1992 Legislative Session: 1st Session, 35th Parliament
HANSARD
(Hansard)
WEDNESDAY, APRIL 15, 1992
Afternoon Sitting
Volume 2, Number 6
[ Page 787 ]
The House met at 2:04 p.m.
Prayers.
Hon. T. Perry: In the House today is a veritable horde of 150 grade 11 students, visiting us in groups of 50 throughout the day, from Point Grey Secondary school in Vancouver. Their teacher is Mr. Murray Bowman. I'd ask the House to please make them welcome.
K. Jones: I'd like to introduce my wife Sharon and my daughter Pamela Allen, who is down from Kitimat. I'd like to ask you to join me in welcoming them.
N. Lortie: In the House today I have a constituent, Mr. Donald Anderson, who is a very active and enthusiastic member of our community. Would the House please help me make him welcome.
The Speaker: Yesterday the hon. member for Richmond East rose pursuant to standing order 35, seeking leave to move adjournment of the House to discuss a definite matter of urgent public importance, namely the crisis in the delivery of health care services in our province due to the labour dispute between hospital workers and their employers. Notice was given to the Chair, under practice recommendation No. 8, for which the Chair thanks the hon. member.
The matter raised is akin to but not necessarily identical with an application on April 8 last by the hon. leader of the official opposition, under the provisions of standing order 35. The hon. member stated a number of circumstances, as follows: (1) that the dispute in question has lasted 15 days; (2) that the dispute has now reached a critical stage; (3) that the number of cancellations of scheduled surgery has increased; and (4) that there exists the threat of a provincewide strike.
The hon. member made further observations which, with respect, would be matters of debate if the House was embarked upon a motion to adjourn. A review of the numerous decisions of earlier Speakers of this House and decisions in other jurisdictions clearly shows the matters raised pursuant to standing order 35 in order to qualify must (1) involve more than the ordinary administration of law, in this instance more than the law relating to labour disputes -- here I would cite Sir Erskine May's Parliamentary Practice, sixteenth edition, page 372 -- and (2) involve more than an ongoing issue, even though new facts may have just emerged related to that issue -- similarly, the reference of Sir Erskine May's Parliamentary Practice, sixteenth edition, page 37; in addition, Speaker Schroeder, Journals, 1978, page 127, and Journals, 1982, page 60.
The dispute in question, as the hon. member herself observed, has been ongoing for some time. Moreover, the House was advised by the hon. Attorney General that the Industrial Relations Council is dealing with the issue and that the Minister of Labour was to meet with the parties today. Accordingly, the Chair concludes that the subject matter, while serious, involves the ordinary administration of law, and in accordance with the authorities just cited, the Chair is therefore precluded from asking leave of the House for the hon. member to proceed.
ENFORCEMENT OF
CANADIAN JUDGMENTS ACT
Hon. C. Gabelmann presented a message from His Honour the Administrator: a Bill 21 intituled Enforcement of Canadian Judgments Act.
Hon. C. Gabelmann: Hon. Speaker, I am pleased to introduce Bill 21, Enforcement of Canadian Judgments Act. The purpose of this bill is to improve the current legal rules respecting the enforcement of judgments from other provinces and territories of Canada. This bill implements recommendations of the Law Reform Commission of British Columbia and is also based on the work of the Uniform Law Conference of Canada. The bill will benefit the administration of civil justice among the provinces and territories of Canada. It will ensure that judgments from other provinces and territories are no longer treated as though they were judgments from foreign countries.
I am pleased to say that the British Columbia Legislature is the first in Canada to consider this important legislation. I commend this bill for the consideration of the House and urge its passage.
Hon. Speaker, I move the bill be introduced and read a first time now.
Bill 21 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
YOUTH HEALTH SURVEY
J. Dalton: My question is to the Minister of Health. A controversial private survey, titled "Youth Health Survey," is currently being conducted in some school districts. The survey contains many leading and suggestive questions that students as young as 12 years old are being invited to answer.
Yesterday in this House the Minister of Education stated: "The Ministry of Health has supported the survey...." My question to the Minister of Health is: have you read the survey, and do you support it?
Hon. E. Cull: I haven't read all the questions in the survey, but I am familiar with its contents, and yes, I do support it.
J. Dalton: I would like to give an indication of some of the questions and the nature of them in this survey, and perhaps the minister....
The Speaker: Order, please. In accordance with the rules governing question period, I must as the hon.
[ Page 788 ]
member to ask the question with the minimum amount of explanation beforehand.
J. Dalton: Question 33: "How often do you vomit, throw up on purpose, after eating?" Is that an appropriate question to ask of 12-year-olds?
Hon. E. Cull: Hon. Speaker, if that member was hearing from the number of parents I am hearing from in my constituency office every week about the seriousness of young people suffering from eating disorders, he too would realize how important it is that we get a baseline on that question.
The Speaker: Final supplemental to the hon. member.
J. Dalton: Question 111 from the survey: "During the past 12 months did you make a plan about how you would attempt suicide?" Answer yes or no. I put it to the Minister of Health: is that an appropriate question? By the way, many parents that I'm aware of have refused to allow their children to answer it.
Hon. E. Cull: School boards can decide whether or not they will participate in this survey; parents can decide whether their children will participate in this survey. But I would submit that we have some very serious problems affecting the youth in this province, and if we are suggesting that by trying to find out about those problems, trying to establish how widespread concerns about suicide, eating disorders, drugs and sexual conduct are, then I think you're just burying your head in the sand. Just asking questions about these things does not encourage them; it finds out what's going on so that we can better plan our programs and better respond to the needs of young people.
[2:15]
B.C. CONSTITUTIONAL REFERENDUM
J. Weisgerber: My question is to the Premier. The Constitutional Amendment Approval Act specifies that the people of British Columbia will have a chance to vote through a made-in-B.C. referendum before any motion on constitutional reform is brought before this House. Can the Premier assure this House that a national referendum will not supplant the people's right to a referendum on proposed constitutional amendments as currently guaranteed under provincial law?
Hon. M. Harcourt: The answer is yes.
J. Weisgerber: What the Premier is saying then is that he will assure the voters that, contrary to the comments reportedly made yesterday by the Minister Responsible for Constitutional Affairs, the province will abide by the legislation that currently is the law of this province?
Hon. M. Harcourt: I have made that assurance: I made it earlier in the week when I was asked about it; I made it in this Legislature. Rather than give hearsay evidence about what may have been reported second-or thirdhand about the minister who is in charge of the constitutional negotiations taking place right now, I would defer to the minister to answer you directly.
The Speaker: I regret that the question, having been answered by the Premier, cannot now be referred. Is there a final supplemental from the leader of the third party?
J. Weisgerber: My final supplemental will simply give the leader -- the Minister Responsible for Constitutional Affairs, one of the other leaders -- an opportunity to in fact deny or agree with the Premier. Will he stand by his reported statements of yesterday, or does he agree with the Premier?
Hon. M. Sihota: First of all, let me thank the third party leader for recognizing that there's a lot of leadership in this caucus. We're proud of that. Secondly, let me remind him that he should not always rely on the Vancouver Sun as his source.
FAIR WAGE POLICY
G. Farrell-Collins: My question is to the Minister of Labour. Is this minister still of the position that his NDP government's so-called fair wage policy will not drive up the cost of public construction projects in this province, as he indicated on March 31?
Hon. M. Sihota: Yes.
G. Farrell-Collins: Wonderful answer.
Based on information that we have, which I would be glad to share with the minister and the press, the cost of building the Commonwealth pool will cost the taxpayers of British Columbia an additional $926,000 as a direct result of this government's wage-fixing. Can the minister honestly say that the taxpayers have received the best deal possible on this project?
Hon. M. Sihota: I can honestly say that the hon. member's information is wrong. I know he finds this hard to accept, but the fact of the matter is that the lowest bid -- which by the way was a unionized bid -- came in somewhere in the neighborhood of $17.9 million. The project was budgeted in the neighborhood of $18 to $20 million, and accordingly the bid came in approximately $1 million to $2 million under the budget. So we're pleased to advise this House that, in the first test of the fair wage policy, the bid actually came in under budget without additional cost to government.
G. Farrell-Collins: I suggest the labour minister have a reality check afterwards, and I'll be glad to give it to him.
Based on the construction cost of the Commonwealth pool being increased by 5.4 percent because of the fair wage policy, and based on a $2 billion budget for capital construction in this province, this fair wage policy is going to cost this province an additional $108
[ Page 789 ]
million this year alone. When will this government back down on its fair wage policy and devote that $108 million to health care and education where it belongs?
Hon. M. Sihota: I note that two weeks ago the same member was suggesting that the cost of the fair wage policy was going to be $300 million. Today he is suggesting that it is going to be $118 million. When he informs himself of the facts -- which I just outlined in the previous question -- I'm sure that two weeks from now he'll agree with us that it's not costing the taxpayers of British Columbia a penny.
HOSPITAL LABOUR DISPUTE
L. Reid: We have just heard about $108 million going to fair wages. My question is to the Minister of Health. British Columbians in urgent need of health care are left hanging. Why are we not paying...medical services for British Columbians? Will medical services be reinstated today?
Hon. E. Cull: The member knows that there is a 7.5 percent increase in this year's health budget. There has been no cut to health in this province.
L. Reid: Is this NDP government prepared to act decisively, to move to binding arbitration today and to ensure that all work interruptions cease immediately at British Columbia's hospitals?
The Speaker: To whom is the question directed? I recognize the Minister of Labour.
Hon. M. Sihota: The question deals with binding arbitration and a labour relations matter. I would be pleased to advise the House that this morning -- in a very serious situation in health care, and we recognize that concern on the part of the opposition -- I had the opportunity to talk to representatives from the union as well as representatives from the employer groups. Today at 2:30 I will be meeting with the commissioner of the IRC to assess the various options that will be available to government with respect to resolving this dispute.
L. Reid: To the Minister of Health. We have a government paying $108 million into fair wages. We have women crying in the public sector for pay equity -- which is a promise of this government, not a goal; let me reinforce that. When will this government commit to reinstating health care in this province? We want to see some action today.
Hon. E. Cull: Making up figures about the fair wage policy doesn't in any way negate our commitment to pay equity. This government is committed to equality for women, and our budget this year demonstrates that.
FAIR WAGE POLICY
L. Hanson: To the Minister of Labour. Yesterday the Minister of Transportation and Highways confirmed that the fixed wage policy didn't apply to road, bridge or tunnel construction. I then asked the Premier whether there had been an expansion of the policy. The Premier said not to his knowledge, if I could understand his words. Mr. Minister, the quotation request from B.C. Hydro in Revelstoke clearly designates it as tunnel and road construction. Has the policy been broadened, or has that policy just been applied to B.C. Hydro?
Hon. M. Sihota: The policy is being applied by B.C. Hydro.
L. Hanson: Can I get an answer from the minister as to who directed that the policy be applied? Was it at the direction of the new secretary of Crown corporations or the Minister of Labour?
Hon. M. Sihota: I can assure the member that to my knowledge I provided no direction on that issue to the Ministry of Labour. Secondly, I have not checked, but I would be surprised if it came through the secretariat.
FISH-PROCESSING
R. Chisholm: My question is to the Minister of Agriculture, Fisheries and Food. Does this minister accept the principle that once fish are landed in boats based in British Columbia, all processing should be done in this province?
Hon. B. Barlee: He must be prescient. We have been carrying that issue to the Minister of Fisheries, the Hon. John Crosbie. We negotiated with him about two weeks ago. We followed up with letters. We agree. We made a public announcement yesterday that all fish products should be processed in British Columbia.
R. Chisholm: Hon. Speaker, during the last parliament the NDP brought forth a private member's bill, Bill M206, which would guarantee British Columbian shoreworkers the same job protection as their American counterparts. Is this minister prepared to honour that commitment, or is he just going to stand by and blame Ottawa while hundreds of jobs and thousands of tonnes of fish head south to the U.S.?
Hon. B. Barlee: Hon. Speaker, as the member may or may not know, the Americans have carried this on under the Magnusson Act. We have a mirror act to the Magnusson Act. We are approaching the federal government on this now. This is a shared jurisdiction with the federal government, as you well know. Unfortunately, the federal government declined to include the fisheries products in the free trade agreement, and we are negotiating with them now. I think we will be successful.
Hon. R. Charbonneau tabled the annual report of the Ministry of Transportation and Highways for 1990-91 and a report on inland ferries by the government restructuring privatization group.
[ Page 790 ]
Hon. G. Clark: I call adjourned debate on second reading of Bill 3.
TAXPAYER PROTECTION REPEAL ACT
(continued)
G. Wilson: Hon. Speaker, in the few minutes I have left, having adjourned this debate earlier, let me reiterate that the members of the Liberal opposition in British Columbia would have had less concern with the repeal of this act if we had seen this government come forward with any provision to replace this act with some other measure that would provide taxpayer protection in the province. It was our sincere hope that in the measures brought forward in the last budget, there would have been a recognition that British Columbians were at their tax limit, and that we were simply not going to be able to continue to run deficit budgets with ever-increasing demand upon the people of British Columbia for ever-increasing amounts of revenue.
[2:30]
Recently the Premier of this province, when involved in discussions with members of business in Vancouver, suggested that British Columbians were in a competitive position with our trading partner south, and therefore the proposition being put forward by this government would make sure British Columbians could afford to continue to live and thrive in the province. The fact of the matter is that that is not so. The comparative advantage for those industries and businesses that find themselves locating south of the border is making it an ever more attractive and ever more development kind of a process for those people who are involved in our industries.
What we needed in this act was not so much the repeal of the Taxpayer Protection Act as a commitment to make sure that governments would honour their five-year plan to balance the budget. What we have really seen here is the abandonment of the proposition that this government is committed to balancing the budget and making sure they work within the level of expenditures that can be afforded by British Columbians.
We cannot support this act, because it takes away the very few measures the people of British Columbia have to prevent runaway spending by a government who seem far more concerned with advancing their agenda by the magic of accounting they have learned through the proposition of their so-called independent report. We have just witnessed this magic accounting today in question period, where we put out a budget that inflates the cost of a project, we bring in the project underneath the inflated budget figure, and tell the people of British Columbia that we have saved the money despite the fact that the cost of the project itself is going to be greater than what would have necessarily been paid had this government had an eye to a more frugal, responsible expenditure of taxpayers' money.
Similarly, we find in the budget that was tabled precisely the same kind of proposition: inflate the budget to a $2.6 billion deficit position; allow the people of British Columbia to believe the deficit was in such a situation that $1.8 billion -- a record deficit -- is something that could not have been avoided...and that this government did not at least, in part, have some responsibility for. That's why this Taxpayer Protection Act is an important act. That is why it is important that governments recognize that there has to be a proposition whereby governments are constrained from continually going forward and spending taxpayers' money, recognizing that they can simply be punitive to those people they purport to serve, and in so doing, create an ever-increasing financial burden on the people of British Columbia who are desperately trying to stay competitive with their trading partners to the south and who are desperately trying to maintain the integrity of their communities. Many communities now have rising unemployment and very bleak prospects as we start to see mill and plant closures throughout the province of British Columbia.
An Hon. Member: Just like the federal Liberals.
G. Wilson: It is important that in the Taxpayer Protection Act we recognize that there is a proposition to reform the institution of government, move forward and progress.
I hear the member opposite yell: "Just like the federal Liberals." What the member opposite doesn't recognize is that this made-in-B.C. party -- this party that looks after the interests of British Columbians -- is interested in reforming the institutions of government and looking after the taxpayers' dollar. That is why we introduced the innovative, more appropriate measure of going through the implementation of a ministry of the exchequer, something that the Minister of Finance attempted to ridicule without fully understanding and comprehending the proposition that was being put forward.
The Minister of Finance has asked for an explanation. I would be delighted to get together with the minister and to explain it in detail. Perhaps in next year's budget we will have the benefit of the wisdom from the Liberals on this side of the House, and the people of British Columbia might have some benefit from that knowledge. We're delighted to share our ideas. In fact, we are delighted even to donate our ideas to this bankrupt government, which is simply taking away the Taxpayer Protection Act, amending one of the very few items introduced in the last session that had merit.
In my final comment let me say this: all British Columbians recognize that there is a need to constrain and restrict expenditures in government. I believe that all British Columbians also recognize that they are not going to continue to be able to support big government that provides them service at only a moderate level. All British Columbians want to see some provision and some constraint that will prevent the government from simply going forward and running a deficit, committing itself to spend more and to tax at ever-increasing levels.
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We needed a Taxpayer Protection Act, and if it was to be repealed we needed something in its place that would give British Columbians some comfort, knowing that in fact there was a measure to constrain and to rein in government when government has a tendency to spend big to try and accomplish the goals that they may have, no matter how laudable those goals may be.
It strikes me that in redistributing the wealth of British Columbia into an investment in the people of British Columbia there also has to be a commitment to downsize to what we on this side of the House like to call "right-sized" government, making sure that government lives within the ability of the taxpayer to pay the bill on the final day when the analysis is finally made.
Let me say in closing that on this repeal of the Taxpayer Protection Act we find this government has removed the one obstacle it had to living up to yet one more election promise which it plans to break: the introduction of a balanced budget over the term of the government. It has finally stripped away the mask of sincerity and honesty so that all British Columbians now can see this government for what it really is.
It is a government that is precisely the same as that from 1972 to 1975, with the same agenda, albeit a slightly more sophisticated approach in delivering exactly the same kind of budgetary process through a so-called independent report which inflated the figures to $2.6 billion so that we could all feel as we did in comparison to when the federal government under Mulroney talked a 9 percent GST and brought us a 7 percent GST, thinking somehow that we would all feel ourselves grateful to the government that they were not punitive on the 9 percent.
We on this side of the House put forward positive alternatives. We put forward a positive measure which we believe should have been introduced. I understand, from the comments that were tossed at me today by the Minister of Finance, that he doesn't understand. We on this side of the House, and I believe all British Columbians, now recognize that the Minister of Finance doesn't understand the finances of the province. We are prepared to share an alternative to the Taxpayer Protection Act, but until such time as that alternative is put in place; until such time as there is a constraint -- a restriction -- to make it more difficult for government to deficit-finance at the expense of the taxpayer; until such time as there is some legislative provision for taxpayers to feel essentially that their government is indeed constrained by law from going and continually spending in deficit; until such time as there is a mechanism for the taxpayers to approve the government's propositions for deficit financing before they spend in deficit, I believe that the level of cynicism growing in our communities in our society will simply continue and expand.
We must vote against the repeal of the Taxpayer Protection Act, because this government has not provided even a symbol of hope that the people of British Columbia will be protected from ever-increasing taxation. As legislators we must send a signal to British Columbians, regardless of which side of the House we are on and regardless of which side of the House we believe is going to provide us with the best opportunity for that ability to communicate. We must send a signal today to the people of British Columbia that this government and this opposition are going to be committed to putting in place reforms for the institution of government which will prohibit governments from continually deficit-financing at the expense of the taxpayer; and that we wish to stop governments from constantly going to the taxpayer, believing there is a bottomless well from which they can continually take scarce resources, thereby crippling the economy and making living in our communities far more difficult.
It is a contradiction in the extreme that when the government was in opposition on this side of the House, they supported this bill and said it was a good idea. I don't wish to repeat all that I said prior to the adjournment of this debate, but in reviewing Hansard, I quoted the Minister of Finance, who when in opposition said over and over again that it was a good idea. He is now repealing it, because he does not wish to live by the rules that he would have had the government live by when he was in opposition; he wishes now to set his own agenda, his own set of rules, so that he can continue to deficit-finance and to tax British Columbians.
We in the Liberal opposition find that unacceptable. We believe that there has to be a legislated limit on the ability of the government to deficit-finance and to continually tax British Columbians without referring to them and without asking for their approval in a referendum.
B. Simpson: On January 29, 1991, the disgraced former Premier, Bill Vander Zalm, went on provincewide television at the taxpayer's expense and announced the Taxpayer Protection Act. This act was undoubtedly conceived in Fantasy Gardens, because it put forward a new utopia for the taxpayers of British Columbia. It talked about billions of dollars being put into the forest industry and into public works for hospitals and schools. Of course it talked about taxes being frozen for many years.
He also sanctimoniously stood up in this House and announced that his salary and his....
Interjection.
B. Simpson: Maybe he wasn't sanctimonious, but he certainly was pompous. He sanctimoniously and pompously stood up in this House and announced that his salary was going to be frozen, as well as his expenses and the expenses of his fellow MLAs -- very strange coming from a Premier who bought Fantasy Gardens for $1.7 million, had just sold that property for $17 million and was under investigation for breach of trust.
The problem with....
J. Weisgerber: On a point of order, there is quite clearly a range of debate in second reading, but this goes beyond that. Will the member please get back to debating the legislation?
[ Page 792 ]
Hon. G. Clark: Hon. Speaker, I think the interim leader of the third party is sensitive to any reference to his former leader, whom he supported diligently for five years. So it's not surprising, but it certainly wasn't a point of order.
The Speaker: The hon. member for Vancouver-Fraserview would be well reminded that debate in second reading is on the principle of the bill.
B. Simpson: When the former Premier got up and spoke on that, the problem was that there was no price tag, and there were no specifics when he appeared before the province. Interestingly enough, his Finance minister at that time, Mr. Couvelier, confided to friends and colleagues that if the Premier had to continue making these extravagant promises he might have to resign. Undoubtedly the former Finance minister, Mel Couvelier, was still smarting from the deal that the Premier had made with the doctors over the pension plan without consulting him. This was a desperate plan introduced by a desperate Premier who two months later would be resigning in disgrace.
The bill was introduced on March 19, 1991, by the new Finance minister, affectionately known in this House as the hon. member from Dogpatch, Elwood Veitch. Elwood Veitch, the first and only Finance minister in Canada who got his degree from the Columbia Pacific college correspondence school. When members of the press gallery went ahead and contacted the school authorities, educational authorities were informed that that school was under investigation, together with the Harley-Davidson school, which claimed special tax status because they claimed that driving a motorcycle was a spiritual experience. I'm sure my friend from Port Alberni would probably agree with that.
Elwood Veitch. The first thing that Elwood did when he introduced the Taxpayer Protection Act was to do away with the BS fund, and we all know about the BS fund. I want to remind you that the Certified General Accountants' president Al Kerfoot stated that the fund was mythical, smoke and mirrors. "The Finance Minister states that the deficit...is $395 million, but in reality it's $1.2 billion," he stated. The Society of Management Accountants also said the shortfall was $1.2 billion, the highest in B.C.'s history. Peat Marwick, which is recognized as Canada's largest public accounting firm, published an analysis in 1991 on this so-called balanced budget and commented: "This is not a fund at all" -- at least not a fund in the sense that there is money in an account identifiable....
[2:45]
Now let us look at the tax increases that were put on the average British Columbian before the Taxpayer Protection Act was introduced. Medical Services premiums increased in '88-89 with an additional cost to British Columbians of $200 million. The preceding four budgets had a total of 784 fee increases, 229 brand-new fee increases. Extended care fees for seniors up by 27 percent; marriage licences up by 150 percent; fuel tax from 20 percent to 22.5 percent, at a cost of $46 million a year; and of course there was the B.C. Hydro hidden tax. While British Columbians were being traumatized by all these taxes, the big corporations enjoyed tax breaks of $500 million a year.
What does the Taxpayer Protection Act do? It puts a freeze on corporation capital tax, fire services tax, horse-racing tax, hotel room tax, income tax, insurance premium tax, logging tax, property purchase tax and social services tax. What is not included? Motor fuel taxes, rural property taxes, school taxes, fees and licences, medicare premiums; and of course it did not encompass the Crown corporations nor any of those 784 fees introduced during the previous three years.
This was a desperate attempt by the former administration to restore the financial responsibility that had characterized the administration of the Bennetts and to enhance their electoral success. At the time of the introduction of the bill, the new Finance minister, the hon. member from Dogpatch -- Elwood -- said that this was probably the most important piece of legislation that any government would ever bring down. "For the first time in the history of this province, or...most provinces..., we are actually freezing tax rates by legislation. We're actually doing it."
Mr. Jansen, the soon-to-be new Finance minister, voted for it; Mr. Couvelier, who had just resigned as Finance minister, voted for it; and of course Elwood voted for it. The disgraced Premier Bill Vander Zalm voted for it, and of course his successor Rita Johnston voted for it.
Two months later, after the introduction of this act, the new budget was brought in. The new Finance minister, Mr. Jansen, brought in a budget with huge tax increases contrary to the Taxpayer Protection Act -- brought in legislation overriding the Taxpayer Protection Act. So what happened during the previous two months, and what about the so-called balanced budget plan set out in sections 9 and 10 of this act?
I quote Peat Marwick's report: "...did not discuss in any detail the measures required to achieve its objective, nor were realistic plans presented that could lead the province out of its deficit position."
Two months after the act was presented and passed, the Socreds did away with it. What did the new Finance minister say? The new Finance minister, Mr. Jansen, when he overrode the Taxpayer Protection Act, finally admitted that the province was in terrible financial shape. He said that he had no choice but to increase taxes or cut programming, and although the Taxpayer Protection Act froze tax rates, the Finance minister said that no longer was it possible in this time of need. The same government, two months after introducing the act, is now condemning their own piece of legislation.
In response to increases in corporate tax and temporary personal tax surcharge on those making more than $80,000 a year, how did the Social Credit minister respond? "They are balanced; they are fair. They place the increased costs of our society on those who can afford to pay." That's what your former Finance minister said.
The Finance minister knew the financial shape of this province two months before, when that act was introduced. He was, after all, the vice-chairman of the Treasury Board. The only conclusion that one can draw
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is that this was pushed though in anticipation of an election. But there was a little problem when they introduced that act on March 21, 1991. They did not anticipate that a week and a half later their leader, the former disgraced Premier of the province of British Columbia, would resign, throwing that political party and the government into turmoil. So much for their plans to go to the people on the Taxpayer Protection Act.
It was a cynical attempt to prop up the political fortunes of the disgraced former Premier and a political party which was destined to go into political oblivion. It was an ill-conceived and cynical bill that deserved to be repealed, as set out in the Peat Marwick report.
By the way, what did the disgraced former Premier say when the bill was overridden by the budget in May 1991? Your former leader said: "The Socred government is politically very dumb." That was your leader. "I think it's ridiculous that we argued" -- he goes on -- "and debated and spoke in favour in glowing terms and two months later we're ready to throw it out." That's your former leader saying that.
Hon. Speaker, let there be no doubt that this government is determined to balance the budget and to deal with the structural deficit. Unlike the Social Credit government, which did not have the details to do that, it's set out -- I say this to all British Columbians -- on page 70 of the budget of 1992. Let me just go through a few of these highlights. We will be:
"Avoiding large, open-ended program commitments.
"Setting out and enforcing budgetary targets more effectively.
"Strengthening the role of Treasury Board to ensure that financial and policy objectives are integrated into an overall operating framework.
"Reviewing, on an annual basis, the province's progress towards a balanced budget through 1996.
"Existing government programs will be evaluated on an ongoing basis, starting with the areas of greatest provincial expenditure. Programs that are not meeting their objectives or are not cost-effective will be overhauled and eliminated.
"All government collective bargaining and funding decisions will be based on public sector salary increases that are fair to public workers and are consistent with the overall goal of deficit reduction."
And the plan goes on, in the budget, for all British Columbians to see:
"...the government will continue to improve the productivity of the public service to help eliminate waste and ensure that services are delivered with maximum efficiency. Program-specific performance targets will be established to provide better measures by which productivity and program effectiveness can be evaluated.
"Revenue collection procedures will be strengthened to ensure that the government collects revenues owed."
I cite as an example those 10,000 student loans totalling $36 million, which the former administration made no attempt to collect. We are showing leadership in collecting those funds. The budget continues:
"Charges for goods and services that government provides will be reviewed to ensure they better reflect the cost of providing them.
"The provincial taxation system will be reviewed to ensure the fairness of any new measures required to reduce the deficit.
"New programs will be introduced only within the means of the government and the taxpayer.
"More emphasis will be placed on reallocating expenditures from lower-priority areas to fund new, higher-priority programs."
The conclusion is that the government of the New Democratic Party will have as its first priority the government's fiscal policy to eliminate the structural deficit. The deficit arose primarily for two reasons: first, because expenditure growth exceeded the ability of the province's revenue structure to finance it; secondly, because of the federal government's policy of cutbacks on transfer payments.
Hon. Speaker, I listened quite carefully to the Leader of the Opposition. I am sorry he's not in the house now to hear what I have to say. But I could not help but reflect upon what they claimed during the middle of the election that they wanted to do. They published a full page in the Independent Senior talking about a single tax. At that time, the Leader of the Opposition stated: "I believe the single tax system proposed by Dennis Mills would create a climate for healthy economic growth, reducing our debt and ensuring a secure future for our children."
Hon. Speaker, B.C. Finance ministry officials show that the Liberal promise of a three-year corporate tax holiday, which they also claimed, would cost the province $1.96 billion. The flat tax which they're purporting is the most reactionary tax that any government could propose. That 25 percent tax would devastate the poor. All economists more or less agree that a flat tax is just not acceptable to the poor in our society.
I speak in favour of the act. I urge all members of this House to vote in favour of repealing the Taxpayer Protection Act, which more aptly should have been called the Socred Protection Act.
D. Mitchell: I rise to speak in second reading debate of Bill 3, the Taxpayer Protection Repeal Act.
I'd like to thank the hon. member for Vancouver-Fraserview for his lively contribution to the debate on second reading of this bill. I would point out to all members of the House that the member who proceeded me, the member for Vancouver-Fraserview, like myself, was not a member of this House a year ago, when this act was passed by this House.
It's more than passing strange to look back at what happened when the previous government brought forward that bill, which became the Taxpayer Protection Act. It's interesting to take a look at that. Certainly the hon. member for Vancouver-Fraserview was not a member of this House at that time, nor was I. But many members of this assembly were members of this Legislature at the time that this bill was brought forward and passed.
Hon. Speaker, it's fascinating to take a look at the record. If members are at all interested, I would refer them to the Journals of this House for March 21, 1991.
[ Page 794 ]
Take a look at the record of those members who voted on the bill, because the bill did come up for a vote in this assembly. It's fascinating to note that members of the government -- who were members of this House only a year ago when this bill came forward -- supported the bill. They voted unanimously in favour of a bill that they are now proposing to repeal.
I must ask all members of this House: why would members of the government who only a year ago, when they sat on this side of the chamber, supported a bill -- and they did support it...? Every single member who is now a member of this government and who was here only a year ago supported the bill. Why would that be?
I think there are only two possible answers to that question. It's important for us to consider those two possibilities and ask which is correct. Either the members of this government -- and that includes the Minister of Finance, the Minister of Forests, the Minister of Social Services.... All of the ministers in this government who were members previously in this House supported this bill. They did so because they believed that the bill was right. Somehow, in the intervening year, they've changed their minds. In one year they've had an amazing conversion and decided that they were wrong when they supported that. That's one possibility.
[3:00]
The other possibility is that they supported the bill -- to a person -- but they didn't mean it. They didn't really support the bill, but they voted in favour of it. Why would they have voted in favour of a bill that they didn't support, if that's what has happened here. Could it be that they were not being honest? I don't know. But that's one conclusion one could draw.
If, in fact, they did support the bill a year ago, we must ask: what has changed in only a year? Is what has changed that they've gone from being in opposition to government, their perspective has changed and they're adopting a stance which is similar to that of the previous government? Is that what has changed? We've got to take a look at this and at what the bill -- the act -- does. If we take a look at the act, which was accepted unanimously by this House only a year ago, we can look at the question of what this government really wants. Do you know what they want? They want to have it both ways.
When they were in opposition they supported this measure, this initiative. They supported it because the bill sought to place some restrictions on government. The Taxpayer Protection Act, in its way -- which was not perfect -- sought to put some controls on government, so that governments would not run deficits and get out of control, so that there would be some accountability and so that budgets would be balanced over a budgetary cycle of five years. That is what the bill tried to do. When these members of government were in opposition, they supported that.
Now that they are in government, they no longer want that control. They do not want the Legislative Assembly of British Columbia to have that kind of control. They do not want the taxpayers of British Columbia to have that kind of guarantee of responsible government. Why would that be -- that they have gone through this amazing change? It is more than passing strange. If the Taxpayer Protection Act is to be repealed, as this government wants us to repeal it -- and they are asking us to repeal it with this bill -- what is it going to be replaced with? We've got to ask that question, because if we take away this guarantee, this protection for the taxpayers of British Columbia, what is it being replaced with?
If we take a look at the budget that this government brought in, just previous to introducing this bill in the House, does that budget offer any guarantee to the taxpayers of British Columbia that this government will be fiscally responsible, that the balanced budget that we all have heard so much about will occur -- especially over a five-year budgetary cycle? No, hon. Speaker. There is no plan or vision in the budget. There is no commitment in the budget to balance the budget, even over a five-year budgetary cycle -- which, by the way, the party opposite promised during the election campaign. Now there is no mention of it whatsoever in their budget. I say that that is hypocrisy.
Simply by crossing the floor of this chamber from the opposition side to the government side, they have forgotten what they stood for. They have forgotten the stand they took in this House only a year ago, and now they are asking all of the members of this House, and all parties in this House, to approve this bill -- which is taking away that guarantee from the taxpayers. We can't do that unless we have some guarantee that there is some check and balance, a guarantee or some kind of plan. The Minister of Finance's budget, which was presented here in the House, doesn't present that kind of plan to the taxpayers of British Columbia. It's just not there. They really want it both ways.
What they really want to is to have complete and utter, heavy-handed, big-government-style control over the taxpayers, without any checks, balances, plan, vision of hope or optimism for the taxpayers of British Columbia, who want to know that the government is committed to fiscal responsibility. We don't have that. Instead we have a bill that is asking us to repeal the only protection that taxpayers of this province have. It's the only one we have.
We can talk about and question the previous government. The member for Vancouver-Fraserview, who preceded me, talked about that in his lively comments, but he didn't talk about the guarantee that the taxpayers want. We can talk about the past, and that is all interesting and useful for historical debate, but I ask you: what about the present, and what about the future? British Columbians are concerned about now -- 1992.
If we take away this protection, what is it going to be replaced with? What guarantee do we have? We really have got to ask that question, and there hasn't been any answer. For that reason, I think we have to think seriously about whether or not any member can support this bill that has been brought before the House.
I mentioned that there is no plan to replace it. There is no commitment to balancing this budget from this government. They haven't got a positive message to send British Columbians. The message that they are sending is that the NDP government does not care
[ Page 795 ]
about fiscal responsibility. They are doing nothing to assure British Columbians that taxes won't increase and increase. We've seen the steady rise of taxation. We've seen that over the course of time. The budget that has been presented simply indicates that the deficit is going to increase, that taxpayers are going to be asked to come up with more and more money -- individual taxpayers, businesses and small businesses. British Columbia enterprises are going to be asked to come up with more money. The only protection they have is being taken away.
This government has talked a lot about fairness. They talked about that when they introduced the bill in the House. Fairness is in the eye of the beholder. Now that they serve as government and hold the authority to amend this act in order to make it fair for British Columbians -- because if in fact this act was not fair, it could have been amended to make it more fair -- what have they done? They're throwing the baby out with the bathwater. That's what they're doing, and they're not replacing this measure in any way. The budget does not contain any remedy for taxpayers who are concerned about the increasing burden of taxation; it's just not there.
I encourage members opposite to rise in second reading debate on this bill to tell us, before we take a vote on this, where the protection is. I encourage members to stand in this debate and speak to that.
British Columbia needs a plan. This budget fails -- the first budget of the NDP government that was brought before this assembly -- and now this act which repeals the Taxpayer Protection Act is going to cause further concerns about that.
It's interesting to think about the process that has led to this, because the repeal of this act throws the NDP's marketing catchphrase, "balanced budgeting and balanced leadership," out the window. The Peat Marwick report, upon which the budget is based -- the Peat Marwick budget -- recommends that this act should be expanded to encompass the consolidated revenue fund and government organization and enterprises. The Peat Marwick report actually recommended that, and this is one of those interesting areas where the government has not adopted one of the recommendations of the Peat Marwick report. There aren't too many, but they've ignored that recommendation. The government loves the Peat Marwick report, but they've ignored this suggestion of this so-called independent financial review.
There are many things that are bad about Bill 3. It doesn't make the government bound to be fiscally responsible. During economic recessions, it argues, governments should be able to tax, tax and tax and spend, tax, borrow and spend again. That doesn't ensure that the debt and the deficit of this province will not increase incessantly on and on and on into the future -- an increasing burden for the taxpayers of British Columbia.
This bill does not assure taxpayers that there will be no new taxes. It doesn't give any indication of whether or not new taxes are going to be implemented. It suggests that new taxes can be expected. In fact, British Columbians should just sit back and wait, because there are going to be more new taxes on an ongoing basis. That's what this bill really says: there's no protection for taxpayers. Basically, it gives the NDP government carte blanche to tax us more at times when we can't afford any new taxes.
What is the government really saying with this bill? What is it saying to the people of British Columbia who need protection, and who are already suffering under a burden of taxation? What it's saying to them is: the taxpayers -- let them eat cake.
There is no protection, no concern and no awareness that British Columbians are suffering under a burden of taxation that cannot be increased forever and ever into the future. Why repeal this act without replacing it, at least, with a measure that will give some guarantee to the taxpayers? That's the question we must ask, and unless it's answered in this debate, I would urge all members of this assembly to vote against this bill.
J. Weisgerber: Hon. Speaker, I'd like to start out by congratulating the new member for Vancouver-Fraserview on his gee-I'd-sure-like-to-be-in-cabinet speech. I see that after he gave it, he moved over and tried out a couple of the chairs over there. Apparently none of them fit, because he's now hightailing it back to his own seat. But I suppose when you sit as far back in the corner as that member does, a bit of desperation starts to rise to the surface, and you try as best you can to get some comfort, some recognition within the cabinet.
I am genuinely disappointed with the government's decision to repeal the Taxpayer Protection Act, for the reason that's been mentioned by members on both sides of the House: only a year ago this bill received unanimous support on division; members stood up and voted in support of this legislation. A year later the government sees the need to repeal it.
Most difficult and most disturbing is the fact that the government doesn't even want, or isn't even satisfied a year later, to bring in legislation which would repeal the act. They want to bring a retroactive repeal in. They couldn't wait to offend the legislation. They offended it before they had an opportunity to repeal it. That's unfortunate, because it suggests -- as we've seen in so many cases -- that this government doesn't care about the legislation that's been passed. It simply ignores it. It ignored the Compensation Fairness Act. It ignored the Taxpayer Protection Act. It will, I would predict, ignore the Referendum Act. I think that will happen in the next few days, as we watch the Premier and the Minister Responsible for Constitutional Affairs give different signals. This government clearly doesn't care about legislation that's on the books. It believes that it received a mandate from British Columbians, and that nothing else has any significance -- 40 years or 100 years of legislation is a matter not to concern the government with. You simply ignore the law and pass retroactive legislation. That's bad. That's wrong. That is something that the government should be ashamed of.
Furthermore, when we look at the legislation, let's consider what members on both sides of the House unanimously supported one year ago. They supported a piece of legislation that promised British Columbians
[ Page 796 ]
a balanced budget over the five-year cycle. It also promised no new taxes.
Those were promises that were important to British Columbians. They were promises so important that the NDP election campaign team took them as their central theme. They took the legislation that they supported in this House, wrapped an election campaign around it, promised no new taxes, promised to balance the budget, and then came into this House in the first session and tabled Bill 3 -- you can't get much closer to the top of the list than Bill 3 -- to repeal the legislation.
The member for Vancouver-Fraserview talks about being cynical. If ever there was a cynical manoeuvre, this is it -- this government, this party that took the Taxpayer Protection Act, turned it into their election campaign theme and then repealed the act with Bill 3 in their first session. You can't image a more cynical act than the act that Bill 3 represents. It's a totally cynical act and a totally cynical action.
Why would the government, having won an election on the basis of the Taxpayer Protection Act, decide to repeal it as soon as it got into power. I think, quite honestly, it's because of the "no new taxes" part of the bill. When you look at this recently tabled budget, a budget that has a 1 percent increase in personal income taxes; a 20 percent increase in income surtaxes; a phase-out of the renter tax reduction; a corporate tax increase; a corporation capital tax, a tax that will take $225 million out of the business community and out of the investment potential of our business sector; a social services tax on legal services and faxes; a motor fuel act that sees a $16 million increase; a 40 percent increase in the tax on jet fuel, which ultimately will result in higher airfares for British Columbians -- everyone who gets onto an airplane today will pay more, and we will pay more in perpetuity because of this increase in jet fuel taxes.... The supplemental homeowner grant has been removed -- 435,000 homeowners are taxed an additional $90 million in this budget. There's a 6 percent school tax increase on non-residential properties; a rural tax increase of 5 percent, including farms; $50 million more in taxes through the liquor distribution branch; and another $50 million in various fees, licences, fines, etc.
[3:15]
Can you imagine the difficulty the government would have had if they had left the Taxpayer Protection Act in place? It was obvious they had to repeal the act in order to present their budget. There are more tax increases in this budget than we saw in the previous five years. The government makes a big point that the previous government brought in one amendment in the last budget -- one single tax increase. This government, with this litany of increases.... These don't even mention the 19 percent ICBC rate increases, the ferry rate increases, the unfreezing of the water taxes that results in higher hydro bills. All of those taxes don't even appear in this budget.
This government, with the biggest tax grab in history probably, and the largest deficit ever tabled in the history of British Columbia, was faced with this one little Taxpayer Protection Act that was going to be and will continue to be an embarrassment to this government. They had to get rid of it, not only when they got into office and into the Legislature -- which is the proper place to repeal legislation, if you must do it -- but they had to do it retroactively. Retroactive legislation is bad legislation. Anytime a government imposes legislation on people retroactively, you know the government has broken the law. There is only one reason to make legislative changes retroactively: it's when you've already done something that offends the act and the law, and therefore breaks the law. This government, with its election centred on the Taxpayer Protection Act, comes back to this House, repeals the very document on which it was elected, increases taxes at a rate and in a number that are unprecedented, and makes absolutely no commitment to balancing the budget.
The Minister of Finance -- every candidate -- promised or at least signed on to the promise by the Premier that the government would balance the budget over the five-year cycle. There would be no new taxes. The general interpretation of no new taxes is: "We won't invent a new tax. We will simply get rid of tax breaks that exist and increase tax rates, and that satisfies the intent of no new taxes." That's nonsense. "No new taxes" meant no tax increases, no elimination of existing tax breaks. That's what the Taxpayer Protection Act envisioned: no tax increases, no new taxes. Or as one U.S. President said: "Read my lips." Indeed, it is a misfortune that the people of British Columbia didn't read the lips of the now Premier of this province, because clearly he was saying one thing and meaning something entirely different. No one can convince me that the now Premier of British Columbia, the then Leader of the Opposition, didn't know full well while he was making those promises and while he was preparing the election campaign strategy that he would repeal this at the first chance he got.
I'm surprised, quite honestly. I must look more closely at Bill 2, because I know they couldn't make it Bill 1. That's the one that gives the funds necessary for this House to run. So the best one they could get would be Bill 2. I've got to look more closely to see what was more pressing in the government's agenda than getting rid of the Taxpayer Protection Act. But I will assure you, hon. members and you, hon. Speaker, that this was a very high priority for this government. "Get rid of this act, break our promises -- allow us to break our promises." This government was elected on the Taxpayer Protection Act. Central to its theme was: "Balance the budget. No new taxes."
It's absolutely incredible that we're here debating Bill 3, the Taxpayer Protection Repeal Act. What a cynical, cynical action by a cynical government that was elected on a promise that it had absolutely no intention of keeping! If the government had, as it tabled its budget, tabled a replacement for this act; had it said, "We've given up our promise of no new taxes; we're going to tax and tax and tax and you folks might as well get used to it" and, "We're not going to have a charade of legislation; we're going to get rid of the Taxpayer Protection Act, but we do at least hold on to the belief that we will someday balance the budget in this province, and we're going to at least introduce a balanced budget act or some act that would at least hold
[ Page 797 ]
out some promise of a balanced budget," perhaps we could look at this a little bit more positively.
But the government has not only abandoned its tax promises, it has abandoned any hope of ever balancing the budget. It has simply thrown up its hands and said: "We never dreamt it would be as difficult as it is, and we're throwing in the towel. We've been here two or three months and already we understand we're way over our heads in this thing. We can't possibly balance the budget this year. As a matter of fact, we're going to table the biggest deficit in the province's history, and we're not even going to try and balance the budget." That's what's disturbing: the government lacks even the commitment to try. If there should be anything that worries British Columbia it should be not the tax increase -- and they're terrible....
I'll tell you, hon. Speaker, as tax notices go out around this province and people around British Columbia start to understand the effect of these budget measures, they will become incensed. The Minister of Finance says that the loss of supplemental homeowner grants only applies to fat cats in Vancouver. I want to tell him about one fat cat....
Hon. G. Clark: On a point of order -- I'd be delighted to debate this subject, and I know the House would too -- this is the subject of another bill before the House, which I look forward to debating, but it has nothing to do with this particular bill.
C. Serwa: On the point of order, a few days ago the Minister of Finance was certainly very sympathetic to wide-ranging debate in the House from the member for Bulkley Valley-Stikine. I think that the same latitude has to exist in the House when we debate the philosophy and principles of this particular bill.
The Speaker: Thank you, hon. members. Traditionally we do allow some latitude, but I'm sure the hon. member who has the floor will try to keep his comments to second reading debate.
J. Weisgerber: Thank you, hon. Speaker. Certainly it's always encouraging to know when you get close to the nerve, because somebody invariably bolts to their feet on a point of order and that, as I'm sure the Minister of Finance knows, always gives a bit of comfort to the opposition.
I think that the taxpayer whose tax notice I hold in front of me would take more comfort in an act that protected against more taxes or new taxes. This particular homeowner lives in Clearwater, British Columbia, in a home that, along with the land, is appraised at $87,400. Last year this individual received a supplemental homeowner grant of $500.72. I think we all understand that a home appraised at $87,400 is not the kind of home a fat cat lives in; it's an average workingman's home. This year that person will send a cheque for at least $500 more in payment of his property taxes than he did last year. And that's the kind of taxes that the Taxpayer Protection Act was designed to protect average taxpaying British Columbians against. That's why the repeal of this act is such a serious matter and one that will, if it hasn't already, outrage British Columbians from one end of this province to the other.
I suspect that the government believes that the tax increases it has brought in have been largely accepted by British Columbians. In fact, the Minister of Finance, having visited the chamber of commerce here in Victoria earlier this week, knows a bit better about how some taxpayers in the province have received his tax notice. As property tax notices go out around this province, as British Columbians start to understand the effect of the property purchase tax and the effect of the supplemental homeowner grant on their personal taxes, the 435,000 British Columbians who will lose the benefit of the supplemental homeowner grant will understand how the opposition in this House are so opposed to the repeal of the Taxpayer Protection Act.
Hon. Speaker, I want to assure you that when we get to the vote, this caucus and the opposition will be voting no to the repeal of the Taxpayer Protection Act.
Hon. A. Petter: As someone who has had to deal with first-year law students when they get their exams back, I am familiar with manifestations of mock outrage. But I must say I've never seen such mock outrage in my life as has been displayed by the leader of the third party and the House Leader for the official opposition.
The reason why the government is repealing the Taxpayer Protection Act is quite simple: it didn't protect taxpayers. That's the reason. The leader of the third party suggests this is a cynical move, and I want to suggest to him the cynical move was on the part of the government that introduced this phony piece of legislation in the first place. That was a cynical move.
I normally defer, hon. Speaker, on matters of history and even on matters of parliamentary procedure to my friend, the House Leader for the official opposition. But I must say, he showed in his remarks a remarkable disregard for the history of this particular piece of legislation. If he goes through that history, he will find that within a few months of having introduced the Taxpayer Protection Act, the government of the day turned around and passed another piece of legislation that overrode the Taxpayer Protection Act and said that legislation would operate notwithstanding the Taxpayer Protection Act. How's that for a cynical move? The reason I refer to parliamentary procedure is that I think it's a commonly known principle of parliamentary sovereignty, which the leader of the third party is well aware of, that a parliament cannot bind its successors. It was for that reason that his government, within a few months of having passed the Taxpayer Protection Act, turned around and dumped the Taxpayer Protection Act. His own government knew it was a sham piece of legislation that did nothing to protect taxpayers. It was simply there to cover up for the dismal fiscal record of that government and to pretend that something was being done, when nothing was being done.
[3:30]
Interjections.
[ Page 798 ]
Hon. A. Petter: Now the House Leader for the official opposition asks: what guarantee do we have? Well, let me tell you, hon. Speaker, that the guarantee we have in this House is one of political will. The previous government had no political will, so instead they passed a phony piece of legislation that they knew they had no intention of sticking to....
Interjections.
The Speaker: Order, please, hon. members.
Hon. A. Petter: Hon. Speaker, they do protest when the truth comes through.
C. Serwa: Point of order. Perhaps, hon. Speaker, if you could encourage the Minister of Aboriginal Affairs to direct his comments to the Speaker's chair, I'm sure he wouldn't incite that type of response from this side of the House.
The Speaker: That is a timely reminder, hon. member.
Hon. A. Petter: I very much appreciate the member's advice -- through you, hon. Speaker. I'm sorry if this is inciting, but the truth often is inciting. I guess I should just take what the leader of the third party said earlier: when you get a reaction, it's a sign that maybe you're hitting a raw nerve. I think perhaps I've hit it.
As I was saying, hon. Speaker, you can pass any piece of legislation you want, but we all know that by virtue of the doctrine of parliamentary sovereignty, a subsequent legislature can simply override that piece of legislation. No one knows that better than the previous government, because that's exactly what they did within months of passing the Taxpayer Protection Act. They overrode it, because they knew it provided no guarantee at all. It was a sham. It was there to try to pretend to the public that there was protection for taxpayers when there was none. You don't have the political will, so you pass a piece of legislation.
Now the other cynical thing that occurred under the previous administration was their depiction of the state of finances. During the election we were told that a $300-some-odd million deficit went up to a $1.2 billion deficit. Now we find out that it was a deficit of about $2.3 billion, which is the highest deficit in the history of the province of British Columbia.
What this government has said is that -- I say this in response to the comments made by the opposition House Leader -- we do have the political will; we don't have to hide behind a piece of legislation like this.
Where's the evidence of that political will? It's in our budget. We have reduced the annual deficit. We have reduced it from a projected deficit....
Interjection.
Hon. A. Petter: Well, you don't want to hear the truth. We have cut the projected deficit by a billion dollars; we've reduced the deficit from last year. Here's the real indication: we've cut the rate of growth in government spending in half, to the lowest rate of growth in five years. That's the assurance the taxpayers of British Columbia have from this government -- not a phony piece of legislation, not a lot of mock hysteria, but concrete commitments and action in the budget to cut the deficit, to reduce the rate of growth....
Interjections.
Hon. A. Petter: It takes some courage, and I have some admiration for the Minister of Finance to stand up....
Interjections.
The Speaker: Order, order! I would ask the hon. member for Saanich North and the Islands to come to order. In order to have a constructive debate in this House, we must have respect for any hon. member that has the floor. Please proceed, hon. member.
Hon. A. Petter: I'm always astounded at the urgency with which the official opposition feels compelled to defend the record of the previous government, but apparently that's where their mind-set is.
I was just going to say by way of closing that it is a courageous act to come in and repeal the Taxpayer Protection Act. It's very easy for the members opposite to pretend that this is some kind of retrenchment -- due to the symbolism they say is attached to that act. But we chose not to be cynical. We chose to be honest -- honest government -- and say to the people of British Columbia: "This kind of phony legislation will not protect you. We will stand by our record. We will not hide behind a phony Taxpayer Protection Act." That's the message we bring, a message of honesty and fiscal responsibility. I'm very, very happy to support the repeal of this particular piece of odious legislation.
R. Chisholm: Isn't it interesting that the only NDP members who are speaking to this bill weren't here at the time? Another little point I want to get straight right off the bat is that every member in the Legislature at that time voted for this bill; not one abstained.
How can this government, with good conscience, support this bill? How can the government caucus go back to their ridings and say: "You know that act that was in place to protect taxpayers, that we voted for last year? We axed it. We have not replaced it with anything. We just did not want to be restricted with the concept of a balanced budget over our shoulder. Restraint is good, but it does not apply to us." Keep spending at the rate of growth of the economy? "Great idea," says the Minister of Finance, "but it's not meant for us to follow."
I'll quote from the original bill where it states that he would be restricted to a five-year balanced budget, and during that five years he would have to have "the total amount of the revenues for each of the fiscal years covered by the plan, the total amount of the expenditures for each of the fiscal years covered by the plan, and the difference between...." He would be very, very restricted in what he could do.
[ Page 799 ]
At a time when taxpayers demand leadership and fiscal responsibility from their elected officials, the NDP government shows none. I quote from the Premier when he said: "It is time we had a government as honest and hard-working as the people who pay for it." That comes out of their election platform. Why doesn't the Premier be honest with the people of British Columbia and speak the truth? He never really intended to balance the budget. It was a line to woo voters. If he intended to balance the budget, he would have strengthened the Taxpayer Protection Act or at least amended it, not scrapped it.
There will now be no assurance that the budget will be balanced over the five-year business cycle. This is contrary to the NDP promises. That was promise No. 4, by the way, of your 48 promises. The flip side to this, hon. Speaker, is that there exists no guarantee that taxes will not increase. If you hold this bill up to a mirror backwards, it reads, "the NDP Blank Cheque Act," not the Taxpayer Protection Act.
This bill, when passed, will give the NDP government a blank cheque on the purse-strings to the people. Last year, the NDP, when in opposition -- yes, you were in opposition at one time -- criticized the continual raising of taxes, licences and fees. The new government has not stopped raising fees or licences since they took office. Perhaps the NDP should go back and read Hansard to see what they once said. How can the NDP in all those years in opposition criticize the increase of taxes, licences and fees, and then, once in government, raise taxes, raise licences and raise fees?
The NDP backbenchers ran in the last election because they felt the NDP would honour their word, that they would not raise taxes. How disappointing it must be for those backbenchers who feel pressured into voting for a bill that will allow the government to raise taxes in order to cover the debt it owes to their friends and insiders.
The Taxpayer Protection Act was so named because it protected -- I say again, protected -- taxpayers from the burden of paying for the agenda of political parties who were elected. The people of British Columbia are not overly demanding. They have simple requests. They want honesty in their politicians and fairness in their tax system. Fairness does not just mean taxes fairly distributed. It also means a fairer tax burden.
How do you spell tax fairness? It is certainly not spelled NDP. The Taxpayer Protection Act was intended to protect the taxpayer, and if there was ever a time taxpayers needed protection and fairness, it is now, and it is from this government.
J. Tyabji: I'll try to keep my comments relatively brief because I think we've covered almost all the reasons why we cannot support this bill. What I'd like to add, hon. Speaker, is that I cannot support this bill because it only goes halfway. I think the argument can be made that the Taxpayer Protection Act wasn't an ideal act for protecting the taxpayers. However, as soon as it is repealed, another one must be put in its place, because obviously the taxpayers should be protected from the kinds of deficits that we're seeing now, not just provincially but federally. People have been crying out for protection. They don't want higher deficits. They don't want increased taxes. They want to see a balanced budget. During the election campaign we certainly heard a lot about balanced budgets and budget cycles. We heard about these five-year cycles, and the people of B.C. assumed that because the bill passed unanimously in the House, at least the principle of the bill was supported by the party which is now in government.
Hon. Speaker, I find the series of actions that we have to look at here really disturbing. The first is the unanimous passing of a Taxpayer Protection Act which sees a balanced budget in a five-year cycle. This is then brought into an election campaign where we are talking about balanced budgets in five-year cycles. We then have the highest deficit in the history of B.C. brought in, and shortly after that, the repealing of the bill that was unanimously supported and the one that provides for the balanced budget in the five-year cycle.
It seems to me that if you were repealing that bill but intended to hold to the principle of the bill, you would be bringing in another bill immediately that would have the same principle. That was certainly something that we heard bandied about during the election campaign -- certainly something that the government is, I would assume, committed to. I would hope that we are only waiting for the bill to come in that will show us a balanced budget in five years.
I find it disturbing, hon. Speaker, that we have the repealing of this bill and we don't have a five-year plan from the government. Although we heard during the election campaign that there would be a balanced budget in five years, and shortly after that we were presented with a budget with an enormous deficit, if there's to be any credibility at all in terms of the long-term plan, there should be a bill at least in the process of being drafted that has the same principle as the one that is currently being repealed. I would urge the Minister of Finance to have that bill on the table as soon as possible, because we're waiting for it.
I would assume that since the government, when they were in opposition, unanimously passed this bill.... Let's say for the sake of argument that the only reason they did it was because it was the best bill before them, and they have a better bill with the same principle -- and that is a balanced budget in five years -- currently being drafted. If that bill is being drafted, we want to see it immediately. We are quite concerned that this bill is being repealed without seeing the other bill. Surely a government that was elected with the promise to have a balanced budget in five years must be working on getting that bill before us, because they're repealing this one right away.
Although I will not hold my breath, as one of the hon. members has suggested, I am certainly waiting and anticipating this bill. I would assume that the Minister of Finance -- because he is so concerned about having credibility and about being respected by the business community -- is losing sleep drafting the bill right now and that he is spending a lot of time trying to figure out the five-year fiscal framework for the province. And, although he recognizes that this deficit he's brought in was something that we will give him credit.... Perhaps he has done it reluctantly -- he is
[ Page 800 ]
eagerly drafting all the legislation necessary to make sure that it doesn't happen again. At the end of the five years -- they may not be the government at the end of that five years, however -- whoever is the government will be held to the fact that this must be a balanced budget in five years.
[3:45]
The concern I have is that if we repeal this bill without something currently being drafted, and without us holding the government to their promise of a balanced budget in five years, we will continue to have deficits and the people of B.C. will be saddled with a situation they cannot possibly deal with. As a taxpayer, I'm frustrated and concerned when I see that each year I'm paying more taxes to each level of government and the deficits keep getting bigger. Although we have to recognize that this is the first year this government is in, and perhaps they feel this was the best way they could juggle in order to present us with this deficit, we must ask that they immediately take action to make sure that it doesn't happen again and that we are in fact working toward the balanced budget cycle that we were promised; that when we repeal this bill there is another one on the books; that we will not be facing increasing deficits; and that we will not be facing increasing taxes.
The people of B.C. don't have any money left. There's no more tax money left. We cannot tax them any further. Businesses alone are going to be suffering quite a bit from the kinds of tax increases we are facing right now. I would bet that there are a lot of people out there who are concerned that taxpayer protection is being repealed -- taxpayer protection that was unanimously supported when it was brought forward -- without a substitution coming in, in light of the fact that we have an enormous deficit in front of us and an increase in taxes.
So it's a series of events that has not been conclusive, in that there's one ingredient missing: the substitute bill, the better bill. Give us your better version. Give it to us immediately; we're waiting for it. Lose as much sleep as you have to, hon. minister, to get that bill before us as soon as possible.
I'm willing to be relatively generous in my criticism of the government...
An Hon. Member: I'm not.
J. Tyabji: ...unlike some of the other members. However, it is only temporary generosity, in that I'm still waiting for the replacement bill, as are the taxpayers of B.C. Where is the bill? We would like to see it. And because it is not here, because we have that missing ingredient, we cannot support the repealing of the Taxpayer Protection Act, and we cannot support the bill in front of us.
D. Symons: I must rise in my place to speak against the repeal of this bill. The taxpayers of British Columbia feel -- and this is what I've been getting back in a mailer I've just done -- that the taxes are too much. These views on taxes were unsolicited. I was asking things about transportation, and what I got was: "Get the government off my back. Stop the tax-raising." At least this bill that was there and is about to be repealed gave some assurance that this might take place.
The government talks a great deal about how they've cut the rate of growth of the deficit. The public out there might be a little misled by this, because if you were doubling the deficit each year and you cut it down and it was only going up 50 percent more, you've cut the rate of growth. But you certainly haven't cut the growth of the deficit. That is still going on. At least this bill here, if it were left intact, would have the option of constraining the government's spending, so that at some time or other we would indeed reduce the growth of government spending and balance the budget over a five-year cycle.
It is important, then, that this bill stay in place and not be repealed or, as other hon. members have suggested, that there be some bill that replaces it and shows the taxpayers of this province that this government is indeed looking after their interests and going to protect them against the growth of government year after year. Enough is enough, and we've had enough.
C. Serwa: It's a pleasure to rise in the House and again speak in opposition to Bill 3. It was really interesting to listen to the member for Saanich South, the Minister of Aboriginal Affairs. It doesn't really take a rocket scientist to see the spontaneous combustion -- almost to the ignition and lift-off stage -- that this member is at. His enthusiasm got the better of him. Nevertheless, other than his making a charade and a mockery of his colleagues when they were in the opposition last year and all stood up and supported the philosophy and principles of the Taxpayer Protection Act, it was exciting to watch that hon. member in action. But the productivity was virtually zilch in his statement.
Madam Speaker, I'd like to quote from a column that Douglas Broome, a local columnist for the Daily Courier in Kelowna, wrote:
"However, in the spring of 1991 the NDP caucus voted unanimously for this same taxpayer protection act. The Taxpayer Protection Act..."
Interjection.
C. Serwa: This is good stuff.
...is a law freezing taxes for three years, and mandating a balanced budget over a five-year" -- business -- "cycle. It also freezes various tax formulas so they couldn't be increased through the back door."
Talk about the lack of political will and the open back door -- you folks have really got that.
"And it ruled that government expenditures could not grow faster than the economy. All of it was in line with the balanced budget message the Premier had been delivering to the B.C. business community for two years. And so when taxpayer protection was put to the vote, the New Democratic Party MLAs all supported it."
Hon. Speaker, why would they have supported that? I think it is only right.
The Deputy Speaker from Vancouver-Burrard spoke of his aspirations for an enhanced ability of this Legislature to shoulder the responsibility that the
[ Page 801 ]
electors of the province have placed on the members of this House. How best can that be done? Perhaps by striving to recognize that there is an inordinate amount of pressure placed on governments to be and do all things to all people. It must be realized that there has to be a responsibility on the part of the government not only for the short term but also for the very long term. Acts such as the Taxpayer Protection Act would impose that sense of responsibility on government and on private members on the government's side; in that, it is an admirable and a desirable mechanism.
First of all, it gives them the additional strength to recognize that expenditures have to be balanced with revenue growth in the province. They are forced to be responsible. There is this responsibility, which is superior to any partisan political initiatives. The member for Vancouver-Burrard was absolutely correct when he said that the House could respond and could be responsible. I see the taxpayer protection plan as being responsible to the taxpayers of British Columbia. The repeal of that bill has absolutely nothing to do with protecting the taxpayers; it has more to do with the fox looking after the chickens, and I don't think that the chickens or the taxpayers are altogether too enamoured of that.
Madam Speaker, the interesting thing was that throughout the election campaign.... It really is a campaign of pledges and promises of those who seek election in a responsible way from the people of British Columbia. The New Democrats went on record again and again. All of their campaign literature alludes to that sense of responsibility. Were they being open? Were they being honest? Were they being truthful with the people of British Columbia? The Minister of Aboriginal Affairs says they were. Well, that's very good. I'm always very pleased when I get somebody picking up and taking the bait.
Their literature -- "New Democrat Fiscal Framework" -- says this specifically:
"Voters and taxpayers" -- and listen closely, hon. Minister of Aboriginal Affairs -- "are rightly fed up with the traditional approach to election campaigns: promise anything before the vote, renege afterwards. New Democrats will not commit British Columbia to increase government debt simply to suit the short-term political needs of this election. One promise I have made is that my government will pursue these priorities within a balanced budget over the business cycle."
That is the current Premier. Good stuff. Quite in contrast to the Minister of Aboriginal Affairs. "The fiscal framework I put before you today indicates how much my government is prepared to spend to pursue these priorities."
"Balanced Budget-Plan Highlights," hon. Speaker:
"The New Democrat plan is based on the same economic growth forecasts contained in Budget 1991..... We have prepared a balanced budget for the five-year business cycle. We have set a goal of eliminating the annual operating deficit by the 1994-95 budget year, the same target as the Social Credit government."
What a difference a day makes; what an absolute difference a day makes!
Further in their campaign literature.... This one is entitled "A Better Way." As a matter of fact, that one was taken from a private member's statement I delivered on parliamentary reform in this Legislature. Item 4: "We'll balance the budget over the business cycle...and keep taxes fair...for everyone." This is a government that has what it takes to take what everyone has.
I see a conflict, and I know what the hon. members on the other side have in their conflict -- both from the private members' side and also from the executive branch of government and the ministers. I'd like to refer to a couple of quotes to show the dilemma. Some of them certainly have accepted the responsibility of striving to provide good government, and I applaud those individuals. Others have not succeeded, on election, with that desire or that objective in mind, and they're playing pretty fast and loose with the taxpayers of British Columbia.
The dilemma they face is this: in playing to special-interest and single-interest groups, they have had a number of things to say. The member for North Vancouver-Lonsdale had a quote that I would like to read which perhaps displays their attitude. That member said in 1989:
"The federal public debt is no monster.... The monster the Conservatives have created is made up of myths.... Public debt is a loan within the family, like advancing your children's allowance.... The available data show that Canada's debt is not out of line by historical standards. In 1989 the indicator of debt is not reason to be alarmed."
That hon. member has to recognize that in the federal situation, 34 cents out of every revenue dollar that the federal government takes in does not provide goods and services for taxpayers. That's what the Taxpayer Protection Act was all about, and the repeal of the Taxpayer Protection Act will allow an increased deficit and increased debt in the province of British Columbia, with vastly increased costs and a diminishment of services.
The Minister of Aboriginal Affairs pointed out with absolute pride the budget and the smallest growth.... I think the member should take a look at that budget and recognize how far off track.... They flatter themselves by thinking it's a Socred budget or even a Conservative budget. It increases expenditures dramatically in areas of their specific concern, where their friends are, the special-interest and single-interest groups who have contributed greatly to that political party's success in the province of British Columbia.
The reality is that the elements that encourage and excite the growth and development of the economy of the province have been slashed -- slashed absolutely. There is no protection for taxpayers. The political will exhibited on the other side of the House is a political will only to reward....
Interjection.
C. Serwa: Yes, the Minister of Finance, of course, has a very strong union background. That is exactly the political will that these people are exhibiting. The reality is that a very small percentage of the population of the province is involved in unions. The Taxpayer Protection Act was intended to represent the best
[ Page 802 ]
interests of all the people of the province of British Columbia.
[4:00]
In closing, I would like to say that there are members in the opposition who do have a sense of responsibility. I'll quote from one in reference to the repeal of the Taxpayer Protection Act. The member for Parksville-Qualicum had this to say -- and he's a New Democratic member who was successful in the election, and I congratulate that member: "If we're going to be honest with the people in the next election, that's what we're going to have to tell the people of British Columbia, that all these things are going to cost a great deal of money. Believe you me, we're all going to have to pay higher income taxes." That member is the only member in this Legislature on the government side who was willing to be perfectly honest about what this government is doing.
More than ever before, the discipline of the Taxpayer Protection Act is necessary. If this House is truly to succeed in its responsibility to the people of the province, partisan political debts -- payoffs to special and single interest groups -- cannot be a dominant factor in the governance of British Columbia. I think all of the members on the government side see and understand that. It seems to me that retention of, modification to or improvement on the Taxpayer Protection Act would be an admirable avenue to pursue, but the carte blanche repeal of that does not encourage the display of any confidence by the people of British Columbia on the part of government today.
What they have done is increase taxes all across the board, whether it's the repeal of the supplemental homeowner's grant -- which is going to have horrific implications -- or all the other small incremental tax increases that will impact not just the upper echelons and the corporations, but all of the people of the province.
I believe it's singularly shortsighted. In being shortsighted, we're going to diminish the excitement in the province. We're going to take from the enthusiasm of the people of the province the optimism for the future. It is not fair or reasonable at this particular point in time, when we have to make the changeover from the resource extraction industries and move into high technology and manufacturing sectors of the economy so that we will not be a Third World country in the world.
At this particular time we are -- with our anger, I suppose, against success -- cooling off the economy as much as we possibly can, pulling resource funding out of that economy and placing it in areas which will not generate anything. It's only with a substantial amount of cash flow that we can actually fund all of our responsibilities. We all acknowledge that we have these social responsibilities. Certainly education, social services and housing and most definitely health must be funded, but it is better to take a smaller amount out of a large cash flow and keep the economy steamrolling than to increase tax rates and bury that economy.
The reality is that the members on the government side always want to attack success and attack corporations. The reality, too, is that union pension funds are invested with these corporations. The diminishment of returns will affect negatively those pension funds, and, believe you me, the Minister of Finance understands as clearly as I see him there that it is not the corporations which pay. It's another way of indirect taxation on the ultimate consumer. That ultimate consumer is the same taxpayer that we have a responsibility to provide services for -- as well as opportunities for them and their children.
It has been a pleasure to speak in opposition to this repeal and to speak in favour of the retention, albeit encouraging the government in place to perhaps bring better amendments to make the legislation superior in various ways. As I've explained, fundamentally the philosophy and principles in the legislation that exists are sound. They're not controversial; they're something that we should all collectively aspire to. The repeal of that is something I deplore. I conclude my speech by saying that I'm very disappointed in it, and I strongly oppose the repeal.
C. Tanner: I rise to speak on Bill 3, the Taxpayer Protection Repeal Act. First I'd like to apologize to the House, to Madam Speaker -- in case, in my enthusiasm, I got carried away -- and, in particular, to the member for Saanich South, who I wouldn't offend for the world. However, the point that sticks in my craw is the fact that he wasn't here, and half the NDP members who are sitting here weren't here, when that party voted for the bill we're repealing.
Just for the record -- I would like to have it in Hansard -- the Premier of this province voted for this bill when it was first brought in. The Deputy Premier and Minister of Education voted for this bill when it was brought in a year ago. The Minister of Forests, the Minister of Environment, the Minister of Finance -- the member for Vancouver-Kingsway -- voted for this bill. They didn't have the courage to stand up and say what they really thought; they thought it was the popular thing to do to appease the population, and so they stood up and voted for it. I wonder whether the new members sitting in this House on that side and down at the end here realize how two-faced their fellow members were the last time this came around. In my view, it's hypocritical. The Minister of Agriculture, the Minister of Energy, the Minister of Labour and Consumer Services, the Minister of Health, the Minister of Social Services, the Minister of Advanced Education, the Minister of Tourism and the Minister of Government Services all voted for this bill, because it was convenient.
I think they should repeal it. I don't have any trouble with the fact that they've repealed it, but where's the replacement? They were very happy to vote for it in the first place, but they don't have anything to replace it with to protect the taxpayer against their ability to pick the public's pocket.
When he first spoke a week ago the member for Peace River South mentioned to the House that they should beware of bills that are just tidying up and housekeeping. I made a note at the time that members should also be aware of bills that have only two lines
[ Page 803 ]
and are also retroactive. It's not a type of legislation we should be looking at in future.
I can't help but make comment on the fact that the members of the third party are the last people in the world to be talking about taxation notices. Every member in this House is very much aware that in the recent election that party had the stupidity to introduce a tax notice in the election, and it probably cost them 20 seats. If I were them, I wouldn't be drawing to the public's attention the serious error and offence they gave to the public of this province.
I haven't got a lot to say. I merely want to emphasize that if those members opposite, when they were on this side a year ago, had had the courage to stand up and say that it was nonsense and they weren't going to vote for it, there would be a lot more validity in what they are doing today. They didn't do that. On top of that, they have not replaced this bill with anything else. We cannot support it on this side of the House.
J. Dalton: The act this bill is threatening to repeal.... It's very unfortunate that we are even considering this. It's an excellent concept to consider freezing taxes. Certainly the taxpayer of this province, collectively and individually, is telling us all the time that we are being taxed too highly and too often. There is no question of the excellent concept behind the act. Unfortunately, now we're faced with the prospect of both repealing the act and, as other members have pointed out, not replacing it with anything.
I would point out that the government now -- then the opposition -- voted unanimously in favour of the act we are repealing through this bill. That certainly tells us something. What's happened between now and then is that they've changed positions from this side of the House to the other. Suddenly not only is it a physical change, there's a quite obviously a philosophic change as well.
I would refer to some comments that the Minister of Finance made when he was speaking to this bill. He pointed out that the Taxpayer Protection Act "froze taxes" -- again a very good concept. He specifically mentioned that "it would be financially irresponsible to allow the act to remain as legislation." Why he said that is what I'm leading into. The hon. Minister of Finance suggested that instead they would implement responsible tax increases. I haven't yet heard from any taxpayers in this province who feel that the announced tax increases in the budget are in any way responsible. In fact, a better adjective that they would probably attribute to it would be unfortunate, and regrettable for another. I could go on and on describing the tax increases that all of us in British Columbia are facing.
The hon. Minister of Finance also suggested in his comments in support of this bill that they will be implementing good financial management. I shutter to think of the future of this province, if the budget that we are dealing with demonstrates good financial management.
Specifically, I would like to make reference to March 21, 1991, when the present Minister of Finance -- who was then in opposition -- and all the other members in opposition spoke in favour of the Taxpayer Protection Act. The present hon. Minister of Finance made the following observation: "...if the government feels it needs legislative constraints to make them behave more responsibly, then we on this side have no difficulty supporting those restraints." He was then speaking as an opposition member.
[D. Streifel in the chair.]
It's interesting that the hon. member I just quoted has now crossed to the other side of the floor and obviously no longer feels any need for constraint on government spending, given that he will be the minister responsible for such government spending. We in opposition, collectively and individually, feel that there is every need for restraint on government.
I would point out at least two shortcomings in this proposed bill that is before us. Number one, it's taking away the very protection that all taxpayers need. Secondly, it offers no hope or favour of a replacement to provide some checks and balances on government. I think if this bill is passed -- and I regret that that may be the fact -- we'll have no restraint on government and over the next few years things can only go from bad to worse. I certainly speak against this bill, and I hope all members will do accordingly.
[4:15]
Motion approved on the following division:
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YEAS -- 30 |
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Petter |
Sihota |
Edwards |
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Cashore |
Charbonneau |
Pement |
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Schreck |
Lortie |
MacPhail |
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Lali |
Giesbrecht |
Hagen |
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Gabelmann |
Clark |
Cull |
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Zirnhelt |
Blencoe |
Barnes |
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B. Jones |
Copping |
Ramsey |
|
Hammell |
Farnworth |
Evans |
|
Streifel |
Randall |
Kasper |
|
Simpson |
Brewin |
Janssen |
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Farrell-Collins |
Reid | Mitchell |
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Cowie |
Gingell |
Warnke |
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Stephens |
Hanson |
Weisgerber |
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Serwa |
Tanner |
Hurd |
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Jarvis |
K. Jones |
Symons |
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Anderson |
Dalton |
Fox |
Bill 3, Taxpayer Protection Repeal Act, 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 committee on Bill 8, hon. Speaker.
MOTOR FUEL TAX AMENDMENT ACT, 1992
The House in committee on Bill 8; E. Barnes in the chair.
[ Page 804 ]
On section 1.
L. Fox: The minister will recall, I'm sure, that during second reading I spoke up vehemently opposed to any increase in the jet fuel tax because of the significant impact it has, particularly in the rural parts of the province, and more importantly -- from my perspective -- on the Prince George region. I have done some homework with respect to the impact of this tax on my specific area and to the industry as a whole. In doing that, I came upon a study that was done for Transport Canada called "Market Analysis and Outlook for Transborder Traffic at Vancouver International Airport." It would appear to me.... I hope the minister's listening. In this situation, with respect to the increases this will have to the air fares.... I have it confirmed by the three major airlines in British Columbia that it could impact on the air fares within British Columbia. It appears that the air fares are really another form of cross-border shopping. I have, through this study that I received information on....
The Chair: Hon. member, I would just like to advise you -- would you please take your seat -- that we are dealing with section 1, which is the definition section. It appears as though your comments are on second reading. So I will have you continue, but in light of the definition section.
L. Fox: I apologize, Mr. Chair, and I'll restrict my comments then to the area that we'll deal with specifically.
Hon. G. Clark: First of all, let me introduce to the members of the House Ed Turner, who is the executive director of the consumer taxation branch in the Ministry of Finance. He's here to assist with the technical questions. For the member, section 6 is the tax on jet fuel. This is the definition section, which simply adds certain definitions, particularly with respect to providing an ability to exempt alcohol-based fuel.
D. Symons: I'm glad that we have an expert here on this, because I'm not that expert on fuel, but I do know that alcohol burns much cleaner than other fossil-based fuels. I'm noting that you have an alcohol-based fuel set at 85 percent ethanol, and I'm wondering if maybe we can have a lower percent to encourage the use of fuel that has a fair amount of alcohol in it, as it's less detrimental to the environment. So why the figure 85? Why not 50 percent or something of that sort?
Hon. G. Clark: My staff say that there are virtually no vehicles capable of running on anything other than what we have here. My staff also indicate that the member's correct that in the U.S. there is a move to higher-alcohol-content fuel that new cars may be able to use in the future. At that time, obviously, it would be appropriate for us to revisit this question, and clearly we'd do that. It's a bit futuristic for us to put in a change in legislation at this point. This specific change to the definition is to allow us to give a bit of a tax break over a period of time, with a sunset clause, to encourage people to move in this direction.
[4:30]
D. Symons: If there aren't vehicles that can use a lower mixture of alcohol, are there vehicles that use the 85 percent? I'm curious. While we're at it, why not have a graduated scale of taxes, so somebody who's using a 50 percent or a 25 percent alcohol-based fuel is given some sort of tax break to encourage use of that type of vehicle? Now would be the time to put it in.
Hon. G. Clark: That's precisely what we're doing. There are apparently three vehicles now that can actually operate on 85 percent ethanol, methanol or a combination of both. So this is precisely what we're doing -- providing a tax break to encourage people and companies to move in that direction. Whether we could increase that rate even higher -- I'm not sure it's possible.
J. Weisgerber: Just to get into this debate, clearly Mohawk sells fuel with about 10 percent ethanol that runs very well. I think there are cars that could use any combination of things. I'm advised that Chrysler Canada will be bringing out a car -- if not this year, then next year -- that without any modification will run on straight methanol. I think the point the member is trying to make is that there is a whole range of opportunities.
Not long ago we had legislation in British Columbia which provided a tax rebate for fuel that contained only 10 percent ethanol and methanol. So I think that the member's point is well taken. There is a whole range of opportunities that now exists for burning various mixtures of gasoline -- ethanol, methanol or any combination of those.
Hon. G. Clark: For the members' edification, that bill was never proclaimed. The gasohol bill was passed in the House and never proclaimed, and so we never did move in that direction.
I think that all members should agree it is a positive move that we are giving a five-year break to cars which can operate on 85 percent ethanol -- which is, again, very few cars at the moment -- to encourage people to move in that direction. It's clean fuel and it's something that we want to support. Frankly, we do not extend any break right now to the 10 percent ethanol fuels which Mohawk pioneers. I guess it's something that I don't mind considering in the broader context of environmental policy, but it's certainly not contemplated right now. I'm sure it would result in some vigorous debate in that community about whether it's warranted or desirable.
F. Gingell: I don't wish to put this forward as a question, but I would like to point out to the minister that they really should differentiate between ethanol and methanol fuels. Unless prices have changed dramatically since I last was aware of pricing, you don't need a tax rebate for methanol fuels. The use of methanol fuels in the province -- which are cleaner
[ Page 805 ]
than gasoline from an environmental point of view -- is pure and simply a question of technology. It isn't a question of price. The price question comes in with ethanol. As you probably know, methanol is produced by various chemical processes in large volume; ethanol, in the normal course of events, is made by distilling grain. It's a much more expensive process.
If the minister is serious about alternative fuels and about finding ways of getting this country to stop mining carbon out of the ground that was put there millions of years ago, stuffing it into the atmosphere and creating greenhouse gas problems, he will start getting us to take the more sensible, balanced view of making fuels that will work well in the cars that we presently have -- by taking carbon out of the atmosphere and by making them carbon-balance-positive, as is the case in ethanol.
You have to do something to make the cost of ethanol, delivered in the province of British Columbia, similar to the price of gasoline. They are dramatically different. You simply cannot make ethanol for the same price as gasoline.
I do believe that it is a worthwhile project and that it is something that should be encouraged, so that all companies which are in the business of distributing fuels are encouraged to do so.
Hon. G. Clark: This is, of course, totally beyond the scope of this bill and completely out of order, but that doesn't matter.
Again, you're suggesting that what this bill does.... This section defines alcohol-based fuel, so that we can add it to the list of exempt products like natural gas and propane. Members opposite are saying that the government should consider adding not only this but also fuel such as Mohawk sells -- or the ethanol component of it -- to give it a bit of a price break so it can be competitive. That's something which, I must say frankly, I'm somewhat sympathetic to, but it's beyond the scope of this bill. We'll certainly review it in the context of any major review of environmental legislation.
However, it is a big debate on ethanol, in terms of how it's generated and whether in fact what's being done is done environmentally. That's another question which I'm sure we as a government will certainly review. It's not particularly a Minister of Finance issue, but might be at some point.
Sections 1 to 4 inclusive approved.
On section 5.
J. Weisgerber: I'm somewhat concerned that we're moving away from a formula-based increase in taxes. I suppose there can be several reasons for doing that. One is that at this point the formula may well be driving down the tax rate, and the government wishes to keep it on the level it's at now. If that's the case, I suppose that's understandable. I would be interested in knowing if that's the rationale for doing it. It seems to be that once government moves away from a formula and starts to make arbitrary changes in the tax rate, there's a certain loss of comfort and protection that people feel. People are reassured to know that certain taxes are driven by inflation. If they aren't, you see the government manipulations that happen: at election time, you don't get any tax increases; the first year after, huge tax increases. That hasn't been the pattern in this province before, but I'm fearful that with a new government that might occur. Perhaps the minister could give us some advice.
Hon. G. Clark: Those are good questions from the member. We're the only province left with indexing, and we, of course, are removing it in this bill. Indexing has not worked.
You are correct in saying that it may have dropped a quarter of a cent right now. But you'll notice in the budget documents that it shows as revenue-neutral. The reason is that we were projecting over the course of the next year that it would go up again, and down and up. We were projecting what is in this bill. If imposing this flat tax was a tax grab, it would have been reflected in the budget documents as an enhanced revenue measure for the government. It is not; this is revenue-neutral. I think it's true that there probably would have been a slight cut right now of a quarter of a cent or something. But we are projecting that it would have gone up over the term of the year.
I might make it clear here that the reason why every government in Canada has abandoned this is that it's very difficult to forecast revenue as a result of this; and it's subject to exogenous forces like the Gulf War, crude oil prices and a whole range of things. We thought it was more honest, straightforward and better for government in administrative terms, better for forecasting -- and better for the consumer, frankly -- to be up front about what the tax is right now and how much it will be for the rest of the year. It's 10 cents a litre essentially, and that's what it will be now for a year. At budget time it will be reviewed. It may well rise over time. I wouldn't be surprised if it did. I think it's a little bit more difficult now because of other forces -- cross-border shopping is a concern, and the like. I think this is a good-government measure.
Again, all governments in Canada have come to the same conclusion, for stability purposes in revenue, for clarity for the taxpayer, for honesty and respect to the consumer and for administrative purposes, so that we don't have this fluctuation based on an indexing formula that keeps kicking in quarterly, which is confusing for everybody and difficult for government. This is much more straightforward and honest, and it's good public policy.
J. Weisgerber: While I can certainly understand the Finance minister's rationale, and for this year's budget that would seem to be supportable.... I understand, then, that we will review this at budget time each year; that it requires legislation to bring in a change. I'm not certain what kind of situation there might be where the government might wish to change the rate when the House isn't sitting. I haven't thought my way through that, but I suppose that's one of the downsides.
I don't know that it's appropriate in this debate to ask the minister whether he foresees the increases that he would introduce legislatively roughly following the
[ Page 806 ]
inflation rate or whether he believes fuel tax rates in British Columbia are at an appropriate rate.
More importantly, as we continue to look at the problem of cross-border shopping, we're continually advised that gasoline taxes are one of the things that drive British Columbians across the border; and as we heard yesterday from the fish-processing people that were here, the difference in gasoline prices is one of the things that drive commercial fishermen to deliver their fish in the United States -- I'm not positive whether those are tax-driven or otherwise. Could the minister give us any hint of where he sees gasoline taxes going, and can he also confirm his statement -- so I don't have to stand up again -- that the federal government's gasoline taxes are no longer indexed or formula-driven, as well as the province's?
The Chair: The question does tend to address future policy. However, the minister may wish to respond.
Hon. G. Clark: My understanding is that there is no indexing at the federal level either; we're the last province.
I would say that one of the problems of cross-border shopping in the lower mainland is that it's compounded by 3 cents a litre for transit. As you probably know, I've rejected the calls of the Vancouver transit commission to add another cent precisely because I am concerned about cross-border shopping. One cent a litre is about $55 million; it is a big source of tax revenue. It's hard to lower it because of our fiscal situation. It has some positive environmental consequences -- higher taxes on gas can be defended on environmental grounds, by and large. If it's just simply fuelling cross-border shopping and you're not really doing anything to help the environment, you just have a tax loss, and you're discriminating and hurting our businesses and consumers.
We're looking at all those questions. At this point, we simply froze it. I did not take the opportunity in this budget to raise gas taxes for precisely the reasons that you alluded to.
F. Gingell: I must admit that I haven't read the Motor Fuel Tax Act, but I'm wondering about the wording of paragraph 4(2). Is this the way it's normally worded? It requires: "A person who uses gasoline or leaded gasoline on which tax is not otherwise payable under this section shall pay to the government...." Is this just to catch people who are buying in a tax-exempt manner?
[4:45]
Hon. G. Clark: My understanding of this is that there's absolutely nothing new here. This is normal procedure.
L. Fox: I apologize for my earlier enthusiasm to get right to this particular section.
I have a real concern with respect to the impact of the jet fuel tax, from both the northern and rural perspective as well as from a provincial perspective. If this government is truly concerned about the global economy, the minister should really amend this particular portion in order to lessen the impact on jet fuel. I believe it's regressive because it places a burden not only on domestic travel within the province, but on the industry itself at a time when it truly can't afford the impact.
Does the minister have any idea as to what the impact will be with respect to the cross-border shopping portion of this increase? Because that is a very significant factor.
Hon. G. Clark: Our understanding is that it won't have an impact. I'm not saying it's not a big tax increase; it is. I want to make a couple of points. First of all, this bill also removes the social service tax from airlines. The reason it does that is because we were trying to tax domestic carriers and weren't taxing international carriers, which was putting our companies at a disadvantage. In addition, it was difficult constitutionally across the country. So we repealed that, and we lose some revenue for that. And we in a sense replaced it. I don't want to make too much of this, because we're getting more revenue -- but we imposed a more equitable tax on jet fuel.
In addition I looked at the history in Alberta -- I have it here. You can see that we are now exactly the same as Alberta and Saskatchewan; the western provinces are all at 5 cents a litre. There was no loss in revenue associated with the increase in their fuel tax to 5 cents a litre. I have it right here. As a matter of fact, it's pretty clear that it hasn't had an impact in Alberta or Saskatchewan. We don't anticipate it having an impact here. The member opposite made that point in second reading, but I have the information here directly. It went from $3.4 million in 1986-87 to $26.3 million in 1987-88; $29 million, $27 million, $27 million -- it has stayed roughly constant since they went to 5 cents a litre. They went from 0.7 cents a litre to 5 cents a litre in that one year. We've gone from 3 cents to 5 cents, which is consistent with the western provinces.
L. Fox: I'd like to go to that point for a minute. With respect to the fuel tax impact on Alberta, I think if the minister were to explore this a little further, particularly with some of the airlines, he would find that what that tax did was cause a lot of the airlines to buy their fuel in British Columbia. In fact, they tanker fuel from British Columbia in order to save paying that tax. So while there wasn't a direct impact in terms of the Alberta budget, I think you would find there would be a loss of revenue to the province the minute you equalize that tax.
You speak about being equivalent in terms of fuel economy and fuel prices with Alberta; in fact, the real competition in the Canadian airline business is not Alberta at all; it's the U.S. A recent study done for Transport Canada in February 1991, called "Market Analysis and Outlook for Transborder Traffic at Vancouver International Airport," showed that the Washington airports of Bellingham and Seattle are a major factor in Canadian travel. I'm submitting to you that it's going to increase substantially should we increase the
[ Page 807 ]
costs as you're projecting them. Let me just give the minister a bit of that study, if he wouldn't mind. Regarding travel out of Bellingham and Seattle: 11 percent of the city of Vancouver, 16 percent of the North Shore and 43 percent of the south shore travel to the U.S. and international destinations out of Bellingham and Seattle.
I submit to the minister that the cost per litre for gas that is a real comparison, given those factors, is that this tax will bring the cost of jet fuel in British Columbia to $1.05 per litre, while jet fuel across the border is 58 cents per litre U.S., which is equivalent to 69 cents Canadian per litre. That is the significant factor, not the Alberta factor. I submit that to you, and I would like your response to that particular issue.
Hon. G. Clark: We will, of course, be monitoring that situation. Obviously if there's tax loss associated with it, it would not be a wise idea. So we will monitor it.
There are lots of factors driving people, frankly, to take flights from the U.S., not the least of which -- in fact, I would say the number one reason -- is the high value of the Canadian dollar as a result of misguided federal government policies for high interest rates. So the high value of the Canadian dollar combined with the GST and a variety of other factors have it.
I'm not saying that this doesn't increase our rate, but we're confident that it will raise $16 million. This increased fuel tax by and large is progressive, and we need that revenue to deal with the financial mess left behind by your colleagues.
L. Fox: I am concerned when that's the response I get from the Finance minister. It's pretty shortsighted, in my view, and it's not looking at the overall picture. This will not only impact the south, in this regard, but I have a letter sent to you, hon. Minister, by Air B.C., in which they point out the seriousness of this matter. For the record, I'd like to read some quotes from this letter.
Mr. Chairman, just to know that you understand, it speaks of two issues: the corporate capital tax, which I will stay out of, and the taxation on jet fuel. I'll read a couple of paragraphs, if I may:
"The 2 cents per litre additional provincial tax, effective April 1, 1992, represents a 67 percent increase in the provincial tax burden on aviation fuel, and an effective 8 percent increase in our overall fuel costs" -- or an approximate $1.1 million-a-year impact. "This comes at a time when the aviation industry is suffering significant losses, and we have no alternative but to pass on the additional burden in the form of higher prices. Your department officials no doubt justified this increase in part on the basis that Alberta imposes a 5 percent per litre provincial tax on jet fuel, and the increase being proposed brings the tax up to that level in British Columbia. This is correct; unfortunately the alternative choice for air services that we are increasingly facing is south through Bellingham or Seattle, not through Alberta gateways. This trend of diversion of traffic to adjacent U.S. airports has become increasingly apparent since the imposition of the 7 percent GST. It will only accelerate as we are forced to increase prices to compensate for the additional taxes, thereby providing more incentive to choose alternate gateways to Vancouver."
They go on to another point that I'm concerned about as well, and one I think the whole aviation industry in Canada is concerned about. That is: Upon the completion of the present round of open-skies negotiations, we would anticipate more competition from U.S. carriers who will be in a position to divert traffic over the U.S. gateways, and the concern we have already raised will become even more significant." With the open skies network that has been negotiated, we could see, with this kind of taxation, that individuals could go into Washington, specifically Bellingham and Seattle, and fly across Canada on cheaper fares than out of Vancouver. That has to be a significant concern.
I also wanted to point out, and I'll try to do it all at once so that the minister can respond, that a very significant factor of this is the delivery of service in northern B.C. I have spoken to both of the carriers of people into the north. I quote one: "It will be essential that through this increase we will either have to increase fares or decrease the number of flights to some areas of this province. We cannot continue to provide the level of service that we are at the existing fare rate."
Given the fact that the fare from Prince George to Vancouver today is $513 return, I think the minister would have to agree that that's a substantial amount of money for individuals to pay who have to come to Vancouver for essential medical services. Often it's a direct reflection on the level of business done in the north and in the rural parts of this province. It's a substantial amount. It's not just a matter of the airfare when you come down here; it's also a matter of your other expenses as well. This is all having an extremely negative impact on the rural parts of this province. I leave it to the minister to respond.
Hon. D. Miller: Picking up on the Member for Prince George-Omineca's remarks, I have of course quite an interest, coming from about the same latitude in British Columbia as that member. On the whole issue of airline fares and the very high cost that we face in the north for some pretty basic service -- and in fact the downgrading of that service level that we've seen over the past little while -- I'm wondering if the Minister of Finance might want to offer some comments on that aspect of it.
As I recall, I was at one point in this House the transport critic for my party. Members may recall that at that time, 1986-87, the federal government brought in two major pieces of legislation that in effect deregulated our transportation system in this country. For those who don't understand the issue of regulation, the regulated system that we used to have in Canada essentially required carriers to provide service that was clearly uneconomic to remote parts of this country. It was an age-old system. Our country, in fact, was founded on that system. It recognized that we have a vast geography and that we have, in many instances, small communities that because of their size would not allow carriers to provide an economic system. It clearly would not allow carriers to charge the kind of rates that would allow them to break even on any particular run.
[ Page 808 ]
I'm sure the member from Prince George-Omineca must be familiar with some of this.
[5:00]
At the time, as the transportation critic provincially, I opposed that deregulation and attempted to raise the matter with the then Minister of Transportation for the Social Credit administration, with the argument -- really asking the Socred administration at that time, in 1987, to support our position -- that there should be a boundary line drawn across Canada, north of which we would maintain a regulated system. I wasn't really too worried about the consumer, in terms of catching a plane from Vancouver to Calgary. But I was worried about the consumer in northern B.C., whether he or she was flying to Prince George or Smithers or Prince Rupert, or wherever. I argued that we needed to maintain that regulated system above a certain parallel.
Much to my dismay, the then Minister of Transportation in the Social Credit government of the day, rejected my suggestion that the government join with the opposition and try to protect consumers in northern British Columbia. In fact, he said that the demarcation line should be even higher. I couldn't understand it. I know that at the time, Mr. Chairman, there was jet service to, I think, Fort St. John -- well maybe it's Dawson Creek. I predicted that the service would be reduced. In fact, I understand it has, but you've got those Dash 8s flying around now.
There was jet service to Smithers. Now there are Dash 8s....
C. Tanner: Point of order. Mr. Chairman, we're discussing the bill to increase the tax on jet fuel. I don't know what the member opposite -- how his conversation, which is referring to federal regulation -- has anything to do with this bill.
The Chair: Thank you, Hon. Member. We are on section 6, and I would ask the minister to address his remarks to that section.
Hon. D. Miller: I was trying to relate it to the issue that had been raised, the one we're waiting for a response from the minister on. That's the issue of the tax implications for the fares that are charged for airline travel to northern British Columbia. I think that was the issue we were talking about. I was just trying to add a little more information and knowledge to the issue to allow a complete answer by the minister. I thought I was completely on target. It may be that the member for Saanich is uninterested in the issues that affect northerners, but I would beg his indulgence.
Really, I'm just wondering if the minister could address the implications of regulation or deregulation as it applies to the fare issue raised by the member for Prince George-Omineca. Perhaps it may be that the members of the Socred caucus have now changed their view from what it was, as expressed by the minister in the Socred government in 1987.
The Chair: Before the members continue, it has just been brought to my attention that the way the sections have been numbered could be confusing for the committee. We are actually debating section 5, although it appeared as though we were on section 6. So nonetheless, proceed on section 5.
J. Weisgerber: Thank you, Mr. Chairman. It's interesting to look back at 1986. It's the golden years of the transportation critic, but the fact of the matter is that they are now government. They now have an opportunity to make the kinds of changes that might help implement the very case that the member was pleading. Rather than try and deflect the issue, perhaps the government would simply take their own minister's word seriously, recognize a serious issue that the member raises, and implement a change if it's appropriate.
As far as the Minister of Forests is concerned, he will have a lot of opportunities over the next months and years to support issues raised by the opposition. When we've seen his track record over the next two or three years, we will then be able to judge whether governments jump into proposals raised by the opposition. If he proves me wrong, then my estimation of him will rise even higher than it is now.
The Chair: The member for Prince George-Omineca was in the debate, so we will let him exhaust his points and then we'll go to the other.
L. Fox: I'm a bit concerned. I asked a number of questions, and I got a response from the Forests minister that was not even close to being on target.
Hon. G. Clark: The government takes seriously the concerns you've raised. Any time you raise taxes, you want to make sure that it's being competitive. It's true that we are competitive across the rest of the country, by and large. We are lower than Saskatchewan and Manitoba -- although Manitoba has just brought theirs down to 5 cents -- but we will review it over time to ensure that it's not having a deleterious effect on our industry. But we're quite confident it won't.
Despite the fact that it is a tax increase, we do need revenue to deal with this fiscal crisis that your government has left us. We will take your comments very seriously and try to respond genuinely. Next year when my estimates are up, I know you'll be holding me to that.
L. Fox: Before I conclude I want to make a few other facts known. The airlines operating out of British Columbia -- the ones you'll be taxing directly -- will feel the bulk of the impact. As a matter of fact, Canadian Air, Air B.C. and Time Air will collectively feel about $10 million of the impact that you're imposing.
I'm going to inform you that a lot of the airlines that they run in competition with, particularly the United States airlines, are now able to fuel up in L.A., San Francisco or whatever the case may be, and make a complete run. Yes, the airlines tell me this; I have spoken to them about it. Their fuel experts tell me that they will no longer have to fuel up on those flights in British Columbia, and you could very well see from that a reduction of gallonage used.
[ Page 809 ]
Also you should know that the larger airlines going to some of the countries where the prices are higher now actually tank their fuel with them in order to make a return flight. Yes, they do that. I'm concerned that you're going to see this decrease the gallonage being sold out of Vancouver rather than increase it.
Once again, I can't reiterate enough that this is another negative factor on business in the rural parts of this province -- on the people in the rural parts of this province who need to come to Vancouver for essential services. The Forests minister himself agreed that this was a significant factor, and I'm suggesting to you and all the members from the rural parts of this province that sit on all sides of this House that they should oppose this increase, because it's specific primarily to them more so than to central Vancouver or this part of the province.
Hon. G. Clark: Briefly, to reply to the members concerned: tanking, bringing in of fuel tanked in and then fuelled up here, will be covered by this tax. It was, in fact, an amendment brought in by the previous administration to deal with a loophole in the legislation. It is not possible to bring fuel in and then fill up here and not pay the tax.
I might just make the point again that we had a social service tax on domestic carriers, and that was not applied to international carriers. This, in fact, levels the playing field by lifting that social service tax for domestic carriers and replacing it, essentially, with a jet fuel tax. All carriers will pay it. Believe me, international flights will pay this tax, and that puts domestic carriers at a better competitive advantage.
We are concerned with northern travel, and again the Minister of Forests pointed out very correctly that deregulation has done more to harm travel around Canada and particularly to smaller communities than anything that this will do, believe me. We will monitor it and we'd be delighted to talk to you about it in the future. If it does have an impact, we will clearly review it.
G. Farrell-Collins: I find it very interesting to hear some of the comments made by, well, whichever minister it is who is defending this bill. I suggest that they do a little more research before they either bring in this type of legislation or comment on it. The Minister of Forests had some comments about Dash 7s and Dash 8s not being jet aircraft, and therefore not being jet service. In fact, those aircraft run off turbines and are subject to this tax. Perhaps the next time he chooses to give us some of his wisdom, he would ensure first of all that it is factual.
The second is the Minister of Finance, and I was astounded to hear his comments just before he sat down now, after talking about tankering of fuel. I might inform the minister that in the aviation industry when one talks about tanking fuel, it is not a matter of trucking it up and putting it into tanks here and then feeding yourself off those tanks, nor is it flying an airplane in full of fuel, emptying the fuel into a tank, and then filling up the next time you're in.
The term "tanking of fuel," as it relates to aviation, means carrying a full load of fuel on a flight; for example, from Los Angeles to Vancouver, where you may only need a 25 or 35 percent load of fuel. Because of the increased taxes in British Columbia, instead of purchasing fuel here and paying 3 cents per litre taxes, which goes into the general revenue of this province, it is now more profitable and more cost-effective for these carriers flying out of the country to fuel up in foreign cities, carry that fuel all the way into Vancouver, and not refuel, and fly all the way back to Los Angeles. Instead of buying fuel in British Columbia, they buy the fuel only in Los Angeles.
There is another angle to what I just said that I brought up in the second reading of this bill, and I'm surprised that the minister hasn't or didn't pay attention at that time or hasn't taken that up and done the research necessary to confirm it. When an airline is forced by different levels of taxation to fly and -- again that term -- "tanker" fuel to Vancouver, what that does is to decrease dramatically the performance of that aircraft; it requires greater levels of power in the aircraft, which requires greater fuel consumption, and this has a greater negative effect on the environment for the same flight, because the company has used up more fuel.
These are some areas, and I really am very concerned when I hear that two ministers, who are in cabinet making the decision of bringing up this bill to increase the rate of taxation from 3 cents to 5 cents, didn't take the time to do that research and to understand even what those terms mean or what is a jet airplane and what isn't a jet airplane. It really leaves me to wonder who is in charge and who is running this government.
Interjections.
G. Farrell-Collins: Don't worry about that for a few more years, until there is finally a government that is going to take charge, and we'll do that.
There is also a report, brought up in second reading, done by a group of people in Alberta, with regard to the effect of the increase in jet fuel tax on the industry in Alberta; it was a disastrous effect. That report was brought up by the Leader of the Opposition at that time, and we've yet to hear any rebuttal to that report -- any wisdom that has been gained by the Finance minister with regard to that report, or certainly the Forest minister who now seems to be responsible for this bill also. I wonder if the minister is overworked or if he has had time to even look in and research that report. I'd like to hear some answers to those three areas.
Hon. G. Clark: I would appreciate it if the member would listen to his own words. First he argued that people would tank up in L.A., fly up here, and then fly back. Then he argued that if they did that, they would consume a lot more fuel because of the weight of the aircraft.
Interjection.
[ Page 810 ]
Hon. G. Clark: That's correct. It's not efficient, for 2 cents a litre, to carry twice as much fuel from L.A. That means increased weight on that aircraft, which will consume a heck of a lot more fuel when they take off to get up here. It's pretty clear that it's not efficient. However, let me assure the members of the House: if it is efficient for aircraft to fuel up in Los Angeles and carry that enormous extra payload and the costs involved with that, if that still makes them more competitive because of this increased tax burden, then we'll certainly review it.
It's not our intention.... If we're bringing in a tax increase, it's to raise revenue. If it doesn't do that for whatever reason, then we will review it. I make no hesitation saying that in this House. But our information, when you compare it with the rest of western Canada and you look at the information that we have to go on, is pretty clear that when they raised their fuel tax rates on jet fuel, they raised a heck of a lot more revenue. We anticipate doing the same here. I try to give you as much comfort as I can, but if this is counterproductive -- if this does not raise the revenue -- then we'll review it.
[5:15]
G. Farrell-Collins: I really am shocked that the minister has not taken the time between the second reading of this bill, which was some time ago -- eight days ago or perhaps longer -- and now to do that research. We brought this very fact up eight days ago. We're now at the committee stage of this bill; we're about to pass this bill, perhaps today. The minister has had eight days to do this research: he's had eight days to pick up the phone and talk to the airlines involved and question them on the policy of tankering or what it's all about or even what the word means, and he hasn't done that.
How can the minister stand up in the House and justify this increase in taxes when he hasn't done the research beforehand? Why is it that we, as members of the opposition, have to educate the minister as to what tankering means, as to what the cost of tankering would mean, as to the effect it's going to have on the economy when that information is out there? I got this information by picking up the phone and talking to Canadian Airlines and other airlines and people I know in the industry. Why is it that me, with a staff of me, can find that information when the minister, with a staff of thousands, can't find that information for himself?
I find it very upsetting to think that the minister would now stand in the House, after putting a bill on the order paper that's going to have profound effects on the aviation industry in this province, and say: "Well, gee, if it's not a good bill a year from now, if there are problems...." The angle he takes, as far as the definition of what a problem is, is that if we don't raise enough taxes, it's not whether or not we're hurting the industry; it's whether or not we're making enough taxes -- that's the criteria. Then he would review it, at that point in time.
Perhaps the minister doesn't understand how a business works, since he has never really worked in a business. Airlines, for example, make and sign fuel contracts well in advance. A lot of negotiation goes on in determining fuel contracts. To have the minister throw a wrench into the planning process of airlines that are dealing with millions and millions of dollars is ludicrous. Canadian Airlines alone says that this fuel tax increase to their corporation will cost $7 million in increased costs over the next year.
I hate to say it, but if the minister would at least pay attention.... Maybe if he had paid attention in second reading, he would have found out some of the information, and we wouldn't be here today trying to reeducate him, nine days later. Perhaps the minister, before this bill passes.... I would encourage the members of this House to not pass it today -- we had hoped to be able to do that -- but to give the minister some time to go back, sharpen his pencils and consult with the industry as far as what the effects are going to be.
Give him a chance to read the report that was done in Alberta when the same type of thing was done as far as increased taxes is concerned. He'll have a chance to go back. I hate to take the time out of his long weekend -- because we all want to spend some time with our families -- but I think he really does need to sharpen his pencils, do some work, make some phone calls, consult with the industry and do some evaluation on what the effects of a tax increase are going to be before bringing it in -- before you bring bills like this to the House. Isn't that your job? Isn't that the job of a minister of the Crown?
The Chair: Thank you, hon. member. I think your point has been stated on numerous occasions quite well. I must remind you that the standing orders do prohibit repetitious and tedious debate. Perhaps you could move on to another aspect of your....
G. Farrell-Collins: I certainly would rather not have to keep repeating these things, but every time I do it the minister is not paying attention. He's talking to someone else. I do have some very strong concerns, given the fact that we did go through this on second reading, and the minister still hasn't done his homework in the meantime. I will assume the minister has the message now, and if he doesn't I will mail him Hansard so that he can read it.
The Chair: Thank you, hon. member. You may move on now.
G. Farrell-Collins: I do have one other comment, if I may. I am still waiting for an answer from the minister as to whether or not he intends to now go back and do the homework this weekend: read the report from Alberta; talk to the airlines involved; talk to the environmental section of his caucus, who I'm sure would love to convince him of the lack of wisdom in this section of the bill; and come back to this House at a later date -- not pass this bill today -- with an explanation as to what those effects will be.
The Chair: Hon. member, we'll have to ask you to take your seat if you are not able to get on to another aspect. You've made that point. I think the minister has
[ Page 811 ]
taken it, and I'm sure he understands what your intentions are.
G. Farrell-Collins: Mr. Chairman, if I may very quickly....
The Chair: On another matter, hon. member?
G. Farrell-Collins: I am still asking a question of the minister, and I haven't asked that question until now. The question is...
The Chair: Proceed, hon. member.
G. Farrell-Collins: Thank you. I'm not trying to be repetitious. I'm trying to get an answer from the minister. The question is very simple. Will he take the recommendations made by the opposition in this regard, consult, not pass this bill today and come back to the House at a later date upon doing that investigation?
D. Symons: I would like to make an amendment to section (6)(1). I think that's the numbering since the numbering is a bit confusing here. Is it 5(6)(1), line 3?
The Chair: We're on section 5(6).
D. Symons: Section 5, and then (6)(1) under that? This is somewhat confusing.
The Chair: Hon. member, would you just take your seat for a moment, please. We're on section 5, with section 6 contained in section 5.
D. Symons: Then you'll have to enlighten me on how to word this amendment. Do I read this or just pass it on to the...?
The Chair: You may read it, hon. member.
D. Symons: In line 3, I wish to remove the "five cents" and substitute "three cents" so that the tax on jet fuel, part (6)(1) -- as it is in my paper here -- says: "A person who is a purchaser of jet fuel shall pay to the government at the time of purchase tax on the fuel at the rate of three cents per litre."
The Chair: Hon. member, it appears as though your amendment would be in order if you wish to proceed.
On the amendment.
D. Symons: I concur with many of the remarks that have been made by hon. members before. I think that we cannot go ahead with the figure that was currently there, because it is going to be detrimental to the airline industry in B.C. We've heard from the hon. member opposite that really it's not going to affect the airline industry. I have figures here from Canadian Airlines on what happened in Alberta in 1988. They paid taxes of $10 million on the fuel that they bought for their airline. The tax was increased in '88 to a larger figure, and in 1989 the tax collected by the Alberta government from Canadian Airlines was $6 million. Canadian Airlines arranged to purchase their fuel elsewhere, and that is precisely what will happen in B.C. if we increase the tax on jet fuel. Not only Canadian Airlines but all airlines will simply stop buying jet fuel here as much as possible, and the actual increase that the minister is expecting to get from jet fuel will not materialize, and we will end up damaging the industry in the meantime while we're trying in one way to squeeze a few more pennies out of them.
Canadian Airlines consumes 360 million litres of gas per year out of Vancouver International Airport, and that is a large sum of money when you translate that number of litres of fuel into the extra few cents. It only seems like a couple of cents, but 360 million litres will add up to $7 million a year more that we're taxing this industry when it's already besieged with financial difficulties.
They do not need this extra burden when they are already in financial difficulty, partly brought on through the increase in tax and partly brought on by the fact that you're introducing capital taxes on that industry. There is a limit, sir, to the load that we can put onto the industry. This is not a tax on fuel; it's not a tax on the airport; it's a tax on our Canadian airlines, and they can ill afford it at this time when they are in dire straits. I would highly recommend that this amendment be passed.
L. Fox: I rise to support the amendment on two factors. One, it's really apparent to me that the minister, I think by his own words, is not confident that he knows what the impact of this tax will be. There's another concern that I have. In the south you might be able to adjust this after the fact in a downward fashion without disturbing the industry. Take into consideration that we have ridership in many flights in the rural parts of this province that are at about 50 or 60 percent filled. I can assure you, if there's a negative impact through this extra 2 cents, and if that causes us to lose some routes and some flights, we're not going to be able to go back and say: "Sorry, industry, we didn't realize the impact. Now reinstitute those flights."
I support the amendment to keep the tax where it is until such time as the minister is confident that the province in general terms, but specifically in the northern part of the province, is not at threat -- that their service is not at threat by this increase in tax.
C. Tanner: On a point of order, my understanding is that the Chair has an amendment to the bill, and they haven't put the question yet. Doesn't the question have to be put now, Mr. Chairman?
The Chair: No, it does not, hon. member. It's put when everyone has an had opportunity to make a contribution -- at that time.
W. Hurd: I'd like to offer to the ministers the benefit of some research that I did on the weekend with respect to the 5 cent increase in jet fuel tax. I had the
[ Page 812 ]
occasion to meet with a pilot for Canadian Airlines, who advised me that the fuel calculations are so sensitive that a simple computer adjustment during takeoff and landing can save the airline hundreds of thousands of dollars in the course of a few flights.
I would also like to bring the minister up to date on a rather ambitious airline proposal for Bellingham, which is a few kilometres south of my riding. There seems to be a tremendous drain in passenger traffic from the Vancouver International Airport to airports immediately south. I fail to understand how this increase proposed is going to increase the competitive ability of the Vancouver International Airport versus the Bellingham International Airport, which already has Alaska Airlines flying in and out, and hopes to attract many more airlines.
In speaking to the amendment, I think that's it's perfectly in order. It recognizes the competitive ability of the Canadian airline industry. It recognizes that there's likely to be a reduction in passenger traffic at the Vancouver International Airport, thereby a reduction in revenues to government. My question to the minister is: has he actually calculated the loss of tax revenue on decreased passenger traffic versus the revenues that might be gained from this proposed increase in airline fuel tax? I'm not confident that those types of comparisons have been made. If they haven't been made, then I would suggest that there's a real concern that the travelling public are going to take airline flights from Seattle and Bellingham to a greater extent than they already are.
[5:30]
C. Serwa: Mr. Chairman, I rise to speak in support of the amendment as well. It's clear that the Minister of Finance also knows the incredible importance of the aviation business to the economic well-being of the province of British Columbia.
The minister has to recognize that while we're talking about aviation fuel tax, we're basically in a stall mode right here. From the strength of the feeling on this side of the House in both opposition party members, I think we're going to be here a long time discussing this particular clause. The feelings are very strong, recognizing the tremendous negative implications for the economy of the entire province of British Columbia.
The Minister of Finance knows full well that British Columbia and the port of Vancouver are very important as an access to the Asia-Pacific Rim. Air transportation is a vital element in that aspect of our economy in ensuring that business people can travel to and from our particular region.
I don't know that the minister is actually aware of what the impact in dollars would be to one fuelling of a 747 carrying something like 200,000 pounds of fuel. But for one fuelling of that aircraft, it increases the cost by approximately $5,000. It's a very significant increase in costs for international travel -- certainly the American airlines.
The minister keeps referring to a balance in this particular tax with the western provinces. We're different from the other provinces. A substantial amount of our business is north-south and certainly west of Vancouver with air transport. Air transport is far more vital and important, both internally and externally, to the province of British Columbia than it is to the other jurisdictions. Because of our geography in British Columbia, air transport is, in many cases, the only viable time-expedient method of transportation throughout the province.
I would like to say in conclusion, Mr. Chairman, that one of the strongest economic development tools we have in British Columbia is our transportation system. A vital and key element -- and it's recognized by the Ministry of Transportation and Highways through their small community airport program -- is aviation.
This tax on turbine fuel -- JP-4 jet fuel -- is totally unrealistic. The impact of that fuel tax can be enunciated.... The Minister of Finance is well aware of the representation by the fishermen's union just a few days ago. One of the reasons that fish are landed south of the border is because the taxes in this jurisdiction cost one dragger $50,000 to $60,000 per year, and that....
Hon. G. Clark: On a point of order. I think this amendment is out of order. It is out of order to move an amendment which directly negatives the intent of the bill. This would bring us back to almost exactly the current tax rate, which is 3.03 cents per litre. This reduces it to 3 cents a litre.
It is also out of order to move an amendment which reduces the Crown revenue. It's either out of order because it negatives the intent of the bill or because it reduces revenue to the Crown. Either way, it fails to meet the test.
The Chair: Hon. members, as you will recall, when I recognize the....
D. Symons: Point of order, hon. Chairman. I think that if you look at the bill, you'll see what they have done here. Jet fuel was contained under the aviation definition. They have now changed that definition, so we are discussing here a tax on a fuel type that wasn't defined before. Therefore this is not contrary to the intent. It's a new definition they've brought in.
The second one. If, as suggested by the minister, we are cutting the revenue of the government, then indeed we can't discuss anything to do with the budget. These are moneys that are not currently being raised. We are simply going to be....
Interjections.
D. Symons: I'll amend the amendment to the exact figure it was before, if that would make the hon. member happy.
Hon. G. Clark: On a point of order. You cannot amend a bill that affects the revenue of the Crown. To achieve the purpose that you would like is to vote against this bill, which you've indicated you will. If the bill was defeated, then in fact the existing tax would prevail. If that's your intent, you simply vote against it. You cannot now try to do that through an amendment when in fact you are either negating the purpose of the
[ Page 813 ]
bill entirely or you are reducing Crown revenue, because you've suggested the amendment lower than the existing tax rate.
C. Tanner: On a point of order, we are not negating a tax that hasn't already been raised. So how can the member make that point?
The Chair: Thank you, hon. member, the points are all well taken.
I would just like to remind members that the Chair perhaps was in error when I suggested that the amendment was in order. However, in consultation with respect to the applicability of this motion, it is out of order because it's contrary to the principle of the bill in second reading. I would so order.
C. Serwa: I should suppose that my comments are directed to this section of the bill. I was just concluding my remarks when the Minister of Finance stood up with his point of order. I was referring to the economic development tool of transportation that we have in the province, and air transport is certainly a vital element in that.
I was pointing out that our competition was not from the other western provinces but was fundamentally north and south from our American neighbours, which is a real and vital concern. The final thing I want to point out is the extent of that type of competition. Just relating briefly to the presentation made by the fishermen's union, it was enunciated quite clearly that one of the major reasons for the landing of the British Columbia catch by B.C. fishermen in the United States, Mr. Minister of Finance, was the $50,000 or $60,000 fuel tax saving that they could get by purchasing diesel fuel in the United States. That's an example....
Interjection.
C. Serwa: I know, but we're in a stall mode, Mr. Minister.
Jet fuel is even much broader in its economic implications. I stand opposed to this section, and I would ask the minister to actually consider the deletion of that.
L. Fox: I want to just make one final plea to rural members of this province on all sides of the House. I want you to give some really honest and soul-searching time to explore how this is going to impact on people within your ridings with respect to business and the health and social services that you have difficulty achieving. Given the fact that this minister has not done his homework and does not know the impacts of this tax, I ask that those rural residents give serious consideration to defeating this bill in order that it might give time to the minister to do his homework before he brings it back to us.
R. Neufeld: I would also like to speak in opposition to the increase of this tax. To the minister, if you say that the tax is now the same as Alberta and Saskatchewan, then that's fine. What you have to take into the equation is the cost of the product to start with, because that is the driving force as to whether they're going to buy the product from British Columbia or not. If the product's cheaper in Alberta and you put a 3 cent tax on it, that's fine. But it will be more expensive in British Columbia, as it always is, and that's a lot of the problem that you have in cross-border shopping south here. We have a problem with cross-border shopping in northern British Columbia. In Fort St. John, where I come from, they go over to Alberta to buy gasoline for their cars. The tax structure is about the same for gasoline; British Columbia and Alberta are about the same. But it's still cheaper in Alberta, because it's closer to the source.
It will have other effects in the north, on top of what my colleague has said here with health care travel costs. There's going to be an increase in cost to people who have small industries in the north that fly a lot of people into the mountains for hunting or fishing or just plain recreation by helicopter. An awful lot of that happens in the north; helicopters are used quite extensively in the recreation and tourism industries. So that's going to have a tremendous effect also. And that's not just in my constituency. The minister should look closely at the whole province and see that it's probably done quite extensively all over.
The other part, and the rebound effects, of increasing the price on jet fuel is what happens to industry. I can tell you that in my constituency, and I'm sure it happens all over, a lot of the large oil companies use a tremendous amount of jet fuel in turbine-driven aircraft and helicopters to service remote sites. It's done constantly. In fact, it's a way of life in the north that people will live in communities and fly out 100 or 300 miles a day to remote sites to service those wells. That will cause an increase in their costs, which will come back to the consumer through higher costs for their natural gas that's produced or the crude oil that goes to make the jet fuel in the first place.
The other problem the Minister of Forests should realize is that in the north, and probably in the whole province -- I will speak specifically about the north, because I'm familiar with my constituency -- there's a cost to forestry. They use an awful lot of helicopters; Environment uses an awful lot of helicopters; Hydro uses an awful lot of helicopters to get into remote sites. That's a direct cost that's going to come right back to government.
The other thing is that if they start tanking fuel out of other provinces, it's going to affect the revenues you are going to receive from taxation from people who work in refineries -- on fuel that's railed. It's going to affect B.C. Rail revenues, because fuel is now railed -- if the minister is not aware -- from Edmonton to my constituency, specifically Fort Nelson and Fort St. John. If they buy that fuel in Alberta and fly into British Columbia, then all of a sudden that revenue has gone from B.C. Rail.
There's a tremendous impact that could take place, and it's worth looking into and being a little more serious on what could happen and not just say we can generate another $16 million with the 2 cent a litre increase on jet fuel. I would hope that the minister
[ Page 814 ]
would look again at what this increase could do to the economy of British Columbia.
Hon. G. Clark: I just want to make a comment that I think the members are grossly exaggerating this tax increase. Again, the Saskatchewan tax is 7 cents a litre; Alberta is 5; ours is now 5. I want to assure members that we have done our homework. I don't take kindly, and I don't think any member should, to insulting the Ministry of Finance staff, which are among the best staff in government. That work has been done. We are very confident. I am confident that there will be little or no impact. That's why we're bringing this in.
[5:45]
I simply want to assure members that we are prepared to review this a year from now if there are problems. There will not be problems; that's my conviction. That's my staff's view; that's why we're doing this. It will raise $16 million in incremental revenue. If there are problems, we will review it a year from now.
So don't misconstrue my sense and my offer to you to review this a year from now. If there are problems, we'll adjust it with no lack of confidence on our part that this will have little or no impact. It will not; we are very confident of it. I'm puzzled by this lengthy debate on this matter, and I want to make it very clear that this is a modest enhancement of revenue which I think all members should support, in light of the fiscal crisis we're faced with and the financial mess that your party left the province in.
W. Hurd: We've been assured on this side of the House that the airlines will pass this tax increase on to passengers in the form of higher fares. This is an example of a tax where comparisons to the rest of Canada are totally unrealistic. We're talking about vacation travellers to the Pacific Rim; we're talking about north-south traffic. This is an example of a tax in which we're competing with the western United States and the Pacific Rim. It's totally unrealistic to suggest that we're not going to suffer a continued erosion of passenger traffic to airlines in the United States.
All we're asking for, before we see a 5 percent hike in jet fuel tax, is for the minister to do his homework to find out how much of an erosion we're seeing in passenger traffic from the Vancouver International Airport, and whether this tax is going to have the effect of driving more passengers south.
What is the revenue loss of that loss in passenger traffic versus the $16 million which is going to be collected in a jet fuel tax? That's a realistic question to ask the minister. I'm not convinced that we've been given an answer. Those types of comparisons are the types of comparisons that, from a tax standpoint, we have to start making in this province, or we're going to drive business -- airlines and passengers -- out of this province.
D. Symons: I hope this might be the last comment, as I'm sure the minister, if he were here, would hope that this is the last comment as we move on. He was concerned that now we're levelling off with the other provinces to the east of us.
This is again from Canadian Airlines in 1990, when they had adjusted their tax there. Canadian Airlines said: "We have increased our uplifts in B.C." That means they were flying more planes filling up with gas in B.C., where the present tax rate on aviation fuel is 2.81 cents per litre. At that time, because Alberta's tax was made higher, they started fuelling more in B.C. than they did in Alberta. We will lose that tax advantage if this thing goes through. What this tax will do is that we're not only going to lose the tax on it, but we're also going to lose the sale of the product.
Section 5 approved on the following division:
| YEAS -- 22 | ||
|---|---|---|
| Petter | Marzari | Cashore |
| Pement | Beattie | Lortie |
| Lali | Miller | Smallwood |
| Hagen | Clark | Zirnhelt |
| Copping | Ramsey | Hammell |
| Farnworth | Evans | Streifel |
| Randall | Kasper | Brewin |
| Janssen | ||
| NAYS -- 17 | ||
|---|---|---|
| Farrell-Collins | Reid | Mitchell |
| Cowie | Gingell | Stephens |
| Hanson | Weisgerber | Serwa |
| Tanner | Hurd | K. Jones |
| Symons | Anderson | Dalton |
| Fox | Neufeld | |
Sections 6 to 12 inclusive approved.
On section 13.
J. Weisgerber: I don't want to extend the debate unduly, but it seems to me that the government is sending out a wrong message by putting a time limit on the tax exemption for clean-burning fuels. In my area we use a lot of propane. It's an investment of a couple of thousand dollars if you're going to put a propane conversion. And there are no government grants left for propane conversion. If you say to a person "You are going to start being taxed in 1997 on propane," I think you'll see a significant reduction in the number of people who choose to convert either to propane or natural gas.
I would compliment the government on at least giving people an assurance that there is a five-year time-frame -- I think that's useful. But I think the government should signal, and I think that the Minister of Environment surely would agree with me, that one of the most important things we want to achieve in British Columbia is a large-scale conversion of vehicles to clean-burning fuels. I really believe that the government doesn't even need to look five years down the road.
[ Page 815 ]
Perhaps it will be a matter that this government won't have to worry much about anyway. I don't think that the province has to worry about garnering that last bit of revenue from people who use clean-burning fuels. I can't think of any other reason that you would want to say to people: "In 1997 we're going to start taxing you."
I would encourage the government to say, "It's our policy never to tax clean-burning fuels," and stand behind that and encourage people to convert. It's really worthwhile. If you have to pick up a revenue, you've already found there are a myriad of other sources of revenue -- the minister has already found most of them -- but the rates can, in fact, be increased even further. So it's a genuine plea. I'm not trying to spin out the debate. I think it's a serious issue, and I think the government is sending out the wrong message.
Hon. G. Clark: To respond to the member opposite, this is considered to be adequate to convince people to make the necessary investment -- amortize it over five years. Obviously we're concerned about clean fuel. This is an inducement to do that. It gives a five-year time horizon; obviously we'll review it at that time. Giving a five-year certainty is what's required for people to make the investment and get the pay-back, and so the tax exemption for that period. I think sunset clauses are, in fact, good public policy rather than what the member opposite thinks.
J. Weisgerber: Unless I hear something more, my final comment would be to again refer to the budget document in which the government says: "After consultation with affected groups" -- I'm not sure who those were -- "legislation will be introduced to phase in the tax rates on these cleaner transportation fuels...so that ultimately the rates will be equal to the tax rate on regular unleaded gasoline...." My point is that I don't think that's a progressive move. Today a new car buyer may make the decision, based on a five-year holiday, to invest in a conversion. I question that the same decision will be made in 1994-95. I think it's a bad policy decision.
C. Serwa: I think there's a very big issue in section 13, Mr. Chairman, and I'm pleased that the Minister of Environment is here paying close attention to the debate on this particular section, because it's his ministry that is acutely concerned with air pollution. Air pollution in this province is a very serious matter, especially so in the lower mainland.
Many years have been spent encouraging the conversion to natural gas, because it is a clean-burning fuel in abundant supply, Mr. Chairman. Many millions of dollars will be expended over the next few years to try to clean up vehicle exhaust emissions in Vancouver because of the negative impact in the Fraser Valley. It seems totally inappropriate from a government that has from the outset for political purposes professed a concern for the environment to go forward with this.
At the present time, Mr. Chairman, we have the automobile manufacturers actually producing -- for the first time ever -- vehicles designed to burn natural gas. I would suggest that this sunset clause be removed until that time when we have certainly an abundant number of vehicles using natural gas fuels; then at that time, with revenue decline, I can see the reason for it. But at the present time it's a strong deterrent against clean-burning fuels and a healthy environment.
D. Symons: I concur with the concerns the other two members have expressed over this section in here. Having a sunset clause, if we follow the minister's reasoning through, says that you will amortize any expense they put out now over the five-year period. But what's the point of it? If they know it's going to cost the same in a few years, you're saving a little bit now, you're amortizing, but there's no saving whatsoever to even start it today, let alone the next few years. So you're removing any incentive people might have to move into cleaner fuels than we're currently using in our vehicles. That is not good for the environment at a time when automobile traffic is increasing. We should be looking at some way of cutting down on the pollutants coming out of the tailpipes of those vehicles, and this will not do it. Section 13 approved.
F. Gingell: I had earlier decided that I wouldn't speak on this subject, because as everybody knows, I've been associated since its birth with the only company that at the present time markets gasohol fuels in this province. But I'm now separated; I am no longer a director, and I am going to stand up and speak on this with a few words.
Mr. Minister, I would like you to recognize that Environment Canada, after doing exhaustive studies -- and believe me, they are exhaustive because major oil companies were most strongly opposed to the environmental choice, the three doves logo, being licensed to gasohol fuels.... The use of ethanol-blended fuels are not exclusive to the company that I was associated with.
There really is an environmental advantage. When we use ethanol-blended gasolines, we are burning less gasoline, and we are putting less carbon in the atmosphere. We are taking more carbon out of the atmosphere when the grain is being grown to make the ethanol, than is put back into the atmosphere when the ethanol is burned. It really is something that is worthwhile and encouraging. The federal government has finally started to show some leadership in this respect. I really am very disappointed that the provincial government is failing to follow their example. Sections 14 and 15 approved. Title approved.
Hon. G. Clark: Mr. Chairman, I move that the committee rise and report the bill complete without amendment.
Motion approved.
[ Page 816 ]
The House resumed; the Speaker in the chair.
Bill 8, Motor Fuel Tax Amendment Act, 1992, reported complete without amendment, read a third time on division and passed.
Hon. G. Clark: I wish everybody a nice long Easter weekend. Come back refreshed and hopefully a little tighter. With that, hon. Speaker, I move adjournment.
Motion approved.
The Speaker: I too would like to wish all hon. members and their families a very happy Easter.
The House adjourned at 6:10 p.m.
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