[ Page 4079 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 4079

Oral Questions

Ministry of Forests scaling practices. Mr. Howard –– 4079

Hardship assistance. Ms. Brown –– 4079

Expo 86 construction bidding. Mr. Gabelmann –– 4080

Financial aid to post-secondary students. Mr. Nicolson –– 4080

Hardship assistance. Ms. Brown –– 4081

Ministerial Statement

Major league baseball tournament. Hon. Mr. Rogers –– 4081

Mr. Lauk

Committee of Supply: Ministry of Transportation and Highways estimates. (Hon. A.

Fraser)

On vote 62: minister's office 4081

Mr. Mitchell

Partnership Amendment Act, 1984 (Bill 8). Second reading.

Hon. Mr. Hewitt –– 4084

Mr. D'Arcy –– 4085

Hon. Mr. Hewitt –– 4085

Income Tax (Health Care Maintenance) Amendment Act, 1984 (Bill 2). Second reading.

Mrs. Dailly –– 4085

Mr. Cocke –– 4088

Mr. Blencoe –– 4090

Mr. Lockstead –– 4090

Ms. Brown –– 4091

Mr. Mitchell –– 4092

Hon. Mr. Curtis –– 4092

Division –– 4094

Hotel Room Tax Amendment Act, 1984 (Bill 3). Second reading.

Hon. Mr. Curtis –– 4094

Mr. Cocke –– 4095

Hon. Mr. Richmond –– 4095

Mr. D'Arcy –– 4096

Mr. Reynolds –– 4096

Mr. Howard –– 4096

Mr. Campbell –– 4097

Hon. Mr. Curtis –– 4097

Division –– 4097

Home Owner Grant Amendment Act, 1984 (Bill 4). Second reading.

Hon. Mr. Curtis –– 4097

Mr. Blencoe –– 4098

Hon. Mr. Curtis –– 4098

Division –– 4098

Hydro And Power Authority Amendment Act, 1984 (Bill 13). Second reading.

Hon. Mr. Curtis –– 4099

WEDNESDAY, MARCH 28, 1984

The House met at 2:03 p.m.

Prayers.

HON. MR. CHABOT: Mr. Speaker, I'd like the members to join me in welcoming His Excellency Lester Whitehead, high commissioner for Barbados, and Mr. Keith Smith, consul of Barbados.

MR. SEGARTY: I would ask the members to join with me today in welcoming my very good friend and mayor of Fernie, Tiny Shatosky.

HON. MR. GARDOM: Mr. Speaker, today is the natal day of the Minister of Energy (Hon. Mr. Rogers). The very interesting and cardinal observation in his horoscope was that he "should confide in loved ones only." If that's the case, Mr. Speaker, I do hope that today in question period the questioners would so qualify. I think every hon. member would like to wish him the happiest of returns.

HON. MR. PHILLIPS: Mr. Speaker, in your gallery today visiting from Tokyo, Japan, are Mr. R. Saito and Mr. Sho Nakano of Daishowa International, Mr. Kitagawa from Daishowa in Vancouver and Mr. Nakakura from Daishowa in New York. With them is Mr. Henry Wakabayashi from Vancouver. I hope the House will make these visitors welcome.

HON. MR. RITCHIE: In the gallery today we have Mrs. Johnson with 16 grades 5 to 10 students visiting from Pacific Christian School in my constituency. Would the House please welcome these guests.

Hon. Mr. McClelland tabled the annual report of the Workers' Compensation Board for the fiscal year ending December 31, 1983.

Oral Questions

MINISTRY OF FORESTS SCALING PRACTICES

MR. HOWARD: Mr. Speaker, I'd like to direct a question to the Minister of Forests. Has his ministry conducted an internal audit or other similar type of examination of the Shoal Island scaling practices as enunciated in a report from the ombudsman and tabled in this House?

HON. MR. WATERLAND: Mr. Speaker, there have been ongoing investigations, audits and examinations of all aspects of scaling throughout the province of British Columbia for many, many years.

MR. HOWARD: It's interesting to note that he sidestepped the question. Could I ask him then, with respect to these ongoing examinations, specifically about the scaling practices at Shoal Island. Has there been an internal audit, and is it completed?

HON. MR. WATERLAND: Mr. Speaker, I don't know what the member means specifically by "audit." We have been examining the Shoal Island scaling situation for many months — long before the ombudsman's report was tabled, and continuing since that time. The examination is ongoing.

MR. HOWARD: I take it then that it has not been concluded.

HON. MR. PHILLIPS: You can take it any way you want.

HON. MR. WATERLAND: If the member wishes, Mr. Chairman.

MR. HOWARD: Inasmuch as the examination has been concluded, can the minister tell us whether, as a result of that examination, they discovered there was in fact a shortage in the volume of timber scaled?

HON. MR. WATERLAND: I can't tell the member that, Mr. Speaker.

MR. HOWARD: Can the minister confirm that as a result of that shortage in volume of timber scaled there was a consequential shortfall of income to the provincial treasury in stumpage fees, and also a shortage of payment of moneys to the contractors?

HON. MR. WATERLAND: I can't tell the member that either, Mr. Speaker.

MR. HOWARD: Will the minister make that internal audit or examination, which has been concluded, public? Will he table it in this House?

HON. MR. WATERLAND: Mr. Speaker, I don't know if that particular question is in order or not. In due course we will be responding to Special Report No. 7, which was tabled in the House by the ombudsman.

MR. HOWARD: One final question. Is it today that the cabinet will receive that particular report for consideration?

HON. MR. WATERLAND: Mr. Speaker, I'm sure the member is well aware that the matters which take place in cabinet at any time are for cabinet to know.

HARDSHIP ASSISTANCE

MS. BROWN: Mr. Speaker, my question is directed toward the Minister of Human Resources: I'm standing in for my colleague from Vancouver Centre. It has to do with the decision about hardship assistance. According to section 4(2)(d) of the Trade Practice Act, if anyone applies for credit while knowing that he or she is incapable of repaying it, the contract is considered to be null and void. The minister at one time, I gather, was a member of the credit lenders' association. Now that this information has come to her attention, is she prepared to modify the regulations dealing with hardship assistance?

HON. MRS. McCARTHY: Mr. Speaker, I can neither confirm nor will I speak to any legal opinion put forward regarding the Trade Practice Act. But I would like to speak to the hardship policy, as suggested by the member. I think there has been a fair amount of misconception regarding it in the

[ Page 4080 ]

past few days within the province. First of all, there is an impression abroad that a new policy applies to all applicants for income assistance, and I want to make it clear that the hardship policy is based on section 4 of the GAIN act, which applies only to people who do not qualify for income assistance. That's a very clear distinction, and I want to make that distinction because if persons have assets which disqualify them from receiving income assistance, then those assets include a range of things including a credit in the community. It may be credit at the bank where they are holding paper; they may have some equity in a house or in something else. Whatever it is, they use the credit of their particular individual circumstance. So we are talking about people who have credit and the capability of being independent in the province, without having help from income assistance or welfare. In the GAIN regulations there's a hardship policy under section 4 of the GAIN act. Those regulations and that section assist people even when they do not qualify — even when they have assets. If for example they don't have food and shelter, their rent is due and they cannot convert their assets at that time, then under what we call the hardship policy they can be given help on a very temporary basis.

MS. BROWN: For the benefit of the minister, I have the regulation in front of me, I know precisely what it does, and I would appreciate it if I could just get an answer to the question and not a lecture on what the act says. In fact it says that an applicant has to demonstrate that he or she has applied for and accepted available income including loans and credit. According to the bankruptcy legislation, to apply for credit when a person is insolvent and has no means of repaying is fraudulent or near fraudulence. Is the minister counselling people who are applying for hardship assistance that they should indulge in this kind of fraudulence? That's all I'm trying to find out.

HON. MRS. McCARTHY: Of course the Ministry of Human Resources is not counselling anybody to go into debt nor to use fraudulent means to obtain credit. For the member to put that suggestion to me and my staff I think is an insult to our ministry. May I say this to you, Mr. Speaker: if a person applies for income assistance or credit, it will be on the basis of that person's qualifications that he is given either credit or income assistance. The marketplace decides who can receive credit in our community, not the Ministry of Human Resources. We do not make that decision. If he or she does not qualify for credit, I assume that the store or the financial institution that is handling that transaction will refuse credit to that person. They always have; I don't know why they wouldn't do so at the present time.

[2:15]

EXPO 86 CONSTRUCTION BIDDING

MR. GABELMANN: I have a question for the Minister of Municipal Affairs. On what authority did the minister advise Bill Kerkhoff that he should drop his LRB application to have Expo declared an open site? Because the government would assure that Expo would be an open-site project?

HON. MR. RITCHIE: First of all, this question has nothing to do with this ministry; secondly, it is a constituency problem. At no time were any instructions given. I deal with all my constituents alike, and if there are questions such as arose concerning the freedom of people to bid on particular jobs, I normally explain the policy of the government, which is reflected by the legislation that was changed I believe in 1977, to make it possible for anyone, union or non-union, to bid on jobs.

MR. GABELMANN: Is the minister suggesting that he was conveying government policy to Mr. Kerkhoff that he should withdraw his application to have the board determine whether or not Expo was an open site?

HON. MR. RITCHIE: On numerous occasions I have had an opportunity to convey to many of my constituents who are involved in the construction industry the fact that this government made a change in legislation in this House which allowed for all contractors to bid on jobs where public moneys were being used. The member should realize that that is the case and that it is not a question of stating policy, but rather a question of referring to legislation that is in place.

MR. GABELMANN: Mr. Speaker, I won't pursue the fact that there is no legislation which talks about whether or not contractors should be encouraged to proceed with applications to the LRB.

I have a question for the Minister of Tourism. Has the minister discussed the letting of contracts for Expo with Bill Kerkhoff, or anyone from Kerkhoff Contracting?

HON. MR. RICHMOND: The answer is no, Mr. Speaker.

MR. GABELMANN: To the same minister, Mr. Speaker. Did the minister authorize anyone to contact Kerkhoff on his behalf with regard to construction contracts for the Expo site?

HON. MR. RICHMOND: The answer is no, Mr. Speaker.

FINANCIAL AID TO POST-SECONDARY STUDENTS

MR. NICOLSON: A question to the Minister of Education. Many students at Langara College and some at Simon Fraser University have applied for provincial government grants under the B.C. Student Assistance Plan for the two semesters beginning January 1984. Did the minister give assurances to the Langara College students on March 6 that students who had received confirmation of their grants from their financial administration officers would receive them, despite the retroactive changes in the program from grants to loans?

HON. MR. HEINRICH: Mr. Speaker, I think the member is referring to a meeting which I had with a student representative in my office, and I think it was on the date to which the member referred. The concern expressed at that time involved the grants and loans. I made a statement to them that those grants to which a commitment had been given — and I think it was before Christmas — would be honoured. Those applications which had not been dealt with or received any form of favourable consideration for the spring and fall of 1984 would probably not receive the benefit of the grant, but the loan would be made available.

[ Page 4081 ]

MR. NICOLSON: To the same minister. When you were asked whether the local financial assistance officer's recommendation constituted confirmation, apparently you telephoned one of your assistant deputy ministers and then gave assurance that that was the case. I think there were some 46 people who qualified by some December date. Is the minister saying that those 46 people alone should receive grants for the same period of education and that anyone beyond that date will not qualify even though they may also have been told by their financial assistance officers that they would qualify?

HON. MR. HEINRICH: I cannot recall the details with respect to the discussion that took place at the time. It is correct that I did phone the deputy in charge of colleges. I wanted to know the number of students who had in fact made application and for which approval had been given. I believe it was somewhere between 40 and 50 –– I thought it was closer to 40 –– I also told the students at that time that those applications which had been submitted and had not yet been given any consideration would very likely not receive a grant and that the loans would be made available.

HARDSHIP ASSISTANCE

MS. BROWN: This question is directed to the Minister of Consumer and Corporate Affairs on the issue of the Trade Practice Act. In an interview on March 23, the Minister of Human Resources stated that people who applied for hardship assistance because they were unemployed could use their credit card, because: "Woodward's would provide them with groceries for up to $1,500." Can the minister confirm that the minister was at that time suggesting that the applicant indulge in something which would be a contravention of the Trade Practice Act, section 4(2)(d) ?

HON. MR. HEWITT: Mr. Speaker, with regard to actions by another minister, I won't comment on that. With regard to the Trade Practice Act and the concern the member has, I'll take the question as notice.

MAJOR LEAGUE BASEBALL TOURNAMENT

HON. MR. ROGERS: Mr. Speaker, before we proceed to the next order of business I would like to make a ministerial statement. As members will probably be aware, this weekend marks the first occasion on which a major league baseball tournament between two competing teams will take place in the province of British Columbia. It will take place at B.C. Place Stadium on Friday, Saturday and Sunday afternoons. As of noon today, 80,000 tickets had been purchased. I think we can safely say that....

MR. HANSON: Will you be in the box?

HON. MR. ROGERS: No, as a matter of fact, hon. member.

MS. BROWN: Mr. Speaker will be in the box.

HON. MR. ROGERS: Neither will the Speaker, for that matter.

The significance of this event, Mr. Speaker, is that the owners of major league baseball will make a determination, based on the number of people who appear at this particular series of games, as to whether or not British Columbia will qualify to be included in their rather exclusive club of cities which host major league baseball teams. It would be the best thing that we could do for tourism in the province of British Columbia. If the members opposite and others who have the opportunity would take time out of their busy schedule, perhaps they might enhance the numbers somewhat.

MR. LAUK: On behalf of the New Democratic Party, we wish to fully and completely support the spearheading efforts of His Worship Mayor Mike Harcourt to bring a major league team to the greatest city in Canada. Only the other day His Worship informed me that in spite of the diffidence of the hon. minister and this government, he will make every effort to bring in a major league team. If one does come, it will be a feather in the cap of the New Democratic Party mayor of the best city in the country of Canada.

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

Leave granted.

HON. MR. HEWITT: Mr. Speaker, in your gallery are three people from my constituency: Mrs. Miriam Wolfram, Mr. Brian Wiebe and Mr. Dominic Morrow. They are representatives of Hardy View Lodge, intermediate-care facility in Grand Forks, here to meet the Minister of Health. I would ask the House to welcome them.

Orders of the Day

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

ESTIMATES: MINISTRY OF
TRANSPORTATION AND HIGHWAYS
(continued)

On vote 62: minister's office, $218,797.

MR. MITCHELL: I directed a number of questions to the Minister of Transportation. I will continue unless he indicates that he wishes to answer the first two questions that I brought to his attention.

The next question is one I have been discussing on and off in this House since 1952: the problem of drainage in the Western Community. The particular issue that I would like to bring to the minister's attention is the Bilston Creek drainage problem, For your benefit, Mr. Speaker, I'll give you a little of the history of the problem.

Bilston Creek drains a large area in the Western Community, especially Happy Valley. Because of the problem in that area, the Capital Regional District has put a land freeze on development of any lands from which water would drain down into Bilston Creek. Over the years I have attempted to have the Minister of Highways accept some of the responsibility for upgrading the waterway so that those who live in the low areas won't continue to be flooded every year and the provincial emergency service won't have to continue to give funds for flooding problems. For many years the Highways ministry said that they would not accept any responsibility for the drainage of that area. They considered it a local problem. A few years back the then Minister of Municipal Affairs had

[ Page 4082 ]

dissolved the Bilston Creek Improvement District, which was attempting at that time to bring in some rules, regulations and standards for that particular drainage problem. Because of the area being frozen for any subdivisions, many citizens and developers have approached me and approached the Capital Regional District to have some changes made so that they can proceed with their subdivisions or with their development. In some of the undeveloped areas the developers have gone ahead and put in roads, and cleared a lot of areas off, because there's no law against putting a road on your own property. It only becomes an offence when you attempt to sell a lot you have subdivided.

[2:30]

Each year the water is running down in larger and larger amounts into Bilston Creek and causing problems. Recently the Highways ministry has granted one particular developer an opportunity to do some offsite work for a downstream benefit on Millstream Creek. He is being allowed to submit some plans to clear out the Bilston Creek area, with the hope that the clearing he does on the creek will alleviate some of the flood problems. My main concern — and I've discussed it with the local regional engineer — is that clearing the middle part of the creek is not going to solve the downstream problem of flooding; what it's going to do is move a large body of water more quickly from one clogged area to the next clogged area.

I have attempted, through the regional engineer, to get the Highways department to accept some responsibility for this particular problem. I would like the Highways department to accept some of it. Now that they have gone as far as allowing one developer to do some off'site work on that particular creek, I would like the clearing to start at the bottom end — the local area is known, I believe, as Forest Way Road — where the waterfall is, that is, start the clearing in the area where the water is no longer a problem when it goes over the falls. If they can make some arrangements with other developers or other people in the area, I would like them to continue that policy of clearing the creek all the way back so that we don't have water moving faster and flooding other homes in that area. To me it seems very straightforward, but somehow, in the bureaucracy, it doesn't seem to work from either an engineering point of view.... We can start clearing, but why start clearing in the middle? If you're going to start clearing — which I think should be done — start at the bottom end and work up the creek, so that this coming winter no one is going to be faced with the large amount of water that is coming off some of the developed areas and causing a continual problem.

I talked about this for the first time in 1952, Mr. Chairman, and it has taken a long time to move somebody in this ministry to look at the problem and do something positive and constructive. Now they've done something positive. They have accepted some offsite work. But I think the positive work is being done in the wrong spot, and I would like some comment from the minister.

The fourth issue I would like to bring to the minister's attention is, again, something I have brought to his attention by letter; I've also sent letters to the Minister of Consumer and Corporate Affairs (Hon. Mr. Hewitt). It's the problem that when subdivisions are allowed to be developed, both the Ministry of Highways and various other ministries have some rules and regulations that a developer must conform to. One of the rules is that any roads must be built within a standard that is acceptable to the Highways ministry. Another one of the regulations that they have to conform with, supported and enforced by Consumer Affairs, is that before any of the lots can be sold to the general public, a prospectus must be filed with the Ministry of Consumer and Corporate Affairs, and in that prospectus there are certain agreements that are proposed to have been made. In this case it is the prospectus of the Westland Industrial Park Ltd. pertaining to a subdivision in the Metchosin area and running off Happy Valley Road. In the prospectus that was filed with the ministry, section 13 says: "Access is from Happy Valley Road, Metchosin, British Columbia. Roads are completed and gravel surfaced to Department of Highways standards, and all costs in this regard have been borne by the promoter herein."

I've brought this fact to the attention of the Minister of Consumer and Corporate Affairs and his predecessor. In this particular case the access road, that is approximately 14 miles closer to Victoria, has never been completed to Highways standards in the subdivision. The local road is known as Lindholm Road, and somewhere along the line the Highways ministry would not accept the grade on it and consequently they will not maintain it. Somewhere down the line.... I believe this was after the prospectus was put out, but not before the majority of the people who are living in that particular subdivision bought and built their homes. Somewhere down the line, if I can accept that the minister's letter to me is correct, another subdivision approval plan must have been okayed. The other road.... Reading from a letter from the minister: "I think there has been a misunderstanding. The subdivision was approved with public road access off Kangaroo Road only. The road you refer to, which runs from Happy Valley Road to the easterly end of Lindholm Road, is a private road." When that particular subdivision was okayed with an access to Kangaroo Road, which, as I say, adds approximately 10 to 14 miles to the access to Victoria.... I think somewhere down the line there is a responsibility of the government to uphold the prospectus that was filed with the Minister of Consumer and Corporate Affairs which led to a lot of people building and buying in that particular area.

I find interesting a letter that I received from the office of the Minister of Consumer and Corporate Affairs, dated April 13, 1983. In it he states:

"It would appear that the main access to the subdivision is indeed from Kangaroo Road, rather than from Happy Valley Road, as stated in the prospectus. According to the developer, it was intended to bring Happy Valley Road up to Department of Highways standards, but financial troubles prevented this from being done. The developer has advised that he has done some work on the road to bring it to a reasonable standard and intends to meet Department of Highways requirements within the next few months."

Interjection.

MR. MITCHELL: Who signed it? Do you want me to read it out and put it on record?

AN HON. MEMBER: Please do.

MR. MITCHELL: At that time I imagine you were out campaigning, because it was signed "for James J. Hewitt" by Jill Bodkin. To keep the record straight, I did say "from the minister's office." I was not going to embarrass you that you

[ Page 4083 ]

were not here to do your job on that particular date. I know where you were.

This is the problem that I'd like to bring to the minister's attention. The Minister of Consumer and Corporate Affairs got up here yesterday and asked for something like 16 miles of road for one particular event that's going to happen in his riding. I'm asking, Mr. Speaker, if the 200, 300 or 400 feet of this road could be brought up to some standard of highway construction and be paved. The road is in a deplorable state. The public uses that road, and it destroys the cars. According to my informants, the highway department is one of the greatest offenders of taking a shortcut from Happy Valley Road through Lindholm Road and through the subdivision to other parts of the community. They're not going to go around and add another five or six miles to their trips. I don't blame them. When I'm in that area, I go up the road. One of the main problems is that the main access from the Metchosin volunteer fire department, and the closest access, is up Lindholm Road. If there is a bush fire or a fire in a home in that subdivision, the fire department will have problems getting up that road, which is in a deplorable condition.

I don't want to make it political, but when the last campaign was on, certain strong supporters of the government said that if the people voted for the Social Credit candidate, that road would be fixed. I know I can't hold the minister responsible for those statements, but I do think that we have a moral responsibility to the community. Hundreds of thousands of dollars have been spent in that subdivision. It's less than a quarter of a mile, I believe, that needs correcting on that road. We can give access as was promised in the prospectus when people bought their land and built their houses. I ask the minister to give serious consideration and not play little games with bureaucracy. Let's get it straightened out. I promise not to bring it back again if it's corrected. Next time I will thank him for doing it.

One minor question I would like to ask the minister is: what is the type of sealer they use when they do a sealcoat, before they put pebbles on the road and prior to doing a sealcoat for black topping? I have had a number of complaints which I took to the previous regional manager. One case was the road going into Willis Point. They put a sealcoat down and then put down the pebbles. I was being led to believe that the sealcoat that they're using is a water-based oil emulsion. If the sun is not out and it happens to rain, it keeps the emulsion in a liquid state. Cars continue to be covered with tar, which causes an awful problem for the owners to clean off. I also had a similar complaint on the spray used on the Millstream improvement before putting down the blacktop. The spray got wet and it was tramped in and out of all the houses. A lot of the business people in the community were complaining, because people who walked through it were tramping oil into their stores. In fact, a few stores had signs up asking people not to come in with tar.

I was wondering if the minister could answer whether there is any policy on the type of emulsion used. Is there a difference? I've been given conflicting stories, Some say that neither the oil-based sealer or the water-based sealer will seal fast enough, and it may still come off the road. There is an argument, and I've had conflicting statements on it. I ask the minister if he could give me some answer through his deputy. Is it possible that the water-based emulsion, which I think was designed for green cement in foundations, could be not used, as it destroys a lot of people's homes and messes up their cars?

[2:45]

HON. A. FRASER: To the member, back to front, we have a lot of trouble with sealcoat jobs wherever they are. Nobody is satisfied except the engineers, and they're really satisfied because sealcoating doubles the life of pavement. I might say that the motorists offend terrifically on any jobs we do: they don't pay attention to the signs posted to drive at certain speeds, and away goes their windshield and everything else, and then they sue us for that. We try to control the sealcoating jobs. Everything is posted, but the drivers don't pay any attention at all. They go right through and away goes their windshield and headlights and they blame us for it, The end result of any sealcoat job just about doubles the life of pavement. I don't want to get into the emulsion part, as we haven't an engineer here at the moment to answer the question right away, but we have a lot more problems than just that with each sealcoat job, and we continue with them. We also try and get the best weather, and we don't always get the breaks there, which can do a lot of harm to a sealcoat job.

You lost me on the subdivision, but we'll look into that access road where one prospectus shows Kangaroo Road and the other Happy Valley or Lindholm Road. I understand from my deputy that it is our road, and I don't see why it has to be in the condition you say. If it's a maintenance problem, we'll look into it and correct it.

You mentioned drainage. As far as our ministry is concerned, we are responsible for the drainage of the highway system, but we're not responsible for the whole area. If you're in a municipality, they look after that, and in the member's area there is the regional district. Our responsibility for drainage is to the highway right-of-way, but not all over the place and away from the highway system.

We are going to look into the Port Renfrew maintenance and see what we can do there. I believe we had three or four people there. We are taking them all back to Sooke, and we will try to operate out of Sooke for economic reasons. We will take another look at your request, which is to have some representation in Port Renfrew.

I heard the member talk on the Whiffin Spit the other day. Unfortunately I don' t know where it is, but I think we're back in the same position there that we can't work on a place that isn't on the highway right-of-way. I don't think the Whiffin Spit is on the highway right-of-way. It is illegal to spend money on anything away from the highway right-of-way. I don't know whose responsibility it is, but it wouldn't be ours if it isn't in the highway right-of-way.

I would like to reply to the questions that the member for North Island (Mr. Gabelmann) asked late last evening. We are looking at the charge on bicycles on Highways ferries. The member's other question was the Tahsis-Woss proposed road being endorsed by the Vancouver Island municipal association. Our engineers don't agree with that, but we appreciate the observations they've made. We are basically talking about $30 million to build a different access road from Tahsis to Woss, and not get the use of it for probably four or five years. We want to upgrade the existing road which goes from Tahsis to Gold River so that the people would get immediate benefit from that. We are still at odds there, but we appreciate the observations which were made.

I think that covers most of the questions which were asked.

[ Page 4084 ]

MR. MITCHELL: It is not for me to tell the minister what is described as a highway, but I think if he checks the Motor Vehicle Act, the subdivision act and roads and highways, even a bike path, a walkway or a bridle path can be classed within the subdivision as a highway. I don't happen to have the particular regulations with me, but I know that if you are doing a subdivision you can have access, so it doesn't have to be a highway. At Whiffin Spit a lot of people walk down the access to the park area. The government granted $30,000 from the Lottery Fund to the chamber of commerce just before the election in 1979 to have work done on that particular area. Some of that money was spent on enlarging the parking lot. I really think the Highways ministry, for everyone's sake.... Let's not play little games and say: "Well, that's not my department." It is a problem out there. For you, Mr. Minister, and those who don't know where Whiffin Spit is, it goes right across and protects Sooke Harbour.

As far as Port Renfrew, I thank the minister for looking over the shutdown again. I wonder if he would agree to have a year's postponement while they study it again and listen to some local input from the volunteer fire department, the ambulance crew and the community association. Get some dialogue — that's what we hoped to get when the committee came down from Port Renfrew to meet with the minister — on how they view it. If you can have a year's extension while you have that dialogue, I know the whole community would appreciate it.

We talked about Bilston Creek, which you say is not the problem of the Highways ministry. This is the argument you've been giving me for the last five years. I accepted that. The Capital Regional District accepted that. They were accepting the responsibility. But the Highways ministry has now given one developer an opportunity to do some off-site work in Bilston Creek. If you are going to give a developer the opportunity to do the off-site work so he can get his subdivision through, all I'm asking is that you co-ordinate the work so it starts at the bottom and works up. If you're not going to do any work or put any money into it, I can accept that if that's the policy; but if the Highways ministry is allowing someone to work in there, I think they should take the responsibility to co-ordinate it. I don't want to see one section of it cleared out, and a lot of water come down and flood out some of the people who are living below the area that is going to be cleared out; that that particular area will be twisted and clogged up and they will be flooded. All I'm asking is that the ministry co-ordinate it and do something positive on it. And if they look at Lindholm Road they will solve it. I hope the next time we have estimates I'll be here to thank him.

Vote 62 approved.

Vote 63: administration and services department, $10,213,139 — approved.

Vote 64: highway operations department, $461,206,535 — approved.

Vote 65: hydro development — highway construction, $10 — approved.

Vote 66: motor vehicle department, $28,035,515 — approved.

Vote 67: Motor Carrier Commission and branch, $2,627,154 — approved.

Vote 68: transportation policy department, $5,695,879 — approved.

Vote 69: air services branch, $5,228,694 — approved.

Vote 70: Crown corporation assistance, $55,807,700 — approved.

The House resumed; Mr. Speaker in the chair.

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

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

Leave granted.

HON. MR. BENNETT: In the gallery today is a very welcome guest of mine, my mother, and her — I was told to say this — much younger sister, Mrs. Helen Morrison, and friends Milton and Helen Kendrick. I'd ask the House to welcome them.

HON. MR. SCHROEDER: I call second reading of Bill 8, Mr. Speaker.

[3:00]

PARTNERSHIP AMENDMENT ACT, 1984

HON. MR. HEWITT: I rise to move second reading of Bill 8, Partnership Amendment Act, 1984, which I have reintroduced in this session with strong support, I might add, from the legal and business communities. Since last fall when I first introduced the bill, we have had an opportunity to make some refinements, basically of minor administrative nature, that clarify some of the procedures in the original bill.

Limited partnerships have always had a strong potential appeal to investors for tax reasons and for the attraction of limited liability, but under previous requirements any change to the structure of a limited partnership — in fact its very formation — required the signatures of all partners. This meant it was often impractical to set up or operate ambitious, limited partnerships involving a large number of individuals. By removing the requirement for such documentation, we have streamlined this legislation to a point where it will now be feasible for many investors to participate easily and without undue bureaucratic intervention. It will also be possible, providing other provincial statutes are complied with, to sell limited partnership units on the Vancouver Stock Exchange so the average citizen may also participate in this investment approach.

I envision that this amendment will have a particularly positive impact on the resource development sector of our economy. As the hon. members are aware, the process of rebuilding industrial plants requires a heavy capital expenditure with virtually no prospect for short-term profit. If the tax incentives fall into place, as they well could for many new, limited partnerships, development costs could be taken as tax deductions right away. Accordingly, this change to our partnership legislation should have the effect of producing

[ Page 4085 ]

jobs by encouraging investment in our resource sector. Whether or not a particular partnership would be eligible for such tax advantages will have to be determined on an individual basis in consideration of the specific partnership, its organizational structure and its method of doing business.

A moment ago I mentioned the necessity for compliance with other provincial legislation. To ensure protection of the public, the superintendent of brokers will require that the prospectuses for limited partnership adequately inform investors of their rights and limitations. The superintendent, in conjunction with the Vancouver Stock Exchange, will also determine whether or not limited-partnership units could be listed on the exchange and what regulations and requirements would apply.

Another advantage of this amendment is that by facilitating the mechanics of creating and running a limited partnership, it will ease the administrative burden on our companies office. For example, each limited partnership would maintain its own records of participation in the operation, a procedure which will reduce the filing workload in the companies office.

Finally, this is not a first in Canada or on the North American continent. Other jurisdictions in the United States and Ontario have similarly lifted administrative restraints from their partnership legislation, with notable success. Implementation of such legislation here in British Columbia will, I believe, prove particularly beneficial, given the strong resource base in our economy.

With those remarks, Mr. Speaker, I now move second reading.

MR. D'ARCY: We in the opposition will be supporting this bill and concur in the remarks of the minister. I would like to make the point, though, that while the bill does bring the Partnership Act in line with the Securities Act and other legislation in the province, I'd like to reiterate the oft-voiced concern that we have for modernization and an upgrading of the Securities Act itself. I would hope that when that happens any need for upgrading the Partnership Act will be taken into account.

We note that in some aspects, especially the.... I won't call them silent partners, but inactive partners in a partnership have less protections than they had before. We don't object to that on this side of the House. I would think that anyone who enters into a partnership in British Columbia is in a situation where he has a piece of legislation to form the partnership that does conform to legislation elsewhere. If there are not the same checks and balances that were there before, perhaps that could well be each partner's problem to deal with in terms of the articles of incorporation.

I would concur that as long as the public interest, the investment community's reputation in British Columbia and our province's reputation as a good place to invest are protected, there is no reason to have a lot of bureaucratic checks and balances on a partnership. We certainly have no objection to partnerships of this nature being listed on the stock exchange. We would hope — I think all of us in here hope — that there will be some benefit, not only in the resource sector but also in other areas of endeavour within the province of British Columbia.

HON. MR. HEWITT: Mr. Speaker, in rising to close debate, I would comment that we recognize the need for protection of the public and the investor. I wish to inform the member that regulations with regard to the filing of prospectuses and the adequate informing of prospective investors will be maintained in this regard, dealing with limited partnerships as with companies with respect to filing prospectuses, etc. With those comments, Mr. Speaker, I move that the bill now be read a second time.

Motion approved.

Bill 8, Partnership Amendment Act, 1984, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. SCHROEDER: Mr. Speaker, I call adjourned debate on second reading of Bill 2.

INCOME TAX (HEALTH CARE MAINTENANCE)
AMENDMENT ACT, 1984
(continued)

[Mr. Strachan in the chair]

MRS. DAILLY: Mr. Speaker, we have heard from the Minister of Finance (Hon. Mr. Curtis), who introduced this bill, We also listened to the Minister of Health (Hon. Mr. Nielsen) take part in the debate on this bill. I regret that he's not in the Legislature at the moment. In debating this bill, I find it necessary to repudiate many of the statements made by the Minister of Health in his attempt to support this increase in income tax.

My primary concern with this bill and the concern of the opposition.... We are, of course, opposing this bill; this was already brought forward by our Finance critic, who spoke at length on this bill. We are opposed to this bill for a number of reasons. The first reason is that we do not feel that this bill is necessary. It has been brought into the House under the guise of saying to the people of British Columbia: "Look, we need more money for health because of that terrible federal government, which is not treating us properly." References have been made to the new Canada Health Act, which is apparently the guise being used to increase taxes on the people of British Columbia. That is our first reason for opposition to this bill. We do not believe that this bill is necessary for the delivery of health services in this province, as has been stated by both the Minister of Finance and the Minister of Health. I would like to go into that in some detail.

I'd like to point out that the first part of this bill is the 8 percent surtax, which is to go into effect in mid-year. This year it will bring approximately $97 million into the coffers of the treasury. If the bill is passed and imposed on the people, it is estimated that it will collect an estimated $166 million annually. That's a lot of money to take from the people of British Columbia at this time when our economy is in such recession. If health care and medicare were indeed in the crisis that the Minister of Health and the Minister of Finance are trying to tell the people of British Columbia, then perhaps we would have to look at this, even though most people today agree that to add taxes onto the public in a time of recession is absolutely the wrong thing to be doing if you want to come out of it. I can back up that statement by saying that if we look at the United States, whose economy is certainly much better than ours at this time.... Although I deplore many of the policies and the philosophy of their government, we have to ask why the United States is not

[ Page 4086 ]

suffering quite the same recession that Canada and particularly the province of British Columbia is suffering, which we know is one of the worst in all of Canada. If we look at Canadian political history of the last year or perhaps two years, we see that there has been a history of adding taxes onto the consumer, particularly in the province of British Columbia. Tax upon tax is being imposed: increases in sales tax, you name it. Everywhere you look there are more taxes being put on the people of British Columbia. Now we have another one.

It's an interesting thing to note that many economists have pointed out that the road to recovery does not come from imposing more taxes on the consumer. So from that point alone we can see that in the United States some economists have suggested — and I would hope that the Minister of Finance would perhaps reply to this point — that one of the reasons for the difference in the increase in their employment and general economy at this particular time is that they have not imposed the same number of taxes as both our province and Canada. I'm only posing a theory that has been stated by a number of economists. I know that other economists might repudiate that theory, but I personally feel that, at this time, putting more taxes on the consumer is simply withholding more opportunity from the consumer to spend in our province and therefore to help the whole chain of recovery.

I say to the Minister of Finance: surely he can see now that his policy of more taxes is simply not going to help this economy. When you think that these taxes are being imposed primarily, so we are told, for the sake of maintaining health care in this province, one really has to ask: "What is this government all about?" I contend that this is not needed for the health care delivery system at this time in the province of British Columbia. That is the point that we must all realize.

I think it is causing great confusion to the public of British Columbia, who at this time are receiving — and I know the Minister of Finance must be well aware of this — in the mail.... Whether this is a correct thing for a federal government to be doing to a provincial government is something that I'll leave for another discussion. But the point is, this is a message regarding the new imposition of this new tax that is going out from the federal government to all the people who receive anything from the Department of National Health and Welfare. People have written me letters, and they've included this. I want to point out that I am not yet quite in receipt of this senior citizen's....

AN HON. MEMBER: Prove it.

MRS. DAILLY: Don't ask me to prove it yet. I was kindly given it by someone else. Apparently it is going into the mail with the pension cheques.

What is it basically saying, and why has the federal Minister of Health decided that this step is necessary? In this pamphlet that's going out, they point out, step by step, that there is no need to blame the federal government for this increase in health tax in B.C. If the Social Credit government of British Columbia had not taken it upon themselves to usher in this new tax, based primarily on an attack on the federal government and their new Canada Health Act, I'm quite sure that this would not be appearing in the envelopes of people who receive pension cheques. It is because the federal government obviously doesn't feel that they should have to sit back and take the blame for the imposition of a tax on health when they do not see that they are responsible for it.

I'd like to read to you an excerpt from this note that's going out in pension cheques in British Columbia:

"Your provincial government recently proposed a new temporary tax called a health care maintenance tax that will increase your personal income tax 8 percent by January 1985. It says this tax is necessary because the federal government is cutting back on payments for medicare. If the province wants to raise your taxes, that is its privilege. But we want to make it very clear that the federal government is not cutting back on medicare. Our contributions to medicare in B.C. are determined just as they are for the other provinces, and our share has been about the same since 1975. That means $1.1 billion in total for this very fiscal year 1983-84. Next year it will be 9.3 percent more...."

I understand that relates in round figures to about $100 million extra, coming clearly above inflation.

"Don't be fooled by an attempt to blame the federal government for a provincial tax increase. How can one explain a provincial increase of $166 million" — and obviously they're referring to the annual increase which this tax will bring in — "when the maximum possible penalty to B.C. for user fees would be $35 million and when British Columbia intends to go on collecting these revenues from user fees?"

[3:15]

I am not an apologist for the federal government, but I am here to try to find some reason and rationale for the government of British Columbia imposing a new health tax on the people of British Columbia. You can imagine how the citizens of B.C. who receive this feel. Here they have a federal government telling them, "We're not to blame for this tax, " while on the other hand they have the Minister of Finance (Hon. Mr. Curtis) and the Minister of Health (Hon. Mr. Nielsen) standing up in this House and saying, "We have to bring in this tax because of that awful federal government and their new Canada Health Act." I think that the people of British Columbia deserve a straight story on the finances of British Columbia.

In closing this debate I hope the Minister of Finance will relate to the points that I've made here regarding the issuance of this letter to the pensioners in British Columbia. I hope he has some answers, because I am receiving letters from people in British Columbia who say to me: "Hey, what's going on? Who's right and who's wrong?" I have to say to those people that my only opportunity to find out is to bring up these points in the Legislature to the minister who brings in the bill. I hope that we'll be given some real facts pointing out why this tax is necessary.

May I point out some of my own reasons for this tax being brought in by the Social Credit government at this time. As I said earlier, I don't think it has anything at all to do with health. The only reasons that I can think of are either to once more sock money away for the next election so that once more there are some goodies to hand out, or the government, because of their overextension in a number of areas such as the B.C. Rail, B.C. Hydro and the ALRT, are in such a mess that they simply have to find more ways of raising money. Which is it? There has to be some reason for this increase in tax at this time. I'm pointing out to whoever's listening at this time that nothing points to the need for this, as far as health goes. It would be great, I suppose, to have unlimited sums of

[ Page 4087 ]

money for health. In the brief time that I've had this role as Health critic, with the bit of studying and reading I've done and talking to various people, including our former Minister of Health for the NDP government, I don't happen to believe that just pouring endless sums of money into any ministry is the answer for complete and better services. But I do say that this government has no right to be putting this tax on Health at a time when we're told by the federal government that they have not put this government in a position that's as desperate as they claim to be in.

I'm concerned that the Minister of Health, in supporting this increase, says nothing. Even if, let us say, they were in a crisis situation, as they're trying to assure us — and which I don't happen to endorse — why doesn't the Minister of Health do everything within his means to find and approve of alternative ways of health delivery, which could perhaps ease some of the cost burdens we're facing today? That is an area that we could go on at great length about, and I intend to do so in much greater detail during the Health estimates.

On to the actual business of this tax we're dealing with at this moment. I would like to quote from Dr. Robert Evans, a well-known and very respected economist from UBC, who I believe is quite conservative on many things. I think he is a conservative economist. Do you know what he said, Mr. Speaker, when he appeared before the Standing Committee on Health, Welfare and Social Affairs, which was studying the Canada Health Act? May I quote some of the statements Dr. Evans made before the committee? On being asked about the fact that B.C. was raising taxes, ostensibly to cover impending deficits in Health and to cover the withdrawal, perhaps, of the user fee moneys, he said that to the extent that there is a deficit in B.C., perhaps it's a result of world economic conditions. He asked us to also remember that

"...B.C. Railway and B.C. Hydro are building well ahead of demand. Everybody said it was doing so at the time, and they did it anyway. B.C. Transit commission, the northeast coal problem.... The Japanese have decided that since they're not building cars, maybe they don't need so much coal. We have a whole series of projects which are imposing serious costs on the British Columbia government. They are looking around for a way to justify the increased taxes to support earlier mistakes...." This really is an important statement Dr. Evans has made. After he states that they are looking around for a way to justify the increased taxes, he concludes: "Medicare, being the most popular program in British Columbia, as in the rest of the country, makes a natural stalking-horse for those taxes." That is from someone who is not sitting here in the Legislature, not a member of this caucus, known to be a fairly conservative economist. He is stating what we state, that this tax is not needed as a health tax. As far as the opposition is concerned, to even stand up here and suggest that it's needed for health is almost an insult, not just to the opposition members sitting here, but to the people of British Columbia, who are being told that that nasty federal government, with their Canada Health Act, is causing this increased health tax. That's pretty disgraceful.

It's a pretty disgraceful move on the part of any government, and a pretty cynical move, to bring in a tax purporting to deal with needs in health care, when nothing that we can see backs up those needs. As a matter of fact, even the Minister of Health, when he was questioned on the day the bill was brought in, kind of shrugged and said: "Well, maybe some of it will have to go into general revenue." Why not be straightforward, honest and upfront about it and call it what it is? It's another income tax on the people of British Columbia, for whatever purposes this Social Credit government wishes to use it. This is the point that really concerns me and many other people in the province at this time. It's a pretty callous move.

We look at the second tax, which is primarily going to be placed in case of the holdback in penalty for user fees. There again we have said over and over that this whole matter of user fees should never be here. It's strange. At times the ministry will say: "We don't raise that much money from user fees, but it is a great deterrent to stop people from abusing our hospitals." Mr. Speaker, almost everyone will say, in answer to that: "Give us examples of where user fees are a deterrent, and give us facts and figures to show that they stop people actually abusing medicare and the privileges of a hospital." There isn't anyone on that side who can back that up with facts, but it's a very convenient way to try to get more money from the people of British Columbia.

I read very carefully again today the remarks of the Minister of Health when he spoke in the debate. He said, re this tax bill, and re the Canada Health Act, which is now going through the House of Commons, I believe, backed up by the federal Conservative Party, as well as the other two parties, of course: "Not only" — and he's referring to the federal government — "do they wish to be involved financially, they want to run the whole program. They've introduced an act which in effect tells the provinces how the program is to be run, and if it's not run their way, they're going to withdraw their share of the funding, or a portion of it." That is sheer nonsense, Mr. Speaker. The Canada Health Act, which is being used as a guise to get tax money for the provincial revenues. Is not telling the provinces how to run the whole show. What it's doing is trying to uphold the basic principles of medicate. It is simply saying that medicare is based on five basic principles. If any province does not live up to those principles in any form whatever, then they have to take action, because they are saying we cannot allow medicare and its principles to be eroded by policies of provincial governments.

We in the NDP have pointed out to the B.C. Social Credit government for a number of months now, and years, that their constant increases — for instance, from the dollar-a-day acute care costs to $8.50 a day, which is a 300 percent increase — are a complete abridgement and cause an erosion of the medicare principle. That's all the Canada Health Act is saying. They're saying that "if we're going to have an erosion of the principles of medicare, then we are forced to take action to ensure that those principles are not eroded." That's what they're doing with their penalty. Their penalty is given three years, and it gives an opportunity for the government, if they wish, to come out of the usage of these fees. The B.C. government should never have found itself in that position. And I say, Mr. Chairman, that the constant use of these premiums and user fees is definitely an abridgement and an erosion of medicare. I'm quite aware that the NDP, when they came into office, inherited this. And in our three years, along with many other things, we certainly didn't increase them to the extent of the Social Credit, which is now $8.50 a day. Our future policy was completely committed to the elimination of these user fees and premiums so that nobody in this province

[ Page 4088 ]

would feel that they were second-class citizens anymore, so that there was open accessibility for all.

Mr. Chairman, the whole matter of user fees is something which we say is a complete erosion of medicare, and we say. "Hear! hear!" to the federal government for finally stepping in and saying: "Hey, unless you, as the province of British of Columbia, abide by our regulations as to the use of user fees, we will have to impose penalties, because you are eroding the principles of medicare." I say "Hear, hear! " on that one thing alone. To have this government come into this House with a bill which they say is there primarily because of the dreadful things that the federal government is going to do to them by this act is sheer nonsense. It is a fallacious argument. I can't blame the federal government for realizing that the time has come to take some action in this area.

[3:30]

May I remind you that the federal Conservatives also support this. I find it very interesting that the Minister of Health (Hon. Mr. Nielsen) keeps saying: "Well, maybe everything will change after the next election." Is he implying that the federal Conservatives, if they become government, will go back on their commitment to medicare? Their leader has already announced that he is committed to it? I think the Minister of Health certainly should explain that statement. The whole area of this bill, not only the 8 percent surtax but the inclusion of another one which will be negotiated with the federal government if they're able to eliminate user fees.... Apparently the Social Credit government also wants to bring in a new tax. Any unneeded tax on health is bad enough, but when you look at this new tax that is going to be based on the whole matter of families, it becomes even more burdensome and unbelievable. That this government would bring in another tax, one that they apparently can make their own decisions on in cabinet....

We don't need to get into that too much, because our main contention in this bill is that it is not needed for health at this time in British Columbia. We are saying to the Social Credit government that we think you owe it to the people of British Columbia to give a straight answer on this bill. You have the numbers. You will probably drive this bill through, but at least drive it through with honesty.

MR. COCKE: Mr. Speaker, if the bill before us weren't such a serious matter it would be one of the biggest jokes played on the people in the province of British Columbia in a long, long time. The government puts forward a bill and names it the Income Tax (Health Care Maintenance) Amendment Act, 1984. What a crock! This is an 8 percent increase in our taxes in this province, to be put in the general revenue fund to support anything that the Minister of Finance (Hon. Mr. Curtis) and his colleagues on the Treasury Board feel is the way to go.

Interjection.

MR. COCKE: "Not so," the minister says. That incompetent group over there couldn't handle a peanut stand. And it is so, Mr. Minister. This is the most ridiculous caption I've ever seen on a bill, and I've seen some pretty stupid ones in the last eight years.

HON. MR. CURTIS: Control yourself, Dennis.

MR. COCKE: I will control myself at my leisure. In the meantime, I will tell you how I feet about this bill, this piece of hypocrisy. Mr. Speaker, not only do they provide for an 8 percent increase in the tax, but they are going on to provide themselves with an ongoing behind-the-closed-doors-of-cabinet method of gouging us some more — all in the name of health care! I sat here very quietly, patiently listening to the Minister of Health talk about fifty-fifty sharing and how the feds have backed out of it. Oh, let me read you some of his comments. "At one time it was generally assumed or believed, perhaps improperly, that it was to be done on approximately a fifty-fifty basis." He went on to say that across Canada the old concept of 50 cent dollars is still discussed. The federal government has attempted to impose their will upon the provinces, etc. I would just like to take that little piece and shove it down the minister's throat. Unfortunately he wasn't the minister when the negotiations were going on. The Minister of Labour now (Hon. Mr. McClelland) was then Minister of Health.

Let me tell you a little bit of the history of this thing, because I started in those negotiations in 1972. The federal government came along and said: "What we would like to do, dear sirs — Health ministers and Ministers of Finance of the various provinces — is tie our contribution to the percentage increase in the gross national product." We just said to poor old Marc Lalonde.... And at that time I think it was the guy who is now running for the Liberal leadership — Turner or something like that.

MRS. DAILLY: No, Turner was Finance.

MR. COCKE: Well, it was the Minister of Finance and the Minister of Health. I'm not sure if it was Turner then, because there were so many of them.

But anyway, Marc Lalonde was then Minister of Health. Oh, what arguments we had. We said, "Look, what you're doing here is stating that you're going to back out of the fifty-fifty concept," and we in British Columbia hung right in there. We said: 'Absolutely not." As a matter of fact, I remember one time when my colleague who is now Leader of the Opposition — he was then Minister of Finance and I was Minister of Health — and I were down there, and he gave a phenomenally good speech about the injustices of that sort of thing.

But something else occurred. There were two beautiful little stars in our crown in Canada: Ontario and Alberta. They wanted to go down there and wheel and deal. Do you know what they were prepared to do? They were prepared to give away the keys to the kingdom by going down there and saying: "Give us some tax points and a couple of little grants, and we'll buy your deal," The feds jumped right in there, but we hung in and said: "Absolutely not." Because the rich provinces with the good, solid tax bases such as Ontario, British Columbia and Alberta would be just fine on that new suggestion; Saskatchewan was coming along, but the Maritimes and Manitoba would have been absolutely tubed. So again we argued and said: "Don't give up the fifty-fifty relationship" — that the present Minister of Health extols.

[Mr. Speaker in the chair.]

But guess what? When the NDP lost the government, there was a new Minister of Health and Minister of Finance, and they went down there and gave away the keys to the

[ Page 4089 ]

kingdom, because they agreed with the Alberta and Ontario concept and said sure. Because you know what, my dear colleague? We then had a beautiful tax base, and it looked like that would be the road to greater riches. The problem with that road to greater riches is that the Socreds ran us into the ground, and now our tax base isn't worth near what it was then. Now they're howling their heads off and saying they would like to go back to fifty-fifty. I bet you'd like to go back to a lot of things. Why did you agree with it in the first place? The fact is that they did, and then they have the audacity to come in to this House with a bill like this, which calls itself the Income Tax (Health Care Maintenance).... At least they had the good sense to put it in brackets. It's there nonetheless, and it is just a travesty.

The two aspects of this bill that I cannot buy are calling it a bill to support the health care system — other than that awful little piece in there that for every dollar they have to cut down their user fees, there will be a dollar on the backs of our taxpayers. That is one thing, and the other is what they're trying to tell the public — and successfully, I would think. These guys are probably the greatest propagandists since Goebbels, but in any event....

HON. MR. CURTIS: Order, order!

MR. COCKE: What's wrong with that, Mr. Speaker? I can't name anybody else, but if you can think of better ones, well, then tell me. Doug Heal and his little band of lost Socreds....

Anyway, that was the whole question, as far as I was concerned. I just don't agree with calling something what it is not. The minister wants a tax increase. Why does he want a tax increase? He wants a tax increase so that they can look good and keep out of the red as much as possible, but what they don't realize is that every move they make is one that further reduces our economic standard in this province. They fire a whole bunch of people, so there's a bunch more people on welfare, whom the rest of us have to support through one means or another; there's a reduction in the economy. They drain funds from the taxpayers' pockets by this piece of legislation; again, there's a reduction in the economy. They talk about doing things for the private sector that will make the private sector start to be the engine of our economy. What do they do every time? They hit the private sector right on the nose. I'll bet you that a lot of them in the private sector will keep voting Socred. For the life of me, I can't understand why they would vote for those odometer experts. As far as I'm concerned, they should be thinking about what this economy needs. It needs an injection; it needs some help; it needs somebody with leadership. Instead of leadership, we've got a government that's dragging us down deeper and deeper into the mire. Can you imagine the minister having the heart to bring this in, when 15.5 percent of our people in this province are unemployed. It's worse than any other place in Canada, except Newfoundland. Imagine that — Newfoundland, which was always felt to be the have-not province in Canada. It was always hoped that Newfoundland would come up and join the rest. They're coming up at a better rate than we are; in fact, we're going down while they're going up. It's time they gave some leadership, not this kind of foolishness.

In their naming of this bill, the Goldfarb experts decided in consultation that that would be a good name because they could get away with a tax increase by calling it just that. I hope every person in this province gets a chance to really analyze this piece of legislation. The first section is an increase in tax. The second section is a health care maintenance levy. This is the part that is so offensive: it gives the cabinet the right to impose further taxation without even coming back into this House to debate it. They won't even debate it with their back-benchers. They can do it by going to a cabinet meeting. Do you know what the quorum is for a cabinet meeting? Do you remember? It's two. The Premier and his Minister of Finance could go in there, sign an order, and that order would say that the people of British Columbia are going to pay more taxes — without debate, without a word to the folks out there.

Interjection.

MR. COCKE: I'm not going to comment on that too much. That member raised a very interesting question. One time, when he was the Attorney-General and in charge of the liquor board, and he was away, my colleague the member for Nanaimo (Mr. Stupich), who was then the Minister of Agriculture but also acting Minister of Finance — and I was acting Attorney-General.... We two got together and raised the price of beer. When my colleague got back, there was heck to pay.

Getting back to this bill, we have a piece of legislation here that should never pass this House. When this kind of legislation goes through, the assembly drops just a little bit in terms of how thoughtful people feel about us collectively. We shouldn't be doing things like this. We should call a spade a shovel, or at least a spade. We should call it an increase in tax, period. We should not be calling it something that it is not at all. It's just deceitful. It's the kind of thing that, I think, tends to make politicians suspect. We shouldn't be doing that to ourselves. The protection of democracy is the most precious thing, as far as I'm concerned. Every time politics or politicians go down a bit in anybody's estimation, that's a step in the wrong direction. This is one of them, because that's not what it's talking about at all. What it's talking about is getting the minister that increased amount of money. If only they had stuck together when they were doing their negotiating in Ottawa some six or seven years ago, we probably wouldn't have this problem now, in terms of user fees versus no user fees and so on.

[3:45]

I want to bring something to the attention of the House for a moment. My colleague was saying that when we were government we didn't raise user fees. That's quite right. At the outset of hospital insurance there was an imposition of $1 per day, and the former Premier Bennett, one of the architects of that plan, felt that it would be something so that people made their little contribution and recognized the importance of the service they were getting. It was never intended to go beyond that. We maintained that all the time we were government. However, we've seen it increase and increase to the extent that it has become a real factor. Since we're not the only province, the feds decided to go the route of locking the provinces in. I agree with my colleague, the member for Burnaby North (Mrs. Dailly), that from the standpoint of the Department of National Health and Welfare in Ottawa, they're not trying to run the show. They're saying they make a major contribution, so they should have something to say about the financing of the program and, naturally, the principles in terms of the basis for the whole program.

[ Page 4090 ]

We oppose it; we will continue to oppose it; it has no pluses that I can see. But it is playing on human emotions when we have articles like this in our paper: "Only the fittest will survive in the future, says the chairman of the ethics committee of the Canadian Medical Association. It's quite simple: sooner or later we're going to run out of money." If we run out of money for health care, it's because we are not sharing the responsibility for it; we are not looking for the alternatives that are necessary in order to keep it in line with our ability to pay; we are caving in to the doctors; we are caving in to a system that has become expensive, I admit, but a system that could be streamlined to the extent that it would be comfortable for us. I've yet to hear anybody — either here in our own socialized kind of system or in the United States — say that they're not prepared to pay their share of the costs of this priority area.

We oppose it. It's improperly named, and it is an improper piece of proposed legislation that is put before us today. I can say no more.

MR. BLENCOE: I don't have much to say or see much to commend this piece of legislation. I would basically reiterate much of what the member for New Westminster (Mr. Cocke) has said. Suffice to say that this bill really does play on the emotions of British Columbians, trying to intimidate them by saying that it's got something to do with health care in the province.

British Columbians today are very concerned about their health care system. They have continued to see the system erode over the past few years; they continue to see many of their hospitals not supply the services they had expected. Many elderly people in their last few years, hoping and wishing that they would be entitled to full and proper health care after giving many dollars to taxes over the years, find that many hospitals are not equipped to take care of their problems immediately. We all know of the horrendous stories that come, and that I continue to hear at least twice a week in my riding, of various hospitals here that don't have enough beds or incredible waiting-lists for all sorts of surgery. Calling it a health tax bill really is a gross misuse of the term "health." It has nothing to do with health at all. A better term for this bill would be the Northeast Coal Subsidy Act.

We know exactly why this bill has been introduced. We've seen the government continue to squander money on projects such as the northeast coal deal and the BCR, and that's why we've seen nearly half a billion dollars in one year go off to take care of part of the incredible debt that has been built up in the north over the coal deal. The government thought they could put this one over on the people of British Columbia and squeeze it through this Legislature by tacking on the word "health." It is basically another huge increase in income tax for British Columbians, to bolster up the fiscal irresponsibility of this government over the last few years, and I think British Columbians are beginning to recognize that. It's unfortunate that the government, in trying to foot the people of British Columbia, had to use the word "health" and play on the emotions of British Columbians, who are indeed concerned about their health care system and would say: "Well, if this money's going towards health, it must be all right."

We've heard minister after minister say that it's got nothing to do with health. The Finance minister and various other people can't get their stories straight. It's an income tax bill, an 8 percent surcharge on all British Columbia income taxes, to be paid by all taxpayers. At a time when we are trying to see a consumer recovery in this province, to once again hit the hard-earning British Columbian with increased taxes under the guise of trying to help health is really totally unacceptable. It should be called what it is. It's an insidious piece of legislation. It's a northeast coal subsidy act; that's what it's all about. The government should have the honesty and forthrightness to tell the people of British Columbia why they introduced this bill. It's got nothing at all to do with health.

As a matter of fact, what we're seeing is this government get into a wrangle, for political reasons, with Ottawa over the very issue of health. This is a way of trying to blame the federal government, through the back door, as being responsible for this 8 percent surcharge, and not the Social Credit government. That's what they're trying to tell the people of British Columbia. But it won't wash. This is a British Columbia income tax bill. It's to pay off those huge debts that they've mounted up north over coal. Every economist, of any political persuasion or economic theory, is saying it's a bad deal for the people of British Columbia. I really wish the government had the honesty to tell British Columbia what it's all about. It's an income tax bill. They can't afford it, and it's just to bail out other problems they've created for this province on the financial side.

The other thing which is really quite incredible — and I suspect they thought it would slip through — is that section 2 allows the Lieutenant-Governor-in-Council to increase the health care maintenance levy at will, without reference to the Legislature. It is the Legislature that has always had the authority to increase taxes, but section 2 of this particular bill flies in the face of that tradition. It's the Lieutenant-Governor-in-Council that will have the power to increase this levy if it so desires. That, of course, is totally unacceptable. It violates all the principles of bringing tax bills before this House. But I suppose it's in keeping with the current direction of this government.

We adamantly oppose this bill. It uses health to force further income tax on the province of British Columbia, and it really is a rather insidious piece of legislation. To use people's emotions and how they feel about health to try to rationalize increasing income tax by 8 percent in the province of British Columbia is totally unacceptable, and I as one member am totally opposed to this piece of legislation.

MR. LOCKSTEAD: I won't be long.

AN HON. MEMBER: Good.

MR. LOCKSTEAD: We'll see you later — bye. Where's my grant, Provincial Secretary? I want a big one.

HON. MR. CHABOT: For what?

MR. LOCKSTEAD: For my constituency, for Powell River, for health care....

HON. MR. CHABOT: For your constituency office?

MR. LOCKSTEAD: Oh, yes, you can double that one — travel expenses. Sorry, Mr. Speaker, back to the bill here. But I just can't help answering the interjections across the floor from the Provincial Secretary. I often enjoy them, and I'll bet you any money that I will get that lottery grant for my riding.

[ Page 4091 ]

HON. MR. CHABOT: What for?

MR. LOCKSTEAD: I've written you a letter.

HON. MR. CHABOT: Mariculture?

MR. LOCKSTEAD: That's a good idea.

This bill deals basically — and it's serious business with an 8 percent increase in our income tax charged at the provincial level, under the guise, as the previous speaker mentioned, of maintaining our health system in British Columbia. That's a misnomer in this case. The fact is, and the minister himself has stated, that the revenues collected under the.... Is it $169 million a year?

HON. MR. CURTIS: No.

MR. LOCKSTEAD: How much is it? It's $96 million the first year, but on a year-round basis it's almost $166 million. Over a five-year period a total of some $830 million will be collected. No way will the health care system require that funding. Even if the federal government imposes the penalties that the Minister of Health says may be imposed — and they may not ever be imposed on this province — it would only amount to about $36 million a year.

The reason I got to my feet at this particular time is just to have it on record that we know very well where the overrun, the extra taxation, the moneys that will be going into general revenue will be expanded. The government has put in some $470 million this year to pay off B.C. Rail's debt, which they didn't have to do, at the expense of health care, education, social services, legal aid and what have you, here in British Columbia. We know very well that the government is going to use this money raised through this 8 percent increase in the provincial portion of the income tax to subsidize northeast coal and other government projects, which we were told were going to pay for themselves. The taxpayers of this province haven't got a hope of ever getting any of those revenues back, particularly on the northeast coal transaction.

The Minister of Industry and Small Business Development (Hon. Mr. Phillips) admitted in this House last year, after months and months of questioning — I think it was a year and a half — that we would have to sell at the current price 15 million tonnes a year out of northeast coal in order to break even. The point I'm making is that....

[4:00]

HON. MR. CURTIS: On a point of order, Mr. Speaker, while it may not serve the purposes of the members opposite, this bill has nothing whatsoever to do with northeast coal or southeast coal or with highways or bridges. It has a lot to do with the cost of health care.

MR. SPEAKER: Hon. member, the Chair has allowed some latitude. I'm sure the member appreciates the restrictions on second reading. I ask the member to address those concerns.

MR. LOCKSTEAD: I understand very well. My purpose in getting to my feet here was not to discuss the northeast coal situation, which we will have an opportunity to do shortly. I am trying to put on record where I think a large proportion of the funds received from this overtaxation will be going. I would ask the minister, when he closes debate, where this extra funding is going to go if not into subsidy of northeast coal. Is it going to go to ministerial travel around the world? Is that where the extra money raised under this tax is going to be going? I don't know; I'm speculating. Perhaps in closing debate the minister will tell us. I don't have much more to say on this. Obviously I'm going to vote against this horrendous tax increase. It's unjustified. It will hurt the economy of British Columbia. It will reduce consumer spending in the province, not only hurting the people themselves — the worker, the wage-earner and anyone with a taxable income — but also the small businesses in every community in British Columbia. This is gross taxation. It is totally uncalled for. I hope that some of the back-benchers on the government side will see the light and vote against this bill, which is totally unrequired at this time,

One last item: had the government done its job properly in terms of collecting revenues from the sale of our logs and trees in this province, they wouldn't have had to bring in this bill.

MS. BROWN: I would like to add my support to the comments just made by my colleague from Mackenzie, who has sat down, and say that even though the title of the bill says it's an income tax amendment to deal with health care maintenance.... In fact, the Minister of Health (Hon. Mr. Nielsen), when asked about this on February 21, said that there is no guarantee at all that this tax would be spent on health. He went on to say that it would be poured into general revenue, which means that it can go to any area of government.

I am pleased to hear the Minister of Finance say that that's not so. I hope he was saying that the entire $97 million which he says he hopes to raise by this tax in the first year and the $166 million annually will in fact go to pay for health care maintenance. If that's the case, there will be no need to have a user fee. In fact, people will not be deterred from having access to our hospitals and other health institutions based on their inability to meet that user fee. I disapprove of this tax, because I think that during a time of high employment when the economy is in as bad shape as it presently is, for the government to add another tax onto the already overburdened taxpayers of the province certainly goes counter to everything that members on that side of the House have ever said. Very simply, it's an increase in the provincial income tax. Changing the name or putting in brackets that it's for health maintenance doesn't alter that fact. A rose by any other name smells precisely the same.

We know it's an increase in provincial income tax. It couldn't come at a worse time. It's coming at a time when we are told that recovery is going to be led by consumers, but consumers in British Columbia are not consuming; they're not spending any money at all. Surely one of the reasons has to be that they're concerned about the increase in taxation which is spelled out in this bill. In one section of the bill the government gives itself the right to increase the tax even further without bringing it to the floor of this Legislature, without making it open to public scrutiny or to public debate. For those two reasons, Mr. Speaker, I would certainly like to add my voice in opposition to this income tax increase legislation.

The minister stated that some of the money from this tax would go to help pay off any penalty based on their refusal to obey the Canada Health Act and not permit extra billing in this province. That's penalizing the public twice. What that says to the patient is, first you are extra-billed and then you're

[ Page 4092 ]

extra-taxed to pay the penalty for the fact that we as government permit extra-billing. There are two penalties; the patient is taxed twice when the patient should not be taxed at all. The Canada Health Act outlaws extra billing. If the government were obeying the law they would not permit extra billing and patients would not have to pay that extra money, but because the government may choose to break the law, the patient will have to pay the extra on top of whatever is covered by the medical plan, and in addition they are burdened with this 8 percent increase in their provincial income tax to help the government pay the penalty which would be levied on it by the federal government by virtue of their breaking the law.

There are all kinds of issues and all kinds of ways in which the Minister of Health could find it within his power to deal with the health needs of the province, without using the power of the Minister of Finance to add an additional tax burden on the people of British Columbia. Clearly that has not been explored, for the reasons outlined by the Minister of Health himself when he said that this tax would be going into general revenue. That's the real reason why the Minister of Health is permitting the Minister of Finance to get away with this. The tax is going to raise far more money than the Health ministry will need for its own use. The Minister of Health goes on to say that once it's in general revenue, the government is free to use that tax in any way they see fit.

It seems to me that the straightforward way to deal with it would have been simply to refer to it as the Income Tax Amendment Act, 1984, and not try to pretend that it has anything to do with health or health maintenance, and allow and permit us to debate it on the grounds that what we have before us is an increase in the provincial Income Tax Act. If that were allowed, Mr. Speaker, we could then talk about the unfairness of increasing taxes at a time when the rest of the country is experiencing a recovery and we here in British Columbia continue to find our unemployment and bankruptcy rates escalating, and our consumers refusing to spend any money or to contribute in any way to any kind of economic recovery in this province. But we're not permitted to debate it on that level, because of the pretence that somehow this piece of legislation has something to do with paying for health costs and dealing with health care maintenance. Of course the lie is put to that by the Minister of Health himself when he says that it will be poured into general revenue, which means that it can go to any area of government.

The Minister of Health did not disagree with the suggestion that up to half the revenue raised by this method would be directed away from health care. If the Minister of Finance is really committed to the concept and belief that this increase is necessary to meet health costs, since the Minister of Health says that half of the amount of money raised will be enough, maybe we'll be seeing a new amendment cutting that 8 percent down to 4 percent. I don't know if that's possible, and hopefully when the minister closes debate he will indicate that there has been some consideration given to reducing the percentage increase in view of the statement of the Minister of Health that an 8 percent increase is not necessary to meet the health care costs of the province.

[Mr. Pelton in the chair.]

In any event, Mr. Speaker, along with my colleagues, I would like to.... Oh, there's a new Speaker, a nice Speaker. I would like to add my words, in support of my colleagues, in speaking specifically on behalf of a constituency which is very hard-pressed and is which faced with a lot of unemployment and, as I said before, alarming increases in bankruptcies — a really tight money situation all around. Speaking on behalf of Burnaby-Edmonds and its residents, I want to say how opposed I am to any increase in the provincial income tax at all, and certainly to this one which gives the government powers to continue to increase taxes from time to time without bringing the matter before this House, so that at least we would have an opportunity to scrutinize and debate it on the floor of the House.

MR. MITCHELL: Mr. Speaker, I know I am going to tread a very fine line of being out of order, so I'm going to warn you now, but I would like to zero in on one issue. But before I do that and you start to challenge what I'm saying, I have to go on record as saying that I'm opposed to this bill for a number of reasons that have already been stated by my colleagues. To save you who have been sitting in this chamber all this time and hearing all the arguments, I won't repeat them.

[4:15]

I would like the minister in closing the debate to give some explanation of the terminology in a section in the bill which refers to a taxpayer and the number of dependants he has. What I really think he is attempting to do — and I know we'll get into this in committee stage — is to get around a premium based on the family. If we're going to work on an income tax basis, and the bill states that it is an income tax bill, we must keep an income tax bill based on income. When you refer to the number of dependants in a piece of legislation, all of that is taken into consideration when a person's income is established. If you are going to establish the taxable income of a person, based on his dependants, family, tax deductions or anything else, you can't sneak in.... I think this is the deceptive part of this piece of legislation. Under an income tax bill, you are trying to sneak in a section that establishes something that is maybe properly allowable under a premium-based bill, which is provincial legislation. Somehow, when I read that section.... I won't refer to the section because I know you will rule me out of order, but I know the minister is aware of it. How can he justify that particular section which is going to take into consideration not only a person's income, but the number of dependants? I think that is out of order in an income tax bill. I think it's out of place. I hope that the minister, in closing debate, will cover that particular section before we get to committee stage.

HON. MR. CURTIS: It is with interest that I have listened to remarks from members opposite on the day the bill was first called for second reading, and again this afternoon.

I wonder if I might have leave to make an introduction, Mr. Speaker.

Leave granted.

HON. MR. CURTIS: I recognize that the member for Okanagan North (Mr. Campbell) would perhaps prefer to do this, but I note in the gallery this afternoon — for the last few minutes at any rate — a friend of many on both sides of the House, Mayor Pat Duke of Lumby.

Mr. Speaker, Bill 2 contains important amendments to the Income Tax Act that have one purpose, and one purpose only: that is, to enable the province both to cope with a declining

[ Page 4093 ]

federal share of provincial health costs and to respond constructively and firmly to the challenge of the Canada Health Act. Reference has been made today to the remarks which I offered on February 20, budget day. May I restate, in closing debate for second reading — and let there be no doubt — that the federal share of the cost of providing health care services in B.C. was 44 percent in 1977-78. I think we agree on one other aspect: that that was the first year of the Established Programs Financing arrangements.

Then came years of relative noticeable documented decline. The federal share sank to a low of 37 percent in 1982, and currently stands at 39 percent. These continuous federal shortfalls have put the province — and other provinces, as my colleague the Minister of Health (Hon. Mr. Nielsen) observed last Friday — in the difficult position of having to devote more and more of its own financial resources in order to maintain a high quality of health care and a high-quality health care system — about which none of us in this chamber, I would think, in spite of other differences, would disagree — but having to maintain that in the face of rapidly rising health costs. Health care expenditure made up 29 percent of provincial spending in the 1977-78 fiscal year. Large increases in health spending over the past several years have led to a 1984-85 fiscal projection where 37 percent of provincial spending is allocated to health care — from 29 percent to 37 percent in the space of a relatively few years. Clearly a situation such as this cannot be allowed to continue untouched and indefinitely.

Faced with the relatively declining contribution to provincial health care costs, the government has introduced the health care maintenance surtax in Bill 2 as a necessary and constructive initiative to help satisfy the need for increased provincial funding of health care programs. Some concerns have been expressed about the surtax. Again, I think it is vital that all observers and participants understand that there are two completely separate issues in this bill. But with regard to the surtax, there have been suggestions made by members opposite — and by some of our citizens — that the tax will add to the increasing burden being placed on individuals by all levels of government. In the budget and in the debate, this side of the House — government members — indicated clearly that we are vitally concerned about the total tax burden being placed on individuals in B.C. So when we were developing this particular and essential measure we took steps to ensure that the personal income tax rate in British Columbia, even after this proposed change, will remain the second-lowest among all provinces in the nation.

Again this afternoon we've heard the charge that the bill has nothing to do with health care insofar as revenues raised from the surtax go to consolidated revenue — the CRF. Let there be no doubt: all moneys collected by whatever tax measure is introduced or carried on by this or any government go to consolidated revenue fund and are then disbursed. This money will flow to consolidated revenue and will then be spent solely for the purpose of maintaining the high quality of health care that we enjoy and consider to be our right in the province of British Columbia. But in order to get to the health expenditure area, the money must pass through consolidated revenue.

We've also heard that the bill is, according to some interpretation, not necessary, in that the increase in the federal contribution to health care in 1984-85 exceeds the increase for provincial health expenditures in the same year. I don't think it is correct. I don't think it is useful or helpful, if one is objective about this area of expenditure — these program expenditures — to look at just one year, because that can give an erroneous impression. Such a comparison fails to note the long-run trend, Madam Member for Comox, of federal health funding...

MS. SANFORD: What did I do?

HON. MR. CURTIS: ...and its relation. The member interjected the other day that that wasn't correct, and so I remembered that and wanted to draw her attention to it, Mr. Speaker, through you. No offence.

AN HON MEMBER: Just letting her know you were listening.

HON. MR. CURTIS: I was listening, indeed.

The comparison fails to note, if it's taken in the short term of snapshot, that we have a steady decrease in federal funding toward health care. There is clearly a demonstrable evidence of federal underfunding, and on that we rest the case of the province of British Columbia.

Somewhat repetitious now, Mr. Speaker, but between 1977-78 and 1984-85 provincial health care expenditures have increased at an average annual rate of 15.2 percent. By comparison, the allocation under EPF to B.C. by the federal government for health care increased by an average of only 12.9 percent per year. If that isn't a decline, then I don't know what is.

The second measure contained in this bill — separate and distinct from the first — is the direct response to initiatives contained in the Canada Health Act. The health care maintenance levy was imposed to deal not with the issue of federal underfunding of health care, but rather with the threatened — indeed one must say now the apparently imminent — imposition of a reduction of EPF transfer moneys in respect of hospital user fees in several provinces where they are used.

British Columbia would have preferred, and still prefers this afternoon, to retain what we believe to be modest hospital user charges, because these have played a valuable role in our health-care system for over 30 years. They have been designed so as not to hinder the access of those British Columbians who have low or lowest income, not to impede or interfere with their access to our hospitals and to our health service. That is a fundamental premise upon which we have operated since we formed government in 1975-76. But the levy has been introduced as a positive alternative to these charges. The government remains convinced that the overriding federal-provincial health issue is federal underfunding. It also acknowledges that the solution to this problem will only come about as a result of the constructive dialogue between the federal government and the provinces on this very important topic, combined then with a joint commitment by both levels of government to resolve the funding share issues. So I restate what was said earlier, without reflecting on a vote: that the province of British Columbia, my colleague the Minister of Health and I, along with other ministers of health and finance and provincial treasurers across the country, seek that kind of a meeting about which the Minister of Health spoke just a few days ago — a meeting of federal and provincial ministers of health and ministers of finance — in order that we can lay out on the table all of the

[ Page 4094 ]

problems and determine precisely where and how the funding of health care in Canada and in British Columbia should be going.

I restate this afternoon that very sincere and straightforward proposal, that when the two federal ministers concerned are ready to meet — whether all other provincial ministers can attend or not is beside the point — my colleague and I will be on an airplane within a matter of hours.

We've also had the major concern expressed with respect to the fact that the bill gives wide-open authority for the government to do whatever it wishes with the income tax system, including the rate of tax. The rate of provincial income tax is legislated in the act under section 3(5), and a change in that rate would require the approval of this assembly. The health care maintenance levy is and should be, viewed strictly and narrowly, as the replacement of one set of fees with a levy administered through the income tax system. I stress that as a result of this initiative either the current health care user charges would be retained or a health care maintenance levy would be imposed. The user charges and the levy will not be in effect simultaneously. That is not the purpose. If we are permitted to continue with the modest user fees we have had in this province for three decades or more, then the question of a user levy as contained in this bill will simply not be proceeded with. It's that simple, and I state that again in this chamber.

The absence of specific details in the section dealing with the levy is something we cannot help, because it is a direct result of a lack of precise figures on which provincial user fees will be subject to a federal penalty. So we cannot spell them out in this legislation unless and until they are spelled out by the government in Ottawa.

Reference was made to Monique's missive, the little slip of paper which is appearing — the member for Burnaby North (Mrs. Dailly) spoke of that today — in old age security cheques and, I am informed — although our family has grown — in family allowance cheques. I have seen a copy, Madam Member, and I am distressed.

[4:30]

Interjection.

HON. MR. CURTIS: Well, yours is in the mail. That's the family allowance cheque, Mr. Member, rather than the other one.

I am distressed that we have a federal Minister of Health who does not understand the problem. That's worrisome; it really troubles me, as a Canadian. If she wants to put little slips of paper in the cheques dispatched from Ottawa to recipients of old age security and family allowance, it is not for me to say that that's wrong or right. But we have a federal Minister of Health who doesn't understand her portfolio. As my colleague the Minister of Health (Hon. Mr. Nielsen) indicated very clearly the other day, when one wants to talk about the cost of health in Canada, she says: "That's Lalonde's problem." Some responsibility on the part of Madam Begin, in something as critical and as costly as health care in British Columbia! Let her continue to send her slips of paper to Canadians and to British Columbians, most particularly, but let her first start to understand the root cause of health care costs in this country before she starts playing cheap politics with the people of British Columbia.

I have a correction to make, and I'm sure the member for New Westminster (Mr. Cocke) was mistaken. As I understand the fifty-fifty cost sharing with the federal government, Ottawa did, as a matter of fact, back out of the fifty-fifty agreement. The 1977 formula, amended in 1982, provided for growth in the federal contribution at the rate of increase in the gross national product. The province of British Columbia did not agree to the 1982 amendments, which sharply reduced federal contributions. It is a matter of record that these were unilateral federal actions which cut future growth in federal transfers. Therefore I simply correct the member, and he and I can discuss that some other time. He has his view of it, but it is not correct to say that British Columbia permitted that to happen or bargained it away in 1982. I simply wanted to make that observation.

There are two separate and distinct initiatives contained in Bill 2, the health care maintenance surtax and the health care maintenance levy, to deal with two distinct aspects of federal underfunding, as well as the Canada Health Act's proposed penalties against those provinces which have user charges. I think the people of British Columbia, and ultimately the government of Canada, will appreciate the wisdom behind this action and, indeed, the necessity for this dual approach. At stake is nothing less than the continued vitality of a health care system in this province and in this country in which all of us take a great deal of pride.

Mr. Speaker, I move second reading of Bill 2.

[Mr. Speaker in the chair.]

Motion approved on the following division:

YEAS — 25

NAYS — 15

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

Bill 2, Income Tax (Health Care Maintenance) Amendment Act, 1984, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Second reading of Bill 3, Mr. Speaker.

HOTEL ROOM TAX AMENDMENT ACT, 1984

HON. MR. CURTIS: As was announced on budget day, Bill 3 provides a new tax rate of 7 percent on sales of

[ Page 4095 ]

accommodation in hotels and motels in the province of British Columbia. Recently the rates of tax under the Hotel Room Tax Act were 6 percent on accommodation selling for less than $50 a day, and 8 percent on accommodation which charged $50 or more per day. The new rate is expected to increase revenues by approximately $200,000. It is primarily being implemented this year to simplify the collection of the tax by the hotel and motel industry through having a single tax rate. The change in rates with this legislation takes place March 1, 1984. Implementation was delayed until March 1 from budget day to enable the industry to have a little more time to make changes to their accounting systems and cash register equipment used in collecting this tax. That was something of a departure from the usual imposition of a tax change. It was apparently quite well received by this particular industry. It may be possible to use similar delayed notice in some other tax measures in the future, but I make no commitment in that regard.

The bill also provides a transitional provision under which a refund of the tax will be made to those persons who had committed themselves to purchase accommodation prior to midnight February 20, who would therefore have paid a 6 percent tax rate but now would be paying 7 percent. Those who made such a commitment and who can provide simple documentation to the consumer taxation branch of this ministry, by way of a confirmed reservation, written contract or a receipt for a deposit made on account for a specified number of days' accommodation to be purchased on or after March 1, would be covered by this arrangement and would be refunded the I percent difference in tax. A similar arrangement is in place for those who purchase accommodation selling for $50 or more per day after February 20. Obviously they wouldn't require a refund. The hotel operator would charge these purchasers 7 percent on their purchase of accommodation after March 1, regardless of when the initial reservations or arrangements were made. It is realistic that due to the high cost of evaluating and processing refund claims, and issuing refund cheques, refund claims under this provision will be processed only when the refund of tax due to the purchaser is $10 or more.

In summary that is the purpose of Bill 3, Hotel Room Tax Amendment Act, 1984, and I move second reading.

[4:45]

MR. COCKE: This is an interesting little bill, Mr. Speaker, which raises $200,000. However, when you think in terms of those who can afford to pay the $50 plus for their hotel room having a reduction of 1 percent, and those renting hotel rooms at under $50 paying 1 percent more, the $200,000 represents an awful lot more than that on the backs of the people who are renting the less expensive rooms. I couldn't even make an estimate. It strikes me that the Minister of Tourism (Hon. Mr. Richmond) should be up arguing with respect to this bill. The industry likes it from one standpoint, and that is that it makes it simpler to keep their books. I'm speaking on behalf of the people, not the industry, in this particular situation. But I think, all in all, what we should be doing is thinking in terms of making it less expensive for people to come to British Columbia and spend their dollars in our fine province. Instead of that, we're continually taxing people to death in British Columbia.

There is no question that the bill has a bias. The original act which said that hotel rooms under $50 were 6 percent and hotel rooms over $50 were 8 percent, took into consideration the fact that the people renting the $50-or-less rooms could certainly afford to pay as little tax as possible. This bill says: "Okay, let's put them all on the same basis." Everybody pays 7 percent. And the government, of course, gleans an additional $200,000. But the people staying in those rooms which were formerly taxed at 8 percent — and there are a lot of hotel rooms that are far more than $50 a night in this province — have suddenly had a net reduction in their bill, which has to be put on top of this whole thing. We know that there has been quite an exchange of funds. We think that 1 percentage point is very little. But when you think in terms of the number of hotel rooms in our province, one percentage point is a significant sum. It is, however, one percentage point going both ways. It is the rich getting richer and the poor getting poorer in good old Socred style. It never fails, Mr. Speaker. Take the heat off the friends and put a little bit more on those who can less afford it.

I'm not sure what I would have done here. I would like to see hotel room taxes eliminated, from that standpoint. I sometimes wonder, however, if the hotels in our province don't price themselves just a little bit lavishly from time to time, judging by charts I've seen comparing our region to others with similar characteristics — I say " similar" because nobody can match B.C. The only thing we've got saving us, in terms of the whole tourist industry, is the fact that we've got the most beautiful province to sell, and even at that we're having real difficulty.

I have to vote no for this bill just on principle, because it doesn't act even-handedly in terms of the way it treats people. It is saying to those in the most fortunate class, "We're going to give you a reduction in your hotel bill," and to those in the less fortunate class: "For the most part, we're going to give you an increase." What the minister could have done is brought the whole thing down to 6 percent. Then, of course, there would have been a net loss to the Crown. But no, they didn't do that. They did it the other way, and they increased the ones at the lower level.

I haven't a great deal more to say. I don't think there is a lot you can say about a bill like this, other than to ask: who can support it? It's unfair. The Speaker is getting jittery and so, with that, I suggest that the opposition says no to Bill 3. I know that comes as a great surprise and shock to the government. But then on the other hand, it may be that the government is going to have to vote on this bill too, and they're going to have to say to some of their constituents, those who are somewhat worldly and embrace fair play as a principle: "Well. I voted for this bill. I just forgot about you for a minute or two." It’s on your conscience. We're voting against it.

HON. MR. RICHMOND: I wish to add a couple of very brief comments on this bill. I am pleased to support it, as is the entire hospitality industry, who have been asking for it for some time. Not only does it make their task a little easier in bookkeeping, as the member for New Westminster pointed out, but it takes a lot of confusion out of it as far as the visitor to this province is concerned. It was difficult for them at times to explain the two-tier system of taxing. It also added confusion when a visitor had been quoted a rate of, say, $46 or $48, and he showed up with a wife and a couple of kids, which put him over the $50 bracket. All of a sudden the tax jumped two points. I think it is good for the tourism industry. It takes all the confusion out, as I've said.

[ Page 4096 ]

I would like to point out to that member who likes to harp about taking from the poor and giving to the rich that it will make a difference of 40 cents on the average person's $40 hotel room. We're talking about a difference of 40 cents a night — and taking all the confusion out of the industry. When he says that he doesn't know what he would do, I think that is typical of most of those over there. They have all of the complaints and criticism but never any of the solutions. As for the idea of making it 6 percent, I don't think that would be proper, because everything else in the province is taxed at 7 percent.

I commend the bill, as do most of the people in the hospitality industry, Mr. Speaker, and I would like to go on record as supporting it fully.

MR. D'ARCY: Mr. Speaker, I wish to say a few words on behalf of the hospitality industry in my constituency. I would like to have the Minister of Tourism know that the hospitality industry there does not favour this bill. We have a growing destination resort industry. Also, the hospitality industry has for years catered to the travelling public and the business travelling public in British Columbia, and they are not happy about this tax increase. It's an additional 1 percent on what they're charging people who come in from outside the area — from across the line, from the Spokane area to ski — and people who come into the area on commercial and tourist visits from within the province.

I can't speak for the industry elsewhere, but I strongly suspect that, in spite of what the minister says, they're not very happy about it either. Sure, if I had a hotel where I was charging in excess of $50 a room per night, I would be happy about any tax reduction. But if I was charging less, I would not be supporting a tax increase.

Quite frankly, I think the bookkeeping change is balderdash. If we're to accept that argument, perhaps the Minister of Finance is going to come in next year and tell us: "Well, we've decided to make the sales tax 10 percent because it's easier to figure." Everybody would love that, wouldn't they? I doubt that that would be a good reason for it.

So, Mr. Speaker, I speak against this change. It is an imposition on both the commercial traffic and the tourist business in my constituency. I don't believe it's fair. There have been arguments put throughout this entire nation, not just in British Columbia, about the level of taxation on the service industry and the tourism industry. In the last few years Social Credit has increased property taxes at a faster rate than property taxes have increased on other types of property. Social Credit has increased liquor taxes, along with the federal Liberal government, at a faster rate than the rate of inflation, which has impacted once again on the hospitality industry and the tourism industry. Social Credit has added a restaurant tax on the hospitality and tourist industry, taking it from zero to 7 percent. Now they add another tax affecting hotel and motel room rentals in my constituency. I am opposed to it, and I think it is high time Social Credit stopped providing disincentives to the tourism and hospitality industry, not only in Rossland-Trail but in the entire province of British Columbia.

MR. REYNOLDS: Mr. Speaker, I have just a few words. In listening to some of the members of the New Democratic Party talk about this bill that the minister has brought in, it upsets me to hear the member for New Westminster (Mr. Cocke) say the rich get richer and the poor get poorer. Yet in his own speech he said he's not sure what he would have done in the area, and said that this government doesn't act "even-handedly." This tax does act even-handedly, because it means that every person who stays in a hotel room in this province will pay the 7 percent tax. That's an even tax for everybody.

The member for Rossland-Trail (Mr. D'Arcy) talks about the imposition on commercial traffic in his area. I travelled through his area when I first came to British Columbia, and I've stayed in many of the hotels there. As he knows — and knows full well — anybody who is a commercial traveler, their company is paying their bill; it's a write-off on their federal tax as an expense of doing business and is not going to interfere at all with whether or not they stay in a hotel in his constituency.

I would suggest to those members of the New Democratic Party that this is an even-handed bill. I don't think they've had one complaint from any hotel owner in their constituencies. In fact, I had dinner the other night with one of the hotel managers in the constituency of the member for New Westminster, and he saw nothing at all wrong with this bill. He thought it was going to save him a lot of bookkeeping and a lot of paper work and would not affect his business one little bit.

Interjections.

MR. REYNOLDS: The New Democrats seem to have some problem with people who write things off on their income tax. If you're a commercial salesman, or anybody out selling a product, you have a right to write off your expenses on your income tax. It's fortunate for the people of this country that we don't have a New Democratic government in Ottawa which would probably not allow anybody to write anything off. Everybody would work for the government and everything would grind to a halt. We'd be just like the Soviet Union tomorrow, because that's what these people would like us to be.

This is an even tax and I'll be very proud to stand up and support it.

MR. HOWARD: The only thing that seems to have ground to a halt is the reasoning, logic and rationale of the member for West Vancouver–Howe Sound.

Mr. Speaker, this is a tax-mad government. Honestly! Not ordinarily mad, just tax-mad. We must thank our lucky stars that it's not possible — not yet, in any event — to tax the air that we breathe, because if it was possible, there would be the first minister to find a way to do it. It all is as a result of the complete mismanagement of the finances of this province, the result of presenting inaccurate budgets. It misleads the people of this province as to the true state of fiscal affairs, taking every opportunity to stick their hands into the pockets of the people of British Columbia, and the people who visit British Columbia, in order to get as much money as they can. Even-handed, says my friend from West Vancouver–Howe Sound. I stand here and predict that there will be an evenhanded reduction in the 7 percent sales tax on meals just before the next election, and perhaps an even-handed reduction in this tax just before the next election — standard practice with those who desire to manipulate the tax structure.

It's not a question of whether it's even-handed or not. It's a question of a tax-grab, of a mechanism to get their hands into the pockets of the people of this province and glean as much as they can in tax income — nothing to do with writing taxes

[ Page 4097 ]

off on expenses or anything like that. Every time the member for West Vancouver–Howe Sound gets up to speak about those matters, it just indicates to me how little he has learned since he left that federal House.

In any event, there is no possibility that one can support this. It is a tax grab and just covers up fiscal mismanagement.

MR. SPEAKER: The minister concludes debate.

[5:00]

Interjections.

MR. SPEAKER: The Chair is in error, hon. members. The Chair recognizes the member for Okanagan North.

MR. CAMPBELL: Mr. Speaker, I believe this tax is fair and equitable because it treats everybody alike. I think it points out what the NDP philosophy really is: charge extra to anybody they feel can afford an extra $10 for a hotel room. But the point that really amused me, Mr. Speaker, was when the member for New Westminster (Mr. Cocke) got up and talked about these people who pay the 6 percent and are going to pay more; they'll be cut down to the 1 percent and save their 60 cents a day. When we go back to 1983, when we were talking about the meal tax, they were the same people who said: "It should be taxed across the board. My should the government pick on a certain group in society and tax them? It should be taxed across the board." That member talked about that last year, and then they get up this year.

It really doesn't matter which way the government is trying to perform a duty to the people of this province to make it easier for the business people to administer tax, they're opposed to it. In the NDP philosophy it's a sin to make it easier for the business people to administer their business. If you can make it tough on the business community, they appear to be happy about that. So I would have to say that I have talked to some of the hotel people in my area, and they feel that this is a progressive move. If the people who take the 14-day holiday are paying under $50 — say, $49.99 — it's going to cost them all of $7 a year, which is about two cents a day. I imagine some people can get upset at two cents a day, but I believe that most of the people who can afford to take a trip are really not that concerned about it.

HON. MR. CURTIS: Well, Mr. Speaker, there were some interesting comments on a very small bill.

MR. COCKE: Could you give him a lecture on mathematics while you're at it?

HON. MR. CURTIS: No, I think I understood what the member said.

I indicated at the outset that this is not a major revenue producer, but rather one of the....

Interjections.

HON. MR. CURTIS: Here comes the esteemed adviser on the banking system of the country.

Mr. Speaker, it's not a major revenue generator but rather a move to simplification. I think, among others who spoke — the member for West Vancouver–Howe Sound (Mr. Reynolds), the member for Okanagan North (Mr. Campbell), and the Minister of Tourism (Hon. Mr. Richmond) — there certainly has been confusion in that $40- $45- $50- $55-range, particularly as was observed with a reservation having been made by an individual and then a family arriving to make use of that on a holiday. Therefore, Mr. Speaker, I think it is a return to a simplified system which had been in place for some time. I've listened to the remarks and have remained convinced that it's a good measure. I therefore move second reading of this bill.

Motion approved on the following division:

YEAS — 22

NAYS — 14

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

Bill 3, Hotel Room Tax Amendment Act, 1984, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. SCHROEDER: Second reading of Bill 4, Mr. Speaker.

HOME OWNER GRANT AMENDMENT ACT, 1984

HON. MR. CURTIS: The Home Owner Grant Amendment Act, 1984, has the purpose of increasing the minimum real property tax payable from $150 to $175 as of January 1, 1985. It has no effect whatsoever on property tax collected in 1984. Those homeowners who receive the $630, those 65 or over and those who are handicapped or in receipt of a war veteran's pension, will continue to pay a minimum property tax of $1.

The increase in the minimum real property tax is consistent with the government's position that all property owners in the residential category, insofar as this amendment and this act are concerned, should contribute something towards the cost of providing local services. I appreciate that when I raised the minimum property tax earlier the members opposite expressed their opposition. I expect that they will be doing so again today. However, I earnestly believe that even with the increase effective next year to $175 a year, it is not onerous on any property owner in the residential category, and it spreads the burden more fairly.

I might say parenthetically that two years ago, in the course of conducting property tax hearings with my colleague the present Minister of Education (Hon. Mr. Heinrich) with respect to the home owner grant, I was quite surprised

[ Page 4098 ]

by and not prepared for the number of people who recommended that the homeowner grant be abolished. Let no one listening with one ear misunderstand. That is not intended. Nonetheless, there is a significant body of opinion among residential property owners, which I had not anticipated, that there should be no homeowner grant. That matter is not under consideration in the Ministry of Finance or in government.

AN HON. MEMBER: Ever?

HON. MR. CURTIS: Mr. Member, ever is a long time.

The new minimum tax is expected to provide about $800,000 in additional revenue in the first full year of operation — that is, 1985 — as a result of reduced homeowner grant payments.

That is the essence of the Home Owner Grant Amendment Act, 1984. I move second reading of Bill 4.

[5:15]

MR. BLENCOE: I won't delay or take too long on this particular bill. The opposition is indeed traditionally opposed to this legislation. We feel that any change at this time that affects the homeowner in terms of paying real property tax, particularly at such a low level.... The minister is quite correct when he says that it is at the lower level of property tax; however, it is often those who are least able to afford such a tax increase who will be impacted by this reduction in the homeowner grant.

When many British Columbians today are finding it extremely difficult to hang on to the very thing that keeps the recession away from the door slightly, that keeps shelter and a roof over their heads.... In our estimation, to do any tinkering with such a system as the homeowner grant at this time is not in the best interests of British Columbians, particularly because it's going to affect those who can least afford it.

Last year, we know — and the minister did not mention this — the minimum tax payable after application of the homeowner grant was already increased to $150 from $125, effective January 1, 1984. This just continues that erosion of the homeowner grant system that 99 percent of British Columbians accept and really are reluctant to see continually eroded by the government. Last year the change in the minimum payable was estimated to affect about 50,000 properties, the majority of them owned by British Columbians who are on marginal incomes. Many are unemployed or on social assistance and are just trying to keep a handle on their home and their shelter. I think we all believe that all British Columbians should have the right to own their own homes.

Again, changing the legislation two years in a row, affecting those least able to pay, is consistent with Socred philosophy, in terms of hurting those unable to pay or bear the brunt of the recession. It raised approximately $200,000 in additional revenue. If I'm wrong, the minister can correct me, but I think that's about right. I don't know what you intend to raise this year by this reduction. It is really a further increase in a way of taxation and reduction in support for homeowners during the recession. We sincerely feel it is going in the wrong direction. We can understand that during good times of less unemployment, less social assistance and more jobs available, and therefore more money in the economy, people are perhaps able to absorb this kind of reduction. But, again, this reduction will hit those homeowners who can least afford it. We cannot accept such a move at this time. It's quite clear.

The minister says there are those who say "eliminate the homeowner grant." If that were in any way being considered I'm sure the minister knows that there would be a massive outcry from British Columbians. However, there appears to be a policy of reducing the impact of the homeowner grant and whittling it away. I hope this is just a two-year anomaly in a very good system, and that there is no intention of continuing this erosion of the homeowner system.

Mr. Speaker, there's not much more that can really be said on this particular bill. I reiterate that it's unfortunate that during these times the government decides to reduce such a grant system that has for years helped homeowners in a considerable way. Having been involved in municipal government for a long time, I know what the homeowner grant does mean to a lot of homeowners. It's unfortunate that the government would, for the second year in a row....

Interjection.

MR. BLENCOE: Well, I've had a little bit of experience at the municipal level.

Interjection.

MR. BLENCOE: Six years is enough to get a little handle on some of the things that are happening there.

I can assure the government members that there is some trepidation afoot that the government is going to continue to erode this particular grant. I really wish they had not decided to reduce the grant for a second year in a row. Again, it will impact quite severely on homeowners who can least afford to have this reduction. The opposition will oppose this bill.

HON. MR. CURTIS: I think the second member for Victoria (Mr. Blencoe) will note, if he looks at Hansard tomorrow, that I said that this will provide an additional $800,000 in revenue next year. That's just a correction. It's a measure for next year. I would refer him to Hansard of less than a year ago, with respect to the last measure, which is another bill.

My voice is about as good as his at the moment. Mr. Speaker, may I have leave to make an introduction?

Leave granted.

HON. MR. CURTIS: I note with pleasure the attendance in the gallery this afternoon of Mayor Ernest Burnett of Delta. Would the House welcome him.

Mr. Speaker, I move second reading of Bill 4.

[5:30]

Motion approved on the following division:

YEAS — 25

NAYS — 15

[ Page 4099 ]

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

Bill 4, Home Owner Grant Amendment Act, 1984, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. SCHROEDER: Second reading of Bill 13, Mr. Speaker.

HYDRO AND POWER AUTHORITY
AMENDMENT ACT, 1984

HON. MR. CURTIS: I have a few remarks in second reading of Bill 13, which I now move.

This bill is a traditional one in the province of British Columbia, It has been introduced by four governments, as we all know. In this case it amends section 45 of the Hydro and Power Authority Act of the Revised Statutes of British Columbia, 1979. The result of this amendment is an increase in B.C. Hydro's statutory borrowing limit from $8.3 billion to $8.8 billion — an increase of $500 million. The outstanding statutory borrowing authority remaining as at January 15, 1984, for B.C. Hydro was $642 million. A $50 million redemption in February 1984 increases the outstanding statutory authority to $692 million. Although Hydro's capital construction program is declining as a result of the completion of a project and the decrease in anticipated demand for electrical power in this decade and the next, it is thought that additional funds will be required to meet financing of existing projects.

The purpose of this bill is to ensure that additional funds can become available as they are required. At present, approximately half the capital expenditure requirements forecast for 1984-85 are targeted for the Revelstoke Dam and the Cheekye-Dunsmuir mainland-to-Vancouver Island transmission project. The corporation's forecast capital requirement for 1984-85 is $955 million, and with prefunding requirements of $136 million, the total financing requirement becomes $1.091 billion. Debt maturities between March 31, 1984 — later this week — and March 31, 1985, will equal $250 million, which will help to partially offset the impact of the 1984-85 borrowing program on the amount of the debt outstanding. Total financing requirements for 1984-85 will produce a $149 million shortfall in the existing statutory borrowing limit as at March 31, 1985.

B.C. Hydro has emphasized that risks on the lower side in their budget plan amount to $500 million and that a contingency of from $300 million to $500 million in increased borrowing is therefore appropriate to cover that lower risk. This amendment will increase B.C. Hydro's statutory borrowing limit by $500 million to accommodate a forecast shortfall at March 31, 1985, in the present statutory borrowing limit and therefore provide a minimum cushion to accommodate those lower-end risks in the current B.C. Hydro budget forecast.

As I indicated, the bill is along the lines of those which members have dealt with in this House on previous occasions. I move second reading of Bill 13.

Mr. D'Arcy moved adjournment of the debate.

Motion approved.

Hon. Mr. Schroeder moved adjournment of the House.

Motion approved.

The House adjourned at 5:35 p.m.