Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 21, 1992

Volume 3, Number 11

[ Page 1705 ]

The House met at 2:04 p.m.

Hon. L. Boone: It is my great pleasure today to introduce, in the members' gallery, British Columbia's carillonneur, Herman Bergink. Herman is accompanied by his wife Maria and Baron Marnix van Aerssen, consul general of the Netherlands in Vancouver. The Netherlands centennial carillon, just across the street at the corner of Government and Belleville, was a gift from the people of Dutch origin in British Columbia to mark the Canadian Confederation centennial. Queen Juliana of the Netherlands unveiled the cornerstone at the site of the carillon tower in 1967, and the ringing-in ceremonies took place in 1968. We are now celebrating the twenty-fifth anniversary of the carillon. All of this time, Herman Bergink has happily played his fine music and lovingly cared for the carillon tower and its 62 bronze bells. Herman will be retiring at the end of this month, and I know that all the members of this House will join me in wishing him a most enjoyable retirement. Herman and Maria, all the best from the people of the province of British Columbia.

P. Dueck: It is my pleasure today to introduce students from School District 34 in my constituency in the central Fraser Valley. They are somewhere in the precincts. I don't believe they are in the House at this time; they may be in a little later. They are from Margaret Stenersen Elementary School and Sandy Hill Elementary School, and they are accompanied by teachers Ms. Constantinidis and Ms. Horner. There are about 50 students and also some parents accompanying them. Would the House, on behalf of the hon. member for Abbotsford and me, please welcome these children to the city of Victoria.

Hon. B. Barlee: It is my pleasure to introduce today, in the members' gallery, Governor Guo Shu Yan of historic Hubei province, People's Republic of China, and members of his delegation. This delegation is also accompanied by Mr. An Wen Bin, consul general of the People's Republic of China in Vancouver. At the present time, Hubei province is staging a trade show in Vancouver, and the Premier and I had the great pleasure of enjoying the company of the Governor and the consul in Vancouver. Welcome to British Columbia.

V. Anderson: Today we have visiting with us about 40 students from John Henderson Elementary School in the riding of Vancouver-Langara, with their teacher, Mr. A. Greaves, and parents that are accompanying them. Would the House please make them welcome.

G. Brewin: I would like the House to make welcome the following members of the B.C. Council for International Cooperation, which is a provincial coalition of 30 agencies working in international development. They will be attending question period today, and I presume they are up behind us there.

More than 45 representatives within this group will host a reception this evening for MLAs in the Ned DeBeck Lounge from 6 to 8 o'clock, and everyone here is invited.

I'd like to have us all welcome Gary Henckelmann, who is the chair of the B.C. Council for International Cooperation, representing Canada World Youth; Gulzar Samji, with the United Nations Association; John Harper of CUSO; and Margaret Argue and Stuart Wulff of the South Pacific Peoples' Foundation. Would the Legislature make them welcome, please.

S. Hammell: I'd like to introduce two grade 5 classes from South Meridian Elementary in Surrey. They are accompanied by two teachers and some parent supervisors, my niece Amber Albrecht and my daughter Sage Aaron. I'd like to make special mention of one of the teachers; she comes from a keenly political family, and she was my campaign manager: my sister Val Hammell. Would the House please welcome all of them.

F. Randall: In the gallery today we have Del Carrell from the constituency of Burnaby-Willingdon, which is your home constituency, Madam Speaker. Del Carrell is the daughter of Vincent Segur, who was known as Bill Segur. He was a locomotive engineer, and he was elected three times as a CCF MLA in Revelstoke. He was first elected in a by-election in 1943 as a member of the CCF. He was re-elected in the general election of 1952 and again in the general election of 1953. He passed away in 1965. He served with a number of well-known CCF MLAs who were elected in the 1941 election, and a few of the names that were involved with him at that time were: Ernie Winch, Colin Cameron, Sam Guthrie, Herbert Gargrave, Dorothy Steeves, Herb Herridge, Bernard Webber, Charles Grant MacNeil, Grace MacInnis, Laura Jamieson, Wallis Lefeaux, Arthur James Turner and Harold Winch.

Del's mother, Marjorie, is 95 years old, and she is in the New Vista Care Home, which was founded by Ernie Winch. Marjorie is an honorary life member of the New Democratic Party. Del Carrell is accompanied today by Irene Player, a New Democrat from North Burnaby, and my wife, Aileen Randall, from Burnaby-Edmonds. Would the House please make them welcome.

I have another introduction. In the gallery today, from that great municipality of Burnaby, we have the director of engineering. He is accompanied by his wife, Maggie, and their children Jamie, Cameron and Jennifer. Mr. Craig Sinclair, wherever he may be, is up there -- I don't know. Anyway, would you please make them welcome.

Hon. B. Barlee: In the gallery today somewhere is my very hard-working executive assistant, Heather Kelliher, from Okanagan-Boundary.

G. Farrell-Collins: I would ask the House to welcome a group of grade 10 students and their teacher, Mr. Greg Tener, from D.W. Poppy Secondary School in Langley township.

[ Page 1706 ]

Hon. E. Cull: In the gallery today is one of my constituents, Marg Argue, and I'd like to ask the House to make her welcome.

Hon. C. Gabelmann tabled the annual reports for 1989-90 and 1990-91 of the B.C. Board of Parole.

Introduction of Bills

LIMITATION AMENDMENT ACT, 1992

Hon. C. Gabelmann presented a message from His Honour the Administrator: a bill intituled Limitation Amendment Act, 1992.

Hon. C. Gabelmann: Hon. Speaker, I am pleased to introduce Bill 38, the Limitation Amendment Act, 1992. The purpose of this bill is to permit persons who have suffered childhood sexual abuse to pursue legal action at any time. The bill reflects this government's intent to better address the crime of child sexual abuse and provide avenues of support to victims. The impacts of childhood sexual abuse can be long-lasting and can often serve to prevent a victim seeking legal redress. This bill ensures that survivors of these incidents have no time limitation on their right to bring civil action.

I am pleased to say that the British Columbia Legislature is a leader in Canada in considering this important legislation. I commend the bill for consideration of the House and urge its passage.

Bill 38 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

[2:15]

Oral Questions

TASK FORCE ON NATIVE FORESTRY

G. Wilson: My question today is to the Minister of Aboriginal Affairs. It pertains to the Task Force on Native Forestry, which made a series of recommendations to cabinet on the ways of increasing the involvement of aboriginal people in all aspects of forestry. As the minister overseeing aboriginal affairs, does he support the task force recommendations, specifically with respect to tenure, establishment of annual allowable cuts and funds for the enhancement of silviculture?

Hon. A. Petter: The task force report contains many constructive suggestions. The government received the report and is continuing to review its recommendations on an interministerial basis. I expect there will be a response on behalf of the government in the near future, which will deal with the items raised by the Leader of the Opposition and with others matters that form the substance of the report.

G. Wilson: Hon. Speaker, it's with respect to the interdepartmental review that is underway that I put my supplementary question to the minister. The opposition has learned that the cabinet committee has completed this review, and that the task force recommendations on tenure, silviculture and the allocation of annual allowable cuts have not been confirmed and are not being supported. I wonder if the minister could confirm the existence of that report, and whether or not the recommendations of this task force are being supported by this government.

Hon. A. Petter: The Leader of the Opposition knows that I'm not in a position to discuss cabinet deliberations. However, I would suggest very strongly that he question his own sources before making statements of that kind in the House.

The government is not yet in a position to make known a response. We are still working on a response, and at that time I -- along with other ministers -- will be happy to make it public and debate it with the Leader of the Opposition.

G. Wilson: The Leader of the Opposition's source is the Intertribal Forestry Association of B.C., on May 20, 1992.

Will the minister confirm today that he does indeed support the recommendations in the task force report on tenure, establishment of allowable cut and enhanced silviculture? Can he confirm through this House to the members of the Intertribal Forestry Association of B.C. that the report that was tabled and its recommendations will be put in place by this government?

Hon. A. Petter: To my knowledge, the Intertribal Forestry Association is not privy to what goes on in cabinet or to comment on the position of the government.

As I said, the government is reviewing that position. We will have a substantive response to a report that contains many excellent suggestions. I look forward to the time in the very near future when we will be able to share that with the House and with the people of British Columbia.

NATIVE POLICE

J. Weisgerber: Hon. Speaker, I have a question to the Attorney General. Yesterday the Attorney General advised us that tribal peacekeepers -- Indian policemen -- acted off reserve only in concert with the RCMP or at the request of the RCMP. Can he advise us that the province has assured itself and British Columbians that the training of these policemen -- tribal peacekeepers -- is similar to that received by the RCMP, so that British Columbians can feel a sense of confidence when approached by these peacekeepers at roadblocks, etc?

Hon. C. Gabelmann: Yesterday I indicated to the House that I wanted to come back with a fuller answer on this entire topic. I had hoped to be able to do that today, but the briefing material that I was given, as recently as half an hour ago, wasn't sufficient, in my mind, to answer all the questions that I have. As a result, I intend to come back early next week, I expect, to answer the question in full, including this question.

[ Page 1707 ]

POLLUTION CONTROL

J. Tyabji: My question is to the Minister of Environment. This government has a record of floating trial balloons before they bring in legislation. My question is regarding the trial balloon to institutionalize pollution. Does this minister support his ministry's discussion paper? Given the Premier's penchant for credit cards, can the people of B.C. expect a new made-in-B.C. credit card called Pollution Express -- a black plastic card with a skull and crossbones and a million-dollar credit limit to pollute the air, water and land?

Hon. J. Cashore: I'd like to thank the hon. member for that question. I hope she's aware that on February 6 I sent her a discussion paper entitled "Waste Discharge Permit Fee System." Two weeks ago I sent her another discussion paper, entitled "New Approaches to Environmental Protection." If this hon. member is saying that the process of putting forward a discussion paper is flying trial balloons, then that is really unfortunate, because that is an appropriate and time-honoured process for involving the public in appropriate public policy decisions.

I would point out that if she had read those two discussion papers, which I think is her responsibility in her role, she would have raised this issue much earlier, because it's an issue that certainly is worthy of public dialogue. I thank the reporter for the Vancouver Sun who had the headline that has drawn it to your attention; I appreciate that very much.

The fact is that our goal is to achieve zero pollution. This is one of an array of recommendations that is out there for consideration so that you, hon. member, can do what you would like to do, and that is give us your advice.

J. Tyabji: I can assure the Minister of Environment that I have read the documents. There are many problems with both of them, although some of the objectives are commendable.

In the past six months we've seen the aerial gypsy moth spray, cancellation of the Environment Youth Corps, continued problems with effluent discharge on the Island, logging of Blue Lead Creek despite it being under study, logging of the Walbran despite it being considered for a park and, the final outrage, the proposal to make pollution a viable economic initiative for B.C. My question to the minister is: would he prefer a different portfolio?

Hon. J. Cashore: It's a question of whether the glass is half empty or half full. I have no hesitation saying to this member that this government has done more for the environment in the last six months than had been done in the last 16 years. I understand that it's the role of this member to bring out constructive criticism. I think that's appropriate to do, but that should be couched in the kinds of terms that put forward the reality that's out there. The reality is that the Commission on Resources and Environment, the Parks and Wilderness for the '90s strategy, lowering the annual allowable cut, the commitment to completely revamp environmental legislation in the province during this term in government.... Hon. Speaker, the glass is now full.

The Speaker: Final supplemental, member.

J. Tyabji: I would say to this minister that given the record of the past administration, I can only hope that an NDP government would do better in six months than they did in six years.

My question to the minister is: if he believes his record is so good, will he join me on the steps of the Legislature at 4 o'clock to meet all the environmentalists who are coming here to tell him what they think of his record?

The Speaker: The minister for a brief reply.

Hon. J. Cashore: I'm very pleased to hear that the hon. member is going to join me on the steps of the Legislature.

ICBC APPOINTMENTS

G. Farrell-Collins: My question is to the minister responsible for Bob Williams. It concerns the appointment of Ms. Robyn Allan as president of ICBC. Ms. Allan's credentials as an economist and a community leader are beyond reproach, yet I believe her experience in the insurance field is sparse at best. Can the minister be assured that Mr. Williams has chosen the best person for the job?

Hon. G. Clark: I assume that's directed to me, hon. Speaker. Let me make the point, first of all, that ICBC is in a serious financial position, which we inherited from the previous administration. I say, in all seriousness, that it is literally....

Interjections.

Hon. G. Clark: Do you want to hear the answer? It is literally in a financial crisis. We have had several reports on that, which have been made public, and which, I think, are extremely difficult for British Columbians. It was imperative that the government take action. The minister responsible has taken action. Ms. Robyn Allan is a senior economist, and one of the foremost economists in British Columbia. She is there on an interim basis while we do a national and international search for a qualified chief executive officer for that corporation.

G. Farrell-Collins: It's very interesting. I thought that last week the Minister of Consumer Services appointed another gentleman as the interim president. This week we have a different president of ICBC. In the past, as the minister said, presidents of ICBC were hired only after extensive searches. Why is it that today the Ministry of Health is advertising nationally for up to 700 jobs, while Bob Williams only chooses from his close personal friends and insiders? Will the minister tell Bob Williams that this appointment is not 

[ Page 1708 ]

only ridiculous but irresponsible, and demand a full and nationwide search immediately?

Hon. G. Clark: What is irresponsible is that ICBC lost $180 million last year. The projections are that it will lose $150 million this year. We have terminated the chief executive officer. We have dismissed the board. We have replaced the board. We are embarking immediately on a national and international search to find the top talent possible to try to save that corporation and provide low-cost auto insurance for British Columbians. In the meantime we have appointed on a very interim basis one of the most pre-eminent economists, a woman of substantial qualities, whom I am proud we have attracted to work in the public service in British Columbia.

The Speaker: Final supplemental.

G. Farrell-Collins: I might remind the minister that what was irresponsible was this government's dillydallying and political interference in the rate-setting of ICBC in January which cost the firm $10 million.

It's clear that there was absolutely no process used in hiring Ms. Robyn Allan other than the Bob Williams shuffle -- the same process that was used to appoint the board of ICBC. How can the people of this province have any trust in this government or this minister when this type of process is going on in the province? When are we going to get the best people for the job in this province and not the friends of the government?

Hon. G. Clark: Hon. Speaker, it's interesting that he should talk to the Leader of the Opposition and other members of the Liberal caucus. In the series of board appointments, I noted that Mr. Herb Dhaliwal and Mr. Gordon Gibson Jr., who were proposed by the Liberal caucus as individuals who might serve on boards, were appointed to boards by this administration. We're looking for highly qualified people, gender parity and members of ethnic minorities, so that the boards and commissions in this province can better reflect the people of the province.

SCHOOL CONSTRUCTION COSTS

L. Hanson: Hon. Speaker, I have a question for the Minister of Education. I have a copy of a letter signed by the chairperson of the West Vancouver School District. They have been advised by their quantity surveyors that the government's fixed-wage policy will result in construction cost increases of 5 to 10 percent. Can the minister advise if her ministry will be providing the extra funding to meet the added cost, or will project specifications be reduced below current space and program standards?

[2:30]

Hon. A. Hagen: Hon. Speaker, I will take the member's question on notice and provide information back to him on the basis of a review of the project by my ministry.

ICBC APPOINTMENTS

W. Hurd: Hon. Speaker, I'm not sure if the Minister of Finance is aware of it or not, but Mr. Bob Williams is conducting an ongoing review of ICBC. In light of that, was it on Mr. Williams's recommendation that the new president of ICBC was appointed? How can we have an ongoing review of ICBC and the appointment of his assistant deputy minister as the new president of ICBC?

Hon. G. Clark: I think the question should be directed to the minister responsible for ICBC. But let me try to assist the member.

There have been two reviews of ICBC to date: one by Peat Marwick and one by, I think, Barrier Management. Both have been, I think it's fair to say, highly critical of ICBC. Robyn Allan is working for the Crown corporations secretariat. We're very pleased to have a woman of her standing and her qualities working for the government of British Columbia, and I think it's entirely appropriate. In fact, in most jurisdictions where this takes place there is some cross-pollination, some relationship, between the government of the day and these major Crowns. For example, in most jurisdictions the Deputy Minister of Finance always sits on the Hydro board. We haven't done that in this case. Also, in many jurisdictions the Deputy Minister of Finance sits on the major hospital board. We haven't done that. I think it's a policy worth considering. But, at the very least, when we have talented people doing the kinds of scrutiny that these very difficult problems demand, I think it's entirely appropriate that there is in fact some representation on the boards that links back to the Crown corporations secretariat.

The Speaker: The bell ends question period.

L. Hanson: I beg leave of the House to table a document.

Leave granted.

EQUAL PAY FOR EQUAL WORK

Hon. P. Priddy: On Thursday I took on notice a question from the leader of the third party. I rise in response to that.

If the member was asking whether, in our order-in-council appointments in the government, individuals are paid differently on the basis of gender, then the answer to that question is no. If the member was asking if this government supports the principles of pay equity in order-in-council appointments, those principles that value the work that women and men do in British Columbia without discrimination against women based on their gender, then the answer to that question is categorically yes.

The government will be bringing forward a legislated framework for pay equity, for the negotiation and implementation of pay equity in the public sector, which will move to end the discriminatory wage gap between women and men. Those principles apply to the orders-in-council, as well as other government hiring 

[ Page 1709 ]

that is done. It is an incredibly important and powerful government commitment to women in this province that we take forward those principles of pay equity.

I thank the member for the question, and I appreciate both his continued interest and stated support of these principles.

D. Mitchell: A point of order. We know that as members of this House we cannot compel the government to answer oral questions during oral question period. Try as we may, we cannot compel them to answer questions. However, we have another procedure in this House, and it's written questions. We have has 32 written questions on the order paper for more than two months now. The government continues to claim it is an open government. They talk about things like introducing freedom-of-information legislation in the House, but they refuse to follow the procedures of this House to answer questions. In fact, several ministers' answers are ready to be tabled, yet the government refuses to answer these written questions, which have been legitimately asked. They are simple questions. They need to be asked; otherwise, we are impeded in our ability to perform as members. We are reviewing estimates in the House right now. We were promised answers to these questions before we got into estimates. We are now well into the process.

Hon. Speaker, could you not use your influence in this House to give some guidance to the government on following the procedures that are available to us as members of the House? We know we can't compel them to answer oral questions. Could they please be given some guidance on answering written questions? If this government is truly an open government, they would answer our questions.

The Speaker: First, I would assure the hon. member that the Chair has no influence in these matters. The point has been raised in this House before. I would recognize the government House Leader, perhaps for a clarification.

Hon. G. Clark: Hon. Speaker, this is not a point of order, and the member knows it's not. You have ruled on this matter before. It's an abuse of this House to get up and make a speech on the pretence that it's a point of order. It is quite appropriate for the members opposite to ask questions during question period. It's not appropriate to raise questions like this under the guise of a point of order. It's an abuse of the House.

Orders of the Day

Hon. G. Clark: I call second reading of Bill 6, the Corporation Capital Tax Act.

CORPORATION CAPITAL TAX ACT
(continued)

On the amendment.

V. Anderson: Just before we finished the sitting this morning we were dealing with the amendment on Bill 6. I indicated at that time that I would support the amendment because of the concern that this act is not meeting the needs of such an act in the province here.

Some other concerns that I would briefly raise are the attitudes that the reading of this act provides about the trust that government has in people within the province.

I noticed a kind of inspection record, which is bordering on a semi-police inspection of the records, without the opportunity for people to be advised of this ahead of time by any authorized person, such that the confidentiality of people in the businesses is left in jeopardy. Also, notices of assessment were mailed to a post office near the corporation, without any proof that the notice had been delivered. This is taken as being delivered, and the person who should have received that has to defend the fact that they did not receive it, even if it wasn't mailed directly to them.

I think there's a problem in this kind of undertaking when the burden of appeal is left to the corporation itself, even though the mistakes in presenting those appeals and presenting them to the corporation may be the mistakes of the government. The way the act is written, these can be overlooked, and though there are mistakes, there is no appeal against it.

For these and other reasons presented, I think that this act needs to be reconsidered and should go to a committee for such reconsideration.

G. Wilson: I rise to speak in support of the amendment, because this bill, which I spoke to in more general terms yesterday, is so badly flawed. It's going to be so negative to the businesses in the community of British Columbia that in our opinion it needs not only to be reviewed, but revoked until such time as there can be a proper economic strategy before the province.

In response to my comments, I noted yesterday that the Minister of Finance rose to speak about this bill and tried to undermine the positions and principles that we put forward in speaking against Bill 6. I notice that there is an inherent contradiction. First of all, it is important for us to understand that it was this NDP government -- albeit in another age -- that introduced corporate capital tax to British Columbia.

It was when this government had been taken from office, as a result of the will of the electorate in the province, that there was an attempt to amend the corporate capital tax by a subsequent government in the province, and in that attempt to amend there was a move to essentially have the tax revoked or repealed. It was indeed members opposite, two of whom still reside within the House today. While these members cannot be named, clearly we know that one now sits as the Attorney General for the province.

When that amendment came forward on May 14, 1980, in Hansard debate in this Legislature, we saw that it was indeed members of the NDP opposite, that now forms government, who spoke in favour of the repeal of this tax and in favour of a three-year phase-out of the corporate capital tax. They had recognized that this was not a tax on income; it was a tax on debt.

Let me quote, from Hansard of June 10, 1981, a former member of the NDP who was then the critic for 

[ Page 1710 ]

Finance: "The Corporation Capital Tax...again I say, is not a tax on income; it's a tax on debt. It should be done away with." That was from one of the members of the NDP on June 10, 1981, yet 11 years later this insidious tax is back on the books, back in front of British Columbians, and is going to be punitive.

The hon. member who said at the time that this was a tax on debt was correct. What is it now that has changed in the province that we believe that this tax should be once again reintroduced? The same member said: "What I'm saying right now is that I think that it is a tax on debt, not a tax on income, and it's inappropriate. We should do away with it completely." He goes on to say on June 10, 1981, in this House: "That's my position; that's the position of the NDP." If they had seen the wisdom of the removal of that tax in 1981 in this House, why is it now that they are reintroducing that bill?

Maybe we can see a little bit if we go to the debates in this Legislature on May 18, 1982, when the then critic of Finance said: "On the other hand, now that we're in opposition, we recognize that it is not good legislation. We recognize that it is not a good approach to tax corporations...." He goes on to say: "I know there's a difference here in the definition of the tax base. But we believe it's not good to tax anyone on the basis -- in many instances -- of debt." On May 18, 1982, once again, members of the party opposite that now form government were correct. How is it that they have lost the way so badly? When they are in government they reintroduce, once again, a proposition that was first brought into the province by members opposite when they formed government in 1972, in the then NDP regime.

We can see, if you go even to as recently as May 2, 1985, where there is some rationale as to what it is that was in place with respect to the introduction of this tax. It was at that time that finally the members of the party opposite that now form government recognized that it was they that brought this tax to British Columbia. They recognized that it was a wrong and incorrect way to proceed on taxation. They said at that time, when there was a three-year phase-out plan -- except for large chartered banks chartered outside British Columbia, which is not an unreasonable way to proceed -- again from their Finance critic: "The opposition supports the legislation, and also supports the way in which it's being phased in over a three-year period." He then suggests, and this is a point that cannot go unnoticed and must be mentioned: "At least, I say that; I'm not sure that I've actually checked it out with my caucus, but I think the phasing in of a tax reduction like this is a good thing." He said, and this is a point that we should take some time to realize: "I see that the second member for Vancouver East (Mr. Williams) is agreeing."

[2:45]

We all know who the second member for Vancouver East was at that day and what his position is with respect to advice to this government today. And even then, the hon. member for Vancouver East, who is now an adviser to this government and is a private citizen, Mr. Bob Williams, agreed at that time. The critic said on May 2, 1985: "I think it's worth remembering, though, why this tax came into being." This will give us a little bit of light as to what this government is all about today. He admitted it was indeed the NDP that introduced it. He said: "It was imposed when the NDP administration was in office. We were trying to bring our tax system, for individuals and for corporations, as much in line with Ontario as we could. It was argued by department officials that, in trying to attract business to the province of British Columbia, our competition was really with the province of Ontario." That is a direct quote from the May 2, 1985, Hansard in this House.

Now we see an underlying clue of the fundamental flaw in the strategy of this government. It goes back to the Peat Marwick report. It goes back to the budget that was tabled. Today, in 1992, this government still thinks that its principal competition and province of comparison is Ontario. It is not. We cannot stress strongly enough that we have to put our competitive edge in focus with respect to our trading partners in Washington, Oregon, California and the Pacific Rim. This statement of May 2, 1985, indicates that we are witnessing a policy strategy that was introduced from 1972 to 1975, when the then Premier of this province, Mr. Dave Barrett, introduced this material. Nothing has changed in the minds of the members opposite, but everything has changed in the manner by which the economy of British Columbia operates today. We are now having to be more competitive with our trading partners abroad.

The members on this side of the House and the Liberal opposition are not simply trying to be antagonistic here. We're not simply trying to disrupt the government's agenda. We are not being irresponsible or irrational in what we are saying in this debate. What we are saying, in support of this amendment, is that the fundamental basis on which this document has been prepared is faulty. It is wrong. It is not going to advance the cause of the economy as a whole. Much more importantly, it is not going to advance the cause of individual British Columbians, and that is who we are here to serve. We are here to serve British Columbians as a whole.

We put forward this amendment because what was uttered by members of the party opposite when they sat in opposition in the years 1980 through 1985 and opposed the implementation of a corporate capital tax and spoke in favour of three-year phasing.... When we see this written here today, we recognize, in the cold, rational observation from the benches of the opposition, when in fact there is not a money grab necessary to pay for government programs and a government agenda.... When members sit here in the cold, objective light of day, we see it to be the wrong legislation for British Columbia. That is why we are asking all members opposite to read this bill and, if necessary, stand up and vote against it on the principle that it is as wrong for the average British Columbian as much as it is wrong for the corporations and banks and credit unions that will have to pay it.

Here is a glorious opportunity for the members opposite to show their independence, to stand up and break from this almost rank-and-file adherence to fundamental party policy, which is no different today than it was from 1972 to 1975. This bill, the introduction 

[ Page 1711 ]

of a corporate capital tax, is as wrong today as it was from 1972 to 1975. It will be as damaging to the economy today as it was damaging to the economy from 1972 to 1975. We on all sides of this House must see the rational light of day. When we do, and I hope that we will, we will recognize that this amendment should pass and that this bill should not proceed.

G. Janssen: I rise to speak on the amendment, which includes the words: "The tax will add to the problem of companies in financial difficulty; it will be a disincentive to invest in British Columbia...."

Before I do that, I want to correct a few remarks made by the member for Saanich North when he quoted me this morning regarding my business. The business figures that I will use are a bit dated because, as most members will be aware, my business is in a blind trust, and I have no dealings with it. In response to the member for Saanich North, three years ago the numbers.... "His inventory probably runs at about $250,000...." I would like to correct that for the House's information: the inventory was $170,000. "His fixtures are probably worth $30,000"; that figure should be $50,000. "His equipment" -- at "$20,000"; that should be $50,000. "His property...is probably worth $250,000"; that should be $60,000. The building value at $100,000 should be $40,000. He has my house -- and it is not my house; it is my wife's, and has been for some considerable time -- at $250,000; it is worth well in excess of $350,000. Thank you.

That should clear the record. Perhaps the member for Saanich North would like to consult with me before he makes those statements in the future. I must point out to the House, as most members who have been here for some time are aware, it is highly irregular for members to quote the personal financial records of other members. I hope that we do not continue with that practice in the House in the future.

As to the amendment, as the properties of most small business people in the province are.... I must also state that there is no debt. The financial institutions have enough of a stranglehold on business in this province and in this country, so I have made it a point -- as taught to me by my parents -- to resist debt at all cost, to tighten one's belt so that we do not get into the kind of debt that the country is in now.

As a business person, I feel fortunate to be in British Columbia. My parents immigrated here and started a business, and we have been blessed with economic success and health. Because of that economic success and hard work, which the member alluded to, we have been able to invest more and more and have been able to hire people at decent wages. Again, I reflect back a number of years. But unlike in the Liberal Party, the staff at Janssen's Jewellers make $14 an hour, plus benefits and a full pension plan.

We want to help pay down the deficit. I'm sure that small businesses, through their opportunities and success, would like to help put back into the economy some of the success that they have been able to achieve in this great province of ours.

We don't want to burden our children as the Liberal Party of Canada has burdened not only our children but probably our grandchildren with the debt that they ran up in the '70s -- something that this Liberal Party in British Columbia is now alluding to: don't raise taxes; keep the services going; borrow, borrow, borrow. Time and time again you talk about financial difficulties. With the amendment, we will end up in a financial crisis in British Columbia like Canada is in a financial crisis today, where a third of the taxes go to pay the interest on the deficit -- much less the deficit itself. If the members would take the small pill today of fair taxes on those that can afford it, they will not have to face major surgery in the future.

This amendment is nothing more than another of the now-famous hoist motions by the Liberal Party to try to get something off the floor of the Legislature because they don't have any policy. They're reaching for straws to get themselves out of the dilemma they face both internally and externally.

We small business people in this province want to contribute to the health and well-being of this province, because we recognize that a healthy province with a healthy credit rating.... I'm sure the members of the House all know that British Columbia now has the highest credit rating of any province in Canada. If they have been noticing the paper, they will see that Alberta was downgraded in their credit rating just this morning because of the massive deficit they are facing. That's because they did not swallow the bitter pill. They have put off, as the Liberal Party is suggesting, the pill today for major surgery tomorrow.

We should support this bill and reject the amendment, so that we can look for future prosperity in this province and not pass off the burden of debt to our children and our grandchildren. I recognize the members are new, and that they're trying to develop policy very quickly. They had a policy convention in Victoria just this last week. I recognize there were some problems. They should have wrestled with the issues that are in front of the House and that were on the order paper. They could have asked their members for some advice and direction in which way to go and which stand to take. Perhaps they could vote in unison, rather than have the opposition benches split on many votes that take place here.

I ask the Liberal members -- and perhaps even Social Credit, who have policy, I understand -- to look at creating a future in British Columbia, so that business will be healthier and can reinvest. When they talk about the disincentive to invest, perhaps they should look at the number of dollars that are being invested by local business and by foreign business in the province of British Columbia, compared to other parts of Canada and some parts of the United States. The number of people who are bringing their dollars into British Columbia is staggering. You simply have to look at the maritime investment that has been flowing into Vancouver over the last few months. The shipbuilding industry is moving to Vancouver because they see the sound economic practices that are being put forward by this government in its first budget. They are locating here because they have trust and confidence that we have the deficit under control, and that this government is looking to a bright future for British Columbia and 

[ Page 1712 ]

not attempting to cast a dark shadow over investment -- in effect, telling investment to stay away. I ask the Liberal Party in this House to act responsibly and put forward the true picture, so we can attract that investment to British Columbia and make British Columbia a better place for all Canadians to live.

D. Symons: Madam Speaker, the member has made many, many comments there. I think he's helping my cause in speaking for the amendment, because I believe this bill is certainly flawed and needs to be studied more. The government talks of getting the financial house in order. That is the problem here. I do not think the hon. members opposite recognize that in order to get our financial house in order, we have to create business and keep business operating. This tax will not do that. Will taxing companies out of business accomplish the end of putting our financial house in order? I very much doubt it.

[3:00]

One of the problems with this tax that bothers me most of all.... The previous speaker seemed to miss this entirely when he said, "fair taxes on those that can afford it." The insidious part of this bill is that it will also tax businesses that cannot afford it and that are losing money. As long as they have assets, they're being taxed. We can't keep taxing assets unless the company is making money, if you want that company to stay in business in B.C. This tax is unfair in that respect. So he's totally wrong when he says that we're putting fair taxes on those that can afford it; we're putting unfair taxes on those that cannot afford it. This will be the final straw that's going to cause some businesses....

Interjection.

D. Symons: Your business is not of the magnitude that's going to be affected by this tax. You can talk all you want about the business that you're in and how you're contributing to the economy, but you're not going to be affected by this tax. The larger businesses will. It's the final straw; businesses are going to move south. They're going to move elsewhere or simply close down, and jobs will be lost. That will not help to bring the financial house in order in this province; it will do the reverse.

I would like to quote some more from various members opposite when they were in opposition. May 2, 1985, from Hansard: "Traditionally the opposition supports any move to reduce taxes." Indeed, that is what we are doing today in this House. Those words were spoken by the opposition that's now the government today -- the NDP. In 1985 they go on to say: "It's one that we have been recommending for a period of time." And what is the "one" that they're referring to? It is the removal of the Corporation Capital Tax Amendment Act, 1985. This is the very thing that we are doing today: asking you not to reimpose what you said you were going to be recommending the removal of, and which you're now reintroducing.

To quote further along in that same quote, "...the fact that it's really a tax on debt that a corporation owes rather than on income that it earns. It just doesn't seem fair." Those are the words of the NDP when they were in opposition. What they recognized then as being unfair, they're quite willing to reintroduce now.

The Canadian Federation of Independent Business, in a report they put out prior to the budget coming out -- so they would not have known that this tax was coming in -- said that their members have long favoured tax cuts over expenditure increases as a means of stimulating the economy. "We would further warn against the imposition of any new taxes. These profit-insensitive taxes are one of the most regressive forms of taxation and really represent a tax on job creation."

That is precisely my point. We're going to affect jobs with this tax. They are particularly onerous on small businesses that are struggling just to keep their employees on the payroll. This tax will not help business in the province. It is not just a tax that's going to get us out of financial difficulties due to the mess left by the previous administration, as you keep repeating over and over again like a broken record. Your record is getting broken as well, by increasing taxes, by giving business the business. We must encourage business in this province if we are going to get out of the economic morass that we're in.

I certainly would hope that the member previous, who was talking so much about the rating of the province, will also take credit for it, because most of the rating was built up over the business of past years, and we'll have to give that to the Social Credit, unfortunately. But what we will do in the next few years.... I would hope that you will stand up again and take credit for the rating when it drops, because indeed with recommendations like this and taxes like this, that's what's going to happen.

A. Cowie: I rise today to encourage members to vote for this amendment. Earlier on this bill, I spoke about the hardship this tax will bring to companies such as the Vancouver Land Corp. -- VLC, as it's commonly called. That corporation builds affordable housing. It was set up where other builders could not build housing for renters. It included union funds from union investment, as well as banks and private investors. So I'm very surprised that the unions making that investment have not advised the Minister of Finance that he should not bring this bill forward.

An Hon. Member: They have.

A. Cowie: They probably have.

The Premier, while he was in Hong Kong some four or five months ago, welcomed investment from Hong Kong and Asia generally. He said that B.C. is open for business. The Premier encouraged investment in building projects in B.C. Well, I want to tell you that over the last year or so real estate values have gone down, so those investors that came here are....

Interjection.

A. Cowie: Investment in commercial and industrial land has in fact gone down. These people came and purchased land for developments, and those land 

[ Page 1713 ]

values have gone down in central Vancouver and in other areas. Taxes have gone up, and worst of all, these same people are caught with the corporate capital tax, which will tax the buildings that are in some cases not built -- but they've got the land -- tax the empty buildings that have not been leased out and tax even their losses. It's a very poor situation for these investors, and I'm afraid that it's going to encourage investors to leave the province as soon as possible, so that they can invest in other more profitable areas.

The analysis of the Olympia and York situation indicated that commercial and industrial lands could take up to ten years to come back to a profitable situation. I hope that's not so. We tend to have cycles in B.C. that are much shorter than that, so I hope that it's no longer than maybe three or four years.

That's why the two-year tax holiday that the minister mentions isn't really of much help to these companies, except for the two years; but I'm afraid the difficulty is going to last. While we have a strong economy in some of the residential building projects that may be able to carry some of the people through, some of these builders are not making a great deal of profit, especially if they're dealing with affordable housing and rental housing, which the normal market hasn't been able to provide for years.

I'm afraid what this bill does is just make it more difficult for the Vancouver Land Corp. and other companies trying to meet many of the NDP objectives in housing. I encourage the members to vote for this amendment, and when the bill is back for discussion I encourage them to defeat it or, at the very least, send it to committee for thorough discussion and debate where we, the Liberal Party, will be able to make positive contributions.

L. Stephens: I rise to speak in support of the amendment to Bill 6. The minister has said in this House that the government needs revenue to meet its commitments to programs initiated in the budget and to reduce the deficit; and that's fair. However, how the revenue is raised is another question.

The corporate capital tax is a fundamentally regressive tax with no redeeming qualities whatsoever, and members opposite seem to have trouble grasping this fact. Tax and spend of this NDP government.... The latest example of spend is the hiring campaign for 700 health care workers reported this morning in the Times-Colonist. More government; big government. Now we know another reason for these taxes -- more government.

The economy in British Columbia shrank 0.5 percent in 1991. Real economic growth is expected to increase by 1.9 percent, not the 3 percent the Minister of Finance has forecast in his budget. The Conference Board of Canada yesterday said that tax increases in recent provincial budgets, particularly Saskatchewan, Ontario and British Columbia, will delay a strong economic recovery.

Capital spending was one of the major forces driving British Columbia's economic growth, and Bill 6, unless amended, will severely restrict future capital spending. British Columbia companies are struggling, as every member of this House should know. Small and medium-sized businesses with assets of $1 million, as my colleague from Saanich North and the Islands points out, are numerous and employ the majority of workers in this province. The retail industry, tourism, forestry and mining, fishing, agriculture and manufacturing are all vital components of a viable British Columbia economy that is in jeopardy.

I would urge all members of this House to vote in favour of the amendment to Bill 6 and to send it to committee for further refinements.

R. Neufeld: I rise also in support of the amendment to defer Bill 6. As I said yesterday, this is a regressive bill that will do nothing to encourage any type of economic development in British Columbia to any extent, and in fact will probably drive out a lot of the development that we're now experiencing.

It's interesting to note that this past Thursday, when the minister presented the bill, he stated that quite a number of amendments would have to be made, because it was done in a fair hurry and there were some parts of it that he would like to change. Our leader, the member for Peace River South, spoke on that and said that it's rather a waste of time for the House to debate Bill 6 when we really don't know which parts the government wants to change. What they should do, as this amendment proposes, is defer it and send it back to committee to be dealt with so it can be brought forward in a reasonable manner. A reasonable manner to me would be an empty piece of paper saying that we are not going to do anything with the corporation capital tax because of the problems it's going to create in British Columbia.

This corporation tax introduced by the NDP government in the early seventies was an issue at that time. They thought they could grab a little more money from those rich corporations and those rich business people. It stayed in effect for a while, until, as the Leader of the Opposition said, they were put on the other side of the House within three years because of measures like that. They realized it was a mistake and was going to be detrimental to British Columbia. There are members in this House now who were on record in the past as saying that this would be a detrimental bill to British Columbia and would not encourage growth.

[3:15]

The essence of the bill comes from the secretariat. It seems as though he was the master, the person who wrote the bill back in the seventies. That's 20 years ago. Things have changed a bit. Obviously this government has elected to bring someone in to direct them. It's obvious that this person directs all their activities and all their policies, and he's still living back in the seventies. We're in the nineties now. We're in a different world altogether than we were in back in the seventies. We're in a world where we have to compete globally, not just within British Columbia or between British Columbia and Alberta. Things have changed drastically. We now have to deal with the Pacific Rim, the Pacific Northwest and still with Alberta, which has held taxes down. That's where we have to sell our products.

[ Page 1714 ]

If we continue on this road of taxation, the corporate capital tax on our corporations and businesses, the increase in corporate taxes, the increase in personal income taxes, the increase in water taxes, the increases in ICBC rates.... You name it; they haven't left a rock unturned. There might be a few that they haven't found yet, but I'm sure the minister will find them in time. We have to compete globally in that market. What happens to these companies?

I'm going to speak a little about the petroleum companies and the oil companies. Those companies are very evident in the part of British Columbia where I reside. They may not be down here other than in the form of service stations, but in the north they are very evident. They're going to feel the effects of this taxation, the same as any other corporation. What are they going to do? Probably the first thing they're going to do is cut jobs. Obviously they're stuck with this government for the next three years, so the only thing they can do is to cut jobs and costs, because right now the world market dictates so much on how they operate. That's what I'm talking about when I say that we in British Columbia have to get into the nineties and into the future, start dealing with what's going to happen then, and get away from these draconian measures of corporation capital taxes.

They're going to lay off people, and they're doing it now. It's not specifically because of this bill, but they know it's coming. They're facing an awful lot of other costs -- increases in taxation and no end of regulations from this government. Some of them are laying off up to 500 or 600 people. Some of those people are employed in some of the communities that I represent; in fact, a good part of them are. What are they going to do? I guess it's pretty obvious. Either they're going to go on unemployment insurance, or they're going to go on social services. I guess that's why the Ministry of Social Services has increased its budget so drastically this year, because that minister foresaw what was going to happen when this tax was put into place; they were going to be faced with an awful lot more people with no jobs, not contributing anything to the benefit of British Columbia.

There's nothing worse to do to people than to take them and just sit them in the corner and say we're going to pay them to do nothing. You cannot do that to human beings. It does not do anything for their well-being or the well-being of the province or the country that they reside in. But these people are still going to have to live.

The oil companies on top of that.... It's an idea of a lot of people that they have money rolling out of their pockets, and maybe some of them do. I don't know. I don't run an oil company, but I do know that when they start laying off people by the hundreds, there's obviously something wrong. What they're going to do is to choose to increase the rate they charge for their products. They're going to increase home heating fuel on the Island, where a lot of people still have home heating fuel. They're going to increase the rates on diesel fuel for the transportation industry, B.C. Rail, B.C. Hydro and all the Crown corporations. They're going to increase the rate on gasoline, and that filters back to everyone, to all workers in British Columbia. It doesn't matter what a person makes; they are still going to pay that increase.

This government professes to be the government that looks after people. I can tell you that the past administration looked after people very well too. I can tell you just exactly what they did for the people of British Columbia over the many years that they were in government. We have the second-lowest taxes in Canada. We have the highest credit rating. I'm going to just stop there with the highest credit rating and maybe just qualify that. I think we were the second-highest credit rating when Social Credit was in government. This government may now have the highest credit rating, but that's only because Ontario slipped down. Ontario slipped down because they're in their second year of an NDP government and record deficits -- the same as this government has been giving us. In the first year they gave us the largest deficit B.C. has ever experienced, along with all the talk about Peat Marwick and the legacy Social Credit left this government. That is entirely incorrect. It is not as large as the deficit tabled by the NDP government this year.

The deficit that this government has tabled is predicated on 3 percent growth. Well, hon. Speaker, if any of those members over there have read any of the information that's been passed to them by chartered accountant firms, by economists, they will find that those people say that there is no way that there is going to be 3 percent growth in British Columbia this year. I would bet that we're probably going to be over $2 billion, because this government cannot control its purse-strings.

Social Credit had the fastest-growing economy of any jurisdiction in Canada, the best rate of capital investment, the highest rate of incorporations and the lowest rate of business bankruptcies, the highest average hourly wages and the second-highest average weekly earnings of all provinces. That's the legacy we left this government. That's the legacy they're working on. That's why now, today, they are experiencing a good rate. But it also means that Ontario is slowly going downhill. In the second year, we'll see what happens to this government.

It's interesting to note also that when the Minister of Finance speaks about tax increases.... We talked at length the other night in committee on the NDP GST -- the tax on legal bills -- and the minister stated with a smile on his face that probably what would happen is that legal firms would eat the 6 percent cost and not pass it on to people. Well, he had a hard time really choking that one out. In fact, I don't think you're going to find a lawyer.... I have some good lawyer friends, but I don't think there's a lawyer around that's going to eat 6 percent if he can pass it on to the consumer.

That's exactly what's going to happen with this corporation capital tax, hon. Speaker. Corporations are not going to eat it. Does the Finance minister think, tongue in cheek, that they are going to eat these costs, and just absorb them into their operational costs and not pass them on to people? I doubt that. They're going to pass them on through higher service costs and higher costs to people. Along with that, we're going to have 

[ Page 1715 ]

reduced jobs and reduced investment in British Columbia.

Also in my constituency are a number of forest companies -- large ones. The community of Fort Nelson specifically depends an awful lot on a plywood plant and the largest chopstick factory in the world. What we are going to do is tax them more.

We all know that the forest industry -- it doesn't matter which part of the province of British Columbia you happen to be in -- is in dire straits. In fact, almost every industry in British Columbia is having trouble at this time, but the forest industry is hit specifically hard. So what are we going to do? Well, while they're getting hit hard, we're just going to give them another little slap on the other side of their head and take some more money out of their pocket. Because of course they can afford it; they're one of those rich corporations.

What are they going to do, hon. Speaker? What they are going to do is probably automate a little more and lay a few more people off. Where will they be? They'll be on UIC or at the Ministry of Social Services looking for help, because I don't know where else they are going to go.

The other corporation that has heavily invested in my constituency is a corporation called Westcoast Energy. Westcoast Energy will probably be one of the corporations that will be able to stand this onslaught of taxation the best, because they are on a guaranteed rate of return. Isn't that great? They are on a guaranteed rate of return. All they have to do is go to the NEB and the provincial government and prove that their costs have gone up X dollars, and they get a rate increase. Now where do you think the money's going to come from? They are going to have a rate increase. The people who heat with oil on the Island here are going to get an increase in their costs. The people that heat with natural gas -- wow, they're going to get hit with an increase. And it's going to be more than once; it's going to be a number of times. The companies that first develop out in the field, that first drill the wells and produce the gas, in turn put it through Westcoast; Westcoast gets a carrying charge; they in turn transfer it to B.C. Gas; and by the time each one of those corporations has paid the capital tax, the guy at the end of the pipe, the person that this government says they represent and nobody else did.... The ordinary British Columbians are the people who are going to pay the cost, just to keep warm.

Now thank goodness it is fairly warm down in the southern part of British Columbia, because maybe the increases won't be so great. But when I talk about my constituency and the north, people use an awful lot more natural gas up there to heat their homes, because winter comes early and spring comes late, and it's much colder. I reiterated yesterday that people spend an awful lot more on their gasoline because they have a longer distance to travel. They have to warm up their vehicles. You don't just jump into your car at 30 below and bang, you're gone; you let it warm up for a while. Those people that are going to face those increased costs, to a greater degree in the north, are the ones that are really going to pay the bill for this.

This is a bill that is badly contrived and poorly laid out. The minister himself confirms it when he says that there are going to have to be some amendments, and he's not really sure what parts of it have to be amended, but he's aware and he knows that some parts of this bill -- in fact all parts of this bill -- are not really fair.

This is not a tax or a bill that you introduce in the nineties, into an economy that we all know is in a bit of trouble. The economy of British Columbia, along with the rest of Canada, is feeling the pinch. It started feeling the pinch in the latter part of last year. We always feel it a little later than they do in the east, but we are feeling the pinch. What does this government do but continue to increase taxes of every description that you want to find, all predicated on a Peat Marwick report and a financial mess that was supposed to have been left behind?

[3:30]

Hon. Speaker, when you start looking at where this government is going, it had nothing to do with any financial mess. If it was a mess then, what everyone has to remember is that this government is responsible for half of that mess, because they were in government for the last five months that that budget was in place. We didn't have anyone on that side of the House to watch costs, but if you go through the budget, it's quite evident that there are many places where obviously no one was in charge. It's not hard to figure out when you see the increase in costs over budgeted amounts by different ministries. In fact, when it's all sorted out, it's well over $600 million. If you take into account where B.C. Hydro does not have to pay the government dividends this year, because of the election of the Minister of Finance, it's probably about $700 million or $800 million dollars overspent. That's ridiculous. They talk about a financial mess. They should be ashamed, because they're responsible for a good half of it.

But then when you go into 1992-1993, and then they've said.... It's fine to criticize, and I've said that. Everyone always gets up and wants more. I got up and talked to the Minister of Highways and asked him if they could spend a little bit more in Peace River North.

Interjection.

R. Neufeld: The Minister of Highways stated that times were tough and dollars were now hard to come by, but they were spending all they could. I understand and appreciate that, because I remember that everyone on this side of the House got up and asked that Minister for more money. It was a constant barrage.

Interjection.

R. Neufeld: That is typical. There is always a lot more need for money than there is money to spend. I've always said that there are alternatives and that it's a matter of setting your priorities straight. If you hire 1,500 new employees in one year -- four a day, or something -- it's astronomical. It's never happened in British Columbia's history. There's no need for that.

The Seaton report on health care, which was tabled just after the Social Credit government left, said that the Health ministry could live within the budget it already had with just some fine-tuning and changing around. 

[ Page 1716 ]

But that wasn't good enough for this government; we go and spend another $400 million or so on it, instead of changing it around. What are we doing now? We're hiring 700 more people to work in the Health ministry. I'm not saying that maybe there shouldn't be more people working in the Health ministry, but I am saying that 700 people is quite a few.

I guess it's obvious that what this government is looking at now is all those people coming off those jobs in private industry who were going to be on UI or who were going to be looking forward to coming to the Ministry of Social Services for help. Maybe we'd better create a job over there in government for them. Why not? We've got 1,500 spaces here. Let's bring them in. Those are priorities that this government has to deal with.

Fixed wage policy -- the government could have left that alone. Why do that? I believe that will cost B.C. taxpayers on average in the first year an estimated $250 million. I'm running those numbers pretty loosely, so you could even take $200 million. It's an awful lot of money. There are opportunities that they could have changed.

It's interesting how they scrapped Bill 82. There's where they could have saved some money, because that would have lessened the cost to government, as it had before. It was a bill designed to keep wages in the public sector more in line with the private sector. But no, this government saw its way clear to scrapping that, because it was one election promise out of many that they wanted to keep. They have had a bit of difficulty trying to keep some of their promises. In the next three years they're going to have an awful lot of trouble keeping some of their promises. They've only been in government for six months, and already they are chasing away investment; they're chasing away growth; they're chasing away industry.

Interjections.

Mr. Neufeld: As the Minister of Highways has just confirmed, they've tabled the largest deficit in British Columbia's history. Where are they going with it? Are we soon going to have everybody on the public payroll? I hope not. We have to have industry; we have to have corporations that can pay dividends to the shareholders. That's the only way the province is going to operate. You have to have those businesses be profitable. I'm sorry, but if they're not profitable, they're not going to be there. They're going to be gone. Then what are we going to do? There will be no corporations or small businesses, and we'll all be looking to the government for money. I wonder where the government's going to go for money then.

There is no way that anyone who is attuned to the 1990s and to business and what happens in the corporate world could ever support a bill like this. It is obvious that it comes from that one person back in 1972 to 1975. I support the amendment to its fullest. I would like to see this bill go back and actually be scrapped, and this government to start looking towards encouraging development, encouraging business to come here, and encouraging young people to start businesses, to survive and to pay their fair share of taxes in this beautiful country called British Columbia.

The member from Port Alberni got up and talked eloquently about his business, and how he didn't mind paying his share of taxes. I don't think any of us mind paying our fair share of taxes; no one does. He talked about not having any debt, and he could now accomplish all the things that he's doing. Not every British Columbian is lucky enough to have a family that started a business that many years ago and have it passed on to them, I can tell you that.

Lots of entrepreneurs out there presently and in the last five years started businesses in British Columbia because the economic climate was good for starting corporations and businesses and for thriving in British Columbia. That is slowly declining. In the first six months, we've seen a major decline in the hopes those young people have -- the ones that are going to pay to keep the province of British Columbia the great province that it is.

There is no way I can support the bill. I have to support the amendment to go back to committee and defer the bill -- that it be totally scrapped, torn up and sent back to the little wax museum up on top of the stairs -- and say: "Here you go, fella. This is what we think of your 1972 draconian measures."

G. Farrell-Collins: I am glad to rise also in support of this amendment. I hadn't intended to spend any time speaking on it, because I think the points have been well made. But it's essential that we give certain members of the government caucus a bit of a reality check, because we're constantly hearing them talking about the mess that was left behind by the previous administration. As a matter of fact, the Finance minister goes on ad nauseam time and time again on this issue. The real concern that I have is that they are all starting to believe it. If they were just saying that as political rhetoric, if they were just using it to try and upset the former government -- the Social Credit members -- that would be fine. I would laugh along with them and think that it was humorous, but the reality is that they're starting to believe themselves. They're starting to believe the rhetoric that the Minister of Finance has been feeding them in caucus and in cabinet, and that really is of concern.

The member for Alberni got up today and spoke in his usual fashion about how small businesses want to contribute to the tax base of this province. Well, it's true, they do. In fact, I spoke at some length about that in second reading of this bill: small business people and taxpayers in general do want to contribute to the tax base of this province. They do want to contribute their fair share, and they do want to contribute to social services and the investment in education that we make in this province. But they want to know that when they are doing that, when they are being asked to pay taxes, that it's a fair tax and not some draconian measure brought in by a Minister of Finance who doesn't even understand the very bill that he is bringing in.

I would like to ask the member for Alberni -- if he ever comes back into the House -- how many letters he has personally received from small business people in 

[ Page 1717 ]

this province supporting this capital tax. I doubt he has received one, unless he has written to himself. The reason for it is that small business and business in general, despite the fact that they do want to contribute to the tax base of this province, see this tax as unfair.

One of the other comments that was raised by a member of the NDP back bench today -- and again it's unusual to actually have them involved in debate in this House; they usually just do what they're told and vote the way they're told -- was the fact that we can't pass off this deficit to our children. We have to bite the bullet now and deal with it. The reality is that the way in which this government is choosing to bite the bullet with this corporate capital tax is going to harm the very children that he's talking about. I spoke about this yesterday, and I wish the member would listen and pay attention and try to understand the rationale behind this argument.

The businesses in this province, the people in this province, the province itself and its Crown corporations have built up a wealth in this province, a capital base that we have. That's our bank. That's what we have to invest in the future with. That's what this whole province is built on: this capital pool that we have collected and assembled over the years. You never, ever dip into that. That capital pool is what you require as a society to continue to build a standard of living that's the envy of the country and the world. This capital corporate tax allows the government not just to dip into their own reserves -- which they don't have anymore -- but to go and dip into the reserves of the capital that's the foundation of this very province. That's the capital that we should be using instead to reinvest in the economy, in industry and in service industries to ensure that we have a vibrant economy for the next generation.

Instead of using that pool to invest, the government is using that pool of capital to pay its present bills -- to pay the bills of the policies it is trying to implement now. One of those policies was brought up by the last member who spoke -- the member for Peace River North. He talked about the fair wage policy that this government brought in. That policy is going to cost us, and it depends.... We don't know exactly how much it's going to cost us, because the government hasn't done any studies on the implication of this policy. It may cost us anywhere from $200 million to $250 million. That's what it's going to cost the people of this province for a fair wage policy for this government -- a fixed wage policy that's going to pay the election friends of this government.

Is that a priority? In the minds of the people of this province, is that a priority? Do they want the government to dip into the capital that the people of this province have built up over the last century and use it to pay off the election debts of the government? I don't think they do. I don't think that the people of this province view that as fair taxation. That's why the member for Alberni has not received any letters from those small business people supporting this tax. There are no people supporting this tax, other than members of the government.

The member for Alberni also spoke at length about how negative we are in the opposition: that instead of trying to support this bill and champion this province as a wonderful place to invest, we are actually saying that the policies the government is bringing in will damage investment. He said: "You shouldn't be saying things like that; you should be getting out there and beating the drums and telling people what a great place British Columbia is." Well, it is a great place, but it's not going to remain a great place if we keep the type of taxation policy that this government is bringing in.

[3:45]

The member would have us spread misinformation. He has been listening to his own Finance minister for so long that he would have the 75 members of this House, who are elected to benefit the people of this province, spread misinformation and the NDP propaganda that this tax is good. The reality -- and it's a reality that this government needs to deal with -- is that this is not a good tax or a fair tax. It's something that we must defeat, and we must change it. That's why I would support this amendment.

The Speaker: There being no further speakers on the amendment, I will read the amendment: that Bill 6 not be read a second time now because this tax will add to the problem of companies in financial difficulties; it will be a disincentive to invest in British Columbia; it is a tax that will be passed on to British Columbian consumers whenever possible; it is a poorly drafted tax act; it is inequitable because of lack of consideration of the problems of valuation of corporate assets; and this tax will not be recognized as a deduction for determining federal tax, which effectively almost doubles its cost.

Amendment negatived on the following division:

The Speaker: We are now back to debate on second reading of the main motion, Bill 6.

[ Page 1718 ]

P. Dueck: I am pleased to rise in the House to oppose Bill 6. In my opinion it's the most dangerous and most damaging piece of legislation that the government has brought forward to date.

Before the election, a moderate face was portrayed. "We'd like people to come and invest in British Columbia," was the song. "We have changed. We're no longer like the old NDP government. We're no longer socialists. We have changed completely. Business should not be afraid of us any longer. We are now in favour of attracting business to British Columbia." But you know, that only lasted a very short period of time. It was just a matter of days before the true colours showed once again. And perhaps it's a different time, perhaps it's a few years later, but again it's the same philosophy. When I look at this bill, it is very obvious to me that they have not changed in any way at all from the then one-term government which this government will be as well.

The story was that we are now a pragmatic, middle-of-the-road party. "Nothing to be afraid of," they told the business community. "Don't be afraid of this government at all, because we are not like the previous NDP government. We know that we need to create wealth. We know that we have to attract business and therefore we have changed." Again, people believed them. They said: "Well, perhaps change is necessary."

Many people in my own constituency said that perhaps a change is necessary. We can see by the opposition here that a change was in fact, in the opinion of people, very necessary. And they made that change; therefore we now have an opposition that was not in the House before. But that hasn't changed the party in power one iota. They are still the same party they were many years ago, and they're still in that same direction, on the same track, by not encouraging business, by in fact chasing business out of the province.

In Bill 6 business has been targeted to carry more of the tax burden once again -- the same philosophy, the same theory that they had in 1972-75. Once again it's the corporation. It's the enemy. It's them and us. At a time when government figures show that all sectors of the economy are suffering, it seems risky at best, hon. Speaker, to add to the cost of doing business in British Columbia; but at worst it sends a message that B.C. is not really the place you want to do business in. We are really saying to the world at large: "Don't come to British Columbia, because we will get at you, and we will make sure that you, the corporation -- our enemy -- will be destroyed."

To make it even worse, the capital tax is not based on profitability. Potential investors pay this extra cost whether they make profit or not. In my opinion, it's absolutely ludicrous that people on that side of the House who are intelligent -- as a matter of fact, who are educated -- can't see through this. They tax corporations thinking that somehow it's an entity other than the taxpayer, that it's an entity they can get money from which doesn't affect business, doesn't affect the taxpayer at large. They should know that it affects exactly the people they're trying to help.

An investor may lose money; he may lose money year after year. No excuse; he still pays that capital tax. Not only that. They say: "Well, it's only corporations worth $1 million or more." It doesn't take very many dollars to be a million-dollar corporation. As a matter of fact, a million dollars is quite a puny operation nowadays. In other words, we're attacking everybody, and it's the end user, the taxpayer, the ordinary person in every case, who will pay this bill. It is not some unidentifiable corporation. We sometimes say: "Hit the corporation. Hit the people who have the money." It's the individual. It always comes back to the poor people, to the lunch-bucket type. That's who pays the bill.

How can the government justify increasing the burden on business at a time when their own figures clearly show that business profits are down and bankruptcies are up? But that's not good enough. We'll tax them a little more; we'll get that last drop of blood out of them. Today's news, for example, is not very encouraging. It says that perhaps the downtrend is still in place, and the recovery is not as soon as had been expected.

Hon. A. Charbonneau: B.C. is faring well.

P. Dueck: Yes, B.C. has been faring well, but remember who was in power for many years. It's not the current government that made British Columbia a good place to live and do business in. It was the 30, 40 years of another government that created this situation.

[4:00]

Like I said earlier, it's a different time than when the NDP was in power last, but it's the same philosophy. It hasn't changed one bit, not one iota. We have the same thinking. We have the same willy-nilly programs for the way they're going to create wealth, and it is not, in my opinion, a proper course to take. Business corporations, successful people, are the enemy of the NDP government. They are the people who must be destroyed.

Before the election, when the Leader of the Opposition -- now the leader of the government -- made his speeches around the province, around the country, what did he say? "Look, we're middle of the road. We're really decent people. Do business with us. Don't be afraid." Why did he even have to say: "Don't be afraid"? People obviously were afraid of that government. But he really encouraged people to think they had changed: "We now have a different suit on; we have a pinstripe. We've got ties. We're no longer the old Barrett days." But that has not come about. It is still the same government, the same philosophy, and they will destroy this province.

In other words, profit is a dirty word for the government side of the House. For gosh sakes, don't let companies make profit; after all, that belongs to the people. They don't realize that the corporations are really the people that create that profit. They create employment and wealth. There was all this talk before the election of "we want to create wealth; we don't want to spend more than what we create." But that's not what has happened.

[D. Streifel in the chair.]

[ Page 1719 ]

We don't need job destruction. No, we need job creation. Profit is not a dirty word. This bill, in my opinion, will destroy jobs. It will discourage investors. The capital tax will come at the expense of existing jobs, not to mention potential jobs or future employment. It will have an adverse effect. It took the previous government 30 or 40 years to become insensitive and arrogant. It has taken this government six months to reach higher levels of arrogance than we ever hoped to reach.

There is hope. I believe that if this government continues on the present course with bills like Bill 6, at least it will result in a one-term-Charlie government. I think we had it that last time around, and I'm absolutely sure it'll be one term, because they cannot hide behind legislation dangerous to the government as they're introducing now.

This government states it needs revenue, and I agree with that. We all know that it takes revenue to provide money for various programs that have to be funded, such as health, education, highways -- although there's a tremendous cutback in highways. We need money for those things; there's no question about it.

But they have money to pay off other things. It's a matter of priority. Where did they get money to pay roughly $200 million a year on the fair wage policy? Their own Minister of Finance said that maybe it will cut back one or two buildings a year. How much is a building a year nowadays -- $20 million? So we have $40 million less? Maybe -- but it could be a lot more. They know there's a cost attached to it, although again and again speakers have got up in the past and said that there's no extra money involved at all and that it will be a break-even situation, because they talk about a bid, and then the bids come in less than what the architects had figured.

That's no way to gauge the cost of a building, and everyone knows that. The way to gauge it is to go on bids and have a bid without that extra money, and have another bid where the fair wage policy's not in place. Then you will find the true cost of that particular construction job. I've got all kinds of references from people who are in the construction business, where they've shown 5 percent to 10 percent extra because of the fair wage policy.

So there is money to pay off friends and insiders. Suddenly we have money. Suddenly we can go to the well and say there is money. There's money for abortion clinics. Why not? We have money; we can use it. There's money for other things. For example, the pork-barrel tactics have never been more blatant in the history of this province. We thought that at times, when we were criticized about hiring people who even voted Social Credit. Now anybody who has been involved in the NDP movement -- especially if it was a high-profile position -- immediately got jobs, and it's contained even in the announcement today. We're going on this particular route further and further down the road, and I think, as I said earlier, that it will be a one-term-Charlie party.

It is estimated, of course, at $200 million; that's just one part of it. But when we talk about other positions that have been created, where the previous government perhaps paid $40,000 for that particular position, they are now paying $62,000. They got positions that were particularly created just for the purpose of pay-off. That is shameful, and I'm really sorry to say that, because I rather like the Minister of Finance. He's a personable, good-looking chap, and if he was on our side I would have nothing but kind words to say. But for some reason or other, he has certainly been led down the garden path by another member that at one time I could not call by name, but now I can -- Bob Williams. He has accepted the same philosophy, and I'm really sorry that he has, because by and large he's not a bad guy.

R. Neufeld: Bob Williams is in the Wax Museum now.

P. Dueck: I am afraid Bob Williams is not in the Wax Museum; he is alive and well, and we will feel his effect for many years to come. Even if this government lasts only a short period, the effect of Bob Williams, the direction that this government has gone, will be felt for many years to come. People, small businesses, large corporations, entrepreneurs who seek to see economic growth and wealth in the province are once again somehow seen by this government as villains who take from society, rather than recognizing them as the very people who built this country and who have, through their initiative, brought this country to what it is today -- not just British Columbia but Canada.

It was individual people and corporations small and large that had the foresight and initiative to do what had to be done to create wealth, so that we could enjoy the wealth and some of the advantages that we have over other provinces. This Bill 6 is out to kill that initiative. By taxation, whether there is any profit or not, they will in effect kill that individual who has some initiative still left after they get through with all this taxation. This individual will say: "Well, I'd like to try it. Maybe I should wait. Perhaps I should not go into this business at this time, because all I'm doing is creating money to give back to the Ministry of Finance."

I cannot support this bill. I absolutely will not support the bill, and I think you've probably gathered that from my remarks, Minister of Finance. It is a wrong approach and absolutely reprehensible; it is an insidious bill. The damage it will do to the economic recovery in this province will be felt for many years down the road. It will discourage business when we so badly need to encourage and attract more corporations and more investments to our province, not only within the province, but also from outside. The Minister of Finance would do well to reconsider this bill, and perhaps put it on the shelf and bring it back at a later date with some revision. It appears he won't do that, and I'm very sorry to have to say to him that I think that he's badly mistaken and on the wrong track for British Columbia.

It's going to affect me, and I'm not that worried about my personal well-being for the rest of my life -- I'm getting on in years -- but it will affect my children and their children, and they are all struggling. Some are in business; some are working for corporations. It will affect them, and it will affect the corporations they are working for. I am really sorry that the Minister of 

[ Page 1720 ]

Finance, who seems to be such a decent person in every other way, would go on this terrible route and look at legislation that will destroy the very good things that we enjoy in this province. He really doesn't understand business the way he should, being Finance minister of this province.

H. De Jong: Initially I wasn't going to rise to speak on the amendment. I thought the various comments made by speakers on the government side, particularly from the back benches, provided the government with the way out. I thought that they would have supported the amendment. However, while I have been in politics for some time, perhaps I'm still a little gullible to have believed, as the government said, that they wanted to work in a spirit of cooperation. This would have been an ideal time to work in cooperation with the opposition, because the opposition made it abundantly clear during its debate that there was an opportunity to go through the bill in its entirety through a committee process and come up with something that may be acceptable to both sides of the House. This type of bill....

An Hon. Member: Garbage bin.

H. De Jong: Certainly, because of the effects it will have, not just on big business, big corporations, but on small business people and the small individual.

Comparisons were made during the debate between the implementation of this capital tax and of the GST a couple of years ago. All members of this House and all British Columbians were opposed to the implementation of the GST. However, to draw a comparison between the implementation of the GST and this capital tax bill, the fact is that the GST did replace another tax, and that was the manufacturing tax. This bill, however, hasn't taken away any other tax. In fact, it's an additional tax -- something that the Premier promised would not happen.

It's a regressive tax. We all know that it is the consumer who ultimately pays for the business tax increases.

It's not just a regressive tax; it's a hidden tax. This government claims to be an open government. This is a prime example of open government. It's purely a hidden tax. Because it is a hidden tax, it will affect the wealthy people no more than the poor people: the pensioner, the low-income earner, the single mother, the welfare recipient will feel the greatest burden of this tax. It will affect everyone's telephone bill. This tax will increase the cost to apartment-block owners, because it doesn't take much of an apartment to be a million dollar investment. Up goes the cost of renting right across British Columbia. The renters are normally people who cannot afford to have their own home.

[4:15]

This tax will be paid, in many instances, by grocery-store operators, which, in reality, amounts to a direct tax on food. It is shocking indeed that a government that claims open government will come up with this hidden tax and impose this sort of blanket, regressive tax measure during their first year of government operations. It's not only a tax implication on business, but it also creates more bureaucracy on the part of government. In fact, this bill creates more bureaucrats with the power to enter any place of business and demand to look into the company's books, which, I believe, may well interfere with the personal privacy British Columbians are entitled to. I believe it was specifically for that reason that the federal government turned away from that type of approach on tax measures.

Besides all this, there is, of course, a brand new cost to the taxpayers to implement this bureaucracy. As well, there will be an additional cost to businesses that find their accounting and administration bills going higher and higher as they strive to satisfy the demands of a tax bureaucrat who has the power in this act to, first of all, order an investigative team to enter any office and seize all financial records, order anybody who does business with the corporation to hand over their records, and find corporations guilty until proven innocent if they cannot produce the records that meet the criteria the bureaucrat demands. This is a very heavy-handed approach to tax collection. It is the kind of thing that Revenue Canada found to be a severe violation of people's rights and has been moving away from. Obviously this government does not share the view that business people in British Columbia should be given any rights. Obviously it only sees them as the cash cow to be squeezed and squeezed by whatever method, until there is nothing left to squeeze.

If there is one concept that has gained universal approval in British Columbia politics in the last decade, it is the need for diversifying our economic base. I believe we can look back with a certain amount of pride on the last five years of the economic base expansion in British Columbia, and also the measures that have been taken towards expanding in value-added products throughout this province.

The Premier told us in the last election that he would be encouraging capital to come to British Columbia, and his government would be different from that of Dave Barrett. Well, this legislation is simply a regurgitation of the worst anti-business excesses of the Barrett regime. It has broken the promise and threatens to destroy the economy of British Columbia as thoroughly as Dave Barrett did. This bill will do great harm to all the confidence established by the past administrations. Members on the government side of the House have said during this debate that it is a necessary tax measure to keep the deficit down. If, indeed, the government is concerned about the deficit, they should have cut government costs instead of hiring more bureaucrats. They've established more commissions of all sorts travelling the province and beyond. Then the government talks about having hired top economists to so-call help the politicians on the government side to lower the deficit. What a sham! The point is that there is nothing that has come about yet to prove that they are really serious or to prove the point of lowering the deficit and to run a financially tight government.

To sum up my comments -- I'd like to use some plain farming terms -- you cannot expect a cow to continue to produce unless you are prepared to maintain the cow, for once the cow has lost its ability to 

[ Page 1721 ]

produce, because you have allowed the animal's condition to deteriorate, there will be no production, but the feeding has to continue.

C. Serwa: I rise to speak on the philosophy and principles of Bill 6, the Corporation Capital Tax Act. By now the minister, who has attended the debate, must be well aware of a great deal of concern on this side of the House -- both the official opposition and certainly the third party opposition -- to this bill.

It is lamentable, however, that there is a complete and utter lack of interest on the part of other government members. I see that even the Minister of Finance himself is leaving the Legislative chamber. Only three private members on the government side have shown any display of interest whatsoever in the proceedings here, and that's lamentable. This has very bad implications for the future of the province. Here is a government that British Columbians themselves are going to have to make a judgment on very quickly. Is it simple apathy? Is it simple lack of interest? Is it arrogance of a government that is pushing through legislation which government members...? There has been very little debate entered into by private government members, and very little, if any, debate by ministers of the Crown in support of this legislation.

An Hon. Member: It's arrogance.

C. Serwa: That's what it appears to be. It appears to be absolute arrogance on the part of the government to push forward this reprehensible type of legislation.

This particular bill shows some of the greatest ideological differences that occur between parties in Canada. On the one side we have the socialist philosophy -- and that's clearly evident here. There's nothing mild or moderate or reasonable or realistic or fair or anything else with this piece of legislation. On the other hand, we on this side of the House -- and I think all of the members here -- have displayed considerable concern for the best interests of the people as we battle for the future of British Columbians and for the future economic health and vitality of this province. It is regrettable, as I've said, that government members are unwilling, embarrassed or unable to prepare themselves and enter into debate on the philosophy and principles of Bill 6. I'm certain it's no great sin to be a socialist, but from their response, I gather it's no great honour either.

I'm not unhappy that the government is putting this bill forward. It's sort of a self-destruct mechanism that they have placed.... I agree with the hon. members who have indicated that they are confident that this will be a one-term government. I'm certain that bills such as this, along with the other legislation, such as the repeal of the supplementary homeowner's grant.... Those acts will infuriate the citizens of British Columbia, and the government will self-destruct. From that aspect, I'm very happy, because this bill certainly encourages that self-destruction. I'm sure that if I could find the fuse to that particular bomb, I would be only too happy to light it. But they're doing quite a good job themselves. I think the government honestly fails to recognize that it wasn't elected; our government was defeated, not on the basis of lack of performance but because it lost the faith, trust and confidence of the citizens of the province of British Columbia.

I understand that, and I appreciate it. The people of the province made a choice, and they voted, but I have to remind the government that only 38 percent of those who voted voted in support of this government. I think they have to recognize that this is a free enterprise province. The interesting thing is that that means that only 26 or 27 percent of the registered voters that could have voted voted to elect this government. They didn't elect the government; it is a government by default.

As I said earlier, I speak on behalf of British Columbians and of all of my colleagues who have spoken to battle for opportunities for British Columbians, jobs and a secure future. I am very pleased to join in support of them.

Bob Williams, who has been mentioned in this Legislature several times during the course of this debate, said something very interesting. He said: "If you thought we were radical before, just wait until we get in next time." I think that is clearly evidence of the type of radicalism the socialists are going to continue.

There's a vendetta against success. I'm confident that Bob Williams is the mastermind behind a lot of these initiatives. He's cloaked in the back room, well paid not only at this time but also when he started his entrepreneurial career by being paid to step down for a former member of this Legislature, who was Premier: Dave Barrett. He was well paid. I suppose in today's dollars it would work out to about a quarter of a million dollars.

You know, as I wander through the streets in my community, and when we talk about bills like Bill 6, and its philosophy and principles, I find it hard to find anyone who admits that they voted NDP in the last provincial election. Perhaps that's a good sign.

Decisions have been made that would negate the need for this particular bill -- conscious decisions made by the socialist government of the day. I'll repeat what those decisions, and the implications of those decisions.... They were made for political payoff purposes to their union cronies and their old political pals. They haven't been cheap, and I will go through them for the benefit of the Minister of Finance and the Minister of Advanced Education, who has now, interestingly enough, entered debate in order to heckle. But I haven't heard him enter debate in support of this legislation. When I resume my seat, I'm confident the minister will make an in-depth prepared speech on this bill. I look forward to that.

There was $300 million dedicated in addition to funds for the Ministry of Social Services, money that could well have gone for "workfare" rather than welfare; it could have created a better and healthier environment for economic activity in this province. There is $200 million dedicated over the next two years because of the fixed wage policy, which again was a conscious decision of the government of the day.

Three hundred million dollars is the exposure that the government of the day has created for itself by the repeal of Bill 82. The turmoil in education at the present time, the layoffs of teachers in school districts through-

[ Page 1722 ]

out the province, is a direct result of repealing Bill 82. Teachers are good citizens, they do a great job in the classroom and they are responsible individuals. They would have accepted a 4.5 or 4.6 percent increase if it had been broadly based and covered all of them. That option was clearly open to this government. By taking that option, we would have continued with class sizes the way they were -- and they have been reducing. We would have had continued employment opportunities for all of the young teachers who have entered the system. But because of a wrongly made, partisan, political promise, they have taken away jobs from teachers throughout the province.

[4:30]

One billion dollars has been committed because we're going to increase the size of government. Big government. That was something that we were certainly aware could happen, and this is clear evidence: $1 billion to increase the size of government by 1,500 FTEs and to increase public sector wages. By the way, over the last ten years public sector wages have increased by approximately 71 to 72 percent. Private sector wages have increased by approximately 51 to 52 percent. The consumer price index over that period of time has increased....

Interjection.

C. Serwa: We're getting some dynamic return from the Minister of Finance. That's wonderful.

The consumer price index has increased by approximately 44.6 percent. So if we had left Bill 82 in place, we would have reasonably permitted the private and public sectors to proceed in tandem. We could have all lived with that, and we would have been happy. We're all part of one economy, so that would have been entirely appropriate. It was an option available to the government, and the government made another wrong choice.

Millions of dollars have been spent in untendered contracts, which, as far as I'm concerned, should be illegal for the public sector, the government of British Columbia. I believe that there is legislation requiring municipalities to tender. There has been a considerable latitude and stretching of legality. That has not been a wise utilization of public funds but is another choice that the government has made.

Millions of dollars have been spent on patronage and job creation for political pals. Millions of dollars have been spent as a direct cost of politically motivated firings, because those individuals were perhaps not card-carrying or were people in the civil service who were judged as not being politically correct. Or was it simply to make room in the civil service for others who were card-carrying members?

The Minister of Finance made a statement indicating that the business community must pay its fair share of revenue. I contend that the business community, the corporate sector, has in fact paid its fair share of tax revenue. In 1987 in natural resources, from the stumpage on forest resources, the corporate sector paid the province $185.3 million; in 1988 they paid $744.6 million; in 1989, $688.2 million; in 1990, $698.8 million; in 1991, $609.3 million -- an increase of 299 percent over those five years. No one can say that the corporate sector in forestry has not faced increased costs or that they have failed to carry their fair share in the operation of government or to pay the public a fair return for a publicly owned resource. Has the mineral sector paid their fair share? What has happened there? In 1987 we received $225.9 million; in 1988, $251.7 million; in 1989, $315.1 million; in 1990, $300.5 million; in 1991, $324.7 million: an increase of 43.7 percent. Both the forestry sector and the mineral-resource sector are having a difficult time at present because of the world recession. Nevertheless, they have contributed a great deal for their resources and contributed a great deal to the operation of the government and the provision of government services.

Corporate income, independent of that, has risen dramatically. In 1987, a year after we in the former administration were elected, the government received $280.6 million; in 1988, $473.4 million; in 1989, $600.3 million; in 1990, $666 million; in 1991, $607 million: an increase of 116.5 percent in those five years. This was done by encouraging economic activity in the province -- not by imposing new taxes, not by increasing tax rates, but by creating an environment where economic activity was encouraged and accelerated. All members of this House and all citizens of British Columbia are beneficiaries of that dynamic activity.

On numerous occasions the minister has been very critical and has referred to the difficult financial situation that he has to face because of the legacy of the former administration. I know the Minister will find this interesting, and it will be one of the things that he looks forward to hearing, because he's going to hear it a number of times. Just to refresh the memory of the Minister of Finance on the shape that this province was left in, I'm going to read through a few points that I've noted. Under the Social Credit government British Columbia had the strongest economic performance of any province in Canada. We had the second-lowest income taxes in Canada. British Columbia has the lowest sales tax in Canada with the exception of Alberta, and they do not have a sales tax. We had the highest credit rating of any province in Canada, and that's from an independent bond-rating authority. We're all proud of that. I know that the minister has quoted from that, and he's very proud and pleased that we have that. We had the fastest-growing economy of any province in Canada, the best rate of capital investment, the highest rate of incorporation, the lowest rate of business bankruptcies, the highest average hourly wage and the second-highest average weekly wage. Value-added exports, an initiative that the current government certainly is supporting and that we supported very aggressively, grew at twice the rate of other exports. That's certainly a very positive initiative.

As a result of Bill 19, work stoppage or days lost through strikes was the lowest in 20 years. That was very positive. British Columbia, with 11 percent of Canada's population, created 50 percent of all of the new jobs in Canada. Remarkable!

What is even more important is that we have the lowest provincial debt per capita of any province in 

[ Page 1723 ]

Canada. Following that we have the lowest debt-servicing costs per capita of any jurisdiction in Canada.

Those statements are really important when we look at the illusion that the minister has tried to create: that the difficult financial situation facing him and his government at the present time is a result of past performance. The fact remains that the deficit added to the debt does not increase the cost of the annual operation of government. It doesn't impact in any way on the revenue or the expenditures. In a small way -- and I might remind the minister that we actually reduced provincial debt during our last administration -- it increases the cost of servicing that debt. Nevertheless, it does not impact on the day-to-day operations in the revenue side or the expenditure side of this current fiscal year. I think that has to be made abundantly clear.

The government has made a great deal of the Peat Marwick Thorne report. I call it the Peat Marwick Thorne manifesto. They're crying poverty, and they're saying: "They done it." The real fact is that they have made decisions to force expenditures in a direction that they want to pay off election debts and areas that they're more concerned about. Yes, indeed, we've been faced with a lot of increases in taxes because, I guess, the Peat Marwick Thorne report recommended it. We've raised all sorts of taxes: ICBC rates, B.C. Hydro rates will be raised, ferry rates, gas taxes, liquor taxes, tobacco taxes and camping fees for seniors -- another strong financial initiative. In a few weeks most of the citizens of British Columbia are going to find out what exactly was meant by the supplementary homeowner's grant that they had access to, which looked after 50 percent of education costs over and above the basic homeowner's grant.

I would think that the directors of Peat Marwick Thorne wouldn't touch the challenge of drafting a report now with a ten-foot pole. The fact is that that particular report has had a lot of fun poked at it, much to the embarrassment of the directors of Peat Marwick Thorne. The only smiles remaining are perhaps on the face of Mr. Hikel, who, with his New Democratic Party background, directed and orchestrated that particular report. I'm confident that that government contract -- an almost $1 million contract, which is, again, one of the major ones that was not tendered -- has placed an upside-down smile on the faces of the principals of Peat Marwick Thorne. I'm sure, too, that they are unhappy with the loss of clients that they have suffered as a result of the shallow overview of that particular report, which was purely politically motivated and directed for one specific purpose. I'm confident that the partners are very unhappy with the end result. That report was based on.... The principals involved in this report obviously compromised and failed to utilize generally accepted accounting principles that must be followed in any and every audit scenario. There are a lot of errors in the way that report was compiled, and that must be a continuing embarrassment to the company.

I think that the minister will have ample opportunity, again speaking on Bill 6, to enlighten the members of this Legislature and the people of the province on the implications of that Peat Marwick Thorne report and the record of the previous administration and how it impacts the Minister of Finance in the current government in this particular fiscal year. It's appropriate, again, to state that we recognize that the current government was government for the last five months of the previous fiscal year, which ended March 31. They could have taken steps, if they were concerned at the time, at a much earlier date; and they failed to do so.

In order to contrive the deficit -- it was a contrived deficit that the minister continues to refer to -- they moved more than $600 million of loans and obligations on the part of government all into that last fiscal year. The NDP decided that those loans may be uncollectible. They didn't say that they were not collectible; they said that they may not be collectible. The Minister of Advanced Education stated loud and clear how he created the student loan situation of $25 million and then the outstanding professors' leave-of-absence allowance of about $35 million. But almost $100 million of this debt was from the Ministry of Advanced Education. The reality is that whether they are collectible or uncollectible does not materially affect the government's financial picture for this financial year. That is a statement of fact. The Minister of Advanced Education said a number of things late one night when we had an all-night sitting, and it was really interesting. So did the Minister of Economic Development. As a matter of fact, the Minister of Economic Development indicated that -- I see that the House is very interested in this -- in order to come up with the $600 million deficit that they added onto last year, they had to go back to 1975. So all of that period, right up until the time that they were turfed out when they were in government.... That's quite a statement in itself.

[4:45]

I think the minister is really caught in a bind, and I sympathize with him. He is a bright, young, capable individual. I understand some of the challenges that fall onto the shoulders of ministers, and especially the load that falls onto the Minister of Finance. But I will say this right now for the public record, and history will prove me right: the largest deficit that this province will ever see or has ever seen -- perhaps not will ever see -- will occur this year, and it will be over $2 billion, and you, hon. minister, and your government will do it. There is no one else who is responsible for it: you and your government are the ones who are responsible for that. Earlier I mentioned decisions where your government had choices to make, and they could have made those choices and eliminated the need for the 1 percent on this Bill 6.

Social Credit MLAs will always stand for the British Columbian and for what is in the best interest of all British Columbians, not some select group. That is clearly an obligation of all the members in this Legislature. I regret again that the politics of envy and greed surface, and they continue to surface from the socialist government of the day. They are not moderate, they are not reasonable and they are not fair. That's lamentable, because they could be so and they could be doing a good job for the people of the province.

I think that by aiming their darts at those corporations and those individuals -- it may be doctors, mining companies, forestry companies or small business, 

[ Page 1724 ]

because $1 million isn't a very large business and the minister knows that full well -- they are destroying the foundation of the vibrant, robust, dynamic economy that they fell heir to. And that's lamentable because of the effect it will have on the average British Columbian. If you think that the loss of jobs is merely economic devastation, I can assure the hon. members on the government side that the loss of jobs is social devastation and the horrendous social problems that come out of that. That is how it will hit the average British Columbian.

I will just take my seat; the member would like to have leave, I believe.

Hon. T. Perry: I'm flabbergasted. I don't know how to thank the hon. member for Okanagan West, but I indicate my gratitude. I ask leave to make an introduction.

Leave granted.

Hon. T. Perry: I have the pleasure to introduce Norah Andrew. The bursar of University College of the Fraser Valley is sitting in the gallery for a few minutes, enjoying the debate and reflecting on the scintillating remarks of the member for Okanagan West. I thank hon. members for making her welcome.

C. Serwa: I thank the hon. minister for his kind comments, but he was always courteous when he was in the opposition. That level of courtesy is always appreciated in the House, so I am only reciprocating what I have received, but I do thank the minister for his comments.

What will Bill 6 do? It's the biggest single tax bite in the current budget, with $225 million of brand-new money going into the government coffers. The corporate sector has been hit again. They were just previously hit with a 1 percent hike in corporate income taxes, so large corporations will now be paying 16 percent and small corporations 10 percent. But there's more -- ah, there's always more. It seems as if we're getting from this government more and more, but not more and more of what we expected -- more and more in the way of taxes.

The corporate sector has been exposed to another $35 million that they will look forward to paying for school taxes. Altogether, approximately $300 million in brand-new taxes is going to be coming out of the corporate sector. Along with the corporate sector's responsibility for resource taxes, such as stumpage and the mineral royalties, the corporate sector will be paying over $2 billion directly towards the provincial government operation this year.

The corporate sector has been hit and been hit hard. I have indicated very briefly what will happen to the private citizen because of Bill 6, but I again emphasize that. We all recognize that British Columbia is a trading province and that we survive with trade. We're all part of the whole. You can't hit one sector and expect it to work through a reductionist theory of being isolated and picked up by only one.

I see my time is up, and I lament that. I had about two more pages I would like to have gone through. But I speak in opposition to Bill 6.

Hon. G. Clark: It's been a long time, waiting to close this debate. One of the useful things about a bill like this is to hear the Liberal Party and the Social Credit Party and the independent member all saying exactly the same thing for a change, which reminds British Columbians that there's very little difference on the opposition benches. I think it was said best by the member for Surrey-White Rock, who made a defence of trickle-down economics. We heard it again from the last member: what's good for big business is good for everybody, and what we should be doing is cutting tax to business, which would be good for everybody. That's basically the philosophy of the Liberal Party and the Social Credit Party. In fact, in the last election campaign the Liberal Party recommended a three-year tax holiday for business.

[The Speaker in the chair.]

When you're government, choices have to be made. Choices have to be made in politics, and the choice made by the previous administration and the Bill Bennett administration was $500 million in tax breaks to business, of which one was the elimination of this capital tax. What happened? How many people saw prices go down when they dropped corporate income tax one point? How many British Columbians saw prices go down when they cut taxes on business?

An Hon. Member: No recession.

Hon. G. Clark: The member says no recession. It's true. They support the Social Credit philosophy of shifting the tax burden away from business and onto the backs of average people. That's why the Liberal Party called for a flat tax. A flat tax disproportionately impacts on average British Columbians and working people. We had some choices in dealing with the record deficit inherited from the Social Credit Party. We could have brought in a flat tax and penalized the poor. We could have raised the sales tax, which would have disproportionately impacted on average people. Instead, we chose to be balanced and fair in dealing with this burden. We cut the rate of spending growth in half. We cut spending significantly, the lowest rate of spending in five years, despite what the Social Credit Party says. We were tough on the spending side. On the tax side, what did we do? We raised half of the tax revenue from business and half from individuals, and on the individual side we raised the majority from those who could most afford it: those making more than $80,000 a year. That's what you call fairness. By standing here and rising to oppose the corporation capital tax, what they're really saying is that we should have raised taxes on working people or we should cut spending.

Another interesting thing: the member for Langley -- she's heckling me now, hon. Speaker -- is opposed to 700 new jobs in the community health care sector. The member for Peace River North made the same argu-

[ Page 1725 ]

ment. Finally, for the first time since we've come into this House, we've found a concrete action, a concrete cut that those members are unanimous in arguing for. They don't want us to hire any more community care nurses. They don't want us to hire any speech pathologists. They don't want us to hire anybody in the mental health field to deal with a chronic problem in this province. They're opposed to hiring people in the community health care sector. We heard it from the Liberal Party. We heard it from the Social Credit Party. I think we heard it from the.... No, we didn't hear it from the independent member; all we heard was: "Cut spending." But the two main opposition parties have finally come out of the closet and said where they would cut. They would cut the 700 jobs that we're creating in the community health care sector. But if we didn't create those jobs in the health care sector, what would we have done? What they would have us do is put it into the institutional care sector; into acute care; into doctors' wages. That's what they're arguing for, and that's actually five times as expensive as community care. So what we've done is moved the health care budget in a way that is more cost effective, and those members opposite have opposed it.

Hon. members, no one likes tax increases. No one on this side of the House would like to be bringing in this bill, as I am today, in terms of a corporation capital tax. No one wants to be increasing taxes on anybody, including corporations -- especially those that are in tough shape, as we go through some cyclical problems and some structural problems in the forest sector. But when we're dealing with this problem, when we're trying to protect our health care, our education, our post-secondary institutions; when we're trying to protect those kinds of services that we believe British Columbians want and support, and voted in favour of in the last election; when we try to deal with that, and we deal with the fiscal problems this government faces.... We dealt with it in a balanced and fair way.

This is an integral part of the budget package -- that's correct. It's one of the reasons, I can tell you candidly, that our credit rating was reconfirmed, because we had the guts, frankly, to bring in legislation like this, which is obviously difficult. Again, it is one which we don't take any pride in, but it's one that's integral to trying to deal with the fiscal credibility of the government.

I also want to say that the best thing we can do for business in British Columbia is to get our own fiscal house in order, to make sure our credit rating is maintained, and to make sure we're dealing with the deficit problem in a rational way, over time. That's what we're trying to do, and this bill assists us in that direction. That gives people confidence that British Columbia is a sound place to do business. It gives business the confidence, in fact, that the government is on top of the fiscal problems that they've inherited.

While we don't like having to bring in tax measures on anybody, with the alternatives of raising this tax or raising taxes on working people, it was clear to us that we had to go in this direction. I want to assure members of this House that there will be amendments at committee stage to deal with some of the problems that have been addressed. We want to work with the business community over the years to come to make sure this legislation is less onerous than it might otherwise be. It is, I might say, the lowest capital tax in Canada. It is also the only capital tax in Canada in Canadian history that has an investment tax credit -- a tax holiday for new investment. It is consistent with the tax that existed throughout the entire Bill Bennett administration, and no one accused them of being anti-business, hon. Speaker.

If you look at it as a package, it's very fair, it's very balanced; in fact, it's very modest. It's not one we like to do, but it's integral to trying to get our fiscal house in order, maintain our credit rating, and make sure that debt-service costs don't crowd out essential spending on health, education and social services.

I commend it to you, hon. Speaker. I ask all members to support this bill.

[5:00]

Motion approved on the following division:

Bill 6, Corporation Capital Tax Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Clark: I call second reading of Bill 32.

RESOURCE COMPENSATION
INTERIM MEASURES ACT, 1992

Hon. C. Gabelmann: I move that the bill be now read a second time.

In opening debate on Bill 32, I wish to describe to the House some of the background and what I think are important features of this bill. Since the previous government announced, in 1988, that there was to be no exploration or development of mineral resources in class A parks, the province has been involved in several 

[ Page 1726 ]

proceedings concerning claims for compensation by holders of mineral interests. As members know, most of those claims have emanated from Strathcona Park. The province is also facing claims relating to timber tenure, and some of those claims include the claim on Moresby and in the Carmanah.

Without an established and accepted basis for determining compensation, there have been significant differences of opinion as to what constitutes a suitable settlement in these cases. British Columbia, as members know, has no legislation regarding the principles that should be established in these kinds of cases, unlike other provinces -- Alberta, for example -- which do. Because the province has provided no legislative framework, the current procedures are costly and time-consuming. The debate in the court, as it were, of the Expropriation Compensation Board is wide-ranging, without any guidance from this Legislature about what the nature of the arguments should be. The proceedings before the Expropriation Compensation Board have involved massive expenditures and legal costs. Not only are these costs borne by the taxpayer -- by the government -- on the defence side, which is the public's side of the issue, but on the claimant's side of the issue, all of the legal costs and all of the other costs authorized by the company in the hearing are borne by the taxpayer in totality. That may be a good principle, but it's one that's exceedingly expensive for taxpayers.

It has become evident that the interests of taxpayers in this province must be protected. Leaving tax dollars vulnerable to awards made with no established criteria is in our view unacceptable. Accordingly, the government has concluded that it is essential to establish principles and processes to determine compensation which would be fair to claimants, while still protecting the interests of taxpayers.

For that reason, as members of the House are aware, the government established a commission of inquiry on April 1 of this year. The commissioner, Dr. Richard Schwindt, is reviewing the principles underlying compensation, the costs incurred in securing and maintaining resource interests and the value of the public interest in such resources. The commission is receiving submissions from interested parties and is examining the processes in other jurisdictions. The commission's report will make recommendations for a method of determining compensation which is fair and equitable.

It's our belief that once the report of the commission is received, the government will be able to introduce appropriate legislative amendments to the House which will eliminate the present uncertainty and provide necessary protection for B.C. taxpayers. In the interim we believe it is necessary to freeze current and future claims. Without such a freeze, an unfair disparity could occur between awards which are based on the criteria established by this House and awards which have been made under the present haphazard system.

The result of this freeze will be that all present and future claimants will be treated the same, with their awards based on the same criteria. It is important to avoid awards being made before completion of the commission's work and before the government has had an opportunity to respond to the commission's findings and to introduce appropriate legislative amendments to this House. This will ensure consistency and protect the interests of taxpayers in our province.

Suggestions have been made that it is somehow unfair to current claimants. Such suggestions make no sense at all to me. Ultimately these claims will be resolved in line with the criteria which this Legislature determines are fair and equitable. At present, with no fair criteria in place, some claimants might do better and some might do worse than they would subsequently. Current claimants are just as subject to the possibility of an unfair award as is the government. I suggest that the present situation amounts to rolling the dice with very large sums of money at stake. Surely it is very difficult to justify that situation.

For all of these reasons, I urge all members of the House to support this bill. Its passage is essential for the protection of B.C. taxpayers, and it will ensure that in the very near future we have an opportunity to establish a fair and equitable method for determining compensation which will apply to all claimants. Completion of this process is essential to provide predictability and thus greater stability for our important resource industries.

[5:15]

At this stage, that's all I want to say in introducing this bill. There will be an opportunity shortly to go through some of the details in committee stage. It seems clear to me that the arguments are obvious and sensible. There have been suggestions by some individuals, as reported in the media, that the position we're taking is not fair, appropriate or consistent with a variety of principles. I reject that totally.

I look forward to listening to the debate and to all the members, and I will respond in detail to all of the comments made in the course of second reading debate. Incidentally, I might just draw to members' attention that there are a couple of minor amendments on the order paper that we will get to in the committee stage, in the event that that may have some impact on the nature of the second reading debate.

A. Warnke: In response to the bill before the House, I would say that I am honoured to lead the discussion and debate. While I'm honoured, perhaps I could add that it's not my pleasure; it's not the pleasure of the opposition, either, because we do see several problems with this bill.

I think it is appropriate to begin by responding to some of the introductory comments made by the Attorney General in introducing this bill. Initially I would say that there are still some particular problems. Certainly the Attorney General has introduced the idea that there should be some sort of suitable settlement. That is not really clear. Emphasis has been placed on the fact that the taxpayer is vulnerable and that this is costly to the taxpayer. There is a heavy emphasis placed on the fact that the taxpayer is paying the burden of these costs. Actually, on that point.... I will address it again a little later on, but for the time being I will just introduce my remarks in response to the Attorney General's remarks, and then I will elaborate on that further.

[ Page 1727 ]

On this particular point that the Attorney General has placed so much emphasis on -- that facing these cases before the courts is expensive for taxpayers and that there are tremendous legal costs involved, and what we are merely doing is introducing a bill that essentially will reduce those costs.... If there is a problem of injustice, I operate under the premise -- and I believe most people do -- that when it comes to matters of justice or injustice, in that context legal costs become a secondary argument. Later on I will elaborate on the fact that there is a good deal of injustice in presenting this particular bill and that the way that it has been presented, the expediency in terms of time, perhaps undermines what we would consider as due process.

I think there is a question here of injustice. So at the outset I would suggest that it is not merely a question of addressing a financial problem and that we are trying to save money for the taxpayer. But if there is an injustice -- and I will explore this later -- it does not matter whether it is expensive for the taxpayer.

In addition to that, just on this one particular point.... I am pleased that the Attorney General has examined the various arguments that have been put forward in the press. One argument that has been put in the press is that perhaps the route taken by the Attorney General, by this government, in presenting this bill will end up making the entire package more expensive. We will explore that a little later as well.

F. Gingell: He probably picked his own commissioner.

A. Warnke: There was a reference to the hiring of Mr. Schwindt and the report that is coming down. There is some confusion -- and this has been raised by some members of the press -- as to the timing of this particular report; we'll dub it the Schwindt report. What is the timing in the context of this bill? To some members of the media and the public, there is some confusion here as to why we are in a particular hurry.

Another comment made by the Attorney General concerns what is fair and equitable. I will explore later on some concepts of property and the relationship between the state and individual rights to property. I intend to explore in this House whether this particular bill will constitute something fair and equitable. At the end of my presentation, I hope to convince members of this House that perhaps the factors of what is fair and equitable are certainly not the case in the presentation of this bill.

What is the nature of this bill, then? This is Bill 32, the Resource Compensation Interim Measures Act -- RCIM, if you want to break it down a little bit further and make an acronym of it. I think it's called the "Wreck'em" act. The RCIM Act is not alone. The RCIM Act is actually in conjunction with many other acts that seem to want to wreck professional careers, wreck capital investment, wreck small business, wreck, wreck, wreck the economy.

Interjection.

A. Warnke: I am almost tempted to say something else, but that would be unparliamentary.

The RCIM Act attempts to do a number of things. Perhaps in some ways, following the debates that we've just had on the previous bill and on some of the other bills in this House, maybe it is appropriate that the RCIM Act emerges as the acme of all our debates.

What is the nature of the bill? The nature of the bill is that it freezes all legal actions. It's been dubbed by the Attorney General, by the minister, as a temporary freeze. Perhaps we could pause on that note. Actually, "pause" was another word used by the minister. What is defined by a temporary freeze? A temporary freeze takes us to when? To the end of June? To a year from now? Or is it before? Some members of the public have also pointed out that the terms "pause" or "temporary freeze" may actually mean something later on; it may actually extend itself into the future.

I know that's not what the minister intended when he said that he has stated that there is a pause, that this is a temporary freeze. I take a look at his words and accept them prima facie. However there is an argument that this may establish a precedent. While the minister may be convinced that this is a temporary freeze, the nature of this kind of bill, if it becomes an act, might actually set a precedent for other governments, other ministers to say: "This has happened in the past. If we can intervene in the legal process, why can't we do it later on? It has been done once before. Why not do it again?" I always get worried about precedents. I always get worried about something that becomes an act that is supposedly temporary or is to apply only in certain kinds of conditions. Of course, later on we may get dismayed when successive governments, successive ministers, take advantage of the precedents that have already occurred.

Just to provide an example of that, there is the famous notwithstanding clause in the Constitution Act, 1982. I recall vividly that that was only to apply in extreme situations; and therefore, accordingly, our Charter of Rights and Freedoms would always prevail, except under the most unusual circumstances. We know from recent experiences that that's not the case. Premiers have since been tempted, and some of them have actually invoked the notwithstanding clause. That's an example of something that was passed and accepted, the argument being that it will not establish a really profound precedent.

I would suggest that the nature of this bill could establish a precedent to be abused in the future. What is the nature of this bill? It freezes all legal actions by preventing individuals and companies with claims in the mining industry or who have timber rights.... Those people can have that taken away by the government. Where those companies and individuals accordingly are seeking compensation for their previous right to mine or log public lands, then suddenly that is suspended by the government. When this occurs, of course, individuals and groups want to use due process to seek compensation. Yet compensation in this situation is suspended.

This bill also halts actions already before the courts, and in another way restricts due process for those who 

[ Page 1728 ]

already lost their claims and their rights. Mind you, in presenting the bill originally, and in some of the comments made later that we need some sort of strategy for acquiring public land; that the government needs public land, perhaps to double park space or to deal with land that will be given to native groups and so forth.... Once again, on the surface I might accept that argument that this is what the government really intends; that its intentions are good. However, I think the means are questionable, because they do not follow due process.

But there are others who would go even further, who are more cynical than I am and who say: "Oh, is that really all? Is that really it? Is that why the government really wants land? Or is it establishing a precedent to attack property rights?" Property rights is something I want to take up in detail. But looking at the clock, I might not have the opportunity today. Property rights is one segment of an argument that can be used in this particular debate that I think deserves examination and discussion as fully as possible in this House.

[5:30]

As to the nature of the bill, one of the more prominent members of our journalistic community -- and he is certainly not an individual who is antagonistic towards the government -- suggests outright that the actions of this particular bill are essentially hostile. The person I refer to is the columnist Vaughn Palmer. I was also quite impressed, not with the article or any of the articles by the individual, but by the individual's reference to Bill 32, and this was Mr. Brian Kieran of the Province. I think Brian Kieran is a notable person of the journalistic community, and also an individual who is generally not antagonistic towards this particular government. Even that columnist refers to Bill 32 as "a nasty little piece of legislation." It's interesting that even this particular columnist, who is generally favourable to the government, has made that kind of an assessment.

Those are just two examples of many in the public who see this particular bill as a hostile move against the mining industry, against the forest industry. Why? Because it restricts the property rights of those investors in these industries. More broadly, the nature of the bill places severe restrictions on property rights in mining and in the forest industries. More broadly, the nature of the bill interferes with due process in the courts. Indeed, there is an argument put by members of the public that it does not even adhere to the due process in expropriations.

This leads to an aside. I don't know to what extent I'll elaborate on it in this particular debate, but it does deserve to be touched on, just a bit anyway. There is even something about this bill that has implications in a constitutional context. Now I simply do not know whether the ministry and the minister have examined these possible implications in a constitutional context, and maybe it does deserve some elaboration here, so I'll touch on that briefly as well.

Just to outline the nature of the bill, I do not believe we can look at this bill in isolation either. We must look at this bill in the context of other bills presented in this House. Indeed, there is a pattern that has emerged among the various bills presented in this House. Some might cynically say that the pattern has been a general strategy of attacking the so-called rich. We have pointed out how the legal community can be targeted and is targeted in Bill 9, or how the medical community is targeted in Bills 13 and 14. I would also want to mention that it might be relevant to raise at this point how this bill must be looked at in the context of other legal bills coming before this House.

A moment ago I mentioned the possible constitutional implications of the bill. I'll describe this briefly, because there are some other points I do want to raise. When we are dealing with the entrenchment of property rights and so forth, there has been a case that came before the Supreme Court of Canada, and the court ruled that the value of mineral interests, when they are expropriated by the government.... Compensation is to be determined by an arbitration tribunal established under the statutory law of the province. One particular writer picked this up -- that due process under the present set of laws means that if you follow the present set of laws it is intra vires. I suggest that it is possible, but it is something that I hope the ministry re-examines.

The proposed legislation could be challenged as contemptible of the Supreme Court of Canada's ruling. Therefore, when I think about it more, I wonder if some changes to section 96 of the original Constitution Act of 1867, regarding section 96 appointments, are even appropriate. There is an argument stimulated by this bill that is now being put forward that if the provincial government is in the position to assert itself in such a way that it suspends property rights, should it be a situation whereby section 96 is changed, whereby provincial governments make appointments to the Supreme Court of Canada? Certainly, in another context, the suspension of property rights and how that may be perceived and construed by legislation of this sort may well stimulate -- especially in British Columbia and throughout western Canada -- a certain group of people who have argued so strongly and vociferously for some sort of injection of property rights in the constitution of Canada in the proposed changes that are coming forth in the coming months.

Up until now, I think there has been an argument that by and large we respect property rights. Indeed, the reason we respect property rights and don't have to worry about property rights is because we have the British parliamentary tradition. We have firmly established in that tradition a reinforcement and strengthening of property rights. Legislation such as this, which is antagonistic towards property rights, may actually stimulate people to think that our property rights are vulnerable. It's not just a matter of property rights with regard to mining companies or mining interests, or individuals who are in logging and so forth. There may well be a fear that property rights in a broader sense are vulnerable.

I think members of the government know this full well, because I'm sure they've confronted it time and time again in their ridings. They've met constituents who are concerned about individuals who say that if we elect an NDP government, we're liable to lose our house. I would suggest that this is a pretty narrow and 

[ Page 1729 ]

maybe sometimes inappropriate view. I'm not out to defend the NDP, but I could well understand that some people who might say this.... One could point out that this is inappropriate, or that it's not the way any political party is in this country. No one is out to suspend personal property rights such as the right to a house and that sort of thing. Nonetheless, government members who have knocked on doors and campaigned -- or even between elections -- have met members of the public who have expressed their concern about what a socialist government will do in terms of reinforcing property rights. Such legislation as this will be extremely bothersome to the people who have these concerns.

I think all members of this House, but particularly those on the government side, would be well advised to consider the perception of suspending property rights. Just to finish this particular aspect, I do have some concern that the implications may even be constitutional in these two contexts.

There are some other points that I want to raise with regard to this bill before us. Bill 32 puts on hold any proceedings at which compensation is being sought. One thing I'm a bit disturbed about is whether those who will be affected by this bill were consulted. I'm not talking specifically about companies. Where was the consultative process? Were individuals consulted whose advice to the government would be considerable in jurisprudential matters? Were certain socioeconomic groups really consulted?

Interjection.

A. Warnke: I suspect not, hon. member.

An Hon. Member: Did you wake up?

A. Warnke: I'm surprised the hon. member has woken up; I'm taking my time today. I thought I was droning on. I'm not my usual flamboyant self.

An Hon. Member: Hear, hear.

A. Warnke: Any time, what the heck. The hon. members are wondering whether they should heckle or not.

This proposed legislation will place severe restrictions on property rights in the forest and mining industry. The bill temporarily prevents companies and individuals from seeking substantial compensation where the government cancels their rights to log and mine on public lands.

The bill is another arbitrary move by the government, without consultation with some of the groups I mentioned: industry; native groups, whose lands -- the rationale being provided here -- we are trying to address; and the general public. The bill puts the future of native land claims as well as the future of the resource industry in British Columbia into question. One underlying rationale for this bill -- the compensation of native land claims -- is actually in question. And despite its so-called temporary nature, one has to ask what this bill will do for the future of the forest and mining companies and industries that have invested in this province. Indeed, others on this side will be more eloquent on this matter, I'm sure.

[5:45]

I would like to mention at the outset that this kind of approach to the forest and mining industries will have a tremendous and profound impact on the primary sectors of the economy. British Columbia has a very vibrant economy, a very diversified economy. We are very fortunate to have an economy that is diversified from primary through secondary, tertiary and quaternary sectors of the society; that is good. But by the same analysis, the secondary, tertiary and quaternary sectors of the economy are heavily dependent on the primary sector, and this consistent attack on the primary sector is something this province cannot afford.

I'm not sure that as a result of this attack we're suddenly going to see companies fleeing east of the Rocky Mountains and south of the 49th parallel and so forth. That's possible, but what concerns me is that indigenous British Columbia and Canadian companies themselves -- the ones we rely on, the smaller companies and so forth -- will gradually essentially dry up. I'm very concerned about that. And not only the companies that are affected immediately by this act -- what kind of signal are we sending to the primary sector of the economy and to those who are involved in it? We do not want to see the primary sector dry up, because in a sense that is what the other sectors of the economy are so dependent on to flourish.

I know this from my own experience. When we look at other economies in Canada and throughout North America -- but particularly in Canada, where there are many primary sectors of the economy....

The Speaker: I hate to interrupt the hon. member, but could the hon. member confirm if he is the designated speaker on this bill?

A. Warnke: I am the designated speaker.

Interjection.

A. Warnke: Wait until tomorrow, fellah. Just get back here. You'll be okay.

The primary sector is an important part of the economy. We are quite concerned that this pattern of attack on the primary sector will have tremendous implications throughout the rest of the economy. Let me say once again that I recall vividly what happened in northern Ontario with the drying up of the mining industry and the tremendous impact it had not only on those who had jobs in the mining industry, but on other sectors of the economy -- and in Quebec and in Newfoundland and on it goes.

The primary sector of the economy is an extremely important sector. People who live in the lower mainland, perhaps in this city, have to appreciate and respect, as well as understand, that this is such an important area of the economy. If the government continues to act with such arbitrary actions, what confidence will be generated in our economy for companies having investment? It's interesting that when we talk about companies and so forth, there is that label "corporations" attached to them. A good way, 

[ Page 1730 ]

I suppose, to sell a bad idea is to somehow label companies as multinational corporations: this is the section of the economy that is really hurting the economy; they exploit the people, and all the rest of it. Simply label companies as multinational corporations, as bad corporate citizens and all the rest of it, and you can thereby jam any bill through. That's what was bothering me about the previous bill.

At the same time, we have to generate confidence in our economy. With this particular kind of legislation, we have a very difficult situation whereby we send out very clear signals that the companies had operated under one set of rules, but never accept that somehow these rules will stay in place, that you know what the laws are and can act and invest accordingly. No, they could be suspended just like that, very quickly -- even when the individual says: "Well, gee, how do we respond to this? Well, we'll appeal it. We'll use due process to appeal this particular decision by the government."

Here's the problem, hon. Speaker. We, in our society, have been so dependent on everyone making sure that they get a fair hearing, no matter what area of law is involved or who appears before the courts.... Even with those who commit heinous crimes, the nature of our system of law is such that we want to be assured.... Indeed, individuals should have that assurance that they've had a fair day in court, even when they've been found guilty, even when they've been fined and even when they've been incarcerated. The idea of our system is to ensure that everyone is convinced that they've had a fair hearing.

Very clearly, from many comments that are made by the public, there is a fear that due process is not being followed and could be suspended very quickly. Therefore it sends a very dangerous signal to companies and individuals who want to invest. The implications are even broader than simply those who invest in the mining and lumber sectors of our economy. I think everyone understands that there is risk involved. Everyone understands that when they go into a particular area, circumstances change. Times change, and maybe a certain amount of expropriation is necessary under certain kinds of conditions. At the same time, all of us operate under a fundamental premise that even when those situations occur, there is something called the due process of law; one could use the legal process to get a fair hearing. In the last analysis, maybe one's rights are expropriated, maybe the compensation is pretty poor, but the main thing is to convince people that they've had a fair hearing, have gone through due process and have gone as far as they can in this. It is the suspension of these property rights that are a bit bothersome.

Property rights are so important. We have become dependent on property rights. When it comes to expropriation and so forth.... It is interesting to reflect philosophically for a moment on the background of why we accept property rights as being so essential a feature in modern society. One of the classical defenders of property rights will be recognized right off the bat as a small-l liberal who has also recognized that under certain situations expropriation may be necessary. Some adherence to the concept of common property is absolutely essential. John Stuart Mill -- and some know him very well....

An Hon. Member: He was a liberal?

A. Warnke: Yes, as a matter of fact, he was a liberal. John Stuart Mill once stated that the claim of the landowners to the land is altogether subordinate to the general policy of the state. The principle of property gives them no right to the land but only a right to compensation for their portion or interest in the land that it may be the policy of the state to deprive them of. To that, their claim is indefeasible by the state. They should not be dispossessed of it -- and this is the key -- without receiving its pecuniary value or an annual income equal to what they derived from that. The fact is that the key words are the "right to compensation." Everyone recognizes that yes, we may have property, but property can be vulnerable due to changing times and so forth, but there must be some due process for proper compensation.

Hon. Speaker, I have much more to say on this subject, but given the time, I would like to suggest that we adjourn debate.

Motion approved. Presenting Reports

U. Dosanjh: I have the honour to present a report from the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills, and I move it be read and received.

Motion approved.

Clerk Assistant:

"May 14, 1992. Hon. Speaker, your Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills begs leave to report as follows:

"The preamble to Bill Pr401, intituled An Act to Incorporate the Coquitlam Foundation, has been approved, and the committee recommends that the bill proceed to second reading.

"The preamble to Bill Pr402, intituled Vancouver School of Theology Act, has been amended in committee, and the bill has been approved as amended. The committee recommends that the bill as amended proceed to second reading.

"All of which is respectfully submitted. Ujjal Dosanjh, Chairman."

U. Dosanjh: By leave, hon. Speaker, I move the rules be suspended and the report adopted.

Leave granted.

Motion approved.

Hon. C. Gabelmann moved adjournment of the House.

Motion approved.

The House adjourned at 6 p.m.

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