[ Page 8231 ]

CONTENTS

Routine Proceedings

Presenting Reports

Select Standing Committee on Standing Orders and Private Bills, reports No. 1 and 2.

Mr. Strachan –– 8231

Oral Questions

Use of government aircraft. Mr. Passarell –– 8231

Formaldehyde gas safety level. Ms. Sanford –– 8232

Mr. Barrett

B.C. Packers Ltd. Mr. Lea –– 8233

B.C. Hydro borrowing. Mr. Stupich –– 8233

Small business bankruptcies. Mr. Leggatt –– 8233

Expenses of minister. Hon. Mr. Nelson replies –– 8234

Use of government aircraft. Hon. Mr. Fraser replies –– 8234

Tabling Documents

British Columbia Buildings Corporation annual report, March 31, 1981.

Hon. Mr. Wolfe –– 8234

B.C. Hydro annual report, 1981-82.

Hon. Mr. McClelland –– 8234

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

Third reading –– 8235

Housing and Employment Development Financing Act (Bill 39). Committee stage.

(Hon. Mr. Curtis)

On section 2 –– 8235

Mr. Stupich

Hon. Mr. Bennett

Mr. Gabelmann

Ms. Sanford

Ms. Brown

On section 3 –– 8238

Mr. Gabelmann

Ms. Brown

Mr. Mitchell

Mr. Davis

Mr. Brummet

Mr. Ritchie

Mr. Leggatt

Mr. Lea

On section 4 –– 8244

Mr. Stupich

On section 5 –– 8245

Mr. Stupich

Mr. Davis

Mr. Leggatt

On section 10 –– 8247

Mr. Stupich

On section 13 –– 8247

Mr. Stupich

Third reading –– 8247

Division

Land Amendment Act, 1982 (Bill 54). Second reading. (Hon. Mr. Chabot)

Hon. Mr. Chabot –– 8247

Mr. Hanson –– 8247

Committee of Supply: Ministry of Human Resources estimates. (Hon. Mrs. McCarthy)

On vote 49: minister's office (continued) –– 8247

Ms. Brown

Mr. Levi

Appendix –– 8255

WEDNESDAY, JUNE 16, 1982

The House met at 2 p.m.

Prayers.

HON. MR. GARDOM: I rise on a point of both public and private importance, and that is that this happens to be the natal day of a very good friend of all members of this Legislative Assembly. Mr. Speaker, I know that all sides of the House would like to wish you the happiest of birthdays and continuing good health.

Might I conclude by bearing small reference to two horoscopes, which I found in competing daily newspapers in British Columbia. One says: "If you find rewards in the area of romance, finance and employment this year...." I'm not going to comment on that, Mr. Speaker, but I would continue in reading this: "If considering marriage, be absolutely certain that your prospective mate shares your commitments and high ideals." We know Little Red does and has.

MR. BARRETT: I would ask the House to congratulate the member for New Westminster (Mr. Cocke) on becoming a grandfather this last 24 hours. It is a great moment in his family.

HON. MR. WATERLAND: In the precincts today are a group of grade 4 and grade 6 students from Spences Bridge Elementary School. They are accompanied by their teachers, Mr. Irvine and Mrs. Dickinson. I would like the House to please bid them welcome.

MR. GABELMANN: In your gallery this afternoon are a group of people from Campbell River who are down here meeting with government members in an attempt to make sure that Campbell River will always be the salmon capital of Canada. Their names are: Gary Young, Eileen Smith, Ken Phillips, Dr. Dick Murphy, Thor Peterson, Don McIver, Rob Bell-Irving and Betty Hampton.

MR. KEMPF: It's my great pleasure to introduce in the gallery today some people from the great north country. With us this afternoon are Mayor Maxine Douglas, Alderman Paul Hamoline and Mr. Ray Parfitt. I would ask the House to make them all very welcome.

MR. LOCKSTEAD: In the members' gallery today we have two constituents of mine from the beautiful Sunshine Coast, Peter and Gladys Sluis. In the Speaker's gallery we have a former constituent of mine, Gary Young, who is a baseball-playing colleague of mine. I ask the House to join me in welcoming them.

MR. DAVIDSON: Mr. Speaker, visiting with us this afternoon is a good friend and a resident of Delta, Mr. Neil McLeod, and I would ask the House to give him a warm welcome.

MRS. WALLACE: Mr. Speaker, in the precincts today is a very large class of grade 7 students from Mill Bay elementary school together with their teachers and chaperones, and I would ask the House to welcome them.

MR. GABELMANN: Mr. Speaker, the member for Comox reminded me that I left out one person on my list. I'd like the House to welcome Mr. Phil Frost as well.

Presenting Reports

Mr. Strachan, Chairman of the Select Standing Committee on Standing Orders and Private Bills, presented the committee's first and second reports, which were read as follows and received:

"Report No. 1, June 16, 1982:

"Mr. Speaker, your Select Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

"Standing orders have been complied with relating to the petition for leave to introduce a private bill intituled An Act to Amend the Vancouver Charter, except for late filing; but with respect thereto the petitioner has paid double fees in accordance with standing order 98(3). Your committee recommends that a refund of one-half of fees paid be made. Your committee recommends that the petitioner be allowed to proceed with the said bill."

"Report No. 2, June 16, 1982:

"Mr. Speaker, your Select Standing Committee on Standing Orders and Private Bills begs leave to report as follows:

"Standing orders have been complied with relating to the petition for leave to introduce a private bill intituled Seaboard Assurance Company Act, 1953, Amendment Act, 1982, except for late filing; but with respect thereto the petitioner has paid double fees in accordance with standing order 98(3). Your committee recommends that a refund of one-half of fees paid be made. Your committee recommends that the petitioner be allowed to proceed with the said bill.

"All of which is respectfully submitted. W.B. Strachan, Chairman."

MR. STRACHAN: Mr. Speaker, by leave, I move that the rules be suspended and the reports adopted.

Leave granted.

Motion approved.

Oral Questions

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL: I have a question for the Minister of Transportation and Highways. When did the government change the policy about allowing spouses and family members of cabinet ministers to travel on the government aircraft unaccompanied by the ministers themselves?

HON. MR. FRASER: Mr. Speaker, the change was made for spouses on July 31, 1979.

MR. PASSARELL: The government aircraft logs tabled yesterday indicated that the spouse of the Minister of Human Resources (Hon. Mrs. McCarthy) travelled unaccompanied on ten separate occasions, in addition to accompanying the

[ Page 8232 ]

minister on 15 separate occasions in flights all over the province. Can the minister assure this House that Mr. McCarthy did not use any of these occasions to conduct business in the many interior towns where he holds property?

HON. MR. FRASER: I would think that the flights he was on were authorized flights, but I'd have to check the detailed logs.

MR. PASSARELL: The aircraft logs tabled yesterday also show that a certain J. Jordan and S. Jordan travelled unaccompanied on a government aircraft on December 12, 1980. The following day a Dr. Jordan travelled on the craft. Can the minister state to this House that these people were travelling on government business?

HON. MR. FRASER: Mr. Speaker, I granted this permission on compassionate grounds.

FORMALDEHYDE GAS SAFETY LEVEL

MS. SANFORD: Yesterday I asked the Minister of Health a question with respect to formaldehyde levels, and I'm wondering if the minister has decided to reduce the 0.1 parts per million to 0.03 parts per million for portable classrooms, as is the stated objective of his own ministry.

HON. MR. NIELSEN: Mr. Speaker, I have asked officials to review the question posed yesterday by the member for Comox. It would be of some use to me if the member would like to tell me to whom she is referring when she says that it was a recommendation of the ministry. I understand that a specific medical officer has made that recommendation, but it might be of assistance if we knew what reference she made. It is being reviewed by our people in the ministry.

MR. SPEAKER: Perhaps those kinds of comparisons could be made outside of question period.

MS. SANFORD: I'm concerned about the children who may be suffering adverse health effects as a result of the formaldehyde gas levels, and the fact that the minister, the parents, the health officers and everyone else involved may not be aware that those adverse health effects are as a result of formaldehyde gas levels. Has the minister now decided to conduct tests through the Ministry of Health and at government expense to ensure that all children have a safe environment in which to conduct their studies?

HON. MR. NIELSEN: I understand that a considerable number of tests have been made where queries have been offered with respect to the levels of the gas, particularly in portable units. I have no problem in assigning that duty to the responsible medical health officer when such queries or complaints are received.

MS. SANFORD: That's my point: parents may not be aware of the cause of the health problems that they have. It is not good enough to respond to requests from parents. Has the minister decided...?

[Mr. Speaker rose.]

Interjections.

MR. SPEAKER: Order, please, hon. members. Question period shall not be used up in debate, according to the rules.

[Mr. Speaker resumed his seat.]

MS. SANFORD: Has the minister decided to undertake what is his responsibility as Minister of Health — that is, to ensure that those kids have a safe environment?

HON. MR. NIELSEN: I have no hesitation in relying upon the capability and expertise of the medical health officers who have a responsibility in the field of public health. I'll certainly speak to the senior medical health officer to determine whether any of the medical health officers in the field are having any difficulty carrying out such tests as they deem necessary to ensure, as the member asked, that the health of these youngsters is protected. That's their duty, and I know they carry out their job.

MR. BARRETT: A supplementary question: because of the concern of parents in this province, would it not be advisable for the minister to order that all such facilities be tested immediately by the Ministry of Health?

HON. MR. NIELSEN: It may be advantageous from a political point of view to second-guess our medical health officers. I don't hesitate to suggest that the people engaged in that activity take their jobs very seriously and, I think, conduct themselves accordingly. I'll speak to the senior health official to determine if there is any impediment on any of the medical health officers to carry out their duties. But if the Leader of the Opposition feels it would be politically advantageous to, in effect, wave the big stick and order them to do this, notwithstanding what their recommendations may be, I'll consider that.

MR. BARRETT: The minister, in answering, brought in politics. This is a matter of public health. As a matter of public health, are the parents of British Columbia's children expected to wait until they make the request for the studies to be made, or is the Minister of Health going to assume the responsibility for public health and order that all such facilities are tested across the board in British Columbia?

HON. MR. NIELSEN: Once again, I can only repeat that we have responsible people in the field who are responsible for particular programs within the Ministry of Health. I would rather take the advice of our senior medical health officers than the Leader of the Opposition.

MS. SANFORD: Last week in this Legislature the minister said that the medical health officers were only responding to the requests of parents and school boards. In view of the fact that the medical health officers are only responding to parents and that parents may not be aware of the cause of the difficulty, has the minister now decided to undertake those tests on his own?

HON. MR. NIELSEN: Unlike the member for Comox, I don't have the medical expertise to undertake those tests on my own, but we do have competent people within the ministry who can conduct and have conducted such tests. I will specifically ask the senior medical health officer responsible if he feels that it is imperative that such tests be conducted on

[ Page 8233 ]

all units in the province. I will also ask him to provide me with a resumé of the tests that have been conducted and the results of these tests. I will ask a number of the medical advisors within the ministry for their advice in carrying out such a program. I can assure the House that if the medical advice from the ministry and from those senior officers indicates that it is advantageous and necessary or desirable that massive tests be undertaken, we will certainly do so.

B.C. PACKERS LTD.

MR. LEA: I have a question for the Minister of Environment, Mr. Speaker. As I understand it, the Cabinet Committee on Economic Development met with B.C. Packers, and you have made a decision to support B.C. Packers' closure of the groundfish plant in Prince Rupert. Will the minister make available to the Legislature and to the public the information he received from B.C. Packers which led him to make the decision to side with B.C. Packers in this plant closure?

MR. SPEAKER: A future action of the minister — do you wish to answer? Please proceed.

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

MR. LEA: Why?

MR. SPEAKER: That question is in order.

MR. LEA: I would like to ask the minister why his government can be so firm when dealing with a cooperative, like the Prince Rupert Fishermen's cooperative, but when it comes to B.C. Packers, they roll over and play dead.

HON. MR. ROGERS: The two situations are not related.

MR. LEA: Has the minister decided to make the information from B.C. Packers available to the public and to the workers who've been affected by the layoffs in Prince Rupert because of the closure, or does he expect us to take the word of the cabinet committee that B.C. Packers have a legitimate reason? Maybe they have. Can we see the reason?

HON. MR. ROGERS: I have already answered the question.

B.C. HYDRO BORROWING

MR. STUPICH: Mr. Speaker, I have a question to the Minister of Finance. B.C. Hydro has borrowed $1.5 billion in U.S. funds over the past two years. B.C. Hydro told the Utilities Commission yesterday that it has to find an extra $30 million this year to meet interest payments on its total $3 billion U.S. borrowings. Can the minister advise why he has concentrated in the U.S. market during this period that the Canadian dollar has been in steady decline?

HON. MR. CURTIS: Mr. Speaker, in order to be completely accurate, I will take the question as notice. However, to draw the inference that I have concentrated on a particular market is perhaps to ignore the facts of the markets themselves.

MR. STUPICH: I have another question: in view of the fact that the minister's policy of massive borrowing in U.S. financial markets will cost B.C. Hydro customers in excess of $30 million in extra interest payments this year, has he decided on a policy of spreading borrowings among a variety of currencies to minimize the risk associated with dealing in the U.S. market alone?

HON. MR. CURTIS: It is a matter of public knowledge that in fact we are borrowing in Canadian and U.S. dollars. In some instances, those dollars have been found in Europe and in the Canadian and United States markets. I would be happy to expand on that when I respond with the balance of the question at a later time.

MR. STUPICH: I don't recall Canadian borrowings for Hydro, but that could be.

A third question: in view of the fact that several Canadian provinces have successfully borrowed for their utilities from the Alberta savings trust fund, why has the government not succeeded in making a similar arrangement with our Alberta neighbours?

HON. MR. CURTIS: I indicated a moment ago, in answering the second question from the hon. member for Nanaimo, that we've investigated a number of markets. Indeed, on at least a couple of occasions last year, I reviewed the accessibility of money from the Alberta heritage trust fund.

SMALL BUSINESS BANKRUPTCIES

MR. LEGGATT: My question is also directed to the Minister of Finance. The tax notices are out now for this year, and there is the beginning of a Poujadist revolution in regard to small business people who find their municipal land tax increasing by up to 50 percent, 60 percent, 70 percent, 80 percent. Given that this year we have seen bankruptcies in this province at a staggering 140.8 percent above last year, has the minister, who took something like $90 million away from the municipalities in this budget, decided to restore revenue-sharing grants and provide some emergency relief to municipalities so that they can help their small business community stop being savaged in this economy?

HON. MR. CURTIS: I think the member is aware....

I believe he was in this House during the debates with respect to revenue-sharing. In response to the question, I think that the revenue-sharing program administered by this government, and particularly by my colleague the Minister of Municipal Affairs (Hon. Mr. Vander Zalm), still stands as the best in the country.

HON. MR. NIELSEN: On a point of order, yesterday the member for Skeena (Mr. Howard) asked a question in question period which I took as notice. The member said: "On October 15, 1979, the Minister of Health hosted a dinner for 16 people in Prince George." The Minister of Health did not host a dinner for 16 people in Prince George at that time. It was the Minister of Consumer and Corporate Affairs.

MR. SPEAKER: Order, please. This is not a point of order.

[ Page 8234 ]

HON. MR. NIELSEN: Mr. Speaker, the point of order is this: I took the question as notice, but upon researching the rules of the House, I find that the question appears to be out of order; and I'm somewhat perplexed about how to respond to a question which is out of order, unless I could receive leave of the House.

Leave granted.

EXPENSES OF MINISTER

HON. MR. NIELSEN: The member for Skeena asked a question yesterday with respect to an official luncheon hosted by the Ministry of Consumer and Corporate Affairs in Prince George on October 15, 1979, about two and a half years ago. Yesterday afternoon I received from the press copies of documents which apparently relate to this luncheon. I've asked a number of public employees to advise me of the circumstances with respect to that occasion.

The member for Skeena suggests that the first invoice from the Inn of the North in Prince George separated the charges for liquor and meals. That's correct. The invoice was forwarded to the ministry accounting division upon being received in the minister's office. An employee in the accounting division offered the advice that the invoice could not be processed in that form, saying: "We cannot reimburse for alcohol; only the food." I'm advised that the information at that time within the Ministry of Consumer and Corporate Affairs was that such expenses for an official luncheon were proper and payable.

However, there apparently was the belief that such invoices were to be submitted in a manner that showed the overall cost for catering and hospitality. There was no argument, I'm advised, whether expenditures for liquor with meals were allowed. The understanding was that these legitimate expenses would be paid, as they had been previously and have been since. I'm further advised that the confusion over processing this invoice was resolved with a subsequent invoice being submitted by the hotel for the same amount, but submitted in a different form: that is, an all-inclusive price for the luncheon, food and beverages included, as well as a breakdown of details of expenditures, including costs of liquor and food. Subsequent research indicates to me that the policy at that time permitted such expenditures, and that policy remains in effect today.

The dinner was held to meet with a number of citizens in the Prince George area with respect to ministry policies and other government business. Among the guests were the mayor, superintendent of the RCMP and various other people. Lunch occurred between visits by me and officials to Consumer and Corporate Affairs offices in Prince George. All arrangements were handled by staff, and all arrangements for payment were handled by staff. I'm advised that at no time did any of the paper relating to the expenses of the lunch go over my desk.

The payment of the account for the Inn of the North was viewed by members of staff to be routine. In review, it certainly was routine. That there was a difference of opinion as to the form of the invoice probably recognizes the staff concern about detail. The matter apparently was resolved after a series of communications between my ministry office, the accounting division and, presumably, the hotel.

The lunch was proper, including beverages, and the total cost was never altered. No invoice was doctored or altered, despite the charges of the member. Rather, a subsequent invoice was supplied by the hotel with a detailed breakdown to meet the accounting procedures of the ministry and the comptroller-general's office. There appears to be no conflict with respect to policy or rules, but one of the form of the invoice.

In conclusion, the luncheon was correct, the charges were correct, and the payment was correct. I'm not advised by anyone that there is a question with respect to this. There was some disagreement with respect to the manner in which the invoice was tendered, and presumably a staff member advised the hotel of the form acceptable to the ministry and comptroller-general's office. I'm advised the invoice....

Interjections.

HON. MR. NIELSEN: I wonder if that member could come to order for a moment, Mr. Speaker.

MR. SPEAKER: Order, please, hon. members. Let's hear the answer.

HON. MR. NIELSEN: I am advised that the invoice which was paid included an attached printout separating the costs of food and liquor, and I am advised that invoice No. 0784 in the comptroller-general's office has attached to it a printout slip, No. 159456, which was the official record and clearly indicates that there was no doctoring or altering of invoices. Mr. Speaker, perhaps if those members feel they were doctored or altered, they might make the statement outside identifying who made the alterations.

HON. MR. FRASER: Mr. Speaker, I would like permission to reply to a question I took on notice on Monday last.

Leave granted.

USE OF GOVERNMENT AIRCRAFT

HON. MR. FRASER: The member for Atlin (Mr. Passarell) asked on Monday last: "Have any British Columbia government aircraft travelled outside Canada since January 1, 1982, and if so, will the minister provide all the details?" Mr. Speaker, the answer is yes, they did. On January 21, 1982, there was a flight from Victoria to Olympia, Washington, and return; on March 21, 1982, there was a flight between Victoria, Vancouver and Seattle, return; and on May 2, 1982, there was a flight from Victoria, Vancouver, Kelowna, Juneau and Anchorage, Alaska, back to Victoria. One exception to that is that in approaches or takeoffs our aircraft enter American airspace constantly when they are going in and out of the Victoria airport.

Hon. Mr. Wolfe tabled the annual report of the British Columbia Buildings Corporation for the fiscal year ending March 31, 1982.

Hon. Mr. McClelland tabled the annual report of B.C. Hydro for 1981-82.

[ Page 8235 ]

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: Mr. Speaker, I call report on Bill 30.

SOCIAL SERVICE TAX AMENDMENT ACT, 1982

Bill 30 read a third time and passed.

HON. MR. GARDOM: Mr. Speaker, committee on Bill 39.

HOUSING AND EMPLOYMENT
DEVELOPMENT FINANCING ACT

The House in committee on Bill 39; Mr. Davidson in the chair.

Section 1 approved.

On section 2.

MR. STUPICH: In section 2 under "Purposes," in the second line it says, "other capital projects." Now, that would seem to leave the door open to almost anything that would create employment, including northeast coal, for example. There are no strings on it that I see, and I just wonder what the minister has to say.

HON. MR. CURTIS: Mr. Chairman, with respect to section 2, that is correct. It is sufficiently broad, I think, because we speak of it as a housing and employment development act. I don't think that it would be employed in connection with the project that the member mentioned, but it was drawn deliberately broadly.

MR. STUPICH: Again, Mr. Chairman, with respect to purposes, it says "to create employment by financing housing." Now I wonder whether the minister has any plans as to exactly how the government is going to go about financing housing. Will it be lending money to purchasers of homes or to contractors? Are there any plans?

HON. MR. CURTIS: I thought that second reading made it quite clear that this was for the issuance of bonds which would lead to the construction of housing and to employment associated therewith.

HON. MR. BENNETT: Mr. Chairman, I'd like to speak to section 2 of this bill. Obviously, in debate on second reading not all members of this House were clear on the intent of the government to do everything it can, on a provincial basis, to fight a recession that is affecting our country as well as our province. The recession is international in nature. Our provincial government isn't going to sit back and say that it can only be resolved by the United States doing something, or that it can only be resolved if the Trudeau government, supported by the New Democratic Party, would withdraw its disastrous spending policies and economic policies and the national energy policy.

We've said that there are a number of areas in which the people of this province should be given an opportunity to be assisted. It does not have to be a handout. The concept of development bonds and housing bonds is to be able to float bonds — hopefully, with the agreement of the federal government — over the next two, three, four or five years, depending on what's deemed appropriate by the Minister of Finance, and that they would be tax-free. You must understand that the province and the federal government would be recognizing that we're in a very severe recession in 1982. Our people are hurting. Rather than plunge the province into debt by massive borrowings, you would issue development and housing bonds that could meet a variety of needs and which would be tax-free. And because of the no-tax provision, the bonds could be issued at a much lower interest rate.

MR. STUPICH: On a point of order, Mr. Chairman, I think I was in error in discussing section 3 under section 2. I think the Premier is also in error; his discussion really belongs under section 5.

MR. CHAIRMAN: The Premier on the same point of order?

HON. MR. BENNETT: No, Mr. Chairman.

To continue, establishing the bond itself would relate to the purposes...and that's the authority established. I can sympathize with the member for Nanaimo, who is having some difficulty with.... It is complex for the layman. I would like to assist him by explaining how the bond would work and how it will be applied. Of course, because of the tax-free provision, the lower coupon rate would provide money to the provincial government at a low interest rate. For example, to draw a parallel, if the federal government agreed and the bond didn't have federal and provincial income tax, then presumably, if interest rates are 18 percent, and someone is in a 50 percent tax bracket, the bond could be issued at about 9 percent. If you could get money today at 9 percent, it would mean that the province could turn around in a variety of ways to assist housing development, small businesses and other things. The province could lend money at half the current interest rate, plus the cost of handling. True, we would be forgoing future income. We would be putting it to use today when our people need help.

I find it strange that a member of this assembly, who should be concerned about the economy in all its aspects, would question the broad uses to which this money could be put. We must have a government that is ready to act in any area where government assistance will genuinely help the employment or housing of our people. The government is working on a number of proposals covering employment and housing. We've gone beyond the normal line-ministry responsibility and have set up a cabinet committee consisting of a number of ministries that would have some input on job training, housing, land or business development. All of them are part of this committee in seeking a common solution so that this government can have a united front in fighting some of the effects of a recession. It should not be lost that in all of these uses it would be impossible for a single provincial government to fight off the disastrous economic policies of the Trudeau government. It would be impossible for our taxpayers to spend the kind of dollars that could completely

[ Page 8236 ]

counteract the federal financial policies and ten years of wild and profligate spending by the federal government at times when they ran the debt of this country to such a level that now 25 percent of all our federal taxes go to pay deadweight interest.

In speaking to section 2, I would say that the deadweight interest policy and running into the debt that started in '73 during the minority government years of the Trudeau government, where they were held in power and almost blackmailed.... No, that's too strong a word. They were almost encouraged into that type of spending by the New Democratic Party opposition and were propped up in government during that period. They have created the inflation, the declining dollar in our country, a sick economy that is responding more poorly than in most industrialized countries.

Anyone that doesn't understand the basics of what is wrong economically, because even the socialists in France, who the grinning member for North Island (Mr. Gabelmann), who will go anywhere to get elected, having been defeated in North Vancouver–Seymour and who says, "Have election pamphlet, will travel," because this is much easier than having to try to find a job in the private sector.... Even he will know that his socialist government in France, who are following the policies of deficits, high spending and increased inflation that the socialists in Canada are advocating, have now completely turned away from that policy after this short time in government after seriously hurting their economy even more and creating inflation, and have now gone for wage and price freezes. They're cutting back the cost of government and government services in France....

AN HON. MEMBER: What's that got to do with section 2?

MR. CHAIRMAN: Order, please, hon. Premier.

HON. MR. BENNETT: That's why section 2 in this bill is necessary — to have the flexibility in which this little provincial government, despite all of the opposition, is able to carry out a number of programs.

The economic recovery program of this government isn't just restraint. The other side of the economic recovery program will be developed by this bill, particularly because of the flexibility of section 2. I could see that the members opposite don't want this government to be able to help the people, but I want to say that in the areas of housing and mortgages and the areas of small and medium-sized businesses in forestry that getting affordable money when a provincial government doesn't have the constitutional power to control a monetary supply or the price of money in this country.... Where that is a federal measure, this government will take the means that it has. This bill seeks the cooperation of the federal government, but I want to say that I'm not confident that we can get their cooperation. Therefore this bill allows the minister to issue these bonds in the name of the province on its own, and the flexibility in section 2 is the important thing, because that's what we can do over the coming months and year to be able to help the people of British Columbia, who are hurting. To restrict the Minister of Finance and the government from having the flexibility at this time to respond to needs, some of which are identified now and some of which may not be identified yet, would be to handcuff the government from trying to lead our people through a very difficult and serious time. The members opposite should know that section 2 then will give us that flexibility. There has not been a period of recession such as this since the Great Depression. There has not been a period in which governments have needed the type of legislative flexibility and monetary flexibility that this Minister of Finance is asking for in section 2, to respond not just to the needs but to the hurts of our people. It is a very important bill in this Legislature, perhaps one of the most important we'll deal with this year. While the government has other programs in its economic recovery program which will be unfolded and implemented over the coming months, Bill 39, with the great flexibility of section 2, is going to be the cornerstone of the economic recovery that this provincial government is trying to implement for our people.

I am surprised that the member for Vancouver Centre is still here. Usually he is golfing at this time of the day. Mr. Chairman, you should advise the hon. member not to walk on the carpet with his golf shoes, because the cleats are creating great damage. Public accounts won't have the money to fix the damage done to the carpet by the golf cleats of members of the New Democratic Party.

MR. STUPICH: I hope the Premier realizes that on both sides of the House we were laughing at him. His remarks might have had some relevance in second reading, but they had very little relevance to the second section of this bill. May I just say that in questioning the broadness, I was simply asking whether or not it was the government's intention that the money raised under this program would be available for any purpose at all. That really isn't in section 2; it's in section 3.

I'd like to make one other point. The Premier, in talking about this program, said it could be the single most important program introduced in this session. I hope we accomplish something much more worthwhile in this session than this particular legislation. The Premier suggested in the course of his remarks that if the current interest rate is around 18 percent, these bonds would be issued at a rate of around 9 percent, which mathematically adds up if they're not paying any income tax — those who are in the 50 percent bracket. But that certainly limits it to those who are in the 50 percent bracket; anyone earning less than that is not going to be so interested in the program.

I have another question that I'd like to ask, Mr. Chairman. The man touting these bonds, the one who just spoke in this debate, is the same person who persuaded the people of British Columbia to invest some $450 million in BCRIC shares at $6 a share. During the three years they've held those shares, it has cost them something like $3.60 in interest, for a total cost of $9.60; today they're worth $2.40, which is a loss of $7.20 per share in three years. Does the Premier really think he could persuade the people of British Columbia to follow him again simply because he says it's a good deal for them?

MR. GABELMANN: Mr. Chairman, I wanted to make the same point. The last time the Premier was so enthused about a project, it was BCRIC. I hope this one doesn't go to the same grave as that one.

[Mr. Strachan in the chair.]

May I, Mr. Chairman, be the first person in this debate to talk about section 2? I actually wanted to ask some questions

[ Page 8237 ]

about section 2; I didn't want to get into second reading. We have had a second reading debate here for the last little while, which seems to me really strange in committee.

I gather that the Minister of Finance is the chairperson of this corporation. Who will administer the programs conducted within it? In other words, if there is a housing program, will the housing minister (Hon. Mr. Chabot) be involved in conducting that program or will it be the Minister of Finance? If there is an employment program, will it be the Minister of Labour (Hon. Mr. Heinrich), who is properly the minister responsible for manpower programs; will it be the Minister of Human Resources (Hon. Mrs. McCarthy), who for some reason has been given his responsibility in those areas; or will it be the Minister of Finance (Hon. Mr. Curtis)? The Minister of Housing whispers across that it will be the Minister of Finance. I'll wait for the official answer from the Minister of Finance before I make any comments about that, but it's a peculiar way to run a government, taking programs away from their respective ministries and giving them to other ministers to implement. Does that demonstrate a lack of confidence in some ministers and more confidence in others? Just what is involved in that?

While the minister is responding to that — and I may want to come back at him, depending on his answer — page 252 of the estimates book is entitled "Summary of Proposed Expenditures: Employment Development Account, fiscal year 1982-83." The minister will be familiar with the funds. Schedule B totals $132 million. The first item is "New Funds." It says: "A total of $25 million is being made available for job creation initiatives emphasizing housing and forestry. These initiatives are to make use of available federal unemployment insurance funds, with additional provincial funding to provide needed employment opportunities." This new fund is given $25 million. It's my understanding that $10 million of the $25 million has gone to the youth employment program, and another $10 million is being allocated to the Axworthy program, for lack of a better name. Is the other $5 million going into this program that the Minister of Finance will be administering under section 2?

HON. MR. CURTIS: The answer to the question just posed by the member is a very clear and distinct no. It is not.

The member for North Island perhaps would care to reflect on the process which has been in place for a good number of years with respect to construction of schools and hospitals — certainly with respect to the funding of the provincial share with the School Districts Capital Financing Authority and the hospital financing authority. This is set up in precisely the same way and follows that model. It certainly is not my view that the Minister of Finance would determine the programs to be undertaken by the money raised through this act; rather, the minister appropriate to whatever activity it might be would determine this — Lands, Parks and Housing or the Minister of Municipal Affairs or whatever. One can draw all the examples.

The member, I think, would know, and members of the committee would also know, that as the minister designated for the Regional Hospital Districts Financing Authority and the School Districts Capital Financing Authority, of course the responsibility for the allocation of moneys and the raising of moneys rests with the Minister of Finance of the day. It was practised that way between 1972 and 1975. Then the minister responsible for the construction program, whether it be hospitals or schools, is obviously the key and responsible minister as to the activities which take place once the money has been raised or after the money has been raised.

The member for Nanaimo (Mr. Stupich) spoke about tax credit. The inference that he has drawn is not correct. I appreciate that it might appear that way, but we're speaking here of the amount of tax credit. Therefore it is not as exclusive a club as it might appear to be if we followed the level of taxation that is paid by an individual.

MS. SANFORD: I'm still not quite clear what the minister means in terms of the responsibility for determining what housing will be built under this program resting with the minister responsible — presumably the Minister of Lands, Parks and Housing (Hon. Mr. Chabot). I understand there is to be a cabinet committee established to develop the policy with respect to what is going to be built. If it's a cabinet committee, then I assume that it is the responsibility of that whole committee and not just the Minister of Lands, Parks and Housing. If it's under the committee, there must be two housing programs that are carried out by that committee. I know the minister doesn't have his estimates book in front of him, because I saw him looking for it, but under Schedule B there is a separate $25 million set aside for development of housing. Does that mean there are two separate housing programs that are going to be established? If so, how do they differ and how much money is being allocated to the second one?

HON. MR. CURTIS: I am surprised that there is difficulty on the other side. I wasn't looking for my estimates book; I was looking for a mint or a candy or something.

Interjection.

HON. MR. CURTIS: This question from the member for North Island and now from the member for Comox developed along the lines of the extent to which the Minister of Finance would be involved in determining the activities carried out. It is correct that there is an employment committee of cabinet, but there is certainly no need for and no possibility of conflict between, as an example, the Minister of Lands, Parks and Housing and housing activities which might be taken under this section in this bill and the employment committee which is looking at a variety of employment initiatives.

Again, I have to draw the parallel with established authorities in place now where a minister, in this case the Minister of Finance, is responsible for raising the money before or after the fact. The policy is established not by the Minister of Finance but on the recommendation of the appropriate minister and endorsed by the executive council. Nothing has changed in that regard. Then there is the administration, the carrying out of the program or the policy as defined by the executive council. Clearly, however, the Minister of Finance is the minister responsible for the raising of the money which fuels this program.

MS. BROWN: The key thing that we need the minister to give us a hint on is "other persons." I think that's what my colleagues are trying to find out. In the section where it says the authority consists of "the Minister of Finance and other persons," we want to know if those other persons would

[ Page 8238 ]

include the ministers included in schedule B on page 252. For example, would the Minister of Labour or the Minister of Human Resources be involved?

HON. MR. CURTIS: Mr. Chairman, again I would expect that upon passage of this bill, the Lieutenant-Governor-in-Council would want to set up an authority as is the case in the authorities which have been in existence for a number of years. Again, I draw the parallel of the existing practice with respect to the Minister of Education on the school districts' financing authority. Very clearly, that would be an appropriate minister to have in that event, but I use it only as a parallel example. Other persons would be other members of the executive council of the day, who would have an appropriate role to play in this authority in its housing and employment activities.

MR. GABELMANN: Mr. Chairman, I think I understand the procedure, and I apologize to the minister if he thinks we're a bit dense. Sometimes it's important to clarify these things. I'll have the minister tell me whether this is the way it's going to work: the Minister of Finance is going raise the money, the Minister of Human Resources and her committee will make decisions about how that money will be spent, and the appropriate ministers in whichever area that money is being spent in will administer whatever programs flow from this money. Is that correct?

HON. MR. CURTIS: Mr. Chairman, that tends to compartmentalize it more than would be the case — certainly more than I envisage and certainly more than the government envisages. There is an employment development committee, agreed. But that employment development committee, and I may be straying away from section 2, Mr. Chairman....

MS. BROWN: No, you're not.

HON. MR. CURTIS: Well, we'll leave it for the Chair to decide. I don't want to stray too far from section 2.

Obviously the employment development committee cannot and does not, even in the stage at which it's operating now, function in isolation from other ministries involved in the generation of employment and development. You have to have the Minister of Finance, whoever that may be, responsible initially for the authority established under this section. Then the activities would flow through government. Again I would only have to recite examples which I indicated earlier, and become repetitious.

Section 2 approved.

On section 3.

MR. GABELMANN: Mr. Chairman, section 3 is the section we began the debate on half an hour ago. The purposes of the authority are to create employment by financing housing and other capital projects. Has the government decided in which areas of housing they intend to spend some of this money?

HON. MR. CURTIS: Mr. Chairman, I indicated in second reading that Bill 39 would have to be viewed as a companion piece to other legislation that is before the House, or that has been passed by the House, and other initiatives that can be taken by the executive council. To answer that the government has not decided would be incorrect and would be misleading the committee. The government has made a number of decisions, but those decisions are by no means complete. So we're in the developmental stage.

MS. BROWN: I wonder if the minister can tell us whether any criteria have been developed to cover something like "any other programs." We're back with schedule B on page 252, which has responsibility for creating employment. The purpose of the authority is to create employment, and it says: "...by any other program the committee considers advisable." Have any criteria been designed or developed yet for that?

HON. MR. CURTIS: The answer is that criteria are in the process of being developed. Again, this bill simply establishes the authority with the tax exemption, which we hope will be accepted by the senior government in Ottawa. This is the mechanism. This is not the total initiative. This is simply the means by which we achieve that which is required in order to undertake activities which were first identified in the throne speech.

MR. MITCHELL: Mr. Chairman, it's under this section not so much housing but the other capital projects — that I would like to ask the minister to recall the debate that we had back in the closing hours of our fall session, when members of this side of the House brought to the attention of the government the need for projects that were going to create employment. At that time we felt that the government must plan capital projects that can be utilized when there is a downturn in employment in the province. We can't wait until we're in the midst of a depression and then start bringing in bills of this type. This is why we asked the government to continue in session to bring in the programs that we outlined.

It's under this particular section that I would give to the minister and to the government some of the suggestions that.... I think that if we are going to have a program that will create employment, we must consult with the municipal and regional governments in the province and look at programs that they need in their various communities. I bring it to the minister's attention that in the western communities of my particular riding, because of the disastrous planning that has been taking place under the Highways ministry — allowing massive housing developments and subdivisions to go in there without taking into consideration the flooding problems that they have created.... I feel that this is one of the programs that the provincial government can work on in cooperation with the regional governments, to get a solid capital program of flood control into the municipalities.

One of the things I'm afraid of is that if you do not consider municipalities and regional districts throughout the province for these capital programs, someone in the cabinet may decide that it is more desirable to spend the money on their sport palaces or their convention centres in Vancouver. I think it's vitally important to the province of British Columbia that capital programs for job creation be spread throughout the province. They shouldn't be utilized in one particular area for some programs of the government.

I feel that if we are going to go this way — and I think it shouldn't be a short-term program that is only going to be on call for a political reason for the next two or three years — we should consider capital programs throughout the province

[ Page 8239 ]

that will take into consideration the need for job stimulation and job creation that will pick up the slack when the slack is there. They should be on stream or on the back burner when the economy needs them. There should always be projects that are ready to go at the time when you need that training for youth employment. Capital projects could be put into operation. You could coordinate apprenticeship training, training with equipment, for kids who are coming out of school, and out of work, so they can go on to other projects when the economy improves. I think we should look at the capital program and the housing program as a means of job creation, not just window-dressing for a political election or something. It should be part of economic planning by the government for the people of British Columbia.

MS. BROWN: I want to complete my line of questioning. I was very pleased to hear that the criteria are still being developed, because it means that it's still possible to have some input.

When programs to create employment are developed, the problem is that we always tend to leave out the same group of people.

HON. MR. CHABOT: Women?

MS. BROWN: Women, right. See how clever the Minister of Housing can be when he really puts his mind to it, Mr. Chairman? So there you have it.

However, this is for the Minister of Finance, the heavy we're dealing with now. I just want to bring to his attention the Statistics Canada report that came out on Monday, which stated categorically: "Families headed by a woman trying to feed at least one infant were the hardest hit by unemployment in 1981." When programs are designed to create employment, very rarely is this group ever taken into account. The report goes on to say that unemployment among single mothers with at least one child was at an alarming 32.5 percent. If we're really serious about addressing the poverty of these families — that is, the single mother and her child or children — and about cutting down the numbers on the income assistance rolls and on the welfare rolls, then this particular group has to be taken into account when these programs are designed by the minister who has the authority to design them.

Very briefly, I want to repeat that the Statistics Canada report said that the unemployment rate for men and women in 1981 was on the average about 7.6 percent, but in the instance where a widowed, divorced, separated or unmarried mother was the head of the family, it was a staggering 18.8 percent. There have been programs designed that address themselves to this. For the most part, they create jobs that pay the minimum wage. We find that these programs enshrine the poverty of the single-parent family and of the single mother and her child.

I am hoping that the Minister of Finance, when developing the criteria for creating employment that will have access to the money outlined in this bill, will look at a different kind of employment for the single mother, for the women who are heads of families — not necessarily your minimum-wage jobs, but good programs that pay decent salaries, give a decent income, so that these women can break the poverty cycle. I would appreciate it if you would take that into account, Mr. Minister, when you design your criteria.

HON. MR. CURTIS: I wouldn't want to leave the committee with the impression that I will develop these criteria single-handedly. I don't think that was intended by the member in her remarks. Obviously the criteria are being developed by a number of the members of the executive council, including my colleague the Minister of Human Resources (Hon. Mrs. McCarthy), who will want to consider the points raised in those remarks.

I am sorry that the member for Esquimalt–Port Renfrew (Mr. Mitchell) did not stay for my response to his comments. Nonetheless, it should not be seen that this authority which is being established would replace programs where there is direct aid to municipalities for works. I think that is relatively unlikely in the context of this bill and this section, because there are other programs in place, other than in the case of new housing. As he observed, in the case of new housing it might well have a role to play, but not in terms of correcting problems which may or may not exist.

I think he also asked that this be provincewide. I can assure the committee that indeed the activity seen in this particular piece of legislation is very much provincewide; that is a very fundamental thrust of that which we are undertaking. My colleague the Minister of Human Resources, who is chairing the committee, and all of us, as members of the executive council and members of government, want to ensure that moneys generated in this way are utilized provincewide. That is why, much earlier in the debate on an earlier section, and because the example has been raised, I indicated it was very unlikely that this would relate in any way to northeast coal as a project. It might relate to the area for something which is occurring there, but only to the extent that it might relate to any other area.

MR. DAVIS: We're on section 3 — purposes. I understand that this legislation is designed in such a way as to enable funds to be raised more easily in the province for projects that are job-intensive. Essentially, this legislation gives a tax break to those who might not otherwise be prepared to lend for the purposes for which this authority spends the money. I'm personally comfortable with the idea that this authority would lend this special money, this lower tax liable money, for housing.

I am somewhat concerned about the phrase "and other capital projects." As to the extent of the tax break, if interest rates were in the order of 20 percent for housing purposes, this is a tax break of up to three points. So it is more attractive as far as both the builder and the buyer of the house are concerned, because the monthly or annual capital charges will be less to that extent. If interest rates were of the order of 10 percent, there is still a tax break of the equivalent of 1.5 percentage points — and that's true if only the province pursues this program. If the federal government were also to develop a parallel program, the interest rate that is effectively paid by the purchaser of the home in monthly or annual installments would be half of that charged generally in the marketplace. If the marketplace was charging 20 percent, the ultimate owner of this home would only be paying the equivalent of 10 percent, or of that order, if both the federal and provincial governments were to pursue a program of this kind. If the market rate was 10 percent, the effective rate would be more like 5 percent as far as the purchaser of the home is concerned. Clearly, therefore, it is a tax break designed to attract more capital towards housing.

[ Page 8240 ]

Housing in this country, and generally on this continent, has tended to be a private enterprise sector activity Certainly it has an income as well as an outgo; it's a viable financial operation. I wonder what these "other capital projects" are, as it seems to me that they again would have to be of the nature of activities in the private sector. I don't imagine that this project, as the minister said, is designed to raise money bearing less tax for large projects of the nature of northeast coal, but there are other projects that one could envisage — numerous ones perhaps, but essentially in the private sector. I assume, because greater employment or more jobs is one of the purposes of this legislation, that it would be a tax assist or a tax break for those activities that are job-intensive in terms of jobs in B.C., as distinct from jobs outside — high B.C. job-content types of activities.

I would like the minister to give us some idea of the nature of these "other capital projects." Viewed from the perspective of the private sector, this is an area of government involvement in that private sector, government deciding which kinds of projects — if indeed not which individual projects — will get a tax break. I would like to know a little more about the "other capital projects" and perhaps what proportion of this initial $250 million. Eventually, perhaps annually, that figure will be increased. What is the nature of these private-sector type activities that are going to have a tax-break advantage?

HON. MR. CURTIS: It will be recognized that in drafting legislation of this kind, you seek words which provide as much flexibility as possible. I've already indicated the kind of project for which the moneys raised would not be utilized. Indeed, the cabinet committee on employment is seeking, from any and all within British Columbia, suggestions as to the kind of project which should be undertaken. That is why we wanted — I notice my colleague the Minister of Human Resources (Hon. Mrs. McCarthy) nodding in concurrence — this flexibility. It might be a community hall; it might be a facility for seniors in another community; it could be a whole range of things which will generate housing and employment. I trust that assists the member.

MR. BRUMMET: Originally I had considered making comments under section 5, but I think it would be as appropriate under section 3, in that the intent here is clearly to raise money for those purposes by the issue of housing and employment development bonds. It is with some trepidation that I enter into debate in the world of high finance. However, I would like to suggest a basic concept or principle that might be workable within this bill and that would also provide considerable money for this purpose.

As I understand this bill and concept, it is to raise money by issuing bonds and then making the interest income-tax exempt. That would encourage people who can earn the interest. I would like to suggest that this limits the participants to those people who have enough money to buy the bonds. They will benefit from the income tax exemption on the interest. I would suggest there is a large fund of money in the private sector that could be tapped in another way by any citizen who pays any income tax whatsoever. So my suggestion is basically that to raise money, you allow any person who does pay income tax to deduct from their income tax a certain amount. A maximum figure could be established; that could be $500, $1,000. There are a lot of people that pay that much provincial income tax, if they don't pay it in total. If the federal government could be enticed to be included in a scheme such as this, then that would certainly make a great deal of money available in, this province from personal income tax. So I'm suggesting that these people invest money in this program at a lower interest rate, instead of paying income tax.

To illustrate, suppose a person, after all calculations, pays $2,000 in provincial income tax. If that person could invest $1,000 at 10 percent.... I can't think of anyone in this province who would not rather invest $1,000 at 10 percent than to pay it in income tax to any government. So you have a very strong incentive built in. It would pay them to take money out of a savings account at 15 percent or 16 percent, because this would be money they could deduct from their 1983 income tax form.

Using that example of $1,000, it would almost pay them to take their money from a savings account. That money could be made available at a preferred interest rate for the purposes outlined in this act. Using the 10 percent that they would earn on this money, instead of paying it in income tax next April — and allowing the institution to charge, say, 2 percent handling charges — I would suggest there would be a lot of 12 percent money available. It could be controlled by the very conditions that have been outlined in this act. It would, in effect, not cost the government anything at this time to make this money available quickly. Next spring it would reduce the amount of income tax that the provincial and federal governments would collect, of course, but I would like to think that through the savings that are made, and the extra sales tax and so on that is generated, we would recover a certain amount of it.

The reason this suggestion appeals to me is because there would be no need to create another bureaucracy to handle this. There would be no need for government to take this money as income tax and then put it into various programs. Let that happen out there with the government only setting the guidelines, as indicated in this act. I think this act could almost cover it with just a few slight changes.

In effect, you have the credit unions — or any banks could handle this — setting up a separate account for this type of money with a special receipt guaranteeing that the people would get 10 percent on their money. They would then loan this money out at 12 percent and use the same guidelines for how much they would loan and where they would loan this money that they do now for mortgages or for housing of any type. In other words, they would use their same evaluations. I'm basically saying to leave the money in the hands of the people and give them the break. Let the little guy invest that amount at a lower percentage rate instead of paying it in income tax. Of course, as the money came back into that account — say, at the 12 percent — that money could in turn be limited to that account so the fund would become self perpetuating. If it were continued in another year, you would find that we would get away from government collecting the money for private enterprise and from individuals and then using it to subsidize programs. I think it could happen right out there if we just set some guidelines for these purposes and then left it alone.

As I indicated, I think it would make quite a bit of money available immediately. That money would not cost the government until the income tax returns next year, by which time I'm hoping a lot will have happened to recoup some of it. Certainly if we don't, we would have to spend that much more in subsidy programs, etc.

[ Page 8241 ]

I do have some reservations. There's a lot of talk about having to subsidize housing. I know that I have some trouble with taxpayers putting a lot of money into subsidized housing or rental accommodation in the Vancouver area, because people prefer to live there, when the vacancy rate in, say, Fort St. John is around 40 percent. I've made this point before. If people earn their own money and are dependent on their own income, then certainly they should have the right to live wherever they choose. But if they are dependent on funds from the taxpayers, surely those taxpayers, through their government, could say we are not going to pour a million dollars out here when there's a million dollars of accommodation somewhere else where you can be subsidized just as well. I know that many members will argue with this, because they say: "Why should people have to move somewhere else to benefit?" That's actually aside from the concept that I was making. I'd just like this to be considered. I think it could be done fairly quickly. I think it could be a very beneficial program.

I mentioned at the beginning that it was with some trepidation that I enter into the field of higher finance, and I think the technical aspects would have to be worked out. I would like the minister, even if he can't respond to it at this time — I realize it's not that simple — to consider that basic simple concept that allows any and every citizen in this province to go in.... You'd have to set a maximum — be it $500 or $1,000. Any one of these people would, I think, invest their money in something of this nature and a great deal of private sector money would be handled by the existing institutions without having to do much more than set the guidelines.

I think that anyone in this province or in this country would rather invest money at even 5 percent than pay it in income tax. I won't use that ridiculously low figure, but I think there's a lot of money available there. It's an opportunity to allow anyone and everyone to participate — not just the people who have the big money to make the loans and buy the bonds.

MR. DAVIS: Mr. Speaker, when I asked the hon. minister about other capital projects, he mentioned community halls. The projects which will be financed this way and which indeed will have a tax break have to have an income. They have to generate an income flow not as great as that of normal market operations, but a significant income flow, so it seems to me that no project of the nature of a community hall is going to be financed by this. It has to be industry, either in the private or the public sector. It could be a Crown corporation, for example, which has a substantial income in order to service the debt, because this particular authority has to get the money back. It requires less money back because the tax is not charged, but it has to get a large amount of money back. So it seems to me that the capital projects, be they housing or otherwise, have to be largely projects which have an income as well as an outgo. Housing qualifies, obviously, because there are annual payments by the owner monthly, perhaps, but over a long period of time paying back this money.

So my concern is still over what private-sector type capital projects, which are job intensive, will be financed by this corporation. If this is related exclusively to housing, which is a private-sector type of activity, I have no problem at all supporting lower-cost money for housing. Incidentally, one of the selling points to me in this legislation is that this money is not only free from provincial income tax, but it also, by virtue of a provincial guarantee of the payment of principle and interest, probably reduces the interest rate. So there is a significant interest rate reduction. There is a significant lending of the credit of the province to whichever activities are identified by this authority as being eligible. My concern, and I hope I've expressed it clearly, is what other capital projects, generally of the nature of projects which have been carried out in the private sector in the past, are going to qualify for this provincial income-tax-free money — this income tax break. I'm sure that the minister and many other members know that certain industries get income tax breaks as compared to other industries. Manufacturing in this country generally pays a 40 percent rate, mining as high as 60 percent. Manufacturing is preferred over mining, at least in overall income tax terms. This legislation will give certain activities an income tax break relative to others. My question really focuses down onto which activities of the nature of capital projects, other than housing, are going to get an income tax break.

MR. RITCHIE: I can be fairly brief. During the debate on the throne speech I put forward the suggestion that our government look at a method of raising capital for such things as stimulating business, mortgages and agriculture development in our province. Knowing that there are tremendous investments out there by the private sector with the banks, we know the money is there. Mr. Chairman, we also know that the reason for loss of jobs is that businesses are closing down or are having difficulties keeping up to the cost of money. We also know that the reason why we lose jobs is that housing starts to falter. We know too that the major reason for this is the cost of money. The federal monetary policy has allowed the cost of money to rise to the point where businesses can no longer stand it. If it weren't for the NDP in Ottawa joining up with the Liberals, we wouldn't have had this horrendous problem on our hands today.

I am really delighted that it is the government of British Columbia that has at long last seen the opportunity here to take the matter in their own hands, to see that funds can be redirected into an area where we as a provincial government can have some say as to how they're going to be used for the benefit of the people of British Columbia. As far as business is concerned, not too many years ago whenever a business could borrow money at somewhere around 6, 7 or 8 percent, that business would be grossing maybe 18 to 20 percent. Today we find that the gross return of the business hasn't changed much, but the interest cost has reached a level higher than their gross. Therefore there is a built-in profit on that money before it reaches a place where it will create jobs. I'm really delighted that something has been done about it.

Mr. Chairman, I share the concern of the member who mentioned the question of other projects, and I would certainly hope that the committee does not allow this money to end up in some type of public works project, but earmarks it and directs it into those areas where we will really stimulate the economy by creating jobs that will be producing something. We know that this country has been suffering because of the vast amount of spending that has taken place throughout the country, and there has been no real return to the economy.

Speaking of the enticement to invest — and I hope to have an opportunity to speak to the committee on this at a later date — as mentioned by the member for North Peace River (Mr. Brummet), there are different levels of income tax. I would like to suggest to the minister that, as they consider the level

[ Page 8242 ]

of interest paid on these bonds, they consider the small investor as well as the large investor. The large investor, as we all know, is usually someone in a high tax bracket and therefore can afford to take a lower level of interest earnings, whereas the person in the lower tax bracket requires a little higher interest earnings in order to really obtain the benefit that we are attempting to put through. I'm suggesting that the minister, if it's at all possible, consider an interest policy that would relate to the amount of investment which, I think, might reflect the level of tax savings to the investor.

Mr. Chairman, I want to close my remarks by saying how refreshing indeed it is that we should see a government now taking the approach of raising funds from the private sector and hopefully getting it out into the private business sector and the mortgage sector, and not taking the old approach of simply increasing taxes and using a horrendous bureaucracy that eats up a large portion of the dollars in administration. I am very supportive of all sections of this bill, and I hope that it's only a start of a new wave of raising funds in British Columbia and, hopefully, Canada. While we do not have any assurance from the federal government yet as to whether they will support this or not, I am indeed proud that our government decided to go ahead on their own. I do think, however, that the federal government will see the great opportunities here and work with us on the program. Again, Mr. Chairman — to our Minister of Finance — I am very pleased indeed, and encouraged, and I'm sure that it's going to get the support of all the members of the opposition.

MR. LEGGATT: Mr. Chairman, one of the things that we forget when we propose this kind of legislation — and the legislation may have some modest impact on streaming capital....

HON. MR. CURTIS: Which section are you on?

MR. LEGGATT: I presume we're still on section 3, Mr. Minister. If you want to have some comment about relevancy, the purposes of the authority are to create employment by financing housing and other capital projects in British Columbia and any other programs, and also to raise money for those purposes by the issuing of housing and employment development bonds.

The first point I want to make is that when you provide an additional tax loophole — and that's what this is, another loophole to allow less revenue to flow to government — there's no question about the impact of this kind of legislation. It in fact results in a small section of the community not merely deferring their tax, but simply avoiding their tax and putting it into an admittedly socially useful purpose — these housing and development bonds. Mr. Chairman, I would like the minister to get up sometime and quit screaming about deficits all over the country, when his government continually proposes legislation which dries up revenues to government which they must have in order to meet the costs of government.

We have a tax structure that is rife with loopholes from one end to the other, because every pressure group has been successful in coming along and saying: "My particular group can't pay taxes. We'd rather defer them. We'd rather do something else." Perhaps the most persistent group was the group that persuaded the federal government to go into the MURB program. Now the MURB program, at this point, is a disaster. The present housing situation, for example in the lower mainland, has improved only with regard to high income earners who can afford to pay the rent. There is in effect a zero vacancy rate for affordable premises. The reason is that the MURB program came along and they brought in what they called "soft costs" to be deductible. The soft costs kept escalating. The money was going to planners, architects, engineers and landscapers, and the costs became inflated to an incredible degree.

MR. REE: And lawyers.

MR. LEGGATT: And lawyers. Thank you, Mr. Member, I agree with you completely. I didn't mean to leave the lawyers out; the lawyers have a high responsibility in the charges that were made into the MURB program.

The reason I'm raising this is that the kind of program that results from this streaming of capital — this tax loophole that the minister is endeavouring to create with the cooperation of the federal government.... The management is absolutely key as to what you do once you've received the capital into the authority. If the management is as loose as the MURB program, it's not going to solve the problem that the minister is trying to solve, which is to create additional housing, and presumably housing that is affordable to the great mass of people who need housing.

Each time you bring in a bill to stream capital, and the carrot to stream it is the avoidance of tax, there is a cost, and that cost is to the government. That cost means that government cannot receive those revenues to try to balance its books. So we see the incredible news today that the federal government is looking at a $16 billion deficit for this year.

HON. MR. CURTIS: Call it $20 billion.

MR. LEGGATT: Call it $20 billion, call it anything you want, but I'll tell you this: the minister is going back to Ottawa to make it $22 billion by getting them to agree to use this to avoid taxes. He can't avoid the logic of that argument; frankly, Mr. Chairman, the logic is unassailable. He is attempting to reduce revenues to government, stream them into tax-free bonds and use them for a socially desirable purpose. I'm not saying that's wrong, but I do think fiscal responsibility means that you look at the other side of the coin: government has to have revenue with which to survive.

The easy way to do that is to provide more tax loopholes to those at high income levels. It has been a tradition in our tax system all along. Whenever we have decided to do something about a social problem, the way to solve it has been to tinker with the tax system: to provide, for example, accelerated depreciation in the oil industry when we need to find oil. We don't look to the government sector to find oil; we always simply say: "Well, don't pay taxes, and you guys find oil." So it is really a redirection of capital.

Make no mistake: you don't get something for nothing. We are redirecting capital and reducing revenue flows and therefore the capacity of government to pay for the necessary services that government must provide. At the present time this government's option has been to squeeze the municipalities of revenues in order to balance its budget on the backs of municipalities. This proposal would reduce government revenues even further and admittedly stream them into an authority for investment into housing and employment development bonds.

[ Page 8243 ]

I think the minister might be a little more full — and I apologize to him if I didn't hear all the debate. Could the minister be a little more specific with us, if he can, on what projected rates are going to be with respect to the housing development bonds, a little more full about the kinds of employment programs he seeks to create with the bonds? We realize the housing sector is a very key sector.

But there is no free lunch. This bill will dry up government revenues and redirect them for another purpose. So I hope the minister won't try to have his cake and eat it too and constantly complain about government deficit-financing, about not having enough money to pay the services of government, about how the government, about how the municipalities can't get as much revenue-sharing as they used to because revenue flows are down. Well, I want to tell you, Mr. Chairman, one of the reasons revenue flows are down is these loopholes constantly created by governments, both provincial and federal.

MR. CHAIRMAN: Hon. members, it's become clear to the Chair that from both sides of the House we're entering into a style of debate which would be most appropriate in second reading, but is not really specific in committee. I'm sure all members are aware of that. The Chair has allowed some latitude, but if we could get back to section 3, and the purpose of the section, the committee would be well served.

MR. LEA: I'm going to support this legislation. I suppose it's like a drowning man grasping at anything to keep from going down. However, I think we'd be remiss if we didn't point out to the government and the minister that the policy the government has backed, at least since 1978, is one of the larger causes of why we need this emergency legislation to deal with the problem.

In 1978 the government put out a paper, over the signature of the Premier, on their industrial strategy, in which the government backed the Bank of Canada policy of moving towards what the government of Canada and the Bank of Canada called gradual monetarism. Both the United States and Canada went into this new gradual monetarism in 1974. If you look at the deficits that both federal governments have piled up since 1974, you'll see that those are the major deficits we face, and that monetarism is the instrument that brought about those huge deficits in the federal government, backed by this provincial government in 1978.

[Mr. Davidson in the chair.]

Obviously, we'd like to be collecting revenue from a thriving housing industry; we'd like to be collecting tax moneys so that we can provide services to people in the province. But we're not going to do that. As the member for Coquitlam says, what we're going to do is increase our deficit or cut the services to people. This is just a redirection of capital. It's one that I suppose we have to support in an emergency situation, but I think it's deplorable that the bill has to be here. Obviously we would like to have a thriving economy so that we could be taxing a thriving housing industry, providing even more services to the people of the province. But the government can't have it both ways.

I noticed today that the Minister of Finance talked about letting the dollar float; he's against exchange control.

HON. MR. CURTIS: That's got nothing to do with this section.

MR. LEA: It's got a lot to do with this section.

I can understand why the minister doesn't believe it has a lot of do with this section, because I honestly believe the minister isn't really very aware of how money works. He believes you can separate government fiscal policy from the general economy. This government has persistently done that; they believe the government budget is really a separate item from the general economy. They don't understand that you can use a government budget to stimulate the economy or to dampen the economy. In 1978 they backed high interest rates, as put forward by the Bank of Canada in 1974. Their backing of that policy, has led us to a housing crisis and the need for this bill in which we are going to provide tax loopholes to people. I'd much rather see profit going into housing than use a tax loophole to put money into housing.

First of all, I'd like to understand what economic policy this government follows. They've never explained that. Never has the Minister of Finance — neither did the one that preceded him — stood in this House or anywhere else and said, "We, the Social Credit government, believe in a certain economic policy." Never! As far as the public is concerned, this government has no economic policy; it's catch-as-catch-can all over the place. This is what we're seeing: a tax loophole bill instead of a healthy economy.

I think the member for North Vancouver–Seymour (Mr. Davis) has raised an interesting question: which industries are going to enjoy the tax loopholes? Because of the downturn in our economy, we in this House would probably all agree that at this point some industries should receive them; other industries probably shouldn't. But the minister has not come forward and said which industries are going to receive these tax loopholes, which industries are not, and what the rate is going to be. Probably the debate we're having isn't going to amount to much, because I don't think the federal government will go along with the legislation. The minister indicated, as I understand it, that there doesn't seem to be much hope of the federal government's going along; so we're probably wasting our time, the time of the House and everything else, because the bill will never be enacted; no program will come out of the legislation.

But the minister cannot get away from the fact that this bill will bring in less revenue to government. That's what it will do. If you want to maintain the same service to the people of the province, then you can't. You have to do one of two things: you either have to go out and borrow more money to provide the services or you have to cut the services. It has to be one or the other. I would feel a lot better if at some point the minister would stand up and state a certain economic policy that this government agrees with. At one time they said they believed in monetarism, they've now reversed themselves. They've said: "We don't agree with monetarism, but we'll replace it with nothing."

Interjection.

MR. LEA: Well, they're probably going back to A + B, because they've now denounced monetarism that they first of all said they were for. They have now said they are not in favour of monetarism any longer, but they've never said what they are for. I'd like the minister to tell us just once what they are for. What economic policy does this government put

[ Page 8244 ]

forward, except the old one of "balance the budget," which they've never done, and "set the proper climate"? Are tax loopholes the proper climate that this government is talking about? Is it going to be carrots for the rich and Kraft Dinner for the poor? Is that what this government is all about?

MR. RICHMOND: I'll take the Kraft Dinner.

MR. LEA: You'll take the Kraft Dinner over carrots. Well, I guess that's a preference. If you have a lot of money, of course you'll take the carrots.

MR. COCKE: When Graham talks about carrots, he talks about gold.

MR. LEA: That's right — green gold.

Although I think this government criticizes the federal government correctly, they have no alternative to put forward.

HON. MR. CURTIS: Incorrectly or correctly?

MR. LEA: You correctly criticized the federal government, but the federal government has done what you agreed with in 1978. Before you can criticize, you have to admit you were wrong in 1978, and put forward some sort of policy now. It isn't good enough for the minister to criticize the federal government for their economic policies unless he has something to put forward. This minister, or any minister of the Crown in British Columbia, has not yet put forward an alternative to the federal government's economic policy. It's easy to criticize, but what's your plan? What economic policy are you going to follow? Surely you must have something.

You're against high interest rates; you're against exchange controls; you're against wage controls; you're against price controls; you're against everything, but you don't seem to be for anything. That's why we see this piecemeal piece of legislation aimed at doing some little bit of good. I will say that I've talked with senior people from three different banks who believe that the money isn't going to flow into this program even if the federal government goes along. They aren't going to do it, because there is more money today in putting your money into speculative things than productive things. There is more return putting your money into what they call sinking areas — into art and gold and all of those things that might return a yield but don't produce a thing. That's where the return is on investments today. Real estate was one of them but it no longer is. We've been treating real estate as a trading commodity in the marketplace as opposed to housing for people. Governments, like the government the minister represents, treat housing as a commodity in the marketplace as opposed to homes for people. That's why we have the problem we have. As long as you treat that very important necessary item in our economy, shelter, as a commodity you are always going to run into this problem. You can't treat it as a commodity; you have to treat it as something other than a commodity that can be sold back and forth for speculative profit.

When the minister summarizes, we don't need a summary of why he thinks the federal government and their economic policy isn't working — a policy that this government said they agreed with in 1978. Tell us why you don't agree with it anymore and what policy you are going to put forward. It's because of that 1978 policy.

MR. MUSSALLEM: On a point of order, I have no objection to the eloquent speech of the member, but I believe that the purpose of debate in committee is strictly the issue that is in section 3. We're debating the principle of the bill, and the questions that he asks the minister are absolutely out of order and irrelevant. I trust the minister will never answer these questions, because that's not the purpose of this section.

MR. CHAIRMAN: Had the member risen earlier in debate today when we began on this course, we wouldn't be at this particular stage right now. Nonetheless, hon. members, we do have a commitment to abide by our standing orders. To put it mildly, the Chair has allowed wide latitude in debate, and I would hope that in concluding his remarks, that latitude allowed by the Chair will come to an end and we will specifically begin to address the points as we discuss the bill section by section.

MR. LEA: In concluding, I think that at some point the Minister of Finance has to come out and state the kind of economic policy that this government is for. It's not good enough to just criticize. They're always saying across the floor: "You people are very, very negative; you're always very quick to criticize anything we do, but where are your positive suggestions?" You know, the minister is surely guilty of what they accuse us of — criticizing the federal government for following a plan that this government officially approved in 1978. They approved a plan that has failed; now they criticize the plan and try to exonerate themselves from ever having backed it.

I think the time has come for this government to be smoked out. Surely they have some economic values that they're willing to share with the House and with the people of British Columbia. I'm saying that it's because of the lack of values in economics that we are being faced with giving the rich a tax loophole in a bill that we're sure might do some good. It will do very little good in the overall. It's much better to be taxing a healthy housing industry from the profits they make than subsidizing the rich with tax loopholes to try to create a minuscule amount of housing.

Section 3 approved.

On section 4.

MR. STUPICH: Section 4 provides that "the authority may lend," and it doesn't really say to whom. It could include, I would think, home purchasers, B.C. Rail or any other Crown corporation. Again, it's wide open and I just want to establish that that is exactly what is meant — that it's completely under the authority of the minister and the Lieutenant-Governor-in-Council.

HON. MR. CURTIS: With respect to section 4, obviously there has to be the permissive aspect of the section in order that it can happen. B.C. Rail — I don't think so at all. I think B.C. Rail would be a very unlikely recipient of funds which were generated by the Housing and Employment Development Financing Act which is before us in committee. There could be loans, obviously, to individuals. I indicated in second reading that that is one of the main reasons. There could be loans to local government in certain instances. I think it was the member for Esquimalt–Port Renfrew (Mr. Mitchell) who spoke about public works, and I indicated that

[ Page 8245 ]

it was not likely for public works as such, but it's possible in the case of new public works associated with housing or the development of community. To a very large extent, it will apply to the private sector as it undertakes a project that is highly intensive in generating employment and providing jobs. I don't see too much, Mr. Chairman, flowing between the government and the Crown corporations, other than in the context of a particular project which generates employment.

Section 4 approved.

On section 5.

MR. STUPICH: Section 5(l) permits the authority to borrow money. This seems to be separate from subsection (2), which talks about issuing bonds. I take it from subsection (1) that the authority can actually go out and borrow money anywhere it wants to get the program going, subject to the overall limitation in this bill, but that the authority can borrow money apart from issuing bonds.

HON. MR. CURTIS: The authority is required.... It's not likely after startup, but certainly at startup it would be necessary.

MR. STUPICH: Dealing with subsection (2), I wonder if the minister has any idea at all at this point in time just exactly what interest rate would be on these bonds. I'm going to recall just a little bit of the conversation. The member for North Peace River (Mr. Brummet) entered into the debate.

HON. MR. CURTIS: On another section.

MR. STUPICH: Yes, it was on another section, but he was talking about the effective interest rates. I think the hon. member for Coquitlam-Moody (Mr. Leggatt) dealt adequately with that. If the government is going to forgo tax revenue in one course, then it's going to lose total revenue, and I thought that very adequately dealt with it.

In talking about this, the Premier said that the bonds could be issued at roughly half the rate. I pointed out that that would apply only to people who are in a 50 percent income tax bracket and only after the first $1,000 of interest. So even people in the 50 percent bracket aren't going to be interested in investing here at half the rate. There has to be some extra incentive. They're doing that well now, so it would have to be higher than half. Anybody at less than the 50 percent marginal rate is not going to be interested unless it's substantially more. And when you get down to the great unwashed, most of the people in the community who are earning incomes that are much less than the 50 percent marginal rate are going to need something much more attractive than half the rate. I wonder if the minister has any idea at this point in time just what rate he will have to offer.

In commenting on what I said about the Premier's speech, the minister said that it was a tax credit. As I read subsection (2), it's not a tax credit; it's income free of income tax. The interest will not be taxable. That's what I'm saying. It's not a tax credit at all; it's just that it's not taxable income.

HON. MR. CURTIS: Mr. Chairman, we are examining a number of possible ways to approach this with the federal government. The point I made on an earlier section is correct: it could be any one of two or three routes of tax credit and tax forgiveness. That is part of the negotiation which commenced, in fact, in mid-winter and which continues. It depends, first of all, on whether Ottawa will agree to participate. If the answer is yes, then very well. If the answer is no, then of course we will have to make certain requests of Ottawa with respect to the provincial portion.

Interjection.

HON. MR. CURTIS: The member interjects. I can't hear the interjections, but I'm aware of them.

The member for Nanaimo (Mr. Stupich) asked if I have any idea of the interest rate reduction that would be likely in this legislation. No, I do not. I don't see how I could. Certainly we are looking for something which would be attractive, but in the volatility in which we find ourselves, I cannot give the committee that answer. That answer is simply not available to give. The members know that.

MR. STUPICH: Mr. Chairman, I can appreciate the answer. To me it says also that the program is not far enough in advance for it to be of any immediate relief when it comes to housing or employment. It's going to be some long time down the road. The government, through the opening speech or the budget speech, for three years now has talked about different schemes for using the Income Tax Act to encourage people to invest in different opportunities in the province of British Columbia, and none of these have come to fruition. We never did hear whether the provincial government dropped them, whether they just found that there was so little interest in Ottawa that they gave up, or whether they were turned down.

I wonder whether the minister can tell us anything further about the negotiations on this particular program as to when he thinks we might know whether he's going to be successful or to what degree he's going to be successful. Also, as I read subsection (3), it doesn't leave the door as wide open as the minister suggested, because it does say the interest paid "under the Income Tax Act (Canada) or the Income Tax Act, or either of them, wholly or partly excluded from the income...." So the income paid on the bonds is excluded from income for purposes of taxation. It doesn't allow for any of the other possibilities that the minister suggested, unless the legislation is going to be changed.

HON. MR. CURTIS: Mr. Chairman, depending on the answers from Ottawa, there might have to be a consequential amendment to that.

MR. STUPICH: Can you tell us when you might get the answers?

HON. MR. CURTIS: I've indicated that there might have to be an amendment in an omnibus bill.

MR. LEA: This session?

HON. MR. CURTIS: Mr. Chairman, I'm sorry, again, I cannot hear interjections.

With respect to the likely date of an answer from Ottawa, it is a matter that I have pursued on a regular basis. I telexed Mr. MacEachen once more last Friday and have not had the courtesy of an acknowledgement of the telex, let alone any definitive answer. In fact, I had intended to perhaps try to

[ Page 8246 ]

reach Mr. MacEachan today by telephone. I want an answer. If it's no, fair enough. If it's yes, then we can proceed with designing a number of actions which will flow from this bill. But, Mr. Chairman, I think it is shocking and typical that we should have been waiting this long for a Minister of Finance in Ottawa who is suffering from a degree of paralysis unparalleled in this country in many years.

MR. STUPICH: I have just one question, Mr. Chairman. Is the government determined to go it alone on this in the event that they do not reach an agreement with Ottawa?

HON. MR. CURTIS: I'll answer afterwards.

MR. DAVIS: Mr. Chairman, it's obvious if Ottawa were to participate in a scheme like this it would be more attractive, particularly from the point of view of those who would end up owning the housing — owners of individual houses who have to make the monthly payments on the mortgage. But assuming Ottawa does not participate, several points on the interest rate charged are very important. If you can get money and pay at 15 percent, when otherwise you'd have to pay 18 percent interest on your mortgage, that in itself is a significant reduction in the monthly or annual payments on the home. The eventual homeowner or renter will benefit, and benefit appreciably.

There's another aspect to this which I believe is significant. It was very important in the earlier federal National Housing Act legislation. As I read this bill, I see that the province can also — and, I expect, will also — guarantee the principal and interest paid on these bonds. If the province in fact does that — lends the credit of all of the people of British Columbia to these particular transactions — that in itself is worth one or two percentage points. It was worth one to two percentage points in the 1950s and 1960s when interest rates were much lower when the federal government guaranteed National Housing Act loans. That is precisely what the province is doing in this case. There are two layers to this benefit as far as the eventual homeowner is concerned — the eventual mortgagee. One is the provincial guarantee which reduces the effective interest rate which he or she will pay. Secondly, because those who lend the money get a provincial income tax break, there's another couple of percentage points. For two reasons the money will be cheaper, for two reasons the monthly payments will be less, and for two reasons housing will be more financeable, particularly when interest rates are high in this province.

MR. LEGGATT: Mr. Chairman, I direct the minister's attention to section 5(3). It says: "The power of the authority to issue bonds includes, subject to this act, the power to issue bonds (a) on which the interest paid is, under the Income Tax Act (Canada) or the Income Tax Act, or either of them, wholly or partly excluded from the income of the owner of the bond or deductible in whole or in part from the income tax otherwise payable...." The next word is "or," not "and." What I was concerned about was whether the minister has put no manoeuvring room in the bill. In other words, does the "or" mean that the bond must come under either (a) or (b) ? Sub-subsection (b) says: "in respect of which (i) any other tax exemption, reduction or adjustment, or (ii) any benefit or payment to the owner of the bond...."

The reason I raise this, Mr. Minister — and I do it quite seriously, and not in any critical way — is that if the minister is intending to use the bonds to be deductible from income.... Let's make an assumption that someone wants to buy a $15,000 bond. One of the benefits he may seek is to be able to reduce his income by that $15,000 and invest in the bond. That could be a benefit — as we do now, for example, in investing in film development and things like that, which are present tax loopholes. The minister doesn't have the option of making it both. According to this section, it looks as though the minister will have to have either the interest that's received tax-free, or the initial investment tax-free without the interest being received tax-free. The key word is "or" between sub-subsection (a) and sub-subsection (b). Perhaps the minister would check that out with his officials. I was a little concerned that the use of the word "or" limits your capacity to issue a bond which, for example, may have both benefits in it — both the deducibility provision of the initial purchase, and the interest-free provision on receiving the money on the bond. I was questioning the word "or" between the two sub- subsections.

HON. MR. CURTIS: Mr. Chairman, I don't know if the member was in the House when I answered the question posed by the member for Nanaimo (Mr. Stupich) earlier. There may have to be some consequential amendments. I dealt with that. The member nods his head. I assume he was not in the committee when I answered earlier.

The member of North Vancouver–Seymour (Mr. Davis) has quite correctly observed the advantages.

The member for Nanaimo asked earlier on: is the province of British Columbia prepared to go it alone in the event that Ottawa says no? The answer is very definitely yes. But we have observed that....

MR. LEGGATT: You can't do it.

HON. MR. CURTIS: I'll let the members participate, Mr. Chairman, as they wish.

MR. LEGGATT: I just have a clarification on the minister's last remarks. Assuming the federal government doesn't wish to participate in the scheme, would the minister not still have to have the federal government's agreement to allow the province to go unilaterally on the scheme in view of the fact that the income tax collection agency is the federal government? Therefore the minister still cannot do it alone without the consent of the federal government. Am I not correct in that assumption?

HON. MR. CURTIS: Yes, the member is correct. The question as posed was: is the province prepared — I paraphrase the member for Nanaimo — to forgo its share of tax in order that this program could proceed? We're still going to need federal approval, because we are under a federal-provincial taxation collection agreement. The member is quite right, but my answer was directed to the forgoing of tax. Provincially, the answer to the member for Nanaimo is yes.

MR. LEGGATT: Arising from that, is the minister prepared to unilaterally levy provincial tax if the federal government refuses to participate and to consent to allow the provincial government to go it alone? In other words, the only option the minister would then have would be the option of levying a separate provincial tax with a separate provincial

[ Page 8247 ]

form and the whole scheme. I don't know whether the minister has got that on his mind. I think he's probably assuming that he'll get permission. If the federal government doesn't wish to participate fully, it would be unlikely that they would deny the province the right to proceed. But if they deny that, the only option the minister is going to have — am I not right? — is that he would have to levy a separate provincial income tax and withdraw from the federal-provincial agreement on income tax.

HON. MR. CURTIS: Considerable time would be required for the province to withdraw from the agreement in force, as the member would know.

Sections 5 to 9 inclusive approved.

On section 10.

MR. STUPICH: As I read this, it limits the aggregate of borrowing to $250 million. In the event that the authority went out and borrowed, say, $150 million to start with, then it would be limited to issuing $100 million in bonds, forever.

HON. MR. CURTIS: Yes. However, the member will know that in answer to a question in an earlier section, I spoke about the start-up. It might be a very short-term borrowing of, for example, $100 million to commence, and then the issuance of bonds, with a rollover.

MR. STUPICH: Is that the way it reads?

HON. MR. CURTIS: Yes, the section says: "The aggregate of the sums that may be borrowed by the Authority under this act shall not exceed $250 million."

MR. STUPICH: Mr. Chairman, I should perhaps let the lawyers handle this, but as I read that, the total borrowing, because it doesn't provide for any paybacks of some initial borrowings and then reborrowing.... As I read this section, I'm not sure if that's what's meant. As I read it, it means that the total amount that may be borrowed is S250 million, and if some paying back is done, that doesn't increase the total that may be borrowed.

HON. MR. CURTIS: The heading above the digits of the section is "Borrowing Limitation." That is, I'm sure, comparable to that which we would find in other limitations which are amended from time to time in this House.

Sections 10 to 12 inclusive approved.

On section 13.

MR. STUPICH: This announces the termination of the bond-selling program. It doesn't mean that the Authority would go out of business. It might go on borrowing from other sources and continuing to operate. Is that what is intended?

HON. MR. CURTIS: It is intended that no new bonds would be issued after March 31, 1984. We wanted to indicate the relative time limit of this particular program, although that could be the subject of debate at some other time in thisHouse, with respect to extending the time. But that's the way in which it would seem....

Sections 13 to 16 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Davidson in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee rises and reports Bill 39, Housing and Employment Development Financing Act, complete without amendment.

DEPUTY SPEAKER: When shall the bill be read a third time?

HON. MR. CURTIS: Now, Mr. Speaker.

[Mr. Speaker in the chair.]

Bill 39, Housing and Employment Development Financing Act, reported complete without amendment, read a third time and passed unanimously on a division.

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

HON. MR. GARDOM: Second reading of Bill 54, Mr. Speaker.

LAND AMENDMENT ACT, 1982

HON. MR. CHABOT: Mr. Speaker, this amendment act to the Land Act contains a variety of housekeeping amendments that are administrative in nature and that I believe could be best debated in committee stage. Under those circumstances I move second reading.

MR. HANSON: Mr. Speaker, because of the fact that this bill was introduced only two days ago — and we are aware of the propensities of this particular minister — and the fact that he was not at all exhaustive in his explanation of the principles of the bill. we move adjournment of this debate until the next sitting of the House.

Motion approved.

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

ESTIMATES: MINISTRY OF HUMAN RESOURCES

(continued)

On vote 49: minister's office, $262,008.

HON. MRS. McCARTHY: Yesterday when we began our estimates, there were a couple of things I wanted to state

[ Page 8248 ]

for the record, because they should be said about our Ministry of Human Resources.

I was speaking about the family support system within our ministry. I had referred to the day-care increases of 27 percent, the increase in the allowable income level, and the significant grant funds allocated towards the development of new spaces. I don't know whether I mentioned this, but I'd like the House to know that just in these past few months since the increase of grant funds, we have created 1,200 new additional spaces.

I want to refer to the Helpline for Children. As far as services to children are concerned, I feel that a significant step forward has been taken against child abuse in this province. As you know, we were the first province in Canada to have a Helpline for Children. It has been copied by the province of Alberta and has been looked at by many jurisdictions in North America. It is the Zenith line, where children and adults can phone in when there is suspected child abuse. Because it's unique and because it was an experiment, I just want to pay tribute to the emergency services organization which looks after that Helpline. It is working; it has worked. I'm very pleased about the success of that Helpline.

I want to also mention that, as far as our ministry's commitment to women is concerned, just recently, within the last ten days, changes to the Family Relations Act have been enacted through my colleague the Attorney-General (Hon. Mr. Williams). That amendment is significant. It will change the enforcement of maintenance orders in this province. You know what that means to many women who have been deserted or, by virtue of difficulties in their marriage, have left their husbands, or their husbands have left them with their responsibilities. Unfortunately many of them have been forced onto income assistance because of the way the system has worked in the past; it was a burden that should not have been carried by them.

I just want to say that if this Legislature does nothing else this year except pass that amendment.... As I say, in recent days it has been passed and accepted by His Honour. It is one of the most significant changes in legislation. The program will allow as to set up in the next few years a special maintenance unit which will give tremendous assistance and help, on a priority basis, to new applicants for income assistance; and we will gain more experience with the new program. The second priority will be those people already in the system who have been living for many years on an income less than what was promised by the spouse; the court order hasn't worked. Hopefully we will be able to bring that whole system into a more fair situation. The third phase will be to give help on an income-tested basis to those who are not already on income assistance, but who indeed may have to be forced onto income assistance. Therefore it's important that we go into the third phase.

I just want to say that the changes, I believe, will be great. Again, if we do nothing else in this House, in this Legislature — and much is being done; we're accomplishing a great deal of work; I'm quite pleased to see how much work has been accomplished in these few weeks — it is a most remarkable step forward for the deserted spouses of our province. It will take out the indignities, reduce the indignities; it will reduce the hassle, and it will be a great step.

Could I just also say to our Minister of Labour (Hon. Mr. Heinrich) that I am pleased to see the appointment of Isabel Kelly, a new deputy of women's programs in our province. Our minister deserves our respect for his foresight. It is the first such deputy minister of women's programs position, and I look forward to working with her on problems and programs which are presented to our ministry from time to time. I know that Mrs. Kelly will responsibly and sensitively represent the women's point of view, and that's going to be a very challenging job indeed.

I know that you will join with me now in welcoming to the floor of the House my deputy minister, John Noble. As you know, as deputy minister, Mr. Noble has the responsibility for the administration of our ministry, and he is ably assisted by members of the executive group. We're very proud of that. I've had the opportunity to meet with them on many an occasion where they're discussing our total programs, and it's a delight to meet with them as we go through the different things which our ministry is faced with. We have very many things, a variety of programs, those which I mentioned yesterday and those which I have added today.

I also want to introduce Martin Cook, our comptroller, who is on the floor of the House to assist the members with any details that may be needed in that regard.

Again I would like to just point out to all of those who are going to be taking part in this very important debate on a very important portfolio in this government, one that has been give financial backing by our Ministry of Finance and by our total government, that the year of achievement just past is significant. We hope that in the months and the years to come our responsibilities to the elderly, the handicapped, and the families in need will be enhanced in an even greater way. This care and this attention and responsibility is a measure of our effectiveness as a society, and how we are perceived by other provinces — indeed, by other nations. Whether we are focusing on our acclaimed Helpline for Children, our increased awareness of the needs of the handicapped, or our wide range of programs for seniors, we are looked on with respect by our counterparts in other provinces, in other states, and in other parts of the world. In paying tribute to my deputy minister, whom I believe has just done a remarkable job in this ministry over some years, I want to also pay tribute to the staff which he oversees, our executive staff, and all of those in the Ministry of Human Resources who sensitively and caringly look after those things which come before our ministry.

I know that the member for Burnaby-Edmonds (Ms. Brown) was interrupted in her response yesterday afternoon, so I will be pleased to take more questions from that member and then answer them all at the same time.

MS. BROWN: I have had a chance to go over some of the programs outlined by the minister yesterday, and I wondered if she would make some notes, because I have a couple of questions dealing specifically with them.

The SAFER program, in which there has been an increase.... I want to say that I'm pleased about the increase, but I want to ask specifically why the minister did not respond to the resolutions passed by the Council of Senior Citizens organizations at their convention in fall of 1981 when they asked for two specific things. They asked first of all that the SAFER formula be scrapped and that instead it be reconstructed so that the rent which a senior citizen had to pay would be 25 percent of income, exactly the way in which it is if that person has the good fortune to live in B.C. housing.

I want to tell you what this actually means. It means that a senior citizen, for example, who has — for the sake of easiness — an income of $100 a month and lives in B.C. housing pays $25 a month in rent. No matter what the rent

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may be, that is precisely how much that person would pay from his or her income. Under the SAFER program, if the rent for that particular accommodation was $40, SAFER would kick in to pay 75 percent of anything above $30, which means that that same person would end up paying $32.50 in rent. What the seniors are saying is that if they have to pay 25 percent of their income in rent, it makes it easier for them to afford accommodation. What they would like SAFER to do is to kick in at the 25 percent of total income, rather than the present formula of 75 percent above 30 percent.

The reason I support what they're saying is that under the present formula what we see is that fewer and fewer people every year become eligible for SAFER. So though it's wonderful that the benefits are being increased, there are still fewer and fewer people who are eligible for those benefits. This is evidenced by the fact that in 1978-79 the ministry had to allocate something in the neighbourhood of $12.2 million to cover the SAFER program, whereas in their 1982-83 budget they've allocated $9 million, and that we saw a decrease last year of people who were eligible for SAFER from something like 13,500 down to 11,350. So it's not just the dollars and cents that need to be adjusted, it's the percentage in terms of the eligibility. That's the resolution that was passed at the council, and which is the one I had hoped the minister would implement.

The second resolution dealing with SAFER, which was passed by the council, has to do with SAFER for spouses under the age of 65. They pointed out that SAFER is terminated for the under-65 spouse of a former recipient six months after that recipient dies. They point out that this creates a financial burden on the surviving spouse. The resolution said: "Be it resolved that the SAFER program be continued until the surviving spouse, if 60 or over, reaches the age of 65 or remarries." In other words, they're not asking, if the spouse is in his or her thirties or forties, that SAFER should apply then. They're very clear that it should apply only to the surviving spouse who is 60 or over. The 60 to 65-year-old should remain eligible for SAFER until that person becomes 65 and is eligible, or at least until that person remarries.

That is my comment on SAFER, except to say that although I welcome the increase, it still doesn’t really meet the housing ceiling for the lower mainland, where we're dealing with an average rent — which we got from the statistics of the Ministry of Lands, Parks and Housing — of $391. The average in Victoria is $334, so there's still a bit of a gap, but that wouldn't be as important if the formula ware scrapped and the 25 percent of income — which is what the seniors asked for — were implemented instead.

I have a number of questions that I really would like to ask the minister about the mentally retarded. How many mentally retarded persons are receiving income assistance on their GAIN under the handicapped program? How many mentally retarded people living in boarding homes are receiving the comforts allowance? I'm asking these questions separately, but what I'm really trying to find out is the total number of mentally retarded people in the province who are getting some kind of assistance from government, either through the comforts allowance and boarding homes or receiving GAIN. I want to add that figure to the 1,500 who I understand are still in institutions, and hopefully come up with the figure that I am looking for.

I have some concerns about the increase which the minister mentioned in the CHANCE program, because certainly experience with the program in various parts of the province indicates that the school boards negotiated salaries for their aides at such a level that the increase the minister told us about yesterday is really just going to cover the increase in salaries for the aides working under the program. However, in order to prove me wrong, the minister could tell me how many children actually used that CHANCE program in 1981-82, how many aides were hired under that program in 1981-82 and how many new aides are going to be hired as a result of the increase that she told us about yesterday.

My final question is: why on earth doesn't the government let the Ministry of Education run the CHANCE program? What is the real reason that Human Resources hangs on to that program? Certainly all of the teachers that I've spoken to indicate that they would be happier if Education were responsible for the program: they felt that they would be better able to serve the children who need it. For the benefit of people who are not aware, the CHANCE program deals with disabled children who are being served in the school system who need a one-to-one aide working with them to make it possible for them to be in the system.

The residential program figure of $900,000 appears to be a decrease. I hope the minister will correct me if I'm wrong, because according to my calculation, if one uses the lowest possible rate — the proprietary home rate — what we're really talking about is serving something in the neighbourhood of 60 mentally retarded people, which really isn't a drop in the bucket. I won't know how much of a drop in the bucket it is until I get an answer to the first two questions I raised.

I gather that half of this residential amount of money is supposed to go to moving people out of institutions into the community. If my figures are correct, what we are talking about is moving 30 people into the community out of institutions over the next year. I think that's pretty much a snail's pace. However, as I said, I need the figures from the minister.

[Mr. Davidson in the chair.]

In a more general way, I want to know who is planning, organizing and coordinating the program for de-institutionalizing the mentally retarded. How is that being done? What is the timetable? How many people do you plan to move into the community this year? How many next year? What sort of program is in place for the staff presently in institutions who are going to have to be retrained to work with these people when they move into the community? When did the inter-ministerial committee that advises the minister on the needs of the mentally retarded last meet?

I also have a couple of questions about why there's such a discrepancy between the services being given to adults and to children. for example, the therapy resources, physio- and speech therapy, which are available to children in Nanaimo, are not available to children in Duncan, presumably because one has a health program component and the other one doesn't. I would like to suggest to the minister that Human Resources should take full responsibility for the mentally retarded. The battle going on — that Health should take responsibility for the mentally retarded with a lot of health problems and Human Resources should take responsibility for the mentally retarded with only a few health problems — doesn't really make any sense, because people fall between the cracks when it happens that way. I think the Ministry of Human Resources should take full responsibility for the mentally retarded. When the mentally retarded need health

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care, then let Health take care of them while they're ill; but in the final analysis, the people responsible for them should be the Ministry of Human Resources. I just want to know whether the minister agrees with me on that; and if not I'm curious to know why not.

How many people received life-skills training last year, and what was the average number of hours? The increase which the minister talks about, if one breaks it down into a ten-hour week.... We're not looking at that many people. There are something like 250 people if we're looking over a three-month period, and there are 125 people if we're looking over a six-month period at ten hours each. I want to know how many people received that, and how many people, for example, received it on an average of 10 hours.

HON. MRS. McCARTHY: Are you speaking of the retarded only?

MS. BROWN: Yes, the life-skills. I am also curious about the achievement centres, and I want to know if the ministry has made any decision about pay differentials in terms of those mentally disabled people in workshops who are there for training purposes and those who are there working. Has the minister made any decisions about that?

Finally, in terms of the special-needs day care, how much of that budget has been put aside to integrate mentally disabled children into regular day care, rather than separating them in the special-needs day care which the minister talked about? I'm not saying that all of the mentally disabled children can be integrated into regular day care, but some of them can. I want to know what percentage of the budget has been put aside for that.

Mr. Chairman, those are just the questions from yesterday. Today I want to talk specifically about services to children in the province. I'll explain what I'm going to do so that you won't rule me out of order. I'm trying to look at the overall delivery of services to children and to point out to the Ministry of Human Resources that by not having a full-time superintendent of child welfare whose sole responsibility is the care of the children in care, as well as other children in the province, there are all kinds of kids around the province who are not getting the services they need. In order to make my point, Mr. Chairman, it's going to be necessary for me to talk about ways in which the Ministry of Health has failed the children, the ways in which the Attorney-General's ministry has failed children, and the ways in which Education and Labour have failed children.

All of these children in the final analysis end up at one time or another, through the courts or whatever, being sentenced to the care of the superintendent of child welfare. But what we have in this province is an acting part-time superintendent of child welfare.

Just a little bit of history before I get started. In the beginning there was a superintendent of child welfare whose sole responsibility was the welfare of children. The last time there was a full-time superintendent of child welfare and that person was relieved of his responsibilities, the deputy minister was designated to be the acting superintendent of child welfare. Correct me if I'm wrong, but I think that was in 1977 or 1979. I'm not sure of the date, but it's been a long time — 1977, okay. Since that time the deputy minister, who has the responsibility for the whole Ministry of Human Resources, has been given the additional responsibility of acting as superintendent of child welfare. It doesn't make any difference how capable, skilled, or able that deputy minister is; it is not possible for a part-time acting person to do the necessary job of monitoring, protecting, nurturing, and caring for the children in care in this province. This is why, if the ministry does absolutely nothing else this year, this one thing it must do: it must have a full-time superintendent of child welfare.

Mr. Chairman, the health of children, for example, is being jeopardized as a result of some of the decisions being made by the Ministry of Health. I am sure that you know as well as everyone else the kinds of mental-health or psychiatric services that young adolescents need from time to time.

The Premier has now entered the room and started talking at the top of his lungs, Mr. Chairman, interrupting. I hope he'll keep his voice down, because the Minister of Human Resources is trying to listen to me.

I'm pointing out to the Minister of Human Resources that the psychiatric services that adolescents and young children used to have in this province are now in jeopardy as a result of decisions being made by the Minister of Health (Hon. Mr. Nielsen); the decision, for example, to close the sixth floor of the Eric Martin Pavilion. A number of parents, nurses, psychologists and other professionals in the field have indicated that the service which used to be delivered by the sixth floor of the Eric Martin Pavilion cannot be delivered by anyone else, because there is no other resource in the entire province — certainly not on Vancouver Island — quite like the Eric Martin. Most of the kids who somehow, either before they end up in juvenile detention or after, get into the Eric Martin are children who are wards of the superintendent of child welfare; they are children who are the responsibility of the Ministry of Human Resources. A full-time superintendent of child welfare would have immediately identified the threat to these children posed by the closing of the Eric Martin Pavilion, and would have put the kind of pressure on the Minister of Human Resources that she would then have brought to bear on the Minister of Health (Hon. Mr. Nielsen), to say: "It is not possible. Fiscal restraint or no fiscal restraint, the psychiatric needs of these children have to be attended to." That's just one of the examples I'm giving you of why we must have a full-time person responsible for the care of the children.

The other is the kind of cutbacks at Sunny Hill Hospital. Sunny Hill Hospital deals with the severely disabled child — physically disabled as well as mentally disabled. I don't know if you've ever visited Sunny Hill Hospital. I worked there for a number of years when I was at Simon Fraser. I was responsible for the volunteer program — students who used to go into Sunny Hill to work as volunteers. The children in Sunny Hill Hospital are the most vulnerable members of our society. We're talking about severely disabled children. A number of those children are so severely disabled that their families have abandoned them and they became wards of the superintendent of child welfare. As a result of the Minister of Health cutting back on the services at Sunny Hill Hospital, these children are not getting the kind of care and the level of service that they should have — that they must have — in terms of developing some sense of independence. That is being severely retarded. A full-time superintendent of child welfare, again, could have brought that to the attention of the minister immediately.

I don't think that the superintendent of child welfare necessarily works only with the Minister of Human Resources. I see that person as really being the boss of the

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Interministerial Children's Committee, dealing with all the ministers who sit on that committee and immediately bringing to their attention the impact of any decision that they want to make on the children of the province. In other words, the superintendent of child welfare, through the interministerial committee, could either have spoken to his own minister, the Minister of Human Resources, or to the Minister of Health himself and said: "Fiscal restraint or no fiscal restraint, these are services which cannot be cut."

The same thing with Variety's Treatment Centre for Children in Surrey. Again, most of the kids in there are wards of the superintendent of child welfare. The decision to lay off the one clinical psychologist in Prince George and the kind of horrendous statistics that come out of the Tonkin report every year, every time that report is tabled, indicate to us over and over again that the children of the province are at risk. There is no one person monitoring what's happening to them, coordinating the services which they must have and ensuring that none of them fall through the cracks.

The disabled children. In January of 1980 the Ministries of Health, Education and Human Resources announced to all and sundry that there was going to be an interministerial study of the needs of the disabled children and the services that were going to be available to them — and this was to cover children between the ages of zero and 19. John Talbot was made the coordinator, the survey was completed and, in fact, was presented in March 1981. Specifically, Mr. Chairman, the interministerial study on services to the severely disabled laid out a timetable for the implementation of its recommendations. But first of all, even though the committee has had that report since March 1981, nobody else has seen it yet; it still has not been made public. I don't know why the ministry is so reluctant to release it. I made an offer last year to release it on their behalf, and I repeat that offer. If there is some problem with releasing the report through the ministry, I would be very happy to release my copy of the report to them. However, there was a timetable outlined, and target dates, but so far in phase one every single target date has been missed. No implementation has taken place as targeted in these recommendations. But the minister, in her introductory remarks, talked about her commitment to the disabled children, about the International Year of Disabled Persons, and about the amount of money which this province spent. There is no question that the $3 million earmarked by this province for that year was more than that earmarked by any other province. To me that is an indictment of the way in which we, as a nation, view and treat the disabled in our midst. However, I'm asking once again whether there has been a revised timetable for the implementation of these plans, and whether in fact that report is ever going to be released. I'm particularly interested in knowing what is going to happen to the infant development program, because the recommendation was that that program should be transferred to Health, and I want to know whether in fact that is going to be the case.

Very briefly, I'll touch on some of the areas in which the children in care are in jeopardy as a result of some of the decisions made by the Ministry of the Attorney-General. One of the statistics which was released last year, I believe — I'll have to get that report and give you the exact date — was that most of the adolescents who show up in the Attorney-General's (Hon. Mr. Williams') jurisdiction, either through the courts, the containment centres or the detention homes.... Children who come from Human Resources have a history of mental disability; they are mentally retarded children. That is the reason it is so crucial that the Minister of Human Resources and the Attorney-General work closer together, and that a full-time superintendent of child welfare monitor the decisions being made by the Ministry of the Attorney-General to see how they affect the children. When I visited the family court in Victoria last week, I was told that a number of the children, who may not be in care when they appear before the courts, actually end up being sentenced to the Ministry of Human Resources. The judges decide that they should be in care, and they end up being the responsibility of the ministry.

[Mr. Strachan in the chair.]

The Attorney-General's ministry issued a memo that had to do with curtailing legal services to juveniles under the Juvenile Delinquents Act. I would have anticipated that the Minister of Human Resources would have fought tooth and nail against that. Using the Criminal Code definition of 12 as the age above which children are so mature that they don't need legal counsel when they show up in court, whether as victims of sexual abuse or whatever.... I would have thought the Minister of Human Resources would have fought against that. Instead, the minister issued a manual amendment letter to all legal services in family matters. "The family law and social services section has advised all lawyers who have been retained to represent the superintendent of family and child services, and wards of the superintendent facing charges under the Juvenile Delinquents Act, of certain reductions in legal services. The attached policy statement outlines these reductions." Then she goes on to say that she wants them to maintain close monitoring to study the impact or the effect of these reductions on the ministry's service. The ministry accepted, in other words, the Attorney-General's decision not to give legal counsel to any child over the age of 12 who had to appear in family court under the Family and Child Service Act or as a result of the Juvenile Delinquents Act, which specifically includes children who are the victims of sexual abuse.

I just want to point out to you that I have met with a number of the family advocates and some of the people in the family courts, and they have told me that it is usually children over the age of 12 who begin to talk about the fact that they are sexually abused and who begin then to show up in court to deal with the fact they have been sexually abused. Consider what it must mean to a 12-year-old to stand in court alone and talk about the fact that she has been sexually abused by her father, and her father is in the same court and has legal counsel. She has no legal counsel, no advocate, nobody to advise her, work with her or state her case. She is on her own, but her father has access to legal counsel. I had hoped that the Minister of Human Resources would have fought that decision on the part of the Attorney-General's ministry. Instead, a memo is issued saying: "These reductions have taken place. Please monitor them so that we can find out what effect the reductions are having on the delivery of services."

HON. MRS. McCARTHY: Let me try to take these questions in some sort of order here. I'll start with the last point, which was addressed to the Ministry of the Attorney-General more than it is to the Ministry of Human Resources. I did have a discussion with the Ministry of the Attorney-General vis-à-vis the cases that will be coming before the

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courts and which our people will be needing assistance with. Up to and including this week, since the new program of accountability in that legal services branch has been put in, I can assure you that the assistance that we need from the Ministry of the Attorney-General has been there. He assures me that it will continue to be there, and I do not doubt that.

Any time that I have ever needed assistance from the Attorney-General (Hon. Mr. Williams) for anything to do with child welfare, families or child abuse, the Attorney-General has been there. He has been totally sympathetic and has been totally supportive.

HON. MR. GARDOM: As well as the past Attorney-General.

HON. MRS. McCARTHY: The past Attorney-General has been very reliable, and I'm very happy that I've had that kind of cooperation.

It's the kind of cooperation that addresses itself to the very subject that the member for Burnaby-Edmonds wished to discuss regarding the superintendent of child welfare. The superintendent of child welfare is a very important position in this province, as it is in all provinces. It can only be an effective position if there is total cooperation from all disciplines throughout the government. It is already an appointed position and a full-time position. The member doesn't have to call for a full-time child superintendent, because we have one. We have an integrated system with regional managers, district supervisors....

MS. BROWN: Who is it?

HON. MRS. McCARTHY: I'm surprised that the member on the other side asks who it is. That's interesting.

The Ministry of Human Resources has an appointed child superintendent in the person of my deputy minister.

MS. BROWN: He's acting superintendent.

HON. MRS. McCARTHY: He is not acting superintendent. Let me correct the member, who is trying to insert her opinion into this debate. I tried hard to listen to her, and maybe she will show me the same respect. He is not acting; he has been appointed.

The child superintendent, along with all of our ministry, has put an emphasis on families and children in this province. That emphasis is carried on in all of our work. The emphasis is carried on in terms of integrating through all of the ministries. It is an integrated system within our ministry. Regional managers, district supervisors, social workers and family support workers can be designated to act on behalf of the child superintendent in the province of British Columbia. Of course, the superintendent, on a day-to-day basis, is not going to do the work at the field level. There isn't one person we could put in charge who would be able to do that. The emphasis we have placed with the staff who are carrying out the delegated authority is very much in place for all of our programs, whether it be the income assistance program, services for the retarded, family and children's services, or whatever.

You mentioned the integration of services. Let me just emphasize that there are, as I'm sure you are aware, joint executive meetings not only with our own ministry staff but also with the Ministry of the Attorney-General, the Ministry of Health and the Ministry of Education. They go on constantly in other ministries — on a weekly basis in our own ministry, and sometimes bi-weekly — with the cooperation of all disciplines.

You mentioned the study on handicapped children. The report you referred to was not a complete report. I believe we went through this before. The report will be produced soon and will be given to all members in the House. It will not take very much longer. The report you referred to is not the final report and not all of the report.

You mentioned a query about the infant development program. We've doubled the expenditure for the infant development program. It has been doing a tremendous job. The demands for it are great and its success is tremendous. I'm delighted we've been able to double it this year. I think the infant development question is well answered by the commitment of dollars to it.

You asked who was doing the planning and the programming for the de-institutionalizing of the mentally retarded and how long it would take. Last year we made a commitment to a program that would take a decade. If you want to know where we're at, we're one year into that program and there are nine years left. An executive director, Robert Cronin of our ministry, is in charge of the program; he's on the executive team. He brings together and works with a team approach.

You're going to hear "team approach" a lot in answer to all these questions. I want to tell you that I really believe in that approach. I truly believe that some of the problems that come before the Ministry of Human Resources are not at all isolated just to mental retardation or to senior citizens or to problems of lack of education; rather, they are all interministerial. That's why the team approach is so important.

You asked about the time frame. Committees on every aspect of mental retardation are already in place. Mr. Cronin is the head of that team. We are meeting all the time with the associations, and they've been most helpful. There has been a tremendous amount of cooperation and coordination among the societies who, as you know, serve and represent the retarded of our province throughout the province, and I believe that's working exceptionally well. I'm quite pleased with how that's coming along.

You asked for some specifics regarding life skills for the retarded. I thought that when you said "life skills," you were probably encompassing the whole ministry attachment to rehabilitation, which we have. If you look at just the retarded, you might note that there's a 37 percent increase embodied in this vote this year in the skills-training part of the retarded program. We have a 37 percent increase in the special-needs day-care budget as well, which is quite significant.

You wanted to know about residences for retarded adults. The budget in 1982-83 has increased 25 percent. The member makes a good point when she asks: if you have more money, are you necessarily going to serve more people? I think the increases that I have shown are very significant. Attendant to that — and maybe this is a good time to bring it out — is the very point that this administration has been trying to make ever since February 18. If there are more demands on wages within the public sector, there will be fewer people served and there will be fewer people hired. We've been trying to put that point across — that if everybody could keep their demands down.... But the member who asked the question about the services to the retarded is the very member who said that she didn't think 14 percent or

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15 percent was enough in terms of wage settlements. As I understand it, you made that statement as a public statement. We're trying very hard to keep far below the 12 percent figure.

Here we're talking about services within a community that are serving the retarded. It's just a fact of life: you can increase it 100 percent, but if the costs of that program increase and increase, there's going to be a decrease in the number of people you can serve. That is only common sense.

You asked some questions vis-à-vis the numbers. I don't have that information at my fingertips, but we will be pleased to get it. That information is available, but it will take some time. If, prior to estimates, you could let me know that those are the specifies you wish to make a particular point about, I would be very pleased to get those figures for you.

You asked about achievement centres. We do not pay the clients of achievement centres. We assist with funding of the program, but we do not pay individuals within the centres. But in the funding for the achievement centres, there is a 14.5 percent increase this year.

You asked about integrated day care, and that has been the whole thrust of the ministry. You mentioned that at times some youngsters could not be integrated, but I think those instances are very few and far between. Having visited integrated day-care centres in our province, I find they have done an excellent job. The children themselves respond. The children are tremendous at integrating, and do so.

May I quickly go through some of the other things you mentioned, such as SAFER. There are two reasons why we try to increase SAFER, as we did in the last couple of days. One is to help cushion people against rent increases. However, you have to understand that the seniors who are getting the increase in SAFER are also getting increases from other sources. I don't think, in your calculation, you're taking that into account. We have responded to that same conference where a few things were set out by the senior citizens, and I believe I'll have that in more detail for you.

I do want to mention — and it was written up in recent publications — that at a meeting in the Okanagan about two weeks ago the delegates to the B.C. senior citizens' association maintained that they have never had it so good, and they say that they have very little to complain about. "Right now most of us get going and enjoy living." That's the Times-Colonist report on that conference. Also, someone from the Kamloops area has written in the Kamloops paper: "Having arrived here fairly recently from a very rich province, I am amazed and delighted by the manner in which our government here in British Columbia respects and assists its senior citizens. It is be highly commended for such a worthy and humanitarian cause." So I think that the SAFER program has been quite well received.

You asked how many mentally retarded there are under GAIN for the handicapped, and also how many there are in boarding homes and in institutions. I'm going to have to wait until tomorrow to give you those figures, but I can give you the figures on the CHANCE program. As of June 1981 there were 995 children involved in our CHANCE program. That means that as of June 1981 there were about 294 aides from the Ministry of Human Resources. I also would like to refer to your statement that you think the total program should be under the Ministry of Human Resources. It is a joint program between the Ministry of Human Resources and the Ministry of Education, but I want to tell you that I don't think that if it had been left to the profession — and I don't say "to the minister" because the minister who was prior to this one, with whom it was first negotiated, was extremely high on this program.... Our problem has not been with the Ministry of Human Resources getting this program going; it has truly been with the teaching profession itself. There has been a reluctance to accept this program, but I'm glad to tell you that that reluctance has been overcome. It was new, it was something strange to them and not entirely accepted. If the Ministry of Human Resources had not been involved, I don't think it could have got off the ground totally as an educational program. I see nothing wrong with separating the two, having us put the aides in and having the teachers have their input in terms of education. In fact, I think perhaps it's the best of both worlds. I truly do think it is, because our aides are able to give that kind of personal service and caring — that's not to say that teachers don't, but they have a different motivation: they're there to educate, and there is, I suggest, a different philosophyvis-à-vis the handicapped. So I just feel that what we have there is a very, precious and very good thing, and I don't think we should try to fool around with how we allocate it — as long as the funding is there. As you know, it's very successful and gives tremendous service to youngsters who didn't have that service before. We should all be really proud of that program — what the teachers are doing and what the aides are doing. I think it's a tremendously exciting program.

I'd like to refer you to our annual report regarding services to the mentally handicapped. Pages 86-91 will probably give you the figures you need. If there are any more figures that you need in that regard, please refer to that.

May I just go back to the CHANCE program once more. Last year we had 294 aides. We have increased the aides this year to 332. So we have more aides in place this year than we did last.

I think I've covered just about everything so far, but I'm just going to respond.... You said that we fail children — I'm going back to your last discussion regarding the child superintendent. I can tell you that there isn't any case that comes to light in this province that our superintendent of child welfare does not have knowledge of. I have yet to have a question in this province by name — in any place I've been in this province — that I haven't phoned about and said: "Look, I'm concerned about a question I was asked about so and so, Mr. Noble. Can you please give me an answer?" He doesn't have to look up a file, he knows the details of that case intimately and is able to respond. Now that's the kind of detailed knowledge that this superintendent of children has in this province. I don't know if that happens in other provinces, but I'm rather pleased that it happens in this province, because it shows the commitment of the child superintendent in this province, and the commitment of those people who are delegated the authority throughout the province, and who respond to it very well.

I believe I've covered everything.

MS. BROWN: I want to pursue the comment about the full-time superintendent of child welfare. I'm really depressed to realize that the deputy minister is not acting, but has in fact been designated the superintendent of child welfare.

The Berger report, the fifth report of the Royal Commission on Family and Children's Law, very clearly stated that in British Columbia the superintendent of child welfare had the position of guardian of the child. He is the director of all protection services provided by a child-care worker, and is a

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sort of ombudsperson for children in the province. He must act in the best interests of the child when parents are not caring, and he also supervises child-care staff. The report goes on and on.

History has proven that this is a full-time job. We can go back to Ruby McKay, or even before her, to Don Bingham, to Vic Belknap, right up to 1977, when the deputy minister was designated as superintendent of child welfare. It's not a titular kind of job, not just a title, but a full-time job. It's not possible for one person to do a good job as deputy minister, and a good job as superintendent of child welfare as well. It's not possible to do a good job as minister and a good job as superintendent of child welfare as well. It's not possible to do a good job as a director, an assistant deputy minister, associate deputy minister, regional manager — any of these other kinds of things — and do a good job as superintendent of child welfare as well.

I thought I had pointed out very clearly to the minister the kinds of areas in which children have been failed by this province. I think all of us have to take responsibility for that, not just the Minister of Human Resources, because we do not have one person in this province whose sole responsibility is the welfare of children in care, whose sole responsibility is to be the ombudsman for the children of the province and to act in the best interests of those children when their parents are not caring for them.

I don't know what it is. I don't believe it's a philosophical difference. I don't know whether this is the way in which the ministry hopes to save money, because you have to pay a superintendent and you have to pay a deputy minister too. I don't know what the reason is, but whatever the reasoning behind it, it is wrong. It's not the minister, the government or the opposition that suffers; it's the children of the province who suffer because of this decision on the part of the government not to have a full-time superintendent of child welfare.

It doesn't matter what group you speak to, Mr. Chairman — whether it's SPARC, the United Way, the Association of Social Workers, social workers individually or collectively, probation workers, family counsellors, psychologists, whoever you talk to — they tell you that children are falling between the cracks. They're not getting the quality of services they need, because there is no one single person who can be held responsible when the services are not delivered and when the government fails in this task.

If I don't do anything else during the discussion of this minister's estimates, I hope the one thing that I get through to her is that the Ministries of Health, the Attorney-General, Education and Labour are failing the children of the province, and now Human Resources is failing, because it's made an economic decision not to have a full-time superintendent of child welfare. We have a quarter-time Minister of Human Resources and a part-time superintendent of child welfare, and that is just not good enough for the children of this province.

MR. LEVI: Which one of you wants to go outside? Just because it's ten to six, and I don't want to get into a great in-depth analysis of the minister's party.... I want to bring the comptroller, the honourable Martin Cook, who is sitting way back there....

I would like the minister to observe this book that I have in my hand here, which says: "Estimates: Province of British Columbia." It looks more like a bingo chart. I've sent the minister the page that relates to her ministry. There are actually two pages, but I want to deal with one page. This page identifies.... It actually doesn't identify anything. You have got to go back and forth in this book until you are practically cross-eyed. I don't know what happened to the old style, Mr. Chairman, but we're into the new style. If the Minister of Finance (Hon. Mr. Curtis) had issued us all with an Apple computer on our desk, I think we could get the information a lot quicker.

I want to draw the minister's attention to one item. I'm not going to discuss the program, but I'd like you tell me....

These pages aren't numbered, but you'll notice the numbers 60, 65, 75, 80, 90 and 99 at the top of the page. I think everybody has located the page. If you go down and look at the program that is referred to as "Opportunities to Independence," it has the number 50.3.1.

Where's the deputy? Oh, he's over there. That's good. I'm glad everybody is looking, because I'm having trouble figuring this out. Under 60....

HON. MR. HEWITT: What happened to 50.3.1?

MR. LEVI: Wait a minute. That's the way it's written here. You're trying to be logical, and it's no good trying to be logical with this Minister of Finance. The Minister of Human Resources is having an even worse time.

Under 60 it says $29,083. If you find the code book inside, you know that that refers to rentals. Then you go to number 75, which is $38,788. That's for machinery and equipment. Then you go to number 80, which is grants. I'd like the minister to tell me what "grants" means.

What's interesting about this page 1s that the total amount of money on the page — if you follow the line across at 50.3.1 — does not amount to $34 million. It's $6 million short. The comptroller is indicating to me that you have got to flip back. So you flip back and you get another line of information. This has got to be a fascinating journey into obscurity by the time you're finished. We're still on the program.... They're not numbered. My gosh, if they were numbered, I could make more sense out of them.

We get to the next page and have another item, "Opportunities to Independence," and there it tells us that they spend $36,946,000. You go along and come to number 10: $139,000 for travel. Then you get to an item, $5,590,000, which is professional and special services. Then, very quickly: $5,000 in data-processing; $5,196 in furniture....

Interjections,

MR. LEVI: I know the Chairman isn't interested in it, but I'm sure the Clerk is interested.

Then we get to number 50, which is materials and supplies: $74,000. There was time in this House when you could pick up the estimate book for Human Resources and look at it, and from one page you could figure it out. It's been a very constructive lesson, I know, for several members.... I know that the member for Central Fraser Valley (Mr. Ritchie) is absolutely fascinated, because for the first time he's actually understood what this book is all about. It took me the better part of two weeks to figure this out. I was too embarrassed to ask anybody.

The one question we've got to get an answer for from the minister is: what is $28 million in grants? What does that mean? Who gets the grants? The minister made mention that

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there were 5,000 people trained, at a cost of $7,000 per person, for these special opportunities to give them entry into some kind of opportunity. The key question is: if we spend $34 million training people, how many people are working? Is anybody working? Who gets the grants? Where are these grants going?

The other question I have for the minister — she may not be able to answer tonight, so we can get it in the morning — is about this book she issued called Creating Individual Opportunity the British Columbia Way. As I understand it, there is a company in the United States that formulated this program.

MR. RITCHIE: On a point of order. I'm having difficulty hearing this interesting speech because of the talking that's taking place on the other side.

MR. CHAIRMAN: The committee is reminded that we cannot interrupt the hon. member who has taken his place in debate.

MR. LEVI: Well, Mr. Chairman, we have a wee problem here. It's a Scotsman there, and he hears only in Scotch.

Finally we recognize that $34 million was spent on this program. The minister gets up and starts telling us about the program and how many people were actually placed. But where does the money go? Does the money go to the United States? How much do they get for this program? The minister smiles. We've started to look at all sorts of things about money in your government. It's just amazing where it goes. So we have to ask you: how much of this money goes to the great innovators of this program? We can't find it out in here. We can't get at your vouchers until next year. How much money goes to the United States for this program? It is a program from the United States. I think you should take your time to think about it, and you can deal with it in the morning. You don't want to deal with it tonight. Let's leave it till the morning.

The House resumed; Mr. Davidson in the chair.

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

Hon. Mr. Rogers moved adjournment of the House.

Motion approved.

The House adjourned at 5:59 p.m.

Appendix

WRITTEN ANSWERS TO QUESTIONS

68 Mr. Skelly asked the Hon. the Minister of Environment the following questions:

For the calendar year 1981 —

1. How many pollution control permits were issued and how many amendments to pollution control permits were issued?
2. What was the average cost to taxpayers of a pollution control permit or amendment?
3. What amount of revenue was generated by the Province through the issuance of pollution control permits?

The Hon. C. S. Rogers replied as follows:

"1. Permits issued in 1981, 246; and amendments issued in 1981, 196.

"2. Separate costs for issuing permits are not recorded by the Waste Management Branch. Application processing is one part of overall branch activity.

"3. None."