[ Page 1103 ]

CONTENTS

Routine Proceedings

Oral Questions

McKim Advertising contracts. Mr. Cocke –– 1103

Conservative party's booth at PNE. Mr. Macdonald –– 1103

Use of government aircraft. Mr. Passarell –– 1103

Government loans to BCR. Mr. Lea –– 1104

Privatization of motor vehicle branch. Mr. Passarell –– 1104

Crofton-Vesuvius ferry. Mrs. Wallace –– 1104

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

Mr. Blencoe –– 1105

MONDAY, AUGUST 29, 1983

The House met at 2:05 p.m.

Prayers.

MR. REYNOLDS: Mr. Speaker, in your gallery this afternoon is a friend of mine from Richmond, B.C., and I'd like the House to make him welcome. He's Mr. Gary Baldwin, the president of Deltaire Industries in Richmond.

HON. MR. RICHMOND: In the members'gallery today are my brother-in-law, Mr. Bruce Simpson, his wife Brenda and their son Cameron, all of Calgary, and Brenda's mother, Mrs. March of Vancouver. I'd ask the House to please make them welcome.

MR. PASSARELL: Mr. Speaker, in your gallery today are two ladies from Hyder, Alaska, who have served the public very well: Rosemary and Colleen. I hope the House would pay them due today.

MR. SPEAKER: The member for Atlin continues.

MR. PASSARELL: Mr. Speaker, I missed the most important person today. In your gallery is the most important woman in my life — taking a line from the hon. member here. Visiting today is my mother. I hope the House gives her a good due.

Oral Questions

McKIM ADVERTISING CONTRACTS

MR. COCKE: Mr. Speaker, I'd like to ask the Provincial Secretary a question. Has the Provincial Secretary now determined whether McKim Advertising remains in substantial control of the government's $20 million advertising fund, and that they remain as agent of record?

HON. MR. CHABOT: The answer is no.

MR. COCKE: Such total incompetence.

Mr. Speaker, has the government decided whether McKim has a role in the government's...?

Interjection.

MR. SPEAKER: Order, please.

MR. COCKE: If you want to ask me a question, stand up and ask.

Has the government decided whether McKim has a role in the latest exercise in spending taxpayers' dollars to prop up the government's fading image?

MR. SPEAKER: Hon. members, I commend to all of you Beauchesne's fifth edition, page 359, subsection (1), about argumentation and debate.

MR. COCKE: Is McKim the agent of record in the new advertising program designed to sell the government's budget and legislative program for this session — the one announced by the Premier, which he hasn't told you about yet?

HON. MR. CHABOT: I've taken the first question as notice. If I determine that they're an agent of record, then I'll be able to answer the question. Until such time as I have found it out, it is very difficult for me to identify for the member as to whether they'll be involved. Needless to say, if they do become the agent of record or are the agent of record, then they'll have some involvement. If they have no involvement their contractual arrangement should be terminated. In the meantime I'll attempt at the very earliest opportunity to find out for the member whether they are an agent of record for the Ministry of Provincial Secretary and Government Services.

MR. COCKE: Just one more question for the minister. Are you truly the Provincial Secretary of the province of British Columbia?

CONSERVATIVE PARTY'S BOOTH AT PNE

MR. MACDONALD: I have a question for the Minister of Intergovernmental Relations. The Social Credit Party has always taken space for a booth at the PNE, but this year, after reserving the space, they transferred their lease over to the Conservative Party of Canada, although it is still plastered with Socred-type advertising. When did you decide to make arrangements to transfer your space at the PNE to the Conservative Party of Canada?

HON. MR. GARDOM: I'm afraid I'm not an expert in booths at the PNE, but if the hon. member would like to put a wager on the outcome of the election today, I'd be happy to take it from him.

MR. MACDONALD: I have another question for the minister. Oh, he's running and hiding. He's an expert at jumping parties if not at answering questions.

My second question to the Minister of Intergovernmental Relations, who mentions the by-election, is: is the transfer of the lease made in prospect of that by-election in Mission-Port Moody? Are you playing footsie with Mulroney and is Mulroney playing footsie with you? You know the answer. Come on!

[2:15]

HON. MR. GARDOM: The last person I played footsie with was my wife.

MR. LEA: Does she know?

HON. MR. GARDOM: I hope so.

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL: I have a question for the Minister of Transportation and Highways. In view of the fact that there have been no government aircraft logs tabled in this House for the last two years, has the minister decided to table the recent aircraft logs?

HON. A. FRASER: Logs were filed here about a year ago and there are more to come.

MR. PASSARELL: I have a question for the Minister of Intergovernmental Relations. How many...?

[ Page 1104 ]

Interjection.

MR. PASSARELL: Oh, that! No wonder this government is in such a shambles, eating that stuff all day long.

How many trips, Mr. Minister, have you taken on government aircraft in the last two weeks?

HON. MR. GARDOM: I'll have to take that as notice.

MR. PASSARELL: To the same minister: does the minister use the government aircraft to commute from his residence in the lower mainland to the Legislature in Victoria?

HON. MR. GARDOM: I use the government aircraft to commute from the city of Vancouver and from the great riding of Vancouver–Point Grey to Victoria.

MR. PASSARELL: To the Minister of Health: in view of the fact the government has embarked on a restraint program, could the Minister of Health give the Legislature an answer on how many times he has taken the government aircraft in the last two weeks?

HON. MR. NIELSEN: Well, I will have to take the question as notice, to be precise. I don't keep count.

MR. PASSARELL: We are really hitting well with these ministers today. A question to the Minister of Energy, Mines and Petroleum Resources: in view of the restraint program that the government has embarked upon, can the minister explain how many times he has been on the government aircraft in the last two weeks?

HON. MR. ROGERS: I don't think I could explain how many times; I might be able to tell the member how many times. The answer is several. However, in order to give you a precise answer I will check my records and see how many times I have made the trip and bring an answer back.

GOVERNMENT LOANS TO BCR

MR. LEA: To the Minister of Finance. When the northeast coal project was announced it was announced by the government as pay-as-you-go. Circumstances changed and there were short-term borrowings that had to be made by the BCR in order to carry out their business. At the end of the year, when the BCR wasn't able — or we assume wasn't able — to pay those short-term loans off, grants were given by the government to the BCR that they used to pay off the shortterm loans. Last month the provincial cabinet approved long-term borrowing of $450 million for the BCR. Can the minister tell me whether or not those grants that were paid to the BCR to pay off the short-term loans will be paid back to the British Columbia treasury by the BCR out of the long-term borrowings?

HON. MR. CURTIS: The question is sufficiently convoluted that I would like to take it as notice in order that I may be very precise in the answer to the member for Prince Rupert.

PRIVATIZATION OF MOTOR VEHICLE BRANCH

MR. PASSARELL: A question to the Minister of Highways. The motor vehicle branch at Ganges has been privatized by Salt Spring Insurance Agencies, a company known for its active support for the Social Credit member for Saanich and the Islands (Hon. Mr. Curtis). Can you explain why you have decided to Tozerize the motor vehicle branch in this way?

HON. A. FRASER: Mr. Speaker, I will have to ask the member to repeat the question.

MR. PASSARELL: I will speak very slowly, Mr. Speaker. The motor vehicle branch at Ganges has been privatized by a company called Salt Spring Insurance Agencies, a company that is known for its active support of the Social Credit member for Saanich and the Islands. The question, Mr. Minister, is: why have you decided to Tozerize the motor vehicle branch system in this way?

HON. A. FRASER: Mr. Speaker, to the member for Atlin, it is the policy of government to privatize the motor vehicle branch for licensing purposes, and that's what is going on. I don't know what else you're referring to.

MR. PASSARELL: I have another question, Mr. Speaker, to the same minister. Why has the minister awarded several motor vehicle branch franchises to prominent Socreds without competition bids being offered?

HON. A. FRASER: Again he makes accusations with a question, Mr. Speaker. It is my information that in every community people are covered by the motor vehicle people to see whether they're adequate to carry out the duties of licensing and so on.

MR. PASSARELL: Will the minister undertake to review the practice of awarding motor vehicle branch franchises as political favours, and has he decided to develop guidelines for competitive proposals and bids?

MR. SPEAKER: The question is out of order.

CROFTON-VESUVIUS FERRY

MRS. WALLACE: Mr. Speaker, my question is to the Minister of Transportation and Highways as well, who is responsible for B.C. Ferries. On Thursday in the Legislature he indicated that he would try to have an answer for me today relative to the Crofton ferry — the timing of the rebuild of the wharfing facilities and also whether he was prepared to put on an alternative form of transportation as was done before when that wharf was out. I wonder if he has an answer for me.

HON. A. FRASER: Mr. Speaker, to the member, we will be putting on a water-taxi service, and it hasn't been resolved about rebuilding the dock.

MRS. WALLACE: Can you tell me when the water taxi will begin, and what the fare will be? Will it be comparable to the fee on the ferries? Because what we have now is a $10 return-trip fare, which is prohibitive for commuters.

[ Page 1105 ]

HON. A. FRASER: Going back to the member for Atlin (Mr. Passarell), I believe they're going out today for competitive bidding for the taxi, so I don't think it'll be very long. Hopefully it'll be settled within a week.

MRS. WALLACE: My question is really related to what the fare of that taxi will be. Can you tell me whether or not you're prepared to ensure that commuters, particularly, have the same rate that is available to them on the ferry? It's very difficult when you have to work in that area if you have to pay that extremely high rate. The existing taxi service was forced to charge $5 in order to make their expenses, so I certainly have some concerns about that. Can the minister assure the House that that will not happen with the taxi service that he's talking about?

HON. A. FRASER: I didn't specifically ask that. B.C. Ferries is putting it out for tender, and I assume that it will be at the same rate to the people using the service as it would be if they used the ferry.

MRS. WALLACE: A final question on the same issue: does the fact that you're going for a taxi indicate that you are perhaps not going to rebuild that facility at Vesuvius? Is that what I'm reading into what you're telling me? Have you decided not to rebuild the wharfing facilities at Vesuvius?

HON. A. FRASER: No decision has been made.

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: Adjourned debate on second reading of Bill 7.

MR. BARRETT: Mr. Speaker, last week I raised a point of order on the question of standing orders 82 and 87. Since the House is no longer operating in the manner of having the Whips arrange ahead of time the order of bills, it's impossible for the official opposition to know whether or not the Clerks have fulfilled the proper requirements as instructed under the standing orders. If the Whip system were working, Mr. Speaker, we would have no need to bring this to your attention, but I wish to be assured that both standing orders 82 and 87 are fully complied with in the calling of Bill 7 by the House Leader.

MR. SPEAKER: Hon. member, neither of the standing orders has any effect on the calling of bills by the House Leader.

MR. BARRETT: My point is that....

MR. SPEAKER: A further point?

MR. BARRETT: Yes. Normally standing orders 82 and 87 would not be questioned. However, there is absolutely no communication between the government and the opposition in terms of the order of bills, other than their popping out of a hat, without any notice. The only reason I raise this, Mr. Speaker, is to be assured by the Chair that indeed all of those standing orders have been followed, regardless of what bill is called.

MR. SPEAKER: Hon. member, notwithstanding previous points of order that have dealt with this issue, I must advise again that undertakings by the Whips are not the business of the House, nor are they to be discussed in the House. I would hope that such arrangements could be conducted outside the House. Such discussion will not be permitted on the floor of the Legislature.

MR. BARRETT: In speaking to standing orders 82 and 87, I appreciate your admonition not to raise that issue; I no longer will. I just want to be assured by the Chair that the Clerks, regardless of the random calling of bills, are following standing orders 82 and 87.

MR. SPEAKER: Thank you, hon. member.

MR. BARRETT: Are you instructing me that they have been followed, Mr. Speaker?

MR. SPEAKER: I'm instructing, hon. member, that the Chair has said that the reference by the Leader of the Opposition has no effect on the calling of bills.

MR. BARRETT: Thank you, Mr. Speaker. I had assumed that, but I wanted to be sure.

MR. SPEAKER: Adjourned debate on Bill 7.

PROPERTY TAX REFORM ACT (No.1), 1983
(continued)

MR. BLENCOE: It's a pleasure to return to debate on Bill 7. It's been a number of weeks since the House had the opportunity to consider this particular aspect of reform of taxation at the municipal level. We seem to have jumped all over the map in the last few weeks. The people of British Columbia are certainly wondering what this government is doing with this legislation and its budget. The government has the budget debate just about wrapped up.

[Mr. Strachan in the chair.]

AN. HON. MEMBER: Speak to the bill.

MR. BLENCOE: I am speaking to the bill, and the intent and principles behind what's happening in this House. This government had its budget debate virtually wrapped up when suddenly, for whatever reason, they have flipped back to considering bills again, of which Bill 7 happens to be one of the numerous pieces of legislation before us in this House.

[2:30]

Interjections.

MR. BLENCOE: Mr. Speaker, perhaps you could give me a little protection down at this end of the chamber.

First, I'd like to inform the House and our guests in the chamber exactly what is happening here. Bill 7 has been called this afternoon, without the official opposition being informed at all.

[ Page 1106 ]

DEPUTY SPEAKER: Hon. member, that matter is not before the House now.

MR. BLENCOE: Well, Mr. Speaker, I think it's very important that that be....

DEPUTY SPEAKER: I will advise the hon. member that....

MR. BLENCOE: The public have a right to know, Mr. Speaker.

[Deputy Speaker rose.]

DEPUTY SPEAKER: I will advise the hon. member to take his seat while I'm standing. We are on a discussion of Bill 7. The principle of that bill must be discussed. Those are our guidelines. House business is not within our guidelines. Please proceed.

[Deputy Speaker resumed his seat.]

MR. BLENCOE: I have to say that indeed....

Interjection.

MR. BLENCOE: Mr. Speaker, I need some protection again from the member over there.

I'm trying to tell you what is happening with this government and this legislation. It's not even telling the official opposition what they want to do in this House. That's a gross misrepresentation of the democratic system.

DEPUTY SPEAKER: Hon. member, I will advise you once again that you should be relevant to the bill before us; otherwise I will have no choice except to have you discontinue your speech. The bill before us is the Property Tax Reform Act, and it's quite clear in its principle. I'm sure the member has the resources available to him to address that bill.

MR. HANSON: On a point of order, Mr. Speaker, I think it is entirely relevant to note for the House the readiness at which the opposition has given.... If you would please attend to that little cadre of noisemakers and chirpers down in the corner, who constantly interfere with the speakers on this side of the House, we would appreciate that very much.

DEPUTY SPEAKER: That will be done, I can assure you.

Interjections.

DEPUTY SPEAKER: Order, please.

MR. BLENCOE: Perhaps, Mr. Speaker, if we are to talk about innuendo and attacks, and try to bring the official opposition to order, perhaps you could see fit to bring certain members of the government to order, with their nasty remarks and personal insults to members of the House. Perhaps you could play fair on that particular issue as well.

It's most unfortunate, I have to say....

DEPUTY SPEAKER: One moment, please. The hon. member for Prince Rupert has risen on a point of order.

MR. LEA: Mr. Speaker, I'd like to go back and get some clarification on your ruling of a few moments ago on the relevancy of debate. As I understand it, you're saying that any agreement between the two sides — Social Credit and the New Democratic Party — is irrelevant to any debate we're having in the House.

DEPUTY SPEAKER: It certainly is not relevant to Bill 7.

MR. LEA: Not relevant to Bill 7? Would that make it irrelevant to every other bill that comes up?

DEPUTY SPEAKER: Hon. member, that would be a decision of the Chair at the time. I hardly see how it could be, though.

MR. BLENCOE: Again, Mr. Speaker, it's most unfortunate that the government didn't see fit to allow us to prepare for today's particular debate. However, we are now prepared to continue the debate on Bill 7.

Interjection.

MR. BLENCOE: Mr. Speaker, perhaps you could bring that member to order.

MR. HANSON: On a point of order, Mr. Speaker, I find the remarks of the Minister of Industry and Small Business Development (Hon. Mr. Phillips) offensive and ask that he withdraw them.

DEPUTY SPEAKER: That point of order is well taken. If the minister has offended any hon. member or his motives in this House, will the minister please withdraw.

HON. MR. PHILLIPS: Certainly, Mr. Speaker. I would in no way ever want to offend either of the members representing the great city of Victoria.

DEPUTY SPEAKER: The minister withdraws. Thank you very much.

MR. BLENCOE: Before I get into some new particular issue....

Interjections.

MR. BLENCOE: Mr. Speaker, it's becoming very difficult today even to start the debate. A number of the Socred members continue to interrupt.

AN HON. MEMBER: It's been that way all session, so what's the difference?

MR. BLENCOE: They're having a rough time in this government, a rough time in this province. They know the people are against them and they're going to try to stop the opposition. That's what they're up to. The people of British Columbia know the game you're playing. They know you've declared war on the handicapped, on senior citizens and

[ Page 1107 ]

renters, and now you're going to try to embarrass the official opposition as it attempts to bring you to your senses. Introduce legislation that is fitting for 1983 in a progressive and civilized society, not one returning to the Victorian or Edwardian era. In speaking to Bill 7, or to any particular bill that is part of this budget, the opposition is determined to try to convince this government that it has gone on a mission that most British Columbians do not accept and find unpalatable, and that they wish you to reconsider your actions as quickly as possible.

It would be a magnanimous and indeed a friendly gesture to the people of British Columbia if this government, after nearly two and a half months....

Interjections.

MR. BLENCOE: Mr. Speaker, protect me. Being a new member of this House, I'm not well-steeped in fancy tactics; I just try to talk to the bills as effectively as I can, bringing forth the issues. We have these long-in-the-tooth Socreds over there who try to stop a young guy from doing his job for the official opposition, who try to stall him in his attempts to speak to Bill 7.

HON. MR. PHILLIPS: Get your hands out of your pockets. You're worse than Charlie.

MR. NICOLSON: On a point of order, Mr. Speaker, I draw your attention to standing order 17, which says: "When a member is speaking, no member shall pass between him and the Chair, nor interrupt him except to raise a point of order." There have been numerous interruptions and I would suggest with respect that they have been unilateral. They have been neither returned nor invited. I would think the obligation is very heavily upon members not to interrupt during this debate,

DEPUTY SPEAKER: The point of order is well taken. I'm sure if the member addresses the bill, we can continue with parliamentary debate.

MR. BLENCOE: I was indeed trying to get to Bill 7, but every time I try to enter into some logical debate, I have some objection from the other side.

Bill 7 is part of the package that this provincial government brought down some months ago. For those who don't recall Bill 7, it is about property tax at the local level. It introduces a variable mill rate for municipal purposes. It's been some weeks since we've had this particular debate. I went over some particular theories and commissioned reports from other jurisdictions, trying to show this government that what they're doing is really no great panacea for the local taxpayer. I'm trying to recall, for those government members across, where we left off with Bill 7 last time. To remind them, we said on this side of the House that in terms of a bandaid or a minor reform of the property tax system at the local level, indeed, that's all Bill 7 is: a minor band-aid.

To some degree, unfortunately, the government is trying to give the impression in the province that it's a major undertaking in terms of resolving the taxation problems for local government, not only in terms of how government allocates their valuable resources, but that the local taxpayer will somehow, through Bill 7, save money. I remind my colleagues on the government side of the House that Bill 7 will do none of that.

Interjection.

MR. BLENCOE: I've already suggested it a number of times.

Interjection.

MR. BLENCOE: Well, if you had continued with the normal proceedings in this House we might indeed have got to some normal, logical debate in terms of the allocation of time for bills, Mr. House Leader. But we've been all over the place, as you know, and you've been one of the major reasons why we're there.

MR. REID: Let's put a few things to the vote — that will decide. Let's vote on something.

MRS. WALLACE: Let's vote on the budget.

MR. BLENCOE: We'd certainly like to vote on the budget.

Bill 7, Property Tax Reform Act (No. 1), 1983, very simply introduces a variable mill rate for municipal purposes. The variable mill rate does very little for municipalities in terms of trying to resolve their revenue shortfall problems. Indeed, Mr. Speaker, what Bill 7 and the accompanying Bill 12 — which doesn't come into effect until next year — do is make the job of running municipalities even more difficult, because at the same time the government is removing itself from trying to establish formulas for taxation purposes at the local level, it is saying to local government, "You choose your own poison in terms of taxation formulas and levels," and, at the same time, the provincial government is removing....

Interjection.

MR. BLENCOE: Mr. Speaker, it is most unfortunate that senior members of the government continue to be extremely rude in this House. Perhaps I should take my chair while they continue their discussion.

DEPUTY SPEAKER: Please proceed, hon. member.

MR. BLENCOE: What's happening with municipal government has to be of deep concern, I think, not only to the opposition but also to the government of the day. Their revenues are extremely short and their ability to create new taxation systems is virtually nil. They don't have the power to add on extra taxes whenever they wish to if they have a revenue shortfall. By law they cannot run a deficit, and that's probably one of the reasons why municipal government is probably the most efficient level of government in this country today, and is also probably why it's trusted the most. You look at the poll results when people answer the questions: "Which part of the government do you trust most?" and "Where do you think you get the most for your tax money?" The answer is municipal government.

[ Page 1108 ]

[2:45]

Yet this government, in its wisdom, not only introduces Bill 7, which removes itself more and more from the action of trying to establish formulas that are fair, but also the government, through its granting process, is cutting back its share of revenue to municipal and civic government. I refer to one particular move under this new minister: he's trying to say it's not a major shift in policy, but of course it's a major shift. This government has changed the formula in terms of the cost-sharing for underground services, sewers and storm drains. It's not something everyone gets particularly excited about, but I have to say, after serving at the municipal level for six years, that it's an extremely important part of the municipal infrastructure. If you abandon the underground services, the sewers and the storm drains because you have not enough money to fix them up, what happens is that you really hurt your infrastructure and your city operation beyond belief in the long term. We've only got to look at the United States and what's happening down there. Billions and billions of dollars are being faced by municipal operations because they put off maintaining and upgrading the basic municipal infrastructure.

I don't think a lot of people realize what this government is doing — although it has been reported well in some areas — in terms of hurting municipal operations and local taxpayers. This government has decided to reverse the formula in terms of the sharing for such underground services. The province used to pay approximately 75 percent and the municipality 25 percent. There are all sorts of health reasons why that sharing formula was well established and supported by all governments over the last number of years. This government has now reversed the formula. The local taxpayer will meet 75 percent, and 25 percent will be paid for by the provincial government, which has far greater sources of revenue than municipal government.

I have talked to a number of people in the municipal area on all political sides — Social Credit, Liberal, Conservative and New Democrat — and they all say that the deep implications of the funding or formula adjustment for municipalities could create real problems for municipal infrastructure in terms of underground services, roads, those sorts of things. In its wisdom the government is deciding slowly but surely to abandon its position as a partner with municipalities in ensuring that municipal operations are adequately and safely maintained. This is a major shift in government policy.

Mr. Speaker, it's been long-touted and supported by everyone — not in government, unfortunately — that we need the provincial government to play a far greater role in terms of cost-sharing for municipal operations. I won't get into the McMath report now; I will probably get into that a little later. But the McMath report on education costs, for instance, recommended 75 percent provincial government funding and 25 percent local taxpayer. Today we have virtually the reverse of that formula. More and more this government is transferring the load of essential services to the local taxpayer, who pays it through a property tax system that's archaic, unfair and has nothing to do with ability to pay, one that needs to be totally revamped and perhaps in time eliminated. We need a municipal tax system that's based upon the ability to pay, not on what some real estate fellow down the road says he might get for your house. To use that as the base upon which you pay your taxes is ridiculous and unscientific in 1983. We have in British Columbia and Canada — in fact, in the world — all the best minds on taxes and financial arrangements, on computer analysis and how to run financial programs, yet we continue to support a taxation system that was born 150 to 200 years ago. It has outlived its time and doesn't fit anymore.

Bill 7 adds another band-aid to the thousand already on that particular taxation system. My party and I have already said that we have no particular argument with the variable mill rate per se. We see it as a band-aid. But we do have some deep concerns with particular segments of this bill which I think the general public don't realize are there. The UBCM and other municipalities across this province are beginning to recognize that some things in Bill 7 have serious implications for the traditional autonomy enjoyed by local government. The minister knows that to which I refer, because he's been hearing from local government since he started introducing some of these pieces of legislation. Bill 9, which I won't talk about today, of course is giving him the most concern. I assume that in a few weeks at UBCM the minister will indeed hear the concerns again about particular pieces of legislation now before us.

I really wish the government, if it is serious about reforming the taxation system of local government, would undertake over the next year or so a major analysis of the intricacies and problems with the real property tax system, with the intention of introducing a new tax system for municipal operations, one that wherever possible is geared towards the concept of ability to pay, or is income-related. Our party has no argument with the view that indeed there may still be some aspects of the property tax system for local government, but I would suggest that that should be applied only to services directly related to property. On the other side, many services now provided by municipalities have nothing at all to do with property. Those services should not be paid for from property tax but in some way should be paid for by a system that relates more to the local taxpayers' income or ability to pay.

I know it's a major undertaking, a major jurisdictional fight, to say that in British Columbia the government is seriously interested in trying to help the beleaguered local taxpayer in the long term. I know it's a major chore, but commission after commission — and I went over some of them in the last part of this debate — have looked at this particular problem and have all admitted that the property tax system for the sixties, seventies and eighties is no longer appropriate for many services that are maintained by local government. Somehow, governments have not been able to take that bull by the horns and say: "With all the experts we have" — and there are good ones — "all the incredible expertise and money going out to pay them or keep them employed, we can't utilize that expertise in devising a municipal tax system that is fair, is just, has equity built into the system and meets the changing times in municipal operations."

That's the solution, and I've already suggested to the government — and will suggest it again this afternoon — that we, as part of the opposition, recognize that we cannot work out the intricacies of a new system like that over the floor or overnight or in a confrontational government-versus-opposition kind of atmosphere. What it's going to take is both sides, in the interests of all British Columbians, having the ability and the will to sit down together — a new concept, it might be, for this particular session: members of the opposition and members of the government, asking the right questions, as I mentioned the other day, about the taxation system we have,

[ Page 1109 ]

and saying: "In the interests of British Columbians, we are determined over the next year to really study all the evidence" — and it's there — "that indicates we have to bring in more than just a band-aid like Bill 7 or, later on, Bill 12, the Property Tax Reform Act (No. 2).

That's the way we should be going: problem-solving together. Maybe within the confines of a selection committee we could do some problem-solving on the property tax system, Mr. Speaker. What I'm suggesting may perhaps be novel in the province of British Columbia, but in other jurisdictions there are the standing committees or working committees of the House; they are something that's well accepted. I think if we collectively got together over this particular issue....

We'll take Bill 7 as the start, if you like. If we got together and tried for at least maybe an hour or two a week to forget that we have particular partisan views on a lot of issues, but in terms of the taxation system for municipal operations, what our goal should be is introducing once and for all a tax system that people understand, that is simple, just and fair, and that is based at least partially — or as close to it as possible — on the taxpayer's ability to pay....

I've talked about it in this House before, and I'm going to talk about it again today: in this particular riding there are thousands of people on fixed incomes, particularly senior citizens over 65 or slightly less, who currently still maintain their homes. Many of them are single; one or the other of the spouses has passed on. Of course, as you know, Mr. Speaker, when you are on a fixed income, pension or whatever, maintaining your single-family home can be extremely difficult. Some have managed to get the mortgage totally paid off; a lot haven't. I can say, having dealt with many of those taxpayers at the city of Victoria over the last six years — and certainly over the last two, as chairman of finance — virtually on a daily basis.... A day didn't go by that I didn't have delegations of senior citizens talking about how they were going to pay their property taxes, particularly a couple of years ago, which I am sure we all recall, as we saw the assessments go crazy and consequently taxes jumped on many properties.

It is my contention that when you reach retirement age and you have contributed to your community and to your country, you shouldn't have to be deeply concerned about the assessment on your property because what is happening in the real estate market may force that assessment so high, and in consequence taxes so high that you have to consider annually whether you will be in that home the following year.

[3:00]

That's not right. I think all of us in the House have an interest in that particular segment in our ridings. In this riding it is of deep concern. Two years ago when the assessments went up incredibly high some of the senior citizens did have to sell their homes. Our party's contention is that if this government is deeply concerned about the property tax system, and it's concerned about helping those who have retired and shouldn't have to fight the endurance fight that a certain member talked about last week, then they should introduce a system that ensures that those people on fixed income, particularly senior citizens, live their lives out knowing that their homes will not be taken from them because a particular real estate company decides to speculate down the street and gets a 100 percent increase in that property. The ripple effect affects everybody, and consequently that person on a fixed income, a senior citizen, would end up paying the same kind of taxes as those who are earning a regular salary.

[Mr. Pelton in the chair.]

Why should we subject our senior citizens to that kind of speculation and game-playing in property in this province? Why should it be that every time a house sells down the street, when they don't want to move, when they see it go up 20 or 30 or 40 percent, they wonder what that is going to mean for their taxes or their home when they only want to live out their days in their family home? That's the kind of system this government supports. That's the kind of people, those developers and ripoff artists, that this government got many thousands of dollars from in the campaign. That is one of the very reasons they will not make fundamental and radical changes in the property tax system in this province. They know that to do that they will have to control some of those fly-by-night people who flip property daily and see properties go up by 30 or 40 percent in one or two weeks. Who pays for that? We all do. It is a blight; it is unearned wealth; it's a syndrome of this system that this government supports that cannot be accepted in a modern democratic society any longer.

If you are to continue with a property tax system based on speculation, do not con the people of British Columbia that Bill 7 will resolve their tax problems. Don't con the people, because it won't. You still have in place a real estate property tax system about which for 100 or 150 years learned people from all walks of life and all financial institutions have been saying: "For heaven's sake, change it and gear it to what someone can afford to pay."

Let me give you an analogy. For most levels of government we have developed a taxation system that is reasonably fair. It's close to ability to pay, and we all refer to the income tax system. No one likes taxes; we all know that. But I think most British Columbians and most Canadians accept the fact that there are certain services, certain principles, certain ideals that we all have to share collectively and pay for collectively. Consequently we have an all-purpose tax system for provincial and federal purposes. But the nature of that taxation system is radically different from the one in place for municipal operations. We may not like paying it. Some may not pay enough, because they have various ways to escape income tax. We won't go into that today, but we know there are so many loopholes and that if you have enough money you can afford the fanciest lawyers and accountants in the world. Not only do individuals escape, but some of the biggest corporations also escape. We won't talk about those kinds of welfare burns. Generally speaking, that taxation system for provincial and federal purposes is reasonably fair and is geared to income.

Imagine deciding to move from that taxation system for, say, health purposes and deciding to pay for health on the basis of the real property tax system. How ludicrous, crazy! You can't do it. Why do it? Mr. Speaker, that's my point. There are many services being maintained by local government today that really have nothing to do with property at all anymore. That's why we really have to take a look at that system.

Last time, when I closed debate on this particular bill, I was talking about a very important aspect of costs the municipalities face. The background to what I said about half an hour ago is that municipal governments today are more and more facing very difficult revenue shortfalls. We all know that next year grants to municipalities will be cut quite significantly. They've already had various cuts in their storm-

[ Page 1110 ]

drain and sewer work. Municipalities and local officials are always very accountable and accessible to the concerns of the local taxpayer. Consequently they are trying to ensure that those property taxes are kept to a reasonable level. But that means that revenue to run the municipalities properly becomes shorter and shorter.

I was trying to give this government some indications last time of the particular problems that municipalities are having in paying for their operations. One of the major concerns is paying for police costs in municipal operations. Some years ago — July 1978 to be exact — a task force report on municipal policing costs in British Columbia was tabled and given to the provincial government policy board on policing costs. It was a very intricate and detailed report on policing problems and costs in the province of British Columbia, particularly municipal operations. The report was done because major municipalities today — if you take a look at their charts in terms of where their dollars go — are paying between 17 and 20 percent of all their revenue for police costs. It's close to, I think.... I don't know. I don't have the figures right at hand, but when you add up police and fire it comes very close to 30 to 35 percent of all revenue spent by municipalities — in major urban areas particularly. That's a drain of horrendous proportions on the municipal coffers. This report was an attempt to try to recommend to the provincial government of the day — the Social Credit government of the day.... It was a task force that tried to address those particular policing problems. It was an attempt to convince the provincial government that there should be some costsharing for municipal policing.

The municipalities' concern was that in these unfortunate times crime rates don't seem to be going down. There seem to be new types of crime that are taking more and more police time and costs. As a consequence, what municipalities are facing — I know certainly in the one I worked in for six years — is whether they will be able to pay for policing. Will they be able to ensure that safety standards are maintained? Will they be able to ensure the residents — particularly in urban ridings — that they are protected adequately and that the response time from police is satisfactory, quick and reasonable? There is deep concern now. You only have to talk to police chiefs and police board chairmen, who are beginning to think that they will not be able to maintain their operations as satisfactorily and as well as they have in the past because of dwindling revenues.

What it means is that the provincial government, if it's concerned about the safety of citizens in municipalities — particularly in those municipalities that pay 100 percent of their policing costs.... If the provincial government is serious about tax problems and why it introduces Bill 7 and such legislation, it has to tackle the problem of things like policing costs and those long-term problems. Otherwise municipalities will not be able to maintain their operations. It's simple. They won't have the dollars to do it. I'm not talking about adding hundreds of more policemen to the staff or more sophisticated machinery; I'm talking about maintaining their basic operations. If the Minister of Municipal Affairs is serious about being a good Municipal Affairs minister, he'll take on these particular kinds of problems. He'll try to tackle them. They've been around a long time, but they're going to have to be tackled. There should be a formula whereby the provincial government contributes funds to municipal operations for policing.

When I finished the debate on this particular bill last time, I was going through some of the particular sections of the task force report, and I will carry on a little bit with that to give you some of the thoughts of this very important report on policing costs.

The present arrangements for policing costs in British Columbia vary from no direct contribution by local residents toward policing — in areas under provincial contract — to total coverage of police costs by the local taxpayers in municipalities with their own police force. The major task of this task force was to consider alternative methods of cost-sharing that would distribute the policing cost burden on a more rational and equitable basis throughout the province. In considering alternative cost-sharing arrangements, we first examined the contributions of the three types of government and formed the following opinions.

Firstly, it is inequitable that taxpayers in unorganized territories and municipalities with less than 5,000 population do not contribute directly toward policing. Secondly, municipalities with RCMP contracts receive benefits from the federal government which are not available to those with their own force. The task force believes that municipalities with their own police force should receive assistance from senior levels of government. Thirdly, some municipalities incur greater police costs as a result of special problems which they experience. The task force believes that these municipalities should receive special assistance. Current municipal contributions for police protection place a strain on local taxpayers in municipalities responsible for their policing. Furthermore, the proportions of municipal expenditures going toward policing is increasing annually. I can vouch for that. It's something we really must pay attention to very quickly. The federal government is not a likely source for additional funding for policing costs; in fact, indications are that the federal government will play a diminishing role in municipal policing over the next few years. Last, there should be increased provincial involvement in municipal policing costs.

[3:15]

Let me reiterate: if this government is serious about local tax problems and local taxpayers, it cannot deal in isolation as it does in Bill 7 with the intricacies of running municipal and civic governments properly and efficiently. I've chosen policing as an example of where municipalities, who have to pay all police costs, are running into serious problems. Bill 7 does not resolve those kinds of problems. It does nothing at all; indeed, it is just a hollow piece of rhetoric with no basis for long-term solutions for tax problems at the local level. I go on with this very important document, which was done on behalf of this government in 1978:

"Increasing the provincial government's contribution would appear to be a logical way to shift a portion of the cost-sharing burden from the municipalities. However, before considering methods through which the province can share a greater portion of the costs, it is worthy to consider the reasons why the province should become involved in financing an increased percentage of the costs."

And I want to go through some of those: why this eminent and well-respected task force tried to convince the provincial government that if they were serious about municipal operations and their tax problems, then they must try and get involved in some of the cost-sharing for police operations. Otherwise, policing operations at the local level, particularly in the major urban areas....

[ Page 1111 ]

I know that slowly but surely municipal councils and police boards are going to have to admit to the public they will not be able to maintain the kind of police coverage, security and safeguards that they have in the past, because they just don't have the money. This provincial government will say: "Well, it's the municipal responsibility and they've got to bail themselves out." But that is not the case. The provincial government has a very important role in helping municipalities and ensuring that there are sufficient revenues and fair formulas so that the costs which are continuing to escalate, like policing costs, don't come totally from the local taxpayer and the property tax. This report was well accepted, I understand, but unfortunately there has been no action upon it by the current government.

Why should the province become involved in financing an increased percentage of the costs? First it would be consistent with the general trend of provinces assuming greater responsibility for services to people in areas such as health, welfare and education. The general trend is toward this area. In the city of Victoria, where we police the core area, what happens is that we're paying for policing far beyond the costs of some of our adjacent municipalities, because as you know, Mr. Speaker, downtown cores attract particular kinds of problems.

[Mr. Strachan in the chair.]

Interjection.

MR. BLENCOE: That was a nice comment. It's too bad the public can't hear some of the comments that are made on this floor. They would be really shocked, Mr. Speaker — they really would. It is most unfortunate. Personal insults and innuendo. This is not the right place for that sort of thing.

Secondly, the provincial government is able to use methods in addition to property tax to raise the necessary funds. That's a very important statement. Currently municipalities are having to escalate property taxes to pay for things like policing. The provincial government has more avenues they can explore for acquiring additional revenues than municipalities have at their disposal. Currently, because municipalities tax solely on the basis of property, it can be argued that this does not equitably distribute the cost. It's a very fair and accurate statement.

Thirdly, a very small amount of police members' time is spent on the enforcement of municipal bylaws. Boy, is that ever true, If police forces were actually allowed to administer some of the municipal bylaws, we might not have some of the little problems that irritate local residents so much. However, we all know that our local police forces administer many laws on behalf of senior government at great expense, and many of those are provincial laws. Yet in the province of British Columbia we do not get any direct provincial funding for police costs.

That's why I believe that Bill 7 — although on the surface a variable mill rate may be a small improvement — is a small band-aid in the overall system. In terms of the long-term solutions it is indeed only a band-aid. In fact, many municipalities pay the cost of hiring bylaw-enforcement officers and commissionaires to do their own bylaw enforcement. They don't have the police officers to do it, because they are administering and taking care of other kinds of activities. Yet they pay those costs totally on their own. Much police time is spent in the enforcement of provincial and federal statutes.

As costs for policing escalate and absorb a greater portion of total municipal expenditures, it is appropriate for the provincial government to recognize its responsibility to assume a fair share of this expense.

If this government, in the next three or four years of its term, is going to bring in bills like Bill 7, which won't really do much in terms of the escalation of costs of municipalities in meeting such things as policing costs.... If the government is serious about helping the beleaguered local taxpayer, it will look at cost-sharing formulas for municipalities that pay all the policing costs in their jurisdiction. Fortunately, since 1974 the provincial government, through the B.C. Police Commission, has had the direct authority to set standards and regulations, many of which may have costing implications. I know that they have. To give you an example, one that's already in effect and is a simple one that people recognize, all police cars in all municipalities are now going to be the same colour — blue with white trim. That instruction was, I guess, part of trying to have a uniform image for all police forces, but there was some cost to the local taxpayer.

MR. MOWAT: Provincial identity.

MR. BLENCOE: Yes, provincial identity.

MR. MOWAT: You've put a lot of work into this speech. I can't believe that none of your colleagues will come and listen to you.

MR. BLENCOE: That's called having confidence. They're preparing their notes on some kind of bill that you may call next time, without notification to the opposition.

MR. MOWAT: They should have the courtesy to listen to you, though.

MR. BLENCOE: Oh, they're listening.

That member talks about a provincial image. That's quite correct; they're trying to create a provincial police force.

MR. MOWAT: Provincial identity, not image.

MR. BLENCOE: All right, provincial identity. They instructed that all police cars be painted the same — a uniform approach. I have to inform that member that there is no provincial funding for trying to create that provincial identity.

That's what the task force is trying to say. If this government is serious about taxation problems, things like Bill 7 and the implications of the property tax, if the government is serious about calling things tax reform acts, then you've got to pay attention to the nitty-gritty of municipal operations, to where the costs are, and to the lack of provincial support for maintaining them.

Finally, the sociological factors that contribute to crime are not generally influenced by municipal boundaries. The causes of crime are therefore not usually a direct result of conditions in one municipality as opposed to another. Criminals tend to be highly mobile, showing little concern for local borders. While it's logical that each municipality should pay a share of policing costs, communities are no longer isolated from one another. Thus it can be argued that the province should take responsibility for a portion of the policing costs

[ Page 1112 ]

generated by a highly mobile, interdependent population. Yet many municipalities continue to have to fund 100 percent of their policing costs. The nature of British Columbia and the pattern of criminal activity has changed dramatically. We're really in this together, and we should be combating it together.

[3:30]

If indeed the provincial government is concerned about property tax, and about introducing reform acts, this kind of cost is the crux of it. You can introduce all the variable mill rates that you want; you can ask municipalities to slip back and forth on who is going to pay this kind of tax and how much this year; but if municipalities do not have sufficient revenues to maintain their operations and are tied down to where they cannot get additional money, it doesn't matter what you do in terms of where you shift. The municipalities won't be able to afford or maintain the services, and they will deteriorate. That's the critical thing.

The Minister of Municipal Affairs may not have any direct responsibility for policing, but as Minister of Municipal Affairs he knows that it is a major problem for the larger municipalities — the ones who pay all their own costs. If he is determined to try and get to the bottom of property tax problems and introduce things like variable mill rates, then really he should familiarize himself with the serious funding problems that municipalities are having with such things as policing. Mr. Speaker, I'll come back a little later on and talk about some of the policing costs in the province and options that the task force gave to the provincial government for trying to introduce some equity — or trying to convince the provincial government to pay some of the costs for policing.

Mr. Speaker, I want to take the opportunity to go through a very useful document that turned up during our research into this particular issue. Again, it goes back to the problem of the property tax system not being satisfactory for the 1980s; certainly it hasn't been satisfactory for many, many years. I refer to the Bureau of Municipal Research (Civic Affairs). They put out a very interesting document in 1973 called "Property Taxation and Land Development." They go through some of the particular concerns they have; indeed, they give some thought on where governments can try and improve. I would like to go through some of them this afternoon.

In this very useful document they start their deliberations by saying: "The Canadian property tax is not a fresh subject of inquiry." It certainly isn't, Mr. Speaker. I just have perhaps one one-thousandth of the documents that are available in our library or in various other libraries. Government and academic studies are being published almost daily on this particular aspect. I said earlier on in this debate this afternoon that because it is such a major chore in terms of trying to resolve it in the long term and being fair and equitable....

I've suggested that we have a special select committee or a standing committee — whatever you want to call it — of this House, made up of all sides, to try to resolve for once and for all the property tax problem, and to make some recommendations to the House. Bill 7, Mr. Speaker, won't do much in terms of the real difficulties property taxpayers are facing in British Columbia.

Municipalities have long been entirely dependent on property tax as a source of revenue. Secondly, the tax is highly visible in the public eye since it is assessed and collected externally by government officials. Often it is payable in one lump sum. Maybe it's one of the reasons a lot of people don't want to get rid of it. It's fairly easy to administer, I suppose. One of the reasons governments tend to stay with an unfair system and not to change anything is because a lot of people really don't understand it, or have not thought about any alternatives.

In turn the revenues generated are used to provide services at the local level so the taxpayer is able to conduct his or her own personal evaluations of the tax and its administration. A perusal of the literature reveals that researchers and government officials have documented and exploited only one aspect of the relationship between property taxation and land use planning. They show that land uses have a direct effect on the property tax rate, since property use determines needed municipal services and property assessment determines the tax base. But at the same time the property tax may also affect the land use itself, and this part of the relationship has been totally ignored. The important effects of the tax on its base, i.e. taxable real property, have been overlooked to such an extent that less is known about the impact of any other major tax. The property tax, like any tax system, is an instrument of public policy as well as a revenue system. As does any form of taxation, it has effects and implications which may be used to regulate specified activities in order to achieve social, economic and political purposes. In general, the property tax directly and indirectly affects the quality and character of land use as well as investment in new development and renewal. The investigation of this particular municipal affairs research bureau looks specifically at these effects in order to eliminate conflicts between land use goals and local tax policy, and to develop local areas in a more orderly fashion.

There's a headline here: "The Present System of Property Taxation: The Indictment." That's from another in a long line of documents that indicate the property tax system is not right for our times and needs to be reassessed and revamped. I've already said that we can work collectively, as other jurisdictions have done, to look at a two-tiered system of taxation: one based upon property for services directly related to property, but another for municipal purposes — a second tier more based upon the ability to pay, or income-related.

Today, despite substantial criticism and changed circumstances, the tax scheme — and this book here refers to Ontario, but it's very applicable to British Columbia because we have the same system — remains basically intact. Briefly, the real property tax is according to value, which is based on the full market value of a property. The tax base then is the value of real property, including any improvements, subject to taxation in the jurisdiction of the local government.

The total tax revenues are obtained from three sources: tax on taxable real property; business taxes, which are a percentage of the taxable real property varying according to the nature of the business; and third, special-classification properties which are impossible to assess in the normal way, such as telephone companies and things like that. Tax revenues are calculated by applying a predetermined mill rate — well, we now have the variable rate — against the assessed value of the individual property. A mill, used for purposes of accuracy, is one-tenth of 1 percent. I won't go into these specifically; I'm sure everyone knows how that works.

The report goes on to say that it's clear that the present property tax must be strained in order to generate sufficient revenues to finance the expanding services being provided in developing centres. This is particularly true in urban areas, where the soft-services budget is beginning to expand

[ Page 1113 ]

rapidly. The bureau of municipal research uses the Ontario examples, and I won't give those today. It goes on to say that property taxes are deteriorating to the point where local governments are deeply concerned about continuing to add more and more to the property tax system. So what's beginning to happen — and we're already starting to see it in many municipalities — is, indeed, the deterioration of many of the basic infrastructures of those municipalities. This report from Ontario says the same thing is happening in Ontario — a general deterioration in municipal operations.

Beyond the problem of revenue generation, there are more telling charges to be levelled against the present property tax. First, a major difficulty lies in the fact that a real property base cannot cope with the urbanization process. Historically, the ownership of real property has been regarded as evidence of an ability to pay taxes and a manifestation of benefits received in the form of various services. This general assumption that the measure of ability to pay is the market value of the taxable realty owned ignores the capitalization effect of the tax on the value or income stream of the property itself. Land taxes are capitalized at a prevailing rate of interest of the sum paid as taxes on a piece of land. The result of such a calculation is the amount by which the capital value of the land might be reduced if it were offered for sale. For example, if the annual taxes on a piece of land are $100 and the prevailing interest rate is 4 percent, a capital sum of $2,500 will be needed to yield an amount equal to the taxes. This sum of $2,500 may be taken into consideration by a prospective purchaser and deducted from the price that he would otherwise be willing to pay. Furthermore the actual incidence of the tax must always be carefully considered.

First, a tax may be imposed on some person; secondly, it may be transferred by him to a second person; and thirdly, it may be ultimately borne by the second person or transferred to others by whom it is finally assumed. At the same time the social, political, economic and institutional climate as well as the character and significance of the real property have changed vastly. In previous times environment was characterized by minimal and decentralized government and the predominance of agricultural land use. Municipal governments were not required to perform a significant positive servicing function. Investment and salary incomes were also generally uncommon. Wealth was primarily held in the form of realty, and local tax policy was established accordingly.

We don't have that situation today, but we still have a taxation system that was born out of those times. Today, however, individual wealth is held in new and different forms of complex and diverse interests. Consequently other measures such as income flows have pre-empted real estate holdings as more realistic indicators of ability to pay. I go back to that theme: ability to pay.

Real property is no longer an accurate measure of benefits provided by the taxing government. Historically, the real property base was justified by the belief that the provision of services enhanced the market value of land and that the financial burden of the servicing should therefore be borne by the property owner. Quite reasonable. However, there no longer seems to be any true relationship between real property values and the worth of services received.

[3:45]

Today local governments provide many soft services which are at best only vaguely related to real property values. Admittedly the property tax is still used primarily to fund essential hard services, but with respect to the provision of these property-related services, real-property ownership is often not congruent with the benefits received. For example, few equally valued parcels of property place identical demands on municipal services, since the consumption of services differs according to land use. Thus by using real property as a base, certain types of land use are in effect discriminated against. I think we have all known that for quite a while too.

In short, neither ability to pay nor benefits received can justify the use of the present real estate tax any longer. First, income rather than real property is a superior measure of ability to pay in our economic society. Secondly, the yield of the tax greatly exceeds the cost of local expenditures which directly benefit the owners of real property.

HON. A. FRASER: You will have to repeat that.

MR. BLENCOE: I will get you a copy.

AN HON. MEMBER: You might as well repeat it.

MR. LEA: I missed that.

MR. BLENCOE: For those who missed that I will quickly go over this portion. It is a very important aspect of the argument that we are putting forth. First, income rather than real property is a superior measure of ability to pay in our economic society. Do you disagree with that? Secondly, the yield of the tax greatly exceeds the cost of local expenditures which directly benefit the owners of real property. In particular, education and social services benefit the entire community but do not even serve the realty.

MR. LOCKSTEAD: On a point of order, Mr. Speaker, I thought I might draw to your attention that we don't appear to have a quorum at the present time.

DEPUTY SPEAKER: Pursuant to standing order 6, I'll ring the division bells. The quorum is now satisfied. The hon. member will continue.

MR. BLENCOE: I was just trying to give my learned colleagues further insight into the real property tax, as well as some learned opinions that have come from other jurisdictions. I was quoting from the Bureau of Municipal Research civic affairs document. I had just repeated some important pieces from this document, It was basically saying that income, rather than real property, is a superior measure of ability to pay in our economic society.

A third criticism often made of the real property base is that it is unstable over a business cycle. Critics contend that since real estate is available only to a finite quantity, the supply is fixed and cannot be manipulated according to demand. Consequently, since market value of land is highly variable, the yield of a land tax must be unstable. In practice, however, this is not the case, for it is the supply of serviced land which is relevant in an economic sense, and this supply can be manipulated. In addition, assessments have not directly mirrored market value changes since assessors have purposely created time lags in evaluations. As a result of assessment tag — and you're now building that in, of course, so you're not going to be doing a roll every year; it's every two years now, I think, with Bill 22 — the revenue yield of the tax remains relatively stable during fluctuations in the

[ Page 1114 ]

amplitude of the business cycle. While the deliberate delaying of valuations may be desirable practice, other administrative problems make the tax particularly unpopular.

AN HON. MEMBER: I've never heard of a popular tax.

MR. BLENCOE: You're quite right there, but this is the most unpopular and the most unfair, and you've got a responsibility to do something about it.

MR. LEA: Just in Boston.

MR. BLENCOE: Don't throw the tea out. Don't throw the bathwater out either.

Interjection.

MR. BLENCOE: In my riding? Come and run in my riding. I invite you to come and run in Victoria in the next election. Come on over. Any of you members. I'd love to have a real Socred run in Victoria.

MR. LEA: He isn't a real one.

MR. BLENCOE: Isn't he a real one? Are there any left? No? They sold their principles, right? No principles left.

Interjection.

MR. BLENCOE: Oh, dear! Mr. Speaker, the minister doesn't like to be told he doesn't have any principles.

DEPUTY SPEAKER: Hon. members, we could return to orderly debate, please.

MR. BLENCOE: I was trying to be orderly, but someone across the way started off on a tangent, and I couldn't help but respond when they talk about real Socreds.

Interjection.

MR. BLENCOE: That's right! Bible Bill. They used to stand outside Hyde Park.

DEPUTY SPEAKER: Hon. member, please, could we return to the bill, and I would ask the other hon. members not to interrupt the member who is now speaking.

MR. BLENCOE: Mr. Speaker, I'm trying to give this government a little insight into some of the property tax problems that local government faces. Many jurisdictions have recommended that there are avenues open to introduce different systems. If you are serious about Bill 7, then this is only the start of really reforming the property tax system of local government.

I was talking about the deliberate tactic of delaying valuations, and that may be a valuable practice. Other administrative problems make the tax particularly unpopular. A main irritant is, of course, that the amount of tax payable is not decided by the taxpayer himself, like most other taxes, but by government-appointed assessment officials. Furthermore, in determining this amount, the official must rely on the valuation of real property, which, because of the heterogeneous nature of realty, is necessarily a baffling task. Boy, is it ever a baffling task. To arrive at this valuation, assessors are directed to use one of the three assessment methods to determine the market value of the property: the cost of replacement, less depreciation; the comparative sales figure; or the income capitalization rate. Yet despite the formulae and sophisticated manuals, valuation remains an art rather than a science.

Because of the uniqueness of property, inadequate data and the element of futurity, introduced by highest and best use assessment, the final decisions must often be based on value judgments. I've got to step out and talk a little bit about that. When you are trying to collect revenue for the very serious purpose of maintaining municipal operations, and you have to admit, as many do, that acquiring that revenue through the tax system is based on value judgments and that you assess and tax people on value judgments, that really is quite an admission. Whatever happened to science and to those expert tax officials and people who purport to know all the things about these particular problems? Where are they when it comes to trying to eradicate a value judgment system for tax purposes at the local level and to introduce one based on a scientific analysis, on a formula that's fair and just? Value judgments for collecting taxes! How crazy!

Interjection.

MR. BLENCOE: The human element? Well, you know, that may be right, but when it comes to someone paying high taxes, particularly, as I already indicated, someone who is on a fixed income or a senior citizen, that value judgment can be a great hardship. I would say rather than relying on value judgment, let's rely on a formula that's fair and just, and that everyone understands and can accept. That's what we need.

[4:00]

I'll go back to my little book. As a result in practice, inaccuracy and gross inequalities can be commonly found. Boy, can they ever. Since a 20 percent coefficient of dispersion, which would be outrageous in the income tax field, is generally considered to be accdptable, property owners can be, and are, treated in a way that is both dramatically and erratically different. When you are paying a high portion of your income, either as a wage-earner or as someone on a pension, based on a system that's erratic and based on value judgments, an unscientific analysis of the marketplace, you have really got to finally admit that perhaps the time has come to introduce a system that takes out some of those little flaws. Maybe that's what's needed. With respect to the government, and with respect to the minister responsible for this bill, Bill 7 does nothing in those areas at all.

Leaving aside these applied administrative inequalities, the real estate tax itself is inherently regressive in nature. Certainly the tax does tend to redistribute income from higher-to- lower-income people by financing many social services. But this redistribution is often uneven. The incidence of the tax, with few exceptions, bears relatively more heavily on lower-income groups. This is due, first, to the fact that higher-priced houses and properties have in the past been consciously undervalued. However, since the Assessment Act was recently amended to direct assessors to avoid such fractional valuation in favour of full assessment, this particular problem should be alleviated, according to the report here.

The economic fact remains, however, that expenditures on housing show a relatively low order of income elasticity.

[ Page 1115 ]

That is, the response of the demand for housing to changes in the real income of consumers is generally slight. Housing choices are generally made infrequently, and thus higher income people remain in their accommodations while their income rises rapidly. As a result, the rich tend to spend proportionately less than the poor on housing accommodation. Moreover, the property tax payable can often be shifted from property owners to tenants or to consumers of the corporate taxpayers' final product — i.e., from the more affluent to the less affluent. Thus a higher percentage of the income of low-income taxpayers is ultimately captured by a real property tax.

In addition to its oft-quoted adverse fiscal effects, the present real estate tax exerts many pressures on land use which are largely unintended and unexplored. These pressures are felt more severely by the core areas of urban regions. In the central city, the conflict between local tax policy and land use goals is particularly acute. Two major sources of the problem are: the composite nature of the tax — i.e., both land and improvements are subject to taxation — and assessment based on the highest and best use of the property. As a residential area, the central city generally attracts relatively more inhabitants of low income, old age and other disabilities. Yet as an occupational area it is the heart of the metropolis, attracting commuters from the suburbs and beyond. Consequently, the central city must provide a high level of services while its tax base is being eroded. This problem is aggravated by the fact that since improvements are taxed, new construction, refurbishing and maintenance are not encouraged. The improvement tax is in effect, higher on new buildings than on deteriorated buildings, and yet the latter have higher municipal costs. Consequently, the landowner is tempted to discontinue good upkeep since proper maintenance and remodelling would reduce his net return as well as result in a higher assessment.

AN HON. MEMBER: You just want to raise taxes.

MR. BLENCOE: I'm just pointing out to you some of the problems with the assessment and property tax system. There are so many of them.

MR. BARRETT: I rise under standing orders 6, 7 and 8. Mr. Speaker.

DEPUTY SPEAKER: There is a quorum, hon. member.

MR. BARRETT: We do not have ten members.

DEPUTY SPEAKER: Yes we do, hon. member.

MR. BARRETT: One, two, three, four, five, six, seven, eight, nine.

DEPUTY SPEAKER: Ten, including the Speaker.

MR. BARRETT: Do you intend to vote, Mr. Speaker?

DEPUTY SPEAKER: No, but the Speaker is included. If the member will read standing order 6....

MR. BARRETT: Is that your ruling, that you call yourself part of a quorum?

DEPUTY SPEAKER: No, that is not my ruling; that's from the standing orders. Hon. member, if you look at standing order 6....

MR. BARRETT: "...the presence of at least ten members of the House, including Mr. Speaker...."

DEPUTY SPEAKER: Right.

MR. BARRETT: You're the deputy.

DEPUTY SPEAKER: Standing order 14 covers that one.

The hon. second member for Victoria continues or loses his place.

MR. BLENCOE: Mr. Speaker, the member across asked what the problem is. He didn't understand what it's got to do with Bill 7. What I m trying to point out to that member, and to other members is that the real property tax system, because it has so many flaws and loopholes, creates all sorts of problems for local taxpayers and local governments. I was pointing out here that because of the particular problems with it, it can persuade — let's put it that way — landowners in certain parts of cities not to maintain their buildings adequately. Indeed, they become rather an eyesore and we all know why that is: if you improve it your taxes go up. We need to take a look at that; don't you agree?

Interjection.

MR. BLENCOE: A member of the government wishes to take a look at this particular problem. I'm finally getting through to some of them. That's good.

[Mr. Pelton in the chair.]

The residential developer engaging in new construction in the core is also faced with a hidden burden. The cubic foot construction expense of residential units declines as the unit size increases, due simply to the economics of scale; yet the property tax, by taxing the combined assessment of land and improvement, encourages smaller units. Consequently, investment in new construction may be economically inhibited unless the tax can be shifted to tenants. This has an additional effect. When the tax is shifted, rental charges are increased and disposable tenant income is therefore decreased. Consequently, the demand for quality accommodation declines, which results in inadequate maintenance.

These aren't all things we think of when we talk about real property, but what I'm trying to do is to give this government little insights: that some little ripples affected by property tax have a marked impact on our communities. They all should be taken into consideration.

The availability of and, more especially, the type of accommodation in the downtown area is also affected by highest and best-use assessment. Because the central city is zoned for highly intensive uses, underdeveloped parcels such as a single-family dwelling lot are valued as potential sites for high-density development. Consequently, the taxable assessment of the lot will be inflated beyond any relation to its existing use. The downtown owner must then attempt to shift the tax to tenants, who can pay the increased rent to absorb

[ Page 1116 ]

the increase, probably by forgoing all but essential up keeping expenses, or attempt to sell the property to others who are able to develop it.

Interjection.

MR. BLENCOE: Right. Flows to other developers. You should wait until I finish before you agree, because you may not agree with some of this.

Depending on the owner's course of action, downtown structures tend to take three separate forms: highrise developments, dilapidated unrefurbished structures, and a restricted number of properly maintained structures owned or rented by persons who are willing and able to pay the increased costs. It is sometimes suggested that a simple reduction in present tax rates would stimulate new construction and adequate maintenance. In all likelihood a tax decrease would, in effect, reduce expenses and increase profits. New construction would thus be encouraged, thereby increasing the supply of accommodation, which in turn would reduce rents, everything else being equal. However, the resultant demand for land would eventually increase prices and curtail new construction. Consequently, a short-term increase in the supply of new private development, which would subsequently deteriorate, would probably be the best result that could be expected from reducing taxes.

The central city finds itself in a vicious circle of high taxes, decreased construction and increased deterioration. Eroded tax base; high taxes. To break the circle, most cities engage in highly intensive commercial zoning, density bonusing and density transfers. Less intensive uses are effectively prohibited, as only a highly intensive development could bear the increased tax burden. According to conventional theory, these taxes cannot be shifted; it must be kept capitalized, which results in lower property values.

The supply of downtown serviced land, however, is not constant. Thus, in cities of economic growth and high demand, tax increases need not be capitalized and land prices continue to spiral, causing further dislocation of low-density uses. Principles of social planning are thus ignored, and the necessary balance of diverse land-use patterns is destroyed. The situation becomes especially ironic when mill rates must again be raised to buy the parkland recommended by planners.

In the face of rising taxes, the central city often experiences an increased migration to the suburbs and beyond. Early studies of the locational effects of property taxation on non-residential landowners had assigned to it only a marginal impact. However, more recent studies, while agreeing that property tax plays only a slight role in the initial location decision, have found that once the decision is made to locate or relocate in a particular area, the property tax rate becomes an important determining factor: that is, the correlation between tax rate and location becomes much stronger as the area of future location becomes more specific. Once the issue narrows as to which part of the metropolitan area should be chosen, the decision will probably be made according to Gresham's law: all things being equal, firms will tend to gravitate to the low tax rate. We all know that happens. That's one of the reasons why the industrial base of British Columbia is in serious trouble. We cannot get an overall handle on what's happening in certain areas. This particular problem could very well be aggravated by this variable mill rate.

[4:15]

You could conceivably have municipalities fighting for industry because they now have the right to lessen the taxes on particular categories of property. You could have municipalities fighting tooth and nail to try to attract industry from one municipality to another. Base your industrial policies on what's good for all British Columbians, not on industry locating where it's going to have a low tax rate. The bill that you've introduced could very well encourage that. Indeed, that very thing could happen.

If the province were serious about industrial and business property in British Columbia, it would develop an overall industrial policy that takes those tax problems into consideration, and does not allow exemptions or special privilege for industrial and business properties in the act. That's what this act is doing. Because of the assessment system and the speculation on land around those industrial properties, they are faced with huge increases in assessments and in taxes, not because of what they're doing but because of what somebody else is doing in the surrounding hinterland.

The impact of the property tax rate on the migration of individuals rather than on commercial and industrial taxpayers may still be questionable. Nevertheless, when these pressures are combined with differential tax rates between neighbouring municipal jurisdictions, inefficient spatial distribution and interpersonal inequities will inevitably result. Did you get all that? I'll explain it to you later, if you like.

This migration effect and the rapid urbanization pressures on fringe areas have resulted in rapid speculation and a diversity of land use patterns. These new developments, particularly residential communities, create heavy public service demands. Expenditures are further increased by land speculation, as the provision of these services must be extended past stretches of open spaces which have been held for speculative gain.

Due to political fragmentation and local autonomy with respect to the tax rate, urban areas attempted to compete for high-base and low-cost taxpayers. Through the use of selected tax incentives and mercantilist zoning, light industry and shopping centres are solicited while high-cost, low-based residential developments are discouraged. Suburban tax shelters and industrial enclaves are thereby created which result in distorted land uses.

The Provincial Secretary has returned to the House. We all know of some of his attacks on the local council on industrial property. I am going to take the opportunity to talk about industrial property and tax base. That minister made a statement in the House about a week ago saying that in 1972 Bapco paint, one of the industrial bases in Victoria, left because of the local council. That was a totally erroneous statement and he knows it. It has been proved in a Times Colonist editorial.

Interjection.

MR. BLENCOE: I'm talking about industrial properties and assessment, so please be quiet.

MR. BARRETT: I rise under standing order 93. I want to point out that there has been no evidence to me that the order was placed on the table for this House's consideration today. Had this come to my attention earlier I would have raised it at the start of the debate. It does not appear to me that indeed

[ Page 1117 ]

standing order 93 has been followed. I want your ruling on that, Mr. Speaker.

DEPUTY SPEAKER: I would suggest that the order was placed on the table today.

MR. BARRETT: Is that your ruling, Mr. Speaker?

DEPUTY SPEAKER: Yes.

MR. BARRETT: I challenge your ruling.

[Mr. Speaker in the chair.]

Deputy Speaker's ruling sustained unanimously on a division.

MR. BARRETT: Mr. Speaker, on the point of order, I wish to have the House take note that it was brought to my attention, shortly after I challenged the Speaker's ruling, that I was incorrect. I regret that very much. The orders of the day are in order, and I don't want anything to impugn the record of the Clerks.

[4:30]

[Mr. Strachan in the chair.]

MR. BLENCOE: Mr. Speaker, in the last hour or so I've been trying to go through some of the less obvious problems with the property tax system; indeed, one or two members on the government's side were nodding their heads in agreement. It does lead to a number of problems that really should be taken in hand and properly and rationally resolved.

In summary to this particular Section I am going through now, the property tax, which currently forms the backbone of the municipal revenue system, can be criticized on many grounds. First, the tax is no longer in touch with the economic realities of the modern day. This has resulted in serious problems of inadequate generation and a questioning of the philosophical justification of real property tax. Secondly, the difficulties of accurately and fairly assessing and administrating a real property tax remain. Finally, the costs and impacts of the tax in terms of land-use planning principles merit a considerable reconsideration of municipal taxation, not only in British Columbia but in in nearly every other province in Canada.

What a brilliant opportunity for this government of British Columbia! Because it seems to want to go on record as being the leader in so many things — and I won't go into some of the things it's becoming leader for, not only in Canada but around the world.... It has a brilliant opportunity to come to terms with the real property tax system that is no longer appropriate. It's archaic, inadequate and unfair We've got to have a new system for municipal purposes. Here's a brilliant opportunity for this government to do something right for a change.

Mr. Speaker, they are taking away a number of other things in various pieces of legislation, but here's their chance to introduce real legislation that would introduce fairness and equity into the taxation system at the municipal level. I would urge this government to take it. You've got the time and your mandate to do it. You've got all the resources at your disposal to get an accurate reflection of the problems of the real property tax system. You've got enough experts, reports, documents and commissions to give you the evidence that what you're doing in Bill 7 is not satisfactory. In a moment I'll get on to some of the sections in there which really are centralization of power, which we all abhor — an erosion of local autonomy and government that no one can accept on this side of the House. Here's an opportunity — the only one left — for the Social Credit Party of British Columbia.... And after three years that won't be left either. Like the real property tax system, Social Credit is archaic, unfair and unjust, and should be eradicated.

MR. PARKS: On a point of order, Mr. Speaker, pursuant to standing orders 17 and 36, I wonder if the Speaker might clarify the process of "addressing the Speaker." The hon. second member for Victoria insists — in fact, persists — in addressing fellow colleagues in this House and, even more disturbing, members of the gallery. My understanding of parliamentary procedure is that when one rises in his place he is to address the Speaker and not the galleries. I appreciate that the hon. second member for Victoria is a neophyte, and he might wish to play to the galleries, but I wonder if you, Mr. Speaker, might give him some direction.

DEPUTY SPEAKER: The point is well taken. Before recognizing the member for Nelson-Creston, let me just comment on the point of order raised by the member for Maillardville-Coquitlam, which is that every member must address himself to Mr. Speaker. I will commend that to all members: not to address comments to other members of this House or to other precincts in the building. That is most unparliamentary.

  MR. NICOLSON: However, Mr. Speaker, when quoting standing order 36, the hon. member didn't quote it in its full context. He omitted certain important words: "Every member desiring to speak is to rise in his place, uncovered, and address himself to Mr. Speaker." Mr. Speaker....

MR. BARNES: Lawyers' tricks.

MR. NICOLSON: Yes. We're seeing some of those slick semantics in this House here, I suppose.

The member is in order. He doesn't have a hat on, Mr. Speaker. I think that hon. members should at least quote a whole standing order, instead of skipping over certain words when drawing attention to standing orders in this House.

MR. PARKS: I guess this is another point of order, Mr. Speaker. I take it the hon. member is somehow impugning my integrity, that I incorrectly quoted. If the hon. member really was interested in listening to my remarks — and I'm sure that if he's that interested, he'll make sure he looks at them in Hansard — he will have heard me say words to the effect.... And then I gave the expression "address the Speaker." I was very precise, Mr. Speaker, in referring to my quotations from standing order 36.

DEPUTY SPEAKER: I think we've covered both points of order extremely well, and the Chair will once again reinforce what the member for Maillardville-Coquitlam said, that point being: "Every member desiring to speak shall address himself to Mr. Speaker, and not to other members or other parts of the precincts."

MR. HOWARD: Mr. Speaker, I'm sure this....

[ Page 1118 ]

MR. NICOLSON: Before the member for Skeena, might I, Mr. Speaker, withdraw my imputation of wrongdoing to the member for Maillardville-Coquitlam,

DEPUTY SPEAKER: That's accepted. Any imputation of improper motive is withdrawn.

MR. HOWARD: I'm very pleased that the member for Maillardville-Coquitlam drew that standing order to your attention, because he belongs to a group of people who persist in disobeying that very standing order in their process of continuing to heckle directly the member who has the floor. They entice the member who has the floor, then, to have to reply in some way. I think that's where the commencement point should be in the enforcement of that particular standing order.

DEPUTY SPEAKER: That has been brought to the Chair's attention before.

The second member for Victoria continues.

MR. BLENCOE: Mr. Speaker, I'm trying to address my remarks to the Chair and to the learned members, and indeed, Mr. Speaker, to the members of the public who are with us today. I will continue with the debate. Hopefully those members, rather than being concerned with fatuous points of order, will indeed listen to some of the reports that have been made in other jurisdictions. This is very important business, because every single British Columbian in some form or other is directly affected by real property tax in this province, either through ownership or as a tenant, of course, as they pay those taxes through their rents. It's something that is regressive and unfair, and I think we will all admit that it needs some serious thought. That's why we're taking some time to debate this particular piece of legislation. We're convinced that there's a better way to go.

Now we don't have all the magic answers in one day, but we do know that there is substantial evidence to indicate that just introducing a variable mill rate and allowing municipalities to spread the load onto one particular category or another at the expense of another property category is only a band-aid and is not a long-term solution.

The minister knows that. He knows that if he was serious about the problems faced by the local taxpayer he wouldn't have reversed the funding formula for underground services and sewers grants. He wouldn't have done that. He would have made sure that those grants were maintained and that the safety of local taxpayers was enhanced — that the sewers and underground services were maintained properly. Yet we now know that what's going to happen in the province of British Columbia is that municipalities will not be able to afford to do that.

This Bill 7 does nothing to resolve the long-term revenue problems experienced by local taxpayers and by the municipalities that represent them. That's what we've got to come to terms with in this House. The New Democratic Party is prepared to come to terms with those things. We're prepared to sit down with representatives of local taxpayers' organizations, with all categories of owners and their representatives and work out a formula for property taxes that meets the 1980s, not the 1880s. It's the 1880s formula we have in place today. We know that in other pieces of legislation this government has gone back to the 1880s, but here is an opportunity for this government to do something worthwhile for that beleaguered local taxpayer. Allow the local taxpayer to pay for municipal operations based upon something to do with their ability to pay and income. I'm going to emphasize that over and over in this debate because that's the long-term solution. Have a system that encourages people to revitalize their downtown properties, for example, or revitalize certain residential areas that have deteriorated and become areas that are a bit of a blight on the local landscape. Have a tax system that doesn't penalize those owners who try to improve their properties by making them pay more taxes.

Every single British Columbian, when they add a rumpus room or a playroom for their children, trying to improve the quality of life in their home or in their neighbourhood, knows what happens: they get hammered by the taxation system. Relate it to income. Relate it to ability to pay. I know there are indeed supporters of this government who support that theory. Maybe they'll say something public about it one day. You ask the members of the chamber of commerce about assessments and what has happened to some of their properties in the downtown area in the last two or three years. You ask what proportion of the taxes they're being asked to pay on an annual basis. It has nothing to do with those little shopkeepers' ability to pay those assessments and those taxes. You know what happens? The actual property owner, under the triple-net system, passes on those increases to that little tenant, that little shopkeeper or that little family business. The actual owner of that property escapes that system. Maybe that's why they're not speaking up enough about the inadequacies and the inequalities in it.

[4:45]

I'm talking directly to the business section of this government, who purport to represent small business holders and property owners and small business tenants. Under the assessment and the property tax system that's currently in place in British Columbia, they are being hammered on an annual basis. They're being forced to pay taxes. For instance, on Fort Street in the city of Victoria, property sold about a year ago for $162 a square foot. That has nothing to do with reality. It's sheer speculation. What happens? Not only the tenants and the small business in that particular building, who try to hang on, pay incredible tax increases because of that, but the ripple effect on that Fort Street land is horrendous. Because it's a value judgment theory that processes assessments, the ripple effect goes right up and down that street.

Consequently, what happens is that the little business person can't afford to operate and maintain a local business on Fort Street, one of the most attractive streets in Victoria. I know for a fact that especially the upper portion of the street, where many members have walked — a lot of antique stores; sort of a quaint, unique area — is indeed threatened today by those high assessments and speculation trends. One hundred and sixty-two dollars a square foot. It's the very nature of downtown and the very special atmosphere and environment in the downtown area that everyone loves, and it has attracted millions and millions of tourists to this community over the years. We have not developed like other downtown areas. We have kept a semblance of smallness, where the urban landscape and architecture does not overwhelm the individual. Somehow or other those properties have escaped massive assessment and taxation increases. But the signs are there, and they're coming into place. I'm deeply concerned for the small property holder downtown who holds onto a heritage property or a two-storey building because he happens to love

[ Page 1119 ]

it, and the citizens of Victoria love it and the tourists love it. That very uniqueness and beauty is being challenged by the property tax system in place in British Columbia. If we want to maintain Victoria, its beauty and uniqueness, and its two or three-storey buildings, the turn-of-the-century styling, this government has to....

Interjection.

MR. BLENCOE: Move the government out of Victoria? Oh, oh!

MR. REID: Then we wouldn't need aldermen.

AN HON. MEMBER: Tell that guy to address the Speaker uncovered.

MR. BLENCOE: Well, actually, Mr. Speaker, I don't take much notice of this member to my left.

What I'm trying to say is that the very community that purports to support this government to the utmost....

They believe it supports them; I suggest it's fast not — the small business and little tenant in that building. If they believe in small business and family businesses — real free enterprise, not private enterprise or corporation enterprise, which this government supports — then they will take the real property tax burden off the backs of those small business tenants and introduce a system that's based upon what they're earning in their business.

I hear from many on a daily basis who know that the speculation in land in the downtown area is continuing. They know that the Trizecs and the Cadillac Fairview corporations and the latter Daons are all there, lingering on the fringes, waiting to radically change the nature of downtown Victoria. We've had those pressures, and they are certainly there now. What is starting to happen is that the beautiful downtown area, with its characteristic small heritage buildings and small streetscapes where people can mingle and shop and don't have to look at a 40- or 50-storey tower and feel the city isn't theirs any longer, but it belongs to some multi-national corporation; where they can feel Victoria is still owned by the people....

If the system that's in place for assessments and property taxes is maintained, and the $162-per-square-foot transactions continue to occur, that Victoria we know will disappear. That's very serious. This community is the focal point of tourism in British Columbia. Those of us who live in Victoria boast a little about this community, but we do believe we have a national and international reputation which has been won in trying to preserve that small-scale urban environment.

MR. REID: A good tourist minister, too.

MR. BLENCOE: We'll get on to that one in estimates.

MR. REID: You're talking about tourism — give credit to the government.

MR. BLENCOE: I'll give credit to the government. I have no problem giving credit to the government when it's due, Mr. Speaker.

We can put all the money in the world into tourism in Victoria. If we want to, we can do all the promotions, but if you radically change the visual image of Victoria, and the perception abroad that we are changing and becoming just like downtown Vancouver, with all those big buildings, etc., that we're radically altering that, we will hurt not only the small business community but also the major industry of tourism in this province of British Columbia.

Interjection.

MR. BLENCOE: I'm asking you, Mr. Speaker, with respect to that member, to ensure that those small businesses can be maintained in their current operations.

MR. REID: We'll do our best.

MR. BLENCOE: If this government wants to do their best, Mr. Speaker, then they will go back and rewrite Bill 7 and come in with a property tax system that's based upon the ability to pay, not because somebody flips a property at $162 a square foot, and next year's tax bill comes in and it's a 100 percent or 200 percent increase, and that little business has to move out. That land value has to go up and the multi nationals and transnationals buy up the property.

Interjection.

MR. BLENCOE: The member for Omineca (Mr. Kempf) disputes that, but the evidence is there, Mr. Speaker.

Interjection.

MR. BLENCOE: That's very disappointing, but I suppose to be expected.

MR. KEMPF: Move the seat of government out of here, and then we'll see where your little city goes — right down the bloody tube! And you with it.

MR. BLENCOE: Am I hearing right? That member wants to move government out of Victoria? Abandon these beautiful buildings? Where does he want to put government? Up in his riding, maybe?

AN HON. MEMBER: Put it where we can afford it.

MR. BLENCOE: This is the heart of government in British Columbia. This is where it was born and where it will stay.

Interjections.

DEPUTY SPEAKER: Hon. members, this is all very interesting, but it's beside the debate.

MR. BLENCOE: Do you want me to sit down?

DEPUTY SPEAKER: No, I'd like you to proceed, please, and the other members will stay in order.

MR. BLENCOE: I was just trying to talk about this beautiful little community that we have here, and one of the government members says they want to move it out of Victoria.

AN HON. MEMBER: That's a different bill.

[ Page 1120 ]

MR. BLENCOE: We have to see that bill yet.

Interjections.

DEPUTY SPEAKER: Hon. members, please, could we return to Bill 7.

MR. BLENCOE: The government hasn't had a member in Victoria for some time, as you know. They haven't elected a Socred here in some years, so it's up to us to give the business person's side of things in this House, and to talk to Bill 7 in terms of what it doesn't do for them. I was trying to tell government that there is indeed a serious problem in my particular riding. I'm using it as an example, but I'm sure it's the same for a number of ridings in terms of the impact of the property tax on local business.

Victoria is particularly blessed with small business, particularly little family businesses that have been here for a long, long time. I happen to know many of them. They don't want handouts, special privilege or exemptions, like this bill gives. Section 10 deals with exemptions for industrial or business property. The Lieutenant-Governor-in-Council — which means the cabinet — can at will change the regulations and exempt tax levies under the act for industrial land or improvements, or for business land or improvements.

This government is saying they recognize that the inadequacies of the property tax system for the business and industrial component are indeed out of hand, so they've got to create special privilege in the act. I believe small business people in my riding don't want special privilege, don't want exemption from the laws of the land. What they want is a fair and equitable tax system, one they know will recognize their ability to pay, will know what their income is. That's the system they want. They don't want exemptions under the act. If a friend of the government says, "Look, I'm paying a little too much tax this year," the cabinet can have a little exemption for them, while those little homeowners continue having to pay under that same system. No, those businessmen and women are prepared to pay their fair share. They're prepared to live up to the tax rules of British Columbia if they're fair, equitable and just. They don't want special privilege and exemptions through the back door by cabinet order, which we see happening over and over and over with this government. They want to be treated fairly and equitably, and they want a formula that applies to all British Columbians.

Section 10 really is an insult to the integrity and the decency in the business community of this province. You are saying to them: "Yes, the tax system is not right; you pay far too much." Because the assessments went up 1,000 percent last year, B.C. Forest Products had a tax bill of $1 million and was closed down. Somebody or other was messing around in the hinterland talking about condo development, so the taxes went up.

They don't want to have to come to this government through the back door for a little cabinet order and say: "Let me off my taxes." Yet the act does that: "exemptions for industrial business property" — special privilege.

[5:00]

The single-family property owner, the person on.... I was going to say handicapped pension or income assistance but I won't get into that particular part of this government's track record on those on fixed income, those owning single-family homes and those senior citizens. If it is right to create exemptions for a particular class of property — the industrial and business property, which this government believes it has a lot of support from — then why shouldn't those single family owners organize and say: "Hey, I want section 25 exemption for single-family owners through the Lieutenant-Governor- in-Council"? That's only right; that's only fair. You are talking about equality, and this minister says that Bill 7 is a way to introduce some fairness into the system, yet it has exemptions and has special privileges in the act. He knows darned well it does nothing to resolve the long-term problems. You have to have exemptions and privilege for all.

This government continues to build further inequalities and injustices into the real property tax system in British Columbia. They admit in section 10 that there are so many problems for the property holder and industrial property holder that they have to create special privilege for them and exempt them at will when cabinet meets.

It's not good enough. You can't sell that to the average British Columbian. On behalf of those small business tenants and business people, in this riding particularly, I ask the government to seriously consider their plight. Fort Street is $162 per square foot. Can you image what that is going to do to the assessments on that property?

MRS. DAILLY: I'm not sure if this is on a point of order. I just wish to draw your attention to the fact that there is not a quorum.

DEPUTY SPEAKER: I believe there is a quorum. Please proceed.

MR. REID: Say something positive.

MR. BLENCOE: I have been giving you positive suggestions for the last two hours, but unfortunately the positive suggestions don't seem to go well with this government. Assessments at $162 a square foot on Fort Street have serious implications for the business community in Victoria.

MR. REID: We have been sitting here for two months waiting for a good idea from you guys. How about giving us one?

MR. BLENCOE: Perhaps it is because they are under so much attack.... This government is under attack all across Canada and all across North America. Perhaps they are under the gun so much they just haven't had the opportunity to rethink their policies. Maybe they will take some time to rethink some policies. That's certainly what we on the opposition side would like them to do. We would like the government to rethink property tax legislation. We'd like them to rethink a course of action and bring in legislation that all British Columbians can accept as fair and just, not legislation that creates exceptions and special privileges right in the act. They know darn well they are just tinkering with it, not resolving it in the long term.

There is apprehension about this particular bill in municipal operations, not necessarily over the fact of the variable mill rate concept coming into effect. I don't have any particular problems with that, except to say what I've said many times: it resolves nothing.

The real concern is the continuing move by this government to centralize power into their own hands to take over certain areas of municipal jurisdiction. It's been a long-

[ Page 1121 ]

standing tradition that municipal governments have total autonomy to regulate their own affairs.

The government in its wisdom has decided to put certain limits on revenues that municipalities can recover from property taxes. That may look good on the surface. It may be part of this magic thing they try to bandy around this province — that they're interested in restraint — but it's only in certain central areas.

If they are going to restrain government in its funding and revenue-generating system, then they have a responsibility to ensure they have adequate funds to maintain essential services. I've already related to this government the problems with policing in municipalities that pay for their own.

This legislation is a further move by this government to take over the financial role which municipalities have held for themselves for a long time. I could understand that this government would want to get involved in the financial affairs of municipalities if I thought they had their own financial affairs in hand. If they could tell the people of British Columbia that they hadn't just lost their credit rating at a cost of $9 million this year, and that the $12 billion debt isn't really there, I could understand how they would want to try to run the financial affairs of municipalities. But I say that this government should get its own financial backyard straightened out first before they try to interfere with local municipalities and local governments.

This government's record in financial affairs is the worst in the history of this province. Now, through this bill, they want to take their way of doing things into local government. Local government is highly efficient, and it is trusted; its services are appreciated. You get the best value for your dollar at the local level.

This government believes it has such great financial aptitude that it can resolve municipal financial problems, but the people of British Columbia know that that is totally inaccurate.

In 1975, after 104 years under provincial governments of all parties, there was a total debt of $4 billion in the province of British Columbia; approximately $1,000 per British Columbian. In seven and a half short years the Social Credit government — the only government — has tripled the provincial debt. Today in the province of British Columbia we have a debt in excess of $12 billion — more than $5,000 per head,

Interjection.

MR. BLENCOE: I would remind that member that the Socred promises were far in excess of the Now Democrats' policy, You know that to be true.

MR. PARKS: Oh, balderdash!

MR. BLENCOE: Mr. Speaker, in the province of British Columbia we have a debt of $12 billion, which is $5,000 per head. In seven and a half short years they have tripled the debt to $8 billion more than 104 years of other governments.

AN HON. MEMBER: Except for the NDP in Manitoba.

MR. BLENCOE: Mr. Speaker, the debt in this province is astronomical, and the only government responsible — the only party responsible — is the Social Credit government.

They have put the burden on all British Columbians, and they bear the brunt and the attacks for that — no one else.

Now when they were told some years ago by financial institutions across North America that they were in trouble, that they'd better diversify the economy, that they'd better do something about what was happening to their debt, they didn't do anything. At the last minute they introduce various pieces of legislation that are so draconian that.... If they'd taken the appropriate action a number of years ago, the people of British Columbia would have been relieved from having to put up with Socred 1983 government.

Today, however, they did not heed the warnings of learned men and women in other jurisdictions that they were in trouble. And now they won't tell us, of course, how much they're going to save. But we do know what they are cutting. We know that they got us into this problem, and they're going to blame the child abuse teams, the child-care workers, the family support workers. That's who they're going to blame.

AN HON. MEMBER: Order!

DEPUTY SPEAKER: To Bill 7, please.

MR. BLENCOE: I'm trying to make the point, Mr. Speaker, that this government, through Bill 7, now wants to get involved in municipal financial operations. Well, the financial record of this government in the last seven and a half years.... Nobody will give a reference, from this government's financial affairs, for it to try and take care of the financial operations of municipal governments. Nobody would give them a reference.

I would suggest that before you take up the cause of municipal financial operations, you resolve your own first. You're the ones who did it to British Columbia.

AN HON. MEMBER: We're trying to correct the NDP mess.

MR. BLENCOE: Well, Mr. Speaker, I'll respond to that in the budget debate. Suffice to say that the government records, in terms of eradicating debt in the province of British Columbia, were never better than during our administration. When they got back into power, up went that debt load, and it stands at nearly 30 percent of provincial gross product today. This government did that, and when we were there we eliminated that debt. When we left it, we left money in the coffers.

DEPUTY SPEAKER: Bill 7, please.

MR. BLENCOE: Just on the simple fact of today, that what we know in terms of the financial administration of this government.... As a reference for getting involved in local government, let's take an example where we know what the dollar value is — in terms of a reference for Bill 7, getting involved in municipal operations, and the credit rating situation.

It's very important that we refer to the financial ability of the government in being able to say that it's going to be heavily involved in telling municipal governments how they should administer dollars in their policies and priorities. It's very important, because their ability to do that has been seriously questioned by leading financial institutions in North America. That's no reference for certain aspects of Bill 7 which now are going to centralize financial decisions of

[ Page 1122 ]

municipalities within cabinet if they so desire. That's no reference at all. As a matter of fact, the $9 million that's going to cost the people of British Columbia this year alone, in terms of their credit rating.... If that hadn't happened, and if this government had been wise in diversifying the economy, we could be paying for the office of the rentalsman, for consumer services, and for 75 percent of all the child-care workers that have been fired.

Interjection.

DEPUTY SPEAKER: Hon. member, I would advise you that you are taxing the Chair. I believe that we have had quite enough latitude expressed here. I will ask you now to return to Bill 7. There's an awful lot of latitude within the bill — many sections, many different principles. Would the member please relate his remarks to the principles of Bill 7.

MR. BLENCOE: Thank you, Mr. Speaker. That's what I'm trying to say — what I am saying: that there is no reference for this government to get involved in administering municipal financial operations, because the record of this government is abysmal.

HON. MR. PHILLIPS: That's why we're government, I guess.

MR. BLENCOE: Mr. Speaker!

Interjections.

[5:15]

MR. BLENCOE: Why didn't you tell the people before the election what the debt was? You never told anybody what the situation was before May 5.

Interjections.

DEPUTY SPEAKER: Will the House please come to order? I'll remind the hon. second member for Victoria that if he makes his debate relevant to the bill, the outbursts will probably subside. I shall also remind the hon. member of standing order 43, which states that tedious and repetitious argument, if continued, may be discontinued by the direction of the Chairman or the Speaker. If he relates his remarks to Bill 7, the member can avoid that.

MR. MITCHELL: On a point of order, it was not the second member for Victoria who was led astray. It was the member for South Peace River (Hon. Mr. Phillips) who came in and started objecting. He hadn't been following the debate. He was completely out of order. He was the one who caused the delay. If you'd bring it to his attention....

DEPUTY SPEAKER: The second member for Victoria continues.

MR. BLENCOE: I hope I've made the point about the financial record of this government. They've tripled the debt — $8 billion in seven and a half years. The worst record of any government — $5,000 per head. That is no reason why this government should want to get involved in the financial operations of municipalities. I would have to say that those municipalities — their aldermen and mayors — are quite capable of administrating their own tax dollars and their own systems. I would have to say that they also happen to be elected by the people to administer those financial arrangements. Yet this government, in its wisdom, because it's so arrogant and feels it has every right to take on every tradition in the parliamentary system in this country.... It's just going to usurp those elected officials in their decision-making at the local level. It feels it has the right to do that. I would suggest that this government, and certainly the Minister of Municipal Affairs, will be hearing a lot from those mayors and aldermen of the UBCM in the next few weeks, because it is not the friend of municipal operations. It's not the friend of municipalities. It's not the friend of the most efficient and trusted level of government in this country.

What the municipalities need is an understanding of their deep problems. They need a government that is prepared to achieve consensus on important issues. They need a government that, before it introduces legislation with certain centralizing powers — which they had no idea would be introduced when they brought in Bill 7...

AN HON. MEMBER: We knew.

MR. BLENCOE: You knew?

...discusses and informs those brother and sister municipalities across this province, in the towns and villages.... There's been a long-standing tradition that municipalities and the provincial government are like a family. It's like mother, father, brother and sister.

AN HON. MEMBER: Are you suggesting they're incestuous?

MR. BLENCOE: You have to wonder about some of these members' incredible remarks — just amazing.

Those municipalities and their representatives work long and hard for very little money to try to be the most trusted level of government in this country, and they have managed to do that. And this government, in its wisdom, decides to bring in legislation in various capacities and various areas that will radically impact upon their operations and how they carry out their business.

[Mr. Speaker in the chair.]

I urge the minister, before he leaves the chamber, either to let the bill die or have some proper discussion.

MR. REID: You're leaderless; we've got leadership.

MR. BLENCOE: I keep hearing about leadership. We haven't seen that leader for quite some time, and we certainly haven't heard him say anything in this House for a long, long time. Where is the man? Is he locked away in his bunker so no one can get to him, because he knows British Columbians have turned against this government and its legislation? The Goldfarb report and the polls told him; they said what it was all about. Nearly 70 percent of British Columbians are turning against this government and its legislation. They feel that you are offensive. There are some fundamental rights and privileges in British Columbia and in Canada, and even a bill as innocuous As Bill 7 may seem on the surface has very disturbing aspects to it.

[ Page 1123 ]

Interjection.

MR. BLENCOE: Mr. Speaker, protect me from that minister.

Mr. Speaker, they know their government is in trouble. That's why they stopped debate on the budget and went flipping back and forth and are back on Bill 7 again, for some unknown reason, without the proper course of action this House is used to. It's certainly an experience watching the operations of this government, and the shenanigans it tries to pull over the people of British Columbia are certainly an experience. There's no question about that.

The centralized control is enhanced by Bill 7 by the fact that the government has, through other legislation and edicts, told the municipalities that expenditures or compensation levels cannot exceed limits established by the government. Now, as a result of this act, cabinet has the power to put a ceiling on the amount of money which may be raised through property taxation. Furthermore, the government now has the right to control tax increases by class. In essence, this bill and others give the government the power to control municipal government to an even greater extent. This government is not satisifed with controlling this level; it wants to control as many other people as possible — centralized control by a government that cannot operate its own financial arrangements. Twelve billion dollars of debt in the last seven and a half years!

Interjections.

MR. BLENCOE: He's seeing if he can get the lease on your space at the PNE, which he gave to Mulroney.

Interjection.

MR. BLENCOE: Oh, vicious attacks from the minister! We're getting to them, Mr. Speaker. They can't handle the pressure. I would say that minister should join the Premier in his bunker and not come out at all.

This government, through its legislation, wishes to run the financial arrangements of municipalities. Well, they should withdraw this legislation, fix up their own financial arrangements and leave the municipalities, thank you very much, to administer their own things. They have looked after themselves for hundreds and hundreds of years, and have elected people to administer their books and collect their taxes. They have been elected by the people to do just that. I would suggest that most people believe in that municipal election system and in the accountability at the local level, Certainly there's no accountability for this government, because if they had told the truth about the debt in British Columbia they would not be in government today.

[5:30]

MR. SPEAKER: Order, please, hon. members. I would remind the hon. second member for Victoria that while some latitude is allowed in the course of debate, clearly the member is stretching those latitudes and is straying far from what can even be vaguely referred to as the principle of the bill before us. At this point it might be worthwhile to read the explanatory notes in Bill 7. I would be pleased to do so:

"This bill amends several taxation acts to introduce a variable tax rate system for municipal property taxation. Under a variable tax rate system each municipal council will be required to set an individual tax rate for each property class established by the Lieutenant-Governor-in-Council. The tax base will be actual value, less exemptions. Special transitional and consequential provisions are provided to implement this new system for the 1983 taxation year."

Hon. members, I think if we bear that as the overriding theme and we try and relate our remarks accordingly, we will find that we are indeed within the confines of allowable debate under second reading of Bill 7.

The Minister of Forests seeks the floor.

HON. MR. WATERLAND: I'm pleased to take my part in debate on Bill 7, seeing as how the member for Victoria has taken his seat.

Mr. Speaker, as you pointed out, this bill serves to....

MR. SPEAKER: Hon. member, while I commend the minister for his try, I nonetheless must indicate that the Chair having interrupted....

The member for West Vancouver–Howe Sound on a point of order.

MR. REYNOLDS: Mr. Speaker, under standing order 43, the second member for Victoria has been told a number of times by the Chair — I don't know how many times it is, but it must be close to half a dozen.... Standing order 43 says that he may directed to discontinue his speech. I'm wondering if you could advise this House how many times a member can be called for relevance before the Speaker does tell him.... He's about as irrelevant in his talk as Mr. Mulroney just winning the by-election in Nova Scotia by over 61 percent which I'm sure is very embarrassing to this party to my right.

MR. LOCKSTEAD: How did the Socreds do? They didn't even have guts enough to run a member.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please, hon. members.

The second member for Victoria continues. Hon. member, again I would commend the recent remarks of the Chair to the member, who I'm sure has a great many relevant points that he would like to make.

MR. BARRETT: Mr. Speaker, I want to bring to your attention standing order 20, relative to interruptions that are not on the point by the member for West Vancouver–Howe Sound, who wanted to make an announcement about his party leader rather than deal with the issue in front of the House. First of all, there's the whole question of representation: on what ticket he got elected in the first place. Is he a Tory or a Socred? Under standing order 20, I want to know. What party do you belong to?

Interjections.

MR. SPEAKER: Order, please.

MR. BARRETT: Defend me, Mr. Speaker.

Interjections.

[ Page 1124 ]

MR. SPEAKER: Oh, come on! Order, please, hon. members. We're not at the point of discussing things other than Bill 7. The second member for Victoria continues.

HON. MR. BRUMMET: The boy wonder.

MR. BLENCOE: Wait until we get to your estimates. You abandoned housing in British Columbia, that's for sure. There's no housing for people in British Columbia any more. No. You don't believe in housing.

Mr. Speaker, before you returned I believe the Deputy Speaker admitted that there are many principles, policies and ideas, so latitude was included in this. I'm glad you read out the description of what the bill tries to do. But really, it does not give full insights into the implications of this bill. The minister knows that, and so does the Minister of Industry and Small Business Development (Hon. Mr. Phillips).

I just referred to section 6: "Limits on variable tax rate system." This has got nothing to do with the variable mill rate at all, as the other sections I've already read through today. I think it's very important that people know what is included in this bill under the guise of this thing called variable mill rate.

Interjection.

MR. BLENCOE: Your policies are causing the children of British Columbia many, many problems. You have fired the child-abuse workers. That's what it's costing the people of British Columbia. That's what this is all about in this House: all the legislation you've brought in and what you're trying to do to the people of British Columbia.

HON. MR. PHILLIPS: That has nothing to do with the bill.

MR. BLENCOE: Oh, yes. It's all part of your package to destroy the social fabric of this province. That's what it's all about,

MR. SPEAKER: Order, please. I would ask members who do not have the floor to cease their interruptions, and I must now officially — I repeat, officially — advise the member speaking that I am bringing to his attention standing order 42, regarding relevance in debate. I would now caution the member that digressing from the principle of the bill will cause him to run the risk in future instances of losing his place in debate. There are many sections within this, and I would commend that to the member speaking.

HON. MR. WATERLAND: On a point of order, speaking of the matter of relevance, the member started talking about child abuse. I'm sure there must be something in the statutes somewhere that relates to MLA abuse, and this rather monotonous unrelated speech which he has been treating us to — subjecting us to — for many days now.

MR. BARRETT: Mr. Speaker, speaking to standing order 43 and your comments to the member, I think it is important, in ruling on section 43, that some previous decisions in this very chamber be referred to. Since the Chair has had this section brought to its attention, it might be worthwhile, certainly from my point of view, if the Chair were to duplicate previous decisions and circularize members with those decisions, pointing out the procedure whereby standing order 43 is brought to the Chair's attention, and the response on standing order 43.

The other area, Mr. Speaker, that I would ask the Chair to advise the House on are the specious interruptions related to the standing orders in terms of the Chair's interpretation of that particular standing order, as witnessed by the last interruption by the cabinet minister. If the House is to have orderly debate it is important that standing orders be referred to by number, preferably with quotations supporting the number selected from May and Beauchesne, so that the House may be advised directly as to what particular point the member is making in reference to the debate.

In terms of the member speaking, I appreciate your bringing standing order 43 to his attention and to the attention of the House, but applies to interjections as well, Mr. Speaker, and the same penalty for interjections can be applied even though members don't have the floor. So I would appreciate a circular from the Speaker's office — a clearer definition of previous uses of standing order 43 and the application of standing order 43 to interjections from members themselves.

MR. SPEAKER: Firstly, hon. members, section 43 is a discretionary section. It is discretionary in the hands of the Chair. I would hope that hon. members would have sufficient confidence that that section would not be imposed until every other avenue had been exhausted. I would again caution members that at this stage we must bear in mind that there is a relevance to debate in this section. Regarding the points of interruption brought to the attention of the Chair by the Leader of the Opposition, that applies to all members of this House. I would again ask the courtesy and understanding that members should offer in allowing other members to proceed with their debate uninterrupted.

MR. BLENCOE: Mr. Speaker, I would just like to draw the attention of the House to a particular section of this act.

AN HON. MEMBER: We're not in committee.

MR. BLENCOE: The principle, Mr. Speaker. This principle of the bill is to limit the variable tax rate system, and there are certain things the Lieutenant-Governor-in-Council may do. It is part and parcel of the principle and the intent of the act, and one of the reasons why we as opposition are opposing this bill in its current form.

If you amend and take out certain sections that take over the operation of municipalities, centralizing powers in your hands, then we will reconsider this particular bill, but at the moment, the way it is written we cannot support it. We support the tradition of autonomy at the local level. We have always supported that.

Certain sections of this act allow the Lieutenant-Governor-in-Council to make regulations prescribing the limits on tax rates, the relationship between tax rates, formulas for calculating the limits or relationships of the tax rates I referred to, and allowing the inspector under prescribed circumstances to vary, by order, the limits, relationships or formulas established under paragraphs (a), (b) and (c). The Lieutenant-Governor-in-Council may prescribe different tax limits, relationships or formulas for each class or property. What it means is that the province of British Columbia, by cabinet, is going to have the power to prescribe certain tax

[ Page 1125 ]

limits, certain relationships and formulas for classes of properties at their will, at their whim. That is a long-standing tradition that municipalities have retained.

MS. SANFORD: I don't think the former minister would have accepted that.

MR. BLENCOE: Probably not. That is why, along with other sections that I referred to earlier on, certain categories are going to be allowed special privilege; that is why this bill is not all that it seems to be. Mr. Speaker, the introduction, as you so capably read out, gives what the government wishes the people of British Columbia to think it is, but it is a major inroad into municipal autonomy, and we cannot accept that.

[5:45]

Local government knows it has problems with revenue and taxes. They are well aware of that, and they are aware that we have to look at new formulas and new changes, I suppose allowing a degree of flexibility in terms of the variable to allow transfer of a tax load from one category to the other. On the surface that seems supportive, and indeed in many respects we don't have any particular problem with it, because all you are doing is allowing other band-aids to a tax system that has really outlived its time. We cannot accept things like exemptions for industrial and business property — special privileges — in the act. That's not right. We went over that a little while ago. If there is a problem for industrial and business holders, then let's take a look at the overall taxation system that creates those inequities. Let's do that. Let's make the system fair, so that everyone pays according to a formula that's equal. That's all we ask. And we ask the government to work on that principle: equity.

Last time, and I just want to quickly refresh the memories of the government, I talked about the taxation system and constitutional democracy. Taxation systems and how they are used, and how the formulas were established, are very much a part of constitutional democracy. We seem to think that formulas and taxation systems are separate from the democratic process: that they're not an integral part of our government and the democratic principles and ideals, I would like to remind this government that government exists for the promotion of something that is called the common good, public interest and the general welfare. These are three basic principles of decent constitutional democratic governments: common good, public interest and general welfare. Any taxation system must take into account those basic principles of constitutional democracy. If they don't, a major portion of your democratic system is threatened and jeopardized.

I'd like to finish off today by talking a little bit about some of your responsibilities in a democratically elected government. This is very important when you're talking about new taxation systems. The reason this government is introducing certain pieces of legislation is that it feels it got an overwhelming mandate on May 5 to do as it wishes, and therefore a mandate to introduce certain pieces of legislation. There are certain principles, ideals and fundamental ways of doing things that are beyond the majority's will. In any taxation system those things refer, as I've already said, to what is in the common good, the general welfare and the public interest. In my and our party's estimation, Bill 7 is not in the public interest in terms of many of the aspects currently there. Many of the particular components we cannot agree with, and if the minister, along with his cabinet colleagues, were prepared to withdraw them, and perhaps to reflect on the erosion of municipal autonomy and take that out of the variable mill rate act, then maybe we could reconsider this piece of legislation; but as it stands now we cannot do that,

We thoroughly believe in decentralizing power. We don't believe in centralizing as many operations as possible in the hands of a few, We believe; in devolution of power, in returning as much as possible to the local level the decisions that affect people's lives on a daily basis, one of which has to be the taxation system, and in reinforcing those decisions at the local level. That's what we as a party believe in. That's what we did in many areas of legislation when we were in government, and that's why we will continue to oppose any move by this government to erode that autonomy which has taken so long to establish at the local level.

Earlier on I was talking a little bit.... I was thinking of closing, but I thought I'd give you a little more. Before we close, I would like to start a new area of discussion: alternatives to the present system of real property taxation.

I believe it is in the interest of the government and the people to try to discuss alternatives to legislation; to criticize constructively where we have to, but also to suggest alternatives. If only the government would listen; that would, of course, be the thing. That's the sad thing. We have a government so determined it's right in everything it does that it won't listen to thousands and thousands of British Columbians who oppose what they're doing. I am about to give this government some ideas and alternatives to the present system of real property tax, but unfortunately it is most frustrating because we know this government probably won't listen. However, we'll try because it's in the interest of British Columbians that these alternatives be voiced and talked about. If there's one party that is interested in the people of British Columbia, it's the New Democratic Party.

Interjections.

MR. BLENCOE: We're in opposition...

AN HON. MEMBER: Because you lost.

MR. BLENCOE: ...because we feel the truth is important. That's why we're here. As long as this government introduces legislation that twists and turns and doesn't tell the truth, we will oppose it. The truth will prevail in British Columbia.

Let me and talk a little about the truth behind property taxation. Despite criticisms made of real-property taxation, some of which have been voiced for over a century — and I've already talked about some of those criticisms in various pieces of legislation — the structure and philosophy of property taxation has changed slightly over the years. Not only is it a bad system, Mr. Speaker, but it hasn't had any major changes that could even make it look fair and right. The main reason for this lack of response is fiscal inertia on the part of government officials — and boy, has this government ever got fiscal inertia. If this government were serious about a real-property tax reform bill, it would sit down tomorrow with UBCM and say: "In the next six months we're going to come up with a property tax system that is fair, just and understood and is based upon your ability to pay, not what somebody will speculate in the marketplace." [Applause.] That's what you'd do. Mr. Speaker....

[ Page 1126 ]

HON. MR. PHILLIPS: You're not supposed to talk when they're clapping. Give it a little time. Put a little finesse in your act.

MR. BLENCOE: I'm bashful.

Mr. Speaker, I lost my place.... I've been trying to offer this government some thoughts about bringing in a property taxation system that answers all the criticisms that have come in over the years from other jurisdictions and from Social Credit Party members and supporters who, somewhere along the line, say: "We need a real property tax reform in this province." If this government is not prepared to do that, then the accusations that are levelled at you as a government, that you support the speculators and the landflippers, will be true. You will be supporting that $162-a-square-foot sale on Fort Street, which was clear speculation, and therefore you'll be supporting the incredible pressure that's put on those small businesses as they face high assessment and high taxes. You don't support small business one little bit. I'm sure it's not true that this government supports flipping of property and speculation at $162 a square foot. If it's not true, then you'll introduce the real legislation to end it and to bring in a taxation system that's fair, just and based upon the ability to pay.

This government, by introducing this bill, indicates to the people of British Columbia that it endorses land speculation, flipping of property and putting people out of business. That's what you're saying to the people of British Columbia. You haven't got the guts or determination to take on those parts of our society which create unearned wealth that we all have to pay for in the end. If you had a system that was based upon the ability to pay, you would guarantee that those land speculators and flippers who are creating all sorts of problems would be taxed properly in British Columbia. This bill does not pay attention to that sickness in our society at all.

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:01 p.m.