[ Page 329 ]

CONTENTS

Routine Proceedings

Oral Questions

Conflict-of-interest guidelines. Mr. Sihota –– 329

Public opinion polls. Mr. G. Hanson –– 330

Regulations at uranium mine site. Ms. Smallwood –– 330

Electronic super-vision of convicted offenders. Mr. Mercier 330

Health care user fees. Mrs. Boone –– 331

Ministerial Statement

First Ministers' Conference. Hon. Mr. Vander Zalm –– 331

Mr. Skelly

Budget Debate

Mr. Blencoe –– 335

Mr. De Jong –– 335

Ms. Marzari –– 337

Hon. Mr. Strachan., –– 339

Mr. Vant –– 340

Mr. Williams –– 342

Mr. Skelly –– 345

Hon. Mr. Couvelier –– 348

Division –– 352

The House met at 2:07 p.m.

Prayers.

HON. MR. STRACHAN: At the outset I'd like to ask all Members of the Legislative Assembly to welcome back the dean of what we commonly refer to as the creative loiterers in the corridors, Mr. Fred Moonen, who has been absent for some time and is back with us. I'm sure we're all pleased to see Fred back. Further, on behalf of the Social Credit caucus, may I welcome our 44 constituency secretaries, who are in Victoria for a two-day workshop, and have all members welcome them to the precincts and this assembly.

MR. G. HANSON: Would the House join me in congratulating the four Victorians who have just won the women's world curling championship, the Pat Sanders rink.

HON. MR. VEITCH: In the House today in the galleries are Mr. Mark Reader and Mr. Adrian Dirassar, and I would ask the House to make them welcome.

MR. SKELLY: I'd like to ask the House to welcome a constituency assistant who is not connected with the other 44 present. My constituency assistant for 15 years, Shirley Cherwak, is here with her friend and fellow campaigner, Sylvia Staffeldt from Port Alberni.

MR. PELTON: In the gallery today is part of a very large group of senior secondary high school students from Maple Ridge, the social studies class, under the direction of Mr. Gordon Edmonds, and I would ask the House to make them welcome, please.

MR. GABELMANN: I would like the members to welcome two people from the North Island constituency: Alderman Bob Patterson, from the community of Port McNeill, and Bob Miller, from the community of Woss.

MR. VANT: A very good friend of mine is in the members' gallery: Bill Tambling. He recently moved to Victoria from Wells; he recently retired as general superintendent of Mosquito Creek Gold Mining, but he has been retained to help with the development of that gold-mining property. Also, some very good friends of mine are in your gallery, Mr. Speaker: Jean Closson from Quesnel and Joan Beckman from Williams Lake. I know the House will join me in welcoming all of them.

MR. CASHORE: Mr. Speaker, I invite the members of this House to join me in welcoming into the world David John Reekie, my first grandchild — nine pounds, four ounces — born just moments ago.

MR. R. FRASER: From the great riding of West Vancouver-Howe Sound, your own riding, is a lady who chooses to spend her fortieth birthday in a most unusual way, here in the precincts with us, Sue Ogden.

MR. WILLIAMS: We, too, on this side of the House, would like to welcome Mr. Fred Moonen, who has frequented these corridors many years, and we sincerely hope that the captains of industry follow his advice as they have in the past — that is, rarely.

HON. MR. COUVELIER: I don't quite know about the proprieties of the House, but apparently the member for Victoria outfooted me in rising to recognize the four Victoria girls who won the world curling championships.

AN HON. MEMBER: Women.

HON. MR. COUVELIER: Women. Well, I tell you, when you get to be my age, you're allowed to call them girls. In any event, Mr. Speaker, if you'll permit me, I'd like to name them all and I'd like to point out to the House and to those others who didn't know that the skip, Pat Sanders, works for us in the Ministry of Finance. I claim particular parochial pride as a consequence of that. Pat Sanders is up in the gallery, and I believe she will shortly be joined by her teammates, if they're not already here: Deb Massullo, Louise Herlinveaux, and Georgina Hawkes. Congratulations from us all.

MR. DE JONG: Mr. Speaker, present with us today is my wife Ann, accompanied by her brother John Hoogendoorn and his wife Jean, from Agassiz, all supporters of good government from the Chilliwack riding.

Oral Questions

CONFLICT-OF-INTEREST GUIDELINES

MR. SIHOTA: Mr. Speaker, my question is to the Premier. In light of the comptroller-general's report today, and particularly with respect to his comments on the absence of clear disclosure guidelines, does the Premier now agree that rigorous conflict-of- interest guidelines are lacking in this province?

HON. MR. VANDER ZALM: Mr. Speaker, of course, to consider the provisions of the Financial Disclosure Act we have to give credit not only to the government prior to this government but the government prior to it back in 1972 or '73. The legislation has served the province reasonably well, I think; for the most part, very well. However, recently I introduced new guidelines for members of government, and again I think these guidelines perhaps serve government well. They're certainly strict, and they're being adhered to, so I don't see the need for change.

[2:15]

MR. SIHOTA: Mr. Speaker, I've read the report, and I would draw the Premier's attention to pages 10 and 14 of that report, which calls for changes. Has the Premier decided to introduce clear conflict-of- interest legislation in this province now?

HON. MR. VANDER ZALM: Mr. Speaker, these recommendations will certainly be considered. The report has only just been received. It will be future policy as to whether these changes take place or not, but they'll be considered.

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PUBLIC OPINION POLLS

MR. G. HANSON: A question to the Premier. When running for the leadership of the Social Credit Party at Whistler last year, the Premier pledged this would be an open government and would not depend on public opinion polling. Recently, with the disclosure of the public accounts, it was indicated that in the last year available to us there was something over a quarter of a million dollars of taxpayers' money spent on opinion polling. Has the minister decided to make those contracts and those questionnaires now public and available to the people?

HON. MR. VANDER ZALM: Mr. Speaker, I'm very happy that the member reminds me of that wonderful day in Whistler — and all that led up to it. I'm sure that most British Columbians would agree that we enjoy good, open government in B.C. — perhaps more so than anywhere else in North America. I intend to see it continue as such. During my term as Premier of this government we have not commissioned polls such as referred to.

MR. G. HANSON: I listened very carefully to the Premier's answer. My question was: would the first minister table the reports and polling contracts that were paid for by the taxpayers, as they do in Ontario? Would he make those publicly available?

HON. MR. VANDER ZALM: I don't know what reports you are referring to or what the contents are of the report or where they are, but I'll certainly therefore take the question as notice.

MR. G. HANSON: The Premier stated that since taking office no public opinion polls have been paid for by the taxpayers. Is he saying there's no contract with Goldfarb, Decima or Public Affairs International? Have any contracts been acted on within the eight months that he has been Premier? Is that what he's advising the House?

HON. MR. VANDER ZALM: I didn't say that. That wasn't the question asked. I really can't say for sure whether in fact there is or there isn't. I'll take that question as notice.

REGULATIONS AT URANIUM MINESITE

MS. SMALLWOOD: My question is to the Minister of Environment and Parks. I gave the minister notice of this question, so I hope he's been able to make himself familiar with the mine in question. An analysis of the Cominco Aley claim near Williston Lake shows that four out of five main ore samples contain uranium and/or thorium. Has the government at any time required a baseline survey be done to establish the levels of radioactivity at this site?

HON. MR. STRACHAN: I thank the member for the advance notice, although at this point I don't have any details on that particular situation. But I can tell you that pursuant to the moratorium on uranium mining, which lapsed on February 28, 1987, stringent guidelines, as recommended by the 1981 Bates commission, will be in place and cover what has to be done when uranium or thorium is found. I'm sure those regulations will be put into place with respect to that suspected finding of those naturally found elements.

MS. SMALLWOOD: According to the new regulations put in place February 27 of this year, the regulations pertain to designated areas where there have been uranium claims, and not to areas where other minerals are mined in this province and where uranium and/or thorium are present. Why did the new regulations not include mines such as this Cominco claim, which is now being published as possibly the world's largest find of niobium?

HON. MR. STRACHAN: My understanding is that the regulations, if naturally occurring uranium or thorium are found, apply to any place in the province where those natural elements occur. If I am incorrect, then I will advise the House of that, but the regulations as I understand them are provincewide.

MS. SMALLWOOD: The regulations are not provincewide; they only pertain to designated areas. Claims that are not under those designated areas must be reported voluntarily by the mining companies.

Has the minister determined how many other claims there are that have uranium deposits but are not included in the designated areas under the uranium exploration guidelines?

HON. MR. STRACHAN: It's getting rather complicated here. It's regrettable that the Minister of Energy, Mines and Petroleum Resources, who put the regulations in place, is not here to answer the question, but I will take all of the member's questions on notice and return to the House with answers to all the questions, including those on the extent of the regulations and what action the provincial government will take.

MS. SMALLWOOD: This question is, again, to the Minister of Environment. I'd like to know why the government has not asked for radiation levels at this claim, and I'd like to know if the minister now, because of concern over the potential health effects in that particular area, will decide to go and look for radiation levels.

HON. MR. STRACHAN: As I understand the member's questions, we don't have to look for radiation levels, because they are there. So that would, I presume, answer the first part of the question; and secondly, the whole issue will be taken on notice, and, as I indicated earlier, a response will come back to the Legislative Assembly.

ELECTRONIC SUPERVISION
OF CONVICTED OFFENDERS

MR. MERCIER: Mr. Speaker, my question is for the Attorney-General. There was criticism in the press recently regarding the test program for electronic supervision of those convicted of specific offences, and that such electronic supervision violates personal liberties. Will the Attorney-General advise on recent support for electronic supervision as opposed to incarceration?

HON. B.R. SMITH: Mr. Speaker, it is regrettable that incarceration is also a violation of civil liberty.

The aim of this is to cut down the amount of incarceration and improve the amount of supervision. By these non-intrusive bracelets, you can have a person productively at work in his office or in his home, and you know exactly where he is. You know he's not behind the wheel of a car, because half of

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these people are involved in driving offences. It improves the public's protection, in addition to which it reduces the cost of running prisons, for these particular intermittent offenders, by about 600 percent. We're very encouraged by the early experience of this method in 20 U.S. states.

MR. MERCIER: A supplementary question on that. It sounds as if they have greater freedom, and that would bring up the question of the nature of the offences of such people. Are they crimes that would be considered non-violent?

HON. B.R. SMITH: Mr. Speaker, it is a trial measure only. We're going to use them with about 25 offenders initially. They will all be non-violent offenders, serving 90 days or less, and most of them intermittent sentences — that's people who serve in prison on weekends.

HEALTH CARE USER FEES

MRS. BOONE: My question is to the Minister of Health. The minister told CBC Radio last Thursday that he has taken surveys that indicate an abuse of our health care and Pharmacare systems, and that therefore this justifies the new user fees that are in the budget. Has the minister decided to make these surveys public, since the taxpayer's dollars have paid for them?

HON. MR. DUECK: No taxpayers' money has been spent, and I don't intend to make them public.

MRS. BOONE: A further question then, not regarding the surveys, as it appears there are none. Is the government using these fees as a deterrent, or are they using them to raise money for the government, as was initially said in the budget?

HON. MR. DUECK: Mr. Speaker, both.

MRS. BOONE: Supplementary to the minister. Is it government policy that the sick and the elderly should be deterred from seeking medical advice when they think they need it?

HON. MR. DUECK: Mr. Speaker, this requires a little lengthy answer. No one, I think, on either side of the House would even suggest that we do anything on the backs of the seniors, contrary to what has been said from the opposite side, because we all have parents, we all have grandparents. We do not take advantage of these people. However, if you're speaking of Pharmacare, we have some people who are of course exempt from this, and those are the ones who are the most unfortunate. The others, who are paying 75 percent of the dispensing fee...would suggest to me that there are very few of those who could not pay the 75 percent. I think also that there is some responsibility on every citizen in this country, and that includes the seniors, the young adult, the politicians, physicians, pharmacists and everyone. They all have responsibility, and there is abuse in every segment. I think it is part of that that we're trying to cut out abuse; we're trying to raise some revenue at the same time. It is not onerous.

MRS. BOONE: The dispensing fee that these seniors are going to be paying for, 75 percent of that — approximately 120,000 seniors will be adversely affected. If their physician recommends a particular drug to them, are you saying that they should second-guess as to whether this drug is required or not required? How can these people make a decision on that and basically say that this is something that they do or don't require? How can you use that as a deterrent for these senior citizens?

HON. MR. DUECK: I certainly wouldn't suggest that an individual, especially a senior, would decide what drug to take and what drug not to take. However, I have visited many senior citizen homes; I have visited with many, many senior citizens, not just since I have been the Minister of Health but before that, and I can assure you that the abuse of drugs for many of the senior citizens is much more than one suspects. But that's not the reason we put it on, just to try to curtail the use or abuse of drugs. We're saying that 75 percent of perhaps a $3 or $4 charge is not onerous, and I think rather than some senior citizens going for every possible drug, they may think and say, yes, I in fact need that drug, and they certainly can afford that charge.

[2:30]

Ministerial Statement

FIRST MINISTERS' CONFERENCE

MR. SKELLY: On a point of order, Mr. Speaker, I understand that this is the appropriate time on the calendar to make statements. Given the events in Ottawa on Thursday and Friday, I was wondering if the Premier was prepared to make a statement on the first ministers' conference.

HON. MR. VANDER ZALM: Yes, I am very pleased to make a statement, because certainly what I was involved with in Ottawa over the last number of days was something that would tremendously affect not only native people on or off the reserves, but also British Columbians in general and Canadians, for that matter, regardless of where they reside. When I went to Ottawa, I was given a fair bit of information as to what we would be discussing, and I did have some support with me, naturally. I was also pleased to see the Leader of the Opposition and the member for Atlin (Mr. Guno) present. There was a good attendance at the conference in Ottawa generally.

When I arrived at the conference, however, more information was provided and we initially had a meeting over dinner, before the conference commenced, between representatives from the various native groups as well as the Prime Minister and all the premiers from across the country. That evening it became more evident as to what in fact we would be discussing. Unlike the other premiers, I had gone without a prepared statement to give as an opener at the conference, because I felt that not only should I have the benefit of the meeting before the conference, but also I was hoping to hear from some of the aboriginal people as well as from the premiers who would be speaking before me.

As I said, it already became evident on the evening before the conference that in fact we were talking about self-government being enshrined in the constitution, without anyone really having a definition of what self-government meant. As the conference proceeded the next morning, it became more evident that aside from enshrining self-government in the

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constitution, we were really talking about a form of government that would be provided to native people not only on reserves but also any other lands that might be claimed at some point in the process throughout the various provinces in Canada, as well as those who were off the reserves in cities or wherever. As a matter of fact, it was described in one of the papers as being that any identifiable group of native people could make application for self-government, regardless of where they were in the country.

I can recall asking the Premier of Ontario if in fact he had a solution for what he would do should a group approach him from Toronto, London or Niagara Falls and seek not only to have self-government but land from which to govern, because self-government implied there must also be land available. I wasn't very satisfied with the answer given, which was basically: "Well, we're not going to worry about that now."

I also found that we were talking about provincial laws or federal laws not being applicable in those areas of self-government, but that in fact the native people were seeking to have their own laws applied in those self-government areas. So I made notes during the earlier parts of the conference when the initial presentations were being made, and I summed up my understanding of self-government, which was not, in fact, denied by anyone and nothing was changed in any of the responses that followed thereafter.

My summation was that in fact we in British Columbia had not only 1,628 reserves, which is the largest of any province in Canada, and we also have one of the largest native groups anywhere in Canada; we also have 350 native communities, not counting those off the reserves in the various towns but simply those that are involved with the reserves –– 350 identifiable units on reserves only aside from all of the others.

My understanding of self-government then was that we in British Columbia could end up with 350 separate governments for which there would be different laws, because the laws would not be as they are provincially or federally. It was made clear these were not to apply. It was also made clear at the conference by statements in the various papers presented, as well as by the Premiers who were present and the Prime Minister, that nothing in what we were proposing to see enshrined in the constitution would derogate from the rights already available to native people, so that in fact the different provisions with respect to hunting or fishing would continue on, for example. Also these native groups would not be subjected to income taxes, sales taxes or other taxes.

So the question was asked, and the question I asked was: who will then pay for this? The answer from one of my colleagues at the table, the one sitting next to me in Ottawa, was: "I'm not going to worry about that; you shouldn't worry about that; it's right that we do it; therefore, worry about paying later — or about who pays." But I said: "Well, what happens if they don't pay the taxes according to the demands that are made in the various papers and presentations; and if, for example in B.C., there should be claims, and they were successful with the claims, and much of the province was gone, and the rest of the population was sort of left in the lower mainland...? Who would pay then, and where would the revenues come from?" The answer was: "Well, it would have to be shared federally and provincially, but the details could follow later."

As the Premier representing the province of British Columbia, I didn't want — like some others were doing — to dance around the issue, talk a lot and say nothing. I thought I owed it to British Columbians, regardless of where they lived in this great province — whether they were my constituents or somebody else's constituents; whether they were Social Credit or NDP or something else — to speak out frankly, honestly, lay it on the line and say it where it is. For that matter, I felt I owed it to the native people present as well. I didn't think that I needed to sit there and give a message that was attempting to con somebody; I thought I could be totally upfront with the message.

Mr. Speaker, I simply said, in short, that I was not ready to buy for British Columbians something that no one there was able or willing to define; that if we were going to enshrine some form of new government, self-government, into the constitution, then definitely any sane Canadian would argue that they should know what it was they were attempting to enshrine.

I also thought it would only be reasonable that we should know not only what the meaning of self-government is, but what the implications of self-government are. Who does pay for it, and how much? Is it a provincial responsibility, federal or both? Of course, in the end — and this perhaps hasn't been said sufficiently — the native people didn't agree with the proposal that was finally being discussed, nor did the majority of the provinces. Maybe British Columbia was being singled out because I wasn't playing to that audience in the conference centre or to the TV cameras that were constantly on us. I felt I owed it to simply tell the people that we as British Columbians were not prepared to buy a pig in a poke.

Mr. Speaker, I did present the alternative to what was being proposed, for which there is a clear definition, the Sechelt formula. We do have a form of self-government in Sechelt.

Not all the native people in British Columbia agree with the spokespeople that were there representing the various native groups. While at the conference, we saw outside of the conference centre a group demonstrating against what was being proposed and saying: "Don't sell us out. We have our treaties; we want to continue on as we are." We also know there was a message — and it has since been reported in the paper — that the Sechelt Indian band didn't want any part of what was being proposed, or at least not as it was being proposed. They are supportive of the agreement they have entered into, and the statement from a very honest and forthright person with the Sechelt Indian band was: "I don't blame the Premier. I wouldn't have bought something either where I didn't know what was involved or that someone couldn't define." I commend the gentleman for that because undoubtedly he too will be heavily criticized for having been honest, forthright and upfront.

I suppose we will, no doubt, have further meetings regarding this issue, because all the Premiers, regardless of whether from B.C., Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia or New Brunswick, appreciate that we need to find a better solution. I would suggest we've gone a long way towards that in British Columbia, and I was proud to hear mention several times at the conference about the initiatives that had been taken by British Columbia. And the Sechelt agreement was being held forth as a good example. We are progressive. We've done more than talk. Something has been done.

I look forward to further meetings where this might be discussed, and I look forward to dealing with the native people on a band-to-band basis in the province in order hopefully to arrive at more agreements. But I think it would

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be well for all native people across the country if we could continue the talks — learn from what's been said so far and from the mistakes made and from the demands presented and hopefully come forth with something better. But I think it would have been a disservice to Canadians, to British Columbians and to the native people for us to have assumed something or accepted something which was absolutely doomed to fail, which would have led to chaos. It might have broken the country, and the native people could well have been blamed by some of those who are now saying: "What a disservice it was you didn't reach an agreement." Those same people who are saying, "You should have reached an agreement; what happened; why didn't you agree?" and so forth, would probably then be out there blaming those same native people for having initiated something that failed and failed miserably.

So in one respect I regret that we didn't come to an agreement. In another I'm pleased that we didn't agree on what was being presented, because it would have been disastrous for the country, but most especially for British Columbia.

[2:45]

I realize from what I've heard in the last several days that British Columbians throughout the province are very aware of what took place at the conference, what was being discussed and the reasons for it, and I'm more than ever convinced that politicians too often take for granted the understanding of people. People do understand, and you can't get up at a conference and say, "Great stuff; we'll go for it, " knowing full well that if it did go or if it should somehow pass it would be total disaster. You can't attend a conference and say, as I've heard it said by somebody, "I was ashamed to be a British Columbian for what happened," because the people see through all of that. You see, British Columbians are smart people, and we should all recognize that.

Mr. Speaker, I know that there will be another time to address it, and I appreciate there will probably be further initiatives from the federal government or from some of the provincial governments. But to enshrine something in the constitution must always be recognized for what it is: it's a change that you can't suddenly alter, or can't consider too lightly. The constitution is the document, the law of the nation, and we shouldn't deal with it and put things into it that we don't understand. We shouldn't say: "We'll deal with it sometime later, but for the moment, politically, what a great vehicle to dump it into." The constitution is important. We can't deal with it like we would a trash-can, or something that you discard somewhere when you don't know what to do with it or how to deal with it.

It's an important document; we should always see it as such, and we should respect it for what it is. The changes will come. But British Columbia won't sit and wait until somehow all of these groups again get together. We will in the meantime proceed. We will take the necessary initiatives to assure that we try to work out arrangements with individual bands, where we do have a self-government, such as we see it in Sechelt, where the people with the agreement are actually appreciative of it and say it can do good things for us. It will bring progress for native people, and it will bring about economic opportunity. And we will be able to provide for ourselves, because we're going to make it work; we're a positive people, and it's going to happen. And we're going to see that happen elsewhere.

There are many more such groups throughout the province that, I'm sure, would like to take that positive initiative and see things happening for their people. We're going to work with them. We're going to make it happen. And we're going to continue on with what the Minister of Education (Hon. Mr. Brummet) has done, in assuring that there are opportunities available for the people, so they can continue with their culture, and learn their languages. That is good. The Minister of Education and the government are to be commended for that initiative. We're going to continue on with what the Minister of Social Services (Hon. Mr. Richmond) has done to try to get the programs for service delivery to the native people so that they can provide it to their people without a whole lot of bureaucracy from Ottawa interfering in the process. We're going to continue on with that, throughout good Minister of Social Services. And we're going to continue providing better health programs for our native people. The more we can get into the hands of the native people to provide for themselves, the better we'll build the independence that these people have and that we should give recognition to.

In short, I think too many people came to the conference with a whole lot of set proposals that they wouldn't alter or depart from. I think there were too many Toronto lawyers representing too many of the groups, and many of these Toronto lawyers probably hope the process goes on as it is for a long while to come. I appreciate that an awful lot of money has been spent by the taxpayers of Canada in order to bring it to where we are today, but I don't think we need to suggest for a moment that it's all been lost. Let it be a learning experience for all of the people, let's go back to another meeting better prepared, and let's be prepared, too, to give and take and arrive at some conclusion that will be of benefit to all of the people.

MR. SKELLY: Mr. Speaker, I really do appreciate the opportunity that the Premier took to make his statement to the House today. I wish the statement had been on the events of the first ministers' conference, and I do hope that Mr. Speaker will allow me similar leeway in discussing this issue as it relates to the people of British Columbia. Before I do that, I'd like to thank the Premier and the Minister of Intergovernmental Relations (Hon. Mr. Rogers) for their courtesy in inviting the Leader of the Opposition and the member for Atlin (Mr. Guno) to attend the conference as accredited observers. I think this was a good precedent. I hope it's something the Premier and the government will follow in the future. It's definitely something that other governments do as well, and I think it's worthwhile that all sides of the Legislature representing all of the people of British Columbia have an opportunity to be present at those conferences, and also to occasionally get the ear of the minister, so that advice can be given and advice can be received.

I do want to say, however, that I was impressed by a number of the first ministers who attended that conference. The Premier mentioned the minister who sat next to him. That minister was Richard Hatfield. Richard Hatfield said that when we're talking about rights, nobody asks the cost. When we enshrined previous rights in the constitution, we never said: "What's the bottom line on those rights? Rights of individuals, rights to freedom of the press, rights to freedom of association?" We never said: "What is this going to cost the people of Canada?" We took those issues as matters of right and as inherent rights for the citizens of this country, and

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we enshrined them in the constitution because that's where they belong.

I was impressed by the eloquence of that first minister from New Brunswick and the statement that he made: Let us recognize this as a right. Let us negotiate how we can accommodate that right in the constitution so that we can live with the first nations of this country and get together. We can work out the details. We're people with vision; we're people with intelligence; we're people with the responsibility to our constituencies in our province back home. If we have that responsibility, that vision, that intelligence, we can work out something that's appropriate for all the people of Canada. I'm pleased that some members at that conference had that vision and that commitment.

If at the Charlottetown conference, and if at the Quebec conference that preceded the agreement that was made to bring this country together back in 1867, we had had Premiers like this gentleman sitting here today who said, "Well, what's it going to cost us? How are we going to deal with this in the future? This doesn't apply in my province," or "this doesn't apply in some other provinces," or "I may even be forced to negotiate with 100 or 200 different groups within British Columbia," how would we view those conferences from our vantage point in history? The way I felt at that conference, there wouldn't be a Canada today. There wouldn't be this beautiful country, a country that is playing a role in world affairs larger than its population would dictate. There wouldn't be the kind of frontier spirit that drew rail lines across this country, that united us in terms of communication and transportation without that vision that was held by those Fathers of Confederation — who were there, after all, to set up another level of government that those provinces were going to be forced to deal with, to set up further fiscal arrangements in order to deal with those problems between provinces and the national government about to be born. Now you can't blame those Fathers of Confederation back in the 1860s for their failure to deal with the problem of the first nations of this country. You can't blame them, because it wasn't something that was considered at the time. But you cannot attack them for lack of vision, for lack of a vision that ultimately brought this country together and ultimately made it what it is today.

I look at the people who got together and drafted the Atlantic Charter — the leaders of the Allies who got together after World War II and put together what they ultimately thought was going to be a kind of world government that would bring us all closer together, recognizing the problems of refugees, the problems of underdeveloped countries, the problems of war and how to mediate between people who had very frustrating conflicts and difficulties. Look at the vision that those people had. Did any of them say, "Well, how much is it going to cost?" or "Maybe I can't negotiate with some of these countries around the world; maybe it's going to be impossible"?

This government, by the way, each year, each day negotiates with about 150 municipalities in the province, and the Premier is saying that every Indian band and every Indian group in this province is different, and how are they going to negotiate with those groups? You're already doing it with communities throughout the province, with municipalities and with regional districts.

If this gentleman doesn't have the vision and the ability and the intelligence to do it within his own province, it was certainly clear at that first ministers' conference. I've attended first ministers' conferences since 1973. My daughter was born at the Western Premiers' Conference in Calgary. I have never seen the response that I saw to this Premier's speech at the first ministers' conference in Ottawa. Those meetings are generally treated with decorum and respect; speakers are treated with decorum and respect; even where there are disagreements which often surface on the floor of these meetings, members tend to hold their counsel and delegates tend to be quiet and not disrespectful. This is the first time I've ever seen a Premier booed at one of these conferences, and it was our Premier — to show you how that proposal that you made, Mr. Premier, was received at the first ministers' conference.

I think the Premiers and the leader of the national government had an opportunity at this first ministers' conference to enshrine something in the constitution of this country that would have redressed an ancient injustice — as some commentators would have said it, that would have finished unfinished business that has been left unfinished since the Fathers of Confederation. You had an opportunity at this conference. B.C. had a leadership opportunity at this conference to become an author of a document that would have created a new confederation, not simply setting up a new level of government and not simply setting up more complex financial arrangements, but setting up an arrangement where we could rectify an error that was left in the British North America Act, an error that was left in the constitution of 1982. Because that's why we had these constitutional conferences in the first place. British Columbia had an opportunity to take a leadership role, an opportunity to take a visionary role, an opportunity to restructure Confederation in this country so that it reflected the aspirations of national governments of Canadians, so that it reflected the aspirations and the hopes of people within each and every one of the provinces, and so for the first time that it reflected the hopes and aspirations of aboriginal people all across the country.

I think a solution was within reach, except that some provincial Premiers took such a hard line. Because it doesn't matter how many aboriginal groups had different opinions on this issue; there is a formula whereby the constitution of this country can be amended, and I believe there was a solution available to the first ministers and to aboriginal people at this constitutional conference. The problem is that western Premiers from Saskatchewan, from Alberta and most certainly and most obviously from British Columbia did not seem to have the vision and the wit and the intelligence to see that there was a possibility of a breakthrough here to form a new confederation of which we could all be proud and in which we could all participate.

[3:00]

MR. KEMPF: Mr. Speaker, I wish to make a statement with respect to party affiliation.

MR. SPEAKER: The hon. member has advised me of his intention. Please proceed.

MR. KEMPF: Mr. Speaker, recent events have led me to conclude that I am unable to continue to serve my caucus, and accordingly after this point in time I will sit in this chamber as an independent member; I ask you, Mr. Speaker, to make arrangements accordingly.

[ Page 335 ]

Frankly, I find it impossible to remain in a caucus whose leader and Premier have no faith in, or find it impossible to support, a colleague in the face of frivolous allegations.

Orders of the Day

ON THE BUDGET
(continued debate)

MR. SPEAKER: The second member for Victoria has about ten minutes left.

MR. BLENCOE: I won't take ten minutes, Mr. Speaker. There are others who wish to follow me on our side of the House and, I think, on the other side. Time is somewhat limited today.

Mr. Speaker, on Friday I was basically talking about some of the issues in the budget that pertain to municipalities. Indeed, I think I was offering the government some encouragement in terms of the policies that they will be introducing or have introduced. However, today I wish to conclude my comments around the whole question of senior citizens once again, because this side of the House has for a number of hours in this budget debate requested that the government rethink — take another look at — its budget and the implications for our elderly in the province of British Columbia.

A government that likes to look at polls.... There's no other government in this country that runs by as many polls as this one. But a poll has come out which clearly indicates that the people of British Columbia find the budget and its implications for senior citizens totally abhorrent, and cannot support the budget, which is taking the money directly from the pockets of senior citizens. I refer, of course, to the Pharmacare charges, and the user fees for chiropractors, physiotherapists and podiatrists. Twenty-two million dollars, directly from senior citizens vis-à-vis the implications of Pharmacare.... I indicate to the government side that the poll indicates that 61 percent of British Columbians are opposed to the measures in the budget vis-à-vis Pharmacare and all the other implications for senior citizens. Overwhelmingly, the citizens of British Columbia have no time for what you've done to senior citizens.

Mr. Speaker, the Minister of Health (Hon. Mr. Dueck) said this budget is not on the backs of senior citizens. With respect to that minister, this budget is being paid for on the backs of our seniors, and we ask this government to rethink its policies. We ask this government to think why the senior citizens of our province should pay for ten years of fiscal mismanagement on the part of this government — huge deficits, overruns, spending of money as if it was going out of style, the wining and dining that this government has done over the last ten years, of friends and itself. Now it's going to pay for that ten years on the backs of senior citizens. Mr. Speaker, we cannot accept that, and we will continue to fight for the seniors of this province.

The poll clearly concludes that this budget is not acceptable. There are many items in this budget that are totally unacceptable, but the one area that the people of British Columbia are asking this government to reconsider is the financial implications for our seniors. Reconsider those moves; please reconsider, and I think the people of British Columbia will perhaps start to believe this smoke-and-mirror story of a fresh start. There is no fresh start in the province of British Columbia if you're going to make senior citizens pay for your deficits and your fiscal mismanagement over the last ten years. On this side of the House we cannot accept a budget that punishes our seniors once again, and we ask you to reconsider that budget.

MR. DE JONG: It indeed gives me great pleasure to rise and participate in this budget debate. It's not because I consider myself a great debater or public speaker, but simply because there is a message in this budget which emphasizes the point raised in the throne speech.

The Speech from the Throne, as I picked it up, did provide a threefold message: one of greater assistance to those in real need; secondly, one of enthusiasm and providing a climate in British Columbia for the private entrepreneur in all aspects of business, be it agriculture, commerce, manufacturing industries, labour or the professional services; thirdly, there was a message for all British Columbians of encouragement, incentive and ingenuity, and success in providing all British Columbians who are willing — and I'm sure they are — to give a bit of a helping hand to assist this government in reducing not only its spending but also the mounting deficit which has accumulated over the past decade or more.

Mr. Speaker, I believe it is exactly that message that is incorporated in this budget document. It is a budget with a fresh start. It is a budget which is departing from the historical or traditional types of budget. While the previous budgets were in the nature of expectancy for future years of greater increase of expenditures on the part of government by various segments of society, this budget lends itself to both.

This budget contains changes which reflect on areas such as the health and social assistance budgets. Some measures, however, were necessary to affect the staggering increases, some of them not necessarily affecting that of service, but rather providing a secure and guaranteed income to those providing the services.

At the same time, this budget is recognizing the need to protect society in general from what is most talked about and spreading: the disease of AIDS. The Minister of Health has indicated that very clearly on several occasions.

The other day, Mr. Speaker, the first member for Central Fraser Valley (Hon. Mr. Dueck) and I had the privilege of attending the opening of an extended-care unit in the Abbotsford area. As I had the opportunity to speak with several people at that opening — senior citizens, legionnaires and others — they were very impressed with the facilities and care that are provided for our senior citizens, mostly in need. The general answer, if they were asked as to whether they were prepared to pay a little towards this type of service for our seniors.... There was no hesitancy by anyone to provide a positive answer.

This budget reflects the need for balanced budgeting. I would like to ask a question not only of the hon. members of the opposition but of everyone in this House. It's a practical question: how would a banker that you deal with in private business look at it if you had operated your business in a deficit position for a number of years and then came to him with a request not only to extend your loan or mortgage but to continue to add further debt to an already existing debt, without expanding your business assets? I believe we all know what the answer would be. Is the opposition, during this debate, perhaps proposing that this government would find itself in a similar position? Surely not. I'm sure that no British Columbian, regardless of political stripe, would want

[ Page 336 ]

to see this happen to our province, of which we are all rightly proud and which we cherish.

Mr. Speaker, I believe that all the people of British Columbia are anxiously looking forward to the results of what was contained in the throne speech now being applied in budgetary measures. I am confident that every British Columbian, knowing their determination to achieve, is prepared to assist this government not only to achieve its desire for a return to stability in business and labour but to work hard for it as well.

Mr. Speaker, the people I represent in Central Fraser Valley riding are indeed prepared to put their shoulder to the wheel, providing that this government can eliminate wasteful spending and cut back the bureaucracy, which has hampered the ability of the individual to achieve. That is our job as politicians. This process is already underway. It's in consultation with local government authorities, labour and management, and I'm sure much more is to follow.

The people of Central Fraser Valley riding, as well as all British Columbians, have been waiting with anticipation. But they also fully recognize the financial problems any government experiences which accompany a period of recession. However, they expect that when times are improving — which they are in British Columbia — government must move to reduce the deficit accumulated, rather than to keep on spending, as I sense some members of the opposition have suggested during this debate. I find it very distasteful that some members of the opposition have chosen to use the senior citizens and those on social assistance as pawns in achieving their political views and policies. This budget is indeed recognizing the needs of those less fortunate. "How much" will always remain a question, depending on who is providing the answer and who is ultimately paying the bill.

Mr. Speaker, this budget is providing for job opportunities, in spite of the opposition members' comments that it does not. For instance, in the Ministry of Tourism, Recreation and Culture, $15 million is being spent to make British Columbia known around the world as to what it is and what can be enjoyed. This will no doubt have an immediate positive effect on job opportunities. It will provide additional opportunity for those in the production of food and its processing, in the travel and accommodation industries, and much more. In fact, this week I hope to introduce some people from California who are on their way to Victoria to enjoy British Columbia. That's just a sample of the many Californians curious to discover all we have to offer in this beautiful province.

[3:15]

Reforestation spending will increase by 20 percent, a $54 million increase to a program already underway. Which government recognized and initiated this valuable program? This government. The opposition has suggested that this government should spend all funds allocated through the tariffs collected from softwood lumber this year. Are the hon. members of the opposition saying they are interested in short-term jobs, which have been proven a failure in almost every circumstance, rather than in the long-term employment that this budget provides? Long-term employment will provide not only stability in the economy but will rekindle faith and confidence in the elected government and the people of this province.

The Leader of the Opposition stated the other day that he was sorry to see the agriculture budget cut back. This would seem like a regressive step by this government. On the face of it, I guess the president of the B.C. Federation of Agriculture thought the same; at least that's what I read in the newspaper. However, I think it is important that we should not.... Even though there are several sections within the budget and several areas to be addressed, we should not take every part in isolation but should look at what all is contained in this budget and the positive effects this will have in the general economy, which will bring jobs and provide for more output for the farmer as well. I think that is one of the reasons why we can look for a little reduction in the agriculture budget.

A member of the opposition — I believe it was the finance critic — also criticized this government for having cut the interest rebate program which was established by this government to aid farmers during the years of recession and extremely high interest rates. These interest rates have now been lowered, thanks to reduced deficit spending at the federal level which is the result of good, conservative money management. Therefore this type of assistance is no longer required. The agriculture component of this budget still allows for the essential services and programs that are necessary for the agriculture industry.

In addition, this government, through the Minister of Advanced Education (Hon. S. Hagen), is providing a substantial amount of money for the purpose of educating those currently employed as farmers, as well as future farmers for British Columbia, so that they may meet the technological and scientific advances in an industry which by nature is very diverse.

The hon. Leader of the Opposition also questioned the other day whether the farmers in Peace River would still get their funding with the reduced budget. We were assured by the Minister of Agriculture (Hon. Mr. Savage) that we would be looking after that matter as well. Perhaps the first member for Nanaimo (Mr. Stupich), finance critic for the opposition, will remember the dairy subsidy program provided by that generous government of the day. What did it do? It increased dairy cattle prices to the point where the subsidies paid were completely eaten up by what the subsidies provided for. What the industry was never informed of was that when conditions improved, the money which had driven prices up initially would all have to be paid back to the government.

Did such a move make sense to the agriculture community? It certainly did not. Neither was it politically expedient to the government that was responsible for introducing such non-essential programs. Had our government — and I mean this government — not provided for a buy-out program from that unrealistic subsidy program, a program introduced by the opposition during their term of government, the first three years succeeding the New Democratic government would have been the worst years in history for the dairy industry in British Columbia.

Mr. Speaker, several members of the opposition have requested the hon. Minister of Finance to table studies to justify the measures taken by this government through this budget. I believe the Minister of Finance has well outlined in this budget document why he has come to these conclusions and why some measures were necessary. He has also stated what the benefits will be to every individual, as well as to the province of British Columbia. Perhaps, Mr. Speaker, while the opposition has now had a considerable bit of time to digest all aspects of this budget, I would have expected them to table, or at least inform the government and the people of this province to whom they have an obligation to tell, what benefits there are really for the people in this budget.

[ Page 337 ]

Are the hon. members aware of the amount of money each British Columbian will save as a result of the reduction in sales tax? I am sure that this reduction came as a complete surprise to them — at least this is what I picked up from the comments by the first member for Nanaimo, when he made reference in his speech on the budget to having bought a car a week prior to budget day. It sounded as though he felt sorry for himself. Why wasn't there a sense of joy for all the others who would buy a car from that day on? Are the hon. members of the opposition perhaps a bit sorry, showing that if they were the government they could have never achieved such a positive move?

Mr. Speaker, I have real difficulty following the opposition's line of thinking. They have criticized the additional funding for independent schools as well; schools operated by individual school boards, schools which follow the B.C. curriculum, schools which participate in the provincial examinations, schools which are dedicated to following the basic moral principles in life which parents cherish and wish to have upheld through the education process.

The purpose of all this is that when young people leave those schools, they are in fact prepared to face the realities of life. They are prepared to stand their ground on the many difficult issues they will be facing. This is the type of education which emanates from the home, which should always be considered a plus for the country, for it is the strength of the family which brings strength to any nation. It is this kind of education that I would wish to see a lot more of through our public school system, as well as colleges and universities: a level of education which would prepare our younger generation for the real world we live in. In fact, Mr. Speaker, if this type of education were in place, I'm sure the budget of the Attorney-General (Hon. B.R. Smith) would not require the increases each year to keep up with those community crimes of one kind or another.

Mr. Speaker, we are in possession of various documents comparing British Columbia with other provinces as to revenues and expenditures, tax levels and so on, and while I do not intend to go into detail, as a whole we compare very favourably, for which I could say we could be proud, but I would rather say we can be thankful. We all know, Mr. Speaker, of the economic conditions which existed in Great Britain some ten years ago. I'm sure the hon. members of the opposition know as well as this side of the House of the present economic climate in Great Britain. This undoubtedly was accomplished with a lot of debate similar to that which has taken place in this House over the last week. I am confident that it also had to be followed up with a sense of firmness and fairness, but at the outset, Prime Minister Margaret Thatcher made the following comments:

"You cannot pay yourself more money unless you do more work. You cannot print more money unless you produce more goods. You cannot have more jobs unless you have more investment. You cannot have more investment unless you have more savings. You cannot have more savings unless you keep faith with the saver. You cannot keep faith with the saver unless you have sound money. You cannot have sound money if you spend beyond your means. But you can't increase your means unless you increase your effort. And there we are, back where we started."

Mr. Speaker, I'm confident that this government is prepared to apply firmness in achieving and fairness in application.

MS. MARZARI: Mr. Speaker, the need to maintain respect for the legislative process and to establish the credibility of all the members of this House is never more important than during budgetary debate. What the people of British Columbia want to hear from us, their elected representatives, at this point is not only an honest and thoughtful effort to examine the specifics of the proposed spending and revenue generating program for the year but also an analysis of the principles that underlie the plan.

[Mr. Pelton in the chair.]

We appreciate that the hon. Finance minister is faced with a set of crucial choices when deciding how we will raise the money to pay for the goods and services that British Columbians rightly expect society as a whole to provide. So, for example, if the decision is made to raise additional moneys from the public, we recognize that there is a finite set of sources from which these funds can be gathered. Insofar as there's a choice to be made between a generally regressive sales tax and income and corporate taxes, we'd be in theoretical agreement with a budget whose general direction opts for the latter. Sales taxes, in our view, reduce in actual and percentage terms the spending power of the poor and lower- and middle-income groups far more severely than that of well-to-do individuals and corporations. Therefore it is preferable to opt for methods that raise public moneys in the most equitable manner.

The residents of my own constituency, Vancouver-Point Grey, are certainly willing to pay their fair share of taxes, especially when they're convinced that those funds will be spent on goods and services that are top priorities for the well-being of the province. But therein, Mr. Speaker, lies a crucial problem. If we opt for sales tax reductions and income tax increases, then it's vitally important that the principle underlying the increases be one of equity. It's a simple principle. It's easily understood. It's clear from the public and press commentary in the wake of the budget that this principle is fully comprehended by most British Columbians. In fact, about the only British Columbians who don't fully appreciate the import of the principle of taxation equity are the members of the government itself.

[3:30]

It's a fact that the proposed personal income tax increase will have a far more severe impact on lower- and middle-income earners than it will on the rich. The president of the Institute of Chartered Accountants of B.C. has calculated that someone earning $20,000 of taxable income a year — a not especially sumptuous income these days — will literally be paying as much of an increase in actual dollars as someone earning $100,000 of taxable income a year. While lower-income earners — people making $10,000 of taxable income — will pay an extra $64 in personal income tax under this plan, a person earning $180,000 of taxable income will actually enjoy a personal tax reduction. As far as I know, no reputable economist or accountant has argued otherwise. How in the name of equity is this possible? Is the government able to offer a plausible explanation for measures that are patently unfair? In essence, the well-to-do and the largest corporations are let off the hook of responsibility, while lower- and middle-income earners and small businesses are being made to bear the burden. What can the government be thinking of? The actual measures do not even accord with the government's own professed philosophy in these matters.

[ Page 338 ]

We have offered a responsible proposal for the creation of jobs in the forest industry through an intensive silviculture program. The people of Vancouver Island have made clear their need for an Island highway. The provincial organization of municipal officials has elaborated a long-range plan for the restoration of municipal infrastructures that would provide thousands of permanent jobs. In my own riding there's a clear and demonstrated need to hire in the order of 250 additional post-secondary instructors in one institution alone. I've already spoken in this chamber of the requirements for additional day-care services; and today $69 million has been made available through the federal budget to expand day-care services. Are we going to take advantage of that?

All these things would provide permanent employment. All these justifiable interventions in the economy would, all other predicted factors being equal, significantly reduce the unemployment rate in B.C., at a time when such an improvement would help accomplish exactly the sort of investment climate that the government claims it is seeking to establish. But instead of a concrete, coherent plan, what the budget provides are small actual increases in a variety of areas where the public has made clear its dissatisfaction with the record of this government during its notorious restraint period.

I won't denigrate the level of debate expected in this chamber by suggesting that these increases are illusory, but to take an example of particular interest to residents of Point Grey, it is certainly the case that for a post-secondary education system whose quality has been systematically lowered in the past half-decade, actual increases above the rate of inflation will be put to good use by people who have continued to work in that system with surprising good will. Yet in instance upon instance those budgetary increases have taken a token rather than a significant effect.

To quote an editorial from a newspaper that has often supported this government, the editor writes: "Higher education gets a miserly 5.8 percent, which will hardly revive it after the restraint battering it's taken over the years." It goes on and mildly suggests that this may be a time for more public spending in areas that will help the economy of the future, and education is one of those areas. Yet in reality, the $18 million and $20 million budgetary lifts being provided respectively to the universities and colleges will, after inflation, only begin to guard against further deterioration rather than allowing them to do the job that needs to be done.

Inexplicably, the government continues to insist on directly controlling and manipulating programs through the so-called fund for excellence, which, in the view not only of this party but of educators throughout the province, is an entirely inappropriate administrative and budgetary tool.

Similar remarks can be addressed to the matter of student aid. I can only mention in passing that the bulk of increased student aid doesn't seem to be directed to grants but towards loans, and many of those loans — having gone through the press release on Friday — seem to come from a special incentives program which doesn't seem to speak to the real needs of students in this province, particularly those who are locked into a high debt load at this point in their careers. There is no way out for them. The province of British Columbia continues to lag well behind the rest of the country in providing financial assistance to the youth sector, which is doubly hit by high unemployment.

One political columnist has described this as a clever budget, and I suppose that what's meant by that damnation with faint praise is that the government has become more sensitive to the public relations aspect of various issues without having the fortitude to offer genuine solutions. There are several items in this budget that can't even be considered clever, items that my constituents tell me daily are just plain mean.

The budget hit senior citizens when they least expected it. Extra fees for dispensing drugs and medical services hit seniors in the pocketbook, but they also hit seniors where they are most vulnerable: where their health is at stake. One of my constituents put it best when he told me that these new measures put seniors between a rock and a hard place — either they pay the surcharges and cut into already inadequate fixed incomes or they go without medical service they require. Is this the government's idea of a fair revenue measure?

The unfairness of this budget extends to first-time homebuyers. Not only is the new tax on property purchases onerous; it's the highest in the nation. It's also been implemented in a most unfair way. Rather than phasing the tax in and letting the market adjust, this government chose to ambush home-buyers.

Small business, despite the overblown rhetoric in the budget, is also on the receiving end of the government's fiscal stick. If this government was serious about job creation, it would recognize the importance of a healthy small business sector in an overall job-creation strategy and recognize the importance of women in small business as well. Instead, the increase in small business tax will reduce small business's ability to create jobs.

I wonder about the effect of the land tax on big business. Downtown Vancouver is in a vulnerable position, being the so-called hub of the province, in our ability to maintain our status and develop our status as the city on the Pacific trading rim. I would suggest that the 2 percent tax on land in downtown Vancouver could have an impact on the controlled growth of our downtown area.

I'd say small business and big business and developers, all of them usually Social Credit constituents, are now fighting mad.

This budget hits women on welfare with a 2.5 percent increase in welfare rates, not a 10 percent increase, as we've calculated. It also prods them into the workforce. What workforce? It promises seasonal minimum-wage jobs and more family dislocation — from a government which promises to support the family.

This budget hits victims. Legal aid remains at much what it got last year, with $19 million. There's no effort there to help women in the social services. There's no coverage of maintenance chases. This budget hits children in the schools as we downgrade the public system and replace it with a two-tier system of public education, basically.

This budget suggests that when people have private problems, they should be grateful that government gets involved in them; they should be thankful. The hon. member for Langley a few days ago suggested that when her family broke down, she was happy to get day care. I think that is a very reasonable feeling to feel. However, in 1971 there were 39,000 single-parent families in this province. By 1981 that number had doubled. We were looking at closer to 80,000 single-parent families. I must say that the number of day-care spaces for the children of many of those families did not double. It did not grow. The subsidy rates remained very low and still remain very low.

Mr. Speaker, I would say that the reason for the lack of analysis in this budget is that there is a mentality in the

[ Page 339 ]

government, which I should finally comment on, that basically doesn't like people. The member for Langley said: "What we want to see is people helping people." But government didn't seem to be a part of that picture. People helping people and people trusting people is what government is about. Yet in this House today I have heard native self-government being called a pig in the poke. I have heard the Minister of Health (Hon. Mr. Dueck) suggest that there is abuse in every sector and in every person. I have heard suggestions that there is basically an anti-government feeling on the part of our government.

We had a chance for a fresh start which could have married the jobs that need to be done with the money that is available to do them. We had a chance. We could have developed a plan that combined the economic goals of regions with the overall provincial economic development. We could have promised loan guarantees to labour-intensive small business and secondary industry that would have made a difference. We could have offered decent support, above subsistence levels, to children. We could have invested in the kind of educational facilities that would attract educational professionals here, rather than forcing them out and keeping them away. We could have given the kind of welfare rates to low-income mothers that they could think beyond what is in the fridge at the end of the month, so that they could think about retraining the following day.

We didn't do these things in this budget, Mr. Speaker, and I would suggest, after having been in this House for three weeks, that what we have here is basically a government that doesn't want to analyze, that doesn't believe that people helping people is a goal or a mission for government to have.

DEPUTY SPEAKER: The Chair recognizes the government House Leader.

AN HON. MEMBER: You're on.

HON. MR. STRACHAN: Yes.

AN HON. MEMBER: Who's supposed to speak?

HON. MR. STRACHAN: I think it's the second member for Cariboo (Mr. Vant). However, I'll wing it. Like my colleague the opposition House Leader said: "This is a great speech I am going to make, and I can hardly wait to hear it."

However, at the outset, Mr. Deputy Speaker.... Oh, there is the member now. I will first of all offer congratulations to the member for West Vancouver-Howe Sound (Hon. Mr. Reynolds) on his election to the office of Speaker; and to you on your election, sir, as Deputy Speaker, a job which I know you will do very well and one, to some degree, for which I envy you, having held the position for some time and knowing what a great job it is; and also to the first member for Langley (Mrs. Gran), who is appointed as our Chairman of committees. I am just filling in, Mr. Member, for a few minutes, and then we'll let the.... Do you want to let another government member speak after I am finished my brief sojourn?

Interjection.

HON. MR. STRACHAN: Fine. Thank you very much.

But maybe I will say a few words about the budget, since I have taken my place in debate. I think it is a great budget, just a superb budget. This is the time to applaud, gang. [Applause.] Thank you.

The previous speaker mentioned some concerns — and I guess with good intent — that we are maybe singling out people who do require greater benefits from government, and indicated to us that, in her opinion, she wasn't happy with the government's attitude on helping those who are less disadvantaged.

Well, as we can see in the budget speech, there is remarkable assistance for the disadvantaged, and our government has made that a major priority. We note that the welfare rates for families and single parents will increase by 5 percent on June 1, 1987, and another 5 percent December 1, 1987. We have to accept that that's a remarkable and rather large increase to those people who are disadvantaged, particularly the families and single parents.

We note as well that the maximum shelter allowance for GAIN recipients will be raised by an average of 6 percent on December 1, 1987; that day-care funding will increase by 30 percent to $26.7 million, to help single parents get back into the workforce. I would submit that that was exactly what the second member for Vancouver-Point Grey (Ms. Marzari) was discussing in her speech, but she obviously missed the intent and the impact of our budget to in fact help those people who need day-care services — and how day-care services can help single parents get back into the workforce.

It may come as a shock to you, Mr. Speaker, but when my wife and I had our first child, we used day-care services. I really found it most beneficial in arranging our work life. My wife could continue on with her career and I could continue on with mine, and we were assured that our young son was receiving the best early-childhood education available, and I think it was to his benefit as well.

[3:45]

I would really be opposed to any comments that might come from the other side of the House with respect to our provincial government's position on helping those who are disadvantaged. We have clearly indicated that we're going to address and increase welfare rates. We're going to increase the allowance for GAIN recipients. We're going to increase the funding for day care, and I think that's essential, particularly when we look at the impetus that increased day-care funding will give to, in fact, allowing parents to get back into the workforce. Furthermore, it should be noted that funding for services for the disabled is to be increased 15 percent to $147.7 million. That is commendable, and with that said, I think it's very difficult for the opposition or for any interest group to be critical of this government in terms of our intent and our willingness to assist those who need to be assisted and who don't have the advantages of the rest of us in the province.

It should also he noted, Mr. Speaker — and this, again, is commendable — that the high standards of health are to be maintained. The total funding for the Ministry of Health will increase 8.1 percent over the 1986-87 budget to $3.18 billion. As all members of this assembly and, I'm sure, all citizens of British Columbia are aware, the Ministry of Health expenditure is the most significant expenditure in any budget, and has been for at least the last ten years. At least one third of the total provincial budget goes to health care. I think it's commendable to see that being increased.

Briefly, I'd like to make a few more comments. Speaking a bit parochially — if you'll allow me to speak on the funding for colleges, institutes and distance education rising by $38.4

[ Page 340 ]

million or 5.8 percent — as a member from the central interior, I've long been concerned about those students who, although they can take the first two years of post-secondary education for university transfer purposes or for technical school or vocational training in Prince George, are required, if they're going to carry on at the senior level of university, to attend a university outside their area — although in some cases there are certain extension programs that apply. But generally, the Prince George student wishing to finish his undergraduate program and do the senior years of undergraduate work must attend a lower mainland or Vancouver Island university. I was pleased to see that we have specific mention of students who have to travel, and I was also pleased to see a press release from the Minister of Advanced Education and Job Training (Hon. S. Hagen) on Friday that indicated that more funds would be allotted to students travelling to lower mainland universities. It would accommodate their transportation costs and their accommodation costs, and I think that's commendable. Not every town, even a reasonably good-sized city like Prince George, which has 67,000 people, can have a university. I think the next best thing we can do, if we agree that universities or full degree-granting institutions cannot be made available in every area of the province, is at least take those students from the central interior and other rural areas of British Columbia and help them defray some of their costs as they do their university at our recognized institutions.

I was also pleased to learn that there is going to be a further increase in loan remission for students who take out student loans. That figure will rise to $12,000 for a student completing a four-year program. That's $3,000 per year, and will indeed go a long way to helping students from Prince George attend lower mainland universities. The remission is, of course, contingent upon the student graduating from the program. I think that's commendable as well, because we don't want to subsidize students who don't have the intent or the capacity to finish their programs. But for those who do finish their programs, I think it's remarkable that the government is going to increase that loan remission. That will certainly go a long way in helping those students out.

I guess that's my five minutes, Mr. Speaker. In closing, I thank you and the other members for your indulgence. I can advise the House that at a quarter to six this evening I will be voting in favour of the budget, and I would ask all of my colleagues, even those opposite, to join me in voting yes on this wonderful budget. With that said, I thank you again, Mr. Speaker, and I look forward to the remarks of the second member for Cariboo.

MR. VANT: Mr. Speaker, I too rise to support the government's budget as tabled in this House on March 19 by the hon. Minister of Finance with, I must add, the assistance of his hard-working staff. Since I've been sitting in this House listening to the debate on the budget — and on the amendment as well — I'm amazed at the socialist side of the House giving very little credit where it is due. They don't seem to recognize good news at all. In this more positive House, I'm told I should be grateful for small mercies; there must have been none before.

But there is hope, because the first member for Vancouver Centre (Mr. Harcourt) said, in his speech on the budget: "Hope is at hand. We are optimistic, positive people. We're not negative, doubting people like some of the members on the other side." Well, I hope that when they select the first member for Vancouver Centre as their leader, they will indeed become more positive, as he claims they are. After all, I guess it is better to be on a love boat going somewhere than on an immovable fantasy island conjured up by some socialist philosophers. This island isn't as much of a fantasy as it used to be, because of the new members from Cowichan-Malahat and Comox. Indeed, in his speech the opposition House Leader, the hon. member for Coquitlam-Moody (Mr. Rose), spoke of heaven and hell. Gee, I thought I was going to hear a sermon. Somehow the hon. member ran out of time before he got into anything significantly meaningful or memorable in the here and now, but it was delightful to listen to, and very entertaining.

Mr. Speaker, like this excellent budget I shall dwell with the reality we all live in, which is in between: the realities of the real world in 1987. The members on the opposition side never seem to mention the fact that we are coming out of a worldwide recession. Sure, till 1981 we were floating along with inflationary, ever-rising commodity prices, which suddenly declined and declined. The recovery is happening, I'm very happy to say, without runaway inflation. In light of the new realities we all face, change is necessary. New approaches and a fresh start are required at this critical time by a government that is close to the people: close to the people who need help, and close also to the job generators, without getting on their backs.

This budget is making B.C. a more attractive place to live in, to invest in and to visit. In 1986 B.C. gained 2,074 people. In that same year Manitoba lost 2,827 people. The Premier is going many extra miles to present our province in a positive, inviting light. Expo put us on the world map. Our follow-up is essential and absolutely necessary. This budget is a people budget. Less money for blacktop. Less money for running government ministries. Even the Minister of Finance cut the funding for the Ministry of Finance and Corporate Relations. Less money for the Provincial Secretary and Government Services — cutting down perhaps on protocol, Geritol and alcohol. More — way more — for Advanced Education and Job Training: over $800 million. Again this year, way more for education — $1.367 billion, an 11.4 percent increase, even though last year there was an 8.5 percent increase in funding for education from kindergarten to grade 12, plus bonus Excellence in Education funds.

I'm very happy that Energy, Mines and Petroleum Resources will get a 13.8 percent increase. The government, after all, gets a lot more from the mining industry than it gives. Assistance for prospectors with more up-to-date geological information, available not just in Vancouver but throughout the province, will help us discover and tap more of our mineral resources. And having no sales tax on dynamite, drill bits and grinding media will give mining a $10 million break. Almost 10 percent more money for Environment and Parks; way more for forests and lands, a 22 percent overall increase, $75 million more; and a very reasonable, responsible increase for health care, featuring free acute care, free outpatient services.

Mr. Speaker, I must admit, though, that I am sorry to see the user fees go. I'm not saying that because I'm a right-wing Socred; only because most citizens were happy to contribute something towards our health care system. The great W.A.C. Bennett started medicare, and the dollar-a-day at that time was about 7 percent of the actual cost. The $8.50-a-day user fee for our hospitals was only 2.2 percent of the actual cost. No one was ever denied medical care if they couldn't pay.

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This budget is realistic, responsible and yet very caring. It doesn't discriminate against groups of people, even by giving private schools more in recognition for their contribution to a necessary variety of educational opportunities for youth. They also save the taxpayer something in the area of $80 million. It's certainly not robbing Peter to pay Paul; it's just giving Paul a mere token of recognition for doing a good job. Both are winners in this budget, both public and private educational programs.

In the Cariboo constituency, Mr. Speaker, the mainstay of our economy is our forest industry — pulp mills, plywood plants, lumber mills. We know that our money grows in trees, not on them. We know too that we need to diversify our economy. Even with improving silviculture, our annual allowable cut cannot expand forever. With less manpower and more technology, the forest industry will be of benefit for a long time, and survive the down cycles, as it always has.

To the end of last month, that is — 11 months of the 1986-87 fiscal year — over $10 million was spent on silviculture in the Cariboo forest region. We welcome the responsible increase in silviculture announced in this budget for the next fiscal year. I say "responsible increase," Mr. Speaker, because I agree — yes agree — with one small part of what the first member for Vancouver East (Mr. Williams) said in this House the other day. Sometimes up to 40 percent of seedlings die. I wonder why, Mr. Speaker. Obviously, spending money and planting over 200 million seedlings per year is not enough. How we do it is critical. Maybe we have been listening to experts for too long. The effect of the increase in the Forests and Lands ministry budget of 22 percent will depend, I sincerely believe, on the forest management review process to decentralize critical decisions, and to have a new innovative procedure for more responsibly and carefully managing our forests.

In diversifying our economy, tourism is growing in the Cariboo. Increases in the Environment and Parks ministry budgets will help restock our 8,000 lakes. The big increase in the Tourism, Recreation and Culture budget, in partnership with private funding, will be of great help in promoting our area, in the great Gold Rush Trail thrust. Barkerville, now under this ministry, will receive additional funding and will become an even more popular destination and drawing point. More people will be employed in the Cariboo as tourism grows. So we in the Cariboo welcome the 70 percent increase in tourism-promotion spending in this budget.

[4:00]

This budget is different. JobTrac has doubled. Special programs for employable people on social assistance and extra funding for day care for young single-parent mothers and fathers to allow them to continue their education or become gainfully employed are most welcome. This government, by its budget, certainly cares. There's $147 million for the disabled to assist them to participate and have meaningful lives in our society.

I could go on and on about all the good things, the sweet things in this budget, Mr. Speaker, things like the lower sales tax. There's no sales tax on meals. Goodness gracious, in Manitoba they now have a sales tax on even take-out meals. There's more money in this British Columbia budget for people to spend. Indeed, with the drop of the sales tax by just one percentage point, it puts over $250 million in the hands of the people.

But reality involves the sweet and the sour. Well, Mr. Speaker, the question is, how fair is this budget in its revenue, in its taxation part? I am being realistic, because it is only a socialist myth that you will get something for nothing. Does this budget tax those with the ability to pay? I say yes. Given the safety nets, no low-income or elderly people will pay more. After all, shelter allowance went up 4.7 percent last October and will go up again soon, thanks to this budget, a further 6 percent. GAIN will go up $125 to cover those dispensing fees. The average low-income old-timer will gain by GAIN. No one will pay more than the $125. The government will still pay out almost $100 million for Pharmacare and the free drugs. Free drugs for our senior citizens. Free drugs for residents of long-term care facilities and those on social assistance.

I ask who will pay the most on the property transfer tax. Certainly not the poor, especially on big, luxurious homes and big commercial buildings. Again, Mr. Speaker, I say it will be those with the ability to pay. What about the small business income tax increased from 8 percent to 11 percent? Wow! Well, if a small business was going broke, they wouldn't have any profit, so they wouldn't pay any tax anyway. As I am sure both sides of this House will agree, the key to job creation is through small- and medium-sized businesses. Well, the increased tax on small business not only prevents possible abuse by incorporated professionals, but it is also an incentive for small business to spend its profit improving and expanding their businesses and hiring more people. Spend the profit; don't accumulate it and get taxed.

The hon. first member for Nanaimo (Mr. Stupich) described Manitoba as some kind of utopia. How can that be, Mr. Speaker, with their higher per capita debt, their sales tax going up to 7 percent, and a very high personal income tax rate of 54 percent plus a 2 percent surtax on middle-income people, plus, to add insult to injury, a payroll tax increase increasing it to 2.25 percent? Government is on the backs of the people in Manitoba, on the backs of the little guy, the workers in Manitoba. Do you know something, Mr. Speaker? Manitoba lost 2,000 jobs last month, in February 1987. British Columbia gained 16,000 jobs in February 1987, according to Statistics Canada. No wonder people are leaving Manitoba. The first member for Nanaimo said on Friday morning, March 20, that our Minister of Finance ought to have followed the example set by Manitoba. Well, words can't express how glad I am that our Minister of Finance didn't. Thanks to the four-and-a-half-month IWA strike, our deficit soared last year to a record $1.17 billion, and the hon. first member for Nanaimo mentioned that he doubts our projections of a debt this year of $850 million. I wonder if he's trying to prophesy for us on that particular statement.

I am so happy that our Social Credit budget is striving to reduce that deficit. On a per capita basis, Mr. Speaker, when it comes to net debt, Manitoba is really in the hole. On March 31, 1985, the average person in Manitoba was faced with a net debt of $6,588. That's per capita — every man, woman and child. By March 31, 1986, due to socialist mismanagement, this soared to a per capita net debt of $8,022. Now I'm sure the members opposite are anxious to hear the British Columbia figures for those same periods. Well, for B.C., on March 31, 1985, the net debt per capita was $5,584. A year later it hadn't increased dramatically. On March 31, 1986, it was only at $5,846 — quite a comparison.

In the Cariboo, as I said when I seconded the Speech from the Throne, we need to diversify our economy. We in the Cariboo welcome venture capital corporations. We welcome

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the possibility of a freshwater aquaculture industry. We welcome the huge 28 percent increase in the budget for the Ministry of Economic Development. We welcome special funding for new initiatives for economic diversification and for community-based economic initiatives, which are most encouraging to us. We in the Cariboo are doing better what we have always done: logging, mining and ranching. We need new value-added diversification. Also, of course, we need new markets for our products. We are setting the stage for future success in all our endeavours, thanks to the good things in this budget.

Finally, I hear suggestions from the opposition side: "Make-work jobs. Hire 20,000 people for silviculture now," shouts the first member for Vancouver East (Mr. Williams). Mr. Speaker, it reminds me of the dark ages between 1972 and 1975 when the government of the day hired and hired and hired. Sure, young people were on the payroll. I know from firsthand experience in our provincial parks such as the Barkerville park that they had no tools, no materials to work with. They got really tired of raking those campsites over and over again. Our young people want long-term, meaningful jobs. Silviculture needs a new generation of forest workers, properly supervised and equipped, or we waste money, get poor productivity — and yes, we get dead seedlings.

Mr. Speaker, this budget is a caring budget, a fair budget and one that sets the stage for opportunities for further progress and success in our great province for all its citizens. I am proud to be a part of this government, and I congratulate the hon. Minister of Finance on his first budget, which manifests some significant changes: more help for the disadvantaged, more educational opportunities for our youth, a very fair means of raising revenue for programs for people.

This side of the House should be pounding their desks at this time. It is a forward-looking budget with long-term benefits down the road. British Columbians are generous people; it is properly reflected in our budget. More of the expenditure pie goes to health and education in British Columbia than in Manitoba. Yes, Mr. Speaker, we are positive and optimistic, and with this budget, which is in keeping with the Premier's promises set out in the throne speech, we have every reason to be.

Thank you, Mr. Speaker, for this opportunity to participate and support this budget.

MR. WILLIAMS: Mr. Speaker, I would like to follow on the speech from the second member for Cariboo and elaborate on the generosity of this government indeed. He said that it is a generous government. Indeed it is, and I don't think anybody on the other side has any idea how generous it is, in terms of the way you treat the corporate sector and especially the forest industry in these good times. I will get on to that generosity shortly so that the member for Cariboo and the others can be enlightened shortly.

Firstly, I would like to say something kind about this administration, and I hope members, especially on the other side, are all ears. I would like to commend the Premier and the government on improving the budget of Her Majesty's Loyal Opposition. I would like to commend the Premier for meeting with us with respect to these problems that the opposition has had, and I would like to thank his principal secretary, Mr. Poole, with respect to this activity as well.

The improvements, while not everything the opposition hoped for — needless to say — were significant, and to that extent I hope and expect that it will improve the democratic process and allow the Leader of the Opposition and the opposition to more effectively do its job. So we're a long ways from the circumstances of the official opposition in Ontario and a long way from those in Quebec and a long way even from those in Alberta, but it is still a significant improvement from the dark days of Mr. William Richards Bennett, and for that we are thankful.

You know, the main thing I want to talk today about again, because it is so significant, is the question of the revenues we get from our primary natural resource in this province, our forests. We tend to see stories in the newspapers that sort of pop up, develop and become quite significant for a period of time. That was the case with respect to the U.S. tariff and the softwood question.

But most of these stories really have a bigger story behind them, if you really want to do some digging and do some analysis, if you can get the necessary pieces of information. So the softwood dispute with the Americans was one of those kinds of stories: important, a major news item both before, during and after the last provincial election, but still a significant story, maybe even more significant than we thought.

[4:15]

The Americans, as we all now know, have a competitive bidding system for public timber on their public lands. They knew that there was something disastrously wrong in British Columbia in terms of our revenues, for after all, we get minus $200 million to minus $300 million annually in our net revenue for our forests of British Columbia. Now the costs of running the Forest Service and planting trees is $350 million a year. Our revenues are going to be about $150 million this year. But to that you would have to add the allowances under section 88 which are about $80 million, I think, or something like that. So we are talking about minus numbers for our public timber, and I think that has to be thought about and developed.

As we all know, the Americans were kind to us. They were the good cop. They let us have the fine money which is going to total $350 million in this current budget for us in British Columbia. Well, you know, there was a study done by the Forests ministry, the forest management review that came out on January 13 this year. Most people have forgotten the original purpose of the forest management review. It was to look at this revenue question. It was to look at this lack of revenue in the forest industry. It was to look in more detail at what the Americans had been accusing us of off and on over the last half-dozen years. The report, of course, mainly skirts the basic question.

They say that in effect there is inadequate methodology in the stumpage system, and they look at the Vancouver log market, which is the determinant of revenue on the coast for us, and they are a little more frank there. They say that the Vancouver log market is inadequate as a measure of true value of public timber on the coast because there are not enough arm's length transactions between buyer and seller. Academics at our universities have been making this clear for some time. The real values in fact are not picked up by that market, which is a kind of manage market without arm's length transactions, at least to the necessary amount.

So the question is, then: what are these real values, and to what extent are we cheated in the province in terms of revenue for public timber? During the throne debate I referred to the problems we had with inadequate measure and inadequate scaling at Shoal Island, and probably several other operations on the coast as well. Chief Justice McEachern confirmed the

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short measure at Shoal Island, and that is now on the record. What we have, I think, is something that was endemic during the Waterland-Apsey years in terms of managing public timber and supposedly collecting the public revenues for that timber. Consistently there was an undervaluing of the public timber. It happened in the stumpage system, and the Americans proved it. It happened in the scaling system, and a chief justice has decided that. It also happened under section 88, the credits given for works against stumpage. The truck loggers' consultant who worked with the ministry confirmed that as well — that there were excessive credits for work done under section 88 and that there was a consistent pattern of overestimating the costs and being allowed to keep the difference between estimated costs of construction and the real costs of construction, which appeared to be generally about 25 percent less than the estimated cost.

If the Americans were right, Mr. Speaker, then this stumpage shortfall applies to what we export to the rest of the world and what we sell in Canada, because only a little over half of our timber goes to the Americans. Remember that we're getting $350 million in new stumpage revenue through the export levy. If they're right — and we accepted that they were right, with respect to lumber sold to the Americans — then they're also right with respect to timber sold to Japan, the Orient, Europe and the rest of Canada. That's a lot of money, members.

But there are other gaps as well, and interesting ways of looking at and seeing the measure of the difference. Another one is in the log export business out of the coast of British Columbia. Logs are sold as raw logs to China, Japan, Korea and the Pacific market at far more than we say they're worth in British Columbia — the so-called Vancouver log market, which the ministry and the academics now say does not reflect the real value of logs. The numbers are very different. What's been happening in terms of log export in this province is that we've gone from 2 percent of the volume of coastal production to 12 percent in the last year. It's 12 percent of the volume of coastal production.

Then you should look at it in terms of value. The valuable species are more and more the species that we export from British Columbia. So we're talking about 12 percent of volume. I suspect something like 20 or maybe 25 percent of value from the coast is going out in the form of raw log exports. Under the new, now former, Minister of Forests, the member for Omineca (Mr. Kempf), this order-in-council was passed on December 6 of last year. The areas in pink and blue on this map that I have here are the areas where you can export logs freely from the province. That's everything from northern Vancouver Island to the Alaska panhandle — free exit permit for logs going out of the province. It's an area the size of West Germany where we allow free export of logs to this high-value Pacific market.

Why is there the kind of scramble we've seen, Mr. Speaker, to export into that market instead of selling to sawmills, pulp mills and small operations in British Columbia? The answer is very clear. It's money: money in the pockets of the exporter, clear and simple. Instead of the government getting the difference between the Pacific or Asian market and the so-called market in Vancouver, the bulk of the difference goes to the exporter.

Interjection.

MR. WILLIAMS: Is it any wonder that people would want to get into the log export business? Including, maybe, members of the Legislature. It's very clear that there's much more money to be made in exporting logs than in selling them to a mill in British Columbia.

Let's look at the average export log prices in March 1986, Mr. Speaker, and compare that with the Vancouver market in that same period. Balsam was $90.76, and $39 in the Vancouver market. Fir was $138 a unit, and $54 in the Vancouver market. Hemlock was $89 in the export market, $37 in the Vancouver market. Pine: $140 in the export market, $22 in the Vancouver market. Spruce: $183 per unit in the export market, $76 in the Vancouver market. Think about those numbers and the differences they represent between the export price and the Vancouver log market price: $51 for balsam, $83 for fir, $52 for hemlock, $117 for pine and $107 for spruce. Absolutely incredible differences.

Those differences, more than anything else, explain why log exports are so high today. There's a huge windfall profit to be made there. The Crown should be tapping that, but it is not. There is a levy with respect to export logs, but it's a relatively modest one and not realistic relative to the difference in value; so there's a lot of money there as well. Needless to say, the export values don't get pumped into the analysis for the stumpage system, so that those prices for export are outside of the stumpage game in measuring what the Crown should get.

Is it any wonder, in something as sweet as this in terms of the log export game, that there should be so many bees around the honey pot? I don't think so.

Interjection.

MR. WILLIAMS: Only the member for Port Moody could say that.

It's a scandalous amount of revenue, Mr. Speaker. Shoal Island showed great losses in revenue for the Crown; the Americans showed great losses in revenue for the Crown; Mr. Hopwood, the forest consultant, showed great losses under section 88; and the log export game shows great losses as well.

The difference between the Vancouver market and the log export market in the last fiscal year was something like $100 million. Not a modest amount — a shortfall between those two markets, in terms of logs exported, of $100 million. Then you have to think about, well, we lost $100 million in exports to the Pacific market and somebody else pocketed most of that money. Then you have to think about that Vancouver market with respect to the rest of the logs we sell to our own sawmills and pulp mills in British Columbia, because that Vancouver market should clearly be higher.

So it's not only $100 million lost in the export, it's a huge amount in terms of underpricing within the Vancouver log market — already a rigged market, as your staff in the ministry now clearly says. That's a tremendous shortfall. And you narrow-sighted free-enterprisers on the other side never, ever see the big numbers that are there in the cheating of the public purse. By allowing this cheating, you prevent the proper service of all citizens in British Columbia, through the non-collection of these legitimate revenues for the Crown. We could be schooling and hospitalizing and serving our citizens on a far better scale and by far better standards if we just began to collect the revenue that is legitimately ours in terms of natural resources.

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But there's an even bigger area, Mr. Speaker, that is not covered under this budget or the last budget, or any budget since the days when this party was government in '72-75, and that's around the question of what is charged for chips that go into pulp mills. Only in those years between '72 and '75 was that grappled with in terms of a decent pricing system, and reflecting it in stumpage and in prices to the small sawmills. Let's understand what this is all about. Chips are the residual or the byproduct from producing lumber out of whole logs, and throughout the interior there's pretty well a balance or a surplus in chip production that feeds the pulp mills of the province. Some mills still use round logs, but we're pretty well in balance, and in areas there is surplus.

The problem, in terms of the economics of this problem, is that the small-scale, unintegrated sawmills generally aren't getting the full value for the chips. That doesn't matter in an integrated corporation where they own the pulp mills and the sawmills, and that's the case in much of the province. But the problem is that a real market price is not obtained for those chips, because we only have so many sawmills, and because of the distance to the sawmills and the transportation costs to get there. It's what economists call an oligopsonistic market, in which there are hardly any buyers and many sellers. That's the problem: it's a kind of monopoly game with the pulp mills that we have and the pattern of geography in British Columbia.

There is one small exception, and that's Fibreco, a consortium of independent mills that exports out of Vancouver, sends their chips for export abroad. That way, they're able to get international market prices for their chips. The only people in British Columbia who get the international market price for chips are Fibreco, the small consortium of independent mills that exports out of Vancouver.

Again, how do we find out what the differences are? Well, it's relatively easy. We can go to the U.S. northwest and see what chip prices are there, in terms of serving the pulp mills in that region. If you look at that, and if you look at, say, an independent unintegrated mill here on the coast in terms of what they get for hemlock chips on a bone-dry unit basis, an independent mill here on the coast might get $70 for hemlock, compared to $77 to $108 in the U. S. northwest. For fir, it would be $65 per bone-dry unit on the coast and $88 to $101 for the same unit in the U.S. northwest. For cedar, it would go from $35 on the coast per bone-dry unit to $61 to $74 in the U.S. northwest. There is clearly a consistent pattern of a shortfall of $15 to $31 per bone-dry unit, in terms of the pricing system north and south of the border. The interior has a somewhat different system, a somewhat better system, but it still suffers relative to the market.

Then we have to look at what's happened to pulp prices in the last year and a half. Pulp prices have gone up about $200 a tonne — $170 in the last calendar year, from this date one year back; and the projections are for above $200 in the next quarter. It has been a cash flow gusher such as we haven't seen in decades in this province for the pulp sector of the forest industry. Then — think about it — there was a four and-a-half-month strike during the last year for the forest companies. The forest companies have not had such returns in their modem history, and they had these returns, I suggest to you, out of their income from pulp. They put up with a four-and-a-half-month work stoppage; yet it's never looked better for them — the best year in ages.

[4:30]

We have to ask ourselves: if the American prices are up around $80 per bone-dry unit, what gets plugged into our stumpage appraisal system in British Columbia? Can anybody over there tell us? I'm sure you can. It's $10.50 per bone-dry unit, the number that a former administration inserted in 1973 — no changes whatsoever. What does that mean in terms of the real numbers? Well, it looks to us like something well over $200 million, something probably in the $300 million range, in terms of underpricing of chips going into the pulp mills of the province — a shortfall of that scale. Ten dollars is the number you people plug into the stumpage appraisal system, and the real number is something like $80. That's incredible. That is scandalous in terms of legitimate revenues for the Crown.

What does an increase of $200 a tonne in pulp prices over the last year or so represent? We turn out something like six million tonnes of pulp annually in this province. It would be more now because they are working to capacity. At $200 times that volume, it comes to $1.2 billion in terms of new revenue for the pulp companies, for the industry — a tremendous amount of money. What we really have to do, though, once you go through these numbers.... They may be a little boring, but they wouldn't be boring for the poor who don't have jobs in this province. They wouldn't be boring for the 20,000 people who should be working in reforestation, because if we took these numbers seriously we would be employing more and more thousands of British Columbians in British Columbia, without raising the taxes of the average citizen one damn penny — not one penny.

These numbers are important because they show us the score. We know that the way the game is played, the corporations win and we lose. The owners of the trees of this province are the losers; we know that. But the numbers are huge: $1.2 billion in new money for the pulp industry of this province, in terms of their revenues, and no increase in revenues for the people who own the trees; none whatsoever. This was a matter that was addressed by Apsey, was addressed by Waterland, and never, ever dealt with. They knew the kind of gusher of cash flow this was for the industry, and they never, ever dealt with it. They never put the honest numbers into the stumpage formula at all.

So what are the losses, Mr. Speaker, in terms of the Crown? Three hundred and fifty million dollars, thanks to the U.S.; probably another $300 million that should apply on stumpage fees on the Canadian, European and Asian markets; probably another $100 million in log exports in terms of the gravy that is given to log exporters that do very little in terms of improving the economy of British Columbia; and something probably approaching the $300 million level in terms of chip pricing, which should legitimately be revenue for the Crown. Then throw in something for the scaling errors at Shoal Island and the rest of the scaling operations in British Columbia, and we are clearly talking about something close to a $1 billion shortfall annually in terms of legitimate forest revenues for the people of British Columbia.

I suspect that the former Minister of Forests, the member for Omineca (Mr. Kempf), may have been on to these numbers; that he may have begun to realize how dramatic the shortfall was here in terms of legitimate Crown revenues for public timber. Unfortunately he's not going to be around to deal with that. He went through a learning period, and I think he saw that these numbers were pretty real and substantial, and what a huge loss it represented to the Crown. We're

[ Page 345 ]

going to lose the benefit of that understanding for other reasons.

When you think of the corporate side, Mr. Speaker, is it any wonder that M&B just split their shares? They're giving out three for one. The shareholders of MacMillan Bloedel, just the other day; Adam Zimmerman smiling; no questions asked at the annual general meeting.

Interjection.

MR. WILLIAMS: None whatsoever. All of this, despite a four-and-a-half-month work stoppage. No wonder. Until these numbers are plugged in in terms of revenue for our trees, we will never, ever have an honest budget in British Columbia. Until these real numbers are bumped in, the real numbers for log exports, for chip prices — real, genuine, honest scaling carried out by the province of British Columbia, not by privatized scalers and corporations.... Only when we get a budget that has the honest numbers in terms of all of these legitimate revenues will we have a budget that truly will serve the people of British Columbia.

MR. SKELLY: I'm pleased to have the opportunity to take part in this budget speech. Some members have suggested that I was away for the first part of it, but I had intended to come back and take my place in debate, of course. I want to apologize to the members of the House for my absence during the first part of the budget debate. It was for this reason, Mr. Speaker. I have two children. One is 13 years old and one is 11 years old. They go to school here in British Columbia, where we have a tradition, at least since the NDP government was in office. That tradition is called spring break. After three years as Leader of the Opposition, I made a commitment to my children that I would go away with them at spring break for the first opportunity that they had had to spend spring break with me in three years.

I intended to live up to that commitment, and I did live up to that commitment. So what I did was take my children to the state of Massachusetts. I think that the House here would probably stand in good stead if they studied a bit about the financial and budgeting processes in the state of Massachusetts, but I'll get into that later. The one thing I wanted to show my kids that they cannot see here in British Columbia — aside from Lexington and Concord and the Salem witchcraft trials, and all those other things that they like to see.... Well, they may see a few of those in this province, but one of the things my kids wanted to see was a "Help Wanted" sign. I told them there were a few up on some of the buildings when we were in government back in 1972 to 1975, but they hadn't seen any since then, and they were wondering what the problem was. So I took my kids down to Massachusetts to show them a "Help Wanted" sign. People down in the state of Massachusetts are looking for work and finding it. Up in British Columbia they're looking for work and they're not finding it, and that's a serious problem.

Interjection.

MR. SKELLY: There are lots of "Help Wanted" signs there too.

If we had as many people employed, or the same rate of employment in Australia, everybody in British Columbia would be back to work. I listened to these fine members in the back bench of the Social Credit Party — where they will always be confined, at least till the next election — talking about the number of people who leave Manitoba....

Interjection.

MR. SKELLY: Some of them may leave before the next election.

But in any case, Mr. Speaker, Manitoba's economy in terms of employment, in terms of economic development, in terms of economic activity, is performing far better than the economy of British Columbia. And this budget is one of the reasons why this economy is not performing as well as it should be, and it's also why so many British Columbians are leaving the province and going to Manitoba, or going to Ontario, or going to Quebec. I'll tell you, they've gone through the economic recession of 1981, and this province is still mired in it, as a result of your attitudes, as a result of your budget, as a result of your kind of economic thinking. That's the problem.

Mr. Speaker, I wanted to talk a little bit about the budget here. I thought this budget was going to be a fresh start. I thought it was going to be something new for the province of British Columbia. It may be new for some of these rookies who occupy the back bench of the Social Credit Party, but for those of us who have been here for a certain period of time, it's very much the same; based on the same economic ideology that we've seen in the past in this Legislature. What was needed in the province of British Columbia, and what we expected from this new Social Credit leader, was some bold and courageous efforts that would bring the economy of British Columbia back on the track again; that would revive this economy and expand the economy and create new employment.

What do we have in this budget? Even the Minister of Finance himself admits that the unemployment rate is going to remain at approximately 13 percent. Thirteen percent! He's not talking about Port Alberni, my home constituency, when he talks about 13 percent. He's talking about the averages. In Port Alberni it's going to be somewhere between 30 percent and 40 percent who are unemployed. These aren't lazy people. They're not people who aren't used to hard work, hard work outside in the forest industry — a very dangerous industry. These are people who have worked all their lives and contributed to this province all their lives. They have done their share for the province of British Columbia. Look in the budget, Mr. Speaker. What is this province doing for the people of Port Alberni, who contributed their life's work to enrich this province and expand this province? This budget does nothing for my constituents, nothing for the people in the forest industry — absolutely nothing. You ought to be ashamed of yourself.

What this budget needed, as I said, was some bold, new strokes, a new look at the economy of the province, not the hidebound, ideologically dominated approach that these people have used from time past; not the hidebound, ideologically dominated approach that we've seen in budget after budget after budget coming out of the Social Credit side. What we needed to see in this speech was some hope for the future for our people in British Columbia, for seniors who are retired and living on the very thin edge, on the margin, at the subsistence level and below. What we needed, Mr. Speaker, was a budget that was going to seriously address the needs of those who are living far below the poverty line.

[4:45]

[ Page 346 ]

I'm very proud of the speech that that member made in the Legislature, the member for Coquitlam-Moody (Mr. Rose), when he was talking about the Social Planning and Research Council of British Columbia and the report that they made; how even with this new allocation to welfare in this budget, people in British Columbia will still not have any income at all to spend on food, clothing and shelter, and the needs of their children and families after July — no money left to take them through the winter and to start the next year again. You ought to be ashamed — if you have any shame.

I listened to the member for Surrey-Guildford-Whalley (Ms. Smallwood) talk about the plight of women in the province of British Columbia. She talked about what was needed to address that plight, because women represent a terrific reserve of talent, energy, intelligence and ability that isn't being used. Why isn't it being used? Because they're discriminated against in entry into the workforce and into the business community. She brought the problem to the floor of the Legislature and gave alternatives as to how that problem could be dealt with. Is it dealt with in this budget at all? Not a bit. The same old hidebound views of the world.

I listened to the first member for Langley (Mrs. Gran), and I guess her use of statistics was typical. She said: "Oh, we Socreds ran six women candidates and we got four elected. That's 66 percent. We did a lot better than you folks — you ran 21 women members and you only got five elected." I'll tell you, I'd stack these five women members up against any man or woman put up by the Social Credit Party in this Legislature any day in terms of compassion, in terms of understanding the needs of their constituents, and in terms of what's needed to be done here in the province of British Columbia. I would stack up these five women against any Social Crediter you could put forward in this Legislature, ever.

HON. MR. STRACHAN: They're all stacked.

Interjection.

MR. SKELLY: That is a crummy comment.

What we want to see is women represented in the corridors of this Legislature and the corridors of power in the same proportion as in the population as a whole. But we want to see women economically empowered as well so that their talents, abilities and energies can be applied to help bring us out of the economic slump that this government has put us into over the years since 1981.

There certainly isn't any relief from that economic restraint and mismanagement that we've seen imposed and visited on this province over the last ten years by this Social Credit government. I'm absolutely amazed. This budget is a non-starter. There's no fresh start in this budget. Granted, it talks about making additional expenditures on the welfare rolls. It talks a little bit about making an additional expenditure on education and for social services — a little bit in addition. It talks about cutting back in some places: cutting sales tax on restaurant meals, for example, and cutting back sales tax by one point. But the taxes that have been imposed on the people of this province are far more repressive and far more regressive than any of the tax relief measures that appeared in the budget, and they far overbalance the relief that's been granted under those very small relief measures on the sales tax and in other areas of the tax system.

Even in this government's concern about the deficit.... They tell us and have told us from time immemorial in this Legislature that they are concerned about socialist free spending. I heard it in the comments of the member for Cariboo. I've never seen such a free-spending bunch in my life. Billions over the past six years have gone down the rathole in this province without changing by one iota the number of people employed, yet at the same time the number of people unemployed has been driven up in the tens of thousands. Absolutely astounding. This government that talks about deficits in the last seven years has driven the deficit from next to nothing to the point where it's approaching $5 billion. When you look at the good financial position that this province was in several years ago, we have been mismanaged by this Social Credit group year after year. I'm astounded at the hypocrisy of people standing up in this Legislature each year and saying we can't spend any more and we can't drive up the deficit, as you drive up the deficit in record numbers over the previous year.

Not even the budget is as crass as some of the speeches written by the Social Credit research for their new members in the House. At least the budget gives the straight information. What are the fastest-growing areas of expenditure in this budget? Well, I looked at table H5, "Expenditure by Function." Health is growing at a terrific rate in this province. Between 1983-84 and 1987-88 health expenditures grew by 3.7 percent — not even enough to keep up with inflation over the same period of time. In real terms health expenditures have been declining. Social services: from 1983-84 to 1987-88 expenditures grew by 4.1 percent. Again, even in that period it was not able to keep up with inflation. We're actually falling back in moneys spent on the services provided under the budget. Education — and this government brags about its fund for excellence and all the money it's putting into education: the increase for education in this province has been 4.8 percent over the same period of time that I'm talking about. It doesn't even keep up with inflation.

What is the fastest-growing expenditure in this budget —1983-84 to 1987-88? This is a quiz; you can put up your hand. What is the fastest-growing expenditure? Debt service. In 1983-84, debt-servicing was $112.6 million. Today debt servicing is $530 million. It has grown in this province over the last several years by 47 percent. If there is any indicator of mismanagement, if there is any indicator of a lack of understanding of the economic needs of this province, it's the fact that this government has been blowing money down the hole at a terrific rate; and they've been having to borrow that money in order to finance this province.

The budget at least tells the truth, and all of those people who were set up by those researchers down in the basement of the parliament buildings to make speeches in opposition to the Manitoba budget should start reading our own for a change. That tells the sad story that people in British Columbia — my children and your children and your grandchildren — are going to have to deal with in the future. Every single year we go to budget we have to pay off those creditors before we can make a single nickel available to education, before we can make a single nickel available to health care, before we can make a single nickel available to social services. Before we can create a single job in this province, we have to pay that $530 million to creditors, most of whom — since the Bank of British Columbia was sold to Hong Kong — are now located outside the province of British Columbia. Each and every one of you should go home to your constituents and apologize for

[ Page 347 ]

the rotten mismanagement that you and your previous Premiers, as well as this one, have visited on the province of British Columbia. You all ought to be ashamed.

Interjection.

MR. SKELLY: I'm going to be here for a few years yet. I don't imagine this budget or the approach that this government is taking is going to change, because they don't seem to have the vision and the intelligence and the understanding of the province to change it. It's absolutely astounding. This budget contains a bunch of timid half-measures. It was obviously designed with the first week's press releases in mind — a little bit for education just to make them happy, a little bit for social services just to make them happy, a little bit for somebody else just to make them happy. But it doesn't really get to the root of the problem that we have here in the province of British Columbia — and the Minister of Finance admits that himself, Mr. Speaker.

The problem is that no economy can survive, that you can't balance the books and provide programs, unless you get those people back to work, unless you get them producing again, unless you restore some economic vibrancy and vitality to their communities again. When you get people in British Columbia working again, then this province is going to have the economy and the revenue base to produce the revenues we need in order to drive down the deficit and provide the services we require.

We are going to drive up the income tax in this province a little bit. Somebody made a comparison with Manitoba. But what you forget is that in Manitoba you don't pay medicare premiums; they're incorporated into the income tax system. In fact, in seven of the provinces of Canada there are no medicare insurance premiums. Only in the three most conservative provinces do you have those premiums.

But listen to this article that came out....

HON. MR. VEITCH: Does that make it free?

MR. SKELLY: No, Mr. Speaker, but it simplifies it a great deal by putting it under a progressive tax system so that those who can afford to pay for it and those who can't are able to get the assistance that they require without having to go from one window to the other begging to the government, begging to the state and destroying their dignity at the same time.

An interesting article came out from Statistics Canada and from the Fraser Institute, I think, who had a hand in the authorship of this budget. It said that Ottawa's income tax take from individuals in the coming fiscal year that begins April 1 will be $43.3 billion, a staggering 48 percent more than in 1984-'85 when Prime Minister Brian Mulroney was elected — a 48 percent increase in the income tax being collected in Canada as a result of the Conservative takeover in Ottawa. At the same time, corporations will pay an extra $10.135 billion in federal income tax in the coming fiscal year, only 4.3 percent more. Who is being shafted here, Mr. Speaker? Individuals are paying 48 percent more; corporations whose profits have been outlined as growing dramatically are only paying 4 percent more on those vastly increased profits. Even the Fraser Institute is outraged by this kind of switch in the burden of taxation that has taken place across Canada under the Conservative government and certainly is taking place under the government that has currently been elected here in the province of British Columbia.

The Fraser Institute, based here in Vancouver, a conservative economic think-tank — I think they should have left out the "think" there — shows that only those with the highest incomes have managed to significantly reduce their share of what has been a steadily increasing tax burden since the Tories were elected. This government has tagged their tax increases on the backs of the Tory tax increases, thus making the income tax revenues in this province bear even more harshly on people in the middle-income and low-income brackets than has been the case in the past.

[5:00]

Mr. Speaker, I know that we've got an agreement with the Minister of Finance that we will try to allow the Minister of Finance to wind up the debate in time for us to vote at the appointed hour in the standing orders. I intend to be very brief. I want to tell you that from this Premier, who talked about a fresh start, who talked about a new wind blowing in government and new ideas being brought into government, I expected a much better budget than this. I expected much more hope for the people of this province, much more hope for my constituents and much more hope for my children out of this budget than I can currently see in it. I think this budget lacks courage; it lacks vision; it lacks guts. It doesn't do anything to deal with the problems we are facing here in the province of British Columbia.

There are things that could have been done. The members opposite talk about silviculture and the windfall in taxes that we received from the United States' imposition of a 15 percent duty on our softwood lumber going into the United States. Even the budget points out that that may deliver revenue from export taxes to this province of approximately $350 million. Clearly it has been used in part to reduce the sales tax by one point. We could have used that fund of money by investing it in a kind of heritage fund — because it is based on our renewable resources — to make investments in the economy of British Columbia so that the returns from those investments would have flowed back into the heritage fund and that money would have been available in the future to finance silvicultural projects, to improve forest management in the province of British Columbia and to upgrade what even our federal cabinet minister from Vancouver, Pat Carney, calls the silvicultural slum in the province of British Columbia. We could have used that money in every region of the province to upgrade the level of forest management. This government has failed on that account alone.

I can't count on my hands the number of times that this government has set up special funds that were going to hold these revenues from natural resources such as the forest resource. They've set up special funds and they've promised the people of this province that those funds were going to be used specifically for reforestation, specifically for silviculture, specifically to improve the quality of our forest land base. I can't recall how many times they've broken that promise, drained those funds and lied to the people of this province, and right now they're doing it again.

HON. MR. REID: Now that's enough of that.

DEPUTY SPEAKER: Hon. member, you've been here a long, long time and you realize I know that something you

[ Page 348 ]

just said is very unparliamentary. Would you care to withdraw that, please?

MR. SKELLY: If some members take offence at that, Mr. Speaker, I'll certainly withdraw it. I was referring to the Social Credit Party. We were told by this party that those funds established by the government were going to be perpetual funds, that they were always going to be there, always available to the people of British Columbia, always available to sustain our forests for generation after generation, and they have never, ever, ever kept the promises they've made. The last time they set up a fund.... Can you recall it, Mr. Speaker? No, you don't. The last time the fund was set up was in March 1986, and I can recall the Minister of Forests standing up and saying this was a fund that was going to derive money from increases in stumpage; it was going to derive revenues from municipal contributions, and it was going to derive revenues from the pension funds of forest industry workers. And he set up the fund again. It must have been the fifth time.

We could have put the American export tax money into that fund and made sure it was there in perpetuity to manage our forests in a capable way. It's gone. The promise has again been broken, and all of those things are on our legislative books. They're on the statute books still — so many empty funds. Using that money, we could have invested in projects all over the province of British Columbia, in every region. We could have restored regional economies, and the investments made out of that fund could have gone back into the silviculture fund and been used to replant and to tend our forests. That's an unbelievable neglect on the part of this government.

When I look at the government's references to day care.... When the New Democratic Party was in government, we took a look at methods of spending money in such a way that a dollar might have three times the impact that it would have if you simply spent a dollar. One of the things we looked at was community recreation facilities — and that's only one of the things we looked at. We knew that by investing in recreation and communities we'd be helping to make people healthy, so that dollar became a health dollar. We knew that by building those facilities in communities all over the province, construction work would be required. That dollar was an economic development and a construction dollar. We knew....

AN HON. MEMBER: It's happening right now.

MR. SKELLY: It's happening now; if you've got the right approach to the lotteries fund or maybe the right political ticket, it's happening now. That's right, Mr. Speaker. It's not being done on an unbiased basis; it's not being done based on need around the province; it's being done as a political pork-barrel. So we're not looking at expending those dollars as health dollars or as regional development dollars, we're simply looking at making the right kind of rewards in the constituencies that vote the right way.

We could be doing the same thing as we did with community recreation facilities funds in day care, for example. Now there's an area where the expenditure of one dollar has the impact of three or four dollars. One, it gives children who are right now confined to home an opportunity to get out in situations where they'll have high-quality care, socialization, their health care will be looked after and their education will be advanced. That's a good expenditure of our tax dollars in this province of British Columbia. In addition, we would be freeing up single parents, many of them women, and allowing them to get into the workforce or to get into business, because they are currently tied down as a result of family obligations and a lack of a day-care program. A second value to the dollar that we're spending: by putting those women or single parents back to work, they would be earning money again, they would be generating revenues again, and additional dollars would be going into provincial coffers to help take care of the programs.

Mr. Speaker, I know my time has expired, and I know that we've made a promise to the minister to allow him to close debate, but I do want to express my concern that this budget lacks courage. It lacks the courage necessary to get this province out of the recession that we're mired in, and have been in for the past five or six years. It simply doesn't have it; and the budget admits it as well. It cannot reduce unemployment in this province. It cannot expand the economy. This budget is a tragedy for the people of B.C.

DEPUTY SPEAKER: The Minister of Finance closes debate.

HON. MR. COUVELIER: Insofar as this is the first opportunity that I've had to rise in the House and speak without being constrained by protocol or procedures, I'd like to do the normal thing and extend my congratulations to all of those who, like myself, won office for the first time. I think that we undoubtedly have brought some fresh blood and some new points of view to the House. And in a similar sense, I'd like to congratulate you, the Deputy Speaker, on your appointment, and the Speaker on his appointment, and all of my colleagues who got appointed to the executive council. Congratulations to all. In case I've left anybody out, I apologize, but I don't do it by design.

Mr. Speaker, I'm very pleased to have the opportunity of delivering the closing remarks to the budget debate. I'd like to state very emphatically, for the record, that I am very proud of this budget and what it accomplishes. Those individuals who have been belabouring the budget and its suspected defects for the last few days have given me great material for this presentation, and I'm going to deal at some length with some of the particular comments that were made in this chamber.

First of all, let me point out what has been missed by them all, by design or otherwise. They've missed the global change that is envisaged with this landmark piece of legislation. For the first time, in my knowledge — and certainly from our examination of current practices in other jurisdictions — we have laid out this new government's approach to taxation philosophy in a way that breaks new ground and, forever more, I believe, will set the stage for a regrowth of our economy in a way that has never occurred before. I think we can take great pride and comfort from the fact that we have made a very definitive statement with our new government. We are opposed to regressive taxation, and every initiative we have imposed in this budget, in terms of new, imaginative approaches, confirms our commitment that the taxation philosophy of this government will be one of progressive taxation.

No speaker across the floor dealt with the effect of reducing the sales tax by 1 percent now and 2 percent before the year is out, and the effect of the removal of the restaurant tax.

[ Page 349 ]

The effect of that decision restores nearly $300 million in the hands of the spending public, something that they will benefit from every day of the year.

I heard them talk across the floor about small business and the changes that we've implemented that try to restore some equity in the taxation system. They totally ignored the beneficial effect of $300 million daily, cumulative effect over a year, being injected into the spending patterns of the B.C. public. I know from the phone calls I've been getting, Mr. Speaker, that the general public appreciate what we've done for them and believe that what we've done is a positive thing — something that no other jurisdiction in the country has had the courage to do.

I just heard the vacant chair over there comment on what he described as a "timid budget, something that consists of half-measures." Mr. Speaker, in all seriousness, how could anyone practically describe this budget as being timid? On the very reverse, it breaks new ground in a positive way that will give heart to every British Columbian with its accomplishments.

Let's look at our attitudes towards deficit reduction. This government is reducing the deficit: a $300 million reduction next year. Let's just look at what is being done in other jurisdictions. In Alberta the percentage of deficit to gross domestic product in next year's budget will be 3.3 percent; Manitoba, supposed to be the leader of progress and energy of all good things, will have a figure of 2.3 percent; the federal budget, if you want to know, is 5.4 percent; the new B.C. budget, 1.4 percent.

Let's look at the deficit as a comparison, as a percentage of total revenue, for those same jurisdictions. In Alberta, the deficit is 22.4 percent of total revenue next year. In Manitoba it is 11.0 percent. In B.C. it is 9.1 percent. For those of you who have pencil in hand, the federal figure is — would you believe it? — 31 percent.

Now let's talk about the budget in total. Everyone has approached it piecemeal, nitpicking negativism, change this.... Mr. Speaker, the budget is a package. You cannot tamper with any one facet without disturbing the whole package.

The combination of tax cuts and user fees has the effect of increasing our ability to fund social services. Welfare: increased for the first time since 1982. Student aid: first time increased since 1983.

[5:15]

Let's talk about what the opposition has been doing for the last week and a few days. Let's talk about what their role should be in this parliamentary process. Mr. Speaker, not once have we heard any positive suggestions from the other side of the floor. All we've heard is criticism and negativism. None, zip, nil — no positive suggestions, nothing but criticisms. The people of this province want leadership from this chamber; they do not want more negativism. They want some positive ideas that we, collectively, will work to implement. The man in the street is fed up with hearing about the problems. He wants some solutions, and this budget provides them.

[Mr. Speaker in the chair.]

Mr. Speaker, let's talk about what they've been doing for the last five months. You know, they've had their snouts in the trough for five months now, collecting stipends and everything else. What have they been doing with themselves? They obviously haven't developed any budgetary criticisms. They haven't developed any alternative programs. They've been happy, apparently, taking their stipends and doing nothing in a positive sense.

Mr. Speaker, the opposition should have laboured a little bit more mightily, it seems to me. I know what one was doing: he was lost in the forests of Vancouver East, wandering around trying to get some feel for the forestry problems in this province. Goodness knows, Vancouver East has a thriving forestry industry. I know that they've been spending some time searching for a leader, but I submit that that should have been a leisure-time activity, rather than a full-time activity. They are paid to do some credible opposition in this House. They are paid to produce some alternatives.

Now let's talk about the style of the debate. I could not believe what I've been hearing through the speaker in my office in the times I was up here; I couldn't believe the calibre of points being made. Would you believe it? I heard two speakers make up two fictitious stories and build an argument around the fictitious stories. Where I come from, at the very least you deal with the same set of facts. I mean, that should be a minimum request. If you're going to have a logical, meaningful debate, at least you would deal with the same set of facts. You wouldn't make them up and then make that part of your presentation.

Let's deal with some of the specific points. I have listened closely to the comments made by the opposition during the last number of days, and I would like now to deal with some of them in detail, because it will exemplify and illustrate, Mr. Speaker, to all who are interested, the ineptitude that they brought to the task of criticizing this budget.

First of all my critic, the hon. first member for Nanaimo (Mr. Stupich), had a claim that this budget would take out of the pockets of taxpayers one week's pay. Mr. Speaker, the truth is that the budget tax increases are designed to protect the low-income taxpayers. For example, a family of four, with gross income of $20,000, will find their tax bill almost unchanged — actually a decrease of $1. Similarly, for a family of four, with an income of $40,000, the increase in taxes is a mere $135. A similar effect occurs for single people. In other words, the tax increases are negligible for low-income people and modest for those in the middle-income range.

Let's talk about what they've done with the five months of their leisure time, and let's talk about the calibre of the comments we've heard. My critic said that the various new taxes and user charges will remove a net average of $566 from each B.C. household. Mr. Speaker, I point out for those people who are evidently scribbling furiously, the hon. member for Nanaimo has taken the difference between the taxation revenue in '86-87 paid by individuals and the equivalent figure for '87-88. The difference of $412 million he obviously divided by the number of households in B.C. to arrive at the figure of $566. This has several obvious errors. First of all, the increase in tax revenue does not derive from new taxes. The main cause of the increase is the normal increase in tax revenue which government receives from the additional income which British Columbians will earn in '87. Secondly, Mr. Speaker, the hon. member totally ignored the consumption taxes paid by visitors — not part of his calculations at all.

He also said that the budget fails to make jobs a priority. How could anybody who studied the documents make such an outrageous claim? The fact of the matter is that we have

[ Page 350 ]

almost doubled our spending on JobTrac. The fact of the matter is that last year we provided only 12,000 jobs, but next year we're going to provide 17,000 jobs.

The same individual made a claim in his presentation that what was needed was to increase the minimum wage to $6 per hour. Can you imagine the catastrophic effect that would have on our small business community? They propose to be and claim to be representative of small business. What small businessman is going to be able to pay a high-school student or someone working part-time such a high initial minimum wage? We have increased the minimum wage since we've taken government, and we've addressed that problem. But for anyone to totally ignore the impact on the economy at large with such an outrageous suggestion, I claim, is to do a disservice to the whole process. Surely when we come here to debate issues we should at least have the ability and the background to understand the consequences of what we're saying.

Secondly, my critic made the claim that the tax increases previously given overstated the effect of the sales tax decrease because half of the sales tax decrease goes to industry. Had the individual concerned looked at the last page in the budget briefing book, he would have known that the figures are derived from household expenditure data provided by Stats Canada.

According to the opposition's reasoning, any increase in government's total tax revenue is derived from new taxes. This is clearly false.

I heard it said by the same individual that the rural property tax will rise by 121 percent from 1.4 to 3.1 — another illustration of inadequate staff work and inadequate research work and an evident misunderstanding of the spoken and written word. He has confused the new rate, $1.70 per thousand, with the increase. For example, a rural property valued at $60,000 will pay an extra $18 in property taxes in 1988 as a result of the increase. This only applies to the provincial rural area tax — no effect on school, hospital or other taxes. Also, the rate is $1.70 for assessed value; it is not a percentage. Now I would have thought and hoped that someone who had such a background of experience in this House would have known and had the wit to understand the difference.

Another speaker during the debate said that the middle- and low-income people are pushed further into the mire. Based on the evidence I've just given you, I can assure you that low-income people are protected by this budget. They will not pay more taxes. But as usual the opposition failed to deal with the basic issue: that is, our fiscal position.

They avoided saying what they would do with respect to our position regarding the.... They said they would not use the lumber export tax for general revenue; that the 7.3 percent increase in the personal income tax rate was not fair, nor was the increase in the small business tax rate. They also criticized the property purchase tax rate. The fact of the matter is, these cumulative programs amount to $600 million, and they've made no suggestion what they would do with that. We can only assume that if they were to eliminate it, the effect would be to increase our deficit to at least $1.5 billion. Clearly that is not in the public interest.

We've heard some comment about silviculture. It was suggested that it was an on-again, off-again approach. Anyone who has looked at the figures produced annually would be able to ascertain the truth of what I'm saying here. Funding has increased for silviculture on an average of 30 percent over the last four years. Fact!

The critic also had the mistaken impression that the $85 million in the EPF revenue refund would be available in '87-88. The reverse is true; it applies to 1986-87. Had he looked at the binder, he would have been able to determine that for himself. Another illustration of inaccurate information, poorly researched presentations.

Let's talk about the deficit forecast. My critic criticized the past accuracy of budget forecasting and noted that over the last three years the actual deficits were $695 million more than originally budgeted. Mr. Speaker, any time any Minister of Finance can bring in a budget which meets the projected figures within a tolerance of 1.3 percent, which is what we've done traditionally, I say that's a good performance.

Back to this member who represents the populated forests of Vancouver East. He got up during question period and during the debate and made reference to a certain Prof. Reed of the UBC forestry department who, he said, was an expert and who he thought would ridicule my statement that it was impossible to spend another $350 million in one year. I have the documentation here to prove that the professor in question — Prof. Reed — said we've got to move up in stages. He says he's very pleased with our silviculture program and endorses it. One has to wonder who does their research work, Mr. Speaker.

Now let's deal with the question of women's issues. Reference was made by a number of speakers to the poor economic situation of women. Certainly we on this side of the House are very much aware of the difficulties that the women of British Columbia and indeed in all of the western world have to overcome in order to fulfil their destiny in the overall scheme of things, and we are certainly sensitive to them. But the speakers across the floor have totally ignored the fact that the employment growth for women over the last 20 years has been much better than that for men. In the last 20 years, employment of women in British Columbia has increased by 162 percent, compared to only 54 percent for men. Mr. Speaker, I think that the outlook for women is just as good as it is for men, if not better, and I can assure you and this House that this government will continue to make every effort it can to ensure that there is equity in the workplace for women.

Mr. Speaker, one of the opponents of the budget speech criticized the lack of support for the family. The fact of the matter is that support for families is shown by an increase of 9.6 percent in programs providing care for children and the preservation of the family unit. Much of the increase in the funding of services for the disabled — which increased by 15 percent — will be used by parents to help care for disabled children.

Dealing with day care, there has been more than one reference to the alleged fact that the increase in day care is only 5 percent over '86-87 — another case of inaccurate information and sloppy staff work. Mr. Speaker, the actual increase is 29.6 percent, and any confusion that arises apparently might come because day care is included with another line item in the estimates. All they need have done is ask; they didn't even take that much trouble.

Mr. Speaker, another critic was feeling that we were not doing justice to education funding and said that we had only increased it 2.5 percent. The Ministry of Education will spend 11.4 percent more in '87-88. This includes fully compensating school districts for the decline in nonresidential

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taxes, and an amount of $40 million to be used for special initiatives.

One of the speakers dealt with the reduction in property taxes; he was critical of the decision to reduce non-residential taxes by $600 million. Mr. Speaker, the $600 million referred to a number of taxes, not just non-residential property taxes.

Someone else dealt with the increase in seniors' property taxes to $100, Mr. Speaker. It should be noted that even at that level, seniors will only pay approximately one-quarter to one-sixth of the gross property taxes. I need not also mention....

MR. G. HANSON: You'll hit them next time.

HON. MR. COUVELIER: You mean that it is acceptable this time? Is that what you're telling me?

Dealing with the question of social service spending generally, over the last three years funding for health, social services and education has increased by $1 billion. We will spend $6.7 billion, compared to $5.7 billion in '84-85. Now I heard another speaker, believe it or not, describe our projects as trivial, Mr. Speaker. Can you imagine that? Unfortunately he comes from my own city, and I find that a cause of some embarrassment. In any event, I suspect that here is another case where they should perhaps fire the speech-writers and go back to the drawing-board, because surely this critic wasn't criticizing a total of $519 million: health care, $237 million; universities, colleges and job training, $71 million; community job training, $20 million; income assistance rate increases, $52 million; education, $139 million. Surely, Mr. Speaker, those could hardly be described as trivial projects.

[5:30]

It was noted that the NDP stand for full employment. I would like to have someone across the floor define for me what they mean by full employment. We all know that full employment in the traditional sense is an anachronism, something that governments will never again be able to provide.

Interjections.

HON. MR. COUVELIER: That's a fact. Every thinking person understands it. Every sociologist understands it. Every futurist understands it. But apparently none of those Neanderthals across the street have got the slightest idea about it.

Here's another illustration of inept staff work. It was said by someone across the floor that direct government spending creates six times as many jobs as cuts in corporate tax rates. Mr. Speaker, he obviously picked up a document without looking beyond its title. He was referring to a federal document of 1985 called "Employment and Immigration Study," and had he cracked the cover and understood its contents, he would have understood that they were dealing with federal statistics. There's no question that the federal government can save money by job creation, because they save unemployment insurance and their contribution to the overheads of welfare, etc. Obviously, in the case of the federal government, that may be true. If he had read the document, he would have known that it doesn't apply to provincial governments. There is all kinds of documentation in other publications — I'd be happy to send them to him — to justify what I am saying and confirm it.

I know that it is really an inadequate exercise to be comparing British Columbia with other provincial jurisdictions. In the first place, I think there is an old saying that says something like: "Walk a mile in my moccasins before you criticize what I do." I don't have any trouble subscribing to that theory, but the opposition raised the issue and I'd like to respond to it.

Let's compare personal tax rates in British Columbia and Manitoba. The personal tax rates in B.C. as a consequence of our changes are 51.5 percent. How much in Manitoba? It's 60.0 percent. Let's talk about the per person increase in income taxes. On average we increased personal income taxes in British Columbia $63.52. How much in Manitoba? It's $228. That's $63.52 to $228.

My critic made the point — and it's in the record — that a family earning $25,000 would receive a tax reduction in Manitoba as a result of their '87 budget. I have the material in front of me. According to the Manitoba government's own figures, their budget table D20, a Manitoba household with an income in the $25,000 to $35,000 range will pay $404 more as a result of their tax changes. Clearly, we've got an inept opposition who can't even put pencil to paper and get any accurate figures as a consequence.

Let's talk about the 1986 inflation rate in the respective provinces. In Manitoba, 4.5 percent; in British Columbia, 3.3 percent. One of the absurd comments made by the opposition during this debate was that B.C. was training workers to go to work in Manitoba. In both 1985 and 1986, the percentage increase in employment in B.C. has been higher than in Manitoba. One critic had the courage to suggest that we should do what Manitoba did. Do you know what Manitoba did? They increased taxes to a much greater extent than we did. Their sales tax went up, not down. Is that really what the good member was suggesting?

It was said that the budget was not fair to the average person. It certainly seems more fair not to increase taxes for a family at the $20,000 level than to increase them as happened in Manitoba.

Mr. Speaker, I suppose that in view of those comments I just made you might construe that I am being critical of the Manitoba Minister of Finance, and I don't mean to do that. I merely make those points in response to the opposition's outrageous claims during this debate.

I also just have to leave that Manitoba situation with this one thought. The equalization entitlement paid by the federal government amounts to $432 for every resident in Manitoba. If they didn't get this subsidy, their deficit would be almost $900 million. Alternatively, if B.C. were to receive the same subsidy as Manitoba does, we would have been receiving an extra $1.2 billion, and we would have a healthy surplus as a consequence.

Let's talk about what we did with our income. Our share of funding for the Ministry of Health is 31 percent. Our share of funding for the Ministry of Education is 21.2 percent. How much is it in Manitoba? Would you like to know? Their share is 17.7 percent. So much for education, so much for investing in the future.

Mr. Speaker, we've increased our post-secondary education funding by 5.8 percent; Manitoba, 5. 1 percent. I could go on. How about day care? Thirty percent in B.C.; 21 percent in Manitoba. So much for the heart and courage.

What conclusions should be drawn from all of this? Quite obviously our Premier, having served in this House before with many of the individuals across the floor, had the wit to

[ Page 352 ]

understand what their problem was. Their problem was — still is, evidently — that they don't know how to do any research work. They don't know how to perform their legitimate role in this chamber by coming up with positive, constructive solutions to change things or improve things. That's why this government increased funding for research — so maybe they can do their job better. Mr. Speaker, we have been spending $725,000 in that operation over there, and it's been going down the rat-hole, as exhibited by my examples here. With this increase in funding we're providing, maybe they will do the job a bit more effectively, but obviously someone has to move in there and take control and provide some leadership and give them a positive kind of vision to perform. This kind of failed vision of what role the opposition should play, I think, is tragic. It does a disservice to the citizens of this province. They are expecting you to perform.

Mr. Speaker, we are concerned, because we expect them to be in opposition for a long time and we want them to do a better job of it. As a consequence of that, we have provided a 35 percent increase in funding to ensure that they do do it. Mind you, that's no guarantee they will, of course. I mean, if they continue to be so profligate and irresponsible in developing their arguments, of course it won't occur. But I, like every British Columbian, have the fond hope that once and for all the official opposition in this House will start to perform the function for which they are elected. All of us here are elected to serve our masters, and they're out there watching what goes on. I have a hard time believing they can take seriously any criticisms coming from this side of the House that are obviously based on such inaccurate information.

We are here, Mr. Speaker, to serve the people and to help provide some solutions. We earnestly want the opposition to fulfil their mandate. I suggest to you on the basis of the last week and a half that they have failed miserably.

To close the debate, I would like to repeat the motion: Mr. Speaker, I move, seconded by the Hon. Bruce Strachan, that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

Motion approved on the following division:

YEAS – 37

NAYS –18

[5:45]

MR. SPEAKER: I might remind all members that tomorrow morning at 10 o'clock we will have pictures taken here in the chamber, and the bells will ring to remind members when to be here.

HON. MR. STRACHAN: As I advised the House last Thursday, pursuant to the resolution just passed, tomorrow at 2 p.m., when we reconvene, the House will go into Committee of Supply, beginning with the estimates of the Minister of Social Services and Housing (Hon. Mr. Richmond). With that said, I move the House do now adjourn.

Motion approved.

The House adjourned at 5:47 p.m.