest and open about that one, take that step and tell people what you're doing to them? Tell people how you're taking them and seducing them by silence, by hiding the fact that you're driving them deeper and deeper into debt. If you did that sort of thing and related all this to the public, perhaps the general public would have a better understanding of what you are doing to them, whether it is a Wednesday afternoon or whatever it is.

The minister's comments would certainly be appreciated in reply there, especially as to whether or not he is going to ask Hydro to write out their bills in such a way that they lay out the whole truth to the general public: how much is going to pay the interest on the debt, how much is going to pay the water-licence fees that the government placed on Hydro a while ago, a straight flowthrough of cash into the coffers of the provincial government from residential homeowners who are buying electricity. Put that out there as well instead of saying to Hydro: "Just send them a bill for $50 or $75 or however many dollars it is and the general public will pay that.: Lay it out so that the truth will be there, so that honesty is what prevails in Hydro's relationship to the general public and in the government's relationship to Hydro and through Hydro to the people of B.C. Do something of that nature.

Yes, Mr. Minister of Lands, Parks and Housing (Hon. Mr. Chabot), you can look at the sun shining on you. What we are asking this government to do is to let the sun shine through and show the truth to the general public. It's all right for the afternoon sun to rest itself upon your face. You can look up in some glory and say, "Isn't that beautiful," but let the sun shine in and show the people what you're doing.

Interjections.

MR. HOWARD: What's that racket over there on the other side, Mr. Chairman? Is that minister in order. or what was he doing?

In any event, if you do something of that nature — let the sun shine in and let the truth be known to the people of this province, instead of hiding it. using subterfuge, and using less than full, open, honest frankness with the general public — people in this province would be a lot better off. They would have a better understanding of how they are being taken by this government so that when the time comes that they get a ballot in their hand, Mr. Chairman, they'll be able to make the decision to get rid of this crowd of.... I was going to say thugs and gangsters in a political sense, but I wouldn't say anything like that, because I know it would offend the rules of the House. Lay the truth out so the general public will have a better opportunity to toss you out on your ear for the way you've taken the public of this province.

MR. LEGGATT: I am surprised that I haven't heard more from the Social Credit members on new approaches to Hydro — such as the recommendation to split it up into four separate organizations and have a look at the way those four organizations are managed versus the way the single monopoly is now being managed. We want to talk about debt; surely it's time we talked about efficiency in Hydro. Hydro right now is dominated entirely by its Hydro engineers. They sit in their offices in Vancouver planning new dam projects, because that's what they're trained to do. In the process of doing it they are placing higher and higher burdens of debt on this province. debt that will result in the future of this famous triple-A rating being questioned. If you continue to allow your Crown corporations to get so heavily burdened with debt, there's going to be a very hard look at this province's credit rating — and there are examples across this country.

Interjection.

MR. LEGGATT: No, none.

I'm surprised that we haven't seen a new approach from this government to Hydro in terms of its management competence. As the Leader of the Opposition has said, all they've got is a bunch of yes-men on the other side. They haven't challenged Hydro one single iota. In no way have they challenged the power of that dominating corporation in the province of British Columbia. They're not going to do it. Not as long as Bob Bonner is around are they going to challenge it. Not as long as they appoint political friends as head of the Utilities Commission are they going to challenge it. The only way that the power of Hydro will be challenged is by a changing of government.

The per capita debt in this province today is the highest in its history. But even more important, this government constantly attacks the fiscal approach of the federal government — and rightly so. But that federal government has imposed less debt on the people of British Columbia than this government has. It's a ratio of about three to one. The per capita debt in this province imposed by this government doubled — it's one of the highest in the country. And they run around prattling about all those other people who are saddling the people of British Columbia with debt — like the federal government. It’s true, they are; they're fiscally irresponsible. They're too heavily in debt, but they don't hold a fig to these guys over here, who are twice as bad as the federal government.

The House resumed: Mr. Speaker in the chair.

[ Page 7806 ]

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

HON. MR. GARDOM: I move the House at its rising do stand adjourned until 10 o'clock tomorrow morning.

MR. HOWARD: I have just a brief comment or two. I think it would have been more appropriate if the minister had moved a motion that we could meet this evening in order to discuss and debate a motion on the order paper placed there on April 15 — more than a month ago now — dealing with an editorial in theVancouver Province which commented on a decision by you, Mr. Speaker. I don't intend to make reference to the editorial by quoting from it. You know what it is better than anybody, Mr. Speaker. What the government did, in setting down this motion, was to use the most insignificant type of motion that they could find. Now, in addition to having the threat held there of some action against theVancouver Province but being gutless to call that, the government, by letting that motion sit there unattended day after day, is basically saying that they agree with the editorial. This government is saying they agree that you, Mr. Speaker, should have been attacked by the newspapers of this province. The government supports the attack made upon you, Mr. Speaker, and that's intolerable. By letting it sit there unattended to, Mr. Premier and Mr. Minister of Intergovernmental Affairs are basically saying: "Yes, Speaker Harvey Schroeder is weak-kneed and a clearly dangerous ruling should be left there." That's what they are saying. They are permitting that editorial to stand condemning you. They agree with it. That government is condemning you.

MR. SPEAKER: Hon. member, you are now trying to debate the merits of the motion itself, which of course would be out of order. Any debate now would have to restrict itself to the reasons why the House should not be adjourned until 10 a.m.

MR. HOWARD: With respect, Mr. Speaker, I'll take the suggestion you have made to me, although that was not my intention. My intention was to simply say that we should meet this evening, and the longer that motion sits there, the more the government is saying that yes, Mr. Speaker, you deserve to be chastised. That's what they're doing. They're putting you in an intolerable position.

Motion approved.

Introduction of Bills

TAXATION (RURAL AREA)
AMENDMENT ACT (NO. 2), 1982

Hon. Mr. Curtis presented a message from His Honour the Lieutenant-Governor; a bill intituled Taxation (Rural Area) Amendment Act (No. 2), 1982.

HON. MR. CURTIS: I move that Bill 34 be introduced and read a first time now.

Motion approved.

HON. MR. CURTIS: I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Motion approved on the following division:

YEAS — 26

NAYS — 24

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:09 p.m.