[ Page 6407 ]

CONTENTS

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

On vote 30: minister's office –– 6407

Hon. Mr. Curtis

Mr. Stupich

Family Law Reform Amendments Act, 1985 (Bill 34). Hon. Mr. Smith

Introduction and first reading –– 6411

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

On vote 30: minister's office –– 6411

Mr. Lea

Mr. Howard

Mr. Davis

Mr. Stupich

TUESDAY, JUNE 4, 1985

The House met at 10:04 a.m.

Prayers.

Orders of the Day

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

ESTIMATES: MINISTRY OF FINANCE

On vote 30: minister's office, $189,239.

HON. MR. CURTIS: Good morning. For the benefit of committee members, I would like to make a few introductory remarks in support of the 1985-86 estimates for the Ministry of Finance.

Joining me on the floor of the chamber in a few moments will be the deputy minister, Dr. David Emerson, assistant deputy minister Hugh Ferguson and the estimates coordinator, Mr. van Iersel. Other officials are standing by in this building in order that if committee members have questions that might be somewhat difficult to answer immediately, they will be able to provide me with the appropriate answers.

The 1985-86 estimates for the Ministry of Finance comprise four votes: the one which is before us now, vote 30, and then the subsequent votes providing for the operation of the six ministry divisions including the Purchasing Commission and funding for the B.C. Assessment Authority and appeal boards; the third vote providing a grant to the Provincial Capital Commission in the greater Victoria area to assist in financing their operating costs; and finally, the vote to provide for the operation of the office of the commissioner of the compensation stabilization program.

Mr. Chairman, I should observe that while I also have been assigned responsibility for the commissioner of critical industries, that funding is contained in legislation which is still before this House. I will attempt, within the limits of debate, to deal with that topic.

Proposed total spending for these four votes amounts to $58.7 million. That is down $0.4 million from the comparable estimates for 1984-1985. Notwithstanding this decrease, it might be noted by the committee that the ministry has been able to accommodate the transfer of the computer systems purchasing function from the B.C. Systems Corp. and has been able to allocate over $600,000 for a new public sector purchasing policy. Excluding these items, the decrease in spending would have been 3 percent.

The Ministry of Finance has been able to reduce its expenditure requirements through continued emphasis on increasing productivity. Examples of recent ministry initiatives include: work simplification and productivity improvement projects — for example, forms reduction in the office of the comptroller-general and forms redesigned for the revenue division; further reliance on computer and office automation technology — examples there would include further reliance on microcomputers throughout the ministry and the purchase of automated mail-opening equipment for the revenue division; and consolidation of organizations and offices — as an example, consolidation of consumer tax offices with other offices in the various parts of the province.

While ministry spending has been reduced somewhat this year over last, all essential services are being maintained. I might cite the B.C. Assessment Authority as an example, where, although the provincial grant is down 15 percent from last year, increased efficiencies have ensured that there will be no increase in the property tax rates for funding of the Authority's operating costs. There is a real saving not only to the provincial Crown but to the citizens of British Columbia, who support that Authority through their property tax bills.

The ministry's 1985-1986 budget was not easily achieved. Conscious shifts of the ministry's limited resources had to be made. This includes a fairly dramatic move of resources to the Purchasing Commission, which has been assigned one of the several major initiatives for the overall economic renewal in the province, becoming more proactive rather than simply taking orders and filling them. Other areas, primarily administrative and central support services, have had to make some sacrifices. The ministry continues, in my view, Mr. Chairman, however, to do more with less.

A key responsibility for the ministry, naturally, is revenue collection. I should observe at this point the appointment, which took effect yesterday, of Philip Halkett — who is known to a number of members of this Legislature, having served as director of taxation and intergovernmental affairs within the ministry — to assistant deputy minister of revenue. He succeeds Keith Lightbody, who was honoured last Thursday evening at a reception which was very well attended, Mr. Lightbody concluding 31-plus years of service to the people of British Columbia. I would not want my opening remarks to conclude without paying tribute to Mr. Lightbody on his retirement and to wish Mr. Halkett well as he takes on new duties.

I was speaking about revenue collection. In response to continually increasing demands and to preserve the integrity and the equity of the tax system, we've also been shifting our funding assignments to this area. Considerable effort is being applied in automating revenue systems, and there are continuing programs for improving communication between the taxpayer and the ministry. Also, as was discussed and announced in the budget, penalties for wilful non-compliance have been introduced. There is an amnesty period which continues until June 30. The continuing objective for the ministry on behalf of the province and on behalf of all taxpayers is to efficiently collect all taxes due, but to do so in a manner which is sensitive, which is sympathetic where appropriate, and which preserves equity with least disruption to the tax-paying public and with every effort being made to avoid misunderstanding. This is a major and I trust will be a continuing priority for the ministry.

Mr. Chairman, there may be other points that members will want me to elaborate on, but in effect that is the summary of the 1985-86 estimates for the Ministry of Finance. I look forward to attempting to answer questions posed by the committee.

MR. STUPICH: Mr. Chairman, it's been a long time coming. We've moved up to the starting-gate almost every day for some two weeks, but finally we've arrived at the discussion of the Ministry of Finance estimates.

I'd like to just mention briefly the minister's comment about the reduction in ministry expenditures. I've said it in the House before and I certainly don't mean anything personal by it: the old phrase that figures don't lie but liars figure. Mr. Chairman. I'm not suggesting that the minister is

[ Page 6408 ]

lying in the slightest, but when I look at the estimates of the fiscal year March 31, 1986, I read them a little differently from what the minister does. The estimates for the year 1984-85 totalled $8.39 billion, but included in that was an amount of $470 million to be given to the B.C. Railway Company which was not ministry spending on services in the province of British Columbia. It was a historic debt repayment; it was described that way. So really it wasn't part of the ministry spending at all. If you take that from the $8.39 billion, you come up with a figure of $7.92 billion. Those were the original estimates.

Now the minister chooses to refer to the revised estimates, and to compare those with the estimates for the year 1985-86; something like Finance minister Wilson, who plucked a figure out of the air and said what the deficit would have been had he not taken certain measures, and then showed that he was able to effect a reduction in the deficit, a figure below that which he said it would have been had he not done certain things. Well, the minister is playing the same kind of game here. He is saying that, comparing the estimates for 1985-86 with revised estimates for 1984-85, our total spending is up only 3 percent. And the minister said the ministry expenditures have been kept down.

[10:15]

But we have to compare apples with apples. In this instance, we can compare the original estimates for 1984-85 with the original estimates for 1985-86. We don't have revised estimates for 1985-86 yet, so we can't do that comparison. Comparing that, and looking at the figure that I have of actual ministry estimates for 1984-85 of $7.92 billion, we now have ministry expenditure estimates for 1985-86 totalling $9.056 billion, an increase in spending of 14 percent. Now that's what the estimates are — comparing one year to the next. The minister is actually proposing to spend 14 percent more, rather than 3 percent more. While it is true there are some reductions in some ministries — for example, Education is down about 5 percent — the total overall picture is a 14 percent increase.

But that wasn't what I wanted to talk about in my opening remarks. I thought that would just give the deputy something to think about, perhaps, while I am referring to a couple of comments that the minister made in this session earlier. When we were discussing Bill 32, the Compensation Stabilization Amendment Act, 1985, the minister used the phrase: "proven record of success." I have to ask: on what criteria do we say B.C. has been successful? When I look at this particular minister's record in office, B.C. has had an unbroken string of revenue surpluses.

I have gone back, even into a book I got from the library that takes budget speeches from 1950 to 1959, and I have been unable to come up with a single budget — it's been an exhausting research; maybe not exhaustive, I might have missed something — in 35 years of the history of the province of British Columbia that was a deficit budget, until this particular minister had the honour, shall I say, or the misfortune to introduce the first deficit budget in the history of British Columbia since sometime before 1950, and it was a large deficit itself. That was the budget in July 1983. Now that's quite a record for a Social Credit cabinet minister. Is that part of the proven record of success, that he has been able to bring in deficit budgets for the first time in some 35 years?

Or beyond that, in every year since this minister has been Minister of Finance, every set of public accounts tabled in this Legislature has shown that in that particular year there was a deficit in the consolidated revenue fund for that year. Again, with the exception of the year 1976, which was produced by his predecessor as Minister of Finance, the Hon. Evan Wolfe, it was the only time that we have had deficit public accounts figures. Going back, I could read the tables in here showing, year after year, what the revenue surplus.... They were talking then about $3 million, $5 million and $7 million; we have to put another zero or two at the end of it now to be meaningful. Nevertheless, I might have missed something, Mr. Chairman; I'm not doing it deliberately. But I do say that this minister has a singular record of success, in the past 35 years, in achieving deficits and in producing deficit budgets; that's something to be said for him.

Just looking at the figures a little bit, going back in more recent history, under the NDP regime.... There was a lot said about that. I'm missing the hon. member for Omineca (Mr. Kempf); I'm sure he'll want to get in on this discussion. When the NDP were in office, there was a period of four years when we tabled public accounts; we didn't table them for 1976. Nevertheless, including those, there was a revenue surplus over that four-year period of $207 million, including the $166 million deficit that the Socreds manufactured on March 31, 1976; it wasn't there until that day. Even with that, there was a total revenue surplus in that period of $207 million. Since this minister has been Minister of Finance, including the year 1985, which is an estimated figure, although a revised estimate, we have an accumulated deficit in the revenue surplus accounts year by year of $3.663 billion. I have the figures for other years as well.

This discussion came up again in this session when the minister was closing second reading of Bill 17, British Columbia Transit Amendment Act, when he talked about the gross debt, the net debt and the per capita debt, and the comparison between the provincial and the federal debt. I think one of the figures he used — and maybe this is something else that he might want to have someone check .... The quotation is from Hansard, May 15, 1985, page 6146, where the minister said: "If the debt of commercial Crown corporations in the province of British Columbia is excluded, and in many jurisdictions that is the accepted practice, then the province's net debt per capita is $2, 518...... With a population of some 2.7 million, it means that our debt, apart from Crown corporations, would be $6.8 billion at that date. I think there is a mistake in figures there. I leave that to the minister to check.

He went on to say that this is the second lowest among all the provinces of Canada. He might say that that is one of the criteria he uses when he says there has been a proven record of success on the part of this administration. I will go on at some length to explain that having the second lowest net debt per capita in the whole of Canada — leaving aside Crown corporations — is not proof of success; what have we done for the people of Canada? Surely that's what government is here for. We could do nothing and hope that the debt would be wiped out, and that would not be success if our people are suffering in the meantime.

Total debt at the end of 1984: I think the figure is something like $16 billion. We have to include the Crown corporations. The auditor-general has been urging that we do that. But even if we look just at net debt for a moment, the government has artificially moved the goalposts to keep down the net debt. That may not have been the only reason, but they have established, since being returned to office in

[ Page 6409 ]

December 1975, 12 new entities, each one set up to serve a particular purpose, but each one building up a debt that previously would have been recorded in public accounts. So instead of some $3.6 billion, the net debt would be $1.7 billion higher, because at the end of March 1984 these various new entities established by the government for the purpose of borrowing had borrowed a total of $1.7 billion. I can read the whole list.

Not only have they set up 12 new Crown entities to borrow $1.7 billion; you will recall, Mr. Chairman, that they sold three new B.C. ferries — I believe payment was complete by the NDP administration — for a total of $48.4 million and committed themselves to buying them back over a period of 18 years for $104.6 million. Fiscal mismanagement, Mr. Chairman. Not only that, but I like to keep reminding people that there was a guarantee in that agreement that the people who bought the ferries and are selling them back to us would experience no risk in the event there was any change at all in federal income tax law that would retroactively close the tax loophole that they were taking advantage of when they were investing, if you like, in our B.C. ferries. They set up 12 new corporations, sold our B.C. ferries and piled up a total direct and guaranteed debt of $16.7 billion by the end of December 1984.

When they arrived in office there was a debt, including the Crown corporations, of $4.4 billion. When this minister took over, it had increased to $7.6 billion, an increase of 7-fold. But during his term of office so far it has gone up 2.2-fold to a total of $16.8 billion. Now even that is not a proven record of failure; it's what happens after that and what it means.

I'd like to talk just a little bit about the extent to which we have increased our borrowing from abroad and the cost of it. At the end of March 1972 total borrowing from abroad was $253 million — a quarter of a billion dollars — on which we were paying an average of 7 percent interest. When the NDP went out of office, total borrowing from abroad was just under $500 million, and still the average interest being paid on that was 7 percent. When this minister took over it had increased. It was up to $1.6 billion, a threefold increase. But since he has been in office as Minister of Finance the figure has gone from $1.6 billion up to $4.2 billion by the end of March 1984, and the average interest being paid on that is not 7 percent but 12.26 percent. It's costing us in excess of $500 million a year to pay interest to foreigners on debt that we owe them.

If I may, I'd like to quote from a previous Minister of Finance to see what he had to say about that. I'm going back a few years, admittedly, Mr. Chairman, back to the 1950 budget of the Hon. Herbert Anscomb. It's going a long way back, but listen to it, because it's good advice:

"Since assuming office I have contended consistently that, if at all possible, provincial borrowing should be restricted to the domestic market, because a province has no jurisdiction over currency, credit and trade. Further, because the domestic market should generally provide the best gauge concerning the worth and credit rating of any provincial or municipal security, borrow at home."

Speaking earlier, the minister said — I quoted part of it; I'll refer to a little more of it now — that the net debt per capita federally is much higher than in British Columbia. But there is another real difference. The debt that the federal government owes is owing to Canadians. We owe it to ourselves. It's all part of the family, kept within our own borders. It's another item in the budget. sure; it costs money, sure, and we have to raise taxes. But we raise taxes from our people to give to our own people, and it circulates. The debt that the provincial government owes, especially since this minister took office, to a greater and greater degree is foreign debt. We are having to ship money, goods or whatever out of the province, out of the country, to pay foreigners for money that we're borrowing front them. That makes the debt that the provincial government owes much more of a burden on Canadians than the debt that the federal government owes to Canadians. It's circulating within our economy. Not that I'm excusing it or saying that it's a good thing, but it's not as bad to be borrowing from our own people, circulating it in our own communities, as it is to be borrowing from foreigners.

Beyond the extent to which we have piled up debt, there have been the tremendous tax increases since this government took over. You recall, Mr. Chairman, that the provincial income tax was 30.5 percent of the federal rate when this government took office. It’s now up to 44 percent. There were some transfers in there, but in addition some extra levies were imposed by this government. Sales tax rate: up 40 percent, from 5 percent to 7 percent. There was a fluctuation. In anticipation of an election the rate was reduced, never to be increased again; when the election was over, the rate was increased. Water resource revenue: $8.5 million when this government arrived in office, up to S 189 million — a 22-fold increase in that item. How many mines have closed in British Columbia because of that extra impost? But remember too that even the poorest of our people, when they come to pay their light bill, are paying part of that water resource revenue. It's just another way of getting more money from people who in many instances can little afford that extra impost.

Acute care in hospitals: whether or not it should be done, the facts are that the rate was $1 a day when this government arrived, and it's now $8.50 a day, an increase of 750 percent. Medical premiums: up from $5 a month for a single to $17, a 3.4-fold increase. Married couples, up from $12.50 a month to $32, a 2.6-fold increase. All that debt, all those tax increases, and what have they got to show for it, Mr. Chairman?

[10:30]

I'd like to digress for a moment to talk about what happened during the three years when the NDP were in office. There might be some question about this; there can't be any argument. The figures come straight out of public accounts. When we arrived in office, total government assets were $2.7 billion. By the time we left they were S4 billion, an increase of $1.3 billion. Capital surplus had gone up from $1.7 billion to $2.4 billion, a $700 million increase. During our time in office, we advanced to Crown corporations an extra S86 million, up from $186 million to $271 million. We put into special purpose funds — what W.A.C. Bennett used to call rainy day funds — available money that has since been used up by the present administration. There was $350 million in those funds, in cash and investments, when we arrived in office: $552 million was there when we left office, in cash and in investments. That was an extra $201 million in cash and investments in special purpose funds available for this government to use, as it certainly did, when it arrived in office.

[Mr. Ree in the chair.]

[ Page 6410 ]

A Westcoast Transmission investment of some $30 million. Grants to Crown corporations, $299 million. The revenue surplus did decrease: $99 million when we arrived in office, a $261 million deficit when we left. But as I said earlier, Mr. Chairman, all of that happened on March 31, 1976. I'm going right up to that period. The net increase during our term in office was $256 million.

But beyond that, we had something to show for it. What does this government have to show for it, Mr. Chairman'? Northeast coal: $1.2 billion in public funds and all we have to show for it is a hole in the wrong place. B.C. Place: an investment of $267 million, which at an interest rate of 11 percent — that's a guess, I know, but it must be close to the actual — is costing the people of British Columbia $80,534 a day in interest alone. I'm not saying it’s a good thing or a bad thing, Mr. Chairman; I'm simply showing that it's one of the legacies of what this minister has accomplished with his record debt, his string of deficits, his record tax increases. One of the things we have to show is a monument in Vancouver that is costing in excess of $80,000 a day in interest to service the debt. The debt is not in B.C. Place; it's in BCBC. Nevertheless, it's a debt.

Expo 86: what will be the deficit, Mr. Chairman? Who knows'? We hope it won't be, but the speculation is $300 million, $400 million, $700 million. The jury is still out. One day we'll know how much it's costing us for that.

The Coquihalla Highway. Again, the jury is still out on that. We don't know what that's going to cost by the time it's finished — $400 million for a start. What are we going to have when we're finished? One of the things we'll have — again, maybe my research has not been exhaustive enough — is the only toll highway in the whole of Canada. Maybe that will be a tourist attraction.

ALRT is a $1.5 billion investment so far. How much further? To what extent will it be a success? To what extent will it be a failure? One more monument. But what does it do for the people of British Columbia'?

We have given away investments that were there when this government arrived in office: Canadian Cellulose, Kootenay Forest Products, Plateau Mills, Westcoast Transmission, gas and oil leases; a total investment of less than $36 million, appraised at $169 million at the time they were given away; producing revenue that was available to the Crown; a net gain in a three-year period of $133 million. That was a record of success, Mr. Chairman. It was given away by this government in what was in part an attempt to teach people something about the stock-market. The Premier went around urging people to buy these shares and learn something about the stock-market. Many of them learned to their sorrow.

What do we have? We have an educational system that is in shambles. Total expenditures are up 14 percent; they are down in education by 1 percent — I think I earlier said 4 to 5 percent; but they're actually down by 1 percent. Our education system is in shambles, and it has been criticized by every other government that has had anything at all to say about it.

Health care. The word coming out of the hospitals is that beds and wings are going to be closed because they are denied the money to provide elective surgery. When does elective become acute? I know each one of us could talk about what's happening to the hospitals in our own districts. Health care is in shambles.

Human Resources. There has been no change in the maximum GAIN payment since the Socreds won the election in December 1975. It has never been changed, except to change the name of the program. It was Mincome then; it's now GAIN — no more money, just a shorter name. There have been no increases in the allowance for those on social assistance in the past three years, although there have been some reductions, in spite of continuing, though not large, increases in the cost of living.

Bankruptcies. We have been setting individual and business records in British Columbia year after year, and it's still happening. We can talk about our great record of having a debt that is lower than the federal debt per capita. But look at this record of failure. Is it worth saying that we have kept our debt figures down, if this is all we have to show on the positive side of the ledger?

Unemployment is at record heights. We rank with the worst provinces in Canada. The minister talked about our debt being the second-lowest in Canada. But when we look at unemployment and see that we're the second highest, is it really a measure of success to say that we've kept debt down?

Reforestation. Well, we don't have to say much more about that, other than the word, to prove the government's dismal record. The Minister of Forests (Hon. Mr. Waterland) has been quoted — maybe incorrectly; there'll be time to get into that later — that he regards the forest industry as a sunset industry.

I'm going to go back in history here too, Mr. Chairman. There's something about those who don't learn from history being doomed to relive it over again — and we're doing that now. Again, I'm quoting from a speech by Hon. Herbert Anscomb, going back to 1950: "I do want to say, however, with all the force I can command" — I wish I could hear the Minister of Finance saying that today — "that we have not and are not spending enough on the development of our basic industries: that is, forestry, agriculture, mining and fishing." That was good advice 35 years ago. What have we done since? Nothing, except attempt to justify an incredibly poor performance.

The government can say that it has held the debt down. Down below what? What would it have been had they not interfered with the economy in the way they did, and had let the economy of B.C. recover to the extent that it has recovered in other provinces'? The debt might well have been less. Apart from this record of debt, I'm looking at what they have denied the people of British Columbia in the way of opportunities to work; and what they have denied the people of British Columbia in the way of opportunities to have the kind of care they have every reason to expect from government, which people are getting in other provinces but not in British Columbia — all in the name of keeping down debt. Has it proven a success, Mr. Chairman? It hasn't. Their debts have never been larger. It's a record string of unbroken deficits that has not been equalled, in my research — deficits predicted in the budget; deficits experienced in public accounts.

By every measure of which I'm aware, the minister has not proven this government's record of success. He has proven this government's record of abject failure to handle the fiscal situation in the province of British Columbia. He'll go down in history as the first one to bring back deficits to B.C. in 55 years, and as the best at denying services to the people of British Columbia — services that they should have; services that we can afford in this richest of all provinces. We have the resources; we have the people; we have the energy. All we need is a government that wants to work on behalf of

[ Page 6411 ]

the people of British Columbia, rather than bring up phony figures as to how they're controlling the deficit.

The House resumed; Mr. Strachan in the chair.

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

Introduction of Bills

FAMILY LAW REFORM AMENDMENTS ACT, 1985

Hon. Mr. Smith presented a message from His Honour the Lieutenant-Governor: a bill intituled Family Law Reform Amendments Act, 1985.

HON. MR. SMITH: This bill will complement the amendments that we've already made in the field of family law and the amendment we introduced in the Charter of Rights Amendments Act, 1985. This legislation, first of all, deals with measures that will stop child abduction across provincial and international borders and assist in the location of children who have been hidden to avoid enforcement of child custody orders. It will assist the court in locating children. It will strengthen the powers of the court, as well, to make garnisheeing orders, orders for the seizure of property, for the imprisonment of persons who defy court orders to pay maintenance and other orders which will assist in the payment of maintenance to economically dependent spouses and children.

It will facilitate the automatic enforcement of maintenance orders by allowing, by court order, public officials to have access to public record information on a strictly confidential basis, which will assist in the finding of the assets and the whereabouts of persons who are defaulting in the payments of their maintenance obligations. It will also revise the reciprocal enforcement of maintenance orders programs, which facilitates the making of maintenance orders where one spouse is outside of British Columbia.

It will, as well, abolish certain obsolete civil legal actions, whereby a person could sue for monetary compensation for seduction, for harbouring and for breach of promise. Those are proposed to be eliminated

Interjection.

HON. MR. SMITH: The measures are not retrospective, Mr. Speaker. I commend this bill for your consideration.

Bill 34 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.

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

ESTIMATES: MINISTRY OF FINANCE
(continued)

On vote 30: minister's office, $189,239.

[10:45]

MR. LEA: Mr. Chairman, we were waiting around in this country and this province for the federal budget. There was the rumour out that we believed that whatever the Finance minister's speech said, it would have some effect on the economy.

AN HON. MEMBER: For B.C.

MR. LEA: For B.C. and for the rest of Canada. In other words, when the federal minister and the federal government bring down their budget, people look to that for signs. They say: "Which way is the government going to go? How does the government feel about the economy? What are the problems with the economy, and how do they see their government dealing with those problems?" That is something we do not see in this province. I have yet to hear this Minister of Finance talk about the economy of British Columbia. I have yet to hear him talk about his view or his government's view of the problems we have and the way we can deal with those problems and a vision of the future. Not yet. Not once have I heard this minister ever venture into that area of discussion. He brings in his budget; he talks about numbers. He's a number cruncher. I have to say. In all honesty, that I just heard a number-crunching speech from the opposition. Where is the vision there? What would they do, and what's the government going to do?

First of all, it's like dealing with a personal problem. We do have problems in this province in the economy — not all the government's making. One of the real problems, Mr. Chairman, is that in this province governments and political parties for years try to let the people believe in some way that we have control of our economy as a province in a nationstate. They try to pretend and let people think that we have all of the levers to deal with the economic problems. They let them think that somehow or other we have control of interest rates, money supply, tariffs, duties and freight rates and that we are in control of our own house as a province in a nationstate. When are we going to be a little bit more honest and say: "Here are the levers we have as a province in the economy, and let's be judged by how we deal with those levers"? If we judge this government by the levers that they have available to them. we can only do it by trying to dig it out ourselves, because we don't hear anything from the government or this minister talking about how they've dealt with the levers available to them.

Now, Mr. Chairman, it seems incredible to me, with the problems we have in our basic industries of forestry, mining and fishing, that we wouldn't get something out of the government dealing with those problems. As I said earlier, it just seems to me that \when dealing with our own personal lives, the first thing you have to do when you have a problem is admit you have the problem. Once you at least admit it — "I have a problem — then you can get down to dealing with the problem. It's the same in the collective. In this province we'd better start being a little bit more honest about the problems we have.

Now I'd just like to point out an area that is a signal, an example of the kind of problems we have in terms of investment in this province. Recently I was at the opening of a new grain elevator in Prince Rupert — approximately a $500 million project. The grain elevator is needed. It's a good project, in that we have to have a more efficient transportation system in the movement of grain; we have to have that new grain elevator to be competitive against competing jurisdictions and competing ports. But the fact of the matter is that the new grain elevator, which is much more automated than the old, employs 25 people. The old grain elevator, which

[ Page 6412 ]

was old and not as efficient, employed 125 people. That story is repeated every day as we see new investments going into our basic heavy industries in this province.

On a broader scale, we are turning out more forest products by about 10 percent than we were in 1979 — a higher volume output of forest products, at a lower price. But 25 percent fewer people are turning out those forest products.

More investment. The investment that's going into the heavy industries in this province and in other jurisdictions is not something that creates employment. It does the opposite: it creates unemployment. That is not to say we shouldn't make those investments, because we have to make those investments to make ourselves more efficient in the international marketplace. But we can't put our heads in the sand and pretend that it's an employment-creator.

In the last ten years every new job in this province has been created by small business. There has been a net loss in the heavy industries: the jobs that were created in the seventies have been lost in the eighties. The employment-creator of the future will be in the small business sector. The employment in the future will be worker cooperatives, community cooperatives, small scale, shorter runs. Do we hear this government talking about that and starting to take us in the direction that would lead to employment-creation'? Not one bit. I haven't heard the Minister of Finance talk about economics in the 13 years he's been in this House. Not once has he stood up and talked about the economic problems of this province. Not once has he stood up and talked about the direction that his government is going to take us to deal with those problems.

Mining. We have a problem. Copper. We have new competition coming in from places like Zaire and Chile that are putting copper in the international marketplace at prices we can't meet. They're doing it at below their own production costs in many cases, for exchange money. At the same time, we're seeing the uses for copper go down through fibre optics and other technological breakthroughs. It's happening all around us. Everybody out there in the workplace and in the economy sees and knows and feels it happening. The only place I can find where nobody seems to know is in the government of British Columbia.

Yes, Mr. Chairman, we have problems in this province. Let's admit it. Then we can get to work cooperatively and in partnership, as the government likes to say, and start dealing with it.

AN HON. MEMBER: That one's not flying. That's why Bill went to Korea.

MR. LEA: It is not flying. You're not down to below 25 percent in the polls when something's flying. That's where Social Credit is now, according to the latest Decima poll, taken in March.

AN HON. MEMBER: How are you doing?

MR. LEA: How are we doing in the United Party? I'd say that if you took a poll today, we wouldn't come up half a percent. When you look at those figures, though, and you see the latest Decima poll, which says 48 percent of the people in this province are strongly dissatisfied with the people who run our province.... When you say, "How would you vote tomorrow," and less than 25 percent say they would vote for the Social Credit, you would think the official opposition would be doing well. But that's not the case. They are below 33 percent in the polls.

AN HON. MEMBER: You're wrong there.

MR. LEA: I'm not wrong on that one. You can't take my advice on what they are and then not take it on what you are. The people are not very satisfied with either the official opposition or the government, because neither is dealing with the problems in this province. The government doesn't even like to talk about it, and the official opposition think they'll get in by saying nothing about the problems. I would say at the moment it's pretty much split. I don't think they hate either, actually. What they're doing is looking at both major political parties and saying: "We don't see them dealing with the reality of the 1980s." Just because the government is 150 years out of date doesn't mean they feel good, because the NDP is 50 years out of date.

AN HON. MEMBER: Pick your poison.

MR. LEA: Pick your poison; that's right. Neither is dealing with the problems in this province.

We talk about investment, and we have to take a look at where we could invest with the biggest return in the future. I don't think anybody in his right mind would deny that one of the best social and economic investments we can make in this province is in education. If these old industries that are not serving us and are not going to take us into the future are not going to be the employment-generators, what kind of economy can we look at? If the old mass economy, the old smokestack economy, is not the economy that's going to take us into the future, then what is? Well, I think we have to take a look at what they call the information economy. That economy is going to call for more skills and more knowledge, people more educated in the sciences, in business and generally. Any investment in education today — in a good general education and some specifics like sciences and business — is the tool that's going to take us into our economic future. This government is going exactly the opposite way.

Mr. Chairman, when we look over our history we see that the old economy that served us — and we have to say it served us fairly well — is no longer the economy that will serve us and take us into the future. That is not to say that the forest industry isn't going to be one of the prime important parts of our economy — or the fishing and mining industries. They are. But the new technology applied to those industries to make us competitive in the world is going to do away with jobs.

I heard in this morning's debate about reforestation as one of the areas we have to apply ourselves to, It's another area cut down by this government, along with education. But reforestation, although it has to be done, had better not be viewed as the end-all either, because the new timber that is going to come along from reforestation is not going to be the same kind of timber as the old. It's going to have a different strength. It's going to have a different cellulose content. In 80 years, after it's ready to harvest, it won't be the size that the old first-stand is. It's not going to have the same kind of wealth possibility as the old stand, and we have to take that into consideration.

Mr. Chairman, if for once in this House the members of this assembly could forget whether they're going to be in power or not, if for once in this House we could stand up as

[ Page 6413 ]

individuals representing the people of this province and talk with each other — not against each other or to each other, but with one another as concerned British Columbians — forgetting the political parties that we belong to and remembering that we are first of all British Columbians in this Legislature, and deal with the problems we have.... I know from talking personally with people off this stage, from both sides of the House, that they worry, that they're not sure exactly what direction we should go in, and that we could talk together, Mr. Chairman. In this Legislature, if we would for once share some ideas, share some thoughts, share the problems, then maybe the people out in this province would once and for all look towards us once again and have some respect for us as an assembly. Because I can tell you right now that there is no respect for us, and that's the only way we'll get it.

[11:00]

MR. CHAIRMAN: Thank you, Mr. Member. Members might be cautioned that we are in the debate of the Minister of Finance and his estimates, and broad-ranging philosophical debates might be more appropriate in throne speech or budget debate.

MR. HOWARD: Just a few moments of your time, Mr. Chairman and the committee. I think we should be extremely grateful to the member for Nanaimo (Mr. Stupich), who, as a result of perusing government-produced documents and documentation, revealed that the first deficit incurred by a government in this province for many decades, I believe he said, was that incurred in the first budget of Mr. Curtis. That's very revealing. That came about, I think, because in that first budget introduced by this Finance minister, he embarked upon a program of spending public money as if it was water coming out of a ruptured tank. His first budget increased public expenditures in this province by 20 percent over the year before. His second budget increased government expenses and expenditures by another 20 percent over that year. So in a two-year period, in the first two budgets of the minister who now still holds the position of Minister of Finance, he increased government expenditures of taxpayers' money by 40 percent.

[Mr. Strachan in the chair.]

Is there any wonder, with that kind of lavish extravagance, irresponsible squandering of public money, that we're in difficulty in this province, both economically and fiscally? He was operating as if there were no tomorrow so far as the public funds were concerned. He doesn't suffer the consequences. Mr. Chairman; it's the general public that is suffering the consequences of that totally irresponsible fiscal mismanagement by this minister, particularly almost exclusively, but by this government as well.

Now we're in a horrendous deficit position, so much so that even the government seeks to hide — or the Minister of Finance in the preparation of the estimates book seeks to hide — within the estimates book the vote covering interest on the public debt. In 1984 estimates the amount budgeted for interest on the direct public debt was included right along with the Minister of Finance's office expenditures, the Provincial Capital Commission and all the others. It was a normal part of the Ministry of Finance operations. In this year's budget it isn't in there. It's listed in the back of the book in something called "other expenditures." It's there, but it is extracted from the functions of the Ministry of Finance directly, so that if anybody looks in the estimates book to see what the amount of money allocated for the operation of the Ministry of Finance is, they don't find the $384 million that we're spending this year on debt. The government is ashamed of that figure. If it were a bit more ashamed, maybe it would step out of the way and we could test our relative support with the general public — over that and other matters.

I want to deal also, very briefly, with the treasury bill operation of the provincial government. The province's treasury bill operation, Mr. Chairman, is costing this province jobs. It's costing workers and people in this province the opportunity to earn a living. The very simple process is that when the government borrows each week its $60 million, as I understand it is now, in order to pay off $60 million that it borrowed 91 days ago — I believe they are three-month treasury bills — it drains the interest on those treasury bills from the taxpayers. It levies taxes, takes purchasing power away from citizens in this province and then pays the interest on the treasury bill program, every week — I believe it's Wednesdays. Every week that process goes on. Because the consuming public or the average citizen has less money in their pocket to spend, they thereby impair the prospects of other people working and providing services or goods for the money that the taxpayer ordinarily would have to spend.

That might not be so bad, Mr. Chairman, in some sense, if the average citizen had an opportunity to invest some of his savings in provincial treasury bills. You could then sort of rationally argue that if citizens had the opportunity — those who would have some spare disposable income — to invest and if they invested it in T-bills, at least the taxes that they pay in order to support the interest for the treasury bill program and the other debt program would be coming back to them as interest payments on their own investment. Here you could rationally argue that that would be somewhat helpful. But the government doesn't do that even. In fact, its policy and approach prevents the average citizen in this province from getting his hands on a treasury bill. When they're offered to the market there is a list of selected investors which includes chartered banks, financial institutions, credit unions and anybody else who can get on the list. But there's a $2 million minimum bid, so if you want to try treasury bills, even if you're on the list, your bid has to be in the $2 million range. And the segments....

AN HON. MEMBER: Well, that's easy.

MR. HOWARD: No. I don't know anybody myself personally who could dig up the $2 million and say: "Yeah, I'd like to bid on some treasury bills." There may be some people around; the average citizen doesn't fall in that category. But you can bid on the treasury bills in segments of $25,000. So the minimum treasury bill is $25,000. The average citizen can't get in on the $2 million minimum bid; the average citizen probably couldn't get in on the $25,000 minimum on the secondary market, because that's a fair chunk of money for the average citizen to find for investment purposes.

So the whole process of this T-bill operation of the Minister sucks money out in the form of taxation from average citizens and redirects it into banks and financial institutions who buy the treasury bills. It is lost money as far as the consumers are concerned and lost jobs as far as the economy is concerned. That's how blind and dumb this government is

[ Page 6414 ]

with respect to dealing with economic matters in the province. At least you can argue that the federal government permits and allows their structure of treasury bills so that people can buy them in $1,000 lumps, I understand, on the secondary market, even if you can't get them directly. But that hurts our economy, as does the interest that we have to pay on the provincial debt — which is hidden in the back of the estimates book.

Mr. Chairman, when it comes to interest payments and debt payments, the figures are so massive that they become relatively incomprehensible to the average person. When you toss around billions and hundreds of millions and hundreds of billions of dollars, it's beyond the average person's concept — that quantity of money.

So, Mr. Chairman, what I'd like to do is engage in a little adventure with you — with the Chair, that is — relating to the direct provincial debt. Mr. Chairman, I can't tell you what the adventure is at this moment, but I want to start it right this very second. [Pause.]

MR. CHAIRMAN: If the member is finished speaking....

MR. HOWARD: Well, Mr. Chairman, you have engaged in the adventure. The length of time that that silence lasted was some 25 seconds. It will be interesting.... My quick calculations are not able to produce the total figure; maybe my colleague for Nanaimo will. We spend, as interest on the public debt, $12 a second, every second of every day of the year, just paying interest on the public debt. If you multiply 25 times 12, you get $300 having been expended in that 25-second period on interest on the public debt. I just used that as a device to indicate how enormous it is. Now $12 a second, by my calculation, is $730 a minute and $43,847 a year; and the amount of money just escalates astronomically. That's partially why we're in trouble in this province economically.

MR. STUPICH: It's $437 million, not thousand, a year.

MR. HOWARD: Not on T-bills; on direct debt. And the member for Shuswap-Revelstoke (Mr. Michael) is giggling about it. To him it's a joke. He enjoys the prospect that we're squandering $12 a second on interest on the public debt because of mismanagement of his own government. Fiscal bloody irresponsibility, and he laughs about it.

MR. CHAIRMAN: Order, please.

MR. HOWARD: He sits there and giggles.

Interjections.

MR. CHAIRMAN: Order, please.

MR. HOWARD: And the member next to him is giggling and chortling and enjoying himself.

MR. CHAIRMAN: Order, please. All hon. members will come to order. The member for Skeena is reminded that a hallmark of parliamentary debate is proper and temperate language. Please continue.

MR. HOWARD: One's emotions get carried away when one...

MR. CHAIRMAN: Please proceed. The estimates.

MR. HOWARD: ...sees such puerile, childish action by the member for Surrey and the member for Shuswap-Revelstoke.

MR. CHAIRMAN: Order! That's a personal reference and will be withdrawn. The member will withdraw any personal reference to another member.

MR. HOWARD: I didn't make any personal reference.

MR. CHAIRMAN: Yes, hon. member. You will withdraw the personal reference to another member.

MR. HOWARD: If there was one that is perceived, which I don't perceive, I'll certainly withdraw.

MR. CHAIRMAN: Thank you. It's withdrawn. Continue on vote 30.

MR. HOWARD: I think you should also ask the member for Shuswap-Revelstoke to withdraw his giggling and smirking at the fact that the people of this province are paying $12 a second on the public debt, just to service it.

MR. CHAIRMAN: The committee was called to order. The member continues on vote 30.

MR. HOWARD: Now he's silent and subdued. Stop your foolishness.

Anyhow, I just wanted to make that point, Mr. Chairman. I may have said something that offended you, sir; I think it was quite appropriate to the people to whom it was directed.

HON. MR. CURTIS: Mr. Chairman, I want to respond to some of the comments which have been made this morning, before there is the claim that I have not attempted to make such a response. I was on my feet just as the member for Skeena was recognized, and so be it.

The member for Nanaimo (Mr. Stupich) has talked in the same general terms previously when acting as critic for the Ministry of Finance estimates, the minister's office. I have with me the Hansard for 1984. Actually in calendar '84 we did two sets of estimates just a few weeks apart: at the end of January and towards the end of March. The member for Nanaimo and I exchanged views at that time, as I recall, on a host of topics, including the leasing of three ferries. I don't propose to revisit that.

[11:15]

The question of debt, Mr. Chairman. I think it's important to clarify just a little bit there, because figures can be tossed around. The member for Nanaimo questioned the figure of, as I recall, $2,518 per capita, which was provided at an earlier date. That figure of $2,518 includes both direct debt per capita, which is $1,124, and debt for social capital — or, if you will, non-commercial debt — of $1,394 per capita; so it's not just direct debt. The debt of commercial Crown corporations — particularly Hydro, but not exclusively — is expected to be $3,213 per capita at the end of this fiscal year.

Mr. Chairman, the point to be made again, and it has been shown in a number of documents, is that at March 31, 1983 — and I'll speak about 1983 in just a moment — the noncommercial debt per capita, $1,584, was the second lowest of

[ Page 6415 ]

all the provinces. If there is some suggestion or some suspicion that I'm being selective about March 31, 1983, that is not the case, because to the extent that I am able, we cannot get the debt per capita figures for some other provinces for 1984 and 1985. Our numbers are up to date, but we can't get them for some other provinces.

The member for Prince Rupert (Mr. Lea), who is not in the chamber now....

MR. COCKE: He's not interested.

HON. MR. CURTIS: I won't draw that conclusion. The member for Prince Rupert came in and made a stirring speech about the economy and what should happen, and the kind of reasoned debate we should have in this chamber about our economic past, present and future. He said, and I paraphrase pretty closely, I think: "Not once in 13 years in this House have I heard the minister" — referring to me, Mr. Chairman — "speak about the economy." I don't know where that member has been. Every budget speech deals with the economy — past, present and future. I have answered a host of questions over time with respect to the economy of British Columbia, its ills and its health. While I wouldn't expect the member for Prince Rupert to know that I do travel the province widely, I can assure him, should he be listening in his office or should anyone care to tell him, that I have traveled this province extensively time after time after time, not only speaking about the economy but, more importantly, listening to views about the economy. I make no apology whatsoever for what that member for Prince Rupert perceives to be my lack of comment on the economy.

Even associated with the budget of March 14, 1985, we produced a paper which I have referred to often called, would the member for Prince Rupert believe...? I can't imagine a title that has the word "economy" in it. The member says we don't talk about the economy of British Columbia. This is titled "The Economy in a Changing World" — March 1985. I commend it to members who have not read it: 15 pages, ten graphs, dealing exclusively with British Columbia's economic situation, retrospectively and looking ahead.

It's a document which has had not too many complimentary remarks from the other side in this House — because, after all, that's not what opposition is all about — but which I can assure the Chair has had a great deal of constructive comment from as far away as Ottawa, Toronto, London, New York, Tokyo and Singapore. They're not saying: "Mr. Minister of Finance, you're a great guy." They're simply saying: "Your people have put together one of the finest analyses of a provincial economy" — or, if you will, a state economy "that we have seen in a good long time."

Interjection.

HON. MR. CURTIS: No, some of it, Mr. Member, is not good news. I expect that we're going to have better news over the next two to three years. Certainly we see early signs of the recovery for which all of us yearn.

AN HON. MEMBER: If there is an early election.

HON. MR. CURTIS: I'm not speaking about elections, Mr. Member; I'm speaking about the kind of consultation that I have undertaken and that others have undertaken. The tax tour last year was not just a quick rush in and rush out of a community, but rather listening, probing, questioning, identifying and working with individuals who said: "This is what government should or should not do in terms of the economy of British Columbia.

MR. WILLIAMS: What are the early signs of recovery?

HON. MR. CURTIS: Mr. Member, come with me. Come with me on a little trip. Let's head out to a few communities.

Interjection.

HON. MR. CURTIS: No, no, no, no, no. I'm speaking about within British Columbia.

Interjections.

MR. CHAIRMAN: Order, please. Every member will have an opportunity to speak in Committee of Supply.

HON. MR. CURTIS: Mr. Chairman, the second member for Vancouver East said: "What are the early signs?" I don't think he really wants to see them, because that would be contrary to his political purposes, but I assure you, Mr. Member, that they are there. In Penticton last Friday, individuals came to me and said: "You know, it's starting to happen." People in Vancouver, the Saanich Peninsula, the central interior have said: "We feel a little better now than we did a year ago, or six months ago." Activity is starting, Mr. Member. As I say, it just may not suit your.... I wouldn't want to make the accusation that it may not suit his political purposes; I would not accuse him of that, as an honourable member.

Mr. Chairman, I don't know if other members will want to refer to a couple of things, but when we're talking about deficits....

Interjection.

HON. MR. CURTIS: Selective again, Mr. Chairman.

I want to speak about deficit reporting, matters concerning the deficit. I'm pleased that the only significant criticism the auditor-general for British Columbia has been able to make is that staff which she needs or wishes to have has not been made available to her. I'll answer any questions about that. At least we did not have a headline such as that which appeared in the Times-Colonist on December 29, 1984, which says: "Manitoba's Deficit Higher Than NDP Claims — Auditor." It then quotes at length: "The NDP government and the provincial auditor, William Ziprick, who said Friday the NDP government has not been presenting Manitoba's deficit in a fair or realistic fashion...."

MR. CHAIRMAN: Order, please. We are in the estimates of the province of British Columbia, and administrative actions of the ministry.

HON. MR. CURTIS: Mr. Chairman, I take your admonition, with the exception that it was referenced very early in the discussion on estimates that perhaps the deficit or debt numbers were not precisely as they should be. The member for Skeena (Mr. Howard) said that the debt numbers are hidden in the back of the estimates. Well, they're not hidden, Mr. Member. They're in a different part of the book, but

[ Page 6416 ]

they're in the book. So the use of the word "hidden" is just a little distressing, Mr. Chairman.

Mr. Chairman, the T-bill question raised by the member for Skeena is valid, and that's one I will review. I trust he would at least acknowledge that a number of British Columbians — average small investing British Columbians — were able to participate in the British Columbia Railway preferred share issue at $25 a share. Indeed, from time to time with provincial bonds which are issued we find strong to good retail interest in our provincial issues, which is a minimum of $1,000. So while the point that he makes about the T-bill minimum may well be valid, it is not a conscious ministry-wide policy, in terms of debt instruments, to shut out the average British Columbian. There was very heavy takeup by British Columbia citizens on the B.C. Rail preferred share issue at, as I say, $25 per share.

MR. DAVIS: The Minister of Finance is on the hot-seat, and understandably so. In an economy like ours, which is highly trade dependent, and in a world in which recession has been a problem for several years, we're bound to have our own difficulties here in British Columbia. One of our major difficulties, of course, is the fact that many of our costs are resistant to downward adjustment. In good times we are prompt to increase our charges, whether for labour, capital or other purposes, but in difficult times the resistance is there. We have great difficulty reducing our labour costs. Interest costs tend to stabilize. Capital is much more difficult to attract in a part of the world where the citizens don't save enough, or at least don't save enough for the development of their own industry.

Several of the members have complained about perspective or sufficient concern about the economy. I think we're all concerned with the state of the economy; I know that the Minister of Finance is. One of my criticisms of the budget as it has been presented, not simply this year but throughout recent years, is that the minister doesn't give us in his published material an estimate of gross provincial product. This was the first item, as I recall, in federal budgets. It's a major item in all national presentations in Canada and other countries. Unless we know what the government's estimate of gross provincial product is, we really can't assess its taxation and its expenditures relative to total activity in the province.

Current gross provincial product is perhaps in the order of $46 billion or $47 billion. The prospective budget is of the order of $9 billion. Expenditures by the provincial government in British Columbia are therefore 18, 19 or 20 percent of the total activity of all our citizens in industry and otherwise. That's a very high figure. It's a record figure for British Columbia. In 1970 the provincial expenditure budget, which was roughly in balance with income, was of the order of 12 percent. During the NDP years it rose as high as 18 percent. In the more affluent late 1970s — at least, when employment was higher and industry was expanding at a considerable rate — the figure fell to as low as 16 percent. But currently it is of the order of 19 percent of gross provincial product. If you add federal spending and municipal spending, total government expenditures in British Columbia must be upwards of 45 percent — in the 45- 46- 47-percent range.

[11:30]

In other words, getting on to half or close to half of all the activity generated in this part of Canada is as a direct result of government spending. Admittedly, most of that spending is on people programs — health, education and social assistance support. Perhaps three-quarters of all that expenditure is in that area of payments directly to people, but that is a sizeable item in respect to other direct activities by government.

Back to the provincial percentages. If we're spending 19 percent of our gross provincial product, we're only taxing at about a 17 percent rate. We're running a deficit. Personally, I don't like deficits, but in present circumstances deficits seem to be inevitable if we're going to maintain the people programs, come anywhere near maintaining educational outlays, expand our health care outlays and look after the increased numbers of unemployed. We're going to have a deficit, and that deficit is of the order of 2 percent of our gross provincial product. In other words, as a provincial government we are pumping 2 percent more into the economy than we are taking out of it. The provincial budget, to that extent, tends to stimulate.

Now the New Democratic Party over the years has talked really out of both sides of its mouth. It's opposed to restraint in each area individually. It's opposed to restraint in education; it's opposed to some levelling off in health care costs; it's opposed to any tightening up in the administration of social assistance. In other words, it would presumably spend more in that very sizeable area of provincial outlay. Yet today we hear the attack principally in the area of debt. Why the deficit? Why is the deficit so large? Why has the deficit of the last several years been of this order of magnitude?

Presumably, they would have had a lesser deficit had they been in power, and I doubt that very much. They are more inclined to Keynesianism — if I can describe it in that fashion — than Social Credit is, at least in the principles of the party. I think — to paraphrase Disraeli when he said, "We're all socialists now," when universal manhood suffrage was brought in in the United Kingdom in the 1880s — we're all Keynesians now. We're all prepared to spend more than we can tax back as income to government. It's been impossible to balance the budget with industry ceasing to expand, with many industries economizing and with new plants and equipment enabling many firms to maintain their output with a lower payroll. This has been a difficult period.

In theory, at least, I would much prefer that governments turn the tap on and off only in the area of financing or helping to finance capital projects, and maintain their people programs — health, education, welfare, and so on — on a slowly ascending curve; that those expenditures be more or less sacred; and that in good times governments cut back on their capital programs, and in more difficult times — call it periods of restraint — spend more in areas such as construction, to maintain some level of activity in construction and related industries in the province or in the nation.

There's an impression abroad in this province that the so-called megaprojects have cost a great deal of money and have been major items in the budget of the province. They are certainly large projects, and perhaps in some ways too lumpy. But the total expenditure in any one year on the megaprojects — I'm talking about year by year, rather than the sum total of these big investments — has never exceeded 7 percent of the provincial budget. The people programs — health, education and social security — totalled have been upwards of 75 percent. So the megaprojects, big as they may have been individually, have been one-tenth or less of the scale of the people programs.

[ Page 6417 ]

(Mr. Ree in the chair.]

One can argue whether the economics of particular projects are as favourable as alternate projects might have been, but certainly they haven't been overwhelmingly large. They haven't been massive items, at least seen in the context of the budget of British Columbia, I think that they have ensured the survival of quite a few of our engineering firms in this province. They have put people to work. They have maintained the income of a number of people who had been accustomed to earning exceptional salaries and wages. While admittedly it hasn't kept all of the construction labour force employed, it has at least provided a floor for many companies based in B.C., which hopefully will continue to operate in this province very effectively.

On the taxation side, on the income side of government, the Minister of Finance really has nowhere to go. We levy what are among the highest tax rates on business in many categories in Canada. The minister is to be complimented for his tour around the province: the fact that he has listened to many submissions; that he's made a number of changes in detail. Hopefully, our tax rates will tend to drift downward. But British Columbia still remains an expensive place in which to start up a business. If you look at neighbouring Alberta, with its oil and other incomes and its relatively low business taxes, we've got tough competition on our doorstep, so to speak, from Alberta. Tax rates in Washington and Oregon states are also lower than in B.C. So the minister can't increase taxes. He's been reducing some. His hands are tied in that area — the area where he might increase income. I think the opposition will be hard put to find instances where he could have increased the inflow of money to the provincial government over the last year or two, and perhaps for several years to come.

On the outgo side, as I've said, the money is spent mostly on the people programs, which are so dear to the hearts of many British Columbians and certainly to the NDP. They wouldn't have cut those programs, restrained those programs or redefined those programs to the extent the government has. They would not have increased income to the government, and they would in all likelihood have increased outgo. They would in all probability have reported higher budget deficits — perhaps substantially higher budget deficits than the present Minister of Finance has reported.

So those, Mr. Chairman, are my principal comments right now. I would like to urge again that the Minister of Finance, every time he produces a budget, give us an estimate of the current gross provincial product, so that we can orient ourselves, and see how much of the substance of the province the provincial government is taking and how much its spending impacts on the total activity of B.C. That I would urge him to do. I don't really know why this has not been done. Otherwise, I think he had to be a Keynesian willy-nilly. Until we get our house in such order that our people programs, which are the bulk of the expenditures of the province, are well below any projected total income of the provincial treasury, we'll not be fortunate enough to be able to turn capital projects on and off and stimulate the economy at the right time, hold it back at others, as we should be able to do under a well-managed budget.

MR. HOWARD: Mr. Chairman, I'd like to revert to the latter comments of the Minister of Finance, with respect to treasury bills' functions. Before I do, though, I'd like to tell how much I enjoyed listening to the member for North Vancouver–Seymour, as I always do. On an earlier occasion in this session, he stood up in the House and classified himself and all others on the government side as supporters of supplyside economics. Now he says he 's in support of the Keynesian concept. I suppose, Mr. Chairman, if you don't have any sort of real fundamental economic philosophy about anything, you can be anything you want at the moment, depending on what's going. That just proves that speaking out of each side of the mouth is fairly easy for members on the other side.

The Minister of Finance mentioned the B.C. Rail preferred shares issue and said that that exhibited some degree of support for the provincial governmentos position economically or fiscally.

Interjection.

MR. HOWARD: Then I misunderstood. But he did draw the comparison and said that average citizens had an opportunity to invest in that and many of them did.

I'd like to put on the record that there's a vast difference between a preferred share issue selling at $25 par value, when you can buy 100 shares as a board lot. That's $2,500 when the minimum position on provincial treasury bills is $25,000. There's quite a spread there.

The other thing was that I don't think that one should draw the two of them together for comparative purposes, because the B.C. Rail preferred share issue had available to it the federal dividend tax credit. In addition to being fully endorsed by the provincial government as to the payment of those dividends under the federal dividend tax credit provision. That was the attraction. The 9 1/4 percent on the B.C. Rail preferred — I believe it was 9 1/4 — was by rough calculation the equivalent of 13 percent or 14 percent on a debt-bearing instrument such as a treasury bill. So that was a tremendous attraction to people, and the dividend tax credit provision is also a little bit more friendly to the taxpayers who are in higher income tax brackets as well. I might add that the Manitoba government likewise embarked upon that program and issued a similar preferred share, Manitoba Properties Ltd., which had the same tax capacities to it, and it was equally subscribed as was the one in British Columbia — both guaranteed by the province, both the same tax advantage, different political complexions of the government — so perhaps the Manitoba government isn't doing things quite so badly after all.

MR. STUPICH: Just some comments on what the hon. member for Skeena and the hon. member for North Vancouver–Seymour had to say in this discussion. The hon. member for Skeena did raise the question of whether or not the government and/or the opposition had anything at all to say about where we go from here — what we would do — and I agree with the minister that both sides have been talking about that, perhaps not forcefully enough for that particular member to have heard us.

I made a point of drawing attention to the debt not because debt of itself in our opinion is inherently bad. It is a fact that under this administration the debt of the province has increased by $12.3 billion, but it is also a fact, as I pointed out, that unemployment has never been worse, that our educational system is in a shambles and that our health care delivery system is being destroyed. These are the facts of life as

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well. Along with borrowing all that money, we have destroyed the economy and we're hurting all of the delivery of people services.

What have we done with the $12.3 billion? We've built monuments. Now monuments of themselves are not bad, either — not necessarily bad. We can still admire the Great Wall of China and the Taj Mahal, and people still journey to Egypt to see the Sphinx. Monuments are great if you can afford them. But this particular time in the economy of British Columbia is not the time to be building monuments. We should be using that money — borrow it if we will — to do something positive for the economy of British Columbia and to produce something for the people of British Columbia. That's where we've failed. We can't afford monuments in bad times. We can be doing that in good times, but in bad times there are other things we should be doing.

[11:45]

Just speaking a moment about unemployment.... Really, this brings it home — the differences among the provinces. There was a tragedy in Ontario recently, where a tornado destroyed a lot of property and people, with really a tremendous swath of destruction. But the interesting thing to come out of that to me was when I heard of the minister responsible for looking into the situation and bringing to cabinet a plan for dealing with the human tragedy. The recognition was there that unfortunately the construction industry in Ontario was so busy before that happening that they would have to look elsewhere for companies and individuals to do the work of reconstruction. The people in Ontario didn't have time to do it; they were too busy doing what they were doing already.

In British Columbia, Mr. Chairman, if the whole of Vancouver were destroyed we could bring unemployed construction workers in from all over the province. We would not have to took elsewhere for people to work in B.C., regardless of the size of the tragedy. That shows you what's happening in one province as compared with another. The difference is that we have the Social Credit administration in office in the province of British Columbia. In Ontario they had, of all things, a Conservative government — the namesake of the member for North Vancouver–Seymour (Mr. Davis) was the Premier — but at least they were doing something positive for the people of Ontario, which we have not been doing in British Columbia. And what have we not been doing?

Mr. Chairman, we have what we need here. The hon. member for North Vancouver–Seymour said "levers." We have the levers available. We have the resources.

We have abandoned almost completely our husbandry of forestry. We're not doing anything positive about it. If we could call it Expo No. 2, or if we could call it B.C. Place B, or if we could call it Tumbler Ridge — anything at all — then we could borrow millions and even billions of dollars to do what we should be doing with our most important natural resource. We're not doing it, Mr. Chairman. That's what we should be spending the money on instead of on monuments to Social Credit.

Mining. Mr. Chairman, you've been around B.C. long enough to know that in all of the time that the NDP was in government — over three years — there was not one single mine in British Columbia that closed. But from the time we left office the record of numbers of mines closing has gone on year after year. Every year there have been a number of mines close in this province.

Fishing. I've argued ever since I entered the Legislature in the spring of 1964 that it's not enough to say fishing is a federal problem. We should be doing more here. The federal government isn't doing enough for our fisheries; we have to get involved ourselves. We're not doing it. Why don't we spend some money on that resource, Mr. Chairman, rather than on continuing to build monuments that are costing us money and producing nothing?

Agriculture. Significant steps forward were made when the NDP were in office.

HON. MR. CURTIS: Mr. Chairman, on a point of order, I seek your guidance. The member is becoming quite specific about activities which are the responsibility of other ministries. He has referred to forests, mining, and he's now about to speak about agriculture. I recognize that the Ministry of Finance covers a fairly wide range of topics, but I wonder if those relate to the vote 30 that is before us at this time.

MR. CHAIRMAN: It is a point well taken. In estimates we should deal with the administrative functions of the ministry and not get into the broad philosophical debate which is more the purview of a budget or a throne speech.

MR. STUPICH: Mr. Chairman, if I may just discuss the point of order in my own time, may I say that the only time we can engage in any discussion with the Minister of Finance on the extent to which this particular administration has built up a non-productive debt in the province of British Columbia is in estimates. We can talk about it in the budget debate. One of us may speak, and a couple of weeks later the Minister of Finance. Well, he's had his shot. The only time we can discuss it with him and try to find out why he's borrowing money, or allowing it to be borrowed, or pouring it into nonproductive megaprojects, non-productive monuments, is here in the discussion of estimates. I've finished with that particular part in any case; not with the levers available but the resources. The way in which we have abandoned our resources surely has to be to some extent the Minister of Finance's responsibility, since he's the one who is responsible for raising the money and has some influence on his colleagues when it comes to spending it.

I won't talk about whether or not the minister should be spending money on training people, on education, on doing things that will give them some hope, because that's somebody else's responsibility. But if I could talk about it, then I would say that I think it's much more important that we devote our resources to building up training programs, educational programs for our people, than it is to produce a B.C. Place where a few of them might exercise. We should have B.C. Place, but we should have it when we can afford it, not when we have it at the expense of education, health services and decent allowances for people on social assistance.

I said before that we have the resources, the people, the energy. It's not the minister's responsibility to build a natural gas pipeline to Vancouver Island, but I would suggest that in today's economy it's not B.C.'s responsibility to go out and borrow money for that. While it wasn't the minister who said that.... I believe it was the Premier who said we'll borrow the money ourselves and get this rolling. I would urge that the Minister of Finance not proceed to borrow more to add more to this total public debt, unless the economy improves to the point where that can be financed out of revenue rather than

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taking it further from the education system and from the health system.

Finance. This certainly is the minister's responsibility. We can borrow millions of dollars to bail out the Canadian Commercial Bank. I said at the time that I supported what the minister had done in this, and I still do, He said that it was to protect the depositors. To protect a relative handful of people who had made deposits in that bank at the expense of the thousands of people all over British Columbia who are lining up at food-bank lineups, at the expense of people who are being hurt because of what's happened to the education system and at the expense of people who are being hurt because hospital beds are being closed was not necessary. They should not have been cut back. Nevertheless, we're saving millions of dollars in all those programs and putting it to help a relatively small handful of people.

I agreed at the time, and I still agree, that what was done with respect to the Canadian Commercial Bank had to be done so that people would continue to have faith in our finance system. But, Mr. Chairman, how long can people continue to have faith in a financial organization, which in British Columbia, with everything that we've had — and I've gone through the litany.... We have the resources, we have the people, we have the education, we have the energy, we have all these things, and the one thing that holds us up from doing everything we should be able to do for the people of British Columbia is our inability to finance it.

Mr. Chairman, we can finance it when we want to bail out the Canadian Commercial Bank. We can finance it when we want to build megaprojects, one after another. But we do not seem to be able to finance it when it comes to looking after the needs of the people of our province. That's my criticism. In criticizing, in saying what we're not doing, I am, in effect, saying what we, the official opposition, would be doing if we had the opportunity — or, if you like, will be doing when we have the opportunity.

HON. MR. CURTIS: Mr. Chairman, with respect to the Canadian Commercial Bank, the member for Nanaimo has characterized this as "relatively few depositors." I would correct him on one point, incidentally, and perhaps he did not intend to say it. We did not borrow in order to "bail out." The money was advanced from consolidated revenue.

Interjections.

HON. MR. CURTIS: No, but to be perfectly straightforward about it.... I wonder if the member really.... He has obliquely criticized my actions on that weekend with respect to the Canadian Commercial Bank. But he has said twice: "And yet I agree with you." The member has to admit that the ramifications of that regrettable and very touchy weekend were more than just a few depositors, more than just a large number of depositors, but a very significant number of British Columbians. I'm not making too much of it, Mr. Member, but when I saw the exposure of the retail banking system in this province, I knew I had to act. That's not something you take to a cabinet meeting, because there isn't one available at that time of day — or through that particular period.

The member for Skeena (Mr. Howard) spoke earlier about the first two years of my time as Minister of Finance. He mentioned the increases of 20 percent in each year: expenditure, 17.3 percent in 1980-81; 16.2 percent in 1981-82. I believe the member took that and converted it into 40 percent. When one is talking about expenditure growth through that period, I think, if one is going to be completely accurate, one should also note that inflation was at a rate of over 14 percent in 1981 and 10 percent in 1982, and factor those two inflation rates against the expenditure increases of 17.3 percent in 1980-81 and 16.2 percent in 1981-82 — we're not talking about flat dollars.

The House resumed: Mr. Speaker in the chair.

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

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 11:58 a.m.