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)
THURSDAY, MARCH 24, 1994
Afternoon Sitting
Volume 13, Number 13
[ Page 9603 ]
The House met at 2:06 p.m.
D. Jarvis: I'd like the House to welcome two constituents of mine from the Deep Cove area of North Vancouver, Mrs. Theresa Komey and Master Michael Komey. Would the House please make them welcome.
R. Chisholm: It gives me great pleasure to introduce to the House the mayor of Chilliwack, John Les. Would the House make him most welcome.
Hon. J. Pement: Today I'd like to introduce to the House ten students from Mount Pendleton School and their teachers Miss Celia Piddick and Mr. Atkinson. These students came from Good Hope Lake, which is north of Dease Lake. They've travelled 2,100 kilometres to come here and visit this Legislature, so I would ask that the Legislature bid them a good round of applause.
D. Mitchell: I have a couple of constituents here today who haven't come quite so far. From Squamish are the mayor of Squamish, Corinne Lonsdale, and the clerk of the district of Squamish, Mr. Bob Miles. Would members please welcome them here today.
Hon. P. Ramsey: I can't compete with the Minister of Highways either. Joining us in the gallery today is my wife, Hazel Ramsey. She's down from Prince George for a few days to be with me and observe the proceedings here. It's not often that she gets to join me, and I'm very pleased she's been able to. Please make her welcome.
F. Garden: I've introduced so many people in the last couple of days I'm wondering who's minding the store in my constituency. We've got two more here today from the Cariboo, Mike and Eileen Shan from Quesnel. They came down to see how we do such a wonderful job for them.
L. Krog: I would ask the House to welcome Barb Barrett, one of my constituents and a good friend of the member for Nelson-Creston as well.
L. Reid: I would ask the House to please welcome my sister. In the gallery today are Brenda Peloquin, Catherine Reid and my two nephews and a niece, Michelle and Liam Greig and Scott Peloquin. I'd ask the House to please make them welcome.
Hon. D. Miller: In the precinct today, if not in the gallery, is the member for Saskatoon-Clark's Crossing, MP Chris Axworthy. I would ask the House to please make him welcome.
L. Hanson: In the gallery today are three longtime friends of mine and former constituents, now residing in Vancouver. Would the House please help me welcome Bob and Margaret Peters and their son Paul.
F. Gingell: In the gallery today is longtime British Columbian and good citizen, Mr. Jock Smith, his wife and grandson. I met Jock many years ago when he was serving on the Surrey School Board, and I ask this House to make him welcome.
Hon. G. Clark: It's my pleasure today to introduce to the House His Excellency Dr. Hans Gunter Sulimma, Ambassador of Germany to Canada, accompanied by his wife, Helge Sulimma, and Mr. Franz Josef Meurer, consul general of Germany in Vancouver. I'd ask all members to make them welcome.
S. O'Neill: It's not often that I get a chance to introduce guests to this House, but I would like to welcome the mayor of Salmon Arm, Mr. Ian Wickett, and some longtime friends of mine, Elizabeth and Bert Revel, who are here today with their son Doug and a friend of Doug's. Would the House please make them welcome.
A. Hagen: I hope the House will join me in welcoming Richard and Carolyn Cawker and their four children. They are former constituents of mine in New Westminster, now living in Maple Ridge -- people for whom we are building new schools, I might add.
Hon. G. Clark: I'm delighted to introduce a former member of this House who is here today. Gordon Dowding spent many years in the chamber as an MLA and spent several years of cruel and unusual punishment in the chair in which you sit now, Mr. Speaker. I'd ask all members to make him welcome.
J. Beattie: In the gallery today is a friend of mine, Daphne Adey, who used to live in my constituency of Okanagan-Penticton but now lives in Malahat-Juan de Fuca. I'd like the House to make welcome a resident of Clarenville, Newfoundland -- that's where she came from. I want to assure the House that she has one of the most delightful accents that you could ever imagine.
The Speaker: I would just like to join in welcoming former Speaker Gordon Dowding. I was a backbencher when he first sat in this chair back in 1972. I'm sure that he has his fingers crossed for me at this time.
G. Campbell: I should start by saying I'm incredulous that the Premier is not here today to defend his integrity.
Interjections.
The Speaker: Order, please. Would the hon. Leader of the Official Opposition please take his seat.
The situation is obviously kind of tense today -- I can feel it. However, hon. members, I would request that you keep in mind that we are all guided by the standing orders that you yourselves have made available for the Speaker to use in trying to ensure that we conduct the affairs of the people of British Columbia in an atmosphere of disciplined debate and respect for the limits under which we can do so.
[2:15]
With that in mind, I would ask members to please avoid extended preambles to their questions and, in any case, make them relevant to the questions they are about to ask, and answers should be guided by the same spirit, in order that the Chair can stay out of the debate as much as possible.
PREMIER'S MEETING WITH FORMER SPEAKER
G. Campbell: My question is to the Deputy Premier. Last week we were told by the Premier that he had not met with
[ Page 9604 ]
the former Speaker prior to her firing. Yesterday we were told by the Premier that he met with her once. Today we've been told by the Premier that he has met with her twice. Can the Deputy Premier please tell this House and the people of British Columbia on which of those three occasions the Premier was telling the truth?
Hon. E. Cull: I fail to see what this has to do with the administrative duties of the Premier. I don't think the question is in order.
The Speaker: Does the Leader of the Official Opposition have a further question?
G. Campbell: Yes, I do, hon. Speaker, to the Deputy Premier. We all understand how important it is that our public utterances are true and consistent. It is important for the people of British Columbia to know exactly what took place with regard to the removal of the previous Speaker. My question to the Deputy Premier is: how many members of cabinet met with the former Speaker prior to her firing as a result of the Premier's activities?
The Speaker: Before I acknowledge the minister, while the Chair is hesitant to try to rule on the admissibility of the question as you're putting it, I must say that it is not a question that ordinarily falls within the purview of the ministerial responsibilities of the Premier in this chamber. The Chair does have difficulty with accepting comments which are not a part of what has happened in the House. I am not suggesting at this time that I'm going to rule the question out of order, but it is getting very difficult to see the relationship between what you are saying and what the standing orders require.
Does the member have a further question?
G. Campbell: Hon. Speaker, it's important for us to understand that the Premier is the one who appointed the former Speaker. The Premier is the one who during the debate pointed out to all of us...
The Speaker: Hon. member....
G. Campbell: ...that he in fact....
Interjections.
The Speaker: Hon. member, please take....
Interjections.
The Speaker: Hon. members, order, please. As far as the Chair is concerned, we are operating under an amendment to the standing orders which does not in any way address the subjects that we're discussing now. I'm not suggesting that they are not questions that members are trying to raise, but they don't fall within the guidelines of question period in the strictest sense. I would have to be shown where they do before I can permit the continuation of this line of questioning.
On a point of order, the hon. member for Fort Langley-Aldergrove.
G. Farrell-Collins: Hon. Speaker, quite clearly, under the rules of this House as they existed a little over three days ago, the Speaker was an appointment by the Premier. The Premier fired that Speaker....
The Speaker: Order, hon. member. If the member is attempting to impute an improper motive to any member of this House, it should be done by a substantive motion. I think the hon. member knows that.
ELECTION OF SPEAKER
F. Gingell: Mr. Speaker, my question is to the Minister of Environment, who was Government House Leader during the time that certain discussions were going on. We have a transcript of the Premier's discussions yesterday, in which it is very clear that the Premier stated that the Speaker was advised -- one presumes through the Minister of Environment -- that an election was going to take place during this session. In addition....
The Speaker: Order, hon. member. Would you please take your seat. Hon. members, when the Speaker requests that members take their seats, members know that the Speaker can do no more than make a request, other than take more stringent steps. I would appreciate, when you're requested to take your seat, that you do so.
Hon. G. Clark: Hon. Speaker, the members know, and have been advised, that this question is totally out of order according to our standing orders. The place to debate the question of the election of the Speaker was in the House. I remind all members that most members of the House voted on the election of the Speaker.
Interjections.
The Speaker: Order, please. This is probably a predictable situation. I knew it was going to happen sooner or later, but I wish it has been later. I am still on somewhat of a honeymoon, hon. members.
F. Gingell: Hon. Speaker, if I may, I will address this question to the Government House Leader. With respect to the discussion he had with the former Speaker, we have been advised that she was clearly advised that there was going to be an election of the Speaker and that certain matters were her choices. When one thinks that through, her choices were to resign, to face a vote of non-confidence or throw herself under a bus.
The Speaker: Order! Hon. member, you seem to be making quite a few generalizations which are bordering on imputing improper motives to members.
Interjections.
The Speaker: Order, please. Most of the language you are using is clearly unparliamentary and inappropriate at this time. I would ask that you keep in mind the difficulty for all members in this House to respect this process if you are going to take those liberties.
F. Gingell: Mr. Speaker, my question, then, is to the Government House Leader. Would he please advise this House of what choices he offered the Speaker at that time that would allow an election of the Speaker to take place during this session?
Hon. G. Clark: Notwithstanding, hon. Speaker, that the question is clearly out of order with respect to my administrative duties, let me advise members of the House
[ Page 9605 ]
that they should read a little history. The Speaker is not an employee of the government; the Speaker is elected by members of the House. In the past the Speaker has been nominated by the Premier and seconded by the Leader of the Opposition, as was the case with the previous Speaker. We had a debate in this House that changed the standing orders so that all members may vote on this historic reform, which we thought all members would support. It was, of course, appalling that Liberal members chose not to vote for the election of the Speaker of the House.
PROVINCIAL DEFICIT
J. Weisgerber: My question is to the Minister of Finance. In his most recent annual report the auditor general warned that he would have to place a reservation against the books of the government if they continued to misrepresent the fiscal agency loans as assets. Mr. Morfitt clearly indicated that the province's accumulated deficit is at least $3.6 billion higher than the government reported on Tuesday. Can the minister tell us why she has refused to properly disclose the true accumulated deficit in the budget tabled on Tuesday?
Hon. E. Cull: Hon. Speaker, the accumulated deficit for all of the Crown agencies, the direct debt of government and the fiscal agencies loans are entirely included within our budget and with our accounts. I don't know what this hon. member is talking about. We can now have a look at some of the reports that are coming in about the province. We have Wood Gundy, one of the leading financial organizations in the country, saying: "B.C.'s debt-to-GDP ratio is still the lowest in Canada, and this budget will not alter the market's view of B.C. as a top-notch credit." The second report that I've received is from G.A. Pedersson, a Vancouver-based economic consultant. He concludes: "B.C. is on its way to having the lowest tax burden in Canada, the lowest debt and debt-servicing burden in Canada and the highest quality of public services in Canada."
Interjections.
The Speaker: Order, please.
Hon. E. Cull: He says that "B.C. is the place of choice to live in Canada," and it will get better as a result of this budget.
J. Weisgerber: The auditor general reported: "...the current valuation of fiscal-agency loans has misstated the financial position of the government." The minister has ignored Mr. Morfitt's plea to properly record the misstated loans or assets that ultimately will have to be paid by government itself. Will the minister now admit that she rejected Mr. Morfitt's advice because if put into practice it would have put the current budget deficit at $2 billion rather than the $900 million reported?
Hon. E. Cull: The practice we have of borrowing money on behalf of school districts and hospital districts and colleges and universities was started when those people over there were in government. What we have on our books is the value of those loans. If we're going to add them to the deficit, we'd better add the value of the assets that those loans are financing. We have over $60 billion worth of assets in British Columbia, which is far in excess of any debt that is owed by the taxpayers of this province.
The Speaker: Final supplementary from the hon. member.
J. Weisgerber: It's sad to see that the Minister of Finance continues to thumb her nose at the auditor general. Will the Minister of Finance take the advice and recommendations of the auditor general and correct the reporting of debt in this province?
Hon. E. Cull: Our own comptroller general is heading a task force across Canada right now, looking at the whole issue of public accounting, including the valuation of assets and how we should record them on our books. So yes, we are looking at that issue. Our own province is taking the lead on it.
PREMIER'S MEETING WITH FORMER SPEAKER
G. Farrell-Collins: My question is to the Government House Leader. Yesterday the Premier stated that he and the Government House Leader had a meeting with the former Speaker. The House Leader denied that statement later on in the day. Could the minister tell us who's telling the truth: him or the Premier?
Hon. G. Clark: That is quite an inappropriate question in question period. The Speaker is a servant of this Legislature, not of members of the executive council and not of the government. This Legislature has taken a historic step to elect a Speaker. It's very unfortunate that members of the Liberal Party showed such contempt for parliament that they chose to not even vote for the Speaker of the House.
G. Farrell-Collins: We have seen the ultimate contempt for this parliament in the removal of a Speaker by that minister and his henchmen.
The Speaker: Questions, hon. member, questions.
G. Farrell-Collins: My question is: who is telling the truth? Is it the Minister of Employment and Investment, the Premier, or neither of them?
Hon. G. Clark: I'll say once again: the members of this House elect the Speaker, not the government. The members of this House have had extensive debates on changing the practice of electing the Speaker. That's as it should be. It's unfortunate the members opposite chose not to be part of that historic day. It's unfortunate they chose not to vote for election of the Speaker.
The Speaker: I will allow a final question; you got up as the bell was ringing.
REVIEW OF VLC CONTRACT
G. Wilson: My question is to the Minister of Employment and Investment. I think the minister would agree that when the government is about to invest large sums of public money into a private company, a review of the workings of that private company would be undertaken. Can the minister tell us, either in his capacity now or as the former Minister of Finance, whether a review of the contract between Vancouver Land Corp. and the city of Vancouver was undertaken prior to the investment of $15 million into VLC. If so, would the minister be prepared to table for us any findings they had with respect to the success of that company?
[ Page 9606 ]
Hon. G. Clark: Hon. Speaker, it's difficult for me to answer the question, because in my administrative responsibilities as Minister of Employment and Investment we've had no such discussions.
I will say, however, that prior to any investments made by the government of British Columbia -- and this certainly is no exception -- Doug Pearce, who is the director of investments for the government of British Columbia, which manages some $30 billion of public assets, did a full review and analysis of these questions to make recommendations or, in fact, make the decisions on behalf of government in a prudent way according to the Financial Administration Act and other guidelines which the government has for public debate. So this received no special treatment nor any investment, in this case in the VLC or the land corporation. It received the same treatment that other investments made by the government of British Columbia got at that time.
The Speaker: The bell terminates question period, hon. members.
On a point of order, the hon. member for Okanagan East.
[2:30]
J. Tyabji: Hon. Speaker, I noticed in this question period that a considerable amount of time was used up on points of order. I understand from the standing orders of this House that points of order are to be reserved for after question period. I'd just like to remind the Liberal House Leader.
Interjections.
The Speaker: Order, hon. members. The hon. member's point of order is well taken. The practice has been, albeit subject to the members' wishes as to whether or not they want to use that time in question period with points of order, to save those until the end of question period.
SALE OF GOVERNMENT AIR SERVICES ASSETS
Hon. R. Blencoe: I rise to respond to a question that I took on notice from the member for Surrey-Cloverdale yesterday. The question suggested that the government had purchased -- and I use the member's words -- "a completely like-new jet" last year, and he asked how much the government had paid for it.
First, hon. member, the government did not purchase an aircraft last year. But let me provide the information about some of the transactions that were conducted in '92. In September '92 we sold an older model Citation 500, which was not suited for use as an air ambulance. In November 1992 we purchased a used Citation 550 suitable for air ambulance work, and the same year in December we sold the uneconomical and unsuitable Challenger, which had been purchased by the former administration. The bottom line, hon. member, is that government reduced the fleet from six planes to five, and $2.2 million was returned to the provincial treasury on behalf of the taxpayers of the province. It's just one way we returned money to the treasury and did good business in British Columbia.
Hon. G. Clark: Hon. Speaker, I ask leave of the House to answer a question asked of the Premier by the Opposition House Leader yesterday.
The Speaker: I hear a nay.
Hon. G. Clark: Hon. Speaker, I have a ministerial statement.
B.C. HYDRO EXECUTIVE COMPENSATION
Hon. G. Clark: Yesterday the Opposition House Leader asked a question to the Premier with respect to a letter written to him by Mr. Marc Eliesen, chief executive officer of B.C. Hydro. The Premier asked me to investigate this matter. I have done so, and I can confirm that in fact a letter was sent, the substance of which I believe the member opposite did portray to the House. I can advise the House that I have been in discussion with Mr. Eliesen today. I have instructed him on behalf of the government not to proceed with any such writ and that the government believes it inappropriate for a chief executive officer of a provincial Crown corporation to take such action against the Opposition House Leader.
G. Farrell-Collins: I commend the Premier and the minister for their swift action. After a week and a half of questioning the pensions of B.C. Hydro, they acted very quickly when a court case came up -- in order to save those moneys for Hydro. I would hope that the minister and the Premier would act just as quickly to deal with the pension problems at B.C. Hydro and many of those outrageous expenditures that have taken place under this government -- signed contracts by his government and the former minister, who now sits as Minister of Environment.
D. Mitchell: I rise under standing order 35 to move adjournment of the House to discuss a definite matter of urgent public importance: namely, the confidence of this assembly in the government's role in the recent changes in presiding officers of this House. Advance notice of this request has been made to the Chair under practice recommendation No. 8. Our assembly cannot meet to conduct the business of the public without confidence in the presiding officer of this House. Mr. Speaker, there is no question about confidence in you, because you were, after all, freely elected by the majority of members of this assembly.
The Speaker: Order. Just a moment, hon. member. The matter you are raising dealing with confidence in the Speaker or someone occupying this chair is not appropriate under standing order 35. I should remind the hon. member as well that the Chair is considering a matter which is germane to this topic and will be bringing in a judgment, perhaps later today, so I would have to deny the motion at this time.
D. Mitchell: Mr. Speaker, just for clarification, I haven't made my motion yet.
The Speaker: The subject matter indicates that it is.... If you're saying that you have something to say other than what I am going to discuss later this afternoon, then please proceed.
D. Mitchell: Mr. Speaker, I can't anticipate what you'll be saying. However, I can say that reports outside of this House in the last 24 hours, based upon comments made by the Premier and other members of the executive council, have cast a further pall over the circumstances under which your predecessor resigned from the Chair.
[ Page 9607 ]
The Speaker: Order, hon. member. I think that it is quite clear that this is germane to the matter that was previously moved as a matter of privilege. I would rule that the member waits until he has heard the Chair's response to that matter. Thank you.
(continued)
G. Wilson: Hon. Speaker, as I rise to debate the budget today, it's important for us to note with a degree of certainty that the budget outlined by this government -- as important as it obviously must be to the people of British Columbia -- has to be characterized by one word and one word alone: debt.
Interjection.
G. Wilson: I hear the member opposite saying that it's wonderful. Well, it's wonderful if you close your eyes to what is clearly seen in the most important table, table G7: the debt summary of this province.
What do we know about the facts of this budget? The first thing we know is that if we look at the record of government spending in this province since 1991, we see that the overall increase in debt that will have to be carried by every citizen is $10.2 billion. Our debt is rising at over $1 billion per year.
Interjection.
G. Wilson: I heard a member opposite say that it's the lowest per capita debt in Canada. If we are going into debt at the rate we are.... It's small comfort to the people to see three million British Columbians realizing a $10.2 billion debt increase over five years, recognizing that there has been absolutely no strategy put forward in this budget that outlines any plan to deal with that debt. I would say that this budget counters that to some degree with the suggestion that the rising debt is encouraged, by virtue of the fact that this government is trying desperately to show that the deficit -- that is, the annual expenditure -- is under control. As a result, they are trying to shift their expenditures into government agencies and Crown corporations, and through that shift, they are increasing the long-term debt which has to be serviced by the people of the province.
[G. Brewin in the chair.]
If we look at the provincial government's direct debt, we see that of the $10.2 billion rise over five years, $6 billion has come from the provincial government's direct debt. That's a 56 percent increase over five years. Our debt is increasing at over $1 billion per year, for three million British Columbians. That is clearly unacceptable. British Columbians cannot afford to pay that debt under any long-term projection either in this document or by any other agency that has cared to take a look at the record.
We know that the three largest areas of expenditure statutorily required by government are Health, Education and Social Services. Those of us who have examined provincial budgets in the past also know that there is a limited amount of flexibility within those three statutorial categories with respect to what the government can do in terms of its expenditures. If we look at the overall expenditure by function, we see that Health -- which you would expect to be high -- is rising by 6.5 percent; Education by 6.6 percent; and Social Services by 14.2 percent, twice what we have seen for Health and Education. It must cause us grave concern that we have a statutorial obligation and need to put that kind of money into the social safety net in this province.
The other single largest expenditure in terms of the overall consolidated revenue fund is the servicing of the debt. Our debt servicing has gone up by 16.6 percent. We are spending just under $1 billion a year servicing the debt in this province.
We've heard a lot of talk about what this government did in response to automotive dealers who were concerned about last year's budget; indeed, they took some positive steps there. We have heard a lot about there being some kind of increase in the projection of revenue because our economy is going to expand and grow due to demographic projections -- which means the larger the population and the number of people in-migrating to this province, the greater the potential for overall revenue to government.
We know that the government has targeted their projections -- although I believe unrealistically -- with respect to a growth rate that they believe is going to be able to provide them an opportunity to balance their budget by 1996, in terms of their annual expenditure. If the government can sit there with a straight face and tell the people of British Columbia that by 1996 we will have a balanced budget, I would say they are misleading the people of British Columbia and need to come forward and tell them the truth. British Columbians recognize that by shuffling budgets you can come up with an annual expenditure that will resemble a balanced budget. Past Social Credit governments have been quite clever in masking the real debt. When the question of the deficit and accrued debt was raised today to the Minister of Finance, we noticed that the accounting procedures of this government are no different than the accounting procedures of past Social Credit governments. They have hidden the real deficit and painted a very rosy picture in what otherwise is an untended and rather bleak garden.
We must recognize that this government has an agenda to seek re-election on the basis of two main goals: (1) to put as many British Columbians to work as possible; and (2) to show that it is expending as little money as possible and has thus balanced the budget. Both of those are extremely laudable goals and would have our support if we had an honest and true reflection of this province's economy.
An Hon. Member: They are.
G. Wilson: But how can we say they will be when we look at the percentage of the province's gross domestic product and recognize that 23 cents of every dollar generated in this province is generated through government expenditure? We cannot simply look at the lines and figures on a ledger and say that because we recognize their is a balance in annual expenditures through projected revenues which may or may not be realized.... We have to look at real economic indicators to see what success we are having in strengthening our economy.
When 23 cents of every dollar is generated out of provincial government expenditures, we are not creating real wealth or expanding the economy, and we are not allowing wealth to be generated in our communities; we are masking a real problem. All of us are fooling ourselves if we take any solace from those figures or try to take the notion to the people that they're somehow going to be better off by 1996 because this government has demonstrated that it can balance its annual expenditures. It will not. You can see that
[ Page 9608 ]
with the current growth rate of over $1 billion annually, by 1996 our debt will have risen by $2.3 billion to $2.8 billion. The members opposite don't seem to think that this is a particular problem -- that debt can be financed on a long-term financial plan. The people of British Columbia need to know the servicing costs of that debt, and they need to know how this government is going to tackle and retire it.
[2:45]
We have heard a lot in the response to the Speech from the Throne about how this government responded to certain kinds of social needs by increasing moneys going to education, hospitals and various pet projects. But I would like to focus my remarks on what we have not heard from this government: what it should have done and needs to do if we are to have a sensible review of its conduct -- how it spends the taxpayers' money and prioritizes those expenditures sensibly.
Something of grave concern to me and others who are reviewing the overall wealth and development of this province is that nowhere in this projection is there an accurate demographic assessment of projected population increases over the next five to ten years. The problem we in government have with budgets is that we tend to budget on an annual basis without long-term projections. In the very first speech I made in this House when I was elected and stood as Leader of the Opposition, I suggested that we needed to start to think in terms of 60-year cycles. I believed then -- and I believe now -- that unless we started to have a long-term plan and to establish a blueprint to understand where this province ought to be years ahead, we could not put in place the kinds of policies and changes in government that would facilitate us in getting to that goal.
We have an economy based on false hope, because we are told that somehow things will magically turn around. We have a primary extractive base that is, at the minimum, stagnated; others would argue that it is diminishing. We have limited investment, if any, in science and technology and in the development of new industries that will carry us into a new economic paradigm.
We know that we have a limited capacity in this province to direct the funds coming into government to stimulate growth. Government is not the agency through which growth can occur; neither should government be the instrument that will create growth. Growth must occur because we have an investment climate in the province that will attract investment into industry and commerce, to generate real wealth in the communities in which our people live. In terms of its involvement, government can only involve the people of this province through the revenue it seeks from them and gives back to them. There is no solace in getting money from government, because the people supplied it in the first place, through taxation.
There are four areas we need to move in if we are to enter into a new economic paradigm in this province. I believe that we must do that, and we must do it now. This budget fails the people of British Columbia because it does not recognize that as we move into a new economic paradigm, there are two underlying philosophies that must be maintained and protected, and they are based on two very simple assumptions. One is that there is a limit to real growth, not only in terms of our resource-extractive sector but also in terms of the government's ability to involve itself in that. Secondly, our future is dependent upon our ability to compete in a continental economy that is quietly and slowly taking this nation and turning it into nothing more than a small partner of a large corporate entity.
I think it's time that British Columbians and Canadians woke up to see what is really going on. It's clear that what we're starting to examine in this budget is a lot of numbers that tell us about how this government is going to plan its way to the next election. There is nothing that tells us about how this government is going to build itself into this new economic paradigm.
What we witnessed on the steps of this Legislature with 20,000 forest workers speaking out against CORE -- something that I'll address in far more detail in my response to the Speech from the Throne -- clearly demonstrated fear. Those women and men, who live in the rural communities of British Columbia, are scared. They're frightened because their welfare is threatened, because we have not understood the concept of a limits-to-growth strategy that includes within it a defined working forest. We have not included the need to vigorously pursue mineral extraction in this province so that we have a viable, active mining industry; we have not put in place a fair, open and equitable manner by which we can extract and harvest from the sea; and have not paid attention to the cries and concerns of the farmers of this province.
There is nothing in this budget that gives hope to the people in rural British Columbia. There is only a promise of highway construction -- which after 30 days will be unionized. There's only a hope that we're going to invest in gambling casinos. Gambling casinos don't generate wealth; they take wealth. The reason that gambling casinos make money is because people lose great sums of money. The defence I hear is that $300 million leaves this province to go to Reno and Vegas and we need to keep it here. The $300 million that's lost in Vegas and Reno can be lost in British Columbia in a very similar manner. If these private casinos are allowed to reap the profit, there is no guarantee that those profits will go back to look after the social needs and consequences that will occur as a result of this government's policy to move toward profit gambling.
It's a sad day when a budget is held up as being wonderful and when there are only two areas where the government is increasing its spending from the consolidated revenue fund in large measure. One is in social services because of the growing number of people who are unemployed. The other is in servicing the debt that this government has imposed on the people as a result of its decision to shift expenditures from one side of the ledger to the other.
Where is the plan to look after the agricultural communities in this province? What hope do farmers have? This budget does nothing to give assistance to farmers. It does nothing to give any long-term projection to make farming a more viable and acceptable process in British Columbia. On the very day this budget came down we heard that a new bill is being introduced that will further shackle farmers. They're going to be liable to pay any debts not paid by subcontract harvesting work on farms.
We hear of a new strategy in the fishing industry. An aboriginal fish strategy is being promoted and developed by this government that will create a two-tiered system. Commercial fishing fleets, which have been the viable history of this nation and coastal British Columbia, are now threatened. This government is silently negotiating away an even playing field in the access to that resource. Aboriginal and non-aboriginal commercial fishermen are going to be subjected to new laws introduced by this government that will shackle the people in that industry and limit their ability to make money. When that occurs, the rural communities that are dependent on commercial fishing will suffer badly. There's nothing in this budget that looks after those communities on the North Island, the North Coast or in my
[ Page 9609 ]
riding of Powell River-Sunshine Coast, one of the largest coastal ridings. Who's looking after their interests?
Let's take a look at the resource-extractive industry in the forest sector. What's going on here is a massive tax grab off the new small business program. Looking at the estimates for upset stumpage and bonus stumpage compared to last year, those areas increase from $124 million to $201 million and from $66.7 million to $107.8 million. Where's that money coming from? I and others in the Alliance in this province have been arguing that this small business program needs to be reformed to allow small operators -- the truck loggers, the mill operators and those people involved in the value-added component industry -- to have a greater share of the fibre so they can keep the wealth in the communities in the interior and the north. There is nothing in this budget that even suggests that this government thinks about that. It's a tax grab -- more revenue to a centralized regime. That's a real shame.
What happened to the once-proud mining industry in this province? Where is any kind of movement here to streamline and make affordable the exploration costs for those who are seeking ore bodies? Once they have undertaken to do so and found a viable ore body, where is some guarantee that they will be given the licence to mine. There is nothing in this budget that looks toward projected revenue increases from that sector. There is nothing in this budget that suggests that we ought to have a viable mining industry in the province, yet we are hailing this -- if we listen to the members opposite -- as a budget we should all be very pleased about and proud of.
We are moving into a new paradigm that must recognize a limits-to-growth strategy in which we start to define our priorities, which must be to protect the rural communities and the investment in those communities that are dependent on resource-extractive industries. We must do so in a manner that is viable and consistent with the recognized limits to growth we have within our environment. We also have to recognize the second of the four I mentioned earlier, and that is how vulnerable we are because of the policies of past provincial and particularly federal governments with respect to what is taking place in the continental and global economies around us.
This province has not addressed the impact of the free trade agreement with Mexico, NAFTA, nor has it addressed the impact of the FTA that is now underway with the United States. When we look at what is happening federally in terms of the Canada Assistance Plan moneys -- and we heard from this Minister of Finance about where that money was going or not going, as the case may be -- we see that the new federal Liberal government is going to continue with the same policy of harmonization with the United States of Canadian social programs. The impact of that harmonization program is not only going to affect us as Canadians, in terms of those programs that we hold dear and which make us unique as a country, but it is going to impact on the overall cost to every British Columbian who now has to pick up that percentage of shortfall.
Where is any movement in this budget to address those concerns both fiscally, as is most important in this budget, and, more importantly, in terms of the language that would address the long-term social impact of ever-increasing costs as we start to harmonize our social systems as per the free trade agreement with the United States? We need a budget that addresses the social issues in this country by recognizing that we are going to restructure the model by which we govern ourselves, so that we can more effectively use the moneys that we are required by statutory obligation to put into health, education and social services. Yet there is nothing in this budget that gives us even a clue that the government is thinking along those lines. That's not only distressing, it's rather scary. I don't hear anybody telling the people of this province -- or, indeed, arguing on the national stage -- how vulnerable we are as a province and as a people because of the global and continental economy that is slowly starting to annex us and take us over.
Hon. Speaker, if I need to give you even one example of that, let me talk for a moment about the Georgia basin initiative. The Georgia basin initiative is being quietly advanced in this province with little fanfare and not much public discussion of any note. The Georgia basin initiative is supposedly going to set up some environmental parameters in which the people of Puget Sound and the areas around the lower Georgia Strait and the Georgia basin will start to function. I ask British Columbians to get a copy of that and to look carefully at what it is saying. The Cascadia concept, which is another agenda that is quietly being advanced in this province, is going to talk not only about an integrated economic, social and environmental plan, as the Georgia basin initiative will, but is going to make the water resources of the province subject to exportation if it's allowed to continue.
[3:00]
Where in this budget do we start to look at the opportunity for us to take inventory of our resources and to maximize the benefits of those resources for British Columbians? It does not appear; it didn't appear last year or the year before. And it's a shame. We cannot know how much we are losing from the bank account and what its cost is going to be if we don't periodically look at the balance in the account. Today we don't even know what the balance in the account is. At a billion dollars in debt, which is increasing annually, we are spending money and thinking that we can continue to do that year after year, and that British Columbians are somehow going to have the money to pay for it. Well, hon. Speaker, I can tell you that British Columbians will not. We can't afford it now.
The Cascadia and Georgia basin concepts are not well addressed here, and they need to be. They are going to have a huge financial cost impact on our communities in British Columbia unless we take stock of it. Let me just say this about water resources: in terms of the North Thompson diversion, we'd better hear from this government -- as we look at the overall resource aspect of this budget -- that the North Thompson diversion is not on, that there is going to be no major diversion of the British Columbia water systems and that we are not going to permit those diversions to occur. The time for us to build in those resource budgets is now.
Look what happened through inaction on the question of the Nechako: the most disgraceful display. A river is going to be totally decimated, because governments -- two of them, provincial and federal -- were asleep at the switch. When their own people reported the physical cost and impact of the diversion program there and the Alcan project, they suppressed those reports. They simply would not allow them to come to public light. And when those reports were reviewed, they then refuted the testimony of their own experts. Now we're faced with a situation where the most horrendous project is likely to proceed, with great damage to one of the major river systems in this province, the Fraser and the Nechako. That project has little to do with making aluminum; it has everything to do with the export of electrical power to the very people who will compete with British Columbia companies to maximize their profit.
Where in this budget are we looking at dealing with that issue and its cost impact on those people in industry and
[ Page 9610 ]
business, so we can give them equitable power rates? Let's look at the figures here and look at British Columbia Hydro: "Contributions from Government Enterprises" -- B.C. Hydro and Power Authority up by 19.8 percent. We've already heard about the amount of moneys paid off in pensions and what have you. Where are we going to get an equitable rate on cheap electrical power to encourage investment in secondary industry in this province, so we have an opportunity to succeed in our competition with our trading partners in the south and across Canada? This budget fails entirely to look at that natural resource sector and its contribution to the potential we have for investment in secondary industry.
Let me come to the third aspect, the question of government and taxation reform. We wanted to hear that this government was prepared to come forward and take issue with the cost of government. Yet, as I pointed out in the beginning of my speech, it has done nothing of the kind; it has simply played a shell game. It has not demonstrated the accrual within the deficit. It's trying to balance it off by balancing assets against the deficit -- something that was done very effectively by the Bennett regime, if you remember. Obviously that's where this government learned its skills -- watching Social Credit -- because they're using exactly the same kind of proposal.
If we look at that second aspect of taxation reform, what should this government have done? We wanted to hear that this government was going to downsize the cost and size of government and thereby come out with a realistic tax reform program. We wanted to hear that this government had recognized that British Columbians are taxed to the limit. We wanted to see that this government was going to take a meaningful look at reducing tax demand, not this fabricated tax freeze and then increased fees and services. For those of us dependent on the ferry service, hold your breath: April 1, here it comes. We didn't want a fabricated exercise; we wanted real tax reform, and it was lacking.
I have but two minutes left, and there is one other aspect that the budget is silent on. It has to do with the whole question of aboriginal land strategy. The Treaty Commission that is at work right now is going to be an enormous cost to British Columbians. In the Charlottetown accord, the people of this province defeated a proposition to move toward a third order of government; yet that is being advanced quickly by this government. If you look at government expenditure by department, the single greatest increase in any department is in Aboriginal Affairs -- 44.4 percent. This government must enter into a public debate, because we must not -- either through any budgetary or legislative status -- develop an order of government and a jurisdiction in this country where one's membership in it is dependent on one's membership in a racial classification or group.
We have to know that every British Columbian -- indeed, every Canadian -- is equal to every other, regardless of race, colour, creed, language or religion. Yet the agenda with respect to the Treaty Commission, settlement of land claims, alienation of lands and movement toward joint stewardship on resources is being advanced with great speed by this government -- without public debate and with limited, if any, consultation with municipal governments and third-party interests that have investment. That isn't shown in this budget at all, yet it has the single greatest cost impact of anything this government is doing. We are not talking about millions of dollars in the settlement of those claims; we're talking about billions of dollars. This government cannot and must not hide from it; it must come forward and make it clear. I look forward to hearing from the government on the points I have raised.
Hon. B. Barlee: Hon. Speaker, it's my pleasure to rise and defend the budget. It isn't a perfect budget -- I'll admit that -- but it's a good budget, and I think it's a fair budget. It's a good budget for most British Columbians, and it's fair for British Columbia. I listened to the Liberal member for Surrey-White Rock this morning. He's very entertaining and amusing, but is he accurate? I think not, and I'll elaborate on that. But before I do, let me explain one thing.
We've heard many conflicting statements from both sides of the floor that this is a poor budget and that this is a superb budget. Let me quote from sources who have very little to do with this budget. The Hon. Brian Tobin is a very powerful federal Liberal cabinet minister. When he was running in the federal election, Brian Tobin was quoted in the Vancouver Sun -- if you care to look at it some time. He said that this is the only province that can stand alone economically; it has the finest economic performance in Canada. That is from a very powerful Liberal federal member of the cabinet, and I think he's right -- not much doubt about it at all.
How is our economic performance? I think you have to examine the pros. None of us in this House are professionals. Who are the professionals? Some of us think we're professionals, but some of us aren't. The professionals watch our economic performance all the time, and who is probably the best set of professionals in Canada? If you look at page 66 of the budget, you will find that Moody's Investors Service set the rate. They have hundreds of millions of dollars at stake. They are extremely careful. So how does Moody's judge British Columbia? Here's how: we have by far the highest credit rating in Canada. It's Aa1. Who comes after that? They all slide down the scale after that. How have the Liberal provinces done? New Brunswick pays one and three-quarters times the interest that we do. That's a Liberal province. Quebec pays one and three-quarters times the amount that we do. P.E.I., another Liberal province, pays three and a half times as much. Nova Scotia, another Liberal province, pays three and a half times as much. Newfoundland pays seven times as much.
Let's look at something else. We've been talking generally about debt. Debt is kind of interesting. Again, let's look at the opposition Liberals. They have stated that we are in poor shape as far as the debt is concerned. How have they done provincially? Frankly, they haven't done very well. Newfoundland's tax-supported debt as a percentage of the GDP is 52 percent; ours is 19 percent. The other Liberal province that's doing very well is P.E.I., at 36 percent. The other Liberal province, Nova Scotia, is at 44 percent. New Brunswick is at 33 percent; Quebec is at 29 percent.
Interjections.
Hon. B. Barlee: Let's take a look at Ontario before they get too excited. I'll be quite candid. At 24 percent, Ontario is much below all the Liberal provinces -- it's on page 66 -- in tax-supported net debt regarding GDP.
Excuse me, hon. Speaker, the member for Nelson-Creston would like leave to make an introduction.
Leave granted.
C. Evans: Hon. Speaker, as you can see, there's a group of Royal Canadian Air Cadets in the gallery, Squadron 5615816, and their leader, Capt. Mark Mozel. They've come to Victoria to speak to me, to the Legislature and to any member who
[ Page 9611 ]
wishes to talk to them about Royal Roads Military College. These people are young Canadians, so I would like to ask members if, for the next ten minutes, we could be kind to one another and show them democracy at its best.
Deputy Speaker: The member for Surrey-Cloverdale rises on what point?
K. Jones: To extend greetings.
Leave granted.
K. Jones: As a former Air Cadet, and having gained my basis for entering this House through the training of the Air Cadet organizations of Canada, I would like to say: "Well done, guys. Keep up the good work!"
Deputy Speaker: I'm sure they will be pleased to have a chat with you later, hon. member.
The minister may proceed.
Hon. B. Barlee: We have a long-term strategy. Frankly, I think it's working. When I examined some of the statements of the Liberal member for Surrey-White Rock I found them rather confusing. He said something very close to this: "The grazing fees are increasing dramatically, and the cattlemen are in all sorts of difficulty." I thought that wasn't quite right, so I looked at the grazing fees. I just happened to have them in my desk. The grazing fees in British Columbia will be about $1.98 per animal unit month. So when you go to the Douglas Lake Cattle Co. -- they have thousands of cattle out there -- each one of those cattle is assessed $1.98 for grazing on provincial lands. How does that compare with other jurisdictions in North America? How are the cattlemen doing in British Columbia? I'll tell you how they are doing.
[3:15]
Let's look at some of the great western states in the United States. Let's look at Colorado -- real cattle country. They charge $10 per AUM; we charge $1.98. They charge five times as much. What about North Dakota? They charge $11.50 per AUM, five and a half times as much. What about Oklahoma? They charge $10.56, five times as much. In South Dakota they charge $9.51, four and a half times as much. In the state of Washington right next door, they charge $9.43. Gosh, that's almost five times as much too. I don't think our cattlemen have too much to worry about.
We heard remarks from the former leader of the Liberal Party and the member for Surrey-White Rock that the agricultural situation in British Columbia is devastating. Sectors in the agricultural industry are always having problems. Tree fruit growers in the Okanagan are having problems, but how have they done overall? I'll tell you. This is the latest from Statistics Canada, the federal Liberal government, so I would not question their veracity. When we came into power in 1991, the total agricultural industry in British Columbia made $240 million. By 1993 that had increased dramatically to $450 million.
J. Weisgerber: And you think it's got something to do with you?
Hon. B. Barlee: Oh, I think it has.
Let's take a look at what we've done in the last few years. I'm glad the hon. member asked that question. We concentrated in specific areas. Let's take a look at VQA wines. These are the Vintners' Quality Alliance wines out of the Okanagan and other parts of British Columbia. They are some of the best wines in the world; there's not much doubt about it. Our Pinot Blanc is some of the best in the world; our reds are superb. How have we done? When the former Social Credit Party started that program in 1989, we sold about 600,000 litres. In the last two years we have concentrated on restaurants and other outlets in the province, and now it's up to almost 1.5 million litres -- by far the most dramatic growth in wines in North America.
I was concerned about something else this morning. As he waxed eloquent, the member for Surrey-White Rock said that people can't afford to go and buy in British Columbia. Some people in British Columbia are having difficulty; I acknowledge that. But that is not a statement of fact. What really happened? I'll tell you. Retail sales in British Columbia increased by 7.8 percent. What does that mean? It means that British Columbians brought retail sales up from $24.5 billion to $26.5 billion, which is a $2 billion increase. That's about $500 per person for everybody in British Columbia. The average family of four had an extra $2,000 to spend in retail stores. That's not bad.
Let's take a look at a couple of other things. What is another gauge of business enterprise? There are two gauges: one is the bankruptcy rate. First of all, incorporated businesses in British Columbia grew by 14 percent last year, but the bankruptcy rate came down by 20 percent. That's rather interesting, because they are doing extremely well on average. I have a great deal of sympathy for some of the businessmen in British Columbia -- most of them. Business people have a problem, because they're on their own....
Interjection.
Hon. B. Barlee: Not at all. They're on their own. That's the first thing.
Secondly, they usually provide their own cash or they have to borrow it from some institution. Thirdly, they have no pension plan. They have no buy-out. They can't pick up UI because they're not eligible. So how have they done? They've done pretty well. I was looking at the statement made by the member for Surrey-White Rock again this morning. People are really having difficulty, so I said that's interesting. For instance, in the restaurant industry of British Columbia, there are about 12,000 restaurants and about 80,000 employees and proprietors.
Interjection.
Hon. B. Barlee: But I think some of you are slow learners, so we have to impress this upon you. It's called reinforcement, and I certainly think the Liberal members would be very interested in this, because it does apply to them most definitely.
Seven provincial governments out of ten in Canada put a PST, a provincial sales tax, on top of the GST. Who are those seven governments? In other words, when you go into a restaurant in British Columbia, you pay 7 percent. Let's look at the restaurants in the Liberal province of Quebec. What do you pay in Quebec? You pay 7 percent, and the Liberal government put another 8 percent on top of it, so you pay 15 percent on your meals in Quebec. Let's take a look at the Liberal province of Nova Scotia. There is 7 percent GST, plus another 9 percent. That's 16 percent -- far more than double British Columbia's. Then let's take a look at New Brunswick: it's 9 percent plus 7 percent, for a total of 16 percent. P.E.I. is 10 percent plus 7 percent, for a total of 17 percent.
Newfoundland is rather interesting. I like Newfoundland and I like Newfoundlanders, but you have to be very careful when you purchase a meal in Newfoundland because they
[ Page 9612 ]
charge 7 percent plus 12 percent -- a year and a half ago when they were looking at the cod situation -- for a total of 19.84 percent.
How does business really think we're doing? I just got some faxes in today. Here's an example, from the Rocky Mountain Visitors' Association of British Columbia. Mike Smith is the president, and he writes: "Dear Minister: Thank you for the most encouraging news I have received from the ministry for many years. I look upon this budget increase as a great moral boost for the industry as a whole in the province of British Columbia."
Let's take a look at the Cariboo Tourist Association. The president is Bill McQuarrie: "Congratulations on your great victory in getting the tremendous increase in the Tourism budget. Your hard work has delivered the goods on behalf of the Cariboo Tourist Association." Let's take a look at the British Columbia and Yukon Hotels Association: "Dear Minister: I am writing to thank you for all your efforts in securing the $5 million in additional funding for tourism awareness marketing in this year's budget."
This is to the Premier from the Council of Tourism Associations of British Columbia. Pat Corbett is the president: "We wanted to write you and say thank you for listening to our industry's cries for added funds for the Ministry of Tourism. You've given us the time, and you've listened, and we appreciate that...." And finally, from the B.C. Motels Campgrounds Resorts Association, president Mike Meade wrote: "Congratulations. Your efforts in having $5 million for the Tourism budget reinstated have paid off. We congratulate you and support your efforts on our industry's behalf."
When I look at the record, the record is -- and everyone will admit this; there has been grudging admittance of this -- that last year we had the best economic performance in Canada. We may indeed have had the best economic performance in North America, followed by Utah and Nevada. And in Utah there are some very sharp operators.
So how did our economy do compared with the giants of the economic world? It did very well; it grew far faster than the Canadian average. It grew significantly more than any of the countries in Europe and significantly faster than Japan or the United States, which is now leading us out of the recession. Capital investment, by the way, is up by over 8 percent. These are all good signs, and if you don't believe me, perhaps you should take a slow journey across Canada. The rest of Canada looks like an economic wasteland. We haven't solved all the problems, but we have a long-term strategy. The member admits that the rest of Canada does indeed look like an economic wasteland, and it certainly does.
Interjection.
Hon. B. Barlee: No, I think the long-term strategy is paying off. All you have to do is listen to the pros. We could have a cut-and-slash budget; we could have a budget like Ralph Klein had in Alberta, carrying a $3.4 billion deficit and cutting into health and education. I think there's a more logical way to do it; I think there's a more strategic way. Frankly, when you examine what Moody's has to say and what the pros have to say about the economic performance of British Columbia, they're satisfied, and I think that message will sink into the people of British Columbia. Hon. Speaker, it has been a pleasure defending the budget; I like it.
A. Warnke: Hon. Speaker, it's always nice to follow the most entertaining speech and perhaps the most entertaining member in the House. Despite the fact that he's made the same speech three times in a row, it's always entertaining.
Interjection.
A. Warnke: He's perhaps, as my colleague says, the most informed member on the government benches.
There are a couple of factors I want to focus on in response to the budget. The fact is that if he had listened to some of his own members, some of them had an interesting response to the budget, as well. The member for North Vancouver-Lonsdale seemed to have gotten mixed up about balance sheets and that sort of thing. He didn't quite get the terminology right.
An Hon. Member: He's an economist.
A. Warnke: I recognize that member's credentials; perhaps it's the company he keeps. Maybe the company he keeps has confused him in the last two years, and he can't really tell the difference between a balanced budget and what he calls a budget sheet. Anyway, on it goes for that member, but it is most entertaining.
There is a very serious side as well, as I take a look at this budget. The budget has an impact on some of the most vulnerable people in our society. I would say that people were not put first in this budget. Indeed, I suspect that in a few months some serious questions will be asked by the seniors of this province, who will ask what happened to that guarantee of access to reasonable prices for medicine, Pharmacare and so on.
Contrary to the expectations of the Minister of Agriculture, I suspect that farmers and growers will also be asking some very serious questions about this budget.
An Hon. Member: Farming didn't even make it into the throne speech.
A. Warnke: That's right.
Students will be asking some very serious questions, and people placed in unemployment will be asking some very serious questions. Indeed, the aspirations outlined by the Minister of Finance for what we're going to do to put our financial house in order.... Well, hon. Speaker, I say that the financial house is not in order. It's interesting that the argument put forward by the Minister of Finance is that the deficit has declined. Has it declined to the point where it has been eliminated altogether? No.
It's interesting that the focus has been on the deficit. I would suggest that they need an economic lesson here, because when you talk about the deficit, you have to talk about the debt. There is a way of shifting numbers around and playing with money -- administering it over in B.C. 21 or doing some other finagling over there -- but in the last analysis you have to look at the bottom line. The bottom line, very clearly, is this: the debt has increased. This government has embarked on a direction where expenditures exceed revenues. Many governments around the world -- state, provincial and federal -- have gone through a very traumatic experience in the last 20 years, and they know you cannot embark on that kind of strategy.
[3:30]
The decisions to be made as a result are tough. But the Minister of Finance and some other members on the government side make a bogus argument about what the trade-off is going to be by asking if you're going to get rid of schools, hospitals and child care facilities. The members are putting forth that argument, and it's a funny, bogus
[ Page 9613 ]
argument. They're suggesting somehow that that's the choice: increase your debt, or attack the deficit by giving up schools, hospitals and child care facilities -- all without touching some very serious problems in government spending, like benefits, salaries and patronage. Somehow a lot of the problems that we've been pointing out are protected. Those benefits to friends and insiders have to be protected, and if we are going to give up something in order to address the problem of the deficit, we're going to cut spending on schools, education, health care and so on. What a strategy, what a choice has been articulated by members on the other side!
I am surprised by one member who suggested that the Liberals want to do away with the infrastructure program. In fact, Liberal parties at provincial and federal levels have put addressing infrastructure programs at the core of any campaign they have put forward. We've always put that at the centre. We have also always suggested that we have to place an emphasis on health care and education and on addressing some central problems in our social services.
Let's go back to the basics. When we take a look at the provincial budget -- this is true of almost every provincial budget and certainly of this one -- just under 75 percent of the government's expenditures are allocated to health, education and social services. If a provincial government really wants to get on top of some of the economic and financial problems, it is extremely important that it get a handle on these three areas, minimally, but especially these three areas. I'm really surprised that the government has not addressed some fundamental problems in those three areas. They're saying: "You have to give up cutting in schools." I know from experience in dealing with the provincial government what kind of administrative mess-up there is in the schools.
Interjection.
A. Warnke: I'm afraid that's the case. I can point to a case in Steveston where there is one school that has been promised some money, then had it withdrawn. Later on, it was promised some more money, then it was withdrawn. Promised some more money.... This actually happened three times.
L. Fox: It's not an NDP riding.
A. Warnke: Maybe the hon. member has just pointed it out: it's not an NDP riding. There is a pattern as to who receives nice benefits from the government. It's not surprising that you have a nice fancy highway running up the mid-Island. I have no problem with that.
L. Fox: That's Reform territory.
A. Warnke: The mid-Island highway is essential. It also happens to be a place where there are NDP members. Perhaps the hon. member is right that they're somewhat threatened in the future, so to reinforce the NDP members in those ridings we finally have to do something, despite the fact that pressure has been on for several years to do something about the mid-Island highway.
The financial house is not in order. Waste is not out, and duplication is not reduced. We see evidence of that especially throughout these three ministries and the Ministry of Social Services. Members opposite have to be reminded of this. In the past, the opposition has pointed out that there has been duplication and waste in the Ministry of Social Services. We've tried to point out that it's about time we did something about these deadbeat dads. It's about time to do something about the efficient running of the maintenance enforcement program. We've noticed that there have been some very serious problems here. If the ministry would examine this area, it would perhaps go a long way to returning some moneys back to the government.
If you have duplication, by all means try to reduce it or shift to bring about a more efficient delivery of services. But I am a little concerned with the message that was sent out by cancelling the Round Table on the Environment and the Economy, especially at this particular time as a conference is meeting in Vancouver on the environment. The Round Table was dismissed and replaced with nothing. There are some very good reasons for dealing with duplication -- if the Round Table was seen as a duplication or as elaborate. But by replacing it with nothing a signal has been sent out. I can say this with some authority, because Tuesday night I talked to some people who were there for the conference. I won't say who. Essentially....
Interjection.
A. Warnke: I might have to reveal some of my Liberal friends on the federal side.
L. Fox: More evidence that you're all the same.
A. Warnke: I see I'm really stimulating the hon. member for Prince George-Omineca, and I'm glad he's here to hear this.
There is something symbolic here. By cancelling the Round Table, it appears that the government is engaged in vindictiveness -- by cancelling it, everyone concerned with the environment is going to get the message. It's sending the wrong message. By all means, criticize Greenpeace. Maybe the provincial government members here and some of the government members on the federal front are in agreement about the role of Greenpeace. Maybe there's a new alliance there; I don't know. I'm not aware of it, hon. member, but who knows? A lot of things are oblivious to me.
L. Fox: I've noticed.
A. Warnke: And the hon. member has noticed.
But it does send a signal of vindictiveness that if Greenpeace is engaged in these kinds of activities, we're going to blanket everybody who is involved. I know something about this, and I would say with some authority that those members engaged in the Round Table on the Environment and the Economy have made some very solid contributions over the years. They have addressed some fundamental issues with regard to the environment that we cannot ignore. So I'm a little bit surprised at that. If this government moves in a direction to do something about sending a signal that we are clearly interested in the environment, that is fine and fair enough; it would have our support. But I did not see anything in this budget that would give encouragement to people who are concerned about the environment and its relationship to the economy.
I have noticed that many members who are advocating this budget look at dividing the world between their own government and the world of Ralph Klein. Many members have made mention of this. This province is certainly not divided along those lines. I am not sure why the members are so obsessed with the government of Ralph Klein, because his government is in Alberta. They should be concerned
[ Page 9614 ]
about the province of Alberta in another respect. When you look at the key economic indicators of income tax, sales tax, and various taxes such as the fuel tax -- just go down the line -- Alberta is highly competitive with this province. We have to be very careful about how we embark on a tax strategy in this province, because our competitors.... I'm not talking about the province of Quebec or Nova Scotia and Prince Edward Island or Newfoundland. We're not competing with the eastern provinces. Our competition is right next door to us in the province of Alberta. We are competitive with Saskatchewan. I wonder why. Could it be that Saskatchewan is guided by an NDP government? And to a certain extent, we're competing with the province of Ontario, and we're doing pretty good at it. I wonder why. I think it may have something to do with the Ontario government being NDP.
We are in a competitive situation with regard to Alberta, Washington State and Oregon. Here is where we have a fundamental problem, because we are not competitive with our immediate neighbours. The people who defend this budget find themselves in this quagmire of deficit spending. It's there, and it is adding to the debt. In the last analysis, the debt is the most outstanding problem that a government faces. Any government that fails to recognize that has failed to recognize the problems that governments have found themselves in in the past two decades.
We know, for example, that the rate of net domestic savings is down in this province. I've argued in response to the last two budgets that when you recognize that savings means investment which leads to economic growth, and when you start with that as your basic principle of an economic strategy, then a government must embark on a financial strategy that encourages net domestic savings. It has been difficult in all countries, especially in the western democracies -- and in Canada, as well.
When we look at the history of net domestic savings as a percentage of the gross national product, we know that there have been three shocks to the Canadian economic system. The first one is the obvious one in 1973-75, as a result of the first OPEC crisis and the quadrupling of the price of oil in the world market. The second one was in 1981-82 with the doubling of the price of oil in the world market. Those were two shocks to the economic system. There was a third shock, which was actually far more profound in this area than the first two OPEC crises. That was between 1989 and 1992, during the last Mulroney years. That had a tremendous and traumatic impact on savings. As a result, that impacted on investment and economic growth. The best strategy that any government can embark on is a strategy that encourages net domestic savings.
[3:45]
But what has happened? This government introduces very minimal concessions in the private sector, which would stimulate savings, investment and economic growth. On the other hand, Ken Georgetti gets up and says: "The corporations' challenge now is to start creating these jobs, and if they don't do it in the next eight to 12 months, this federation" -- that is, the B.C. Federation of Labour -- "and the B.C. population will be screaming. There appears to be a wage freeze on the public sector and tax breaks for the private sector."
Well, hon. Speaker, that is a threat and a challenge to the private sector which we ought not to put up with. We know darned well what Ken Georgetti is doing. He is saying that the corporate sector has a great big tax break, when the reality expressed in this budget is quite the contrary.
How do you develop confidence in the economy with that kind of threat to the corporate sector in that kind of language? It is not enough just to say that investment comes from additional savings, and we'll just help it along. Investment comes from additional savings plus the confidence in the economy. How do you promote confidence in the economy? Essentially, the government must encourage that confidence. Because the NDP government is so closely aligned with organized labour, it has a responsibility. It also has an opportunity to work with organized labour and say to organized labour: "Okay, guys, get onside." But what does it do? It makes minimal concessions to the private sector, does not really encourage savings and growth, and in turn, even encourages people like Ken Georgetti to threaten the corporate sector. How do we then expect to encourage savings and investment for future economic growth?
There are a whole number of ways in which a government can embark on a strategy to get the B.C. economy back on track. It is not enough to say that we're the best, compared to the other provincial jurisdictions. You can compare other provincial jurisdictions; you can compare other states and other economies; but also compare yourself to the previous historical record. With the exception of the last two years of that Social Credit government -- and I'm sure the hon. member for Prince George-Omineca despises that Social Credit government now....
L. Fox: No, I don't.
A. Warnke: It's interesting that the alliance between Social Credit and Reform remains intact. We shall keep that uppermost in our minds.
With the exception, especially of the last two years.... I would agree with government members and the Minister of Finance that those were two despicable years, because that government went heavily into deficit spending and got us into the mess in the first place. Aside from that, the record of this government has not necessarily improved upon what we have seen during the course of the 1980s, and that's something to seriously consider. It would be prudent for this government to go back and examine some of the premises as it is developing a financial strategy.
So for the third consecutive year.... I must admit that on two previous occasions I've said it more vociferously; I'm very calm and trying to be very reasonable this year. I want to once again plead with the government to readdress this whole question of encouraging domestic saving, especially private saving. When I took a look at the budget document and looked at the content of the Minister of Finance's speech, I found no reference to savings and how we encourage savings. I think that's where the fundamental problem is.
This document, presented to us by the Minister of Finance, starts off with an emphasis that we have reduced the deficit -- and it's by "our" definition of a deficit, which is questionable. But the claim has been made that the deficit has declined and that the federal government is off-loading onto the provincial government. And I was surprised that the member for North Vancouver-Lonsdale said that this started with the Trudeau era. I'm sure Mr. Trudeau can defend himself, but I would like to remind all hon. members that when it came to providing money for post-secondary education, the federal government did provide it and the provincial government at the time did nothing with it. Off-loading? On the contrary, it took the responsibility. I wouldn't say that about succeeding federal administrations. But it's always wise to review their history once in a while.
The fact is, neither is it prudent for a provincial government to simply blame federal off-loading -- especially since it's not all that clear to me that the present federal government is necessarily off-loading. I suggest it's
[ Page 9615 ]
prudent for a provincial government to take some responsibility themselves. And, I would say, do not divide the world into this mythical polarization so that somehow Ralph Klein is leading the charge against the other side, the good guys supposedly being the present provincial government -- especially with that advice coming from someone who says, "Well, no one over there knows the difference between a profit-and-loss sheet and a balance statement," when it's in fact the other way around. So it goes.
I would also like to defend some of the comments that my colleague the member for Surrey-White Rock made. I think it would be prudent to re-examine his statements. The member comes very close to identifying some very serious problems when we look at the forest sector, the mining sector and, indeed, the agriculture sector -- the cattlemen the hon. minister referred to. It's interesting that the member for Surrey-White Rock warned the government this morning that there are problems with regard to the cattlemen's industry. The minister said, "Actually, everything is fine," and went around with comparative rates and so on. If that argument is so strong, why then is the cattle industry in some trouble in British Columbia? It would be very prudent for the minister to re-examine that kind of question, because I think the member for Surrey-White Rock is dead-on as to identifying some of the problems.
Then the mining minister made some reference to mining being back on track. In fact, the member for North Vancouver-Seymour time and time again for the last two years in this House has warned that government that the mining industry is heading down. You know what, hon. Speaker? Two years ago the minister said that everything was fine.
On that basis and with some of the ideas that have been presented by the government, I think it's worthwhile that they re-examine their premises. If they do not, surely a year from now we'll be facing a very serious crisis in the economy of British Columbia. On that basis, I believe this government must re-examine where it's headed in this budget and be very serious that -- no matter what numbers have been put out in the budget -- it would be worthwhile to suggest that maybe we'd better have another look and warn the various ministries to be more prudent in terms of how government expenditures are to be conducted in this province. I do believe that the government must re-examine its premises. For that reason, as it's presently constituted, I intend to oppose this budget.
[The Speaker in the chair.]
L. Fox: I'm pleased to be able to rise today and speak on the budget. I'm extremely concerned, though, when I listen to how the government members are painting this myth that somehow this government has its fiscal house in order. In fact, this is a smoke-and-mirrors budget. The NDP backbenchers are blowing the smoke, and the rest of us are looking in the mirror to see whether or not we are really in British Columbia and whether the realities have changed. The average British Columbian totally disagrees with what the government is saying with respect to the finances of this province.
I listened to many of the themes that the government backbenchers came up with: the deficit is down and jobs are up; retail sales are up and bankruptcies have fallen; and we don't want to take the radical approach that the Alberta government has taken. I'll go over those briefly to try to point out the real facts with respect to those issues.
I looked at the deficits for 1991-92 and 1992-93 in the brochure that was handed out with the budget, and it's with great amazement that I hear many government members saying that the debt per capita is among the lowest in Canada and that the financial situation in British Columbia is among the best in Canada. At the same time they condemn the previous administration because of the poor job that they did. Who set the climate for the growth that we're presently seeing in this province? It certainly wasn't the NDP government. It hasn't been because of any of the policies that we've seen come forward with respect to the financial situation in this province.
[4:00]
When we look at this year's budget, we see a one-time payment of $300 million that came from a reserve of $600 million that was there when this government took over, called the privatization reserve. This government quickly changed the name of that to the Endowment Fund, knowing full well that closer to an election it was going to pay down some of the deficit and debt with that reserve and make it appear as though that was a sound fiscal decision made by this government. There isn't one sound fiscal decision in this whole budget. That lump sum could have been used to pay down the $2.4 billion deficit in 1992 that this government helped to create prior to the budget coming down in 1992. We must not forget that this government was in power for five months during the 1991-92 fiscal year, and during that five months it gave more money out the back door to political hacks and appointees than we have seen in the history of this Legislature over the last one hundred and some years. That's the reality.
Interjection.
L. Fox: We're not talking about what party we're in; we're talking about the need to grab hold of the reins and deal with the fiscal reality in this province today. The fiscal reality is that we are going deeper and deeper into debt, and each year our debt servicing, to pay the interest, increases dramatically, lessening the opportunity of the government to react to the day-to-day needs of British Columbians. That's the reality.
I've heard members on the government side talk constantly like this: "All the opposition members want to do is slash and cut services." I've got some news for those members. The lack of action is in fact costing services to British Columbians. All you have to do is look around your ridings, hon. members.
An Hon. Member: Look at the roads.
L. Fox: Look at the roads; look at the hospitals; look at the schools. We have lost nurses and hospital beds, and we have higher student-teacher ratios -- all in the last two and a half years. In my riding alone, the Prince George Regional Hospital has lost 90 beds. We have lost somewhere in the vicinity of 50 jobs within that hospital. At the same time, we have longer waiting lists, and we have to close the operating room ten days a year to make up for what the health care accord costs that hospital. That has increased the waiting list for acute care in that hospital to the point that emergency services are not even being offered ten days a year, because they do not have the capability of staffing those operating rooms. That's the reality.
The budget continues to go up for health care, but where is it going? It isn't going to those who need it. It isn't going to the patients in the hospital, and it certainly isn't going into community programs, because none of those patients who
[ Page 9616 ]
leave the hospitals -- sometimes they are kicked out before they should be -- have a service to go to within those communities. Those services are not available.
Where is that money going? I'll tell you where it's going. It's going to bigger government; it's going to more bureaucracy right here in Victoria. This government has created a bureaucracy far beyond anything we've ever seen before. Since this government has taken over, we have in the vicinity of close to 4,000 new government bureaucrats. They're certainly not delivering programs to the constituents whom we are sent here to represent. They're feathering their own nests, and this government's nests, towards trying to get re-elected. I want to tell you that the people of British Columbia are not going to accept that.
A minister stood up earlier and started making some quotes. He had five letters which congratulated the minister for returning money that was cut out of the Ministry of Tourism last year -- the same dollars. In the meantime we've lost a year in the economy of British Columbia, and it took that long for this minister to figure it out.
We've had the Finance minister stand up in this House and brag to us and to British Columbians that they've returned the tax credit on trade-ins of automobiles. Who took it away? It was that government a year ago, and a very arrogant Finance minister who wouldn't listen to members of the opposition when they told him that he was going to lose revenue through that tax. A year later, they finally admit that we were right and they were wrong. It's too bad that the Finance minister wasn't able to stand up and admit more faults, because there are many of them. There are many of them that would have improved the economic picture of British Columbia.
The fact that retail sales are up is truly encouraging, but many factors out there created that, not the least of which was the dollar dropping relative to the U.S. dollar. All you have to do is look at the borders now to see how many of those dollars are being spent in British Columbia versus Washington. That was not through an action of this government. Through its tax-and-spend policies, this government did everything under its power to encourage British Columbians to locate in Washington. The differential relative to the U.S. dollar has created a lot of those dollars that are now being spent in British Columbia. That is certainly not something this government can take any credit for.
The minister said bankruptcies have fallen. I'm pleased to hear that. Being a small business person myself, I understand the important role the small business community plays in the economic well-being of B.C. But this government can't take credit for the low interest rates. That's a major reason why small business has been able to survive the heavy taxation this government has put in place. It has enjoyed a lower bank interest rate. That's the main reason this government is so fortunate and is able to build up the debt. It wouldn't be so fortunate if that interest rate were to increase. They're very fortunate that the interest rates are low and that the credit rating is significantly reasonable. But it's not because of the actions of this government. That credit rating was left to this government by the previous administration.
There are some good points in this budget. One is the privatization of the government air services. I commend the government for putting that in place. I look forward to seeing them utilize some of the dollars saved there by putting more paramedics into the regions so that we can deliver good ambulance service to the rural parts of the province. A year ago in this House, I pointed out to the former Health and Government Services ministers the need for more paramedics in the Prince George region. With this move I hope we'll see some of those dollars go into that service, which will allow the private aircraft companies to be more efficient and better equipped.
Earlier I heard the Liberal opposition member say that the government shouldn't have eliminated the Round Table on the Environment and the Economy. I disagree with that member. The Round Table on the Environment and the Economy was a well-intentioned structure. The problem was that it was hijacked, primarily by the environmentalists. While the intent was to come to a compromise on what was in the best interests of the province on land use decisions, it was clear during the time that I sat on the Round Table on the Environment and the Economy that the environmentalists had one goal in mind: that was to stop logging in British Columbia. So I commend the government, even though there has been a lot of effort placed on that round table by many individuals over the course of the last five to six years. It's unfortunate that it wasn't able to achieve its objective.
I believe one other thing should have happened when that action was taken. The government should also have scrapped the CORE process. It is well-intentioned, but it is another process that has been hijacked by the environmentalists. It's time that the province set aside a land base from which we can extract resources. That land base should be based on the economic well-being of a geographical area. It may be two or three communities; it may be a single community. Obviously we should have legislation from the province which decides how and when those resources should be extracted. But in terms of land use, it should be enhanced by community resource-use planning groups, so that the values of the respective communities are reflected within the context of the provincial legislation.
I'd like to make one other comment, and it's a positive one, with respect to the property transfer tax for first-time buyers. I have never personally supported that tax. I have always felt that we should be able to....
L. Boone: Who brought it in?
L. Fox: Whoever brought it in, I wasn't here at the time. I have never supported that tax and I always believed that we should allow first-time buyers the privilege of buying their home.
Let me tell you what this government has done. There are numerous people in the rural parts of the province, and some in the southern parts, who have acquired leased recreational land. Some of the these individuals have owned the improvements on that land since 1984; some owned them earlier. But even though those improvements were paid for by the individuals long before they made the decision to buy those pieces of leased property from the government, this government is forcing them to pay this tax based on the cost of the improvement as well as on the property.
J. Weisgerber: It's unfair.
L. Fox: It's totally unfair. In many cases these individuals have built those improvements themselves, and now they're being forced to pay a tax on the value. How can we have a government that talks out of not just two, but three, sides of its mouth?
I've got to laugh, because it's humorous that this government has talked about a tax freeze for three years. Some of the actions they have taken within this budget point out that we're beyond the point where we can levy a tax and increase the income. In the course of the last two years under
[ Page 9617 ]
this government, we have driven more and more of the economy underground, because we have taxed virtually everything that there is to be taxed -- if not once, at least twice. We not only tax on labour to repair automobiles and appliances, which has driven that economy underground.... I wouldn't be surprised if many members have tried to hire a contractor or service individual to repair something or work on their home, as I have, and had that individual ask whether or not they need a receipt. That's one of the first questions that's asked today. If you don't need a receipt, obviously you get it that much cheaper, because you won't have to pay the tax. I'm sure that all the hon. members in this House, including myself, would refuse that opportunity. However, that is a fact of life that is very prevalent today. If you don't admit it, you're sitting there with your eyes closed, because that happens almost daily.
This budget contains many new taxes. They may be indirect, but they're there. Everybody in the north knows they are there. We're looking at increases to MSP premiums, Pharmacare, hydro and ICBC. There's an untold amount of fees out there that are going to be increased. Yet every one of those government members, when they stood in this House in opposition during the previous government and argued strongly against those increases, said that a fee is nothing more than a tax. Today, all of a sudden, there's a revelation. Now it's a fee for service, but prior to this it was a tax.
[4:15]
This budget is going to have dramatic impacts all across the province of British Columbia. For the record, I want to point out that I talked earlier about how it was going to impact health care and how this government has impacted health care negatively over the last two and a half years. Presently Prince George Regional Hospital is not funded at a high enough level to offer the services of a regional hospital. They don't have enough OR time to satisfy the needs of many of the doctors. So we presently have seven doctors looking at relocating: one obstetrician, three orthodontic surgeons, one neurosurgeon, one general surgeon and one plastic surgeon. For years I worked as a municipal politician to encourage these kinds of professionals into northern British Columbia. It has not been easy. The municipalities and local hospital boards have worked extremely hard to get these high-calibre individuals into their communities.
J. Weisgerber: Then there's Kitimat.
L. Fox: Yes, that's another story, and we will talk about that in a moment.
Because of the actions of this government, we're going to lose those services. We're going to lose those individuals not just to the northern part of the province but to other provinces, parts of the U.S.A. and so on. It's really unfortunate.
How important is the funding of health care? We found out how important it was and how much money was available when in the not too distant past the member for North Coast was looking for a particular service to be placed in Prince Rupert, at the expense of Kitimat and Terrace. The member for Skeena stood up and tried to fight that, quietly at first, and then, as I understand it, he became a little more vocal. But there was a shortage of funds, and they believed that they could help out the member for North Coast by moving this service from Kitimat to Prince Rupert. All of a sudden we found another $700,000 in order to satisfy the needs of the North Coast member and keep the member for Skeena happy. It was a political decision. We have that kind of money to fund a political decision about health care, yet we cannot and will not fund a program in other parts of the province because we say we don't have the dollars.
This government missed an opportunity to get out of the tax-and-spend mode they've been in. The province of British Columbia was looking for a government that had the courage to downsize government, not necessarily to do the same thing that we're seeing in Alberta.
Interjections.
L. Fox: I hear members talking about and condemning the actions in Alberta. Well, I live in British Columbia. I'm not an Albertan, and I don't know what is in the best interests of Albertans. I assume that Mr. Klein and his government do, and I will leave that determination up to them. What has to happen in British Columbia is what concerns me, not what's happening in Alberta.
This government lost the opportunity to show its intention to get the fiscal house in order by bringing forward a smaller government, downsizing government and getting it out of the face of British Columbians, so that British Columbians can get on with creating jobs and earning the kind of living that they want to earn. But it failed to meet that objective. This government proved that through this budget and the clouding and smoke it's created around the issue of decreasing the deficit. There is no doubt about it: the real deficit of this budget in this year is $2.2 billion. It's not the $900 million that this Finance minister said it was. In fact, over the course of the next year you're going to find that this issue is going to be around and around and around, and further proof will come out to substantiate those points.
Government members have stood up and read comments from individuals stating how much certain industries or certain individuals respected the province for making a move towards a balanced budget. But I want to tell you that I have as many, if not more, which are making statements like the one that came out of the Vancouver Sun about the two nagging concerns. The first is that B.C.'s ability to service the debt is deteriorating. There is a real, true statement -- an honest statement.
Compounding this concern is the fact that B.C. cannot easily improve this ratio by increasing taxes. Its top income tax rate and dividend tax rate, for example, are already higher than Ontario's and Alberta's. We have the highest income tax rate in Canada. Why? Here we are among those with the highest unemployment rate, we've got the highest welfare rate in terms of single employable males on welfare, and we've got one out of ten on UI. Why aren't we looking at this and saying we've got a problem here? How are we going to encourage these people to get out into the workforce? The fact of the matter is that we are so highly taxed that in order for these people to enter those entry-level jobs, they actually lose income. Welfare creates a higher income for these people going into these entry-level jobs. That's one of the problems. What causes that? It's the high taxes that we have to pay as individuals. Why aren't we addressing that? We aren't even addressing it in a way that people can be encouraged to get off those welfare and UIC rolls and take those entry-level jobs. That is the number one challenge for this government.
It's with great regret that I'm going to have to vote against this budget, because it does not identify the real problems in British Columbia. It does not have a plan on how we're going to encourage employment. It does not have a plan on how we're going to meet the debt. In fact, it tends to hide that. It tends to hide the deficit. It's with great disappointment that I stand and speak about this budget. I would have liked to
[ Page 9618 ]
have been able to stand and support the budget, if it had been a true budget that recognized needs and accurately accounted for them. That's the key -- accurately accounting for those needs.
An Hon. Member: Honest bookkeeping.
L. Fox: Honest bookkeeping. When it was in opposition this government talked about the BS account. I agreed with them then, and they should have enough courage to agree with me now: if that was a BS account, this is a BS budget. This is a total b.s. budget.
J. Dalton: I will reinforce the concluding comments of the previous speaker. Obviously the opposition is unhappy with this budget, to say the least. Let me predicate my remarks by asking a question: what is this government up to? What's behind the so-called good-news budget that the Minister of Finance presented to us on Tuesday? I might even go back earlier than that. You can all remember the rather sterile, bland performance of the Premier on CBC a week or so ago. Why was he on television, at the expense of the taxpayers of this province, giving us a tip-off in his prebudget announcement of the so-called good news that we were to expect on Tuesday? I suggest that we did not see any good news, either from the Premier in his television performance or from the Minister of Finance in her presentation to this House on Tuesday. The minister and the Premier would have us believe that everything is on the right track, and therefore we are to spread the so-called good news. But is that so? I submit that it is not. The Minister of Tourism was very pleased to speak in favour of the budget in his remarks earlier this afternoon, but he did make the reference that "it isn't a perfect budget." This budget is certainly anything but perfect.
I might pass on a little anecdotal incident to the Minister of Tourism. He's so pleased that $5 million has been added to his budget. There was an interesting item on the news this morning. The municipality of Coquitlam has put out some tourism brochures -- at our expense; it's out of the B.C. budget -- advertising the excellent skiing that one can find in Coquitlam and including Belcarra Park, of all things. Somebody from the Tourism department described that as a topographical error -- or a typographical error; take your pick. Obviously the topography doesn't allow skiing in Belcarra Park, and if it's a typographical error, I have to wonder who's in charge of that ministry.
What is this government up to? The debt is up, as we know. In the figures for March 31, 1994, we are $27.4 billion in debt. When the NDP took over, the debt was $20 billion. We seem to be going in the wrong direction. I would have thought that, if it had paid any attention to the recent federal election results and to the mood of the public in the province and in the country, this government would be reducing the debt, not increasing it. That debt is up $2 billion from last year. We're headed in the wrong direction. We shouldn't be going up in debt; we should be going down. Spending is up $19.6 billion in this '94-95 budget. Government spending must be brought under control, and there's no evidence of control being exercised in this current budget.
What else is up? Fees are up. By the way, hon. members, you'll remember that these are the things the Premier described as user fees, and we're not to worry about them because they're not taxes. Let's talk about some of these fees that are imposing a hardship on British Columbians. It's going to cost you more to get married. It's going to cost you more to be born -- that is, to register your birth. Perhaps the Health critic could advise me as to whether the cost of birth itself will go up as well. It's going to cost you more to die from the point of view of registering a death. Isn't that ironic? They get you coming into this world, and they get you when you leave. And they sure get us everywhere in between. It's going to cost more to transfer a vehicle.
[4:30]
It's going to cost more to feed a cow. The Minister of Tourism also talked about grazing fees and compared them to the rest of the planet and anywhere else that you care to think of and said that we're well off. Well, I happen to know personally that we are not well off when it comes to feeding cows. I was in Williams Lake last weekend visiting my rancher in-laws, who are struggling to exist in the Chilcotin where they've been for 42 years. I can assure you, and I know as a fact, that the ranching community is anything but happy with this budget. I am shocked that the Minister of Tourism -- who used to be in agriculture, and certainly, from the area of the province he comes from and should know something about the cost of feeding a cow and obviously doesn't.... I think that's shameful.
An Hon. Member: Is that the same one who didn't know the difference between a lettuce and a cabbage?
J. Dalton: That's correct. It's the same minister who knew nothing about cabbages, kings and lettuces, and he certainly knows nothing about cows.
Licence fees are up. Again, these are just user fees so we shouldn't worry about them. It's going to cost you more to hunt and fish. Water licences are up. Again, that directly impacts on people in the agriculture community: farmers, ranchers, growers -- the people this government pretends to represent. I should also remind this House that in the minister's presentation on Tuesday there was not one word about agriculture. Obviously it's a low priority -- or perhaps I should say a no priority -- with this government.
Basic services are up. How many of you have enjoyed the experience recently of opening up your hydro bill? Were you shocked? I certainly was: 20 to 25 percent on average for residential bills. Well, again, that's just a user fee, so we needn't worry. Unfortunately, each and every one of us is using that basic service.
What else is up? Or what is this government up to? Our public sector wages are up....
N. Lortie: Jobs are up.
An Hon. Member: Unemployment is up.
J. Dalton: I'll get to jobs a little later, because I know there was a reference in the minister's comments on Tuesday about 76,000 jobs. She didn't tell us what jobs. She gave us no game plan as to where these jobs are coming from or where they're going to lead us. I'll come to that later.
What about the public sector and its wages? According to the Finance minister -- and I have her budget speech with me here; this is on page 69 of that document, BC Budget 94: "There will be no money for public sector wage increases." Well, that sounds like good news. This, of course, is the item that caused a bit of stir, because she did not state that in the House. However, some of her union friends spotted it -- or the absence of it. Ken Georgetti commented that the government has indicated wage freezes, and he's concerned about the impact and the interference in the collective bargaining process. I guess that demonstrates that this government can't even keep its own friends and union
[ Page 9619 ]
people happy and that they are unsettled by the inferences in this budget. That simply creates an air of uncertainty.
Another example where there's a great deal of uncertainty is in the field of education. Again to quote from the minister's remarks on Tuesday, "no new funds for salary" increases in the K-to-12 sector. But the minister fails to take into account that there are already negotiated salaries in place that must be honoured. For example, in my own school district of North Vancouver they have a three-year contract in place. Automatic salary increases are incorporated into that agreement. Is the Minister of Finance suggesting that the teachers of North Vancouver cannot expect to have that negotiated increase honoured? If so, I would like the minister -- and also the Minister of Education, who I see in the House -- to stand up and say so. I would think that the teachers in my district and the rest of this province would like to hear that message.
The Minister of Finance also fails to recognize, with regard to education, that government settlements were imposed in the K-to-12 sector. The school district of Victoria is a prime example. What mixed messages are we getting? Freeze wages -- or at least suggest that -- but, by the way, as in the case of Victoria, here's a forced settlement. You'll remember, hon. members, that Victoria threatened to go on strike earlier this year. The Minister of Education and the Minister of Finance stepped in, invoking Bill 31, and said: "No, we are imposing a negotiated settlement." There's an irony. There's a wage freeze in the public sector involving education, but, by the way, we're also telling the Victoria school district: "You must go back to work, and here is the imposed salary increase." That's a very mixed message. This is the message from this government: we're imposing freezes, but live with existing contracts, and good luck. A government must lead; a government must be in charge. This government leads by example -- by confusion, by mixed messages and by telling people in the public sector one thing and then obviously indicating another through the funding implications of the budget.
Also dealing with education, the government has announced there will be a cap on administrative salaries, again in the K-to-12 sector. Our locally elected and supposedly autonomous school boards are hamstrung. They are hamstrung because, on the one hand, Victoria is saying to them, "Put a lid on administrative salaries," and on the other hand, they are saying: "Do the job that you were duly elected to do." I would point out that the Education minister, to add insult to injury, has offered to send help from Victoria to the districts that may require financial management advice. I wonder: why did the Employment and Investment minister refer to toads in this House the other day? It seems to me that there is some parallel, or perhaps that minister was referring to toadies -- I'm not sure.
However, back to my theme. What's up in this budget? What's up with this government? Other things that the minister told us on Tuesday are that expectations are up -- I would suggest false expectations -- and that initiatives are up. I noted that the Minister of Finance used the word "initiative" at least three times on Tuesday. I don't know what she means. She talked of "new initiatives" and "new therapeutic initiatives." She talked of a "new skills and training initiative." One thing she didn't talk about is a game plan, something to give substance to these so-called initiatives. I did not see them or hear them. I've pored over the estimates documents, and they are certainly not there. So it remains to be seen about these so-called initiatives.
[H. Giesbrecht in the chair.]
Platitudes won't create new jobs. New education direction and new retraining and apprenticeship opportunities are what will create new jobs and opportunities. Do we see those in this budget? With respect, we do not. What will count is a game plan, a game plan that this budget and this government obviously lack. That's what I'm encouraging this government to sit down and struggle with. Do you have a game plan? Clearly you do not.
Interjection.
J. Dalton: The member opposite reminds me of the throne speech. I'd almost forgotten about that. I wrote my reply to the throne speech about two decades ago, it seems. Eventually we'll get back to that. Of course, we unfortunately got a bit sidetracked in the last few days. Once we dispose of this bad-news budget, we can get back to the bad-news throne speech, and then perhaps get on with the business of the people of British Columbia.
Let me comment on the public service. Putting aside the question of wage freezes, which I've already referred to, the body count in the public service is up: another 336 civil servants in the '94-95 budget. Again, we're going in the wrong direction. That shouldn't be going up; we should be controlling that, and ideally going down if we can demonstrate that we can operate this government more efficiently with fewer bodies. I believe that we can. Korbinization has produced 8,900 new full-time employees in this government, and the government is adding more to the list. It's no wonder that spending is up. Half of the $19 billion plus in the '94-95 budget will go to salaries. What does the government do? It adds more, as I've already documented.
[The Speaker in the chair.]
British Columbians want less government. They don't want the government telling them how to run their lives and telling them how much tax and how many user fees and licences they must pay. British Columbians want less interference. They want the opportunities to control their own economic and social destiny. This government is clearly not allowing British Columbians to realize that destiny. There's more interference documented by this government. I would suggest that this patronizing we-know-what's-best-for-you attitude of the NDP is unacceptable to the majority of British Columbians. The members opposite might wish to think about that. The current polls clearly indicate that that patronizing attitude is totally unacceptable.
Make no mistake: this is not the old CCF government of Tommy Douglas; this is a new people's government, if I can put it that way. This is the new politics of envy. This is the government that will impose its own rather strange view of socialism on this province. The people of Canada, and certainly the people of British Columbia, are turning away from those attitudes. This government and its insider friends are more than happy to tell British Columbians how they should live, how they should conduct their economic affairs and how much money they should dig from their pockets for these misguided revenues.
I've heard so many references to our neighbours in Alberta and what Ralph Klein is doing. We've heard about it again today, and I know we'll hear about it throughout this spring session. I think the member for Prince George-Omineca put it very well: what do we know about what is good or bad for the people of Alberta? Clearly this NDP government should not be commenting on our next-door
[ Page 9620 ]
neighbour; it should be attending to its own house. Leave Ralph Klein to his business. If it turns out to be a disaster, history will record that. Any suggestion by this government that what Ralph Klein is doing is an indication of what the next government in this province might do is totally false. If Ralph Klein is proven wrong, so be it. That's their business; you people should attend to your business.
What else is up in this budget? Taxes are up. Since 1991 there has been a $1.6 billion increase in taxes, and that's of course putting aside all the current increases in fees and licences. Let's forget the so-called freezes that this government is so proud of talking about, and let's look at the overall picture that this budget demonstrates. Don't forget the many fee and licensing increases I have referred to, which our Premier will describe only as user fees and say that therefore you and I need not worry about them. Is there anyone in this House who is not a user of hydro, motor vehicles, gasoline or all the other products? Of course we all are. More importantly, I should not be speaking about the hon. members -- we can look after ourselves. We should be speaking for the many thousands of British Columbians. This government is not speaking for them, and this budget certainly does not speak for them.
[4:45]
The money coming out of the pockets of these so-called users is the same money that's coming out of the taxpayer's pocket. How many times does this government have to be reminded that there is only one taxpayer? There is only one source of revenue, and it's from each and every British Columbian. Every one of us is a taxpayer. I don't care how they disguise it or how they try and gloss it over as something else. Every time this government picks the pockets of British Columbians, it's a tax that is wasted, for the most part, given the lack of game plan by the current regime.
I would note that the Finance minister was happy to refer to off-loading by Ottawa. Twice in her remarks she specifically referred to the Liberal government in Ottawa. I guess it must be true. When you're number one, everyone has to take shots at you, so on Tuesday of this week we saw the Finance minister taking shots at the Liberal regime in Ottawa. In fact, she twice mentioned that this Liberal government is quite likely to be off-loading on British Columbia. There's no evidence of that. Those are obviously falsehoods. Those are uncredited remarks. It's only because the Liberal opposition is leading the way in this province that the Finance minister felt it necessary to take shots at the Liberal government in Ottawa. Putting aside the conjecture of what Ottawa will or will not do to British Columbia, the bottom line is that we know what this government is doing to British Columbia. There's only one taxpayer and one user: each and every British Columbian. I would invite this government and the Finance minister to stop pretending otherwise. Stop glossing over the state of the economy.
Now I will get to the statement in the budget about jobs. Stop telling us about the 76,000 jobs that the Minister of Finance so proudly said were created in this province. What jobs? Are we talking about hamburger-flipping? Are we talking about the jobs that are not the great wealth producers in this province? I suspect so. There is no reference in the budget to what jobs the minister has in mind. Again, there is no game plan to suggest that they're going to be able to create new jobs and new opportunities.
Is this a good-news budget? Clearly no. Is this an honest budget? No. In case the members opposite think that we in the opposition are just naysayers, let me advise the hon. members what a Liberal government will do when we take over. We're going to kill the corporate capital tax. Forget playing around with the numbers of the corporate capital tax; we will eliminate it. We will take the school tax from property. That tax is totally artificial. It bears no resemblance to the service provided. It's an unfair imposition on property owners and will be removed. We will control government spending. We're certainly not controlling it in this budget. Government spending is up with the NDP; it will be controlled with the Liberals. Most importantly, a Liberal government will create a climate for investment and opportunity. This budget does not create that climate.
Interjection.
J. Dalton: Right on. My hon. colleague says: "Research and development, job opportunities and reinvestment."
Does this government have a game plan? It does not. This is not a good-news budget; this is a bad-news budget. I asked at the beginning: what's up? I suggest that what's up is nothing good. Unfortunately, we probably have to look forward to another year or so of this regime, and then we'll have the opportunity to go to the people and put the question to them: what do you think was up in the last four or five years? We'll let them make the decision.
D. Mitchell: Hon. Speaker, I'm pleased to rise and speak in this very important budget debate. It's a debate that was launched by the reading of a budget speech in this chamber by a female Minister of Finance for the very first time in the history of our province. I'd like to congratulate her for doing a good job of reading the speech, at the very least; it was an impressive speech. It was a speech that really talked the talk, but we have to wonder whether or not the minister can now walk the walk. That's the real question we want to ask. I'd like to ask a few questions about that today in my contribution.
I think it's unusual that not many people have made much of the fact that the Minister of Finance is the first woman to serve in that position and to have read a budget speech in this chamber. I don't know why more hasn't been made of that. Perhaps there is some kind of perverted notion of gender equity taking place, as when we saw the deplorable actions of the government in interfering with the female presiding officer of this chamber. Maybe it's one for one, Mr. Speaker, but I don't know....
The Speaker: Order, hon. member. Please address your reply to the budget.
D. Mitchell: Mr. Speaker, the budget presented by the Minister of Finance was certainly an improvement over her predecessor's. There's no question about that. It's a budget that tries to take some steps in the right direction. Perhaps we could even see it as an apology for her predecessor's two budgets. She certainly has reversed the direction in a number of areas. If it is an apology, we never heard any contrition or the words "I'm sorry." If it was an apology, it's a halfhearted one. While it makes some tentative steps in the right direction, it doesn't go nearly far enough to reverse the two misdirected budgets of her predecessor.
The minister spoke quite a bit about deficit and debt in the budget; she used those words. As I said, she was talking the right talk; it was an impressive speech. But I wonder if the Minister of Finance recognized, when she introduced her budget, that deficits are not simply an economic issue and that deficits and debt are not simply political issues. They are also moral issues. The reason I say that is because deficits simply postpone the bill for our current spending and
[ Page 9621 ]
expenditures to future taxpayers. To some extent that's ourselves, but more importantly it's our children and our grandchildren. That's why there's a moral dimension to deficits, and that's why we have to deal with them quickly. That's why we have to eliminate deficits and debt as quickly as possible. That's the moral imperative. The test of the budget is to see how quickly the minister wants to address these issues and what kind of urgency she has in her plan to address the accumulated deficit or debt of our province.
We don't know by reading this budget what the deficit really is. The minister says it's about $900 million projected for the fiscal year that we're about to start. But at the same time, when we look at the total debt of the province, it's increasing by $2 billion. So what is the real deficit in this budget? Is it $900 million, or is it $2 billion? Because that's what the debt of our province is increasing by. We don't know what the deficit is, because of bookkeeping. The interesting thing is that the governing party used to criticize the previous governing party for false or double bookkeeping, for the famous BS fund. Now that they are in government, they are guilty of the same sin. B.C. 21 is simply their version of the BS fund; it's the same thing: double bookkeeping. It does not show the people what the deficit really is. The member opposite knows what I'm referring to.
Interjection.
D. Mitchell: The people of the province want to know why there is a deficit. Why can't it be reduced more quickly? Why can't we balance the budget more quickly than what the minister has predicted in her budget speech? She says that perhaps by 1996 or 1997 they'll be able to balance the budget. The people want to know why that can't be done earlier. My constituents -- and I think they're representative of British Columbians as a whole -- want to see the government take a hard line on taxation. They want to hold the line on taxation and reduce expenditures in order to achieve a balanced budget.
The minister has talked a pretty mean line on this. She says that she's going to hold the line on taxation, although she hasn't referred explicitly to the number of fees and charges on the public purse that are going to be increased. But there certainly aren't many significant expenditure reductions. There are very few cuts if you look at them. They are listed on page 9 of the budget speech. The minister made a big deal out of this. She said that five major government entities were being eliminated. But what are they?
One of them was government air services, which is being privatized. The Minister of Finance never used the word "privatized." It's not a word that fits easily into the vocabulary of the party in power, but that's what's she has done.
Interjection.
D. Mitchell: The Minister of Education says that government air services is being sold. Maybe that's a different definition, but that's privatization by my definition.
The internal government evaluation said that the government would realize a saving of $10 million from that sale or privatization. That's a significant saving. I applaud that privatization, even if the government hesitates to use the word.
They also say that they're going to wind up the British Columbia Energy Council. That's an initiative that the government started. That's a minimal saving there. It certainly doesn't fit into a major government entity, as the Minister of Finance said.
The government is also going to eliminate the British Columbia Petroleum Corporation. Because of deregulation in that industry, that corporation is redundant. There isn't much of a saving there.
The government is also going to reduce or eliminate the Round Table on the Environment and the Economy. That's a body that has done some significant and controversial work in our province, but perhaps its time has run its course. Fortunately many local round tables throughout the province are going to continue to work at a grassroots level, including one in my riding, the Howe Sound Round Table. Again, the Round Table on the Environment and the Economy can hardly be considered a major government entity when we talk about a provincial budget of $20 billion.
The one significant agency the minister did refer to as being wound up is the B.C. Endowment Fund. That is a significant one. I'm glad to see that the Minister of Finance has taken this approach. The previous Minister of Finance made a big deal out of the Endowment Fund when it was first created after the last election. The Endowment Fund is the previous government's privatization benefits fund, which accumulated the money from all the sales of public assets into a single fund. It was to be used for the province and for British Columbians. The new government turned it into a new fund that became a plaything so they could invest in companies. They made a number of controversial investments. They bought $100 million worth of Westcoast Energy, a major corporation in B.C. They made a major investment in MacMillan Bloedel, and found themselves in what I consider to have been a conflict-of-interest on that purchase.
Interjection.
D. Mitchell: The Minister of Education again objects. He doesn't believe it was a conflict. Certainly there was a legal opinion to that effect, but I'm saying to the Minister of Education that in my opinion that was a major conflict of interest.
There was another controversial investment. We don't know all of the investments the B.C. Endowment Fund has made. One of the things we're going to be asking for is a full accounting of all investments made by the fund. We need to know that. But one controversial investment that was made over the last year, since this House last sat, was in the Vancouver Land Corp. The VLC is a company that was incorporated in the city of Vancouver. It was given one of the biggest sweetheart deals ever given to any company operating in Vancouver in terms of access to development on public-owned lands put up by the city of Vancouver. Yet this company that was given a tremendous sweetheart deal came to the Minister of Employment and Investment with cap in hand and asked the government to put money into it. Astonishingly -- and we don't know why or how this happened -- the government actually agreed to make a $15 million investment from the B.C. Endowment Fund into the VLC. We don't know if the government really realized when that investment was made that the VLC was just a Trojan horse. On the face of it the VLC was set up to construct social housing in the city of Vancouver, but in fact it was a Trojan horse that was just trying to sneak legalized gambling in through the back door.
Interjections.
[ Page 9622 ]
D. Mitchell: We don't know if the government was aware of that at the time they made their investment. The government members don't want to believe it, and I certainly don't want to believe it, but on the face of it that appears to have been the case. We don't understand how the government was hoodwinked into investing $15 million of our tax dollars into the VLC. We don't understand why the company needed that money, but legalized, for-profit gambling was the ulterior motive behind the VLC and its proposal for the waterfront on Burrard Inlet in Vancouver. The B.C. Endowment Fund was used and manipulated to the advantage of the VLC. Now the government is apologizing and saying they're sorry, they didn't mean it and they're going to liquidate that investment. That may or may not be a good thing; we don't understand exactly how the B.C. Endowment Fund is going to be liquidated.
Some major questions are going to be asked during the session -- and we hope the government is going to answer them -- as to why that investment was made in the first place. Where did people in the development community in Vancouver, major union leaders for the 29 union pension funds that are involved in the VLC, gambling kingpins from Las Vegas and others ever get the idea in the first place that the laws in British Columbia were going to be changed to allow gambling for profit in our province? These are some of the questions we want answered, and perhaps some members of the cabinet will be able to enlighten us further, during the course of the session, as to how that possibly could have happened.
[5:00]
I mention that in the context of the B.C. Endowment Fund, because that fund is now a significant amount of money -- some $700 million. We need a full accounting in this House of all investments made by that fund. We need to know the terms and details of those investments. We need to know why the fund can't be liquidated sooner than the Minister of Finance has indicated. If it could be liquidated sooner, and a few other decisive actions are taken by this government, we could balance the budget in our province this year. That's a question we need to answer because, as I said earlier, there is a moral imperative to balance the budget as quickly as possible. Any deficit that we leave this year gets put into the accumulated debt, which we pay interest on -- and we're paying a lot of interest.
According the Minister of Finance's figures, this year we are paying $1 billion in interest on the public debt in British Columbia. That's a significant number when you consider that we're living in a time of declining interest rates. Over the last year interest rates have declined to historically low levels, yet we're still paying $1 billion. Mr. Speaker, 5 percent of the total budget of British Columbia is being spent on interest payments to bankers and others, many who are outside the province. It's not going to programs in British Columbia. All of us can think of where we could spend $1 billion; any member in this House, I would hope, can imagine where we could spend $1 billion more effectively than being paid to interest on the debt -- without even touching the principal, which is growing by $2 billion this year. So that's why we want to see the budget balanced sooner rather than later. That's why there's an urgency. It's not because there's some fanaticism about balancing budgets; it's because we simply have to do it. That's the way we should be doing business in our province.
According to the Minister of Finance, debt service charges on our public debt are growing at a faster rate than any other charge on taxpayers this year. They are growing at the rate of 16.6 percent. That's how fast debt service charges have increased in the budget -- faster than any other expenditure in the province. That's why we're concerned about it.
The premises upon which this budget are based really need to be challenged. The growth projections for our economy seem to be conservative enough -- that's the term the minister used when she described them -- but of course those growth projections could be so much stronger if we weren't spending so much money unproductively, such as on interest on the public debt.
The Minister of Finance has to understand that damage has been done to the province by increasing debt, and we're increasing it again -- faster this year than any other province in the country. We already have the highest marginal tax rate in Canada. Our tax structure and our deficit are scaring away investment from our province.
I have discussed the real deficit, and we've talked about the off-loading of ordinary current account spending into off-balance-sheet items. I've discussed the growth of Crown corporation debt as well in a different context, and I don't plan on going into that today, but that is separate and apart from the direct operating debt. Crown corporations need to be much more accountable, and we need to look at that debt in the long term as well.
It's time to comment briefly on the real weakness in the budget, which appears on page 65 of the main document. It's entitled "Fiscal Strategy and Debt Management Plan." Mr. Speaker, you may have had time to look at this document. I don't know if you have, but if so you may have wondered yourself about what seems to be missing from that section of the budget document, because it's not really a debt management plan at all. It's merely a plan to further reduce the deficit, but it's not dealing with the debt.
The Minister of Finance should know better than to confuse deficit and debt. She's talking about eliminating the deficit over the next couple of years, but she doesn't talk at all in her so-called debt management plan about how we're going to attack the principal of the debt. There isn't really a plan there, and I encourage the members to turn to page 65 and take a look at this so-called plan. It's a phony plan. It's not there. I encourage British Columbians to look at it. It is bogus.
The province's accumulated debt, or the operating debt, which is referred to on page 84 of the budget document, was $4.7 billion when the government came to power -- according to their own figures on the chart on page 84. Today, according to the 1994-95 budget, it will have grown to $10.7 billion. It has much more than doubled since the NDP government came to office. How can it be that in a short two-and-a-half-year time span the direct operating debt of our province has more than doubled?
Interjection.
D. Mitchell: I think we've got to be talking about this, because as the member for Cariboo North says, they're obviously spending more money. That is the answer. There is no question about that. The member is right. They're spending more money, but we're having to pay debt servicing on those funds, and that's unproductive. We can't simply be spending more money. That in itself doesn't provide the real explanation or rationale for why the debt of our province -- and this is not the Crown corporation debt; this is simply the direct operating debt -- has more than doubled since this administration has come to office.
Perhaps this government is at its midpoint right now. Does that mean that at the end of its term the debt will have quadrupled? We and our children and our grandchildren
[ Page 9623 ]
cannot afford that. There has to be a stop to this madness. After 1994-95, according to this budget, the crucial figure of government debt -- nothing to do with Crown corporations -- is going to have more than doubled, as I said, and there's not one word about a plan on how we're going to tackle that and reduce it. That's the main message I have today on this budget speech. There really isn't a plan in here for how to attack the burgeoning debt of our province.
The minister talks about the deficit. We could easily deal with the deficit this year. If the Endowment Fund could be liquidated more quickly, and the government was prepared to make a few tough decisions, the budget could be balanced this year. We don't have to wait until election year or until we're on the eve of an election to balance the budget. We could do it this year.
The Minister of Finance talked about the priority areas for spending by the provincial government, and she identified health, education and social services as taking up 75 percent of the total expenditures by the government. That's quite true. I think we should look very briefly at those three key areas to see what the government is doing.
In health, the government is spending $6.5 billion this year. That's about a third of the provincial budget. Is it being spent wisely? We don't know for sure. We only know that recently there was a scandal on the management side of our health care system, which the comptroller general looked into. I refer, of course, to the investigation of the Health Labour Relations Association. The comptroller general is also conducting an audit of the B.C. Health Association. What does the comptroller general say about the management of our health care system in British Columbia -- the largest ministry with $6.5 billion in spending? The comptroller general says that the spending in that ministry at the executive level does not meet the tests of the public service. There's a scandal involving an RCMP investigation that is possibly going to be proceeding with laying criminal charges against executives of the HLRA.
Other investigations are going on as well. That raises at least the question as to whether or not health care dollars are being spent wisely. At the top, they don't seem to be. The government says it's looking at it, but the Minister of Finance was previously the Minister of Health. She was Minister of Health when these spending activities were taking place. There was no accountability for expense accounts, and spending was running wild. The boards appointed by the Minister of Health, who is now the Minister of Finance, were not taking a close look at this.
[G. Brewin in the chair.]
How can we have confidence in the Minister of Finance when in her previous cabinet portfolio she was in charge of the largest ministry in government and there were major scandals erupting among executives and executive spending was running wildly out of control, according to the comptroller general? How can we have confidence in the Minister of Finance today when in her previous cabinet portfolio she clearly was not in charge and there was a missing link of accountability in that ministry? According to the comptroller general, it was serious enough to hand over to the RCMP, and it looks like there's possibly going to be criminal charges laid. We have to ask ourselves whether or not we have confidence in government spending -- health care spending, in particular.
I referred to two other major spending envelopes of the government. In Education, I think the government has actually taken a very commendable stance, and I wish to applaud them for their recent decision to centralize bargaining in our education system. This was not an easy decision for them to make. There are concerns about whether or not local autonomy and local decisions are going to preserve the integrity of our education system. Some boards are justifiably concerned about whether or not local concerns will be addressed. It was a tough decision, and I think the government made the right decision in this area because of cost-effectiveness. We hope that centralization is not going to swing so far that decisions are made in the minister's office in Victoria. We hope that some attention will be paid to local concerns in the system.
Hon. A. Charbonneau: Your hopes will come true.
D. Mitchell: I appreciate that. That's one concern we have. My only other concern is that the government didn't go far enough.
Prior to this session starting, I conducted a scientific poll of my constituents on major issues affecting them. When I asked them a question about education and whether or not education should be designated an essential service in order to eliminate concerns about labour disruption during the student calendar year, a very strong response of almost 90 percent said yes; they agreed with that. So I wish that the government had gone further not only to centralize bargaining in order to make labour relations in our education system much more cost-effective but to also declare education an essential service. They could have gone that one step further, and they would have pleased the majority of British Columbians. My constituents would certainly have applauded them.
On the health care side, the Minister of Health might be interested to know that in the same poll my constituents showed tremendous support for our health care system as it's constituted. I'll just refer to the figure for the record. My constituents were very confident that they would be taken care of by our health care system. Almost 80 percent said they agreed that the health care system would take good care of them if they fell ill today.
The second question was a proposition about user fees in the health care system. They were asked whether a modest user fee for visits to a doctor or to emergency services would be acceptable if that's what it took to meet the rising costs in our health care system. The minister might be interested to know that almost 75 percent said they would be willing to accept a modest user fee if that's what it took to ensure the integrity of our health care system. So another way the government could save money and balance the budget would be to implement a modest user fee for that purpose. This is simply one idea from some of my constituents in a constituency poll.
I refer to one other area, and that is Social Services. The minister identified it as the other major component of government expenditures. According to the budget, Social Services is the fastest-growing area of government except debt servicing.
Interjection.
D. Mitchell: It's coming down, as the Minister of Transportation and Highways said. That's true. Last year Social Services increased by almost 20 percent; this year it's increasing by 14.2 percent. But it's only the second category in the provincial budget that's into double digits. While it's coming down, there's still a concern as to whether or not an increase of 14.2 percent can be justified after last year's
[ Page 9624 ]
increase of 20 percent. It comes second only to debt servicing.
If you take a look at a government's budget, it's much more than simply a financial accounting of spending. A budget also presents a vision for the province and its hopes for the future. What are the two largest spending increases in this budget? They're debt servicing and Social Services. Is that the vision we want for our province? Is the government really telling British Columbians that their vision is one of more debt, more interest payments on the debt and more social assistance recipients? Is that the future according to this government? It's not the first time, because the last two budgets also had spending increases that were very large in these areas. Unfortunately, for the third consecutive budget, debt servicing and social assistance are the two main priorities.
[5:15]
There's got to be a better way. One area that I would like to applaud the government for is its emphasis on skills training and labour. The budget speech made some admirable attempts to identify those as priority areas. Last year I had the opportunity to attend the Premier's Summit on Skills Development and Training. Out of that came part of the government's reorganization. There is no longer a Ministry of Advanced Education and a separate Ministry of Labour; there's one new conglomerate called the Ministry of Skills, Training and Labour. I'm not sure how that's going to work. There needs to be a focus on advanced education, and I hope that's not going to be subordinated to the Labour portion of that ministry.
The budget said that there are going to be 8,100 new spaces in the post-secondary educational system. I applaud that. It's not going to meet the demand; the demand is much higher. I'm hoping we'll be able to find out where those 8,100 spaces are going to be allocated. Which institutions are going to get them? That is a question that the Minister of Skills, Training and Labour is going to have to address. I hope the role of advanced education is not going to be subordinated to the Labour component of that ministry. There are some vital needs in our college system and in our universities -- and not just at the University of Northern British Columbia, which is a tremendous initiative started by the previous government and now continued by this government. I know all members from northern British Columbia must applaud that. There are great needs throughout the post-secondary system, not just in northern British Columbia. We hope the Ministry of Skills, Training and Labour can try to address those.
The concern we all have, though, is that with the heavy emphasis on social services, the government might have put more priority on spending money on passive income-maintenance programs rather than active skills development and training. If I could recommend one major shift in this budget, it would be to transfer expenditures from the Ministry of Social Services into that area of skills and training in order to give people the active skills to become financially independent and make contributions to British Columbia, not to become wards of the state. I would like to see that major shift in this budget. As critics, we've got to try to find good as well as bad, and if any good comes out of the emphasis on skills and training, I think all members of this House would have to applaud that.
I would like to refer briefly to the section of the budget speech that dealt with federal-provincial relations and transfer payments. The time has come to end the federal-provincial haggling, complaining and whining, asking the federal government for more. It's not realistic. When we know what a financial mess our federal government is in, how can we expect Ottawa to be giving us more?
Interjection.
D. Mitchell: The Minister of Education correctly shows us that the new Liberal administration in Ottawa is having some difficulty because of the mess they inherited. But governments can't rely on that phony old excuse of inheriting messes to explain their problems. It becomes pretty tiring pretty soon, as the Minister of Education knows. It's time for us to start thinking about taking less from the federal government. We can't become dependent on transfer payments. All of us have to start thinking about taking less from the federal pie.
There's so much more I'd like to say, but I know I am running out of time. Before I take my seat, I would like to say that the British Columbia government is the largest business in the province, and it should be run, wherever possible, in a businesslike manner. Crown corporations have to be brought under control. They must be held accountable to this House. Budgets should be balanced each and every year, and legislation is required in order to impose that kind of discipline on any government. Surpluses must be earmarked specifically for reduction of the accumulated debt of our province. We need a plan to address that accumulated debt.
A small and modest reform is that the budget should be presented on the same day every year so that the whole province -- school boards, private businesses and municipalities -- will know each and every year that the budget will be presented at the same time, so that there can't be any political manipulation of the budget or budget day. These are some of the changes that need to be made.
I don't agree with all aspects of the budget; that's obvious. But there is some good in it, and I've referred to that. One thing I haven't referred to is the elimination of the property transfer tax for first-time homebuyers. That's going to help some of my constituents, and I applaud that. I wish it could have gone farther. I don't agree with many of the actions and policies of the government, but today it's the only government we have, unfortunately, and we've got to try to find the strength to work with it. That doesn't prevent me from being a critic or advocating changes or reforms, and I will continue to advocate them, because I think it's important to repeat one's beliefs and one's values and truths as often as one can.
To conclude by paraphrasing the famous literary wit Oscar Wilde, if you tell the truth often enough, eventually you just might get caught.
H. De Jong: I am pleased to make some comments on this year's budget. I suppose I could be totally negative if I wanted to, but I can't be totally positive either. So I prefer to be realistic today. There are a number of concerns in the budget, but there are also a number of positive aspects. I believe it's only fair to express my appreciation for those that I feel are positive moves.
First of all, the changes to the sales tax on vehicles are a relief. I'm sure that the car dealers and the people who buy the cars appreciate that move. Having realized their mistake, why doesn't the government act on the total mistake? It was a total mistake to change what they did last year. As the government has confessed that they were wrong, why not clean it all up?
I heard the opposition backbenchers gloating about the base figure for the corporation capital tax being raised from $1.25 million to $1.5 million. Can that be considered a
[ Page 9625 ]
positive move? Yes, I suppose, in some respects, because 1,000 or 2,000 are going to be exempt from this unfair tax that was imposed a couple of years ago. It's as it was with the farming community last year, but the government has now corrected that. It's still unfair competition between those who have incorporated their business and those who have not. I know that the government thinks "corporations" is a bad word, but corporations aren't all that bad. In many instances I'm sure that the same reasons apply for incorporating a business as for incorporating in agriculture, as I explained so well last year. I believe that the government listened to that, but why didn't they complete the full round?
I know how the backbenchers in the government feel -- I've been there myself. I know how it feels when you just about choke on your own words to make your points in appreciation of such a budget. I would have difficulty not choking on my words if I was on the government side. I'm sure that the thoughts of many of the backbenchers who have spoken must have differed a lot from what they uttered. I also know what loyalty means, and I respect that. But are the backbenchers really aware of what this government and some ministers have been doing and what they are intending to do with this budget? If they did realize what the government has been doing, I'm convinced that many who have already spoken would gladly withdraw what they said. The backbenchers have used the usual scare tactics, because the opposition members have said this budget is not right: too much taxing, spending and debt. They have used against the opposition the scare tactics of cutting this and cutting that. It's not a matter of cutting programs.
The backbenchers have used Premier Klein of Alberta as an example. In Alberta, those opposing Premier Klein's actions could only draw or drum together 3,000 at a rally a couple of weeks ago. Compare that to the 25,000 loggers and supporters here. The backbenchers must have been blindfolded to reality. Or are they perhaps so accustomed to follow their leader, as if they are following out of fear for the leader as applies in big labour unions?
I suggest some positive points for the government backbenchers to speak on. I'm sure that I, along with many other members in the opposition, would support them on these. I would like to suggest three points that in fact could wipe out the total operating deficit in this year's budget.
[The Speaker in the chair.]
First, cut out the fair wage policy, saving $200 million or more. Second, put the freeze on hiring instead of hiring more; this would save the government another $150 million. Third, cut out the propaganda which is only for the purpose of political expediency. Yes, the people in British Columbia deserve to know what the government is doing; but it does not have to be done as it currently is, which is nothing more than political propaganda. Those three points would balance the budget and not cut any programs. They are all positive measures that the people of British Columbia, especially those who foot the bill, would praise the government for. I urge the government backbenchers to get on the positive side; they'll get the support of the people then. I recognize, however, the reality of party politics and of belonging, but belonging does not necessarily mean following. It means working together, and that doesn't seem to be occurring. That doesn't mean to say that the government and the ministers are not working hard. They definitely are; there is no question about that.
One of the ministers who is undoubtedly working hard is the Minister of Environment, Lands and Parks, but my problem with him is that he is working in the wrong direction. I suspect he believes that the injustices of the world are due to free enterprise -- and free enterprise only. He's quite sincere in his opinion. The question I have is: why is all the policing done on the farms in the Fraser Valley? We know that the people in agriculture have, by a long shot, been the most conscious segment of society in terms of environmental safety and protection. Why is the minister continuing to send these ministry-appointed policemen to snoop around the barns and facilities of every farm in the lower mainland without even having received a complaint? It's a waste of taxpayers' money, and nothing more.
[5:30]
I have asked questions about the Chilliwack River valley and its flood problems for the last couple of years. I have asked for a response from the Minister of Environment on that particular problem. To give you a bit of background information, two floods occurred there in 1989 and 1990. In 1990 and 1991 the previous government spent over $1 million cleaning up that river. The cleanup was not totally satisfactory, because the environmental people said that nothing could be removed from the river. If, in fact, two or three feet of a particular log or tree had come down and was stuck in the bank of the river.... The residents were not totally happy, but the cleanup did occur, and a river management study was undertaken.
Hon. Speaker, you may think that I'm going a long way to get to my point. The point is that the river management study indicated several mitigative measures. The river had lost its volume, and gravel removal should have occurred. That suggestion would have driven the environmental staff crazy, even though everyone else agreed. What happened was that there were higher dikes, more rock work and more rocks in the river instead of taking them out of the river. For two years in a row now I've asked for money so that some of that work could be started.
Both federal and provincial bureaucrats keep tramping along the banks to see what is happening, but nothing is being done. People are furious, and now they're in the process of passing a local bylaw to gather funds to do some things themselves. The people will be voting on that on April 9. With respect to the passage of that bylaw, I wrote a letter to the Premier back in January to ask for some concrete answers in terms of support on the part of the Minister of Environment. In return, the Premier wrote to me:
"I appreciate the concern of the residents of the valley, and I support the implementation of the outlined plan, subject to the availability of funding. I'm also impressed by the continuing efforts of the Chilliwack River Valley ratepayers to raise funds for the maintenance of privately owned flood protection works. However" -- here is the important sentence -- "I regret that due to severe budget constraints, the government is unable to commit funding through the Ministry of Environment, Lands and Parks for this project for the coming fiscal year."
Another year of uncertainty for the people in the Chilliwack River valley. But so be it. Two years in a row it's the same answer.
Another one I'd like to enlarge upon is the Ministry of Attorney General. New, enlarged offices were opened in the Abbotsford area last year. I recognize that these offices serve a large area, but I further realize that there is a need for assistance and advice in terms of family breakups and all that goes along with it, which is costly. I can appreciate that that section of the budget needed attention.
However, along with doubling the lawyers for that part, the point is that the doubling of lawyers assisting these people that have committed a crime has also doubled.
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Whether those crime initiators have money or not, I do not believe -- and I'm sure that many people in British Columbia will agree with me -- that the people of this province should dig deeper into their pockets to assist the criminals through the process of justice. I don't think that people are prepared to pay for those self-committed crimes and to pull them through the justice system. My question is: are the backbenchers really aware of, and do they agree with, this kind of thing?
Let me take a look at the Social Services ministry. And yes, there are some positives there as well. I was very appreciative of the Minister of Social Services -- and I'm glad she's in the House this afternoon -- when a young woman called me who had a slight mental problem and she did receive the housing she needed. The point is that she was the last one to get that type of housing under that particular program. The program was cut, and I'm not sure whether a new program is being put in place to look after those kinds of people and their needs.
Who is cutting programs? What about the Minister of Agriculture raising grazing fees, water fees and who knows what else? This is a time of great uncertainty for the agriculture industry. The industry is fighting against rising land prices, which translate into rising property taxes. Exemptions for those have fallen far behind what they used to be. The economic change and the many unproven types of equipment.... I realize that the minister has changed from one insurance program to another, and I don't think the farmers expected to get double. While every other minister is either kept at the same level or has had an increase, why is the Minister of Agriculture cut back? The minister knows full well that the change to modern equipment is very costly and requires an awful lot of risk on the part of the agriculture industry. We suggested on many occasions that a program to test prototype equipment would be of real assistance to the farming community. It wouldn't cost millions of dollars, but it would certainly help the industry. The farming community had some hopes in this government, but it's losing them fast. This budget is not proving anything to the farming community. It doesn't give them one bit of hope.
In conclusion, I just want to say that this budget, in my humble opinion, does not reflect what the people of this province expect. It is a budget that is dependent on the new PST for revenue. It appears that it's the collection of taxes on which this government bases its economic growth.
Social services are at an all-time high. Once during the years 1972 to 1975, I clearly remember driving through the state of Iowa. There was a station wagon from British Columbia ahead of me. It had a bumper sticker which read: "Social Assistance, B.C.'s Number One Industry." If this government continues to go on its road of spending more than it takes in, all at the cost of the taxpayers present and future, I fear that we will have to have those bumper stickers again.
This budget is a bad joke. The Island Highway is a perfect example of how the government wishes to feed its political friends and support big unions, without consideration to those who pay the bill. Thank you, hon. Speaker.
F. Garden: I rise to take my place in this throne debate, but time is running down and I know, hon. Speaker, that you have some business that you want to put before the House. On the basis that you want to make this presentation to the House, I would like to adjourn debate at this time.
The Speaker: The motion is that we adjourn debate to the next sitting of the House after today.
Motion approved.
The Speaker: Before putting the question of adjournment, I will read my ruling in response to the hon. member for Peace River South, who, on Tuesday last, raised a question of privilege with respect to allegations in the media surrounding the position of Speaker relative to the government.
The member referred to articles from the media alleging that the former Speaker had been "asked by the government to step down as Speaker." He suggested that such allegations were confirmed by the fact that they were neither corrected, challenged nor denied by the former Speaker.
In the opinion of the member there was government interference with the Chair and that constituted, as such, a breach of the collective privileges of all members. The member tabled a number of documents, which included a detailed outline of his point of privilege, the former Speaker's statement of resignation, a number of media reports and extracts reflecting the allegations referred to by the member and a copy of the motion he intended to move should a prima facie case of privilege be established.
The Chair also heard and considered comments from other members on this issue and is thankful for their contributions. It is incumbent on the Chair to decide if a prima facie case of privilege has been established by the member, to determine "if the case is of such a character as to entitle it to a motion" -- Beauchesne, sixth edition, paragraph 26(3), and May, nineteenth edition, page 231. I have thoroughly reviewed the material tabled. Situations giving rise to doubts about the independence of the Speaker are of grave concern to this House. Members must at all times have full confidence in the Speaker as an essential element in the functioning of the House.
In the situation at hand the allegations in the media reports have remained unsubstantiated, and were neither confirmed nor denied. Lack of denial of alleged facts does not constitute admission. The Chair is therefore in a position of having to render a decision based on a series of unsubstantiated allegations. The fact that the allegations are of a serious nature does not thereby render them a matter of privilege. The Chair has heard nothing from the member other than the media allegations to indicate that any undue influence was exercised by the government with respect to the former Speaker's resignation.
I recognize that the hon. member has great respect for the institution of parliament and is quite concerned and aggrieved by what he considers to be a matter of privilege; but unless there is sufficient evidence to support the allegations, a prima facie matter of privilege has not been established. The Chair's examination of the documentation tabled by the member leads to the conclusion that there is substantial uncertainty as to the facts alleged in the media reports. The strict definition of parliamentary privilege cannot be expanded to include controversies as to facts.
There are a number of rulings in this House and in other jurisdictions clearly stating that unsubstantiated allegation of facts or disputed facts "does not fulfil the condition of parliamentary privilege" -- Beauchesne, sixth edition, paragraph 31(1). More particularly I refer members to the Journals of British Columbia -- April 13, 1982, page 41; June 8, 1982, page 132; and June 29, 1988, page 128 -- where Speakers of the day consistently ruled that matters of privilege cannot be based on disputed facts. I quote partly from the June 8, 1982, ruling: "This is clearly a dispute as to facts and accordingly does not qualify as a matter of privilege."
[5:45]
[ Page 9627 ]
The Chair wishes to note that the former Speaker was elected to the chair and continued in that office until she resigned, which resignation was immediately followed by the election of a new Speaker at the next sitting. This process was in conformity with section 42 of the constitution of British Columbia, with the standing orders of this House and with the provisions of May's nineteenth edition at page 268. In the circumstances, and in accordance with the reasons outlined and authorities cited above, I am unable to find that the member has established a prima facie case of privilege.
Hon. J. MacPhail moved adjournment of the House.
Motion approved.
The House adjourned at 5:46 p.m.
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