[ Page 6421 ]

CONTENTS

Lottery Corporation Act (Bill 43). Hon. Mr. Chabot

Introduction and first reading –– 6421

Oral Questions

Expo salaries and expense accounts. Mr. Macdonald –– 6421

Mr. Lauk

Expo 86. Mr. MacWilliam –– 6422

Sewage dumpage. Mr. Lauk –– 6422

School district takeovers. Mr. Rose –– 6423

Hazardous chemicals. Mr. Hanson –– 6423

Tabling Documents –– 6423

Resolution 58. Hon. Mr. Gardom –– 6423

Mr. Howard

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

On vote 30: minister's office –– 6423

Ms. Sanford

Mr. Blencoe

Mr. Rose

Mr. Davis

Mr. Passarell

Mr. Nicolson

Mr. MacWilliam

Mr. Michael

Mr. D'Arcy

Mr. Cocke

Mr. Williams

Mr. Stupich

On vote 33: compensation stabilization program –– 6443

Mr. Cocke

Mr. Rose

Travel Agents Amendment Act, 1985 (Bill 36). Second reading

Hon. Mr. Hewitt –– 6444

Mr. Lauk –– 6444

Hon. Mr. Hewitt –– 6445

Forest Amendment Act, 1985 (Bill 3). Second reading

Hon. Mr. Waterland –– 6445

Mr. Howard –– 6446

The House met at 2:05 p.m.

HON. MR. NIELSEN: Mr. Speaker, I would ask the members of the assembly to give a warm welcome today to some 50 odd doctors [laughter] –– 50-odd; between 50 and 57, I'm not sure of the precise number — from across the province. More particularly I would like to introduce three of the executive: Dr. Gerry Karr of Penticton, president of the BCMA, Dr. John O'Brien-Bell of Surrey, who is president elect, and Dr. Gerry Stewart of Kelowna, the immediate past-president of the BCMA.

MR. COCKE: Mr. Speaker, on behalf of the opposition I would like to first apologize to the doctors. We also welcome the doctors and will be looking forward to meeting them this evening and enjoying conversations that no doubt will ensue.

HON. A. FRASER: Mr. Speaker, I just want to single out one of the doctors, and he's not the odd type. I would like to introduce Dr. John Maile, my own personal doctor from my home town of Quesnel.

MR. VEITCH: Mr. Speaker, in your gallery is one doctor who most assuredly is not odd, my very good friend, neighbour and personal physician, Dr. Jim Grant.

Mr. Speaker, also somewhere in the galleries this afternoon is the regional director for the British Columbia Social Credit Party for region No.  3, Mr. George Little. I'd like this House to bid him welcome.

Introduction of Bills

LOTTERY CORPORATION ACT

Hon. Mr. Chabot presented a message from His Honour the Lieutenant-Governor: a bill intituled Lottery Corporation Act.

HON. MR. CHABOT: Speaking very briefly on the bill, Mr. Speaker, I just want to say that the bill has become necessary since the breakaway from the Western Canada Lottery Foundation and the establishment of the B.C. Lottery Corporation in British Columbia. The bill provides for the management of the Lottery Corporation in Kamloops. I might say that it's exceedingly successful and operating very well. The bill also makes provisions for a board of directors. This legislation will ensure that we have an orderly, well managed, successful lottery corporation in British Columbia.

Bill 43 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.

Oral Questions

EXPO SALARIES AND EXPENSE ACCOUNTS

MR. MACDONALD: To the Minister of Tourism, about Expo, the chairman of Expo has criticized the president of Expo in relation to the purchase of the Mercedes car. Has the minister decided to review the spending policies and the expense accounts of the Expo board?

HON. MR. RICHMOND: Mr. Speaker, I think the member erred slightly in his question when he talked about the expense accounts and the spending habits of the Expo board. I think what he really meant was the spending habits of the president of the corporation. I make it quite clear that that is a matter for the board and for the chairman to deal with. I'm pleased to say that the chairman of the board dealt with that particular matter something like a year and a half ago.

MR. MACDONALD: I take it from the minister's reply that, notwithstanding that this case has come to light, he's not interested in whether there may be other similar cases and is not prepared to conduct a review.

Is he prepared to make public the salaries and the expense arrangements of the directors of Expo? That's public money.

HON. MR. RICHMOND: I can make them public to the member right now, Mr. Speaker. The salary of the directors of Expo is nil, and the salary of the chairman of the board is $1 per year.

MR. MACDONALD: I asked the minister for the salaries of the senior officers and directors of Expo. That should be public information. I didn't ask for two cases. Will the minister table that information?

HON. MR. RICHMOND: Mr. Speaker, the salaries of the board of any Crown corporation are, I think, privy to that corporation until such time as the annual reports are published. At that time they will be public information.

MR. MACDONALD: Again we strike out. The salaries are to be hidden from those who pay them — par for the course.

In view of the awarding of the guide-book contract — which ran into about $5 million — can the minister assure the House that there have been no other contracts or financial arrangements between the chairman of Expo and Expo Corporation?

HON. MR. RICHMOND: The contract in question was carefully reviewed, not only by the board of Expo but by retired Justice Fawcus of the province of British Columbia, who has written some very detailed conflict-of-interest guidelines for the members of the board of Expo. All the parameters passed Justice Fawcus's close examination. On that basis I can assure the member that there is no other financial connection between the chairman of the board and Expo 86 Corporation.

MR. MACDONALD: Mr. Fawcus also rejected a consulting contract because one member of the management of Expo had shares in the company. He turned it down and said: "You can't do that." Is the minister saying there are no other financial arrangements or contracts between the chairman of Expo and Expo Corporation? Is that your assurance to this House? I'm not talking about the guide-book. Is there anything else — any other contracts?

HON. MR. RICHMOND: I thought I made it very clear that any matter that has to do with a contractual arrangement

[ Page 6422 ]

between any member of the board and the Expo 86 Corporation is closely scrutinized by Justice Fawcus. To the best of my knowledge there is no other financial connection between the chairman of the board and the Expo 86 Corporation.

MR. LAUK: Supplementary to the minister. Is Mr. Fawcus receiving a salary from Expo or from government for this service he's providing?

HON. MR. RICHMOND: To the best of my knowledge, Mr. Speaker, ex-Justice Fawcus is retained by the corporation. As to any exact stipend or amount, I would have to take that as notice and bring the information back to the House.

EXPO 86

MR. MacWILLIAM: A question to the Minister of Tourism. Recently the ministry sponsored a $500,000 Expo extravaganza where media people from about the world were given an all-expenses-paid invite to the international preview to the fair. In reviewing a dozen national papers for the weeks following the media event, only two small articles appeared, one in the New York Times buried on page six and another in the Globe and Mail. Does the minister consider such poor coverage a justifiable expenditure of $500,000 of taxpayers' funds for this international media event?

[2:15]

HON. MR. RICHMOND: Yes, Mr. Speaker, the amount referred to by the member is a part of the Expo 86 Corporation's marketing budget, and it was considered by the marketing people to be a wise investment. The feedback that we are getting from the international press, both on the travel side and the regular media, is great, including the electronic media. We feet that the investment was well worth it. The international press that were here were very impressed with the calibre of what they saw.

MR. MacWILLIAM: As the minister well knows, the proof of the pudding is in the eating, and two papers out of a dozen international papers covering it is not what I would consider adequate.

In light of the media extravaganza, will the minister explain why Expo has not provided adequate marketing information to critical market areas, such as California?

HON. MR. RICHMOND: Mr. Speaker, we have people, both as advisers and on staff, who are very much aware of where the crucial markets for Expo are. They are very much aware that California is a key market to Expo and have retained people who know that market very well. The marketing plans are in place and are underway for marketing that area. I should add that of the international media that came to the opening of the Expo centre, we received extensive coverage on the Seattle television networks, which is part of our core market for Expo 86.

MR. MacWILLIAM: It was recently reported that when contacted, a dozen travel agents in the Los Angeles area were unaware of Expo and had no information available for their clientele. In view of the importance of the non-resident visitors to the fair, and maximizing the non-resident tourist input, will the minister explain why he has not provided this information to travel agents in critical market areas such as California?

HON. MR. RICHMOND: I don't know who the member is talking to, but we have a resident marketing director in Los Angeles who has been in contact with the travel trade in that city for well over a year, attending trade shows and travel shows, and spreading the news about Expo. So I suggest that maybe the member is talking about the wrong 12 travel agents.

I would also like to report that I myself made a trip to San Francisco and Los Angeles earlier this spring. We received extensive coverage and will be receiving more in both the San Francisco and Los Angeles newspapers travel supplements. I was very happy to speak with the executive of the southern California automobile club, which has 3.5 million members; we are going to receive six articles in their monthly publication between now and Expo 86 –– I provide this information just by way of showing the member and this Legislature — and the public — that we are very cognizant of the California market and its importance, and are putting a specific advertising thrust and effort into that state.

SEWAGE DUMPAGE

MR. LAUK: To the Minister of Environment. I'm sure the minister has been advised that the Department of Highways intends to sever a sewage main in the course of constructing the Annacis Island Bridge, causing an estimated 40 million litres of sewage to be dumped into the Fraser River, affecting the beaches in and around the city of Vancouver and elsewhere. Has the minister been cognizant of this, and has he or any member of his ministry investigated the danger to health of people using beaches and other areas affected by such a sewage dumpage?

HON. MR. PELTON: Thank you for the question. I am aware of the situation, but have not got all the facts at my fingertips. Therefore I will take this question as notice and report back in detail to the member as soon as possible.

MR. LAUK: A question to the Minister of Transportation and Highways. Can the minister inform the House as to what study, if any, has been conducted by his department with respect to this dumpage of sewage and whether an alternative procedure that would avoid such a dumpage has been developed and could be adopted, instead of dumping the sewage?

HON. A. FRASER: It's my information that our people have dealt with all the environment agencies including Environment Canada, and the decision was made to sever this pipe at this time. It would be the best time to do it, if there is a best time. I can get more details if you want. In other words, we're only doing what we're directed to do from Environment Canada and British Columbia Environment to achieve this.

MR. LAUK: I am instructed by health officials in the city of Vancouver that they are gravely concerned about the negative aspects of this dumpage and its effect on beaches, and that it is precisely the timing of the dumping, plus the amount expected, that is causing them some concern. Has the minister decided to intervene in this matter with his colleagues

[ Page 6423 ]

and adopt some procedure that would protect our young people who are using the beaches during the summer?

HON. MR. NEILSEN: No, Mr. Speaker, we have not made a decision to intervene with my colleagues, but the matter is being discussed. Should suggestions come forward from health officials, they will be transmitted to all other players.

MR. LAUK: As the time of such an event to occur is approaching rapidly, and summer is upon us, can the minister indicate if he has decided when his department will act, if at all?

HON. MR. NEILSEN: I haven't made that decision, Mr. Speaker, no.

SCHOOL DISTRICT TAKEOVERS

MR. ROSE: A question to the Minister of Education. Has the minister decided to give his commitment that the takeover of the Vancouver and Cowichan School Districts will be terminated, at least by the time of the election of new school trustees in November?

HON. MR. HEINRICH: I don't recall any particular commitment being given. If the member has any evidence, Mr. Speaker, of such a commitment, I'd like him to pass it on to me. As far as the elections are concerned, I believe in Cowichan elections would normally be held in the fall of 1985, and in Vancouver, I believe, they're in the fall of 1986, if I'm not mistaken.

MR. ROSE: Mr. Speaker, I'm aware that the minister hasn't given any commitment; that's what we're asking him to do, to give a commitment, so that local democracy can once more prevail in British Columbia.

My supplementary, Mr. Speaker: local citizens in both those communities are interested in the return of the democratic control of their local school districts, so they would like to know from the minister about a firm date for election this fall or earlier if possible, so that those people who are interested in running for school board can make their plans to do so.

HON. MR. HEINRICH: Mr. Speaker, I'm not in any position at this time to give consideration for elections in either the Cowichan or Vancouver School Districts. In the fullness of time this matter will be addressed.

HAZARDOUS CHEMICALS

MR. HANSON: Mr. Speaker, a question to the Minister of Environment. Public concern over the possible health effects of Killex and other 2, 4-D based pesticides has caused the Vancouver Parks Board to suspend spraying pending further investigation. In view of this concern, has the minister decided to impose a temporary provincial ban on the use of Killex until the studies are complete'?

HON. MR. PELTON: Mr. Speaker, not at this time.

Mr. Speaker tabled special report No. 10 of the ombudsman.

Orders of the Day

HON. MR. GARDOM: Mr. Speaker, I would call Resolution 58 standing in my name on the order paper, seconded by the hon. member for Skeena (Mr. Howard), and I would like to read the resolution into the record: "That this House hereby appoints Richard Allan Nicol as Sergeant-at-Arms of the Legislative Assembly of British Columbia, pursuant to section 44 of the Constitution Act."

I would like to say a few words about the senior official of our assembly and the keeper of the royal mace. Mr. Nicol was born in Alberta in October 1924, which was a very good year. He came to B.C. in 1941 and enlisted in the Royal Canadian Air Force in 1942. He flew with the RCAF bomber command as a bomb-aimer until the end of hostilities in 1945, and completed some 16 operations. He was discharged from the force in 1945 and re-enlisted in 1949, again with the RCAF. He served in air defence command in Canada and in the United States and retired with the rank of major in 1974. It was then our good fortune, Mr. Speaker, that he became a member of our Sergeant-at-Arms staff.

I'd like to say, Mr. Speaker, how pleased I am to move this resolution, and how fortunate we all are in the Legislative Assembly of this province to have a man of Mr. Nicol's stature and dedication to perform the historic and day-by-day tasks attendant on his responsibility. I move the resolution.

MR. HOWARD: The Sergeant-at-Arms is one of the most treasured officers of the House. I think I would tend to say that that is so even above the Clerks-at-the-Table — with due respect to them — because the Sergeant-at-Arms is ever-present everywhere, and assists members in all of their activities throughout the chamber. We're pleased to endorse the motion.

I would say, just as an aside, that I would be very happy to second a motion with respect to the ombudsman, when that event comes about.

HON. MR. GARDOM: Mr. Speaker, joining us today on this historic occasion is Mr. Nicol's wife Jean. I'm sure all members would like to pay her a very cordial and pleasant welcome to the assembly.

Motion approved.

HON. MR. GARDOM: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF FINANCE

(continued)

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

MS. SANFORD: I have just one brief question to the minister. I certainly won't take much time under these estimates. I know the minister is bombarded with questions about removal of sales tax from various items, but I wanted to raise one particular issue, with the request that the minister follow up on this, in view of the particularly difficult time that the farmers of the province are having.

[ Page 6424 ]

I've been informed that because there is no updating done of the various items that the sales tax applies to, if you, for instance, purchase a mechanical feeder for feeding animals on the farm, it is not subject to sales tax; but if you purchase one of the new computerized feeders, that is subject to sales tax, simply because the updating hasn't been done within the Ministry of Finance — as these exemptions apply to various commodities and various products. Apparently there are a number of new machinery items used on the farm being introduced on an almost daily basis, and because the Ministry of Finance does not keep up with them, they are not given the exemption. That's one particular example. I would like the minister to give me an assurance that he will investigate, that he will follow up and do an analysis of the types of machinery made available, so that proper exemptions can be given to farmers, who are already facing a very difficult financial time.

[2:30]

HON. MR. CURTIS: Mr. Chairman, as the member will know, the list under agriculture alone is very extensive. It was extensive under her government; it has been extensive since sales tax was introduced in 1948. We keep an up-to-date list, and each time a request comes in, or a complaint or a concern.... As an example, one which was achieved in the budget this year was glass milk bottles, although that's not agriculture as such. It is such a very large list that inevitably we are going to miss a few. We gather the list — as we did this year; we do each year — and we try to decide if there's some theme or pattern. I know there are some analogies, and there are some contradictions and exceptions which make very little sense. I think one needs the patience of Job — an old expression — to really try to get a list that is complete and yet still ensures that certain items that are perhaps used in an ancillary fashion by agriculture are taxable. That's the problem. That may not be the precise answer the member seeks. Do we still have turkey saddles on the list? I'm not sure. I had to see one one day, because I didn't believe we still exempted turkey saddles.

It is a list of hundreds of items. Madam Member, if you wish to speak to me about a specific one, two or three.... I think I've demonstrated to the Legislature, Mr. Chairman.... We had people talk about the glass milk bottles, and I guess there were some who thought we would never respond. Well, we did. So I undertake to sit with the member at any point and review the list with her.

MR. BLENCOE: Being the MLA for Victoria, Mr. Chairman, one often gets many businesses in this community that do business with the provincial government, and they're very pleased to do so. One thing that constantly crops up or is mentioned to me in passing — hopefully it's improved, and I want to ask the minister about this — is sometimes the tardiness of government paying its bills. I don't want to get into any controversy over this, but a number of times business people note to me that they are expected to pay their bills, sales tax, Hydro bills or whatever within 30 days or penalties are added, and they often note that government sometimes goes beyond the 30 days in terms of paying its bills. I don't want to get into particular businesses or names, but I would like to hear the minister.... I think there have been some improvements, but I still meet people on the street who say: "I wish the government would pay my bill. I've got a cash-flow problem and I'm still waiting." I'm wondering if the minister has a policy in place that categorically states that the government, unless for exceptional reasons, will pay accounts owing to the business community within 30 days.

HON. MR. CURTIS: For too many years in British Columbia, in my view, interest was not paid on overdue accounts. We corrected that three or four years ago. Now interest is paid 60 days after the invoice is received. One can argue that it should be 30 days, but it is 60 days after the invoice is actually received. In the event that any member or any business concern finds that that is not occurring, then they need simply write to the revenue division — the comptroller-general if they prefer — or, if necessary, write to me or contact my office by a simple phone call. There are some which aren't caught. I am aware that in a province as large as British Columbia, with so much being acquired by government, cash flow can be pretty severe and worrisome. That is why we took that step. I might also say, I'm informed that most of our bills are paid within the 60 days.

There were two reasons for introducing the interest applicable to accounts payable, the first being that I felt it was appropriate that a supplier of a good or service should receive interest on late payment by government, and the second and perhaps more important reason being that that would ensure timeliness on the part of those who process the bills. I recall that a good number of years ago you could wait six or eight months for a cheque from the government. You were assured that some of the most stale accounts on your accounts-receivable list would be the government of Canada or the government of British Columbia, Alberta, or whatever province it might be. I hope we've moved along the road to correcting that, but in the event that there is any glaring example which any member of the House wishes to bring directly to my attention, or to a senior official's attention, please do so, and we'll get onto it right away.

MR. BLENCOE: As Chairman of Public Accounts I am aware of some of the changes that have happened under these areas. I know the 60 days is in place, but I know that many times it's 30 days in the private sector. It's a 30-day requirement, and they are having to pay bills, particularly hydro bills. This morning I'm dealing with a number of businesses in town who are just being pursued by Hydro. I won't go into the details. They, of course, come back and say: "We do business with British Columbia, and sometimes we wait 60 days, sometimes more." I'm just thinking that maybe we have somewhat of a double standard. I would like to see the government's policy towards paying bills follow the same kinds of rules that apply in the private sector. I think it would be a good one, particularly in these days of cash-flow problems. I'll leave that. Maybe the minister will want to comment on that,

One more item, Mr. Chairman, that may have been raised before, but it's something that came to my attention at Christmastime, and that is sales tax. I know the government is strapped for revenue, but it came to my attention that certain letters or edicts or whatever went out broadly in British Columbia saying that sales tax was going to be due on every single thing.

One of the things that came to my attention was that boy scouts and girl guides were collecting money for charity by selling Christmas trees, and they were told that they were going to be checked up on, and all sales tax was going to be due. It created a bit of a furor, particularly at Christmastime,

[ Page 6425 ]

that the government would be — how will I put it — so harsh. I recognize that you have to have regulations, but I'm wondering if the minister is reviewing that kind of edict in terms of charities that are doing good work. When they're trying to sell Christmas trees, they're being told that they have to account for every single bit of sales tax. Again, I recognize the minister's in a bit of a difficult position, but there has to be some flexibility there. I know it did create consternation at the time, and I think it entrenched the skepticism about government. I wonder if the minister has any comments.

HON. MR. CURTIS: My silence with respect to the 30 days on overdue accounts should not indicate my indifference. We'll look at that, but I'm inclined to the view that we will probably stick to 60 days but still seek timely payment under the 60 days. That, after all, is more important. Getting the interest when the account is somewhat overdue is not as good as having the cheque go out very quickly.

Christmas trees. I read my mail and spoke to people on the telephone who were frustrated. It is correct that sales tax is charged. We heard from some boy scouts organizations. So did a lot of people. I think it was also in the press. First of all, it's seen as a hard-hearted, callous, governmental taxman decision. It isn't that, in effect. We've got two or three types of persons selling Christmas trees. As an example, we've got a lot of retail, commercial, profit-making organizations selling Christmas trees. The member nods his concurrence.

I'm not about to exempt Christmas trees sold by K-Mart or by XYZ company, or whatever, from sales tax. How do we break that out? I might also say, parenthetically, that it is not true that I'm contemplating taxing items sold at garage sales or yard sales under any circumstances. But that, Mr. Member, is one that we're going to have to look at between now and the end of October, to try to rationalize it in some way. I have discussed it within the ministry. I don't have the answer at this particular point in the year, but we do have to work on it. I'm not certain just how it will finally resolve itself.

MR. ROSE: I'm not extremely well prepared, but I know that the minister is aware that I'm interested in the EPF and the fact that somehow these block fundings, despite their increase, somehow don't end up where they were originally intended. I made the point last year that there was some $27 million extra that came out of the feds. Originally, pre-1976, those funds would have been destined for and would have arrived at the universities. Another $100 million extra came last year for hospital funding. We have, at the same time, a diminution of hospital budgets and university budgets by about $27 million, concurrently with the increases from the feds, which seemed a bit contradictory, especially when we added an 8 percent health tax at the same time.

I know that the Minister of Finance, under the block funding agreement — I believe it was 1976 — has a perfect right to do whatever he does with the funds that come from the feds. It's no longer a dollar for a dollar or accountable. Perhaps it should be. I think that there were motivating forces on both the federal and the provincial governments to move from dollar-for-dollar funding to block funding. The block funding, of course, was appealing to the provinces, because they felt that they could take the money that was originally — if you use the argument of the Minister of Universities, Science and Communications — really only B.C. money coming home, and therefore the feds have no right to dictate what we do with that money. That's a pretty substantial argument, and that was the appeal of the provinces. They didn't have to spend it on welfare or health care or education if they had other provincial priorities such as megaprojects, Expo — whatever happens to be a provincial priority. On the federal government side, they were alarmed at the increasing use of cheap dollars, especially during the affluent years, by the provinces, because the provinces had no obligation or were not really worried about spending what they regarded as 50-cent dollars. So it was a mutually agreeable thing: on the feds' part, capping the budgets; on the provinces' part, spending the money on their own priorities.

[2:45]

That, to my knowledge, is the background of it. But we've seen now that in the health field, the new Canada Health Act indicates that if there is extra billing or user fees of any kind, all bets are off. Those funds can be held back for at least three years to the extent that the extra charges are levied provincially. In education we've seen a similar thing happen, to the point where access to universities and, for that matter, colleges.... Even half the grade 12 high school classes are being paid for by these EPF funds, or at least in theory they would have been pre-1976. The secretary of state who administers EPF funds for university is becoming alarmed about this, and is seeking to put on it the kind of tag or limitation that was implemented in the Canada Health Act.

I have the auditor-general's report here, and he recommends that the Secretary of State should consult with the provincial governments on ways of achieving federal objectives in post-secondary education. According to Johnson, a former president of the CBC commissioned to make this study about post-secondary education, B.C. Is probably one of the worst sinners in terms of taking that money and hiding it off in other uses, to the point where the feds are probably paying 80 percent of post-secondary educational costs in the province. Because of fee hikes, because the money has been diverted and budgets have been cut. the kids are paying about 16 to 17 percent. So the argument varies on whether or not the province in the post-secondary educational field, such as universities, is actually making a profit on B.C. EPF funding.

I know this sounds awfully dull and sometimes complicated, but I would like to know whether or not, under the recommendations of the auditor-general, the secretary of state did in fact consult with the provincial governments on ways to achieve federal objectives in post-secondary education. Has there been a meeting? Is there one called? Is there one contemplated?

HON. MR. CURTIS: Mr. Chairman, I will try not to stray into education funding and health funding, but to answer the question in terms of a federal transfer to the provinces. The specific questions — if I've missed a couple the member will, I am sure, restate them. I met with Finance Minister Mike Wilson and my provincial counterparts in Ottawa a week ago Sunday night, and then a bilateral meeting occurred last Saturday afternoon, Mr. Wilson and myself in Edmonton. We discussed EPF on both occasions, among other topics, but certainly it occupied a good portion of the time at the meeting in Edmonton. The member might ask why in Edmonton. Well, the federal minister's schedule and mine just couldn't put us together in Vancouver or Victoria, and that was most convenient, therefore, to have a pretty important meeting.

[ Page 6426 ]

Our officials will start discussions on EPF transfers, the renegotiation of the next five-year period. Those meetings are to commence this month. That's at the officials level this week. The federal minister has indicated that the first series of meetings of ministers will occur in September. I'm sure he'll be offering those dates pretty soon. The present five years does not expire until 1987, and I'm relieved that we'll start talking about it just after the middle of 1985. So we've got some good long time to work it out.

The member and the committee will know that this established programs financing was negotiated between the federal government and the provinces in 1976. Starting in fiscal 1977-78, the new arrangement replaced cost-sharing. I must say again — I think I've said it in this session — that some of the rhetoric and some of the smoke and mirrors that are used, not in this chamber but by some people who play politics with EPF is really shameful. I single out one individual who should know better, and that's the leader of the Liberal party of Canada, who keeps coming to British Columbia, as an example, and spouting pure garbage — absolute garbage — with respect to EPF He singles out British Columbia, but not exclusively. He doesn't have the decency to reply. I've written to him three times giving him lengthy, detailed information on EPF arrangements as we see them, and he doesn't even bother to have his office acknowledge receipt of those letters. I'm going to keep those letters up — just keep them going — until finally he has the courtesy of admitting that he's got the letters and that perhaps he's been misinformed.

One of the best summaries, Mr. Chairman, of the EPF problem....

MR. ROSE: I knew it was coming.

HON. MR. CURTIS: You raised it, Mr. Member; I didn't.

One of the best summaries of the EPF problem, and a fair condemnation of the Al Johnson report, has been issued under date of.... I'm sorry, it is an undated letter. My Xerox is undated, but I think I've had it, shall we say, about four or five weeks. It's quite a recent letter. If the committee wishes, I'll table it when the committee rises. It is from the Minister of Finance for Manitoba, addressed to Michael Wilson, the federal Minister of Finance. It is in response to a letter dated April 4, 1985.

I'm not going to quote at length from the letter. I think the member for Coquitlam-Moody (Mr. Rose) may have seen it. But he makes a couple of points. I disagree with the Manitoba government on many issues, but not on this one. In part, at the bottom of page 3, it says:

"EPF is a block fund. Federal input through EPF to post-secondary education cannot be divorced from the share the federal government provides for the total of health and post-secondary expenditure."

At the top of page 4:

"Phony arithmetic which artificially splits the payments or redefines and limits the program costs which are being shared through EPF will not be helpful for our review and discussions on EPF The broadest view must be taken as we begin our dialogue."

Later on page 4:

"Stability and predictability of funding are major concerns."

Finally:

"We have the Johnson report. We will consider the information presented. I would recommend that it not become a focal point or agenda item for our future meetings on EPF arrangements.

Yours sincerely,
Vic Schroeder,
Minister of Finance"

The fact is that all of us at the provincial level in Canada, in my view, Mr. Chairman, have a problem with smoke and mirrors being played by some people in Ottawa with respect to EPF. I told this committee that to the very best of my knowledge, and after exhaustive questioning and review, no EPF money has been transferred for other than health and post-secondary education to any other activity in the province of British Columbia; none during my time holding this portfolio.

There is so much misinformation at large and abroad in this country today, so much political gamesmanship being played with respect to EPF money. If the NDP government in Manitoba is as upset as this letter suggests — and it was practically smoking when it arrived.... My response to Mr. Wilson, my response to the same letter, was considerably milder. But we have that federal mind-set which doesn't help provincial governments of any political stripe. It is a federal mind-set that is deeply entrenched in the bureaucracy. I think it's going to take the considered efforts of a lot of provincial politicians across this country — continued concerted effort to break down the myths and the misinformation which are being peddled.

Someone such as John Turner is not helping it. I don't blame him exclusively, but he's been caught up in the same myths, in the same misinformation, and it's not helping the dialogue between Canada and her provinces.

MR. CHAIRMAN: Just before recognizing the member, the member and the minister have shown caution with respect to this program as it impacts on other ministries, and we will have to have this debate remain within the responsibilities of the Minister of Finance.

MR. ROSE: Well, the minister said that not a penny — or words to that effect — had been diverted. It's very difficult to explain. When federal payments which were originally intended for universities, or that equivalent percentage, have gone out and university budgets have gone down and fees have gone up, then something has happened. The minister suggests that those things shouldn't be split, but I have a letter from the minister that indicates exactly the opposite of what he told me. I don't happen to have it here because, as you know, I'm flying this one by the seat of my pants, because I came in here and didn't know that I was going to speak immediately. But I have that letter, and I don't mind giving it to the minister. I'll table that one in the House, if he likes.

The other thing is that if Mr. Schroeder.... An estimable fellow he is. He's done very well; he's attracting a lot of people into Manitoba. Their economy is on a roll, where people are leaving this province in droves. So I've got a lot of respect for the policies of that particular minister. I think he's shown the way. He's just done the Bennett and turned Bennett on his head. In other words, he's done exactly the opposite as we've done here, so I can approve of some of his policies.

[ Page 6427 ]

However, it wasn't Mr. Schroeder or anybody else who split the EPF for education from other parts of EPF. It was Monique Begin who put accountability provisions into EPF when she was Minister of Health. The same accountability provisions are being considered or in fact recommended, not by some radical CCFer or NDPer who hasn't got any marbles and couldn't run a pushcart, but by people like the auditor-general of Canada, Ken Dye, who recommends: "The Secretary of State has no means in place to assess the extent to which program objectives are being achieved. Efforts are underway to establish a bank of data on students, programs, educational institutions and courses of study. This information is essential to the development and evaluation of policies and programs." There are substantial amounts of federally originating money going into these programs.

So have there been any meetings taking place between the province and the feds, Mr. Minister, to establish such data on student programs and courses of study in our various post-secondary institutions?

Secondly, here's another quote from the same auditor-general's report: "The department is now considering the possibility of an agreement with the provinces on a system of accountability for their use of these funds" — through the Secretary of State. That is — I'm sorry — a response by the Secretary.

So I want to know what's happening besides these meetings, because there is obviously a need, a desire and I think almost a requirement for some kind of accountability, so that people who are facing fee hikes, terminations at colleges and programs being cut have a reason to ask why, in view of the fact that increasing amounts of money for these purposes are being received from the federal government.

[Mr. Ree in the chair.]

HON. MR. CURTIS: Mr. Chairman, the member got carried away just a little because I read from a letter from Vic Schroeder. I just want to assure him that people are not leaving British Columbia in droves. We still have net immigration. That's off the point.

Interjection.

HON. MR. CURTIS: Well, no; not the way they're measured. Not many of those are in receipt of family allowance, and that's one of the parameters that we measure.

The member is right. I'm not going to speak in these estimates about post-secondary education funding levels or health, because we established that this morning in our discussion, but it was never intended that these program dollars be split. That part is for post-secondary, and this part is for health — that was never the intention. I think there would be agreement on both sides of the House with respect to that. It was a unilateral decision taken, partly by Monique Begin, partly by Marc Lalonde and partly by others at that time. It was unilateral, and the provinces howled and rightly so. Manitoba howled, British Columbia howled; all the provinces were very upset about that.

[3:00]

So I can't answer the member's questions about specific meetings that may be occurring with other ministers charged with responsibility for post-secondary education or for health. But the fact is that if the member makes the point that post-secondary federal money is diminished somewhat by the time it reaches the post-secondary education system in British Columbia, then it is because of the demands made on the other side of the block of EPF, which is health. That's it, simply, absolutely. It is not being diverted to all the other things to which we are accused of diverting it.

So Ministries of Finance, with Michael Wilson in the chair — the officials, as I indicate — will start this week. The Ministers of Finance meet in September; we'll meet again in December. One possibility, I think, is that we shall have observers from post-secondary and health interests provincial — in those meetings.

Interjection.

HON. MR. CURTIS: Cash and tax points, yes.

HON. MR. WATERLAND: Mr. Chairman, might I have leave to make an introduction?

Leave granted.

HON. MR. WATERLAND: Mr. Chairman, joining us today in the Legislature is a group of grade 7 students. I wonder if the House would please welcome them and their teachers from Shalalth.

MR. DAVIS: The minister quite rightly has focused on financial transfers from the federal government to the provinces, and particularly on the next five-, six-year agreement, identifying the funds, their amounts and so on. I personally think that the trend is in the right direction. Increasingly these are — I'd call them block funds — moneys without strings attached. I think, therefore, that as time goes by, it will be increasingly difficult for anyone to construct amounts for particular programs, whether it be post-secondary education or health or whatever.

The history is interesting. The federal government moved substantially into areas of provincial jurisdiction. It moved to fund post-secondary education in a generous way. It moved into health care to ensure a measure, at least, of universality in health care coverage. It has moved substantially into the area of social assistance. In each case it began the program by putting up 50 cents for every 50 cents that the province put up. It was possible, because of the fifty-fifty formula. to identify not only the federal contribution but also the provincial contribution in that area. But as time has passed, the provinces have — and, I think, quite rightly — insisted that these are areas, largely if not exclusively, of provincial jurisdiction, and they have preferred that the moneys be lumped without regard to particular programs. Meanwhile the federal government, running an increasing deficit, had financial problems. and endeavoured to cap the programs: and, beginning in the late 1970s, entered into — I can't call it an agreement, because most of the provinces really didn't agree — an arrangement whereby it would make certain amounts available, regardless of matching or non-matching provincial contributions. So I think the provinces have had grounds for insisting that the total amount of the transfer, regardless of whether it's for education or health or social welfare, is the only sum that should be considered.

The poorer provinces weren't overly enthusiastic, especially in the early years, with the fifty-fifty arrangement. They often complained that the wealthy provinces could afford 50 cents, but they had trouble raising the matching 50

[ Page 6428 ]

cents. So the poorer provinces weren't overjoyed with the programs in the first instance; the wealthier provinces liked the fifty-fifty arrangement. Latterly, it has really been the wealthier provinces who have hankered after a continuation of fifty-fifty.

Essentially, I suppose, from my remarks, I'm siding with the minister. But I would like him to comment — perhaps he may not wish to; he mentioned smoke and mirrors and so on.... I well remember his last budget, not this one, in which he identified what he called the shortfall in federal moneys coming to health. We had a surtax imposed, as if that program and the federal contributions could be readily identified, and exclusively within the one area of health. I think that was smoke and mirrors. I think we've had a tax change — a surtax perhaps — in British Columbia which was necessary; but I think we should have explained it as being the necessary provincial contribution in an area of provincial responsibility.

I think that as time goes by, it will be healthy if the federal government, which has the power to shift money from one province to another and from one area to another, does so increasingly under some heading — call it equalization; call it what you want — making those payments to the provinces on a regular and predictable basis, and not attempting on its own to identify particular end uses, particular programs, to which these moneys allegedly flow. Those programs are largely areas of provincial responsibility. It's none of the federal government's business, in other words. Certainly those early fifty-fifty agreements appeared to indicate a sharing of responsibility. I'm glad to see we're moving away from that. And I hope that when the province has to make financial arrangements to look after expanding costs of any one of these programs, it does so on its own initiative and takes on sole responsibility.

HON. MR. CURTIS: Mr. Chairman, a brief response to the member for North Vancouver–Seymour. I'm sure he has read it, but I'll just remind him of the material which commences on page 77 of the budget document for this year. I'll happily send it to him if he doesn't have it with him in the House. We deal with established programs financing. On page 79 of the appendices, chart FI shows the federal EPF contribution as a proportion of total B.C. expenditure on the two program activities: post-secondary education and health care. It shows a very significant drop in the period 1981-83, and some improvement to the start of '85-86. But as I see it from the chart — and I would have to double-check the numbers — it's less than 50 percent.

Interjection.

HON. MR. CURTIS: The total is less than 50 percent. I make that observation for you.

MR. PASSARELL: Five constituency questions to the minister. We've talked about the first one for five or six years, and that's the sales tax. Just to refresh the minister's mind, the sales tax hurts the community of Atlin because of its proximity to Whitehorse. Individuals can go across the border into Yukon and not pay a sales tax. The next closest community to Atlin is 350 miles to the east. There is only one road into Atlin, which stops in Atlin; it doesn't go any further south; just where it comes in from the Yukon border. I don't understand why we can't make an exception for Atlin. When we've talked about this over the years, the minister has made reference to communities in the Kootenays, the Columbia River and along the Alberta border: that if he made an exception for Atlin then he would have to make exceptions for the communities along the Alberta border. I understand that, but the fact is that Atlin is so far away from another community in British Columbia where you could shop that there should be some type of an exception.

Interjection.

MR. PASSARELL: That's right, and if you could afford the gas to go that far.

There should be some kind of an exception; Atlin is such an isolated area in the northwestern corner of this province. Local businesses are hurt because of sales tax; you can drive up to the Yukon, find a larger variety of items and not pay sales tax. I know the minister doesn't have it in his hands right now, but I'd like to know how much sales tax was collected in Atlin last year. Give it to me later. You don't have to do it today. I'd appreciate that.

The second question: why is there sales tax on gasoline sold on a reserve? The example I give is at New Aiyansh, where there is a gas station on the Nishga reserve.

The third item I'd like to discuss is sales tax on building supplies. It's a difficult situation. If you're improving your home, going out and buying some kind of building material for your home, you're paying sales tax on it. What happens is that you improve your home and then your assessment goes up. You're paying a double tax. I wonder if there could be some kind of exception on building supplies, because if the government doesn't get you when you initially buy the products to improve your home, they're going to get you once you've finished the work and the improvement puts your assessment up. It's almost a double tax on individuals forever for improving their home. I wish the minister would look at that.

I know it's easy to say we should make exceptions for places like Atlin, which will never happen; but the fact remains that it's in a public forum and we have to discuss it. Maybe something to give some money back to the government, and not necessarily from Atlin. A new sales tax of 50 to 100 percent on pornographic material that's sold in this province — for instance, on films from Red Hot Video or magazines that you can buy. Why not put a 100 percent sales tax on pornographic material? With the increase that you make off the new sales tax on pornographic material you could take the sales tax off products up in Atlin, or off building supplies across the province. That's something that could be looked at. We use sin taxes constantly in this province on alcohol and cigarettes. Why not look at some major sales tax increases on pornographic material?

The last question I'd like to direct to the minister is on the transfer payments which were discussed by the member for North Vancouver–Seymour (Mr. Davis); the block funding that the federal government gives to the province, specifically in regard to status Indians. I hate using the word "status," but federal money comes in for native children who fall into that category of status and who go to the public schools. I know the minister won't have those figures at his disposal at this time, but I would appreciate it if sometime in the next few weeks, before we adjourn, he could give me how much money the federal government gives to British Columbia for status children who go to public schools in the province.

[ Page 6429 ]

Those are five specific questions. I hope the minister can give me answers to some of them.

HON. MR. CURTIS: On a couple of the items, I would commit to meet with the member and with someone from the revenue division of the ministry. We could do that before the end of June. I refer specifically to the gasoline tax, the tax applied to gasoline sold on reserve. I think I have an answer, but I would want to check that very carefully; similarly the status Indian question, to use your phrase. So we could sit down and speak about those. I don't know, and I doubt that we could provide the answer today, how much sales tax is received from Atlin. We can extract that information, but it would take a little while.

[3:15]

Sales tax on building supplies, whether in Atlin, in the north, in the northwest or the northeast. In the course of the tax study last year, Mr. Chairman, there were relatively few suggestions made in line with that. There were some, but not a great many. We had more interest in terms of taxes which were applied to people who were engaged in a variety of activities to earn a living, whether single or a couple of people — commercial fishermen, people in the farming and agricultural communities, people in small business and so on.

Last year's review was by no means a straw vote, but obviously when we started hearing themes repeated and repeated, we started paying attention to those as being areas of major concern. I know the question of sales tax on building supplies federally and provincially has been around for a long time. It's been talked about a great deal. Unlike a couple of other jurisdictions, I at least made the conscious decision this year not to remove the exemption on energy-saving items, which have been exempt for several years. I think someone in the course of the study suggested that we should do away with that sort of exemption, but we looked at it and made the decision that the exemptions were important and would stay in place.

Pornographic material, I have no comment with respect to significantly higher increase on that.

Interjection.

HON. MR. CURTIS: I don't equate cigarettes, tobacco and alcohol with some of the pornographic material which apparently is available. I don't think of those as sin taxes. Whether one likes a bottle of Scotch or whether one likes a good cigar or whether one is addicted to cigarettes, I don't consider that to be a sin and therefore here is government taxing it. But rather, it's pretty big money. The argument has been made by a number of people in this House over time that in both instances, of course, as a government you're not making money. You're actually losing it because of the associated health problems.

Mr. Member, I commit to a date before the end of June to discuss the other items.

MR. NICOLSON: Mr. Chairman, I'd like the minister to cast his memory back to the February 20, 1984, budget. Under the budget highlights it said that it was the first time in 31 years that the provincial government had been reduced from the previous year. The press release called this the "breakthrough budget." It said:

"Curtis told the Legislature it is the clearest evidence to date that the government's restraint program is a success. The growth in government spending, which many in Canada have considered irreversible, has been stopped and reversed in British Columbia. He said: 'In my pre-budget consultations I was advised by some groups not to limit government spending but to raise taxes in order to finance more expenditure. To repeat: this government was re-elected last year on the basis of a pledge to reduce government spending. That pledge is now being honoured.'"

I'd like to look at that breakthrough budget. What really happened to the breakthrough budget. Mr. Chairman?

MR. CHAIRMAN: Order. please. We are on the estimates of the minister for the year 1985. The budget of 1984 and....

MR. NICOLSON: That's right, and we ask about the actions of the minister over the past year, Mr. Chairman, and that has always been in order.

MR. CHAIRMAN: But we are in the estimates of the ministry for the year 1985. Basically the budget of 1984 has been approved by this Legislature.

MR. NICOLSON: But it wasn't spent as it was approved. That's the point I'd like to make, thank you, Mr. Chairman. So what happened was, yes, we did approve — as you said, Mr. Chairman — a budget of some $8.39 billion, but did we actually reduce our expenditures over the previous year? We actually spent $8.746 billion or 5.7 percent more than we budgeted, and indeed over the previous year we actually spent in the previous year $8.274 billion in the fiscal year ending '84. The point I would like to make here is that the minister said that it was clear evidence that the government's restraint program was a success. I'd like to ask the minister this question: since spending did in fact increase over the actual expenditures of the previous year to the tune of almost $500 million, does it indicate that the restraint program was a failure" And I would also like to draw to the House's attention that since the Minister of Finance has taken over his portfolio, going back to the point where he took it over, we had a balance — in terms of all of the surpluses from previous budgets and such and invested in things like special funds — of $1.961 billion. But the next year we spent $256.7 million more than we collected in revenue. The year following that — in '81-82 — we spent $184.0 million more than we collected in revenue. The year following that almost a billion — $978.2 million — more was spent than we collected in revenue. In '83-84 we went over $1 billion in terms of what we spent over what we collected in revenue. This has put us into a negative position.

Back when the minister took over as Minister of Finance, we really had a cash balance of $1.96 billion. Today, accepting the forecast expenditures for this year and hoping that the estimates are not, like last year, overspent by half a billion dollars, we see that we are now, in terms of cash balance, about $2.32 billion in the red — whereas we were in the black. Or put more simply, since this minister has held office, we have spent $4.287 billion more than we have collected in revenue.

It's clear that Social Credit isn't working. It is clear that something else has to be done.

[ Page 6430 ]

The member for Atlin (Mr. Passarell) brought up some very reasonable proposals. We pay a very heavy price for consistency in terms of application of government policy to different areas of the province. There's a clear anomaly just mentioned there in Atlin. I'd like to bring up another fact. In the Kootenay area we are actually closer to Calgary, and in terms of expenditures and being part of an economic rather than a political region, we are extremely dependent on Calgary. I'd like the minister to cast his mind to the marine sales — that is, the sales of recreational boats in particular. I'm thinking about Shuswap Lake, Windermere Lake and Jones Boys Marine on Kootenay Lake. Now these establishments depend on the Calgary market. It doesn't take very much observation to realize that even though we're almost equidistant from Calgary and Vancouver, Vancouver is a marine city. Vancouver has a whole boating industry, but Calgarians have to travel to find a considerable body of water. They have to go to places like Shuswap Lake, Kootenay Lake or Lake Windermere. There is a tremendous potential industry and the potential to do something about our revenue and expenditure imbalance to add incrementally in a positive way rather than continuing to have an unneeded loss, I would say, in the economic activity that could go on in our area.

As the minister knows, if automobiles over a certain price are purchased by an Alberta resident, there is a rather simple, practical, sensible process by which the sales tax can be waived. Yet recreational boats, which could be purchased and assembled in British Columbia, providing jobs in British Columbia, cannot be sold in the same manner. I don't understand why. I'm certain that somebody in Salmon Arm, somebody in Windermere, somebody in Kootenay Lake, somebody must have appeared before the minister during his hearings and brought up this question. All right, I'll await the minister's response.

HON. MR. CURTIS: No, I didn't want to interrupt the member, but if he wants the answer with respect to boats, I'll explain it. We really tried, and we'll try again. The problem is that with an automobile, if it's purchased by an Albertan or someone from Saskatchewan or wherever, the registration is a very much straightforward, established practice. We had that cumbersome and unnecessarily complicated procedure previously where you would come from Calgary to somewhere in your constituency, purchase an automobile — you live in Alberta, you'd have no intention of living in B.C.; you like to vacation here or whatever or you have interests, but your home base is in Calgary — and you'd go back and you'd have to apply for a refund for the sales tax. Well, we fixed that in this budget, as the member would know. So we've put the onus and the honour system in place at the dealership level to say you are a resident of Alberta or Manitoba or Ontario or whatever, and therefore there is no sales tax.

But recreational boats are not registered, and so I recall very clearly that there were a number of presentations made in the course of the tax tour. As I recall, however, the representative of the Jones Boys marina was a little late getting to one meeting and missed me at another one, but that was not conscious on his part or on mine; it just didn't work out. It was one of the few we missed, in terms of appointments. Bearing in mind that the Minister of Finance is responsible for the integrity of the tax collection system, you want to try and make things as easy as you can for people. But if you're selling a boat on the Shuswap Lake, and you have no registration system, how do you ensure that indeed the person who has purchased the boat and is going to become sales tax exempt, or declares for sales tax exemption, doesn't just live three miles away?

[Mr. Veitch in the chair.]

The alternative — and if you can help us with some further suggestions, I would welcome them — is abhorrent, and that is to introduce, for tax purposes, a provincial registry for small boats. I just don't want to do that. I don't want to be part of more paper, and so on. So we've got the worst of both worlds. I'm not through with it yet, but it is not easily resolved. I'd like to respond further to your more general questions later. But that's the problem with recreational boats.

[3:30]

MR. NICOLSON: Well, it's my understanding that all boats over 10 horsepower in power — and that's why 9.6 horsepower engines, or something, are so popular — have to be registered or licensed under a federal system.

Even failing that, would it not be possible to require the signing of an affidavit and to fix penalties for signing a false affidavit? Put the onus, I think, on the purchaser, not on the dealer. Surely, if very strong penalties are there, and if they are attached to the affidavit.... Because we're talking about, actually, a multimillion-dollar industry, when everything is looked at.

As an example of the kind of economic activity that we get from Alberta as opposed to the United States, on the Memorial Day weekend we had more visitors from the United States, but they spent less money. They brought everything with them. On the May weekend, we had fewer Canadian visitors but they left a lot more money behind. So it really is that that Alberta market is the one. They don't have many lakes of size or substance out in Alberta. They have to come into the Kootenays or into the Shuswap area, and it is an economic opportunity that we're missing.

So I would suggest that either we do something based on the federal licensing scheme or we put the onus on the purchaser. Not that we should make this on small boats; you know, I'm not suggesting that this be on car-toppers or on boats under 10 horsepower. It could even be, well, like the automobiles; I think there's some limit of some several thousands of dollars, and these boats easily run $10,000. On larger transactions I think it would be possible to do it under an affidavit system.

[Mr. Strachan in the chair.]

HON. MR. CURTIS: Mr. Chairman, I thank the member for his comments. As I indicated just before I took my place, we're not finished on this topic in terms of review within the ministry. We wrestled with it. We cleared up a lot of anomalies in the course of that tour, a lot of things. In fact, we asked each other why we were doing this. Why has this been done? The answer was: because it's always been done. So we've changed it. But I didn't expect that we would be able to clear up all of them.

I have a little bit of problem with your comment regarding the cars. A car is a car is a car in terms of what we now permit the dealer to do once he identifies the out-of-B.C. residents. The federal registry — I'm not sure that it's working all that

[ Page 6431 ]

well, and I have a little bit of trouble in terms of the transfer of information of that kind from....

Interjection.

HON. MR. CURTIS: The Alberta registry. Yes, we've heard about that. But I will review it on the basis of your comments this afternoon.

This morning the member for Skeena (Mr. Howard) reviewed some expenditure and revenue figures earlier in the eighties; the decline in expenditures for '84-85.... Actually, the member quoted from the 1984 budget, and the Chairman wondered if that was appropriate. Expenditure in '83-84 was $8,363.9 million; '84-85 was $8,746 million. But that included the one-time payment to BCR, which has been debated repeatedly in this chamber. Netting that out, there was a decline year over year of $47.9 million in expenditure.

You asked if we met the objective of reducing expenditures, and the answer would be yes. Since you asked me to cast my mind back to the '84 budget, I would just ask the member, Mr. Chairman, to cast his mind back to the '85 budget presented on March 14. Clearly, if we hadn't taken the measures in the previous years, we would not have been in a position to cut taxes in this budget year. That is clearly what was required as we move into the stages of economic recovery in the province. If we had maintained the same expenditure level, or increased it, then we wouldn't have been able to undertake those significant cuts that are now coming into play, and which will continue for the next two fiscal years after this one.

MR. MacWILLIAM: Some specific areas of concern with regard to the area of tourism and stimulating tourist travel throughout the province. There are some areas that I think the minister has not necessarily neglected, but maybe hasn't turned his full attention to. They basically revolve around consumer taxation.

One of the areas of concern — a number of individuals have contacted me in this regard — is the gasoline tax, particularly since the recent federal budget has put an inevitable price boost upon our already inflated costs of gasoline. I refer to the 1984 tourism indicators just released from the Ministry of Tourism, which show that gasoline sales for last year have in fact dropped somewhat. It's my fear that with the federal budget, these gasoline sales will experience a further drop as a result of the increased costs. If we look at ferry passenger traffic in the province, we see it's also down significantly in the past year. What it indicates to me is that domestic travel is tapering off somewhat as a result of the economic condition, possibly also as a result of the constantly escalating cost of gasoline. Although there does seem to be a slight increase in U.S. resident traffic coming in, one has to remember that the very strong U.S. dollar is perhaps one reason it has not had the impact on U.S. traffic that it has had on domestic sales.

In light of Expo 86 coming up, and the amount of travel that will be necessary throughout the province in order to get people to Expo, both domestic travel and cross-border traffic, by reducing our consumer taxes on gasoline I think we would be in a position to encourage even more tourist travel into the province in that time. I wonder if the minister will have a look at this and perhaps answer as to why we haven't taken a look at reducing the taxation on gasoline for the consumer in the province.

HON. MR. CURTIS: It's up to the committee. I could answer this one now or, if you want to give me a series, as your colleague from Atlin did, I can pick them off and respond.

MR. MacWILLIAM: If that is your wish, that's fine with me.

The second one in terms of consumer taxation is regarding the hotel industry. I might point out to the minister that the B.C. occupancy rate for 1984, again taking Ministry of Tourism figures for last year that have just been compiled.... The occupancy rate for hotels throughout the province is an average of 57 percent. In some areas, such as the interior, Island areas and the Kootenays, it can be considerably lower, but on the average there's a 57 percent occupancy rate. The break-even point is apparently 60 percent; that means that we are in a pretty tight financial position in terms of our hotel industry. Many of them are facing imminent bankruptcy. It has increased slightly since 1983, but the occupancy rate shows that still being below the break-even point, the industry is facing some pretty tough times.

One of the ways of alleviating, perhaps, some of the structural burdens in terms of the hotel accommodation industry may be a review of the hotel accommodation tax. Once again, this is a consumer tax. I know there's a lot of discussion in terms of whether tax reductions really do have that much of an economic impact. But I think that these taxes, being consumer taxes. would certainly stimulate demand if they were reduced or possibly eliminated. The reduction or elimination of this tax, I think. would tend to increase the use of the hotels and motels throughout the province, and perhaps even increase the stay of the average non-resident tourist in British Columbia when he does come here.

An alternative to a complete tax exemption of the hotel accommodation tax, and one that the minister may wish to discuss, is to provide a tax exemption for all but the more expensive types of accommodation; in other words — let's take a figure out of the air — a tax exemption for all rooms under $50, for example. The second alternative is the wholesale reduction or elimination of hotel accommodation taxes.

A third area in terms of a focus on the tourism industry is, of course, the restaurant meal tax. Again it's a consumer-based tax, one that directly affects the purchasing power of the consumer. I guess some consider it a regressive form of taxation, in that as soon as the tax is applied it dampens the demand for that particular service.

Presently the restaurant industry, although it's not in quite the financial position of the hotel accommodation industry, I think, is experiencing some difficulty in terms of the reduced demand, in light of the economic situation. I had earlier suggested two alternatives: one is the complete elimination of or the wholesale reduction in the level of tax; secondly, a tax exemption for meals — again taking an arbitrary figure — under $10, that tax to be apportioned to that part of the meal exceeding $10. Those are alternative proposals. I think any movement in that direction would certainly stimulate demand in terms of that sector of the tourism industry. Perhaps the minister can reflect on those possibilities.

The last one I wanted to bring up is not in terms of the tourism industry but in terms of a social service tax for charitable organizations. I was made aware of this problem

[ Page 6432 ]

from a charitable organization in my community — a Lions Club that does a lot of fund-raising for a number of worthwhile community causes. They have a great deal of concern with regard to the imposition of taxes on some of the fundraising activities they do. There are some activities that are exempt from taxation, but some of them they have to pay the full social services tax on, for example, the sale of Christmas trees and light bulbs. If they put on a meal, they have to pay the full tax on that.

I don't think I need to reiterate, but we have a very tough economic situation in the province, and as a result of that we have a critical demand on the charitable dollar in our communities. I think this is made even more critical in terms of the proliferation of commercial bingo halls that have come into the province. Although these commercial halls are generating a lot of profits for some organizations, they have excluded many of the local charities from the bingo dollar. As a result of this, some of them are in real tough shape in terms of trying to continue to provide the charitable service they do for the community.

I wonder if the minister has any thoughts in terms of the wholesale elimination of the social services tax for the charity fund-raising functions that many of these community groups put on. Again, some of the activities are exempt; some of them are not exempt. With those that are not exempt the ministry is demanding a full payment of the taxes. Some of these organizations are finding it very difficult to service the community, when the charity dollar is stretched to such a critical limit, and at the same time to continue to pay the necessary social services tax. I think, again, reduction or elimination of tax in this area may have a very stimulative effect to the services these organizations provide to the communities.

[3:45]

HON. MR. CURTIS: The first question the member for Okanagan North touched on was the whole question of tourism; really, a number of these are tourist-related.

The level of gasoline tax. I'll continue to monitor that, looking at what's happening in other parts of Canada as well as in the neighbouring states to the south. The point has been made previously that gasoline — motive fuel — is expensive in Canada. The province is, in part, responsible, but then it has been historically. Looking across the board, though, in Ontario their tax rate as a percent of retail price is similar to ours. They are 8 percent; they'll probably be increasing. We are 8.03 percent. Quebec is much higher — 30 percent of the retail price, 12.9 cents per litre; New Brunswick is higher, 9.4 cents per litre; Nova Scotia, 9.8 cents per litre; P.E.I., 9.8 cents per litre; Newfoundland, 10.8 cents per litre. The comparison is difficult for B.C. because of our proximity to Alberta, and the member will know that. Manitoba is the same as Ontario, 8 cents per litre, which is just fractionally below ours.

We've also taken steps to reduce it for off-road use and so on, which will assist there. Clearly it's an important revenue source, but on the other side it's something which will or will not assist visitor activity in the province. I monitor it very carefully and am quite prepared to consider some of the points you've made.

I thought I might have had a chance this morning to mention the hotel/motel room tax. There's some interesting and very recent information available with respect to just what's happening out in the hotel and motel area. The Minister of Tourism (Hon. Mr. Richmond) may be in a position to expand on it, but our revenues are up quite significantly. That suggests increased occupancy, and it suggests the kind of turnaround about which I spoke this morning, which didn't entirely satisfy the second member for Vancouver East (Mr. Williams). But if you'd like to make just a note of this — these numbers have not been published before; they've just come to me, Mr. Member — for the three months February 1 to April 30, 1984, versus the three months February to April 1985, hotel room tax receipts are up 14.6 percent. That's a pretty big jump in anyone's language, I would think, which suggests that occupancy of our hotel and motel rooms around the province is increasing. Obviously, we want to see that trend continue. I know that occupancy levels are of concern, but this February 1 is certainly not into the visitor period of the year. That's still winter, and the off-season, as it were. But it's been trending that way, and I'm very hopeful we shall continue to see it.

Restaurant meals. Mr. Member, we had a lot of suggestions in the course of the tax tour last fall, including a sort of little travelling band which followed me around and read the same presentation from the restaurant association. But when I stepped back there were just a variety of suggestions that we go right down to a flat tax of say 3 percent on everything to increasing the exemption from $7 to $10, as you commented just a few moments ago, to leaving it the same, to dropping it down perhaps to a threshold level of $2 or $3. I decided to leave it where it was.

Again, looking in our market area, if you will, that's not out of line, with the exception of Alberta and Saskatchewan. We have 7 percent on $7, nothing underneath. It's 6 percent in Manitoba. It's 7 percent in Ontario, and I think, subject to correction, that that is down to zero; that's even including a cup of coffee or a soft drink or whatever — 7 percent on anything consumed, even on packaged foods served by vending machines. I don't want to get into that kind of craziness in B.C. New Brunswick is 10 percent, just gone to 11 percent, and with the threshold lowered dramatically to where I understand it's going to involve a cup of coffee or perhaps something just above that. So you pay 60 cents for a cup of coffee, and have a doughnut and have 11 percent sales tax added on top of that. In Nova Scotia, 10 percent; 10 percent in Prince Edward Island; and 12 percent in Newfoundland.

So there are as many opinions on restaurant meal tax as there are persons in this building today. I don't say adamantly that the position I took initially and confirmed this year is the only right one. But I don't want to see that threshold lowered below $7. I think that really interferes with a lot of people who of necessity, at the workplace or in carrying on their daily business, have to eat something out. There is an element of choice in terms of when you hit that $7 and up. It's not going to hit many breakfasts or lunches. It's going to make itself felt more at the evening meal. That's what I was striving for, and that really is the way I would hope that we can keep it.

I frankly think that a number of people who visit this beautiful province are used to paying it in their home jurisdiction, again with the exceptions, as I say, of Alberta and Saskatchewan.

The sales tax on fund-raising activities. Your colleague the second member for Victoria (Mr. Blencoe) touched on that earlier this afternoon. He specifically mentioned Christmas trees. I responded to him, and I indicated that it's something that I don't like. I don't have the answer today, but we

[ Page 6433 ]

will be addressing it through the fall, We have to have something in place by the end of October.

That, I trust, addresses most of the concerns raised by that member.

MR. MacWILLIAM: I'm encouraged to hear those recent figures on the accommodation industry. However, I might point out that those figures are only a portion of the picture, and that really the figures for all last year are still under the break-even point. I really do hope that the trend does continue. I think that is showing an increasing strength in the market.

However, going back to your comments on the restaurant meal tax, the $7 limitation and then the taxation on meals above $7, I think probably the minister has heard a lot of very good arguments in terms of how awkward that present system is. I'll cite just a random example. If a couple of people wander in and one person has a meal of $6.40 and coffee of 60 cents and then orders a piece of pie, that brings it up slightly over $7. So rather than paying tax for the meal, what often happens is that the person says: "Oh, well, they had the pie. I had this and this and this." It's a real hassle for the business itself, in order to accommodate the manoeuvering that is going on with regard to this.

I think it probably increases the workload on the staff, and it certainly will increase the operational costs of the business in terms of just how that tax is levied. The suggestion I made is having a basic tax exemption for all meals, say, under $10 and then tax only that portion above that. Perhaps it would make it a little bit simpler to accommodate what in reality is a very awkward situation for the people on the front lines. That is perhaps something that you could consider.

To the social service area — I'm glad to see that you are looking at some aspects of the area. Above and beyond Christmas trees, there are many other fund-raising aspects that you didn't address — as to whether you're considering the elimination of taxes from these activities also. I think there's confusion within the organizations themselves. For example, the Lions club approached me in terms of many of their activities that are exempt and many of them that aren't exempt. They're confused, but more than the simple confusion is the fact that they feel it's very unfair. They're trying to provide a service to the community, and the money they raise goes directly back into such a large variety of community functions.

Their position is that the 7 percent cut that the government is taking is really 7 cents on the dollar that isn't going directly back into the community that that organization services. I guess it's a philosophical position or question that they're asking. Should that money be going directly back into the community to service the programs, or should it be going into provincial revenue? Right now, it's being tunnelled off and out of the communities. They feel it should be allowed to go directly back into it.

HON. MR. CURTIS: In terms of the non-profit societies, we're striving for simplicity and fairness and equity. I have made notes and the deputy minister has also made notes with respect to this. It isn't just Christmas trees, you're quite right, but twice today Christmas trees have been mentioned, and then last December I had quite a few letters dealing with nothing else but Christmas trees. I undertake to review it to try to achieve further equity and fairness in the process, Mr. Member.

MR. MICHAEL: Just a few words on the estimates, Mr. Chairman. I have some concerns about some of the small nuisance taxes. I think of forest products companies paying hundreds of thousands of dollars in taxes in a year in the form of stumpage and property taxes and things like that. I'm getting complaints that some of the things they get from government in the way of taxes and assessments are just bare nuisances — the $10 fees for this, and $15 fees for that, and $25 fees for this. It costs about $17 or $18, I am told by a controller of a forest products company, to issue a cheque nowadays. So if he's writing a $10 cheque, it's costing him $17 to send away $10. I would think that when the ministry receives that $10 cheque, by the time they cash it and process it and put it through the system, it's probably going to cost another S15 or $20.

So I would ask the minister to have a look at some of the small miscellaneous types of taxes to see whether they can't be built into the overall cost of operations in some other manner, to ease the cost of processing non-productive work, certainly in the forest industry. The wealth is made by the workers, by the productivity, by the ingenuity; it is not made by spending money on nuisance items such as that.

[4:00]

Another complaint that I'm receiving concerns the tax notices that people receive for their payment of taxes in July. They're wondering if there can't be more advance notice given to the recipient of these tax notices. They receive them 30 days in advance now; they receive them in early June and they are expected to pay their taxes in early July. If we just think about that, a lot of people are on holidays, particularly some of the seniors, at this time of year — they're gone for a period of time. I'm just wondering if the minister would have a look at the complexities of either setting the July tax payment back into August or perhaps getting the tax notices out late May, the early part of May or even late April.

HON. MR. CURTIS: Mr. Chairman, I appreciate the courtesy of the member for Shuswap-Revelstoke in letting me just step out for a moment. As well, I hear what he was saying. The whole process, as I understand it historically, of collecting property taxes.... It is really not that many years ago that they were collected by a number of local governments in September, I think — it was after the harvest. That was the whole process. You had your revenue from your harvest — bearing in mind our largely agricultural roots — and then you could pay your taxes. Gradually it was moved forward. I think you've given me an option, Mr. Member, to either delay the collection date — the due date — or advance the date on which the notices are sent out. I must confess that over time I've felt some frustration with the relatively short space of time between the receipt of the property tax notice and the due date. There are a number of weeks, but a number of people do in fact go away for several weeks. So we can strive, more likely, for the earlier delivery of the notice, rather than a delay in the due date. I can't make any commitment, but I know that the property tax people will be instructed, as a result of these comments, to look at it and to raise it with me.

MR. D'ARCY: Mr. Chairman, before I get into my remarks, I just have to say, commenting on the remarks of the member for Shuswap-Revelstoke (Mr. Michael), that if there are companies out there in which it costs $17 or $18 to write a cheque, it's not just the government that has a top-heavy

[ Page 6434 ]

bureaucracy in this province. I never realized when I was paying my West Kootenay Power and Light bill or B.C. Tel bill that I was performing a service that costs some people $17 or $18 just in the process of writing a cheque. I also have to comment that everybody knows the due date of taxes, and you don't have to have the notice to pay them to find out how much you owe. I've simply had to phone up city hall to find out how much I owed, and sent them a cheque. You don't have to have the notice.

In any event, Mr. Chairman, what I wanted to talk about with the minister — and these are some of the things which I spoke to the minister and other members of the commission about when it was travelling throughout the province.... There is at least one major new twist to one of the things I want to talk about, and that's the water tax and its impact on the smelting and refining industry in the West Kootenays. I'm sure the minister knows this, but for those who are not aware of it.... Many British Columbians and many people in Canada believe that there is a smelting and refining interest in the West Kootenays because of the proximity of various ores. That is simply not the case. There is a smelting and refining industry there because of the availability of low-cost hydroelectric power. It's exactly the same reason that Alcan is in Kitimat. It's not because there's any aluminium ore there; it's because of low-cost hydro power. When the provincial government raised water taxes over the last five or six years by, depending on who you talk to, a factor of 18-22 to 1, it removed most of the the reason there was for having a nonferrous smelting and refining industry in southeastern British Columbia.

As I mentioned before, Mr. Chairman, during the estimates of the Minister of Industry and Small Business Development (Hon. Mr. McClelland), when we speak of that smelting and refining industry in southeastern B.C., we're not just talking about the Trail area but also about the longevity of the Sullivan mine in Kimberley, as well as the viability of numerous other small mines in British Columbia and the Northwest Territories. The fact is that for the most part in our part of the world, when you find non-ferrous ores, those ores have lead in them; and lead modernization in Trail is a key to the continuation of this industry — not just the smelting industry but also the mining industry, and, quite frankly, a good part of the railroad industry in the southeastern part of the province.

[Mr. Ree in the chair.]

Sinclair Stevens recently announced that the federal government was not going to provide a grant to Cominco unless there was a significant provincial component. He also announced that they wanted a review of the provincial water tax and its effect on that particular industry. That's a new twist, Mr. Chairman, and I would hope that the minister and his Treasury Board colleagues would have a significant look at that most regressive of all taxes and its effect on industry in British Columbia. It's a regressive tax not just on consumers in British Columbia in the sense of the retail sector, but it's a regressive tax because of its effect on industrial and commercial operations in the province of B.C. And now it would appear to have a significant effect on the longevity of lead smelting and refining in the Trail area.

I want to reiterate to this committee, as I did during the previous estimates, that there is now a new large deposit being developed in Alaska which is significant in that because of the nature of the ore and the nature of modern technology the lead can be gotten out at the mine site and becomes only so much more waste rock. Once again this significantly hastens the non-viability of lead smelting and refining not just in the Trail area; it shortens the expected life span of the Sullivan mine in Kimberley. I hope the minister is going to have a very good review of that.

[Mr. Veitch in the chair.]

Another point I want to raise with the minister is the issue of fair taxation of B.C. Hydro and Power Authority generating and storage facilities. In the late 1970s the government the minister represents began to pay fair taxes on all government properties throughout the province, but for some reason Hydro was left alone. I would point out that B.C. Hydro on Vancouver Island, by and large, and in all the hydroelectric plants surrounding the lower mainland — in the Fraser Valley — and those, for the most part, in the Bridge River-Lillooet area, as well as in all office buildings, installations and substations, pays full municipal taxes, or grants in lieu thereof but equivalent to the amount. I'm sure it's not lost on the minister that where these facilities are located in nonmunicipal areas, the significant revenue is directly to the provincial government and not to local government. However, in the West Kootenay — and, significantly, two major projects in my own riding — B.C. Hydro either pays no taxes whatsoever or pays only school taxes.

This is true not only in my riding; it's true on hydroelectric projects in Shuswap- Revelstoke, in Okanagan North, in Nelson-Creston and on the projects in the Peace River. This is simply not fair. It is not fair that the Crown corporation should pay full taxes in some areas of the province, partial taxes in others and none at all in other areas. It's totally inconsistent. I would hope the minister, who has authority in this regard to send Hydro taxation bills, will take steps to do this. We are not talking about a large amount of B.C. Hydro's costs of operation — less than 1 percent, in fact — to erase this anomaly; we are talking about a significant source of revenue to regional district government in my area as well as a significant source of revenue to the city of Castlegar. Every dollar Hydro does not pay is a dollar that must be raised from other sources, and I'm sure that's not lost on the minister either.

I want to quickly go over my earlier request that improvements on recreational land be exempted from taxation assessment for the first $10,000 of value. I want to emphasize that I'm not talking about land values here — only the improvements. This would not be a significant change for the person who owns a $150,000 condominium at Whistler, because they'd still be paying taxes on $140,000 of the improvements and full taxes on the land, but it would be a significant improvement for those people all around the province who have very minor, very rustic improvements on recreational land — perhaps an old camper trailer permanently moored in one spot, not to be moved. In many cases these very minor improvements are owned by senior citizens and people who have very low personal income. We're not talking about a significant change for people who have well-to-do summer homes. We're talking about something that must cost the government a whole lot of money to collect and produces very little revenue.

[ Page 6435 ]

1 make a strong plea that the first $10,000 of improvements — only improvements — on recreational lands should be exempt; that would apply whether the land was leased or owned fee-simple or whatever. As I've told the minister before, the definition would be one which would be made under guidelines laid down by his ministry. enforced, as with other assessment regulations, through the assessment authority, and subject to appeal to courts of revision, as with other assessment regulations.

I want to talk, briefly, about gasoline taxes and taxes on restaurant meals and hotels. I've long felt that the most significant source of tourist revenue to British Columbia is keeping British Columbians at home. One of the reasons British Columbians leave is that very often rates are lower in other jurisdictions. In any event, I'm more concerned about the costs of being in British Columbia to British Columbians than I am about the costs to tourists who might come here. I'm not opposed to tourism at all. We hear a great deal about what we should be doing for tourists and very little about what we should be doing for British Columbians, who are paying the bills year-round.

The minister mentioned that in terms of gasoline taxes, our proximity to Alberta.... I would suggest to the minister that it's not the length of the border with Alberta that's significant in terms of an obvious difference in gasoline costs or motive fuel costs. Most British Columbians are not in a position to make a quickie trip to Coleman or Calgary or Peace River or Fairview, Alberta, or wherever. But there are an awful lot of British Columbians that are in a position to make a quickie trip to Washington state, northern Idaho or northwestern Montana; that's where the significant difference is. That significant difference is not because base petroleum prices are different in those jurisdictions to the south of us, but rather simply because both provincial and federal taxes in British Columbia are higher than federal and state taxes in those three jurisdictions to the south of us.

Yes, I would agree with the minister that there is a significant increase in the occupancy rate in the hotel and motel industry throughout the province. That's not going to continue throughout the summer, however, simply because the room rates are basically 100 percent occupancy anyway. Let's hope it does continue in the fall, though, when we do get into those shoulder months.

I want to make a further plea, that when considering exemptions from the provincial sales tax, one thing that should be seriously considered is an exemption involving necessities of household hard goods. I'm not talking about optional things. Surely, Mr. Chairman, we have to consider the fact that basic household supplies such as detergents, personal hygiene equipment and paper goods are essential. These are items which the poor with large families must buy in fairly large quantities, and the sales tax applying to these things is clearly regressive. I think those items should be made exempt.

The minister, with his list of exemptions from the sales tax — and with previous ministers — in many respects made the sales tax a good deal less regressive that it otherwise originally was. In spite of what the minister says in terms of some submissions, I don't think there are too many people who would argue with that: that the sales tax is by nature officially regressive but can be made different by a sympathetic and understanding list of exemptions. I think that basic household hard goods should be added to that list.

[4:15]

Those are all my remarks right now, Mr. Chairman. The most important thing, though, just before I sit down, is that I think it's very important that the water tax in British Columbia, particularly as it applies to mining and smelting in southeastern B.C. be reduced. Ottawa has made this a condition of assistance. I don't believe there is any way that the existing operation will be modernized. I don't believe there is any way that the existing operation will continue to run for very much longer unless it is modernized. Ottawa has made it quite clear that they are not going to participate without a provincial component, and part of that provincial component, they are saying at this point, must be a water-tax reduction. I would like to hear what the minister has to say on that.

HON. MR. CURTIS: The member for Rossland-Trail has covered a number of items, but he restated his major concern. I don't want to appear to be engaging in semantics here: it is not a water tax. That, Mr. Member, is currently something being considered elsewhere. It is a water rental; it is a fee for using water for a particular purpose; it's a rental fee for usage.

The information that I've received from Cominco, with the freezing of the water rental fee for five years, is a little more optimistic than the member has suggested. Of course, as the member knows, the assistance provided for lead modernization in Trail is being analyzed by Cominco. Also, they seem to be particularly pleased with the machinery and equipment moves, to get down to zero on new M&D. The city of Trail has agreed to the partnership proposals advanced by my colleague the Minister of Municipal Affairs (Hon. Mr. Ritchie). Then we also have reduced the property tax rate for industrial/commercial, getting down to the 2 to I ratio from the 3 to 4 that exists now.

I will continue to review this summer and fall not just the case of something such as Cominco but the total tax burden on business and industry in B.C. I may not do it quite as extensively as last year, but clearly we have to continue to watch that whole area very carefully and to determine if we are inhibiting or impeding the economic renewal that is underway; that was the whole reason for last year's discussion paper and then the tax tour.

I note, Mr. Chairman, that the member for Rossland-Trail was one of two members of the other side, the opposition, who took the time to come to the meetings and make their presentations and offer views. A number did from this side of the chamber, but it was good to see that member in Castlegar in a very crowded room, as I recall, making his observations and his suggestions.

We're continuing to press on the question of Hydro paying taxes on its generating facilities and ancillary installations. I have no information for the committee today, but it's very much a current topic, no pun intended — a topic still before us in terms of our review.

I have to confess that the improvements on recreational land with a $10,000 level.... I think that one may have been dropped in the course of reviewing so many suggestions. I don't have that information today, Mr. Member, but I will look at that. I can't honestly tell the committee what happened to that. We had it as a reviewable item, but there were so many by the time we had all the briefs. If I can possibly check back in my notes and seek the recollection of others, it's something that you may find in next year's budget, if it is found to be appropriate.

[ Page 6436 ]

You, along with two or three other members today, have spoken about gasoline tax and restaurant meal tax, and I hear what you say with respect to B.C. residents.

The sales tax exemptions, Mr. Chairman, I spoke earlier about the number of exemptions. There are literally hundreds of them. I think hundreds is perhaps a little light; there might be a couple of thousand of them when you consider all industries. There are several hundred in agriculture alone when you start looking at individual items. But I note what you've said about things such as personal hygiene and paper products. We did earlier in this decade deal with so-called patent medicines, and I had no problem in reaching that decision. I will review these.

MR. D'ARCY: Mr. Chairman, I appreciate the minister's comments. Very quickly, though, I just want to note that it's technically correct to say it is a water-rental fee, but the fact is that it's not for use of water on any sort of permanent or diversionary basis. The amount of water that Cominco and most industry uses out of the Columbia River is insignificant. In any event, they return it in basically a fairly purified form. The water fee that they pay is simply because water coming down the Kootenay and Pend d'Oreille Rivers happens to pass through generators and produce hydroelectric power. It doesn't get diverted or contaminated in any way. In fact, in the case of the Corra Linn Dam on the Kootenay River, its existence improves the recreational and sport-fishing values on Kootenay Lake, which is something there is no refund for. So there's no water being diverted, and there's little or no environmental effect. These are run-of-the-river dams; they're not storage dams. They haven't flooded vast areas of property; in fact, they have protected areas from flooding, particularly in the Creston Flats area. Yet there is this constant water tax being put on these five projects, four of West Kootenay and one of Cominco's on the Kootenay River and Cominco's project on the Pend d'Oreille River.

Those are basically the remarks I want to make. I would point out to the minister that he says that British Columbia Hydro fair taxation is something that he is working on. I'm very glad to hear that. The last time I heard a minister say that was when the member for North Vancouver–Seymour (Mr. Davis) was the Minister of Energy back in 1976 or 1977. So at least we have a minister say that he's looking at it again, and I want to thank him for that.

It is my understanding, though, Mr. Chairman, that legally the only reason Hydro does not receive tax notices on certain of its properties, where it receives on most of its properties tax notices from the appropriate taxation authority.... The only reason for that is an order-in-council passed by the Minister of Finance back in the early 1960s. As with any order-in-council passed by a Minister of Finance, it can be altered, rescinded, changed or cancelled by the present Minister of Finance. So I may be oversimplifying things, Mr. Chairman, but I believe that in consultation with his colleagues the minister can change that situation literally by the stroke of a pen.

MR. COCKE: Mr. Chairman, I'm sort of motivated to say that my colleague almost had me in tears over Cominco. But I don't think I'm going to argue that one very much. I do feel that they have had a very nice ride for quite a few generations.

1 want to talk a few minutes about the minister and his travels. You know, this elitist government has absolute contempt for this chamber and the members in it — absolute contempt. This is the second time that that minister has gone on a major event like this — once when he was Minister of Housing, and now this time. May I remind you all that if you look in your desk you might possibly have a little book called Standing Orders, and that Standing Orders outlines the committees of this House, and there is one committee that is called Public Accounts and Economic Affairs.

That committee, or another committee, could be structured by the Legislature, as the feds do and as most other jurisdictions do, so that when people go out eliciting information, they may then feed into the assembly as opposed to into a ministry.

MR. CHAIRMAN: Hon. member, I'm having a little problem relating this to the duties of the Minister of Finance.

MR. COCKE: Oh, well, if you're having problems, don't bring it to my attention. There's no problem here.

MR. CHAIRMAN: Order!

MR. COCKE: The minister went on this trip, and the trip was charged to the people of British Columbia. I'm telling you that there should be an alternative to that system. As far as I'm concerned, a special committee could be struck. Look, we've been in deep trouble in this province for a number of years — three or four years particularly. So the minister decides to go out to investigate how we should get out of this by having discussions with the public.

What better approach could there be than the kind of approach that you get when an interparty — that is, a representative group — goes out from this Legislature eliciting that information. The minister, I am sure, has been around here long enough to know that all he has to do is put forward a resolution instructing a committee to do whatever he would like it to do, including eliciting the kinds of information with respect to better economic development, and so on and so forth — taxation, or whatever. He could travel with that committee.

Instead of that.... Then he gratuitously gets up in here, trying to make the rest of the NDP feel ashamed for not having attended and given briefs to his committee, when our job is here in the House or with the committee of this House. Congratulations to you and my colleague for doing that, but that's not the whole idea, in my view, of a way of eliciting information from the public. The minister may get up and say: "Oh, well, it would be a little bit costly, you know, if we sent more than three or four people around."

I suggest very strongly that when you send a committee of this House — and particularly a committee of that stature — you could have Hansard, you could have a record of everything that occurred, you could have that digested thoroughly, you could have it discussed within the committee and you could come up with some major recommendations that this province needs. There are a number of other committees — and I can't go into them, unfortunately, at the moment — of this Legislature that should be put to work. That particular committee, whether it be Public Accounts and Economic Affairs or a committee struck by this Legislature, should be the vehicle to provide this assembly with the information that can bring about a far better and more constructive debate.

[ Page 6437 ]

No, no. You go out there all by yourself and listen to the folks, and come back and be the hero. "I have gone out; I have been instructed by the great populace of B.C., and I'm coming back to tell you that I'm going to do a good job about this whole thing." Well, as far as I'm concerned, you started off on the wrong foot. Mr. Chairman, he did, and I'm sad about it. Somehow or another — it's probably going to take an election — this assembly is going to have to become accessible again to the public of this province. It isn't now and won't be as long as we have this kind of arbitrary movement of ministers — little cliques of government or government supporters moving around getting information and sifting it through their particular bias. It's not good enough. Mr. Chairman, I think I have said my piece on that particular area.

[4:30]

I know that part of the responsibility of the Minister of Finance is to see to it that his colleagues have as lean a budget as is possible to create in B.C. It has been outlined that these lean budgets have done nothing to correct our deficit situation. You see, Mr. Chairman, what this government thinks is that the way you eliminate deficits is by making everything much leaner — that deficits cause recession. Mr. Chairman, recessions cause deficits. If you look at it from the exactly opposite viewpoint, then I think maybe you have an opportunity to see the harm that has been done to our provincial economy by this attitude of "deficits cause recession." The government wasn't able to bail itself out of a deficit position by using all those hard methods. They didn't do a bit of good. All they did was sink us deeper in the mire of recession. They put 5,000 people out of work with that kind of philosophy, and they were proud of it: "My, what great people we are. Now we will depend on the private sector to come in and look after jobs for the folks."

MR. WILLIAMS: That doesn't include B.C. Hydro.

MR. COCKE: That's right. Look at Hydro.

AN HON. MEMBER: School boards.

MR. COCKE: That's right. I'm not talking about Hydro and school boards and all the rest of it. I'm just talking about direct government jobs.

Do you know what I've heard ever since I began listening to this Fraser Institute philosophy? It's being parroted by business: "We don't want any more employees. We want to cut ours."

AN HON. MEMBER: Who's the parrot?

MR. COCKE: I don't know which is the parrot.

They are parroting the Fraser Institute. When that Fraser Institute met with the cabinet and instructed this kind of economic direction, they hurt this province immeasurably. All you have to do is compare our activity and our response to this economic direction with the rest of the provinces in the country, and you will see that we chose the wrong road. All government does when it takes that hard-line position is provide that kind of leadership for the whole province. That's the kind of leadership we've been getting here. I'm sorry to say it hasn't worked. Now we have a little deathbed repentance: there are some bills coming in that are going to be helpful to this and helpful to that. It's a little late.

[Mr. Strachan in the chair.]

We got ourselves into this tight spot, and it's unfortunate. I've not only seen this minister's direction in the public service, but I've also seen that tightwad situation hurt our forests immeasurably. Suddenly we're hearing about a little bit of silviculture that's going to happen. But it hasn't been happening. We've cut everything from energy resources.

People. Mr. Chairman. until recently, and really until now, we've been cancelling all provincial direct lending programs to small business. We have taken an incredible direction that has carried us a long way beyond where that recession should have taken us. It has put us in a position such as we haven't been in in this province since the thirties — breadlines, food banks and the like.

It's just a shame that this beautiful province should have been impaired to the extent that it has by some very bad recommendations from a group who really don't understand what it's all about. They only have an equivalent at the University of Chicago, as I recall. That's where Mr. Friedman hangs his hat quite often.

AN HON. MEMBER: He's a progressive compared to the Fraser Institute.

MR. COCKE: Well, I don't know. I'm not going to get into a debate with my colleague. Let's say they're on a par, and we can leave it at that.

It's been horrendous. I wanted to say those few words about the philosophical direction, which I think has been dead wrong. I also want to comment on one other thing that I think is equally stupid: vote 33 under the minister's votes, the compensation stabilization program. I can't believe some of the utterances of that government. At once you hear a Minister of Labour or Minister of Education suggest that they believe in bargaining and so on and so forth. So people go out and bargain in good faith, and old Ed Peck takes care of all of that. I'll tell you, Mr. Chairman, it's not easy to be part of an assembly that's become a laughing-stock of this country. In this once proud British Columbia I hate to see it happen, even though I am totally opposed to this government, and I'm sure that it's going to get this government out of power much sooner than we think.

One more word, Mr. Chairman. If I could leave just this much with the minister, if he's interested in eliciting information: think about the standing committees of this House.

MR. WILLIAMS: When the member for Prince Rupert (Mr. Lea) got up this morning, he reflected on the fact that everybody listens with great anticipation to the federal budget, because it has some meaning in terms of its impact on the national economy, and that that is less so in British Columbia when our budget comes down. He argued, in effect, that there isn't a great deal of economic planning behind the budget. The minister responded by saying: "Good lord, I...." To paraphrase the minister: "Why, we actually submitted this document with the budget this time around, and it's called "The Economy in a Changing World, March 1985, Province of British Columbia, The Hon. Hugh Curtis, M.L.A., Minister of Finance." But if you read it, it's like most of these documents. It's an analysis of the past. It's essentially hindsight.

There are three major sections. The third section grapples with the tools available to the province in directing the

[ Page 6438 ]

provincial economy. It starts with a whole range of excuses to explain away what is perceived as the province's lack of power and authority.

One must concede, yes: as was mentioned, we're part of a nation-state. But I know of hardly any other country in the world that extends power and authority and decision-making to its regions, provinces or states like the nation of Canada. We are a highly decentralized nation. The only one that I could think of that would be more decentralized would be Switzerland. Switzerland's is a very successful economy indeed.

After all that, what do we say? We finally get down on page 12 of a 15-page report, after essentially dealing with background. Provincial government economic policy, part 3, comes on page 12. What do they say? "In general, stabilization policies are more effective at the national level.... Further, provincial industries relying heavily on external markets do not benefit materially from policies designed to stimulate demand...." Okay, one concedes some aspects of these points that are made. Fair enough. It continues: "At the national level, international trade policy, taxation policy..." are major factors. "Provincial governments are again constrained constitutionally from legislating in certain areas."

There's a kind of a mindset there in a way, it seems to me. When you put on all these kinds of things, it's kind of an excuse. In a way it's a self-fulfilling prophecy. It's a way of saying: "Well, Ottawa really is in control." But that's not true — not in Canada. The post-war history of Canada has been an extraordinary one of power developed within the regions and the provinces. The history of western Canada in the last couple of decades has been an extraordinary success story in terms of the regions understanding the resources that are totally within their control. The land base of every province is within the control of the province.

Think about that, fellow legislators, then look at the budget. What does it tell us? Imagine if you or I owned all the forests of British Columbia. My Lord, you'd think it would be the equivalent of the Shah, wouldn't you? But under this administration, it's a negative cash flow. Imagine! If one owned all the trees in British Columbia and was selling them, as this administration does, one would expect to make a few dollars in the process. We don't make a cent. But worse than that, we lose $100 million, $200 million. Isn't that what it is in this budget, Mr. Minister? A negative cash flow of $200 million, when we own all the trees of British Columbia. What kind of financial management is that? I know you shouldn't carry the can for all of it, because there's a guy much more incompetent than you down the aisle and hiding in the comer at the moment.

MR. CHAIRMAN: Order! The remark in reference to another hon. member will be withdrawn.

[4:45]

MR. WILLIAMS: Everything is relative, and I will withdraw. I would like to say that this minister is far more competent than other ministers.

MR. CHAIRMAN: No personal references, please. To the vote.

MR. WILLIAMS: I'm willing to give the minister credit. I think he's one of the most competent ministers in the administration. Must I withdraw that, Mr. Chairman?

MR. CHAIRMAN: To the vote. Please proceed.

MR. WILLIAMS: And I say that in a genuine way as well. That is my view in terms of this administration.

Imagine a negative cash flow out of all the trees in the province. It takes a lot of skill to set up a system where we lose money on all the trees we own, but that's what we've got. That's counter to the pattern in this nation over the last few decades in western Canada. There haven't been negative cash flows out of the resources that we own.

So that's one part of it. You carry on and say that the government of British Columbia undertook restructuring of economic policy, etc., and then you go into the restraint program. That's still looking backward, in a sense. Most of the document is looking backward. The last page of the document says: "Significant government borrowings were undertaken...." Indeed. As the member for Nanaimo (Mr. Stupich) said, we've gone up $12 billion-plus in borrowings since this administration took over. We needed it for income assistance programs and other social programs, and then for major capital projects — northeast coal, B.C. Place, Expo, etc. Fair enough. But then there's the interesting statement: "In the past three fiscal years, the government has directly and indirectly provided fiscal stimulus of several billion dollars, which must be repaid through the returns earned on the projects...." Now we get down to the nub of the kind of economic planning under the hands of this minister.

What are the returns on the projects you have pursued? If you start going through the trail of projects, what you find more often than not is a negative rate of return. This morning you went over the indebtedness per capita. You talked about direct indebtedness, about the kind of social capital indebtedness, and then about a kind of commercial capital indebtedness, for want of better terms. The commercial side is the intriguing one. Okay, we'll buy that stuff in terms of the social side of things. That's our tendency on this side of the House. But what about the commercial side? That's where your kinds of rules are supposed to be applied. That's where businessmen's rules are supposed to be applied. That's where you look for a rate of return beyond the cost of borrowing. That's what any businessman would do.

I think we have an administration that is somewhat out of control here. I think the decisions on borrowings are made in a random kind of way. I don't think your ministry is on top of it at all. If they are, there must be one stack of negative reports on these negative cash flow projects. How many reports have you got on ALRT telling you it's a bad deal? How many deputy ministers, assistant deputy ministers, have put it in writing and said it's not a good deal, it doesn't make any sense? How many of these other projects have undergone the same kind of scrutiny and come up with the same kind of negative numbers? Let's look at some of them.

B.C. Hydro. W.A.C. Bennett used to call B.C. Hydro the jewel in the crown of Social Credit. Maybe a little bit in the way of purple prose, but in many ways B.C. Hydro has been an engine in the provincial economy in the modern era. It is the greatest borrower of them all. If you look at their projects..... Let's start with Hydro, and we'll go on to others, in terms of our negative cash problems and of commercial projects. Two billion dollars in Revelstoke Dam. In

[ Page 6439 ]

terms of anticipated changes in demand, the alarm bells were ringing just about a decade ago. Nobody listened to the alarm bells. The borrowing went ahead, but when the borrowing went ahead one would assume one would figure out what to do with the surplus — that is, the surplus energy generated. That didn't happen. There was the automatic, arrogant assumption on the part of B.C. Hydro that they would have free access using Bonneville Power Administration lines. That didn't happen. That got blocked. They cut a deal with Los Angeles, and then they found out they couldn't use the intertie system of Bonneville, and Bonneville has since had the laws changed in the United States to deal with B.C. Hydro. None of this was done ahead of time. The Finance ministry is asleep at the switch; Hydro is asleep at the switch. We have a $2 billion project, and what's it good for? It's good for storing water and spilling water over a dam. That's the reality in terms of your megaprojects. The alarm bells rang at an early stage. The demand was not there. A program had to be put in place. Then you'd have a pay-back. Instead we have a negative rate of return on the most costly dam in the province. Incredible! Under this kind of program any businessman would have been bankrupt years ago. Your commercial projects don't hang together as commercial projects. There's a fatal flaw in your argument that these are commercial projects and must pay and will pay back themselves. You're assuming that they're all assets. The problem is that at the moment they are burdens, and those burdens are squeezing the rest of the province.

What has the argument been with the school boards around British Columbia? You've essentially been arguing around $50 million — maybe $30 million in the end. You've removed school boards because they wanted to spend on reasonable programs within their communities, and you've said: "Off with their heads." You got rid of them. The reason is you're squeezed by the burdens you yourself have accepted on projects that can't be paid back currently at all. That's the reality, and that's the ultimate in mismanagement. Huge capital commercial projects that will not pay back — that's the burden we all carry in British Columbia. That's why hospital wards get closed down. That's why school boards get thrown out. Because you have huge capital programs that will not and cannot pay for themselves, and the bulk of the reason is incompetence. There you are with B.C. Hydro.

It's what W.A.C. Bennett used to call dead-weight debt. There's been no plan. There's no evidence that you've got macro-economic capability. You haven't brought on the personnel to make the big macro-economic choices. If we're going to go into these huge projects — and as you've indicated in your own report you're doing for Keynesian reasons — fair enough. The member for North Vancouver (Mr. Davis) accepts the idea that to some extent we’re all Keynesians these days, or most of us.

But then shouldn't one ask oneself the basic question: what is the employment impact of a project? A decade ago in America they were talking about environmental impact. In bad times what we should be doing when we look at projects is looking at their employment impact. But what have your projects been? Have they been labour-intensive projects? You say in your own report that this, in effect, is a Keynesian approach and you're creating jobs through these major projects. Okay, but how many jobs are you creating? That's the question. Employment impact is just not there. We should think in terms of the number of jobs per dollar spent. I think that's a fairly unsophisticated request, or a reasonable, straightforward one in these kinds of times. Again, if you apply that test to northeast coal, what we've got is a capital intensive project.

There are all kinds of labour- intensive opportunities in terms of long-term borrowing, long-term programs and long-term investment. but there isn't that attempt made to look at labour-intensive projects in this way. It's a fairly simplistic, off-the-shelf, capital-intensive view of these problems, and it isn't adequate for the time.

MR. CHAIRMAN: Time under standing orders has expired, hon. member.

MR. WILLIAMS: Okay. There are certainly so many negative pay-back projects that I'd like to continue shortly, Mr. Chairman.

MR. STUPICH: Mr. Chairman, I certainly enjoyed listening to the second member for Vancouver East, and I would like to hear more from him on this topic.

Interjections.

MR. WILLIAMS: No, I have some doubts about that, as a matter of fact.

You know, if you look at northeast coal, the province spent over $700 million there and $500 million in the BCR and $33 million for B.C. Hydro's extension to Tumbler Ridge, $95 million for Tumbler Ridge itself, and highways and other are $95 million — around $720 million in terms of the province. It's a very significant amount, and all of it really predicated on a kind of return, of course. It just isn't there today. We've lost in terms of mistakes made in the private sector, we've lost in terms of the Japanese....

HON. MR. CURTIS: On a point of order, Mr. Chairman, I've listened to the member. These are not the Premier's estimates.

MR. LAUK: Where is the Premier?

HON. MR. CURTIS: The Premier will be here at some point, Mr. Chairman, for the debate on his estimates.

I'm interested in the theories advanced by the second member for Vancouver East, but I think there has been control through the day in dealing with the administrative responsibilities of a minister. When I hear of northeast coal and the private sector in northeastern B.C., I have a little bit of trouble relating that to the duties of the Minister of Finance.

MR. CHAIRMAN: The point of order is well taken, but I will entertain another one. The member for Skeena.

MR. HOWARD: It was this same minister who is now objecting who got into B.C. Rail earlier today — none of his responsibility — talking about his preferred share issues. It was this minister who brought in a budget to give B.C. Rail $470 million last year. Aren't we entitled to examine those things?

HON. MR. CURTIS: I think, Mr. Chairman, that the member for Skeena would know that the preferred share

[ Page 6440 ]

issue for B.C. Rail was indeed a responsibility of the Ministry of Finance. It was undertaken in the role of fiscal agent. But....

Interjection.

HON. MR. CURTIS: Just relax.

Mr. Chairman, through you, the member is starting to talk about matters which are well beyond the duties of the Minister of Finance. B.C. Rail's preferred share issue was not; clearly it was a duty within this ministry.

MR. HOWARD: The purpose of those preferred shares was so that B.C. Rail could hide the debt charges it incurred to build the Tumbler Ridge branch line.

MR. CHAIRMAN: Order, please. That is no longer a point of order.

MR. HOWARD: Exactly connected with northeast coal.

MR. CHAIRMAN: Order, please. Hon. members, the Committee of Supply will recognize that we have discussed many items that would be more appropriately discussed under other minister's estimates, and I think a review of the Estimates book before us will show clearly where ministerial responsibilities lie.

The Chair recognizes the second member for Vancouver East, but clearly we must confine our remarks to the administrative responsibilities of the minister whose estimates are before us now, and that is the Minister of Finance, vote 30.

MR. WILLIAMS: I assume, Mr. Chairman, that....

MR. CHAIRMAN: One moment. Order, please. The member for Skeena will come to order. The second member for Vancouver East continues on vote 30.

MR. WILLIAMS: Mr. Chairman, I assume that the minister is responsible for provincial borrowing, and....

MR. HOWARD: Oh, no.

MR. WILLIAMS: No? Okay. At any rate most of these things are borrowings of one kind or another, but that's all the time I really intended to spend on that aspect of the northeast. But I would hope that the House Leader would assure us that the Premier will indeed be here for his estimates when they come up, since that didn't happen last year.

AN HON. MEMBER: Next February.

[5:00]

MR. WILLIAMS: Thank you for the assurance.

MR. CHAIRMAN: Thank you. To the vote, please.

MR. WILLIAMS: Let's look at Hydro again in terms of Hydro borrowings. Here we've got negative projects in terms of income, but worse than that, we borrowed in American dollars when everybody else was scrambling to get money elsewhere. Everybody else was scrambling to get out of the U.S. market, and we were still moving into it. I have some trouble with this in a broad sense of economics, because when there's slack in the national economy within Canada, it seems to me that there is a real argument for internal borrowing within Canada. You're avoiding the problems of future exchange rate changes and that kind of gamble, which we've really been victimized by, and Hydro certainly has been, and beyond that you're avoiding balance of payments problems in the future for the nation. So I have real trouble understanding borrowing abroad when the federal economy is not working at 100 percent. I think some people that are students of this have similar trouble. How much was borrowed from the Americans? Something like over $2 billion was borrowed from the Americans at a time when everybody else was getting out of the American market. That's the reason Hydro is now going through the convulsions it's presently going through. That's the reason we are junking human capital on a grand scale. We had some of the best people in engineering in terms of hydrological surveys and the rest within this organization, and we've junked them. That's human capital lost to the people of British Columbia.

The real squeeze is because of the cost of the American money and the cost of paying it back. It's costing us something like $80 million additional right now. That's just an additional cost for the people of British Columbia. Not only do we have a dead-weight debt problem and a negative income problem; we have a problem in terms of American dollars borrowed that have to be paid back in American dollars.

You took at these projects, like the Cheekye-Dunsmuir line, the Revelstoke Dam and the fact that these things are basically not used anywhere near the capacity, and you look at something like a negative problem of $300 million or $400 million. It's very significant. There just isn't the return there. The minister, however, was concerned about northeast coal and really didn't want to get into that. There are questions on the order paper that are asking him questions that I think should have been reported by now, that the member for Nanaimo (Mr. Stupich) asked. Your studies anticipated revenues of a couple of hundred million from this project. That's obviously not there at all.

[Mr. Ree in the chair.]

The member for Nanaimo has asked: what did we get in corporation income tax in the 1983-84 year from this project? What about the mining profits tax? What about the corporation capital tax? What about the coal royalty? What about the Tumbler Ridge railway surcharge? What about the support facilities recovery levy? All of these, which should have been significant revenues, have not been reported to the House at this time. No wonder the member for North Vancouver–Seymour (Mr. Davis), when asked to comment on that particular project and our borrowings related to it, said we would have been better off to put the money in the bank. I agree with the member for North Vancouver–Seymour. He's one of the people with a degree in economics in this House, and he says we would have been better off to put the money in the bank. It's as simple as that. That sums up the grandest megaproject of them all.

Transit — a billion in borrowing, doubling the cost of operating in the greater Vancouver region overnight with the project that you've put in place. It's not been a labour intensive project; again, it's been a highly capital-intensive project. The forms for building that superstructure were made in the United States. There weren't the carpentry jobs

[ Page 6441 ]

that one traditionally gets, because the nature of the industry has changed. You know, technological change is very significant in construction in the province. Again, if we'd looked at it in terms of employment impact, is that the kind of project we would have done at this time? I think not.

Again, as the member for Nanaimo said, in terms of borrowing for our ferries.... Coming over here this week, again walking on one of the ships, I couldn't help but reflect upon W.A.C. Bennett again, and that up until the end of the NDP administration all of these things were paid for by cash, and paid out of current revenue. Think about it: what a head start that gives us if these significant chunks of capital are paid for. We don't have the interest load, we don't have the debt problems, and they're there in place serving the community. Now you can only do that once you've got ahead of the game. We've slipped behind in the game, and so as the member indicated a $48 million original cost zooms up to $104 million with the debt load. That's just on three ships.

You know, it's the kind of thing that W.A.C. fought against, and the first part of his administration spent so much time getting out of coalition debt before he could do what he did in terms of capital projects being paid for out of current revenue. But we're now behind; we've slipped behind, and we have to carry the debt load when we consider new projects. All of these projects have become burdens instead of assets. That's the problem: we're carrying burdens, not assets. B.C. Place — $267 million. Is that the total number now — something like that? No payback there; not currently, anyway. Are you collecting any rent from Expo? No, you're not collecting any rent from Expo. So that's costing us $29 million a year there in interest alone, or something like that — $30 million. You lay this on, one after the other. What's northeast coal costing us as a debt burden? Because we're not getting a return. Well, it's $700 million. So what's that? There's $80 million in terms of carrying costs; B.C. Place, $30 million in terms of carrying costs; ALRT carrying costs, $100 million-plus; B.C. Hydro carrying costs, $400 million; and on it goes. That's what old W.A.C. meant by dead-weight debt. None of this stuff pays for itself. But we have to pay, and that squeezes the rest of the provincial economy. That's what you've created.

Interjection.

MR. WILLIAMS: You bet! The newest one — the Coquihalla; let's look at that. I guess this is another one of those commercial projects that's going to pay for itself.

MR. CHAIRMAN: Hon. member, we're dealing with the Minister of Finance's estimates.

MR. WILLIAMS: Borrowings.

MR. CHAIRMAN: The borrowing is legislation matter. The Coquihalla is in legislation before the House at the moment, and some of these others are previous matters that have been approved by the House in legislation. At the moment we're on the administrative functions of the Minister of Finance.

MR. WILLIAMS: Well, if we think of the equivalent cost of borrowing $400 million or $500 million, say, for a project that one might think about, and you were going to put a toll gate on some kind of road — not the Coquihalla but just some kind of road that went through a costly mountain pass with all kinds of problems related thereto.... Say you were thinking about an $8 fee for vehicles going over it. How many cars would you have to have go over the route? If it's a $400 million figure, you'd have to have five million; if it's going to cost $600 million with all the extensions, then you'd have to have around 8.5 million cars go over it to pay the bill. That's not counting maintenance. which is going to be the highest maintenance cost anywhere in British Columbia; that's not counting the toll gate that costs you $3 million, etc.

So what does it mean? It means it's another negative project you've got on your hands if you do that sort of thing. How negative is it? If it ends up being the $600 million price tag, then it's probably a negative of something like $50 million, and you reduce it if it's the $400 million capital cost. That's very high indeed.

How many cars now go through the Fraser Canyon, just if we wanted to compare these things? Annually, how many cars go through the Fraser Canyon? At Boston Bar there are four million cars. Does anybody think it will be more than that? Obviously not. So half of it is a dead-weight debt. If you throw in the maintenance cost, probably all of it is a deadweight debt. If you think about what the Premier said, that this was going to pay for itself.... It's like Expo; it was going to pay for itself. This one was going to pay for itself; it obviously isn't. Northeast coal was going to pay for itself; it obviously isn't. None of these projects is paying for itself.

We've now got a per capita debt. as the minister says, of something close to S6,000 a person; that's something like $17,000 per family. That strikes me as quite significant. When you think about the fact that the bulk of that debt is for projects that aren't paying off currently, then we've got a serious problem on our hands. We genuinely have a serious debt problem on our hands. The minister can say: "Well, it's not bad compared to other provinces." But if you look at our commercial debt, it is a serious problem, because it's not getting paid back: there are not the revenues out of those projects. There's been S12 billion in new debt since this administration took over.

MR. CHAIRMAN: Time, hon. member.

MR. STUPICH: It seems to me the second member for Vancouver East is giving good evidence to the effect that the program announced by the minister, the program of restraint, is doing anything but working. I think it's a story that should be told over again, not only in the Legislature but outside of the Legislature. I think right now it should be completed within these walls, so that we'll all hear it. I'm sure you're interested, Mr. Chairman, in hearing the rest of the story.

MR. WILLIAMS: I won't burden the House with much more, Mr. Chairman,

This morning the minister said: "There are signs of recovery out there." I asked what the signs were, and he responded; it was in a very folksy kind of way, and I appreciated that. He said: "Why, I was in Penticton last week, and a man came up to me and he said: 'It's really kind of feeling better."' I think he's gotten used to the pain; I think that's the problem with the man in Penticton. Everything I hear from the Okanagan isn't very good news at all: 20 percent of the farms and the orchards are in the hands of the banks, in the process of bankruptcy; they can't pay their mortgages. There are all kinds of serious problems in that region.

[ Page 6442 ]

But when one asks, one expects at least something like the report we got earlier this year, with some graphs and all the rest, in terms of the signs of recovery. The attempt has been made in terms of the so-called.... I still have trouble, in spite of all the money you're spending on advertising.... "Partnership for recovery" — isn't that what the program's called? That red, white and blue thing? I still have trouble remembering, despite the hundreds of thousands spent on it. So it isn't clicking with me, and I don't think it's clicking with the public. I think that explains the Premier's trip to Korea and Japan, because the other thing isn't flying. I think the people in the Okanagan and elsewhere know it's not flying.

What was the other example of the early signs of recovery that the minister referred to? He said: "Well, last week I saw a man in Penticton who said he thought it was getting better. Darned if I didn't meet another person in Saanich this week, and he said he thought things were getting better." That's not quite a random sample. It's not quite on a par with a good number-crunching report.

One really wonders if there are the signs of recovery that we all would like. There are no signs in America at the moment. The signs in the United States are that they're going to slip into another period of decline. In the United States they got out of the previous recession. We in British Columbia never did. Now we face the prospects, tied as we are to the United States economy, of moving into another period of decline when we haven't got out of the last one. Part of the reason is the debt structuring as well as the kinds of programs and projects you've funded. They haven't done the job, just as this administration hasn't done the job.

[5:15]

Some kind of major strategy is overdue in terms of working on this provincial economy. It may well involve some significant program with the federal administration, because the federal administration is funding so many of our current welfare and unemployment costs. There is an incentive there for them to move in a new direction, if for no other reason than the costs of these programs. I don't think the review has been there. This report, "The Economy in a Changing World," is really just looking backward at the problems we've had, and some of them have been serious. But there has been no time at all spent looking forward. Even the last few pages of the document are reflections on projects of the last year or so. They're not talking about new projects at all. So there's no kind of program or plan for the future in this document which the minister referred to this morning.

MR. STUPICH: I thought the minister might want to comment at this point, but I'll just throw a couple more points in and then let it go at that.

Earlier this afternoon the minister said that our program of restraint has worked, that it has enabled us to reduce taxes. I note that the total revenue estimated for 1984-85 was $7.719 billion; the total revenue estimated for 1985-86 is up 6 percent to $8.166 billion — a 6 percent increase in revenue in a period when our economy is expected to grow by something less than 3 percent. So it would seem to me that what the minister meant was not that we've been able to cut taxes, but that we haven't increased them as much as we anticipated doing. As further evidence of that, the revenue from personal income tax is expected to be down, corporation income tax marginally up and so on. So it appears as though it's not really a reduction of taxes.

The minister said that our program of restraint in British Columbia is working. I have a table of a few figures showing what has happened since the program of restraint was imposed. Investment in Ontario went up 2.5 percent in that period; in Manitoba, up 13 percent; in B.C., down 27 percent. Bankruptcies went down 12.5 percent in Ontario, up 20 percent in Manitoba and up 300 percent in B.C. during this period that the government's program has been working. The unemployment rate in Ontario at the end of 1984 was 9.1 percent; Manitoba, 8.3 percent; B.C., 14.7 percent. Ontario welfare costs, during this period when the government's program of restraint has been working, went up 29 percent; Manitoba, up 35 percent; B.C., up 52 percent — and rising.

Mr. Chairman, I think there has been ample argument this morning and this afternoon to show that, while the government's program of restraint may have been working to suit some political purpose of government, it has not been working to suit the needs of the people of British Columbia. What we've heard from the second member for Vancouver East, particularly this afternoon, what we've heard from various members of the opposition, and even, to some extent, from one member on the government side of the House, should prove to any impartial observer — such as yourself, Mr. Chairman — that the government's program has not been serving the needs of the people of British Columbia.

HON. MR. CURTIS: Mr. Chairman, on two or three occasions through the course of the debate so far on these estimates, I've spoken about the fact that we could not have undertaken the tax reductions, which are very real and which have been voted on here largely by both sides, without putting our house in order in terms of the expenditure side of the budget. I know he's been here for virtually all of the debate, but the member for Nanaimo was out for a few moments and he might have missed it earlier this afternoon.

The fact remains that the budget plan for 1984-85 was appropriate for that year, and it paved the way for the review that I conducted. I'm sorry that it didn't suit the member for New Westminster (Mr. Cocke) in terms of its structure. I listened carefully to what he had to say. Nonetheless, it is the duty of individuals on either side of the House, I think, to get out around the province and to hear what people have to say.

Mr. Member for New Westminster, I was not trying to embarrass any other members by simply, in a fairly pleasant way, identifying the fact that the member for Rossland-Trail (Mr. D'Arcy) and the second member for Vancouver East (Mr. Williams) came to the meetings, that's all. I hope you would accept that at face value.

Mr. Chairman, the fact remains that I listened. These were open meetings; they weren't closeted gatherings with select pre-selected groups. They were wide open, as you and others will know, and people told us the good news and the bad news. That permitted the compilation of this year's budget, which I believe has put us on the threshold of the recovery we have been speaking about.

Mr. Second Member for Vancouver East, you were in this House a long time, and then you left and you came back. The fact is that I think I said just a little more than: "Do you know, I ran into a guy in Penticton." You didn't hear it quite that way. Then: "Lo and behold, I happened to run into someone in Saanich." That's being pretty loose with paraphrasing, believe me. It's a little loose.

Interjections.

[ Page 6443 ]

HON. MR. CURTIS: I indicated that I had talked with a number of people in Penticton last week. I had spoken with a number of people in Kamloops; I'd spoken with a number of people here on the Saanich Peninsula, the most beautiful part of British Columbia, in my view. These were not captive individuals who were forced to say something to me. The fact is, I sense that the province is starting the process of recovery. I cited for the member for Okanagan North (Mr. MacWilliam), who was in the House, the increase in hotel room tax revenue.

Interjection.

HON. MR. CURTIS: Mr. Member, I talk to so many people that I can't begin to list for you the number of people I speak with in a week or a month. I don't have one of those little counters. You probably did. I remember, Mr. Member, that when you were a minister I couldn't get into your office. As a member for the opposition I was turned away at the door.

Interjections.

MR. CHAIRMAN: Order, please. The minister on vote 30. Direct your comments through the Chair, please.

Interjection.

HON. MR. CURTIS: "Certs would have helped," the interjection is. I was turned away at the door, Mr. Member.

In any event, I spoke earlier of a photograph — we'll do the quarterly report as per usual, Mr. Chairman — of February 1 to April 30, 1984, and February 1 to April 30, 1985. I spoke only of hotel room tax because the member for Okanagan North was asking about that in particular. But, Mr. Chairman, what do we see? A 10 percent increase in sales tax revenue in those three months, '85 over '84. That is not hopeless; that is not, "you're not making it;" that is not more of the same. That's the kind of thing.... Mr. Member, if you wish further examples, I'll be happy to provide them, but a photograph here and a photograph there, a review, indicators of a variety of kinds.... A variety of indicators suggests to me that yes, we're not suddenly back in 1978-79, whoopee, everything's great, the money is rolling in. but that we have moved through the most difficult part of the period which none of us wanted, not only in British Columbia but in other jurisdictions; even in other parts of Canada, Mr. Chairman.

MR. STUPICH: Mr. Chairman, first just briefly with respect to the photograph, I suppose if you pick a low enough period, then you can show an improvement over that low and make it look good by comparison. I'm not suggesting the minister did that deliberately, but I wonder just what we would see if we looked at a longer period.

I'm just going to come back briefly to a suggestion or a recommendation or a plea that the Leader of the Opposition made in his first speech-in this session. The minister earlier today invited, I think, the second member for Vancouver East (Mr. Williams) to come with him and to listen to people. You may recall the Leader of the Opposition reminding the House of the Postwar Rehabilitation and Reconstruction Committee that was set up by the coalition government, I believe, at the time; it was an all-party committee. Now the minister says. "Come with me," but he's expecting the second member for Vancouver East to hitchhike while he goes in the government jet. That's not really fair, and to come to a meeting that the minister has set up, that his staff have arranged for and have invited people to and have advertised. Is not the kind of listening that the opposition would like to do.

The opposition did suggest that members from both sides of the House — a committee — go out and that we do listen together, and that we have an opportunity to ask questions just as I'm sure the minister had opportunity to ask questions of those who are presenting briefs. In that way we could better serve as an opposition in the House, had we the same opportunity as the Leader of the Opposition recommended and as was in vogue some 42 years ago — it was established while the war was still on. If we could adopt that way of going out and listening to people, then I think government and democracy and British Columbians would be better served. So I recommend that to the minister's attention. I compliment him on his doing what he did, but I think he should go one step further and make it a committee of the House.

Vote 30 approved.

Vote 31: government financial support, $57,520, 590 — approved.

Vote 32: Provincial Capital Commission, $300,000 — approved.

On vote 33: compensation stabilization program, $710,263.

MR. COCKE: I mentioned earlier that this probably was one of the biggest wastes of government that one can find. We have a system where people negotiate and find themselves, after having negotiated a contract, in a position where another government agency says all their negotiations were in vain. Yet, Mr. Chairman. I've heard government ministers stand up in this House and tell us that they believe in the negotiating process. This entire compensation stabilization process is a joke, Mr. Chairman. Again, it's placed us in a position where, in the whole of the country, we're the laughing-stock. Either we believe in something or we don't. If we don't believe in it, then say so. Don't kid the troops. Don't deceive the people in this Legislature and in the public. Just tell the truth. If you don't believe in it, say so. And then don't put everybody to the test of going through negotiations, and then coming out of those negotiations and finding yourself confronted with Ed Peck. It's the most nonsensical thing I've ever heard of.

[5:30]

MR. ROSE: I'd like to say a word or two, Mr. Chairman, about this Compensation Stabilization Commission as it related to the minister's directive, in effect freezing salaries of school board teaching staff. It seems to me that what we have here is about a triple exercise in futility. We have a School Act which requires the teachers and the boards to negotiate. If they fail to reach a settlement, then there is compulsory arbitration. That occurred in a great number of cases, and the cost to the districts alone was a million and a half dollars. I presume it was an almost equivalent cost to the schoolteachers' associations in the various areas. Once that occurred, then the procedure clicks in in which whatever the

[ Page 6444 ]

arbitrated settlement was set on for review by the Compensation Stabilization Commission, regardless of what its decision ultimately came.... I believe in Salmon Arm it was around 3 percent; in Alberni it was roughly the same; and there were some other smaller ones here and there throughout the province. But even that sort of safety valve or plug in terms of inflationary changes and increases in school board budgets was disallowed by the minister's precipitate action at Easter time, where he stepped in, in spite of and over the heads of the Compensation Stabilization Commission, and in effect froze salaries. In effect, he ruled out all kinds of negotiated settlement and free collective bargaining, certainly in the education system. I would suggest that if we're going to have some sort of a czar on public service salaries.... I don't know why there is that in the public service, and free collective bargaining is allowed to continue — at least some skeleton of it — in the private sector. I don't see why we don't have some kinds of patterns other than the compensation stabilization pattern, because there are other techniques and arrangements done in other countries. New Zealand, for instance, has a three-man Higher Salaries Commission to which all salaries in the public service are referred; I think that could be looked at. I'm not prepared to say that that's a wonderful thing, but certainly it even includes MPs' salaries in New Zealand.

So what I'm saying is that we're mired down in all kinds of legislation — hobbling effects — that are merely the result of ad hoc decisions which I think destroy any kind of simplicity and effectiveness and cause untold grief and extra energy and work to accomplish little or no purpose, when the ultimate was that the government froze the salaries anyway. So play-acting through all these other little procedures is merely tokenism and is absolutely transparent.

Vote 33 approved.

Vote 83: interest on the public debt, $384,100,000 — approved.

Vote 84: contingencies (all ministries), $50,000,000 — approved.

The House resumed; Mr. Strachan in the chair.

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

HON. MR. GARDOM: I call second reading of Bill 36.

TRAVEL AGENTS AMENDMENT ACT, 1985

HON. MR. HEWITT: Mr. Speaker, the passage of this bill will ensure that travellers who were out of pocket as a result of recent failures in the travel industry receive compensation, as is their right under the Travel Agents Act.

Mr. Speaker, although the bill's main purpose is to authorize an advance or a loan from consolidated revenue to the travel assurance fund, that advance or loan must be repaid by regular contributions to the fund from travel agents and travel wholesalers. I must stress that it is not government's intention to make future loans of this nature. That message was conveyed to the travel agents. In discussions with them we recognized the need to provide funds to cover the shortfall to compensate those people who were left stranded by the failure of some travel agents or travel wholesalers. As a result, they are working with government, Mr. Speaker, to resolve some of the problems that have occurred. I've authorized a full review of the legislation, in consultation with the travel industry, and I'm hopeful that we'll come up with some new approaches to ensure less chance of failure by travel agents and travel wholesalers that provide packages to the travelling public in British Columbia.

Also, Mr. Speaker, we are moving to fill the position of registrar of travel services. It will be a full-time job, and I can advise the members that that position is being advertised at the present time.

Mr. Speaker, with those remarks, I move second reading of Bill 36, the Travel Agents Amendment Act, 1985.

MR. LAUK: Mr. Speaker, this really is a bill in response to the problems that arose, I take it, as a result of the collapse of Century Tours and Holiday Condos and Love Tours and that kind of thing.

Interjection.

MR. LAUK: No, we're talking about something entirely different. The House Leader can continue in his reverie.

Interjection.

MR. LAUK: You're always blushing. That's because I've heard about your love tours.

AN HON. MEMBER: Not as much as I've heard about yours.

MR. LAUK: I'm not so sure.

What concerns me about this bill, Mr. Speaker, is the travel assurance fund, and whether or not we can count on that fund being sufficient so the government is not placed in the position of doling out taxpayers' dollars to bail out people in an industry. Nobody else seems to get that kind of benefit. In a sense we could.... And the public can call upon the government to compensate people who have lost money in a number of schemes, and not necessarily to do with travel.

I have some specific questions. Under section 5 of the act as it stands, the registrar has some pretty wide-ranging powers. It authorizes the registrar to suspend a travel agent where this is in the public interest. Assessing the government's responsibility for the problems in the Century Tours case, for example, it's necessary to ask: what did the registrar know with respect to this operation, and when did he know it? I think Mr. Goodings was advised that the government was aware of the problems facing Century Tours, had met with Century's chief executive, Jim Whyte, and discussed the problems with South Pacific Island Airways. The U.S. federal aviation authority grounded that airline for safety violations and the airline was suspended in October 1984. Century Tours continued to accept bookings based on the airline's assurances that it would be airborne in time to meet its commitments.

My understanding is that the airline is liable to reimburse Century Tours. I wonder if that's taken place, and if so, in what amounts. Has Century Tours reimbursed the travel assurance fund, also as required, for claims made against it? As I mentioned during the minister's estimates, the province took control of Century's assets in January and Mr. Goodings

[ Page 6445 ]

said that he expects and believes the province will recover all moneys paid out to bring home passengers from Hawaii. I wonder if that's been done. This bill really recovers the money from the industry and not from the culprit, if you like — Century Tours. I take it that the travel agents will recover their expenditures from the consumer.

This whole problem with Century Tours bothers me considerably, and I wonder if the minister really has, chapter and verse, set out what happened there. I'm not necessarily blaming the government, but I'd like to know, if we had prior knowledge, why action wasn't taken sooner to save the taxpayer this expenditure and to send a message out to the agencies involved that that wouldn't be tolerated by the government.

Also, with respect to this bill, I wonder why the government has ignored the recommendations of the 1981 Shandro report following the failure of, I think it was, Winmil Holidays. Shandro made 40 recommendations. Some of them I've picked out: increasing the level of the travel assurance fund from $500,000 to $1 million; an immediate assessment to bring the fund up to that half a million. The fund never reached that amount in the regulations, as far as I'm aware. It recommended increased initial contributions; that "excess insurance be obtained to ensure that if the fund is ever depleted, there will be moneys available to cover all claims." That's an easy regulatory requirement. Instead, the government wants to make loans to the fund. Well, you know, I don't think the government should be so readily available to throw money after a problem.

He also recommended that "bonding and security requirements be instituted for extraprovincial companies if there are any further claims against the fund as a result of the failure of such companies." Had these recommendations been acted upon — or that particular recommendation, the last one I mentioned — the airline that I mentioned earlier would have been bonded, and the taxpayers would not now be bailing the fund out with a loan which the travel assurance fund may never be in a position to repay. Those are the questions I raise for the minister, if he would kindly reply briefly in closing debate.

HON. MR. HEWITT: The purpose of the bill, of course, is to allow the Travel Agents Act to provide an advance or a loan to the travel assurance fund. It's an amendment to section 16 of the act. The member is going back to the reasons why, and I can deal with them briefly. When did we know about the problem? Approximately November of last year. I can't recall offhand. It was the first or the latter part of November when we heard about the problem, which was the grounding of the airline. We did investigate it, and talked to the FAA, I believe it is, and the comment was made: "Of course, yes, it is grounded. Certain things are being done, and there's no reason why it couldn't be airborne by the time the tours would be using that particular airline." There was no "valid reason" at that time to say that the consumer was at risk. The airline was contracted to Century Tours, the airline was grounded and the airline was making the necessary repairs and would be back up and running by the time the passengers wished to go south.

As soon as we were aware that they couldn't meet their commitments, we moved in. The accusation has been that we should have moved more quickly. According to the figures I've received, had we moved in in the early part of December or latter part of November and cancelled or suspended that travel agent, we probably would have put the fund at risk to the tune of about $1 million. Through working with Mr. Whyte and getting airline tickets transferred to other airlines, the exposure to the fund was reduced from approximately $1 million down to $400,000. So the work we did in that interim period before we finally suspended them saved the fund a considerable number of dollars.

You've heard that the airline may refund Century Tours. If there is a claim by Century Tours against the airline and the airline has to pay it, we would be looking for Century Tours to refund the money to the travel assurance fund.

[5:45]

Interjection.

HON. MR. HEWITT: Are you asking if we've made a claim?

Interjection.

HON. MR. HEWITT: I would assume that all those things are being taken care of. Unfortunately I'm responding to your question, and I should have that information in front of me, but I will follow that up. If there is that opportunity, which is news to me because I haven't heard that they were able to go after South Pacific Island Airways with regard to the amount of money involved, we have a claim on Century Tours and the fund will be reimbursed.

You mentioned about the Shandro report. I'll be looking at those recommendations and the legislation in consultation with the travel agents themselves, and we may coming forward with further amendments, if we feel it is necessary to do that.

Finally, the reason for the loan or the advance is primarily this: under our legislation we could have increased the assessments to travel agents. Had we done that at this particular time, I think we would have seen more travel agents in difficulty because of the increase. We responded to their request to have some relief at this time because of the economic problems they were faced with in meeting their costs, so we looked to the advance or the loan. But we said it must be repaid, and we would spread that repayment over a period of time to ease the burden on the travel agents who operate in this province. That's the rationale behind this bill: to allow some relief to the travel agents who have to repay the fund.

Mr. Chairman, with those remarks, I would now move second reading.

Motion approved.

Bill 36, Travel Agents Amendment Act, 1985, read a second time and referred to a Committee of the Whole House for consideration at the next sitting after today.

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

FOREST AMENDMENT ACT, 1985

HON. MR. WATERLAND: Mr. Speaker, Bill 3 is a series of largely unrelated amendments to the Forest Act. The requirements of second reading are that you debate the principle of the bill. As there's no principle thread throughout the bill — it's just a series of unrelated amendments — I think it would be much more appropriate to debate the clauses in

[ Page 6446 ]

detail in committee stage, which we can do without violating the rules of the House. I therefore move second reading of Bill 3.

MR. HOWARD: With such a short explanation by the minister and the necessity of examining the bill with some precision beforehand, if the government House Leader would accept a motion to adjourn the debate at this time, and if that would be acceptable to the Chair, I so would move.

[Mr. Speaker in the chair.]

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:48 p.m.