[ Page 665 ]

CONTENTS

Routine Proceedings

Oral Questions

Highgrading by Macmillan Bloedel. Mr. Lea –– 665

McKim advertising. Mr. Cocke –– 666

Property Tax Reform Act (No 1), 1983 (Bill 7). Second reading

Mr. Blencoe –– 667

MONDAY, AUGUST 8, 1983

The House met at 2:06 p.m.

Prayers.

Oral Questions

HIGHGRADING BY MACMILLAN BLOEDEL

MR. LEA: I have a question for the Minister of Forests. Recently the Forest Service on the Queen Charlotte Islands caught MacMillan Bloedel highgrading on Louise Island. In other words, against the directives of the Forest Service, MacMillan Bloedel was leaving timber that's valuable on the forest floor. It's my understanding that MacMillan Bloedel has been told by the Forest Service that from now on they must live up to the terms of the directive in the contract. I'd like to ask the minister whether he has decided to order MacMillan Bloedel to go back into the area that they've already logged in contravention of the directive from the Forest Service and clean it up.

HON. MR. WATERLAND: Mr. Speaker, no, the minister has not decided to do that. MacMillan Bloedel is treated exactly the same as anyone else is on the Queen Charlotte Islands, or anywhere else in the province. I think it's common knowledge that during this recession — which we hopefully are beginning to recover from now — utilization standards in the forests have been relaxed somewhat for most licensees, when it is appropriate to do so, in order to help them weather the economic downturn.

Recently one cutting permit of MacMillan Bloedel's was suspended on the Queen Charlotte Islands because our waste assessment indicated that they had not even attained the more relaxed utilization standards. Discussions with MacMillan Bloedel regarding that suspension and the standards to which they have operated other cutting permits are ongoing.

One of two things can happen, Mr. Member. Either they can be waste-billed for material left behind which under relaxed utilization standards they should have recovered, or they can be told to go back into the forest and remove that material. I have not yet determined which will be the case.

MR. LEA: I'm glad to hear that one or the other will happen, although obviously it would be preferable to go back and save the timber than just get the money through stumpage.

The part that really concerns me is that when this was brought to the attention of MacMillan Bloedel, their spokesman on the Queen Charlotte Islands, Jim Connor, said: "So what." He was quoted as saying that it's going on along the entire coast, that all logging companies are doing the same thing, and that their operations are even more relaxed than the new relaxed rule. In other words, they're underutilizing even more than the relaxed rules allow. MacMillan Bloedel's spokesman has said that it is happening along the entire coast. I would like to ask the minister whether the government has decided to take a look at the whole coastal operation to see whether or not MacMillan Bloedel's is an isolated case, whether or not MacMillan Bloedel is correct that everybody's doing it.

HON. MR. WATERLAND: I'm very pleased to hear that the member for Prince Rupert now puts such great credence in everything that everybody employed by M & B says. Normally when M & B says something, the members opposite consider it to be false.

However, my advice to the member is that we carry out constant waste assessment throughout all cutting permits. Standard practice within the ministry is to have a minimum of 12 test spots to assess waste per logging opening. We have found no attempts to date — that I'm aware of, at least — to exceed those relaxed standards. If I come across information — which I will, if it is happening — I'll be very happy to advise the member. But those types of waste assessments are an ongoing thing throughout all harvested areas in the province.

[2:15]

MR. LEA: First, there were not 12 plots done on Louise Island; there were only five, and they were caught within the five test plots.

It isn't a case of whether I believe MacMillan Bloedel or whether I don't believe MacMillan Bloedel. MacMillan Bloedel, through one of their supervisory staff — in other words, the person in charge of their operation on the Queen Charlotte Islands; whether or not I believe him isn't important — stated as a matter of fact that MacMillan Bloedel is not the only one exceeding the requirements of the Forest Service. MacMillan Bloedel says that the entire coast is being done that way. Does that not raise in the minister's mind enough concern that he will take extra precautions to make sure that it's not being done along the entire coast, or is he going to relax it so much that we're going to leave all of those jobs plus added wealth lying on the forest floor? Does that not concern the minister enough that he go out and do something a little extraordinary to make sure that we're not blowing this very valuable resource of the province of British Columbia, or is he satisfied to let it go on?

MR. SPEAKER: Order, please. Hon. member, with the greatest respect, I must at this time instruct the member that the last remarks hardly constituted order for question period. At another place they would have been great for debate, but we have rules for question period and I think the member realizes that he went beyond them.

HON. MR. WATERLAND: First of all, it is not a fact that all licensees on the coast are exceeding the standards. That's a statement made by one employed by MacMillan Bloedel, according to the member from Prince Rupert. I will say again — the member seems to be somewhat hard of hearing — that it's standard practice to have a minimum of 12 waste assessment plots in each cutting open. In the one particular one where M & B were suspended on the cutting permit, an additional five assessment plots were involved. Then the licence was suspended. It is a matter of common practice that each opening in each and every cutting permit has waste assessments done when logging is completed.

MR. LEA: To the same minister: I didn't say that it was a fact that it is going on; I said it's a fact that the MacMillan Bloedel spokesman said it's going on. That causes great concern for this side of the House.

Another question to the minister: would he say that the forest company would rather have an order to go in and clean

[ Page 666 ]

it up, or would they rather have an order to pay the stumpage without having to go and clean it up? Which would be the most beneficial for MacMillan Bloedel or another forest company to do?

HON. MR. WATERLAND: The member's asking me to give an opinion of what somebody else might think, and I'm afraid that I'm not going to do that.

MR. LEA: First of all, I wasn't asking for MacMillan Bloedel's opinion; I was asking for the minister's opinion of which would be the most economic for MacMillan Bloedel but not necessarily the best resource management practice, because we'd leave the wood to rot or be burned the one way.

My final question to the minister. Timber is being left in the bush because we don't have the proper processing plants on the coast. The technology is not there to utilize some of this wood in a softening pulp market and a hardening lumber market. Could the minister tell us what he has done recently to ensure that the forest industry spends the proper amount of capital to make sure the correct processing procedures are in place so that there is no further need, economically or otherwise, for the forest companies to leave the smaller timber in the bush? What has the government done recently to make sure that capital investment is taking place?

HON. MR. WATERLAND: Perhaps when the member reads his Blues he'll understand just what questions he's asking. He seems to get somewhat carried away in his preambles and he himself forgets what question he's asking. In his previous final question, the member said: "In the minister's opinion, would MacMillan Bloedel rather have this or that happen?" How am I to know what they would rather have happen, and what difference would my opinion make? Whatever is proper will be done.

Over the past eight years the forest industry throughout British Columbia, once we were relieved from that disastrous government that was in British Columbia during the early 1970s, has had massive capital commitments to modernize, particularly on the coast. Literally billions of dollars have been spent. A lot of those capital programs were suspended during the very serious recession, which we are hopefully emerging from at this time. Once the industry can recover from some of the capital losses that it suffered over the last few years — which, as a matter of fact, would have been much greater had this ministry and this government not done things which helped them through the recession — plans are still underway for massive organizations. In fact, a number are going on right now. I don't think the government has to do anything more than encourage the private sector and make them realize there is going to be a government in British Columbia for many years that will support free enterprise.

MR. LEA: Out of the minister's answer, is the minister telling us that he's perfectly satisfied to see MacMillan Bloedel's profits expand at the expense of leaving that forest product on the floor? That's basically what he's saying, and he's using economic times for bad resource management. That's the minister's stand on this, as far as I can see.

HON. MR. WATERLAND: I didn't detect a question on that last mini-speech of the member. However, I would hope that the member is sufficiently wise to understand that what is economic wood in the forests of British Columbia changes as economics throughout the world and our marketplaces change. What can be economically extracted today is far different than what could be economically extracted two years ago, or perhaps two years from now, because the end value price is what drives the utilization in the province. Yes, our utilization is much, much better now than it has been in the past. Over the average period of time, considering the economic cycles we go through, it will continue to improve in years to come, as long as we have a government that encourages investment in this province.

McKIM ADVERTISING

MR. COCKE: Mr. Speaker, I would like to address a question to the Attorney-General. McKim Advertising received $5 million in unauthorized payments during 1981-82. The auditor-general has found that some of those payments resulted from third-party accounts laundered through McKim. Has the Attorney-General discovered how much of those funds found their way into supporting the Social Credit election campaign?

HON. MR. SMITH: Mr. Speaker, when a matter of this importance is being investigated by the auditor-general, who has not made a final report to this House, and when the matter is also being reviewed by the criminal justice branch of this ministry, to take political shots like that when the course of justice is yet to unfold is inappropriate.

MR. COCKE: Mr. Speaker, we are outraged over here. This is day 20 of this proposition. The Attorney-General has done absolutely nothing to see that the police are brought in.

Let me ask the Attorney-General the following question: is he aware that the auditor-general's investigation does not extend beyond March 31, 1982? Incidentally, that final report from the auditor-general is in. What investigation has taken place in respect of 1982-83, the period leading up to the provincial election?

HON. MR. SMITH: I take the question as notice.

MR. COCKE: Mr. Speaker, that's exactly what we've been saying; that's why the police should have been brought in.

Another question. In view of the fact that McKim Advertising became the agent of record for the entire government in May 1982, has the Attorney-General determined that even more public funds flowed through McKim's accounts during the 12-month period up to the election?

HON. MR. SMITH: The answer to all those questions and preambles is no, Mr. Speaker. But the answer to all the gentleman's questions is that when the final report is in and I have a report from my officials, if further action is warranted from either of those reports, it will go forward quickly without favour or fear of any person.

MR. COCKE: Mr. Speaker, 20 days ago we were told that McKim Advertising would not be suspended during the investigation. Twenty days later, they are still agent of record of the government. Has the Attorney-General failed, or neglected, to satisfactorily investigate this matter because of McKim's role in the Social Credit election campaign?

[ Page 667 ]

HON. MR. SMITH: It's tempting, Mr. Speaker, just to respond with "yes" and "no" to questions which aren't questions but are political statements. The gentlemen opposite who ask questions on this subject do so under the guise of seeing justice be done, but the very nature of the questions they ask precludes people from having justice done and precludes key people in organizations in this province from being properly and fairly investigated and those reports being made public and then being subjected to the criminal justice system where they would get a fair hearing. They do not want that to happen, Mr. Speaker. They want political solutions in this chamber.

Interjections.

MR. SPEAKER: Order, please! The bell terminates question period.

[Interruption. ]

MR. SPEAKER: Order, please, Staff will remove the offending person from the gallery.

The member for Nelson-Creston rises on a point of order.

MR. NICOLSON: Mr. Speaker, I didn't wish to interrupt during question period, but during question period the Minister of Forests (Hon. Mr. Waterland), in response to the member for Prince Rupert (Mr. Lea), said that members opposite usually assume that anything MacMillan Bloedel people say is false. Mr. Speaker, I believe the minister has imputed improper motive to myself, as one of those members opposite, as well as to others on this side of the House. I could go on and say who I feel do say things that are false, but I'm not going to do that because this is a point of order. I'm very serious about it, Mr. Speaker, and I'd like the minister to withdraw the offending statement.

MR. SPEAKER: An hon. member has requested of another hon. member that if there were any imputations, they be withdrawn. I must ask the minister if there was any imputation; if so it must be withdrawn.

HON. MR. WATERLAND: There certainly were no imputations. However, if the member wishes, I'll withdraw. Perhaps they believe everything that MacMillan Bloedel says, which they're accusing me of doing.

MR. SPEAKER: Thank you, hon. member, the matter is cleared.

Orders of the Day

HON. MR. GARDOM: Leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: I call adjourned debate on second reading of Bill 7.

PROPERTY TAX REFORM ACT (NO.1), 1983

MR. BLENCOE: At the last opportunity I had to debate this bill last week, I was trying to point out to the government, and particularly to the minister responsible, that there are some major flaws and problems with the municipal real estate tax system, Those problems and flaws have been well documented over the years. Studies have been brought forth and many commissions have tabled their reports. Basically, all of them say that the system in place for generating revenues for municipal purposes is antiquated, unfair and not based upon the ability to pay. One of the major problems in today's society, we all know, is the problem of taxation and the problems that governments face in trying to acquire enough revenue to maintain their operations. There's no question that municipal operations and civic government today probably face the worst scenarios they have faced in many a year. They have seen their revenues dwindle to the point where they don't know where they're going to find the resources to maintain essential services, and at the same time — as I indicated last week — this government, in its wisdom, has decided to remove itself from one of its major responsibilities of senior government; that is, to maintain and ensure that municipal government is healthy and reasonably wealthy in terms of revenue- sharing, ensuring that underground service grants are maintained properly, and that the health and safety of British Columbian citizens are protected and supported at the municipal level,

[2:30]

[Mr. Strachan in the chair.]

I tried to indicate to this government that if they are trying to give the impression that the variable mill rate and the ability of municipal governments to shift the tax load on to various categories of property categories.... If it is their intention that that will be the panacea for municipalities in terms of coming to terms with their revenue and resource problems, they are wrong. It is not a panacea. The impression given by the minister is that it's going to create marvellous opportunities for municipalities to resolve their financial problems. That's not true at all. All this government is doing is tinkering with a system that should be totally revamped and subjected to a major overhaul. The priority in any overhaul should be trying to ensure that revenues generated for municipal purposes are based on the general premise — I think we've all accepted it today — that taxation should be based on one's ability to pay.

I gave examples last week of a person on fixed income being subjected to the same real estate tax system that those who are currently employed and earning money are faced with. That is patently ludicrous –– I, for one, along with many of my colleagues at the municipal level last year, saw senior citizens in a home paying taxes based on what was happening in the speculation in the real estate market. What was happening, particularly to senior citizens, was that they were facing tax increases based on what some real estate person might be able to acquire for that property in a highly inflated real estate market. Many of those senior citizens saw their taxes escalate, many beyond their ability to pay, and many had to sell their homes; they had to move out.

HON. MR. BRUMMET: That's not true, and you know it.

[ Page 668 ]

MR. BLENCOE: Oh, that's right! Many senior citizens are in a position — or were in a position — of not being able to maintain their homes. The ultimate goal of this government should be to deal with a tax system that no longer ensures that British Columbians, if they wish to hang onto their homes and pay the services that maintain those homes.... There should be a system of taxation at the municipal level that allows them to maintain their homes and pay according to their ability to pay, not one based on a real estate system that many commissions and studies have said is archaic, ridiculous and needs to be overhauled.

I would re-emphasize that this government, if it really wants to come to terms with the real estate system and the tax system of the municipal government, and if it wants to deal with the inadequacies in municipal revenue-generating procedures, should take a long, hard look at the overall tax system. It's been waiting for a long time — over 100 years to have a proper look taken at it.

In my discussions last week I referred to a commission report, one of the best that's been done in this country over the last few years. That commission was done by the Ontario government, the Ontario Committee on Taxation. I use this one because it's recognized as one of the best documents on tax systems in this country. Although it was done in 1967, it's still used as a major source of information and is a credible report on what should happen with taxation at the municipal level. I would like this afternoon to go into some depth on what this report had to say at that time, because I think it has implications for today. In its wisdom, this government will perhaps take another look at what it's doing in terms of tinkering with the tax system, and introduce meaningful long-term changes.

The report gives a good introduction on constitutional democracy and taxation. I would like to read some of the passages from that commission's report. I'll quote from the introduction on constitutional democracy, and give my thoughts on it:

" The reconciliation of governmental power with individual rights is a problem as old as human society itself. Centuries of evolution, and sometimes revolution, have yielded in much of the western world a mode of governmental organization that is indelibly stamped by the quest for such a reconciliation. This mode of government is commonly called constitutional democracy. Constitutional democracy can assume different forms in different countries, but its most classic types are the parliamentary forms as practised in the United Kingdom and Canada, and the presidential-congressional, of which the United States is the major progenitor and leading example."

Mr. Speaker, this may seem boring, and many of my colleagues across the way may think, why is he going into this? I want to set the tone for the background for progressive taxation systems: that indeed taxation systems are part of constitutional democracies, and we have a responsibility to ensure that they do fit into that democratic process.

"Whatever particular forms developed to suit their peculiar circumstances, all constitutional democracies share two basic elements. The first, the 'democratic' element, attempts to ensure government that is at once responsive and responsible."

"Responsive and responsible:" two key words in dealing with this kind of legislation. In my estimation, and the estimation of our party, this bill does not go far enough in terms of being responsive to the problems of taxation at the local level; you have only scratched the surface. And if you are indeed serious about trying to improve the inadequacies and injustices of the taxation system in place for municipalities, you will go much further and be far more responsive in your analysis and your legislation.

"Constitutional democracies respond by providing for periodic competitive elections on the basis of something approaching universal adult suffrage and for constant ready access to governing representatives on the part of the governed, whether as individuals or as groups.

"The second, the 'constitutional' element, consists of built-in practices designed to restrain abuses of government power."

This is an important clause, Mr. Speaker. It's what is happening in this province and in this Legislature in terms of what we feel has been an abuse of the democratic system.

"The rule of law, the independence of the judiciary and legislative oversight of the executive are the best-known of these restraining devices. At this point we think it appropriate to develop two philosophical positions to which we wholeheartedly subscribe. The first concerns democracy, the second constitutionalism."

Mr. Speaker, I'm quite serious in reading and talking about democracy and constitutionalism in terms of the bill we're debating today. It may seem far-fetched that we would talk about democratic principles and constitutionalism when talking about things as mundane as a variable mill rate and new tax systems for municipal government, but they are important.

Let's remember that one of the very reasons that democratic principles and governments were established was the fact that people often felt they were being taxed unfairly and that they were being asked to donate their hard-earned dollars to institutions and governments that did not appear to be responsive to their needs. We only have to take a look at the history of the United Kingdom. Indeed, the great civil war in the United Kingdom and the challenge to the authoritarian and the divine right of kings was over the very thing of who should make decisions about who should collect the money and what that money should be used for. Taxation systems and financial arrangements are definitely interwoven in the very democratic process and the constitutional kind of democracy that we have in Canada.

"It's a long-held axiom that government exists for the promotion of something that is variously called the 'common good'...." That well-used phrase is often over-used and is perhaps a trite and hackneyed phrase; however, I think it is appropriate. Governments do indeed still have responsibilities to talk about common good. In any financial arrangements or taxation system we must talk about the common good. It's a long-held axiom that governments do talk about the common good, the public interest and the general welfare. These are three important axioms in anything that government purports to do on behalf of the people they represent. Those axioms should be used when you are talking about taxation systems for municipal governments.

Mr. Speaker, in my estimation this bill does not go far enough in terms of talking about the common good, the public interest or the general welfare. If they did the Minister of Municipal Affairs (Hon. Mr. Ritchie) or the Premier himself would announce to the people of British Columbia that

[ Page 669 ]

they are going to totally revamp the municipal tax system and introduce a system that's based upon the ability to pay, not on what some person in the real estate industry might get for their home. "Democratic governments seek out the 'common good' through a variety of processes, the best-known of which are majority vote, the reconciliation of competing group claims and the quest for consensus through deliberation." I would like to expand on the last one: the quest for consensus through deliberation.

There is a very well-known organization existing in the province of British Columbia that tries to deal with municipal problems in an intelligent and rational way. They're always open to discussion, new ideas and meeting with the government. I refer to the Union of British Columbia Municipalities. It's my belief, and our party's belief, that the quest for consensus through deliberation should have come over this bill. Not only should it have come over the intent in the wording we have before us today, but it also should have come over the regulations that will be introduced to accompany this bill. It's my understanding that the UBCM indeed would like the opportunity — before this bill goes through its final readings and becomes law — to discuss those regulations and the various limits that are going to be put on property categories. They have had very little input on this particular legislation. It was discussed some months before the election: it would come into force; it would be retroactive. All municipal governments had to scramble to introduce the right tax notices and the right systems to try to accommodate the government in its retroactivity. The UBCM and those hundreds of municipalities that they represent have not had the opportunity to look at the regulations or discuss those regulations with the new minister. They would really like the opportunity to do that.

[2:45]

As Municipal Affairs critic — and as I get more and more into this role and into what happens in this chamber — I am finding that this government, for whatever reason, seems to be out of tune with that kind of consensus-through-deliberation process that is so important in democratic societies and in constitutional democracies, and seems to be turning away from that kind of process.

They are introducing legislation.... Bill 9 is very similar to it, but I won't get into that, Mr. Speaker, because I know you'll say that's not what we're debating today. It reflects the current process and the current attitude. You dump the legislation on the table, without discussion or input from those affected, and you proceed as quickly as possible to introduce that legislation. When you think about what municipal governments have to do these days and how difficult it is to maintain their operation in these difficult financial times, that kind of process — I direct my comments especially to the new Minister of Municipal Affairs — cannot help municipalities to participate with this government in terms of trying to resolve the recession in this province. It can't do it.

The UBCM has been in existence for many years. The process of discussion and conciliation and consensus through deliberation has been a worthwhile process. It has worked extremely well. There are members across the way who have been responsible for Municipal Affairs. I think the minister should perhaps discuss with those members how that consensus-through-deliberation process can work very effectively. This variable mill rate legislation, like Bill 9, has come forward in a vacuum. What happens is that municipalities and the UBCM have to react — overreact at times, I'm afraid — in trying to get that point across.

Mr. Speaker, I think we all know that the best way to solve problems is to discuss them quietly, not in an atmosphere of confrontation; certainly not in an atmosphere where I and the minister have to go back and forth in this chamber over an act that really affects far more people than we think it does, in terms of those municipalities and the people they represent. That bill, like Bill 9 and Bill 7 and Bill 12, which I presume we will get onto later, really should have come forward after thoughtful and intelligent discussions that try to achieve consensus through deliberation. The UBCM exists for that.

Since we're not going to finish debating this bill today, I would hope the minister will indeed take the opportunity, as I understand he has done with Bill 9, to meet with the representatives of the UBCM and other municipalities that feel affected by this legislation and try to discuss what the regulations will be and how they will affect all municipalities before they pass this legislation and before that opportunity for deliberation has gone.

I would like to go on and quote from this learned journal. The authors state: "We believe that the 'common good' evokes something more than majority rule." That's an interesting quote. The common good is beyond what's perceived to have happened on May 5. The current government did, indeed, get re-elected and it forms the government. But although they have the majority and although they can subject British Columbians to majority rule, there is something slightly higher than such heavy-handed rule. Again I refer to the common good. Perhaps the minister will take that into consideration. "We believe that the 'common good' evokes something more than majority rule, the outcome of group conflict or the politics of consensus."

If there was ever a time in the history of British Columbia, or in the history of our country, that we needed to try to reintroduce the politics of consensus, it is certainly now. In the last few weeks we have seen thousands and thousands of our citizens in British Columbia indicate their deep concern over the direction of this government. When I'm talking about Bill 7 I'm obviously, therefore, lumping all 26 or 27 pieces of legislation in a particular package, because they do indicate the current direction of this government.

I appeal to those members across there. I think there are many of them who are prepared to listen to the majority of British Columbians. There is a message coming through from the people of British Columbia — a message from people of all political stripes — that this government may indeed have gone too far with its current package, and I include Bill 7 in that package. I know all governments, when there is an outcry, tend to say: "Well, it's only representative of a handful of people — all these vested interest groups." Or: "It's the union movement." Or: "It's the church groups." And certain members of this government have been attacking those church groups rather ruthlessly and unfairly. There is indeed a coalition out there in British Columbia, but I don't think it's just special interests. It is a meaningful groundswell of discontent, of apprehension and, I think, of some fear. I would really urge this government — and I'm still talking to Bill 7, because I'm talking about the politics of consensus and because I think the politics of consensus should be in effect on Bill 7....

You know, we're right in the middle of summer and it's getting somewhat hot. We've been here quite a while and, I

[ Page 670 ]

presume, we'll be here a little longer. There is the opportunity for this government, if it's serious about wishing to listen to all British Columbians, to take some time over its various pieces of legislation, particularly — for today — Bill 7, and to try to reintroduce that great principle of constitutional democracy: consensus through deliberation. I'm quite serious about that. I know the government is worried, Mr. Speaker. I know it's wondering where the next salvo will come from, in terms of what it's doing. But I urge the government to not just close their eyes, back off and hide, and say: "Well, we'll get over it. It'll go away. Six months from now the heat will go down." I would urge the government to really rethink its priorities, its policies and its direction.

There's nothing wrong in admitting every now and again, when you're in political life and you're making legislation, or making rules and laws for people, that sometimes you can make mistakes. As a matter of fact, there seems to be among modern politicians — and I certainly think this government represents that current trend — an attitude that you must never ever admit you've made a mistake. You'll do anything to backtrack, rewrite or amend, but never admit that perhaps, in your general wisdom, you misread what British Columbians or Canadians wanted from their government. I think that has implications not only for the government but also for all of us involved in public life. It's a difficult chore to ask anybody, particularly during these difficult times, and given the legislation that this government has introduced, to listen to a member of the opposition and say: "Listen, guys. Perhaps you blew it a little bit. Maybe you went a little too far. Maybe there's room for reconsideration."

To get back to the thread of my introductory remarks today, the great principle of consensus through deliberation, it seems to me, in my short time in public life, that we need to take a look at that fundamental principle a little more. The Minister of Municipal Affairs knows that he has a good vehicle in the UBCM to use that principle, or call together any mayors or aldermen from any municipality he wishes to to talk about the regulations that he will introduce behind this particular act.

[Mr. Pelton in the chair.]

Why is the politics of consensus so useful? It's because one set of policies is not just as good as any other, even though it may be the temporary outcome of the democratic process. Rationality in the raising and spending of public funds, as in other areas, requires the making of difficult choices in the light of the expected consequences of alternative courses of action. I'm quite prepared to admit, as a member of the opposition, that it's difficult for any person in government today, no matter what political stripe. There are some problems facing us to which not one party or group of politicians or statesmen have all the answers. We admit that. It's during such times that we need to talk among ourselves a little more to try to achieve the answers or our perceived solutions to problems through a process of deliberation. I know that process can be very troublesome. It can be long. It can certainly lead to heated debates and people often taking offence to each other in those kinds of meetings.

[3:00]

If we are to resolve our long-term problems, there must be common goals and directions, and, I suppose, a bit of a common philosophy that all British Columbians feel they can identify with. We know the government is trying to identify this thing called restraint as the common objective. I don't think anyone has any particular difficulty with the theory that we've all got to try ourselves to resolve some of the problems of this province or country. But I think it's the consensus out there now that this government has gone beyond that restraint thing. It has become extremely political to take on certain aspects of government that some might say are not politically in tune with the current Social Credit government.

MR. BARNES: It's a smokescreen.

MR. BLENCOE: My colleague said "smokescreen, " and I think that's an appropriate word.

I would urge this government, if it wishes to be perceived as serious about that concept of restraint, to try to achieve a feeling for the people of British Columbia about what their consensus is on some of the things they are doing. I don't think there's any question that this package, including Bill 7, which has been introduced has not been established through any process of consensus through deliberation. It certainly wasn't talked about during the election, and the people of British Columbia had no idea that this was going to come, no idea at all. Although this government has been elected for four years, I already said ten minutes ago that there is something above majority rule, and that's common good, public interest and general welfare. Those are three important principles that are above the majority rule syndrome that currently, I think, pervades the modus operandi of this government.

If they searched their consciences and talked to many of their constituents, I think they would find that there are thousands and thousands of British Columbians who feel that those three principles.... There appear to be no terms of reference for them in the current modus operandi of this government. To go back to Bill 7, I would urge this government to utilize those fundamental principles in constitutional democracy and in the taxation systems we establish for municipal-level or civic government.

"It's always" — I go back to the report — "distinctly possible that a given choice made by consensus or majority rule will be based on misapprehension or unawareness of the underlying facts, and hence will be irrational." That's an important statement. I believe that this government has introduced 26 pieces of legislation, including Bill 7, under a cloud of misapprehension; a cloud of unawareness about what British Columbians really want in terms of the long-term goals and objectives of this province. And, I believe, it is totally irrational. If anyone takes the time to study the various pieces of legislation in depth, they will find that there are incredible conflicts in them and in the budget that was tabled. I don't want to go into any of those in detail, Mr. Speaker, but one of the basic principles of this government appears to be — and they're saying this to all British Columbians — that it will be the private sector that will be the...

AN HON. MEMBER:...engine of growth!

MR. BLENCOE: Thank you!

The budget and the legislation are irrational in terms of that statement, because that very engine of growth has been hit hard by this government. In Bill 7 that engine of growth.... There is an incredible potential for the business and industrial sector to be hit extremely hard, and I'll get back to that theme in a minute.

[ Page 671 ]

1 think it's extremely important that this government take a look at such things as misapprehension and irrationality in their current deliberations, because I think they will have to admit that their whole modus operandi and current direction is irrational, and that they are being seriously misled by whoever is giving them advice.

Before we started the debate today, I had the opportunity again to talk to Victorians on an open-line program. Interestingly enough, once again, many of the people calling in were people who had voted for this government. I admit that supposedly it could have been set up, or that they could be isolated calls, but I've listened to many of these kinds of programs, and have been on many of them myself, and have been reading letters to the editor, and there are indeed many long-time Social Credit supporters who are deeply concerned about the legislation they have introduced. If there's anything that might move this government to go back to consensus through deliberation, I would have to think it would be their very own supporters.

Indeed the host of this open-line program in Victoria, Mr. Joe Easingwood, was a candidate for your party and for this government. He carried the flag as best he could. During the election, when he was asked if he supported Socred principles and ideologies, he said: "Absolutely. Wholeheartedly." That's why he was running for the party. Today, Mr. Speaker, he said categorically that if he was on that government's side today he would have to cross the floor. If there is one person in this area who was a Socred during the campaign — I suppose in many respects still is — and who said he supported Social Credit principles, constitution and direction, it was Mr. Joe Easingwood. Well, he admitted today that if he was in government and sitting over there with you, he would have to cross the floor. I believe that has to be a serious indictment of this government and its policies and 26 or 27 bills, and Bill 7 which we're debating today. It's a reflection, Mr. Speaker.

HON. MR. PHILLIPS: He's worse than Charlie.

MR. LEA: You're a little better than Waldo Skillings, but not much.

MR. BLENCOE: Actually, the Minister for Industry and Small Business Development (Hon. Mr. Phillips) has been in the House for quite some time and.... Oh, he's leaving. He's gone again. Well, I was expecting it, Mr. Speaker, because I know that when I go on he tends to get a little impatient and makes a few remarks and suggestions. But I'm not going to have that benefit today. That's too bad, because I always look to forward to that minister's remarks. However, he's decided to leave.

Mr. Speaker, I was reporting on some of the calls I had today. I'll tell you some more about those calls.

HON. MR. RITCHIE: May I leave too?

MR. BLENCOE: Feel free. You're a free agent, I believe, although perhaps you may want to stay and listen to some of these....

HON. MR. RITCHIE: Have you got anything important to say?

MR. BLENCOE: Oh, this is all very important, Mr. Minister. The principles and elements of constitutional democracy and common good are all things we should be interested in all the time.

Mr. Speaker, I was trying to indicate to the members of the government across the way who have had.... Thank you for staying to listen to this today. I was trying to indicate to them that maybe there was misapprehension in their priorities for what government should be doing in this province, or they were unaware of the reactions of that silent majority they like to refer to. Maybe they would reconsider some of their irrational actions, of which there are many. The opposition has given you examples, and many people out in the community have given you lots of examples.

Alternatively, Mr. Speaker, it may be that through inertia a particular minority is allowed to dictate a policy or another minority is placed at such a disadvantage that the basic rights of its members have been prejudiced. I would say that indeed this government's policies, particularly in certain areas, are in favour of certain minorities.

MR. LEA: Them.

[3:15]

MR. BLENCOE: Well, them is the.... Certain members, yes.

Much of the legislation we have before us does help or reflect certain minorities. I refer to Bill 5, the rentalsman legislation, although we're supposed to be on Bill 7. There's no question that that reflects a very small minority and is a way of granting some special privilege to development corporations and landlords in this province. Mr. Speaker, I would urge this government to reconsider that particular bill as well in light of the common good and the public interest and the general welfare. That bill does not meet those particular fundamental principles of constitutional democracy. Indeed, Mr. Speaker, it violates those very principles, as do a number of other bills before us.

"The achievement of the common good, then, depends on more than the existence of democratic processes through which policies are devised. It will require from each individual a genuine concern for the needs of others and a consequent refusal to use others simply as a means of promoting his private or public objectives, however laudable these may be made to appear"

That's a very important description of the achievement of the common good. We have before us umpteen pieces of legislation that initially may have appeared laudable to this government, but I think they've gone beyond that appearance. No longer should they be interested in promoting their private or public objectives above the common good, the public interest or the general welfare. I keep going back to those three phrases, but they are very important. They are principles that are very much in the forefront in this province these days because we do have a package and a government direction that for the majority, I would say, of British Columbians, violates those very principles. Bill 7 is part of that particular direction, and if they do nothing else, I would urge, again, that the minister temporarily withdraw this bill and enter into a process that will allow him to achieve consensus over the regulations that will back up the variable mill rate.

"It will depend, too, on the continuous use of the individual's powers in the maintenance and enlargement of freedom and human relationships.

[ Page 672 ]

" Finally, the common good will always require the orientation of public policy to the general well being of society rather than to particular interests."

I will go back to this bill and reflect on that statement, because section 10, if it goes through as stated in the act, will create special privilege and special interests for two particular property categories. I refer to exemptions for industrial or business property. I talked about this when I was up last week, but I would like to reflect on it again because it is an important aspect of this bill.

One of the important prerequisites of the attempt to establish taxation systems is that in a constitutional democracy we still believe that taxation systems should reflect equity and fairness, and that the principles should apply as much as possible to all citizens and people owning particular types of property. This section creates some concern, because they're saying that the industrial or business property holders are going to have special privilege or status. The cabinet will be able to prescribe exemptions from property tax levies for these categories. That's difficult to support when this government says that Bill 7 is the panacea for municipal tax systems. If this legislation were as good as the government purports, they would not need section 10. If they were introducing a piece of legislation that was fair and equitable, they wouldn't have to ensure that two property categories be exempt from certain levels of property tax, at the whim of cabinet. They admit that what they're doing is band-aid. It's just a tinkering and an admission that the real estate system can indeed be extremely harsh with those particular categories, so you make sure they are exempt, if required.

I have no axe to grind with business or industrial property holders. Last time I gave a description of what happened with industrial property in the city of Victoria. They were and still are in trouble. No particular property owner should have special privilege. If you're going to have special privilege, then you had better have it for the thousands and thousands of single-family property owners. Introduce special exemptions for them if they start to pay a higher proportion of property tax at the municipal level than can be supported or endorsed. Don't just do it for a particular category, because that means you're being selective in your legislation. You're not trying to introduce legislation that is fair and equitable and follows the principle of the common good, the public interest and the general welfare. You are creating privilege in your legislation; there's no question that it does that.

Perhaps the minister will clarify this: if there is one part of Bill 7 that is creating some concern in the municipal area, it is section 10. I go back again to the Ontario commission: "Because the furthering of the common good does represent the fundamental task of democratic government, government's use of the tax system must always be judged in relation to that end." That is to say that the common good does represent the fundamental task of democratic government. Everything you do, not only just in social service legislation but also in something as mundane as the tax systems of municipal governments, should be judged in terms of the fundamental task of achieving the common good for all.

I want to move on and talk a little bit about constitutionalism and individual rights:

"If the basic purpose of democratic government is the pursuit of the common good, constitutionalism exists to safeguard individual rights in the face of any aberrations or deviations that will necessarily arise from time to time as fallible governments press on in their quest for the public welfare. While there is considerable disagreement over the sources of individual rights — whether from divine intent, human reason or sociological conditions — there exists remarkable consensus as to their content.

"We wish to comment briefly on three widely recognized individual rights, not because we necessarily prize them more highly than others, but because they are particularly relevant to the field of taxation. The first is the right to equal treatment before the law."

I refer to section 10. That certainly is not part of this act. Citizens have the right to equal treatment before the law. That is not just applicable to Bill 7; there are a number of other pieces of legislation that one could quote that statement for. The second is the right of the individual to earn, own or dispose of private property. The third is the right of the individual to a minimum level of economic and social well-being. They are "all essential to achieve both free exercise of constitutional rights and the equitable distribution of the fruits of economic growth."

It's the first one that is of particular importance in this piece of legislation: the right to equal treatment before the law. This act goes nowhere near that fundamental right in a constitutional democracy. As a matter of fact, it's an admission by this government that they are not coming to terms with the inadequacies and inequalities in the real estate tax system utililized by municipal governments. It is — and I've used the word before — irrational, because it has to provide for certain exemptions if that tax system gets out of hand, as it did a couple of years ago, when we saw an incredible escalation in assessments brought on by the unearned wealth syndrome that pervaded this province. I'm sure we've all talked to people who within a matter of weeks made $20,000 or $30,000 on a piece of property. Of course, in terms of assessments and tax increases for the average British Columbian who didn't want to sell his home, the whirlwind that brought on was incredible.

We need a tax system for municipal purposes in British Columbia — and I'm going to continue to say this, Mr. Speaker — that is based upon the ability to pay. There are thousands and thousands of British Columbians who should not be subjected to the whims of that great free enterprise syndrome, the unearned wealth syndrome that the real estate industry forces upon us at certain times.

I don't want to get into codes of ethics for the real estate industry. That's for another debate. But something as fundamental as shelter — one's home and that piece of land....

The preservation of the family environment in progressive society is one of the most stabilizing influences in our communities. When you have a taxation system that can overnight jeopardize that basic stabilizing influence in our communities, it's time to admit that band-aids are no longer the answer, that we can no longer just accept a tinkering with the process, that we must have a system that is related more to a person's ability to pay.

I have no problem with a two-tiered municipal tax structure. There's no question that when municipal governments were established many years ago, the services that were provided by municipalities were directly related to property: fire, police, sewer, water — those sorts of things. But over the years municipal governments and the services they provide have radically altered. There has been, I suppose, a revolution in municipal governments in terms of what they are involved in and the services they provide. I think it's a

[ Page 673 ]

creative revolution. Let's say "evolution, " because "revolution" has bad connotations. I've said this many times, and during my term of office members are going to hear it over and over again, but I think municipal government is the most efficient and most democratic level of government. It's the most accountable and the most accessible. And so the systems we introduce for it should enhance that type of government. Unfortunately, the taxation system that's in place doesn't do that.

[3:30]

I would like to suggest that if this government is so supportive of the real estate tax system for all services municipalities are involved in, why not then investigate a two-tiered system? I won't get into actual details or specifics in terms of numbers, but it's quite plausible that for certain functions at the municipal level the property taxation system could be in place. But there could be a cap on that. For instance, property taxes will be collected for services such as sewers and underground services, and for fire protection — that protects private property, but of course it protects individuals as well. There are a number of others, Mr. Speaker, but there is a direct correlation between the property tax and the services that are supported by that property tax. There's your first tier of tax.

Through analysis one could take a look at the other services that municipal governments are involved in, and it doesn't take long to recognize that those services are not property-related. Unfortunately, however, those services are being funded by property tax. I don't think there's any reason why — and I don't want to get into details, because it's a very tricky issue — there should not be a second level at the municipal level that collects money from the homeowner on the basis of income. Those funds go to non-property kinds of services. I recognize that the Minister of Finance (Hon. Mr. Curtis) and the Minister of Municipal Affairs (Hon. Mr. Ritchie) cannot work out a system like that overnight, but there's no question that we have been....

Actually, I'm glad the Minister of Finance is here. Because he was involved in civic politics for many years he knows the problems of the revenue system that's in place for municipalities. I would address my remarks particularly to that minister, because he's had that experience. Maybe he will try to encourage his colleagues to take a took at the revenue generating procedures for municipalities. I think he would have to admit, as we all would, that the property-tax system is antiquated. Why continue to support it? Why continue to add band-aid after band-aid, when we all know that it's basically unfair, and for the very reasons that I stated some time ago?

This government believes there's one area in which it has some expertise, and that's the financial area. I'll debate that another day if we ever get back to the budget debate. We're all waiting for that budget debate, by the way, to those members of government over there. We should be on that, but we won't get into that today.

MR. LAUK: December 21.

MR. BLENCOE: December 21 we'll get back to the budget debate? It could well be that we'll still be here on December 21. Correct.

I would hope that that Minister of Finance, who has had many years at the municipal level and has gained a degree of expertise, I think, would enter into some intelligent discussion with his government colleagues and say: "Yes, we will, over the next two or three years, work towards introducing a tax system that doesn't just tinker with the real estate process for municipal government." That has to be the long-term solution, which can be done through consensus, meaningful deliberations with the UBCM and any municipalities the government wishes to discuss it with. I've already said that in my opinion the municipal government is accessible, efficient and prepared at any time to debate or discuss their problems with senior government, and to try to work out some consensus in achieving solutions.

"The right to equal treatment before the law is one of the principal reasons for constitutionalism. Restraints against arbitrary and capricious legislation" — and we have certainly had a lot of that in the last month or so — "the independence of the judiciary and legislative checks on executive power are all designed to secure for the individual this basic right. Tax laws, no less than other kinds of legislation, must be tailored in applying strict adherence to the letter and spirit of this right."

It must be strange to hear discussions of constitutional democracy, and principles such as common and general welfare, when we're talking about such boring things as taxation systems, but if there's anything that should be based on the common good and consensus through deliberation, it has to be taxation systems. Unfortunately, it's that dollar — the love of the dollar that leads to so many problems — and the financial arrangements that we have in place, that burdens modern society, although as a party we believe the cash register shouldn't always be in place. Not all programs should be subjected to the ring of the cash register. Certain things are above and beyond the bottom line. The Minister of Finance smiles slightly, but I think he knows what I mean — the cash register and that thing called majority rule, although, as I said earlier, some things take precedence over majority rule. Currently the majority rule in this province is subjecting some very basic services and fundamental rights to the cash register. There are some things that are beyond that. Of course, there's the common good, the public interest and the general welfare. All of those things are being questioned in this province by thousands and thousands of British Columbians deeply worried that some of those norms we accept in a democratic society — in a free society — are being eroded in the name of....

MR. PARKS: Progress.

MR. BLENCOE: Well, I'm not going to get into a discussion about progress. All we know is that there are thousands of British Columbians who feel that we have stepped back many years in this province in the last month or so.

MR. PARKS: Hundreds of thousands feel differently.

MR. BLENCOE: Hundreds of thousands? Well, Mr. Speaker, Goldfarb has just done a study for the Province....

MR. PARKS: Do you believe Goldfarb?

MR. BLENCOE: Well, you believed him. You've used Goldfarb many times. Goldfarb has just told this government that they're right off the mark. If there's ever a time for a government who may have the right to majority rule to look at

[ Page 674 ]

consensus through deliberation, now's the time. We've had thousands and thousands of British Columbians on the lawns here. They'll continue. They were not just organized labour, which this government says is behind everything, but a coalition of deep-thinking British Columbians from all sectors of this province who are saying — as the Province has found out in Goldfarb's study — that this government is way off the mark with its 27 pieces of legislation.

You don't have to listen to the opposition in our debates. You don't have to admit that we were instrumental in seeing you turn around in the next few months when you start to retract some of your legislation. Just admit that the people of British Columbia did speak up and you listened. I certainly hope you have that ability.

Interjections.

MR. BLENCOE: Mr. Speaker, I hear the words: "May 5." Democracy is not just alive at the ballot box. Democracy must continue between elections. There is such a thing as participatory democracy. There's such a thing as trying to achieve the common good and the general welfare. And those things are achieved through allowing citizens to participate in the democratic process. Please do not think that May 5 was the end of democracy in British Columbia until the next election. I hope not. I hope that this government will reconsider its legislation, and certainly reconsider Bill 7, because it has some serious implications for all of us.

"The right to equal treatment before the law is one of the principal reasons for constitutionalism." British Columbia should be proud of its history in constitutional democracy. There are many who have gone before us, who have stood in this chamber and defended such rights and privileges. They've discussed taxation systems before. I don't know whether they've discussed them within the realm of constitutional democracy and such themes as common good and common welfare. I suspect they have. But every citizen has the right to equal treatment before the law. That's one of the principal reasons for constitutionalism, and taxation has to fit within that.

"Restraints against arbitrary and capricious legislation..."

[3:45]

AN HON. MEMBER: Capricious?

MR. BLENCOE: It's a nice word. It's appropriate.

"...the independence of the judiciary, legislative checks on executive power, all are designed to secure for the individual this basic right. Tax laws, no less than other kinds of legislation, must be tailored and applied with strict adherence to the letter and spirit of this right."

This tax law is not done within the confines of that basic principle of constitutional democracy, It's not.

Interjection.

[Mr. Strachan in the chair.]

MR. BLENCOE: I'll save that for another debate. We'll get lots of opportunity in the next few years to talk about banks. However, the banks have just announced their profits. Boy, they're still making history, in terms of the profits they're making in this country. They're also making history in terms of the homes they're taking away from people. There has to some concern about the common good and the common welfare and the general welfare in terms of the rights and privileges of the banks and what they can do to British Columbians and Canadians. That certainly is a very big moral question in British Columbian and Canadian society. However, I don't want to get into that. The member here sort of brought it up a little bit.

Interjection.

MR. BLENCOE: Thank you for those interesting statistics.

"Both because taxation so intimately affects every individual and because it is heavily dependent upon administrative processes, the achievement of strict equity in this field poses an unusually severe challenge." We recognize that challenge. We know the government does face a difficult time in trying to deal with taxation systems. Those of us who have been involved in the municipal level of government know it all too well. There are certain members in the House this afternoon on the government side who have been involved in that municipal system. They know it's very difficult to introduce tax systems that are fair, It's a severe challenge, but I think we're up to it. We must be up to it. The taxation process and how much money we take from British Columbians and how fairly we do it is a major source of discontent, of pain and suffering for British Columbians, in terms of the real estate tax system. When they get a tax notice based on what the computer said somebody's house down the road sold for, at about 40 or 50 percent higher than it should have, and that person on a fixed income had to pay the same kind of taxes, that's not fair and it's not right — I'm going to say that over and over again in this debate — particularly in this riding, which is the major home in Canada for those who are retired. Those retired, elderly people did not work in Canada or in British Columbia all their lives, so that they could have a single-family home all their days, only to see a municipal tax structure which when it goes wrong creates all sorts of pain and suffering for those on fixed incomes.

I know that those who are involved in the municipal system heard those concerns nearly two years ago. I hope they will get up and talk about it. I hope the first member for Surrey will indeed give us her words of wisdom on this particular bill.

MRS. JOHNSTON: You mean you're not speaking forever?

MR. BLENCOE: No, no, I wouldn't want to do that to you.

Interjections.

MR. BLENCOE: I'm quite relaxed, Mr. Speaker.

I will go on to give the government the sensible words of wisdom from the well-known commission on taxation done in 1967. The authors of this report said: "We consider equity in tax law and tax administration a prime test both of a sound revenue system and, more important, of a truly functional constitutionalism." This act does not meet that sound revenue system for municipal governments. It comes nowhere near that. All it does is to allow municipal governments to shift around the load to other property categories whenever they

[ Page 675 ]

like. It removes from the provincial government responsibility for trying to share the problems and the load that municipal governments face in terms of maintaining their operations to acceptable safety standards.

This government is more and more — I mentioned it last time, and I'll mention it again today — removing itself from financial support of municipal operations. There has been a long-standing tradition in this province that senior governments, particularly provincial, be financially responsible to municipalities. We have seen them remove themselves more and more from that. Later on in the debate I will get into the McMath report, which talks about how we should be moving more towards senior government taking over the responsibilities of education costs and, of course, municipal costs. After all, they have far more revenue sources than municipal governments, who have limited resources. Unlike senior governments, they are not permitted to run a deficit. Consequently, they have to balance their books, which I think is laudable and something that the provincial government may wish to try to do in the next four or five years. The difficulty they are creating for this level of government, as they remove themselves from financial support, has serious implications for all British Columbians. This bill is just part of that withdrawal.

I want to go on to talk about constitutional democracy, economic policy and taxation. Terrific stuff, Mr. Speaker, and all things that this government believes it knows about, purports to support, and about which it purports to be the only party in this House that knows anything.

When the New Democratic Party was in government, it left this province in sound financial shape.

Interjections.

MR. BLENCOE: Oh, yes, we did. After 104 years of government in the province of British Columbia there was a total deficit of $4 billion contributed by all parties. In seven short years this government has raised that deficit to $12 billion. Mr. Speaker, they need to listen to things like economic policy and taxation principles because what they've done to the economy of British Columbia and the previous financial base of this province is unconscionable. They have got this province into one heck of a mess and they don't know how they're going to get out of it. That's why they won't talk about the budget. They're going to talk about anything they can but the budget, because they know that when we get to it and do our analysis, it's got all sorts of flaws in it.

AN HON. MEMBER: Your analysis has?

MR. BLENCOE: No, your budget, Mr. Minister.

I would like to remind this government, as I start on this topic of constitutional democracy, economy policy and taxation, that they have run the debt of this province up to $12 billion, nearly $5,000 debt for every British Columbian. If this government purports to be the experts in financial matters, Mr. Speaker, they have blown that reputation. It's gone. So I think they should listen to things like economic policy, taxation and constitutional democracy, because it might help them in their deliberations. I'm going to quote from section 16 of the best-known report on taxation, which was done in Ontario:

"To say that there are limits to the appropriate scope of government is not to deny that government must play a critically important role in society, more particularly in economic life. Such a denial would surely fly in the face of reality."

Indeed, there are at least five major economic objectives that are so generally recognized as falling within the purview of government that an enumeration is almost superfluous. These objectives can be summarized as follows.

The Minister of Education (Hon. Mr. Heinrich) is looking rather tired, but I hope he will listen to these general objectives, because hopefully we all support them. These are the general objectives of — how do I put this...?

MR. VEITCH: Sit down and think about it.

MR. BLENCOE: The Whip wants me to sit down and think about it. No, I don't want to do that just yet.

These are the objectives of usually civilized and progressive governments in western democracy. I would hope that this government still believes that it's part of western democracy and part of the progressive, civilized western concept of constitutional democracy. I hope they still believe in that. Here are the objectives: first, "a high and stable level of employment." Well, I'm not so sure that that objective is being met by this government. This particular bill, in terms of its impact on the industrial property holders, will certainly not help to achieve that high and stable level of employment. If this government is serious about helping the industrial property holder, they will introduce a brand new industrial policy and taxation system that is not based upon what happens in the upland property. Some developer may wish to sell that land for condominiums, and consequently that industrialist has to pay taxes based upon what might happen in the real estate market. That industrialist who wants to provide jobs.... In this community at last count we had 93 industrial property holders, most of them sound, family businesses. Because of the crazy real estate tax system, all are facing huge assessments and huge increases in taxes. This bill does not address that problem and it certainly does not try to maintain that objective of maintaining a high and stable level of employment.

[4:00]

That first objective "is not only essential to the most efficient use of available productive resources but is a basic foundation of human welfare and dignity." Taxation systems, even in such technical financial documents that often seem to be far removed from things such as common good, human welfare and dignity, should reflect such principles. I'm hoping this government will think about that a little more.

What's the next objective? "Reasonable stability of the general price level, a fundamental condition for economic efficiency and highly important to the achievement of equity and the protection of savings." This is a very important principle. I would have to say that I have evidence.... I'm sure many on the other side who have been involved in municipal government know that in the last few years those savings, particularly of people on fixed income and in the retired community, have been heavily drawn upon to keep up with the escalation of property tax. This bill does not endorse that particular principle. It does nothing to achieve equity and the protection of savings, particularly for those on fixed incomes like our senior citizens, handicapped, veterans and people like that.

[Mr. Veitch in the chair.]

[ Page 676 ]

What's the third objective in economic policy and taxation? It's economic growth, something we haven't seen in this province for a while. It's defined as "a rising per-capita annual production of goods and services, a process vital to continuing improvement in the standard of living — improvement that makes possible wider choices over the entire range of public and private goods and services." This is something that we haven't seen much of in this province in the last few years, despite what the government would like British Columbians to believe.

What's the fourth principle? An equitable distribution of income, something the current government doesn't like to talk about, because if it did believe in an equitable distribution of income, it certainly would not continue to prop up a municipal tax system that has nothing to do with equity and fairness, Mr. Speaker.

Interjection.

MR. BLENCOE: Well, the member here says that no tax system has. In some respects he's quite correct, but he and I know that the real estate tax system is the worst of the lot. We do have taxation systems that are far superior that could be introduced for municipal purposes. This government really should seriously consider that.

I'm talking about the fourth principle, Mr. Speaker: "an equitable distribution of income, necessary not only to provide incentives and to ensure the basic right of all individuals to a minimum level of economic and social well-being, but also to prevent undue concentrations of private economic power and to lessen the severity of cyclical swings in the level of economic activity." These are all important principles, Mr. Speaker. They are all something that this government should dust off and reconsider particularly in its taxation policies, because it's not only Bill 7 that's created all sorts of concerns for ensuring economic activity is stepped up, but, as you know, Mr. Speaker, in that budget the government delivered you gave an incredible kick in the teeth to the private sector — the private sector that's supposed to bail this government out of its problems. They hit them with horrendous tax increases and at the same time made dramatic inroads into the public service, creating further unemployment, particularly in this and the greater Vancouver regions.

Mr. Speaker, what's the fifth principle? It's a very important one: "the promotion and regulation of competition." Now this government would probably just emphasize the promotion of competition. It certainly may not want to support the regulation of such competition, because in these very right-wing times it's trendy to talk about eradicating regulation under the guise of "freeing democracy" and "freeing enterprise" and "freeing business" and "getting government off the backs of people." That's what we hear all the time. Regulation is necessary in a democratic society. Regulation is necessary in a society that's made up of all economic and sociological tiers and backgrounds of people.

AN HON. MEMBER: You'd take the rights away from people.

MR. BLENCOE: No, Mr. Speaker. We're not talking about taking rights away. You're the government that's taking rights away. That's quite clear. But, Mr. Speaker, regulations are there for a reason. They are there to ensure that those who wish to participate in the marketplace do so with some decorum, some concern for common good and common welfare. That's why we have regulation. If you have a wide-open, jungle kind of mentality, that is not part of a civilized society at all.

This document was not written, I can assure you, by New Democrats. It was written by the accepted economists of the time. The majority of them would accept and promote the free-enterprise system. They are saying that the promotion and regulation of competition is an important principle in constitutional democracy. This government believes that you remove all regulation and leave people to be subjected to the whims and events of a laissez-faire, wide-open, competitive world. Well, society has seen, over hundreds of years, the results of a wide-open, unregulated, unfettered economic system and a private sector without regulation. We know the abuses that take place. I can tell you now that for instance, in the landlord-tenant area, taking off the rights and privileges that tenants have under law and getting rid of the regulations is not.... Oh, I know you're shaking your head, Mr. Speaker. I'm a little off the topic, but it's part of the system I'm talking about; that is, when you're talking about the taxation system, you're talking about basic principles of constitutional democracy, and regulation is one of them. I would urge this government to seriously ponder that.

"These five objectives are the legitimate concern of government because it has become clear that the market mechanism, unaided, cannot be relied upon to achieve them in satisfactory measure. In particular, the private market economy by itself is clearly incapable of assuring stability in employment and price levels and of achieving an optimal and balanced rate of growth." Important words for this government. "Nor does the market economy of itself guarantee an equitable distribution of goods and services. Some services, such as education, highways, police and fire protection, confer such general social benefits that they must be provided collectively." There seems to be a move by this government.... That collective principle in constitutional democracy, in terms of collecting taxes for the collective distribution of services, seems to be alien to this government, but I would remind this government that all constitutional democracies in the western world, in the free world, endorse such principles.

"Others, such as welfare programs, are necessitated both by humane considerations and by the need to maintain a high and stable level of aggregate consumption. Finally, the susceptibility of the private economy to monopolistic influences, whether in industry, labour, agriculture or elsewhere, means that its effective functioning must be the constant concern of government."

All these principles are basic to any government in the western world, whether they be Social Credit, conservative or New Democrat. We're all involved in the promotion and regulation of competition, in the equitable distribution of income — or we should be, for the common good. We all should be involved in ensuring there is fair and reasonable economic growth, in encouraging reasonable stability of a general price level. And I hope that in our taxation policies we all try to encourage a high and stable level of employment.

"In the light of what are necessary objectives" — those five I have outlined — "economic policy in all constitutional democracies, the tax system takes on a particular degree of importance. Taxation is of course

[ Page 677 ]

necessary as the means of financing all but those very few government services" — the document uses the example of electricity — "which can be priced like any private good and charged directly to the user. But in addition, taxation, because it influences the distribution of income, the level demand for goods and services and the allocation of resources between public and private uses, can be an invaluable component of policies designed to secure full employment, price stability and balanced growth."

[4:15]

Here is the important statement that I would like to make sure government members hear clearly: "The potential economic effects of the tax system therefore make its functioning a matter of special concern." I know there's been a fair amount of discussion about the variable mill rate, and how it's not really an important bill, but it is, because anything that's got to do with collecting. money from all citizens has something to do with trying to ensure that it's done fairly, equitably and evenly. The government of the day should, when it introduces a tax bill, and within the terms of reference, show clearly that they are not satisfied with the municipal tax system by creating exemptions in this very bill. They should take on the responsibility of revamping the whole process.

I'd like to go on to another important....

MRS. JOHNSTON: To the bill.

MR. BLENCOE: I'm speaking to the bill.

I'd like to get on to another topic. It's something I'm sure the government will be interested in: equity in taxation; the principle of equal treatment of equals. Supposedly that means that all citizens under the law of British Columbia or Canada are equal. At times some are more equal than others; we know that. The principle is that we should have equal treatment of equals.

AN HON. MEMBER: We're not all equal, I'm telling you.

MR. BLENCOE: That's why we need government to ensure that there is a balance between the unequals. I'm sure this government, when it rethinks its priorities and policies, will reintroduce that kind of balance.

"The basic rule of equity in taxation is the principle of equal treatment of equals. The principle is basic because it's derived from the equality of individuals before the law, which we have already referred to as a fundamental right of man. Furthermore, it is applicable to all types of taxation, since all taxes are ultimately paid by the individual. To be sure, a substantial proportion of taxes are paid in the first instance not by individuals but by incorporated enterprises which have a large identity apart from their owners."

I'll quickly say again that this bill indeed separates that corporate identity by section 10, allowing the cabinet at will to make special exemptions for those corporate identities. The principle in taxation is that wherever possible you apply the principle in constitutional democracy of equal treatment. This bill does not support that basic principle of constitutional democracy.

"In the long run, however, corporations are simply intermediaries for collecting revenues from individuals, whether as consumers, owners or employees. In exceptional circumstances a tax may be shifted in its entirety to the consumers of a firm's product or to the owners of the enterprise or to the suppliers of labour and other resources employed by the business. More commonly, the tax burden will be shared among these interests, their proportion of sharing being related to market conditions and to the period of time within which shifting takes place. Whatever the case, the upshot is that since all taxes are ultimately paid by individuals, the principle of equal treatment of equals is always a relevant consideration, and its application should look beyond the entity on which any tax is first imposed to the individuals on which the burden of tax finally rests."

Equal treatment of equals is always a relevant consideration in your tax system, Mr. Speaker.

This bill has nothing to do.... I'm putting the government to sleep, Mr. Speaker. I wish they'd wake up, because this is very important stuff.

Interjection.

MR. BLENCOE: Good. I'm glad to hear it.

"In an imperfect world" — and we all know we live in one — "it is quite obvious that the principle of equal treatment of equals can never be realized fully." We admit that. It should be something you should aim for as the ultimate, but you certainly aren't doing it in this bill.

" Even if one could assume general agreement as to what constituted the total fulfilment of this principle, other objectives might conflict with equity, objectives whose achievement was deemed by society to warrant marginal sacrifices in equity." We don't have any marginal sacrifices in this current legislation before us. There are few sacrifices on behalf of the people of British Columbia.

I would again refer my colleagues in government to consider the principle of consensus through deliberation. They have a terrific opportunity, through the UBCM and other collective methods that can be used to bring municipalities together, They have a terrific opportunity to withdraw this bill temporarily and show the UBCM what the regulations will be, how they will be applied, and whether they will be equal, fair or just, because there is some concern that your bill will allow some municipal governments to transfer horrendous loads onto particular categories. We want to ensure that that won't happen with the regulations. We want to ensure that a municipal government that, for instance, has a large part of its land and its land use, say, occupied by an industrial base — therefore with an intense lobby that could bring undue pressure to that municipal government to transfer the whole tax load from the industrial property holder onto, say, the homeowner....

AN HON. MEMBER: For shame!

MR. BLENCOE: "For shame!" that member says, but we have no guarantee in this legislation that in the shifts that municipal governments are going to be allowed to do, you won't have some particular categories bearing the brunt of the municipal tax system. Unless the minister can assure in the

[ Page 678 ]

regulations that that won't happen, I must continue to oppose this particular section of the bill on that ground.

MRS. JOHNSTON: Did you defend that when you were an alderman?

MR. BLENCOE: Oh, yes.

DEPUTY SPEAKER: Hon. member, you'll have plenty of time during different periods to discuss the bill section-by-section. The Chair would appreciate you speaking on the principle of the bill.

MR. BLENCOE: Well, the principle of the bill is in the particular sections, but I will continue as best I can.

Interjections.

MR. BLENCOE: All I'm trying to do, as the minister has done on Bill 9 — and he has taken, to give him credit, the constructive criticism of the opposition and reconsidered that bill, and entered into some consensus deliberation with municipal governments.... He has temporarily taken that bill out of debate. I'm hoping that he will do this with Bills 7 and 12. That's the intent. Also, obviously, through the debate we give the opportunity for government to recognize that in a constitutional democracy there has to be equity in taxation. This particular bill has nothing to do with equity in taxation. So I'm just trying to give this government some direction that maybe they can go in.

MR. LAUK: Show them the door.

MR. BLENCOE: Thank you, Mr. Member for Vancouver Centre.

Interjection.

MR. BLENCOE: Let's not get personal. Let's stick to the bill, the debate. Let's stick to the intent.

"To recognize these impediments" — that is, the shifts in taxation — "is in no way to deprecate equity, but simply to face up to the practical difficulties that beset its achievement. Such recognition also points to at least one significant conclusion: namely, that over-reliance on taxes whose ultimate burden is difficult to trace is highly questionable from the standpoint of equity." There is indeed, by the fact that this government has introduced Bill 7, continuing to be an over reliance on a tax system that really needs to be revamped and rewritten. This is not satisfactory if you want to achieve equity in taxation at the municipal level. That is a basic principle of constitutional democracy. I know it sounds farfetched when we are talking about a variable mill rate to talk about equity and fairness and constitutional democracy and the principle of equal treatment of equals, but indeed they are important principles that we should consider.

"In taxation, the principle of equal treatment of equals has two broad dimensions. First, it is a bulwark of protection against arbitrary and capricious treatment by tax authorities."I think there were some citizens of British Columbia who wondered about the capricious treatment they received from the Assessment Authority a few years ago, in terms of how they were going to pay their taxes for that particular year.

"Second, it provides the principal cornerstone on the basis of which taxes can be justified." Taxes, Mr. Speaker, have to be justified, and bills have to be justified in terms of equity and equal treatment under law. It's true. It is absolutely true. It's a basic truth.

"The first dimension of equal treatments of equals requires very little elaboration. In legislation, the principle demands that the overall classification of taxpayers into categories be reasonable and just and that all taxpayers within a given category be treated equally. Thus, if it is decided that a tax is to be based on retail sales, the array of items subject to tax must be clearly defined and the rate or rates must be assessed uniformly."

[4:30]

There is going to be no uniformity in the province of British Columbia in terms of all municipalities. Before, even though it was a poor system, at least everybody knew what the formula was, what level they would be taxed at and what would happen for each particular category. Under this bill, every year it's going to be a guessing game. What will council do with my taxes this year, because I don't have a formula that I can count on? The formula will be subject to the whim of the current council. So if a pro-development council gets elected, you know what's going to happen. There's going to be a transfer of taxes to other categories that the pro-development lobby would support. It's going to happen.

We need a system that won't change from year to year. I'm not wanting to speak heavily in favour of the old system, but at least we knew what levels we were going to get. We knew, for instance, that residential properties would be taxed at 10 percent of their value. Boy, I can remember all the levels. It was 10 percent for residential. I believe it was something like 24 percent for businesses.

AN HON. MEMBER: It was 24.5.

MR. BLENCOE: Thank you, 24.5. Industrial property, which was a bit higher, was over 30 percent, I don't know exactly....

AN HON. MEMBER: It was 29.

MR. BLENCOE: No, it was a little higher than 29, I think. At least those levels were established.

MR. LAUK: On a point of order, the rules of this House have quorum requirements. I wonder if Mr. Speaker could ring the bell.

DEPUTY SPEAKER: The Speaker will do a count.

The Speaker recognizes a quorum, and the hon. member continues.

MR. BLENCOE: What is a quorum?

DEPUTY SPEAKER: Ten, including the Speaker.

MR. LAUK: Ten, including the Speaker? Is that the rule? And including the Minister of Agriculture and Food (Hon. Mr. Schroeder) as well? Don't we have any standards at all?

DEPUTY SPEAKER: And including the second member for Vancouver Centre (Mr. Lauk).

[ Page 679 ]

MR. LAUK: Now I know we've reached the depths of depravity.

DEPUTY SPEAKER: Has the hon. member concluded his debate?

MR. BLENCOE: Oh, no, Mr. Speaker. That's just my preamble.

We may laugh and we may joke about Bill 7 and Bill 12 being perhaps the most innocuous pieces of legislation; but to the contrary, any legislation that purports to resolve taxation problems from municipalities and yet really doesn't do it is serious business. That's why we're taking a little bit of time with this legislation to ask the government to seriously look at it and get into a process of reasonable deliberation and consensus-seeking with the UBCM and others.

I was talking about the equity in taxation and why it's extremely important. The first dimension of the principle of equal treatment of equals requires a little elaboration. "Here it serves as the master guideline of tax legislation and administration. In legislation, the principle demands that the overall classification of taxpayers into categories be reasonable and just and that all taxpayers within a given category be treated equally." I already stated that, but I wanted to go over that again. Thus, if it is decided that a tax is to be used based on.... Oh, I've already given you that little bit of information too.

AN HON. MEMBER: Where are your colleagues? They've all deserted you.

MR. BLENCOE: Mr. Speaker, my colleagues know that they can leave this particular bill in my hands and we can debate it accordingly.

"The second dimension of the principle of equal treatment of equals, which involves the justification of taxes" — boy, that would be nice if the government had to justify taxes — "is like the first in that it is difficult to achieve in practice, but unfortunately unlike the first in that its elaboration in theory is highly complex. We can at least, however, begin on a simple note. It is this: from the premise that equals should be treated equally it is generally conceded that unequals should be treated unequally. At this point it will be observed that two time-honoured principles apply to the unequal treatment of unequals: namely, the principle of benefits received and the principle of ability to pay."

Mr. Speaker, there is nothing in this legislation that talks about the ability of the taxpayer to pay municipal taxes. It's something this government has to address.

[Mr. Strachan in the chair.]

The principle of the ability to pay: I would like to go into that in a little depth, because it's important.

MRS. JOHNSTON: The principle of the bill!

MR. BLENCOE: That's important in this bill, because it isn't there. It's tinkering; it's band-aid; it's got nothing to do with the principle of the ability of municipal taxpayers to pay. It's something that I'm hoping this government will reconsider in the next year or so.

"Under the principle of the ability to pay, equity requires the equal treatment of persons possessing the same capacity to pay taxes. Ability to pay is appropriate for financing that great portion of government expenditure where it is either impossible or inappropriate to allocate cost among taxpayers in accordance with benefits received."

That's an important principle, Mr. Speaker. "The application of the ability principle, however, requires agreement on some generally accepted criteria by which capacity to pay taxes may be measured."

Mr. Speaker, I have suggested to this government that there are some criteria they can achieve through discussion with the UBCM. For certain services that are provided to municipalities, they could pay for those services by a taxation system that is based upon the ability to pay. It's an important principle, and I continue to emphasize it.

"Under the early versions of the ability-to-pay principle in sixteenth-century Europe, and later in North America, wealth or property was considered the most appropriate index of tax-paying capacity." It was, at one time, considered that. As I said earlier, municipal governments have grown and evolved beyond what they originally were established for. Consequently the ways that municipalities paid for themselves should be also allowed to evolve, and we should have a new system that allows them to pay for their services. It is interesting that they go back to sixteenth-century Europe in terms of where we achieve the property tax system currently in place in municipal government. I know it's been changed, tinkered with and amended over the years, but basically we have the same system that was in place those many, many years ago. If we consider ourselves to be a progressive and forward-thinking province, we would admit that we've got to rethink and retool this particular municipal tax system, and not leave in a system that was put in place many, many years ago and no longer reflects the current needs.

Interjection.

MR. BLENCOE: Well, I'm giving them the benefit of the doubt. I'll do that today.

"A little later consumption or spending was singled out as most suitable." Mr. Speaker, I'm afraid I'm going to get into some history here in terms of where the property tax system came from. Mr. Thomas Hobbes, the seventeenth- century English philosopher, stated that equity required that "people be taxed on the basis of what they used up of their country's product, not on the basis of what they contributed to it." In our present generation, the well-known economist at the University of Cambridge, Nicholas Kaldor, talks about the expenditure tax, regarding consumption as an equitable criterion of ability to pay. "As a matter of general practice, with the increase in industrialization of the past century, income has become widely regarded as the best index of tax-paying capacity."

This bill has nothing at all to do with income or the ability to pay according to one's income; indeed, it's just another crescent wrench to a system that's faltering and falling apart. Unless we take time with the UBCM to seriously try to put in place a fair and equitable system based upon the ability to pay, municipal governments — the basis of constitutional democracy in Canada — will be in serious trouble. Their future will be jeopardized.

[ Page 680 ]

MR. CAMPBELL: Are you saying all property taxes should be based on the ability to pay?

MR. BLENCOE: No, no. If you were here earlier, you.... I was talking about a two-tiered system. You missed that part of my debate.

MR. CAMPBELL: Repeat it.

MR. BLENCOE: You really don't want me to repeat it, do you?

MR. CAMPBELL: Yes, we want to hear that again.

MR. BLENCOE: I'll tell you what, I'll try to get to that a little later on, okay? I'll try to refresh....

MR. R. FRASER: Tomorrow.

MR. BLENCOE: Okay, tomorrow.

"The case for income as a better index of ability to pay than either consumption or wealth rests on the fact that income is a more comprehensive index than the other two.

That's a well-known fact.

"Income, after all, comprises both consumption and saving, or increases in wealth during a given time period. Against this it can be argued that income is inferior to consumption precisely because it is too comprehensive. Because an income tax applies to saving, it reduces the capital which an individual can invest, and the effect is compounded when, at a later period of time the same individual will be taxed again on the interest from his reduced investment."

But it's not as bad as the scenario we had and continue to have when people have to pay municipal taxes based upon a speculation system in which somebody happened to sell their house in their block for an inflated price. They have to pay taxes according to that system. Those who are retired have to eat into their savings.

MRS. JOHNSTON: Have you got War and Peace there?

MR. BLENCOE: No, we don't need to go into War and Peace. We all know that on this side we're for peace and on the other side you declared war on the people of British Columbia. We don't have to talk about it; we know it.

Interjections.

[4:45]

MR. BLENCOE: Perhaps we can find room for them over there. We certainly would like them to move, that's for sure. We don't want them over here either.

"By contrast to wealth, the taxation of income recommends itself again in that income is more universal than wealth and a better index of an individual's standard of living."

MRS. JOHNSON: Who said that?

MR. BLENCOE: A very important commission on taxation done in 1967 and recognized as one of the most....

MR. PARKS: It's the worst piece of....

MR. BLENCOE: It's the first time he's ever heard of it, but now it's the worst piece.

MRS. JOHNSTON: You want us to go backwards, don't you?

MR. BLENCOE: No, I want you to look at something that was done quite a few years ago that was recognized as a very important document in terms of taxation.

AN HON. MEMBER: Who's the author? Is it Carter?

MR. BLENCOE: Carter? No, that report is down here.

Before I was interrupted I was trying to give evidence to this government that it is far better to base your taxation system upon income.

Interjection.

MR. BLENCOE: Well, those on fixed income have already worked in this country and they expect to hold on to their homes. Under the current financial arrangement for municipalities and the real estate property tax system, that future is jeopardized in terms of holding on to their homes. There's no question about that, and that's something the government should seriously ponder over the next year or so.

Before I was interrupted by various members, I was trying to give you some thoughts about the principle of the ability to pay and why the municipal tax system or this new bill has nothing to do with the ability to pay.

MR. CAMPBELL: Words of wisdom.

MR. BLENCOE: They are indeed — something this government really should listen to. There are many words of wisdom being spoken. Unfortunately you don't appear to be willing to listen, so we have to take time and effort to ensure that if we give you enough of it, perhaps....

Interjection.

MR. BLENCOE: If that back-bencher had any influence on cabinet, we know that this bill would be withdrawn today. They would reconsider it and at least discuss with the UBCM some of the serious implications for municipalities. Unfortunately that's not going to happen, I don't think.

I'll quote from the report again: "We concur in the widely accepted practice that takes income as the prime index of taxpaying capacity." I keep emphasizing that particular component, and I would hope that perhaps it would start to sink in on the minister and other members of this government that income should be the prime index of tax-paying capacity. It certainly doesn't have anything to do with this particular bill or the real estate tax system that I have had the unfortunate job of trying to administer in the city of Victoria for a number of years.

Interjection.

MR. BLENCOE: Mr. Speaker, does the member have a problem?

[ Page 681 ]

AN HON. MEMBER: Only when you're speaking to the gallery.

MR. BLENCOE: Oh, I see. Okay.

Tax-paying capacity should be based upon one's ability to pay and one's income. I think we all accept that.

MRS. JOHNSTON: No way.

MR. BLENCOE: No? You don't accept that? Well, that's unfortunate, because what it means is that you're going to continue to support a tax system for municipal purposes whereby those who don't want to sell their homes, particularly those on fixed income, will continue to pay taxes based upon real estate prices. The majority of those people don't want to sell their homes. That's the system you're continuing to support. You have a responsibility, in the estimation of our party, to totally revamp that system.

"It has been only in the twentieth century" which I think this government believes it's in — "that broad support has developed for the idea that to conform to ability to pay, a tax system must be progressive. Individual taxes in fact differ greatly in the degree to which they conform to this notion, but the idea in question is most effectively embodied today in the personal income tax. The personal income tax generally incorporates basic exemptions that recognize minimum income standards below which no tax should be levied."

Maybe that's something we should take a look at for the municipal level. I know you give an increased homeowner grant to those on fixed incomes, but many of them are still affected by increasing tax levies.

"These exemptions can be tailored to recognize the need for minimum levels of income and the existence of different family responsibilities for maintaining dependents. Above the basic exemption level, rates of personal income tax can be made to vary in increasing proportion as the level of income rises. Thus it is that the personal income tax is widely acclaimed as the tax most in accord with the principle of ability to pay."

There is no reason why this government, that has a mandate for a few more years, could not take a serious look at introducing a taxation system for municipal purposes based upon the ability to pay. There's no reason why you couldn't do that, instead of trying to con British Columbians that what you're doing through Bill 9 is going to save them from the inequities of the municipal tax system. That's not what you're going to do at all, but you've got time to do that. Perhaps you should take the opportunity to do so.

MR. CAMPBELL: Thank you.

MR. BLENCOE: You're welcome.

MRS. JOHNSTON: Have you stopped?

MR. BLENCOE: No, I'm just trying to find some useful ability-to-pay prescriptions here that might have some impact on these government members, but I know it's difficult....

MR. COCKE: On a point of order, our member for Victoria would have been through with his speech many hours ago had it not been for these continuous interruptions coming from the other side of the House. I wonder, Mr. Speaker, if you might admonish that group over there with respect to the successor to Charles and maybe he could get on with it and finish his speech. He's making a marvellous presentation and they should listen, not be making all these....

DEPUTY SPEAKER: Points of order are also considered an interruption.

Interjections.

MR. BLENCOE: I find that difficult to do with this government, because what you're doing has nothing to do with good government. If you listen to some of the principles involved in what I'm trying to state today, what you're doing has little to do with good government or government in the interest of all British Columbians. The first member for Surrey (Mrs. Johnston) should think seriously about that.

The writers of this well-known document on taxation "strongly support the principle of ability to pay as a cornerstone of sound taxation, and believe that income provides the most reliable, but by no means sole, index of tax-paying capacity." They readily admit that "the principle and so-called 'law' from which it is often derived provide no guide as to the most appropriate rate of progression. The ultimate sanction for any given pattern of tax progression is the prevailing consensus of ethical judgment as to what constitutes a socially desirable distribution of the nation's income and wealth." Municipal tax structures have nothing at all to do with any of those kinds of principles.

To reiterate, I think this government should consider such principles an ethical judgment that, for municipal purposes, distributes the load in terms of taxes collected to pay for municipal operations. Democratic principles in the financial arrangements of municipalities demand that. Many times over the years we have heard about the problems in the municipal tax system. We have heard of groups having to get up and fight it, trying to change it and tinker with it. We heard government after government say, "Yes, it's a problem but we don't really want to try to come to grips with it in an overall sense; we'll just play around with it." This government is carrying on that long-standing tradition of just tinkering with the municipal system.

We as a party are quite prepared to work with this government.

Interjection.

MR. BLENCOE: The member doubts that. We're quite prepared to work with this government on things like the common good and the common welfare. We're quite prepared to work towards equity in taxation — absolutely, unequivocally prepared to do that. If the government wishes to strike a special select committee on the municipal tax system to report in a certain period, the New Democratic Party would participate in that particular committee. If the government is prepared to consider seriously major changes to the municipal tax structure, to look at equity and the ability to pay municipal taxes, we are prepared to participate in that. That

[ Page 682 ]

offer is there for the taking. We are prepared to do that, if you are prepared to open that door.

Interjection.

MR. BLENCOE: Write you a letter?

Interjections.

MR. BLENCOE: Allowing the members to have their own discussion. I welcome it.

I said before, and I want to repeat it, that the ultimate sanction for any given pattern of tax progression is the prevailing consensus of ethical judgment as to what constitutes a socially desirable distribution of the nation's income and wealth. Mr. Speaker, these are important principles that we should try to aim for. I know it's a challenge, but I think we're up to it. I hope we are. After all, in this province there's nowhere else people can go to try and meet that difficult challenge. Certainly, in our estimation, Bill 7 does not meet the challenge of the antiquated and unfair taxation system that municipal governments currently have to administer.

[5:00]

"Without undertaking to probe the depths of this consensus, we think it appropriate at this juncture to suggest two guidelines" — and this is the report again — "that we believe are important considerations on making social judgments on progressivity. The first is that the concept of ability to pay, rather than dictating the progressivity of any given tax, embodies instead the more general notion that the tax system should be moderately progressive as a whole."

This bill, in its attempts to be a panacea, has nothing to do with progression as a whole.

"The second is that government expenditures, which themselves affect the relative position of individuals, should be considered along with taxes in determining what constitutes overall equity."

I know that appears to be funny for certain back-benchers, but it's something that the government should take into consideration when considering taxation law in terms of constitutional democracy, which I believe we still have in British Columbia — I hope we still have it.

This report attempts to show that "different taxes place rather different burdens on individuals and families with different levels of income." There are property taxes, motor vehicle fuel taxes and retail taxes, to name some. "Each absorbs rather different proportions of family income depending on the size of that income." But the real estate tax system does not absorb the proportion of family's income based upon the ability to pay. It absorbs it, and again I repeat what's happening in the real estate industry, the assessment authorities, computer analysis of what XY Real Estate Co. is getting for the house on your block.... The more I repeat how that particular system works, the more it seems quite ludicrous that this government would continue to support such a system.

"Such taxes, of course, cannot take into account varying personal and financial circumstances."

Certainly the municipal tax system has nothing to do with any personal financial circumstances families might find themselves in.

"This suggests to us that the personal income tax, which can be tailored to take relatively precise account of such circumstances, has a particularly critical role in helping to achieve equity, and that the burden of the other taxes on individuals and families provides a rough but useful guide to the desirable degree of progressivity in personal income tax rates."

Even though no one likes any taxation system, systems that are based upon the ability to pay draw closer to equity in a constitutional democracy. That's basically what the authors of this report are trying to say.

Before I get onto some other learned documents and reports on taxation systems, I'd just quickly like to go over some of the other principles of taxation and highlight them. I won't go into them in depth. As I said, equity under the law is the prime but by no means the sole characteristic of a good tax system. It certainly, however, is the prime characteristic. Bill 7 has nothing to do with equity at all. But there are nine other principles that are important in introducing equity into any taxation system. These other principles should form the basis of a sound revenue structure. I hope that this government, in the next few years, will indicate to the people of British Columbia that they have a handle on a sound revenue structure so that they can give a sense of hope to all British Columbians that they're not going to have increased debt in this province. Some of these principles are derived from equity; others have to do with efficiency in financial or taxation systems.

Mr. Speaker, I would like to quickly indicate what those other nine principles are.

MR. COCKE: What's your hurry?

MR. BLENCOE: I'll do a little bit of background.

Mr. Speaker, there are nine, apart from the ones that I've already given you today: (1) adequacy, (2) flexibility, (3) elasticity, (4) balance, (5) neutrality, (6) certainty — there's nothing certain about this bill, I can tell you that — (7) simplicity, (8) convenience, (9) economy of collection and compliance. Those are all important principles of taxation, other than the ones that I have tried to outline for this government today. I won't go over those others I've already outlined.

Now what do I mean by adequacy as a principle in taxation? Any taxation system must be capable of providing a flow of funds that a government deems appropriate in any given period. The principle of democracy can become highly relevant when the relative merits of grants and taxes are discussed in connection with provincial and municipal revenue systems. Adequacy in terms of predicting, profitably and accurately, the financial requirements to any level of government is a basic principle of the taxation system. Mr. Speaker, if we ever get back to the budget debate, I think that there'll be members on this side who will show that there are some basic flaws in the figures in the budget you have delivered in terms of your predictions and your requests for tax increases.

The second principle, other than the ones I've already discussed today, is flexibility. Flexibility means that a tax system should be so constituted that government, by discretionary action, can readily increase or decrease the flow of tax funds in response to changing circumstances which can stem either from consideration of expenditure requirements or economic policy. Obviously some taxes, such as those on property and on personal income, are more flexible than

[ Page 683 ]

others in that the rates and alterations can be graded so as to accommodate small as well as large changes in revenue requirements. The principle of flexibility can thus be deemed to be satisfied if a revenue system is comprised in part of flexible taxes.

Elasticity is the third one. The principle of elasticity is closely related to those of adequacy and flexibility. This principle requires that a revenue system be composed in part of taxes whose yields respond closely to changing economic circumstances, without deliberate changes in rates. It is important that the principle be fulfilled for two reasons. First, elasticity enables government to meet rising service demands occasioned by economic growth — if we ever get any in the province of British Columbia — without the disturbance of frequent rate changes. Secondly, elastic tax yields are an important adjunct of fiscal policy in that they can serve as automatic stabilizers, leaving a greater proportion of income in the private sector in times of adversity and dampening inflationary pressures in times of prosperity.

MRS. JOHNSTON: Who said all that?

MR. BLENCOE: These learned ladies and gentlemen of the commission.

MR. NICOLSON: George Bernard Shaw said that. Don't you remember that?

MR. BLENCOE: George!

I will go back at another hour to talk about the remaining principles of taxation for the government to consider, but I would like at this time to give this government the opportunity to consider a report by the B.C. School Trustees' Association called the "A Taxation Report to Business."

AN HON. MEMBER: I've got that one.

MR. BLENCOE: Yes, you've got it. It's a good one, and I want to put it on the record of this debate. It is an important document in terms of local taxation systems.

[5:15]

[Mr. Pelton in the chair.]

Mr. Speaker, I will go through this report and try to indicate to the members that there are many things in here that they should consider in terms of Bill 7. I think the UBCM and many municipalities, along with the B.C. School Trustees' Association, are telling this government that they really want to know what the regulations will be behind the various pieces of legislation you've introduced. They would like some time to meet with this government before they pass the bills to discuss the various regulations that will follow. They are very tired of always having to react after the fact, and of course that is not really good in terms of coming up with better ways to administer our municipalities or schools.

I refer back to trying to achieve decisions by consensus. The various pieces of legislation that I have had the privilege to debate so far really shouldn't be in the House at this stage, because there has been no consensus obtained by those to be affected by the various pieces of legislation. The UBCM, the school trustees and the regional districts — vis-à-vis Bill 9 — would certainly like the opportunity to meet with this government to try to achieve some consensus and perhaps come up with an intelligent answer to the problems of the taxation system in place at the municipal level.

This report given by this trustees' association is an analysis of property taxation policy in the province of British Columbia, and it's a good report. The report does not defend education spending, nor is it politically motivated. The trends of property taxation that are identified are decades old and as such cannot be uniquely associated with any political party. Indeed, much of the remarks I have made today in terms of asking this government to look at the principles of constitutional democracy and the principles involved in taxation do not reflect any particular political viewpoint — New Democrat or Social Credit. They are basically principles that have been established over hundreds of years of constitutional democracy. Consequently I think we can all support them and work towards achieving them once again in this province.

In 1982 the provincial government assumed the right to tax business and industrial property directly. They took that right. It wasn't done particularly in an atmosphere of consensus through deliberation; it was again a fairly arbitrary way, but they did that. They are continuing to do this with other pieces of legislation we have before us in this session. The headline on the first page of the B.C. School Trustees' Association report is interesting. This is a headline we see coming up over and over again from many organizations that support this government, like HUDAC. The heading is: "An Urgent Need to Cooperate." The B.C. School Trustees' Association, like the UBCM and hundreds of other municipalities, are asking this government to cooperate with them in trying to achieve consensus through deliberation over pieces of legislation. If there was ever a time in the history of British Columbia, in terms of the economic times we're going through and the concerns that are facing many British Columbians, the time has come for the government of British Columbia, representing the people, to cooperate with groups that represent many organizations, of which, the school trustees' association is one. Their headline is "An Urgent Need to Cooperate." They would like this government to listen to them. I think that is a cry that's coming from thousands of British Columbians saying: "Listen to us because maybe you have achieved majority rule, but there are certain things..."

Interjection.

MR. BLENCOE: That member did not wish me to go over what I said earlier, but I would like to remind them of parts of it. There are certain things that have a higher priority than majority rule, and those are things like common good, public interest and general welfare. Those are all important principles that this government should rethink in terms of what it's doing, not only with this piece of legislation but with other pieces of legislation it has introduced.

Now let me go through this report for the government's education.

"Business property owners, school boards and municipal councils have a common interest in working to remove the new provincial property tax on business. This cooperative effort must be undertakenfor the following reasons...."

The reason I want to discuss this today is that the only thing that we have before us that tries to deal with the municipal tax system from this government is the variable mill rate. Yet it

[ Page 684 ]

really has nothing to do with the problems that this report talks about, the problems that the UBCM talks about in terms of its municipal financial constraints or the problems of the principles that I have talked about earlier on, and in terms of the school trustees' association it does nothing to remove this horrendous property tax on the business community.

This report says there must be a cooperative effort undertaken for the following reasons:

"1. Seizure of business property tax enables the provincial government to compensate for reductions in corporate income tax by increasing non-residential property tax. This will drive companies out of business and business out of British Columbia. A business in a survival mode" — which many businesses are in this province — "during recession cannot afford to pay property tax in lieu of income tax."

That's an important statement. Again I go back to that whole premise that we should be looking at a property tax system based upon ability to pay. It certainly would be favoured by thousands of British Columbians.

"2. Stores, factories, trees and mines do not vote, and it is safer, politically, to apply onerous taxes to business properties than residences. If there is to be any measure of political accountability, property tax on business must be levied by local government at the same rates as residential taxes."

Yet we know that we've introduced some potential exemptions for cabinet to introduce that would create inequalities in the municipal tax system right in this particular bill.

"3. Provincial government collection of property tax leads to centralized control of education. Centralized control, produces higher costs and threatens parental and lay control."

The trustees' association gives some arguments backing up the general theme of their brief.

"The portion of education property tax which has been determined by the provincial government has produced the following trends and consequences. First, over the past 20 years, increases in the provincial property tax for education have far exceeded increases in education costs."

Later on I will get to the recommendations of the McMath report in terms of...

Interjection.

MR. BLENCOE: The Minister of Finance (Hon. Mr. Curtis) doesn't want to hear about the McMath report, but there are some important recommendations in there which even this government should consider.

"The trend to transfer the burden of education funding to property-owners goes back many years. The per-capita property tax in B.C. has been consistently above that of any other province, while the per-pupil costs for B.C. school boards have been below the Canadian average." Property taxes increase for educational purposes, but pupil costs to the B.C. school boards have been below the Canadian average. Many British Columbians wonder indeed what has happened. They see their education property taxes continuing to increase, yet they're told there has to be a cutback in the ratio of staff to students. They must begin to wonder what they're getting for their education tax dollar.

"The provincial government, by manipulation of assessments and homeowner grants, has shifted the burden of tax from voting residents to non-voting businesses. Property taxes have been increasing faster than property values. Data shows that when central provincial governments take control of education, costs soar out of control. The following are some of the contributing factors.

"Provincial governments are less effective in collective bargaining with the teachers" — we all know that. "In the short time of central control in British Columbia, there has been an unprecedented level of teacher confrontation, and traditional school board controls have been discarded, with promises of job security for teachers. An interprovincial comparison of teacher salary costs will further demonstrate the point. Central controls in provinces as large as B.C. produced diseconomies of scale. Owners of businesses know that administrative units are inefficient when the administrative unit or plant is too large."

What about the property tax burden increases, as outlined by the report given by the School Trustees' Association? I'm going to quote from the chart and graphs. The chart shows the total school district's net operating budget and the sources of education funding in British Columbia for the year 1972-1983; increases are shown both in terms of dollars and percentages. In 1972, school district net operating budgets, $357 million; property taxes, $200 million; revenue from other sources, $157 million. By 1983, property taxes had risen from $200 million to $970 million for education purposes. That's an indication that Bill 7 has nothing to do with the problems of property tax and its increasing cost to local taxpayers and their ability to pay. It is quite clear that education costs are more and more being transferred to the local taxpayer and being removed from the provincial government. Bill 7 does nothing to try to eliminate that kind of direction. This document clearly indicate that property-owners continue to pay an increasing share of educational costs, That's not acceptable. If property and the taxes upon it paying for education is not an antiquated system, I don't know what is. Many reports, and particularly the McMath report, which I will go into at a later time, recommend that there be a reversal of the costs of education in British Columbia; that there should be a move toward the principle that 75 percent of educational costs be paid for by the provincial government and 25 percent by the local taxpayers. We have been going in the opposite direction in this province and we continue to do so under this current government. That is something that should be immediately rectified, immediately analyzed.

All during this debate today I've been saying that we need a system based upon the taxpayers' ability to pay municipal taxes. Bill 7 does nothing to help that predicament and that concern of thousands and thousands of municipal taxpayers. I have a graph before me that shows an increasingly large share of school district net operating costs has been passed on to property-owners over the past decade. The steady shift of education costs onto property owners has allowed the government to reduce its contributions from other revenue sources. Not only, as I was saying earlier, is this government removing itself from the responsibility of helping local municipal councils in terms of revenue-sharing and paying for essential services, they are also removing themselves more and more from paying for educational costs in the province of British Columbia. All Bill 7 does is allow various people,

[ Page 685 ]

allow municipalities, to shift around that kind of system. It does nothing to really start to resolve the municipal tax system. Many people have been saying for 100 years that it needs revamping and that we need a new system of taxation for municipal purposes.

[5:30]

[Mr. Strachan in the chair.]

Now, Mr. Speaker, let me give you an indication. In 1976 58.5 percent of educational costs were borne by the property owner. In 1978, that had risen to 61.2 percent; in 1980, to 63 percent; in 1982, to 67.4 percent; in 1983, to just over 70 percent, coming from the property taxpayer. That goes against all the commissions, reports and studies done over time that educational and other municipal costs should not be the responsibility of the real estate taxpayer at the local level, but should be more and more the responsibility of the provincial government, with its ability to collect far more revenue than the municipalities or the school boards can do. There is slowly but surely a move to dump the costs of municipal governments and school boards directly on the backs of the local taxpayer. If there was ever a time, to use the phrase coined by this government, "to take government off the backs of the people," it's a time to say, "take property taxes and their escalation off the backs of the people and introduce a system based upon the ability to pay, not the unearned wealth syndrome."

[Mr. Speaker in the chair.]

I won't go into the various other graphs how business bears the brunt of tax increases. I won't do that today, but I will give you the conclusions of this report....

Interjection.

MR. BLENCOE: Oh, were you going to do that? You can do it anyway.

Let me give you the conclusions of this report.

Interjection.

MR. BLENCOE: No, no, I don't want to read the whole thing. I'll do it another day.

Here are the conclusions. Number 1: "In British Columbia, spiralling property taxes are more attributable to government taxation policy than rising education costs." Without going into all the graphs and statistics, they have it here to present their case.

Number 2: "Centralized control of education increases costs. An example of this is in Quebec, where per-pupil costs have soared far beyond the Canadian average since the provincial government assumed financial responsibility."

Number 3: "A system of property taxation that taxes business and industry" — non-voters, by the way — "differently than residential property-owners produces an unfair burden on the commercial sector." That's the sector this government says it's in tune with and wants to help out, but in its very policies is hurting beyond belief. In Bill 7 it has to introduce exemptions and special privileges for those property-owners, because in its taxation system it's hurting them; so it has to introduce, in another bill, ways to help them out.

There are so many conflicts in the various pieces of legislation introduced by this government that it really calls upon the government to take the opportunity to listen to the words and the wisdom of the B.C. School Trustees' Association, the UBCM and other members of municipalities, and to really reconsider your modus operandi and your legislative timetable. The government has the opportunity, I believe, to enter into a process of consensus with those to be affected by the various pieces of legislation, particularly Bill 7.

Taxation has all sorts of implications for hundreds of public- and private-interest groups, and those kinds of concerns should be discussed in an atmosphere of non-confrontation, rather than bringing in the bill and forcing the opposition to try to get this government to enter into the consensus kind of deliberation. We're asking this government to enter into this process on behalf of the people of British Columbia.

Number 4: "Accountability for taxation decisions is best guaranteed when the power of property taxation rests with local government and when the same taxation decisions are applied to businesses and voters." Bill 7 does not do that.

Number 5: "The level of business property taxes will increase even further unless local accountability is restored.

Number 6: "Both the business community and school boards have been distracted by the myth that rising property taxes are related to education costs. Property taxes have risen excessively because of government taxation policy."

Number 7: "In the midst of the confusion over rising education costs and rising property taxes, two important government tax policies have been made: (a) the business property tax resource has been seized by government in order to establish a reliable revenue source which is unrelated to economic cycles and downturns in revenue from corporate income tax; and (b) businesses can be taxed without fear of losing votes."

Those are important conclusions given by the school trustees' association, and I would urge this government in its deliberations over any taxation system, whether it be property tax or income tax, to seriously meet with such organizations to try to achieve some consensus on the best way to introduce a fair and equitable tax system for school purposes.

At this time I'd like to — I haven't done this so far in this debate.... Oh, the Premier's here! I'd like to give an insight into what others are saying about these particular bills on taxation. It's important to mention what is being said in local newspapers and editorials about taxation systems. They are a measure of the concern over actions by government, and I would just like to go through some of them. Some of the members may not know that even the variable mill rate and this taxation change has been written about, and there are some concerns. One of the headlines in the Vancouver Sun earlier this year called this bill: "Quick Fix After Socred Bungling." Quite true. They know very well they're doing very little to alleviate the increasing property taxes at the local level. What they're doing is pulling out of having a responsibility to ensure that there is a fair and equitable system for taxation at the municipal level.

Let me give you some quotations from this article in the Vancouver Sun: "The Social Credit government must have had something it didn't want to talk about, since it couldn't bring itself to haul the Legislature into session for a few days and pass at least one piece of legislation to help save its skin in this election, We know they talked about this particular legislation, but now they're bringing it into effect retroactively." They seem to be doing that with many of the changes in government these days. The article continues: "It's difficult to imagine anything more likely to generate low-grade

[ Page 686 ]

irritation among tax-paying voters than the government's failure to give municipalities a more equitable taxing system." That's the long-term goal: a more equitable taxing system at the municipal level. That should be your goal. If you believe you are sound managers of money and have at heart the financial concerns of British Columbians, this government will take it upon itself to bring in a municipal tax system that is equitable and fair and based upon the local taxpayers' ability to pay.

[5:45]

The Sun goes on: "The differential rate that they're introducing would allow municipalities to vary the tax burden that falls on different classes of property. It is a tool they could use to soften tax increases that accompany a sudden rise in the market value of any class of property." But, you see, that's a band-aid. The fact that you base your taxation system on those sudden rises in the marketplace in real estate is so unscientific. If we don't have the ability in 1983 to develop a taxation system for municipal purposes based upon the ability to pay, we might as well pack our bags and go home. There is the ability there. There's certainly the demand for that to be done from taxpayers at the municipal level. Many of them saw their taxes rise because some people were speculating in the real estate market and forcing the assessments way up, and consequently the taxes way up. It's time to introduce a system that avoids that kind of unscientific basis for municipal taxes.

Interjections.

MR. BLENCOE: Oh, no. I couldn't do that.

MR. LAUK: The only ones listening to your speech are the Mounties up there.

MR. ROSE: They find it arresting.

MR. BLENCOE: Very good!

Mr. Speaker, I'm being interrupted by....

MR. LEA: The far right on your left.

MR. BLENCOE: Mr. Speaker, I'm going to go on to inform the members of the insights given by the Vancouver Sun on this particular piece of legislation. It says: "Municipalities have been promised a differential rate, but at the time of this writing have not been given the legislation that allows them to use it." We now have legislation before us, but we have none of the regulations that will be used to ensure its enforcement. It's those regulations that are of more concern to those who will have to try to utilize this piece of legislation.

MRS. JOHNSTON: Trust us.

MR. BLENCOE: I keep hearing those words: "Trust us. Have faith." The people of British Columbia voted for this government, but they were not told what was going to happen, and I don't think they've got much faith left any more. I think they are really wondering where this government is going to take them, because they've got legislation in this House that they were not told about during the election.

MRS. JOHNSTON: Do some work.

MR. BLENCOE: Oh, we're doing work, Madam Member. It's very important that you recognize that what you're introducing really has nothing to do with trying to resolve the property tax problems at the local level. I think that it's most important that you recognize that.

AN HON. MEMBER: Give everyone a free ride.

MR. BLENCOE: Well, no free ride, but if you are serious about resolving the problems of the municipal tax system, this government will undertake to take a look at the many reports that have said that the provincial government should be serious about trying to introduce a municipal system that is based upon the ability to pay — equity in the taxation system, which we all believe in, I hope.

I said earlier that I wanted to talk a little bit about the McMath report. Unfortunately the Minister of Finance (Hon. Mr. Curtis) has left; he chuckled as if he knows what the McMath report is about. The McMath report was written on behalf of the New Democratic government, and the preliminary report was brought down on July 30, 1976. It was the Commission of Inquiry on Property Assessment and Taxation. Unfortunately the current government has not, in its wisdom, used its analyses or made any moves to introduce some of its sound recommendations. I will start to give the members of this government a summary of some of those recommendations of the McMath report. They haven't been talked about for some time, but I think they are useful recommendations and useful things to consider.

AN HON. MEMBER: The member for Oak Bay-Gordon Head (Hon. Mr. Smith) endorsed those.

MR. BLENCOE: The member for Oak Bay-Gordon Head endorsed these? Is that right? Well, that's interesting.

AN HON. MEMBER: McMath was a pinko!

MR. BLENCOE: Oh, there we go. Everybody who disagrees with this government is automatically a pinko. That's a marvellous way of dealing with people's views and thoughts and ideas about what's happening in this province. If they disagree with you they're traitors, that's what they are. This government is a traitor to the Canadian way of life. That's what you're doing: you have given up the Canadian way of life. If this government continues to accuse everybody who disagrees with them of being a pinko or a traitor.... Well, there are thousands and thousands of British Columbians who are giving you a message.

Take a look at the Goldfarb report. It's telling you quite clearly that you're on the wrong course. You have gone way beyond the mandate that you were given by the people of British Columbia on May 5.

1 was trying to provide the members across the way with a summary of the recommendations of the McMath report. I would like to try to start that today, if possible. The first recommendation was that "the provincial government should consider committing itself publicly to paying 75 percent of the current and capital cost of the public school system as a whole in British Columbia within a period of five years. Equalization grants would continue to be needed so that the share paid by the provincial government would continue to vary substantially from school district to school district." That's a very important recommendation. This government

[ Page 687 ]

has done nothing in that area and, of course, as a consequence the local taxpayer in the province of British Columbia is continuing to carry a heavier load in terms of education costs in this province.

Interjections.

MR. BLENCOE: I'm trying to tell the government some of the recommendations in the McMath report. I know they don't want to hear about it, but it is considered to be a very good document in terms of....

SOME HON. MEMBERS: We want to hear it.

MR. BLENCOE: You want to hear it. Well, that's good. I will go on and try to give you some further recommendations.

They recommended that "the Department of Municipal Affairs have a study made of a value-added tax, such as the type described in this report, as a possible replacement for the property tax on landlord and tenant machinery and equipment, and for the municipal business tax." That's an important recommendation, but it hasn't been done. They recommended that "the government should continue to present the policy of not allowing landlord and tenant machinery to be taxed for municipal and regional district purposes until it has decided whether to replace the tax on these assets by a value added tax, or by a business tax with a greater yield than the present business tax in the province as a whole." Nothing has been done with that one.

Interjection.

MR. BLENCOE: He's waiting for me to go back to the principles under constitutional democracy in terms of taxation. I haven't had time to go back to that yet, but I'll get back to that later on.

The McMath report recommended that throughout British Columbia improvements as well as land be taxed at 100 percent of assessed value. They also recommended that:

"...the provincial government raise for future discussions with the federal Minister of Finance the provisions of the Municipal Grants Act, with the intention of reviewing the exemptions and removing any provisions which have had the effect of enabling Crown corporations to give grants on a less generous basis than the federal government itself. Beyond this, insofar as possible, grants in lieu of taxes on property owned by the federal government or federal Crown corporations should be provided on the same basis as private businesses are taxed. This would specifically apply not only to the National Harbours Board, but also to the Fraser River Harbour Commission, the Nanaimo Harbour Commission, the North Fraser Harbour Commission and the Port Alberni Harbour Commission, all of which operate under the federal Harbour Commissions Act."

These are important recommendations, Mr. Speaker, and I'm hoping that this government, in its term of office, will consider this along with other things that I have suggested today. If they only do 10 percent of the things I've suggested today, we will start to work towards a fair and equitable taxation system for local government, which all British Columbians, if you were to do a poll today, would support — a taxation system based upon the ability to pay. They would support that. Maybe you should get Mr. Goldfarb to do that in his next poll. That's what you should be moving toward.

In recommendation 6, they recommended that the government give consideration....

MR. SPEAKER: The Chair recognizes, mercifully, the member for New Westminster.

MR. COCKE: Mr. Speaker, I draw your attention to the clock.

MR. SPEAKER: My attention having been drawn to the clock, I recognize the government House Leader.

HON. MR. GARDOM: I move adjournment of the debate until the next sitting of the House.

Motion approved.

Hon Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:01 p.m.