Hansard — Friday, March 25, 1988, Morning Sitting — British Columbia Legislative Assembly

MR. SERWA: This morning I have a good-news item for the House. On behalf of my colleague the second member for Okanagan South (Mr. Chalmers) and myself, I wish to extend congratulations to the Kelowna junior girls' curling team, who last night, representing Canada, won the world junior women's curling championship in Chamonix, France. The members are Julie Sutton, Judy Wood, Susan Autey and Maria Geiger. Would the House please join me in congratulating them.

MR. STUPICH: I ask the House to welcome my guests, my sister Vi and her husband Richard Forster, Ald. and Mrs. Owen Kennedy, and, to my surprise — it's the first time he's ever been here; I guess he thinks it's going to be my last — my brother Roy.

MR. PETERSON: Mr. Speaker, on behalf of the first member for Langley (Mrs. Gran) and myself, I would like to introduce to the House 36 students from the Credo Christian School, accompanied by one of their teachers, Mr. De Jong, and, I believe, three other adults. Would the House please join us in making them welcome.

HON. L. HANSON: In the gallery today are two very good friends of mine, Mrs. Iris McLean and Mrs. Helen MacDonald from West Vancouver. Would the House please make them welcome.

Hon. Mr. Veitch tabled, on behalf of the Attorney-General, the current rules under the Court Rules Act for the Supreme Court.

HON. MR. STRACHAN: Debate on the budget address, Mr. Speaker, on the motion that Mr. Speaker do now leave the chair.

MR. STUPICH: Mr. Speaker, in the 1986 election campaign the Premier promised the voters of British Columbia a fresh start. A year ago the Minister of Finance (Hon. Mr. Couvelier) rose in this House to deliver his first budget: the first chance to give substance to the Premier's claim. The Finance minister now tells us that the same principles have guided his decision-making this year as last. What we have, then, is a two-year package. What we find in this package is a big tax-attack, one that hits not only working families but especially those British Columbians who are least able to pay.

This year's budget takes $700 out of the pockets of the average B.C. family. Adding that to the tax grab in last year's budget, working families in this province are now out of pocket more than $1,400 in the 18 months since this government took office. This year families will face an increase in health care premiums of $192 a year and individuals an increase of $108. B.C. is now competing with Ontario for the highest health care charges in Canada, at a time when only three provinces out of ten charge any premiums. Premiums are widely recognized as a regressive and unfair tax.

The budget yesterday showed that the Finance minister has looked in every nook and cranny in B.C. households for ways to raise more revenue. This is a budget which brings higher taxes on property, motor fuels, vehicle insurance premiums, alcohol and cigarettes. And for a Premier and government elected on the promise of cheaper bottled beer, this is a budget which introduces a new, special 10 percent tax on draft beer. Presumably the profit from that is going to pay for the reduction in the bottled beer price, whenever that comes.

All this from a Premier and Minister of Finance who promised open and fair government just one year ago. Can we really have fair government without fair taxes? And what about the second part of that promise? Do we have open government? I'm not talking about the promises on freedom of information and conflict of interest, promises from the Premier that he no longer seems interested in keeping. I'm asking a simple question. Has the government been straightforward and honest in explaining its finances to B.C. taxpayers?

In my response to the Speech from the Throne, I mentioned that the new Finance minister seemed to be following an old Socred tradition: underestimate your revenues and under spend your budget to make your performance look good at the year's end. Now I see that he's drawn on an even older Socred tradition with his new BS — or budget stabilization — fund. Some might even see the ghost of Major Douglas here.

Last year the government estimated a deficit of $850 million. That justified, in the minister's mind, a continued squeeze on public services and a tax grab of enormous proportions on B.C. families. Now the minister tells us we actually had a deficit of $800 million. But that is after dumping $450 million of revenue, which the minister intends to put into a special budget stabilization fund. The budget deficit was, in fact, $350 million — exactly $500 million less than what the minister said last year, and exactly what I said the morning after he delivered his budget speech. Either the minister was very bad at forecasting revenue and expenditures, or he's been following that first old Socred tradition I mentioned: underestimate revenue and overestimate expenditures.

A little more about that fund: it really is a BS fund. It could just as easily have been $4.5 billion as $450 million. Just add another zero, and it would have increased the deficit accordingly. It means nothing because there isn't one nickel to back up that fund. The government doesn't have the money. It's $6 billion in debt right now, and to say that we owe $450 million to a new fund means nothing, except that it will be politically useful.

The government is proposing to add to that fund next year; they say by $124 million. It doesn't matter what the figure is; they can make it anything they want to produce the deficit that the minister is now saying we are going to have next year. It can be any figure at all, and it doesn't mean a thing, except that when they want to bring that money back into revenue, all they have to do is take the funds. Funds? There's no money there.

When they want to increase their surplus or reduce their deficit in any year, they simply make a journal entry transferring from that fund to the surplus or deficit, whatever it is,

and they come up with any figure they want. So in an election year they can produce any surplus they want in the budget simply by making a journal entry and transferring, as they are doing now. That's all it is. It doesn't mean a thing; there isn't one nickel backing up that fund.

For 1988-89, the minister is estimating a deficit of $395 million, and that's counting the $124 million that he's going to put into that special fund. Without that, he would be estimating a deficit of $271 million. I'll say now, he's overestimating his deficit again — this time by $300 million. We'll see what happens this time next year.

Put that $124 million into the special fund, and the shell game is well underway. What the minister has done with the budget stabilization fund proposal is establish a new special fund of $450 million — a phony fund; not one nickel of real money in it. W.A.C. Bennett started this practice of having special funds in B.C.; Dave Barrett, as Premier and Minister of Finance, did the same thing. But whenever they set up a special fund, there was money to back it up. That money was cash in the bank or investments that were there and could be used for the purposes of those funds. That isn't the case now.

The previous Socred government appropriated all the assets of the existing rainy day funds. When the Socreds came into office in December 1975, the NDP administration had left $538.4 million in special rainy day funds, and the cash and assets were there. Those cash and assets were all taken into what they now call the combined accounts, and there are no cash or assets of any kind to back up the fund balance today — or at least on December 31, 1987 — of $150.8 million. They've run down the funds and taken all the cash and assets out of it. Now they're going to put $450 million more into the funds without putting one nickel aside for any purpose in the future.

Not content with starting one fund with a deposit of Socred deficits, the minister has created two. The second, called the privatization benefits fund, we can assume will be opened with a deficit of at least $68 million. They're going to start out with a deficit — the cost of the early retirement package necessary to facilitate privatization and the sell off of British Columbia's public assets.

What does the budget tell us about Socred priorities? Some important public issues, such as protecting B.C.'s environment, received not a mention, and as in the throne speech, the budget makes no mention of women. Nor is there any mention of youth. When I look at this budget I find that funding for existing programs for women and youth has actually been reduced. Parents and educators will welcome the 7.4 percent increase in funding for our public schools — the first real increase in many years. However, more could and should have been done for our public school system.

While this budget raises the government's share of funding to 63 percent of the total cost, regressive property taxes still account for 37 percent. While the non-residential property tax is being raised by 8.7 percent, it still remains $337 million before the level in 1982. The funding shortfall is still being carried by residential property owners and by tenants, whose rents rise with the property tax burden. Our relief at seeing some redress for the distortions of chronic underfunding is diminished by the spending priorities of government. The intention is clearly to starve the public system while encouraging the growth of independent schools. While public school funding rose by 7.4 percent, spending on independent schools jumped by over 18 percent. The public school system obviously enjoys second-class status with this government.

The increase in post-secondary student financial aid to $58 million shows that the government is finally addressing the hardships caused by years of neglect. That's good. While it's a welcome start, this increase won't give B.C. the finest program in Canada, as the government claims; rather it should move us from the very bottom of the list to somewhere near the middle ranks. Additional aid should help improve the distressingly low participation rate among 18- to 24-year-olds at our colleges, institutions and universities. B.C. was seventh-lowest in Canada in 1984-85. Unfortunately, while this may fuel the hopes of young people wishing to enroll in post-secondary studies, how many are doomed to be turned away at the doors this year? The government hasn't addressed this problem in the budget.

University operating grants have risen by 5 percent over last year, which, with inflation, means no real increase. Colleges and institutions fared worse, with only a slight increase — to quote the budget — or in fact a reduction of about 3 percent when you count inflation. What this does is heat up the demand among young British Columbians for education, while starving the supply. That must be Socred economics at work in education.

This policy of punishing our post-secondary institutions is a regular feature of Socred governments. It's estimated that since 1981-82, the number of students attending our colleges, institutions and universities has risen by about 29 percent. In the same period, college operating budgets have increased by less than $4 million, which, when adjusted for inflation, is really a reduction of 43 percent.

In the area of health care, the government has said that prevention is an important part of lowering health care costs, yet this budget provides no financial backup support to that philosophy. There's no significant increase for preventive and community care services for 1988-89. Preventive services provide for the management and operation of prevention programs; these include public health nursing, public health inspection, health promotion and education, epidemiology, medical health officers, and clinical services for sexually transmitted diseases. Contributions from this program are provided to municipalities for the delivery of health prevention programs and to agencies providing health promotion programs. This lack of financial commitment to prevention is also highlighted by the demise of the health improvement fund, which had as one of its purposes the funding of initiatives in preventive and community care.

AZT, a drug used by AIDS patients, biosynthetic growth hormone, used for growth deficiencies, and cyclosporin, medication for use after organ transplantations, are now listed under Pharmacare. This means that patients will be footing part of the bill for these very expensive drugs, all of which help prolong the lives of the people taking them. For AZT and cyclosporin, patients will now pay the first $300 plus 20 percent of the drug's cost. This could cost some British Columbia families as much as $2,000 a year.

Individual physicians, people working with AIDS patients, and the British Columbia Medical Association have all condemned this move by the government. Many patients will now have to decide whether to pay for their medication or to pay for their rent.

The government's new spending for alcohol and drug awareness and treatment is welcome; yet of the more than $90 million in new revenue from taxes on alcohol, less than 25

percent has been allocated to these new programs. The bulk of the new money will go into general revenue, indicating that this government sees alcohol as a cash cow rather than a serious social problem.

Agriculture is a vital and neglected resource industry in British Columbia. Agriculture deserved and received two cents of every tax dollar when I was Minister of Agriculture. Now it gets one-third of that, just three-quarters of a cent. But the levels of debt and financial stress remain unacceptably high in the agricultural community.

This is a particularly bleak budget for agriculture. Those sectors adversely affected by the Mulroney free trade deal, particularly the grape growers, who were promised an income replacement program, find that they have been left to work it out on their own. The promise in the throne speech of an international marketing strategy has attracted no new funds, just the $1.75 million it had last year.

This lack of support for the agricultural community may be measured by the loose-cannon Premier, who uses farmers as pawns in his ongoing abuse of the federal government in Ottawa. One minute British Columbia, despite the objections of farmers, is out of the national food marketing arrangements; the next minute it's in. What will happen tomorrow?

The lack of support for agriculture is also shown by the removal of 67 employees from an already decimated ministry. At the present rate of decline there will be no Ministry of Agriculture left by 1992, just four years away.

Thinking along the same lines, it seems obvious to me that the Vancouver Island Highway will be a long time a building, with an allocation of only $6 million. But then, as has been said many times before, why use up a good promise by keeping it?

Just before this budget, the traveling public was hit with increased ferry fares, an increase which will bring in $6 million to the B.C. Ferry Corporation. By coincidence, in yesterday's budget $6 million was cut from the ferry subsidy. This will add to the cost of living for most people on the islands and in Powell River, but the Premier won't notice. He'll be too busy flying on his new $12 million jet, paid for with the tax dollars hidden in the budget estimates of the Provincial Secretary.

Conspicuous by its absence in the budget is any provision for the restoration of motor vehicle testing. If this is to be introduced, it suggests that the motorists will be picking up all the startup costs. Instead of the $5 inspection fee, British Columbians could be paying $25 or more.

I've already pointed out the heavy tax burden imposed on average families in British Columbia by this government over the past two years. In last year's budget, the minister promised to make taxes simpler and more understandable. He said his government would make the tax system more fair for British Columbians. But when you look closely at the changes made last year, what do you find? Changes to income tax rates meant that those British Columbians with taxable incomes between $10,000 and $30,000 faced an increase of about 8 percent. As taxable income rose, the rate of increase dropped. What we find is British Columbians with a taxable income of $60,000 actually had an increase of 3 percent. Those with taxable incomes over $180,000 actually paid less under his new "fair" system. Does the minister really believe that's fair? Unfortunately for many British Columbians, he must, for there's nothing in this year's budget to give relief from last year's tax increases on middle- and low-income families.

A basic principle which guided the introduction of income taxes in Canada was that those with greater ability to pay should take a greater share of the tax burden. In last year's budget, we find the minister taking credit for changes that give high income earners the second-lowest marginal tax rate in the whole of Canada. That was supposed to be progress. Does making the wealthy pay less make the tax system more fair? In the eyes of this Finance minister and his government, it obviously does, since there is no change in this year's budget.

Corporations as well as individuals pay income tax, and fairness must apply to the balance between taxes paid by individuals and families and those paid by corporations. In 1981 individuals carried 75 percent of the income tax burden, corporations 25 percent. Today, with this budget, individuals must contribute 83 percent, leaving corporations only 17 percent of the income tax burden.

Last year the government promised a reduction in the retail sales tax, but then decided it couldn't afford it. After all, they'd given an extra $20 million to the hospitals, so they had to keep on that extra point that contributes about $220 million.

However, although they reneged on the promise to reduce sales tax, they kept their promise to corporations, and they did indeed implement the tax reduction on January I of this year for corporations. At 14 percent, apart from Prince Edward Island, it's the lowest rate in all of Canada.

Small business gets a reduction in income tax in this year's budget, but only from the high rate imposed last year. At 9 percent, it's still I percent above the pre-Couvelier rate, and it is still the second-highest tax rate on small business in the whole of Canada.

The 1987 budget made mention of the fact that the government intended to recover more of the costs of government through fee increases. Did anyone really expect 662 increases brought in since the last budget? I had staff look them up. He said more fee increases. Since he became minister,662 fee increases were imposed without benefit of any discussion in the House — no legislation; simply using the present legislation. Did anyone expect 662 fee increases when the minister said there would be some fee increases? It's difficult to get a clear picture of the amount of revenue raised through these fee increases, since they're spread all through government. But this year the government is promising an additional $40 million in new fee increases.

Increases in fees are hidden taxes. Most people don't find out about them until they go to pay them. They are taxes levied with no regard to ability to pay. In a province with high unemployment and poor public transit, many are finding the 150 percent increase in the fee for drivers' licences hard to pay.

Not all of these fee increases are paid by individuals. Many constitute a heavy charge for B.C.'s small business. Many employers will be paying the hefty increase in health care premiums on behalf of their employees. And businesses have to pay the fees, whether or not they are making money. In the last year the fee for a liquor licence for a restaurant jumped 233 percent from $150 to $500, while that for cabarets, hotels and lounges doubled from $500 to $1,000 per year. Fee increases hit every area imaginable, from mandatory safety inspections to commercial vehicle licences.

If the minister is truly concerned with fairness and efficiency in the tax system, he should look closely at corporate tax breaks. Last year's budget provided income tax breaks of over $58 million for corporations. In this Legislature we give close scrutiny to government spending, ministry by ministry, item by item; yet to my knowledge we have never had a comprehensive study of tax expenditures through tax breaks in this province.

In other western provinces which have studied these breaks, they have found that these breaks equal as much as 14 percent of their government's total expenditures. Federal auditor-general Kenneth Dye called for close scrutiny of tax expenditures in his 1985-86 annual report. Manitoba and Saskatchewan have both begun tabling detailed breakdowns of tax breaks in their 1986 budgets.

In this province, we still give away millions of dollars without any idea if we are getting good value for the revenues we forgo. In last year's budget, the minister said his government believed that taxpayers' money should be used carefully. If he's serious about this commitment, he should have his ministry prepare a detailed study of tax breaks and table it in the House. This budget doesn't even provide a single piece of information on tax breaks.

Looking back at the two budgets this Finance minister has brought down, I would ask the minister to show us a single important measure introduced which has made the tax system more fair. From reducing the tax on banks and trust companies, raising the minimum property tax paid by seniors, to those unfair charges in income tax I've mentioned, the direction of this government is actually towards greater tax unfairness in British Columbia.

The Finance minister praises the government's record for the last year, pointing to a lower deficit and renewed efforts to get rid of the debt. But why do we have deficits? Why are British Columbians saddled with a debt? The answer lies in the record of Social Credit governments over the past 12 years. The Premier and many of his cabinet were important members of past Socred governments. At times in this House they like to forget that, preferring to divert the attention of British Columbians to today's problems. But many of B.C.'s financial woes today can be traced to the mistakes of yesterday.

B.C. is the last major Canadian province to come out of the recession. By now it has become a cliché to say that many of the indicators for our economic future more closely resemble those of the Atlantic provinces than our western neighbours. Any progress in reducing our government's deficit budgets has not been through new economic growth or fair taxes; it has come through higher taxes on average families and a massive attack on public service spending, which will restrain economic performance further down the road.

The Finance minister praises this government's record on job creation, but the minister appears to be easily satisfied. Unemployment for B.C. workers is 40 percent higher than in any other western province, and more than double Ontario's 5.7 percent rate. When the B.C. unemployment rate drops to the 7.5 percent rate that it stood at when the New Democrats left office in this province, then the Finance minister can crow. When the number of unemployed drops below 85,000, as it was in December of 1975, then let's hear from the minister. The minister says: "Good old days." Compared to today, exceptionally good days.

We all hope sincerely that we are at the end of this long period of stagnation in British Columbia. But we have only just exceeded the employment levels of 1981, and this is 1988. Job creation and growth figures spread over a single year may be impressive; spread over seven years, they look much more modest. In fact, in constant dollars the gross provincial product is still below the 1981 level. This means that living standards in this province are still below even our 1981 level, and the investment levels this government brags about in this budget are still below 1981 in real dollar terms.

Not surprisingly, women have been treated as second-class citizens by Socred governments. Women continue to earn only 63 percent of what men earn. They have made only very small gains in the non-traditional job market. Lack of affordable child care remains a major obstacle to full and equal participation of women in our economy. A small increase in child care funding in this budget is a very small and disappointing step in this direction.

Under Social Credit governments, poverty has become a growth industry in B.C. There are now more than twice as many people in the province dependent on social assistance as in 1975. If you combine welfare with unemployment insurance recipients, the number surely must exceed half a million people. According to annual reports of the Ministry of Social Services and Housing, the purpose of income assistance programs is to provide a basic income for British Columbians in need. Many of these are single-parent families who, through no fault of their own, require help. This budget, however, indicates that there will be no increase in income support for the 240,000 persons living on income assistance across this province.

The government has chosen to ignore studies that show families receiving their assistance in British Columbia are living 40 percent below the poverty line. The Finance minister has said that income assistance will only be given to those who are really in need. Is he saying that money is now being given to people who are not in need? Some members of the House may recall that in 1976 the Premier, then the Minister of Human Resources, formed a "welfare fraud squad." It ended in failure. Are we planning a repeat of this witch-hunt? Is this why $42 million has been cut from the income assistance programs?

Personal prospects remain uncertain when unemployment remains high for long periods. Many have become discouraged and have stopped looking for work. Many British Columbians have had to pick up and move to other provinces or even to the U.S. First we had recruiters from California trying to pick off the best of our teachers — not only trying but doing it. Now we have the same thing with respect to nurses. The brain drain that was halted in the seventies has been resumed with full force.

Many communities remain afflicted with unacceptably high rates of unemployment. The official figures for the West Kootenays and for Kamloops still stand at over 20 percent. The editor of the local newspaper in Kamloops advised me that the true figure is at least 27 percent, possibly higher.

When the youths of these communities are forced to move away to find jobs, the community is impoverished far beyond the economic indicators. This, too, is part of the legacy of 12 years of Social Credit mismanagement. Twelve years of Social Credit mismanagement has left us with a legacy of debt.

When the New Democrats left office, there had not been an operating deficit in the province of British Columbia since the public accounts dated March 31, 1918. There was a deficit that year, and it was paid off the next year. There never

was another deficit in the province of British Columbia until the public accounts tabled by the Hon. Evan Wolfe in 1976. With this budget British Columbians have now faced nine successive deficits for an accumulated deficit of over $6.5 billion.

What is worse is that for the period of 1980 to 1988 the government predicted deficits amounting to $3.4 billion, but actually ran up a total accumulated deficit of $6.5 billion, almost double their prediction: $3.1 billion worth of incompetence costing the average B.C. family $3,500. How did they manage this? Or, to be more precise, how did they mismanage this?

MR. STUPICH: Yes. Two projects alone account for more than $1 billion of this in cost overruns — the Coquihalla Highway and SkyTrain. This is mismanagement of public funds on a massive scale. The Coquihalla Highway was budgeted first at $375 million and came in $500 million over budget. SkyTrain was budgeted at $289 million and came in $700 million over budget. These two projects alone cost the average family in British Columbia $1,500 more than it had to.

The government says the net provincial debt is now $4.2 billion, or $5,400 for the average family, but that's realistic only if we intend to sell off the public's assets, including our highways, our hospitals and our parks. If we get rid of all those assets, then our debt is a mere $4.2 billion. That's not realistic. Obviously that isn't the plan, though the wild ideas the Premier sometimes espouses should make me hesitate in saying that it may not be their plan.

When the Socreds took office in December 1975, the government had no direct debt. To be fair, there was....

MR. STUPICH: You weren't here, Mr. Member. I'd love to take a few minutes to talk about that, if you really want to. Would you like to know more about that, Mr. Member? I'll see if I get more reaction.

There was no direct debt on December 22, 1975. There was on March 31, 1976. Some of you will remember the famous Clarkson Gordon report when the Premier said: "I've asked Clarkson Gordon to do a complete audit of all of the government accounts and all of the Crown corporations and to bring the report in two weeks hence." If anybody knows anything about accounting — let alone auditing — to do that kind of a job in two weeks is totally ridiculous, although the Premier in the opening statement said that he had asked Clarkson Gordon to do this. It's there in the same booklet. I'm not sure if the minister has had time to read it.

He said he'd asked for an audit. Clarkson Gordon, in their opening words, said: "You have asked us to give you a nonaudited report." In effect, they went on to say: "You have asked us to add up the column of figures that you're going to supply us and to tell you what the deficit will be on March 31, 1976, if we add up the figures you give us for revenue and add up the figures you give us for expense." That's really all they were asked to do, and it's all they could do.

The government said: "These are the items on which we are going to spend money on March 31, 1976." Clarkson Gordon said: "If you do that, then the deficit will be close to the $405 million that the government did produce." That $405 million, along with the surplus of $144 million that had been left there by the NDP administration, did leave a deficit of $261 million. But how did they blow all that money? That's worth looking at too. Non-budgetary expenditures in that year, leaving out transfers to special funds — there were some — by this incoming Social Credit government in December 1975, totalled $240 million, including $181.5 million given to ICBC. I recall the minister, Pat McGeer, standing over there and saying that ICBC needed it because they didn't have money to pay wages. Do you know where the government borrowed the $400 million? They borrowed it from ICBC who, on March 31, 1976, had $700 million cash. They didn't need that $181 million from the taxpayers, but the government needed it to create a deficit.

Apart from non-budgetary expenditures, what about the $248.7 million of over expenditures, all happening in the last month, the last day of March 1976? That totals $528.8 million, and they said there was a deficit of $405 million. Without those things, most of the surplus that we left March 31, 1975, would have been there March 31, 1976 –– 1 haven't heard anything from the Minister of Forests and Lands (Hon. Mr. Parker), so I'll leave that for now.

The real figure for B.C.'s debt today is now $19.2 billion — more than $24,000 for the average family. I really feel it's necessary to say a few words about the budget record of the NDP in government from 1972 to 1975, since we hear frequent references to the mythology generated on the other side of the House, generally by people who were not here and don't have the advantage of the information.

All the information I have came from public accounts and, Mr. Speaker, you'll know that until the public accounts for the year ended March 31, 1987, public accounts have always been the truth and the word in British Columbia. There was never any suspicion in anybody's mind that public accounts represented anything other than the total truth. They were certified by the comptroller-general in earlier days — more recently by the auditor-general — and everybody accepted them as gospel.

It's only when Commissioner MacKay inquired, heard testimony and saw evidence that led him to the conclusion that the public accounts had been tampered with by the Ministry of Finance and by others that we start to wonder: can we ever in the future trust public accounts? But in the period I'm dealing with there was never any question about it. They were reliable; everybody knew that. We never had a deficit budget.

At the same time, B.C. had some of the lowest taxes in the country. Only Alberta had a lower personal income tax rate. No province had a lower income tax rate for small business; no province had a lower retail sales tax; no province charged less to license vehicles. Our government introduced a wide range of very necessary programs and services. A farm income assistance plan was set up to ensure decent incomes for B.C. farmers. The community services department was established for the first time in B.C. Community resource boards were established to give local residents a say in the delivery of health and social services. That's what decentralization used to mean.

As well, our government built up assets for the people of British Columbia. The B.C. Petroleum Corporation brought in nearly $1 billion in resource revenues from B.C. natural gas, until it was wiped out by this government.

MR. STUPICH: A little louder, please. I'd love to respond, if I can hear it.

Canadian Cellulose at a cost to the people of British Columbia of $1.... That's all it cost.

MR. STUPICH: Mr. Speaker, the member over there who likes to speak from his seat said that there was an incredible debt. Indeed, Canadian Cellulose did have a bonded indebtedness of some $70 million. We guaranteed that Canadian Cellulose would make the payments on that bonded debt, and they did make the payments every year on that bonded debt and did pay dividends every year to the people of British Columbia.

Ocean Falls, a complete town along with a pulp mill, was purchased for a cost of $789,582 — purchased at prices far below book value. Under public ownership they became money-makers and were able to save the jobs that were so important in those communities. That's why we bought it. In the short time it remained in public hands under the control of directors appointed by the NDP administration, it returned over $60 million in profits to the treasury of British Columbia.

Then it was given away by the previous Socred Premier, who established a new corporation to hold it, and if any of you have shares that you bought at $6, you know now they're worth something like 90 cents. They're not worth that, but that's what the market is today. When they were being run by directors appointed by the NDP administration, they were returning profits to the people of British Columbia every year. When they were turned over to directors appointed by the Social Credit administration, they ran those assets into the ground. It's a sorry record for the Social Credit.

Panco Poultry. The Premier talked about that one day — pinko Panco. That's a terrible story, isn't it? In order to keep that employment and to retain the production facilities — the farming, the processing and all that — we paid $4.8 million for Panco Poultry. In their first burst of privatization, the government decided to sell Panco. They sold it at what it was worth, and it was worth over $14 million just a few years later, after producing annual profits of $1.2 million for the taxpayers of British Columbia. So in total we made over $10 million on that purchase after holding it for three years. That's good business, Mr. Speaker. We bought it at a good price.

During the three years we were there, we built and paid for three new B.C. ferries. This government, again, in one of its bursts of privatization, sold those ferries to eastern financial interests. We made a deal with them. We said: you give less than we paid for them. We paid $55 million; you give us $48 million, and we'll buy them back over 18 years and pay you a total of $96 million. We'll give you twice as much as you give us, and at the end of that time, we'll negotiate with you as to how much we're going to pay to get the ferries back into ownership in British Columbia. We'll give you a better deal. It was a tax loophole, and we had to hurry to get this legislation through the House because the tax loophole might be closed by Ottawa. That's what the minister responsible at the time told us. So we got it through. Part of the deal was that, in the event that the federal government ever closed this tax loophole within the 18-year life of the agreement, the taxpayers of British Columbia would see that the people who bought our ferries didn't lose a nickel by any action on the part of the federal government to close that tax loophole. They couldn't lose, but the taxpayers of British Columbia could. That's Social Credit.

We purchased over a million shares of Westcoast Transmission for just over $25 million. In the market today, if we still had them those shares would be worth $43 million, 60 percent more than we paid, and they returned dividends to the people of British Columbia every year that we had them. They were a good investment for the people of British Columbia and an awfully poor investment for those who bought BCRIC shares.

We put real cash money into rainy day funds, totalling $201.5 million in our three years, bringing the grand total of those funds when we left office to $552 million. And as I said before, Mr. Speaker, the cash and investments were there that could be used for the purposes of those funds, so different from today. In the 1975 public accounts — the last ones tabled by the NDP — our revenue surplus was $45.1 million higher than when we assumed office in 1972, after having spent all the money we spent on behalf of the people of British Columbia.

As mayor of Vancouver, the Leader of the Opposition turned in balanced budgets every year. He balanced multimillion dollar budgets during the worst recession since the 1930s and, Mr. Speaker, he did it without any cutbacks in services and without layoffs. To this day, Vancouver still has a triple-A credit rating, one that B.C. lost when the Socred parade of deficits became the norm.

New Democrats have a sound program for their next term in government. As our leader, the first member for Vancouver Centre (Mr. Harcourt), stated in his response to the throne speech, the fundamental difference between New Democrats and this government is that we believe governments can provide public leadership in the development of our economy and our society. A New Democratic government would restore equity to the tax system. Fairness in our tax system can help restore the sense of common purpose and cooperation that is necessary to economic growth in our province. New Democrats would make sure that the wealthy and big business pay their fair share of taxes. Those who make money should always make at least a minimum contribution to the public treasury, and since Mulroney hasn't delivered on his promise for effective minimum personal and corporate income taxes, British Columbia should show leadership in this direction.

New Democrats would make sure that we get a fair return from our natural resources. New Democrats would review tax breaks to make sure we are getting good value for what is a tax expenditure. In particular, we must make sure that tax breaks to corporations are tied to job creation. New Democrats would press for changes to corporate tax laws to encourage investment in new jobs, rather than mergers and takeovers, which create no new economic activity.

New Democrats would eliminate unfair tax increases on small business. We would start by rolling back the tax increase on B.C.'s small business all the way to where it was when these fellows came into office — 8 percent. That would once again give us the lowest small business tax rate in Canada.

New Democrats would reform B.C.'s property tax system to make sure the burden is more fairly shared by those who can afford to pay.

As I near my conclusion, Mr. Speaker, I want to recall two remarks made recently by the Finance minister — remarks made in jest, but revealing remarks all the same. When asked about the discrepancies in budget proposals, the minister told reporters: "Remember, I lied to them last year. You can't put too much credence on what a politician says, you know." It's in the Times-Colonist on March 24, 1988.

When asked to explain why he was forcing the merger of two credit unions here in Victoria, the minister replied it was,"because I am autocratic, arrogant and uncooperative." That's from the Times-Colonist of March 15, 1988.

The first quotation betrays a certain affinity with the first Bennett government. The second sounds all too much like the second Bennett government. Most of all, they certainly convince me that this is just another Social Credit government. The one difference from the previous Socred governments is that we now have an overriding concern with personal moral issues and a worn-out personal agenda placed ahead of the bread-and-butter issues that are so important to the future of this province.

In a short time this government has managed to pile up quite a record, and the Premier says he has only just begun. Unfortunately for British Columbia, it's a record of increased confrontation and uncertainty, beginning with Bill 19 and Bill 20 last year, and continuing with privatizations, decentralization, and now a war of hot air with the federal government.

Last fall this government suddenly invented eight states within B.C. that have absolutely nothing to do with the traditional, economic, geographic, transportation or cultural links among the different regions and communities of our province. This government decided that these new states would form the basis of a new system of government in B.C. They appointed a minister of state for each of these new regions. They announced impressive but vague plans for the future of these states. The government mislabeled this new system of government "decentralization." I say mislabeled, because it is really a centralization of political and economic power right here in Victoria: to be more specific, in the west wing of this building in the office of the Premier.

Instead of a more democratic system of government, all that this ill-conceived plan does is encourage discord among B.C.'s regions. It nurtures unnecessary rivalry between communities for the money and the favours dispensed by the Premier through his ministers of state.

In yesterday's budget the government benches revealed a further aspect of their so-called decentralization plan. They told the people in the made-up state of Nechako and the made-up Kootenay state and several of their other made-up states around the province that not only were they now part of a new government system that ignores their elected MLAs — a system that will see the most important decisions about their new state made in secret in Victoria — but that their new state was also worth less to the government than some other states. Hence the rivalry. Yesterday the people in Fraser Lake were told that their newly created Nechako region is worth 30 percent less to this government than the Mainland-Southwest region.

Mr. Speaker, it's in the budget. Instead of a more open and democratic government as promised to British Columbians, we find evidence in this budget of the pork-barrel principles that guide this power grab by the Premier and his made-up ministers of state.

Finally, Mr. Speaker. I note we have a new vote in this budget: vote 74. This vote was formerly under the Minister of Finance, but it appears here that we have the Premier at work, undermining his ministers once again. This time we have $90 million worth of new programs under one vote — a group of programs that looks suspiciously like the Premier's pet projects. This vote will provide funding for new initiatives to strengthen the family, for science and technology and in health care and social programs.

MR. STUPICH: No. Mr. Speaker, the Minister of Finance asks: "Are we opposed?" What we are opposed to is to put them in one vote in the Premier's office, rather than these totally unrelated projects, goals and initiatives, which would be better served if undertaken by the major and appropriate ministries. That's where we have — or, at least, used to have — the talent and expertise to deal effectively and efficiently with these important initiatives. We're losing that talent; I'm not sure how much is left. But to the extent that it exists in the government service today, it exists in the major ministries — not in the Premier's office.

Mr. Speaker, we cannot support this use of public funds for the Premier's ad hoc, back-door approach to policy development and implementation. We cannot support measures which place an increasingly unfair share of tax burden upon the average British Columbia family.

In short, we cannot support this budget. Our economic future is too important. British Columbians deserve better from their government. It's time the Premier and this government started listening to what British Columbians are saying about the need for openness, honesty and fairness from their government. It's time this government put its own personal agenda on the back burner and got to work on the important bread-and-butter issues which concern British Columbians. It's time this government stopped taking British Columbia voters for granted.

MR. JANSEN: I'd like to compliment the members opposite for their very good critique of the budget, and I look forward to debate in the weeks that lie ahead. I*m sure that all of us took forward to that discussion.

Hon. Mr. Couvelier presented a message from His Honour the Lieutenant-Governor: a bill intituled Supply Act (No. 1), 1988.

HON. MR. COUVELIER: Mr. Speaker, this Supply Act is introduced in order to provide supply for the continuation of government programs until the government's estimates for 1988-89 have been debated and voted upon in this assembly. This will provide interim supply for the first three-month period of the 1988-89 fiscal year which begins in a few days. This interim supply is urgently required in order that a variety of essential payments, including the government's payroll and payments to hospitals, school districts, universities, GAIN recipients and social agencies may continue uninterrupted. Therefore, in order to maintain the uninterrupted delivery of government programs, it is essential that this supply be granted expeditiously.

Bill 20 introduced, read a first time and ordered to be committed for second reading forthwith.

HON. MR. COUVELIER: Mr. Speaker, this supply bill is in the general form of previous supply bills. The first section requests one-quarter of the tabled estimates to provide for the general programs of the government. The second section requests one-quarter of the disbursement account required for the government's fully recoverable ministry-related financing transactions which appear in schedule D in the estimates. The third section requests an amount of $21 million for the Purchasing Commission working capital account. This increase in the statutory authority reflects an increase in the delivery of goods and services provided through this account.

Finally, Mr. Speaker, I point out the requirement for early passage of the supply bill in order to provide for the ongoing expenditures of the government for the 1988-89 fiscal year.

MR. STUPICH: We understand the importance of passing the supply bill. While we have a lot of criticism of the budget — the expenditures and the revenue measures — we appreciate that when it comes to passing the supply bill, it has to be done now. We'll have the rest of the discussion when we come back. I know some of my colleagues want to make some points about some of the items in the schedule, but my recommendation to them would be that we do it in committee stage.

HON. MR. COUVELIER: With leave, I ask that the bill be referred to a Committee of the Whole House for consideration forthwith.

Bill 20, Supply Act (No. 1), 1988, read a second time and referred to a Committee of the Whole House for consideration forthwith.

MR. G. HANSON: Mr. Chairman, I don't think we can let it pass that the establishment of these ministries of state and the funding of that was not done through legislation in this House. It was done through warrants, which we are now asked to approve.

MR. CHAIRMAN: Hon. member, pardon me for interrupting, but I thought we would deal with those when we deal with the schedule. Is that satisfactory?

MR. G. HANSON: The comment should be made that this particular matter of such fundamental importance in the province of British Columbia.... For a cabinet to rearrange the structure of government of the province without recourse through this Legislature, rather than by hindsight.... Here we are just up to the end of the fiscal year in the following year, when on October 29, 1987, special warrants were presented and $1 million allocated to eight regions of the province to supersede local government, to supersede the duly elected officials who sit in this House. I think the point has got to be made that now we have that kind of travesty ruled into an interim supply bill when you are asking for provision for the next three months for a third of the budget and we have to deal with this kind of matter. It's like the slot machines. Slot machines for B.C. Ferries was in the interim supply bill, and this is of the same order. It's a slot machine government, and I oppose it most vehemently.

YEAS — 43
Brummet	Rogers	L. Hanson
Dueck	Richmond	Parker
Michael	Crandall	Rabbitt
Mercier	Veitch	Strachan
Couvelier	R. Fraser	Jansen
Gran	Chalmers	Ree
Bruce	Serwa	Vant
Campbell	Blencoe	Gabelmann
Boone	Skelly	Stupich
Rose	Marzari	G. Hanson
Cashore	Guno	Smallwood
Lovick	A. Hagen	Jones
Clark	Edwards	Miller
Messmer	Huberts	Peterson
	Jacobsen

NAYS — 1
	Kempf

MR. STUPICH: In sections 1 and 2 we're dealing with one-quarter of the budget; in section 3 I think we're dealing

with the whole amount. I don't have my estimates here, but I take it from the reading that that's the whole amount for the year rather than a quarter.

HON. MR. COUVELIER: The hon. member is correct: it applies to the whole year.

MR. CHAIRMAN: We'll deal, hon. members, with the schedule by warrant, one at a time.

MR. STUPICH: Again, Mr. Chairman, just for verification, this is money that was sent to us from the federal government. Is that correct? And we're passing it on to Frank Behan Logging?

HON. MR. PARKER: No, these are funds that are shared with the federal government. On a $31 million overall number, we are responsible for $8 million of it. So about 25 percent of it is provincial; 75 percent will be federal. And we have yet to receive the federal funds.

MS. SMALLWOOD: I'd like more specific information about what this money actually gives the loggers. This is money directed at...?

HON. MR. PARKER: Severance allowance that reflects their employment contract requirements and relocation assistance.

MS. SMALLWOOD: Has that money been provided to the workers? Have they been relocated? And how successful is the program?

HON. MR. PARKER: The money has been provided and we have a receipted payroll.

MR. MILLER: On the same matter, there was some contention in terms of people who were direct contractors in that operation on Lyell Island. There's one in particular, a scaler, who, in terms of the kind of work, was equivalent to an employee, every bit as much as somebody who was there as a faller or whatever. Yet those people find themselves out in the cold in terms of any kind of compensation.

I wonder if the minister could advise us what's happening with regard to those people who have been waiting a considerable amount of time and are now feeling a bit up in the air, not knowing really what the true picture is in terms of what's happening with regard to the proposed agreement. They're getting one story from people on the provincial side that the federal government is holding things up and getting another story on the federal side that perhaps the province is holding things up.

What can you say that I could carry back to people who are in that position — who are an integral part of that operation, and yet find themselves not knowing if they're going to even receive any compensation? They haven't even been advised whether or not they're eligible to receive any compensation.

HON. MR. PARKER: Those employees who were immediately displaced by the cessation of operations were compensated for in concurrence with their employment agreement. The contractors, including the prime contractor, Frank Behan Logging Ltd., are yet to be settled in their claims. Their claims are to be made directly to the Ministry of Environment and Parks. because the agreement is between provincial environment and federal environment ministries. All contractors, everybody else having any claim.... Those employees who were under a union agreement and were immediately displaced by the cessation of operations on Lyell Island were compensated for their severance pay and their costs of relocation. But all other contractors still have to realize their claims.

MR. MILLER: Yes, I'm aware that the direct employees received compensation. But getting back to what I think is a central point in terms of this issue, there's been a suggestion, for example, that the people I've described — who were scalers; who were an integral part; who were there purely because that logging operation was taking place — perhaps would not be entitled to compensation, and that they might be in the same category, for example, as a laundry who may have done some dry-cleaning for the company.

I think this is very fundamental to the issue of compensation. Is it the minister's view that a person like I've described, a scaler directly contracted...? Because, after all, the government sees contracting as a legitimate means of transferring employees from being direct employees but still doing the same service as a private company. Would the minister agree that the person I've described, a scaler, would be eligible for compensation?

HON. MR. PARKER: The contractors to the various licensees have their claim against the licensee. That's where their contract lies. Those licensees that are entitled to compensation for their disposition in the South Moresby issue have yet to have their matters settled so that they are in a position to settle with their contractors. But the contracts are between two parties, the contractor and the licensee, and they must settle any outstanding claims. The licensees are entitled to compensation in part by the provincial government and the federal government through the procedure I outlined earlier.

MR. MILLER: Mr. Minister, I have to pursue this, because we're now at perhaps the first opportunity to have any kind of public debate on the question. Again I have to refer back to the particular.... I haven't named the individual, and I won't, but he was a prime contractor in terms of the scaling operations or duties that he performed on Lyell Island.

Are you saying, then, that that individual, that company, has to go and fight it out with the licensee in terms of any kind of compensation? Is the government not going to play a role? The government was quite outspoken. I remember talking to the Minister of Environment and Parks (Hon. Mr. Strachan) last year in terms of that question of compensation — I believe it was during your estimates — because this was a focal point of many of the discussions.

I recall the government getting up and expressing a lot of concern about the people who were going to be displaced as a result of that agreement and how they had to fight and make sure that there was going to be compensation. Are you now

saying that the contractor I've referred to — the scaler — is simply going to have to fight it out with the licensee, that the government is not going to be there acting in the best interests of that individual? Is that the kind of setup you're contemplating?

HON. MR. PARKER: If the contractor provided a service under the terms of a contract with the licensee, then it's the licensee who's liable. It's that simple.

MR. MILLER: I'll just confirm then: the minister is saying that the government does not intend to do anything to assist the people in that position of being a contractor to the licensee, despite the statements they made across this province in terms of what they intended to do to protect people who were displaced, and that they now are not going to become involved in that process.

HON. MR. PARKER: If the contractor has a contract with the licensee and provided service under that contract, then he should be paid under the terms of that contract by the licensee. It's that straightforward.

MR. MILLER: I would direct my question to the Minister of Environment and Parks. It's really the same question: is that the Minister of Environment and Parks' understanding of how these matters are to be dealt with? Is there scope for some discussion in terms of the people involved in that former logging operation, or is this a cut-and-dried thing that you will take no part in?

HON. MR. STRACHAN: No, we are taking a very active part. I'd like to be more forthcoming at this point with respect to those further discussions, but I can't be until the agreement is signed. I can advise this committee that we are very close to signing that agreement with the federal government, which will, in fact, put in place the negotiations you're inquiring about.

What we have here, Mr. Chairman and members, is the payout to employees in the special warrant, and that's what we're discussing now. I realize that the member would like to discuss further items in the whole South Moresby agreement, but regrettably at this point I don't think we can.

However, let me finish my comments by saying that the member for Prince Rupert has used the term that the contractor has to "fight it out." I think that's putting it in a pejorative or at least a misleading — and I don't say this in any unparliamentary sense — style of language. We don't see this as a fighting-out process but, in fact, a negotiation process.

As the Minister of Forests has indicated, where you have a contract, you have a contract. Everyone knows what that contract says. That's something that if the contractor has to take it to court, he can, but we doubt it will come to that stage. The contract is simply there; it's for everyone to see. And from that contract will be fair and appropriate adjudication and settlement of the breaking of that contract because of South Moresby going to a federal park.

I don't believe we can say much more about that at this time, but I undertake to you, sit, and to members of this House, to make public all the details we can, once the final agreement is reached with the federal government — and that is to be done soon.

MR. MILLER: I don't want to take too much time of the House in this, but one final question to the Minister of Environment and Parks. It was from your office that I received the suggestion that the contractor — in this case, the scaler — could be comparable to or put into the same category as someone who may have provided dry-cleaning or laundry facilities or services to some of the people on Lyell Island. I reject that, but it came from your office. Why would that come from your office if you're saying, in effect, that it's got nothing to do with the government, that, it's a matter between contractor and licensee?

I put that question to you, and I respect what you've said so far. I would just finish it with one further question about whether people in the position I've described would be able to come to you or the Minister of Forests or both in terms of advice and assistance for settling what they feel are legitimate claims with respect to what happened on South Moresby.

HON. MR. STRACHAN: All I can respond at this point, Mr. Chairman, is that that's a fair comment by the member for Prince Rupert. I don't believe it would be appropriate for me to say much more than I have said in the previous correspondence. I will admit to the committee that I walked in here without hearing all of the debate, and I was unaware of what contractor you were speaking of. I'm sorry, but since I didn't hear all of your discussion with the Minister of Forests, I wasn't aware which contract you were speaking about.

MR. ROSE: I'm concerned that we're taking a legalistic approach to this, and I don't think that the member for Prince Rupert is really seeking that. I think he's asking both ministers to use their good offices to operate in such a way in the settlement so that there is no impediment placed between that person — in this case, a licence-holder who is settling with the province — and someone under whose contract for scaling exists.... and that this person is really left out in the cold in terms of the agreement, because he doesn't fall under the terms of those definitions. But he has a contract, which he shouldn't have to fight for, and any settlement going to the licence-holder should also include a very strong suggestion from both ministries that they will receive this compensation only if they settle their contractual obligations to the scalers or whomever else they might have some legal indebtedness to.

MR. BLENCOE: At long last the people of this province are going to have an illegal act made legitimate in the province of British Columbia. Mr. Chairman, we have waited close to six months for this government to come clean and put before this Legislature legal authority for the spending of taxpayers' moneys to the tune of $8 million. Close to six months later the law has finally caught up with this govern ment. This government has continued to abuse the traditions and the laws of the province, and there's no more blatant case than this warrant we have before us today, legitimizing an illegal act that took place nearly six months ago.

Mr. Chairman, we know why this government was prepared to violate the principles and the traditions and the law regarding special warrants and the appropriation of taxpayers' money for government purposes. The reason was that

they wanted to put in place a system that's alien to the British parliamentary system that has governed this province since Confederation. That's what they were up to, and they didn't have the decency or the understanding or the respect for the traditions of parliament to table that plan and that program before this Legislature. They had contempt for the parliament and the traditions that we've accepted in this province and this country since Confederation.

Now, Mr. Chairman, close to six months later, this government has decided that it had better follow the law in the province of British Columbia. We have already seen this government, in my estimation and I think the estimation of most British Columbians, start to spend part of the $8 million without the authority of this Legislature, for a system that is basically a blatant, flagrant attempt to grab the power of local government and to usurp the traditions of local government in areas where they have made decisions for a long, long time. That's what this $8 million is all about, and we have a continuation of that in this budget that we'll be debating in the next few days. It is a power grab; it was an $8 million operation to snoop on local government; and it wasn't legitimate because it has not been before this House. The first time we've had it is today.

I have to remind the minister — and I'm going to ask the minister some questions in a minute — that a special warrant is only for situations where expenditures are truly required, truly urgent and truly immediate. Otherwise, such authorization circumvents the normal process of this Legislature and the law.

Mr. Chairman, we've had the Premier admit some months ago, when I questioned him in this House.... Where are the plans? Where are the details? Where is the program that outlines that this $8 million is required, urgent and immediate? And what did he say? "Well, my cabinet colleagues forced it too quickly. My cabinet colleagues were at fault." He also admitted that there were no details and that, indeed,"We are groping to get this program in place." Yet on October 28 or 29, the special warrant authorizing $8 million was passed by order-in-council behind closed doors without the authority of the people of the province of British Columbia.

We've had an admission of guilt by this Premier, and in the last month we've had at least one minister of state, the minister for the Vancouver Island state, admit that he has spent only $100,000 of his $1 million. Where was the urgency? Where was the immediate requirement for $1 million, and what has happened to the other $900,000?

This government, I believe, in a cold, calculating way went around the Financial Administration Act, an act that was reviewed in 1981 specifically to deal with this kind of going around the Legislature and the law. The task force said in 1981 that the people are entitled to a proper and legal appropriation through this Legislature. That was the reason for the 1981 task force and the review and the changes in the Financial Administration Act. Yet in October of last year, only a matter of days before this Legislature was to come back into session, this government — by an order-in-council special warrant — authorized $8 million of taxpayers' money to fund the united states of the province of British Columbia. Ever since, loyal Canadians and British Columbians have been offended not only by the process but by the fact that we could have a state system, a system alien to our way of governing ourselves in the province, a system that we have supported and fought for since this country was founded.

Today, close to six months later, this government realizes the law has caught up with them. Even this government has had to come to this Legislature and say to the people of the province of British Columbia: "Nearly five months ago we did an illegal act; we didn't get the proper authorization." We know very well why the Premier and his advisers — David Poole et al. — have decided that they have a different scheme and a different way to govern. They have a different view of our parliamentary system and our Confederation, and in my estimation they have an offensive way of looking at how they are going to govern in the next few years. Remember, it was this Premier — I don't know where he is today — who said the British parliamentary system is antiquated. That's why this $8 million, this glorious slush fund for Socred objectives in the regions, was passed without authorization, without legal authority, not before this Legislature, so that this government and this Premier could start to control the agenda and direction of local government in the regions and usurp the traditional role of local government that we've accepted since Confederation.

It was an offence, an affront to parliament. And today it's being compounded by putting it through at the last minute in this bill, to legitimize what this minister, this government and this Premier said they were prepared to do to the people of British Columbia: usurp the laws of this province for their own political agenda. It's quite clear that's their objective.

We've seen it in this budget. We've got another big slush fund, a rainy day fund, another $450 million that's not there. We know their objectives. We've got $90 million in the Premier's back pocket for his own pet projects that there will be hardly any accountability for. The Premier's centralization program continues. The laws of this province and the rights and privileges of this Legislature continue to be violated. We won't accept it. The people of this great province deserve better, as my colleague for Nanaimo said in the conclusion of his speech. They deserve respect for the law, they deserve respect for the legislature.

Never again should a special warrant.... It clearly was not an emergency. The Premier has admitted there was no emergency. The minister, the governor for Vancouver Island, has said he's only spent $100,000. 1 even have the minister himself, in a memo to me of January 15 of this year, saying that only so much money has been spent. Then he goes on to tell me in his memo that I'll be able to find out the details in Public Accounts in a year or two from now. He even admitted blatantly in his memo to me that we won't have the details of the spending before this Legislature; we're going to have to wait for Public Accounts in the years ahead. This government does not want us to uncover what they are going to do with that $8 million — and now the Premier's $90 million, and the other money that's going to go to decentralization and slush funds. They want us to find out in a year or two from now, either just prior to the election or after the election, what they've been doing with taxpayers' money and political patronage funds that are a gross offence to this Legislature.

The people of British Columbia are tired of that blatant political abuse of our parliamentary system. They want decency, honesty and integrity back in the province of British Columbia, and they are demanding it from their government.

Yet we have in the budget a further admission that they are going to continue with this slush fund patronage system that

has, I'm afraid, been in this province under Socred administrations for so many years — smoke and mirrors, Coquihalla coverups, abuse after abuse after abuse.

At long last, in this case, the people of British Columbia are going to have the law obeyed today — five months later. That does not prove your innocence in terms of what you did close to six months ago. What this minister did and what this government did was blatantly wrong. And now we know that money is being used out there by unelected committees of the ministers of state, with no checks and balances on the use of those funds by this Legislature for the people of British Columbia — no watching. We have eight millionaires with a million dollars each in their back pocket, running around in their regions — as it says: "....some ministers of state to fund organizations that can't get money through regular channels." What does that tell you, Mr. Minister? What does that tell us you're up to?

I've got a question for the Minister of Finance. Can the Minister of Finance confirm today that he has reviewed the procedures and practices re special warrants?

HON. MR. COUVELIER: That previous speaker was so outrageous he even drove his own party members out of the Legislature, let alone all of mine. I've never heard such unmitigated claptrap in all my life. Let's talk about the principles of parliamentary tradition. Let's talk about how special warrants have been utilized from this government, our previous governments from the Social Credit ranks, and that glorious institution that the province had the misfortune to be governed by during the early seventies — the official opposition.

Let me put on the record, once more, for the edification of this hon. member, the sad record of the abuse of the special warrant system by this very party who sits across there holier than thou trying to create the impression for those poor innocents here having to listen to this garbage that somehow they have been pure and have not utilized this system in a way that is ten times worse than the record of any Social Credit government in the history of this province.

Listen closely, hon. members — two from Victoria, both of them off on this subject this morning in an abundance of ignorance, not knowing the history on this question of utilization of special warrants. I invite both hon. members to listen closely.

In the first session of the thirtieth parliament, let me remind the member that four special warrants were issued by the party in power at the time — I'll leave them unnamed — the week prior to the opening of the Legislature. Let me tell the hon. member that on the second session of that same parliament this same group of bandits put in 19 special warrants and, would you believe it, 18 of them were introduced one day prior to the opening day. And he's got the unmitigated gall to stand up here in some sanctimonious, holier-than-thou argument and try to make us feel guilty about the fact that this session we've introduced 11 special warrants, all long before the House opened.

Let me remind the member that in the first sitting of the fourth session, during that brief, heady period of glory that the members of the opposition managed to embrace at the moment, they issued 40 special warrants,17 of them approved on the day the sitting began, for crying out loud. This member went on for 15 minutes telling us how terrible the use of special warrants is. My goodness, the record of this Social Credit government and previous Social Credit governments has been far better in terms of the number of special warrants used and in the timing in terms of their introduction and implementation.

I could go on — well, maybe I should, just to get it on the record. I mentioned that in the first sitting 40 special warrants were called by this group. In the third session 10 of them were introduced and in the fourth session 19 of them introduced. That's now on the record. So the next time you innocents choose to bring up this subject and try to characterize us as abusing the system, just read Hansard, please.

The hon. member said that the Premier of the province said cabinet members were at fault in terms of the implementation.

HON. MR. COUVELIER: If you read the record tomorrow, you'll see that those are your words, hon. member. I tell you, I am reasonably close to the Premier of this province and I've read his utterances on this subject, and he certainly has not used that phrase. The fact of the matter is that this government, having decided that the way to economic recovery in this province was to do it at the grass roots local level, decided we would put our money where our mouth is and make sure it was able to get implemented as quickly as each region wanted to get it implemented. It was because of that that we set aside $1 million in each region — if, as and when it might be needed by those regional ministers of state.

I can tell the hon. member it's far too soon yet — the year isn't yet over — for us to know exactly how much of this $8 million will be drawn down by the ministers of state. I can tell the hon. member that that will vary by region depending on the needs of the region. Obviously the minister of state in charge of Nechako and his parliamentary secretary have a far greater burden of traveling and that kind of expense to absorb. So there will be a varying degree of drawdown of that $1 million fund. I am not able to advise the House today how much that total will be, the year not yet being over. I can tell the hon. member that as of this date, we estimate that about $800,000 of the $8 million has been drawn down. But I suspect that by the time all of the travel expenses are checked and verified and vetted and approved, to verify accuracy and competency, the figure will be substantially more than that. But at the moment, we have only consumed 10 percent of this $8 million, and I think that indicates two things: (a) we are not a spendthrift government, and (b) we are doing our job quietly, diligently, and with due attention to the proprieties of the operations of this House.

MR. STUPICH: I had no intention of getting into this debate, but the minister provoked me successfully.

Special warrants are supposed to be used for urgent and unexpected expenditures. The minister has admitted, in asking for special warrants of $8 million for these purposes and using to date only 10 percent of that amount, that they didn't have any idea at all what they were asking the special warrants for, what they were going to cover. It was a total misuse of the special warrant.

The minister gave figures as to the number of special warrants and when the NDP administration brought some of these in. Mr. Chairman, that's only part of the story. The minister well knows — he just didn't bother mentioning it — that special warrants are used for many purposes other than

approving the spending of money. Even individuals are appointed by special warrant in some instances. Changes in categories are done by special warrants. If you wanted to close a road or open a road or move a lane, it used to have to be done by special warrants when we were there.

MR. STUPICH: Mr. Chairman, the minister asked why we used them so much more than they did. Because we inherited a legal system which required special warrants. We were working on it; we were cleaning them up. But the laws of the day, when we arrived in office on September 15, 1972, required special warrants to be used for so many purposes, because the Premier, W.A.C. Bennett, had wanted to make sure that he had his finger on every pulse in the province of British Columbia, and he had wanted it all to come into cabinet. We were changing that. To give the previous government some credit, they did change the laws so that it wasn't necessary to clutter up cabinet meetings with so many orders in-council.

MR. STUPICH: The minister asked why we used them more, and I'm telling him why: because we inherited that system. We were working on it, and it took some time. They've had 12 years to do a better job than we could do in three years, and they're working hard to try to catch up.

Mr. Chairman, let's look at the figures. In the first period, the period from September 15, 1972, to March 31, 1973, our special warrants totalled $57 million. That's over a period of six months — $9 million a month. I ask this government to put on the line its totals, its dollar figures, and compare them with ours. In our first full year in office our special warrants totalled $91 million, $7.5 million a month. In our second full year in office, $135 million, for a total of about $13 million a month. In the last nine months during which we were in office, our special warrants totalled $84 million. That's a pretty good record. We were careful with the taxpayers' money. As I pointed out at some length in my response to the budget, we looked after the taxpayers. We invested the money in good assets. We didn't squander it on such things as Coquihalla overruns or ALRT overruns or....

MR. STUPICH: Mr. Chairman, the minister responds from his seat by saying: "What about Levi's overrun of $100 million on social welfare?" Okay, what was it? We introduced new programs after the budget had been prepared, and these programs were discussed in the Legislature, but the funding for them was not part of the budget. It had to be provided separately, and it was indeed, later on. But the error came up before the funding was provided for. That's part of it.

1 ask the minister: what about the $250 million overrun that the Minister of Social Services had in the 1983-84 fiscal year? What was it? A $250 million overrun because they underestimated the cost of providing support for people on welfare. They had wrecked the economy to such an extent that there were just that many people receiving the social assistance allowances, and there was an overrun of $250 million. When did you hear him talk about that? It was two and a half times our overrun, and our overrun came from bringing in new programs that were discussed in the Legislature; yours came from an attempt to fudge the budget because you were going into an election campaign and you wanted to come up with a balanced budget — and you did. The budget said it was balanced, but the actual results when we got them showed a deficit that year of $1.6 billion.

HON. MR. COUVELIER: It seems that the hon. members continue to want to put their foot in it. So let me put more information on the record, Mr. Chairman. I neglected to mention the number of warrants passed by this group of sanctimonious white-garbed socialists. In 1972 the Social Credit government passed 53 warrants; in 1973 the government led by these white-robed individuals passed 76 special warrants; the next year,122; then the year after that, 116 special warrants, my friends.

Sanity was returned to the province and Social Credit once more reasserted its natural right and assumed leadership, and that year there were 28 special warrants; in 1977,12; this year, my friends. 11 — for all of the column inches we've got in Hansard on this subject, this year 11 special warrants. You guys passed 122 of them in 1974.

HON. MR. COUVELIER: It's obvious that it's tens of millions of dollars. If you want me to spend valuable staff time researching that irrelevant piece of information, I'll be happy to do it.

MR. STUPICH: Mr. Chairman, I ask the minister: how much did the valuable staff time cost to produce the garbage that he's throwing out now?

HON. MR. COUVELIER: Facts. Like that Detective Webb says, "Just give me the facts," and that's what I'm providing. I can defend every one of those statements I made. I'll be happy to go outside and repeat them. After some of these outrageous comments I've heard this morning, I defy the hon. members to do likewise.

MR. STUPICH: Mr. Chairman, I won't deny that. That's the truth, but not the whole truth.

MR. BLENCOE: Clearly the minister's not prepared to give us the real facts. He has admitted that they didn't know what they were spending the money for on this special warrant. He has admitted that the details were not there. He's admitted today that only so much money has been spent. And he has not given the evidence, when he attacks us for special warrants, that the money we passed for special warrants was immediate and the programs were in place and the money was to be spent. This minister and this government have admitted that that $8 million today still isn't required, and yet he hasn't given the evidence to show that the warrants that he numbers — without the facts behind it — that we passed when we were in government.... I wasn't there, I have to say, but where's the evidence to show that it's the same as we got today — $8 million, and you've only spent one-eighth of it, six months later, just about.

We don't have the details, and you know it's different — through you, Mr. Chairman. You know that in 1981, because the former Social Credit administration, as my good colleague from Nanaimo indicated, had used this system and had got all sorts of ways to use special warrants — funny ways — the task force came in, supported by all sides of this Legislature and by the New Democratic Party, and that we supported a decent Financial Administration Act. We supported that, but yet this government continues to abuse what that task force recommended and what the act says today — legitimate spending of money, an emergency. We haven't had that evidence.

I ask the minister again: did he secure a legal opinion with respect to special warrants?

HON. MR. COUVELIER: Mr. Chairman, I'm delighted to inform the hon. member that we are blessed in the public service of this province with thousands of dedicated individuals who are competent, know what they are doing and are valuable advisers to whoever happens to be in government for the moment. It's true — it is an unfortunate truth — that the Social Credit Party have held government in this province for 33 out of the last 37 years, and as a consequence of that, we have acquired some competency ourselves among our own ranks. Notwithstanding that, we put great value upon the contribution and counsel and guidance supplied by our excellent staff. Let me introduce the hon. member to one of those today who is beside me on the floor of the House, Mr. Jim Crone, who is a very valuable member of our Treasury Board staff.

I can assure the hon. member that the procedures used and the practices followed are thoroughly within the proprieties of the system, and the last thing this government would countenance doing would be to violate that long-held tradition.

MR. BLENCOE: I repeat my question to the Minister of Finance: did he secure, specifically for special warrants, a legal opinion? Answer yes or no.

HON. MR. COUVELIER: Mr. Chairman, I am delighted to have the opportunity to once again inform the member that we have many capable members on staff. Not a few of them have legal training, so we are benefiting from this valuable advice. We have done so in the past; we will continue doing so in the future. I am very comfortable with the fact that, as I said earlier, the process used here was entirely appropriate. I am very comfortable with what we've done and what we will do.

The initiative surrounding this regional funding issue which we're dealing with now will, in the fullness of time, be evident to all British Columbians as to its merit. For the hon. member to suggest — to even hint — that there is anything to be concerned about in a legalistic sense is the most outrageous red herring among many red herrings that have been dragged across this beautiful red carpet this morning.

MR. BLENCOE: A specific question: has the minister in his hands a specific legal document giving him advice on the status of special warrants? Does he have that document?

HON. MR. COUVELIER: Unlike the hon. member, I have many typed documents here. One of them deals with the use of special warrants by our predecessors. In case anyone didn't hear me, I could go through that again.

I can assure the hon. member that there are all kinds of factual data surrounding this issue. We have followed the proprieties in every case, and I have no hesitancy whatsoever in informing this House that there is nothing inappropriate, improper or devious about the special warrant used to ensure that the regional initiative got off to a good jumpstart and allowed the ministers of state access to any funding they might need to get started quickly.

MR. BLENCOE: Will the minister confirm that he sought legal opinion about the status of special warrants and, if he did not, could he tell us why the wording of special warrants has changed since the $8 million warrant was passed in October? Whereas, for instance, the warrant that passed the $8 million stated, "...of the Financial Administration Act", now we have warrants that go.... For instance, I have a February 11, 1987 warrant. It says:

"Whereas vote 71, ministry operations in the estimates for the fiscal year...provided the sum of $17 million; and whereas there is insufficient money available in vote 71...and whereas the additional expenditures were insufficiently provided for by the Legislature; and whereas the Minister of Tourism, Recreation and Culture reports that the appropriation for the expenditure is insufficient and the necessity for the expenditure is urgently and immediately required for the public good; and whereas the Treasury Board" — Treasury Board; that doesn't appear — "has recommended a special warrant under section 21(l) of the Financial Administration Act; now therefore it is ordered that a special warrant be prepared for the signature...."

Can the minister, in light of my questions about a legal opinion, tell us why the wording for special warrants has dramatically changed since October of last year, if they don't know that they broke the law in terms of special warrants and the Financial Administration Act?

HON. MR. COUVELIER: The paranoia exhibited by the tenor of the hon. member's questions is rampant. I have some trouble understanding why he is so exercised by such a relatively simple matter. Had the hon. member arrived to work a little earlier this morning, he might have picked up the phone and got the answer to his question by phoning any one of the excellent people we have in the public service in Victoria.

The answer clearly and simply is, hon. member, that each special warrant has about it unique characteristics and, as a consequence, requires different wording in order to fit within the various parameters of the act.

May I also remind the hon. member that these special warrants are signed by legislative counsel. Legislative counsel are normally barristers or solicitors. So to your myopic attention to the question of legality, may I just remind the hon. member that the signatures of loyal public servants are appended to these documents.

The hon. member referred to a February order-in-council, and as usual he has tripped forward into issue No. 11. We'll get there, Mr. Chairman. At the moment we're dealing with issue No. 2, which has to do with special warrants dated October 29.

MR. BLENCOE: Can the minister share with this House the advice he received ... ? I believe he does have a legal opinion, even if he won't answer yes or no to this House, which again is part of the devious nature of this government. Will he share with us the advice he got from either lawyers or staff about special warrants and their utilization?

HON. MR. COUVELIER: I repeat again, the civil servant whose signature is on the bottom of the special warrant is a member of the legislative counsel staff. He or she is a lawyer and trained in the legal sense, so as I said earlier, that issue has been addressed. I don't know how many times I have to stand to repeat it before the wax falls out of the hon. member's ears so that he can hear it. The fact that there are different wordings and different presentation styles on the special warrants is, as I said earlier, a consequence of what is perceived to be a legal requirement in the minds of these thousands of dedicated, loyal public servants who happen to be advising this government here in Victoria.

MR. BLENCOE: Is the minister saying that the change in wording on the special warrants currently before us is not the result of either the legal opinion or the staff input he has had subsequent to the October 28 special warrant?

The member seems to be suspicious about the different form of the various orders-in-council. For the third time this morning, I think, I'll repeat that this is necessary, in the opinion of our legal department, in order to ensure that the legalities are followed appropriately for every different type of special warrant. The hon. member, if he was listening to the finance critic for the opposition earlier, would have heard — and would understand — that there are different reasons for special warrants. Each different reason often requires a different form. That's the answer, and if you had cared to look through the records a little more diligently, you would have determined that for yourself.

MR. BLENCOE: The minister is admitting that there have been some changes, but he's trying to say that it's because there may be some minor variations ministry to ministry when they use a special warrant. Yet the evidence is contrary. When they pass a special warrant.... Regular language is the language required in the warrant for these ministers of state, and now when they pass a special warrant for ministry operations, the wording is quite different. I contend that this minister has had a legal opinion and does know that the way they authorized that $8 million in October violated the Financial Administration Act, but he's not prepared to come clean in this Legislature and tell the people that they abused the Financial Administration Act.

I ask again: will he table in this House the legal opinion he acquired that led to changes in wording of the special warrants and, I hope, changes in the way this government uses special warrants?

MR. CHAIRMAN: Just before the second member for Victoria speaks this time, I would like to suggest to him that he's usually very, very careful in these matters, but he's skating very close to the edge of being unparliamentary in some of his comments.

MR. BLENCOE: The government wants to get off this as quickly as possible because this has been a real embarrassment to them, and it continues to be an embarrassment. We're obviously not going to get the answers. This government knows that it abused the Financial Administration Act. The minister has admitted that there was no need for the $8 million. The Premier has admitted that. He's tried to use numbers from a former administration about the number of special warrants granted. We happen to feel that $8 million, or any amount of money, should be passed through this Legislature and done through the financial administration laws of this Legislature. We will always contend that, and we will continue to speak up for that.

YEAS — 25
Brummet	Rogers	L. Hanson
Dueck	Richmond	Parker
Michael	Rabbitt	Mercier
Veitch	Strachan	Couvelier
R. Fraser	Jansen	Gran
Chalmers	Ree	Bruce
Serwa	Vant	Campbell
Peterson	Huberts	Messmer
	Jacobsen

NAYS — 13
G. Hanson	Marzari	Rose
Stupich	Skelly	Boone
Gabelmann	Blencoe	Guno
Lovick	Miller	Clark
	Kempf

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

Bill 20, Supply Act (No. 1), 1988, reported complete without amendment, read a third time and passed.

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

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

HON. MR. STRACHAN: We are going to be adjourning for a week now for the spring break, and I'd like to take this opportunity to wish all members of the assembly a very good spring break. It's nice to have a House Leader with school age kids.

I therefore move that the House at its rising do stand adjourned until 10 a.m., April 5.

MR. ROSE: I return the compliment. The House Leader mentioned that he has school-age children. I have school-age grandchildren, but that happened because I got married while I was in elementary school. I wish him and his — I was going to say "henchmen" — brethren, his colleagues, his co-conspirators, a jolly spring break as well.

1988 Legislative Session: 2nd Session, 34th Parliament
HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of
DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, MARCH 25, 1988
Morning Sitting

CONTENTS

1988 Legislative Session: 2nd Session, 34th Parliament HANSARD

The following electronic version is for informational purposes only. The printed version remains the official version.