[ Page 5425 ]

CONTENTS

Oral Questions

School district budgets. Mr. Rose –– 5425

Mr. Nicolson

Lab technicians. Mrs. Dailly –– 5425

Mr. Rose

Northeast coal. Mr. Williams –– 5426

Federal-provincial forestry agreement. Mr. Howard –– 5427

Budget debate

Hon. Mr. Gardom, –– 5427

Mr. Lea –– 5430

Mr. Reynolds –– 5433

Mr. Blencoe –– 5438

Mrs, Johnston –– 5441

Mr. Hanson –– 5443

Mr. D'Arcy –– 5445

Hon. Mr. Curtis –– 5447

Division –– 5449

MONDAY, MARCH 25, 1985

The House met at 2:06 p.m.

Prayers.

HON. MR. GARDOM: Mr. Speaker, I gather a brace of the fourth estate are celebrating their natal days today, so I say double happy returns to Mr. Ian Jessop and Mr. Hubie Beyer.

MR. DAVIS: Mr. Speaker, I'm sure the members of the House would like to join me in congratulating in the usual way four fine young women from North Vancouver, Linda Moore, Lindsay Sparkes, Debbie Jones and Laurie Carney, who over the weekend won the world ladies' curling championship. They've been fantastic ambassadors for Canada and British Columbia abroad. I'm sure many of us were proud to see the British Columbia flag showing on television worldwide on Saturday night.

MR. STRACHAN: I guess this announcement of mine rather pales in light of what my colleague has just said, but I would like the House to recognize and acknowledge a significant Prince George athlete, Mr. Neil Marshall, who won a bronze medal at the North American indoor speedskating championships held this weekend in St. Louis, Missouri.

HON. MR. HEWITT: In the gallery today are three ladies from my constituency: Iras Gartrell, Carrie Roadhouse and Marty Lundy. I'd ask you to bid these ladies welcome.

MR. NICOLSON: Mr. Speaker, in the gallery are Doreen and Clive Paul, two people who resided for a long time in Nelson and now reside in the Victoria area. Our loss is Victoria's gain.

Oral Questions

SCHOOL DISTRICT BUDGETS

MR. ROSE: I wonder if I might direct a question to the Minister of Education. I understand that last week the minister issued yet another ultimatum and deadline to some 30 school districts who refused to be compliant in the face of further government curbs. Does the minister believe that more ultimatums and deadlines will solve the education problems in British Columbia?

HON. MR. HEINRICH: Mr. Speaker, it's interesting to note that over half the school districts in British Columbia were able to deliver compliance budgets. The reason for sending out the letter was to remind the districts that they were to submit a compliance budget by the 15th. If they did not do so, they were sent a letter which was exactly the same as the one which went out to a few school districts for the transitional budget, which occurred some weeks ago. I am sure that school districts will do what they can to comply.

MR. ROSE: I think it's even more interesting, Mr. Speaker, that some 30 boards have decided to defy the minister. It's unprecedented.

The minister has apparently decided to set up a three member budget review advisory team — or BRAT, as it's known — as a final solution to the educational problems. Since the minister already has the power under the act to vary any school budget, what does the minister hope to achieve educationally by sending these "hit" teams off to harass certain districts?

HON. MR. HEINRICH: Mr. Speaker, the purpose of setting up the team was to report back to me if any alternatives were possible to permit a school district to submit a budget which complies with the amount allocated. If there is some assistance that can be offered, I think both the school district and the ministry will profit. The accusation of a hit team is not true at all. All we're doing is asking for information, and to provide to me alternatives that can be implemented for the purposes of bringing in a compliance budget.

MR. ROSE: Will the minister confirm that he has appointed his neighbour, Mr. Mac Carpenter, to the three member review panel, despite Mr. Carpenter's dismissal as secretary-treasurer of School District 57 in October 1980?

HON. MR. HEINRICH: Some very interesting comments from the front benches over here; everybody's a neighbour in the north.

The appointment of Mr. Carpenter, together with Mr. Stables and Mr. Sernmens, all of whom have records of achievement within their areas of expertise.... The fact that Mr. Carpenter had a parting of the ways with School District 57 is beside the point. The fact that Mr. Carpenter was at one time a neighbour of mine is, I think, totally immaterial. I'm aware that he worked extraordinarily hard on behalf of the district for a long time. In fact, when he left the district, there was a lawsuit, and as I recall, he received a substantial award for unlawful dismissal. I cannot be certain of the amount.

MR. NICOLSON: Were you acting for the board?

HON. MR. HEINRICH: Mr. Speaker, at the time this occurred, it seems to me I was an MLA.

MR. ROSE: A final supplementary, Mr. Speaker. Mr. Carpenter was dismissed following a management consultant study which found a number of things: central accountant systems lacking, shocking lack of accounting information, payroll system lacked rudimentary controls, reputation for arrogance, intractability and favouritism in dealing with district staff. It sounds like a wonderful recommendation for the BRAT team. What else qualifies Mr. Carpenter to tell other districts how to run their affairs?

[2:15]

HON. MR. HEINRICH: Mr. Speaker, the purpose of the team is not to tell the districts how to run their affairs. The purpose of the team is to report back to me any alternative proposals that they might be able to uncover for the purposes of bringing in compliance budgets. I don't really think there is anything unreasonable about that.

LAB TECHNICIANS

MRS. DAILLY: Mr. Speaker, my question is for the Minister of Health. With reference to the shortage of medical

[ Page 5426 ]

lab training spaces for the medical lab students in the hospitals, could the minister tell us if any progress has been made by his ministry to find the spaces for these students?

HON. MR. NIELSEN: Much as I really would rather not, it's really a Ministry of Education problem at the moment.

The number of positions available for the graduate students has not changed much over the past few years. What has happened, however, is that in the education system the number of those entering the program has increased considerably. There was not an obligation on behalf of the hospitals of British Columbia to provide those positions for all who may be taking the course and graduating.

I believe the Ministry of Education has been reviewing this matter, because it certainly has been brought to their attention over the past period of time, but there has been no resolution to that. There are apparently more students entering that program than there are positions available.

MR. ROSE: Since the Minister of Health has raised the name of the Minister of Education — in vain, perhaps — I would like to direct a supplementary to the minister. The government professes to be concerned about jobs. If so, why has the Minister of Education closed first-year lab tech courses at BCIT, Nanaimo, Prince George, Cariboo, and Camosun College — since B.C. last year imported 149 lab technologists?

HON. MR. HEINRICH: Mr. Speaker, I cannot give a specific answer to the question which has been raised. That part I will take on notice.

With respect to the point raised earlier about the concern for accommodating technicians, that matter is the subject of a meeting which I will be having at 3 o'clock today to attempt to seek a resolution. I will take the first part of the question on notice. You must remember.... I can't speak after taking it as notice, is that correct, Mr. Speaker?

The point is that on many of those courses the decision has been made by the board of directors of each of the boards. With respect to the matter of BCIT, I'll certainly make an inquiry on behalf of the member.

MR. ROSE: A supplementary on the same subject, Mr. Speaker. Did the minister order lab tech courses to be cut from three to two years without notifying the college boards he mentioned in his last sentence, and if so, whose professional advice was used to cut these courses by one-third?

HON. MR. HEINRICH: I'll take that question as notice, Mr. Speaker.

MRS. DAILLY: Another question to the Minister of Health. The Minister of Health is responsible for hospitals, and my understanding is that the shortage of spaces in hospitals is creating a problem. So once again I ask the minister: are you doing something about the shortage of spaces in the hospitals for those students who are waiting to get into them now?

HON. MR. NIELSEN: Mr. Speaker, we will not require the hospitals to create positions to correspond with the number of graduates, unless the hospitals require these people for their own reasons rather than simply to accommodate numbers, whatever those numbers may be. They will hire those they require to function in the hospital. It may not necessarily correspond to the numbers being produced through the courses.

NORTHEAST COAL

MR. WILLIAMS: In view of the absence of the Premier, the Minister of International Trade and Investment (Hon. Mr. Phillips), the Minister of Industry and Small Business Development (Hon. Mr. McClelland) and the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. Rogers), I have a question for the parliamentary secretary for Energy, Mines and Petroleum Resources. It was last Friday that I asked the Minister of International Trade and Investment what 3 percent of $10 was and he indicated he was going to get a report from his department on the subject. Since the minister thought it was three cents — that indicates our problems in northeast coal completely — I would ask the parliamentary secretary, in her new position, if she could advise us what 3 percent of $10 is?

I would further note, Mr. Speaker, that analyst Geoffrey Carter....

HON. MR. RITCHIE: On a point of order, Mr. Speaker, as the alternate Minister of Industry and Small Business Development, I will be pleased to take that question on notice, and hopefully at his convenience the minister will bring back the reply.

MR. WILLIAMS: Two people on the payroll and no answers.

A supplementary, Mr. Speaker, to either party. The analyst Geoffrey Carter, of Midland Doherty in Toronto, said on Friday last, "Whenever I look at the Quintette numbers, I nearly die," and that the only answer with northeast coal is further government subsidies. Could either of these people who are on the payroll, in terms of answering questions with respect to these issues, comment in terms of meetings between Quintette or others with respect to additional government subsidies beyond the $700 million we've already spent?

HON. MR. RITCHIE: Mr. Speaker, is a supplementary in order following a question that has been taken on notice?

MR. SPEAKER: Only if it's a new question, hon. member. I believe it was indicated that it was a new question.

HON. MR. RITCHIE: He did ask for a supplementary.

MR. SPEAKER: Good point. If it's a new question, hon. member, proceed.

MR. WILLIAMS: A further question, Mr. Speaker, to the acting minister. Can he advise us what 3 percent of $10 is?

HON. MR. RITCHIE: Mr. Speaker, again, I will be very pleased.... I'm sure that a great deal of research and study has gone into preparing this question, and it's only fair that he get a complete answer. So with that, Mr. Speaker, I will be very pleased to take this question on notice. Whenever the minister returns, I'm sure that he will be very pleased to bring you back a very full and complete answer.

[ Page 5427 ]

MR. WILLIAMS: A question to the parliamentary secretary. With respect to the fact that the Quintette mine is the wrong hole, as the Minister of International Trade indicated, can the parliamentary secretary advise us of the technical work done by the various senior geologists in the mining department on this question, and the matter of the intensity of drilling that he deemed to be necessary prior to expending this great deal of money?

MR. SPEAKER: Hon. member, it seems abundantly clear that the question would be better placed on the order paper, as it does require a considerable amount of detail.

FEDERAL-PROVINCIAL FORESTRY AGREEMENT

MR. HOWARD: You just saved the parliamentary secretary an embarrassment, Mr. Speaker. I won't risk heading a question in that direction, because in the absence of the Minister of Forests (Hon. Mr. Waterland), I'm sure we're going to get a precise, clear, positive "yes" answer from the backup minister.

Can I ask the acting Minister of Forests: when are we going to sign the federal-provincial agreement on silvicultural matters? Could the acting minister answer that?

HON. MR. SMITH: I would be pleased to answer the question, and indicate that the answer is: soon.

Orders of the Day

ON THE BUDGET

(continued debate)

HON. MR. GARDOM: This is the first time during this parliament that I've had the pleasure of making a few observations. We have a new Minister of Environment (Hon. Mr. Pelton), and I wish to congratulate him. I think Canadians right across the country are very pleased with results over the past week — namely, the action that was taken by the Prime Minister and the President of the United States concerning acid rain. Our colleagues south of the line have to be continuously impressed that Canadians are very serious about this, because not to attempt to bring it into check would be nothing less than folly in the long run. We all know what has happened in other jurisdictions. I gather that in Bavaria, for example, there are whole valleys where trees are bare and dying. In Sweden the fish loss in lakes is one of the most serious in the world. We certainly know that our Minister of Environment will take this acid rain problem very seriously and that he will keep the British Columbia perspective front and centre on this — and, indeed, on all environmental issues.

[Mr. Strachan in the chair.]

I also congratulate and wish well our new Minister of Labour (Hon. Mr. Segarty). He's a communicator bar none; he knows his stuff and can articulate it. He's a very fair-minded person; but I'd like to say to management, and to labour as well: you won't find him to be any kind of pussycat. You respect him and he will respect you.

Then, of course, there are the new roles for the Minister of Industry and Small Business Development (Hon. Mr. McClelland) and of International Trade and Investment (Hon. Mr. Phillips). I similarly congratulate them and wish them both well; I'm darned sure they will continue to promote and sell British Columbia like you wouldn't believe. I think we will find the results truly exciting, and I quite frankly can't wait to see them.

Mr. Speaker, I also would like to compliment the leader of the official opposition (Mr. Skelly); he's really shuffled the deck with his new three-piece-suit approach. Why, even the mud line has mellowed into a bunch of Shirley Temples and, perhaps for a different reason, one Orphan Andy. Sorry that I missed the talk of the big bear, my good friend the hon. member for Atlin (Mr. Passarell), but I gather that he really put that old retreaded Fabianist and perhaps the patron saint of the Nanaimo friendship society — or vice versa — in his place.

Atlin took on the press as well, and that seems to be high fashion these days. Why, some of them have even hopped into the sanctum sanctorum, the holy water of self-appraisal, and I think everyone will agree that there are some mighty fertile opportunities there. Look at their press council considering matters behind closed doors, yet how many times have we heard their sunshine speeches about the College of Physicians and Surgeons or other professional organizations? As our good friend the Minister of Transportation and Highways (Hon. Mr. Fraser) said last week, at one time the media actually used to sit in the press gallery. It's true. They were there; you could see them. But now, after Orders of the Day comes that thundering noise like Merrill Lynch bulls in full stampede as the question period dropouts hit the stairs. Mr. Speaker, I would strongly recommend that you have a first-aid officer at the bottom step; it's really a wonder that nobody has been hurt to this point.

[2:30]

Furthermore, in days of yore Victoria and Vancouver had two good newspapers, not one and a cut-line factory, as is the case now. But in speaking to the budget, I'd say it's not the poor underpaid, overworked, underprivileged, sometimes undernourished where-the-rubber-hits-the-pavement scribes that the public is complaining about; it's some of the policies of some of their bosses, who appear to want editorialized and unbalanced and constantly critical reporting of just about everything, save and except a birth notice, because they say it sells.

I think the press in our country could take a good lesson from that new paper in the United States, U.S.A. Today. It's certainly no Wall Street Journal, New York Times or Los Angeles Times. It's a national newspaper and perhaps very traveler-oriented, but it certainly does sell. I understand that it moved from a circulation of zero in about September 1982, to 1.3 million today, and with a balanced columnist policy. You see the pros and the cons. They're very well written and give readers the opportunity to consider both sides of the issue, and lets them make the judgment calls themselves.

Mr. Speaker, without qualification I support the budget. It's a good budget, and certainly the most appropriate one that our Minister of Finance can produce at this time. Its philosophy is to provide incentives to fire the engines of the private sector and instill confidence to develop economic growth, in order to secure the necessary revenues to permit government to pay for the multitude of services that society needs or wants, or has been conditioned to expect from the public purse. As Prime Minister Mulroney well stated this weekend, there has to be a balance. One can't look at any of this in

[ Page 5428 ]

isolation. There are society's needs and wants, and the pressures of the never-ending and no doubt well-motivated self-interest groups.

Mr. Speaker, is a doctor...? I am one of the strongest supporters of the medical profession, but is a doctor, who save and except royalty is the highest publicly paid individual in the history of the world, a better stamper-out of disease or healer of the sick because the public purse might pay him $350,000 a year, as opposed to $100,000, along with a free garage, free tools and parts, and manifestly subsidized learning thrown in in each case? Does a municipal manager better manage at $100,000 instead of three-quarters of that? Does a school supervisor or a university president or faculty dean do a better job for the kids or increase productivity because he gets a publicly paid return of about five times the average national earnings, and usually with raises that would make even a Vegas Fargo dealer blush? How much of that really gets to where the rubber hits the pavement — the public, the consumer?

We have all heard from some medical persons that the system is dying. We have heard from some teachers that the education system is dying. We've heard from some academics that the universities are at death's door. That's absolute humbug, Mr. Speaker. Maybe these sky-fallers should look at themselves. Maybe they should say how they think the public pie should be cut between these three sectors, or how much they want to saddle the unborn with. Maybe the taxpayers — and they're taxpayers too — should have a greater and more participatory function in determining those public salaries and public benefits. And sure, for MLAs and parliamentarians and senators as well. But these doom-and-gloomers cannot have it both ways, and as long as this administration is trustee to the B.C. taxpayer, hopefully they shouldn't and they won't.

Mr. Speaker, this budget doesn't — indeed, regretfully cannot — provide the cardinal remedy which in my view would make this province, and indeed all of Canada, take off; a route that would decrease the cost of consumer goods and increase everyone's wherewithal and disposable income, that would increase trade and create a capital inflow to provide jobs, success and prosperity like you wouldn't believe. It comes as no surprise to old-timers in this House that I'm once again talking about one-on-one, across-the-board free trade with the United States, and tomorrow morning couldn't be soon enough for me.

It takes two to tango, and at last the music is getting better. There were mighty sweet sounds in September of last year when the United States trade representative William Brock said: "We would be willing to do anything the Canadian government would like to do at the pace they would like to do it." Now if that isn't an open sesame, what is?

Next was the Shamrock Summit last week. The headlines envisaged a blockbuster free trade pact. It didn't quite get to that, but the St. Patrick serenade was loud and clear. "The only fair trade is free trade," said Mr. Brock. "A pledge of freer trade," said the two leaders. And I would say go the whole way, coach. There's nothing freer than free and anything less would probably contravene GATT.

Both countries — and I'm glad to see this — have mandated their representatives six months for a detailed study and a report back. I think the Canadian public have got to know that we're supporting them. I regret indeed to hear that Mr. Brock has received a new posting, but I certainly hope that the President of the United States secures another individual with his capacities, his drive and his interests in this issue to take on the task for that country.

Six months from today — September 17, 1985 — could become one of the most remarkable and significant dates in our country since Confederation. This is no time for the faint of heart, and it's about time those central Canada hot-housers didn't always have their own way, as they have had since Confederation. We need a demonstration of boldness, courage and determination. These kinds of opportunities don't spring up every day, and we've got to grasp them. At long last, let's disregard the shrill of the so-called economic nationalists — but in real life protectionists — tariff barrierites and hot-house state- and consumer-subsidized, inefficient and uncompetitive on each side of the border. What I'm talking about this afternoon is in the interests of each and every Canadian consumer from Cowichan to Corner Brook. Anything less in the short run lacks foresight; anything less in the long run is just plain bad economics.

The conclusion is inescapable: the surest, least complicated and most friendly route to our future prosperity in our country and in all of our provinces has to be next door — with our already very connected economy — to a huge free market of goods, services and capital. Our greatest need is for a big, dependable, easily accessed and — from a world perspective — generally predictable market. It seems, from the American point of view, to be there for the asking.

So I say we should get that first, build up our strength, and then have that followed by discussions and negotiations to remove trade barriers bilaterally with Europe and Japan and the fast-growing, newly industrialized countries. We have an absolutely remarkable opportunity at our fingertips, probably in a significant fashion, for the first time in Canadian history. It's very peculiar to me that that once very proud, innovative and reform-seeking Liberal Party of Canada isn't behind the Prime Minister of Canada 110 percent in this issue. They should be. It's time for support and not sour grapes, and I'd say to the Prime Minister — as I'm sure all Canadian citizens would say: go for it as soon as you can.

Now I'd like to say a few words about the Canadian Senate. If the Senate continues as it is with its present powers and its preposterous method of selection, its members' tenure, its lack of fair regional representation and, in many cases, such a dismal record for attendance, then I'd say that few people in Canada would suffer any pangs of anguish if its tent were folded up and it faded away. But it can be effective; it can perform a function. An Upper House can do a job, and an Upper House can properly serve the country. But the one that we have today is not on that track, and it has to be put on a proper track.

Ever since 1975 this administration has vigorously advocated the reform of our central institutions, in order to see that the senate and the major Canadian boards and commissions better reflect representation from and in the interests and aspirations of all parts of the country. When our proposals were articulated at the first ministers' conference way back in October 1978, an almost embarrassing paucity of support developed. But slowly the British Columbia cause started to secure recognition, and along lines that were strikingly similar to that which we initially proposed — for example, the Pepin-Robarts task force report, Claude Ryan's Beige Paper, the Canadian bar, the studies of the Canada West Foundation and, most recently, even Alberta.

MR. WILLIAMS: W.A.C. Bennett.

[ Page 5429 ]

HON. MR. GARDOM: Indeed, W.A.C. Bennett had some very profound and good ideas on that, Mr. Member. You're completely correct.

I'd say that one of our most flourishing cottage industries now is the senate reform, with just about everybody having a go at it but the B.C. Vegetable Marketing Commission. There are about 18 models now on the table, with the report of the MacDonald commission still on the horizon. I'm making this point because Canadians today are far more concerned with — and indeed they should be — the far more pressing issues of the economy, jobs, inflation, taxation, and the cost and proliferation of government. They don't want, and the Senate does not need, any more studies. There has already been enough time and money spent on it, and there's absolutely no way, in my view, Mr. Speaker, why all of that brain-and-dollar drain should be lost. It should not become love's labours lost, and all at taxpayers' expense. What Canadians want and Canada deserves is action. We have to have more steam at the engine and less at the caboose, and most of all a manifestation of political will.

Look at something that could be achievable today, could be realizable, and would be in the interests of and of assistance to Canadians, not just to their governments. We're beginning to see a slight ingredient of that political will developing, and it's a result of the Senate holding up the money bill not too long ago.

The Senate cannot take on the job, Mr. Speaker, of attempting to hijack the House of Commons, but curing that alone is not enough. I'd like to see the Prime Minister of Canada and the Premiers sit down and develop a short five- or six-point agenda, set the wheels in motion, have their ministers meet and develop amendments, within a prescribed and short time-frame propose resolutions, and then get them in front of Parliament and in front of the provincial legislatures and get them passed.

I would like to suggest seven basic principles. Firstly, the major purpose of a reformed Upper House should be to bring to bear regional and provincial concerns in the national decision-making process.

Secondly, an Upper House should have the capacity to address certain crucial federal-provincial issues of particular concern to the provinces, and with direct provincial input: for example, the making of appointments to major boards and commissions — the provinces have to have some hand on those national levers of power and decision; the use of the federal spending power in areas of provincial jurisdiction so as not to distort provincial priorities or interfere with provincial programs; more input into the passing of federal laws to be administered by the provinces, the Criminal Code and the Young Offenders Act, all of which can produce horrific burdens on provincial taxpayers; the use of the declaratory power; and the use of the emergency power.

Thirdly, an Upper House's function should continue as a chamber of sober second thought over proposed federal legislation, and on occasion it has performed well in this regard. But it should not become a confidence body with the power to defeat a national government.

Dealing with selection, the selection of senators solely and only by federal appointment has got to end. That's felt nationally, Mr. Speaker. The public say that has got to end. There are options. One would be to permit election. Another would be to allow each level of government to select half. Still another would be to allow each of the 11 governments to choose themselves how they would secure representation.

Some might choose to appoint, some might choose to elect, and others might well choose a combination. But Canadians across Canada are fed up with this being a patronage palace, whoever the Prime Minister is who puts them there. Also, there has to be provided a full capacity for turnover — no lifetime tenure, because what that has done has elevated fully paid truancy on the part of some of them to a level of unacceptability unparalleled in most western democracies.

[2:45]

The seats should be redistributed so that the Upper House can properly act as a counterbalance to the lower House's representation by population, with the smaller provinces and those more geographically remote from Ottawa being entitled to relatively heavy representation. I'm not suggesting more seats; I'm suggesting less seats. Right now everything labours in favour of central Canada — 48 seats are owned by central Canada and six by British Columbia. It's preposterous. It's out of sync with the evolution of contemporary Canada, and it defeats one of the historic reasons why the Senate was formed — for the protection and articulation of regional interests. Why there is any need for 24-seat regional interest protection for Ontario today, when Ottawa is for all practical purposes downtown Ontario, is beyond me. The concept of the Senate Upper House is good in theory, but it's rotten in practice, and it doesn't recognize the evolution of our country insofar as representation is concerned.

Lastly, and I'd say that this is the sine qua non, any kind of Upper House reform has to develop from that manifestation of political will. It has not been present in our country. There is a glimmer of it happening now, as I mentioned. But it can't start at the bottom. That's been tried, and it has not worked. It has got to start at the top. There are 11 people in the country today who could establish that agenda: the Prime Minister and the Premiers.

Maybe it should be a two-step process. But the first step should not be just tinkering — no way. Canadians are entitled to more than that. They should go to the numbers, go to the method of appointment, and certainly provide some type of suspensive as opposed to mandatory veto. An absolute veto, as is the case today, really does mock parliament, whether it is used or not. There are lots of precedents for a 30-day suspensive veto for money bills. There is a parallel provision in the House of Lords in the U.K., and that would appear to be reasonable. I'd say a longer period of time, so the Upper House is effectively equipped to do the job; and a longer period of time to do that with other legislation — 90 days, or even 180 days. There's good precedent for a 180-day suspensive veto; that was brought in for constitutional amendment when our constitution was being patriated.

Mr. Speaker, I have a few minutes left. I'd just like to make a few observations about marketing boards, because I know my colleagues would be very distressed if I didn't. These are my personal points of view.

Interjection.

HON. MR. GARDOM: Well, it gets better every year. My remarks today are pretty heavily consumer-oriented, and I'm not making any apologies for that. I'd like to see more breaks for them, greater freedom of choice, a better selection and, if they can find it, perhaps an increased wine selection. If the imports can do better, let the consumer have the break in that. If somebody wants to get involved in loss-leader liquor sales, just let them do it. Why our British

[ Page 5430 ]

Columbia consumers should not be able to buy the best fruit, vegetables, milk, oysters, turkeys and cranberries whenever and from whomever they want to is beyond me. I say get rid of those blankety-blank marketing boards.

This is absolutely no reflection whatsoever on my genial, kind, considerate, cordial, hard-working, dedicated, happily married, effective and efficient Minister of Agriculture (Hon. Mr. Schroeder), who has his role to play, his job to do and his constituency to protect. From my perspective, he's doing just too darned well on this issue. I love him dearly and I wish him no ill, but only the best. But I can certainly tell you that if I ever have my personal druthers, all of these marketing boards in the province of British Columbia would face the new reality. I don't think there's any need for people to get nervous about me making these kinds of statements. The hon. Attorney-General (Hon. Mr. Smith) can talk about provincial capital punishment with a degree of impunity, so conceivably I'm entitled to make a little reference to these marketing boards.

I'd just like to read quickly to you, before I conclude, Mr. Speaker, something from the Fraser Institute that I think you will agree with. This was done under the hand of Sally Pipes and Michael Walker. It's entitled Tax Facts 4 and was published in the early summer of last year. They make two points — and it will take me about two minutes to quote these points. The first one essentially buttresses what I was saying about free trade with our good neighbours to the south. They say this:

"In November 1976 the federal government imposed a quota on imported clothing and textiles. Its purpose was to limit the importation of inexpensive clothing and textiles and so protect Canadian markets for Canadian clothing and textile manufacturers. The difference between the price for clothing that would have prevailed in the absence of the quota and the price that actually prevails is a tax on the consumer. Proceeds from this tax go directly to producers and are, in effect, a producer subsidy. There is no difference in principle between this sort of tax and other hidden taxes...."

And then they refer to a book:

"Free Trade Between the United States and Canada have estimated that the total amount of tax levied in the form of tariff protection or other barriers to international competition may be as high as 10.5 percent of Canada's gross national product. Currently this amounts to a tax of some $40 billion."

This is what the Fraser Institute says about marketing boards, and I know that you, Mr. Speaker, are going to be particularly interested in this most worthwhile and correct quotation:

"At present there are some 177 farm products cartels in Canada. These cartels or marketing boards generally have the effect of suppressing competition in the production of the cartelized product, and they consequently cause the price of the product to be higher than it otherwise would have been. As in the case of clothing and textiles, the amount by which the marketing board price exceeds the price that would prevail in its absence — that is, in the market — is a tax on the consumer. Accordingly, marketing boards ought to be viewed as a device for transferring money from consumers to producers. And this transfer is equivalent to a tax on consumers, the proceeds of which are given to producers."

Mr. Speaker, with the quotas being traded like taxi licences and, I'd say, reflecting little or nothing re  land use or the value of stock and equipment, I'd have to say to the supporters of the compulsory marketing board system — and it is indeed fortunate that the beef cattle crowd are not among those supporters — that if these production and sales regulators are so all-fired good, if this system is so all-fired good, why don't they prove it and permit it to become voluntary as opposed to compulsory?

It's been a great pleasure to say a few words here this afternoon, Mr. Speaker, and I certainly thank the House for its rapt attention.

MR. LEA: I listened to the Minister of Intergovernmental Relations with.... . I don't know if it was with bated breath or with bait on my breath, but rapt attention. I think what we should do is give the Canadian Senate a would-they-be-missed test. If Parliament met in the middle of the night and told no one they were meeting, and they wiped out the Senate, and if no one in this country knew over the first two year period that they'd actually done it, maybe that would be the test. Would anybody miss them? Would we know they'd gone? I doubt whether there would be a Canadian who would know that the Senate had gone except the senators themselves, either those who are still there or those who were pensioned off. They'd be the only people who would miss it.

AN HON. MEMBER: They wouldn't know either.

MR. LEA: Maybe they wouldn't know.

Mr. Speaker, I said when I was speaking to the amendment to the budget that I would be supporting the budget with some pretty serious reservations. It's almost like the government is half right. The government has said that we have to get the economy going, but I don't find anybody in the province who doesn't say that. The official opposition says it; all political parties say it. I imagine you could walk out onto the street and talk to the unemployed, those who are working and those who are in business, and everybody would say: "Yes, we have to get the economy going."

But what does that mean? I would say that probably if we looked behind that statement we'd be talking about the creation of new wealth. Mr. Speaker, up until a few short years ago, the creation of wealth was synonymous with the creation of jobs. So when we talked about getting the economy going in the 1930s, the 1940s or the 1950s, we were talking about creating more wealth, which in turn would create more jobs.

The government says that they would like this budget that they've brought in to get the economy going; in other words, to create more wealth. I don't think anybody would disagree with that thrust — maybe not the way they're doing it, but the thrust of getting the economy going to create more wealth. But, Mr. Speaker, times have changed. Whereas a few short years ago the creation of new wealth at the same time created new jobs.... Today it still would, but not to the same ratio that it would have a few years ago.

New wealth creation in our economy today does not have as part of it the creation of jobs to any large degree. The creation of new wealth in our economy is, for all intents and purposes, a procedure that would have jobless wealth creation. We all talk about new technologies and these new technologies being applied to every facet of our economic life

[ Page 5431 ]

and social life. But we know that to put a pulp mill in today with new technology, and to have the same output of material, would create fewer jobs in a pulp mill today than a pulp mill that was put in 30 years ago. That new machinery, that new equipment, the microchip, the new saws — all of that new technology can be run with fewer people to create more wealth and more output.

So where does that leave us? If the government's program under the budget is successful, and I don't think there's anybody that hopes that it isn't.... We may not think it will be, but everybody hopes that the creation of new wealth is a successful project. The government, though, says: "Let's create this new wealth. Let's get the economy going, because we want to create jobs." That's where, to a large degree, I part company with the government.

If they are indeed successful in creating new wealth, they will in many instances be creating new unemployment, because if we go into our industries and apply the new technology that's available in retooling, with new capital goods, we are in effect going for higher productivity. The very term "higher productivity," with new technology, means fewer jobs to produce the same amount of goods or more goods. We see it in the forest industry, as I said the other day. MacMillan Bloedel, in 1984, had a larger output of goods than they had in 1979, and they did it with 40 percent fewer employees. Now that should give us pause.

[3:00]

There are a number of things that are creating this new higher productivity in our forest industry. One is new technology. The other is that the people who are working there are frightened out of their minds that they're going to lose their jobs, and I think we have to admit that the people in the plants — and I've talked to them — are working harder than they did a few years ago. They are actually putting in more effort, because they are very afraid that they could lose that job and there's no new job to go to. We have new technology, workers applying themselves more diligently and with more effort, and we have higher productivity, therefore higher unemployment. And it's increasing all the time. If this budget is successful, to a large degree in the aggregate sense we will have more unemployment, not less.

Now that's not necessarily bad, if we're willing to deal with the reality of that problem. If new technology and new capital goods are going to create new wealth with fewer people, then it seems to me that what the government has failed to grasp is that as a province we must talk about a new method of redistribution of wealth. It's a must, because if machines are more and more going to produce things — commodities — then we must redistribute wealth to those who are not going to be working in the production of commodities any longer, so that there's somebody there to purchase the products coming from the machines.

[Mr. Ree in the chair.]

Now, Mr. Speaker, I'm not suggesting that we take this new wealth and say, okay, here's a formula; let's divide it up and give it to all the people who aren't working and give them the purchasing power to buy the goods. I don't think a society that pays people to be idle can be the healthy society that we want. People must contribute to the society they live in. What we're talking about is this: how, in the future, are those people going to contribute to society, and what are they going to take out of society in terms of the redistribution of the wealth created?

As new technology is applied more and more, we as a society must face the problem of redistribution of wealth. I don't say that in an ideological sense; I say it in a practical sense. We have to redefine the redistribution of wealth. At the same time we have to redefine work, and what it means to work in a society. If machines are going to be producing many of the commodities, then what kind of work are the citizens going to do that is worthwhile in the community, is fulfilling to the individual, and also helps to create a different kind of wealth — a richer, fuller, cultural society?

We're going to have to look at a number of areas. We're going to have to look at work-sharing. In a redefinition of work, we're going to have to look at what it means: what sort of contribution to society is going to be considered work.

At the same time that we're considering the redistribution of wealth, we must examine the redistribution of work, redefine work, and after having done both of those, or in conjunction with those, we have to redefine and redistribute the decision-making process. In other words, we have to redistribute power within our society. If we're going to survive, we must have a decentralized society, not only in government services but in our economy. Because in this new, tough, competitive world that we're going into with the rapid change that is with us and increasing all the time, we must have smaller economic units that contain the efficiency and flexibility of small and are able to deal with rapid change because they are smaller, flexible economic units. If we don't go that route we are going to be left with an outmoded, impotent industrial complex that won't deal with the new world that we're going into.

Mr. Speaker, much of that new economy, in my opinion, is going to come from the small business person. It's going to come from the creativity of the entrepreneurs in our society, not only as people who get into business for themselves, but as cooperatives. We have to talk about community tree farm licences. We have to talk about small units that are controlled at the local level, either by local groups or by local business people taking a risk. But it's very difficult for business people in this province to get the capital needed to put a good idea into practice and reach fruition.

I'd like to spend a couple of moments on the Canadian banking system. In our system of banking, if you go in to get a loan, it doesn't necessarily have to be a sound business venture. You don't have to prove to the bank that you have a good idea, that you have proper management and proper marketing. All you have to do is prove that you have ten times the amount of collateral you need to get the loan. We have to have a banking system where an entrepreneur or a cooperative can walk into that bank or lending institution with a good idea, a sound business proposition, a good management proposal and a good marketing proposal and get a loan at reasonable interest. What have our banks done? They have taken the money of Canadians and said: "We would rather risk this money by lending the money to Brazil, Argentina, Poland and Mexico as opposed to taking a risk in the Canadian public." Whose fault is that? We know very well that the banking system is going to do what it's always done, because let's look at the structure. Why should the banks lend money to the small business community? When you take a look at the directors of the banks you find out that they've always loaned the money to the companies they work for or represent — the large corporations.

[ Page 5432 ]

Interjection.

MR. LEA: And some senators in this country. That's what this banking community has done. But don't blame the banks. They are going to do do whatever suits their vested interest and the directors'. But, boy, we can take a look at the federal government of today, the federal government of yesterday and the federal government before that, and say: you have let Canadians down because you have allowed a financial institution in this country that does not serve the citizens of this country, whether it's consumers, citizens going for mortgages, or small business people going to the bank to get money for an idea. The banking system and the financial institutions in this country have let us down sadly, but the responsibility must lie with the federal governments. They have the power to control those financial institutions, and they have not done it.

We can only turn that around by making sure that federal politicians go to Ottawa dedicated to changing the financial institutions to serve the citizens and the economy of this country and not themselves. Every candidate should be questioned. Mr. Speaker, don't you find it more than passing strange that when we see a first ministers' conference or a finance ministers' conference, with the representative of B.C. — either the Premier or the Minister of Finance or the Minister of Intergovernmental Relations — we don't see these issues on the table? I noticed the Minister of Intergovernmental Relations (Hon. Mr. Gardom) applauding when I talked about the facilities not offered through the banking system. When is the Minister of Intergovernmental Relations going to take this to the national stage and put it on the line on behalf of the citizens of this province and the rest of the citizens in this country?

I believe that more than at any other time in the history of Canada our future relies on releasing the creativity of our citizens to deal with the changes that are coming down on us, one after the other, and getting more rapid every day. That creativity must be capitalized on if we are going to allow those entrepreneurs, cooperatives and community-based enterprises to get a chance to create new wealth. They have to be freed, and they can only be free when we supply them with the capital that's needed. We have to look at innovative ways of doing that.

Also, as we go into the machines' creating more and more of the wealth, we are going to have to examine another aspect of our economy. Up until now there have been earnings from capital goods and earnings from labour. We are going to have to examine in our society how we move individuals into getting earnings from capital goods. The ownership has to change. The citizens of this province and of this country must start to become the owners of capital goods, so that they are reliant not only on wages but on some of the earnings from the capital that's invested in our country. We must do that, because if we don't then the only way we're going to redistribute wealth is through government: taxing new productivity, bringing it into government and spending the money back out there to create jobs in the service industry. I don't think it's the most efficient way to do it. The most efficient way to do it is to allow citizens to become owners of their own economy. You know, there are many people around in society today, here in British Columbia, in Canada as a whole and in the world who have some pretty innovative, exciting ideas of how we could do it. We can try some experiments right here in our own province. I know that the citizens in our province — and I'll say this: more in the rural areas of our province — are willing and able to take on the responsibility of trying some new experiments. They want to do it. They have ideas, they have drive and they have the desire. What they lack is financial institutions and government truly being partners in those new experiments.

We have to examine redistribution of wealth, redistribution of work and a redefinition of work. Redistribution of power and a redefinition of the decision-making process in society — those are the areas that we have to re-examine with fresh eyes, with fresh ideas and with new energy if we are going to go into a new economy that will be competitive and allow our citizens to be part of it. We have to do it.

This budget does not address those issues. This budget only addresses the creation of wealth. I think they're going about it incorrectly, but it's the government's plan. Even the Prime Minister of this country, Mr. Mulroney, before bringing in his budget, sat down with labour, business and other special interest groups and talked to them about the problems in a search for common ground to establish common goals. I give Mr. Mulroney full marks for what has gone on in this country in the last week. I think it's heading in the right direction. But this government did not do it. This government sat down with themselves and came up with their plan. Their idea of partnership is that once they've come up with their plan, we either fall into line or we're not good partners, we're not good citizens. That tells me that there's a certain cynicism in the attitude of this government toward our citizens: not having faith that there are ideas and renewed energy out there. It signifies to me that the government, in their own way, have lost hope.

[3:15]

Rhetoric is one thing and action is another. It's good that we're talking in terms of partnership, but to talk about it isn't action. That action had to take place before the plan was in place. It did not happen. And because it did not happen, don't blame the trade union movement, the business community, the municipalities or the federal government if this budget doesn't work, because they had no part in the planning. But maybe that's for the best in the long run, because this government has to accept full responsibility for this budget. And if it doesn't work they have to accept full accountability.

I do not want to see, down the road, fingers from this government pointing at the municipalities and saying: "We gave you your chance and you failed." I don't want to see this government pointing at the trade union movement saying: "We gave you your chance and you failed." I don't want to see this government pointing their finger at the business community, and especially the small business community, and saying: "We gave you your chance and you failed." Because they did not have a chance for input. They did not have a chance to be a true partner. The accountability lies with the government benches.

One member of the official opposition said: "Vote against it." I believe this government should be given every opportunity.

AN HON. MEMBER: To hang itself.

MR. LEA: I didn't say that. I don't want the government to be able to point at me and say: "You were an impediment to our scheme reaching success." I want that government to have full responsibility, and I will even go further than just voting for the budget. I will tell that government that any time

[ Page 5433 ]

they want me to help in any way as a member of this Legislature, I will. If that government were to ask members of the official opposition for help, if they were to really listen once in a while to the opposition and not just sit here having the words come in, then even the backbenchers might become innovative. Even the backbenchers may decide that they're not just going to stand up and read the speeches supplied out of research, and maybe they would come up with new ideas. Maybe even the backbenchers wouldn't be afraid to say: "I agree with the general thrust, but I think there's something wrong."

Surely one of those backbenchers could have found something wrong with the budget. Surely there was something in the budget that one of the backbenchers didn't agree with. One exception is the member for North Vancouver–Seymour (Mr. Davis), who made one of the better points in the last while when he was talking about parliamentary secretaries and the fact that it is dangerous for a parliament to have too many people who are paid at the whim of government. The backbenchers, regardless of party, must be independent. They must be independent to exercise their free will....

MR. VEITCH: Were you that way?

MR. LEA: No. If I had always been that way, I would be prouder than I am today. But I'm going to tell you something, Mr. Member: I wish I had always been that way, because the only thing in our British parliamentary system that protects citizens from the tyranny of the majority is the independence and conscience of the backbenchers — the private members. When that goes, there is no protection against the tyranny of the majority, which is the government. That is going to be lacking in this House, because parliamentary secretaries now....

Only one backbencher on the government side has a part of his income that is not at the whim of government. That is a dangerous thing to happen in the British parliamentary system. On the other hand, if you were to take all of the people on the government side who have part of their salary at the whim of government, and then ask the official opposition how many owe part of their income to the whim of the Leader of the Opposition, you would have quite a number of people with part of their living at the whim of two political leaders in this House. How many have real freedom to be independent?

The member for North Vancouver–Seymour, Mr. Speaker....

AN HON. MEMBER: And yourself.

MR. LEA: I only get money from the people, and most of the people on this side only get money from the people. It's on the other side that not only do you get money from the people but you get government dollars, and it is hush money.

Talk is cheap. One of the things that's always disappointed me about the member for North Vancouver–Seymour is that in the crunch he always votes with the government, except for one time when we both broke ranks.

Interjection.

MR. LEA: I can't remember the other two. I remember once, because I was with you. We both broke ranks with our parties to vote on bunker fuel.

AN HON. MEMBER: You did a speech on it too.

MR. LEA: Yes, I did speak on it.

Interjection.

MR. LEA: You see, there is the inanity of that group. He says: "After he brought it to your attention, you saw the error of your ways and changed the way you were going to vote." One of the problems with this place is that they actually think debate is a wasted effort; that debate is useless in parliament and only action counts. Debate is one of the most important ingredients of democracy. Without debate we are nothing. Debate is not wasted — or at least it shouldn't be. This is the place where we should share ideas. This Legislature would be so much richer if we actually shared ideas in here.

Mr. Speaker, at the beginning I said I support this budget, and I will be voting for it with great reservations. I do it because I want to put the responsibility exactly where it belongs: in the government benches. It's their budget. They're responsible, and they will be accountable.

MR. REYNOLDS: It's a pleasure to get up and speak on this budget, Mr. Speaker. It's especially interesting to speak on the last day of the budget, because you get the opportunity to listen to the wisdom of all those who have spoken before you. Certainly there has been some great wisdom in the past few days from both sides of the Legislature, and it's been a very enjoyable budget debate.

I couldn't help but make some comments. I hadn't even intended to talk on the Senate, Mr. Speaker, but our illustrious House Leader (Hon. Mr. Gardom) had to bring the topic up. I certainly have some opinions myself on that and would just like to talk about that for a second, because I think it's so easy to dismiss the Senate. It's so easy for the independent member, the leader of the United Party (Mr. Lea), to talk about dismissing the Senate and getting rid of them, and about how they all fall asleep.

I used to have the pleasure of walking in every once in a while when we were passing bills in Ottawa and watching them sleeping. But there are some people who do work in the Senate, and who work very hard. I can't help but think of Senator George van Roggen, who has done the books on trade between Canada and the U.S. That is one of the best proposals that I've seen in this country in a number of years, Mr. Speaker.

But the problem with the Senate is not the Senate; it's the method by which those members are sitting in the Senate. I think the sooner that we as a government in British Columbia and other governments in Canada can convince the Prime Minister that we should go to a fully elected Senate, elected by region, in this country.... Then we'll have a Senate that has some teeth in it, a Senate that represents all the people of Canada, and a Senate that gets some action and gets some positive activities taking place in our country.

I think, Mr. Speaker, there's a great feeling among Canadians out there that they would like to see an elected Senate. Certainly I know that at this time when we have disagreements with the federal government, if we had senators who were on an equal footing it wouldn't matter that the province of Quebec elected 58 Tories, and they have to be nice to them now to make sure they get them re-elected; it wouldn't matter how many were elected in Ontario. If our Senate group from British Columbia on a regional basis were equal to those

[ Page 5434 ]

regions, they would have the power to get those things that were good for British Columbia, and that's what we need in this country.

[Mr. Strachan in the chair.]

Of course, for those who don't know how it works in the United States, that's how it does work in the United States, Mr. Speaker. The Senate is represented equally by every state in that country, and that's why the Senate has some power. I think it would be very nice to see that happening in this country.

Now some members talk about the members of the government, and how we get our speeches from research. I certainly don't. I've just got my notes that I prepared myself I like to get up and talk about the positive aspects of the budget. But one member on the opposite side said we can't disagree with the government. Certainly we can disagree; we can. I would have liked to have seen some things in the budget that weren't there, and I will fight within my party to try to get them there.

I certainly think, Mr. Speaker, as an example of that, that the 7 percent tax on a bill of $7 or over in restaurants should be across the board for all restaurants. I think it's a discriminatory tax against a certain segment of society. I think that's wrong. There should be an equal tax in restaurants. I'll keep on making that proposal to the Minister of Finance; hopefully somewhere along the line he'll make that change.

I would also mention, Mr. Speaker, that some of the things in the budget.... The minister increased the tax on cigarettes. I'm a smoker, but I quit smoking a week ago. I don't think I quit smoking because he put the tax on there, but because I thought it would be good for my health. But maybe that segment of the budget will encourage some people to quit smoking in this province. I'm not going to be one of those reformers who says that everybody should quit. It's a habit that I enjoy, but I decided that because of my health I would quit smoking. Hopefully I can get up here a year from now and still say that I've quit smoking — even six months from now — and hopefully, like a lot of others, I won't gain a lot of weight because of the fact that I quit smoking.

Mr. Speaker, I think that's one of the positive aspects of the budget. We hear a lot of things from the opposition about what's happening in the budget. They keep on talking about jobs. I think it must be very nice for the opposition to get up and keep on hammering away at what this government is not doing, but I haven't heard any of them get up yet and talk about all the things we are doing.

I hear the member for Victoria here, who is sitting in the chamber now and, I understand, will speak next. I wonder if he's going to get up and talk about some of the positive things that are happening in Victoria and on Vancouver Island. I wonder if he's going to talk about the new Island jetfoil — that service that is going to go from here to Seattle twice a day and to Vancouver and back; a high-tech industry that is supplying a number of jobs in the Victoria area and will bring thousands of tourists to the Victoria area. Mr. Speaker, I don't think he's going to get up and talk about the positive aspects of that Island jetfoil. There are millions of dollars invested in that in this city, and it's going to benefit the province. It creates jobs....

Interjection.

MR. REYNOLDS: The member says: "Taxpayers' money." Yes, Island Jetfoil has taken advantage of the federal government's SRTC grants, but they are also matching those with millions of dollars of their own money. They are smart business people, but business people who are taking a risk on a venture that a lot of people say can't be successful. Yet I know from their reservation systems that they have already booked thousands of people to come to the Victoria area when their system opens up next month. Why don't the NDP talk about the positive aspects of that instead of talking about the Marguerite, which is just as important for Victoria but loses millions of dollars a year? They want to lose millions of dollars a year, but they do not want to talk about the positive things.

MR. BLENCOE: You want to shut the Maggie down; that's your hidden agenda.

MR. REYNOLDS: You see, Mr. Speaker, here's the member for Victoria talking about a hidden agenda: we want to close the Marguerite down. We're the ones who are keeping the Marguerite going, and we're trying to make it a profitable venture and bring thousands of tourists to Victoria. But the NDP wants to go out and spread the false rumour that this party wants to close things down.

This is the party that encourages not only free enterprise but the Marguerite. We're encouraging the jetfoil to get going. We've made space available for them to bring tourists into the harbour of Victoria and have created jobs in Victoria, and I haven't heard one of the NDP members for Victoria get up and talk about the positive aspects of that in this budget.

MR. BLENCOE: It's mostly American jobs.

MR. REYNOLDS: That's absolutely untrue, absolutely false.

AN HON. MEMBER: It's American money too, isn't it?

[3:30]

MR. REYNOLDS: It's American money that's going to be coming to Victoria and spent in hotels, motels and restaurants. Mr. Speaker, that's what is important. Victoria and the NDP talk about wanting clean industry. What could be cleaner than tourism? This company is promoting tourism in the Victoria area. But no, I guess the NDP have to knock it because it wasn't the government that bought it; it wasn't the government that invested millions of dollars. It's private enterprise, and they don't like that, Mr. Speaker.

Mr. Speaker, how about talking about International Electronics Corp., another company in the Victoria area? In fact they've got an office building in Victoria and they've got one out in Saanich, with hundreds of people employed. Again they might say: "Oh, tens of millions of dollars of taxpayers' money." Yes, the federal government brought in an SRTC program that allowed people to raise money that way, but they also put their own money up. There are thousands of people being employed in this province because of that federal government program, but we don't hear about those positive things from the NDP.

Maybe in that office where they are going to develop and work on high-tech programs they can develop one or two items that can employ tens of thousands of people in British Columbia. Mr. Speaker, the NDP just don't understand the

[ Page 5435 ]

high-tech industry. They don't understand free enterprise. They don't understand people who take risks with their money to try to find jobs for other people.

Interjection.

MR. REYNOLDS: The minister over there mentions that we can't get a lot of these people to Victoria in the winter because they won't plough their streets, which is very true. Of course, that's the one thing the member of the NDP and I might be able to agree on. He knows that they don't plough the streets here.

Mr. Speaker, it's frustrating to sit here and listen to these NDP members who want to be negative all the time. They promote Manitoba as the salvation of Canada. Well, I'm going to get into Manitoba a little bit later, and Australia. I could give you some quotes about those areas.

Mr. Speaker, if they want to talk about jobs in British Columbia, why don't they talk about the Whistler area? This party, the NDP, knocked the money that was given to support Whistler. Whistler has created hundreds of jobs for British Columbians. They would have liked, a few years ago, to have seen Whistler go broke. They walked around....

AN HON. MEMBER: Whose riding is that in?

MR. REYNOLDS: Whistler happens to be in my riding, Mr. Member. It's one of the greatest ski areas in the world. I've been up there a number of times visiting my constituents this winter and visiting the Americans....

AN. HON. MEMBER: It's second only to Whitewater.

MR. REYNOLDS: No, I have to disagree with you. Whitewater is a great skiing area, but it's second-best to Whistler. Whistler is the mountain that we've got in British Columbia that is second to none in Europe or the United States. The development that is taking place there.... The people who are working there just do a phenomenal job of promoting British Columbia. If you go and visit Whistler any day now, there's great spring skiing after a foot and a half of snow this weekend.

Interjection.

MR. REYNOLDS: They still have powder snow in Whistler also. I don't want to compete with you in that area, because I think all of British Columbia is a great skiing area. But Whistler is an area about which this party, the NDP, knocked the job that this government did. They like to hammer away at Whistler and the investment that this government put up there.

Last summer in Whistler, with the promotion that is going on there, the hotels were operating at near capacity on most weekends. The golf course was full. When that great convention centre opens this June in Whistler, Whistler will be a year-round resort where it will be very difficult to find a hotel room, and there will be thousands of jobs for British Columbians in the Whistler area. That's another positive aspect to what this government is doing to build up a tourism industry.

As we all know in this chamber, Mr. Speaker, we can talk about mining, forestry and all the other industries. There is high unemployment right now in forestry and mining. That's not because of this government; it wouldn't matter if this government or the NDP was in power right now. With the world markets, forestry and mining are at a low ebb, and we would have high unemployment. In fact, if you go to Manitoba, which this opposition talks about all the time.... If you talk about unemployment in Manitoba.... They talk about how great it has been there. I just got the figures for Manitoba, and unemployment in Manitoba is up to 43,000 unemployed; there were 48,000 last year and 42,000 the year before. In the last year, 1981, when there was a free enterprise government in Manitoba, there were 29,000 unemployed in that province and 27,000 the year before. Unemployment has been on the increase ever since the Manitoba government changed over to the NDP. If they want to be realistic, and talk about....

Interjections.

MR. REYNOLDS: Mr. Speaker, the NDP wants to sit here and argue percentages, but they don't want to argue jobs for people. They don't want to look at the direction that this province is going in: building a tourism industry that will be second to none in Canada; where unemployment will drop drastically during Expo and after. They don't want to talk about that. They want to talk about how well their government does in Manitoba. Manitoba is in such bad shape that there will be a replacement there very shortly. And it will be a pleasurable day in this House when there are no NDP governments left in Canada.

I'll talk about a few more positive things — all the positive jobs that are being created. It certainly bothers them, Mr. Speaker, when you start to give them facts and information about Manitoba.

MR. REID: They don't like the facts.

MR. REYNOLDS: They don't like the facts and they don't like the positive jobs you can talk about.

The International Electronics Corp. on Vancouver Island — there are hundreds of new jobs that weren't there last year. If their research comes up with some programs, there could be tens of thousands of jobs.

Interjection.

MR. REYNOLDS: Here's a member who wants to yell about Dynatek. Dynatek went the free enterprise route. The guy couldn't raise the money, and he went down the tube — that's the way free enterprise works — but International Electronics didn't. I guess the NDP would have funded Dynatek; not only would the investors have lost their money, but the government would have lost their money also.

Newtec Industries is another company in Vancouver. It started out last year with two or three employees, in the riding of Burnaby. Right now they have 40 or 50 employees working double shifts in the high-tech industry. I was at their annual meeting the other day, and they were telling us that their sales, which are about $4 million now, will be rising to $40 million or $50 million over the next few years. It's a new industry; it's high tech. Their researchers have discovered some microchips that are going to be sold around the world. It's going to employ hundreds of people in British Columbia.

They don't want to talk about Moli Energy — the new battery. I think it's out in one of the NDP ridings. It's a new

[ Page 5436 ]

industry that's going to employ hundreds of people in British Columbia. It's an industry encouraged by this government.

Boats in Kelowna. The NDP members don't want to cheer on those young entrepreneurs up in Kelowna — 25 years old. They started building houseboats at the age of 22, and are now shipping trainloads of boats back to eastern Canada. I understand they're now going to start shipping trainloads down to the United States. I understand they employ in excess of 150 people in their plant. Two young entrepreneurs, both 25 years of age, who didn't come running for any assistance; they did it on their own. They're selling a quality product.

Those are new jobs. And those are the types of industries that we have to create in British Columbia. If the NDP would only understand that these are the types of jobs that must be created in Columbia if we're to make sure we don't run into these problems again in the future.

I might also mention that in the mining industry the budget that the minister has brought in will encourage jobs around this province. Byron Creek today announced an expansion of their coal-mine in Elk Valley today with 250 construction jobs. That's 250 more British Columbians working in the construction area, opening a mine that's going to employ hundreds of other people in an area where unemployment is high. These are people that like the budget that the Minister of Finance has brought in and are going to get back working because this government has had the right policies. We're not negative, Mr. Speaker. Certainly we know we're not perfect. No government is ever perfect. Certainly, Mr. Speaker, if you listen to the NDP right now you'd think we had three perfect years when they were in power. I go back and read the headlines: they don't really read much different than they read now. All governments have problems, but this government took leadership in Canada when times were tough, and this government is taking leadership now in a partnership program that's going to put people back to work and make British Columbia a better place for you and all our children.

Interjection.

MR. REYNOLDS: I'll tell them about education in a minute; I see our friend the critic for education saying we have to talk a little bit about that. I want to talk about other projects that the NDP spend all their time knocking.

Northeast coal. We sit here and listen to member after member talking about how terrible northeast coal is for the province. Well, I might suggest to all those members of the NDP that they go visit that area and talk to the people who work in that area. We just announced this month a new elementary school for 250 students in Tumbler Ridge. That's progress in northern British Columbia. Those 250 children have parents who are working and paying taxes and producing a product that we can ship to Japan that will make millions of dollars for British Columbia. But we haven't heard anything from the NDP about northeast coal except about how it's bad for British Columbia, how this government sold out British Columbia. Ten years from now when the population in those areas has increased even more, these NDPers will be maybe saying: "Oh, it wasn't a bad project at all." But maybe they'll find something wrong with it. Maybe the school won't be large enough and one of them will have to get up and ask some questions about how we can expand the school in Tumbler Ridge to make sure the children there get a proper education.

I want to also talk about the Challenge 85 program. The NDP talks about jobs for young people. This government is going to invest $30 million this summer in 17,000 young people and create some work for them; 17,000 young people will know they have a future in British Columbia. Why aren't the NDP getting up telling us all the positive things about that program? That's one of the frustrating things when you have to listen to this negative debate. All they want to do is attack. We've heard about all this cooperation the NDP talks about. It wouldn't be so bad if they would say: "We recommend changes in certain areas, but your Challenge 85 program for young people is a good program and we support it." We haven't heard that. I think the young people of this province would be encouraged if they heard the NDP get up and say: "We encourage this government. We think they're doing a great job in this program for young people and commend them for it." But no, Mr. Speaker, instead of giving any praise at all, they just don't mention it. I think that's one of the problems we have when we talk about consultation and how we're going to cooperate in this House. It might be nicer if the opposition took a different tack when they're talking about these types of programs.

Mr. Speaker, in the last few days we've heard a number of members from the opposition get up and talk about education, specifically universities, because we've had a couple of people leave this province for higher-paying jobs. I said to myself: well, anybody can leave for a higher-paying job; I think a number of people do it, and they might not necessarily go outside the province to get that kind of a job. So I had my staff phone the universities and ask them how many professors might have been hired in our different universities last year, and where they came from, because I thought it might be an interesting figure for a party that wants to talk about the outflow of our members leaving British Columbia. The figures were quite amazing. At the University of Victoria, nine faculty were appointed for this academic year, four from within British Columbia and five from outside. So five professors came to the University of Victoria this year from outside British Columbia because they like the university, the quality of the education and, I assume, the possibilities for the future in British Columbia. Simon Fraser: five faculty hired this year; three from outside British Columbia and two from inside. Even at Simon Fraser the majority of the professors hired this year came to us from outside of British Columbia.

[3:45]

The second member for Vancouver East (Mr. Williams) mentions that they like the climate. I would not doubt that at all. We've got the best climate in Canada, and that's why this government's promoting tourism.

MR. REID: Manitobans come here too.

MR. REYNOLDS: I think it goes to point out the argument that the NDP use, that they're leaving this province. The majority of the professors hired by our universities this past year came from outside of British Columbia. The University of British Columbia hired 53 new professors this year, 23 from British Columbia and 30 from outside British Columbia.

Mr. Speaker, I would imagine some of them are coming from Manitoba, but the majority of the professors hired at our

[ Page 5437 ]

three universities this year came from outside British Columbia. I think that's something the NDP should look at. Sure, they can use the politics of the day: the president of UBC quits and a professor at University of Victoria quits. It makes big news. But what about all of those professors that came to British Columbia from outside of British Columbia because they know we're a growing province and they like the universities they're coming to. The professors that left here.... Where is the statement on how much money they left here to get? Sure it's easy after you've nailed down your new job. You go to Calgary and you sit down and you sign the contract for a pay increase, and then come back here and say: "I'm leaving because we've got a lousy government." Well, if he had that many principles, why didn't he resign when he felt that way and then go look for a job? Instead, they go out and sign up for the job, and then come back and announce they have quit. That's easy to do.

If we're going to debate these things in the Legislature, we have to be prepared to offer all the facts. I don't think we're getting all the facts from the other side, especially on the education issue. That's why I wanted to bring those figures up about people moving to British Columbia. People are moving to this province because they know what this government is doing with Expo 86 coming up.

The NDP talk about jobs. If this government didn't have the foresight to start Expo.... Not many people remember that when it started it was going to be a small fair. It's grown into one of the largest world's fairs that we've ever had. We should be talking about the fact that the Chinese, the Russians and the Americans are going to be there with large pavilions. It's the first time in the history of a world's fair that those three major countries will be on the same site at a world's fair.

This world's fair will bring tourists to British Columbia. The infrastructure that we're building around it will create jobs for now and also tremendous jobs for the future. I might suggest to our friends in the NDP — and I'm sure the minister responsible would make the time available for them — that they go take a tour of the Expo site. While they are there, they should go down and take a tour of Canada Place, the federal government's participation in Expo. I don't know of anybody who could go through that facility in one day and not come away being proud of what we're doing in British Columbia and proud of the infrastructure that we're building in this province to make sure that tourism, which is going to be our number one industry in this province, will be well served and that the tourists who come to this province will be well served.

I would very sincerely suggest that to our New Democratic friends. Go and take a tour, because it is something to see. If you stand up in the Canada Place pavilion and look out over the north shore mountains out to the west coast of Vancouver Island, you can see the Expo site and see the construction workers working. This gets me excited sometimes when I see all those thousands of people working on those projects that the NDP are knocking. And they say that they're the party of the worker.

That's why I guess the NDP hasn't been the government, except for a brief glimpse in the history of our province. They talk about being a party of the workers, but they're knocking every major project that this government has started in this province that employs the workers of this province — a province with one of the finest construction industries in all of Canada, if not North America. You can see that by the fine facility we're building down at Expo and at Canada Place. You can see it, Mr. Speaker, on the ALRT — one of the finest rapid transit systems in all of Canada, if not North America, one that's fanning out all over the lower mainland.

Just today I got a brochure in the mail and a letter from Port Coquitlam and Coquitlam. They want the ALRT coming over their way. That council isn't made up of only Socreds; they have some NDPers there. But they can see the benefits of the jobs that this government is creating to build an infrastructure not only in Vancouver but in Victoria that will be able to handle all the tourists that will come to this site and all the areas around this province. I understand now there are about 75 communities that have signed up to participate at Expo. When people come to visit the lower mainland during Expo, they'll stay there for three or four days, but they'll want to fan out around the rest of the province and see beautiful British Columbia.

MR. REID: Even people from New Westminster are coming.

MR. REYNOLDS: I'm sure they'll go to New Westminster. One of the finest junior hockey teams in all of Canada is in New Westminster. Even if they're not playing there in the summer, New Westminster is one of our finest cities — a great place to tour. The ALRT is going to stop there, which will probably benefit that area. There are so many areas that we can be positive about.

I listened to all this debate from the NDP members here, talking about how great Manitoba was. Gary Filmon, who's the MLA for Tuxedo, sent me a little brochure — we all send these mailers out to our constituents — and when I read his brochure I said: "Gee, I should get back in the House and listen to some more of these speeches from the NDP, because he's not saying the same thing they are." I mean, I hear it's so great from the NDP Just let me give you a few statistics from Manitoba, this province that is doing so well under the socialists, and the one that we have to sit here and listen to our friends in the NDP about all the time — because it's the only government left they can talk about. It won't be there for very long. The next election in Manitoba is coming up in the very near future. They've stopped talking about France and they're going to stop talking about Australia pretty soon, because they're doing pretty poorly there. There won't be anything left to talk about. But then they'll have to sit down and maybe reappraise what they do in this House and maybe start to think that they should cooperate a little bit more with this government in building British Columbia. If they don't get that way, after the next election they'll only have half a dozen seats left here.

The number of farm bankruptcies in Manitoba has gone up. When the free enterprise party was in power — the Conservatives — they averaged about 14 a year. Under the NDP they've gone to 30 in '82, 62 in '83 and 62 in '84 — a phenomenal increase in farm bankruptcies. Who can believe that this is the great Manitoba government that we hear about from these members?

Unemployment is just about double what it was when the Conservatives were in power in Manitoba. The NDP talks about hydro rates. When the Conservatives were in power.... It has just been a straight-up-line chart; they've gone up every year since the NDP have been in power. Everywhere in this brochure from the Manitoba Conservative

[ Page 5438 ]

member I read that things in Manitoba are terrible. Bankruptcies are up. Unemployment's up. And let's look at the 700....

Interjections.

DEPUTY SPEAKER: Order, please.

MR. REYNOLDS: I hope you'll take some of my time off for those interruptions from the member for Manitoba — for New Westminster (Mr. Cocke). He should be in Manitoba. But he says it's nonsense.

Manitoba got $780 million from the federal government. Lloyd Axworthy, to save his seat, gave $780 million to Manitoba last year. Manitoba also received $480 million under the equalization program, a program that this government is a contributor to. If we had received the same benefits as the government of Manitoba, we wouldn't have a deficit in this province.

Interjection.

MR. REYNOLDS: He says nonsense: $780 million to the NDP in Manitoba from the Liberal government to save a seat, and $480 million in equalization payments under a program that every man, woman and child in this province donates to — to keep that socialist government blundering along and messing up the province of Manitoba.

It's been a pleasure to speak on this budget, a budget that means partnership in this province, progress in this province, and I look forward to debating the bills that are coming from the budget in the next few weeks.

MR. BLENCOE: Well, it's quite evident from that last government member that our positive message and our positive ideas and our agenda for the future of British Columbia — that British Columbia deserves better than this government — is getting through, because all they can speak about is what we're going to do and what we're saying is happening in British Columbia; not one word about their so-called positive budget. Clearly they are reacting to what we're saying, and the polls are indicating to them that they are in serious trouble. British Columbians are fed up and want a new government in the province of British Columbia. We'll be pleased to give them that in about a year's time, when the election is finally called in the province of British Columbia.

Mr. Speaker, that last member indicated the desperation of this government. All he could attack was what we're saying as an opposition about what should happen in British Columbia. The people of British Columbia know that we have the positive agenda for what should happen in this province. We know what real cooperation is all about, and we know that we can work with British Columbians and establish a British Columbia that all British Columbians can be very proud of. British Columbians today are not proud of what this government has done to their beautiful province. They want changes and they want them as quickly as possible.

I want to talk this afternoon about municipal issues, the theme of so-called cooperation and what I think is happening to municipalities — why I think they should be drawn into the process of reconstruction in British Columbia. Clearly this government has not recognized in this budget the long-term fiscal problems that municipal governments are facing today.

Interjection.

MR. BLENCOE: If the minister returns to his seat, perhaps we would respect his comments; but if he makes them from the incorrect seat, Mr. Speaker, I'm sure you will take the necessary precautions.

Municipalities today face serious fiscal concerns. They need a government and a Minister of Municipal Affairs who is prepared to sit down and sincerely take a look at their longterm financial problems. The Union of B.C. Municipalities put out an excellent brief on their fiscal and taxation problems. Unfortunately, this government has not taken their concerns to heart, because they still are not applying themselves to the deep-seated fiscal concerns of municipalities. The fact is that property tax is still the major source of revenue for municipalities; unfortunately, the statistics indicate that only 44 percent of all property tax is now applied, or can be applied, to municipal purposes. This means that other jurisdictions — other levels of government and provincial departments — are more and more putting the squeeze on local government revenues. This government is refusing to deal with the fiscal squeeze that municipalities currently face.

[4:00]

[Mr. Ree in the chair.]

The tax changes outlined in this budget only tinker with the problem of securing long-term fiscal stability for local government. They do not deal with the serious inflexible costs that municipalities face. They do not deal, for example, with the rising police costs or rising fire costs. They do not deal with how the provincial government is going to share in those important areas of municipal responsibility. The minister doesn't talk anywhere in his deliberations about the serious infrastructure problems that local municipalities are facing, or the reversal of formulas by this government in terms of cost-sharing. In short, this government continues to abandon local government and does not come to terms with the fiscal problems local governments face.

It is time this government recognized that to deal with the deep-seated problems — particularly fiscal problems — local governments face today, they have to develop programs in true partnership with local government. They have to develop a real cooperative framework for meaningful dialogue between the provincial and municipal governments. The tinkering we have seen thus far can only mean that in the long term the property owner who is trying to hang on to their home is going to have to pay for those tinkerings. The tax relief that we have seen put forward thus far will in time always come at the expense of the individual homeowner. We've got to look at the real problems that local governments face and not just tinker with the system.

It's time we raised the importance of local government and its problems to a top priority in British Columbia. I think we need a proper municipal-provincial dialogue on the exploration of progressive tax systems that can be utilized by local government. I've talked about it many times in this House; I won't go into those details today. But I will say that local government cannot continue to rely on real property tax in the long term to ensure that its infrastructure is maintained and that our communities, towns and villages remain healthy. This government is not applying itself to that problem.

I would remind this government once again that the local governments of towns and villages are the basis of our

[ Page 5439 ]

province and our communities. If they are not in good shape, if they are not being properly supplied with the infrastructure, resources or revenue that they need to ensure they are healthy, then the whole British Columbia infrastructure — socially and financially — is in jeopardy.

Mr. Speaker, I have already suggested in this House that there be real dialogue with local government, not in the way that we have seen it in the last few weeks. In my estimation, the provincial government has to really analyze what cooperation with local government means. Be sincere in the application of that term. What we saw only two weeks ago, calling all these mayors, aldermen and the chamber of commerce.... I would note that the workers of this province, the representatives of labour, organized or unorganized, were not asked to participate in that so-called partnership conference. The chambers of commerce were asked; most of them didn't bother to show up, because they knew they could read it in a press release. But if this government is serious about cooperation, then it must tell those thousands of elected people what they're going to do before they announce it. It must develop those programs in consultation with the UBCM, with the mayors, with the regional associations, and really be sincere about developing a cooperative framework for whatever their agenda is. Cooperation and partnership means two people in a partnership, or two organizations, or two distinct groups. We are not getting that in the province of British Columbia. The minister made it clear what he means by cooperation when he said to all these 300 or 400 people who did come to that gathering: "If you're not interested in this package, we don't want you to take up our time."

AN HON. MEMBER: Shame! Who said that?

MR. BLENCOE: The minister said that. It's on the record. "We don't want to bother with you. If you're not interested in what we have come up with, we don't want to talk to you." Every single person heard that statement from the minister. He categorically said: "If you're not interested in our package, and what we view cooperation and partnership as all about, we don't want to talk to you." That's what he said. Now what is that in terms of a cooperative framework? That's not cooperation; that's coercion of local government. The minister said, and everybody heard him: "Take it or leave it. We have developed this in the back rooms. We haven't discussed this with any UBCM executive in terms of any details or the implications or the extension of your programs. We haven't looked at the fiscal implications of this program with local government. We've just come up with it and we're dumping it here in the Newcombe Auditorium. Take it or leave it. If you don't want it, we don't want to hear from you." What's that going to do for cooperation in the province of British Columbia? What should have happened was a meaningful meeting of the minister and his staff and the UBCM and the area associations and key mayors, and they should have....

MRS. JOHNSTON: Ten years later.

MR. BLENCOE: Not ten years later, Madam Member.

They should have said: "Look, what are the common problems? What are the common issues? What are the implications if we do this? What is the short-term plan? What are the long-term directions and fiscal problems of local government that we can come to terms with?" That's cooperation: a meaningful dialogue when two parties are recognized, or the senior partner says: "Yes, you are a partner." But we didn't get that with this particular approach by this provincial government.

There was no consideration in this so-called cooperative package for the built-in problem of what this program will do to those areas that don't have revenues to be able to participate. What it will do and what it is about to do is play off rich against poor. It will aggravate the economic disparities between municipality and region. There was no application of equal treatment of all municipalities and local government in this particular program. That's a critical factor: no application of equal treatment or universality of a program, a sharing. If there are wealth, resources, revenues or programs to be shared, how can we do that in a universal application, Mr. Speaker, that's fair to every single municipality, town or village in the province of British Columbia? This so-called cooperative framework breaks everybody up. There is not an equal treatment of each area. What it does — the president of the UBCM and others have said it — is put one municipality against another. I already know of a number of municipalities who are looking at this particular package....

MRS. JOHNSTON: There's nothing wrong with competition.

MR. BLENCOE: Competition, yes, but you see, Madam Member, when you've got the fiscal health of all communities to consider, you can't put one up against the other. You've got to have equal application, to be able to share in your particular program. What's going to happen is that certain municipalities with reserves, which may be considerable, are going to be able to participate. But what happens to those municipalities that have struggled through this recession and have been waiting for some equal sharing of revenues? They are not going to be able to participate, Mr. Speaker. The point I make is that when you are dealing with municipalities and local governments, you don't go through the back door and create all sorts of disparities or programs that not everybody can share in. You want to apply them equally, so that all can participate and all can benefit. This program certainly does not do that.

As a matter of fact, what's going to happen over this particular program — and I'll go into detail when the bills get called — is that you will start discount wars between various municipalities over tax incentives. It's already starting. A number of municipalities are getting caught up with that. Local governments have already indicated that a majority of them do not have the financial resources to get into that kind of discount war over tax relief. We have to look at a positive way rather than a negative, way of trying to restore the health of local government.

I believe that the Ministry of Municipal Affairs and the government should be dedicated to helping all municipalities, not selected municipalities. I would suggest that if they are sincere, they will go back and rewrite their agenda and develop a methodology — which I am going to provide ideas for in a minute — that allows for the development of a cooperative framework that's designed in consultation, in cooperation with local government, the UBCM and others. Don't bring a package down at 12:00 noon on Friday and tell everybody: "This is it. This is the fait accompli. If you're not interested, we don't want you to waste our time." In other

[ Page 5440 ]

words, go away. That's no framework. That doesn't end confrontation in the province of British Columbia. Our party is dedicated to ending the confrontation in the province of British Columbia; and this government, through its various municipal packages, will create confrontation and conflict with local government.

The general health of our communities and our municipalities is an inducement to investors. I think we all agree on that. The point I want to make is that by only tinkering with certain components of what's important in local government at the community level, you are not necessarily going to create the inducement for the industries to move in. You can't just say, "We'll give you a few tax incentives or tax relief, " unless those communities are in general healthy. It's a known fact that industry moves into a community when the other components of that community, necessary components, are healthy — when the education system is in good shape, when the company knows that its staff and professionals are going to be able to take advantage of a good school system. The education system must be in good shape. A tax relief of $30,000 is not going to induce a major corporation to move into a particular community. You've got to have a good education system. You've got to have good cultural amenities in place. You have to have good libraries. You have to have good recreation centres. You have to have a community that's healthy and a provincial government that's prepared to support the overall health of a community. Our universities, in terms of major corporations, must be healthy. Those companies have to know that they're going to benefit from topnotch people working at those universities. When they know those universities are being cut back — and we're losing some of the best people in this province — that is not an inducement to investment.

The point I'm trying to make is that just tinkering at one end of the system, without taking a look at the global impact of the three years of this government on all those necessary components of a healthy community — unless you mend those, unless you build those up....

[4:15]

Mr. Speaker, as a consequence, I believe the provincial government must make the rebuilding of municipal infrastructure a priority. By that, I am initially saying that the overall infrastructure, which includes the educational system, the cultural system, the health system and the health enterprise, but specifically to my debate today, municipal infrastructure in terms of the plant and all the things that go in to make a municipal operation successful must become a priority.

Mr. Speaker, it's a known fact now, and all the studies indicate it, that municipal infrastructure in all of Canada but certainly in British Columbia — that is the plant itself, the sewers and the storm drains, the underground services and the roads and various things — are in serious trouble. Unless that basic ingredient of British Columbian society is healthy, then we've got some major problems down the road.

Rather than come through the back door on tinkering with the tax system, I would like to see us come through the front door and look at the overall municipal infrastructure and put our money up front. I am of the opinion, Mr. Speaker, that we should pursue joint funding in this venture with the federal government on the same level as other ERDA subsidiary agreements. I think the status of municipalities and their problems and their concerns and their importance in British Columbian society has to be at a higher priority. I think it's time to start talking about a provincial-federal agreement on municipal infrastructure rebuilding. I think it's time to talk about a new deal for municipalities in terms of infrastructure rebuilding in the province of British Columbia. We can talk about ensuring that other components of British Columbia society are enhanced or maintained, but unless the basic grassroots level of our society in British Columbia is maintained properly, we are putting our resources on weak ground.

What I'm saying is that all the provincial effort in terms of rebuilding British Columbia in time ends up at the local level. When you have municipalities that are currently based on quicksand in terms of their infrastructure, and municipalities with services in serious jeopardy, then what you apply in terms of provincial funding is on shaky ground.

Mr. Speaker, I believe this House and the current government should seek a federal-provincial agreement on rebuilding municipal infrastructure in British Columbia. It has to have the same priority as some of the other agreements we get with the federal government. If we're talking about job creation, here is a major investment opportunity that not only the public sector but also the private sector could participate in.

We've got to come to terms with the serious infrastructural problems of local government. I contend that this government is ignoring that fact. It's ignoring the very serious, detailed and deliberate briefs that have been put out by the UBCM. They are really an attempt to bring to the attention of this government that they've got to come to terms with these fiscal concerns of local government. The current partnership, or whatever this cooperative or uncooperative framework is that has been dreamed up, does not come to terms with those issues that I have brought up today.

MRS. JOHNSTON: Have you read it?

MR. BLENCOE: Oh, I certainly have, Madam Member.

Mr. Speaker, cooperation on these very issues is essential. Unfortunately, cooperation cannot be turned on and off like a tap. We saw an attempt by this government to entice local government to the view that they were indeed serious about their concerns. Unfortunately, Mr. Speaker, one week later, which was last Friday, we saw what cooperation means to this government with Bill 30. Without going into the details, I have to say that that particular piece of legislation really shows what this government means by cooperation. Without any dialogue, without any discussion.... The minister is very nervous about this issue; you bet your bottom dollar he is.

HON. MR. CURTIS: On a point of order, Mr. Speaker, the member is canvassing a topic which is the subject of legislation before the House.

Interjections.

DEPUTY SPEAKER: I'm sure the member will direct his comments to the budget and will not dwell on present legislation. He'll have his opportunity to debate the legislation at a later date.

MR. BLENCOE: Thank you, Mr. Speaker. The point I'm trying to make is that this government has based a lot of their budget upon the concept of cooperation with local government. The point I'm trying to make is that two weeks ago we

[ Page 5441 ]

had this very expensive announcement, and 35mm advertising cameras were rolling for their new ads. And then one week later we saw what cooperation was all about: they moved in and took over the staff of the Islands Trust so they can manipulate the future of the islands. That is what cooperation on a municipal level is all about. That's what cooperation is to this government. It's like moving into a school board — which we think the government may do — and saying to the trustees: "Go away. We're forcing you all out. We're going to take over everything." That's what that move was all about, Mr. Speaker.

How can this government tell the people of British Columbia in those municipalities that they are serious about cooperation when, with a swoop of a pen, they announce that they're going to take over the staff of a group of people who were duly elected by the residents on the Gulf Islands, and are going to take away any decision-making power they have? Is that what cooperation in the municipal area is all about to this government? That cynical move only entrenches the confrontation between provincial government and municipal government. It does not allow for intelligent, rational — I know these words are alien to the government — dialogue between local government and the provincial government. They move in, take over the staff, come under the jurisdiction of the staff, and now all the plans and the future of the islands will be in the hands of a politician. Is that municipal cooperation, Mr. Speaker? The Minister of Finance may wish me to stop speaking about this, because I know he's very nervous about this issue. I contend that that is not cooperation; that is coercion.

DEPUTY SPEAKER: Order, please, Mr. Member. In the budget debate there is quite wide latitude for members to debate the budget, but there is no provision to debate legislation that is before the House. You may debate that legislation at the time it is on the order paper but not at this time; we are in the motion on the budget debate.

MR. BLENCOE: The point I'm making is that any semblance of cooperation with local government was thrown out the window last Friday. This government clearly indicated what it feels about local governments and duly elected people who make decisions about their own environment. They moved in.

I would hope, on a positive note, again, that the minister — I've already asked him to do this — will second a motion that I have on the floor of this House for the establishment of a meaningful process of dialogue and cooperation with local government. I'm calling for the UBCM and mayors and regional districts to meet with the minister and the Select Standing Committee on Municipal Affairs and Housing to lay out a detailed economic reconstruction program at the local level. That's the only way we can get this province rolling: to have true, meaningful dialogue with local government. Currently we don't have that. I hope the minister will listen, because the municipalities want cooperation and don't want confrontation.

MRS. JOHNSTON: It is with pleasure that I rise to support the budget brought down by this government. It is a budget which, in my opinion, will stimulate economic renewal and the creation of jobs. This budget has many strengths. One, of course, which is important to me is that it meets the concerns of the people I care the most for, the people of Surrey and White Rock.

With a population of 165,000, Surrey is the fastest-growing municipality in Canada. It is also, in my opinion, the fastest-improving community in Canada. Surrey will continue to advance because people in our community work together. Not only do people work well with people there, but also the municipal governments work well with the provincial government, contrary to what was put forward by the previous speaker. That existing partnership stands ready now to take on a whole new depth and meaning, as the provincial municipal partnership act proposed in this budget comes into full being. That proposed partnership will provide for a cooperative arrangement between the province and Surrey, as well as other municipalities, which will directly benefit in the development of renewed economic strength and the creation of new and, most importantly, meaningful jobs. Specifically the partnership act will hopefully lead to the signing of economic partnership agreements between the municipalities of Surrey and White Rock and the Ministry of Municipal Affairs. These agreements will lead to a variety of measures designed to stimulate incentives for investment and job creation.

Tax relief will especially help new and small businesses. Municipalities will be able to reduce property taxes....

MR. COCKE: On the same point of order that was raised by the Minister of Finance (Hon. Mr. Curtis), the member for Surrey is developing an argument about a bill that's before the House.

DEPUTY SPEAKER: The member for Surrey, I am confident, is aware of the restriction on legislation to be debated on the budget speech.

[4:30]

MRS. JOHNSTON: Mr. Speaker, I am referring to items taken from the budget.

The municipalities will be able to reduce property taxes on new improvements on industrial properties up to 50 percent. This tax relief will not cut into the existing level of municipal tax revenues. We are looking for new developments. Certainly for its part the province will reduce the school tax on new improvements on non-residential properties located in participating communities and non-municipal areas, to a maximum of 50 percent over the five-year period. The maximum benefit will be gained by those companies who make their investments as soon as possible.

The budget further goes on to tell us that the participating municipalities can also waive or reduce business licence fees to a maximum of $3,000. This will certainly give a big boost to small companies trying to get started up on limited resources.

In order to make the best possible use out of the tax incentives, the municipalities need to have an overall plan for economic development, and to this end the provincial government will offer grants to fund up to 50 percent of certain costs incurred while planning such economic strategies. Both business and labour will participate fully in the formulation of these plans.

The economic strategy plans will be brought forth in the framework of local community organizations for economic

[ Page 5442 ]

development. The province will help to support these community organizations through meeting 50 percent of the salary and operating costs up to $25,000 of municipal economic development officers. It will also provide up to $1,000 to support local volunteer committees, up to $5,000 for projects promoting investment in the municipalities, and $5,000 to undertake market research projects designed to find new and expanding markets for products and services based in the communities. As well, the assistance will be given to ensure municipal participation in trade missions abroad.

These measures, Mr. Speaker, are strong proof of the provincial government's commitment to the economic health of our municipalities. I wait with great anticipation for the implementation of the partnership agreement between the provincial government and the municipality of Surrey and city of White Rock. Certainly we will see renewed economic confidence and job creation. This prospect, as well, has individuals and families in my community looking forward to the provincial-municipal partnership as a very positive step toward economic renewal.

Surrey and other municipalities will see real benefits as well from other tax relief measures which supplement and support the initiatives in the partnership act. One of them which is especially important to many people in Surrey and White Rock is the proposed legislation which will permit individuals who have owned and occupied houses or other residential property for ten years or more to apply to have their property assessed at its value as a residence, not at its market value for some other use. The people in Surrey–White Rock who live next to areas undergoing economic redevelopment will especially see the result of this measure, which demonstrates the concern of the Minister of Finance during his tour of the province in his development and tax hearings. He has responded to concerns expressed by many of my constituents who are long-time residents in this area. This provision will greatly benefit the long-time homeowners in areas such as Surrey and White Rock. No longer will they see themselves taxed out of their homes because of high-density development proposals for their immediate areas. Soaring property assessments and the prospect of hefty tax increases prompted many Surrey homeowners to appeal to courts of revision in record numbers. Projected tax increases of $1,000 or more had raised fears that they might lose their homes. Now this measure has brought great relief to the homeowners of Surrey and White Rock.

[Mr. Strachan in the chair.]

Another measure which will help Surrey is the exemption of the ALRT system from property tax. This will help to keep down the cost of this exciting transportation system which will prove to be a boon to Surrey as it will now extend into our community. Indeed, Mr. Speaker, ALRT has aroused a great deal of public interest and support in Surrey, as I have stated on many previous occasions. Nearly 1,000 Surrey residents attended the public meetings on ALRT which were recently held in Whalley. ALRT will cross over the Fraser River in early 1985. The new bridge being planned is one of the most advanced suspension transit bridges in the world. The eight new ALRT cars added to serve Surrey will run along the planned six kilometres of track through the community and will stop at two stations, including the modem Scott Road station. The ALRT service will be able to transport Surrey residents to jobs and activities in Vancouver in 33 minutes

Certainly the member for New Westminster (Mr. Cocke), who unfortunately has left his seat, should be thankful that the system is being extended into Surrey because of the probable bottlenecks in his community if it is not extended. This will definitely improve the economic climate of both Surrey and Vancouver.

The investment in ALRT will also benefit Surrey through job creation. In phase 1 of ALRT construction, 5,500 direct person-years and 11,000 indirect person-years of employment will be created. Somewhere between one-quarter to one-third of the ALRT jobs will be held by Surrey residents. This includes the workers at Surrey Iron Works, working on that company's $12.6 million contract with ALRT. Local Surrey businesses will have a great deal to look forward to both in the access to and from Surrey provided by ALRT and in the many benefits connected directly and indirectly with the ALRT.

The same is true as well for Surrey and Expo. Several Surrey companies have contracts for work at Expo. For example, Onyx Contractors has a $4 million contract for food and merchandise buildings at Expo, and Surrey Iron Works has a contract to provide foundations for the monorail and steel for the geodesic dome. Most of the Expo work is with subcontractors in carpeting, flooring and general hardware subtrades.

The work for ALRT and Expo is stimulating spinoff jobs and strengthening existing industries. That economic activity will, in the long term, relieve the pressure on our provincial finances and our social services. This, in turn, will bolster all government programs. We already have more room to manoeuvre than we did three years ago.

The government has shown considerable common sense and maturity in dealing with the effects of the global recession that has struck British Columbia. That good judgment is starting to pay off now in our ability to take the steps necessary to renew with firm commitment our provincial economy. Mr. Speaker, that good judgment is paying off right now in the bold and productive measures contained in this budget.

But, Mr. Speaker, I would be remiss if I were to end here without stating plainly that common sense and good judgment has been exercised by many British Columbians. In my own experience I know that the municipal leaders and school board trustees of Surrey have done their best to responsibly meet the challenges we have faced so far in this decade. The same has been done by countless individuals and families throughout Surrey, and their efforts should not go unrecognized. Therefore I wish to take this opportunity to commend them and to encourage them to continue to show the wisdom and courage they have thus far shown.

You know, Mr. Speaker, we have been hearing regularly from members in the official opposition about the benefits derived by the residents in Manitoba. It's very interesting if we look through some of the recent newspaper clippings at the facts and figures to just point out some of the so-called benefits that have not been mentioned by members opposite. We have a newspaper clipping here from a recent Globe and Mail article. The headline is: "Manitoba Raises Taxes on Cigarettes and Gasoline." This, of course, refers to their recent budget.

That is not the point that I was wanting to make. In reading through the various areas of increase in the new Manitoba budget, one point stands out very clearly. I'm wondering if this is what the members of the opposition are suggesting that we do in British Columbia. It says here that:

[ Page 5443 ]

"Left untouched is a 1.5 percent tax on all payrolls in the province that was first imposed in 1982." This is in Manitoba. This is the government that is being held up to us as a fine example of how things should be done. A tax on payrolls of 1.5 percent.

AN HON. MEMBER: It's a job tax.

MRS. JOHNSTON: That's exactly what it is, Mr. Member. I don't think the people of British Columbia are looking for us to place a tax on their jobs.

The Manitoba government, which has been held up as an example on more than one occasion, changed their reporting presentations in 1983-84 in order to eliminate expenditures related to capital assets in determining their reported net operating deficit. This gives the impression that the deficit was $165.5 million in 1983-84, whereas on the previous reporting basis it would have been $428.9 million. I'm not suggesting that they're cooking the books, but it really suggests creative accounting, does it not? Creative accounting — that's what it is in Manitoba. The Manitoba government wrote off an investment of $51.3 million in Manitoba Forestry Resources Ltd., but they did not include this amount in their expenditures for the year. The item was shown as a prior year's adjustment; I guess they forgot it in the calculation of the excess of liabilities over recorded assets.

The accounting treatment of both these items is inconsistent in that the government has not recognized the items as expenditure for the purpose of determining its deficit for the year, but has included them in its cumulative deficit — more creative accounting.

Some numbers that I found very interesting: the British Columbia deficit for 1983-84 is equal to $355 per capita. I'm not saying that's good; in fact, I find it far too high. But the adjusted Manitoba deficit is equal to $455 per capita, $100 more per capita than in British Columbia. At March 31, 1984, Manitoba's cumulative deficit of $2,055.2 million was equal to $1,945 per capita. You should pay attention to that figure, Mr. Speaker. The corresponding figures for British Columbia were $485.5 million and $168 per capita. It's very interesting to have this type of bookkeeping, but it's also noteworthy to mention that Lloyd Axworthy — of course when he had a little bit of influence in the federal government — bestowed an estimated $780 million on Manitoba in various grants and projects. Even with all that federal help they still aren't able to pull it off.

I would like to conclude by saying that this budget is on the right path to stimulate the economic growth and job creation that will amply reward British Columbia and British Columbians, including those in Surrey and White Rock, for the determination and breadth of vision which this province has demonstrated to all of Canada.

[4:45]

MR. HANSON: Mr. Speaker, in the depth of a depression or a very severe recession — whatever you want to call it — the people of the province have had very high expectations of this government to produce something that would create employment. Unfortunately, that's not the case.

The present government says its budget will create jobs through corporate tax cuts. That's been spoken about by our debate leader on finance, and demonstrated to be the least efficient way of creating employment — certainly the way this government has proceeded in this direction. The budget promises $995 million of tax relief for corporations over the next three years. The one-year cost of these tax cuts in the third year is projected at $480 million. The amazing thing about this is that the Minister of Finance (Hon. Mr. Curtis) has admitted there are no strings attached to these tax concessions. If the province was going to take the people's money and try to generate employment, and give it in relief in terms of tax concessions to large industry, then surely they could have entered into some kind of agreements with the recipients of this largess to create jobs in areas where they are required.

The Minister of Finance says no jobs have to be created for our people to qualify for this money. That's certainly got to be the most inept way of entering into agreements with business — to allow that amount of tax dollars to be passed over in a redistribution of wealth without any guarantee of employment.

Mr. Speaker, you are aware that in our own region the unemployment rate is very severe. The other policies that this government has pursued have certainly aggravated the climate to such an extent that 25 percent of the working people in the province have decided, because of the reign of fear of this government, because of lack of security in their employment, to hold off, to not spend, to not let their dollars flow through the small business community and generate employment.

So the government is throwing taxpayers' money up in the air and hoping that some of it will land in the right spot and be picked up by someone — who may or may not invest in B.C. As has been pointed out by this side of the House during the budget debate, large companies could pay off debt, they could acquire other firms, they could do any number of things other than create direct new jobs with the benefits they are going to be receiving under this budget.

The New Democratic Party regards this as a very desperate gamble by a very desperate government. Some people might accuse Social Credit of gambling with the taxpayers' money. We do not make this charge, because we know the government stopped spending taxpayers' money long ago. They are now operating with the credit of the taxpayers, We are going increasingly into debt. The government is borrowing money, and as I stated, throwing it up in the air, hoping that it may have some benefit. But it probably will not.

The government is broke now because it pursued the wrong approach to the economy in 1983. Just as we began to emerge from the recession, the government started laying off and letting go and throwing fear into the entire public sector of the province. When I say public sector, Mr. Speaker, I am referring to the educational institutions, the health institutions, direct employees of government, the Crown corporations and so on — all of the people who are working for the public of this province, who number something in the order of 25 percent of the entire direct workforce.

Mr. Speaker, the other side of the House — the cabinet benches — doesn't have to believe me, but they certainly should believe the chief economist of the Conference Board of Canada when he said as much last year. He said that British Columbia's recovery began in 1983 in more or less normal fashion. But then people were asking: "Where did the recovery go?" The performance of the service sector was unusual in that output declined even as income and primary industry activity were showing signs of renewed vigour. The service sector would be one of the most sensitive indicators of recovery because it would be receptive to any demand when all of a

[ Page 5444 ]

sudden disposable income was released. But that didn't occur. So the first signs were broadcast in the service industry, despite the fact that primary industrial activity was showing signs of renewed vigour. The public sector restraint measures and the resulting "shell-shocked condition of consumers in the province" account for this atypical behaviour. This quote about how the performance was not being passed on to the service sector comes from Peter Gusen, Conference Board of Canada economist speaking at the Western Business Outlook Conference, in the Province for June 7, 1984.

Does the government really think that it can introduce tax cuts for certain B.C. businesses and never discuss how these will be paid for? Over 80 percent of the benefit of the tax reductions go to the largest of businesses. There is only about $80 million of the $480 million in the third year cost targeted to small business. Mr. Speaker, we hear over and over again how the government pays lip service to the fact that small businesses are really the employment-generating area of our economy. Yet only this tiny fraction of the tax concessions funds available will be available to small businesses. So they've got that particular formula well out of balance, upside down.

Who is going to pay? In typical Social Credit fashion, it is the ordinary British Columbian who assumes all of the burden. Gradually over time, Social Credit has been shifting the cost of education in the province to the local taxpayer. They shifted the costs for transit to the local taxpayer. They shifted the costs of energy, through the Crown corporations, through B.C. Hydro, and so on, to the individual residential property owner. So this is no different: tax hikes to individual wage earners. Those individuals will pay the tab. That is the Social Credit formula. It has always been the way, and it is accentuated in this budget.

The member for Nanaimo (Mr. Stupich), our debate leader on Finance and on the budget, pointed out in the debate that when you add the tax increases of the past two budgets, in terms of income tax, sales tax, room tax, restaurant meal tax, indexed fuel and tobacco taxes, to the increases in user fees, the accumulated effect of these tax increases in 1985-86 is estimated at $1 billion. Over three years it will exceed $3 billion — $3 billion in three years as added burden onto the individual taxpayers and the individual ordinary British Columbians; who do not own massive shares or large shares in the major industries. So the bulk of these taxes are to be paid for by individual wage-earners.

Another part of the answer to who's going to pay for all this is that people whose jobs have been eliminated by the government will pay the price. We hear a lot of bashing in this Legislature against the public sector, certainly against government employees and people in the education field. Social Credit likes to argue that they think people will believe that someone else is paying the price. They don't like it when the opposition points out that everyone pays a price for their inept and ill-conceived financial and fiscal policies. Job losses in general government service and in the education sector have a severe effect on the B.C. economy.

While the present government celebrates victory, job losses in the public sector cause job losses in the private sector. We often hear about the multiplier effect: when you create a job, it multiplies. For example, a job in the fishing industry, a fish boat, has a multiplier effect in the sales in stores, equipment, electronics, regulatory bodies, and so on. There's a multiplier effect. But there's a multiplier effect in a public sector job in the private sector. In other words, when the government eliminated a public sector job position, whether it be directly in the employ of the public service or whether it's a teaching or support job — a teacher's aide or a custodial job — there is a spinoff loss in the private sector.

To illustrate this, let me just say, for example, that there have been 12,686 jobs lost in the provincial government's service and in education combined. These job losses have led directly to the loss of a further 8,880 jobs in the private sector. Now they don't like to talk about that. They don't like you to know that when you fire a nurse or a biologist or a teacher or a bus driver, that that results in a loss in the private sector. They don't like to talk about that. What you're doing is withdrawing a certain amount of capital out of circulation, and that is not able to flow through the small business sector in durable goods purchases and other expenditures, and that is a direct loss in private sector employment.

The loss of these jobs has caused the withdrawal of income from the economy. The direct loss is estimated at more than $400 million annually. The total economic loss, as measured by the income multiplier, exceeds $1 billion annually. So the ill-conceived policies and programs of this government have led to a direct loss to the economy of $1 billion annually. The people who depend on those people doing their jobs will also pay the price.

Students at all levels.... Let me just stop and talk for a moment about education. The Socreds have cut school services by 25 percent since 1982, permanently damaging the prospects of all children in B.C. schools. B.C.'s government spent less on education in 1983, the latest year for which there are comparable figures, than any other Canadian province. Social Credit fails to grasp that the societies that make the best use of their economic opportunities are the ones with the highest standards of education. Social Credit also fails to understand that during periods of economic downturn educated people are best able to deal with the consequences of unemployment. These are facts.

By failing to appreciate the economic benefits of education, by their repeated attacks on schools, colleges, teachers, faculty and school trustees, the government is passing a very strong negative message about the value of education to all British Columbians and particularly our young people.

[5:00]

Mr. Speaker, I've mentioned before in this House that the one thing that cuts across all political lines is that people want their children to have a chance. They want their children to have the best possible education so that they can survive and adapt to what every individual appreciates is a rapidly changing and very technologically accelerated world that we're living in now. Yet acknowledging that fact, here we have a government with those blinkers on that they always have, that narrow bottom line. They took at one financial statement after another. Not an omnibus approach, not an overall integrated financial statement that includes various values, various attributes, various benefits. They don't look at that kind. They look at one little page at a time, uncoordinated, and that's the reason we have this disastrous economic performance before us.

The same as at universities. Go to Washington state. Mr. Speaker, they recognize in Washington, Oregon and California that education is a primary factor in developing a good sound....

Interjection.

[ Page 5445 ]

MR. HANSON: It's very interesting: that member who very seldom stands on his feet to say anything in this House loves to just heckle from the cheap seats. He probably contributes less per caloric unit than any other member in this House. It certainly seems to be supported by his seatmate there.

Let me just say something about the universities in British Columbia. I don't want them to distract me, because I was saying that the people in Washington, Oregon, California, Ontario and other jurisdictions really do appreciate the fact that when you have a good strong educational system, from kindergarten right through to post-doctoral research, you have the makings of a good, flexible and strong factor for generating employment. Being flexible and being innovative and being able to respond to the challenges and energies of jurisdictions who really do value education, and those jurisdictions that we're having to compete with....

Let's just look for a moment at the universities. British Columbia is the only province in Canada where the university system is entirely financed by federal funds and student fees. Most people don't know that. Most people think: "Gee, the province doesn't have much money, so I understand that they have to cut back in universities." The federal government and the fees paid by students pay for the university educations within British Columbia. You add up the fees and the federal transfer payment: there you have financing for universities in British Columbia.

Shame, Mr. Speaker. That's not the case in Ontario or in any other province in the country. British Columbia has the lowest participation rate in Canada. Many citizens don't understand what a participation rate is. A participation rate is that when a child goes to grade 1 in the public school system, what we're looking at is what percentage of those children will go to university. In B.C. it is the lowest in Canada. Shame, Mr. Speaker.

[Mr. Ree in the chair.]

Let's look at a couple of numbers: 101 of every 1,000 young British Columbians, even between the ages of 18 and 24, go on to university, 25 percent below the national average. Isn't that shocking? Only 7 percent of B.C. grade 12 graduates outside of the metropolitan areas of Vancouver and Victoria attend university, and only 16 percent of Victoria and Vancouver grade 12 graduates do so. B.C. had the highest participation rate in 1968 — first, along with Ontario. Now we've fallen to last. That's what this budget is all about: transfers of tax concessions to the very largest corporations and a relatively small tax concession to small business, which this government pays lip service to on a constant basis, yet they starve education. They are really starving the universities; they're starving the health industry and other social services and really not giving to small business what small business could really use to generate employment. Only in B.C. does the government require a student to take on a $22,000 debt to get a bachelor's degree. Then there's no employment after they complete that in any event.

So, Mr. Speaker, students will pay, families in crisis will pay and small businesses will really pay, because this government operates on the trickle-down theory. They give money right at the very top to the very largest and most powerful; then they hope that something will trickle down and that employment may be generated by small business. The government has said to all of these people: "Our friends need the money and you must pay."

The Socred government is now using its Mastercard and Visa to finance its programs. This is the sixth consecutive deficit budget. Other governments such as Alberta, Manitoba and Ontario have found ways to reduce their deficits, but not this government. They are entering a pre-election campaign with a record debt and a record deficit, and are promising tax cuts to big businesses if they are re-elected.

When you look at the political demographic map of North America, you find one little area, predominantly, that really, really is suffering, and that is British Columbia. When you ask yourself why that would be, you have to conclude, after examining all of the details and all of the reports from the Conference Board of Canada, the Royal Bank, the B.C. Central Credit Union and every other independent reporting agency, that it is the policies of this government that are driving us deeper and deeper into the recession.

In summary, the budget throws borrowed money up in the air, and the government has no plan to ensure that it will fall in the right place. There is no mechanism to ensure, even if it does fall in the right place, that it will be used for its intended purpose.

Other jurisdictions are far more sophisticated, far tougher, in their bargaining with companies. We've seen this government enter into all sorts of arrangements with large companies and then be taken to the cleaners at the bargaining table, with no guarantees for linkages where we could create employment and make equipment, where we could guarantee that certain services would be provided, and so on. We've seen that over and over and over again. Northeast coal was certainly a perfect example. We could have made conveyor belts, equipment and so on in some kind of joint arrangement with central Canadian manufacturers or offshore manufacturers. B.C. was left out of the picture.

The government is trying to hide the fact that a redistribution of wealth is promised by the budget from those who have little to those who own the economy. They have turned Robin Hood on his head — taking from the poor to feed the very rich and the very powerful. Who pays? It is the wage-earner, it is the student, it is the person in care, and it is the small businesses who really do need a real commitment, a real linkage, a real trust relationship with the government to get them on their feet and to create the jobs that we so desperately need in our economy.

MR. D'ARCY: Mr. Speaker, I understand the minister will be closing the debate in due course, so with the clock running we're not going to take too much time this afternoon.

Firstly I want to say that there are some aspects of the budget which in theory I can support. Indeed there are some aspects of the budgetary changes brought in by the minister which I personally asked for: the changes in the taxation formula as they apply to machinery and equipment is a positive step, in my view, in British Columbia, as well as the return to the old assessment formula that existed up until four or five years ago — the return to 2 to 1 from 3.4 to 1. I believe that in making the change, the minister has accepted the fact that he and the government made a mistake when they made the earlier changes, and that the impositions on the industrial and commercial sector of the province of increased property taxation were much too strict in terms of our ability to compete.

[ Page 5446 ]

What I have a concern about in regard to this, though, Mr. Speaker, is that in spite of assurances to the opposite from the treasury benches, there is either going to be a massive increase of property taxation on forms of property other than industrial or there is going to be a sharp reduction in services at the municipal level.

It's curious to note that while the hand of economic restraint has rested heavily on most parts of the public sector in this province in the last three years.... Certainly provincial agencies have felt it, and Crown corporate agencies, the health care sector and the education sector, as well as both the school system and post-secondary. The one area of public services in the province of B.C. that has not felt the heavy hand of economic restraint from Victoria — the one sector of the economy, indeed — has been the municipal level. Well, I think there have been some sharp pencils at the municipal level, but that has not been imposed from Victoria; that has happened because of electoral decisions made locally. Here we have a case where, I believe, there is some risk that there is going to be an imposed level of economic restraint on municipal voters and on municipal government as a result of this change.

There is another area in which I have a lot of disappointment that some changes were not made in the budget, and that is the area of energy taxation. One of the few really competitive advantages that we have internationally — a natural advantage, apart from the industry and imagination and hard work of our population in British Columbia — is our abundant low-cost supply of coal, natural gas and electricity. We don't have a lot of petroleum, unfortunately, but we certainly have lots of natural gas, coal and electricity. While the coal is not of great use to us domestically, hydroelectric power and natural gas are. Yet the government of B.C., in concert with the present and the past federal governments, removed those natural advantages by heavy-duty taxation in the energy field.

I believe that the Crown in this province should seriously consider if not abolition certainly a major reduction in the water tax on electricity. I believe also that they should back away from their stated intent to go to a royalty system on natural gas of up to 65 percent of petroleum costs and reduce that target to 40 percent.

We should give our industries, consumers and businesses the advantage of our low-cost energy sources. We do not have a good topographical situation in terms of resource industries. I think everyone knows that. We're not close to markets. Transportation is difficult and expensive; that is, the infrastructure for transportation is expensive, and the operating costs for transportation are expensive. We should recognize that and give these industries a break.

I would note, for instance, just in speaking of the major employer in my own constituency, that they compete in a very fundamental way with the Aluminium Co. of Canada. Certainly zinc and aluminium are competitors in many ways. And yet — this is not a complaint; it's simply stating a fact — Alcan import their ore from offshore, and they only make one product. Cominco in Trail get their oil domestically, and they make many products. Not only that, they're every bit as electrical energy-intensive as Alcan. In addition, the operations in Trail — and I say that because very few people outside the area realize this — have major secondary and tertiary attached operations, such as a worldwide mining and smelting engineering service and two major research and development operations, which are footloose.

They don't have to be in that area; they could be anywhere, but the company maintains them there. In other words, it's not simply a refining or extractive resource, and it's certainly not based on mining. Significant mining in the Trail area ended in the early 1920s. The ore that's processed in the area comes from the East Kootenays, from the Northwest Territories, from Montana, and from various small mines around British Columbia — not, for the most part, in the West Kootenays — and soon, probably, from Alaska as well. So it is no more mining-bound — those operations, with 5,000 employees — than the Alcan operations in Kitimat are mining-bound. They're there because of low-cost hydroelectric power. The government did not realize that, in my view, when they imposed the heavy water taxes five years ago.

[5:15]

Mr. Speaker, I want to make a few quick points regarding the West Kootenay area in my own riding. It's an old case, and I've argued it with the former government, and I've argued it with this government. B.C. Hydro should pay property tax on an equal basis. They should not have to pay full taxes on some of their properties, especially those ringing the lower mainland and within the city of Vancouver, partial taxes on other properties, and no taxes whatsoever on a third group of properties. It's totally unfair. The government has an equal tax rate on all of its property. Other Crown corporations have an equal tax rate on their properties, and certainly the private sector, when they're in the utility field, do not get special property tax consideration. There is no reason that B.C. Hydro should, particularly since it's unfairly applied around the province.

Mr. Speaker, I believe that the economic restraint that was visited on this province two years ago should be relaxed. In spite of what spokesmen across the way have had to say, the reality in this province is that there are 29,000 fewer permanent jobs, according to Stats Canada, in February 1985 than there were in June 1983, before the economic restraint budget came down. That's a reality. It's not a reality that I'm proud of or happy about. I want to emphasize to this House that I'm less concerned with how we got to this dismal economic state than I am with how we should all be discussing how we get out of it. But the fact is that we are in that state and we should be working out of it.

It's true, as people across the way say, that we should be working closely with our federal counterparts. The fact is that we've not been well represented by the people in Ottawa since the federal election. To begin with, this province has roughly 11 percent of Canada's population. There are 19 MPs from B.C. on the government side. In a 40-member cabinet we should have had four members from this province, but we don't. We only have three, and they're all city slickers. I'm not attacking any of them individually, but the fact is that the resource areas of this province, which sent ten conservative MPs to Ottawa, are not represented in the federal cabinet. That's most unfortunate, and I wish more attention had been drawn to that fact. In terms of sheer numbers, and in terms of our resource-based economy, we are not well represented federally, and I believe that is hurting us.

I want to join others on this side of the House who have said we need the forest agreement now. Other provinces have it. They are using British Columbia tax dollars in those agreements in those other provinces. We should be recovering those British Columbia tax dollars for British Columbia. I know the federal government has some concerns about that

[ Page 5447 ]

agreement in terms of how it would apply to B.C. They have experienced the diversion of federal support funds by the provincial government for other things, such as higher education, and they are concerned that that might happen to some of the federal forest funds. They are also concerned about the provincial share of that forest agreement being new money and not simply reallocated or redefined money that's already in the Forests ministry. But I think those problems can be cleared up, and I think we should recover our federal money that we as taxpayers are sending off as part of our responsibilities to this great nation called Canada.

I believe also that already existing federal-provincial funding agreements such as the travel industry development subsidiary agreement should be re-funded. Most of us who don't come from the lower mainland understand that one of the basic reasons for that fund in the first place was as a vehicle for government contributions to development in the Whistler-Blackcomb area. That's fine, and let's all understand that, but there are other parts of the province that are interested in being developed with their own tax dollars as year-round resort areas. That program was a good one, everyone concedes that, and it should be re-funded. We can call it a new name if we want to, and modify it slightly, but let's renew it.

Mr. Speaker, I want to re-emphasize the fact that in British Columbia every industry is fuel-intensive. Farming in British Columbia is more fuel-intensive here than anywhere in Canada, Farmers tell me that that's their biggest single cost. Their biggest single variable cost is fuel and the taxes on fuel.

The mining industry, which needs to reopen, is very energy-intensive, yet the budget does not help the mining industry. We have in this province the ability to do some things and do them well. We may well develop a high-tech sector; I hope we do. We may well develop a secondary and tertiary manufacturing sector; I hope we do. But the fact is that we do know that we extract resources very well. We also know that our industry, if prodded a bit, can be involved in major value-added additions to their resource industries. But they need to be encouraged by government — at both levels — and not discouraged from those kinds of investments. It is my hope that some of the changes the government has brought in are going to stimulate a new start in terms of expansion and modernization of resource industries. But let's remember that most of those multinational companies are going to spend some time simply repaying their own losses over the next year or so.

Mr. Speaker, I would add my voice to that of others on this side who have said that if you're going to make major cuts, however badly needed those tax cuts are, they should be tied to commitments — in this case to jobs and reinvestment. If we in this House don't see that industry is modernized in British Columbia, we're going to have a lot of dead smokestack industries — in the short run, not the long run. I don't believe that's doom and gloom; that's reality. It has happened elsewhere — and I'm talking eastern North America and western Europe — where they did not recognize the need to modernize. So if we accept the realities and make the changes necessary, I believe B.C. can get back on the road to rejoining the rest of Canada.

The minister is looking at me with that "will you finish so I can get on" look. We have already heard from Stats Canada that Canada as a whole, including British Columbia, grew in real terms by 4.5 percent in 1984. B.C. did not grow by 4.5 percent. As I mentioned earlier, in February, the most recent month of record, there were 29,000 fewer permanent jobs in B.C. than in July 1983. So we have not yet rejoined Canada in escaping the recession; in British Columbia we are still mired deep in the recession. The rest of Canada, most of which provinces have resource industries, have not been mired in the recession to the extent that we have in British Columbia. Government has to take some responsibility for that, and we should all be looking at ways to get on the same road to improvement that the rest of Canada — indeed, the rest of North America — is on. This budget does not do that; in fact, it lends credibility to the spokesmen in the private sector who have said that unfortunately this is a government which believes that any earnings left in private hands are merely uncollected taxes.

Mr. Speaker, we have to see that earnings left in private hands, especially in British Columbia, are not stuck in banks and credit unions, or paid out in dividends going elsewhere. We must do what we can in this House to see that those funds are invested and spent in British Columbia, because that is the only way we are going to provide jobs and a future and opportunities for everyone in British Columbia in the way that we have been used to — and deserve — as a great province over the last 130 years.

HON. MR. CURTIS: Mr. Speaker, I am cognizant of our standing orders, which suggest that I have a very few minutes in which to conclude remarks, in that the question must be put.

I followed the debate on the budget with interest, but also, I have to admit, with some disappointment that, with the rare exception, the opposition failed to provide any new ideas during the course of the debate.

SOME HON. MEMBERS: Oh, oh!

HON. MR. CURTIS: I'll expand on that in just a moment.

We've heard the usual diversity of opinion, Mr. Speaker, from members opposite, some of them calling for more spending and some suggesting more tax reductions. The opposition also expressed themselves in favour of lower deficits and less debt. Only those who are not responsible for preparing and carrying out the fiscal and economic policies of government can afford to have what are apparently such conflicting and irreconcilable views.

We've also heard the principles on which the opposition would base its economic strategy for the province. There are a few who would quarrel with the fairly vague generalities that have been put forward over the course of the last few days. For example, we recognize that we must build on the strengths of our natural resources and the range of enterprises in the province, both large and small. I had hoped that we would hear in the debate how these general principles would be translated into specific proposals within the limits of our budgetary constraints. But except for suggestions for greater spending in certain areas, the members of the NDP did not propose any specific strategy for the province.

Could I spend just a few moments dealing with several of the points raised during the debate? It was suggested that the economic problems of the last two years have been unique to British Columbia in Canada. In fact, the member who has just taken his seat said the same thing. On the contrary, and as I said in the budget speech, the problems that we faced in this

[ Page 5448 ]

province have also been experienced in other resource-producing areas. For example, in Alberta there has been a decline in gross provincial product for each of the last three years, whereas in British Columbia it's estimated that we've had positive growth, although at a low level for the last two years.

Among the suggestions for alternative economic policies provided by the members opposite was the proposal that in B.C. we should follow policies similar to those which have been adopted in Manitoba and Australia. I have difficulty in accepting that suggestion. I note that employment growth in the 12 months ended December last was five times greater in this province, at 20,000 new jobs, than in the province of Manitoba, where only 4,000 new jobs were created in the same 12-month period. I'm sure that we don't want to follow that performance or import it into British Columbia.

As for Australia, I am not an expert on that nation, and I'm not sure what attraction that nation's policies have for some members, but I do note that over the last year the value of the Australian dollar has declined by 27 percent against the U.S. dollar, compared to just 7 percent for the Canadian dollar. Furthermore, the bank prime interest rate on the Australian dollar reached 16 percent last week. On the most recent occasions that I have heard some members of the NDP speak about interest rates, I thought they were in favour of low interest rates, not high ones. It is not the government's practice in British Columbia to comment on policies which may be appropriate for other countries such as Australia, but I don't think those will work here, Mr. Speaker. I reject the 16 percent solution.

Several references were made by members to the relative effectiveness of differing methods of job creation, and that debate, I'm sure, will continue. It was stated that a report prepared for the federal government by the Canada Employment and Immigration Commission showed that expenditure initiatives are more effective for job creation than are tax reductions. I'd like to make just a couple of comments on the report, which was spoken about and presented by the member for Nanaimo (Mr. Stupich). There are several reasons, I think, why the conclusions stated in the report are inappropriate for use in evaluating the measures in 1985 and in B.C. I want to explain for a few members who may not have read the report now, since it's been out for a little while, that it compares the employment impacts and costs of alternative government initiatives for job creation, including the effects of government expenditure, government investment and tax cuts.

[5:30]

Firstly, the net costs of job creation shown in the report are, as I'm sure you realize, Mr. Member for Nanaimo, estimated net costs to the federal government. Costs to provincial governments are quite different because of the varying responsibilities of the two levels of government in matters such as unemployment insurance, as an example. Some economists have estimates that the net costs of job creation for provincial governments are about two and a half times the costs to the federal governments.

Secondly, the same report deals with the effect of corporation income tax cuts. As the member is aware, the tax reductions and eliminations which have been debated in this chamber do not affect the corporation income tax. It would be inappropriate to use a study which examined the national effect of corporation income tax cuts to assess the effects in B.C. of reductions and eliminations of non-income-related taxes. The tax cuts introduced in the 1985-86 budget have three aims, Mr. Speaker: to provide a significant degree of tax relief to a very broad range of businesses; to ensure that our industries and businesses are not faced with a higher tax burden than that in competing jurisdictions; and to offer benefits to sectors with good growth prospects. This is not at all the same as reducing the corporation income tax rate and then waiting for the rate reduction to translate into higher investment, which I read as the assumption in the report to which the member has referred.

Thirdly, the same report acknowledges that 70 percent of the jobs created by its proposal for government expenditure initiatives would be created in the service sector. Well, again, as members will be aware, our loss of jobs in B.C. in 1982 occurred in the goods-producing sector rather than in the service sector, primarily in forestry and mining. Our tax measures in this budget are designed to increase employment primarily in those sectors, not in the service sector. If employment grows in the goods-producing sector of the province, then we can be confident that employment growth in the service sector will follow automatically. Mr. Speaker, I won't take too much more time on that particular report. I could offer an analysis to any member who is interested.

In summary, though, may I say that I think we've learned to be skeptical of studies which purport to claim that governments can create permanent employment at a small fraction of the comparable cost to business. These studies usually ignore or dismiss the effects of direct job creation on government deficits. They dismiss them as being virtually negligible. The federal government is today paying billions of dollars annually on debt incurred to create jobs through expenditure schemes. The jobs have long since disappeared, but the cost of the debt burden will last for a very long time.

Now with respect to another question from the member for Nanaimo — asking for the effect of the budgetary tax measures on employment in the province — I would point out that the budget contained our estimates of employment growth over the next two years. The economic outlook provided in the budget document estimated that employment growth would be approximately 2.5 percent annually over the next two years. This rate of growth is equivalent to adding 60,000 jobs in B.C. by the end of the second year.

The member also inquired as to the outlook on the estimated effect of the budgetary measures. The expenditure under the economic renewal program is expected to have a greater effect on employment in the first year, while the tax reductions — the other side of the budget — are- expected to have a significant effect in the second and subsequent years. Could I remind members that a major purpose of the tax reductions was to place our businesses on a competitive basis with other jurisdictions. In the absence of these tax reductions, we could experience a decline in output from our major industries over the next few years.

The finance critic, the member for Nanaimo, also stated that our future will be determined by capital investment. We can certainly agree with that statement, but we have to ask why the opposition would oppose those measures which will lead to increased investment.

We also heard the claim from the opposition that the government is treating the forestry and mining industries as sunset industries. Nothing could be further from the truth. As I said before, the tax reduction measures in this budget are of major importance to those industries. The tax measures will

[ Page 5449 ]

enable them to compete on equal terms with industries in other jurisdictions,

It was also proposed that industries benefiting from the tax reductions should provide a guarantee of new jobs, again referring to the comments by the member for Rossland-Trail (Mr. D'Arcy). Well, that kind of proposal illustrates how some fail to recognize the competitive world in which our export industries must exist. If we could guarantee an adequate level of commodity prices and market demand around the world, then it might be possible for the industries to guarantee new jobs. But such guarantees are simply not available to us in the intensely competitive international environment. It's just not a viable alternative.

Another contradictory suggestion which was made is that the needs of small business have been neglected in this budget. Well, Mr. Speaker, I think that a specific number of measures will put the lie to that claim. Some members opposite made comments about the level of provincial deficits and accumulated debt. It has been necessary to incur a deficit in each of the last few years, and in the absence of a very sharp increase in commodity prices, we can expect, and we must be prepared to record, deficits in the next two or three years. This does not mean that the provincial debt is a major problem for this province. The government's deficit includes, as the member for North Vancouver–Seymour (Mr. Davis) mentioned, significant amounts of capital spending for highways and other acquisitions of assets. In the coming year spending will account for $525 million out of a forecast deficit of $890 million. This means that much of our borrowing to finance the deficit is in fact borrowing for capital purposes.

In terms of a comparison of our provincial debt level with that of other provinces, we find that our position is superior to not less than half the other provinces, by whichever standard may be used to compare debt levels. For example, based on the latest available figures as a percentage of gross provincial product, B.C.'s debt was lower than five of the other provinces. That comparison, Mr. Speaker, includes direct debt and the debt of Crown corporations. Now if we look just at non-commercial debt — that is, the debt which must be supported through government debt service payments — we find that B.C. ranks second to Alberta. In terms of debt per capita, once again we are in second place, where non-commercial debt is considered. Now I'm not suggesting that because we are in a slightly better position than most provinces we should become complacent about our level of debt, but our relative position does mean that our debt level is not a major concern.

Questions were put from time to time about the government's plans for repayment of its debt. Mr. Speaker, I believe the government policy with respect to that repayment has been stated in the past, but apparently it should be restated today. For debt with a term to maturity in excess of five years, a sinking fund is established in order to provide for the orderly repayment of that debt at maturity. The sinking funds in British Columbia perhaps have not been fully analysed by some who do in fact review all that we undertake. I'm proud of our sinking fund structure; I think it's a model for many other jurisdictions.

Finally, in comments on the opposition statements, I note that the Leader of the Opposition, the member for Alberni (Mr. Skelly) — and he's not in his seat at the moment — stated: "Those tax concessions will mainly come out of the tax base of municipalities, regional districts and school districts." As most members would know, Mr. Speaker, elimination of assessments and taxation relating to machinery and equipment does not affect the municipal tax base, because the assessed value of machinery and equipment has not been included in the municipal tax base. The changes to nonresidential property taxation also do not affect school districts, because they levy taxes only on residential property. Only the revenue of the province is affected by the changes outlined in the budget.

I reiterate that the government's main goal in preparing this budget, having listened very carefully around the province, was to accelerate growth in the number of permanent jobs in our province. We're confident that the initiatives which were proposed in the budget, and the proposals for partnership which have been introduced by colleagues in the days following, will allow us to meet that goal. The budget did not, as was stated by some members opposite, outline a one-track policy. The budget initiatives address our problems in a variety of ways.

The economic renewal program will provide short-term fiscal stimulus this year, when it is most needed. The program contains positive steps to encourage industrial development in B.C., and it provides for major investments in our natural resource base, in partnership with the federal government. The proposals for incentives to be jointly offered by the province and participating municipalities — and they're signing at a great rate, Mr. Minister of Municipal Affairs (Hon. Mr. Ritchie) — will ensure that all regions of the province will have the opportunity to become a part of the economic renewal program.

The tax measures introduced in the budget provide major tax reductions for a broad range of businesses in all parts of British Columbia, including forestry, mining and the small business sector. These tax measures lower existing tax burdens and provide incentives for expansion and for growth.

Mr. Speaker, I've listened to the comments. I believe the budget is correct for 1985-86. I'm sure that the balanced approach that we have taken after that intensive period of listening to the concerns of the people of the province, and with the support of the other partners in our economy, will lead to renewed economic expansion — and very quickly.

Mr. Speaker, I restate the motion that I gave on March 14; that is, that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

[5:45]

Motion approved on the following division:

YEAS — 25

[ Page 5450 ]

NAYS — 20

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

ESTIMATES: MINISTRY OF ATTORNEY-GENERAL

On vote 11: minister's office, $223,385.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. GARDOM: Mr. Speaker, for the information of the House, we will be commencing tomorrow morning with interim supply, followed by the estimates of the Attorney.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:51 p.m.