Manitoba Committee Hansard — 7 June 1979 (Legislative Affairs Committee, Sitting 2, 31st Legislature, 3rd Session)

31-3-la2

Manitoba — Debates (Hansard)

ISSN 0542-5492 Legislative Assembly of Manitoba STANDING COMMITTEE ON LAW AMENDMENTS Chairman Mr. J. Wally McKenzie Constituency of Roblin Thursday, June 7, 1979 8:00 P.M. Office of the Queen's Printer for the Province of Manitoba

Time: 8:00 p.m. Hearing Of The Standing Committee On Law Amendments Thursday, June 7, 1979 MR. CHAIRMAN, Mr. J. Wally McKenzie (Roblin). MR. CHAIRMAN: We will be dealing tonight with Bills No. 6,

An Act to amend The Condominium �et; No. 7,

An Act to amend The Jury Act; No. 13,

An Act to amend The Hig hway Traffic Act; \lo. 17 ,

An Act to amend The Pu blic Printing Act; No. 20, The Personal Inv estigations Act; No. 25,

An Act to amend The Hu man Tissue Act; No. 27,

An Act to amend The Liquor Control Act; \lo. 45,

An Act to amend The Teachers' Pensions Act; No. 46,

An Act to amend The Civil Service 3uperannuation Act; and No. 50,

An Act to amend The Manitoba Telephone Act. Are there any persons here tonight who would like to make presentations whose names are tot already on this list? If so, would you be kind enough to come to the microphones, there, and eave your names. Under Bill No. 6, I have Mr. Hugh McDonald and Mr. Waiter Kehler; under Bill No. 20 I have i!'lr. Frank Alien, Mr . Norm Larson, Dr. Ralph jjames, Mr . Dale Gibson, Mr . M. Brown, Mr. Jim JlcEwen, Mr. John Breen, Mr. AI Valentine, Mr. Greg Talion, Mr. Bill Enefer and Mr. Andrew Allentuck; Jill No. 27, a Mr . Dario Perfumo. Yes, Sir? IIR. JIM CARTILAGE: Mr .

Chairman, my name is Jim Cartilage, repres enting the Winnipeg :hamber of Commerce, and I'd like to speak on Bill 20. IIR. CHAIRMAN: Okay, Sir, thank you. Shall we proceed then with Bill No. 6,

An Act to amend The Condominium Act. Mr . Hugh �cDonald. IR. HUGH McDONALD: Thank you, Mr. Chairman. I have a nu mber of copies of a brief brief which erhaps the Clerk could circulate. Thank you. I appear on behalf of The Tenants' Asso ciation of 811 Grosvenor, which is Grosvenor House ,partments, with specific reference to co ndominium conversion and the problems that that has aused a number of tenants in Winn ipeg , their submis sion thereon. As the Act now stands, Mr. Chairman,

Section 5 (1.1) contains considerable protection for tenants. s you know, existing tenants are given a 30-day option to purchase their apartments, in the event f a conversion. The Condominium Corporation, who takes over the apartment block and is involved 1 attempting to convert the apartments to co ndominium units, must recognize existing leases and 1ust offer renewal leases in accordance with the Landlord and Tenant Act. Furthermore, no )artment block may be converted to a co ndominium un less not less than 50 percent of the tenants ho have written leases consent.

And I understand that the proposed amendments to The ondominium Act this year would extend requirements to tenants under any kind of xupancy. The Condominium Act, as it now operates under our system of rent control gives a good deal • protection to residential tenants from possible excessive behaviour by co ndominium converters . rmed with that act, I know that several Tenants Asso ciations have been able to negotia te very vourable agreements with co ndominium converters.

However, I understand that as the supply of rental accommodation continues to incr ease, so at the competitive market can provide a real control on rents, our Government's policy is to phase nt controls out entirely. We understand this complete phase-out may start occu rring in about 1other year. My consider ed opinion is that without rent controls, the Condominium Act as it is now written Juld enable a co ndominium converter in effect to eject tenants who do not consent to the 1nversion by drastically increasing their rents. In this way it seems to me that the intent of

Section 21

Law Amendments Thursday, June 7, 1979 5 of our Condominium Act may be thwarted and unscrupulous con dominium converters would b able to elimina te opposition to the conversion. I know that this is not the intention of the Government nor probably of any members of th Legislature. I would the refore propose an amendment to The Condom inium Act by insert ing a requir emer whereby a condom inium converter must offer each existing tenant a lease at a fair market rer for as long as a tenant wishes, such lease to be non-assignable and terminable by the tenant � any time upon 30 days notice.

A draft clause is attached to my brief for your consid eratio n. A provision similar to the above was accepted by the developer who converted 55 Nassau t condominiums, so that I would expect that con dominium developers could live with such a provisi ci in the Act. We look forward to your consideration of this matter, which is of concern to a large numbe of tenants in our province. MR. CHAIRMAN: I thank you, Mr. McDonald. Are there any questions of commit tee members to Mr. McDonald? MR.

McDONALD: Perhaps I could just read through the proposed amendment and I am not a expert in drafting legislation and perhaps there could be changes. lt seems to me that at the time of registering a cond ominium there should be an addition• requirement for the cond ominium corporation to file a statement that each residential tenant wh on the date of registration is in occupation has been offered a written lease of the premis es occupie by him for such term as the tenant requests at a rental not to exceed the fair market rental there< as determined by agreement or arbitration from time to time, such lease to be non-assignable IJ the tenant and terminable by the tenant at any time upon thirty days notice.

MR. CHAIRMAN: Any que stions? Thank you, Mr. McDonald. Call Mr. Kehler, Waiter Kehler. MR. WALTER IKEHLER: Thank you, Mr. Chairman. I am appearing as the Chairman of the Real Property Su bsection of the Manitoba Branch < the Canadian Bar Association and really only to introduceoour spokesman. On behalf of th Su bsection we have a subm ission to make to you in respect of the proposed governmer amend ments to The Condom inium Act as well as some further amendments that we are ourselve suggesting.

What we have done is we have gathered a committee of a number of the leadin practitioners in the legal profession in the field of condominiums, people who are familiar with th problems that this legisla tion creates, and they have worked in conjunction with the Registrar-Genen of the Land Titles system to try to formulate amendments that we think to be most workable. would ask Mr. Myron Calof of the law firm of Buchwald, Asper, Hentele ff, to actually present th presentation that we have to make to you. MR. CHAIRMAN: Very good. MR. CALOF: Mr.

Chairman, I too have a form of written subm ission in the form of a letter addresse to the Attorney-General some time ago. I hope I have enough copies for all present; I am not certai1 Perhaps I might begin because the contents of the subm ission will not become that relevant f< a moment or two. As Mr . Calof has indicated, since the introduction of Bill No. 6, a special commit tee of the Re; Property Su bsection has been studying both the provisions of the Bill as well as The Comdominiw Act generally. Those members of the committee who could be here tonight are Mr.

Robert Smet hurs QC, a partner in the law firm of D' Arcy and Deac on; Mark Shulman, a partner in the law firm < Shu lman and Shulman; Jeffrey Selby of the law firm of Norton, Schwartz, McJannet, Wein ber! myself, a partner in the law firm of Buchwald, Asper, Hente leff and Mr. Norm Goltsman, a partnE of the law firm of Simkin, Cantor, Goltsman and Ros en berg, could not be here tonight.

Between them, we believe the members of our committee have extensive knowledge an experience with The Condominium Act, implementations of _ its provisions and the issues an problems facing those who, whether they are unit owners, condom inium corporations, or develope1 of con dominium projects, must work within the confines of this legislation. The commit tee hE concluded its deli berations and wishes to make various rec ommenda tions and suggestions. Som of these concern provisions of Bill No. 6, while others deal directly with The Condom inium Act E 22

Law Amendments Thursday, June 7, 1979 presently formulated. The committee's rec ommendations are dealt with in the letter of May 18 th to the Attorney-General, which has just been distributed. And as I don't wish to take up any more of your time than is absolutely necessary, some of my remarks this ev ening will be merely a sum mary of the contents of that letter and by ref erring to it now, I'd ask that it be included in the record of our submission.

With the exception of those points raised here, the com mittee is in comple te agreement with the amendments brought about by Bill No. 6. it's bare land unit provisions will clear up uncertainties n the present Act and will broaden its scope and application to a new form of housing and shelter ::>ption which has been adopted in some other jurisdictions. Other provisions of the Bill deal positively :md in a remedial manner with difficulties encountered in the past. We believe these provisions Nill generally assist and benefit all persons as a whole who are involved with The Condom inium 1\ct.

Moving on to deal with our specific rec ommendations, they are as follows: Sec tion 2(3) is being added to the Act by the Bill. lt appears that the reference to Su bsection '6.5" is incorr ect and should have read "6(5 )". The comm ittee therefore sugge sts that

Section 2 3) read as follows: "Unl ess otherwise shown on a plan referred to in

Section 6 (5) the boundaries of a bare land mit shall be deemed to extend vertically upward and downward without limit. " The amendment to su b-clause (1) (

f) of Clause 5 proposed in Bill 6 would require the Declarant o obtain not only the consent to registration of all persons having registered encum brances against he land or interest appurtenant to the land described in the Plan, but also the consent of persons 1aving inter ests or estates in the land in respect to which Caveats had been filed.

While the comm ittee !oes not dis agree with the general requirement that Caveators must consent to the Declara tion, 1 strong objection has been made to includin g within this category of Caveat holders those who 1ave filed a Caveat claiming an inter est or estate by virtue of a residential tenancy. Extending the equir ement of consent to such a Caveator would be contrad ictory to the words and intent of

Section ), sub 1.1 (

a) which provides that only 50 percent of residential tenants need consent to a registra tion. f, in addition, the consent of any one tenant who had filed a Caveat was req uired , a single tenant :ould prevent registration effectively increasing the required consent to those of 10 0 percent of en ants. The com mittee is of the opinion that this was not the object of the proposed amendment. Rather t was that adding to the necessary consents the consent of persons holding interests or estates 1 respect of which Caveats have been filed cleared up any uncertainty in Su bclause (1)(

f) of Clause I, which had used the term "regis tered encu mbrance s" , in that and firstly, Caveats are not 'ncu mbrances and secon dly, Caveats are filed rather than registered. In light of the fore going, the com mittee rec ommends that Subclause (1) (

f) of Clause 5 be amended .s follows: "Clause (1) (

f) of the Act as amended by adding thereto, at the end thereof, the words "or interests 'r estates in the land in respect of which Caveats have been filed, other than Caveats claiming n interest or estate in the land that is the su bject of the Declaration by virtue of a residential �nancy".

With the amendments brought about by Bill 6, a Declaration will have to contain a statement 1at each residential tenant who, on the date of registration is in occupation under a lease of any ind, has been or will be given an option, exercisable at any time within 30 days after the date f receipt of the option, to purchase as a unit the premis es that are the su bject of the lease at price not exceed ing the price at which the un it will be offered to the public and on terms that re not less fav ourable.

While no objection is made by the committee to the sugg ested amendment, the committee does 'ish to register an objection concerning the scope of persons to whom the option must be extended. there there is some period of time between the date of registration and the date at which the eclarant is prepared to sell the units, there is the possi bility - and the longer the period the reater the possi bility - that those who were tenants at the time of registration are no longer mants at the time of sale. lt is the opinion of the comm ittee that the tenant who has voluntarily '.lcated the premises and selected alternate accomodation prior to the Declarant extending any ptions to purchase, has no further interest in the premises as residential acco mmodation and 1erefore should not be the automatic reci pient of an option to purchase the premises.

This would e in contrast to the person who was in occupation at the time of registration and who has continued 1 remain in occupation at the time the options would other wise be given and who, in the opinion f the comm ittee, would be a logical recipient of the option. Based on the foreg oing, the com mittee rec ommends that Su bclause (1.1) (

b) of Clause 5 be 11ended as follows: "Clause 5( 1.1 )(

b) of the Act be amended by adding thereto, immed iately after the word 23

Law Amendments Thursday, June 7, 1979 in the second line thereof, the words "un der a lease of any kind", and by adding thereto, at th end there of, the words "u nless at the time the option would otherwise be given, the tenant ha vacated the premises". Bill 6 proposes to delete Section (1.1) (

d) of Sect ion 5 from the Act. Declarations registered aftE September 1, 1976 and prior to enactment of Bill 6 must contain the statement that the Corporatio is the Assignee of the Lessor in respect of all leases of any kind of the land that is the su bje< of the Declaration or any portion ther eof and in effect on the date of registra tion. In view of th deletion of Su bsect ion 1. 1(

d) of

Section 5 which the comm ittee is in comp lete agreement with, th comm ittee rec ommends that the bill provide for the automatic deletion from all Declaratior registered during the aforesaid period of the statement above referred to concern ing assignmer of leases. The proposed new Su bsect ion (7) of

Section 6 would make Su bsection (1) of that sect ion - and, by the way,

Section 6 deals with the contents of a co ndominium plan - inapplicable to plan upon which all units were bare land units but provide, however, that if a building was show on a plan the Examiner of Su rveys could require compl iance with any part of Su bsect ion (1) whic he deemed necessary. A bare land co ndominium plan would be one upon which one or more units would be define by deline ation of horizontal boundaries, without reference to any building s.

Therefore, while it mE be unlik ely, it is nevertheless possible that a bare land plan could include both bare land unil as well as what I would describe as building units. The reference to building units, in this contex would mean co ndominium units defined under present legislation by reference to buildin walls. If Su bsection (1) was applicable to a plan upon which some units were bare land units and sonr were building units, a strict interpr etation of Su bsection (1) and particularly Su bsection (1) (

b) woul require that all units, including bare land units, be described by reference to buildings. In the cas of bare land units separated from building units by a considerable dis tance, one could imagir horrendous metes and bounds descriptions of bare land unit boundaries by reference to buildin� located a considerable dis tance away.

In the committee's view, the difficulty described above can be remedied by making Su bsect ic (1) inapplicable to a plan upon which one or more units are bare land units, rather than all uni being bare land uni ts, and then relying on the dis cretion of the Examiner of Su rveys to determir any necessary compl iance with Su bsection (1) in the event that buildings were shown on the pla1 Taking into account the fore going, the committee recommends that Su bsection (7) read E foll ows: "Su bsection (1) does not apply to a plan upon which one or more units are defined by deline atic of horizontal boundaries thereof, without reference to any buildings, but if any building is sho 111 on a plan the Examineroof Su rveys may require compliance with any part of Su bsection (1) whic he deems necessary, in respect of such building ." During the course of the committee's deli berations, concern was expressed by Mr.

C. Evan District Registrar of the Winnipeg Land Titles District, about the pos siuilit y that plans referred ! in Subs ection (5) of

Section 6 might be drawn by unqua lified persons if Su bsection (7) of that sectic elim inated the operation of certain portions of Su bsection (1) . To deal with this concern, Mr. Evar sugge sted the following amendments with which the comm ittee is in complete agreement. With respect to Su bsection (1) (

d) of Sect ion 6, that that

section of the Act be repealed, ar in respect of Su bsection (2) that it be repealed and the following su bsection be su bstituted in i place: A plan and any ame nding plan shall not be registered unless: (

a) it contains the certificate of a land su rveyor certifying that he was present at and personal superintended the su rvey represented by the plan or ame nding plan, and that the su rvey and pia or amending plan, are correct; and (

b) it has been approved by the Examiner of Surveys. With respect to Su bsect ions (8) and (9) of

Section 8 of the Act as presently formulated, it w< the unanimous opinion of all mem bers of the com mittee that, firstly, the terms of a mortga� obligation should not be modified in any manner by the registration of a Condominium Declaratic and Plan. Any modifications as to prepayment, partial prepayment, etc., should be the su bject an agreement between the appropriate parties. Sec ondly, Su bsect ions (8) and (9) should be applicable only to encu mbrances which have some time been registered against all uni ts and common interests.

On a strict inter pretation the present wording of Su bsect ions (8) and (9), the partial dis charge rights therein could be applicab to an enc umbrance registered against less than all units and common interests, even just one ur and its common interest. lt was the view of the comm ittee that the basis for obtaining partial dis charges, namely tt 24

Law Amendments Thursday, June 7, 1979 Jf a portion of the sum claimed, determined by the proportions specified on the Declaration for �ontribution to common expenses, was appropriate only if the encumbr ance had been , at one time, �pplicable to all uni ts and common interests. If the enumbr ance had been registered against less han all uni ts and their common interests, but each of the units was entitled to obtain a partial jischarge by paying the portion just mentioned, the encum bered units could all be dis charged, eavi ng a portion of the encu mbrance debt outst anding without any security. For those reasons, the com mittee recommends that Su bsection (

m) of

Section 1 of the Act be !mended to read as follows: "encum brance" - and this is the definition of encum brance - "encu mbrance" means a claim hat secures the payment of money or the performance of any other obligation and includes a charge, l mortgage and a lien, except as otherwise provided in Su bsection (9. 1) of

Section 8". And that Su bsection 8 of

Section 8 be amended to read as follows: "Any uni t and common interest may be dis charged from an encumbr ance by payment to the :laimant of a portion of the sum claimed, determined by the proportion allocated to that uni t in he Declaration for contributions to the common expenses". And that, furthermore, the following Su bsection (9. 1) of

Section 8 be added: "F or the purposes of Subs ections (8) and (9) "enc umbrance" shall mean an encum brance which 1as been registered against all the units and common interests, and shall exclude a 1ortgage' '. The comm ittee is of the opinion that condom inium corporations should be given greater flexibility 1 determ ining whether or not to appoint an insurance trustee. This would enable the condominium orporation to avoid the expense of an insurance trustee and to provide a means of controlling 1surance proceeds, their disposition, and coliance with Sections 19 and 20 of the Act. In furtherance of the above, the committee rec ommends that Su bsection (2) of

Section 17 of 1e Act be amended to read as follows: "Any payment by an insur ere under a policy of insur ance entered into under Su bsection (1) shall, otwithsta nding the terms of the policy, be paid to the order of the insurance trustees, if any, or s otherwise designa ted by the Declaration or By-laws of the Corporation, otherwise shall be paid > or to the order of the Corporation; and, su bject to Sections 19 and 20, the Corporation shall >rthwith use the proceeds for the repair or replacement of the damaged units and common elements J far as the same may be lawfully effected ".

While Bill 6 contains no amendment in respect of Sections 19 and 20, the comm ittee has !-examined these sections in light of the bare land co ndominium concept. lt was the view of the )mm ittee that in the event of damages described in

Section 19, the value of improvements made , a bare land unit by the owner thereof should not be taken into account in dete rmining whether · not a repair vote is necessary. In any event, the uni t owner himself is responsible for the repair of damage to improvements , his unit and in the case of a bare land unit the entire residence or other structu res constitute e improvements. If there is even total destructi on, the bare land unit owner still has his unit, unlike e building unit owner who, upon destruction, loses his unit in a physical sense.

Because his building 1it has to be replaced in concert with replacement of other building units, the building unit owner 1rticipates, under Sections 19 and 20, in a determination of whether or not to re build. However, e bare land unit owner need not work in concert with other bare land unit owners; the choice whether to rebuild or not to rebuild is his alone. Therefore the value of his improvements, which ! alone can decide to rebuild or not, should not be inc luded in the determination of whether to aintain the con dominium corporation or terminate its existence.

The inde pendence of bare land unit owners, as just described, does not, however, extend to 1mmon elements. In the case of common elements, there is a sharing, and if there is destruction e common elements must be rebuilt on a co-operative baiis. Therefore, it is appropriate to consider e value of the destro yed common elements in making the determination under Sections 19 and I. For the foreg oing reasons, the comm ittee rec ommends that the calculation in

Section 19 exclude e value of improvements made on bare land uni ts and, acc ordingly, that Su bsection (1) of

Section be amended to read as follows: "Where damage to the units and/or common elements occurs the Board shall determine within days of the occurrence whether there has been su bstantial damage to the extent that the cost repair would be 25 percent, or such greater percentage as is specified in the Declarati on, of � value of the units, other than bare land units and improvements thereon, and common elements, mediately prior to the occurr ence." That concludes our Commit tee's recommendations concerning both Bill 6 and The Condominium t, and we do appreciate this opportunity to appear before you and make representa tions. If there �. any questions, I would be pleased to answer them . 25

Law Amendments Thursday, June 7, 1979 MR. CHAIRMAN: Thank you, Mr. Calof. Any questions? I thank you, Sir. I call Mr. Frank Alien. Bill No. 20. MR. ALLEN: Thank you, Mr. Chairman. MR. CHAIRMAN: Before you start, Mr. Alien, you are representing Mr. Boyd, whose name 1 ha1 here and a Mr . Langrud. Is that correct? MR. ALLEN: Yes, Mr. Boyd is the Director of the Credit Grantors Association of Winn ipeg. IV Langrud is identifying with the submis sion I have prepared, of which 1 have extra copies I'd lil to distribute if I cou ld. Mr.

Chairman, as my submis sion indic ates, I'v e been ins tructed that the Winn ipeg Chamber Commer ce, Creditel and Equif ax Limited join in the subm ission. However, the Winnipeg Chamb of Commerce have their own representative here tonight in the person of the President. Credit has a representative here in the person of Mr. Graeme Haig, who I don't think is on your list , 1 came in after you called for persons to come forward.

In any event, it is the concern of my client and these others, that The Personal lnvest igatic Act will lead to three basic things: (1) is that it will add to the bureaucracy and further government controls on busine ss that are un necessary; (2) we feel that its implementation in its proposed for will severely restrict the conduct of busine ss; and (3) we feel that the implementation of the proposE Act in its present form would su bstantially incr ease the cost of doing business.

From inqu iries that I have made concerning the purpose of the Bill, it is to fill what is now believE to be a gap in the existing legislation, namely, to provide notice to persons with respect to who personal investigations are conducted. So far as the intent of the Act is concerned, my client hi no real objection to it but questions its necessity because consent or notice is already requirE by

Section 3 of the present Act, which is Chapte r P 33, Statutes of Manitoba 19 70. Even if v err in our view as to the need for the Act, it seems that the proposed legislation goes far beyor merely filling a void in the present legislation, but creates problems for business, as well as tho: who may wish to use credit and may well have the effect of creating a whole new branch bureaucracy at a time when our present government is advoca ting restraint and purported attempting to restrict the growth of bureaucracy.

I realize that the Act is aimed to an extent at what to some may appear to be competing interes - busine ss on the one hand, that is those who require personal investigations, and those seekir credit on the other, but it fails to recog nize that the two interests are not competing but indee identical.

Individuals seeking credit or a "benefit" as it's described in the Act, which includ1 insurance, the right to rent property and the like, to which the Act applies want those benefit Those seeking the reports are people who are in business of supplying those beneftts, so that is in the mutual inter ests of lboth parties that a comparatively free flow of credit and char act information is maintained. lt is the fear of my client, and I understand it is the fear of others the industry, that is the indus tries supplying such reports, that the passage of this Act may w1 adversely affect busi ness in the province of Manitoba and certainly will incr ease the cost.

A clause by clause analysis of the Act gives rise to many criticisms. To review each would r doubt take more time than I am allotted and if there is no limitation on my allotted time, certain more time you'll want to listen, and therefore I don' t intend to deal with each specific matter, b rather to high light those that I think are of importance and I will do so generally as the matte arise in the Bill. I first draw your attention to

Section 2, Su bsection (2), which exempts corporations ar partnerships from the application of the Act. lt goes a little bit further, however, and also exemp from the application of the Act, officers of corporations and partnerships, and employees corporations and partnersh ips.

The result is, I submit - I state this somewhat differently in n submis sion - that while one would be prohibited from asking for a personal investigative repc on Frank Alien, unless I had applied for a benefit and given my consent or I was given notic The fact is, if you ask for it on the law firm, of which I am a partner, Alien and Booth, they cou give you all the information you wanted. The same would apply, if I was a Director of a corporatio even further, they could give you information on my secretary under that particular exemptior

Section 2, Su bsection (2)(

b) is applicable to reports on applicants for ins urance if the applica application is to a private company. lt would not be applicable if the application were made a mutual company. In other words, in that particular ins tance, the Act does not achieve wh apparently it was designed to achieve and is disc rimina tory. These are two ins tances that I think they cou ld be expanded on; that I think exemplify a poi I will later make that the full ramifications of the Act have not been thought out. 26

Law Amendments Thursday, June 7, 1979 now turn to the que stion of the need for registra tion. If the purpose of the Act is merely to give notice to a su bject who may have applied for a benefit, it is difficult to see how registration of persons or organizations in the business of supplying such information is going to be of any benefit to anyone and as indicated previously, does nothing more than create another department )f government for no good reason. Even if one were to concede that registration is necessary, I must say that I find difficult y in jete rmining just who must register.

I think a fair inference would be that only persons or organizations Nho make it their busine ss to supply credit and character information were intended to be registered. take this from the reading of

Section 3, Su bsection (3), which refers to "personal reporting 1gencies." But Su bsection (2) of

Section 3 prohibits any person from providing a personal report mless registered under the Act. A personal report is defined by

Section 1(

h) as any report, written >r oral or in any other form of com mun ication, of information obtained from others in the course >f making a personal investiga tion. lt is entir ely conceivable, therefore, that if 1 received an inq uiry 1bout a former em ployee by someone considering he or she for employment, and if in the course >f answ ering such an inqu iry I were to conv ey what had been told to by still a prior employer, hen I would have broken the law unle ss I, too, register as a personal reporting agency. My client does not -(I nterject ion)- you get help sometimes from une xpected sources, Mr. :lreen. I'IR.

ALLEN: My client does not itself particularly object to being required to register, although 1e feels that to require registration at all is but a further encroachment by government into the ield of free enterprise. My client is of the opinion that no organization that makes it its business 1f gathering information on individuals for sale to users would object. The problem which it anticipa tes, and does not appear to have been considered by the proponents 1f the legislation, is that the Act requi res that no person shall even compile personnel files un less egistered under the Act.

I find it hard to conceive a business, corporate of otherwise, that might 10t ther efore have to register. Any organi zation or individual that does business with the public 'r has employees could be effected and required to register. That even applies, by virtue of this tatute to the government of Manitoba and to lesser government agencies right down to mun icipal orporations and school boards.

Further, with respect to the registration of personal reporting agencies, I note the rather awesome ower that will be enjoyed by the director. lt is self-evident that, subject to appeal, the director as a very far-reaching power to deny registration to almost anyone. One of the most glaring xamples is where he can decide under

Section 4(1) (

b) that an agency cannot reaso nably be expected > be financially responsible in the conduct of business. This in effect means that any person who rished to enter the field as a private entrepeneur could be precluded from so doing. lt is the small usi nessperson trying to commence a busine ss that will be hurt in this ins tance. To carry the matter to an extreme, but not impossible, situation a mun icipality that had run foul of the Act could be suspended, in which case it could no longer compile files on its mployees. With respect to

Section 9 of the Act, our client feels that it is quite onerous to begin with. This the one that requir es, if I may just digress to read it to you. "E very personal reporting agency 1all com pile information on a su bject in a personal report in such a manner that the full content f the report is readily understandable by the su bjec t." The su bject, of course, being defined as 1e person who is in the report, upon whom they're to report. We think it's particular onerous in ew of

Section 19 (3) to which I will come in a moment or two. But

Section 9, in effect, requi res 1e report must be readily understandable to the su bject of the report.

Taking that in isolation, could mean that computer reports that may be coded, could no longer be permitted, and a great 3al of this information, I am ins tructed, is toda y on computer. lt would mean that if the su bject 1ose to say "I do not readily understand the report", the reporting agency would find itself in fficulty. it's not the director or members of this House that are to decide whether or not it's 1derstandable. lt is the su bject of the report. lt would mean that where a report was done on new citizen in Canada, not familiar with the English language, he would be entitled to receive e report in his mother tongue.

If this is what the

section means, and I cannot interpr et it otherwise, en it means that there is going to be su bstantial cost built into doing busine ss.

Section 19 , Su bsection (3) requi res that every personal reporting agency, no matter what size, 1all provide trained personnel to explain to a person any inf ormation furnished to him under this 1ction or un der

Section 18 of the Act. This I think would be sufficient without the necessity of �ction 9, Su bsection (1) . However, even this could become onerous in certain circums tances, and n thinking there of small busi nesses in this particular field, and I submit should be carefu lly msidered.

Section 10(1). I conf ess that this

section gives me some difficulty. If I read it correctly, then 27

Law Amendments Thursday, June 7, 1979 an investigation can be carried out on any person, provided it is not for the purpose of conferrin a benefit to one who has not applied for it. I n't go into the details of the definition of benefi but I assume from that that other types of investigations into an individual are not precluded b the Act. If I interpret this

section properly, I can see no real objection to it, except in one are< I understand that it is co alon practice in industry and government ike for the purpose of fillin senior positions to seek out, often through the assistance of personnel agencies, the names c persons suited o would be for that position. I know that this happens within the Civil Service c this province.

Section 10 (1) would probably prohibitaany such inqu iry. While I feel that my

interpretation of this

section is correct, I must say that I arrived at thi conclusion only after reading and re-reading a number of times the

section and the

definitions c

Section 1. If I am correct, however, it looks - pardon me, it's creates - that's what it shoul say, an anomaly to which I will make reference later. Refe rring now to Sections 11 (3), 14 (2) and 14 (3): these are the sections that in essence say th< husband and wife or spouses are not defined as husband and wife necessarily in the Act, are ne to be reported in each other's reports if they choose not to be. But I think this raises some ver great difficulties. A wife wishes to obtain credit at a department store, she's unem ployed an com pletely dependent upon her husba nd.

The husband refuses consent to investigate and he ha not applied for a benefit. The wife may well be turned down to her detriment. Or if a husban is a financial burden to his wife, who would otherwise be financially sou nd, then a report must b silent on the question. Is this fair to a credit grantor? The fact is that frequently the risk involve in dealing with a married person is affected not by the applicant thems elves, but by their spousE lt would seem to me that if I were a credit grantor and could not have this information, then cred would not be granted.

In short, the probability is that many persons seeking a benefit may be denie because of the lack of information that, by law, cannot be provided. However, while I believe that what I have said with respect to Sections 11 (3), 14 (2) and 14 (: is the intended result, I do not think that it'll work under this Act. While a wife may have a separat file, and while a report cannot refer to her spouse, there is nothing to prevent a user from requestin a separate report on the spouse without consent and without notice.

The spouse has not applie for a benefit, and the user has no intention of offering the spouse a benefit. The refore the Ac if I interpret

Section 10 (1) properly, does not prohibit an investigation of the spouse.

Section 14 (1) . Generally we do not find this

section objectionable and inde ed I understand th< to a large extent it merely reflects the present practise of my client. However, there is one exceptio to this, and that is

Section 14 (1) (d). Is it to be, as this

section sug gests to me, that a potenti< grantor of credit is not to know if a borrower is being sued for a su bstantial sum of money an for which a court might find him liable. Surely this is the very type of information that a cred grantor would want. If he can not get it from independent sources, then the door is left open t fraud. More likely, however, credit will be withhe ld, not because of what the report says, but becaus of what it does not say and is not permitted to say. There are certain other sect ions to the Act that concern us. One example is

Section 13 (2) an 19 (1) . lt seems that by virtue of these provisions and by implication from others that it is intende that once a file is opened on a su bject, it should be maintained in perpetuity. If this is not th case, then the Act could not be complied with. The problem is, as I am instructed, that most not all companies in the business of providing credit reports update their files on a regular basi� some as frequently as monthly in the case of my particular client, and ofttimes destroy informatio that is more than a matter of a few months old.

To have to change now would be very costll a very costly operation for them, in terms of utilizing additional space and additional help. This concept may at first be difficult to understand, for I am sure that most of you have th same concept of personal files as I have, that is, a continual assem bling of inf ormation that continue to pile up during the individual's lifetime. I am instructed that this is not so. The facts, as I ar givinq them, is that, for credit purposes at least, only the most recent inf ormation is given.

Fe example, if a person for some reason fell behind in financial commitments, this information woul go into a control agency such as my client, but if the person was able even in a short time t bring his payment current, his prior delinque ncies would not be reported. Lastly, but certai nly not least in importance, is the number of notifications that are to be ser out to su bjects. ·By reference to Sections - I have left out one

Section number there - 1· su bsection (1) ; 12; 13 (1) ; and 22(4), and this isn't applicable in every case but is conceivable the: four notices that have to go out with respect to one inv estaga tion. As it would be up to th inv estigators, that is, the reporting agencies, to prove compliance with the Act, no doubt the y woul, have to use registered mail. The basic cost to my client based on current usage of its servicE would be $1 2,9 60 per month. This figure is not an estimate. lt is based upon the actual usag of my client's service as suming Bill No. 20 was in force today.

A breakdown of this figu res is availabl for you if you wish. This would be an increased cost without additional income. Of course our clier 28

Law Amendments Thursday, June 7, 1979 ould always incr ease its charges for its services to make up this additional cost. However, that 1ill be paid by the credit grantor who, no doub t, will pass it on to the consumer. They could also efuse to supply inf ormation to users outside of the province. That of course would only reflect dversely on those seeking credit outside of the province. Even if the notices could be sent by regular mail, the incr eased cost to our client would be 3,840 per month, which represents approximttely 10 percent of its sales and is more than their resent profit per month.

I do not suggest that I have exhausted all of the possible criticisms of the Act. I am sure that ifferent busi ness concerns will be affected in different ways. I have tried to explore some of my lients main concerns. However, I feel that I have drawn to your attention sufficient to jus tif y what am about to say in conclusion. I do not know what particular shortcomings in the present Act are intended to be overcome. do not know what particular abuses there may be in the gathering of personal reports that it • intended to avoid. Without specific knowledge, it is difficult to be constructive.

I do think however, 1at the proposers of this legislation, no matter how jus tified or well intended have, in an effort ) correct what they see as abuses or differences, have not examined the fu ll ramifications of the �gislation.

I can assure this Comm ittee and the honourable minister, that my client, and I am sure many !hers, is prepared to join with any interested parties and representatives of the government, to xamine any problems there may be and to offer assistance in preparing amendments to the present 1gislation or if necessary, new legislation that will overcome any problems that possibly exist, but t the same time not undul y interfere with comme rcial practise and need, as we are sure will occur Bill No. 20 becomes legislation.

I ther efore invite you not to report this Bill to the House but rather defer it for further )nside ration. Thank you very much. IR. CHAIRMAN: Mr. Green. IR. GREEN: Mr. Alien , I want to direct your attention to some of the clauses that you have referred 1 and some that you have not referred to. R. ALLEN: Yes. R. GREEN: You will look at 4( 1) : The director may refuse to register a person as a personal porting agency where he has, and then take (

b) and (c), having regard to his financial position . that you referred to - and secondly, (

c) the past conduct of the applicant affords reaso nable ounds to belie ve that he may not carry on busine ss in accordance with the law, or with integrity 1d honesty. Now do you think that the director, in examing (

a) and (c), would, or could legally consider that e man has five writs against him? R. ALLEN: Yes, I think he should. R. GREEN: Yes, so then he is entitled to do what the personal reporting agency is prohibited )m doing under 14 (1 ). R. ALLEN: Correct. R. GREEN: The director is a hypocrite. He says: "You can't do it but I can ". �- ALLEN: Well of course, it will be the Legislature that will be putting this in his mout h, Mr. ·een. �- GREEN: Yes, so if we did that, we would be hypocrites. �- ALLEN: That's correct. �-GREEN: If you will look at 9(2).

You talked about 9( 1) , and you were very concerned in making ormation unde rstan dable to a su bject. I am much more concerned with making information derstandable to a bureaucrat. 29

Law Amendments Thu rsday, June 7, 1979 MR. ALLEN: Well, Mr. Green, that's why I made the comment that 9( 1) deals with the su bjec under sta nding. lt doesn't say what the director will understand . I realize when we come over tc 9(2), but 9(2) doesn't cur e the problem and I agree with you that he might not understanc either. MR. GREEN: Well, 9(2) says that I have to provide information that will be unde rstandable to the satisfaction of the director. MR. ALLEN: Yes. MR. GREEN: Now, in your experience in life, have you from time to time found it difficult to make things unde rstandable to a bureaucrat? MR.

ALLEN: Yes, I must conf ess I have had that difficulty. MR. GREEN: But this law says that you must make it understan dable to some governmen bureaucrat. MR. ALLEN: That's right. MR. GREEN: Now, isn't that as serious a problem as 9( 1) ? MR. ALLEN: lt could be; I didn't say it is, it could be. MR. GREEN: lt could be. Now, going to 10 (1) , and I had some trouble; I'm not sure that I have the same meaning as you have.

But my under stan ding from 10 (1) is that I cannot, or a perso1 cannot cause a personal investigation to be cond ucted unless the su bject has applied for a benefi1 Now I want to put a hypothetical situation. Supposing that there is the son of a widow who is being wooed by somebody that he consider to be a rake, does this sect ion - as I understand it - prohibit him from trying to find out abou that person? MR.

ALLEN: I don't believe so; no, and the reason I don't, is that my first impression was, .. prohibit any type of a personal investigation as you and I would normally understand that excep where a benefit had been applied for. MR. GREEN: Right. MR. ALLEN: But when I took the words "personal investigation" and referred back to Sectio1 1 in the De finition , a "personal investigation" only pertains to an investigation for the purpos< of conferring the benefit. MR. GREEN: Then I have to repeat, the

Section then escapes me. lt says: "you cannot conduc a personal investigation un lsss the subject of the investigation has applied for a benef it" . MR. ALLEN: Right. MR. GREEN: But you're saying that a personal investigation is only where a benefit has been appliec for. MR. ALLEN: Within the meaning of that section. MR. GREEN: So then, what is ... ? MR. ALLEN: Well then, "benefit" also, however, is defined. MR. GREEN: "B enefit" means ... MR. ALLEN: Means credit, insur ance, employment, tenanc y, lease, and rental of goods. MR.

GREEN: Wel l, but it says: "no person shall conduct or cause to be conducted, a personc investigation to which this Act applies, un less the su bject of the investigation has applied for • 30

Law Amendments Thursday, June 7, 19 79 benef it". Which means that the su bject has not applied for a benefit, you cannot conduct a personal investigation of him. At least that's the way I read it. MR. ALLEN: That's right. But a personal investigation un der the Act is only a personal investigation for the purpose of conferring a benefit. . UIR. GREEN: Well, isn't this a dog chasing his ta il? UIR. ALLEN: Absolutely. I didn't want to say it in so many words, but I think it is a terrible piece )f legislation. I don't think it has been thought out at all.

I don't really appreciate the problems t is designed to overcome. If there are such problems, as I say we would be happy to help resolve hem but, without knowing what they are, it's very hard to be very constructive. UIR. GREEN: ... 14 (1 ). III R. ALLEN: 14 (1) . III R. GREEN: You have alluded to this, and I also have a problem with it. "No personal report ;hall contain informa tion regarding any civil action against the su bject which has not been determined )r disposed of . . . " Now, the fact that I may issue a Statement of Claim against you does not mean that you are esponsible to me for what I clai m.

III R. ALLEN: That is correct. III R. GREEN: But doesn't this Act prohibit me or prohibit a person from sayi ng an action has been :ommenced against you, which is a matter of public record, which anybody can go and find >Ut. IIR. ALLEN: That's what it does. IIR. GREEN: And I take it from the files of court that these things can be found out relatively 1 uickly and alphabetically. IIR. ALLEN: That's right. �R. GREEN: So all this does is �R. ALLEN: Or chronologically. �R. GREEN: Yes.

All this does is prevent the investigator from acting as a Clerk, in fact, for the ·erson seeking the investigation, who would otherwise have to go down and find out for imself. IR. ALLEN: All they will be able to do is phone up and hint broadly, "You better go down and earch the records yourself." IR. GREEN: lt will result in a lot of bootleg ging. IR. ALLEN: That's all. Frankly, I think it's silly. IR.

GREEN: Now, 26. 1 concur with your secti on, with your opinion, that this provision that this et would prevent me from asking you about your previous stenographer, who happened to leave nd you can't hire her back because you have another stenographer. IR. ALLEN: Correct. IR. GREEN: And if I ask you, I am committing an offence, because I am not registered under 1e Act, or, excuse me, if you tell me you are committing an offence. IR. ALLEN: No, I think, as I read the Act, I can tell you how I appraise that girl's services. 31

Law Amendments Thursday, June 7, 1979 MR. GREEN: Yes. MR. ALLEN: But supposing, Mr. Green, that because I do a great deal of litigation work and yo1 do too, but let's assume you didn't; let's say you did solicitor's work and you asked me abou the secretary and I said, "Yes, she was very good for me", and you ask people how was she i1 solicitor's work. I don't think, without being registered under the Act, I can then say, "Well, sh' didn't do solicitor's work for me but she did for her prior employer, Mr . Smi th" and he tells mt she was very good. I think the minute I utter those words, I have breached the Act.

MR. GREEN: Well, haven't you breached the Act when you have told me, yourseff, because personE report means any report, whether written or oral, or in any other form of com mun ication of th' inf ormation obtained from others. MR. ALLEN: Yes, from others. MR. GREEN: From others. So what you are sayi ng is that you can tell me about your ow1 information but you cannot tell me about others. MR. ALLEN: Right. That's the way I interpret it. MR. GREEN: All right, let's assume that you told me that your partner found her to be a ver good person. That would be illegal. MR.

ALLEN: I think that might be covered , too, in here, by something to do with agency. I jus forget where it is. MR. GREEN: All right then, go back to your example. Let's suppose that you said that the othe firm that she came from before she worked for you, told you that she was very good. MR. ALLEN: Yes, that's illegal under the Act. MR. GREEN: Yes, that would be illegal. If I used that information, under

Section 26, and hire1 her - not didn't hire her - but I thought it was good inf ormation and I hired her, that woulf be illegal. MR. ALLEN: If you did it on the basis of the information I gave you, yes. MR. GREEN: Well, I gather that I would do it because you were telling me she was a very goo1 person or that you understood from somebody else hhat she is a very good person, and if I the1 hired her because I thought that I was getting valid information, that would be illegal. MR. ALLEN: Right. MR. GREEN: Okay. MR. CHAIRMAN: The Honourable Member for Winnipeg Centre. MR. J.R. (Bud) BOVCE: Mr .

Alien, from your familiarity with the Act and the amendments propose1 in this particular bill . . MR. ALLEN: I'm sorry, Sir; I can't hear you. MR. BOYCE: From your knowledge of the Act itself and from the amendments which are propose1 to the bill, I wonder if you could express an opinion which arises out of your statement in you brief, , on Page 9, that they can refuse to supply information to users outside of the province, whicl implies that there exists a relationship between people in the province and outside of the provinc1 as far as providing information is concerned . MR.

ALLEN: The pu rpose for that statement - and possibly I should have gone into more detail 1 didn't want to take too much time - is that special and further notices must be given when the report and the information is going outside of the province. And all I'm suggesting is that t1 reduce costs, to which I make reference there, they could stop doing that. And, as I understan1 32

Law Amendments Thu rsday, June 7, 1979 the present Act, there is no need for a further notification merely because the information is going outside of the province. what he is is speaking of, I suppose, is the type of thing where somebody migh t apply by mail order or otherwise, and more in busine ss, I would think, where a great many of the suppliers are in eastern Canada, and the storekeeper applies to a wholesaler in Toronto for credit and a supply of goods on credit. And under the new Act, if that application comes to, say, my client in Winnip eg , my client would have to give a notice to that storekeeper.

And I'm suggesting that in certain circums tances, when you open a file and so on, you can get as many as four notices, if in fact there was an initial enquir y, say, on a new storekeeper. That's the point I am making. So I am saying our client might save some of its cost by virtue of not mailing one notice, by simply refusing to give information out of the province. MR. BOYCE: Wel l, perhaps one of my apprehensions is not well-founded and I would appreciate your help. And I don't want to focus attention on any one of the people that you say are members of your assoca tion 's

Schedule A, but I notice that some of them are smaller busine sses that have been in Winnipeg for a long time. MR. ALLEN: That's correct. MR. BOVCE: If what you suggest this bill will do is make it more difficult for these people, what is to prohibit them from contracting with an outfit in Texas, for example, to provide the information, to ask the questions and store the information outside of the province or outside oJ the country :mtirely, to dis pense with the services of the ass ociation? · !II R.

ALLEN: I didn't think of that, particularly, at the time but I can indic ate to you that they would Jrobably then become su bject to registra tion. Because once you start compiling a file . . . This �ompiling a file, I think anybody could be registered. The corner grocer who starts compiling a ile of my bills and accounts could become su bject to registration under this Act, as I read it. So f I decide to circumvent the law by getting a company with a head office in Texas to supply nformation to me; is this what you mean? I am in Manitoba; I want the information. III R. BOYCE: That's right. III R. ALLEN: Right.

And I decide to get it from some large corporation with offices outside of v1anitoba. I still become subje ct to registration the minute I start compiling that information, as interpr et the Act. III R. BOYCE: We ll, with some of the smaller ones that are national, in this sense, that if the credit 1ranting is done or the action is taken as a result of information which has been compi led outside )f the province .. IIR. ALLEN: Yes. IIR. BOVCE: With one of the department stores, for example. IIR. ALLEN: Yes, let's say Ea ton 's , one on the list. IIR.

BOYCE: If they shut down their local credit operation and went comple tely to computers, hat all of the information, if somebody wants something on credit, all they do is apply for credit nd Ea ton 's says yes or no. �R. ALLEN: Yes. •R. BOYCE: Not because they are going to apply for registration or any other action, all they re going to do is have their yes or no from smme head office, which could be in some other rovince or even outside of the country. IR. ALLEN: That's quite correct. I'm sorry; I didn't understand your point.

The other thing, however, : that you get into the situation of an organization like Ea ton 's and they have branches in many arts of Canada, whether they are com piling the information in Toronto or not, having an office ere may well make them su bject to the Act. That's something I really didn't consider. But, evertheless, your point is well taken. 33

Law Amendments Thur sday, June 7, 1979 MR. BOYCE: Yes, well it arises out of your other comment, you know, that there are more an1 more files becoming compiled on all of us. And there was one particular credit card that 1 ha1 some 30 years ago in which my name was mis spelled and it was subsequently corrected by the: particular company; I still appear on mailing lists with my name mis spelled in the same peculia fashion, and it happens to be from outside of the country. So I was just wondering if my apprehensio was rather naive but I don't think it is. If I could sum up, Mr.

Chairman, it appears, if this bill goes through the way it is, it will b more difficult for the credit grantors to compile information and it will make it easier for them t move in that particular direction. MR. ALLEN: Easier for who to move? The larger corporations, eh? MR. BOYCE: The larger corporations . . . centralized files and not necessarily in this country MR. ALLEN: My underst anding of the concern, which I don't think the Act really appreciates, i that by curtailing the free flow of information, credit information, you're not just going to hUI busi ness; you're going to hurt consumer, as well.

Because busine ss is going to have to tighte up in credit. MR. CHAIRMAN: The Honourable Mem ber for Wolseley. MR. WILSON: Mr . Chairman, Mr. Alien, I would tend to support some of the comments of M Alien but he represents, I believe, about 175 busi nesses, accord ing to this brief, and I wonder e on Page 8 you talked about registra tion.

Would you interpr et it to mean, as you indicated to th Memb er for Winn ipeg Centre, that it would mean anyone in that office that answered the telephon1 that partook in any way, shape or form in a file, a person carrying the file from point A to poir B, or can you envison that every person on the payroll of that staff would have to b registered? MR. ALLEN: I do not envisage that at all, no. MR. WILSON: You don't. MR. ALLEN: No. MR. WILSON: I wondered if I could rely on your interp reta tion. There was an indic ation from tt Memb er for lnkster that writs issued could not be reported until they were finalized.

Is that ho you interpr et it? MR. GREEN: I never said that. Mr. Chairman, I said the opposite. MR. WILSON: You did, eh? MR. GREEN: Yes. Unfortuna tely, the member doesn't understand English. MR. WILSON: I wonder ed if Mr. Alien could indicate, does he envision his membership reportir writs that are issued or writs that are finalized. What does the Act state, as you ... ? MR. ALLEN: I don't know what you mean by the term "finalized" when you are referring to writ. A writ is one way of starting a law suit in this province. At least, it used to be, in the Coun Court of Winn ipeg; it no longer is.

And really why the term is even in this Act I don't know. 81 if we're ta lking about a writ in the sense of me commencing a claim against another individw 1 think that they should be able to report it. I think it's facetious that they can 't, because it is matter of public information, number one, and, number two, I am sure that if I were to come · you to borrow a su bstantial sum of money, you'd be very interested in knowing if I was being sue for every thing I owned. MR. WILSON: I wondered if Mr . Alien envisions the comput erized age.

I notice that on all crec applications these days they ask for the social security num ber. Do you feel that governments "' be supplying your mem bers with . . . In other words, will the indus try be computerizing : applications, based on the social security num ber? 34

Law Amendments Thur sday, June 7, 19 79 MR. ALLEN: I am sorry; I am not capable of answ ering that question. MR. WILSON: I see. The other question, I notice on Page 8 you say that only the most recent information is given, and I assume it's correct information by your members. From your experience, what is the present penalty if the information requested is ... Do you see any need tor a time limit? Do you think information ten years previous is something that should be reported, or do you think that ... could you envision a time limi t if this Act goes through? !II R.

ALLEN: Well, I see that the Act now says, 14 years on bankruptcies, and seven years on :tdverse tactual or investigative information is not to be reported by

Section 14 . Whether those :�re the right periods of time, or the wrong ones, I can't tell you. My clients instruct me that those )articular provisions do not bother them, as I indicated in 14 (1). They are only concerned about 3u bsection (d), because of the fact that their members aren't interested in last week's newspaper; hey want to know what the man's doing today. III R.

WILSON: My final , sort of indication, is that I notice in the Unit ed States there's many consumer 1dvocates have been succ essfu l, and I think there was one particular case, I believe it was against :ord Motor Credit, which a couple was rewarded, or awarded through the courts, about $1 50,000.00. wondered if you can tell me if, in your general knowledge, is there any penalty for giving false nformation as it presently stands? Do cases go to court tor false information being given by your nembership, your mem bers. IIR.

ALLEN: I'm not aware of any such case in Manitoba having to do with credit or character eports of this nature, but I have no doubt that if one was made erroneously and maliciously, that 1 law suit could ensue, if for nothing else, tor defamati on. � MEMBER: Even if it wasn't malicious. �R. ALLEN: Yes, even if not malicious, I agree, Mr. Chairman. �R. WILSON: Are you then saying that it is possible that a credit grantor giving false information ould be success fully taken to court? tR. ALLEN: In my opinion, yes. IR. CHAIRMAN: The Honou rable Member for lnkster. IR. GREEN: Mr.

Chairman, first of all, let me apologize. lt was I who used the word "writ"; in ubsect ion (

d) it says "civil action against the subject." The word "writ" is used in (c) , which I ssume could refer to a Writ of Execution. IR. ALLEN: A Writ of Execut ion, and other writs. IR. GREEN: Those are not obsolete, those are still used, with Iatin names, I suspect. IR. ALLEN: Yes, but we're talking there about writs that are statute-barred. IR. GREEN: Yes. So you are not permitted to refer to either an old writ, or a Writ of Execut ion, · anything that is statute-barred? R. ALLEN: Or whatever. R. GREEN: But I was ref erri ng, and should have referred to, Statements of Claim. Mr.

Alien, 1 want to deal with a su bject that has not been mentioned, which I forgot. You people ·e not involved, I gather, with

Section 10 (2), with regard to tests? R. ALLEN: No, we are not. R. GREEN: You have no submis sion to make in that regard? R. ALLEN: No. 35

Law Amendments Thursday, June 7, 1979 MR. GREEN: Then I won't inv ite you. MR. ALLEN: I'm not prepared. MR. CHAIRMAN: Any more questions of Mr. Alien? The Honourable Min ister. MR. JORGENSON: You mentioned, on a couple of occasi ons, the possibility of an increase in th' bureaucracy. I don't know where you get that impression, but I don't see where it's necessary t1 add one single person to the existing staff for the purposes of admin istration of this Act. Then is no intention on my part to add any staff for the admin istration of this particular Bill, any mon than there was in the other Bill.

And I'll also say that a number of the points that you have raisec Mr. Alien, I thank you for drawing them to our atte ntion. We have already taken note of therr and have amendments prepared for them, particularly one that has been frequently mentioned, an1 that was

Section 3(2). I do want to point out that there will be an amendment made to that sec tion, as well as a numbe of others that have been raised during the course of your presenta tion, and the remarks that hav• been made on second reading of the Bill. MR. ALLEN: Mr. Mini ster, if I may just reply on the added bureaucracy, I say with the greates respect, not because I've ever been a member of government in the viewpoint of being an electe' pers on, but I have been in the Civil Service.

And I know that when I left the Attorney-General' Department about 18 years ago, it consisted of seven Crown Attorneys, and I think there's n01 something like 60. And the population in Manitoba has increased by three or four percent in tha time. -(Int erjection)- But apart from that, Mr. Jorgenson ... MR. JORGENSON: That indicates the prolific nature of the lawyers. MR.

ALLEN: One of the reasons that I believe that you're going to have added staff is becaus if you leave the requirements for registration as they are, I think you're going to have a very ver high percentage of busi ness organizations, and other organizations. For example, I notice one c the members of my client 's group is the Co-operative Housing Association of Manitoba Limitec You're going to have them all requiring to be registered . And I think that's a bigger test than possibl is intended. In my submission, I have pointed out that it would appear to me that the intent, by virtue c

Section 3(3), was only people that made a busine ss out of personal investigations.

Whereas th 3(2) goes much wider. That's one reason I thought it would incr ease. MR. JORGENSON: I think your fears, as the legislation was written, were justified. But I am assurin you that that is going to be reworded to limit it to precisely the group of people that you inten to have it limited to. MR. ALLEN: If that is the case, that might su bstantially alleviate that particular problem. But th� is the basis upon which I made that submission. MR. CHAIRMAN: The Honourable Member for Wolsely. MR. WILSON: Yes, I just wanted to, ...

I note on Page 3 that the need for registrati on, you comments here, and I would say that, to Mr. Alien, that if he is successful in his comments, th� if I'm read ing him right, that the registration of persons or organizations in the business of supplyin ... is going to be of any benefit toany one, you're saying it does nothing more than create anothe department of government for no good reas on. Would you then feel that organizations that presently are requi red to register their employee� who do not have the financial clout of your organization, should be given the light treatment.

I refe to the industry which I am involved in, the private bailiff industry, that must register every one c their employees, and register their companies as well. And I see that the government is alread set up inthis particular area. So, like the Min ister of Consumer Affairs has stated, since this activit is _already in place, he sees no need to add additional employees. MR. ALLEN: We ll, as I say, if the Bill goes through, possibly you can ask the Min ister, not thi year, but the next Session of the Legislature, how many employees there are. And I hope that he' right and I'm wrong.

The point I think of your question, Mr. Wilson, is, are you saying that mere! 36

Law Amendments Thursday, June 7, 1979 1ecause certain people have to be registered now, that we should con tinue on that bent, or is it 10t the policy of the Cons ervative Party to do away with bureaucracy? · �R. WILSON: My stand has been to decrease the consumer's department, and to get less overnment control over the lives of the businessmen, so I agree with your presenta tion. I'm simply aying that it seems there's a law for those that have a large financial clout, and those that are ot organized. And I would like to see equal treatment for every busi ness

section in this rovince. IR. ALLEN: Well, it might interest you to . . . IR. CHAIRMAN: Any more questions? Order order. This is to que stion Mr. Alien, not make tatements here. We can make statements tomorrow in the House. Are there any more questions for Mr. Alien? If not, I thank you, sir. IR. ALLEN: Thank you very much. I call Mr. Norm Larson, head of Legal Aid Manitoba. Is Mr. arson not here? Then, Dr. Ralph James, or Miss Frances Statham. IR. ARNOLD: I am not Dr. James. Dr. James is delayed by an earlier commitment.

My name Abe Arnold, I'm the Executive Co-ordinator for the Manitoba Association for Rights and Li berties. would just like to say a few brief words before turning it over to Frances Statham, who will present ur brief. This brief has been prepared by the Legislative Review Committee of the Manitoba Association 1r Rights and Liberties, a newly established commit tee in our assoc iation, including a num ber of wyers from some of the lea ding law firms in our city. Inc identally, the brief has been submitted, and I hope you have been able to distribute the copies, r. Chairman. R.

CHAIRMAN: Oh, I'l l have to check to see. R. ARNOLD: And this is the second time that our organization has the privilege of appearing �fore this body. We appeared a year ago, in connection with The Hu man Rights Act, at which ne we were listened to very closely, and some of our suggestions were taken heed of. I hope that now that we are a much stronger organiz ation, and more broadly representative, at perhaps our views will be listened to even more closely.

The commit tee that worked on this ief inc luded Garth Erickson and Frances Statham as eo-convenors, and Dale Gibson, Harry Glinter, lward Lipsett and Butch Nepon . Miss Statham will present the brief, and a couple of other mem bers e here to assist her in answering questions, if necessary, mainly Dale Gibson and Edward psett. Thank you, Mr. Chairman. R. CHAIRMAN: Thank you. ISS STATHAM: Mr. Chairman, at the outset, we would like to state that the new Personal testigations Act as proposed in Bill 20 represents a considerable improvement over the previous :t, which was adopted by the Manitoba Legislature in 19 70.

We recog nize the fact that the 19 70 :t was a pioneering effort, and one of the very first investigation statutes adopted by any legisla tive >dy in North America. Since that time, however, a number of other legislatures in Canada and the United States have opted their own laws in this fie ld, which represent an advance over the original Manitoba :t. We are also aware that this new Personal Investigations Act includes some of the :ommendations proposed by the Canadian Conference of Comm issioners on the un iformity of 1islation.

This is a federal-provincial co-operative body which has prepared a model bill on personal restigations. Bill 20, which we are now consider ing, differs considerably from this model bill. The new Act does represent an important step forward in the improvement of the law gover ning rsonal investigations in Manitoba. Nevertheless, Bill 20, as drafted, still includes, in our view, a mber of serious weaknesses.

We are therefore taking advantage of the opportunity to make this �sentation to the Law Amendments Comm ittee, in the hope that some further improvements may made before the Act is finally adopted by the Legislature. Turning to specific sections of Bill 20: Firstly,

Section 1, Su bsection (a). We respect fully :ommend that the definition of benefit should be extended to include the services offered by 37

Law Amendments Thursday, June 7, 1979 professional assoc iations, trade uni ons, social service agencies, and educational facilities, so tha such bodies, with respect to applications for benefits, would also be governed by The Persona Inv estigations Act. As I understan d, you have a copy of the brief. I ask that you shrike from it, Roman Num era 11. Turning to

Section 2, Su bsection (3), this clause states that the Lieutenant-Governor-in-Counci may exempt any person or class of persons from the definition of personal reporting agency. Thi� means, in effect, that the Cabinet will have the power to exempt any investiga ting agency fron the terms of this Act.

Will all due respect, we suggest that, since Cabinet Orders-in-Council are not necessarily mad1 public, that this method of exemption is not in the public interest, and that if any exemptions fron the Act are to be granted, which exemptions we do not favour, they should at least be done throug l some clearly public procedure. To do otherwise might make possible comple tely secret investigation� which, as we should be aware, can sometimes lead to some very unfortunate consequences. Th1 model Act of the Conference on the Uniformity of Legislation provides for no sucl exemptions.

Section 10 , Su bsection (2): Our comm ittee discussed this

section at some length, particular!� the bannin g of the use of so-called lie detector tests, and came to the conclusion that this sectior of the Act would be a welcome addition, if properly drafted. However, as presently worded, it doe: not apply to most inter views where a lie detector test may be used, because personal investigation: are restricted to situations where enquir ies are being made of third parties.

Section 11 (1) : We note here that, while this

section states that no personal investigation shal be conduc ted without the expressed written consent of the su bject, it permits in Su bsection (b that certain investigations may be undertaken without written consent, provided the su bject is notifiec within ten days of application for a benefit that an inv estigation has been or will bE conducted. lt was the unanimous view of our commit tee that Su bsection (

b) should be elimina ted, and tha there are no ci rcumstances which justify the launching of a personal investigation for the variou: reasons outlined in this Act, without the advance consent of the su bject.

Section 14 (1) : This

section states that no personal report or personal file shall contain ir Su bsection (

a) any reference to race, religion, ethnic orig in or political affiliation of the su bject o person unless the information is voluntarily supplied by the su bject or person. lt is our view, firstly, that there should a num ber of additional prohibited references in this

section including national origin, nationality, political belief and colour. Secondly, we also urge that this

section should be brought into harmony with the Manitoba Hu mar Rights Act, which, for example, bars questions of this nature in emplo yment application forms. W1 therefore urge that such questions asked of the su bject should not be allowed, and for this purpose we respectfu lly rec ommend that the words in Su bsection (a) "u nless the information is voluntaril� supplied by the su bject or person" be eliminated. Another matter of concern in

Section 14 , Su bsection (1) is to be fou nd, in our view, in Subs ectior (i), which bars the inclusion in personal reports of criminal charge information in cases where thE charge has been dismis sed or the subject has been granted an absolute dis charge. We respectfu l!� suggest that this

section should also bar reports of criminal investigations and criminal charge: which have not yet been dealt with, in fulfillment of the belief that any person who is charged unde the law is presumed inno cent until proven guilty. lt is also urged that criminal charge information should also be barred where there has beer a stay of proceedings or where a conditional dis charge has been granted and the condition: met.

Section 18, Su bsection (1) . This

section provides that when the subject has been given the noticE of denial or modification of the terms of benefit, he or she has the right to be informed unde Su bsection (

b) of the source and detail of all factual information and the detail of all investigativE information. As this

section is now written, and the same applies in the case of

Section 18 , Su bsectior (2), Su bsection (a), it means that the su bject may not be given the source of any investigativE informa tion. We should certai nly be aware that such anonymous sources of information, whether from < neighbour or a person who may work with the su bject, may sometimes not only be wrong, bu dis torted for malicious or unfriendly reasons. The subject of any personal investigation deserve� to be protected in such situations and this can only be done by providing the source of investigativE information when it is demanded under the Act. We therefore urge that

Section 18. Su bsectior (1), Su bsection (

b) and

Section 18, Su bsection (2), Su bsection (

a) be modified to read "sou rce anc detail of all investigative informa tion". Aga in, we would like to point out that the model Act of the commissioners on un iformity o 38

Law Amendments Thursday, June 7, 1979 egislation provides for such full dis closures. Finally,

Section 19 , Su bsection (8) . This

section provides that medical · information may be lis closed in Su bsection (

b) where the dis closure is required by law, or Subs ection (

c) where the lisclosure is required in civil or criminal proceed ings. lt is our view that Su bsection (

c) should be �liminated and that there should be no dis closure of information about a subject in relation to any 3gal proceedings unless a Court Order is issued. Under such circums tances, Su bsection (

b) should le sufficient. That concludes the representation of our committee. If there are any questions, the members lf the comm ittee would be pleased to try to answer them. IIR. CHAIRMAN: Any questions? The Honou rable Member for lnks ter. IIR. GREEN: I would like to ask, with respect to 10 (2), the lie detector problems, your indic ation 5 that you feel that this is a problem because it appears to be asking somebody about somebody �I se. IIISS STATHAM: That's correct, yes. IIR.

GREEN: I would gather that the drafters of the legislation - and you may be right, I'm not 1rguing with that - but the drafters of the legislation really mean it to apply that if you were coming o me for a job that I would not submit you to a lie detector test. And that, to you, WOllld represent 1n improvement in the drafting. IIISS STATHAM: That's correct. IIR. GREEN: Now I have some problems with this that I'd like to explore with you. Would the let prohibit me from hiring Mr. Orchard here, who tells me that he can tell whether somebody 5 tel ling a lie or not?

He may think that he can, and I can 't see that the Act would prevent me rom doing that. IIISS STATHAM: I don't think it would either. IIR. GREEN: Do you think that that would be worse than a lie detector or better than a lie letector? IIISS STATHAM: I just don't know. IIR.

GREEN: We ll, I'm just trying to figure out whether you are really going to be able to deal 1ith this problem, and 1 am sinc erely concerned because it may be that we cannot handle every 1roblem that society has before us, and I am asking you the que stion as to whether or not you hink that, if I can 't use a lie detector machine but I can use Mr. Orchard, you haven't plugged 1p all of the problems, have you? As a matter of fact, you may have created a bigger problem han the lie detector test. IIR. CHAIRM AN: Mr. Gibson. IIR. DALE GIBSON: Mr. Green, if I may reply on behalf of the commit tee, ... IIR.

GREEN: She was doing so well. IIR. GIBSON: She wasn 't offe ring the reason that I believe the comm ittee talked about in offering he opinion that they did. What concerned the commit tee was this - and we had qui te a lengthy liscussion in fact, about the lie detector section, and there were some differences of opinion - 1ut the thing that eventually persuaded the group was that lie detectors, because they are technic al nachines which have a kind of a mystique of believability about them , may carry a greater aura ,f cre dibility than the ordinary kind of personal judgment.

If all of us understood that lie detectors are as fallible as human beings in making their decisions, here would be no difficulty. IIR. GREEN: Wel l, why don't we pass a law saying lie detectors are as fallible as human beings? Vrite it in a statute so everybody will know. 39

Law Amendments Thursday, June 7, 19 79 MR. GIBSON: The point of the group, Mr. Green, was simply that there is, at the moment, a1 aura of credibility about lie detectors which we thought was unde sirable. MR. GREEN: Well, I would like to ask the question whether, if we did succeed - and I by n1 means am satisfied that we will - but if we did succeed and we then had employers or othe peoples conferring benefits, saying that "I f I can't use a lie detector, I'll use Mr.

Orchard becaus' he is the guy who's holding hims elf out as being able to ascertain lie s," and people believe tha he can do that, have we made an improvement or have we gone backward? MR. GIBSON: Our position is that you would have removed one source of apparent but fault credibility. You wouldn't have solved all the problems of the world. Of course, there are still sort of problems that ... By the way, jus t to strengthen the point that I think you're making, Mr. Greer I might draw your attention to

Section (

b) of that 2(b); I really don't want to, but I think Sectio1 2(

b) is worth commenting on. lt seems to prohibit placing the su bject or person under surveillance auditory or visual, which sounds as if you can't look at him or listen to him while you're inter viewin! him, and it seems to me that 2(

b) would have to be amended a bit too. I think what they're ta lkin ! about is covered surveillance, hidden microphones and stuff like that. MR. GREEN: All right. Now I want to ask that if you then became really progressive and you stoppe1 the lie detector and you stopped me from hiring Mr . Orchard, who claims to be an expert a ascertai ning lies, and I desperately wantin g to know this was told that palmists can tell me abou char acter, will this prohibit me from having somebody read the palms to see whether I should hin this person? MISS STATHAM: I don't think it would, no. MR.

GREEN: Would it prohibit me from reading the lumps on his head? MISS STATHAM: No, I don't suppose it would. MR. GREEN: I understand now that they're making a lie detector - and this I saw on televisiol - which looks like a wrist watch. Do you see any difficulty in enforc ability of legislation whereb a man could be wearing a wrist watch and using it as a lie detector when he was invest igatin! somebody? MISS STATHAM: Certainly. Sure there would be a problem in enforcability but it's the committee' position that at least a start should be made with

Section 10 (2)(

a) and the us e of lie detector5 at least openly, should be prohibited. MR. GREEN: The open use of lie detectors? MISS STATHAM: Wel l, any use of lie detectors, but ... MR. GREEN: Do you remember we had laws - maybe you don't remember, but I do - whicl prohibited people from selling cont raceptives except for the protection of health, I think it wa5 Do you think that that was a law that was a start in any direction? MISS STATHAM: No. MR.

GREEN: What I'm concerned with - you say in your brief that nobody should be able t1 make a personal investigation under any circumstances, and I think you sort of added to th1 circums tances. Now, I gave you a problem a little earlier which to me represents a problem. Let ': say a son was concerned that his mother, who was a widow, was being courted and charmed b: a rake. Would you prohibit me from trying to find out about that person and getting somebod: to do an investigation on him? Where is he from? What are his antecedents? What is his past' Would you prohibit me from doing that?

MISS STATHAM: I'd like to ask Bill Gibson to comment on that one. MR. GREEN: I'm asking you. MR. GIBSON: I'm sorry about the divided resp onsibili ties, Mr . Chairman. In answer to that que stion 40

Law Amendments Thursday, June 7, 1979 would submit that Mr. Alien's answer to you is correct. Now, the Act is difficult to understand n many of its aspects, but I read that

section as Mr. Alien does, as not applying to that kind of nvestigation but only applying to investigations relating to the benefits as they're referred to in ·he first part. III R. GREEN: But in your brief, Mr. Gibson, you've extended the definition of benefit. III R. GIBSON: That's right, but not to inquir ies about marriage. III R. GREEN: You wouldn't extend it that far. III R. GIBSON: No, wait till you hear my personal brief and then you can ask me that 1uestion. III R. GREEN: Well, if you're answ ering, I' ll get it now. Do you believe that that should be >rohibited? t'IR.

GIBSON: My personal belief is that all investigations ought to be made with notice to the 1ubject, whatever the purpose. IIR. GREEN: All right now, Mr. Gibson - and you better both stay with me - do you not see tny problems of chasing out of operation people who, regardless of what you think of them, are 1 busine ss and su bject to certain laws, storefronts addresses and phone numbers and are having his work done by some Mafia-type organization because people will want the information? IIR. GIBSON: Yes, I certainly do. IIR. GREEN: Is that not a greater dis ease than the dis ease we've got now? IIR.

GIBSON: If it were a real threat, yes. There have been in Canada since the mid-1970s four •cts in other provinces which go as far as this legislation in most of their respects, and I've seen o evidence at all of the indushry shrivel ling up. Now, I hasten to add that there are provisions 1 the Act which I hope to refer to in my own submi ssion which I think are unduly restrictive of 1e industry and which I would hope would be remedied. But I don't see a threat of the size that ou seem to suggest. ,R. GREEN: I really am not worried that the industry will shrivel up, and if I worded it that way 1en I'm sorry.

But I am more concerned with an underground growing up. IR. GIBSON: Yes, so am I, and I have a submi ssion to make along similar lines. IR. GREEN: Okay. Then you do acknowledge that this is a problem and that when you try to arry legislation beyond that which is reasonable under the circu mstances . . . IR. GIBSON: Of course. If you prevent people obtaining information in a legitimate way, then 1ey're going to find it in an illegitima te way. IR. GREEN: All right. That brings me right to the point, Mr. Gibson. I am concerned. I do not ish to hire a Nazi.

I do not wish to hire a Nazi, and you are preventing me from finding out whether )mebody was a Nazi. Now that is a problem tor me. You are saying that political belief, in your rief, cannot be included in the information that I get ... IR. GIBSON: Yes, what we're sayi ng is that political belief is not one of the things that should e so ld; that kind of inf ormation is not information that ought to be sold to others. There is nothing , prevent you making your own inq uiries about my political belie fs except that funny

Section 3(2), hich of course is going to be remedied. IR. GREEN: I'm not a ... I'm in the Legislature; I'm in the law business; and I play golf, and want somebody to find out whether this guy is a Nazi, and you say that I should not be able 1 do that. R. GIBSON: We ll, Mr . Green, we have a Hu man Rights Act in the province which states 41

Law Amendments Thur sday, June 7, 1979 well, all right. But the Hu man Rights Act of the province states that questions of that kind ough not to be part of an em ployment enquir y, and our subm ission, as the Manitoba Association of Right: and Liberties, which is fully in support of The Hu man Rights Act' as I think all political parties ir Manitoba are, is that The Huma n Rights Act and this statute ought to be compati ble. That's thE plain and simple point that we're making tonight. MR. GREEN: So you are saying to me: "Mr .

Green ," that "if you're to find out whether somebod: is a Nazi, you're going to have to do it illegally". MR. GIBSON: No, I didn't say that. I said you're going to have to find it out yourself. MR. GREEN: Well, and I tell you that I am not going to do it by going over to Germany and checkin! the ... MR. GIBSON: Why don't you ask him? MR. GREEN: And I'm asking you whether you are, other than by doing it myself, I cannot fin1 out or it will be illegal? MR. GIBSON: That's a problem, I agree. MR. GREEN: Thank you. MR. CHAIRMAN: The Honourable Member for Wolseley. MR.

WILSON: On Bill No. 20, The Personal Inv estigation Act, I wondered if the group had give any consideration to ... because we are concerned what is being so ld, we're also concerned the anyone applying for credit be given a reasonable hearing or a fair hea ring, and I wondered, in ligt of the fact that many hous ewives are refusing to give such groups as the Department of Educ atior or we 'll use the example of the Canadian bond issue, where if you don't give your social securit number, you pay a 25 percent penalty.

With the age of the big computer, and I may be cryst1 balling, and I am certain you're comm ittee might have thought about it, what do you feel aboL the fact that credit grantors and people giving credit are reject ing applications based on the refuse of the people applying for credit to supply information such as social security numbers? 'MISS STATHAM: The commit tee hasn't dis cussed that and I don't think we are capable c answering the question. MR. WILSON: All right, thank you. MR. CHAIRMAN: Are there any more questions? I thank you then, Mi ss Statham, and I call M Gibson now. MR. GIBSON: Thank you.

I'm sorry to appear to be monopolizing things, Mr. Chairman, and I shoul perhaps first explain who 1 am. I am Professor of Law at the University of Manitoba. I had som small part to play in the draft ing of the original legislation back in 1971 and I had a co ntinuin interest in the legislation since then. I am appearing as an individual , though I was also a membE of the MARL committee, and with one small exception, I agree with every thing that the MAR comm ittee brief had put forward. The items that I am about to talk about, mis cellaneous in nature, and they have now been reduce by reason of Mr.

Alien's presentation and this previous one, are sort of sni ppets and bits that haven yet been dis cussed and that I think ought to be put before the committee. I apologize for not havin done this work until too late to produce a written brief for you so I'm afraid you'll have to bee with my verbal comments.

The first point that 1 think needs to be made and made strongly, because we hear commenl that sound as if this Bill is suddenly com ing out of nowhere with no previous experience, is th< the Bill which is now before us - and I commend the government for having put it before us - is a very considerable improvement on legislation which has been dev eloping, not just in Manitot but in North America over a period of time.

I think it's impottant to see the historical prog ressiot The United States, federally, passed the first Act of this kind in 19 70 and the next jurisdictiot as far as 1 know anywhere in the world to pass such legislation, was Manitoba in the followin year. 42

Law Amendments Thur sday, June 7, 1979 When The Manitoba Act was put forward, it was a very important step forward but understandably lecause it was so new and untried and there was so much opposition concerning it, it was very nu ch a comprom ised Bill and not anywhere near the perfect legislation that one would have iked. Following the Manitoba lead, several other provinc es over the next few years, introduced egislation, and in each case - with some backward steps I think, but generally speaking - there vere improvements made as each province improved upon the experience of the last.

And then tfter several provinc es had done this, a very important Legislative group, the Conference on Jniformity of Legislation in Canada, decided to study the question thoroughly and over the course •f years they compared all of the Canadian provincial material; they looked at foreign material; tnd they arrived about a year ago, at a model - they call it, what is it; Inf ormation Act, or a nodel Act, the idea being that each province can then take this model Act and with such small nodifications as it wants to make, can build upon it and Canada will have a somewhat uniform, ie hope, personal investigation legislation.

Now, the present Bill, owes very much to that model Act. lt is not - I think it's fair to say - it is not a copy off the model Act; it's a kind of an amalgam between the model Act and our xisting statute, but it adopts in my view, many very important improvements that the model Act as put forward. And I stress the fact that there has been a lot of experience and a lot of discussion 'Y skilled legis lative draftspeople that stands behind that model Act and behind this statute that ou're now looking at.

Having said those cong ratulatory things though, I think it is necessary to say that there are some lUits in the Act. I don't agree with Mr. Alien that the implementation of the Act ought to be delayed. seems to me that it's close enough to final form that it ought to go forward and that the nprovements that are involved in it are so important that Manitobans deserve to have them at 1is Legislative Session.

But I do say that there are some very significant amendments that are eeded, as well as I think a number of small housekeeping amendments, drafting amendments, nd I'd like to refer to a few of those in no particular order, although I'm going through the Act 1 a more or less sec tion-by-section manner. I'll try not oo deal with things that have been dealt 'ith before except where it may be desirable to add someth ing.

I would, on the point made in the MARL brief, concerning the desirability of expanding the list f benefits, add just this point: That the list of benefits included in the model Act has a very signi ficant clditional portion, which is not in this Bill, and that is one which relates to Government Services. nder the model Bill, a person who applies for welfare or for any other gov ernment service generally om a city or from a province or whatever, would have the same rights as would a person who applying for a mortgage or insu rance or whatever the case might be.

And I submit as MARL id earlier, that that is a very important additional purpose that ought to be added to the et. I would go further; I would point out to you that there are many investigations that are carried 1 that don't involv e the bestowal of benefits. Often they're carried on for exactly the opposite 1asons. A lawyer, for example, frequently will employ the organizations that we're talking about , make checks on people who are contrary to their clie nt's inter est in litiga tion or in some kind controversial busi ness situation or whatever.

But because there is no contemplation of benefit volved, those lawyers - and I'v e done it myself - make use of these organizations without any the protections for the su bject that the Act provides for a mortgage company or an insu rance >mpany when they're using it. My point is, that as much as Legislative drafting can do, every investigation that is carried out 1d every report that is made by these organizations - for whatever purpose - ought to be subject the appropriate protec tions.

What's happened in the legislation is, that because of certain drafting fficulties, we've focused on the most important, the most common transactions: mortgages, surance, and lending, and so on. But these other things are very important too and if you're at e point now that you're at, of finally putting into being the first statute in Canada to make use the model Act, then it seems to me that one ought to try to get the best possible job and cover e most possible ground. Another difficult area which the Bill does in fact cover, but it seems to me maybe it oughtn't be covered, is Crown information.

The Bill does provide that if someone is applying to government r em ployment or insurance or something of that kind , that the Bill would apply. But there are :my many other sources of government information, Med icare - to name just one of many many ograms involving data banks about all of us - where there are privacy problems.

Other 1vernments are beginning to recognize that you can't apply a comme rcial regulation statute to ,vernment information banks and the result is, both in the United States and at the federal level Canada, that we are seeing a move toward a parallel set of legislation providing similar protections tt for government informttion. 43

Law Amendments Thur sday, June 7, 1979 In Canada, the appropriate model is

Part 4 of The Hu man Rights Act which provides just thesE kinds of protections but for government informa tion , and what I'm submitti ng, not for this LegislativE Session but for your future consideration, gentlemen, is that the job isn't completely done unti you've protected the public with respect to the information that the Government of Manitoba il amassing about all of us, because there are many dangers there too. I'd like to say a word or two about the consent requirement. it's this point with which I arr in some dis agreement with the MARL group.

Section 11 , as you know, requi res that any one whc is subject to an investigat ion, either consent to it or be given a notice after a period of time. Nov the MARL position is, that ther e sho uldn't be this alternative that everybody should consent, tha it should not be possible to inv estigate anyone without consent. I personally don't share that view lt seems to me that one ought to be able to investiga te other people for one's own purposes goodness sakes, we're in so many different relationships with others and it's important that WE find out, as Mr .

Green has been say ing, information necessary to protect ourselves. What I say, is that the other alternative is the most important one; not the consent one, bu the notice one. That if we really want to protect Manitobans, let's not worry so much about thE consent; that ties everybody's hands. But let's make sure that every time somebody is investigate< by one of these organizations, they know about it. That's all they have to be given; a brief noticE that there has been an investigation and from then on, the Act works pretty well. lt provides wayl in which they can find out what that report is and so on.

But un less we're sur e in providing tha notice provision - and that's the weakest part of the Act right now - we're not going to be givin! people the full effect, the protections that we seem to be giving them . I'l l come back to that poin in another way in just a moment. As a matter of fact, the moment 's arrived. Mr. Alien made the point, and I think there's a good deal to it, that there are too many noticE provisions under the Act.

There's a req uirement of notice when an investigation is commenced ir certain circums tances; there's a requirement of a notice when a new file is opened; there's 1 requirement of notice concerning the identi ty of an agency in certain circums tances; it's requirec that there be a notice where there is a benefit denied and so on, and that gets pretty horrendousiJ com plicated and bureaucratic. My submis sion to you is that if you made at least one of these notice provisions really effective it might not be necessary to impose as many of these procedures on the industry.

And to makE the most fffective notice provision possi ble, I submit that one ought to focus on

Section 11 . Sectior 11 is the one that I just mentioned , that you either have to get consent or you give notice.

Now the problem with consent is, that consent that can be given in a purely formal way, ir a standard form contract, it's true that the Act or the Bill says that there has to be a notice anc it has to be near the . signatur e and has to be in 10 -point print, but I still believe that 9 out o 10, or perhaps 99 out of 10 0 applicants for credit or whatever, will sign their name to a document not knowing in fact that they have authorized , that they have given their consent for one of thesE things to go on.

And my point is, much more important than that, tell them at some point, eithe1 that there is an investigation under way, or that there is likely to be an investigation un der wa1 and do it in a way that's really going to get through to them. And I submit that the existing provisiom of

Section 11 are not enough to do that. The problem with

Section 11 now, the major one, apart from the consent provision, is that unlikE the model bill, and unlike most other Canadian statutes, it places the onus, not on the agency tc give the notice, but on the user, the credit grantor or whatever.

In other words, I come to appiJ for a loan and I sign my consent, like most people without knowing what I'v e really signed; ther the credit grantor gets or seeks a report on me and the report is sent back to the credit granto1 - oh, I'm sorry, if I do giv e my consent, this thing doesn't apply, but assu ming that I don't givE my consent; the report comes back to the credit grantor, and it is then the credit grantor whc mus t notify the user or the consumer that there's been a report about hims elf. Now, that's ar extremely difficult, I would say impossible sort of thing to police.

Most of the other legislation anc certainly the model Act places the focus on the agency and says, when the agency sends a repor about anybody to a credit grantor or any other user, they automatically notif y the su bject that therE has been a report made.

Nww if you made that one very important change, and it's not a radica change; it follows what other provinces are doing and follo ws what the model act recommends it strikes me that you would have made this Act an extremely effective vehicle to protect Manitobans privacy and you might even be able to simp lify it and remove a good deal of the bureaucracy abou which others are complaining. I'm going to leap over a number of rather picayune points and just seize on one or two more Mr . Chairman. One of these relates to a difficulty that I think Mr .

Alien also had in reading thE Act and under standing what it means. There are two sections,

Section 13 (2) and

Section 19 t 1) both of which purport to state that an individual has the right to see his file or to see rpr , are made about him. But the two sections are some what different in nature; Sect ;or 44

Law Amendments Thursday, June 7, 1979 >ays that he may do this at any time,

whereas

Section 19 (1) says that he may only do it once 1very six months and there are a num ber of other su bstantial differences between the two, and here is to my way of reading it, no way of understanding whether one takes priority over the other 1r whether these are two different ways of obtaining access to your file or what, and I would simply lraw attention to the legislative draftsman that it might be desirable to blend those two sections 1nd to remove what appears to be, at least to me, a confusing provision in a very important

part 1f the Act. Now, the next point I want to make is a picayune one, but it's a picayune one that might in act, create problems. As you know, the Act gives the person the right, having learned that there � a report about him or that there is a file about him to obtain certain information - indeed, lot of information about his own file. But

Section 20 tells him that he can only do it if his identity � verified by a Comm issioner for Oaths. Now, the lawyers among us know that anybody can be ppointed a Comm issioner for Oaths by se ndin g a few dollars to a provincial government office nd secretaries in most law offices are Commis sioners for Oaths and so on, but the man on the treet doesn't know that. The Commissioner for Oaths to the average citizen who says, "He y, I rant to find out what the Credit Bureau's got on me," thin ks, "oh, God, I'v e got to go to a lawyer's ,ffice, they're going to charge me a fee.

Maybe it's some big fancy thing." Forget it. There's no eed to have a Comm issioner for Oaths certified to a person's identity. What is a damned :ommissioner for Oaths know anyway, about my identity. If I go in and say, "I'm Dale Gibson." hey say, "Oh, you're Dale Gibson. Staff it." What does that add to it? The model Act and most f the other legislation simply says, "Satis factory proof of identity" and su rely that's all that the .et ought to be calling for. Where once the individual has learned what's in his file and he has the right then to offer xplanatory material, it seems to me that

Section 19 (4) of the Act goes much too far in permitting 1e su bject to file what appsars to be anything he'd like to file. As I read 19 (4), if somebody dis agrees •ith something in a Credit Bureau file, he may come down with an armful of documents and all f us, I'm sure any legislator has runned into the individual who carries a kind of permanent library f paper around with him, and it seems to me that there will be those individuals dumping great uantities of paper, difficult paper to process and that there's no need to be as free and easy s

Section 19 (4) is. The model Act sets a 10 0-word limit on explanations that may be filed; maybe 1at's a little bit too short, but surely, some kind of limit ought to be filed and placed on what person may file. And just, also in connection with that right to file an explanation,

Section 21(1) think is ju st a little bit unfortunately drafted. I'm sure the intention of 21 (1) is to ensure that when :>u do file your explanation, that it stays on the file. But it doesn't say so in so many words and seems to me that it would be jus t worth the slight effort that's involv ed to say specifically, "And 1e agency shall retain the explanation on the fi le," as long as the information about which the l{planation is offered is retained on the file. The final point that I have to make, Mr.

Chairman, relates to information outside Manitoba - 11 sorry, information involving either credit reporting organizations or users outside Manitoba. We ::we a provision in this Bill as you know, which calls for the user in Manitoba to undertake certain I the obligations of the reporting agency, if the reporting agency is outside the province. However, think there are a couple of improvements that could be made, even though there is that protection 'fered. First, 1 would direct your attention to

Section 13 (2) and this is that odd sect ion that I talked Jout before, that seems to deal with dis closure of people's files. lt seems to deal with it almost 1dunda ntly and yet, it's got a strange hea ding. The head ing doesn't talk about disclosing of files; 1e head ing, this

Section 13 (2) talks about copy of a personal file to remain in Manitoba, and the �ading seems to be dealing with the question of information that goes outside Manitoba. But if JU read the sec tion, I don't think it says what it really intends to say. I think what it's intending , say is that there's got to be a file in Manitoba about the individual, but as I read it, it doesn't ty that, because it says about two-thirds of the way through the sec tion, that they must make railable the personal file at their chief place of business or at any of the branch offices in Manitoba which the file is kept.

Now it seems to me that those words "in Manitoba" ought to apply to e chief place of business as well, because if a Toronto operation keeps the file in Toronto and ts no information left here in Manitoba, I don't think that

Section 13 (2) is providing the protection at was intended by it; so I think the simple insertion of the words "in Manitoba" after the words :hief place of business" might be an improvement. · And finally, also on the question of foreign information or foreign operations, I would refer you a provision of the model bill, which is not in this Bill and which I offer for your consider sa tion. 1ere are, as you know, data banks developed outside of this countr y and therefore, outside of 1y legislative control in this country, which may be tapped by agencies within Manitoba or within anada.

The model Act, in order to ensure that there is always a source of information which one 1n keep one's hands on, requires that no report be given, unless it is based on information found 45

Law Amendments Thursday, June 7, 1979 in a file in Canada. lt doesn't say in the given province but at least in Canada, so that we knc that we can get at the data bank, wherever it migh t be and I would seriously submi t for yo consideration adoption of that excellence provision of the model Act. We !!, that comple tes my rather miscellaneous submiss ion, Mr . Chairman . MR. CHAIRMAN: Thank you, Mr. Gibson. The Honourable Member for Winn ipeg Centre. MR. J.R. (Bud) BOYCE: Through you, Mr.

Chairman, to Professor Gibson , the silence in the A on your last point was one of my apprehensions; that perhaps without being out of order, IV Chairman, you could perhaps tell us how we could handle the problem of extent of inf ormatio Those of us who have credit cards which is based on information, which is filed outside of Canac at the present time - well, major oil companies and things in that area. MR. GIBSON: How can you deal with the problem?

Well, what I'm saying is that the model A sugge sts that no report may be given on anybody for any purpose, you know, to the extent th the Act operates, unless there is a file somewhere in Canada with that information. In other word it simply prohibits files based on data banks in Georgia or wherever they may be. MR. BOYCE: Mr. Chairman, it does not prohibit the refusal or the granting of credit. MR. GIBSON: No, that's correct. MR. BOYCE: So, in effect, it would have no effect. MR. GIBSON: Well, this whole Act is aimed at the information reporting industry. it's not aimE primarily at the credit granting industry.

There are other problems, no doubt, in the credit grantir industry that have to be dealt with. But to the extent that you're employing the information reportir industry, that

section I submit, does offer useful protecti on. Where does the credit grantor get h information about you? He's got to get it through an agency and if the agenc has to base i report on information in Canada, then that's a deg ree of protect ion. MR. CHAIRMAN: The Honourable Member for lnkster. MR. GREEN: Professor Gibso n, I would like to ask some questions, perhaps on some sectior that you haven't dealt with but which I believe that you have considerable expertise. I'm going · 4( 1) ; have you got the Act in front of you? MR. GIBSON: Yes. MR. GREEN: Can you comment on the possible - and my que stion will be su bjective - possib abuse of a

section such as 4( 1 )? MR. GIBSON: (

b) or (c)? MR. GREEN: Do you see getting a registrar of power to deal with an applicant in the fashion that outlined in this secti on? MR. GIBSON: I might ha ve known when you were off ering a compliment that it was going to le� me into a trouble area. This in fact, is not an area that I know anyth ing about or have taken ar strong interest in. As a non-expert, it seems to me to be a strong licensing provision; it may t stronger than is needed but it's not something that I'v e given much attention to.

MR, GREEN: So, you wou ldn't care to comment on giving a director the power to refuse someboc the right to carry on business, because the Director belie ves to pass conduct of the applican for his reaso nable ground; you believe that he may not carry on business in accordance with tt law or with some integrity and honesty? MR.

GIBSON: That's right, my concern is the consumer and to protect him as much as possibl Now, to the extent that that can be done without encumbering the industry, I agree totally ar 1 simply don't know enough about the industry or about licensing generally to know whether th degree of power is required or isn't requi red to protect the consumer. 46

Law Amendments Thursday, June 7, 1979 VIR. GREEN: Well, I'm rather surprised at that, Professor Gibson , and maybe that gives us some nsight perhaps, into your general direction on this Act. You're mainly concerned, as you indicate, vith how it's going to affect the su bject, which is the ome that's being investigated. III R. GIBSON: That's right. III R. GREEN: And ther efore, you have. . . III R. GIBSON: Yes, as Mr. Alien, you have it mainly concerned with the clients for whom he is ;peak ing. Yes, that's right. III R.

GREEN: But you have formed therefore, no opinion on how it affects a citizen, who wishes o carry on business as a personal reporting agency and whether he is being subject to undue >ureaucracy. I'IR. GIBSON: That's right, as I' ve told you a couple of times; I just haven 't considered that part >f the Act. I'IR. GREEN:

Section 9( 1) of the Act: Are you concerned with the requirement that a personal eporting agency is su bject to an offence under the Act if they are not able to make the fu ll content >f the report read ily understan dable by the su bject? I'IR. GIBSON: I can 't get worked up one way or the other about

Section 9( 1) . I don't really think t'll have any sign ificant effect on the operation of the industry. lt wouldn't trouble me at all if you :truck it; it wouldn't trouble me if you left it in. IIR. GREEN: lt doesn 't bother you, that

section doesn't bother you? IIR. GIBSON: Not in the least. IIR. GREEN: 9(2), requiring the reporting agency to satisfy the Di rector, who may require that the eport and all others like it be amended, giving the director the power to require a report to be tmended, to provide for understandable dis closure of the contents of that report, and all others ke it, to the satisfaction of the director - that doesn't bother you at all? IIR. GIBSON: No. Look, it would trouble me to see a director, or anybody in charge, abusing 1is powers.

But I'm absolutely convinced from the relatively little that I know about the way in which he indus try operates in Manitoba, that they do make their reports in unde rst andable form, and hat hhis is not u problem that's going to arise. �R. GREEN: But Mr. . . . �R. GIBSON: And that's exactly why I'm �R. GREEN: Mr. Gibson , you see no problem with me passing laws requiring somebody ... I ave a problem. I have to pass a law which says that it's going to be a criminal offe nce, or is n offence for which a person can go to jail. ,R. GIBSON: Okay, look, Sid.

All I'm sayi ng is, if you don't like it, strike it. lt doesn't bother me 1 the least. ,R. GREEN: lt doesn't bother you. I'm really asking for your opinion on it, and you say it doesn't other you. IR. GIBSON: Because 1 honestly don't believe that it will affect the industry one way or the other. his is a responsible industry we're dealing with; they're already making unde rstan dable 3ports. IR.

GREEN: I'm really trying to get your attitude to us passing laws, and I am acce pting it, that doesn't bother you that the State would pass a law requiring that person to make something nderstandable to irector, does not bother you. the satisfaction of a d 47

Law Amendments Thursday, June 7, 1979 MR. GIBSON: To get you on to another topic, at least , let me agree to this extent, that 1 thir it's wrong to pass a law which is un necessary. MR. GREEN: And you feel that this law is unnecessary? MR. GIBSON: I don't see the necessity for it, that's right. MR. GREEN: Well then, at least, we have you got ... that it is wrong, and that would both you, then. MR. GIBSON: One for Green, yes, that's right. MR. GREEN: lt bothers you. MR. GIBSON: Yes. MR. GREEN: Did it bother . . . MR. GIBSON: No, it doesn't bother me. MR.

GREEN: lt doesn't bother you that we would do that; then it doesn't bother ... MR. GIBSON: Ne ver let your guard down with Sid Green. MR. GREEN: Then it doesn't bother you that we would do the wrong thing? Can I ask you, IV Gibson, looking at 14 (1) (d) . MR. GIBSON: Yes. MR. GREEN: Do you really feel that it is . MR. GIBSON: No. MR. GREEN: That is satisfactory for legislators to pass laws requiring somebody not to tell tt truth. MR. GIBSON: No, I agree with you about 14 .( 1) (d). MR. GREEN: 14 (1) (

d) should be deleted. MR. GIBSON: I think so. MR. GREEN: Thank you. Now, with regard to 26: Now even in the unenli g htened days of prohibition, they made it again the law to sell, but nobody was so stupid as to make it against the law to drink. This says th; the use of information obtained ille gally is forbidden. Now, can you envisage how it will be enforceab for a person who has the information not to use it, and how you would prosecute him for usir it, whether by hiring or not hiring? MR. GIBSON: Yes. I think I would support this sec tion.

The reason for the hesitation is that I' trying to think of a hypothetical kind of situation. But let us suppose that there is a shady crec grantor or somebody, who decides to do just what you're worried this Act may cause him to d and that is to go to unsavoury sources and dig up unreliable and malicious information, and I use it. · Now In that kind of hypothetical, it seems to me that the credit grantor is every bit as guil as the person who's granting the information, and I would like to see him penalized, yes. MR. GREEN: But Mr.

Gibson, this Act prohibits, not the use of shady information; this Act prohibi the use of 10 0 percent accu rate information if it is illegally obtained. MR. GIBSON: Wel l' then . . . 48

Law Amendments Thursday, June 7, 1979 �R. GREEN: How would you do that? tR. GIBSON: Yes, look, the problem . tR. GREEN: Am I a bad lawyer? Am I reading this wrong? IR. GIBSON: No, I think you're a good logician, because what you're doing is putting an ssumption which isn't necessarily there. You're as suming that the information is valid, that the 1hole purpose of the restrictions in the Act is to ensure that the information is valid. IR. GREEN: I ask you to read . . . IR. GIBSON: Wel l, let me finish. If the restrictions were not there . IR. GREEN: I ask you to read 26.

I ask you to read 26: "The use or divulging of any information btained illegally" - which could be 10 0 percent accurate, true information - IR. GIBSON: yes. R. GREEN: ... And therefore, if it is said ... IR. GIBSON: Yes. IR. GREEN: And therefore, if it is used . . . IR. GIBSON: Tell me when you want me to answer. IR. GREEN: ... is an offence - yes, I'm asking you whether I am correct in sayi ng that the se of such information would be an offence against the Act? IR. GIBSON: Yes, it would be an offence against the Act; and if you'd like my opinion, I think 1at's a desirable offence.

I believe also that inf ormation that's obtained by breaking into people's ·emises should not be admitted, though you may hold the opposite view. iR. GREEN: That's fine. I understand you completely. R. CHAIRMAN: The Honourable Member for Winnipeg Centre. R. BOVCE: Yes, Mr. Chairman. Through you to Professor Gibson. I wonder if you could give ; your opinion. We've talked about 10 (2), and I wonder if you could take a look at 10 (3), and >Id it in juxtaposition to that, under

Definitions, the two

definitions of medical information and edical source. Is not the operant effect of that to negate 10 (2), because on the list of medical 1u rces and medical information, they include such a broad range of people that if somebody sought formation, and they put the qualif ication such as degree of hyperte nsion, or stress, or mental ability, or anything else, unto the person who was referred to one of these sou rces to which (2)(

a) d not apply because of the exemption granted under 10 (3)? R. GIBSON: There may be a small problem there, but I think the intention is that it be covered 1 the definition of the term "medic al source". lt's only a test which may be conduc ted by certain oups of people; it's not everybody, it's sort of psychological tests and psychiatric tests, and that 1rt of thing. R. BOVCE: And lie detector tests. R. GIBSON: Are they included in ... I didn't think they were. R. BOVCE: Well, by granting the exemption under 10 (3), we negate 10 (2)(a). R. GIBSON: I see what you're getting at, yes. That's a matter I hadn't thought about, and you 3.Y well be right. 49

Law Amendmen

Document details

Collection	Manitoba — Debates (Hansard)
Citation	31-3-la2
Type	hansard
Volume / chapter	31st 3rd hansardpdf la2.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	0ab90c828bd0b8f2d03ab806f6c8fd569aaaf925

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