Hansard — Tuesday, March 4, 2008 a.m.

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


Petitions		10171
	Hon. M. Coell

Introduction and First Reading of Bills		10171
	Forests and Range Statutes Amendment Act, 2008 (Bill 8)
	Hon. R. Coleman

Second Reading of Bills		10171
	Budget Measures Implementation Act, 2008 (Bill 2)
	Hon. C. Taylor
	B. Ralston
	J. Horgan
	M. Karagianis
	C. Trevena
	G. Robertson

Hon. M. Coell: I have a petition from a number of people from Saltspring Island who have concerns of ferry fares and wish a moratorium be placed on ferry increases. I wish to table it.

Hon. R. Coleman presented a message from His Honour the Lieutenant-Governor: a bill intituled Forests and Range Statutes Amendment Act, 2008.

Hon. R. Coleman: I move that Bill 8 be introduced and read for a first time now.

Hon. R. Coleman: Today I am introducing Bill 8, which proposes amendments to three statutes: the Wildfire Act, the Forest Act and the Forest and Range Practices Act. This government is committed to responding to the needs of our communities, first nations and the forest sector.

This bill responds to the needs of rural communities who have asked for greater clarity around the rules of reporting and responding to wildfires in their local areas.

As well, first nation communities expressed a desire to access timber for domestic use, and this concept has been upheld by the Supreme Court of Canada. This bill will assist first nations in accessing public timber through new permitting processes.

This bill also responds to the needs of the forest sector in a number of operational and administrative areas. For example, it proposes amendments to streamline timber-marking requirements on the coast of British Columbia as per the coast forest action plan.

I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 8, Forests and Range Statutes Amendment Act, 2008, 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. M. de Jong: I call second reading of Bill 2, the Budget Measures Implementation Act, 2008.

Hon. C. Taylor: I move that Bill 2, the Budget Measures Implementation Act, 2008, be read a second time.

Bill 2 amends 18 provincial statutes to implement many of the tax measures announced in Budget 2008. It also includes legislative amendments to support the 2008-09 estimates.

The major income tax reductions in Bill 2 are designed to return to taxpayers all of the revenue raised from the proposed revenue-neutral carbon tax that will be introduced later this session for the Legislature's consideration.

First, provincial personal income taxes will be cut by 2 percent in 2008, rising to 5 percent in 2009 on the first $70,000 in income. Further reductions are planned in future years, as revenue from the carbon tax increases. Over three years these personal income tax reductions will put $784 million back into the pockets of British Columbians. By 2009 British Columbians earning up to $111,000 will pay the lowest personal income taxes in all of Canada.

The second pillar of revenue neutrality in Bill 2 is income tax cuts for both large and small business. Effective July 1, 2008, Bill 2 reduces the general corporate income tax rate from 12 percent to 11 percent. Over the next three years we plan to reduce it to 10 percent, on par with the lowest corporate tax rate in the country.

In recognition of the importance of the small business sector to the provincial economy, effective July 1, 2008, the small business corporate income tax rate is cut to 3.5 percent from 4.5 percent. Again, it's our intention to cut it further, to 2.5 percent, by 2011.

The final pillar of revenue neutrality in Bill 2 is a measure to ensure that lower-income families can afford the move to a lower-carbon economy. The new, ongoing, income-tested climate action tax credit will provide an annual payment of $100 per adult, $30 per child, rising to $105 per adult in 2009. Individuals earning $30,000 or less and families earning $35,000 or less will receive the full credit.

Approximately two-thirds of the proposed carbon tax revenues will be paid by business, but we are returning, through these income tax cuts and the low-income climate action tax credit, almost two-thirds of that revenue to individuals and families. In total, over

three years we will cut personal and corporate income taxes by more than $1.8 billion, the same amount expected to be raised from the proposed carbon tax.

Bill 2 also provides a one-time climate action dividend of $100 to be paid to every man, woman and child resident in the province on December 31, 2007. The dividend payment, which is funded from the 2007-08 surplus, will be paid in June, before the carbon tax takes effect, and it will help all British Columbians begin their adjustment to a greener lifestyle. Although most British Columbians file annual income tax returns and will receive the dividend automatically, outreach programs will be established to help ensure that all eligible British Columbians receive their dividend.

Bill 2 provides a number of new tax incentives as well, totalling $64 million over three years, to complement the many incentives already in place to help British Columbians reduce their greenhouse gas emissions. These include a point-of-sale tax reduction on the purchase of eligible conventional fuel-efficient motor vehicles that, together with the federal ecoAuto program, reduce the cost of a new fuel-efficient vehicle by up to $4,000; an exemption from the passenger vehicle rental tax for leases of eight hours or less; and exemptions for ecologically friendly products such as adult tricycles and appliances.

Responding to our responsibility to future generations by tackling climate change must not be undertaken at the expense of the economy, competitiveness or jobs for British Columbia. So to ensure a strong and growing economy, Bill 2 extends the production services tax credit and Film Incentive B.C. tax credit for five years. It increases the basic Film Incentive B.C. tax credit rate to 35 percent from 30 percent and the basic production services tax credit rate to 25 percent from 18 percent for two years. It also introduces a higher regional credit for production activity in distant locations beyond the lower mainland and capital regional district.

As previously announced, the Ports Property Tax Act is amended to extend the ports competitiveness initiative for ten years and, starting in 2009, to increase the compensation available to municipalities. To build on British Columbia's attractiveness as an international financial centre and as a home for head offices, the International Financial Activity Act is amended to clarify and expand the range of eligible activities.

The existing Corporation Capital Tax Act has hindered financial institution investment and growth in B.C. The financial services sector provides high-paying, high-skilled jobs, and there are opportunities for this sector to grow with our newly forged links to Asia. The capital tax will be phased out over three years and replaced with a minimum tax to ensure that large financial institutions continue to face a base level of taxation in this province.

Bill 2 also includes changes to enhance the fairness of the tax system. Under the Property Transfer Tax Act, the first-time-homebuyers threshold is increased to $425,000 from $375,000, and first-time buyers are no longer required to have registered financing of 70 percent in order to be eligible for the exemption. This will help many young British Columbians achieve their dream of home ownership.

The Income Tax Act is amended to reduce the dividend tax credit rates in response to the corporate income tax cuts to ensure that the treatment of income taken in the form of either salary or dividends continues to be comparable.

In addition, several initiatives in Bill 2 will improve the fairness of the Social Service Tax Act, including allowing registered charities and hospital auxiliaries to claim refunds of PST paid on medical equipment purchased with bingo affiliation grants and, consistent with current practice, expanding the trade-in allowance to allow trade-ins on the purchase of motor vehicles from other Canadian jurisdictions for use in B.C. A variety of other minor amendments are made to various statutes to enhance clarity and administration.

Finally, Bill 2 implements a number of recommendations from the Ministry of Small Business and Revenue's final phase of the PST review. These changes, like those implemented last year, will benefit businesses across the province by improving provincial sales tax administration and will reaffirm our commitment to an efficient and effective tax and regulatory system. I'd like to thank the Minister of Small Business and Revenue and his officials for all of their hard work on this project.

In addition to these tax measures, Bill 2 amends the Special Accounts Appropriation and Control Act to create two new special accounts: the B.C. arts and culture endowment special account and the park enhancement fund special account. Contained within the B.C. arts and culture endowment special account is a new $150 million BC150 cultural fund. This fund honours our 150th birthday as a province. The B.C. Arts Council will advise government on how the interest on this fund can best be used to support arts and cultural initiatives in every community, from our smallest communities to our largest.

In addition, Bill 2 establishes the park enhancement fund as a new special account. This bill also grants the Minister of Environment new flexibilities in setting fees, and it expands existing merchandising authorities. Revenue, including that from merchandise and donations, will flow into the special account and will be used to fund activities such as interpretative programs, new or improved park facilities as well as research and restoration activities within protected areas.

In addition, the Budget Measures Implementation Act, 2008, amends the Financial Administration Act so that the current policy of paying per diems to MLAs can be extended to parliamentary secretaries and MLAs who are members of boards, councils or commissions performing government business.

Finally, this act provides for amendments to other acts, including amending the Hydro and Power Authority Act to remove the B.C. Hydro debt cap; expanding the regulatory power in the Transportation Act to provide support for matching revenues with the associated road maintenance costs; and eliminating the South Moresby

In summary, Bill 2 includes many amendments that will implement many of the measures in Budget 2008. In particular, it gives back to taxpayers all of the tax that will be collected under the proposed carbon tax while maintaining and enhancing the competitiveness and fairness of our provincial tax system.

B. Ralston: This bill provides the legislative support to implement the measures set out in the budget. I do have a number of general comments about specific sections of the bill. Before that, I'd like to begin with some introductory remarks in the sense that this bill and the budget that it seeks to implement — and I'm speaking of the budget — is striking for what problems in British Columbia it does not address.

Everyone acknowledges a serious crisis in forestry, and the budget is completely silent on any measures to deal with the crisis in forestry — 10,000 jobs lost in the last year. In the Speech from the Throne the only proposal is a round table and a commitment to some vaguely defined action. That's it. So this budget is completely absent on any measures for one of the major economic crises in this province, completely devoid of any action.

Other jurisdictions in the country have taken very determined action to set out poverty reduction plans, and this is not a particularly partisan issue. The Premier of Newfoundland, who is a Tory; the Premier of Quebec, Jean Charest, who is now a Liberal; and the Premier of Ontario, Mr. McGuinty, who is a Liberal, have all in recent years set out very specific goals in terms of poverty reduction. The Premier of Newfoundland has taken a personal charge of that file on behalf of his government. This budget does not address any of those targets.

I think the changing pressures that globalization and the pressures in the world economy bring to individual citizens are acknowledged by many. I was recently reading a comment by David Frum, who is a Canadian but who spends most of his time in the United States and advises the Republican Party, the party of President Bush. He said recently in an interview in Maclean's magazine that "the fact that the families of the wealthiest…of Americans are becoming more stable while families in the bottom third are becoming more unstable is as important as globalization or trade or technology."

What this budget fails to address, I would suggest, is that growing instability for a large part of the population. People at the top of the income ladder are understandably doing well, but many others are not. That growing instability is not addressed in this budget at all, where other jurisdictions have sought to do that.

This budget doesn't address in any substantive way the issue of public safety. One of the reasons that people like living here, are attracted to live here and will continue to live here and to come here in the future is because of the social climate that we have. One of those very essential ingredients of a social climate is public safety — the belief that you can walk in the streets of our cities without running the risk of being shot dead. That, regrettably, is a crisis that faces us in many of the cities of the lower mainland. This budget does not address that. There are very few measures to address that whatsoever.

Public transportation — allied to some of the themes that are set out in the throne speech and the budget. A very ambitious plan — I stress plan — was trumpeted which relied upon substantive federal dollars to be contributed in the recent federal budget, probably because of shifting economic circumstances and the shifting circumstances under which the federal budget is put together.

Much of the ambitious goal of federal financing in that budget was…. Some was there, but far less than was expected. With those preliminary comments, I would then turn to the measures that are set out in the budget.

The Arts Council Act and the fund that it seeks to create are products of a very determined citizens lobby that lobbied the Finance Committee — and, I'm sure, individual members of the Legislature, but particularly the Finance Committee. In the last two years that I've been part of the committee, representatives of arts groups throughout the province came forward to the committee and expressed the belief and, I think, the reality that culture forms an important part of social life in all the communities of British Columbia and that it was deserving of more financial support from the government.

This setting up of the fund, though, relies on recommendations from the Arts Council, but the recommendations are only that. They are not binding, and the minister is left to make the decision on the awards and, presumably, to make the announcements. What the relationship will be, in terms of the relationship of Arts Council recommendations to actual implementation by the minister, will be seen, and I'll be probing that a bit more in the clause-by-clause reading of the bill later.

The British Columbia Railway Act is amended to permit the Lieutenant-Governor-in-Council to give grants in lieu of the school tax. There are some changes proposed in the provincial school tax to municipalities, so I'm not certain. I expect that in the more detailed debate we will press for the position of the government in terms of a commitment on making those grants. I'm assuming from the tone of the legislation that those grants will be made in lieu of taxes. It confers the discretion on the cabinet, but it's not clear at this stage whether that, in fact, will be the case since it is only by discretion.

The corporation capital tax is something that I'd like to devote some time to. The minister's rationale for removing this tax has fluctuated somewhat. Some news reports have stated that it's to give Asian banks a better position in British Columbia, whereas in other interviews…. One, in the Indo-Canadian Voice newspaper, says: "What has happened as a result is that big banks don't want to come and expand in B.C. They don't want to have more offices in B.C. because they get taxed on it. So they pull out everything they can into Ontario."

Like other members, I met with the representatives of the Canadian Bankers Association. At a time when the banks are expanding in British Columbia — they're

opening new branches; their loans portfolios are expanding; and their profits, up until perhaps the last quarter in the case of CIBC, were expanding — the suggestion is that investment decisions were being altered and, in the words of the minister, "all pulled back to Ontario."

I asked for any studies, any justification that the lobbying association on behalf of the banks could provide or suggest to support the assertion that these investments were not being made. All evidence that I could discern and glean from a review of any literature in the public domain was that it was not having that effect on bank expansion in British Columbia. That's domestic banks. None was forthcoming, despite my request. I would be interested in hearing from the minister at the committee stage: who made those representations and what studies or modelling were done to justify the removal of this particular tax?

The other suggestion is made that Asian banks might be more inclined to establish themselves in Canada, and particularly in British Columbia, if this tax were to be removed. Again, I've not been made…. No one has approached me with that view directly. It's a view that seems to be reported in the news media. I would be interested in seeing what modelling or justification the ministry, with all its resources, and the Treasury Board in particular could offer to support that.

What is clear is that there is a so-called International Financial Centre in British Columbia. It was set up in the 1980s. Mel Couvelier was the Minister of Finance. It was established in response to some federal legislation that gave provinces the opportunity to exempt certain business activity from the application of provincial tax providing that the business activity was oriented outside the country.

That international centre — I met with the CEO, I believe, last year — was set up, and he gave me some examples of how it functions. For example, he gave an example of a company — I think it was a European company — with its headquarters in the United States that had its treasury operation in New Jersey and was attracted to move its eight-person treasury operation for the company from New Jersey to British Columbia and, given that their business activity was oriented outside the country, would not be obliged to pay any provincial income tax.

That International Financial Centre has been in existence since the 1980s. At one point this tax, the capital corporation tax, also applied to non-financial institutions. That was removed. There doesn't seem to have been any…. If the justification for removing the tax was that Asian financial institutions or banks would locate in this International Financial Centre because the tax was removed, there doesn't appear to have been a surge in establishment or activity by non-financial players when the corporation capital tax, as it applied to non-financial players, was removed. Again, I'd be interested in any studies that the ministry has or any justification, beyond the rhetorical and ideological, to justify this particular decision.

The International Financial Centre has among its members a number of domestic banks, some foreign banks as well, I believe — I've got the list here from their website — and certainly a number of Canadian banks. The Hong Kong and Shanghai bank of Canada is here, and it has a number of its subsidiaries as members of the International Financial Centre, as do a number of the domestic banks and some of the British Columbia credit unions as well. In addition, there are some brokerage firms, some financial firms and some securities firms. It is particularly oriented externally and is well established.

If the justification is that that is what's going to take place, then I think it's incumbent upon the minister and the ministry to demonstrate that, rather than to simply expect the public to take that on some kind of faith.

I'd be particularly interested in what lobbying efforts were made by representatives of Asian banks. If that were the case — and I'm unaware of any myself — I'd be interested to hear the more detailed justification for the position that's taken.

The International Financial Centre. There's also a similar international shipping centre. It has enjoyed the same exemption from taxation. It has succeeded in drawing, I think, one major shipping company to set its international headquarters — again, it's externally oriented, outside the country — in Vancouver. I'd be interested in hearing whether there will be any spinoff effects on that.

That is a similar financial arrangement, exempting the company from local taxation in that particular sector. It's well established. The corporate capital tax doesn't apply to it. Although it's had some initial success, it doesn't appear to be growing at any particular velocity.

My query is on the extent of this forgiving of revenue to the government for domestic banks. The justification offered — that it will encourage their competitors, Asian banks, to locate in Vancouver — is a somewhat convoluted argument. I'd be interested, at the committee stage, in hearing the minister justify that somewhat further and in more detail. So I expect that we will have that discussion.

The other area that I wish to address in dealing with it…. There are some minor changes in terms of the definition of a financial institution. Indeed, the reference is to institutions rather than to corporations. I'm not quite sure why that is, but that's a minor detail that we will pursue.

I suppose, ultimately, the other calculation in this tax that's set out is that there will be what's called a minimum tax. But the preliminary calculation of that minimum tax — including the ability to reach back seven years for unused tax credits, and forward three years — and the way that the calculation of the minimum tax is structured…. It seems unlikely to me that any institution will actually be obliged to pay the minimum tax, although there's a method for calculating what might be due. Based on that, it seems unlikely, but I may be in error in that. So I look forward to a more detailed discussion.

Section 3.7 sets out deductions from the minimum tax payable. They may deduct all of their provincial

corporate income tax and any unused corporate income tax credits from the previous seven years and the three coming years. In effect, although the minimum tax is talked about — and I will perhaps, no doubt, see the minister clarify it for me when the time comes — in my view, it seems unlikely that any of these banks will pay the so-called minimum tax at all. If that's the case, one wonders why it was included in the legislation — perhaps a political fig leaf to cover the reality of the tax that's being removed. I'm not sure.

The next area that I'd like to address is the changes to the Financial Administration Act. This is particularly striking. I travelled with the Finance Committee as the vice-Chair. That's a committee composed of members of both sides of the Legislature. It receives input in hearings throughout the province and also receives written input from a number of citizens.

This proposed change to the Financial Administration Act is not one that I recall a single citizen advocating for. Now, that doesn't mean it's in and of itself a bad idea, but it's striking that there's no public pressure for this change. What this change proposes is that MLAs who are already compensated…. We've been through the extensive debate on the increase in compensation, where dramatic increases were given to the Premier and all MLAs. Those of us on this side of the House have offered and are, in fact, returning our pay increase to charities in the community as a consequence of….

B. Ralston: That's a matter of public record. I see some of the typical disdain that one sees on the government benches for any kind of gesture in that direction, but that's the reality on this side of the chamber. My colleagues and I — that's what we're doing.

This change to the Financial Administration Act permits those MLAs who are acting in their official capacities as members of boards, councils, commissions; acting under the directives of ministers; or acting as ministers or parliamentary secretaries…. It gives Treasury Board the power to compensate them for those duties.

Typically, those members who are appointed to those positions will be members on the government side, I would think, almost without exception. I'm hard pressed to think of an example where they would be on the opposition side and appointed to act on behalf of the government. It wouldn't be the way in which things were done.

What this amendment proposes is to take those MLAs whose compensation was recently substantially, by any public measure, enriched — certainly far in excess of the compensation guidelines that guided public sector negotiations — and add to their compensation for performing duties which many might think were simply a part of the duties that they signed on for.

This appears to allow the government, for those it chooses to appoint to various bodies, the opportunity to earn even more income. I'm not surprised that there was no public call for this.

Once the public becomes more aware of this, I'm sure there will be opposition to this. I suppose it's buried deep in this legislation and may not attract much notice, but those members of the public who become aware of this I'm sure will be surprised to learn that in addition to the — by any standards, certainly by ordinary members of the public — handsome compensation that members of the Legislature already earn, especially after their increases, they'll be able to supplement that by doing work that many would have seen as simply part of the duties they were obliged to undertake in any event. That will be something we will want to explore more fully when the time comes.

Now, there are some changes to the Home Owner Grant Act. Those seem to be largely technical changes. I suppose the question of what motivates those changes does arise. Some of these may be driven by changes suggested from within the ministry. I'm not aware of any fraud or any difficulties in the administration of the homeowner act.

It's usually administered by the municipalities. When you go to pay your taxes, you check off and sign a declaration that entitles you to the reduction, and then that statement and position is passed on to the province. I'm unaware of any difficulties, and it's not clear — other than changing the threshold, which I think is straightforward — why these changes in the definition were required. There are a number of fairly detailed changes to the finer points of the eligibility for homeowner grants, which will be pursued further in committee.

The Hotel Room Tax Act reduces the room tax that goes to the province and increases it to Tourism B.C. No doubt, that will be welcomed by Tourism B.C., and I assume that's the motivation for that particular change.

The Hydro and Power Authority Act. There are some changes proposed. I'm not clear from my initial reading of the proposed changes and the very brief rationale that I've heard here this morning just what those changes are intended to accomplish and why they're necessary. So that's certainly something I will want to follow more fully in the detailed debate.

Certainly, the government did sign an order-in-council — No. 28, which provides for the heritage special direction HC2 to the B.C. Utilities Commission — that changed B.C. Hydro's deemed equity from 20 percent to 30 percent. That seems to be what is being talked about here, but I will pursue further at another time the motivation for that and the necessity or not of that proposed change in the legislation.

The Income Tax Act changes are fairly straightforward in their application. That's fairly straightforward. There are some questions that arise about how the climate change dividend will be calculated as it relates particularly to those people eligible at the lower end of the income scale and how it will be treated. Whether it will be treated in a way that exempts it from income that individuals would otherwise receive or not isn't crystal-clear when I read the legislation. The Minister

of Employment and Income Assistance said in a radio program that welfare recipients in B.C. will not see their benefits reduced after getting the $100 carbon dividend cheques.

In response to a researcher for the official opposition, two ministry staff said that the ministry intends to exempt income, both the dividend and the subsequent tax benefit, but apparently, there's some uncertainty as to how that will be accomplished — whether regulations need to be changed by order-in-council or whether there will be an exemption under the current regulations.

That's obviously an administrative detail but is of some significance to those who might receive that cheque who are in that financial position. They will want answers, and I expect that by the time we get to the more detailed stages of this, the minister will be able to answer that question.

There are changes to the film credit regime, and certainly, I'm aware of some anomalies. I'm not sure that the definition of "distant location" is entirely clear. There is an administrative division line that crosses the valley, which seems to drive some productions out to Langley and beyond, because the tax treatment of the production is different beyond that division line — in Langley and Mission, I believe, is where it crosses the valley — as opposed to running and engaging in the same production in Vancouver. So certainly, any tax regime creates those kinds of anomalies, and I'm interested to hear the extent to which this new definition will perhaps alter that or not.

Deputy Speaker: Excuse me, Member. Time has expired. Are you the designated speaker?

The film tax credits, particularly the labour component, were a substantial innovation, and I'm pleased to see that they're continued. I know that some jurisdictions, I've been told, give some preference in tax treatment — and these are not Canadian jurisdictions, I don't believe; I think they're American jurisdictions — to unionized labour as opposed to labour that is not unionized.

Now, I know that's not the case here in British Columbia. I'm wondering if that had been considered in these revisions of the film and television tax credits. The labour component does appear to be enhanced, and I'd be pursuing the rationale for this process.

I'm also pleased to see the tax credit extended by five years for film and television. Again, in an increasingly competitive film production world British Columbia's highly skilled industry, technicians, workers and allied trades seem to be surviving notwithstanding the competition. But it's important that this industry be nurtured, so I'll be exploring that further in debate at another stage of the proceedings.

There are changes to the International Financial Activity Act, and again, I'm not clear on the motivation for these changes. They appear to be definition changes. Some of that is somewhat cryptic, but I would be interested in understanding and receiving some further explanation of why these changes were considered.

There's a definition that refers to active businesses now being defined as qualifying businesses that will be defined in the regulations. The regulations, of course, at this stage are not included, so I would be interested in receiving some indication from the minister how that active business will be defined in the regulations, what the ultimate proposed ambit of that definition is and the purpose for adding it to the international financial activity centre.

As I've said, this centre has been established for some time. There are a number of members who are listed. Again, I'm not sure of the motivation for these changes.

A definition of the securities corporation is removed from section 2, so there seems to be a focus on securities corporations and what business they might be bringing to the international financial activity centre.

I suppose the broad tax concern and the public policy concern would be that while this measure seeks to encourage business that's oriented externally to locate in British Columbia and to locate specifically in Vancouver, I'm not aware, except in perhaps other…. There are some members who are located elsewhere in the lower mainland. It does appear to be a measure that's focused entirely — perhaps understandably, from the perspective of those moving their business here…. It doesn't offer much to those outside of the lower mainland or even outside of Vancouver in terms of an opportunity to get this business.

Perhaps that's understandable, but given the crisis that I've spoken of in the forest industry earlier, the prospect of adding international financial activity that's externally oriented from an office in Vancouver is probably cold comfort to a sawmill worker in Quesnel or Mackenzie. I suppose it may add something to the provincial treasury, but it's relatively unrelated to the crisis that's sweeping much of the province outside the lower mainland and the Okanagan and the lower Island.

The broader tax policy question then becomes: if this measure is being expanded unduly and business that would otherwise legitimately locate in British Columbia and pay provincial corporate income tax…? Would they be given an opportunity to enter into the International Financial Centre and be relieved of the obligation of paying provincial income tax without the consequent benefits to the economy, broadly?

The International Financial Centre. The present act also permits the company locating and qualifying in the centre to designate some of its personnel as International Financial Centre personnel. They are exempted, as I understand it, from paying the provincial portion of income tax.

Not only is the company income, as I understand it, exempt from paying provincial income tax, but the key personnel, if they have to apply and be given the exemption, are exempt from provincial income tax. So there's….

S. Fraser: I'm here to give my learned colleague from Surrey-Whalley, to the right of me, a break. I have an introduction to make. There are a number of students — I think over 40 — here from ADSS. That's Alberni District Secondary School. The teacher Nick Seredick is also here with four adults to view the proceedings today. Would you all join me in making them feel very, very welcome.

B. Ralston: So that would be the broader concern. I know the government, in the last budget, also gave the opportunity to biotech companies to receive patent income through a subsidiary located in the International Financial Centre, which again would exempt it from provincial income tax.

These kinds of tax-free zones ebb and flow in fashion. Certainly, tax-free processing zones are placed in many locations throughout the world. In Mexico the maquiladora zones are a different form of tax exemption for processing.

I suppose the policy question is whether these are effective. Thus far, beyond rhetorical flourishes, there's been little substantive justification for these measures. Ordinarily, as I understand it, for tax changes, the capacity of the ministry is the ability to model the changes and to give some indication of what the likely effect of a tax change would be. So I would be interested in pursuing that at another stage in the proceedings.

The next area that I want to deal with is the proposed changes to the Motor Fuel Tax Act, and I could just locate my note on that point if I may have a moment. Section 70 repeals the definition of "family farm" and replaces it with a definition of "farm," which is classified as a farm under the Assessment Act.

I know some members who represent rural ridings or even suburban ridings. I know there was a recent controversy in Saanich about the assessment of farms, where land previously assessed as a farm was partially reclassified as residential land and had to pay a higher tax rate. I think the Minister of Advanced Education may be familiar with that issue in his riding. The minister who is responsible for small business and revenue has announced a farm status review panel, so I'm interested in the relationship between the change in the definition in this act and its impact on the definition under the Assessment Act.

There are some other changes that rural colleagues will be interested in. There was a change in the definition of "farm truck" and the definition of "farm" itself. It's not substantially different — or it doesn't appear to be — from the old one, but I'd be interested in hearing the rationale for that.

There are some other references to the context in which someone can claim an exemption from tax on coloured fuel. That's a substantial relief from tax under the act. That will be of some interest and will be pursued further.

Section 73 of the act increases the Victoria regional transit service tax on gasoline and diesel from 2.5 cents to 3.5 cents a litre. This will probably increase the transit service's revenue, by our estimation, by $3 million to $3.5 million a year. I'd be interested in confirming that. That would appear to be on top of the impact of the new carbon tax on the price of gasoline and diesel here in the capital regional district. That will be something that will be pursued at a later opportunity.

I'm not going to deal with the proposed amendments to the Park Act, but under the Ports Property Tax Act, there are some amendments that continue the cap on property tax for designated port properties. This has been the subject of some controversy, and I think I can probably sum it up most accurately — the municipal reaction. The reaction has been — this is from the municipalities — that if the provincial government wanted to help the port, they should have paid for it themselves.

I'm reading from a news report a quotation from Port Moody Mayor Joe Trasolini. "We have no objection to provincial and federal spending to make the port industry more competitive" — and I continue to quote — "but they should spend their money, not ours."

In other words, ports serving a provincial or federal need should not be subsidized by local property tax payers simply because they have a port within their municipal boundaries."

For Port Moody — and this is an example — the cap meant a 35 percent decrease in taxes paid by port industries, or an increase of nearly 3 percent for municipal taxpayers.

I know there has been discussion with the Minister of Finance and other relevant ministries from many of the municipalities. There are eight in number: Vancouver, Port Moody, North Vancouver, Burnaby, Surrey, Richmond, Delta and the district of North Vancouver in the lower mainland. In addition, my colleague the MLA for North Coast is also concerned about the impact on the tax revenue for Prince Rupert.

One well understands the desire that ports be internationally competitive. The government completed a ports strategy document back in 2005. This would appear to be the interpretation of the government as to one of the ways in which to make the ports more competitive. But municipalities, given the narrowness of their revenue base, are understandably concerned about bearing the cost for these — which I think are properly regarded as provincial and national initiatives — on the backs of local taxpayers.

The property tax is not necessarily regarded as a popular tax, and municipalities are very limited in their revenue sources. Notwithstanding many representations over the years and much discussion about the importance of cities and their economic dynamism and its contribution to the growth of the broader economy, their sources of revenue are rather limited.

This particular measure continues that tax cap for another ten years, and it doesn't appear that the issues that were raised when it was first introduced have been resolved. There are some inflationary increases built into the new proposed…. They begin from the base that ignores what's happened in recent years. I haven't heard yet directly from the affected municipalities, but I expect that they will be concerned and troubled by this particular measure. There will be a requirement, I think, to have some further debate on that issue as we proceed.

The Property Transfer Tax Act is also revised. There are some measures to change that. Those amendments appear to be relatively straightforward, although there are some changes to the first-time homebuyers' guidelines which I will want to pursue in some detail.

The next substantial revision to a statute is to the Social Service Tax Act. These appear to be technical amendments, but I note a change to section 99. The passenger vehicle rental tax doesn't apply to passenger vehicles leased for eight consecutive hours for less than 28 days. It's not clear what relation that bears to the car share co-op.

There was an issue that arose recently, raised by some of my colleagues — I think the member for Vancouver-Fairview and the member for Victoria-Hillside — concerning the application of this tax to car co-ops. I think it's generally thought that car co-ops — which are a form of organization to give people the opportunity, rather than owning a vehicle, of access to a vehicle at fairly short notice on a regular basis and paying a membership fee for that right — are an environmentally benign approach. They give people the opportunity to have occasional access to a private vehicle but without the cost or, I suppose, the environmental impact of running a vehicle all the time and all that that implies.

So if that is an amendment that is meant to exempt those and change the taxation status of car co-ops, that's probably a good thing, but it's not clear from this legislation at this stage that that's the likely consequence of the change.

There are a number of other PST exemptions. There's an exemption for chemical substances used as catalysts in manufacturing. That's not something I'll address here, but it appears to require some further explanation.

The remainder of the statutes here are minor amendments to the Taxation (Rural Area) Act, the Taxation Statutes Amendment Act and the Transportation Act. They will be pursued in committee, but they're not something that I'll pursue here.

Those are the measures that the government seeks to introduce to implement its budget. Strikingly, of those measures, perhaps the most significant tax measures are the change in the corporation capital tax and the change in income tax. Those would be the two measures with the most impact. Those will be issues that I'll be pursuing at committee in some further detail.

The other issue I want to pursue and just raise briefly here before I conclude is that the budget also continues measures that subsidize the drilling for oil and natural gas. Those measures are vigorously defended by the minister, yet they appear to be increasingly out of sync with thinking from other jurisdictions where, similarly, oil and gas are a significant factor in provincial budgets.

In Alaska…. Just today in the newspaper, there's an article about the Alaska Governor playing hardball with big oil. That's a Republican Governor of Alaska who's taken a very determined stand to raising taxes on oil profits by $1.5 billion a year and rejecting industry ownership of a $25-billion-a-year pipeline — I think a measure that puts a new price on the resource and recaptures for the public treasury the kind of returns that are more consistent with the world price for oil and, to some extent, the price for natural gas as it increases.

Again, it's not simply a refrain of the opposition here. In the American House last week, the American Congress, the Democratic-led Congress passed a measure that approved $18 billion in new taxes on the largest oil companies, citing that money collected over ten years would provide tax breaks for wind, solar and other alternate energy sources and for energy conservation.

Even the President of the United States, in a speech he gave in 2006 where the price of a barrel of oil was $55, said: "Record oil prices and large cash flows also mean Congress has got to understand that these energy companies don't need unnecessary tax breaks like the write-offs of certain geological and geophysical expenditures or the use of taxpayers' money to subsidize energy companies' research into deepwater drilling."

He talks about Congress taking away $2 billion of these tax breaks: "Taxpayers don't need to be paying for certain of these expenses on behalf of the energy companies."

The Republican Governor of Alaska and the Republican President of the United States have taken a very different position from this government, but this government, from its budget, is very clear on the special interests that they feel they represent. They have given a big tax break for the banks without any justification that's apparent on the public record. They continue oil and gas subsidies in a manner that's contrary to what even Republicans in the United States are doing.

It's very clear who this government feels they represent. They feel they represent the big banks, and they feel they represent the big oil and gas companies. They are less concerned about other members of our population. So this budget bill, which seeks to implement the budget, implements those measures that the government sees as its priorities. I suppose the people will judge in the public debate around this budget what course of action is better for British Columbia, but certainly this government is clear on the record as to who they represent.

J. Horgan: It's a pleasure, as always, to rise in debate in this place. I know that when I rose to debate the budget last week, it got quite raucous in here. I'm hopeful that my remarks won't elicit the same level of hysteria on the government side. I'm confident….

J. Horgan: Already it starts. I'm 30 seconds in, and the catcalls are starting. Well, that's good. I'm glad that people are getting their hearts pumping. The ActNow minister will be pleased to see this much activity in the Legislature.

Deputy Speaker: I'm sure we'll all follow the decorum of the House and allow the speaker to have the floor.

I just want to rise on Bill 2 and discuss a few of the items in that piece of legislation. A number of comments made by the Minister of Finance this morning caught my attention, and I felt it was important that I rise on behalf of the constituents of Malahat–Juan de Fuca and say a few words about those comments.

I also, as a preamble, want to echo the comments of my colleague the Finance critic, the member for Surrey-Whalley, about what was not addressed in this document and what priorities of British Columbians were left on the table, as it were.

As a member of the Finance Committee I travelled with you, hon. Chair, around B.C. last fall and the fall before that, listening to British Columbians give their views on what should be in Budget 2008. We were charged by the minister to seek input and guidance on climate change, in particular, and through the course of our hearings — I think we were in 15 towns — our bipartisan committee was seeking the views of residents of British Columbia.

There was surprisingly — and you'll recall this, hon. Chair — very little discussion about a carbon tax at the committee. There were certainly discussions by academics, by economists, by those promoting books, pundits and others about the importance of a carbon tax, but very little of that discussion broke out before the Finance Committee. That being said, though, when the minister tabled her budget some weeks ago, the focal point of that was in fact a carbon tax.

I have to look then at the entire climate change plan and whether or not this is exactly the direction we would want to go. Or is it in fact flawed? I've come to the conclusion that it's flawed, primarily because it's been a secretive process. It's been a process driven by elites, and it has left ordinary British Columbians to foot the bill.

The minister today spoke about this being about choices. Well, it may well be about choices if you live in proximity to the SkyTrain line, if you have access to public transportation. It may well be about choices in those circumstances, but the people that I represent in the Cowichan Valley have no opportunities to access transit. They're forced and compelled to use an automobile to get to and from their place of employment, to get their children and others to places that they need to be.

The notion of choices rings a bit hollow in my constituency. Certainly if you live in Sooke, you can get a bus every hour unless you're trying to get a bus around midday, and then it becomes a bit of a problem.

The Minister of Transportation, with much fanfare, delivered a $14 billion promise to deliver transportation alternatives some time in the distant future. I would have thought that this would have been an ideal time — with Bill 2, the Budget Measures Implementation Act — to have some substance or some content behind those lofty promises that were made in January. Nonetheless, they weren't there.

What else wasn't there? We've heard my colleague the member for Surrey-Whalley speak about the forestry crisis, and this is a topic of debate in this Legislature. It's on the pages, at last, of the daily press — the prospect of 10,000 British Columbians being without work in the forest sector as a result of a whole host of issues. The Minister of Forests will inventory his perspective, our able critic from Cariboo North will inventory the real challenges, and the public will have to decide just what exactly the truth in these matters is.

That's why we have debates in this place, so that the public can have a clear understanding of what the alternatives and options are. That's what's missing from the climate change plans of the member for Vancouver–Point Grey and his cabinet. No one knows who's been invited to these secret sessions. No one knows what's going on in these secret sessions, while public policies are being developed and devised to beset British Columbians with new taxes and new challenges in their daily lives.

These are the sorts of things I would have thought that the Premier would have wanted to bring to this Legislature into open dialogue and perhaps to strike a committee, as was suggested by the Leader of the Opposition — so this could be a truly non-partisan affair, so that all of us in this place could address this challenge of our times.

It's all well and good for the members on that side of the House to say it's a non-partisan issue and then exclude members on this side of the House from the process. It seems to me that that very act is partisan and puts a lie to the whole process.

That's certainly what I'm hearing from my constituents. This isn't about choice for them; they weren't consulted. We went around the province as a committee, the Finance Committee. We were ably assisted by those in Hansard and other services of this place, and we didn't hear a lot of talk about a carbon tax. People weren't lining up to pay more taxes.

Now, the minister has alleged…. The documents we have before us today, this particular bill, put into place some of the aspects of the neutrality that we heard about, but my experience in government was that it was revenue-neutral to the counters of the beans at Treasury Board. It wasn't necessarily revenue-neutral for the people back home. That's where the public seems to lose confidence in what we're doing here and in what we do when we travel around the province.

I remember one town — I think it was Terrace — where we stopped. There's certainly a crisis in the northwest. You'll recall this, hon. Chair and other members in the House today who were on that committee. There is a crisis in the northwest. The forest sector, as I've said, is in a significant downturn. Employment opportunities

in the northwest are limited. Opportunities for the mining sector are apparent but not yet realized.

The challenges in Terrace are significant. People in the community came forward to the committee and laid out those challenges, and they're not reflected in the budget document or the Budget Measures Implementation Act. Again, what's not there is a bigger problem.

My colleague also spoke about the child poverty issues in British Columbia. It's not the opposition that are making these assertions; it's the Premier's own Progress Board and Stats Canada. These are organizations that certainly are held up in high esteem when the numbers work for the government, but when the numbers don't work, we get into a debate: "Oh well, those are old numbers; those are from 2006. Perish the thought — almost a whole 14 months ago. The data is invalid."

Yet I hear data from the 1990s every 15 minutes from this side of the House. Stats Canada produces numbers in 2006 that say British Columbia has the highest child poverty rate in Canada. That's refuted by those on the other side saying that in 1994, something happened.

Well, here's something that happened in 1994. I think it speaks to the inclusive nature of what could be a dynamic climate change plan, should we all be participating in that — unlike the one that we have before us. In 1994 the member for North Vancouver–Seymour said the following, and I'll quote from Hansard:

Now, that's an outstanding argument, and I know the member well remembers making that case. It was 14 years ago, but it speaks to the very problem we have today.

I was at a dinner earlier in the week. I don't know if you were there, hon. Chair. I know some members of the House were. A great number of government backbenchers were there listening to Dr. Jaccard, who I had the pleasure of working with — a very, very bright man and very committed to his issues.

Mr. Jaccard spoke to the B.C. energy conference sponsored by the B.C. Chamber of Commerce. It was a nice, interesting speech, and there were raving reviews from the government members, with lots of clapping at various times throughout the proceeding.

I don't recall the member for North Vancouver–Seymour clapping as vigorously as some of his colleagues. That's because perhaps he wasn't as advised as other members of the cabinet and other members of the caucus about just what was in the budget documents — what led to the creation of this carbon tax.

I know it's a divisive issue for some members on that side of the House, those further to the right of the centre lane on the highway perhaps, but that's for them to work out. I wish the member for North Vancouver–Seymour and his colleagues well in understanding these academic notions that are having real-life impacts on people in our communities. I know he supports me on that, which is probably unique in this case.

The other issue within Bill 2 that I wanted to touch upon was the amendment which will eliminate the corporate capital tax on financial institutions. The minister said in her comments that the tax hindered growth in this sector, and that's an interesting statement.

Again, as we travelled the province, we did hear from the banking association, and I do believe they did mention that they would prefer to see lower taxes in that sector. Message heard; message received. Message delivered here in Bill 2.

The banks get a free pass — $220 million forgone that could have gone to other activities. It could have gone to social programs, could have gone to other initiatives, could have gone to address some of the challenges of climate change — more innovation, accelerating the green building code.

There's a whole host of opportunities for $220 million, not least of which in my community would be commuter rail on the E&N corridor, a real green initiative and something that would immediately address greenhouse gas emissions on southern Vancouver Island ignored by this government — again, an opportunity, a choice made to give banks $220 million and not to give people in my constituency transportation alternatives to meet the challenges of climate change.

Another interesting issue that came to my attention.… I note in the explanatory notes that there is going to be an extension of PST exemptions for car share programs and other fuel-efficient vehicles, and I commend the government for that. I believe those, again, were initiatives that were initiated in the 1990s, and I'm pleased to see the government carrying forward with those.

I had an interesting e-mail from a Campbell River resident. I'm not a car aficionado, but the Citroën 2CV is a 12-horsepower-transported vehicle. It was registered by this citizen of Campbell River in 1994 as a collector vehicle, and he's been registering it every year since then. He has no other vehicle. He rides his bicycle when he's not using his, I assume, extremely energy efficient 12-horsepower Citroën vehicle.

He went to ICBC, says his e-mail, to register his car again, as he had done last year and the year before and the year before, and they said that he couldn't do it. He needed another vehicle for general transportation purposes. I thought that was odd, and I'm looking forward to the committee stage debate when we get to the government's drive to encourage citizens to use more fuel-efficient vehicles.

I'm going to ask the minister, when I get the opportunity in committee stage, why it would be that this individual has to own two vehicles to register the one that he wants to drive. That seems passing strange to me, and I'll certainly be taking it up with the minister responsible.

Here's an example of an individual in our community wanting to participate, wanting to assist in the global

challenge of reducing our greenhouse gas emissions. Through a regulation that makes little or no sense to you or me, he is denied that opportunity and in fact is told that in order to register the fuel-efficient vehicle, he has to have another vehicle for general transportation use. It seems passing strange to me.

The other issue that caught my attention is again from the minister's comments this morning with reference to section 81 of Bill 2, and we'll get into this, of course, in greater detail at committee stage.

The minister talked about the park enhancement fund and how this will allow the minister to set fees and merchandise plans for B.C.'s parks and protected areas. Now, that just kind of makes me shiver — the prospect of corporatizing and marketing in a revenue-generating way the natural beauty of British Columbia. I mean, this is a supernatural place; it's a beautiful place.

My son said to me: "Don't you think 'The best place on earth' is a bit boastful, dad? Don't you think that's a little bit over the top?" Why not a statement of fact — it's a beautiful place, it's a supernatural place, or it's a wondrous place? Best place on earth — that's boastful. I taught him better than that. I'm very pleased he said to me that he thought that was wrong.

Wait until I tell him that through Bill 2, the Budget Measures Implementation Act, we're going to be able to market that all around the world. We're going to put it on little teddy bears' bellies and say, "Come to our park here," and we're going to let people sell British Columbia one little beautiful piece at a time. Makes me shiver.

I'm certainly looking forward to my colleague from Vancouver-Hastings taking up this issue directly with the Minister of Environment when we get to sections 81 and 82 of the bill. I know other members are equally concerned about these issues.

As well, I'd like to touch on the arts endowment fund, the $150 million fund with the opportunity…. The minister said it twice now, both on the introduction of the budget and again today, that with respect to the endowment, the Arts Council will advise how that money will be allocated. That's interesting, because that's certainly not what we heard on the road.

Hon. Speaker, you'll remember very well the arts councils in various communities lined up to give us their views. We didn't have any song this year. Last year we had some song and some interpretive dance. This year we just had the straight goods. There's not enough money for arts in British Columbia. We rank very, very low.

The economic benefits of the arts are well known by all members of this House. I was pleased to see the minister allocate moneys for an endowment, but I'm concerned about what "advise" means. Again, these are issues that we'll probe more deeply in committee stage of this bill.

It caused me to pause, and I spoke to a couple of my friends in the arts community. They were overjoyed at the quantum, the size, the number. It looked very impressive. But again, over time, where will this money be going? Will it be more money down the sinkhole of Vancouver?

Now, God bless Vancouver. I don't want to discourage any members, particularly my good friend from Fairview, about Vancouver, but for those of us on the periphery — and I see many members here from outside of Metro Vancouver — it seems to be a big hole that sucks in lots of money.

The arts are as important in Kitimat as they are in Kitsilano. I know my colleague from Burrard agrees with that. We're going to want to ensure that the interest from this endowment is distributed equitably right across the province. Again, at committee stage, I'm certain that the minister will have answers to those questions, and I look forward to exchanging ideas with her at that time.

We go into the section with respect to removing the debt cap on B.C. Hydro. I'm very, very interested to hear what the Minister of Energy has to say about that when we get to committee stage. I'm certain he'll bluster about the 1990s and how absolutely awful it was.

I think it rained every day in the 1990s, didn't it? Every single day — not a day passed without torrents of rain coming down. The gloom and doom in British Columbia was palpable. We could all feel it. In fact, those on that side of the House are continuing to live it day after day after day. It's unfortunate.

I said the other day — I think this is probably what got everybody riled up — that people on that side of the House are either living in the 1990s or the 2020s, where the rest of us are living in 2008 or feeding our families. We're trying to make ends meet. Costs are going up; salaries are not — except in this place, of course. Across British Columbia public sector wages are below inflation. Private sector wages, outside of the residential construction industry, are down. Jobs in the forest industry are gone.

So it's all well and good to sit here and be Pollyanna about the great state of affairs in the province of British Columbia — the best place on earth. Boast, boast, boast. But the reality for many British Columbians, certainly in my constituency, is what we hear in this place has no correlation to their reality — none whatsoever.

So when we talk about revenue-neutral…. I know very well my good old friends at Treasury Board are saying: "It all balances out. We can take a little bit from here and put a little bit from there." Jimmy Pattison is going to get a hundred bucks. Good for Jimmy Pattison. That's $440 million in the most unprogressive way possible.

Markus Naslund's going to get a hundred bucks. Matt Cooke now lives in Washington. He was traded by the Canucks, but on December 31, a hundred bucks. Give him a hundred bucks.

J. Horgan: He got a goal last night for the Capitals. Well, there you go. There's his bonus from the Minister of Finance — $100 for Matt Cooke, who just got out of town. It doesn't make a lot of sense to me.

What's Jimmy Pattison going to do with his hundred bucks? Fluorescent bulbs, I think. He'll probably get

some fluorescent bulbs or buy some groceries at Save-On Foods. Who knows? But good on Mr. Pattison. He's an entrepreneur of great renown, a great British Columbian, and I'm sure he's absolutely delighted to start his drive for greenness by getting a hundred greenbacks from the Minister of Finance.

Again, I don't want to belittle Markus Naslund, because I think the world of Markus Naslund, and I think that, for a 25-goal scorer, $6 million is just fine. He doesn't need another hundred bucks from the Minister of Finance.

Why would we give $440 million back to British Columbians that don't necessarily need it? I am all in favour of giving a hundred bucks to those who need it — absolutely, without doubt. But I'm confident that everyone in this place could do without the hundred bucks. There are 79 right there — 79 cheques that don't have to go into Canada Post's system, don't have to get into the back of the truck, don't have to drive up the hill, don't have to create greenhouse gases to deliver people a hundred bucks. That makes sense to me. Let's not give it to those who don't need it. All in favour?

I think there's a friendly amendment right there. It'll get support from Burrard and from my friend from Tynehead, and I know my friend from North Vancouver–Seymour will not want $100 going to someone who doesn't need it, especially if they've got abstract academic notions about the economy, as Dr. Jaccard does. Dr. Jaccard's going to get a hundred bucks. Why not?

Anyway, I know that people have enjoyed my time here. I certainly have. I'm going to take my place, and I look forward very much to committee stage of Bill 2 so that I can ask these very probing questions to the Minister of Finance. I'm sure she's going to have all the answers at her fingertips, and she'll be able to explain to me why it is that Matt Cooke, now resident in Washington, D.C., gets a hundred bucks from the taxpayers of British Columbia.

M. Karagianis: In standing today to speak to Bill 2, I know that a number of my colleagues have covered several topics here. But I do have a couple of concerns that I think need to be considered and certainly some issues that I'll be raising at the committee stage on this. A number of things being implemented here are things that I have been calling for in the House, and I'll speak to those shortly. Some of those are very supportable.

I do have a great deal of concern here with the continued trivialization by the government of climate change. Again, in implementing a number of the things within this bill, I think it highlights the fact that the government seems to have really kind of missed the big picture in the climate change issue entirely.

The continued glorification of this climate action dividend says to me that, in fact, government is treating this in such a superficial manner and is really missing the larger opportunity here to make British Columbia a leader in climate change action. It's not about dividends. It's not about trying to give people $100 to offset a gas tax that's been implemented. In fact, the missing opportunity here is in a much larger investment and a serious initiative by government to get people to change, to motivate people to actually change their behaviours.

The gas tax being implemented does not do that. The climate change dividend being implemented here does not do that. It does not change people's behaviour in a significant way.

I think that the government has missed such a huge opportunity here to invest in real alternatives for the future. I know that the citizens in my community, my constituents, are very concerned, and they see through this. They see that a gas tax is not going to significantly change their behaviour at a time when what we really need is a number of alternatives to be developed.

Now, there are a few little things scattered throughout the implementation bill here that offer, again, little tiny crumbs off the table of the bigger issue here. But we have such misplaced priorities in this province by this government in giving a corporate capital tax of $220 million to banks, without actually seeing a significant investment in all kinds of alternatives for people to make significant choices and lifestyle changes.

That's where we're really missing the boat. We have missed that larger topic. In fact, I'm surprised that the environmental organizations here in this province have been so easily hoodwinked and have not been pressuring for more significant application of a real climate change action out of this government.

That would include much more dramatic investment in alternatives — in alternative transportation, in alternative technologies that we could be developing and showcasing here in British Columbia. We could show real world leadership by making this province a real centre for environmental and green technology development. I think we're missing a huge opportunity here in that.

I will say that there are a few things within this bill here that I do find supportable. The issue of the Home Owner Grant Act. This was an issue that I raised. I will say a thanks to the Minister of Finance for listening to the issue that I brought forward last year with regard to seniors on fixed incomes who, through no fault of their own, found their properties assessed in the million-dollar range. Yet on a fixed income they found themselves unable to meet the threshold for a homeowner's grant.

The Minister of Finance was very gracious in seeing that as a real problem for seniors and in making those adjustments. My constituents have been very thankful for that. To continue to recognize that, in some cases, issues around real estate and the increase in real estate values have put many seniors at a disadvantage, I think, is very supportable.

Certainly, the move toward alternative fuel investments is something that everyone in this House knows I've been calling for since the day I was elected — looking at alternative fuels and trying to find a way to get production and promotion here of those alternative fuel uses into British Columbia.

I really will watch with interest to see how this is implemented — in a sustainable manner, of course — so that we don't involve ourselves in the larger controversy

around non-sustainable alternative fuels that's happening in the U.S. But I'm certainly very pro–alternative fuel use here, and I see it as a bridging technology. For that, I'm looking forward to seeing exactly how that's implemented. I hope it's a real investment that gives us a real return in the end and helps offset our dependency on U.S. products like U.S. biodiesel.

Also, the PST reduction on electric motorcycles. This is a motion I had on the order paper since the day I was elected here as well. I put that on the order paper very shortly after coming into this House. I'm glad to see that a couple of years later we have recognized that alternative transportation options like scooters and electric motorcycles actually are worth investing in by the government. So from that part of the bill I'm quite happy to see that implemented.

Again, I would have to say that the bill continues to speak to government's misplaced priorities in a whole number of ways — not just on the climate change portfolio, but certainly on the issue that faces most of my constituents, which is affordability. For those families who are living with the responsibility of caring for seniors and who have seen the erosion of home care and the concerns around the consistency and quality of long-term care, those are real concerns that my community feels every day.

I have to continue raising those issues here, because those are things that concern my constituents the most — making sure that, while they're caring for their parents, there are home care alternatives and that there is not a continued erosion of care for seniors that causes a lot of angst for seniors.

In addition to that, my constituents are also grappling with having to work, having to hold jobs by both income earners in the house. Therefore, child care continues to be a huge concern on the minds of my constituents. The fact that we have misplaced our priorities on dealing with child care here in this province is greatly disappointing to me again in this budget in 2008.

Child poverty. I know that previous members have mentioned this as well. We do feel this in my community because the demographic in my community speaks very much to that. A lot of the child poverty is from the working poor that live in many parts of my constituency.

Again, that missed opportunity to put funding and real initiatives in place to deal with this now and into the future means that this bill is not adequately addressing the needs of my constituents.

At the end of the day affordability for families continues to be a huge challenge that I know will dog us into the future. Without a government that sees that as a top priority — making it affordable for average working families in British Columbia — we will continue to miss the boat. We will continue to miss the opportunities, and we will continue to have misplaced priorities.

That's what I see coming from this. Much of what Bill 2 implements here are things that miss the climate change action plan by a mile, don't speak to affordability for my community and, at the end of the day, provide such a superficial amount of real incentives for families that, in fact, often only the very affluent families can take advantage of. I don't think that serves my constituency well.

I will be asking some questions on the implementation of the issues that I've spoken of here and the parts of the bill that I do want to know more about, like alternative fuels. I'll be asking those questions in committee stage. I feel that it's imperative for me to stand up here and continue to call for the things from this government that my constituents need.

C. Trevena: Like my colleagues, I'd like to take on some of the issues that they have been raising about Bill 2, the Budget Measures Implementation Act.

One of the issues that my colleague from Esquimalt-Metchosin was talking about was the fact that there are fewer services for very vulnerable people in her constituency. In fact, right across B.C. we are seeing…. We quote regularly the figure of one in four children in poverty, which is an outrageous figure. We know that there is no child care. We know that we have many, many people living in very difficult circumstances.

One of the problems that I find with the Budget Measures Implementation Act is the concept of revenue neutrality. Climate change is obviously important, and having a carbon tax is very, very important. I mentioned in my response to the budget speech that I think that it's a brave step to start with a carbon tax. We have to start putting a price on the use of our fossil fuels.

Sadly, what has happened is that this interpretation of revenue neutrality through carbon tax is cutting people's personal income tax. Now, that's not revenue neutrality. That's an agenda for a political philosophy, cutting the income tax so that you have fewer services so people then have the "choice" to shop around and buy their services. Unfortunately, those who have more money get a better benefit by the tax cuts that come through with this so-called revenue neutrality.

This is what is really very troubling. We are seeing cuts in services right across the board. We're seeing a lack of investment in the areas that we really need to see it, and we're having a government that boasts, through a carbon tax budget, through an allegedly green budget, that it's cutting people's personal income tax.

I think, really, that the government through this budget, through setting up the concept of revenue neutrality in this way, through saying that what it means is we cut your income tax and you get more money if you have more money, is very…. It's a con job, frankly. It's saying: "Well, it's the shell game. We'll take here, and we'll give here."

We have a carbon tax that people have been calling for. We have seen people wanting to have a price on carbon, on our use of fossil fuels, but this is not the way to go about it. If you're going to be charging for our use of carbon, as we have to as we go into the coming years and the coming decades, we have to act responsibly. One of the ways we act responsibly is through financial measures, which is through taxation, which is through having a carbon tax.

If you want to have it truly revenue-neutral, you don't just sort of give people 100 bucks here and there and say: "Okay, if you earn a lot of money, you're going to get a pretty handy tax cut." You invest it. You invest that money. That's what real revenue neutrality means. It means that you shift the taxes. So you're taxing one area, but you're investing it elsewhere.

If this government really had the courage of its budget, if it really had the courage to say that we are doing a carbon tax that will have a huge impact, that will have an impact on the future of B.C. — and we are all hoping that a carbon tax will eventually have that sort of impact — you don't do it through a shell game and say: "Well, yeah, we've got a carbon tax, but your fuel costs are going to go up. So here's 100 bucks, if you were here before December, and you're going to get an income tax cut."

You invest. You invest in services. You invest in seriously allowing people to retrofit. You invest in alternative energies. You invest in the ways that you can deal with the issue that all of us are trying to tackle, that all of us are trying to deal with, which is climate change. It is a matter of investment. It's not a matter of saying: "Here, have a tax cut."

That, I think, is what is so sad about this and so unfortunate. We had the opportunity — a huge opportunity — here to say: "We are going to have the first province that's going to introduce a carbon tax, and we're going to invest it."

This side of the House has been quoting the contradictions for the last couple of weeks now — the subsidies to the oil and gas industry, the cuts to services, the fact that we are not seeing a real investment in our communities in the way that we need them and that would seriously address climate change.

If we were looking, instead, at revenue neutrality that shifted from what literally paid Peter to take from Paul and actually invested — looked at tax shifting, looked at changes in the way our taxation system worked…. That would be a brave budget. That would be a budget that really addressed the whole issue of carbon tax and really took us forward.

Sadly, this isn't allowing us to do that. It is allowing us to simply…. If we've got money, we've got more to spend. It is a wasted opportunity. It is a real wasted opportunity.

I think that we have all seen, in the different areas, the ways that we could see money invested. But it's not there. The money isn't going to be going back in. We're seeing that it's going just into people's pockets. We're seeing the $100 rebate. We're seeing an income tax cut.

If this government wants to show courage, if it wants to show real leadership on this, it imposes a real carbon tax that really prices the cost of our footprint on our environment. Then it shifts the tax and allows for a real investment in retrofitting, in alternative energy, in issues that are going to change the way that we all live and work in the coming years and decades.

G. Robertson: I just wanted to raise a couple of concerns I had regarding Bill 2, specifically addressing the issue of the port tax cap.

The port tax cap has already cost the city of Vancouver about $800,000 since it was launched in the ports competitiveness initiative in 2004, which unilaterally capped municipal taxes that port businesses pay. Obviously, this is a big concern for the city of Vancouver — again, downloaded costs on the municipality — as with other municipalities on the coast.

It is confounding that this government, in a time when city resources in particular are so stretched and municipal governments are feeling the pinch as more and more gets downloaded by federal and provincial governments, is extending this particular port tax cap in Bill 2. It's a difficult pill for the city of Vancouver to swallow and only adds to the fiscal imbalance that affects the municipality.

So I wanted to start by registering my real concern about the extension of this port tax cap, who it really benefits, and the fact that, again, the province is absolving itself of fiscal responsibilities when municipalities have a very difficult time managing through a shortage of resources.

I also wanted to raise the issue here related to the arts. I want, first of all, to commend the government on the significant level of funding put forward into B.C. arts to benefit the arts and culture communities around the province. I have concerns about the way this is being structured and the way the provincial government will continue to dictate, essentially, where these funds go within the arts community, rather than empowering the B.C. Arts Council, which of course is best suited to make those decisions to benefit arts and culture in the province.

Commending the resources being allocated, as they should have been…. B.C. has been trailing way behind — really, an abysmal record as a province in this country supporting the arts. It's good to see some money finally flowing into a much-needed arts and culture community. But I will not hesitate in raising concerns about how that's structured.

Again, overall concern, as I expressed yesterday in my response to the budget, about the lack of programs…. It is, of course, important and worth recognizing that there is a billion dollars, give or take, with the general purpose of addressing climate change needs.

However, it's dwarfed by the tax cuts related to the carbon tax — or the fuel tax, more accurately. There is a dearth of meaningful incentives, programs and enabling budgetary measures to ensure that our emissions as a province meet the targets that have been legislated, and in fact exceed them.

I will raise those concerns and more in committee stage of Bill 2. With that, I'll close my remarks.

Mr. Speaker: Seeing no further speakers, the Minister of Finance closes debate.

Hon. C. Taylor: I move second reading of Bill 2, the Budget Measures Implementation Act, 2008.

Hon. C. Taylor: I move that Bill 2 be referred to the Committee of the Whole House for consideration at the next sitting of the House after today.

Bill 2, Budget Measures Implementation Act, 2008, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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	YEAS — 43

Falcon	Reid	Coell
Ilich	Chong	Christensen
Les	Richmond	Bell
van Dongen	Roddick	Hayer
Lee	Jarvis	Nuraney
Whittred	Horning	Cantelon
Thorpe	Hagen	Oppal
de Jong	Campbell	Taylor
Bond	Hansen	Abbott
Penner	Neufeld	Coleman
Hogg	Sultan	Bennett
Lekstrom	Mayencourt	Polak
Hawes	Yap	Bloy
MacKay	Black	McIntyre
	Rustad

	NAYS — 32

Brar	S. Simpson	Fleming
Farnworth	James	Kwan
Ralston	B. Simpson	Cubberley
Hammell	Coons	Thorne
Simons	Puchmayr	Gentner
Routley	Fraser	Horgan
Lali	Dix	Trevena
Robertson	Karagianis	Evans
Krog	Austin	Chudnovsky
Chouhan	Wyse	Sather
Macdonald		Conroy