[ Page 2347 ]

CONTENTS

Routine Proceedings

Social Service Tax Amendment Act, 1983 (Bill 15). Second reading.

Mr. Lockstead –– 2347

Mr. Cocke –– 2351

On the amendment

Mr. Kempf –– 2355

Mr. Stupich –– 2355

Hon. Mr. Curtis –– 2359

Mr. Nicolson –– 2359

Hon. Mr. Phillips –– 2363

Mr. Hanson –– 2363

TUESDAY, OCTOBER 4, 1983

The House met at 10:06 a.m.

Prayers.

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: I call adjourned debate on second reading of Bill 15.

SOCIAL SERVICE TAX AMENDMENT ACT, 1983

(continued)

MR. LOCKSTEAD: Here we are on a Tuesday morning on Bill 15, which I am frantically searching for, because the government won't tell us what they're doing, jumping around like gophers from bill to bill.

HON. MR. GARDOM: Don, it's between 14 and 16.

MR. LOCKSTEAD: Thank you, Mr. House Leader. I got it. This is the bill. Regressive legislation, that's what it is.

The Social Credit government, prior to and during the last election campaign.... Did that Premier, who is running away once again and leaving the chamber, mention once throughout the last election campaign that they were going to increase the sales tax, put tax on restaurant meals, put tax on long-distance telephone calls, and impose taxes here, there and everywhere? Did the Premier tell you that, Mr. Speaker? He didn't tell us that. He didn't tell the electorate that. He did not tell the electorate at that time that they were going to do any of these things. Here we are in the early part of October in this Legislature. We haven't discussed the spending estimates. We've been here all summer.

Look who's back from Yugoslavia! My favourite minister, who spent two weeks, along with the Minister of Tourism (Hon. Mr. Richmond), all over Europe at the taxpayers' expense. Now I know why we have Bill 15 before us. It's to pay for that minister's travel expenses, so that he can travel around Europe. I'm sure the voters out there won't mind that we're increasing the sales tax even though the government said they wouldn't increase the sales tax in the last election campaign. I think they said they would not increase taxes and user fees, but, in fact, they did.

Here we are debating the bill before us, Bill 15, which deals with tax increases for all the citizens of British Columbia. Why does the government need the money? I'll tell you why I think they do. I think it's been sheer fiscal mismanagement on the part of the Social Credit government. It's as simple as that. Over the last three years there's been sheer fiscal mismanagement on the part of the Social Credit government. This year's budget, if we ever get to debate the spending estimates in this House before next year's budget comes in, allocates $18 million for government propaganda — advertising. It's hidden away in that budget. Well, it's true. There is $18 million for government propaganda, while you're cutting out $50 a month to the handicapped. They're being cut, as well as a lot of other services in British Columbia, and we have before us Bill 15, which increases tax to all the residents of British Columbia.

It's far worse than that. I think that I've always opposed regressive taxation in this House. Regressive taxation, to me, means a tax that hits the poor as hard as the rich. A one-point increase in the sales tax, for example, to someone making $50,000, $100,000, $200,000, and in some cases half a million dollars a year.... There are salaries in British Columbia that equal half a million dollars a year. I think they can withstand the one-point increase in the sales tax. But when you have people in this province living on minimum income — sometimes on human resources, sometimes on UIC — some of these people have been living that way because of the mismanagement of the economy by this government for several years now. They have no choice. The jobs don't exist.

[10:15]

This kind of tax hits those people very hard. This government has a habit of hitting the low-income people in this province. Witness the tobacco and alcohol tax increase recently. Witness the gasoline tax increase. I believe a percentage increase in the price of a litre of gasoline went into effect yesterday. All of those taxes are regressive. I resent regressive taxation. The government had alternatives at its disposal. They could have brought in a tax which would have slightly — for the amount of money they are going to get out of this tax anyway — increased the tax to the high-income people. But they would never do that, would they? They wouldn't bring in a graduated tax like that, would they, Mr. Speaker? They haven't in the past. There must be a reason for that. Could it be that this government doesn't wish to impose tax increases on its rich friends, or on some of the large corporations that support this government? Could that be the reason?

When a large corporation supports this government and that's the reason for Bill 15 before us today — they expect something in return. They don't come along and say: "Our philosophy just happens to coincide with the Socreds. We think that your philosophy is just great." No, they don't operate that way in big business — sometimes small business, but certainly not big business. When a large corporation makes a donation or in some way assists the present government, they want something in return. I think what they are getting in return for their support of that government over there right now is no increase in taxes, tax reductions in a couple of major areas for large corporations, and the deal was....

HON. MR. PHILLIPS: Aye.

MR. LOCKSTEAD: I shouldn't say "deal." The understanding was....

HON. MR. PHILLIPS: Aye.

MR. LOCKSTEAD: Did you do that in Yugoslavia? Did you go all over Yugoslavia, Mr. Minister, and say: "Aye, aye, aye"? You must have looked pretty foolish doing that. Beside which, how many Yugos did you actually talk to in Yugoslavia? That's what I want to know.

Interjection.

[ Page 2348 ]

MR. SPEAKER: Order, please, hon. members. Clearly we have before us an example of how interjections can affect the course of debate.

Interjections.

MR. SPEAKER: Order, please! Order! When the Chair is addressing the House, members will remain silent or they will be thrown out of this House. The member for Mackenzie continues uninterrupted.

MR. LOCKSTEAD: Thank you, Mr. Speaker. I didn't mean to get everybody in a lot of trouble. It started out like such a nice quiet Tuesday morning, and I was talking about regressive taxation under Bill 15, not Yugoslavia at all.

Mr. Speaker, I know there are some lighthearted comments made back and forth in this House and it possibly detracts from the presentation that we try to make from time to time in this Legislature — sometimes all night. However, I really do resent regressive taxation, and as far as I can recall, I don't think I've ever voted for a regressive tax measure in this House. Now I may have, but I don't recall any. Hopefully I will continue to fight that kind of taxation. This is the kind of bill that separates the New Democratic Party from the Social Credit Party. It is a very basic philosophical type of measure we have before us right now. The Social Credit government has no problems at all, philosophically, in taxing the poor people and the low-income people, working people of this province, and imposing higher and higher taxes. We, on the other hand, feel that those people who can afford to pay more should pay more. It is well known in North America and in Canada that many large corporations pay no actual income tax at all at some point and in some years. That's true, Mr. Speaker. They have to pay property taxes, I know, but the reason....

Interjection.

MR. LOCKSTEAD: The government House Leader says to get back to the bill. I'm trying to point out why the government found it necessary to bring this type of measure in in the first place. What I am actually saying here is that the government can amend or withdraw this measure. I know this measure has been in effect since the budget was brought down on July 7 as part of the package — the misnamed "restraint package," because there are actually very few restraint measures in this budget package that the government brought down on July 7. Many of these bills have absolutely nothing to do with restraint.

Another factor, Mr. Speaker, is the effect this bill will have on the small business community in this province. When you take money — hard-earned cash, cash in any form — out of people's pockets.... And that's what you're doing with Bill 15. This is less disposable income to spend on their families, their children and on the consumer products they may buy in their local communities. You're indirectly hurting every small business community in this province by bringing in this type of regressive tax measure. It has that secondary effect. I would have thought the government, in its deliberations prior to preparing the budget — which I presume was prepared sometime last February of this year, but not brought into this House until July 7 because the government didn't have nerve enough to go before the people with a budget until they had an election.... And they were pretty cynical about it. They said, "We won't bring in the budget in February," the normal time, the custom any time in this province to bring in a budget. They said: "We'll go to the people and have an election. If we can spread our line of b.s. and the people buy it, then we'll have an election. And if the people buy the line that we've preached during and prior to the election campaign and we become the government, then of course we'll bring in the budget. If we lose that election, we'll heap the whole pile, all of our financial mismanagement, on the heads of the new government, and let them take the flak."

Well, the government obviously did win, because they're sitting over there and we're sitting and standing over here on this side. So now the government, rather than meet the challenge of these difficult times head on, bring in a package which they call a restraint package — many of these bills have absolutely nothing whatsoever to do with restraint. And here we are, debating under Bill 15 a tax increase that the government said they would never impose on the people of this province.

I do have a couple of other items. I just want to discuss briefly the increase in the.... Well, it's an imposition. In the bill, subsection (c) of the explanatory note says: "to impose a 7 percent tax rate on the purchase of prepared meals for consumption on the premises where sold, if sold at a price of $7 or more." I know this has been discussed a number of times, but I want to get it on the record that the tourist industry people and the B.C. Restaurant Association — I believe that's the correct name — are very unhappy about this particular tax increase. First of all, they weren't consulted before this tax measure was brought in, as far as I'm aware. Nowhere can I find it that the government consulted with these people who are directly affected — aside from the consumer, who is as well directly affected. But they did come up with an alternative. They said: "Why not put a 3 percent increase right across the board on prepared meals in restaurants, and avoid a lot of the troubles and hassles that we know have developed because of this tax increase?" Of course, the reason for that is that the government won't listen, won't compromise, won't meet with anyone, and when they do meet it's after the fact. Or when they meet with any given group in our province it's not to consult but to tell them what they're going to do, come what may.

I just want to quote briefly from the Vancouver Sun of July 8: "Meal Tax Angers Restaurateurs." I have quite a number of press clippings, and I'm not going to read all of them; as a matter of fact, just this one and part of another, for the purposes of this debate.

"The Finance minister's extension of the 7 percent provincial sales tax to restaurant meals left a sour taste Thursday in the mouths of restaurant owners and patrons.

"'Despicable,' Don Bellamy, executive director of the Restaurant and Food Services Association of B.C. said. A dirty, low blow.'

"Retailers were disappointed when Hugh Curtis raised the sales tax by a full percentage point to 7 percent. But the restaurant industry, exempt from the tax until now, was livid.

"'This will add considerably to our bookkeeping costs,' Bellamy fumed. 'It is obvious the wrong government got in...'"

[ Page 2349 ]

I'll certainly agree with that, Mr. Speaker, and I think most people in British Columbia would today agree with that statement. I guess that 70 percent would, anyway.

"'...and I'm a Socred. I'm bloody angry.'

"Doug McLean, owner of the Greenhaus Restaurant on West 4th, said: 'It's going to kill the business. A lot of restaurants have folded, or they are only hanging in by the skin of their teeth.'

"Joe Milano, co-owner of the Portobello Restaurant, said: 'I thought the government wanted to help small businesses.'"

That's a good point, Mr. Speaker. Over the last several years this government has said: "We're going to do this for small business, we're going to do that for small business. We're going to bring in grants to help small business." Yet every time they turn around they're hurting small business. One way is by taking disposable cash out of the pockets of people under a bill like Bill 15, and other legislation before this House, which has absolutely nothing to do with restraint. They're taking disposable cash away from the consumer, money that is now not being spent in the small businesses in local communities. That's one way they're hurting small business. There are many other ways as well.

"Customer Michael Heinze added: 'If you spend $20 or $25 on a meal, the tax will be an extra few dollars — like leaving two tips, an extra one for the government.' The B.C. Hotels Association said the tax places a further burden on the troubled hospitality industry.

"The B.C. Motels, Resorts and Trailer Parks Association sent a letter to Premier Bill Bennett saying the tax could not have come at a worse time."

Good point. It could not have come at a worse time. At a time when the economies in most other provinces in Canada are picking up, it was a deliberate and conscious decision of this government to depress the economy in the province of British Columbia with this type of legislation, Bill 15.

As I understand it — I'm looking at the Minister of Finance, and he'll let me know if I'm wrong — British Columbia has the slowest turnaround in the economic growth rate of any province in Canada today. The only possible exception I can think of is Newfoundland, and I think even little Newfoundland, in spite of high unemployment and its economic problems, has a higher growth rate today than does British Columbia. A sad commentary. This whole financial mess was inspired by the government sitting opposite me here this morning.

Interjection.

MR. LOCKSTEAD: You are, Mr. House Leader. You've made some very bad decisions over the last few years. You've sunk literally hundreds of millions of dollars of taxpayers' money into northeast coal....

HON. MR. CURTIS: On a point of order, Mr. Speaker. I would be guided by the Chair, but it seems to me that a bill dealing with sales tax on goods which are purchased by the consumer cannot be related to northeast coal, the economy in Newfoundland and growth rates of various provinces. We're discussing a relatively narrow issue, are we not, sir?

MR. SPEAKER: Thank you, hon. minister. The point raised by the minister, hon. members, is indeed a valid one and I would commend it to the member as he continues his address specifically related to the sales tax.

MR. LOCKSTEAD: I'll heed your words, Mr. Speaker. I understand what you're saying. I was trying to point out to the House why the government found it necessary to bring in this regressive tax measure which affects low-income groups and the unemployed in our province more than it does rich people like the cabinet ministers sitting over there, who live in the lap of luxury, travelling around the world at taxpayers' expense, living in the Vancouver Hotel like sultans even though their homes may be a few miles away. Somebody has got to pay for all of that, and the people who are going to pay are those who have to pay this increased sales tax, and a number of items that prior to the last election the government said they would never bring in. That's what we're talking about here: why the government found it necessary to break its promise and bring in increased tax measures, regressive tax measures that affect the poor, the working poor and the unemployed, and don't really affect the rich, like the members sitting on treasury benches over there.

[10:30]

The article goes on to say:

"Curtis said the removal of the restaurant exemption, along with a similar measure affecting long-distance telephone calls, 'will generate an additional $44 million in revenue this year and $60 million in a full year.' Merchants and business leaders said they were hurt and disappointed by the one-percentage-point sales tax increase, and several said it threatens the fragile recovery beginning to sprout in the B.C. economy."

I just tried to speak about the fragile economy — hopefully that was starting to take place in spite of this government, not because of it. This government has gone out of its way to put a lid on that fragile recovery.

"L.A. Raphael, B.C. manager of the Retail Council of Canada, said the tax hike is badly timed. 'We feel that at the very beginning of a possible recovery of consumer confidence this will have a dampening effect, and we don't feel it is good for the retailers or the consumers because recovery has to be led by consumer purchasing.'"

We were just talking about that a short while ago.

"Curtis said the increase will provide $126 million in additional revenue this fiscal year and $170 million next year. Even at the new rate, he said, B.C.'s sales tax is as low as or lower than those in six of the other nine provinces.'"

What's that got to do with British Columbia? Here the minister was on his feet a few minutes ago on to me because I wasn't sticking to Bill 15 and was trying to relate my remarks to Bill 15, and here he is talking about other provinces.

"Raphael said he had hoped for no increase, since Statistics Canada figures show that B.C.'s recovery is probably the slowest in the country, outside of parts of Alberta. He predicted many consumers in eastern B.C. will travel to sales-tax-free Alberta to shop."

People do that. We have a member of this House who has been known to go to Alberta occasionally to do his shopping to save a few bucks on the sales tax.

"B.C. Central Credit Union economist Richard McAlary said he was very surprised by the increase.

[ Page 2350 ]

'It seems to make very little sense,' he said, predicting that it will likely depress consumer sales, retarding the slow economic recovery."

Who have you got in favour of this tax? Who has actually come out in favour of this sales tax increase in this province, aside from Socred Treasury Board members and the backbenchers, who don't even read the legislation but go along with treasury benches because they're hoping to get into cabinet some day? Lots of luck!

"'The revenue forgone would appear to outweigh any possible benefits,' he said. 'Why in a time of restraint of government services are we increasing taxation?'" That is the very question we are asking here. "Mark Startup, executive director of the B.C. division of the Retail Merchants' Association of Canada, said: '...we were not consulted on this issue and that hurts.' But Startup said his association would support the increase if the government could show the collected revenue will be spent wisely."

I want to assure Mr. Startup that the revenues are being spent wisely, in spite of the fact that the government has taken away the $50 a month to the handicapped, has wiped out human rights.... A whole lot of things are happening. These revenues will be spent wisely. I understand in a week or two we're sending two more cabinet ministers to India and Korea with a lump of coal, at taxpayers' expense: two weeks in downtown Tokyo, carting around a lump of coal at taxpayers' expense, living in $450-a-day hotel rooms in the exotic capitals of the world, while we slave away day and night in this Legislature. That's how their tax dollars are going to be spent, jetting home in their private jets — taxpayers' jets, but the government members are using these jets like their private taxis. That's how this tax increase is going to be spent. Somebody's got to pay for all that. Under Bill 15 the government is hoping to raise the money to pay for these niceties that government members enjoy.

The article concludes: "Curtis pointed out there still are thousands of exempt consumer items, including food, children's clothing, electricity, fuel oil and natural gas for residential use." However, we know that there will be an increase in the cost of natural gas to consumers. In fact, the minister over there has as much as told us that just last week.

There are two other aspects of this bill which I want to mention just briefly. One is, of course, the increase in the sales tax on automobiles. This government, I suppose to get some Brownie points with the voters, reduced taxes on certain classes of small automobiles to 4 percent, and now that they've won the election they've brought the tax on all automobiles back to 7 percent. I'm sure that didn't make their used-car-dealer friends too happy, but nonetheless they've done it. They've got four years to get over that before the next provincial election.

I'm going to make a prediction, Mr. Speaker, that revolves around Bill 15 –– I predict that this government will, at least a year prior to the next provincial election, reduce the sales tax — economic recovery or not. Yes, I predict that this government, cynical as they are, will go out and take expensive television ads that will be paid for by the increased sales tax that we're debating under Bill 15, and will tell the people that they've reduced the sales tax. Yes, they will.

Interjections.

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

MR. LOCKSTEAD: I'm talking about Bill 15, the sales tax.

MR. SPEAKER: We're talking now about future action, hon. member, which....

MR. LOCKSTEAD: I'm just making an honest prediction, Mr. Speaker.

MR. SPEAKER: Nonetheless, hon. member, as honest as the prediction may be, and possibly as accurate, it does not fall within the purview of the discussions at this stage.

MR. LOCKSTEAD: It was just a harmless little prediction that almost certainly will come true under Bill 15. They're a cynical lot over there, and they know that three or four years from now people won't remember that sales tax was increased. In fact, most people don't remember now. This sales tax has been increased, and people take it for granted. The sales tax was increased without legislation before this House. Well, the legislation was before the House but not debated. For months we sat here with this legislation on the books but not debated, and yet the government increased the sales tax on long-distance telephone calls, automobiles and meals in restaurants, and the general sales tax.

Interjection.

MR. LOCKSTEAD: Some back-bencher is saying that we're wasting time, that members in this House don't have the right to debate, Mr. Speaker. Well, that is not so. Except when the government invokes closure, we all have a right to make our views known in this House.

MR. SPEAKER: Order, please. Hon. member, the Chair has repeatedly advised the member that we are currently discussing Bill 15, the Social Service Tax Amendment Act, 1983.

MR. LOCKSTEAD: I'm doing the best I can, Mr. Speaker, but I keep getting those interjections. We have a disorderly House, and I can't let those misconceptions, which the hon. member over there is hurling across the floor with great velocity, go by without an answer.

MR. SPEAKER: Nonetheless, hon. member, we must try.

MR. LOCKSTEAD: Yes, we must try, Mr. Speaker. What I'm saying is that this government....

Interjection.

MR. LOCKSTEAD: Yes, well, you brought in closure. You're the only provincial government in Canada that has used closure. Are you not?

Interjections.

MR. LOCKSTEAD: Ontario? Well, they're another....

MS. BROWN: What a role model!

[ Page 2351 ]

MR. LOCKSTEAD: I just wanted to point out quietly, Mr. Speaker, that the government, when they said they wouldn't, did increase sales tax, which is a regressive tax in this province.

The one tax I haven't discussed yet is the 7 percent tax on long-distance telephone charges. Once again it's an unfair tax. If you're living in the lower mainland, the overwhelming majority of your calls are going to be to people within the city area. I know there are a lot of exceptions, and I know that you and I, Mr. Speaker, as MLAs, make long-distance calls by necessity. We know that people in business have to from time to time. But generally speaking, the ordinary consumer does not make that many long-distance telephone calls. But if you're living in the country, or anywhere outside of the lower mainland, and the centre of activity for business, travel or any purpose whatsoever happens to be the greater Vancouver area, most of us, some way or another, have to phone or write to the greater Vancouver area and, to a lesser degree, the Victoria area. What I'm saying is that this tax, once again, affects rural members, rural areas and rural people to a larger degree than it does the 1.5 million people living on the lower mainland. It's an unfair tax.

This tax was also brought in without any consultation with any consumer group that I'm aware of and without prior knowledge to the voter. I don't even know if B.C. Tel was consulted about the tax — I doubt it very much. Certainly the research notes that I have here indicate that they were not consulted. They may have talked with Mr. MacFarlane privately, I'm not sure. Nonetheless, these taxes are regressive taxes.

I certainly will not support this bill. I don't think any of my colleagues will, but I certainly won't. What really disappoints me about the government in this particular bill, once again, for the record, is that the bill has absolutely nothing to do with restraint — as many of the bills before us have nothing to do with restraint — and certainly this bill hits the working poor, the unemployed people and working people the hardest, as usual. It seems to be a pattern of this government. Mr. Speaker, I just want the government to know that I'll be voting against this bill. Hopefully some of the back-benchers will take a closer look at this bill and read the sections contained in it — all four of them; that shouldn't take them too long — and, perhaps, for once in their lives stand up on their feet and vote against a government that brings in regressive taxation.

[10:45]

MR. COCKE: Mr. Speaker, going along with the spirit of cooperativeness in the House, I thought that I would say a few words with respect to the sales tax. I think that maybe one or two of my colleagues will also join me in this rendition. I think that we owe it to the public to let them know exactly what's happening. I think we owe to the public the responsibility of saying that here is a government that on one hand talks restraint and about reducing expenditures, and on the other hand turns on the public and says: "But you must increase yours." It's a one-sided restraint program that we see before us. We see a 17 percent increase in sales tax, in the face of 6 and 5 or 8 and 12, or whatever you want to put as your parameters. That, in itself, is regressive, but put it in tandem with a 15 to 20 percent increase in user fees across the board in terms of health care, and everywhere else that the government can place an increase on user fees. For heaven's sake, now it costs you $26 to go out and get a freshwater fishing licence in this province for yourself and your wife — $13 each — and then you have to pay another $13 each to go down and fish in the sea. So you pay $52 maybe to catch one fish a year. This is the kind of regressive taxation that this government has imposed on the people in this province ever since they've been in power, and yet on the other hand they go to people and say: "We're a government of restraint."

You can't have it both ways, Mr. Speaker. If you're a government of restraint, you should be able to restrain your revenues, particularly those on the backs of working people, old people and people who are most severely affected by the sales tax. Most of the people in this House are not severely affected by this sales tax, but a pensioner with a fixed income is severely affected by any increased impost of government fees. This is just an addition. Every working mother with a dependent family.... By virtue of the fact that she is a she, her income is bound to be lower by average, and beyond that she has the responsibility of bringing up a family alone. There are certainly many in my constituency in that situation. They are the people who are really paying. They are the people who are hit with every one of the new government imposts. They are the ones who are hit by all the new regressive systems of taxation.

It doesn't matter what we say here; we know in our heart of hearts that if there's a requirement for increased revenues for government, the fair taxation system is through income tax. We know also that it can be circumvented by the very wealthy with a good battery of lawyers, accountants and so on. But at the same time it is the least regressive, and it's the alternative to this kind of taxation.

The maximum amount of money raised here would be something in the order of $120 million to $130 million. It sounds like a lot, but what do we pay for that $120 million to $130 million? We pay by reducing the number of people working in our province. Every time we increase prices, no matter how little we increase those prices, we price somebody else out of the market. And each time you price somebody else out of the market, you have reduced the number of people working and producing whatever people are buying. It’s as plain and simple as that.

Mr. Speaker, if we are dedicated to an improved economic situation in our province, why are we doing everything backwards? When the member for Mackenzie (Mr. Lockstead) said that there had been no hint of this during the election campaign, was he ever right! The government ministers were running around telling the world that there would be no increases in anything and that you needn't worry; Bob's your uncle. But beyond that, do you recall when the sales tax was lowered by that government? It was before an election, I might recall for those who can't. The Premier then promised that it would never go up again, ever, ever, ever. "Never" has become a very short time. We are now faced with arguments such as: "Oh, we're not as bad as one or two other jurisdictions in the country." Isn't that marvellous!

The reason we're faced with this increase in sales tax is that it's so easy to do. It's as easy as can be to set another percentage point on the sales tax. There is no major bookwork, other than the bookwork that is done by the retailers who are our tax-collectors all over the province: those blessed retailers, those public servants who don't realize that they are public servants, those tax-gatherers for the provincial government. Mr. Speaker, they do it so lovingly, and most of them do it and vote for you. I don't know what they think they're gaining.

[ Page 2352 ]

[Mr. Strachan in the chair.]

But in any event, let me say this: now you've gathered in a whole new bunch of tax-gatherers, and that's restaurateurs. Because anybody buying a meal for more than seven bucks is going to have to pay tax on that meal. That $7 was guffawed at by some of the government members, saying: "Well, who ever buys meals that are more than $7? Whoever does can well afford to pay the 7 percent." It's not so much that. In my opinion, it is further reducing our prospective glowing economy, or reducing our economic progress. It does that because, again, we reduce the numbers of people using our restaurants. The problem is that when you have this kind of taxation, the word gets out. It's very difficult to seal the border of British Columbia and the United States, the United Kingdom, West Germany, Japan — wherever our tourists come from. It's very difficult to say: "Shush! Don't say a word and they won't know and then when they get here, they're going to have to pay our taxes." No, they find out before they come here. They find out that B.C. has a very high sales tax. Then they decide: "We may as well compare B.C. with some other island in the sun." And they find a place that is more hospitable taxwise, and that's where they go.

Tourism is down in this province, despite the minister's protestations that it's not. Tourism has been down for the last three years. It may have a marginal increase over '82, but believe me, '82 was such a disaster that any increase would have to be so substantial to really count.

This is a regressive piece of legislation because it harms our economy rather than helps our economy. It harms our people rather than helps them. And what does it do? It gives a few moments of respite to a government that is totally disorganized, who can't plan and don't know how to run the financial empire of British Columbia. It's true in every respect, Mr. Speaker. Everybody watching the way B.C. is going into the vortex of debt knows full well that there's bad management out there. And that bad management has made one other bad decision and that other bad decision is Bill 15.

Mr. Speaker, there's a study out by Dr. Irwin Gillespie of Carleton University, and that study is entitled "The Redistribution of More in Canada." What does he say about B.C.'s tax system in that study? He estimates that B.C.'s tax system for taxes imposed at all levels of government is second only to Ontario's in regressiveness. Ontario is notorious not only in our country but notorious, for heaven's sake, around North America in terms of its regressiveness and its taxation. You see, it's not only their sales tax, but it's their across-the-board regressive user fees. User fees are analogous to the regressiveness of this kind of increased taxation. Although there is no government user fee here, there is certainly a user fee in terms of buying goods and services. That's another joke. Imagine services being taxable. That's a long-standing question that we keep asking ourselves. I know there are colleagues of mine who say: "Well, if you must have sales tax, you may as well have it across the board." I, for one, can't see how one can justify sales tax on services. There's nothing tangible there, certainly not tangible in the common sense of the word. You can't lift it or weigh it.

This sales tax increase is just making a bad tax system that we have in B.C. even worse.

[11:00]

How long will it be before we're going to be able to make any impression on the government? And I don't mean the opposition, because obviously there's no way the opposition is going to make any impression on this government. Yesterday was the best example that I've ever seen. This side had a spirit of cooperativeness, and the government decided to totally run over it roughshod, the same as they will do with the suggestions that I'm making on Bill 15. It's unfortunate, but you know, we're not the only ones crying out. We're not the only ones saying that this is a regressive measure, that this piece of legislation is not here to help. Mr. Speaker, we're continually told of a fragile economy. When you think of a fragile economy, you think of something that can be so quickly crushed, so easily dented, so easily impaired. Mr. Speaker, this fragile economy continued to be fragile and will continue to be fragile as long as we have measures like the one before us.

When we should be giving assistance and strength to our economy, why should we insist that we reduce consumer spending? No matter how marginal or minimal that reduction, it affects the economy, and particularly a fragile economy. It affects it significantly. How many people do you have to cut out of the market in order to put other people out of work? And so the spiral grows and grows. Virtually everything that this government has done, including their firings, have gone along this line. Then everybody raised their hands in horror when the rest of the country was getting out of the recession to some extent in August and improving their employment situation. What happened in British Columbia? Should I remind you, Mr. Speaker? Ten thousand more people were unemployed, in a month that should have given rise to increased employment.

DEPUTY SPEAKER: To the bill, please.

MR. COCKE: Mr. Speaker, this is to the bill.

DEPUTY SPEAKER: The sales tax.

MR. COCKE: This is the kind of legislation that is destroying the economy of this province and putting people out of work. Every time you raise taxes on merchandise, you reduce the market for that merchandise, and every time you do that another few jobs have gone down the line. It goes beyond that. People say: "Okay, I'm going to wait to buy that fridge, that new suit, or whatever else it is, until things get even worse and there are big sales on and so on." They wait and wait and put their money into the bank. Savings grow, but what also grows, in line with that, Mr. Speaker, are bankruptcies.

I would like to take this House for a walk along Columbia Street in New Westminster. There are empty buildings after empty buildings.

AN HON. MEMBER: Modernize it.

MR. COCKE: Modernize it! We got diddled by a government in 1976, but we can go into that in a different debate.

Interjection.

DEPUTY SPEAKER: The members will come to order. The member will speak to the bill.

[ Page 2353 ]

MR. COCKE: That's the kind of situation that we have. You go to wealthy shopping centre after wealthy shopping centre, and you find exactly the same thing.

Interjection.

MR. COCKE: That's right. Your policies — and this is part of the policy of the Socreds — are increasing the price of consumer products, and in so doing driving other people into bankruptcy and out of work, and on and on it goes. When will you ever learn? It might be a long time. Let me assure you, Mr. Speaker, we have all the time in the world to do our best to get this story across to this recalcitrant government. I say that adding 17 percent to the sales tax has dramatically increased the incidence of reduction in consumer spending. It had to.

I'm not going to read the ad that was placed in the paper by a particular restaurant here in the Victoria area. But he was just one of many restaurateurs who have come out and said: "Why make us tax gatherers also?" I would like to ask why, after there has been no tax on food — and I'm talking about restaurant food — for years, we suddenly go back to that regressive situation? If anything can discourage tourism, this government has done so to the extent that many people will go elsewhere — and have done so — because of our regressive taxation policies. Restaurateurs are not happy about voting for a government and then having the kind of surprise that has been visited upon them. Can you imagine waking up on July 7 and finding that what you voted for isn't what you got? A nasty surprise, isn't it, Mr. Speaker? But that member sitting in the corner said it all. When somebody said that they're counting on them not remembering, he said: "That's right." People tend not to remember. I heard it coming from that ozone zone down there.

Interjections.

MR. COCKE: I don't know what you're talking about, Mrs. Member, but anyway, I'm sure someday you'll put it.... You're talking about Hartley's proposition? Government car insurance?

DEPUTY SPEAKER: The members will come to order, please. The member for New Westminster will speak to the bill.

MR. MOWAT: She's asking for her $25 car insurance.

MR. COCKE: I can sell you that. I'll underwrite it myself.

A part of that proposition, also, when they said that the people will not remember, was the fact that the opposition is wasting time, and now it's $90,000 a day that we're taking out of this sales tax; that's who's paying for it. The argument that this House is costing much above what they pay the year round is specious. The only time that we pay significant sums extra is when we work overtime into the night and all night, and you're paying the poor attendants and the guards....

DEPUTY SPEAKER: Hon. member, you're out of bounds now. This is the sales tax bill.

MR. COCKE: I just thought I would answer that kind of proposition down there.

I would like to remind you that on August 24 there was a discussion of the Bennett budget in the Province. It says: "The Bennett budget has driven up consumer prices in B.C. In its latest consumer prices report, Statistics Canada says that the cost of living in Vancouver in July jumped 1.1 percent from June." That is significant because the rest of the country.... I have a comparison of the consumer price increase across the country. We led all the rest by far. This proves the point that I made in the first place that the regressiveness of this government's policy with respect to taxation, user fees, and so on, is the thing that sets us apart. Why else would the consumer price index go up so quickly and go so high in this area? It's so utterly obvious, and yet, to bail themselves out of a deficit situation, they visit this $100 million-odd impost on the people of B.C. The people don't deserve that kind of government.

Now 50 percent of the people are not going to be severely affected, but those who are are severely affected. They are affected to the extent where this, in tandem with all the other things that have been going on and happening to them, puts them in a very precarious economic situation. Others, as I pointed out, may resist buying and, therefore, hoard their money. But there are those who must buy, those who have no choice but to buy, those who go to the store every week and purchase many taxable products. They're stuck. Their cost of living in one month — the month of July — jumped 1.1 percent. Compare that with just 0.2 percent in Calgary and Toronto, which were the lowest in the nation. Regina was second-highest; we were marginally higher than Regina. It is interesting that Regina has a relatively new government, and it's the same ilk under Mr. Devine — with the "Devine wisdom" — as the government we have here in B.C., who also think that they have divine wisdom. But their divine wisdom is not real wisdom. The averages in Canada that month — July — were an increase in the cost of living of 0.4 percent. We were 1.1 percent. That's almost triple. Doesn't that tell us something? Doesn't that tell us that maybe we're on the wrong course? Here we were trying to cure inflation by throwing people out of work and doing all those dramatic things that we said would damp down the economy. Yet we are still the worst in the country with respect to increased prices and we have one of the worst unemployment rates in the country. We can't win, and the reason is that we are desperately poorly governed. We are not well served at all. This — along with all the other legislation that we've seen, or most of it — tells us that.

I wouldn't mind, Mr. Speaker, if it hadn't been for the promise of the Premier, the last time it was reduced, when he said: "We will never increase sales tax again." He as much as admitted the regressiveness of the sales tax situation at that time. Where did he go to get his soul won over again? Could it have been the Fraser Institute? Where did he go to get that tremendous, dramatic change of mind that he would renege on a promise that he would never increase sales tax again? We are faced with an increase in sales tax — a significant one — and a broadening of the sales tax. Don't forget that when we're talking about an increase of 1 percent, that's across the board. But we're talking about a 7 percent increase for restaurant meals, because there was no tax on restaurant meals — I shouldn't say a 7 percent increase, but an increase of manifold sums; in other words, a new tax of 7 percent on those meals is what we're looking at. It doesn't sound like much, does it? But to me a $7 meal is a 50 cent sales tax. You

[ Page 2354 ]

add them up and you're coming to some fairly dramatic sums after a while.

I don't see that this is the course of action that should be taken by this government. They gave us no excuses during the election; they should have given us no policy after the election. They didn't come out and say: "We want your vote, but we want to tell you first that there will be an increase in sales tax; there will be an increase of hospital user fees, medicare fees, and so on." None of those things were said; as a matter of fact, they were denied by no less a light than the Premier. So that's how long they keep their promises. It is too bad for this province, but that's the situation.

Somebody said: "The Canadian Federation of Independent Business urges me as a member to communicate support for B.C. government restraint measures to the office of the Premier." This is from Action Alert. "I can't do that. I am angry with the government for introducing the most reprehensible budget in its history." That's the kind of response that the federation got from this particular person. Mr. Speaker, that's people in business — many of them.

Interjection.

MR. COCKE: Oh, the House Leader snorts. Have you gone and talked to the business people in Point Grey, or have you even been home to Point Grey? Mr. Speaker, if he had he would have a different attitude towards what they've done.

I suggest that that is regressive. We're in a situation where family income has dropped significantly in this province. Yet the government continues to push increased costs at us. How much suffering has there got to be in order for this government to be satisfied? They will collect a lot more from sales tax in the long run if we have an expanding, burgeoning, booming economy than we do under the situation that we have now.

I notice that the members of the government are getting restless.

HON. MR. CURTIS: No.

MR. COCKE: I'm glad that the Minister of Finance isn't, because all the people who are getting restless were part of that very cooperative group that we had in the House yesterday. I felt that it would be a good idea for them to hear some of the things that we have to say.

As a matter of fact, I think it is necessary that we have some more history of the sales tax, and that we go through, step by step, where this whole regressive tax thing came from. And in the cooperative mood of the House....

AN HON. MEMBER: He did a good job.

MR. COCKE: Yes, he did, and he's going to be afforded the opportunity to do more.

Because we're in a spirit of cooperativeness in this House — as we saw yesterday when three bills passed second reading, and then the government threw the Spetifore amendment at us at 11:45 last night. That's cooperation. In that spirit of cooperation, Mr. Speaker, and out of real respect, I'm going to move that the motion be amended by leaving out the word "now" and adding the words "on this day six months hence."

HON. MR. GARDOM: I wonder whether or not, Mr. Speaker, the amendment would violate standing order 66, because the net effect of the hon. member's amendment would certainly be to delay an impost.

DEPUTY SPEAKER: The point of order raised by the hon. House Leader is interesting, but the tradition in our parliament advises us that this type of amendment is in order.

HON. MR. McGEER: Further to the point of order, Mr. Speaker, if amendments to this bill were to be brought in, as the bill itself was a message bill, this particular amendment not to read the bill would need to be brought in by message from the Lieutenant-Governor. The tradition of the House notwithstanding, if the member who made the motion can do it by message from the Lieutenant-Governor, then of course we could entertain it. But I would submit that the amendment is an offence to the Crown. If Your Honour is in some doubt, perhaps we ought to call a small recess while this point is very seriously considered, notwithstanding any tradition of the House. I submit, sir, that that judgment is very seriously in error.

DEPUTY SPEAKER: Hon. members, the amendment as moved by the member for New Westminster is not an amendment to the bill; it is an amendment to the motion for second reading.

HON. MR. McGEER: Mr. Speaker — very seriously a delay in the introduction of this bill is an impost on the Crown. All money matters are dealt with in this House by message. Any change to legislation that has an impost on the Crown is not done by members of this Legislative Assembly, but by message from His Honour. Here we have something affecting Crown revenues for six months not dealt with by message. I think, with due respect, Mr. Speaker, that we in this Legislative Assembly would not wish to have the wrath of the Lieutenant-Governor brought down on this House for having ignored the wishes of legislation brought in from him by message. That's why every resolution appearing on the order paper that directly or indirectly affects the revenues of the Crown is automatically out of order. All amendments to this bill must be brought in by message. Here we've got an amendment to the bill.

DEPUTY SPEAKER: I think I can deal with this.

MR. LEA: If I'm not mistaken, Mr. Speaker, I heard you rule already. Just because the Minister of Universities didn't get the message is no reason for him to bring up the same point of order after Mr. Speaker has ruled. You have ruled, and I would ask that the House abide by that ruling.

DEPUTY SPEAKER: Points of order are always considered. It's a courtesy to all members.

HON. MR. McGEER: It's time for a very fast consultation between you and your Clerks, who well recognize that this amendment is out of order because no amendments come in this House on bills that are brought here by message if they affect the revenues of the Crown.

DEPUTY SPEAKER: I will hear one more point of order, and then I will dispense with the matter.

[ Page 2355 ]

MR. ROSE: I was intrigued by what the Minister of Science mentioned as the "wrath" of the Crown. That was particularly interesting. I hope he's not attempting to abuse the House and take a lot of time on what I think is a spurious point of order. If a hoist to, say, the Tobacco Tax Amendment Act was ruled in order, and it anticipated certain kinds of revenues coming to the Crown, then I say that the motion for a hoist on this particular measure is equally in order.

DEPUTY SPEAKER: I think we have entertained abundant points of order from both sides of the House. I will repeat what I said earlier and maybe add some further explanation. This is not an amendment to the bill. This is an amendment to the motion for second reading. Second reading does not come to us by message. Second reading simply comes to us from a motion from the House, and that motion may be amended by another member in the House. I therefore find that the amendment is in order.

[11:30]

On the amendment.

MR. KEMPF: I was going to speak very briefly to the bill, but possibly it's much more in order, considering what I have to say, to speak to the hoist.

I think, after what the member for New Westminster (Mr. Cocke) had to say when speaking to the bill, that there is a definite point to be made. Certainly, in thinking it over, it should be made on the motion for a hoist. That point is for a single tax. We have in this province and in this country a virtual melee of different taxes. To a certain extent — and it will probably come as a surprise to the member for New Westminster, but I agree with what he had to say — there are far too many tax-gatherers.

MR. NICOLSON: Have you been reading one of Bob Williams' old speeches?

MR. KEMPF: No, I don't read Bob Williams, Mr. Member.

The member for New Westminster, when speaking to the bill, said that there were people being cut out of the market. I think there is a very real point to be made for many people to be cut out of the market. There are far too many tax-gatherers. There are far too many bureaucrats. There are far too many civil servants on the backs of the taxpayers, not only in this province but in this entire country. There are far too many people on the public payroll.

DEPUTY SPEAKER: Hon. member, we're on a hoist to a sales tax act. I think the member might be offending the rule of anticipation.

MR. KEMPF: Yes, Mr. Speaker, and I'll relate this to the hoist of the sales tax. Possibly there's a point to be made for hoisting this legislation, if during that period serious consideration was given to a singular tax which would cut significantly the need to raise the sales tax to 7 percent. Think about it. If you were to have a singular tax you wouldn't need that multitude of tax-gatherers out there, all of those people who police the system, who gather the tax and who in their counting-houses count that money. If 90 percent of that bureaucracy were eliminated in this province, think of the saving.

MR. LEA: How much?

MR. KEMPF: Well, I didn't have time when I was making my notes, Mr. Member, to get exact figures together, but we need only think about it. How many taxes do we have in this province? I'll bet not one member in this chamber knows how many taxes we have in this province. I'll bet not one member knows how many tax-gatherers we have out there because of that multitude of taxes.

I think it's very valid to talk about this under this hoist motion, because the hoist, as I understand it from the members of the opposition, is to give the government time to think about what they're doing. Correct me if I'm wrong, Mr. Member.

MR. LEA: That's true.

MR. KEMPF: It's true. Well, Mr. Speaker, in that time....

DEPUTY SPEAKER: Just let me observe that the member is on the principle of a hoist, and that is correct, but I have a sense that the member also might be entering into debate which might be better discussed under the estimates of the Minister of Finance. If we could get to the hoist on the tax, that would be appreciated.

MR. KEMPF: Thank you, Mr. Speaker, and certainly I'll speak about this once again under the estimates of the Minister of Finance, but I think a point has to be made here in view of what was said by the member for New Westminster (Mr. Cocke) in speaking to Bill 15. There's a definite point to be made for government consideration of a singular tax in this province. Why do we need this multitude of taxes? We only need a certain amount of tax money. Why can't it be collected at one source? If it's collected at one source, it'll take a lot fewer bureaucrats to look after it, and that will be a definite saving to the taxpayer of this province — eliminating, possibly, the need for not only raising the sales tax but having a sales tax at all. I think that's very real to this debate. I just want to make that point. There's a terrible burden on the taxpayer because of the tax-gatherers and tax-counters and tax-policers. We have far too many taxes in this province, in this country and probably all over the world, and it's made even more onerous because of the sheer numbers that are required to collect that multitude of taxes.

So as not to be out of order in speaking to this hoist motion, I will leave it at that. But certainly, as you have suggested, Mr. Speaker, I will bring the subject up once again in the estimates of the Minister of Finance.

MR. STUPICH: Perhaps just a brief reference to the preceding speaker. We used to have a Social Credit member in the House who was an original member of the Flat Earth Society. We now have one who is promoting the Henry George economic theories of some hundred years ago. That's much more up-to-date than was the one who believed in the flat earth. It was an interesting proposition at the time, and won a lot of disciples, and apparently still has one. I would recommend that before the member does raise that in the minister's estimates he read Henry George's proposition, and he might present some interesting arguments to the House. I would perhaps remind him also that it was Henry George's

[ Page 2356 ]

proposition that that single tax be levied only on property. I'm not sure whether he would want to go along with that or not.

Mr. Speaker, I started second reading on this and went through some of the history of how we came to have a sales tax in the province of British Columbia. Speaking now to the hoist, I think it's worth recalling some of the early objections when the tax was first levied in 1948. At that time, Mr. Speaker, you'll remember that there was widespread objection in the community. The Colonist of March 18, 1948, is quoted as saying: "Stiff opposition to B.C.'s projected 3 percent sales tax loomed today among municipal governments, labour unions and merchants. The tax will not be put into effect until the Legislature approves it." That's another matter.

HON. MR. NIELSEN: On a point of order, Mr. Speaker, I wonder how a history lesson on when sales taxes began relates to a six-month hoist. Perhaps I could see that in second reading, but on a six-month hoist I don't understand how it relates.

DEPUTY SPEAKER: That point of order is well taken. Further, I think the records will show that the member for Nanaimo has canvassed the history quite well and to the benefit of the House, but now we would be offending standing order 43 if that type of debate were to continue. The point of order raised by the Minister of Health is most valid; we are on a hoist amendment at this point, and debate must be strictly relevant to the principle of delaying or hoisting this particular measure.

MR. STUPICH: Mr. Speaker, the reason for delaying implementation of the increase in the sales tax, I submit, is that there has been so much disagreement in the community as to whether the sales tax should indeed have been levied at all in the first place, whether it should be raised at this particular point in our economy or whether, indeed, it should be lowered, whether exemptions should be increased or decreased, and whether there are other means of raising the revenue required. I believe this is all part of the argument to be raised in favour of hoisting this bill for six months while we give some consideration as to whether or not we should, indeed, at this point in our economic history increase the sales tax. My argument is that we should not increase it at this time, and the basis for my argument is the widespread disagreement in the community as to whether it is good or bad for the community at this time. To do that, I'm laying the groundwork by pointing out the differences of opinion that have existed in the past — and some of them still exist today. My remarks to 1978 were intended to be very brief, simply to summarize the ground that I had covered Friday so that members would be up to date, but since that is all recorded in Hansard I'll skip that point and go on a little further.

The sales tax was introduced in 1948 and was increased in 1951. At that time it was a significant part of our revenue. But it was still argued about. I quoted Winch to the effect that this was a terrible tax to impose. In 1951, that same Mr. Winch argued at a CCF convention that it was too important a source of revenue for us to do without, so in three years that one person had changed his opinion as to whether or not B.C. should indeed levy a sales tax. It's a reason for us to consider now. The history is there, Mr. Speaker. We've considered for a long time the imposition of a sales tax, and we've increased it and decreased it many times over the 35 years since it was first implemented. At that convention, Mr. Speaker, I argued that we should do away with it.

HON. MR. NEILSEN: On a point of order. I'm sorry, Mr. Speaker, but the hoist is to delay second reading for six months, not to delay the imposition of the increase in tax. I think that the argument should relate to delaying second reading, not to the implementation of it, because it's not affected by the hoist.

DEPUTY SPEAKER: That point of order is well taken, and the Chair has already expressed to the member for Nanaimo the concern that we are revisiting other debate that the House has already heard, and that we are on a hoist motion. Will the member please relate his remarks to the principle of delay and hoist, and the House will be well served.

MR. STUPICH: Mr. Speaker, I know you're not in a position to answer questions, but I put it to you, and to anyone to whom you wish to refer: in the event that this hoist motion passes, what does that do to the implementation of the tax? The legislation before us now says that it comes into effect the day that it was introduced, July 7 or July 8. In the event that we do agree at this point in time to hoist it for six months, it would seem to me the Legislature in effect is saying that we don't want this implemented today, and we would have to postpone implementation of the tax.

DEPUTY SPEAKER: The Chair cannot answer a hypothetical question.

MR. STUPICH: I appreciate that, Mr. Speaker, but I'm saying that I can argue as to whether or not the tax should be increased or decreased when I'm talking about hoisting the bill for six months, because it's my position that if the House shows its displeasure with this legislation by hoisting it for six months, the hoist is instructing the government to cease collecting that increase in tax until a decision is made as to whether or not the bill should be proceeded with.

Mr. Speaker, there are other avenues to go. I suggested when we were first considering this legislation that the Minister of Finance might give some consideration to the idea of making the bill effective at some date in the future, rather than immediately. I suggested to him, and I think that's part of the reason for postponing consideration at this time, that that particular section of the bill should be changed — which of course we could do in committee — so that it would become effective at some time in the future, and that such a move on the part of the government would do a great deal to increase consumer confidence in our economy. Knowing that the tax was going to be increased at a certain time in the future, people would rush out to take advantage of the relatively low tax today, and would keep on buying afterwards. My argument is that we should postpone consideration for six months so that the minister might give some consideration to the possibility of changing the effective date of the legislation.

[11:45]

I suggest the government should accept this motion to postpone consideration because of the very arguments this same government introduced in the House in 1978 and 1979, when they did reduce the sales tax in the interests of improving the economy. Those were the arguments used in 1978. At the time they forgot to tell us that the federal government was

[ Page 2357 ]

paying the major cost of it. Nevertheless, the federal government did persuade all provinces to participate in a sales tax reduction program, because they felt the economy needed that kind of a consumer stimulus. They felt it would encourage consumers to buy and stimulated that encouragement by reducing the sales tax. Today we're supposed to be in a similar position, in that there is a fragile sense of recovery in the community. We need to encourage that recovery rather than discourage it, and reducing rather than increasing the sales tax would work that way, according to the government's own arguments in 1978 and 1979. So the government should agree to postpone consideration of this bill until such time as they have considered whether or not it is important to stimulate consumer buying today, in 1983, and the way to do that would be to decrease rather than increase the rate of sales tax. They need time to think about that.

It has been argued by myself and many others how regressive this sales tax is. If that is the case, then increasing it makes more of an impost on those who are least able to afford it. I think even that should be studied by the Minister of Finance before this bill is passed. I think he should consider some of the arguments that this is indeed a regressive tax, but also some of the arguments that in view of the exemptions it perhaps may not be as regressive as it appears.

I quoted a paper, when I was speaking in the budget debate, to the effect that when it comes to levying taxes, B.C. and Ontario are the two most regressive of all provinces. Yet there are the exemptions to the sales tax, and that particular tax may not be regressive. I think the minister needs time to consider that before increasing the rate of the sales tax. He needs time to consider whether the increase in exemptions makes it more or less regressive, whether it's doing anything to stimulate the economy at this time. Certainly one of the reasons for bringing in the budget that they did and one of the reasons for the restraint program they have announced is to stimulate the economy. If a bill comes in that is going to have the opposite effect, then the government would be wise indeed to postpone consideration of that bill for six months, to look at all the ramifications of it and reach a conclusion as to whether or not there isn't a better route to go, either by amending the bill when it's considered six months hence, by actually changing or dropping it altogether, or by coming up with some quite different system, as the hon. member for Omineca (Mr. Kempf)....

DEPUTY SPEAKER: Hon. member, as the Chair pointed out to the member for Omineca, that could be best discussed under the minister's estimates. I will once again remind the member that his argument would be fine during second reading, because the member is opposed to second reading, but I believe there is some confusion here. We are on a hoist motion to second reading at this point, and I would ask the member to relate his remarks to the principle of a hoist on second reading of the bill.

MR. STUPICH: Mr. Speaker, I am indeed opposed to second reading. At the moment, as you say, we are discussing whether or not we should have second reading now or six months hence. I'm advancing arguments as to why I believe the minister needs more time to consider what he's doing before proceeding with this bill. I am advancing arguments that the economy at this particular time could do better without this kind of attention, and for that reason the minister should do further research. After all, this bill was brought in with the budget, very soon after the House convened on June 27, some seven weeks after the election. The minister, I submit, didn't have time in that period to properly research, and because he didn't have the time and hurried this legislation along, he needs time to look at the effect of it, time to consider whether there isn't a better way of achieving his objectives. So I'm arguing now that the minister should be supporting a move to postpone consideration of this bill. I'm not urging at this time not to consider second reading; I did that before, and I would do it again if I had an opportunity. Right now I'm simply saying that he needs more time to look at it, more time to consider the effect on the economy and to consider alternatives, other ways of doing what he wants to do for the economy.

The minister introduced, along with this sales tax legislation, further exemptions, and also brought in things that were not taxed before. Was that the right way to go? Was there any research? In committee we'll have an opportunity to ask the minister just what research was done. I would suggest to him that if this kind of increase is going to be imposed now — has been imposed now — or is going to be postponed for six months, that he might consider some system of giving credits to the needy as a way of making it less regressive.

That's not an argument opposing second reading. It's simply asking the minister to get more information, to do more study, to look into it more thoroughly before proceeding. I suspect that the minister's staff has not really had the time to consider the effect of increasing the general rate of tax to 7 percent. The arguments of his own government, as advanced in 1978 and 1979, indicate to me that they're speaking at cross-purposes. In 1978 and 1979 they spoke in favour of a tax reduction to improve the economy. Now they're saying that to improve the economy and maintain services we have to increase the tax. Either they were wrong in 1978 and 1979 or they're wrong in 1983. They should look at it, research it, consider it, and then decide six months hence whether they wish to proceed with second reading.

That's the basis of my argument. I was suggesting some alternatives. I suggest that he consider reducing the sales tax at this time as a way of improving the economy.

DEPUTY SPEAKER: That would not be within the confines of the present debate. It would be better addressed during the minister's estimates or second reading. We're on a hoist motion now.

MR. STUPICH: I would suggest to him further that he consider the number of exemptions that we currently have under this legislation and whether or not there are too many already. I would ask him to consider in the research that he could do in the next six months whether or not he would consider some alternative way of making what some have described as a very regressive tax less regressive. That would take time. Six months would not be too long a time for this kind of research. It's the kind of research where he could well look to the outside community for help.

It’s not consumers who pay all this tax. By putting questions on the order paper year after year, we've established that roughly half of this tax is paid by the business community. I think they should be consulted as well in this six-month period when the minister is considering what should be done in the interests of improving our economy. The minister needs that time if he's going to do the kind of research necessary to bring in legislation that would actually improve

[ Page 2358 ]

our economy. That's why I'm arguing that he should agree to a six-month hoist, that the government should agree to a six-month hoist. Six months is little enough, but that's the motion before us now. I would hope the minister would take it under consideration and agree that he hasn't thoroughly examined the effects of this legislation on the community, agree that he hasn't taken into account the effects on individuals, on poor individuals, on business people; that he hasn't looked at the alternatives, hasn't looked in detail at the exemptions — surely that's a reason for taking time to consider it — and hasn't looked at whether the rate he's picked is too high or too low. He simply added one point to it. I wonder how scientific that was. It may be that....

Interjection.

MR. STUPICH: Mr. Speaker, does that member for South Peace (Hon. Mr. Phillips) have to go on proving over and over again how stupid he is?

DEPUTY SPEAKER: Withdraw.

MR. STUPICH: I withdraw.

DEPUTY SPEAKER: Please speak to the hoist. I'll ask the minister to come to order.

MR. STUPICH: I am in favour of the hoist. I am in favour in view of the history of opposition, of questions, of the concerns expressed by the many people I quoted previously, that this is not the way to raise government revenue; that even if it is the proper way, there are better ways of administering it. When I say that, I'm talking about the exemptions. There are better ways of making it less regressive than by simply adding to the list of exemptions. I suggest that one of those ways would be....

HON. MR. NIELSEN: Mr. Speaker, I'm sorry to interrupt once again, but the member for Nanaimo is speaking with respect to the hoist. He is speaking to the substance of the bill before us. And when the member is speaking about exemptions and speaking about specifics, percentages and so on, I would suggest that he has strayed completely from the concept of hoisting second reading for six months. If I could bring to your attention section 7 of the bill, it speaks about the commencement of this act, and I would suggest if the member for Nanaimo wishes to consider a six-month delay in implementation of the tax, perhaps that section may be the area where it is most appropriate to debate that. But with respect to hoisting second reading for six months, I think the member is completely out of order, and I would ask you to review standing order 43.

DEPUTY SPEAKER: Order, please. The point of order is valid, and the member has been warned now on two occasions that he is speaking to second reading and not to the hoist motion which was presented to the House. Standing order 43 does apply, and the member appears to be offending it with remarks that the House has previously heard.

MR. STUPICH: I'm not suggesting that the minister sit on an infertile egg that never will hatch. What's the point in hoisting it for six months unless he's going to review all of the arguments? What's the point in hoisting it unless he's going to review the effect of this bill on the community? What's the point in hoisting it unless he's going to look to see whether there aren't improvements that could be made in the bill? It's not a case of putting it on a shelf and letting it grow dust and cobwebs. In asking that the government agree to a hoist of this legislation, we're asking them to take six months to reconsider — possibly to change it, amendments, possibly to change the effective date. The possibilities are endless as to what they might do. But there's no point in moving a hoist if the government is simply going to sit on it and do nothing at all. My arguments are that they should be doing something in that six-month period. My arguments are that they should be researching the effects and looking into the possibilities of doing something better. Why else would they hoist a bill if it were not to reconsider their position and ask themselves, ask others, seek advice as to whether or not they are doing the right thing in proceeding with this legislation at this point in time?

DEPUTY SPEAKER: Hon. member, you may have some very compelling arguments. However, they would not be applicable during a hoist motion. They would be applicable, as you have indicated, in committee if you're considering amendments or, if you are opposed to the principle of the bill, during second reading. But we are on a motion to hoist second reading. Technical debate as it relates to the bill would be out of order and is certainly repetitive.

MR. STUPICH: Well, Mr. Speaker, I would have to ask: what could possibly be in order under a debate on a hoist if it is not to ask the government to reconsider, to research? Why else would the bill be hoisted for six months? If we are simply voting against second reading, then we achieve that by voting against second reading. But we're not doing that at this point. We've moved an amendment to the effect that it be considered six months hence. Not done away with, not dropped, not burned or destroyed, but that they reconsider their position over the intervening six-month period and decide, as I said before.... Right now I'm arguing that I should be allowed to pursue these arguments in favour of the hoist, because there's no reason for moving a hoist unless someone is going to do something in the intervening period. And it's what the minister should be doing in that intervening period that I have been presenting in favour of hoisting the legislation for some six months.

Mr. Speaker, have I convinced you that I should go on in this vein?

[2:00]

DEPUTY SPEAKER: If there are new arguments to the hoist, the Chair and the Legislative Assembly would be prepared to hear them.

MR. STUPICH: Mr. Speaker, do we adjourn at 12 o'clock for lunch today?

Interjections.

MR. STUPICH: Mr. Speaker, I would like to advance all kinds of arguments in favour of the hoist, and I have lots, but I seem to be walking a very tight rope this morning.

DEPUTY SPEAKER: The hoist motion is confining, hon. member. Please proceed.

[ Page 2359 ]

MR. STUPICH: Mr. Speaker, I have never known it to be quite so confining as it is on Tuesday morning, October 4. However, there is not too much more I can say at this time. I think the minister might well consider changing the effective date. It would have a tremendous positive effect on consumers and hence on the total economy. He might consider a reduction in the sales tax, as was implemented in 1978 and 1979, to improve the economy. He might study the regressivity, or lack of regressivity, of the sales tax, having in mind the exemptions that there are. He might consider changing the exemptions, even eliminating some of them and substituting a tax credit for needy individuals as a way of....

DEPUTY SPEAKER: Hon. member, we're now anticipating other legislation.

MR. STUPICH: I'm finished, Mr. Speaker, so just give me a moment. I've reached the end of my list.

He might give tax credits as a way of making the tax less regressive as opposed to adding to the list of exemptions. Mr. Speaker, that's my point. For those reasons I would urge the minister to accept the amendment in favour of a six-month hoist.

HON. MR. CURTIS: Mr. Speaker, it should be explained that the government will not accept the amendment for a six-month delay in second reading of this bill, for a variety of reasons. Now that I am on my feet, I appreciate the very narrow path which one must walk with respect to a hoist motion.

May I observe that some of the reasons advanced for a six-month delay in second reading, such as more research, more study of the impact of the sales tax as it was and as it is now.... That is an ongoing process in the ministry. Indeed, this topic is monitored weekly and is discussed at least two or three times a month with officials in the ministry. The same applies and can be said with respect to exemptions. I believe the minister for Nanaimo spoke of those in terms of why the second reading should be delayed. I may be faulted in other areas, Mr. Speaker, but I believe that the impact of sales tax, the complexity of sales tax, what sales tax does in terms of government revenue, what sales tax does to the consumer — whether it be an individual or a corporation or a business — are subjects monitored very carefully. Frankly, we do not need a further six months to study that which was very carefully studied up to July 7.

[Mr. Speaker in the chair.]

MR. NICOLSON: Mr. Speaker, the Minister of Finance gets up and says that we've been studying and this has been ongoing. But there is need for a six-month hoist. The minister says that the studies have been going on, but I recall many occasions upon which the social service tax was increased and we have called for some of this data, some of the studies. One can hardly assail studies that are kept secret, and if these studies are unassailable, if these are unshakeable facts, then I'm sure that they could stand up to public scrutiny. I should think that it's about time we had some real opportunity to look at this whole business of the way in which we increase sales tax — not for economic reasons but sometimes purely for psychological reasons. I think that it's been a signal from the government not so much to increase revenues, because it can have a very negative effect in increasing revenues.... It can have a negative psychological effect. But the psychological effect that they use is one that says: "We're into a period of restraint, so we've got to send a signal to everybody that they've all got to suffer a little bit."

This is a very dangerous way and an unresearched way in which to alter the taxation structure. There is need for a six-month pause. We've heard some speakers refer to the effect on restaurants. I guess the Restaurant Association came up with what they thought might be a compromise, a 3 percent tax on all meals, whether it be at McDonald's or Hy's, or even at one of the more expensively priced restaurants. But this whole business of sales tax can have such a negative effect on the economy and some of the things that we are trying to accomplish. A six-month pause in enacting this piece of legislation could be a hopeful sign.

The legislation is in effect when it is read in the budget speech, but the Legislature still has the power to ratify this piece of legislation. There have even been a few amendments or changes brought in by the minister subsequent to the introduction of the legislation and the implementing of it by reading it out on budget day. So it is not too late to make some changes. There are many things which, given some time, if this bill is kept alive for a further six months — not killed for six months — there will be an opportunity for people to have some input into ways in which this sales tax can work for British Columbia and ways in which we can stop it working against the people of British Columbia.

I live very close to the Alberta border. My colleague from Kootenay and the Provincial Secretary (Hon. Mr. Chabot) are contiguous to the Alberta border.

Interjection.

MR. NICOLSON: Am I interrupting your interruptions, Mr. Minister?

I would propose that it is not generally understood in this Legislature, so distant from that Alberta–British Columbia border, the negative effect of sales tax.

HON. MR. NIELSEN: On a point of order, once again the speakers on the other side of the House are speaking with respect to the content of the bill and not to the motion to hoist second reading for six months. The bill, with respect to its commencement, says that the tax shall be imposed July 8, 1983. If the members wish to modify the date when this tax becomes effective, perhaps an amendment could be offered in third reading, but I can't see how this relates to hoisting second reading for six months.

AN HON. MEMBER: That would be out of order.

HON. MR. NIELSEN: The member says it would be out of order. That doesn't mean it should be out of order with respect to speaking to the hoist. Mr. Speaker, I would ask you to advise the members to relate to the hoisting of second reading for six months and perhaps you could bring to their attention as well standing order 43 with its reference to irrelevance and tedious repetition.

MR. SPEAKER: Prior to recognizing a member, clearly a hoist motion does not allow us to continue to canvass as if we were in fact still in second reading. It is not an opportunity to continue second reading. Notwithstanding the fact that the

[ Page 2360 ]

referral of the subject matter to a committee has been ruled out of order in this particular chamber, to do one way what we cannot do another is equally out of order and it is beyond the scope of the Chair to rectify the particular problem. However, hon. members have an obligation that when a specific amendment vis-a-vis a hoist motion is put before us, the comments must relate to the hoist motion. It is not an opportunity to continue to canvass as if we were in second reading, nor is it an opportunity to present old arguments which have already been discussed. Clearly it is an opportunity for new discussion and new arguments relating specifically to the hoist.

Those are the restrictions, hon. members, that your Chair must abide by and must enforce in this chamber.

MR. D'ARCY: Mr. Speaker, on the point of order as raised by the member for Richmond, the philosophy behind the hoist motion is to give the Minister of Finance and his colleagues on the treasury benches an opportunity to reconsider the bill and its effect on the economy at a time when the government is attempting — or so they say — to downsize their role in the marketplace. I would suggest that the member for Richmond's point of order is in fact an attempt to enter into debate under the guise of raising a point of order without in fact taking his place in debate, and that the reasons for a hoist motion and the reason the government should reconsider are exactly what is being canvassed by my colleague from Nelson-Creston and are completely in order under all philosophies ever expressed under hoist motions in this chamber.

MR. SPEAKER: It is, however, the responsibility of the Chair to determine what is completely in order and what is not completely in order. It is an undertaking that the Chair does not take lightly; nonetheless, we must abide within the rules that guide us in this chamber.

[2:15]

MR. NICOLSON: Just before I continue on the motion, I would like to say on that point of order that I think the Chair's advice is well taken. Of course, the House is guided by practice, and the practice has allowed sufficient flexibility that while one is expounding upon reasons for a hoist new and fresh material may be injected into that. It has always been the practice of this House that such debate on a hoist motion is in order.

It is something like the ruling that was made in a football game on Monday night, which I didn't see but which I read about. A person was called for interference on a pass play. As I understand it, the practice in the National Football League is that if the ball is not anywhere near the participants, interference is not called. In this particular instance I would suggest that we have rules, but it is practice in parliament that governs the way and manner in which we debate.

MR. SPEAKER: Hon. members, notwithstanding our mutual attraction to the particular reference, only by the widest stretch of the imagination could we consider that to be relevant to the discussion at hand. The Chair had been of the impression that the point of order raised by the member was concluded and we were now back into the actual motion.

MR. NICOLSON: I'm sorry I offended. I was trying to put it into terms.... Being a school teacher, Mr. Speaker, I was seeking to put it in terms that some of these people could relate to. I know some of them watched the Monday night football game, which I didn't.

I am saying that a hoist for six months is an opportunity to leave this subject of the social services tax open for input. If we proceed with second reading now, we will lose this opportunity to leave this matter open, and it may then remain closed for several years, until there is some improvement in the economy. There might be some opportunity then to reopen the subject by reducing the sales tax — maybe when there is an election. Here we are at the beginning of a mandate, and this is a splendid opportunity to leave this subject open. The government is not losing revenues in the meantime; the taxes are being collected at these rates, restaurants are collecting the next tax, but a whole host of things could be examined while this remains open.

For instance, if a person who is resident in Alberta comes into British Columbia and purchases an automobile, they can apply for a sales tax rebate. This is good for people in automobile retail sales who live near the border. But the same principle is not applied in the case of someone buying a pleasure boat, for example, which may indeed have a sale price even greater than that of an automobile.

HON. MR. CURTIS: On a point of order, Mr. Speaker. It seems to me that the member is now entering into debate as to whether sales tax should or should not be charged at any rate, whether it's 2 percent or 10 percent. He speaks of large, durable goods being purchased in British Columbia by Albertans, and that does not relate to a six-month delay in second reading.

MR. SPEAKER: Hon. members, the chair will again call to the attention of all members the fact that we are not canvassing the main bill, the Social Service Tax Amendment Act, but we are now on a six-month hoist. Those hon. members who have been in this chamber for some time know the rules of relevance and know what can and cannot be discussed under the terms of a hoist motion. I repeat, we are not in second reading of the bill; we are in a specific amendment which is in fact a six-month hoist. The Chair must advise that there is a necessity for members to address the specifics of the amendment before us. Failure to do so contravenes the standing orders of this House. It is the responsibility of each member to relate their remarks specifically to what is before us, in this case the six-month hoist.

MR. NICOLSON: Are you asking me to discontinue my speech, Mr. Speaker?

MR. SPEAKER: Hon. member, the Chair is directing the member to the six-month hoist relevancy factor, which the member is abundantly capable of addressing, should he so desire.

MR. NICOLSON: Mr. Speaker, it has been my desire, since the beginning of this particular opportunity to address the House, to be in order, and with all sincerity, I believe that is exactly what I've been doing. I further believe that it is what the Chair believed I was doing until various cabinet ministers jumped up and drew attention to their interpretation of the rules. I don't have to read standing order 43 to know,

[ Page 2361 ]

for instance, that Mr. Speaker may direct a member to discontinue his speech. I'm quite aware of it without having to read that out of our rule book.

I do believe that there are many good reasons, and one of the reasons that we might leave this whole question open is to leave the question of sales tax, and whether it is serving the best interests of the people of British Columbia in the various ways it is being applied. For instance, what we're doing in the bill is taking away the exemption on restaurant meals over $7. Is that the area in which we should be making some change? Should we be reducing the number of exemptions in order to really create a positive cash-flow benefit to this province, or should we actually be looking at further exemptions? One of the reasons for leaving this question open and in front of the business community in this province for another six months would be to ask — to use this very real and concrete example and problem that we're experiencing in my part of the province — how many boats we are simply not selling and therefore getting no revenues to the province....

MR. SPEAKER: Order, please. Hon. member, the Chair had just concluded, on that very specific point that the member had raised, by trying to indicate in as subtle a way as possible that that particular line of argument could not fall within the scope of a hoist. The Chair tried to advise the member that that would be an unacceptable line of argument to take. At another place or time in our proceedings it would have been a most proper course, but not in this current debate. I am sure that upon reflection the member will realize that he has ample opportunity to pursue that particular argument at another stage.

MR. NICOLSON: The marina operators who have been working very hard all summer to bring dollars into British Columbia have not had the opportunity this summer to make their questions known, but perhaps during the hiatus of the winter season, if there is a six-month hoist, if the question is not closed, they will have.

HON. MR. CURTIS: On a point of order. Mr. Speaker, the member persists in straying from the motion to delay this reading for six months. If I may briefly answer without transgressing the rules, the question of boat owners and marina operators in the member's riding is a matter which he and I have canvassed, and which could be canvassed, I suggest, in my estimates. It has nothing to do with a six-month delay of second reading of this bill.

MR. D'ARCY: Further to the point of order just raised, Mr. Speaker, and to the points raised earlier by Your Honour, I think we need to make it quite clear that when a member is speaking in second reading of a bill — in this case, I believe the member for Nelson-Creston is opposed to the bill — he is speaking in favour of having the bill scrapped or defeated right now. The member for Nelson-Creston is eloquently canvassing reasons as to why the minister should give consideration over a period of time as to the detrimental and deleterious effects that this bill will have, not only on the province as a whole but on his constituency and his taxpayers in particular. Arguments for cancellation or defeat of the bill would in fact be out of order on a hoist. He is quite correct in relating his arguments why the minister should reconsider. I suggest that he should be allowed to continue because I am very interested in the points he is raising; they are of great value to the province of B.C.

MR. SPEAKER: Hon. members, there is no question that the points raised have an appropriate place, and very likely have a great deal of interest for a great number of people. Nonetheless we simply cannot allow a debate which would be in place in second reading to continue on amendments or subamendments. We must be specific to those particular points. I would again ask the member for Nelson-Creston to remind himself that we are speaking on a hoist motion on Bill 15.

MR. NICOLSON: Mr. Speaker, I haven't been speaking against the bill; I've been speaking in favour of a hoist. If the bill were to be hoisted for six months and if some slight modifications were made, one might feel honour-bound to support it.

I am arguing that this question should remain open for the next six months. I am arguing that it is not injurious to the government, because the revenues are being collected as if this bill were in effect. A six-month hoist can do the government no harm. It could, however, bring some improvements to the bill. The government is saying that they have to create a climate in this province for free enterprise. They are reducing employment opportunities very heavily in my riding, because it's been a regional governmental centre and the government is stripping away regional employment jobs....

MR. SEGARTY: From Cranbrook.

MR. NICOLSON: If you want to be a marauder and steal jobs over to Cranbrook, where you already have several fairly thriving interests, you can say that if you wish.

HON. MR. CURTIS: On a point of order, Mr. Speaker. I cannot follow the rationale in the member's argument with respect to employment levels in his constituency on a motion to delay the second reading of the Social Service Tax Amendment Act for six months.

MR. SPEAKER: Hon. member, the Chair cannot help but concur in the point of order raised by the minister. Under standing order 43, I must formally advise the member that unless he is prepared to engage either upon new argument or upon relevant debate, the Chair will have no alternative but to enforce that section, which the Chair is reluctant to do, particularly when the Chair fully recognizes that a member has the ability to specifically address the motion before him if he so desires. The member may wish to continue on the hoist amendment.

[12:30]

MR. NICOLSON: The Minister of Finance interjects and says that he cannot see the connection with employment opportunities in my riding, and I would say that the government has said — and this particular piece of legislation is part of the whole package — that we must reduce the size of government and create a climate for the private sector. This particular piece of legislation is not doing much, if anything, to create a climate for the private sector. It is continuing problems for the private sector and introducing new ones. These are problems which have been resolved in certain instances, such as the sale of automobiles which are made in

[ Page 2362 ]

Japan or back east, which I have mentioned. But in the case of boats, which are manufactured right in the Kootenays, there is no sales tax exemption even if a purchase is over $5,000.

HON. MR. NIELSEN: Mr. Speaker, on a point of order. You have brought to the attention of the member standing order 43 with respect to relevance. The member now is engaging in tedious repetition, because we've heard the same argument several times since he's been standing this noon hour. With respect, I believe the House has been most tolerant in listening to this member's attempt to speak to the hoist motion. I think he has failed to do so. It has been brought to his attention several times, and I would ask if you might consider directing him to discontinue his speech.

MR. SPEAKER: As I stated earlier, the Chair is reluctant to enforce standing order 43 unless sufficient advice has been offered, but the point raised by the Minister of Health is one which the Chair must take cognizance of, particularly because on three different occasions, when the member has engaged on a specific argument, it has been brought to his attention that that particular line of argument does not fall within the scope of debate presently before the House — vis-a-vis the boats that the individual member refers to. I must advise that if further order has to be referred to the member, the Chair will have no alternative but to enforce standing order 43, which it is reluctant to do, hon. member, in the knowledge that the member is capable of carrying the debate in order — if it is the wish of the member. I will advise so at this time. I would ask the member to continue, bearing in mind the rules that are before all members of this House.

MR. D'ARCY: Mr. Speaker, on a point of order, I fully appreciate the Chair's patience with the matter on both sides of the House, but I would like to point out that ever since he got to his feet the member for Nelson-Creston has been interrupted constantly, both officially on points of order and unofficially by caterwauling from members on the government side. I am quite confident that the member for Nelson-Creston might well have finished his entire remarks — not only the remarks in the very eloquent arguments that he has been giving out, but completed all of his remarks — had he not been constantly interrupted by points of order and interruptions from people's chairs. I would hope all members of the House would appreciate that a member could finish his speech in much better time if allowed to do so uninterrupted.

MR. SPEAKER: An excellent point, hon. member.

MR. NICOLSON: Mr. Speaker, I appreciate the difficulty that the Chair perhaps finds itself in. However, I also feel that as a member of this House I have a duty to see that the freedom of speech and the rights of hon. members are pursued as far as can possibly happen, and not allow bad precedents to take place; a duty to preserve the freedoms of speech which I think have been established by the practices of this House. I will try to make both of our lives as simple as possible for the next few moments. I will try. I cannot guarantee that it will find favour with the government House Leader or the Minister of Finance (Hon. Mr. Curtis), or the minister of economic development.

What we see in this bill is more or less a continuation of the status quo. The question on social service taxes is open once again. The social service tax came into this province about 30 years ago and here we are opening the question, tinkering with the system and yet not looking at it in a very fundamental way. If the government did accept the motion to hoist this bill for six months, it would be a clear signal to the people of this province that the government is willing to listen and take some new direction in this practice which we have been very glibly supporting and perpetuating for over 30 years. Surely after 30 years there are things that could be improved. I don't think we have reached the day, desirable as it might be, when we can eliminate the social service tax. If we were given six months, it would really get the attention of everybody. If such a motion as this were to pass, a lot of people would start putting their heads and their energies into looking at the areas of this tax that serve our best interests and at those that don't serve our best interests.

You can't collect a tax when you don't make a sale. That is the first thing about this tax. That is axiomatic. If you don't make a sale, the government doesn't get its cut. If you don't make a sale of something that is being produced.... We should be looking at the things that are produced in British Columbia. We could get the economists of this province to focus on this whole business of sales tax. We could have the sales tax as a discriminating tax in this province if we had the focus of six months and what might be a.... Well, I wouldn't go so far as to say " hithertofore," because I might trip up on that. But just imagine the stimulation to the people in the business communities in this province, the economic thinkers, the think-tank people, whether they be from the Fraser Institute or the New Pacific Institute, or other think-tanks in between. Think what they could do if they were given this signal: that we are really ready to examine some of the fundamental tax structures in the province and fine-tune them to see that wherever possible they encourage industry and economic activity, rather than simply saying that we need so many more dollars, so taking what we raised last year, if we increase the tax by 10 percent it'll probably bring in about 10 percent more.

I think I have made the point, and I have talked with the minister about the specific example that I sought to use. I'm sure other members of this House have other specific examples of how the sales tax is not serving us, of where it is a deterrent that discourages sales, and you can't collect a tax on sales that aren't made. That is why, with six months and a clear signal from this government, the whole issue of sales tax could be open for scrutiny and question. We could energize people in this province by looking into this problem and making positive suggestions, and that is why I'm supporting the motion. I'm not going to take 40 minutes to say that, Mr. Speaker.

MR. SPEAKER: Hon. members, prior to recognizing the Minister of Industry, the Chair must point out that one area which seems to be creating a small problem is the area of the bill itself. When we talk about an increase from 6 percent to 7 percent, it does not allow us the licence to discuss the entire issue of social service tax, nor the entire issue of tax at all. It is a very limiting debate, hon. members, and it is necessary for members, when discussing the hoist amendment, to remind themselves that the explanatory notes themselves must be adhered to generally; otherwise we do run the risk of widening a debate beyond the scope intended. I put that forward as some guidance to members in hopes it may assist in the scope of debate.

[ Page 2363 ]

MR. NICOLSON: On a point of order, Mr. Speaker might inadvertently have placed more emphasis on the strength of the explanatory note in a bill — and I see Mr. Speaker is agreeing. Also, the bill does go into the area of exemptions, so it is a little broader than what we've sometimes seen in this House, where we have merely changed a percentage from 6 to 7 percent.

MR. SPEAKER: Thank you, hon. member. The Chair was trying to make it more of a guide than anything else, to prevent the wide scope of debate.

HON. MR. PHILLIPS: Mr. Speaker, I wish to speak against the amendment put forth by Her Majesty's Loyal Opposition, and I wish in my short remarks to introduce some logic into the debate as to why this particular amendment should not go forward.

First of all, if you look at where we would be six months from now, you would readily understand that it would be the end of March, when a new budget would probably be introduced into this Legislature. But the opposition is bringing this six-month hoist to the bill because they don't really want to study the ramifications of sales tax; they wish to use this amendment as a delaying tactic. The reason the six-month hoist won't work is because we're already collecting the tax and we will be collecting the tax for the next six months. If Her Majesty's Loyal Opposition were really interested in taxation in this province, they would be urging that the Minister of Finance, when he prepares his next budget — which will be about six months into the future — give reconsideration to this tax. But for all practical purposes they know, as do you and every level-headed member of this Legislature — of which there aren't too many sitting in the opposition — that it will be of no use whatsoever to suspend second reading of this bill to increase the sales tax. So it is being used as a delaying tactic and an opportunity for some of the leaders over there to make additional speeches.

[12:45]

But I want to tell you, Mr. Speaker, that I'm speaking against this particular amendment for another reason. You know, the general public out there understand what is going on in this Legislature, and the opposition evidently don't understand what the public is thinking. The public understand what the opposition are doing in delaying the business of government. They understand how many tax dollars are being spent in this delay. It's too bad that there is no leadership on the opposite side of the House; that's why I have to speak against this motion, because....

MR. SPEAKER: Order, please. The member, who has sat — not necessarily quietly — in the House for the last little while has noticed that the Chair has been very insistent that the specifics of the hoist be covered. The motives for the opposition's introducing the amendment are not part of the debate, nor the imagined motives, nor, hon. members, leadership or other attempts. Hon. member, the Chair has tried to constrain the debate totally to the hoist motion, and for the minister now to introduce areas that don't fall within it would be most unfair and will suffer the same admonishment from the Chair. On that, hon. member, I would ask that the hoist motion be referred to specifically.

HON. MR. PHILLIPS: Well, I want to tell you, Mr. Speaker, that this speaker appreciates your drawing that to my attention. That is why I have been so logical in my debate thus far, in saying why we should not....

MR. D'ARCY: Mr. Speaker, with the greatest of respect, I would ask that you not ask the member to discontinue his speech.

MR. SPEAKER: Hon. members, the rules of the House must be adhered to by each and every member.

HON. MR. PHILLIPS: Mr. Speaker, I said I would be brief and logical. Once again I want to say that this hoist does nothing, which is why I'm speaking against it. Six months from now when the hoist is raised you cannot have people coming back, if you decided to change the tax, and have them applying to get their tax back. What would you do? Have line-ups at the liquor store inviting people: "If you paid the tax, come and get your tax back"? There is absolutely no logic to this amendment. Would you say to the car-buyer who sells his car: "Come and get your car back"? What would you do with the person who has eaten the meal? Maybe he didn't get a receipt, and he certainly can't produce the meal. I mean, it's totally illogical and irrelevant to have such a dumb amendment before the House. That's why I'm speaking against it. I don't know how, if you decided to change the tax, you would refund the tax.

So as I say, I'm speaking against this because if the opposition had any logic whatsoever, they would be imploring the Minister of Finance — and I know he will do that — to take a look at the sales tax and when he brings in his new budget to maybe reduce it and take the interim period....But this amendment is completely illogical, irrelevant, and nothing but a delaying tactic; and therefore, no.

MR. HANSON: The Minister of Industry and Small Business was essentially, whether he understood it or not, speaking in support of the hoist, because he was saying that when a government embarks upon the wrong course it's better to follow through and pursue the wrong course than change direction or have a second look. What we are saying in this motion is that the government should set this measure aside for six months to give us a chance to establish a committee of this House to travel throughout the province and carry out studies.

For example, in this bill they are increasing the tax on fuel-efficient cars from 2 percent to 7 percent, at a time when the Canadian auto industry has undergone the wrenching experience of retooling to try to compete with foreign markets in fuel-efficient small cars. This committee could examine the impact not only in our own British Columbia economy but for the economy of the country, because there are many theoreticians who argue that the auto industry is — no pun intended — the engine of the Canadian economy; that it actually leads the forest industry. House-building in the United States is clearly a major force, but there are many who argue that the auto industry in central Canada is the driving engine which generates the capital in the Canadian economy. I see the Provincial Secretary shaking his head. I'm arguing, Mr. Speaker, that to increase by that major percentage — from 2 percent to 7 percent — the tax on fuel-efficient automobiles, which is now the Canadian industry's mode, impairs not only British Columbia but all of the Canadian economy. It puts an inhibiting factor on it. The number of dollars that work their way through the British Columbia

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economy through the auto industry alone — through sales, through repairs, through servicing, through advertising, through dealerships and so on — is a major force in our economy. To slap a 7 percent tax that was formerly 2 percent onto that car is an inhibiting factor. What it does is encourage Canadians who want to purchase an automobile to take second looks at foreign imports, when that 5 percent reduction in tax was a built-in incentive to buy a Canadian product.

We often hear from that side of the House references to buying Canadian technology — buying the ALRT, and so on. I'm saying that a committee of this Legislature travelling the province and examining questions such as the impact on Canadian regional economies of British Columbia taxation would serve our overall economy very well.

So that is one example: to increase from 2 to 7 percent the taxation for automobiles that get 33 miles per gallon....

HON. MR. WATERLAND: On a point of order, Mr. Speaker, I'm afraid the member is not addressing the amendment motion on the floor of the House. He is on some wild flight of fancy regarding some perceived disadvantage the Canadian auto industry may have or may not have because of a tax change. I would ask that you direct him to address the specifics of the motion before the House.

MR. SPEAKER: Thank you, hon. member. Again, hon. members, the Chair must advise that there is an opportunity at hand for those specifics to be addressed — in fact, two or three, or even possibly four opportunities. But at this time, hon. member, we are specifically on the hoist, and I would ask the member to refer his remarks specifically to that point.

Mr. Hanson moved adjournment of the debate.

Motion approved.

Hon. Mr. Schroeder moved adjournment of the House.

Motion approved.

The House adjourned at 12:55 p.m.