[ Page 6865 ]

CONTENTS

Routine Proceedings

Personal Property Security Act (Bill 28). Hon. Mr. Couvelier

Introduction and first reading –– 6865

Income Tax Amendment Act, 1989 (Bill 7). Second reading

Ms. Pullinger –– 6865

Mr. Blencoe –– 6866

Mr. Sihota –– 6867

Mr. Barnes –– 6869

Hon. Mr. Couvelier –– 6870

Land Tax Deferment Amendment Act, 1989 (Bill 8). Second reading

Hon. Mr. Couvelier –– 6871

Mr. Clark –– 6871

Ms. A. Hagen –– 6872

Mr. Lovick –– 6873

Hon. Mr. Couvelier –– 6873

Motor Fuel Tax Amendment Act, 1989 (Bill 9). Second reading

Hon. Mr. Couvelier –– 6874

Mr. Clark –– 6874

Hon. Mr. Couvelier –– 6874

Property Purchase Tax Amendment Act, 1989 (Bill 10). Second reading

Hon. Mr. Couvelier –– 6875

Ms. Marzari –– 6876

Mr. Barlee –– 6877

Mr. Perry –– 6877

Mr. Blencoe –– 6879

The House met at 10:07 a.m.

Prayers.

HON. MR. DUECK: It is a privilege and an honour for me this morning to introduce to this House the High Commissioner of the Republic of Malawi, His Excellency Maclean W. Machinjili, accompanied by his wife, Mrs. Lonely A. Machinjili. Would this House please give them a warm welcome.

I would also like to say that we had a very friendly and interesting discussion. They are very short of medical doctors, and we at times have an oversupply, so we agreed that if we were to send 2,000 of our doctors, it would help them and also help my ministry. Would the House again please give them a warm welcome.

HON. MR. COUVELIER: I have the privilege this morning of introducing to the House a group of schoolchildren in the gallery from my neighbouring constituency of Oak Bay-Gordon Head. It's my pleasure to introduce 25 young people from the grade 5 French immersion class in Campus View Elementary School. These youngsters are accompanied by their teacher, Mr. Richard Boisvert, and a mother of one of the children, Mrs. Diane Bradley.

This group is unique in that in their number is one Megan Halkett, and to those of my colleagues who are familiar with my deputy minister's name, they might appreciate the uniqueness of the morning. I'd ask all of us to welcome the class to our deliberations.

Introduction of Bills

PERSONAL PROPERTY SECURITY ACT

Hon. Mr. Couvelier presented a message from his Honour the Lieutenant-Governor: a bill intituled Personal Property Security Act.

HON. MR. COUVELIER: The Personal Property Security Act reforms and consolidates personal property security law in British Columbia. It replaces a confusing and inefficient patchwork of statute and common law with a modern, comprehensive and fair structure. This statute will also bring the law in British Columbia in line with similar statutes in western Canada, Ontario and most American states.

The Personal Property Security Act will make lending and borrowing in British Columbia easier, quicker and less expensive. The current law governing security of personal property is unsatisfactory. Credit transactions are regulated by common law decisions, five separate pieces of legislation and three registries. Much of the legislation is based on Victorian statutes and is out of date. This fragmentation of personal property law has created a confusing and uncertain system, which adds to the cost of borrowing.

The Personal Property Security Act is a complete revision of the personal property security system. The act will regulate almost all credit transactions involving personal property in a way consistent with modern commercial realities. It will also provide for the registration of all security transactions involving personal property in a single centralized registry. Having a centralized registry will make it easier for potential buyers and lenders to check on outstanding loans and other encumbrances. The increased compatibility of personal property security law in this province with other jurisdictions will help make British Columbia a more attractive investment for international capital.

I believe that by making credit transactions less expensive, less risky and less time-consuming, the Personal Property Security Act will remove impediments to economic growth in this province and benefit businesses, consumers and all British Columbians.

I commend this bill for your consideration and urge its passage. I might also caution the House that by virtue of legal precedents, we felt compelled to use the traditional legalistic language, so to the average lay person it is not as clear as we might like. But on the advice of legal advisers, this is the way this complicated subject must be dealt with.

Mr. Speaker, I move the bill be introduced and read a first time now.

Bill 28, Personal Property Security Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Orders of the Day

HON. MR. RICHMOND: I call adjourned debate on second reading of Bill 7.

INCOME TAX AMENDMENT ACT, 1989
(continued)

MS. PULLINGER: Mr. Speaker, I am pleased to have the opportunity to speak to Bill 7, because the issue of housing has become a very serious problem in my riding, as in many others. However, I had hoped that the government would do better than this bill. Rather than actually dealing with the problem, it merely gives the appearance of dealing with the problem.

My colleague yesterday called this bill a modest proposal. I can't help but wonder if this bill is intended as Jonathan Swift intended his modest proposal, which was a rather cynical satire on a very serious situation. I wonder if this bill is simply a cynical attempt to give the appearance that the government is finally doing something and that it's attempting to deal with this problem, or if the government, from its rather ivory-tower vantage point it seems, has any understanding at all of what the problem is that people are facing.

[ Page 6866 ]

That problem is, of course, the massive and often unjustified rent increases. In my riding that is 30 percent, 40 percent and sometimes even 50 percent, which translates into an increase of $135 or $165 a month for many people. The problem is that people can't afford to pay these rents. Rents are simply not affordable any longer, and because of the vacancy rate, people can't move. Simply stated, the problem is that housing costs have grown beyond the means of many people.

[10:15]

People obviously need some relief, some form of help with their rental costs. While I don't disagree with what little this bill does, albeit far too little for far too few, I must say that I feel that this bill is inadequate, and it's not fair, and it's also largely ineffective, especially for those who need help the most.

I say it's not fair because, by the government's own admission, 80 percent of renters won't qualify for this program. The rental tax reduction will only apply to 20 percent of renters. The rest, the vast majority, will get nothing from this plan. Those are usually the folks who need help the most.

The bill is ineffective because it doesn't go far enough. It misses the mark, the real problem that people are facing. That, of course, as I've mentioned, is affordability. The government doesn't seem to comprehend that the problem people are having is that they can't pay their rents every month. This means that when the rent is due, when they pay it they don't have enough left over for things like food, clothing and bus fare. A year-end tax reduction simply does nothing for those people.

The government doesn't care to recognize that to use a tax deduction, you have to have a taxable income. The people who are hurting most are those people on fixed incomes. The majority of people that I see in my office on the weekends are single mothers with their children, seniors, handicapped and those earning minimum or low wages, and you say that the GAIN and SAFER programs are well integrated into this bill? Perhaps they are, because neither of them is doing the job adequately. The vast majority of these people that I mention don't have any taxable income, so a deduction at the end of the year does nothing for them.

This bill also ignores the fact of rapidly escalating rents and tenants' vulnerability to them. They are increasing, as I said, as much as 50 percent, and the only recourse at present is the Residential Tenancy Act, which costs $30 — which people can't pay. What we really need to do to address the problem is to have some kind of a rent review process, so that when rents are raised exorbitantly, people have some kind of recourse. People can't deal with the huge rent hikes they're being faced with; they need some sort of a process to mediate those increases and in many cases to reverse or decrease them.

I think the sunset clause in this bill is sad. Obviously what will happen — what always happens — is that rents will increase. They're going to escalate. At the same time, the minimal help offered to just a few people by this bill is going to decrease by 20 percent a year. In five years, there will be nothing left. While I would happily support this bill for the little bit that it does for a very few people, it is almost an insignificant amount of assistance and a major problem. I abhor the fact that it does nothing for those who need help the most, nothing for 80 percent of renters, nothing to address unfair tax or rent increases or to make rents more affordable each month.

In short, the bill really does nothing significant to address the most serious issue for most renters, and that's affordability. This bill is temporary, it's largely ineffective, and it's unfair.

AN HON. MEMBER: And it's cosmetic.

MS. PULLINGER: And it's cosmetic. It's designed, I believe, more to make it appear that the government is doing something than it is to help renters. I would hope the government could do better.

MR. BLENCOE: My colleagues thus far have really indicated that this bill is part of the government's I think rather sad attempt to give the impression to British Columbians — nearly 1.2 million who rent — that they are really serious about helping them. But it falls far short of dealing with the critical issues facing tenant families today. The budget and this announcement tried to give some impression that this government had discovered the housing issue: that there is a crisis out there and people require dramatic action on the part of the government. But when we take a look at the programs announced in the Housing portfolio, virtually nothing is going to be done for households and tenants.

The budget tried to give the impression in this renter's tax reduction that it was going to be universal; that every tenant, like the old tax credit system where tenants got a small break on their income tax.... The impression left by this minister was that yes, we are going to help you financially to deal with the huge rent increases, no rent review and no rentalsman; we're going to give you a tax break. Well, Mr. Speaker, upon research, analysis and discussions with Treasury Board staff, less than 20 percent of the tenants in the province will get anything out of this program. Yet the impression left, in a cynical way, is that tenants were going to get a break. Rather than reintroduce rent review, a rentalsman, and ways to control evictions and demolitions, this government goes to image and goes to advertising, and we find its advertising, at best, misleading in terms of what it's going to do for people in their housing.

When you look at the homeowner grant, universal in its increase, and then you take a look at this program for over a million tenants, it really has contempt for the tenants in the province of British Columbia. Every homeowner will get an increase in homeowner grant, but only 20 percent of tenants, and those virtually have to be way below the poverty line to get any break or have an income Tenants are treated as second- and third-class citizens by this

[ Page 6867 ]

government. At least make this program universal, as you've done for homeowners. Or is this government saying that tenants don't have the same rights, the same opportunities to benefit from government programs? It's certainly true that this government has vacated the field in terms of security for tenants. They refused to introduce the rentalsman. They refused to introduce rent review. They refused to allow for some control by local government over demolitions and evictions. Then they come in with a cynical piece of legislation that tries to give the impression that, okay, we won't introduce those secure items that we used to have, we won't protect you in your homes, we'll give you something back on your income tax.

When we analyze it, Mr. Speaker, less than 20 percent of the tenants in British Columbia will get a penny; 80 percent are exempt from this program. Yet all homeowners get an increase in the homeowner grant. This government, through its cynical manipulation of legislation, is creating a class system, if you will, in terms of where people live. Homeowners get a major break; tenants get nothing, virtually. That's wrong. That's not fair. If this government refuses to introduce legislation that will protect tenants, give them some level playing field between landlord and tenant — that is, a decent residential tenancy act, a decent residential tenancy branch, a process of rent review — this legislation is meaningless, absolutely meaningless, for the majority of tenants in the province.

They are facing huge rent increases, particularly in Vancouver and southern Vancouver Island where there is absolutely no protection. Any rent increase is legal in the province of British Columbia. Any rent increase. Yet they say in the budget, "Well, we understand tenants' problems; we'll give you a break on income tax," but upon analysis, 80 percent won't get a penny, won't get one dime.

HON. MR. COUVELIER: Thin dime.

MR. BLENCOE: They won't even get a thin dime from this Minister of Finance. How can he look his own tenants in Saanich in the eye and say that he's doing something for those thousands of tenants that he has in his riding? He knows his tenants are facing unbelievable circumstances in their residential requirements. How can he say to them that in one act, the Home Owner Grant Increase Act, it's universal and everybody's going to get improvement — and we support that — but for those 1.2 million or 1.3 million tenants, and the thousands that he has in his own riding...? I would suggest that 90 to 95 percent of tenants in his riding, my riding and other ridings over here won't get one thin dime from this program.

It's time this government recognized that tenants have homes, they require security, they require a level playing-field, they require the rentalsman office and rent review, they require protection from demolitions and evictions, and they require— if you are going to do it — a universal tax credit system, not some sham like we have before us today. It's an absolute sham in terms of helping tenants in British Columbia.

Tenant households — families — are waiting for some concrete proposals from this government, particularly those on fixed incomes and senior citizens. This government gets the same letters and calls that we do. Why don't you have some way of allowing us to appeal an unfair rent increase? Why can't a tenant, a senior, appeal a 60 percent increase, when it is clearly unjustified? Why is this government protecting those who do that to our senior citizens day in, day out?

There are no real answers to that. We can only conclude that they are prepared to let it happen to those senior citizens and families who are facing such increases. Why won't this government allow a rent review board, whereby the tenants, if they feel they can prove that their rent increase is unjustified, is beyond the market, can get that rent increase rolled back? That's what tenant families want. They don't want this sham that 80 percent won't get a penny out of. They want real protection; they want real security. They want a government that is prepared to go to bat for the 1.2 million tenants in this province.

MR. SIHOTA: Mr. Speaker, noting that I am now the fifth consecutive speaker for the New Democratic Party to stand up and speak on the matter of tenants, and after my last four colleagues have attacked this government in eloquent terms with respect to its failure to attend to the needs of tenants — not one member of the Social Credit Party has dared to stand up during this debate and talk about their interest in preserving a quality of life for those people in British Columbia who are tenants — I find it astounding, as I stand here and speak, that the Social Credit Minister of Finance (Hon. Mr. Couvelier) is leafing through some documents, that the Social Credit Minister of Health (Hon. Mr. Dueck) is reading some other material and that the Minister of Housing (Hon. Mr. Richmond) is not even in the House.

MR. SPEAKER: Order, please. Would the member get to the debate of the bill.

MR. SIHOTA: The point is that this legislation the government has introduced, as my colleagues have already pointed out, does very little for most renters in British Columbia. This so-called rent credit which the government advertises on the airwaves as some saviour to those afflicted with the tragedy of increased rents — that somehow this type of tax credit is going to provide some cushioning from those exorbitant rent increases we're seeing, particularly in Vancouver and here in Victoria, Esquimalt, Saanich and Oak Bay.... The fact of the matter is that 80 percent of the tenants in British Columbia are not going to be eligible to receive the tax credit, by the government's own admission.

[10:30]

I say to you, Mr. Speaker, that it is conscious misrepresentation by this government to try, through the airwaves, to create the impression that they are

[ Page 6868 ]

doing something about tenants in British Columbia and trying to deal with the matter of increased rents, while introducing legislation that covers less than 20 percent of people who rent. It creates false hopes to engage in that type of fraudulent misrepresentation in advertising. It creates false hopes for those who are looking for some assistance.

Those who look for assistance are individuals who are on fixed and modest incomes; people who, for example, pay no taxes at all; seniors; people who reside in mobile homes in ridings like mine. They are not going to receive any benefit from government with respect to rent increases. The latest increase I've seen in my riding has set a record of 63 percent. Tenants in this province are exposed and are at the whim of landlords who wish to increase their rents out of all justifiable proportion. It's a form of economic eviction, forcing tenants to wonder from month to month whether or not they're going to get that notice that forces them out of the security they have in their apartment or mobile home, the home they rent.

Tenants in this province are looking for some leadership from government to put the brakes on the attack on their incomes, particularly people who have fixed incomes, limited incomes and modest incomes. The attack comes from rent increases that are 25 percent, 30 percent and 60 percent. There are ways to do that, but no, the government has chosen by its own policy to allow those rent increases to occur and be passed on to tenants, thinking foolishly that somehow the market will come in with lower-income housing, that it will fill the vacuum in the most basic Adam Smith notion of free enterprise and free market. It hasn't happened, despite the government's assertion that it would happen way back in 1984 and that the marketplace would attend to the needs of those being evicted because of incredible rent increases.

There are things the government should be doing, but before I mention that I want to say that this government has now introduced legislation here which is fine for the 17 percent or 18 percent it assists. But look who it doesn't assist. It doesn't assist those who do not have a taxable income, those on social assistance or seniors who are not eligible for SAFER grants. Left uncovered by this legislation are a tremendous number of people who reside in ridings like mine and who are looking for some protection by the government.

That protection can come in different forms. It can come forward in the form of a rentalsman to whom renters can go to resolve their disputes if they have disputes with the landlord. These disputes are very common: matters of security deposits, matters of timing on eviction, just basic problems that people come across day in and day out.

This government is not even prepared to introduce legislation which says to landlords that you cannot discriminate against people on the basis of family status or age. Do you realize that in this province a landlord is within his rights to refuse housing to an individual because of the age of the individual? He can say: "No, we don't want seniors or young people." Based on age alone you can deny housing. You can deny housing in this province on the basis of family status alone. Children and families, of course, are the victims of those rights the government has given to landlords, rights which it has not accorded to renters. Marital status is another example of the basis upon which accommodation can be denied to people in this province.

There is no rentalsman to whom disputes can be taken. We believe there should be. There's no legislation that safeguards against and prevents discrimination on some very basic grounds. We believe there should be. There is no rent review mechanism; hence landlords are allowed to have the right to increase rents by an exorbitant rate to evict people from their homes. There's no protection against that kind of stuff. There's some general legislation in terms of economic eviction, but I've had cases that have gone forward with a 63 percent increase that wasn't deemed to be economic eviction.

There's no policy of land-banking and making sure that land is set aside for adequate housing for people and for affordable housing for families who want to rent. There is no comprehensive housing program by this government to deal with the housing needs of families and seniors who wish to rent. To add insult to injury, this government has introduced homeowner grants that apply across the board to people who own homes, but it is not prepared to apply across-the-board legislation in terms of tax credits to all those people who rent.

It's a real tragedy. Maybe the human dimension of those tragedies is lost upon the Minister of Finance when he introduces this type of legislation. I've had people in my riding who have been evicted and literally had no place to go, and had all of their belongings sitting out on the street. I've had people in my riding who have been evicted and have had all of their materials picked up by the sheriffs and impounded. I've had people in my riding who, because of being unable to afford housing due to rent increases, had to stay out on the streets, or had to go out to campgrounds and sleep in their cars. I don't think that's the type of society we want to create in British Columbia.

There are measures that can be designed to prevent all of those ills in a society as affluent as British Columbia. Those measures are not before us today. Instead, there's just the gloss, imagery and hyperbole of a tax credit that assists a handful of renters and ignores the reality of the problems faced by the balance. It ignores the jeopardy they face with respect to the potential for eviction and perpetrates a situation that is intolerable with respect to renters.

I'm really disappointed about what this government is doing, because it has made all sorts of promises to those people who rent. It has failed once again to deliver. I suspect that by the time we get to an election campaign, they'll make a whole rash of fresh promises. Again, if behaviour has anything to do with it, the government will be unwilling to follow through on those promises. Promises are

[ Page 6869 ]

cheap; action is tough. Action is lacking by this government.

I look forward to the day when, after the next election, we're on the other side of this House and we deliver on these things. I'll tell you, we'll deliver on these things to the tenants of this province.

MR. BARNES: I just want to join my colleagues in reflecting on the government's record as far as housing is concerned, and to concur with their criticisms. They are really criticisms of the cynicism of the government rather than the objective. In other words, any time you can help renters, especially in this province, we applaud that. We have nothing to begrudge about helping any tenant at any time, because the situation is pretty shameful. But this government's motives are questionable. It's well known that they have I say they, meaning certain members, at least, on the government side who have time after time said that the government does not get involved in the marketplace as far as housing is concerned, it's up to the free market. What we're seeing today is an excursion away from that free enterprise principle to give the impression that the government is trying to help renters. I find it difficult to get very excited about anything this government does when it comes to this subject.

My colleagues have talked about the universality of homeowner grants, and have said that if the government were sincere, why didn't it do the same thing with this tax credit, which in fact seems to be useful only for those people who are working and have a disposable income — and even at that, it's a minuscule amount. Nonetheless, it is a benefit to those who fortunately are able to benefit from it.

Let's look at the record. Let's go back a bit and see just what this government's intentions really are. There was at one time an agency in place that was constructing housing. I'm sure that the Speaker will recall that under the socialist government, we were attempting to create housing and to create some competition in the marketplace, so that affordable and decent housing would be available. But today we no longer have any effort whatsoever on the part of the government to provide social housing, affordable housing, decent housing, or any kind of mechanism to ensure that the free enterprise market produces social housing. It is a situation that boggles the mind, when you consider the initiatives on the part of the government.

The Residential Property Tax Increase Limitation Act, Bill 17, was introduced not long ago when the government saw fit to assist homeowners — not renters — whose property values increased so fast that the government was concerned that they might not be able to afford to pay their taxes. This was a real concern for homeowners or property owners; nothing for renters. We're talking about people who own property.

How would you like, Mr. Speaker, to have a piece of property go up 200 percent or 300 percent in a few months or a year and have the government say: "We don't really want to have you paying your taxes on that increased value, because you probably can't afford it. So we're going to cap the taxes to give you a break." That's the kind of intervention this government is really best at.

Still, the fundamental problem is that housing has been allowed to be a commodity available to the highest bidder. On the free market, it is sold by bid to people who happen to have the ability to participate. We're finding that more and more people are unable to participate or to acquire that first home. We talk a lot in this House about acquiring that first home and having the security of a place to stay and a decent, affordable roof over your head that doesn't require you to spend more than 25 percent or 30 percent of your income for it, so that you enjoy some of the amenities of a free and democratic society. But that gap is spreading wider by the day. In fact, it's such a tragedy that it's difficult to know how to talk about it.

We all know that land values are going up every day, especially in the core of the city. In populated areas, housing sites are becoming less and less available and more and more expensive. As this escalates and builds, more and more people who developed and settled in those communities and considered themselves to be indigenous to the area are having to move farther and farther away from places they have always called home. There is no strategy in place by the government to do anything about this. To the government this is just evolution; this is the way it is. If you've got the money and you can afford it, you can live in these high-priced places. If you can't afford it, too bad; let someone else take your place.

[10:45]

This has a destabilizing effect on any community that hopes to have traditions and customs that they have lived by and raised their children under — circumstances that are essential to the integrity of any community. But these things are no longer valid or relevant, it seems. So the issue of housing shouldn't be addressed in such a cynical way.

I'm not opposed to tax credits to renters who have jobs and can benefit as a result of the government's initiative — that's fine. But if we're talking about 15 percent or 20 percent, at the most, of people who are renting.... We know that there are many people who don't even have disposable incomes, who certainly don't have taxable incomes or who are on fixed incomes. Seniors, of course, have been mentioned. There are many people on social assistance who have to spend not only their shelter allowance but part of their food allowance and the other portion of their social assistance allowance in order to pay for their rent. We know there are long lineups. Your B.C. Housing Management Commission, for instance, has hundreds of people lined up, and has had for years, waiting for affordable accommodation. What is the government doing about that? What are you doing for the mental patients who are coming out of Riverview who are in need of social housing or affordable housing as a result of your deinstitutionalization program? We need several hundred houses

[ Page 6870 ]

there. There's nothing to indicate that the government is even aware or concerned about these things.

Sure we're cynical on this side of the House about the government's motives. We don't believe that the government is sincere. The situation has reached crisis proportions and it continues to escalate. But I certainly have no objections to helping any renter.

Renters are constantly under pressure because of the attitude of this government. You don't believe in rent review. You don't believe in a mediating system that we had when the rentalsman was in place to protect both the interests of the renter and the interests of the property owner.

There is some kind of a double standard, On the one hand the government says: "The best way to deal with the housing situation is to leave it up to supply and demand. Those who can afford to pay will, and those who cannot will just have to make it the best way they can." That system just isn't good enough in a society such as ours, where people spend their time working hard, accepting the salaries that are available to them, being dictated to in most cases by landlords who have the final say, who have the licence to construct and to set limits as they see fit, with no responsibility for the consequences or the damages they may be causing for their tenants. We have a long way to go. We're nowhere near where we should be in terms of being fair to citizens in this province.

The housing situation is deplorable now. It has been deplorable for a long time, and it is getting worse. I'm sure that everyone in this House knows it. I can commend the government for recognizing that there is such a thing as a problem for some renters. What it is attempting to do with this piece of legislation indicates that it is doing something, but it's not enough. It is playing a little game, perhaps, because there are those who are going to perceive this as an initiative by the government to help, to try and relieve the pressure for those renters who are in need of assistance up to, say, $500 a year — which isn't a tremendous amount of money, but nonetheless it is a benefit when you're living a marginal existence.

Let's applaud those few people who are going to benefit, that 15 to 20 percent. But as my colleagues have pointed out before, about 80 percent of the renters do not benefit. There are nearly 300,000 households in this province involved in the rental market; 80 percent of those will not benefit, so we've got a long ways to go.

MR. SPEAKER: Pursuant to standing orders, I advise the House that the minister closes debate.

HON. MR. COUVELIER: I wanted to allow all members opposite the opportunity to repeat themselves, and by that process hopefully end the discussion a little bit sooner than otherwise. It seems to have been successful.

I want to notify the members that there are some housekeeping amendments to come forward with this bill which we'll introduce during the committee stage.

It's been suggested by at least one critic opposite that this bill is some sort of a cynical attempt to curry favour with the electorate, and yet the vast majority of others described it as tragically failing to meet the needs the people. I'm struck by the contradiction in those two allegations. It seems to me that if we're truly cynically attempting to curry favour, then by your terms at least we might have had a differently designed program. That observation is something that often occurs to me as I listen to debates in this House; that is to say, the almost philosophically opposed arguments that we hear from the desperate members opposite attempting to fill their allotted time. I can see that that's a difficult thing to do sometimes when you don't have much to say.

It's been suggested that this idea of a sunset clause is an inappropriate response to the needs of the moment. I gather from those who made the claim that they were unaware of the well-documented evidence that housing crises escalate as the economy improves, and that as the economy moves through its recessionary cycle, the housing pressures ease. There's a very direct relationship to those two events, and given the fact that the provincial economy is currently enjoying a period of invigoration — not in any small measure attributable to the efforts of this government — we have a housing crisis. It's our view that the issue is serious and deserves attention. That's why we designed a housing action program which attempts to target the need over a wide range of concerns.

By virtue of our attempting to fill that wide range of concerns, we do anticipate a decreasing need for this kind of artificially tax-driven assistance to renters. The need will decline as the success of the other facets of our program kick in: the provision of additional rental housing units; the extra assistance for municipalities to prompt them to consider higher zoning; more efficient land use; all of those issues embraced in the totality of our housing action program.

The issue of rent controls has been raised by a few speakers. Here again I question whether the members opposite have done the homework necessary if we are going to intelligently discuss options to deal with housing. There is no evidence whatsoever that rent controls are successful. As a matter of fact, even economists from Sweden — a country frequently cited by members opposite as having the ultimate level of knowledge on any given economic subject — will tell you that rent controls are an ineffective way to deal with the need to provide reasonably priced rental housing.

Some of the critics ignored the fact that we have, with this budget, substantially....

MR. BARNES: On a point of order, I am sorry to have to interrupt the minister, but the minister is misrepresenting this side of the House. I don't believe that a member has referred to controls. We have talked about rent review, and there is a big difference.

[ Page 6871 ]

MR. SPEAKER: That's not a point of order. It's just part of the debate.

HON. MR. COUVELIER: The hon. member opposite wasn't present for all of these discussions and therefore wasn't privy to some of the comments made by his colleagues. I recognize that level of lack of knowledge and am quite happy to hear his comment. I recognize he didn't use the phrase "rent controls"; others did.

Dealing with the other aspects of the budget that are targeted to need, this budget envisages an increase in shelter allowances for GAIN recipients and also significantly increases SAFER assistance for the elderly. Some members have tried to allege that seniors' needs were ignored. The exact opposite is true: we have increased SAFER assistance by a very large percentage.

I heard other comments dealing with the issue of poverty levels. Every time I hear that phrase I wonder to myself which particular poverty level figure we are using. I think there are about 103 extant today. When people like to wax eloquent about them I think it's important they define the term. That definition was absent from the comments opposite. Once again I put it down to more rhetoric than substance.

The housing action plan is targeted to need. It varies, I think appropriately, depending on the degree of need. That is a responsible way to spend public money and at the same time remain sensitive to the needs of those who genuinely need help. This program clearly does that.

One aspect of the housing action plan is targeted to increasing the rental supply. We will get into that, I am sure, in later debate. But by virtue of our efforts to increase supply, by virtue of our efforts to motivate municipalities to allow higher zoning, by virtue of the increases in SAFER allotments to seniors and improved shelter allowances for GAIN recipients, we have addressed that narrow band of the population who need extra help. In its totality we believe this is one of the most imaginative housing programs in the country, and we are very proud of it.

I gather that some members opposite have an affinity to the thought that we should have some kind of universal rental assistance program. I heard that phrase repeated often. I suppose if ever the public needed a clear indication of the philosophical differences between the socialists of the House and those of us on the free enterprise side, it is that reference. This party believes in home-ownership; this party would like nothing better than to see every single British Columbian owning his own home. Most of our programs are targeted to that objective. I gather the members opposite, by virtue of their attraction to the thought of some universal rental program, would much prefer to keep people as serfs of government, dependent upon government for largesse and handouts and therefore less self-reliant and less fulfilled as human beings. That comment has been exhibited by many of the criticisms the members opposite have embarked on over the last few hours on this subject. The record will speak for itself, I believe.

I won't repeat any of the other comments. I think I captured and responded to those which appeared to have the highest repetitive interest for the members opposite.

I move that the bill be read a second time.

[11:00]

Motion approved.

Bill 7, Income Tax Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

LAND TAX DEFERMENT
AMENDMENT ACT, 1989

HON. MR. COUVELIER: The purpose of this bill is to reduce the age at which older people may qualify to defer their property taxes from 65 to 60 years of age. This change is in response to the desire of many older people to be able to stay in their homes of many years in spite of the fact that they are now on fixed or reduced incomes. The government recognizes that a number of people are taking advantage of earlier retirement and feels that a reduction of the age of eligibility is appropriate at this time. Through the land tax deferment program, qualifying homeowners can defer any or all of their property taxes at a favourable interest rate until they finally dispose of their properties.

I move the bill now be read a second time.

MR. CLARK: I'm pleased to rise and support this bill. As a matter of fact, it's something that I certainly won't take any credit for, but I made this very suggestion to the municipal taxation review committee in Vancouver. It is one we've long supported.

I might add that it is of course an amendment to a bill that was brought in in 1974 by that NDP government from 1972 to 1975. In fact, it's kind of interesting that members opposite like people to forget the last 15 years and to remember the myths that they've propagated about '72 to '75. I can't help but spend just a little bit of time reviewing what happened when the NDP government of the day brought in the property tax deferment for those who at that time were 65 and older. It was the Social Credit members who fought, in the most strident way possible, that NDP initiative which the government now lauds and in fact amends to reduce the age to 60.

I look back at May 27, 1974. I don't know any of these people; I was in high school at the time. But I remember a few things from that period, and one of them is the strident attack on this piece of legislation. What did Mr. Ed Smith, North Peace River, have to say about this bill, which is exactly the same one that the government is lauding today?

[ Page 6872 ]

"...this bill will not do anything on a long-term basis for these people. If you're really interested in their plight...then grant these people an exemption from a tax, not a deferral at 8 percent compound interest that only provides for them a first mortgage on their home at the time of life when they should not even have to consider mortgages anymore."

Now listen to this, Mr. Speaker. This is the kind of logic we saw from that opposition at the time:

"It's a tool, in my opinion, in the hands of the government to facilitate the takeover of private land in this province. That's exactly what this is going to do."

Mr. Smith, the member for North Peace River, said this was a tool in the hands of the government to confiscate private lands. That's what it was all about.

Remember Mr. McClelland, who went on to become minister for many years in this House? He said at the time: "I can't support the concept or the principle of this bill either." This is the exact same principle that we're dealing with right now. "I just want to make the point again that this bill is really knee-jerk legislation...." He went on to say the government is "ripping off the elderly citizens of this province again."

What did Don Phillips say about the legislation that would provide some relief for those over 65?

"I'll tell you, Mr. Speaker, this is our position. If these people can't pay their taxes, the taxes should be forgiven and not deferred and created as a debt against those elderly people — people who have worked and strived and saved and built up this province and built up this nation, who have worked so that they could have clear title to their residences. Now this...Minister of Finance wants to put them back in debt again. That certainly isn't going to be the position of this government."

When Social Credit comes to power. Then he said: "I'll tell you something else, Mr. Speaker. We'll go to the people in an election tomorrow on this issue of whether we have complete tax deferment or whether it becomes a debt." That was the position of the opposition at the time. He even suggested an election on the issue because the NDP was going to confiscate private land.

What did Mr. Bennett, the leader, say about this? "One has the basic exemption, a policy that British Columbia has had for years with the homeowner grant." The other option about deferring property taxes, he says, "is, in fact, to sweep the problem under the rug and lend the taxpayers' money and let the blow fall on them sometime in the future or upon their heirs when they die."

MR. LOVICK: Their little hoary heads.

MR. CLARK: That's right, Mr. Member. He went on:

"As a result they are not only reluctant but are deathly afraid of facing change in the time of their life when they do not have the security of youth, the security of good health. Their home becomes more than physically important; it becomes emotionally important to them.

"Yet just deferring their taxes and putting aside their problems for a few years isn't going to solve the problem. They'd be more secure emotionally and more secure physically if they knew that the people were really concerned about them in the way of a larger basic exemption — an exemption which was meaningful and which recognizes a contribution to society and to the province through the many years that they have lived here."

In answer to the remarks from this side of the House on the last bill, the minister went on to talk about hypocrisy. They can give lessons in hypocrisy, very clearly, because they fought this legislation. They fought it in the most strident manner possible. They suggested that the government was going to confiscate seniors' homes, that it was a way of removing private property. Now we see them come in here and praise the principle of the legislation that the NDP brought in, and extend it to 60, something that this side of the House has advocated for many months now.

While I and members of this side of the House will be supporting this bill, it's interesting to reflect on the period of government which was so productive in British Columbia and which pioneered this deferment. We will support this modest improvement in spite of the fact that the government is not ideologically consistent and, of course, never has been.

MS. A. HAGEN: My colleague from Vancouver East has been talking about the first introduction of legislation relating to tax deferment in the '72-75 period. He's noted the position of the Social Credit members of the opposition at that time. The thesis of my remarks today has to do with what older people have had to contend with for 15 more years of Social Credit. One of the reasons why — although I, too, support this program — is that it is a program that older people have not taken up as much as members on both sides of this House would like.

At the present time in my riding, where there are 7,000 older people — many in their own homes and many, I would think, prime candidates for the use of this particular legislation — there are all of 20 people who defer their taxes. About ten applications a year are taken out. Out of those applications, only about 20 percent of the people apply.

I've long wondered what the reasons for that are. I've talked to older people about those reasons, and they have to do with their concerns about financial security over a period of time. That financial security relates to two things: first, to the amount of tax that they anticipate they are going to have to pay over a number of years. We all know that taxes have been going up, because this government has been shifting taxes onto the local taxpayer. Nowhere is that more evident than in respect to school taxes. In fact, this is the first year in my memory where municipal taxes have not shown a similar shift.

I'll give a small kudos to the Minister of Finance and Corporate Relations and the government in respect to my own riding of New Westminster. After years of lobbying, we now have a more fair formula for cost-sharing, for instance, of health costs and police costs. But it's taken almost 15 years of lobbying for that change to occur. It has lowered taxes for the

[ Page 6873 ]

municipal portion in this year. Good news, but in the midst of far more incidents where taxes have been shifted.

The second reason people are uncertain is because of this government's constant policy to add to the costs of old age through user fees, increased medical service premiums and the threat of more to come. When you have that uncertainty and those additional costs on fixed and low incomes, when you have only one source of capital, if you like, or one source of security — which for many people in my riding and other ridings is their home — then there is a reluctance to defer tax. So when we are looking at this excellent measure that is a way in which people can make decisions year by year as their financial circumstances dictate, we shouldn't forget that other government policies have an effect on whether people decide to accept that deferment.

It may be interesting to look at who does defer their taxes. My guess is that it's much more likely to be affluent people who can make money on this deferment. It's an ironic aspect of it, but because the interest rate is favourable — at the present time it's 9¾ percent — a person who actually wanted to make a little money by deferring their taxes could do so. They can buy a GIC today for 12 percent and make somewhere between 2 percent and 2¼ percent in additional earnings.

The person this is really designed to help — the single dweller in a home, who is very often a woman with no pension or with little left from a spouse's pension in survivor's benefits — if anything, is less secure in making the choice to defer taxes, because she is not sure that she's not putting herself into debt that will leave her vulnerable 25 or 30 years later.

So I would urge the Minister of Finance, in looking at this measure, which we will be supporting, to recognize that it has to be in tandem with other good measures this government would introduce in respect to older people and their financial security.

I'm happy the Minister of Health (Hon. Mr. Dueck) is in the House today. I hope he recognizes that in his pursuit of user fees by older people — something that I know philosophically he's still very committed to introduce while he is Minister of Health — he is in fact attacking the sense of financial security that seniors must have in order to plan for futures that may now encompass 40 years.

We're talking about this tax deferment being available to a person at 60. That person now has to financially plan not for 10 years or 15 years — in terms of the actuarial tables about how long that person may be with us in this world — but for 30 years or 40 years. They need to know that government is going to be acting in a reasonable and responsible way, so that they can plan for that financial security.

We'll be supporting the measure. I'm delighted that it's reduced to 60. It's one of the few measures that does help the early retiree, who is in effect retired without the full benefits that accrue when one becomes 65. But let's put it into the context of financial planning and secure planning of services for older people, so that when they use this deferment, they can use it knowing that it will not come back to haunt them later on because of other government measures that are going to attack their hard-earned resources — much of it invested in their home.

[11:15]

MR. LOVICK: I also rise to commend this particular measure, and I shall be brief indeed. We think it's an excellent one.

But I can't resist posing a question directly to the Minister of Finance because he, you recall, is the person who loves to make claims about consistency. One of his favourite phrases, of course, is that you can't have it both ways. He loves to point out what he perceives to be contradictions coming from this side of the House. What I would like the minister to do, then, in closing this debate, is to explain in some detail — if he will and if he's able — this miraculous conversion.

As my colleague from Vancouver East has pointed out, not too very many years ago there was a profound philosophical aversion to this kind of measure. It was perceived to be incompatible with the marketplace; it was perceived to be a threat somehow to the precious rights and freedoms of senior citizens in our society. Those statements, you recall, were made with some passion, Mr. Minister, as my colleague has demonstrated. The obvious question, surely, to any fair-minded individual is: what's happened? Is it the case that Social Credit has done a philosophical about-face, a flip-flop, a 180-degree turn? How has this come to be?

I would like the minister to allay our fears that his government is becoming merely pragmatic and that it is perhaps only responding to the perceived and growing political power of seniors in this community. Therefore it has decided that in order to keep that particular segment of the population onside, as it were, it had to take some rather drastic measures, even to the point of repudiating and renouncing what it used to stand for and suggested it would stand for to the last drop of its blood. I am hoping that the minister, in closing the debate, will share with us the reasons for this magnificent conversion, because we certainly want to applaud them on having the wisdom and the common sense to make that conversion.

MR. SPEAKER: Pursuant to standing orders, I advise the House that the minister closes debate.

HON. MR. COUVELIER: I am pleased to add a few comments to the ones we've already heard on this bill, Mr. Speaker.

First of all, I'm very pleased to hear the first speaker say that he wasn't going to take any credit for the bill or the initiative. That's so untypical of members opposite, who seem to want to run to the press and take credit for every good initiative that's undertaken, and search back through their vague memories to try and justify a claim that it was their

[ Page 6874 ]

idea first. It's nice to run across a member who's honest and forthright in that respect.

Mention was made of the issue of the possibility of providing larger exemptions, in terms of property taxation, in the first place. Of course, the answer is quite clearly that we have offered larger exemptions and provided them since we've taken office.

Another speaker made reference to the low rate and therefore the advantageous use of this facility by any senior citizen who qualifies. Quite clearly that comment is correct. We deliberately set this rate at 9.75 percent as an enticement for take-up to the program. On the other hand, the first speaker was telling us what a marvellous program this was. The second speaker was saying that the take-up wasn't so good, and made me wonder whether the program was all that good after all. So I became a little bit confused by those two messages.

Lastly, we've been asked to comment about the position taken by the Social Credit Party in opposition back in the early seventies. The answer is quite simple. The Social Credit members of that day couldn't wait to get to the polls. They were willing to seek any device, because they were convinced that the mismanagement by the socialists of the affairs of this government almost ensured that during an election campaign the Social Credit Party would emerge victorious — the frailty of human nature, Mr. Speaker, grasping at any straw in order to put the test to the voter — and as they properly suspected, the mismanagement of public affairs during the relatively brief, thankfully, term of the socialists in managing this province....

We have been able to take some good ideas and build them. Conversely, we've added quite a few enticements to the program to better service the needs of all British Columbians. I'm very proud of that record. This government will continue to provide that kind of leadership as we march forward into the future and bigger and better things.

In any event, Mr. Speaker, I move that the bill now be read a second time.

Motion approved.

Bill 8, Land Tax Deferment Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: Mr. Speaker, I call second reading of Bill 9.

MOTOR FUEL TAX AMENDMENT ACT, 1989

HON. MR. COUVELIER: This bill contains four amendments.

The first amendment changes the method of calculating the quarterly motor fuel rate tax adjustments. Currently the tax rate adjustments are based on the price of gasoline in Vancouver during the most recent available month prior to each adjustment. With this amendment, the tax rate adjustments will now be calculated on the basis of the average price during the most recent three-month period. This amendment will reduce the large quarterly tax-rate fluctuations which occurred under the former system and should help to stabilize revenue from this important source.

The second amendment expands the types of mining industry vehicles which may use coloured fuel off-highway to parallel the authorized uses of coloured fuel in the logging industry. This amendment ensures equitable treatment between these two important industries.

The third amendment ensures that tax is remitted on all taxable motor fuels sold in British Columbia. Currently wholesale dealers collect tax from retail dealers and remit it to the provincial government. Recently, however, some retail dealers have been importing fuels from American suppliers and under existing legislation could not be required to remit the tax. With this amendment, where a retail dealer does not remit tax to a wholesale dealer, the retail dealer will be required to remit the tax directly to the government.

The fourth amendment clarifies that fuel brought into the province in the supply tank of a locomotive is taxable under the act. This clarifies longstanding administrative practice in all provinces to prorate locomotive fuel tax based on fuel use in a province. I move the bill now be read a second time.

MR. CLARK: We've no real problems. It appears to be a housekeeping bill. We'll have a few questions to go through in on committee stage. I was struck by the second amendment, when the minister talked about making it more equitable. It strikes me two ways. If the logging industry is getting a break with respect to coloured fuel and the mining industry isn't, there are two ways to make it equitable: you could simply remove the break for the logging industry, or you could do what you've done in this bill which is extend the break for the mining industry.

I will canvass with the minister in committee stage what the rationale is for that. It seems a rather modest tax break. I'm not going to belabour the point, but it does seem to me to beg the question as to why they deserve any break at all for crummies, for example, which seem to be on- and off-road vehicles.

With that, we are prepared to support this bill in second reading.

MR. SPEAKER: Pursuant to standing orders, I advise the House that the minister closes debate.

HON. MR. COUVELIER: That's an intriguing thought. Here we've had comments all along, for the last few hours, dealing with devices to improve or expand expenditures. Now we have one to reduce revenues. That strikes me as rather a contradiction.

Secondly, I'm surprised at the source of this suggestion, given the fact that this particular member seems to have already been on the record as proposing increased corporate tax. The suggestion just made seems to contradict earlier statements. However, we

[ Page 6875 ]

will enjoy a discussion of that in committee. I therefore move the bill now be read a second time.

Motion approved.

Bill 9, Motor Fuel Tax Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. DUECK: I call second reading of Bill 10, Mr. Speaker.

PROPERTY PURCHASE TAX
AMENDMENT ACT, 1989

HON. MR. COUVELIER: This bill has two purposes. First, as part of the government's provincial housing action plan, Bill 10 introduces a major tax relief program for British Columbian home-buyers who have to finance more than 75 percent of the purchase price. Second, the bill introduces a number of administrative measures, the most important of which is to tighten the rules relating to value-splitting which has allowed certain property purchasers to avoid the 2 percent rate of tax on properties valued above $200,000.

The property purchase tax relief program is targeted to home-buyers of moderately priced homes valued at $150,000 or less, who require registered financing for amounts in excess of 75 percent of the fair market value of the property. Tax relief is provided to these home-buyers on a sliding scale to allow greater tax reductions for buyers with lower down payments. For example, under this program, a purchaser of a $150,000 home with a 90 percent mortgage will have the property purchase tax otherwise payable reduced by $900 or 60 percent. A purchaser of a $150,000 home with an 85 percent mortgage will have property purchase tax reduced by $600 or 40 percent.

This program is available to all eligible home-buyers who register their purchases on or after March 31, 1989. To ensure that they have ample opportunity to apply for the relief, provision is made to allow applications for relief for up to one year after the date of registration of the purchase.

The property purchase tax relief program is generous, equitable and responsible. It is generous in that it is expected to benefit in excess of 25,000 British Columbians or about 15 percent of all home purchasers in the coming year. It is equitable because it provides relief on a proportional basis to all homebuyers with low down payments, not just first-time home-buyers. It is responsible because it effectively targets relief in the expenditure of taxpayers' dollars to home-buyers most in need.

I would like to take this opportunity to address two points that have been raised since this program was introduced in the budget speech. First, a suggestion has been made that this relief program in some way encourages home-buyers to incur larger debts than would otherwise be the case. Nothing could be further from the truth.

This program recognizes that the purchase of a home is generally the largest purchase an individual will ever make, and that the assumption of debt is simply unavoidable for most purchasers. Home-buyers know, however, as does this government, that debt must be repaid with interest. This program bases relief on the proportion of debt incurred in recognition of the fact that only home-buyers who have no alternative but to incur large debt will do so, and that these are the home-buyers most in need of relief. Indeed, a home-buyer who obtains more financing than necessary simply to increase property purchase tax relief will quickly discover that the additional interest costs on that debt more than offset the tax benefit.

The question has also been asked why a first-time home-buyer exemption was not introduced. This option was examined very carefully and extensively, and it was rejected because it would have been unfair. Such a program would have provided relief to many British Columbians who are not in need of relief, and no relief to other home-buyers in difficult financial situations. In addition, because of the virtual impossibility of determining whether immigrants from other provinces and countries have ever previously owned a home, relief would have been available to them on subsequent home purchases, but not to British Columbians. This would have been unfair and fiscally irresponsible.

Mr. Speaker, the high ratio financing tax relief program is, as I have said, a generous, equitable and responsible program which clearly demonstrates the government's ongoing commitment to supporting and encouraging home ownership in British Columbia.

The most significant administrative measure introduced in this bill removes the ability of related individuals to reduce tax payable on property purchases valued in excess of $200,000 by purchasing partial interest in a property. This amendment applies only to purchasers using this technique solely to avoid the 2 percent rate of tax. Where the administrator is satisfied that related individuals purchase partial interest in a property for reasons other than reducing tax payable, a provision is provided to allow for a refund of overpaid tax. This amendment will protect both the property purchase tax base and the progressive structure of the tax rate.

[11:30]

The remaining administrative measures in the bill include transferring definitions from section 5 to section 1 so that they will apply to the whole act, adding a definition of "child" which is consistent with a definition of "step-parent"; providing an exemption for transfers to the Crown when the land transferred is within a municipality and is to be used for highway or park purposes; clarifying that agreements for sale are taxable whether or not they include a right to occupy a property; clarifying that trustees holding land under a trust agreement must be registered in order to qualify for exemption;

[ Page 6876 ]

clarifying that transfers pursuant to written separation agreements under the Family Relations Act are exempt only when the properties transferred are registered in the names of the spouses or former spouses; removing the exemption for transfers which change a tenancy in common to a joint tenancy; clarifying the exemptions relating to subdivision; clarifying the definitions of "family farm"; and repealing the provisions which allow the administrator to accept security for the payment of tax.

These amendments demonstrate the government's commitment to encouraging home-ownership, protecting the property purchase tax base and reducing taxpayer uncertainty. I move that the bill now be read a second time.

MS. MARZARI: I want to talk about generosity. The minister has referred to what a generous bill this is; let's talk about generosity for a few minutes. In the property purchase tax, the government bought for itself a goose that lays a golden egg. By turning to every property purchaser in this province and saying, "We're taking 1 percent off the top," the province is making $200 million a year for itself.

The government was cautioned by the opposition when it first introduced the goose and the golden egg that this was going to hurt people. Primarily, it was going to hurt the small homebuyer, the first-time homebuyer. It was going to hurt people who purchase properties all over this province to live in — residences. The government went ahead anyway. The goose was laying the golden egg, the $200 million was rolling through the door, and the government wasn't going to heed any pleas from any quarter.

Here we are a few years later, and the government is talking about generosity. The government that wanted to get off the backs of the people, but that's been reaching into their pockets every time they buy a house, is now talking about generosity. I'm saying that this is hardly a generous offer, Mr. Minister. It is going to cost about $12 million a year out of that $200 million golden egg. You've admitted yourself that only 15 percent of people who purchase properties are going to get any relief from this act whatsoever. How have those people been selected? Oh, so generously! Oh, so graciously! Have they been selected because they're buying a home for the first time? No, because the ceilings that are imposed upon this generous offer stop at $150,000 value. In other words, if I lived somewhere else other than in the lower regional mainland, beyond Pitt Meadows, beyond even Langley, perhaps up towards Hope, I might have some hope of recouping maybe $600 on your property purchase tax. My tax credit at that point, through you, Mr. Speaker, is such a pittance. It is not a generous offer to first-time homeowners or to homeowners at all.

Did you include even for a moment the thought that this little rebate, this tiny gesture, this small, generous offer, this graciously offered pittance would help the housing crisis in Vancouver? Not for a moment did you think that. Not for a moment did you use fiscal and financial planning to assist people that live in the largest urban area in the province. Not for a moment did you think of the people who live in the whole Greater Vancouver Regional District when you thought up this pittance — this generous offer, excuse me. At $150,000 one has to live pretty much outside of any urban area.

We're dealing with perhaps 15,000 families that might be moving and purchasing this year, and even they are going to have difficulties because they'll be paying the remainder. Your generous offer doesn't give them full value, doesn't rebate the full 1 percent. It rebates some tortuous formula: 4 percent of the differential between their mortgage and their market value. In other words, if they buy a $140,000 house and they get a mortgage for $105,000, the difference between that is calculated at 4 percent, and you come up with maybe $600. They'll still be paying the remaining $900 on that property purchase tax. That's a nice slice out of somebody's pocket for a province that said they were getting off the backs of the people. Your hand is still in their pocket, right down to the small change, the jingles and the jangles, the nickels and dimes, Mr. Minister.

You haven't used it as a technique of curtailing or dealing with the housing crisis in the lower regional mainland. Your techniques for dealing with that crisis have been very clumsy thus far. I will commend you for reducing the age for tax deferral, but as we all know, the tax-capping mechanism was indeed a clumsy mechanism, an interim measure, not an effective tool for financial planning or housing planning.

Where is this generous offer? So generous and gracious is your offer that not only do you offend urban dwellers, anybody who pays more than $150,000 for a house, but you get right into their pockets even further. You look at the urban dwellers and you say: "Those of you 2 percenters paying over $200,000 for a house, those swimming in gravy, those rich people, those city slickers who live in town and vote NDP, we're going to get you, because you've become not married couples, not families, but value-splitters." Married couples are now called value-splitters, and you're going to make sure that those who live in joint tenancy don't get any benefits out of this program. You're going to make sure that those who signed a marriage contract or stood in front of a minister don't get their rebate on this. You're going to make sure they pay the full 2 percent. They're not going to get their lousy $600. They're going to pay the full 2 percent — anybody living in an urban area.

You haven't finished yet. You've finished with the married people in the urban centres. Then you go to the farmer and you redefine, for the purposes of this act, the family farm. I never thought I'd see the family farm redefined for purposes of the golden goose, but here it is. The family farm corporation isn't eligible for this deduction, for this tiny pittance, for this generous offer, unless it's farming the land in question. Are you going to send tax inspectors around to see if there are two rows of cauliflower, maybe some dahlias? Is that a farm? No, it's not edible. Edible flowers: do they count as family farming? Anyway, these farmers have got to be

[ Page 6877 ]

farming the land. I grow gooseberries and strawberries. I'm in joint tenancy. If I was buying my house this year, maybe I'd qualify. But no, I'd be a value splitter, wouldn't I, even though I'm farming.

Mr. Minister, you offend. You offend people who live in the homes that they buy. Who don't you offend? You 'don't offend 15,000 families, and all power to them. They'll get their $600, and they will probably be grateful for it, because they know about the golden goose. They probably think it is not a bad idea to pay $900 to the government to pay their way.

Who don't you offend? You don't offend the corporations, Mr. Minister. We told you about the corporations when this bill was first introduced. Every piece of land in downtown Vancouver and every piece of commercial land in New Westminster and in this province is undoubtedly owned by companies — very rarely by individuals. The corporate loophole here is large enough to sail a yacht through.

The Expo lands. We have asked time and time again in the House: did they pay their 2 percent? Are they getting a $600 credit here? Did they pay taxes in the first place? Or did they pay a grant in lieu of taxes? We are not quite sure.

Your $200 million golden egg.... If you are really looking at it, and if you really want to use this as a revenue collector, include the corporations. If you really want this to be a property purchase tax, include the corporations that don't sell property but sell shares. Don't call it a property purchase tax if you don't include the corporations.

Mr. Minister, the people in Vancouver aren't thrilled with this generous offer that you are making. In fact, a lot of people in this province will have a great deal to say about your golden goose.

MR. BARLEE: Mr. Speaker, despite the posturing of the minister, it is still essentially a tax. It's essentially a tax on people who can't afford it.

I come from the South Okanagan. That was traditionally known as bedrock Social Credit country. It was the heartland. I was brought up in Kelowna and in the South Okanagan, and the Social Credit Party could always count on the Okanagan seats.

I knew W.A.C. Bennett; I knew the old man quite well. I'll tell you something about it. I didn't always agree with him, but he was a populist. He always had his finger on the pulse. That's why he was very successful. When I look at this, I think of what would have happened. He would have been one of the first guys to get up on the floor if we had introduced this, and he would have cried: "Shame, shame."

Essentially what it does, no matter how it is disguised, is penalize first-time buyers. It doesn't just penalize first-time buyers, it penalizes people who have been operating on a very tight budget, who may have saved up for ten or 15 years, and now that extra 1 percent just makes it a little too much. It's a very difficult thing, and any additional tax is still a tax.

When you look at the tax structure in the last three years, there have been slightly over 500 tax and fee increases, and this is just another. This particular disguised tax increase with a bit back to people is really not much of a benefit and does precious little to alleviate the burden on first-time buyers.

MR. PERRY: I'm sorry to give the Minister of Finance any more troubles than he's faced in the last few days, but I just want to make some very brief comments about this bill.

Being a newcomer here, I'm still having great difficulty wrestling with some of the philosophical contradictions that face us every day. I know the minister has developed a unique technique to deal with contradictions, for which he won the award from the member for Esquimalt-Port Renfrew (Mr. Sihota) recently. But I'm still having trouble.

I'd like to quote from the Attorney-General (Hon. S.D. Smith) on April 11, 1989, at page 6032 of Hansard. I'm quoting verbatim, and just so there will not be any misunderstandings with my friend the Attorney-General, I'd like to make it clear that I'm not quoting all of what he said. I hope that will establish a precedent, that we will quote each other carefully in future and only quote each other in context. I point out for the benefit of the House that I'm quoting verbatim, without editing, but only part of what he said, which is the part that confuses me.

Interjection.

MR. PERRY: Well, wait until you hear what he said: "Never allow people to aspire to have something of their own; instead, adopt elitism wherever you can find it, and above all else, don't let people own land." I want to say that it concerned me. I'm quoting the Attorney-General, but when I heard him say that, it concerned me too.

[11:45]

MR. LOVICK: Was he talking about us?

MR. PERRY: Well, it's confusing who he was talking about, really. I'm going to quote him: "..I am deeply concerned with the number of people across the House who have adopted that position" — I'm not sure if he meant across the House from me, or what — "and that the minister might be moved by those arguments." He said: "I feel compelled to stand in my place and urge him" — the minister — "not to be moved by those arguments, because they are fundamentally wrong. We are not a society of tenants;" — he was in full form by this stage, foaming at the mouth — "we are a society of owners." This is the Attorney-General speaking, and I end the quotation there. For Hansard, who may be having difficulty figuring out what is quotation and what is not, the passage is verbatim at page 6032.

My problem with this is the philosophical inconsistency. I think the point that the Attorney-General was trying to make was that he does believe in private ownership, and he was trying to attribute to this side of the House a belief in the abolition of private ownership of land. Of course, it was patently ridiculous, and that's what confuses me in trying even to reread his remarks.

[ Page 6878 ]

MR. LOVICK: Even he was winking as he spoke.

MR. PERRY: I thought he was foaming, but I'm glad to hear he was winking.

The point I'm trying to make is that all of us I think agree that it's in the interests of our society for people to be able to own their own homes, and this is one of the traditional values that Canadians accept and respect.

The Attorney-General was mistaken on a point of fact when he said in the last sentence of the paragraph: "We are not a society of tenants; we are a society of owners." In the city I come from, Vancouver, in fact 60 percent of the residents are tenants and only 40 percent are owners. So if anything, in the community I represent, we are a society of tenants more than owners. That's a matter of fact, not necessarily intention.

But I have a problem with this contradiction between the philosophical belief that I think most of us on this side of the House share with the government members and the intention of the property purchase tax, which is to get those long, bony fingers into the pockets of the taxpayer and actually make home ownership more difficult. This may not strike older members of this House, who already own their own homes and bought them at a time when you could buy a house for $5,000 or $20,000 or even $50,000.

MR. LOVICK: As Falstaff said, "Make way for youth. Let them in."

MR. PERRY: I thank the hon. member for the introduction.

This tax is imposing a burden on new home-buyers. It may seem a pathetically small burden to the Minister of Finance, but an additional 1 percent or 2 percent actually makes a major difference to those people who are contemplating an enormous mortgage at today's high interest rates. It is a real problem for people, which is one reason that in the real estate industry people are trading houses, where they can, to avoid having a large capital price and to avoid the tax altogether, or to the extent possible.

I find this a problem, and I reiterate what the first member for Vancouver-Point Grey (Ms. Marzari) and others have said to the effect that in the part of the province we represent, which is, I guess, close to half of the population of British Columbia, there isn't any hope of finding reasonable accommodation in the range that the bill refers to of $150,000 or less.

"Morningside" on CBC yesterday morning had a survey of home values around Canada. A realtor was interviewed who suggested that even in the more remote parts of Coquitlam a standard house of the kind that any of the members in this House would have expected as their due and their right 20 or 30 years ago will now cost in excess of $300,000. In my riding I can't conceive that there is still any house available for $150,000. There just isn't. So that's the first point.

The second point I'd like to make is the problem of the loopholes with the property purchase tax and transfers of commercial property. In February the first and second members for Vancouver East (Mr. Williams and Mr. Clark) raised examples of some scandalous evasions of taxation on transfers of property by the very simple manoeuvre of selling shares in the company, rather than selling the property, and creating a shell company. I wrote at the time to the Minister of Finance....

MR. RICHMOND: On a point of order, the member may feel very passionate about the loopholes in the original bill, which have been canvassed in this House many times, but I would just point out to him that we're debating second reading of Bill 10, the Property Purchase Tax Amendment Act. It might be nice if he stuck to the bill at hand rather than debated a bill passed last year in this Legislature.

MR. BLENCOE: On a point of order, I think the House Leader misses the point. We're dealing with an amendment to the Property Purchase Tax Act. In second reading, the member knows that the principle of the bill is at stake; the principle is available for debate. I think canvassing the principle of a bill that we're amending is quite valid. I take exception to the House Leader's attempt to try to steer the member away from loopholes that are of concern to the citizens of the province.

MR. SPEAKER: I thank both hon. members for their input, but the rules of this House do state that the debate before the House is the bill before the House. The member should stick as closely as he can to Bill 10, the Property Purchase Tax Amendment Act.

MR. PERRY: I'm really trying to address the principle of the bill. I think the point I'm making is that Bill 10 does not correct the problems of the earlier bill. Therefore we on this side of the House may be saying in committee stage that the problem is that one class of citizens is treated differently from another in taxation. We have a tax that is already regressive: the amount of tax does not depend on the taxpayer's ability to pay, but only on where the taxpayer lives or would like to live.

We have the further inequity that the wealthiest people in our society, who are able to afford commercial property, transfer it and flip it for profits as much as.... I think the member for Vancouver East identified a profit of as much as $8 million or $14 million in one transfer over a period of a year or less. These people are avoiding a tax that the homeowners of the province have to pay. The public perceives this to be unfair.

Having made that point, I will appeal to the Minister of Finance and Corporate Relations to come forward with amendments to deal with this inequity. I realize that he recently sent me a very detailed letter justifying his earlier position that he knew in advance that these loopholes would exist, that he

[ Page 6879 ]

sanctions them and that he sees no problem with that kind of inequity. But I'm just going to plead with him on behalf of the public of B.C. to bring us a fair and equitable tax system, because that's what I think the people want.

MR. BLENCOE: I think it's quite clear as we canvass a number of these bills, including this one, that this side of the House is standing up for home-ownership, for young British Columbians wanting to get into their home, for fairness in legislation and taxation and for decency in renters' protection and security. We have another piece of legislation that tries to tinker with a very unpopular policy that this government introduced some time ago.

AN HON. MEMBER: We're all getting tinkled on.

MR. BLENCOE: Oh, that's right. The long hands of this Minister of Finance are pickpocketing more pockets than ever. We want young British Columbians....

HON. MR. RICHMOND: On a point of order, I find the term pickpocketing very offensive and unparliamentary and would ask the member to withdraw.

MR. BLENCOE: If they find that offensive, so be it. I withdraw that remark. But the fact is that over the last few years we have had all sorts of legislation and tax increases that are really hurting people wanting to establish themselves in decent accommodation.

When this Property Purchase Tax Amendment Act was introduced, it was virtually unanimously condemned by citizens, those in the industry and those who were trying to encourage people to buy homes. Here is the party that has tried to convince the people that they're in favour of private property ownership by young British Columbians, and here we have a major way that hurts young British Columbians owning their own homes — that British Columbian dream of one day owning one's own home. Now they're trying to convince....

Interjection.

MR. BLENCOE: Mr. Speaker, we've been in committee so long, you see. They're trying to convince everybody in British Columbia that they are now prepared to see the light. We know that what they're really doing is basically more image than substance. After the lunch break and the adjournment, this afternoon I will read into the record a letter from a constituent of mine who very eloquently depicts what this government is doing with this legislation, what it does to this person and how it hurts average young British Columbians trying to achieve the dream of owning their own home.

Mr. Blencoe moved adjournment of the debate.

Motion approved.

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 12 noon.