[ Page 7579 ]

CONTENTS

Royal assent to bill –– 7579

Ministry of Forests Act Amendment Act, 1986 (No. 1) (Bill M203). Mr. Howard

Introduction and first reading –– 7579

Budget Debate

Hon. Mr. Veitch –– 7579

Mr. Mitchell –– 7581

Hon. Mr. Segarty –– 7584

Mr. Skelly –– 7586

Hon. Mr. Curtis –– 7589

Division –– 7591

Committee of Supply: Ministry of Environment estimates. Hon. Mr. Pelton

On vote 25: minister's office –– 7591

Hon. Mr. Nielsen

THURSDAY, MARCH 27, 1986

The House met at 10:06 a.m.

[Mr. Strachan in the chair.]

DEPUTY SPEAKER: I am advised that the Lieutenant-Governor is in the precincts. There will be a brief recess as we await his attendance in our chamber. Following royal assent, hon. members, the House business will proceed in the normal fashion.

The House took recess at 10:07 a.m.

The House resumed at 10:09 a.m.

His Honour the Lieutenant-Governor entered the chamber and took his place in the chair.

CLERK-ASSISTANT: Supply Act (No. 1), 1986.

CLERK OF THE HOUSE: In Her Majesty's name, His Honour the Lieutenant-Governor doth thank Her Majesty's loyal subjects, accept their benevolence and assent to this bill.

His Honour the Lieutenant-Governor retired from the chamber.

HON. MR. NIELSEN: Mr. Speaker, I would ask the House to welcome a new secretary employed in the Clerk's office, Joan Molsberry, who is in the House for the first time.

Introduction of Bills

MINISTRY OF FORESTS ACT
AMENDMENT ACT, 1986 (No. 1)

MR. HOWARD: I move that a bill intituled Ministry of Forests Act Amendment Act, 1986 (No. 1), be introduced and read a first time now, and in explanation thereof advise the House that for years the legal authority of the Minister of Forests under the Ministry of Forests Act, has been to assist and encourage the large integrated forest companies — this to the detriment of the small operator. My bill proposes to correct that emphasis and give some legal foundation and legal authority to provide the small operator in the logging and small milling business a fighting chance and an opportunity to make a go of it.

The bill proposes to amend the Ministry of Forests Act to include a section which would say that one of the purposes of the ministry, under the direction of the minister, would be to encourage a vigorous and efficient small enterprise timber harvesting and — processing industry in the province. Right now the Ministry of Forests Act itself is void of any reference encouraging loggers or timber harvesting and concentrates solely on the question of large, world-scale, world-competitive timber-processing industries.

I can't emphasize too strongly that an operator of a small business employs more people per dollar of investment than does a large corporation, spends more of its money locally, keeps employees working longer than a large corporation does in tough times, and is generally more a part of the community.

Bill M203, Ministry of Forests Act Amendment Act, 1986 (No –– 1), introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

ON THE BUDGET

(continued debate)

HON. MR. VEITCH: Mr. Speaker, it's a pleasure to rise in this budget debate. I've listened to a lot of budget speeches — not as many, of course, as the hon. first member for Vancouver East (Mr. Macdonald) and some of the others here, but quite a few — and I believe that this is one of the most positive budgets, in fact the most positive budget, that I have ever heard.

The signs of renewal in British Columbia are evident everywhere we look. In my ministry, the registrar of companies keeps a running account of the number of incorporations, new companies that are formed in British Columbia. While this is not necessarily indicative of companies that are in business, it's a sign of confidence, a sign of people getting ready to do business; it's a sign of people doing business in the province. It's a sign of people providing jobs for other folks and making investments.

For the information of the House, Mr. Speaker, I'd like to point out that in 1983 there were 13,787 new incorporations.

AN HON. MEMBER: In '83?

HON. MR. VEITCH: In 1983. In 1984 there were 14,052 incorporations. In the year 1985 there were 15,581 new incorporations — a positive sign of economic renewal, a positive sign of confidence in this province and in this government, in the way this government has been leading and in the way this Premier has been leading this province. I understand, Mr. Speaker, that this Legislature or any legislature — in fact, the parliamentary system — is based on confrontation. There's the opposition and there's the government. I understand that process and I respect the process, but I honestly believe that in times of stress, in times when that tenuous thread of renewal can be seen, it's important, especially in this year 1986, to for once in a great while link arms for the good of the country and for the good of the province, and pull together and accentuate the positive in this great province of British Columbia.

[10:15]

I believe it's time for the betterment of all British Columbians and the betterment of those philosophies which we respectfully represent to pull together. A great deal can and indeed must be accomplished through consultation and cooperation. I believe this is the key to the future; I believe it's the key to economic renewal and the key to real jobs for our people in this province and in this country. It's time, rather than continually accentuating the things that divide us, to reach out and find those things in British Columbia which can pull us together.

In this time of Expo I believe we must and we will develop a new consensus in British Columbia which will carry us through not only the eighties, but beyond and into the next century. It's important. A new consensus can do more than anything else, in my mind, to reinvigorate our economy and ensure we'll be able to afford a generous standard of social

[ Page 7580 ]

services and an improved quality of life for British Columbia. A new consensus is definitely required.

I understand the process of confrontation of opposition in government, but I have never found a time in my short lifetime when negative thinking brought positive results. Positive thinking always begets positive action. I honestly and sincerely believe that this is a positive budget. You know, we've got to be salesmen and saleswomen for British Columbia. We've got to quit going around the country and trying to divide one end of the province from the other or one side from the other. There's no time for that in this province, and in fact we're doing a really great disservice to this province and to this country and to our way of life when we....

Interjection.

HON. MR. VEITCH: Well, I'll forgive you if you'll quit it. I'll forgive you. I forgive you before you ever started, because perhaps you don't know any better.

Especially during this Expo year, we've got to pull together. We've got to put on a positive face for the world, and we've got to keep it on during the time that follows Expo, and we've got to move it through into the 1990s, because we can have all of the lumber in British Columbia, we can have all of the coal in the mountains, we can have all of the minerals — and this is something that the opposition doesn't seem to understand through their philosophy.... You know, this is potentially valuable, but it's absolutely useless until you take it somewhere and sell it to someone and produce value with it. That's done through two human ingredients: salesmanship and confidence, in that particular order. That's the way it's done.

I remember recently trying to go to sleep, and I picked up a copy of Charles Dickens's A Tale of Two Cities, and I remember his opening line. He said: "It was the best of times, it was the worst of times." Now I know he was speaking at that time about the French Revolution, but I honestly believe that the last few years that we've experienced in this province and this country have been both the worst of times and the best of times. They've been the worst of times because the international recession has sapped the resources of our industry; they've harmed us. They've been the worst of times because families have had to suffer and because businesses have had to suffer. They've been the best of times because they've caused us to examine the way we have been doing things over the years.

We've found that we're in a new economy, we're in a new beginning, and that the worst of times.... From that bad circumstance ought to come a new beginning and will come a new economy. I'm confident of that. Now we've got to turn the lessons of the worst of times into opportunities. Someone once said that if someone throws you a handful of lemons, what do you do about it? Do you cry about it? Well, you make lemonade. You do the very best you can with it.

We've learned a lesson. You know, one of the worst things that can happen to a country, to a jurisdiction, is to be consistently looking back for solutions into the past. It doesn't mean that we throw away the wisdom of the ages. We never do that; we build upon it. The worst thing that can happen to any jurisdiction, to any people, is to be blinded by lack of forward vision. If we consistently carp about the things that are wrong in this country, that are wrong in this province, that message will spread out to the world and will be poor salesmanship.

Marshall Field, who was a great retail magnate in the United States, used to tell the story about the last three feet. Marshall Field used to say that in an economy, things don't usually break down from the mines out to the mill or from the mill out to the factory or from the factory out to the retailer or from the factory out to the wholesaler or from the wholesaler out to the retailer. He said they break down in what he used to call that last three feet. He said that's the distance across the counter. That's where selling is done or it is not done, and that's where confidence is imbued or it is not imbued.

It is no different in this province, and it's certainly no different in this country. We've got to be better salesmen for British Columbia. We've got to be better salesmen for Canada. That's how we'll succeed. We're not going to succeed by running around this province and dividing the north from the south or the east from the west. That is counterproductive, and not in the best interests of British Columbians.

Mr. Speaker, this budget message is vision coupled with faith. Faith is — and always has been — the evidence of things not seen, and it takes people to translate faith and vision into reality. It takes confidence; it takes a will. This government has this will, this faith, and that is exemplified in this wonderful document that the Minister of Finance has brought to the people of British Columbia: faith in the potential of this country, in the potential of this province.

I want to talk to you for a minute about potential in my own particular riding of Burnaby-Willingdon. We've just recently completed the wonderful SkyTrain opportunity. I'm not completely sure of what that cost, but somewhere around the $900 million mark — somewhere in that area as you take the thing through to its final conclusion. That provided jobs, that provided one of the most innovative transportation systems you will see anywhere in the world, and in fact we're selling that.

We could have left it right there, but there are people around who saw the potential that was going to bring. I know that sometimes the word megaproject is taken to have a wrong meaning, but Burnaby now has its own megaproject, and thanks to SkyTrain it's called Metrotown. British Columbia's state-of-the-art SkyTrain is turning Metrotown in Burnaby into a retail development boom. It is attracting multimillion dollar developments and creating hundreds and hundreds of jobs, Mr. Minister of Finance. You see, what they're doing there is selling; it's that last three feet. They're turning potential into opportunity into reality. Burnaby's Metrotown is one of the most attractive merchandising areas in the whole of that wonderful lower mainland. In fact, proposed developments — those under construction and the completed developments — total more than one billion dollars, more than the total cost of the SkyTrain development itself. That was brought about as a direct spinoff of SkyTrain, Mr. Minister of Finance. Metrotown is ideally located in the geographic heart — right in the centre — of the lower mainland, with a population of 250,000 within a three-mile radius. When the SkyTrain system opened in January, Metrotown became just 15 minutes from downtown Vancouver.

In recent months Metrotown has been attracting all sorts of development proposals. Cal Investments Ltd. Is spending $100 million to link the Sears store on Kingsway with the new Woodward's store and 200 other retail outlets called Metrotown Centre. This development is scheduled to open next August. Cambridge Shopping Centres Ltd. of Toronto is awaiting the necessary local approvals, which I understand

[ Page 7581 ]

are forthcoming, for a $140 million development immediately west of Metrotown Centre. Burnaby developer John Georgilas has a $100 million proposal currently under review by Burnaby planners. His development includes a hotel, a library, cinemas, a department store, 50 retail outlets, Save-On-Foods and another larger store. All of this is on top of an estimated $250 million worth of Metrotown work in the past four years, and another $450 million worth of commercial development is planned. That is confidence. That is turning potential into opportunity into jobs for British Columbia.

On top of that, as a direct result of actions taken by the Social Credit government of British Columbia, Polygon Properties completed a $22 million, 20-storey office tower in Kingsway last year called Metrotown Place, which is now 57 percent leased. Tenants include the Greater Vancouver Regional District, National Life and the B.C. Housing Management Commission. The company plans to build another 10-storey tower in Metrotown next year because of the demand. That's a perfect sign of confidence and renewal in British Columbia, and that is exemplified in the heart of the lower mainland, which is Burnaby.

There are a lot of construction jobs and development. As big as this is.... Just think of the permanent jobs that will come — all those retail stores, the hotels, the theatres and the office buildings will be providing permanent employment for British Columbians.

Developers have been interested in the Metrotown area for some time, but the announcement of ALRT, or SkyTrain as it is now called, caused this sleeping development giant to wake up in a very big way for the good of British Columbia. It was the spinoff, the direct result of government action, a direct result of SkyTrain. With the help of the provincial government and working in cooperation with the municipal governments and private enterprise, Burnaby is on the move, Vancouver is on the move and British Columbia is on the move. Burnaby, I'm proud to say, was the first municipal government in the province to sign the provincial-municipal partnership agreement, and it is paying off in large measure. We're on a roll in Burnaby, and it's going to get even better in times to come.

There's no shortcut to obtaining permanent jobs, either by handouts or make-work projects. The way to create jobs, as we've pointed out here, is to provide catalysts for investment, Mr. Minister of Finance, and that is what this budget is all about. It's the gas and oil of the economy that makes things happen. Those investments must take place in plant and in equipment and most importantly in people, offering them the skills and training they'll need in the new economy that's being built in British Columbia. I'm happy to say that the program for excellence in post-secondary education will accomplish just that in British Columbia. The young people who are coming into the marketplace and taking their training now, Mr. Speaker — and you've had some experience in this area — are going to thank this government and this minister and these times for many, many decades to come.

We've got a lot of things to do in this province. We've got to create new wealth, we've got to create new investments. During the throne debate I mentioned that my ministry would soon be going out to the people of British Columbia and talking about new forms of investment and talking about how we can better increase the investment and the investor potential in British Columbia. We've got to have that investment. We are gaining that investment. Confidence is here in this government and in this budget and I believe that that is a major step along the way.

[10:30]

[Mr. Ree in the chair.]

We're seeing now and we're feeling the benefits of our past efforts, and this budget provides new measures that will bring excellent growth in the coming years. In fact, economic growth in 1986 is expected to be the highest in five years. The reason is that growth in the economies of the U.S., Japan and western Europe will increase the demand for our expertise and for our products, providing we have the opportunities, the vehicle and the proper investment climate and providing we treat that great opportunity that we have, Expo, properly and use that to its fullest potential to turn that potential into opportunities. That's what it's all about.

There are key indicators, as I mentioned to you before retail sales, housing starts, manufacturing shipments — that show established upward trends. There's no question about that. Our government's actions over the past few years to strengthen the long-term competitiveness of our producers are having a significant positive effect for British Columbians now. These were the worst of times, these were the best of times. We've turned adversity into opportunity. I have faith in British Columbia; I have faith in this government; I have faith in this budget; I have faith in this Minister of Finance; and I'm very proud to be a British Columbian.

MR. MITCHELL: Mr. Speaker, I do have some prepared notes, but I can't help but reply to the last speaker. Maybe I should kind of run back over history just to bring him up to date. I know he had a short break in his political career in this House.

HON. MR. VEITCH: Not as long as yours.

MR. MITCHELL: No, not as long as mine.

You know. he talks about confrontation and that we've got to have cooperation, as if he's trying to bring in something new. This Legislature — the British parliamentary system that we know of and that we work within — was set up to do just that. Not only does it have a legislature, but it has parliamentary committees, and these parliamentary committees are not something that were invented by the NDP; they are something that were laid down years and years ago. But it's the Social Credit government that has stopped their utilization for getting the members from all parties to sit down and work together and to go out and talk to the experts, to the community and to the people who have ideas. And it's this Social Credit government, started by the previous Social Credit government back in 1953-54 and from then on, that has taken the parliamentary system that we believe in — that we talk about — and reduced it to nothing. For a minister of the Crown to get up when we, for the seven years that I've been here and before I got here, have been asking the government to get away from their dictatorial cabinet domination of the parliament and to listen to what the people of British Columbia are saying, to get some input from all sections of the community instead of doing all the big mistakes.... They feel that if there is a problem, you throw money at it. That is the last thing you need to do. You need to use your economic wealth in a proper, direct and constructive manner.

I listened to him talk about all the new shopping centres in Burnaby. I think he should sit down and talk to the member

[ Page 7582 ]

for Nanaimo, where they have overcapitalized with shopping centres. Who does it affect? It affects the small businessman who is already established in Nanaimo.

HON. MR. VEITCH: We shouldn't have growth: is that what you're saying'?

MR. MITCHELL: No, I say there should be proper growth. There should be constructive growth, and this is what economic planning and common sense would give us.

Interjection.

MR. MITCHELL: We have all kinds of growth. You have the growth that the previous speaker was talking about, a growth in shopping centres. We have a growth in coal production. We have a growth in coal production when we opened up the northeast coal, a billion dollars of taxpayers' money. But at the same time they are cutting back employment in southeast coal. That billion dollars — we need investment, but we don't have to go out and keep on doubling up on facilities that we already have. The public know this; the economists know this; the people who were planning northeast coal knew this.

This is why this House and the NDP have been pleading for cooperation: because it's the little worker who gets trampled on and loses his house, loses his investment in the southeast coal because he is following the myth that throwing a lot of money in this end and throwing some more money in the other end will solve the problem. It never solves the problem.

I have to concede that it looks good on your Social Credit TV ads that are paid for by the taxpayers. You keep on selling these lies, lies, lies that we have a balanced budget. We have all these simple answers, but they're not true. You know it is not true. You remind me of an errant husband who is coming back to his wife and pleading for forgiveness. That's what you are doing. You're asking for the cooperation that this side of the House has been pleading for for the benefit of the people of British Columbia.

I say, Mr. Speaker, it's too bad the public do not believe you any longer. You can ask for cooperation now, and we know that if the unfortunate thing ever happened that this government was re-elected, then you would still go back to your cabinet-dominated Legislature and you would still stand up like the rest of the people do. They know that some of these budgets are wrong. They know they are false, but they'll stand up, and they'll go through the charade of saying: "Oh, it's the best budget we've ever seen."

Let's go back over some of the budgets. Let's go over forestry. In 1980 the Minister of Finance promised to the people of British Columbia that the forest industry needed to be restructured, that it needed to be replanted; we had to get into the silvicultural industry. In 1980 they talked about $147 million, and then in 1981 they talked about $120 million. We were going to have a five-year plan that was going to put $1.4 billion into forestry. And the people believed them.

There was a start. We had what was called EBAP, a program that topped up unemployment insurance, and it had unemployed people out working doing thinning in the forest, renewing the fire-roads, renewing the drainage, protecting and tending the forest. It was a good program. It was a beginning. It was something that should have been brought into operation in 1949 when British Columbia passed legislation setting up sustained yield in the forest industry of British Columbia. But it was never in operation completely. They had pilot programs here and programs somewhere else, but basically the forest industries of British Columbia went in, they creamed our forest and moved on. Even now we're only planting about 25 percent of the backlog left by companies in the past.

I don't blame the companies. I blame the years and years of Social Credit government that did not enforce the laws of the province and did not look after the resources that they were entrusted to look after. It all disappeared, all that program. What happened in 1983? Before the election they were talking all over the province about how they were into silviculture, how they were looking after our forests. I know that in my own riding Social Credit went through to the crews working on EBAP and said: "Don't vote for the NDP, because they will abolish EBAP." Who abolished EBAP, Mr. Speaker? The first month after we came back into this Legislature, Social Credit abolished EBAP. They abolished the protection that they were giving to provide compensation and some of the fringe benefits. They abolished their participation in a program that they had campaigned on, saying they were going to do something for forestry.

Now we come back with $20 million. We've gone from $1.4 billion down to $20 million. They're also saying that the companies are going to put in $20 million, and that the federal government and the unions are going to put in money. But they have yet to go out and consult with the people they've said in the budget are going to participate. The Minister of Finance gets up with a budget that represents the government of British Columbia, and indirectly the thinking of this Legislature, and he hasn't consulted with the people he says — in the budget — are going to put money into it.

The public of British Columbia no longer believe and have faith in the statements that come out of this House. Indirectly, when they have that lack of faith, it rubs off on us. Do you remember, Mr. Speaker, the night we stayed right over until morning? We talked about jobs — jobs needed right now. I believe that 19 positive job creation programs came from this side of the Legislature. That was the cooperation we were offering, and never once were any of these programs put into shape. The public is getting fed up with promises and promises, and then a complete lack of any remorse when they are completely forgotten.

[10:45]

I have one in my own riding. You might not think it's important for your riding, but it was a promise made nearly every year after I came in in discussing a certain purchase with the Provincial Secretary — the purchase by the provincial government from the CNR of the CNR right-of-way. This was an idea that started in 1975, when the CNR decided to shut down the railway that ran from Victoria to Deerholme up in the Cowichan Lake area. They offered that right-of-way to the provincial government. At that time Jim Lorimer was the minister of municipalities, and he studied it and said on behalf of the province: "Yes, we should purchase this right-of-way. We should use it for future light rapid transportation. In the meantime we can purchase it and use it as a recreation corridor, because it ties up Saanich, Victoria, View Royal, Colwood, Sooke" — right up into the northern part of my area.

When Social Credit came to power they supported that idea. Each year when we were in the Provincial Secretary's

[ Page 7583 ]

estimates, I would get up and talk to the Provincial Secretary and I'd say: "How are the negotiations going?" Every year he would assure this House that they were working on purchase of this right-of-way — and it was going to be used by the people. Eventually the province spent $1.5 million and purchased this right-of-way. But over the years that this was under negotiation, the CRD had made plans to incorporate that particular right-of-way into the parks system. Organizations within the community — the greenbelt and trails committee — made studies, and the integral parts of all their trail systems that run from Swartz Bay out to Port Renfrew and up into Cowichan Lake were designed around the acquisition by the province of the CNR right-of-way. Some beautiful literature was put out. A lot of thought by the community has gone into utilizing this resource. This resource was not the property of the province; it wasn't the property of the CNR. It was the property of the people of this province. What happened? It was purchased, flipped from, I take it, the Provincial Secretary or Lands, Parks and Housing to the Highways and Transportation ministry.

What was the first thing they did? This is something where the whole community had been working to make a recreation corridor. The first thing they did was go out and tear down all the trestles. I don't mean the big ones that someone may jump off, or anything else, but the small trestles that made up the continuity of this particular right-of-way, this natural recreation corridor. As you know, Mr. Speaker, a rail right-of-way has a nice even grade. All the trestles were in. Sure, some of them needed some repair, but they went in and tore them all down. Then at the same time, when the Capital Regional District had agreed to take over all liabilities on that particular piece of property, to lay out and incorporate it into the park system, the trail system, this government went out and gave leases to individuals throughout the Metchosin, Colwood and Sooke areas. They literally chopped it into pieces. They gave leases out.... I don't say to their political friends, but I know, Mr. Speaker, that if you had the power to go in and check some of the political memberships, you would be surprised who got them. Some of them were legitimate. Some of the leases where they had rights-of-way into their property, or leases for water lines, were justifiable, but some of them were very questionable.

This is the part that shocked my whole Western Community. The people out there cannot trust this government; they cannot believe them. It's absolutely shocking, the disrespect that a government has among the people. They say one thing time after time. They promise the people that they're going to use the CN as a right-of-way, and then they turn around and destroy a lot of the investment, the trestles. They never consulted with anybody. They went in and tore out the trestles, and instead of one long potential trail, they chopped it up into little pieces. And you wonder why people who were strong Social Crediters are phoning me and saying: "What happened to that particular group?"

MRS. JOHNSTON: What a bunch of baloney!

MR. MITCHELL: That is not. You'd better go out and talk to your Social Credit group.

The group they really hit is a group I've been working with — not for any particular political reasons, but because I believe a certain thing should have happened. In British Columbia, $185 million goes into what is commonly called the horse community — people who keep horses for riding and recreation. Out in my own community we have a lot of people who keep horses. We had the tragic situation where, because of children riding these horses on the roads and the danger.... One was killed, and one, because of a horse being spooked by a car, ended up a quadriplegic. Because I have worked with the families on the health end, I understand the danger of having horses on the road, and as an ex-policeman I know something about traffic. I spoke to many of these groups and said: "We have the CNR right-of-way. It has been abandoned. Get your groups, your horses, up on that right-of-way where it's safe, and you're not going to have any problems."

Over the last seven years, parts of that CNR right-of-way have become a bridle path that connects all the way from Saanich right through to Sooke. It was common sense. It didn't cost me anything to suggest that they trespass on the CNR. It was a commonsense procedure. I know in my own heart that because those horses were moved off the highways, some child today is alive, or not a cripple. Maybe this House will say: "Oh, no. It wouldn't have happened." But I know it would have, because I have seen horses on roads; I have seen highways.

This was one of the ideas that everyone believed in. I used to say that the Provincial Secretary assured me in the House.... I sent out what he said in the House, in Hansard. Groups like the Greenbelt Society met with people in the ministry. Everyone had one idea of what was going to happen to that right-of-way. But it didn't. Mr. Speaker, there are a lot of people out there who are disappointed with their own party, Social Credit. They were disappointed because the promises made to their MLA and by ministry staff to their workers, their committee members, were not kept. They are shocked that a ministry trusted to negotiate a deal with the CNR, to preserve the assets that they spent $1.5 million on, would go out and systematically destroy some of those trestles — they literally destroyed them — without any consultation at any time with the people they were negotiating with or the community. Today there are areas where they have fenced across that, because they have given out leases. People feel that if they've got a lease from the government — and I don't care if they're paying a dollar or a hundred dollars an acre — they've got the right to fence it off, and they are fencing it off. Do you think, Mr. Speaker, that the people who were involved in that trust this government?

When I heard that last speaker say, "We've got to have cooperation. We've got to talk to people...." We've been saying that. We've got to sit down and talk to people. We can't continue to use the dictatorial power that this cabinet has taken on itself, and continually roll over the people of this province and the solid, constructive suggestions that come from this Legislature, from the official opposition, and then expect the public to believe it.

As I said earlier on, the MLAs from Vancouver Island have talked continually about the need for some long-term, thoughtful development of our highway system on Vancouver Island. A good highway system in my riding is of no value if it is not continued to Cowichan-Malahat, Nanaimo, Comox, Port Alberni, to the North Island. We have to look at the whole of Vancouver Island. Every one of us has pleaded with this government to widen this highway. As I have said in Highways estimates, the only time we get any money in my riding is a month before an election. During the last election they dropped $2 million that the poor old Highways ministry

[ Page 7584 ]

were scrambling around trying to spend. You have to have some long-range development of Vancouver Island. The area that runs through my riding, through View Royal and Langford, has to be four-laned. This is a main highway; it's the size of a feeder line.

In 1952, when Mr. Gaglardi first put that road through, it was a lot better than the highway that was in place at that time. It was a straight highway; it bypassed the communities of View Royal, Colwood and Langford. It did what it was supposed to do. It was part of the highway program. But over the years traffic has built up, and it has to be widened. The only widening that happened was when the NDP were in, and they put into operation the plan of widening it from Douglas Street out to the Thetis Lake crossing. That's all that has ever happened. Because that was in the works, the Social Credit government did continue it — all the plans — and the money was allocated. I give them credit for that; they did carry out that part. But what happened? That was the end of it.

If we're going to have any highways development for the province.... Vancouver Island is part of the province. There has to be an equal share of the revenues that come out of this province. Vancouver Island — what do they get? It's like $14 per capita for highway construction, with the rest of the province getting in the hundreds of dollars — not taking into account the major Coquihalla Highway or the Annacis bridge, but when they get into...the general highway development Vancouver Island has been going without. As we on this side of the House have been saying time after time, we are not getting our fair share. Now the Association of Vancouver Island Municipalities have got on our bandwagon too. They know that what we have been saying is right and what this government has been doing has been wrong.

[11:00]

The public do not believe them. I quite believe we'll have programs that will promise highways from Esquimalt right through to Port McNeill, but I'm saying again this government lacks the innovative ideas that are going to create jobs. They lack the foresight. They just run from one election to another; they are not looking ahead. I know one issue that I raised here for the CNR that could have been — with some thought from the parks branch, from the highways branch, from Labour — a job creation program that would have had people working so the public gets some return from money they are putting out on UIC, some return that is going out to keep people on welfare doing nothing.

There have to be some innovative ideas. There has to be some thought, and there has to be some compassion for those who are paying taxes and for those who, through no fault of their own, are out of work, haven't had the opportunity of training and haven't had the opportunity of participating in and building British Columbia into a strong, viable human place, and who are getting very cynical about the attitude and the propaganda they see on TV day after day.

[Mr. Strachan in the chair.]

They know it's taxpayers' money. They know that they are wasting the taxpayers' money for their own selfish political policies. They know, and they don't believe you, Mr. Speaker. Pardon me — not you, Mr. Speaker; they don't believe the government that is misusing their resources, that is misusing their funds, that is misusing their future. I say in closing we must have the cooperation that the previous speaker mentioned, but it has to be honest cooperation.

HON. MR. SEGARTY: Mr. Speaker, I'd like to take this opportunity, if I may, to welcome all of the young people who are in the gallery today, and I am sure they really enjoyed that very thought-provoking speech of the member for Esquimalt–Port Renfrew. I am pleased to take my place in this budget debate because I see it as a continuation of the policies of economic development and activity that have brought British Columbia, over the course of the past 30 years of Social Credit governments in British Columbia, to great prosperity and great opportunities on the part of all British Columbians.

If I can, we can go back in history a little ways. Thirty years ago the people of the interior of British Columbia would always say that they were "beyond hope, " because there was no highway expansion into the interior of British Columbia, and there was little opportunity for industry in the interior to get their products to market, whether it was coal, copper, lead, zinc, pulp or indeed other commodities. It was extremely difficult for us in the interior of British Columbia to be able to move those goods and services from the interior to export markets.

We should know that natural resource development has been the backbone of many interior communities in British Columbia over the course of that 20 years, because of sound fiscal policies on the part of successive Social Credit governments for a period of 30 years in British Columbia. When industry would go out and find a new mineral that was in demand in the world, they would go out and find a market for that product. They would come to government and sit down with government, and government would over the course of those discussions provide the normal services to those communities where that industry was going to be located, such as roads, hospitals, schools, rail facilities — whether it was provincial or work with national railways to get them developed — ports, harbours and so on.

That is what has led to the development of British Columbia as a large land mass "beyond hope," if you will, and so I took as a member for the East Kootenays at the interior of British Columbia as being on the right side of Hope in 1986. Over the course of debate on the budget and, indeed, the throne speech, we heard an awful lot about resource development in British Columbia. We talked an awful lot about the development, particularly, of our natural resources, such as copper, lead, zinc, coal, lumber and so on.

If we followed through with what I said earlier on, what happens in the international marketplace is that the customer decides who they want to buy their product from. Once that decision is made, regardless of where that industry is located in British Columbia, our government has generally responded positively to the needs and aspirations of the communities and that particular resource development, whether it has been in Granisle, Logan Lake, Elkford or Tumbler Ridge.

Over the course of the debate there was a lot of debate about coal production, and the debate centred around coal production only in British Columbia, as though we were the only province or location in the world that is involved in the processing, extraction and marketing of coal. For the members' information, Mr. Speaker, I'd like to point out that there is a lot of coal production taking place in the states of New South Wales and Queensland in Australia, in South Africa, in the United States, in Russia and in many other countries throughout the world. All of those companies located in those countries are competing with natural resource development companies in British Columbia.

[ Page 7585 ]

I want to say that over the course of the past few years industry in British Columbia, particularly those companies that have been involved in the extraction, processing and marketing of coal, even through the difficult times that we have been through, have done an exceptionally good job of marketing their resources on behalf of the people, working with their employees to reduce costs. For example, Mr. Speaker, British Columbia in 1980 exported 10.2 million tonnes of coal. In 1981 we exported 11.7 million tonnes of coal, in 1982 some 11.8 million tonnes, in 1983 some 11.5 million tonnes, and in 1984 we exported 15.3 million tonnes. So I would like to take this opportunity, Mr. Speaker, to congratulate all of those resource companies involved in the marketing of coal, and I would like at the same time to congratulate the employees of those companies who have recognized the difficult times that their employers are in in this very difficult and competitive world economy in maintaining markets for existing contracts; and yes, for going out and finding markets for new contracts. In fact they've been able to double the export of coal from British Columbia over the course of the past few years. They're to be congratulated for that, along with the government of British Columbia, because the government has generally responded too, over the course of the past few years, in recognizing the difficulty that all of our industry is in — small business and large — in their efforts to reduce taxation and costs on the people. The Minister of Finance in particular should be congratulated for the fine job he has done in that area, along with all of the people in British Columbia who recognize the difficult times we're in and are willing to take less during these difficult economic times.

The members, too, would say: "Well, coal is coal and that's really all that matters." For the members' information, Mr. Speaker, there are two types of coal that we move in abundance. Industry moves from British Columbia approximately 4.1 million tonnes of thermal coal a year. They've been very successful over the course of the past few years in exporting that coal. However, they've come under extremely tough competition, particularly in the last two years — competition from other sources of energy such as nuclear energy in Ontario and other places throughout the world, hydroelectric plants in Canada and in other areas of the world, particularly from the events over the last few months which have seen the reduction in the cost of crude oil with forecasts showing that it will go down to approximately U.S. $10 a barrel; and the lower Australian dollar value and South African dollar value has placed an extremely difficult pressure on thermal coal production and exports from British Columbia. We all know, too, Mr. Speaker, that 70 percent of the world's hydrocarbon energies are in the form of coal, so in the long run coal without question will have a major role to play in future energy sources. Programs that are convenient today to allow steel-producers or energy utility companies to move or convert from coal to oil will be short-lived, but in the meantime it is putting extremely heavy pressure on thermal coal production in British Columbia and indeed throughout the world. If this pressure continues up to the end of the 1990s, we could see a reduction in thermal coal production throughout the world in the amount of approximately 25 percent. Indeed, if it should continue to the end of the 1990s — which is unexpected, but if it does — we could see reductions in thermal coal production in world capacity in the amount of 50 percent. So it is extremely difficult in the area of thermal coal production, and it does effect one area of British Columbia in particular, southeastern British Columbia, because they are the largest producers of thermal coal for world markets.

Metallurgical coal, on the other hand, Mr. Speaker, has without question a very prosperous future for British Columbians in particular. As I said earlier on, British Columbia companies have done exceptionally well in the export of thermal coal. Companies have secured markets for metallurgical coal in Japan, Korea, Taiwan, Brazil, France, Belgium, Denmark, Sweden, Hong Kong and other consuming countries of thermal coal, those countries involved in the manufacturing of steel. We have exported from British Columbia approximately 15.3 million tonnes of metallurgical coal to those countries.

[11:15]

But that's small if you look at the the opportunities that are available for British Columbia companies to increase their potential for world exports in the area of metallurgical coal. For example, the potential in Korea is 7,400,000 tonnes of coal, and if you look at what we export at the present time, it is small in comparison: we export approximately 1.6 million tonnes of coal to Korea. So the potential there is tremendous for British Columbia companies. Brazil too has a potential of metallurgical coal prospects for British Columbia companies in the amount of ten million tonnes of coal. Again, we only export to Brazil at the present time short of a million tonnes of coal. Taiwan is another opportunity for British Columbia companies, where the potential is three million tonnes of coal a year and we only export to Taiwan approximately 0.6 million tonnes of coal.

So you see, the potential for coal development and expansion of our industry in British Columbia is tremendous. What we've got to do as a government is continue what we've been doing over the course of the past few years, and continue our policy of tax reduction on industry in general in British Columbia. I know that if we continue that policy, in the long run we will be able to expand economic development opportunities throughout all of British Columbia. In particular, we will be able to expand our share of the world market for metallurgical coal over the course of the next few years by continuing on the policies that have been established by the Minister of Finance and the government of British Columbia.

But how do we succeed in this process? The members of the opposition would say that the way to succeed and even to maintain our presence in those markets is to build a wall around British Columbia, as though we were the only province in the world that was marketing coal and indeed as though the only companies in the world that were involved in the marketing, extraction and processing of coal were located in British Columbia, or to close our eyes to the real difficulty that all of us face in British Columbia as a result of tremendous pressures brought on by reduced Australian currency, reduced South African currency, reduced oil prices and pressures from other areas.

Mr. Speaker, it is my belief that industry in British Columbia has succeeded over the course of the past few years because they have developed a very aggressive marketing policy for the goods and services that are exported from British Columbia. And yes, in spite of the very difficult economic times that we find ourselves in in British Columbia, and the tough competitive position that those companies find themselves in, particularly in the area of coal, they have been able to go out and double their exports from British Columbia increasing employment opportunities, in fact

[ Page 7586 ]

doubling employment opportunities over the course of the past few years for British Columbians. They're to be congratulated for doing that.

This budget continues to address the structural problems of our economy, continues to focus in on tax reduction, and while our provincial government has done its job and will continue to do its job, it is not just up to the government of British Columbia. Municipal governments too have a responsibility to continue their efforts of reduced taxation on industry and business in their communities, because quite clearly for every time you increase the mill rate in a municipality like Sparwood where it is $30 on the local property tax increase in that one mill rate, it is $100,000 at the mine head. That translates into the jobs of two employees at the Balmer Mine, and that is something that British Columbians cannot afford to continue to do these days.

So municipalities too, along with other groups and organizations throughout the province, will be encouraged to evaluate their needs versus their wants. If there is a genuine need, such as in the area of health care, education and human resources programs, employment opportunities for our people, then this government of British Columbia will respond, in partnership with other organizations throughout the province, to address those needs. Those needs again, Mr. Speaker, are health, education, human resource programs and employment opportunities for our people.

That is the course that our government has set for many, many years, Mr. Speaker, and particularly over the course of the past few. Municipal governments have to join in that partnership, and most of them have throughout British Columbia. But it's not just good enough to join in that partnership on paper alone; it has got to be joined in their deeds. I would encourage municipal governments to continue to reduce their costs, to continue to reduce costs on our health care facilities, to continue to reduce costs on our hydro operations, on our workers' compensation.

And yes, Mr. Speaker, I was particularly pleased to see in His Honour's throne speech, and indeed the budget too, opportunities for the Ministry of Labour again to enter into a partnership program with industry and unions in British Columbia through the development of a preventive mediation program. The development of a preventive mediation program, in my opinion, will help industry and unions change attitudes with respect to their role in economic development and their role in the workplace.

I've got to say, Mr. Speaker, that over the course of the past year I have visited many sites across British Columbia, particularly industrial sites, and I have indeed been impressed with the level of cooperation that exists between employers and employees sitting down and working together, talking about issues that many years ago I would have thought would be very, very difficult for them to resolve. But in 1985 and 1986 there is a new realization on the part of both that they've got to work together, that they've got to survive together, and that if they're going to succeed as partners, yes in enterprise, they have to recognize and work out their differences, and help each other secure markets for the products, goods and services that we sell in British Columbia.

The Leader of the Opposition and the opposition party have talked about the need for cooperation, the need for consultation and the need to encourage people to work together. Yet all I have heard over the course of this budget debate, and indeed over the course of His Honour's throne speech, is putting northeastern British Columbia against southeastern British Columbia, putting the coast of British Columbia against the interior of British Columbia, putting one group against the other. Quite frankly, Mr. Speaker, they have called the young people of British Columbia the "lost generation of British Columbia."

I want to tell you, Mr. Speaker, that over the course of the past year I have visited with many young, outstanding British Columbians. I have visited on the shop floor with industry and unions across B.C., and I want to tell you that there is a level of realization on the part of all of those groups, clubs and organizations in our province that if we're going to succeed as partners, if we're going to continue to make British Columbia a great place in which to live and to continue the high standard of living that has been developed in British Columbia over the course of the past 30 years, we have to work together to succeed. All of the programs and policies of our government have been designed to assist those parties — not to do it for them, as the Leader of the Opposition would want us to do, but to assist those parties — in reaching resolutions to their difficulties, in working out their problems, and assisting them in solving their problems to meet the very tough international marketplace. In spite of all of the difficult times that we've been through — I've been in Canada 20 years this month; I came from another country 20 years ago — tough times for us in British Columbia means doing without what my mom and dad never really dreamed of having. When you look at other areas throughout the world, where one-third of the world is rocked by revolution, hunger, poverty, disease, the other one-third is starving to death, while in British Columbia and Canada we live better than 99 percent of all of the people in the world, we have an awful lot to be thankful for in this province. I would commend all hon. members to look around them — that's not Fantasy Island when you look on television and see people starving to death in other areas of the world. We have to look at what is happening throughout the world and recognize that we in British Columbia and in Canada have an awful lot, in 1986, to be grateful for.

Expo 86 will assist resource companies and unions in British Columbia to meet their customers here. It will provide an opportunity for us to bring those people to British Columbia who will buy the goods and services of the people of our province. It will give us an opportunity to take those people into the regions of British Columbia to show them that we can work together, that we can solve our problems and get the product that they want to buy to market, and that we can compete with any competitor in terms of price, reliability, supply, service and product.

I'm confident, Mr. Speaker, that when British Columbians know what the challenge is that lies ahead, they will be prepared to meet that challenge. This budget will assist them in many ways. I'm standing in support of the budget, and I would encourage all hon. members to support this budget who believe in partnership, cooperation, consultation and participation on the part of all groups, clubs and organizations in the development of a sound, prosperous economic British Columbia.

MR. SKELLY: Mr. Speaker, the Minister of Labour wound up his speech by saying that he would encourage all groups, clubs and organizations to support this budget. I was just wondering if that was the speech that he had prepared for the Legislature, or if it was prepared for somebody else.

I'd like to talk a little bit about progress today. I just want to hark back to the speech that was made by the Minister of

[ Page 7587 ]

Consumer and Corporate Affairs (Hon. Mr. Veitch) when he stood up in the House. He quoted the first line from A Tale of Two Cities, and I think he was actually quoting Dale Parker from the Bank of British Columbia, who had cited that quote at the meeting of the CGAs at the Empress Hotel a few days ago. Mr. Parker, who I believe had actually read the book, quoted the first two lines which say: "This is the best of times and the worst of times."

Mr. Parker, I think, did give a balanced view of the British Columbia economy. He indicated that there are some difficulties in the economy, and he talked about having 45,000 fewer people working today than were working back in 1981, before the recession hit. He also talked about the problem of net out-migration from the province. I tend to trust Mr. Parker's figures, because he talked about a net number of people leaving the province in the last year, people who are looking for opportunities elsewhere in Canada.

If we are going to make this province a better place — and all of us in this building, of course, want to make it a better place — it requires an understanding of what's happening in B.C. It requires an understanding of the good things that are happening, but it also requires a recognition of the bad things that are happening in this province. Otherwise, Mr. Speaker, how could we make them better?

It does require an understanding of the problems. Our concern in the throne speech as well as in the budget speech is that this government seems to lack an understanding of what's happening with ordinary British Columbians. They seem to misunderstand or not to know what's happening to ordinary working people out there, what kind of problems they're experiencing from day to day. In order to do something about those problems, Mr. Speaker, you have to have that basic understanding.

This government also does not seem to be above doctoring the figures in order to make things seem much better than they are. And that's a concern that we have: that this government simply cannot be trusted in the way they present the economy to the people. I want to give you an example from that minister's speech. He talked about the number of business incorporations in British Columbia in '85 over '84: some 14,052 in 1984; in 1985, 15,639. Let's check our figures. I'm reading from the economic indicators out of the budget speech. I'm sure the minister himself is reading out of the budget speech economic indicators.

But where do we stand with respect to business incorporations over the past five years? How do we compare now to where we were before the recession hit this province? Let's take a look at that, because I think people in the business community want to understand how far this province has come and how far it yet has to go before it reaches the level it was at back in 1981. The number of business incorporations in 1981 was 23,368. There were 8,000 fewer business incorporations in this province last year over the year before the recession hit this province. We've got a long way to go before we catch up to where we were in 1981.

[11:30]

I'll tell you how far this government has put business back in the province of B.C. as a result of their economic policies. The number of business incorporations in 1978 was 15,215. As a result of their policy, we've now reached the level we were at in 1978. Mr. Parker, the executive at the Bank of British Columbia who spoke and used the line about the best of times and the worst of times, was looking at the performance of this government to date. In my opinion, the performance of this government has been found wanting. When business incorporations in this province drop from 23,000 in 1981 to just over 15,000 this year, we've achieved the level we were at back in 1978, an absolutely shameful performance on the part of this government.

Anybody who wants to improve the situation in British Columbia requires an understanding of the good things that are happening in this province, but also certainly requires an understanding of the problems that this province is experiencing. As far as we're concerned, and as far as the vast majority of people in British Columbia are concerned, this government simply doesn't seem to understand what's going on in those communities around the province and with ordinary working people.

I walk around communities throughout B.C., and what I hear and relay back to this Legislature is a concern about business in those communities. It's pretty shocking when you walk down the main street in Kimberley, British Columbia and see buildings and storefronts shut down. It's a community that's very enthusiastic about the possibilities for the future, yet when you drive into Kimberley you see the Hydro building shut down and up for sale. How are the other businesses in communities in the east Kootenays going to take that? Is it a cue for them, that Hydro shuts down its building in Kimberley, centralizes its operations elsewhere and leaves Kimberley as a commercial backwater? The same thing is happening in my community of Port Alberni; the same thing is happening in communities all over the province as a result of this government's mismanagement of the economy. Businesses are shutting down and new businesses aren't incorporating at the rate they were between 1975 and 1981. This government has failed to reach the level of economic activity prevalent in this province eight years ago.

Business bankruptcies. I don't know if the minister mentioned business bankruptcies, but if the minister would care to look....

AN HON. MEMBER: He said they were down.

MR. SKELLY: If the minister would care to make a comparison....

AN HON. MEMBER: He'd rather talk about new businesses.

MR. SKELLY: He'd rather talk about the 8,000 fewer new business incorporations compared to 1981. If we're going to look at conditions for business people in British Columbia, we have to look at all sides of the picture. Certainly any responsible business person seeking to set up a new business in this province is going to look at all sides of the picture, the good side as well as the bad. Sophisticated business people don't look just at the good side; those kinds of business people don't end up in business for very long. You have to look at the down side as well as the up side.

The number of business bankruptcies in British Columbia in 1985 was 1,331, the second highest in ten years. I can recall reading stories about the Great Depression, and I can recall listening to politicians like the politicians opposite who always said, every year in every speech, that the economy was just about to turn the comer. In every speech they said that prosperity was just around the comer. But it requires a lot more than positive thinking and positive talk to do that. What

[ Page 7588 ]

it requires is good solid economic policies, pragmatic economic policies, policies designed to get people back to work in the province of British Columbia, policies designed to encourage the development of new businesses with long-term jobs with new products. It requires some good, hard, fundamental economic policies on the part of this government, and those policies aren't there.

A lot of people in B.C. are concerned about the future. Many people are optimistic about the future, and I think they have a right to be, because when you see what's happening elsewhere in Canada, there's reason to be optimistic. Ontario: Ontario now has a construction labour shortage and they're looking at advertising around the world to bring construction workers to Ontario. People in British Columbia have a reason to be optimistic, because they see what's happening elsewhere in Canada. The rest of the country has recovered from the international recession. It's only in British Columbia, under the kind of economic policies that this government has, that they're concerned.

When they look at Manitoba and look at the level of economic recovery that's taken place in Manitoba, then they have a reason to be optimistic, because they think they have an opportunity for that kind of economic recovery here when the government changes. But people are concerned in British Columbia for this reason: they've seen this government's performance before. They've seen this Premier's performance before. They know that before every election there's a slightly more expansive and positive attitude being imparted on the part of Social Credit ministers, these same ministers that right after the provincial election go around and say: "The deficit's high. We have to cut back. We have to increase taxes. We have to cut back on the number of people employed in the public service." These very same ministers are totally gloom and doom after an election. Then when it comes time for the next election...

AN HON. MEMBER: They're the Happy Gang.

MR. SKELLY: ...then they become the Happy Gang. Then they start talking positive. Then they start saying: "Prosperity is just around the corner." That's what these guys do. You should be aware of that yourself, Mr. Speaker. That's the problem in British Columbia, because these people have an economic policy that lasts from one election to the next. It's a three-year time horizon for these people, Mr. Speaker. No long-term plans. No direct concern about the real problems facing small business in British Columbia. No direct concern about the problems facing people who are poor and who are out of work.

I listened to the Minister of Labour talk about the 99 percent of people in the world who are starving and who are beset with problems of instability and revolution. I listened to the Minister of Labour's concerns about that, and the fact that his family came here from Ireland 20 years ago to escape those kinds of things. Mr. Speaker, I wish that member had the same kind of concern for people here in British Columbia. I listened to his talk about preventive mediation, about getting involved with trade unions and getting involved with management in order to prevent disputes from occurring that have occurred in the past. Where was that member, talking about preventive mediation, three years ago when this government came down with one of the most vicious anti-labour programs that any government could ever have conceived of in this country? This death-bed repentant stuff about preventive mediation makes me sick, Mr. Speaker. Where was that member three years ago when this Premier brought down his vicious, brutal restraint program in this province? I'll tell you where he was. He was using exactly the same lines to congratulate the Premier on that program that he's using to congratulate the Minister of Finance on this one. They're like a bunch of sheep. I cannot stomach that kind of behaviour in a legislature.

Mr. Speaker, the people of this province are concerned, because they've seen the way this government has performed before. They've seen them come off with an attack right after they win an election. They've seen them drive down the economy. They've seen them drive people out of their jobs. They've seen people who have been in business for years and years being driven out of business as a result of this government's economic policy after the election, when this government talks about wanting to control costs and wanting to cut down the deficit. They've also seen this government change just before an election to the point where they want to see the economy expanding and they want to see everybody in British Columbia happy and having a positive attitude. They don't want to go so far as to create real, legitimate long-term jobs, or to improve the conditions for business in British Columbia. They don't want to go so far as to actually bring in a program on preventive mediation that we can take a look at and improve in this Legislature. They don't want to go into that kind of detail, because after the election, I'll tell you what, Mr. Speaker: they're going to go after the trade unions in this province. They're going to go after teachers in this province again. They're going to go after business people in this province again. And when Expo is only a memory, they're going to go after those people and say they have to be responsible for paying the price of Expo. They're going to cut back on those teachers' jobs. They're going to tell trade unions that if they have a right to be in a trade union again in this province after the next election, they're going to be lucky for that.

[Mr. Strachan in the chair.]

The people of British Columbia no longer believe this gang. They don't believe this budget. They don't believe the statements that you are making about the economy. But I'll tell you, Mr. Speaker, the people of British Columbia believe in British Columbia; they believe in this province. They want this province to be a better place, and they know it can be a better place, because it has been in the past. They look at other provinces across Canada, and they know that those provinces have been through the so-called international recession, that they are in a process of recovery, but they know that it's not taking place here in British Columbia.

People in B.C. believe in the future. They want a future for their children. They want long-term employment. They want a stable business climate. They want a stable labour relations climate, and they know what it takes. They know what it takes now, Mr. Speaker: a change in government. They want to get rid of that gang that's caused the problems in the first place, and they want to put in a government that is aware of the problems that face people, ordinary British Columbians, on a day-to-day basis. They want to put in a government that is concerned about people. They want to put in a government that is concerned about doing away with

[ Page 7589 ]

poverty, eradicating poverty, a government that has that commitment — not like this government here.

I am very optimistic and hopeful for the future in the province of British Columbia, as are tens of thousands, hundreds of thousands, of people out there in every community in the province of British Columbia. The reason they're confident is that they see a change coming. Thank you very much.

[11:45]

DEPUTY SPEAKER: Pursuant to standing orders, the House is advised that the minister closes debate.

HON. MR. CURTIS: Mr. Speaker, thank you. I'm cognizant of the — as I indicated last year — rules of the House which limit the amount of time available to a designated speaker, and therefore much of the time was used in the budget debate. I have just a few minutes' remarks to make in closing this debate.

I'm puzzled by what the Leader of the Opposition has said, and I think some members of his caucus are puzzled as well. We've heard the same old theme repeated through the course of the budget debate that nothing....

Interjections.

DEPUTY SPEAKER: Order, please, Hon. members, courtesy has been extended to all members speaking this morning, and it should be extended to the minister closing debate.

HON. MR. CURTIS: Thank you, Mr. Speaker. I'm puzzled because we've heard the doom and gloom gang, as we hear every year, and I've got Hansards scattered all over my desk reviewing virtually the same criticism. But if we as a government party are in so much trouble, why was I told this morning that we are out of membership books? We're selling memberships at a rate that I don't think the Leader of the Opposition fully appreciates.

So much about membership books. But I want to try to....

Interjections.

DEPUTY SPEAKER: Order, please.

HON. MR. CURTIS: Obviously that makes them very uncomfortable.

I want to try to....

Interjections.

DEPUTY SPEAKER: Hon. members, as the Chair indicated earlier, parliamentary courtesy has been offered to all members speaking this morning, and it will be extended to the Minister of Finance as he closes debate.

HON. MR. CURTIS: Mr. Speaker, it would be an understatement to say that I was disappointed by the general themes developed by the members of the official opposition in the course of this debate, in much the same way as they have done previously. May I say, without offending the rules, that some members chose statistics on a selective basis to make a particular point. They have done that in the past as well.

Mr. Speaker, first of all, there is the question of economic growth. Even some members of the official opposition have agreed that we can expect relatively good growth in British Columbia this year. The government's forecast, based on a wide variety of forecasts and not ours alone, is 4 percent. Some opposition members have spoken of something in the range of 3 to 4 percent. The Conference Board's forecast — and it is used in debate when it is in the interests of the opposition to use it — is higher than ours at 4.6 percent.

Post-Expo — that is, in the calendar year 1987 — some members opposite have, however, reverted to their traditional negative thinking. They selectively pointed to one external forecast of 1.3 percent. They chose to ignore — or perhaps it was just in error, an oversight — the Royal Bank forecast in Econoscope of 3 percent. But that wouldn't suit their purposes.

On the topic of employment and unemployment there were some confusing and contradictory remarks. I suggest, Mr. Leader of the Opposition, that you'd better, after the Easter weekend, have a caucus meeting to get your stories straight. We heard the member for Nanaimo (Mr. Stupich) deploring the fact that B.C.'s unemployment rate was higher than that for Canada. He spent some time detailing how 45,000 people were unemployed because of our higher rate. Of course the rate is high. I said that on budget day, and I repeat it today: the unemployment rate is higher than we would like. But even during the brief time that the NDP formed government in British Columbia from 1972 to 1975, the British Columbia unemployment rate was significantly higher than that for the country as a whole. If we're going to develop one theme, surely we should develop the entire theme in order to present the correct picture.

It was also suggested by more than one member opposite that most of the 26,000 new jobs created last year were part time jobs. In fact, to the best of our knowledge and ability in identifying these jobs, we find that about 21,000 of them are full-time, with just 5,000 new jobs being so-called part-time.

Some members opposite recognized that investment is the key to expanding employment in the province, but they continued, in developing their thesis, to oppose one of the major ways in which that investment will be encouraged, and that is through bringing British Columbia's tax system into line with those of our competitors. That was the reason for the tax reductions introduced in 1985 and restated in the 1986-87 budget — over a three-year period, a phased-in period with year one last year, year two this year and then year three. We have heard opposition phrases such as "corporate welfare," "giveaways," "tax breaks" and so on. This demonstrates, in my view, their complete lack of understanding, both of the necessity for these tax measures and of the difficult financial circumstances faced by businesses, large and small, in the province of British Columbia over the last few years. It is incorrect to have suggested, as I recall some members on the other side did, that tax measures benefit only large corporations. Well, there are many small and medium-sized businesses benefiting right now, at the end of March, from tax reductions, some of which were introduced in 1985. The small business employee tax credit, which is being factored into income tax returns at this time, and the venture capital tax credit were both specifically designed to help small business.

One member questioned whether property tax reductions were going ahead as planned. Well, I restate that the property

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tax reductions affecting the government's revenue will continue on a three-year timetable, which started in March 1985. Only in the case of property taxes on machinery and equipment for non-school purposes is there a deferment in phasing out the tax until 1987. That's a relatively small component. I indicated on budget day that it was requested by the Union of B.C. Municipalities, and we were happy to accede to that request.

A few other comments, in the moments remaining, regarding confusion, which appears to be rampant on the other side, concerning the revenue and expenditure figures in the budget. Some members across the way still don't understand — or profess not to understand — how significant tax reductions can be made, new expenditure initiatives introduced and at the same time the deficit reduced. This has been achieved both last year and this because of the actions which we took four years ago. Expenditure growth has been limited to a rate less than growth in the economy. Revenue growth will continue at about the same rate as growth in the economy, or slightly less as a result of the tax reductions — in other words, planned revenue reductions. Under these circumstances the deficit will decline, as it has already in two consecutive years.

The member for Nanaimo — whom I have known for a number of years and who is apparently not in his seat today....

Interjection.

HON. MR. CURTIS: Well, he is not in the chamber at this moment, Mr. Speaker.

He offered a revenue forecast which is remarkable not for its accuracy or its logic, but by its boldness in predicting a decline in revenue while acknowledging in the same remarks that the economy would probably grow by 3 to 4 percent this year. So he has really been persuaded to go out on a limb in forecasting revenue in fiscal '86-87, and I trust, Mr. Leader of the Opposition, that you and your caucus will allow him to retreat with great dignity when the figures are finally in.

To respond to some of the forecasts in this chamber — as well as outside on forecast revenue — personal income tax will rise more than in the current year because of high employment growth, changes to the tax base by the federal government, and higher growth in personal incomes. In addition, the current year '85-86 is negatively affected by an adjustment for a prior year; as a result, the percentage increase in '86-87 is larger than would otherwise occur.

There was some puzzlement, I think, over the forecast on corporation income tax revenue showing a large increase. This is not because of any precisely expected jump in corporate profits, but because the current year includes a large negative adjustment for a prior year, so that spread — understandably and reasonably — is greater. In comparison with two years ago, corporate income tax revenue is up by 11 percent, and that, I think most members would agree, is a relatively modest increase. The reduction in the corporation income tax rate, which is the subject of a bill, will have only a minor effect in the fiscal year about to start, as indicated in supporting material with the budget.

Social service tax shows an increase of 10.6 percent on the same base, up only slightly from the expected 10.2 percent increase for '85-86. Indeed, Mr. Speaker, we rather think that that forecast is somewhat conservative, indicating strong activity among items which are sales taxable in the province of British Columbia.

Finally, could I suggest that the member for Nanaimo reexamine the effect of the tax measures on total revenue and expenditure. Part of the tax reductions are reflected as expenditure increases, accounting for about I percent of the 5.7 percent estimated increase in expenditure over the revised forecast for '85-86.

We also heard in the course of these days the suggestion that expenditure increases are a more effective way of stimulating the economy than tax decreases. We would not be surprised, I think, to hear that this is the result of a federal study. In British Columbia, with our admittedly and traditional open economy, much of any general expenditure initiative ends up improving the economies of central Canada. There are exceptions, of course, such as highway spending, where the effect is felt on local communities throughout the province — through higher employment and equipment rental, for example — but increased spending is generally not an effective method of economic stimulus for the kind of economy we have in this province.

Quickly, Mr. Speaker, the member for North Vancouver–Seymour (Mr. Davis) mentioned the question of a separation of the operating and capital budget for presentation purposes. The proposal has been suggested previously by some members and some commentators. It's true that our budget, excluding capital expenditure, would show a much lower deficit, and the decline in the deficit would have been much greater over the last few years if we had followed that course — if capital expenditure had been excluded. But there are problems with using this approach in government accounting, including the difficulty in determining how to account for or accommodate depreciation. On balance I'm satisfied that the present accounting policy reflects the fiscal impact of the total budget more accurately for the observer.

Mr. Speaker, it is unfortunate that the opposition has generally refused to recognize the improvement in British Columbia's economy over the past few years. I want to recap just briefly, as did my colleague the Minister of Consumer and Corporate Affairs (Hon. Mr. Veitch) earlier today.

Total personal incomes, an important indicator for all British Columbians, rose by more than $6 billion between 1982 and '85, faster than the rate of inflation. The inflation rate itself — 3.2 percent in 1985 — is at a 15-year low. Lumber production, 39 percent higher in 1985 than in 1982; pulp and paper production, up 25 percent over the same period; power generation, up 23 percent in the same three years; manufacturing shipments increased by 21 percent in the three years; and retail sales, Mr. Minister of Human Resources (Hon. Mr. Nielsen), were up 20 percent over the three years.

AN HON. MEMBER: They don't want to hear it.

HON. MR. CURTIS: No, they don't wish to hear that, Mr. Member, because it interferes with their futile plans. But clearly the economy in British Columbia is improving, is showing steady, continuous improvement and growth. We have moved out of the recession. We have tax cuts which make British Columbia far more competitive with those who do the same sorts of things that we do in British Columbia.

[12:00]

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Mr. Speaker, I indicated earlier in the debate that this is the first provincial budget to have been presented. Admittedly, two have been presented since March 20. But I can say that, on the basis of the two that we have seen and the others that will follow inevitably in the weeks to come, the British Columbia budget, which has been debated since March 20, will show itself to be a superior, a thoughtful, a responsible document.

Mr. Speaker, I repeat the motion which was made at the commencement of this debate: that is, that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

Motion approved on the following division:

YEAS — 25

NAYS — 15

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

ESTIMATES: MINISTRY OF ENVIRONMENT

On vote 25: minister's office, $211,255.

The House resumed: Mr. Strachan in the chair.

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

HON. MR. NIELSEN: Mr. Speaker, I move that the House at its rising do stand adjourned until 2 p.m. Monday, April 7.

Motion approved.

Hon. Mr. Nielsen moved adjournment of the House.

Motion approved.

The House adjourned at 12:09 p.m.