[ Page 6699 ]

Prayers.

M. Coell: It's my pleasure to introduce to the House today a grade 11 class in French immersion from Stelly's Secondary School in my riding, with their teachers. Would the House please make them welcome. Bienvenue.

Petitions

"Whereas Burns Bog, the last major domed peat bog on the west coast of North America, contains a tremendous richness of animal, plant and insect species and is an island of valuable wilderness in the rapidly developing lower mainland [your petitioners]. . .request that Burns Bog become an ecological reserve and. . .that your honourable House. . .pass the necessary legislation to preserve Burns Bog. . . ."

Orders of the Day

Budget Debate
(continued)

Hon. I. Waddell: I rise this morning to speak on the Budget '98 debate, and in my speech I want to deal with the substance of this budget. Unlike some of the Liberal members opposite, I'm not going to deal with letter-writing, name-calling or conjuring up imaginary people -- just the facts. That's what I ask that the members opposite deal with in this budget, and that's what I'm going to try to deal with in my speech.

I want to say, from my perspective as the new Minister of Small Business, Tourism and Culture -- responsible for sport, as well, and for film and for liquor policy; all these areas -- that this is a good budget in this particular area. The budget specifically targets small business by cutting corporate income taxes for 40,000 small businesses in British Columbia. That's impressive. The reason we're doing that is to give these businesses some room to grow, because that will mean more jobs for British Columbians.

It's small business in this province -- indeed in this country -- that creates the majority of jobs. Ninety percent of businesses in British Columbia are small business. The StatsCan definition of small business is 50 employees or under. We often talk of small business as 20 employees or under. When I had my own small business a couple of years ago, I was the only employee, and there are many home businesses that are doing that. You know, they add another employee or another couple of employees, and that's where employment is coming. I see a lot of young people in the gallery today. Many of them will be employed in the small businesses of the future, often in the high-tech sector, and in the budget we targeted that.

We've also tried to reduce red tape for business. We had -- and I'll talk about this in a moment -- a number of consultations with small business across the province. We met with them and asked them what was it that bothered them about government: "What is it that we can do for you or not do for you that can help you grow?" And the answer we got was: "Reduce red tape. Get rid of unnecessary regulations, forms that we have to fill out."

I recall when I had my own law practice -- a single practitioner, a couple of years ago -- every month I'd have to fill out a form for the provincial sales tax. Even if I didn't have any particular declaration that month or any taxes to send back, I still had to send the form, and if I didn't sent the form back, I got another form which said: "You get going and send us back the first form." So that's repeated over and over again in government, and I'm going to speak about that in a minute.

We're going to try. We will reduce red tape in government. So the government gives a tax break to small business; it proposes to reduce red tape. And it sends a signal to investors and business people: "Invest in British Columbia. It's a good place to invest, a good place to do business, and the government here is out to help you, not to hinder you." I think that's the basic message for small business in the budget.

I want to say a little bit, hon. Speaker. . . . It's very hard. I'm used to the House of Commons, you know, where I call you Madam Speaker; but it's hon. Speaker. I'm going to tell you a little bit, if I might, about the consultations that we had with small business. My predecessor, the hon. member who's now the Minister of Human Resources, had a task force. A group from her ministry went out all across the province, held meetings, listened to small business and produced a report. That report indicated some of the concerns that people in small business had.

As well, when I got the portfolio about five or six weeks ago, I went with the Premier, and we met with a number of people in small business, including Chinese Canadian entrepreneurs in small business. You read the newspapers, and you just think the Premier met with the big guys like Jack Munro and Jim Pattison -- big labour, big business. But in fact we spent a lot of time trying to meet with the little people in small business through breakfasts, through meetings, through conference calls, face to face, and really had a good talk about what some of their problems were. I heard about taxes, too-high taxes; I heard about fees, unnecessary and high fees. I heard about regulations that were strangling them. I heard about fuel taxes in airlines that were stopping tourists from coming here. I heard about. . . . Well, I heard about a number of areas.

I'll just give you an example to make it more concrete. We talked to some. . . . You know, we have heliskiing in British Columbia. We have this new ecotourism industry. We have backpacking in the mountains. We have cats that go up and take you skiing in the mountains, because we have this wonderful province, this wonderful geography -- Super, Natural British Columbia. We found that the operators who are starting these businesses are growing by leaps and bounds.

They had to apply to get leases to get into the Crown lands, because most of the land in the back country is through Crown lease. They're Crown lands, the forests and the mountains there. There was a backlog, and we looked at the backlog, something like 3,000 or 4,000 applications. I got a letter from one small business person who said it took them four years. Well, that's just not on. That's not the way we should do things. So we started to relieve the backlog in this matter. That's just one example of red tape and regulations and backlog and lack of communication between government and small business that was hurting people. There were other ones. So we have acted on that.

On the tax matter, let me go back to that. We will reduce the tax burden for small business to the lowest rate since 1986 

[ Page 6700 ]

by cutting the small business corporate income tax by 11 percent over two years. On January 1, 1999, the tax will be cut from 9 percent to 8.5 percent; and from January 1, 2000, the rate will fall to 8 percent. That's pretty good news for business. I would invite the opposition to vote for this budget if they believe, as we do, that small business taxes should be reduced.

I heard the opposition speak of this. They said: "Well, you reduced taxes, but you should also reduce debt." I want to address that for a moment. We have the lowest debt per capita in the country. You wouldn't think so if you just listened to the opposition talk about the debt growing and so on. The debt that we have taken on in this budget is for infrastructure. It's to build schools; it's to build hospitals; it's to build highways; it's to help the high-tech industry, the new industries; it's to deal with some of our traditional industries like forests and mining. And it is money that is well spent. You know, I buy a house for $300,000, and I get a mortgage for $150,000. I've got a debt of $150,000, but I've also got a $300,000 house, and that will hopefully grow. So one must look at that.

I listened to the opposition; I've listened to the speeches of the Liberal opposition. I've been in opposition, when I was in the House of Commons for 14 years, and I know that it is pretty easy to throw things across the floor of the House and demand all sorts of things. But every day I hear: "Spend, spend, spend." People come up to me: "Hey, I've got a new program, minister; you should give some grants." I hear this from opposition members, and then you hear them say in debate: "Cut, cut, cut," or "You've got too high a debt." Well, we have to spend money, but we have to spend it in the right place: on education and health, on job creation, on young people and on keeping a good environment. I think we've got the right balance here, and that's why I think this a good budget.

[10:15]

We have the lowest government spending now since 1959. That was not easy to achieve. Our caucus and our members worked really hard about a year and a half ago, I think it was, when we had to prune $750 million out of government. And it hurts. My own department lost 100 people. Then people come to you and say: "We need people to deal with those programs. Approve our back-country leases. Where are the civil servants?" Well, we've cut a lot. This is a lean government now. Relative to its population, according to an info report of B.C. Stats, British Columbia had one of the smallest public sectors in the country in 1996. So it's a lean government, and it's a government that's targeting its spending towards the things that matter. It is the only province in the country that has increased spending on education and health care, and I think that's really something.

I also want to quote. . . . I was looking at the March 31 Times Colonist, where I see reports of the debate on this budget by the Leader of the Opposition, the leader of the Liberal Party. He's saying that about a 10 to 15 percent across-the-board tax cut would be enough to kick-start a faltering economy. Well, that's an option we had. Should we have cut taxes by 10 to 15 percent right across? That means cutting schools, and that means cutting hospitals. That means cutting all sorts of things.

The Leader of the Opposition says that there's waste and subsidies in government. That's a phony argument. The government's been cut back. Look at the facts that I just gave. It's a phony argument to say that. It doesn't make any sense, and it doesn't help the opposition. The opposition should come clean. What they would do is help their friends on Howe Street big-time, and they would cut the programs for the ordinary people, especially in education and health care. People know that, and that's why they didn't elect them as the government.

Now, I could go on about the inconsistencies in the opposition's statements. Their House Leader gives a speech in which he's on about the debt, and then another speaker talks about spending. You can't have it both ways.

I want to talk about some other matters with respect to the budget. I mentioned that we did cut small business taxes -- that is, their corporate income tax. There is another area; it is called the corporate capital tax. This is a tax that affects small businesses. This budget will eliminate the corporate capital tax for 10,000 small businesses in British Columbia. I got a question yesterday at the end of question period from one of the members opposite in the Liberal Party. He said: "What are you doing for small business?" Well, 40,000 small businesses get a tax cut in general tax, and 10,000 don't have to pay the corporate capital tax. That means that 90 percent of small businesses in British Columbia will pay no corporate tax. I think this is a real step forward. I think that this will help small business and that it will help create jobs in British Columbia. I am pretty pleased we did this in the budget.

I would like to talk about some other matters that I could talk a lot about, but I won't go into it. Just to mention it, we have a one-stop business registration program now in the Small Business ministry; we have an equity capital program for new business; we have an employee share ownership program; we have the Working Opportunity Fund; we have Canada-B.C. cooperation in business centres. These are real programs to help small business. They're not costly programs; they're efficient programs to help small business.

I'm going tomorrow -- this is Friday, isn't it? -- to speak to a group of aboriginal youth. We've got a program called You-BET, and it's for youth to get some entrepreneurial skills to start their own businesses, and to help them. It's a great program, and it's a really popular program.

Interjection.

Hon. I. Waddell: Brainwash? Do you think it's a brainwash program to allow some kids to come in and learn about how to get some entrepreneurial skills so they can start their own small business?

Interjection.

Hon. I. Waddell: Well, that's what the opposition thinks about it. That's not what I think about it and not what the government thinks about it and not what it says in this budget. I challenge the member to go and talk to some young people, as I have, and see how much they like this program.

We're expanding this program to include aboriginal youth, a growing part of the population that needs help and needs to work with us in Small Business.

[ Page 6701 ]

I want to talk now about some other areas in my portfolio, if I still have time. I'd like to talk about film. People ask me: "Minister, 'The X-Files' is leaving. What are we going to do?" Well, "The X-Files" is leaving Vancouver, and we're sorry to see them go after five years. Mainly, they're leaving because the stars, who have good contracts, want to go home to live with their families in Los Angeles. We understand that. But you know, over that five-year period the film industry has grown from some $200 million to $300 million into a $630 million industry. Last year we had 24 features, 20 television series, 53 TV movies, nine animation features and 61 documentaries, and we're expecting more this year.

In this budget we're trying to help a winning industry, because more people are coming to make movies in British Columbia. We're going to do it two ways, if the opposition reads the budget carefully and actually deals with the facts. The first way is to help domestic production. Yesterday a program called Film Incentive British Columbia kicked in, which will be helping domestic film-makers to make films by giving them a tax break on their labour costs. We will shortly announce help for foreign investment, as the budget says.

My goal is to get a $1 billion industry here by the turn of the century. We've got the crews; we've got growing expertise; we've got indigenous producers. If you could visit, hon. Speaker, as I did. . . . I would invite some of the members opposite to visit some of the post-production houses in Vancouver and the new high-tech industry that's being created. It's really marvellous, and this budget helps both indigenous film-makers and foreign film-makers. It's a growing industry.

Tourism is also a growing industry. The other day I was able to announce, through this budget, an extra $2.5 million for tourism. We now spend $18 million to $19 million on tourism, partly from a hotel tax that we have, and Tourism B.C. uses this for marketing. Some of our market share from Japanese tourists and German tourists is going down, because of difficulties in their countries. But we're getting more tourists from the United States, the United Kingdom and other places. We've given more money to Tourism B.C. to get out and aggressively market tourism in British Columbia. What a wonderful place to come to! We have to do this right now, and we have to make sure, on a one-shot deal, that we get this marketing news out there.

I would like to see Tourism B.C. not just market the golden triangle -- not just Whistler, Vancouver and Victoria, although that's really important -- but get out there into the rest of the province. Get out into the Kootenays and the north and the interior to sell B.C., and I think we can get a lot more tourists. That is part of our thrust in this budget, and it's a winning thrust.

I'd like to see us do aboriginal tourism. I'd like to see us do work with the Chinese Canadian community. In Chinatown in Vancouver and Victoria and in Barkerville up in the interior, there's much we can do. We've got a great Chinese Canadian history in this province, and we should show it off. It's a proud history for a proud community. So I think that if you take tourism, film, tax breaks and cutting red tape, these are good-news stories for people in the area that I'm responsible for.

Before I sit down, I want to say something about my own riding, Vancouver-Fraserview, and how the budget affects it. I said that we targeted education and health. Walter Moberly school in my riding. . . . I was there a couple of months ago when we got rid of the portables. It's one of the largest primary schools in western Canada and has a great mixture of students, with parents who are from all over the world. All these kids are future strong Canadian citizens who will really contribute to our society, and we've got to make sure they have a good school. I was at Killarney Community Centre about a week ago in Fraserview, where we tore down the old buildings and where we're putting up new buildings in the community centre. These are really good investments in the community. I was there when we turned the sod on some seniors' homes there, an investment in health care.

I want to take this opportunity, if I might, to thank the residents of Vancouver-Fraserview, which is in the southeast corner of Vancouver, abutting the Fraser River, where 14 million salmon swim by every year, where there's new development but in conjunction with good environment, good ecology. We have young people employed to clean up the banks of the river, to make this a really great area to live in. I want to thank the people there, especially the large Indo-Canadian community, for their support. Good luck, taxi drivers, today; good luck at the airport. I want to thank also the Chinese Canadian community there, who -- especially in the area of small business -- have given me such good advice. I want to tell them that this budget that we have here has got it right.

I've tried to give some of the facts today. I don't purport to know. . . . I've only been in the job for -- what? -- six weeks.

An Hon. Member: But you're a quick study.

Hon. I. Waddell: A quick study. It reminds me of a story that Tommy Douglas once told. He said that he'd just been elected Premier of Saskatchewan, and he went to the mental institution, the hospital in Weyburn. He was walking around the grounds, and one of the patients came up to him and said: "Who are you?" He pulled himself up to his 5 foot 5 height and said: "Who am I? I'm the Premier of Saskatchewan, and I have been for six weeks." The patient looked at him and said: "Oh well, you'll get over that. The first six weeks I was here I thought I was Napoleon." Well, I don't pretend to be Napoleon or Napoleon-like.

Just the facts, Madam Speaker: this is a budget that's got it right. This is a budget that helps small business by tax reductions in two ways. This is a budget that helps small business by reducing red tape. This is a budget that targets the traditional industries of forestry and mining and helps them at a difficult time. This is a budget that looks toward youth and the new high-tech industries. This is a budget that runs a small deficit, but it does that so we can invest in education and health. This is a budget that's on the right track. This is a budget that's worthy of support. This is a budget, in spite of the woeful cries of the opposition, that I believe the people of the province will support. I'm pleased to stand here today to support this budget.

T. Stevenson: It's once again an honour and a privilege for me to rise in this House at the beginning of another session to speak to the budget. But before I do so, I want to congratulate you, hon. Speaker, on your election as Speaker of the House. There's no doubt in my mind that your experience, your wisdom, your wit and also your grace will allow this House to operate much more efficiently and smoothly.

I want to speak to this budget in a couple of ways: first, in a general sense as to how it benefits the entire province, and then I want to pick up a little on some of the opposition criticisms, particularly those from their Finance critic.

[W. Hartley in the chair.]

[ Page 6702 ]

To begin with, I think it's important to acknowledge that there has been of late an economic downturn in British Columbia. We all know this. This comes after years, however, of a very robust economy, an economy that has been out in front of the entire country and that's been number one while other provincial economies have been stagnating and in recession. We're indeed fortunate to have been, for most of this decade, creating wealth and creating employment throughout our province. Thousands actually flocked to British Columbia from across this country and from other parts of the world. While most of the rest of Canada languished, we were number one, we were very proud of it, and we stated so. And this government was indeed proud of our achievements.

[10:30]

There are some tangible reasons, obviously, for the economic problems we find ourselves in. I think that the people of British Columbia realize this more and more, and they understand why we are on this downturn. So this government has indeed realized the problems, and is now taking concrete and immediate steps to deal with the problems. Obviously some issues are not under our control, and others we can do something about.

That's precisely what Budget '98 is doing. After broad consultations with large businesses, with small businesses, with labour, with environmental groups and with community groups, the government has brought forward a three-year plan. It's a comprehensive plan; a thorough plan; a dynamic, action-oriented plan; a plan for today and a plan for our future. It's a plan that touches every British Columbian in a positive way. It's not just a six-month plan or even a one-year plan or a two-year plan. It is indeed a long-term, goal-orientated three-year plan.

The 1998 budget unveils a three-year plan to stimulate the British Columbia economy, to encourage investment, to cut red tape -- as we've been urged to do by business -- and to create jobs. The number one priority of this budget and for this government is to help create good-quality, family-supporting jobs for British Columbians and their families.

To boost the economy, thus creating jobs, we're actually changing the way we do business. We're cutting taxes, and we're cutting red tape. Businesses have said to us that we can alter the business climate with these changes. Our government obviously wants a vibrant business climate. We all benefit from such a climate. Therefore this budget cuts taxes for 40,000 small businesses, and 90 percent of businesses will pay no corporate capital tax by 2001. So 40,000 small businesses will receive tax cuts. These tax cuts amount to a total of $95 million this year and $415 million annually when fully implemented over the next three years. This is substantial. This is indeed good news for business, and they have responded in most respects with optimism. They realize, with us, that this budget is indeed changing the way we do business with business. Government and business must work cooperatively to stimulate the economy.

I was interested to read the Globe and Mail a couple of days ago and Jim Pattison's comments. Now, Mr. Pattison is a well-known capitalist, and he's a very pragmatic individual. "He applauded what he called a 'new tone' towards business that was reflected in the budget. 'The government has been tagged as anti-business, but the things they talked about [in the budget] were very, very positive for business. None of the measures are [tremendously] big or come in a hurry' " -- this isn't a silver bullet; this isn't McDonald's budget -- " 'but there's something here for everyone.' " Well, those sound like very, very positive comments to me, coming from such a consummate capitalist.

So a new way of doing business with business. . . . It reminds me of the Prime Minister of Great Britain at the present time, the Hon. Tony Blair, a democratic socialist and a man who's also finding a new way of doing business with business. Maybe that's what scares this opposition so much about this budget. They say: "Oh, Tony Blair is way up in the polls, and maybe very soon the NDP, the government, will be way up in the polls." That's pretty scary for them, especially when we're doing business with business.

But Budget '98 also includes $1.25 billion for infrastructure in British Columbia, for schools and hospitals and transportation projects. This capital investment will create 16,000 new jobs in design and construction and make us more competitive here in Canada and abroad. Projects such as the Vancouver Trade and Convention Centre in my own riding of Vancouver-Burrard. . . . It's an exciting, new and dynamic project. New light rapid transit lines will be created, giving well-paying jobs to people in B.C.

On top of these initiatives to stimulate the economy, personal income tax rates have been cut by 2 percent and the top marginal tax rate will be lowered over three years from 54.2 percent to 49.9 percent. Additionally, a B.C. Hydro rebate will give money back to both businesses and to households. As I stated already, everyone in B.C. will be positively affected by this budget.

Since 1991 this government has protected health care and education. Actually, we've increased funding every single year. You wouldn't know it from some of the media coverage we get, but unlike any other province in Canada, we have not only protected health care and education, we've actually increased funding. I think we should just pause for moment and think about that. This province has increased funding every year since 1991. No other province in Canada has done this. Maybe we say it too fast sometimes, and we just take it for granted, but this is monumental. Maybe if we lived in another province rather than our own, we would realize how important this is. Just ask some of the citizens from across the country what it's like to be in the provinces that are being cut: take Alberta -- huge slashes in health care and education; Ontario -- draconian cuts. Here, we've increased funding every year. I repeat this and repeat this, so that maybe we begin to realize the magnitude of what this government has done since 1991.

Again in this budget, health care and education remain a top priority. Health care has again increased, by $228 million. Education again has an increase -- $100 million in funding for kindergarten to grade 12. And $1.5 billion has been allocated 

[ Page 6703 ]

over the next five years for new school construction alone. It's unbelievable, really, when one considers what's happening everywhere else in this country.

On top of that, we have a freeze on university tuition fees. This is, again, at a time when all the other provinces like Alberta and Ontario continue to rise well ahead of B.C. and have no tuition freeze at all. Students can barely afford to go to universities now.

Over the past day or so, I have heard a number of speakers here and elsewhere talking about this being a balanced budget. I agree to a certain extent, I think, that it has been balancing all the various needs. Certainly this government has tried to find a balanced approach, balancing competing interests with limited resources, balancing various competing needs: tax cuts -- how much and where we should make them, how large, and whether to big business, small business, individuals or families; job stimulus programs; and cutting red tape to let business do business.

But there are two areas in which this government has not sought balance, and that is in spending on health care and education. We've intentionally not sought balance. We alone in Canada continue to increase spending now and for the future. If we were the same as other provinces and tried to have their balance, we'd cut education and we'd cut health care. That's what Alberta has done. That's what Ontario has done. That's what every other province has done. That's what the Liberal opposition would have us do: cut, cut, cut. . .

An Hon. Member: And also increase services.

T. Stevenson: Oh, of course.

. . .in order to have this illustrious goal of the balanced budget.

Well, if we had just taken the extra $100 million that we are giving, that we are increasing this year. . . . If we'd just taken that, which is going to education, and put it towards the deficit, we would have had a balanced budget. It's quite easy; no problem. And that was just extra, increased money we were putting into education. It's quite easy, really, as has been said before, to balance the budget. But we've said no, we're not. . . . We're going to increase health care and education, and we're going to have a slight deficit.

Speaking of balanced budgets, I was interested the other day to hear the Opposition House Leader speak in reply to the budget. He held up a number of provinces as fine examples of what the Liberals would do if they ever came to power. First, of course, was his guru Ralph Klein. "How magnificent Guru Klein is in all that he has done in Alberta," said the Opposition House Leader. "He has balanced the budget five times in a row." Five times!

Let's just take a look back to 1993, when they began to balance the budget. Well, guess what. Guess when video lotteries came into the province. It was 1992.

Interjection.

Hon. D. Lovick: Was that the same time Ralph was there?

T. Stevenson: Yeah, that's the same time. And their budget of 1993 that was balanced: $378 million from VLTs in '93-94. In '94-95, there's $496 million from VLTs; '95-96, $583 million from VLT machines; and this last year, when they just balanced again, they got $624 million -- all from the VLTs. No wonder they can balance their books. We would have balanced our books a number of times if we had all those VLTs.

This is an opposition that at the same time bemoans gambling: "Oh, how terrible! We can't possibly have any increase." But then they turn around and hold up Alberta as an example of a wonderful budget. Doesn't this sound a little hypocritical -- just a tad?

[10:45]

Interjection.

T. Stevenson: Oh, this is doing a tremendous amount for youth, hon. Speaker. Let's just compare that with British Columbia. Yesterday British Columbia's minimum wage went to $7.15 -- $2.15 higher than Alberta. And this is the province of the Opposition House Leader's dreams. Some dream! This is the province that has clobbered health care and education, whose worker rights are constantly under attack, whose human rights policies are the embarrassment of the rest of the country, whose minimum wage is the lowest in the country and that balances its budgets on the backs of addicts of VLTs. That's the wonderful province and the wonderful budget.

The new morality. . . . Do you know that since they brought their VLTs in and started balancing their budget, they have received $2 billion in their coffers from VLTs? Not too difficult to balance, eh? This province, Alberta, which I say the opposition has the gall or the hypocrisy to hold up as the great bastion of financial enlightenment, is nonsense.

But what about the two other provinces the Opposition House Leader held up? We have Nova Scotia and we have New Brunswick. The Opposition House Leader seemed particularly enamoured with their Liberal cousins in Nova Scotia. He mentioned the Liberals specifically. Well, once again, VLTs have played a big part in their budgets. In Nova Scotia alone, the total provincial wager activity for 1996 was $727 million, and in 1997 it was $844 million. Again, it smacks of hypocrisy for this opposition to hold up these budgets and to try and rail against gambling.

Then, of course, the opposition states that these gurus, where the gambling revenues play so much a part, are leaders that we should be looking at for inspiration. This is either just blindness -- or Liberalism.

And then there's Ontario -- slashing health care, slashing education, and close to $1 billion per year going into their coffers from gambling. I was actually surprised that the Opposition House Leader didn't mention Mr. Harris from Ontario as another guru of the Liberals. Maybe that's because his name is a bit of a bad word west of the Prairies. But his policies are Klein's policies, and they are the B.C. Liberals' policies. Maybe it's because he's a member of the Conservative Party, and they think there's a difference. It's kind of the difference between Tweedledum and Tweedledee. I don't know if you've been noticing that Liberals seem to become 

[ Page 6704 ]

Conservatives and Conservatives become Liberals. Does Jean Charest ring a bell? On the other side, Peace River North. . . . One is a Socred; one is a Reformer; one is a Liberal -- or one is whatever is expedient at the time.

By the way, while we're talking about Liberals and Conservatives, I just want to point to Ottawa for a moment. Over these past many years, the Liberals and the Conservatives have been building up a debt. I think it's about $600 billion. It's the Liberals and the Conservatives that have built up that debt. Not one red cent of that debt has been contributed by a democratic socialist. But my oh my, when we add $1 billion for infrastructure in B.C., somehow this is terrible. But the capitalist parties can rack it up to $600 billion. I just saw today that they're adding more submarines -- four of them, I think. That's $2 billion more. Where is that going?

An Hon. Member: I know what they're going to do with them. They're going to look for fish.

T. Stevenson: They're going to look for fish.

All of a sudden, when we increase the debt by a billion dollars for roads and schools and hospitals, this is terrible. But we turn a blind eye when we see that our kissing cousins, the Conservatives and the Liberals in Ottawa, build up $600 billion. . . . But I digress.

This budget, in 1998, does have a $95 million deficit. That's prudent, and that's responsible. That's part of balancing a budget. We are increasing the debt by $1 billion. That's prudent and that's responsible. We need roads, we need hospitals, and we need schools. It's obviously important to stimulate our economy, and that's precisely what we're doing with this budget. We're giving the tax breaks to businesses, large and small. We're giving a tax break to the film industry, so that they might also flourish. We're freezing ICBC rates, giving Hydro rebates, freezing tuition fees. This is a pretty sound, prudent budget all the way around. I personally am very pleased to be able to support this budget.

L. Stephens: Before I begin my budget remarks this morning, I would like to give my congratulations to our new Speaker on her acclamation. I trust that she will bring fairness and impartiality to the proceedings of this House.

I am pleased to participate in the budget debate today and to represent my constituents of Langley as we all begin another legislative session, another year older and deeper in debt. A couple of weeks ago I conducted a survey of my constituents through the local newspapers, and I asked them what their biggest concerns were. The responses I received indicated that debt, deficit and health care were their priorities. So for the citizens of Langley and myself as their representative, this budget is a bitter disappointment. B.C. is losing business every day to Alberta and Washington State. This budget is not a long-term plan to restore the province's competitiveness. The tax measures do not go far enough, and they are not fast enough. This is still a tax-borrow-and-spend government. No matter how hard the Minister of Finance tries to convince us otherwise, the only thing worse than a socialist is one who tries to pretend she is a free-enterpriser, because the facts speak for themselves.

Listen to this. Let's talk about British Columbia and Alberta. The corporation capital tax in British Columbia is 0.3 percent. Guess what? There isn't one in Alberta; there is no corporation capital tax in Alberta. Is it any wonder that business is moving to Alberta? The unemployment rate in British Columbia is 9.7 percent; in Alberta it's 5.4 percent -- more employment. Let's talk about the top marginal tax rate. This government has reduced the top marginal tax rate in three years to 49.9 percent. What is it today in Alberta? It's 44 percent. What's it going to be in three years? It's ridiculous, hon. Speaker. The small business tax is still 9 percent today in British Columbia, and it will be 9 percent in British Columbia until January of 1999. And what is it today in Alberta? It's 6 percent. The gasoline fuel tax is 9 percent in Alberta, 11 percent in B.C. The sales tax is 7 percent in B.C.; no sales tax in Alberta -- none.

I heard the Minister of Small Business a little bit earlier bragging about the number of small businesses that will be exempt from the corporation capital tax with this budget. This is a joke. This government still believes in state-interventionist policies, policies that have been rejected by virtually every other jurisdiction in North America.

Hon. Speaker, a colleague wishes to make an introduction. I will now yield the floor.

M. Coell: I seek leave to make an introduction at this time if I could, please.

Leave granted.

M. Coell: I'd like to thank members for that. Earlier today I had a class from Stelly's Secondary School in the chamber. I do have another class from my riding from Stelly's Crossroad -- a grade 11 class -- with their teachers. I hope that the House would make them welcome and that they would enjoy their stay here.

L. Stephens: I will repeat it. . . . That government still believes in state-interventionist policies, policies that have been rejected by virtually every other jurisdiction in North America. That NDP government has a very large credibility gap. It has missed every single financial target it has ever set for itself, every single one. There has been no debt reduction, no balanced budgets and no reduced spending.

In preparation for the budget, the government spoke to a number of different interest groups. There were high expectations that the government understood the problems of high taxation and excessive red tape, and clearly they have not met those expectations. Once the downward spiral of recession starts, nothing can stop it. It has to run its course. That's something this government doesn't seem to understand.

There have been seven consecutive deficits since 1991 and not one debt management payment. In fact, they have abandoned the debt management plan. And with this budget, taxpayer-supported debt will increase by $1 billion. The member for Vancouver-Burrard was bragging about this accomplishment as well.

The debt-to-GDP ratio rises to 21.2 percent, breaking another government target. The total debt of government will increase to $31.25 billion at the end of March 1999 -- that's $1.25 billion added in this year alone and an increase of over $13 billion since this government took office in 1991. According to the budget documents, the debt per capita for each and every man, woman and child in British Columbia has just increased by $184, going from $7,627 to $7,811. It's shameful what this government has done to this province.

[11:00]

[ Page 6705 ]

statements say that the total true provincial debt will be $949 million. I call this NDP budget "The 2001 Tax Cut Odyssey." The parallels are endless. It seems as if the government is content to let us float helplessly, searching for tax cuts -- tax cuts that won't come until 1999 or 2000 or 2001. Tax cuts that they say will come later -- that usually means they will never come at all. While the government has thrown out a few crumbs -- and that's all they are, crumbs -- to taxpayers and business, I wouldn't be surprised if that was another promise broken in 1999, 2000 or 2001.

British Columbians know that the only way they will ever get a real tax cut is to elect a B.C. Liberal government. We are committed to real tax relief, not crumbs and not the band-aid measures the NDP comes up with. As a former small business owner, I was absolutely outraged by this government's token response to small business problems: the 1 percent reduction in the small business corporate income tax spread over two years. One-half of 1 percent is an insult. It is an insult to that sector of our economy, which provides the most jobs in this province. The government gives small business a one-half of 1 percent tax break next year -- next year, not this year -- in 1999, and yet this year they turned around and gave a big bank, a humuongous bank, an $8 million tax break yesterday. How convenient!

Let me read into the record this quote from the Wednesday, April 1, Vancouver Sun. It's a column by Jim Beatty and Bruce Constantineau. This is what the Minister of Finance said, and I'm quoting from the article: "Finance minister. . .who heralded the tax break as good news, hopes it will send a signal to Toronto's financial district. 'That was a very specific signal' " -- she said -- " 'from our government to the financial institutions saying: "We're open for business; come, bring your assets here. " ' Well, this doesn't quite jibe with what this government is usually saying about big business and particularly big banks.

Let me just quote what the Premier has said. In February of 1996, after he became Premier, he was talking to the party faithful at one of the conventions, and he said: "I can't think of a single person -- not a small business person, a professional, a working person or even a lawyer -- who would support cutting $100 million in taxes on banks." But that's what they did. This is a perfect example of flip-flop, doublespeak, speaking out of both sides of their mouths and colossal hypocrisy.

Another area is cutting red tape. That was singled out for attention by this government. Only the NDP could talk about cutting red tape and then turn around and create more bureaucracy. There isn't a single member of this government who has ever created a job in their lives, and it doesn't surprise me that they don't even know the first thing about what it takes to make businesses run better. Businesses and ordinary citizens have told this government repeatedly that B.C. is choking on overregulation, duplication and excessively long processes and procedures for approvals of land use plans. The government's response is to add more red tape and establish a small business task force and a business advocate. So what we have now is more regulators to regulate the regulations. Only in British Columbia and only with an NDP government could this possibly happen.

When the opposition travelled to the northern communities again this spring, over and over again we heard the same stories: there is excessive overregulation, primarily for forestry but also in the mining and the oil and gas sectors. When the government saw how successful our opposition tour was -- and our previous tour -- they held their northern summit. Hopefully, they heard the same concerns that we did. But their summit was criticized for being only for NDP members and for being a glitzy media stunt. So I'm doubtful that they were really serious about attacking the endless amounts of red tape their policies have produced.

The government talks about health care and education. This has become a mantra for this government. Every time one of their members or one of the ministers stands up, they talk about protecting health care and education. You know, hon. Speaker, the opposition believes that's important. We believe that protecting health care and education is important. The minister's announcement of $100 million to improve the K-to-12 system is welcomed by the opposition. The government also said that the money must go into the classrooms, and we agree. That money must go into the classrooms. The government said that they wanted 400 new teachers and 300 librarians, counsellors and aides -- laudable goals. But again, what are the facts?

The facts are that half of that money will go into enrolment increases for the 8,000 new students that are enrolled this year, and the rest will be taken up by increases in inflation, WCB premiums, FOI requests, contract costs and other administrative functions. I can't find anyone in the education community who believes that 400 new teachers and 300 librarians and counsellors and aides will be hired. This government is not protecting education. Since 1991, per-student funding in this province has declined by $300. For this government to say that they're protecting education is absolutely ludicrous.

Every parent in the public education system knows that music programs, textbooks and classroom supplies have been cut, and cold and damp portables have become permanent facilities for our children. If this government recognized and realized the importance of getting their financial house in order, so much more would be possible in health care and education. We would be able to finance and enhance education and provide more choices for students, teachers and parents.

One of the members opposite talked about Ontario. Well, this year -- this week -- the government of Ontario announced it was increasing education funding by $600 million for purchasing new textbooks and software and over $1 billion for special education and transportation in rural communities. Now, as we speak, our school boards are trying to develop their local operating budgets. It's the trustees, the administrators and the teachers who are struggling to protect education, not that government.

There is increased funding for health care, $228 million, with $10 million designated to new mental health programs. I don't think there's anyone in this House who would disagree that we need more resources in mental health. That's one of the black marks that this government deserves -- a huge black mark. This government has done nothing for mental health. So it's welcome news, again, that the government is finally recognizing they need to do something with mental health.

Of course, the government never passes up an opportunity to tell us what a wonderful job they're doing, trying to protect health care and the health care system. But again, what are the facts? Well, I'm told that the funding level for hospitals in 1992 was 18.3 percent of the health care budget, and in 1997 it was reduced to 15.5 percent of the budget. This doesn't sound like protecting health care to me. It has meant long surgery wait-lists, overflowing emergency rooms, virtually no home care support. These surgical beds taken up by medical patients waiting to move to long term care facilities that aren't 

[ Page 6706 ]

there. . . . I didn't hear one word in this government's budget about long term care facilities for our seniors -- not a word.

Home care is another area that needs to have some serious consideration. I didn't hear a word from this government about home care either. Everywhere you go around this province, virtually every community that you talk to has said that home care is non-existent in many parts of the province -- non-existent, and not a word from this government on how they're going to solve that problem.

Now, I'm also told -- and this was hard to believe -- that our public schools are open for business more days than the Vancouver Hospital. You figure out that there are two months of summer holidays, spring break, Christmas break, pro-D days -- all of these days that our students are not in school -- and the Vancouver Hospital is closed more days than our public schools. I'm also told that our ambulance teams have to radio around the lower mainland to find an emergency ward that will accept their patients. This doesn't sound like protecting health care. This is not protecting health care.

So the Finance minister says that next year the budget will be balanced. Well, who could possibly believe anything that this government says anymore? Yet they call this budget balanced in terms of its approach to dealing with health care and education. The government chides us when we call for greater spending on schools and hospitals, asking: "Where are you going to get the money from?" That's what we just heard from the members opposite: "Where are you going to get the money from?" Well, let me tell the members opposite what they could have done. They could have used the $329 million -- and climbing -- that was poured into Skeena Cellulose. That money could have been used to build 47 new elementary schools and 27 new high schools. That's how many schools this government could have built with $329 million.

Hon. Speaker, that government has continually given out misinformation, told half-truths and misled the province about our financial affairs, day in and day out for over six and a half years. They have proven to be incredibly incompetent, outrageously untruthful and, worst of all, completely indifferent to the hardships that many British Columbians are going through as a result of their policies. As a result of that government's policies, people are hurting. B.C. is in chaos -- the forest industry, mining, health care, education, transportation and protection of children -- everywhere you look.

[11:15]

This province is fast sliding into a made-in-B.C. recession as a result of the taxation, as a result of. . . .

An Hon. Member: And you're helping.

L. Stephens: The government doesn't need any help. The government's doing just a great job all by themselves -- with the taxation policies, the borrowing and the spending policies of that NDP government.

This opposition totally rejects that government's record of lost jobs, closed mills, bankrupt businesses, endangered children and grossly misrepresented budgets. There is no attempt in this budget to look after the long-term interests of this province, its economy or, most of all, its people -- no attempt whatsoever. This budget fails to address the critical need to enhance the competitiveness of the British Columbia economy, to develop a plan to reduce the provincial debt or to restore investor confidence. Hon. Speaker, I urge all members to reject this budget.

G. Plant: Thank you, Mr. Deputy Speaker. I'm glad to have the first opportunity of this session to rise and participate in debate, and I should begin by congratulating you on your elevation to your new position and the Speaker herself on her elevation to her new position. We wish both of you well, I'm sure, in what is always a challenging job.

It is good to be back in the Legislature of British Columbia. I'm grateful for that provision, in whatever statute it is, that says we do have to come here at least once a year and have the opportunity to hold the government to account for its actions. And today I'm delighted to have the opportunity to speak in response to the budget speech.

British Columbians do not need to be reminded of the problem. The problem is that B.C.'s economy is in the tank. I'm looking forward to the announcement any day, when, for the second year in a row, the Premier of British Columbia will be selected Alberta's businessman of the year.

[The Speaker in the chair.]

British Columbians know the statistics, but they still hurt. There were fewer British Columbians working in January 1998 compared with January 1997. British Columbia has last place in Canada in gross domestic product growth, behind every other province in Canada. By all accounts, we have a deteriorating investment climate, and we have an unemployment rate that is nearly twice that of our nearest neighbour. We have, most tragically of all, a youth unemployment rate in British Columbia -- the province of unbounded opportunity -- which is the highest of any province west of Quebec. British Columbians also know the reason for these problems: seven years of NDP fiscal mismanagement; seven years of NDP tax increases; seven years of NDP deficit budgets; seven years of NDP spiralling debt; seven years and a thousand miles of NDP red tape; and seven years of a sign on the door to British Columbia that says: "Investment, stay out."

These facts, these problems, the reason for these problems, presented the government this spring with not just an opportunity for a change of direction but an urgent need for a new direction. Over the past few weeks, all of our expectations were raised by the press announcements, the pictures on the front pages of the newspapers, the radio interviews, the press releases, the hints that this government and this Premier had finally got the message about what was needed to create a prosperous economy. We heard hints of significant tax reductions; we heard hints of significant changes in the way that government creates a climate for business; we heard hints of a whole range of potentially significant changes in the way that this government participates in the economy of British Columbia. Unfortunately, there is no hoax crueller than the hoax of false expectations.

My expectations and the expectations of all the people on this side of the House and the expectations of thousands upon thousands of hard-working British Columbians are truly and dramatically let down by this pathetic failure of a budget. Instead of a new change, a real change, a significant change of 

[ Page 6707 ]

direction, we got the same old more debt, more deficits, more dishonesty and another pocketful of NDP never-never-land promises.

Hon. Speaker, the sky is not falling. The people of this province are tremendously creative, resilient, persistent. . . .

Interjection.

G. Plant: Hon. Speaker, I am delighted to see that I have the attention of the Minister of Aboriginal Affairs and Minister of Labour -- a minister who presides as Minister of Aboriginal Affairs over a ministry which for six years has abandoned the interests of British Columbians in the courts and has abandoned the interests of British Columbians at the bargaining table.

Interjection.

G. Plant: And we are on the budget, hon. Speaker, because this minister presides over a ministry which last year did more to damage investor confidence in this province than any other ministry of the Crown.

So I turn to the specific announcements in the budget. What is it that the government did to make to us this claim that it changed direction? Well, the Finance minister says she is making progress on the deficit. Next year the deficit will be $95 million, and in some year later down the road -- maybe it's next year, maybe it's the year after that, who knows? -- we'll get a made-in-NDP balanced budget. The truth is, according to the summary financial statements produced within the budget report documents, that the true provincial deficit next year will be $949 million. The last time I looked that was ten times $95 million. So that's what this government has done for British Columbians on the deficit front.

What has this government done for British Columbians on the debt front? Well, it's going to increase that debt. It's going to increase that debt next year by over $1.25 billion, taking total provincial debt to a number over $31 billion.

What do we get in return on the personal tax front? We get a promise of a 1 percent reduction in the provincial personal income tax rate, which will become effective sometime next year and will amount to something like the enormous sum of $89 for an individual earning $50,000 a year in income. Well, that's dinner for two once a year.

But here's the point. Beyond the fact that in its tax reduction this government is doing nothing for British Columbians, it is not even beginning to send the signal that it says it's sending. For all of the rest of 1998, British Columbia will continue to have the highest marginal tax rate in all of North America, and for all of 1999 -- the whole year following -- we will continue to have the second-highest marginal tax rate in Canada. That's a great signal to send to the investment community here in British Columbia and elsewhere in North America. This isn't turning a corner; this is the same straight-ahead path down the hill to nowhere land.

In the meantime the government says: "Well, we're promising tax reductions. Why don't we do that other thing? Let's just increase a whole whack of fees. Let's increase fees for a whole range of unavoidable and essential government services by more than $50 million." That's court filing fees, land title fees, corporate registry fees -- all the fees that business people need to pay in order to conduct their business here in British Columbia. And yes, that marvellous magical moment of NDP timing: those fee increases will be in place by May 1, eight months before we begin to see the reductions in taxes promised by this government.

Then we have promises from this government about a new approach to business in the form of cuts in business taxes. Well, fine, let's look at that. The rate on small business income tax will be reduced by 0.5 percent, effective January 1, 1999. Let's assume for a moment that that amounts to something more than seven days' worth of one additional job for one minimum wage person in one business. The truth is that after that reduction is implemented, British Columbia's business tax rate will still be 42 percent higher than that of Alberta. In terms of attracting business to British Columbia, I can't imagine a less effective signal.

Red tape. Well, we've heard all about that. The government has promised a committee to look into ways to cut red tape. Imagine that: a bureaucracy to look at ways of cutting red tape. I'm looking forward to the bill that will be called the "Cut Red Tape Advocate's Bill." Or maybe it will be called the "Red Tape Reduction Renewal Bill." Or maybe it will be called "Protection Against Red Tape Bill." Whatever it will be, I am sure it will be nothing more than one more ineffective NDP agency to waste taxpayers' dollars and will in fact result in more red tape rather than less.

Here is the part about this budget that troubles me the most. Next year, debt-servicing costs -- the costs to pay the increased, spiralling debt, which is the legacy of seven years of NDP government -- will reach almost $2.5 billion. That's the amount that the government will have to pay in order to keep the debt alive. Let's compare that to what the government spends when it delivers public service to British Columbians.

If you were to take the program expenditures of the ministries of Attorney General, Employment and Investment, Municipal Affairs, Small Business, Tourism and Culture, Energy and Mines, Environment, Lands and Parks, Aboriginal Affairs, Fisheries, Forests, Labour and Women's Equality and add them all together, there would be less money than this government will have to spend on debt-servicing costs to pay for its legacy to the children and grandchildren of British Columbians. And that is a shame.

If debt-servicing costs were a programmed expenditure item, they would be the third-largest program in this province. Think of what the government could do with $2.46 billion if it didn't have to spend it on servicing the public debt. The challenge presented by those numbers, and the challenge for all of us in talking about budgets, is always to remember their impact on the lives of ordinary British Columbians.

I want to tell a story. Last fall a parent advisory council of an elementary school in my riding found that it had the opportunity to participate in a charity casino over a weekend, and they did so. The good parents spent their weekend in those marvellous smoke-filled, windowless rooms, and at the end of their time they collected their share of the proceeds. What did they do with those proceeds? Why were they doing this? Well, I asked. The answer is that this was a PAC committee at a public school in Richmond, an elementary school, that was forced to raise money to buy required grade 7 science textbooks. This from a government that says that it's protecting education in British Columbia?

[11:30]

[ Page 6708 ]

tions, because this government has failed to keep any of its promises with respect to funding legal aid. Those are the real people who are affected by this government's mismanagement of our economy. Think of the patients on surgery waiting lists; the shop owners in my community of Steveston who stay after work every night, filling out the papers and forms required because of the regulatory demands made by this government; and the owner of the small but growing high-tech business in my community who can't find qualified engineers willing to move to this province, because our tax rates are so high.

The other day someone came to my constituency office. He had spent 50 years building his life in British Columbia. He began as a man with very little education. He worked hard, he invested every dollar he ever made, and he was fortunate enough along the way to be able to buy a little commercial building here, a little commercial building there. Now he's in his mid-seventies, and someone said: "You know, you should think about where you want to die. You should get advice about where you die." He did that. He went to visit an accountant, and the accountant said: "If you move to Alberta and die, your estate will be better off by $246,000 than if you die in British Columbia." Can you imagine the message that must send to British Columbians all across this province? People now feel that there is an incentive to move out of the province because they can't afford to die here. What a shame!

These are the real people whose lives are affected by the decisions we make here and whose lives will not be improved by this budget. I have listened with interest to the speeches made this morning by my colleagues opposite, who always seem to spend an awful lot of time commenting upon our views rather than doing what I think they should do, which is defend their budget and actually explain it to British Columbians. I was amused to hear one of the members opposite -- I think it was the Small Business, Tourism and Culture minister -- say: "Yes, what do we stand for over here? Oh, those Liberals. All they want to do is spend, spend, spend." Then I heard the member for Vancouver-Burrard, who is a minister, say: "Oh, those Liberals. All they ever want to do is cut, cut, cut." Well, they can't even figure out what we stand for. It's no surprise that they don't have any clue what they stand for or what their vision is for British Columbians.

I listened with interest to the member for Vancouver-Burrard, whose views on gaming are well known to British Columbians. When he stood up in this House a few moments ago and attacked the government of Alberta. . . . Oh, did he attack the government of Alberta. He said: "You know how the government of Alberta manages to balance its books? It does so on the backs of the VLT addicts." What a powerful comment! What a pathetic comment from a government that last year predicted and desperately needed $275 million in additional revenues from gaming. What a pathetic state of affairs! This government is the worst addict on gaming revenues across Canada. It still can't balance its budgets, and it still can't spend money responsibly.

I remember the never-ending ad campaigns, the claim that the NDP cared about ordinary British Columbians. I thought some members of that caucus opposite actually meant it when they said they were on the side of ordinary British Columbians. That claim is totally false.

Make no mistake about it, hon. Speaker, there are solutions. This is not just about doom and gloom; there are alternatives. We can make government live within its means. We can make government tell the truth about its finances. We can make significant tax cuts. We can make real cuts in regulation -- the regulation that stifles initiative. We can give young people new reason to commit their resources and their lives to this province. We have solutions on this side of the House. On that side of the House, they just don't get it. We needed bold action from this government, and we didn't get it. The NDP have failed British Columbians once again. I oppose this budget.

B. Penner: Hon. Speaker, before I begin my comments with respect to the budget speech, I'd like to extend my congratulations to you on your election to the esteemed position of Speaker of the Legislature. I wish you the best of luck in that endeavour. In fact, you and I share some similarities. I think you were a legislative intern here, as I was back in 1989. Of course, you had that experience somewhat before I did. Anyway, from one former legislative intern to another, congratulations.

It is a pleasure to be back in the Legislature. I think it's been about eight months since we last had the chance to debate issues of importance to people in the province of British Columbia. In my view, that is far too long to go between sittings of the Legislature. Prior to becoming elected as the member for Chilliwack, I held a number of jobs in addition to being a legislative intern. In all of those jobs, my employers told me very clearly when they expected me to show up for work and what my work hours would be.

This is the first time I've held a job where, quite honestly, I can't tell people when I'm expected to turn up for work from one month to the next. Furthermore, once I do turn up for work, we don't know how long we're going to be here. I don't think that's a way to run any business, much less a business that has a budget of $22 billion a year and that represents the interests of 3.5 million people.

One thing we need to look at doing is implementing a fixed schedule of sittings in the Legislature, so that the people who pay taxes -- and believe me, this government makes them pay a lot of taxes -- will know when their elected representatives are going to go to work for them in the Legislature. Of course, we do a lot of work outside of the session, outside of the sittings of the Legislature, and I don't intend to denigrate that work -- meeting with constituents, meeting with various groups representing students, industry and workers. All that work is important. But I think the people that elect us and pay our wages deserve to know when this place will be in session, so that they can hold us more accountable for the work that we need to do on their behalf.

I'm pleased to indicate that the opposition has put forward a proposal for fixed legislative sittings. It is our intention, when that fine day comes and we form the government in this province, to require the provincial budget to be introduced no later than the third week of February and to recall the Legislature, of course, at that time, so that we can get to work on behalf of British Columbians, working out the economic plan for the upcoming year before the current budget expires. In British Columbia we operate on a fiscal year that expires on March 31. I think it would be prudent and beneficial to taxpayers for the government to lay out its economic and financial plan in advance of the expiry of the current fiscal year. This year we did it by just one day. The budget, I believe, was tabled March 30, and March 31 was the end of the fiscal year. That's not enough time to debate the budget in detail and approve the spending estimates before the previous budget expires. And, of course, then we get into the whole issue of having to debate interim supply, which is sort of a band-aid measure to tide us over until we authorize the full spending laid out in detail in the budget. So those are some comments from me.

[ Page 6709 ]

I would also like to see us move toward a program that they have in Ontario, as well as at the federal level, where you have sittings of the Legislature in the fall. You deal primarily with the budget and related legislation in the spring and then move to debating substantive legislation in the fall. We could have regular hours and not have to contend with sitting late into the evening, as we often do here, and with the situation of legislation by exhaustion. I think those would be some real, concrete steps to bringing a bit more order and a more businesslike approach to looking after the affairs of British Columbians.

Now to deal with the budget itself, in detail. For months leading up to the budget, which was introduced this past Monday, we've heard a lot of speculation. There's been a lot of newspaper reporting, and there have been a lot of stories on TV about what this budget would contain. There's been a lot of expectation and, frankly, some anxiety, because it's become all too apparent that the B.C. economy is in trouble. We've gone from being the fastest-growing economy in Canada to being in last place. Frankly, growing up in British Columbia, I never thought that I would see the day when Newfoundland would be leading the country and British Columbia would be trailing the country in economic growth. I didn't think that was possible. Regrettably, it has happened. So there was a lot of speculation and anticipation about what this budget would do to turn that situation around, or at least to get it started turning around. But alas, it appears that we've ended up with another NDP provincial budget without any meaningful relief for people, or those who create jobs, this year. We're told it will be coming -- just wait for it; maybe next year, in the year 2000, and then the year 2001. That's a long time to wait to start turning around a serious and worsening situation.

In my view, there is very little relief for taxpayers who have been consistently squeezed by this government. This government finds every way possible to get into the pockets and wallets of British Columbians, and there is very little relief for small businesses which have been on the verge of closing their doors, or of moving to Alberta, or Nevada, or Oregon, or Idaho, or Washington State or even to Ontario. What this year's budget has proved, in my view, is that we do have an NDP government that doesn't understand the true severity of the economic situation facing British Columbia. They don't understand the need to control costs, reduce debt and significantly lower taxes.

I think one of the biggest disappointments in the budget has been the much-ballyhooed tax cuts. We heard the Premier, prior to the budget being introduced, saying: "Trust me, significant tax cuts are coming. They're coming." This raised expectations. Unfortunately, those expectations have not been met. The tax cuts announced in the budget will make no difference this year to the majority of British Columbians. In fact, you won't see changes to your paycheque, as a working British Columbian, until January 1999. That is too little, too late. Even then, for many people those tax cuts will amount to less than the cost of a dinner -- if they take their family out for that kind of experience -- once a year.

On Monday evening, after the budget was introduced, I was heading back to my constituency on the ferry, and I encountered a gentleman from Chilliwack with his young son. They had been in Victoria for the day. He had come here for a job interview; he's looking for work. I was describing to him the tax cut, and he wanted to know what benefit that would be to him and his family. I told him that for a person earning his income, roughly $35,000 a year, it would amount to about 17 cents a day. He pointed out to me that that would be less in a year than the cost of him taking one trip to Victoria on the ferry with his son and his vehicle. That's the impact of this budget, in terms of reducing the tax load to British Columbians: less than one trip on a ferry, one way, with one of their children and their vehicle. That's pretty insignificant and pretty disappointing.

So the question is: what will this do to turn around the state of our economy, and to turn around the situation where we see an increasing flow of people and businesses from British Columbia leaving for other places such as Alberta or Washington State? In my view, very little or nothing. What this is going to do is probably convince those companies that have already left that it was a good thing they did leave at the time that they left. I don't think it'll do much to bring them back.

We do need a real, significant tax break for working families -- a significant one, more than 17 cents a day. We didn't get it, and I think that speaks volumes about the priorities of the NDP government. What they did, and we found this out yesterday, is give a specific $8 million tax break to a bank, the Hongkong Bank of Canada. I'm sure that bank is pleased to not have to pay as many taxes. But other British Columbians would like to see a significant tax break for them as well.

[11:45]

They spent millions in taxpayers' money telling British Columbians that they had balanced the budget and run a surplus. That all evaporated after the election, and we found out that it was not true. It simply wasn't true. It was deceitful. We have run seven consecutive deficit budgets in British Columbia at a time when our economy was growing and was, at that time, the fastest in Canada in terms of economic growth. During a boom period we continued to borrow; our debt has gone up. Now when we're facing a crunch, we're painted into a corner. It's this government's responsibility to get us out of that corner. But I don't think they have the map or the willpower to lead us out in new directions towards renewed prosperity for British Columbia.

Take a look at Alberta. We've heard about that. They've had five consecutive balanced budgets, and now they can increase spending on health care and education. In the budget introduced there about a month and a half ago, they announced increased spending for health care and education of $500 million. That's an incredible increase at a time when they're also reducing their debt. What has been the impact of reduced debt? Their interest costs have gone down. They're facing a situation where they have to pay less to service their debt, so now they have more to spend on health care education and roads and infrastructure.

Take a look at New Brunswick and Manitoba. Both Manitoba and New Brunswick have had four consecutive balanced budgets. In fact, they're running surpluses. Even NDP 

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Saskatchewan, which used to suffer from a huge out-migration of people, has had five consecutive balanced budgets. This year alone they will reduce their total provincial debt by $500 million -- this in a province with a much smaller population than British Columbia and with a much less diverse economy in terms of the natural resources available to it. Saskatchewan is running a surplus, paying down its debt and increasing spending for health care and education. Why haven't we done that in B.C.? That's because we lived beyond our means here. This government was not frugal with taxpayers' money during the boom period, and now that we're suffering a downturn, we are painted into a corner.

Debt. Debt has many impacts. Debt is the silent killer of jobs. Debt is the silent killer of health care services. Debt is the silent killer of education and infrastructure programs. Why is that? Well, as anybody who has ever had a mortgage or who has had the experience of putting too much debt on their credit card knows, you have to pay interest on the money that you've borrowed, and the bank wants to get paid first every month. They're the first people that come along and say: "You've now got to pay us before you can go and do anything else for your family. Before you can buy groceries, before you can mow the lawn and put gas in your lawnmower, you've got to pay the bank."

In British Columbia, we're paying the bank -- or those who have lent money to us -- $2.46 billion a year in debt-servicing costs. How much has it increased while this government's been in office? By about $800 million per year, every year, and that's going to continue, year after year. But the really scary thing is that we're spending $2.46 billion in debt-servicing costs while interest rates are at virtually record lows. Just imagine what would happen if interest rates started to move up, as they are predicted to by most economists, who say there's going to be a gradual increase in interest rates. A 1 percentage point increase in interest will add about $220 million this year to the cost of servicing our debt. How many hospitals, how many schools, how many roads could you improve or build completely from scratch with $220 million every year? Quite a few. Again, over the last seven years this government has increased our debt-servicing costs by $800 million per year. That's a lot of money, and it has to be paid every year. That's the vicious circle that you get into when your debt gets out of control.

Now, we've heard members opposite point out that B.C. has a lower debt per capita than some other provinces, and I'm happy about that. But that's hardly an excuse to let our situation deteriorate. It's a little bit like saying, if you have a leak on a ship: "It's okay; we haven't sunk yet. We're taking on water, but it's okay. The ship is listing a bit, and we're going down, but we haven't sunk yet. We think we can probably fix it later, but we're going to continue to allow the leak to happen and to allow the ship of state to take on more water." Well, I think if we were still able to speak to the former captain of the Titanic, he would tell you that the moment you know you're taking on water, if you possibly can, stop the leak -- stop the hemorrhage. Don't allow the situation to get worse.

That seems to be what this government in British Columbia is saying, that we can afford to allow the situation to get worse. Hon. Speaker, I say no, we can't afford to let the situation get worse. We have to stop the leak now. We're taking on too much red ink, and it's time to turn it around. It takes courage to do that.

I think we needed bold action in this budget to address the problems that I've identified. We haven't got it. The fact is that the Premier and the rest of his government have shown that they have been unable to find a solution to fixing the damage that they have caused to our economy.

We've heard a lot about the Asian crisis, but B.C.'s competitive advantage and our position in Canada started deteriorating long before last fall, when markets in Asia started to collapse. We've been on this trend for about four or five years. It takes a while for economic trends to take hold. But once they do, it's hard to turn them around, and this government was whistling past the graveyard for the last four or five years as they allowed our debt to go higher and our economic advantage to be dissipated through increased regulatory costs, higher stumpage fees and increased taxes. That's been the effect. We're now feeling the pinch, and by most accounts it's going to get worse before it gets better.

Now, that's what I had to say, but don't take my word for it. Take a look in the Province today. There are five letters to the editor talking about the recent budget. Four out of five of those letters -- 80 percent -- are critical of the budget. I'll read the first one to you: "Thanks to [the Finance minister], I laid awake last night tossing and turning, wondering where I was going to spend the extra $17.13 she so graciously gave back to me [in the budget]. Of course, I won't be getting it until next year. So I guess I will have to just struggle along till this windfall reaches my wallet." That's from somebody in Kamloops. One person who wrote in thought the Finance minister had done a good job, but 80 percent of those letters were negative.

Then we have a letter from the Certified General Accountants Association of British Columbia, and this is what they have to say about the budget. The president of that organization says: "We're facing a recession, and we need a serious plan to restore confidence in B.C. Instead, we have promises and half-measures that will take effect months and even years from now." That's because the much-ballyhooed tax relief doesn't take effect until next year. Nobody in British Columbia is going to see that on their paycheque tomorrow, next month or even five or six months from now. They have to wait. Meanwhile, the situation in B.C. is getting more and more serious. The president of the CGAA goes on to say:

"While [the minister] says that B.C. is the number one place to live, this budget has done little to make it the number one place to invest. The fact is, we are on the brink of a recession, and this budget has done very little to stop us sliding over the edge.

"Nor can the government continue to blame the current malaise on the Asian financial meltdown, fluctuating resource prices or cutbacks of federal transfer payments."

I've also just received an analysis by an independent economist in Vancouver. In a nutshell, this is what he says: the negative economic momentum in the B.C. economy will accelerate this year. It's not slowing down; we're not turning the corner. By all accounts the negative momentum is accelerating, and that is incredibly worrisome. I take no delight in that. That's troubling for everybody. He points out that the budget projects an increase in taxpayer-supported debt by the end of next year of more than $1 billion and that this will increase the ratio of taxpayer-supported debt to GDP to 21.2 percent, which violates the government's self-imposed target of 20.5 percent as stated in their budget last year. So according to this economist, the government is violating its own targets.

[ Page 6711 ]

But we've seen that before. They set a debt management plan and then failed to meet any one of the targets set in the debt management plan back in 1995. They performed so poorly according to their own plan that they had to tear up that plan and come back with a financial management plan with reduced standards, and they're having a hard time meeting that.

I go on to read this analysis, and this troubles me as well: this budget projects an increase in per capita debt of 2.4 percent this year, to a total of $7,811 for every man, woman and child in British Columbia. So the debt per capita will be over $7,800 for every man, woman and child in British Columbia as a result of this budget.

Now, the Minister of Finance makes much of the fact that she's based her economic assumptions on what she says are prudent forecasts. In the budget they're anticipating growth of about 0.9 percent, less than 1 percent economic growth this year -- hardly a stellar performance, the lowest in the country in terms of forecasts. But according to this economist in Vancouver, even that projection may be unduly optimistic. He points out that the most telling feature of economic forecasts for British Columbia is that they've been scaled back so rapidly. In just two months, if we go back only to January, the consensus of most economists and banks in Canada was that British Columbia would enjoy 1.4 percent real economic growth this year. Within the last two weeks the average has dropped to less that a third of that. That's a dramatic decrease in the anticipated rate of growth.

That's the trend, and if that trend continues, then the economic assumptions in the budget are flawed. The revenue projections in this budget are flawed and not realistic. That will result in a higher debt incurred this year, a higher deficit and ultimately higher servicing costs next year, forcing out important services like health care and education. It's taking money away from those priorities and putting it into debt servicing.

I see that we're running short on time, so I'll cut to the chase. My final comment will be that I don't believe that the anticipated deficit will be as stated. The Minister of Finance claims that it will be a $95 million deficit, yet according to her own documents -- the budget reports put out by the Ministry of Finance, on page 33, "Summary Financial Statements," surplus or deficit -- in this case it's a deficit of $949 million. That's ten times the stated deficit that she's claimed in her press release that accompanied the budget. That's ten times the deficit that they're telling British Columbians we're going to have.

We can't afford to continue to mislead British Columbians. That's why the opposition has tabled legislation called Truth in Budgeting, because with any problem, you have to know the true extent of the problem, face up to it and admit to yourself that you have a problem before you can take meaningful steps to correct it. This government refuses to admit that they have a debt problem. They've consistently engaged in accounting trickery for the last seven years, trying to hide the true financial state of the province from the taxpayers, and that is not acceptable. Taxpayers are footing the bill. They deserve to know the true nature of B.C.'s accounts. That's why the Liberal opposition has put forward truth-in-budgeting legislation: to require the government to keep its books the way the government requires you to keep your books.

It's not just me saying that the government hasn't kept its books properly; it's the auditor general. In his latest review of government spending in British Columbia, he saw fit to give a qualified opinion. He couldn't give the public accounts of British Columbia an unqualified opinion; he had to qualify his remarks because of the accounting practices of this government. Before you can solve the problem, you have to face up to the fact that you have a problem. This government hasn't done it, this budget hasn't done it, and I'm going to vote against this budget.

Noting the hour, hon. Speaker, I will conclude my remarks and move that this House do stand adjourned.

The Speaker: Hon. member, you adjourn the debate at this point.

B. Penner: Sorry. I won't adjourn the Legislature itself; I'll just adjourn debate on the budget.

B. Penner moved adjournment of the debate.

Motion approved.

Hon. D. Streifel moved adjournment of the House.

Motion approved.

The House adjourned at 12 noon.

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