Hansard -- Volume 3, Number 8 -- Tuesday, February 19, 2002

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

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY



CONTENTS

	Routine Proceedings
		Page

Introductions by Members		1199
	Hon. G. Collins

Statements (Standing Order 25B)		1199
	Guide-Scout Week	1199
	H. Bloy
	Daylight savings time	1199
	B. Suffredine
	Maillardville's Festival du Bois	1199
	R. Stewart

Oral Questions
	Access to information on Medical Services Plan	1200
	J. MacPhail
	Hon. C. Hansen
	J. Kwan
	Pacific National Exhibition	1201
	R. Nijjar
	Hon. R. Thorpe
	Services of Agriculture, Food and Fisheries ministry	1201
	B. Suffredine
	Hon. J. van Dongen
	Availability of Health Planning minister	1202
	J. Kwan
	J. MacPhail
	Hon. S. Hawkins

Budget Debate
	Hon. G. Collins	1203
	J. MacPhail	1209

Introduction and First Reading of Bills		1210
	Budget Measures Implementation Act, 2002 (Bill 2). Hon. G. Collins
	Taxation Statutes Amendment Act, 2002 (Bill 3). Hon. G. Collins
	Corporation Capital Tax Amendment Act, 2002 (Bill 4). Hon. G. Collins

Tabling Documents		1210
	Government's strategic plan and service plans

Hon. G. Collins: We don't normally have introductions on budget or throne speech day, but on behalf of all members, I want to welcome all the guests who have taken the time to join us today. We wish them welcome.

H. Bloy: I rise today to acknowledge Scouts Canada and Girl Guides of Canada, through the recognition that this is Guide-Scout Week officially. This week members of scouting and guiding will be celebrating the birthdays of Lord and Lady Baden-Powell, the founding members of scouting and guiding. I proudly wear the Scout uniform today. I've been active for many years in scouting as an adult and as a child, in both Cubs and Sea Scouts.

Scouts have taught me a great deal about community and leadership. I have also had the great opportunity of watching my two children go through scouting and guiding. The over 2,500 Scouts and Guides in my riding of Burquitlam, together with 68,000 Scouts and Guides in British Columbia and over 350,000 scouting and guiding members in Canada, are an amazing group. Worldwide, scouting has over 33 million individuals.

Guiding and scouting provide a valuable service to our young people. The mission of Scouts Canada is to contribute to the development of young men and women in all aspects of their lives while teaching them valuable lessons in leadership and instilling commitment to the community. The mission of Girl Guides of Canada is to help girls and young women become responsible citizens, able to give leadership and service to the community on a local, national and international level.

I applaud the thousands and thousands of volunteers working with today's youth for tomorrow.

B. Suffredine: Today I want to raise an unusual topic that many of my constituents have encouraged me to pursue. I know it's not a pressing issue, but it's one that I believe we should all consider. I hope that members present today will say: "It's about time."

In 1981 the National Research Council issued a discussion paper on daylight savings time. They said that significant energy consumption savings would result if we adopted daylight savings time by February 15 in each year. They concluded that our quality of life would improve, auto accidents would be reduced, crime prevention would be enhanced, and we would be able to live a healthier lifestyle.

Shifting time so more hours of daylight fall in the evening means we're able to enjoy recreation in the early evening hours. We save power, because we consume more power in the evening when we go home. If it's still light, we stay outdoors. We can enjoy life more and protect the environment. Surprisingly, no environmental group has ever advocated this change. By February 15, the sun comes up before 8 a.m. in every major city across Canada. Managing our daylight better would bring significant short-term and long-term benefits. We would all be healthier, happier, safer and wealthier.

Management of time is a national and international issue that requires coordination between provinces and countries. I ask that all members of the House consider creating a mechanism to act on these recommendations, as old as they may be. Demonstrating vision and imagination will benefit us all. On this issue, Mr. Speaker, I can fairly say: "It's about time."

R. Stewart: I stand today to invite all to a great festival, Maillardville's annual Festival du Bois. It was many years ago that Maillardville started its Francofête, a festival rooted in the history of the province's largest French Canadian community. Today's Festival du Bois, or festival of wood, celebrates the importance of forests in British Columbia's history and in the history of B.C.'s francophone community. It celebrates those French Canadians from Quebec and Ontario who were brought here near the turn of the century to work in our forests and mills because of their skill with wood. It also celebrates francophones from other areas, such as my mother's heritage from St. Boniface, Manitoba.

Now part of the chain of festivals that includes the Carnaval de Québec and Manitoba's Festival du Voyageur, Maillardville's Festival du Bois is a grand event that attracts some 15,000 visitors each year. This includes about 4,000 students from neighbouring schools, including schools from across the lower mainland and as far away as Kamloops, who garner a greater understanding of the francophone heritage that contributed so much to the richness of this province and this country.

Visitors to this extremely successful bilingual festival get to taste such foods as traditional poutine, maple sugar pie and, of course, tourtière. They can visit the cabane à sucre for some tire, which is maple syrup hardened over snow. Saturday evening's entertainment is without equal.

Coquitlam is indeed a city of festivals. From multiculturalism to trees, Coquitlam gets together often and in great numbers to celebrate our community. Festival du Bois has a special place in my heart.

[The member spoke French.] I am very proud to invite you all to this year's Festival du Bois de Maillardville in Blue Mountain Park, March 9 and 10. Come celebrate with us.

J. MacPhail: Almost every day this government breaks another health care promise. Today is no different. The opposition has learned that as of March 4, if you have an issue with the Medical Services Plan and you have to talk to a human being to get that problem fixed, it's going to cost you.

According to an internal government document, toll-free telephone access to the registration and premium billing branch will be restricted to voice mail service. Those who need to speak with a person will have to pay long-distance costs.

To the Minister of Health Services: he's getting a lot of practice lately explaining another broken promise. Explain this one.

Hon. C. Hansen: We made a commitment to British Columbians in the election that we would be protecting the health care budget in this province. We have done that. As you will see today, it is in fact being enhanced.

As far as the Medical Services Plan consultations, when I was on the opposition benches as that member is now, I asked repeatedly what the Minister of Health of the day was doing to ensure that people would get more timely access to information. The response that always came was: "Well, we'd like to add more staff, but we don't have the resources."

My response at the time was: "Don't look at adding more staff. Use technology to deliver public services in a timely way." That is exactly what we are doing.

J. MacPhail: Let me remind the minister of a promise that the Premier made. The Premier promised health care services "when you need them and where you need them." But if you live in a small community far away from Victoria, that promise doesn't seem to apply. You have to pay extra.

To the Minister of Health Services: maybe, given what he's just said, he can explain why it's fair that a woman in Revelstoke should have to pay more for the government to help her than the people of Victoria. Shouldn't everyone, as the Premier promised, no matter where they live, be treated the same?

Hon. C. Hansen: I would like to remind the member that the world does not revolve around Victoria. We need to be able to deliver information and health services in communities throughout British Columbia. That is exactly what our restructuring of health authorities is going to do. We're going to wind up with better services at the local level, whether it's in Revelstoke or any other community around British Columbia.

J. MacPhail: I know the minister is under a lot of stress, but perhaps he could just listen to my question. He doesn't seem to understand that nickel-and-diming people who don't make big salaries and who don't get a huge tax cut can add up to a big financial burden.

Maybe the minister could put himself in the shoes of a person that I'm talking about: a single mother living in Revelstoke. She's just discovered she's been laid off. She discovers that MSP has made a mistake and has double-billed her. She has to now get on the phone, sit on hold for an hour — because the government has actually cut MSP services by a full half — before she gets a human being. Does she get an apology for the mistake? Does she get an apology for the time she has to spend on hold while racking up long-distance calls?

J. MacPhail: Or does she get a big, huge phone bill at the end of the month?

Hon. C. Hansen: I'm astounded that this member is raising this. The horror stories that I heard about people sitting on phones trying to contact MSP were when she was the Minister of Health in this province.

Hon. C. Hansen: We, on the other hand, are actually using technology to make sure that people in every part of British Columbia can get faster and more timely information about how their MSP premiums can be affected or how they can benefit from programs.

J. Kwan: According to the internal document, this cut is a direct result of the government's budget freeze — another promise broken. The document goes on to say that the cut is just one measure to deal with the budget freeze. To the Minister of Health Services: maybe you can tell British Columbians what other health service cuts this internal memo is referring to.

Hon. C. Hansen: Just to reiterate. We made a promise to British Columbians in the last election campaign that we would protect the health and education budgets. The budget for health was actually increased within two months of us becoming government. The Minister of Finance will obviously have more news on that front today. There have been no cuts to the health

budget in British Columbia, and there will not be any cuts to the health budget in British Columbia.

Mr. Speaker: The member for Vancouver–Mount Pleasant with a supplementary question.

J. Kwan: This morning another internal memo went out, explaining that people who spend a fair amount of time on hold may ask MSP to call them back so that they don't have to incur the long-distance charges. The memo advises that people should be told that MSP doesn't have the resources.

The minister can make all the excuses he wants, but his own ministry knows the difference. The documents that we have obtained contradict the words of this minister. Will the minister please stop the charade and finally admit what the ministry is already saying, and that is that government is breaking its health care promises? It's making deep cuts, and those cuts are hurting British Columbians, especially those in small communities who have to pay the long-distance charges even when they're put on hold by the ministry staff.

Hon. C. Hansen: I've got some news for the two hon. members from the opposition. There has been a change in British Columbia. We did not promise the status quo in British Columbia. We did not promise to continue to deliver health care services the way that government did for ten years.

Hon. C. Hansen: We promised that we were actually going to change the way health care was delivered in British Columbia so that we can deliver better service to British Columbians, and we're actually going to start using technology more to deliver those services rather than having people sitting on the end of a telephone line, waiting for somebody in Victoria to answer a question for them.

R. Nijjar: My question is to the Minister of Competition, Science and Enterprise. Last summer the government decided against the relocation of the PNE to Surrey. At that time the minister responsible said that discussions would take place with the city of Vancouver as to the future sustainability of the PNE. My question to the minister responsible is: what has he done to ensure that the PNE's future will remain?

Hon. R. Thorpe: Yes, the province's agreement with the city with respect to the PNE ends at the end of this year. PNE officials have been in regular contact with city of Vancouver officials and parks board officials. We are moving forward, and we are very hopeful that we'll have an agreement in the coming months.

R. Nijjar: The PNE employs 8,000 people directly and indirectly; 2,800 of those are youth. Many of those youth are in my riding of Vancouver-Kingsway and the east side of Vancouver. My question to the minister responsible is: what is he going to do to ensure that youth continue to have summer employment at the PNE fair?

Hon. R. Thorpe: Perhaps the members over there would like to listen, if they care about youth employment.

Our government is committed to working with the city of Vancouver to ensure that the PNE stays in Vancouver. We're also committed to the member and the 2,800 jobs that are in his riding — youth jobs — and the 2,800 jobs that come from the member for Vancouver-Hastings and the member for Vancouver–Mount Pleasant…. Our government is working very, very hard at reducing youth unemployment in British Columbia. I'm surprised that those members over there do not want youth employment in their ridings.

B. Suffredine: Rural communities in British Columbia depend on the Ministry of Agriculture, Food and Fisheries for services that are important to farmers for their continued livelihood. My constituents in Creston are concerned that recent changes in the ministry mean the closure of the Creston office and less staff. Can the Minister of Agriculture, Food and Fisheries tell my constituents how these changes will impact on them and the services they provide?

Hon. J. van Dongen: The member is correct that the Ministry of Agriculture, Food and Fisheries will no longer be providing direct production advice to farmers. We will be providing relevant technical information on our award-winning website called InfoBasket.

I should also convey to the member that we will be continuing to work on environmental and resource management issues. We will be working with other agencies on issues such as wildlife damage, riparian zone management, water management, noxious weeds, pesticide management and a whole range of range management issues. We will continue to work on those with the relevant agencies.

I should also say to the member that I met two weeks ago with Wayne Harris, the president of the Creston Valley Agriculture Society. We discussed ways and means for the ministry and the farmers in Creston

B. Suffredine: The Ministry of Agriculture, Food and Fisheries has announced its attention to shift from prescriptive to results-based regulations. In light of the recently released report into the Walkerton water tragedy, some of my constituents have expressed concerns that this change will result in poor environmental practices going undetected till it is too late. Can the Minister of Agriculture, Food and Fisheries assure my constituents that these changes will not compromise environmental safety in places like Erickson, where they value their water?

Hon. J. van Dongen: Within our three-year service plan, there is an increased emphasis on food safety and quality. We will continue to work with the Ministry of Health and the Canadian Food Inspection Agency on food safety issues.

As I mentioned, the issues of environmental sustainability are very much a critical part of our mandate, and we are working together with the Ministry of Water, Land and Air Protection. We're working on education; we're working on compliance and enforcement approaches to ensure that there is good environmental management. We also have an active agriculture-environmental partnership between the two ministries and the industry, which seeks to work on these issues. Finally, we're engaged in a federal-provincial initiative to develop environmental farm plans on all farms in Canada to ensure good environmental management on those farms.

J. Kwan: There is a new game in the town of Vernon, Mr. Speaker. It's called "Desperately Seeking Sindi." This morning on CBC Daybreak in Kelowna, the Minister of Health Planning's riding, the request went out for anyone out there who might have seen the minister, or who may see the minister, to ask her to please give them a call. They have questions, but they can't get hold of her. For the minister's information, the phone number is 861-3781.

Mr. Speaker: Order, please. Order, please. Would the member please put her question now.

J. Kwan: Of course, the call could be made here in Victoria, free of charge for her expenses. Will the minister be making that call to CBC Daybreak in Kelowna today?

Hon. S. Hawkins: You know, it's awfully tiresome listening to the opposition members talk about not being available. Where was she on the Education Committee meetings? Where was that member…?

Hon. S. Hawkins: Where was the member for Vancouver-Hastings when the Health Committee went out to do consultations around the province?

Hon. S. Hawkins: …when they talk about all the things that are going wrong, all the wasteful spending. How short their memory is.

Hon. S. Hawkins: What about those fast ferries — hey? What about the commitment…?

Hon. S. Hawkins: What about that little junket that member took to England? Sixty thousand dollars. Fifteen thousand dollars in hotel expenses…

Hon. S. Hawkins: …and $300 a day to see a system that wasn't even operational.

Mr. Speaker: Order, hon. members. Order, please. Order, order. Will the Leader of the Opposition please come to order. Thank you.

Hon. G. Collins: I move that this House at its next sitting resolve itself for this session into a committee to consider the supply to be granted to Her Majesty.

Hon. G. Collins presented a message from Her Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 2003, and a supplement to the estimates for the fiscal year ending March 31, 2003, recommending the same to the Legislative Assembly.

Hon. G. Collins moved that the said message and the estimates accompanying the same be referred to Committee of Supply.

Hon. G. Collins: Mr. Speaker, I move, seconded by the hon. Premier of British Columbia, that the hon. Speaker do now leave the chair for the House to go into Committee of Supply.

Hon. G. Collins: Mr. Speaker, today I want to give official notice that on February 17, 2004, I will present to this House and to the people of British Columbia a balanced provincial budget that will be sustainable in the years beyond. It will be a budget that balances not just our books but also our capacity to meet people's needs and maintain a prosperous economy. It will be a budget that marks a turning point in British Columbia's history, a point where our future becomes brighter than our past.

This government has a vision of what this province can be and what it will be in the not-too-distant future: a province where every young person has the choices and opportunities they need to build a successful life for themselves; where patients have access to health care services that meet their needs where they live and when they need them; where the vital public services that all of us rely on are not only supportive but truly sustainable year after year; where we get the maximum benefit from our natural resources and maintain the clean, healthy environment that makes us the envy of people all over the world; where businesses are thriving, creating new jobs and giving new hope to all of our communities; where a culture of innovation harnesses the great ideas that people in this province are generating every single day and turns them into great ventures that benefit all society; where we enjoy the best-performing economy in the country, with the highest levels of private sector investment anywhere; and where British Columbians have confidence and pride in a province that is the best place to live, to work, to do business and to raise our families.

This is a government that has a vision for British Columbia. We have a sound plan for turning that vision into reality. It's a three-year plan that takes a balanced, phased-in approach to reaching our goals and builds on the work the government began last June.

Mr. Speaker, if you will let me, I'd like to digress for a moment to speak of the work that has been done over the last year. I'd like to thank all of my cabinet colleagues and their officials for the work that they've done over the last eight months to help put this plan together. As well, I would like to acknowledge the significant amount of work done by the members of the caucus and the hours they spent in government caucus committees providing their valuable input to these service plans.

Most of all, I would like to extend my deepest respect and appreciation to the officials in the Ministry of Finance for their work over the last year. I know this isn't normally done on budget day, but just imagine, if you will, the amount of work they have done this year. In a normal year they have 12 months to prepare one budget. This year was different. Not only did they prepare the March budget for the previous government, but they had to prepare all the documentation and documents for transition. They had to liaise with the independent fiscal review panel, brief a new minister and a new Premier, help us completely restructure the government, prepare the fiscal and economic minibudget in July, and bring in the largest tax cuts in B.C. history. They also had to develop three-year service plans for government, develop a three-year economic plan, help with the workforce adjustment plan, manage the events of September 11 and their effects on our economy, and prepare for today's budget a full month ahead of normal. I have never worked with a more dedicated, professional, committed and brilliant group of people in my life. The people of this province are well served, and on behalf of the province and people of British Columbia, I say thank you.

All of this hard work results in a three-year fiscal plan to get British Columbia back on track. Implementing it will not be easy. We will not get there overnight, but British Columbia will get there. We will achieve our vision of British Columbia, and we'll do it by delivering on the commitments we made about our economy and our finances during the election.

We promised to do three essential things: to restore sound fiscal management, to revitalize our economy and to put patients and students first. The budget I'm presenting today delivers on all three of these fronts. It increases funding for health care, it protects funding for education, and it's a major step forward in balancing the budget and making the most of the province's opportunities for new growth and increased private sector investment.

It's a clear reflection of our plan for the future, our plan to restore hope and prosperity. It's reasonable, responsible, affordable and realistic, and it demonstrates our unflagging commitment to serve this province and its people by providing good, honest govern-

ment. That is a massive departure from what we inherited, and — let's not mince words — it represents an enormous challenge.

The deficit for the coming year is forecast to be $4.4 billion. This is the first year of our three-year plan. To eliminate that deficit, the province needs two things: spending control and stronger economic growth. Our plan will accomplish both. In the second and third years of our plan we will reduce government spending, in a phased, managed way, by $1.4 billion, and revenues will increase by $2.3 billion.

That's our plan, and I'll talk about how we achieve it shortly. First, I want to discuss how we got here in the first place and why we're stuck with such a massive deficit.

All through the 1990s British Columbians knew something wasn't right. They were working harder, but they weren't getting ahead, and they felt intuitively that we in British Columbia had a problem. The fact is, our economy was no longer competitive, and the government's financial track was anything but sustainable. The facts showed that British Columbia — once a leader, once a magnet for opportunity — turned in a dismal performance during the 1990s. Of all the Canadian provinces, British Columbia had the lowest productivity growth, the lowest growth in private sector investment, the lowest growth in per-capita GDP and one of the least competitive tax regimes in the country.

Families left. Since 1998 more than 50,000 British Columbians left B.C. for Alberta and Ontario alone. Businesses left. The standard of living fell significantly, and people's real disposable incomes fell year after year. All this was during a time when the previous government was singing its praises and telling British Columbians that all was well.

Today we know differently. We believe that British Columbia, by all indications, became a have-not province in the fiscal year 1999-2000. Some people might take comfort in the fact that being a have-not province means we'll get an equalization payment, but that hardly compensates for the utter indignity, the downright shame, of seeing this great province, with all our talented, hard-working people, all of our resources and all of our advantages, having to take a handout from our neighbours in other provinces.

It's shameful, Mr. Speaker. This is the legacy of ten years of reckless spending, overregulation, poor economic choices, fiscal mismanagement and a deliberately and intentionally hostile business climate. The fact that we were on the very edge of becoming a have-not province was something we all felt in our bones and our pocketbooks, but one-time revenue spikes from record high gas and electricity prices papered over the truth about British Columbia's structural problems.

I want to take a moment to clarify the difference between an operating deficit and a structural deficit. An operating deficit happens when your spending is higher than your revenue for a very short period of time. A structural deficit is something different, and it's something far worse. It results from a long-term pattern of consistently spending more than the government can afford year after year after year. It can't be solved with one-time, short-term revenue spikes. In other words, even though last year's budget was balanced and didn't show an operating deficit, the province was headed for serious financial trouble if that surge in revenues from energy disappeared.

That was eight months ago, and since then we've run into a long list of new economic challenges. First of all, compared to what was forecast in March in the last NDP budget, we've seen over a billion dollars of those energy revenues vanish as a result of falling prices and falling demand in the United States. Another $500 million expected from Crown corporations evaporated, and the $1.4 billion pension adjustment in last year's budget was a one-time event.

We've also seen not just a national but a global economic slowdown, which is particularly tough for a province like ours that relies so much on exports. The softwood lumber dispute continues to wreak havoc on our province and our forest-based communities. And finally, the events of September 11 have had a huge impact on investor confidence, on tourism and on the world economy overall.

It's a challenge — a challenge that we're determined to face up to on behalf of the people of British Columbia. It won't be an easy job, but it absolutely must be done. We have no choice if we want to have a future for the people of this province. It is going to be a massive job, but it can be done, and it will be done. The numbers in our plan show how we'll do it.

As I mentioned at open cabinet several weeks ago, we're facing a deficit of $4.4 billion for the coming year. As we turn the corner and our economy starts to recover, the deficit will shrink to $1.8 billion in 2003-04, and the budget will be balanced in a structural way in 2004-05.

The economic forecast that underlies our plan calls for recovery in the United States and Canadian economies in this year, 2002. In 2003 and beyond, these two economies are expected by private sector economists to lead global economic growth. Based on these assumptions of growth in our major markets and the steps we are taking to get the province working again, the B.C. economy is forecast to grow 0.6 percent in 2002, picking up to 2.8 percent the following year. In 2004 and 2005 the B.C. economy is expected to grow by about 3 percent per year. These numbers, our forecast, are slightly lower than the figures projected by the independent Economic Forecast Council.

Looking at the first year of our three-year plan, the $4.4 billion deficit results from a 3.6 percent decline in revenues worth $815 million and a 0.3 percent decrease in overall government spending, which amounts to a reduction of $81 million relative to last year.

We'll also see a $442 million improvement in Crown corporation contributions, and a $750 million forecast allowance has been built in as a cushion against potential further risks. Without that forecast allowance and the one-time restructuring costs of $230 million, the deficit for 2002-03 would be $3.4 billion,

which is about the same as the deficit forecast for the fiscal year just ending.

Revenues are forecast to grow by an average of 5.1 percent a year in 2003-04, in line with the growth in nominal GDP. The full impact of our government restructuring will kick in, with expenditures declining by an average of 2.8 percent per year over the same time period. The resulting $2.3 billion revenue increase and the $1.4 billion spending decrease will reduce the deficit to zero by March 31, 2005.

In the meantime, government debt is expected to increase from $36.4 billion to $43.9 billion by the end of the three-year plan. This reflects the combination of cumulative deficits and capital spending. However, as the deficit moves to zero, the growth in the debt slows down, and the taxpayer-supported debt-to-GDP ratio begins to decline again in 2004-05.

These numbers are, of course, projections, but we will achieve them because we are absolutely committed to getting our fiscal house in order. That means getting rid of the structural deficit once and for all by ensuring that government spending doesn't exceed our revenues.

Mr. Speaker, we know how hard people in this province work. We understand that the tax dollars they send to us here in Victoria are theirs, not ours. We respect that. We respect taxpayers, and we promise to get the maximum value from the tax dollars they send. That's why we're making the government more efficient and doing the hard work needed to get spending under control.

All government MLAs are taking a 5 percent pay cut, and as the Premier announced last week, we're cutting the budget for the government caucus by 25 percent in an effort to show that we're leading by example. Total spending in ministries, except for health and education, is being reduced by an average of 25 percent. That's a total of $1.9 billion over three years.

We haven't cut across the board. Instead, we did a core services review. For seven months members of the government caucus closely examined what government does, why we do it, how we do it and whether we need to do it at all. Each ministry looked for innovative, creative ways to deliver public services more effectively and efficiently. The process was careful, closely considered — and not just by Treasury Board. For the first time in the history of British Columbia it brought to the table MLAs representing every single community in British Columbia, big and small, rural and urban, from right across the province.

The final result is a set of comprehensive service plans which I'll be tabling in full today. Those plans set out exactly what we intend to do, how much it's going to cost and the results that we expect not just in the coming year but for each of the next three years. These will be rolling plans, updated every year to provide British Columbians with true accountability — accountability as government and accountability as individual ministers.

Starting April 1 the government is automatically withholding 20 percent of cabinet ministers' ministerial salaries. Ministers will be able to earn half that back by meeting their ministry spending targets. The other 10 percent will be paid out only if we meet or beat our bottom-line target as a government. Each of us is personally committed to making this work. It's becoming known amongst my colleagues as the spousal accountability act, because I don't think anybody wants to be the first to have to go home and explain their pay cut.

I'm proud of the work ministers and government staff have been doing to bring ministries in on budget for the year just ending. Eight months ago, when we took office from the previous government, we were facing over $500 million in spending pressures within ministries. These were areas where we were likely to go over budget, but we managed them down to the point where almost every single ministry is on or under budget for the year just ending. I'm confident we'll continue to meet our spending targets in the years ahead. That's half the battle in overcoming the deficit.

The other essential step is, of course, to revitalize our economy. For years now British Columbia has lagged behind the rest of the country in economic growth. Let's be clear: economic growth isn't some figure on a paper; economic growth is what gives people jobs. It's what creates opportunities for people. It's what makes young people want to stay here or come here to British Columbia to build their lives. We have a plan to revitalize the economy, to get that positive growth happening again, to make this a province where everyone has choices and opportunities.

We started putting our plan into action on day one, with tax cuts that put more money back into British Columbians' pockets. Even the skeptics will agree that over time, tax cuts stimulate investment and strengthen economic growth. That's why they are such an important key element of our three-year plan.

After cutting personal income taxes, we lowered taxes on businesses to make British Columbia a competitive place to invest again. We removed the job-killing taxes on investment to send a message around the world that British Columbia is open for business. We started cutting red tape and eliminating subsidies to let the market work and to give businesses the certainty and the flexibility they need to create jobs and increase wealth.

Today I'm announcing an additional tax change that's going to help foster growth in British Columbia's small business sector. Small business is the store on the corner, the restaurant down the road or the office up on Main Street. It's the lifeblood of our communities. Small businesses drive our economy. When small businesses succeed, British Columbia succeeds. Therefore, as part of our plan to revitalize the economy, we're introducing a tax change to encourage small business growth and to bring us in line with the rest of the western provinces. Effective April 1, we're increasing the threshold for small businesses' income tax rate to $300,000 from $200,000. Those small businesses are the

province's biggest employers, and this change will save them money that they can reinvest in new jobs and new growth.

We'll continue to review the tax system regularly to make sure our province stays competitive with the rest of the country. We will also take important steps to make sure the province gets the most from our traditional resources as well as our emerging industries. For example, we'll be revitalizing the forest industry. We'll move towards a market-based stumpage system, introduce tenure reform to help the sector compete, provide greater certainty with the working forest base, and streamline and improve the Forest Practices Code.

We'll also accelerate the development of the energy sector, one of the emerging stars of our economy. We're putting in place a new royalty and regulatory structure to encourage the development of coalbed methane extraction, infrastructure projects to improve access to land, and a single-window process to speed up and streamline the energy permitting process, furthering the industry's potential to generate billions of dollars a year in new private sector investment.

The high-tech sector is also poised for further growth as high as 10 percent a year, and the government will continue to work with the Premier's Technology Council to make British Columbia one of the world's leading high-tech centres.

We will also continue to maintain the competitive tax environment that has played a significant role in the growth and development of B.C.'s film and television sector. We will consider measures in the next several months to encourage further growth in the area of new media.

In addition, we're changing the way we develop public infrastructure, opening up new opportunities for the private sector and opening up government to creative new ideas for providing public services at a cost they can afford.

We're committed to working with the tourism sector to double its contribution to the economy. Government will help with a series of initiatives, including a move to more flexible work arrangements and streamlined decision-making for access to Crown land.

We'll also realize an economic benefit from marketing our attributes to people around the world through the promotion of our 2010 Olympic bid and a new marketing strategy to raise the province's profile and celebrate the many strengths this province has. We intend to let people know that British Columbia is a desirable destination, a great place to visit and a source of world-class products and ideas.

These are long-term investments, but we know they will pay real dividends. British Columbia should be encouraged by the positive economic news that's already out there. Lower taxes and record-low interest rates are generating consumer confidence, and we are seeing good results for retail sales, housing sales and housing starts. We're also seeing early signs that tourism is strengthening, and even though prices are low, our energy output is strong and growing, especially in the northeastern part of the province. On top of that, last month British Columbia created 27,000 new jobs — one-third of all new jobs in Canada.

Overall, experts agree that British Columbia's economy will bounce back by 2003, along with the broader global economy. We are extremely well positioned to take advantage of that turnaround. We have a competitive tax structure for the first time in decades. We're building a positive business environment. We're also taking steps to get more value from our resources. All of these steps will help to revitalize our economy and to support the quality services that British Columbians count on.

Mr. Speaker, for us there is no greater priority than saving and renewing our health care system. It stands alone in terms of public services. It's not just a government program. It's our health and our families' health, one of the main reasons why B.C. and Canada consistently rank as world leaders in quality of life. I know that every member of this government is passionate about the government's vision for health care. We see a system that delivers high-quality services that meet patients' needs where they live and when they need them. We are absolutely committed to putting patients at the top of the agenda.

That means we have to face reality. Here are some facts about health care. In this province the costs for health care have more than tripled from $3 billion in 1985. When medicare was started 40 years ago, the federal government covered 50 percent of the funding. Today the federal government contributes just 14 cents of every health care dollar.

In 2001-02 our health care budget increased by 13 percent. This was before we fully addressed the costs associated with paying the settlements for nurses and other health care workers. We had intended to hold the line on health care spending, but wage pressures as a result of processes started by the previous government made that frankly impossible.

Increased compensation costs for recruiting and retaining high-demand doctors, nurses and other health care professionals have forced us to increase health care spending this year by almost $700 million. The extra cost includes funding the 21 percent increase in nurses' salaries and, potentially, the first part of the arbitration award that increases doctors' fees by almost $400 million. It also addresses the higher wages awarded this year to paramedicals.

Some have tried to create the myth that health care budgets are being cut. You heard that in this House just a little while ago from the members of the opposition. Nothing could be further from the truth. This year alone the budget for the Ministry of Health Services will increase from $9.5 billion to $10.2 billion. That's a 7.3 percent increase at a time when our economy is growing by less than 1 percent.

No one should confuse the changes we're making, changes designed to get more out of every health dollar and to increase the quality of patient care, for funding cuts. The truth is that the health care budget is increasing, and costs are rising. These are costs that we

can't avoid. Health care is not free. It's the most expensive public service that any province delivers, and the money to pay for it has to come from somewhere.

That's why we made the difficult decision to increase MSP premiums, as I announced at open cabinet two weeks ago. MSP premiums will increase by 50 percent on May 1, but we're protecting lower-income British Columbians from the increase. In fact, 230,000 individuals will actually see their MSP premiums go down under the new system, not up.

As well, I'm announcing today another difficult decision. To provide for a possible doctors' pay increase, I am raising the provincial sales tax rate to 7.5 percent from 7 percent, effective midnight tonight. To protect lower-income earners, as we did with the MSP premium increase, we are raising the refundable B.C. sales tax credit from $50 to $75 a year. The sales tax increase will raise about $250 million this year. This will go directly to pay higher health care wages.

So will the revenue from an increased tobacco tax, which I'm also announcing today. Effective midnight tonight, the tax on cigarettes will increase by $8 a carton, and the tax on fine-cut tobacco will increase by an equivalent amount. This measure will raise about $150 million. Not coincidentally, it will also help to reduce health care costs in the long run by giving a certain number of smokers — I would say a significant number of smokers — the added incentive they need to quit smoking, which is why we chose this particular area for an increase to fund health care costs.

Raising taxes is pretty much the last thing this government ever wanted to do or ever intended to do. At the same time, we've always said that we would make the tough decisions when we had to, and this was an extremely tough decision. After the arbitrator handed down his ruling a little over a week prior to the budget, I as Minister of Finance had four choices.

1. I could ignore his ruling, his arbitration, and not provide for a possible settlement in the budget, which could end up costing the health care system hundreds of millions of dollars in lost services.

2. I could borrow an additional $400 million and undermine the hard work, the necessary work that government is doing to get our fiscal house in order and shunt those costs on to further deficits, further debt, and onto the shoulders of future generations.

3. We could make deeper spending cuts. We could have gone back and cut every ministry except Health and Education by an additional 5 percent.

British Columbians want a health care system they can count on, with highly trained, highly skilled professionals. Now we can get to work on rebuilding the health care system and getting costs under control. That is why the changes we made in the labour legislation to give us flexibility in how we manage the system are so very essential and couldn't be avoided.

Those changes will mean the government will not have to spend hundreds of millions of dollars. We've streamlined the governance structure we introduced last year. We can also begin to reduce administrative costs, realize some economies of scale and get the maximum value out of every health care dollar.

To further support effective management, we're making sure health authorities get their budgets from us on time. In the year 2000 the health authorities in British Columbia were not given their budgets by the Minister of Finance until three-quarters of the way through the fiscal year. That's a clear example of the kind of mismanagement that British Columbians simply will not stand for anymore.

We are committed to good government, and when it comes to health care, that includes more than just funding the system that supports people when they're sick or injured. It also includes protecting public health. That's why we've raised the budget for the program that monitors and protects the quality of drinking water all across British Columbia. This program was cut dramatically by the previous government in 1996. In the coming year we will invest a total of $3 million to increase water monitoring, protecting British Columbians' drinking water.

We think British Columbians should have confidence that the water in their taps is safe. If it's not safe, we're committed to making sure they know about it as soon as possible so that they can take the appropriate precautions. This is a fundamental part of protecting public health, and it's a good example of the targeted investments we're making in important public services.

More efficient management and a continued commitment to recruiting and retaining the highly skilled professionals that make our health system work — that's a formula for a better, stronger health care sector, a sector that always puts patients first.

Today we are also delivering on our promise to put students first in our education system. Student achievement is what education is all about. The system we talk about — the bricks and mortar, the books, the teachers, the school boards and the administrators — is all there for a single reason and one reason alone. That's to help children learn, because learning gives them choices. It gives them opportunities and self-determination. It opens up a whole new world of possibilities, and that's the future we see for young people in British Columbia.

As for the system, we see it as our promise to children, a promise that will give them nothing less than the tools they need to fulfil their dreams. That's why we're so committed to standing by our promise to build a top-notch education system and our promise not to cut education funding. I'm confirming today that the budget for the Ministry of Education for 2002-03 is $4.86 billion.

Today we're delivering on another key promise as well. Effective July 1, government will refund the amount of B.C. sales tax on school supplies purchased with money raised by parent advisory councils. That's a commitment we made during the election campaign and in the New Era document, and I'm pleased to say today that we're living up to that commitment.

For the Ministry of Advanced Education, the budget this year will be $1.9 billion. As the government announced last week, we're lifting the tuition freeze to give colleges and universities access to the resources they need to meet increasing demands and to deliver a top-quality education to the students of British Columbia.

Government is contributing more to higher education as well. Starting this year, we will establish our $45 million leading-edge endowment fund which will, in partnership with the private sector, create 20 permanent research chairs at British Columbia's universities. These chairs in the fields of medical, social, environmental and technological research will help attract the faculty that British Columbia needs to compete and lead in the knowledge-based economy.

As the government outlined in last week's throne speech, we will also be making a substantial investment in a joint project with the universities of British Columbia, Victoria and northern British Columbia to increase the number of medical school graduates. These funding commitments support quality education and underline our commitment to putting students first. So do the other changes we're making in the system.

We're providing more choice and flexibility for students of all ages in all parts of the system. We're putting decisions about K-to-12 education back into local hands so the people who are closest to students — parents, teachers, principals and school trustees — can make decisions based on children's needs instead of on arbitrary policies or archaic and restrictive contract language.

All across the system we're focusing on setting goals and achieving measurable results for education. We're holding school boards, colleges and universities accountable for improving student achievement, and we as a government will also be accountable. We've set clear targets for what we plan to achieve.

For example, we're going to double the number of graduates in computer science, electrical engineering and computer engineering in the next five years to support the growth of the new high-tech sector. As well, we'll be increasing the number of student spaces for nurses and residential care aides by more than 1,400 in the next three years. In the K-to-12 system we're committed to increasing high school graduation rates consistent with the specific goals that schools and school boards are setting provincewide. This one change alone is going to have a tremendous effect on the future of this province. It's just one small example of government's plan for positive change.

Mr. Speaker, let me give the House some idea of how much impact that one small change can have. Today in British Columbia 80 percent of the people on social assistance did not graduate from high school; 90 percent of the people in correctional institutions did not graduate from high school. Imagine what will happen in B.C. if we are able to get our graduation rates up from the current 75 percent to 80 percent or 90 percent or, perhaps sometime, even 100 percent. We will all see a different society. We'll see a different economy. We'll have more people working and fulfilling their personal dreams for themselves and their families. Children and their parents will be healthier, and communities will be stronger.

It won't happen overnight, though. Change takes time, but this is a good example, and let me repeat: it's only one small example of how we're making positive change in this great province. It demonstrates that the vision we have for a proud and prosperous future in British Columbia can be achieved, and it will be achieved. The province will be well on its way three years from now when the budget is balanced, the deficit gone, and government spending becomes affordable, efficient and sustainable.

We use that word "sustainable" a lot, and what it really means is that we have a solid footing — a sound, stable, reliable foundation to support public services not just today but for years and for generations to come.

Unfortunately, the previous government didn't seem to grasp that. In fact, one of their members used to tell a story about it during his time as the Minister of Health. He had some personal experience with the subject, because years ago he built a house and somehow forgot to lay the foundation first. I mention it now only because it's an apt analogy for how the previous government ran the entire province. It was always in a hurry to build, to spend more, to make its programs bigger and its services broader, but it never did the hard work needed to ensure that there was a solid, sustainable economic footing for all of the spending they piled on top of it.

We're fixing that. It's hard work; it's challenging work. Just like a major household renovation, it will create some discomfort along the way. Some people will be upset. Some people will be angry. Some people will say the government is making the wrong decisions, but the work we are doing can no longer be avoided. It has to be done, because this province can only truly prosper with a solid economic and fiscal foundation.

Every budget a government brings in is based on choices and priorities. We've been very clear about where our priorities lie. We're committed to restoring sound fiscal management, revitalizing the economy, and putting patients and students first. We have a sound, achievable plan to meet these goals. The province faces huge challenges, and we need to face up to them head-on. Reckless spending and high taxes turned us into a have-not province. History has proven that that approach was wrong. History will prove that our approach is right.

This approach has already worked in every other province in Canada, regardless of the political stripe of the party in power, even in places with far fewer resources to work with. They've balanced their budget. They've lowered their taxes. They got their regulatory system in line and created a business climate where people could come and invest and create jobs and opportunities for their citizens. As they did, their economies grew. They were able to serve their citizens, and they found they had some money left over at the end of the day to start to pay down their debts.

They discovered, and British Columbia will discover, too, that we have great advantages: an educated workforce, natural resources that are second to none, a strategic location and excellent access to markets, a competitive tax environment and quickly improving business climate. Word is getting out: British Columbia is back.

Investors know that we're going through a tough time right now, but they also know that we have a plan. Everyone the Premier and I talked to at the World Economic Forum earlier this month said they understood. They were very encouraged by what we were doing. They know and we know that the year ahead will be challenging. After that, British Columbia will turn the corner as long as we stick to the plan.

We will emerge from this difficult time better able to compete. We will once again have opportunities. We will once again begin to control our own destiny. We'll leave behind the indignity and the stigma of have-not status and build a new future, a future that delivers on the vision I've described today.

This will be a province where every young person has the choices and the opportunities they need to build a successful life for them and their families; where patients have access to the health care they need; where vital public services are supportive and sustainable; where we get the maximum benefit from our natural resources; where businesses are thriving, creating new jobs and giving new hope to all of our communities; where British Columbians have confidence and pride in a province that is the best place to live, to work, to do business and to raise our families.

Mr. Speaker, our vision for this province is clear. This budget will set the course to make it a reality. This budget is about good government. It's about sound fiscal management. It's about building a strong, prosperous economy. It's about hope. It's about opportunity. After ten years of decline, it's about time. Let's get to work.

J. MacPhail: Mr. Speaker, today the Liberal government has brought down its first full budget. Today the Premier has broken his most important election promise that he made to British Columbians. Despite his solemn commitment not to raise taxes, he has done exactly that today. He has raised taxes.

He picked the tax that hurts low- and middle-income British Columbians the most. He picked the sales tax to increase.

The Premier will tell every British Columbian who will listen that this tax had to be increased because it's about paying for wages. But make no mistake: this broken promise is not about wages. It's about a Premier who painted himself into a corner on his very first day in office by giving away billions — billions — in high-income and corporate tax cuts. At that time he confidently predicted that tax cuts would pay for themselves. He said over and over again: "Don't worry. We know. Tax cuts pay for themselves." But as the weeks and months have gone by since that day, the truth of the matter has become clear: high-income and high corporate tax cuts do not pay for themselves. Service cuts, deficits — the largest deficit in B.C. history — and now we know. Sales tax increases — that's what pays for high-income and corporate tax cuts.

The story that's emerged over the last eight months is one that has been repeated over and over again wherever the right-wing, supply-side experiment has been tried. After all the fanfare has died down from the tax giveaways, the government ends up having to find a way to pay for those tax giveaways. Without fail — and this government follows in those footsteps — right-wing governments like this look to low- and middle-income people to pay the price. And they do so in a host of small ways that, taken together, make it so much harder for families to make ends meet.

If you want to take your family camping, bring extra money for firewood. If you have a prescription that you need to have filled, the dispensing fees have gone up. If you're a ferry-dependent community, you'll be paying more. If you want to have your kid go to college, if you want to give your kid an opportunity to get a college or university education, be prepared to pay thousands more in tuition costs. And if you simply want some help from government, today we learned: be prepared to sit on hold for an hour, and be prepared to rack up those phone charges. And today we have another announcement: if you need to buy so much as a pair of shoes for your teenager, you're going to be paying more.

All this is because we have a Premier who made a promise that he knew he couldn't keep. He couldn't give the biggest tax breaks in history to high-income earners and protect the service that everybody else counts on, despite being asked over and over again about whether he could do both. He knew he couldn't do both.

Someone once said that by paying taxes, we buy a little bit of civilization. I agree with that sentiment. But for it to hold true, it means that everybody should pay their fair share so that we all have a collective stake in the service that governments provide. What this government has done is say that some people should pay a lot more than others and that what you should pay should not be in proportion to what you make. Those that make less will pay more, and those that make more will benefit the greatest.

Today's sales tax increase hits low- and middle-income earners the hardest. So do the increases in Pharmacare costs, the tuition increases, the cuts to services and every other cut and fee increase this Premier has brought in. The Premier bought into an idea. Some would say he was sold a bill of goods. He said that high-income and corporate tax cuts would be a cure-all for everything that ailed this province. He said they could be done without any pain. Well, today's budget is a dramatic statement of just how wrong he was.

Over the coming days, as we go through every single one of these initiatives that were tabled today by the Premier, we will see, day after day, how great the pain grows for low- and middle-income British Columbians.

With that, Mr. Speaker — I will have more to say — I move that debate is adjourned.

Hon. G. Collins presented a message from Her Honour the Lieutenant-Governor: bills intituled Budget Measures Implementation Act, 2002; Taxation Statutes Amendment Act, 2002; Corporation Capital Tax Amendment Act, 2002.

Hon. G. Collins: I move that the bills be introduced and read a first time now.

Hon. G. Collins: These bills will provide legislative authority for many of the initiatives announced today in Budget 2002. The amendments are consistent with the government's priorities of revitalizing the economy, restoring sound fiscal management and putting patients and students first.

Bill 2, the Budget Measures Implementation Act, 2002, amends two provincial statutes and repeals several. The Emergency Program Act is amended to improve the controls on the statutory spending appropriation. Consistent with the new capital management framework, the Financial Administration Act is amended to transfer authority to make prepaid capital advances from the Minister of Finance to the ministers who are accountable for the capital projects.

As part of the move to eliminate business subsidies, Bill 2 also repeals the following legislation, effective March 31, 2002: the Fisheries Renewal Act, the Forest Renewal Act, the Grazing Enhancement Special Account Act, the Industrial Development Incentive Act, the Natural Resource Community Fund Act, the Science and Technology Fund Act and the Small Business Development Act.

Bill 3, the Taxation Statutes Amendment Act, 2002, amends several statutes to meet the government's tax and revenue objectives. As part of the continuing process of improving British Columbia's tax competitiveness, the threshold for the small business income tax rate will be raised to $300,000, and the sales tax exemption for parts used on exempt production machinery and equipment will be expanded.

To meet a new-era commitment, tax refunds will be available for school purchases made with funds raised by parent advisory committees. Several tax measures will streamline or improve the fairness of the tax system, including allowing pickup trucks and service vehicles to qualify for the multi-jurisdictional vehicle tax; introducing an exemption from the provincial sales tax for boats and travel trailers brought to the province for personal use by non-resident individuals; allowing chemicals to make ammonium bisulphate, for more environmentally sound pulp production, to be purchased exempt from provincial sales tax; and increasing the disability-related tax credits delivered through the personal income tax system.

To fund compensation increases necessary to attract and retain skilled health care workers and professionals, Bill 3 includes two measures to raise additional revenue. Effective February 20, 2002, the provincial sales tax rate will be raised to 7.5 percent, and tobacco taxes will be increased by $8 per carton. The refundable provincial sales tax credit will be increased by $25 to $75 per adult to protect those with lower incomes from the impacts of this sales tax increase.

Bill 4, the Corporation Capital Tax Amendment Act, 2002, streamlines the legislation to reflect the phase-out of capital tax on non-financial corporations by September 2002. In addition, to improve consistency, effective September 1, 2002, the bill expands the investment allowance currently available to credit unions to include all financial corporations.

Finally, the formula for calculating the paid-up capital of authorized foreign banks is amended to ensure that it's consistent with the taxation of domestic banks.

Bills 2 through 4 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. G. Collins: I ask leave to table, on behalf of the various ministers responsible, government's overall strategic plan and the 2002-03 to 2004-05 service plans required under the Budget Transparency and Accountability Act.

Hon. G. Collins: Mr. Speaker, I have two lists, which I'll give to the Clerk. The first package contains service plans for the office of the Premier, 20 ministries and five related organizations. The second package contains service plans for 31 Crown corporations and other government organizations. This package also includes a list of organizations which have been exempt from section 13 service plans of the BTAA and for which the service plans are not being filed. These organizations have been exempt primarily because they are either inactive or will be wound up or their functions are being transferred to another organization or ministry.