1994 Legislative Session: 3rd Session, 35th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
TUESDAY, MARCH 22, 1994
Afternoon Sitting
Volume 13, Number 10
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The House met at 2:04 p.m.
Prayers.
F. Jackson: Two constituents of mine who travelled from Kamloops to observe the proceedings today are in the gallery: Jeanette Hamilton and her daughter Sheena. I'd like the House to bid them welcome.
M. Farnworth: The former president of the Union of British Columbia Municipalities is here. I said that he would have no trouble cruising through the election, and in fact he didn't. Would the House please welcome Mayor Len Traboulay of Port Coquitlam.
C. Serwa: It's a real pleasure to introduce two very special people from my constituency in Kelowna. One is my guest Don Pettman from Kelowna, a chartered accountant who is very interested in the proceedings of today. The other is a very good friend, Paul Durose. Would the House please make them welcome.
F. Garden: It's a real privilege to introduce a very new member of the Garden clan. Accompanying my wife, Margaret, is my daughter Anne and seven-week-old Miranda Alexina Garden, our new granddaughter.
D. Symons: It's my pleasure to introduce to the House Mr. Kirk Lawrie, the CEO of Richmond Savings Credit Union, which is the third-largest credit union in British Columbia. They had the good sense to have their office in my riding.
H. Lali: It's my pleasure to introduce a friend of mine, Ram Hira. Would the House please make him welcome.
C. Evans: It's my pleasure to introduce to the House the only person in Nelson-Creston who can work the political system better than I: the president of Selkirk College, Leo Perra.
R. Chisholm: It gives me great pleasure to introduce today Mr. Ed Dawdy, my CA, who keeps me on the straight and narrow. Would the House make him most welcome.
J. Tyabji: I'd like to introduce to the House Mr. Ron Harvey, president of the Alliance.
E. Conroy: I'd like the House to make welcome the president of the UBCM and mayor of Warfield, Mr. Bill Trewhella.
N. Lortie: It's my pleasure to introduce a very important member of my community, a reporter for the local newspaper, the Delta-Optimist, Maureen Gulyas. Would the House please make her welcome.
D. Mitchell: Hon. Speaker, I think you've opened the floodgates. Many people are here today who are obviously interested in what the Minister of Finance is going to say in a few minutes. Many industries are represented here. I wonder if the members of the House would welcome the head of the Mining Association of British Columbia, Gary Livingstone.
L. Reid: It's my pleasure to welcome today three very fine gentlemen from British Columbia: Dr. Arun Garg, who is president of the B.C. Medical Association; Mr. Floyd Sully, president of OCS Technologies in Richmond; and Mr. Victor Godin, president of the B.C. Forestry Association. I would ask the House to please make them welcome.
Hon. B. Barlee: I'd like to introduce Don Monsour, who, for the first time in his life, has lost his voice. Welcome to the House, Don.
F. Randall: In the gallery this afternoon we have Keith Tsukishima -- and that's a tough one for me. He is here representing the Burnaby Chamber of Commerce. He is also the general manager of the Holiday Inn in Metrotown. Would the House please make him welcome.
T. Perry: The member for Cariboo North has yielded to me the honour of introducing the most famous teacher in Likely, B.C., Mrs. Susan Zirnhelt, who also happens to be the wife of the Minister of Agriculture, Fisheries and Food.
I'd also like to welcome Mr. Ron Woodward, president of the Science Council of British Columbia, and a number of other scientists and technologists who are in the audience today. And since nobody else has done so, on behalf of the other members of the House, I'd like to extend a welcome to all the other people who are here with us today, who are equally welcome.
Hon. M. Harcourt: I'd like members to give a very warm welcome to two people who were left out of the generic introduction of the hon. member for Vancouver-Little Mountain. Mr. Bill Yee is the first Chinese-Canadian to be elected to Vancouver City Council and is a leader in a number of activities in and around the city of Vancouver and province of British Columbia. With Mr. Yee is Brian Lo, who is the head of the Asia desk at the Canadian Imperial Bank of Commerce. Would you give them both a very warm welcome.
D. Mitchell presented a bill intituled Parliamentary Calendar Act.
D. Mitchell: This bill establishes a fixed parliamentary calendar, with a schedule for sittings of this House. Under this bill there will be two sessions of the Legislature each year. The first would commence on the first Monday in March and last no longer than four months; the second would commence the day after Thanksgiving in October and would be for a maximum duration of two months. Furthermore, at the opening of a new session of parliament, the Speaker of the House, with the advice of the Lieutenant-Governor-in-Council, must draw up a parliamentary calendar to comply with the provisions of this act. Nothing, however, prevents the Legislative Assembly from amending the parliamentary calendar or the Lieutenant-Governor-in-Council from recalling the House between sessions to deal with emergencies related to the health, safety or economic well-being of the people of British Columbia. The requirement for a session to commence can also be waived when a provincial general election occurs within 60 days of the date fixed for a legislative session.
The federal House of Commons has a parliamentary calendar, as do many American legislatures. It is now time to
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end the current ad hoc approach in our province, which sometimes results in either legislation by exhaustion or lengthy periods of adjournment, such as the recent one which lasted for 231 days. It is now time to enact a parliamentary calendar of our own. I'm pleased to commend this bill to members of this House.
Bill M210 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.
D. Mitchell presented a bill intituled Budget Presentation Act.
D. Mitchell: Many organizations in both the public and the private sectors of our province are strongly affected by the government's financial plans and have a right to receive this information in a regular and predictable manner. This bill provides for a fixed budget date each year. It also requires the government to publicly release a White Paper setting forth the government's financial projections for the provincial economy no later than the first Monday in December. This White Paper would include the financial assumptions, trends and requirements of not only government ministries but all Crown corporations for the following fiscal year.
In addition, this bill requires the Minister of Finance to present the provincial budget for the following fiscal year for all government ministries and Crown corporations to the Legislative Assembly for its consideration no later than the third Monday in March every year. This bill introduces a much-needed level of stability and certainty in the affairs of the government and of this House. British Columbians have a right to regular and predictable budgetary reports from their government.
[2:15]
This government has recently shown a surprising willingness to embrace the reforms advocated by this member. However, in order to implement this modest but important reform, it will not be necessary to fire anyone, including the Minister of Finance. I am very pleased to commend this bill to all members.
Bill M211 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.
PROVINCIAL TAX RATES
G. Campbell: My question is for the Premier. Prior to the election he said that his government would address government priorities without adding to the tax burdens of British Columbians. Since that time we have watched as British Columbians have seen additional taxes of over $1.5 billion levied on them. Small businesses in British Columbia face the largest marginal tax rate of any jurisdiction in Canada. Can the Premier tell British Columbians why they should believe him today when they clearly couldn't in 1991?
Hon. M. Harcourt: It is interesting that the Leader of the Opposition and the opposition seem to ignore the tax dump from Ottawa that's happened -- the $2.2 billion of taxes that were dumped on the taxpayers of British Columbia, and that this government has been able to absorb and overcome. They seem to ignore that the previous right-wing coalition in this province lied about the state of the books in this province. They said it was a $400 million deficit, and it turned out to be a $2.4 billion deficit and climbing every year. And we've overcome that deficit.
I can say the record is very clear that we're leading the country in job creation. We are reducing the deficit. We are giving a three-year tax freeze. And wait until you see the budget that's coming up today.
G. Campbell: Supplementary to the Premier. The downloading that's taken place from the federal government to the provincial government is nothing compared to what this government has done to municipal taxpayers across the province over the last two years.
If this government is leading in any way, it is leading in spending, in borrowing and in taxing the people of this province. The Minister of Environment has said that fee increases are equivalent to hidden taxes. My question to the Premier is simply this: does the Premier agree with his minister that fee increases are hidden taxes?
Hon. M. Harcourt: Hon. Speaker, I think that's interesting, coming from a mayor who increased taxes on small business in Vancouver last year by 60 percent. This is the defender of small business? I'd run a long way from this Leader of the Opposition if I were a small business-person in the province.
Special programs that should be self-financing for people who use a specialized service shouldn't be a burden on the rest of the taxpayers who aren't using it. Self-financing services and user fees are a good idea when they're targeted fees. No, I don't think they are a hidden tax at all. They're properly paid for by the people using the service.
G. Campbell: Supplementary to the Premier. I am amazed, hon. Speaker, that on budget day the Premier of the province, who spent a fair amount of time in the city of Vancouver, does not know how the property tax system works in the city of Vancouver or in any other community in this province. They are regressive taxes. The budget of 1994 would not be nearly as bad if this government had held their expenditures to a 2.5 percent increase, as we did in the city of Vancouver last year.
My question to the Premier is: does the Premier understand that the load he has placed on small businesses in this province has in fact driven jobs in the small business sector from this province and continues to kill jobs in British Columbia, just as his tax-borrow-and-spend policy drives businesses out of business?
Hon. M. Harcourt: Hon. Speaker, the Leader of the Opposition should stop reading the figures for Newfoundland, Alberta and those other provinces that are having genuine economic problems and challenges. In British Columbia in 1992 the number of new jobs went up by 28,000. In 1993 the number of new jobs went up by 43,000. This province created 30 percent of the new jobs in Canada, with only 12 percent of the population. We created 64 percent of the new full-time jobs in this country. That reflects the skill of the private sector and entrepreneurial British Columbians who are creating those jobs, because they have confidence in the province of British Columbia, unlike the Leader of the Opposition and the Liberals.
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COST OF GOVERNMENT ADVERTISING
M. de Jong: Last Tuesday we asked the Premier if he felt it was hypocritical to spend taxpayers' money on NDP propaganda, especially when that's the very thing he railed against in the practice of the former Socred government. The ads are continuing. Does the Premier believe it's appropriate for the taxpayers of British Columbia to be financing an NDP propaganda campaign?
Hon. M. Harcourt: The Liberal opposition doesn't like to hear good news. They just want to be purveyors of bad news. Unlike the rest of British Columbia, they don't like to hear that jobs are up, the deficit is down and there's a three-year tax freeze in this province.
M. de Jong: The Premier's response smells a lot like the fertilizer that was spread on the legislative grounds yesterday.
We have information -- and I'd like the Premier to confirm it -- that over $400,000 of taxpayers' money has been spent on this NDP propaganda. That's enough money to put 250 kids in school in my riding. I want the hon. Premier to confirm that that amount of money has been spent.
The Speaker: Has the hon. member a supplementary question?
M. de Jong: In spite of being assured by the Premier in 1991 that there would be no new taxes, the average British Columbia family now pays an additional $2,000 worth of NDP taxes. Does the Premier really believe that this publicly funded misinformation campaign will make British Columbians forget his government's record of tax increases? How much more public money is the Premier willing to spend on this campaign of propaganda?
Hon. M. Harcourt: It's good to have that question from the good ol' farm boy, as he called himself -- from that city-slicker lawyer over there.
You know, it's interesting who the average family is. To me, the average family is not one that makes $125,000 a year. He's talking about the average British Columbia family making $125,000 a year.... They have contributed to getting rid of 60 percent of the deficit, building the B.C. economy and making sure the children of the people of British Columbia have good schools to go to and that their families have good-quality health care. We're building roads and new superferries, and we're seeing B.C. lead the way in Canada.
IDA REPORT ON PROVINCIAL FINANCES
J. Weisgerber: My question is for the Premier. In its February report the Investment Dealers' Association noted that in only two years, the net public debt in British Columbia has doubled under this government. They further note: "There has been a massive deterioration in public finances, masked by rising taxes." Can the Premier tell this House and British Columbians whether or not he's had an opportunity to review this report, and if he has had someone from IDA come in to explain it to him?
Hon. M. Harcourt: Yes, I have read that report. I note that the Social Credit government built up a debt of $23 billion in this province. A lot of that debt was self-financing through Crown corporations -- B.C. Hydro and B.C. Rail. I'm sure the Social Credit Government thought that was a good idea, and that the building of assets for a growing province was also.
Interjections.
The Speaker: Order, please.
Hon. M. Harcourt: Since that time, approximately $3.4 billion of assets have been added by building new schools, a new university in the North and two new superferries on a mortgaged basis -- as you build any large assets. All of these assets are going to be of great benefit to British Columbians.
The Speaker: The member for Peace River South on a supplementary.
J. Weisgerber: If the Premier really understood that, he would understand that under his government, the net operating debt of the province has doubled in two years. The Premier would also understand that the report clearly indicated that expenditure increases in British Columbia have risen more rapidly than in any other jurisdiction in this country. Will the Premier agree today to table those prebudget submissions he's received that outline potential budget reductions, so that all British Columbians can see the advice he received prior to bringing in his budget?
Hon. M. Harcourt: Hearing the member of the Reform Party, I think it is -- who used to be Social Credit -- talking about the deficit, when he was part of a cabinet that told us we had a $400 million deficit and it turned out to be $2.4 billion, is a little bit like having a bank robber complaining about the bank security system. The gall! The cheek! I know you're struggling to find a new identity, but remember your history and the debt you left the people of this province that we're cleaning up.
The Speaker: Final supplemental.
J. Weisgerber: To the Premier: if you're having trouble with the name now, wait until the next election; then you'll know what trouble really is.
In his review of this IDA report, did the Premier recognize that they clearly point out that British Columbia has the highest marginal income tax rate in the country and a corporate capital tax that's crippling businesses in this province? Has he read that, and has he understood the need to take action today to correct that?
[2:30]
Hon. M. Harcourt: Yes, I understand that the people of British Columbia have contributed to paying off the deficit that the previous government left for us -- whatever their name is now, whatever their name may be next week, or changed to the week after. The point is that we have addressed that deficit. We have addressed the financial concerns of the people of British Columbia, and I have made it very clear that the people of this province have succeeded in helping get rid of 60 percent of the deficit in this province, and it's now time for the government to get rid of the waste and lack of accountability in the public sector that the previous government had. Those cuts are making government smaller. Those changes to government are being made on behalf of the people of British Columbia by this government. As soon as you're finished asking these questions -- which you should feel some shame about -- you're going to hear the answers from our user-friendly budget, coming very shortly.
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CORE REPORT ON VANCOUVER ISLAND
W. Hurd: A question to the Minister of Finance. Yesterday we asked the Finance minister why her ministry sat on an internal report on forestry cuts, job losses and the B.C. economy for two and a half years. Thanks to a ministry leak, we now can confirm that the report does exist. Since the minister is determined to suppress this report, she will at least assure the House that Mr. Owen had access to the figures before he made his recommendations for Vancouver Island and, more importantly, that he has access to them before he makes his recommendations for the Cariboo and the Kootenays?
Hon. E. Cull: All government information has been part of the CORE report. Anything the ministry has done has been accessible to Mr. Owen.
Hon. E. Cull: Hon. Speaker, I move that the House at its next sitting do resolve itself for this session into a committee to consider supply to be granted to Her Majesty.
Motion approved.
Hon. E. Cull tabled the comptroller general's report of interim financial statements for the ten-month period ending January 31, 1994.
ESTIMATES OF SUMS REQUIRED FOR THE SERVICE OF THE PROVINCE
Hon. E. Cull presented a message from His Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 1995, and a supplement to the estimates for the fiscal year ending March 31, 1995, recommending the same to the Legislative Assembly.
Hon. E. Cull moved that the said message and the estimates accompanying the same be referred to Committee of Supply.
Motion approved.
Hon. E. Cull: Hon. Speaker, I move, seconded by the hon. Minister of Women's Equality, that the hon. Speaker do now leave the chair for the House to go into Committee of Supply.
Hon. E. Cull: Hon. Speaker, I am pleased to present the third budget of this New Democrat administration -- a budget that builds a prosperous and secure British Columbia. In our first two budgets, we had to respond to some serious problems: we had to cut spending growth and reduce the deficit. We met these challenges, and British Columbia now has a firm fiscal foundation.
Thanks to the efforts of all British Columbians, our economy has turned around. We now have one of the strongest economies and best job-creation records in North America. We have one of the best deficit-reduction records in Canada. We have the second-lowest overall taxes in Canada. We have the lowest debt, in relation to the size of our economy, of any province. And we have the highest credit rating of any province.
In preparing this 1994 budget, I consulted extensively with groups and individuals across British Columbia. In these meetings, British Columbians clearly told me their concerns. They want us to hold the line on taxes, to be tough on spending and to eliminate the deficit as quickly as possible. They are concerned about their own job security and about their children's future in a rapidly changing economy. And they want us to focus on building the future -- investing in people and ensuring that British Columbians have the skills they need to prosper in a new economy. Hon. Speaker, this budget responds to these concerns and puts forward our plan for British Columbia's economic future.
We recognize that government alone cannot build our economy and create stable long-term jobs. This is a challenge that requires the initiative of many groups and individuals -- in the private sector as well as the public sector. But it is government's job to focus on the future -- to make sure that prosperity today leads to economic security tomorrow -- with new jobs and new business opportunities everywhere in British Columbia.
We as a government have two key goals. One is to eliminate the deficit and ensure that British Columbia remains on a sound financial footing. The other is to build British Columbia's economic foundations for the twenty-first century. Over the last two years we've made substantial progress in getting B.C.'s fiscal house in order -- cutting spending growth in half and reducing the deficit by over $1 billion. But, equally important, we have done it while protecting the health of our families and the education of our children. And we have avoided the economic nosedive that would have occurred had we repeated the radical restraint program of a decade ago.
Hon. Speaker, this 1994 budget builds on the progress we have already achieved. It reduces the deficit significantly for the third year in a row. It puts forward a plan to achieve a balanced budget by 1996-97. It continues to reduce the rate of spending growth by cutting waste and finding new efficiencies. It continues to make the tax system fairer for ordinary people and business. And it puts the lid on taxes for the next three years.
Our most important goal is to build British Columbia's economic foundations for the twenty-first century. That means making the new public investments required for private sector growth; maintaining quality health care and education for B.C.'s families and children; putting new skills in the hands of British Columbians; ensuring a long-term future for forest workers and their communities; and providing support for small and medium-sized businesses in the forefront of B.C.'s transition to a new economy.
In our first two budgets, we began moving toward these goals. Our economy performed well last year, but it would be irresponsible to sit back now and take our long-term future for granted. Unless we continue to lay the foundations for longer-term progress, we will not be able to pass on a prosperous and sustainable economy to our children. This budget introduces new initiatives to help ordinary people, communities and businesses all over British Columbia -- initiatives to increase skills training, build roads and public facilities, and revitalize forest communities.
Let me now review our economic performance and prospects in a bit more detail. B.C.'s economy grew by 3.2 percent in 1993 -- our strongest performance in four years. As a result, we now have one of the healthiest economies in North America. In 1993 exports grew by over 16 percent, retail sales were up by 8 percent, capital investment was up by over 8 percent, housing starts reached an all-time record of 42,800 units and business bankruptcies fell by 20 percent.
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Over the last 12 months 76,000 new jobs have been created in British Columbia -- almost half the jobs created in all of Canada. That's more than 200 new jobs every day. In 1993, 63 new businesses were incorporated each and every day.
British Columbia's strong performance is expected to continue next year as the global economy recovers. Overall, our economy is forecast to grow by 3.4 percent in 1994. However, sustaining economic growth over the longer term requires continued strong management of the province's finances. Unless we can reduce and eliminate the deficit, we will not be able to continue providing first-rate education for our children or quality health care for all of us.
In 1991 we inherited a financial mess. We faced government spending that was growing at the rate of 12 percent each year -- far in excess of growth in the economy. We faced a federal government refusing to honour its funding commitments to hospitals, colleges and universities. Spending exceeded revenue by $2.4 billion, and an independent audit showed the deficit soaring to $3.4 billion by this year if no action was taken. When this government took office, the Premier pledged to cut the deficit each and every year until finally eliminated. Our first two budgets recorded steady progress. This budget continues that progress and lays out a plan to achieve a balanced budget by 1996-97.
Let me first summarize the financial results for 1993-94, the year just ending. I'm pleased to announce that this government's spending will be right on budget at just under $19 billion. Because our economy is prospering, revenue will be almost $17.7 billion. That's $220 million higher than projected in last year's budget, and every penny of this new revenue has been used to cut the deficit and hold down debt. Therefore the 1993-94 deficit will be $1.28 billion -- well below our budget target of $1.54 billion. That's a cut of over $1 billion in our first two budgets.
In this budget, hon. Speaker, we're building on our record of sound financial management. British Columbia's continued strong economic growth means that provincial government revenues for 1994-95 will total $18.73 billion, an increase of 5.9 percent. Spending will total $19.63 billion. That represents an increase of 3.5 percent -- the smallest increase in nine years. In three budgets we've cut the rate of spending growth by almost three-quarters.
In this budget, British Columbia is taking another major step forward, bringing the deficit well under $1 billion. The deficit for 1994-95 will be $898 million -- the third significant drop in three years. By the end of the coming fiscal year we will have cut the deficit by $1.5 billion, a reduction of over 60 percent since we took office.
I'm also putting forward this government's debt management plan. In recent years, Canadians have become increasingly concerned about the growth of government debt. British Columbia is fortunate to have the lowest debt in relation to the size of its economy of any jurisdiction in Canada. However, the accumulation of debt, if not controlled, raises the amount we must spend on interest payments and reduces our longer-term ability to fund key programs for people. A workable debt plan must recognize that debts supported by B.C. taxpayers have two major components. One component is the accumulation of government operating deficits, called direct debt. That's the equivalent to buying your groceries with a credit card. When the government spends more than it takes in, this type of debt increases. Halting the growth of direct debt requires a balanced budget.
The second major component of B.C.'s debt is the amount the province borrows to build key assets like schools, hospitals and roads. Unlike direct debt, this debt generates real economic returns over time -- for example, an efficient transportation system and a healthy, well-educated population. This is similar to taking out a mortgage to buy a house. Money is borrowed to buy a valuable asset, and the debt is gradually repaid on a fixed schedule. A high level of in-migration to British Columbia in recent years has increased the need for public assets of all kinds. The radical restraint of a decade ago created a backlog of unfilled needs for new schools, justice facilities, colleges, universities and hospitals. The debt incurred to build these facilities is backed by the value of the assets. The total replacement value of British Columbia's public assets is $60 billion, more than double the level of outstanding public sector debt.
[2:45]
Our debt management plan has two goals: one is to eliminate the province's deficit; the other is to ensure that the level of total tax-supported debt reflects the province's ability to repay through increased economic growth and revenues. The progress we've made in reducing the deficit in this and previous budgets has slowed the growth of British Columbia's direct debt, and we'll build on this progress by eliminating the deficit in 1996-97.
In preparing this budget and the longer-term plan to eliminate the deficit, the Premier directed that further progress be made by reducing spending growth, not by increasing taxes. Like most other provinces, this government's deficit reduction over the last two years relied on a combination of expenditure controls and tax increases. But taxpayers have done enough to help the government put the province's fiscal house in order. Therefore for the next three years there will be no new taxes, and no increase in existing tax rates, no increase in personal income tax rates, no increase in sales tax rates, no increase in fuel tax rates, no increase in corporation income or capital tax rates, no increase in Medical Services Plan premiums, no increase in average school and rural property tax levels and no increase in property transfer tax rates. Reaching our balanced budget goal without tax increases requires a further reduction in spending growth to the 2 percent level in the next two budgets -- well below inflation and population growth.
In this budget we're taking a further step to help cap and reduce growth in the debt. The B.C. Endowment Fund will be wound up and most of its assets sold to pay down the government debt. This action will generate approximately $600 million for debt reduction. In addition to freezing taxes, we're introducing a number of tax cuts to increase the fairness of British Columbia's tax system. Together these tax cuts total $112 million: half to improve fairness for individuals and half for B.C. business.
First, we're fulfilling a promise made during the last election campaign and eliminating the property transfer tax for first-time homebuyers. British Columbia's housing prices are the highest in Canada, and this measure will help to make the dream of home ownership a reality for thousands of young families. The first-time homebuyers exemption will replace the existing high-ratio tax relief program and will be available to qualifying homebuyers who have resided in B.C. for at least one year. The maximum qualifying purchase price will be $250,000 in the lower mainland and capital regions and $200,000 elsewhere in the province.
Second, we're increasing the homeowner grant phase-out threshold by $50,000. The grant will be phased out only for those properties valued above $450,000. This adjustment will ensure that 95 percent of B.C. homeowners are not affected by the phase-out of the homeowner grant. Third, we are restoring the trade-in allowance on the purchase of automobiles. Consultations over the last year have shown that this measure had unintended effects for both buyers and
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sellers. We're also raising the threshold for the tax on luxury vehicles to $32,000. This change reflects both price increases and the fact that higher-priced vehicles that are needed to live and work in many northern and rural parts of the province are not luxuries.
This budget also includes tax fairness for municipalities. During my prebudget consultations, municipal governments expressed concern over the level of municipal grants as well as grants paid to municipalities in lieu of property taxes. I'm pleased to announce that this budget maintains the level of unconditional grants to municipalities. In addition, we'll implement a new approach to determining unconditional grants in future years that will provide greater predictability. We'll also undertake a thorough review of grants in lieu of property taxes for provincial institutions such as universities, hospitals and Crown corporations, and we'll take steps to improve fairness for those communities that bear the burden of providing services to these institutions.
This budget also introduces a package of measures to increase fairness for business and help the private sector create jobs. I will outline the details of those later on in the address.
Bringing down the spending growth rate over the last two years has challenged the public sector. Adjusting for population and inflation, real government spending per person declined last year. This government's decision to rely solely on spending controls to continue reducing the deficit creates an even greater challenge to the public sector. This year's spending growth of 3.5 percent is well below last year's growth and only a fraction of the 12 percent growth rate inherited from the previous administration. It represents another real cut in spending per person of 1.3 percent.
Cutting waste and duplication means ensuring that all government agencies are fulfilling a valid public purpose. In 1992 we launched an initiative to reduce the large number of government boards, agencies and commissions. This year we continue to review each government body, asking some basic questions. We asked if the public body was still performing a useful function or whether the service performed was more appropriately provided by the private sector. We asked whether there were other ways of providing the service more efficiently and at less cost to the taxpayer, and we asked whether the public body was duplicating a service provided elsewhere.
As a result of this review, I am announcing today the elimination of five major government entities. First, as I have already announced, the B.C. Endowment Fund will be wound up and the proceeds used to reduce the province's debt. Second, the Round Table on the Environment and the Economy will be eliminated. This advisory body has undertaken valuable work, but other government initiatives in environmental protection and economic development have made its role redundant. Third, the B.C. Petroleum Corporation will be wound up. The deregulation of the natural gas industry has eliminated the need for this body, and its remaining functions could be more efficiently performed by the Ministry of Energy, Mines and Petroleum Resources. Fourth, the British Columbia Energy Council will be wound up during the coming year. Its remaining consultative and policy advisory functions can now be performed within the existing mandates of the B.C. Utilities Commission and the Ministry of Energy, Mines and Petroleum Resources.
Fifth, Government Air Services will be wound up. Its air fleet will be sold, and the government will contract with the private sector for emergency response, air ambulance and other air travel requirements. An evaluation has shown that contracting these services to the private sector can achieve cost savings.
Over the coming months, I am looking forward to receiving the support of all members for additional steps to eliminate waste and duplication. Both elected and non-elected officials must continue to do their part to hold down the costs of government.
We are continuing the salary freeze for MLAs and senior public servants, as well as a 5 percent pay cut announced last year for the Premier and ministers. We are also moving to ensure greater control and accountability for salary costs in the broader public sector. These costs account for 50 cents of every dollar spent by the provincial government. until now, the government has had limited responsibility for collective bargaining and executive compensation in schools, hospitals, universities and collages. Last year we established the Public Sector Employers' Council to increase the effectiveness of public sector labour management relations. We have instructed the new council to undertake a comprehensive review of management compensation in the public sector.
We have also taken specific measures to control costs and improve efficiency in the provision of education and health services. This year, additional funding for public schools will be dedicated directly to children in classrooms. These grants provide no new funds for salary increases and put a cap on school district administrative costs. Over the coming year we'll be implementing a provincewide teacher bargaining system to improve cost-effectiveness for B.C.'s taxpayers and provide greater stability for students.
Health care is our largest single budget item, accounting for one-third of provincial government spending. A key goal of our New Directions initiative is to find more cost-effective ways of providing high-quality health care. As part of the new regional management structure for health care, we're developing a series of new management arrangements to achieve greater efficiency in purchasing, administration, payroll and executive compensation. A recent audit identified potential savings of up to $50 million from better hospital purchasing practices alone.
Taxpayers expect that income assistance will be targeted to those in need, without fraud or abuse. In January of this year we announced a series of new measures to combat welfare fraud and improve accountability. These initiatives are expected to save $20 million annually, and we will be strengthening them in the coming year.
We are also taking measures to improve tax enforcement, minimize fraud and ensure that everyone pays their fair share. We will increase our auditing and collection efforts, and there will be higher penalties for tax evaders. To help businesses comply, effective midnight tonight we are introducing an amnesty period during which they can remit overdue consumer taxes without penalty. It will end on June 30, 1994. After the amnesty period is over, we will step up tax enforcement and collection.
Hon. Speaker, some would like us to go further than the measures I have just outlined. They would like us to slash spending, eliminate the deficit immediately this year and freeze our debt. However, eliminating the deficit immediately would mean long waiting lists for health care, crowded classrooms, a lower level of law enforcement and more young people turned away from colleges and universities. Freezing our debt would mean an immediate halt to the construction of badly needed schools, hospitals, colleges, roads and other vital infrastructure. The experience of radical restraint right here in B.C. during the 1980s shows that it doesn't work. Not only would it make us less healthy,
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less well-educated and less well-off, but it would also reduce our ability for the province to compete in a global economy.
[3:00]
Although we are well on our way to eliminating the deficit and stabilizing our debt, a major source of uncertainty remains. This uncertainty relates to essential programs for people, cost-shared between our province and the new Liberal government in Ottawa: health care, post-secondary education and income support.
The previous federal government attempted to deal with the deficits by off-loading it's financial responsibility for these programs onto the provinces. The result has been a steady decline in the federal share of funding for essential services for our province. That means B.C. taxpayers have had to pay more and more each year just to keep our essential programs from deteriorating. The impact on our deficit has been dramatic. In the absence of federal off-loading, we would have recorded a budget surplus of almost $900 million last year and almost $1.6 billion for this coming year. That's $2.5 billion that could have been used to reduce B.C.'s accumulated debt. Let me repeat: B.C. would have been in the black this year and last year, with no budget deficit, if the federal government had lived up to its responsibilities.
The new Liberal government in Ottawa has stated that federal-provincial cost-shared programs will be included in a major review of social programs over the coming year. However, even before undertaking the review, it has announced its intention to continue off-loading onto the provinces. In its recent budget, the Liberal government announced that by 1996 it will reduce its payments for income support and post-secondary education to 1993 levels. If this happens, the provinces will have to assume even more of the costs of providing these programs.
The funding problem for Canada's key social programs cannot be resolved by a continuation of unilateral federal off-loading. A lasting solution requires a new, cooperative approach with the provinces, which ensures that provincial responsibility to provide key services is matched by access to adequate revenue sources. British Columbia has offered to play a positive and constructive role in rebuilding a federal-provincial partnership that will preserve our national social programs for the twenty-first century.
British Columbia's economy must create jobs with a future. Our economy is changing. In the old economy we relied on a small number of well-established markets for our products. In the new economy we must learn to compete in a wide range of specialized global markets. In the old economy our competitive advantage lay in the high quality of our natural resources. In the new economy it will be based on the quality and skills of our workforce.
We face challenges in building the new economy: the challenge of reconciling competing demands while getting the greatest social and economic value from a limited natural resource base, the challenge of helping workers and their communities adapt to a changing economy, and the challenge of creating a climate that encourages new private sector investment and growth. Unless we take action now to meet these challenges, we will not realize our full economic potential.
Our plan for long-term economic growth and job creation has five key elements: first, providing the new public investments in infrastructure required to support private sector growth; second, making investments in people, which means giving priority to the health of our families and the education of our children; third, putting new skills in the hands of British Columbia's workers and young people; fourth, ensuring a long-term future for British Columbia's forest workers and their communities; and fifth, encouraging the growth of small and medium-sized businesses to lead the transition to a new economy.
A strong, diversified private sector requires an effective public sector investment strategy that will meet the needs of communities across the province for key investments like roads, communication networks, water and sewer systems, and education facilities. Public investment creates jobs in the short term and tangible economic benefits in the long term. Last year this government introduced B.C. 21, a major initiative to increase the effectiveness of public investment and job creation activities. B.C. 21 meets vital needs for new public facilities in health care, education, child care, research and development, transit and ferries. It ensures the maximum level of regional benefits from all public sector investment -- jobs, opportunities for private sector suppliers and training for workers. B.C. 21 plans and builds important transportation links using the B.C. Transportation Financing Authority. It funds innovative, regionally based job creation and training opportunities, and it supports community initiatives to build or improve neighbourhood facilities.
We will continue to build on the success of B.C. 21 during the coming year. Public investment in schools, health care facilities, post-secondary institutions and justice facilities will total $1 billion in 1994-95. To enable working families to take full advantage of education and job opportunities, we will continue our three-year initiative to create 7,500 new child care spaces, and we will be introducing new initiatives to support quality child care that meet the needs of families at a cost they can afford. A new consolidated capital planning process, put in place this year, will ensure that major capital investments are made in the most cost-effective way. It will also ensure that British Columbians obtain the greatest possible benefit from capital expenditures in terms of job creation, training, skills development and regional economic impact.
The B.C. Transportation Financing Authority will invest $300 million in 1994-95. This investment will keep the Vancouver Island Highway on schedule and allow us to make a start on other long overdue transportation projects in the coming months. The Build B.C. special account will be continued with a budgetary allocation of $100 million. Priorities for the fund will include the continuation of the community grants program, new initiatives to support affordable housing and new partnerships with the private sector to expand science and technology industries. The B.C. 21 initiative will be supplemented in 1994-95 by the new Canada-British Columbia infrastructure program. This new federal-provincial-municipal program provides a total investment of $675 million over the next two years. The provincial contribution will be $225 million over two years, and funding will be targeted mainly to priorities set by local government with an emphasis on water, sewer and local transportation projects.
Our investment in people is even more important than our investment in physical assets. A healthy, well-educated population enhances both our quality of life and our long-term economic performance. In our first two budgets we gave highest priority to maintaining the quality of health and education services in the face of growing population and serious fiscal constraints. This budget continues to reflect that priority. Expenditures of health care for 1994-95 will be $6.4 billion. That represents an increase of $200 million, or 3.3 percent, over the previous year. While this increase is below those of the last few years, it's significantly higher than other provinces. For example, Alberta's budget contains a 10 percent cut in health care expenditures this year.
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While British Columbians give highest priority to maintaining a first-rate health care system, they also know that rising costs simply cannot be passed on to the taxpayer. We have to find better ways of providing first-class care. Last year we introduced the New Directions initiative to develop the most cost-effective way of ensuring a healthy population. We also introduced a landmark labour management accord that allows the necessary transition from expensive acute care to effective community-based care. We negotiated settlements with B.C.'s doctors that protects universal access to care within the means of taxpayers.
This year we're taking a number of measures to protect those health programs experiencing the most serious cost pressures. The cost of the Pharmacare program has grown from $215 million five years ago to $365 million today. To protect the viability of this important program, we've introduced the new therapeutics initiative. It will provide an independent scientific evaluation of new and existing prescription drugs and make recommendations on coverage and use. The Minister of Health will be announcing a number of additional measures to ensure the continued viability of the Pharmacare program.
During the coming fiscal year we will spend $3.38 billion on operating grants to elementary and secondary schools. That represents an increase of $130 million, or 4 percent, over last year's budget. This increase provides full funding for enrolment increases, an additional 1 percent for operating cost pressures and $30 million for children with special needs. Operating grants for universities and colleges will be $1.06 billion, up 3.4 percent.
Over the coming decades British Columbia's economic success will depend on the skills of its workforce. High skill levels are a critical factor in our ability to provide knowledge-based industries and jobs with a future for British Columbians. We're at a crossroads, where failure to move ahead decisively would create a widening gap between the skills of our workforce and those needed in a changing economy. The result of this failure would be increasing unemployment and rising costs for social assistance.
Last summer the Premier's Summit on Skills Development and Training brought together British Columbians from all walks of life to help chart a plan of action. In the coming days we will announce a comprehensive new skills and training initiative. This initiative will provide young people and working British Columbians with the skills they need in a changing economy. We're making skills-training programs more accessible, and we're making improvements to high school and post-secondary education to meet the needs of the real world.
In addition to the $34 million increase to post-secondary education, we're providing $90 million in new expenditures to implement the new skills initiative in 1994-95. Over the next two years we're committing $200 million to this important new initiative. Together with the grant increase for post-secondary institutions, this funding will create over 8,100 additional full-time post-secondary spaces in 1994-95.
Hon. Speaker, the health of our forest industry is critical to the survival of communities across British Columbia, yet our forests and the communities that depend on them are facing serious problems. Years of overcutting and poor management practices have led to a decline in both the quantity and the quality of the remaining resource. Employment in the forest industry has been declining for over a decade due to both mechanization and resource limits, and the disputes over the use of our forest land base are intense.
Taking action to overcome these problems and revitalize our forest sector is one of this government's highest priorities. In 1992 we launched the CORE process, appointing an independent commissioner to develop regional land use plans on the basis of community participation. We initiated a provincewide timber supply review to address the legacy of overcutting and to set harvest levels that are sustainable. We launched a $40 million forest-worker development initiative under B.C. 21 to increase the level of silviculture in forest communities while creating jobs and improving workers' skills, and we provided new funding through B.C. 21 to increase the small business forest enterprise program.
Hon. Speaker, we will continue to give priority to renewing our forests over the coming year. Despite the budgetary pressures we face, we are maintaining our total silviculture spending at $275 million to ensure the long-term viability of our wood supply.
We're increasing our funding to the small business forest enterprise program from $109 million to $140 million. This new funding will increase the wood supply to smaller manufacturers of high-value-added products, and the cost will be offset by new forest revenues.
During this legislative session we'll be introducing a new Forest Practices Code, and we're providing new funding of $20 million to ensure the implementation of this vital initiative.
Finally, over the coming months we'll be announcing a comprehensive package of initiatives to ensure future jobs and the sustainability of forest communities. It will focus on investing in forest lands, protecting the forest environment, ensuring high levels of value-added manufacturing and assisting forest-based communities and workers in the face of change.
[3:15]
While the public sector can provide essential support through its investment in areas such as infrastructure, natural resource management and skills, most job creation occurs in the private sector. It's the private sector, particularly small and medium-sized businesses, that is playing the lead in British Columbia's transition from the old to the new economy.
During my prebudget consultations across the province, business groups made it clear that they're not looking for handouts. They want better access to investment capital, less government red tape and a fair tax system.
We've already taken a number of initiatives over the last two years to help the private sector grow and create jobs. We opened the B.C. Investment Office to match private sector investment with new opportunities and cut the red tape that's sometimes faced by new businesses. We introduced B.C. Focus to assist new, innovative B.C. businesses, we launched B.C. Buy Smart to help more B.C. businesses get government contracts, and last year we lowered or eliminated the corporation capital tax for 3,500 small businesses.
In this budget I'm pleased to introduce a number of measures to help small business grow and create jobs. First, we're increasing the threshold for the corporation capital tax to $1.5 million of paid-up capital, and the tax will now be phased out between $1.5 million and $1.75 million of paid-up capital. This change will eliminate or reduce the tax for another 2,000 small businesses. Second, we're exempting cooperatives and incorporated family farms from the corporation capital tax. This change will reduce taxes by approximately $4 million and help another 500 businesses. Third, we're introducing measures to reduce the costs that small businesses face in collecting and remitting taxes to government. The required frequency for remitting sales and
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hotel room taxes will be reduced, and the commissions paid to businesses for collecting these taxes will be increased. Fourth, we're allocating another $10 million to the successful B.C. Focus program. This new funding will help innovative B.C. businesses raise the equity capital they need to start up or expand.
We're also introducing a package of tax reductions and other measures to support the growth of key sectors of British Columbia's economy. First, we're introducing an $18 million package to improve the competitiveness of the mining industry. B.C.'s mining industry is a vital part of our overall economy and a major economic base for many communities. It accounts for 16 percent of our exports and many thousands of skilled jobs. Specific measures I'm announcing today include a reduction of the mineral tax rate for coalmines, an enhanced allowance for capital expenditures on new or expanded mines, a new exploration program and funding to continue the Canada-B.C. mineral development agreement.
Second, we're spending $5 million more to help make tourism marketing more effective. Programs will be cost-shared with the private sector and will provide an important boost to this key regional industry.
Third, we're increasing support for British Columbia's cultural sector by $1.8 million. Part of this expenditure will be allocated to creating a new funding partnership with the federal government and the private sector.
Fourth, we're reducing the jet fuel tax by 1 cent per litre for international flights to advance the Vancouver International Airport as a major North American gateway to the Pacific Rim. Additional tax reduction measures are outlined in the budget appendix.
British Columbians have reason to feel good about the future of our province. British Columbia has come through a challenging economic period, and we've emerged as Canada's strongest economy. We have created more jobs than any other province. We have the second-lowest taxes of all Canadian provinces. This government has the highest credit rating. And we have the lowest government debt as a percent of our economy of all Canadian provinces.
This budget builds on that strength. It is a practical and pragmatic budget with clear goals. It focuses on areas where government can make a real difference, and it recognizes our economic future depends on the initiative and talent of the private sector, the public sector and all British Columbians.
Hon. Speaker, this budget shows that our fiscal plan is on track, and the sound financial management of the last two and a half years is starting to pay off. It cuts the deficit for the third year in a row. It puts forward our plan to balance the budget in two years. It freezes taxes for the next three years. And it includes $112 million in tax cuts to make the tax system fairer and to encourage private sector growth.
But there is much more to be done if British Columbia is going to maintain its position as the best place in Canada to live, work and do business. This budget is focused on the tasks ahead. It places a high priority on skills training, job creation and the long-term health of our forest sector. It recognizes the challenges we face as a province and makes the transition to a diversified value-added economy. And it protects vital health and education services. With this budget, we are taking concrete action to invest in the future and make sure all British Columbians have a fair chance to participate in the new economy.
This budget proves that we've been listening to British Columbians. And we will continue listening and working with people all over the province to build up a healthy economy and a secure future for everyone.
F. Gingell: Mr. Speaker, I heard some good things in this budget that we have recommended to this government time after time. Exemption from the property transfer tax for first-time buyers was our proposal. It only took them one year to recognize the stupidity of cancelling the sales tax allowance on car trade-ins. And it is only in the official opposition of this House that we have continually called for the B.C. Endowment Fund, or the privatization benefits fund, to be cancelled, and for the funds to be rolled back and paid off against our debt. For everybody's information, I can get an affidavit stating that I have a private member's bill to that effect sitting on my desk. I should have got it in earlier.
When we dealt with the issues of Bill 12, which was the switch-around to the B.C. Endowment Fund, the then-Minister of Finance said, after we had spoken out so strongly against it: "I'm very disappointed...."
Interjection.
F. Gingell: Mr. Speaker, he said it all.
There are two little adjustments that every member in this House should make when they get this book. It is critically important for us, in recognizing the budget facts and proposals, to ensure that everything is recorded and shown in a fair and consistent manner. When everybody gets their budget book, I'd like them all to turn to page 3, the revised forecast for the year 1993-94, and add the sum of $83 million, which is the amount that has been spent in the past year by the B.C. Transportation Financing Authority. Add to the expenditures for the year 1994-95 the sum of $290 million, the amount that was in the budget, rather than the amount the minister stated. That will bring this year's budget deficit to just under $1.2 billion. Let's be truthful. When they were in opposition, this government complained about financial bookkeeping shenanigans by the Social Credit administration. They are guilty of playing exactly the same game.
[3:30]
In the past two and a half years, prior to the release of today's budget, what has this government done? They have increased debt service costs by 53 percent.
Interjection.
F. Gingell: Listen and learn.
They have increased the tax load for every B.C. family -- an average of four -- by $2,000. Today, after the Premier stated that British Columbia is about to turn the corner, we in the Liberal caucus believed that the government would actually begin to fight the debt and turn B.C. around. In this budget they have done nothing. Clearly this is a nothing budget. There is nothing in this budget that will alleviate the concerns of families in the resource-dependent communities in this province. There is nothing in this budget that will reduce the reliance of our economy on our natural resources. There is nothing in this budget which indicates that the government has even a shred of an economic plan for British Columbia. Clearly this budget is the first effort by a desperate government to convince British Columbians that they deserve to be re-elected.
If they truly wanted to be re-elected, they would be listening to what British Columbians are saying. People are concerned about their families and their continued ability to care and feed them as the province changes. Poll after poll keep being released demonstrating clearly that people are unhappy with the employment climate in B.C. It is simply inexcusable that after two and a half years in power this government can provide absolutely no assurances to
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communities around the province that they will be consulted prior to decisions being made that affect their livelihoods. In fact, Mr. Speaker, the Premier only last weekend signed an agreement with aboriginal people in the Clayoquot area without so much as phoning local government representatives and keeping them informed about the process. With this type of record, is it any wonder that the Premier was roundly booed yesterday afternoon.
The lack of an economic program is just another symptom of the spend-and-tax attitude that the NDP government has taken during the last two budgets. Finally, after two years of massive tax grabs, the Premier has decided to abandon the reckless theft of taxpayers' hard-earned money. The Premier's announcement of no new taxes over the rest of his government is like being told that you won't have any more cavities once all your teeth have been removed. The truth is, hon. Speaker, that in last year's budget there was an increase to the highest marginal rate of personal income tax in this province, which is anticipated to bring in to this government $105 million. After the Premier's statement, I expected to hear that this had been cancelled. No new taxes. No more taxes. What are these?
The Premier's message is flawed. I also think that the new Minister of Finance should review the issue of what constitutes a tax. Put simply, taxes are private income paid by citizens for government services. They're simply a price. Therefore taxes increase in a variety of ways. First, there are built-in increases. The more you make, the more they take. Every British Columbian fortunate enough to receive an increase in wages will be paying more taxes during the term of this government.
Second, we have delayed taxes, better known as debt. At the end of this coming fiscal year, total government debt will be equivalent to $7,850 per person, or $31,400 for a family of four. Total debt has increased 47 percent since this government was elected. For the benefit of the new Minister of Finance, all of this debt is interest-rate sensitive, and all must be repaid through future taxes.
Third are the hidden taxes, which of course the NDP, now in government, considers to be costs for services rendered. However, while in opposition the Minister of Employment and Investment stated: "This assault on British Columbians continued in last year's budget, with a further $38 million increase in Medical Service Plan premiums and a 3 percent hidden tax on hydro rates." Do you recognize that? Clearly this minister believes that hydro rate increases are taxes. When in opposition, the member for Prince George-Mount Robson said: "There are going to be increases in motor vehicle licence and permit fees." No increase in taxes? I think not. The Minister of Municipal Affairs, again when in opposition, said: "When is a tax not a tax then?" A tax, in your minds, is not a tax when it's a licence fee. When is a tax not a tax? A tax isn't a tax, you say, when it's a user fee. The Minister of Energy, Mines, and Petroleum Resources, while in opposition, said: "One of the things that the rural taxpayers in my riding also notice is that there is no freeze, and there has been no freeze, on fees and licences."
Mr. Speaker, certainly some members of cabinet understand that fees and licence increases are tax increases. Unfortunately, neither the Premier nor the Minister of Finance comprehend this fact. In addition, the cost of massive government regulations must be considered a form of hidden taxation. Compliance costs of the new Forest Practices Code could run as high as $1.5 billion. Just because the government doesn't end up with the money, it doesn't mean that it isn't a tax caused by this government.
The NDP, after two and a half years, still doesn't get it. The public should not and will not accept the posturing and rhetoric of this budget speech. Budgets have a single purpose: they should tell us how the government proposes to provide the services we really need, how it proposes to eliminate those services we can no longer afford, and how it plans to pay for what is left. This budget, much like its predecessors, is a testament to the failure of the NDP, a do-nothing budget from a do-nothing government and about which I will have more to say tomorrow. With this, I move to adjourn this debate.
Motion approved.
Hon. E. Cull presented a message from His Honour the Lieutenant-Governor: bills intituled: Budget Measures Implementation Act, 1994; Corporation Capital Tax Amendment Act, 1994; Mineral Tax Amendment Act, 1994; Property Transfer Tax Amendment Act, 1994; Medical and Health Care Services Special Account Act; Taxation Statutes Amendment Act, 1994; and Local Government Grants Act.
Hon. E. Cull: Hon. Speaker, these seven bills implement budget measures I announced earlier today during the budget speech. In moving first reading, I'll just state the primary purpose of each bill.
Bill 14, Budget Measures Implementation Act, 1994, eliminates the B.C. Cultural Fund special account and allows for the termination of the B.C. Endowment Fund and the B.C. Energy Council. The bill transfers the obligation to pay one-half of Medical Services Plan premiums for retired teachers from the government to individual school boards. It also allows government to target funding to school boards for aboriginal students and students with special needs and to cap school and district administration funding for boards.
Bill 15, Corporation Capital Tax Amendment Act, 1994, increases the exemption threshold, which is the threshold at which financial institutions begin to pay the 3 percent tax rate, and exempts cooperatives and incorporated family farms from the tax. The bill also makes a number of technical and administrative changes to the act.
Bill 16, Mineral Tax Amendment Act, 1994, reduces the rates paid by coalmines, allows exploration costs to be pooled and institutes a premium allowance for capital expenditures on new or expanded mines.
Bill 17, Property Transfer Tax Amendment Act, 1994, provides an exemption for eligible first-time homebuyers and phases out the existing high-ratio-financing tax relief program.
Bill 18, Medical and Health Care Services Special Account Act, creates a special account to permit unspent amounts from the Medical Services Plan to be carried forward for use in subsequent years.
Bill 19, Taxation Statutes Amendment Act, 1994, amends six statutes. The Home Owner Grant Act is amended to increase the assessed value at which the phase-out of the homeowner grant begins. Amendments to the Income Tax Act are made to allow mining companies to deduct mineral taxes in calculating provincial corporate income tax. The bill provides the authority, under the Motor Fuel Tax Act, to reduce the jet-fuel tax rate by 1 cent per litre on international flights. It also increases the annual limit of the fuel tax rebate for people with disabilities. The Social Service Tax Act is amended to increase the luxury tax threshold and reinstate the trade-in allowance for the purchase of passenger
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vehicles. The bill also introduces various measures to assist small business, enhance fairness and improve enforcement.
Bill 20, Local Government Grants Act, replaces the Revenue Sharing Act with an act that requires annual unconditional grants to municipalities and authorizes grants to local government and related organizations based on amounts appropriated in an annual supply act. The act terminates the revenue-sharing special account.
I now move first reading of Bills 14 through 20.
Bills 14 through 20 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.
Hon. G. Clark moved adjournment of the House.
Motion approved.
The House adjourned at 3:41 p.m.
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