[ Page 9053 ]

CONTENTS

Routine Proceedings

Oral Questions

Aids film. Mr. Perry –– 9053

Secondary picketing. Mr. Mercier –– 9053

Rent increases. Ms. Cull –– 9053

Richmond School District referendum. Ms. Hagen –– 9054

Goods and services tax. Mr. Chalmers –– 9054

Highways improvement project signs. Mr. Lovick –– 9055

Tabling Documents –– 9055

Budget Address. Hon. Mr. Couvelier –– 9055

Mr. Clark –– 9061

Home Owner Grant Amendment Act, 1990 (Bill 14). Hon. Mr. Couvelier

Income Tax Amendment Act, 1990 (Bill 15). Hon. Mr. Couvelier

Sustainable Environment Fund Act (Bill 16). Hon. Mr. Couvelier

Transportation Capital Funding Act (Bill 17). Hon. Mr. Couvelier

Science and Technology Fund Act (Bill 18). Hon. Mr. Couvelier

Budget Measures Implementation Act, 1990 (Bill 19). Hon. Mr. Couvelier

Social Service Tax Amendment Act, 1990 (Bill 20). Hon. Mr. Couvelier

Property Purchase Tax Amendment Act, 1990 (Bill 21). Hon. Mr. Couvelier

Introduction and first reading –– 9062

The House met at 2:02 p.m.

Prayers.

MR. SPEAKER: Hon. members, ladies and gentlemen, under normal circumstances at this time of day, members rise in the House and introduce guests. Today, by agreement between both sides, there will be no introductions in the House. All the people joined here are therefore extended a special welcome by the members who regularly attend this chamber.

Oral Questions

AIDS FILM

MR. PERRY: I have a question for the Minister of Health. Yesterday the minister released an adulterated version of the ministry's notorious AIDS film. Can the minister explain why he rejected the advice of his own officials in his ministry and released a version featuring a key-chain instead of a condom, which appears to shift the exclusive responsibility for AIDS protection from both the young man and the young woman onto the woman alone?

HON. J. JANSEN: I find that question somewhat irresponsible coming from the member opposite, given his professional background and his knowledge in this area — or his lack of knowledge in the area. We have looked at the video in terms of providing more information on the concern about AIDS. I'm surprised that the member opposite would find this objectionable.

MR. PERRY: My professional background teaches me that it requires two individuals to transmit the AIDS virus. Will the minister answer the question: why did he reject his own officials' advice to leave in the scene of the young man retrieving a condom from his room and delete that so that it's exclusively the woman who has the responsibility to carry the condom?

HON. J. JANSEN: I don't remember the member opposite being in my office when this matter was discussed. I certainly don't recall that type of advice being given to me. My mandate in dealing with this video is to provide a balanced approach to the problem of AIDS. I think we've accomplished that in this product.

MR. PERRY: A new question for the minister. Last summer the Premier vetoed a highly advantageous distribution arrangement for the AIDS film negotiated by the ministry with Cineplex Odeon Theatres throughout British Columbia. Will the minister now tell this House what provision he has made to communicate the message of this film to the teenagers for which it was designed?

HON. J. JANSEN: Again, I hope that the opposition member has looked at our strategy document which talks about a very extensive, consultative process to ensure that we get good communication in terms of AIDS strategy. Part of that was communication. As I said before — and I'll repeat now — we intend to look at the communication opportunities available to us to ensure that we get the best coverage possible.

MR. PERRY: Supplementary. The normal courtesies of this House would have ensured that I would have seen a copy of the strategy document yesterday by the time it was released. Will the minister assure the House that in future he will ensure that opposition critics have access to important documents like that?

MR. SPEAKER: The question is out of order.

SECONDARY PICKETING

MR. MERCIER: My question is for the Minister of Labour. The NDP has publicly advocated the return of secondary picketing in B.C. Many of my business constituents are very concerned about that possibility. Can the minister indicate to this House what the impact has been on the provincial economy and the labour relations climate of this government's ban on secondary picketing?

MR. SPEAKER: The minister may want to narrow the scope of the reply, because it might be a little bit broad.

HON. MR. JACOBSEN: It's quite clear for all that the policies of the government in the last two or three years have clearly worked to the best interest of both labour and management. When you consider that nearly half of the new jobs in all of Canada were created in this province and that the good labour relations we have enjoyed.... It's a record that we are certainly very proud of as government and one that we commit ourselves to continuing to work on for even better harmony in the time ahead.

RENT INCREASES

MS. CULL: My question also is to the Minister of Labour and Consumer Services. The minister has shown that he is personally willing to intervene in individual cases of unfair rent increases. In Surrey right now the tenants of Imperial Parkside are facing rent increases of up to 60 percent; in Comox, great great-grandmother Wilma Wilson is facing a rent increase of 43 percent; and here in Victoria the tenants of View Towers are facing rent increases of up to 50 percent. Can the minister tell the House whether he has decided to intervene on behalf of these tenants as well?

HON. MR. JACOBSEN: To the member, may I say that I have never said that it was my intention to

[ Page 9054 ]

intervene in the case of all rent increases. There are times when my ministry will consult with renters and landlords to better familiarize ourselves with a situation that exists within individual cases, and I suppose that's all right. There are also times when the landlord may, as a result of those conversations, decide to reduce the rent or roll back the rent increases, and I suppose that's all right. But I think we should not make a political situation or try to take political advantage of a problem faced by many renters in the province.

On the question you mentioned, the one in Surrey, yes, I am concerned about the increase that has apparently taken place there, but I don't have very much information on it. My ministry today has contacted the Rental Housing Council for some clarification on what is happening in that particular matter.

MS. CULL: A supplemental. The minister did tell this House that he intervened in at least one case. I am concerned that it would be a fairer situation — and I ask the minister whether he would not agree — for the minister to bring in a rent review process that would apply to all tenants equally, not just to those who raise complaints.

MR. SPEAKER: The question is out of order. The minister may wish to answer.

RICHMOND SCHOOL DISTRICT REFERENDUM

MS. A. HAGEN: At a meeting with Richmond school trustees, the Premier said he had an open mind about the school board's proposed referendum. Days later the Premier very publicly trashed the referendum and called it a con job. My question to the Premier is very simple: how does he reconcile these hypocritical remarks on the proposed referendum for Richmond schoolchildren?

HON. MR. RICHMOND: On a point of order, Mr. Speaker, the word "hypocritical" clearly offends the spirit of this House, and I ask the member to withdraw.

MR. SPEAKER: Order, please. If the member said that the Premier was hypocritical, I must ask her to withdraw. If the member said "hypocritical remarks," I can't ask her to withdraw. Let's just ask the member to withdraw any unparliamentary remark, and let Hansard decide what the correct statement actually was.

[2:15]

MS. A. HAGEN: Mr. Speaker, if there's any question about the intent of my remarks, let me just ask the Premier if he could please reconcile these contradictory remarks on the proposed referendum regarding Richmond schoolchildren.

MR. SPEAKER: It makes it so much easier for everyone if we use parliamentary language.

HON. MR. VANDER ZALM: Mr. Speaker, I appreciate the correction because we should not be too confrontational, as we so often see from the opposition.

The member is quite right; I did have a meeting with members of the Richmond School Board. As a matter of fact, I meet with members of the Richmond School Board quite often, as I meet with members of council and other constituents, and I think this is very helpful to the process. We are, after all — have continued to be and will forever be-a grass-roots, true-to-the-people government.

I should clarify for the member that as a constituent and as a taxpayer, I too from time to time may feel offended by what politicians say or do. One such offence, I felt, was a statement made by a member of the Richmond School Board with whom the opposition is, I'm sure, fairly familiar. The statement was that there would be a referendum in Richmond. This member did not know why, because they hadn't yet prepared a list of what they would need money for or why they needed money; but, in any event, they would put forth a referendum. As a taxpayer who is certainly very involved with responsible management of the people's moneys in the province, I took offence at that statement.

I must confess that as I was being asked the question, It occurred to me that I had just come out of here and had listened to the NDP socialists for a whole week saying that we needed referendums. They didn't say why, or that it might be too much of an imposition on the taxpayer....

MR. SPEAKER: Order, please. The scope of the answer cannot exceed the scope of the question.

MS. A. HAGEN: Given that the Premier knew nothing about the topics that would be the subject of a referendum, I believe we have another example here of his trying to impose his narrow views on the people of the province. I'd like to ask the Premier to be more specific. What exactly is the con job? Is the con job: (a) more library books for children; (b) ESL for new children moving into your constituency; (c) special education for the children in your constituency; or (d) all of the above, Mr. Premier?

HON. MR. VANDER ZALM: I'd be very pleased to answer that, because perhaps now we on this side, who are very familiar with block funding and what we're doing for educational programs in the province, have a better understanding of why the NDP is always confused, confused, confused. This member is obviously not aware that block funding provides for all of the things she mentioned in her list.

GOODS AND SERVICES TAX

MR. CHALMERS: My question is to the Minister of Regional and Economic Development (Hon. S. Hagen). Farmers and small business people in the Okanagan and throughout the province are strongly opposed to the GST. Last week this assembly unani-

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mously passed a resolution which was brought forward by the first member for Vancouver-Little Mountain (Mrs. McCarthy) and called on Ottawa to immediately withdraw the GST legislation. Can the minister advise the House what impact the GST will have on small businesses in B.C. ?

MR. SPEAKER: The question would be better put on the order paper. The scope of the question is too broad to permit an answer during question period.

HIGHWAYS IMPROVEMENT PROJECT SIGNS

MR. LOVICK: My question is to the Minister of Transportation and Highways. I ask the minister whether she can confirm for this assembly that one of her first acts as Minister of Highways was to change the highways improvement project signs to feature her name in yet bigger and bolder letters, at a cost in excess of $150,000 to the taxpayers.

HON. MRS. JOHNSTON: I am delighted to be able to stand before you today to advise that it is normal practice, when the minister changes, for the name on highway signs to be changed as well. It seems most appropriate that that action should be taken.

MR. SPEAKER: Ladies and gentlemen, by prior agreement, the next process we go through will be televised. I will therefore subject you all to the rather unpleasant experience of turning up the lights.

Orders of the Day

HON. MR. COUVELIER: Mr. Speaker, I move that the House at its next sitting do resolve itself for this session into a committee to consider supply to be granted to Her Majesty.

Motion approved.

Hon. Mr. Couvelier tabled the comptroller-general's report of interim financial statements for the eleven-month period ending February 28, 1990.

ESTIMATES OF SUMS REQUIRED
FOR THE SERVICE OF THE PROVINCE

Hon. Mr. Couvelier presented a message from His Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 1991, and supplements to the estimates for the fiscal year ending March 31, 1991, recommending the same to the Legislative Assembly.

Hon. Mr. Couvelier moved that the said message and the estimates accompanying the same be referred to Committee of Supply.

Motion approved.

HON. MR. COUVELIER: Mr. Speaker, I move, seconded by the hon. Minister of Forests (Hon. Mr. Richmond), that Mr. Speaker do now leave the chair for the House to go into Committee of Supply.

MR. SPEAKER: I would like to call the question, but I won't, because the appropriate thing to do is for the minister to have a small deliberation about this matter.

Budget Address

HON. MR. COUVELIER: Mr. Speaker, on behalf of the citizens of British Columbia, I am proud to present the fourth budget of this administration.

Four years ago this government promised sound economic and fiscal policies, taxpayer relief and a stable revenue regime to support social policies. This government said it would reduce debt and balance the budget. Mr. Speaker, last year we balanced the budget. This year we balanced the budget. Furthermore, we did it with no tax increases. As a matter of fact, this budget reduces property taxes for most homeowners.

This budget contains unprecedented spending for health care, education and social services and strengthens municipal financing, housing and the environment.

Mr. Speaker, this budget continues to reduce our accumulated debt. British Columbians will have over $1 billion in their budget stabilization fund and over $440 million in their privatization benefits fund — money for a rainy day; money in the bank.

This budget is made possible because this side of the House, even in difficult and uncertain times, has never lost sight of one basic principle. That principle is our commitment to sound financial and economic management. Good government means making hard choices. It means showing leadership. It means making the right choices. It means recognizing that government has no money of its own — only the taxpayers' money, and there are limits on their ability to pay. My friends, a government that promises everything will deliver nothing.

Hard but farsighted choices were made as far back as 1982. The seeds planted then, in almost desolate economic ground, and in the face of strident and shortsighted opposition, have helped produce today's bountiful economic harvest. Mr. Speaker, how wrong those critics were; how necessary those actions taken!

When this government took office in 1986, Expo 86 had inspired us, given us momentum and lifted our spirits. We were determined not to slip back into recession, and we did not. With good management, making the right choices at the right time, we did much, much more. British Columbia's economic performance and the state of its public finances have become the envy of Canada.

Since we took office just three short years ago, the unemployment rate has fallen from 12.5 percent to 7.8 percent; 170,000 jobs have been created; annual investment has grown from $9.6 billion to $15.7 billion; and government debt has been reduced by nearly $800 million. This performance has prompted the Investment Dealers' Association of Canada to say

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that "B.C. sets the example for fiscal management in Canada."

Mr. Speaker, as we enter the decade of the 1990s, our continued success will require that we hold fast to our enduring economic goal: a stable and diversified economy. We have made great strides in diversifying our economy, and that is the key to escaping from our boom-and-bust cycles.

British Columbia is now selling to a more diverse group of countries than ever before. The Pacific Rim is fast becoming the largest customer for our products. Export market diversification is adding stability to our economy, and it is continuing.

If the first step in stabilizing the boom-or-bust economy is diversifying where we sell, the equally important next step is to diversify what we sell. Knowledge-based, clean industries like electronics and telecommunications have more than doubled their share of the provincial economy since the early seventies. British Columbia's financial sector is developing, and Vancouver's International Financial Centre is now Canada's largest.

[2:30]

Mr. Speaker, these developments reflect a new economic reality in British Columbia. Our comparative advantage lies in being a good place to live and work. It lies in the beauty of our province and the cleanliness of our environment. The very quality of life we treasure in British Columbia is itself an integral part of our future success, and it is quality of life that this year's budget is all about — investments in education, the environment and the economy.

As I prepared this first budget of a new decade, I had the opportunity to reflect on where our future lies as a province and to look more broadly at conditions nationally and internationally. I am struck by the changes I see unfolding in every corner of the world: eastern Europe, Japan, the European Community, China and the United States. And it's not just political changes; there are economic changes as well. Already world prices for some of British Columbia's major exports are weakening. Economic growth in the U.S. and central Canada has slowed. Mounting federal debt and high interest rates will have an effect on British Columbians.

Ottawa's high interest rates will exact a double penalty on British Columbia's unique export-oriented economy. A business in British Columbia pays interest rates 5 percentage points higher than its competitor in Washington State. Those interest rates keep the Canadian dollar artificially high, which further undermines our international competitive position. Furthermore, the federal government's 7 percent goods and services tax is an insidious revenue grab that will create massive red tape, fuel inflation and burden the consumer.

Looking at all of this, I can only conclude that the prosperity we enjoy today is fragile. While British Columbia's longer-term prospects remain bright, it will be a challenge in the short term to navigate the increasingly turbulent economic waters around us.

I have reviewed this province's achievements and the growing strength of its economy. I have shared with you our hopes for the coming decade. I have also cautioned this House about the challenges, many of them external, which put at risk our fragile prosperity. Let me turn now to the budget.

Our vision is one of a more balanced and diversified economy — an economy driven by people with excellent skills, supported by the best of technology and infrastructure. Our vision is for an economy which thrives in a clean and healthy environment. The care and protection of the environment is of utmost concern to all British Columbians, and we all have a personal responsibility for it.

A few weeks ago British Columbia hosted Globe '90, a world conference on global opportunities for business and the environment. The conference was a major success. But conferences and discussions are only a first step. This government will act.

I am today announcing a new sustainable environment fund. This fund is unique. This fund has revenue sources dedicated to environmental protection and renewal of our vital forest resources. Appropriations in this fund do not lapse — not this year, not next year. The fund represents a long-term commitment of which $1.7 billion will go to implementing a ten-year reforestation program. In 1990-91, $222 million will be appropriated for reforestation from the fund.

In addition to reforestation, the sustainable environment fund will support other initiatives, such as: implementing the municipal solid waste management strategy; establishing a hazardous waste management corporation to develop a comprehensive hazardous waste management system; adding money for energy conservation, soil and water protection and environmental protection and enforcement; funding operations of the Round Table on Environment and Economy and of the Forest Resources Commission; instituting vehicle emission inspections in the lower mainland; and acquiring additional parklands and nature habitat. Spending on these and other environmental programs will exceed $70 million in 1990-91.

To ensure the best use of resources and the most balanced choices, the sustainable environment fund will be managed by the Cabinet Committee on Sustainable Development, co-chaired by the Ministers of Environment (Hon. Mr. Reynolds) and Regional and Economic Development (Hon. S. Hagen). To kick off the fund this year, we will transfer $50 million from the Lottery Fund to the sustainable environment fund.

Including spending out of the fund, total government spending on reforestation and environmental activities in 1990-91 will increase 24 percent to $553 million. I have just described the first element of our environmental strategy.

The second element rewards environmentally beneficial behaviour. This means taking responsibility for the entire life cycle of products we use. I am introducing a number of measures to address environmental risks which arise through the life cycle of products.

We have learned from the huge tire fire in Ontario. Effective July 1, 1990, there will be a levy of $3 on

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each new vehicle tire sold. New levies will be applied to several hazardous products effective July 1, 1990. On that date, there will also be a $5 disposal levy on purchases of new lead-acid automotive, marine and similar batteries. A model recycling program for beverage and other containers is being developed. The Minister of Environment will be consulting with affected groups.

Effective midnight tonight, the social service tax exemption for disposable diapers for infants will be removed. The Minister of Environment will increase industrial and municipal pollution discharge permit fees.

I want to emphasize once again, Mr. Speaker, that the revenue raised from these sources will be used exclusively for environmental initiatives. These are dedicated funds. These measures support our vision of a cleaner and safer environment.

Let me deal now with education. When I spoke of the challenges we face in the 1990s, I stressed the need for economic diversification and the role of science and technology. A precondition to achieving this vision is ensuring quality education. We will spend over $4 billion on education and training this year. That represents a $530 million increase, larger than any other program.

The Ministry of Education's funding will increase by $398 million to $3 billion, an increase of 15 percent. Included is $140 million to implement the recommendations of the Royal Commission on Education. Also included is $10 million more for the Computers in Education initiative and Pacific Rim initiative programs.

Mr. Speaker, the introduction of the new block funding system for schools will provide stability and predictability in school funding. With block funding in place, the province in 1990-91 will be providing 100 percent of the funds required for the primary and secondary public education systems. Residential school property taxes will provide 10 percent of these funds and 90 percent will come from other provincial sources.

With funding at a higher level than ever before, we believe there is no need for additional funding outside of the block. However, Mr. Speaker, should school districts want to spend more, they can do so, but only with the approval of local taxpayers through referenda.

In addition to operating expenses, a $350 million capital plan has been approved for construction and renovation of schools for 1990-91.

Turning to post-secondary education, the Ministry of Advanced Education, Training and Technology will receive over $1.1 billion, an increase of $132 million over last year. This includes $68 million for the Access for All initiative, almost double the previous year's funding. This will provide for an additional 2,400 student places, the introduction of fourth-year university courses at the colleges in Kelowna, Kamloops and Nanaimo, and operating funds for the new business administration school at the University of Victoria.

Included in the capital envelope are funds to begin planning work for the University of Northern British Columbia in Prince George. In addition, the generous student financial assistance program will be enhanced. Its spending will rise by 16 percent to $58 million.

Mr. Speaker, we have been encouraging a closer relationship between our universities and the private sector. With this goal in mind, we instituted a $110 million university matching fund program. By virtue of this program's phenomenal success, it will be extended.

To realize our vision of a post-resource economy, we must forge a partnership between government, science and business. Our people are educated. We have first-rate universities and an attractive environment. This makes our province a prime location for advanced technology industries and for research centres. British Columbia has numerous high-tech success stories. But there is so much more we can be.

Today I am announcing the establishment of the science and technology fund. This will provide a five-year research-and-development funding totalling $420 million.

The science and technology fund will focus on three main areas: leading-edge core research in areas endorsed by the Premier's Advisory Council on Science and Technology; industry-based joint projects between business and the research community; major research-and-development projects undertaken in partnership with other levels of government and industry. Potential major projects that could be supported by the fund would include the kaon factory at the University of British Columbia.

Another project that could be incorporated in this approach is the development of alternative-fuel technologies. One promising technology in this area is hydrogen, a fuel whose only combustion product is clean water. With local industry and research carried out at the University of Victoria, we can become a leader in this technology. Our universities, research institutes and industry have already taken on the R and D challenge, and we are working together to make British Columbia a world-class centre for science and technology. This multi-year fund will generate the momentum required to realize our vision.

My friends, as I drive around this great province of ours, I am proud that Social Credit governments have had the foresight to invest in the transportation links that tie this province together. Over the last year, the government has received recommendations from the eight regional transportation planning committees established by our "Freedom to Move" initiative. These regional committees worked hard to define needs and set priorities for their areas. The government appreciates their hard work and dedication, and thanks them for a job well done.

[2:45]

By virtue of the quality of that work, I am today able to announce a new "Freedom to Move" special account. Through this account we are committing $3.5 billion over the next five years. That is $3.5 billion over the next five years to transportation

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investment. The account will be used for rail, ferry, highway and urban transit projects. It will provide stable and predictable funding levels for improvements and expansions of our transportation system. This initiative would include the Okanagan connector, the Vancouver Island highway, the Cassiar connector in Vancouver, SkyTrain extensions and a new generation of ferries.

The $3.5 billion commitment to the "Freedom to Move" special account is the most comprehensive program of transportation investment ever undertaken in British Columbia. It will relieve urban congestion, it will bring rural British Columbians closer to their neighbours, it will help our products get to market and it will make our highways safer.

This province is linked together by more than just its roads and ferries. We are bound by our commitment to see that every region shares our advantages and achieves its potential. This year the Minister of Regional and Economic Development (Hon. S. Hagen) will invest $80 million to ensure regionally balanced prosperity.

Mr. Speaker, this government is delivering natural gas to Vancouver Island. The new pipeline will reduce the risk of oil spills in our congested waters. It will encourage the use of a cleaner-burning fuel, and it will reduce heating costs in such beautiful, tranquil and deserving communities as Saanich, Sidney and Brentwood Bay.

More people in the north and interior will be able to enjoy the full benefits of our energy resources. Assistance will be provided to extend power and gas lines to rural areas in these parts of the province. This government responds to the aspirations of every region of this province.

While we are making investments for the future, we must never lose sight of programs that help people today. Our government is committed to excellence in health, excellence in education and, indeed, excellence in all of the social programs we deliver. This will challenge our creativity and resources as we meet the growing needs of our people in the years ahead. It will be particularly challenging, faced as we are with further federal cuts in planned program funding of $1 billion by 1995.

Since this government took office, nearly 170,000 jobs have been created. As a result of these employment opportunities, 15 percent fewer people have had to rely on social assistance. But reflecting this government's commitment to assisting families, the handicapped and others in need, we have continued to enhance social assistance funding. This year we will spend $1.7 billion on social services and housing. This will include $161 million for services to families and children, an increase of 16 percent; $92 million for day care, training and support for the handicapped, a 28 percent increase over last year; and $5.6 million to help parents care for handicapped children at home.

In partnership with native tribal councils, we are launching initiatives to increase employment opportunities and independence for off-reserve natives. This partnership is also resulting in greater native participation in child welfare services and in developing programs reflecting our unique native heritage.

More funds will be available for emergency shelters for the homeless and safe houses for women and children. Along with federal funding, this will assist in the development of several new shelters, including a transition house for native women. Additional funding will also be provided for counselling victims of sexual abuse. All British Columbians have the right to be safe and secure.

Mr. Speaker, no woman should suffer discrimination in employment or pay because of her gender. This government will introduce a pay equity policy within the public service. What we mean by that is equal pay for work of equal value. This will have a cost, but we are committed to fairness.

Women are increasingly choosing to prepare themselves for full and equal participation in the workforce. This government will continue to help them realize their goals. This means ensuring that every occupation is open to women.

The changes I talked about in our economy are affecting individual workers. New kinds of businesses are emerging, and the types of work we do are changing: job mobility is increasing, small businesses are creating most of the new jobs, and women are entering the labour force in unprecedented numbers. This government is responding to these changes in the work world.

We will table a White Paper proposing a B.C. pension plan. The plan would provide greater income security for British Columbians, in particular, homemakers, employees of small businesses and those earning modest wages. Most of these people are not covered by a pension plan now, and it is difficult for them to save for a secure old age. Our plan will provide greater security for these people. Income security is essential to quality of life in British Columbia, and this government is responding.

Mr. Speaker, our quality of life attracted 60,000 people to British Columbia last year. This has put pressure on housing. Rental vacancy rates have dropped and house prices have risen sharply. This year we will spend $1 billion to assist low-income renters, create rental housing and promote home ownership. This represents over $800 per household in this province.

The initiatives undertaken by this government will result in the construction of 8,000 affordable rental units. I am pleased to announce that the renter's tax reduction will be expanded to help an additional 40,000 families and individuals with lower and moderate incomes. A family of four with a net income of $30,000, which would have received a tax reduction of $200 for 1989, will receive an income tax reduction of $570 for 1990.

We are also expanding the property purchase tax relief available to eligible purchasers. This enhanced relief will be available in certain areas of the province where house prices are very high. A person buying a home in these areas valued at $200,000, with a 10 percent down payment, will qualify for property

[ Page 9059 ]

purchase tax relief that is equal to $1,200 or 60 percent of the tax otherwise payable. This will benefit an additional 5,000 homebuyers.

We are also making available Crown land in urban areas at attractive long-term lease rates to developers willing to build affordable rental housing. Sites have been made available, and planning is underway for projects in both Victoria and Vancouver.

Regulatory hurdles have become a serious impediment to building more housing. Our government has offered incentives to municipalities that fast-track affordable housing projects. But frankly, the take-up rate has been very disappointing. It may therefore be necessary for us to revisit methods of increasing the housing supply. I issue this challenge to the municipalities today: join with us to ensure affordable housing for our citizens whom we both serve.

Mr. Speaker, we recognize that if municipalities are going to be able to meet the housing challenge, they will need the money to provide sewers, water and other services. This year we are increasing municipal revenue-sharing fund grants by 18 percent to $338 million. I ask you to contrast that with the treatment the provinces have received at the hands of the federal government. We have flow-through increases to the local governments in this province in recognition of their increasing burdens.

Furthermore, because we are sensitive to the devastating impact of events like the Sullivan mine closure in Kimberley, a $10 million local government emergency account within the municipal revenue sharing fund is being created. This will help local governments through difficult periods. The emergency account will ensure that the financial difficulties of local government do not compound a community's economic distress.

I am also pleased to announce that we will begin to pay interest on the funds in the revenue-sharing stabilization account. This meets a longstanding request of the UBCM. Interest will also be paid on funds in the local government emergency account. These measures will help British Columbia communities continue to provide the best local government in Canada.

Mr. Speaker, dealing with health care, this government spends $13 million every day on health care. We will spend $4.8 billion this year, a half-a-billion dollar increase. We are spending an average of $4,000 per household. There will be no increase in Medical Services Plan premiums this year. MSP premiums will be reviewed as part of a broader taxation study.

B.C. has an excellent health care system. Our people deserve and expect no less. But I look to the future and see an aging society, increasingly complex and costly medical technology, and further cutbacks in federal spending on health care. It is essential that we take the broadest possible look at the health care system. During the next 18 months, a royal commission will examine ways of delivering better universal health care at a price we can afford.

I trust that the royal commission will look closely at new approaches to health care delivery like the innovative Victoria Health Project. This creative initiative of the Ministry of Health, the Greater Victoria Hospital Society and the Capital Regional District emphasizes the prevention of illness. But when illness occurs, it coordinates the full range of community services to help the patient in the most responsive manner. Despite the drastic cutbacks in federal government contributions, we will never compromise the excellence of the health care system in British Columbia.

[3:00]

Mr. Speaker, you have heard today how provincial governments are being forced to pay for federal financial mismanagement. Unless provincial governments can afford to pick up more and more of the cost, vital programs will wither and die. It is time to face this problem squarely. It is time to recognize that the federal government is walking away from the commitments it undertook in establishing our national social and economic programs.

The roles and obligations of the province, and those of the federal government, must be clarified. We must reduce our dependence on the federal government in a host of areas, including social programs, economic development programs and taxation arrangements. The time is past when overlap and duplication of government programs and taxes can be afforded or tolerated. The time has come for us to act.

Taxpayers are tired. They are tired of ill-conceived tax grabs like the GST from a government that cannot make the hard choices needed to keep its fiscal house in order.

I recently travelled the province with my colleague the then Minister of Municipal Affairs to hear people's views on property taxes. We asked for views, and did we get them! Taxpayers have grown weary of complexity and inequity. Taxpayers are angry about rising property taxes; they should be.

Undisciplined spending by some school boards is contributing to this rapid escalation. Without reform of school financing, residential school property taxes would have risen in excess of 15 percent in 1990. That's before school boards approve budget increases and before this year's salary negotiations. That was simply unacceptable.

We took action to correct this problem, beginning with restructuring the school funding system. My colleague the Minister of Education (Hon. Mr. Brummet) has already announced the first component of this new approach. A system of block funding has been put in place, beginning with the 1990-91 school year. This system provides all school districts with sufficient funds to deliver a high-quality education for our young people. With the referendum approach, school spending is not controlled, but it is contained. School boards will have to become more responsive to taxpayers when making their spending decisions.

Today, Mr. Speaker, I am announcing further relief to alleviate the burden of taxation of B.C. homeowners. We will hold the increase in gross residential school taxes for the average homeowner to between 5 and 6 per cent. The homeowner grant increases announced last year will be extended for another

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year. This year homeowners will receive a supplementary homeowner grant equal to 25 percent of school property taxes in excess of the basic grant. Next year this supplementary grant will be increased to 50 percent of school property taxes in excess of the basic grant. Over half a million households will receive the supplementary grant this year.

Let me tell you how people will benefit. Under the previous system, a homeowner paying $1,430 in gross school taxes received a homeowner grant of $430, resulting in a net school tax bill of $1,000. Under the new system, that current $1,000 tax bill will be reduced to $750 in the current year. That is a $250 reduction this year, and it will be $500 next year.

For seniors, handicapped and veterans who receive a basic $700 homeowner grant, the tax bill on the same property would be reduced from $730 under the previous system to $548 this year. This represents a tax saving of $182 which will be doubled next year.

This government has listened to the concerns of taxpayers. Taxes for homeowners are being reduced. Taxes for renters are being reduced. There will be no increases in Medical Service Plan premiums, no increases in the sales tax and no increases in the income tax.

Unfortunately, the federal government has not listened to the taxpayer. The GST will be a serious blow. In the face of massive opposition, the federal government is determined to press ahead with this tax. Mr. Speaker, they are wrong. In 1987 British Columbia said no. In 1988 we said no. In 1989 we said no, and in 1990 we say no. That tax is quite simply unacceptable to British Columbia. More than that, this government believes that a tax on a tax is unfair.

I am announcing today that when the GST — or maybe I should say if — is implemented, the provincial social service tax will not apply on top of the federal tax. The provincial tax will apply to prices excluding the federal tax. We are not interested in hidden tax grabs from this side of the House.

Reflecting this government's concern for the burden of taxation, the complexity of taxation and the fairness of taxation, I intend to launch this year a major review of British Columbia taxes. We will also examine whether British Columbia's social and economic vision can be achieved within the current national tax structure.

Government must be responsible and consider the effects of its actions on the economy. As I have said, our prosperity is fragile. Cost and inflation pressures are building. There are increasing signs of a compensation imbalance between the public and private sectors that will destabilize our economic future if left unchecked.

During 1989 public sector wage settlements averaged 7.6 percent. Private sector settlements averaged 4.1 percent. Those facts speak for themselves.

In this budget we have made provisions for reasonable and responsible wage increases for public sector employees. This government believes that free collective bargaining is essential to good labour relations. We will continue to closely monitor pay settlement patterns in the economy. Public sector employers will be instructed to pay particular attention to taxpayers' ability to pay.

We shall review dispute resolution mechanisms to ensure that the larger public interest, as well as the taxpayers' ability to pay, is appropriately recognized. Pay awards must not undermine competitiveness or fuel inflation pressures. The challenge is to achieve fairness in compensation while safeguarding economic prosperity.

Let me turn now to our fiscal plan. The buoyant economy in 1989-90 generated stronger growth in revenue than anticipated. Including a net transfer of $50 million from the budget stabilization fund, the general fund revenue totalled $13.9 billion in 1989-90. Effective expenditure management brought 1989-90 spending in at $140 million under budget. So the general fund expenditure totalled $13.7 billion.

Our objective of a balanced budget was exceeded. Last year we recorded a general fund surplus of $140 million.

The budget stabilization fund is now expected to have a balance of $1.6 billion on March 31, 1990, compared with the $1 billion balance projected in the 1989-90 budget. During 1989-90, the government received an additional $75 million from privatization and asset sales. This amount has been placed in the privatization benefits fund, bringing that balance at March 31 to $423 million.

Mr. Speaker, it is performance like this which led all four bond-rating agencies to again upgrade B.C.'s bond rating. This is merely another example of how responsible fiscal management generates tangible benefits for all British Columbians. It will mean lower interest costs for the government and all of its agencies,

Earlier I said that we must be prepared to navigate the increasingly turbulent economic waters around us. We do not expect a continuation of the high rates of economic growth we have enjoyed over the last three years. We forecast economic growth at 3 percent in 1990, down from 4.9 percent in 1989.

In establishing the budget for 1990-91, we had to reconcile two conflicting pressures. The rapid economic growth and population increases created heavy demands to augment public services like health care and transportation systems. Meanwhile, as we pass the peak of the economic cycle, revenue growth is expected to slow.

In reconciling these pressures, general fund expenditure for 1990-91 is budgeted at $15.26 billion, an increase of 9.8 percent over last year's estimate. As noted, most of this increase enhances social services in the province. Revenue is also budgeted at $15.26 billion.

Last year I said that we would continue to reduce government debt. I am pleased to report that, continuing the pattern established in '88-89, debt was reduced by $699 million in 1989-90. I project a further $78 million decline by the end of 1990-91.

Mr. Speaker, since this administration took office in 1986, direct government debt has been reduced by

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nearly $800 million. I'm proud of this accomplishment.

The balance in the budget stabilization fund is projected at $1,079 billion at year's end. Through the coming fiscal year we will transfer $120 million from the budget stabilization fund to the general fund to compensate for unilateral federal cuts to health, post-secondary education and other programs. In order to fund a number of program priorities, a further $564 million will be drawn into the general fund.

I remind this House that this balanced budget is achieved while reducing the tax burden for the average British Columbia household.

Mr. Speaker, I have noted several times this government's enduring commitment to good financial management. Our prosperity today is the result of a decade of good management. As we enter a new decade, we must have a similar long-range perspective.

In this context, we must never underestimate the long-term impact of capital investment decisions made by the government. Through the nineties, the provincial public sector will make capital investments of over $20 billion. This will create the schools, the hospitals, the highways and transit systems to shape our public services and our competitive position as we enter the twenty-first century.

We have established multi-year funding to guide this capital investment program. We intend to conduct our investment activity in a manner consistent with the goal of developing our regions and stabilizing the economy. Employment will be created during downturns; inflation will be contained during expansions. Similarly, in planning our operating budgets we intend to incorporate a longer-term framework.

[3:15]

Targets for revenue and expenditure growth related to levels of activity in the economy will be established. This will be central to ensuring that government is affordable for taxpayers.

So, Mr. Speaker, this is a budget which holds true to the course we set over three years ago. Today all British Columbians are reaping the rewards. The economy is growing, investment is increasing and jobs are being created in unprecedented numbers. And our economic success means that we are able to enhance services for British Columbians. Prudent fiscal management has let us make the investments I announced today: investments in education, in health care, in science and technology, in transportation, in housing and, above all, in the environment. That management has also allowed us to balance the budget, to reduce the debt and to lighten the burden on taxpayers.

Promises were made; promises were kept. The promise was relief from escalating taxes. The promise was a balanced budget. The promise was a more diverse and stable economic base. These promises were for all British Columbians. These promises were kept.

This is a budget for the 1990s. It sets out this government's vision for an economy which thrives in a clean and safe environment. The very quality of life British Columbians treasure is the key to our future success.

The choices British Columbia makes today will determine whether that vision is achieved. It will take long-term commitment, the kind of commitment displayed by this government through the 1980s, the kind of commitment displayed today in the establishment of our multi-year, dedicated funds and accounts and the kind of commitment that can protect today's fragile prosperity.

While I am confident of our prospects, I also know that British Columbia's prosperity is threatened today by the federal government's high interest rates, threatened by economic instability and threatened by the fiscal irresponsibility which brought on the GST. This government has the commitment and the vision to navigate in today's troubled economic waters. This government can protect and diversify the economy. This government can build the future British Columbia deserves.

This is a budget which gives back to the people who helped build this magnificent province. I table with pride a budget that rewards all British Columbians: a balanced budget which builds a more secure and a more prosperous future.

MR. CLARK: At the outset, let me again thank the minister for providing me with an advance copy of the budget. As is the custom, I will be adjourning shortly, and my major remarks will be made tomorrow morning. I would like, however, to take this opportunity to make some brief comments.

British Columbians want a budget that is fair, a budget that reflects their social and economic priorities for the 1990s and a budget that is fiscally sound. [Applause.] I'm glad you agree. I hope they like the rest of my remarks equally.

Above all, they want a budget and a government that is honest. This budget is a deceptive budget that is out of touch with the priorities of British Columbia. The government tells us that this is a balanced budget, but it is not. The government is planning to spend $684 million more this year than it will take in in revenue. No matter what manipulations they make with the BS fund, nothing can conceal the fact that this is a deficit budget. It is one of the largest deficits in the history of British Columbia, and it is at the peak of the economic cycle. The deficit is more than half a billion dollars, and that's a fiscal recipe for massive deficits if we move into recession.

The government tells us they are committed to tax fairness, and yet there is no tax relief for the majority of middle- and lower-income British Columbians.

The government tells us they are committed to the environment, and yet the most recent information shows that every single pulp mill in British Columbia has been in contravention of their waste permits.

The government tells us they are committed to education, but they imposed a referendum system that they know will undermine the quality of education in British Columbia.

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The government tells us they are committed to affordable housing, yet just recently Vancouver has become the most unaffordable city in Canada, as a result of this government's policies.

The government tells us they are committed to helping women, yet they will not even provide minimal funding to keep open women's centres in British Columbia. Nor will they provide funding for women's health clinics in Vancouver or elsewhere in British Columbia.

This is a deceptive budget, Mr. Speaker. When British Columbians called for tax fairness, the government increased taxes. When British Columbians demand action on the environment, the Minister of Environment (Hon. Mr. Reynolds) invites them to eat toxic shellfish. When British Columbians are looking for action on recycling, the government gets mired in scandal. When British Columbians are looking for sound fiscal management, the government sells off Expo lands at a loss — on the choicest piece of real estate in North America, in the middle of a real estate boom. No other government could be as fiscally incompetent as this administration.

British Columbians are looking for honesty in government. They're looking for a government they can trust to bring about tax fairness. They're looking for a government they can trust to achieve equity for women. They're looking for a government they can trust to reflect their social and economic priorities for the 1990s. That is why they have lost confidence in this administration. It's a tired government, a government that tells us the books are balanced when there's a deficit, a government that's out of touch with British Columbians.

The New Democratic Party is committed to tax fairness. We will, in our first budget — very shortly, Mr. Speaker — reduce the tax burden for middle- and lower-income British Columbians. The New Democratic Party is committed to the environment, unlike this administration. We will enforce environmental laws and implement innovative programs such as green taxes, to tax pollution instead of people, as they have been doing after three years of this government.

We will introduce a comprehensive child care program that will be a model for the rest of Canada. We will provide affordable housing and quality education and health care, while at the same time achieving a balanced budget. Above all else, we will restore honesty to government in British Columbia.

Mr. Clark moved adjournment of the debate.

Motion approved.

Introduction of Bills

Hon. Mr. Couvelier presented a message from His Honour the Lieutenant-Governor: bills intituled: Home Owner Grant Amendment Act, 1990; Income Tax Amendment Act, 1990; Sustainable Environment Fund Act; Transportation Capital Funding Act; Science and Technology Fund Act; Budget Measures Implementation Act, 1990; Social Service Tax Amendment Act, 1990; Property Purchase Tax Amendment Act, 1990.

HON. MR. COUVELIER: Mr. Speaker, these eight bills implement the budget measures that I announced earlier today. In moving first reading of each of these bills, I will state their primary purpose.

Bill 14, the Home Owner Grant Amendment Act, introduces a supplementary homeowner grant.

Bill 15, the Income Tax Amendment Act, enhances the tax reductions for low-income renters introduced in last year's budget.

Bill 16, Sustainable Environment Fund Act, establishes a special account in the general fund to support forest renewal and protect and enhance the environment. It also establishes new environmental levies and provides for revenues from these levies to be paid into the special account.

Bill 17, Transportation Capital Funding Act, creates a special account within the general fund in support of the transportation capital expenditures of the Ministry of Transportation and Highways.

Bill 18, Science and Technology Fund Act, creates a special account within the general fund in support of programs to encourage and develop science and technology.

Bill 19, the Budget Measures Implementation Act, gives effect to a number of non-tax measures required to implement the provisions of the 1990 budget, including the transfer of $684 million from the budget stabilization fund to the general fund and various measures creating, terminating and amending special accounts.

Bill 20, the Social Service Tax Amendment Act, clarifies technical provisions regarding the application of the tax to electricity and certain sale and leaseback arrangements.

Bill 21, the Property Purchase Tax Amendment Act, enhances the tax relief program introduced in last year's budget.

I now move first reading.

Motion approved.

Bills 14 through 21 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.

HON. MR. RICHMOND: Mr. Speaker, I wish all of our guests a very pleasant good afternoon, and move adjournment.

Motion approved.

The House adjourned at 3:29 p.m.