[ Page 12645 ]

CONTENTS

Routine Proceedings

Budget Measures Implementation Act, 1991 (Bill 3). Second reading

Hon. J. Jansen –– 12645

Mr. Sihota –– 12646

Mr. Clark –– 12647

Mr. Lovick –– 12648

Ms. Pullinger –– 12648

Mr. Jones –– 12650

Hon. J. Jansen –– 12650

Property Purchase Tax Amendment Act, 1991 (Bill 4). Second reading

Hon. J. Jansen –– 12653

Mr. Clark –– 12654

Mr. Blencoe –– 12654

Hon. J. Jansen –– 12654

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. J. Jansen)

On vote 31: minister's office –– 12655

Hon. J. Jansen

Mr. Clark

Ms. Marzari

The House met at 10:03 a.m.

Prayers.

MR. LOVICK: I notice in the gallery today a visitor from Nanaimo, a constituent and dear friend, Murray Charleson. He is a former member of the Premier's Advisory Council for Persons with Disabilities. I'd ask the House to please join me in making him welcome.

Orders of the Day

HON. MR. STRACHAN: Mr. Speaker, I call second reading of Bill 3.

BUDGET MEASURES
IMPLEMENTATION ACT, 1991

HON. J. JANSEN: This bill amends a number of acts to implement certain revenue measures introduced in the 1991 budget. The government is committed to preserving the integrity of our essential social programs, especially during periods of economic weakness. At the same time, our government believes it would be irresponsible to do so by burdening future generations with a legacy of debt and deficits. Consequently, the government made the difficult decision to increase certain taxes. To do otherwise would have meant unacceptable cuts in social programs or an increase in the deficit.

The bill includes the following revenue measures: amendments to the Income Tax Act to introduce a temporary high-income surtax; an increase in the general corporate income tax rate and amendments to the Tobacco Tax Act to increase the tax rates on cigarettes and loose tobacco products. The increases are balanced and fair. The additional revenue will come from those who can most afford to pay.

High income earners will be required to pay a surtax of 10 percent on annual British Columbia personal income tax in excess of $9,000. To lessen the impact on families, the surtax will be reduced by a credit of $50 per dependent. The credit will only be used to offset the surtax; it will not be available to reduce the existing provincial income tax. The surtax will apply to individual taxpayers receiving approximately $80,000 or more in annual income. Because of the tax credit, the income level at which the surtax first becomes payable is higher for taxpayers with dependents. For example, single parents with two dependent children will only pay the surtax if their income is $89,800 or more. Taxpayers with a dependent spouse and two dependent children will pay the surtax if their income is $93,300 or more.

As I said, the tax is temporary and will be removed when the deficit is eliminated. Since a balanced budget is anticipated in the 1994-95 fiscal year — a little different than in Ontario — the surtax will only be in effect for the 1991 through 1994 taxation years. It is expected to raise an additional $32 million in a full year.

The Income Tax Act is also being amended to raise the general corporate income tax rate to 15 percent from the current 14 percent. The increase is effective January 1, 1991, and will raise an additional $33 million annually. Even with the increase, British Columbia will continue to have the second-lowest corporate tax rate in Canada.

This change reflects the government's view that tax increases should be targeted to those who can most afford to pay. It will only affect corporations with taxable income of $200,000 or more. The small business tax rate of 9 percent will remain unchanged, which is somewhat different than what's happening in other provinces in the country, to recognize the fact that small businesses are often hit hardest when the economy is weak, such as is being experienced in other parts of the country.

During the last year many provinces and the federal government have substantially increased their tobacco taxes, with the result that British Columbia had the lowest tax on tobacco products in any province. Therefore, the Tobacco Tax Act is being amended to raise the tobacco tax rate. Effective midnight May 21, 1991, the tax was increased to $2 per pack of 25 cigarettes. In addition, the indexing formula will be adjusted to ensure that the average rate for the year in British Columbia will be close to averages of all provinces. The tax rate on loose tobacco was also adjusted proportionately. These measures will raise $75 million in 1991-92. This increase is consistent with calls from the medical profession for higher tax rates to discourage smoking, especially among young people and first-time smokers.

The bill also includes an amendment to delay the phase-out of the renter's tax reduction. This measure was introduced in 1989 as a temporary measure to assist lower-income renters through a period of rapidly rising rents. High levels of in-migration and low vacancy rates suggest that rent increases may not moderate as quickly as expected. For this reason the phase-out of the renter's tax reduction will be delayed by one year. As a result, the full reduction of $225 per family member will continue to be available in 1991.

Finally, the bill includes technical amendments to a number of other acts to allow the introduction of changes in government policy. They include: an amendment to the Taxation (Rural Area) Act to allow tax rates to vary by region in future years — this reflects the fact that increases in property values and assessments often vary markedly from region to region; a change to the Logging Tax Act to expand the definition of logging income to include proceeds from the sale of standing timber where proceeds are received over several years; and an amendment to the Sustainable Environment Fund Act to allow revenues derived from vehicle emissions testing to flow into the fund — these fees are expected to be introduced later this year as part of the lower mainland testing program. The section of the Ministry of Social Services and Housing Act establishing the social housing special account is repealed, as the account is no longer required.

In summary, the amendments in this bill introduce a package of fair and balanced tax increases, extend the

[ Page 12646 ]

full renter's tax reduction for another year and implement other changes which will improve the administration of the logging tax and rural area property tax. Mr. Speaker, I now move second reading.

MR. SIHOTA: I just want to deal with this bill briefly on second reading. Mr. Speaker, one of the attributes — if I can put it that way — of the current administration is that it is totally in chaos. Over the past few months we have witnessed a complete change in course of action by this administration in a number of policy areas.

MR. SPEAKER: Order, please. We're not in committee. Second reading is the principle of the bill. You're already doing estimates, of which the Speaker has no knowledge. It has got to be the principle of the bill we're discussing.

MR. SIHOTA: Mr. Speaker, I was making some preparatory comments.

MR. SPEAKER: I know you were, but the trouble is that you're not supposed to. So I thought I would bring you to order right away and remind you that it's the principle of the bill we're discussing, not clause-by-clause or estimates matters.

MR. SIHOTA: The purpose of this legislation is to increase taxes and to implement those provisions of the budget to deal with tax increases. As a consequence thereof, it seems to me rather peculiar that at this point the government would bring forward this bill when only a few months ago it brought forth a so-called Taxpayer Protection Act. One of the purposes of this legislation is to do away with the provisions of the Taxpayer Protection Act. Now that, I think, is a point that needs to be dwelled upon and put in its appropriate context.

This government indicated last January — I believe on January 29, 1991 — in a televised address to the people of British Columbia by the then Premier that it would not increase taxes to British Columbians. That was the promise it made at that time. It furthered that promise by bringing in provisions of the taxpayer protection plan.

The act was introduced in March of this year — about two and a half months ago. When that legislation was introduced, member after member on the other side of the House, including the current Minister of Finance and others, stood up and spoke to the virtues of the Taxpayer Protection Act and reiterated on several occasions that there would be no increase in taxes to British Columbians. That was the position taken by the current Minister of Finance and his colleagues the then Premier and the then Minister of Finance. Since then it is clear that there have been some shifts in personnel in terms of who's responsible for various ministries.

As a consequence, what we have witnessed in British Columbia over the past few weeks are changes in policy that contradict other policy positions. There is a kind of "policy du jour" aspect to this administration. That is evident not only in the areas this House has already debated during the course of estimates — namely education policy — but also in areas of finance policy. We are seeing that today with respect to this legislation.

The much-ballyhooed legislation introduced in March, namely the Taxpayer Protection Act, has now faded somewhere into the sunset. The government has now brought forward a variety of increases in taxes to British Columbians. This first, Mr. Speaker, from a government that has taxed British Columbians inordinately over the last four and a half to five years.

[10:15]

It has often been said — and I think it bears repeating in this House — that this administration has increased the tax loads to average working British Columbian families by a total of $3,000 — or approximately $3,000 — over the term of its mandate. It has accomplished that by increases not only in taxes but also in fees. Somewhere in the neighbourhood of 800 fees to British Columbians have been increased. So they are doing it by direct taxation and by a method of indirect taxation.

One of the most disturbing increases that we've seen either on the tax side or the fee side as implemented by this provision and others are the increases in medical service premiums. Interestingly enough, during the course of debate on the Taxpayer Protection Act, I and a number of other colleagues, in the absence of our Finance critic, raised concerns about....

HON. J. JANSEN: On a point of order. Medical services premiums are not included in this bill, and perhaps he can get back to the items contained in the bill.

MR. SPEAKER: I think I've already admonished the member on this matter. It's the principle of the bill that we're discussing at this time. As for items relating to taxation that the member brings up, the Chair will determine whether they are in order or not. But it would be appropriate if we discussed just the principle of Bill 3.

MR. SIHOTA: The government House Leader says this is a bill without principle because it's an omnibus bill, Mr. Speaker. But it may be more true of the government than of this legislation.

I can appreciate why it would cause some discomfort for the Minister of Finance to have to listen to the opposition again remind the government of the promises it made about five months ago in January versus what it is doing today. Most governments, as has been said in this House before, tend to break their promises after an election campaign. This administration chooses to break its promises during the course of this legislative session. In a short span of four or five months it has managed to break the promise it made to the people of British Columbia through the provisions of the Taxpayer Protection Act.

Mr. Speaker, I would anticipate other colleagues of mine may wish to deal with the Minister of Finance in

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this regard. But the point must be made that British Columbians expect and deserve some stability from government. They deserve to know what the intentions of government are, particularly as it relates to fiscal and taxation policies. In that regard, the oscillations in policy we've seen on the taxation side by this administration certainly speak to anything but stability on the part of government and represent yet another reason why the province so desperately needs a change in government.

MR. CLARK: Obviously this is an omnibus bill with many clauses which deal with different pieces of legislation, so by far the majority of the debate will appropriately be in committee stage as we canvass each clause. Interestingly enough, in his second reading speech the minister did go through every clause. I don't propose to do that. I just have some brief remarks, as do some of my colleagues. We will have the substantive debate appropriately in committee stage of this bill, which I hope will be fairly soon. We'd like to get into the meat of the matter.

The principle of the bill, such as it is, however — if one can draw a principle from this kind of legislation — is to increase taxes and to deal with this rather dramatic policy reversal we are witnessing with this legislation. There have been so many policy reversals with this government that I once said that they suffered from yo-yo economics. Someone else said that they would get whiplash from the many changes in direction. One would have thought that some of that emanated from the former Premier's office, but obviously the tradition established by this administration of erratic swings and shifts in policy continues with the new administration.

We've seen so many of them: the debt reduction plan that increased debt; grants and loans to business given out one month and then frozen the next; tax cuts for corporations in the first years and then tax increases in this legislation. It goes back and forth. More importantly with this legislation, we see a government that committed itself to a tax freeze March 20, and all members spoke in favour of it on the other side; then we see a bill here today which has a series of tax increases. It's rather startling for the public to see this kind of dramatic shift in policy on virtually every major area of government, but more importantly with respect to this bill, we see it when it comes to taxes.

It's pretty clear, when you're dealing with taxes during an economic recession or slowdown, that the public should have a right to expect some stability — stability in our tax regime in particular and stability generally with respect to government policies. That's not what we see here. What we see in this legislation is yet again another dramatic reversal and shift in policy when it comes to taxes which, of course, are very important to all British Columbians and important with respect to dramatic shifts.

As we said, this is a government that cut taxes on large corporations when they were making money, and when they're not making much money in an economic slowdown, we see increased taxes. It's no way to run a province. It's certainly no way to run a government. We need stability, especially when there is this kind of economic slowdown. We don't get stability from this administration; we get the opposite. Dramatic policy shifts on every area of government policy are not productive. When you have significant policy shifts in finances and taxes, then clearly it introduces an element of instability to business, in terms of investment, and increased instability and economic insecurity in the public at large.

We will have a substantive debate on what has been called the notwithstanding clause in this bill. I just want to deal with the principle of that, because I think that's the heart of this legislation. What has happened is that we have this legislation over here which freezes taxes, and now they've brought in this bill here which increases taxes, and then there's a clause — section 12, I think it is — that says: "Notwithstanding the tax freeze, we've decided to increase taxes."

Think about it, Mr. Speaker. The possibilities are endless for notwithstanding clauses in legislation. We could have a balanced budget, and then we could have a little bill saying that notwithstanding that the budget is balanced, we are going to borrow $1 billion to pay the operating costs. There could be really tough environmental legislation, and then they could bring in another bill and buried in it would be: "Notwithstanding that tough environmental legislation, we've decided to loosen the rules for corporate polluters." It could be endless. We could have notwithstanding clauses slipped into all kinds of legislation to essentially abrogate other pieces of legislation.

It's not good public policy, Mr. Speaker. Aside from the erratic nature of this administration and aside from the instability it generates, it's not good public policy to pass laws one month and then the next month not rescind the law — because that would be politically more difficult for the government — but simply slip a notwithstanding clause into every piece of legislation that comes along, to abrogate the full impact of the previous legislation that had been passed.

It's not good public policy. In fact, it's rather silly, I must say. Again, it demonstrates that the government really is in chaos. It demonstrates a kind of incompetence. It demonstrates a misleading of the public for political ends, trying to tell them there's a tax freeze, and then saying: "Well, there still is a tax freeze, but we've got this little clause which allows us to raise these little taxes a few points." It's not healthy to have our tax regime befuddled by this kind of legislation, because that kind of accountability is important in a democracy, so that the voters can see tax increases and hold governments accountable to them; they can see their spending priorities and hold governments accountable for them. Instead we see a major fanfare to freeze taxes, and then slipping in a clause, in omnibus legislation like this, which makes that inoperable.

It's not good public administration. It's cynical and manipulative, and I think the public will see it for what it is. We intend to debate this at some length in committee, particularly that rather ridiculous section which deals with the notwithstanding clause, which abrogates a major piece of legislation passed just a few months ago.

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MR. LOVICK: Mr. Speaker, in addressing this measure my colleagues have already made the point that most of our comments and our criticisms will be reserved for committee stage, precisely because this is an omnibus bill. It doesn't have what we would normally call a principle behind it, except tax increases.

I think, though, that we ought to recognize that the impact of raising these taxes, though it will be discussed in committee stage, ought also to be addressed here, however briefly — primarily the impact on public confidence. This bill — called the Budget Measures Implementation Act, let us not forget — is talking about how the government is going to raise money to deal with the deficit it has produced — the largest deficit in the history of this province, we might add. That's what we're talking about: the measures required to come up with the money to satisfy that deficit. How do we pay our bills, given that we're in a deficit position? We're talking then about new taxes and tax increases.

The predicament is that this measure calls into question the credibility of this government and government in general. It does so, as my colleague points out, largely because it introduces something that has been referred to already as a notwithstanding clause. The measure in the bill, interestingly enough, isn't called a notwithstanding. It doesn't use that word, but it has precisely the same impact. It uses the term "prevails." This measure "prevails" over other legislation, specifically the legislation called the Taxpayer Protection Act.

It's worth reminding ourselves what we were promised in that other measure in order that we can understand the impact and the significance of this measure. The Taxpayer Protection Act was introduced in this chamber on March 21 with considerable fanfare. Indeed, most of us thought at the time that this was clearly a pre-election announcement. It was the government's effort to tell us that we were in good hands and that they would be saved — there would be no tax increases at all under this administration.

They made the point on a number of occasions and in a number of different ways. Let me remind members here of some of the things they said at the time. The bill was introduced by the then Minister of Finance. He said that the measure "places the rights of the taxpayers first and foremost in the province of British Columbia. The act regulates a freeze on the provincial taxes in British Columbia." The following day the same minister went on to say: "Taxpayers throughout Canada are complaining of the excessive burden of taxes."

MR. SPEAKER: Order, please. We're doing a previous bill. When bills come up that are almost intensely detailed, committee is the place to discuss them. Some bills that come before the House are almost all principle and one or two clauses. In this case it's the other way around. I just don't want members to slip from the good discipline they've learned over the last few years and lose that continued thrust of what we do in second reading. Will the member continue.

[10:30]

MR. LOVICK: Certainly I would not offend the rules of the House. Indeed the Speaker knows me well enough to share that conclusion. The point I am making, and I certainly don't want to belabour it unnecessarily, is that this measure of increasing taxes must in all fairness be seen in the context of the powerful promise and commitment made by this government less than three months ago telling us there would be no tax increases. That's the key point.

Mr. Speaker, let me just finish what the Minister of Finance at the time had to say: "Taxpayers throughout Canada are complaining of the excessive burden of taxes. Increased taxes and new taxes " Then he went on to say: "Our government intends to relieve the burden on taxpayers and give them the assurance that their taxes in British Columbia will not rise."

We in this chamber function, surely, on the basis of trust and of truth-telling. We have a sovereign duty surely to tell the electors what we intend to do, and to be straight and honest with those electors. What kind of credibility can this government have, can this Minister of Finance have, can this administration have, when on March 21 we are given what amounts to a covenant, a promise that there will be no tax increases? Now we are talking about a number of tax increases.

Beyond the fact that this measure certainly offends parliament and propriety, I think the problem is that it also calls into question the ability of government to manage responsibly. Insofar as this measure is talking about a number of initiatives to raise taxes in order to provide government with revenue, I think it's fair to speculate on what the impact of this measure will be in terms of the confidence of the community, the business community and the investment community. Who can look to this government with any confidence whatsoever that the rules of today will be the rules of tomorrow? Surely we as government owe the people above all else a clear sense of what our intentions are. If we don't do that, then understandably and predictably the people will register the fact that they do not have confidence in us, and they will show that lack of confidence in their spending, purchasing and investment decisions.

In other words, we're not talking about some abstract and esoteric principle here; we're talking about something that has a very significant definite practical application. We are going to address the particular measures in the bill in committee stage; we know that's where they're properly addressed. But I think I would be irresponsible if I did not point out the fact that what's wrong with this measure above all else is that it demonstrates once again that this government says one thing one month, says the opposite three months later and then asks us to accept that as normal and acceptable practice.

That is not normal and acceptable practice. We on this side of the House intend to remind the people of this province at every opportunity that it is never normal nor acceptable.

MS. PULLINGER: I too rise to speak against the principle — or perhaps the "unprincipledness" — of this bill. The purpose of this bill, as my colleagues have

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pointed out so eloquently, is to raise taxes in a number of areas for the people of B.C.

On one hand we have a taxpayer protection plan that was loudly touted just a few weeks ago. B.C. News, that political document the government sends around, promised there would be no more tax increases — a tax freeze — in this province. Yet just a few weeks later, we see this bill that effectively overrides that last legislation and imposes a number of tax increases.

What offends me in this is the fact that if this government wanted to come clean and be upfront about what it's doing, it would simply get rid of that last piece of legislation and increase taxes. Instead, on one hand we have this government trying to beat the drum of a tax freeze, taxpayer protection and how its fiscal responsibility allows it to spend, within the means of the taxpayers and not raise taxes. On the other hand, they're kind of sliding this bill in underneath the other one with a notwithstanding clause — or the effect of a notwithstanding clause — that will raise taxes. So the government wants it both ways: they want to be able to talk about freezing taxes, yet they want to raise taxes. That's simply unacceptable.

We all know that the tax freeze of a few weeks ago simply froze in the tax unfairness that has happened in the last four years. We've seen an increase of approximately $3,000 a year to the average family. That consisted of some 800 or more fee and tax increases over the last four and a half years.

In spite of that fact, we see this delusion that we're going to protect taxes — albeit tax unfairness. Yet the government is not coming clean or being upfront about what it is really doing right now.

This is clearly another attempt to delude the people of British Columbia and convince them of this government's so-called fiscal responsibility. The fact is that we've got a free-spending government which has free-spent its way into three almost elections, with a fourth coming for sure, and it seems to me that this is evidence that the government is out of control and out of touch with the priorities of the people of British Columbia. The principle of this bill shows that this government is prepared to raise taxes in spite of the fact that it promised just a few weeks ago that it wouldn't do that, that it was going to freeze taxes. That is very clearly deceitful.

The Minister of Finance made the remark that it is irresponsible to burden future generations with increased debt or deficit funding. That's precisely what's happened. I would argue that that's why we have this bill. This government has just brought in the largest deficit in the history of British Columbia — $1.23 billion. It's trying to pretend it's less, but we all know, and the Premier has admitted, that it is in fact a $1.23 billion deficit.

What we've got is a government which has brought in this huge deficit. We've got an election coming. They want more tax dollars so that they can put up more signs in Social Credit ridings with the minister's and the local Socred MLA's names on them, which we see coming up all over the place. This is simply a means of financing that next election campaign. We've got a government that's trying to talk about fiscal responsibility and tax freezes, and at the same time raising taxes which are most likely for its own political purposes. That's the kind of freewheeling spending we've seen from this government over the last two years.

[Mr. Ree in the chair.]

I would also argue that we have a government that's simply out of control. It's consumed with its own internal problems. This bill is another evidence of the fact that we've had a revolving-door cabinet. There are only five or six people who haven't been in this cabinet. It's almost impossible to keep track of who is in and who is out at the present moment. The consequence is that every time the revolving door swings a little faster, we get a new set of people and the policies take another flip-flop. That's precisely what we have in this bill. A few months ago we had the taxpayer protection plan; now we have a tax increase. The government is simply in chaos. Sadly, the consequence of that — the obvious duplicity in this plan where you want to have it both ways — is the creation of a lack of trust in politicians and the political process, particularly in this province. I think that's unfortunate indeed.

We also see this kind of bill that seeks to override or undermine — however you want to put it — another piece of legislation that's designed to do precisely the opposite of what this one is supposed to do. It's obviously going to create a climate of instability and insecurity in this province. That is the wrong way to go. Anyone knows that the first thing we need in this province — or anywhere else, for that matter — if we're going to have a solid economic base and a good business climate, is stability. We need to start with stability. This government, these people and this bill are undermining that very important fact. We see growing instability, and this will simply add to it.

As my colleague pointed out, there's also a growing realization that what we have in B.C. is tax unfairness. When the government brings in a bill to freeze taxes and then brings in another bill to raise taxes while it freezes taxes.... I'm sorry, but that just isn't going to wash with the taxpayers. It's not going to convince the people that there's tax fairness in this province.

We see tax increases in the bill at a time of recession. The time to add taxes is when you're at the top of the business cycle; we're now at the bottom of the business cycle. The government is increasing taxes at a most inappropriate time and in an inappropriate way. I would argue that that has more to do with this government's political agenda and the fact that it's quite desperate to repair the damage it has done in terms of deficit budgets and debt in this province than it has to do with any real agenda about taxpayer protection or sound economic management.

In summary, I would just like to reiterate that this bill is a very clear attempt to deceive the public. It has been touted as a temporary tax measure. I would like to ask the government: is it as temporary as the 1914 income tax measure that was brought in by another conservative government? I don't think that this is likely to be temporary as long as this government is in

[ Page 12650 ]

power. It's an attempt to deceive, an attempt by this government to have it both ways, and clearly the act of a desperate government that's prepared to do or say anything to hold on to power. We've seen a lot of other policy changes by this revolving-door government. This bill is foolish; it's another flip-flop in policy, a yo-yo theory of government; and it's not going to deceive the people of British Columbia.

This province is deeply in debt. This government has doubled the direct debt to government so that it now stands at approximately $9 billion. We've had three pre-election spending sprees. We see signs popping up all over the place in Social Credit ridings. Yet, on the other hand, we have the tax increases. This government has shown through this bill, once again, that it has lost credibility and the trust of the people of B.C. It certainly won't gain anything through this bill. I would argue that this government has simply lost the right to govern.

MR. JONES: This bill is about tax increases. The principle of the bill is really to increase taxes on the citizens of this province. It would be absolutely remiss of us on this side not to put this bill in context and point out some of the background relating to the principle of this bill.

To do that, I think we have to go back to earlier this year when we saw a television performance by the former Premier. That Premier understood that after raising taxes — some $3,000 per family — after raising some 800 fees and charges, in order to resurrect his political fortunes, he would use the key of peoples' pocketbooks. He would come out as the champion and would say: "We are going to protect taxpayers in this province."

A short time later, on March 19, we saw legislation introduced in this chamber to protect taxpayers by freezing tax rates. Two days later it was debated, and we had second reading debate on March 22. This was the centrepiece. It is important to put this legislation in context, and in context it is critical for this side of the House to point out the contradictions between the principle of this bill and the principle of other legislation. The context is what the principle of this bill is about. This was the centrepiece of the Social Credit re-election program. This was intended to be a tax freeze. The Finance minister, my friend from Burnaby-Willingdon, introduced this legislation. I don't even think he understood it at the time, because he didn't realize it was about tax-rate freezes when he talked about freezing taxes rather than tax-rate freezes. But we had a full debate on that legislation. We had a division in this House that the members opposite called for, and we voted unanimously to approve that legislation at that time.

[10:45]

My friend from Esquimalt-Port Renfrew says that the government side didn't even wait until the election to break their promise, because with this legislation we're debating in second reading today, we see that broken promise. This is not just a broken promise: this is the breaking of a law, a law-breaking bill. This wasn't just a promise. This isn't just reneging on a promise; this was a statute on the books of British Columbia that is being overridden by this legislation. This was legislation approved unanimously in this chamber. The TV cameras were here; the Clerks were in their chairs; the Speaker was in his position; the members were all in this House and had their votes recorded. This was legislation approved in British Columbia with the full weight of government behind that legislation.

What happened? What do we see now after royal assent by the Lieutenant-Governor, all the money spent drafting that legislation and the time spent in this chamber? We see this particular bill here before us, which totally contradicts the law of the land currently in the statutes of the province. Taxes are now being collected that are contradictory to that bill. People are paying increased taxes in a number of areas, in terms of surtaxes, corporate taxes and cigarette taxes that are all breaking the law approved on March 22, 1991, in this chamber,

This really makes me wonder. What the hell are we doing here when two months ago we unanimously passed legislation that said we were going to freeze tax rates in this province, but a few weeks later we come in here and say to the people of British Columbia: "Whoa! We were wrong a few weeks ago. We didn't really want to freeze tax rates. We didn't really want to protect your pocketbook. What we wanted to do was fool you." And it's that side of the House that is playing games with the people of British Columbia.

They're not just making a mockery of the democratic process; they're not just showing contempt for this Legislature. They are showing contempt for the whole democratic system in British Columbia. How can a government elected by the people try to fool the people with that deceptive approach and expect to have any credibility? What a desperate government we see opposite!

What we're seeing is the last gasp. These about-face measures are the last fumes, the last gasps, the last failed attempts at trying to resurrect their popularity with the people of British Columbia. What an irony, to go about achieving popularity by attempting to deceive the people!

This is a confused government; it's an erratic government. They freeze.... They take away the surtax one year and bring it back the next. They reduce corporation taxes one year and bring them back the next. We've had four Finance ministers in a few months. It is time to end this confusion. It is time to return stability to this province. Clearly it's time for a change of government.

HON. J. JANSEN: It's indeed interesting to listen to those members opposite saying: "On the one hand this and on the other hand that." Time after time they stood up in this House and talked about the need to extend spending even further. They want to spend more and more on programs, and somehow that spending is a judge of performance — the more you spend, the better managers you are. Time after time, whether it's forest renewal or other programs, it's continually: "Spend

[ Page 12651 ]

more money." There isn't anything else over there except: "Spend more money."

What's interesting is: where is that money coming from? Is it to come from some money tree somewhere? Do we grow little money trees in the province and pull money from them? Where is the money to come from, members? Well, they have a solution in some parts of this country: it's called a deficit. "Don't worry, just spend more money."

DEPUTY SPEAKER: Order, please, gentlemen. The Chair is having trouble hearing the minister.

HON. J. JANSEN: Pardon me?

DEPUTY SPEAKER: There was silence during the other part of the debate; maybe we can have the same situation now.

HON. J. JANSEN: In fairness to that other group over there.... I'm not sure what identity they have anymore, because they have no leader and no sense of unity over there. They're all over the landscape. But I want to tell you that they must be really sensitive about what's happening. On the one hand they said we've got to throw out compensation fairness, and then on the other hand the Leader of the Opposition says: "We can't afford 7 percent for teachers; we've got to find a solution." Well, what is it? They don't have an answer. They're simply saying: "We want more programs. We don't want any more taxation." Where's the answer?

MR. BLENCOE: On a point of order, I know this minister got caught in the revolving door of ministers, but we have a bill before us that is clear in its intent. Perhaps, Mr. Speaker, you could bring the minister back to the legislation before us so that we can properly debate this important bill.

DEPUTY SPEAKER: The member has a partially viable point of order. The Chair has allowed a certain latitude in entering the debate by the opposition, so would the Minister of Finance please continue and close debate on Bill 3.

HON. J. JANSEN: Mr. Speaker, they have continually tried to spend more money, but they have not identified the other side of the equation. What I'm asking that other side is: where is that equation to come from?

MR. BLENCOE: On a point of order, perhaps the minister would take his seat and recognize the rules of the House. The minister referred to this side of the House as trying to spend more money. This is Her Majesty's Loyal Opposition on this side of the House. That is the government that spends money and raises taxes, which they are doing. Perhaps, Mr. Speaker, you could bring that to the attention of the minister.

HON. MR. STRACHAN: The second member for Victoria has risen on a fraudulent point of order. What he's clearly doing is entering into debate. He didn't take the opportunity to do so before when he had the opportunity in second reading and is now attempting to enter into debate using fraudulent points of order, and I hope Your Honour recognizes that.

DEPUTY SPEAKER: The Minister of Finance is closing debate on the principle of Bill 3. Please continue.

HON. J. JANSEN: The choices are quite clear, aren't they? The choice is to eliminate programs. Is that what you want — cut back programs? I hear members across saying yes. I hear them saying that. I'm going to hear them say that it's okay to increase the deficit. It's some airy-fairy scheme to get more money — deficits are okay. "Don't worry about deficits. We'll worry about that tomorrow. Tomorrow's another time." Or do you raise taxes?

You know, they've complained about this government not being consistent. Well, let me tell you what we are consistent about. We're consistent about health care: we have the best health care in the country in this province. We're concerned and consistent about education, and we're concerned about our social programs and consistent about them. We're going to do the best job in this country on those programs, members opposite.

But what can be said about the other side is that they are not inconsistent. They have consistently not taken a position on anything. Their faceless leader is sitting on a fence all day not wanting to take a position on whether he should raise taxes or whether he should raise deficits or whether he should cut back programs. What is he doing? Absolutely nothing. All they talk about are notwithstanding clauses. They talk about this government not being consistent, and then talk about the burden of taxation.

Maybe what they should look at....

DEPUTY SPEAKER: The second member for Victoria on a legitimate point of order.

MR. BLENCOE: Mr. Speaker, just a minute ago I asked the minister to speak to the principle of the bill. We are not the issue in this debate; the issue is the government's legislation and its increasing taxes for the people of the province. That is the issue, and perhaps, Mr. Speaker, you could bring that member to order.

DEPUTY SPEAKER: The Minister of Health on the same frivolous point of order.

HON. MR. STRACHAN: You described it as frivolous, Mr. Speaker. I'll agree with that.

Mr. Speaker, the second member for Victoria rose, not on a point of order, but in fact to enter into debate. Regrettably, he cannot. We are into the minister's closing remarks on second reading. If the member wants to continue debate he may do so in the committee stage; but he's obviously missed his opportunity in second reading, and the point of order is not a point of order.

[ Page 12652 ]

DEPUTY SPEAKER: The Chair appreciates the assistance of the Minister of Health. The Minister of Finance closes debate in second reading on the principle of the bill.

HON. J. JANSEN: Perhaps, Mr. Speaker, the members opposite could.... I understand their sensitivity about these things, because it does get down to the quick, and they're not very quick about some of the aspects of this budget.

But I've heard the comment over there that in a time of economic downturn we should not be raising taxes. What they have to understand is that we have not done what others have done in this country. We have not put in place a minimum income tax. We have not put in place regressive taxation. The tax measures that we have announced are income-driven, members.

Let me tell you a little bit of economic analysis here. When you have income on one side, then you have a taxation on the other side. If you don't have any income on one side, you don't have taxation on the other side. What other provinces have done — and I'll name one of them: Ontario — is to put in place minimum taxes. In other words, if you have no income, you still pay tax. Is that what you want? Minimum corporate tax, inheritance taxes, payroll tax — every type of tax that you can have?

[11:00]

But you know what should be done, Mr. Speaker? The members opposite should spend a little time looking at schedule H3 in our budget. I will spend some time with their Finance critic and run over this budget with him.

DEPUTY SPEAKER: Order, please, hon. member. Brochures, documents and such should not be displayed. This is a place for verbal debate.

Would the minister please continue on the principle of the bill.

HON. J. JANSEN: Mr. Speaker, I didn't want to display a document, but this is the budget document. Others opposite were doing it to camouflage.... I wanted to refer the member opposite to schedule H3. It's a very telling document, because it talks about the burden of taxation. It incorporates the elements of our tax initiatives.

MR. BLENCOE: On a point of order, Mr. Speaker — I think you were about to do it — perhaps you could bring the member back to order. The schedule he refers to is not in the bill, and the minister has been here long enough to know that. Perhaps he could stick to the principle of the legislation. It is his legislation, Mr. Speaker. We assume he knows his own legislation.

DEPUTY SPEAKER: The point of order is valid, in that we are not on the budget debate. I think the minister was present when the Speaker commented about that earlier.

Would the Minister of Finance please continue on the principle of Bill 3.

HON. J. JANSEN: Mr. Speaker, the member keeps jumping up and down like a jack-in-the-box. He must have something wrong with his chair.

[Mr. Speaker in the chair.]

I have talked about the burden of taxation, which is a reflection of tax rates, and tax rates are what we are talking about here in this legislation.

The members opposite talked about the fact that this province has put in place a number of different taxes over time, but the cumulative measure of those taxes was reflected in the budget. That budget document does an analysis of taxes from province to province, and it also compares the deficit burden. Others have talked about this airy-fairy scheme of trying to use deficits to finance their programs. Deficits are something they don't have to worry about over there. They keep on saying: "Don't worry about that. That's for the future. That's for someone else to worry about. We're not worried about that."

The reason we have placed the tax measures in this bill is to enable our programs to continue. When we look at the result of those revenue initiatives, it shows very clearly that we continue to be the best fiscally managed province in this country, and we're going to stay that way. This province continues to display the fiscal restraint and the responsible....

MR. SPEAKER: Order, please. We finished the budget debate some time ago. Minister of Finance, continue on the principle of the bill only, not on other matters that you may wish to discuss at another time.

HON. J. JANSEN: Thank you, Mr. Speaker, for that admonition. I intend to talk, as much as possible, about revenue measures. It was that side of the House that compared our revenue measures to our programs and to the fact that it reflected a continual increase of burden on taxpayers. I wanted to reflect what was truly the case, which is a much different picture. It's a concern.

I continue to ask that those members opposite finally get off the fence and take an issue and tell the people of the province of British Columbia where they stand. Because they continue on the one side this, on the other side that. Just for once, tell the people: if you don't want taxation and you want to spend more money, what's the solution? You see, on this hand and on that hand.... Where are you coming from, members opposite?

MR. SPEAKER: Order, please. Members, we've been in this parliament for almost five years; therefore members will obviously know that this is a line of debate which should take place in committee and especially during the estimates of the Minister of Finance, when the Chair will not be present. We're on the principle of the bill, and that's what you have to stick to.

HON. J. JANSEN: The principle of this bill, Mr. Speaker, is fairness — fairness and a reflection of the

[ Page 12653 ]

concern that we have for our social programs in the province. It's good fiscal management and good fiscal control of government. It's a government that's going to be returned time and time again.

MR. SPEAKER: Order, please. It will be necessary for the minister to move the motion if he wishes the bill to proceed.

Just so that we understand, the government House Leader cannot move the motion. The motion must be moved by the Minister of Finance.

HON. J. JANSEN: Mr. Speaker, I now move second reading of Bill 3.

Motion approved.

Bill 3, Budget Measures Implementation Act, 1991, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: I call second reading of Bill 4.

PROPERTY PURCHASE TAX
AMENDMENT ACT, 1991

HON. J. JANSEN: Bill 4 introduces a number of amendments to the Property Purchase Tax Act. These amendments will preserve the integrity of the tax, improve the administration of the act and introduce an important new exemption for land acquired for environmental purposes.

The environmental exemption is provided in support of those British Columbians who are working to preserve important or sensitive environmental areas for the benefit of future generations. The amendment will allow individuals or groups who purchase land for preservation or conservation purposes to be eligible for an exemption, provided the following conditions are met.

A conservation covenant approved by the Lieutenant-Governor-in-Council and in favour of the Crown must be registered on title to the land in the land titles system. The covenant must require that the land will be protected, preserved, conserved or kept in its natural state, and may include other requirements the Lieutenant-Governor-in-Council considers necessary to ensure the provision of exemption in the public interest. The covenant may not be amended or removed without the approval of the Lieutenant-Governor-in-Council, and if removed, the property purchase tax will be payable on the fair market value of the land at the time the covenant is removed.

Although this exemption is effective May 22, 1991, purchasers who have purchased land on which property purchase tax has been paid and who now meet the requirements outlined above may, by registering an approved covenant on the land, apply for a refund of tax.

Let me stress that applications for exemption will be reviewed very carefully and will be approved by the Lieutenant-Governor-in-Council only if they are in the public interest.

Bill 4 also introduces two amendments to preserve the integrity of the high-ratio-financing tax relief program. This program targets tax relief to homebuyers in need by providing relief to purchasers of moderately priced homes who require high-ratio financing to purchase a home. The very competitive mortgage market has resulted in some financial institutions providing mortgages for the full purchase price of a home even though only a portion of the mortgage is actually used to purchase the home. The result is in that in some cases the relief program is available to homebuyers who are not in need of relief. An amendment is therefore introduced to ensure that only that portion of the mortgage which is actually applied to the purchase of the home may be used to qualify for tax relief.

The second amendment to the tax relief program will allow tax relief to be provided to purchasers who through no fault of their own fail to qualify only because their mortgage and transfer documents are not registered concurrently, as is required under the program.

The exemption for transfers of principal residence between related individuals and the definition of principal residence is also amended. Prior to this amendment, British Columbians whose principal residence was situated on a parcel of land larger than 2.03 hectares were — unlike other British Columbians — unable to transfer their home to family members and be exempt from the tax. The amendment ensures that all British Columbians are able to benefit from the exemption for transfer of principal residence to related individuals. The exemption will be for the value of the principal residence and other residential improvements, plus the value of up to 0.5 hectares of land calculated on a proportional basis.

[Mr. Ree in the chair.]

An amendment is also introduced to remove a tax avoidance opportunity resulting from a recent court decision. In order to preserve the intent of the act and to protect this important revenue source, the act is amended to require both the legal and beneficial ownership of the property to be taken into account when calculating the tax payable on fee simple transfers. Let me emphasize that this does not reflect a change in government policy; the tax will apply as before.

Two further exemptions are amended to reflect the original intent. The exemption for transfers of family farms between family farm corporations and their shareholders is amended to clarify that family farm corporations with single shareholders are also eligible for the exemption. The exemption for transfers to the public trustee and back to the settler or the settler's estate is amended to clarify that the exemption may not be claimed by corporations.

Taken as a whole, these amendments improve the fairness in administration of the act while also providing an important new environmental exemption.

[ Page 12654 ]

I move the bill be now read a second time.

MR. CLARK: This is largely a technical bill and has some very modest improvements, but improvements nonetheless, to the legislation in a variety of areas: high-ratio-financing relief and the like. We certainly have no problem with it. I do have some concerns which would be better canvassed in committee, and certainly we will do that. I'd like to briefly mention a couple, though.

First of all, it's very unfortunate that there aren't some other amendments to the property purchase tax to try to deal with the corporate loophole which allows corporations to transfer shares rather than property and therefore not pay the property purchase tax. We on this side of the House would have preferred more relief for first-time homebuyers. For example, it could be paid for by closing the corporate loophole. Some improvements are needed to the tax which could and should have been accommodated, but hopefully, in a few months we'll see those changes.

I would like to briefly mention a concern I have about the conservation covenant, which is a very positive move. I see the Minister of Environment here. This is a positive move in terms of exempting the property purchase tax for conservation covenants to protect land for parks, wilderness or the like.

Interjection.

MR. CLARK: The problem is, Mr. Minister, that this only deals with the Crown, and it would have been fairly easy and more appropriate to exempt, for example, individuals who convey conservation covenants. The private sector has been leading on conservation covenants, not the Crown. So this bill appears — and I'll canvass it in committee; but I'll give the minister notice, maybe through him or his staff — not to deal with private individuals creating conservation covenants and being exempt from the property purchase tax, which is more important than protecting the Crown from the property purchase tax. The same is true for the Islands Trust, for example, and for Crown corporations, regional districts, municipalities and the like. That would be viewed much more positively. It would be a very positive step towards encouraging conservation covenants, encouraging private sector individuals and municipalities and the like to move in that direction. It would have been fairly modest from the government's point of view. While this is a positive move in terms of conservation covenants, with some minor amendments it could be much more significant and much more worthwhile. Nevertheless, it's still a move in the right direction.

With that, we will canvass in more detail this rather technical bill and its changes to the property purchase tax in committee stage.

MR. BLENCOE: I just want to add a few comments in my capacity as the Housing critic for Her Majesty's Loyal Opposition. Over the last year or two this side of the House, through our policy committees and advice we received from the industry — those involved in housing construction and providing accommodation for young British Columbians and families, those who believe home-ownership is still the ideal and the challenge that people wish to attain....

One of the issues we have canvassed consistently is that we would like to see some consideration for the first-time homebuyer in terms of this tax. It's extremely difficult these days for the first-time homebuyer to break into the market, because of the spiralling property costs of home-ownership. You've only got to read the real estate guides to see how difficult it is for that first-time buyer to attain the dream of a home. We believe that to help in that dream — that ideal — it would be extremely useful for the government to consider and introduce exemption from this property purchase tax for the first-time buyer. You could recover the cost — if the government is concerned about that — as my colleague indicated, by closing the loophole for the corporate exemption — the corporate escape of this tax.

[11:15]

In our estimation and our work on home-ownership and some of the issues we have been covering — policies we have been developing, which we'll be putting to the people of the province in the days ahead — one of the things that could be done very quickly, and that would be financially responsible, is to exempt the first-time buyer from this tax. Give a break to young British Columbians and young families who want to attain their first home. I put that to the government again, as I have done many times. Let's consider home-ownership in a far more open way. Here is one way that we could do it: give the first-time buyer a break on this tax. We again put that to the government.

HON. J. JANSEN: I don't have many further comments. The member for Victoria who just spoke talked about the need for a housing initiative and focused just on the Property Purchase Tax Act. I think that's a pretty small part of a solution. I have indicated in the budget speech that I will be putting forward for your consideration in the future a housing program. It will be far more dynamic, imaginative and aggressive than what is being put forward by the member opposite. If you look at it, what he suggested in his own NDP housing proposal would be funny if it wasn't so out of touch with reality. But we intend to bring forward a dynamic proposal, and that's part of our commitment to you.

Interjection.

HON. J. JANSEN: The member says: "How long is it going to take?" What we're finally going to do is produce not a substandard document, but one that makes a lot of sense and which is effective and good for the people of British Columbia. I will keep my comments on this for the Committee of the Whole, which will be done soon.

I now move second reading of Bill 4.

Motion approved.

[ Page 12655 ]

Bill 4, Property Purchase Tax Amendment Act, 1991, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. STRACHAN: Mr. Speaker, I call Committee of Supply.

The House in Committee of Supply; Mr. De Jong in the chair.

ESTIMATES: MINISTRY OF FINANCE
AND CORPORATE RELATIONS

On vote 31: minister's office, $317,593.

HON. J. JANSEN: I would like to make a few introductory comments to summarize the '91-92 estimates for the Ministry of Finance and Corporate Relations.

The estimates for ministry operations are comprised of three votes: vote 31 for the operation of the office of the minister; vote 32 for the operation of the eight divisions of the ministry — namely, registries and ministry support services, Treasury Board staff, economics and policy, government personnel services, planning and statistics, the office of the comptroller-general, revenue operations and the Financial Institutions Commission; and finally, vote 33 for the operation of the compensation fairness program.

I am also responsible for vote 64, management of public funds and debt; vote 65, contingencies (all ministries) and new programs; and vote 66, government efficiency projects, which are shown at the back of the estimates under "Other appropriations."

The total expenditure requested for ministry operations in votes 31, 32 and 33 amounts to $75.53 million.

As well as funding in votes, the ministry operates self-sufficient programs through the following six special accounts.

The British Columbia Securities Commission. This special account provides for the operation of the commission and the cost of administering the Securities Act and the Commodity Contract Act. The fee revenue is obtained through the industry and is credited to the account, and expenditures related to operating the commission are charged to the account.

The low-interest loan assistance revolving fund, which was established to provide low-interest loans to firms in various business sectors. Most of the loan portfolio was privatized during '89-90; however, the remaining loans are being managed by the ministry's loan administration branch. No new loans are being authorized.

Provincial home acquisition account for the purpose of paying grants to British Columbia residents obtaining a home and to make loans secured by second mortgages. In June 1989, most of the second-mortgage portfolio was sold to private sector lenders.

Provincial treasury operations. This special account provides for the operation of provincial treasury including investment, debt management, banking and cash management and loan administration services to its clients. Provincial treasury expenditures are charged to the account, and fee revenue earned from clients is credited to the account.

Provincial treasury revenue. This account provides for net revenue generated from various financial agreements managed by the ministry to be credited to the account.

The insurance and risk management account is for the purpose of providing insurance and/or risk management services to government. Revenues to the special account represent amounts paid by participants, and expenditures are cost-related to administering risk management services, agreements, self-insurance services to hospitals, schools and colleges and for the settlement of claims and purchase of insurance.

My ministry's purpose and goal is to maintain strong fiscal integrity in this province. This is achieved by ensuring that public money is collected, managed and disbursed in the public interest, and that the provincial marketplace is fairly and effectively governed and has the confidence of all who use it. Our strong fiscal management is supported by the fact that our debt as a percentage of GDP and our debt per revenue dollar is the lowest in Canada. Only 4 cents of each tax dollar in B.C. goes to service provincial government debt; the rest pays for programs and services. Our provincial tax burden is the second lowest of all provinces in the nation.

In keeping with one of our ministry's goals of increasing productivity and providing better service to the public, a number of initiatives will be undertaken during 1991-92 which are funded in our ministry's budget. Some of these are: redefining and strengthening our federal-provincial fiscal relationships; developing a compatible regulatory framework for financial institutions across the country; expanding the investment diversification initiative to new clients and new asset classes; supporting government-native land claim negotiations with sophisticated statistical analysis and information; managing the compensation fairness program to ensure that public sector union contracts are settled within the taxpayers' ability to pay; directly negotiating over 30 expiring master and component agreements within the guidelines established for this program; finishing the census undercount project in support of the 1991 census, which should increase British Columbia's share of federal fiscal transfers; developing privatization opportunities such as tax remittance processing through banks to provide better public service and cost savings; rewriting the Company Act legislation after comprehensive public consultation; implementing government efficiency projects to improve the delivery and cost effectiveness of programs. Included will be service partnership programs and value-for-money management reviews and audits.

Mr. Chairman, that concludes my brief review of the ministry's 1991-92 estimates. I'm sure we will have some discussion in committee stage as time goes on.

I'd like to introduce the staff who are here with me. First of all we have our deputy minister, Doug Horswill; John Powell, our senior financial officer, the senior bean-counter, who can give you answers re-

[ Page 12656 ]

specting some of the accounts; and Gary Moser, who is familiar to most of you. So with that, I'll look forward to listening to your questions and responding to them.

MR. CLARK: For the Chair's guidance and for the minister's guidance, as is usual, I'll canvass all the questions in the first vote around the minister's office, and then we won't have to deal with subsequent debate or discussion around the other votes. I'm sure that we can canvass all the relevant issues in the first vote.

I would like to begin today, and particularly defer to my colleague the first member for Vancouver-Point Grey, with respect to some discussions around pay equity, affirmative action and issues surrounding the government personnel services division. I'm pleased that Mr. Moser is here as the ADM responsible. Perhaps we can canvass, as we did last year — hopefully more briefly this year — some of the debate surrounding the administration of pay equity.

I will just begin by asking the minister to give us some indication as to the delineation of responsibilities between his administration and government personnel services division, in particular, and the Minister of Women's Programs. As we had this discussion last year, it was quite clear that the government personnel services division was in fact the implementation arm of government dealing with that policy. That became apparent during the estimates. Perhaps having had one full year of discussion and debate around that, those lines are a little better drawn.

In fairness, Mr. Chairman, those are always difficult questions for government. We have these line ministries, what we call vertical ministries, that deal with functions; then we have horizontal ministries, which cut across the line functions. So it's not an easy question in terms of governments trying to come to grips with policy issues which cut across ministries. Perhaps we could just begin that discussion with the minister explaining the delineation of responsibilities with respect to government personnel services division and the implementation of those major policy initiatives, and the Women's Programs ministry — how they interact.

HON. J. JANSEN: I'm pleased to respond to that question. The ministry, as I've iterated in my opening comments, is responsible for the negotiation of collective agreements and is underway in a number of areas respecting those agreements.

The pay equity program that we announced and committed to in our budget continues to be driven by the women's ministry, and that is an ongoing program. We are working with the unions responsible to look at this whole program and the implementation of it. We have spent a portion of funds already at the low end, in terms of the bottom end of pay scales, to achieve equity. Some of the larger questions remain unresolved, and that has been looked at by now in terms of getting some outside assistance to provide advice respecting some of these issues. They are of concern to a number of groups — those related to the health care industry, for example, and also the BCGEU. I think it would be of benefit to all parties to have in hand information to enable us to come to some conclusive solutions respecting the implementation of the program.

[11:30]

MS. MARZARI: The first question that was put to you, Mr. Minister, had to do with the interrelationship or interaction between your ministry and the ministry for women. He was not asking about problems that you are facing; he was not asking about the construct or the infrastructure of your pay equity program. He was asking: what do you do versus what the women's ministry does? It was a question of jurisdictional interface, if you will.

I think I'll just rephrase that question for him. Are you in charge of the pay equity program? Is the minister for women in charge of employment equity? Do you get together? What kind of staff do you have working on it? Who talks to whom, and over what issues?

HON. J. JANSEN: I'm somewhat surprised at the question. It would indicate that somehow our ministries in government operate in isolation of each other. When an issue so important as pay equity is brought forward, it is a comprehensive issue that involves all ministries. It is an issue we have committed to in government with that kind of importance.

Obviously pay equity involves impact on union agreements and bargaining units. That is why this particular ministry is involved. Women's programs, families and government services are part of the pay equity issue because there is that concern in this issue. We're both involved and will continue to work together to find solutions to this problem.

MS. MARZARI: I'd like to quote from a 1990 Canadian Advisory Council on the Status of Women report called Women and Labour Market Poverty. The quote is from a part-time educational worker here in British Columbia:

"We're lucky to have a union. Sure, it's still part-time work, but last year they tried to cut back our hours even further. We refused to accept shorter hours as part of the bargaining package. What would have happened without the union?"

The relevant quote here has something to say about public sector employment of women and what has happened over the last few years:

"The public sector has often been a model employer with regard to permanent jobs, setting an example for other employers to follow. This has been the case with respect to employment equity, maternity leave and paid vacations. Obviously, retrenchment and restraint in the public sector make the leadership role more difficult; the increasing use of temporary contract work is evidence of this. Privatization, subcontracting and the increased use of casual, temporary and part-time workers are all occurring in the public sector. While the newly employed workers are likely to be women, such as in privatized postal services, they will not have secure public sector jobs that pay well and offer good benefits and advancement opportunities; but rather, they will become part of a more marginalized private sector workforce."

[ Page 12657 ]

Last year when we addressed the issue of pay equity in this House, we attempted to solicit or retrieve from your estimates some figures on the numbers of women who have been pushed into privatized agencies to do the clerical work that was formerly done by full-time public clerical workers — civil servants. Those numbers were not readily available last year, although we tried to come at it from four or five different angles.

Does the minister have statistics this year on the number of women workers — mainly clerical workers — who over the five years from 1985 to 1990 have been put into the private sector, or the number of FTEs that have disappeared into the private sector contracting arrangements?

HON. MR. STRACHAN: I'd ask leave to make an introduction please.

Leave granted.

HON. MR. STRACHAN: Mr. Chairman, I am making this introduction on behalf of the Premier. The reason I'm doing that is that the Ministry of Finance staff are sitting at the Premier's desk, and you can speak only from your own desk. Rather than move the staff, I will make the introduction from my desk on behalf of the Premier — so everyone understands what I'm doing.

I would like the House to welcome two classes of grade 5 students from Simon Cunningham Elementary in Surrey and their teacher Mrs. Wallace. Again, this introduction is on behalf of our Premier.

HON. J. JANSEN: First of all, I'm not sure of some of the comments that were read before the question. I'm trying to understand what's behind the question.

The number of women that are affected. There are approximately 20,000 employees working in the female-dominated classes, and it is expected that our pay equity program would apply to those.

In terms of the FTE complement.... Again, I'm somewhat puzzled by the question. If we have a special program or a special contract that is implemented, surely members opposite aren't suggesting that those special programs not be introduced or that the special programs should involve permanency in terms of staff when they are of a specific tenure. We employ tax consultants, special audit staff; we do demographic analysis and forensic accounting; a number of hearings and appeals and arbitrations. Those are all people that are there for a specific task and a specific purpose, and once that purpose is completed they're gone.

The actual FTE count over time is a number that has a number of elements to it. It reflects our privatization initiative and highways privatization. It reflects too the downsizing of government. I think that in this age of economic concern government has to take a smaller portion of the economy. That feeling, unfortunately, isn't shared nationally. I can get to some of those other thoughts because I just returned from a Finance ministers' meeting where we debated some of these issues and surprisingly came to consensus across Canada, save and except one.

In '83-84 our FTE complement was at roughly 37,600. It dropped to a low of 26,700. We expect this year, because of the special programs that we've put in place, that it will increase to 27,993 in the budget document. That would be all employees combined in a 1991-92 authorization of FTEs, which includes our new programs. As I indicated earlier, the biggest growth area is forestry, where the FTEs will rise by about 500. It's gone from 37,000 to around 28,000 people.

MS. MARZARI: The minister expressed some confusion over why my opening remarks would have anything whatsoever to do with the well-being of women in the public service; then he proceeded to give me exactly the reasons why they were inextricably connected. The fact of the matter is that women's jobs in the public service in the last five years have been drastically cut. The stability, permanence and benefits that come to a woman working full-time in public service have been removed. Women have probably been the ones let off first when the time came. Since the minister doesn't have statistics on the number of women laid off, I can't prove that, but I would appreciate it if the minister would take a look at the 37,600 he talked about in 1984-85 and find out how many of the 9,000 to 10,000 laid off were women and what positions they held in the system before the layoff notices came. I would very much appreciate receiving that.

When a woman leaves a full-time job.... Mind you, she's usually being paid 60-cent dollars in that job equivalent — "equivalent" meant male work. When she leaves the fringe benefits that come with that unionized full-time job, very often she is relegated to a workforce which is not going to give her the same benefits at all. In fact, very often we may find that that woman could well be put into a working poor situation. The statistics coming out of StatsCan would suggest that the wage gap between men and women is not doing very well in this country. Although the latest stats coming out of Ottawa show that the wage gap may be narrowing for middle-income earners, wages for males are still increasing faster than wages for females.

A quote through Canadian Press from a StatsCan report suggests that during the years 1985-89 the middle employment income level for women rose by 26 percent and only rose 20.7 percent for men, but in 1989 women's mid-level employment income was still 55.9 percent of men's, up from 53.6 percent in 1985. We know that in British Columbia, during that period 1985 to 1989, the wage gap between women and men dropped from 65 cents on the dollar for a woman to 61.8 cents on the dollar.

One cannot put full blame at the foot of the provincial government. One can only suggest that as the provincial government was laying off women workers in an attempt to do its ideologically driven downsizing and privatization routine, according to the auditor-general's reports and other reports it has tended to be more expensive than keeping those jobs

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and services in the public sector where they're accountable.

[11:45]

What has happened is that women have become poorer in this province, and I would like the minister to make the connection between the fact that we have a wider wage gap in this province now that he has taken a smaller group — 20,000 he claims — of female workers in our workforce in British Columbia and offered them something called pay equity. Well, Mr. Minister, women of this province want you to know that it's a little too little, a little too late, to offer 20,000 female employees inside the British Columbia system a pay equity program when 10,000 and perhaps more have been let go in the last five years and cannot avail themselves of that program whatsoever.

In fact, it's important perhaps to point out now that there are 670,000 women workers in the province of British Columbia. Offering 20,000 a pay equity program isn't exactly what they were asking for. Some 670,000 women remain outside the purview of the program you have offered.

Can we get back to the business of the actual numbers of women included in the pay equity program? Would the minister be good enough to be as specific as he can? He talks about 20,000 FTEs. Can he speak to the actual numbers of women who are involved and qualify as part of this inside club for the British Columbia pay equity program? Would he be good enough to spell out the number of dollars which are presently available in the pay equity program, for the '91-92 fiscal year?

HON. J. JANSEN: Mr. Chairman, let me clarify. There wasn't any confusion on my part. I was trying to understand what the member was reading and what her question was, because the discussion had somehow changed.

The comment or the inference that the reduction of FTEs from 37,600 in '83-84 to something in the order of 28,000 people.... To say that that shrinkage was mostly women is absolute nonsense. We will bring back those figures to you, but I would think, if I had to hazard a guess, 75 percent of those would be men. I will bring that back to you, and I think you'll find that in fact the percentages have been very favourable in terms of increasing the number of women in our workforce. So let's put that fallacy to rest.

The other comment respecting privatization.... I'm just wondering what auditor-general report the member was reading, because I recall a somewhat different auditor-general comment respecting the management of privatization. I think that you will have to agree, members opposite, that privatization has worked well If you want to debate that....

Interjection.

HON. J. JANSEN: Here's the member for Victoria. He can judge the private sector as no other person can. If it doesn't work by government and if it doesn't work privately, then government obviously has to do it over again and spend more money. It's again getting back to spending money. The whole philosophy over there, and it will be reflected in our budget debates, is that if you want to spend more money you're doing a good job. The more you spend, the better a job you're doing. That's the whole philosophy over there — spend money. Forget about the taxes, forget about how to raise those things, because deficit is where it's coming from. Just keep on paying more deficit, and that's fine.

Well, Mr. Chairman, I want you to know that we don't think that way. We have a responsibility to the taxpayers and the future taxpayers of the province, and we're going to exercise it when we give that commitment.

Respecting pay equity — the balance of her question — she asked how much was being paid. We originally announced $40 million. That commitment still stands, but I expect over time, when negotiations are complete, there may be another component to that. I don't know at this time; I don't prejudge negotiations. We have expended almost $12 million of that $40 million. This covers 27,500 members in the public service. As indicated earlier, we are negotiating with BCGEU to look extensively at what other problems there are and how best to resolve those. In fairness to us and the employees, to jump into this without understanding the problem fully and finding a solution that makes everyone happy is not the right way to go.

Over time we intend to give you updates on what's happening with our employment equity program.

MR. REID: Mr. Chairman, may I have leave to make an introduction?

Leave granted.

MR. REID: In the members' gallery today are two very special guests I'd like the House to recognize. We have John Irwin, age 10, who is on a ventilator-dependent system which this province has implemented. He has an attendant nurse with him. We also have Ronnie Curtiss, a cerebral palsy patient. He's in the integrated regular school system and is here with a teacher's assistant. I would hope that this House will show them a very special welcome.

MR. CLARK: I would like to ask some very specific questions to clarify the matter for me. The minister said that there were, I think, 27,600 full-time equivalents, but then he just said that the BCGEU component was 27,500. Obviously that doesn't quite jibe. So for the sake of clarification, could the minister tell the House.... I'll just give you all the questions in a row, because they're specific questions. What is the total number of full-time equivalents actually on the payroll? Secondly, how many of those people are women? Thirdly, what is the wage gap between those two groups in the public service? Fourthly, how many people are hired on a contract basis? How many FTEs on contract are women — roughly speaking? What is the gender gap with respect to contract employees? There are six very specific and hopefully very easy questions for the minister to answer.

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HON. J. JANSEN: I indicated to the committee earlier that there were 27,993 FTEs — that's a full-time equivalent — on the payroll. What I said also was that employment equity applies to 27,500 BCGEU members. That's not full-time equivalent; those are also part-time and auxiliary workers., obviously, that would be included. First of all, let's correct that mistake.

I told you earlier I'd bring that answer back to you on the number of men and women. The question respecting how many people in our service contracts are employed is almost a ridiculous question. In other words, if we hire an engineering firm to engineer a road, we have to go to the engineering firm and have them tell us how many people they have in their firm? And every time they work on a project, we want to know exactly how many people there are, and whether they're male or female. That's not how it works. What we do is assign a contract and allow the firms....

Interjection.

HON. J. JANSEN: The member over there is saying that I'm self-righteous. Let me tell you, what I'm trying to show the members is the way the business community works. I understand they don't relate to the business community. They really have a concern about issues that are outside the economic reality of this province. But when you sign a contract, you allow the management of that contracting company to assign the staff they want.

If members over there want to take a position on something, you should stand up and be counted and say what you want to do respecting that. Do you want to force Big Brother government to tell companies throughout this province how to manage their affairs? Is that what you want, Mr. Member? Perhaps they could stand up and be counted now. I'd like to hear your point of view. You simply don't have points of view on anything. You keep on rambling, and you keep on saying this and saying that. You take negative views. You've been against everything. You've never yet come to this House with something that makes a lot of sense, is good, on the record and committed. You simply don't want to do that.

I indicated earlier that I'm committed to bringing back to committee the question of gender composition on the FTE.

I think those were all the questions you raised.

Mr. Chairman, given the time, I move that the committee rise, report tremendous progress and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 11:56 a.m.