[ Page 5925 ]

CONTENTS

Securities Act (Bill 37). Hon. Mr. Hewitt

Introduction and first reading –– 5925

Ministerial Statement

B.C. ferries rescue. Hon. A. Fraser –– 5925

Mr. Stupich

Oral Questions

Ministry of Education report. Mr. Rose –– 5925

B.C. Hydro gas division. Mr. D'Arcy –– 5926

Government information policy. Mr. Hanson –– 5926

Private Members' Statements

Mortgage reform. Mr. MacWilliam –– 5927

Hon. Mr. Smith

Portable pensions. Mr. Mitchell –– 5929

Mr. Cocke

New Westminster. Mr. Cocke –– 5930

Mrs. Johnston

Mr. Stupich

Business Licence Repeal Act (Bill 16). Second reading

Hon. Mr. Curtis –– 5932

Mr. Stupich –– 5932

Mr. Mitchell –– 5933

Hon. Mr. Curtis –– 5933

Assessment And Taxation (Miscellaneous Amendments) Act, 1985 (Bill 6). Second reading

Hon. Mr. Curtis –– 5933

Mr. Stupich –– 5935

Mr. Mitchell –– 5936

Mr. Williams –– 5936

Mr. Davis –– 5937

Hon. Mr. Curtis –– 5938

British Columbia Transit Amendment Act, 1985 (Bill 17). Second reading

Hon. Mr. Curtis –– 5939

Mr. Williams –– 5939

FRIDAY, MAY 3, 1985

The House met at 10:05 a.m.

Prayers.

Introduction of Bills

SECURITIES ACT

Hon. Mr. Hewitt presented a message from His Honour the Lieutenant-Governor: a bill intituled Securities Act.

HON. MR. HEWITT: Mr. Speaker, this legislation ensures that our securities law is uniform with the rest of Canada's, for the protection of investors on one hand while meeting the special needs of B.C. companies and developers to raise capital efficiently on the other.

Members will know that over the past three years my staff have consulted extensively with the investment industry, professional groups and others, to arrive at a consensus which represents the best possible solution to many of the problems contained in previous drafts of this most important legislation. As a result of this detailed consultative process, Mr. Speaker, the bill is basically uniform with the rest of the country but at the same time reflects the unique characteristics and special requirements of the B.C. investment market.

In short, this bill will accomplish uniformity and will provide increased protection to the investing public. In addition, it will provide greater certainty to those issuers who raise capital in this province and thereby provide important stimulative benefits to our economy.

Bill 37 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

B.C. FERRIES RESCUE

HON. A. FRASER: Mr. Speaker, I would like the Legislature to join in congratulations to a senior captain of the B.C. ferry service. On Monday April 29 a child fell overboard from the Queen of Victoria, under command of Captain Anderson, who joined B.C. Ferries in 1961; within seven minutes they had recovered the child. We congratulate the young girl as well. She is a real hero. She fell 50 feet and survived six or seven minutes in the water, so she is a hero as well as the doctor and all the other people that took part in the rescue. The child is fine. I would like the House to join with, me to congratulate all concerned, and tell you that B.C. Ferries will be giving due consideration to acknowledging the great efforts of Captain Anderson and his crew.

MR. STUPICH: Mr. Speaker, I'd like to join with the minister in congratulating the captain and the crew. By happenstance, I was on that ferry and saw it; I didn't see the child fall into the water, but I did see the rescue and the speed with which the captain and the crew reacted. The girl was picked up within seven minutes of hitting the water, and the only concern that anyone on the ferry had, I think, was that that old tug would shake apart with the vibration as it was changing direction, I think you've all been on that particular ferry. There were some anxious moments wondering what was happening.

But we do want to join with the minister and the House in congratulating the captain and the crew.

Oral Questions

MINISTRY OF EDUCATION REPORT

MR. ROSE: I gave the minister notice of my questions, Mr. Speaker.

Can the minister explain why a portion of an important document was leaked to the press, instead of releasing the complete report to the public?

HON. MR. HEINRICH: Mr. Speaker, I appreciate the notice which I was given: as my critic walked into the House, he told me what he was going to ask me.

I cannot explain any particular information which is in the press. The document has not yet been made public; I can assure the member of that. When I saw the story this morning, I added up a number of items which have happened in the past, and I suppose a reporter who was rather ingenious and who had been around some time could probably put a number of figures together and come out with something. But I want to tell you that I have not released the report, and that is a fact.

MR. ROSE: I can think I could be forgiven, Mr. Speaker, if I was a bit sceptical. It might be part of a desperate propaganda war on the part of the minister. He says it isn't, but now says that a portion of it has been leaked — very damaging. Will the minister now release the complete report?

HON. MR. HEINRICH: Mr. Speaker, the member is making a presumption on the contents of the report. I can tell you, and I repeat, that I have not made that report public.

MR. ROSE: Do it.

HON. MR. HEINRICH: No!

MR. ROSE: Why should the minister be afraid to do it? This portion is damaging, along with the headlines. Clear the matter up. Release the report.

MR. SPEAKER: This is question period, hon. members.

HON. MR. HEINRICH: Mr. Speaker, in my last reply I advised the member that he is making a presumption, and the presumption that he's making now is that the comments which he found in this morning's press were accurate.

MR. ROSE. I give up on that one, Mr. Speaker. In a related question, I wonder what he thinks of the ethics of a reporter who takes a leaked document, publishes a story, and makes no contact whatsoever with the Vancouver School Board before publishing the story.

MR. SPEAKER: Order, please. Hon. members, the question must address the scope of the minister's responsibility. The press can't be the minister's responsibility.

[ Page 5926 ]

MR. ROSE: I just asked what he thought about the particular ethics of that situation. But the BRAT team, the advisory team that examined the Vancouver School Board budget, also.... Part of their mandate was to bring back recommendations about what kind of options could have been followed, and make recommendations to the ministry. What recommendations did the BRAT team make to the ministry about the options that could have been taken by the Vancouver School Board?

[10:15]

HON. MR. HEINRICH: Mr. Speaker, the member is correct in the opening of his question. That was one of the objectives or terms of reference handed to the budget review team, and I would suggest that all of those options contained within the report are well known to the Vancouver School Board.

MR. ROSE: Well, the Vancouver School Board, Mr. Speaker, has written the minister twice to try to get a copy of that report, and so far has failed. Since the Vancouver budget's already down $15 million over last year, and 409 permanent jobs are lost, and to cut another $14 million means another 400, I wonder how the minister can explain that there will be no impact on education. That's 20 percent of their staff gone in two years.

HON. MR. HEINRICH: I find that the strangest thing of all, that 70 out of 75 school districts can submit compliance budgets.... If the member is of the view that those five who have submitted needs budgets and have still got an opportunity to reconsider as a result of the statement which I made yesterday.... If they think for one moment that 70 districts in British Columbia have not had some difficulties as we've gone through....

I find it somewhat difficult why the member at this particular time seems to be advancing great concerns about the Vancouver School Board, when I remember in the estimates I had one specific question on Vancouver, which came from the second member for Vancouver East (Mr. Williams). The question was on ESL, and the answer that came forward was that there was an increase, and as I recall, the, increase was something like $16 million to $20 million for English as a second language for 1985-86. We had acknowledged it, and I had communicated that information to the Vancouver School Board some time ago.

MR. ROSE: I wonder if the minister remembers the fact that I brought up both Britannia and Begbie school reports in Vancouver. But I understand he has a short memory.

Mr. Speaker, Vancouver has one administrator for 10,000 students, about a third of the ratio of Calgary, Edmonton or Toronto, so how can the minister or any other member seriously argue that Vancouver is over administered? Finally, Mr. Speaker, has the minister had any legal advice on whether or not under the Charter of Rights he can force an elected official to vote one way or the other?

HON. MR. HEINRICH: Mr. Speaker, I have no authority whatsoever to force somebody to vote one way or the other. All I expect from elected people, like every member in this House, is to obey the law; it's the rule of law.

1 have made that statement repeatedly over the last week, and I'm asking the boards who have not submitted compliance budgets to reconsider what they have done. I am further telling them that I can, under certain provisions in the existing legislation, accommodate compliance budgets. I've given them the weekend to think it over.

But I think it's important for all of us around here, whether we like it or not, whether certain boards may or may not like what has to be done.... I think that applies to everybody, Mr. Speaker. All I ask is that they do the honourable thing and comply with the provisions of the law.

B.C. HYDRO GAS DIVISION

MR. D'ARCY: And now for something completely different. In the absence of my friend the Minister of Energy (Hon. Mr. Rogers), I would like to direct a question either to the Minister of Industry and Small Business Development (Hon. Mr. McClelland) or the parliamentary secretary, the first member for Surrey.

Last July, ten months ago, B.C. Hydro's gas division did an internal management review of their operations. The committee had senior management people on it and it was chaired by an outside consultant. In part, that committee stated: "Further reductions in personnel may be viewed as the deliberate withholding of certain vital services, which may have serious ultimate consequences for public safety. Natural gas is classified as a hazardous commodity. In today's society too lean an operating core would not be acceptable, and in the case of accidents may well be perceived as negligent." My question directly to the minister or the secretary — as the case may be — is: why have more than 50 employees of the gas division been terminated permanently since that time? And we are told by the chairman of Hydro that even more heads are going to roll in the gas as well as in the electrical division.

MRS. JOHNSTON: I'm absolutely delighted to have received my first question. But I'm sure the hon. member will understand when I say there was a great deal of detail in his question, so I will take it on notice and have a response from the minister at the earliest possible date.

GOVERNMENT INFORMATION POLICY

MR. HANSON: A question to the Provincial Secretary. Recently the Minister of Municipal Affairs (Hon. Mr. Ritchie), in speaking to the Juan de Fuca Chamber of Commerce, urged business advertisers to use their economic clout to influence news coverage in favour of Social Credit Party government.

Interjections.

MR. HANSON: That is essentially what he said.

Will the minister responsible for government information services — which it is our impression are certainly abused in terms of political interference — advise whether this economic blackmail approach reflects government policy? Or did the minister develop this assault on the free press himself?

Interjections.

[ Page 5927 ]

MR. SPEAKER: Order, please, hon. members. The question is blatantly out of order — without argument; without debate.

MR. HANSON: Supplementary, Mr. Speaker.

Interjections.

MR. HANSON: Mr. Speaker, they don't like this line of questioning, because they know the people of this province don't want their tax dollars spent on political advertising.

Mr. Speaker, I have a new question. The government of British Columbia is now by far the biggest advertiser in this province. Under that minister alone, through the government information services, it is a $20 million budget, with another $15 million to $20 million through Expo, plus lottery ads in addition. It's a very substantial amount of money. Is the minister prepared to disallow his colleague's approach and state categorically that the government does not and will not use its advertising budget to influence editorial comment?

HON. MR. CHABOT: Essentially, it's not my role to attempt to influence statements made by other members of the executive council.

MR. HANSON: Supplementary, then, Mr. Speaker. Does the Provincial Secretary disallow his colleague's comments? Is he making that up himself?

HON. MR. CHABOT: You said that "essentially" he said this, so I'm not going to attempt to interpret what the minister said. You're attempting to interpret it. but I'm not about to do that.

MR. HANSON: Mr. Speaker, let's quote precisely what he said: "Advertisers should use their clout to influence the daily newspapers in changing the way they report the news." Is that the policy of this government?

HON. MR. CHABOT: I'd like to ask the member a question. What kind of a document is he reading from?

MR. HANSON: These are quotes attributed to the minister at a meeting. I am asking that minister not to skate the issue, I'd like him to categorically state whether it is the policy of this government to adopt that approach, where advertisers should be influencing the news coverage in this province.

HON. MR. CHABOT: Essentially, I have some great difficulty, because I don't know what the member is quoting from. Is he quoting from a press clipping and taking that to be an accurate accounting of what the minister had to say? I have great difficulty in commenting, and I'm not about to interpret what one of my colleagues says or what he's alleged to have said. So I have some difficulty, and you must recognize that as the Provincial Secretary in the government, I can't attempt to influence another minister in the statements he makes, and I can't comment. My colleague is not here. I wish he were here to comment on the validity of the statements which you say are essentially what he said.

HON. MR. McCLELLAND: Mr. Speaker. on a point of order. I think it's the rule of the House that when documents are quoted in this Legislature they be filed. I would like to request that two documents the member quoted from be filed in their entirety — one attributing statements to a minister, and the other the source of the papers he was reading that showed that the government was by far the largest advertiser in the province. I'd like the House to have both of those papers.

MR. SPEAKER: Hon. minister, it is a requirement that the government member be so advised, but it may be done with leave if the member so desires.

MR. HANSON: Mr. Speaker, I would be happy to table these documents, and I certainly would request that the Premier table the Decima polls probably paid for by the people of this....

MR. SPEAKER: Order. please. Does the member have a document to table? Shall leave be granted?

Leave granted.

HON. MR. GARDOM: Mr. Speaker, I might make an observation and express a wish that I know every member of the assembly will be happy to join in: that is, to send our best wishes to the Canadian team in Prague for their outstanding success and the silver medal that they won. I say particularly, the heartiest congratulations to the members of the Canadian team who were formerly with the Vancouver Canucks. They did a first-class job.

MR. PASSARELL: Did you fire them?

HON. MR. GARDOM: Well. they weren't playing as Vancouver Canucks in Prague, hon. member for Atlin.

Private Members' Statements

MORTGAGE REFORM

MR. MacWILLIAM: I'd like to take a little bit of time this morning and outline a serious concern not only to residents in the north Okanagan but I think a concern in the provincial aspect. This involves the present mechanism of foreclosure on assumable mortgages. I don't propose to be a legal expert by any means. but I have done a little bit of research and have been, I think, fairly well advised on the issue. I'd like to bring out these concerns, as well as make a few recommendations.

[10:30]

First of all, it's very common in the province of British Columbia, when property transactions are involved, that the purchaser can assume a mortgage covering the property purchased from the vendor. Mistakenly, it's often the vendor's belief that the assumption of the mortgage by the purchaser absolves him. the vendor, from any further liability on that mortgage. I think that few people in the province realize, nor are they cautioned, that unless a release of obligation from that mortgage is obtained, the original owner remains liable on the original covenant to pay. That is not commonly known, and it is causing some considerable difficulty as the number of foreclosures has mounted during these tough economic times.

[ Page 5928 ]

In the case of eventual default, unless there has been a novation or a renewal of the original mortgage, through material changes to the agreement, the original mortgagor remains liable for the proceeds payable. If the mortgage is foreclosed, as I mentioned, it's the original owner who may not have any interest remaining in the property whatsoever, but he remains liable. Clearly it's a case of seller beware.

I want to cite a couple of examples. The first one occurs in my constituency. Two Vernon brothers, Ian and Brian Stacey, are being sued by Royal Trust for money owing on a fourplex that they haven't owned for over eight years now. When the building was first sold, the brothers allowed the new owners to assume the existing mortgage. The building sold twice more, and in each case the mortgage was passed on and assumed by the new owner. In addition to this, the terms of the mortgage were changed substantially in terms of the interest rate payable. The Staceys thought that when the new owners took over the mortgage, they forfeited any liability — they were no longer held liable. Unfortunately, without any assumption agreement the original mortgage stays in place between the Staceys and the mortgage company, and they remain liable for the proceeds. That's a difficult position to be put in. The last person to own the fourplex defaulted on the mortgage and taxes, and Royal Trust has initiated foreclosure actions. Now the Staceys, both unemployed, have to pay for somebody else's problem.

[Mr. Strachan in the chair.]

I cite another example — Canada Permanent v. Mah and Neumann. This is a case that has come to notice. In 1981, the Mahs and Neumanns jointly purchased a townhouse. In 1982, one year later, the Neumanns transferred their interest to the in-laws, the Mahs, for the sum of $1, and the oral obligation that the Mahs would undertake the mortgage installments. In 1983 the Mahs entered into a renewal of the mortgage with the mortgagee, and in addition had extensive modification of the terms. In 1984 the Mahs, due to, I guess, financial difficulty, defaulted under the terms of the modification agreement. Now what has happened is that claim has been against the Neumanns, who had basically transferred their interest to the Mahs. Claim has been made against both of them. Under the original covenant by Canada Permanent, foreclosure proceedings commenced, and the final judgment against the Neumanns was given at $50,000 plus costs.

Now there are two critical issues here which I'd like to highlight. Number one is that under present legislation in British Columbia the lender, in the absence of an assumption agreement, can't sue the assumer of the mortgage; in other words, you can't sue the person who holds the mortgage at the time. You must, therefore, go back to the original mortgagor, who no longer has any interest in the property or owns the property.

Secondly, there remains the question of the extent to which a mortgagor who sells his equity of redemption remains liable when the mortgage has been modified or renewed by the purchaser.

Those are the two issues. At present the judicial treatment of this issue is clouded by the fact that during a four-month period in 1983 the B.C. Supreme Court heard nine cases dealing with this very issue and came to substantially different conclusions in each.

I will table, a little later after the statements are finished, a list of these cases researched for me by Mr. Peter Keighley, barrister for Rosborough and Co. In Abbotsford. I will also table a list of recommendations that I will make after a chance for statements from the other side, and I will make a number of suggestions in my closing remarks.

HON. MR. SMITH: Mr. Speaker, I am not going to attempt to do justice to the comments that have been made, which seem to me to be very fruitful and may well be productive of some legislative consideration. In the law reform omnibus Bill 1, which we passed in the tail-end of the last session, for the first time we addressed some Law Reform Commission amendments on mortgages and made some changes in that area, which I think are beneficial, which removed the discrimination against people who were purchasers under an agreement for sale. They were at a disadvantage to owners in terms of redemption.

What the member is talking about are, I think, the problems of assignability and the difficulties that persons have who are early mortgage holders and then sell, and then those mortgages are assumed by others who may default. Then, lo and behold, the early mortgage holder finds that he is part of the lawsuit when the default has occurred on the mortgage which he has assigned to someone else. This area of the law is fraught with problems.

You have to try to balance a number of principles, and one of the principles is the necessity of encouraging real estate transactions. You encourage real estate transactions to take place, I guess, if you allow someone who holds a mortgage — say an old mortgage at a very favourable rate — to sell the property with their mortgage there, because their low-rate mortgage is very beneficial to the sale of the property.

There are still in this province not many, but some, 20-year mortgages that are floating around out there with low rates of interest from an earlier era. They are very attractive in selling property. But if you give people the right to assign and you let them sell those mortgages with the property at that low rate of interest, well, then the security holder of that mortgage, the mortgagee, is naturally going to look everywhere for his security if there is a default. The difficulty is: should he be able to look to the earlier mortgage holder, or should he just be able to look to the present debtor on the mortgage and to the land? Usually the land contains enough security, and it isn't a problem.

So I think in most cases my friend opposite is probably right that it seems unjust to bring in early mortgage holders in these actions. But I'd be very pleased to examine his proposal seriously and in the light of the work of the Law Reform Commission, and I thank him for the constructive debate.

MR. MacWILLIAM: Again, not being my area of expertise, I don't know all the nuances of the legislation but there were some things that certainly alerted me to the problem, and it's become clear, I think, anyway that changes are needed in the present legislation under the Law and Property Act. I think the vendor really is in need of a little more protection against default.

I guess it becomes an issue of a question of notice. The question is: do people really know their responsibilities when they enter into these agreements of assumption? My feeling is that in 99.9 percent of the cases they don't, and they can really get burned.

In the interest of providing a more adequate protection for the consumer — I think this is where the benefit of such legislative changes would be — I would like to propose the

[ Page 5929 ]

following: number one, that the province of British Columbia should create, through amendments to the Law and Equity Act, the legislative right for a tender to sue the assumptor of an assumed mortgage in the case of default and in the absence of a covenant from the assumptor. Such legislation has already been invoked in Alberta and Ontario in order to give more protection to the original mortgagors. In the absence of such protection, the lender simply has no recourse but to file claim against the original mortgagor, who no longer owns the property in question.

The second recommendation is this: that the province of British Columbia should enact that a mortgagor, upon the sale of his redemption to one who assumes his mortgage, becomes a guarantor or a surety and as a result is absolved from any further liability if the mortgagee subsequently extends the terms or alters the interest rate payable.

So there's a kind of a twofold attack that you can take on this. I realize the language is rather convoluted, but I wanted to stick as tightly to it as I could. When the minister has time to peruse the semantics and what not, I'll think he'll be able to quite clearly see the purpose behind those two recommendations, and, as I mentioned, I will be filing them at the end of the statement period. My thanks.

PORTABLE PENSIONS

MR. MITCHELL: This morning I would like to talk on the need for portable pensions in our society. When you go back and look at what has evolved, I guess, as society has grown.... We originally evolved from the jungles into the caves, from the caves into the villages, from the villages into the towns. All the time that we were making these various changes, it was to provide the community with a certain amount of protection, a certain amount of security. Plus it gave the workforce of whatever community it was an opportunity to grow and to provide changes and wealth in a community.

But as society has changed.... And society has evolved more quickly in the last 20 years than, I think, in the 200 and 300 years prior to that. But still, as this workforce has developed, we have not laid any foundation for the security that may have been in place 100 years ago in our rural community, where the portable pension of those days was a large family that continued to work the farm and provide the security for the parents of that generation.

Today, with our new industrial technology and with our new means of producing wealth through robots, computers — something that society has never known — what is actually happening in the workforce is that jobs that were at one time good for a lifetime are going to be redundant within seven years of any known part of the industry.

What I'm saying is that people are going to be changing from one job to another, and I think it's important that we build up in that person's lifetime an opportunity to invest in providing the security that he'll need later on. I think it's a necessity that governments and societies look to ways and means of doing that. And I recommend very highly that anyone who starts in the workforce at age 16, 17 or 18 should be making that first payment on a pension, to give that security that he'll need later on in life.

When you look around, the majority of people do want that security of later life, and many go into the employment of governments or larger businesses or the military to get a pension that they hope that they can live on with some dignity. But the workforce that is needed to keep Canada moving has to depend on people who work two months, two years or ten years and who will move from one job to another. Because they are not locked into some pension plan, their opportunity to develop some security later on in life is lost. I think there is a need that, no matter what job they are working in. they are provided that opportunity.

[10:45]

Many times a person is in a job that seemed good when he was younger and gung-ho — whether it was in military or government — but as time goes on and he gets older, he finds he is a square peg in a round hole. But because he has 10, 15 or 20 years in that job, he will not leave because of the pension time he has. I think a person should be given the opportunity when he leaves not only to take his investment but also the money that has been put in by his employer, which he has earned. If he spent the next 15 years as a square peg in a round hole, he would collect it.

If there were a universal portable pension, he could move on to a job that he is better suited to or better trained for, and the opportunity of changing and providing something for his future would be secure. Although we have a number of adaptations of Canada Pension and GAIN, these are all designed for a basic, simple lifestyle. If we're going to have a pension, everyone should at least be able to retire on 75 percent of his present lifestyle. If he is getting $20,000 or $100,000, if he is putting premiums into a pension and it's completely portable throughout his lifetime, then he can continue that type of lifestyle he has grown to accept and the type of lifestyle that the community.... Any money that is spent in a community, if you're working or if you're retired, goes back into the community.

There has been a growth of pension funds over the years, and I believe that with the new technology there will be a need for capital to invest in the new technology. There will be a need to adapt to change to provide the additional goods or wealth, and that can come from well-regulated. well-planned pension funds. Today, when you read the financial statements of many companies, it is the pension moneys that are providing it, and I think we have to enlarge on that.

MR. COCKE: I challenge the quorum.

DEPUTY SPEAKER: Yes, a good point.

[Interruption.]

DEPUTY SPEAKER: Private members' statements continue.

MR. COCKE: On the member's statement vis-à-vis portability of pensions. I certainly feel that he's on the right track. One of the biggest problems in our society is that the younger people cannot envision themselves ever becoming retired. So the last thing that people in their twenties and thirties care for is their pension plans.

The member indicates that the workforce moves from job to job. As a matter of fact, a few years ago — and this is before the fast technological change that's taking place now — people changed jobs once every eight years in the course of their working life. That's on average. Some would continue with the same job for their entire working life, but the average was eight years. When there is not a vehicle to provide for the portability of pension, generally speaking,

[ Page 5930 ]

what happens is that a person will work his or her eight years and at the end of that period take the money and run. They'll pay tax on it and maybe buy a car or something, and then have to start all over again. By the time they are in their late forties and early fifties they're beginning to worry that they don't have the time to build the kind of pension that's required. Many of them wind up really as an obligation of the state.

So first and foremost in British Columbia we need our own pension act. We don't even have one here. Secondly, we need to set up an arrangement for banking so that a person needn't worry about investing a period of ten years or whatever; it can be automatically moved to the bank and then on to the next job and so on. That would be the greatest move we could make in terms of helping people attain an independent retirement. Presently we're not doing that. Presently we're encouraging people, in a way, to take their money out of their pension plans. At the time, naturally they feel that whatever they're doing is essential. It may be paying off this or doing that, but unfortunately they live to regret the fact that they do not have a full pension at the time they achieve retirement.

So what the member is calling for is some way in this province for us to legislate this to happen. In Ontario they made a first few steps toward it. It's working relatively well. I don't think they've gone far enough. I think you have to not only demand portability, you also must set forward the vehicle. There would be a side benefit, too, because there will always be moneys in that bank, moving from one to the other and so on. That would also be an investment aspect which would be under the control of the province. From that standpoint I think it would be a benefit.

If we can help people attain independence, help them attain a retirement where they feel good about themselves and confident in their future, I think we've made a great move forward. I really believe portability of pensions is something that should be looked at, and looked at very quickly in this province.

MR. MITCHELL: When we look at the pension, when we look at where we are going to go, I think it's really important that we not get bogged down in statistics — does it take 6 percent from the employee and 6 percent from the employer? We must look at its total package. The employee definitely has an obligation to provide a certain part of it. That is a justifiable cost of a plan to the employer, and his money going into the plan should also be a part of that, but also the government, society in general. We have built up a safety net through GAIN. We have built up a safety net under old-age pension. The money that the community puts in should also be a part over a long period of time.

I feel there needs to be three groups putting into a plan to make it viable, and though they say what the percentage is, it will have to be adjusted up and down because of change in the workforce. Government's or society's obligation is that there will be a downturn maybe in workers because of the decline in birth and all that.

There must be an additional amount put in, because with new technology production will be going up. To bring the value up that is coming from new production, even if it is done by robots who will not take a pension, that sort of input into the pension fund should be there. Anyone retiring should go out with a minimum of 75 percent of any lifestyle that he has had over the many years that he has contributed to society.

1 think we have to look ahead. People must be able to know that they're going to live with the dignity that every one of us has a right to and every one of us should be able to expect in a rich country like Canada. We need something at the provincial level to supplement the inadequate Canada Pension Plan, or the lack of any pension provision for a lot of people who are the main backbone of our community but who are not locked into some large corporation or the government or some other type of an occupation where they have the opportunity to provide for an adequate pension in their declining years.

DEPUTY SPEAKER: Private member's statements continues. Pursuant to our orders of the day, the Chair recognizes the member for Mackenzie (Mr. Lockstead), who is not here.

MR. COCKE: He is absent, Mr. Speaker. Unfortunately he can't make it.

DEPUTY SPEAKER: Therefore we go to private members' statement No. 4, the Member for New Westminster.

NEW WESTMINSTER

MR. COCKE: Mr. Speaker, I felt that it would be an opportunity today for me to say a few words about our town, New Westminster. It is a city caught in the middle, as I've indicated. It's probably one of the most stable areas in the province. When I say stable, I mean there isn't that much movement in terms of people. They normally stay right where they are, and, unfortunately, Mr. Speaker, because of our geographical situation, we are caught in the middle of a very large urban sprawl that's happening all around us, and which has greatly affected the city.

For many years, Mr. Speaker, the downtown area of New Westminster has been sorely affected by business moving away from it. The shopping district that was once the hub of the whole Fraser Valley has reduced to the extent where it's just not attracting the way it once did.

We had a response to that in 1973-74. You may recall that there was a committee of the Greater Vancouver Regional District. They put together a report called "The Liveable Region." Mr. Speaker, that liveable region plan suggested that each major area in the GVRD have a town centre, so to speak.

It was directed at Surrey, New Westminster and Coquitlam, for very good reason. It's been found by urban planners that municipalities, cities and villages that don't have a living core tend to be those areas that sprawl, those areas that have very bad response to lifestyles.

[11:00]

You'll find that some of the least-planned areas in our province are areas where there are greater accidents, greater incidents of illness and all of the negative kinds of things. So what I'm trying to do here is to say that New Westminster's core should be preserved. Beyond that, it should be improved. As government at that time, our response to that proposition in 1973 was that we felt that the downtown core of New Westminster should have a courthouse, which is a fact now, should have a B.C. government building, which it does not. We felt that ICBC should be in there, and as a matter of fact the property, was acquired for the ICBC headquarters, and we felt that a transit terminal should be in that area. What we have in response, having a new government after that, is a

[ Page 5931 ]

courthouse, Douglas College instead of ICBC and someday some waterfront development. We even lost the King Neptune restaurant three years ago, and nothing has happened to that site.

Interjection.

MR. COCKE: That's right — that's planning.

I think that what we have to do is look at New Westminster and say we must give the necessary assistance. If it's senior government planning and assistance, that's what's necessary.

I see, for instance, this headline: "New Westminster Back in Business." Then I see another, "Rebirth of a City, " and it shows what we're going to look like some day. I see another that says: "Born Again Feeling in New Westminster." Well, it's all very well and good; the chamber of commerce has every right to try to get people happy again about our prospects. This one article, "New Westminster Back in Business, " says: "Downtown New Westminster is littered with evidence of broken dreams and lost hope. But the merchants who have held their ground while awaiting rebirth of the once-proud business district are once again filled with hope and optimism." I have seen that happen in New Westminster over and over again.

Another part of this article says: "A survey last summer for the Downtown New Westminster Association showed an overall commercial vacancy rate of almost 30 percent. 'The situation is pretty much the same today, ' says city planner Al Ng." Mr. Speaker, in response to that I say that we need some real assistance from the B.C. Development Corporation. They have not really gone in there and done the job that they should have with the First Capital City program. They told the responsibility to come into New Westminster and say: "Look, we're going to help you out." I think that there was a certain embarrassment because ICBC didn't go there, which, incidentally, would have been a tremendous move.

Let me just tell you what happened when ICBC didn't go there: the commercial development didn't follow. We've got the college. Now a college doesn't really give you very much commercial development. It's a fairly nice site for a college, but there's a better site up the hill. But that's neither here nor there. They should not have interfered with that. The money had been spent, the plan had been done and it should have proceeded, Just to give you some idea — and I wish the Minister of Transportation and Highways (Hon. A. Fraser) were here — we don't have a B.C. government building in New Westminster. So what did they do? They even moved the motor vehicle headquarters in New Westminster into Coquitlam. They spread all these offices all over....

Interjection.

MR. COCKE: The member can get up and answer my statement. I would be only too happy, but meanwhile it's my statement.

I say that it's time the government took New Westminster seriously. It's not a place that should be just given the back of someone's hand. It's a very important area in this province, and a very stable one.

MRS. JOHNSTON: In response to the member's statement, I would certainly concur that New Westminster is a very nice, liveable community. But some of the points that I think are important to mention certainly would revolve around the provincial government development that has taken place over the past few years in the New Westminster district. I can refer, of course, to the ALRT extension. It always amazes me how quiet that member for New Westminster is when it comes to mentioning ALRT or giving the government credit for taking the initiative to bring ALRT into New Westminster and serve his constituents. He did mention Douglas College, but it seems to me that there are provincial government functions in the city. I refer to the land registry office, the very lovely courthouse there and the Annacis crossing. which is going to assist his community as well.

I think that one of the most important things we should be paving attention to as far as New Westminster being somewhere in the middle is concerned is that it's a very important centre, and we're hoping that it will prove to be a stop-off for people who are going to be traveling to and from my constituency of Surrey.

I would concur that the money that is being and has been spent by the provincial government in the New Westminster area has not been receiving as much attention and publicity as it should have. We should be talking now about what the provincial government is putting in there: ALRT, and S375,000 on the Annacis Island bridge. I would like to have the member comment on some of the very major projects that have gone through, the positive things that the government has done for his community. I would be interested in hearing some support from that member for those initiatives.

MR. STUPICH: I'd just like to add a few words to the need for the government to undertake activities in communities other than the Vancouver area, and I exclude New Westminster from the Vancouver area. Many communities in the province have been hurt by government actions; other areas have simply been ignored. Nanaimo has had some attention in that it did have a significant amount of money put into the Duke Point development through BCDC. I said previously that I have nothing but respect for the way in which BCDC has been trying to establish some kind of major industrial activity in the Duke Point area, but it hasn't worked to this point.

What I'm wondering is whether or not BCDC should be working more with the community. Up to this time they have been reluctant to share any of the knowledge they're gaining in trying to make contacts throughout the world. Perhaps they're afraid that in letting the city council in on what specifically was happening, some information might get out that would be detrimental to their campaign. But in that they haven't been able to produce anything other than the Doman mill, which came right at the beginning, I would recommend that BCDC give active consideration to working closer with Nanaimo city council and at least share some knowledge with them so that the city council and the people of the community will have a better idea of what BCDC is working on.

Apart from that, government offices have been moved out of the community. The headquarters for Forestry is now in Parksville. The headquarters for Human Resources is now in Duncan. So it would seem as though regional offices of important services have been taken away from the main centre in that part of the island and moved into other communities, which certainly helps the other communities. On the other hand, the growth of Nanaimo into the suburbs — which has hurt Nanaimo — developed to some extent because of the anticipation that Nanaimo was going to continue to grow, not just because of what the government was doing by way of

[ Page 5932 ]

direct activity but because of the boom that was on and that people expected to continue.

I think the government has some responsibility to look beyond one area at a time. It's not enough to concentrate all attention on the northeast coal project and then to finish that and move all attention to one other part of the province. They should be looking at the needs of communities throughout the province. Certainly I would recommend to the government that they pay more attention to the needs of Nanaimo and try to work more closely with Nanaimo city council in developing plans that will help that community become a useful part of the province.

MR. COCKE: The member for Surrey indicates that New Westminster should be eternally grateful for transit, grateful for this, that and the other thing. Eternally grateful, my foot! There've been plans for years for transit to come into New Westminster. There has been a multiplicity of plans, and finally it's come around — mind you, a very expensive proposition, thanks to Bill Vander Zalm. In any event, let's see how it works. I hope it works better than some of the forecasters say. For example, there's no park and ride. Where you've got your terminal, there's going to be some difficulty getting to it. In any event, I do agree that transit, now that it's come, may as well go right on through to Surrey, and should also go into Coquitlam, one way or another.

Let's deal with the Annacis Island bridge. Some time ago I said in this House that we were thrice cursed in New Westminster. Through the middle of our town we've got the access to the Pattullo bridge — a transportation centre right through the middle. So that divides us in half right off the bat. To the east of our town all roads lead to the No. I freeway, so again we're cursed. Now we've got that marvellous Annacis Island creature coming through, dominating our Queensborough bridge. As a matter of fact, you can't even get home on the Queensborough bridge anymore, because it's so tight. But even when it's finished, they're going to take trucks up 20th St. hill, with a grade beyond compare.

They're building around a school in Queensborough, cutting that school off. I'm so angry with this government for not cooperating — either moving that school or at least permitting New Westminster to build a new one elsewhere. There's property that could be used. Instead of that, poor little Queen Elizabeth School is losing a lot of land and the children are going to have to go across some very heavily trafficked roads to and from school. It's the very opposite end of the area that it should be in, and that's because of government planning.

So we're not going to be eternally grateful. We'll be grateful when government will sit down with civic officials and come to some kind of amicable conclusion. When the ministers — and that particularly applies right now to Transportation and Highways — can sit back and not even bother to have discussions with the municipality, with the district and, in our case, with the city.... I'm speaking for New Westminster.

I feel that that town deserves a lot more than it's been offered. There are a lot more things to say, but one can't say it in this short period.

DEPUTY SPEAKER: During private members' statements the member for Okanagan North indicated that he would be tabling some material for the House, and I guess you're asking leave to do that now.

Leave granted.

HON. MR. SCHROEDER: I call second reading of Bill 16.

[11:15]

BUSINESS LICENCE REPEAL ACT

HON. MR. CURTIS: Bill 16 is another of several statutes which flow from the presentation of the provincial budget for 1985-86 fiscal year, presented in this House on March 14. This is the Business Licence Repeal Act, and while I don't intend to take very long speaking to it, I feel that it's appropriate to make two or three comments.

[Mr. Ree in the chair.]

Up to the present time and indeed until this bill receives royal assent, as I trust it will, the Business Licence Act requires all persons operating businesses in non-municipal areas of the province to purchase a business licence. In 1984 some 9,188 such licences were issued at a total cost of $510,241 to these businesses. It is difficult to accurately describe for the Legislature the cost to government of issuing the business licences, because that function is rolled in with a number of others; it is not a particular group of men and women who are dealing only with business licences. From the point of view of the taxpayer or of the firm which takes the business licence, the cost of obtaining such a licence frequently imposes an additional financial burden on businesses which have limited resources and which are already subject to a variety of provincial legislation, federal legislation and fees. Indeed, the act is seen by some businesses as establishing a tax which serves no regulatory function such as health, safety or zoning standards.

I might also point out that I have learned, as a result of my questions and inquiries, that the act from time to time has proven difficult to enforce. It's estimated, speaking of costs to government, that the cost of collecting the business licence fee exceeds the revenue generated from the licences. So to lessen this hardship, to encourage in part the formation of new businesses by reducing business startup and operating expenses, I saw fit to announce the elimination of this licensing requirement, retroactively effective to the start of this licence year, January 1, 1985.

Some things are not mysterious or complicated or veiled in bureaucratic reasons and contradictions. I simply asked a number of months ago: why do we issue business licences and collect the fees for them in non-municipal areas? And the answer, in effect, was: we really don't need to do it. It is a repeal act, and I hope that it has the support of the Legislature. I move second reading of Bill 16.

MR. STUPICH: The minister's hopes will be realized: the opposition will be supporting this legislation. But I think I must mention a few concerns raised with me by the hon. member for Cowichan-Malahat (Mrs. Wallace), who wonders whether or not there was some reason for establishing the business licensing procedure at one time, and that was some control over the kinds of businesses that might be establishing, and where they might be establishing them, some record of them, somebody knowing that these businesses are actually forming and are operating. She didn't

[ Page 5933 ]

mention this concern, but I wonder whether it would encourage small businesses to locate immediately outside of municipal boundaries in areas where they would not have to pay. It's hardly a significant reason to determine one's location of a business, but sometimes it may well be that if one has a choice of being on one side of the road or the other, that might make the difference. I don't know.

The main concern, I think, is whether there might have been at one time some regulation of these businesses and whether we're losing any of that, and whether the regional districts have used the information that might be available to them because the government was collecting business licences. I don't know. As I say, the member had some concerns about it, and was afraid we might be losing some control. I haven't heard of anybody expressing any concern about it, and I welcome it as a way of, as the minister said, relieving what for some small businesses is an onerous charge and also a nuisance.

MR. MITCHELL: I have some minor concerns. I really don't think we should look at the amount of revenue collected versus the needs, because I think if you really analyze the cost of a driver's licence, the cost of getting it is far more than $5. What it does do is give the opportunity to do some of the regulations, to make sure that there is some competency on the part of the person who is driving.

I have often wondered — and for one who worked a long time in the building trades — at some of the people who were issued licences, and then were going out preying on the public, because there was no mechanism for insisting that the person issued a licence had any competency. There has always been a feeling by the general public, if someone does have a licence, that obviously someone down the line has given a stamp of approval that he is competent.

If he's a plumber or he's putting on roofs or anything else.... When you have no regulations, there is going to be an upsurge in all types of businesses and, I predict, especially in the building trades where this happens. Very frequently, people move right through the town and go out and solicit business and do jobs that are really slipshod, and then they move on. At least when they had a business licence, you did have some type of address or something to follow up to find out where they may have come from or where they may have gone.

This is the one fear that I have. If you just throw it all open.... I really don't accept that the cost of a business licence is a deterrent to anyone who is in any kind of a legitimate business. But it's lack of some kind of control, control that I think the consumer needs when he is hiring people who are indicating that they are in a certain business when really they are moving in and out of the district and are not a legitimate operation that comes in, sets up a business and stays there for a long period of time.

Maybe we are throwing out the baby with the bath water by saying that it is not needed. In a lot of cases there has to be some protection and some understanding by the consumer, the general public, when they're dealing with a business, that he is a business and not just someone moving in and out of a community. That is my major concern, It's not the saving that may be made by an individual; I don't think that is ever a real deterrent,

HON. MR. CURTIS: I thank the House and the members for Nanaimo and Esquimalt–Port Renfrew for their comments.

I spoke, in opening the debate on second reading of this bill, about the cost saving. There are other aspects. The member for Nanaimo referred to one, and that of course is the nuisance. I think that to ease or to assuage the concern of the member for Esquimalt–Port Renfrew, I would point out that there are certain other regulatory licensing procedures, if you will. The list is by no means complete, but even with the repeal of the Business Licence Act, the process in non-municipal areas, these firms, as an example, would still be required to have an additional licensing qualification: barbers, hairdressers, electricians, dental technicians, locksmiths, engineers. And then, of course, one moves into the regulatory process that is imposed by health agencies, whether provincial or local. I think that the concerns expressed by the member for Esquimalt–Port Renfrew are really not worth.... We haven't thrown the baby out with the bath water. I think we are drying the baby off, to continue the analogy.

There's another aspect which, without taking much more time.... Occasionally the operation of a particular business at a location beyond the borders of a municipality is in fact contrary to a regional district zoning bylaw. Somehow, over time, the mere possession of a business licence by that firm or that operator has been seen as a way of legitimizing the operation: "Look, you can't do anything to me. I've got my business licence, and it's a provincial business licence." So from time to time the regional district will have some trouble with respect to the fact that that may be a non-conforming use under a zoning bylaw in that particular area — or an illegal use. more correctly, not just a non-conforming use. So I feel that the repeal of the business licence process is appropriate.

The member for Nanaimo asked whether — and I recognize that he played it down — this would be an incentive to locate just beyond a municipal boundary. I don't think that it will have an impact in that regard. More likely to come into play would be variations in the property tax rate — non-municipal versus municipal. That, of course, is something that legislatures here have discussed over many decades — the fact that the provincial property tax rate is significantly lower than that to be found in organized areas.

So this is just what it says: it's repealing business licences. I appreciate the comments and move second reading of Bill 16.

[11:30]

[Mr. Speaker in the chair.]

Motion approved unanimously on a division.

Bill 16, Business Licence Repeal Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. SCHROEDER: I call second reading of Bill 6.

ASSESSMENT AND TAXATION
(MISCELLANEOUS AMENDMENTS) ACT, 1985

HON. MR. CURTIS: This bill contains measures which accomplish five objectives. First is the creation of a framework for the elimination of the property tax on machinery and

[ Page 5934 ]

equipment for the 1987 and subsequent taxation years. There is also the introduction of measures to implement improvements to the property tax system suggested during last fall's extensive public meetings on taxation and economic development, including measures to assist owners of residential properties in developing areas, lessees of Crown property and non-profit organizations using school district property. It also provides for a $25 increase in the minimum property tax payable after the deduction of the regular homeowner grant. It approves the exemption of the ALRT system and the Expo 86 site from property tax. Finally, there are several administrative changes to the property tax system.

[Mr. Ree in the chair.]

The creation of a framework for the elimination of the property tax on machinery and equipment for 1987 and subsequent taxation years is, I feel, the most important measure in this bill. The tax will be eliminated by not assessing machinery and equipment installed after September 30, 1984, and by freezing the 1986 assessed value of machinery and equipment installed before September 30, 1984 at a level no higher than the level used for taxation in 1985. To explain to the House, that would be the value of the property on July 1, 1984, given its physical condition as of September 30, 1984, and then finally eliminating the tax for 1987 and following taxation years.

The measures are being introduced as part of the government's commitment to reduce all tax rates on machinery and equipment to zero by 1987. The tax on machinery and equipment, Mr. Speaker, raised $165 million in provincial school taxes and $25 million in other non-municipal property taxes in 1984. As I indicated in the budget, its elimination is a major change in industrial property taxation.

The tax is being eliminated only after very careful and comprehensive consideration and review. The factors which have been considered include the results of the Ministry of Finance comparative taxation study, which showed that the tax on machinery and equipment was one of the major differences between B.C.'s tax system and those in other jurisdictions, and the comments and observations received during last fall's public meetings on taxation and economic development. That circumstance clearly indicated that this tax was widely considered to be one of the major tax-imposed constraints on new investment.

So the measures contained in this bill, together with the other complementary actions the government is undertaking, correct a situation such as this in a clear and a very decisive way. The members will not want to hear much more about the tax study last year, except to indicate that during these meetings I received a host of suggestions in all parts of the province from British Columbians regarding ways in which the tax system could be improved. The bill contains, therefore, a number of actions in direct response to these suggestions after careful consideration.

The bill contains a measure, Mr. Member for Esquimalt–Port Renfrew (Mr. Mitchell), which will permit taxpayers who have owned and occupied a residential property for more than ten years to have that property assessed at its value for its existing residential use. This protects individuals whose property has a much greater value for some other purpose from unreasonably high property tax, "unreasonably" being the adjective in terms of residential use. So this measure replaces a section of the Assessment Act, which conveys the same benefit to individuals who have owned and occupied residential property since 1959.

As the interjection by hand indicated just a few moments ago, I trust that this measure at least will be welcomed by members on both sides of the House. Several members in the official opposition and on the government side have approached me personally suggesting such a change, and indeed government works best when that kind of contact occurs. The member for Esquimalt–Port Renfrew and I will disagree on a variety of matters, but we did exchange correspondence on this. He brought a specific case to me. We met about it, we talked about it and, Mr. Member, I am delivering today.

The bill also contains a measure which specifies that properties held under a Crown lease or similar arrangement with an exempt property holder are to be assessed at their value for those uses permitted by the lease. Mr. Speaker, this simply means that lease restrictions or restrictive covenants which are used as a type of zoning on Crown land will have the same effect on assessed value as municipal zoning restrictions. This measure was also suggested by a number of citizens of the province, most notably, I think, by members of the British Columbia Interior Fishing Camp Operators' Association.

The bill also contains amendments to the Municipal Act, which will permit municipal governments to exempt school district property used by specified non-profit organizations from property tax. Mr. Speaker, I know that the more attractive member for Surrey, by far — the other one is here, but I'm speaking of the lady member for Surrey (Mrs. Johnston) — will recall that this was the topic of considerable discussion, concern, confusion and alarm during the public tax meetings held in that constituency of Surrey.

This will permit local governments to more effectively utilize school district properties that have been vacated as a result of, by example, declining enrolment in our public schools. These buildings clearly provide a very important and readily accessible resource to many non-profit organizations which are performing very valuable community services in all parts of the province.

This measure, as I say, is in response to fairly strong representations made: the Burnaby School District — the chairman was present; the Coquitlam School District — the chairman was present. Representatives of many non-profit organizations were also there: Boy Scouts, Girl Guides, just a host of our standard, traditional and important non-profit organizations, saying: "Why are you doing this? Why has this happened?" Well, it was not a conscious decision of government. It was not a conscious decision of assessment legislation. It simply happened. It was one of those which was caught up, and we are correcting that. So we will no longer have the concern that a non-school use of a school building is trapped by existing legislation and therefore subject to property tax through the assessment process.

Another provision contained in Bill 6 will permit Crown or other exempt property to be exempted by regulation from property tax where the land is held under certain tenures. This is being done to ensure that where property is occupied under arrangements that permit only limited use of property for a relatively short time period, the tax is not levied. An example — and perhaps the most outstanding example — of the correction that this will bring about is in a tenure associated with a grazing licence.

[ Page 5935 ]

1 can say again that in the interior, in the Cariboo — but not exclusively because it was raised, I think, on northern Vancouver Island and in several parts of British Columbia — it was seen to be unfair that because someone is given a grazing licence, which is a narrow and, in time, limited access to a piece of property, that suddenly through the assessment and property tax process it is taxed. So we are correcting that and I think that that has been well received since budget day.

Several other measures raised at the public meetings last fall and being implemented through this bill include: the addition of manure storage facilities to the list of properties that are exempt as pollution control facilities, which was suggested by the British Columbia Federation of Agriculture; the broadening of the assessment appeal provisions in the second year of the two-year assessment cycle; a provision to permit the appointment of a specialized industrial assessment appeal board, or boards, if that is seen to be appropriate; a reduction in the information-gathering authority of the British Columbia Assessment Authority — that point was raised by, among other organizations, the British Columbia Chamber of Commerce; and the elimination of costs to taxpayers of assessment appeal board-ordered inquiries. This was suggested by an individual who is known to a number of us as a student of the assessment process in British Columbia, Mr. J. R. Lakes.

[Mr. Strachan in the chair.]

Mr. Speaker, as I indicated, the bill also increases the minimum real property tax payable from $175 to $200 a year, as of January 1, 1986. This means that all homeowners who receive the regular homeowner grant will be required to pay a minimum real property tax of $200. But it is important to note that those homeowners who receive a $630 homeowner grant — that is those over 65 years of age, those handicapped or in receipt of a war veteran's allowance — will continue to pay a minimum tax of $1.

[11:45]

The increase in the minimum real property tax is, in my view, consistent with the government's position that all property owners should contribute something towards the cost of providing local or quasi-local services. The new minimum tax will provide $1 million in additional revenue in the first full year of operation — that is, in the 1986 property taxation year,

The bill also contains measures which exempt the ALRT system and the Expo 86 site from property taxation. The ALRT system is being exempted as of January 1, 1985. for three reasons. First, it is seen that the government sees that ALRT is a transportation facility, and since there's no property tax on provincial roads, bridges and other similar properties, there should be no property tax on ALRT. All lower mainland municipalities contribute to transit costs, but only three — the city of Vancouver, the district municipality of Burnaby and the city of New Westminster — would benefit from property taxes generated from this system.

This effectively reduces the share of the ALRT operating costs paid by those three municipalities, thereby making the cost-sharing formula inequitable. There is another consideration, and that is that ALRT, with a projected capital cost of $800 million, is a very significant project. As a result, it seems that it is in the interests of everyone to keep costs of that system as low as possible. Exempting the system from property tax is consistent with this goal.

The Expo 86 site is being exempted — also effective January 1, 1985 — because of the temporary nature of the fair and because the companies and exhibitors have been invited to British Columbia as guests, Bill 6 also introduces measures to implement several administrative changes to the property tax system. One permits changes to land titles ordered by the Ministry of Transportation and Highways under the Highway Act, to be reflected in the assessment of property. This corrects an inequitable situation where property acquired for highway purposes is sometimes assessed for property tax in the name of the previous owner for several years after its acquisition.

Another administrative change restores a tax exemption for British Columbia Railway properties, where leases expire after the close of the assessment role but before the commencement of the taxation year.

In sum, it could be said that by eliminating an unfair component of the property tax system by incorporating the suggestions made by many British Columbians, this bill builds on other improvements which have been made to property taxation in recent years. I might indicate that we had a host of suggestions and recommendations received in the course of the many meetings in the taxation study tour and two years ago in the property tax and assessment study. It's impossible to accede to all requests — indeed, some were found to be wanting after careful analysis — but we have moved significantly, I think, in terms of responding where there was a clear and appropriate opportunity to do so. I think this will give British Columbians one of the fairest and most efficient systems of local government taxation in North America. I move second reading of Bill 6.

MR. STUPICH: Mr. Speaker, the opposition will support this legislation. I think some of my colleagues may want to discuss some of the sections at this time, but in general we prefer to deal with the bill in committee stage. I think the Speaker and the minister will agree that that's the way to handle it. As I say, some of my colleagues may want to say something now, but not to any great extent.

With respect to the hearings, I have to say to the minister that I approve of this method of bringing in this kind of legislation. There were the opportunities for people to make their presentations, and the minister reacted. He suggested during the course of his remarks that maybe we didn't want to hear any more about these hearings, because he keeps talking about them. On the contrary, Mr. Speaker, when the minister is presenting his estimates, I think it would be well to give some kind of a report on the hearings. This is a positive response to requests that were made from some people. There may have been other requests, other positions put forward that the minister has rejected permanently or temporarily; I don't know. There might be something to report there. There may have been some arguments that some of the propositions raised were going to be good for the economy, not just for the immediate recipient of the credit — tax reduction, whatever — but for the economy totally. That's what's missing in the legislation before us right now.

When I spoke in response to the budget, I raised that same concern: that there were a lot of gifts in there to business and to industry, but nothing to say that business and industry were going to contribute anything to the economy in response. I raised the concern that business and industry would simply

[ Page 5936 ]

pocket the money that government was forgoing by way of tax increases and had no feeling that they owed the government or the people of British Columbia anything in exchange for what they were getting. Included in this, unfortunately, is a tax increase; I say unfortunately because the bill generally reduces taxes, but there is that section increasing the tax for property owners. Somebody has to pay the money that the government is giving away, so it's going to the property owners. While it may not seem like much, it is a 14 percent increase on generally the poorer people; not the poorest, but the people who are going to be paying that extra $25 are in the low-income groups, There can be little question about that, generally; there are specific individuals, of course.

That's one concern I have. In voting for this legislation, I am in general, in principle, supporting that. I may very well not want to do that when we come to the committee stage.

Another concern is that the minister said that with respect to ALRT and Expo it's important to keep down the costs. As the second member for Vancouver East (Mr. Williams) interjected, it's rather late for that. Apart from that, we are not reducing costs. The costs of operating the city of Vancouver are going to be just as high, whether we say that this particular area covered by these projects is going to pay anything to them or not. In effect, what we're saying to the other property tax payers is that they are going to pay more because we are not allowing any of the costs of operating the city to be assigned against these particular areas. I think it might have been better had the government let the city include these in their tax roll and then made a grant in lieu of taxes by that amount, and recognize.... Are we ashamed of what it's costing for ALRT? Are we ashamed of what it's costing for Expo? Why not calculate those costs in the normal way, on whatever the assessment is, and then give a grant by way of reducing the tax, if you like, so that at least we are recognizing the total cost of the project? We'll know what it costs us for those things; good or bad, we'll know the story at least. We could do this with many things. We could close our eyes to the fact that these things are costing us money, and say they're not going to bear any share of the costs; somebody else can bear it.

I have some concern about that principle. I'm not, at this point, voicing objection to it; I'm just saying I have some concern. But the opposition will support the legislation in second reading.

DEPUTY SPEAKER: With respect to the member's first comment on second reading debate, I have examined this bill, and the member is absolutely correct. Although the bill is from one ministry, it does decidedly have the format of an omnibus bill, ranging among subjects as varied as the BCR to manure storage. It would be most appropriate, I would presume, to get into the substance of the bill in committee stage, as we normally do, and that would be agreed to by the House.

MR. MITCHELL: I normally would accept your suggestion right off. That's the way I normally would have dealt with it. But as the minister did mention some of the work that I had done on one section.... I won't mention section 5 if it's out of order.

DEPUTY SPEAKER: It's no problem, hon. member. I do not want to frustrate debate in second reading. I just pointed out that we have an omnibus format before us.

MR. MITCHELL: I understand that. I really want to get up and thank the minister for listening to all the speeches I made in the House on this and the arguments I put forward on the lifting or giving credit to people who have lived in an area using property as their residence, but because of new zoning, new assessment for other uses, then their taxes went sky high, as in the case that I kept referring to: it went from $37,000 to $240,000, and it was just impractical for a person to pay those taxes and still live in a residential home.

The only thing it did deny me is that I prepared a private member's bill, and my private member's bill would have followed the system that originally came in in 1964, which gave a five-year.... When the original legislation came in in 1964 it went back to 1959, which was a five-year leeway — which was in my private member's bill. But as you get older.... I can live with a ten-year period, and I think the intent was well worth all the arguments and letters I wrote to the minister. I publicly thank him on behalf of Mr. Smythe and his family.

MR. WILLIAMS: I'm one of those who appeared before the minister when he was holding his hearings on these questions. The major thing the bill does is deal with the removal and the phasing out of the machinery and equipment tax. I think that makes sense in British Columbia, where we have a mammoth retooling job to undertake in our major industries. The expert Prof. Nilsson from Sweden, who has now reviewed the sick state of our forest industry, has concluded that $35 billion should be expended in trying to bring us up in terms of technology and the kind of machinery we need for a truly modern industry. That's a big lump. At the same time, it is worth reflecting on what we presently have. When one glances down the list of beneficiaries, it's pretty clear: it's our major pulp mills, the oil refineries, and the like, the aluminium company, Cominco, the major hard-edged industrial side of the province. It's a lot of money. In terms of what it will mean for MacMillan Bloedel, it's something like $11 million in benefits in terms of their major operations, once this is phased out. That's very significant.

I endorse the principle, but I think on reflection, when we have a serious problem of not retooling in British Columbia, where these industries historically have not rebuilt, particularly on the coast.... We have a modem industry in the interior, with respect to sawmilling at least, not so much with pulp. But the retooling didn't take place on the coast of British Columbia, and the funds, the rents, the profits were dissipated in external investments by these major companies, most of them unsuccessfully. MacMillan Bloedel in particular made classic mistakes in investing rents and profits abroad.

[12:00]

So it does seem to me that the more sophisticated approach on the part of government, on reflection, is to think about the trade-offs, and the trade-offs should be modernization of plant and a program that is put forth. If we're conceding tens of millions of dollars in forgone revenue for MacMillan Bloedel, from the aluminium company, from Cominco and from the major operations of the province, then we should think about that.

Yes, indeed, we have this major problem on our hands in terms of retooling our basic industries. But it isn't just good enough to say: "Let's wipe it out." I would think the more sensible, sensitive thing would be to relate this to programmed renewal of this industry, so that there is a more

[ Page 5937 ]

realistic trade-off. Now we have a highly leveraged industry in this province — far too highly leveraged. The forest industry of British Columbia has borrowed too much money. They're in debt to too great an extent, so they have a serious problem in terms of pulling the capital together for the renewal that has to take place. The likely prospect is that the forest industry.... I've seen quotes in the paper in the last few months that the first thing they'll do when they get any loose change is to pay the bank. That isn't going to create any jobs in British Columbia; it isn't going to get new plant construction going either. I think we have an interest. If we're thinking in terms of an integrated approach to these very serious problems, then we simply should have been a little more sophisticated and not done an across-the-board number. We should have done some analytical work with other ministries of government....

AN HON. MEMBER: Which ones?

MR. WILLIAMS: Which ones indeed. The Ministry of Industry and Small Business, Ministry of Forests, Ministry of International Trade and Investment, Ministry of Finance. Maybe between them you'd pull something together and talk about a sophisticated, smart industrial renewal program in British Columbia.

When you're talking about tens and tens of millions of dollars in tax concessions, the public has every right to expect something on the other side of the ledger. It's not quite enough to say: "Well, these are businessmen who will make sound decisions, etc, etc." We should be more businesslike ourselves and say: "We've got a problem here." Professor Nilsson says it's a $35 billion problem. The unemployed will tell you it's a 220,000 person problem, and so on. The pieces can be fitted together, but that's not happening in terms of this legislation. It's simply moving away from this area of taxation.

As I said, I think that's legitimate, but it's more important, in my view, not to tax new equipment and new machinery, in fact new construction — and I've indicated that before to the minister — if we want to get our construction people back to work; if we want to move people to invest the great amounts that have to be invested in terms of rebuilding this fractured provincial economy. To do it just like that, without a lot of coordination with the other ministries and with the industries themselves, is I think missing the critical initial opportunity in terms of industrial rebuilding in British Columbia.

MR. DAVIS: Mr. Speaker, very briefly on two topics. Taxing machinery and equipment is one of them; the other is elimination of municipal taxes on light rapid transit corridors in the lower mainland.

First I want to congratulate the minister for going out into the province and spending a good deal of time traveling, hearing points of view from many British Columbians — individuals and municipalities as well as business and industry. I congratulate him for taking that listening stance, for showing in this bill that he did listen. I congratulate him also for changing direction in several respects, notably in the machinery and equipment area. I well recall legislation in the last couple of years where the government was moving in the opposite direction, extending the tax on machinery and equipment by revising the definition of improvements. I opposed that legislation at the time, and I'm happy now to see that the advice the minister is taking from people across the province is to reduce taxation on machinery and equipment, rather than to increase it.

The second member for Vancouver East (Mr. Williams) focuses on large companies. Many small businesses also have to invest in machinery and equipment. So this change in taxation — the phasing-out of the taxation of machinery and equipment — is good news right across the spectrum of business, large and small. Indeed, in small businesses that are capital intensive it's good news indeed. I would say it's good news to most if not all kinds of business.

I'd say it's good news particularly in British Columbia, because in most jurisdictions across North America there is no such tax. In a few provincial jurisdictions in Canada there was a lesser tax — a much narrower definition of machinery and equipment, a stricter definition of the word "improvements." British Columbia taxed machinery and equipment more extensively and harder than other provincial jurisdictions. In the United States, very few individual states have a tax which in any way resembles the machinery and equipment tax and the tax on improvements that we have in this province. So to phase it out, I think, is to not only relieve business and industry from a tax which has been troublesome, especially for those who had heavy capital investments in improvements to make, but also to put us substantially on the same basis as other jurisdictions. In other words, a new industry coming to this province won't look on British Columbia as a high-tax province from the point of view of taxation of improvements and taxation in the form of machinery and equipment. particularly taxation on new investments in technologically important innovations in that area. I think that's important, and that's one of the reasons I am voting for this legislation.

In the other area, the elimination of the possibility of municipalities taxing the ALRT right-of-way and other property zoned by B.C. transit, the opposition would have to admit that had their ancient system been adopted, they would nevertheless have used the same rights-of-way and many of the same properties. In other words, the property question would have arisen regardless of the nature of the hardware used to move people in large numbers in the lower mainland. They would have had to decide whether or not certain municipalities — those few which were fortunate enough to have the installation of ALRT in their own municipal boundaries should have that additional tax base.

ALRT is only part of a larger public transportation system. Buses will continue to carry more people than light rail rapid transit. They are an integrated entity. The passenger will be able to move from one to the other using transfers and so on. So for a limited number of municipalities — in the short run just Vancouver, Burnaby and New Westminster — to have this opportunity to tax in effect the whole system is inequitable.

Another consideration is important. The province decided early on not to try to finance the system by a special tax regime which would take advantage of enhanced property values around stations. The opportunity for enhanced property value capture has been left to the municipalities. The municipalities that have the ALRT and new stations will over time gain revenue at least in those areas, and that's an opportunity which the other municipalities, having only buses, will not have.

Interjection.

[ Page 5938 ]

MR. DAVIS: I'm simply saying, Mr. Speaker, that the province decided not to get into the business of buying up properties or zoning areas around stations with a view to capturing a substantial portion of the capital gain. That opportunity was left explicitly to the municipalities.

MR. WILLIAMS: To the private owners.

MR. DAVIS: To the private owners, but the municipality can tax the private owners. Regardless, that property tax element was left to the municipalities. That opportunity was left to them, and because those host municipalities have that opportunity, that's another reason for denying them the opportunity to tax a right-of-way which is now being treated as a highway by the province. Treating it as a highway, the province is involved in a capital expenditure which will not be taxed, will not therefore appear in the accounts of B.C. Transit and will not be paid directly out of the pockets of the users of the system.

So I think there are two reasons why the tax should not be levied by those municipalities fortunate enough to have the rail line within their boundaries. One, they would have obtained revenue indirectly from other municipalities where only buses operate. The other reason is that they have every opportunity to take advantage of enhanced land values within their own area of jurisdiction.

HON. MR. CURTIS: Mr. Speaker, I thank the members in order — the member for Nanaimo (Mr. Stupich), the member for Esquimalt–Port Renfrew (Mr. Mitchell), the second member for Vancouver East (Mr. Williams), and the member for North Vancouver–Seymour (Mr. Davis) for their comments on what you observed, sir, is an omnibus bill, in effect.

The hon. member for Nanaimo spoke about the tax hearings. I simply felt that I was perhaps becoming a little tedious and repetitious in speaking of the tax hearings. If the member wishes to question me further on those hearings and the comments, observations, submissions and suggestions during the debate on my estimates, which I believe are scheduled for late August...

AN HON. MEMBER: Of 1985?

HON. MR. CURTIS: August 1985, yes.

...then I think, Mr. Speaker, that that would be appropriate. I will be able to offer a few thoughts that may be of interest and of use to the members.

The member spoke about savings through this bill that will accrue to business and industry. I paraphrase slightly, but I think he said, will they simply pocket the proceeds? Whereas the member for Vancouver East spoke about not pocketing the proceeds — I speak here of machinery and equipment — but will they pay off their bank loans? Perhaps they are going to try to restore their balance sheets first, and frankly that leads to health in the economy.

The member for Esquimalt–Port Renfrew and I had the exchange earlier and have had for two years about the so-called 1959 rule, and I'm pleased that that's behind us. It's done, and the tenure is, I believe, fair.

It is interesting to note that members on both sides of the House, with many philosophical and political differences — a variety of differences of opinion — endorse the principle of removing machinery and equipment from property tax. Indeed, my colleague, the member for North Vancouver–Seymour observed that we are certainly in the minority in North America in imposing property tax on machinery and equipment. There could be a legitimate discussion as to how it should be done, why it should be done, and what trade-offs might be sought with the benefiting businesses and industries — the very large ones. The second member for Vancouver East identified some of the firms but did not intend, I'm sure, to identify all of them; there are many.

I opted for this particular route after very careful consideration and consultation within the study group. I could not attempt, and would not propose, prior to the introduction of the budget and this bill, some kind of trade-off — "Industry, would you do that if we did this?" I think that would be in contempt of this legislative process. Alternatively I'm not sure that I wanted to put certain requirements in place after the fact, after the budget, after the legislation was introduced — "Industry, we need you to do that before we will do this." In other words, let's operate with everything above board; let's just clear the decks in terms of machinery and equipment; but let's take three years for the phase-out.

So there's predictability for the industrial and commercial taxpayer, particularly the commercial taxpayer, because a lot of them are still involved, notwithstanding the increase in the exemption level of some two years ago from $1,500 to $50,000 of assessment. But let us get this inequity out of the way in British Columbia. Let's fall into line with many other jurisdictions in Canada and the United States. Then let us, on a straightforward basis, urge, encourage, push industry to undertake the plant renewal about which the member has spoken, and the plant expansion about which all of us have spoken, and coordinate that activity through other ministries.

[12:15]

1 feel that the phase-in is particularly appropriate, especially when one considers the front-end loading of no tax on new machinery and equipment installed now — the phaseout of the other stuff. I concede that it could have been done any number of ways. I certainly won't stand in this House today and say that this is the only way. I believe it to be the best way — again, after the kind of consultation which occurred around the province.

Interjection.

HON. MR. CURTIS: Three years, indeed.

The member for North Vancouver–Seymour is not in his seat at the moment, but he quite correctly pointed out that I changed direction with respect to new M and E under construction, under placement. And he opposed it. He's right; the records will show he opposed that move at that time. I say to the House that on reflection, in retrospect, I probably did the wrong thing two years ago. It seemed appropriate at the time. We thought it out quite carefully then. But it was, on reflection, not the correct thing to do. The main point is that I can admit that, that I can say that. Having made what was later seen to be an incorrect move with respect to taxation of machinery and equipment — or certain parts of it — we've now corrected it, and I think that those with whom I've spoken since the budget will forgive the earlier wrong move and welcome this correction and the much broader move.

It is an omnibus bill, Mr. Speaker. It's an important bill, though, because it really represents the kind of property tax reform that I think a lot of British Columbians — small

[ Page 5939 ]

taxpayers and large; whether they are headquartered here or in other parts of Canada; and those who are considering locating here or expanding here — have welcomed since the afternoon of March 14. I look forward to debate and division and agreement and disagreement in committee stage, and I move second reading of Bill 6.

[Mr. Speaker in the chair.]

Motion approved unanimously on a division.

Bill 6, Assessment and Taxation (Miscellaneous Amendments) Act, 1985, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. SCHROEDER: I call second reading of Bill 17.

BRITISH COLUMBIA TRANSIT
AMENDMENT ACT, 1985

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill 17, the British Columbia Transit Amendment Act, 1985. Specifically, this bill amends section 23 of the British Columbia Transit Act. The effect of the amendment, as members will have learned on budget day, is to increase B.C. Transit's statutory borrowing limit from $900 million to $1.5 billion, an increase of $600 million,

The statutory borrowing authority that will be remaining as at March 31, 1985, for B.C. Transit is estimated to be at $152 million. Mr. Speaker, this amount is sufficient to meet B.C. Transit's projected borrowing needs until the end of the third calendar quarter of 1985. However, for the entire provincial government fiscal year, 1985-86, it is not sufficient to fully cover the needs of B.C. Transit.

These borrowing requirements include funds for capital projects to replace or upgrade existing assets of B.C. Transit and funds for phase one of ALRT, for which construction will be completed on time by December 31, 1985, and within the construction budget of $854 million.

Borrowing will also be required to cover interest during construction, and interest and operating expenditures during the initial three-month startup period commencing January 1, 1986. The bill ensures that B.C. Transit will have the increased borrowing authority to $1.5 billion, which will be sufficient to meet borrowing needs for all capital projects of B.C. Transit over the medium term.

Mr. Speaker, I move second reading of Bill 17. It is similar to other bills which have been presented by this government and former governments from time to time, increasing borrowing authorities for very large Crown corporations.

MR. WILLIAMS: Mr. Speaker, these borrowings are for phase one, which is the downtown Vancouver–New Westminster line, for interest during construction and for the three-month initial operating costs which are going to be rolled into the long term of the ALRT system. Those seem to be the major items that the minister has announced. But the borrowing brings us up to $1.5 billion, so this doesn't include the possibility, I presume, of the extension into North Surrey or other major extensions. I hope the minister might comment on that.

[Mr. Ree in the chair.]

We should really pull back and look at the system these people have built. You know, we should compare it with what exists elsewhere, and we should think about who is getting the benefits. Just this morning the minister talked about how unreasonable it would be for the three municipalities that benefit to tax the system. You almost have to pull back and think a minute and say: "You mean there are only three municipalities in the lower mainland region that initially benefit from this billion-dollar system?" That's right. It's a limited linear system going from downtown Vancouver, through the southeast part of the city and through south Burnaby to downtown New Westminster. That's it. Like the man in the Chevron commercial says: "That's it." And it's a billion dollars later.

[12:30]

Who isn't going to get served in the lower mainland region by this billion-dollar boondoggle? Well, look at them all: North Vancouver district, no service over there, Mr. Forgotten Member; North Vancouver city, no service over there; West Vancouver, no service over there, Mr. Dean of Social Welfare; Richmond, no service there out in the peat bog; Coquitlam, no service there — we're getting letters from Mayor Sekora saying: "Gee, we'd like some service out here." — Port Coquitlam, no service out there; Port Moody, no service out there. Langley, no service there; Delta, no service there; and all the little villages as well.

Interjection.

MR. WILLIAMS: Like Maple Ridge. It's not a little village. I was thinking of Belcarra and Lions Bay as little villages. But that's true, Maple Ridge is excluded as well.

It's going to stay that way, you know. Nobody can afford to extend that kind of system on a grand scale, not even the most profligate people in history in building rapid transit — and that's what we've got over there. Just to extend into little North Surrey is another $300 million bill. Just into North Surrey.

You've got an incredibly inflexible, costly system on your hands here, and all kinds of communities are not getting the benefit of the rapid transit system. So the answer is....

The minister responsible for transit says: "Well, we're going to solve the congestion problems in downtown Vancouver." Well, really? I wonder if that minister or this minister knows what the estimates are that they're working on, in terms of travel to work. How many of the people traveling to work will use this system?

Well, your number-crunchers say 9 percent. I've talked to one of the world's experts in the field and he says he thinks it's 7 percent. A billion dollars to serve 7 percent of the working population to and from work. What's wrong with you people anyway, in terms of your spending priority and understanding these things, and carrying out the analysis? It just isn't there. There's nobody home. There's nobody home over there. A billion dollars, and we get the lightweight responses from the minister and a few of the back-benchers, saying: "Oh, we built it this way because we don't want any gates at the streets."

MRS. JOHNSTON: Who said that? Name the names.

[ Page 5940 ]

MR. WILLIAMS: Who said that? Some of your colleagues said that, madam. Just check Hansard.

MRS. JOHNSTON: Typical NDP.

MR. WILLIAMS: No, no. Your former friend who abandoned you, Bill Vander Zalm, said it. I've been at public meetings where he's said it. Look, you bought this high technology solution on some kind of hare-brained basis.

So what we're saying here is that most of the communities in the lower mainland aren't getting service, let alone rural British Columbia. What we're talking about here is a cost equal to the existing bus system in Vancouver. We move 90 million people a year in the greater Vancouver system, and we do it well with a surface system. And you're willing to throw the same bundle annually at this single little linear system using the Central Park and Interurban lines. It's absolutely amazing.

I talked to one of the foremost U.S. experts in this field. What are the real numbers in terms of cost per ride? His analysis indicates that it's in the $12 range — $12 to $16 — depending on the assumptions and interest rates. Isn't that incredible — $12 to $16 a ride? We could all ride in taxis for that money, couldn't we? And it would be labour-intensive. One of the professors I talked to said: "For the amount of money you're spending on that system, you could put the people of False Creek in new housing" — for the same kind of money, almost. So let's compare it with some of the other systems that are around in terms of cost.

Interjections.

MR. WILLIAMS: We've got some real experts over there — the professors from Newton and Whalley.

DEPUTY SPEAKER: Order, please. All members will have their opportunity to stand in debate. Would the members, when they're debating, address their comments to the Chair.

MR. WILLIAMS: Edmonton has got a rapid transit system. What's its cost? The cost is $9 million per kilometre. That's Edmonton's system. Calgary's got a system — $13 million per kilometre. Portland has a system — $11 million per kilometre. What about San Diego? It has an excellent new system, a conventional surface system. It's called the "Tijuana Trolley." I've been on it and it's impressive. They built that right from downtown San Diego, using existing trackage and existing technology, at $3.2 million per kilometre.

Interjection.

MR. WILLIAMS: I'm sure it was. I'm sure that's a critical.... Do you really think that we're talking about labour-intensive things here? The number of workers on these systems is modest. You talk to the carpenters now, and you find that there are only three carpenters on a downtown highrise site. We're in the age of technology. These are not labour-intensive projects — unfortunately.

The San Diego system: $3.2 million per kilometre. What about ours? What about our system in Vancouver, to New Westminster? The number, at last count, keeps changing, going up: $33 million per kilometre for the Vancouver system, and we're only serving a part of three municipalities.

Interjection.

MR. WILLIAMS: It does take a financial genius to spend that kind of money.

The San Diego system is a 26-kilometre system, going from downtown San Diego to Tijuana, on the Mexican border. It was completed in two years, for a total of $85 million, 10 percent of what you're spending here. It was built at grade, using existing streets and rights-of-way. It was completed $500,000 under budget. The transit board representative, Mr. Larwin, says: "When you get into new technology, you haven't had any experience in knowing how to correct problems." He compared their system with ALRT, and he noted that their line was built in half the time at a tenth of the cost.

There is an interesting comparison for us here on the west coast: a system that is infinitely more flexible, one that can integrate with existing railway lines. The member for Richmond (Hon. Mr. Nielsen) and the member for Dewdney (Hon. Mr. Pelton) should be concerned about that. There's no way in the world that this line could be extended to Haney. Imagine what it would cost to extend this costly, concrete, lumbering thing to Haney. The obvious thing to do is to use existing technology on existing rail lines. If we're going to service the community of Maple Ridge and the northern parts of Coquitlam, Port Coquitlam, then that's the obvious system to use: the existing CPR line. That option isn't there with respect to this system. We have this incredibly costly system....

Interjection.

MR. WILLIAMS: No, no. All the information is available in terms of comparing others. Compare the other systems on this coast, in Portland and San Diego, and we've got a model to look at.

What we're doing by making this decision is really freezing out full service to the rest of the region because of the high cost that we're saddled with here. Just think of it: we've now got an annual cost, now that ALRT is thrown into the budgeting, that's equal to the bus system in greater Vancouver, in terms of annual cost, and yet it's a system that will only carry 7 percent of the workforce. Just think about it in terms of what you're delivering, whom you're delivering it to and what a burden you're laying on the public for some 30 years, with a fancy balloon mortgage that I'd like to talk about a little more on another occasion.

I would move adjournment of this debate until the next sitting, Mr. Speaker, since I understand some plans have been made.

Motion approved.

Hon. Mr. Schroeder moved adjournment of the House.

Motion approved.

The House adjourned at 12:40 p.m.