1992 Legislative Session: 1st Session, 35th Parliament
HANSARD
(Hansard)
TUESDAY, MAY 19, 1992
Afternoon Sitting
Volume 3, Number 8
[ Page 1631 ]
The House met at 6:03 p.m.
Hon. G. Clark: Hon. Speaker, I call committee on Bill 9.
SOCIAL SERVICE TAX
AMENDMENT ACT, 1992
The House in committee on Bill 9; E. Barnes in the chair.
Section 1 approved.
On section 2.
L. Stephens: What type of services are not covered by the Legal Profession Act or section 15 of the Notaries Act?
Hon. G. Clark: You've asked it in a kind of negative way. Let me give you the alternative positive.... I'm not sure those are the appropriate terms, but let me put it this way.
Legal services are defined by this section as those "...services that come within the meaning of the practice of law under the Legal Profession Act," and services described under the Notaries Act. As a result, the term legal services includes virtually all services provided by lawyers and notaries, such as real property conveyance, preparation of wills, general corporate law, civil and criminal litigation, except when such services are performed by employees as part of their employment duties to their employer; and legal aid, of course, is also exempt from the tax.
The definition also includes the authority to prescribe certain services as legal services in the event that it gives us a way in which we can expand the definition should we need to. The purpose of the bill is to tax all legal services, regardless of who provides them.
Section 2 approved.
On section 3.
L. Stephens: On section 3, the non-jet aircraft, is this reduction from five to three years for non-jet aircraft to balance the exemption for jet aircraft? It seems as if the commercial operators of non-jet-powered aircraft are hit twice by the government: by higher fuel taxes and by the maintenance of provincial tax on their aircraft and aircraft parts. Could you explain that a little bit, please?
Hon. G. Clark: No, I don't think that's correct at all. I'm just trying to get the technical explanation. Essentially, the jet aircraft.... We had a five-year formula when we tried to tax interprovincial jet aircraft. That was not workable, as I mentioned earlier. This is for everybody else. In terms of convenience and ability to apply the tax, it's proposed that three years is the appropriate time. It doesn't really expand the tax in any way; it's just a reduction of the amount of time -- the formula -- that is most appropriate. The five-year formula never worked for jet craft. This is a three-year formula applied essentially to non-jet aircraft.
F. Gingell: Does this basically mean that the amount of tax that applies to a particular aircraft will now be paid over three years rather than five years? You'll be paying 140 percent, or whatever it is, of the amount you would previously have paid.
Hon. G. Clark: Only non-jet aircraft used interprovincially will be three years instead of five; that's correct.
Section 3 approved.
On section 4.
L. Stephens: This section has the same effect as section 3 but is applicable for prescribed aircraft parts. For non-prescribed parts the tax will be applied for 12 months. It seems that most of the non-jet aircraft parts will be taxed for three years, but some non-prescribed parts will be taxed for only a year. Why are some of these parts taxed for only a year, or alternatively why are some taxed for three years?
Hon. G. Clark: Essentially this is a non-issue. It's not a major issue, but I'm advised that it is correct. The three-year period is for major overhauls -- like engines that are rotated. What may be taxed on a 12-month basis are very minor things. That's correct; there is a differentiation. But again, we're only dealing with non-jet aircraft interprovincially and internationally operated. We're not dealing with large numbers here; we're capturing major transactions here.
Sections 4 and 5 approved.
On section 6.
Hon. G. Clark: I move the amendment to section 6, notice of which has been given to the Chair and to all members, and I ask that we take the amendment as read, rather than have it read in the House here.
[SECTION 6, in the proposed section 2.01 by adding the following subsections:
(2.1) If
(a) the purchaser or recipient of legal services subject to tax under subsection (1) resides, ordinarily resides or carries on business outside British Columbia as well as in British Columbia, and
(b) the legal services are connected in part to a jurisdiction other than British Columbia,
tax is not payable under subsection (1) on that portion of the purchase price which relates to legal services that are connected to the other jurisdiction and not to British Columbia.
(2.2) For the purposes of subsection (2.1), the purchaser shall
(a) make a reasonable estimate, subject to the regulations, of that portion of the purchase price which relates to legal services that are
[ Page 1632 ]
connected to the other jurisdiction and not to British Columbia,
(b) make and retain a record of the basis on which this estimate was made, and
(c) if the person who provided the legal services is required by this Act to collect the tax payable on those services, provide a copy of the record referred to in paragraph (b) to that person.]
On the amendment.
L. Stephens: The wording of this section, especially the parts dealing with the calculation of the tax payable if legal services are provided both in and outside B.C., is unclear. How is the government going to apply this tax -- consult with the legal profession? Section 6(4) states that the tax is payable when the purchase price of the legal service is paid or payable, whichever is earlier. What happens if the client of a lawyer pays only part of the bill or does not pay at all? Is the lawyer responsible to remit the tax to the government even though he or she has not been paid? The wording of the section suggests the lawyer is responsible and could be out of pocket if the client does not pay. Could you explain how that would work?
Hon. G. Clark: The lawyers are treated exactly the same as everybody else under the Social Service Tax Act; they are required to collect at the time of sale. But if they don't collect it, they are still required to remit it, so the onus in that respect is on the person selling the service, in this case, or selling the goods in the case of Eaton's or Woodward's or somebody else. It's exactly the same principle for the sales tax.
L. Stephens: So you're saying if the lawyer is not able to collect on the bill, then he is out of pocket for the tax?
Hon. G. Clark: That's correct, because he's required to collect it from the person purchasing the service.
L. Stephens: Section 6(5). It makes the purchaser of the legal services responsible for paying the tax if the legal services are provided outside British Columbia.
An Hon. Member: Are we dealing with the amendment?
L. Stephens: Yes, this is the amendment 6(5).
The Chair: Hon. member, are you speaking to the amendment to section 6?
L. Stephens: This is 6(5) as opposed to 6(4), which we were discussing before.
The Chair: Yes, the subsection.
L. Stephens: It makes the purchaser of legal services responsible for paying the tax if the legal services are provided outside British Columbia. With the proposed amendment to the bill, which only requires the tax to be paid on legal services provided within British Columbia, will this section have to be amended?
Hon. G. Clark: No, this is a different purpose. If a major company in British Columbia purchases services to be used in British Columbia from, say, a national law firm, then it shifts the onus onto the purchaser to pay the tax; in other words, to avoid tax avoidance.
[6:15]
J. Weisgerber: If I understand this, the minister is suggesting in section 6 that if a national company or a large British Columbia firm buys legal services across the country, it is then the obligation of the purchaser to estimate the amount of those services which apply to British Columbia. Is that correct?
Hon. G. Clark: That's correct.
J. Weisgerber: The legislation also requires them to maintain a record of those transactions. Is there any stipulation of time? Is there any process? Is there any standard way of accounting for this required by the act?
Hon. G. Clark: As you know, this is an amendment to the Social Service Tax Act. The current act requires everybody to keep records for some six years, and it requires permission be sought from the government in order to destroy any records before that time -- or maybe even after that time.
J. Weisgerber: Perhaps the minister could give some indication of what kind of records. When a company makes its declaration, it has clearly decided, for example, that 20 percent of the bill be applied to services that were used in British Columbia. I would assume that you would require, then, some supporting documents if you're not going to accept the declaration itself but require the person receiving the services.... Has there been any discussion at all on what kind of documentation beyond the actual declaration you would require?
Hon. G. Clark: No. My advice is that this is a normal and reasonable accounting process where in fact we do regular social service tax audits, and the obligation on the part of the purchaser of those services is to keep those records and to be able to justify that they are reasonable and within the normal audit and accounting procedure. If they say that this bill is 20 percent applied to British Columbia, they have to keep supporting documentation to justify it in the event of an audit.
This same kind of statute exists in all tax questions, and businesses are routinely audited in British Columbia. There is a great deal of ongoing debate between businesses and between my branch as to what is appropriate pay. There is recourse through appeals, which I receive a lot of as minister, and also revenue gain to the government as a result of audits. This is
[ Page 1633 ]
again in keeping with the existing statute and other tax statutes.
J. Weisgerber: Having received a couple of those audits over the years, I know that they can sometimes be uncomfortable and difficult to deal with. When we're entering into an area where taxes haven't applied before, I'm not certain that there will be the same kind of precedent that you could use that's been applied to services or goods. Up till now we've basically been dealing with taxation of hard goods. It's pretty easy to decide how much of it got shipped to the store in Kamloops and how much went to the Medicine Hat branch, but I would suggest there will be areas where it will be much less clear with legal services.
What I'm suggesting is that perhaps the ministry should develop some kind of a recommended process for keeping records, or give those people who are going to have.... Rather than everybody in British Columbia sort of pioneer their way through this new requirement, perhaps it would be possible for the ministry to give some recommendations.
Hon. G. Clark: I think that's an excellent suggestion, and we'll certainly consider it and try to put it into one of the next bulletins that we put out regularly.
Amendment approved.
On section 6 as amended.
F. Gingell: I just have one subject that I'd like to speak to. I spoke to this bill at some length in second reading, but there was one particular subject I covered then that I really do believe, from a matter of equity and fairness, needs to be restated. It is the problem that, as I understand it, the Ministry of Finance intends to carry on in the future the present policy that the first dollar collected on any sale is provincial sales tax. That is just beyond my comprehension. A small lawyer working away renders a $500 bill. There is $35 GST charged. There is $30 social services tax charged, and all the lawyer in my hypothetical case is able to collect from the customer is, say, $25. The whole of that $25 is applied to provincial sales tax. The federal government probably believes that the $25 is also applied to GST; of that, I'm not quite sure. It is inequitable.
If an amount of money is collected against a legal bill, a calculation can easily be made on how much of that is provincial tax, how much is federal tax and how much is the lawyer's remuneration so that a proper allocation can be made. I understand that. This is something that I do ask them to check out. They may even consider that the amount paid is applied to provincial sales tax before it is applied to disbursements. Lawyers, as you know, usually make certain disbursements. They may have paid for a search or registration fee, or for telephone calls, or whatever. So when they make up their billing, the billing is the fee for their services, plus the disbursements, plus the two levels of tax, provincial and federal.
It just seems to me completely inequitable if the provincial government considers that the first dollar collected is for provincial sales tax. At the very least, they certainly should consider that the first dollars collected are in payment of the disbursements which the lawyer has paid out of his own pocket. I really do ask the minister to consider very carefully the fairness and equity of the manner in which his department officials assess and collect provincial sales tax in this particular instance.
Hon. G. Clark: The principle behind it, which is not unique to this administration, is that when a business person or anybody else collects a social service tax on behalf of government, on behalf of the people of British Columbia, it's not their money. It's held in trust by that business person or corporation for the government. As you know, if you establish that principle, trust funds are then moved to the front of the line, because it's not their money. They're holding it for the government to do its business. That's why the tax laws in this province have the tax as the first obligation of the corporation or business person, because it's not their money; they've collected it on behalf of the government. That's the principle that this bill extends; it's the principle that is in all Social Service tax legislation. It's simply extended here to lawyers, and I don't think we should treat lawyers any differently than we treat retail merchants, or the like, in this respect.
C. Tanner: Mr. Minister, I have three letters from three lawyers in my constituency, two of which have been forwarded to you and one to the Premier.
Hon. G. Clark: Are they for or against?
C. Tanner: I'm afraid they're not for it. What they're saying in each one of their letters is that, for different reasons, the very thing that you say this tax is for is.... In fact, what you're doing is negating what you're trying to do. I'd like to quote from all three of them. The first one is from Mr. Thomas M.R. Irwin; his law office is situated in Sidney. He says:
"I have had an opportunity to read Peter Leask's newsletter of April 15, 1992, and I am writing to the Law Society taxation committee to briefly advise you of the affect the provincial government sales tax on legal services would have on my clients. I am a sole practitioner maintaining a general practice in Sidney, B.C. My client base is made up of predominantly middle-class persons who seek my advice with respect to matters such as wills, estates, property sales and purchases and perhaps company information in respect to small businesses.
"I heartily agree with Mr. Leask's comments that legal services, and in particular the services I render, described above, are certainly not luxuries to these people; and I consider that I am providing an essential service to them in order to advise them and assist them in their day-to-day lives. This tax will most certainly discourage a number of persons out of my client group which are of middle and low income from seeking my assistance as a result of this additional cost to them."
The second one is from a company called Scott-Moncrieff and Co., which again practises in Sidney. This one was addressed to the Premier:
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"We wish to set out our concern and objection to the new 6 percent sales tax on legal fees. Mr. Clark has stated that the purpose of this tax is to enable the government to fund legal aid. We feel that whatever government is in power, it is important to ensure that the taxation system is fair and equitable. We feel that this tax does not meet this test and therefore leads to a lack of respect for government as a whole.
"It is not fair and equitable because the principle is not applied to other services paid for by government. If you impose this tax, then you should have a similar tax on restaurant meals to pay for school lunch programs for underprivileged children. You should have a tax on medical and dental services to pay for the medical and dental services provided to those unable to afford such services. You should have a tax on private day care facilities to pay for the cost of public day care facilities.
"Legal aid is just like...other services funded by government. There is no reason why legal services should be singled out in this way for an extra tax. The legal aid system should be funded by general revenue, and the population as a whole should contribute to the cost of these services.
"We have had a" -- great many -- "angry comments from our clients on this matter. Clients, for example, such as a young couple who are purchasing a new home or an elderly couple seeking legal services for the preparation of a will, become extremely indignant at having to pay an extra 6 percent in order to fund the criminal defence of an individual charged with importing or selling illicit drugs or being involving in a violent criminal act. These are ordinary citizens, and they have no obligation to fund the criminal legal aid system. The obligation to fund such a system rests with the population as a whole..." -- and not with one single group. "We therefore urge you to reconsider this tax, which both we and our clients feel is totally unfair."
The third one is even more pertinent to the subject. It's from McKimm and Lott. It's over Mr. McKimm's signature, and it's addressed to myself.
"Re: Bill 9, Social Services Tax Act Amendments.
"I am writing to state my opposition to the proposed amendments to the Social Services Tax Act, amendments contained within Bill 9 as advanced by this current administration. As you are aware, the bill proposes to raise needed funds for the legal aid plan through an application of tax of legal fees. Further, it appears to be the position of this government that this is a tax on the wealthy to assist those not able to afford essential legal" -- services.
"With respect, the bill will effectively be a tax on those least able to pay costly legal fees. Certainly it is not a tax on lawyers. Nor is it a tax on corporations who write their expenses off as an allowable business deduction. Rather, it will again be a tax on the working middle-class family who requires essential legal services. A working mother who attends to see counsel to assist in the resolution of the issues attendant on the separation from her husband, including a division of assets and support for the children, will now be required to pay an additional 6 percent to obtain a just determination of the issues. Legal services are costly enough already without adding to the cost a tax levy.
"I agree that the provision of a broad base of legal services for those not able to pay is essential. The new tax, however, is not dedicated to that end but rather to general revenue. There is not legislation pending which assists those who are not able to afford legal fees. Equal access to justice is a laudable goal. This tax will simply deprive those least able to afford counsel to pursue their rights and remedies of any hope of a fair and just determination."
Mr. Minister, what all three of these legal firms are telling you is that you've specifically picked on what appears to you to be middle-or upper-class and rich clientele able to pay the tax. In fact, you're hurting the very people you want to aid. Would the minister like to comment on that?
[6:30]
Hon. G. Clark: First of all, those are obviously thoughtful comments from people who have written to you, and I don't dismiss them. I can say without any hesitation that I haven't had a single lawyer write to me commending me for this bill. I say that in spite of the fact that there are a couple of lawyers present here who....
It's obviously a tax. Any tax is not popular, and this is no exception to that. But let me say that...
Interjection.
Hon. G. Clark: The other professions in the province are probably concerned as well, because it is a tax on a particular profession.
I guess I'd like to say a couple of things philosophically, because in some respects there's a philosophical argument there: that we shouldn't tax lawyers to pay for legal aid. The problem is, I'm not sure that we shouldn't do more of that, if you want to engage in a philosophical discussion. One of the problems I think we have, by and large, is that there's a sort of false dichotomy that's developed in our society where people pay taxes and someone else gets the benefit. I think that has undermined our system of government where people feel that they're paying and paying and someone else is benefiting and benefiting. In fact, our medical system benefits by all people.... The roads, sewers and streetlights, and the police, the firefighters, ambulance attendants, those people who provide valued services to society, somehow they're not viewed as benefiting individuals.
I think that to the extent we can, it may be desirable to say: "We are raising this tax, and it's going for this purpose." If people see that and think that the government is acting efficiently and is not wasting their money, and that there will be a re-establishment of support and a willingness to pay for certain services, provided they trust the government is not using their money for other nefarious purposes.... I realize that's a big challenge, because people can always point to waste and inefficiency in government and can point to anecdotal evidence of that. That's something we're working hard to try to fix, to try to get more efficient, to try to drive some cost efficiencies in the system.
In this respect, I guess the question is: is it acceptable to link a tax to a service? I'd say yes. We have medical premiums, and they are for medical services. We have school property taxes, and not everybody pays those. They go to pay for the education system. One can argue, of course, about that. That's a whole other can of worms that we could get into at some point. All I'm saying is
[ Page 1635 ]
that there are taxes that fall disproportionately on one group or another in society, and they do pay for different services. This is no different than that.
From our point of view, raising $35 million from other sources could have been disproportionately applied. If we had raised the sales tax, that would have had a disproportionate impact on lower income people. If we had raised income tax, that has a disproportionate impact on working people, because the tax system is not as progressive as it should be, in my view. If we had done other kinds of tax.... Medical services premiums -- which were going to be raised by the previous administration, which we stopped and froze in this budget -- are very regressive; and we could have raised those, probably with impunity, because people have a sense that that's going for health care, and that makes it good, but in fact it's very regressive.
This tax, while by no means perfect -- while admitting that it's not one that I would want to necessarily bring in -- is, in an ideal sense, a modest extension of the sales tax to one particular service. That service is a cost driver in our budget. I mean that in a major way. We're spending $75-odd million on legal services and legal aid this year, and that doesn't count the legal services paid for by government generally for all the myriad of legal services we require.
It's a cost driver in our system. We have to look at ways of controlling those costs, but at the same time, we felt some revenue was required, and we moved in this direction. Those same individuals.... I don't know whether they were as opposed to the GST; I didn't hear the lawyers arguing against the implementation of the GST in that respect. I realize that another 6 percent on top of that is difficult. It's not one, as I said, that we really want to do, but it's one that we were forced to do given our fiscal situation and given the costs of legal aid.
C. Tanner: I know that side of the House was surprised when they got into the Legislature and found us here instead of the other guys, but more and more you're starting to sound like those fellows. You're making arguments that sound exactly like the Socreds did the last time, and they got thrown out for the simple reason that they were doing the things that you're saying: we'll tax this person for this, raise this revenue for this service. That is not an argument, and of all people to make that argument, the NDP have got to be the last. They've consistently said throughout their history in Canada that they will spread the tax load so no one constituency is hurt more than another, or so no one group of people is hurt more than the other -- and here you're doing exactly that. In the minister's own words, you're not even doing it fairly.
If what you wanted was to raise money for legal aid, why not tax all professions? Why pick on this particular profession? It doesn't make sense. You've defeated your own argument. There is no argument for this tax on this profession. As my friend from Scott-Moncrieff and Co. said: "We feel this tax does not meet this test and therefore leads to lack of respect for the government as a whole." That's what's wrong with it. I would suggest that the minister should withdraw this tax. If he wants to come back next year with a tax on all professions, I for one would probably endorse it. At least the GST did that; everybody was taxed and everybody had to pay.
Hon. G. Clark: I know that lawyers are saying that this is an unfair tax, but....
Interjection.
Hon. G. Clark: I haven't had thousands of letters from those other than lawyers saying that. Let's put it in perspective. At least 50 percent of legal bills are paid for by businesses -- mostly large businesses. Of the other 50 percent, there's a disproportionate payment from those who can afford it. If you're very low income, you get legal aid. This is not a regressive tax.
If lawyers are concerned about the fact that middle-income people can't afford it, then I suggest they cut their fees by 6 percent. They are in fact one of the highest-paid professions in British Columbia. I hope that in the competitive marketplace in which they're operating they will not pass on this tax to their consumers. I hope and expect that they will do that. I would think that the members opposite might counsel lawyers to try to absorb that, given the kind of income they're receiving.
I want to make the point for members opposite that this is not a regressive tax. In fact, it is a progressive and modest tax. I think it's defensible, given the other options available to government to raise the revenue.
C. Tanner: It is a regressive tax. It's even worse than that; it's a selective tax. You've picked a target and you've hit them to pay for a service which is available to everybody. Everybody should pay or nobody pays. You see lawyer, you see rich -- we'll tax them. Why do you make that assumption? Two of these gentlemen who wrote told you that they have very modest practices and that many of their clients have very little income. They don't overcharge them. They charge them a reasonable fee for the professional services that they're offering. Why should they pay, and not every other profession? Why do you select lawyers to pay for a legal aid service for anybody who needs it? There is inconsistency here, Mr. Minister. Tell us why you've picked on lawyers. You haven't explained that to the House yet.
Hon. G. Clark: I have explained it. I won't explain it again, but let me say this. We have a competitive marketplace. It's a free market, and lawyers.... It's not some divine right to practise, or for people who are compelled. This is a free marketplace, so I would hope that individuals of modest means will shop around for a lawyer who is providing reasonable prices, who is perhaps absorbing that 6 percent cost. It's very competitive among lawyers right now. There are a lot of lawyers out there in British Columbia. It's very competitive, and that is a way of moderating any impact of increased fees. I'm quite hopeful that where there is an ability to pay, lawyers will pass it on, and where there isn't an ability to pay, they won't pass it on. I think that is a reasonable position. I'm quite hopeful that lawyers,
[ Page 1636 ]
while not happy with this, will be able to accommodate it as they did the GST.
C. Tanner: I'm going to have one last go at this because the minister, in his own words, admits that this is not altogether the best way to tax people. He's trying to specifically target a group not because they're lawyers, but because he thinks they're making too much money. He's trying to identify a group of people who he thinks can pay and he says: "If you don't like it, don't pass it on; absorb it." Why should lawyers absorb it any more than any other profession? When they imposed the GST, you heard a general outcry because it affected everybody. Everybody paid. In health care, everybody pays. Here you've selected one specific group of people and said: "You pay more than anybody else. You can pass it on, and if you don't want to pass it on, eat it, friend. Eat it." That is not the way you do it. You tax everybody so that everybody pays and everybody can benefit who needs to.
Hon. G. Clark: Thanks very much, and I appreciate being counselled to pass this tax on to all professions, but it was our judgment that that would have been problematic in British Columbia today, so we chose only to pass it on to lawyers where we have a serious cost-driver problem in our budget process.
C. Serwa: I had pledged, with reflection to the government, that if they did something right and appropriate I would applaud them. In this particular case, I certainly cannot applaud them, because they have done everything wrong here. What we have on section 6 is nothing more than an NDP GST. That's what we have here -- an NDP GST, from a party that stood in solid opposition to the federal government with their GST. Here's the first step in harmonization. The minister has to get real on the realities of life. The lawyers will not and cannot eat the tax. You know who will be paying for the tax. It's you and I and every other citizen in the province of British Columbia. That's the reality.
This particular section is inexcusably inappropriate and ill-conceived. Look at mediation services, for example, hon. Minister. They're provided by a number of sources. Mediation services, if the legal profession provides them, we tax. The other sources do not. This is unfair. Obviously the collection ability is very difficult in a number of areas with legal services. To ask the lawyers to accept all the lost profit, overhead, GST and the provincial sales taxes is asking a bit much. Counselling services are very important, whether it is young offenders or in a marriage situation. All these services are going to be taxed, and for what purpose? Every person in the province is going to have to pay substantially more.
When you look at ICBC, for example, and the horrendous rate increases that your government is encouraging them to take, to share the heavy burdens on your government, when you look at the legal services aspect of that, you're doing nothing more than increasing the cost of ICBC's doing business. You're doing nothing more than increasing the cost to every insured motorist in the province. It goes on and on, whether it's legal services or any of the Crown corporations.
Section 6 is going to increase the cost to everyone. It certainly is going to increase inflation, and it's not going to do anything at all for the economy. You're singling out one profession. It has been pointed out that that is very wrong indeed. If you're going to do it, if your party is committed to doing it, then go for harmonization of the GST. You're affecting only one profession. I think it's very wrong. I agree with the member of the official opposition that this should be withdrawn, because it is in fact ill-conceived and has horrendously expensive implications to every citizen in the province.
[6:45]
Hon. G. Clark: You know, I could take some of that criticism from the Liberal Party, but I can't take it from that member or from the Social Credit Party. We're faced with a deficit. That member was a member of a government that rang up a deficit three times as large as the largest deficit in the history of British Columbia. We inherited this unbelievable mess, and then he comes in here and complains when we're trying to get a handle on it. The ICBC rates were completely politically manipulated. For three years management was overruled by the politicians. The rates were kept low over the course of that time. We're trying to clean up the mess we inherited from Social Credit.
The Chair: The opposition House Leader on a point of order.
D. Mitchell: Mr. Chairman, as entertaining as ICBC rates might be, they don't relate to the bill the committee is reviewing -- Bill 9, the Social Service Tax Amendment Act, 1992. I don't think it's directly related, and I don't know that the comments of the minister are directly related. But if we could stick to the bill, I can assure the minister and other members of the committee that we're prepared to let this thing go through -- as long as we don't allow a debate to break out here. That would be dangerous.
The Chair: Thank you, hon. member. The debate has been very close to second reading, in that some of the comments have not exactly been on this section. But your points are well taken. I'd advise the minister to reflect upon them.
Hon. G. Clark: Mr. Chairman, I certainly will. I was trying to make the point that the member tried to argue that ICBC rates would be increased as a result of this section of the bill. I'm trying to argue that ICBC rates are increased far too high as a result of trying to clean up an unbelievable mess left behind by an administration that member was part of. So I guess what I'm saying is that this is a modest expansion of the base.
I don't think any lawyers will be lining up at the food bank as a result of the imposition of this tax, as disliked as it is, as distasteful as it is for me to bring it in, quite frankly. No one wants to bring in taxes. It's a modest enhancement to try to deal with a very serious
[ Page 1637 ]
fiscal situation generally and particularly a difficult situation with respect to legal aid.
C. Serwa: On section 6, I welcome the latitude you've given to the minister. I'm going to take some latitude as well. The Minister of Finance knows full well that we have the lowest debt per capita of any jurisdiction in Canada. Perhaps the minister, when he talks about some sort of contrived financial situation on the basis of a politically biased report -- the Peat Marwick Thorne manifesto, I believe.... The reality is that the highest and the greatest deficit....
Interjection.
C. Serwa: Thank you very much, Mr. Chairman, but before you say so, the minister opened this conversation up. It's imperative that we attend to this, because it's relevant to section 6. The government is saying that they require revenue because of this purported mess that they've contrived. The reality is that in fact they don't require this. What they've done is redirected funds for their specific purposes. The province is in very good fiscal shape.
The minister has stood up in this House a number of times and commented on the bond rating with a great deal of pride and on what a magnificent job this province has been managed with, with the strong financial management that it's had. Other than quoting from that particular report, the fact remains that in section 6 they're trying to raise funds in a way which is unjust and inappropriate and short-sighted. They are going to hurt every individual in the province. I think they could manage their expenditures far more ably than by directing it to special interest groups or single-interest groups. Those types of funds are not required. This section should be withdrawn. There was no financial mess, and the minister knows that full well.
V. Anderson: I'm concerned by some of the statements the minister has made in presenting this and by some of the backbenchers' statements who have put this forward as a good, sound tax. If this is a good, sound tax, as the backbenchers on the government side proclaim, then there's going to be a lot of disappointed people in this province. They understood that the NDP, if they did anything on taxation, would bring in progressive taxation which would take the burden off the low-and middle-income people. However, instead of bringing in a progressive tax, they have brought in a regressive tax.
Tonight in the House the minister says that it's the marketplace where he is attempting to operate, and he's going to operate like everyone else in the marketplace. He's expecting the lawyers to deduct this from their bill, but the government to add it on to everybody else's bill. I think he's in contradiction with himself. It's just simply that we have to argue with this government. If they do not know the difference between regressive and progressive in taxation, then it's time they went back and re-examined their own platform and come forth with a real understanding of what those mean for the people.
Hon. G. Clark: I'll just reiterate what I said. This is a progressive tax. The majority of the tax will be paid by business. It will not be paid by individuals. Of that paid by individuals, wealthier individuals tend to use lawyers more often and pay bigger bills. I'm surprised that the member opposite who.... I won't get into it. We have some difficult decisions to make, both in the spending and the taxing side. That member constantly asks for spending more money on everything and then opposes every tax we bring in. I think this is one of a variety of taxes which we are imposing and raising. It's one which, on balance, if you look at our tax package, is the most progressive in the country.
K. Jones: Has the minister determined how taxation of major corporations that have in-house legal advisers will be undertaken? Have you got a means within the establishment of this act or this bill to tax those large corporations whose lawyers are paid on staff?
Hon. G. Clark: I'm sorry, we've already passed that section of the bill.
The Chair: That's correct, hon. member. The section you're referring to was passed.
J. Weisgerber: On section 6, I'm just curious about one of the comments that the minister made early in the discussion of this section. He seemed to be making a linkage in his mind between the people who would purchase legal services and pay a tax, and the legal services that were being funded by that. Quite honestly, I'm amazed at the leap he's made in linking one to the other. I suspect that very few, if any, people, as they pay their sales tax for legal services, will understand that it goes toward free legal services. But if they did, I don't see how there's anything they can do to influence the consumption of legal aid.
I can certainly accept the argument that if you link a tax to a service, then perhaps people using the service will understand that if they were to reduce their consumption of the service, they would reduce the need for they themselves to pay more tax. But these are worlds apart; by definition, the people paying the tax wouldn't be the people using legal a;d services. I'm wondering how the minister sees this working, and whether it's his notion that somehow this is going to control consumption of legal aid. Quite honestly, I fail to see any connection at all.
Hon. G. Clark: Obviously we need an education process to try to make that link, and I've made that point here repeatedly.
First of all, this will raise an estimated $35 million. The legal services bill will be in excess of $70 million, so there's certainly no fear of this tax actually covering the cost of legal aid. It would have to be 12 percent or 14 percent, and that would be punitive, in our judgment. So we chose not to levy a tax on legal billings to actually cover the costs of legal aid. This is just a modest tax relative to the cost for legal billing and only goes partway to establishing that link. We just wanted to
[ Page 1638 ]
make the case that legal aid is extremely expensive and we have to try to get on top of that in terms of the cost side, but in the meantime we also need to deal with enhanced revenues.
It's perhaps not the best example of a link that you could make in terms of who is actually benefiting by legal aid. The people who are paying the tax are different people. I agree with that. But the principle is still there; we know that this money is necessary in part to pay for legal aid.
J. Weisgerber: As the minister noted, the systemic problem here is the growth in legal aid. It was growing before this government got into office, and it has continued to grow, perhaps even at a faster rate, since they took office. I suspect that the policies of this government will probably encourage even more use of legal aid by people who feel they need some protection.
However, it would perhaps be more useful, if the minister is trying to make the links that we were talking about, if we saw, concurrent with the imposition of this tax, some definitive action by the government to control the costs of legal aid, because I believe they're out of control.
Hon. G. Clark: Let me just say that I think that is an excellent suggestion. I would have liked to have done that. This is my domain. The Attorney General is working on this whole problem. I do agree with you; in an ideal sense it would be nice to have the package together. But it's a big and difficult problem, because we want to maintain a quality legal aid system for people and we want to make sure lawyers are remunerated appropriately for their services. It's a big, challenging problem, which we're trying to grapple with. I fully hope and expect that there will be a definitive plan on cost containment on the legal aid side, but we're not there yet. We want to go through a consultative process with the legal profession, consumers of the service and others to get there. I suggest any discussion of that would be more appropriately handled by the Attorney General.
R. Chisholm: I've heard from your side of the House that you understand business. If you understand business, you must realize that business cannot eat 6 percent and eat 6 percent more. Lawyers being fairly intelligent people, I doubt very much that they are going to eat the 6 percent. They're going to pass it on, or they're going to be bankrupt if they continue that type of practice. You made the suggestion that the lawyers would be in the food bank lineups. I will make this suggestion back to you that their clients will be in that same lineup you're talking about.
Hon. G. Clark: It's an interesting proposition that they won't eat it but you think the business community will eat it. It is a free and dynamic marketplace. I suspect that in some circumstances lawyers will absorb some of it and that in other circumstances profitable corporations will pay it. That's how the marketplace works. I don't think you can judge in advance what the impact will be. It depends on the competitive nature of both the clients -- their status and profitability -- and the lawyers providing the service. You will get a varied impact on balance, which is what the marketplace is all about.
C. Serwa: Would the minister confirm that he is naive enough to believe that lawyers can and will eat the tax without passing the tax onto their clients?
[7:00]
Hon. G. Clark: As a matter of fact, I've had discussions with lawyers that have said that they will in fact be dropping their fee structure to try to accommodate this tax. They are not particularly happy about it, but they understand that in some client groups that they are servicing, it's difficult for them to increase their fees by imposing this tax. I admit it is varied, but where the lawyers can pass on the tax, I'm positive that they will do so.
C. Serwa: Again, the minister continues to indicate that all that is involved here are wealthy lawyers -- very highly paid professionals -- and the profitability of large corporations. Somehow the minister fails to understand that all of us at one time or another utilize legal services. It may be in the case of a divorce or in other situations such as mortgage problems, bankruptcies and all of these sorts of things. Ordinary British Columbians have to use legal services. It's very nice to talk about wealthy lawyers and large corporations, but the fact remains that they are going to be directly impacted. There has to be a very major concern. I mentioned such things as ICBC with high legal bills and the increased cost. I can mention B.C. Hydro, that has a substantial litigation department. The reality is that public utilities will have to then charge more. You will increase your profitability perhaps, but in the end, the taxpayer, the consumer of those services, will again have to pay more and more. I believe that it's entirely inappropriate.
Hon. G. Clark: Look, don't misunderstand me. You're correct that people pay taxes. The question is the relative burden. If you look at how much revenue is going to be raised, you have to ask who that revenue is going to come from. Some of it will come from individuals purchasing a home, people of middle income or modest income. That's unfortunate; I don't like that; I agree with you. But that's not where the majority of revenue is coming from. The majority of revenue is coming from wealthier people and from large corporations and from small corporations as well. That's not to say that everybody doesn't pay some. That's how many of our taxes are: when we have income taxes or surtaxes, everybody pays some, but some pay more than others. This is a tax like that. You're right that over the course of your lifetime many people will end up paying a little bit on this tax, but some will pay more than others. I don't want to try to mislead you that this is only a tax on wealthy lawyers -- I never meant to say that -- or only a tax on profitable corporations. That's not correct. On balance those individuals
[ Page 1639 ]
and people that I've been talking about will pay more as a group than those of modest means.
C. Serwa: The point that I'm trying to make is that of the end result of the additional burden. Obviously there are some areas that can, in fact, pay more. My problem is that many people are involved through no fault of their own in litigation or incur a legal cost where they have no other recourse, and they're going to be hurt very hard in this. They have no manoeuvering room, and this will hit them substantially. To the normal individual it's going to be an additional increase in the cost of doing business. That's fundamentally my particular concern.
K. Jones: Many of our trade unions have need for legal expenditures for their arbitrations and various legal actions relating to contract negotiations, strikes and things like that. Is the minister prepared to give an exemption to the labour unions from this exceptional extra cost to them? This is going to amount to a very large amount of money that the union members are going to have to face.
Hon. G. Clark: No.
Section 6 approved on division.
Sections 7 and 8 approved.
On section 9.
K. Jones: What revenue is estimated to be gained from the taxing of fax lines under this legislation?
Hon. G. Clark: About $2 million.
K. Jones: How does the minister propose to measure those lines being considered for this taxation as fax lines?
Hon. G. Clark: The phone company charges it.
K. Jones: You're referring to the phone company circuits that are specifically identified as fax lines and not those circuits that are regular residential or business phone lines which have fax services on them. Is that correct? You're just working on those that are billed out as fax or FAXCOM-type circuits.
Hon. G. Clark: The only place where it may be -- I'm not sure where the member's coming from -- is that where a residential phone is exempt from the social service tax and is used from time to time as a fax line, then in fact they may be escaping the tax in this respect. We have no way of capturing that. So this is either dedicated lines for fax, which all businesses use, or other ways in which we can track the use of faxes. But the only place where an individual may not pay this tax because of the fact that the previous government -- and I applaud them for this, frankly.... This is one of the few jurisdictions where this is the case.
We do not apply the sales tax to basic phone bills. We do apply it to long distance, and now we do to fax, which is consistent with that. But we resisted the opportunity to do what other provinces have done, which is to apply the 6 percent sales tax on basic service, which would raise significant revenue but would have been difficult for some people to deal with. This is just a very modest enhancement of the same principle, frankly, that existed under the previous administration, which is to essentially tax phones used by businesses in the sense they're long distance phones. This is a similar kind of category.
[D. Streifel in the chair.]
K. Jones: Perhaps the minister's advice is poor or else he's deluded into believing that this will actually be able to raise that type of revenue. Basically, most people who currently may have a fax line will probably turn around the next few days and transfer them over to regular phone lines so that they don't have to pay the extra costs of business. It's discriminatory, obviously. Those people who have regular phone lines and are using them for fax and for data are not going to pay this tax, while those people who have a defined line are going to pay it, according to your calculation.
To the Chair, one question on a point of order. Is the audio system operating in the chamber, because I'm having some difficulty hearing any reproduction in this room.
The Chair: That was a point of order, was it, hon. member?
K. Jones: It was a point of order -- a point of information in order to find out whether the speakers are on in the House.
The Chair: We'll give it a test. Hon. members, is it possible to hear the Chair?
Some Hon. Members: Yes.
Hon. G. Clark: I want to make sure members of the House know that this is not just for fax machines. In fact, fax machines may not be the principal source of revenue. This is for all data communications, so non-voice communications, which is a big part and a growing part of business, will be taxed. People have been talking about faxes. Yes, there might be some leakage in the residential side -- residential only -- but we're confident of this revenue number we've generated. This is all non-voice communications and telecommunication services, including faxes.
V. Anderson: I'm sure somebody is going to ask this from the constituency: is the government paying the tax on the fax services that we use in government business?
Hon. G. Clark: Yes.
Section 9 approved.
[ Page 1640 ]
On section 10.
Hon. G. Clark: Mr. Chairman, I move the amendment to section 10, notice of which has been given to the Chair and to all members.
[Section 10(b),
(a) by deleting "the following subsection:" and substituting "the following subsections:", and
(b) by adding the following subsection:
(1.2) Unless the person providing the legal services referred to in section 2.01 (2.1) has reason to believe that an estimate made under section 2.01 (2.2) in relation to those legal services is not reasonable, the obligation of that person under this section to collect and remit tax in respect of those legal services shall be considered to be met if the person collects and remits the amount of tax payable in accordance with the estimate.]
Amendment approved.
Section 10 as amended approved.
Sections 11 and 12 approved.
On section 13.
Hon. G. Clark: I move the amendment to section 13, notice of which has been given to the Chair and to all members.
[Section 13, by deleting section 13 and substituting the following:
Section 37(2) is amended
(a) by striking out "may make regulations" and substituting "may make regulations doing one or more of the following:"
(b) in paragraph (c.1) by striking out "sections 2, 2.1 and 2.2," and substituting "sections 2, 2.01, 2.1 and 2.2,"
(c) by adding the following paragraph:
(e.1) in relation to legal services,
(i) prescribing legally related services as legal services for the purposes of section 2.01,
(ii) excluding specified fees and charges in relation to legal services from the purchase price of the legal services,
(iii) prescribing specified disbursements in relation to legal services as disbursements to be included in the purchase price of the legal services,
(iv) prescribing restrictions, conditions or requirements in relation to estimates under section 2.01 (2.2),
(v) prescribing matters having a substantial connection to British Columbia as matters in relation to which tax shall be payable under section 2.01 (3),
(vi) exempting specified legal services from tax under section 2.01, subject to such terms and conditions as the Lieutenant Governor in Council specifies, and
(vii) exempting legal services provided to persons or classes of persons from tax under section 2.01, subject to such terms and conditions as the Lieutenant Governor in council specifies;, and
(d) by striking out "and" at the end of paragraph (j) and by adding the following paragraph:
(1) in relation to a record
(i) that is in the possession of a lawyer and that is about to be inspected, audited or examined under this Act or about to be seized under a warrant in relation to an offence under this Act, and
(ii) for which the lawyer at that time makes a claim of solicitor client privilege for a named client of the lawyer in relation to the record,
establishing procedures for allowing the record to be retained or seized and to be held in a secure manner until the claim of solicitor client privilege is waived by the client or until the claim is determined, or the record otherwise dealt with, on application to the Supreme Court in accordance with the regulations.]
On the amendment.
L. Stephens: The major amendment here allows the government to make regulations dealing with the power of the consumer taxation branch to do audits of legal firms and businesses in regard to the tax on legal services. This is a major issue. I think lawyers will really protect their solicitor-client privileges, and rightly so. It's unlikely that they will allow government agents to go through their files to determine if the taxes are collected or levied correctly. How does the government intend to deal with this?
Hon. G. Clark: That's a very good question. When I first read the proposed amendments, I was concerned about the powers as well. These mirror almost exactly the GST provisions and other provisions in other tax law. In other words, you need the power to go in and audit the books. It does not mean you are reviewing people's files or anything else; it's simply a tax audit. My staff have convinced me that we need to have the same powers in this bill that we have in all the other tax bills and that other jurisdictions have, particularly the GST. They're really mirrored on that. They're not more aggressive; they're not less aggressive; they're really exactly the same and give us the ability to go in and audit the books. Frankly, we simply have to have the similar type of amendment to give us the power to do that.
I want you to know that I, too, am concerned about that question. I've made those concerns known. We'll try to make sure that we can do that with a minimum of problems and that it's restricted to that kind of tax audit so that we can retain the secrecy that lawyers have -- client-lawyer privilege and the like.
Section 13 as amended approved.
On section 14.
Hon. G. Clark: I move the amendment to section 14, notice of which has been given to the Chair and to all members.
[Section 14, in the proposed subsection (5) by deleting "before May 1, 1993 may be made retroactive to any date after April 30, 1992" and substituting "before June
[ Page 1641 ]
1, 1993 may be made retroactive to any date after May 31, 1992".]
Amendment approved.
Section 14 as amended approved.
Section 15 approved.
On section 16.
Hon. G. Clark: I move the amendment to section 16, notice of which has been given to the Chair and to all members.
[Section 16,
(a) in subsections (1) and (2) by deleting "April 30, 1992" wherever it appears and substituting "May 31, 1992", and
(b) by adding the following subsection:
(4) Section 2.01 of the Social Service Tax Act does not apply to legal services provided under a written contract entered into before March 27, 1992 that set, at the time the contract was entered into, a specific total fee amount for those legal services.]
On the amendment.
L. Stephens: This section says that if a written contract specifying a certain fee for legal services existed before March 27, 1992, then the tax is not applicable. This exemption does not apply to legal services on contingency. Is this somewhat discriminatory against lawyers who practise on a contingency basis?
Hon. G. Clark: There is a formula for contingencies in the bill. Let me be clear about this. We have been discussing with the Law Society and others -- my staff has as well -- how we might implement this tax and the difficulties it imposes.
[7:15]
One of the things we just passed in the previous section was to extend the date another month so that it doesn't come into effect for another month, which costs about $3 million to the government, frankly. But we felt they made a reasonable case that they simply couldn't do it efficiently and quickly enough to accomplish our revenue measures. The deficit is $3 million larger as a result of that, but it's a concession we made to try to have smooth implementation.
This is a similar concession, in the sense that.... I don't mean that we've given anything, except to try to be reasonable in the consultation. It was pointed out, in fact, that there are legal agreements signed between lawyers and clients. Frankly, it would be unfair for us to impose a tax now over and above something which was signed prior to the tax being contemplated, so we moved to change that.
The contingency is a different question, because it's not really a fee for service. The service has yet to be rendered and the payment has yet to be paid, so it's covered in the existing bill in the form of a formula. Again, we think it's reasonable. This is just an attempt to try to deal with implementation pains as we move through this and to try to give some comfort to the Law Society and others that we are certainly trying to listen to their concerns, albeit they clearly have a bigger concern about the bill itself, which I certainly acknowledge. This is an attempt to try to deal with some anomalies that have arisen.
J. Weisgerber: It's an interesting approach to dealing with contracts and taxation. It would seem to me that anytime a new tax is brought in, particularly one that would affect business, there would be contracts where the supplier would be adversely affected by an increase in taxes. It seems unusual to me that in this particular contractual agreement you would exempt it, whereas in a whole range of other commercial transactions you would simply say to the parties: you'll have to work that out yourselves.
The only other thing I would note along the line of that argument is that if the minister really believes that lawyers are going to absorb the fee, then there would be no need, I suspect, to bring that particular section into play. I suspect that the minister really understands. Perhaps he'll let us know that he expects that the fees will be added to the legal bills and passed along to the consumer of the service.
Hon. G. Clark: The member makes a very good point. The reason we have exempted fixed-fee contracts is the inability of lawyers who have entered into them to pass the tax on. In other words, if it's a fixed-price contract, it's a fixed price. Then our tax on top of that -- they would have no ability to pass it on.
I appreciate what you said earlier, but my point is that what we should try to do is have a level playing-field where the market can take place. We felt it unfair to try to impose that -- to sort of make the lawyers eat all of the tax in this case -- when we're not sure what the impact will be throughout the piece. I suspect, as I said earlier, that it will have a variable impact, depending on where the practice is, the clients of the particular practice and the like. Some lawyers will in fact absorb it and others won't; some will absorb some and others won't. But this would have made the lawyers eat all of it, and essentially, retroactively deal with it, and we felt we shouldn't do that.
I want to tell the member, because I think it came up earlier in his remarks, that some sense of this was unusual. In fact, it's not unusual. My staff advised me this happens routinely where there are fixed-fee contracts and a tax is imposed or a tax is raised; usually there is an attempt to sort of, as they say, grandfather that agreement so as not to have an undue hardship on the individual affected.
Amendment approved.
Section 16 as amended approved.
On section 17.
Hon. G. Clark: I move the amendment to section 17 standing in my name on the order paper. If I could
[ Page 1642 ]
speak to it.... I've already sort of spoken to it. This is in fact the extension to June 1 rather than May 1, to give lawyers and the legal community a chance to get up to speed on this tax.
[Section 17, by deleting subsection (3) and substituting the following:
(3) Sections 2, 6, 10 to 14 and 16 shall be deemed to have come into force on June 1, 1992 and are retroactive to the extent necessary to give them effect on and after that date.]
Amendment approved.
Section 17 as amended approved.
Title approved.
Hon. G. Clark: I move the bill be reported complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 9, Social Service Tax Amendment Act, 1992, reported complete with amendments.
The Speaker: When shall the bill be read a third time?
Hon. G. Clark: With leave of the House now, hon. Speaker.
Leave granted.
Bill 9, Social Service Tax Amendment Act, 1992, read a third time and passed on division.
Hon. G. Clark: I call second reading of Bill 20.
MINISTRY OF MUNICIPAL AFFAIRS,
RECREATION AND HOUSING
STATUTES AMENDMENT ACT, 1992
Hon. R. Blencoe: Bill 20, as I've already indicated, contains a number of provisions. Two of the provisions relate to section 945 of the Municipal Act and to section 561 of the Vancouver Charter. These amendments require that municipalities, regional districts and the city of Vancouver include policies on affordable housing, rental housing and special-needs housing in their official community plans. It is already required under the existing legislation that community plans ensure a five-year supply of housing, but there is no requirement to deal with affordability or special needs.
Our amendments signal that affordable and special-needs housing for British Columbians are now priorities. When I refer to affordable housing, I mean both market and non-market rental and owner-occupied. These housing amendments also signal the government's interest in housing issues and our desire that local governments become partners with the province and the private sector in coming to grips with the multitude of housing issues that face all of us.
At the same time, hon. Speaker, we are committed to assisting local governments in responding creatively and responsibly to the legislation. In this regard, we have a plan. I will be announcing a number of initiatives over the next few months to assist local governments in developing policies on affordable housing. The initiatives will include providing technical information to assist local governments in realizing the opportunities presented by the legislation. We also intend to provide financial assistance to ensure that the amendments do not present a financial burden to local government.
We also intend to introduce an amendment to this bill, hon. Speaker, to delay the implementation of the affordable housing provisions until September 30, 1992. There was some genuine concern voiced by UBCM and others that there needs to be a time-lag in terms of when this bill would become operative. Therefore as of June 30 of this year, when official community plans are open for review, this new section will become operative. This time-frame will enable local governments to prepare for their new responsibilities. British Columbians need affordable housing; local governments will play a role in helping to facilitate its construction. This government will support local governments in developing policies of affordable housing, and we are providing time for them to get ready.
Bill 20 also contains measures enabling the Cariboo and Thompson-Nicola Regional Districts to undertake long-term capital borrowing of $3.3 million for library facilities. This borrowing was approved by local voters in November 1988. Authority for the borrowing was granted through supplementary patent in April 1989. However, in July 1989 significant legislative changes were made to the regional district sections of the Municipal Act. One result was that the old borrowing ceased to exist; it was simply a case of mis-timing. This enabling legislation restores the authority, thus allowing the regional districts to finance on a long-term basis and repay the temporary loan outstanding. Without this legislation, the regional districts would be faced with the costs of calling another referendum on the identical issue for which the voters have already granted approval. This is not only good legislation for the libraries but is cost efficient as well.
Bill 20 also validates the tax-sharing agreement entered into by the district of Taylor and the city of Fort St. John. Specifically it validates the payment made by Taylor to Fort St. John in 1991 under the terms of the revised tax-sharing agreement those two communities signed on May 13, 1991. These two northern communities have had a tax-sharing arrangement in place since 1975. Through it, Taylor shares with Fort St. John the municipal property tax it collects from major industrial enterprises. This agreement was renewed May 13, 1991. Validating the 1991 payment, made under the terms of the new agreement, confirms the rights of Taylor's council to have made the payment.
The last and very important provision allows the city of Fernie and the districts of Elkford and Sparwood to borrow money against the unpaid property taxes of Westar Mining Ltd. Westar owns two coal-mines in the
[ Page 1643 ]
Elk Valley. Because of financial difficulties, it has not paid its 1990 and 1991 property taxes. The mining company's outstanding property taxes total $13 million. That was as of December 31, 1991. This borrowing authority will allow the municipalities to pay their bills while the special job protection commissioner determines a plan to help Westar out of its current difficulties. Bill 20 also waives the requirement on Elkford and Sparwood to place the property of Westar up for tax sale on September 30 -- again, allowing them to waive it but not assuming that if they so desire they obviously have the power to make the various moves they seem fit. We obviously hope that's not required. This waiver provision will have significant advantages for the community. Waiving this sale requirement means the job protection commissioner will be afforded flexibility in devising lasting solutions for the benefit of the entire community. The borrowing authority and the tax-sale waiver, I must make clear, are short-term solutions. The long-term solutions rest with the outcome of the work being done by the job protection commissioner, and Bill 20 clearly and hopefully provides the time necessary for the commissioner to complete the work.
[7:30]
A. Cowie: In general principle we are in favour of this bill. I would like to comment, though, on the different sections. Section 1 amends the official community plan and requires social housing, affordable housing, rental housing and special-needs housing to be outlined in their official community plan. Most community plans that are any good already do that. The comment I've had from a number of municipalities is that like other clauses in the community plan that are required, such as the flooding requirements, they'll simply get a standard clause from Municipal Affairs and include it. I think they can take it to that extent and include a standard clause, a very brief statement, or they can get right into the meat of it and provide areas within the community plan for social housing. I would suggest if it's a broad provision, then it really isn't going to work. It's a good objective, and if it's a general policy, as we were discussing this afternoon when examining the minister's budget, then there's really no problem. However, if the minister wants these municipalities to zero down into small areas and says that this area consisting of three blocks is to contain social housing, then I would say that's discriminatory against the owners of those particular parcels. I'll just refer to the Vancouver clause, since it relates to this. In Vancouver, of course, they don't have an official community plan; they are working on one. The last community plan was in 1929, the Bartholomew report, which is a very fine report. It dealt with all sorts of housing issues but did not specifically say where social or affordable housing was going to be. Vancouver has passed regulations requiring that 20 percent of any large developments -- such as Concord or Marathon on the harbour -- be allocated to social housing. They have different names for it -- in-city social housing and various other titles.
That works reasonably well as far as the plan goes, but very few of these housing units that are allocated have actually been built. Land is allocated and the area is allocated, but as long as there aren't programs, or as long as the federal government and the provincial government don't come up with programs in order to build these houses, they simply won't be built. I take it that that's what the minister is going to deal with later on this year. So in general principle, I agree that we need statements that there will be housing for everyone. I'm not so sure the correct word is "affordable," because $300,000 is very affordable in Vancouver, if you can find it. In fact, you can't. Well, I guess you can in certain areas. In Tsawwassen, for instance, $200,000 is long past. There isn't even a lot for that. You cannot buy a lot and a house for $200,000. That would imply that even a middle-income person can't really get affordable housing there. Unless the minister intends to go beyond that and insist that municipalities increase density.... Municipalities will move on in creating smaller units and getting innovative. Again, we'll be dealing with this under his estimates rather than under this bill, so I won't beleaguer that particular point here. I think this is good in terms of overall guidelines, and it's a good objective, but I fail to quite understand how it's going to be implemented at this time until more detail is provided.
As far as section 2 goes, we have no problem with the Cariboo and Thompson-Nicola joint library system. That's just housekeeping. As far as the first part of the second section, the Taylor-Fort St. John tax-sharing agreement makes a lot of sense. In fact, I would encourage the minister to see that those municipalities are amalgamated.
As far as Westar Mining Ltd. municipal tax arrears go, we have some concerns that the municipalities get the guarantees that they can go out and make the loan of $13 million. There perhaps should be more guarantees from the provincial government, although there again we're looking forward to some sort of negotiated process via the job protection commissioner, which we think is the proper way to go.
I've already commented on the Vancouver section. They already do create development plans for different parts of the city. In general it's working very well as a guideline, but without the actual measures to provide funding for the houses, we're not really getting at the bottom scale -- those people in need -- through this particular means.
W. Hurd: With respect to section 11 of the act, the Westar Mining Ltd. municipal tax arrears, the minister is aware that since this bill was first tabled in the House the assets of Westar Mining have been under reorganization as part of the Canadian company reorganization act -- or the Canadian equivalent of chapter 11 bankruptcy. The company is in default of a considerable amount in loans. I guess the logical question arises whether providing the three municipalities with the right to borrow funds on the strength of unpaid taxes has the effect of increasing the liability of the province of British Columbia for making good on those taxes if the province is not as preferred a creditor as the banks in this particular case. I'm not sure if any additional research as gone into that issue, but perhaps the
[ Page 1644 ]
minister could explain to the House whether the change of status of Westar Mining Ltd. in any way affects this particular section of the bill.
The Speaker: Before I recognize the next speaker, I would remind hon. members that while considerable leeway is usually allowed during second reading debate, members should try to focus on the purpose of the bill and leave detailed discussion of sections until committee.
L. Fox: I assure you that it is my intention to be brief and specific to the bill. I'll start with section 1 and follow it down. I'm really concerned that this could very well interfere with the individual property rights of property-owners. The idea of requesting local governments to include policies for affordable housing, rental housing and special-needs housing is a sound principle. When you deal with already-developed areas and vacant lots within those developed areas, I'm concerned about the impact that will have on those municipal properties. I can well understand it if the planning took into consideration new development and perhaps even government-owned property both by the provincial and municipal government. Then it would be an honest contribution to what is a real problem. I'm concerned, however, that should some property-owner decide not to develop his respective property for a period of time, he might all of a sudden find that that's the only piece of vacant land in a specific area and find that council has immediately opted to plan and therefore zone it to meet these needs. I also believe that there is a real role to play here. In most communities there is identifiable municipal and provincial land. They could fill the void that the minister is attempting to fill without negatively impacting property owners. I'll leave further dialogue to the committee stage.
With respect to section 9, we support it. As a former municipal leader, I know that this has been an ongoing process for some time and has finally been brought to conclusion.
I believe section 10 is supportable as well. In fact, the whole concept and principal of sharing a resource as an economic unit is a sound one. There are many instances, such as the Elkford one identified in section 11, where municipalities have been able to grow through this type of sharing arrangement, even though the economic opportunity is outside their borders. I think it makes for strong and good local government, so we certainly support that.
Just a few comments with respect to section 11. We note that Westar taxes have been unpaid from 1990-91. The company owes these communities approximately $10 million, and by September will owe approximately $18 million to these communities. I guess it begs the question that if the communities are allowed to borrow this money in order to interim-finance their needs -- and certainly I respect that need -- will the penalties on the overdue taxes offset the interest costs that these communities will have to pay with respect to this loan? When you start borrowing money to the magnitude of these dollars, the interest will hinder and compound the municipality's difficulties in serving its people. That, along with some assurance and some protection by the province that indeed they will have the opportunity, should something disastrous happen within the Westar company, and that they will be one of the first at the table to collect their property taxes and have the province's support in doing that.... With those few comments, I leave the balance of my questions to the committee stage.
Hon. R. Blencoe: I don't have much to add to that. Most of the comments were of a general nature and will probably be raised in committee stage, so I move second reading.
Motion approved.
Bill 20, Ministry of Municipal Affairs, Recreation and Housing Statutes Amendment Act, 1992, read a second time and referred to a Committee of the Whole House for consideration forthwith.
MINISTRY OF MUNICIPAL AFFAIRS,
RECREATION AND HOUSING
STATUTES AMENDMENT ACT, 1992
The House in committee on Bill 20; H. Giesbrecht in the chair.
[7:45]
On section 1.
A. Cowie: I'm not going to go into any great detail because the minister has basically satisfied most of my concerns, but on this particular one I want to know a little more. Does this section requiring that the community plan must include housing policies for affordable housing -- and I take it that's mainly social housing, or at least having some social objective -- mean that a municipality can zero down to a few acres or a block or two blocks, or is the community plan dealing with this to be of a more general nature?
Hon. R. Blencoe: This amendment really is sending a message predominantly to local government that we want them to be partners in developing housing strategies and policies and that housing is an important component of any official community plan in which you're dealing with the social fabric of the community. We want to encourage local government to consider, where possible, the issue of housing and general policies about affordability and to build into their strategies, if they see fit, zoning and prezoning -- concepts that I think we are going to be developing with them. We are going to develop a technical backgrounder for local government on some of the expectations that can be derived from this message that we're sending to local government.
Also, as I said in my introduction, we will be ensuring that there is financial consideration for the additional work we're asking from local government in terms of their official community plans.
A. Cowie: If that's the nature we're talking about, I can only applaud it. Would this include, for example, an
[ Page 1645 ]
encouragement for municipalities to include in-law suites, duplexes, nanny suites, units above garages, small suites, a lot of innovation? Is this what we're really talking about?
Hon. R. Blencoe: Absolutely. That's exactly what we want to see local government take a look at. It's open. What we're saying is that in the community plan you don't just address sewers and storm drains and zoning. The issue of housing and how you develop it is not just the federal government or the provincial government. There are a lot of things local government can be doing as well, and you touched on some very good points. If they can start to develop that, we want to encourage them. If they have to plan for that, do some studies around it, we can help them in the financing of some of those things.
A. Cowie: I was just going to let this go through, but I think it's a wonderful opportunity to get more information. I'm going to take a couple more questions, and then we can deal with it tomorrow.
I take it that what we're dealing with, with some of the tax measures.... We're taxing corporations, people with money. When we see a big house in a particular municipality, are we also going to say that people in wealthier communities should be allowed to provide a couple of suites in this house? Are we going to encourage, through education, perhaps even more flexibility in some of the wealthier areas so that they share some of the resources that they have?
Hon. R. Blencoe: Yes. Again, I don't want to leave the impression that the provincial government has a set agenda or that we're going to do terrible things to local government, but we are going to be nudging them and encouraging them. They are the first to be actually knocking on the door of the provincial government for more housing units, housing allocations, rent supplements and wonderful things they think senior government can do for them.
I think the message we're giving back is that we will try to cooperate in those areas, but there's some expectation on behalf of the provincial government that there are things they could be doing to solve the housing crisis or housing problems. Some of them are very simple, but of course they involve NIMBYs, neighbourhoods and all those things that hopefully they will start to take on.
But the answer is yes.
A. Cowie: I applaud the attitude and the measure the minister is taking.
L. Fox: Perhaps some of my earlier assumptions have just been borne out with the minister's answer that in fact property rights may be infringed upon. I'm extremely concerned, as I mentioned in my opening statements, about that issue of property rights, and especially in areas which are already developed and have been developed over a long period of time.
You mentioned earlier that you are encouraging municipalities to include a policy within their OCP. As we both know, most policies are reflected in map form as well as in written form on OCPs, so how would you anticipate a typical OCP map to reflect a policy with respect to where that respective community would see affordable housing being placed?
Hon. R. Blencoe: First, I want to reassure that hon. member on his concerns about private property. This is not a regulatory measure; it's a policy measure. It has no legal effect on individuals owning their own property. What we're saying to local government is that we want to up the level of expectation, shall we say, in terms of developing policies for housing in their jurisdiction, along with us.
On your question about mapping, unless I'm wrong I don't foresee a municipality having to devise a huge map, with affordable housing here, co-op housing here or disabled or whatever here. It may very well be, though, that they will look at areas that could reflect starter homes, first-time home-buyer programs, and they could look at some creative measures that might encourage that. I don't think we should concentrate just on maps.
What we're really saying is that we want planning departments and local elected officials to pay attention to the fact that there are lots of things local government can be doing in housing policy which ease the problem, and I've already named one of them. If, for instance, in my region here -- and I'm going to hear about this tomorrow -- Saanich council legalized secondary suites tomorrow, we would resolve three-quarters of our housing shortage in the greater Victoria area. Right? We would.
So we have "buts." I know the hon. member doesn't want the provincial government to tell local government what to do or be Big Brother, but I can assure the member that we are going to provide ways and incentives and encouragement to get local government to be part of the solution, part of the partnership, in dealing with housing, because we can't do it alone. I think that's what we're saying in our policies.
L. Fox: I don't know the area of Saanich all that well, but I do know what municipal politicians feel about government telling them what they should or should not do.
Let me get back to the concerns with respect to the zoning process that would follow the planning process. I'm sure the minister will be aware of the difficulty that councils have going through the public hearing process after second reading of a rezoning. There have been good developments put forward in many communities with respect to affordable housing, only to be turned down by the community itself, for various reasons. How does he feel this is going to circumvent and deal with that process, and still be proactive in terms of developing adequate properties for these developers?
Hon. R. Blencoe: It won't get around that. If a neighbourhood, or a community, is diametrically opposed to a particular project -- social housing or co-op, or whatever -- of course it will die if local council doesn't support it. This is just the start, I hope, of really
[ Page 1646 ]
increasing the profile of housing and the Housing ministry and our staff and policy and working with local government and the private sector. It's just the start.
One of the things we have to do is deal with the perceptions. Some form unfair perceptions that affordable housing, or co-op housing, or B.C. housing -- the stuff that we build proudly for British Columbians -- has something wrong with it, that there are problems with it. People react negatively to it. I think we have a job to do -- all of us. The housing that I see and visit, the projects that are being built today, are extremely attractive architecturally. There are people living there who are very proud and pleased to be there. They add to the neighbourhoods. But unfortunately, sometimes there's a perception that they're not a good part of the community. A lot of our work in the future will be to work on that attitude.
A. Cowie: There's one small item which I overlooked regarding the housing. I applaud the minister for his objectives and the innovativeness; he's going to go out and encourage municipalities to do this type of housing. But is the minister aware that the corporate tax he is putting in at the same time will make it even more difficult? I want to know whether the Minister of Municipal Affairs is aware that that will inhibit a lot of these innovative measures that he is bringing forward.
Hon. R. Blencoe: My staff tell me that we've done a little work around that, and we've discovered it's not going to have the heightened profile that the opposition think it will have. It will be isolated in terms of certain contractors, but the member may wish to discuss that with my colleague the Minister of Finance at a later date. Our initial observation is that it is not at all as dramatic as how the issue has been profiled by some.
L. Fox: Back once again to where I left off, the minister suggested earlier that there would be dollars available to municipalities who opted into this program. As I understand it, that would be to amend their OCPs and to get into that process. Can you tell us how much that's going to cost?
Hon. R. Blencoe: It's to be announced, but it's not going to cost any more than is currently budgeted for revenue-sharing. It will be part of revenue-sharing, and we'll just reallocate and readjust some of the....
[8:00]
Hon. G. Clark: It's not in the bill.
Hon. R. Blencoe: As my colleague mentions, it's not in the bill.
L. Fox: Can the minister at least tell me what percentage of contribution his ministry is going to pay towards opening the OCPs necessary to do this?
Hon. R. Blencoe: The announcement will be made in due course. We're still working on that with local government at the UBCM in terms of the kind of expectations they might have for such a program. Suffice it to say, hon. member, that we want to ensure that if some municipalities do take this provision seriously, if they do put a lot of work into it, then there is some financial compensation for that work. We're still working out that program and the details.
L. Fox: With respect to my suggestion earlier about using either provincially or municipally held properties to promote housing, has the minister done any exploration of exactly what might be accessible out there and how he might, in cooperation with the private sector, help to fill the needs in the communities?
Hon. R. Blencoe: There is a policy review currently underway involving.... I think whoever was talking today for the opposition about good interministry cooperation in terms of these issues.... We will proceed with taking a look at our policies on Crown lands. I'm answering these questions, but I'm not quite sure they are really reflected in this bill. I don't want to seem to be not being forthright and open with the hon. member.
L. Fox: With all due respect, I have purposely kept my questions specifically to housing. Actually, other than that I had no questions. I couldn't help responding to the statement by the minister.
Sections 1 to 3 inclusive approved.
On section 4.
Hon. R. Blencoe: I move the amendment standing in my name on the order paper.
[Section 4, (a) by renumbering section 4 (1), and (b) by adding the following subsection: (2) Sections 1 and 3 come into force on September 30, 1992.]
Amendment approved.
Section 4 as amended approved.
Title approved.
Hon. R. Blencoe: Hon. Chair, I move the committee rise and report the bill complete with amendments.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 20, Ministry of Municipal Affairs, Recreation and Housing Statutes Amendment Act, 1992, reported complete with amendments.
The Speaker: When shall the bill be read a third time?
Hon. G. Clark: With leave of the House now, hon. Speaker.
[ Page 1647 ]
Leave granted.
Bill 20, Ministry of Municipal Affairs, Recreation and Housing Statutes Amendment Act, 1992, read a third time and passed.
Hon. G. Clark: Thank you, hon. Speaker. Great progress tonight. I call second reading of Bill 17.
LAND SURVEYORS AMENDMENT ACT, 1992
Hon. J. Cashore: The Land Surveyors Act has since 1905 provided the statutory authority for land surveying to be a self-governing profession. It has been administered by the Ministry of Environment, Lands and Parks and its predecessors since that time. The province has always had a special relationship with this profession, due to its role in establishing and maintaining the legal boundary structure of the province. This structure is the foundation of our very fine land title system in British Columbia and of the Crown land registry that is maintained by my ministry.
The proposed amendments will allow land surveyors to practise through a company incorporated under the Company Act. This is similar to the provisions for most other professions, including architects, engineers, lawyers and various health professions. The ability of land surveyors to incorporate has been an outstanding request of the profession for the past few years. As the ministry responsible for their legislation, we are pleased to comply with this request. It will allow surveyors to incorporate where they see fit -- an arrangement that is often required in the modern business world. The amendments will restrict control of a land surveying company to land surveyors, although non-voting shares may be held by spouses or close relatives of surveyors. The amendments require that individual land surveyors remain personally liable and responsible to their clients. Surveyors will remain subject to discipline by the professional association, and the association will continue to make the necessary rules to ensure that professional standards are maintained.
The amendments to the Land Surveyors Act were prepared using provisions similar to those used in other acts, particularly those of the health professions. No difficulties have been encountered by allowing incorporation of other professions within British Columbia. Land surveyors in some other provinces have been authorized to incorporate for many years.
Hon. Speaker, I move second reading.
D. Mitchell: With respect to Bill 17, the Land Surveyors Amendment Act, we have no major concerns about this bill. In fact, we support the bill in principle. We note that there has been some consultation with a number of affected parties, although we do wonder whether or not all affected parties in the industry have been consulted. We do have a couple of specific concerns which we want to raise at committee stage, but at this point I would just like to note that we are in general agreement with this bill, and we support it in principle.
L. Fox: I really for the most part support the bill. I do have one concern, and I note that the land surveyors also have a concern with respect to 49.2(1)(e). Their concern is that they do not believe that anybody but land surveyors should be practising as land surveyors. They're concerned about the implications of allowing non-surveyors to act as surveyors. They would have much preferred this particular area to read: "...all of the persons who will be providing land surveying services on behalf of the company are members in good standing or are under the direct supervision of a member in good standing." I'd just make that comment for the record. Other than that, we too support the bill.
Hon. J. Cashore: It's good to know of that support. I move second reading.
Motion approved.
Bill 17, Land Surveyors Amendment Act, 1992, read a second time and referred to a Committee of the Whole House for consideration forthwith.
LAND SURVEYORS AMENDMENT ACT, 1992
The House in committee on Bill 17; H. Giesbrecht in the chair.
Section 1 approved.
On section 2.
C. Tanner: I have an amendment to section 2 -- that 49.2(1)(e), which will read: "...all of the persons who will be providing land surveying services on behalf of the company are members in good standing or are under the direct supervision of a member in good standing."
On the amendment.
C. Tanner: The concern that we have is that this section of the bill seems to imply that people who are not commissioned as land surveyors can work as land surveyors if they are under the direct supervision of a surveyor in good standing. Only those commissioned as land surveyors can practise land surveying. There are, as section 49.1 seems to recognize, land surveying services which employees of a land surveying company who are not commissioned land surveyors can perform so long as they are under the direct supervision of a member of the corporation in good standing. That's the reason for our amendment. There is a world of difference between performing land surveying services and practising land surveying. We can make an analogy to the medical profession: while a nurse may perform the services of administering an injection, or a pharmacist may perform the services of filling a prescription, it is the doctor who decides that a specific injection is necessary or that a certain prescription is required. The doctor is practising medicine; the nurse and the pharmacist are performing services at the direction of the doctor. That's exactly the situation that we find here.
[ Page 1648 ]
This House -- as was previously said at second reading -- is very much in favour of this bill. We think this amendment will make it that much stronger.
Hon. J. Cashore: I think the concern that the hon. member is referencing in this amendment is a legitimate concern. We were aware of that concern; therefore we checked out the reading with legal counsel. Legal counsel has advised us that the way the bill is worded sufficiently covers the point. I would remind the member that this bill and the working of the bill is supported by the corporation through a process of consultation with the land surveyors. They are fully cognizant of the wording. This is the wording that has been recommended by legal counsel. We have raised the point that the hon. member has just raised with legal counsel. They have assured us that the wording as it stands here is sufficient to deal with the point that the hon. member is making. I might also add that the way it is worded, it could include, for instance, senior articling students and the work done by party chiefs. Therefore the wording is adequate.
[8:15]
C. Tanner: While the rest of the bill fulfills the function.... We are aware on this side of the House that you've had extensive consultation. In fact, I believe the associations that you've talked to are very anxious to see this bill go through. When they saw your written bill, their information to this side of the House was that they had that one specific concern. This is their suggested rephrasing. It specifically expresses the world of difference that exists between service and practising. I think you'll find that it strengthens the bill and serves the minister's purpose even better than the original draft.
Hon. J. Cashore: Since this point was raised -- not by the corporation but by one member -- we have reviewed this again with the corporation. They have again reiterated as recently as Friday that they are satisfied with the wording and that they support the bill as drafted. Therefore we are not dealing with the concerns raised by the entire corporation; we are dealing with the concerns raised with regard to one individual. We have been diligent in following through on that concern by consulting, again, with the land surveyors. They are satisfied with the bill as drafted, so I do not agree that changing the wording would strengthen the bill. Our legal counsel assures us that the way this is worded fulfils the intent of the act.
L. Fox: Since I made a comment a few minutes ago in second reading, the corporation called my office and suggested that they do not officially oppose this portion of the bill. Therefore I will be supporting the corporation by voting against the amendment.
Amendment negatived on division.
On section 2.
C. Tanner: Could you call out for the nays next time, please?
The Chair: The Chair stands corrected. We will call for the nays next time.
C. Tanner: On a point of order, Mr. Chairman. Would you give this House your ultimate decision? I think I've heard you make two now. What is the decision on section 2?
The Chair: The amendment is defeated on division. We are on section 2.
Sections 2 to 4 inclusive approved.
Title passed.
Hon. Mr. Cashore: Hon. Chair, I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 17, Land Surveyors Amendment Act, 1992, reported complete without amendment, read a third time and passed.
Hon. G. Clark: Moving right along, I call committee on Bill 27.
MINERAL LAND TAX
AMENDMENT ACT, 1992
The House in committee on Bill 27; H. Giesbrecht in the chair.
On section 1.
C. Serwa: I have a question on the repeal of the definition of "production tract" and the Mineral Land Tax Review Board. Mineral tax and mineral lands are often associated with agricultural land. Is agricultural land that has the mineral rights attached to it...? Are the farmers exempt from this tax?
Hon. A. Edwards: Yes. Agricultural land that is mineral land is exempt.
Section 1 approved.
On section 2.
J. Weisgerber: The change in this section of the bill seems to provide less direct ministerial responsibility and more administrative responsibility. I wonder if the minister could tell us why she's decided that cabinet should be less involved in these transactions than someone from the administrative staff.
[ Page 1649 ]
Hon. A. Edwards: It is a matter of simplifying the administration. It seems that it didn't need an order-in-council or referral to executive council every time we needed one of these things.
J. Weisgerber: The reality of these things is that if they are simple and straightforward, as I'm sure the minister knows by now, they move through cabinet with a minimum amount of delay and paperwork. But I think that there's something to be said for cabinet always being aware of changes of this nature. I'm troubled by the thought that it seems to be an administrative bent -- I was going to say philosophical -- of this government to move more and more items away from ministerial accountability, and instead transfer the accountability to administrative staff. I think, generally speaking, that that's not a particularly good way to go, in that generally it seems to take cabinet, cabinet ministers and elected people away from the decision-making process. I think there are a lot of solid arguments, at the end of the day, for elected people making decisions and accepting the accountability that flows from those decisions.
Hon. A. Edwards: There's very little land left that is covered by this act; it's been put into the petroleum act. Basically there are very few designated production lands here. It's minimal.
D. Jarvis: I'm afraid I'll have to concur again with our member down the row here. Regardless of whether there's only one little piece of mineral land, or a thousand pieces of mineral land, the bureaucrats aren't always right. The final responsibility should rest with the minister.
Hon. A. Edwards: The final responsibility does remain with the minister. It's simply that we decided it probably didn't need to go through executive council for an order-in-council.
Sections 2 and 3 approved.
On section 4.
D. Jarvis: I'm not in favour of any tax increase, especially when it comes to a ministry that is essentially going down the drain through lack of any direction from this government.
An Hon. Member: Shame on you!
D. Jarvis: My friend, as I said earlier today, you're following on the basis that the world price is why no one is investing in this province. That is completely wrong. They're spending billions of dollars in other provinces and other countries where they have the same mineral market, and that's the bulk of the situation. They're not investing in this province because of your administration's -- and the past administration's -- poor handling of the situation. They are scared to death because of the indecisiveness of your government and the fact that you're boosting taxes until there will be nothing left. The minister has mentioned that there's....
The Chair: Order, please. The hon. member will please take his seat.
On a point of order, the member for Mission-Kent.
D. Streifel: It should be brought to the attention of hon. members off to the right down here that in the process of debate the question and answer goes through the Chair. I would just bring that to the House's attention.
[8:30]
The Chair: Thank you, hon. member. I trust that no members here are taking advantage of a chairperson who is relatively new at this game.
D. Jarvis: I have been over in little House A for a few weeks now, and this gentleman has been in the chair. He's not perfect either. You're doing a relatively good job, Mr. Chair, believe me.
As I was mentioning earlier, it is this government's problem and the past government's problem, not world market prices, that we're not having any investment in this province. They're using that as an excuse, just as they're saying, "Due to the financial situation left to us by the previous government," and on and on. Excuses, excuses, excuses.
The minister mentioned during second reading that this is just a picayune amount of money; it only amounts to $400,000. It may be a picayune amount to her, seeing that they're spending taxpayers' money, but it means a lot to many people.
I would like the minister, seeing as she has some expert help with her, to clarify a point. She mentioned that it is only going to raise $400,000. I have some information here. I don't know whether it's absolutely correct or not, but I would like her to interpret it for me. The old mineral land tax raised approximately $3 million, and out of that $2.1 million was for petroleum and natural gas, $800,000 was for tax on non-designated inactive lands and $100,000 was for production tracts and areas. On that basis, then, in 1991.... We had an 100 percent increase in these taxes. That would put that $800,000 up to $1.6 million -- or if was $400,000, she said it would bring it up to $800,000. Nevertheless, it's not a picayune amount. Would you clarify the point for me?
Hon. A. Edwards: In his search for perfection the member is evidently very clear that he wants no tax increases; all he wants is a whole bunch more tax money spent -- interesting. I would suggest as well that I'm a great admirer of the word "picayune," but I don't believe I used it. I did say that the amount raised would be $400,000; that is the increment. In fact, $400,000 is the amount that makes the $800,000.
C. Serwa: This is a particularly serious situation. Obviously the way the Minister of Finance does his calculations, he's looking at a 2 percent increase in fees. It's obvious that it's a little bit over a 100 percent
[ Page 1650 ]
increase in fees. The Minister of Environment knows full well the nature of the industry and the pressure that the mining industry is under at the present time. Recognizing full well the world....
Hon. A. Edwards: I believe that we're on the committee stage of this bill. I'm always glad to talk principle and so on, but I think we're dealing with committee stage, so that's where we should be.
C. Serwa: The reality is that this has horrendous implications. I think the minister is well aware of that. As a revenue-generating item, it is inappropriate at this particular time to strive for that, and I think the minister knows that full well. The minister is cognizant of the end result of this. It reminds me of what happened in your government's last tenure in the province of British Columbia. The message was: will the last person leaving the province please shut off the lights.
Hon. A. Edwards: I was unable to detect a question there, but if there was a question about these particular rates, I would like to say that it is an attempt on the part of the government to bring the rates up to date. They have not been changed since 1973, and I did explain that on the basis of an annual inflation rate of 4.6 percent, the calculation was made to bring the rate to the rates that are here in section 4.
D. Jarvis: May I say that the minister didn't say it was a picayune amount. Perhaps that reference was to something else that was picayune.
Would she clarify for me, with regard to the $3 million collected last year, that those broken down for the non-designated, inactive lands were not $400,000, but $800,000?
Hon. A. Edwards: The figure that the member is quoting is from 1992. They have been put out with the tax notices for 1992.
D. Jarvis: In second reading of this bill, you said: "I would like to remind members opposite that the measures will raise $400,000." In actual fact, you meant that with this new 100 percent increase of fees levied on these ten mining companies -- and we'll only have about ten left by the time you're finished -- it's going to be $800,000: an increase of $400,000 on top of the other $400,000.
Hon. A. Edwards: The member is correct. It's $400,000 added to that. It gives a total tax assist of $888,000. That includes the $400,000 increase for the calendar year of 1992. I might clarify, as well, that these taxes will be paid.... I believe 60 percent of the largest increases will be paid by ten companies, only half of which are mining companies. Sixty percent of the total will be borne by those companies, but other companies will also carry their share.
D. Jarvis: I just thought that if she had said that in the first place -- that they were going to raise $800,000 instead of $400,000 -- to an industry that's already reeling under the pressures of this government and going downhill.... Thank you very much for your information; it's appreciated.
J. Weisgerber: If the NDP are going to increase the tax 100 percent every time they get in office over the next century, this could get out of hand. We could have a 200 percent or 300 percent increase over the next hundred years, and who knows where it might end?
The reality is that you're sending a signal. As much as you're sending a tax increase to the mining industry, you're saying to them that this government is going to continue with the notion of flat taxes as opposed to profit-related taxes. The Finance minister likes to talk about regressive taxes; these are regressive taxes. I can't think of any justification for them, other than to send a message to industry that what we did in 1973 was right, so we're going to do it again in 1992; and if we get back in 20 years from now, we're going to do it to you again.
Hon. A. Edwards: The leader of the third party is correct. The next time it goes up, it will raise more money. If you double it every time, arithmetically you're correct.
The point is that we had a tax that the previous government also proposed to double. Obviously there are some arguments in favour of it that any government would consider. There is no question that we are trying to balance our tax load. In doing that, we are updating a tax that had not been changed since 1973. The result is approximately $400,000, 60 percent of which will be borne by ten companies, as I said. It need not be carried by some companies, because they can surrender their mineral rights if they choose not to pay the taxes on them. For some companies, that certainly would make a difference; their surface rights would not be affected, as anyone knows.
Interjections.
Hon. A. Edwards: From the catcalls and uproar from the other side of the House, I would guess that they don't recognize that there are companies other than mining companies that will be affected by the mineral land tax, and some of them may well not need to hold their mineral rights.
C. Tanner: Mr. Chairman, 20 years ago I had the pleasure of serving in the House in the Yukon. I'll give you a little back-dating, Madam Minister. You did the same thing then, and the Yukon was the beneficiary. Every mining company in this province went north, because there they had an area where they could make a dollar. Down here you've driven them out once; you're about to do it again.
Section 4 approved on division.
Sections 5 to 18 inclusive approved.
Title approved.
[ Page 1651 ]
Hon. A. Edwards: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
[8:45]
Bill 27, Mineral Land Tax Amendment Act, 1992, reported complete without amendment, read a third time and passed on the following division:
| YEAS -- 34 | ||
|
Boone |
Edwards |
Cashore |
|
Barlee |
Jackson |
Beattie |
|
Schreck |
Lortie |
Lali |
|
Giesbrecht |
Conroy |
Miller |
|
Gabelmann |
Clark |
Blencoe |
|
Barnes |
Pullinger |
B. Jones |
|
Copping |
Lovick |
Ramsey |
|
Hammell |
Farnworth |
Evans |
|
Dosanjh |
O'Neill |
Doyle |
|
Hartley |
Streifel |
Krog |
|
Randall |
Garden |
Brewin |
| Janssen | ||
| NAYS -- 18 |
||
|
Farrell-Collins |
Tyabji |
Mitchell |
|
Cowie |
Gingell |
Warnke |
|
Stephens |
Weisgerber |
Serwa |
|
Neufeld |
Fox |
Dalton |
|
Anderson |
Symons |
K. Jones |
|
Chisholm |
Jarvis |
Tanner |
Hon. G. Clark: I call second reading on Bill 25.
PROPERTY PURCHASE TAX
AMENDMENT ACT, 1992
Hon. G. Clark: I move that the bill be now read a second time.
Bill 25 amends the Property Purchase Tax Act to clarify it and preserve its intent. The bill introduces several minor technical amendments and addresses certain administrative issues concerning the application of the tax as well as eligibility requirements under the high-ratio-financing tax relief program.
By way of background, property purchase tax applies to transfers of legal ownership in real property registered at any British Columbia land title office. Transactions subject to the tax include transfers of fee simple interests, leases, life estates and agreements for sale. Tax is based on the fair market value of the registered interest transferred. This is the case for any conveyance of property even though no purchase or exchange of funds may have occurred.
The proposed amendments consist of a change in the title of the act and in the provisions which relate to land transfers resulting from an amalgamation of companies. In addition, minor modifications are made to two of the qualifying restrictions under the high-ratio-financing tax relief program. The proposed change of the statute title from Property Purchase Tax Act to Property Transfer Tax Act provides a more accurate reflection of the nature of the tax imposed by the act.
Bill 25 proposes amendments to clarify the process for determining the fair market value of property interests that are transferred when companies are amalgamated. These changes ensure the imposition of tax on all property transfers arising from corporate amalgamations. In addition, the exemption requirement for statutory amalgamations is updated as a consequence of recently amended federal legislation.
Proposed amendments to the tax relief program revise qualifying parameters to restore the intended application of the program, which is targeted to homebuyers with minimal down payments. These amendments ensure that requirements concerning eligible financing are not overly restrictive and allow the provision of relief in situations where two eligible transferees purchase principal residences on the same parcel of land. That might apply to the member for Vancouver-Quilchena in terms of two non-related individuals buying property on one piece of land, both eligible otherwise for the high-ratio tax relief. This is an enhancement of that program, because we found that we were unfortunately capturing people who were not intended to be captured. So this is a modest enhancement of the high-ratio tax relief program.
Together, the amendments under Bill 25 clarify taxpayers' obligations under the statute and enhance the fairness of the tax relief program. I now move second reading.
A. Cowie: We recognize that essentially what we're dealing with here is plugging some loopholes. It was quite accurate that in the last few years, if companies were purchasing land, they would just purchase the whole company that owned that land.
Interjection.
A. Cowie: Oh, that's good. People will be glad to know that. I guess we haven't fixed that loophole. As far as the other measures go, I think that we're in agreement. If there is some flexibility regarding people sharing property, then that's to be commended as well. Perhaps we will look at that in more detail at the committee stage.
J. Weisgerber: Generally speaking, we support the intent of the legislation. It's important, though, to notice that the NDP campaigned on the promise that if they didn't get rid of the property purchase tax, they would at least get rid of it for first-time homebuyers. With the act, while I don't have difficulty with these amendments, they have clearly failed to meet their promises during the last election. It should be noted that there was a lot of attention paid and a lot of promises were made. I suppose it's fair for us to say that there were 48 or 50 promises made. We started keeping track of those that the government failed to keep. We've changed our record-keeping system. Now we're just keeping track of the ones that they in fact keep. I can tell you, hon. Speaker, that it is a very short list so far.
[ Page 1652 ]
If I were to take exception to this act specifically, it would be to the change in name. I haven't heard any very rational explanations of why the government has decided to change the name of the Property Purchase Tax Act to the Property Transfer Tax Act. It seems to me that this would add some confusion. The name has become pretty widely known in British Columbia over the last few years. From a very practical sense, I suspect that there will be many places where reference to this on forms will have to be changed. Unless the government can give us some really solid reason why it would want to cause any number of forms to be reprinted, I would think that perhaps the government should think about standing down the change to the title and allowing the amendments to pass under the old act. It clearly is going to be an imposition. It's going to cause, as I said, a number of forms to be changed. There are costs that go with that. I think we found over the years that once the name of an item, whether it be a tax or an act or whatever, becomes accepted in the province.... Quite honestly, I have heard no reason at all for the change of name.
With that, I think I'll pursue that item a bit further in committee stage and suggest that we support in principle the direction the bill is going.
The Speaker: The minister closes debate.
Hon. G. Clark: I thank the members opposite for generally supporting this bill, and I know they have questions which we'll deal with in committee stage another day. I would like to say, however, that the leader of the third party made the point of saying that we haven't kept our promises. I might remind the members opposite that we've been in office only six months, and we've kept many of our promises -- and we have another four years to go. So just watch us, hon. Speaker.
[9:00]
Let me deal specifically with this. It is true that there are two things we'd like to see. One is some relief for first-time homebuyers. We weren't able to do that this session because of the financial mess left behind by Social Credit. The second area was mentioned by the spokesperson across the way from the Liberal Party, and that is the loophole that corporations can use to avoid paying the property transfer tax, the property purchase tax. That's a great concern to me and to the government. Unfortunately, it's difficult to deal with in the legal sense. This move helps a little bit, but doesn't deal with that major loophole which allows large corporations to avoid paying it. I think that's unfair; I think it's inconsistent. I think we want to apply it across the board to all people and corporations evenly. That's not happening today, but it's extremely difficult legally to deal with, and no province, I'm advised, has yet been able to find a way under provincial statutes to plug that loophole.
We are working very hard on that. I would very much like to do both those things before the end of our term of office, because I think it enhances the fairness of this legislation. We have not been able to do that with this bill, however, hon. Speaker, and I move second reading.
Motion approved.
Bill 25, Property Purchase Tax Amendment Act, 1992, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.
Hon. G. Clark: By leave, I move that the resolution for third reading of Bill 19 be rescinded, that the proceedings on third reading of Bill 19 be declared null and void, and that the bill be recommitted in respect of section 2. The purpose of this request is that the intent of the House in the amendment of section 2 be more accurately reflected in the bill.
Leave granted.
Hon. G. Clark: I move the bill be referred to committee.
Motion approved.
FINANCIAL ADMINISTRATION
AMENDMENT ACT, 1992
The House in committee on Bill 19; E. Barnes in the chair.
On section 2.
Hon. G. Clark: I recommit the bill in respect of section 2, Mr. Chairman, because my staff advises that the amendment put forward in committee debate on May 14, 1992, does not fully accomplish that which was intended in terms of placing a $100,000 threshold beyond which all extinguishments require Lieutenant-Governor-in-Council approval.
In committee and in response to opposition concerns, I agreed to introduce an amendment to section 2(1.1)(c). Upon review, this amendment, because it was added to a section which is permissive, does not in fact ensure that all extinguishments over $100,000 will be approved by the Lieutenant-Governor-in-Council. In fact, what we did was amend a section which said "may" rather than "shall." This proposed amendment more accurately reflects the concerns the opposition has, and I hope all members will support it.
Amendment approved.
Section 2 as amended approved.
Hon. G. Clark: I move that the committee rise and report the bill complete with amendment.
Motion approved.
The House resumed; the Speaker in the chair.
[ Page 1653 ]
Bill 19, Financial Administration Amendment Act, 1992, reported complete with amendment.
The Speaker: When shall the bill be considered as reported?
Hon. G. Clark: With leave now.
Leave granted.
Bill 19, Financial Administration Amendment Act, 1992, read a third time and passed.
Hon. G. Clark: Committee on Bill 11, hon. Speaker.
NATURAL RESOURCE COMMUNITY FUND ACT
The House in committee on Bill 11; E. Barnes in the chair.
On section 1.
D. Mitchell: We had significant debate on Bill 11 at second reading stage. Members of this committee will recall that in the House the official opposition proposed an amendment to the bill that would have referred this bill to a standing committee of the House for further study. That amendment was defeated; we're going ahead with the bill. We do have a few specific questions that we would like raise, though.
In particular, on section 1, could the minister indicate to the committee who is actually going to administer this fund that is referred to in the interpretation section? Who will actually be responsible for administering the moneys that are in this fund?
Hon. G. Clark: Firstly, this is John McGuire, a senior economic adviser in the Ministry of Economic Development. He is here to assist us with the bill.
The fund is a real fund with real assets in it and real money. As all funds with real money in them, it will be managed by the treasury branch of the Ministry of Finance.
Sections 1 and 2 approved.
On section 3.
D. Mitchell: Section 3 refers to closures or anticipated closures of businesses. What size of closure would be sufficient to invoke the use of the fund, and when is an anticipated closure anticipated? Could we be a bit more specific? The language here is very vague, very general. If the fund is designed to assist closures or anticipated closures in industries, who is going to decide what size of closure we're talking about and when an anticipated closure is anticipated by the people who administer this fund? I'd just like some clarification.
Hon. G. Clark: First of all, this section has to be read in its totality, not just as one section. The first is to assist communities that are in large part dependent on a single-resource industry. That narrows it to specific communities, but it does leave a certain flexibility for people to make requests on the fund.
I'll give you a good example of an anticipated closure: a mine. Mines have finite lives. What has happened in this province historically, unlike other provinces, is that the government of the day -- the previous administration and the W.A.C. Bennett administration -- had a complete laissez-faire attitude towards mine closures or any other corporate closures.
Let me give you a good example: Kimberley. We know the mine will close in Kimberley. We know that will have an impact on the town. The question is: what, if anything, should the government do? Obviously the government is not in a position to ensure that the mine will continue. It's not in a position to bail out the mine or necessarily even look for other mineral deposits. But it is prudent for the government of the day to try to analyze the situation to see if there are other economic development opportunities in the area and if there are ways in which we can assist in bridging for people who will lose their jobs.
Can we top up pension funds for people so they stay in those communities? Should we provide mobility grants to have young miners move to other mines? Should we assist in retraining at those facilities? Can they access federal government programs? Can they access other provincial government programs? All of those things are prudent initiatives by any government, regardless of ideology. They take place in other parts of the country and have never taken place in British Columbia.
We wanted a vehicle, a way in which we could help coordinate programs that exist in all ministries of government provincially, federally and municipally, to try to make those programs work together in the interest of those communities that are hard hit by closures, particularly those that are anticipated -- which, by and large, I say to the member opposite, is a mineral or mine closure. You should know that a mining stabilization community fund exists in other provinces. It existed throughout the seventies and eighties in other provinces: Conservative, NDP and Liberal administrations. There was some federal assistance in those days for those kinds of programs, and that has never existed in British Columbia. We felt this to be a modest attempt to look at those kinds of communities. Given some of the dramatic impact on the forestry sector, not just the mineral sector, we wanted to expand it to allow for some flexibility to move to assist even those communities impacted by a forestry closure, if it's a dramatic closure.
I want to caution members -- and through them, I guess, the people of B.C. -- that this $25 million will be spent in the first six months if we take too liberal an attitude to its expenditure. It's not meant to do that. We are going to try to limit it to the interest on the fund, to the 0.5 percent of revenue from forest and mineral revenues. We want it to be a top-up fund, a way of coordinating other government programs, particularly federal government programs that exist for those
[ Page 1654 ]
communities, an emergency fund to try to mitigate the impacts of single-industry town closures.
It's a modest step to recognize the commitment we have as a government -- that I think all of us have in this House -- to the regions of British Columbia that for so long have generated the wealth and continue to generate the wealth. In many respects, that wealth is sucked into towns -- if I might excuse myself here -- like Victoria and Vancouver. We want to make sure that the regions of British Columbia that work hard, that generate wealth in British Columbia have a fund that we can use to mitigate some of the worst impacts of some of the resource closures we have faced and will continue to face.
D. Mitchell: In this committee we're not going to revisit the debate that took place at second reading stage of this bill, but we are concerned about the ambiguity of section 3. The minister talks about the need for prudence. Of course, the essence of the debate in second reading was the concern that we in the opposition had about how this fund would be allocated. Section 3 strikes at the heart of what triggers the fund. What triggers pay-outs from this fund? I asked the question. There's a question that I could also ask about section 3(b), which refers to reductions or anticipated reductions in the workforce. Again, what do we mean by reductions or anticipated reductions? How are they defined? Who is going to decide which reductions or anticipated reductions would trigger a pay-out from this fund?
Again, what we're concerned about here is the ambiguity in the language of this act. I think that as legislators -- as members of this committee -- we have to be concerned about legislative draftsmanship. We have bills that are given to us in this House, that are brought before this committee, that are very vague in their language. They're left open to a wide latitude of interpretation. There's nothing very specific here that will guarantee us, as legislators, that the funds will be allocated in a manner that won't allow for abuse.
Of course, during the second reading debate on this bill we talked about our concerns that this fund, which is a maximum of $25 million, could represent a slush fund for the government if it was abused. We want to have some assurances that this fund will not be abused. When we deal with section 3 and what triggers the fund, can the minister assure us that it is not going to be a slush fund? In particular, with respect to reductions or anticipated reductions in the workforce, how will that be defined? Who will decide? That's the question.
[9:15]
Hon. G. Clark: You have my assurance that it won't be abused. You asked for my assurance; I'm delighted to give it to you. In another section of the bill it says "subject to the approval of Treasury Board." No money can be spent from the fund without approval of Treasury Board, specifically, on every item. Every dollar needs approval from Treasury Board. I know that members opposite will hold us to account when we do spend this money. That's the job of the opposition, and we anticipate that.
We anticipate that there will be many demands on the fund. It's going to be difficult, in fact, to resist spending it, because we are in a period of restructuring in the forest sector, and we do have some difficulty in the mining sector. It's not enough money to deal with the kinds of impacts that we're facing. Frankly, if we wanted to try to deal with Cassiar, for example, this fund would be gone -- just dealing with one Cassiar. That's not the intent of this bill.
Obviously it's a relatively small fund. It can be accessed by statutory appropriation, but it's capped at $25 million so you can't let any kind of phony surplus build up over time that can be used or abused. It's limited. Secondly, approval of Treasury Board is required for all spending. And finally, of course, I know that when we do get approval of Treasury Board on the recommendation of the Minister of Economic Development, that money is paid out, and that will be public; and members opposite will be free to judge whether or not we've acted prudently and in keeping with the spirit of the bill.
J. Weisgerber: The minister says that previous governments simply ignored single-resource communities when they got into trouble, and that clearly is not the truth. There are many examples over the last five years that I'm aware of, and certainly in years past, where ministries went in. We often sent teams in, comprising Ministry of Economic Development, Advanced Education and Job Training -- a ministry team approach that I think did all of the things that you're proposing that this act would do. All you're doing by this act is consolidating and imposing a new tax in order to provide the service.
Interjection.
J. Weisgerber: There is a diversion of tax, the minister says. We'll get to that section.
What I want to be clear about here is that I haven't heard the minister talk about doing anything that former governments didn't do through line ministry functions. If there's going to be something, I would be interested in hearing the specifics. But clearly the general statement by the minister was incorrect and untrue.
Hon. G. Clark: From time to time the previous government did respond to mill closures and mine closures. They responded on an ad hoc basis. They usually responded to a crisis that was taking place, and line ministry functions did it within the budget available to them.
That's the distinction. Number one, we set up a special fund with real money in it to deal with this and to anticipate problems that will arise. That is new: there is real money, new money budgeted here; a diversion of funds from the existing tax source. There's no new tax. We have created a new fund to deal specifically with this problem. So line ministries can access the fund. We can access the fund to coordinate programs by line ministry. Secondly, it is now a coordinated response of the government of the day. It is not an ad hoc response
[ Page 1655 ]
to crises that take place. We now have a fund in place to try to look ahead to see what's going on in various industries and communities.
Again, I say that governments clearly did act from time to time. In fact, in the Kimberley example, the government provided some funding for a ski hill. I have no problem with that. That is precisely the kind of thing we might want to do. Frankly, I think.... It wasn't done in a sophisticated way. I don't mean any criticism. It wasn't done in a coordinated way. It was an attempt to try to deal with a real problem by giving some money to a ski hill. What we're saying is: let's have a way in which we can review the prospects and the problems of, say, the town of Kimberley. What are we going to do with the miners who live there when the mine closes? When will the mine close? What options are available to the town? What's going to happen to the tax base? What about tourism-related facilities? Let's look at it in a more coordinated and sophisticated way.
Work was done in the past. I don't dismiss that. From time to time, good work has been done on an ad hoc basis. We want to regularize it. We want to fund it. We want to make sure the commitment is there all the time, ongoing. We want communities that know their town's in trouble, that know their mine is going to close, to be able to access it, and to go through the Ministry of Economic Development to draw on this resource. It's a modest enhancement. I don't try to pretend that it's going to solve all the problems in British Columbia for single-industry towns. It's a modest enhancement, but it is an enhancement. I think it is, by and large, good public policy.
J. Weisgerber: Just to set the record straight, long after the ski hill was created and built, there was a crisis pending in Kimberley -- not a crisis situation, but there was an anticipation. I believe the government sent a team in that did exactly what you're talking about now within the existing ministry framework. The Ministries of Advanced Education, Training and Technology, Tourism and Economic Development all went in, looked at Kimberley, tried to work with the chamber of commerce, the municipal council and the regional district to develop a strategy to deal with the problem. That is exactly my point. What we did then is exactly what you're proposing to do today. I don't have an argument with that, but it's not something radically new. It's not particularly progressive or particularly sophisticated. It's what we've been doing all along.
Hon. G. Clark: The member obviously doesn't disagree with us, then -- that's the point he's trying to make. Kimberley is in fact an example where there was some work done, but that's certainly not a.... I frankly say to you that that is not a common experience in British Columbia. In fact, from my perspective, Kimberley was probably the worst example to use, because there was some government initiative to try to deal with a serious pending problem. That's precisely the kind of thing we want to do here. But the fact is that we have provided more funds here and a source of revenue to make sure that this kind of work is done on a proactive basis.
I'd like to inform members of the House of two things that I am advised of by staff here. First, there will be guidelines published so that it is clear where we might look to make sure the flexibility is constrained somewhat. Frankly, we don't want thousands of applications for funding here for grocery stores that close in small towns, and the like, so we will provide guidelines. Secondly, there will be a bit more of a comprehensive approach. We will be asking the minister of economic communities to come forward with comprehensive proposals -- a bit like the Kimberley example -- for the communities that see closures coming down the road, so we can deal with them in a much more comprehensive fashion than has been done in the past.
K. Jones: When a mining operation closes, how much is normally set aside for reclamation by either the province or the mining company? Isn't there an ongoing responsibility of looking after the process of shutting down that operation?
Hon. G. Clark: I would just say to the member that when we are in the estimates of the Minister of Energy, Mines and Petroleum Resources, I suspect that would be a good place to ask that question.
K. Jones: The fact is that if we're going to put this money out from the taxpayers to subsidize this operation.... We already have an example where, knowing that there is going to be an end to a mining operation, there is an ongoing responsibility of the mining corporation, when it's going through its good years, to make payments on an ongoing basis. Why should the taxpayers have to pick up this cost at this stage? Why isn't this a responsibility of the ongoing mining operation? They know that they're going to come to an end. Why aren't there provisions, as there are for reclamation, for the moving or rearranging of the people involved in that mining operation?
Hon. G. Clark: Unlike that member, and perhaps the Liberal Party, we on this side of the House have a commitment to people who work in those single-industry towns, who have created wealth in British Columbia, worked all their lives for British Columbia and have generated income which has been used for the cities of this province. We want to give some money back to those communities and those workers so they can be retrained, so they can move, so they can retire in their communities and so we can restore or help those communities in tough times when mining communities close. That's the position of this side of the House. If members opposite don't like that, then I suggest the members vote against this bill.
C. Serwa: On section 3, I think the minister knows that all of these services that he continues to talk about are presently provided with a variety of federal-provincial agreements. That is a fact.
We talked briefly about Kimberley and what has transpired there. Here is a community which over a long period of time knew the mine would end.They have taken all sorts of advantages with community
[ Page 1656 ]
plans, with revitalization, with planning for the future, and that's worked well. Money was available for the province.
In my constituency, Brenda Mines shut down fairly recently. In that particular case, all sorts of federal-provincial agreements came into place such as the environmental clean-up -- of course, that was a mining company responsibility through provincial legislation -- and the employee relocation, which is mostly a responsibility of the mine under the union agreement with its employees; those who wished to be relocated were relocated to other operations. There was another federal-provincial agreement, for example, with job retraining programs. That's presently in place and a number have taken advantage of it, have been retrained and have found jobs -- rather than heavy-duty mechanics they have become automotive mechanics, and are now working in the community in which they wish to continue to live.
Other areas are looked after by these federal-provincial agreements. There is even one relating to the early retirement of older employees, which is in place and which is utilized so that they can take early retirement.
For the life of me, as I said earlier in second reading, no one can disagree with the concerns. I don't know why this bill is being brought forward, because everything is addressed -- unless the minister has some other design for utilization. It's obviously apparent to the minister that if the only economic opportunity is completed -- say the mineral resource has been extracted -- then if we have a community, it cannot be chronically dependent upon the taxpayer of the province. They have to develop their own resources. So I don't know why this is required. The infrastructure is in place even in a corporate community such as Cassiar. Without this program, Cassiar was still looked after. There were a number of obligations. It was a concerted choice on the part of government to inject money to keep the facility operating, and I appreciate and respect that. I wish, however, that it had been just as major a commitment to keep the mine or to encourage its continued operation. I think that's really important to the economy of the province. The minister says that it will cost money, and I agree with that. The minister is absolutely correct. It's an investment in the future. What we're looking for is cash flow where we can generate revenue for the provincial coffers so that we can continue to provide services.
The reality is that all of these things were always looked after. Cassiar is a good example of the company being responsible and relocating employees. The provincial government.... Almost everyone up there was unionized, and part of their union contract was for funds for relocation -- transportation out. The provincial government has looked after a number of employees up there who were not covered by such agreements, and that's entirely appropriate. In the end it wasn't a big thing.
[9:30]
If the mine ceases operation, this legislation certainly doesn't have the type of depth to continue to keep that type of a community operating. The community has to depend on its own resources for survival.
I don't know what the intent of this bill is or this particular section, because as I've said, all of the things are provided for. There's no dispute in that, nor is there any dispute in the Legislature that all of those requirements are meaningful and the end result of a responsible mining corporation and a responsible federal and provincial government. So there's no argument there. They're all provided for, minister.
Hon. G. Clark: The member is saying that we're already doing enough for small communities that are hard-hit by mill or mine closures. We say on this side that we're not, frankly. We're not doing enough for the workers and the people who live in those communities.
The member then goes on to say that we are, and he commends us in some respects for giving money to Cassiar. There was no pot of money for Cassiar. That was out of contingency funds. That was an ad hoc program to deal with a crisis that should have been foreseen by a government that should have been doing the kinds of planning and work which we now can do by accessing this fund. We're being upfront; we're putting it before the House; we're debating it. That didn't happen with Cassiar. That was never debated in this House except after the fact. We went and accessed funds.
I might say also to the member opposite that I'm surprised at this, because, yes, there's a union agreement that provides some benefits to those workers as a result of mill closures. We are honouring that even though we don't have to, because we're not really the owner of that mine. We've also extended it to all the small business owners and the people who aren't covered by union collective agreements, because we're concerned about that on this side of the House. If the member opposite is saying that only those with union collective agreements should be fortunate enough to be covered in a mill or mine closure.... That's not the position of this administration. We want to help all of the people in those communities access the programs that are available to them.
What we're saying -- and I'm not sure it's clear to the members opposite -- is that a huge amount of money is not going to solve these problems. You're right; there are a lot of programs in existence today. But in some respects they're out there, and they sometimes fall over each other. We need to get in there, as we did with Cassiar, to get on the ground and coordinate all the provincial and federal programs that we can access to help the communities.
There is no funding in any line ministry right now available to do that. You can do that; you can access contingencies as we did in Cassiar. We're suggesting let's not do that. Let's have a fund there that demonstrates the government's commitment to those people in those communities. Let's try to address it in a sophisticated way. Let's make sure we can access.... We can put people on the ground to coordinate these various programs that exist at the federal and provincial level to help those people, union or non-union, in those communities hard hit by a downturn in the resource sector.
[ Page 1657 ]
G. Farrell-Collins: I always get very nervous when I hear the Minister of Finance stand up and say: "You can take my word for it." This is the same gentleman who wrote the last budget that broke virtually every election promise that his party had made in the last five years. The people of the province get very nervous when they hear that also.
J. Beattie: That's leadership.
G. Farrell-Collins: I'm glad you're proud of it, because no one else is.
The minister has said a couple of things today that I'm a little concerned about. I don't know if it was a slip of the tongue or what it was. I just ask for some clarification before I go too much further. The minister said that they would only use the interest out of this fund. I'm wondering if that was intentional or just a slip.
Hon. G. Clark: Let me make it clear. We can liquidate the fund; we can spend it all. That's permitted. We don't want to do that. Even if we did that, of course, that wouldn't be a horrendous amount of money, and it is fixed, so it's not an unlimited pot. It's capped. No other fund is really capped in government. It's capped at $25 million. We've capped a few other groups, but not funds. Our intent is not to spend it.
We do have income coming into the fund from two sources: one is interest, and the second is the 0.5 percent of revenue we receive from basically forestry and mining. We'd really like to try not to use up most of that principal in the fund, but maybe spend the income coming into the fund in various years. The purpose is to try not to let the fund grow so large that people will tap into for it a variety of sources, but to keep it limited.
G. Farrell-Collins: I understand that there's the $15 million that's been put in as seed money, anyway. Then there's the renewable amount, which includes the 0.5 percent, and then the interest on the fund. You capped it at $25 million, so that any growth in that fund would be diverted to general revenue afterwards.
The minister talked about this fund being small and apologized for its smallness. He said it was really not adequate to do things that you want it to do. What would be wrong with allowing this fund to build up to some amount -- and I'm speaking hypothetically here -- that would amount to something and that the ministry and the government would be able to do something substantial with and intercede in cases where there are real problems in communities? As it is now, with $25 million -- by reading the act and the comments the minister just stated -- it appears that annually there will be roughly $10 million to be accessed. Approximately $5 to $10 million will be accessible annually without depleting the fund or having it exceed the $25 million.
It seems to me that that becomes almost a token gesture to a lot of these communities. My biggest concern is that the government then feels that it has this fund; it can go around to the various communities in this province that are experiencing problems and say: "We've developed this fund. Isn't it nice of us to develop this fund? Haven't we done a wonderful thing?" Yet they will not have any sense of security for those communities -- no real sense to step in and actually help out when things come along. I'm worried that the government may fall back on this fund and become lax and lazy and say: "There's no need for us to develop an industrial strategy for a longer term." I know that this minister especially has ridiculed numerous times the Liberal caucus's call for a long-term plan -- a 60-year plan -- for this province.
An Hon. Member: Sixty years in the wilderness.
G. Farrell-Collins: Again he and the members opposite ridicule it. It's very intriguing, because if we had a 60-year plan, perhaps we'd be in better shape with Cassiar. Perhaps we'd be in better shape in the mills and logging towns in this province. We know where the minister comes from.
I'm concerned that by not allowing this fund to grow in a natural way it becomes mere tokenism. When the minister walks through towns like Cassiar once they're gone and somebody says, "Hey, buddy, you got a dime for a cup of coffee?" he can reach into his pocket and pull out a dime, and it doesn't come out of his own money. It comes out of government money. It's nothing substantial. I'm concerned that it's going to make this government fall back and be lazy and not develop any sort of industrial plan for this province.
Hon. G. Clark: The 60-year election plan of the Liberal Party is that they might form the government 60 years from now. I'm not sure whether they'll attract too many converts with that plan.
I want to make the point, first of all, that this is in fact an integral part, the beginning, of an industrial strategy. The limiting of the fund is precisely for the reasons that you suggested it should be larger: that is, this is a fund to coordinate existing programs. If we have more revenue, then it probably should go into the line functions. It should go into the job training function, into Economic Development to do economic development programs, into the job protection commission and the like. We do have those programs. What we desperately need.... It became obvious to us with Cassiar, for example, that there's no place to coordinate these myriad government programs at the federal and provincial level to deal with specific problems in resource communities. We have this fund in order to begin the coordination of those existing programs.
We could allow it to grow bigger and bigger, but then the argument would be that you'd use the fund to supplement line programs, and that's not what we're trying to do. We don't want it to replace a kind of industrial strategy. We don't want it to replace a program of the line ministries. We want it to be small so that we can have some soft costs, management costs, to get in on the ground in those communities; to work with those communities on economic plans for their long-run viability; and to work with those communities to access other government programs if they exist, like the Community Futures program of the federal govern-
[ Page 1658 ]
ment and the like. That's the very reason why we've capped it: to make sure that it doesn't become a substitute for an industrial strategy. It's in fact an integral part of building strong communities in British Columbia, particularly those impacted by the resource sector.
G. Farrell-Collins: The minister has talked at some length about this fund being used as a means to provide the coordination and the development of programs or the coordination of various programs that already exist. Is the intent of this fund to be a fund which the government can draw on to hire people to go out and plan for a process, or is this fund to be used to actually be cash in the pockets of the people and the industries in these one-industry towns in the province? Which is it? Is it both, or what's the direction?
Hon. G. Clark: No. In fact, it's more the former. You're quite right, this fund will not be.... Well, it could be both, frankly, but the majority of the fund is in fact to have the people in there to do some planning, to hire some people.
In the Cassiar case, for example, we had to hire consultants to go in and help us with different aspects of it. Again, there was nowhere to draw on that. This fund will allow us to do that. But there's not enough in there, as members said, to actually pay people to move, etc. It's more to try to bring together the various programs.
G. Farrell-Collins: I do have a particular question in my role as critic for Labour and Consumer Services. It came to my attention sometime in the early part of this year or late last year that there was indeed a substantial fund available, the program for older workers' adjustment. That program was not being utilized at all by this province. I assume this is the type of fund that any staff hired under this program will be out there looking for, to access and to implement in these various communities.
Unfortunately, the pilot program, while it seems to be a good one.... It's 30-cent dollars from the federal government, so it's fairly advantageous for the province to access it. There was apparently, in the last government anyway, no commitment of funds to this program to allow it to actually do any good work. Is this fund intended to be hiring staff to sit in an office somewhere in Victoria or some region around the province to coordinate all of this, or is it going to be the money that would pay the provincial side of the pilot program?
Hon. G. Clark: That's an excellent question. By and large POWA is funded by the Ministry of Advanced Education, but this fund could be accessed as actual money to go to match federal funding for POWA. It's not our intention at all to have -- and believe me, we will not have -- people sitting in Victoria in offices funded by this program. This is grass-roots community economic development, to the extent that there are studies done on economic development in the communities, and even then we'd like to make it matched funds with the federal government, like in this fund, so that we can put together community plans and economic development strategies. But it can be used -- and I suspect it will be used from time to time -- for precisely that purpose: to actually draw down the fund to match funding with POWA in particular areas of the provinces where it might be beneficial.
G. Farrell-Collins: So if I can be clear on that one, the main intent of this fund is to fund studies and community plans and to put people right into the communities to do long-range planning for those communities as to the transitions that may take place when that single industry or one of the few industries that are sustaining the economy of that community.... Only on rare occasions would it actually be cash for programs that would actually go into the people in that community.
My concern is, is this fund going to end up being a sort of...? Some of the things we hear every year are nightmares from the federal government, where they funded $75,000 to study some fish in the Amazon and another amount to do this. I'm concerned that we're going to end up with a bureaucracy and a group of university professors, who are going to be feeding off this fund for a long period and have just what the government has criticized the last government for having: a bunch of ad hoc FTEs, people subsisting off this fund instead of having it actually producing and putting money back into the communities.
[9:45]
Hon. G. Clark: I agree with you, and believe me, that's certainly not going to happen. We are not using this just to fund airy-fairy programs by professors or otherwise. It's real; it's to fund real programs on the ground and real planning for crises that take place in communities. We have many right now in some of our forestry and mining communities. So believe me, we don't have the money in this fund to spend on long-range airy-fairy programs. This will be used to try to mitigate some of the impacts in our resource communities in British Columbia.
D. Symons: I generally have no trouble with this bill at all. As a matter of fact, I think it's rather commendable of this government to be considering communities that are having difficulty because of the closure of a resource industry. It should really be looked after by the community and by the business that's closing down, but if that has not happened, I think the government should take up the slack, as seems to be happening here.
My hon. colleague brought up a question under the purpose about some of the inaccuracies -- not inaccuracies, but looseness of terms here. I think you made reference at that time to there being guidelines. What concerns me is that if the bill needs guidelines to make it precisely understood, then maybe the guidelines should be provided at the same time as the bill, so we can see exactly how it's going to be presented. This leaves it a bit backwards. If you're going to give us the guidelines after, we're giving you a blank cheque.
[ Page 1659 ]
Could those guidelines be tabled now, before we pass this bill, please?
Hon. G. Clark: No, they can't be tabled right now. I suggest that if members opposite are concerned about this, then they should vote against the bill.
L. Fox: As the minister may well remember, I was one of the few members on the opposition side who voted in favour of this bill at second reading. I voted in favour of it because I thought it was going to be a proactive measure. From listening today, I find that it's going to be reactive rather than proactive. I'm extremely concerned. When I spoke on this at second reading, I suggested that in fact there were opportunities in many single-resource communities....
Interjection.
L. Fox: Some members on the government back benches might think this is a funny matter, but it's not. Indeed, it's very serious.
There are opportunities to diversify the economy in some of those smaller communities. Through diversification, that same economy could provide jobs to the people of Cassiar and those other areas which are losing their resource and their opportunity. I asked the Minister of Economic Development whether or not, for instance, this bill would provide opportunities for the cogeneration plant in Houston to come to a completed form, which would help diversify the economy of Houston and look after the loss of jobs from the shutdown of Equity Mining. I was not given any indication at that point, because there was no dialogue permitted, but I hoped that that minister would be here today to address specific issues.
I was also concerned about the trigger mechanism, as a member just previously suggested. What triggers access to these funds? At what stage would a community find itself in a position to apply for help under this particular bill?
Perhaps I'll just leave those two issues for you to answer.
Hon. G. Clark: Let me say, first of all, that this is both reactive and proactive. If you read the bill, it is to assist communities that are largely dependent on single-resource industries to adjust to severe economic dislocation. There has to be some kind of a crisis to access the fund. That's the first point.
Secondly, we want to go beyond that and try and build on those communities to see where there are opportunities for economic development. I can't prejudge the outcome of that. The minister responsible and his staff are reviewing it. I suspect that the kinds of things you're talking about are precisely the kinds of things that are contemplated by the bill. Having said that, we have to review it in the context of competing demands on the fund from other communities that are hard-pressed. We have to work it through and see where we can move.
The first response is a kind of reaction to what's going on -- impending closures. We're trying to deal with it. Then we want to go beyond that and try to build in a proactive way. Some of your concerns are directly dealt with by the way we intend to operate with respect to this bill.
L. Fox: I start to have concerns when I hear that perhaps the contribution to POWA could come out of this particular $25 million. We've got all of these questions about what this bill could do with $25 million. You're going to be some kind of magician to stretch that $25 million in all the areas that you have suggested you're going to.
Interjection.
L. Fox: For the information of the House, and certainly for the information of the Labour critic from the Liberal Party, POWA was funded last year by the administration. Although from a provincial perspective it took some difficult times in addressing it, it was funded. There's a group of older employees in my community who benefited from it.
Once again, I am concerned about diversifying the economy. I hate to see us get into a crisis where we're literally shutting down an industry before government reacts in order to diversify the economy of a single-based community. As I explained when I spoke in favour of this at second reading, what it really takes in order to diversify the economy of the community is confidence. And if you wait until the time that you're literally shutting down a resource, you have a very difficult time instilling the confidence in the local community in terms of the investment that could be made in business, industry and other job-creating mechanisms. So I would hope that this particular act would react before we see a Cassiar situation. We know, for instance, that Equity in Houston has two more years to go. I would think it would be imperative that this particular lot of money kick in and help the cogeneration and other opportunities that are there in order to help look after that employment base that's presently there.
Hon. G. Clark: Very briefly, let me say first of all that this is only one fund. We do have a Ministry of Economic Development, and we have other programs in government -- like POWA in the Ministry of Advanced Education. The members in your front bench were making that point. This is a small but important part of an overall industrial strategy to diversify a resource base. Please don't look to this fund to solve all the problems of resource diversification.
Interjection.
Hon. G. Clark: No, and I've tried to be cautious in saying that. But I would say that I think your comments are well taken. I think they're basically in the spirit that this bill implies, but it's only part of the solution for some of those communities.
C. Serwa: I suppose if the minister continues with his corporate tax and the mineral tax, which is another
[ Page 1660 ]
flat tax, pretty soon we'll have a crisis in all of our resource communities throughout the province.
Does the minister contemplate utilizing any of the revenue from this particular fund for the actual organized communities to perhaps pay down some of the infrastructure -- let's say sewer or water or something like that? Is there any potential of doing that, or is that outside the proposed guidelines of the fund?
Hon. G. Clark: No, that's beyond the fund.
Section 3 approved.
On section 4.
J. Weisgerber: I want everyone to understand that the $15 million that's coming out of the B.C. Endowment Fund was in fact money that was set up in the privatization account. What we have now is money that has been moved out of a fund into a renamed fund, and from that fund into something called the Natural Resource Community Fund Act.
We have a minister who says, first of all, that we went into Cassiar and could only deal with that $15 million crisis -- which I believe the government, at least in part, brought on itself -- by going to contingencies. That was the only solution, but he suggested that there would be another solution once this act was passed. I would suggest to you that it will only be a solution one time, because you'd clean out most of the money in this act in dealing with the Cassiar initiative, and you would have not taken money from taxation, but depleted a fund that is established here.
I think that you can't have it both ways. You can't say that we're creating this fund to deal with problems like Cassiar -- i.e., a $15 million undertaking -- and then say: "No, we're only going to use it to send in consultants and others to deal with the problem." I would suggest that if that's the approach, you still have to go to contingencies with Cassiar kinds of problems.
All I want to do is recognize that the money coming into this fund is in fact money that was set up in the privatization account initially.
Hon. G. Clark: The member is correct, but let me also say that you're not totally correct. The privatization benefits fund came into the government and was put into a fund, but it was not off-book; it's not a pot of money over here. It's actually income to the government which was booked in previous years. Spending out of the privatization benefits fund -- or now the endowment fund, or this fund -- inflates our deficit. We don't have to access contingency, but if we access this fund it goes right on the bottom line. It's not like we can spend it with impunity; we cannot. It's all part of the consolidated revenue fund, and it's all there.
You're quite right that if we liquidate the endowment fund or this fund, then we've inflated the deficit by that same amount. We obviously have to be prudent when we do that. That's why, if you look in the budget, you'll see the full amount in the fund and you will not see the full amount in the expenditure side. We're not anticipating spending the full amount. If we do spend the full amount it increases our deficit, and any replenishment of that fund will come out of revenue which could be allocated to other uses.
You are quite correct; the genesis of the money is from selling the public assets.
Section 4 approved.
On section 5.
J. Tyabji: I'll try to keep this brief, because I know it's running late. I did have a question on section 5. The minister mentioned that he does not want this to be a supplement to line programs, and yet in section 5 he starts talking about....
Interjection.
J. Tyabji: I'd like a little bit more specification. He also referred to it as a coordinating fund. He also referred to some other provincial jurisdictions where they have stabilization funds similar to this. What I'm trying to get a sense for is: exactly what is it? We're all over the place in section 5 with the Ministry of Economic Development coming into play.
Hon. G. Clark: With respect, if you look at section 5, it's pretty clear: "...for costs of training and retraining persons affected by...economic dislocation..., for job creation and job maintenance initiatives in support of local and community economies, for worker relocation programs, as a supplement to the Local Government Emergency Account...." Those are precisely the things that I've been mentioning in section 3 that are to be funded. That is not to replace those funds or those programs that already exist in those areas, but to top them up and enhance them, coordinate access to them and provide funding to coordinate. This section here very clearly tries to spell out exactly the kind of programs that we want to fund out of this initiative, and they're completely consistent with what I've been saying all evening on section 3 and again on section 5.
[10:00]
J. Tyabji: The minister mentioned the sum of $5 million earlier. I just want to get a confirmation: does he really think that he can do all these things that he has just mentioned and keep it to about $5 million in expenditures? Can we hold him accountable to that general number?
Hon. G. Clark: I want to be clear: this fund does allow the government to spend the $25 million that's in it. We can spend it up to that; that is the amount of the fund. It may well be spent. If there is another Cassiar, then we will deal with that as a government, as we've tried to deal with the Cassiar situation. We are hopeful that that won't be the case. We want to make sure that we try to be prudent and use the funds as an increment, as a way of topping up existing funds. I anticipate the opposition would question us on this next year as to how we've allocated moneys from the fund.
[ Page 1661 ]
G. Farrell-Collins: The minister talked about this fund being used to top things up. All the minister is doing is taking an amount out of all the ministries, putting it in a bowl and mixing it up, and then he's going to put it back in to top them up. What is the intent of this, if it's just money going from one place to another place, back and forth all over again? I don't understand what it is that the minister is specifically trying to do here that's different from what's been done before.
Hon. G. Clark: What we're trying to do is get the communities to work on comprehensive community economic development plans, to work with them to provide the kinds of resources available so we can work with communities in crisis in British Columbia -- and there are many of them. In fact, as I said before, all of the programs in the past have basically been ad hoc. We have some serious problems in our resource community. This side of the House is committed to the workers and the people who live in those communities, and this is an example of real money in a real fund that people can access to deal with these very difficult times in the regions of British Columbia.
D. Jarvis: Mr. Chairman, I'd like to ask the minister: how many one-industry towns are there in British Columbia at the moment?
Hon. G. Clark: I'm sorry, I don't know the answer, but I'm sure the Minister of Economic Development can provide that for you.
Section 5 approved.
On section 6.
C. Tanner: Mr. Chairman, I have problems with this bill for three reasons: (1) the government, for the first time, after criticizing this sort of practice for years and years -- particularly the last five years -- is bringing in a special fund; (2) when the member for Richmond Centre asked him to explain the regulations and asked him to bring in the regulations and tell us some guidelines as to how he's going to spend it, he told him, "If you don't like it, don't vote for the bill," and I don't think that's a good enough answer; and (3) the minister is penny-anteing this bill to death. It's on section 6 that it proves itself. When there's an excess in the fund, he wants to take it out. I think that's the wrong approach. I think you should match the money that you've got there by adding $25 million from lottery funds and really get something going that you can help these people with. Because after all, you've thrown it into general revenue anyway, and this might be a better use for lottery money.
Hon. G. Clark: Hon. Speaker, I didn't mean to be flippant when I said, "Vote against the bill," but given the concerns that members opposite have, maybe you should vote against it. On this side of the House, we have a commitment to those communities. We've graphically displayed this commitment with real money. This is not a special account as set up by the previous administration. This is a special fund with real money in it which we can access to help real people who create the wealth in British Columbia, and that's the regions.
Section 6 approved on division.
Sections 7 and 8 approved.
Title approved.
Hon. G. Clark: I move the committee rise and report the bill complete without amendment.
Motion approved.
The House resumed; the Speaker in the chair.
Bill 11, Natural Resource Community Fund Act, reported complete without amendment, read a third time and passed on division.
Hon. G. Clark: Great progress tonight. I'd like to thank all members of the House for their cooperation. With that, I move this House do now adjourn.
Motion approved.
The House adjourned at 10:07 p.m.
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