[ Page 3637 ]

CONTENTS

Ministerial statement: Settlement of cutoff land claims. Hon. Mr. Smith 3637

Mr. Howard

Routine Proceedings

Committee of Supply: Ministry of Finances estimates. (Hon. Mr. Curtis)

On vote 27: minister's office –– 3638

Mr. Stupich

Mr. Howard

Ms. Sanford

Mr. R. Fraser

The House met at 10:04 a.m.

Prayers.

SETTLEMENT OF CUTOFF LAND CLAIMS

HON. MR. SMITH: Mr. Speaker, in my capacity as one of the ministers charged with the responsibility to carry out negotiations with our native people, I want to apprise the House today that the transfer of 12,750 acres of provincial Crown land has taken place — that is, a transfer to five British Columbia Indian bands in settlement of the cutoff land claims.

This transfer culminates negotiations that began seven years ago, first between federal and provincial governments and then with the bands themselves. The settlements were announced late last year in Vancouver, and it remained for the federal government to pass legislation enabling these transfers to take place. That has been done within the last week, and it is now the responsibility of our government to effect the transfer of the lands within 30 days by order-in-council. That is being done.

It is important, I think, that we look at the bands affected. The Squamish band is the first band; it receives 115 acres valued at some $75 million, including very valuable parkland on the North Shore and land that approaches the Lions Gate Bridge. The Okanagan band receives 68 acres valued at $7 million; the Westbank band gets 62 acres valued at $6 million; the Penticton band receives 12,335 acres valued at $12 million; and the Clinton band receives 170 acres valued at $350,000. The total value of the lands being conveyed is estimated to be approximately $100 million.

On the eve of negotiations which will be taking place in Ottawa Thursday and Friday of this week between the first ministers of Canada and the native people, it's important that the public understand the magnitude of land claim settlements. While the settlements we're speaking about are the cutoff lands and are very different from the comprehensive claims made by the native people to aboriginal title, these claims I'm announcing today represent the largest specific claim settlement in Canada. The previous largest settlement, which also took place in British Columbia, was made in 1980 with the Fort Nelson Indian band, and the House will remember that under that agreement the province paid the Fort Nelson Indian band approximately $26 million — those payments to be made from revenues derived from natural gas pools beneath the reserve lands owned by the province. Those revenues are shared in futuro between the band and the province. In the transfer of lands today, the cutoff settlements must be very specifically separated from the comprehensive native land claims that are being discussed in the ongoing discussions in the constitution. Cutoff claims are specifically claims to parcels of land which were part of Indian reserves in British Columbia. They were actually established reserves at the time of Confederation from which some of the acreage was taken following dominion legislation passed in the 1920s. That land was taken without the consent of the Indian bands, and with only partial proceeds being received by the bands at that time. It is to alleviate that grievance, and to return to the native people land or/and dollars for that part which they did not receive from their cutoff lands, that these settlements are dealing with.

In 1977 this government entered into a solemn commitment with the 22 bands involved to resolve the claims through negotiations. I say again, Mr. Speaker, that they are not to be confused with the comprehensive claims of the native bands which are advanced by bands right across this country. In British Columbia almost all of the 194 Indian bands have advanced comprehensive claims. These claims in some cases cover all the lands in this province, including Vancouver Island and the Queen Charlottes, and are asserted by native bands and associations who maintain that as aboriginal people of Canada they have an interest in the lands that has never been extinguished. This interest is usually referred to as native title. Those claims touch every part of Canada.

This is one of the issues on the agenda at the first ministers' conference in Ottawa. In this province 28 Indian bands or tribes have filed comprehensive claims with the federal government. One of those is under active negotiation, and that is the claims of the Nishga. There is no doubt that these comprehensive claims are within the area of exclusive federal responsibility. The province of British Columbia participates in the active negotiation as an observer and is of course interested in them, but comprehensive land claims are the responsibility of the federal government under the constitution and under the provision that it is within federal domain to deal with lands and land reserves for Indians. The claims today are an important commitment being kept with the native people to compensate them for the lands that were taken without their consent many years ago in the latter part of the previous century and in the early part of the twentieth century.

Ever since Confederation, I might say, Mr. Speaker, every provincial government, when in office, has taken the position that native title, if it did exist in British Columbia, was extinguished by pre-Confederation proclamations of the Governor and by ordinances of the colonial Legislature respecting the use and disposition of land. That has been the position that has been taken by the government of the day as opposed to the opposition of the day; the government of the day has always taken that position. If that position is ever to be altered, it's important, I think, of course that the public understands that land claims and giving accession to land settlement claims is a very costly matter and a matter which involves millions and millions of dollars that would have to be paid in this province and across the dominion. But I think it's fair to say that we are proud that we were able to fulfil our commitment in relation to the cutoff lands and to effect the transfers today, and it's timely and appropriate that those should happen on the eve of the first ministers' conference.

[10:15]

MR. HOWARD: Mr. Speaker, the resolution, or the groundwork, I should say, in recent times for the resolution of the cutoff lands question took place initially in the summer and fall of 1975 in this building when the New Democratic Party was the government of the day and sat down and reached an agreement with the native Indian people, with representatives of the cutoff lands committee of the Union of B.C. Indian Chiefs. That agreement was signed by representatives of the cutoff lands committee of the Union of B.C. Indian Chiefs and by the provincial government, and an announcement was made about it in this House in 1975. So that's the commencement point in recent times of the cutoff lands settlement process, which the Attorney-General has referred to today.

[ Page 3638 ]

He mentioned that there needs to be drawn — and he did draw — a distinction between the cutoff lands question and the land question in general, but he also made reference, Mr. Speaker, to the decision in 1920 about this matter which was founded upon the report of the joint federal-provincial McKenna-McBride royal commission. It's interesting to note that that royal commission came about as a result of an agreement between the federal government and the government of the province of British Columbia to settle the overall land question — that's what they were commissioned to look into. I think one must not accept the contention of the Attorney-General that they are two separate and distinct issues, because the cutoff-lands problem would not have arisen had it not been for an attempt by those two levels of government, around the time of the First World War, to settle the question unilaterally. The matters are connected.

The more important of those two, of course, is the land question. I don't think it appropriate that we should continue to hold out the spectre of millions and billions of dollars as the sole criterion that should be looked at in dealing with the land question itself. Native Indian people, in talking about the land question and aboriginal rights, and laying their claims, certainly look at the question of money, but they also look at the question of their cultural inheritance. They also look at the question of their way of life and at an opportunity to have some domain over the lands that they originally inhabited in order to preserve and enhance their culture and their way of life. They are not looking exclusively at money, even though the minister himself might be. If we put that to one side as not being the sole thing that should be examined, we may have a better opportunity to deal with the larger question.

As we've said before on many occasions, unless the provincial government, this Legislature, becomes involved in the negotiating process with the federal government and the native people about the land question, the people of British Columbia are likely to be faced someday with an agreement between the federal government and the native Indian people that will impinge upon our sovereignty under the constitution. We will then be in the position of having to react to an agreement developed without our participation. I think it's absolutely necessary that the provincial government become directly involved with that particular set of negotiations.

The latter part of the minister's statement, I think, has to be objected to. He says that successive provincial governments have held firm to the position that if native title ever existed, it was extinguished by pre-Confederation proclamations. I don't think that is the case. The case held by one government is that because the constitution of Canada gave and still does give the federal parliament of Canada the exclusive jurisdiction over Indians and lands reserved for the Indians, and because the federal government inherited the treaty-making capacity of the Crown from the Crown in England, it was the federal government's responsibility to be the initial negotiator with respect to that land question.

That particular government, and I'm talking about the one that was in existence from 1972 to 1975, did not take the position that the Attorney-General outlines here. They took the position that I mentioned earlier. I think it is wrong in principle, it's wrong in history and it's wrong in morality for governments to continue to say that if native title ever existed — implying that it might not ever have existed — it was extinguished by some other process. The mere reference to "if it ever did exist" flies in the face of history and is placing an emphasis upon the domestic law of this nation as being supreme and the paramount thing that prevails. It completely ignores native Indian law and native Indian history. I submit to the government of the day that if it wiped out of its mind that reference to "if native title ever existed, " we'd be well on the way to having some amicable solution to the problem.

Orders of the Day

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

ESTIMATES: MINISTRY OF FINANCE

(continued)

On vote 27: minister's office, $185,567.

MR. STUPICH: Mr. Chairman, we had a good discussion yesterday afternoon. It seems to me we got to the point where the minister said that the saving in last year's expenditures would total much more than the $35 million indicated by the figures to this point, but was unable to tell us just how much the budget last year was reduced in anticipation of the savings in expenditure that would be achieved. I don't suppose he has any further information on that, but we'd certainly welcome it.

This is a small point, and I think maybe the answer is in here somewhere and I just haven't seen it. Yesterday I was commenting that the budget gave us details of revised forecasts for estimates for the year 1983-84 but that we did not have a revised forecast of expenditures detailed. The minister drew my attention to table 1, but table 1 doesn't give us the details at all; it simply gives us a total figure. I'm not faulting that; I'm just saying I was expressing concern about expenditure detail not being here. I've noticed that both the revenue and the expenditure totals in table 1, page 20 of the budget, are exactly $1.8 million higher than the figures in the 1983 budget. It seems to me that I saw some reference to that, but I just can't remember what it is. The revenue figure on page 1, estimate for 1983-84 of $6,843,800,000, was actually $6,842,000,000 in the budget last year. The expenditure is the same thing; it was $8,445,000,000. Something has happened to add $1.8 million to both figures. It's not terribly significant. I have a feeling that I heard something about it, and I just can't recall what it is. If the minister knows, I'd appreciate....

HON. MR. CURTIS: Mr. Chairman, at the moment I can't help the member with that apparent contradiction, but I have officials available to the committee and in the course of the morning.... He is speaking, as I understand it, of the blue book to blue book, as reflected in table 1 — he nods his head in agreement. He speaks of a slight variation in estimated revenue and estimated expenditure, nothing to do with revised forecasts. Therefore I assume it is not something that would have appeared in a quarterly report where we revise as we go through the year. If the assistant deputy minister, who is with me at the moment, is not in a position to find that precise apparent contradiction, I am sure that it will be sent up from my office, where officials are standing by.

MR. STUPICH: Mr. Chairman, it is certainly no big deal, as it's exactly the same amount on both sides. I'd like to know the answer someday, but it doesn't matter at this point.

[ Page 3639 ]

I have some questions about the BCR. Yesterday the minister did answer a question of mine, but not with respect to that. I would really like to know where we are with respect to the guarantees that the province has made regarding the Tumbler Ridge branch line. I am going to quote from the latest British Columbia Railway statement, of December 31, 1983 –– I note the financial statements, note 4, with respect to the Tumbler Ridge branch line. "In 1981 the railway began construction of the 130-km Tumbler Ridge branch railway to the coalfields.... Since inception...the government...has granted" — I'm skipping — "$2.7 million, purchased $45 million share capital, and arranged the railway's interim financing to construct the branch line. The government of the province of British Columbia intends to retire the interim financing with equity capital financing." I take it from that that the government has entered into an agreement with B.C. Rail that the total capital cost of the Tumbler Ridge branch line will be met by additional equity contributed to B.C. Rail by the government.

The note goes on: "Until such time as the interim financing is fully retired, the province intends to annually subscribe for equity capital equivalent to the amount of interest capitalized and to provide annual grants equivalent to the amount of interest charged to operations." That apparently was the agreement as at December 31, 1982 –– I think that would have had some influence on the lenders, and this money has been available to BCR at one-half of one point less than the prime bank lending rate. With the government guaranteeing to meet all the payments — not simply guaranteeing that the railway will but actually guaranteeing that the government will put equity capital into the company sufficient to meet these principal payments, and interest to the extent that it's capitalized — and will further grant to the railway enough to make up the interest, I wonder whether those agreements are still in effect, and I wonder why there's no provision in the 1984-85 budget for any of this money to be turned over to BCR.

HON. MR. CURTIS: I don't have at my desk at the moment the financial statement to which the member refers; I know it's readily available. If I understand the member for Nanaimo's point, we now have some short-term financing in place for BCR, and it is expected that at an appropriate time — and this week isn't an appropriate time when one considers the condition of the long-term bond market — we will replace that short-term financing with another instrument of another nature. I can't forecast just what or when that will be, but it's a project for the course of 1984.

[10:30]

MR. STUPICH: This is not a question of government policy right now. These statements have been audited by an international firm of chartered accountants, Peat, Marwick and Mitchell. In preparing that note they presumably had access to documents which proved that the government intended to invest in share capital or contributed capital to the extent of the total cost of the Tumbler Ridge branch line, plus interest on any interim financing to the extent that it would be capitalized, and that the government intended further to make grants — not loans, financing or anything else — sufficient to cover the interest portion of any financing with respect to the Tumbler Ridge branch line to the extent that it was being expensed. Again, if the minister wants to come back later with that, okay, but the way I see it right now, the minister made it very clear in the budget speech that the $470 million being given to the BCR — it's not a loan, a refund or anything; it's a gift — was to be used specifically for retiring old debt and had no connection at all with the Tumbler Ridge branch line. As I read the latest financial statement available, there is an agreement in force which obliges the government to contribute equity capital in excess of $500 million — I don't know how much interest will be capitalized — at some time and, further, to continue making annual grants to cover the interest costs.

HON. MR. CURTIS: The question of the $470 million, which is the subject of legislation before the House, has been canvassed in the course of the budget debate and elsewhere. The $470 million — without offending the rules of the House or the committee — is, as I have indicated before, for the so-called historic debt. Enough said about that.

The question of the Tumbler Ridge line is that the government expects that BCR is going to be required to meet all the financing costs of the Tumbler Ridge line by some mechanism such as I described just a few moments ago, and in the most appropriate way that the government and the board of directors of B.C. Rail consider at some time in the future. So I'm not ducking behind future government policy in attempting to assist the member of the committee; I'm indicating clearly, as I understand — to paraphrase what the member said — that the firm which reviewed the accounts of B.C. Railway is aware that the government has some particular action in mind with respect to the Tumbler Ridge branch line. It is not related to the historic debt matter which has been discussed and undoubtedly will be discussed when that bill is called.

MR. STUPICH: Mr. Chairman, I'll just say this once more, and I'll leave it for now. I may get an opportunity in a later vote or something. As I read that note, the firm of chartered accountants that audited the financial statements is very clear in its mind as to exactly what is the government commitment, and it is indeed that the government will buy shares or inject contributed capital — and we're talking now of something in excess of $600 million by the time we look after all the interest charges. There was no question in the minds of the auditors at the date they audited those financial statements. I think it would be very poor policy for the government to suddenly decide on its own that this was going to be changed, having achieved quite a good interest rate on behalf of the BCR. I'll leave it at that for now and come back with something else.

HON. MR. CURTIS: If I may call on an attendant, I will return a document — which I had seen before, incidentally, but I didn't have readily available.

Mr. Chairman, earlier on this morning the member inquired with respect to the difference in estimates. I indicated that an answer would be forthcoming about a $1.8 million difference in the 1983-84 estimates. Sometimes you get a little too close to these things. There was an increase in the Tourism budget due to the sale of Beautiful B.C. magazine and an increase in revenues to offset the sale of Beautiful B.C., and I would refer the committee to page 230 of the 1984-85 estimates dealing with the Ministry of Tourism. The heading of that page is "Special Office and Ministry Reconciliations –– 1983-84" — Ministry of Tourism, total voted expenditure, transfers and so on. At the bottom, the last item

[ Page 3640 ]

there is "transfer of Beautiful B.C. magazine recoveries from voted expenditure to consolidated revenue, $1.8 million." I trust that is what the member was speaking of.

MR. STUPICH: I'm impressed with your staff for finding it so quickly.

HON. MR. CURTIS: I'm impressed with my staff too, Mr. Chairman, and thank them for the speed with which they provided that.

MR. HOWARD: Mr. Chairman, I don't know how many people I've spoken with over the years — and I'm sure all other hon. members have from time to time — who proclaim that they don't understand budgetary matters; that is, at the level of government. They may understand their own household budgets, but when it comes to governments, the complexities are either too much for them to grasp or they are, in fact, too complex, and the person does not have the time to spend trying to wade through the documentation that relates to budgetary matters. The mere fact that on budget day the minister presents to the House not just a speech but a series of books relating to the coming fiscal year and the previous fiscal year, and projections and the like, adds to the inability of the average citizen to grasp what's taking place. There's a sort of mystique involved in the whole process, and a sleight of hand as well — not a sleight of hand in an unkind sense, but a sleight of hand that seems to say one thing when in fact something else may really be intended. The discussion just a moment ago, for example, with respect to the auditors and equity financing of B.C. Rail, what the auditors felt and what the government feels and so on, is an example of how the central issue in any specific way can become so clouded and so confused that it becomes virtually impossible to grasp the full force of it.

Relating this as a problem that we face, in the sense of the relationship of government and this Legislature to the general populace — because it is, as has been said so many, many times in the past, and with such emphasis and such declaration, depending on the intensity with which one feels about this matter at any given time, that we are dealing with the public's money.... To comprehend what is involved in a million or a billion or, in the instance of this budget, roughly seven and one-half billion dollars, becomes virtually incomprehensible to the average Joe — to the average family. A million dollars is far beyond their ken or understanding. They can understand $100,000 or $75,000. They can relate that and say: "This is my house. I bought this for $75,000, and I'm paying so much a month." They can see that kind of physical asset. But to get much beyond that, unless one is.... The average citizen is just not able to comprehend what that's all about. I think that by talking in budgetary terms and dollars of that magnitude, we add to the incomprehensibility. We don't do proper service to that relationship between the citizens and the government, the Legislature of the citizens. People who work for a salary or wages and have income tax and other contributions — Canada pension and the like — deducted at source lose track of that money. They don't actually see it. They don't sit down and write out a cheque and say: "I am sending my $500 to the government. I see it in my chequebook." They don't have that connection with it. So they're lost in even being able to visualize what is happening with the deductions. They just see some figures at the end of the month or on payday, and so on.

I think government adds to this. It used to be that if you went to the liquor store and bought a bottle of something — whisky, wine or whatever — the cash register person rang up the price of whatever it was you bought and added the sales tax on top of it. You could see that some of the money you were paying for that purchase related to the social security or sales tax. But not any longer. It's all encompassed within the total overall price and thereby virtually becomes a hidden tax. It's hidden from direct view, even at the retail level. It becomes similar to the federal hidden taxes — excise taxes, customs tariff impositions and so on — that are incorporated into the price of the commodity or the price of the object.

A whole series of things that have been going on deny the average person in the general public a fuller opportunity to understand what this budgetary system is all about. Citizens are not a real part of the process. For argument's sake, I'll give you the example of debt. The minister introduced a bill the other day to increase the borrowing capacity of B.C. Hydro — and I'm not discussing legislation, I'm just using that as an example. He and other ministers have done it on other occasions. It's a standard thing. That's all I'm saying, Mr. Chairman, lest you feel that I'm about to debate a bill that is coming up for consideration at a later stage; I'm not. I'm just using this as an example that that borrowing capacity of Crown corporations, or indeed of the government itself, is encompassed within a piece of legislation. The general public has no involvement or opportunity to say: "Yes, I think that's a good idea. What do you want the money for?" There's no explanation to them, except de facto that they need the money, and at an appropriate time — and on a very short-term basis, depending on what the Legislature is doing — an explanation in the House that might or might not get out to the general public.

We have involved here — and this is what I'm trying to discuss with the minister and with the House — an aspect of democracy that really doesn't serve democracy. We have the feeling.... We have the principal question involved that once an election takes place and a government is chosen and takes office, it then says: "We are supreme to do whatever we feel like doing, whatever we consider appropriate to do, between now and the next time the general public has this opportunity to vote, without any further reference to the public." There is the supremacy of the Legislature in a lawmaking sense, but it is stymied by virtue of the rigidity that exists in the party lines. It doesn't have the opportunity because the opportunity, the atmosphere, is not there to respond to it — the opportunity to put forward a case in anticipation that that case will be examined on its merits, and not on the basis of the source from which it comes. So democracy is involved in this budget process, too, in dealing with the general public.

I submit that a budget is not the exclusive preserve of the accountants and the bookkeepers and others in the Ministry of Finance or of the person who is the Minister of Finance; it's in the domain of the people of the people of the province. While we may give lip-service to the idea of accountability, we don't in fact do it. If there is a method of getting to that in the budgetary process, I think we would be able to serve this province an awful lot better than we have been able to in the past.

[ Page 3641 ]

[10:45]

Let me give one instance of sleight-of-hand in a way that, on another occasion, I have dealt with with a little more vigour than I intend to do now. The minister will know what I'm talking about once I get on to the subject matter. When the first budget was introduced by Mr. Wolfe, he forecast that there would be a debt of $261 million. That was in 1976. He spent a great deal of time and the government spent a great deal of effort and publicity declaring about that debt and what a terrible and heinous thing it was to have to be faced with the prospect of borrowing $261,447,790. That declaration was made in the spring of 1976. Argument has been put forward very eloquently, and with the substantiation and documentation necessary to prove the case, by the member for Nanaimo (Mr. Stupich) on many, many occasions, to indicate that that figure was an imaginative figure and was developed for a particular political purpose.

What I want to get to is how the matter was approached subsequent to that. Some months after that declaration was made — June 22, 1976, as a matter of fact — the government borrowed the first instalment of the $261 million fictitious debt. It borrowed $50 million. Three months later, in September, it borrowed another $50 million. This was six months after it had said we were going to have this debt — created in the preceding fiscal year, incidentally. In November they borrowed another $50 million and in February 1977 — roughly speaking, about a year after — they borrowed $100 million. On March 15, 1977 –– 15 days before the end of the fiscal year — the government departed from its round-figure borrowing and borrowed $11,447,790, the exact amount required to satisfy the declaration in the budget for that fiscal year that there was to be a debt.

Why do you have to go through the process of borrowing precisely to the cent? Simply to keep alive the fiction. I don't have the precise figures in front of me, but when the end of that fiscal year came, which was 16 days after March 15, 1977, the government then boasted at the end of that fiscal year that they had a surplus of something like $70 million or $90 million. The figure $76 million comes to mind. That may not be the accurate one. But the government said: "We had a surplus. We did so well that we had a surplus of some $70 million." If that were the case, why was it necessary 15 days earlier to borrow $11,447,790? I submit it was purely and simply to serve the fiction that such a debt and deficit existed in the first place. That's almost ancient history and may not be exactly appropriate to the minister's administration at this particular time except to the extent that a great portion of that debt still exists. That debt was carried from year to year over a period of two or three years without any attempt being made whatever to reduce the capital of it. In fact it was rolled over a higher interest rate, thereby costing the general public a great deal of money.

I am told that on that debt of 1976 we still owe the great portion of it — probably over $200 million because it's been rolled over and not paid off and that we have paid something in the neighbourhood of $170 million in interest on a fictitiously created debt in the first place. That doesn't serve the interest of the general public. It may serve the interest of politics, which is a separate question. But it would seem to me that faced as we are with some fiscal difficulties, from what we can glean from budget matters, we should attempt to level with the general public more than has been the case until now. There is never any explanation given to the general public about why it was felt necessary, 15 or 16 days before there was about a $70 million surplus, to borrow the exact amount of money — $11,447,790 — to balance exactly with the amount projected to be the deficit in that fiscal year.

Yes, there is a mystique; yes, there is sleight of hand that takes place; and yes, unfortunately, consciously or otherwise — I would hope otherwise — there isn't much recognition given to the fact of life that the average citizen does not have a full comprehension of what's involved in budget matters. The average citizen realizes from the publicity that was given to it that maybe $470 million has gone from general revenue to B.C. Rail. He doesn't understand or appreciate the difference between debt and equity, or that a commitment was made a few years ago, or that the capitalization of B.C. Rail was altered by this Legislature to give it the opportunity to issue additional shares, preferred or common. He doesn't understand that or maybe doesn't understand what equity money is. He only knows that $470 million has gone from his pocket over to B.C. Rail, and the B.C. government — he, the taxpayer — now has, or is going to have, the debt.

What I am trying to say to the minister is that we need a little bit more open declaration about what we're doing here. I think we also need to look at the question of the federal deficit and what's entailed in that, and the fact that this government, on one occasion that I know of, urged the federal government to re-engage in a practice which would add, if not to the federal deficit, at least to the lessening or diminution of tax flow — cash tax flow from the taxpayer to the federal government — because of its advocacy of tax-writeoff situations. I refer to MURBs. We have probably far too many tax-writeoff schemes at the federal government level. The result of those tax-writeoff schemes....MURB is just one of them; films is another that was a disaster.

HON. MR. CURTIS: So were the films.

MR. HOWARD: I saw one of them. I had the occasion to visit some people in Terrace a few weeks ago over a weekend to have dinner, and they showed one of those films on cable or pay TV — whatever it was — and it was a disaster. The film wasn't worth watching. But in any event, they are tax disasters. Research and development is a disaster.

What occurs with these tax writeoffs, as the minister knows — and it may he worth putting it on record — is that a company, corporation, firm or group of people in the business develop a limited partnership structure, and they sell units of this just as you sell bonds or stocks. They say to investors: "You put your money in this particular venture" — let's call it a MURB, a multiple-unit residential building — "and you will own a certain percentage of this apartment block, depending upon how many units are sold. You pay a certain amount of money this year, a certain amount next year and so much the next year." Usually the total amount is spread over a four- or five-year period. It might be $10,000 to $20,000, depending on the project.

[Mr. Pelton in the chair.]

Part of the sales pitch also is the tax writeoff. The advantage to the investor only reaches its ultimate if that investor is in, approximately, a 50 percent tax bracket. If the investor is in a lesser tax bracket, then the full tax advantage doesn't accrue to him, but what does occur is that the individual investor can acquire a portion of an apartment building. As a

[ Page 3642 ]

partner, along with others, in the ownership of that apartment building, he can acquire, by putting up perhaps $15,000 over a year, a capital asset worth maybe $100,000 and not use a penny of his own money, Mr. Chairman — not a single solitary cent in the final analysis. The MURBs basically were structured in such a way that the initial development costs — or soft costs, as they were called — plus the capital cost allowance in subsequent years were such that the investor may put in $15,000 over a period of time, but over that same period of time would get that back on tax write-offs. In other words, if he didn't have the MURB, he'd have to pay the money in income tax to the federal government. Naturally, he put the money into the MURB — just talking about it as an example.

In addition to that, Mr. Chairman, in some MURBs that I know about — if the mortgage is, say, five years or even ten years — it's possible on the rewriting of the mortgage for the person to take borrowed cash out of that project and pay no tax on it whatever. It's free money, because that extra money, by federal tax law, is considered to be an obligation because it represents a portion of the remortgaged amount at a higher rate and because it's considered to be a debt. Incidentally, in many instances because of federal decisions — Revenue Canada decisions — while the mortgage may exist and while the person, in theory, as the investor, may have one one-hundredth of a building and therefore you would assume he has one one-hundredth of the mortgage, in fact he has no obligation for the mortgage whatever; that was eliminated some six or eight years ago.

[11:00]

We get dozens of these things across Canada. The result is a shortfall in tax money for the federal government; the result is. a shortfall in tax money to the provincial government.

Interjection.

MR. HOWARD: Well, up until now it's been a variable amount, but for the last few taxation years it's been 44 percent of the basic federal tax which accrues to the provincial government. If the basic federal tax is reduced by a tax write-off scheme, then obviously we get 44 percent of a lesser amount of money. We're in a deficit position because of that, and yet there is encouragement given to the idea of tax shelters for write-off purposes. Look at the newspapers before the end of the calendar year. They are replete with advertisements. Even a former member of this House, Gordon Gibson, is involved with somebody in a tax write-off. That's fine; he's in that business. But what I'm talking about is an exploitation for investment purposes of something which has a negative effect upon the tax flow of money into the coffers of the federal and the provincial governments.

One can argue that it's necessary to put these carrots out there. Otherwise people wouldn't invest their money in those kinds of things and we wouldn't employ people; we wouldn't build apartment buildings; we wouldn't have research and development; we wouldn't make films or whatever else it is we couldn't do; or we wouldn't save Western Forest Products, because that's involved in a tax-shelter investment program. That's the kind of situation — I read it very quickly — where you can put in $100 and write off $166, which is what Dome Petroleum did in the Beaufort Sea for a long, long period of time, the result being that the federal taxpayers basically put in the money for drilling in the Beaufort Sea.

What we need to have — we haven't had and we don't have — if not at the federal level, if there is an inability or a reluctance to do it there, is a study and a commission of inquiry into the affairs in this province to see the extent to which we the taxpayers of British Columbia and we the Legislature and the government of the province of British Columbia lose because of some of these fancy tax-shelter schemes put into effect by the federal government. We need to have that kind of examination, I submit; we need to put together some paper and some documentation to show how we have suffered by that process. I'll bet you that we would find that if that didn't exist at the federal level — you can argue it's good for investment or it's good for jobs — we wouldn't be a billion or two billion dollars in debt or whatever it is; we might have had an additional cash flow there. So I put that forward as a proposition to the minister; I say to him that while the advertising and the publicity declarations about the value of tax shelters may sound fine in the advertising sense, there is a negative side to it as well, and that is that the tax money doesn't come into the provincial government's coffers as might otherwise be the case if it weren't for situations such as that. Maybe the minister has something in those hundreds of documents that he tabled with his budget. It is a very serious question that I think needs to be examined before it gets even more helter-skelter and runaway.

Just look at the film industry and the fact that we went into tax shelters for films. Those people — and this was also part of the sales pitch of those who had put together film tax shelters — hoped the film would be a bust and lose money.

MR. R. FRASER: How ridiculous!

MR. HOWARD: Is he saying that I'm kidding? Oh, he says it's ridiculous.

If those films started to generate income for the people who put money into them, they'd be paying tax; if it was a complete loss, they could project and carry forward additional tax writeoffs against other income into the future. Revenue Canada subsequently plugged that loophole.

Interjections.

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

MR. HOWARD: Unlike some of the chatterers on the other side of the House, Mr. Chairman, I don't have a vested interest in these things. I am able to talk about it with some aloofness.

Interjections.

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

MR. HOWARD: I should say to you, Mr. Chairman, that no matter how much that member down at the end of the line here wants to interrupt me, he will get no response from me whatever. I believe it is beneath the dignity of members of this House to respond to that honourable gentleman.

I think it would be well worthwhile, and I urge the Minister of Finance, because of the availability to abuse tax shelters, because abuses were made of the tax shelter system — and maybe still are — and because of the loss of revenue that accrues to us, and, incidentally, to every other province in Canada, to have an examination into these abuses to

[ Page 3643 ]

indicate our loss position, and that of the federal government, with respect to tax shelters, many of which don't create any employment whatever. All I'm asking the minister to do is to look at those things and do something of that nature.

HON. MR. CURTIS: Mr. Chairman, I'd like to respond at some length in the same chronological order as the member for Skeena developed his themes. If I miss any, perhaps he or any other member in committee may remind me.

At the outset let me say that I disagree with the last conclusions the member came to with respect to the reason for some individuals entering into a tax shelter situation, but I will speak of that later.

The member started by speaking about the budgetary process in government, whether it's provincial, federal or municipal. I hope I do not raise yet another issue. I've been in the budget-making process in the public sector since I was a freshman alderman in 1962 in the municipality of Saanich. The only years when I was not directly involved in the process of making a budget were the three years of 1972-75, when I first served in this House and participated in the criticism of the budget. Whether it is as a completely green alderman or hopefully a somewhat more experienced member of the government, so far as I'm concerned there has always been a need to ensure that the person whose budget is being made — i.e., the taxpayer — has as much information afforded to him or her as possible.

The member then spoke about 1976, and he used the phrase "almost ancient history." I think I would be tempted to enter into yet another debate on the budget of the 1976-77 fiscal year, but I have some difficulty relating that to the administrative actions of the Minister of Finance in the year of Our Lord 1984. But, okay, he did speak of that.

With respect to the mystique of the budget, let me just say that I have the impression that it might be easy for some of us in this chamber to at times underestimate the intelligence of the individual citizen whom we represent in terms of what goes into a budget, what is required and what is expended, where the money comes from and where the money goes. Certainly in the course of the few budgets that I've had the honour to present here, much of the mail — not necessarily from someone with a degree after his or her name — indicates a very clear understanding of what is required by a province such as British Columbia in terms of its revenues and how that money is expended.

Also, admittedly, at the same time there will be those who disagree violently with the way the money is taken in and expended, but that is the democratic process. I suppose it bears repeating that having introduced it in 1976, we continue to issue quarterly reports, and these attract considerable attention around the province as well as outside of the province. These are reports on every three-month fiscal period in order that people do not have to wait until virtually the end of the fiscal year or after for a clear understanding of where the money has come from and gone and how much has been involved in the total transaction.

I think the members of this Legislature — I'm not lecturing members here; I'm simply stating what I believe to be perceived as the case by all members — have a responsibility to inform and interpret each year's budget for our constituents, and I would think that almost without exception we do that. We apply our own particular views of the strengths or shortcomings of the budget, depending on where we sit in the House. It is our responsibility to continue to do that. It's the responsibility of the news media to inform and interpret the budget and matters which flow from it; some do that exceedingly well and some do not, and again we would place our own interpretation on the skill, or lack of it perhaps, which is attendant in that. That's not an attack on the media; that's simply indicating that I think they also understand that they have a responsibility.

This year, for the first time — and as an experiment which I think worked out very well — I invited members of the taxation committee, representing essentially the accountancy and legal professions, to enter into a budget lockup on budget morning in order that they would have a clearer understanding of the underlying themes of the budget, as well as the actual numbers, and could transmit that information to their associates as soon as possible after the commencement of the delivery of the speech in this chamber. On the basis of the response that I've had in that particular action, I think I would entertain vet another budget lockup for another group of British Columbians if such a group identified itself and indicated a willingness to enter into that procedure. There's a physical limit to how many groups can be locked up during budget morning and early budget afternoon, but it seems to have worked very well. We've traditionally had a budget lockup for the press, radio and television; that will continue. We tried something a little different this year; it seems to have worked very well and indeed may merit expansion in years to come on the basis of how groups feel about it.

[11:15]

We have tried for improvement in accountability through the few years that I've held this portfolio. It's perhaps worth restating in the debate of these estimates that we also have technical briefings offered by individuals in the Ministry of Finance, almost on demand, whether for representatives of the press, particular groups in the province or, indeed, if it is wished, even for members of this chamber. This is the kind of technical briefing that would assist them to better understand certain aspects of the budget process. When I say almost on demand, it is literally that. In the event that a group sought, wished and then indicated the desire to have a briefing, such would be arranged. That might be a special interest group — i.e. the Union of British Columbia Municipalities, the B.C. School Trustees' Association, the B.C. Teachers' Federation, or a group of interested professionals. That sort of thing has occurred over a good number of years and I have absolutely no reason not to encourage that process to continue and to be expanded, up to the extent that it does not really start to interfere with the duties assigned to the officials in the Ministry of Finance who would conduct the briefing. But that is a fact. Certainly I think it's well worth reflecting on in the context of what the member for Skeena said.

In the structure of the estimates, yes, we have our debates back and forth across this chamber, but we see over a good number of years, I believe, an earnest and very straightforward attempt to improve the structure of the estimates. Certainly, Mr. Chairman, for as long as I've had the job we have wanted to provide more information, not less, to the members of this assembly, as well as to the people who pay the bills, and whenever one wishes to suggest ways in which the estimates process and structure can be further improved, I would welcome those suggestions. But I'm satisfied also that I do not need, as minister, to instruct my officials to improve the system. Indeed, they have taken the initiative, and I support them in that initiative to make the estimates more

[ Page 3644 ]

complete, more detailed and therefore more informative for the interested reader.

The 1976-77 deficit: as I say, the member raised it and categorized it as almost ancient history. But I think I am obliged to point out that the key step, the bond issue to finance the 1975-76 deficit, was taken on May 1, 1978, when the province issued a 10-year $261 million bond at 9 1/8 percent to consolidate the instruments which had been in place from 1976 onward. So May 1, 1978 was the date; it is repayable in annual instalments. For the member's information, and for the information of the committee, the unmatured debt on this particular bond as at December 31, 1983, was $130.9 million, a number that is somewhat lower, as I recall, than the member indicated when he was developing that part of his remarks.

He then moved to the question of the federal deficit. It is a matter of record that at federal-provincial meetings earlier on in my time in this House, particularly when I was Minister of Municipal Affairs and Housing, I advocated the establishment of a firm and continuing policy regarding so-called tax shelters for housing construction. The big problem, it seemed to me at that time.... Well, first of all, the reason for that advocacy was that there was a very serious shortage of housing — rental housing in particular — not only in British Columbia, but particularly in British Columbia. As I recall, it was less — and I think one would simply reflect on the fact that it was less — in some other provinces. It was particularly tight in B.C. and Alberta, and in one or two other provinces. So I advocated that.

But the focus of my comments at those federal-provincial meetings at that time was that we had this great rush toward the end of each taxation year — not fiscal year, but each calendar year — because the federal government for several years at least — and other members of the committee may recall — would not indicate until the last several weeks of the year that the program would be extended. For perhaps three years I recall saying: "Would you please give us some predictability?" We had that tremendous rush. The federal government never really came to grips with that single problem. Activity with respect to the construction of housing which would be capable of receiving a tax shelter would sort of putter along in a happy way for much of the year, and then came that feverish rush, almost a gold-rush of activity, in October and November. Usually about the end of November or early December there would be an announcement that the program would be extended. The inconsistency and lack of predictability was perhaps more serious than any other aspect of it.

I think some so-called tax shelters have a reasonable part to play in the total structure of what we do as individuals in this country, but those must be very carefully vetted. I interjected when the member was speaking about the films, and I regret that I interjected. He said that the tax shelter in the film industry was a disaster; I interjected that some of the films were a disaster, but that's a generalization. Some of the films produced in that particular way are a credit to the film industry in Canada. My interjection was off-the-cuff and certainly unseemly, and I withdraw that. There may have been some disasters, but not all of them. So whether it's for R&D, housing or exploration in the northern part of the country, there is a role to play in the total structure of what individuals do in our country. Again, predictability is important. If a particular mechanism is established, it should be very carefully thought out before it is announced, and then it should stay in place.

The member called for a review of its impact on provincial revenues in the province of B.C. I would refer him to the material that was produced a couple of years ago — I think it was 1982; certainly in recent time — in terms of tax expenditures, forgone tax revenues within B.C., which dealt with that kind of thing. It's a matter of public record, and it was released. It was issued. If the member is suggesting that a study of revenue forgone through personal and corporate income taxes should lead to specific action — i.e. a separate tax system; he didn't say that, but one might take that as a logical conclusion of a study with regard to the impact of forgone revenues — then it follows that we would have to examine a separate tax system. I have spoken of that before, as have others. We have separate tax systems in whole or in part in other provinces. We would have to give three years' notice.

I have mixed views. Certainly it's the sort of thing that I discussed at length in the consultative meetings held late in 1983 and into January of 1984 as to the merits, or lack of merit, of having our own separate income tax system. I've reached no conclusion. I've carried no recommendation, even in the most general form, to the executive council. I don't know when I would reach a conclusion. On the basis of analyzing the pluses and minuses, certainly I would be reluctant to consider a completely separate tax system within the province of British Columbia, but that could be one of the unavoidable outcomes of the kind of review which the member has suggested. I do commend to the committee a review of the tax expenditure tables that were produced I think two years ago.

MS. SANFORD: Mr. Chairman, I want to pose a couple of questions to the Minister of Finance based on what is happening to people across the country and here in British Columbia. We've had some figures recently which indicate that according to Statistics Canada there were 3.5 million people in this country who were living in poverty in 1981. In 1982 there were 4.1 million — a significant increase. The estimate for 1983 — the figures are not quite compiled yet — was 4.4 million.

What's happening here is that the biggest impact in those poverty areas relates to families where there is a single parent trying to raise children. Statistics Canada tells us that in 1982 the poverty rate jumped in that category by 8 percent in Canada. Half of the single-parent families with children live in poverty in Canada. Of course, the percentage of mother led families is rising in this country, so I assume that increase will continue to occur. But another statistic that I would like to bring to the attention of the minister is that in the spring of 1982, 95 percent of the people in Canada who were unemployed were able to receive UIC benefits. But by the fall of 1983 that figure had dropped. Only 75 percent of those people who were unemployed were able to collect UIC benefits, because others had run out.

[11:30]

I'm very concerned about what appears to be a trend in Canada with respect to poverty. I'm particularly concerned about what's happening here in British Columbia based on the fact that we've had a number of programs cancelled. We know, for instance, that there are lineups at the food banks and that the food banks that are trying to provide food for

[ Page 3645 ]

those people can't even obtain that basic necessity. We know there are lineups at soup kitchens. We know that there is difficulty out in the community raising money in order to keep people fed. I'm wondering what sort of research the Ministry of Finance has undertaken with respect to the impact of the measures that they are adopting here through the Ministry of Finance. Are you people taking any interest at all, through research, to determine the impact on those people who can least afford the various cuts and the various increases in taxes and user fees?

I would assume that no government in its right mind would want to penalize those people in the lowest income levels any more than they have to. In fact, any government would attempt to assist those people. What research has the Minister of Finance or his ministry carried out with respect to the application of the taxes and the user fees that are applied in this province on those people in the very lowest income levels — that is, those who are at the poverty level according to the definition issued by Statistics Canada? What about the impact? Has any research been done by the ministry on the impact of the lack of increase in moneys made available through the Ministry of Human Resources to those who are in greatest need? What impact has the fact that there has been no increase over the years in Human Resources benefits to those people who are at the very lowest end of the scale had? Of course, we have heard, either through the Minister of Finance or the cabinet all together or the Premier's decree or the decree of the Minister of Human Resources (Hon. Mrs. McCarthy), that not only will there be no increases but there are going to be cuts in categories of those who are receiving Human Resources assistance. What about the impact of the removal of rent control on those people who are at the very lowest end of the scale?

There are a lot of people who live at the poverty line who are not necessarily recipients of Human Resources assistance at this stage. What about the impact of hospital fees and medicare premiums? What kind of research, I'm asking, Mr. Chairman, has this government carried out on the impact of its financial policies on those people who live below the poverty line? We are told by Stats Canada that in 1983 it's likely to be around 4 million or 4.5 million people.

HON. MR. CURTIS: Mr. Chairman, this is a matter which I want to draw to the Chair's attention. It probably might be considered difficult for the Minister of Finance to respond to — not in terms of the issue of poverty or those who live at or below the poverty line.... The member for Comox has asked a number of specific questions regarding the impact of certain measures taken in certain ministries.

MS. SANFORD: All related to money.

HON. MR. CURTIS: Mr. Chairman, I've had to point out before that whether one is discussing something as distressing as those who are unemployed, those who are on UIC or those whose UIC benefits have been exhausted.... You could debate virtually every single aspect of government under the estimates of the Minister of Finance, quite apart from legislation that is before the House regarding health.

The member mentioned rent control. I would refer the member to the Minister of Consumer and Corporate Affairs (Hon. Mr. Hewitt) who is responsible for matters relative to rent. She referred to the question of human resources, and I would refer the member to the estimates which will be called at some point for the Minister of Human Resources (Hon. Mrs. McCarthy). In terms of employment development — or, stating it the other way, the lack of the lowering of unemployment — I have to refer the member to the Minister of Labour (Hon. Mr. McClelland) or the Minister of Industry and Small Business Development (Hon. Mr. Phillips). Both would have some direct responsibility to speak about that — the Minister of Health (Hon. Mr. Nielsen) as well.

I think, Mr. Chairman, that I look to the Chair for a ruling on this. Anything relative to dollars which come to government and which are expended by government could be, if one ignored the practice and the tradition of this chamber, debated in this one estimate. Frankly, I don't believe that should be the case.

MR. CHAIRMAN: The minister's point is well taken. The Chair was remiss, I suppose, in letting these matters pass, although the debate in this chamber on estimates has been reasonably free-wheeling and fairly open. I would suggest to the hon. member that the matters she wishes to discuss would quite possibly be much more properly addressed when the estimates of the particular ministry come before the committee. Would you like to continue, hon. member?

MS. SANFORD: Yes, I would, Mr. Chairman.

I think that what I was asking was what research had been undertaken by the Ministry of Finance on the impact the policies that relate to money have on those people who live in poverty. The Minister of Finance is responsible for the way in which that money is going to be collected and presumably the way in which it's going to be distributed throughout government. It's all very well to say that I should ask what impact the cuts have had through the Ministry of Human Resources or these other ministries, but surely the man who is responsible for disbursing that money to the various ministries, for chairing the Treasury Board and for making decisions about where cuts are going to be made and about what's going to be made available to the various ministries, should also undertake some research to determine the impact of those decisions on those people who can least afford it: that is, those people who live at the poverty line in British Columbia.

I think that for the minister to impose an increase in sales tax without determining the impact it's going to have on the lives of those people who are already in a very desperate situation.... A government that has any concern about people or any concern about what happens to those people who turn to government most, because of the fact that there is no work for them and they are in desperate circumstances.... Surely no Minister of Finance would impose user fees and taxes, remove rent controls and allow all of this to happen unless he had some measure of the impact of these actions on those people at the very bottom of the income scale.

The minister has answered my question. Obviously the Ministry of Finance has undertaken no research, because he has referred me to the other ministries. I know that the other ministries are handed a sum of money with which to operate every year, and they haven't done any research either, so my question has been answered. The government has not done any research; it doesn't know the impact and, based on the food banks and soup kitchens and things that are happening around the province, they don't intend to take any action.

[ Page 3646 ]

HON. MR. CURTIS: I don't wish to leave it at that. I explained for the member for Comox that in terms of the specifics which the member identified earlier, those should more appropriately be addressed when other ministerial estimates are presented — i.e., Human Resources, Health, Industry and Small Business Development, Labour, Consumer and Corporate Affairs — and I still believe that. If I could just take a moment of the committee's time to explain the process, each ministry at the officials level and then later at the executive level is asked by Treasury Board to establish its — I don't care for the phrase — programmatic priorities. It is not simply as it may have been many years ago, the Minister of Finance saying, "All right, ministry X, you get this — no debate, no argument, no suggestions, no input, that's how much you get for the next year," and going through some kind of a little ritual which might appear to be consultation. Each ministry is asked, from number 1 through to 30 or number 1 to 10 or whatever it might be, to establish its priorities within the jurisdiction of that ministry. Then we enter into the debate, first at the officials level, then at Treasury Board with several of my colleagues and, as I've said before, at the cabinet level. I think that the development of the expenditure side of the budget is too important to be left to one committee of cabinet but, rather, must involve all members of cabinet.

I honestly believe, Madam Member, that the specific concerns that you have expressed can be and should be addressed to individual ministers as their estimates are brought up in the course of the next weeks and months.

[Mr. Strachan in the chair.]

MR. R. FRASER: Mr. Chairman, I've been listening with some interest to the positions put forward by the members opposite. While it is really not my political philosophy to comment too much about that, it does strike me that the arguments put forward in the main seem to concentrate on the smaller details of the estimates rather than the outlook that the minister and the government might have for the province and for the people of the province. Certainly we have to take a long-range view of where this province is going and what our people can do. It's true that we have a deficit that must be faced one way or the other, and it's also true that everybody is concerned about deficits. Even the magazines you pick up on a newsstand these days will be commenting with some alarm on the deficits in B.C. or the deficits in Canada or, in fact, in the States or in Europe. While it may not be possible for everybody in the province to have a really comprehensive understanding of the budget or the estimates or what we actually do here, I think the minister is correct when he points out that there is a sense of understanding in the electorate, for whom I have a very high regard. They do understand that today, when they have certain undertakings and responsibilities to the community, they may in fact have to tighten their own belts at home, and they see no reason why the government and those of us who support the government should not continue with the same philosophy over here. While it is always easier to spend more than it is to spend less, when those realities face you, you are better to face them sooner rather than later, as a lot of people have found out to their sorrow.

[11:45]

We've had some comments from certain members of the House that we have to go into high labour-intensive activities, but in fact that is a philosophy that's so far out of date that it really should be brought forward again and dropped immediately. If you want to look at some of the industries where high-tech in fact has created employment — and it's my position that high-tech does that — you can look back to the early days of the automobile when it was a luxury item built only for the few at enormous cost. Then we have the introduction of high-tech to that business, and we find that in fact everybody can afford one. We also find, if we look at the North American continent, hundreds of thousands of people employed in that industry. So while we may have an apparent fear of high tech, in fact it is the movement to this thinking that will lead us out of the problems that we now appear to be in.

There was a comment earlier this morning that many people made investments with the hope that they would lose them, because that was the way they could avoid paying income tax. This is a line of thinking that I find completely incredible. There can't be anybody in the world who plans to lose. You'd probably have more fun if you threw it out of an open window than if you planned to lose. What you do is you plan to defer income taxes — as in MURBs, if you want to use that example — and then what you do with the money is build some housing for people who may not otherwise have it. So there are advantages in MURBs, and it's obviously seen by some that tax credits are a way of creating employment and a way of creating houses and other things that are really essential for the people of the country and of this province.

There was an interesting article in the Globe and Mail yesterday which points out that we have problems with funding both the social programs that we have in Canada and in the world, and certainly in addressing the problems of unemployment, since the growth of the country is not keeping up with the growth of the spending. In fact, the OECD acknowledges some big burdens, some big problems and some big financial binds that all of us are in. So, Mr. Chairman, I'm really pleased to associate myself with the government and with a minister who understands that while some things are desirable, they may not be essential. The essential thing that we are doing here, as I see it, is looking further into the future than just today or just whether or not one debt has been paid off or not. What we're trying to do in B.C., as I see it, is to make B.C. the window to the Pacific Rim; to build those industries that will employ our people in nice, clean, pollution-free environments; and to make our markets open to everybody who is a buyer and to receive their products back in return. In fact, we will help the whole nation, if not part of the whole continent. We have the philosophy here, the longterm outlook, where employment will be created, lifestyles will be acceptable and we will be able to fund programs for those who, for reasons that may or may not be of their own making, are unable to get by without some assistance which I, as a taxpayer, would be happy to provide them with. But there's no sense sinking the whole boat. If you have to put a lifeboat over to get to shore and get back, fine, but there's certainly no sense throwing the whole thing away when you can trim a little bit or take a sail down when you're in a storm. Cutting back a bit and saving the ship is what we're doing. As I said a few days ago, we are trying here, as I see it, to create an opportunity where we have more people pulling the wagon than we have riding on it. That's simply what we have to do.

MR. STUPICH: Yesterday I asked the minister a couple of questions. With respect to one of them, he referred me to

[ Page 3647 ]

the Minister of Industry and Small Business Development. I notice he did that several times this morning. I'm sure he's doing that tongue-in-cheek, Mr. Chairman. I think he knows that the only time one ever asks the Minister of Industry and Small Business Development anything is if one wants to see him play the buffoon or if one wants to take up time if cabinet ministers are missing at question period. We certainly don't get answers from that minister.

One question I asked about that ministry was that although the comptroller-general's interim financial statements estimated figures show a total of $141 million, as does the budget for last year, and although the same interim financial statements show that $111 million of this has been spent, the budget presented a couple of weeks ago shows that it's expected that only $49 million will be spent this year. If I can't get the answer out of this minister, I don't think I'll get it out of the Minister of Industry and Small Business Development.

The other question I asked about the third quarterly statement was with respect to his own ministry, where it appeared as though he would be underspent by $125 million. He suggested that perhaps all of that would be because finance charges are lower than expected, a portion of which is attributed to the interest rates being lower than expected. It doesn't nearly make up $125 million. I wondered if he had any more up-to-date figure as to exactly how much he does expect to spend in the current fiscal period.

HON. MR. CURTIS: Mr. Chairman, I do have information regarding the variance between the nine-month statement — the interim financial statement which was tabled on budget day — and the original estimate for the full year. I do not have the information regarding the Ministry of Industry and Small Business Development. I will undertake to provide that to the member in writing within the next several days.

With respect to the Ministry of Finance, the underspending in interest on the public debt is quite significant. I alluded to that fact yesterday. We were looking at probably $181 million and the most recent information available is that it will be about $72.9 million. That's a big chunk of the difference. I also referred to the fact that contingencies included fire suppression as well as the vote in the Ministry of Forests, and clearly we did not spend as much there. The timing of expenditure on some other contingencies within the Ministry of Finance, where the vote is to be found, often occurs toward the end of the fiscal year.

I trust that that is satisfactory information with respect to the Ministry of Finance. The interest is forecast to rise somewhat in the fourth quarter.

MR. STUPICH: Do you mean the rate or the amount?

HON. MR. CURTIS'IS: The interest rate. That's twice the member has had to interject — the interest rate. The chart which is provided daily — which all of us see in one form or another — on U.S. treasury bond yields doesn't look too good at the moment. With 5-year to 10-year U.S. treasury bonds just nudging above 12 percent, and 30-year U.S. treasury bonds a fraction below that but still just over the 12 percent line, that would be the highest since August of 1983. So we see some additional expenditure in the third quarter in terms of the interest rate, and that would particularly reflect on treasury bills.

MR. STUPICH: Mr. Chairman, in last year's budget the minister spoke about an employment development act allocating a total of $415 million for capital works and job programs. The minister then talked about the need and admitted the need for the government, in spite of its very poor financial position, to do something about job-creating programs. To the best of my knowledge, there was no mention at all in the budget about any concern for job-creating programs. Indeed, a sum larger than that — $470 million — is being turned over to B.C. Railway to make provision for old debts, some of which I gather do not come due until the year 2005.

In view of the economic condition and the concerns expressed by the hon. member for Comox (Ms. Sanford) about the effect of the restraint program, the government's actions and in some instances lack of actions, how can the minister rationalize last year's budget with this year's budget? How can he justify borrowing $470 million in today's market for something that is not going to have to be paid — some of it — until the year 2005? If that money were being borrowed now to continue with job-creating programs, as we talked about last year, I could understand, accept and support it. But when it is being borrowed to simply make provision for debts, as I say, that aren't going to come due for a long time, I believe that some rationalization should be expected from the minister.

HON. MR. CURTIS: Mr. Chairman, we will have the legislation before us dealing with the resource-revenue stabilization fund, and we can debate it then. The member nods in agreement. But I would point out, as I think he said towards the end of his remarks, that there are varying maturities on that debt. The last one is in the year 2005. I don't have the list readily available, but there are some due every year, every other year and every three year maturities, right on through the piece for the next 21 years. In terms of priorities of expenditure, I think those were pretty thoroughly canvassed in the budget debate. That was the essence of the debate which flowed from the presentation of the budget.

I appreciate that the other side of the House would have produced a somewhat different budget, but my view is that the one which I presented on February 20 was the appropriate one for the province in this fiscal year. It would have to be seen as part of a multi-year plan as we move into recovery.

MR. STUPICH: I don't want to belabour this, Mr. Chairman. You wouldn't let me, and it's not the appropriate time, but in the next eight years only $74 million of that $470 million comes due.

I would like to come back to supplementary estimates. The minister said that their aim is to provide more information. That may well be the case in some instances, but the information system or the method of presenting it changes from year to year and makes it very difficult to follow. For example, it used to be the case that estimates included figures as to how many employees were on staff in the previous year and how many are expected to be in the current year. Now we have a figure for salaries that includes the minister and whoever else is in his office. We have no idea how many. If the minister can tell us how many were included in vote 27 for 1983-84, and how many are being provided for in the vote for 1984-85, I would appreciate it. Also, how many of those are order-in-council appointments as opposed to people coming through the system?

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It used to be that we knew what a minister was doing with respect to travel. Now I believe all this is in one ministry, and it's a ministry where it's difficult to get any kind of information at all. So again it would seem that unless we ask the minister now where he went last year.... I seem to recall that he went on a trip to India to sell coal. If that was the case, I think perhaps the minister might like to tell us. I don't know exactly what was the purpose of the trip, who he saw.... I doubt that we would have been looking to India to borrow money from, but perhaps this would be the one opportunity for the minister to tell us what government travel he engaged in. If he could give us anything about his plans this year. We don't know how much money we're voting, or how much his ministry is asking for for his travel for 1984-85. There's just no way of getting that breakdown that I'm aware of.

[12:00]

HON. MR. CURTIS: Mr. Chairman, I think that my answer will take a little longer than we have available before the luncheon adjournment. I will deal with staffing and vacancies in the Ministry of Finance after lunch. I would be happy to describe the purpose of my travel last year and to indicate in general terms that which I propose to undertake this year — propose; one never knows — but I could do that a little later this afternoon. Mr. Chairman, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Schroeder moved adjournment of the House.

Motion approved.

The House adjourned at 12:01 p.m.