[ Page 1137 ]

CONTENTS

Routine Proceedings

Oral Questions

Use of government aircraft. Mr. Passarell –– 1137

Logging of Sombrio Beach area. Mr. Skelly –– 1137

Mr. Mitchell

Social Credit Party booth at PNE. Mr. Reid –– 1138

Treasury Board directive 4-83. Mr. Howard –– 1138

Alteration of budget presentation. Mr. Stupich –– 1139

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

Mr. Blencoe –– 1140

On the amendment

Mr. Skelly –– 1142

Mr. Lea –– 1147

Mr. Nicolson –– 1152

Ms. Brown –– 1156

TUESDAY, AUGUST 30, 1983

The House met at 2:05 p.m.

HON. MR. GARDOM: Mr. Speaker, I would very much like to ask all members to bid a cordial welcome to an all-party committee of legislators from the great province of Ontario who are visiting this side of the Rockies.

MR. HOWARD: In the same vein, I would like to extend to our guests a cordial welcome and a pleasant stay. While we are parochial enough to think they might learn something from their visit to Lotusland, the fact that this is a standing committee on members' services should certainly let us learn something from them, and we look forward to that.

HON. MRS. McCARTHY: I am very pleased to welcome today a member of the board of directors of the Pacific National Exhibition. I would ask the House to join me in welcoming Mr. John Hart.

HON. MR. RITCHIE: I am indeed proud today to introduce to the House three young ladies, excellent ambassadresses for the Central Fraser Valley. They are: Barie Ann Paterson, our Miss Abbotsford-Matsqui queen, and her princesses, Torie Burrow and Patricia Vanden Berg. Their chaperone is Charlotte Harris. Also in the gallery today are Mr. and Mrs. Jack Cook, very good supporters from my home ground, and Garry and Isa Holland. Would the House please welcome all of these friends.

MRS. JOHNSTON: I would like to introduce two of my constituents who are in the gallery this afternoon. These people are very hard workers for the Social Credit Party, and I'm very pleased to introduce Mr. and Mrs. Jim Howe from Surrey. Would you please welcome them.

MR. STRACHAN: Mr. Speaker, in your gallery this afternoon are three very close friends of mine: my wife Beverley, my son Dean and my daughter Jody.

HON. MR. GARDOM: Visiting also, from West Vancouver, are Mr. and Mrs. Bruce Claridge and their family. I'd ask all members to welcome them.

Oral Questions

USE OF GOVERNMENT AIRCRAFT

MR. PASSARELL: A question to the Minister of Intergovernmental Relations: did you fly home to Vancouver last night on the executive government aircraft?

MR. SPEAKER: Hon. member, the question should be addressed to the Chair, not directly to the minister responsible.

HON. MR. GARDOM: I would respectfully suggest, notwithstanding that the hon. member has a great interest in my welfare, that what I may have done yesterday evening is hardly a question that is either urgent or important.

MR. PASSARELL: Yesterday, in the newspaper, the Minister of Highways and Transportation (Hon. A. Fraser), who is in charge of the government aircraft, said that ministers who fly on the government aircraft must be doing so on official government business. A question to the Minister of Intergovernment Affairs: what official government business was the purpose of your flight to Vancouver last night?

HON. MR. GARDOM: I would like to inform the hon. member that I'm not going to share my diary with him.

MR. PASSARELL: A question to the Minister of Health: did you fly home to Vancouver last night on the executive government aircraft?

MR. SPEAKER: Again, hon. members, the question should be addressed through the Chair, not directly to the minister.

HON. MR. NIELSEN: I think the government House Leader is correct, but since the member asked the question and the answer may not be what he expects or desires....

The answer to the question specifically is no, but maybe ask me again tomorrow and I might have a different answer for today's trip.

MR. PASSARELL: Taxpayers' abuse, Mr. Speaker.

A question to the Minister of Human Resources: did that minister fly home to Vancouver last night on the executive government aircraft?

HON. MRS. McCARTHY: The answer is no.

HON. MR. HEWITT: I have a question for the member for Atlin. Can he advise this House: when was the last time he flew home?

MR. SPEAKER: Order, please. The member for Alberni.

MR. SKELLY: Mr. Speaker, I have a question for the Minister of Forests.

HON. MR. HEWITT: On a point of order, Mr. Speaker, I am an individual member of this House, and I have asked the member for Atlin when he last flew home.

MR. SPEAKER: The question is out of order, hon. member.

HON. MR. HEWITT: Can you give me some indication as to why it's out of order, Mr. Speaker?

MR. SPEAKER: Hon. member, questions cannot be asked of a member of the opposition. Those are the rules of the House. The member should be familiar with that.

LOGGING OF SOMBRIO BEACH AREA

MR. SKELLY: I have a question for the Minister of Forests. Section 4 of the Ministry of Forests Act requires the minister to manage provincial forests with regard to outdoor recreation, water, fisheries, wildlife and other values. In view of this legal requirement, will the minister explain why his ministry has refused a temporary moratorium on logging at Sombrio Beach to allow the Capital Regional District to investigate the outdoor recreation values associated with not logging Sombrio Beach?

HON. MR. WATERLAND: Certainly. If the member would read other sections of the Ministry of Forests Act and

[ Page 1138 ]

the Forest Act he would realize that it is also one of my responsibilities to manage the timber for timber production, and to try to do my best to ensure a world-competitive forest industry for British Columbia.

MR. SKELLY: Present stumpage rates are at an absolute minimum because of poor lumber markets. Logging Sombrio Beach timber now, for example, would produce $51,000 less in stumpage than it would have had it been logged last year at this time. In fact, after logging and road costs are deducted, the province will probably receive no revenue at all from the 40,000 cubic metres of Crown timber in the area. In view of the questionable economics of logging this area at the present time, especially when the minister says that markets will improve and that stumpage rates will increase later this year, has the minister decided to place a temporary moratorium on logging at Sombrio Beach until such time as the capital region has completed a study of recreational values in the area, to determine whether and by how much recreational value exceeds harvest value?

HON. MR. WATERLAND: No, I certainly haven't, Mr. Speaker. The member's numbers are very inaccurate. If I were to follow the philosophy that he proposes, we would shut down all timber harvesting in the province of British Columbia until markets increase and we can receive more stumpage. Certainly the member isn't naive enough to think that the major benefit from timber harvesting, manufacturing and forest activity in this province is through stumpage revenue. Surely he doesn't think that.

[2:15]

MR. SKELLY: The Valhalla study, which the government obviously accepted as valid, showed that 230 jobs could be expected from the tourist industry if that area went unlogged compared to only 14 jobs from the logging industry. If the minister is that concerned about jobs, surely the minister would change his mind and allow the Capital Regional District to investigate the job potential of using that area as park for its outdoor recreational values. What does the minister have to fear from a study of the alternative values of using Sombrio Beach as a recreational area?

HON. MR. WATERLAND: I really have nothing to fear. I'm not frightened or concerned. I think we have practised good multi-use in that area of the province, as we attempt to do in all areas. Timber and recreation are not the only values. By doing what we are doing, we can enhance job creation created by the forest industry in British Columbia, and we can have a good recreational area as well. In fact, we can practise multi-use and get the best benefits of all the resources which happen to occupy this land amounting to 130-some acres.

MR. MITCHELL: I have a question to the Minister of Forests. We all realize that Sombrio Beach is one of the last stands of natural virgin timber left in the Western Community. Has the minister been advised that Western Forest Products have had discussion on a proposed trade of Crown land within their TFL for the protection of Sombrio Beach?

HON. MR. WATERLAND: I'm aware of all of the discussions that have taken place in arriving at the decision we arrived at. Certainly land owned by WFP at Sombrio Beach.... They would like to avoid the apparent hassle that we have to go through in order to practise multi-use and recognize other resource values as well. The simplest thing for them would be to trade for another area where there is no conflict. Nevertheless, we are removing some area from productive forest land in British Columbia. Quite frankly, we cannot afford to alienate for single uses acreages of forest land in British Columbia which are needed to maintain both the forest industry in this province and jobs for those many people who work in the forest industry.

I think perhaps the members who are asking these questions should have a discussion with Jack Munro and see what his position might be on the subject.

MR. MITCHELL: If the minister can give me an assurance that if I can get Jack Munro's okay to protect Sombrio Beach he will protect it, I can give you that assurance.

Supplementary to the question from my colleague the member for Alberni, I know the government would prefer to centralize everything in Victoria, but does he feel that the government has insulted the CRD when they ask for a moratorium only to make an effective study on the economics of preserving this last natural stand in the western community for a park and to give them that opportunity at the present time? By okaying it.... The logging is an insult to the CRD. Will the minister confirm that they are trying to centralize it and they really don't care what the local elected people have to say?

HON. MR. WATERLAND: In response to the first part of the question, if the member can get the sanction of Jack Munro to give up jobs for his members in the forest industry by tying up that acre of forest land, yes, I will take it out of the forest. But he has to get a commitment from Mr. Munro to do that. The answer to the second part of the question is no.

SOCIAL CREDIT PARTY BOOTH AT PNE

MR. REID: Is it opportune at this time to raise a question relative to information asked for yesterday about the Social Credit booth at the PNE grounds? The Conservative Party that won last night didn't appear to need the space, but I have been led to get information today that the NDP are the ones that are spending the money for the $9,000 space. The Social Credit Party, under the restraint program, decided not to.

TREASURY BOARD DIRECTIVE 4-83

MR. HOWARD: Mr. Speaker, I'd like to direct a question to the Minister of Finance. On August 17 I asked the minister whether a certain Treasury Board directive, namely 4-83, which relates to the restriction of out-of-province delegations to one representative from British Columbia, was still in force or whether any alterations had been made to it. I wonder if the minister has an answer to that question.

HON. MR. CURTIS: Mr. Speaker, it is correct that the member asked the question. I accept his word that it was on August 17. I'm afraid that in the interval I've not had an opportunity, and I again take it as notice.

MR. HOWARD: Just as a supplementary, Mr. Speaker, August 17 was quite a number of days ago. Is this a reflection

[ Page 1139 ]

of the gross inefficiency in the Ministry of Finance to find a simple document?

MR. SPEAKER: Order, please. Hon. member, that is not a question.

ALTERATION OF BUDGET PRESENTATION

MR. STUPICH: Will the Minister of Finance explain why the government altered the budget estimate presentation — the manner of presenting estimates — as compared to previous years? Was it in order to conceal information about staffing levels in the public service or in order to withhold or not present information about staffing levels in the public service?

HON. MR. CURTIS: Mr. Speaker, I think that that could be dealt with more effectively at the time of estimates. I would be happy to deal with it then at great length — to the extent that the member for Nanaimo wishes. But I would refer him to statements which I made at the time of the presentation of the budget, and also since then in this House and outside, indicating the change with respect to full-time equivalents in terms of giving not less but rather more information to this House in terms of staff salary costs.

In his preamble to his question, the member used the word "conceal." I find that kind of word in that particular context to be somewhat offensive. Quite the contrary to concealing, it is this government's determination, and it is my determination as long as I hold this portfolio, to share information with members of this House. That was what was done in this instance.

MR. STUPICH: Well, Mr. Speaker, I think that is a subject we will pursue under estimates. But the government has tabled Bill 17, and it's one of those in the process to implement the so-called "footie" or FTE system. We did discuss this the other day in discussing second reading of that. In the meantime the information being presented to us well in advance of that bill being discussed, let alone implemented, is not available in estimates, so it makes it difficult for us to compare one year with the next. Again I have to ask: why did the government make this change in advance of presenting the legislation, let alone passing it?

HON. MR. CURTIS: I have no difficulty in both steps having been taken: one to utilize that format, if I may use the term, for the 1983-84 budget, and the other dealing with it in legislation at the same time. There is no conflict in those two actions, which are actually parallel with respect to the same policy.

HON. MR. HEWITT: On a point of order, Mr. Speaker, I'd refer you to standing order 47(1). If you'd give me a moment for explanation, I'd like to elaborate on the reason for my question. It does state in that first section that questions may be asked by "other members relating to any bill, motion or other public matter connected with the business of the House...."

The purpose of the question is that out of public funds comes expenditure for travel to and from constituencies. I believe there are 36 travel expenditures per year allowed a member. I asked the member for Atlin (Mr. Passarell) whether or not he had been home. My supplementary question would have been whether or not the public funds of this province paid for it. I would like your ruling, Mr. Speaker.

MR. SPEAKER: I would refer the minister to the fifth edition of Beauchesne and the nineteenth edition of May, where it is clearly suggested that questions to private members would only be possible if they held the position of chairman of certain committees. Other questions directed to private members are out of order.

HON. MR. HEWITT: Mr. Speaker, I was asking for your ruling. However, could I request the Speaker...? So that this confusion might not happen in the future, could such an item be included in the rules of order of this House, rather than referring to Beauchesne or May, which I don't have in front of me for easy access?

MR. SPEAKER: Hon. member, as a member of the government you are in a position to introduce such changes far better than I am.

MR. BARRETT: Mr. Speaker, I'd like to bring to your attention standing order 47(1), which deals with placing questions on the order paper. If the minister had read the section openly to the House, it would have been clear that his stand was out of order. The member can get up and place a question on the order paper at any time. He was using standing order 47 to delay the important work of this House.

MR. REYNOLDS: I ask leave to make an introduction.

Leave granted.

MR. REYNOLDS: Mr. Speaker, I would like to welcome to the the House and introduce a very brave soldier, a man who has been out fighting the wars for the last few days and whom we've missed very dearly in this House. I would like to ask the House to welcome back to this chamber a very brave soldier fighting for his cause, the hon. member for Coquitlam-Moody.

MR. ROSE: Mr. Speaker, in acknowledging the House's great welcome on my somewhat less than triumphant return, I would like to say it's always important to fight the good fight, and also to return bloodied but unbowed.

HON. MR. SCHROEDER: On a point of order, I believe that, in order for an hon. member to gain the floor, leave is required. Of course, we would be happy to grant leave.

MR. SPEAKER: The matter, hon. members, having been concluded, can we possibly proceed to the next point of business?

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.

[ Page 1140 ]

PROPERTY TAX REFORM ACT (NO. 1), 1983

(continued)

MR. BLENCOE: I thank the government for giving me the opportunity to pursue an interesting and learned debate about property tax and tax reform in the province of British Columbia.

Mr. Speaker, I have in the last few hours been trying to give this government the opportunity to review this piece of legislation in terms of some particular sections that we find unacceptable, not only to the people of British Columbia, but also to the municipalities in this province — sections that are offensive in terms of municipal autonomy and further centralization of power into the hands of cabinet.

[Mr. Strachan in the chair.]

[2:30]

I have also tried to give this government a rundown on some of the alternatives that are available for a special select committee to review tax problems at the local level, and to perhaps decide once and for all that what we need in the province of British Columbia is an intelligent, sensible analysis of the many problems that are faced by local municipalities and their taxpayers, in terms of trying to deal with real property tax in the province of British Columbia. This morning I went through a number of alternative tax structures on behalf of our party, trying to let the government know that we believe there are alternatives worth considering. We've been trying to be a constructive opposition in terms of providing some viable alternatives, meaningful dialogue and possible solutions and courses of action. It is my belief, and also that of our party, that there is room for a non-partisan discussion of this particular issue. We would like the government to take the opportunity and time to take a look at some of the alternatives that I have been putting forward, to consider that they might be making a mistake in centralizing power and taking over some of the traditional areas of responsibility municipalities have enjoyed for many years.

This morning I went through the net income taxation concept and the gross rental tax concept. I discussed the British rates taxation concept, the user charges concept and the land value increment taxation concept, and touched upon the site value tax concept. These are all ideas that could be looked at and analyzed in an atmosphere of trying to find some consensus on this particular issue in the province of British Columbia. I would remind the members of the government that local taxpayers have been waiting for a long time for some major and, I would say, revolutionary changes in the nature of how municipalities generate revenue for their use. Yet we have Bill 7 before us which really is only a tinkering, a band-aid. Indeed, certain sections of it are quite abhorrent to our belief in the power of a local municipality to set its own policies and principles, to collect its own taxes and set its own spending priorities. Local autonomy must be maintained, and as a party we will continue to support that forever.

I would like to take a few minutes to give the government the opportunity to consider the concept of a municipal income tax system. This is the final alternative that I would like to give today; a final alternative in terms of fiscal structure that could be considered a municipal income tax proposal.

Two types of income tax have been used by municipalities in the past: tax on personal income and tax on corporate profits. This form of local taxation is not uncommon in North America, and it's becoming increasingly more popular. Today this tax is levied by one-quarter of the largest cities in the United States. In these cities the tax generally falls only on earned income rather than on interest, dividends or capital gains. However, there are many noteworthy exceptions to this general rule. Some municipalities levy a flat rate on all forms of income.

HON. MR. RITCHIE: On a point of order, Mr. Speaker, I'm at a loss to know the relevance of income tax to Bill 7. It seems that again this member does not understand the principle of this bill. It has absolutely nothing to do with income tax; it has to do with property tax.

DEPUTY SPEAKER: The second member for Victoria will continue, but the member is reminded that we are dealing with a property tax bill. If the member can relate his remarks to that principle the House will be well served.

MR. BLENCOE: The point is well taken, Mr. Speaker, but I am endeavouring to indicate to the provincial government that the bill before us does nothing in terms of trying to resolve the deep-seated problems of the real estate property tax. I'm trying to indicate to the government that there are alternatives they could look at, analyze and introduce as real changes to the problems of collecting taxes at the local level. The principle of this bill is way off the mark in trying to come to terms with the inequalities, the unfairness, of real property tax in British Columbia. I'm trying to tell particularly the Minister of Municipal Affairs that there are other areas to look at. Other jurisdictions all over the world have taken the time and effort to analyze and administer tax structures for municipal purposes that are far fairer, and that reflect the ability to pay far more than does the real property taxation system.

I think it's useful to have in this House this constructive discussion of alternatives. I don't want to say something is particularly bad because we oppose it, because there are some obnoxious sections in the act. Rather, I think it's up to us in the opposition to give the government some opportunity to look at alternatives, and to provide some of those constructive alternatives for their consideration. Our party has always done that, and we will continue to do that.

If I may, I will get back to talking about municipal income tax as a viable alternative to real property tax in British Columbia.

As I was saying, this tax is levied by about one-quarter of the cities in the United States. In these cities the tax generally falls only on earned income rather than on interest, dividends or capital gains. However, there are many noteworthy exceptions to this general rule. Some municipalities levy a flat rate on all forms of income; others impose a progressive rate. New York City, for example, imposes a graduated rate which ranges from 0.4 percent on the first $1,000 of taxable income, to 2 percent on taxable income over $30,000. In other cases the tax is calculated as a percentage of the tax payable to the federal government. Nevertheless, 80 percent of these cities taxing income have adopted a flat-rate tax for administrative ease. The tax rates imposed in these municipalities vary from one-eighth of 1 percent in Williamsport, Pennsylvania, to 2 percent in Newport, Kentucky. The majority of cities have found a tax rate between 0.5 percent and 1 percent to be sufficient for their needs.

[ Page 1141 ]

Various municipalities have also levied a tax on corporate net profits attributed to activities within the taxing jurisdiction. A flat rate of between 1 and 2 percent is usually levied, except in New York City, where the tax rate is 5 1/2 percent of net income. Of course, we know what's happened in New York City in terms of not maintaining their infrastructure and allowing their basic ingredients that keep that city alive and well. Today, of course, they face a major financial crisis. In my estimation, because of the shift by this government to say that municipalities now must pay 75 percent of their storm drains, their sewer systems and their underground services, this province and its municipalities, towns and villages may be faced with that particular crisis as well. They may have to put off maintaining that infrastructure properly, because they just won't have the money to do it. That's a serious issue that we have to face in this House.

Typically the determination of taxable profits follows the federal tax legislation, with some minor adjustments. The major difficulty in administering a municipal corporate income tax is fairly allocating corporate net income where a business is operated in more than one taxing jurisdiction. Most municipalities use the Massachusetts formula to perform the necessary separation of net income. This method is based on a simple average of the three ratios. They are as follows: (a) real and personal property within the tax unit as a percentage of the total property holdings of the corporation; (b) gross receipts in the tax unit as a percentage of the gross receipts of the corporation; and (c) total wages, salaries and compensations for personal services paid within the tax unit as a percentage of the total of each compensation paid by the corporation. The resulting average percentage is then applied to the net income of the corporation to obtain the total taxable income attributable to the taxing jurisdiction.

Other ratios are sometimes used to make this computation. For instance, the city of Dayton, Ohio, I believe, substitutes the cost of production for total payroll figures. These variations in definitions and ratios can lead to undertaxation or double taxation for the corporation in different municipalities. The Massachusetts formula, however, is quickly becoming the uniform method of allocation. I would suggest that the Massachusetts formula is one that this House could consider, along with about seven or eight others that I have suggested over the last day or so, as a way to relieve the local taxpayer and to try and introduce a fair taxation policy and formula for local taxpayers.

A municipal tax on either corporate or individual income recognizes that ability to pay is not today dependent upon property holdings, but rather on income flows. If I have said it once, I've said it ten times: ability to pay has to be introduced to the municipal level. We have accepted that premise at senior levels of government. No one likes to pay income tax, but I think most Canadians accept that some tax has to be collected for the collective interest, to maintain health and things like that. But we try in our taxation policies to introduce the principle of equity. The principle of equity is non-existent in real property taxation formulas. That is what we have to work on.

Municipal tax on either corporate or individual income recognizes that ability to pay is not today dependent upon property holdings, but rather on income flows. To that extent a degree of equity is achieved. However, where a flat rate is used, or where only earned income is included in the tax base, the tax becomes regressive and discriminatory. One means of balancing the tax equities is to permit the taxpayer to claim exemptions and deductions. Despite this, those cities in the United States which use a local income tax are of a split opinion as to the extent to which exemptions and deductions should be allowed.

I reiterate that as a party we are not saying that one or the other of these particular concepts I'm putting forward is the answer. But, indeed, there are viable alternatives that are being utilized in other jurisdictions. I think if we put our collective heads together, along with the interested parties in the province of British Columbia, we can come up with a real alternative to real property taxation.

Some of the smaller municipalities contend that the use of deductions would seriously diminish their revenues by restricting the tax base and increasing administrative costs. On the other hand, most larger cities follow Detroit's example of allowing a personal exemption of $600 for the taxpayer and each dependent, but requiring the tax be paid on all forms of income. These jurisdictions take the view that the use of exemptions is more equitable, that it introduces an element of progressivity even to a flat-rate tax structure. In addition, since the number of individuals with taxable income is thereby reduced, there is an administrative benefit in the reduction of the number of applications filed. Only in New York and Baltimore, which follow the federal tax scheme, are personal expenses also deductible.

[2:45]

One of the problems facing a jurisdiction — I'm trying to go through the pros and cons of each side — that levies local taxes is the determination of who should be taxed. Clearly residents of the tax unit should bear a fair proportion of the tax load. In addition, however, there is considerable justification for taxing non-residents who are employed in the city. These commuters increase the city's congestion costs and exploit its services. In terms of benefits received and ability to pay, the non-resident employee should be subject to local taxation. Since the commuter does not enjoy as many services as does the resident, a fair allowance has to be made. One alternative is to tax the non-resident only on that portion of income actually earned in the jurisdiction. To avoid the difficulties of separating and allocating income, many jurisdictions have simply adopted a lower non-resident rate. For example, in all those cities in Michigan which impose a municipal income tax, the non-resident rate is one-half of the rate levied on residents. In New York City, where residents are taxed according to a graduated rate on income minus deductions and exemptions, non-residents are taxed at a flat-rate of income which is reduced by a sliding-scale of exclusion.

The taxation of non-residents raised the spectre of double taxation. I and my party recognize that it is something that would indeed have to be looked at very closely, particularly where a person works and resides in different jurisdictions, each of which claim taxation power. One solution would be the expansion of the tax jurisdiction to a regional or even a provincial level. However, due to local diversity and to a passion for local autonomy, which of course our party supports, other approaches seem preferable. As a result, most American cities have adopted one of the four alternatives I have suggested.

A third approach has been tried in another city in Pennsylvania. Except for Philadelphia, the jurisdiction of a domicile has a prima facie tax priority, but half of this unit does not impose a tax at a rate of less than 1 percent. The jurisdiction of employment may levy a tax rate differential. As a result, residents of communities surrounding a central city which

[ Page 1142 ]

imposes a tax would pay a tax, unless their jurisdiction of domicile levied at least a rate of tax of a full 1 percent. In practice, tax competition is encouraged, and all surrounding suburbs have levied a full 1 percent tax on their residents, thus the primary objective of a local income tax to compensate the central city for the use of its services has been somewhat eradicated.

I believe that the income tax is a viable alternative to the present system of municipal taxation in British Columbia. As a source of revenue the tax is relatively simple and economical to administer without unfair results. The investigation by the Bureau of Municipal Research in Ontario has uncovered no jurisdiction that has completely abandoned the property tax. That goes along with what our party is suggesting: that we need a two-tiered system. There may indeed be a retention of the property tax for services that directly benefit property; and I can think of a number of those, one of which I have talked about: the service by the police to protect property. To do so, i.e. to totally remove property tax, would strain the income of the taxpayer, while wholly overlooking his property holdings as a taxable asset. But where the two tax systems have operated in tandem, at least some of the tax burden has been shifted from real property to personal and corporate income. Even in this supplementary role an income tax would serve to relieve many of the unintended but very real pressures and inequities of the present property tax system.

It is our belief as a party that we do have the collective wisdom in this province to once and for all take on the difficult job of introducing a new taxation formula and process for generating revenues for municipal purposes. I believe nearly all British Columbians want this Legislature to take that on. I have suggested that this House — under the direction, I presume, of the government — could establish a select committee or a task force to come in with serious recommendations that will promise the people of British Columbia that they will be relieved of the heavy burden of the property tax system. It is a formula that has outlived its time, and it's one indeed that we believe should be altered.

The bill as presented is unacceptable to the New Democratic Party. The variable mill rate on its own, in isolation — if that were all this bill did, we would seriously consider our position. But the bill in its present form has some very obnoxious components. We cannot support a number of the sections in his bill. We believe it's a removal of the rights and the privileges and the autonomy of local government that have been established over a long period of time. We believe that those elected officials do a good job. They are accountable; they are fine people who know the business of their jurisdictions and how to levy the taxes and where the priorities should be for their municipalities, and how much they should tax their electorate.

Municipal government and elected officials have a right to retain their local autonomy in taxation policies. Certain sections in this act we cannot support, and if the government persists in pursuing this piece of legislation in its present form we will not be able to endorse or accept it.

I have tried to offer the government some viable alternatives for investigation. I have said that our party is quite prepared to enter into negotiations and discussions with the government on alternatives. I believe the people of British Columbia want the government to take up the challenge of ending over 100 years of complaints that the real-property taxation is unfair, archaic and not based on the ability to pay.

I believe the government should reconsider its position, should take time out to consider certain sections of this bill that are abhorrent and are not supported by local government. To allow the government to take the opportunity, a few months of consideration, I would like to move an amendment. The amendment is that the motion be amended by leaving out the word "now" and adding the words: "on this day six months hence." That motion is seconded by the hon. member from Alberni (Mr. Skelly).

DEPUTY SPEAKER: The motion is in order.

On the amendment.

MR. SKELLY: I would like to congratulate the mover of the motion for the fine presentation he has made in the Legislature over the past few days. I can recall some long speeches in the House when the wrecking-crew that is now in government was in opposition back between 1972 and 1975, especially the presentation from the member from South Peace River (Hon. Mr. Phillips) at that time. That presentation was characterized more by its time than by its content. I would certainly like to congratulate the new second member for Victoria for presenting the numbers of alternatives that he presented for the government to consider, for being so very positive in the way that those suggestions were presented and for giving the government such a tremendous amount of food for thought. I am sure that the government will require at least six months to take a look at all the suggestions that were presented by the second member for Victoria (Mr. Blencoe) and consult with local government and various groups of property owners to find out just what they feel about this bill presented in the House this summer. Possibly they will come back with some of those positive changes that the second member for Victoria presented. I'm sure Mr. Speaker will agree that it was a very positive proposal and that the time spent in this House by all members listening to those proposals was worthwhile. I'd like to congratulate the member for that.

One of the reasons I'm standing to support and second the motion to hoist this bill for six months is that it's full of errors. In the first place it's erroneously entitled Property Tax Reform Act. Mr. Speaker and other members in the House will be aware that over the past decades — in fact, over the past century — many efforts and suggestions have been made to reform the property tax system in this province. Unfortunately very few have been done on a comprehensive and consultative basis which takes the reasons and the proposals out to the people of this province to find out what they would like to see accomplished by the property tax and how they would like to see the property tax system reformed. In fact, few governments have been less effective than this government in presenting legislation to reform the property tax system.

During this session the government has been less effective than it usually is in the type of legislation that it has presented. Property taxes will be increased during a period of economic decline as a result of some of the so-called reform measures that are presented in this and in the Miscellaneous Statutes Amendment Act. I think this bill deserves the careful analysis that's been given by the finance critic and by the second member for Victoria over the last few hours of debate on this bill. In fact I feel it's unfortunate that members on the government side have felt content to sit on their assets and not

[ Page 1143 ]

participate in the debate and provide comments and proposals for change along the lines of the positive comments and proposals for change that were presented by the second member for Victoria. We are concerned that property taxation could be changed so that it strikes harder on the poor than it does against the wealthy under the so-called tax reform act we're currently dealing with. It's a major concern we have.

During the throne speech and budget speech, the government appeared to talk about fairness; in fact, they used fairness on a number of occasions in talking about their legislation. Of course, that was before the legislation was permitted and the government had clearly tossed any notion of fairness right out the window. We find this legislation, in terms of human rights, loaded against minorities such as landlord and tenants. It's loaded against those who rent in favour of those who own property. This legislation appears to be loaded against those who have a tremendous amount of wealth compared to those who have very little wealth. This bill also gives the Lieutenant-Governor powers that we feel should be feared by all people in the province who respect democratic institutions. This bill allows the Lieutenant-Governor-in-Council behind the closed doors of cabinet — in secret, Mr. Speaker — to decide which classes of properties will be taxed and to decide at which rate those properties will be taxed. We feel this is a dangerous precedent. It's not really a precedent with this government, which has established many dangerous and questionable precedents in terms of democracy before this particular one. We feel that allowing the government to establish among private property owners different categories of property subjected to different rates of taxation is extremely dangerous to the democratic principle and the principle of fairness.

[3:00]

Over the last 100 years in this Legislature we've seen legislation passed where certain categories of property are exempted from tax or subject to reduced taxation because of the type of service they provide to the public. It would be unwarranted, uneconomical or in some other way unwise to tax that property at the same rate as other properties. For example, as a former member of a school board, as I was some years ago, I notice that school buildings aren't taxed because they provide a service to the community that is so valuable that it would not make sense to raise the cost of education to the community by taxing them. All of us accept those types of exemptions because we all know that the benefits flow to the people from the exemption of taxation on school property. Another reason why we accept those exemptions....

Interjections.

MR. SKELLY: Did I hear somebody call for a quorum?

DEPUTY SPEAKER: Now that it's been brought to my attention officially, the Chair recognizes that there is not a quorum. I'll ask that time be stopped, and we'll see if we can summon members.

Standing order 6 is now satisfied. The hon. member for Alberni continues.

MR. SKELLY: I'm reminded by the member for Comox (Ms. Sanford) that up to this point there wasn't one cabinet minister in the House, and now there are only three cabinet ministers in the House. During this period of debate, we've been talking about productivity, and it seems, in terms in productivity in this Legislature, that cabinet ministers have been the weakest of all members of the Legislature. That's unfortunate, in terms of the emphasis that that group seems to place on productivity.

DEPUTY SPEAKER: The member for Kootenay rises on a point of order.

MR. SEGARTY: The member can't blame us for not coming in when his own members won't show up to support him in debates.

DEPUTY SPEAKER: That's not a point of order. Could the member relate his remarks to the bill before us.

MR. SKELLY: I was talking about certain classes of property that were exempt from taxation or that received partial exemptions from taxation because of the service that those properties give to the community. Those properties, as you are aware, include schools, universities and public buildings. The reason they are granted reduced status or tax-exempt status is because it would result in an imposition of increased costs upon the community if those buildings were taxed. What this legislation gives to the Lieutenant-Governor-in-Council, behind the closed doors of cabinet, is the right between private properties to decide on tax exemptions for those private properties, or to decide that only a percentage of the property will be taxed, or that they will be taxed at a lower rate than other classes of property.

That's why we're concerned, particularly about this government that has shown, especially with the legislation recently presented in the House, that it has a certain bias against certain classes of people in the province: against those who rent, as I said earlier, as against those who are landlords; or against those who are minority groups, as against those who in their own minds designate the majority. This government seems to have developed certain prejudices against certain classes of people in the province and also seems to have taken it upon themselves to support the rich and the powerful in the province, especially those wealthy corporations and large property holders who, they feel, should be protected from the brunt of this economic depression and the burden of the depression placed on the poor and on those who receive salaried incomes or hourly paid incomes.

It appears that this government favours high-income earners over low-income earners, and the rich over the less wealthy in this province. That's why we're concerned that when cabinet makes its decisions behind closed doors it is going to make decisions in favour of those property owners whom it has already favoured in other legislation. That gives us a reason to be concerned and to fear what the government is going to do when it determines to vary the tax base of certain municipalities in order to favour certain properties against certain other properties.

There are other problems in the community which this legislation does not directly deal with, but which, of course, have been the subject of lobbying effort against the government. For example, it is interesting that large corporations have been complaining recently about the amount of taxes they're paying to local governments. They complain that this tax level has caused them to be uncompetitive in world markets. There are many reasons why a large resource industry, or a forestry, mining, energy or pipeline company would

[ Page 1144 ]

be uncompetitive in world markets, everything from bad management to currency problems, but not necessarily the problem of taxes paid to local governments. Here's an article from the Crown Zellerbach News of June 1983, where the corporation is complaining about the $19 million bite that the local tax man is taking out of Crown Zellerbach even though that company is losing money during the 1983 year. For example, Elk Falls pays to the municipality of Campbell River $10 million, and Crown Zellerbach's headquarters properties pay $11,000 to the community in which those properties are located.

[Mr. Pelton in the chair.]

The interesting thing about Crown Zellerbach's complaint, as it relates to the proposals made by the second member for Victoria (Mr. Blencoe), is that they are attempting to relate the company's income to the large amount of tax they're paying to the local municipalities and school districts through the property tax requirement. The company itself is attempting to relate its tax problems with reference to property tax to its income problems with reference to world markets. This relates to what the member for Victoria said in this way: if the property tax were switched from one which was based strictly on the value of property owned to one which is based on income as well, then it would probably be fairer to those forest companies operating in our province to have their income considered and their taxes partially forgiven during the low-earning years when they're suffering as a result of market conditions, and have them pay more during the high-income years, when their profits are a little better and they can afford to pay those taxes. This is, I believe, what the second member for Victoria meant when he was attempting to relate property taxes to the income of corporations.

The largest corporation operating in Port Alberni is MacMillan Bloedel Ltd., a large integrated forest products company that operates in many places in the world. Occasionally MacMillan Bloedel publishes a booklet called "MB in B.C.," in which they give their financial results and talk about the amount of local taxes they pay in British Columbia. Using 1978 figures, municipal property taxes paid in B.C. by MacMillan Bloedel were $19.7 million. Compared to 1983, 1978 was a relatively good year for MacMillan Bloedel, and during that year MacMillan Bloedel wasn't complaining about the amount of tax it had to pay. But the last two years have been poor ones for MacMillan Bloedel. Income and earnings have dropped and profits have been eliminated, and MacMillan Bloedel has been in a loss position right up until the last quarter. This year local property taxes against MacMillan Bloedel are estimated to be somewhere around $21.5 million, even larger than they were in 1978.

You can see what improvements would result, Mr. Speaker, if the property taxes against large property holders and resource companies such as MacMillan Bloedel, who are subject to the vagaries of international markets, were partially based on property owned as well as on income; then during their high-earning years MacMillan Bloedel would have paid a little more in property taxes and in their low-earning years they would have paid a little less, and as a result our major forest company operating in Port Alberni would have been a little more competitive in international markets and able to employ more people, and would have been a lot better off financially in terms of its ability to recover from the current recession than they are under the current property tax scheme, which is based on a very arbitrary value attached to the values of pulp and saw mills and other forest industry properties in Port Alberni and in British Columbia.

[3:15]

Each year the Council of Forest Industries publishes a fact book called "The Forest Industry Fact Book." It is an excellent overview of the forest industry and the contribution it makes to British Columbia, and gives a breakdown of the employment, jobs created and profitability of companies. It also covers, on page 30 of this year's booklet, the property tax burden incurred by forest companies operating in British Columbia. This is based on a survey of 14 integrated companies that did business in British Columbia in 1982. As you can see from the diagram, Mr. Speaker, the 1981 net property tax paid by those 14 integrated forest companies either to municipalities or to the provincial government was $97.6 million. In 1982, in spite of the fact those companies were in the middle of an economic recession, the property tax had increased by 24.5 percent. So in the worst possible year, when companies' earnings figures were at their lowest, property taxes increased and were an even further inhibition to the profitability of those companies and made them even less competitive in international markets than they already were as a result of the drying up of those markets during the international recession.

So this is a problem we should examine. If we're going to be examining the principle of tax reform or calling what we're doing in this Legislature tax reform, then we should be looking, as the second member for Victoria said, at the relationship between the incomes of corporations and the value of the property that those corporations own. If we only take into consideration the value of the property, then during the worst possible market years, when earnings are lowest and profits are non-existent, we're going to see those companies either shut down, cut back on employment or lose their competitive position in international markets. I know that none of us in the House would like to see that happening.

What applies to large businesses applies even more to small businesses. We're even more concerned about those small businesses, because there are roughly 121,000 of them in the province. Most of them are small, kind of mom-and-pop operations which are living virtually on a shoestring. We think of the small corner store; we think of small retail outlets and restaurants, maybe employing six, seven, eight, nine or ten people — in any case, less than 100 people. Those people are living even more on the margin than the large integrated multinational industrial concerns who, when recovery does take place, will see their profits returned. These people may go out of business in the recession and never be heard from again. They'll be a burden on local creditors and local taxpayers. These are the people whom we should consider when we are considering reforms in property tax legislation.

Let me give you another example from Port Alberni....

AN HON. MEMBER: There is no quorum.

DEPUTY SPEAKER: Thank you, hon. member. In accordance with standing order 6, I'll ring the division bells to get a quorum.

Interjection.

MR. SKELLY: Listen. Read Hansard.

[ Page 1145 ]

DEPUTY SPEAKER: We now have a quorum in the House. Would the hon. member for Alberni continue, please.

MR. SKELLY: Thank you very much, Mr. Speaker. Gee, I lost my place so maybe I should go back to the beginning. I think what I was talking about, though, was the fact that we can see that levying taxes exclusively on property causes problems for large integrated business enterprises. What can be said for those large integrated enterprises is even more true for the small enterprises.

I wanted to use the example of two retail stores which operate in Port Alberni. One is Woodward Stores Ltd., which employs a large staff in retail sales, has a large area of floor space and performs a good service for the citizens of Port Alberni. In fact, during economic slowdowns, strikes and other problems that we experience in the forest industry, stores like Woodward's that have a local commitment have even allowed striking or unemployed workers to buy food on credit, and have been very generous in their credit terms and in allowing those people to pay back for food which they've purchased on their credit cards. So the store has demonstrated its commitment to the community, and it runs a large store with a large staff and employs a lot of people from Port Alberni.

On the other hand we have Sears, which, again, is a large, integrated retail company. But it has now expanded into such services as insurance, financial services, and selling stocks and bonds, as well as the regular lines of business it ordinarily conducted, which were catalogue sales. As a result, Sears has a very small floor area in Port Alberni, a very small staff. I'm not saying that the commitment of its management or its employees to the citizens of Port Alberni is any less than Woodward's; however, because of its small floor area, because most of its business is done through catalogue sales, it may do the same volume of business in Port Alberni as Woodward's but in fact its property tax is a lot less. So the commitment of Sears to employing people in Port Alberni, or to building a large retail store in Port Alberni is much lower than Woodward's and yet Woodward's is taxed more because of its greater commitment. From that point of view the property tax makes no sense at all.

The second member for Victoria was saying that maybe we should reconsider property tax, which is basically unfair when I compare these two stores in Port Alberni, in favour of a tax based partly on property, partly on income. Sears and Woodward's will then be subject to the same level of taxation, and competition between the two stores will be much fairer than it is currently, when Woodward's is vulnerable to a larger property tax even though Sears may have the same volume of business, or be greater in dollar terms. That's just another way in which the property tax, taken alone....

AN HON. MEMBER: Another way to raise prices.

MR. SKELLY: Yes, it does raise prices. Woodward's, because they pay a higher property tax, has to charge higher prices in Port Alberni, or else has to subsidize the prices in Port Alberni through other stores. That's one of our problems. We shouldn't have that kind of subsidy. Every store should be able to stand on its own. What happens is that a Sears catalogue division is probably paying huge property taxes in Winnipeg and Toronto and very little in Port Alberni, and yet Sears is doing more business in Port Alberni. We're saying here that the way it's applied now is unfair. The second member for Victoria made an excellent point when he said that tax on small business should not be based entirely on property, that it should be based on property and income, which would improve the fairness of competition between those two stores.

What applies to large retail organizations like Woodward's, Sears, Safeway and other stores that generally operate in large areas and do a large volume of business also applies to the smaller businesses operating in a particular community. This is one area where, if the government were seriously concerned about tax reform, I think they would remove the property taxes from those small businesses altogether, except for a nominal property tax. It is in the area of small business that most jobs are created. They are created in those 121,000 small businesses — restaurants, motels, retail sales — and these are the people who are in the worst financial crunch, because every time their taxes go up they have to cut staff. Every time their property taxes go up the operators have to work longer. It becomes more and more of a problem. Every time the property taxes go up they have to cut corners in some way; they become less profitable, become less in terms of being potential employers in the community.

Property tax discriminates much more heavily against the small-business sector than against the large-business sector. It does that in another way as well. The large integrated natural resource firms that operate in places like Port Alberni, the large mining companies, generally have markets that are overseas. Very little of their product is sold on the domestic market. As a result, they can to a limited extent pass the cost of their property tax into export markets where prices are determined very differently from the way they are determined locally. The Carter commission that looked into taxes federally back in 1966, I think it was, indicated that taxes against corporations was one of the most regressive forms of taxation levied in Canada. That would also apply to property taxes against small businesses, because these small businesses, these retail concerns, restaurants, motels, deal at arm's length with people in their own communities. When property taxes are passed on to them they increase their prices, and that price increase is immediately passed on to people in the community, causing a localized inflation, causing an increase in prices and causing a decline in the general economy of that community. The taxes that are levied against small businesses in this province are the most regressive taxes that most of us will feel — aside from user fees in hospitals, because most of us at one time or another end up going to hospital, but they strike harder at the sick. Aside from the other user fees of the type that have been imposed by this government, some of the most regressive taxes are taxes applied against small businesses such as property taxes and corporation taxes, which must be immediately passed on within the region to the customers of those local small businesses.

If I had my way, I would eliminate property taxes from small business altogether, except for a nominal tax on the value of the property. I am talking about a very nominal tax on the value of the property because these are the people that create the most jobs; they create the real price impact in the communities which they serve, and we should do all that we can in terms of tax reform to lower the burden of taxation on those small businesses. Whatever we do with the larger businesses that have their price impact far beyond our borders and in international markets, where in many cases they are

[ Page 1146 ]

very small participants and don't really have the power to establish prices, which are established by larger forces outside their control, that would be my preference if we were talking about tax reform. We would virtually eliminate property taxes on those small businesses that do small business within local communities and have to pass the cost of those taxes directly on to consumers, thereby increasing the price of goods and services in the economy and creating serious problems for all of us in terms of what we have to pay for goods and services on a daily basis.

One of the problems I see with this legislation is that it was really developed without adequate consultation with municipal governments. Now the minister is going to say that before bringing in legislation to establish a variable mill rate he did go around and meet with a number of municipal representatives, possibly even with the Speaker, that he met with a number of representatives from a number of communities from around the province and that many of those communities did express an interest in establishing the variable mill rate. I think there are legitimate grounds for concern by those municipalities about this bill, because once the bill comes in, then the provision for consultation ends. In this bill the only provision for establishing the various classes of properties that will be taxed is the power of the Lieutenant-Governor-in-Council behind closed doors — it is done in secret. The Lieutenant-Governor-in-Council may establish favourable rates of tax on a lower tax base for property held by its friends. It may establish different classes of property based on the value of those classes of property, and tax the wealthy much more easily than it taxes the poor.

MRS. JOHNSTON: Rubbish!

[3:30]

MR. SKELLY: I am not talking about this bill doing that, of course; I am talking about the mechanism in the legislation that allows the government to do that. In a democratic society democracy doesn't happen on one day every five years; democracy is a continuing procedure whereby the citizens' demands to be consulted by their government are satisfied on every possible account. This is why in municipalities we have public hearings on zoning changes. We have public hearings on a number of issues, including waste management plans. Many issues have to go to public hearings in municipalities. Municipalities must conduct their business in open public meetings. Even though committee meetings can make resolutions, those resolutions have to be reported back to public meetings. The same applies to school boards and school trustees. All of the business of those local governments must be transacted in public, and reasons can be asked in public as to why those decisions were made. This provincial government seems to feel that democracy is something that is allowed to happen once every five years on election day. After that the doors close, the people are ignored, consultation is eliminated and we have no opportunity for that continuous exercise of democracy that is based on consultation.

[Mr. Strachan in the chair.]

That is a very dangerous part of this legislation. I am not saying that cabinet will not consult with the public. I am not saying that under this legislation cabinet will not consult with municipal governments or with the Union of B.C. Municipalities. I am saying that there is no provision in this legislation that requires cabinet to consult with municipalities, property owners and with the general public in order to determine which classes of property are going to be recognized for tax purposes and which tax classes of property are going to have which tax rates levied against them. That is something that should be done in every piece of legislation.

During the 11 or 12 years that I've been a member of this Legislature, I've examined most of the legislation that's on the statute books in this province. A lot of it has gone through since I was first elected to this House in 1972. In comparing legislation in this province with legislation in other provinces, I find that this legislation is far more authoritarian than legislation, for example, in Manitoba or in Ontario. And I'm not saying that it's because Manitoba has a recent history of having NDP governments. It's simply that the legislative tradition that has developed here in British Columbia has been a very authoritarian tradition.

We have a Ministry of Transportation and Highways Act, as I've said before in this Legislature, which starts off under section 5 saying: "The minister, in his absolute discretion, may...." Mr. Speaker, this piece of legislation that we're dealing with now follows along that authoritarian tradition of centralizing all power in cabinet. For that reason it is anti-democratic legislation, and that's why we're concerned about it. It allows the government to treat its friends favourably. It allows the government to treat certain classes of property or certain classes of property owners favourably in terms of the rates of taxes that are levied against them.

Just the mechanism that allows the government to do that is undemocratic and unfair to the people of British Columbia, because it does not give the people the opportunity to influence the government in public to consider their case. The government, in every piece of legislation that it presents, should have a provision which allows the public to become involved in the discussions around that legislation and also allow the public to become involved after the legislation has passed in changing government policy and in influencing government policy in public. Right now people can influence government policy. We've seen the people who have visited cabinet. We've seen the people who are friends of this government, and who have been able to influence this government. They are the wealthy and powerful. They are the large corporations rather than the small. And this is why we are concerned. This is why we are concerned that these issues can be decided behind the closed doors of cabinet rather than in the public arena.

Mr. Speaker, during the last seven years at least, this government has never made a practice of calling the select standing committees of the Legislature or referring legislation or critical issues of the time to those select standing committees of the Legislature. And that is a defect in this government. What we should be doing is providing opportunities at every possible occasion to go out and meet with the people, to go out and find out what the people's concerns are about legislation such as this and to bring recommendations from the people back into the Legislature so that we can be better informed and so that the people can be better informed as to what the legislative process is all about. This Legislature, more than most, is like an ivory tower.

If you'll grant me a few seconds to wind up, I would hope that the government, in a spirit of cooperation, will consider the proposals we've made and the very positive proposals

[ Page 1147 ]

made by the second member for Victoria (Mr. Blencoe) to examine income related taxes on property, other tax procedures Mr. Speaker, I would like to move adjournment of this debate until the next sitting of the House.

[Mr. Speaker in the chair.]

Motion negatived on the following division:

YEAS — 19

NAYS — 29

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

MR. SEGARTY: Mr. Speaker, I ask leave to make an introduction.

[3:45]

Leave granted.

MR. SEGARTY: Mr. Speaker, it's a pleasure for me to introduce to the House Leta Salanski, her son Daryl and daughter Shelley, who are from Grasmere, British Columbia. Also visiting the precinct today is Mr. Grundy and his family from Cranbrook. I'd like the House to give them a warm welcome.

MR. LEA: Mr. Speaker, for just a brief moment I thought the member for Kootenay was going to speak in the debate.

AN HON. MEMBER: No!

MR. LEA: He'll go back to his riding and tell them that his own colleagues won't let him speak because he's really too liberal and they don't really like him. That's what some of them down there told me.

Mr. Speaker, I don't suppose there are more than two or three people in this Legislature who understand all the intricacies of property taxation; I'm one who doesn't. Those who understand it must have made a concerted effort; it must have been their only endeavour for some time. It is complex and very difficult to understand. But we are now in second reading, in which we are discussing the broad principles of property taxation and taxation generally.

Within our community there are those who believe that any taxation is bad. As a matter of fact, the other day I was reading an article by one of the movers and shakers in the Fraser Institute, Mr. Black, who feels that any taxation by government can be likened to robbery. He feels that taxation is not something someone does voluntarily; that it's something people are coerced into by a government; it is not a voluntary action, therefore it is undemocratic; that any taxation is bad. Of course, the Fraser Institute stands alone — like many of their other ideas. There aren't that many people who would go along with the extreme views of the Fraser Institute and its participants. The Social Credit government is the only group I know of that listens to the Fraser Institute about the kinds of public policies that should be developed. No one else.

Interjection.

MR. LEA: That's good. Isn't it interesting, Mr. Speaker, that the Minister of Highways (Hon. A. Fraser), who has yet to speak during this term of the Legislature, has a lot to say without getting to his feet. But he has very little to say when it comes to discussing, defending or offering contributions to legislation.

There are the two extremes: the Fraser Institute's no taxation whatsoever — a completely laissez faire economic system; and those who would tax you to death and leave nothing at all. Surely it is our duty to come to some sort of moderate tax system that is fair and equitable.

For the past two days we've listened to the second member for Victoria put forward some ideas on taxation. I don't think the member for Victoria is saying: "'Accept these in their entirety." He is saying: "Let's put some of these and other ideas to the test. Let's put those ideas in front of an all-party committee, which would go around this province and share ideas with the public, and listen to the public's ideas of what an equitable and fair taxation system would be." What is wrong with that?

Interjection.

MR. LEA: The Minister of Small Business and Economic Development (Hon. Mr. Phillips) said: "We did that once." That's true. It may be news to the minister, but times change. I know the minister doesn't, but times do. There are different cures for different problems at different times. It would be pretty damn stupid to go after the Red Army with a slingshot. But the minister, if you're going to follow his thinking in other matters, would do exactly that. The fact of the matter is that times are changing, and we really do have to examine taxation policies. I have to admit that I've changed my mind two or three times on property tax. One of the problems with the Social Credit government is that they feel it's a sign of weakness to change one's mind, not a sign of strength. I submit that it is a sign of strength for a government to be flexible; it's a sign of strength for the government to re-examine its own policy; it's a sign of strength not to be afraid to go out to the people whom we serve and ask them their opinions.

When we start dealing with a variable taxation rate, there are going to be real problems. Communities are going to start vying with one another for industrial and commercial development. There's going to be a taxation policy that has no uniformity anywhere in it in terms of all the municipalities of

[ Page 1148 ]

B.C. It isn't too bad if you're like Terrace and Prince Rupert and there are a hundred miles between you; you're not right up against one another's borders. But what about places like Delta and Surrey? What about all of the municipalities on the lower mainland? Can you imagine, if each one of those municipalities is allowed to set its own rates in every category, and they're actually competing with one another for industrial and commercial development, based on who is going to give the best tax rate to the people who are going to come in....

Interjection.

MR. LEA: The Provincial Secretary (Hon. Mr. Chabot) says: "Isn't that local autonomy?" Just look at the mess you could get yourself into, because unless....

Interjection.

MR. LEA: Mr. Speaker, would you shut that person up? I don't mind interjections from all over the place, but when he does it, it's disconcerting — it's nonsense. When Barney Rubble speaks, it's too much.

If that municipality needs X amount of dollars to run its business....

Interjection.

MR. LEA: Mr. Speaker, I'm going to wait.

DEPUTY SPEAKER: Order, please, hon. members.

MR. LEA: If a community....

Interjections.

MR. LEA: Mr. Speaker, I'm not going to put up with it. I'll wait.

If a community needs X amount of dollars to run its business for a current fiscal year and they are going to vie with other communities in terms of special taxation breaks for an industry to come into that community, but they still need X amount of dollars, then the shortfall brought about by the taxation break is going to mean that some other segment of the community that pays taxes is going to have to pick up the shortfall. We know who that will be. It will be the residents. It will be the ordinary working people living in a community and paying residential tax who are going to have to make up the shortfall. On the one hand, the city will end up giving a new economic development a tax break. But because they still need the same amount of dollars to operate, they're obviously going to have to get it somewhere else. It's like every other form of economics. You can only transfer it around, unless the pie increases. You can't increase it to anyone without taking it away from someone else unless the pie increases.

That isn't happening in municipalities. They're losing out all over the place. They're losing out in cost-sharing programs from the provincial government. Water and sewer programs, in which the government used to share 75 percent and the local community 25 percent, are now turned around exactly the opposite. Now the community is going to have to come up with 75 percent and the provincial government is going to come up with 25 percent.

School taxes. Over the years since Social Credit has been in power we've seen the provincial share to the local community diminish year after year. If these municipalities still need the same amount of dollars to operate their communities but revenues from the provincial government are shrinking, and then on top of that they start, out of desperation — because they need revenues — to make tax breaks for commercial ventures and industrial developers, hoping to recapture in the future.... There's going to be an intermediate period of hardship in that community. The only place the councils will have to go to make up the shortfall is the residential taxpayer.

The outcome of this piece of legislation for many municipalities — not all of them — will be that there is going to be an extra tax burden levied on the residential landowners to pick up the shortfall from taxation breaks to business. I don't think anyone can deny that that is probably, beyond a doubt, going to happen in a number of municipalities. If that's the case, is that what we desire? Is that the intent of the legislation?

HON. MR. PHILLIPS: On a point of order, Mr. Speaker, I have been listening very intently to what the member for Prince Rupert has been saying, and I would humbly suggest to you that he is speaking to the original bill and not the amendment. I would suggest that you bring that member to order, Mr. Speaker, and tell him to speak to the amendment or lose his place in the debate.

MR. LEA: Mr. Speaker, I'm very glad the hon. minister brought that up, because I'm trying to point out all of the reasons why the six-month hoist should take place, and therefore I am speaking to the amendment. But I do thank the minister for trying to help me. I know he was well meaning and definitely didn't have any skullduggery in mind. Right? You smiled! You didn't mean it, did you?

Mr. Speaker, what are we going to do about a very complex system that I'm afraid this piece of legislation is going to make more complex? It's almost like the transportation formulas that are worked out federally. It's a house of cards: pull one card out and the whole thing comes crumbling down. What we've been trying to do over the years since I've been in the Legislature is to dabble at reform measures to the property taxation system. The Minister of Industry and Small Business Development (Hon. Mr. Phillips) said we've already studied it once. He's wrong. We've studied it over and over again. And each time we seem to make it worse, regardless of who is on what side of the House. Because what we're trying to do is take a very complicated tax structure and do some little thing over here that we hope will straighten out the whole complicated mess, and it doesn't ever seem to work.

The biggest thing that's wrong with it is that it is so complicated. One of the appealing arguments put forward by the second member for Victoria (Mr. Blencoe) is the simplicity of the procedure that would go into place if we followed some of his suggestions.

AN HON. MEMBER: Which one?

MR. LEA: Which one? Mr. Speaker, the first member for Surrey (Mrs. Johnston) has been a council member in Surrey, and I am sure has had much more to do with municipal taxation of property than I have, but she is not contributing to the debate. Why not contribute to the debate? This is not

[ Page 1149 ]

really a partisan issue. We're dealing with a pretty basic thing in society. We're talking about the ways and means by which we're going to deal with property taxation, which affects everyone: the renter, the property owner, the worker — no matter where he works or what his station in life, I don't believe that there's anyone in this House who wouldn't like to see a simple, fair and equitable property taxation. We're not going to get it under this bill, because it's tinkering.

Interjection.

MR. LEA: That's the problem. We've done that so many times: we've said we've got to start somewhere, but we never start at the beginning. We always take the system and say: "Let's plug this hole this year. Let's do this this year. Let's bring in a piece of legislation this year that will do this." But we never take the system completely apart to try and find a simple, fair and equitable solution.

The second member for Victoria may very well be putting ideas forward that won't work, but my God, let's at least discuss them. I doubt very much whether the members on the other side have any more idea than I do whether what the member is saying is a workable solution or not. All they're saying is: "It's from an NDP member; wipe it out. It's from the opposition side of the House, don't listen to it. If it's coming from the NDP it's crazy; therefore don't listen." It's backed up: "Hear, hear!"

[4:00]

One of the biggest problems in this Legislature is that this government will not listen to constructive criticism. They have got their minds made up, and that's it. They are the most rigid people whom I've ever had the misfortune to debate with. They believe that once they've thought of something it's perfect; it's the absolute panacea, no matter what we're talking about. In eight years under this government I can recall only two amendments ever being accepted from the other side of the House, and one of those was from one of their own members. They will not take amendments. They will not listen to constructive....

MR. VEITCH: Not so.

MR. LEA: What do you mean not so? Look at the records. No more than twice in eight years, and I'm probably being 100 percent too liberal in that.

AN HON. MEMBER: Liberal!

MR. LEA: There are different meanings for liberal. You see, Mr. Speaker, when you're dealing with people who are basically uneducated.... I don't mean that they haven't been to school; I mean that they're uneducated. There's a difference. One of the nice things about having people over there who would listen to reasonable arguments, even if they reject them after, would be the pleasure of a legislative assembly that's working together to try to solve common problems. We do not have that here.

Mr. Speaker, you yourself are a thoughtful member. You put forward ideas, and over a period of time you're going to find — or now it's the member for Dewdney (Mr. Pelton) — frustration at a government that won't even listen to its own back bench. That's the kind of government we have. I know that new members don't believe that. The members in the House on the government side still think that somehow or other they have a special place of being able to convince government to do something other than the original step that they've taken. It just will not work. You are dealing with a very rigid, ideological group who sit on the treasury benches. Don't expect them to listen to you back-benchers either, because it just isn't going to happen.

I venture to say that if this government brought in any piece of legislation, no matter how abhorrent, ridiculous or inane it was, those back-benchers would vote for it. In fact, we've had members from the other side of the House stand up and say that while they oppose the legislation in every way, they are going to vote for it.

AN HON. MEMBER: Is this on the bill?

MR. LEA: We are putting forward, we hope, reasoned arguments as to why we should hoist this bill. We're not speaking to the bill; we're speaking to an amendment, Mr. Member.

AN HON. MEMBER: Tell the truth.

[Mr. Strachan in the chair.]

MR. LEA: Yes, on both sides of the House.

One of the things that I said during the throne speech was that the new members are yet to know the anguish of having to vote against their conscience and with their party. Already we're seeing it. Mr. Speaker, I don't believe that there is one of them, in good conscience, who can vote for this legislation. Many of the people in this Legislature — and it's basically the new back-benchers who've come in....

DEPUTY SPEAKER: Hon. member, at this point I must advise you that I'm having a lot of trouble trying to relate your comments to the principle of the bill, or even to the principle of the amendment. If the member could relate his remarks to the bill, it would be most appreciated.

MR. LEA: I suppose that's the complexity of my argument. I'd rather put it on me than you, Mr. Speaker; I'm having no problem following it at all.

DEPUTY SPEAKER: You will relate your remarks to the amendment or you will discontinue. Those are the rules.

MR. LEA: Absolutely right. We're talking about the reason it should be hoisted. I'm suggesting that the members on the other side of the House are new members — new to this Legislature. A six-month hoist would not only give the public a chance to digest the changes that we're discussing, but it would also give government back-benchers a chance to try and do something that has never been achieved before; that is, convince their government that they're wrong. It's never been achieved.

Mr. Speaker, to me it's incredible that we can have 26 pieces of controversial legislation in front of us, and not one person from the back bench finds anything wrong with any of them.

DEPUTY SPEAKER: Hon. member, to the principle of the property tax bill.

[ Page 1150 ]

MR. LEA: Mr. Speaker, I'd rather not do that because I'd be breaking the rules.

DEPUTY SPEAKER: No, I don't think you would, hon. member.

MR. LEA: I'm speaking to the amendment. You want me to speak to the legislation itself?

DEPUTY SPEAKER: Yes. The amendment to the legislation — the property tax legislation.

MR. LEA: Exactly, Mr. Speaker, what I'm asking is for six months. Is six months going to be the ruination of the province? Is it wrong, as the member for Alberni (Mr. Skelly) said, to have democracy work every day, 12 months a year, every year? Is democracy only to be carried out when we vote every four or five years? Or is there an ongoing process of participation and consultation with the people who are going to be affected by the legislation? Is it wrong? I don't think there's anyone that can say it's wrong.

MRS. JOHNSTON: Twenty thousand people said yesterday that they support our program.

MR. LEA: Did they speak to you personally, Rita?

MR. REID: They might as well.

MR. LEA: Did they speak to you, Bill?

DEPUTY SPEAKER: Order, please. I'd ask the hon. members not to interject, and the member for Prince Rupert should...

Interjection.

DEPUTY SPEAKER: Order!

...address the amendment.

MR. LEA: Mr. Speaker, I think it proves how very nervous they are about this piece of legislation. Not only will they not get up and debate the legislation but they are somehow trying to make out that Bill 7 was the reason that the Conservatives won in the by-election yesterday.

Interjections.

MR. LEA: Mr. Speaker, the reason we're asking for a hoist is that we would like to see some ability to pay written into the legislation. It seems pretty ridiculous. I think we all know people who have property and improvements that are worth quite a bit of money, but when the taxation comes in they can't afford to pay it because they have no cash flow for a particular year, or a particular couple of years. Doesn't it seem a little cruel of government to say to a business person who owns their own building and runs a business in it: "You've had a couple of bad years and can't pay your taxes because cash flow is down. Now I'm afraid we're going to put your building up for a tax sale. You're out of luck. Two years of bad luck for you and now we're going to give you a nice little double whammy. We're going to take your building and put it up for tax sale." Wouldn't it be more equitable if that business person were allowed to pay more tax per year during good times and in those bad years he could pay less? Doesn't it make sense?

MR. MICHAEL: It's already in effect.

MR. LEA: No, it's not. Mr. Speaker, one of the members over there says that's what the variable tax is all about. If for no other reason, we should have a six-month hoist so that member can read the bill. That is not what the variable tax is all about. Variable tax will only work from category to category; there are no individual exceptions. The municipality can only change the tax rate for a category, not for an individual. Right, Mr. Minister? Explain it to your back-bencher.

Mr. Speaker, need we say more? A back-bencher is going to get up and vote yes to this legislation when he doesn't even understand it. He probably hasn't even read it. I think it's stretching the point to say that a Social Crediter may need six months to read a bill like this. They may need six months to read it and understand it, obviously. We actually have someone who's willing, on a moment's notice in this House, to get up and vote on a piece of legislation when he candidly admits he doesn't really know what it's about.

Interjection.

MR. LEA: You were just asking me. I see. It's a little test, Mr. Speaker, to see whether I knew. Is that right?

Mr. Speaker, isn't that proof enough? A government back-bencher didn't know that variations in the mill rate can only be done from category to category, not on an individual basis. In doing that you're not dealing with the real problem. The beauty of having it based to some degree on income is that you can deal with an individual case.

Let's take a commercial category. A commercial category could include, say, a drycleaning firm and a gas station. If they're lumped into one category, then the drycleaning firm may be doing really well and the gas station not well at all. But no matter how they're doing financially they both have to pay tax according to the same formula, one based on property value and improvement value. Wouldn't it make more sense to individualize the tax system so that it related to how people were actually doing business-wise? We do that with ourselves, Mr. Speaker.

Interjection.

MR. LEA: Yes, a tax based on profit and loss. That may be worth looking at. When the minister yells across the floor at me, "Is that a recommendation?", I go back to when I first started speaking and say I'm no expert. But I would like to know what the experts think. I would like to know what the people who have to suffer under a taxation policy think. We should go out to the residential homeowners, to the landlords who own apartment buildings, and see how a tax policy affects them and their tenants. We should go out to the industrial sector. We have some things to think about, and it'll take six months at least to think about them.

The pulp mill in Prince Rupert: city taxation on a tonne of pulp amounts to $22. We're looking at a $450 tonne in order to break even in the international marketplace where we sell our pulp. Now $22 on $450 is quite a bit of money, when you consider that it isn't only corporate tax, business tax, property tax, improvement tax and capital tax on equipment;

[ Page 1151 ]

we're looking at a number of things all lumped together, bringing $22 against every tonne of pulp leaving Prince Rupert. That's a significant factor in examining a tonne of pulp in the marketplace. Is there a better way to handle it? And that's whether the pulp mill is doing well or badly. It doesn't matter. As the member for Port Alberni (Mr. Skelly) pointed out, wouldn't it be a more reasonable approach to put taxation, wherever possible, on the ability to pay, as opposed to a formula that cuts across the board, that fits some and doesn't fit others, that doesn't take into consideration good or bad years? Corporate tax does; income tax to citizens does.

Interjection.

MR. LEA: Not necessarily a municipal income tax. We are talking about a cost-sharing arrangement between the provincial and federal governments and municipalities. Municipalities are being starved for money. Regardless of how we relieve that starvation, we do have to find some solution to feeding those tax dollars into those municipalities so they can do the kind of jobs they were elected to do at the local level.

Even as they are starving for tax money to do the kinds of things they should be doing, and want to do, this provincial government is cutting back on cost-sharing of revenue to the municipalities, starving them even more.

[4:15]

Somehow or other this problem has to be solved. We are not going to solve it with a bill that lets them compete against one another for tax dollars, and that is basically what this piece of legislation does. The pie is only so big at the upper level too. The minister wants all the municipalities to compete with one another for business. There are other ways of competing. Quality of service would be one. That way you are at least putting all communities on an equal footing. They have the same tax rate and the same rules, rules they can really apply in competition. Efficient well-serviced lots, efficient well-serviced commercial sites — there can be a cooperative measure there too between the federal, provincial and municipal governments. I really believe Social Credit has forgotten its roots when they start starving a municipality.

A really good example of why I think this bill should be hoisted for six months is not the municipalities themselves but the regional districts, where the problem is even more immense. This bill won't work because many of the cost-sharing programs are already being cut back. In Queen Charlotte City, a community in my riding, the provincial health inspectors have said the water is really not fit to drink. It is not a municipality; it is a specified area under the act. This is a small community, and the ballpark figure to put in a water and sewer system there is $5 million. We were barely able to put together the package of 75 percent sharing from senior government and 25 percent from the local government; now it is impossible, with the sharing 75 percent from the local level and 25 percent from senior government. Queen Charlotte City now has absolutely no possibility of getting a water and sewer program.

On the other hand, another branch of government, the department of health, tells us the water is not safe to drink. Is that well planned? Is that good government? Is that the kind of planning going into this piece of legislation that we are trying to have hoisted for six months so the government can rethink? I will admit that we are looking for other means to solve this problem in Queen Charlotte City. The minister has been available, and has made available $10,000 for a ground-water study to see whether we can't do it that way. I thank the minister for that. But once we have that study done, under the present formula we are still beaten. We cannot do it.

I have spoken with other ministers of municipal affairs and pointed out to them that the formula in place is one that may work very well for larger communities, but the formula does not work for the small unorganized communities in rural areas of this province.

I put that forward as an example of how a well-meaning formula can lead to disaster for individual communities, or for individuals or individual businesses. On this side of the House, the New Democratic Party is concerned that this piece of legislation which we are trying to have put aside for six months is going to have that same unjust, unfair, unworkable formula attached to it.

I am sure there must be other rural members in this House. I know, Mr. Speaker, that you are a rural member. I know that within your riding there are small communities that are suffering the same kind of unfairness under the water and sewer program that I have in my rural riding. This legislation will also affect individuals in your community unfairly and inequitably. It will. So why would you vote for it? Why would I vote for it? Why would anyone vote for it? Is it so that we, as legislators, hope that we can put this little piece of band-aid on there and say: "Well, we've done something"?

Interjection.

MR. LEA: Mr. Speaker, there is a real parliamentary no-no. The member for Shuswap-Revelstoke (Mr. Michael) says: "Graham, it's already in effect. You've got to vote for it." That's one of our real problems. What they did was put a policy in without legislative approval. A program went into effect that needed legislation in order to go into effect. That program was put into effect by this government before they had the legislative approval to carry out the program. More and more and more the power is leaving this Legislature — the elected members — and going into cabinet. That's what's happening.

There are municipalities that do not want it. As I understand it, the UBCM has said as a group that they do want it. The mayor of Prince Rupert, Mr. Peter Lester, who has spoken out fearfully....

Interjection.

MR. LEA: I didn't say he didn't want it. I said that he is putting forward.... As a matter of fact, he spoke to me about some of the fears he has. Mayor Lester is the longest serving mayor in North America, and has, in his time, worked for the Liberal Party, the CCF and the Social Credit. Only the Conservatives are left. Mr. Lester, the mayor of Prince Rupert, is — like myself — also fearful that the vying for economic and commercial business by communities is going to transfer the burden from the industrial-commercial section over to the residential owners. Now a man who has been the mayor since 1958 and who I think has always been a pragmatist, as opposed to a partisan, is concerned. When you have someone of that seniority and experience, who is pragmatic, concerned about a piece of legislation, then I think we have some obligation to be concerned ourselves. Those concerns, expressed by Mayor Lester from the municipality of Prince Rupert and which I've heard from other municipal officials, are real concerns. What's wrong? What's the rush?

[ Page 1152 ]

As the member for Shuswap said, it's already in effect. It doesn't matter whether this legislation passes today, whether it passes six months from now, or whether it passes a year from now. As a matter of fact, this may be a godsent opportunity. The program is in effect. Why don't we wait a while? Why don't we wait for six months and take a look and see how it's working and see whether some of the fears that we have will be realized or not? What's wrong with that? There's nothing wrong. It's in effect already, for all practical purposes, so why should we bring this legislation rushing through the House when many people have fears? It's inequitable, in our opinion.

We believe that there are other ways. I believe that there are members of the Social Credit back bench who could probably contribute to a bill to take a look at property taxation from the bottom up. As legislators, let's take a look at this kind of legislation and try to put it together as people who are concerned for our communities and for individuals, both people who are in business and residents. If we are truly concerned, then why don't we show our concern by trying to work together cooperatively to come up with commonsense legislation that will meet the test of time? I'm not saying that we won't have to look at it again down the road. Nothing should be cast in stone, but if this bill is allowed to go through the way it is, I think we're going to have real problems.

For those reasons, Mr. Speaker, I'd like to move adjournment of this debate until the next sitting of the House.

DEPUTY SPEAKER: Hon. members, under standing order 44, which I will commend to you, I find that that motion is an abuse of the rules and I am going to decline to put the question to the House.

MR. NICOLSON: I challenge your ruling, Mr. Speaker.

DEPUTY SPEAKER: The Chair has been challenged. Shall the ruling of the Chair be sustained?

Deputy Speaker's ruling sustained on the following division:

YEAS — 28

NAYS — 18

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

MR. NICOLSON: Mr. Speaker, the motion which we have before us now to hoist reading of this bill for six months is indeed well considered, appropriate and, I think, quite necessary. This constitutes the growing drift of government patching up a very leaky ship in terms of the property taxation system, which is overloaded. There are too many people being forced aboard the ship, and they are people who have to pay property tax — and using "person" in the broadest legal sense, in the sense of an individual, corporation, company or otherwise. All of the various people who have to pay property tax, whether they be tenants or owner-occupiers, are not being served by this piece of legislation. It is simply going to displace one of the problems from the backs of one group of people to those of another group of people.

We have to look at the basic underlying problems within the taxation system rather than making allowances whereby municipal councils can juggle among industrial, commercial, residential and various other property classifications. But having done that, there is also the sweeping power contained in this bill for the minister to come in and raise or lower those various parameters. So what we're doing in this bill is granting what is almost a war measures act. It puts excessive powers in the hands of the minister — which he, I am sure, denies he's ever going to use. But we have seen power abused in this country, and if it is a sweeping and abusive power it need not be given.

It has been suggested to this House by some of those members who speak from their seats, those who have a vote and no voice in this House, those speakers who never get on their feet and appear officially in Hansard on these bills — and we've seen evidence of this.... I don't know if anyone but the minister himself has spoken in favour of this bill. If one were to go by what has been said officially in Hansard by the members who have actually got up to speak on the bill, one would assume that this bill is doomed to failure. But the House is full of various back-bench groups. There's the one that's affectionately known as the dense pack back here, and I'm sure that some creative person will come up with an appropriate description for the other back-bench group which sits on that side of the House. It has been suggested by some of these members, from their seats, that we have to bring in this legislation because this is the system that we're already embarked upon, and for that reason we can't hoist the bill for six months. But we could get around that problem, and I suppose that there are indeed even other ways we could accomplish the same effect as hoisting the bill for six months. The minister could get up and put a sunset clause in this bill, which would assure us that this bill would not become permanent law and that there would be opportunity for very serious input from other agencies — particularly municipal governments, but also, I think, other forms of local government.

I don't see this bill solving some of the problems of property taxation faced by people who are probably the most seriously affected by the shortcomings of this system. I don't see even in this flexible system the flexibility that allows for considering the special case of a piece of property in my riding owned by a couple of very public-minded citizens who donated the property on their land for a nominal charge of $1 a year, and allowed an alternative school, the Argenta Friends' School, supported by the Society of Friends — or Quakers, as they're known — to be built on their property. That school has been assessed and taxed at rates absolutely at odds to what is in effect a charitable non-profit institution.

[ Page 1153 ]

The owners, who have made that very generous act of donating to this very important purpose the use of some of the land that is excess to their own needs, find themselves being penalized through very heavy taxation on these buildings, which, in my opinion, would have little resale value as there is not a great market — willing buyer, willing seller — for a school of this kind.

By passing this piece of legislation, we're not affording an opportunity for people like that to have an input into this legislation. I'm pretty confident that if this motion to hoist the bill for six months fails we will not see some last-minute amendment brought in by the government. I think that I will fail to convince the minister through this debate that this is the kind of thing that really does occur. I think it would only be if the people involved with the Friends' school and the people who own that property were afforded the opportunity, for instance, to appear before some of the groups that I'm going to suggest might be formed to have dialogue with the people of this province in order to involve them in a real democratic process. Should we allow this six-month hoist, then they would have an opportunity to make a more convincing case, because the minister himself might even be a participant, were we to take one of the several choices which I propose to offer the government in terms of positive alternatives to simply allowing this bill to go through the House. I say that you could put a sunset clause in this bill to ensure that it's not going to be a permanent bill.

I received another letter today from a person who owns a very important piece of property. This person is not a voter in my riding. This person lives in Calgary, Alberta, but is the owner of a piece of property which has a historical building on it — the Silver Ledge Hotel in Ainsworth. It would be one of the longest surviving buildings of its kind in the Kootenays. Ainsworth was the first village to be settled in the Kootenays after Fort Steele. The Silver Ledge Hotel is assessed, and thereby has to pay a huge amount of taxation in the regional district — a good portion of the taxation being for school tax but also for the regional district and municipal tax — and of course provincial government tax, which has also been increased by another piece of legislation this year. That heritage piece of property is, I'm sure, more of a burden than an asset, and any improvements to it would be looked upon as a responsibility. As I said, the owners of that property are not going to vote for me, not because of political ideology one way or the other, but because they are not residents in my riding; they do own property in my riding. They are not going to seek relief through this, but if there were an opportunity for us to consider this in a more permanent and careful way, we might see that there are several guardians of our heritage around this province who are carrying an inordinate financial burden in addition to their other responsibilities in making sure that buildings of this calibre and importance are maintained. Given six months, I think there might be a chance to get that message through to the public. But given 40 minutes, and the minister not listening to the debate but in conversation with one of this colleagues, I have not the confidence. I don't believe that the minister would show the same degree of rudeness were he to be part of some committee and listening firsthand to the people who own this particular piece of property or to the people involved in the Argenta Friends' School.

[4:45]

Another group of people, the senior citizens who own vacant land, are not going to be helped by this piece of legislation. Many senior citizens whom I know have held a little cottage on one lot with an adjoining lot, not in places like Vancouver, Burnaby or Coquitlam — although it is the case there as well.... It's the case in the city of Nelson; it's also the case in some smaller villages in what is basically a rural area, where people might have four acres but split into two separate titles; now it's all put under two folios. It was possible to have it under one folio at one time not too long ago, but the two separate lots are now put on two separate folios. In my opinion, there is nothing in this piece of legislation to allow for the flexibility to look at that situation. We have senior citizens who have one piece of property in which they don't use up their whole homeowner grant, but on the adjoining piece of property there might be some improvement — perhaps a garage — for the total unit, so it's taxed as an improvement on that other property. So senior citizens who should be paying the nominal $2 tax are maybe paying a few hundred dollars, and senior citizens who should be paying a few hundred dollars are having to pay considerably more than that.

Interjection.

MR. NICOLSON: Mr. Speaker, we've just had a suggestion that a piece of enabling legislation that was brought in by the NDP is the solution here: that is, tax deferral. I know that seniors can defer taxation, so that when they die it will be taken out of their estate. But if there was merit in that proposal when it was introduced, it was certainly downgraded by the opposition of the day. I think most people have been absolutely scared to take advantage of that, whether it's....

MR. MOWAT: Not true.

MR. NICOLSON: Well, I suppose, from the interjection from the second member for Vancouver–Little Mountain, it's not entirely true. But we have asked questions and very few people take advantage of it. I think a lot more seniors probably should take advantage of it. But that is not going to provide that kind of relief.

I'm talking about equity. You could have two identical pieces of property, each of which had the same house on it and the same garage; they could be side by side. But if the one difference is that one property is already subdivided into two lots, the senior citizen with the two two-acre lots pays more tax than the senior citizen with one four-acre lot. That problem won't be addressed by this. These are the kinds of inequities that could be addressed in coming up with a good piece of legislation, one that everybody in this House could support, if we were all a party to it. Regardless of what is transpiring with other bills, with debate on the budget, and various other things, this is an area where in the past we have shown that both sides of the House can function.

That brings me to one of the positive suggestions that I would favour for a course of action which would lead us to a better bill. I've only mentioned three kinds of possible inequities that would pop up if we were to look into this very carefully. I know that we would find other things relating to mobile home parks and taxation of mobile-homes on private property as a second residence, and so on. There are many things which I think could do a great deal, plus, of course, we could look at some of the very real problems of the industrial tax base. Indeed, I think some of the best input could come

[ Page 1154 ]

from organizations like the Union of B.C. Municipalities who, while they favour the principle of this flexibility, have very serious reservations about the sections of the bill which allow the minister to override all of those. In other words, we're not giving this flexibility to the....

Interjection.

MR. NICOLSON: I'm being heckled from my left here. The UBCM have real reservations about this legislation in terms of the fact that all the powers that are being given to them are also being extended to the minister, except the minister has the overriding power. If he doesn't agree with the way municipalities have done things, then he can step in. We could very well see this scenario.

Under this piece of legislation property tax relief might be granted to industry, because the provincial government is not going to pay its fair share — one can assume from what they've said — of the burden of cost of local government. There have always been cost-sharing arrangements with local government, municipalities, school boards, hospitals, and so on. Part of it is raised by local property tax and part of those local budgets.... A part is raised through property taxation, but the argument is that that property taxation has been getting greater and more onerous and has been growing faster than those budgets. That point is made very well by the B.C. School Trustees' Association and could as easily be made by the UBCM. They show in an analysis — and this was done in March of this year, just prior to the election — that a business in a survival mode during recession cannot afford to pay property tax in lieu of paying income tax. The fact that some of these companies are losing money.... Property tax is a fixed cost for these companies. This recognizes the problem, and I suppose that this flexible taxation system is the government's answer to trying to solve that problem. It's a very simple answer.

There is another thing that they point out in this document and that is that stores, factories, trees and mines don't vote. We could very well see the scenario where in order to stimulate and to give a little bit of a boost to local business....

As I've said on occasion, I certainly had a chance to look at the operations of B.C. Timber and get an appreciation for the amount, the burden and the ability to pay and what has become a tremendous growth in property taxation, and it wasn't very great at the time. So we could see that a local government in response to that problem might opt, even at their own political peril, to shift more of the burden onto residential property owners than it even is today. Then along comes the year — I don't know, 1986, 1987 or 1988 maybe — and there's a provincial election being planned; then we could very well see the provincial minister using his prerogatives under this act in order to bring the shift back to industry and commercial properties and off the backs of business, because stores, factories, trees and mines do not vote.

I believe that during a six-month hoist the BCSTA would have ample opportunity and could make that point. Being very candid, I'm afraid opposition members are not listened to too often. Just prior to me I heard my colleague speaking about only a couple of amendments ever being accepted from this side of the House, and I know that one time I did get an amendment put into a bill — it was the then Hon. Evan Wolfe as Minister of Finance. I did get a sunset clause; my amendment was accepted by the government. But that was a long, long time ago. It has become less and less likely not only that government would accept an amendment from this side of the House but that they would even take an idea from this House. That used to happen; it doesn't happen now.

Interjections.

MR. NICOLSON: Well, one good amendment in this bill would be a sunset clause.

In carefully looking over this piece of legislation I note that a proceeding of the Federation of Canadian Municipalities took place in June 1976. There were hundreds of delegates at that meeting. Many people — Muni Evers, for instance — reported on directions taken in British Columbia toward revenue-sharing and the progress that was made when the current Leader of the Opposition (Mr. Barrett) fought with Ottawa and succeeded in getting an increase in the export price of natural gas and shared that with municipalities. Mr. Speaker, we really do need to help municipalities, not to cut back and confiscate their sources of revenue and then just give them more flexibility with which to hang themselves.

HON. MR. RITCHIE: On a point of order, Mr. Speaker. As the minister responsible for this bill I find it very hard to follow the rambling of the member, who has yet to come to the part of the debate he should be on, which is a motion to hoist this legislation. He's now rambling around other programs. I would suggest that he get to Bill 7.

DEPUTY SPEAKER: The point of order is well taken. We have an amendment to hoist the property tax bill. The member has spent some time discussing assessment, which would be under the authority of the Minister of Finance. If we can relate to the bill and the amendment to that bill, the House would be well served.

MR. NICOLSON: If we had legislation just to set mill rates and there was no such thing as an assessment, then we would have no property tax. I'm sure the people of British Columbia would welcome that.

[5:00]

Mr. Speaker, we're talking about a product. You don't get an answer to this formula unless you have two things: a mill rate and an assessment. That's what adds up to property tax. In opening the debate on this bill the minister mentioned assessment. He said that this year, for the first time, the mill rate would be based against 100 percent assessment. Of course, we've been on 100 percent assessments for years and years and years. If the assessment is $125,000 and we take a certain factor of that — maybe 20 percent for one kind of taxation for school and hospital purposes and some other percentage for something else.... It's all based on 100 percent taxation. The minister himself referred to assessment in his opening remarks — I remember it well. But when there was dialogue and when people were listening to what the municipal levels of government had to say in these proceedings, there were reports of progress that had been made with several governments.

There was a report of the progress, dialogue, input and the involvement of the UBCM. Speaking on behalf of the UBCM, Mayor Muni Evers described the cooperation between the two levels of government in coming up with the way they felt they should distribute so much for housing starts, so much for — well, just for the percentage that their

[ Page 1155 ]

budget was of the total provincial budget and per capita grants and so on, to come up with a program that was equitable. The progress that was made at that time was improved upon initially, I think, when the Social Credit government came to office, but it has been eroded and has been in a decline since 1980. That's why we have the problem before us. If we could get that same kind of dialogue and hoist the bill for six months, there could be other solutions proposed.

At the same time, that attitude of cooperation between the municipal and provincial levels of government was also abundantly clear. Councillor Wolf from the province of Manitoba talked about how their provincial government had come up with a clear change: 2 percent of the personal income tax and 1 percent of corporate tax became available to the municipalities for taxation sharing. That would help to relieve and even out some of the problems that are being faced, and it might allow us to spend money where it is most effective, and that is at the local level, rather than centralizing it here by giving these people that kind of access.

[Mr. Pelton in the chair.]

This particular move is excluding people. This particular move should be hoisted for six months because of the very manner in which it was introduced. Imagine it being introduced right during an election. Then they said: "Well, this is what's going to happen if we are re-elected, but if the NDP is elected you will have to get a commitment from them." That was absolutely ridiculous. If they were going to do that, they should have called a session and at least had a piece of business like that. This is retroactive legislation. It is alarming that people....

HON. MR. PHILLIPS: Your leader supported this during the election campaign. You guys are all over the bloody block. You don't know whether you are coming or going.

MR. NICOLSON: I know the position we took on this piece of legislation: we said we would sit down with the UBCM and discuss implementation of this legislation should we have formed the government, and that didn't happen.

I am saying that this government showed that they didn't care. If they won, they knew what they wanted to do; and if they lost then they didn't give a damn about the people who would be left to pick up the mess.

MR. MOWAT: That's not true.

MR. NICOLSON: That is absolutely true. It was one of the most irresponsible things that I have seen happen in the 11 years that I have been a member of this House.

MR. MOWAT: They spoke out last night.

DEPUTY SPEAKER: Order, please. Could we please let the hon. member continue uninterrupted.

MR. NICOLSON: I sure would like to have some interjections that are in order. If they want to make some interjections, make sure they are relevant to the hoist of the bill. The interjections are getting tedious and repetitious. I did hear the news this morning. As a matter of fact, I made a special point of turning it on to see what happened in the by-election, so I don't have to be reminded about that any more today.

I feel there are several positive things that could be accomplished in six months, and I think there are four possible ways in which this could happen. I will give them in the order of my preference. I think the first thing would be a royal commission, and I say that very hesitantly but mindful of the success of the Audain Royal Commission into Mobile Homes. The fact that it was commissioned when I was minister and that it was adopted and implemented by the current government does show that a royal commission can work. I don't know what some of the members think of that royal commission. Was the Audain royal commission a good commission? Were the people on the commission good people? Perhaps they don't know how to answer that. Maybe they should send out for a note from the research staff. If Mr. Gibault were to send them back an answer, he would say, "For goodness' sake, say yes," because Mr. Gilbault was one of the staff people on that commission.

I think that a good royal commission could serve a very useful purpose. It could make an interim recommendation to the House in short order. I wouldn't visualize it as something that should go on for a long, long time, and we would be in a position within six months to bring in some very good legislation.

One of the ways this could happen is to have the six-month hoist. If we are going to have retroactive legislation, let's really have retroactive legislation. Instead of making it retroactive for a couple of months, let's make it retroactive for maybe three-quarters of a year. But let's make sure that having taken that distasteful we will have served the province with more than something that is going to have to be amended again and tinkered with next year, because that system is breaking down. A royal commission with good people, one not appointed on the basis of political ideology but appointed the way in which the Audain commission was appointed — hiring people regardless of their political stripe — would, I think, be the best way. I put the alternative of a royal commission ahead of my second choice, which would be a standing committee of the Legislature, but I think that given six months, a standing committee of the Legislature could do a great deal. I have seen standing committees of the Legislature come up with some very good reports. I'm not going to reflect on the operations of any committees, Mr. Speaker, but I think there's only one of the standing committees of the Legislature that's been plagued with some difficulties over the years. For the most part, given a task like this.... It's too important to play politics with. I think that both sides are forced into making some good decisions that could serve, indeed, not only to bring some sanity to the problems inherent in this bill — the oversimplification brought forward by Bill 7....

Bill 7, with all its flexibility, is a very dangerous experiment. Experimentation can be very exciting, but I think that only the experimenters should be in the laboratory. The trouble with this experiment is that all the people in British Columbia are going to be put into the laboratory. They're the ones who are going to feel the effects of the explosion, and not those of us in this House. So I think that if we were to have the Select Standing Committee on Municipal Affairs — of which I'm not a member.... That would be a very positive thing that could be done during the hiatus of a six-month hoist.

Mr. Speaker, my third choice would be a ministerial committee that would sit and listen to submissions in this area, not just from the UBCM but also from people. If it were

[ Page 1156 ]

ministers of the Crown, they would have to go out and meet with the public in a reasonable number of places throughout the province.

My fourth and last choice, if you must do it.... You people did do a Bawlf committee illegally, but I'm sure it could be done legally this time. I'm sure you could even commission a Socred back-bench committee to go out and face the people around the province on this issue and hear submissions. But hear them firsthand. Having done that, I think we might get a little bit of improvement in this piece of legislation.

This legislation is simple. It's pretty neat. It's not too hard to read. But if it's simple, as H.L. Mencken said: "For any complex problem there's a solution that's simple, neat, plausible and wrong." So, Mr. Speaker, we aren't doing justice to this very important problem. As we see it, people think the problem can be divorced from assessments. They think it can be divorced from mill rates. They think it can be divorced from revenue-sharing formulas with senior levels of government. They think it can be divorced from the taking away of the sewage treatment plant assistance act, or changing that formula ad hoc, midstream, but it can't. There isn't a simple solution to this. And if the government is confronted with complexity, I'm sure that even with the fourth choice — which is a pretty poor choice — we might see some improvement.

So for those reasons, Mr. Speaker, I support the concept of a six-month hoist. I would move adjournment of this debate until the next sitting of the House.

DEPUTY SPEAKER: Hon. member, under the authority of standing order 44, I'm sorry, but I must decline to propose the question to the House.

MR. NICOLSON: Under standing order 44, Mr. Speaker?

DEPUTY SPEAKER: Yes.

MR. NICOLSON: Are you ruling that this is an abuse of the House? I challenge your ruling.

Deputy Speaker's ruling sustained on the following division:

YEAS — 27

NAYS — 20

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

MS. BROWN: Mr. Speaker, I would think the government would welcome the opportunity to have a six-month recess on this bill to rethink their position. Everyone knows that for the most part the municipal level of government is very cooperative with the provincial level of government. What we have not had is the provincial level of government cooperating with the municipal level of government. I would think this government would have welcomed a second look, a proverbial W.A.C. Bennett second look, at its legislation. A number of issues were raised by my colleague the second member for Victoria (Mr. Blencoe).

[Mr. Strachan in the chair.]

I just want to note that the beautiful Speaker is giving place to the other Speaker. The grey fox is leaving the chair.

But in all seriousness, I rise to support this hoist because I think it's important that the government should take a second look at this particular piece of legislation. I know that one is not supposed to deal with this legislation section by section, but it is possible for one to look at the iniquitous section 6 of this bill. What we find is that the government has given to itself all kinds of power which really should remain with municipal councils and at the grass roots. [Applause.] Local autonomy is being eroded. [Applause.] I can see that I'm coming down with some zingers.

MR. REID: You're the zinger — the Cricket Zinger!

MS. BROWN: That little member in the back bench keeps nagging me about my cricket. Am I permitted to discuss cricket? No? Okay.

MR. BARRETT: A bit of a sticky wicket.

MS. BROWN: As my leader says, we've hit a sticky wicket.

However, in all seriousness, I want to talk about Burnaby and what happens to Burnaby when the government takes over decisions which really should have been made by Burnaby. You have to live in Burnaby to understand the decisions that they made in Burnaby.

MR. REID: Is that why you just moved there?

MS. BROWN: I have actually lived there for more than two years now. I am liking it better every day. We've got the number one golf champion of British Columbia — Nelford lives in Burnaby. We've got Dave Steen, who won a gold medal. Mr. Speaker, may I have leave of the House to make a statement about Dave Steen and the gold medal that he won? I think we should recognize the contribution that Burnaby made to British Columbia's athletic reputation.

Interjection.

MS. BROWN: Without anabolic steroids, that's right.

But in all seriousness, section 6 of this legislation really opens the door to allowing unscrupulous governments — and I'm not accusing this particular government of that — to dabble in land speculation on behalf of their friends. It says: "The Lieutenant-Governor-in-Council may make regulations in respect...." And it goes on to talk about all the ways in which the Lieutenant-Governor-in-Council, which

[ Page 1157 ]

means the cabinet, has all kinds of powers which really should belong to the local elected representatives of the municipality. Now the cabinet is taking unto itself all these kinds of powers, which would mean.... I'm looking at the note I made on the side of my bill which says "taking care of its friends."

MR. REID: Hard to believe, isn't it?

MS. BROWN: It is.

But, you know, Mr. Speaker, when you take this section and you put it in the hopper with all of the other kinds of changes which have been introduced by legislation, you realize that it's all part of the centralization process which this government has embarked on since the election on May 5 and which it continues to tell us it has a mandate for.

I cannot accept that when the people of, for example, Burnaby-Willingdon — the misguided voters of Burnaby-Willingdon — voted for a government member they were really giving this government a mandate to take away from the municipally elected politicians the right to make those local kinds of decisions about property taxation and the disposition of property, which this government is saying it has the mandate to do. I cannot accept that, and I don't want to say that the voters of Burnaby North and the voters of Burnaby-Edmonds are smarter than the voters of Burnaby-Willingdon. They have demonstrated more responsibility, demonstrated that they have a better sense of where good government lies. But I really don't believe that even the voters of Burnaby-Willingdon and Surrey, when they voted this government a mandate, gave them a mandate to take away from the locally elected representatives, from the municipal representatives, the kinds of powers to make decisions which this bill, through section 6.... I know we're not permitted to talk about the bill section by section....

Interjection.

MS. BROWN: Yes, but I mention section 6 only on behalf of the hoist. Those voters did not vote to give this government a mandate to deprive the locally elected representatives of their right to make local decisions about the taxation and disposition of property.

[5:30]

I think that should be brought to the attention of the government. My colleague the member for Victoria, in an incredible effort, actually spent in the neighbourhood of 14 hours of his time trying to enlighten and educate the government. Because he's a new member, he doesn't know you can't educate the government in 14 hours. He didn't know that, so he tried.

What he tried to say to the government before moving this hoist is that sure, you've been given a mandate; sure, you won the election on May 5, but the mandate was not to usurp the powers of local governments. We have always respected, no matter what level of government we are, the responsibilities of different levels of government. Right? We're not pirates; we're not buccaneers. We believe that municipal governments should deal with municipal matters, federal governments with federal matters, and the provincial government should deal with provincial matters. The disposition of municipal property and the taxation and decisions of that level should be made by the democratically elected local municipal politicians. That's where those decisions should be made. The provincial government should not be usurping the responsibility of those elected members. That means the big dogs can always move in and intimidate and take control of anybody's fire post, and that shows a complete lack of respect for the democratic process. That is why my colleagues on this side of the House, with my support, believe this piece of legislation should be hoisted.

One thing you can do when you take control of assessment is to start really fooling around in land speculation. A member of my constituency who actually sits on my executive is very knowledgeable about assessments. I'm not going to say that he works for the assessment committee, because I realize his job goes down the tube if I do. He doesn't work for the Assessment Authority.

AN HON. MEMBER: Is he a Socred?

MS. BROWN: He sits on my executive.

AN HON. MEMBER: Then his job's not safe.

MS. BROWN: That's right. He doesn't work for the Assessment Authority.

AN HON. MEMBER: Is he married to any relative of the Premier?

MS. BROWN: He may be married to a Tozer, I don’t know.

AN HON. MEMBER: Then he's safe.

MS. BROWN: When they assess a piece of property, they look at the price that houses in the neighbourhood have sold for, they look at what the property was assessed at a year or six months before and work out a kind of assessed value. This legislation says they have to go with actual value. How do you do that during a period of wildly escalating prices? When we go through a period where property values spiral something in the neighbourhood of 300, 400, 500 or 600 values in a matter of months, and then plummet by the same level in a matter of months, how do you actually assess a house based on actual value? It is impossible. You have to have some kind of stability, because you can have one person's property assessed in June at the prices at the top of the market, and then another person's property assessed when the prices are at the bottom of the market: two pieces of property right beside each other coming up with two different values. I know the first member for Surrey (Mrs. Johnston) understands this, because she continually has to deal with the assessment of trailer parks and what happens to them. Right?

MRS. JOHNSTON: Wrong.

MS. BROWN: Not trailer parks?

MRS. JOHNSTON: I don't know what you are talking about. Do you mean as an alderman?

MS. BROWN: I mean as a property owner, as an owner of a mobile park. Correct me if I'm wrong.

MRS. JOHNSTON: You are wrong.

[ Page 1158 ]

MS. BROWN: Okay, she's not the one who owns the mobile park.

MR. REID: You're looking at me now.

MS. BROWN: You own the mobile park.

MR. REID: No, I wish I did.

MRS. BROWN: Oh, he wishes he did.

AN HON. MEMBER: He owns a used-car dealership.

MS. BROWN: Okay, let's use a used-car dealership: a used-car dealership side by side with Knapp's nursery. Let's say that that member has had his used-car dealership right beside Knapp's nursery. Would it be fair for someone sitting here in Victoria who has never been to Surrey and doesn't realize that the property being used to sell used cars is being better utilized than Knapp's nursery to give an assessment that has nothing to do with the genuine return you get from that land? This is section 6, Mr. Speaker, in case you are having some difficulty in making a link with what I am saying. I do not believe that the provincial government should take unto itself, should intrude, should usurp that kind of decision that should be made at the local level. Both members from Surrey will tell you that no one understands Surrey as well as the people who live and work and have their business there, whether it is a used-car lot, Knapp's nurseries or whatever.

Let's look at the level of taxes. I can talk as the representative from Burnaby, of one of the municipalities that has one of the most tight-fisted members on its council responsible for finance of any council anywhere in British Columbia. No one has ever been able to criticize the Burnaby municipal council in terms of meeting its budgets, living within its budgets, and making responsible and serious fiscal decisions. Not even the members from Surrey can do that, because we have a reputation that is international in terms of good fiscal management. I think they're too tight-fisted. I think he's too tight-fisted.

MRS. JOHNSTON: You've got a good man.

MS. BROWN: Let the record show that the first member for Surrey says he's a good man. Now he's going to lose that responsibility. The provincial government, for whom she cannot say the same thing, because she doesn't know for a fact....

Interjections.

MS. BROWN: Your leader doesn't make these kinds of decisions. That's the mistake you keep making. A faceless bureaucrat makes these kinds of decisions.

We have in Burnaby — as the first member for Surrey said — and as the second member for Surrey (Mr. Reid) by his silence acquiesced to — one of the best, most responsible fiscal managers in all of British Columbia. Why then is the provincial government usurping his responsibilities?

Interjection.

MS. BROWN: Where is the Minister of Municipal Affairs (Hon. Mr. Ritchie)? Why is the provincial government usurping those responsibilities? Surely the provincial government is not accusing Burnaby of irresponsible fiscal management. Surely the provincial government is not accusing Burnaby of waste and of profligacy. That is not possible, because even as the government members in the back bench have been forced to agree, Burnaby could not possibly be accused of any such thing.

We have had the unique experience in Burnaby of having had our mayor run as a Social Credit candidate in 1979. The chairperson of our school board ran as a Social Credit candidate in 1983. So no one can accuse the municipal politicians in Burnaby of being bleeding-heart socialists, social workers or any of those other compassionate, humane aberrations. Yet despite the fact that Burnaby council, Burnaby General Hospital and Burnaby School Board have all toed the line completely, we find that they are being punished and penalized as one piece of legislation after another is introduced in this House which takes responsibility away from those very responsible local politicians and puts it in the hands of the Lieutenant-Governor-in-Council. Now how can you explain that? Is there any explanation whatsoever for that?

You see, I believe it's possible that if you have a municipal council that is irresponsible, runs hog-wild, makes bad decisions on taxation and bad and irresponsible decisions on assessment, then, sure, a provincial government has to intervene on behalf of the residents of that particular municipality. I would be the first one to stand on my feet and support that.

[Mr. Speaker in the chair.]

But that has not been the case; in fact the very opposite has happened, Mr. Speaker — who gets younger and more beautiful as the day goes on. What we have found is that it is the provincial government that is profligate, that has been wasting money. It is the provincial government that has been irresponsible, not the municipal governments. Yet the provincial government has decided to swallow up the municipal level of politicians. They swallow up the school boards and take over their responsibilities — gobble them, chew them, swallow them, whatever....

MR. HANSON: Like an anaconda.

MS. BROWN: What is an anaconda?

MR. HANSON: A big snake.

MS. BROWN: Like a big snake. Having done that, then they go on to the next level, which is the municipal government. First they eat the school boards; now they're gobbling up the municipal councils.

MR. HANSON: Pac-Man.

[5:45]

MS. BROWN: Pac-Man gobbling up the regional boards and their functions. It's a plot.

Mr. Speaker, may I have leave of the House to say goodbye to the Minister of Forests (Hon. Mr. Waterland), who has just come in with his sleeping bag and suitcase? He has a government executive jet waiting.

In all seriousness, in view of the fact that the government is eroding the autonomy of the municipal level.... I respect the democratic process. I believe that the community

[ Page 1159 ]

level of government is very important; it's the closest thing to being there. Did you get that? We have to support this hoist. We have to give the government six months to reconsider its position, to think again about what it's going to do.

It is not possible for someone to sit here in Victoria and make a decision about the actual value of a piece of property in Burnaby, Surrey, New Westminster, Fort St. John, the Peace River area, Prince George or wherever. They can't do that. What the Assessment Authority has been doing to date has been really quite miraculous. It has actually been quite wonderful. Somehow they have managed to be fair. Now we have a piece of legislation that says: "Forget about that." First, I think they fired quite a few assessors, didn't they?

MR. BLENCOE: Twenty-five percent.

MS. BROWN: Twenty-five percent of the assessors were laid off. They are closing down eight offices around the province, and then taking unto themselves the responsibility not of assessing property at its assessed value and using the criteria that assessors use, but going for actual value, which is madness. What they're talking about is real estate value; there is no relationship between real estate and actual value. Going with what some gullible person is prepared to pay for a piece of property is quite different than what that property is actually worth. With the volatile market we've experienced in British Columbia over the last two years, the last thing we want to go to is actual value. The last thing we want to do is to let real estate establish the value of any piece of property. That is patently unfair. It could be worth $1 million today, $500,000 tomorrow, $10,000 the day after, and $1 million the day after that.

MS. SANFORD: We saw that a year ago.

MS. BROWN: That's right. It's precisely the result of the experience that we went through between the summer of '82 — or was it the summer of '81 and the summer of '82?

HON. MR. WATERLAND: The summer of '41 was a great year.

MS. BROWN: I wasn't around then. I'm so much younger than the Minister of Forests.

But what happened to property values in this province between 1981 and December 1982 should serve warning to the government that you can't do that. In any event, the first person to spot what was happening to property values was the municipal politician, not a faceless bureaucrat in Victoria and certainly not the Lieutenant-Governor and the cabinet. They are the last to know. This piece of legislation, which takes responsibility away from the people who are the first to know and gives it to people who are the last to know, is totally irresponsible. The reason my colleague from Victoria moved a resolution suggesting that the government take six months to reconsider its position.... As I pointed out earlier, my colleague spoke for something like 14 hours, with very little repetition. He never repeated himself at all, hardly ever.

MR. COCKE: Never, but hardly ever.

MS. BROWN: Well, hardly ever.

MR. HOWARD: He said "Mr. Speaker" frequently.

MS. BROWN: Yes, he did.

So there's a fountain of information — a body of knowledge — that needs to be perused by the minister responsible for this piece of legislation, as well as by all of the back-benchers. A number of the back-benchers have municipal experience.

Interjection.

MS. BROWN: That's right. They haven't yet had an opportunity to speak on this very important piece of legislation, Bill 7, which is the Property Tax Reform Act. That's a misnomer, first of all. I suggest that one of the amendments we should introduce on the order paper should be to rename this piece of legislation. It's not "reform," Mr. Speaker; it's "deform." That's what they're going to do to municipal taxes. They're going to deform them if this piece of legislation goes through. I think...

Interjection.

MS. BROWN: That's right. It's going to be an absolute deformity. That's....

Interjection.

MS. BROWN: My colleague suggests that in six months we could strike a travelling committee. We could do as the NDP government did when the Municipal Affairs Committee travelled around the province. They spoke to municipal politicians, local governments and to anyone who....

Interjection.

MS. BROWN: That's right. We had an assessment committee also, and I travelled on both. I was a traveler in those days on both of those committees. We spoke to the local politicians and to the people in the streets and listened to what they had to say about property taxation, because that's a very volatile issue. People will fight to protect their property and they will fight to keep their property tax down. But most of all, they wanted to be fair. Taking it away from the municipal politicians, laying off 25 percent of your assessors, closing down five of your regional offices is surely not the way in which to ensure that property taxes are meted out fairly.

In addition, to penalize those municipal governments like Burnaby, which has an international reputation for its fiscal restraint and responsibility — is not the way that the government should be responding to their efforts. Long before the provincial government thought about restraint, politicians at the municipal level in Burnaby were practising that. Long before the provincial government thought about....

MR. BLENCOE: I missed that one.

MS. BROWN: You missed Burnaby? Well, if you go to the meeting of the municipal politicians which is about to take place in Penticton on September 14, 15 and 16, they will tell you that when the Burnaby politicians enter that room they get a standing ovation — or they should. Even the members for Surrey will tell you that there is no waste or fat at any level whatsoever — not in Burnaby politics. You don't

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get a cent out of Vic Stusiak — Mr. Lean Bean Stusiak, I think he's called — without proving that it's absolutely necessary. And what is his reward for being fiscally responsible and parsimonious? His reward is that he has his territory invaded, his authority usurped, his rights and privileges as a local politician eroded and denied by a government which has not established — not to the same level, by any means — its reputation for fiscal responsibility and management.

I want to talk about the assessment and taxes on small business, Burnaby is the small business capital of the world. It really is. We haven't got any large enterprises like Detroit or Windsor. In Burnaby we've got small businesses. We've got Dairyland, that's true. We have Knapp's nurseries, the Astor Hotel. Small business is the backbone of Burnaby. Speak to the chamber of commerce and they will tell you that Burnaby depends on its small business community. The people who are really going to suffer under this legislation are those in the small business community, the backbone. When we talk about job creation we are talking about small business. Eighty percent of the jobs created in this province are created by small business, the little operator who hires four or five people.

I would like to move adjournment of this debate about small business in Burnaby until the next sitting of the House.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:58 p.m.