Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 8, 1992

Volume 1, Number 24

[ Page 599 ]

The House met at 2:11 p.m.

Prayers.

D. Lovick: Hon. Speaker, it gives me considerable pleasure today to introduce and welcome to the House two of your constituents, who coincidentally happen to be related to me. I'd like the House to join me in welcoming my mother and father, Dorothy and Andy Lovick.

J. Pullinger: It's with a great deal of pleasure today that I introduce a group of grade 11 school students from Ladysmith Secondary Community School, their teacher Mr. Annis and a number of other adults who are accompanying the group. They are in the precincts today, and I ask the House to make them welcome.

D. Schreck: It gives me a great deal of pleasure today to introduce to the House Don Sinclair and Jill Wade, two longtime friends. Also in the gallery are 30 students from Carson Graham Secondary School, together with their teacher Ms. K. Barter. Would the House please join me in making them welcome.

Hon. A. Charbonneau: I would like the House to join me in welcoming a student who is between her studies and exams in political science, my daughter Jennifer, and her good friend Sabrina Gill.

P. Ramsey: Earlier this year when we opened this session of the House, no relatives of mine were able to be present at the session. I'm very pleased today that my son, also named Paul Ramsey, has been able to take some time off from his studies at the University of British Columbia and join us here today. Would you please help me make him welcome.

W. Hurd: I'm pleased to introduce in the gallery today Mr. Jack Cook, who is the secretary of the Surrey-White Rock Liberal Constituency Association, and his two sons Christopher and Matthew, along with his sister and brother-in-law Shelley and Jerome Santos and their two children Danielle and Jerome, who are visiting from Riverside, California. Would the House please give them a warm welcome.

L. Stephens: I would like to introduce today in the gallery Mr. Campbell Atkinson from Victoria-Beacon Hill. Would you please make him welcome.

[2:15]

Hon. P. Priddy: I would ask the House to help me welcome the people who enable me to do my job here in Victoria and who work with me in Surrey in our constituency office: Chris Kirby, Darshan Mann, Susan MacPhee and Pat Bean. Please make them welcome.

Introduction of Bills

LAND SURVEYORS AMENDMENT ACT, 1992

Hon. J. Cashore presented a message a from His Honour the Lieutenant-Governor: a bill intituled Land Surveyors Amendment Act, 1992.

Hon. J. Cashore: Hon. Speaker, the minor amendments to the act in this bill will allow a land surveyor or a firm of land surveyors to provide professional services through an incorporated company. The amendments allow members of the profession to take advantage of certain tax advantages available to them through small corporations, thereby granting them similar status to other professions, such as dentists, architects and lawyers. There should be minimal financial impact. Other professions now have the right to incorporate embodied in their respective acts.

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

Bill 17 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.

MINISTRY OF ADVANCED EDUCATION,
TRAINING AND TECHNOLOGY
STATUTES AMENDMENT ACT, 1992

Hon. T. Perry presented a message from His Honour the Lieutenant-Governor: a bill intituled Ministry of Advanced Education, Training and Technology Statutes Amendment Act, 1992.

Hon. T. Perry: Hon. Speaker, I'm pleased to introduce today Bill 2, Ministry of Advanced Education, Training and Technology Statutes Amendment Act, 1992, which contains proposed amendments to do the following: (1) to the Accountants (Management) Act, to change the professional designation of members of the Society of Management Accountants of British Columbia from "registered industrial accountant" to "certified management accountant"; (2) to the Apprenticeship Act, to allow fees to be charged by the Provincial Apprenticeship Board for exemption permits issued under that act to individuals who work in certain designated trades without holding a compulsory certificate of qualifications; (3) to the British Columbia Association of Colleges Incorporation Act, to repeal that act, as the British Columbia Association of Colleges no longer exists and has been replaced by the Advanced Education Council of British Columbia; (4) to the College and Institute Act, to replace the requirement that institutions report and justify their existence every five years with the requirement that they maintain ongoing planning and evaluation, with periodic reporting to the minister; (5) to the Seminary of Christ the King Act, to update references in the tax exemption section of the act, to refer to applicable statutes as currently titled; (6) to the University Foundations Act, to enable the interim governing council of the Univer-

[ Page 600 ]

sity of Northern British Columbia to act as a university board of governors for the purposes of the University Foundations Act.

I commend this bill to the House, hon. Speaker, and urge its speedy passage. I move the bill be introduced and read a first time now.

Bill 2 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.

Oral Questions

PAYMENT OF MEMBERS' LEGAL FEES

A. Warnke: My question is for the Premier, and it concerns his answer given in the House yesterday to my colleague the member for West Vancouver-Garibaldi. Since the Premier did not address the member's question regarding the sources of funding for the payment of the legal expenses for his Minister of Labour, which we are extremely concerned about, considering that any funding could constitute a conflict of interest, can the Premier assure this House that public funds provided by the taxpayer were not used to pay the remainder of the legal expenses or the settlement of a lawsuit with lawyer Peter Firestone that would constitute a conflict of interest to the Minister of Labour?

Hon. M. Harcourt: I have been very patient with the opposition on this issue. I have laid out as clearly as I can where public moneys were involved. I said very clearly that the Assistant Deputy Attorney General's legal fees and the costs of the settlement were approved by the Deputy Attorney General to the amount of $93,000.

I secondly made it very clear that the $36,000 of legal fees for the previous Attorney General critic over a two-and-a-half-year period came out of the caucus global budget.

I thirdly made it very clear that the private settlement that was involved in this matter -- involving Mr. Firestone, Mr. Smith and Mr. Sihota -- was a private settlement. There was a private agreement that has nothing to do with this government.

Quite frankly, I am going to say to the opposition that I answered those questions even though they were quite out of order, as dealing with the previous government and with a previous opposition critic. That has nothing to do with this government.

A. Warnke: The unwillingness to state so categorically is still a concern to this House and, I'm sure, to the public. To provide the Premier, perhaps to remove from the public's mind that no conflict of interest exists involving the Minister of Labour.... Can the Premier guarantee that in the settlement of damages in the Firestone suit no other funds were used involving either the B.C. Federation of Labour or any affiliate, or by the New Democratic Party, or by the New Democratic Party caucus fund?

C. Serwa: My question is directed to the Attorney General. Can the Attorney General advise the House whether to his knowledge any minister, past or present, has had his or her legal costs paid for by the taxpayer for any personal lawsuits where that person had been named as a defendant?

Hon. C. Gabelmann: I'll take the question on notice.

The Speaker: I will allow the supplementals of the hon. member for Okanagan West, and then I will return to the last supplemental of the....

C. Serwa: Again to the Attorney General. Under government policy of November 5, 1991....

The Speaker: Could I interrupt the member just one moment, please. Is this a new question? Because the previous question was taken on notice.

C. Serwa: Madam Speaker, it is a new question, related to the other question but not directly.

The Speaker: If it is a new question, I will permit it.

C. Serwa: Government policy, as of November 5, 1991, indicated that there would be no monetary assistance paid to any minister for such expenses other than through cabinet approval by an OIC. Can the Attorney General tell us whether that policy has been quietly changed by cabinet?

Hon. C. Gabelmann: While I could answer elements of that question at this point, I think it would be more useful to the House if I came back with a complete answer on the entire topic.

The Speaker: I will return, for the last supplemental, to the hon. member for Richmond-Steveston.

A. Warnke: I would like to address this question again to the Premier. With respect to the out-of-court settlement in the Firestone suit and the apparent rush to complete it, would the Premier confirm that, prior to public money being approved in the settlement, the Premier received a letter dated November 27, 1991, notifying him that he might be subpoenaed as a witness at that trial in December?

Hon. M. Harcourt: I cannot confirm that.

SOFTWOOD LUMBER TARIFF

W. Hurd: My question is for the Minister of Forests. The people of forest-dependent communities in B.C. are concerned when they read reports like those in the press this morning in which key protectionist politicians in the U.S. are offering to scrap the 14.4 percent tariff in exchange for access to raw logs. Will this minister categorically assure British Columbians that 

[ Page 601 ]

his government will never be blackmailed into trading raw logs for tariff protections?

Hon. D. Miller: That's a very important question. The issue is critical to British Columbia, and I want to take just a moment to explain.

First of all, I want to advise members not to be led astray on the issue of log exports. Fundamentally, the benefit.... Our people were quite pleased about this shift in position by the Americans, because it has now become apparent to politicians in the Pacific Northwest -- in Washington, Oregon and Idaho -- that the move by the U.S. administration to put log exports into the countervailing duty issue has put them at risk. What is important is that key players like Senator Packwood, Senator Baucus and others are now saying: "We want those exports removed from the countervailing duty issue."

I was quoted endlessly in the press -- if you haven't read it -- that British Columbia has no intention.... I suspect that the states of Washington and Oregon also have no intention of negotiating their log export restrictions. They value them just as much as we value ours.

W. Hurd: Perhaps the minister can explain to this House why his ministry has approved the export of hundreds of thousands of cubic metres of raw logs from this province since he was sworn in as minister.

Hon. D. Miller: Again, I have attempted to explain the policy in a public way. But I think it's fundamental -- and the member should understand -- that restrictions of these kinds are the subject of some debate. For example, there was a reference to GATT. In the advice that we received, it was fundamentally important that it would inopportune and ill-advised to make any change in our existing policy, given the situation globally and given the fact that the issue has been referred to GATT. It would be simply foolish in the extreme and would expose us further and perhaps expose our regulations and legislation to some further challenge. Given that, it seems prudent and wise that the government take that course of action and maintain the regulations as they exist now.

W. Hurd: Hon. Speaker, I think this minister should take up the sport of logrolling without caulk boots.

Once again to the minister, referring to a statement that he made in Hansard when he was in opposition, and I quote: "I can say categorically that as the member for Prince Rupert: I am totally opposed to raw log exports in this province, and so should every member of this House be." That's right. "Totally opposed." Does this minister or his government have any conviction or policy on the export of raw logs and jobs in this province, or is it a case of whose ox is being gored?

The Speaker: Order, please. Hon. member, could you state your question, please.

W. Hurd: How many cubic metres of raw logs have left his own riding on ships destined for overseas ports?

Hon. D. Miller: I must confess that in my youth I did indeed work on log booms without the benefit of caulk boots, and I can tell you it's a slippery business -- almost as slippery as trying to craft good questions.

[2:30]

Hon. Speaker, I'm dismayed that all members of this House are not aware.... I'm prepared to offer a briefing on our policy; I think I have made that offer before. We have a very good log-export policy in British Columbia. It is a surplus test system. It allows exports from remote locations where the wood quality is low, and the exports allow that economic activity to take place. It maintains jobs in some instances. It provides for a level of exports that typically is running between 1 and 2 percent of the total provincial harvest -- a very low amount.

The Speaker: Could the minister please wrap up his reply.

Hon. D. Miller: Well, it was a pretty open-ended question, hon. Speaker.

Finally, I would repeat: I would ask the Liberal caucus to consider whether they are saying that we should change our export restrictions, even though that might invite some retaliation which could subsequently see our log export restrictions impaired. I'd ask the Liberal caucus to consider that very carefully.

SUPPLEMENTARY HOMEOWNER GRANT

V. Anderson: Hon. Speaker, my question is to the Premier. In the recent debates in this House, the Minister of Finance is continually saying that the effect of the cancellation of supplemental homeowners' grants is only felt by those with high income and high property taxes. However, municipal leaders are saying that low-and middle-income homeowners will be directly impacted with these costs. Does the Premier agree with the Minister of Finance or with the municipal representatives?

Hon. G. Clark: I'm delighted to answer this question. Our increases to the basic homeowner grant and our increases to the supplemental homeowner grant, combined with the elimination of the supplementary homeowner grant, mean that slightly less than half of all homeowners of British Columbia are better off than they were prior to the budget. Slightly more than half are worse off, and that half.... It has a disproportionate impact on the wealthy. So wealthy homeowners do see a slight increase, but those in the lowest half of all homes of British Columbia, in value, are better off under this policy.

WHALLEY SKYTRAIN STATION

S. Hammell: This question is to the Minister of Finance. I am concerned about the statements made by the former Premier accusing this government of playing political games, and as a consequence the third SkyTrain station in Whalley will not be constructed. Can the minister please clarify the situation?

[ Page 602 ]

Hon. G. Clark: That's an excellent question, for a change. This is a very serious question and deserves a serious response.

The position of the government is that we are not playing politics with the SkyTrain stations in Surrey. This is a business decision. The developer has reneged on the agreement and has refused to pay what was agreed to for the construction of that station. In the absence of the developer coming to the table to pay what was agreed to, we will not be building the station.

SUPPLEMENTARY HOMEOWNER GRANT

V. Anderson: Hon. Speaker, my supplemental is to the Premier. In some areas of my riding, which is heavily populated with seniors, they are being asked to pay from 17 to 26 percent in additional tax. Overall, it is estimated that seniors face a 12.5 percent increase in property taxes. Will the Premier concede that this was an illadvised assault on the incomes of our seniors?

Hon. G. Clark: Hon. Speaker, it's important that the members realize that this returns the level of taxes to what they were two years ago. The problem in Vancouver is that in 1990, with the introduction of the supplementary homeowner grant, the city of Vancouver increased its property taxes by some 12 percent to take advantage of the tax room. Now what they're trying to do, of course, is blame the provincial government for their upcoming tax increases. The reality is quite different from that.

Further, I would like to say that if seniors in this province are having a problem -- because there is the odd case of individuals who are asset-rich and cash-poor in the senior situation, although that is a relatively rare occasion -- they can take advantage of the deferral program, which was reduced from 65 to 60 by the previous administration, one of the rare occasions when the opposition agreed with the government in those days. So no senior in this province should have any problem whatsoever with respect to paying property taxes because of that very fine program.

The Speaker: That ends question period.

G. Wilson: Hon. Speaker, I have given notice under practice recommendation 8 of my intention to move adjournment of the House under standing order 35.

The Speaker: Hon. member, I must interrupt you. At this time we are still in routine business, and I will have to ask that that matter be left until the end of routine business, in accordance with the standing orders.

Hon. T. Perry: I table the report of the Task Force to Review Northern Post-Secondary Education prepared by the hon. members for Bulkley Valley-Stikine, Skeena and Prince George North, dated March 31, 1992, along with a response from the University of Northern British Columbia.

The Speaker: I have been advised that this is not a statutory report. Is leave granted for the minister to table the report?

Leave granted.

Hon. D. Miller: I ask leave to introduce the following motion without notice. Given the grave environmental and economic threat posed by the introduction of the Asian gypsy moth to British Columbia, I hereby move that the assembly consider a motion to support the government in its belief that it is necessary to declare....

D. Mitchell: On a point of order, the minister is rising to ask for leave to make a statement. I think the question needs to be put on whether or not leave is granted before he can actually get up and move the motion.

The Speaker: The point is well taken. I would ask the minister to ask leave to move a motion in the shortest possible description as to the subject of the motion only.

Hon. D. Miller: A very brief motion to give...

The Speaker: Is it leave to move a motion on....

Hon. D. Miller: ...the members an opportunity to determine whether or not they want to grant leave that the House support the government in its belief that it is necessary to declare an environmental emergency under the Plant Protection Act...

The Speaker: Minister, I must....

Hon. D. Miller: ...and commence aerial spraying on April 15.

The Speaker: Minister, with due respect, that was perhaps a little more of a description of a motion before leave is asked. I will now ask....

G. Wilson: I rise on a point of order. I rose to give notice of motion under standing order 35 and was advised that ordinary business had not commenced. I request a ruling as to whether or not this is ordinary business of this House.

The Speaker: Hon. members, standing orders are quite clear, and I will read them. Under standing order 35(1): "Leave to make a motion...must be asked after the ordinary daily routine of business...has been concluded and before orders of the day are entered on." That is the authority that I have used, leader of the official opposition, in this instance.

We now have a request that leave be granted to bring in a motion without notice.

Leave not granted.

[ Page 603 ]

Hon. D. Miller: I would move, under the provisions of standing order 35, that this House do now adjourn to discuss a matter of urgent public importance.

The Speaker: Order, please, hon. members. Could all members take their seats, please.

The Chair is now in a very unusual situation in having been given two notices of a request to utilize standing order 35. One of the restrictions under standing order 35 is that "not more than one such motion may be made at the same sitting." The Chair now finds itself in a very difficult position in that both motions cannot be dealt with at this sitting. I would ask the indulgence of the House for a brief recess, and during that time I would hope that the House Leaders would also be conferring. The recess will be brief, and I ask members to stay close to the chamber.

The House recessed at 2:41 p.m.

The House resumed at 2:57 p.m.

The Speaker: Hon. members, further to the item of business when we adjourned for our brief recess, the Chair has considered how to deal with the fact that we now have potentially two motions to adjourn the House for an urgent debate under standing order 35.

The Chair was duly advised regarding both motions. One advice was given in writing; one advice was given verbally. We now have this difficulty of potentially two standing order 35 motions in one day, which would be in opposition to our standing orders. It is my understanding that should both qualify for urgent debate today, the House may be prepared to grant leave to debate both of them today. On that basis I propose that we hear both statements. The Chair will then determine as quickly as possible whether both qualify, and then the House will be asked to deal with that situation as it arises.

There is also the question as to which statement we hear first. Without any other criteria to use, the Chair can only choose to hear the standing order 35 submission based on written notice. I would propose that the leader of the official opposition make his statement under standing order 35, that we receive submissions on that, and then immediately I would ask that the Minister of Forests read his statement on his standing order 35 and that we hear submissions on that.

I would now call on the leader of the official opposition. Before I do that, I would remind members that at this point the statement is on the argument for the urgent debate, not on the content itself.

[3:00]

G. Wilson: I have given notice in writing, under practice recommendation No. 8, of my intention to adjourn the House under standing order 35. I do now move that the House adjourn, in order to discuss a definite matter of urgent public importance regarding emergency health care priorities, especially surgical wait-lists in British Columbia. This is indeed an urgent matter, hon. Speaker, because it affects the lives of many British Columbians today -- not in some future period, but today. I believe that this House must give due and full consideration to the crisis that is now in our health care system. In this debate we would be able to address those urgent medical conditions that are affecting so many British Columbians and putting so many families in turmoil.

The Speaker: Would the leader of the official opposition please make the statement available to the Chair.

Hon. G. Clark: The question is: does an emergency in health care exist? Clearly it does not. Essential services have been designated by the parties before the Industrial Relations Council. Both parties are in agreement with essential services legislation. By definition, if essential services have been agreed to by both parties and are being maintained, that cannot constitute an emergency health care crisis in British Columbia. More to the point, are the waiting-lists today longer or shorter than they were yesterday or than they will be tomorrow? That's obviously a matter of debate. Nothing the hon. Leader of the Opposition said qualifies under the urgent and pressing necessity of standing order 35 for an emergency debate on this matter.

J. Weisgerber: Hon. Speaker, I would like to start off not by addressing the question of whether this is an issue for emergency debate but by asking you to think about the ruling you just handed down. Before you decide whether both issues should qualify as emergency debates, it seems reasonable that we as a House should determine whether or not we're prepared to waive the rule and hear both. If we wait until one or the other has been denied, I suspect that the losing side would feel that it wouldn't want to grant leave.

The Speaker: Thank you, hon. member, for those comments. I'm not sure whether you rose on a point of order. Do you have a submission to make on this particular application under standing order 35?

J. Weisgerber: No, I simply wanted to make a procedural recommendation before we got too far into this process, because I think it's an important one.

The Speaker: Thank you, hon. member. The Chair feels that the point perhaps is well taken, and therefore if both applications under standing order 35 are deemed to qualify I would ask the House: is the House prepared to grant leave to debate them both today? Hearing no nays, I will take the House's decision on that.

The hon. member was rising with a submission on this point of urgency.

L. Reid: Hon. Speaker, I rise in response to the Minister of Finance's comments, and I'm saddened by his comments....

The Speaker: Hon. member, I must caution you that your comments at this time must address the need 

[ Page 604 ]

for the urgency of debate now. We are not carrying on the debate, and so I would ask you to confine your comments very narrowly to that.

L. Reid: I'm saddened, hon. Speaker, because this is an urgent and pressing necessity for British Columbia patients. This is not a labour relations issue. There are individuals in this province who are suffering today, and as the Health critic in this province, I believe those issues need to be brought before this House for discussion today.

Hon. D. Miller: I just wanted to make a brief submission while we're still on the previous standing order 35 request, simply to say, hon. Speaker....

The Speaker: Minister, I'm sorry, I have gone onto the other standing order. If you are rising on that, please proceed.

Hon. D. Miller: I rise under the provision of standing order 35 that this House do now adjourn to discuss a matter of urgent public importance. The introduction of the Asian gypsy moth to British Columbia poses a grave environmental and economic threat to our province. Given the gravity of the situation and the government's commitment to give the public ample notice, the House should now consider cabinet's decision to declare an environmental emergency under the Plant Protection Act and allow a program of aerial spraying of the natural pesticide Btk. This decision itself -- the declaration of an environmental emergency -- is, I believe, of sufficient importance to merit debate in this House.

The federal Department of Agriculture under the original permit had the right to commence aerial application of the pesticide Btk on April 26, 1992. The best technical advice from officials in the provincial ministries of Forests, Agriculture and Environment tell us that to best ensure the success of the program, we need to commence as early as April 15, 1992. Officials of the provincial and federal governments have assured local residents that they will receive the greatest possible notice prior to the commencement of an aerial spraying program. As the program may begin as early as April 15, 1992, time is of the essence.

To sum up, cabinet declared an environmental emergency today. There is enormous public interest and concern about this issue, and we must debate it at the earliest possible occasion. Today I believe this meets the criteria of a matter of urgent public importance as found under standing order 35.

D. Mitchell: Hon. Speaker, I'd like to speak to this very briefly and point out to the Chair that in my opinion this motion is clearly out of order. I'd like to explain why.

The fact that the government has made a decision today does not constitute an urgent and pressing situation, although it is unusual for the government to make a decision, hon. Speaker. The fact that they have made a decision itself does not constitute an emergency, and I would like to point out to the Chair that on the order paper -- and the government should be aware -- of this House today we have notice by the member for Abbotsford of a private member's statement on Friday on the very topic of the Asian gypsy moth. So we can see that on Friday of this week we already have an opportunity to debate this matter.

That this is not an emergency and is not urgent is proven by the fact that during oral question period in this House in answer to questions on this topic, the Minister of Environment repeatedly told us that we in the official opposition were overreacting to this issue and that it's not really a crisis at all.

The fact that the Minister of Environment and the Minister of Agriculture are not in this House today is further demonstration that this is not an emergency; they're not even here to debate the matter. How urgent could it be?

The fact that the cabinet today has made a decision does not constitute an urgent and pressing matter. The fact that we are going to be debating this matter on Friday in this House under members' statements should be considered when the Chair makes her decision on this. I believe that this motion is clearly out of order.

The Speaker: Is this a further submission on the need for urgency?

Hon. G. Clark: The statement which the opposition House Leader refers to is a statement on the topic of the Asian gypsy moth. That's correct. It has been discussed in this House. That is not the subject on which we are requesting emergency debate. What we are saying is that today cabinet has declared an environmental emergency, and we would like to have a debate in this House because we have now found that there is an emergency.

The discussion of whether or not to spray and how much to spray is a subject for other matters. The decision has been made today to spray by invoking an environmental emergency, and that is what is so fundamentally different from the other things that are on the order paper for discussion. This is a very specific motion which clearly complies with standing order 35.

J. Tyabji: Hon. Speaker, I find it regrettable and almost dishonourable that this is being brought up as if it's an emergency that wasn't foreseen. The situation that exists today is not something that was unpredictable. It was something we've seen coming for a long time. A permit was issued some time ago. The deadline was known some time ago. To bring it up as if it's an emergency at this late date without written notice is going to send the wrong message out to the people of B.C. I think we should be much more responsible in dealing with this issue. It is an issue that can easily be dealt with without an emergency session and without alarming people. We should be much more responsible about it and deal with it in a proper manner -- not with an emergency debate.

The Speaker: I thank the hon. members. I think that we have had equal submissions from both sides at 

[ Page 605 ]

this time. The Chair would now propose to consider these submissions. 

Ministerial Statements

ABORIGINAL LAND CLAIMS

Hon. C. Gabelmann: Before beginning the ministerial statement, may I seek the House's agreement to a procedure which has been agreed to by both the other parties, and that is that I will make a ministerial statement to be followed immediately by another ministerial statement by the Minister of Aboriginal Affairs, to then be followed by one statement by the official opposition and one statement by the third party. Hon. Speaker, I don't know if that requires leave, but agreement has been reached.

Leave granted.

Hon. C. Gabelmann: Thank you, hon. Speaker, and my thanks too to the members of the House.

I rise today to inform the House of new initiatives designed to facilitate negotiation of settlements of aboriginal land claims which will fairly and equitably serve the interests of all British Columbians. As members are aware, it is the position of this government that this objective can best be accomplished through negotiations rather than in the win-lose context of court actions.

Over the last few months we have discussed this objective extensively with legal counsel. On behalf of the government, I have now given Mr. Bryan Williams, QC, counsel for the province, instructions which revise the province's position in response to the appeal by the Gitksan-Wet'suwet'en against the ruling in Delgam Uukw et al. v. the Queen. The revised position has been conveyed to all parties to the litigation, and today, to the court. The new factum will be presented next Wednesday, April 15.

It is important to note that the government's fundamental position is unchanged with respect to the ownership issue and sovereignty of the Crown: the appellants are not entitled to succeed in their claim for the land in question. There is no proprietary interest in the land in question. There has been extinguishment of aboriginal rights where land has been granted in fee simple.

There are four significant revisions to the position previously taken by the province: 1. That the government recognizes the existence of aboriginal rights in the province, which may be described as an interest in respect of land sui generis 2. That a blanket extinguishment of aboriginal rights throughout the province did not occur at any time. There has been extinguishment of rights in particular situations, including where land has been granted in fee simple. 3. That there are certain rights to self-government recognized in common law but such rights are subject to the laws of Canada and British Columbia. 4. The court will be asked to declare that the precise location, scope, content and consequences of these aboriginal rights be referred to the parties to form the basis of a negotiated solution.

It is our position that negotiations offer the only constructive basis for resolution of this question. This position is in accordance with the historical approach to the resolution of aboriginal claims, the aboriginal rights provision in the constitution, the interests those rights were meant to protect and sound legal principles.

To ensure that all points of view are before the court, we have also suggested that the court may wish to appoint an amicus curiae in this matter.

[3:15]

This revised position protects the interests of all British Columbians. It provides the basis for continuing progress toward a negotiated settlement, progress essential to the economic future of our province, by removing the uncertainties which accompany frequent and lengthy legal actions. It avoids the dangers inherent in any ruling against the government of British Columbia. It assures protection of private property and thus increased security for all British Columbians. It replaces a high-risk and confrontational approach with one which is exclusively directed toward achieving a fair and equitable settlement beneficial to all British Columbians.

That concludes my statement, hon. Speaker. The Minister of Aboriginal Affairs will outline more broadly the government's position and objectives with respect to negotiated settlements with British Columbia's first nations.

Hon. A. Petter: Last December the provincial government made a significant announcement to all British Columbians. At the time that the government accepted the 19 recommendations of the British Columbia Claims Task Force, our commitment to the recognition of aboriginal rights was affirmed. That commitment marked the beginning of a new relationship between the provincial government and first nations, a relationship based on trust, understanding and mutual respect.

An important component of that new relationship was our commitment to resolve aboriginal issues through negotiated settlements rather than litigation. It is our firm belief that negotiation is the most effective way to give recognition to aboriginal rights and to define their content and substance, so as to protect the interests of all British Columbians.

When this government came to power it inherited a number of cases related to aboriginal rights that were already before the courts, including the Delgam Uukw appeal. The litigation strategy that we inherited reflected the previous government's position that this case could be resolved through litigation rather than at the bargaining table, a position that differs substantially from ours. By seeking finality in the courts, the previous government pursued a risky, winner-take-all approach that polarized the issues and inhibits a negotiated resolution of these matters.

We are determined to reduce the amount of litigation surrounding aboriginal issues, litigation that costs so much and produces so little. We know that by keeping these issues before the courts, no one really 

[ Page 606 ]

"wins." We know that despite the outcome in any given case, the courts cannot provide a satisfactory solution that meets the needs of society as a whole. Not only is litigation costly, but it contributes to uncertainty and economic instability. In the end, settlements imposed by the courts tend to fuel confrontation rather than resolve the problem.

As a government we have taken a number of steps to lay the groundwork so that negotiations can begin. In particular, we are moving quickly to establish the treaty commission recommended by the B.C. Claims Task Force, to facilitate and speed up the treaty-making process. An agreement to establish the commission has now been reached with the federal government and the First Nations Summit. As well, cost-sharing negotiations between the federal and provincial governments related to treaty-making are now under way.

The position the province is adopting in the Delgam Uukw appeal is one that calls upon the courts to refer many of the key issues in the case to the bargaining table. If adopted, it will lead to a just and honourable settlement achieved through government-to-government negotiations between the province and first nations.

Negotiation offers a number of benefits. It contributes to a feeling of certainty and economic stability by removing critical issues from the uncertain and unpredictable terrain of the court. It can result in satisfactory arrangements for all people, including aboriginal and non-aboriginal interests, because what is decided will be mutually agreed to and negotiated by all parties.

We are convinced that negotiated settlements are the most effective way to resolve aboriginal issues. Negotiated agreements will reduce economic uncertainty, thereby increasing investment and jobs in British Columbia communities. They will help to resolve conflicts between competing interests, and they will enable aboriginal peoples to become self-sufficient members of society.

Our position in court, as it will be in treaty negotiations, is that private property is not on the table. The interests of non-aboriginal parties will be protected.

We go into the Delgam Uukw appeal reluctantly. We are confident, however, that the revised position is a sound legal position that is consistent with our desire to negotiate, not litigate. In substance, it is a position similar to that put forward by the federal government and consistent with views of aboriginal rights as articulated by the Supreme Court of Canada. We believe it is a position that may move this costly and acrimonious case out of the courts and onto the negotiating table.

G. Wilson: May I first thank the members of the government, the hon. Attorney General and the Minister for Aboriginal Affairs, for extending the courtesy of sharing this ministerial statement prior to the sitting of this Legislature, and allowing us an opportunity to review in some detail what is being presented.

Hon. Speaker, this is indeed an important step, because it is a step in an issue in which it is going to be difficult at best to come to a firm and just resolution. We are pleased that in the proposition put forward this government has indeed stated that its objectives are to move towards a negotiation process. Nevertheless we recognize that there is an appeal before the courts and that litigation is not going to be avoided.

We also notice in the documentation that at no time is the word "title" used in either of the presentations by the Attorney General or the Minister of Aboriginal Affairs. We on this side of the House believe that that is a step in the correct direction, because it removes the ambiguity that was out there, rightly or wrongly, from those that hear the term "recognition of title" and believe that it refers to the question of private property and property rights.

There is also a move here that we on this side of the House can support and embrace, and that is the matter raised on the second page of the ministerial statement read by the Attorney General: "To ensure that all points of view are before the court, we have also suggested that the court...appoint an amicus curiae in this matter." That is a very important and significant move, because it means that there will indeed be a full and absolute assessment of all points of view in the ruling that has come forward. Without that there may have been further problems with respect to future litigation.

We recognize that this is a difficult proposition and that the resolution of this question is not going to come easily. We are supportive of the fact that the negotiation process, which the Minister of Aboriginal Affairs says will contribute to a feeling of certainty and economic stability in the province, is a very real one. We recognize that if we are to advance this matter, the proposition to move these negotiations from the courts and into the domain of public negotiation is important. To that end, the removal of the concept of recognition of title has been an important one, because it removes ambiguity with respect to those members who must be included in the negotiation process, especially third-party concerns and interests.

Finally, let me say that we applaud both the efforts of the Attorney General and the Minister of Aboriginal Affairs in their attempts to move this matter forward. However, we recognize that litigation must take place. We recognize also that the government must be a part of the resolution that will come forward from that settlement.

Therefore, while it is desirous to move this government away from the previous approach, there are still some storm clouds ahead with respect to making that come about in a manner that will not simply move us into further litigation. To that end the official opposition offers its support and help if we can in aid in the successful resolution of this question.

J. Weisgerber: I really wish I could join in this issue as enthusiastically as the leader of the official opposition has. The statements of the Attorney General and the Minister of Aboriginal Affairs demonstrate how much trouble the government is having with this issue.

To go back to November and early December, the government announced that it recognized the political reality of aboriginal title. The throne speech went on to reaffirm that commitment. But we have two ministers 

[ Page 607 ]

stand in the House and talk about this very significant issue, and neither of them is willing to utter the word "title" in his presentation. Clearly that was not an oversight but something that they did not want to involve themselves in. I think the government owes the people of British Columbia an explanation. It owes an explanation as to the difference that it sees between aboriginal title and the recognition of aboriginal rights. If we're going to understand the government's approach, we've got to understand the words that they use and we've got to have some confidence that they understand those words.

The government also raises the question of claim to fee-simple property. That clearly has been raised to cloud an issue. There are no claims that I am aware of that include claims to fee-simple title. Over the years that I've been involved in this process, aboriginal leaders have gone out of their way to make people understand that their farms and their homes and the land that they own is not subject to claim.

The raising of this issue tends to cloud the question. The question with regard to aboriginal claims is one of ownership and control over the natural resources of this province: the forests, the mines, the wildlife, the fish. It also includes the question of ownership of what we call Crown land -- the 96 percent of British Columbia that is not held in fee simple. But to suggest that by this manoeuvre we are somehow giving the owners of fee-simple land an added sense of security clouds the issue, because fee-simple land -- with very, very few exceptions, perhaps Scheidam Flats -- has never been the subject of an aboriginal title claim, and even Scheidam Flats is a different kind of claim.

Everybody would like to see this issue move out of the courts. We would all love to see resolution. We'd love to see negotiated resolutions that represent the interests of all British Columbians -- recognize the interests of aboriginal people but also the interests of other British Columbians.

If in fact the Attorney General and the minister were moving this issue out of the courts, I would applaud them. But they're not. They have simply sent in another legal team. The Attorney General assured us a few days ago that the factum prepared by Russell and DuMoulin would be used in this case. That is very difficult to understand, given this new presentation. So it seems to me that the government is going back to argue a different case in the appeal. I suggest that that is a dangerous approach, given the time and the changes in the government position. One day they recognize the political reality of aboriginal title; the next day they won't mention the word. This suggests to me that this is not a plan that's been thought out over a long period of time and approached carefully and rationally as a solution to a problem that's more than a hundred years old. In fact, it's a last-minute change in plans. I don't think that bodes well for British Columbia.

These issues are very complex, and there has been significant progress over the last three or four years. The previous government did establish the Premier's Council on Native Affairs. We did participate in the B.C. task force, and we would encourage the government to move quickly on the establishment of a treaty commission. All those things, with deference to the government, were in the works before the election. None of that is new stuff. What the government appears to have done is significantly change the approach it's making in the courts. I would suggest -- and I hope I'm wrong -- that it has been done without a lot of careful thought and that there have been significant changes in approach since the throne speech was tabled. The words have been changed between March 17 and April 7. All of a sudden the centrepiece in the throne speech on this issue is a word that neither minister is comfortable repeating.

[3:30]

So I would suggest the government moves toward negotiated settlements by all means, and I will certainly provide what little help I can. But go carefully. This issue has been a hundred years in the making. There have been tremendous mistakes made, but the solution is not in haste. I applaud, with some reservations, the intent of the government, but I sincerely suspect that it's one that hasn't received all the attention and thought that it should receive.

Hon. G. Clark: I call second reading of Bill 4.

BUDGET MEASURES
IMPLEMENTATION ACT, 1992

Hon. G. Clark: Bill 4 amends or repeals a number of statutes in order to implement minor taxation and other measures announced in the 1992 provincial budget. The bill terminates eight special accounts by amending or repealing the legislation that created the accounts. Special accounts provide statutory authority to spend money up to a limit established by enabling legislation. This spending authority does not lapse at the end of the fiscal year, as in the case with voted appropriations.

During the 1992 budget process, Treasury Board reviewed the activities of all special accounts and determined that those terminated by this bill were no longer required -- and this is also in keeping with the Peat Marwick review. The special accounts are mainly being discontinued because the programs for which they were created have been terminated or are being wound down.

Where there are residual spending requirements for programs which were previously funded through special accounts, funding is continued through voted appropriations. In the case of the Lottery Fund special account, which is being terminated in accordance with other government program priorities, one-half of the available funds will now be channelled through the Health special account to be created under Bill 10. I might say that the other half of the lottery funds will go to programs, many of which were already dedicated in the Lottery Fund.

Hon. Speaker, over time the Lottery Fund became fully committed for ongoing government programs, whether they were cultural grants, recreation grants or a variety of programs. There is also one in multi-

[ Page 608 ]

culturalism. What we did, essentially, was to say let's be honest with people and take those funds which aren't really one-shot things that the Lottery Fund originally anticipated, move them into the ministries responsible and fully fund them. That's what we're doing. The Lottery Fund programs that existed before still exist, but they're in the individual ministries. Although, clearly, we did cut somewhat, as we did across the board in all government ministries.

Half of all moneys from lotteries is designated for health care, and the other half goes into the various programs which were previously funded under the Lottery Fund special account. But we get rid of the fiction of surpluses and the like, which really don't exist in any real sense, that there's money there.

This bill also includes amendments to legislation governing the funding of transit in the Vancouver Regional Transit Commission service area. These amendments will provide time to complete discussions with the Vancouver Regional Transit Commission regarding improved cost-sharing arrangements. The amendments give the representatives of local governments who make up the Vancouver Regional Transit Commission the option of proposing funding plans to meet the local share of transit costs for successive parts of the 1992-93 fiscal year. Alternatively, the existing basis of raising the local share of costs may be continued.

This is an important point, hon. Speaker. Deficit financing has not been allowed, as some people have alleged. There is a deficit in the Vancouver regional transit area of about $28 million or $30 million, which will happen if no funding arrangements are made. But it will not really be a problem until about February or March of next year.

What we did here with this bill was to allow -- not for deficit financing -- for partial-year funding where there is no need to deal with that deficit problem, at least until we have a chance to discuss with local governments alternative funding arrangements or ways in which we might deal with it. That, of course, is tied to a very messy governance issue, which we'd like to deal with. We simply need a few months to put some options forward and discuss with local government alternatives for transit planning.

In addition, this bill includes a tax measure which would amend the Insurance Premium Tax Act to increase the tax rate payable on premiums paid to unregistered insurers from 5 percent to 7 percent. The new rate will return the differential between the rate applicable to unregistered insurance premiums and the rates applicable to registered insurance premiums to traditional levels. This amendment is not primarily a revenue measure. It is meant to encourage unregistered insurers to register to do insurance business in the province so that important financial information among these companies becomes available to provincial regulators.

This bill also provides for the removal of all special references to the Minister of Forests and the Ministry of Forests and the Sustainable Environment Fund Act. Since the inception of the sustainable environment fund special account in '90-91, the Ministry of Forests has channelled its forest renewal programs through the sustainable environment fund. This has proved to be administratively cumbersome, and these programs are now being funded through the ministry's voted appropriations. This means that the specific references in the Sustainable Environment Fund Act to the Minister and Ministry of Forests are no longer required.

Bill 4 also amends the Tobacco Tax Act. This is an important distinction. Tobacco tax rates will no longer be adjusted semi-annually to reflect changes in the consumer price index. British Columbia has the second-highest tobacco tax rates in Canada. If indexing had continued, our tobacco tax rates would have become the highest in Canada. The government is concerned that further tax rate increases could lead to increases in tobacco smuggling, thefts and cross-border shopping.

If I could, I might say that obviously there is some good public policy initiatives to higher taxes on tobacco, which leads us to why the previous administration allowed taxes to rise to the second-highest level in Canada. The problem is that raising the tax further would not have discouraged smoking, but would have encouraged smuggling. The jurisdiction which is higher than ours -- which is New Brunswick -- has suffered a loss in revenue from the last rate increase.

So we've now essentially frozen the rates for tobacco taxes and removed the indexing, but they'll now be set each year in the budget and debated in the House. This improves accountability and ensures that the rates are set to meet government objectives. So for this year I guess smokers have a small break, but obviously in each budget now the rates will have to be adjusted according to government objectives.

Bill 4 sets the tax rate at 10.5 cents per cigarette and 8 cents per gram for fine-cut tobacco. These new rates equal the estimated average rates for the year, if indexing had not remained in place.

This bill also repeals the Privatization Benefits Fund Act and terminates the privatization benefits fund established under the act, effective March 31, 1992. The bill also provides that the British Columbia endowment fund, which will be established under Bill 12, assumes the assets and liabilities of the privatization benefits fund on April 1, 1992.

Hon. Speaker, I move second reading.

F. Gingell: The opposition in this House has no opposition to this bill. We accept that it is a very detailed bill which accomplishes a great number of various matters that have been brought forward by this government in their budget.

We will, of course, want to discuss all of the various clauses in some depth during the committee stage of this bill. At that time we will be specifically looking for the various programs and the methods of delivery that the government intend to bring forward to replace many of the important and critical programs that are, by this bill, being cancelled.

We will want to have assurance from the government that this bill, Bill 4, will not completely cut out the availability of funding for the agriculture industry. We will want to know the way in which the important transportation and infrastructure expenditures that are 

[ Page 609 ]

required on highways, airports, community transport, ferries, etc., will be handled.

With those few words I just wish to state that we will support second reading of this bill, and we look forward to the opportunity to deal with it clause by clause and in some depth at the committee stage.

J. Weisgerber: Just a few comments on second reading.

I'm concerned with the changes to the Lottery Corporation Act. It seems to me, if I've heard the government correctly, that what is intended is to move lottery funds out of the Lottery Corporation and into consolidated revenue. It's going to take roughly $200 million, which it gets from lotteries, and give about half of it to the Ministry of Health; and the other $100 million is going to disappear into a maze of ministries. It will be a very wise person indeed who can find his way through that new maze to fill out an application for a community project, the kind that traditionally was supported by lottery funds. I suspect what we've seen are the last of supports for playgrounds and travel assistance and all those kinds of things. British Columbians knew that what you had to do to access that fund was fill out a lottery application. I don't know where they are going to go now. It will be interesting for the government to give us, and more importantly the people of British Columbia, some indication as to how worthwhile community groups and communities that have benefited over the years from sharing in lottery funds.... Most of them benefited on a one-third-two-thirds basis, so that the lottery funds generated economic activity in the community not only to their value but to normally three times their value.

I hope, as we get into third reading and committee, the government will be prepared to give us some kind of road map so that applicants know how they can access this money or whether or not the money has disappeared, whether it's gone into that black hole of so-called consolidated revenue, the $18 billion hole in which $100 million or $200 million will be very, very hard to find.

The minister also says that there are changes to the Tobacco Tax Act. He suggests that smokers should take some comfort in the de-indexing of the tax and that in future it would be set to meet the government's objectives. I suspect that if I were a smoker, I would take very little comfort from that, and I might look back to the old indexing method and say: "Well, at least I knew there was a formula, as opposed to the whims of cabinet and the whims of the Minister of Finance." I don't think smokers will want to take much comfort from this momentary lull in tobacco price increases.

There's another issue about tobacco that the government hasn't addressed, and that is the issue of the sale of cigarettes and other tobacco products by Indian bands on reserves. The government had a quota system in place that recognized that Indian people were entitled to use tobacco products without tax. But the government also recognized that with 1,600 reserves in British Columbia, if you were going to allow those reserves to sell tobacco without any restrictions, very few other British Columbians would be in the business of selling tobacco, and almost everybody would wind up buying tobacco at one of the reserves. It's not covered in the act; perhaps it should have been. But if you're going to try to avoid abuses like smuggling, you want to also look at what kind of losses the government is going to suffer as a result of the decision to take away any kind of quota system and say you're entitled to sell all of the tobacco that you can tax-free and use that as a source of revenue. That concerns me a bit.

[3:45]

In conclusion, it is interesting that the government has chosen to change the name of the privatization benefits fund. It appears that the government likes privatization. At least, there's been no indication that they intend to change the policy -- that they intend to change the way they deal with highways maintenance or any of the other functions that have been privatized. And they seem to like the $500 million cash sitting in the bank. The only thing they don't like about it is the name. So we are going to continue to have privatization -- I hope we are, because it was a great initiative. I also hope that we're going to continue to have $500 million in the bank. I suppose that one of these days, as was the case with the budget stabilization fund, someone on this side of the House will want to know which bank this money is kept in. Perhaps someone will ask the Minister of Finance: "Will he table the chequebook?" Will we be able to see the deposit? Will we be able to see how the interest is growing? Will we have the comfort of going down, perhaps, and at least looking at the ledger entry at the Bank of Commerce or wherever? I'm sure we'll expect that under one name or another, this $500 million will not be a fictitious amount but a cash amount. The government's not going to use it to write down their debt, which would be sensible and reasonable; they're going to keep it in a cash account. They didn't believe in the budget stabilization fund, because they couldn't go down to the bank and see it. So I hope we're going to be able to go down to the bank and see this one.

Interjection.

J. Weisgerber: The one you don't like the name of -- the privatization benefits fund. Now the endowment fund. I suppose we could have called it the Social Credit endowment fund, but I suppose that would have been even worse than the privatization benefits fund.

We will look forward to going down and looking together at our big block of money that's deposited at the Bank of Commerce or wherever. I'm delighted that it's here. Even if you call it the British Columbia endowment fund, British Columbians will recognize that it was a fund established through the privatization initiative. Quite honestly, I don't understand why the government wants to bother the House with the business of changing the name, but I suppose one day we'll hear that it was their British Columbia endowment fund -- one that they created. And we'll only have to ignore the fact that it came from another fund.

We'll move on to that later in the week in third reading and, perhaps, hear a bit more detail about these housekeeping changes. As a backbencher on the other 

[ Page 610 ]

side, I learned to watch out for housekeeping changes, and I learned to watch most closely any bill that the minister introduced as being insignificant. I would suggest that you don't pay much attention to the significant ones. They're okay. It's the housekeeping ones that are just little tidy-up bits of legislation. Members on both sides may want to take an extra look at those, because they're the ones you have to watch out for.

W. Hartley: I ask leave to make an introduction.

Leave granted.

W. Hartley: Today in the gallery we have the mayor of the municipality of Pitt Meadows, Bud Tiedeman, and his administrator, Mr. Ken Wiesner. Would you please all make them welcome.

Hon. G. Clark: I won't rise to the occasion to debate. Very briefly, I'll just say that I look forward to dealing with some of the substantive concerns of the members opposite in committee stage. Clearly the Endowment Fund is a major initiative of this administration which has been refocused. It gives us a chance to build on our existing assets using good business principles. I might say, if I could, that there are actual assets in that fund. It's not like a BS fund at all. I look forward to that discussion in committee.

Bill 4, Budget Measures Implementation Act, 1992, 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. G. Clark: I call second reading of Bill 8.

MOTOR FUEL TAX AMENDMENT ACT, 1992

Hon. G. Clark: Hon. Speaker, I move that the bill be now read a second time.

Bill 8 introduces a number of amendments to the Motor Fuel Tax Act. First, Bill 8 eliminates the quarterly indexing of motor fuel tax rates which reflect the changes in the Vancouver consumer price index for gasoline. From now on the tax rates will be set in the budget and debated in the House instead of being automatically adjusted according to an indexing formula. This will increase accountability and improve our ability to forecast revenues accurately.

To make the point, previously they were adjusted quarterly. I know that my critic opposite knows this intimately. It's very cumbersome for oil companies, consumers and the government, because they vary a little bit. All the projections for the price of gas are that they're more or less static over time, and there are these little ups and downs. We rounded it off -- in fairness I guess we rounded it up, but very modestly -- to approximate what we thought was a reasonable flat rate for the tax on gasoline, and that's where it will be now. That saves administrative costs, and consumers have some certainty. It does increase accountability, because if we want to raise it in the future, obviously we have to bring it in in the budget, unlike in the past where these things were just indexed.

The bill sets motor fuel tax rates for the next year at 10 cents per litre for unleaded gasoline, 10.5 cents per litre for diesel and 3 cents per litre for coloured fuels, aviation, locomotive and marine diesel fuels. These rates are equal to the forecasted average annual rates had indexing been retained for '92-93. That's significant.

An Hon. Member: What is it for leaded gas?

Hon. G. Clark: Sorry, I don't have that here.

An Hon. Member: Twelve cents.

Hon. G. Clark: Thank you, member opposite. It's 12 cents for leaded gasoline.

If you look at the budget table at the back, you'll see that the revenue change for this is zero, so this is not a tax grab, as was ascribed to it by some members. The same is true of cigarettes. Both of those are revenue-neutral changes to increase accountability and do the things I mentioned earlier.

Secondly, Bill 8 introduces a new tax rate for jet fuel of 5 cents per litre. This is a revenue increase. British Columbia's jet fuel tax rate is equal to or lower than the aviation fuel tax rates levied in other western provinces, so we've moved to the same rate as Alberta.

Thirdly, Bill 8 exempts alcohol-based fuel from motor fuel tax. Alcohol-based fuel is defined as fuel containing at least 85 percent methanol or ethanol. I know my critic is also familiar with this provision. As well, the current exemption for natural gas and propane purchased to propel a motor vehicle will automatically be repealed at the end of five years. This is essentially a sunset clause for good environmental reasons. The five-year exemption will promote the use of cleaner transportation fuels, which face costly infrastructure barriers and other competitive disadvantages, compared to traditional fuels.

Fourthly, Bill 8 raises the maximum amount of fuel tax rebated to qualifying disabled persons from $200 to $300 each per year. This is a hidden good-news item in the budget, I might say. It's a significant enhancement, a 50 percent increase in the rebate to qualifying disabled persons, which we think is good public policy. Obviously modest, but certainly not modest to those who qualify. While most participants in the rebate program do not claim up to $200, several have requested the limit be extended, and we've agreed in this bill.

Finally, hon. Speaker, Bill 8 amends two definitions. The definition of "mineral" for motor fuel tax purposes is changed to allow dolomite mining operations to be treated in the same manner as limestone mining operations. Again, as you know, there's a tax break essentially associated with mining and farming and a few other things. So this, for the purposes of fairness, extends that tax break to dolomite mining operations. The definition of "aviation fuel" is amended to distinguish it from jet fuel, and to clarify that gasoline and 

[ Page 611 ]

other fuels which are not produced specifically for use in aircraft are not aviation fuels. This is a debate which I'd be happy to get into in committee if the members want.

Hon. Speaker, I now move second reading.

D. Symons: The Motor Fuel Tax Amendment Act replaces our current tax, as the hon. member has told us. I concur with the idea that it will no longer be automatic, but any further changes in the fuel tax will have to come before this House. I think that's a good move, because it gives the decision on this to this Legislative body.

I would also compliment them on the increase of the handicapped persons' rebate. It will now allow them to go about 22,000 kilometres and be eligible for this rebate, whereas before it was somewhat less than that. A good move.

I also approve -- and I'll get through the good parts first -- of the exemption for alcohol-based fuels, because alcohol burns much cleaner and is much more environmentally friendly than the fossil fuels that we are currently burning. So that's a good move also. You have to have an 80 percent -- I think 85 percent -- alcohol base in the fuel for it to be under that category. I would wish for gasohol, which is a somewhat lower percentage of alcohol; that there might be some graduated scale in there to encourage the use of that fuel as well. Maybe that's something to bring forth in a future bill as well.

The one thing that I find the most unsatisfactory in this bill is the business about introducing a jet fuel tax. This is a concern. I know something about fuel, as I worked for Standard Oil in the research department for a few years. I tested fuels, and I know something about the component difference between jet fuel and aviation fuel. The jet fuel tax, not because of its component, but because of the effect it's going to have on the aviation industry in B.C. and on the airlines that are based here.... This can be ill-timed as a chance to bring in that particular increase in fuel, approximately 2 cents per litre.

To begin with, the Ministry of Finance is claiming that this bill is not a revenue-raising venture. Except for the aviation fuel, that is correct. The flat tax rates were designed to collect the same income in 1992 as '92 per year, and this would have been collected under the current fuel tax indexing formulas. In this case all the taxes affected by this act, excepting that jet fuel tax, are purportedly revenue-neutral. Well?

An Hon. Member: So's the GST.

D. Symons: I'll get back to that in a moment.

Under the estimated revenues in the budget estimates, the fuel tax revenues are expected to increase by about $43 million over the next year. Of this, $16 million is accounted for by the revenue that they expect to obtain through this increase. The remainder of this increase in the fuel tax comes from increased consumption due to increased population, increased economic activity and through increases in fuel taxes that would have resulted with the current indexing formulas, which the new fuel taxes are designed to reflect. So, in effect, they're projecting into the future how much the taxes may go up and saying that now this new amount will cover that amount as well.

Well, I find some fault with this because I'm not too sure whether their projections for the increased economic activity are going to be fulfilled. Indeed, that increase in the income from here won't happen if this budget that we brought in doesn't increase economic activity in the province.

[4:00]

It is also the case with jet fuel: it's currently taxed under the aviation fuel tax until this bill is passed. Of the $30 million the government expects to raise through aviation taxes this year, I understand that $24 million is expected to come from jet fuel -- the larger portion of it. Notice from the aviation fuel, the larger amount is now separated out and will receive a higher tax. The government's going to tax this jet fuel separately from the aviation fuel. It will increase the jet fuel tax by nearly 2 percent, or $16 million overall, over what it was when it was contained with the aviation fuel, bringing the total revenue the Ministry of Finance expects to collect from jet fuel tax in the upcoming year to about $40 million. This represents an increase in expected revenue from the jet fuel tax part of the bill of nearly 67 percent for this year over last. The increase in jet fuel tax is wide open to criticism. Unlike the other amendments to fuel taxes this bill introduces, the government has decided to directly increase its revenue by increasing the level of taxation on jet fuel.

The airline industry indicates that price movements of or of a cent per litre are major concerns to them, and this is a 2 cent increase. In 1987, an increase on jet fuel tax in Alberta from cent per litre to 5 cents per litre nearly killed the industry there. They're still fighting to have that tax removed. For Canadian Air, which consumes 360,000,000 litres per year at Vancouver International Airport, the 2 cent increase in jet fuel will cost them an additional $7 million this year, and this is a year when that industry is already besieged with financial difficulties. We're increasing the taxes on that company.

The tax increase will place the Canadian operator at a further disadvantage to American competitors. American flights into Vancouver already pay much lower prices for jet fuel in the U.S. Therefore American flights into Vancouver will "tanker" fuel with them -- the practice of carrying more fuel than a flight requires to get to a certain destination. That is, they'll fill up elsewhere so the airline can avoid refuelling at that destination; in other words, at Vancouver International. We'll have less fuel sold there. The closer to Vancouver a flight can fuel, the more economical and viable it is for them to tanker. By increasing the jet fuel tax in Vancouver, the government's making it economically viable for American flights to tanker from further away.

Cheaper fuel prices for American airlines already give them a competitive advantage in the American destination flight market. For example, if there's a Canadian flight and a United flight to Los Angeles, the Canadian flight will have to be more expensive, or the company's profit margin will have to be slashed to 

[ Page 612 ]

remain competitive, because they'll have to fuel up in Vancouver, whereas the United flight will be fuelled on a flight in from Chicago or Seattle and will carry that extra fuel to take them on to Los Angeles, thus paying significantly less for fuel.

The increase in jet fuel tax will place Canadian airlines at an even greater disadvantage in two respects. They'll pay even more for jet fuel than their American competitors, and also the American airlines will find it economically viable to tanker from further away, increasing the number of American flights that will be able to tanker, and thus the number of American flights offered to Canadian consumers at prices lower than those charged by the Canadian airlines. 

[E. Barnes in the chair.]

The Seattle price for jet fuel is currently 18.9 cents per litre, while the comparable figure for Vancouver is in the ballpark of 27.5 cents per litre -- a price differential of about 8.5 cents per litre in the Americans' favour. This jet fuel price differential is a major inhibitor to the ability of Canadian airlines to compete with their American airline counterparts. Further, the prospect of a nearly 2 cent per litre tax increase in jet fuel, especially at a time when the industry is already on its knees, is horrendous. The tax will further encourage Canadian airlines to tanker in from cheaper jurisdictions, where they can, thus minimizing the amount of fuel Canadian airlines will have to purchase in Vancouver.

I am concerned about this government's rosy view of the future, where they seem to expect increased fuel tax revenues from increased consumption due to increased economic activity. I think these assumptions are somewhat erroneous. Of course, increased economic activity depends upon a net increase of business activity in the province, which in turn is negatively affected by such things as increases in profit taxes and licensing fees and the introduction of capital taxes. Further, I doubt very much, given my analysis of the jet fuel tax above, that there will be any increase in jet fuel consumption in this province. It's likely that any increases in revenue brought in by the jet fuel tax will be offset by a reduction in the volume of jet fuel taxed in British Columbia. Canadian companies will sell less jet fuel, and their American counterparts will sell more. This, in effect, is going to drive jobs south, because the American refineries will be selling more than our Canadian refineries.

Another concern related to this bill has much to do with the province taxing international airlines on jet fuel purchased at Canadian airports. The federal government has signed an agreement called the International Civil Aviation Organization accord, intended to ensure that the member countries -- Canada included -- do not tax international carriers on jet fuel purchased in their country. For example, when the federal government charges an excise tax on jet fuel, they rebate that excise tax charged to the international carrier. However, the provincial government has been of the opinion that they are not a party to this agreement, and therefore they tax the jet fuel purchased in their province by international carriers without rebating that amount.

The problem is that the other countries who have signed this agreement are eventually going to become fed up with the jet fuel tax on international carriers and begin taxing Canadian purchases of jet fuel abroad. To them it doesn't matter whether the tax is federal or provincial; it's still a tax on jet fuel used by international carriers and thus is in violation of the ICAO accord. And if these foreign countries start taxing Canada's international flights, Canadian airlines' costs will be further increased and their competitiveness that much more diminished. We are going to drive Canadian customers to the south -- more American shopping or south-of-the-border shopping for your airline travel as well -- if this tax is imposed.

Finally, Judy Lindsay in the Vancouver Sun financial pages has made reference to this. She says:

"Johnson takes over as top gun of Vancouver International Airport...." She's reporting on the transfer of the Vancouver International Airport from federal authority to Vancouver. "And waiting for Johnson will be Clark's hike in the jet fuel tax. It's just 2 cents a litre, but it will push up costs in a highly competitive industry that is reeling with heavy losses. For instance, it will cost Air Canada $3 million this year. Clark's revival of the capital tax will take another million out of Air Canada, which lost $218 million last year. The fuel tax, capital tax and other measures will cost Canadian Airlines International more than $6 million."

G. Farrell-Collins: I too would like to rise in discussion on this bill. As my hon. colleague mentioned, some elements are good. I would like particularly to comment on the fuel tax rebate, which has been expanded from $200 to $300. While I would like to give the government credit for this, I'd like to first of all give credit to the gentleman who first advised me and my colleague from Okanagan East on this issue and that it was a problem.

Dr. Nigel Hughes wrote to the member for Okanagan East on November 10 of this year with concerns regarding the $200 cap on fuel tax rebate to the handicapped people, and stated that it was a hardship. Afterwards, correspondence did ensue between the member, myself and finally the Minister of Finance, who advised that, given the reasons stated by Dr. Hughes, he would be taking this into consideration in his budget. I also followed through with correspondence from the Minister of Health, and she too was supportive.

In the end the rebate was increased to $300. I haven't had a chance to talk to the gentleman from south Okanagan with regard to whether or not $300 is appropriate, but I am sure that he is happy to know that the legislators on both sides of the House are working to ensure that these concerns are brought forward. So I'm encouraged to see that change and that amendment brought forward in this act.

[ Page 613 ]

However, I do have some fairly strong concerns with this bill, and some of them were stated by the member for Richmond Centre. I would like to elaborate, if I may, on a couple of them.

First of all, I really found it intriguing and interesting to hear the Minister of Finance use the words "revenue-neutral." The last time the public heard the words "revenue-neutral" was from a federal Finance minister, and they all know exactly what happened with that. So I take that with a large dose of salt, and I'll be watching very closely to ensure that in fact the figures do remain revenue-neutral and, if they are not revenue-neutral, that the minister is held accountable for that. People do not want to hear one thing and then find out some time later, when the numbers start to come in, that in fact the other has occurred.

The minister also made mention of the fact that the jet fuel tax now places us at comparable tax levels on jet fuel with the rest of western Canada. Again that's the Peat Marwick mentality that's reflected in this whole budget and now obviously in the bills they are bringing forward to implement it.

The principle of making this tax comparable with the other provinces that we are competing with defeats the whole purpose. We must realize -- and I don't know how many times we're going to have to stand in this House and say it to the minister -- that we don't compete just with Alberta, Saskatchewan and Manitoba. We compete with Washington State and the Orient, and the airlines in this country compete with airlines from those other jurisdictions.

I'm from the Fraser Valley. I don't know if the minister has ever spent any time in the Fraser Valley, but there's a huge, wonderful highway that goes right from Vancouver -- and his riding, for that matter -- straight down to the border crossing and down to Bellingham, where there's a booming airport that's doing fantastic business because of the taxes in British Columbia. Many British Columbians are going south to the border to catch a flight to their holiday destination or their business destination. Cargo companies are also shipping out of the U.S., because it's cheaper. The airline industry -- in this province in particular, but nationwide -- is experiencing extreme hardship, and this other tax added on top of that will do nothing more than drive more businesses into the ground or south of the border. We've heard that again -- just another one of these interesting proposals.

I also have some very strong concern when I hear the minister reiterate today -- and again in the bill -- that the increased economic activity will ensure that this tax doesn't create a hardship, and in fact that's where the increase will come from. I wonder where this increased economic activity is going to come from, if the industry is being driven into the ground and south of the border. It's perhaps a fundamental flaw in the strategy of the government and in the strategy of this budget.

We need to look at the ways that this bill -- and particularly the fuel tax of this bill -- will affect the airline industry in particular. When we see a 2-cent-per-litre increase in tax, that doesn't seem like a whole lot to the public who drive around in their cars and see the gas prices go up and down within a span of 10 cents sometimes. But people have to understand that a 747 in one takeoff uses more fuel than your vehicle will ever use if you drove it into the ground for 100 years. Two cents added over the volume -- the millions and millions of litres of fuel required in the operation of aviation -- adds up to a lot of money.

Canadian Airlines estimates it will cost them another $7 million for jet fuel in flying out of British Columbia alone; that's a lot of money. That's from a company that is in dire straits. That company has lost hundreds of millions of dollars in the last year, and I don't even know what the figure will be for Air Canada, which also has lost hundreds of millions of dollars in the last year -- not to mention Air B.C., Time Air, Pacific Coastal or Wilderness Airlines. All of these companies that operate out of Vancouver in particular but British Columbia provincewide are going to be harmed by this tax and are simply not going to be able to compete anymore with the foreign carriers and with the carriers, particularly from the United States, that are drawing their passengers away from them.

[4:15]

In closing this debate on this particular issue, this bill -- and particularly the jet fuel tax that's being imposed by this government -- will severely attack the Canadian airlines that are trying so hard in an extremely competitive industry to make a living. There will be layoffs in the aviation industry, most likely. A $7 million loss of Canadian Airlines alone, added to the other losses, will certainly have an impact on the number of people that the company is able to hire. And that's one airline. What about all the other ones? We're losing jobs for the working people in this province because of a 2 cent tax grab by this government, and I think it's shameful.

What about the fuel companies themselves that are going to lose on the sales, which the member for Richmond Centre talked about at some length? It now becomes cheaper for a company, believe it or not, to ferry fuel from Los Angeles, where they can purchase it, up to Vancouver, avoid refilling in Vancouver and fly back using American fuel. That doesn't make any sense environmentally.

I'm a pilot and know how much fuel it takes to carry fuel. If you're going to add the thousands of pounds of fuel that you have to ferry up to Vancouver and back again, that decreases the efficiency of that aircraft. It requires more fuel to burn on the flight, and that has a strong and very profound environmental effect. It is very shortsighted of this minister to levy this tax without any foresight into what effect it is going to have on the environment of both our country and the American nation. It is simply unrealistic, and the minister has been very shortsighted and perhaps has a very narrow focus in that he wants to raise taxes; he wants to raise money, but he's not taking a very careful, close look at what the effect is going to be on the economy, the jobs and the environment of this province.

There's another area in this regard that is of great concern to me, and that is tourism. I'm not going to speak long on that, because I know the member for Saanich North and the Islands, who is our Tourism critic, would like to cover that at greater length. But 

[ Page 614 ]

there will be a severe effect on restaurants in British Columbia. There will be a severe effect on hotels in British Columbia, which had a very poor year last year, I might add. There will be a very strong effect on other sectors of the tourism industry: bus tours, etc., and all the other service industries in this province. People will no longer be able to travel to British Columbia. There will be increased costs, and people will not be able to travel within British Columbia from one point to another because of the increased costs.

This is all going to be handed back to the consumer. It's going to be handed back to Joe and Martha at home, and when they're planning their trip up to Dawson Creek or other places in the interior that need those tourism dollars, they're not going to be able to do it, and they won't make the trip -- again, very shortsighted and a very narrow focus of this government. They should be thinking in a much broader way, and they should take heart and listen very carefully to some of the positive suggestions being made by the opposition ranks.

C. Serwa: It is always a pleasure to rise in debate in this Legislature, and at this moment on second reading of Bill 8, the Motor Fuel Tax Amendment Act, 1992, submitted, I might say, by the Minister of Finance with a Vancouver-Kingsway perspective. Debate on second reading on the philosophy and principle of the bill gives us considerable latitude. I agree with the previous speaker that the minister has been misguided in the presentation of this bill and exceedingly shortsighted.

Transportation is what makes things happen in British Columbia. Most of the population, most of the economic growth and development that takes place in this province, most of the richness of this province is developed in the interior of the province. Transportation is a major challenge, and it's an expensive challenge. Whether you like it or not, the lower mainland, the Vancouver area and the Victoria area benefit from the activities that take place in the entire province, whether it's the generation of hydro power, oil and gas or coal -- all of our natural resources. They all come down and support the strong and vibrant economy the people in Vancouver enjoy.

This bill penalizes economic activities in the entire province of British Columbia. I'm really concerned about that. This government has been consistent in going on record in violent opposition to success -- certainly in violent opposition to any economic activity in British Columbia. At the same time, they're saying that they're saving jobs and going to increase the wages for their union brothers and sisters. What they're doing in this bill is taking jobs away from British Columbia, union, non-union or a private company. They're even increasing costs to municipalities -- to government at all levels, including the provincial level -- with this particular bill.

The government doesn't appear to like the fact that our fuel taxes were the lowest in Canada. It bothers them. I don't know why, because our strong economic activity is the best opportunity to acquire the tax revenue required to operate this province. The Minister of Economic Development and certainly the Minister of Finance realize that we're far better off working on a tighter margin and a larger volume. We're always safer with that. But what we're trying to do is pickpocket the people of the province to death. With these particular measures, we're going to slow down and kill the enthusiasm and energy that makes this province so rich and successful.

I've alluded to the fact that the government seems to represent only the interests of people in Vancouver, where most of the members come from. The concern is that they seem somewhat insulated and divorced from economic realities that prevail throughout the rest of the province, and that all the economic activity trickles down and benefits Vancouver.

Look at the increase in the tax on aviation fuel. There are certainly international implications; there are certainly tourism implications. But with our health care system, when somebody in the northern part of the province has an acute health problem, they require air transportation to bring them to the lower mainland or the Victoria area. If they have cancer, the cancer treatment facilities are in the lower mainland or the Victoria area. What we're going to do with this aviation fuel tax will simply impact the population in the hinterland of British Columbia -- the people that generate the strong economy for this province -- with additional costs. It doesn't make any sense; it's not fair. It doesn't increase stability or confidence in the government.

Transit costs. That's an item where 95 percent of the costs are incurred in the greater Vancouver and greater Victoria areas, with 5 percent going out to the rest of the province. Transit costs will again be increased. By increasing the motor fuel tax, the minister is imposing additional costs that the ordinary average British Columbian will have to pay.

What we're going to do is make it more and more difficult to maintain the energy, enthusiasm and attitude that really drive the economy of British Columbia. We have awesome competition out there. The Minister of Economic Development surely realizes the type of competition that we have. We can't insulate ourselves and think that we're immune to out-of-province competition, whether it's east and west nationally or north and south internationally. Across the world, there's a great deal of competition. We're pricing ourselves out of the market with this pickpocket type of taxing initiatives coming from this government. I'm not proud of them, I'm not pleased with them, and I can't see how the government can be pleased with them. I suggest that the caucus would be wise to talk to the Minister of Finance and ask him to withdraw this particular bill. It should not proceed past second reading stage -- it's that poor a bill.

Ferry costs in the province of British Columbia will be increased dramatically.

Hon. G. Clark: How?

C. Serwa: Because of the increased fuel costs. You said it was revenue-neutral -- and the GST, as an earlier speaker said; another Minister of Finance, in a national forum, indicated it was revenue-neutral. It's not your 

[ Page 615 ]

intention to have anything revenue-neutral. Railway costs and transportation costs will increase. That is not a level playing-field for economic opportunities for the interior of the province. They will all increase with these tax measures.

Commercial truck transport costs will increase, again favouring that heated Vancouver economy -- where the minister is an MLA for Vancouver-Kingsway -- to the detriment of the rest of the province. I lament that. I can see the tack that the minister is taking. He's favouring that heated economy where we can't even build enough freeways and roads because of the difficulty. What we should be doing is encouraging economic development in all regions and all areas of the province. This discourages that economic activity.

If the government believes that they're on the road to success with this particular bill, I suggest that if they look at the arrows painted on that road they'll find that the arrows are pointed the wrong way.

Tourism will be dramatically affected. We look at the challenges right now. Tourism is the number three industry in the province of British Columbia. If I had my druthers, we would reduce or remove a lot of the taxes on our fuels to again encourage tourism and associated industry growth in the province and to strengthen the economy. From the volume in that economy, we're safe in getting the necessary revenue to operate government.

This bill fails in every aspect of economic activity and jobs, whether they're union or non-union. It will affect all of the people of the province. It doesn't inspire stability and confidence.

The environmental concerns are not attended to. We should also be encouraging ethanol use in fuels, such as gasohol, which perhaps contains only 10 or 15 percent of the ethyl -- or methyl -- alcohol. We're not doing that. The minister has gone on record as serving notice to the people of British Columbia that in fact the environment really doesn't matter at all. The tax concessions to clean-burning fuels such as natural gas and propane will be removed, so the capital costs that are involved with those transitions in the automotive industry will not take place, because the period left to amortize the costs of them will not be here. The government, through the actions of the Minister of Finance, is certainly no friend of the environment as it purported to be prior to the election.

In conclusion, I oppose this bill, and the philosophy, principles and basis on which it was presented. Frankly, I appeal to the New Democratic Party caucus to talk about this matter in caucus, because the members come from all regions of the province. They're well represented -- all regions in the interior of the province. The members must speak up for their constituents. The Minister of Finance has instituted a tax grab again for the government, and the minister is endeavouring to deny it. What he is doing is denying the opportunity for economic activity and growth in the interior of the province.

[4:30]

C. Tanner: Mr. Speaker, I would like to address the minister on his imposition of a higher fuel tax as it relates to the tourism industry.

This government has made a decision, I suppose in good conscience, that they are going to reduce the investment that they put into the advertising budgets of various areas that in themselves promote tourism. That was a fairly serious decision but one that they're entitled to make. On the other hand, if they're going to do that, surely they shouldn't be expecting that same industry to generate tax income that they're going to invest in departments other than the one that generates it.

To illustrate the point of view that I would like the members to consider, I'd like to read a letter to the House that was addressed to the Minister of Finance in the province of Alberta early in the year 1990, after their experience with an increase in fuel tax. The letter is from Peter C. Wallis of Canadian Airlines International, which "voiced its opposition to the increase in tax on aviation fuel to 5 cents per litre in 1987. At that time, the province of Alberta was not willing to reconsider their position on the tax. The uplifts of fuel for Canadian Airlines in Alberta have fallen as a result of the higher cost of fuel and changes in the routing of our aircraft." In 1988, on 208 million litres, the tax was $10 million. In 1989, on 126 million litres, the tax was $6 million. What the hon. minister should understand is that while they increased the tax on the aviation fuel that they sold, in actual fact the total income dropped.

The letter went on to say: "We have increased our uplifts in B.C., where the present tax rate on aviation fuel is 2.81 cents per litre." Isn't that a humourous situation? Now that B.C. has caught up with Alberta, we won't see those planes here, either. We all know where they'll be going. They're going to be going south of the border, where it's even cheaper still. "We continue to believe that the increase in 1987 was unwarranted and will be costly to Alberta over time. A lot of the fuel replacing the Alberta uplifts are purchases from outside Canada. Alberta loses not only the tax but also the sale of the product." He went on to request that his government reconsider its tax position.

I would ask the minister to listen to what this gentleman is saying to the Alberta government. We have exactly the same problem here. We should be reducing taxes on fuels like this that will promote tourism.

Speaking to the general principle of the bill now rather than to the detail.... Many members on this side of the House will be speaking to the detail, but I would like to point out to the minister how he's hurting me and my constituency three times over.

Firstly, I have the airport for the city of Victoria in my constituency. That airport will be selling the very fuel that he wants to raise the taxes on. The people who are working at that airport can soon look forward to a lack of work -- hopefully not no work -- for the simple reason that the planes won't be coming there to fuel. There won't be the jobs that the very minister is trying to protect. Secondly, he's hurting my constituency because tourism is a very important part of our income. 

[ Page 616 ]

So he's impinging on their jobs, and he's taking away their source of income. Thirdly, everybody in British Columbia is going to suffer from the lack of tourists, who are creating employment, and consequently my constituency is going to suffer a third way.

I would ask the minister to give very serious consideration to reviewing this bill as to its purpose. The balance of the bill makes sense to this side of the House, and I think most members have said so, but the imposition of a further 2 cents on aviation fuels has very serious implications. It will raise, we estimate, approximately $16 million. That $16 million is virtually being taken out of the pockets of two types of people: the citizens of British Columbia, who travel mostly by air; and the tourists who bring into this province the second-largest amount of income generated in the province -- not, as the hon. member from the third party said, the third-largest, but the second-largest. We're talking about an income of approximately $5.2 billion. The minister is putting in jeopardy an already difficult situation and a difficult industry.

I would ask the minister whether he could assure this House that, on reflection and on the input of the members of this side, he would withdraw the tax.

L. Fox: Hon. Speaker, I rise to speak on the intent of Bill 8 with respect to the fuel tax area. Air flights and air transportation to northern B.C. are not a luxury. It's an essential part of the life and development of northern B.C. This projected increase of 2 cents per litre will have a substantial impact on the ability of the residents of northern B.C. to come to the south for essential services such as health care. Health care is something for which, because of the amenities that we lack in northern B.C., we must come to the lower mainland. Presently, to fly from Prince George to Vancouver, the average resident has a cost of approximately $500. I know that that 2 cents a litre will serve to increase those costs substantially.

Last year, in this House, there was a recommendation that a program be put forward to give assistance to individuals travelling from rural parts of the province to the lower mainland for their medical services. Another program that was put forward was also helping to defray those costs to some degree. I speak now of the breakaway lotteries program. That lottery program was putting a substantial amount of money directly into the community. Some of this went to service clubs, which have helped to sponsor individuals who could not afford to come to the lower mainland at existing travel costs. It subsidized them so they could do it. We now have this government not only increasing airfare to the rural residents of this province, but also taking away a revenue opportunity for people who could not afford those tickets to come down and receive those essential services.

I submit to you that this is all very shortsighted. There are other impacts, direct impacts, that this will have on the ability to do business anywhere in the rural parts of this province. Transportation is a large cost of doing business, particularly in northern B.C. Much of that cost relates directly to air freight. We not only impact those businesses by increasing a capital tax, by increasing an income tax, but now we're also increasing their cost of doing business by increasing the freight factor. I submit to the Minister of Finance that you really should have a good look at what the climate is for doing business in the rural and northern parts of this province.

Tourism is a major factor. We have many guides and outfitters, and most of their clientele come by plane into the interior to enjoy the wilderness that we try so hard to protect. In any case, we not only increased the levies, the dues and all the licensing fees for those guides and outfitters, but we once again increase their cost of doing business by increasing airfares.

I am really concerned, as well, for the impact this will have on this House itself and the government of British Columbia. We all know that a vast amount of the air travel is done by people working for the province of B.C.

Does it make sense to increase on one side the expenditures of doing those businesses, while on the other side you decrease the revenues? I submit to you, hon. Speaker, that this 2 cent-a-litre increase in fuel tax has far-reaching implications -- far beyond what the Minister of Finance had time to give due consideration to. I also appeal to all rural members of the House -- no matter which side of the House they sit on -- to ask the Minister of Finance to reconsider this bill.

G. Wilson: Mr. Speaker, my remarks on this bill will be relatively brief. Much of what I was going to say has been said by other members. But I'd like to draw the Minister of Finance's attention to the tax competitiveness part in the Canadian airline industry report from the Conference Board of Canada, authored by Michael Grant in 1991. I would like to draw the minister's attention to the point of view that is outlined in the executive summary.

I notice that the expected revenue from this jet fuel tax is substantial. In this report it suggests that capital treatment did not play a greater role in tax competitiveness with the United States, in the provisions of U.S. tax laws. In fact, in this executive summary it makes very clear that the revenues that were anticipated didn't materialize. In fact, it argues that in the Alberta case, where aviation fuel was subjected to additional taxes, the fuel tax revenues in terms of tax paid diminished from $10.4 million to $6.3 million from 1988 to 1989.

So if this minister has banked on getting a bit of a windfall in his budget to offset some of the other costs he has incurred in his spending measures, I would hope that he would take under advisement the material outlined in this report by the Conference Board of Canada on the tax competitiveness of the Canadian airline industry. Clearly the second point in this report -- and I think the study is certainly one that looks at a number of items.... If one looks at the tax competitiveness and the percentage with respect to various agencies in the United States and in Canada, it makes it very clear that the big loser in this is going to be the taxpayer. Why? Because one of our principal airlines -- in fact, the principal airline, some would argue, depending on which wing you're crossing on the television ad -- Air Canada, is a Crown corporation. Air Canada, in terms 

[ Page 617 ]

of its position as a Crown corporation prior to its privatization, cost the taxpayers many millions of dollars. Now that we have gone into the privatization process with Air Canada, we find that not only are we continuing to put it in a non-competitive position, but that we are making other competing airlines, such as Canadian, suffer the same kind of problem as a result of this tax. Similarly, I would draw to the minister's attention -- and again, it is included in the proposition here -- that such a tax is going to provide a much greater benefit to those airlines chartered in the United States because of the provisions of U.S. tax laws.

Mr. Speaker, I once again have to remind the Minister of Finance that he cannot, when he's putting together his budget.... I would hope that the Minister of Finance would listen to this word of advice: when you're putting together your budget, you cannot simply put in place a proposition that considers that British Columbia can be treated in isolation from its competitors. This executive summary shows quite clearly, in the capital treatment that has been given with respect to competitiveness with the United States, that the U.S. airlines will now, again, have a much greater and full advantage. It points out here that the assumptions governing the proposition outlined in the minister's tax grab against the airlines are unfounded. It is unfounded, and the documentation in this report makes it quite clear.

[4:45]

The second message I would give to the Minister of Finance -- which I'm not sure he has considered, and he should consider it prior to putting in this tax -- is the question of the United States allowance for tax-based leasing that enables a non-taxable lessee to benefit from tax depreciation by leasing from a taxable lessor. That is something that Canadian firms have had to look to in terms of looking abroad for leasing agreements in which they can incur withholding of tax leases for domestically used aircraft. I don't believe that this minister has considered this proposition, and I suspect that the question of Canadian firms looking abroad for leasing arrangements that will allow them to incur the withholding of tax on these leases will also have a deteriorating effect in terms of the competitiveness of Canadian firms.

This proposed tax is not only ill-conceived, it is going to create greater hardship in Canadian industry. Other members have outlined quite clearly what the impact is likely to be on the citizens of British Columbia. Let me just say in closing that those people of British Columbia.... This Minister of Finance might do well to travel and meet and listen to them: citizens in the Peace River, in the Prince George area, in Prince Rupert, in the Kootenays and the Cariboo; those who live in the Okanagan and try to travel British Columbia by aircraft. They remember only too well that Prince George and Kelowna and other areas used to be serviced by jet aircraft that were able to provide frequent service to and from their communities. Not only are they now being serviced by different aircraft and the frequency of flying has been reduced, but they are going to find themselves facing increased costs because, to be sure, the significant increase in costs that the airlines are going to incur from this punitive tax is going to be passed down to the travelling public.

I would urge that all members of this House recognize how regressive this tax is, how unwise it is. I would urge that they read and make themselves apprised of what happened in the Alberta example, and in recommendations contained in this most wisely put together report -- the Conference Board of Canada's report on competitiveness -- with respect to the Canadian airline industry. When they have apprised themselves of this information I am confident that all members will defeat this bill at second reading.

Hon. G. Clark: I would like to make a few remarks, if I could. First of all, I want to just comment on the member for Okanagan....

An Hon. Member: West.

Hon. G. Clark: West. I don't want to get confused with Okanagan East. That would be really unfair to the member for Okanagan East, I might say.

The member for Okanagan West was completely incorrect. This is revenue-neutral when it comes to gasoline taxes, and I want to make it clear that ferry rates and all the stuff he was talking about was completely off base; he was completely wrong. I think the members of the official opposition recognized that and had no problem with the bulk of that section of the bill.

Where the members of the opposition are correct, of course, is in focusing their concern on the aviation fuel tax increase. Obviously, nobody wants to increase taxes, and I don't disagree with that at all. We had a tough judgment to make. However, 2 cents a litre does raise $16 million, and I just might remind people to put it in context. The entire school lunch program in British Columbia is going to cost the government $8 million, so if we did not raise this we would have to eliminate the school lunch program, literally, or some other things -- close a few hospital beds or more, or whatever. This is a difficult time and we had to raise revenue. We are competitive with the rest of Canada on the taxes.

I would like to say to the Leader of the Opposition that I appreciate the tone of his remarks, and I will review the information he has provided -- I haven't done that. If this results in reduced revenues, clearly we have to review it. But I think it's important that we don't make causal links that aren't necessarily there. There may be other reasons that revenue has declined in Alberta as a result of their increased taxes. It may be that there are, because of deregulation and the like, fewer routes, fewer airplanes. And the airline industry itself is going through significant restructuring. So I think we have to be careful with causal links.

Our judgment from my ministry staff, who have an excellent record and whom I have no hesitation in supporting, is that we will receive $16 million in increased revenue. We are competitive across the country: 5 cents a litre is what Alberta charges; the prairie provinces charge more; Toronto charges 5 cents a litre, as I recall. So we are competitive, and clearly, 

[ Page 618 ]

when you're looking at the tax burden and who pays it, this is one which I think we can clearly defend.

Obviously, when you have difficult choices to make you have to weigh these questions. Do you want us to cut spending in health care or in education by $16 million? All the members opposite want us to spend more money in health care, more money in education and the like. We chose, of course, to have some modest tax increases to protect essential health and education programs. This is one of them. We are increasing the aviation fuel tax, but we have made a number of amendments which I think are beneficial, both to the environment and, of course, increased accountability.

So with that, I move second reading.

Motion approved on the following division:

Bill 8, Motor Fuel Tax Amendment Act, 1992, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

[5:00]

The Speaker: Hon. members, if I could beg the indulgence of the House, earlier today the leader of the official opposition sought to move adjournment of the House pursuant to standing order 35, in order to discuss a definite matter of urgent public importance: namely, emergency health care priorities and especially surgical waiting-lists in the province. Following submissions from both sides of the House, I reserved my opinion as to whether the matter qualified under standing order 35, in line with the usual custom.

I would note at the outset that the topic raised by the member is apparently of fairly broad scope and the kind of matter that is customarily discussed in Committee of Supply during estimates. Members will note that over the past few days the House has been embarked upon a debate customarily referred to as the budget debate, which was concluded by passage of the resolution that the Speaker do now leave the chair for the House to go into Committee of Supply. That resolution passed last night immediately prior to the adjournment hour. Accordingly, it is competent for the House to embark upon consideration of the estimates of the Ministry of Health in Committee of Supply, and thus an ordinary parliamentary opportunity will occur when the matter may be discussed.

Secondly, I note that the statement raises a matter which has been mentioned on numerous occasions in this House, both during this session and during previous sessions, and accordingly is a matter of long standing. May's 16th edition, at page 370, points out that: "The fact that a grievance is continuing is not sufficient if it is not of recent occurrence." For a parallel to this matter, I would refer members to the Journals of the House, 1981, at page 124, when a similar matter was raised and essentially similar reasons given why it did not qualify under the provisions of standing order 35 and accordingly ought not to proceed.

Hon. members, in regard to the standing order 35 application raised by the Minister of Forests, that matter is still under consideration, and I will be bringing back the ruling tomorrow.

Hon. G. Clark: I call second reading on Bill 3.

TAXPAYER PROTECTION REPEAL ACT

Hon. G. Clark: Hon. Speaker, I move that the bill be now read a second time. Bill 3 repeals the Taxpayer Protection Act. This act was passed only last year. It was apparently an attempt by the previous government to stop tax increases by legislation. It failed in such a short period of time because it froze taxes in the same year the government was experiencing a record deficit. It is now more clear than ever that this act could not take the place of a firm policy commitment to balancing expenditures with revenues. The government has concluded, after review of the province's financial position, that continuing the tax freeze would be unrealistic and financially irresponsible. In current circumstances it would have meant letting the deficit run out of control. This government has instead chosen to produce a balanced package of controlled spending growth, greater efficiency and revenue increases.

Repeal of the act will clear the way for revenue measures that are balanced between individual corporations, are based on an ability to pay, and will ensure the future viability of this province's social programs. The act also attempted to impose fiscal responsibility by requiring the Minister of Finance and Corporate Relations to submit a balanced budget and debt reduction report to the Legislature. The independent financial review confirmed what British Columbians already knew: these reports served only to mislead the public and create confusion. They were no substitute for good financial management. The review recommended that 

[ Page 619 ]

this act be repealed, and the government has accepted that recommendation.

It's worth noting that not only are we repealing this act, but the previous administration, even having just passed the act, had to bring in legislation that said that notwithstanding the Taxpayer Protection Act they were raising taxes. We could have chosen to maintain that myth, and every bill we brought in could have said "notwithstanding the Taxpayer Protection Act," but that's dishonest. That's what British Columbians rejected in the last election campaign. We're committed to a balanced budget. We've demonstrated that commitment with concrete action. We've cut spending rates of growth in half, and we have had to raise some taxes in order to maintain essential health and education programs. So we're being honest with taxpayers. This bill simply repeals a dishonest piece of legislation, legislation which was discredited at the time and has clearly...

Interjections.

The Speaker: Order, please, hon. members. I cannot hear the speaker.

Hon. G. Clark: ...been discredited subsequently. We're simply instituting good, solid, sound fiscal management in place of specious legislation. This act repeals that legislation.

J. Weisgerber: Clearly it's a disappointment to us, the Social Credit members, to see the repeal of the Taxpayer Protection Act. You will recall that the act had two essential ingredients. First of all, it froze taxes. It provided that government had to bring in legislation in order to increase taxes. It was clearly a commitment to maintaining tax rates, an undertaking that was embraced by both parties -- and, I assume, by the other third party as well during the campaign.

It also, and perhaps most importantly, was a commitment by the government to a balanced budget over the five-year cycle. That indeed was a concept that was eagerly jumped on by the NDP and became central to their election campaign. Indeed, we heard day after day a commitment by the Premier and by the then Finance critic to the notion of a five-year balanced budget. They knew -- and we've demonstrated quite clearly that they knew -- within two or three hundred million dollars, where the budget deficit would be. It's most disappointing to come back and in the first session of the Legislature see the government totally abandon the commitment that was central to its election campaign, that of a balanced budget over the five-year cycle. How very quickly the government found that it couldn't live up to its promises, and how eager it's been to get rid of the legislation that would have held them to their own election promise.

This is the irony of the cancellation of the Taxpayer Protection Act, because it spells out exactly the platform of the NDP during the last election: hold the line on taxes; taxpayers can't pay any more; taxpayers are fed up; no new taxes. Those were not our words; those were the words of the government now in power. The promises they made to British Columbians were the issues outlined specifically in the Taxpayer Protection Act: no new taxes and a balanced budget over five years. It's almost incomprehensible, in the first session of the Legislature, less than a month since the Legislature was called back, that this government would be repealing an act that embodied all of the promises they made to British Columbians.

I think that if the government had put its mind to it, it could have in fact balanced the budget over the business cycle. It could have brought in a budget with a much smaller deficit than the one we see now -- the biggest deficit ever tabled by any government in the history of British Columbia. Simply to have taken some action -- frozen public sector salary increases, avoided adding 1,500 new bureaucrats -- would have significantly reduced the size of the deficit that the government has tabled. It would have been, and could have been, the basis for the government fulfilling its promise of a balanced budget over five years.

The government says that that's impossible. They've thrown up their hands. They have used the write-off of 15 years' possible bad debts into a period of the last six months of the fiscal year, inflated the deficit in the last fiscal year, and simply thrown up their hands and said: "I'm sorry, we can't fulfil our promises. We would have liked to, but it doesn't look like it's going to work out." So not only are they not going to fulfil their promises, they're going to cancel the legislation that would have reminded them day in and day out, budget in and budget out, of all of the promises they made during the October '91 election campaign.

It's amazing that the government, with hardly an embarrassed look -- although there are a few of them around here now -- would have repealed this legislation. It's absolutely unacceptable that they would deny all their promises to the people of British Columbia. By repealing this act, they clearly indicate that not only are they not going to make living up to their election promises their single focus for this year, but they've abandoned it for the term of their mandate. They're saying to people: "We don't intend to live up to, and we've demonstrated that we're not living up to, our election promises. We're also telling you upfront that we've no intention of even trying to fulfil our election promises during the next three or four years. We have simply used the nice-sounding words of 'no tax increases,' 'no new taxes' and 'a balanced budget over five years.' Those kinds of commitments were good enough to get us elected, but we have no intention of following through on them. And we're going to get rid of legislation that might remind us of it." It's disappointing that having cancelled the legislation, they've proposed nothing similar to give any degree of comfort to British Columbians, whether they're taxpayers or not. They have simply said: "We promised. We've reneged on our promise, and we're repealing the legislation that might have reminded us of our election promise." So it's with a great deal of disappointment that we note the government's decision to repeal this legislation. It doesn't bode well for British Columbians.

[ Page 620 ]

F. Gingell: What was the Taxpayer Protection Act? First of all, it was an act that limited revenue-raising methods. It defined a length of time in which taxes could not change. It listed specific taxes that could not be increased. It contained a formula for determining new tax rates. It made a statement that there would be no new taxes. In addition, it provided that the freeze could be extended to other taxes not specified in the act, and it also stated that this act was paramount and could not be overruled by provisions of other acts. This act was referred to by Premier Vander Zalm in the following terms. He was quoted in Hansard, May 23, 1991, page 12162:

"Mr. Speaker, I'm also concerned about what has happened to the Taxpayer Protection Act. I believe the Taxpayer Protection Act was the greatest achievement by any government in this province's history or this country's history. I don't believe it has ever been done anywhere on the continent, where a government said: 'We will balance the budget over the term of five years. We will present annually to the Legislature a plan for this balanced budget. We will present a plan for how we will reduce the accumulated debt. We will freeze tax rates for three years, for it to be reviewed at the end of three years'."

I presume, hon. Speaker, that the members of the government who were in opposition at that time recognized that and agreed with the statements that then-Premier Vander Zalm made. Because Mr. Janssen -- he isn't here; Mr. Zirnhelt -- he isn't here; Mr. Jones -- he isn't here; Mr. Perry....

[5:15]

The Speaker: I would remind the hon. member to refer to members by the names of their ridings.

F. Gingell: At any rate, if members will refer to the Journals dated March 21, 1991, on page 153, they will find that every single member of the opposition at that time voted in favour of this bill. Now one of the first bills that is brought up....

G. Farrell-Collins: Did the Minister of Finance vote in favour?

F. Gingell: Yes, the Minister of Finance did.

Well, what the opposition wanted at that time and supported was a bill that they believed would control the actions of the government. They believed that this bill would control expenditures and revenues. They had been going through a period in 1989 and 1990, where government expenditures were escalating at an alarming rate.

But now the shoe is on the other foot. Now they do not wish to be restricted and restrained from their practices by this act, which they previously supported.

The act did other things too. It required the government to carefully think about balancing a budget over a five-year cycle -- a very important function that I'm sure all of us can support. It's a function which this government, during the election that culminated on October 17, spoke about on innumerable occasions, and which was a major part of their platform. We cannot just operate from year to year. We do need to have some understanding. We do need to recognize that the directions that our revenues and expenditures are going have to be measured and planned.

In addition, hon. Speaker, this bill required the government to table a debt reduction plan annually with the budget. We haven't seen that either. Every family worries every year and every month that they pay their mortgage down. They continually work to reduce their debts. This year's budget not only does not contain a debt-reduction plan, it contains a debt-increasing plan: an increase of $3.5 billion, an amount in excess of $1,000 for every man, woman and child in this province. What is wrong with a debt-reduction plan? Surely is it a useful tool and would cause our government and our Minister of Finance to put their minds to the ways in which this could be accomplished.

As the government brings forward a proposal to repeal the Taxpayer Protection Act through Bill 3 without bringing forward an act or a proposal to replace it, they are sending very poor messages out. They're sending out a message that they really don't have a plan. They really don't have a plan to balance the budget over five years. They really don't have a plan to reduce the debt of this province. They really don't have a commitment to fiscal responsibility.

We have to have the positive message for British Columbians that our finances are being planned in a businesslike, sensible and competent manner. We have to have that message not only for British Columbians but also for potential investors, corporations and organizations who may consider British Columbia to be a good place to invest to reach the North American market -- open to them through the free trade agreement -- and into the Pacific Rim. Without a clear message that the finances of this province are being managed in a proper and competent manner, people will not respond.

This government speaks a great deal about fairness. If one goes back to read Hansard at the time this bill was introduced, there is a great deal of discussion about fairness in taxation and the fact that it was the position of certain members of the opposition that the unfairness they saw was going to be frozen into revenue-raising arrangements in this province. Fairness is always in the eye of the beholder, and now we have to behold that the authority to amend this act -- in order to make it fair for British Columbians -- is going to throw out the baby with the bath water.

This opposition would have been far more supportive of this bill had it included a new plan; a new vision; an indication to this House and to British Columbians that this government was going to live up to and keep their commitments to balance the provincial budget over a five-year period; a commitment that they would run the finances of this province in a competent and businesslike manner; a commitment that they would come forward with a debt-reduction plan.

The people of this province don't want to hear any more from this government simply blaming the previous administration and the federal government. What they want to hear is a commitment that we in British Columbia are capable and competent to handle our own finances. The people, hon. Speaker, are tired of 

[ Page 621 ]

being asked to trust politicians who promise no new taxes, when the politicians only turn round and ask for the power to tax them more.

This government has only just begun, and I already find myself asking when they are going to stop hurting the taxpayers. I am deeply concerned about the abolition of the five-year plan, one which would detail the government's intentions to deal with the increasing accumulated deficit. I'm also concerned that the government can now go on running deficits that the next generation can't afford. We have to recognize that this year's budget raises only 90 cents of every dollar that is going to be spent. It is not a manner in which we can carry on. It is a blueprint for financial disaster. On this side of the House we recognize that every year's budget by itself cannot be, and perhaps should not be, balanced. But if we are going to have a deficit, then we need to know the plans that the government has for retiring that in due course.

With those words, hon. Speaker, I will sit, but I will state that we intend to vote against the repeal of the Taxpayer Protection Act.

J. Pement: I rise to speak in favour of repealing the so-called Taxpayer Protection Act. Hon. Speaker, the Taxpayer Protection Act has nothing to do with protecting taxpayers.

C. Serwa: On a point of order, hon. Speaker, the entire debate and second reading on Bill 3 are completely out of order -- and you are going to have to confirm that. Everyone who rose has talked about the Taxpayer Protection Repeal Act. No such act has in fact been tabled. The act that has been tabled is the Taypayer Protection Repeal Act, and we're not debating that. They've been debating something else. It's clearly out of order. I'm asking you to have the Minister of Finance withdraw this legislation, as it is clearly out of order.

The Speaker: Thank you, hon. member, for raising that point of order. Having now looked at the bill, I do see that on the bill itself it reads correctly as "Taxpayer"; however on the covering page it does in fact read as "Taypayer." I understand that the Queen's Printer has sent an amendment forward. But the actual text of the bill does read as "taxpayer," so I will allow debate to continue on that basis. I thank the hon. member for bringing it to the attention of the House.

J. Pement: Again, I say that the Taxpayer Protection Act has nothing to do with protecting the taxpayers. It represents nothing more than an empty election ploy designed to convince British Columbians that the former Socred government has changed its ways. During their last five-year term in office, the Socreds raised taxes on middle-income and working British Columbians and introduced an unprecedented degree of unfairness into our tax system. In fact, even a cursory glance at the act reveals that this so-called tax freeze is full of holes. It doesn't include school taxes or motor fuel taxes. Importantly, it doesn't include the Medical Services Plan premiums as well. This act represents nothing more than a promise not to increase some taxes and tax rates.

[5:30]

British Columbians will not be misled. They are looking for a government prepared to make corporations and the wealthy pay their fair share. This government is committed to bringing fairness, openness and honesty to government. We have disclosed the state of this province's finances, and this disclosure is a first in the province's history. We released the previous year's public accounts early rather than waiting for the spring session to resume. Perhaps more importantly, we commissioned the independent financial review. The Peat Marwick report concluded that many changes should be made, and these changes are to make government books more open to the public, to improve control of government finances and to cut wasteful spending.

I'm pleased to say we have adopted many of the review's major recommendations outlined in this government's first budget. We have eliminated the dubious budget stabilization fund and its five-year balanced budget plan, a plan that was void of any detailed measures required to achieve its objective or any realistic plans that could lead the province out of its deficit position. We have merged all estimates into a consolidated revenue fund at the recommendation of the Peat Marwick review, with a standard accounting procedure that was unknown to the previous government.

We believe in fairness. Our tax structure must reflect our ability to pay our fair share, and our new revenue measures are fair. They are balanced, with individuals and business sharing the load. They maintain British Columbia's competitive tax position with other jurisdictions so as not to discourage investment. New and more fair tax measures designed to raise revenue fairly from those most able to pay are forecast to replace the millions and millions of dollars British Columbia will lose this year from cutbacks in federal cost-sharing.

This New Democrat government believes in truly protecting the taxpayer of this province. The former Social Credit government claimed they could protect the taxpayer by freezing horse-racing taxes, taxes on hotel rooms and corporate capital taxes. My government, on the other hand, has taken the protection of taxpayers seriously. We have not played favourites, like the Social Credit government did. We have been fair.

We raised the personal income tax on high-income earners by 1 percent, reflecting their greater ability to pay. These changes apply to the top 8 percent of taxpayers. Now 92 percent of British Columbians in the middle-and lower-income ranges are protected.

We raised the corporate capital tax to ensure that corporations pay their fair share. The independent financial review confirmed that since 1985, rates have been cut on corporate taxes while individuals have been burdened with large tax increases. Even with this increase, British Columbia's corporate taxes will be among the lowest in Canada.

We have exempted the environmentally friendlier fuels of ethanol and methanol from the provincial fuel tax, which also reflects this government's commitment 

[ Page 622 ]

to a cleaner environment. Similarly, pollution discharge fees will be increased to reflect the real cost of pollution monitoring and control. The more someone pollutes, the more they will pay, and that is the way it should be.

We have introduced a sales tax on legal services in order to fund legal aid for those British Columbians who are most in need of those services -- legal aid for families, single parents, youths and seniors. In Bulkley Valley-Stikine we require enhanced services, and we look forward to better service for our constituents who need this service.

On the expenditure side, this is the first budget in several years to achieve an overall decline in governmental spending growth. This has been achieved without cutbacks to vital services.

The Speaker: Order, please. I need to remind the member to try to keep her comments to debating the principle of Bill 3.

J. Pement: In expenditures on health care, education and other essential programs we have shown that we have those priorities, which isn't shown in the program -- the Taxpayer Protection Repeal Act. This government's commitment to the University of Northern British Columbia and education is one that our constituency looks forward to, and we need that sort of service from this government.

We have further followed the recommendations of the Peat Marwick review, which calls for the repeal of the Taxpayer Protection Act....

D. Mitchell: Point of order. The member's comments are excellent comments, but I think that she's participating in the wrong debate. The budget debate is over. It was completed yesterday; we took the vote on it. We are now dealing with Bill 3, the correct title of which -- I understand, is going to be corrected -- is the Taxpayer Protection Repeal Act, 1992. I wonder if we could deal with this act. I know there are many other members who wish to participate in this debate. The budget debate has been completed, hon. Speaker.

Hon. G. Clark: If I could respond, I know that the member is making excellent points. Of course, she's causing great concern to the opposition, but it is the second reading, and as you know, hon. Speaker, there's a great deal of latitude in second reading: you have to speak to the principle of the bill.

The principle of repealing the Taxpayer Protection Act is to run a fiscally sound government that allows members to talk about what we're doing in terms of governing British Columbia in the use of finances. My sense is that she has been perfectly in order. Repeated references to the Taxpayer Protection Repeal Act are all that's required to be relevant and germane to the principle of the bill.

Interjection.

The Speaker: Order, please.

M. Farnworth: Point of order. We have members of the opposition who are heckling, and they're not in their own seats, and I believe that's also a breach.

The Speaker: With due respect, hon. member, I am dealing with the first point of order. The member for Okanagan West on this first point of order.

C. Serwa: Madam Speaker, I concur with the Minister of Finance. In the debate on second reading, generally considerable latitude is given on the philosophy and principles of the bill, because we are debating something that is broader in nature. I have no difficulty with the debate of the hon. member opposite; I just ask that the same consideration be given.

Normally and traditionally in the Legislature, considerable latitude has been given. If it wanders too far away, then obviously it has to be drawn back. I think the member is trying to make a case, although I enjoy hearing it because she is digging herself in deeper and deeper.

The Speaker: Thank you, hon. members, and I trust that the hon. member for Bulkley Valley-Stikine will take under consideration all that has been said and will continue to try to tie her remarks as closely as possible to the principles of Bill 3.

J. Pement: We have further followed the recommendations of the Peat Marwick review, which calls for the repeal of the Taxpayer Protection Act and its five-year forecast -- the balanced budget plan. Contrary to what its title may suggest, this act has nothing to do with protecting taxpayers. What it really does is freeze tax unfairness.

We on this side of the House chose to make amendments to the tax system that distribute the tax burden more equitably. New taxes are required, given the fact that the federal government is increasingly reneging on paying their share of growth in cost-shared programs. Those objectives would have resulted in the need to introduce new measures to raise the $300 million to $500 million more for revenue that is the shortfall from the federal funding.

Extraordinary measures are necessary to alleviate the budgetary shortfall, and failure to act will lead to greater accumulated deficit. Immediate action is necessary. The former government offered no realistic plans through this act to lead the province out of the recession or to alleviate the province's staggering $2.4 billion deficit. Think of it, hon. Speaker: a $2.4 billion deficit, and this is what the Social Credit government called a balanced budget.

[E. Barnes in the chair.]

In fact, the means to implement the budgetary control set out in the Taxpayer Protection Act are conspicuously absent and merely reflective of the Socred strategy. The act, as it stands, makes no commitment to taxpayer protection for ordinary British Columbians. Tax fairness and ability to pay are lacking. What 

[ Page 623 ]

this government seeks to achieve is greater tax fairness based on one's ability to pay.

Hon. Speaker, our government has brought reality back to the budget process. We have dealt fairly with all British Columbians. We are all working towards reducing the deficit, and I'm proud that this government has opened the books to provide all British Columbians with a view of the accounting of public moneys.

G. Wilson: Mr. Speaker, we on the opposition side of the House wanted to examine exactly what was behind this bill that we now see before us, this Taxpayer Protection Repeal Act. In order for us to find out exactly what the government had in mind, we have taken a bit of time to go back and try and really analyze what they found objectionable about this act and why they would move this, having voted for it. I think it's important that the people of British Columbia know why this government supported this act when in opposition, yet is now repealing it.

We find, interestingly enough -- maybe we can put our finger on it -- with respect to the current Minister of Finance, that when in opposition as Finance critic he suggested that the Taxpayer Protection Act should really be called the Social Credit Deathbed Repentance Act. Perhaps he feels, now that the Liberals are in opposition, that under their own government they no longer require it, having seen the demise of that party. But it's interesting that he also suggested that they essentially would applaud the decision of the proposition. I quote from the March 21, 1991, Hansard, where he says: "...it repudiates the last four and a half years of fiscal management of this administration. It represents a deathbed repentance that will fool nobody." It suggests later on -- this is the former Finance critic, now Minister of Finance: "The bill also contains clauses which limit government spending increases and require balanced budgets over a five-year budgetary cycle." This is the heart of the problem. We have finally put our finger on the real reason why this repeal is desirable for this government now. I continue to quote from the eloquent words of the now Minister of Finance when he was the critic: "Balancing the budget and spending within the means of British Columbians are objectives that we on this side wholeheartedly support...." I would suggest to you that something has changed from the time they were on this side to the time they went over to that side, because those sentiments clearly weren't demonstrated in the budget we saw tabled. What we're really talking about here is a rather annoying piece of legislation, which is going to require that there be some fiscal responsibility and accountability over a five-year cycle, which was a part of the election promises of the former opposition and now government -- that they were going to undertake on behalf of all British Columbians to balance the budget within that five-year cycle. We remember the leader of that party travelling British Columbia and informing British Columbians that this was what they were intending to do. And now they are making a move that would remove legislation that essentially would put in place some kind of fiscal accountability for this government.

I suggest that the hon. Minister of Finance might go back and once again revisit his words in the debate on this measure on March 21, 1991: "Mr. Speaker, we're prepared to support this bill." He suggested that they would be prepared to support this bill because, he argues here, "...with this bill the public can at least be assured that in the budget, which will come down very shortly, this government will not take the opportunity to raise their taxes yet again, as they have done in every single budget since this administration came to office." Those are the words of this Minister of Finance from the debate on this matter when this bill was before the House when he was in opposition.

Perhaps there is some kind of disease that one gets infected with, as they move from one side of this House to the other, which allows them the opportunity to simply cast away all their responsibilities and suggest that the one bill that did put in place some kind of taxpayer protection now needs to be repealed, so that the commitment to make sure that increased taxation is not a part of every budget no longer applies -- that indeed there can be that kind of budget.

Interjection.

G. Wilson: I hear one member opposite suggesting that we'll never be in that position. Well, I would suggest that there are many people who travel this province, some who recorded and reported, who suggested we wouldn't be here. Here we are, as living proof.

The repeal of this bill is one very clear indication that this government has changed its priorities, and that the Minister of Finance should remember his own words. I again go back to the Minister of Finance on March 21 where he said -- and believe me, hon. Speaker, nothing has changed in this: "...British Columbia taxpayers urgently need some relief from the tax unfairness of this government." This Finance minister has put an all-pervasive tax increase as a result of the budget, and has now repealed the very bill that would put in that kind of tax relief.

I suggest to you that this is an example where what was true for the opposition clearly is true in terms of the desirability of British Columbians having some relief from the tax burden. This is now not shared by the minister, who finally has his hands in the pockets of British Columbian taxpayers, and wants simply to take from the people whenever he requires any additional money for the programs that he puts forward.

Let me say this: we on this side of the House would not have such strong objection to the Taxpayer Protection Repeal Act if indeed this government had come forward to replace this act with something else; if the government had said to the people of British Columbia that this act is going to repeal something that was.... I think the quote from the member opposite in her speech, which read remarkably similarly to the words of the Minister of Finance in my Hansard, suggested that in fact this was nothing more than an election ploy. If indeed that was true, then we on this side of the House would be curious to know what measures this govern-

[ Page 624 ]

ment is prepared to put in place that would really implement some kind of taxpayer protection.

What measures is this government prepared to take after they repeal this act to make sure that the taxpayers of British Columbia do indeed have some kind of protection against the ever-increasing demand on their taxes from this government? They won't tell us, hon. Speaker, because I don't believe this government has a fiscal plan, and I suggest that in the repeal of this act they are simply once again allowing government in British Columbia, regardless of the partisan colour or stripe that government may wear, to have a blank cheque upon which they write the amount that the taxpayer must pay.

Hon. Speaker, I think the people of British Columbia want to see that changed. It may be that the members opposite are correct that the implementation of the original act last year was something brought in in the dying days of the former government, that was to try to appeal to the electorate at the election. That may be so, but that does not mean that the act did not have some merit with respect to the protection that the act would afford to British Columbians over the five-year cycle. It strikes us, on this side of the House, that if the government is indeed prepared to take this act and repeal it, then the government owes it not only to the members opposite but more importantly to British Columbians to tell them what they intend to put in place by way of replacement that will once again enshrine and install some measure of protection for the taxpayers.

Hon. Speaker, we on this side of the House, failing any direction, any vision, any kind of formal proposition on this act, cannot support the repeal of this act. Because through the repeal of this act, the people can no longer have any assurance whatsoever -- despite the limited assurance this act provided -- that this government will not simply go and take from the taxpayers in ever-increasing amounts the money they need for putting in place the programs that they have yet to dream up -- the programs that they themselves may be desirous of, as they go out and try to win themselves re-election.

The Taxpayer Protection Act, while not entirely without flaws, had merit. It had merit because it did at least attempt to put some measure of protection in against the kind of increases, escalating increases and demands on the taxpayer that we find all too often in governments across the country.

Let me say finally that had this Minister of Finance been paying a little more attention to the proposition of an exchequer that we put forward, one that I realize he has taken opportunity in this House to ridicule -- the proposition where you have a single spending authority without the opportunity for governments to run a deficit, without bringing back.... Had that been essentially an approach taken by this government, the repeal of this act is something that we could have supported. Had the government put in place that single spending authority -- with a check on deficit spending by government -- then the repeal of this act would have been perfectly sensible, perfectly normal. We on this side of the House would have said yes, there now is some check against the government having runaway taxing authority and runaway ability to simply write a blank cheque every time they need some more money from the taxpayers.

This government has no such vision; it has no such plan. This government essentially wants to remove this act so that they can take themselves off the hook they find themselves on now, which is a commitment to balance the budget in a five-year cycle, a commitment they made to the people during the last election. That's why this act is gone. It is because this government knows.... I suggest that they did not know fully, but now that they have finally realized the implication of their budget, they know that the revenues that they are anticipating will not arise. They will find, essentially through the process of expenditures and declining revenue, that by next budget they will once again have to go out and raise taxes because of the direction this government has taken.

Let me say that we do not have any major commitment to the Taxpayer Protection Repeal Act that could not be replaced with the formation of an exchequer or some other kind of single spending authority and taxation protection for British Columbians. It is our considered opinion that all governments -- whether provincial, federal or municipal -- must become more accountable and must be made to be more accountable to the people of British Columbia before they spend money.

That is clearly why this government wishes to repeal this act, so that they no longer will be accountable and so that they are able to, essentially, write a blank cheque when they put in place the new kinds of spending programs that we are likely to see as we look at this government over the next several years.

I notice that our time is drawing to a close. I have more that I could say on this matter now. However, due to the hour, I would move that we adjourn this debate till the next regular sitting.

Motion approved.

Hon. G. Clark moved adjournment of the House.

Motion approved.

The House adjourned at 5:56 p.m.

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