2009 Legislative Session: First Session, 39th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Wednesday, September 2, 2009

Afternoon Sitting

Volume 1, Number 10

[ Page 205 ]

WEDNESDAY, SEPTEMBER 2, 2009

The House met at 1:35 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

J. Les: I am thrilled today to be able, for the first time, to introduce some of my grandchildren to the House. With us today are Brandon, Darren and Stefan Visscher. This is their first trip to the House while the House is in session. I guess that's one of the benefits of sitting during the summer months when school is not in session. They are accompanied today by their grandmother, who doubles as my wife Mattie. I would like all members of the House to please make them all very welcome.

Hon. C. Hansen: I would like the House to welcome a visitor who is here from Fort McMurray, Alberta. She is the mother of one of my very valuable and invaluable members of my staff. I hope the House will welcome Rosie Llewellyn-Thomas.

N. Letnick: I would like to welcome to the House Edna Aimsbury, a friend from Maple Ridge, who is accompanying my mother, Mary Claire Letnick. Please help me make them feel welcome as well.

D. Horne: I'd like to welcome, joining us in the gallery today, Bernie Hiller, who was the B.C. Liberal candidate in Port Coquitlam and is now my constituency assistant. I hope that everyone will make him feel welcome.

Point of Privilege
(Reservation of Right)

B. Ralston: I rise to reserve my right to raise a question of privilege with respect to remarks made by the Minister of Finance.

Statements
(Standing Order 25B)

CANYON RANCH

D. Barnett: We frequently speak about the importance of our agriculture sector as the food source and economic foundation for British Columbia. But I believe that too often we forget to recognize the work, care and pride that people in the agriculture industry have in the land.

Canyon Ranch in Alexis Creek has been awarded the 16th annual Environmental Stewardship Award from the British Columbia Cattlemen's Association and is a great example of leadership in agriculture. Al and Bev Madley have earned the award for the remarkable environmental management practices they use on their beef cattle ranch. Canyon Ranch has also won the Canadian Cattlemen's Association national Environmental Stewardship Award.

Canyon Ranch is located in my constituency in the Chilcotin River Valley, west of Alexis Creek. Bev and Al run the operation with their children Garrett and Brooke. One day Bev hopes to pass the ranch management title to her son Garrett.

Canyon Ranch won these awards for their outstanding commitment to water quality, habitat restoration, riparian management and range and nutrient management. Their management strategy has greatly improved the natural environment while maintaining a sustainable cattle ranch.

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The Madleys' Canyon Ranch also deserves to be recognized for being the first ranch in the Chilcotin to complete the environmental farm plan and the biodiversity plan.

These two awards clearly demonstrate how dedicated the Madleys are to sustainable, responsible ranching. Canyon Ranch deserves to be congratulated, and I am proud to stand here today and do so. The efforts of the people in the Cariboo-Chilcotin are very impressive.

100th ANNIVERSARY OF
SOINTULA CO-OPERATIVE

C. Trevena: Small rural communities often rely on their store as a place for groceries and supplies, often for mail, for beer, for gossip. They are at the heart of our communities, and no more so than in Sointula, where the co-op this summer celebrated its 100th anniversary. That makes it the oldest serving consumer co-op in Western Canada.

Sointula did originally have a private store, but in 1904 people there decided that a co-op would better serve them. The community had come together to build communally and continued to work communally.

Sointula was settled by Finns, and the co-op meetings were originally conducted in Finnish and translated to English. Food was served, and discussions were very long. There has been no looking back.

The co-op played a large part in the development of the town, financing the library, initiating street lighting and a phone service. In the 1980s it took over the running of the gas station. Despite competition from stores down-Island in Campbell River, in Courtenay and even in Nanaimo, the co-op remains the centre of the town, providing power tools through to plumbing supplies, a butcher counter and island-fresh veggies. Its member-
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ship is still strong, and with a sale on memberships to mark the centenary, it's even healthier.

But it's a tough time for the co-op and the community. Sointula was once a healthy fishing village, but it's now a community with a strong spirit but little employment. Young families have been leaving to find work, and that hits the co-op. The second-floor dry-goods section had to close, and the reality of more downsizing and cuts is one being faced by the board, membership and staff.

The 100th anniversary was marked in July in fine Sointula style with a pancake breakfast, a parade, a presentation of a plaque and, of course, a birthday cake. The 534 active members of the Sointula Co-op Association are hoping that the spirit of communal ownership and communal responsibility will work for their community for many more years.

LAWN BOWLING ACHIEVEMENTS OF
VERN GREENHILL

D. McRae: Imagine, if you will, a spacious, precisely level, flawlessly manicured lawn that is alive with social interaction and competition.

No, I'm not describing the lawn here at the Legislature, or even Butchart Gardens. I'm talking about the pristine beauty of a lawn bowling green.

Lawn bowling has long been a popular sport in the Comox Valley. The Courtenay Lawn Bowling Club, located at Bill Moore Park, is a popular venue for many of my constituents.

The dynamic membership has ensured that participants not only have a fantastic social organization, but that a very high level of competition also exists. One particularly skilled member and a constituent of mine — and, I might add, a distant relative — is Vern Greenhill.

In late June Vern entered the provincial men's single lawn bowling competition at the Juan de Fuca club here in Victoria. This is the first time he had entered this level of competition, facing off with 26 other members from across the province. Vern won seven of eight games and brought home a silver medal. He also won the opportunity to compete at the Canadian championships, also hosted by the Juan de Fuca club in mid-August.

Upon returning to Juan de Fuca in August, Vern again won eight of nine games in round-robin play. His only loss was to another B.C. player, Christie Graham. They faced each other again in the final game, with Vern Greenhill emerging victorious and winning the gold medal.

I am also proud to report that B.C. players won both gold and silver medals in the men's and women's events. Vern Greenhill now has the honour and opportunity to represent Canada at the lawn bowling world championships held later this year in Australia.

I would like the House to recognize the achievements of Mr. Vern Greenhill and his exceptional abilities and talent in the sport of lawn bowling.

LACROSSE AND
NEW WESTMINSTER SALMONBELLIES

D. Black: Lacrosse has played an important role in Canada's history. Lacrosse is a sport with a rich and fascinating heritage dating back centuries.

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It was derived from the first nations game of baggataway. When French colonists arrived in Canada during the 17th century, they saw the Mohawks playing baggataway and adopted the game. They thought the stick resembled a crozier carried by bishops, and they renamed the game lacrosse.

Lacrosse is the stuff of which legends are made. One of the most famous is Pontiac's rebellion of 1763, when the Ottawa Chief reportedly staged a game in order to distract British soldiers and gain entry to Fort Michilimackinac in what is now Michigan.

Starting September 4 Queen's Park arena in New Westminster is going to be the place to be for all sports fans. The famed New Westminster Salmonbellies will take on Ontario's Brampton Excelsiors for the 2009 Mann Cup, Canada's national lacrosse championship. The excitement of the fastest game on two feet played on the wooden floor of Queen's Park arena will thrill lacrosse fans from far and wide.

The Salmonbellies have made it to their 44th championship and 24 Mann Cup wins, a record unmatched by any other team. In fact, their closest competitor is Peterborough, with only nine Mann Cup championships. Tickets to the games are available on line from the Salmonbellies' website. For sports fans from other areas of B.C., the games will be webcast in real time.

Congratulations to head coach Bob Salt, team manager Dan Richardson and all the players for their skill and determination in taking the WLA title. I wish the Bellies players good luck as they start the national championship round on Friday night, and I'm looking forward to being in the stands in Queen's Park arena. I'll be there to cheer them on in the drive for 25 Mann Cup champions. Go, Bellies, go.

BURNABY ATHLETES

R. Lee: British Columbia produces a lot of outstanding athletes, and I am proud to say that many of them come from Burnaby — perhaps most famously, Burnaby Joe Sakic. Efforts flourish in my city, and today I would like to recognize some of our champions for their perseverance and dedication.

I would like to congratulate Michael Cai on the seven gold medals he won at the 2009 Canada Summer Games, making him the most successful athlete in the Games' history. I also want to applaud the accomplishments of Rebecca Alley for her gold medal in kayaking and Kelsey Haberl for her outstanding play, which led to a
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gold medal in softball at the Games. Selena Ye is to be congratulated for the four gold medals she won at the B.C. summer swimming championships.

Earlier this year young table tennis players from Burnaby also helped Team B.C. win the Canadian junior championships. Burnaby's Shirley Fu, Teddy Wu, Paula Hsien, Peggy Hsien and Leanne Lee made us proud as they won six gold medals and helped B.C. win 13 of 28 gold medals in the tournament.

Finally, I must also mention that Burnaby's Matthew Woo, Anthony Cusati, Ryan Matsuda and Matteo Vincelli all made significant contributions as their Hastings All Stars won the Canadian Little League championship and went on to represent Canada at the Little League World Series in Williamsport, Pennsylvania.

I ask the House to please join me in congratulating these fine young athletes for their outstanding accomplishments.

SENIORS OUTREACH PROGRAMS IN
MAPLE RIDGE AND PITT MEADOWS

M. Sather: For over 30 years Maple Ridge–Pitt Meadows Community Services has been helping seniors preserve their independence and well-being by way of the seniors outreach program, which provides indispensable services, enabling seniors to remain living in their own homes for as long as possible.

One of these services is the driver program, a sought-after alternative to taking expensive taxis. By paying an honorarium to a volunteer driver, seniors are whisked to appointments in Maple Ridge or all the way into Vancouver.

Of equal importance is the shopping program, which gives seniors the opportunity to shop for groceries with assistance. In the case of seniors who are unable to leave home, a volunteer will do the shopping for them. This is of particular importance in Maple Ridge, due to a strike closing Extra Foods, an affordable grocery store that is centrally located for seniors use.

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Through the handyman program, mechanically inclined seniors are able to give back to their peers by performing maintenance jobs for a very affordable fee. Again, this helps seniors maintain independence.

The visiting program and the Hello program are two other great services. In the visiting program volunteers make regular house calls to seniors who have similar interests. The Hello program provides weekly phone calls to check in and chat with seniors. These programs improve the emotional well-being of home-bound seniors and have proven vital as an emergency check-in.

It is quite evident that the seniors outreach program benefits the most vulnerable, isolated and at-risk seniors in my community. For some seniors, the volunteers may be the only contacts they have. Staff and volunteers are eager to continue providing these valuable services for seniors, but sadly, as of September 30, this program will be terminated in Maple Ridge and Pitt Meadows.

Oral Questions

BUDGET REVENUE PROJECTIONS

B. Ralston: Yesterday, in one of his more recent versions of events, the Finance Minister admitted that he knew, and he knew in the middle of the election campaign, that government revenues were falling by hundreds of millions of dollars. He claims he did not tell the Premier, who was out on the campaign trail telling people that the deficit would be $495 million maximum. Can the Minister of Finance explain why he chose not to tell the Premier immediately this important information?

Hon. C. Hansen: When we built the budget that we tabled in February, we built in added prudence that would actually allow for a downturn in revenues. We knew at that time that there was certainly some volatility to the world economy and the impact that it might have on British Columbia. When the deputy minister advised me that there were indications that revenues might be off by $200 million to $300 million, I knew at that time that that could still be fully accommodated within the fiscal plan that we tabled in February.

Mr. Speaker: The member has a supplemental.

B. Ralston: The middle of the election campaign was April, only the first month of the fiscal plan. The budget year begins, of course, on April 1. Was the minister not concerned by the fact that within one month revenue had fallen off a projected $200 million to $300 million, and did that not lead him to ask his deputy minister some further questions, or did he simply choose the route of silence?

Hon. C. Hansen: With the comments that the deputy minister made to me, I took that to mean that that would be annual, over the entire calendar year or the entire fiscal year, and not a….

Interjections.

Mr. Speaker: Members.

Minister, just take your seat.

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. C. Hansen: As I have indicated, the deputy minister volunteered that information to me. I did not
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ask it of him. Quite frankly, given the protocols that exist, it would probably have been inappropriate if I had then subsequently asked the deputy minister for further advice in the middle of the election campaign.

So Mr. Speaker, I at no time before the election campaign or during the election campaign was advised by any of our officials that a $495 million deficit was not doable — at no time that the budget we had tabled would not stand up either on the revenue or the expenditure side.

Mr. Speaker: The member has a further supplemental.

B. Ralston: Well, the Finance Minister says that he took him to be referring to $200 million to $300 million on an annual basis. Did the minister not have the curiosity or the leadership ability to ask a further question: was that on a monthly basis? Because when we look at what the deficit is now, 12 times $300 million — $3.6 billion minus the HST signing bonus, it's pretty close to where we're at in this budget. Did the minister not think to ask that question? It's just not credible.

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Hon. C. Hansen: At the time of the February budget we actually built in the extra prudence of a 0.9 percent reduction in the gross domestic product that would actually allow for reductions in revenue numbers beyond what we had anticipated.

The other thing is that we also — and I indicated this at the time of the February budget — had instructed the public service to look at other discretionary grants. So in the February budget we had actually identified $1.9 billion worth of savings and discretionary grants that would come out of the future spending stream, and I signalled at that time that we were asking ministries to look even farther because we felt that there were more savings on the expenditure side that could be realized.

Even before the election started, I was aware of the fact that ministries were having some success in identifying at least the potential for savings on administrative grants. As a result of the information that the deputy minister provided me that day, I knew that that kind of a reduction in expected revenues was totally manageable within the fiscal plan that we tabled in February.

C. James: We learned yesterday that the Finance Minister said that he was informed midway through the election that revenues were tanking, but that wasn't the only thing we learned yesterday. We also learned yesterday that the Premier said that he was informed before the election: "I heard revenues were coming off, yes, a week before the election."

My question is to the Premier. Will he tell the House today who told him, when was he informed, and why did he keep it a secret from the voters in British Columbia?

Hon. G. Campbell: During the election I did have conversations with my deputy minister. They were largely with regard to H1N1. In one of those conversations she did raise the subject of the budget. That was in May. She told me that there were revenue pressures. She also informed me that the director of finance believed there were a number of measures that could be taken.

Mr. Speaker, I think this is important to note. At no time was I told that our February budget numbers were not going to be achievable. On the contrary…

Interjections.

Mr. Speaker: Members.

Premier, just….

Interjections.

Mr. Speaker: Members.

Continue, Premier.

Hon. G. Campbell: …I was told that our February budget was achievable. That's why I was clear with British Columbians that we would achieve our February budget. It would require difficult decisions, but we would achieve our February budget.

Now, since the election we have watched…

Interjections.

Mr. Speaker: Members.

Hon. G. Campbell: …a significant reduction in revenues that cost us $500 million in natural gas revenues, $500 million in natural resource revenues, over a billion dollars in corporate and personal income tax revenues. Obviously, we have faced challenges. We presented a budget that will protect health care, protect education and continue to build on British Columbia's record of success.

Interjections.

Mr. Speaker: Members.

The Leader of the Opposition has a supplemental.

[1400]

C. James: This is about public trust. This is about honesty. This is about making sure the public is informed. I question the Premier again. When the Premier was told that revenue was tanking, why did he not inform the public? Why was he not honest with the public in British Columbia?

Interjections.

Mr. Speaker: Members.
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Member, the last part of your statement — I want you to unconditionally withdraw that.

C. James: I unconditionally withdraw, Mr. Speaker.

Hon. G. Campbell: You know, I just outlined for the member opposite, for the Leader of the Opposition, what took place. Yes, I did have a conversation with my deputy. She did inform me that there were revenue pressures. She also informed me that the Deputy Minister of Finance had identified mitigative measures.

I think it's important for people to hear this. At no time during the election was I informed by any of our staff — by the Deputy Minister of Finance or anyone else…

Interjections.

Mr. Speaker: Members.

Hon. G. Campbell: …that we were not going to be able to achieve our February budget. In fact, I was informed, on the contrary, that we would achieve our February budget, and that's exactly what I said to the people of British Columbia.

Hon. Speaker, if I could just….

Interjections.

Mr. Speaker: Members.

Hon. G. Campbell: The reason our province is recognized for the way we manage our economy and manage the initiatives we have is because….

Interjections.

Mr. Speaker: Members.

Hon. G. Campbell: It's because — as we did in 2008-09 — we told the people of British Columbia we would balance the budget. We told them there would be a $50 million surplus. In fact, there was a surplus that was 50 percent higher than that, because we were willing to make difficult decisions, and we're going to continue to do that to build British Columbia's future.

S. Simpson: The one thing that's clear here is that the Finance Minister's story seems to change on a daily basis. He started out telling this House that it would be inappropriate for him to have discussions with his officials, and then, "Oh, I had one casual conversation," and then it was: "I've had a few discussions."

What we know is that this minister knew that there was a $200 million to $300 million tanking of this economy on a monthly basis, and he should have asked, and he kept it hidden from the people of British Columbia.

Frankly, while this minister may have felt comfortable to keep the facts hidden from the people of British Columbia, it's not believable that he kept them hidden from his boss. Did he tell the Premier? Did any of his officials tell the Premier about this, and when?

Hon. C. Hansen: What I was advised of by the deputy minister was that there were indications that revenues might be off by $200 million to $300 million. Now, to put that into context, that actually amounts to half of 1 percent of the projected revenues of the province. I also knew that on the expenditure side, we were fully able to cover that magnitude of a downside in revenue and still live within the fiscal plan that we had tabled in March.

But you know, just given the comment that the opposition Finance critic made yesterday, when he said….

Interjections.

Mr. Speaker: Members.

Hon. C. Hansen: He said this in this House: "Despite clear warnings from leading economists that their pre-election numbers didn't hold water…."

In April this Leader of the Opposition tabled a budget plan that they tried to get elected on, which adopted exactly the same numbers that were in our February plan. On top of that, they invented an additional $600 million of revenue out of thin air.

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I think it's a question that they need to answer to the voters of British Columbia. Why did they put forward a budget plan that they ran on if they thought that their numbers could magically invent new revenues?

Interjections.

Mr. Speaker: Members. Members.

I want to remind members to listen to the question and to listen to the answer, please.

The member has a supplemental.

S. Simpson: If this minister is telling us that he gets told by his deputy that it's $300 million and he doesn't have the wherewithal to ask "Is that a monthly or an annual figure?" maybe competency is the bigger question than honesty in this House.

In this province….

Interjections.

Mr. Speaker: Members. Members.

Just take your seat.

Members. Let's listen to the question. When the question comes, then we'll listen to the answer.

Continue, Member.
[ Page 210 ]

S. Simpson: In this province we have a one-man government. It's unbelievable that the Finance Minister wouldn't have felt obliged to tell his boss about the collapsing revenues in this province. This minister's credibility is already in shambles with everybody in this province. It's time to tell the truth.

When did you tell the Premier or have your officials tell the Premier about this situation?

Hon. C. Hansen: I will put our track record as a government on financial matters up against the track record of that party any day.

Interjections.

Mr. Speaker: Members.

Interjections.

Mr. Speaker: Members. Members.

Hon. C. Hansen: Actually, unlike the track record of that government in the 1990s, where they deliberately overrode the advice of the officials in the Ministry of Finance — they deliberately changed numbers that were recommended to them by officials in the Ministry of Finance — we are a government that works with the fine staff that we have in the Ministry of Finance. We accept their advice, we accept their numbers, we accept their projections, and I'm proud of the record that we have established for fiscal management of the province's budget.

J. Horgan: The story changes quite a bit with these people. Last week the Finance Minister said that he did not meet with his officials, that it would be inappropriate to do so.

This week he says: "I had a casual conversation." I don't know what planet they live on, but 300 million bucks to the people of B.C. is not a casual issue.

[1410]

Interjections.

Mr. Speaker: Members.

J. Horgan: Today we learn…

Interjections.

Mr. Speaker: Members.

J. Horgan: …that the minister had several meetings with….

Interjections.

Mr. Speaker: Just take your seat.

Members. Members at the other end of the House.

Continue, Member.

J. Horgan: So let's recap. Last week it would be inappropriate for the Minister of Finance to talk to his officials. Now he admits that he's met with them at least three times to discuss falling revenues. The Premier just stood in this place and said he was briefed by his deputy minister — apparently not part of the protocol followed by the Minister of Finance.

Before the election was over, we were down $300 million. A week later we're down $1.1 billion. A month after that, you're still standing in this place saying: "$495 million — tops."

Will the Minister of Finance tell the people of British Columbia when he knew that his budget was a complete fabrication and he was deceiving the people of B.C.?

Hon. C. Hansen: First of all, I never met with the Deputy Minister of Finance even once during the election campaign. The Deputy Minister of Finance phoned me on a couple of occasions with regard to matters that pertain directly to my role as the Minister of Finance.

At no time did we get any indication that the budget with a $495 million deficit could not be achieved. In fact, in the discussions that I have subsequently had post-election with the officials in the Ministry of Finance, they also recognized that throughout that period of time they felt that a $495 million deficit was still achievable.

As I have indicated, the Ministry of Finance ran revenue projections which they completed on May 12 so that they would be in a position to brief, perhaps, a new government with a new Minister of Finance or perhaps a returning government with the latest information on detailed analysis of revenues and expenditures, as they do probably about four times a year. It is at that time that the ministry realized that revenues had tanked much more than they had originally anticipated.

Mr. Speaker: Member has a supplemental.

J. Horgan: The only sad part of that statement is that we don't have a new Minister of Finance.

We're weeks into the fiscal year. The Ministry of Finance advises the minister in a meeting that apparently didn't take place, although it's in his schedule for April 15: "We're off by 200 million to 300 million bucks." Three weeks after that, we're off by $1.1 billion. A month later the minister is still maintaining that somehow, miraculously, we will only have a $495 million deficit.

Is that because the minister was already counting the beans from Ottawa, the blood money to introduce a $2 billion tax shift to the people of British Columbia? Is that
[ Page 211 ]
why you weren't concerned — because you'd already cut a deal with the federal government?

Hon. C. Hansen: The answer is no.

D. Black: Today the Minister of Finance admitted that he was aware two days after the election that revenues had fallen by more than a billion dollars, and yet on June 10, when the cabinet was sworn in, he still insisted that the deficit would be $495 million.

My question to the minister is this. Why did he say the deficit would still be $495 million when he had been told differently — when he had been told that that was not the case? And will he admit today in this House that he was just covering up for the Premier?

Hon. C. Hansen: While we were advised in the third week of May that revenues had declined greater than anticipated, revenues are only one side of a budget equation. Also, in terms of our ability to reach a target of a $495 million deficit, we had options. We had options around revenues. We had options around expenditures.

But towards the….

[1415]

Interjections.

Mr. Speaker: Members. Members.

Continue, Minister.

Hon. C. Hansen: In late May, as we began discussions with the federal government with regard to the possibility of us changing our position on the harmonized sales tax, it became apparent to us that the federal government was putting $1.6 billion on the table. So at the time of the June 10 swearing-in, I was already at that point convinced in my own mind that a shift to HST would be important for British Columbia and that I would be recommending that going forward.

At the time, I was also of the impression that we would have to take the total $1.6 billion in one fiscal year. We have since actually negotiated with the federal government to allow us to spread that over a greater period of time.

Mr. Speaker: Member has a supplemental.

D. Black: There's not one single person in British Columbia who believes that bafflegab.

B.C.'s deficit.…

Interjections.

Mr. Speaker: Members.

Take your seat, Member. Take your seat.

Members. Let's listen to the question, and then let's listen to the answer.

Continue, Member.

D. Black: B.C.'s deficit had grown by a billion dollars by election day. The minister knew that on May 14, but it was so important for him to cover up his government's budget deception that he refused to come clean with the voters of B.C. or the people of B.C. He knew the deficit was much higher than $495 million, but he deliberately avoided telling the truth.

Mr. Speaker: Member. Member.

D. Black: I withdraw.

Will he stand up in this House today and apologize to the voters of British Columbia for his government's budget deception? Will he for once, just once, show some respect to the voters of British Columbia?

Interjections.

Mr. Speaker: Members. Members.

Minister, continue.

Hon. C. Hansen: It's a little bit hard to take — for a New Democrat in this chamber to be talking about budget deception, given what happened in 1996.

I'm not going to apologize for the fact that we have outperformed in eight consecutive budgets. I'm not going to apologize for the fact that we produced five surplus budgets and drove down the debt. I'm not going to apologize for the fact that after a series of credit-rating downgrades experienced by the NDP government we actually had bond-rating agencies giving us seven consecutive upgrades.

At the end of the last fiscal year, when everybody was predicting that the last fiscal year was going to be in a deficit, including members of the opposition…. I'm not going to apologize for the fact that we ended that last fiscal year with a surplus that was 50 percent higher than had been forecast.

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Interjections.

Mr. Speaker: Members.

M. Farnworth: Actually, it's funny you should ask. They're doing really well, because people are watching your budget stories change all the time right across this province and are enjoying every minute of seeing your guys' deception.

What we've seen today is a Finance Minister stand up and admit to this House and the people of British Columbia that he knew during the election that the revenues were tanking and that he failed to ask the deputy minister how bad it was. It's okay — 200. Maybe it's 300.
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Maybe that's annual. But no, he didn't ask any questions. He failed to ask a question on how bad things were.

What we also know is that the Premier told this House that his deputy told him that revenues were tanking. And yet the Premier failed to ask the most basic question: "How bad is it? How serious is it? How much is it?"

Now, was it because of incompetence, neglect or the fact that if they were told the truth, they'd know they'd have to come clean with the people of British Columbia, and they just didn't think that would be convenient?

Hon. C. Hansen: This, coming from a member who sat in a caucus where the Premier deliberately fudged the budget numbers, who deliberately overruled the advice of Finance officials.

Mr. Speaker: Minister, will you withdraw the last part of that statement.

Hon. C. Hansen: I withdraw.

Mr. Speaker: Continue.

Hon. C. Hansen: The budget that we tabled yesterday actually has the results of protecting core social programs in British Columbia, protecting a health care budget, protecting an education budget. It's a budget that actually builds a foundation for the economic recovery that we are going to be seeing in the near future.

Interjection.

Mr. Speaker: Members.

Continue, Minister.

Hon. C. Hansen: One big difference between this government and that government in the 1990s is that we recognize that in the Ministry of Finance, we have some of the finest experts, some of the finest economists and some of the finest forecasters. When they provide us with that advice around a budget and budget projections, we accept that advice.

[End of question period.]

Tabling Documents

Hon. M. Coell: I'd like to table the 2008 annual report and 2009-2011 service plan for WorkSafe B.C.

Petitions

R. Lee: I would like to present a petition on behalf of 88 people from the film industry urging the government to match tax incentives to other provinces.

Orders of the Day

Hon. M. de Jong: I call continued debate on the budget.

Mr. Speaker: Member for Surrey-Whalley.

Member, if you want to just take a few minutes while members tend to other duties.

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Budget Debate

(continued)

B. Ralston: I rise to continue debate on the budget. I want to begin my remarks, in examining this budget, and look at the circumstances that led to the tabling of the budget in February. That budget was tabled but not passed.

It's a peculiarity now of the fixed-election-date budget year that there is a tabling of a budget document in February and a subsequent budget in the fall. The contrast between the two budgets is a very dramatic one and something that we've just addressed in question period to some degree.

It was very clear in the economic run-up to the budget in February, beginning back in August and September of the previous year, that dramatic changes were taking place in the world economy, beginning most notably with the collapse of the major, longstanding, historic investment bank Lehman Brothers in the United States, the subsequent plunging of the stock market in the United States and the attendant consequences to be heard around the economies of the world.

[L. Reid in the chair.]

That began a series of economic reverberations which, of course, had their impact here in British Columbia. The tabling of the quarterly report in September and the subsequent discussion last year began a process of readjustment to the changing economic circumstances that the government took into account, and they had some measures that they proposed for British Columbians.

Probably the next step in the chronology was the brief session that was called in October, where the government tabled a ten-point plan. I think one of those ten points was recalling the Legislature. It was hardly a particularly weighty plan, but nonetheless, that's what they did.

At no time in this particular look at the economic circumstances of the province and the range of remedies that the government had at its disposal to tackle those problems was the harmonized sales tax ever mentioned. There's absolutely no mention of that whatsoever — certainly an opportunity to deal with it then.

What the Premier has said since the election, of course, is that the harmonized sales tax is the single most
[ Page 213 ]
important measure that the government could take to assist the economy of British Columbia. Yet when the economy was showing signs of difficulty, when the government went to look for policy solutions, there surely was a perfect policy option for the government. Given the superlatives that the Premier has heaped upon this measure since the election, it's surprising — is it not? — that this was not mentioned at all. It wasn't brought forward. It wasn't discussed. It wasn't even mentioned.

The ten-point plan notably included a measure to assist retailers in their handling of the provincial sales tax. At that time and up until now, although it will be abolished with the introduction of the harmonized sales tax, retailers and those who collect provincial sales tax on behalf of the government receive what's called a commission. In other words, they receive a small fee for basically acting as the government agent in collecting the tax and remitting it to the provincial revenue ministry.

[1430]

One of the points in the plan that was thought so essential, so important to economic recovery, was that the ten-point plan doubled the commission. So potentially a retailer could earn up to $195 a month, depending on the volume of sales on which the PST was collected, and could earn double that amount.

Not only was the HST not mentioned; the PST and its importance in the economic life of small business was reinforced and enhanced because the commission was increased by 100 percent. That was an opportunity to talk about the HST that was missed, and rather, this most important economic measure that the province could undertake had no place in that. In fact, the contrary took place. The PST was reinforced in the economic life of small business.

We then move towards the budget in February and the ordinary prebudget consultation takes place. There has been mention made by the minister, and I think by some members of the Finance Committee…. The Finance Committee made a number of recommendations. The Finance Committee did make a recommendation agreeing — and this is an all-party committee — to a study of the HST.

Now, for some reason, members opposite chose to interpret the very simple words of that — to study the HST — as implying an endorsement of the HST by opposition members of the Finance Committee, indeed by government members of the Finance Committee. I'm not sure, knowing some of the political predilections of government members of the Finance Committee, that it could be construed as an endorsement of the HST by some of them, knowing what their views might have been at the time on the HST.

Of course it's a different story now. It's the most important economic measure that could be taken by government ever. Back then, the government members of the Finance Committee were considerably less keen on it, but we agreed to engage in a study. The wording of the recommendation is "a cost-benefit analysis."

I was confident, given what I knew about HST, that the cost-benefit analysis would show that it was a major hit on consumers and would be very politically unpopular and that any reputable study would come back and show that.

But that measure, that recommendation of the Finance Committee, never produced a study. Certainly, nothing was ever made public. I suppose, if we were to engage in the freedom-of-information process, we could see if it was ever followed up, but we wouldn't have an answer, given the way the government ordinarily responds to those requests, for another nine months to a year.

That study, I'm convinced, never took place. The recommendation was stillborn. For the government to rely upon it as some indication that members on this side were supporting the HST is simply preposterous and shows just how far they're grasping at straws in order to construct arguments that might be construed by the credulous as being arguments that are in support of the HST.

The government then moved to its budget and the preparation of the budget. The forecast council was convened. They last met prior to the budget on January 9 and issued their predictions. The Premier has made much of those predictions in his defence of the budget, and that even continues until now. "We relied on these experts. We took the average of their forecasts, and we knocked it down a bit. This is what we did, and that's why the process was very credible."

[1435]

What is omitted from that partial explanation is the fact that the forecast council, in the very unusual economic circumstances of the beginning of this year…. In the first quarter of this year, in 2009, the U.S. Department of Commerce was predicting a 4 percent drop in GDP, and the American economy obviously impacts here.

Looking backwards now, as we are in September, at the first quarter — January, February and March of this year — that was perhaps the time of the steepest decline in GDP in both the American economy and Canadian economy, and globally, although there are some regional variations, obviously.

The forecast council, consisting largely of bank economists who are in tune with the international movement of money and economic trends generally, asked the minister if they could come back and offer new forecasts prior to the tabling of the budget. That request was refused.

When the Premier says, "Well, we relied on these experts; their input was taken into account in the budget; that's the basis on which we constructed the budget; those are the forecasts on which we constructed the budget," it's really not the whole story if those very experts wanted to come back and change their predic-
[ Page 214 ]
tions, their forecasts. These are the very same people that the Premier claims to applaud.

It is significant that a number of the bank economists revised their growth projection downwards. Mr. Pastrick — perhaps the most pessimistic — revised his downwards substantially. Economists in the Bank of Montreal, the Bank of Nova Scotia and other economists revised their predictions downwards.

The very basic element of the budget, of the forecast…. Of course, when it's translated and run through the econometric models of the government, it generates a revenue number. That number was substantially different, according to those members of the forecast council, than it should have been, because economic circumstances — even between January 9 and the tabling of the budget in mid-February — had changed, and they continued to change.

They continued to change. That's what's so particularly preposterous about the assertion of the Premier on April 23, after the radio debate, that the deficit for British Columbia in the new fiscal year would be $495 million maximum. There was no intellectual support for that from the forecast council. The claim is that the forecast council was supporting that, but in fact, that's simply not accurate. The forecast council prediction at that point was out of date, and the minister refused to meet with them and revise the forecast to a more realistic level.

So that's the basis on which the budget was constructed in February. At the time, just to recapitulate history briefly, the members of the opposition in question period, for example, raised questions about some of the key assumptions — the key assumption, for example, of retail sales. Given what was clearly known about the economy, given what was clearly going on in the economy, the prediction of an increase in retail sales was deemed by many analysts to be unrealistic, yet the government persisted in that.

Everything was done to stretch revenue to the limits of plausibility, and everything was done to suppress spending to the limits of plausibility. Probably the best example on the spending side is the fire budget. The fire budget this year, regrettably and unfortunately for the citizens of British Columbia, has gone way, way past what was predicted, and it's been one of the worst fire seasons ever.

We're not disputing that fires need to be fought and that money needs to be expended to fight them, but the fire budget…. In an effort to keep the deficit down and in an effort to suppress expenditure, the number that was put in the budget was below the ten-year average of the money expended over the previous ten years.

[1440]

Granted, there are spikes, as there were in 2003 in the Okanagan and again this year, but to enter the fire budget below the ten-year average was certainly, at the time, unrealistic and, in hindsight, appears to have been blindly optimistic as to what might happen in that area.

There were a number of measures taken in constructing the budget that really led the budget to…. I think it's clear that in the view of experts, particularly, and informed commentators, as time wore on, the budget was not realistic. It was based on false hope, and the $495 million deficit would not be achieved and could not be achieved.

Yet the government persisted with that and carried that budget into the election campaign. The Premier claims today here in this House that he didn't know otherwise, yet people not in the political process — informed business people, economic commentators, many people — were firmly of the view that the $495 million deficit was not attainable, regardless of how much government expenditure was cut, given the revenue projections that were going on.

It's clear that there were other indications during that period of time, other economic indicators, that suggested that the budget wouldn't be held up, and there are specific indications in some of the ordinary economic indicators that that would not be the case.

For example, between February 2008 and February 2009 insolvencies and bankruptcies skyrocketed 45.8 percent. The job loss numbers continued to mount in the first quarter, and those are released — and they're objective measures — by the government agency Statistics Canada. Real job loss numbers continued to mount so that at this point British Columbia had one of the highest job loss numbers of full-time jobs for the size of the economy in the country.

On April 27 Stats Canada said that B.C.'s real GDP fell 0.3 percent in 2008, the first contraction since 1982. There was a Canada-wide GDP increase of 0.5 percent. British Columbia, at that point, was out of step with the rest of Canada in a fall in real GDP, which is a surprising turn of events.

In March, I referred to job loss numbers. B.C. lost 23,000 full-time jobs. That was the worst job loss record in the country. Since the beginning of 2009, B.C. has lost nearly 80,000 full-time jobs. British Columbia's unemployment rate has become the worst in western Canada, and since October of last year B.C. has one of the fastest-growing rates of unemployment in Canada. These were, in the economic environment, a number of separate and discreet indicators, yet we have the Premier….

[1445]

All of these have an impact, some of it not direct, but all of these have an impact on government revenue. Yet the Premier and the Finance Minister blithely continued on with and maintained the increasingly hard-to-believe fact that the deficit would only be $495 million maximum.

On April 28 Statistics Canada reported that the number of employment insurance claimants reached
[ Page 215 ]
63,700. That was an 11.6 percent increase in February alone, the second-largest increase of any province. Since October 2008, EI claims in British Columbia have increased by 40 percent. In a number of towns and constituencies across the province, EI claims have, for example, almost tripled in Williams Lake and doubled in Quesnel, Kelowna, Cranbrook, Chilliwack, Powell River and Penticton. These are, again, provided by Statistics Canada.

There were those indications, independent of the reporting of the government and of the Finance Ministry, by independent agencies — credible, reliable, independent agencies — that the economic picture was worsening. For example, the projection on revenue from income tax was, in the February budget, unrealistic, to say the least, given the fact that as unemployment increases, obviously, people don't have full-time jobs, and the amount of income tax they pay declines accordingly. That was not taken into account, and the $495 million persisted.

The Premier mentioned, and he likes to argue along with his suggestion, that the forecast council was what he relied on, omitting the fact that the forecast council asked to come back after January 9 and wasn't invited back. He also likes to talk about the decline in natural resource revenue — in particular, natural gas. Now, predicting the price of natural gas can be perilous. I think of a trader in Calgary, Amaranth investments, that I think lost $600 million or $700 million by betting on natural gas futures.

I don't totally disagree that it's difficult to predict, but it was clear in the spring of this year that the trend was a downward one in terms of the price. This is from Natural Resources Canada: in February 2009 the price per gigajoule was $4.74; in March, $4.57; in April, $3.95; in May, $3.33 per gigajoule; back up slightly in June; and down to $3.21 in July of 2009.

For the most part, that's a pretty consistent trend, a downward trend. Prudence, again, and caution would have suggested that a budget based on a higher price of natural gas was in trouble and that the government wouldn't be able to attain its revenue target for that particular area of revenue.

Again, these are sometimes difficult to predict, but the combination of all of those trends spoke to a substantial decline in government revenue, making the assertion that the deficit — notwithstanding whatever measures were taken to cut government expenditure — would be $495 million, essentially an unachievable fiction.

That's why the forecast council and its members began to change, as the months went on, their predictions for growth downwards, and they….

I am the designated speaker, Madam Speaker.

Interjection.

B. Ralston: Well, I thank the Minister of Aboriginal Affairs for his support for this speech. It's not often I get plaudits from him, but they're graciously received and, I'm sure, graciously extended.

[1450]

Interjection.

B. Ralston: Yes, and convincing, I'm sure, Member.

I'm glad the member is listening so attentively because perhaps he can take that message back to his cabinet colleagues.

Interjections.

B. Ralston: Oh, thanks very much. That's very kind. But I'll ignore the distractions that the members opposite are posing, although they are pleasant ones compared to what I usually receive from them.

What the forecast council began to do was to revise their revenue estimates downwards. So when the Premier said in April and when the Finance Minister continued to support the position that the $495 million was achievable, no credible economist believed that.

Shortly after the election there were newspaper reports. Mr. Finlayson, for example, predicted that the budget deficit would be $2 billion to $3 billion, and in fact, he turned out to be pretty accurate. Mr. Pastrick similarly predicted, shortly after the election, that the budget deficit would be $495 million no more and that it would be substantially greater. There was not quite an expert consensus, because there was a range of opinion, but everyone agreed that the $495 million couldn't be attained, regardless of what expenditure control measures the government took and given just the drastic decline in revenue.

It's simply, I would argue, not credible for the Minister of Finance to assert on June 10 that he could still attain a $495 million deficit — that the budget was something that he was able to attain. I think I have his exact wording here somewhere in my notes. It's a rolling track of quotes, and they're all very different.

On June 10 the Minister of Finance said: "If I were in a position to table the budget today, it would be a deficit of $495 million or less. I am still confident that come September 1, we will be able to deliver on that." Yet this is after being briefed, after the election, of a decline in revenue, at that point, of a billion dollars. And that was a month previous to his statement there.

He now claims that, well, he had the HST in mind and that he was planning to use that. The agreement on the HST…. It's only an agreement to agree. It's not really a contract. It's merely a memorandum of agreement more or less setting out the mutual intentions of both parties.

It was only signed on July 22. So in advance of the signing of the agreement in July yet only about two
[ Page 216 ]
weeks after initiating discussions with the Minister of Finance federally, Mr. Flaherty, the Minister of Finance provincially…. His version of events is that he had a conversation with the federal Minister of Finance around May 25. They ran into each other at the coffee machine at a federal-provincial conference, and he initiated discussions. So within a scant two weeks, he was already booking $1.6 billion on the federal books.

That's a rather astonishing revelation for those who doubt that government can move with great haste and great speed. There, within two weeks of initiating a casual conversation with the Minister of Finance, the provincial minister was already able to rely on $1.6 billion. Who would have dreamed that the government could move so quickly? There are those who are skeptics.

[1455]

I know that Christy Clark, much beloved by members opposite as a former colleague, said on her radio show, in her new incarnation, that there's just no way it could have happened that fast. She did serve with many of the members opposite in the cabinet. She served with this Premier. So I tend to think that she might know what she's talking about. Certainly, she has experience of government. She was a former Deputy Premier, held in very high esteem by members opposite. I'm sure they wouldn't say anything to the contrary even now.

She said that she simply didn't accept that things would move that fast and that the government would have to have known prior to the provincial election that they were embarking on this HST proposal and this measure. Yet the Minister of Finance — I suppose the Speedy Gonzales of Finance ministers — between May 25 and June 10 was already booking $1.6 billion in revenue on the provincial books. Good negotiations, I suppose — very speedy. I'm not sure anyone accepts that that was the chain of events, but perhaps, as the weeks go by, there'll be more detail revealed about just how that came about.

What the minister did say, though, on July 9 — and the ground began to shift once again — at the tabling of the public accounts was that for the first time he wasn't optimistic that a $495 million number was anywhere possible. He claimed that as recently as the third week of June…. So he said in July that even past June 10, so into the third week of June: "I'm still optimistic we will be able to bring in a budget that would reflect a deficit in the range of $495 million. The news we got from the federal Department of Finance June 24, as briefed on the morning of June 25, means I can no longer say that I am that optimistic."

Lo and behold, the minister received advice from the federal Ministry of Finance that corporate income tax revenue had declined. Well now, that was a shocker. That was a shocker. Couldn't have seen that coming. When corporate profits were dropping dramatically along with the stock market, when the recession was beginning to bite deeply, is it any surprise that corporate revenue began to tumble? Is it any surprise whatsoever that as a consequence of corporate revenue falling, corporate tax returns fell as well?

The minister claimed that this came as a revelation to him. He had to be briefed by his officials, and up till then, the third week of June, he hadn't seen that one coming. It was just out of the blue, and that began to change his view that the $495 million was not attainable.

Once again, I'm not sure that there are many informed observers who would say that the fact that corporate revenue declined over the previous three quarters was a big surprise to anyone, but apparently, this was the triggering event for the Minister of Finance. He began to rethink his position that the $495 million was attainable.

Let me quote him exactly: "That one sort of took my breath away — what was happening on corporate income tax revenues for 2008-2009." So it's perhaps a bit of a surprising reaction — hardly a worldly, sophisticated reaction, I would have thought, given what was going on in the broader economy.

The financial newspapers and the financial reports — Bloomberg, the Financial Times, the Wall Street Journal, any of the traditional financial newspapers or information services that are out there — are reporting crashing corporate profits and, the follow-on from that, declining corporate income tax. It's hardly a surprise, but for this minister, it took his breath away. We have to accept that at face value — but a bit of a surprising reaction, I would say.

[1500]

He then began to revise his budget and began to construct the budget — so he claims — that we now see before us here in September, tabled just this week. The centrepiece of that budget is the harmonized sales tax. This minister has said a number of things about the harmonized sales tax and made it a very important part of his budget. It's clear that he has a similar story of sudden, post-election revelation, very much reminiscent of his explanation of the change in the $495 million deficit figure. It only became clear to him in late June, early July that that was changing after, essentially, the whole economic world had turned. He managed to catch up then.

The story of the HST that the government is advancing, particularly the Minister of Finance and the Premier, is a sudden, post-election revelation — that nothing was contemplated. The language that is used — and it's used repeatedly and successively — is: "The HST wasn't on our radar." That's a little bit of a trite metaphor, but nonetheless, it does seem to get repeated by the Minister of Finance and the Premier.

What does "not on our radar" mean? It would be hard to imagine a more ambiguous figure than "not on our radar." Does it mean that it wasn't discussed in cabinet? Does it mean that it wasn't considered at the senior financial level of the Ministry of Finance? That it wasn't considered at Treasury Board? That it wasn't discussed
[ Page 217 ]
between federal Finance officials and provincial Finance officials at the direction of their respective ministers?

I return to Ms. Christy Clark, who said that negotiations of this complexity couldn't have taken place in those two weeks between May 24 and the booking of $1.6 billion on June 10. At least the minister certainly mentally booked that $1.6 billion.

The phrase is "not on the radar," and I would submit that that's a deliberately chosen, ambiguous phrase that really has no meaning. It's simply a bridge to get from one part of an interview to another, or one part of a speech to another, but it doesn't really mean anything.

There are a number of questions that do arise. They'll be addressed, I'm sure, by freedom-of-information requests by journalists, by members of the opposition, and we may get to the bottom of this. But certainly, no one accepts that this sudden, dramatic reversal wasn't something that was contemplated before the election.

Again, it's striking to look at the language of the Premier post-election, "We decided this was the best thing we could do for the economy" — the best thing. Was it included in the economic recovery points in October? No. Was it included in the budget in February? No, absolutely not. Was it included in the Liberal platform in the election? No.

In fact, the members of the Liberal Party and their apparatus, in response to written questions — not casual conversation, as the Finance Minister sometimes has with his deputy, but in written responses to questions from the food and restaurant association — said that…. They were asked directly — the Liberal party: would they implement an HST? And they said no.

They went on not only to say no, but they gave reasons why it wouldn't be a good idea. They said that it would limit provincial autonomy and flexibility in creating tax policy. It would do away with a number of valuable PST exemptions for the public that had been fashioned by governments here. It would do away with those.

[1505]

They also made another commitment in this same response to what the restaurant association asked — that they wouldn't do this without any further consultation. Understandably, given the reaction of the restaurant association when they were utterly and completely betrayed by this government…. They were livid.

Mr. Tostenson made no bones about saying on a radio show the day after the HST was announced on that summer day deep in July that he was a supporter of the government, that he had worked and campaigned for the government, and he felt just sickened and betrayed by the treachery of this government to introduce this measure without consulting him.

The consequences for his industry, of which I'll talk about a little bit more shortly, were things that he was very, very troubled by, yet there are no apologies offered. The minister says that he'll undertake some mitigation measures, but what mitigation measures those might be has not been revealed.

The discussion is ongoing. There's no possibility of any further exemptions, because in the agreement that the provincial government signed with the federal government, the number of exemptions is limited to 5 percent of the total GST tax base, and those exemptions have already been assigned and designated. There are a few of them, but most of it is for motive fuel, for gasoline. There are a few others — books, child car seats, female sanitary products and a few others — but very, very few compared to the long list of exemptions that exist in the present legislation.

There's no possibility for a further exemption for restaurant meals, for example. It's just not possible in the fiscal straitjacket that the government has agreed to by entering into this agreement. The number of exemptions is very, very narrow. They're all taken, and it's done.

For the government to hold out and the Finance Minister to issue the soothing noises that he sometimes does that he'll consult and take these concerns into consideration, there's no way. There's just no possibility of creating any new exemptions in the agreement — just not possible — certainly not any substantial ones, because there's a strict limit to 5 percent of the GST tax base.

The calculation that's been provided, at least provisionally…. The Ministry of Finance hasn't been forthcoming with a lot of these figures. It's already taken out. The maximum allocation to exemptions has already been filled. So that's what the government undertook as part of the centrepiece of this budget.

But I think we have to look a little bit at the history of the public discussion in the rest of the country about HST in order to evaluate this claim that the HST "wasn't on the radar," to use the ambiguous term of the Premier and the Minister of Finance.

The Ontario Premier, Mr. McGuinty, on January 23, 2009, publicly confirmed he was considering moving to the HST. On January 27 the federal Finance Minister brought in a budget and made some mention of HST and the opportunity for ongoing negotiations. He did not mention any province specifically.

On March 10, 2009, the Ontario government signed a memorandum of understanding with the federal government outlining the terms of implementing the HST. On March 26, 2009, the Ontario budget was released, and Premier McGuinty officially announced his intention to bring in the HST.

On March 30 the federal Minister of Finance, Mr. Flaherty, confirms that other provinces have approached him about the HST. Those provinces without HST are Saskatchewan, Manitoba, P.E.I. and British Columbia. It became publicly known that Saskatchewan, Manitoba and P.E.I. said they were not interested, leaving, of course, of that list of four, only British Columbia.

[1510]
[ Page 218 ]

Certainly, there's an indication there. Perhaps this will be revealed, because we have, as the government opposite likes to claim, the most open and transparent government, I think it is, in the history of the galaxy. Maybe it's just in the history of the planet. So these negotiations and their content will be revealed through a freedom-of-information process, and we may get that result sometime next year.

There was an indication of discussion. An approach was made to the federal minister, and then the discussion took place. We have Christy Clark's view that this had to have taken place. The discussion had to have begun before the election. And then we have the election coming along, where the B.C. Liberals said formally: "No way. We're not doing it. It's a bad idea. Here are the reasons why. If we ever have to implement it, of course we'll consult."

There's been more consultation on the issue of cell phones while driving than there has been on bringing in what the Premier likes to call the most important economic measure that we could undertake for the province of British Columbia. There's been more consultation on cell phone use than there has been on this, certainly prior to it being initiated.

The government then decides that they will, out of the blue, drop it, although not until July 23. The agreement is signed on July 22. Mind you, as I've said, the Finance Minister has already mentally booked that $1.6 billion onto the budget, so he doesn't feel the obligation to talk about the deficit.

What is the argument that the government makes about HST to support HST? Because the reasons, contrary to what they said to the restaurant association, are relatively badly supported by the government.

The argument is weakly made. It's as if, despite the height of the rhetoric that the Premier uses, the hard work of convincing other members of the cabinet — or even members of his caucus or members of the public and members of the restaurant association — was never done. That's because it's very, very difficult to make a good argument in favour of the HST, other than its benefits for a couple of the bigger businesses in the province.

When the government came into power in 2002, they did immediately make changes to the PST and eliminated the PST tax on production machinery. I'm just going to turn to the back of the budget here. In 2001, under the social service tax, the government introduced a tax exemption for production machinery and equipment.

What is spoken about as a benefit of this tax is the ability to give an input credit for production inputs, particularly for mining, forestry and construction. Those are the three examples that the Premier has used in his discussion of this issue. Yet back in 2001 production machinery and equipment were exempted from the PST. Presumably, if you're buying mining equipment, you would not be required to pay the PST.

In Budget 2002 that same exemption, the machinery and equipment tax exemption, was expanded to include repair parts. Obviously, it's operating machinery in heavy construction, in forestry — expanded.

[1515]

The estimate of the cost of this measure was about $110 million a year. It's not a trivial amount directed to production machinery and equipment, presumably to provide an economic incentive to invest in production machinery and equipment and to experience some economic benefit from that. Although in the tables in the budget there's a calculation about the total dollar value of the tax foregone — for example, on basic food — there's no calculation of the revenue foregone by this measure from 2001 forward. It can only be estimated to be substantial.

Again, that's part of the flexibility that the government spoke of in responding to the survey of the restaurant association in 2006. Under the social services tax, services were exempted to maintain and modify software. They clarified and expanded eligibility for the machinery and equipment exemption. Again, there's no cost put on that.

The PST had that flexibility. There was tax revenue foregone, but there's no analysis that I've been able to find about its impact on capital formation, on investment in those items on the list that had the tax removed from them. Obviously, there's clearly a choice being made here.

I raise this because we hear from the government: "Well, what's going to happen is that the PST will be wrung out of the cost of products. As a result of that, there will be increased investment in the province, and that will all be to the good, of course."

But given that there's this very expensive measure…. It was undertaken in 2001. One of the very central attributes of the production process, production equipment and machinery — a huge cost in terms of foregone tax. What was the benefit? Where's the analysis? Never heard anything.

One can scour the Ministry of Finance website, the comptroller general website. Nothing shows any of the benefits of that particular foregoing of provincial sales tax revenue, despite that it's specifically targeted at that production machinery and equipment with, obviously, an economic agenda in mind.

I raise that just to say that one has to view the claims of the Premier and the Minister of Finance about the effects of the HST in terms of inducing new investment with skepticism, given that some of these measures, where there's a very direct reduction of tax and no analysis of what took place as a result — whether there will be the claimed benefits or not….

Certainly, when one looks at the justification that's provided for this measure…. The government, in its note in the budget, likes to refer to a study written on
[ Page 219 ]
behalf of the C.D. Howe Institute. I'm looking at page 79 of the budget, in the note on the HST. They refer to a Michael Smart, Lessons in Harmony: What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax.

This is cited with approval. It's really the only intellectual justification that the minister has trotted out, and it's repeated again here in the budget. But when you actually look at the document, it doesn't say what's claimed by either the minister or in the budget document.

The two claims that are made — and they claim support in this particular study — are (1) that prices will go down. That's because the economic theory is that, well, big business will get these benefits. The HST input credits will reduce their costs, and they will pass those cost reductions on in the form of reduced prices. That is considered to be — and I'm sure most would agree — a good thing.

[1520]

What this study reveals is just the opposite. What is said in the study is that the change in prices post-1997 in the maritime provinces as a result of the bringing in of HST was statistically insignificant — in other words, no change in prices.

The only slight decline was completely consistent with the reduction in tax. Newfoundland went in and…. When they joined, combined, the two sales taxes, Newfoundland reduced its provincial sales tax by 5 percent, Nova Scotia reduced its tax by 4 percent, and so did New Brunswick. So there is a real reduction in the provincial component of the tax to put the HST together, and that is the only claim that's made by Mr. Smart — that that appears to coincide with that reduction in tax.

One of the central arguments made by the Minister of Finance, by the Premier, is that it's going to reduce prices. Here's the study. The C.D. Howe Institute is hardly a socialist organization. It's a pro-business organization. Mr. Smart, an economist, prepared this for them in an effort to provide intellectual support for the HST, but what this study reveals is that the change in prices is statistically insignificant. In other words, prices didn't go down in the way that the theory called for.

There's no reason to assume that the same thing wouldn't happen here — absolutely no reason. That's, understandably, why citizens are skeptical about the claim that is made by proponents of the HST, including the government — that it's the best thing the government could do for the economy, that prices will go down and that those will be passed on to consumers. Just no basis for it.

[H. Bloy in the chair.]

Then the other claim that's made is that there's an increase in investment. Once again, this study of the Maritimes doesn't support that conclusion. What the study says is that….

I forgot one point that I wanted to make about the price issue. It's that, indeed, not only did prices not go down, but in the case of clothing and housing, prices went up. So what the conclusion of Mr. Smart in the study is, is that it's what he calls slightly regressive. In other words, it's unfair to those who earn less.

That's in the study. That's what it says. So why would anyone want to support an HST based on a claim that prices will go down when the very document that the Minister of Finance has cited in the budget and trots out in support doesn't support that conclusion?

If I could turn, then, to the issue of investment. Well, you hear the rhetoric. This is the theory. You bring in an HST, and it's going to increase investment.

What this study shows in the Maritimes is that there was a short-run increase in investment, but — and this is an important but — it couldn't be attributed to bringing in the HST. There's offshore oil and gas exploration. There are a number of other things going on in the economy.

A short-run phenomenon. It's basically a one-time thing, to some extent. What he says is: "It is important to emphasize that the increase in investment caused by the HST reform is a short-run phenomenon as firms have acted to adjust to the new higher capital stock that is desired when taxes are lower."

What happens is that when the regime changes, people delay the investment decision, understandably. I'm sure there are investment decisions being delayed now in anticipation that the public won't react in outrage and that the government won't come to its senses and withdraw this legislation. But in the unlikely event that the government is so foolish as to proceed on this perilous course, there are firms that are probably making that calculation. They're not going to invest now. They're going to wait.

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In the middle of a recession the government has provided an incentive to delay investment rather than to encourage it. They'll wait until the tax regime comes into place. They'll make their investments, and that will be the one-time increase, short-run phenomenon that Mr. Smart refers to. They'll make the transition because they'll get a tax benefit by doing it.

Those are the two main arguments that are advanced by the government to bring in this measure. Prices will be lower, and consumers will benefit. No support for that in this study. There will be increased investment, in what Mr. Smart says is a short-run phenomenon, just because people make the investment in order to benefit from the new tax regime, and then it's over.

This is the best economic measure. It's no wonder that the government didn't talk about it in its election platform. It's no wonder that they didn't talk about it in
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their February budget. It's no wonder that they didn't talk about it in their economic points back in October of last year.

It's no wonder because the intellectual justification for it is just not there. We're embarking upon a tax shift from big business to consumers and small business without any demonstration that there will be benefits. The very document, the very institution, C.D. Howe Institute…. Mr. Smart doesn't support that.

One wonders why the government is embarking on it, and I think the answer is in the Minister of Finance's mental calculations made back on June 10. That $1.6 billion is dangling out there. It looks pretty good, it's pretty juicy, and it will assist with the short-term financial difficulties that the government has created for itself, in part, over the last while. That's the main motivation for bringing in this HST.

It's clear that other provinces have reacted in a different way. Mr. McGuinty in Ontario. There's opposition both by the Progressive Conservative Party in Ontario and by the Ontario New Democrats, so it's opposition across the political spectrum, and it's fairly fierce opposition there.

They, as part of the transition, have used the money as transition money, as I think the term implies, and are going to give a thousand-dollar rebate, a transitional rebate, to each family. That's clearly not the case here. The minister has already ruled that out, and it's going to be plowed into the budget in the way that the minister has described.

One wonders why that decision was made, why the minister claims that it was made so rapidly and why he had mentally booked it on the budget against the deficit on June 10. I think the answer is very clear. That seems to be the major incentive for entering into this regime — to turn our tax system upside down for that benefit.

In addition, what happens when the HST regime comes into effect is that a number of provincial sales tax exemptions that were formerly in place disappear. One looks back to the so-called green budget. There was much ballyhoo and many bugle calls about the green budget.

I'm looking through Budget 2008 about the social services tax measures. They were important. They were an integral part of the plan. They were lauded by the minister. They were extolled by the Minister of Environment. These were measures that were really important. "This is part of fighting climate change. All these things are really important." That's why they had to be done, and that's why they were brought in, in the budget in 2008.

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For example, on February 20, 2008, exemptions were brought in. Let's just go through a list of them.

Provide time-limited point-of-sale tax reduction for conventional fuel-efficient vehicles. Exempt Energy Star–qualified residential refrigerators, clothes washers and freezers to March 31, 2010. Exempt energy-efficient residential gas-fired water heaters to December 31, 2009. Exempt production machinery and equipment for local governments for production of power and cogeneration. Expand the exemption for bicycles to include electric power–assisted two- and three-wheel cycles and non-motorized tricycles. Exempt electric motorcycles to March 31, 2011. Reduce tax payable on hydrogen fuel cell buses. Exempt biodiesel fuel or portion of biodiesel for heating. Impose tax on coal and coke except for residential use.

These are measures fashioned here to pursue public policy. Government claimed sincerity about pursuing these important exemptions to incent the purchase of these items to fight climate change — all part of their strategy. Guess what happened to all those exemptions when this agreement was signed and when it comes into effect. They're all gone. They're all gone — just like that.

The minister said in an interview on CHNL: "Well, it's nice to have exemptions, but we won't have them anymore. Now they're gone." The important exemptions, all the high-flying rhetoric — all just wiped away. "Well, too bad. We had those exemptions; now they're gone."

That's the extent of the commitment to these green objectives. They're just gone. Under the HST regime, they can't be brought back. Unless they were negotiated at the outset — which they weren't; none of them were — they're gone. Those important tax exemptions…. On some of these, these are substantial tax incentives.

The basic economic theory is that if you reduce the price, you're going to incent people to purchase them or certainly consider the option. Electric motorcycles, production machinery and equipment for local governments for power production and cogeneration, residential refrigerators — these are Energy Star–qualified residential refrigerators — clothes washers, freezers…. Those are all 600, 700 or 800 bucks. So 7 percent on those is nothing to be sneezed at. All of that — gone. All of that — gone.

That is, I suppose — when one considers it, in looking back on the ballyhooed green budget — really the extent of the hypocrisy of the government at the time about their commitment to green objectives, because these were central.

I remember the minister standing there and talking about them in the most glowing terms. All gone. Nice to have; now we don't have them. They're gone.

They're gone — even the exemption on bicycles, brought in a long time ago by the Social Credit government, in a rather forward-looking move, way back in the '80s. I was there with the Leader of the Opposition at a bicycle store where the owner, not too long ago, was expressing real concern about the impact that taking the PST exemption away from bicycles was going to have on sales not only of bicycles but of the subsidiary paraphernalia that cyclists need and like to use as part of their equipping themselves to ride a bicycle.
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Some of these bicycles — the newer ones — are expensive, to my way of thinking. Some of them can be as costly as a couple of thousand dollars. Again, an exemption from PST on those items…. It's a substantial increase in the cost.

One wonders: where were the studies? Where was the analysis? Where was the thought? Where was the discussion? Where was the consultation with any of this, with environmental groups — indeed with the climate change secretariat? You know, we had heard about that for a few years, until the Premier's attention got diverted elsewhere.

Where was the analysis that went into the impact of this measure on all those measures that were so important and brought into legislation just in 2008 — a scant 16 or 17 months ago? Where's the analysis? Have we seen it? Is it forthcoming? No, of course not. Nothing has been done. Just a snap of the fingers. As the minister says, there were exemptions. "They were nice to have; now we don't have them." That's it.

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Is this the best way to make public policy? Of course not. Is this a reason why the HST is so unpopular with this particular segment of the public? Of course it is; of course it is. I have yet to hear a justification beyond that back-of-the-hand dismissal from the minister. "Nice to have exemptions; now we don't — too bad." No one on that side of the House has stood up to justify that change.

Will it create more jobs at bicycle stores? Will it increase cycle usage and purchase? Well, I doubt it. I doubt it. But apparently the government…. That was then, and this is now, and now it's the best economic measure in the history of the province — the best thing we can do at this time. "We've got to jam it through. People may not like it, but that's tough. It's just hard medicine. It's like taking cough medicine; it's good for you. You just don't understand." That seems to be the attitude.

There are a number of other impacts of the HST that don't appear to have been contemplated. The minister said in question period a couple of days ago: "Just wait until the budget. We'll have tables. We'll have tables there. We'll explain the impact of this measure on ordinary families."

Well, you can flip through the budget. You can flip through the supporting documents. There's nothing there. The ministry and the minister…. Certainly, the minister has talked about the benefits to construction. I believe $880 million is the number that's being used. He's talked about the benefits to forestry. There's a number attached to that. He's talked about the benefit to mining. There's a number attached to that.

But the impact on the rest of us — the ordinary citizens of British Columbia — promised by the minister…. That's what he said here: "Look for it; there'll be tables in the budget. Don't worry about it; just look."

They're not there. In fact, today in The Vancouver Sun on the front page of the paper, Craig McInnes has an article just about that very fact. So it has not gone unremarked. It's not something that was managed to be slid by. It has been noticed and commented upon, and it's really quite shocking.

It's indicative of the attitude of this government. "Well, we lined up some of the big business supporters; they came out on day one and said they supported it. But you, the public — we'll get around to telling you maybe in the budget, but not yet. Maybe sometime in — I don't know; later on — October, November. Maybe we will never tell you."

But that hasn't stopped other people from making a calculation of the impact of the HST on the average family, and they're circulating by e-mail, on Facebook, through the Internet, in newspapers, flowing into constituency offices. People are looking and examining their budgets and calculating the impact on their budgets. How much are they going to have to pay? Estimates seem to be in the range of $1,500 to $2,000 a year for the average family.

But let's hear from the government. The minister promised tables but didn't deliver them — really a rather shocking attitude on behalf of the public that he's supposed to serve. I mean, understandably, business wants to make the calculation, because they're going to get some HST input tax credits. They're going to get those on their bottom line. But what about the rest of us?

That really shows the priority, and it shows what motivated this change. Those calculations were made. What it means for the rest of us — less of a problem. We should just understand that it's good for us, and we should be quiet and just take our lumps. I think that seems to be the attitude. We're not entitled to know.

The minister isn't going to provide the information through his officials. He speaks very highly of his officials, and I share his estimation of Ministry of Finance officials. I'm sure they're quite capable of producing those tables. Clearly, they haven't been directed to do that and to release them.

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So people will make their own calculation, understandably. And when it's going to pile thousands of dollars onto family budgets, when it's going to impact industries like the tourism industry…. We've heard suggestions from them about the impact on their industry.

We've heard from, for example, homebuilders. Peter Simpson, CEO of the Greater Vancouver Home Builders' Association, said: "The last thing we need right now is another impediment to home buyers." So the home-building industry is very troubled by this — no consultation and its impact upon their industry.

The Canadian Restaurant and Foodservices Association. I have a copy of a slide presentation, and they set it out here. "The problem with harmonization.
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The significant tax increase caused by harmonizing the PST and the GST in British Columbia will hurt restaurant operators, their customers and their employees. Harmonizing the GST and PST will increase the tax on restaurant meals from 5 percent to 12 percent. It will result in an annual loss of sales of $750 million, or nearly $50,000 a year for the average restaurant."

They point out that the employment numbers they provide are substantial. It's a $10 billion industry — 5 percent of British Columbia's GDP; 173,200 jobs, one of the largest employers in B.C. — mostly small independent businesses; 69 independents, 31 percent chain. They have reason to make this calculation because they were hurt by the impact of the GST in 1991, and sales declined in 1991 — 9.5 percent with the impact of the GST.

So they are expecting a decline in their revenue. They're worried. They're just coming out of recession. They're worried about job loss. They're worried about the impact on their business. The minister has issued some cooing noises but done nothing for them and really can't. There's a legislative straitjacket. The agreement is signed. It's over.

It's "dislike it and lump it," I guess. It's the minister's approach. "Just tough it out. It will be character-building for you. You'll get through it. It won't be as bad as you think." That's basically his attitude towards one of the largest employers in British Columbia — 5 percent of the GDP. That's the attitude.

Understandably, that's caused real consternation in homebuilding, in the restaurant industry. I don't think I should leave this area without again responding to the Minister of Finance where he says…. Well, in order to enjoy what he calls fine dining, you have to have a job.

He somehow wants to associate restaurant meals with a white tablecloth, violin music and candlelight, but for most people, dining at restaurants — and that's a part of the restaurant industry…. Eating food out of the house at Tim Hortons or a fast food location is an essential part of their daily routine — whether it's working lunches in food courts or fast food restaurants, whether it's snacks after school, whether it's taking the kids out to one of the chain restaurants as a treat. All of those are impacted.

That's not really what I would call fine dining. I would call that an integrated part of people's daily routine. All of those purchases of meals will be impacted by the HST, and they'll suffer the same consequences. So for the minister to kind of dismiss it and use the term "fine dining" as though it were some kind of luxury for the top end of the economic stratum, I don't think really does justice to the wide service that the restaurant and food service industry does for most British Columbians.

The trend has been clearly, for people over the last several decades, to eat fewer meals at home, fewer meals prepared by themselves and their families, and to eat meals elsewhere. So this will impact very widely. That's why this is such an important sector of the economy, and that's why it is such a big employer.

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Again, there's no question that this is going to have a huge impact on this industry. The minister has nothing to offer — no studies done in advance. The restaurant industry is bracing itself for a real hit. That's regrettable, but it doesn't seem to be something that the government is going to be able or willing to do anything about.

These are just some of the reactions from associations, families, community groups across the province — whether it's the practitioners of traditional Chinese medicine or the Chinese chefs association. I've attended some meetings with those people.

Massage therapists, hairdressers, barbers — anyone who provides a service is going to be impacted by this and hasn't been consulted, doesn't like the way in which it was introduced — sprung on them in July — and doesn't accept the government's argument that prices will be lower and investment will go up. There's not even support in the documents cited by the government to back that up. So why should they believe it? And in fact, they don't.

This is a hugely unpopular measure. I hope that the members of the government and the private members, as well, reflect upon this and raise this in their caucus. I'm sure there are some vigorous discussions, I hope, in the government caucus about this measure — the wisdom of doing it, the way it's been introduced and the political consequences that it's going to have.

I fear that some of those members opposite in their private moments are thinking that they're going to reap the whirlwind when the voters get a chance to express their opinion on this matter. There are mechanisms in our constitutional apparatus — whether it's initiative or whether it's recall — and we'll see what comes of it. Certainly, public opposition continues to grow across the province, and we'll see what takes place.

The government — for example, in the case of the Coquihalla Highway — decided it was going to sell it off back in 2003. Public opposition mounted to a fever pitch, particularly in the Kamloops constituencies where opposition rose to the levels of the public opposition that's indicated for this measure. The government, right up until the day they did it, said they wouldn't do it, and then they withdrew.

There's a chance to rethink this. There's a chance to do something different. Although the money is put notionally into the budget, the Auditor General has said that until the contingent event, which is required — the passing of legislation — it can't be formally on the books of the government. So there's an opportunity to revisit the deal, not to take the money and to think of other, more sensible policies than this one.

It seems that for overthrowing the system of the PST exemptions that have been developed for public policy
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reasons here, for the impact on small business, for the impact on consumers, for the impact on school boards and health institutions, the strata associations — all of whom will have to pay increased costs as a result of the HST — there's a chance to rethink this and to come back with a different measure.

I'm sure there are members opposite that are new members who are surprised by the actions of the government. They weren't party to what was going on before the election, likely, nor after. It was sprung upon them probably, I understand, with a couple of hours' notice in July. So some of them have reason to be resentful, and I encourage them to speak up.

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If they can't see their way to speaking up here in the Legislature or publicly, speak up inside their caucus and indicate to and tell the Premier, tell the Minister of Finance what people in their riding are saying. I know what they're telling me, those people who are in the ridings of members opposite, and they don't support the government on this. Most people don't support the government.

The numbers of opposition are very, very high indeed. There are a few of the traditional political supporters of the government — the Business Council of British Columbia — and others who are representing the economic interests of their members, understandably. But for the most part, people in the ridings of the members opposite don't support this measure.

So I urge them to listen to their constituents, to speak up internally if they don't feel they can risk the wrath of the Premier here in the Legislature or the internal discipline that may follow if they speak out publicly. But there is a chance to do this, to change this.

You only have to look out publicly at the opposition that's growing, whether it's on what's considered the traditional Left or more considered to be the traditional Right. Opposition is growing. It's widespread. It's politically diverse. It's geographically diverse, and it continues to grow.

That's the centrepiece of this budget, and that policy is not only likely to be not the best economic measure for the province but likely to be a very, very dismal policy failure which will place additional cost burdens on ordinary families for nothing in return. That's what I think the calculation is by most British Columbians at this point and will continue to be, because the government isn't able to support it.

I want to turn, in closing, to a few other measures in the budget that I want to comment on.

The numbers in the Ministry of Children and Families. One of the ways in which the budget allocation for the Ministry of Children and Families has been calculated is based on a reduction of the number of children in care.

The child and youth advocate, who is an independent officer of the Legislature, has expressed her independent belief — and she's an officer of the Legislature, entitled to and expected to speak out on these matters — that the budget that's allocated there, the artificial — what she regards as the artificial — suppressing of the numbers in care…. In order to calculate the budget, the ministry has reduced the anticipated number of children in care.

She disagrees with that, and certainly at a time of economic stress, it's her view that it's unlikely that numbers will go down. In fact, numbers are likely to go up. So the recommendation and the budget number for that particular ministry is inadequate and likely to cause real problems to the child and youth system in the province, of which she has intimate knowledge and deep concern for.

I recommend to the minister who's responsible for that particular budget and to the government to consider reviewing. I know there's been a recent change in one measure that the government took in terms of the three-year grants. Some money was just found, I think, as recently as today. I urge the government to reconsider that particular measure.

The other thing that the children and youth advocate has focused upon — and, again, this is in pursuit of her mandate as the child and youth officer — is the introduction of the all-day kindergarten. While it's something that is a good policy, what she's expressed a concern about and school boards have expressed a concern about — and I expect that some of my colleagues here in the Legislature will also speak about this matter — is that the budget for implementation of this measure isn't adequate, and the budget to actually bring it in across the province is totally inadequate as well.

When the Minister of Finance has difficulty predicting the deficit between June 10 and September 1, and he's out by a magnitude of 5.5 times, it's probably not surprising that there is skepticism about the ability of the government to fulfil that commitment that is set out in the budget.

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Certainly, knowledgable people are concerned about what's taking place there. In order for that to come about, there'll have to be a re-evaluation of the budget that's allocated for that.

If I might begin to conclude, an objective and careful review of this budget shows that it's a measure of the degree to which this government is fiscally incompetent and has set out purposefully to mislead the public as to the real financial state of the province. That's what the budget before us represents. The commitment made in the election campaign of a deficit of $495 million was a totally hollow and false one, and this budget proves that.

The commitment to protect health care and education services is not something that is being followed through on either. There's not a single increase between February and this budget in allocations to the health authorities.
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There will be surgeries that will be cancelled, and health authorities will be forced to bring in nominally balanced budgets.

But everyone recognizes that the reality will be that they'll continue to run deficits because they can't meet their public commitments to the kind of care that people deserve in this province within the budgets that are being offered by the government in this budget.

I want to conclude by urging my colleagues to vote against this budget. It's the wrong budget for British Columbia at a time when we're in a recession and beginning to emerge from it. For a government to come forward with a new, regressive tax and an increase to MSP premiums…. That's the best the government has to offer. I'm sure that the citizens of British Columbia will join us in decisively and emphatically rejecting this budget and the government that brings it before this Legislature.

Hon. I. Black: It is an honour for me to stand before the House today and offer my unequivocal support for Budget 2009-2010.

Let me start on a few personal notes. First, this session marks the beginning of yet another chapter in this occupation of being an MLA and, by my good fortune, a minister of the government. It is an honour to have this role. I would not be able to do this without the support of my family, and to them I offer extraordinary thanks.

It was when I was dating my university sweetheart, who against most better judgment later became my wife, that I explained to her that someday I may wish to go into politics. For both of us it was a bit of a surprise that it happened five years ago — that particular conversation in terms of: "Honey, I have an idea." Indeed, I thought I would be probably about 15 years older than I am now, and I certainly didn't think I'd have three children under the age of five at the time. But I did. Those were our circumstances.

Nonetheless, the work of this role, the work of this House, irrespective of the party that you belong to, is crucial work. I believe it's crucial for our respective communities. It's crucial for the work of the people of B.C. Despite the punishing lifestyle of this job and the time away from home, for reasons that still confound me I have the undying support of my children Thomas, Jordan and Danielle, and I am grateful that they have afforded me the honour of continuing to do this job.

The election most recent was a tough one for me. I had an interesting — exciting but interesting — decision to make about which riding I should defend. The former riding of Port Moody–Westwood was the third largest in the province. I represented over 72,000 people. Our laws say it should be between 50,000 and 55,000. It was the fastest-growing riding in this great province. So it was no surprise to me that the electoral boundaries commissioner decided that my riding should, for all intents and purposes, be cut in half.

I made the decision to compete for the honour of serving the people of Port Moody–Coquitlam, and I'm so pleased that they decided to allow me to return to this House. But I could not have done that without the help of some extraordinary people — some of whom were left behind, as I put it, in the other riding, the new riding that was created, of Coquitlam–Burke Mountain.

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I am going to rattle very quickly through a long list of names. They have been extraordinarily supportive of me through the years, and I will forever be in their debt — people like Wendy Cooper, Guenter Stahl, and Eileen and Gerry Shinkewski.

Then, on my new team, a team that grew into such an extraordinary force of support during the election, are people like Chris Barry and Dave Bassett, whose counsel and friendship I depend on, on a daily basis; Ann Kitching; Peggy Littlejohn; John and Gaye Northey; Ken Juvik; and Lee Vishloff, who wore out a pair of shoes with me in Anmore and Belcarra.

I think of Don and Margaret Logie and the laughs we shared on the doorstep and of Sen. Yonah Martin, who gave up incredible time to spend some time introducing me to many of her constituents and friends in her area. I think of Dr. Jim Moore; Jim and Connie Fish; Allan Lamb; Al Ordge; my extraordinary youth team and the under-35 crowd — Ross and Lynne Murray, Patricia and Terry Pepin, Lorraine Davidson; and of course, my E-day chair, Kareem Allam; and my incredible campaign manager, Joan Dick. We also had a volunteer who came out pretty much every day named Louise Pitre, and I would be remiss if I did not take this opportunity to mention her as well.

They could not have banged on more doors, waved at more cars, handed out more brochures. We outperformed expectations, and I thank them from the bottom of my heart.

I would also, like every member of this House, be lost if I did not have two incredibly capable individuals making me look good in the community, and in both the opposition and government ranks there would be agreement that that's probably not an easy job. I have two amazing constituency assistants, Linda Kingsbury and Vicky Collins. Their service and loyalty to our community is extraordinary, and I've come to value their friendship in a great, great way.

This is an extraordinary budget in extraordinary times. It is important to put this budget in the context of the steps we have taken in the past, the global economy of today, and our hopes and plans for the future. These past steps are allowing us today to protect the vital services that British Columbians value so highly.

The world is a very, very different place today than where it was a short year ago, and our province has been buffeted by the same storm that has blown through every economy in every country around the planet. The
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world economy has shrunk. The global recession has been nasty, and it has been deep. It has been the worst since the 1930s.

The U.S. economy is smaller by nearly 4 percent, Europe's economy is smaller by almost 5 percent, and Japan's economy is smaller by almost 6 percent. These are not just our friends; they're our customers.

The cold statistics translate into struggling businesses around the globe and, most certainly, here in British Columbia — lost jobs and hardships for families, unfortunately, including families right here in B.C. For every government around the globe it has meant a struggle to preserve public services at a time of dropping revenues.

Now, in British Columbia we are not immune to this. A slowing economy means less revenue for governments. We are facing a loss of $2 billion in revenues this year, and that is when you take into account the fact that the independent economists to whom we turn for independent and objective advice through the years have given us predictable numbers to which we had applied even more conservative estimates. We actually lowered them, in some cases, by up to 20 percent.

I would use as an example the oil and gas revenue dependency that British Columbia has. For those watching at home, oil and gas have traded on the open markets. When gas is bought and sold, the government of British Columbia gets a royalty to deliver services to its citizens. It's priced in what they call gigajoules, or the unit of measurement, rather, is dollars per gigajoule. We have seen the price of natural gas go from $9.33 in June of '08 to $5.87 in February of '09 to $2.05 most recently.

The reason this matters to all of us in this room and all of the people we serve is that for every dollar of change in the price of natural gas, we get or forgo $300 million in government revenues. So from natural gas alone, in a short number of months we have seen our revenues drop by almost $500 million.

We've seen our personal and corporate taxes drop by almost a billion, other natural resources revenues drop by $560 million and other taxes that we were expecting disappear to the tune of $268 million.

Now, to put B.C.'s financial challenge in perspective, let us turn to our cousins to the south, the United States. They are facing a budget deficit of $1.6 trillion. I don't really understand the "t" word all that well, I must admit. That is $1,600 billion. It's a staggering number.

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Our federal government alone is forecasting a deficit of $50 billion. Ontario, in their provincial budget, separate from the federal, is forecasting a deficit of $18.5 billion. Our once mighty — and the envy of the country for this — debt-free Alberta is now grappling with a 2009-2010 deficit of nearly $7 billion. Here at home, despite a more diversified economy and the competitive advantages that we've built in the last eight years and that are the envy of others, our province, too, is caught in that downfall.

On the horizon we've got some good news. Our B.C. economy is expected to grow by nearly 2 percent next year. That will lead the nation and, frankly, most western economies, but this year it is still expected to shrink by 2.9 percent.

So we're faced with a deficit. Why? There are three reasons. The first is what I just mentioned. We are down $2 billion in expected government revenues from just a year ago. Second, the commodity prices — oil, gas, forestry — upon which we depend so fiercely, are down, and there's no sign of them coming back to a meaningful level any time soon. Third, the vital public services that we depend on as British Columbians have got increased demand placed upon them and increased funding put towards them by government, despite the facts that our revenues are down and commodity prices are not likely to help us in the near future.

That is the reality of today. But we are far better able to deal with this reality, thanks to the prudent choices that we made in budgets of days gone by. If it wasn't for our achievements in restoring sound fiscal management to the province, our prospects today would be much, much worse.

Imagine, just for a moment, if we had carried on with the tax-and-spend fiscal policies that we inherited when we took government in 2001, that drove this province to the brink during the last decade. During the largest expansion of human wealth in history, our unemployment levels were higher during that period than they are right now, going through the biggest disruption or devastation since the Great Depression of the 1930s.

The disposable income of the citizens of this province. When around the rest of the globe it was growing, our disposable income in British Columbia shrank by over $1,700. We gave more than $1,700 in tax relief to the average British Columbian by the fifth year of our mandate.

Imagine if we had not made the tough decisions and brought in five surplus budgets in a row. Imagine if we had not made the largest annual debt repayment in British Columbia's history and if we had not achieved our top-notch credit rating. Where would we be today if we had not cut taxes to leave more money in people's pockets to save or to spend and if we'd not made British Columbia a better place to do business and instead, as had been happening, drove businesses away?

What if we had listened to all of those who said: "Forget the debt; spend it all"? What if we had not spent eight years filling in the hole of credit card debt dug by the NDP in the previous decade? If we had listened to those who forgot our responsibility to today's taxpayers or to tomorrow's generations, where would we be today, Mr. Speaker? Well, I'll tell you.

We would not be in the position to produce a budget as strong as the one that my colleague the Minister of
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Finance delivered yesterday. Let there be no doubt. There is no Finance Minister in the country of Canada who would not pine for the opportunity to have the economic situation that British Columbia has in these difficult times.

Whether his provincial counterparts are of an NDP persuasion, Liberal or Conservative, there is no Finance Minister in this great country of ours who wouldn't pine for the opportunity to deliver to this House the budget that was brought down just the other day — a budget that protects the vital public services, strengthens the economy and helps prepare us for the economic upturn that is coming our way. We are glad for the good fortune of having our economic situation relative to any other in North America, we are glad for this budget, and we are very glad for our Finance Minister.

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This budget readies us for a new decade of growth and prosperity. In short, this budget carries on our tradition of prudent fiscal management, a tradition that we established in 2001 and have maintained all along, a tradition which today is giving us the strength and the foundation and the vision to see us through these challenging times.

It gives us clarity and purpose so that we can stand and say, after more than 120 tax reduction measures, that we will not raise taxes; so that we can stand and say we will not cut the firefighting budget, especially in this historically busy year on the fire lines, where the $60 million budget is likely to require the fully allocated $409 million budget that is in this particular document.

We can say that we will not reduce access to unemployment and assistance programs. In fact, we're spending more, reflecting the increased demands in these crucial areas that occur during a difficult economic period.

After eight consecutive increases under this government, we can stand and say that we will not reduce K-to-12 funding. In fact, from the $3.7 billion budget which existed in 2001 it will rise to over $4.6 billion by 2009-2010. It is seeing a year-over-year increase of $84 million in operating grants alone. With 53,000 fewer students to educate in our system, there's over $873 million more to spend than there was when we formed government.

After eight years of consecutive increases under this government, we will not be reducing funding for the Ministry of Health Services. From a budget of around $8 billion in 2001 we are now focusing on a budget that will approach $15.7 billion by the end of 2011 and 2012. That is a three-year lift of over $4.7 billion.

Now, the opposition is welcome to continue to call $8 billion to $16 billion a cut. They're welcome to call an increase of $8 billion, doubling it effectively, a cut. However, I have a six-year-old, an eight-year-old and a ten-year-old who would suggest — politely, I would hope — that there's a flaw in that arithmetic.

We will continue to invest in the infrastructure — the roads, the schools, health care facilities and other projects — that will create up to 88,000 jobs in British Columbia, jobs in communities throughout B.C. And we will continue to support small business, the engine that drives the B.C. economy. I am very, very proud to be the minister responsible for small business.

We're going to be doing this by increasing the small business tax threshold from $400,000 to half a million. That's going to save small business a total of $20 million a year, and it's the highest threshold in the country. We'll continue to eliminate the small business income tax, and by April 2012 it will be gone.

Now, why would we do these things? Well, for one, we know that this provides the incentive to the men and the women and the families in British Columbia that take the risks, that start the businesses or invest in their businesses and purchase goods and create jobs.

We do these things because we're committed to a stronger and a more competitive economy. We do these things because we know that with this investment and with a competitive and streamlined business environment, we will create jobs.

Therein lies the key to balancing our books once again. Therein lies the key to continuing to provide the public services that British Columbia depends on.

Now, after listening to a couple of the members opposite last week, I have to tell you that I am astonished. I am flabbergasted, actually. I find it incredible that the opposition is suddenly scrambling to try to speak for business in British Columbia.

Where have they been for eight years? Last I checked, the opposition was in favour of raising their taxes, taking their payroll up $450 million a year, and applying a chokehold to small business under the suffocating grip of re-regulation.

Now, last Thursday in this House, I listened to the new member — and welcome him to the House — for Cowichan Valley…

Deputy Speaker: Through the Chair, please, speaker.

Hon. I. Black: Through the Chair.

…rail against business. "We can't have the corporatization of B.C.," or something, he said. In the next breath he said: "However, I like corporations, and we've got to have them." Then he lamented — and to his point, I would give him credit on this — very appropriately about the challenges that are faced by forestry communities and, indeed, the forestry industry itself.

But herein lies the first of many disconnects. When we announced the single biggest improvement we could make for business in British Columbia, an improvement that will save the forestry industry $140 million, that will help the industry create jobs in these communities, what happens? The member and his colleagues object.

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Now, the coastal mills are currently at 50 percent capacity, and the logging operations are at about 25 percent. It seems to me that $140 million is going to mean more shifts at those mills that are opened and that closed mills have a better chance of reopening.

They object to helping British Columbia businesses compete not only here in Canada relative to provinces like Ontario but also in the rest of the world. They seem to object to all the things that give us the best shot at securing the better paid, long-term, stable jobs that will keep our economy and our communities vibrant and will keep them strong.

Now, they've made it clear that they object to the benefits related to the HST, but let's put aside for just a moment the benefits of it. Let's put aside the fact that the harmonized sales tax for British Columbia is going to be the lowest in the country, put aside the rebates for the charities and the municipalities and the new houses, put aside the $1.6 billion of transitional assistance that comes along with this program, put aside the need to be competitive both within our country and around the world and put aside the positioning that this gives us for the recovery ahead.

The shortcoming of the debate to date, with respect, both within the media and within this House, is the challenge associated with the misinformation and, in many cases, misunderstanding around what happens when you change tax regimes. To be fair to everyone concerned, it can be confusing when you make a change in a tax regime. But there's also an enormous logical disconnect as well.

I happened to be speaking with a lot of my constituents on this. I've had a steady stream of conversations with constituents — with business owners, seniors and parents — where they've asked me: "Is the HST on medical and dental services?" No, it's not. "Is it on child care services?" No, it's not. "Is it on basic groceries and prescription drugs and medical and assistive devices?" No, it's not. "Long-term residential care?" No, it's not.

There's also, because of the process of creating the HST that's right for B.C., an opportunity, frankly, that did not exist before. We have the opportunity for exemptions. In Ontario, the HST — the 8 percent, not the 7 percent component that British Columbia has — will actually apply to gasoline and to all motor fuels. Not in British Columbia. It's exempt from that. It's exempt from books and children's-sized clothing and footwear, diapers and feminine hygiene products, and something that's very near and dear to my heart because of my history on the topic — children's car seats and booster seats.

There's also related relief on the HST file for low-income tax credits, as well as the fact that we're moving the basic personal income tax credit to $11,000. Perhaps most pointedly, especially for our communities up north, provincial rebates will be provided for residential energy.

The opposition has opposed almost everything we've accomplished on behalf of business, big and small. They've opposed our measures to keep British Columbians working and making their lives better, and they will no doubt object to the budget — a budget that increases the Ministry of Health Services funding by $4.6 billion.

Let me talk about this logical disconnect, for a moment, in this whole HST debate. Who is it that put in place over 120 tax reduction measures in British Columbia? We did. Who opposed it? The opposition. Who was it that put in place a 25 percent tax reduction in the first day of our eight-plus-year mandate? It was the government. Who opposed that? The opposition.

Who raised to 300,000 people the number of British Columbians who don't even pay income tax anymore in British Columbia? We did. Who was against it? The opposition. Who lowered the taxes in B.C. to the lowest in the country for anybody earning up to what was then $116,000 but is now $118,000? The government. And who opposed it? The opposition.

Doing a logical check for a moment, the values of our government with respect to low taxes have not changed. Our belief and our passion and our value for the fact that the HST will be good for taxpayers once it is implemented, good for the businesses and the jobs that it creates and good for the economy of British Columbia and that, whether you are a young person or an old person or a family in British Columbia, this is the right thing for our long-term competitiveness, to keep our employees in the province and fully employed…. The government believes in that, and the government stands by it, and that is why it is the centrepiece of this budget.

We all recognize that no budget is one-size-fits-all. To spend more on a program, a government must cut spending somewhere else, increase its deficit or raise taxes. Within that framework, difficult decisions must be made. We increased funding to caseload pressures that exist for our crucial social services safety net, for heat shelters and for full-day kindergarten — a promise of this government. Nonetheless, many of those difficult decisions were around discretionary funding, and that was certainly a very difficult decision to make.

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I fully understand the disappointment of some of these groups because I represent the City of the Arts in Port Moody. I know the value of their work, and I know the richness they bring to the culture of our communities. I was so proud to advocate for and then celebrate with them the $150 million B.C. endowment fund that still exists in addition to the 17 percent increase in that funding that's taken place since we took government. Nonetheless, I am meeting with my representatives from the arts groups in my constituency later this week to hear their concerns.

On the whole, I think British Columbians understand why we've set our priorities as we have, given our financial situation. Regardless, it is because we want to support these groups and that we are determined to make choices today that will put us back into balanced budgets in the future. As we did in 2001, we are committed to fiscal discipline now in order that British Columbians will enjoy more choices tomorrow.

I support this budget because I know it supports the people of my constituency of Port Moody–Coquitlam. I'm very proud to be their representative, and I'm proud of what our partnerships with the communities of Port Moody, Anmore, Belcarra and Coquitlam have accomplished — the parks, the roads, policing, pools, ice rinks.

I look at the investment more recently of over $1.3 million in public safety in sustainable futures announced earlier this year. I look at the $211 million invested in Coquitlam schools. In particular, in that number is $50 million of which I am particularly proud, because it involved a remarkable group of parents who worked with me, who worked with the school board staff, who worked with the village of Anmore and the city of Port Moody and made a very difficult project get off the ground and get funded in the creation of the Heritage Woods middle school.

I would be remiss if I didn't acknowledge Mark Sekela and Deanna Jones, two remarkable parents in our community who are true leaders and who made a huge difference on that project.

This is a budget that moves British Columbia in the right direction. I have long held the belief that it is the job of government to set a foundation, to remove barriers, to respond to and issue the call to arms to its people, to empower its citizens to achieve prosperity for themselves and, indeed, for their family.

This budget deals head-on with the greatest economic crisis in decades. It protects the vital services for all British Columbians. It invests in job creation and in economic development, and because it places the confidence in the skill and the will of our people to rise to the many opportunities that lie ahead, this budget receives my full support. I urge all members to follow suit.

Deputy Speaker: May I remind all members to show respect for the speaker and allow them to make their presentation.

L. Popham: A vision without action is a daydream. Action without vision is a nightmare.

These are interesting times we live in. When I think about our challenges as a province, as a country and as a planet, I feel a sense of urgency that never leaves my mind for a second when contemplating solutions.

One thing I know is this. It's a time to be brave as politicians, a time to think about our collective vision and to be progressive. This sense of urgency is not unfounded as there are prompts all around us — pine beetle infestation, drought, weather pattern changes and crop failures. All the signs are there, if we take care to notice.

The debate on the reality of climate change should be over. Climate change is a fact of life for us, but there seems to be something going on at the provincial level with regards to climate change politics.

Climate change is not here for political advantage, but it seems that climate change is being used like a pawn in a game that fails to recognize that the consequences are catastrophic.

I believe in a sustainable province and that we have what it takes to survive and to adapt to the changes we will undoubtedly see. My choice to run as a New Democrat was made because I know that my personal values and beliefs and vision will be given a chance to grow, develop and strengthen as conversations unfold.

In tribute to Saanich South, I will do my best to bring a fair-minded attitude into this House, but I will also fight hard for the things that are critical.

Being elected on May 12 was a gift from the constituents of Saanich South, and it's a responsibility that I can't take lightly. The incredible weight of this responsibility fell on my shoulders soon after May 12, and it will sit there as a reminder of the privilege I've been given as I make my way through the next four years. My sense of responsibility is strong, and it will guide my decision-making.

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I have lived in British Columbia most of my life, and I have lived in Saanich South for 13 years. I have been working hard in our community and have spanned my commitment and dedication across urban and rural issues. I come into provincial politics with the background, the passion and the energy to make sure we don't lose what we value so dearly.

Saanich South is an urban and rural constituency, and our residents have a keen appreciation for the quality of life. Over and over during the election, at many of the 6,500 doors I knocked on, I heard what quality of life means in Saanich South, and I wasn't surprised. It means not taking anything for granted when making decisions, and it means not thinking with a silo mentality. Our environment, our education, our health care, our arts and culture, our agriculture, our oceans and our sense of community — that's what's important to Saanich South.
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We're at a time when we can't make decisions independently of one another. We can't make decisions regarding education funding without considering the effects it will have on our future economy. We can't make decisions about zero-emissions transportation infrastructure or lack of it without considering climate change. We can't make agricultural policy decisions and food-standard policy without considering the effects on the future costs to health care. Everything is connected in some way.

As the MLA for Saanich South, I will work as hard as I can to protect our quality of life and to secure our children's future. That's the commitment I made.

A Saanich South resident and respected climate change expert, Guy Dauncey, warns us that the reports we hear, the statistics conveyed and the penalties we will pay for being too slow to respond are underestimated. We are facing serious societal-changing outcomes. But Guy Dauncey also gives us hope. He tells us that there are things we can do every day that will help us fight climate change and to adapt as well as possible to the changes coming our way. But those everyday actions are not going to be enough, he adds. We need to see some big moves.

[C. Trevena in the chair.]

As a newly elected MLA, I am wondering. Are we brave enough as members of the Legislative Assembly of British Columbia to look partisan politics in the eye and ask ourselves this: are we all making decisions for the right reasons? Do we have the capacity as leaders to make choices that will enable our fight against climate change? Are we willing to consider the bigger picture and guide our province into a place where we will be able to contend with the changes to come? Are we committed to finding solutions and supporting legislation that focuses on sustainability every single time?

I have been given the role of Agriculture and Lands critic. This appointment was one that I had been hoping for from the first time I entertained the idea of becoming an MLA. Once the appointment had been made, I felt my sense of determination galvanize. I realized quickly that my passion for cooking, local food, local food production and sustainability had a new home.

It's a critical time for food production in British Columbia. Never has there been a time when food and politics have so dangerously crossed paths. This is a time when we should be embracing local food production, should be encouraging local growers, building up our productive land stock.

The possibilities with this portfolio seemed very hopeful to me, because for the first time in a long time, we have public awareness and public support for local food production. But then came the throne speech.

It was a grand day. I took my seat in the Legislature for the first time last Tuesday. I waited in anticipation and watched with great interest as the proceedings began. And then, there it was. It was right in the throne speech. The cupboard is bare. It was in reference to our provincial coffers, but to think that the government would use a food reference is interesting, as this is the government who has beaten the budget for agriculture into the ground and continues with this current budget.

Using an analogy to food is quite appropriate, because when there's no food, nothing else really matters. The difference between an empty coffer and an empty cupboard is this: if our food supply is threatened, we don't have the option to run a deficit for four years.

Because of this it's critical to plan ahead, to develop a sustainable agriculture plan, a sustainable aquaculture plan and a food security plan. Instead, all we see is the lowest support for agriculture in Canada, a slow if not non-response to the collapse of our wild salmon stocks and policies that are halting local food production.

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The throne and budget speeches failed to address our food supply, and that was, for me, a grand disappointment. Jamie Oliver, an English chef and media personality and an ardent campaigner against processed foods, lends us an interesting reflection from one of his cookbooks. He says:

"For thousands of years…we farmed reasonably, respectfully and in harmony with nature. But now, with our clever technology, computers and busier lives, we have moved further away from…home-cooked food.

"Who would have thought, all those decades ago, that we would be able to buy prepacked portions for dinner, complete with a steam valve and excessive disposable packaging? Things like this would have been considered science fiction, an impossibility; yet now it's everyday life.

"Of course, all of this has resulted from a demand from generations who haven't learned to cook. Imagine our great-grandparents' amazement at the choices of ingredients we now have from places like India, the Mediterranean and China. Yet at the same time, they would have wondered what the world had come to if they read the advertisements in farming magazines explaining how to make animals gain more weight by making them retain more water.

"Imagine what farmers in the old days would have thought of today's battery farming practices. They'd have told you it wouldn't be allowed to happen. They'd have told you it would never happen — housing birds together, with no room to move."

Jamie Oliver is insightful and is fighting hard for food security in the U.K.

Our health care system is becoming overrun with avoidable illnesses. One of the most avoidable is type 2 diabetes. This is the breakdown of our food system rearing its ugly head. We have generations now who have no connection with what they consider food and where it comes from. We are seeing the ill effects of what overprocessed, nutrient-deficient, fat-laden, salt- and sugar-laced food is producing.

It's ironic that the word "food" has been removed from the title of the Ministry of Agriculture and Lands. Ironic, but it's fitting in a way. There's a disconnection between food and agriculture right now. I would like
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to see that word reinstated in the ministry title, and I hope that the Minister of Agriculture and I can sit down and talk about that. So far, all of our dealings have been pleasant and hopeful.

We have to ask ourselves where we're going with agriculture. What's our vision? Are we moving blindly towards centralized food production that only has a few main players? Do we want a system that is fraught with risks to our future? Are we supporting a system that allows our food animals to suffer for the sake of the bottom line, as is the case inside industrial feedlots? What is this system that is forcing us to lose control over our plant seed stocks, handing control over to ill-intentioned corporations like Monsanto?

Is this the direction we want to go, or is it time to re-establish our local food systems, create a sustainable and more self-sufficient British Columbia? Does this sound too quaint, on the other side of the House?

In B.C. our local farms and farmers are disappearing at an alarming rate. On Vancouver Island we produce only about 7 percent of what we need, and in British Columbia, B.C. farms produce only 48 percent of what we need. Why have we lost our way with our essentials for life?

It's hard to imagine a throne speech and a budget that don't mention the importance of food — considering that, regardless of what side of the House we're from, we need to eat from a sustainable food system to ensure a healthy future.

We heard a lot of talk about the international market in the throne speech, and we see a massive reduction in the climate action budget.

We heard talk about the oil and gas industry. It's shocking to me that we would consider supporting one of the fastest-growing sources of greenhouse gases, the Alberta tar sands. These tar sands rival even the most polluted cities in China. By entertaining the northern gateway pipeline project, we are compromising our morals and our environmental standards.

This project has the potential for disaster written all over it. Not only is it supporting businesses that are exceeding provincial pollution guidelines; we are inviting an ecological catastrophe when this dirty oil starts coming down our coast in oil tankers. As politicians, we need to stand together and say no to this type of toxic economy and stand behind the moratorium on oil tankers coming down our coast. We need to stand together on this and show strong political leadership. The only reason to support a project like this is greed.

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Something we didn't hear anything about in the throne or budget speech was the state of our wild salmon stocks. Will the historians of our time look back at this moment and define now as the time when our west coast wild-food fishery collapsed? There has been mismanagement of these stocks. Current practices by fish farms have undoubtedly contributed to the potential complete destruction of wild salmon.

I stand with all of those who consider the protection of our oceans and our fisheries a priority. We must listen to experts like Alexandra Morton, who tells us that our time is up. These are B.C. waters. This is something that defines our history and our future. The fate of our oceans has been put in federal hands. Why are we taking a step back?

It is necessary that as a province, we weigh in heavily and demand that the measures taken are radical enough to avoid the same outcome as the east coast cod fishery collapse in 1992. The approach and the length of time it took to understand and to react to that crisis were too little, too late.

We have to learn from that ecological and economic disaster. With the cod fishery still devastated and with a potential for our own salmon fishery to have the same outcome, we have no time to waste. Do we know the eventual consequence of doing nothing? Do we know what it means when our oceans die? I suspect it wouldn't be good news.

With that in mind, I will be supporting the people who are the experts — the experts who have nothing to lose by telling the truth. I will be inviting them into our conversations, and I will be asking them what needs to be done. If I was able to make the changes that were needed, I would. But I'm not, because I'm in the opposition. So I'm asking all of you in the government to act as quickly as possible.

I believe that this government would make better decisions if it takes the criticisms and suggestions of the official opposition. We have all come here for our own reasons. We are all here because of democracy. I hope we're all here because we have a vision, and we're developing actions which will help us create a sustainable society. If this is the case, then democracy is alive and well. If it's not, then it's sick. There is no argument that we need to work together for our own survival.

I would not be here if it weren't for the 300 people who volunteered on my campaign. There are too many people to thank today, but I want them to know how much I appreciate all the valuable work they did. Thank you so much.

I would like to thank my campaign manager, Heather Gropp. She is a woman of integrity, and she brought great political savvy to the campaign. This is Heather's third win as campaign manager in Saanich South.

I also want to thank Samuel Godfrey, who did an amazing job on my campaign as the office manager and volunteer coordinator. I feel very fortunate that he is now my constituency assistant. He's smart and hard-working, and I know that he's going to do great work for Saanich South.

Along with my campaign team, I also had the invaluable expertise of former British Columbia MLAs. My
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"tough questions" debate team consisted of my good friend, colleague and former Saanich South MLA David Cubberley; former Saanich South MLA and cabinet minister Andrew Petter; and former cabinet minister Paul Ramsey. I also had invaluable advice from former cabinet minister Catherine McGregor and former cabinet minister Elizabeth Cull.

Their counsel allowed me to develop my sense of provincial politics. This awareness permitted me to meet the challenges that came my way over the 28-day election period. I will always be grateful for their patience and wisdom.

I would like to acknowledge the fine work my predecessor did in his role as MLA for Saanich South. David Cubberley was successful in his quest to bring awareness to issues such as Lyme disease and anaphylaxis. David is a master of language and always brought a thoughtful and intelligent approach to this Legislature. With his clever use of language came a sharp sense of humour, always retaining respect for this institution in his approach. He is my mentor and my friend, and he continues to be a valuable sounding board for me. I thank him for that.

Finally, I would like to thank my family. My husband, Jon, and my 11-year-old son, Kye, have promised me their patience, and I have promised to fight hard for the things that we believe in. We as a family believe in sustainability, and we have made personal choices in our lives that reflect this philosophy.

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I am very fortunate to have a large family support system, including extended family. I want to thank them from the bottom of my heart for their help, and I want them to know that I will be bringing all of them with me along on this journey.

Hon. B. Bennett: It's an honour to speak in support of the government's budget this afternoon.

Before I get into the substance of my comments, I would like to make a few personal remarks. I've noticed that many members, including the member that went before me, thanked their families. That's one of the few things, I suppose, that bring us together in this House. It's one of the important values that I think everyone shares here. Regardless of our ideological points of view and independent of the rhetorical missives that we fire at each other in this House, including some that I intend to fire here this afternoon, we all do share a love for our families and a recognition that it is our families who bear most of the load from our decisions to be MLAs.

Also, I want to thank the people of Kootenay East for hiring me for a third term. The constituency used to be considered an NDP riding. It isn't anymore, thanks in large part to the 600 volunteers who worked on my campaign in Kootenay East. We won every single part of the riding, including the Elk Valley, except for Elkford, which we lost by 12 votes.

While it's true that the world is currently struggling under the weight of a strangling economic downturn and while the provincial budget is in many ways a response to that downturn, there is much in Kootenay East that we can be grateful for. For one thing, our unemployment rate, although certainly higher than last year, is still not anywhere near as high as it was in any of the years in the 1990s.

Another example. After total abandonment of our region in the 1990s, we finally have a reliable regional hospital that provides the best specialist care to all the people in the region, thanks to the investment of the B.C. government of $35 million and also policies to attract and retain physicians to rural communities.

Our regional college is undergoing yet another major expansion, this one for $12.6 million, which is shared with the government of Canada; and the earlier expansion only a couple of years ago, a $16 million expansion that was paid for by the province.

Our highways are in good condition. The last of the decrepit old bridges on Highway 3 through Kootenay East is being replaced as we meet here today. Passing lanes on Highway 3 are being built to improve traffic flow and public safety.

Our towns and our cities are prosperous, positive communities that are the envy of the world as safe, clean, interesting places to work and to raise a family.

After the spring election I was fortunate to be given the opportunity to lead the Ministry of Community and Rural Development. I am a proud rural British Columbian. My wife was raised on a farm. I am one generation removed from a family farm, and I grew up in a little town the size of Sparwood. I currently live outside the city of Cranbrook on an acreage. I burn wood to keep my home warm in the winter, and I cut and split that wood myself. I hunt, and I fish, and I hike. I also happen to own and enjoy an ATV.

I have maintained my strong connection to the rural land base, and that's allowed me to understand and to empathize with the friendly, resourceful people who live, work and raise a family not only in Kootenay East but in the whole 250 area code.

I'm always amazed to hear the opposition talk about rural B.C., as they do often, as if it were some rinky-dink backwater with 20 percent unemployment, no amenities and no hope. Perhaps they are remembering the 1990s when they talk that way. I hear it all the time from them.

In the past eight years our government has made consistently every year large investments across the province in schools, colleges, universities, roads, water and sewer infrastructure, visitor information centres, airports, seniors facilities, hospitals and clinics — $4 billion in total. The evidence of this investment is plain to
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see in most rural communities. There are major highway investments happening all over the province, not the least of which includes the Kicking Horse Canyon at almost a billion dollars in total investment and the Cariboo connector at $200 million.

With the $14 billion expedited infrastructure announced in yesterday's budget, there will be yet more projects completed to make life better in rural B.C., to strengthen our economy and ready the province for the inevitable recovery that's coming.

Now, I'm sure that over the next four years we will continue to hear the purveyors of doom and gloom from the NDP spreading their jaundiced message that nothing good ever happens for rural British Columbia. That is, sadly, their stock-in-trade.

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This side of the House will continue to make life better by investing in rural communities and by lowering taxes for people and for businesses. I've often wondered: "Does the opposition ever consider that having the lowest personal income taxes in Canada applies not only to the 604 area code but to the 250 area code as well?" Lower taxes actually help all British Columbians. That's why raising the basic personal income tax exemption in our budget is so important, particularly to low-income citizens. Now, because of this budget measure, 375,000 British Columbians will now pay no personal income tax at all.

Individuals in rural B.C. are not the only ones who benefit from tax relief. Large and medium-sized businesses in towns like Golden, Williams Lake, Terrace and Cranbrook have the second-lowest corporate tax rate in Canada, thanks to our government. That encourages them to hire more people and invest in their businesses.

Now, the same is true of small businesses, especially after yesterday's announcement that the small business tax rate is going to zero. It's been a recurring theme in this government for eight years that we create public policy that helps employers large and small to be more competitive in their businesses and in turn to reinvest and to create new jobs.

That's why it's so surprising, Madam Speaker. Just last week I heard a certain opposition member on CHNL — I'm not going to name the opposition member or say where he or she is from — saying that they agreed that HST would help forest companies, and good for them for saying that. He got partway there, but he just couldn't see how that would assist forest workers.

Well, we all know that the NDP is not known for their deep understanding of how business works. Back in the day the NDP promised they would create 28,000 jobs simply by announcing something called the jobs and timber accord. The jobs and timber accord. Of course, they created exactly zero new jobs, which was par for the course.

HST will leave $140 million in the B.C. forest industry each year to strengthen that industry. Let's look at a specific situation. Let's look at the East Kootenay forest company that I'm familiar with, Tembec Forest Industries. They examine their situation on a monthly basis to determine if they can continue to operate, whether they can be open or closed. Yes, the Canadian dollar and the price of a 2-by-4 in the U.S. are major factors that neither the forest companies nor government can control, but government can reduce the school tax payments for those companies by 50 percent, and we did that.

Government can also reduce the corporate tax rate to the second lowest in Canada. We did that as well. Government can have the vision to establish an energy policy, under which companies like Tembec Forest Industries can enter into a power sales agreement with B.C. Hydro, thereby adding significant revenue to their Skookumchuk pulp mill, and we did that as well.

Government can have the courage to implement a value-added sales tax policy in B.C. on the advice of most economists, leaving millions of dollars in these major employers to improve their monthly business case so that when Tembec Forest Industries and all other B.C. forest company employers make that difficult decision during this downturn to be open or to be closed, they are more likely to decide to be open and employ those thousands of forest workers.

Madam Speaker, for the life of me, I do not understand why the NDP just doesn't seem to get that. Of course we recognize that the current recession has made it challenging for forest workers and their families, and this government has responded with many investments that I've talked about already and also with some programs to assist people in communities hit by the downturn.

My ministry delivers the community development trust. It has three programs associated with it to assist laid-off forest workers, their families and their communities. The first component is tuition assistance. This is a $17¾ million program where resource workers are provided with an opportunity to retrain. The second component is the transition program. It's an $85 million program for transitioning laid-off resource workers to other lines of work or into retirement.

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The third component is called the job opportunities program. It's grown to be a $146 million program which has been, quite frankly, fabulously successful. It employs literally thousands of resource workers to do meaningful work doing ecosystem restoration and working on trails and campsites, silviculture, forest fire fuel reduction and removal of pine beetle trees — just to name a few of the things they do.

Through this community development trust, 6,000 workers and their families and their communities are being helped with this great program. Let me say that's 6,000 more than ever was helped through the jobs and timber program. I just want to say a few things about
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the harmonized sales tax as the government's communities and rural minister. I recognize that this tax policy will help the communities that I work with. It's going to make our businesses more competitive. It's going to lower many costs for consumers.

There is no other single tax or economic policy available to us today in this province that will strengthen small and large business as much or as quickly as HST. I've already said that if small and large businesses are stronger, they will invest in our communities, and they will hire more people. Yes, there will be HST where there is currently only GST, and that means that some items will cost more. But if I was still working in the service industry — which I used to work in for many, many years — I think my main concern would be that the economy is strong enough to employ my customers. Unemployed people do not dine out or patronize tourist establishments.

Now, just to be fair, there is a cost in some cases. We've taken significant steps to support ordinary British Columbians by exempting home energy. That's electricity, natural gas, heating fuel and also fuel. In addition to that, we've exempted fuel, which are two things: the home energy and fuel not exempted in Ontario.

As well, we're protecting low-income British Columbians, as we do with any policy change. Rather than take my word on the benefits of HST to British Columbians, I'm going to rely on the words of some non-partisan academics. I have a faint hope — and it's getting fainter every minute that I hear from the other side, but I do have a faint hope — that, however improbable, the members from the other side may listen carefully to what these apolitical academics are saying. You know, it's not too late for the NDP to get on the winning side of this argument and to set aside the partisan politics and do the right thing.

The academic Calyn Shaw said recently in The Tyee, a publication that is not normally all that supportive of our government policies, that HST is the "right thing to do." Calyn Shaw has a masters in politics and international studies from the University of Warwick in the U.K. and is currently a research fellow at UBC's Centre for Sustainability and Social Innovation. I would guess that Calyn Shaw is pretty smart.

Here are some other comments that Calyn Shaw made in The Tyee. It's hard not to support the implementation of HST "if you take the time to speak with tax policy experts, look at the results of HST in other jurisdictions, most notably Atlantic Canada…. The opposition can muddy the waters and consumers can complain that they're getting the short end of the stick, but the truth of the matter is very simple — HST was a good policy move by the B.C. government."

Now the opposition is trying to muddy the waters so that British Columbians won't notice what all these experts are saying. Now, here's what Prof. Kevin Milligan from the department of economics at UBC is saying. He's probably another smart person. "HST isn't a left-right issue, and it isn't ideological as far as economists are concerned. It's just good policy. It isn't pro-business and anti-consumer. It's a necessary modernization of tax policy. Over time, consumers will benefit."

[1655]

You see, HST will be good for consumers, and it isn't an ideological issue according to the experts. So opposition members could vote with us on HST, and they wouldn't have to worry about sacrificing their outdated socialist ideology.

More from Calyn Shaw:

"What seems to be lost in the HST argument is that, in the long run, switching to a value-added tax instead of a retail sales tax is hugely beneficial to consumers. The current PST is an embedded cost in most of the goods and services we purchase. Just because we don't see PST on the receipt doesn't mean we didn't pay it. Businesses paid the PST and passed it right on to us as consumers.

"What's worse is that the current PST is a cascading tax, which means that often the embedded PST was paid multiple times depending on the supply chain of the good. B.C. consumers are often paying double or even triple the PST as an embedded cost without even knowing it."

I ask here today: is the NDP in favour of eliminating hidden taxes from the backs of consumers or not? Apparently, they're not in favour of that. I've heard the opposition in the House state that businesses will not pass on the savings generated by HST to the consumer. Their mistrust of the job-creators and risk takers in our society is also part of their outdated ideology. It so happens that there's expert opinion on that one too.

The C.D. Howe Institute says that 75 percent of the savings from HST in the Maritimes were passed on to consumers in the first year following adoption of HST, which is precisely what we are saying will happen. When it happens, when our economy is strong once again, when consumers are spending and when employers are hiring and expanding their businesses, once again the opposition will have to content themselves with eating crow.

In my view this budget is not only a fair and prudent response to the situation that B.C. and the rest of Canada find themselves in. It's actually the only response that makes any sense under the circumstances. As we have done for eight years, we are protecting vital public services with this budget. Health care funding in this province has gone up 45 percent since 2001.

How that constitutes a cut, as is regularly expressed by opposition members, is a mystery to me, but they continue to do it. They think that if they repeat it often enough, maybe somebody will believe it.

Health care funding — again, to repeat — has gone up 45 percent since 2001. Education funding into the classroom continues to rise in this budget for the eighth consecutive year. We are looking out for the most vulnerable in our communities with this budget by increas-
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ing MSP assistance with a low-income HST credit and with yet another income tax reduction.

A senior couple with $35,000 of income after this budget will be in better shape financially because of the steps that we've taken. We are refusing the temptation to take the easy route by simply inflating the deficit during these tough times. We're making the difficult decisions to support the priorities of the public while holding the line on what expenditures must wait for better times.

Families and businesses around B.C. will identify with this principled process of determining what you can afford to buy and what you cannot afford to buy, even though the opposition clearly cannot identify with that. We will strengthen public services under challenging conditions to make sure B.C. is competitive with the rest of the world when we emerge from this global recession.

The new $39 million in the budget — I don't want to forget about that; I think it's very important — for promoting B.C. will ensure that we make the most of the amazing opportunity that comes from the 2010 games.

Now, the Conference Board of Canada is convinced that B.C. will lead Canada in economic growth starting next year. That's going to be yet more crow for the opposition to eat. Unlike other governments in this country, we will make the difficult choices to keep our deficit down and to control government spending, and we will be criticized for this.

However, we have always been proud to do what we believe is the right thing. That is to steer a middle course, protecting essential public services like health and education while finding ways to make do with billions less revenue than normal.

We will continue to provide good government to the people of the province under the strong and visionary leadership of the Premier, and we will continue to do the right thing even when it is difficult or unpopular. Frankly, doing the right thing in the face of criticism is a hallmark of this Premier and of this government. It's called leadership.

To close, Madam Speaker, leadership is why the people of B.C. elected us as government in May and why the people of B.C. did not elect the other side of the House to government.

[1700]

D. Donaldson: I thank the members for this opportunity. I congratulate you, hon. Speaker, on your election to your position and acknowledge the work that you're going to be doing to keep the smooth running of this assembly going. Sometimes I understand that can be quite a challenge at times.

I also congratulate my fellow MLAs on their election and for stepping forward to serve the public in this way. That goes out to my colleagues in opposition, those forming government and, of special note, the independent MLA.

As I begin this response to the budget speech, I first want to acknowledge that we are here today on the traditional territories of the Songhees Nation and the Lekwungen people. The area I live around, in Hazelton, is on the Gitxsan traditional territory, and I will say a few words of greeting in Gitxsanimax.

[Gitxsanimax was spoken.]

I am the first adopted Gitxsan serving here who lives on the traditional territories. I am a member of Wilp Dawamukw, the Fireweed clan, but I also have a sister in this chamber. The member for Delta South is also an adopted Gitxsan, in the wolf clan. [Gitxsanimax was spoken] to my sister.

I believe I am from the smallest community to send a representative to the Legislature in the last election. The municipality of Hazelton is really a village. As the mayor and my friend Alice Maitland says: "It has a population of about 350 people and 600 dogs."

Surprisingly, considering its size, I am not the first MLA elected from Hazelton. Some 85 years ago Dr. Wrinch was sent to Victoria by the predecessors of my constituents. Dr. Wrinch was a pioneer in rural medicine, and he sat in this chamber in 1924 and introduced the first legislation addressing health care insurance in B.C.

I hope that I can follow in those footsteps by working here to protect the universal health care system we hold dear from creeping privatization this government seems intent on implementing.

Stikine, as many of you know, is an extremely large constituency in the northwest. It takes me two days to drive from one end to the other, especially if you have to wait occasionally for the caribou herd or a solitary moose to cross the highway. In fact, to get to the northwest corner of Stikine, you have to drive into the Yukon for several hours and then head south again to return to B.C. It's a beautiful part of the province, and if you love the land and being outdoors, as I do, you will find it hard to ever leave Stikine.

People who live in Stikine have a deep connection to land and a deep connection to kin. These are the values that sustain us, and they're the basis of the resiliency that allows us to stay in place while buffeted by faraway decision-making and external forces such as corporate globalization.

I tell you, we need that resiliency. Unemployment is 90 percent in some of the villages and 60 percent overall in the upper Skeena. We had more than 200 suicide attempts in 2007-2008 in a local population of just 1,500 people. Doctors called it an epidemic. Since I've been elected, just in my community alone, in June a 15-year-old was charged with murdering his two-year-old nephew. In July a 17-year-old killed himself by jumping off the Hagwilget Bridge, and in August a 34-year-old ended his life by stepping in front of a transport truck on Highway 16.
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This is the reality I face and community members face on a daily basis. This is a constructed reality, constructed by the policies of successive provincial and federal governments. We need to overcome that, and we are.

Here is an example of our resiliency. Stikine is home to communities that produced Canada's first gold-medal winner at the Beijing Olympics. Carol Huynh took gold in her weight class in women's wrestling. That was her perseverance, and it was truly a community effort. I wonder if it would be possible today with the funding cuts this government announced to sports groups.

There are five first nations on whose territories Stikine sits: the Taku River Tlingit and the Kaska in the north, the Tahltan in the central part and the Gitanyow, Gitxsan and Wet'suwet'en in the more populated southern parts.

It's funny when you visit those communities. When you're from Hazelton and they say, "Oh, you're from the south," we're still a thousand kilometres north of the Lower Mainland.

In addition to the first nations villages there are many small communities with their roots in the settler culture: Telkwa, Smithers, the Bulkley Valley and New Hazelton along Highway 16; Stewart, Dease Lake, Telegraph Creek and Atlin further north.

[1705]

Then there is Hazelton. I already mentioned Hazelton. It's along the banks of the Skeena where the Bulkley River joins. Hazelton began as a commercial centre. It was the furthest upstream navigation point that riverboat paddlewheelers could come bringing supplies from the ocean, from the coast. I spent ten years on village council, from 1999 until this year.

I already mentioned Mayor Alice Maitland. She was only the third mayor of Hazelton in the more than 50 years of history of the municipality, and two of those three have been women. Alice has been mayor for more than 30 years. She is a mentor for me and for many others in the area, and her influence is a major factor for why I am here today, although I think she's still pretty mad that I'm not on council.

As MLAs we know it takes hundreds of volunteers working on a campaign to get elected. There are so many in my team that I want to thank, but I just want to say to all of them: your generosity with your time, your passion for creating a better place for all and your dedication gives me strength in doing my job here in this setting.

But I think all members will agree that support from family is critical during and after the election. I thank my wife, Anne Docherty, Nox mi i lexs, and my sons Darrach Yunkws, Sagamuxw and Khymlhyn Yunkws, Muxs wun buhn, and members of Wilp Gyologyet for their tireless work.

We had a very high voter turnout compared to others in the province, especially in the villages. There were lineups and people who actually returned to the balloting station when they didn't have the necessary ID on their first attempt.

There is still lots of room for improvement, but the response was heartening. To me, it showed that if people really believe they can make a difference by voting, then they will come out and participate. It shows that when they believe change is possible, they will engage with our democratic institutions.

Some of the change that people from Stikine want is in how we behave as MLAs. I believe that everyone in this chamber has the ultimate goal in mind of making B.C. the best place to live for all who populate this land. I have to believe that, because if one does not trust that there is a basic humanity within all of us, then it makes it very difficult to keep going in this world.

I know that healthy debate is good and that we will not necessarily agree on how to get to that goal, and that is fine. There will be conflict, but we must remember the basic humanity that we all hold. That is, rather than attacking, I will challenge decisions of this government that do not match their stated values and point out when those values do not match those who I represent.

Challenging means presenting alternatives, and I will focus on a few key areas for people living in Stikine. A few years ago I was working on a trail project that was exploring an old grease trail in Gitxsan territories. That's a trail where oolichan grease was brought from the coast to the more interior first nations, and the grease would drip out of the backpacks and stain the trail. Hence the name "grease trail."

We were on a high ridge, well beyond any roads or signs of industrial development. I was with a member of Wilp Gyologyet. He has spent his life living and making his livelihood on the land, whether it is trapping, guiding hunters, fishing, logging or mining. He's done it all.

He turned to me, high on this ridge looking out over his traditional territory, and said:"Doug, I don't need to go to church. This is my church." That is the deep spiritual and physical connection to the land that people in Stikine have. It's a recognition that we are part of the ecosystems in which we live, not apart from them; that our health and well-being — our livelihoods — are tied directly to the health of the ecosystems surrounding us. I would submit that since we are all part of the living world, that applies to those living in the more urban settings as well as people dwelling in rural areas.

What about the natural world, the ecosystems? What are some of the healthy characteristics of that? Well, there is a balance, and nothing, nothing in the natural world grows forever, unless it's a disease like cancer. What can we learn from that?

Well, we can look at our obsession with the GDP, the gross domestic product, and that if it doesn't increase constantly, we are in grave trouble. We use the GDP as an indicator of our well-being, but did you know that the GDP discounts impacts on our economic activities
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that may have a degrading impact on the ecosystems we depend on?

An example is the Exxon Valdez oil tanker spill, when whole ecosystems were destroyed and fishing livelihoods ruined, let alone the cost in destroying social trust. The GDP of Alaska actually showed an increase after the Exxon Valdez oil spill because of the money that was pumped in to clean up — an increase. Now, how good a measure is that of our well-being?

[1710]

We need to be looking at other ways to judge how we are doing as a society and manage the economy based on truer indicators. There's been some good work done by a group called Redefining Progress in California. They have developed what is called the GPI, the genuine progress indicator. It factors in things like the cost of water and air pollution. It also factors in the value of household work and parenting, the value of volunteer work and many other indicators. It becomes a different way of looking at things.

When you have a situation like children in grade 4 coming to school hungry, like I have in my constituency, then that gets factored in and not ignored, like with the GDP. What kind of government says that kids going to school hungry should be ignored when we are evaluating how the economy is doing? If we use better tools, like the GPI, then we can create a better public policy together in this Legislature.

I would say that using better tools is needed, because when this province has the highest child poverty rate in Canada for the sixth year running under this government's policies, then something has to change. That is a shameful record. Now that I am here, I am implicated by association with that record, and I will do whatever it takes and whatever is in my power to ensure that all children in this province have the opportunity to become all that they can be.

What else can we learn from healthy ecosystems? Well, diversity is essential for survival. A healthy ecosystem depends on diversity for its resilience, to withstand all types of factors, like disease, drought or fire. We can see the opposite of diversity when we use monocropping, whether it is in agriculture or silviculture. Disease goes up. Resiliency drops. Plantations fail. Inputs increase.

A diversity of approaches and diversity of thought are needed to address the complex questions we face in society. Homogenization of thought will not help us through. This means we must go above and beyond to be inclusive when designing methods for people to address issues in their own communities. Unfortunately, the way public consultation is undertaken by this government has been an out-and-out failure.

Instead of using the opportunity to bring local knowledge into the equation, they have squandered the chance for these processes to be community-building exercises. Instead, they have been divisive. They've failed consultation around resource-based issues in the northwest. Just in the last few years alone the examples are numerous: fish farms, coalbed methane, the angling management plan, Kemess North mine and now the proposed Enbridge pipeline — all bungled by this government.

If we are to pursue economic development in the manner this government envisions, then we also need to ensure that industrial activities do not forever reduce the diversity in the ecosystem upon which we depend. Whose job is this, mainly, in government? The Ministry of Environment. What did the government do in yesterday's budget? Cut $24 million from that ministry, including a more than 50 percent cut in the environmental protection section.

In fact, all compliance functions in the Ministry of Environment and the Ministry of Forests had their budgets cut. These are the people responsible for monitoring our air and water and ensuring that the policies and protection we have in place for healthy ecosystems are followed. To me, it demonstrates that there is a total disconnect between the stated values and the actual practice in this government. It shows an absolute lack of understanding that we are part of the world in which we live, not apart from it.

We need diversity in our approach to the economy, not a monoculture approach like this government supports. We need a balance between community economic development and the dominant global model that has not served us especially well in the Stikine. We need to focus on the human segment of the economy, promoting civic literacy so those most impacted by developments in their own back yards have the skills, knowledge and ability to have the biggest say about what goes on and how to participate.

A wise person said once: "For a learner, literacy is the velcro to which everything else sticks." Meanwhile, this government has cut regional literacy coordinators around the province, and programs like Word on the Street are threatened. It's obvious that literacy isn't much of a priority anymore for the Premier, but that is shortsighted and will not help us to be more resilient in the future.

[1715]

We can also increase diversity in the economy with our taxation policy. Instead of supporting old ways of doing things, like using lakes as toxic dumping ponds in the mining industry, why not implement a tax incentive for innovative green mining techniques so we can be proud to say that we extract minerals in an industry-leading, environmentally sound manner?

The HST doesn't do that. It just encourages more of the same behaviour. By adopting the HST, we will lose the flexibility of using the provincial sales tax as a tool to encourage economic growth in areas like green mining. Believe me, there are markets — and there will be markets — for minerals derived from such techniques. It will be consumer-driven.
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Nowhere do we need a different approach more than in our actions around enhanced climate change and carbon emissions reduction. What did this government do? It gutted the climate action secretariat by more than 50 percent in the budget. These are the folks who develop innovative policy and legislation to address climate change. So I guess that's not a priority for the government anymore, just like literacy isn't a priority anymore.

We must take giant leaps in moving towards a low-carbon economy. I believe climate change is the biggest single challenge facing us, our children and grandchildren. What is needed is a total policy review across government ministries using a low-carbon lens.

Why, for instance, did the government make it illegal to buy beef raised by my neighbour in what is known as farm-gate sales? The carbon miles are far less when I buy beef raised locally, only 35 kilometres away, rather than from a grocery store, where it is shipped in from Alberta, the U.S. or even Australia. Can you believe that? I even saw beef from Australia in a store down here.

The carbon tax is not working. It has not reduced the amount of gasoline consumed and, therefore, carbon emissions. And no wonder. In places where I live, the government has failed to give adequate support to even rudimentary public transit like a shuttle bus between communities. I am willing to work with this government to improve their failed carbon tax so that it actually makes a difference.

The lack of diversity in this approach to the economy, one that does not recognize the primacy of the environment, will lead to extinction of species. Of major concern are wild salmon stocks. Their rapid decline is happening right now, in our generation.

We are a salmon nation in northwest B.C., regardless of your cultural heritage, and I will not be part of contributing to our salmon going the way of the buffalo. I cannot do that to our children and to future generations. That is why I will fight tooth and nail against this government's support for coalbed methane development in the Sacred Headwaters at the source of the Skeena, Nass and Stikine rivers and its agenda to approve construction of an oil pipeline across the north and the subsequent supertanker traffic in our inland coastal waters.

These things cannot be allowed to proceed. It's not smart growth. It's not good for diversity. It will not mean a better livelihood for residents of the area.

To conclude, a brave young woman named Ali Howard recently completed the first swim of the Skeena River from the headwaters to the Pacific Ocean — 650 kilometres through rapids, through canyons, through tidal waters. She and her support team did it to highlight the magnificence of the intact ecosystem this watershed is part of, and she did it to provoke people who live in our watershed to think about what future we want and the threats from development such as coalbed methane and oil pipelines.

People from villages and communities all along the river came out in welcoming ceremonies. I met Ali when she emerged from the river at the Gitxsan village of Anspayakw, also known as Kispiox, where she was welcomed by hereditary chiefs.

Later, downstream, I rendezvoused with Ali and the flotilla of 40 or so kayaks, rafts and canoes that were accompanying her swim that day. We gathered at Cedar Creek in the traditional territory of Luutkudziiwus so that MP Nathan Cullen and I could enter the river and swim the half-hour downstream with Ali to Hazelton and the 'Ksan village.

[1720]

I can tell you that I was pretty cold and I was pretty exhausted in just that short a distance, and it just increases my amount of respect for Ali and for what she's accomplished.

Before we entered the waters, we gathered in a large circle on the banks of the Skeena River. A bear made its appearance on the opposite bank and then silently disappeared into the underbrush. Renowned first nation artist Roy Henry Vickers led us in a prayer and in a song. His words were inspiring as he explained that those of us that live in our area are all people of the Skeena, regardless of nationality or culture, and that we all live there and therefore had a shared responsibility for the care of the river, the water and the animals.

I echo Roy Henry's words from that day, and I believe they apply universally across the province. We are all connected as people of the Skeena River and its tributaries, just as we are all connected as people who live on the Fraser River system. We are all connected as people who live on the Columbia system. We are all connected as people living in the tidal waters, and we are all connected by the streams, rivers and oceans in this province.

We can swim together in these waters. We can swim in the same direction for a common cause. We can, and when we do, we will rise above petty partisanship. We will rise above our biases and self-interest. We will share our humanity with each other, and we will lead B.C. to a better place where there is justice for all.

J. Les: Thank you, Madam Speaker. I'm pleased to stand in my place this afternoon and offer some comments on the budget. But before I do, my congratulations to you on having been designated the Deputy Speaker. I wish you much success in trying to keep order in this place. I am sure that we as members will do everything we can to assist you in that regard.

Being that this is my first opportunity since the recent election to address the House, I would also like to make a few comments in that regard in that it was my third successful election to this Legislature. The people of Chilliwack have been, once again, very good to me and have sent me here to represent their interests, and I want to acknowledge that. It is a serious responsibility,
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one that I intend to discharge in a serious way, as I have always tried to do.

We live in a somewhat different province in many ways than when we left here at the end of March. Much has transpired on the world stage. We live in a very dynamic time, and we certainly see evidence of that in our budget update that the Finance Minister just released and spoke to this House about the other day.

Speaking of the Finance Minister, I particularly want to recognize his leadership skill, and that of our Premier as well, in leading this government and this province through these very difficult economic times — not necessarily being content with making easy decisions that would be perhaps politically popular, but having the courage to make decisions that will stand us in good stead in the years ahead.

Earlier this afternoon I had the joy and privilege of introducing to the House three of my grandchildren — another update, by the way, since I announced the arrival of a grandchild earlier this year. While we were away this summer, we had the pleasure of welcoming another grandchild, and his name is Linden. He's the first son and second child for my son Chris and his wife, Corinna. So for those who were keeping score — and I know there were a couple of members opposite who were particularly interested as I continually rose in this House to introduce new grandchildren — that now makes it 12 grandchildren.

[1725]

I sometimes observe in this House that people say that, really, the reason we're here is to look after the future interests of our children and grandchildren. That is absolutely true, and I guess by virtue of the fact that I have a number of grandchildren I feel that need quite acutely — to always keep in mind that we need to leave behind a province that will be at least as good for our grandchildren as it was for us. That is, I'm sure, a lot easier said than done, but that is what we must always strive to do.

I was born and raised in Chilliwack. I really enjoy that community, as indeed I enjoy the entire province. There can't be a better place on earth in which to live. We've had many advantages over the last number of decades. Sometimes I feel we are, perhaps to date, the most blessed generation on this planet, and we need to continually think about how we can keep that good story going for our children and grandchildren.

It's a real pleasure to see our children succeeding every day in this province, completing a very valuable education, going on and starting careers, getting themselves invested in homes and what have you. It's a real pleasure when young people in our province are able to do that.

At the same time, of course, we need to be mindful of those who, for whatever reason, are not as successful, and we need to make sure that no one is left behind.

Turning to the budget, I was first of all very pleased to see that this government's commitment to tax relief even in these difficult times is still very much in evidence in this budget. I am a great proponent of tax relief, particularly on the income tax side, and we've seen how the basic personal rate, the exemption, has been raised up to now $11,000. I think that is all to the good.

I'm a real fan of leaving as much money as possible in people's pockets. This is money that they have worked hard to accumulate, and we need to ensure that people have as much money in their own bank accounts to do the things that they would like to do with their own money. Reducing the amount of income tax that we take from people is one way of doing that, certainly.

Another aspect of tax relief is raising the small business tax threshold from $400,000 to $500,000. We often talk a good line about small business in the province of British Columbia, but we seldom fail to appreciate how important the small business sector is in our province in terms of employing people — sometimes in very small numbers, but it is, collectively, a very, very significant economic engine in our province, and we always need to be sure to actually be looking out for small business.

It is sometimes said: "Big business will look after itself. Look after the small business; look after the middle class." I happen to share some of those sentiments, so I was very pleased with the tax relief that's being offered to the small business community.

I was also pleased to see education funding being protected for the ninth year in a row. The per-pupil cost of educating a student will continue to increase, and we will be supporting that. Obviously, it is important.

Those grandchildren I was talking about earlier — the first thing they're going to need as they grow up is a good education, and we must never compromise that. I'm so pleased to see that year after year after year after our government came to power in 2001 we have increased education funding, and this budget continues that trend.

Now, I've heard in the last several days that when the Minister of Education made a decision to not provide annual facilities grants this year, this was somehow the end of our education system. Well, actually, it's not. I personally congratulate the Minister of Education for making that decision. It is a decision that allows those equivalent dollars to stay in the classroom, where it's important.

[L. Reid in the chair.]

We've all made decisions in our own personal lives from time to time to defer maintenance of some kind because we had some more urgent priorities at that time. Essentially, these annual facilities grants are moneys that are used to maintain school buildings, to give them a paint job from time to time, to put new roofs on various buildings and that kind of thing.

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[ Page 239 ]

Not saying for a minute that these things are not important, but much more important, I think, at this time is to make sure that when we're living in a time of scarce resources that we make sure that first and foremost those resources go to the classroom, and that is what this budget does.

As well, we see a very significant increase in health care funding in this province — again, something that has been much discussed over the last several months. But over the three years that this budget projects, health care funding will increase by 18 percent. That is very significantly more than the rate of inflation and the rate of population growth combined — perhaps almost double that rate — and it indicates clearly that there are a lot of pressures on health care spending.

I will perhaps return to that issue later in my remarks, but for now suffice it to say that our commitment to making sure that the funds are there to provide health care is intact, but there are very significant pressures there.

In order to achieve some of those spending levels, indeed, some programs are having to be reorganized, and some of the funding that we would like to have in place cannot be provided. We just have to recognize that although this is a very, very significant level of funding — in this particular year, I believe, it's $14.1 billion — there are tremendous pressures on the health care system. As I said, I will return to health care a little bit later on in my remarks.

There's been a lot of discussion, particularly from the other side, about the implementation of the HST in our province. Let me be very clear. I am absolutely 100 percent supportive of the Minister of Finance in this initiative. It is absolutely without question the most intelligent thing we could do at this point in time to help our economy. I have not read one serious economist who would disagree with that assessment, and I've read quite a number of assessments of the HST.

It is also a fact that most modern economies across the world have moved to a value-added tax system, and for us not to get in line would mean that our own domestic businesses here in British Columbia would increasingly be at a disadvantage, even to supply our own population here in British Columbia, because other competitors from outside of the province with a value-added tax advantage would successfully be able to compete against our own businesses here in British Columbia to supply British Columbians with goods and services.

Clearly, that is not an acceptable situation, and I'm surprised sometimes that members opposite don't seem to recognize basic facts like that.

I'm also surprised that they don't pay attention to advice from people that I believe they like. I have often heard members opposite talk about Helmut Pastrick and what great financial insight he provides. Well, it was just today, I believe, that Helmut Pastrick is quoted in the newspaper as saying: "The HST improves businesses' bottom line, which should help profitability and the potential for future investment and, hence, job growth."

Now, members opposite have often said that Helmut Pastrick is a very brilliant economist. He apparently agrees with the implementation of the HST. So I'd invite members opposite to sort themselves out. What are they really trying to do? Is it just a populist political stunt on their part to oppose the implementation of the HST, or are they against more job creation in the province of British Columbia, or exactly what is it?

They often are very quick over there to say: "Come clean." I would like the NDP, the opposition, to come clean and suggest to us exactly what it is about the implementation that they disagree with. Is it the job creation? Is it the investment growth? Is it the stronger economy right across the province? What is it about that that the opposition does not like?

[1735]

I, for one, am completely on side with this. I think it is the right thing to do. Clearly, it has caused upset in many sectors across the province because, frankly, the harmonized sales tax is poorly understood. This is not being critical of anyone, but that is just stating a fact. These kinds of things, sort of at a macroeconomic level — unless you take the time to sit down and really have a close look at this — can be very difficult to understand.

I also understand very clearly that some different sectors are going to be impacted differentially, no question about that. The Finance Minister is hard at work to ensure that we do whatever we can to mitigate, to ease the transition. There are many discussions yet to be had with the federal Ministry of Finance and with our own stakeholders in the British Columbia economy.

I am completely comfortable that at the end of the day everything will be done to make that transition as agreeable as possible, fully recognizing that in a complex modern economy such as we have here in British Columbia, there simply is not one cookie-cutter example that you can trot out and that works for everybody. It just doesn't work that way. This will be a transition that will affect people differently.

But it's also important to point out that already we have taken steps to mitigate the effect, particularly on people with low incomes. In the budget yesterday we heard some of that in terms of how home heating and energy costs will be mitigated. Of course, there will be an expanded HST tax credit. As low-income people today already get a GST tax credit, the HST version will be that much larger — and other measures of that nature.

As we know, HST is not charged on food, groceries, nor is it charged on rent. So when you take many low-income people, if they do not pay HST on food, on rent and on home energy and heating costs, plus the fact that we are going to be giving them every quarter, every three months, an enlarged tax credit, I think one
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can readily see where many people are going to be relatively unaffected by this HST, except for the fact that there will be more investment in the economy, and there will be stronger job growth. Obviously, one can't help but come to the conclusion that that is, in fact, good for everybody.

As I said, we want to be sure, as members collectively in this House, that when our time here is done, whenever that is, we leave behind a province that is in the best possible condition, where our children and grandchildren can enjoy the same future as we've been able to live in the present.

When I look at health care, I've got to say that sometimes I become very concerned. The fact of the matter is that health care costs have been spiralling upward now for many, many years. We have seen where health care costs in the mid-'90s consumed about 34 percent of the budget — of total provincial spending. And here we are in 2009, about a decade and a half later, and health care at the end of this budget period will consume something in the order of 45 percent of all provincial spending. I am not at all sure that that is a spiral we can allow to continue.

When you look at the demographics — not only of this province, but also of this country and perhaps the western world — we have this phenomenon known as a baby boom. At my age, I guess I can consider myself to be somewhere in the leading edge of that baby boom, that big bulge of population that has been working its way through the system. Behind us will come a smaller generation. The demographic pyramid will have been inverted at some point in the future.

[1740]

We need to think carefully about that because when baby boomers like us — and when I say "us," I'm quite conscious that I'm including most of the people in the room here — in 20, 30 years from now are more affectionately referred to as "geezers," we're going to be expecting a lot of health care, I suspect. You know, we'll want a lot of health care. We'll want the very best care, and we are going to be somehow expecting our children and grandchildren to pay for that.

Collectively, governments across the western world have not done, in my view, a good job of preparing for that day. We have left a lot of debt behind that we expect our children and grandchildren to pay off as well. And we've got this huge demographic issue.

I think we need to think very seriously about that issue. What are the solutions? I'd be interested in hearing from members opposite about that as well. This is a real issue. This will be one of the most significant issues that we collectively will be facing over the next several decades.

How do we continue to fund health care, particularly given the upward spiral of health care expenditures that is totally outstripping the expenditures of any other ministry in government? It's important to turn our minds to that, perhaps in a much more concerted way than we have in the past. It simply would be irresponsible of us not to turn our attention to that in a very serious way.

In closing, let me say again that I totally support the Finance Minister's budget update and the leadership that he has demonstrated. It continues a pattern of leadership that we've enjoyed in this province for over eight years now. We were one of the first jurisdictions to adopt the principle of generally accepted accounting policies. We saw numerous credit-rating upgrades that are, I think, a very important barometer of how the outside world looks at our province and our budgetary management.

If I could convert the bond-rating agency's comments to something you'd normally see in school, I would say we rate an A-plus in that regard. So we're clearly on the right track in this province.

These are difficult times. I hate that we have a $2.8 billion deficit. But then, when I look across the Rockies, and I see that the province of Alberta has a deficit in the area of $7 billion, with about three-quarters of the population…. When I see the province of Ontario with an $18 billion deficit…. I dislike what we had to do here, but in context, I think that what we have done is quite responsible. We have a clear path from here to four years from now, where the budget will once again be in balance.

Thank you for the opportunity. I look forward to the ongoing debate on the budget. When it comes time to stand in this House to support it, I will be there.

J. Brar: It's always a real honour to stand up in this House and speak on behalf of the people of British Columbia.

Before I start my response to the budget speech, I would like to extend my thanks to those who have been part of my journey since I've been elected as a member of this Legislative Assembly in 2004. To the people of Surrey–Panorama Ridge, and now the people of Surrey-Fleetwood, thanks from the bottom of my heart for giving me the rare opportunity to speak in this House on your behalf.

To my friends and supporters, thanks for standing with me during good times and tough times.

[1745]

To my staff, Ruby Bhandal and Peter Leblanc, thanks for your passion, commitment and extraordinary services you offer to the constituents. To my Victoria staff, Gurbrinder Kang, Brian Kowalski and Susan Farmer, thanks for your able support and meaningful assistance to me on a daily basis.

To my fellow members on both sides of this House, congratulations on your victory, and thanks for your hard work and commitment to serving the people of British Columbia. Last but not the least, to the love of my life, my friend, my partner, Rajwant Brar and my daughter, Noor, and my son, Fateh. I love you so much, and I am proud of you.

Coming back to the budget speech. This is the sixth budget speech since I came to this House in 2004. This
[ Page 241 ]
budget is a powerful and defining chapter of the decade of deceptions and incompetence of the B.C. Liberals. We have seen the past budget, past promises. A brief look at the past will tell the story.

Once upon a time the Premier promised during the election that the B.C. Liberals would provide the health care when you need it and where you need it. Soon after the election was over, they started closing hospitals and emergency rooms. Clearly, they misled the people of British Columbia during the election.

Once upon a time the Premier promised during the election that the B.C. Liberals would provide the best education, so that no child would be left behind. Soon after the election was over, the B.C. Liberals started closing schools, and they have closed over 175 schools. Clearly, they were not honest with our kids and with the people of British Columbia.

Once upon a time the Premier promised during the election to our seniors to build 5,000 long-term care beds for seniors, and soon after the election was over, they betrayed the seniors by refusing to build 5,000 long-term care beds. Once upon a time the Premier promised during the election that the B.C. Liberals wouldn't sell B.C. Rail, but once the election was over, they sold B.C. Rail.

Again, they misled and betrayed the people of British Columbia. The list goes on, and the pattern is very clear. This Premier says one thing before the election and the exact opposite after the election. Political deception has consistently taken precedent over the truth. They have learned the art of deceiving people and hiding facts so well that no one can beat them. This budget is another chapter of the book titled: "B.C. Liberals: Decade of Deception and Incompetence".

The province has just gone through the election three months ago. During the election campaign the Premier and the B.C. Liberals made four major commitments to the people of British Columbia: that the deficit would be no more than $495 million maximum, not a penny more — $495 million maximum. That was repeated time and again during the election.

[1750]

The second commitment they made was that they would protect funding for health care and education. The third one was that they had no plans to impose the HST. I call it "hidden sales tax" — hidden from the people of British Columbia. They had no plans. That's what they told the people of British Columbia during the election. The fourth commitment they made was that the Premier and the Liberals would balance the budget within two years.

That was before the election, but once we saw the budget yesterday, they have told completely the opposite picture from what they gave to the people of British Columbia during the election.

The fact is that in just three months after the election, they have broken all four major promises they made with the people of British Columbia. Just three months after the election all four major commitments are gone.

Clearly, they misled the people before the election, they misled the people during the election, and they have misled people since the election. Clearly, they didn't tell the truth to the people of British Columbia during the election because they knew one thing. They knew that if they told the truth they were not going to win the election.

One thing in this budget is certainly different than the past budgets. Both the size and the quantity of deception are much bigger than in the past.

Four major commitments were made to the people of British Columbia — all four were big deceptions. Those four promises were not based on honesty and facts. There was only one motivating factor, and that factor was winning the election by saying whatever needed to be said to the people of British Columbia during the election.

So during the election they promised that the deficit of the province of British Columbia would be $495 million maximum — not a penny more. Is there a single member in this House who believed the Premier at that time that the deficit would be $495 million and not a penny more? Not any member on this side, and I can understand there are many members on that side who didn't believe that promise as well at that time, because people were well aware about the economy.

Not only that, there were leading economists at that time warning the government of British Columbia that those estimates were much below the real figure. Some of the economists even said the deficit could be $2 billion to $3 billion at that time. But when the opposition challenged that, what we got in response from the Premier at that time was that the opposition was fearmongering. That was the response.

So despite clear warning from the economists and the opposition that the deficit would be much larger than $495 million, the Premier continued providing misleading information to the people of British Columbia.

Now, the budget tabled by this government yesterday tells entirely a different story. Now we know the real deficit, and that is $3.5 billion if you factor in the $700 million the government is going to receive from the federal government under the HST agreement.

How can the Premier explain that? How can the Minister of Finance explain that to the people of British Columbia, that a deficit from $495 million has gone up to $3.5 billion? It's seven times more than what the people of British Columbia were told during the election — even after warning after warning from the economists, leading economists, and even people who were advising the Premier.

[1755]

But they wouldn't listen at that time. They would continue providing the misleading information to the people of British Columbia just for one purpose: just
[ Page 242 ]
to win the election, providing misleading information. That was the motivation.

In a private company, if the deficit of the company goes from $49,500 to $3.5 million, what will happen? First, the company will go broke. Second, the CEO of the company will be fired. The CEO of the company will be fired with cause.

There are a lot of questions about the size of the deficit which the people of British Columbia would like to know, and the information is not forthcoming even today. So the question is: when did they come to know the exact situation about the deficit? The Finance Minister finally admitted yesterday that he knew about two weeks before the election about the budget pressures, which could go $200 million to $300 million over the original estimates.

He also said that it was a casual conversation with the deputy minister, and he didn't ask any questions when the deputy provided that information to the minister. He also chose not to tell the Premier about the situation of the economy of the province because we were going through the election campaign.

Clearly, he also hid the information from the people of British Columbia during the middle of the election campaign. Think about that. If a patient has been sick for quite a while and the doctor can't figure out what is wrong with the patient…. One day, after going through some serious tests, the doctor comes out and tells the patient: "You have cancer." Can you imagine for a moment that the patient will not be shocked at that outcome? Can you imagine for a moment that the patient will not ask questions about the cure? Can you imagine for a moment that the patient will not ask how much life is left?

It was that serious when the deputy minister called the Minister of Finance to say that the deficit could go over the original estimate. It could go over between $200 million to $300 million — which, by the way, could be roughly 40 percent more than the original estimate, which was $495 million.

The deputy minister did his job, provided the information to the minister responsible for that information. But the minister did not tell the Premier and the people of British Columbia because of one factor — because we were in the middle of the election. They continued misleading the people of British Columbia about the fiscal situation of the province. And the deception continues.

The Premier also admitted that he knew about the budget pressures a week before the election, but the Premier continued telling the people of British Columbia that the deficit would be $495 million maximum — not a penny more. Even after knowing that that information was wrong, that that information was not factual, the Premier continued providing misinformation, misleading the people of British Columbia just to win the election.

You must be well aware, Madam Speaker, that people's confidence in politicians is very, very low. In other words, people don't trust politicians. We saw in the last election that only 50 percent of people came out to cast their ballot, which is very low, even for Canadian standards we have seen in the past. There's one factor for that, and that factor is that the politicians don't tell the truth.

[1800]

So that's the story we are talking about here — that the deficit will be $495 million. The reality is that in three months — just three months after that was said to people — it is actually $3.5 billion. So what it means is that it went up $1 billion per month.

How can the Minister of Finance and how can the Premier explain that? They can't explain that to the people of British Columbia. They should explain that to the people of British Columbia, but they are not providing that information as to why that deficit went from $495 million to $3.5 billion in just three months.

What people expect…. People expect honesty, and people expect to be given the facts. But that did not happen when it came to the deficit in the last election. That did not happen, and people certainly are not happy with that. You know, I've been listening to radio programs. I've been listening to people. I've got a lot of phone calls coming to my office — people asking questions. Why did that happen? How did that happen — why they failed to provide the information to the people of British Columbia and why the B.C. Liberals hid the information during the election campaign?

Those are the questions. When did the minister come to know about the size of the deficit, that it will be much bigger than what is being told to the people? All those questions people are asking, but the government is not forthcoming, clearly, because they misled the people of British Columbia during the election.

The second major commitment was about the HST. This government talked a lot about how they don't want to put more taxes, or introduce more taxes, on the people of British Columbia. They talked a lot about that. But about HST, the commitment was made during the election that they had no plans to impose HST on the people of British Columbia. Not only that, when they were asked specifically by different organizations, "Do you have any plans to introduce HST, harmonized sales tax?" they said they didn't have any plans to impose HST on the people of British Columbia. The Premier said that. The Minister of Finance said that.

They also stated in writing that the harmonization would extend the PST tax base to a broad range of goods and services that are presently exempt from provincial sales tax, which would be a major concern. That was a major concern during the election time, so there were no plans to introduce a new tax called HST, hidden sales tax, on the people of British Columbia. They made a written commitment to the Canadian Restaurant and Foodservices Association that they would not impose the HST.
[ Page 243 ]

They also gave the commitment in writing to the Greater Vancouver Home Builders Association. The commitment was also given in writing that they will not impose HST. That was before the election. That was during the election. Once the election was over, as we know from the past, things completely changed. Things completely changed. The B.C. Liberals betrayed the people of British Columbia, betrayed those business associations, betrayed many people in the province by introducing this new HST tax.

[1805]

In three months — actually, less than that…. It has been almost five weeks since the announcement was made. Roughly less than a month and a half after the election they came out and made the announcement that they are going to actually introduce HST to the people of British Columbia. Clearly, they misled on that issue, as well, to the people of British Columbia during the election.

So what we see is very consistent — that they say one thing during the election or before the election and that they say exactly the opposite after the election. That is exactly true when we talk about the deficit, the size of deficit and when we talk about the HST. They were not in favour of imposing that tax, but now they are, because they want that $1.6 billion from the federal government. That's what they want.

The second thing they want, which is the history…. They want to give, again, a tax break to big corporations and hit ordinary people in the pocketbook. HST, as it's known, will drive up the cost of many things, and it will make life more difficult for average families.

I read the list: from new homes to hydro bills, haircuts, movie tickets, restaurant meals, vitamins, bicycles, Energy Star appliances, and even funerals. And there are many more things.

The PST exemptions, which came into effect, I think…. In the last 25 years different governments brought in different exemptions based on different needs of the people. They were all gone. They were all gone because of the introduction of HST by this government.

The government continued to state here in the House and outside that it will benefit all British Columbians. How can people believe them? The restaurant industry alone says that the HST will cost their business $750 million per year — $750 million per year. They're also saying that there will be a huge job loss in the restaurant industry. It is going to make life much more hard and tough for small business people and working families.

This is not the time to introduce any new tax. Governments across North America, even in Europe, are at this point in time, when we are going through a recession, helping families and businesses by giving a stimulus package. But here in B.C. what do we see? We see a new tax being imposed on the people of British Columbia, as well as on businesses.

They have failed to produce even one proof of evidence that this will help all British Columbians, that this will help the business community, other than the big corporations. I may not differ there. But it will not help the average family. It will hurt small business people. The restaurant industry is already on the record, and there are many other businesses. The housing industry, for example, is going to be hit very hard with this tax as well.

The other promise they made before the election was that the budget will be balanced in two years. And they even went further than the promise. They passed a piece of legislation on that. In two years.

Now, yesterday we came to know of a U-turn on that. It's a totally different picture. It's now four years — four years. The government that says it hates deficits. Now for four years, for the entire full term, there will be deficit after deficit after deficit. What about that?

How can people believe the government on any commitment they made when on four major commitments they made to the people of British Columbia during the election — on all four — they made a U-turn. Those commitments are there no more for the people of British Columbia.

[1810]

One thing I can say with confidence is that had people known about this — what people have been told yesterday in the budget — the people would not vote for the B.C. Liberals. They would not win the election. They knew that, and that's why they were misleading people. That's why they were providing misinformation to the people of British Columbia. That's why they were hiding the facts, and that story goes on.

The promise is, again, a budget balanced in two years. That's not true anymore. Just three months after the election, now it goes to four years.

The other commitment they made during the election was that they will maintain funding for health care and education. That was the commitment made time and again on radio programs, the newspapers, everywhere the Premier went, everywhere all the candidates went — that education and health care are very important to them. But as soon as the election was over, we saw a totally different picture. The picture is that there is no more money for the health authorities, not even a penny, as compared to the February budget. No more money.

The impact of that on the people of British Columbia is very huge. It's very serious. Thousands of surgeries are going to be cancelled. Thousands of surgeries will be cancelled as a result of this new budget, because there's no more funding for the health authority. We saw a long list of health services cuts only in the Fraser Health Authority, where the emergency room in Mission will be eliminated, for example.

The seniors will be impacted big-time. We saw from the caregivers' facilities that this HST tax will hit them
[ Page 244 ]
big. What it means is that there will be layoffs, and there will be less care in the seniors' homes.

Long wait-lists in hospitals. Just in Surrey we see that people are already tired. They're fed up. They're frustrated with the long wait times at the hospital — very, very long. Sometimes it takes eight to nine or ten hours.

People were looking for something to happen in this budget. It would improve. But the message in this budget is that it will actually deteriorate because there's no more funding to the health authorities. They should have told that information to the people of British Columbia during the election. On all four major commitments, they misled the people of British Columbia. They provided the wrong information to the people of British Columbia. I will just recap on those four commitments.

Hon. R. Hawes: Madam Speaker, it's not very often that I sit in this House and hear such unmitigated nonsense as I've heard, not just from this member but from pretty much all of the members opposite.

Over and over and over I hear the word "misleading" and that somehow there was a misleading of the people during the election. But the only thing that I hear that's misleading is what I'm hearing from every one of those members.

Those members know what happened. They know what happened from last fall till now. They know what's happened around the world.

In Alberta, for example, since they tabled a budget just a few months ago, after their first quarter, they've had to revise their budget numbers. They have a $2.2 billion decrease in revenue, and now the deficit in Alberta is projected at $6.9 billion. They, like us and other jurisdictions all over the world, had absolutely no idea of what's going to happen.

[1815]

I'd like to just ask those members opposite. If you read…. I would commend the members opposite to taking home the budget document that's available for every single citizen in this province. I would commend them, perhaps, as elected officials…. Perhaps, I might say, it's their duty to read the document, to come in armed with some facts. Instead, they come in with a whole lot of innuendo and, frankly, nonsense.

Here's what I would like to ask those members. Please, tell me…. Here are a couple things in the budget. We have tabled a budget, but the minister has put a caution in here that says there is a risk to the financial plan that's been tabled. "Here are some of the risks, but I would like your advice."

What's going to happen? Will the severe and prolonged U.S. recession last longer than we assumed? Will it last longer? Can you tell us, in your crystal ball, where it's going to go? Is the anticipated global demand for our products going to be weaker than we assume? Do you know the answer? Do you have any idea?

What about the Canadian dollar? What's going to happen with the Canadian dollar next month or the month after or in four months? Do you know? We project it. We project it on the most conservative terms that are possible, but the way that we project it is by talking to the best financial minds that are out there.

We choose a dozen leading economists. They average it. If one of them….

You keep mentioning Helmut Pastrick, but when he comes out today supporting the HST, suddenly you don't want to quote him anymore. The bottom line is that Helmut Pastrick was one of the 12 economists quoted. If you've read his comments…. He got lucky in one, but he says: "Next time I won't be so lucky." We choose the average.

But you know what's interesting? We choose to depend on not just the best minds that we can find out there — our staff, who listen to them and then provide advice — we listen to them.

Now, I remember — all of us remember — the so-called fudge-it budget in 1996, when staff, the excellent civil service that work for us in this province, made a recommendation to that group when they were in power and said: "Here's where the revenues should fall." They said: "We're throwing that out because we actually want to present something in the election much better." So it was a political fix with the numbers.

We used the numbers that were provided by the best economic minds. That's firstly. So when we projected the deficit at $495 million, it was based on an extremely conservative estimate.

Interjections.

Deputy Speaker: Order, Members.

Interjections.

Deputy Speaker: Order, Members. The Minister of State for Mining has the floor.

Hon. R. Hawes: The member that last spoke….

Interjections.

Hon. R. Hawes: No, it's fine. As long as they're making noise and chirping, Madam Speaker, it means they're at least listening a little. You know, even the dullest person will have a few facts pounded into their head if they listen long enough, and maybe, if they want to listen, a few grains might kind of embed themselves and they may come to their senses here at some stage. It probably won't happen, but who knows?

Bottom line here is that if you read the budget document, the budget document does explain the questions the members opposite keep asking. When did anyone
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know? What happened? How did we get into such a revenue slump?

I think the members opposite understand, when the tax figures, the income tax transfers from Ottawa are…. When we are informed as to what the transfer's going to be, I think the members opposite know when that is. I think they're well aware of when that is.

You're being so disingenuous with your comments, and I understand it. You're the opposition. I know you don't want to be the opposition. I know you fought an election and lost, and you don't like it, but these are the facts. You're the opposition. You're going to come up with whatever you can come up with and then just keep repeating it and repeating it. We get that. But you do have an obligation to at least be a little bit factual when you're saying things.

[1820]

The bottom line here is that over and over and over we have explained. You know, I happen to think that the bulk of British Columbians believe everything that we're saying here, because they're the facts.

[Mr. Speaker in the chair.]

There is nobody out there who understood exactly where revenues were going to go. I'd like to know which member on the other side, perhaps the critic for Energy over there…. Maybe he could show us his projections for where gas prices were going to go. Did the critic for Energy have some crystal ball that said: "We're going to have a collapse in natural gas prices, with a tremendous detrimental effect on our revenues"? I don't think so.

Much of that has happened since the election.

Interjections.

Mr. Speaker: Members. Members. It's hard to hear the member speaking.

Continue, Member.

Hon. R. Hawes: I think for a moment I would like to just reflect on a few things. First, what's happened in the last eight years, compared to what was going on before?

I have a responsibility to look at mining in this province at the current time, so let's talk about it. In the year 2000 exploration expenditure in British Columbia on mining was at $36 million. It had plummeted all through the 1990s because of decisions made by those folks when they were in government. By 2008 those revenues had spiked to $367 million, up tenfold in the eight years that we were in government. I think that speaks quite well for our policies.

Industry investment in metal mines and coalmines in British Columbia in the year 2000 was at $213 million; by 2008, $853 million — up over 400 percent. I think that's pretty solid. The value of production: $2.89 billion in 2000 and $6.6 billion in 2008. And a telling stat here: tax revenue to the government in 2000, a mere $58 million; by 2008, $353 million — a pretty healthy record, I think.

But why? What's responsible for that? I recall that through the 1990s this country was actually enjoying quite a boom, in every province in Canada except right here. We had a made-in-British-Columbia recession, and industries like mining left. They stopped investing because they couldn't work with a government that says just the rhetoric we're hearing today. They talk about "your friends in business." "We don't like business" — on that side. They keep talking about it. They keep talking about ordinary British Columbians.

Interjections.

Mr. Speaker: Members. Members.

Member, take your seat, please.

Members, I can't hear the speaker.

Hon. R. Hawes: I'll finish my remarks for today with this. I hear them over and over and over juxtaposing ordinary British Columbians with business, as though they are on opposite ends of the spectrum and somehow they're enemies. If you support business, you couldn't be supporting ordinary British Columbians — over and over. Just go back in Hansard. Read the rhetoric. But the fact is that ordinary British Columbians work for business.

We understand, here on this side, that if you can support a business and make it stronger and make it more economically viable, you are protecting jobs. You are protecting ordinary British Columbians, something you haven't quite grasped over there. A job is the most important thing to most British Columbians, and working for a company that actually has some financial strength and viability is actually good for families, but you don't seem to get that.

Noting the hour, I'd like to reserve the balance of my comments for tomorrow.

Hon. R. Hawes moved adjournment of debate.

Motion approved.

Hon. I. Chong: Sadly, I move the House do now adjourn.

Hon. I. Chong moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m. tomorrow morning.

The House adjourned at 6:25 p.m.

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