1995 Legislative Session: 4th Session, 35th Parliament
HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JULY 12, 1995

Afternoon Sitting (Part 1)

Volume 21, Number 28

[ Page 16913 ]

The House met at 2:08 p.m.

Prayers.

W. Hurd: I am pleased to have the opportunity today to introduce a long time friend and supporter of my political career. Earl Hansen is in the gallery today with his brother and sister-in-law from California, Walt and Pat Juarez. Would the House please make them welcome.

L. Boone: It gives me great pleasure today to introduce some visitors from Portland, Oregon, the City of Roses: Malcolm Venier and his friend Anita Sagar. Malcolm and his friend Anita are here to visit Malcolm's mother, somebody who is a good friend to many of us in this chamber, Judy McCallum. As somebody who has worked with me over the years, on behalf of many of us in the chamber here I would like to take this opportunity to thank Judy for all her assistance. With Judy is her good husband, Michael Penney. Would the House please make them welcome.

Hon. A. Charbonneau: I would like to introduce to the House Fowsia Abbulkadir, an ESL teacher visiting British Columbia from Ottawa. I would ask the House to make her welcome.

Introduction of Bills

MUNICIPALITIES' PROTECTION ACT, 1995

G. Campbell presented a bill intituled Municipalities Protection Act, 1995.

G. Campbell: In 1987 a private member's bill was brought in to amend the Vancouver Charter, to say that the city had no legal duty on which a cause of action could be based, to ensure that building bylaws were complied with and that the city was not liable for damages of any nature as a result of failure to discover a contravention of the bylaw. To date, only the city of Vancouver is permitted legislative protection of this nature. It is important to note that this protection of the city has been upheld by the courts. The Municipal Protection Act simply extends this protection to other municipalities across British Columbia.

Bill M220 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

CROWN CORPORATION ACCOUNTABILITY ACT

F. Gingell presented a bill intituled Crown Corporation Accountability Act.

F. Gingell: Provincial Crown corporations are owned....

Interjections.

The Speaker: Order, please.

F. Gingell: Mr. Speaker, I know that everyone is interested in listening to this, and I wish that the government would adopt this.

An Hon. Member: Time's up.

F. Gingell: Stammerers are allowed extra.

Provincial Crown corporations are owned by the citizens of British Columbia. This Legislative Assembly, on behalf of the citizens of British Columbia, should hold all provincial Crown corporations accountable. This bill provides for an annual report to be filed each year by the Crown corporations, and for representatives of each Crown corporation to appear annually before a legislative committee to answer questions with respect to the activities of the Crown corporation which they represent.

Bill M221 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

COMMUNITY CHARTER

G. Campbell presented a bill intituled Community Charter.

G. Campbell: The Community Charter establishes a new relationship...

Interjections.

The Speaker: Order!

G. Campbell: ...between municipalities and the provincial government. It prohibits downloading. It requires all provincial Crown corporations to pay full property tax. It means less bureaucracy, less administration and less regulation. It eliminates unnecessary provincial interference in local decision-making. It means more accessible, more accountable and more affordable government for all British Columbians.

Bill M222 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

LABOUR RELATIONS CODE ADVISORY COMMITTEE ACT

G. Farrell-Collins presented a bill intituled Labour Relations Code Advisory Committee Act.

G. Farrell-Collins: This bill is a piece of legislation that has been -- or at least the committee is -- something that we'd all hoped would come into place sooner in this House. It was included in Bill 84, with the option that it may come into force. At that time, we received a commitment from the former Minister of Labour that it would. It has yet to do so.

It's time that an independent group started to review the progress of the labour relations bill over the last number of years. Despite the minister's comments, I don't think it's 

[ Page 16914 ]

working quite as well as was promised. This bill would require the committee to be appointed. It would be appointed by and report to members of the Legislature.

[2:15]

Bill M223 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

EMPLOYMENT STANDARDS EXCLUSION ACT

G. Farrell-Collins presented a bill intituled Employment Standards Exclusion Act.

G. Farrell-Collins: I know the NDP backbenchers look over with envy at actually being able to bring forth legislation. I hope in the future they partake in doing some of it themselves.

The Employment Standards Exclusion Act would allow employees, where a majority of employees in a collective agreement agree, to opt out of particular provisions of the Employment Standards Act to make their workplace more productive and flexible for themselves, and would allow them to achieve agreement and flexibility in their own workforce to their best wishes.

Bill M224 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

M. de Jong: Hon. Speaker, I move that a bill....

The Speaker: Just a moment, hon. member. Hon. members, it is very difficult for the Chair to conduct the proceedings with the interruptions and unrealistic amount of chatter that is taking place. I don't know if it has anything to do with the rumour that we may soon be adjourning.

Interjections.

The Speaker: Order, hon. members. Until that time, let's try to keep in mind that we still have business to conduct, and let's do it in a proper manner. I ask the members to please restrain themselves.

AGRICULTURAL LAND COMMISSION AMENDMENT ACT

M. de Jong presented a bill intituled Agricultural Land Commission Amendment Act.

M. de Jong: This bill divides the province into five natural agricultural land regions and provides for regionally appointed appeal boards to ensure a more regionally sensitive form of accountability. The bill also extends the jurisdiction of the appeal boards to allow for consideration to be given to communities as it relates to public education, health and religious facilities.

Bill M225 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

OPENNESS IN ABORIGINAL TREATY NEGOTIATIONS

G. Campbell: My question is to the Minister of Aboriginal Affairs. The secrecy surrounding aboriginal treaty negotiations has created an environment of fear and suspicion. Only by opening up the treaty negotiations to the people of B.C. can we move forward toward successful treaty settlements.

The B.C. Liberals have obtained a confidential cabinet planning document that proves that this cabinet is creating a provincial treaty mandate behind closed doors. Will the minister commit today to bringing all the mandate issues outlined in this document before the House for debate and a free vote?

Hon. J. Cashore: Obviously the Leader of the Opposition thinks that if he repeats an untruth often enough, the public will start to believe it.

The Speaker: Would the hon. minister please take his seat.

Interjections.

The Speaker: Order, please. The Opposition House Leader rises on a matter.

G. Farrell-Collins: The minister knows full well that that type of comment is unparliamentary, and I ask him to withdraw it.

Interjections.

The Speaker: Order, please. The hon. minister has been asked to withdraw any improper motives imputed to another member of the House.

Hon. J. Cashore: If the words I've used offend the member, then I do withdraw them.

The Speaker: Thank you. Please proceed, hon. minister.

Hon. J. Cashore: The Leader of the Opposition has been going around the province making statements accusing this government of secrecy when we are the most open government with regard to treaty negotiations in the history of Canada bar none, either pre-Confederation treaties or modern treaties. The fact is that the Treaty Negotiation Advisory Committee, regional advisory committees, the treaty advisory committees, the protocol we have with the municipalities, the countless meetings that are taking place throughout this province on a regular basis, and the openness of my office to brief hon. members to make sure that all members of the House are fully informed on these issues allow the public to see through this kind of rhetoric and comment, which the Leader of the Opposition is making strictly for political gain.

The Speaker: Supplemental, member.

G. Campbell: The minister's words simply don't match the song sheet. Here's the song sheet, page 2: resource r

[ Page 16915 ]

evenue-sharing mandate, subsurface mandate, environmental assessment mandate, land selection mandate, access mandate and alternatives to extinguishment of aboriginal rights. All of these things are going to be discussed and decided behind closed doors by this cabinet this summer. The people of British Columbia deserve to be included in these discussions. When will the minister come clean with the people of B.C. and realize that closed-door decision-making, and closed-door backroom decisions are going to sound the death-knell of treaty settlements?

Hon. J. Cashore: The hon. Leader of the Opposition might inform this House, as the Minister of Labour says, as to whether or not he invites the public to his caucus meetings.

No government and no caucus would ever abandon its responsibility to do the work that it must do. The fact is that this Leader of the Opposition goes around this province repeating statements that are untrue, that are incorrect. He makes those statements over and over again. The citizens of Smithers spoke to him in a meeting. They told him that it was untrue, and they told him that this government has the most open process for consultation that there has ever been.

A. Warnke: My question is also for the Minister of Aboriginal Affairs. In the same document referred to, one of cabinet's topics for discussion is as follows: "Certainty in treaty negotiations and alternatives to extinguishment of aboriginal rights." Therefore that clearly indicates that this NDP government has been looking at signing treaties that are not final and binding. My question to the minister is: when is the minister going to muster the courage to tell the people of British Columbia that the government may not be seeking extinguishment of aboriginal title as part of the treaty settlement?

Hon. J. Cashore: The hon. critic cannot get his leader to support him with regard to the 11 points he brought in at the eleventh hour with regard to Liberal policy, only to have the leader come into this House with a different set of points with regard to the Liberal position. He is trying desperately to try to create a myth here. The fact is that the issue of certainty needs to be discussed thoroughly. It is being discussed by the Treaty Negotiation Advisory Committee, by the treaty advisory committees throughout the province and by the regional advisory committees throughout the province.

With regard to the member's comment about final and binding, I think the same type of expectations we have of contract law would apply in treaties. There's no secret about that. Those people who are living in the houses on the Musqueam land saw a reverse situation. For 30 years they were paying less than $300, and now they could see up to 20 percent of the value. They would want to be able to talk to you about final and binding.

The Speaker: Supplemental, hon. member.

A. Warnke: The fact is the minister just avoided talking about the problems of secrecy, and secrecy is what is discrediting the entire treaty process in this province. This strictly confidential document also sets out that eight framework agreements and one treaty inclusion agreement are slated for approval by cabinet this fall. Therefore will the minister stand up today and confirm whether these facts are slated for approval? And when is he going to tell the people of British Columbia about this secret agenda?

Hon. J. Cashore: The people of British Columbia are being kept fully informed with regard to the developing mandates of this government. I would point out that the Leader of the Third Party does not resort to this kind of cheap shot, nor does the leader of the Alliance. At the time of the signing of the Sechelt framework agreement, they pointed out that that was the most open process they had ever seen. They gave the government credit for that; they gave the Sechelt credit, and now we have those openness agreements with eight first nations in total -- all because of the commitment that the Premier made when we met with the UBCM last September.

PUBLIC OPPOSITION TO PHOTO RADAR

J. Weisgerber: My question is to the Minister of Transportation and Highways. Last July, ICBC conducted a series of focus groups to determine whether or not British Columbians would prefer to receive citations from police officers in person or they would prefer to receive tickets from photo radar in the mail. An incredible number indicated that they would much prefer to see police officers on the job issuing tickets and, in fact, enforcing the law. Can the minister tell us why, indeed, she has decided to do the opposite of what the majority of people contacted in the focus groups indicated they thought should happen?

Interjections.

The Speaker: Order!

Hon. J. Pement: Interestingly enough, an Angus Reid poll was done, and two-thirds said: "Yes, we do want to see photo radar cameras in." Also, the fact is that when the people who said no were asked what would change their minds, they said: "How those cameras are implemented would change my mind." Also, for the member's information, it takes five times more dollars to put police and radar guns out on the highway than to put photo radar out.

The Speaker: Supplemental, hon. member.

Interjections.

The Speaker: Order, please.

J. Weisgerber: The Hathaway report also stated: "There is substantial initial resistance to the idea of widespread employment of radar cameras." Further, the core opposition appeared to be based on the premise that the cameras might be used as revenue generators rather than for speed control. Given the fact that the minister's own department has indicated that they intend to see 1.6 million more tickets issued through radar cameras than through police officers, can the minister deny that revenue is the core issue?

Hon. J. Pement: They still don't get the point that safety is the issue. Sixty lives saved on the highways is the issue. The $2 billion that we pay out for accidents in British Columbia is the issue every year, and the fact is that we hope to decrease 

[ Page 16916 ]

fines and the number of people speeding. In the long run, we hope to decrease accidents and costs. I would think that the member would want to get on board.

Interjections.

The Speaker: Order, please. Hon. members, if you have a point to make, please seek the floor and make it. If you don't, I would appreciate it if you would permit the business to proceed without interruptions.

[2:30]

OPPOSITION'S POLICY ON TATSHENSHINI

M. Sihota: Banff National Park and the Grand Canyon are UN heritage sites. The Tatshenshini has been nominated as a heritage site under the United Nations. Given the Liberal vote last night, in the dead of night....

Interjections.

The Speaker: Order! Will members please take their seats.

G. Farrell-Collins: The government's former House Leader, among former other things, knows full well that the bill has yet to receive third reading, and therefore the question is out of order.

The Speaker: The point is well taken. Does the member have a question which would be in order?

M. Sihota: Given the position of the opposition, who removed the Tatshenshini as a park, and given the decision of the....

The Speaker: Hon. member, with the greatest of respect, I think the point that was raised by the Opposition House Leader is a valid point, and all hon. members know the standing orders. I will have to ask the hon. member to proceed with a different question, or I'll have to recognize someone else.

M. Sihota: Hon. Speaker, given the fact that the opposition has indicated that they "would mine the hell out of the Tatshenshini," what assurance can the minister...?

Interjections.

The Speaker: Order, please. All members are fully aware of the rules, and I think that unless.... I've asked the hon. member to raise a different question. He is unable to do so, so he cannot be permitted to proceed.

Hon. J. MacPhail: Hon. Speaker, he is just making a comment, which has been repeated in this House time and time again, that has nothing to do with the legislation before us. I think it's well in order.

Interjections.

The Speaker: Order, please. There's no need for any further points of order on this point, hon. members, because I don't think there's any question in any member's mind that if matters are before the House as an order of business, those questions should not be raised until that matter has been addressed -- and that is not the case.

Interjections.

The Speaker: Order, please. I am going to recognize the hon. member for Matsqui, who has been seeking the floor time and time again, for one question and no supplemental. Please proceed, hon. member.

NDP CONSTITUENCY OFFICE EXPENDITURES

M. de Jong: I agree to those terms, hon. Speaker.

My question is for the Premier, and it relates to the practice by several of his caucus colleagues of using taxpayer-funded constituency allowances to buy office space for the NDP. The Victoria-Hillside NDP is using office space owned by the Victoria-Hillside Commonwealth Society. The society bought that property using revenues derived from the constituency allowances of two NDP MLAs. Today we have asked the conflict commissioner, Ted Hughes, to reopen his constituency office investigation to examine the constituency office expenditures for the members for Victoria-Beacon Hill, Victoria-Hillside and Oak Bay-Gordon Head. My question to the Premier is: will he order his caucus members to stop funnelling taxpayers' money into NDP-controlled societies?

Interjections.

The Speaker: Order!

Hon. M. Harcourt: I think it's good that the Liberals are consistent in the way they started and are ending the session. They should remember the old saying that those who throw mud end up in a hole and that people who are throwing mud up end up in a mound of earth. Over and over again we have had these sorts of accusations thrown at people, trying to ruin their reputations, trying to attack other MLAs.

On this matter, in 1992 the conflict commissioner began a one-year investigation, which was requested by myself, and requested and endorsed by all members of this Legislature. Mr. Hughes totally exonerated government MLAs of Liberal accusations that constituency allowance funds had been given to the NDP. He called this a significant result, given the serious nature of the Liberal accusations. May I read what he had to say? He said:

"Any suggestion of substance indicating improprieties: I will be prepared at that time to seek the assistance of auditors and attempt to resolve any questions of discrepancies, believing that discrepancies of substance that could have a link to wrongdoing do not exist. I am comfortable in following this procedure and avoiding what I sincerely believe would be an injudicious use of of public funds."

More waste of public funds on more mudslinging. That's the way this Liberal opposition started the session, and that's the way they are ending it.

[ Page 16917 ]

The Speaker: The bell terminates question period.

The hon. member for Okanagan East rises on a point of order?

J. Tyabji: I rise under standing order 79. I recognize that there is a really jovial atmosphere in the House, and we're almost at the end of the session. I'm sure the government and other members of the House would be prepared to have tomorrow as the last day of sitting, in order to allow the Liberals to have the bills they have tabled printed. They have tabled nine bills before today and quite a few today, which many of us would like to see. Standing order 79, it says that a bill cannot be read a second time until it has been printed. I note that many that have been tabled previously have not been printed. If we do have tomorrow as our last day, then Friday could easily be the day on which these bills would be read a second time. I would be most interested in the substance of that debate.

G. Farrell-Collins: I think it is a little presumptuous of the member to think that the House is going to adjourn today -- or tomorrow, for that matter. But I certainly welcome her support and participation in the debate of the good legislation that has finally come before this House, as opposed to what we have been seeing from the government.

Hon. D. Miller: Hon. Speaker, I would seek your guidance with respect to statements made by the member for Matsqui.

The Speaker: Are you on the same point of order?

Hon. D. Miller: No, it's a different matter.

The Speaker: A different matter? Then just a moment. Thank you, minister. Please take your seat.

On that matter, hon. member, it is not the Chair's responsibility to make arrangements for what the order of business is. However, I do think that all members are now aware of your interest in this matter and will follow whatever course of action they deem necessary.

Hon. D. Miller: On another point of order, hon. Speaker, notwithstanding the very good answer given by the Premier in response to the question raised by the member for Matsqui.... I can't recall the exact words, but the question raised by the member for Matsqui went something like this: "Would the Premier tell his caucus to stop funnelling taxpayers' money into party offices?"

I take personal offence at that remark, particularly in light of the fact that Mr. Hughes did conduct an investigation on all members of this House. That's an attack. I take that as a personal attack, but certainly it's an attack on all members on this side of the House. I would ask the member to withdraw those comments. That's a spurious allegation that's unfounded, and I would ask for those comments to be withdrawn.

The Speaker: The hon. member for Matsqui has heard the complaint. He has been asked to withdraw the remarks that are deemed to be unparliamentary and appear to be offending the integrity of a member of the House. I would ask the member to withdraw those remarks.

M. de Jong: If this is the last day of the session, hon. Speaker, I would not want the minister to leave offended. I'm happy to withdraw the remark and let Mr. Hughes decide.

The Speaker: I take that as an unconditional withdrawal, with no reference to whether it is or isn't the last day of the House. Is that appropriate?

Interjection.

The Speaker: The member withdraws.

Hon. D. Miller: Hon. Speaker, it's not a question of having taken offence. It's a breach of the honour of all members to suggest that they are doing something contrary to the rules. All of us should take these issues seriously and think about them in terms of how we frame questions.

The Speaker: Hon. minister, the member has withdrawn; the matter has been resolved.

Hon. J. Pement tabled the financial statements of B.C. Rail ending December 1994.

On behalf of the Minister of Employment and Investment, Hon. J. Pement tabled the annual reports of the B.C. Ferry Corporation, 1993-94; the B.C. Transit Corporation, 1993-94; and the Job Protection Commission for the year ending December 31, 1994.

Presenting Petitions

M. de Jong: I have a petition from members of my constituency:

"The petition of the undersigned, residents of the electoral district of Abbotsford and Matsqui....

"We the undersigned wish to register our strong support to the changes to the agricultural land reserve act proposed by [the member for Matsqui]. We believe in a balanced land use act which allows institutions such as schools and churches to build facilities on marginal agricultural land."

The second petition reads:

"The undersigned requests, on behalf of the city of Abbotsford, the immediate withdrawal of..." -- parts of Bill 55-- "specifically those sections pertaining to the assessment and taxation of railway property."

The Speaker: I would like to respond to a matter raised a few days ago. The hon. member for Richmond-Steveston rose on a point of order and referred the Chair to proceedings in Committee of the Whole which occurred immediately prior to Monday evening's adjournment.

At that time the hon. member for West Vancouver-Garibaldi moved in Committee of the Whole that the committee rise, report progress and ask leave to sit again. That motion was negatived on a division. Immediately thereafter, without immediate proceedings taking place as contemplated by standing orders 34 and 62, the House Leader moved the same motion, which carried.

Let me say at the outset that the member brought to the House a matter occurring in committee which, in keeping with the longstanding practice of this House, should have 

[ Page 16918 ]

been raised in committee. All hon. members will recall the rule that matters of procedure arising in committee must be settled in the committee, and the House cannot deal with such matters unless they are reported to the House. An examination of the Blues makes it apparent that no such report was made to the House. However, as the hon. member raises an important point, for the guidance of the House it is the Chair's view that further comment is warranted.

At the time the questioned motion was made, the Attorney General was acting as Government House Leader. The traditional responsibilities of the House Leader are outlined in Redlich, Procedure of the House of Commons, and are quoted with approval in a decision of this House on April 12, 1976, as follows:

"Let us now briefly indicate the influence directly exercised by the Leader of the House on the course of business. It is his task, in the name of the government and the party in office, to distribute over the session the programme of legislation announced in the King's speech and to advocate it in the House. He assumes the duty of proposing all such motions concerning the agenda of the House as are deemed advisable by the government and is their spokesman in the debate thereon. With regard to every government project the leader is the final authority as to its general progress, as to the time to be given to its different stages and as to any application of the closure or other available method of shortening debate and bringing matters to a conclusion. The whole policy of the government, especially so far as it is expressed in the inner life of the House and in measures dealing with the course of business, is concentrated in his person."

The Government House Leader's authority over the progress of business of the House, and in particular, power to adjourn proceedings, remains paramount. Erskine May's Parliamentary Practice, sixteenth edition, on page 408, further states that the use of the motion for adjournment of the House, when used as a substantive motion, can only be moved by a member of the government. See also Parliamentary Practice in British Columbia, second edition, at page 43.

It is the Chair's view that the law as stated in Redlich and Erskine May confirms the Government House Leader's authority to regulate the progress of government business, both in the House and in Committee of the Whole.

[2:45]

The Chair would also bring to the members' attention that Erskine May's twentieth edition, at page 657, states that in relation to a motion to rise, report progress and ask leave to sit again, "it is usual for the Chairman to accept such a motion from the member in charge of a bill, even if no proceedings have taken place upon the bill." At the time in question, the motion to rise, report progress and ask leave to sit again was made by the member in charge of the bill, who was the Attorney General and Government House Leader.

Because of the importance of the matter raised by the hon. member, the Chair felt it was appropriate to make these extra comments in detail.

Presenting Reports

F. Gingell: I have the honour to present in a purely non-partisan fashion, in line with earlier sessions of this House, the first report of the Select Standing Committee on Public Accounts for the fourth session. I move that the report be taken as read and received.

Motion approved.

F. Gingell: I ask leave of the House to suspend the rules to permit the moving of a motion to adopt the report.

Leave granted.

F. Gingell: I will, if I may, speak to the motion of adoption. First, I would like to commend and thank the office of the auditor general and the office of the comptroller general for the assistance they have given to this committee during this session. I also wish to commend and thank my Deputy Chair, the member for New Westminster, and all members of the committee for their dedication and their assistance in making what I believe to have been a successful series of meetings.

Last but by no means least, I wish to thank the Clerk of Committees for looking after us early on Tuesday or Thursday mornings and for ensuring that the coffee was hot. With that, I commend the report to members of the Legislature to read -- and to respond to us. I move its adoption.

Motion approved.

Orders of the Day

Hon. J. MacPhail: I call third reading of Bill 28.

ELECTION ACT

Bill 28 read a third time and passed on the following division:

[ Page 16919 ]

Hon. J. MacPhail: I call third reading of Bill 53.

PARK AMENDMENT ACT, 1995

Bill 53 read a third time and passed on the following division:

Hon. J. MacPhail: I call committee on Bill 55.

[3:00]

MISCELLANEOUS STATUTES AMENDMENT ACT (No. 3), 1995

The House in committee on Bill 55; G. Brewin in the chair.

Section 1 approved.

On section 2.

D. Mitchell: Hon. Chair, I have a couple of brief questions on section 2 of Bill 55. First of all, this section seems to levy an extra charge on cable companies in the province that are involved in the telecommunications business. I take it that's because cable companies are not now currently covered under this. Could the minister confirm that there's an extra charge here that's going to be levied against cable operators in particular? Why is this amendment necessary?

Hon. E. Cull: Right now there is tax applied on cables, and it's done on what's known as a folio basis. In other words, each chunk of a line is taxed in the jurisdiction that it's in. We're moving to what is known as a commissioner's rate basis. The rates will be added up across the province and then reapportioned, as opposed to doing it chunk by chunk. So there shouldn't be any difference in terms of what the effect is with respect to taxes. It makes it much simpler.

D. Mitchell: I take it from what the minister has said, then, that this will not increase charges on cable companies, which will not, in turn, be passed on to cable subscribers. Of course, that's my concern. If that's the case, that's fine.

I'd like to ask another question about this section, as well. Section 27(2.2) allows assessments to be based on last year's valuations. I wonder if the minister can tell us why this is necessary. In particular, with this amendment are we passing an extra tax burden on to municipalities which, in turn, would be passed on to residential taxpayers? Is this amendment an extra burden for municipalities?

Hon. E. Cull: No extra burden would be passed on to taxpayers. It's simply a matter of timing. After the assessed values are determined, adjustments are made, consultation has to take place with municipalities around those adjustments, and it simply wouldn't be possible to conclude that and use this year's assessed value in all cases. So we're giving ourselves the ability to use last year's assessments, with a lag, so that we can do the consultation and make the adjustments.

K. Jones: On section 2(a), could the minister tell us whether poles, conduit structures and other physical plant related to the support structure are also included in this?

Hon. E. Cull: Cable lines get treated the same way as other communications lines. I'm not quite sure what you mean by conduit structures. It covers the lines, towers and similar property. I guess the important answer is that there is no change in how things are assessed. Nothing is being added to or subtracted from what is actually assessed for tax purposes; it's the way that assessment has been applied to various jurisdictions.

K. Jones: Just for clarification from the minister, I'll ask the question again. Does this taxation change cover and include poles and conduit structure; that is, support structure for cable?

Hon. E. Cull: Those types of properties are included now, and this will not change that.

K. Jones: The assessment is presently based on the average current cost. Is that correct?

Hon. E. Cull: Yes, that is correct; it is based on cost.

K. Jones: Could the minister tell us what that means?

Hon. E. Cull: The Assessment Authority attempts to obtain the replacement costs for the various properties, and then subtracts depreciation.

K. Jones: The minister says that average current cost is the replacement cost. I understand that there is a proposal being put forward to go to replacement cost, but I'm not aware that this is actually replacement cost. I think it's calculated on a different basis.

Hon. E. Cull: The Assessment Authority uses the costs reported by the cable company, and that should not be different than the replacement costs.

[ Page 16920 ]

K. Jones: I understand that this is intended to bring it to the same process used by the telecommunications companies. Is the minister saying that it's different from what they're being billed, then?

Hon. E. Cull: Currently other telecommunications are dealt with by the commissioner's rate process, and that's why we're moving from a folio basis to commissioner's rates.

K. Jones: Could the minister tell us what the difference is between the average current cost of improvements and what she's using as a term?

Hon. E. Cull: I'm not sure why the member is using the term "average current cost." It's my understanding that the Assessment Authority obtains the costs from the companies, which are the replacement costs, and subtracts depreciation.

K. Jones: I'm using that terminology because that's the terminology that I'm told the Assessment Authority is using.

With regard to subsection (b), could the minister explain what current method of assessment is used in this regard? How is this going to differ from the current method?

Hon. E. Cull: Right now the existing provision requires that the assessments be based on current-year costs, and this subsection replaces the existing section with a provision that requires that commissioner's rates be used to assess the linear property, and that they be based on the actual costs of the property in the preceding year.

K. Jones: I understand that the current assessment is done on the previous year's average value being inflated for the inflation that occurs. That's the actual basis under which it's done. Could the minister tell us why this change was required?

Hon. E. Cull: The way the member described it is essentially the way it's done.

K. Jones: So what we'll be having is that the 1996 roll will be using 1994 values under this new legislation. Is that correct?

[3:15]

Hon. E. Cull: That is actually how it will be done, yes.

K. Jones: Is the minister aware that this would probably constitute a drop of 6 percent to 7 percent of the assessed value?

Hon. E. Cull: By going back one year, there is some drop in assessed value, and that will obviously be reflected accordingly in the rates that are set. As we canvassed earlier, the reason we're going to previous years is to deal with the requirement to give sufficient time to consult with the municipalities with respect to the adjustments.

K. Jones: Why is it necessary for the municipalities to be consulted in this situation when the valuations are determined by the utilities themselves?

Hon. E. Cull: When we get to a later section in the bill, there are adjustment factors which are established, and we have agreed to consult on those adjustment factors.

K. Jones: Could the minister tell us what references she is making to further parts of the bill regarding adjustment factors, and why they were not included with this?

Hon. E. Cull: The section is in section 3 of this bill, and it's section 27.1(1)(b).

K. Jones: Could the minister tell us the reason for this adjustment factor?

Hon. E. Cull: I would suggest that we move on to section 3 if we want to talk about the adjustment factors.

L. Fox: I just want a bit of clarification. I'm a little confused by some of the minister's earlier answers with respect to the questions asked by the member for West Vancouver-Garibaldi. The minister, if I heard her correctly, seemed to suggest that there wouldn't be any additional taxation privileges on cable television, but if I look at subsection (1.2) within the existing act, it reads: "For the purposes of this section, telecommunications does not include cable television." Now that is being repealed by section 2(a). Given that there's no further action which excludes cable TV from being part of the assessment roll, one can only conclude that anything to do with cable TV delivery is now available for the assessment roll and will therefore become taxable. Can the minister tell me whether that is correct, or whether the answer given to the member for West Vancouver-Garibaldi was correct?

Hon. E. Cull: The earlier answer I gave is correct. Cable companies are currently taxed. All we're doing is moving them into the same system as other telecommunications. We're putting them on the commissioner's rates, and we have done analysis to be assured that this will not affect the aggregate tax that is collected from cable companies.

K. Jones: With regard to that transferring of taxation purposes, is there any change in the amount of taxation under the two different methods?

Hon. E. Cull: No.

K. Jones: Could the minister tell us why there is a necessity for the change?

Hon. E. Cull: One of the intents of the amendments is to bring all the linear rates into conformity with one another so that we treat them in the same fashion. We go to the commissioner's rate, as opposed to the different systems we have now.

K. Jones: Could the minister tell us what the status of this would be with regard to joint use?

Hon. E. Cull: All this section does is allow the cable television lines to be assessed using commissioner's rates. There is no change or impact with respect to joint use.

K. Jones: In many cases the coaxial cable lines to the cable companies are placed by the telephone company for the cable company. Are they assessed, then, as telephone company facilities or cable company facilities?

[ Page 16921 ]

Hon. E. Cull: It's based simply on ownership. If the cable company owns the lines, regardless of who placed them, then they are under the current system, which is different from that for other telecommunications. Once this comes into effect, it won't make any difference, because they will all be treated in the same fashion.

K. Jones: In the case of a cable company renting pole space on a joint-use pole, how would that be assessed?

Hon. E. Cull: If we're going to get into detailed technical questions about how the Assessment Authority does its job in this case, we're going to run into difficulty, because I don't have Assessment Authority staff here. There are technical matters where property taxes are assessed on a lessee basis, and they are sorted out by the staff.

Interjection.

Hon. E. Cull: I heard one member say: "Get the Assessment Authority staff here." This section that we are debating right now does not change the manner in which the Assessment Authority does its assessments. I suppose that if the member were interested in getting into the details of the Assessment Authority, he had the opportunity during the minister's estimates.

K. Jones: This is really quite important, hon. minister, because it's a question of whether there is double taxation for the same piece of plant. The poles....

Maybe I could give you a little explanation of how these things operate; maybe that would help you to understand the process. A joint pole may have 40 percent of the pole owned by the telephone company and 60 percent of the pole owned by maybe B.C. Hydro. Is the section of pole that is owned by B.C. Hydro included in the assessed value? And who is it assessed to?

Hon. E. Cull: Well, there is no double taxation. The Assessment Authority sorts it out by ownership or by lessee and ensures that property is only taxed once or, if there are multiple users, that it is apportioned accordingly.

L. Fox: Just one quick clarification. The minister, in an earlier response to me with respect to section 2(a), which repeals subsection (1.2), suggested that all it did was change the classification, putting all the utilities, as I understand it, within the same classification for assessment purposes. Can the minister tell me what classification cable television presently is in, so that we can understand what this move means?

Hon. E. Cull: It is currently in class 2. It will stay in class 2, but now cable television lines will be treated in exactly the same way as the rest of class 2 is treated -- all the other linear properties such as rail or other telecommunications.

C. Serwa: That's very interesting, but it doesn't tell us very much. They're in class 2, and they'll be treated the same as all the others. It was my understanding that there was a statutory rate per kilometre for rail lines, phone lines or hydro lines, for example.

The other thing is that obviously other communication lines -- historically, telegraph or telephone and hydro -- have been classified as a public utility. There was certainly some consideration with respect to the linear assessment rates, bearing in mind that they are a public utility. I fail to understand how the telecommunications lines are in the same form as a utility such as hydro or the other telephone lines.

Hon. E. Cull: Generally speaking, the linear property includes rail, gas lines, hydro lines and telecommunications lines, including cable television or telephone lines. With the exception of cable television, the rest of this category has been using what is called commissioner's rates. The cable lines have been excluded, and they have been done on a folio system. We are bringing cable television into line with the rest of its class. We are moving it to the same system that everybody else is on -- determining the aggregate assessment and then averaging it over the system so that the same amount of money is collected. The cable companies are treated on the same basis as the others.

C. Serwa: Perhaps the minister could clarify the folio system as opposed to the linear system. Will the cable companies be paying the same rate on the linear system? I'm fairly familiar with the taxation system, but I'm not familiar with what the minister is referring to as a folio, other than that the folio is based on an assessed rate, perhaps, like all other property is, whereas on the linear basis there is a statutory rate based on the linear basis.

Hon. E. Cull: The folio system takes the value of the property within each folio and assesses it, then moves on to the next one, and does each piece as it appears in a folio. The commissioner's rates take the system as a whole and apportion it back to folios, rather than doing it individually, chunk by chunk.

[3:30]

C. Serwa: I'm listening very closely to what the minister says, but in actual fact the statutory rates that have been established bear no relationship to the cost of the linear rates of those structures, be they underground pipelines, gas lines or rail lines. There is no comparison to the linear rate and the actual cost of construction. That's where the minister is losing me, because the calculation the minister refers to was never made. They were sort of arbitrarily assessed rates based on a linear basis, bearing in mind the nature of the public utility and the fact that the consumer of the services is also the payer of taxation. So that's why it was established. If the rates go up, we are again asking the taxpayer to fork out more money, albeit into a different pot; nevertheless, it's still forking out more money to the provincial treasury.

Hon. E. Cull: I believe what the member is referring to when he's talking about the linear rate is the commissioner's rate. The commissioner's rate is based on the best attempt to get market value, and market value is best reflected by the cost. The system being changed here is simply going from perhaps what I put in layperson's language as a chunk-by-chunk piece of this to looking at the system as a whole, determining the market value or, in this case, the cost, and then apportioning those back based on that.

K. Jones: Since section 2(b) is going to be giving cable, tel, rail and pipeline companies a gift of 6 to 7 percent, could you tell us what B.C. Rail's one-time cost saving will be as a result?

[ Page 16922 ]

Hon. E. Cull: Zero.

K. Jones: How can the minister say zero when the current method puts the inflation factor in from last year to this year and this is rolling the assessed value back to last year? There has to be a loss in this.

Hon. E. Cull: B.C. Rail doesn't pay property tax.

K. Jones: Could the minister tell us whether B.C. Rail pays any value on their telecommunications operations?

Hon. E. Cull: I'm not aware that B.C. Rail pays taxes on that, either.

K. Jones: So B.C. Rail is not paying any taxes for its Westel operations, then. That's what the minister is saying. That means they are competing in the marketplace with other telecommunications companies, and yet they have an advantage in not paying taxes. Sounds like a good deal. I hope the minister is going to rectify that.

Could the minister tell us, with regard to these evaluations, what the benefit is to, say, the various pipeline companies? How much are they going to benefit? Has the minister assessed the calculations for each of the utilities and determined how much of a cost saving they will make this one time this first year?

Hon. E. Cull: Even for those linear properties that do pay taxes, we expect to see very little benefit, as you put it, to the taxpayer in this case, because most municipalities adjust their rates as the assessment changes. There is a relationship between rate and assessment, and assessment doesn't necessarily tell you what you will pay.

K. Jones: The rates for these are fixed by the municipalities. They can't just adjust them up and down based on what the assessed value of the property is. They have to stick within the limitations that they're working under.

Hon. E. Cull: The tax rate is set by the municipality on an annual basis.

K. Jones: Are you talking about the tax rate for commercial property?

Hon. E. Cull: No, for all classes.

K. Jones: The tax rate is set for all classes; that's right. It's a flat tax rate, whether it's a warehouse operation or utility lines. Therefore you're not going to accommodate this adjustment in this piece of legislation to give the same return in this tax year as you had last year or more correctly, what you would have expected to get this year. You would have expected to get about 6 to 7 percent more return this year. This legislation will drop it back to the previous year's assessment and therefore increase the inflation factor, which is usually built into the assessed value but will not be there.

Hon. E. Cull: There are nine classes of property, and municipalities have the authority to set the rate independently for each of those classes. It's not one rate across the classes. It's one rate per class, and the municipality sets them on an annual basis.

R. Neufeld: I want to go back just to clarify one thing about the commissioner's rate. The minister talked about taxing the whole and then apportioning it. Can the minister tell me how you apportion it? Is it apportioned in exactly the same way as the tax he would have received by doing it chunk by chunk? Or are there going to be some losers and some winners here?

Hon. E. Cull: Yes, in essence, it will have no impact on the current jurisdiction. It will be apportioned back on a linear basis per kilometre within each folio.

R. Neufeld: When the minister spoke recently about municipalities in relation to the question from the member for Surrey-Cloverdale, using the variable tax rate to get the same dollar rate is fine. But in my constituency and in a lot of constituencies, I think, when we're talking about pipelines, what comes to mind right away is that regional districts cannot use the variable tax rate. To my knowledge, they don't have the authority to use the variable tax rate. This is going to make a tremendous difference when you think about the pipelines that Westcoast Energy and all the oil companies have in my constituency alone. It amounts to hundreds and hundreds of millions of dollars' worth of assessment. It's phenomenal how much value is underground, and there is going to be a serious impact if they are unable to use the variable tax rate system.

Hon. E. Cull: Staff have done the analysis on this. While theoretically you're correct that there is some impact, the impact is extremely small -- in the order of 1 or 2 percent, even in areas like yours.

L. Fox: I certainly want to ask a couple of points of clarification. Before I do, I would like to ask the House for leave to make an introduction.

Leave granted.

L. Fox: I just noticed in the gallery a former northerner who now lives on the Island. He was very instrumental for years in promoting the Northern B.C. Games. It's with great pleasure that I introduce Jim Reid to the House, and I ask the House to make him welcome.

I think it's important for us to understand the difference between assessment and taxation. As long as the change in classification that takes place under section 2(a) does not move that assessment from one taxation class to another, that may be at a different rate of taxation than in real or true terms. Even if there is a change in the assessment within that classification, municipalities will do what they do normally, as I think the minister expressed earlier, and will adjust the taxation rate so that they collect the same dollars from within that classification. So if the minister can assure me that the actions of section 2(a) do not move the assessment of the television cable lines or those assets from one taxation classification to another, then I'm assured that indeed there would be very little impact in respect to municipalities.

Hon. E. Cull: As I said a minute ago, I acknowledge that there is some very small shifting. But even in an area like the North Peace, where there's considerable linear property under taxation, the percentages would be very small -- in the order of about 1 or 2 percent.

[ Page 16923 ]

I think this may be an appropriate time -- and I realize we're dealing with a very specific section of the bill -- to bring us back to the principle of what we're trying to accomplish here. Rail property in British Columbia is, on average, taxed at about $12,000 per mile, compared to $880 in Alberta, $1,300 in Saskatchewan, $1,300 in Manitoba and $2,600 in Ontario -- and I can go on. The highest tax rate per mile for rail taxation after British Columbia is in Nova Scotia, and it's $4,000.

The reason we are addressing this here is the threat to the rail industry that has been brought about by the federal government's elimination of the western grain transportation assistance and the fact that on a tax fairness issue, British Columbia's property taxes are clearly out of line with our major competitors. The members are constantly requesting that we look at tax fairness and competitiveness with other jurisdictions around us, and that's what this is all about.

L. Fox: I look forward to that debate under section 3. I'm going to restrict myself right now to coming back and asking for the assurance of the minister that the actions of subsection 2(a) do not move the assessment of cable companies from one taxing category to another and therefore reflect a rate change within that category. If I can have that assurance from the minister, I think we can all be satisfied that we'll deal with the impacts and the rationale behind why this change is needed under section 3.

Hon. E. Cull: I can give the member that assurance.

D. Mitchell: I've been listening to this interesting discussion. I just want to seek confirmation from the minister that her responses to the initial questions I asked when we began section 2 of this bill still hold, given the discussion that's taken place. The two questions dealt with the issue of cable now being assessed and whether or not there was a potential for any impact on municipal taxation that could, in turn, be passed onto municipal ratepayers, and with the issue of whether or not having the valuation backdated one year might again have an impact on municipal taxation, which might pass a burden back to the residential taxpayer. The minister said no, categorically, to both of those questions initially, but I wonder if her answer is now somewhat qualified, given the discussion we've had in committee.

[3:45]

Hon. E. Cull: There are two parts to what the member has asked. The tax paid by the cable companies will not change in terms of aggregate amount being paid, so there's no impact on the cable users in terms of additional cost being passed onto them.

With respect to municipalities, if the assessed value is somewhat lower because of the one-year time lag, municipalities have access to the variable tax rate to be able to offset that. As the member for Prince George-Omineca said, you have to put the two together. To understand taxation, you need to know the rate and the assessed value, and municipalities obviously have the ability to adjust.

C. Serwa: Getting back to the telecommunications companies and cable television, first of all we have an assessed value, perhaps set by the Assessment Authority of B.C. on whatever basis. They have a variety of bases for describing assessed value. Then the provincial government comes on the scene, and they have a set rate, as the minister has alluded to -- nine different classes or perhaps nine different rates, depending on the class. The municipality then comes in with what is fundamentally a variable rate that is also part of the tax picture, which is a mill rate set annually, depending on their budget. They strike the mill rate annually. Working all of that out, that fundamentally results in the end tax that the cable company, let's say, is going to have to pay on its assets.

What I fail to understand at the moment is the reason for this particular section. When the minister says we're bringing them into line with the other telecommunications companies, I don't understand what the initiative is. If it's revenue-neutral, what does it do? What does it facilitate? That's where I have difficulty understanding why this particular section is in the act.

Hon. E. Cull: This is consequential to the changes that we're making with respect to the railways. As I was listening to the member.... I'm not sure whether there is some confusion about the commissioner's rate. Generally speaking, there's assessed value and then the tax rate, and those two in combination equal the tax. The commissioner's rate is the assessed value. I wasn't sure whether there might be some confusion because the word "rate" is used in that case. The commissioner's rate is not the tax rate, in other words. There's the commissioner's rate, which is the assessed value, times the tax rate for the class, which equals the tax that ultimately comes about.

As a result of the changes that we're making in other sections of the bill, which we'll be discussing in the future, we are cleaning up some of the things in the existing linear rate categories right now. The cable companies are being handled in a manner that is different, so this is a consequential amendment to the plan changes. It allows them to be treated the same way as everybody else in their class. It is simpler, more rational and makes better public policy than having this anomaly where the cable companies, for various reasons, have been treated differently.

I have to say that I've clarified this a number times with staff. There is no effect on the overall taxation except for a very tiny percentage. This is not an attempt to shift the tax, raise the tax or lower the tax; it's simply a matter of trying to bring those types of properties in this category into conformity with one another so that it's a simpler and more transparent system.

R. Neufeld: I just want to get a little more clarification. The minister talked about 1 or 2 percent. I'm not trying to be difficult, but I just want to be sure in my mind. I'm not sure what the assessment is in the constituency of Peace River North, for instance. That will affect two major communities. I have no idea, but the 1 or 2 percent.... Let's say it's 2 percent when the minister talks about regional districts, because they don't have the avenue of using the variable tax rate. Is the 2 percent less that those regional districts will collect applicable to my region, or is that on a provincewide basis? On a provincewide basis, it could be 8 percent in my constituency and less in others. If the minister can assure me, with her staff, that the constituency of Peace River North may lose 1 percent because of the pipeline issues and everything, then I can go from there. But if it's an average across the province, I have some trouble with it.

Hon. E. Cull: It's not across the whole province, so you don't have to become concerned about adding up various 

[ Page 16924 ]

percentages and coming to some number like 8 percent, which would be a concern. In a region like yours, the impact would be, as I said, very small: on the order of 1 or 2 percent. The reason is that the class itself is a very small portion of the overall tax base. The impact of making a small change based from a one-year lag on an extremely small part of the overall tax base doesn't have very much impact by the time you've got to the amount of revenue that is collected from property taxes by the Peace River Regional District.

R. Neufeld: Secondly, I just want to ask a question about Westel. I'm under the impression that Westel pays taxes, but it's 100 percent owned by B.C. Rail, and the minister did say that B.C. Rail didn't pay any taxes. Does Westel pay taxes on all the facilities it has now for the service that it provides in British Columbia?

Hon. E. Cull: I can't be absolutely precise on this one. I can tell you that Westel has very little property. So in terms of what would actually be taxed, if it could be taxed, it would be very little property. B.C. Rail does pay grants in lieu of taxes for some properties. I'm just not certain whether any of those properties might be Westel properties. But again, it would be a very small, very minor amount.

R. Neufeld: My understanding is that the whole communication system of B.C. Rail has been turned over to Westel. I'm not too sure exactly how that works, but that's my understanding from Westel. So there is a significant amount of assessment; there obviously has to be. There's telecommunication all the way to the end of the B.C. Rail line, which is in Fort Nelson, so there must be a fair amount of assessment.

Would Westel pay taxes on that assessment directly to the government? Or would they be apportioned that amount from B.C. Rail -- and government gets nothing or B.C. Rail pays nothing, so Westel really doesn't pay any taxes in the end? We canvassed this in estimates. We were getting a different answer then than what we're getting now. It's confusing.

Hon. E. Cull: I apologize; it is confusing. Unfortunately, I'm not the minister responsible for B.C. Rail. I am carrying this section on behalf of the Minister of Municipal Affairs, who is not here.

It is my understanding that the property used by Westel is still owned by B.C. Rail and therefore is not taxed. So you're probably right, they probably don't pay any taxes. Or if they do, they pay very little tax. As you know, it's an issue that the Union of B.C. Municipalities has raised with me with respect to B.C. Rail, and that is a matter for future legislation.

D. Symons: I'd like to back up a few questions, because an answer you gave to the member for Peace River North caused me some concern there. That was the fact that you said the overall effect on municipal taxes would be very, very small. I think you mentioned the effect of 1 percent or something -- because, you carried on, of the fact that the telecommunications thing there would be a very small proportion of the tax base for that community.

I'm reading into that answer, then, that the effect upon the telecommunications portion of that municipal tax could be greatly affected. When you dilute that down by the total tax base, you are really saying that if it has a minute effect on the total tax base, it could be having quite a large effect upon a very small portion, which is the telecommunications portion, of that tax base. So you're basically saying yes, the taxes that could accrue to a community from that particular base because of these changes could be substantial.

Hon. E. Cull: The impact, if there is any, is as a result of section 2(b), not 2(a). But in the municipalities, because of their ability to set the tax rates, there is likely to be absolutely no impact whatsoever. In regional districts, where they don't have the variable tax rate because of the small contribution of that class to the overall tax base, there isn't much of an impact there. Now, you're right that if you looked at the impact within the class, it would be larger than the 1 or 2 percent. But the overall impact by using the previous year is extremely small by the time you've come to how much tax is actually collected and available to support services.

D. Symons: I have just one further question, because much of this affects section 27 of the Assessment Act, which is titled "Valuation for certain purposes not actual value." Three or four times in your answers you used the term "the assessed value." It appears to me that section 27 in the Assessment Act deals with things that will not be taxed on the basis of the assessed value but on some other basis, and I'm just not clear on it. Prior to some of your answers, I thought I was, but I'm not quite clear when you talk about assessed values. Doesn't section 27 deal with something other than assessed values?

Hon. E. Cull: The commissioner's rate is simply the way that you determine or approximate the assessed value.

C. Serwa: I thought I knew a fair bit about this land taxation thing, but I'm having a bit of difficulty with the commissioner's rate. If we go over the whole picture, the value of an asset is determined either by the B.C. Assessment Authority or by a statutory valuation that is placed on the books, and it may be so many thousands of dollars per kilometre. In any event, that fundamentally establishes the value.

It was my understanding that the commissioner's rate developed the value of the property for taxation purposes. You didn't tax the assessed value fully; you taxed a portion of it. Following that, the province has a tax rate for various classes of properties, and that factors into the tax bill as one of the factors in a multiplication challenge. Then there are the variable rates that come in from the regional district, which is certainly a player in this, and the mill rates in the case of organized areas such as municipalities. Fundamentally, all those factors eventually wind up to be your tax rate, and everyone is a sort of partner in the taxation process, be it the provincial government, the regional district or the municipality.

[4:00]

The question I want to ask the minister is about the basis of B.C. Rail properties that are leased out. It's my understanding that leased properties are taxable from the lessee's point of view. If you have an ag lease, you pay taxes on the assessed value of that ag lease. If you have leased land that you put your manufactured home on, for example, you pay taxes not only on the manufactured home but also on the leased land you occupy. I fail to understand how the telecommunications arm of B.C. Rail is able to evade taxation when it's utilizing leased land.

[ Page 16925 ]

Hon. E. Cull: The member does indeed understand the property tax system quite well, as I heard him explain it, and the way he has explained it is correct. The confusion has arisen around Westel Telecommunications, and as I've admitted, I'm not an expert on what their property is, but I have now had a note sent in by some staff who are familiar with the B.C. Rail situation. They lease some property, and when they do, they pay tax on the leased property. It's a very small amount. They don't own much property, and therefore they don't pay tax on any of the property that they own.

Essentially, there's the answer to that. They don't have much property; they don't pay tax on owned property; there are some leased properties; and they do pay, as you have outlined, in terms of the general principles of property taxation.

C. Serwa: This is perhaps one last question. In this past year there was a tremendous rate increase for remote communications sites. I don't know if the minister is aware, but the rates have increased very dramatically -- apparently 400 percent or 500 percent, which is a very high increase in rates. I presume they will also be taxed on the fact that they lease these remote communications sites from the Crown. Can the minister advise me whether that same increase is attributed to Westel, for example?

Hon. E. Cull: We're now well beyond the bill, but you're asking about Crown land policy, and that policy would apply to anyone who leases it. It is not treated differently for different lessees.

K. Jones: In reference to your comment about the adjustments, could the minister tell us the ulterior motive of these amendments? There are adjustment factors relating.... Section 3, section 27.1(1)(b), says: "prescribing adjustment factors for property of a railway corporation." Regulations can be put forward by cabinet to provide that. What's the real reason that this legislation is coming in, considering the fact that there's a potential for some loss in this process?

[H. Giesbrecht in the chair.]

The Chair: On a point of order, the member for Prince George-Omineca.

L. Fox: I recognize that because of the nature of this bill we're going to allow pretty wide-ranging discussion, but section 2.... That question is more appropriate to section 3 than section 2. I would just bring that to the attention of the Chair.

The Chair: I think the standing orders do say that debate at committee stage should be strictly relevant. So we should observe that, and I would urge all members to do so.

K. Jones: I am rising on a point of order to counter the previous statement. This is relevant. It is the intent of the section we are debating at the present time that we're requesting. I just gave a reference to the next section for clarification, to help the minister give her real motives in regard to the bringing in of this legislation.

Hon. E. Cull: I tend to agree with the member for Prince George-Omineca on this one. So if we want to talk about adjustment factors, I'll wait until we come to section 3.

I have stated on a number of occasions what section 2 does. Subsection (a) deals with moving cable television lines on the same basis as the rest of the linear properties in their class, and subsection (b) deals with using last year's cost instead of current year's cost so that we can have the appropriate time for consultation.

K. Jones: You've given us the statements that are already in the bill, with the exception of the consultation requirement. But the consultation requirement with the municipalities isn't required in this process, because the municipalities aren't really involved in the determination of the assessed value. The assessed value is information submitted to the Assessment Authority by the various utilities. They're the only people who know what the plant amounts to. The Assessment Authority has no way of measuring the amount of plant there. Only the records of the utilities themselves can tell you what the plant is. So what's this talk about needing an evaluation period?

Hon. E. Cull: The question of adjustment factors comes up in the next section, and I'd be happy to get into the adjustment factors to explain what they are. All I can say with respect to using the previous year is that subsequent sections of the act do require us to do consultation, and this allows time for that consultation to take place.

[F. Garden in the chair.]

K. Jones: What is this other factor for which evaluation is required that you were saying is going to come up further on in this bill? What's this new item that you're saying we'll have to...? In addition to the prescribed adjustment factors, you said that there are some other factors that require an evaluation period. What is that relating to?

Hon. E. Cull: The adjustment factors that are in section 3 of the bill.

K. Jones: I'm sorry -- could the minister repeat herself?

Hon. E. Cull: I think I have been repeating myself for the last half-hour.

The adjustment factors are in section 3 of the bill, and those are the factors I was referring to.

Section 2 approved.

On section 3.

D. Mitchell: Hon. Chair, I have an amendment on the order paper in my name, and I'd like to move that amendment.

[SECTION 3, Assessment Act, proposed new section 27.1 (3) be amended by adding after the words "Union of British Columbia Municipalities" the following words, "and affected municipality".]

On the amendment.

D. Mitchell: I'd like to speak to it for a moment, because I think section 3 of this terrible bill we're dealing with.... Let's face it, this omnibus kind of legislation is not the ideal way to 

[ Page 16926 ]

deal with legislation in the House. Section 3 arguably should be a separate bill in itself, possibly with section 4 dealing with B.C. Rail. But we'll deal with it here as well as we can. I would predict that we're going to have a bit of debate on this.

Section 3 deals with special rules for railway property in the province. I think the section is trying to achieve a balance between having an efficient and competitive railway industry in the province and at the same time, hopefully, not penalizing local communities in which railways operate -- most communities in British Columbia -- by making sure that they get their fair share of local property taxation from those railways.

Hon. Chair, this is not an easy balance to achieve. I think it's going to be up to the minister to defend these amendments to the Assessment Act, and, in particular, to tell us in this committee today whether that kind of a balance has been achieved. I can say for the benefit of other members of the committee that this issue was canvassed during the estimates of the hon. Premier, about a week or so ago in this assembly. At that time, the Premier made a commitment that these changes to the Assessment Act would not go through until there was at least one further round of consultation with the UBCM and with the municipalities affected. My compliments go to the hon. Premier for this one small mercy.

Section 3 adds a new section 27.1 to the Assessment Act, and section 27.1(3) says, for the record: "The Lieutenant Governor in Council may only make a regulation under this section after the minister has consulted with representatives of the Union of British Columbia Municipalities respecting the proposed regulation." That's the concession I think we achieved, hon. Chair, at the time the Premier's estimates were reviewed in this assembly.

We have to ask how significant that concession was, and what consultation means in the context of this section. The consultation doesn't seem to relate to the overall policy of the government, necessarily, with respect to special rules for railway property. It seems to relate to the regulations that may be made pursuant to the policy being set, and I'd like to seek some confirmation of that from the minister. I wonder if I could get the minister to confirm that this is the case.

Hon. E. Cull: That's correct.

D. Mitchell: I appreciate that clarification. That concern has been raised by the Union of British Columbia Municipalities.

Another concern that might exist with this section the way it is drafted is that the consultation would take place with representatives of the Union of British Columbia Municipalities, but not necessarily with the affected municipalities directly. I wonder if there is any precedent. Maybe the minister could tell us where else in a B.C. statute is an organization like the UBCM enshrined in an act as an intermediary or perhaps a messenger. I'm not sure the UBCM would feel comfortable in simply being the messenger for potentially bad news to the municipalities, which make up the membership of that organization.

I know, for instance, that the UBCM has been concerned about this issue for some time; there has been a task force looking into it. I think it's important for members of the committee to understand that these special rules affect the property taxation that will be paid by all railways in the province. In particular, it affects those communities along the B.C. Rail line, which we will deal with in the next section of this bill, because those communities have never received property taxes from the Crown corporation, B.C. Rail.

The Minister of Finance brought in a budget earlier in the session. With respect to railway property taxation, she said in her budget report, "The government recognizes that a competitive railway infrastructure is essential to the economic well-being of the province, and in particular to the province's seaports," and it goes on from there.

I think that every member of this assembly would agree with the statement in the Minister of Finance's budget that we need to have a competitive rail industry in B.C. The question is: how do we achieve the balance to ensure that communities get their fair share of property taxation, whether they are along the B.C. Rail line...? If you are a community along the B.C. Rail line, the hope and expectation has been that for the first time in history you're going to get some property taxation or maybe a grant in lieu of property taxation, or something. But now we find out that -- whoops! -- sure enough, we're going to get that, but it's going to be much less than would otherwise be the case. It's not going to be full property taxation.

The UBCM has expressed a concern directly to the Premier about the potential loss of approximately $20 million in revenues to municipalities as a result of this kind of an amendment. I know that in the last few days the government has received letters and petitions on this matter from every community in British Columbia affected. Every member in this assembly will have received copies of petitions and letters from mayors who are concerned about this act and have written directly to the Premier.

It's too long a list to read into the record, but I'd like to read just one paragraph of a letter written by one mayor in my constituency, the mayor of Squamish, Her Worship Mayor Corinne Lonsdale. In a letter to the Premier on July 5 of this year -- and I think this reflects the kind of frustration that's been expressed by every community in the province affected by railway taxation -- she said:

"Your government has encouraged consultation processes and set a standard to bring all stakeholders to the table to define problems and develop solutions. It will be disappointing if this established process is not applied in this case.

"We support the UBCM's proposed alternative to proceed with a more cooperative process that would: seek local government recognition of the general competitive situation of the railways and the place of property taxes in that situation; and explore options that could be presented at the October 1995 UBCM convention for consideration and recommendation."

I'm not sure if the minister will agree that we have time until the October 1995 UBCM convention. One of the concerns expressed by the hon. Premier during his estimates was that we don't have much time. We've got to act now in the interest of having a competitive rail industry and in the interest of being able to compete with our American competitors and a deregulated rail environment throughout North America. I think it's important to know how much time for consultation we do have, what kind of consultation is going to take place, whether that consultation is going to take place directly with the UBCM as an intermediary or whether individual municipalities will also be affected, so that the UBCM is not placed in the unenviable position of simply being an intermediary or a messenger to pass on bad news.

[ Page 16927 ]

Those are the kinds of concerns that I think we want to address in this debate. This is an important section of the act. It's one of the most controversial sections in this terrible, horrible omnibus bill that we're dealing with, Bill 55. In second reading debate I referred to it as a dog, and I was criticized for criticizing dogs. That's true, and I don't mean any insult to dogs.

[4:15]

I would appreciate the minister's comments on not only the amendment, which I hope she's going to accept, because this is a modest improvement.... It doesn't affect the intent of what the government is trying achieve, but it does allow for more meaningful consultation, more in the spirit of what I think the hon. Premier committed to during the review of his estimates just a week or so ago in this assembly. The amendment says that the proposed new section 27.1(3) of the Assessment Act be amended by adding after the words "Union of British Columbia Municipalities" the words "and affected municipality" -- not "or," but "and" affected municipality. The only thing we are saying here is that the consultation on regulations passed pursuant to this amendment to the Assessment Act will involve not only representatives of the umbrella organization known as the UBCM but also, in the case of an individual municipality that is affected, representatives of that municipality.

I think it's the least we can do. I don't know if this amendment is going to satisfy the concern of achieving that balance between having a competitive rail industry and ensuring that municipalities are not penalized. We've got to try to achieve that balance, but at the very least, I hope the minister will agree with this amendment to ensure that the individual affected municipality will also be directly involved in the consultation process on the regulations.

Hon. E. Cull: I will be opposing the amendment, but let me first of all answer some of the specific questions around the consultation and then touch briefly upon the more general issues the member has raised.

First of all, the Premier has given his commitment that there will be consultation with every affected municipality, and in fact those discussions are already underway. The Union of B.C. Municipalities is cited in the legislation. You asked if there were other examples of legislation where there was a requirement of an organization to consult on behalf of its members, and the most recent one that comes to my mind is the Local Government Grants Act passed last year in this Legislature, where we are required to consult annually with the UBCM with respect to the establishment of the unconditional grants. So there is a precedent for it.

This has been discussed with the UBCM, and it is being discussed with individual municipalities. I think it's quite clear that there will have to be considerable discussions. That's why we've left ourselves such a large period of time to deal with the municipal issue, so as to be able to resolve all the concerns. I can say that in the last year, in the prebudget consultations, there were three separate rail issues brought to my attention. They didn't all necessarily represent a united interest of opinion. One of the things we've asked the Union of B.C. Municipalities to do is work with those communities to start to sort out some of the priorities. Because if you can't do it all and you can't do it all now, there has to be some agreement on what the priorities will be. The Union of B.C. Municipalities has shown leadership in that regard.

The member talked about an amount of $20 million. I believe it will be considerably less than $20 million. But, in any event, it will be cost-shared between the province and the municipalities on a roughly fifty-fifty basis.

The real issue is not the reduction in taxes that will be paid to municipalities or to the province by the rail companies. The real issue is the consequence of doing nothing in this regard. Believe you me, as the Minister of Finance, I always look very closely at any suggestions that we should collect less revenue, particularly from a source like this. But the facts are compelling. British Columbia's property tax rate for railways is horrendously out of line with our major competitors. That's the first point. Just on a tax fairness issue, we look at that for commercial and industrial uses. We try to be competitive with respect to income tax and other tax rates, being very conscious of the fact that one of the things that supports a healthy economy here in B.C. is making sure that our markets and our businesses can be competitive with jurisdictions around us. So that is a very important matter.

I read the numbers into the record a few minutes ago with respect to the different tax rates. As I said, it's $12,000 per mile tax on rail property in British Columbia, and the next highest is $4,000 -- that's in Nova Scotia, I believe. The whole question of tax fairness is one that I think all parties in this House have spoken to at some point or another. Certainly the business community has spoken to me as the Minister of Finance on many occasions around this issue.

There's also the second issue that is extremely important to us here in British Columbia, and that is the consequence of doing nothing. As a result of having eliminated the western grain transportation assistance, there is incredible pressure being put on those who use the rail system to abandon it and to truck their grain and other products south across the border, and to use the U.S. systems and U.S. ports. That is a significant loss to the western provinces. In British Columbia, CN and CP alone -- without putting B.C. Rail into it -- employ 5,500 people who are making good wages, paying taxes and contributing to their communities. They have an annual payroll of about $300 million. All of that is potentially at risk, and I think it would be foolish to downplay the risk to the rail companies operating in British Columbia.

So we have the tax fairness issue. We have the economic viability issue, which is one that's very important to a number of communities. We talk about the loss of tax revenue to particular municipalities. As I've said and as the Premier has committed to, the Union of B.C. Municipalities and the affected municipalities will be consulted on that extensively. But if you think about the loss of tax revenue and compare that to what would happen if you actually lost the industry in some of those communities, not only would it be a property tax consequence -- which might be quite significant in a place like Squamish or Port Moody -- but it would also have a very significant impact on people who are working, contributing and paying taxes in their community.

The third issue is that the railways have committed, in discussions with the Minister of Employment and Investment, to make significant incremental investments in our province. Again, those investments, which will total over $100 million in the next few years, will be going into communities that are now dependent on rail. They're not going to be making the investments somewhere new; they're going to be reinvesting in communities where they already have investments.

[ Page 16928 ]

I've taken a bit of time on this particular item because I think we're going to be discussing this issue for a bit. But I wanted to put those three reasons on the record.

Interjection.

Hon. E. Cull: The member has just asked: "What's wrong with the amendment?" The amendment doesn't add anything. It gets out of step with respect to the process that we have discussed with the Union of B.C. Municipalities, which is to put them into the legislation and discuss it with them. But I can assure the member that discussions are already underway with individual municipalities.

G. Wilson: During the Premier's estimates, as the member for West Vancouver-Garibaldi mentioned, I and he pressed hard with respect to the Premier's commitment on consultation. The Premier made a very, very specific commitment, and that commitment was more than simply consulting with the Union of B.C. Municipalities. I understand from my conversations with members of their executive that they are quite uncomfortable being put in a position of having to negotiate on behalf of member municipalities. They feel that the precedent being set by this bill with respect to the setting of local tax rates is really quite a bad one.

Nobody argues, I don't think -- at least, I haven't heard anybody argue -- that the issue articulated so clearly by the minister is not a serious one and that it doesn't warrant something to be done. There's no question about that. I think everybody recognizes that. I haven't heard anybody even dispute the figures that the minister is putting out. I think we can agree: yes, this is an urgent situation; yes, we have to do something about it; yes, we must protect the interests of our rail network. But the issue that the amendment speaks to specifically is how we go about doing that. How do we collectively work together to provide an opportunity for each of the local issues and concerns? Believe me, there are many, many local issues and concerns that are only known and properly articulated by the member municipalities. How is that going to be properly dealt with and accommodated for by the government?

The Premier, in his estimates, said that this legislation wouldn't come forward without that kind of commitment. The legislation is now in front of us, and there is nothing in here that commits the government to do that. This amendment effectively puts in draft form what the Premier committed to do in his estimates. That's essentially what it does. It doesn't change the intent; it doesn't say that this section shouldn't move forward with urgency; it doesn't say that there isn't a potential crisis here. It recognizes all of those things. All the amendment does is honour in language in the bill what the Premier has committed to in his estimates.

Notwithstanding the comments from the minister, and with great respect, I think it is incredible that this government could not see their way to approving this amendment, which simply says that the member municipalities will have their individual concerns dealt with by this government on a one-on-one basis, in addition to the consultation that's going on with the UBCM. That's what the amendment does. To deny this amendment is to say that we're not going to talk to the member municipalities other than when we're committed to do so during the initial consultations with the UBCM. I think that is really quite wrong, given the kind of precedent we're setting in terms of autonomy over local taxation rates.

Hon. E. Cull: I disagree with what the member has said. The fact that every piece of legislation in the House doesn't stipulate exactly who consultation will take place with doesn't mean that we're denying consultation. The Premier has given his commitment. So far, the actions of the government are implementing that commitment in meeting with individual municipalities.

I can understand why an organization might be somewhat uncomfortable from time to time, having to represent members who may have diverse and conflicting views. But there is some responsibility with respect to representing those members, and I have asked the Union of B.C. Municipalities to assist me in resolving competing demands on a number of tax issues. I can cite cases where we've had different groups of municipalities say: "This is the number one municipal tax issue. You must deal with this first." The next group comes in and it says the same thing, and then you have the third and the fourth groups.

The Union of B.C. Municipalities has a very valuable role to play in assisting municipalities to sort out their priorities and in working with the government to make sure that we address the issues in order of importance. I have every confidence that the Union of B.C. Municipalities will be able to do this, and that this is a much more productive method of doing it than having each individual municipality approach the government and try to get the best deal for itself, regardless of the impact on other communities.

D. Symons: I rise to speak in favour of the amendment. In spite of the arguments used by the minister, I think there are some problems with it. In January, I think it was -- I go to so many, I'm not quite sure -- I attended a special meeting of the UBCM. They held a subcommittee that dealt with the communities that had some concerns about B.C. Rail and taxation, which is coming up in section 4. Nevertheless, when they wanted to deal with that particular topic, they formed a subcommittee and there was a UBCM group with specific interests in that. What you were saying a moment ago would imply that somehow the communities that may not have a rail line through them are going to have some interest in this. But I think section 3 deals specifically with those communities that have rail service, whether it be CP, CN, B.C. Rail, Southern Pacific, or whatever rail line might be going through them.

[4:30]

With these different rail lines, they are the communities that are going to be impacted by this, and they are the only communities that have to find some way of making up the tax base that may be lost. So they should be at the table. This amendment is asking that they have a voice specifically in their concerns, rather than having an overall umbrella of the UBCM speak to them, where a significant number of people who may be the delegated people to take part in that discussion may not have a vested interest in the topic before them, dealing with taxation of those communities that have rail lines passing through them. So I think it's very important that we do that. Going by section 3, I would note that you have brought in the concept of consultation. I applaud the government for that, but I think you must have full consultation.

I would also note -- while I'm at it, and we'll get to it when we come back to the main motion -- that section 27.1(1)(a) mentions excluding certain things. It seems to be a foregone conclusion as to what these discussions are going to 

[ Page 16929 ]

revolve around. It doesn't seem that we're going to have open consultation about how we attack the many problems facing the railways in B.C. that you referred to earlier, and the unfair taxation that they face right now. That's true, but it seems that you're already laying the groundwork for what's going to be discussed when we get to subsection (1), and we'll come back to that in a few moments.

L. Fox: Speaking specifically to the amendment, let me say that I cannot support the amendment, and I want to give you two reasons. First, this particular section of this bill is such bad legislation that I don't care how you try to amend it, the intent of the legislation is wrong. That's point number one.

Point number two is a very significant point. I'm disappointed at some of the arguments that I hear in support of this amendment, because they draw into question the integrity of the UBCM. I had the privilege to serve on that executive for five years and to serve as a mayor, and so through that process I served for eight years. I'm well aware of the strength that the UBCM has in terms of numbers and the input they have and the pressure that they can place on a government through those numbers. The effect of this amendment would be a divide-and-conquer approach, and I don't think that would serve anyone's best interests.

It also questions whether, in presenting a position on an issue, the UBCM would do due diligence. In my experience, I've seen the UBCM go out of their way. The member for Richmond Centre mentioned it a moment ago when he spoke in favour of the amendment that suggests that the UBCM strike special committees of interest to deal with specific issues. That's precisely what they do. Indeed, they have a huge amount of resources in terms of presenting a united front to bring forward to government.

Firstly, I don't think you can amend this section of the legislation, and we'll get into that debate at some length when we get into the main debate on the section. I don't care how you try to amend it; it's bad legislation that couldn't be improved through any amendment -- and certainly not this amendment. Secondly, we should not question the integrity of a proven and strong structure such as the UBCM.

M. Farnworth: I apologize to the House for missing the earlier part of the debate on this section, but I was in consultation with the city of Port Coquitlam on this very important issue. I have a number of questions that I would like to ask that relate directly to the hon. member for West Vancouver-Garibaldi's amendment.

There's a bit of confusion. I understand the need for this particular piece of legislation. The railway is a large employer in my community, with some 1,000 jobs there. It also takes up about 400 acres and is really the historical reason for Port Coquitlam's existence. The long-term viability of a rail network in this country to ship grain and coal and other products is very important. I recognize the fact that this legislation has come about, in large part, because of the federal government's cutbacks to the Crow rate, which is going to rapidly reshape the way goods are moved.

My question centres around the exact amount of money that this tax reduction involves. There has been some concern that it is $20 million. I wonder if the minister could give me just what the figure is, and of that figure, exactly what percentage would be borne by the municipalities. The current expectation in my own community is that 100 percent of that amount would be borne by the municipality. Could the minister answer that question for me, please?

Hon. E. Cull: The amount is less than $20 million; it will be somewhere in the order of $14 million to $15 million. That will be determined accurately as we negotiate and work with the municipalities. The amount will be borne half by the provincial government and half by the local governments.

Interjection.

M. Farnworth: As I said a few minutes ago, hon. member for Okanagan West, I apologize to the House, which is why I'm asking these questions.

Is that on an annual basis or on a cumulative basis over, say, a four-year period?

Hon. E. Cull: It is on an annual basis. The commitment we've made that is reflected in this legislation is that the province will take the impact initially of our share, and there will be negotiations with the municipalities before implementing the other half of it -- the $7 million or so that would be borne by local governments. We have already discussed with them the options and possibility of transition to the new regime so that the impact on municipalities is phased in in concert with the investment that will be coming from the rail companies.

M. Farnworth: So I can assure the city of Port Coquitlam, for example, that next year they will have no direct impact from the decisions of this piece of legislation if it's adopted and, more importantly, that there will be consultation and we will sit down, either with the community itself or through the UBCM, and negotiate how we can implement this. Is that correct?

Hon. E. Cull: That's correct, and there will be discussions with both the Union of B.C. Municipalities and the municipality of Port Coquitlam.

M. Farnworth: That was one of the answers I wanted to hear, because as the member for Prince George-Omineca pointed out a minute ago, the Union of British Columbia Municipalities is, I think, the forum through which these negotiations should be conducted, and the member municipalities that are directly affected should have a major role in that. Historically, that's the way things have worked in the UBCM. I think that has been a very successful model, so I don't see that being an obstacle in terms of this piece of legislation.

My final comment to the minister, then, is that the city of Port Coquitlam has a number of things they would want the province to examine in the course of the negotiations, and I just want to make the minister aware of them. One is that the province and the municipalities look at redefining railway land to clearly distinguish between rights-of-way and yard land, and also perhaps at considering moving railway properties from class 2 utilities to class 6 businesses, provided that rail yard land would be valued on the same basis as other property within class 6 -- that being local market value.

[ Page 16930 ]

Another idea that the city of Port Coquitlam would like would be to permit communities to continue taxation of railway bridges within property that is class 6 business. I don't expect the minister to make a decision on that, but I do want the minister to commit to discussing ideas and proposals with communities through the way she has already outlined.

Hon. E. Cull: Yes, that's exactly the kind of commitment the Premier has made, and we are willing to discuss those matters with the municipalities.

The Chair: The member continues?

M. Farnworth: One final comment.

The Chair: You did say that it was your last one the last time. We'll indulge you with one more.

M. Farnworth: Thank you, hon. Chair. With that commitment, the minister has addressed, to my mind, the comments or concerns I have in ensuring that we protect our rail industry but don't impact on the communities. We have to take their interests into consideration. With that commitment, I feel that the amendment becomes redundant and that we don't need to support it.

Interjection.

M. Farnworth: The member says that it guarantees.... Well, hon. member, I take the word of the minister that these negotiations will in fact take place.

G. Wilson: Let's be very clear what we're talking about here. We're talking about an amendment that speaks to the regulations. That's what the amendment speaks to. It doesn't talk about the principle of the business; it doesn't talk about the issue and whether or not it's urgent. The amendment speaks to the regulation and the requirement of government to consult with the individual municipalities in addition to consultation with respect to the overall provincial implementation, which they'll do with the UBCM.

With all due respect to the member for Prince George-Omineca, I also have been a member of the UBCM. While I didn't serve on its provincial executive, I was certainly an active member for a little over ten years, so I am fully aware of what the UBCM is doing. In fact, it's in consultation with the executive members of the UBCM, and indeed with member municipalities, that we make this amendment. If the minister is saying that they speak for the municipalities.... They can't come into this chamber, they can't advance an amendment and they can't demand within this chamber that the individual municipalities be consulted on the regulations, and that's what we're talking about. That's what they've asked us to do, and that's what the member for West Vancouver-Garibaldi is attempting to accomplish. So to suggest that we're doing something counter to the UBCM is absolute nonsense. What we are doing is saying that we want to put into this act a commitment, regulation or requirement that the government will in fact consult.

I can tell you, on July 12, just to underscore.... Let me just let the minister know that in addition to a whole list of municipalities that were involved, we had the Regional District of Bulkley-Nechako, the village of Ashcroft, the district of Houston, the city of Port Moody, the city of Armstrong, the Regional District of East Kootenay, the district of Tofino, the city of Kamloops, the city of West Vancouver, the city of Fernie, the Powell River Regional District -- my own community and one that you are very familiar with, hon. Chair -- the district of Salmon Arm, the city of Terrace, the Regional District of Columbia-Shuswap, the village of Cache Creek, the city of Port Alberni, the district of Logan Lake and the town of Golden. We've all got that list. Indeed, so does the government, because this was sent to the Premier and to the hon. minister. And this is the bidding of the UBCM.

So for us not to accept this amendment is to suggest that any promise of this consultation is a very hollow one indeed. And the principle that somehow government is going to be able to interfere in local taxation authority is a very difficult principle for many people to swallow, myself included. I understand why the member for Prince George-Omineca is so agitated. He has a right to be, because we are breaching a very fundamental principle of autonomy on local taxation. I would point out that UBCM doesn't have that authority; it rests with the local municipality, and that's where it should rest. That is why the amendment should be passed: so that this government is committed, on the regulations, to sitting down with those individual municipalities and working out what those regulations should be.

D. Mitchell: I was listening to the minister's response to the member for Port Coquitlam a little bit earlier, and she seemed to indicate that the kind of consultation that is contemplated by this amendment would take place in any event. If that is the case, then the amendment is certainly non-controversial. I can tell you, I think that the amendment has been misinterpreted, perhaps by the minister.

[4:45]

This is not a controversial amendment. It is simply saying that the UBCM and the affected municipality -- so as not to divide and conquer, not to put the UBCM in the difficult or perhaps awkward position of being an intermediary or a messenger, sometimes of bad news, in this case -- will be directly consulted on the proposed regulations, not on the policy. The policy has been decided by the government.

We can only assume that the government intends to push this legislation through as part of this bill. We assume that. Many of us would prefer not. Many municipalities, as the member for Powell River-Sunshine Coast suggested, would prefer not, and they've written to the government. They have written directly to the minister and to the Premier asking them to withdraw the bill. We know that that's unlikely; we know that the government is likely committed to passing this bill. So the very least we can hope for is that when it comes to the proposed regulation under this section, the individual affected municipality would be consulted directly as well, because that respects the principle of local autonomy and municipal autonomy that is so important to these creatures of the province -- that's what municipalities are, yet they do have some autonomy.

This is simply a non-controversial amendment. The minister has already said to the member for Port Coquitlam that she will live up to that spirit in any event. I'd like to accept the minister's word, too. Would she then, in that context, simply accept this non-controversial amendment?

[ Page 16931 ]

R. Neufeld: Speaking to the amendment, to start with I agree wholeheartedly with my colleague from Prince George-Omineca that bringing in an amendment that just adds "and affected municipality"....

If we go back to the words of the member for Powell River-Sunshine Coast and also the member for Prince George-Omineca, this is a bad piece of legislation. It's lousy, and it's wrong. But we have to look at the situation. The member for Powell River-Sunshine Coast raised the issue very clearly. We are talking about the autonomy of municipalities in their taxation; that's what we're talking about. We're talking about what happens next. What happens if the oil and gas industry decides that they are being unfavourably taxed in relation to Alberta -- and it's interesting that the minister uses Alberta -- or the U.S.? Are we then going to do something there to change the taxation procedures in those areas and let the people in those areas accept or have to pay what the government wants to reduce in taxation? We're talking about taxation and the autonomy of taxation. That affects every municipality in the province. That's why the UBCM itself is the body that should be dealing with this, not a few municipalities that are picked out by a few people because maybe Port Coquitlam is more affected than others. It should deal directly with the UBCM on this, and not try to fracture the UBCM in the process, because it is real taxation.

Secondly, here we are: the WGA has initiated this and high taxation on CN and CP. Have CN and CP looked at their labour contracts? They are so absolutely outdated and archaic -- it's drafted something like the health labour accord -- that they pay people on the east coast 80 percent of their salary to sit on their duff because they can't find them a job over there, but on the west coast they're hiring people. We're paying for that. I don't think that's right.

How about the issue of the fuel tax? Could we look at the fuel tax? That's been an issue with all railroads. That wouldn't affect the city of Port Coquitlam directly so much, but it would be based across the whole province. Why don't we look at corporation capital tax? Do they pay corporation capital tax? If they do, how much is it? Maybe that's regressive. We have been saying that for a long time -- right from the initiation of it. Maybe that's something that we should be seriously looking at removing from CN and CP or from the railroads per se, so that they can operate. Those are issues that we should be looking at on a broad base, instead of trying to stick it to the municipalities that happen to have those railroads going through them.

The way to do that is to work directly with the UBCM. And not just consult. I've seen how consulting works -- both how it worked before and since the NDP have come to power. It's like this: "Yes, we'll talk to them, and we'll go and do what we want to do anyhow." It should be with the approval of the UBCM. That's what should happen. If you want to get the approval of the UBCM, then I can see us moving across this section fairly quickly and dealing with it. But that has to take in the general scope of a lot more taxation than just property taxation.

C. Serwa: I speak in favour of the amendment. I really believe that if the case that has been stated by the member for West Vancouver-Garibaldi is correct, the UBCM in this case is a reluctant bride in its association with the provincial government and is potentially a scapegoat in this negotiation process. If they're unwilling to do so, it seems only right and reasonable that all of the municipalities that are affected are part and parcel of the negotiating role -- not individually in the various communities but so that all of the communities are collectively together to discuss this matter, and representatives from each community are there.

I'm also afraid of a divide-and-conquer type of process. I know how the provincial government works, and I also know how property negotiators work. Everybody has sold for this low price except you, but if you do a little talking, you find out that nobody has sold. The divide-and-conquer potential is much greater, unless the affected municipalities are involved in the total discussions.

The member for Peace River North made some excellent points with respect to the costs that are facing our railways. The fuel tax and the corporation capital tax are certainly very significant taxes. He has also stated that costs that the federal government and various provincial governments impose on railways in order to carry on with their business are unrealistic with expectations that the railways be economically viable. So there is a whole gauntlet of areas that can be discussed.

We've been primarily discussing two factors in the amendment. I'd suggest that the minister has to be aware that there's another party that hasn't even been mentioned in this discussion. We all know that transportation is a key to the economy in this province, and in Canada, but nobody has once mentioned or thought of what playing with the taxation rates of the rail industry is going to do to the trucking industry. The trucking industry serves every area of the province. All of a sudden you've got a situation that is a bit like the one the liquor control board faces: if you change the ground rules for one player, then you affect, through the domino effect, every other player in the situation. I think the minister has to be cognizant of what the focus on the railway situation and trying to make it economically viable through the reduction of property tax rates will do to the trucking industry, as well as to the various municipalities.

I speak in favour of the amendment. When we dispense with the amendment -- and hopefully, the minister will consider supporting the amendment, because it guarantees that the consultation process will take place -- I'm going to have quite a bit to say about railways, the trucking industry and the effect on municipalities.

Hon. E. Cull: I've already spoken on the amendment, so I'm not going to engage in that -- I'll listen to other members -- but I do want to add some information, based on what the last couple of speakers said. Two-thirds of the taxes paid by the railways in British Columbia are property taxes. That is the single biggest tax that they pay. Fuel taxes are not the issue -- as I said, British Columbia has the lowest fuel taxes in the country; they're lower than Alberta.

If you look at the tax rates and at what's happening with railways, the weighted average of property taxes for residential properties is $4 per $1,000. For business, class 6, it's $13 per $1,000. The average weighted tax for railways is $45 per $1,000, and in the case of one municipality, it is as high as $123 per $1,000. This tax is a significant tax. It is the tax that they have brought to our attention as being the one that has the greatest fairness issue. Let me tell you that, as the Minister of Finance, I would not have considered the matter if there had 

[ Page 16932 ]

not been a tax fairness issue as well as the other issues with respect to investment and the potentially devastating impact on the railways of the withdrawal of the western grain transportation assistance.

We're talking about why we don't address other taxes, but they don't have the same impact that this one does because of the considerable inequity, both across the country and within municipalities, with respect to railways.

L. Fox: I want to try one last time to convince my colleagues that they shouldn't support the amendment. Before I get into that, though, I want to suggest that once we have dealt with the amendment.... The member for Peace River North brought up some of the issues which we want to canvass throughout the debate on this section.

Let me talk about the amendment and its effect from my perspective. Under the existing legislation, if the executive director or the executive of the UBCM feels that they have great concern with this issue, they have the authority and the ability to appoint a structure which only consists of those who are going to be affected by this initiative, which will therefore take that recommendation forward.

The effect of this amendment really says: "UBCM, you're no longer part of the process, because now we will be dealing with the affected municipalities individually." The UBCM would step out of it. Why should they be involved if the government is going to deal with the affected municipalities? I would suggest that in actual fact, the amendment removes the UBCM from the process and puts the process directly between government and the affected municipalities. That would be the reality of this amendment. So I'm encouraging those who wanted to support the amendment to reconsider it.

The Chair: We're getting into a debate now not so much....

Interjections.

The Chair: I want to caution the floor. Some of these questions have been directed to the minister. She's answered them, and now we're getting into a debate between the opposition positions on this particular thing. After this speaker, I'm going to put the question.

G. Wilson: I appreciate your ruling, and it's only because my colleague for Prince George-Omineca wanted to take one last shot to get us to vote with them that I thought I'd take one last shot to get them to vote with us.

It's clarification for all members of the Legislature. The amendment reads: "...be amended by adding after the words 'Union of British Columbia Municipalities' the following words, 'and affected municipality'." It does not say that they're going to be dealing with the affected municipalities without the UBCM.

Interjection.

G. Wilson: I hear the member say: "Read the section." You know, there comes a time when the Union of B.C. Municipalities -- an outstanding organization, one that many of us have been members of and I think most of us are strong supporters of -- needs some assistance with legislation to make sure that there is proper consultation with the municipalities.

[5:00]

There's one other area that I could use for comparison. It's the question of land claims. I can't imagine that the Union of B.C. Municipalities would not want the local municipality to be directly involved when there is an issue that will affect local taxation. This is exactly the same kind of thing because it speaks to a principle, and the principle is that of local autonomy over the setting of taxation rates. While we may disagree on this particular amendment, I'm sure we agree on the motion on the main section. Perhaps we should move to a division vote, and we'll see where we stand when we come to the final section.

The Chair: Shall the amendment pass?

Interjection.

The Chair: Hon. member, I made a statement. I will call the question, unless this is going to add to the debate something different than what we've heard over and over again. If it's a continuation of things that have already been said, then I think we should move to the question because it has been well canvassed with the speeches.

C. Serwa: Unless the debate is tedious and repetitious -- and it hasn't been.... Through the presentation of this particular bill, it was decided by the Legislature that we would facilitate some second reading debate on this type of an omnibus bill. I believe, perhaps knowing that, that the member has something more to add. I believe that this will have a life of its own, and we will make good progress.

The Chair: Thank you, hon. member, but the debate has been facilitated extensively, and we've canvassed....

The member for West Vancouver-Garibaldi rises on what issue?

D. Mitchell: I just have one further point of clarification that I'd like to address to the minister on the amendment, which has been moved in my name.

The Chair: Briefly.

D. Mitchell: I'll be as brief as I can be on this. I know that there has been some good debate on this amendment, and we've not yet finished the section. But the minister's comments, which I don't disagree with at all, and the factual material that she has indicated for members of the committee, I think, relate more to the section than to the amendment itself. Maybe that's good; maybe it will expedite dealing with the section after we deal with the amendment.

There has been some disagreement over the interpretation of the effect of the amendment. I hope there won't be any disagreement over the purpose of and the intent behind the amendment. The minister is clearly committed to getting this amendment to the Assessment Act through. Here's my question to the minister: is her objection to the amendment simply that she would prefer the UBCM serve as a kind of one-stop-shopping approach -- if I can use that phrase -- for dealing 

[ Page 16933 ]

with the municipalities in British Columbia when it comes to the crucial issue of railway taxation? Is that her objection? I think the objective could still be achieved. The urgency of dealing with this issue is undisputed; the need for a competitive rail transportation system in B.C. is undisputed. Would it impede the process to have the individual municipalities affected be consulted on the regulations, pursuant to this policy, with the UBCM? I don't think that's the case. If the minister is interested in maintaining a system of one-stop shopping with respect to government relations and municipalities, I don't think this amendment would impede that. I'm just wondering if that was the minister's objection to the amendment in my name.

Hon. E. Cull: I've already stated that there will be consultation with individual municipalities. But for the purposes of the legislation, I am satisfied that what we want to have in there is the Union of B.C. Municipalities, not.... I wouldn't have put it into the context of one-stop shopping, although maybe that's a way that it could be characterized. It's more in the fact that we have to consult with municipalities. It's very difficult to determine who would be affected. We've heard discussion here today that all municipalities are affected, because there is some interference with the municipality's right to set its own taxation. So that could include every municipality in the province.

We need to come up with a process that is practical and that will allow for resolution of the issue. Believe you me, what we want to accomplish at the end of the consultation is agreement -- on the part of the municipalities that deem themselves to be affected one way or the other, and of the Union of B.C. Municipalities spokesperson for municipalities -- with the solution that has been put forward. That's the objective.

[5:15]

Amendment to section 3 of Bill 55 negatived on the following division:

G. Wilson: I'm absolutely astounded at the way that the last vote went, because the Liberal Transportation critic, the member for Richmond Centre, stood up and spoke strongly in favour of the amendment, and then didn't show up to vote. Perhaps now that we finally have the Leader of the Opposition participating in a debate, which is unique and new, we might hear why the Liberal Transportation critic would speak so strongly in favour of this amendment, only to find that the rest of his colleagues voted against it without the member showing up to tell us that he supports it.

The Chair: Member, we just passed that motion. There is no need to speak on it anymore. Just carry on.

G. Wilson: This section, regrettably now unamended, speaks to a principle that is an important one.

[G. Brewin in the chair.]

As I said earlier on, nobody is going to argue against the urgency to do something about keeping our railways competitive. Nobody is going to, or at least I don't think anybody is going to argue about that. I don't think anybody is going to argue the necessity of protecting the ports in British Columbia or protecting the movement of Canadian products within the borders of Canada. There is a real need to look at the differential taxes that exist and the differences that occur with respect to those rates.

The member for Peace River North suggested a few minutes ago that there were a whole host of other considerations that ought to be looked at. The minister responded by saying: "Well, property taxation is far and away the largest consideration." That's because the railways own so much property. There's no wonder it's the largest consideration, but it is not the only consideration. There should be consideration given with respect to the propositions of taxation that are put in place. The corporate capital tax is not a bad place to start for CN and CP. There is a larger principle at work here. It's not that we shouldn't be trying to address the concerns associated with the railways and the cost of moving Canadian products. We should, and this section of the bill attempts to do that. The larger issue is whether the government is going to do it at the expense of local autonomy over taxation. That is the real concern.

In the defeated amendment, one of the reasons we wanted to force the government to talk to municipalities is that there is a limited amount of time to act. We have to act and act quickly, and my guess is that this government has a very clear position on where they're going to go. I would be surprised if they haven't already got the draft regulations done. My guess is that they're going to force this through with their majority in the House and then implement their regulations. My guess is that any consultation that will take place with the UBCM is going to be a lot of window dressing that isn't going to solve the issues and concerns of the local municipalities.

This section gives powers to the provincial government that ordinarily would rest with the local municipality, and that's a serious break from the traditional manner. Similarly, the second consideration is that if you look at section 27.1(2), the regulations may be different for a series of reasons -- (a) to (d). Those are areas that, traditionally, municipalities make determination on. Yet this government has decided they're going to move in and remove those kinds of powers.

[ Page 16934 ]

I think the comments from the member for Prince George-Omineca were right. There is an urgency. But this is clearly a high-handed way to proceed, and it's an extremely dangerous precedent. If we put this precedent in place, what will the government attempt to do next in terms of its overall regulation of the local economy?

Interjection.

G. Wilson: The member asks if I am suggesting that they're railroading this. Well, in a certain sense, I guess I am saying that they're railroading it. But I'll tell you, hon. Chair, that it's the local municipalities that are going to carry the can, and that means the local taxpayers of the province. One of the chief dangers when you have somebody who acts with all good intention -- and I think the Premier does -- but whose experience is one of being mayor of Vancouver, is that they forget that there's another world out there called British Columbia. What we're concerned with in this is making sure that municipalities outside the lower mainland are going to be protected with respect to their position to set rates and regulations.

Hon. M. Harcourt: I have listened very carefully to the remarks that have just been made by the member for Powell River-Sunshine Coast, and I want to assure him that the view I have taken on this is the public interest of all of British Columbia in maintaining the rail system, because I'm sure the member is aware that it is under threat. It's not just the $400 million that will be eliminated over the next three budgets, or the Crow rate that isn't there to subsidize the grain growers in the Prairies, as it was for over a century. It's the threat from the lower-cost U.S. haulers south of the border. Losing the rail system in British Columbia is going to affect far more jobs and far more municipalities than this modest proposal to eliminate the rail taxes, as part of our part as provincial and municipal governments, to help the railroads be leaner and more productive. If we were to lose traffic to the United States on the scale that could happen, the jobs that would be lost would be in the thousands; the losses would be staggering.

We cannot study this forever. This matter has been reviewed and studied; consultation has taken place. It is part of a proposal that the railroads will enthusiastically show their commitment to the rail system in western Canada, British Columbia in particular, and to our ports. If we show our commitment, as British Columbians, with this small part of eliminating $20 million a year in rail taxes -- municipal taxes that are four to eight times those of the Prairies and their municipalities.... So that's what we're talking about.

I can tell you that the U.S. carriers -- Burlington Northern, Union Pacific, Soo Line and others -- are very aggressively, as I said in estimates, pursuing hauling the grain, or the 60 percent of the freight that is coal and that, as the Minister of Energy, Mines and Petroleum Resources has pointed out, went south. The impact on the cities, the villages and, yes, the municipalities throughout this province would be massive and terrible -- and the effect on the ports, because the U.S. ports, believe me, from Tacoma to Seattle, Portland and San Francisco, are looking very aggressively at this potential business. So this is very real.

This is not something we can set up a royal commission for or study endlessly at all. As a matter of fact, we need to make the commitment now, so that CN and CP and B.C. Rail can make their commitments for British Columbia and invest $130 million to start with and potentially far more. If they see that we're not committed as the province of British Columbia and the municipal leaders around this province, they can put their investment elsewhere. Sadly, they can put it elsewhere into the east or south. So that's what we're talking about, hon. members. We're talking about the future of the rail system in British Columbia and western Canada.

Now, I have made it very clear personally to the president of the UBCM, and the Minister of Municipal Affairs has made it clear personally and in writing: we are going to have follow-up consultations to deal with the municipal concerns.

But as a provincial government, we're going to show our good faith by acting on the 60 percent of the $20 million a year of taxes that involves the school tax portion and the unorganized territories portion. We will take responsibility for $12 million of the $20 million on January 1, 1996. We don't want to delay that. We need to make a statement here. I hope each and every member of this House would vote today that this commitment be allowed to go ahead.

The second portion deals with the approximately $8 million that is the municipal portion, some of it disproportionately falling on certain municipalities -- 30 percent of the tax base -- like Sicamous and others. I and the Minister of Municipal Affairs have said personally, and we have confirmed in writing, that we are prepared to consult and to not introduce any changes to the municipal government portion until January 1, 1997, at the earliest, and after full consultation with the municipal people -- good-faith consultation.

An Hon. Member: In 1997?

Hon. M. Harcourt: That would not click in until January 1, 1997, and would be phased in over three years. The provincial government would be prepared to share part of that commitment by municipal governments, particularly the municipalities that are affected the greatest. I have said that to the UBCM, and I have said that to the municipal governments across the province. The minister has said that, and I think the level of alarm and concern is misplaced.

I come from 14 years of municipal experience. I come from a government that is the only government in Canada that has not off-loaded onto the municipal governments to deal with our deficit-debt problem. We have kept whole the conditional-unconditional grants. Not only that, we will be picking up those costs for the city of Vancouver and the other municipal health departments. That's $4 million off the budget of Vancouver City Council when the community health boards take over those responsibilities, and there will be the same impact in other parts of the province.

We were one of the first and most enthusiastic participant in the national municipal infrastructure program -- $675 million over two years into British Columbia, which led to cleaning up the pollution that was harming the fish up and down the Fraser River. Half a billion dollars went into the Annacis Island sewage treatment plant to complete the sewage treatment. On top of that, at the last UBCM convention we agreed to extend the federal cost-shared -- one-third, one-third, one-third -- municipal infrastructure program for another two years.

[ Page 16935 ]

There many other examples I could give of how we have treated fairly and equally the municipal partners we share the jurisdictions with in this province. So the facts speak very loud and clear for the member who said that the municipal governments don't trust us. The facts are that they do. Our track record is crystal-clear, and it's the fairest record of any provincial government in Canada in terms of how we should relate to municipal governments in these difficult, challenging times of deficit and debt and trying to come to grips with these sorts of problems.

I want to be very clear that we are going to act. Sooner or later this bill is going to be approved. I would hope that it's without politics being played. I would hope that there is a realization of the consequences of not passing this bill at this time. I would hope that it is passed with the realization that we are going to take responsibility for the 60 percent portion in terms of school tax and unorganized territories. We have committed to full consultation with municipal leaders in this province about the $8 million, about phasing that in over three years and about mitigating the impact on the municipalities that are the most affected.

There are two stark choices: we either take that balanced and fair approach, or we risk losing the rail transportation system in western Canada. I hope the members accept the fact that we have to act now. We as provincial politicians should immediately accept the $12 million, 60 percent commitment. Accept the fact that my track record with municipal governments as Premier and as a municipal leader is one of respect for municipal leaders. We are going to carry out those consultations. We have a year and a half to carry out those consultations. We have committed to phasing it in over the three years that the Crow rate comes off, as Mr. Martin said in his last budget. We are prepared to mitigate the costs, particularly on those municipalities that are the most adversely affected, where 5, 10, 20 or 30 percent of their income comes from this particular tax.

I wanted to speak at this point in the debate to lay out very clearly the position of our government on this very important issue.

J. Dalton: It is certainly a pleasure to follow the Premier, who is very conversant in municipal issues -- or I presume he was at one time. There are a few points I would like to get on the record, and then I know that there are other members who are stacked up like aircraft over the airport to get in on this one.

[5:30]

I did put an amendment forward, but as we all know, it's out of order, so we're not going to worry about the amendment. I did get two on the order paper for the Election Act that nobody actually did challenge and that were of a similar nature. However, the essence of my motion, whether it be in or out of order, was to speak against and vote against this section, and that is what I will do now.

It's clear that the integrity of the Assessment Authority is being compromised by this section 3 which amends the assessing authority. The Premier and others know full well that the UBCM is on record with major concerns about this and other provisions in this bill, but certainly about section 3. It must be on record that Joanne Monaghan, president of the UBCM, is speaking on behalf of all the municipalities in her official capacity; but more importantly, she knows. She's out there on the front lines, and she knows full well the implications of this amendment. I don't think it's necessary for me to go through the release that President Monaghan put out two days ago, on July 10.

It's interesting how these sections and bills come at us fast and furious at the end of a long session. I think back to a year ago on another matter I was reviewing, and I'm reminded of another Bill 55 we were dealing with at 3:30 in the morning last July 7. The time is at least not quite so late.

Interjections.

J. Dalton: Back to the section itself, because I know some members on the third, fourth and fifth benches are starting to squawk, as they've been known to do. The compromise of the integrity of the Assessment Authority has been fully documented by the UBCM, and I want to make that point clear.

While I'm on the topic, I think of the excellent job that the assessment people do on the North Shore, as one example. Every January without fail, I get a call from Calvin Smyth, the director of the North Shore office. He comes to visit and says that if we have any problems, please let him know or have the constituents contact him directly, and we all know that's the sort of methodology the Assessment Authority uses. When the government brings in something like this, it is both an assault on the authority itself and on the UBCM, and it makes for a very unhappy working relationship.

The other point I want to make is in direct response to something the Premier was talking about. He was talking about taxpayers. I am very surprised that this government is on its feet so many times defending a bill that's impacting on local taxing authority, and they seem to forget the wise words of Kenneth Dye: "There's only one taxpayer." And why it cannot be comprehended by the Premier when he is manipulating the tax system and, more importantly, impacting the local taxing authority, which, as we all know.... Today my leader presented a community charter, which, of course, will be an interesting document for all members to read and react to, and I'm sure they will. That's the sort of evidence of where the Liberal caucus initiative is coming from. We are not assaulting local authority, whether it be assessing authority or taxing authority. We are prepared to work with the local municipalities. I would submit, as this amendment to the Assessment Act indicates, that this government has no interest in working with the UBCM. Quite the contrary. And I would have thought that the Premier, a former mayor of Vancouver, would have known better and not be on his feet defending this undefendable section.

D. Mitchell: Dealing with this section, I think the contribution of the hon. Premier on this bill in committee today is a good reflection of the importance of this legislation. I appreciate the hon. Premier's comments. It's not every day the leader of the government comes into Committee of the Whole to debate a section in a bill. I think that is a positive reflection of how important this amendment to the Assessment Act is.

I don't think anyone would dispute any of the comments made by the hon. Premier with respect to the importance of a competitive rail transportation sector in British Columbia. That's vital. One of the questions we have to ask, though, relates to the Premier's comments about the fact that some municipalities in the province are clearly going to be affected 

[ Page 16936 ]

more than others. That's absolutely true. In fact, the motivation behind the amendment that I moved -- and I'm sorry it was defeated; it was a modest amendment -- was to allow individual municipalities, especially those that might be affected more than others, to be directly involved in that process of consultation on the regulations on this section. That's defeated now; I won't raise it anymore. I regret that it was.

But when we talk about where the money is going to come from, the $20 million or so that's now going to have to be accommodated.... We know that the railways are going to get a better deal. And you know what? They deserve to get a better deal. In order to make them more competitive, they're going to get a better deal on property taxation. But who is going to make up the difference? How is it going to be made up?

When we take a look at this section of the bill, it refers to adjustment factors. This is a question for the Minister of Finance. The bill talks about the "adjustment factors for property of a railway corporation." We don't know what these adjustment factors are or how they're going to be set. But the bill's amendment to the Assessment Act allows adjustment factors that cabinet may prescribe. We need to know what those adjustment factors are all about, what we are approving here and what impact it's going to have on municipal governments where railways are operating, whether it be the CN line, the Canadian Pacific line or now the B.C. Rail line, which is for the first time going to be paying property taxation, which is a big step. We need to know how these adjustment factors are going to work.

The hon. Premier is absolutely right. This is an important piece of legislation. The balance that's needed to have a competitive rail sector and fair taxation to municipalities at the same time is not an easy one. The government has to choose. That's what governing is all about. These adjustment factors are critical, and we need to know -- well in advance of the consultation that's going to take place with the UBCM on these regulations pursuant to this act -- what these adjustment factors are, what kind of a schedule is going to be built into the adjustment factors, and whether we're dealing with a blanket policy that's going to affect all British Columbia municipalities the same way or whether these adjustment factors are going to be able to deal with local conditions where municipalities such as Sicamous and others are going to get a harder hit because of local circumstances.

I hope the Minister of Finance is going to be able to deal with those concerns that were dealt with by the comments of the hon. Premier, because this is an important amendment that should probably be in a separate bill all by itself, along with the next section of this bill -- section 4, which deals with the B.C. Rail company in particular. Unless the minister can adequately explain the details of these adjustment factors, I don't know how we can possibly support this bill in committee today. I look forward to the minister's comments.

F. Garden: I seek leave to make an introduction.

Leave granted.

F. Garden: It's my pleasure to introduce to the House a very personal friend from Quesnel, Nate Bello. Coincidentally, he's also a councillor for the city of Quesnel, so I presume he'll be very interested in this debate; he couldn't have timed it better. Being a good social democrat and a longtime friend, he'll understand where we're coming from. I'd like to ask you to make Nate Bellow welcome at this time.

G. Campbell: This bill has come under a fair amount of scrutiny already through the amendments, but let me speak briefly to the principles that are outlined in section 3. First of all, I can't concur with the Premier's analysis of the bill. I certainly concur with the fact that our tax system in British Columbia is making a number of our industries non-competitive, including our goods-moving industry. I would encourage the government to start thinking about reducing taxes in real terms as opposed to playing games with them.

Let's be very clear about this bill. It does not eliminate the tax. What it does is shift the tax from large rail companies to property tax payers: homeowners and small businesses. Unlike the Premier, I recall the impact of this government's activities with regard to the average homeowner in British Columbia. It has been major in terms of increasing property taxation for the average homeowner in the province. This is just another example of that taking place.

There are some very significant changes in what has been actually a long-established and generally well-thought-of policy for the province. This is an unprecedented change in the assessment system in the province. It moves away from an independent assessment authority. It provides for exemptions and modifications, and I would suggest that it provides for substantial additional costs not just to the provincial level of government but to the municipal governments as they work through these exemptions.

I believe that the characterization of the consultation, which the Premier put forth, is certainly totally different from what we have heard from municipalities across this province. From every area and jurisdiction of this province, they have pointed out that there has been no consultation. It is not consultation to make a decision that something is going to happen and then come back and figure out how you're going to stem the flow of the tax dollars from the local community.

The fact of the matter is that there has not been consultation with regard to this. This is an unprecedented intrusion into the municipal level of government. I believe the provincial government can meet their stated objectives for the rail companies without making this kind of unilateral decision, which undercuts the value of the B.C. Assessment Authority and the responsibilities and the authority of local government as well.

Let's be very clear. This is downloading in all of its ramifications. The provincial government has made a decision which is going to cost the local homeowner, the local property tax payer, a substantial number of dollars. There is a small transition amount that's been placed in there, so the government has thought about that for one year. It probably moves it by an election, which is probably an intelligent thing for them to do politically, but I don't think the municipalities have bought into that. This is not necessarily a better deal. In fact it is not a better deal for the people of British Columbia. The government has every opportunity to ensure that the rail companies in British Columbia are competitive. They had every opportunity to make sure that the 106 companies that 

[ Page 16937 ]

have relocated immediately south of our border with 1,700 employees would indeed locate in British Columbia, were it not for this government's tax-borrow-and-spend policies.

There is no question that the movement of goods is important in British Columbia. There is also no question that local communities that are going to be directly affected by this decision have not been included. The Union of British Columbia Municipalities has made a number of recommendations on how the government can meet its objectives without undercutting the Assessment Authority, without undercutting its independence and without downloading on local government so that they can in fact make sure that rail companies know that all of us in British Columbia want to be sure they can run their operations in a cost-effective manner. This is not the way to do it.

The fact of the matter is that this is a major tax shift, and it is one that will have an impact on communities across the province, so clearly this side of the House cannot support this special deal for the railways in British Columbia. We can support a process which includes municipalities in looking at long-term solutions. This doesn't have to take a long time, as the Premier suggested. It doesn't have to take years. I'm sure that even a matter of months can resolve this issue with regard to the UBCM, and they have put forward a number of recommendations on how we can do this.

So we certainly can't support this section of the act. It is one that contravenes many of the principles the Premier espoused prior to being elected to provincial office. I would hope that the government will withdraw it and take their time so that they can work with municipalities and inform the rail companies that they will be doing that, and come forward with a sensible tax program that will encourage investment not just in the rail industry in the province but also throughout the province so that all of British Columbia will benefit.

Hon. M. Harcourt: Much ado about nothing, except that it is something that is involved here, and the Leader of the Opposition doesn't understand that we don't have a year and a half to consult. I made it very clear that the railroads want a commitment now, and if they don't get a commitment now, they....

Interjections.

Hon. M. Harcourt: It's because they are as concerned as we are about maintaining our competitiveness and about the importance of a rail transportation system in western Canada. If you want to talk about a lack of consultation, you should talk as Liberals about the lack of consultation that happened when the Crow rate was removed in Mr. Martin's budget at the end of February. I didn't get any consultation on the fact that $400 million was going to be wiped out.

Over the last three or four months, we have been coming to grips with this huge loss of revenue for the rail system in western Canada, and over the last four months, we have been showing leadership in dealing with this in a realistic way. We have been encouraging the rail company leadership that we want them to stay. We want them to improve and be more competitive, and we're prepared to be part of the solution.

[5:45]

We're prepared to invest up to $20 million -- it's more like $14 million -- and the province is prepared to commit half of that, starting January 1, 1996. We will show commitment; not wishy-washy politicking like the Leader of the Opposition is carrying out, but genuine commitment and leadership. That's what this bill is all about. We are not going to withdraw it. It is going to be passed, and it is going to show the railroads our commitment -- not the delay, study and endless processes leading to fuzzy Vancouver plans that don't lead anywhere, but a real commitment.

Not only that, we have met with the UBCM. We met before this, and we have given them an assurance here today that we are prepared to consult. That consultation process has already started, and it has a year and a half to take place, but we have to show a commitment now. We're doing that, unlike the Leader of the Opposition, who wants to study these things endlessly and play political games, because he's an ex-municipal leader. Well, you're not a municipal leader anymore; you're a provincial leader. Show it!

If you think I'm going to take any lessons from a mayor who gave himself a 12 percent pay increase as the second thing after eliminating the fair wage act, forget it. If you think I'm going to listen to somebody who, in his last year as mayor, increased the tax on small business by 62 percent in one year, then forget it. I'm not going to take any advice from that person.

Interjections.

The Chair: On the section, hon. Premier. Hon. members....

Hon. M. Harcourt: Once again, this is about investment. It's about the 23 percent increase in non-residential private sector investment that took place in the province last year. That was money coming into British Columbia, not businesses fleeing. This Chicken Little of a Leader of the Opposition keeps talking about how things are terrible, things are terrible, and they're falling apart -- while the rest of the world is coming here. We've got the equivalent of P.E.I. moving here every year. Do they think it's terrible? They don't think it's terrible at all; they think it's a wonderful place to live. It's just Chicken Little over there, going: "Waaack, things are terrible, things are terrible!" Forget it!

The Chair: On the section. On section 3, Mr. Premier.

Hon. M. Harcourt: He won't listen to the bond-rating agencies, to Nesbitt Burns or to anybody but some.... God knows what seance he goes to.

So I tell you, hon. Chair, that we are going to pass this. This shows our government's confidence in this province and in the rail system that we're going to have well into the next century -- unlike the Leader of the Opposition, where it's going to fall apart because of his dithering around with this issue.

The Chair: Shall section 3 pass? Oh, I think not. I recognize the hon. Leader of the Opposition.

Interjections.

The Chair: Order, order!

G. Campbell: Well, after that response....

[ Page 16938 ]

Interjections.

The Chair: Order, hon. members.

You have the floor, sir.

G. Campbell: I have the floor? Thank you very much, hon. Chair.

After that response, I'm sure the Premier is going to try and apply to David Letterman to get on "Stupid Pet Tricks." I think he'll do a very good job of that.

The fact of the matter is that whether the Premier believes this or not, this is not something new. He may just have discovered it, but this has been around for some time. The Premier says we have to do it now; we had to do it a long time ago. The Premier himself said he wanted to eliminate all transportation subsidies to business. That was his response to the federal government. He said let's get rid of all these subsidies to business. So what's it going to be? It's not a question of now.

For this Premier to stand up and tell this House that he consulted is as close as he can get to trying to cover up what in fact took place. Members of the Union of British Columbia Municipalities were brought in 24 hours before this bill was submitted. They urged the Premier and cabinet not to put it forward. They ignored them. That is not consultation. That's not talking to the people of the UBCM. It's not talking to municipalities in this province.

You should read some of the rhetoric from this Premier when he was mayor. If that had happened under a former government, you wouldn't have heard the end of it. The Union of B.C. Municipalities has said it's taken the government at its word. The government said: "We're in partnership with the UBCM. We're in partnership with municipalities." Well, the last person you want to have is a partner who goes and does things unilaterally and comes later and says: "You pick up the bill. You pick up the price." That should not happen.

This Premier should understand. I mean, he's sending one of his old sidekicks around the world to tell them about our Assessment Authority. Now he's undercutting it. He's taking away one of the most significant values that that Assessment Authority has: its independence. He's saying no, no, because he's always going to be smarter. Cabinet is always going to be smarter than the Assessment Authority -- or any other British Columbian, for that matter. The fact of the matter is that the Assessment Authority is being undercut.

The fact of the matter is that if the provincial government wanted to show real leadership and decisiveness, they wouldn't kowtow to a special interest like this. They would deal with reducing taxes for everyone in British Columbia, for the average British Columbian, as opposed to simply the big rail corporations. We can protect our goods-movement industry; we can protect our rail industry. You don't have to do that on the backs of homeowners and property tax payers in British Columbia.

There are many opportunities for the province to act on its own with regard to this. Instead of that, they try to sneak this significant amendment into this bill, the Miscellaneous Statutes Amendment Act (No. 3), 1995, hoping that no one will see it and hoping that it won't be noticed. Unfortunately, the UBCM and all of its members did notice it.

They also recognize, they believe.... It doesn't really matter whether the Premier thinks they've been consulted or not; it matters whether they think they've been consulted or not. They are very clear: they have not been consulted. The fact of the matter is that until we do get an opportunity to include those municipalities, you're not going to have a long-term solution. This is playing special favourites, and the fact is that we don't want to play special favourites with regard to this.

If we want to deal with this issue in a way that will be constructive, then it's important for us to think about where the impacts and where the costs are going to be and for the Premier and the government to assume full responsibility for their decisions without passing them down to the municipalities, homeowners and small businesses in British Columbia. Those average families have been hit hard enough by this government, with $1.6 billion in additional taxes levied after they were told that there were going to be no additional taxes.

Let's be clear. The average B.C. family's income and take-home pay has gone down every single year that this government has been in office. I'm surprised that the Premier doesn't understand that when you hit someone with a property tax like this, that goes after their take-home pay. They're going to reduce their disposable income even further.

The Premier says that everyone should have confidence that the government has this under control. Well, you can understand why people across the province don't have confidence in the government. The Premier just told us that $8 million is going to be paid by municipalities. The Minister of Municipal Affairs is telling the municipalities that there will $7 million paid by the municipalities. What is the answer to this? The fact is that the government doesn't know.

If this were so critical, it would have been possible for the provincial government, the Minister of Municipal Affairs, the Premier, the Minister of Finance or whomever the Premier and cabinet decided or whomever his deputy minister told him he should use.... That would have been fine. You could have gone out to municipalities in February and started talking then about how to make sure that we establish a long-term and viable goods-movement industry in the province. The Premier is correct on that point. There is no question that that's absolutely vital to the future of this province. It is so vital that the Premier and his cabinet colleagues should have been out talking to people about it before a couple of days ago. They should have talked to the municipalities that would be directly affected about it long before they introduced the bill, not 24 hours before.

It is not every month or even every year that you will have the kind of response we have found to this bill and this particular section of the bill. The reason for this response is that it cuts to the very core or to the very quick of how government operates in the province. In his heart, the Premier knows that. If a provincial Premier in the past had come to him when he was the mayor of the city of Vancouver and said, "I've now decided what we're going to do to your taxpayers; we're going to make you send out the bill, and we're going to make you be accountable for it, and we're going to run and hide," I can guarantee that the Premier would have been up just as fast as the municipal leaders from across this province have been up in the last few days.

[ Page 16939 ]

When the Premier says he has consulted, that is clearly not an appropriate definition of consultation. Consultation is not telling people what you're going to do. Consultation is telling them what you want to accomplish and asking them to join you in coming up with a solution. Now, I'm pleased to say that the Union of British Columbia Municipalities, representing the municipalities across the province who are going to be affected, have said quite clearly that they share the objective. They've also said quite clearly that they share the objective of this provincial government of making sure that they can maintain those rail interests and a modern, active goods-movement industry in the province. They've said that quite clearly. They are willing to make that commitment not just to the provincial government but to the rail companies in this province.

It seems to me that the province does not need to tap into the property tax situation to make sure that the rail companies deal with this. The rail companies are dealing with one thing: dollars and cents. They don't care where the savings come from. It is the homeowner and small business that are going to care when they have been asked explicitly to foot that bill. Therefore I would once again suggest that the appropriate approach from the government would be to say to the rail companies: "This is not something you have to put off for ten years; it's not a matter of dithering. It's a matter of including local communities; it's a matter of including local government; it's a matter of respecting responsibly elected officials who are there to help solve problems in a way that will work."

They understand that you don't solve one problem by creating a whole series of other problems. But that's what section 3 of this bill does. It creates a number of problems in the province, and we have to recognize that we should go back to the founding principles that have made this system work in the past. A fully independent Assessment Authority is absolutely imperative. Once the rail companies have come, who will be next? That's a question that everyone has to ask. Once the province has decided to unilaterally tamper with the Assessment Authority, what will they decide to tamper with next? It seems that it's absolutely critical that we go back to those founding principles -- not just of the Assessment Authority, but of how you work with local government to come up with solutions.

It is not a matter of coming up with solutions after the fact. The local communities are willing to help the province meet these goals. The fact is that we can come up with a better arrangement, we can come up with arrangements that do not download on local communities, and we can come up with arrangements that don't have an impact on the average family's disposable income in the province. It's a shame that once again this government has not decided to pursue those objectives.

In light of the hour, I would move that we rise, report progress and ask leave to sit again.

[6:00]

Motion approved.

The House resumed; A. Warnke in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. E. Cull: I move that the House at its rising stand recessed until 6:35 p.m.

Motion approved.

The House recessed at 6:01 p.m.

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