[ Page 1303 ]

The House met at 10:06 a.m.

Prayers.

HON. MR. STRACHAN: Mr. Speaker, on March 20 this House had the good fortune to enter into resolutions and discussion welcoming our hero Rick Hansen to British Columbia. Today we have the good fortune to acknowledge that he's finally arriving back home at Oakridge, where he started two years and two months ago.

MR. BARNES: I would like to associate the members on this side of the House with the remarks by the hon. House Leader and say, in reflecting on March 20, that we did indeed recognize the greatness which Rick Hansen personifies in ways that I believe touch so many people of such a diverse range. What can we say, other than: Welcome home, Rick. We believe you have started something really big in British Columbia which we will cherish and appreciate for generations to come.

HON. MRS. JOHNSTON: In the gallery this morning are two very distinguished British Columbians. We have a gentleman who is a former Surrey alderman, a practising Surrey lawyer, and who also provides legal service to the UBCM. I would ask the House to please make welcome Mr. and Mrs. Ted Pearce.

HON. MR. DUECK: Today in the precincts are about 30 students of West Langley Elementary School, with their teachers, Jane Manning and Linda Ewart. Would the House please make them welcome.

Motions

HON. MRS. JOHNSTON: Mr. Speaker, I ask leave to move a motion without notice regarding a select standing committee.

Leave granted.

HON. MRS. JOHNSTON: Mr. Speaker, I wish to move the following motion:

"That this House authorize the Select Standing Committee on Economic Development, Transportation and Municipal Affairs to examine and inquire into the matter of the Islands Trust Act, with particular reference to the following: (1) the object of the trust; (2) governmental structure within the trust area, including representation; (3) provision of local government services within the trust area, including land use planning and zoning; and (4) matters arising out of the proclamation of section 3 of the Islands Trust Act; and to conclude its deliberations and report to the House on or before October 1, 1987, if the House shall be sitting, and if not, to transmit its report to the Minister of Municipal Affairs for disposition thereof.

"In addition to the powers previously conferred upon the said committee by the House...."

Do I read all of this, Mr. Speaker? Is that correct?

Interjection.

HON. MRS. JOHNSTON: This doesn't seem appropriate somehow to me, but that's fine.

"In addition to the powers previously conferred upon the said committee by the House, the committee shall have the following additional powers, namely: (a) to appoint of their number one or more subcommittees, and to refer to such subcommittees any of the matters referred to the committee; and (b) to sit during any period in which the House is adjourned and during any sitting of the House, and to adjourn from place to place as may be convenient."

Mr. Speaker, at this time I want to make it very clear that the introduction of this motion is not in any way suggesting that we are looking at abolishing the trust. We are not. It seems appropriate, after having the act in place for so many years, that upon the proclamation of section 3, which allows acceptance of gifts by way of land or money, we have some clearly defined ideas, with input from the general population, as to how this should be handled.

Mr. Speaker, I wish to move this motion.

MR. WILLIAMS: Mr. Speaker, certainly the functions of the committee seem reasonable. We would have appreciated greater notice with respect to the motion, and it is of some minor concern that the committee might meet during sittings. However, at this time of the year that may not be a major consideration.

Motion approved.

HON. B.R. SMITH: May I have leave to move Motion 67, with respect to compensation of judges?

Leave granted.

HON. B.R. SMITH: I would move Motion 67 standing on the order paper: "that the report and recommendations of the compensation advisory committee be referred to the Select Standing Committee on Labour, Justice and Intergovernmental Relations for the purpose of recommending a resolution to the Legislative Assembly for fixing of salaries, pursuant to section 7(1) and (2) of the Provincial Court Act."

Mr. Speaker, this report dealt with more than salaries and had some recommendations as to leave and other benefits. While the statutory duty of the committee is only to recommend salaries, I would be quite happy if they would like to make recommendations to the government on those other matters that were covered in the report. There is no attempt to foreclose that. I look forward to the committee's deliberating on this now so we can settle the matter of judges' salaries.

MR. WILLIAMS: On behalf of my colleague the member for Esquimalt-Port Renfrew (Mr. Sihota), I presume, we're certainly encouraged that the government sees all these important duties for committees, and we assume that the House will be making the time available for those committees to freely meet throughout the coming season.

Motion approved.

HON. MR. DUECK: I'd like leave to make a statement. Leave granted.

[ Page 1304 ]

HON. MR. DUECK: This week is Canada's Fitweek, and today is British Columbia Sneaker Day. Just to show what we mean.… [Laughter.]

[10:15]

Orders of the Day

Private Members' Statements

USE OF KNIVES AS WEAPONS

MR. BARNES: I think the Minister of Health (Hon. Mr. Dueck) should have advised us that this was low-heeled sneakers day, because I have a pair I could have worn. It might have been of some assistance.

AN HON. MEMBER: Low heels?

MR. BARNES: You've heard the song "High-Heeled Sneakers." That is, of course, a little more derogatory than the conventional form of sneaker that they're talking about. We won't get into that.

I will be making a brief statement on a very serious question of national concern — I think it's a matter of life and death — to do with the carrying of dangerous knives in public places, particularly in licensed drinking establishments. I must say that I don't stand as an expert on the law, although I am a member of the Legislature. I say that, hoping that the Attorney-General will, in his response, agree that what we've had for the last 14 years or so with respect to the question of the menace of knives as weapons of offence — violent crimes — is a whole lot of equivocation on the part of law enforcement authorities throughout the country, so much so that people such as the Downtown Eastside Residents' Association in my constituency have embarked upon a national campaign to enlighten the public about the seriousness of the knife as a violent form of aggression in the hands of people who bear ill will towards their neighbours and their community. The question, though, Mr. Speaker, is one of legalities versus government responsibility — moral responsibility.

To get to the point, I would suggest that it's time we regarded any device whatever, whether a knife or a firearm, to be a potential weapon, and that we become more aggressive about it. The question today is: how do we categorize the knife in such a way as to treat it the same as we would the bearing of firearms? People obviously do not carry firearms around to defend themselves with free licence. They require a permit. They require some form of authorization.

Now the Attorney-General, I am sure, has addressed this problem. In fact, I've read his letters and correspondence with DERA, and I have seen statements by politicians right across this country, from police departments in the various provinces, and everyone agrees that there is a problem. The situation has to be addressed, and it has to be addressed by people with a sense of duty and the political will to recognize that the use of knives has replaced the use of firearms. As the law became more stringent in its enforcement with regard to firearms, the knives seemed to replace it. I am sure the Attorney-General will recall the Sulland versus the Crown case in 1982, when the B.C. Court of Appeal overturned the challenge that a knife was an offensive weapon, at least under certain circumstances, ruling that the knife could be legitimately carried as a weapon of defence.

I think that was a tragic decision, one that has caused serious consequences. Perhaps I will read, in summarizing, some of the statistics in the last five years since 1982 in terms of how knives compare with other weapons that are being used by people who are intent on committing violent crimes. How can it be possible or logical to argue that it's okay for a person to carry a knife if it is for self-defence and not, on the other hand, be able to do the converse and say that if a person is carrying a knife it is with the intent of malice or committing some evil deed? I think the logic applies one way or the other. Surely if a person is carrying a knife because they think they may need it for self-defence, they must be preparing for a fight; and if they knew in advance that there is going to be a fight, then why don't they call the law? If you want to turn it around the other way.... You see, this is the beauty of not being a lawyer: you can look at things more responsibly; you don't have to look at them strictly from a legal point of view.

What I'm concerned about is that a lot of people are being slashed up and gouged and threatened and made to be frightened. In fact, I can tell you how I feel from a social point of view. I feel that people carry knives out of fear that somebody else may have a knife, and so the thing gets out of hand. When I was I 1 years of age, in fact, I carried an ice pick. In those days we couldn't afford a knife and we didn't have electric refrigerators, but I had an ice pick and I carried it for protection. I was hoping I never had to use it because I would have been running too fast to stop and do any damage. But the point is, people are carrying knives for some kind of crazy situation because the government is not giving them the kind of support they need and they run into pressure, especially in drinking establishments where there are unemployed who are hanging out all day. Friends are stabbing each other. It's out of a sense of impulse, not always premeditated. If the knife is handy, they use it.

So I think that we have to provide relief on a situational basis. Amending the Criminal Code to deal with this problem would go a long way to assist those local authorities and at least give them the option to make a choice. In the hinterlands, perhaps, it wouldn't be a problem, but in a place like downtown Vancouver where 82 percent of the drinking takes place, it is a problem.

HON. B.R. SMITH: That's a pretty good statement, Mr. Speaker. I don't think that lawyers could do anything but probably alter the power of that statement. I would be quite happy to pass those remarks and sentiments on to the Justice minister. Many times we have raised with Justice ministers the need to strengthen the Criminal Code in the area of the offensive weapons section to maybe have some presumption that where a person carries a knife with a blade longer than that of a jack-knife, there is a presumption that they intended to carry that for a purpose that was dangerous, and then put an onus on that person to then establish and prove that they did carry that knife for some legitimate purpose, such as cutting cloth or doing whatever.

I'm trying to think of all the defences that I heard in the courts over the years from people who had ugly-looking knives stuck in their trousers. There were many ingenious defences, and some of them worked.

A case was just cited here today. I know the police feel that that case set back law enforcement a good deal in this province and slowed them down in dealing with this problem. I think the Criminal Code should be strengthened. I support what the member says, and I'll make another effort

[ Page 1305 ]

with the federal Department of Justice. But you know that department is pallid with terror at the thought of a Charter challenge on anything, so don't hold your hat.

MR. SERWA: Mr. Speaker, I would like to speak briefly on this particular matter from a different perspective. I would like to point out to the hon. member that the knife is not the problem; it's human nature and the individual. This has been a paramount problem through all of our history.

I come from an area where this is not a problem. I've worn a belt-knife for most of my life and it's a very handy tool. I think it would be presumptuous to take a local situation where there is a severe problem and start to apply legislation throughout the whole of the province. Whether it is being done with firearms or with respect to knives, where do we stop — a piece of wire, a pencil, a piece of rope, a piece of chain, an automobile, fists? What effective tools do we have? We've got to face the fact that the human element is the nature of the problem. Perhaps in the hon. member's constituency it is the stress of density of population that is the problem.

I think that we have to attend to the problems and not proliferate legislation with respect to controls, because throughout the rest of the province this is not a problem. Basically, a knife is an effective tool, depending on the user. We can use anything that is a weapon of offence or a weapon of defence.

I think it would be presumptuous, although I admit that there is a very serious problem. But I feel that if there are concerns, it should be attended to locally and not provincially or regionally.

MR. BARNES: Mr. Speaker, I appreciate the response from the member for Okanagan South and from the Attorney-General.

When the member for Okanagan South suggests that it is a matter of human nature, he points very clearly to the decision that we have as legislators to decide whether we are going to try to be optimistic about the potential as far as human nature is concerned, and give leadership and direction to assist people to overcome some of these so-called natural instincts.

We can have a better society. Otherwise why do we attempt to have a more peaceful environment and try to educate people and set higher values on human life, etc.? So I am not in favour of being afraid to bring down legislation that I believe is for the common good.

As far as the options are concerned, in terms of heavy-handed legislation, remember that we have a justice system. A good justice system is one that is accessible, that is affordable and that allows people appeal in terms of challenges under the Charter of Rights and Freedoms. For any offence, as far as anybody's liberties are concerned, civil or otherwise, they should have access to due process. That's what a democracy is about. In the meantime, what about the rights of the individuals? What about people who are clearly being made to feel uncomfortable and unsafe in society? I think that we have to be far more positive, far more proactive and far more willing to provide leadership direction and take our chances. That's what political will is all about.

The Downtown Eastside Residents' Association have suggested that we should begin to sit down with municipalities and with local community organizations and come up with suggestions. One of the problems with this issue is that we claim ignorance. Many of the federal people are saying they don't know what's going on; if they knew more, had more statistical evidence, then they could act. But the evidence is clear: the police all over this country are saying that the use of knives is proliferating. For instance, Statistics Canada showed that of all of the robbery offences committed in British Columbia, in 1978 there were 453 firearm robberies and 333 with knives; in 1979, comparing the same two figures, 333 firearms, 249 knives; in 1980, 416 firearms, 312 knives; in 1981, 485 firearms, 595 knives.

MR. SPEAKER: I regret to inform the member his time is up.

MR. BARNES: And on it goes. The point is, those numbers are starting to shift, to the point today, Mr. Speaker, in 1985, where you have 645 offences committed with knives; and it's continuing to grow.

We should show more courage and confidence in human nature. We can impose laws that make sense. I think everyone would be better off.

[10:30]

DRUG AND ALCOHOL ABUSE

MR. LONG: Mr. Speaker, today I'm going to speak on a major problem we have in British Columbia and, I think, possibly right across Canada. Over the years I guess most of us have known it as alcoholism, but in recent years another factor brought into it has been drugs. You end up with a problem in this province and in Canada with chemical dependency. The effects are family breakups and many costs to the system injustice, health and social services. I think it's time that our whole province realize that this is a disease that has to be combated. It's not just something that people do and they become addicted and they're cast aside. It is a disease that has to be treated.

The government of British Columbia puts a lot of money into treatment, identification and education of the disease, mostly for the adults. Something that was brought to my attention recently, which I spoke to the Ministry of Health about, is that one area that must become more involved is the private sector. The government is doing their part. They are paying their way. The private sector must become more involved for our youth. They are not getting the attention they need. We have a problem out there with youth. We need more treatment centres. But the treatment centres we need, I'm finding out, are best handled by the private sector. As well, I find that involvement of the family is important, along with the companies to help out in the treatment of these youths. They are our kids, and we must look after them.

The private sector treatment centres that I have seen have approximately an 85 percent rate of.... It's not necessarily a cure but a period of time with no use of drugs or alcohol. It's probably one of the highest rates around, and it comes from the private sector.

I could identify some of these homes, but the specific one that I'm speaking of is right here on the island in Nanaimo, run by people who care and people who want to help. I think it's one area where our youth have to be given a chance. We have to identify the problem and we have to give them a chance so they become healed so we don't run into the horrendous costs later on in our society.

[ Page 1306 ]

I would just like it to be known that this is one area in our province that we must look at together, all of us members, to rectify a major problem within our society.

MRS. BOONE: I'll certainly agree with the statement that this is a problem that we all have to try to solve together. It is definitely something that I hear all the time. We find our youth are virtually falling through the cracks out there. On the contrary, however, I do not think it is the private sector that should be picking up on this. I think that government has a role to play. Government has failed very much in this role in recent years. We find throughout the province that there are no mental health facilities, very few psychiatric facilities and very few counselling facilities — particularly when you get outside the lower mainland area into areas where facilities are lacking in general, whether you're youth or not.

When you talk in terms of drugs, quite frequently people seem to think in terms of marijuana, cocaine and various things like that. But one of the major drugs in this province, and one of the major problems we have in this province, has to do with the drug that everybody here probably takes at some point or another, and that drug is alcohol. That's a major problem. It's a real concern of ours, and a concern of mine in particular — when you look around the province and you see the liquor control looking in terms of liberalizing our liquor control laws and what effect that is going to have on our youth. If we really truly believe that drugs and alcohol are a problem with our young people, and I think most everyone in this room will agree that there certainly is a problem there, then we have to address that problem not just in providing facilities to deal with the effects of it but also in terms of some prevention work. We have to make sure that there are programs in the schools, that the children are being given the information and that they are aware of what the problems are out there. We have to stop making things accessible to people. We have to stop liberalizing our laws. We do not want to have alcohol in our corner drugstores. We do not want to have alcohol in our corner stores at all.

So the problem is there. We on this side of the House — or in this corner of the House, as we so aptly are shown at different times — will want to do everything we can to assist the young people in this province, but we insist on prevention. This is the key word, as far as I'm concerned. We've got to stop the problem before we have it. We have to provide access to our young people by way of adequate facilities for mental health, for psychiatric care, in every area along the way and throughout all areas of the province, not just in one particular section. And we will do everything we can to support the government when they do take a stand to prevent the problems that are coming through. We have youth out there who are falling through our system; they're falling through the cracks out there and we must do something to prevent that.

MR. LONG: Mr. Speaker, I think one of the areas.... The hon. member mentioned that to take alcohol and so on out of stores or whatever — don't make it available. I think something has to be realized with this disease: it's a genetic disease as well.

[Mr. Pelton in the chair.]

What I'm understanding now is that it's a genetic disease; it can be passed down through families. When we identify that genetic disease and we identify that the problem is there, it's not necessarily alcohol that creates the disease. If the person has the disease, the alcohol only exaggerates the disease and creates a bigger problem.

So I think it has to be brought to bear that this disease should be treated as a disease, and in the future we've got to realize that it's not necessarily the alcohol that has caused the problem every time. I think maybe it's the abuse of alcohol; but, you know, there have been known cases where people have had one drink and become an alcoholic. I can speak of one case that was told to me by a good friend who remembers the first drink he ever had. Now everybody does not suffer that effect. So I don't think we necessarily have to pull everything out of people's way and say we've got to get rid of the world because they might use.... I think it's a fact that it is there.

ESQUIMALT AND NANAIMO RAILWAY

MR. BRUCE: Mr. Speaker, it wouldn't be right for me to stand and speak in this House without introducing somebody. I would ask leave of the House to make a singular introduction.

Leave granted.

MR. BRUCE: In the gallery today is a good friend of mine and the operations manager of the British Columbia Forest Museum, Mr. Terry Malone. I would ask the House to make him welcome.

I would hope, Mr. Speaker, that you would take into account that that took 25.5 seconds, in respect to my time allotment.

What I would like to speak about today is the E&N Railway — the Esquimalt and Nanaimo Railway that is here on Vancouver Island — and a little bit of a past history of what the railway is, what it means to us, and perhaps where we can go with it — that being the federal government and the CPR.

It was in 1884 that it was first constructed here on Vancouver Island, and in my riding of Cowichan-Malahat Sir John A. Macdonald hammered in the final spike on August 18, 1886. After that there were a number of extensions that occurred with the E&N, taking it further north and through other areas of Vancouver Island, both east and west.

In 1905 the E&N came under the direction of CPR, and of course for the E&N to develop this particular line initially they were given extensive land grants and extensive rights to property and minerals and timber on Vancouver Island. When CPR took it over and in fact ended up buying the company in 1912, those particular obligations held with that company, and in return for this tax exemption that they had on their properties and minerals and so on, they had agreed to construct and complete the Esquimalt and Nanaimo Railway and for thereafter to keep it in operational form. This was not only to end at Nanaimo — the name being Esquimalt and Nanaimo — but was to go further than Nanaimo right through to Courtenay.

When all the construction had been completed, this railway in mileage totalled some 200 miles both from Esquimalt to Courtenay and the lines east and west. Some of those lines of course today are no longer in existence; they have been abandoned. They were given rights to abandon those particular spurs, and in some instances the trackage is now up and all that's there is the remaining right of way.

[ Page 1307 ]

It was in 1914, on August 6, that the passenger service started. To that point it had primarily been freight. Today we see more in the way of passenger service than we do freight on the line.

Compensation for this was fairly heavy really, when one looks at it. There have been many words said and things written about the compensation that was granted for the E&N line, but I think if you went back to a report that was done and a submission by Mr. Ed Gosnell in 1927 in a commission that had been undertaken, reviewing some of what had gone on with the E&N, in his report he says: "The province gave up 2,700,000 acres of its most fertile land to get the E&N Railway, which under solemn agreement it was entitled to have built free of cost by the Dominion of Canada."

In other words, and again including the two million acres of land on Vancouver Island conveyed by the province to the Dominion as a subsidy to the E&N Railway company, it cost British Columbia in total 4.7 million acres of natural resource in total to build a line of railway 75 miles long, or precisely 62,666 acres per mile. At a fair evaluation of $10 an acre, that's $626,000 per mile, an arrangement which outrages all sense of justice or proportion. It's a statement that perhaps we would concur with today. He went on to suggest that the sale of timber and land after 1905 was so profitable that it actually covered the purchase price for CP to buy E&N and all improvements in 1905, about $5.5 million. Compensation was really fairly heavy.

The provincial position has been, since that time, that the land was granted to the E&N and they were there to build this line. But the company and the corporate descendants, those that took over the E&N, had to adhere to the terms of the agreement in that lease arrangement. So it is that they had an obligation — the E&N and now the CPR — to continue to operate passenger and freight train service on Vancouver Island in perpetuity, regardless of cost. In a CTC document entitled "The Need for Rail Passenger Service and Opportunities for Modal Substitution," done in September 1986, the average cost of 29 cents per passenger kilometre represented a slight increase over the RDC services operating in Atlantic Canada. But what they came back to was a rationale to guide the future of rail service on Vancouver Island: that it should be the same as Atlantic Canada. If operating costs can be reduced substantially and/or revenue increased to improve financial performance, the continuation of rail service could be justified.

[10:45]

There are many things that could be done to improve the revenue position of the E&N. First, the particular rail car that runs on the E&N today has the capability of travelling this line at 90 miles per hour. However, because of the condition of the trackage on Vancouver Island, that train has an average speed of 40 miles per hour, hardly close to its potential. So to improve the rail service for Vancouver Island, we need some trackage improvements. According to documents that I could find, in the last few years there has been some $2.5 million of investment in improved trackage for the island itself. However, there have been limitations on the Malahat because of curves and grades and so on. However, I believe that in this day and age we can find ways and means of overcoming some of those barriers. Certainly from north of the Malahat through to Nanaimo and on to Courtenay there is no reason why the trackage could not be improved to the degree that this rail car could run at closer to its optimum speed, perhaps 70 miles an hour, and by so doing provide better service for the people on Vancouver Island.

DEPUTY SPEAKER: The Chair hesitates to derail the hon. member, but his time has expired.

MR. LOVICK: I understand that the Minister of Transportation and Highways would like to respond, and also one of my colleagues. So I shall keep my remarks fairly brief. I would just like to clarify something, however, and I must sound like a revisionist historian when I listen to my friend from Cowichan-Malahat.

To say that the compensation was "fairly heavy" is clearly one of the great understatements of all time. The compensation was outrageous; it was one of the most significant ripoffs ever recorded in this country's history — no question. Indeed, the E&N story is part of the reason why we have that famous Canadian song, the refrain of which goes — and I hope this language is parliamentary because I am quoting: "God damn the CP, god damn the CP, god damn the CPR." I think that is a widely held perception across much of this country, certainly in the prairies and in many towns on Vancouver Island.

Regarding the future of the E&N, obviously that too is an issue that stands before us and should concern us. When the member for Cowichan-Malahat resumes, I hope he gives us some suggestions as to the kinds of initiatives this government ought to be taking in terms of putting pressure on the federal government to upgrade the service on that line and give the people of Vancouver Island something approaching the kind of deal they thought they had negotiated, lo, those many years ago.

HON. MR. MICHAEL: Mr. Speaker, I too will make my remarks brief. I thank the member for giving us the outline of the E&N and bringing it to the attention of this assembly.

We are aware in this government that federal subsidy is required to keep this railway in operation, and it's no surprise; all passenger railways in the province of British Columbia and the Dominion of Canada, to my knowledge, require a subsidy. Clearly this is a matter for federal jurisdiction, and this minister and this government will be very active in the next few months in asking for additional federal money into British Columbia in modes of transportation, whether it be railway or primary highways throughout the province. The figures and facts are well known. We are currently sending in excess of $600 million to Ottawa every year through gasoline taxes and other vehicle-related taxes, and in total we receive from the federal government for highways and other modes of transportation less than $50 million.

However, the recent ridership on the E&N.... I've got the figures here, showing 1982 passenger transportation as 43,135, and by 1985 it had grown to 51,000. So it's clearly growing. However, we do know, in looking at the deficit and the loss of the E&N Railway, that the subsidy amounts to about $30 per passenger. Clearly, it's a good service; it needs to be continued and improved, but it is going to require federal money to make it possible.

MR. MILLER: I will take a very brief moment to express my puzzlement at why this government is supporting federal legislation that will deregulate the transportation industry and make it easier for railways like the E&N to abandon parts of their service. The minister himself objected to the CTC,

[ Page 1308 ]

under the current regulations, to E&N's request to abandon. That whole system will disappear; they will be able to do it. This government is supporting that change; in fact, they've promised to bring in their own legislation to do a similar thing in the province with respect to trucking. So I'm a bit puzzled.

MR. BRUCE: Clearly, there are some things that can be done with respect to the E&N to make it a better and more viable service, a service in which perhaps the subsidy is not needed to the degree that has in times past been argued by Via Rail and the CPR. If you just take a look at the scheduling and the service of the passenger rail there now, it almost goes against anybody riding that particular service for it to be useful or purposeful in providing a vehicle by which one can get from one city to another for specific endeavours.

If we were to take a look at the E&N, keeping in mind that understatement which I'm glad my friend from Nanaimo picked up, the fact that the E&N and the CPR clearly owe the people of Vancouver Island a good and decent rail service.… If they were to look at the aspect of running the service in the way the customer demand or the ridership was looking for, they would find, I think, the opportunity and the potential for increasing that ridership. Perhaps they could use a two-car system — and I only lay this out — one starting in Duncan early in the morning and coming to Victoria, one starting in Nanaimo at the same time and going to Courtenay. The return trip from Victoria would go all the way through to Nanaimo and meet with the train coming back from Courtenay to Nanaimo so there could be an interchange. With the train being able to do 90 or 75 miles an hour, there's no need for this total 4 1/2 hour trip from one end to the other; those two cars could then make another trip, leaving Nanaimo for Courtenay, leaving Nanaimo for Victoria, the Victoria run ending up in Duncan in the evening, and again, the car coming from Courtenay back to Nanaimo — fairly simple. I think they would find that the ridership would increase.

The tourism potential of the line is unlimited. Granted, it may not be in their charter or under their agreement that they must provide that type of service. However, the trackage needs to be of the capability that those of us trying to promote tourism for Vancouver Island — the province, the Ministry of Tourism — can take advantage of.

It has been talked about for many years, the aspect of having a steam train starting here in Victoria. Can you imagine the millions of people coming from the States on one of the two steamship trips into the harbour here in Victoria, then being moved from the ship on an old horse-and-buggy carriage around to a steam train just around the harbour, onto that steam train, up and over the Malahat, stopping in all that wonderful country of Cowichan-Malahat, spending some time in Duncan, then in Chemainus, and perhaps even heading up to Ladysmith and Nanaimo? It would be absolutely fantastic. It would be the type of trip that people would come from miles around to take in. But the trackage has to be in the shape that is necessary so that a steam train can run.

Ski packages. I like to ski, and I know there are other members here who like to ski. My friend from Esquimalt likes to ski; I've met him on the mountain as well. He too could take part in an early-morning ride from Victoria straight up to Courtenay and up the mountain, using that train service as a high-speed manner of getting to Courtenay.

Mr. Speaker, I realize my time is up. I would like to impress upon the members of this House: when you're coming to Cowichan-Malahat next week to take part in the British Columbia Festival of the Arts, rather than driving up, catch the dayliner and come on up to Cowichan-Malahat, enjoy that beautiful view over the Malahat and see what the E&N is all about.

DEPUTY SPEAKER: Your enthusiasm is infectious, hon. member. I've let you go over a minute. The Chair recognizes the government House Leader.

HON. MR. STRACHAN: I rise on a point of order, Mr. Speaker, and I wish to address it to the second member for Nanaimo (Mr. Lovick). The point of order is that one cannot use the device of quoting from a song or refrain or any other device such as that to bring unparliamentary language to the House, but outside of that everything you said was just fine — and agreed to.

MR. LOVICK: I would just respond to the point of order, Mr. Speaker, by thanking the hon. House Leader for drawing that to my attention. I will certainly be guided by that in the future.

URANIUM MINING REGULATIONS

MS. SMALLWOOD: What I'd like to talk about today is the uranium moratorium and, more specifically, what I'll term the uranium issue in this province. Over the last little while, I've been getting a rather intensive lesson in what the uranium issue is in our province by looking over some of the old material coming out of the Bates inquiry, some of the briefs and the "Uranium Inquiry Digest," which was a summary of the hearings.

In addition to that, I've just returned from a trip into the Okanagan where I met with several different environmental groups, and they in turn raised similar concerns to me. What I'd like to talk about in particular is the regulations that have been brought down governing the exploration of uranium. I'd like to outline that briefly for people so they know, more or less, what those regulations pertain to.

The regulations for this province at this time deal with designated areas specifically. What they do is spot-zone the province. They have, in essence, zoned all existing uranium claims in the province and laid out regulations to govern that particular property. The way the regulations go is that anyone doing any other exploration for other minerals in the province who should come across significant levels of uranium and/or thorium then is honour-bound to report that.

They then become part of that designated area and have to do baseline surveys to record the amount of radioactivity. They have to publish all of that in the government publications. While I believe both the government and a lot of people in our province are focusing on uranium mining, there doesn't seem to be enough attention paid to the fact that there are other health issues related to uranium in this province.

Many of the deposits in this province are surface deposits, and that makes them very susceptible to any surface activity and causes concern when the surface is disrupted and when erosion takes place, contaminating either groundwater or creeks. The concern that I bring at this point is the lack of overall regulations that address that concern.

We all recognize that the Bates inquiry was not completed, so we don't have the opportunity to canvass all of the issues that were thought to be of importance, like community health and safety. When we do look at the Bates inquiry, we

[ Page 1309 ]

realize that it was a forum to provide international access to knowledge. We had an opportunity there to bring experts into B.C., to learn from their experiences and to understand better some of the significant problems we would be facing in this province.

What I would like to see happen in dealing with the regulations, rather than spot-zoning the province, is a more comprehensive zoning of the province that identifies uranium-rich areas, governs the industrial activity in those uranium-rich areas and has ongoing monitoring and testing of all water supplies, not as presently exists. I've had it explained to me that it's either on a five- or seven-year rotation throughout the province in different areas for water other than drinking water.

When you look at other examples, in particular New Mexico, where there are significant uranium deposits, what they have done there is identify mineral belts which are uranium-rich areas. In particular, I refer to the Grant mineral belt. What they have done is put an overall water management area in the Grant mineral belt area, and there has been comprehensive testing in that area on an ongoing basis to monitor the uranium activity and to ensure community health and safety.

[11:00]

I think that we should be looking at that kind of testing. Not only would it be a benefit to identifying problems, like soil erosion, whether it's related to logging activity or road construction or, indeed, other mining activity where uranium might be found in mine-tailings, or perhaps even housing developments; it would begin to allow this government to get a real handle on where the problems are and then allow us to address those problems. That's not going to go away, whether or not there is actual uranium-mining in this province. The opposition remains opposed to uranium-mining in the province.

In addition, I think it's important to look at what those areas might look like. I've done some research into the areas of uranium in this province and begun with a map with the actual designated areas. You can identify three comprehensive uranium-rich areas by the claims alone. Beyond that, it was interesting to me to look at the geological areas in which uranium is found. When you do that, you realize that there is a trench running throughout this province from top to bottom, and that trench takes almost two-thirds of the province — areas where there is the likelihood of finding uranium.

It raises some significant questions for me about the need for work and commitment from the province. I don't think the regulations and the lifting of the moratorium, and indeed the inaction since the Bates inquiry, can be excused. I would be very interested in what the Minister of Environment has to say.

HON. MR. STRACHAN: I'd like to thank the member for the comment and for bringing this issue to the House today. The government, of course, is aware that many people are concerned about the action taken.

On February 28, 1987, when the cabinet took the action to discontinue the moratorium on uranium, cabinet was aware that many British Columbians would be opposed to the nuclear industry. However, after a thorough review of the issue, it concluded that there was no practical reason to continue the moratorium. There is very little likelihood of any significant uranium exploration or development in the foreseeable future, because the government has no intention of considering nuclear power as an energy option for British Columbia. Indeed, it would be folly, Mr. Speaker, to consider that when we're so encouraged about hydroelectric power, its availability to the province, and also the sale of it to other jurisdictions. There is also a substantial oversupply of uranium on world markets.

I should point out at this time that the most extensive uranium-mining, exploration and sale in western Canada was done in Saskatchewan under the administration of the New Democratic government. I'll just let that observation stand.

We felt the development of other minerals that sometimes occur in association with very low levels of uranium, such as gold, silver, and some rare earths, was being needlessly hampered by the very stringent provisions of the moratorium. The most immediate effect of the moratorium's expiry, therefore, is likely to cause some increase in exploration activities for these other minerals.

The member has mentioned this, but I'll state it again: cabinet has recently approved a set of comprehensive regulations to govern all exploration activities associated with levels of radioactivity above certain prescribed limits. The regulations, which came into effect on March 1, 1987 — and they came from the Bates commission — designate known areas of radioactivity where exploration will be subject to very stringent control, and new areas will be designated as they are encountered. The regulations require baseline surveys of radioactivity prior to work and govern the conduct of exploration activities, worker health provisions and the safe disposal of water and waste materials. Any proposals to explore in designated areas must be advertised in the British Columbia Gazette and local newspapers. I might add that British Columbia is the only province in Canada that currently has regulations governing exploration in uranium- and thorium-bearing areas.

Further, all mine-development proposals are subject to the province's mine-development review process, which ensures a complete review of environmental and social impacts. In addition, any proposal involving significant levels of radioactive substances would probably require licensing by the Atomic Energy Control Board of Canada. Through these processes the province will work with federal authorities to ensure protection of the public, the workers and the environment before any such development is permitted. Both processes also make provision for public consultation and review.

While accepting the concern of the member, and I guess of many British Columbians, the government believes that we have acted appropriately. We've taken due and thorough consideration for the health and safety of the citizens of our province, and we are going to continue with this policy. I can't at this point see any reason to change, or to re-establish the moratorium.

MS. SMALLWOOD: I'd like to thank the minister for his prepared response. I am somewhat distressed that the minister was not listening to some of the concerns, because I think they're very serious concerns. And those concerns that I raised.... While remaining opposed to uranium mining and recognizing its link with nuclear power and weapons, I am raising the concerns of water quality; I am raising the concerns of health in uranium-rich communities. I believe that it is incumbent upon the minister to deal with those concerns.

[ Page 1310 ]

When the minister refers to the stringent provisions of the moratorium, it is recognized both by the ministry and by others concerned that the moratorium, in and of itself, did not have the kind of teeth that was of public perception. The quotes that I heard, when inquiring in the ministry, were that they were pleased and relieved to have the regulations that were brought down after February, because it was the first time in law that, indeed, there were regulations that govern the exploration of uranium and thorium — and I recognize that. What I am pointing out is that while this is the first time there has been law on the books that deals with this, it has not gone far enough; it does not deal with community safety standards; the government has not given the communities the opportunity to explore the full information and impact of the potential hazards that are there; the government and the statement that the minister has made do not recognize the fact that there are creeks in this province that are at or above the radioactivity and toxic levels set down by the federal government.

What that says to me is that if we do not have a comprehensive plan that deals with watershed management, that acknowledges that there are these problems in the province, we will be reacting to those problems rather than managing and avoiding those problems in advance. The government had much of this information seven years ago. It has refused to act. Unless the government does act and we are testing our drinking water standards down the road, at some point we will find that we have a problem and instead of managing our resources will be trying to clean them up.

HON. MR. SAVAGE: Mr. Speaker, may I have leave for an introductions?

Leave granted.

HON. MR. SAVAGE: It gives me a great deal of pleasure to introduce to the House today the 11th Sitka Brownie Pack from the constituency of Delta. Would the House please make them welcome.

HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 37, in the care of the Minister of Finance and Corporate Relations.

TAXATION STATUTES AMENDMENT ACT, 1987

HON. MR. COUVELIER: Mr. Speaker, the Taxation Statutes Amendment Act, 1987, Bill 37, amends 12 statutes which impose taxation in the province. These amendments are being made consistent with our policy of providing taxation statutes which are clear, easily understood, and updated periodically to reflect current business practices.

The amendments contained in this bill replace outdated existing provisions for taxpayers to appeal assessments to the courts and provide updated procedures; amend other sections to ensure that the intent of the legislation is clear; and provide legislative authority to release tax-related information to the director of the Canadian Security Intelligence Service, with the approval of the Minister of Finance and Corporate Relations, when it is in the interests of national security.

The amendments also repeal the property tax levy under the Grasshopper Control Act, as the cost of administration exceeded the relatively insignificant amounts received from the levy.

The exemption of $25,000 of income under the Logging Tax Act is being repealed, as logging tax is fully deductible against tax payable under the Income Tax Act of Canada.

All of these sections will come into force either on July 1, 1987, in the case of the appeal sections, to have uniformity among the taxation statutes, or on January 1, 1988, in respect of the Taxation (Rural Area) Act, or by regulation in the case of section 5 of the Horse Racing Tax Act. The remaining sections become law on royal assent.

Mr. Speaker, I move second reading of this bill.

MR. STUPICH: The opposition has no quarrel with most of this bill but does have some concerns, questions and arguments about one section in the bill that allows for the release of confidential information.

This section will give the minister — and I think it's worth discussing it in second reading so that the minister may have an opportunity to respond now or be prepared to go into more detail when we get to committee — the authority on his own to release confidential tax information with respect to information filed under some nine pieces of taxation legislation to the Canadian intelligence service. Our concern is that it doesn't stop there. Even if it were just there we might be worried, but the Canadian national intelligence service has an agreement with the CIA that allows for the free exchange of information between those two organizations. I suppose the net effect of that is that no longer will we have to go to garbage dumps to get confidential information; we can get it from the CIA direct. And who knows with what organizations the CIA exchanges information? And to what end, what purpose? Certainly some of us are very concerned about activities of the CIA over the last several decades. So we are worried about that.

It is true that there already is agreement to exchange information between the several taxing statutes among people who are dealing with taxes, and even with the federal government when it comes to dealing with specific taxes. But this is to release information for some other, unnamed and unknown purpose, and the minister is to do this strictly on his own.

The minister did say — not in this discussion but earlier, I think, in an interview — that some eight provinces have already signed an agreement with Ottawa to enter into this kind of an arrangement. We don't know what it is they've signed. The memorandum itself that has been signed has not been made public, to my knowledge, and I'd like the minister to either file a copy of that or give us some information as to just exactly what is the nature of the document that has been signed, because that in itself may offer enough protection that our concerns will be allayed. We did some checking and found out that Manitoba, for example, has not signed yet and, as a matter of fact, hasn't even seen the document that they're going to be asked to sign, although they know the general thrust of it.

One wonders why it is necessary to give this kind of blanket authority to the minister. It means that taxpayers involved in paying these various taxes, who, up to this point.... And that's what our taxation system depends upon, really: the inherent honesty of people, or perhaps to some extent their fear that if they don't file proper tax returns then the authorities will be after them. But generally our tax system is self-policing. People are expected to file honest returns. Some don't. Some get caught. And perhaps some get away with it. But if people — corporations or businesses —

[ Page 1311 ]

know that the information they're giving with respect to these various tax returns.... Are they going to be a little more concerned about trying to withhold certain information that is otherwise important to government if they know that that information may be in the hands of an organization that operates worldwide and in the ways that the CIA, for example, does? Why not have a requirement that they at least be informed that such information has been asked for about them and that they be told what information is being passed on? There may be reasons sometimes when that can't happen, but it seems to me we're giving the minister himself just a little too much authority to deal rather loosely with information that up to this point has been considered to be very confidential.

We don't know whether this is the same way the eight provinces that we've been told have signed such an agreement with Ottawa are handling it. Perhaps there's more protection there for the taxpayers that the information will not be released unless there's some exceptionally good reason for doing so. Here the legislation would give the authority to the Minister of Finance. In other jurisdictions there may be other hurdles that have to be jumped before that kind of information can be passed on and made public to the extent that this bill would have it made public.

[11:15]

Will the taxpayers, when they fill in tax returns with respect to these nine separate tax collections, be told, when they file those returns...? Will there be a line on the tax returns to the effect — a warning, if you like, like on cigarette packages, I'm told; I don't have any, so I don't use them — that any information contained in these tax returns may be shared with the Canadian national intelligence service, and it in turn shares it with the CIA who shares it with anybody that they want to share it with? Will there be that warning? Will there be any kind of a report at any time from the minister as to exactly what information is being sought in this connection? And to the extent that the minister is providing the information, will he sometimes deny requests for information?

Mr. Speaker, I don't really want to go into this as a point, except that the minister, as an explanation for not telling us about this when he first introduced second reading and in response to a comment outside, said it's one of over 20 pieces of legislation that he's had to bring in and he just wasn't aware what was in which and didn't always have the time to read them. I can appreciate that. I know the difficulties. But I wonder how easily the same sort of thing will happen with respect to requests for information from the Canadian national intelligence service? Will it be simply a sort of bureaucratic thing that somebody handles? Perhaps the minister may sign it in the same way that Radar used to offer documents to his commanding officer to sign in "M*A*S*H." Sometimes it was a blank paper that was being signed; of course Radar knew that, but the commanding officer didn't. Is that the way this thing will be policed when the minister gets busy?

We're worried, we're concerned, and unless the minister can show us a copy of the memorandum, can show us what has been signed and exactly what the agreement is, or can give us some solid assurances that it will not be abused, the opposition will vote against this bill in second reading simply to register our objection to this particular section.

MR. D'ARCY: Mr. Speaker, I believe the first member for Nanaimo, being his usual reasonable self, understated the issue here. I am absolutely aghast that the government members, that that Social Credit Party which rhetorically goes to incredible lengths to tell the world how they believe in the rights of the individual and the sanctity of personal privacy, would countenance their minister bringing forth a piece of legislation that has never been needed ever before in this jurisdiction, has never been needed anywhere else in Canada, and to my knowledge has not been needed in the United States or in other democratic countries.

This country is not at war. This kind of legislation, this kind of disclosure, was not needed for security purposes in the First World War, the Second World War, the Korean War. What national emergency is there? What occurrence? How has our security been threatened by the fact that individual taxpayers in this country, private records, have been protected from the scrutiny of the heavy hand of the Social Credit government of British Columbia? I know of no instance where it has even been alleged, however unreasonably, that national or provincial security has been threatened by not having this kind of knowledge in the hands of the Minister of Finance of this province or any other. It is absolutely ridiculous.

This section of the bill should be withdrawn, and our group is going to be voting and dividing against this bill not for this reason alone, but because quite clearly it is a totally unnecessary interference with the rights of individuals in this great province.

MR. LOVICK: Mr. Speaker, perhaps I can strike a balance between the quiet and calm reasonableness of my colleague from Nanaimo and the member for Rossland-Trail. I think the issue we're concerned about here is, however, a fundamental one and cannot be overstated.

I'm not going to suggest for a moment that the Minister of Finance is somehow treating our concerns cavalierly or would dismiss them as overreaction. What I want to suggest is that the minister's response, when we raised this issue before, points to what I think is a fundamental and significant concern that we must not lose sight of. When we spoke some time ago about our fear concerning where this information would be given and whether it would be accountable to anybody, available and accessible to anybody, the minister suggested to us that we didn't really have to worry. If we continued to elect good, sensitive, responsible government leaders there would be no difficulty, and that's the point I want to address, however briefly.

The danger in a democratic system of government is that we too often forget the frailties of the individuals to whom we entrust responsibility. We fail to recognize that above all, our system of government relies and rests on a government of laws rather than on individual human beings. The principle is one that is enunciated in constitutional law. I'm sure the minister is familiar with the famous Latin question: "Quis custodiet ipsos custodes?" It simply says, Who watches over the watchers? or Who takes care of the caretakers? or Who guards the guardians? I think that is precisely the kind of question we have with this bill, and we hope the Minister of Finance will indeed respond to a question that we have presented to deal with that concern: namely, whether we will get a copy of the federal-provincial agreement alluded to in this bill so that we can examine and understand precisely what it is that we're dealing with. Unless and until we know

[ Page 1312 ]

the answer to that question, we feel we have no choice but to vote against the bill.

So I hope we can get those kinds of answers. I hope we can get the assurances that the individuals whose lives may be directly affected by that transfer of information will be given some knowledge, some kind of protection.

HON. MR. COUVELIER: First of all, can I just express to the members of the opposition my awareness of their concern and the reasons for their concern, and the valid comments they have made this morning. As the House knows, I did apologize for the rather light-hearted manner in which I introduced the bill to the House.

As to the question of whether the memorandum of agreement can be shared, I've already embarked on a request of the Attorney-General's ministry for some guidance in that respect. The difficulty, as you might appreciate, is that we're talking about issues of national security, and I have no way of knowing to what extent the contents of the memorandum might be a matter of public debate. From my point of view, I have no difficulty with the suggestion that the people's representatives are entitled to know the people's business. However, I will take guidance on that particular question from higher legal authorities.

Mr. Speaker, recognizing the valid concerns expressed this morning, I now move that the bill be read a second time.

[Mr. Speaker in the chair.]

Motion approved on the following division:

[11:30]

YEAS – 30

NAYS – 17

Bill 37, Taxation Statutes Amendment Act, 1987, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: I call second reading of Bill 11, Mr. Speaker.

SOCIAL SERVICE TAX AMENDMENT ACT, 1987

HON. MR. COUVELIER: Mr. Speaker, Bill 11, by enacting changes to the Social Service Tax Act, will accomplish a major part of the government's restructuring of the tax system. In addition, the bill provides certain new exemptions from tax which will improve fairness and assist specific industries, and makes changes which will improve the administration of the tax.

The social service tax rate is reduced from 7 percent to 6 percent effective March 20, 1987. The primary objective of this reduction, the largest single tax measure in the budget, is to improve the fairness of the tax system. Sales taxes have often been criticized for imposing a heavier tax burden on individuals and families with low incomes. In the past, efforts have been made to minimize the effect on those with low incomes by exempting necessities such as food and shelter. However, the government has decided that a more effective approach is to restructure the tax system to reduce our reliance on a sales tax. By lowering the rate at which this tax is applied, the tax burden will be reduced further, significantly adding to the progressivity of the tax system.

The expected cost of this measure is $236 million in '87-88. The government is committed to a further reduction in the social service tax rate to 5 percent within the '87-88 fiscal year. Although the bill makes provision for this reduction, the date on which the change will occur is not specified. This is to reduce possible market disruptions caused by individuals delaying major purchases until the new tax rate comes into effect.

The third major tax change is that social service tax no longer applies to restaurant meals. This measure came into effect on March 20, 1987. Eliminating the tax on meals costing $7 or more removes a significant administrative burden from the restaurant sector. This measure will also assist the tourism industry by encouraging visitors to spend more in our restaurants. The expected cost in 1987-88 is $21 million.

Bill 11 will also make general changes to the list of exemptions from social service tax. These measures reflect the government's commitment to improve the equity of the tax system. One of the basic principles of the sales tax is that an individual should only pay tax once on a particular item. The government has identified certain types of transactions where the potential exists for the same person to pay tax more than once on the same item.

New exemptions or refund provisions will be available to avoid multiple taxation in three types of transactions: sale and lease-back arrangements; repossessions by the original owners; and repurchase of horses through the claiming process. This change should eliminate most cases of double or multiple taxation.

Second, effective March 20, 1987, the following changes are introduced to assist the mining industry: grinding media used to extract minerals from ore will be exempt; a refund will be available for drill bits used for mineral exploration and extraction; and a refund will be available for explosives and related blasting supplies when used for certain specified mining activities.

These changes implement one of the recommendations of the Mineral Industries Task Force and will provide tax relief of approximately $10 million to the mining industry in 1987-88. This demonstrates the government's commitment to assist the mining sector, an industry which has been hit hard by depressed world commodity prices in recent years.

[ Page 1313 ]

Thirdly, an exemption from knitting yarns and natural fibres used to make or repair clothes is introduced, effective March 20, 1987. This measure will improve the consistency of the sales tax because yard-good materials and clothing patterns used by people who sew their own clothes are already exempt. During the last year, more than 20,000 people pointed out to me and previous ministers that taxing yarns discriminated against people who knit their own clothes since yard goods used to make clothes are exempt. The cost of this measure will be about $600,000 in 1987-88.

Fourthly, certain safety-, farm- and aquaculture-related items are exempt effective March 20, 1987. The newly exempt items are similar to the types of goods already exempt in these categories. These exemptions will also provide additional assistance to the farming and aquaculture industries. This measure will reduce provincial revenue by about $400,000 in fiscal 1987-88. Finally, leases or rentals for terms of less than one month are subject to tax on the lease price, effective March 20, 1987.

Prior to the budget, short-term leases were exempt from tax. This artificial distinction between different types of leases has led to administrative difficulties for some businesses. In addition, there has been an unwarranted incentive for individuals to create a series of short-term leases when, in effect, an item is leased for longer than one month. The government is keenly aware of its responsibility to ensure that the administration of the tax system does not favour one business over another.

One such case which has emerged in the last year will be corrected by this bill. Out-of-province television marketing companies which use dedicated cable television channels to advertise their products in British Columbia will be required to collect and remit social service tax. Those companies that do not comply will be unable to use cable television channels within the province. At present, television marketing companies have an unfair competitive advantage over British Columbia firms selling similar products.

This is because they do not collect tax on sales to British Columbia residents. The change will help restore a level playing field by ensuring that these companies are subject to the same requirements as businesses in British Columbia. This provision will not become effective until it is proclaimed, in recognition of ongoing federal-provincial discussions on the issue. The bill also contains a number of other measures which are designed to improve the administration of the tax and reduce government costs.

In summary, this bill accomplishes several important budget measures, including: a tax rate reduction from 7 percent to 6 percent immediately and to 5 percent later on this year; changes to the list of exemptions from the tax and other minor changes which will improve fairness, assist specific industries such as mining and improve the administration of the tax; and, lastly, removing the significant competitive advantage currently enjoyed by out-of-province television marketing companies.

I move this bill now be read a second time.

MR. SIHOTA: In dealing with this bill, I want to essentially focus in on only one provision that causes me a fair bit of concern. I am sure that the minister is aware that there is a new subsection (3.1) being introduced in this legislation that deals with property that is leased by native Indian groups.

On March 16, 1987, the Court of Appeal of B.C., by way of a judgment in a decision called Metlakatla Ferry Service Ltd. v. British Columbia, ruled on the matter of conflict between section 87 of the Indian Act and the provisions of the social services tax that required individuals to pay tax on lease payments that are made. In that case the company had acquired a ferry, which was then leased from the band. As a result of that, under the provisions of the social services tax, which are obvious, taxes are not payable on the vessel when it's purchased, but instead a tax is imposed upon the lease payments. I think to that extent the minister would agree.

However, the company that was leasing this — and it's fair to say that the company and the band are essentially one and the same, if the corporate veil were to be lifted.... The tax that was imposed upon the lease pursuant to the act was not paid by the native group.

As a consequence of the band's decision not to make those payments, the matter was taken to court, with the government arguing, on one hand, that the provisions of the Social Service Tax Act ought to prevail, and the native group arguing that, given what section 87 of the Indian Act says, the federal legislation ought to be paramount to the provincial. Just for background, section 87 of the Indian Act basically provides that the personal property of Indians or bands is exempt from taxation if it is situated on a reserve; and in those cases neither the Indians nor the band are liable for any type of taxation with respect to that property.

In any event, the issue before the court in simple terms was whether or not the provisions of section 87 of the Indian Act superseded the provisions of the tax legislation. The court, as a result of argument from both sides, ruled on March 16, 1987 that the provisions of the Indian Act are paramount to the provisions of the Social Service Tax Act.

[Mr. Pelton in the chair]

That decision was handed down on March 16, 1987 and four days later we saw the proposed amendments to the act and the introduction of subsection (3.1) in the legislation. Apart from simply questioning the timing — because I also appreciate the fact that most of this legislation did come down on March 20, 1987 — so I don't want to suggest that there is any motive that can be labelled as suspicious on the part of the government. But I do want to say that if one were to take a careful reading of that decision, it's evident that section 87 of the Indian Act ought to prevail. It always has and the Court of Appeal decision simply did that.

[11:45]

We have subsection (3.1) being brought forward which tries to bypass the Court of Appeal decision, and by bypassing the Court of Appeal decision it hopes to now attach a tax to these types of lease arrangements entered into by native bands. It strikes me that the amendment, without going into the wording of it...because I also think that the new subsection is very poorly worded. But apart from that, the point still remains that I believe that at the end of the day subsection (3.1) will be deemed again to be ultra vires, because I think we all know as a basic rule that federal legislation is paramount to provincial legislation.

All the ministry is inviting by introducing this subsection is further litigation on this very matter. I'm sure we've spent, in the case of taxpayer problems in British Columbia, a fair bit of money to take this case to the Court of Appeal, let alone the expenses that have been incurred by the native groups; and we've just invited more litigation, litigation which, in my humble opinion, will result in the same type of decision —

[ Page 1314 ]

that the provisions of section 87 which have been tested over and over again in numerous provinces, not just in British Columbia, are paramount to provincial tax legislation.

So on that basis alone I have significant problems with what is being proposed here in the legislation and I look forward to the comments the minister may have to make. I would implore the minister — and we'll deal with it again at committee stage — to take a second look at that provision, which achieves very little except invite further litigation. I'm sure, given the minister's comments in the past about people who come from the same profession as I do, the last thing the minister would want to do is make people in that profession even more rich, because they are the only profession that really stands to benefit. I would implore the minister, therefore, to recognize that (3.1) is ultra vires. It is outside the ability of the province to pass that type of legislation, and hopefully by the time we get to third reading on this, subsection (3.1) will be withdrawn.

MR. MILLER: I too wish to speak to that particular section in a slightly broader context.

I was pleased to hear, when I first came down to Victoria and listened to the throne speech.... I am going to quote the words spoken at that time with respect to the whole question of this government's relationship with native Indian people in British Columbia and directions that seemed to me were spelled out: "My government seeks a new, mutually productive relationship with the native Indian people of our province. The recently formed committee of cabinet responsible for native Indian affairs will work closely with our native people in self-government matters and matters of mutual interest."

Having heard that, as I said, and having been somewhat heartened by the tone, and what I sensed was a change in direction, I am disappointed that the government has brought this section into Bill 11. It seems to me that a lot more work is required to be done by the government in trying to improve their relationship with the native Indian people. Beyond that, and much more important, is to try to resolve some of the outstanding issues that we have in this province around the question of aboriginal title and land claims.

The government indicated that they wanted to deal with the issue more in the vein, if you like, of economic development. I would really wonder at the impact that this kind of change is going to have in terms of that question. My colleague has mentioned the issue of the Metlakatla ferry, and it was with some struggle that that band managed to put that whole enterprise together. It was welcome, and I think it is always welcome when we can see that kind of initiative and enterprise in terms of job creation and people being productively employed. Perhaps some members don't realize the great odds that exist in some native communities in trying to promote those kinds of developments. Certainly this amendment contained in Bill 11 will do nothing to foster or enhance that kind of development.

I hope my colleague from Esquimalt-Port Renfrew is absolutely correct when he suggests that the provision would be ultra vires, and I hope that is the case. But even if it is not, there are lots of reasons why the government should not proceed with this kind of amendment. I don't think it is going to do any good for their relationships or any efforts that they are going to make in trying to improve the situation for native Indians in this province, in terms of the revenue that would be gained by the amendment. I don't know if the government has an estimate of what it would be, but I would suggest it is not that large. So I think there are ample reasons for deleting this section.

MR. STUPICH: It is very difficult for the opposition to consider voting against a tax reduction. May I say that we are not up to the challenge; we are not going to vote against it. But may I say also that personally I have some real question about the advisability of this and wonder at the direction of the government. The minister did try to tell us something of his philosophy in introducing second reading of this bill, but there is a lot more that I would like to discuss with him, and will on this bill to some extent, and perhaps to a greater extent in his estimates, assuming we get to those eventually.

When I think of the loss in revenue.... The minister drew attention to the figures. Dollarwise it is the largest single item in the budget, $236 million. Something just over half of that is being paid by the consumers, so they are saving perhaps $132 million, according to the latest figures I have been able to get. So it is a significant saving. But it is a saving that I feel is not as progressive as it would have been if we were still under the rules as they were when the sales tax was first imposed, for example. There have been a lot of exemptions that have made it a less regressive, more progressive tax.

I think of what could have been done with that extra $240 million by way of helping those who aren't able to help themselves. The minister, for example, did say that the GAIN supplement is being increased this year, and it is being increased by an amount calculated to protect those who are receiving GAIN from the increase or the service fee they are having to pay for prescriptions. Let's hope that one will balance the other off, and some who don't use prescriptions might even come out a little bit ahead. But those are the people that are spending the money in their communities and keeping the wheels going. If they had that extra money to work with, instead of giving $120 million back to industry by reducing the sales tax.... That is approximately the portion that industry will be saving. If all that saved money were used and were given to the lowest-income people in the province, then they would be spending it in their communities, they would be improving their own lives to some extent, and they would be improving the economic life of their communities.

There are better ways that it could have been done, rather than to simply reduce the rate — a rate, to the best of my knowledge, about which there was little concern. I heard all kinds of suggestions as to what the minister could do in his budget; I'm sure he and his staff heard many others as they travelled the province. I don't recall ever hearing anything about the rate of the sales tax. I know it's higher in some provinces, and I know Alberta has none. I just don't believe there was that much objection to the sales tax; not nearly the objection that there has been raised to the new imposts introduced by the minister in the budget before us. When I think of the ways in which he's gone after the lowest-income people in particular: in other legislation changes to the homeowner grant, which are going to hit those of lowest income, and to some extent the senior citizens; the changes in income tax, which reduce the rate of tax for the highest-income people and increase it for the lowest; the insurance premium, which, again, is hitting everybody to the same extent, I suppose, but it hurts the lowest-income people hardest; the prescription fee I've already mentioned; the fee for ancillary

[ Page 1315 ]

house services, at $5 every time you go — it's $5 for each one of us, for each time, but the lowest-income people, again, are the ones hurting most.... So it would seem as though this is one more way in which the minister said that those who want to go out and spend their money on luxuries....

I didn't mention the restaurant tax. I think it is a good move to take that off. I agree with the minister: it was costing a lot of money to administer, from the point of view of the restaurants, and was almost impossible to check. Restaurants were trying to find ways of getting around it. It was a nuisance more than a way of raising money. That is a good move. And there are other good moves in this legislation.

Personally, I can't feel very happy about supporting a move to reduce government revenue by $140 million, when at the same time I know that more than that amount is being taken out of the pockets of the lowest-income people in the province. I think there could have been a better way.

The opposition will support this legislation.

MR. D'ARCY: Naturally we're pleased — I think, as all members are — at the appropriateness of any tax reduction when the Minister of Finance deems it possible.

I want to speak briefly about the restaurant tax, and say how pleased I am that it is being eliminated. It was clearly one of the most insidious and ridiculous taxes that we've had in the province of B.C. in recent years. Once again, the first member for Nanaimo (Mr. Stupich) was very reasonable when he said it was a nuisance tax. I can think of far more heavy-duty descriptions of it than that. So we're very happy that it is gone. And I hope, Mr. Speaker, that we never again see that type of taxation in British Columbia that's retroactive; that there's an exemption up to a certain point, and then, all of a sudden, it's retroactive to one cent, which is what the restaurant tax was. Clearly it taxed unfairly one of the major job-producing areas of our economy. I'm heartily happy to see it gone.

However, a more important point I want to make, Mr. Speaker, is that, while I'm naturally happy to see reduction in this overall sales tax, it is my view, strongly held, that the Minister of Finance, if he has room in his budget to reduce some taxes in British Columbia, should be looking at taxes, the reduction of which would produce jobs and economic activity in British Columbia.

Next to the restaurant tax, the silliest tax in terms of killing jobs in B.C. is the water tax, or electricity royalty. Although the minister will, like his predecessor, get up and say: "Oh no, it's not a tax or a royalty; it's indeed a water rental," that term "water rental" is worthy of George Orwell himself. The fact is, no tax in British Columbia has suppressed jobs in the resource industries and in manufacturing and impacted — to use the minister's own term — regressively on the consumer as that tax has. On the average it applies to about 20 percent across the board to electricity costs in the province of British Columbia. I think the term the minister used was: he wants to reduce the "regressivity." I think he must have been talking to the Hon. Mr. Joe Clark when he came up with reducing the "regressivity," because that's the sort of language we would expect.

However, Mr. Speaker, I want to impress my feeling, hopefully on the minister, that in the province of British Columbia the basic economy is fuelled by jobs in manufacturing and in the resource industries. The service sector and the retail sector take their money and recycle it from those bases. After all, to the unemployed person, Mr. Speaker, it doesn't really matter whether.... To the person who has no money to spend on taxable items, it really doesn't matter whether the sales tax is 6 percent or some other figure. The bottom line is to get more people working in British Columbia, and a good way to start with tax reduction would have been the water tax.

[12:00]

HON. MR. COUVELIER: Mr. Speaker, the points made about subsection (3.1) deal with a very sensitive subject, the relationship on native Indian matters between the federal government and the provincial jurisdiction. For the information of the members opposite, our best information is that the amendment dealing with that subject will not be ultra vires and is defensible.

The very question that was raised is passing strange, and while far be it from me to comment on a decision of the courts, I nevertheless find it difficult to understand how a ferry that's used off the reserve was found to be based on the reserve and therefore tax exempt. In any event, we're talking about a principle here, and we have all kinds of evidence that suggests that the exclusion of sales tax on transactions undertaken by natives, which might at their choice be passed on to others, thereby providing a tax advantage and increasing the lack of competitiveness in the marketplace, is something that has to be addressed. There is a basic inequity in the situation as it presently exists, and we are very actively involved in discussions not only with the natives but also the other ministries and other governments on that subject.

I can remember a press statement only two weeks ago by a native leader, commenting that it was their intention to import taxable goods and sell them to non-natives tax exempt. If you talk about the economic impact in rural B.C., I can't envisage any more dramatic impact on a retailer, say, in the local communities of this province with any kind of major initiative that might be undertaken by native bands in that respect. I trust the members would agree with that comment.

So, Mr. Speaker, with those comments I'm pleased to move second reading.

Bill 11, Social Service Tax Amendment Act, 1987, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 8.

INCOME TAX AMENDMENT ACT, 1987

HON. MR. COUVELIER: Mr. Speaker, the amendments made by Bill 8, the Income Tax Amendment Act, 1987, are an integral part of the government's program for restructuring the taxation system.

The current tax legislation is extremely complex, making it difficult for the average taxpayer to comprehend. Let me stress that the government is committed to easing that situation. These amendments will reduce complexity, through the revision and elimination of certain sections of the Income Tax Act. The first step in this process is the repeal of the 10 percent high-income surtax and the 8 percent health care maintenance surtax. Those sections of the 1984 Income Tax (Health Care Maintenance) Amendment Act, which have never been brought into force and which relate to the health care maintenance levy, will also be repealed.

[ Page 1316 ]

One of the fundamental principles underlying the design of the income tax system is the progressive nature of the taxrate structure. Application of this principle ensures that fairness and equity are maintained in the levy of provincial income taxes and that taxes increase as the taxpayer's ability to pay increases. It is due to the progressive nature of the income tax that the government has chosen to shift the burden of taxation onto this tax from the less progressive social service tax. Thus, the basic individual tax rate is being increased to 51.5 percent from the average effective rate of 48 percent, including the previous surtaxes. This single rate is applied through the federal-provincial joint tax collection system to basic federal tax, which in turn is calculated by applying the federal rate structure to taxable income. By applying a single provincial income tax rate to basic federal tax, the provincial system automatically reflects the progressiveness that is inherent in the federal rate structure.

[Mrs. Gran in the chair.]

Unfortunately, this increase in the personal income tax rate has substantially increased the degree of disparity between the individual and small business corporate tax rates. Failure to correct this situation would result in some taxpayers — especially high-income professionals — incorporating simply to reduce their effective rate of income tax. The government is committed to preserving a measure of harmony in the integration of the individual and corporate tax rates in the interest of fairness. Accordingly this bill increases the small business corporate tax rate by 3 percent to 11 percent.

The repeal of the individual surtaxes and revision of the individual basic tax rate will take effect January 1, 1987, for the 1987 and ensuing taxation years. As the changes are being introduced part-way through this year, the new rate will not be reflected in source deductions until July 1, 1987. However, source deductions in the six-month period July to December 1987 will be adjusted to ensure that collections reflect the 51.5 percent rate applied over the full 1987 calendar year.

Finally, by virtue of the straddle provisions contained in this bill, the small business corporate tax rate adjustment will be effective July 1, 1987, for whatever portion of each company's taxation year occurs after that date.

I move the bill be now read a second time.

MR. STUPICH: Madam Speaker, this is easier. We have no problem at all with this bill. We all quite wholeheartedly oppose the legislation before us right now — that is, on the opposition side.

While it does provide for a tax reduction in some ways, it much more than makes it up with the increase. And in spite of what the minister said about the progressivity of the Income Tax Act in raising government money, it moves a step away from that by doing away with the high-income surtax. While the minister said that it makes the tax form less complicated, I would think that the 102,500 people who paid this tax in the year just finished, to the tune of some $30,600,000, are much more interested in saving the $30,600,000 than they are in seeing one line left off the tax return. I think it does little to improve the tax return, but it would have cost the government -had it been in effect a year earlier-some $30,600,000. It does reduce the rate of income tax for the people in those highest-income tax brackets, along with increasing it for the.... Everyone in the lowest and in the middle-income groups will be paying a higher rate of tax than before. The people in the highest tax brackets will be paying at a lower rate of tax — more tax, but at a lower rate than they were before.

So, Madam Speaker, it's not progressive; it's regressive in its application in that respect. While I can appreciate the desire and the good sense it makes to incorporate the health maintenance surtax in with the general income tax rate.... That's really what it was in any case, just another way of calculating income tax and putting a fancy name on it, and we opposed it at the time it was introduced, partly on that basis and partly on the basis of the increase at that time. But in this particular instance the bill on the whole is regressive rather than progressive, and on that basis the opposition opposes it.

MR. MILLER: Madam Speaker, I too want to register my opposition to it. Unless we start to deal with the whole problem of tax fairness in this country, we're going to get into the tax revolts that we've seen in other jurisdictions. Working people, when they do have well-paying jobs, really pay through the nose. There are no exemptions and none of the devices used to escape tax that are so common in the business world. They really get socked when they're earning a fairly decent income, and increasingly they're starting to register their displeasure at being the main taxpayers in this country. Unless we start to get into reform of the tax system.... We see some reforms in the United States. But to perpetuate a system — and this bill really does perpetuate a system — that really sees the people in the mid-income level paying a much higher level of real taxation than those in the upper income brackets.... We're doing nothing to solve what I think will become an increasingly important question.

This bill is clearly designed just to raise additional revenue, and it's not creative or imaginative. It really does not deal with the fundamental problem of tax fairness. I think that that's an important question and one that governments increasingly are going to have to pay attention to, and do that fairly quickly.

HON. MR. COUVELIER: Madam Speaker, I can well understand why the opposition party would have difficulty dealing with a tax increase and therefore would vote against it, but frankly I cannot agree with the comments I've heard so far on this bill. It seems to me that it was intellectually and morally correct to remove the two surcharges that had existed in our income tax schedules for many years.

If you look at the charts comparing tax rates of other jurisdictions across the country, they are so full of footnotes and qualifications and different trigger points and different exemptions that comparability is absolutely confounded and becomes impossible. In attempting to deal with the question of what is a fair tax structure — and we spent considerable time considering that matter — it became obvious that most provincial jurisdictions hid behind a lot of almost artificial devices that created the impression, in the public mind at least, that they had a low tax rate. The fact is, there were surcharges, exemptions and different trigger levels, such that the spoken statement of fact was frequently not quite accurate. In any event, we think it's morally defensible to eliminate those surcharges.

Secondly, dealing with the question of tax rates for the poor, no matter at what point you set your plateau for higher tax rates or lower tax rates, those falling just under the net or

[ Page 1317 ]

just out of the net will feel abused, and we can all wax eloquent about how they're being treated unfairly. Any progressive tax system has to have plateau and trigger levels, and all we can do in that respect is our very best to try to be fair about it. But the basic point made with the budget taxation philosophy is that we wanted to get into a progressive tax system, which is what an income tax system is. We could hardly have reduced the sales tax had we not also found some other devices that might enable us to raise the revenues we need to increase spending in the areas of education, health care, student aid, social services. We made, with this budget, the most dramatic increases in spending in the recent history of this province, and I'm very proud of that. Obviously that has to be paid for.

With the modest increases in provincial income taxes contained in this bill, we are still the second lowest of all the provinces in Confederation. No one who studies the figures could claim logically that the British Columbia resident is abused by the income tax rules and regulations in this province. They are not, Madam Speaker. Our tax structure compares very favourably vis-a-vis the rest of the country. But most important, we made a philosophic decision that we were going to get into progressive taxation and away from regressive taxation, and that's what this bill does.

I now move second reading.

Bill 8, Income Tax Amendment Act, 1987, read a second time on division and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: Madam Speaker, I call committee on Bill 5.

ASSESSMENT AND PROPERTY TAXATION
AMENDMENT ACT, 1987

The House in committee on Bill 5; Mr. Pelton in the chair.

Sections 1 to 5 inclusive approved.

Title approved.

HON. MR. STRACHAN: Actually, the minister should do it, but I'll do it. I move the committee rise and report the bill complete without amendment.

[12:15]

Motion approved.

The House resumed; Mrs. Gran in the chair.

Bill 5, Assessment and Property Taxation Amendment Act, 1987, reported complete without amendment, read a third time and passed.

HON. MR. STRACHAN: Committee on Bill 7, Madam Speaker.

CORPORATION CAPITAL TAX
AMENDMENT ACT, 1987

The House in committee on Bill 7; Mr. Pelton in the chair.

Sections 1 to 3 inclusive approved.

On section 4.

MR. STUPICH: Just looking at section 4, 18.1(1), I just want to make sure I understand this. The way I read this, the corporation calculates its corporation tax payable and from that deducts any income tax payable. Is it total income tax payable to the federal government and provincial government?

HON. MR. COUVELIER: That's correct.

MR. STUPICH: I find it hard to see a situation — but I guess I haven't seen corporation capital tax returns — where a company would be paying more corporation capital tax than it would income tax, but maybe financial institutions do. I thought the minister yesterday in second reading said that it would be from the provincial corporation tax, and this didn't read that way, and I wondered.

Now corporation tax itself is deductible before you calculate income tax. It's a deductible expense. It seems to me this is going to make the calculation a little more complicated than the high income surtax was. As I understand it, you calculate your corporation capital tax, you then calculate your corporation income tax and deduct, along with all the other expenses of operating, the corporation capital tax, and arrive at an income tax payable, and then start all over again. I'm not sure — how does this work?

HON. MR. COUVELIER: It's been some years since I've filled out a tax form in that respect myself. However, it is is true that the reason we have been concerned with the amount of taxation that has been paid by financial institutions is that they have not had very significant income tax payments. As a consequence, we felt compelled to introduce our own taxation measures to make sure that we did get at least some minimum level of return for their presence in our province.

Now in terms of the sequence of presentation, if you had some specific questions maybe we could deal with them, but I have some trouble with the general nature of the question. Could you help me out so that I might give some specific answers?

MR. STUPICH: Mr. Chairman, I am going to try. I am having a little difficulty too.

You calculate corporation capital tax on the basis of the criteria, the amount of money borrowed, long-term borrowing and reserves, and all that kind of thing. That's the calculation that takes place before you calculate corporation income tax, because corporation capital tax is an expense that is included before you arrive at your taxable income. It is one of the expenses deducted along with all the other expenses before arriving at the income upon which you calculate your corporation income tax.

You have to then know what the corporation capital tax is before you can arrive at your corporation income tax, and having decided what your corporation income tax is, that then is deducted from the corporation tax. In the event that it is zero or less, then there is no corporation capital tax paid. That is the last opportunity that the two of us will have to discuss this, Mr. Chairman, and I am afraid we are not going to get very far. I wonder if the ministry really has thought this

[ Page 1318 ]

through in detail. I suppose they must have, because it is not a very long bill. But I don't understand the calculation; it is going to be difficult.

HON. MR. COUVELIER: Mr. Chairman, I will be pleased to send a memo showing those calculations at the earliest convenience.

Sections 4 to 6 inclusive approved.

Title approved.

HON. MR. COUVELIER: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved on division.

The House resumed; Mrs. Gran in the chair.

Bill 7, Corporation Capital Tax Amendment Act, 1987, reported complete without amendment, read a third time and passed on division.

HON. MR. STRACHAN: Committee on Bill 10, Madam Speaker.

INSURANCE PREMIUM TAX AMENDMENT ACT,
1987

The House in committee on Bill 10; Mr. Pelton in the chair.

Sections 1 to 3 inclusive approved.

Title approved.

HON. MR. COUVELIER: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mrs. Gran in the chair.

Bill 10, Insurance Premium Tax Amendment Act, 1987, reported complete without amendment, read a third time and passed.

HON. MR. STRACHAN: Committee on Bill 12, Madam Speaker.

HOTEL ROOM TAX AMENDMENT ACT, 1987

The House in committee on Bill 12; Mr. Pelton in the chair.

Sections 1 to 3 inclusive approved.

MR. STUPICH: Mr. Chairman, you're moving a little bit fast for me. I'm sorry, but I'm trying to find this "other entity" phrase, and I'm not sure which section it's in. I thought we were on a different bill; I was on 13 when you were on 12. It refers to municipalities, regional districts, or other entity....

AN HON. MEMBER: Section 4(3).

On section 4.

MR. STUPICH: Thank you. Yes, it says "eligible entity." Who could that…?

MR. WILLIAMS: What is an eligible entity?

HON. MR. COUVELIER: Mr. Speaker, the difficulty we have in considering how to draft this particular legislation is that it is conceivable that there may be in some areas of the province a particular limited geographic area that is neither a regional district or a municipality but rather some other organization or some other geographic structure that might be represented by a different type of organization.

The tourism industry is probably one of our most dynamic industries currently in B. C., and I'm sure the members opposite are aware that in their own communities, there are new alliances, new consortiums of mutual interest being formed for the purpose of promoting tourism and doing a variety of things related to tourism. In order to ensure that we had the flexibility to react quickly to whatever a community or area wanted to do in terms of its tourism efforts.... I don't use the word "promotion," because it may well be and I think it currently is.... There is enough financial flexibility in the area of promotion itself. But in the broader scheme of things, there may be some areas of the province that need some seed capital — some nurturing — and we wanted to provide it with this kind of description.

Unless the Minister of Tourism (Hon. Mr. Reid) were able to provide a current, up-to-date report as of 12:30 today as to what likely structures might arise.... I know I'm not able to do it. But in discussing how the act would be drafted, we considered and wanted to make sure that we had as much flexibility as we could for the local communities to deal with this.

MR. STUPICH: Mr. Chairman, I question the need for this other eligible entity. The legislation provides that at the request of a municipality or regional district, the minister will agree to the imposition of an additional two points in the rate of hotel room tax. Now if the community of Nanaimo, for example, wanted to do something for one area within that community, then what it has to do is pass a bylaw, and the minister approves it, or whatever the procedure for approving it is, and the municipality says, "This is precisely what we're going to use it for. We're going to use it for developing this particular project." You don't need a special entity.

[12:30]

For example, could this eligible entity be a gambling casino? The minister is shaking his head, so of course that's ridiculous. Perhaps it is ridiculous, but then what isn't? If we put in and give the authority to the minister to determine whether or not an entity is eligible, when he already has the authority to deal with a regional district or a municipality, and the whole of British Columbia is covered by regional districts.… There isn't a square inch of the province that isn't in some regional district. It would seem to me that if it has the support of the elected officers of a municipality or of a regional district, then the voters in the area have had some say in deciding whether or not this kind of thing should happen. But if it's left to an undefined eligible entity and we don't even know how it is going to be defined or who it will be

[ Page 1319 ]

defined by, then I feel this brings in something that may lead to abuse. The minister said, in discussion of another bill, that all you have to do is elect good people. I would suggest that right now the majority of people in the province feel they didn't do that in the last election.

SOME HON. MEMBERS: Oh, oh!

MR. STUPICH: That isn't a safeguard. It might be for today, but by tomorrow people's opinions change. So it isn't enough to say: "I'm a good minister and I won't abuse this." I don't think that power is needed, and I'd like the minister to convince me that it is necessary.

HON. MR. COUVELIER: Mr. Chairman, I agree. I can't envisage it either in the area of Nanaimo, where anything other than one of the local elected bodies would deal.… But we have areas of this province where the regional districts are so huge that there's hardly any compatibility or agreement in terms of what one community or one town in that regional district might wish to do over another.

It's also conceivable that there might be an entity even larger than a regional district. Let's consider, for example, Vancouver Island. We have often talked at the local government level about the fact that Vancouver Island is, and should be, the destination centre for tourists — not Victoria, not Nanaimo, not Sidney, not Port Hardy, but Vancouver Island — and that it's about time we came to grips with the fact that we will be far stronger as an island people if we can work together and cooperate to develop our own tourism infrastructure that maximizes the opportunities that are out there for us.

The finance critic suggested — and focused on this — that the problem might well be smaller jurisdictions, or part of an existing local government. But the reverse might be true; it might be an amalgam of many regional districts. On Vancouver Island we've got five or six regional districts, if I'm not mistaken. So for an Island-wide initiative to be undertaken, it would obviously have to be a different entity than either a local government or a regional district. It would likely be the Association of Vancouver Island Municipalities, which is a very loose confederation of local government members.

I think it's important, given the dynamics inherent in the tourism industry, that we introduce and maintain as much flexibility as we possibly can so that no opportunities are missed; maybe more importantly, the opportunity for local government representatives, whether elected, appointed or self-appointed — it doesn't matter — to make a case that would convince the government that they should be considered a separate entity. It is a fast-moving industry with a whole different set of dynamics than we have ever experienced before.

MR. MILLER: Just for clarification, if that term "or other entity" wasn't in there — let's use his own example, an association of municipalities or regional districts on Vancouver Island — is the minister saying then that they would be prohibited from getting together and deciding in each of their territories, whether it be municipality or regional district, to carry out the kind of program that you were talking about, a group program in terms of: "We'll all do this in our respective municipalities for a broader purpose?" Is the minister saying that without "entity" they would be prevented from doing that?

HON. MR. COUVELIER: I don't know whether I am being confused or the questioner is. As I understood the question, it was that it should be adequate to leave as a definition a municipality or regional district; why would you add "other entity"? If I understand the thrust of your question, it is: "Are you saying that you wouldn't allow another entity?" Am I not following this properly? Maybe you could elucidate a bit so I can be wiser. I would like to be wiser.

MR. MILLER: In elucidation, Mr. Minister, you used as an example for having this entity in the legislation some unforeseen circumstance, some unforeseen situation that would not be covered by a municipality or a regional district. You used the example of Vancouver Island, where presumably you were talking about a collection of municipalities or a collection of regional districts. You seemed to suggest to me that that would qualify as an entity, and that is why you required this in the bill.

My question to you was, I thought, fairly simple. If that word "entity" did not appear, are you suggesting that they could not do that, that they could not combine forces and still carry out the purpose of the legislation in terms of enacting this tax? In other words, is the term really needed?

HON. MR. COUVELIER: Not being a member of the legal fraternity, I am starting to move into waters I could be quickly criticized for not being competent in. But as I understand that wording, "a municipality, regional district...shall not expend for a purpose other than a prescribed purpose...." It seems to me that that's a limiting clause, and in order to allow total flexibility, you've got to add "eligible entity." I think it's obvious to all of us that.… I haven't introduced it here in my response, but the obvious entity that might qualify under this would be a convention centre, in terms of how to pay for its loss if there is a projected loss in its operation. So I can visualize in some communities — greater Victoria being one of them — that local governments may choose to use this option for that purpose; and there are others around the province, I think. But it isn't intended merely for the operation of convention centres, I hasten to add. It really is sort of an enabling piece of legislation that allows a dynamic industry to, upon application to us, move in some new, exciting directions as those opportunities may occur to them.

MR. MILLER: My understanding is that only government can tax. Would this allow this entity, private corporation, whatever...? Are they going to be allowed, under this legislation, to tax? That's surely the purview of government only — elected government; not appointed, elected. The levels we have in this province are provincial, municipal, regional district and school board. Is there a danger here? I don't want to blow this thing out of proportion, but is that a danger here?

HON. MR. COUVELIER: I apologize. I didn't understand where you were coming from. Quite clearly, we're not expanding the taxing authorities in the province. So these entities would be making application to the appropriate

[ Page 1320 ]

taxing authorities for permission to tax. There is no suggestion that we would be expanding the taxing authority. That's not suggested.

MR. WILLIAMS: But they get the revenue.

HON. MR. COUVELIER: You know, we can't have it both ways. I don't think we can sit in this House and say we're the wise people and we will adjudicate what's best for the people in the communities, or, on the other hand say: "Here's a piece of enabling legislation; tell us that you need it and we've got this enabling legislation to provide it." We can't have it both ways, Mr. Chairman.

MR. STUPICH: I think even the minister doesn't really know why he wants this, and if it is something that's important, it could be done at a later date. I want to move an amendment to section 4, dealing with 2.1(2), where it reads: "...where on the request of...." My amendment is to delete the words "municipality, regional district or eligible entity" and to substitute "municipality or regional district." The effect is to remove the reference to an eligible entity.

I invite the minister to accept this amendment. It's not hurting the purpose of the legislation in any way at all. It does away with concerns we have. As a matter of fact, at one point the minister said it doesn't matter whether it is an appointed group or an elected group. Well, it does to us. We think that's important, and what we're suggesting would certainly not in any way at all impede the progress of any plans now being considered by the minister. Of course, the Minister of Tourism, Recreation and Culture (Hon. Mr. Reid) isn't here. It's always possible that something might have to be done at a later date to clear this up, and at that time there would be a better argument in favour of it and some specific reasons for wanting to include it. So I commend this amendment to the minister's attention.

MR. CHAIRMAN: The member has filed a copy of the amendment with the table, and it is in order.

On the amendment.

HON. MR. STRACHAN: The government will not be accepting the amendment. Also, the amendment is incomplete because it doesn't refer to other mentions of "entity" throughout the bill. We will not accept it out of principle, but there is also a flaw.

MR. CHAIRMAN: The amendment is still in order, so we'll call the amendment to section 4. Shall the amendment pass?

Interjections.

MR. CHAIRMAN: I would say the noes have it.

MR. REE: On a point of order on the proposed amendment, I draw the House's attention to the definition of "municipality" under the Interpretation Act, which gives the impression that there are legal entities within the province other than a municipality or regional district. I would suggest this term "entity" is appropriate, so I will be voting against this amendment. If hon. members would look at the Interpretation Act, I think they'd appreciate the reasons for it.

MR. STUPICH: Mr. Chairman, I think we already voted, and you declared that the nays had it. I'd like to call for a division on that.

Amendment negatived on the following division:

[12:45]

YEAS – 13

NAYS – 26

On section 4.

MR. BLENCOE: I just want to comment briefly upon this eligible entity question. I think I know what the Finance minister is trying to achieve, but unfortunately, where I think we got into trouble this morning is that the minister, for whatever reason, hasn't laid out the entities that will be eligible. I know, for instance, and the minister referred to it, that the Association of Vancouver Island Municipalities.... There are other associations across the province, like the North Central, that I have had discussions with, who would like the ability to be able to do some regional kind of tourist promotion and that sort of thing, and they don't have the ability to do that on a financial basis.

I think we were correct in voting against this section and moving an amendment. Unless we have laid out those elected groups that will receive public dollars, we could get ourselves into trouble with this kind of section. Being the Municipal Affairs critic, I certainly would suggest that the minister go back with whichever other ministries are involved and lay out which elected groups would have the power to participate in this section and who would be eligible. I certainly don't think we would have any trouble, Mr. Chairman, if a region.... We as a party are promoting regional differences and uniqueness and the ability to develop them on an economic basis, but we would like to see a list of what groups are eligible.

As to the minister's point that there may be areas that don't have representation or elected groups, well, partially that's true. But every area, as our critic suggested, is represented by a regional district, and the minister is aware that that regional district could apply for those funds. Then, as an elected group, if they see fit they could allocate those dollars to an organization in the region that wished to carry out promotion or whatever. I think that would be the appropriate way. I think you've got to work through elected bodies, and at the moment that's clearly not laid out, and that's our concern.

[ Page 1321 ]

But we would certainly support some regional approach to tourism. No question about that.

Section 4 approved.

Sections 5 to 8 inclusive approved.

Title approved.

HON. MR. COUVELIER: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 12, Hotel Room Tax Amendment Act, 1987, reported complete without amendment, read a third time and passed.

Interjections.

AN HON. MEMBER: Adjourn.

HON. MR. STRACHAN: No, the second member for Saanich and the Islands has some business to do.

VICTORIA FOUNDATION ACT

MR. HUBERTS: Mr. Speaker, I move that Bill PR402 be read a second time.

I've mentioned already that the Victoria Foundation is a successful non-profit foundation which was created by private act in 1936, and today has assets totalling more than $2.5 million. In the last decade it has given close to $1 million in grants for the aged, for educational programs, for cultural and other charitable purposes.

MR. G. HANSON: Mr. Speaker, I would just like to indicate that we are supportive of the objectives of this foundation, which are to receive donations and to hold in trust property that is donated by individuals in the greater Victoria area. We would like to urge support for the foundation.

Motion approved.

Bill PR402, Victoria Foundation Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

UNIVERSITY OF VICTORIA FOUNDATION ACT, 1979
AMENDMENT ACT, 1987

MR. HUBERTS: Mr. Speaker, I move that Bill PR406, the University of Victoria Foundation Act, 1979 Amendment Act, 1987, be read a second time now.

MR. G. HANSON: Mr. Speaker, I understand that this particular statute allows the University of Victoria to administer scholarship funds. We are clearly in support of that — the more the better, given the educational system in this province. We support it.

Motion approved.

Bill PR406, University of Victoria Foundation Act, 1979 Amendment Act, 1987, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: I will advise the House now that in all likelihood we will be sitting Wednesday afternoon. We will be considering more business of the Minister of Finance on Monday, at least, and possibly on Tuesday morning.

With that said, I wish you one and all a very fond weekend and happy times, and best wishes to Rick Hansen again. I move adjournment of the House.

Motion approved.

The House adjourned at 12:57 p.m.