[ Page 325 ]

The House resumed at 7:10 p.m.

[The Speaker in the chair.]

Interjections.

M. Coell: We'll get it to you, Mr. Minister.

Mr. Speaker, I want to take you back nine months to the fall, when this piece of legislation was brought forward. I do that only because you've had nine months to think about it and to bring it forward. It is late in the day now. It's not too late for this Legislature to pass the bill, but it is late for the people who will be receiving the cheques. I just want to say on their behalf that there has been a lot of anxiety about this particular legislation among the people who will be receiving the money.

This legislation also dealt with a letter that was sent to 200,000 people on government letterhead, signed by the Minister of Finance, suggesting to them that they would all receive a benefit. I will give the government the benefit of the doubt. It was a very poorly worded letter, and it could have been done a lot better, but I think it did leave 50,000 people with the impression that they might well receive some benefits. In fact, this legislation causes those people, who I think were possibly somewhat confused by the letter, to receive less money overall.

The minister did say that there are a number of other programs that those people may tap into which may be of benefit. I'm aware of those programs, but I'm also aware that this is cash out of their pockets at this point. So we'll be introducing an amendment to help alleviate some of the financial hardship that may occur. I'm not saying it will in every case, but it may occur. We would like the government to consider that legislation.

I want to say that the Liberal Party approves of this legislation, as it addresses child care, child poverty, the working poor and support for families. It also addresses the dignity of returning to work. We believe in those values, as I believe the government does.

We also believe that this is timely legislation. As the minister said, it has been 50 years since there have been any major changes to assistance or welfare legislation in this country. I believe, as do many members of the Liberal caucus, that there will be problems with it. There needs to be a research package that goes with it which will look at the effect of this legislation and the problems that will occur. I hope something like that will be brought back to this House for further discussion. We want to see this legislation work, and we'll be hounding the government to make sure it does work.

[7:15]

L. Stephens: It's a pleasure to rise this evening and speak to Bill 6 in second reading, because I believe the intent of the bill is very positive. As the critic for women's issues, I believe this bill impacts, to a very significant degree, on women and particularly lone-parent women in this province. This bill should help working families build a better future for themselves -- and really, it's about time. The B.C. Liberal Party has always been a party that is committed to individual rights and a free-market economy. It is a party with a social conscience. I think all members recognize that every major social initiative in this country was brought forward by a Liberal government, including health care, unemployment insurance and the Canada Pension Plan. We're very proud of our social initiatives in this country.

But what has the NDP done for the poor in this province over the last five years? The number of people on social assistance has increased from 249,000 to 379,000, and under this NDP government one in ten British Columbians is now on welfare -- an increase of 150 percent. The working poor are being pushed into poverty and onto welfare rolls by this government's fiscal policies. The average real disposal income of British Columbians has gone down in the 1990s since this government came to power. When the Premier was Finance minister he increased 29 separate taxes, fees and licences. This included three personal income tax hikes and five different sales tax increases. In the first term of this NDP government, B.C. families paid an extra $2,900 per household. It's shameful for a government that says it's on the side of the middle class and the poor. They have a very odd way of showing it.

This bill appears to try to address the very serious issues of child poverty and families with low incomes. Female lone-parent families make up 59 percent of families in British Columbia and, according to the 1993 statistics, have an average income of $23,301. Male lone-parent families make up 31 percent of families in British Columbia and have an average income of $35,439. Two-parent families with children make up 12-1/2 percent and have incomes at $59,658.

So it is very apparent that the female lone-parent families are the largest group living in poverty in British Columbia. I hope this initiative does indeed allow all low-income families to provide a better standard of living for themselves and their children, and I also encourage this bill to be brought forward with a view to entertaining some amendments from the opposition. I look forward to committee stage of this bill to try to provide better working opportunities for people in this province and to encourage individuals to work at paid employment and remain independent.

V. Anderson: With our other members, I applaud the intention of the bill. We hope that those in our community who have economic poverty to contend with on a daily basis will benefit from the enactment of this bill. However, we must be aware that in the enacting of this bill, there needs to be a whole new communications system put into place so that the public might be able to understand it. To highlight what I mean, I'll quote from the July 1996 issue of The Long Haul, a publication of End Legislated Poverty. This group is an advocacy group for low-income people that, by and large, is sympathetic to and supportive of most of the undertakings of the NDP or any other government that has as its aim and function making life better for those who live on low incomes. In the July issue they say, with regard to the discussion that we're having tonight about B.C. Benefits -- and I quote because I think it's instructive that everyone should hear this:

"If you are a parent on welfare, you won't be getting $103 a month per child extra income in July. That's because people on welfare who get the B.C. government's new family bonus will 

[ Page 326 ]

have it deducted from their welfare cheque. End Legislated Poverty has received numerous calls from single parents who were misled by the government pamphlet on the B.C. family bonus. It says, 'B.C. family bonus -- announcing a new monthly benefit for all low-income families with children.' But all low-income families with children will not get extra money."

The article continues:

"Maybe you were trying to figure out if the new program applied to you, and you looked at the back of the brochure. A table headed 'Monthly Benefits' purports to tell you how much you'll get from the family bonus. If your net family income is $18,000 or under, it says you get $103. Wrong, if you're on welfare. End Legislated Poverty had to tell the women on welfare that they wouldn't be getting one extra cent. In some cases, the parents had already made promises to their children based on the false advertising in the brochure.

"Ministry of Social Services communications officer Carol Carman offered 'my personal apology' for the brochure, although it came from the Ministry of Finance. The brochure is 'the pits. You have every right to complain,' she said. Tom Workman in the Finance ministry admitted: 'There seems to be a problem here.' He said people will be getting a letter after the election that explains that the family bonus replaces money that people on welfare currently receive. It doesn't increase the amount that people now receive if they are on welfare."

People who live in poverty have enough cruel jokes played on them every day of their lives. It's unfortunate when we -- and I include the Legislature collectively -- who purport to be working on their behalf also play cruel jokes, however unconsciously. This happens because we have not done our homework or have not prepared ourselves adequately in outlining the programs we put forward.

I trust the government will put forth an apology to the persons who received the second letter saying that the first letter was false. The first letter looked like an election ploy rather than the reality it was intended to be. I think it's important that a follow-up letter go out to really explain to people what has happened, apologize for the mistakes and try to convince people of what the minister was saying in the House: not only will they lose the sales tax credit and therefore receive less money than they expected -- which even this article hadn't quite figured out -- they may be receiving some other extra benefits that the minister has alluded to. If so, those extra benefits should be explained to them.

I think it's very crucial that all our constituents have some trust in government. When we make mistakes -- even the Premier admitted a number of his mistakes publicly, and I give him credit for doing that -- in any ministry or any part of government -- or in opposition -- we should be willing to admit that publicly, and explain clearly and concisely what the advantages may be for these people. It's simply not enough to say that extra bonuses will replace this -- say $200 for some families, which is a very crucial amount when you've been planning for it.

Referring to Bill 6 -- and we'll be discussing it in detail in committee later on -- one of the things that the NDP government has prided itself on is trying to put things forth in plain language. This bill is anything but plain language, which any of you will see if you try to follow it through. It's written by either a lawyer or an accountant -- pardon my comments about them -- because it's written in technical language. I appreciate that you may need to write it in technical language, but if you write it in technical language there needs to be an explanation with it. In my own profession of theology a lot of stuff is written in theological language nobody can understand, either. So I understand, and this is not particularly against that. But any profession which writes for its own communication is not writing in plain language for the community. If we want them to understand and work through this bill, they should understand it.

I would like to be corrected if I'm wrong, and if I'm not then it might be helpful to others. But in looking at this bill, it seems to me that we have discussed the B.C. Benefits package and whether it's good or bad, and whether the bonus provides help or hindrance to families. If I understand this bill correctly, it doesn't really have anything to do with that. It's simply a technical bill to give permission for the provincial and federal governments to work together in sharing income tax information and establishing a system for paying the money to people in a different fashion than we do now.

If the provincial government had decided to administer this strictly on their own, they probably wouldn't have brought a bill into the house; they would simply have done it by regulation. But since they had to work with the federal government, it was important that there be a legal document in order that they could work between the two governments, because there's also permission within this bill to share private information in the income tax system between the two governments. For many people that has been a sacred trust, and that kind of information could not be shared with anyone outside the federal government system. I think we need to be aware that this is what is happening -- that we're using one system and taking advantage of that system. This may be a wise thing to do, but I think it's important that people understand what we're doing. I'm sure that some people will raise the issue that this is another infringement on their privacy and that somebody else is now digging into their finances.

Those on really low incomes who don't pay income tax anyway are probably not going to be very concerned about this, but some of those who pay income tax may be. I think there are issues here which we'll discuss further in committee stage -- to clarify the amendment and also to ask why the sales tax credit had to be cancelled. Why was it cancelled? What was the rationale for cancelling it and depriving families of anywhere from $50 to $300 or more a year, depending on the size of their family household?

There are many details to be clarified, and there must be communication with the people who are affected by this. There's an apology to be made to those currently receiving welfare payments for the misleading information that has caused them a great deal of concern. This has certainly been reflected in the calls to our own constituency office.

[7:30]

Since we will have an opportunity to discuss those in more detail later, I would affirm again that our caucus supports these moves and trusts that families will be better off because of them.

A. Sanders: I rise to congratulate the government for Bill 6. I feel that this is a significant contribution to this sitting of the Legislature. I suppose that in some ways I'm here to provide the reality clause to government, and I've perceived over the past few weeks that this may, in fact, become my job.

I work with the working poor as a physician in British Columbia. I've done this in northern ridings, where the working poor are very prevalent and are a large proportion of society. I now have done it in the Okanagan area, where I find that the type of practice I do is divided primarily between the working poor and families who receive welfare to sustain themselves and their children.

One of the things that I feel is important about the working poor is that we must always remember -- especially in terms of social services, health care and education -- that these are the children who often come to school without 

[ Page 327 ]

appropriate nutrition. This affects them, and it affects their roles in society and in the future. These are the children who come into my office -- and who, in the past, came into my classroom -- with inappropriate dentition and dental care. These have marked effects on them later in life, both in terms of what kind of employment they can be eligible for because of appearance and in terms of their overall health care in childhood.

These are the people who come in, and their MSP payments need to be made by them. These are the people who, when I see them in the office and prescribe medication for their children, will often come back two weeks later with their children still unwell, and I find that they have not bought the medication; they couldn't afford it. They are the ones who are too proud to tell me that they have not treated their children, and now they're back with a more serious condition.

These are the people who do not have extra Christmas bonuses to provide for their families and their relatives. They do not have child care expenses or respite care despite the fact that they may have several children and no one to help them.

Along with poverty come many issues. Some I've touched on, such as malnutrition and the potential for sensory deprivation in a technological environment. More importantly, I find that along with the working poor go a number of other issues. These issues run along the line of abuse. These can be sensory abuse, emotional abuse, sexual abuse and physical abuse.

I find quite often that the levels of stress that occur in these families lead to all of these. These thereby incur an increased load on our society in terms of our health care and our legal and judicial systems -- in terms of almost anything you can imagine in addition to what kind of adults we could have provided for in our society if, in fact, this had not been the case for them as children. I also find a very much increased percentile for addiction, depression, substance abuse and communicable disease among people who cannot provide for themselves.

I think that in this society and in this province we've really missed the boat for quite some time. We've provided for welfare recipients quite well. I think there are things that need to be revamped in that system, and I think that the system does not provide totally as it should, but the group that I have had the most concern about over the last 12 years as a physician has been composed of those people who are not on welfare, who do not have those benefits, who do compete and provide in our society and who are taxpayers, but who just cannot provide the necessary social conditions for their families. In my experience, quite commonly these are women, and they are single women. They are single women without support, because we have not yet provided them with the conditions where they have guaranteed spousal support.

In terms of the overall bill, I think this is a huge step forward. This is the kind of thing that I have expected and hoped for from government. In the future, I am hoping I can take home more good news from this government on my weekends, such as the implications of Bill 6.

I think there are some things we need to work on. Specifically, I still have a gut problem with the misleading literature that went out prior to the election, which indicated the family bonuses in terms of those people who are welfare recipients. This is another issue of truth. I think that if we start being upfront and truthful any time soon, it won't be soon enough, and it can go a long way to restoring some kind of faith in the public service in British Columbia.

The second problem I have -- and many who have stood before me have said whether it's a big deal or a small deal -- is the incremental decrease in money for welfare recipients and their families. Despite the fact that it's a very small amount for many people, $4 is $4. I think that in this time, when we very seldom have people move down. . . . We amalgamate unions, and they have parity. We talk about other provinces and look for parity. In the discussion sessions, I would like to see an amendment to this act that moves towards parity for people who received welfare last year and will receive it this year. I would like to see that we have an incremental amount put on top so that we are not telling people that there is a decrease in British Columbia for families in need.

J. Weisgerber: I want to make it clear that I'm rising to speak in support of this legislation. For a long time governments have struggled to find a way to encourage people to move away from welfare into relatively low-paying jobs. It has been a challenge, and I think the solution -- the B.C. Benefits solution -- is a good one. In his introductory remarks, the minister said that it was designed not only to encourage people to move off welfare and into relatively low-paying jobs but also to encourage people not to give up and fall back into the welfare trap. Again, I think that is very important. So I speak in support of what I think is a good move, and one which will encourage people to become less dependent and more independent. I applaud the government in that regard.

I want to raise some questions for the minister, however. The original announcement in November indicated that the program would be a $258-million-a-year program. It was later scaled back. It appeared to be scaled back somewhere in the neighbourhood of about $4 a month, and I think was reannounced as about a $230 million program. When I look at the estimates and at vote 59, I see only $143 million for this current fiscal year, recognizing that benefits are going to start on July 1, leaving nine of the 12 months of the fiscal year. But by no stretch of the imagination is there enough money in vote 59 to fund the announcement in November and the revised announcement which came somewhat later than that.

Most recently, I think, the government talked about a program that was around $239 million. I've made some inquiries. The $143 million allocation under vote 59 is impacted by about $30 million in programs for seniors, which has been in that vote for some time. That would appear to me to reduce the available money for B.C. Benefits for this fiscal year to around $113 million. Again, looking at an announced program -- $250-odd million -- it's hard to imagine how the minister is going to find enough money to meet his obligations out of that vote.

Today in his opening remarks, the minister, in talking about the reduction of the child sales tax credit, said that while that would result in a reduction of $6 million roughly, there was another $18 million in this program to assist families on welfare. I assume the $18 million comes out of the remaining $113 million. It appears to me that vote 59 includes something less than $100 million to fund nine months of a program that was announced as a $258 million program. Something doesn't add up. I will look for the minister to give us a response tonight. Failing that, we would want to ask some rather pointed questions in committee about that.

The next question I'd like to ask the minister is: is this program going to be administered by the federal government? I assume they're not doing it out of the bigness of their hearts. I assume that there will be a charge to the province for sending these cheques out on a monthly basis, and I wonder if 

[ Page 328 ]

the minister could tell us what that charge will be, what the cost of having the federal government administer the program will be, whether that too will come out of vote 59, and whether that will reduce the $90-odd million by a further amount.

To put it as concisely as I can, I have a great deal of difficulty reconciling vote 59 with the announcements that have been made with regard to B.C. Benefits.

I spoke early on in support of the program. My support is very genuine. I think it's important to encourage people to move off social assistance and for them to not suffer as a result of that but, as the minister said, to see it as a step up rather than a step down. I agree.

Mr. Minister, your benefits run up to people with a net income of $56,000. I don't think there is any huge temptation for someone making $56,000 net income to say: "I'm going to give it all up and go on social assistance." It simply doesn't happen. While the program is important, and while I think that dealing with people at the $18,000 net income level is important, I think that in typical NDP fashion, you've gone too far; you've extended the benefits to too many people.

I think it's no coincidence that the announcement of this program was pre-election. You were trying to reach out to as many people as possible with benefits that don't meet the test the minister outlined in his opening remarks. Giving benefits to people with a $44,000 income doesn't appear to me to be something aimed at deterring people from going on welfare or encouraging people to get off social assistance. It just doesn't work.

I took a bit of time to reflect on how Bill 6, the B.C. Benefits, would affect members of this assembly. You might be interested to know that members of this assembly without any other income, with one child, would not be entitled to benefits, but a member of this assembly with no other income and no deductions would be entitled, if they had five children, to $302 a month.

[7:45]

When I say that we've cast the net too far. . . . Some of the wags down the way are trying to equate us with the working poor, and while we all have our criticisms about some of those things, the fact of the matter is we are not the working poor. We are very privileged to be here and, quite candidly, I don't think members of this assembly require a $302-a-month allowance to look after their children. For the benefit of those members who are intrigued with the idea, if you were to make a maximum RRSP contribution, then you would be entitled to $36 a month for one child and as much as $382 a month with five children.

The point is that the program as announced is a sensible one. It shouldn't extend itself to families with net incomes of $56,000. That makes absolutely no sense. Perhaps somewhere in this maze of numbers, in this apparent lack of funding for the program, there are some errors in eligibility beyond those which were discussed earlier on. The initiative is good, and the idea of making it attractive for people to get off social assistance is a solid one, but the notion of extending benefits to the extent that this program does is one that I think is flawed, insomuch as taxpayers are looking for less government -- smaller government. I quite candidly don't think we can afford to provide these benefits, nor will we over time be able to continue to provide them.

J. Sawicki: I wasn't actually intending to speak on this bill, although I am very excited about it. I am motivated by the remarks of the member for Peace River South to stand up and say a few words.

I represent Burnaby-Willingdon; that's Metrotown, downtown Burnaby. Probably half of my constituents pay rent. Anyone who has driven by Metrotown knows that there are probably about six or eight blocks of 1950s three-storey walk-up housing. I have knocked on those doors, and I have watched these people come into my constituency office. I would like to say to the member for Peace River South that for those families making, as he suggests, $50,000 a year, with four children -- trying to clothe them, feed them, make sure that they have some sort of dignity of life in urban communities in terms of being able to mix socially with their peers -- it is tough.

I agree with you. Perhaps we, in this House. . . . I don't need this family bonus; I don't have four kids. But I want to say that I think this bill is going to make such a tremendous difference to people in my riding -- low-income families who are working in the retail sector, working at McDonald's or doing gardening. They are working, doing anything they can to try and make ends meet, and this would be tremendous news for them.

Since I'm on my feet, the other part of this bill I want to mention is the very intent for which this bill was brought forward; that is, to ensure that those people who are on social assistance -- and quite frankly, I have quite a few of those too. . . . Because my constituency office is very close to the Metrotown area, many of them come into my office trying to get some assistance and help to make ends meet. Time after time after time it's the same story. These people want to work, but even if they can find the job, they haven't got the bus fare to get to the job. They haven't got the money to buy the clothes to go to the job, and they know that if they take that job at $7, $8 or $9 an hour, their families are going to lose, and they're going to lose big. They have felt trapped into that endless cycle of being on social assistance.

I'm pleased to hear the positive comments from across the floor. I think that this is one of the most exciting initiatives that our government has brought in, and I am very proud to vote in favour of this bill. I am very pleased to hear the positive comments from the members across the floor, and that includes, of course, the member for Peace River South.

G. Wilson: I intend for my remarks to be brief. Most of what has been said covers the remarks that I would make, and I echo some of the comments. In second reading one speaks to principles of bills, and in that regard I have a couple of items that I think bear mentioning when we look at amendments to the Income Tax Act and the provision of what we're trying to put in place. I was intrigued by the comments from the member for Okanagan-Vernon and the last comment she made with respect to the notion of the millions that are already from social services, and looking at the 120,000 families on welfare and what could be done with respect to redirection of funds. I hope that in committee stage that can be explored in more detail, because that's an intriguing concept.

We might want to look at the prospect of a much more focused targeting of dollars in order for those dollars to go where they're most needed and not where they're not needed. I have to say in response to my colleague from Peace River South, the leader of the Reform Party, that if you were an elected MLA, a single parent with five kids, you'd be broke. That's just the fact of it, I think. Nevertheless, having said that, 

[ Page 329 ]

we have to be very careful that what we're doing here is tinkering with a system that needs an overhaul, and a major overhaul.

So while I think that this a commendable first step, I would pass through to the Minister of Finance -- and I know that that minister is listening to this debate carefully -- that we need to take issue with the whole prospect of the Income Tax Act in the province of British Columbia, and we need to seriously consider. . . .

I'm sorry that my remarks have driven him from the House with such vigour, but we certainly do need to consider a much broader overhaul with respect to income tax provisions in terms of our relationship. And there you are. As I didn't slam the government, he's back in his seat thinking he was avoiding a barb which wasn't there.

But that proposition needs to be addressed, because the inequities that exist within the Income Tax Act are being addressed only in one regard in this particular bill. There are much broader areas in which the Income Tax Act is applied because of the duality of the system of taxation, both provincially and federally, that need to be much more thoroughly discussed on a broader level.

While I can support this in principle, and I will, I look forward to hearing in detail from the member for Okanagan-Vernon what was intended by her remarks. I think that's intriguing and may in fact lead toward a useful amendment. I would caution the minister that this bill may not, in effect, do what it's targeted to do because of the broadness of the scope of the language that's included within it.

The Speaker: Seeing no further speakers, I call on the Minister of Finance, whose remarks will close debate on second reading.

Hon. A. Petter: I will briefly respond, in closing debate, to some of the comments made. First of all, let me say that I appreciated the words of support for this initiative that were forthcoming from many of the members opposite: the members for Saanich North and the Islands, Okanagan-Vernon, and others. I think that's always appreciated when a lot of work has gone into an initiative of this kind. I do believe it is a very worthwhile initiative. To get some credit -- albeit in the evening when folks aren't watching -- is nice nonetheless and is appreciated on this side of the House.

I believe this is a very important initiative, and one that will make a fundamental difference to British Columbians. It will set a new approach to dealing with issues of poverty and social assistance, and I think it marks a new beginning.

I do want to respond to some of the comments made opposite. I don't want to quarrel back and forth. I know, though, that the members opposite are very, very careful in the language that they expect government to use, and I just want to mention that in the Liberal document from the election, page 17, the reference was to reduce the welfare rate for employable recipients. If that was not what was intended, or if there was some clarity or fuzzification or fine print somewhere, I accept that, but I accept it with the same tolerance that I know the members opposite accept our explanations when there are small corrections that have to be made.

That leads, I guess, to some of the questions that were raised about information provided to welfare recipients, in which the members opposite seem to be very, very careful about the language they expect the government to use. I want to be clear about this. Welfare recipients in British Columbia in May received a circular that set out very, very clearly how this program worked in the pre-election period, and that. . .

An Hon. Member: In May?

Hon. A. Petter: Yes, in May.

The intention of the program was not to add to their benefits but to displace the benefit and make it a portable benefit so they could work and continue to receive the benefit. It's so clear from all the documentation that was released around this program dating back prior to then that this was the intention of the program. So I accept the member's concern that the April letter was not as clear as he would have liked, but I don't think there can be any credible case made that this information was not communicated to welfare recipients.

On the question of the $50 sales tax credit, this program has to be seen as part and parcel of a larger initiative, the B.C. Benefits initiative, which is designed to take the same amount of money and to reallocate it in a way that achieves the desired social objectives. Part of that was the three-month residency rule; part of that was the reduction in rates for single employables; part of that is the elimination of this credit; part of that is the family bonus; and part of that is the introduction of new important programs targeted at social assistance recipients in the areas of child care and dental benefits, and other transitional payments. To simply disassociate that from the rest of the package is to miss the point. The point is that social assistance recipients are enriched by these programs. These programs' value is three times the loss of value of the credit. I think we have to look at this package as a whole, and not take out one stream for a political purpose or political effect, which it seems to me the opposition is trying to do.

I want to respond in very general terms to the question that was put by the member for Peace River South about how this program is costed for in the accounts. There can be a more detailed discussion certainly during estimates or, if he wants, more information during third reading. But basically this is a tax credit. This component of the expenditure is accounted for in a reduction in anticipated revenue under income tax, not in any particular vote. Other aspects of B.C. Benefits are accounted for in votes, and that's why the numbers that you're looking for are not accounted for in votes. This is a tax credit, and therefore the cost of this program was factored in as part of the revenue projections for income tax revenue.

I think that helps to explain why the number doesn't appear in the way the member expected it. We anticipate the net cost of this program to be in the range of about $100 million. The total cost is in the higher range the member mentioned of $250 million or so -- I don't have the exact number in front of me -- but that is offset by the saving in the reduction in welfare payments. So I think that is the explanation the member was looking for in general terms.

With that, hon. Speaker, I'm very pleased that we've had a chance to debate the purposes of this bill. I'm pleased that members understand its progressive and forward-thinking nature. With that, I again move second reading of the bill.

Motion approved.

[8:00]

Bill 6, Income Tax Amendment Act (No. 2), 1996, read a second time and referred to a Committee of the Whole House for consideration forthwith.

[ Page 330 ]

On section 1.

F. Gingell: Section 1, as we know, repeals the sections that deal with the child portion of the sales tax credit. As the minister explained just now, rather than it being an item that's included in the budget, it becomes what's known as a tax expenditure. So I turned to the tax expenditure section of Budget 96 Reports and wondered why it wasn't there. Well, now that the minister has some staff, he'll tell you that's because this is for '95-96, and what we're talking about is '96-97.

But, correct as that is -- and it's not included -- I'd like the minister to think about the issue of. . . . What you've shown for provincial income tax revenues for '96-97 is now missing $110 million, the $110 million that you estimate the federal government will deduct from British Columbia's share of the tax payments that they send to us every three or four days. If you add that on, that means that you were anticipating personal income tax revenues in the province will go up by something like 6 percent this year over last year. I haven't had a moment to do all the work, but you clearly have also reduced the tax rates. How comfortable do you feel with your budget estimates for '96-97 for personal income taxes when one recognizes that this $110 million expenditure for this program comes off those, and the other tax reductions as well?

Hon. A. Petter: The intention of this program is to try to provide a self-supporting program through the various changes that take place. It's a demand-driven program, and the amount of demand is determined by the number of people who are eligible under the system. So we have done our projections as best we can, both on income tax and on the demand for the program. I believe the demand for the program is slightly exceeding, in fact, what our original projections might have been on income tax. On the other hand, I understand there is a good likelihood of agreement with the federal government to offset that discrepancy to some extent with payments to aboriginal people. So on the whole, we are comfortable that we will be able to accommodate the program, but we're going to have to monitor it and check the demand for it against the adjustments made in the estimates.

F. Gingell: Do you have any estimate of what portion of the $110 million might apply to people from aboriginal communities?

Hon. A. Petter: On an annualized basis, I understand, about $10 million -- and $7 million, perhaps, for the component for this year.

F. Gingell: So that's $10 million out of the annualized amount of about $145 million. When you look at the tax reductions that you've put in, whether they come in January 1 or July 31, and this $110 million is missing, you must be anticipating a tremendous explosion in personal income taxes payable to the province. We're now at numbers that are well in excess of 6 percent after the tax cut.

Hon. A. Petter: I don't have the information at hand on the exact components that went into the estimate for personal income tax revenues. I'd be happy to provide that to the member or to bring it up again in estimates. I don't think the numbers are exactly as the member indicated, because in fact demand for the program is slightly higher than expected. The benefit side, therefore, should be slightly greater. The takeup on income tax will be somewhat greater as well, so there will be an offsetting purpose.

Interjection.

Hon. A. Petter: Well, hopefully the benefit side, though, will be greater in terms of the reduction in social welfare costs. There might be a slightly higher cost in income tax. So the numbers are not exactly as the member portrays them, but if he wants information on the general forecasting around income tax revenue, I'd be happy to arrange to provide that to him either in a written form or during my estimates.

F. Gingell: One of the problems with doing it in this fashion is that the only way the amount of money we spend annually and the amount of money you budget annually will appear is in the budget reports as a tax expenditure, which is not a specific calculation. There are estimates of what the reductions in sales tax are, because we don't have tax on restaurant meals, books or children's clothing. But in this particular case we should be able to tell exactly what the costs of the program are, because they're going to be specific deductions from payments by the federal government to the province in their collection of provincial income taxes.

Could the minister tell us how he means to ensure that the people of B.C., and this Legislature specifically, are aware of these amounts on a regular basis? For instance, in the interim financial statements, are you willing to show gross personal income tax and deduct the amounts that were withheld for these payments, in the way that you do with forest revenues, where the gross amount is collected and the deduction shown for. . .

Interjection.

F. Gingell: It's sometimes shown; it's shown in the January statements that way, but not in the quarterly statements and not in the estimates in that fashion.

. . .to show the gross tax receipts and then show a deduction, so we know what the. . .?

Hon. A. Petter: Certainly that will be reported in the documents that are released towards year-end and in the financial statements. Once the program is up and running and we have more certainty around the cost side on the tax side, and around the payment side on the savings in welfare, if the member suggests they have to be built into next year's budget documents for the following year, I'm quite prepared to consider that and discuss it with the member.

G. Plant: I suppose it is because I am a lawyer that I have the temerity to try and figure out the formula in subsection (3)(b) of the proposed section 4.5. What I'm concerned. . . .

The Chair: Excuse me, hon member. We tend to go through these one section at a time, and at this moment we're on section 1.

G. Plant: I'm sorry. I thought we were on section 2.

The Chair: We're still working on section 1 here.

[ Page 331 ]

M. Coell: We identified a reduction of $200 to $250 in the worst-case scenario of cash-out-of-pocket that we believe is part of the fallout of this act. In speaking to your staff today, there would be a $15 million saving -- both the Finance and Social Services staff.

The minister mentioned that there would be a number of programs to supplement that. I understand that although people may be out that cash, there may be dental or work-entry programs. I wonder if he could elaborate, or if the Minister of Social Services could help him elaborate, on what programs are going to make up the difference in savings from the exclusion or the repeal of the child portion of the sales tax credit. I think that's important for us on this side of the House to know. If there are going to be savings, how are those savings spent, and on what programs?

Interjection.

Hon. D. Streifel: I do speak, actually. I'm generally considered to speak rather well, but I understand that there's a protocol between the House Leaders this evening that does not permit me to speak my heart. How's that?

In some of the programs there are increased child care subsidies and spaces that are targeted primarily at income assistance families. The child care and these resources will flow through with the families when they move into the workforce. There's a transition-to-work allowance of up to $150 that covers all IA recipients and those that are moving into the workforce. There's a Healthy Kids initiative that also helps out. I understand that for the first time, under some of these programs. . . . It was the two-parent families that weren't covered under some of these programs in the past. They are now covered for optical care, dental care, and the new job search and training programs. Those are the overall benefits that will apply to all in the system now, whether they are on income assistance or in the workforce employed in what's generally described as a low-income job.

G. Wilson: I just wanted to pick up on a comment that was referred to by the member for Delta South, who I think is onto a really, really important issue. As I understand it, the way this program is going to work, given that the passage of this bill occurs, is that this becomes obligatory to the provincial government. Yet the program, in large measure, is administered by Revenue Canada, and therefore there is some kind of agreement between Revenue Canada and the province.

Now, it's critical to us, if we're to track costs of this program and to be able to understand how the provisions of this are going to reflect upon both the cost to the recipients as well the cost to the government overall, that there be some mechanism to see the detail of expenditure and how that program is functioning. I don't know how that's going to work under this act, because there's no provision for that. Just the promise of the minister to provide us with that information is not very comforting, frankly, because we now will have a program that's obligatory to the province and which we're going to be at the mercy of Revenue Canada to administer. That doesn't give me a lot of comfort.

Hon. A. Petter: The use of the mechanism with Revenue Canada makes sense because this program works off information related to income tax and the federal tax credit. Therefore, for reasons of efficiency, it makes sense to use the structure that the federal government has established. There's a very detailed memorandum of understanding, I'm informed by staff, that governs the disbursement of cheques by the federal government on our behalf, and ensures that it is done in a way that's in conformity with this program and that control is maintained by the province. In terms of reporting, there is an annual report on tax expenditures. Members indicated that perhaps we could improve on that and find a way of anticipating, through some prior notice on tax expenditures. I'm prepared to entertain that, but there is a report done annually and comprehensively on the tax expenditures.

[8:15]

G. Wilson: I just wonder if the minister might, for the comfort of members, allow us to be briefed on and to read the memorandum of understanding that exists, so that we have some understanding of exactly how we're going to track these funds. It's important for us as a province and certainly as members of the opposition to be fully aware of the legalities involved in whatever memorandum of understanding has been undertaken on our behalf.

Hon. A. Petter: I'd be happy to arrange a briefing for the member at an appropriate time.

J. Weisgerber: The minister raised a point that, quite candidly, hadn't occurred to me until his remarks, and that is to do with aboriginal people living on reserve, as beneficiaries of the federal welfare system, essentially. As I understand it British Columbia non-aboriginal people who are on social assistance will have their payments reduced, and automatically, on the basis of their income tax return, the child benefits will be sent to them. What's the mechanism for people who receive federal benefits? How are they identified? How do you know who is receiving benefits, and why would the province want to undertake a shift in responsibility from the federal government to the province with respect to social assistance needs for aboriginal people?

Hon. A. Petter: I'm informed that we are very close to concluding and signing an agreement with the federal government in which there will be a commensurate reduction in welfare rates for first nations. That reduction will then be rebated to the federal government and through the federal government back to the province. Those are the savings I was referring to earlier that will on an annual basis probably amount to about $10 million to the province as a result of accounting for the fact that the responsibility primarily for those on-reserve first nations citizens is that of the federal government.

J. Weisgerber: A couple of points. First of all, it is rather difficult for me to accept the fact that a program announced in November 1995, implemented by this legislation today, with cheques to be made retroactive to July 1. . . . We're still in the process of negotiating with the federal government. That's the first thing that causes me some anxiety. In particular, given the very warm relationship between the Premier and the federal government, one wonders whether or not we should take much comfort in that agreement ever being fulfilled. The second question is perhaps more technical: how will those people be identified?

Hon. A. Petter: Dealing with the second question first, I understand that there is a reporting relationship established between the Department of Indian Affairs federally and the first nations that will identify those first nations citizens on welfare to whom this procedure will apply. Although perhaps 

[ Page 332 ]

on other issues the relationship with the federal government is at times a little turbulent, let us say, I'm assured that in this case the understanding of the federal government is quite firm. It's simply a matter of formalizing and signing an agreement that has already been reached in respect of this matter.

J. Weisgerber: If I understand it correctly, then, there is a series of reportings that involves the federal government advising the province, and the province advising the federal government, and now into the mix you've put tribal councils and bands who may administer their own welfare programs. You are depending on them to provide to one level or another of government a list of the people who are social services recipients at the band or tribal council level. Let me finish by saying that it sounds cumbersome even for government. It seems to me that this is a kind of afterthought, or we wouldn't be, on the eleventh day of July, unable to be very finite on how the system works, without even an agreement in place.

Hon. A. Petter: First of all, let me say at the outset that the First Nations Summit has been involved in securing this agreement. The member may think it's cumbersome or burdensome, but I think it's a lot less so than if we had not reached this agreement and ended up inadvertently providing funding that constitutionally remains the responsibility of the federal government.

Staff inform me that the Department of Indian Affairs is satisfied that they can require and obtain the appropriate information. Obviously we'll have to ensure that they do so and that the information is as full and accurate as it can be, because it does have significant potential to provide savings to the provincial treasury.

F. Gingell: I'd like to suggest to the Minister of Finance and the Minister of Social Services that the concern we have about the $4 a month -- or the $4-and-whatever-it-is; $4.12 a month; $50 a year -- is that it's for the people who are on welfare, not the people who have moved from welfare into work. They are not going to lose. It's the people who are on welfare only; it's the single moms who are at home looking after their own kids. They're not in day care; they're at home. So the day care provisions are most helpful in helping them to get to work, but once they get to work they get their $50 back. But before that, it seems to me that they're not going to get any advantage from day care.

Dental work, yes. We should be doing the dental work, irrespective. . . . There's a lifetime investment in our children having their teeth properly looked after. I'm sure it will add to our health costs if young children on welfare are deprived of good dental care, but I'll bet you that at this moment in time, small children of single moms on welfare don't get their teeth looked after because they simply don't have the money.

You're doing the right thing; bringing back dental care is doing the right thing. But I'd like to suggest to you that it be in addition to, and over and above, the present level of support that they are receiving. The $4 a month they're going to lose is important to them -- it's cash. It's money that they spend for milk, groceries and bread. Their diets are going to be that little bit worse if they don't have it. They're always struggling. We work in our constituency offices, and every day we hear about the problems of young moms with children who are on welfare. You've brought in this program, and we support it, but those who need our help the most are being left out. The dental care is good; that's going to pay dividends. But it's not happening now. The child care is for people with children who are getting off welfare and into the workforce. That's wonderful, but it's not helping those who aren't able to go to work because they have young children, because you've made the decision -- and we've agreed with you -- that the best thing for them is to stay home with their young children and bring them up.

So I really do ask that you revisit this issue, and I think you should revisit it this evening. We're talking about $12 million or so that perhaps you can find by opening up some jobs to open tender rather than keeping them union-only. You can find it by looking at any one of the issues that we have brought up concerning the way this government spends money, whether it's been in contracts for the construction of schools. . . . I appreciate that that is capital, but we'll help you find it. If you'll take it, we'll make a suggestion on where you can cut out $12 million, to ensure that these single moms with families are not deprived. It's important, and I'm surprised that a government that purports to look after the interests of these people has so cavalierly -- if that's an acceptable word and I've pronounced it correctly -- ridden over it.

As I said, I'm going to bring forward an amendment to section 2, section 4.5. I don't think it's the right amendment. I'm not sure that it works. I think maybe the amendment should be to this section, but it's highly technical to do it properly. You need the skills and the expertise of the lawyers that work in your legislative and public policy groups. But the amendment will deal with the principle of it. We can sort out the means by which it is accomplished later.

But before we move on from this issue I really would ask that you think about it again. You're doing something good, but you're ruining it with one little part. I really believe that. You haven't thought it through. Now's your opportunity, at half past eight on a Thursday night, to put it right.

Hon. A. Petter: Let me just very briefly reiterate what I said earlier, and that is that it's easy, I suppose, in the course of a debate on one small part of a large package to disaggregate one small part and say that this is the mistake, as the member has done.

An Hon. Member: That's our job.

Hon. A. Petter: And that's your job. I appreciate that, hon. member. But your job is also, assuredly, to look at things in a larger context, as the government had to do when it designed this program. It is important to provide those who are on social assistance access to child care in order to receive training or go to a job interview. It is important to provide assistance by way of dental care and eye care for children. To us this seemed to be a significant benefit that we could provide and that would be of assistance. After the fact it's easy to come along and say: "Gee, it's just too bad that this had to go this way and that had to go that way." I appreciate that. But I ask the member's indulgence and understanding that nothing was forgotten here and that the benefit being provided to those on welfare is much greater through the provision of that kind of support than the once-a-year, after-the-fact payment that comes through this particular income tax credit. Within that context, and looking at the larger picture, I would ask the member to reconsider his position.

On the other hand, if over the course of the next year or years the member wants to look at ways of saving dollars elsewhere, I'll be quite happy to work with him. If that frees up opportunities for us to further assist the working poor and others with additional programs or assistance, I'll be happy to work with him on that as well.

[ Page 333 ]

[8:30]

F. Gingell: I don't argue in any way that these additional benefits are important. I think they will pay dividends both for the families, who come first, and the citizens of the province in general. But the problem with people on welfare getting by from cheque to cheque and getting further behind. . . . Once a year getting a little extra -- $200 or $150 or whatever the amount may be -- is important to them. It does make a difference. I believe there is sufficient evidence that many of the benefits you describe, good as they are, will not apply to a large number of single moms on welfare with children. With that, minister, I'll sit down and be quiet.

V. Anderson: Just to follow up, I agree with our Finance critic on the points he's been making. Earlier in second reading I made the suggestion and request that the minister might at least go as far, when those cheques are sent out, as sending an apology, because that's important for those people who have felt misled, misdirected and hurt. It doesn't cost anything to send an apology -- it's a very important principle -- and with that apology, to give an explanation to them of what benefits they receive in its place. As this gets off on the right foot, it's important that the recipients understand that they're not being taken advantage of and that their concern is appreciated. I hope the minister might be willing to undertake that very simple tack of a letter of apology to those persons for having inadvertently been misled, and an explanation.

He shakes his head, because he indicates that an apology is not appropriate, I gather. I would like to disagree with him on that.

Hon. A. Petter: Perhaps the member wasn't here when I did explain that a letter, a comprehensive explanation, was sent out in May to every social assistance recipient, making very clear how this program would work: how it would not reduce their overall benefits, but it would mean that the family bonus cheque would be offset by an equivalent reduction in their social assistance cheque. That was clearly explained in the letter directed to welfare recipients in May. There's no reason to apologize, because it was clearly said. Certainly there are efforts to provide further and better information, and those will continue.

R. Neufeld: To the minister, a quick question: could the minister explain. . .? He continually says "in May." Could you give me a date in May when those letters would have been mailed out?

Hon. A. Petter: I believe it went out with the cheque on the last Wednesday of the month.

V. Anderson: I'm wondering if the minister would be kind enough to make a copy of that letter with this clear explanation available to us, so that we might understand it as well?

G. Farrell-Collins: The member for Peace River North raises an interesting question, because the minister has stood up and said the information was made available to these people in May. My recollection was that the election was on Tuesday, and the day of the letter going out to the welfare recipients would have been on the Wednesday, the day after the election. That makes a big difference, because the information in the letter which the members have alluded to went out well before the election, and the letter informing the recipients, if it's what I understand the Minister of Health and the Minister of Finance to say, went out on the last Wednesday of the month, which would have been the 29th, the day after the election. That means that for all the lead-up to the election, during the election, the day of the election and indeed probably part of the day after, people thought they were getting that $103. The clarification only arrived the day after the election. Can the minister clarify if that's a correct or an incorrect understanding?

Hon. A. Petter: I'll check on the date that the letter went out and get back to the member. But the more fundamental point is that this is really a debate without a lot of meaning. The entire purpose of the program, as has been communicated to the people, was to enable and encourage people to get off welfare by making it more profitable to obtain work, not to increase remuneration for welfare recipients. That has always been the purpose.

I will check on the date of the mailing. I had assumed, because it went out in May, that it was prior to the election; I may have been wrong in that regard. If I am, I apologize, and I'll provide that information to the members.

G. Farrell-Collins: I just want to say that it's not a debate without meaning; it's a very important debate. It's a critical point, because there were 70,000 letters that went out to welfare recipients. I've seen the letter that went out well before the election telling them about this bonus that they were to receive. If the clarification of that, the fullness of the explanation, didn't arrive until the day after the election, then we've got a different problem here.

Interjection.

G. Farrell-Collins: We do. The minister may find that humorous, but I think it's important. If that's the case and we determine that. . . . All I want to say is that we agree, and we've said that we agree with the intent of the program. But if the information that was made available to people was incorrect up to and including the day of the election, and if the day after the election the information to clarify it went out, then I suspect that we have a slightly different and larger problem. I'll be glad to hear from the minister when we get the clarification on exactly when that information went out.

F. Gingell: You said, and we appreciate, that one of the major purposes, and the way this program was designed, is to encourage people off welfare and into the workforce. Would the minister please advise us if those who are on welfare and who aren't going to get into the workforce because they're home looking after their kids are going to lose the sum of $50 a year for each child? Was that intended to be an incentive to get these people off welfare and into the workforce?

Hon. A. Petter: I'm not sure I understand the question. The purpose is to try to encourage those who are able to seek work to do so. The removal of the child portion of the sales tax credit had more to do with funding the program in a way that provided the benefits. It was the family bonus that was intended to provide the step up. The removal of the child portion of the sales tax credit was part of the overall funding and rationalization of the program to provide additional benefits of the kind I've already described. I don't think it was an intentional effort to do that, because it comes off for everyone.

F. Gingell: Just to clarify, my point dealt with the single moms on welfare who aren't seeking work, whatever that 

[ Page 334 ]

number is. I appreciate the issues for those who can't seek work, and yes, taking $50 a year away for each child will be another incentive to get them off welfare. But for those who are not in that position to seek work, not in that position to use day care. . . . Back to the original issue, it seems that if you intended this to be another incentive to get people off welfare and onto work, you made it a little too broad. You've gone and pulled in a group of people that you didn't want to pull in.

You can tell that we are concerned about it, and I can tell, Mr. Minister, by looking at the faces of the members across the House, that they're concerned about it, too. I think you slipped up on this, and I think they're as concerned about those single moms as we are. In fact, I hope they are. I know some of them are, because I've heard them speak in this House before. Let's see if we can find a solution for this problem right now.

V. Anderson: When the minister is looking at the letter. . . . I have one dated April 26. It went out in April 1996. That letter indicates the amount of money a person. . . . It's a personalized letter, because it indicates, in this particular copy that I have, that they would receive $12 per month because of their circumstances. If that had been filled in for $103 a month, nowhere in that letter does it indicate that a person presently receiving welfare would have also had that taken off their other cheque. They would be left with the impression that they were going to get the $103 plus what was currently on their cheque, the same as the other person would receive an extra $12. . . . The letter is misleading, and that is why I am concerned about an apology. This was a personal letter to each person, and nowhere is that clarified -- unless there was another letter that went out after this. Personally, I'd appreciate receiving a copy of that.

Hon. A. Petter: I'll ensure that the member receives a copy of the letter that went out in May to specifically target. . . .

The letter the member is referring to was sent through the same computer system, I understand, to all those who would be eligible for the family bonus. But there was a subsequent letter sent out in May to those on income assistance. I will provide the member with a copy. It explains the impacts that have been well known and explained previously, because it was the essence of this program that it provide a step for those who would move from income assistance into work. If the member would like to see that letter, I'll provide it to him.

Section 1 approved on the following division:

YEAS -- 36
Evans	Zirnhelt	Cashore
Boone	Hammell	Streifel
Ramsey	Kwan	Waddell
Calendino	Pullinger	Stevenson
Bowbrick	Goodacre	Giesbrecht
Walsh	Kasper	Orcherton
Hartley	Petter	Miller
G. Clark	Dosanjh	MacPhail
Sihota	Randall	Sawicki
Lali	Doyle	Gillespie
Robertson	Farnworth	Smallwood
Conroy	McGregor	Janssen
NAYS -- 26
Dalton	Gingell	Campbell
Farrell-Collins	Sanders	Plant
Stephens	Coell	Anderson
Nebbeling	Whittred	van Dongen
Thorpe	Penner	Weisgerber
G. Wilson	Neufeld	Barisoff
Krueger	McKinnon	Coleman
Jarvis	Abbott	Symons
Hawkins		Hansen

[8:45]

On section 2.

G. Plant: I have a question or two for the Minister of Finance. My. . . .

The Chair: Perhaps, hon. member, we'll just take a moment while those who wish to leave the chamber do so. I request those who are leaving to do so quietly, please, and quickly.

G. Plant: My questions concern what, for want of a better term, I'll call the clawback that applies in respect of payments of the family bonus over the $18,000-a-year ceiling. Perhaps I might preface my question by saying that I too support the general intent of this bill, but I am also concerned about ensuring that its objective is achieved in the most direct and focused way possible, which is -- if I heard the hon. minister in his introductory remarks -- an objective intended to assist those on welfare and those who are earning the minimum wage or just slightly above that.

When I look at the formula which is used to calculate the amount of the bonus that is paid to those who earn over $18,000 a year, it appears to me that there are two formulas: one that is applied in cases where there is one child; and another formula, which is the 16 percent formula, that is applied in cases where there is an eligible individual who has more than one qualified dependent. That is, one formula is used if you have one child and another formula is used if you have two, three, four, five, six or ten children. The result of the application of that formula, as I understand it, is the chart on the back of the press release, which shows a graduated decline in benefit payments that looks like a scale and which means that the more children you have, the higher the income required to exhaust your entitlement under the program. I suppose it could be said that at some level the benefit operates discriminatorily in favour of those who have more than two children.

But my question proceeds on a premise, and perhaps the minister can confirm the premise first. The premise is this: I understand that the formula in section 2, section 4.5, is driven by administrative considerations rather than policy considerations. That is, it's a formula essentially dictated to the province by the federal government in order to make the program acceptable to them.

Hon. A. Petter: I think it's fair to say, as in all matters, that there is a balance of considerations between administrative concerns and social ones. It's true the federal government in administering the program probably would have been reluctant to have a graduated series of clawbacks at each stage. On the other hand, it's also true that the pattern here of graduated benefits corresponds to the reality that families with more children -- five children -- and higher incomes still live that 

[ Page 335 ]

much closer to the poverty line in terms of their needs and the demands placed upon them. So I'd say that yes, there are administrative considerations, but those administrative considerations would not have been acceptable had it not also been for social policy reasons that were deemed desirable.

G. Plant: In light of the stated purpose of the benefit, which is primarily to target those who are on welfare and to provide them with a means of getting off welfare, and notwithstanding what the minister has said, the force of much of which I agree with -- that families with a net annual income of $40,000 or $46,000 and with five children are nonetheless going to have a hard time making ends meet -- what I'm interested in knowing is this: if you were to take the amount of the benefit which is estimated to be paid on an annual basis to all those earning. . . . I'm not stuck on a particular number, but I'm going to choose $34,000 -- that is, everybody in the bottom half of this scale. What is the amount of money that the province will pay each year to those families?

Hon. A. Petter: Could you repeat the question?

G. Plant: What I'm looking at is the backgrounder chart on the back of the press release. Those who look at it will see that at about the $34,000 net annual family income level, the benefit paid to those who have one child or two children drops to zero. But there continues to be a benefit paid to those who have three, four or five children, and that benefit continues on the graduated basis that. . . . I think the minister understands. What I want to know is whether the minister or any of his staff can tell us just how much a year will be going, under this program, to those parents on the bottom half of the graph.

Hon. A. Petter: I don't have the exact number to hand, but just to give a sense of where the benefits largely fall, I'm informed that about 85 percent of the benefit is targeted at those who earn less than $30,000. So it would be slightly higher than that if you moved up to those who earn less than $34,000, which I think is the cutoff line the member is referring to.

G. Plant: What I would like to do then, if I might, is impose on the minister, if he would agree, to let me have a sense of what that number is in due course. I'm interested in that number in the context of the debate that we had earlier, which was in part around what could be called the missing $12 million. That is the amount of money which we are apparently unable to direct as cash to those who are currently on welfare, who are really the primary targets of this program, but may in fact be the amount of money that under this program is going to be paid to people who have substantially more income and have chosen, in many cases as a deliberate lifestyle choice, to have more than two children. My concern, as a policy concern, is that by failing to adopt the proper formula for phase-out or clawback, this legislation is missing the target that it's intended to hit.

Hon. A. Petter: If the member can put in writing the request for the number he wants, I'll certainly try to get him the number. I'm tempted to launch into a huge philosophical discussion with the member, but I won't -- except to say that whether there was or wasn't a choice to have more than two children, that choice was not the choice of those children, who have to share the income of their parents and for whom the reality is that five kids vying for income are in a far less advantaged position than one kid vying for that same income. I would urge the member to look at the situation of those children.

Secondly, the purpose of this program in respect of those on welfare is to provide incentives and encouragement for them to enter the workforce, not to stay on welfare. I don't think the way the member characterized the purpose was clear, but I don't want to open up this whole other discussion not now -- perhaps over a drink with the member on another occasion, but not today.

The Chair: Now that we're on a section, relevancy is important. The hon. member continues.

G. Plant: At the point when the hon. minister and I have that discussion, I'm sure the minister will agree as a starting point that the children of whom he speaks, the children of single unemployable mothers currently on welfare, are in greater need than those who are currently the children of families where the net family income is $48,000, $50,000 or $52,000 a year.

V. Anderson: I think it's important that others who read this act may be able to understand what it means. One of the concerns I have is that not many of the people in the community have a copy of section 122 of the federal act, so I'll have to do with section 4.4. This has to do with definitions, and normally definitions are listed, instead of having to refer to someplace else for them.

Is there a chance that the minister would be able to give us the definitions of "adjusted income," "base taxation year," "cohabiting spouse," "eligible individual," "qualified dependant" and "return of income"? These are definitions that are important and that should be in Hansard so that people can understand what the act means.

Hon. A. Petter: I'll read the federal definitions into the record for the member's benefit. I'll read them in plain English.

"Adjusted income" means the total of the parents' net income for a taxation year. "Base taxation year" is the prior year or the year preceding the prior year, depending on if we are in the first six months or the second six months of the current year. "Cohabiting spouse" is a legally married or common-law spouse of the opposite sex, but a person living separate and apart for a period of least 90 days due to a breakdown in the marriage is not a cohabiting spouse. "Eligible individual" is a parent or primary caregiver of a qualified dependent. "Qualified dependent" is a child under the age of 18 but does not include children in care, and "return of income" means an income tax return.

[9:00]

V. Anderson: In the next section, 4.4(2), could you explain what "section 1(7)(h) of this Act" refers to, and how "eligible individual". . .? In other words, explain that paragraph to me and what the reference is to. Which acts are referred to there? The federal act is referred to in the second part of that, but what's the act in the first part and what's the meaning of that section?

Hon. A. Petter: I'll do my best, hon. member. The reference to the act is simple: it's a reference to the provincial Income Tax Act. The purpose is to ensure that the reference to Canada that is currently in that act remains a reference to 

[ Page 336 ]

the government of Canada for the purposes of this section of this act.

V. Anderson: That's helpful. In section 4.5, could you explain what "overpayment" applies to? As you read, there's a great deal here that has to do with overpayment. Is that overpayment to an individual by the government, an overpayment by a government to the individual, or is that overpayment between the federal and the provincial governments? To what does the overpayment refer?

Hon. A. Petter: I stand up as soon as I think I understand, for fear that I might get more information. The overpayment here is a deemed overpayment, not a real overpayment, that exists for the purpose of providing the credit. Because it's the credit. . . .

F. Gingell: He's got it! I think he's got it!

Hon. A. Petter: I feel like a character in a George Bernard Shaw play turned into a musical, but that's what it is.

V. Anderson: With respect to the time limits, if I understood correctly from the briefing we had today, if a person moved into B.C. on June 30, as of July 1 they would be eligible for this payment. But then in subsections (2)(a) and (b) it talks about 14 days during that month. Could you please explain the 14 days and what its implication is? Also, while you're on it, you might want to explain the classes of exemption that may be made by regulation in subsection (2)(b). There's a 14-day period in subsection (2)(a) and classes of exemption in subsection (2)(b). So it's clear, but it's also open to exemptions. On what basis are they made?

Hon. A. Petter: The 14-day period is in reference to those people who might otherwise be thought to be resident in another province as well as British Columbia. It helps to clarify those who are deemed British Columbia residents for the purposes of this program versus those who are not.

The second is a category that will allow others to be considered. To give some examples, it might be that one would want to include within that provision missionaries in foreign countries, say, or Armed Forces personnel serving overseas who still consider B.C. to be their province of residence and could therefore be eligible by means of the regulation, given that they are outside of the country but still have a strong and meaningful connection to B.C. as their place of residence.

V. Anderson: Section 4.8: "(1) The Lieutenant Governor in Council may make regulations for the purposes of sections 4.5 to 4.7. . .specifying additional provisions of the federal Act that apply for the purposes of these sections. . . ." What are the possible additional provisions that might be there? Then in subsection (b), the kind of exemptions that are also listed there. . . .

Hon. A. Petter: As of the date of introduction of this bill, certain administrative provisions of the federal child tax benefit were being debated in the House of Commons. These provisions, when adopted federally, will be enacted for the purposes of the B.C. family bonus program. It's in anticipation of those provisions that that first proviso is there.

In addition, regulatory authority is sought to exempt certain classes of people from being physically present in British Columbia in order to receive the family bonus. As I said before, under this provision it's anticipated that missionaries in foreign countries, Armed Forces personnel -- the same category of people I referred to who still consider B.C. their province of residence -- will be named by regulation as eligible. This corresponds to the earlier provision we discussed in that regard.

K. Whittred: I am probably one of the few people in the House that remembers what the old baby bonus was. Out of curiosity, I would like to know who the cheque is payable to.

Hon. A. Petter: I'm just wondering if I wasn't perhaps one of the recipients of that original baby bonus.

The answer is: to the primary caregiver, who in most cases would be the mother.

Section 2 approved.

On section 3.

F. Gingell: I must admit that I forgot to ask this question during briefing. Section 3 talks about permitting "legal expenses and disbursements resulting from a redetermination of a family bonus to be taken into account in calculating income." Boy, that's quite a mouthful. That means the money that these people have. . . .

Interjection.

F. Gingell: Yes. Section 12 as amended.

Interjection.

F. Gingell: Yeah, I'm sorry. Section 3 of this act.

Perhaps the way to start this, minister, is for you to advise us what legal expenses and who they would have been paid by. Give us some background on this matter.

Hon. A. Petter: This parallels the federal provision. Where there is an appeal regarding eligibility to both the federal and now provincial programs that entails some legal expense to an individual, it allows that expense to be taken into account in determining the family bonus to be paid in respect of that individual.

F. Gingell: Perhaps we are bound by the requirements of the federal act to only deal in this manner. I wouldn't suggest to the minister, because of his own particular training, that this must have been written by a lawyer. They are protecting the deduction of legal expenses, fees and disbursements, whereas so often there are many issues that can be dealt with by us as individuals. We don't need lawyers, and though our own expenses might have to. . . .

An Hon. Member: You could use an accountant.

F. Gingell: Yes. You might want to use an accountant. There you go. A chartered accountant, I would hope.

Interjection.

F. Gingell: Yes, an FCA.

Is the restriction of this rather narrow definition of legal expenses and disbursements a requirement of having to follow the federal act and not go outside its provisions?

[ Page 337 ]

Hon. A. Petter: I don't know the answer to the question. Because it might take some time to get the answer. . . . There are two questions, actually, that I would like to get the answers to myself. One is: how is "legal expenses" defined? It may be a broader definition than the narrow one you assume. The second question is whether we were constrained in this definition by the federal act. I don't honestly know, but I'd be happy to follow up. Staff can make a note and provide that information to the member rather than tie up the House's time at this point, if that's acceptable to the member.

[9:15]

Sections 3 to 7 inclusive approved.

On section 8.

G. Plant: I would ask that the minister look at section 8(3), which is the transitional provision. Perhaps by way of a preface, I'll make the comment that all these statutes, which require information-sharing across ministries or between ministries in different governments, raise important privacy issues. The question I have is related to the extent to which privacy was protected during the course of -- shall I say? -- the creation of this act. The question is: has any information been disclosed between January 1, 1996, and today that, but for this section, would not have been disclosed in accordance with section 33 of the Freedom of Information and Protection of Privacy Act?

Hon. A. Petter: This provision does seek to provide authority for work that went on to prepare for the program going ahead. In that sense, it has a slightly retrospective component to it. But it was done with privacy in mind and in consultation with the privacy office within government that, in turn, tries to ensure that government's activities are in conformity with the Freedom of Information and Protection of Privacy Act and the requirements set down by the commissioner.

G. Plant: I want to be sure that I understood the answer to the last question. Was the minister saying that the freedom-of-information and protection-of-privacy commissioner was consulted with respect to the actual disclosure that is the subject matter of subsection (3)? By way of contrast, I don't mean a general discussion or consultation; I mean a specific consultation in respect to the specific disclosure that is the subject of this subsection.

Hon. A. Petter: The answer is no. The protection-of-privacy commissioner was not. The freedom-of-information and protection-of-privacy office within government, whose role is to ensure that government conforms with both freedom-of-information and privacy requirements of both the act and stipulations of the commissioner, was involved to ensure that we met the requirements of the act and any additional requirements that have flowed from rulings of the commissioner.

G. Plant: If the implication of the answer to the last question is that the privacy requirements involved were satisfied, why then is it necessary to enact a retroactive provision?

Hon. A. Petter: Again, I can get a more detailed answer for the member and find out exactly what the advice was, but I take it this was as a transitional measure. It was deemed that as we moved towards a more permanent relationship, it was desirable to have the legislation recognize and legitimize this particular arrangement. I can get more details for the member on exactly what the concerns were and why it was recommended that this be put into legislation.

V. Anderson: I'm going to raise the same question, as I gather that one is covering actions that we may have been skating on thin ice in doing at that time. If so, I think that's a concern, particularly when this government has brought in the Privacy Act and is saying to the public at large that we should follow these very closely. Even for just and good reasons, it's still not a good idea that this is, and that's why I think it's a good question. It looks like we were doing things that appeared to be doubtful and therefore were covering up after the fact, and I think that's a concern.

The other part of it is that in subsections 2(a) and 2(b), if I understand correctly, we're giving authority for exchange of information from the privacy of the Guaranteed Available Income for Need Act on the one hand, and the income tax on the other hand, between two departments of government. I think we need to be aware we're doing it. Is any of this information being shared between ministries of the provincial government and the federal government? If so, there's no request here for information to do that. Should there be a request for information to do that between the federal and provincial governments? If it's necessary between two ministries of one government, it would seem to me that it's probably even more necessary between the federal and provincial governments.

Hon. A. Petter: I'll do better with this than with the response to the previous question. Perhaps this provision was put in out of an abundance of caution or a concern to make sure that the information is covered off by this act. Clearly, the information has to be made available in order for the program to work. Rather than leave that to the general determination or to the open language of freedom of information and privacy, in an abundance of caution and clarity perhaps it was thought desirable to hive off a very specific exemption. But that's speculation on my part. My officials are not in a position to give me a clear answer as to how those consultations with the office of privacy took place. I'll happily undertake to provide further information to both members who have raised these questions and get the information for them.

G. Plant: If I heard the answer earlier, I've now forgotten. I want to be sure that I understand whether there was any consultation with the freedom-of-information and protection-of-privacy commissioner with respect to this. I understand the answer is no.

Hon. A. Petter: I'm informed that on general issues around B.C. Benefits and information, it's yes. But on the specifics of this section and this provision, the information that I have is that it is no.

V. Anderson: Just to be clear, could the minister also indicate how the information is shared, and under what freedom between the provincial and federal governments as well as between the ministries. That sharing of information between provincial and federal governments is not mentioned here in the act, and perhaps it should be. It may have to be brought back in at a later time if it's not already covered.

[ Page 338 ]

Hon. A. Petter: Information from the federal government is provided under section 241 of the federal Income Tax Act, I am informed. With respect to income assistance recipients, they sign a declaration, as I understand it, which entitles the provision of this information for this purpose.

V. Anderson: Just on that, I know that income assistance recipients probably do that currently, but there are many people who have been on this for some time. Is it true that all of those over the last number of years would have updated that kind of permission?

Hon. A. Petter: I'm informed that the policy has been there for some time -- a matter of years. Therefore I can't guarantee that every recipient. . . . I can certainly undertake to find out. The expectation is that if not every recipient, then the vast majority would have signed such a declaration.

Sections 8 and 9 approved.

On the title.

F. Gingell: Hon. Chair, I'd like to ask the Government House Leader that he not bring in third reading this evening for two reasons. Number one, there are a series of questions that we would feel more comfortable having responses for. I'm sure they can be done Monday, and we could deal with it Monday, which I think will meet all your deadlines. Number two, perhaps a little project for you this weekend will be to go home and think about what changes we could make to deal with the issue that we spent a lot of time on earlier this evening: the loss of income to single moms.

Interjection.

F. Gingell: There you go.

Anyway, I am pleased to hear that we won't be having third reading this evening. With that, I'll be pleased to vote in favour of the title.

M. Coell: The job of the opposition is to point out where things can be improved. I think we attempted to do that tonight. We were proposing an amendment which the House Leader said was out of order, and I tend to agree with it. It left us with no other choice than to vote against the repeal of the tax credit. I would suggest that the name of this be the B.C. Family Bonus Act Excluding Women With Children on Income Assistance.

The Chair: I am informed that the bill has not been amended. According to our rules, given that the bill has not been amended, then the title cannot be amended.

Title approved.

Hon. A. Petter: I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 6, Income Tax Amendment Act (No. 6), 1996, reported complete without amendment to be considered at the next sitting of the House after today.

Hon. J. MacPhail moved adjournment of the House.

Motion approved.

The House adjourned at 9:29 p.m.

Copyright © 1996: Queen's Printer, Victoria, British Columbia, Canada