[ Page 3645 ]
Routine Proceedings
Budget Debate
Mr. Jansen –– 3645
Mr. Clark –– 3647
Hon. Mr. Savage –– 3650
Mr. Jones –– 3652
Mr. Chalmers –– 3655
The House met at 10:02 a.m.
Prayers.
Orders of the Day
HON. MR. STRACHAN: Mr. Speaker, adjourned debate on the motion that Mr. Speaker do now leave the chair.
Budget Debate
(continued)
MR. JANSEN: I'm pleased to rise in the House this morning to add my support to the support of a vast majority of British Columbians to the 1988-89 budget of the province of British Columbia. As I do that I note, Mr. Speaker, that today when we commence this debate of this good-news facilitator, we do this on the first few days of spring, a time when we traditionally set our clocks forward to appreciate more effectively the sunshine our wonderful province has to offer.
Yet listening to and reading the comments of our hon. members opposite, particularly the first member for Nanaimo (Mr. Stupich), I note that he has continued the traditional socialist outlook of turning the clock backwards, trying to find reasons for the negativism of his colleagues and himself, and relying on less substantial information to do so. It is this, coupled with the very obvious absence of specific alternative suggestions from that side of the House, that gives rise to my comments today.
I have had the honour to serve this House for a relatively short period of time. However, prior to that time I had the privilege to practise my profession in the funding and accounting environment for some 13 years. Yet I am challenged to the extreme to understand the support the members opposite give to the willy-nilly financial indirection of their party and the incredibly poor track record of their government during their fiscal stewardship.
I can only conclude that this illogical support bears out a recently released report which found that less than 10 percent of the general adult population has enough knowledge and training to understand the typical annual report, and that to most people financial reports are truly just words and numbers. Add to that the apparent desire of those members opposite to interpret the reports to say what they want them to say, and we receive a truly distorted picture.
In fact, they became so desperate in their attempt to show financial accountability that they took credit for a balanced city of Vancouver budget –– I, along with every member of this House, like to take credit where credit is due, but taking credit for a balanced budget that is required by law to be balanced — that really takes the cake. In the words of a famous historian: "Give me a break!"
It is this illogical reasoning I wish to respond to this morning and portray this budget, as it has been described by the Globe and Mail newspaper, as one showing unusual leadership in financial management: "This is good public management in the west, which has a lot to teach the rest of Canada about financial prudence."
The first member for Nanaimo spoke at length in criticism of the budget stabilization reserve, a fund that has been praised by such as Richard Allan of the B.C. Central Credit Union, who is the chief economist, and who stated that this fund would enable the government "to move away from an annually balanced budget to a cyclically balanced budget, which is far more economically justifiable and far more fiscally responsible."
The establishment of this fund recognizes the importance of treating extraordinary revenue and expenditure occurrences through a special reserve provision. This is not an uncommon practice and is indeed referenced by the famous Clarkson Gordon report back in 1975. It is this type of fiscal management that enables a balanced program delivery from year to year. I regret that our opposition members either do not understand it or do not wish to understand it.
Mr. Speaker, it is interesting to note the references made to the Clarkson Gordon report by the first member for Nanaimo. At first he went out of his way to explain the difference between an audit and a non-audit engagement, as though this firm of accountants would have some difficulty in understanding their terms of reference. I am sure that this very fine firm of accountants understood their mandate; this House understood that, and the people of British Columbia understood that.
What is more interesting, however, was his explanation of the deficit created by his government in 1975, specifically regarding the funding required for ICBC. His comments in Hansard were: "They didn't need that $181 million from the taxpayers, but the government needed it to create a deficit." Reason escapes me to understand that statement: "...the government needed it to create a deficit." Can you believe that? Can the people of this province understand that statement, particularly in light of the report from Clarkson Gordon which indicated clearly an operating loss of some $175 million? "But the government needed it to create a deficit?" Do deficits mean a different thing to the socialists than what they mean to our government, our business community and the people of British Columbia? One wonders.
Mr. Speaker, while I dislike referring to the past, I wish to comment on what the first member for Nanaimo said about his government and party's airy-fairy schemes of budgeting — if I recall, much to the applause of his colleagues. One can only presume that they too share the illogicality and the philosophies of that fiscal irresponsibility. A great deal of self-praise was touted about the purchase of business entities. Everyone knows that governments do not have any money, but are simply stewards and trustees of taxpayers' dollars. Why then would a government take those taxpayers' dollars to purchase a business entity which would then compete against those very same taxpayers?
Reference was made specifically to Ocean Falls Corporation. The first member for Nanaimo is quoted in Hansard as saying: "Under public ownership they became moneymakers...." Strange. This almost suggests that unless you're owned by the government, you don't make money. If we followed the fiscal policy of the New Democrats, we would all be owned by the government.
But let me deal for a moment with the words "they became money-makers," The Clarkson Gordon report says the following in reference to Ocean Falls Corporation: "The estimated operating loss for the year ended December 31, 1975, amounted to $310,000. The company owes $5 million to the province on which there is interest accrued but not paid, and has a bank loan of $1.7 million as at December 31, 1975." If that is making money, then all the members opposite must be millionaires.
Having not done enough damage to his credibility, he went on to say that his party's government left a surplus of
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some $45 million higher than when they came to office. However, Clarkson Gordon estimated the deficit that same year to be $541 million. I know accounting is an art and not a science, but I think the member opposite has a loose grip on his paintbrush.
Enough said in response to yesterday. Let's talk about today and tomorrow, because that truly is the focus of our government. Our government has today in this document provided the initiatives and the fiscal framework for a better tomorrow. This budget, while continuing the fairness in the burden of taxation, provides a strengthened social program for the people we serve, all of the people of British Columbia. We don't seek inspiration in the events of the past, as the socialists do. We take comfort in the facts of today, the faith in tomorrow and the responsibility we as government have in that support.
Let's take a look at those facts. Seventy-five thousand more British Columbians are working in February 1988 than a year ago, exceeding the growth rate of Canada and even Ontario. Value of shipments for all manufacturing industries in B.C. rose by 11.5 percent in 1987 over 1986. The forest industry has enjoyed the best year ever. Housing starts are up 40 percent. Companies incorporating in B.C. from other provinces are up 17.5 percent. Population through net migration from other points in Canada increased by over 30,000 people.
[10:15]
Against this backdrop of positive economic indicators, through this budget our government has provided a means to strengthen the social fabric of our society and provided the basis for continued investment optimism. This was done by increasing opportunities in many areas, not by taking away from other programs but through relying on the growth that our fiscal management encouraged.
Initiatives such as reducing our small business income tax to 9 percent, among the lowest in the country, emphasize our support for this very key element in our economy and strengthens our competitive position to attract investors. This favourable tax structure not only for the small business sector but also for the corporate and personal sectors, coupled with a strong incentive program, will ensure a continuation of the positive growth we have enjoyed in the past year.
I am particularly pleased by the substantial funding increases our government has provided in health and education. I note with pleasure the more than 10 percent increase in the Ministry of Health's budget to enable continued improvement of what is now already the best health care system in the world.
My constituency is particularly pleased with the emphasis this service has received, in light of our needs and given our community profile. With a significant number of seniors in our community, I find it particularly encouraging to see the development of an integrated, community-based system for the delivery of health services.
I am also pleased to see the significant increase in funding that makes possible an expanded alcohol and drug education, prevention and treatment program. As the liquor policy review traveled throughout British Columbia, we heard of the need for such a program. I am pleased to see that we have today, with this budget, implemented the recommendations of that report relating to this very important social responsibility. While revenues for alcohol are in the order of $450 million, it has been estimated that the cost to society is in the order of $1.5 billion to $2 billion. While these revenues and the increases provided for in the budget address in part the significant cost to British Columbians, it is essential that server-training, treatment-facility and public-awareness programs be enhanced.
In keeping with our philosophy of supporting our most valuable resource, our youth, I am pleased indeed to see the substantial increases for the Ministries of Education and Advanced Education and Job Training — an increase of some $200 million, or 7.6 percent.
Of particular interest to students in our area will be the 123 percent increase in student assistance. This, together with the Passport to Education initiative, will provide significant opportunity for those students seeking post-secondary education.
I am also pleased to see the funding provisions of the commitment made to the independent school system in British Columbia, a commitment that was made in previous years. I know that in spite of opposition from the members across the floor, the independent school system has a very significant role to play in our education system.
Because of the importance of tourism to our local economy, my constituency will benefit significantly from the change in assessment for property taxation, which will enable a deduction of $150,000 from assessed value. Tourist facilities in British Columbia are vital to our strengthening economy. Through this initiative our government recognizes that importance and enables the burden of year-round taxation to be lightened.
My constituency is also pleased to see the continuing support our government has for agriculture, because agriculture is the bread and butter force in providing a stable growth potential in our communities. In spite of reducing demands through stabilization programs as a result of favourable pricing, our Agriculture ministry has had its budget increased by 16.9 percent.
I also note the continuing importance our government places on highways construction and maintenance, and I look forward to continued upgrading of our major routes throughout British Columbia. It is particularly important that the portion of Highway 1 through the Fraser Valley be upgraded to full freeway status as soon as possible to improve safety and access.
I am pleased to see the continuing support of a key element of our economy — our forests. A crucial part of our commitment to that resource is our silviculture program, which we have indicated will increase not by a nominal percentage but fivefold. This year alone our Minister of Forests and Lands will spend more than $210 million for silviculture. Together with our enhanced small business and forest enterprise program and our contribution to forest research at UBC through Forintek, this makes a clear statement of our support for this vital component and ever-growing economy.
Members opposite have been loud in their criticism of our regional initiatives. They have through their non-support sent a clear message: they are not going to be part of a process that capitalizes on the economic growth potential of each region. They do not wish to be part of the process that will assist the economic growth of our regions, and through that growth, jobs for unemployed. They do not, regrettably, wish to be part of the solution. But let me tell you, Mr. Speaker, that as we travel the regions to meet with our local governments, our chambers of commerce, our school boards, our hospital boards and our regional governments, the message is very
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clear: they appreciate the initiative from this government to provide as much assistance as possible to realize the economic and social objectives that those communities have identified. I find it regrettable indeed that politics from socialists precludes an interest in the bottom line for our province, employment opportunities.
This government is proud of its accomplishment and its objectives, and takes pride in knowing that we will not create a millstone of debt that will destroy the future for our children. Our fiscal policies of the elimination of the current deficit, the reduction of accumulated debt and the stabilization of revenue, together with our long-term planning process, will ensure continued confidence in achieving an economy of continued growth and providing a balanced social program, a program that stays within the reach of our purchasing power. I support this budget because, together with our colleagues, we believe in British Columbia.
MR. CLARK: I'm delighted to have the opportunity to oppose this regressive, unfair and in many ways cruel budget. The budget really is the government's opportunity to affect the direction of the province. It sketches out the government's agenda. It's their chance to put financial reality behind their agenda for British Columbia. From the budget, we should see how the government intends to improve life for British Columbians, how they intend to make things better for the average family in British Columbia. Surely that's the goal of government: to move ahead, to constantly be improving the quality of life of British Columbians.
Unfortunately, in this budget we see that the government intends to help very few people — in fact, I would say, a privileged few. We see very little for average British Columbia families.
MR. R. FRASER: What about the kids at school?
MR. CLARK: To the first member for Vancouver South, I think of some people I've met over the last year, and I try to see how this budget helps them –– I think of a woman I met in Penticton. She's 59 years of age, working as a homemaker for slightly above minimum wage, literally struggling to put food on the table and to pay the rent. I asked myself: how does this budget help that woman — that widow — make ends meet? Mr. Speaker, it doesn't help her at all. In fact, there's nothing in the budget for her. But it's worse than that, for this budget actually hurts.
The huge increase in medical premiums — almost 40 percent — hurts. It is money out of her pocket. It means in her case, literally, less money for food. I don't say that lightly. For someone struggling to survive, as does this woman in Penticton, this budget actually hurts, because the medical premium paid by her is exactly the same as that paid by the wealthy in British Columbia. In that sense, it's the most regressive form of taxation.
I think of the young, single Vietnamese woman in my riding whom I met when I was canvassing. She has two young children. She has a big, industrial sewing machine in her living room on which she sews caps, for which she receives 50 cents. That's her livelihood — a woman struggling to survive in a new country, a country she has chosen. How does this budget help her survive? It doesn't. There's nothing in the budget for that woman. It doesn't help her get a real job that pays a decent income. There's no increased funding for English-as-a-second-language training for adults that she so desperately wants. There's no increased funding for English as a second language in the education system for her two children.
She's struggling to survive on an industrial sewing machine, in a very small rented house in east Vancouver, in a foreign country, with a foreign language, with real problems. This budget does not do anything to help her. But worse than that, once again, this budget makes her poorer. A wide assortment of user fees.... An increase in bus fares is coming, as we know — probably Thursday night. And again, the cruel increase in medical premiums. For her family now, $700 a year is paid in fees for medical premiums. Where should this woman get the money to pay for these new and onerous taxes? That's $700 in user fees for medical premiums — only three provinces in Canada charge medical premiums — and these are one of the highest in Canada. This budget does nothing to help that woman.
I think of some other people: young people I've met over the last year who are out of work: thousands of young men and women who have gone sometimes several years without work; a lost generation, really, of British Columbians to productive work. Those people desperately want work, and they want to contribute to society. What does this government say to them? What does the budget mean for young people who are out of work? It says absolutely nothing. But again, it's worse than that, because on top of the fees that those young people who have been out of work for several years have to pay.... They too have to pay the medical premium fee increase, just as well as the rich people; as a matter of fact, exactly the same as those better off.
[10:30]
What does the budget say about unemployment? The budget actually brags that unemployment has dropped to 10 percent –– 14 percent for young people. Is that what we've come to in this rich province of ours — an implicit acceptance of one in ten people out of work? It's absolutely outrageous that for those thousands of young people in this province who are doomed to unemployment, this budget does nothing to help. In some regions like Kamloops and the West Kootenays, the official unemployment rate still stands at over 20 percent, and among young people it's closer to 30 percent. And this government has the audacity in the budget to claim that things are looking up in British Columbia, that we're doing better, that one in ten people in British Columbia out of work and two in ten young people out of work are fine.
But aside from being silent once again, the budget hurts because those user fees are across the board. The unemployed young person in Vancouver East pays exactly the same medical premium that an affluent businessman pays. It is absolutely outrageous.
In that light, I would like to talk a little bit about tax fairness, We've seen how the budget does not help the 59 year-old widow in Penticton that I talked about, and we've seen how the budget does not help the young Vietnamese woman in my riding struggling to get by, working at piecework with an industrial sewing machine in her living room. We've seen that the budget doesn't help young people who are out of work, and we know it doesn't help older workers who have been thrown out of work because of technological change. The government is, in fact, proud of this 10 percent unemployment rate.
But what does it do? If the budget doesn't help those people, and if the government isn't prepared to put money behind programs to help those people, who does the budget
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help? Where do we see the Social Credit government taking us in terms of who benefits by their policies over the last ten years or so?
Successive Socred administrations in British Columbia have made the tax system here one of the most unfair in the country, one of the most regressive. In 1985 the former minister, Hugh Curtis, embarked on a perverse form of tax reform. This is the only place in North America where we've seen this kind of tax reform. He called it that: tax reform. It amounted to a shift in the tax burden away from corporations, away from those who are able to pay, and onto individuals, average families and those least able to help themselves: a shift away from the rich and onto average British Columbians.
It's kind of funny. We have a situation where the government says: "We have an economic problem. The poor have too much money and the rich don't have enough. We have to increase taxes on the poor and cut taxes on the rich. That's how we're going to succeed in British Columbia." That's the agenda of ten years of Social Credit in this province.
The current government continued the sort of reverse Robin Hood approach that we saw with Hugh Curtis. I want to read you a list of the business tax cuts and how much they cost British Columbia this past year.
This one, the small business employment tax credit, cost us $68 million this past year. Of course, that's one of the few tax cuts that many people could support, because it was about $300 on average per small business. What did the government do there? They eliminated that last year, so we now see that that tax cut will not continue.
Reduction of the tax rate on non-residential school machinery cost us $168.8 million last year. Reduction of the non-residential school tax for industrial and commercial properties cost us $87 million last year. Reduction of off-road motor fuel and aviation fuel tax — that's a surprising one — cost us $62 million last year. Phase-out of the corporation capital tax cost $60 million last year, and when you add on the last budget's corporation capital tax cut to banks, another $6 million, it was $66 million that we lost in revenue because of that tax cut.
Specific items purchased for use in aquaculture exempted: that cost us $400,000. Tax exemption for specific goods consumed or used by firms in the manufacture or servicing of exempted goods cost us $3 million. Venture capital tax credit for purchasers of newly issued common shares in small business venture capital corporations: $10 million. Reduction of non-residential school taxes from new industrial improvements in non-municipal areas: $1 million. And a freezing of water rental fees for the generation of hydroelectricity: $43 million.
When you add it up, Mr. Speaker, last year alone we saw in business tax cuts $503.2 million, and when you add up this three-year giveaway to businesses in this province, the cumulative tax loss to British Columbians was $1,024,200,000. That's how much we've given away to businesses in the last three years. That is in the context of a government saying we have no money to provide any new services; in fact, we don't even have money to provide the services that we have now. That's in the context of user fees for Pharmacare. That's in the context of user fees for physiotherapy. That's in the context of increased medical premiums. That's in the context of charging long-term care recipients 85 percent of their disposable income. The government cannot plead poverty when it has given over $1 billion to corporations in the last three years.
It gets worse, because in addition to those specific measures over the last three years we saw the reduction in the corporate income tax rate from 16 percent to 15 percent and then, under this administration, from 15 percent to 14 percent. Each tax-point cut in corporate income tax costs us approximately $32 million. So we've seen corporate income taxes cut $64 million at the same time that we've seen massive increases in personal income taxes for individuals.
When you add it up and you prorate the $64 million to this fiscal year, it's over $1,058.2 million in tax cuts to corporations over the last three years. And this government have the audacity to say that they don't have the money to feed hungry schoolchildren; they don't have the money to pay for a first-class medical plan. It's absolutely outrageous.
Now that's the cumulative of the last three years, but even if we look at the annual tax loss, we see close to $600 million. In addition, we saw last year the wealth surtax brought in by Mr. Bennett — a 10 percent tax on those who are wealthy in British Columbia. What happened with this government? We saw that eliminated. So we saw $34 million given to wealthy individuals. In addition to this over $1 billion in corporate tax cuts, we now see $34 million in tax cuts for wealthy individuals. So if they couldn't shuffle the money off into dividends so they would avoid taxes, we saw an absolute tax reduction for wealthy individuals, at the same time, again, that we saw all kinds of user fees and increased costs put on the shoulders of average working families in British Columbia.
We know that every cent in corporate taxes that are cut must be made up somewhere else. That's how it works. You can't simply cut the corporate income tax and lose $32 million in revenue unless you make it up somewhere else. Where has the current government made up the money? They've shifted more and more of the burden onto average families, and worse, onto the elderly and those in society least able to protect and defend themselves.
AIDS patients aren't popular; let's make them pay. Senior citizens aren't that organized, especially in long-term care facilities; let's make them pay. Users of public transit are generally poorer organized and poorer economically; let's make them pay. Seven hundred dollars in increased taxes and user fees this year and $700 last year: $1,400 out of the pockets of average British Columbians every year while those at the higher income levels saw their taxes cut and corporations are paying less and less a share of the burden.
Perhaps the cruelest increase is the medical premium increase — $192 a year for families and $108 per year for individuals. The rich pay exactly the same as the poor, and the wealth surtax certainly more than makes up for this small increase for them. But for those who are struggling to get by — I talked about the Vietnamese woman in my riding or the widow in Penticton — that user fee on medical premiums hurts.
Only three provinces in Canada have medical premiums at all. How do they do it in Manitoba? How do they do it in Saskatchewan, Mr. Premier? Poor prairie provinces have no medical premiums, but this rich province has to jack them up and jack them up so that the poor have very great difficulty paying medical premiums.
I checked with Reach clinic on Commercial Drive, and currently, before this latest increase, 6 percent of the people that go to Reach clinic don't have any medical coverage. We like to think we have universal health care. Well, it's being eroded. Six percent of the people who use that clinic can't afford the premiums. So what they do is lie; they're forced to
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lie. They go in and give them their old card. Then Reach clinic finds out later that they're not eligible and that they haven't paid.
In case the members think that's just Reach clinic, it's not. Someone checked with an Arbutus doctors' clinic –– 4 percent. The government's own authority says 2 percent of British Columbians don't pay premiums. Two percent means about 40,000 or 50,000 British Columbians are not covered by any medical care at all — in this rich province. With these kinds of increased user fees, there is no question that that will rise dramatically, because we've had no increase in the standard of living in this province to commensurate people with an increase. We've had no increase in the minimum wage; yet we have $100 — or in some cases $200 a year — in increased premiums for those who can least afford it.
So we are going to see — we are already seeing –– 6 percent of the population, certainly in East Vancouver, not paying premiums and not covered by the medical plan. We're going to see that rise to at least 10 percent and probably higher. The erosion of universality is what is behind this budget, I submit.
Mr. Speaker, we need tax reform in British Columbia, and certainly not the kind we've seen under Mr. Curtis and under this current minister. While the government pleads poverty and claims that it must raise taxes to balance the budget, the same government has been shovelling money to its corporate friends. The percentage of the budget paid by corporations in the 1950s used to be 50 percent. In 1981, only seven years ago, 25 percent of the revenue the government received was from corporations. But in 1987, only 17 percent will be paid by corporations.
That goes against the trend of tax reform, even in Ronald Reagan's United States. If we had the same tax rates on business that existed three years ago under the Bill Bennett administration, we would have about $600 million more in revenue to deal with things that need to be done in British Columbia.
If we went further and had real tax reform that raised more money from the corporate sector, like Ronald Reagan, then we would have another $200 million, because there's roughly a billion dollars in corporate profits that escapes any form of taxation at all. So if we had Ronald Reagan's 20 percent across flat tax on corporate profits, we would raise another $200 million in British Columbia. That means a billion dollars annually to deal with the problems we have in British Columbia and to deal with the problems of the people I talked about earlier.
Mr. Speaker, this is a rich province. We needn't have medical premiums, and we needn't have special fees on senior citizens. If we simply restored the taxes we had three years ago and embarked on a modest Ronald Reagan-like tax reform, we would have over a billion dollars in revenue to improve the quality of life for British Columbians, to deal with the tragedy of unemployment, to create jobs, to improve our education system, to enhance our medical coverage — not cut it back and privatize it — and to deal even with the deficit and even to pay our public sector employees a decent and livable wage.
To conclude, I'd like to make a couple of comments about some other things in the budget. The government, in this budget, is proud of the fact that it has been attacking the federal government: we're not getting our share. But what is the biggest problem we have right now with the federal government? It is interest rates, because interest rates are too high. They're higher than in the United States by 3 percent or 4 percent, and that's causing our Canadian dollar to rise. Every cent the dollar rises relative to the Americans' costs the forest industry — let alone every other industry — $150 million.
[10:45]
Why is the interest rate high? Because the federal government is worried about inflation in Ontario. What has this government said about the federal government's monetary policy? What has this government said about high interest rates? Nothing. They want more subsidy from the federal Government, but the real economic problem we face in British Columbia that should be dealt with is high interest rates and the high Canadian dollar. We haven't heard a peep from this government to deal with that very real problem, because the federal government's policy on interest rates is driven by their fear of inflation in southern Ontario. In British Columbia we haven't even recovered from the recession.
MR. WILLIAMS: Not with these guys.
MR. CLARK: That's correct. We have barely started to recover. They think 10 percent unemployment is good, Mr. Speaker. But nothing from the other side about the real problems of the economy and the federal government's response to it. All they want is more gravy from the federal government.
I'd like to wrap up with two other things that I have to mention. The first is this $450 million shell game, this cynical attempt to fool the voters. They'll see through this transparency: it's absolutely ridiculous. The first member for Nanaimo (Mr. Stupich) made the point better than I can: why didn't they simply add another zero? There's nobody there. It's phony, and everybody has seen through that. Of course, the Minister of Finance is quite concerned because the press didn't even buy this silly game of trying to pretend that there is money there for a rainy day. The rainy day is now. We still have a deficit, and they still haven't dealt with it, and they still haven't dealt with the problems in British Columbia.
One last point: college funding. I was phoned over the weekend by several people in the community college system, because the government bragged about all the money they are spending for universities and the education system. But what's happening to community colleges? By the way, they are the most accessible form of education for people. We have, as everybody knows in this House, an abysmal rate of university participation, an absolutely atrocious rate, one of the worst in Canada — surely one of the real problems for the long-run health of British Columbia. And that's in universities. But one of the best, most accessible places for people to attend in order for pre-university entrance or for two-year programs to help get decent jobs in this province is the community colleges.
What did the budget say? There's a 0.89 percent increase for community colleges. Enrolment is up to 70,000 people in community colleges, and they've had a 2 percent increase over the last seven years. We've seen inflation at about 45 percent over the last seven years, and only a 2 percent increase in community college budgets. Why is that? Is it because it doesn't tend to be the sons and daughters of the wealthy who go to the community colleges? Is that why? I don't know why. A 0.89 percent increase is simply not acceptable.
We already have seen hundreds of people last year — everybody remembers — lined up and being turned away
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from community colleges in this province. How does the government deal with that? They give this 0.89 percent increase. The lineups will be even bigger, because fewer people will be able to attend because the community colleges' only recourse is to cut courses, faculty and staff and to cut the number of students who will be eligible to attend community colleges.
This government has stacked the boards — I noticed Hope Wotherspoon is on the board of directors of Langara community college — so maybe we won't hear anything from the colleges. It really is scandalous that this government raises the grant program for people to attend universities, talks about increased money for the education system, and then really savages the community college system, which is the most accessible form of education for working people in British Columbia.
[Mr. Pelton in the chair.]
In summary, the budget is regressive and it's unfair, and it taxes those who are least able to defend themselves. It tells you that the government's agenda is that we have an economic problem in British Columbia, which appears to be that the poor have too much money and the rich don't have enough. And corporations have been taxed too high, so let's cut them and make it up on senior citizens and those least able to protect themselves. It's a shocking reverse Robin Hood; it's a shockingly regressive and cruel budget. I'm proud and delighted to stand here and oppose it as hard as I possible can, and I know my colleagues will as well.
HON. MR. SAVAGE: I stand, obviously, to speak in favour of what I believe to be one of the most responsible budgets delivered in this decade in this House. This is the second budget that has been delivered since our government came to office a year and a half ago, and I am very pleased to praise what is being promoted in this budget.
In our first budget we set out the economic and — I remind you — fiscal policies needed to give our province a fresh start. The policies and principles contained in this year's budget are proof that we have, in fact, made a good start and that we are on the right track. This budget actually takes us a lot farther. It does look to the future. It looks to the kind of British Columbia that we want our children to inherit and be proud of. It is a future based on economic prosperity and a responsible sharing of the social benefits of that prosperity. No government can be successful if it acts in isolation from the people it is elected to serve. It is important to know that this budget is about listening to people, which we have done. It is about learning from what they have to say. It translates the grassroots message into a vision for the future of this province.
We have worked with and heard from many British Columbians. We've listened to people from business, universities and colleges, labour and the professions. People from every corner of this great province have made comments about the future of this great province. The message we have heard comes loud and clear, time and time again. The message contained in this budget is that we must set a clear and firm course for the future of everyone — that includes all British Columbians — and we must provide that future with a great degree of confidence.
Last year we set out on three challenges: labour relations, economic diversification and strengthening the Pacific Rim connections. By working together as a government, we have progressed very well in all three.
I would point to the new Industrial Relations Act...
MR. CLARK: Oh, that's great!
HON. MR. SAVAGE: It is great.
...our emphasis on regional decision-making and our Pacific Rim education initiative as positive steps in the right direction. The key to success will not be government by panacea, but the key will be British Columbians all committing and working together.
We've seen economic growth and job creation that has been beyond all expectations. The signs are positive and the momentum will continue.
British Columbia's success has not gone unnoticed. In February the prestigious Investment Dealers' Association of Canada stated: "Access to U.S. markets, combined with the added benefits of high productivity, international competitiveness and an attractive social and political climate, will draw substantial amounts of investment capital" to this province,"particularly from Asia and Europe, to expand the manufacturing infrastructure." For this success to last, we must continue to work together for the challenges ahead.
Mr. Speaker, it's important to recognize also that there are many in society who generally require assistance that we have committed ourselves to — for example, social programs, education, etc. The caseload of people — if I may bounce back to income assistance — has declined by some 11 percent since February 1985. The average number of employable people on income assistance has dropped by almost 20 percent, which is a good sign. We fully expect that continued reduction of this caseload will continue as a result of growth in the economy. The Minister of Social Services and Housing (Hon. Mr. Richmond) is in fact restructuring programs to improve the delivery of those programs. These changes will save taxpayers $25 million and will promote equity and consistency across this entire province.
The budget contains a number of measures to enhance other social services measures in our province as well. It commits money to enforcement of court maintenance orders on behalf of income assistance recipients or others needing the programs. It commits money to aid victims of crime. Money will be committed for programs to strengthen the family, as we will be hearing today. We'll be expanding the program called Project Reconnect, which links street kids with education, family, medical and employment services. Last June we increased GAIN support allowances for families; in December we increased maximum shelter allowances. This increased support will add approximately $38 million to this year's budget.
Between the Ministries of Social Services and Housing, Education and Health, we will spend $540-some million on services and programs for the disabled. Let me assure you, Mr. Speaker, that the budget identifies where we must continue our efforts to relocate the disabled and people convalescing from mental institutions to appropriate community care.
We also recognize that the issue of health care is an important one to every British Columbian. Our province is well served by its health care system, and we do recognize that we have highly trained and absolutely committed health care workers.
Rising health care costs and the large percentage of taxpayers' dollars which health care consumes are major
[ Page 3651 ]
challenges for any government. But rising health care costs and the large percentage of taxpayers' dollars which health care consumes must be recognized and dealt with. In B.C., one-third of the budget of the province goes to health care. That's more than $1,300 for every man, woman and child in this entire province. In other words, it's about $3.9 billion.
Notwithstanding these pressures on the taxpayers' dollars, we can in fact maintain the universal health care system that we now enjoy. The obvious answer is to have effective management. We must be prudent users of our health care system. We must lead and encourage healthy lifestyles; that's the ultimate goal for any of us. Health care practitioners must provide cost-effective care.
It's also important to recognize that we have more doctors relative to our population than many other provinces. In a competitive market, a high number of doctors would be a good feature. In theory, lower prices should really result. In a totally subsidized system such as ours, no such reductions do in fact occur.
[11:00]
To balance out the equation and inject a small amount of common sense, the budget calls for medical insurance premiums to actually reflect more the cost of the health care system and medical services. Even with the increases that were announced, from $29 for individuals up to $58 for families of three or more, the payments that are being made on those premiums are still well below those that are being charged in Ontario. Let me make it clear: we'll still be sheltering those who can least afford it. This will be done through improvements to the premium assistance program.
We're taking other measures to control rising health care costs. No, these statements aren't bills which the patient must pay, but they will alert the patient to the cost of services and encourage responsible use of publicly funded health services.
Our senior citizens are a valuable resource requiring special attention and services. Over the next two decades the proportion of seniors in our population is expected to increase significantly. We obviously recognize that we must provide for that growth and its obviously increased costs or put our excellent system at risk, so we are in fact making provisions for the future.
Two significant reports on alcohol and drug abuse have been released in the past year; they add to an already chilling knowledge that we have gained. Ten percent of all health care costs are alcohol-related. One in five British Columbians consumes enough alcohol to risk health damage. Over 70 percent of all male inmates in correctional facilities were under the influence of alcohol at the time of their crime. One third of time served in provincial correctional centres is for drinking and driving offences. In an average year, drinking and driving results in over 200 deaths and over 7,000 injuries.
Alcohol and drug abuse in British Columbia have immense social cost. More of this cost must be borne by and met from the products whose consumption contributes to the problem. That is why the social service tax on alcoholic beverages is being increased from 6 to 10 percent, and this rate will also be imposed on draft beer. The 5 percent liquor purchase fee paid by licensees will be eliminated. Funds in support of government programs will increase by $80 million as a result of these changes. Last year our province spent $25 million on substance abuse programs. In 1988-89, Mr. Speaker, we will almost double the funds for programs aimed at alcohol and drug education, and prevention and treatment.
When some people hear about government fighting the deficit. the thought that comes to mind is of a government with no social conscience, a government with no heart. Nothing could be further from the truth. No government could build and preserve a strong, compassionate social safety net like the one we have here in B.C. without strong and responsible management. The greatest enemies to our social safety net are deficit and debt.
As the Finance minister noted in his budget address, deficits can be dangerous. It's easy to borrow and the interest doesn't seem all that threatening at the time you borrow. But let me tell you. each dollar we borrow does carry a burden of debt and it must be paid. As the debt builds, growing interest payments mean fewer dollars that may be passed through to education and social programs. We've talked about a fresh start, but there will be no fresh start for our children, as I said in my opening remarks, if we continue to mortgage their future. It is not right for us to pass on a legend of a mortgage for our children to bear the brunt of. We must end the addiction of spending far beyond our means. It cannot happen.
You've heard talk about our long-range economic plan; well, this plan acts as a framework. It will be dynamic, changing when conditions change, but the goals will be constant. We must eliminate the deficit. These goals may seem ambitious. but they are in fact realistic. Achieving them will be vital for our children's future. The 1988 budget that the Finance minister presented to us on March 24 gives us the means by which we can achieve those goals.
This year we will be looking for a deficit less than half of what was forecast and also an improved debt picture. All the while, we are still maintaining a high level of services from government. It all really boils down to good government and responsible management. This government was elected on responsible management. Responsible management does mean making and facing very tough decisions. It also means facing them head-on and building a budget process which takes into account the cyclical nature of the economies of this province, as we all know can happen very often.
To achieve these goals we have to take new, innovative steps. We set out to privatize based on the experiences here and abroad which realistically show that when programs are privatized, costs fall and services do improve. Private firms find better ways to do business and they do expand and create jobs. As you know, we've been reviewing government programs. We're discontinuing those that are no longer relevant, and we are privatizing where it does make sense.
The government will receive substantial proceeds from privatization in the sale of assets, but in my view it would be a mistake to use the proceeds from these sales to pay for ongoing programs, just like it would be to sell the furniture to pay your rent. Instead we will put these proceeds into a new privatization benefits fund. The money in this fund will earn income. Good management also means getting value for the taxpayers' dollar. Government is doing its part by eliminating programs that no longer serve a useful purpose, and privatizing those than can be done more cheaply and more appropriately by the private sector is the right way to go.
We're tightening up income assistance programs so only those in need will benefit. Also in this day and age, surely it is not too much for government to ask individuals and businesses to pay a more reasonable share for the use of the services that are benefiting them. Matching government revenues to the cost of services is also the reason why some
[ Page 3652 ]
taxes and licence fees have been increased. For example, rural area property taxes for homeowners and businesses have been increased by $39 annually. Even so, the average rural tax bill still remains well short of what it really does cost government to provide those services to the rural communities.
Added to our challenges to remaining competitive is an especially heavy collective bargaining calendar year. Almost half the unionized workforce will be negotiating collective bargaining agreements for the first time under the new Industrial Relations Act this year. There are a total of 385 agreements that will expire this year which are expected to affect some 212,000 workers. Wage increases in both the private and public sector must be tied to productivity in keeping our competitive edge.
The year 1987 was a banner year for British Columbians. Our province experienced economic growth in the order of around 4 percent. Economic indicators have been looking great. All the arrows that should be pointing up are up, and those that should be pointing down are down. British Columbians through their hard work, as the minister pointed out, have created more than 90,000 jobs between January of last year and January of this year. People are finding productive and stable employment. But that's not to sit on our laurels. While people have seen things improve, we all recognize that more needs to be done. That's why this year's budget takes aim at improving on that success.
The philosophy of this government, when it comes to building a healthy economy, is straightforward: simply give our businesses the tools to do the job and let them get on with it. British Columbia business is the backbone of our economy. There is no doubt about that. Government's role should not be to interfere. Government should not be in the way of business, nor should it be in the business of business. First and foremost, we've got to lift the burden of taxes on business. Consequently, the budget announced breaks for the different sectors.
Forestry remains the foundation of this economy. The policy in the announcement from the Forests ministry will give British Columbians a fair return from this most valuable resource.
In closing I'd like to say that if we are to have a positive future for the residents of this province, it is important that we recognize in our budget, as we have, that we provide leadership and incentive for people to continue to invest in this great province. I wholeheartedly support the efforts of our Finance minister in bringing forth the 1988 budget.
MR. JONES: Mr. Speaker, it's a pleasure for me to rise and speak on behalf of the vast majority of British Columbians who are either disappointed, frustrated, angered or even outraged by the budget that we saw introduced last week. In the spirit of typical British understatement, my friend the second member for Victoria (Mr. Blencoe), when he saw the budget said: "Well, this isn't an election budget.
It certainly isn't an election budget.
One of the leaders of the financial community and, I believe, a friend of the government House Leader from Prince George, said when he saw the budget: "I give it a 5.8 for artistic impression and a 3.8 for technical merit. " To me, that says it's charisma without substance. It is, as the second member for Vancouver East (Mr. Clark) said, a Robin Hood in-reverse budget; it's a Sheriff of Nottingham budget. It's moving us back to the days of the head tax. It's an unfair and unjust budget, and it's a smoke-and-mirrors budget.
I'm pleased to see the Minister of Education (Hon. Mr. Brummet) rise, because I know one of the terms that he's very familiar with and that he incorporated into Bill 20 was — this was the idea that was paramount in education during the restraint period, and it's still paramount in terms of arbitration — "ability to pay." Yet we see a budget here that pays absolutely no attention to the people's ability to pay, in terms of how this government generates its revenue. In fact, it's become a Socred tradition in this province that we hit those who are least able to pay; that we pick on those who are most vulnerable, the weakest, those least able to fight back.
This is the regressive approach that we've seen for a number of years now. Rather than following the history and tradition of taxation that we've moved to in modern times, taxing those who can afford to pay.... Those who can afford to pay should pay more than those who are less able to contribute to the funds that the government collects on the revenue side. The poor, the sick and the low- and middle-income families in this province are the most vulnerable and are the victims of Socred budget planning.
I think they see the world in terms of winners and losers and victims and those who are going to benefit. Who are the victims? Certainly everybody that pays medical insurance premiums. Those who smoke or drink are victims. Everybody who drives is a victim. Average families are victims. Small businesses are even victims. Rural property owners are victims. Most particularly, seniors in this province who don't deserve to be victims are victims of this budget.
[11:15]
We had an increase in medical service insurance premiums last year of 10 percent. That was what this government, which the Minister of Agriculture (Hon. Mr. Savage) calls responsible management, thought was an appropriate increase last year, Well, the thinking has changed dramatically between last year and this. Obviously there must have been some confusion last year; I think there's more confusion this year. On top of that 10 percent, we see another 40 percent increase in those premiums: $192 per average family. As the member for Vancouver East indicated, thousands and thousands of people in this province were unable to pay in the past. They could not afford those premiums and, as a result, suffered in terms of their ability to protect their health. What we're going to see after this whopping increase is many more families in British Columbia unable to pay for those premiums, unprotected by the kind of protection you and I take for granted. We can afford those increases, but many people in this province are unable to.
We haven't yet seen the effect the increases in those premiums is going to have on a number of businesses, institutes and other organizations in this province. Something like one-third of this year's meagre increase in the budget for colleges will go to pay increased premiums for medical insurance. They have suffered over the years; we've seen years and years of restraint. Now they get a meagre less than-l-percent increase, and a third of that goes to pay for medical insurance premiums. Shame on this government! Shame on those who are going to attack people in terms of paying their medical premiums!
We saw more sin tax in this budget. The government obviously doesn't like sinners, but some it likes less than others. In particular, we saw draft beer being more sinful than other alcoholic beverages. Draft beer is now experiencing an increase of 10 percent in sales tax. I didn't see any increase for pipe- or cigar-smokers in this budget. Perhaps they're not as sinful as other kinds of tobacco.
[ Page 3653 ]
Everyone who drives in this province is going to suffer — is a victim — as a result of this budget. Last year we saw a 2-cent-per-litre tax increase on gasoline; this year we see a further I cent. Are we going to see this every year? Are we going to see 2 cents, I cent? Is there no sort of predictability in the kinds of increases this government wants to foist on drivers in this province?
Drivers are also going to suffer through a tax increase on their insurance rates. We want to go from 3 percent to 4 percent now — a $6 million increase to the Insurance Corporation of British Columbia. No wonder the rates have to go up, when they're continually being taxed more and more. Last year we thought 3 percent was the appropriate rate. If you look at the rates across Canada in terms of taxing automobile insurance premiums, you will see that 3 percent is a pretty typical rate. In fact, eight of the ten provinces have 3 percent; and last year the government thought that was the appropriate rate. One province, Newfoundland, charges 4 percent. So in the typical tax grab of the Minister of Finance, British Columbia now has the highest tax rate on automobile insurance premiums in Canada. We raised an additional $25 million last year. That rate increase would raise $27 million this year. On top of that, we're going to add another I percent ' and raise another $6 million on the backs of every motorist in British Columbia.
This government saw fit in last year's budget to add $600 in taxes to the average family and $100 in fees; in this budget, something like $300 in taxes and $400 in fees. At least last year much of that increase was based on income tax, a progressive kind of taxation. But this year we're back to the old days of the Sheriff of Nottingham. We're back to a head tax.
Small business is still a victim of this government in terms of taxation. In last year's budget the Social Credit government of this province thought 8 percent was not an appropriate rate for small business to pay: "Let's jack it up to 11 percent, and let's raise $25 million by doing that." This year this confused government thought: "Well, we must have made the wrong decision last year, because now we're going from 11 percent down to 9 percent. We were going to raise $37 million this year from that increase in tax, and now we're only going to raise $19 million. So in two years we have increased taxation to small business by $25 million plus $19 million — $44 million. Small businesses are victims of this government; they are not friends of this government.
Rural property owners are victims in this budget. They saw their tax rates increase $2 million last week. Again, this government is very confused about the kind of rate that these rural property owners should pay. Last year, the increase went from $1.40 per $1,000 assessment to $1.70. A brief year ago it was considered the appropriate rate that rural property owners should pay. I guess there's been some confusion and rethinking over there, because now rural property owners should pay $2.30 per $1,000 assessed value on their property.
I would like to see a free vote on this particular one. The Minister of Agriculture said that this was due and responsible management. I would like to see the rural members of this Legislature vote for this one. I'd like to see them explain to their constituents why this government thought that two years ago $1.40 was appropriate, last year $1.70 was appropriate, and this year $2.30 is appropriate. What is an appropriate rate of assessment for rural property owners? Is it $1.40, or $1.70, or $2.30?
I think what's appropriate in terms of the Social Credit Government is whatever the traffic will bear: we'll victimize all these people and squeeze every last cent out of them; we'll nickel and dime them to death.
But probably the greatest victims of all in this budget are the seniors of this province. On top of last year's budget, where we saw them have to pay the dispensing fee for their Pharmacare bills, where we saw them have to pay user fees for certain medical services, where we saw an increase in their minimum property tax — probably the most mean-spirited, vicious and unconscionable act of this budget.... And if there were just this one single item in the budget, it would override any of the decent measures that may have been attempted, this one item whereby we see the after-room and-board expenditures of seniors in this province cut in half — a 40 percent reduction. Reduced by 40 percent what they're paid after room and board.
MR. MICHAEL: What is it in Manitoba?
MR. JONES: I don't know what it is in Manitoba. You tell me. I think it's unconscionable no matter where it is, and I can't believe it's the same in any other province in this country, other than Social Credit British Columbia.
We increase the taxation on those people and reduce their income by $816 a year. That*s $816 that goes to buy their toiletries, clothing, telephone, presents for their grandchildren at Christmastime. We want to reduce that — the little bit that they had left over — by 40 percent. We want to take $816 out of the pockets of those people. This is a province whose government can afford $7.5 million for a Challenger jet, yet you want to reduce the after-room-and-board income of seniors in this province. Those pioneers of this province who have paid their tax over the years, who have built this country and this province, who have given us the opportunities that we have today, you want to nickel and dime to death.
I want to tell you that many families who have seniors in extended care homes are absolutely outraged, and I think you know it as well as I do, because I'm sure your phone has been ringing off the hook as mine has.
It's a travesty. The Minister of Finance wants to live up to his nickname of Dr. No. Well, I think we know the kind of sinister, negative, dishonest character that Dr. No was. I think many seniors in this province would have some suggestions on what he could do with that budget necktie he buys every year.
So British Columbians in general are the victims of this budget. They're the losers. The families, the smokers, the motorists, the small businesses, the rural property owners and, most particularly, the seniors are the victims. But who are the winners? Who profited from this budget and previous Social Credit budgets? I guess some farmers did. The government of responsible management opposite thought last year that we should increase the definition of a bona fide farmer to having a farm revenue threshold of $5,000. We've changed our minds again. We can't make up our minds on what these taxation rates should be or what the definition should be because now we're back to $1,600 as the definition of a bona fide farmer. However, I don't think the farmers are all that happy, because we've reduced the exemption on pesticides in this province.
Who else are benefactors? We've got the B.C. Racing Commission. They must be friends of government. I'm sure
[ Page 3654 ]
it's appropriate that their taxation level be reduced or that they benefit more from taxation. So we've got gentlemen farmers and the Racing Commission. Who else are the friends of the Socreds? Who else are the benefactors of this budget? It's not the doctors, because we've seen teacher-bashing in this province and I think we're into a spate of doctor-bashing. It's the corporations that are the real benefactors of this budget, the last budget and the budget before that, as my friend from Vancouver East indicated earlier.
In last year's budget, which of course impacts as well on this year's loss of revenue, we lost $29 million by reducing the wealth surtax. We lost $7 million to banks and trust companies in reduced taxation. We lost $15 million by eliminating the school tax on utilities. We lost $11 million to mining corporations last year and the same this year, plus what we've seen of the cumulative effects over several years of tax giveaways to corporations. There must be some theory on the other side that throwing money at corporations in this province is somehow going to assist the economic well-being of British Columbia, because we saw a reduction of school tax on non-residential property that was predicted to be $90 million in 1988-89; and the confused government opposite has changed its mind again and now it's going to increase the tax a little bit to those non-residential property owners.
We saw property taxes reduced on machinery and equipment. That was projected to be $177 million in 1988-89. We saw corporation capital taxes eliminated. That was predicted to be $90 million in 1988-89. And we saw progressively the corporate income tax reduced from 16 percent to 15 percent to 14 percent. That was earlier estimated to be $64 million annually; now the projection, for some reason, from the confused government is $25 million. What we have in this province is a corporate tax haven and an individual tax hell.
It's an anti-people budget. It's a budget that unfairly attacks individuals in a regressive manner. At the same time, pleading poverty, we see massive tax giveaways to corporations. In last year's budget, these giveaways were estimated to be worth $600 million annually. Six hundred million dollars annually is roughly double what the deficit is. We could have a balanced budget this year and still have $150 million, $250 million left over. The budget can be balanced now if we didn't want to create a corporate tax haven in British Columbia.
[11:30]
It's amazing that we have the lowest corporate tax rates. Only Prince Edward Island and Alberta have reduced corporate income tax in recent years; and the only province that has a lower corporate income tax than British Columbia is Quebec, and Quebec has been increasing it in recent years.
So what we see in this budget is winners and losers. We see average British Columbian families, seniors, motorists, and sinners who like to smoke and drink, pay the price of corporate tax giveaways. Six hundred million dollars annually, double the annual deficit, is thrown at corporations. I guess it's the trickle-down theory: you throw this money at corporations and you hope the benefits will trickle down to the population. Well, I don't think the British Columbia populace has been trickled down on lately. I don't think the 10 percent unemployed and the tremendous number of people on welfare and unemployment insurance are really experiencing the great economic boon that this continual $600 million annual giveaway to corporations promises in Socred thinking.
There is absolutely no stimulation in this budget. What happened to JobTrac? That was such a great idea a year ago, a wonderful idea. No mention in this budget. JobTrac has disappeared. Quiet death of JobTrac.
The confused government was really keen on JobTrac last year, not so keen this year. We had an idea what business tax should be last year; we have a different idea this year. We had an idea what the tax on ICBC premiums should be last year; a different idea this year. Rural property taxes changed; they're confused about that. Within a couple of weeks we were not going to fund cyclosporin, and now we're going to; they're very confused about that. It's a strange sort of thinking. Prior to the last election we were going to have television in the Legislature, and then.... I guess that was not calculated before, because after the election it was too expensive. Now perhaps it's going to be done again by private industry. The Minister of Education (Hon. Mr. Brummet) wanted to fund Quebec exchanges, then he didn't want to; now he wants to again. The government is confused.
So we have a $350 million deficit but somehow we're going to create a $450 million rainy-day fund; a budget stabilization, a BS fund; some sort of Keynesian economics where we lay aside money for a rainy day for our children and for our children's children. Yet the Minister of Finance indicated a couple of days later that it really could be used in an election. But there's no money there; there is not a cent in that fund. I think many economists in this province.... When you set aside a fund, they automatically assume there's going to be money there. Certainly our Finance critic from Nanaimo saw through that very quickly, as did most of the media.
Even if there were money in that fund, we would still be losing about $10 million annually, because we would be paying the difference between the rate of debt servicing in this province and whatever interest we could generate on the fund, which would be about 2 percent — which would amount to, on a $450 million fund, about $10 million annually. So even if there were money in the fund when we had this kind of debt, there would be a $10 million loss.
This was the perfect time for a decent government, a government that was a responsible manager, to increase the minimum wage and to bring in pay equity legislation, and to do some progressive things that would really help the citizens of this province. This government will be the last province in Canada to bring in pay equity. Even the newly elected Premier of New Brunswick has promised pay equity legislation. But you guys will be last — and I say "you guys" because there are only guys opposite in their seats. Instead of real legislation that would benefit the people of this province, we get BS funds.
But I've seen funds before, and I think I've seen another BS fund. In 1986, we saw a fund introduced — it was called the fund for excellence in education. It came in with a bang — great hoopla — but it went out with a whimper. In this budget, we saw the quiet death of the fund for excellence. That was a program introduced by the government in 1986 that said: "The fund for excellence in education will provide.... a minimum of $600 million over three years. If economic circumstances improve sufficiently, more will be provided in the second and third years. This money will be used to place computers in classrooms, to upgrade teaching skills and support.... " — other programs.
So we had a fund — and I think there was money backing this fund up — which promised to be at least $600 million, promised to be a three-year fund, and promised to be for computers, for in-service training and for other instructional
[ Page 3655 ]
equipment. Did the Socreds live up to their word? No. Did they live up to $600 million? No. Did they live up to a three-year fund? No. Was it used for what it was intended to be used? No, it was not used for those purposes. I suppose if it was a $600 million fund for excellence in education, that should translate into roughly $300 million for the Minister of Education opposite. Well, I think what we saw, rather than $300 million.... The last figure I saw, which was in the last Ministry of Education annual report from last summer. was $153.6 million allocated. I presume that if it's "allocated," that means it will be spent, but I have no accounting of that. Rather than the $300 million, we see maybe half Of that being expended by this government. Was it a three-year program? No, it died after two years, leaving a lot of people waiting with high expectations that will be unfulfilled. Was it for computers, in-service instruction and instructional equipment? Well,80 percent of the funds for excellence in education in the first year went for general operating expenses: teachers' salaries, textbooks, the normal things that should be funded properly. Of that $153 million, how much was used for computers, which was to be the main item of that $300 million proposed fund, another BS fund? From what I can figure out, only $19 million was used for computers.
An excellent committee was struck by the former Minister of Education, a broad-based committee that represented a wide spectrum of people knowledgeable about computers in the province of British Columbia. That committee recommended that $125 million be spent over five years. What we have to date, after two years, is $19 million. I think we're going to fall a little shy of the mark. The Minister of Education does promise another $15 million in computers this year, so we'll have $34 million over three years. Still, I think we're going to be tremendously shy of the mark.
I see the Minister of Education taking notes. I know he'll be interested that if we look at expenditure by ministry, the Minister of Education, with his budget last year, promised an increase of 11.4 percent. Then I look at this year's budget, and I see a promise of only 7.4 percent. I know he'll want to explain that to me, because obviously the minister would not like to see an 11.4 percent increase go down to a 7.4 percent increase.
If we look at what has really happened in education expenditure, we have seen the school system ravaged by years of restraint that put us very near the bottom of the barrel in terms of our financial commitment to education. It put us at the bottom in terms of per-pupil expenditure, west of New Brunswick. I was hoping this year the minister would do something about that. He's heard me raise this point before. I was hoping we might at least move up one notch — at least go from the bottom, west of New Brunswick, to maybe the second from the bottom.
But this year's increase has done nothing to change our relative position. To get from our position to the top, which I certainly wouldn't expect in one year, would require something like seven times the increase in this year's education budget. In 1982-83 we were in second place in terms of per pupil commitment to education. To get from where we are today to second place would require an increase of more than four times what this minister has allocated to education expenditure. To move up one notch we would require an increase of more than two times what this minister has promised.
I'm basing that on expenditure in provinces last year without any increase, so there is no way that we're going to make any dent in our relative position in terms of education commitment in this province. What we see in this budget is an increase in head tax; we see throwing money at corporations and, on the expenditure side. unfulfilled expectations. For these reasons there is no way that I could ever support the government's introduction of the budget last week. Thank You.
MR. CHALMERS: I rise today in this Legislative Assembly to speak in support of our government's budget. I think I will I be adding my voice to many thousands of people throughout the province. As is well known by all the citizens of British Columbia, the worldwide economic recession of the early 1980s did not pass this province by. In many ways, because of the nature of our economic base, this province experienced economic dislocations that challenged the imagination and innovative spirit of all British Columbians.
By all British Columbians, I mean exactly that: those in industry and those in government. those who are employers and those who are employees, those citizens involved in the more traditional sectors of our economy such as forestry, mining, fishing and agriculture. and those people involved in the more recently important sector of tourism. Indeed, the reputation of British Columbia as a place for people from around the world to visit cannot be disputed, be it for the traditional outdoor seasonal recreational pursuits or for the new international destination resorts that abound throughout this province.
Also, tourist attractions such as the Okanagan Wine Festival must never be underestimated. Perhaps the Okanagan is not yet the Napa Valley of the north, but maybe it can be with the proper commitment; it is an achievable goal in the very short run. Indeed, in 1987 the Okanagan Wine Festival was ranked as one of the top 100 events in North America by the American Bus Association. I commend and will continue to support the Okanapri-Similkameen Tourist Association, community tourist organizations, the grape and wine sectors, and all those who contribute to the success of that very important wine festival.
Of course, it should be remembered that only a few short years ago the concept of Hollywood North was not thought to be possible by those who still question the imagination and the spirit of the people of British Columbia. On the topic of Hollywood North, the film industry is an area that is growing yearly in importance. Indeed, our government has not overlooked these areas, with a strong commitment to the British Columbia Film Commission and the new film development fund known as Film B.C. Film B.C. will encourage British Columbia-based writers, producers and directors, and will dramatically strengthen marketing and distribution opportunities for British Columbia talent.
[11:45]
Our province is quickly gaining a worldwide reputation in the field of advanced technology and in the electronics industry. Programs of our government such as the Discovery Foundation and the discovery park program are solid initiatives to encourage advanced technology in this province. In fact, the electronics industry in our province today is the fourth-largest industry and boasts more than 200 flourishing businesses which generate $700 million in revenue each and every year.
The British Columbia Enterprise Centre is another example of a practical initiative of our government to assist new and established businesses. The Enterprise Centre assists
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businesses. It is not an example of a gift that involves a standard-form government grant to industry. The Enterprise Centre is an example of helping businesses to help themselves by providing sound information on such everyday issues as product development and government procurement contracts.
With the proper legislative commitment from the federal government, the city of Vancouver can readily be established as an international financial centre. Our government has already drafted the necessary complementary provincial legislation to establish the city of Vancouver as an international financial centre, and of course we await legislation from the federal government.
The establishment of the British Columbia International Commercial Arbitration Centre adds to a list of growing international activities in the financial sector of this province.
Also, with the continuation of the exemplary enforcement policies of the B.C. Securities Commission, the Vancouver Stock Exchange will continue to gain increased worldwide notice as a stock exchange of reputation, especially as a venture capital market.
I would not for a moment imply that this list is exhaustive. Nonetheless, the industries named are illustrative of the energy, the enthusiasm and, above all, the resourcefulness of the citizens of British Columbia.
Mr. Speaker, I have much more to say today in support of the budget, but I think, with time pressing on, it would be appropriate for me at this time to move adjournment of the debate until the next sitting of the House.
Motion approved.
Hon. Mr. Brummet moved adjournment of the House.
Motion approved.
The House adjourned at 11:48 a.m.