[ Page 7451 ]

CONTENTS

Tabling Documents –– 7451

Oral Questions

Coal cutbacks. Mr. Williams –– 7451

Housing studies. Mr. Blencoe –– 7451

Vancouver Island highway. Ms. Sanford –– 7452

GAIN program. Mr. Barnes –– 7452

Budget lockup. Mr. Rose –– 7452

Municipal transit. Mr. Williams –– 7453

Private Members' Statements

Youth unemployment. Mrs. Dailly –– 7454

Hon. Mr. Segarty

Reverse mortgages. Mr. Davis –– 7456

Mr. Cocke

Armed services pensions. Mr. Mitchell –– 7457

Ms. Sanford

High-tech industry in B.C. Mr. Reynolds –– 7458

Hon. Mr. McGeer

Budget Debate

Mr. Stupich –– 7460

FRIDAY, MARCH 21, 1986

The House met at 10:05 a.m.

Prayers.

Hon. A. Fraser tabled the annual report of the Ministry of Transportation and Highways for the fiscal year 1984-85.

MR. D'ARCY: Mr. Speaker, in the gallery today we have two individuals from Fruitvale, B.C.: my hard-working executive assistant in the riding, Sean Philp; and a volunteer assistant, Bob Warning. They do their best to serve the public in Rossland-Trail in a fair and even-handed way. I would ask the House to bid them welcome.

MR. PASSARELL: Visiting sunny Victoria today is a long-time resident of Atlin, Mr. Joe Florence. I wish the House to pay him adieu for today.

MR. CHABOT: On a point of order, Mr. Speaker, standing order 8 says: "Every member is bound to attend the services of the House, unless a leave of absence has been given by the House." I understand the member for Burnaby-Edmonds (Ms. Brown) is in the precinct but refuses to come into the House. I'm wondering, Mr. Speaker, whether she has permission from you to be absent from this chamber.

MR. SPEAKER: On the point that was made by the member for Columbia River, which the Chair has ruled on numerous occasions, the first member for Victoria seeks to respond.

MR. HANSON: Mr. Speaker, the member for Burnaby-Edmonds is ill, and it is my understanding that she has advised the Speaker. That member has no right to cast any aspersions on a hard-working member of this House.

MR. CHABOT: What are you, the minister of defence for that member or something?

MR. SPEAKER: Order, please. The standing orders and the rules that guide us in this chamber are well known. However, I would advise that the Chair has no such information and has not been made aware specifically of.... Nonetheless, that is not a duty of a member. In any case the Chair does not have to be....

Interjections.

MR. WILLIAMS: Could you advise me, Mr. Speaker? Is the question period commencing now, or...?

MR. SPEAKER: Hon. members, the point made by the member is a valid one. The question period will commence as of right now.

Oral Questions

COAL CUTBACKS

MR. WILLIAMS: Mr. Speaker, we learned last night that there have been major cutbacks in southeast coal at the Greenhills mine of BCRIC — Westar — a 43 percent cutback on last year's volumes and a 15 percent cutback in price. Clearly the Japanese are whipsawing British Columbia with these two coal areas in the northeast and the southeast. My question is to the Minister of Labour: is he prepared to intervene to deal with the unemployment problem in the East Kootenays, which at 21.4 percent now exceeds Newfoundland, and see that government is at the bargaining table, so that there is not this whipsawing by the Japanese on price and volume in terms of coal shipments from British Columbia?

HON. MR. SEGARTY: I wonder, Mr. Speaker, if the member for Vancouver East would like to table the number of contracts that the Greenhills mine has with Japanese coal companies.

MR. WILLIAMS: Mr. Speaker, the response is that the minister is not prepared to intervene to deal with the gross unemployment problem in his riding and deal with the problem that we have, developed by northeast coal.

HON. MR. SEGARTY: Mr. Speaker, I'd still like the member for Vancouver East to table in this House the amount of contract tonnage that the Greenhills mine has with the Japanese steel industry.

HOUSING STUDIES

MR. BLENCOE: Mr. Speaker, I have a question for the Minister of Lands, Parks and Housing. In January 1986 the provincial government tabled and brought down a report on social housing in the province of British Columbia. Now the minister has announced another study, a matter of only a few months later, the trash and thrash study — a phony study that's going to be done in the province of British Columbia....

MR. SPEAKER: Order, please.

MR. BLENCOE: I'd like to ask the minister how much this January 1986 study cost the taxpayers of the province of British Columbia, and how much your new study — the phony study — is going to cost the people of British Columbia?

MR. SPEAKER: Order, please. The question is out of order, hon. member. If the hon. member is going to bring argument and debate constantly into questions, the Chair will rule him out of order. The first rule that guides us in questions, hon. member, is that the question must be a question, not an expression of an opinion, representation, argumentation or debate. The member can phrase his question in a proper form, and the Chair will give him the right to respond.

MR. BLENCOE: How much did the January 1986 study cost the taxpayers of British Columbia, Mr. Minister?

HON. MR. KEMPF: Mr. Speaker, in order that I bring that exact figure back to the member, I will take that question on notice.

AN HON. MEMBER: Who paid for the hot-tub?

HON. MR. KEMPF: I paid for the hot-tub, my friend.

[ Page 7452 ]

VANCOUVER ISLAND HIGHWAY

MS. SANFORD: I have a question to the Minister of Highways and Transportation. The Vancouver Island municipalities, the association of the chambers of commerce on Vancouver Island, the Vancouver Island MLAs and the candidates for the New Democratic Party on Vancouver Island have requested that the government proceed this year to complete four-laning of the Vancouver Island Highway. What decision has the government made regarding this request?

[10:15]

HON. A. FRASER: First of all to the member, the ministry's proper title is the Ministry of Transportation and Highways, not the reverse. I like to go by the legalistic things that we have.

In reference to the requests from Vancouver Island, we've got a warehouse full of them, and they conflict with each other. I think you're interested in Courtenay–Campbell River or wherever that area is — in that area. What I'm getting at is that we have conflicting views. Yes, we have people who want us to do something about the road — a new freeway or bypass, if you want to call it that — but we also have a resolution from the city of Courtenay, the member's home town, saying they're opposed to it.

So we're analyzing all that material, and we aren't in any position to make any announcement at this time.

MS. SANFORD: Mr. Speaker, I think the minister wants the word transportation before highways because he is so embarrassed about the fact that he has done nothing for highways on Vancouver Island. We have learned that $14 per capita has been spent on Vancouver Island in 1984 for highway construction, while $203 per capita has been spent in the rest of the province. That's a totally unacceptable disparity but I shall ask my question.

Will the government begin to equalize the spending of highways funds by starting the much-needed inland bypass route on Vancouver Island this year?

HON. A. FRASER: Mr. Speaker, first of all, on the cost per capita, that sounds like socialist arithmetic to me. I don't accept that at all, and I have a question. Did the member for Comox include the ferry subsidy? B.C. Ferries is all under transportation. I assume you got that in there in your....

MS. SANFORD: We're talking about highways.

HON. A. FRASER: Well, we're talking about transportation, and maybe we should look at that as well. But again, to reply to you, we have not got right-of-way for the area you're talking about. We have to acquire right-of-way, and then we have to call tenders to get the work done, and that would be physically impossible in the year 1986-87. If we started tomorrow to acquire right-of-way, it would take over a year.

GAIN PROGRAM

MR. BARNES: I was very disappointed with the budget speech yesterday to find that the government failed to provide any new income for people on GAIN. My question to the Minister of Human Resources is: would the minister confirm that the $14 million special warrant in February of this year was to cover an overrun in the income assistance budget?

HON. MR. NIELSEN: I will respond generally; I do have the details on that special warrant. The largest overrun was in Pharmacare. Some other programs also had expenditures in excess of what was estimated, but the largest single overrun, I believe, was in the Pharmacare program. I'll be pleased to bring back the detail on that. But it was not only in one specific area; it was a combined number of overruns totalling that $14 million. I have the details on my desk, but I'll have to get them for you.

MR. BARNES: I appreciate the difficulty the minister may have in the fact that he's taking over a new portfolio, but whatever portion of the $14 million was specifically for providing the extra needs in the income assistance portion.... As the minister knows, those people on income assistance have not decreased in numbers; they have remained constant. Could the minister indicate why the budget does not at least reflect a consistent appropriation for that category, as opposed to reducing that amount?

HON. MR. NIELSEN: I'd be very pleased to provide some detail on that $14 million special warrant — a very quick calculation. Pharmacare accounted for $6.9 million. Services for families and children were $3 million. The GAIN program, health care and dental services, was $1.6 million. The excessive amount required for income assistance was $1.6 million. Direct community services — this is salaries — were $1 million. Those are the component parts of that special warrant.

BUDGET LOCKUP

MR. ROSE: I'd like to address my question to that great Canadian novelist, the Minister of Finance. Some of us are very concerned about what happened yesterday, when special interest groups and lobbyists of various kinds were invited into a lockup and yet members of the opposition were denied. Is the minister aware that the federal government and all other provinces, according to our recent survey, do not have regular procedures for locking up members of lobby groups with the press so that they can see the budget before members of the opposition can?

HON. MR. CURTIS: While I have....

MR. HANSON: Propaganda stunt.

HON. MR. CURTIS: Oh, why don't you just go and do something else, eh?

Mr. Speaker, I have respect for the member, but I don't have confidence in that party's research. I wonder if he would attempt to determine that that which he says is correct in all other provinces. With respect to lockups, the press lockup is managed by the press gallery. With respect to the....

Interjection.

HON. MR. CURTIS: The interjection is incorrect, as usual.

With respect to the second lockup, I indicated publicly that we have tried to make the budget information available to those who advise individuals and organizations. We've turned to accountants — using the generic term — and it's still in its experimental stage. I appreciate that there will be

[ Page 7453 ]

varying views regarding lockups, Mr. Speaker, and if the member wishes to discuss this with me privately at some time, or if the opposition House Leader wishes to do so....

Interjections.

HON. MR. CURTIS: Or we can discuss it in my estimates, Mr. Speaker. I'm not attempting in any way to push the topic away, but there are varying views with respect to lockups. So long as I hold this portfolio I would welcome suggestions as to how they can be improved. I think there is a tradition of lockup in this province, and I would not personally like to see that discontinued insofar as the press is concerned — representatives of the news media.

MR. ROSE: I wonder, Mr. Speaker, if I could have a supplementary. Is the minister aware that in addition to accountants there was a representative of the mining association in that lockup yesterday? There was a special representative of John Turner, the Liberal opposition leader — his acolyte; and perhaps there were others representing Mr. Mulroney and all sorts of different special-interest groups and lobbyists sympathetic to this government. When is the minister going to allow members of the opposition to have a jump on the budget at the same time?

HON. MR. CURTIS: Mr. Speaker, if there was a representative of John Turner, he could hardly be characterized as friendly to this government.

MUNICIPAL TRANSIT

MR. WILLIAMS: A question to the minister responsible for transit, Mr. Speaker. The SkyTrain and the tremendous debt tied to SkyTrain is now having an impact on the citizens in greater Vancouver. There will be a 360 percent increase in the Hydro surcharge, as well as a significant increase in the fares. Can the minister advise whether she's considered an alternative system that would be less burdensome on the low-income people who are bearing the cost in this system?

HON. MRS. McCARTHY: Mr. Speaker, I'm very pleased to respond to the question from the second member for Vancouver East. First of all, the formula we have for the public transit system in British Columbia and the provincial government's sharing of the burden is the most generous in all of Canada. The SkyTrain, the ALRT, to relieve the problems of congestion and to help in the redevelopment of the lower mainland, was a project agreed to by all the member communities in the lower mainland — the GVRD group. The people who arranged the formula to underwrite and amortize the cost of SkyTrain over a period of years were representatives from all the lower mainland municipalities.

In April of last year, in spite of the fact that we had negotiated a formula with that group, we renegotiated the formula to a far more....

Interjection.

HON. MRS. McCARTHY: Does the member wish to listen to the answer, Mr. Speaker?

We renegotiated the formula and we underwrote $275 million of capital in the SkyTrain guideway in order to lessen the burden on the riders. In the last week and a half or two weeks....

The Vancouver Regional Transit Commission, who set the rates for the fares, had two ways in which they could make a decision as to how to finance the new system — which they unanimously agreed to do. They could take the increased budget for SkyTrain — and as we all know, it is an increased budget because any time you increase service you increase budget — and amortize it. They could assist....

Interjection.

HON. MRS. McCARTHY: I can see the member doesn't want to have the answer.

They could take the budget and they could increase the fares, or they could decrease the service in various areas throughout the lower mainland.

As the member may not know, B.C. Transit covers more miles in the lower mainland than any other service in Canada. In providing that service, Mr. Speaker, there may be routes which the transit commission can reduce; but at this point they felt there were none. Therefore they increased the fares. I know the member will understand that in the 15 stations on the line between Vancouver and New Westminster, the resulting economic impetus provided by SkyTrain is dramatic and adding to the assistance for the lower mainland.

His reference to people who cannot afford.... It should be noted that the seniors in this province — some 28,000 — pay $28 a year to ride the SkyTrain and every other kind of transportation in the lower mainland. Students and seniors who do not qualify for the seniors pass have rates as low as 60 cents and 50 cents, which I suggest is lower than any in Canada.

Interjections.

HON. MRS. McCARTHY: If you don't want the answer, don't ask the question.

[Mr. Speaker rose.]

MR. SPEAKER: Order, please. Hon. members, open-ended questions tend to elicit open-ended responses, but in the case of the minister the time for question period had elapsed during the response, and that was the reason that was permitted. However, hon. members, I wish to raise another matter of importance.

Yesterday, prior to the commencement of the budget speech by the Minister of Finance, the member for Skeena rose on a point of order proposing, as he did in 1983, that the speech of the financial critic of the official opposition should be televised. In support of his position, the member stated that the Chair had put a motion to the House seeking unanimous consent in 1983 and stated further the Chair would be inconsistent not to do so during yesterday's sitting.

The proceedings of July 8, 1983 disclosed that when the matter was raised, the Speaker clearly stated that under the special circumstances of the day, including those of time constraints, he would put the question of leave to the House, and he did so. What the member failed to bring to the Chair's attention was that the Speaker clearly stated at that time he was prepared to put the question to the House, but this was not to establish a precedent.

[10:30]

[ Page 7454 ]

The difficulty that arises here is that when an hon. member of this House extracts only such portions of a previous decision as will support his argument, without quoting the full decision, it has the obvious tendency of misleading the House and the Chair. The Journals state clearly that the action taken in 1983 was not to be considered a precedent, yet the member for Skeena urged the circumstances on the Chair as a precedent. The Chair suggests this shows something less than total candour with this House and the Chair.

All hon. members know that if they wish to effect change in relation to the televising of proceedings or any other usage of this House, proper procedures are available. Those procedures do not include selective quotes from previous decisions, which unless quoted in their entirety can be, and often are, totally misleading.

[Mr. Speaker resumed his seat.]

Orders of the Day

Private Members' Statements

YOUTH UNEMPLOYMENT

MRS. DAILLY: I'm taking the opportunity today, having had my name drawn for a statement this Friday morning, to speak on a subject which I'm most concerned about and spoke about just last week during the throne speech debate. I believe that this subject is of such importance that it needs and bears repeating and repeating. It is the whole subject of unemployment of our youth today.

[Mr. Strachan in the chair.]

I consider that when you have over 20 percent of the young people in the province of British Columbia between the ages of 18 and 25 without work — in some areas even higher — it is a crisis. It's a moral crisis, also, for the government which does not come to grips with dealing with it.

We have had the opportunity to go through the budget, although not in too much detail yet. In the budget — which of course will be elaborated upon in great detail later on this morning — in reference to the amount of money for students, I see that the government has at least recognized the fact that it's a basic problem by earmarking some extra funds. So we'll give them credit for that recognition, but we cannot give them credit for the amount of money which is placed into it. It is not going to come to grips with the serious crisis of the youth of today in this province. Mr. Speaker, to put in the amount that has been put in, an extra $10 million in one area, in the area of Challenge '86, plus some other student work-creation jobs and an increase for student loans, is only a small step towards what we have to do in this province to work on solving youth unemployment.

Of course, the major problem we're dealing with is a government whose economic policies are such that they have created this environment for the youth of the province. But we have to deal at the moment with the government that is in office, with the government that in the last ten years has allowed this situation to take place. Mr. Speaker, if you look at the amount of money allocated for youth unemployment and then compare it to the amount of money put aside by the NDP government in 1975, you would find that to match in today's dollars the contribution of the NDP government toward youth and youth programs, you would have to have approximately $100 million from this government today. And yet look at what is in the budget.

Mr. Speaker, this government talks a good line about their concern for youth unemployment, but they simply have not come to grips with it. Let me give you an example of what is happening in other parts of the country. You know this government always says it's a worldwide problem. Well, they will accept the fact that the other countries in this world have the same problem with their youth. As you well know with your background, Mr. Speaker, the European countries — and particularly may I use Germany, Sweden and Austria — have an extensive apprenticeship system combining on-the-job and classroom training for an average of three years. West Germany particularly leans heavily on the enterprise-based system.

I find Sweden far more interesting, Mr. Speaker. Just to look at the figures in Sweden, do you know what the unemployment rate is in Sweden? In 1984, youth and adult combined, it is 3.5 percent. We know what it is in Canada today. I don't know what the latest national combined figures were, but I think they were well over 12 percent. Mr. Speaker, we have to then say: "Well, what is it that another country can do that British Columbia and Canada do not seem to be able to do?" Well, there is no time in this brief statement to go into the details, but I would like to get it on record that Sweden has had remarkable success.

I put this to the minister in charge of youth programs, who I know will respond. Look into what is happening in Sweden today, particularly the youth teams which have been established for all 18- and 19-year-olds, and all physically disabled youth up to age 25, for between four and eight hours a day. You know, Mr. Speaker, after the establishment of those youth teams in 1983 in Sweden, unemployment for young people dropped from 8 percent to 5.5 percent in 1984. Therefore, if we are serious in this province about doing something about this tragic situation, then I say to the minister, through you, Mr. Speaker, that you simply must look at what is going on in countries that have achieved success.

Mr. Speaker, it is most unfortunate that when talking on a subject as important as this, one which needs more detail, that my time is up. I hope to have a further occasion to speak on this very serious matter. I look forward to hearing from the minister.

Interjection.

MRS. DAILLY: Oh, I thought you meant I was finished. I couldn't see from here. Thank you, Mr. Speaker.

I would like to say to the minister that we need — and I do hope that he will respond on this — only to look at successful programs in other countries but to build up a great coordination between the Education ministry and the Labour ministry. To speak only about what's happening in education in relationship to preparing youth for the scene when they leave looking for work would be the subject of a complete speech. But I want to get this said at this moment. I realize this is not the responsibility of the Minister of Labour, but I hope he'll discuss it with the Minister of Education (Hon. Mr. Hewitt). The Ministry of Education's tendency to start standardization and centralization of the whole school system is not going to have anything but a negative effect.

[ Page 7455 ]

Mr. Speaker, I'll have to leave Education for another day. Thank you very much, and I look forward to hearing from the minister.

DEPUTY SPEAKER: Again, for the benefit of hon. members, during this process of our Friday agenda, the green light always comes on at the two-minute time period.

HON. MR. SEGARTY: Mr. Speaker, it's a pleasure to respond to the member for Burnaby on this very important subject this morning. I thank the member for her comments, and I know that she made them in all sincerity and in true regard for the problems that young people face today, not just from British Columbia but across the country and indeed throughout the entire world.

It was with this in mind that the government of British Columbia established last year a Youth Advisory Council. It provided me as Minister of Labour and the young people of British Columbia direct access to government. Rather than the government coming out and telling them what they feel is good for the young people of British Columbia, I took the approach that we would go directly to young British Columbians. We would be able to select young British Columbians from the various regions of the province, from the various professional backgrounds, from the various cultural organizations and groups throughout the province, and also ask that the student union council select a representative of their organization who would be able to participate in the British Columbia Youth Advisory Council.

I've got to say that that council has worked very hard over the course of the past few months providing me with input and ideas on how the government of British Columbia can best respond to their needs, particularly in the area of unemployment, areas relating to transit matters in Vancouver and other areas affecting youth.

I'm pleased with the budget announced yesterday by the Minister of Finance. It recognizes the advice that young British Columbians, particularly the Youth Advisory Council, have given me over the course of the past few months on matters dealing with youth unemployment in British Columbia. They gave me good advice on changes that we could make to the Challenge '86 program. That, of course, is a follow-up to the Challenge '95 program, which was very successful — a joint program in cooperation with the government of Canada, industry, and community service organizations and non-profit agencies. I'm pleased that that program is part of the budget process this year.

As well, there is in the budget a program of $10 million that we hope will create approximately 5,000 jobs. I hope that during estimates we will be able to provide the member for Burnaby and other members of the House full details of those programs, as the Youth Advisory Council continues to mature and develop those programs in cooperation with the Ministry of Labour, industry and small business, which play an important part in that.

Also, the program that was announced yesterday by the Minister of Finance identifies $5 million that we hope we will be able to cost-share with the government of Canada. So I am very pleased with the budget, needless to say.

In recognition, too, of the difficulties that many young professionals have on graduating from universities with particular degrees in certain areas that may be in short demand in the marketplace today, we hope to be able to develop some sort of internship program in cooperation with the business community in British Columbia to accommodate some of those young people who graduate from school and have difficulty finding a job or placement. More details on that program will be announced during the next few weeks and during my estimates.

As well, we have other programs in the Ministry of Labour that have been recognized and advised on by the Youth Advisory Council. These are in the area of trades and things like that, where we hope that we will be able to provide some sort of on-the-job subsidy for employers to hire young people and get them into training programs and things like that.

All in all, the Ministry of Labour and particularly young people in British Columbia have done pretty well in the budget. I hope to have more dialogue and consultation with young people in British Columbia as they continue to advise us on the role that government can play in assisting young British Columbians help them help themselves. Without question, we have a gifted group of young British Columbians. Every place I go across the province I see young, enthusiastic British Columbians. Quite frankly, they're getting tired of being called the lost generation or the useless group. There are lots of positive things that those young people have done and will continue to do as they play a major role in the further development of British Columbia's economy.

[10:45]

MRS. DAILLY: I appreciate the minister's response. I think he too is sincerely concerned. Where we differ is that I think he's still only skimming the surface of this major problem. I am particularly concerned.... I give him credit for establishing the youth council; I think that that's at least giving him some eyes and ears from the youth themselves. But there is a whole group of youth.... The ones who suffer the greatest unemployment are the dropouts — the students who are voiceless, the ones who have come from homes where unfortunately, because of poverty and low income, they have not had the opportunity that some others have had. I'm afraid they are not the ones who end up on youth councils. So my concern is that the minister remember that one must keep in touch with that large group of young people, many of whom are, unfortunately, illiterate. As someone who was once in charge of the school system, I take my share of the blame for the fact that we still have children graduating or dropping out of school who are illiterate. We have not come to grips with some of the programs needed to keep those young people in school.

The minister knows that he's also going to have to work very carefully with Health on this whole increase in the use of liquor and drugs. British Columbia has one of the highest rates. It probably goes together with the fact that we have one of the highest rates of unemployment. The minister has a massive job to do, and I sympathize with the scope of the job he has. All I would like to say in conclusion is that that job you have been given is at the moment one of the most important things any minister in your cabinet has to deal with. I say to you that I wish you good luck in dealing with it, but I also ask you to widen your scope, to look at other countries, to took at new programs, and to pay particular attention to what goes on in the Education ministry and the Health ministry and work together with them.

[ Page 7456 ]

REVERSE MORTGAGES

MR. DAVIS: Many senior citizens are property-rich and income-poor. Their life savings are locked up in their homes; their pensions are small. The result is near poverty in a land of apparent plenty. I'm saying in this statement: give them a choice. Let them live off their real estate and enjoy their savings during their remaining years.

In the United Kingdom older people can take out what are referred to as "reverse mortgages." They can take these mortgages out on their homes. This gives them a cheque monthly for the rest of their lives. They have less property to leave to their children, but a better income to cushion their remaining years. Here, as in the United States, it is difficult to put reverse mortgages together. Real estate and insurance companies are separate entities. Government must therefore bridge the gap. Surely Ottawa, or CMHC, for example, working with our provincial Ministry of Lands, Parks and Housing, can make the necessary arrangements to facilitate the development of an industry which can offer reverse mortgages to our older people. Then home annuities for the elderly will be commonplace here as well as in Europe.

In the United Kingdom, for example, Home Reversion Ltd., a private company, will purchase an individual's home outright, giving him in return a guaranteed annuity for life and lifetime occupancy. The current market value of the house is discounted by the individual's or couple's life-expectancy, and the annuity payments continue until the death of the surviving member of the family. The annuity, less a fixed but nominal monthly rent, is paid in advance. The annuitant must insure the property and maintain it in good condition. A minimum age of 69 years is recommended for entry into the plan, as the monthly payments drop sharply for entitlements at lower ages. Variations allow the senior annuitants to retain some equity in the home. There's a corresponding reduction in monthly payments, of course, but this way the homeowner secures part of the inflation-induced depreciation of home market value.

In France, a personalized variation of the split-equity plan has been in effect for decades. This "vente en viager," as it's called there, is a transaction between two parties arranged through a notaire — I assume that's like a notary public in British Columbia — specializing in property matters. The senior citizen or couple sells their property to a buyer, and the price, less a down payment, is divided by the seller's life-expectancy. The buyer then pays the seller a monthly annuity which continues until death, whereupon the payments cease and the property belongs to the buyer.

In Canada and the United States, meanwhile, there have been studies upon studies. We've been slow to develop equity conversion loans for seniors. The main reason given by our Central Mortgage and Housing Corporation officials is that life insurance companies here are not involved in the residential mortgage market. In this country a reverse mortgage transaction would have to be carried out in two steps instead of one as it is in the United Kingdom, France, Italy and so on. This gap, or deficiency, or lack in our financial institutions, could be overcome by some government agency, federal or provincial — CMHC perhaps, at the national level, or an agency set up by Lands, Parks and Housing here in B.C. — to make payments against properties held in trust and in the interest of the elderly.

There are several concerns. We would have to be sure that the annuities paid under plans of this kind would not be subject to income tax, as they would be proceeds from savings, savings accumulating after tax. There should be no income tax liability in this case, but legislation may be required to insulate the recipient of the annuity from that liability. Also, I think, in the initial stages anyway, it may be necessary to have a government agency involved because the differences in interest rates in and out of the plan should only cover the cost of the plan's administration. It should not be in excess of that; there should not be any undue profit taken in instances of this kind.

Mr. Speaker, there are numerous variations on the U.K. and French plans possible. Central Mortgage and Housing has done various studies. I would like to think that our own people here would look at this opportunity, as I see it, for the elderly, and hopefully come up with a plan which could be used here in British Columbia.

MR. COCKE: Mr. Speaker, I want to commend the member for North Vancouver–Seymour respecting the idea that he's presented today. We have two problems in this country. We have had a better economic background than Europe has had over the years in terms of people's ability to build an estate, property and so on. We have two groups here. We have one group that is property poor, as the member points out. Generally speaking, that's their only asset.

We have another group who have, by virtue of having been brought up in the Depression, saved and saved, and they not only have property, they also have liquid assets. But generally speaking, those liquid assets are in bonds and that kind of very safe investment where that money isn't circulating. So I think we have to encourage them to use their assets, travel around the province and spend some money so that we can help our economy. Then we have the other group, who are, as the member points out, property poor. I have no objection, and I'm sure that we have no objection on this side.

It could also be used, in my opinion, as agreements between heirs and their parents, the parent being late into their sixties and the children will look forward to inheriting something that they haven't worked for. It might be an idea to encourage those children to pay in advance for what they're hoping to receive and that way assist the parents in surviving the rest of their lives.

The only concern that I would have around this is that it would have to be, regardless of how you go into it, tightly legislated. The most vulnerable people, probably, in our society are senior citizens. Virtually every week you pick up a paper and find out that senior citizens have been ripped off by some construction outfit that has come around and said: "We'll put vinyl on the outside of your house." By the time they're through, they find they've got a big mortgage that they can't handle, and they've been very badly deceived. I would worry that con-men, con-people, would get into the business of annuitizing homes in this way and having agreements that would not be fair.

Therefore I feel that the member's suggestion, while it's great.... I think it would have to be most tightly legislated. The government has to be involved in this, as much as some of us feel that government should stay clear of this, that and the other thing. This is one area where I believe the people would have to be really protected. Were they not protected, the opportunity to deceive here would be too great a temptation for some people in our society, unfortunately. Some of that property that the seniors own is very valuable property.

[ Page 7457 ]

Therefore it has to be protected; they have to be protected against people who might abuse the system.

No question, as far as I'm concerned, that where it's applicable, this would be an excellent idea to help people, and it would help us all. It would help society spread the income around so that people can live gracefully in their twilight years, as opposed to having to pay taxes and so on and so forth, holding on for dear life so that their kids, who are generally.... We're talking about an age where their kids have come through a pretty good time too. We're talking about the fifties and sixties and so on, and they really don't need all they're going to inherit.

I suggest that it's a splendid idea, providing it's very tightly controlled.

MR. DAVIS: Mr. Speaker, the hon. member for New Westminster says that government should be involved. I agree with him. In the United Kingdom, they have building societies. Their charters are tightly legislated. We would, at least, have to have legislation governing the private sector which involved itself in this kind of activity.

I think initially, though, Central Mortgage and Housing nationally, or a small agency provincially, should administer a plan of this kind, get it off the ground. Having established the guidelines, perhaps the province, the nation, could legislate in this area and ensure that there were no ripoffs.

[Mr. Ree in the chair.]

It could cover a substantial part of the population. Statistics Canada tells us that four out of five senior citizens own their own homes in Canada; the British Columbia figure is slightly higher than the national average. The great majority of those homes, when owners reach age 65 or later, are mortgage free.

So there is a substantial inventory of assets out there; they're not at all liquid. It is very difficult for our senior citizens to draw on those lifetime savings. Therefore, like the hon. member for New Westminster (Mr. Cocke), I would urge that the provincial Minister of Lands, Parks and Housing have someone look hard at this opportunity.

[11:00]

ARMED SERVICES PENSIONS

MR. MITCHELL: Today I'd like to talk about a special group within my constituency who, because of a change in the federal unemployment insurance regulations, are finding themselves in a very extreme position; that is, retired members of the armed forces and the RCMP.

I think it is important that we look at what type of personnel we do need in the armed forces. Basically, we need a young, bright and active group. To maintain that standard you have to have an early retirement, and many people are retiring from 42 to 50 years of age. Part of the recruitment package in Canada to attract personnel into the armed forces is that you have an early retirement pension and then you can go on to a second career. All through their years of active service — 20, 25, 30 years — they have been led to believe that at the end of that career they would have a resettlement package; that they could move to whatever part of Canada they felt was the best place to retire to, and buy a home. Many of them, because of the job, travel throughout Canada, or into Europe or to Cyprus, and are living in what is commonly called PMQs, or military housing. So they do not have that opportunity to buy a home and settle down.

So when they get to that age of retirement, what has happened? The federal government has changed the regulations so that the pension they've built up over the many years of service is classed equally with unemployment insurance. Before, they could collect the unemployment insurance that they had been promised for the last 20-odd years; that has been denied them. Although they have paid into UIC.... They have resettled. Many of them have planned to build, to buy a home. They have been banking on the pension to make the mortgage payments, and on their second career to support their families.

We in Canada have never really accepted the English dole mentality: that your income is based on the minimum level of dole system. We have always encouraged people to invest, to build up a second.... I guess we could say a second safety net so that we can live in dignity. The armed forces have been actively counselled to do that. Because of the change that came into effect this year, the federal government cut off their rights to collect UIC, but it is still demanded that they pay. When they're in the armed forces, or if they take a second job and are working in a second career, they still must pay their UIC.

If they had taken their pension and invested it in rental properties — or anything — they could collect the rents and the income from those investments. But because it is classed as a public pension, they cannot collect that pension and also collect the UIC payments that they have paid for, or the UIC payments that they are forced to pay in the future. It's like paying fire insurance on your house, and then when the house burns down they say: "Well, too bad. We can't pay it." In fact, the situation is worse than that. We had people who were collecting it, and then all of a sudden, on January 5 — I believe the date was — it was cut off. That's like if your house burned down, you had a contractor in and he got it half constructed, and then they say: "We're not going to pay any more. We're not going to honour our insurance. We're not going to honour our commitment."

There are some real horror stories, particularly in my area, because my area is the centre of the armed forces on the Pacific coast. We have people who have retired, who have these mortgages to pay. The large proportion are younger people; they have younger families. They're in their second career, they're out of work, and all of a sudden they're cut off their UIC, and their pension is already committed to their mortgage.

There are other horror stories of families who have broken up, and part of the marital settlement was that the wife took the pension, and the husband has gone into a second career and all of a sudden he's out of work. He would normally be able to collect UIC from his second career, but though he's been paying it all these 30 years, he is denied the UIC benefits. When they are in that position, all the Unemployment Insurance Commission says is: "Go to your wife and see if she will help you." This isn't right. People who have joined the armed forces, they have served Canada, all parts of the world.... There has to be a different phase-in policy if you're going to change the regulations. I won't get into an argument on the legal position, if it's right or wrong, but it's morally wrong, and I feel it's important for that group. A lot of that group sit around here as attendants. They have served their country, and today, though they have their second

[ Page 7458 ]

jobs and are paying their payments, they are not allowed to benefit.

I call on the government to bring pressure on the federal government to rethink the position they have put a large group of people in British Columbia in. They have changed the goalpost in the middle of the game. They have left people who have been counselled and planned and promised by Canadians to depend on it, to plan for a future, and they are cut loose.

MS. SANFORD: I had assumed that some member of government might give some response to this, because this is a very important issue that is affecting some 20,000 people in our province. I know that legislatures in other parts of the country have made an issue of this, and yet we have no response from the government at all to the statement made today by my colleague the member for Esquimalt–Port Renfrew.

There are 20,000 people in this province, and another 150,000 people across Canada, that are being affected by these changes introduced by Flora MacDonald. Within my constituency it is a very important issue, because as you may know, Mr. Speaker, Comox is one of the largest air bases in Canada and hosts a very large contingent of armed services personnel. In addition to that, we have a large number of RCMP people who are going to be affected by this legislation as well.

The argument, I think, that this government should be making to the government in Ottawa is that because people are in the armed services and are forced to retire at an early age, their pensions are often inadequate. Mr. Speaker, I think that in your constituency as well as in every constituency in this province, people recognize how difficult it is to find a second job when you have already reached the retirement age, even if it is an early age of retirement, 40 or shortly after. We know that there are no jobs for those people, and if they do come up with a job it is usually a very low-paying job, which means that the Ul that they will collect will also be low. Yet these are the people who have very high expenses at that time in life, because it is very often the time when their young people are teenagers, their children are at the teen-age level, or they are entering university. Now as a result of those additional expenses, they are asked to deduct from the small UIC payments they are likely to get — if they've been lucky enough to find a job — the pension that they have paid into and the pension that they deserve. It's an unfair situation, Mr. Speaker.

The other problem, of course, is that many of these people are faced with relocation costs at precisely the same time. As my colleague pointed out, they are shipped all over Canada, sometimes into Europe. Many of them are living on air bases right now in PMQs which they have to vacate once they are out of the armed services. These people should be entitled to full Ul benefits if they are fortunate enough to get work.

I certainly hope that the government will take some action on this and make the views of those 20,000 people who are now banding together, raising money to take this case to court — that the government of British Columbia will support them in their efforts, as other legislatures have done.

MR. MITCHELL: Mr. Speaker, I must go on the record that I was shocked that the Minister of Human Resources (Hon. Mr. Nielsen) sat in this House and did not stand up and give any support to people whom he is watching the federal government legislate into poverty This is what we are setting up in Canada, a legislated level of poverty at the UIC level. Granted, it's larger than the welfare level in some cases, but in many other cases it is not. I feel that this government is completely unbelievable about what is needed to get this economy going.

We have in my riding a young lawyer who is an alderman in Esquimalt, Moe Sihota, who is taking class action with the veterans, the members of the armed forces, to fight this issue through the board of referees, through the federal court umpire, and it may eventually be appealed before the federal court of appeal. I feel that if one alderman, working out of my constituency office and Jim Manly's constituency office, can give that type of leadership.... The government is so insensitive to 20,000 of the citizens of this province, and they sit there and do absolutely nothing. The ex-Provincial Secretary will go out on a pension of $39,000 or so a year, and he won't have to worry about a second job because he is at the age where money is not important. But when you have people 42, 45 or 50 years of age who are denied all the benefits that the other residents of Canada have, and who have given their best working years, and the government does nothing....

I know there are at least 20,000 people out there who will listen to the silence that this government gave in support of their cause. And they'll know that this government is solely ready and prepared to go along with the Conservative government to legislate poverty at the lowest minimum wage possible. This is the sort of stuff where if we don't have cooperation and we don't have these issues that arise at times pointed out to the federal government and a stand taken on, then we will never have the continuity of full employment that we need. We must build in something better than the safety net of poverty. We must give people that opportunity to build that second career, to build for investments, to be able to live in dignity. I thank you, Mr. Speaker. I will take the message of the silence of the government to the constituents.

HIGH-TECH INDUSTRY IN B.C.

MR. REYNOLDS: It's a pleasure to get up this morning and talk about the high-tech industries in British Columbia. High technology in B.C. Is an exciting story of dynamic economic growth and dramatic scientific breakthroughs. An industry barely known some 15 years ago is today providing new jobs and new opportunities. It truly represents the progressing front in our province's fight for economic renewal.

[11:15]

High technology is one of the fastest-growing industries in British Columbia. The software sector of the industry alone averages a growth rate of 25 percent per year, and in 1985 saw sales of $200 million. Between 1982 and 1985 the hardware sector's total sales increased from $250 million to more than $640 million. Some high-tech companies double or even triple their sales annually. The success of high technology in British Columbia contributes to more than just economic growth.

Economic renewal also means economic diversification. B.C. must diversify its economic base to meet more successfully the challenges of the coming decades. High technology is crucial to this process of economic diversification, as the industry creates many interesting and diverse companies.

[ Page 7459 ]

As existing companies become more firmly established, they in turn create demands for other products within the industry which can be made locally. The jobs created by high technology are many and varied. Although 60 percent of all high-tech companies number fewer than ten employees, it is these very companies which grow the fastest. A good example is Softwords of Victoria. A finalist in the 1985 Canada Awards for Excellence, Softwords has increased its employees from five to more than 25 over the span of three years. That is an astonishing fivefold growth of jobs. Examples of such dynamic growth are many.

The fastest-growing high technology companies are those that create unique and original products. Often these products are developed to enhance the operation of a resource industry within the province. British Columbia has a particular advantage in developing these kinds of products due to the strength of our resource-based industries. Geomin Computer Services of West Vancouver exemplifies the type of company that is achieving great success in this area. Geomin has developed excellent software for use in the mining and engineering industries. Software was developed in response to a provincial mining project, but its application is not limited to just British Columbia. An international market for the product exists. In fact, Geomin has signed a sizeable contract with China to export the software. Such a contract enhances British Columbia's value as a Pacific Rim trading partner.

In Burnaby, Newtec Industries Inc. In 1984 had five employees and sales of $225,000 a year. It is in the business of making fume detectors on recreational vehicles, boats, etc. Over the last two years the number of employees is up to 24 from five and is doing sales of $1.1 million and expanding every month. They are also becoming the standard equipment in many international companies that make recreational vehicles and boats.

Another company that has recently won a major contract with a foreign country is Photofax of Kelowna. Photofax will be selling $(US)4.5 million to Bulgaria. The Bulgarians are also building a $(US)2 million facility in which to house this equipment. Photofax beat out such competition as ITT of West Germany and Xerox of Great Britain to secure the contract. Company president Mr. Bob Asseltine says that he believes this is in part due to the good reputation Canada has as a trading partner, and it enjoys it in many other areas. British Columbia can pride itself on the part it plays in maintaining and furthering this good reputation.

Entrepreneurs like Mr. Asseltine are the driving force behind the success of high technology in British Columbia. Our Social Credit government applauds their ingenuity, hard work and enterprise. To further encourage these entrepreneurs and others like them, the government has established such bodies as the Science Council of British Columbia, the Discovery Foundation and the discovery enterprise program. These programs provide a vital helping hand especially to young people and young companies seeking to establish themselves in the market. The rate of economic growth in high technology, Mr. Speaker, has given new meaning to the initials of R and D. As well as standing for research and development, they now also signify renewal and diversification. High technology is contributing to a bright economic future in British Columbia, and that is good news for everyone.

HON. MR. McGEER: Mr. Speaker, I waited vainly to hear from the opposition agreeing with the member for West Vancouver–Howe Sound about the dynamism of high technology in British Columbia and the contribution that it is already making to the future economic growth of our province. I associate myself with everything that the member for West Vancouver–Howe Sound has said, and I can only say that if anything he was too modest about the accomplishments and about the future.

We will, Mr. Speaker, soon be releasing a report giving a quantitative assessment of just what the Science Council grants have done in terms of economic return to the province of British Columbia. I think it's the first time any government has attempted to make this kind of economic quantitation as a result of the science investment. I have seen the figures from that report, and I can only say that it will astonish the members of the House, and it will astonish many members in the government. It does say, however, in our own experience in British Columbia, why it is that jurisdictions that have invested in science and companies that have invested in science have obtained for themselves returns far beyond their wildest expectations.

In addition to this direct investment of science grants, we have been supporting an innovations office through the Science Council and the Discovery Foundation joint sponsorship. This isn't related as much to high advancing science as it is to the small ordinary inventor who has a new product that he wants to develop.

The result of that, quite apart from science investment — just counselling and giving a little bit of assistance — has produced the equivalent since its inception of a megaproject in British Columbia, comparable almost in its total effect to that produced by northeast coal, itself a stunning success. But this is diffused in small companies — several hundred of them — which in total have had this economic impact in British Columbia. That's a second and rather small part of our science policy here in British Columbia.

Then in addition to these two we have the discovery enterprise program, which is providing the bridge funding for those enterprises that are now ready to step into the larger market of world competition. All of this adds up to the most rapidly growing sector of industry in British Columbia, and one which I have predicted in the past and predict now with even more confidence will become by the turn of the century the province's largest employment sector.

MR. REYNOLDS: Mr. Speaker, the minister said I was a little modest in my initial comments. I wanted to make sure that he would have a chance to get up and talk eloquently about his department as he has done such a great job, but it was interesting that we didn't hear from the doom-and-gloom boys across the....

Interjection.

MR. REYNOLDS: Oh, you get up and talk about the positive things, about what this government is doing in this province, especially in the high-tech areas. The Minister of Finance (Hon. Mr. Curtis) is sitting here to listen to the Finance critic for the opposition, which event will be happening immediately after I sit down. I'm sure we'll hear the doom and gloom. We won't hear about some of these good high-tech things that we're doing in this province, the jobs that we're creating in this province, the employment that

[ Page 7460 ]

we're creating, the new British Columbia that we're building. We'll hear the doom and gloom. It's unfortunate when they have this opportunity.

Where were they? Tongue-tied? They couldn't get up and.... I would have expected them to at least find one or two that maybe went broke. In any good economy any free enterpriser has the right to start a business and go broke, and I'm sure there's a couple that did. But, my God, they didn't even get up and talk about that.

Once again, I want to say congratulations to the minister and to our government, who have done so much hard work in these high-tech industries. They are blossoming around the province. There are some exciting stories around the province. To the Minister of Finance, with his great budget yesterday — it will encourage even more high-tech development in this province — congratulation goes also.

I just know that we will continue over the next years and past the next election to keep on building this province the way the people of British Columbia want it built, with new high-tech industries, and to keep this province going and flourishing. I'm looking forward to the next election, when we can talk to the people of British Columbia about these high-tech industries, because people are working out there in the Chemainuses and Squamishes — in the north, the east, the south — in all these new industries. They know what this government is doing; they know we're doing our best. When you look at the rest of Canada, we're just doing a great job in this province in building with these industries. It's exciting to look at these, especially exciting when you have to sit, probably for the next two hours, and listen to the Finance critic for the NDP with the doom and gloom. They won't tell us what they would do for this province; they'll just get up with the doom and gloom about what they think we've been doing.

HON. MR. NIELSEN: Adjourned debate on the budget, Mr. Speaker.

ON THE BUDGET

(continued debate)

DEPUTY SPEAKER: The Chair recognizes the member for Nanaimo.

Interjection.

MR. STUPICH: The Minister of Finance notes underwhelming applause. For a moment I thought he and I and you were going to be the only ones here this morning, but we've done a little better than that. He had a much wider audience yesterday. I envy him that.

Well, here's a quotation:

" ...and we believe" — we being Decima Research, the Progressive Conservative Party, the Social Credit Party, etc. — "that we can take what the pollster is telling us and change your mind. We can move you to do something that you may not have agreed on as a logical thing to do. I know that sounds provocative and unrealistic, but I can prove it to you, because we've done it. I've done it in campaigns where, on an issue basis, I've been able to persuade you, notwithstanding what you told me a minute ago. We can move you from one side of the ledger to the other."

That was Patrick Kinsella addressing SFU marketing students in November 1984.

It was with that theme in mind that the fiction writers who prepared this budget drafted it as it was presented to us yesterday. It is a provocative and totally unrealistic budget — unrealistic in its portrayal of the state of the province and provocative in the extent to which it attempts to mislead ordinary working people about government policy, about the state of the economy and, ultimately, about their own powers of observation. The mission of this budget is misinformation and deceit. It attempts to fool people into believing that the government has a magic formula to turn the economy around without an economic policy. In the end this budget will fail in its mission. It will fail because it is patently unbelievable. It represents an impossible combination of policy choices all at once. Everyone knows you can't increase spending, cut taxes and balance the budget simultaneously.

Everyone knows that only a desperate government would attempt to pawn that one off as government policy in British Columbia in 1986. Moreover, everyone knows that the Socred government is interested only in bluffing its way through until the next election. There is no effective economic plan coming from this government. How could there be? There isn't even a commitment to being truthful to people. If you don't believe me, listen to what is written by one of our airport-bookshop economists, Milton Friedman:

"A recent election in a Canadian province illustrates our generalization in a rather different way, one that clearly brings out a major reason why the generalization is valid and also bears particularly on the prospects after re-election. William R. Bennett was recently re-elected for his third term as Premier of British Columbia. Immediately after his re-election he announced a sweeping program to reduce the role of the provincial government. He proposed to cut the number of government employees by 25 percent — that's all of the employees in the public sector, some 75,000 people — and to reduce spending on a wide range of programs. In addition, he abolished outright a number of politically sensitive commissions. There has, understandably, been an outcry of rage and frustration from threatened civil servants and other groups directly affected by his actions.

[11:30]

"Now Mr. Bennett could have introduced these measures before the election instead of immediately thereafter. Why didn't he? The answer is so obvious that it is embarrassing to spell it out. Had Premier Bennett spelled out his intention to cut personnel and funds before the election, he would have aroused immediate and vocal opposition from the special interest groups affected and only lukewarm and far less vocal enthusiasm from the taxpayers affected in general. By waiting until after the election to spell out his program, Premier Bennett could hope that the bad effects on the concentrated groups would dissipate before the next election, while the good effects on a broad constitutuency would have time both to take effect and to be recognized as the result of the measures he took."

That's from Milton and Rose Friedman's Tyranny of the Status Quo, Harcourt Brace Jovanovich, 1984, pages 6 to 7.

[ Page 7461 ]

What can you expect of a government which was brought to power on a deliberately hidden agenda? Forthright honesty? I think not, Mr. Speaker. In the budget speech yesterday and in the throne speech and in the Premier's televised speech before, the message has been the same. Unfortunately, the government does not see the importance of the values of truth, honesty and a well-informed public.

The relationship of elector and elected is a powerful thing in a democracy. There comes a time in the life of every democracy when the government finds it must call upon that bond and seek extraordinary performance on behalf of the public good. This government has shattered that bond. It has no reservoir to draw on. It has lost a significant part of the moral basis for governing. In a sad way it has destroyed a part of the social fabric of our province. But sadder still is the realization that this budget is designed to put over another one, to help the government bluff its way through one more time.

This budget cannot be relied upon as an accurate estimate of anticipated revenues and expenditures. You can't trust it any more than you could trust the last budget before the 1983 election. Remember: actual revenues $703 million less than estimates; actual expenditures $281 million over estimates; a total deficit of $984 million in the face of a predicted break-even position — almost $1 billion. What's more, it was the first deficit for B.C. In over 30 years. What's more again, if I may abandon my notes for a moment, Mr. Speaker, the deficit in that period ended March 31, 1983, together with the borrowing of the Crown corporations in that period, was greater than in any other single year in the history of our province and was 20 percent greater than the total borrowing of all of the Crown corporations during the four-year period which included the three-year reign of the NDP. In that whole four-year period, the Crown corporations increased their debts by $1.8 billion. In this one year, the year in which the government predicted a break-even position, they borrowed an additional $2.2 billion, 20 percent more than was borrowed during the whole four-year period during which the NDP were in office. That budget was not to be trusted any more than the government which presented it. It was part of the Kinsella-Premier-Minister of Finance connection designed to fool the voters rather than to inform them.

In these remarks, I will examine the budget record of this Minister of Finance. I will comment on the economic fortunes of the province and examine the budget proposals. I will discuss the economic mistakes of the government and present some concrete solutions on behalf of the New Democratic Party. It is a history of budget deficits. We should not be surprised that this budget attempts to pull the wool over the eyes of the public. Some of us should, I suppose, be less surprised than we are, given the politicization of the Ministry of Finance under this government.

I recently reviewed the budgets of the past five years. There is a pattern: a history of deceit. In 1981 the government was — and this is a quote — "not prepared to consider borrowing to pay operating expenditures." The record of deficit budgets, of course, has continued despite the bold statements made by the Minister of Finance. Indeed, they started then. Since he made that statement, almost $5 billion has been borrowed to pay for operating expenses alone.

The Premier recounted an important initiative taken to remove transit services from B.C. Hydro and "put it where it belongs, in the hands of local governments but with the support of generous and dependable provincial funding." It is ironic that in the lead-up to this budget, the provincially dominated transit authority for greater Vancouver raised fares and doubled the surcharges on Hydro bills to pay for a transit budget that has increased by 125 percent. The citizens of greater Vancouver are paying 61 percent of the cost of transit, compared with the province's contribution of 39 percent. Yet in contrast to the promises of 1981, they have absolutely no control over the miserly and unpredictable financial directives received and handed down from the minister responsible.

The 1981 budget made some truly extraordinary promises regarding the northeast coal railway line, which the minister of international travel called a tremendous success. Mr. Speaker, we can't afford any more successes like northeast coal. At that time, the Bennett government predicted that "financing for this line will take the form of provincially guaranteed debt, issued on behalf of the BCR. A surcharge on all rail shipments of coal will be used to repay the debt." Recent calculations show that even if coal contracts are fully honoured, the surcharge would cover only one-half the cost of the rail line. My colleague from Vancouver East has consistently shown, and now the member for North VancouverSeymour (Mr. Davis) has written, that the surcharge will not be fully operative until 1989, by which time there may be no more coal left.

The 1982 budget — the government was resisting "the borrowing trap" and preserving the AAA credit rating. Well, the trap baited its lure, and the AAA rating is long since history. In fact, no government in B.C. has ever squandered the credit of the next generation the way this one has. They have quadrupled the debt in four years. No one can possibly sustain that pace of borrowing, and with nothing to show for it. That's the tragedy of it. It's not just that they've borrowed; they've borrowed us into tremendous debts, and there are absolutely no positive accomplishments to show for it.

AN HON. MEMBER: The Coquihalla Highway.

MR. STUPICH: The Coquihalla Highway has been mentioned as their one positive accomplishment. May I remind you, Mr. Speaker, it's the only toll highway in the whole of Canada.

This budget was to carry us through "without harsh and inequitable sacrifice" — that's the way it read — "and would pave the way to recovery." The facts show that there are now 70,000 to 80,000 fewer people working in B.C. than there were five years ago. Is this "without harsh and inequitable sacrifice?" Is this "the way to recovery?" Mr. Speaker, you can't trust their budgets.

This budget grossly overestimated revenue. It overestimated economic activity in the province by a factor of some $4 billion, despite a multitude of respectable economic forecasts both inside and outside the government. The 1982 budget was presented to us as balanced between revenue and expenditures. Within a few hours I predicted the deficit would be at least $500 million. It finally ended up at $958 million — a politically inspired budget, not an accurate estimate.

Nineteen eighty-three — this was the big lies budget. The first big lie was that restraint leads to economic recovery. Where's the evidence of that? What recovery? I was interested to read a story of a meeting where David Tafler, the publisher of the Financial Times, was talking about Canada

[ Page 7462 ]

as a whole, the prospects for Canada and the need for something to happen.

"The program must emphasize British Columbia, and B.C.'s forest industry. How can Canada press ahead as a whole when British Columbia is on such a losing streak?"

This is dated February 20, 1986 — just four weeks ago. He told those at the chamber luncheon:

"We see hard numbers which point to a region of the country which has been almost crushed from the economic standpoint. The numbers are stark. B.C. unemployment, now 14 percent, was under 7 percent in 1980. The province once had the highest wages in Canada, but now it has pay raises among the lowest. In 1985, for the fourth year in a row, B.C.'s economic growth ran last, or near last, among all ten provinces. And the real volume of production last year was the same as it was for nearly five years earlier."

Mr. Speaker, that is the product of restraint, restraint that was supposed to lead us to recovery. And that's recovery, as Mr. David Tafler of the Financial Times describes it. We predicted that the result would be a downward pressure on economic recovery and direct job loss to the economy. Unfortunately, our predictions were only too accurate.

The second big lie in the budget was to say that the government had no choice. "Restraint" was the term used to get rid of programs that had been a thorn in the side of the Bennett government for a long time: programs like the Human Rights Commission and the human rights branch. The Bennett government abruptly and secretly ceased all direct lending programs for small business under the restraint program. In fact, only one-quarter of the funds promised under these programs was ever delivered. It was "restraint for recovery." Following publication of an error-ridden pamphlet, this slogan was dropped. Most of the province, most of the country and much of the western world is fully aware that the restraint package set our economy back on its heels and killed a fragile recovery in 1983.

Now for 1984. This is the year the Bennett government trumpeted "the first-ever reduction in government spending." You can't even believe that. The fact of the matter is that spending increased in 1984-85 by $382 million. Some reduction. That was the year that the budget deficit jumped more than $300 million over the budget figure. They've been worse, but that's pretty bad. A temporary measure called the health care maintenance tax, in the form of an 8 percent tax on personal income, was brought into being in 1984. British Columbians are still paying for this "temporary" tax.

Nineteen eighty-five saw the emergency of substantial tax breaks for business, but nothing for their customers. This budget committed the taxpayers to fund a $1 billion tax expenditure plan over three years with absolutely no indication of where the money would come from.

New programs for small business, introduced in 1985, only provided partial loans for manufacturing operations, and there was nothing for the bulk of small businesses, which are in the service sector. Who knows to what extent, if any, they will ever deliver on these promises? The myth of Social Credit as a government for small business exploded when business bankruptcies in B.C. rose by 166 percent in the last five years, compared to Canada as a whole, where they have dropped by 9 percent. There is a history of misleading statements in budgets from this government.

Before dealing with the budget statement from yesterday, I want to comment briefly on the economic situation in our province.

The outlook for economic activity in British Columbia is very mixed. On the one hand, some sectors show the first modest signs of a fragile economic recovery. The recovery is slow, considering that the B.C. economy is in such a depressed state. Forecasting opinion holds that economic growth will be somewhere between 3 and 4 percent. Employment opportunities are predicted to improve during 1986, but they seem to be tied to the short-term service sector jobs at Expo 86. Unfortunately, the consensus also holds that there will be a steep downturn and a decline in employment in 1987.

[11:45]

For the first time since 1981, there was actual growth in retail sales in 1985. Tourism growth has been favourable and is likely to be very strong in 1986 with the influx of tourists for the world's fair, and a projected growth of 3 to 4 percent in real disposable income. For the second time in this decade, B.C. Is poised on the verge of economic recovery. On the other hand, there are a number of specific programs which have arisen and which, I regret, the government has not dealt with in this budget.

On March 4, more than two weeks ago, Statistics Canada reported it had completed its survey of investment intentions among investors. The results are a disaster for British Columbia generally and for the budget in particular. What has happened is that public and private capital spending declined almost 40 percent in real terms between 1981 and 1985. A recovery was hoped for in 1986, but StatsCan reports that investment in B.C. will again decline in 1986 by 6.7 percent in nominal terms.

The Minister of Finance feels confident in ignoring this information. He has forecast an 8 percent increase. StatsCan says it's going to decrease by almost 7 percent; the Minister of Finance bases his rosy projections on his estimate that investment will increase by 8 percent. That's a difference of almost 15 percent. The authoritative data from StatsCan shows that by the end of this year, investment will have dropped more than 44 percent below 1981 in real terms. This news comes as a shock to many forecasting agencies, which probably believed more than they should have from this government's propaganda.

My colleagues and I in the New Democratic Party see clearly that there is a need to do something in this province which will return some degree of confidence to private investors. The disastrous investment climate is reflected in the resource sector. Continuing low commodity prices and high costs relative to competitors have made it difficult for resource industries to absorb new provincial taxes. Temporary relief has been obtained for some of the closed mining operations through the critical industries program. The participants know that this program is a temporary one, and know that the Bennett government would follow a familiar pattern if it became re-elected. The low value of the Canadian dollar relative to the American dollar makes many products competitive. Under these circumstances, protectionist measures continue to be a constant concern if B.C. wishes to maintain its share of the U.S. market.

Everyone who thinks about it realizes that we need a long-range industrial strategy to meet the competition. This government cannot expect to be bailed out forever by currency depreciation. The world glut of coal will dampen any

[ Page 7463 ]

hope of that sector recovering. Just yesterday, more price and volume cuts for southeast coal were announced. The mistake in developing northeast coal was in its timing. A perfectly useful and necessary economic development can be a disaster if it is timed for political expediency rather than timed to meet sound economic objectives. That's the crime in this government's economic policy.

So the economic picture is very mixed for 1986. The longer term is a different story, and I'll deal with that later on.

Budget outlook. Equally important is the state of the provincial government budget. Last year, without ever revealing where the money would come from, the Minister of Finance saddled this year's budget with a $340 million revenue hole in terms of new tax concessions to industry. There was a heading: "Revenue: the more you give away, the more you get." The revenue concessions: corporation capital tax, gasoline tax, small business employment tax credit, non-residential school machinery and equipment, non-residential tax ratio reduced, freeze on water rental rates and others. Total tax concessions to business and industry: $382 million. Increased revenue from B.C. Rail tax: $12.5 million. Insurance premiums and tobacco tax total increases, leaving a net tax expenditure of just about $340 million.

Mr. Speaker, I think it's worth noting that among these tax expenditures, some $18.2 million is being raised — additional taxes from individuals — while business and industry are getting welfare to the extent of almost $358 million. Where are the jobs that were supposed to come from this tremendous giveaway to business and industry? There are more people unemployed today than when this program was introduced in the Legislature a year ago.

The 1985-86 budget produced a deficit of $890 million. Yesterday the Minister of Finance confessed that the actual figure will be closer to $948 million. But what about 1986-87? The budget forecasts a deficit of $875 million, just $15 million lower than the deficit that was forecast a year ago. So when the minister talks about the reduction in the deficit.... Let's compare the budget figures. The budget deficit estimated last year was $890 million. This year it's $875 million — a decrease of $15 million. Mr. Speaker, I intend to show you that that figure will not be realizable.

Let us look first at the revenue side of this picture. Personal income tax revenue has been growing at an annual rate of 2.1 percent over the last five years, but grew more rapidly, at an estimated rate of 8 percent, in 1985-86. Clearly, part of this increase was due to the two surtaxes imposed. The imposition of a surcharge will boost the rate of increase in income taxes when it's introduced, but this growth rate levels off immediately thereafter. Even if it did not, and income tax grew at the same rate as in 1985-86, personal income tax revenues might go as high as $2.165 billion. But the minister has pegged them at $2.35 billion. In other words, the revenue forecast exceeds an optimistic mark by almost $200 million. The budget is padded. This figure cannot be trusted.

Corporate tax revenues were overestimated in the 1985 budget by $100 million, or 25 percent. The minister has failed to explain this discrepancy. The third-quarter financial statement noted that the federal government had decreased payments during the first two months of 1984-85, but that no such problem was expected this year. So why was the government wrong by $100 million in this one item? And why hasn't that $100 million reappeared in this year's budget? Could it be that this figure is also padded, Mr. Speaker? When you have a budget which offers nothing but tax breaks for investors — tax breaks? giveaways! — it's hard to see the forecast 28.5 percent increase in corporate tax revenues being realized, especially if you look at the forest industry and realize that it will be five to seven years before they will be paying any corporate income tax. This figure cannot be trusted.

Social service tax revenue has been growing at a rate of 6 percent over the last five years. The budget projects the growth rate will escalate to 10.6 percent. At the outside, this may be feasible because of the Expo world's fair. But on January 23, 1985, the government said that $126 million of Expo-generated sales tax revenue would be used to offset the then projected $311 million deficit of the fair. This statement, issued under the name of Expo chairman Jim Pattison, represents the only budget information yet given by the government. Why is there no provision in the budget for funding the Expo deficit? This is the year in which it would happen. This figure cannot be trusted.

Natural resource revenues will again be a fairly unstable area of government revenue during 1986-87. In the mining and petroleum industries revenues will be below those of the previous year, due to the instability of world oil markets and flat commodity markets. Coal and natural gas prices will remain low. In 1985 the forest industry saw profits for the first time since the major turndown in 1981-82. The industry should do moderately well in 1986-87, provided high interest rates, a stronger Canadian dollar and protectionism in the U.S. do not choke off this sector's recovery. Revenues are not expected to increase, and I agree with the government's assessment in this respect.

In terms of other revenues, the government has forecast a huge increase in lottery proceeds. We're going to gamble our way to prosperity. Booze and gambling are the two growth industries under Premier Bennett. This government has taken all the cash in tax increases; it has eliminated job opportunities. Now many people have nothing more to look forward to than cashing a social assistance cheque of some kind and gambling with the proceeds. Lottery revenues were budgeted one year ago at $78 million; this year they are budgeted at $110 million. In addition, perhaps a like amount will be turned over to Expo.

With these assumptions, one would expect the budget to look vaguely like this, Mr. Speaker. Looking at personal tax revenue, the budget figure is $2.35 billion; I predict $2.165 billion. Corporate tax revenue: budget, $0.406 billion; I say $0.350 billion. Social service tax revenue: budget, $1.623 billion; I say $1.580 billion. Other taxes: budget, $0.808 billion; $0.798 billion in my figures. Natural resource revenue: $0.681 billion in the budget; $0.665 billion in my figures. Federal transfers: $1.892 billion in the budget; $1.85 billion in mine. Government enterprises: $0.43 billion in the budget; $0.42 billion in mine. Other: $0.577 billion in the budget; $0.57 billion in mine.

The total in the budget is $8.768 billion; the total in what I call realistic figures is $8.398 billion. Then subtract the tax expenditures inherited from last year's budget, in the amount of $340 million, and we're left with actual revenue, which should have been presented to us yesterday — realistic figures — of $8.058 billion.

In preparation for this debate the NDP caucus research staff examined various economic indicators and prepared forecasts of government revenue under existing tax legislation. The estimate thus produced was just under $8.4 billion. When the effect of tax reductions for investors in the '85

[ Page 7464 ]

budget was considered, the revenue estimate dipped to just over $8 billion. Even this estimate might be considered optimistic, because it did not take into account the decline forecast by Statistics Canada in capital investment that I referred to earlier. Somehow the Minister of Finance has managed to coax his fiction writers to produce a much larger revenue figure of $8.768 billion. How he did this we'll never know.

This year's budget revenues were reduced in the 1985 budget programs by over half a billion dollars, according to the minister yesterday. The funny thing is that the revenue effects of the '85 budget were supposed to be $340 million in the '86 year. I'm not sure which figure is correct, Mr. Speaker. That bears more analysis.

In this year's budget the Minister of Finance has further reduced revenues by almost $45 million, yet he shows a revenue increase to the province of $593 million. Mr. Speaker, these figures don't add up. They cannot be trusted.

Expenditures. The expenditures announced in the '85-86 budget totalled $9.056 billion. The revised total, according to the government, is $9.123 billion. The average increase in expenditures has been 4 percent over the past two years. This year's budget calls for an increase of $587 million, or just under 6.5 percent on an estimate-to-estimate basis. The increase runs ahead of expected inflation. There are, however, a number of strange items in the spending estimates which need an explanation. Here, too, the rubber numbers in the budget lack credibility. This is most obvious in the three areas highlighted by the minister yesterday: health, education, and forestry. All British Columbians know what they have been denied up till now. They know that the taxpayer-financed polls show the government is weak in these areas. So as in 1982 — history repeats itself — we have special funds and new initiatives and all kinds of smoke and mirrors to show some signs of activity. The working people of this province who pay the bills for all this carry-on are not going to buy it once again.

[12:00]

[Mr. Ree in the chair.]

Education. The only case where the commitment to increased funding for education is clear is in the minister's office, which has shot up 17.7 percent — the largest increase in the ministry. Grants and contributions for education as a whole, excluding the excellence fund, are down 1.01 percent to $16.6 million. The base funding for public schools is down $24.5 million, comparing contributions to school districts, school debt service, homeowner grant and non-residential property tax. Some of this base funding shortfall will be made up by the $15 million allocation from the excellence fund — the slush fund that's available to cabinet to do with as they will, where they will, when they will. So the shortfall is still about $9 million. A shortfall of $9 million is hardly a major new commitment to education, as it was described by the minister.

What funding does exist for the school system carries a lot of baggage with it. The whole concept of putting the Bennett cabinet in direct control of education funding decisions through this fund is highly questionable, to say the least. Educational autonomy at all levels is always a concern. That concern is a growing one in our province, and rightly so.

Most other commitment consists of promises for the future. Ordinary people have learned the hard way that there is no guarantee this cabinet will provide anything from the excellence fund for the next year. The power-grab is further heightened by the erosion of base funds of school districts and by making them compete for funds — $75 million left to allocate — against other districts, colleges and universities; funds which may never be allocated. Meanwhile universities, colleges and institutes are frozen at exactly last year's level of operating.

The vote that provides for special initiatives in the colleges and institutes and other educational agencies has actually been cut by $1.8 million. Lip-service to education. Again, portions of the budget that would have been spent anyway are being transferred to the excellence fund so that the Socred cabinet can have a photo opportunity.

For example, the ministry published 16 press releases last week, all of which claimed to release $4.8 million from the excellence fund for student aid. "Student Aid Funds Doubled," screamed the headlines, which was not quite the case. All that had been doubled was the opportunity for more students to rack up a debt to get an education, when this government should have been providing grants. Within this government all the people get are new ways to get into debt.

Forests. The Ministry of Finance has announced an increase in funding for forestry, including a silvicultural initiative. We're pleased to see that this government is finally beginning to learn — and I say that with tongue in cheek — that forestry is not a sunset industry. We are pleased to discover that this government has perhaps even been listening to concerns and suggestions that our party has been making strongly in this Legislature on behalf of British Columbians concerned about the forest sector. So much time has been lost, and I'm afraid we're looking at too little too late.

For example, help to update our number one industry was turned down by the Socreds in the form of federal money for a pulp and paper modernization program. As a result, independent reports warned that our industry is stuck with producing low-value products with outdated technology. Furthermore, we have seen this government neglect to replant and tend our forest well. NSR, non-satisfactorily restocked, land has increased by 50 percent in the past five years alone.

Only last month the Premier stated in a television address that forestry will no longer be able to provide additional jobs for B.C., yet now the Minister of Finance tells us that he wants to "emphasize that our basic resource industries will be the backbone of the provincial economy for years to come."

The question is: can we trust this government? Are they really turning over a new leaf and committing themselves to properly managing the renewing of one of the world's richest forest resources? Or is this just a pre-election spending boost or a promise of a spending boost to give an impression of some new commitment to forestry? Their record speaks for itself. They cannot be trusted.

If we look more closely at the $58 million increase in the Ministry of Forests budget it is worth noting that some of this money was slated to rise in any case. For example, about $18 million of this increase was planned for 1986 under ERDA signed last year. Further, $9 million of that is actually federal money, not a new provincial commitment. A further $8 million of this budget increase is committed to silviculture.

In Mr. Curtis' budget of last year, he cut $4 million from this crucial area of forestry. Yet this year the minister is apparently trying to tell us that he wants to make up for past mistakes. Their record speaks, Mr. Speaker. They cannot be trusted. We have a serious concern with this approach. A

[ Page 7465 ]

good administrator does not just throw money at a problem when it becomes apparent that he or she has made a mistake. There must be a system in place to deal with this increased silvicultural funding to ensure that taxpayers' money is used wisely.

Unfortunately, under the restraint budget of 1983, the staff of the Ministry of Forests was slashed by 35 percent. Is the ministry properly prepared to deal with the new $61 million silvicultural project? Their record speaks. They cannot be trusted.

Finally, the largest portion of this increase in the Ministry of Forests' budget will be to establish what the government calls "a forest stand management fund." Once again we are tempted to think that this government may have actually been listening to NDP policy suggestions. This idea is similar to the forestry for the future fund which our debate leader in forestry has introduced as a private member's bill before this House. But their record speaks. They cannot be trusted.

We have to be encouraged by this lip service, but we do have concerns, Firstly, the moneys allocated to this fund are insufficient. Experts have estimated that at least $300 million needs to be spent annually on reforestation and silviculture if we are to fully recover from Socred neglect. Secondly, we repeat the question: can this government be trusted to carry through on its promises? Once again their record speaks. They cannot be trusted.

In the forest and range resource fund for 1985, the government had to admit it had reduced silvicultural activities to meet planting targets. It was on page 21. A promise not kept is a promise broken. They cannot be trusted to keep even their own estimated programs going.

British Columbians concerned about our forest sector remember only too well events in 1982 when the Socreds wiped out the forest and range resource fund and used its remaining $83 million contents to offset the provincial deficit. Our forests cannot afford such neglect again.

Finally these attempts by the government to gain some credibility on forest issues fail in their neglect of the industrial side of the picture. About 14,000 IWA workers have lost their jobs in the past five years and the volume of raw logs exported has tripled. Reports like that of Woodbridge Reed and Associates point out that our forest industry must move into higher process goods, seek out new markets and develop a much stronger research and technology base.

However, the Ministry of Forests and the Ministry of Industry have taken no initiatives in this direction. Their inaction means lost opportunities for British Columbians who could be working producing specialty wood products, printing paper, specialty pulps and remanufactured lumber.

Health. I would like to review some of the methods by which Social Credit finances our health care system. Again, we get a blast from the past. In the 1982 budget, the Minister of Finance announced the creation of a health care stabilization account for the purposes of protecting the standard of health care in the province — $77.8 million which the Minister of Health announced during committee stage of the Health Cost Stabilization Act. "The moneys which are being appropriated in this bill will be used for various aspects of health care in the province, not only for hospitals, although hospitals will receive a portion of the money." That was 1982, Mr. Speaker. Is it starting to sound familiar?

In the 1984 budget the Minister of Health announces the Income Tax (Health Care Maintenance) Amendment Act which, by imposing an 8 percent surtax on working British Columbians, raised $166 million in fiscal 1985-86. Now in the 1986 budget the Minister of Finance announces the Health Improvement Appropriation Act, which will provide $120 million for 1986-87, and at least $720 million over three years. Taxpayers will continue to pay the surtax. British Columbians will continue to pay medical premiums that will increase regularly, to the tune of $367,475,285 this year, and we will continue to lose $2.7 million each month in federal money as we continue to charge acute-care hospital user fees.

The health improvement fund worries me. I'm afraid that the decisions of where the money will be sent will be partisan in the worst sense, just as the decisions have been made as to where and when health care capital projects will be approved.

It is obvious that we will spend a great deal of time reviewing the impact on our health care system of the Ministry of Health budget: the $30 million cut in the Medical Services Commission budget; the continued lack of commitment to community and preventive health care; budget cuts in long-term care facilities, in home nursing care, in community physiotherapy, homemaker services, adult day care, emergency health services; the studied and very deliberate policy of denying the chiropractic association the courtesy of even a hearing; budget cuts in those vital cost-effective preventive programs and the money set up in a fund that will be controlled and doled out by cabinet members if, as, where and when there are political advantages in so doing.

Social assistance. This budget has betrayed the 226,000 men, women and children who are forced, through bad economic policies, into dependency on income assistance for their food and shelter. There is no recognition that the payments are worth only 75 cents on the dollar from when rates were last increased in 1981. Instead we get a deliberate underestimation of the numbers who will be forced onto social assistance this year. Nothing new here. In the 1985-86 fiscal year an extra $14 million was required because of budget overrun in that area.

It's all so familiar, so reminiscent of another phony budget. Again, back to 1982. The then Minister of Human Resources admitted that the department had failed to predict the huge increase in welfare recipients that resulted in a $117.3 million welfare budget overrun. Deputy Minister Noble said in an interview in December 1982: "Our budget of $493 million (1982-83) was based on the understanding it would be insufficient and a contingency would be required." Mr. Noble also said in September 1982 that the Ministry of Human Resources works on a contingency basis, and that during an economic downturn general revenue must be tapped to make up the budgetary overrun. What he didn't say was that the 1982 budget was the last one until after the following election. The government in the 1982 budget were not prepared to tell the people of British Columbia the extent to which the numbers of people on welfare were going to increase. They weren't prepared to tell them, so they provided for the increases by having a contingency in mind but not in the budget.

The government announces that it is providing a new allocation of $10 million to fund new programs developed for the specific purposes of assisting unemployed British Columbians to enter the labour market and meet the changing needs of employers. Why is the emphasis not on retraining and education needs of those outside the boundaries of Social Credit land, the unemployed? The $10 million is not new money; it is taken from the support and shelter allocation of the GAIN program.

[ Page 7466 ]

The budget had little to say about women. I note that although the budget for the Ministry of Labour women's programs has been increased by $100,000, the amount of money allocated to grants to further the role of women in society remains exactly the same as last year at $47,000.

The pattern is clear. The fine print does not deliver what the press releases promise. In as few words as possible, that's what's wrong with this government: they cannot be trusted.

The Bennett economic policy. There are elements of this budget presentation which are very close to the essence of this government's approach to public life. In short, they put propaganda ahead of the needs of ordinary people. Ordinary working people have suffered. They have paid the price in these four consecutive restraint budgets, and now the government believes it can fool people into thinking otherwise. As the leader of the New Democratic Party observed in the debate last week: "But what really bothers me about this speech is its attempt to describe a British Columbia that isn't the real British Columbia." He didn't give us the real British Columbia; they didn't even give us the real budget. I honestly think the government prefers to dream up results it wishes it had obtained from economic programs and to trumpet these as if they had actually taken place.

There is so much in the government statements which cannot stand up to scrutiny. The government knows that the only way it can routinely recycle and rehash statements about the economy — which cannot be believed — is through saturation advertising. Not only is the government squandering $20 million of precious tax dollars through its own advertising program; a like or larger amount is being spent through Crown corporations and the Lotteries Fund.

By now, Mr. Speaker, I'm sure that you, along with the rest of us, have heard from media outlets in our own constituencies about the packages of press releases, several inches high, that are to go on the radio and to be in the newspapers starting immediately, telling everybody what a great budget it is. That has not happened previously, Mr. Speaker. That's a departure, and it's going to come out of this extra $20 million that's been provided to try to persuade people that this government has indeed been doing something for them, rather than to them.

[12:15]

A further attempt has been made to bury the government's advertising program in this year's budget. I'm not talking just about burying the accounts in Crown corporations and the Lotteries Fund, although I could, but there's another part of it. The 1985-86 Government Information Services budget presents another example of the propaganda dollar shuffle. Instead of presenting the accurate figure of $20 million as published in last year's estimates, this year's estimates have reduced the 1985-86 expenditure to $12 million. With magical transparency the government tries to pretend that Government Information Services actually spends only $12 million, or 40 percent less than they originally stated they would last year. To reduce the political heat on the minister, $8 million for advertising and marketing costs has been transferred to other ministries — the majority to the Ministry of Tourism. The Bennett government, in an attempt to deceive, has tried to bury this $8 million.

The advertising is of the sort referred to as "opinion advertising." Its purpose is to actually change people's views of themselves, their society and their political choices. Remember that it was Patrick Kinsella who said in his public address at Simon Fraser University: "We can move you from one side of the ledger to the another." They really believe that, Mr. Speaker. This budget is one more move in that campaign. They really think they can change people's heads with propaganda over there. What malarkey! If they weren't wasting so much taxpayers' money it could be comical. Ontario admen and political hucksters come to B.C. They take the taxpayers' money and give themselves jobs and titles, set up consulting firms, and pay themselves salaries and a percentage on the gross. But that's where this government is today. It is spending untold millions in a vain attempt to mislead and misinform people about government policy, about the state of the economy and ultimately about their own powers of observation. They are still trying to move people from one side of the ledger to the other, without bothering to resolve economic problems in between.

I want to deal with the record of this government, and I want to look at two areas specifically: restraint and unemployment, and provincial government investments.

Let's look for a moment at the number one problem this government has. Let's look at continuing high unemployment and what it has meant to B.C. Let's look at the real legacy of the first government in this half century which deliberately used higher unemployment as a tool of government policy. This government likes to boast about the alleged benefit of the restraint package. To take only one self-serving pat on the back, I quote the Minister of Finance yesterday: "With the clear support of the people of British Columbia, we carried this process of reducing the size and scope of government."

It will not come as news to anyone outside of the Bennett government that we have an unemployment crisis in B.C. Some measure of the unemployment crisis is found in the startling new information from the Canada employment and immigration centre. Their recent survey shows an alarming growth in the number of British Columbians unemployed six months and longer. In this long-term category there were 11,000 at the beginning of this decade. From there it has escalated to the point where more than 65,000 are in the position of not having worked for more than half a year. This figure has nearly doubled under the restraint package. The worst of it is that B.C. has the highest proportion of long-term unemployed of any province in the whole of Canada. That's restraint, Mr. Speaker.

Even more serious is the regional nature of B.C. unemployment. Recently I examined some figures which compare unemployment in the regions of B.C. with the national average. What would it mean to regional economies if we were able to bring their employment levels up to the national average? What are the true costs of high unemployment? Which has been used; high unemployment has been used by this government as a deliberate tool of public policy. Remember, they promised to increase unemployment by 75,000 among public sector employees alone. Looking at the region of East Kootenay, unemployment is in excess of the national average by 3,000; the loss of wages, say $72 million; UIC and welfare benefits paid out, $27 million. The West Kootenays: again, compared to the national average, an additional 4,374 unemployed, with lost wages of $104,976,000; UIC and welfare paid out, $39,366,000. Okanagan and the South Interior: 7,900 more unemployed than the national average would indicate. Lost wages of $189,600,000; UIC and welfare paid out, $79,100,000. Kamloops and the Central Interior: unemployment in excess of the national average to the extent of 2,328. Lost wages of $55,872,000; UIC and welfare

[ Page 7467 ]

paid out, $20,952,000. The Lower Mainland: one of the bright spots, and yet even there, the number of unemployed in excess of the national average is 7,990, with a potential loss in wages of $191,760,000. UIC and welfare are being paid out to the extent of $71,910,000.

Vancouver Island: one of the bad spots. Unemployment in excess of the national average, the highest of all of these regions, 12,580. Wages lost, $301,920,000; UIC and welfare paid out, $113,220,000. If the unemployed on Vancouver Island in excess of the national average were put back to work, then the Minister of Finance's budget of yesterday might be attainable — just that one region. But there is no evidence of that. Prince George and the Northern Interior: unemployment in excess of the national average, 5,504; lost wages, $132,096,000; UIC and welfare paid out, $49,536,000. The Peace River: a relatively small population, but even there, unemployment in excess of the national average of 1,968. Lost wages, $47,232,000; UIC and welfare paid out, $17,712,000.

Totals: 45,644 more people unemployed in British Columbia than the national average would indicate. Wages lost, $1,095,456,000; UIC and welfare paid out, $410,796,000.

If B.C. had enjoyed the average unemployment — and I say "enjoyed" by comparison — there would be at least 45,000 more of our people working and collecting paycheques and paying income tax and buying things in the various communities in which they live. These paycheques would total more than one billion dollars a year. Taxpayers would save $400 million to $500 million in UIC and welfare costs. Rather than collecting, these people would be paying taxes. This government makes sure that every working person pays his or her share — and more — in taxes.

This is the real legacy of this government, and it is a problem which must be dealt with by all British Columbians. Most people have by now come to terms with the difference between what was promised and what has been delivered by this government. It is for all of us to develop our courage to move beyond this government and to find a formula for successful integration of our citizens into a new full-employment policy,

The minister was correct in pointing out yesterday that restraint was not the only thrust in the government's policy. He has also mentioned capital spending. Let's take a look at the record there. Let's look at provincial government investments.

One of the ways in which you can judge a provincial government's conduct is by the way it handles taxpayers' money. Such a comparison is particularly inviting to members of the New Democratic Party. There is a growing concern in this province that the numerous major projects undertaken by the government, however well intentioned they may have been, have saddled the taxpayer with a debt burden that will be tough to bear. Through mistakes in timing and execution, many have created problems for our province which were unnecessary, and in some cases tragic.

First, I invite members to consider a few examples of investments by B.C. provincial governments over the past 13 years or so, going back to 1972-75. Canadian Cellulose: the cost of acquisition was $1, a dollar that was never paid. It was a guarantee that the government would stand behind a $68 million debt load. It never had to pay one cent of that guarantee. So the total cost to the people of British Columbia for Canadian Cellulose, with all of its operations in the Rossland-Trail area and in Prince Rupert, $1. It generated net profits of $135.4 million from 1973 to March 1978, when it was turned over to BCRIC. BCRIC acquired 81 percent of the shares of Canadian Cellulose that were held by the province. Canadian Cellulose had a book value of $96.2 million at the time of sale. It paid dividends out of its profit to the Crown of some $13 million during those four short years — $13 million in four years on an investment of $1. Mr. Speaker, it maintained employment in plants which were on the verge of being shut down. It maintained employment, returned dividends of $13 million, cost only $1, and was sold to the newly incorporated BCRIC for its book value of $96 million. That was a pretty good investment, Mr. Speaker.

Kootenay Forest Products. This company was acquired by the province in 1974 for the cost of $9 million through the B.C. Cellulose Corporation. It generated profits of $2.048 million from 1973 to March 1978, before being sold to BCRIC. BCRIC acquired 100 percent of the outstanding shares of Kootenay Forest Products that were held by the province. Kootenay Forest Products had a book value of $11.371 million at the time of sale. There too, Kootenay Forest Products was bought not because it was a good investment but because we wanted to maintain employment. We took action to maintain employment, and employment was maintained as long as the NDP was in office.

Plateau Mills. The cost of acquisition of this company by the province was $7.6 million. It generated profits of $7.4 million from 1973 to March 1978, when it was sold to BCRIC. Plateau Mills had a book value of net assets of $10.964 million at the time of sale. Cost $7.6 million, generated profit of $7.4 million. The profits in those four years repaid the Crown almost the total investment, and it was worth $11 million at the time that it was sold to BCRIC.

[Mr. Strachan in the chair.]

Interjection.

MR. STUPICH: Mr. Speaker, I've risen to the bait previously, and I'll do it again. That member is not telling the truth when he says we stole it.

AN HON. MEMBER: You did so.

DEPUTY SPEAKER: Just a minute, we have a little problem here. Would the member please withdraw the statement. We may have varying opinions, but I would, in terms of a parliamentary procedure, ask.... Order, please. The Minister of Lands, Parks and Housing (Hon. Mr. Kempf) will also come to order. If I could, please, ask the hon. member for Nanaimo to withdraw the last statement.

MR. STUPICH: I'll certainly withdraw it. I'd far rather say he was lying, but I can't say that.

DEPUTY SPEAKER: Order!

MR. STUPICH: I withdraw that as well.

Mr. Speaker, we've gone through this before in the House and in public accounts. In public accounts, when in its earlier years this particular Social Credit administration used to let public accounts committee meet from time to time, and used to let public accounts committee call witnesses, the previous largest shareholder, Bill Martens, was invited to public accounts committee to talk about Plateau Mills and to talk also

[ Page 7468 ]

about the sale of Plateau Mills. In that public accounts committee, where he certainly owed us nothing — he may have owed the Social Credit; I don't know — in spite of every invitation from various Social Credit members at that public hearing to say that he got a bad deal from the NDP administration, he insisted that he got the same price at which he was prepared to sell it to some American investors, exactly the same terms, exactly the same conditions, and he was treated fairly. I trust him, I believe him, and when someone in this House, or anywhere else, says something different, I can only question.... If they can't be accused of telling something less than the truth, then they are certainly straying from the whole truth. Now that's on their conscience.

[12:30]

Mr. Speaker, I've talked about three forestry companies that were bought by the NDP administration at various prices — $1 in the case of one, $9 million in the case of another, $7 million in the case of another. All of them purchased, all of them which maintained employment as long as the NDP were in office, one of them which contributed substantially in dividends, and all of them which were sold to BCRIC at substantially more than they cost. The total cost of these forestry companies was $16.6 million. They returned dividends to the Crown of $2.6 million, for a net cost of $14 million. They were sold at far less than their market value to BCRIC for a total of $73.2 million. Now that was a good investment, Mr. Speaker. In every sense of the word that was a good investment.

Let's look at BCRIC. BCRIC acquired these three forestry companies, total book value of $118.5 million, for only $73.3 million. Now if there ever was a case of a silk purse being turned into a sow's ear, then certainly our Premier must hold the record. He took assets accumulated by an NDP administration, at a cost....

HON. MR. RITCHIE: Swan Valley.

MR. STUPICH: Mr. Speaker, they keep talking about Swan Valley. I'll put Swan Valley up against northeast coal any day of the week and come out tenfold ahead.

To get back to this brilliant administration that turned a silk purse into a sow's ear, if I may, Mr. Speaker, assets that were making money, that were returning dividends, that were increasing in value regularly.... Our Premier took these and gave them to BCRIC.

HON. MR. RITCHIE: Panco Poultry.

MR. STUPICH: I'll come to Panco.

They cost a total of $42 million and returned to the people of B.C. dividends of $60 million, if we include Westcoast Transmission, during a short period that they were owned by the people of British Columbia, and then they were turned over to BCRIC for a total of $110.6 million. With the Premier's help and active campaign, citizens of B.C. were persuaded to invest almost half a billion dollars cash in other shares of BCRIC — in the new company. This company had proven income-producing assets and a bankful of cash, but the directors, personally chosen and appointed by the Premier of British Columbia — the still Premier of British Columbia — have been able in the intervening eight years to work the market price of those shares down to $1.53. They were issued at $6; they went up as high as $9.50 or something; they had a book value at one point of $11; they're now, the last time I looked, at $1.53. Assets which maintained employment and produced dividends to be shared by all of our citizens have been written down to the extent of $350 million recently and show absolutely no prospect of paying dividends to anybody during any of our lifetimes. That's the kind of people we have directing the affairs of the province of British Columbia. Is there any reason, Mr. Speaker, that people are saying more and more often that it's time for a change?

Interjections.

MR. STUPICH: Okay, Mr. Speaker, they keep throwing Panco Poultry at me. Let's talk about Panco Poultry, shall we? Panco Poultry was acquired by the province in 1975 for $4.8 million when it was going to be shut down if we didn't buy it.

HON. MR. RITCHIE: ...took it away from the growers at a much higher price.

Interjections.

DEPUTY SPEAKER: Order, please.

Interjections.

DEPUTY SPEAKER: Order, please. Order!

MR. STUPICH: Mr. Speaker, if that minister....

DEPUTY SPEAKER: The Minister of Municipal Affairs will have every opportunity during the budget debate to make his comments. The member for Nanaimo continues. Please proceed.

MR. STUPICH: Thank you, Mr. Speaker, I'm just concerned about the time. Otherwise I'd love to debate it with him. But will he just listen? No, I don't think...but you will, Mr. Speaker.

Panco Poultry was acquired by the province in 1975 for $4.8 million — not from the growers; it was acquired from federal industries. It generated profits of $1.182 million from 1975 to 1978. In 1978....

Interjections.

MR. STUPICH: Mr. Speaker, can I tell them to just shut up, or is that unparliamentary?

DEPUTY SPEAKER: No, it isn't. I'm supposed to do that. Please proceed.

MR. STUPICH: Okay, I'm sorry. I told them. Thank you.

In 1978 Panco Poultry was sold to Cargill by this government for $14 million. The profits realized on the sale — it cost $4.8 million — just four years later were $9.2 million. Mr. Speaker, would that they could make some bad investments like that — triple their money in just a few short years. Mr. Speaker, it was bought for the purpose of, and did achieve the objective of, maintaining employment and maintaining the processing facilities that have since been closed down.

Interjection.

[ Page 7469 ]

MR. STUPICH: Mr. Speaker, I'd love to listen to him and maybe one day I will, but I don't have too much time right now, so shut up.

DEPUTY SPEAKER: Order, please.

MR. STUPICH: B.C. Petroleum Corporation was set up by the NDP administration — at least they didn't turn it over to BCRIC or it would sure be a loser by now — in 1973 to be the sole marketer of natural gas and oil in the province. It contributed $225 million to government revenue by March 31, 1976. Up to March 31, 1985, BCPC has turned over to the Ministry of Finance a grand total of $1.667 billion. Would that they could have a success story like that. Its latest annual report, dated March 31, 1985, revealed a net income of $140 million, retained earnings of $136 million and cash on hand of $30 million. Those are the kinds of economic initiatives that the NDP took.

Let's look at one of the Social Credit formations. B.C. Ferry Corporation was organized — established — by this administration. The first thing they did was start selling off the fleet. They've been selling vessels ever since they started in 1976. They sold the Queen of Coquitlam for $17 million to Royal Trust and the Queen of Alberni to Central and Eastern Trust, Royal Trust and an investor syndicate for $14.6 million. In November 1976 they sold the Queen of Cowichan for $17 million to Canada Trust and Montreal Trust. In all three cases the government leased the ships back for an 18-year period and retained an option to buy the ships back at the end of the lease. Moreover, Mr. Speaker — and this isn't in my notes, but you and I both know; we were here at the time — included in that lease agreement was a covenant to the effect that, in the event the federal government ever changed its income tax laws to prevent this tax avoidance scheme, on the part of the people who bought the ferries, the government of British Columbia guaranteed to make up any shortfall in the position of those eastern financial interests that bought our ferries. That's the kind of deal these great administrators and fiscal managers do on behalf of the people of B.C.

In December 1985 the B.C. Ferry Corporation sold the Queen of Surrey to Xerox Canada for $43 million. The original cost of the vessel was $29 million. They made a profit there: it cost $29 million; they sold it for $43 million. They're going to buy it back for $96 million over a period of 18 years — it's leased for 20 years.

The leaseback arrangement, according to B.C. Ferry Corporation president Andrew Collier, is a recognized practice for borrowing money. That's all it is, Mr. Speaker. They're not really selling them; they intend to buy them back. All they're doing is borrowing money. Yet they're borrowing it through a Crown corporation rather than within public accounts. The reason given for the sale was to finance the purchase of the $55 million saltwater fleet previously owned by the Ministry of Transportation and Highways. So they go out — in the words of the B.C. Ferry Corporation — and they borrow $55 million by transferring ownership of our ferries, and they get $55 million for the B.C. Ferry Corporation to buy the saltwater fleet. The B.C. Ferry Corporation then gives the $55 million to the Minister of Finance, and he can report in his financial figures that he has another $55 million in revenue. It's a way of borrowing money and calling it revenue. That's all it was: they borrowed $55 million, and they're calling it income. If you and I could do that, we'd have much less trouble with our banking people.

B.C. Place Corporation. B.C. Place Corporation was established to operate the stadium at B.C. Place. The government contributed $286 million to the financing of this project. B.C. Buildings Corporation holds a $205 million debt of B.C. Place. Officials of BCBC have been told that they will be required to absorb a further $300 million in debt charges. BCBC is the godfather of B.C. Place, standing behind all of the debts of B.C. Place. So-called building occupancy charges fund the BCBC operation. They charge more rent for all of the government offices all over the province, raising money to turn over to B.C. Place so that it can continue to operate. These occupancy charges have jumped almost $100 million annually during the so-called restraint program. BCBC charges are totally out of control.

The total cost of Expo 86 has been estimated at $1.5 billion. The provincial contribution has been $698 million, according to the latest figures I have. According to Expo president Jim Pattison, Expo will have a deficit of $325 million at the end of the fair — and I realize that may change, up or down; I hope it's less — which will be financed from the proceeds of Lotto 6-49. There will be approximately $55 million in 1985-86 and $250 million overall and $125 million in extra sales tax levied for the fair. So they're looking for a contribution from the provincial Minister of Finance of $125 million. There is nothing about that in the budget.

But I'm going to the fair. I bought a season's pass, and I would like to be able to spend a good deal of time there. It will be my best opportunity ever to see the kind of exhibits that will be available at Expo 86. I'm looking forward to it. The only thing that concerns me is that the lineups will be too long; I might lose patience. That's good news.

The Coquihalla Highway, about which we've heard today the total budgeted cost of this highway was $375 million. Severe overruns are expected, due to the accelerated construction of the project. Some government revenue is expected from toll charges. People talk about the Coquihalla and how great it is. Well, all right. As I say, it's the only toll highway in the whole of Canada.

Northeast coal. The minister referred to "the success story" of northeast coal. Well, as I say, I hope we don't have any more successes like that. We just can't afford them: a total cost of $3 billion — the province's contribution of $720 million and the federal of $470 million; total taxpayers' money invested in that project of $1.2 billion. The interest on that alone has to be $120 million, and some modest government revenue received in coal royalties and B.C. Rail surcharges. Now let's hope it keeps operating. We can't afford to have it close down.

HON. MR. RITCHIE: Let's keep all those people working.

MR. STUPICH: Mr. Speaker, the Minister of Municipal Affairs, who has taken so much part in my speech that Hansard may wonder which one was actually speaking.... But it does keep all those people working, if at a cost of $3 billion — is it 5,000 people working up there?

MR. SKELLY: Twelve hundred.

MR. STUPICH: Twelve hundred people working at a cost of $3 billion. He may think that's good mathematics. If he is thinking that, then he certainly shouldn't be a member of

[ Page 7470 ]

the cabinet. He shouldn't be here at all, but that's another matter.

The ALRT — SkyTrain. The total cost of ALRT is expected to be $1.037 billion. Of that, $275 million came directly from the province, using the credit of the next generation as collateral. The minister responsible has said the balance would be funded through a balloon mortgage. Under this scheme, money is borrowed to pay part of the interest on the debt. The debt gets bigger and bigger. The next generation pays not merely the cost of building the Socred megaproject but also the cost of its failure to pay the interest on this investment.

The bills for many of these Socred projects are very high. Every one of the Social Credit projects that I've mentioned is running at a deficit, if it's running at all. Every one of them is costing the taxpayers of B.C. interest charges regularly. Not in a single one of them is there any likelihood that any net revenue ever will be produced.

[12:45]

Now compare that with the package of NDP investments that we talked about earlier. The bills for many of the Socred projects are very high. In many cases the costs are passed on to the taxpayer, or more precisely to the taxpayer's children and grandchildren into infinity. These are in sharp contrast to the investments of a more prudent and much more practical government which held office from September 1972 to December 1975.

But the megaprojects also raise deeper questions about the nature of our economy. What happens after Expo? Just about everybody agrees that 1986 will be a great year in B.C., but what happens after? Hope Wotherspoon, Social Credit president, fund-raising letter, February 1986: "The question on many people's minds this year is what happens after the Expo world's fair." That's the question clearly on Hope Wotherspoon's mind — Mrs. Wotherspoon is of course the president of Social Credit in B.C. The Bennett government has turned Mrs. Wotherspoon into a leading issuer of junk mail in the province. She has written to thousands of unsuspecting British Columbians, albeit tongue-in-cheek, announcing: "It is the post-Expo period that will bring the greatest economic growth and investment ever seen in our province." It wouldn't have to be much to beat the last five years. "It will happen because it was planned that way." The writers of the throne speech, who apparently are intimate with Mrs. Wotherspoon's writings, referred several times to the government's long-range plan. The budget address repeats the same phrase. The taxpayer has paid and paid and paid again to have this phrase drummed into his or her head.

What is the Bennett government worried about? Why is it that people have to be told so often that the government has a plan? Why is it that they have to be told even more frequently that the plan is working? The answer of course is that the government does not have a plan. What they have is a number of failed slogans. It's a great job-creation plan for slogan writers. As each one fails, another needs to be employed.

As I said earlier, this government has tried every economic theory you can find in an airport bookshop. This time they are trying straightforward dishonesty. The economic forecast in this budget for 1987 sets a record for inaccuracy and distortion, a record that can be compared only to the one set in 1982. Consider the following comparisons: page 45 of the budget document. The Finance minister has tabled his predictions for British Columbia's economic performance in 1987. Apparently real-growth gross domestic product will increase by 3 percent over last year, yet the Conference Board of Canada predicts only a 1.3 percent GDP. While the Finance minister anticipates a 7.5 percent increase in retail sales, the Conference Board sees an increase of only 4.4 percent.

[Mr. Speaker in the chair.]

The Finance minister has predicted a 2.7 percent increase in employment in B.C. for 1987; the Conference Board of Canada foresees an increase of only one-third that amount — less than I percent. Even gloomier forecasts have been made. Informetrica predicts a decrease in employment amounting to 10,000 jobs. The Canadian occupational projection system forecasts a decline in employment of 3.1 percent, or 40,000 jobs lost. These are dire warnings for the year ahead, and yet the Bennett government has chosen to ignore them.

The government still has not learned its lesson regarding economic planning. They have not learned the first principle: that economic strategy must originate with the people, rather than being forced on them by a central government. In the absence of a commitment to this principle, most economic plans will fail. What is left is a series of government projects, rather than a pathway for people to follow. What is needed is a reason for people to work, save and grow, as the Swedish social democrats say. The second commitment needed is to the level of community involvement in every region in the province. The role of individual citizens in local communities is crucial in obtaining maximum value and employment for our resources.

In the absence of these basic commitments, it is of little wonder that the billions borrowed by this government have had so little impact on future prosperity. It is no wonder people are concerned about what happens after Expo.

Options to the future. In his address to this assembly March 12, the leader of the New Democratic Party focused on six urgent priorities for action this year. Five were: the need for a resurgence in capital investment; the need to revitalize regional economies of our province; the need to recognize that a good educational system helps attract investment and jobs, to recognize that the cutbacks in education under the Bennett government not only hurt our children but cost us job opportunities; the need for a youth guarantee to deal with the lack of training and employment opportunities; the need, on behalf of women, for action on jobs, pensions and pay equity. These items could pave the way for a jobs-led economic recovery in B.C.

In my remarks, I wish to focus on some particular aspects of the New Democratic Party's economic strategy for the future. We recognize that the solutions of the past have to be reassessed in light of new developments. I want to focus on the crucial business sector of the economy. I know the word partnership has been thrown around rather carelessly and rather expensively of late. I think that that once useful concept can be revived from its current imprisonment in a Social Credit advertising campaign.

I also think it is now useful to discuss, and perhaps speculate about, future partnership between the business community and the Social Democrats of B.C. Our people are a part of every single aspect of life in our province. Nearly one-half of the adult population supports our political party. The business community, on the other hand, is responsible in significant measure for the economic well-being of our people and our industries. The business community accumulates

[ Page 7471 ]

vital savings and performs investment in hiring and labour relation functions.

What could come of a genuinely new partnership in the economy, and what could a new provincial government do to deal with the unemployment mess in our province? These are substantial questions, but they are questions people are asking. I think people in public life should try to answer important questions whenever they can. The first task of a new government is to face up to the situation as it is. We are in a situation today where unemployment has been used as a deliberate tool of government policy.

The restraint package did not create a resurgence in the resource industries of our province, nor did it lead to a splurge of capital investment. The reverse is true. There followed something of a collapse of taxation revenue, and the outflow of dollars for public assistance. These consequences are wasteful and ultimately eclipse any alleged benefit in controlling government expenditures.

There are good things done by Social Credit over the past 30 years. Many people are saying this is not the Social Credit Party they voted for. They are saying that the present government has done so much to disrupt the province in just a few short years. All over B.C., people are saying that a positive change could significantly expand job opportunities, which are painfully scarce in our province today. The goal of NDP economic policy is to achieve real non-inflationary economic growth with real rising wages, increased employment, expansion of existing businesses, growth of new businesses and a fairer distribution of the tax burden.

New Democrats will be speaking directly to the business community and will be asking British Columbians to support a phased approach to reconstructing the economy.

1. A jobs-first economic strategy. The goal of economic policy is full employment and decent living wages. Toward this end the business community will be asked to become involved in an intensive pre-employment and on-the-job training program for target groups among the jobless. These include youth, women and social assistance recipients. Mr. Speaker, perhaps you've seen, as I have, stories coming out of Ontario that they're going to advertise all across Canada for building tradesmen because they don't have enough in Ontario to keep up with the work. B.C. Is one of the places to which they expect to look. They fear they may have to go to Europe to get enough, but they are expecting a lot from B.C. And we have, unfortunately, a lot of unemployed building tradesmen available for them. They should be working here, in our province. A construction program is what we need here, featuring housing projects, municipal infrastructure, roads, bridges, sewers....

Interjection.

MR. STUPICH: Mr. Speaker, one road isn't enough. All we're building in B.C. right now is one highway. We need roads in other parts of British Columbia as well. Bridges, sewers, industrial parks, energy projects designed to make possible future economic growth.

2. Creation of an improved economic climate emphasizing genuine cooperation and meaningful consultation.

3. Restoration of vital economic functions in the private and public sectors by: identifying long-term labour-intensive investment opportunities and making key investments in resource enhancement, particularly reforestation, and all other elements of silviculture; upgrading of key transportation networks, including possible electrification of railways and reconstruction of primary highways; improving access to financing for British Columbia firms, especially small businesses and co-ops; improving access to greater technological capacity while easing the adjustment impact on individuals; making provision for government assistance contingent on the recipient fulfilling specific obligations in areas such as investment, employment and local purchasing — Mr. Speaker, that is what is totally missing from the government's $1 billion-plus three-year program: no obligations, just handouts; developing a coordinated approach to resource planning and development; increasing professional marketing activities outside B.C. with increased emphasis on Pacific Rim trade; exploring alternative forms of entrepreneurship such as producer co-ops and municipal development corporations; and encouraging economic development by making it easier for municipalities and co-ops to raise venture capital.

4. Long-term economic planning on a decentralized basis. Economic policy must be based on consultation and cooperation, not ultimatum and fear. New Democrats are prepared as a party and would be as a government to ask working people within their regions what kind of an economy they wish to have in the future. It is the strongly held view of New Democrats that this is the only effective way of developing a long-term economic strategy. This would include a long-term tourism development strategy based on market research and a small business development mode and stability in government policy based on a sustainable growth path.

5. Business growth. Recognizing that growth in the economy will rely in large part on established businesses, a balanced economic program will be implemented to encourage expansion of existing enterprises. While foreign investment is important, small and medium-sized firms will create more jobs in a healthy economy without costly and inefficient tax expenditure plans or tax subsidies.

6. Quality human services. Quality of life is related to the quality of services. Many of these services are essential to the well-being of people. A healthy economy requires services to meet people's needs. Education and training programs are essential investments in a healthy economic future. The New Democrats would work with professional educators to develop training and retraining programs targeted to respond to employment requirements, technological change and the needs of students. To do so, it will be necessary to end the teacher-bashing and budget slashing which have previously characterized the Bennett government's performance. Our economic future is too important to be subjected to the vagaries of quick fixes. A narrow political timetable will not serve as a substitute for the disciplined effort required to restore the economy. B.C. can be better....

Interjection.

MR. STUPICH: The former Minister of Agriculture says he watched it last time. There are some 275,000 unemployed people in the province of British Columbia today. When the NDP were in office, two-thirds of those people were gainfully employed, were taxpayers, working, living and enjoying the fruits of what we could produce in the province. It's gone suddenly downhill, especially in the last three years — before that to some extent, but especially in the last three years.

[ Page 7472 ]

We presented a program that can be implemented with the cooperation of the community. We're prepared to give not just lip-service to that talk of cooperation; we're prepared to cooperate with everyone in the province who is prepared to sit down with us to discuss what can be done for the best for the people of British Columbia. We can be trusted, because we did what we said we were going to do.

The present administration has broken every promise they ever made to the people of British Columbia, and they've gone into election campaigns breaking promises. They produce budgets that are politically inspired documents to serve the needs of the Social Credit party rather than to inform people. They cannot be trusted. Everyone knows that now.

Everyone knows they can't be trusted. More and more people are coming to the conclusion that it is indeed time for a change.

Hon. Mr. Nielsen moved adjournment of the debate.

Motion approved.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 1:00 p.m.