1982 Legislative Session: 4th Session, 32nd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

MONDAY, MAY 31, 1982

Afternoon Sitting

[ Page

7865 ]

CONTENTS

Routine Proceedings

Oral Questions

Expenses of Minister of Consumer and Corporate Affairs. Mr. Macdonald –– 7865

Ministers' expenses. Mr. Macdonald –– 7866

Taxes and charges on business. Mr. Lea –– 7866

Finance Statutes Amendment Act, 1982 (Bill 36). Report. (Hon. Mr. Curtis)

Third reading –– 7868

Limitation Amendment Act, 1982 (Bill 48). Second reading, (Hon. Mr. Williams)

Hon. Mr. Williams –– 7868

Mr. Levi –– 7869

Hon. Mr. Williams –– 7869

Taxation (Rural Area) Amendment Act (No. 2), 1982 (Bill 34). (Hon. Mr. Curtis)

Hon. Mr. Curtis –– 7869

Mr. Stupich –– 7869

Hon. Mr. Curtis –– 7869

Ferry Corporation Amendment Act, 1982 (Bill 25). Second reading. (Hon. Mr. Fraser)

Hon. Mr. Fraser –– 7869

Mr. Lockstead –– 7870

Mr. Barber –– 7870

Mr. Stupich –– 7871

Mr. Hanson –– 7871

Mrs. Wallace –– 7872

Mr. Mussallem –– 7873

Mr. Cocke –– 7874

Hon. Mrs. Jordan –– 7875

Mr. Howard –– 7876

Mr. Mitchell –– 7877

Hon. Mr. Fraser –– 7878

Division –– 7878

Committee of Supply: Ministry of Agriculture and Food estimates. (Hon. Mr. Hewitt)

On vote 5: minister's office (continued) — 7879

Mr. Hall

Mrs, Dailly

Hon. Mr. McGeer

Erratum –– 7888

MONDAY, MAY 31, 1982

The House met at 2 p.m.

Prayers.

HON. MR. FRASER: Mr. Speaker, it's

not very often that I have people from the Cariboo riding in the

precincts. Today we have three citizens from the city of Williams Lake.

I'd like the House to welcome Mr. Cliff Simmons, Mr. Doug Belsher and

Mr. Hugo Stahl.

HON. MR. HEWITT: Mr. Speaker, in the

gallery today we have Mr. Madison Morrell, and with him is a tour group

from the Skagit Valley College of Mount Vernon, Washington that is here

visiting Victoria. Some are visiting in the galleries now and the

second half of the group will be here later on. I'd ask the House to

bid them welcome.

HON. MR. McCLELLAND: Mr. Speaker, I rise on a matter of privilege.

MR. SPEAKER: Please state the matter briefly.

HON. MR. McCLELLAND: This morning, during a meeting of the Select Standing Committee on Public Accounts

and Economic Affairs, which was open to the press and therefore subject

to public comment, the first member for Victoria (Mr. Barber) and the

member for Skeena (Mr. Howard) stated to that committee that the

government was denying members of the committee access to ministerial

expense vouchers. The fact is that the comptroller-general insists on

the long-established practice of the committee that all vouchers be

available for personal inspection by all members of the committee

regardless of party affiliation. There has been some question about

permission for agents to inspect vouchers, and copies have not always

been permitted, again by long-established practice. The members I have

referred to had been informed, I believe, of the....

MR. SPEAKER:

Hon. members, matters which arise in committee cannot be brought before

the House except by committee report. Unless I can be given assurance

that this is a report of the committee, I cannot allow it to proceed.

HON. MR. McCLELLAND:

Mr. Speaker, it's my understanding that under the standing orders of

the House, the standing committees are not only creatures of the House

but are also subject to the same rules as the House.

Interjections.

MR. SPEAKER:

Hon. members, I think the precedent has been well established in this

House: that is, matters which take place in committee are not of

interest to the House except by way of report from the committee to the

House. All matters which arise in committee must therefore be settled

in committee.

HON. MR. McCLELLAND: On a point of order, Mr. Speaker, I wonder whether

a committee with the long history of the public accounts committee is just an

ordinary committee of the House. I draw to your attention the rule that matters

of privilege must be brought at the earliest possible opportunity. My concern,

Mr. Speaker, is that I do not want to lose the opportunity of raising this matter

of privilege because I did not bring the matter before the appropriate body

at the earliest possible opportunity. If the Speaker could advise me that some

other time is the earliest possible opportunity, then I would be glad to raise

this matter of privilege at that time.

MR. HALL:

On the same point of order, Mr. Speaker, would the Speaker also advise,

or take under advisement while he's thinking about the matter raised by

the member for Langley, whether or not he could assist us all in

dealing with the question if unparliamentary conduct and

unparliamentary language, which was used by that member this morning.

MR. SPEAKER:

Again, hon. members, if matters arise in committee, the committee

indeed is a creature of the House, but the committee is also given a

complete mandate to operate on its own. The only interest the House has

in that committee is by way of report. I think I have said that three

times: I hope it's clear, hon. members.

Oral Questions

EXPENSES OF MINISTER OF

CONSUMER AND CORPORATE AFFAIRS

MR. MACDONALD: Mr. Speaker, I ask the Minister of

Consumer and Corporate Affairs whether he has been interviewed by the

auditor-general concerning the matter of his expenses.

HON. MR. HYNDMAN:

Relative to the inquiry of the auditor-general, my position throughout

has been that I'll have no comment to make until that inquiry is

concluded and the report of the auditor-general has been released.

MR. MACDONALD: There's a very strange silence. Has the minister written to the auditor-general regarding the matter of his expense accounts?

HON. MR. HYNDMAN:

My answer is the same. It's my understanding that under the Auditor

General Act the inquiry now underway is in the nature of a

quasi-judicial process. I respect that, and in no way do I want to

comment on the manner in which it's being conducted.

MR. MACDONALD: Has the minister written to any official of the provincial government with respect to the matter of his expense accounts?

HON. MR. HYNDMAN:

I repeat my last answer. The matter of those expense accounts is under

investigation by the auditor-general under the provisions of that

statute. It is a quasi-judicial inquiry, according to my understanding.

That being the case, I propose to make no comment until the report is

down.

MR. MACDONALD: I can't accept that answer. but

I ask the minister in any case: did he write not to the

auditor-general, in this secret proceeding, but to the acting

comptroller-general on May 13 concerning the matter of his expenses?

[ Page 7866 ]

HON. MR. HYNDMAN:

Any matters relative to my expenses that are under review, as I've said

before, I propose to comment on when the report is down. While that

matter is under inquiry I do not propose to comment on the matter or

the nature of any proceedings relative to the inquiry.

MR. MACDONALD:

To jog the minister's memory, when the matter came out in the press

saying all the questions were answerable, did he on May 13 write to the

acting comptroller-general refunding, in respect to certain expenses

and certain matters, the sum of $326?

HON. MR. HYNDMAN:

I repeat my previous comments. When the report of the auditor-general

is down, I'll be happy to deal with questions of that nature. Until the

inquiry is completed, I do not propose to comment upon the inquiry or

matters relative to it.

MR. MACDONALD: Didn't the

minister comment to the acting comptroller-general when he made a

refund of $326? I ask him, when he says we should not prejudge the

issue, why he prejudged the issue with respect to certain of those

expenses by making a refund, which he knows very well he made, on May

13 to the acting comptroller-general. Did you make that refund, and

wasn't that prejudging some of the questions?

MR. SPEAKER: Order, please. The question itself is in order.

HON. MR. HYNDMAN: Mr. Speaker, I am quite happy to deal with questions of that nature following the release of the report of the auditor-general.

MINISTERS' EXPENSES

MR. MACDONALD:

Mr. Speaker, I ask the Premier whether the hon. member for North

Vancouver-Seymour (Mr. Davis) was permitted the opportunity of

returning funds before the matter of his expense accounts was referred

for criminal investigation and his office door locked.

HON. MR. BENNETT: Mr. Speaker, the member is drawing a parallel between situations which doesn't exist.

TAXES AND CHARGES ON BUSINESS

MR. LEA:

I have a question to the Ministry of Industry and Small Business

Development. Independent businesses in the province have been hit by

numerous fees and licence charges imposed by the provincial government

in the past six months; most recently commercial and industrial

enterprises have been hit by property tax rates ranging from 25 percent

to 55 percent as a result of the provincial government's decision to

cut and withhold revenue-sharing grants. Could the minister tell us

what action he and his government have taken to secure and to roll back

these provincially imposed tax hikes to protect the jobs of people

working for independent business?

Independent business, Mr.

Speaker, employs something in the neighbourhood of 40 percent of our

work force. Could the minister tell me what steps the government has

already taken to ensure that the small businesses are not hit with

these extraordinary tax and licence-fee hikes, in order to protect jobs

and small business operators?

HON. MR. PHILLIPS: In

answer to the member's question, I would like to remind the member,

once again, that this government and ministry have had numerous

policies in the past six years that have been of assistance to the

small business community. We have also taken action to roll back some

of the taxes imposed during the three years of the socialist regime

which were punitive against the small business community.

AN HON. MEMBER: The Capital Tax Employment Act.

HON. MR. PHILLIPS:

Yes, the Capital Tax Employment Act, which I remember speaking against,

and saying that it was a punitive measure, when I was in opposition.

We've rolled that back. We've lowered the income tax rate to the small

business community, and we have other programs under consideration to

assist the small business community. They will be deliberated on at

greater length at a future time.

MR. SPEAKER: If it requires legislation it is not in order to comment on it now.

MR. LEA:

To the same minister. Obviously the programs that the government has

put in to assist small business have now gotten us to the place where

business bankruptcies are up 50 percent. That is a result of programs

that this government has brought in. I would like to ask the minister

if the government has now decided — with the loss of employment, the

loss of business, the bankruptcy rate up 50 percent — that they will

put a program similar to

Section 11 of the American bankruptcy code

into effect, giving the small business people in this province the

opportunity to have a court-appointed assessor look at the business,

make an assessment and report back to the courts before that legal

bankruptcy action is proceeded with.

HON. MR. PHILLIPS:

First of all, I would like to state that I dispute the figure of 50

percent. I would also like to go on and inform the House that if the

socialists were in power and if they did the things they are promoting

during this period of this Legislature…. They are not behind us in

cutbacks in government spending. Every time they stand in this

Legislature they want us to spend more. The entire small business

community of this province would be broke if we carried out the policy

of the socialists opposite.

MR. LEA: I'd like to ask

the minister: is it, then, the government's policy to continue taking

away from the taxpayers of this province money coming into the treasury

and being spent by the government? Has the government now decided that

they're going to change their taxation policy and leave the money in

the hands of the taxpayers to spend as they choose? The government's

only program so far, Mr. Speaker, is to tax an existent economy to

death. That's their only policy.

MR. SPEAKER: Order, please. Only the question is in order.

MR. LEA: That's right. It's just a bit of a

preamble.

[ Page 7867 ]

I'd

like to ask: do the minister and his government have any program

whatsoever to meet the emergency needs of the small business community

and the people who work for the small business people? Is there any

program of an emergency nature whatsoever that the government has and

plans to implement that saves jobs and saves businesses? Is there any

emergency program that's needed now?

HON. MR. PHILLIPS:

Mr. Speaker, I would like to state that the policies of this government

have created an economic climate in this province such as exists in no

other province in Canada, so that the small businessman can function

and make a profit. I want also to state that they would close down

every project that we have going in this province which creates an

atmosphere and climate where the small businessman can do work, pay his

employees and also pay his fair share, because that's the policy of

this government. I want to reiterate that this government has reduced

taxes on the small business community. It has policies which are better

than those in any other province in Canada.

We're looking at

the future. As I said the other day in this House, when we do something

it will be the best program of any state in the Union or any province

in Canada; it will be good for the small businessman; it will be done

on an economic basis; it will be good for the community; and it won't

be political, as they would do to try to say to the small businessman

that they're protecting him, when they're really doing nothing but

borrowing him into the future and borrowing him to bankruptcy, as they

did with BCDC, when they shovelled money out of the back end of a truck

and the majority of the businesses that they loaned money to went broke

because they gave them too much and too easy, on a political basis.

MR. LEA:

If the present government's policies are so good for the small business

community, why is it that more small businesses are going broke now

than at any time since the great depression of the 1930s?

HON. MR. PHILLIPS:

Mr. Speaker, in answer to the member's question, I'm not sure whether

the member is listening to Trudeau or Broadbent, but I shall certainly

check on the number of bankruptcies.

For the edification of

the House, we must not lose sight of the fact that in the last six

years hundreds of thousands of small businesses have opened up in the

province of British Columbia because of the climate we've created.

Certainly some of them are going to go broke, but more businesses came

flocking to this province, more small businesses opened up their doors

as a percentage of the population than in any other jurisdiction in

North America. Certainly some that came here are going to suffer some

difficult times because they didn't have a chance to become established

before we hit this levelling-off period. That is normal, Mr. Speaker.

But the majority of them found a good business climate and are making a

profit.

Mr. Speaker, if I wasn't tied up in this Legislature

because of the socialists over there I could be out, practically on a

daily basis, opening new businesses in this province. A lot of them are

the new wave of high-technology industries being brought here by my

colleague, the Minister of Universities, Science and Communications

(Hon. Mr. McGeer). I wish I could get out and officiate at the openings

of these new businesses that are coming to the province of British

Columbia because of the policies of this government.

MR. LEA: As the last small business closes and leaves this province. would the minister ask it to please turn out the lights?

HON. MR. PHILLIPS:

It's not like it was when they were government. You didn't dare be on

the highways then because businesses were leaving the province of

British Columbia so fast. As I've said in this House before, the member

for Vancouver East should have worked for one of the movie companies,

because there were never so many ghost towns created in this province

as when he was Minister of Energy and that socialist government was in

power.

Mr. Speaker, I ask leave of the House to correct a statement I made on the evening of May 27.

Leave granted.

HON. MR. PHILLIPS:

On May 27, I made a statement in this Legislature with regard to the

content of contracts awarded on the northeast coal development. I wish

to correct that statement and apologize if I misled any members of this

House.

I stated that the amount of contracts that had been

let in B.C. was approximately $376 million. I said it was 85 percent.

Actually, 85.45 percent worth of contracts have been let in the

province of British Columbia. That is up to March 15, 1982. My figure

with regard to the total contracts awarded does stand at $440 million.

For the House, I want to say that this figure was arrived at by

totalling the number of contracts awarded to firms located in British

Columbia, but also to add to the estimated value of work to be

performed by non-B.C. companies in the province. On that basis, the

British Columbia Railway four-tunnel contracts spent in British

Columbia will be $155,712,102, or 90 percent. In Canada, from those

same contracts, there will be over $1 million spent, and only

$16,301,234, or 10 percent, will go to the United States. That's out of

a total of $173,012,336.

The other calculation made was with

regard to the stacker-reclaimers and the car dumper at Ridley Island.

I'd like to inform the House that even though we may be accused of

being responsible for these contracts at Ridley Island, it's really

under the jurisdiction of the federal government and the National

Harbours Board. A total of $19,004,000 was awarded by Ridley

contracting engineers as follows: 53 percent, or $10,072,120, in

Canada, of which approximately 20 percent, or $3,800,800, will be

performed in B.C.; approximately 33 percent, or $6,271,320, will be

performed in other parts of Canada; and 47 percent, or $8,931,880, is

for outside Canada.

The total contract figure of $7.2

million for the car dumper was apportioned as follows: 93 percent, or

$6,696,000, in Canada, of which 80 percent, or $5,360,000, will be

performed in the province of British Columbia; 20 percent of this

amount, or $1,336,000, will be performed in other parts of Canada; and

7 percent, or $504,000, only on that contract, will be performed

outside of Canada.

To the northeast coal development

project's knowledge, contracts awarded to May 28, 1982, now amount —

this is an increase — to $469 million. Of this, $406 million — not 85

percent, but 86 percent — has gone to companies located in

[ Page 7868 ]

British

Columbia. This amount includes the piling pipe contract awarded by

Ridley Terminals to Nissho Iwai of Japan. According to Ridley Terminals

Inc., 25 percent of that work will be done in British Columbia.

Therefore 25 percent of the total $7.1 million has been credited to

British Columbia. I'd like to inform the House that this figure is

expected to increase as a result of negotiation between Ridley

Terminals and Mitsubishi Inc. I am not really, nor is the northeast

coal office, responsible for contracts let by Ridley Island through the

National Harbours Board of the federal government.

MR. SPEAKER:

Order, please. Hon. members, in making correction of statements made in

the House, the explanation of the correction should not exceed the area

in which an inaccuracy or error was transmitted to the House. Certainly

no new material should be introduced in those corrections.

MR. LEGGATT:

On a point of order, what the minister has done today is not to correct

the record but to introduce a ministerial statement into the House.

Within the rules of the House, therefore, it is appropriate that a

response be made when advantage is taken of the rules in this manner to

introduce a ministerial statement.

MR. SPEAKER: Hon.

member, order, please. When a member is in default according to the

rules of the House, the proper course of action is for that member to

be corrected, as he just was. It is not then in order to put the House

still further in default by abusing still another rule.

MR. LEGGATT:

On the same point of order, with the greatest respect to yourself, when

corrections are made they should be made at the beginning of the

statement and not at the end. When an attempt is made to correct the

record, it seems to me that that is the point of intercession or of an

attempt to dissuade the member from violating the rules. In this case,

when the statement has continued, it seems to me only appropriate that

it has become a ministerial statement. In other words, the statement of

itself could only be interpreted as a ministerial statement since the

minister went far beyond merely correcting the single figure. It seemed

to me that it would be unfair — and I know Your Honour does not wish to

be unfair — not to permit the opposition to answer a ministerial

statement, which we have a perfect right to do in this House.

MR. SPEAKER:

Of course. Hon. member, your point is well taken and I trust the

members of the House will accept the caution that corrections should be

limited to the area in which the error occurred. New information

certainly should not be introduced. From this vantage point the Chair

cannot determine whether or not another correction to an error is still

forthcoming in a statement. Therefore the Chair could not intervene.

Hon. members, shall we proceed?

MR. LEGGATT: I therefore ask leave of the House to answer what became a ministerial statement this afternoon.

Leave not granted.

Orders of the Day

HON. MR. GARDOM: I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Report on Bill 36, Mr. Speaker.

FINANCE STATUTES AMENDMENT ACT, 1982

Bill 36 read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 48, Mr. Speaker.

LIMITATION AMENDMENT ACT, 1982

HON. MR. WILLIAMS:

The Limitation Act in this province is designed to provide reasonable

and appropriate times within which issues which are needed for the

resolution of matters between citizens can be brought by action in our

courts. A variety of limitation periods are permitted under that

statute, but whether or not a particular issue falls within one

limitation period or another is often a question requiring legal

interpretation itself. The difficulty is that if one reaches the

conclusion that a longer limitation period applies in respect to a

particular issue, and the decision on the legal issue is that it is a

shorter limitation that applies, then of course the proceedings brought

to rectify matters between parties is thereby barred and the right of

action lost.

In this province we have some 8,000 instances

when urea formaldehyde foam was installed in dwellings for the purpose

of insulation. This was done pursuant to encouragement by a federal

government program which provided some financial assistance to persons

who sought to use this insulating technique, particularly in older

buildings. As members are aware, subsequent to the installation of this

material serious questions were raised as to whether urea formaldehyde

foam used in such circumstances created health hazards. The debate

raged for some considerable period of time, and finally in December

1980 the use of urea formaldehyde foam for insulating purposes was

banned by the federal government under the Hazardous Products Act.

There is doubt as to whether the period limited for bringing any action

that may have arisen by reason of the use of this product falls within

the two-year limitation period or a longer period. In order that there

be no doubt, we are proposing in Bill 48 to make certain that the

limitation period which applies to any such action would be six years

from December 1980, being the date when the ban of the use of the

material was imposed. As a consequence, this bill provides that no

action which is brought prior to December 1986 would be barred by

reason of the operations of any of the provisions of our Limitation Act.

I indicated, there have been some 8,000 potential lawsuits, and a great

deal of time has already been spent in researching the complicated

legal issues surrounding the use of urea formaldehyde and the prospect

of rights to damages as a result thereof. In order that we are not

faced with actions which are brought in a precipitous manner, this

limitation period will extend the time for the orderly completion of

that legal research, so that any action which is brought will have been

properly considered. The members will be aware that

[ Page 7869 ]

this

is a problem which faces the national government directly. The Ministry

of Consumer and Corporate Affairs of this province has offered major

assistance to the persons who have been allegedly damaged by the use of

this insulating material, and we think that this limitation amendment

provision will also be of assistance to those British Columbians who

may have suffered loss or damage to their homes, and indeed to their

health, as a result of a use of this substance. So we are extending the

limitation period to December 1986, so there can be no question, Mr.

Member, as to whether or not any action that may be brought will be

properly brought within time.

Mr. Speaker, I move second reading of Bill 48.

MR. LEVI:

Mr. Speaker, the legislation is welcome, of course, to the many people

who have suffered from this. We have had an unusual number of people

affected by this problem which came on them as a result of the urging

of a government program. I think that many of us will have something

else to say in respect to the bill when we get into the committee

stage. However, it is welcome, and I'm sure will spell for more than

8,000 people out there the possibility of getting some remedy to what

is an extremely difficult situation.

HON. MR. WILLIAMS: Mr. Speaker, I move second second reading of the bill.

Motion approved.

Bill

48, Limitation Amendment Act, 1982, read a second time and referred to

a Committee of the Whole House for consideration at the next sitting of

the House after today.

HON. MR. CHABOT: Second reading of Bill 34, Mr. Speaker.

TAXATION (RURAL AREA)

AMENDMENT ACT (NO. 2), 1982

HON. MR. CURTIS: Mr. Speaker, I think this bill is

virtually self-explanatory. It deals with a relatively narrow aspect of

property taxation in the non-municipal areas of British Columbia. On

behalf of the Minister of Lands, Parks and Housing, (Hon. Mr. Chabot),

who is in the House as House Leader, I take pleasure in moving second

reading of this bill, because the minister and I have cooperated with

respect to this amending bill.

It has two or three specific

principles. One is an amendment to

section 38 of the Taxation (Rural

Area) Act, required to more clearly state the time periods and

procedures involved in forfeiture because of non-payment of real

property taxes in unincorporated areas of the province of British

Columbia. The revised wording of this

section also brings into the act

certain procedures that were previously covered by regulation. Officers

of the Crown who have assisted us here believe these provisions should

be covered by statute rather than by regulation.

addition, Mr. Speaker, this bill will deal with a new

section to be

designated

section 38.1, which would provide a method of returning

forfeited property to the former owners where, in the opinion of the

minister — and that would be the minister responsible for the

administration of this act — it is just and equitable to do so. No

statutory provision now exists for the recovery of such property,

regardless of the circumstances or any compelling reason why property

should be returned. A period of two years is allowed for the former

owner to apply for the return of the property at the discretion of the

minister. We also provide, through this amending bill, a period of time

during which applications can be received covering properties that were

forfeited before this

section came into force; and of course, providing

that the land is still available, it would be returned to the former

owner.

I hope, Mr. Speaker, all members will welcome this

reform, because it is just that. It is a reform of legislation that has

been either inadequate or, where we have had silence on the matter,

there has been an inability to deal with property forfeited to the

Crown. Again I congratulate the Minister of Lands, Parks and Housing

(Hon. Mr. Chabot) and his ministry for their identification of the

problem and for their reference of it to the Ministry of Finance. Not

many people in the course of a year or two or three would be in this

position, relatively speaking. Nonetheless, Mr. Speaker, the impact on

those relatively few families or individuals would clearly be

devastating, and I am very happy that we are able to correct what has

been. If not an oversight, certainly an inadequacy up to this point.

I therefore move second reading of Bill 34.

MR. STUPICH:

Mr. Speaker. the only comment I would like to make at all is to

congratulate the government on quite a different matter with respect to

this bill now before us. That is, in almost every other bill before us

in this session the government is taking powers away from the

Legislature and giving them to cabinet by regulation. This is quite the

contrary. They are taking something that used to be done by regulation

and bringing it back into legislation. I think that's to be supported,

as is the bill itself.

HON. MR. CURTIS: Mr. Speaker,

I thank the hon. member for Nanaimo for his comment and his

observation. There are other instances, I think, where we have returned

from cabinet to legislation, and this is another one.

MR. STUPICH: Name one!

HON. MR. CURTIS: I've named one; we've both named one. This is the only bill before us at this time.

Motion approved.

Bill

34, Taxation (Rural Area) Amendment Act (No. 2), 1982, read a second

time and referred to a Committee of the Whole House for consideration

at the next sitting of the House after day.

HON. MR. CHABOT: Second reading of Bill 25, Mr. Speaker.

FERRY CORPORATION AMENDMENT ACT, 1982

HON. MR. FRASER:

Mr. Speaker, there are just a couple of small amendments here, the

first one having to do with the guarantee of lease payments. It wasn't

clear that this is required. This amendment ensures the guarantee of

lease payments, that the Ferry Corporation enter into the guarantee by

the province of British Columbia.

The next

section makes the

calculation of the annual highway equivalent subsidy more flexible. In

the prior legislation it was all spelled out: this makes it more

flexible, and

[ Page 7870 ]

the government will decide what that amount will be. As I say, this is a fair change from what existed before this.

I now move second reading of Bill 25.

MR. LOCKSTEAD:

Mr. Speaker, we do have a few comments to make on this bill. The

minister is correct. It is quite a small bill, a two-section bill, that

basically allows the corporation — I'm not sure if the minister

mentioned this — first, to borrow money with government guarantees, and

secondly, allows the government, through cabinet, to make payments in

the form of subsidies to the B.C. Ferry Corporation. This is the first

point I want to dwell on.

Before I get into that part of my

presentation, Mr. Speaker, I want to take this opportunity to do

something which I probably should have done under estimates: that is,

to express thanks from me and some of the caucus members to the B.C.

Ferry Corporation's chairman of the board, Mr. Stu Hodgson. In the last

couple of years, the members on our side of the House have found that

we are able to work with Mr. Hodgson. Any time I have phoned or asked

for a meeting with Mr. Hodgson, he has been right there, and in fact he

has travelled to a number of points on the coast of British Columbia to

help solve problems as they arise. We do appreciate that.

The

first thing I want to discuss on the second reading of this bill is the

reduction in the subsidy to the B.C. Ferry Corporation. The minister is

very much aware that that subsidy has been reduced by about 25 percent

this year compared with last year. As a result, the B.C. Ferry

Corporation has reduced and will be reducing service this summer. I saw

and I'm aware of the corporation's press release indicating that

capacity would be increased by, I believe, 6.5 percent — I'm not sure;

I don't have the figure in front of me. The actual capacity would be

increased. But the fact is that there are fewer sailings. There are

fewer sailings in the summer.

If the Minister of Tourism's

office is correct — I don't know if they are; I guess time will tell —

we can expect more tourists in British Columbia this year than in any

year in the past. I believe that's a statement I read from the

minister's office. Part of the reason for that is the devalued Canadian

dollar and American tourists. They're having an economic recession in

the United States as well, so people will not be travelling so far

afield and perhaps they'll take advantage of the reduced Canadian

dollar and come to British Columbia. What this all means is that

because of this reduction in service, in the number of sailings, once

again we're going to be faced with long waits and overloads,

particularly on busy weekends.

The first real indication we

had was the Easter holiday weekend, when in Earls Cove, for example,

they had four hour waits. On the Victoria Day weekend once again, at

some terminals.... Departure Bay, I believe, was about the worst, plus

the Gulf Islands, where there was quite a dislocation in traffic. All

of this indicates a need for increased service. Those vessels are the

economic lifeblood of the British Columbia coast. We should not be

reducing that service. We should be increasing the capacity. We're

talking about allowing the corporation to borrow moneys to maintain the

present level of service, which has been reduced significantly over the

past year.

So I would like to know from the minister,

when he winds up debate on this bill, what, how much and when we can

expect further fare increases. I'd like to know from the minister how

they arrive at the subsidy that they pay the B.C. Ferry Corporation. I

want to know from the minister what's going to happen to those 600

auxiliary employees who are currently not working because of the

reduction and the reduced sailings. The reduced sailings are the net

result of the corporation's inability, because of the subsidy

reduction, to pay overtime in these cases. Perhaps the minister could

explain that to us when he winds up second reading of this bill.

view of the points I've made on this bill up to now, we over here will

have no choice but to vote against it, unless the minister can justify

his actions in reducing that subsidy to the corporation, reducing

service to the people of the coast and the province of British Columbia.

MR. BARBER:

This bill repudiates Social Credit policy. That policy was enunciated

in the last amendment to this statute, wherein the former minister, Mr.

Davis, enunciated a rather peculiar principle that attempted to compare

the water distance, principally along Routes 1 and 2, to some stretch

of highway between Vancouver and Kamloops. Everyone laughed at that at

the time. It was bizarre; it was artificial; and it was the principle

of the bill which the government is now abandoning. This bill is a

repudiation of this government's policy. However, they propose to

substitute a bad policy with a worse one. At least under the former

policy, bizarre as it was, the revenues that would accrue to B.C.

Ferries from year to year and the subsidy that would be available to

them was predictable. The management and board of the British Columbia

Ferry Authority at least had the benefit of knowing year to year what

their income would be. The formula in the previous bill had that single

virtue. Now the government has at least abandoned ship on the formerly

and provably weird way they had of calculating a subsidy. They admit

it's weird; they're abandoning it here in this bill, so they have to

admit it. But they are not providing us with some other means of

calculating in advance, and thereby some better means of planning in

advance, the revenue picture that B.C. Ferries has to deal with.

This

bill will lead to higher rates for individuals on the B.C. Ferries

system. As my colleague has said, it will lead to greater delays at the

terminals, especially on Routes 1 and 2. Any bill that causes longer

waits and requires higher fares is not something that could ordinarily

be supported by anyone, except perhaps a government desperate for

revenue.

The previous bill at least had the merit of being

able to allow the management of B.C. Ferries to predict its revenues.

What the minister said in his opening remarks is that this new bill

introduces the ancient principle of flexibility. Well, this year the

practical consequence of that is that the subsidy to B.C. Ferries is

down by 25 percent. That means longer waits, higher fares and when the

new rate structure is announced in the fall — as it's now become the

pattern to do so — we predict it will mean significantly higher fares,

in the area of 20 to 30 percent in certain categories. That being the

case, once again we see the hypocrisy of Social Credit's so-called

restraint program. The consequence of this bill is that in the fall the

management of the B.C. Ferry Authority will have no choice but to

announce significantly higher fares on that system. There will be no

restraint exercised at that time. There is no restraint exercised in

this bill.

This bill fails on two counts. First, it will

demonstrably lead to higher fares and longer waits. Secondly, and just

as importantly from the point of view of the public policy being

[ Page 7871 ]

served

by revenues being made predictable, this bill abandons that too, and it

doesn't offer anything better in its place. What it does, simply, is

give up a former arrangement that was at least predictable in its

outcome, and has instead instituted the flexibility for government to

cut and cut — here, as they're doing with B.C. Ferries and across the

province, as they're doing with hospitals and so on.

If the

minister cannot produce a formula that allows a predictable revenue

statement, predictable subsidy and predictable income for the B.C.

Ferry Corporation, they're going to fall further and further into the

chaos of maladministration, which is the hallmark of Social Credit. On

both counts this bill is a mistake, and we cannot support it.

MR. STUPICH:

As my colleagues have pointed out, this bill fails to serve the people

of B.C. on two counts. The first one is with respect to this guarantee

of lease payments.

I can recall when the idea of contingent

liability first came up; it was a long time ago. But at least the

Legislature then had some control over this question of contingent

liabilities. Even to this day there is still some legislation that

comes before the House that increases the borrowing authority for Crown

corporations. There is that opportunity in the Legislature to discuss

the activities of these Crown corporations — to expect the minister who

is speaking on behalf of a particular Crown corporation to justify what

that Crown corporation is doing with its capital by coming before the

Legislature to explain what is going on and why it needs that

additional borrowing power at that time — thereby exercising some

control over the total contingent liability of the province, the total

debt load of the province of British Columbia.

This is not

the first instance in this session of a minister coming before us with

legislation which circumvents that legislative opportunity to control

contingent liabilities by taking out of the hands of the Legislature

and putting into the hands of cabinet the opportunity to guarantee

debts — they don't call them debts; they call them leases — to

guarantee lease payments, with no opportunity to consider the total

outstanding lease obligation in any particular bill, any particular

Crown corporation or in total.

Through this minister and

through cabinet, the Ferry Corporation may decide to build more ferries

when it becomes necessary at some time in the future. They could even

decide to build wharves and do everything in the way of spending money

in the B.C. Ferry Corporation. Instead of paying cash for these things

or borrowing money for them, they'll enter into lease arrangements with

somebody who is prepared to finance them. Without any legislative

discussion at all, it's decided in cabinet to set up a contingent

liability. We have no opportunity to discuss it or ask questions. There

is no opportunity for us to raise a question as to just how far we are

financially committed and how far we are in debt. The government is

embarrassed by the current figure of some $10 billion of contingent

liabilities — $10 billion of debt. They want to avoid that

embarrassment in the future by saying: "No more will we talk about what

the debt is. From now on we are going to enter into lease arrangements.

There will be no upset figure. You won't know just what the commitments

are. It will all be done in a cabinet meeting." On that basis alone we

would have to oppose this legislation.

It is very

interesting that the minister used the word "fair" with respect to the

formula. The word "fair" could have at least a couple of meanings. One

of the meanings may be that it is equitable among all people served or

disserved by this particular amendment. The other meaning could be that

it is reasonable or substantial. Certainly in this case what the

minister is telling us is that it is a substantial change. Previously

there was an explicit formula. Whether it was right or wrong, at least

it was explicit. It was related to the cost of constructing highways.

If we are going to be truly related to that, then the amount should be

increased annually rather than experience a decrease as it has this

year, as is the case with another bill before us. The government came

in with a formula. This year they don't like the formula so they're

taking the opportunity to discuss the formula out of the hands of the

Legislature — in this instance the formula with respect to subsidizing

the ferry corporation. They are saying: "We don't want to come in here

and tell you what it is going to be. We don't want to be embarrassed by

the changes we want to make. We may want to sweeten the pot in an

election year. We want to be able to make those decisions and have

those discussions behind the locked door of a cabinet room. We don't

want to let the light shine in to that kind of discussion. We are

taking the opportunity to review this formula and know how it is

arrived at out of the hands of the Legislature, and we will make our

own judgments as to whether or not it is fair — in the sense of not

being unfair or in the sense of whether or not it is a large,

substantial change." On both counts — the fact that it takes the

opportunity to set limits to government borrowing and to discuss the

formula that is going to be used out of our hands — the opposition must

oppose this legislation.

[Mr. Davidson in the chair.]

MR. HANSON:

I rise to oppose this bill, particularly

section 2, which substantially

alters the way the B.C. Ferry Corporation is to receive a subsidy for

its operating costs. As you know, Mr. Speaker, the ferry system between

the mainland and Vancouver Island is the highway system for Vancouver

Island. My opposition is that it places the citizens of Vancouver

Island as second-class citizens in terms of their access to a highway

network.

Just recently the minister responsible for the B.C.

Ferry Corporation, through the Minister of Finance, reduced the highway

equivalent subsidy to the corporation from, I believe, $62 million to

$47 million for this current year — roughly 25 percent. That has had an

extremely negative impact on the ability of the corporation to provide

the kind of service that Vancouver Islanders deserve. I have stood in

my place in this House on a number of occasions and pointed out that

the people on Vancouver Island — because we don't have an extensive

network of highways and rely heavily on our ferry system — do not get

our fair share of the highway and transportation budget for the

province of British Columbia. When you look at the number of electoral

districts on Vancouver Island and you break down the amount of money

per electoral district, you see quite clearly that Vancouver Island

gets short shrift in terms of the transportation budget. We ask for our

own fair share. Our fair share is through the highway equivalent

subsidy which allows the corporation to guarantee an adequate level of

service to the people of the Island without placing an undue burden in

the form of a toll. The trend with the change in this legislation will

result in much higher ferry rates for the people on the Island. This

will result in more bankruptcies for small businesses on the Island

which are already having difficulty competing with their counterparts

[ Page 7872 ]

the mainland. It is a hardship for the senior citizens on the Island

and other citizens who want to travel back and forward. All the MLAs,

by the way, have a pass to ride the ferry system. The citizens we

represent do not. They enter past that toll booth at the B.C. Ferry

Corporation and they pay — with children and other riders in addition

to the car driver — a large amount of money to just pass between

Vancouver Island and the mainland.

It is an onerous burden

on the people of the Island. It has a negative impact on the tourist

industry and small business on the Island. It makes it extremely

difficult for all businesses to compete. I would prefer to see that

ferry system as an extension of the highways system. We don't have

tollbooths at Hope on the Trans-Canada Highway, or at Kamloops, at

Prince George or on the Yellowhead. The people on Vancouver Island,

through their provincial taxes, contribute to the maintenance and

construction of highways throughout the province. There's no problem

with that at all. It comes out of general revenue. We want to see a

first-class highway system in the province, and we don't mind paying

our tax dollars there. We contribute our tax dollars to snow removal

all over the province. What we ask in exchange is our fair share. Our

fair share is a highway system in the form of the B.C. Ferry

Corporation at rates the public can afford. I'm afraid they're moving

to a user-pay situation, where come November they'll be looking in the

neighbourhood of $15 or $16 per car and driver, which will be a real

economic hardship during a recessionary period.

Before the

highway equivalent subsidy was reduced from $62 million to $47 million,

the Minister of Finance (Hon. Mr. Curtis), in a money grab on the

corporation, refused to make the quarterly payments on time, denying

the corporation the interest they would have accrued on the basis of

those quarterly payments of approximately $15 million. They lost

revenue of approximately $7 million or $8 million in interest, which

again has resulted in a curtailment in the number of sailings and the

service in general.

The minister will argue that the ferries

have been lifted and stretched for greater capacity. I don't deny that.

There's an approximate increase of 10 percent in capacity. But there's

more to it than that. The ferries rely on a quick turnaround time to

avoid the long lineups. It's not just the number of cars that you can

pack onto a ferry, but it's the rotation time in and out of the

terminals. That's the thing that accounts for the long delays, makes it

very difficult for the general citizenry to move back and forth, and

dissuades tourists and other British Columbians and Canadians who would

like to see this beautiful part of the world.

The

removal of that supplementary vessel — the fifth vessel — on the Swartz

Bay-Tsawwassen and Nanaimo-Departure Bay routes, routes 1 and 2,

lengthened the turnaround time. During this recessionary period,

initially there has been some decrease in traffic. But as the late

spring and early summer progresses, as children get out of school and

vacation time comes, the volume is going to be substantial. The

tourist-related industry on Vancouver Island depends heavily in this

recessionary period on having a good tourist season. I think the fact

that the government, through the corporation, shortened the peak period

by approximately six weeks for this year.... Last year I believe you

started sometime in early June and finished in October, and this year

you're going to be substantially decreasing that peak period. That peak

period means the number of sailings per day, etc.That in itself, I believe, is having a negative impact on the economy of Vancouver Island.

Washington state right now there is a program encouraging people all

over the United States to come and visit the state. It's called "The

Other Washington" program. Washington State Ferries is spending its own

tax dollars to encourage people to come to Washington, and to take an

additional leg of the journey to British Columbia. Washington seems to

be more actively encouraging tourist traffic into British Columbia than

our own government. The actions taken by the government to shrink the

revenues available to the corporation, to curtail the frequency of

services in terms of numbers of sailings and also to shrink that peak

period is really a disservice to the people of Vancouver Island.

reiterate, we're not getting our fair share of the transportation

dollar. There is a negative impact on our economy that we can ill

afford. I oppose this bill. It allows the cabinet to move from a

financing formula which I would like to read into the record. The

previous legislation stated that the cabinet would grant the

corporation money which would be "substantially equivalent to the

aggregate of the annual cost of maintaining and the annual amortization

of the capital cost, of lengths and classes of highways in the Province

which, in the opinion of the Lieutenant Governor in Council, are

substantially equivalent to the ferry routes operated by the

corporation...." What that says, Mr. Speaker, is that the cabinet would

establish a formula whereby the citizens that use on-water highway

links would be given the equivalent subsidy to those using asphalt on

the mainland. We feel it's unfair to move to new language which repeals

that

section and in turn places the authority to set the financing

subsidy to the corporation entirely at the discretion of the cabinet.

know what that will mean. We've seen what happened in the cases of the

hospitals and schools. We're going to have the annual highway

equivalent subsidy reduced substantially from now on by the cabinet,

and they're going to move to a user-pay situation where the citizens of

Vancouver Island are going to have to pick up the costs of operating

those ferries, and we're going to be faced with $16, $18, $20 or $25

ferry fares in the future.

It is unfair, Mr. Speaker, and

the opposition unanimously will oppose this bill. But I believe that

the minister, if he was to exercise his judgment and his fairness,

could withdraw this bill and give the people on Vancouver Island their

fare share of the highway and transportation budget for this province.

MRS. WALLACE:

Mr. Speaker, it seems to me that in this bill we have another Social

Credit rubber room. We have a flexible ceiling in terms of lease money

that can be paid out for ferries, and on the other hand we have no

floor on the subsidies that can be paid for the operation of a very

necessary and essential service to Vancouver Island.

seems to me to be a direct attack on Vancouver Island. Some of the

people who live on this Island have to go to the mainland regularly on

business, and not only are the costs going to increase but they're

going to find that the lineups are worse than ever, and there's no

provision for any reservations. Even at the peak tourist season, the

local resident — the commuter, if you will — who goes back and forth

regularly has to get in line along with the tourists, and it's a very

great hardship. It's an expensive cost to firms that are using those

ferries regularly.

Much has been said about the passenger service, but I would like the minister to consider what this does to freight

[ Page 7873 ]

costs

as well. A great deal of freight is moved on those ferries. As the

delays get longer and we find trucks having to sit and wait for one,

two, three or more hours in order to get on board, and with the related

costs and then the higher tariffs, it puts an unfair burden on

producers such as agriculturalists, on manufacturers and on anyone who

has business to do on Vancouver Island. It's a very unfair way to move.

It's

interesting to note that the Minister of Finance (Hon. Mr. Curtis) and

the Minister of Education (Hon. Mr. Smith), who are from Vancouver

Island, are not in the House today. I think it's very interesting and

pertinent to note that, because they must be very concerned about this

bill. The two Social Credit members who sit for this island are, I'm

sure, concerned about what their government is doing to Vancouver

Island. And let me tell you that those of us on this side of the House

from Vancouver Island are definitely opposed to this change in the

legislation, because we are concerned about what happens to our

constituents. It would appear that those two MLAs are not concerned

that their constituents are going to face the same high costs and the

same problems.

It means that things like the cost of food

are going to go up. When you recognize the amount of freight traffic

that comes across on those ferries, in the way of Washington alfalfa

and feed grains and many, many products that go into producing

foodstuffs for the people here on Vancouver Island, the cost of those

inputs is going to increase. As a result, either the farmer's going to

be caught even worse in the price squeeze, or if he has some mechanism

such as the Milk Board where the cost of milk can reflect that, it's

going to mean that people in an area tied basically to the forest

industry, with a great deal of unemployment, are going to be forced to

pay more for milk and foodstuffs at a time when they can very ill

afford it.

This is just another example of the way this

government moves in gathering money for itself, by decreasing the

payments that are justly owed to a Crown corporation such as B.C.

Ferries. It's just one more example of how these decisions are made in

secret, behind closed doors, at the whim of cabinet for whatever

political reason they may have. I would suggest that this is a

political bill inasmuch as Vancouver Island has indicated time and time

again that it is not particularly fond of the Social Credit government

and has given a lot of support to the opposition. It seems to me that

this is a slap in the face to Vancouver Island. It's a partisan

political bill, and it's very unfair to the people who live on

Vancouver Island.

MR. MUSSALLEM: It is certainly

refreshing to hear hon. members of the opposition speak so glowingly

about the ferry system. They forget that the ferry system was a Social

Credit idea through and through, from start to finish. It was only a

few years ago that the Canadian Pacific Railway decided to withdraw the

one boat that was running to Victoria and have one crossing only to

Nanaimo. They forget that this House sat still. It was the Social

Credit government that decided: "If you boys aren't going to go to

work, we're going to put a ferry system on the Island second to none."

It is remarkable that as we stand here today and discuss this matter,

these people on the Island do not pay tribute to and give approval of

that great system.

It should be on the record that in all

the world — and I don't exclude anywhere whether it be Great Britain,

Ireland, Norway, France, England, Italy and the Messina Strait; no

matter where — there is no ferry system that can even remotely compare

with this system. We are not acknowledging this, or the Washington

state ferries for that matter.

MR. BARBER: Socialism in action.

MR. MUSSALLEM:

Well, indeed it was necessary. This system was necessary, and it was

put in. It was a Social Credit idea, and it's working well.

was only short while ago in question period in this House that I heard

an hon. member from the opposition ask the Minister of Labour (Hon. Mr.

Heinrich) why it was that a certain bread company had moved its

operation from Victoria and is now producing all their bread in Langley

and shipping it to Vancouver Island. They're asking why this is

possible: "Why don't you do something, Mr. Minister, to stop it?" What

I'm really saying is that the ferry system is so efficient that it was

bringing goods and services to Vancouver Island until the prices here

were the same as they are in Vancouver — the lowest in British

Columbia. Competition was created because of the free movement of

freight; they could supply goods and services here at the same price as

they did in Vancouver. Why don't we hear about this? We don't hear a

word about it. This is a great system. Washington state ferries has no

subsidy. Theirs is user-pay all the way through. But here they have an

excellent subsidy, and whose idea was that? Was that requested by the

opposition? No. One day this government decided that it was only fair

to have a system like highway transit, and that they would get an

allowance. I think the allowance got too big and too magnanimous.

There's a limit to what the public purse can pay. Vancouver Island is

entitled to a lot of consideration, but not the whole thing. There has

to be some judgment and some reason. I think that the government has

got to come back and establish an equitable subsidy, because the

principle has been established but the increases have been too fast. We

are in a time of restraint; everybody must be restrained.

was riding the ferry a short time ago, and I want to tell you that they

are big ships. They can carry a lot of cars. There's always a line-up.

Remember, the ferry is not a bridge system. There must be waits, You

can't arrive there 20 minutes ahead and get on that ferry. To wait for

an hour is not a hardship. It should be expected. Where else in the

world can you have a sea voyage and entertainment and enjoyment in the

course of two hours? It's a great system. Let's acknowledge that. Let

the people of Vancouver Island acknowledge this great system. I think

it's high time they did.

The principle of this bill says

that we're going to be fair to Vancouver Island. There's no way that

that can be changed, because this system was the creation of this

government. It created what we have on the Island today. It's the same

as the mainland, for all intents and purposes — except, as Vancouver

Island people are known to say, it's a more beautiful place. Perhaps it

may be, but it was the ferry system that created that aura and that

feeling of being able to move from the mainland to the Island to enjoy

the beauties of this province. We can't expect that system to be

extended to the point where all British Columbia must pay for the

services which mostly concern the lower mainland. I think that all of

British Columbia should pay its share, but not all of it, and I think

that the minister is quite correct that the highways subsidy has got a

little too heavy. We have to look at it and we'll have to be able to

adjust it, and this is what they're doing.

[ Page 7874 ]

want to tell you that all these things put together simply come back to

one point: it's a great system, and it is not and will not be user-pay.

It is paid for greatly by the rest of British Columbia — by the people

from Omineca, Prince George, Atlin....

SOME HON. MEMBERS: His is free.

Interjection.

MR. MUSSALLEM: The hon. member says: "His is free." He is referring to the fact that MLAs have passes.

SOME HON. MEMBERS: No, his ferry is free.

MR. MUSSALLEM:

Well, the hon. member brings out this whole point, but all inland

ferries are free. Does he know that? And that's another great service

by the Minister of Highways: all the inland ferries transporting people

across rivers and inlets are free of cost. That's a magnificent thing.

Rather than pointing a finger they should say: "Isn't it wonderful that

we can do this for the people of British Columbia?" You can't expect a

free ferry across a body of water like these straits — it's too big and

too much to expect — but the people of the interior have the right to

travel across the inlets. There is a river in the way and there are

ferries there, with the policy of this government, not the Social

Credit government ever.... The ferry between Albion and Langley carries

more cars than the Tsawwassen ferry. Do you know that, Mr. Speaker?

MRS. WALLACE: All for free.

MR. MUSSALLEM:

More cars, all for free, but it's a service to people of the lower

mainland. The minister, at the same time, is giving a subsidy to

Vancouver Island. But it cannot all be free, my friends. Nothing is

free. You have to be fair and right, and the user must pay his share.

But Vancouver Island has been served a great deal by having all

commodities and prices equal to the mainland, and that is because the

ferries are there. I think it's a wonderful service and rather than be

criticized it should be appreciated and the subsidy should be adjusted.

MR. COCKE:

Mr. Speaker, often when I listen to the member for Dewdney, with a

heart rather sympathetic toward the government — as sympathetic toward

that government as I can be — I think: with friends like that, who

could possibly need an enemy?

Mr. Speaker, I was interested

in the fact that a number of my colleagues from Vancouver Island spoke

in terms of what the potential is for here. I think they spoke

eloquently, and I'm certainly not going to reiterate what they said; I

believe that the bill is going to do precisely what they said. I'm

going to take a little different tack, but first I would like to talk

for a moment about the member for Dewdney and his praise of the old

Socreds. He was here when the Black Ball Ferries were nationalized by

the B.C. Social Credit government — nationalized! There are two cases

of nationalized industry in this province. Two. One was B.C. Electric

and the other was Black Ball Ferries.

HON. MR. CHABOT: Why?

MR. COCKE:

Why is of no significance. But don't let those people sit over there

and talk about socialized industry — socialized this, socialized that.

You're the only people who have ever socialized anything in this

province. Now getting away from that....

Interjection.

MR. COCKE:

Certainly it was a good idea, and if W.A.C. Bennett were alive today

and saw what they're doing with the ferry system in terms of keeping

all the decision-making behind those closed doors, he would be very

unhappy.

Mr. Speaker, we acknowledge the ferry system; we

acknowledge it and suggest that it should not only be a service to the

people but be open to the people's scrutiny. That's what I see wrong

with this bill: it's another piece of legislation that takes away the

decision-making from the Legislature itself and puts it strictly into

the government's hands. Over the past six years I have been watching

over the past six years bill after bill coming before this House to

take away the power of the Legislature and put that power into the

hands of the cabinet. Colleagues have said to me: "Why is it that we

have had such a dearth of legislation before us this year, last year

and the year before?" Let me tell the people of British Columbia that

it's because everything is now enacted by order-in-council in this

province, and it's an utter disgrace. Every time they get an

opportunity to remove the decision-making from this public body, from

the openness of the Legislature so that people can understand what's

going on, they take that decision-making into that cabinet chamber

where nobody knows what is said, nobody knows the debate, and everybody

is on the same side. Even the member for Dewdney (Mr. Mussallem)

understands that. This is a disgraceful situation, one that continues

to come before us, bill after bill, enactment after enactment, taking

the decision-making away from here. And why? Because this government

acts like a corporation. They want to do everything in secret, make all

their decisions in secret. Then the people wake up one day and say:

"How come the opposition didn't argue?" The opposition can't argue over

decisions that are not taken in this Legislature. I suggest to you that

again we're looking at an untenable situation.

I'm

interested that the member for North Vancouver–Seymour (Hon. Mr. Davis)

isn't here debating this bill. This bill repudiates the position taken

and the legislation put forward by that member, yet he's not here to

debate it. I like the minister, but he's going to get up and do his

duty for that treasury bench, who have decided they have more brains,

more understanding of the needs of the people than the people do

themselves. That's when the arrogance of government has gone too far.

We see before us a government that deserves to be turfed out on their

ear as quickly as possible. Do you know the first thing they're going

to do when they are turfed out? Those remnants are going to stand up as

the opposition members of the time and say: "Put the decision-making

back in the hands of the Legislature." You watch; you listen to them

whine. You won't be here, but there will be others. I would be

delighted to suggest at that time that maybe they should show some

repentance. They sure don't seem to have any signs of it now. Seeing

the backbenchers, those freedom fighters, putting up with this is

really gross.

[ Page 7875 ]

HON. MRS. JORDAN:

Mr. Speaker, I don't intend to prolong the debate, but I'd like to make

a couple of points as a result of some of the statements made.

The

member for New Westminster made reference to what he called the

takeovers of the B.C. Ferries and B.C. Hydro in relation to this bill.

I'd just like to comment on that and remind the member that unlike the

NDP, we're not in the hands or pockets of big business or big

government, the federal government or the union bosses. When the

private sector, as in the case of the ferries, failed to serve the

public of British Columbia by putting its interest before their own, it

was necessary to develop a ferry system, one which has become the envy

of many parts of the world. It's not only a tourist attraction, it's

also a great attraction for our own citizens. It's still viewed by

people in other parts of the world as one of the most exciting and

least expensive rides in the world. It is, by the nature of its rates,

a very favourable rate to our own citizens. It is not, and the record

should show it, subsidized by the federal government, as in the case of

eastern Canada.

I did want to recall for the House a little

incident that I enjoyed when the hon. member for New Westminster (Mr.

Cocke) was himself in the cabinet during those dark days of 1972 and

1975 when he gave away the ferry service. We were invited down — it was

almost a Dear Pat letter — to come in and join him in a discussion.

That was when the socialists changed their leather jackets to

pin-striped suits and double-breasted waistcoats. I walked into this

room, and here was the member looking terribly elegant in his

double-breasted waistcoat, pin-striped suit and old school tie. It was

a socialist school, I have to admit. He was talking to us about the

need for transportation for members of the House from Victoria to

Vancouver.

[Mr. Strachan in the chair.]

His

solution was that we should start a special short-hop government

service to serve people such as himself and the public, in direct

competition to a then existing airline and several others competing or

trying to develop increased transportation opportunities from Vancouver

to Victoria. Your position in relation to transportation in this

province really depends not on the suit you wear but on which side of

the House you sit. I don't think the record should go unclear in the

fact that that member, charming though he was, was quite prepared to

put a then existing business out of business with direct contribution

and development of a line with taxpayers' dollars and increase the

deficit they built up during that time. There is no way that the Social

Credit government put any private business out of business with B.C.

Ferries. The ferry service is the pride of the people of British

Columbia and one of the prides of our tourist industry.

would also like to refer back to the statements made by the first

member for Victoria (Mr. Barber), the second member for Victoria (Mr.

Hanson) and the member for Cowichan-Malahat (Mrs. Wallace). One of the

members mentioned that Washington state, in his view, was spending more

dollars in trying to attract visitors to the province of British

Columbia than our own provincial government. I would like to enlighten

him as to the facts of life, because I know he wouldn't want to

intentionally mislead the public or our industry, because, Mr. Member,

that simply is not true. Washington state has a very limited budget in

terms of anything that state does to assist the tourism industry. In

fact this year is the first time they've ever had any type of budget at

all. We're very pleased that they have, because we look at those ads as

being a great help to complement our own efforts in attracting people

to the Pacific Northwest as a visitor destination area. We also work

very closely with Seattle and Washington state to develop triangle

tours which will help us and them, and be a boon to all of us because

of their impact in attracting people to the Pacific Northwest.

The

lack of understanding, if I may put it graciously, that that member

shows is that the ads he sees in British Columbia about travel to

British Columbia are designed solely to attract our own B.C. citizens

to travel within the province. The majority of our budget and marketing

is done outside the province of British Columbia. By running ads to

visit B.C. inside B.C., we're not going to attract many people from

outside B.C. to inside B.C. So our efforts are directed outside the

province in neighbouring provinces such as Alberta, Manitoba and

Ontario. We've launched a major ad and information campaign in Ontario

in the last two years, and have increased this to the spring and fall

as well as the summer to attract people to B.C. We also run promotional

programs in Washington, Oregon, California, Arizona and the other

neighbouring states. Many of these are done through the placement of

ads in various magazines, but it's also done through our three sales

offices. There's one in Seattle, one in San Francisco and one in Los

Angeles. They're responsible for a major portion of the promotion in

these areas for people coming to British Columbia. We also host many

trade missions to British Columbia from those areas, all of which use

the ferry service and which help promote our province. They certainly

appreciate the ferry service the Minister of Highways makes available

to our citizens and them.

Beautiful British Columbia

magazine helps to attract people here. I wouldn't want that member to

leave any impression in this debate about the ferries with either the

public of British Columbia, whose tax dollars we spend, or visitors

coming to British Columbia, that the ferry service isn't still a very

exciting experience in itself. The service is excellent, more this year

than last year, and the fare is very fair.

I would also like

to comment in terms of their attitude towards the restraint program in

discussing the ferries, This is quite a change, because all through the

debate on the restraint program, which is trying to help cut the cost

of government to our own citizens and thus the cost of doing business

to various industries, as well as to our citizens, is a big help and a

boon to the tourist industry in British Columbia. If the government, in

either its action with regard to the ferries or in its other actions in

regard to the statements made by the NDP on the restraint bill, were to

follow the NDP's course, then the cost of doing business in British

Columbia would soar, and that would be extremely harmful to our tourist

industry.

As a government, we are endeavouring to control

the increase in costs of government, which in turn helps to control the

increase in costs of doing business, and that affects our tourism

industry a great deal. Our industry is doing well. It's healthy. It's

not without its sensitivities to international market and economic

conditions. It's not helped when, in discussing our ferries, members of

the opposition — I'm sure inadvertently — make irresponsible statements

in order to try to garner headlines which in themselves could be very

harmful to our industry.

I hope the hon. members will

reflect upon the statements they've made. We've made it very clear that

we have an excellent tourist situation in British Columbia. Our ferries

are

[ Page 7876 ]

a major asset to that. The fares are very reasonable and the experience is excellent.

MR. HOWARD:

Other members have outlined very ably the reasons for opposing this

bill, dealing with the fact that it reflects the dictatorial attitude

of a government doing more and more in the secrecy of the cabinet room

and less and less openly, for public scrutiny. While we're on that

subject, I'd like to discuss some of the things that have happened

financially with B.C. Ferry Corporation, and show how a distorted

picture has been presented. If it had not been, then perhaps we

wouldn't have to be going through this process now of provincial

government endorsements for lease payments.

In 1977, when

the assets of what was then the Ferry Corporation within the Ministry

of Highways existed, and they were transferred to and received by the

B.C. Ferry Corporation, it was done at an assigned value of a dollar,

even though the general rule — bookkeeping and accounting-wise — upon

the transfer of assets is to record them on the balance sheet at either

their market value or their depreciated value, whichever is the lower.

After

the Ferry Corporation got the assets, they determined that it was

necessary to give some balance-sheet figure to what it was that the

Ferry Corporation owned. So they determined that there would be an

estimated replacement figure of $250 million. There seems to be no

evidence whatever anywhere that an attempt was made to use the

standard, normal accounting practice of trying to establish a market

value. The Crown corporations committee — with which, Mr. Speaker, you

are thoroughly familiar, and with which the member for Dewdney (Mr.

Mussallem) who spoke earlier is thoroughly familiar, because he also is

a member of that committee — which is dominated by Socreds, determined

that the value of assets which the B.C. Ferry Corporation had was $140

million, not the $250 million assigned to it for balance-sheet purposes.

Now you could say: "Well, so what? It's merely an entry. It's merely

a figure in a book." But it's significantly important, because asset

value is what you start from in determining depreciation. In the

keeping of books, usually it's necessary to have income sufficient to

cover depreciation. Usually it's necessary to ensure that funds coming

in cover what is being wasted — not in the wasteful sense, but wasted

in an accounting sense of depreciating over time. It's losing its

value. At some point in time — I don't know what it is for a ferry or a

ship; it might be 20 or 30 years — it becomes worn out or obsolete and

needs replacing. The result of having a higher-than-actual asset value

is that you get a distorted picture with respect to depreciation and

operating expenses and the general public is misled by the bookkeeping

arrangement of the Ferry Corporation. If you have a higher asset value

than is actually the case and have to base your performance on the

depreciation of that asset value, then you could report

higher-than-actual operating expenses and use that a the foundation to

increase fares accordingly. You could us the higher evaluation and the

higher operating expenses to cover the depreciation as the rationale

for increasing fares — in other words, to give the general public a

picture that is no in accordance with the facts. You could use it as a

rationalization for soaking the public more on this so-called user-pay

basis. That was the unanimous opinion of the Crown corporations

committee, and it was reported to this House. It's not exclusively my

own view. I'm just simply saying what each of the 15 members on that

committee, nine of whom were Social Crediters, said in passing judgment

on the bookkeeping practices of the Ferry Corporation.

Secondly, in one of this government's moves to take further control and

domination over the affairs of this province, last year it brought through an

amendment to the Ferry Corporation Act which said that any surplus money that

the B.C. Ferry Corporation had in sinking funds to retire debt would belong

to consolidated revenue. The B.C. Ferry Corporation annual report for the year

1980-81 indicated that some of the B.C. Ferry debt is coming due this fall:

a payment is due on October 15 in Canadian funds and a maturing debenture is

coming along on November 1 in U.S. funds. Using the exchange rate that was prevalent

on March 31, 1981, which was the end of the Ferry Corporation's fiscal year,

it was determined that there was $3,014,117 surplus money on the books. It

is surplus money that the Minister of Finance will reach out and take. I'm

not sure whether he has already done it, whether he is going to wait until October

15 when that $10 million Canadian bond or debenture matures or whether he'll

wait for the $3,730,000 U.S. borrowing that will mature November 1 and then

take the excess money. If he waits until that time, it may not be $3,014,117

precisely, because the exchange rate may be different than it was on March 31.

The essence of it is that the Ferry Corporation had surplus money in its possession to the extent of more than $3 million. The government — of which the Minister of Transportation and Highways is a

member and who undoubtedly supports this contention — sought to reach out and

grab for this money itself. It would have been wiser and better for the B.C.

Ferry Corporation to have left that $3 million in its possession, so that it

would have extra money around. Perhaps we wouldn't be faced with increasing

fares in order to find that $3 million or we wouldn't have to enter into

some not very valuable lease-back arrangement. Either way, the juggling of the

books of the B.C. Ferry Corporation has gone on. The Crown corporations committee

expressed a unanimous view on it. The government ignored it completely. We are now in the position of the government

saying: "We don't care what the Crown corporation said, what its views

were, what it examined, what evidence it developed or what its report is; we're

going to go in this direction and take further and further control of the authority

over the Crown corporation, of the annual highway subsidy and everything else

of that nature." What it will mean in a local sense — and I must express this, because for a

number of years there has been a desire expressed in Kitimat to establish a

ferry terminal, so that, apart from Prince Rupert, the only other seaport on

the north coast accessible by rail and road will have a ferry terminal and an

opportunity for people to move in and out of that port via ferry, whether for

the travelling arrangements of residents of the north country, for tourist traffic,

or for a combination of both.

I submit to you that the grabbing of that $3 million by the Department of

Finance out of the funds of the B.C. Ferry Corporation, the alteration of the

annual highway subsidy, and the reduction in funds available to the Ferry Corporation

will put the corporation this coming winter into a virtually impossible task

of trying to make ends meet once the summer season is over and the ferry traffic

drops off. It will put them in the position of having to scramble to make ends

meet, and it will also have effectively postponed almost indefinitely, so long

as this government remains in office, the possibility of

[ Page 7877 ]

people

in Kitimat seeing the day when a ferry terminal will be there. That's a

sad note to have to end these comments on, because hopes had been held

out to people in Kitimat by this government. In fact at one stage, Mr.

Speaker, the cabinet a few years back made a favourable decision to

move into Kitimat and establish that as a ferry terminal port. They

didn't do it by way of an order- in-council setting up machinery to do

it, designating it as a route, or taking any other steps, but the

cabinet made the decision internally that it was a favourable thing and

that they would seek to move towards that. That has all been destroyed

now. The hopes that the people of Kitimat had of having a ferry

terminal there have been scuttled, dashed and gone. I submit to you,

Mr. Speaker, that so long as this crowd of Socreds run this government

that prospect and hope will never be be able to be revived again, What

we need is a change in government, thereby establishing some hope in

the minds and hearts of the people that they will be treated decently

in the future.

MR. MITCHELL: Mr. Speaker, I too would

like to join this side of the House in opposing this bill for simple

reasons: it's going to cost the people of my riding more money. I find

it quite shocking that the Minister of Transportation, who is also the

Minister of Highways, by bringing in this piece of legislation is

deliberately failing to do the job that he has been appointed to do by

the people of British Columbia, and that is to give fair transportation

to every British Columbian equally.

When it comes to

transportation, as the previous speakers have mentioned, there was a

formula on which the government or the corporation could base the money

that they could depend on to move people from Vancouver Island to the

mainland or from the mainland back to Vancouver Island. In spite of

what some people may think, Vancouver Island is still part of British

Columbia. A transportation link throughout British Columbia is a right,

not a privilege — not something that the government in their wisdom and

generosity can give or take away. This is what this bill is doing, Mr.

Speaker. It is taking away something that members of the Island have

established — that we are part of British Columbia, and that we must

have a type of transportation by which we can move freely back and

forth.

There was a subsidy, and when the budget came down it

was quite evident that the Minister of Finance (Hon. Mr. Curtis), the

MLA for Saanich, had decided to cut back on that subsidy to the people

of Vancouver Island. I would have thought that the Minister of

Transportation and Highways would have been fighting and shouting, when

he knows that the job that he was elected to do was to provide

transportation that that minister was cutting back his ability to

provide. But instead he brings in a bill. Not only does it legalize —

as he calls it — making the subsidy more flexible. There should be

something in that subsidy like the gas tax. As the cost of living goes

up, that subsidy should go up. When costs go up, the Minister of

Finance writes into the gas legislation that for every few percentage

points it goes up, he is going to grasp another few nickels from the

people who buy gas — the motorists of this province. The Minister of

Transportation and Highways should have been demanding a fair share and

an equal assessment on the subsidy, but instead he rolled over and was

trampled on and denied that the job that he was there to do was to

provide transportation.

We all know what's going to happen. It's going to increase the cost

of ferries, the cost of food, and the cost of Vancouver Island people to travel

back and forth to do business or for recreation. because they'll have to

pay more and more. They'll have to pay more for gas, because the Minister

of Finance is going to get more from the tax revenues and take more out of the

pockets of the people on Vancouver Island. We are going to have to pay more

on the Island.

The

only thing is that I can see that it follows the record of the

incompetence of that particular ministry. A few years ago, when they

had assets — when they had three ferries that were built and paid for

by the people of British Columbia — they turned around and sold them

for $35 million. And now we who ride on the ferries, the people of this

Island, have to buy back these same ferries that they once owned at a

cost of $89 million. This was a direct debt that was put onto the Ferry

Corporation and instead of building up assets that are paid for and

developing a program that is going to reduce car fares and passenger

fares, this government has deliberately embarked on a program to

increase them, which will cause the people at this end of the province

of British Columbia to have a higher cost — and a lower standard — of

living. Because every time you suck out something from the family

paycheque for transportation or it is added onto the cost of food, you

are raising the cost of living in this part of the province.

This

minister and this government have gone out of their, way to add those

costs on. But, really, what else have they done? What have they done to

protect their own ability to travel back and forth? As cabinet

ministers they have had the use of the government airplanes to fly them

back to their ridings, be it daily, weekly or monthly. They don't stand

in long lineups out at Tsawwassen or Swartz Bay; they're flown back and

forth at government expense — taxpayers' expense. In fact. because they

know that there are going to be increased lineups, they've taken off

some of the government airplanes that were going to do the mapping for

the various departments, so they can have more planes available for

ministers and government executives travelling back and forth. They're

looking after their own ability to fly around — to travel back and

forth in British Columbia. But they are deliberately embarking on a

program that is going to increase fares in British Columbia, especially

to those who live on the Island, because they're cutting back on the

subsidies. They're cutting back on our share of the revenues that go

into highways: it's being cut back on that link from Vancouver Island

to the mainland.

Mr. Speaker, I can't understand why the two

Social Credit MLAs from the Island are not pointing this out in the

cabinet. and why they are not fighting harder for it — why they are not

fighting to protect and make equal.... All that the people on the

Island are asking for is a fair share of the money that goes into the

highway network, and the ferries are part of that highway network. This

is why each one of us on the Island must oppose this particular bill:

it's going to add additional costs, it's going to cut services, and

subsidies are not going to be given out fairly. The ministers, the

cabinet, can fly back and forth to the mainland in their government

planes. They don't stand in lineups. It's the people who are paying the

bill, the taxpayers of this province. the taxpayers of Vancouver

Island. and especially, the taxpayers of Esquimalt–Port Renfrew, who

are demanding that we have the ability to travel freely in British

Columbia. They look towards having ferry rates conic down, not

continually go up and up. Every time the Minister of Finance wants some

more money for something he brings in a new bill. He brings in

something that cuts off revenue to the Ferry Corporation and increases

the fares,

[ Page 7878 ]

the

taxes, for those of us who have to work. I think it can be stated quite

openly that this particular legislation will be unanimously opposed on

this side of the House.

[Mr. Speaker in the chair.]

HON. MR. FRASER:

Mr. Speaker, I'm shocked, to say the least, that all the negative

Nellies on the other side are against the finest ferry fleet in the

world, the B.C. Ferries. It's really surprising to find that they will

even oppose that fine transportation system.

In the last few

years the Ferry Corporation has built new docks and new ships, it has

stretched and lifted the existing ships, and consequently has

immeasurably increased the service to the travelling public of British

Columbia and to tourists, whether on Vancouver Island or in other parts

of the province. I also would like to point out that a larger vessel

has been put on the route to Prince Rupert. For the first time ever,

passenger service was extended from Prince Rupert to the Queen

Charlotte Islands in 1980. I'm quite surprised that they are against

this fine transportation system.

I want to comment on the

remarks made by some of the members. I refer to the member for

Mackenzie (Mr. Lockstead), who said he appreciated the new chairman of

the B.C. Ferries. I acknowledge that. He thanked him and said he's

doing an excellent job, but from there on we sure went downhill fast.

MR. LOCKSTEAD: We sure did.

HON. MR. FRASER: We sure did; not one good thing was said about the ferry system from that point on.

Regarding

the bill in front of us, yes, it reduces the subsidy, but from what to

what? There is still an annual $47 million subsidy allowed here, almost

$4 million a month. The way you people talk over there, you'd think

we're eliminating it. That's still a lot of money.

We don't

intend to let the service go down. We always have our problems on the

long weekends; we continue to try to grapple with them, and they are a

little better than they used to be. I don't think we're ever going to

eliminate some of the lineups that occur. People don't tell us if

they're going to travel on a Thursday or a Friday going one way or the

other, and the same thing on Sunday and Monday of long weekends. One

long weekend they'll hit on Sunday, another long weekend it will be

Monday, and it's always an operational problem. I think it's better

than it was and they're continually working on it, but I really don't

think we're going to eliminate that completely on long weekends.

Regarding

fare increases, I've stated before, and I'll repeat it now, that if

fare increases are required they will be instituted around November 1.

There was a lot of criticism when the fares were increased before in

the midst of the tourist season around July 1. Last year we didn't do

anything with the fares until November 1; that's when fares would

increase again, if required.

The member for Nanaimo (Mr.

Stupich) referred to the borrowing power of B.C. Ferries and that this

bill somehow made the cabinet able to borrow in its secret confines.

Well, Mr. Speaker, what I want to tell the Legislature is that the

original Ferry Corporation Act provides and allows for a $250 million

line of credit for B.C. Ferries. I couldn't quite get the member for

Nanaimo's line of thinking and discussion in view of that. That has

existed there all the time. Unless some government wants to change it,

it is there, and it has been ever since the Ferry Corporation came into

existence, which I believe was in 1977, with the Ferry Corporation Act.

I'd

like to point out to some of the members who are worrying about costs

and so on that I feel that it is a very economical service, a great

service and a bargain service. Regarding our fares, nobody mentions the

fact that if you compare them with other fares and other transportation

systems, there really is no comparison at all. I refer to commercial

airlines and so on. I think that we get carried away a little bit. It's

still very economical and an excellent service almost a bargain service

in view of all the money that has been spent on B.C. Ferries: I think

around $100 million in upgrading that service in the last five years,

trying to keep up. It all has to be paid for somewhere or other. I

think the $47 million this year is certainly going to be adequate.

That's still in addition to the cost of supplying....

MR. MITCHELL: What does it cost to drive to Hope?

HON. MR. FRASER:

The member says: "What does it cost to drive to Hope?" We're hauling

the vehicles from Swartz Bay to Tsawwassen, and they couldn't drive

them for what we charge. I think somebody should sit down and figure

that out. We're talking about bargains. Try to drive the same distance

and you'll find that there's very little difference, if any, if you

operated on a blacktop road.

The second member for Victoria

(Mr. Hanson) makes the point — I think he's actually starting to

believe it himself — that Vancouver Island doesn't get its share of the

transportation dollar. I think that should more properly be discussed

in the estimates of this ministry, but if you include the ferry subsidy

which we're discussing here today, there seems to be a disproportion

the other way, by the information I have.

The member for

Cowichan-Malahat (Mrs. Wallace) makes a good point regarding freight

charges. It is my information that our rates, freight-wise, are cheaper

than CP marine. So I feel that we're certainly competitive. I also

understand they're just waiting to raise theirs again and widen the gap

further. It's cheaper to ship a tonne of freight on B.C. Ferries than

it is on CP, our competitors.

Mr. Speaker, I take pleasure in moving that this good bill be read a second time.

Motion approved on the following division:

YEAS — 30

Waterland

Hyndman

Chabot

McClelland

Rogers

Smith

Heinrich

Hewitt

Jordan

Vander Zalm

Richmond

Ritchie

Brummet

Ree

Davidson

Wolfe

McCarthy

Williams

Gardom

Bennett

Curtis

Phillips

McGeer

Fraser

Nielsen

Kempf

Davis

Strachan

Segarty

Mussallem

[ Page 7879 ]

NAYS — 23

Macdonald

Howard

King

Lea

Lauk

Stupich

Dailly

Cocke

Nicolson

Hall

Lorimer

Leggatt

Levi

Gabelmann

Skelly

D'Arcy

Lockstead

Brown

Barber

Wallace

Hanson

Mitchell

Passarell

Division ordered to be recorded in the Journals of the House.

Bill

25, Ferry Corporation Amendment Act, 1982, referred to a Committee of

the Whole House for consideration at the next sitting of the House

after today.

The House in Committee of Supply; Mr. Davidson in the chair.

ESTIMATES: MINISTRY OF

AGRICULTURE AND FOOD

(continued)

On vote 5: minister's office, $164,608.

MR. HALL:

Now that we've had a little while to debate the administrative

responsibilities of this minister as far as his direct involvement with

agriculture is concerned, I think this is the time that we might turn

ourselves to his direct involvement in one of the Crown corporations,

namely the Insurance Corporation of British Columbia. While we don't

have a resolution on record from the Insurance Corporation of British

Columbia — as we do in the case of the agriculturists in the province —

calling for his resignation, we do have the question of the

corporation's activities last year to examine. If one is to look at the

general view of the corporation, one could only come to the same

conclusion. Those of us who might be the shareholders of that

corporation could only call for the same treatment the farmers would

like to see the Premier mete out to this minister.

As the

member of cabinet on the board of directors, the minister has

supervised the greatest amount of premium income over the past 12

months, the greatest number of registrations and the greatest drop in

public confidence in that corporation since the corporation's

inception. I don't like to say that, because while I don't hold any

brief for the minister at all, I have a great deal of hope and some

pride in the corporation. I think this minister, in his stewardship, is

not doing that corporation any good whatsoever.

We turn now

to the image of ICBC. Any of us at all who are involved as MLAs, not

necessarily specializing in dealing with the subject, can see by our

correspondence, our phone calls and by observing the kinds of things

going on in the territory that the ICBC image is in a mess. We've seen

the headlines to that effect: "For lawyers, the Insurance Corporation

of B.C. Settlement Process is a Gold Mine," is one headline; "Nobody is

in Love With the Corporation," is another; and "The Claims Procedure is

Mad Hatter's Tea Party," is another — headline after headline pointing

out the public's gradual, escalating discomfiture with the corporation.

don't know whether the minister wants to finish this corporation off or

whether he wants to make a go of it. That's why I called the division

the other day and tried to express that all of us in this House support

ICBC by having a unanimous motion that we stood by ICBC on the bill the

other day. Part of the problem is that the party the minister

represents so frequently deals with the question of dismantling ICBC.

The Socred president, Mr. Smith, has asked for its phase-out. A couple

of backbenchers have asked for the corporation to be dismantled. I don'

t know how you can expect a corporation to carry on and provide the

level of service that it should do when it's continually under attack

by people whose first duty and job should be to support it.

I was on the board and saw the president of a political party that is

currently represented by those who sit on the treasury benches call for

the dismantling of the corporation of which I was a director. I would

feel discomfited. I'd wonder what kind of advice I was getting from the

cabinet member who was sitting on my board. I'd wonder where his real

loyalties would lie, when you see the continual catalogue being built

of the kind of complaints, worries and concerns that were not only

being brought to this House in ever-increasing numbers. but were a

feature of some of the criticism of the Crown corporations committee

hearings in Vancouver. It was February. Wasn't it, Mr. Chairman, that

saw these kinds of headlines I've read out, where people have been

outraged by the abuse they have received from the corporation on their

claims. There is no wonder that we must feel very concerned about the

current image, stance and activities of the corporation. Let me say

now, before it goes much further, that this is not the corporation that

we designed, that we envisaged and that was put into effect. I don't

think this corporation subscribes to the standards and practices that a

monopoly insurance corporation should practise in this province at this

time.

Mr. Smith — as I mentioned before — said in an interview with Mr. McEachern of the Sun

that the party is finding ways of phasing out both the ICBC and the

agricultural land reserve. How interesting that the same minister is in

charge of both. We know he is phasing out the agricultural land

reserve. He said so on Friday. Now it is obvious to me that some of his

activities would appear to be leaning towards phasing out ICBC.

I'll

just pick one letter out of several to give you some idea of what is

going on: "Dear Mr. Hall: I have spent countless hours trying to phone

ICBC. They have owed me the difference between insuring the new car I

bought versus the one I sold since last September." This is dated April

26. "Every time I've managed to get through they've had some useless

excuse why it hasn't been sent, and that it will be in the mail

tomorrow." Those expressions — "it's in the mail" and "I gave at the

office" — have to be the two most used and abused statements of untruth

I've ever heard in my life. If anybody says — I gave at the office" or

"it’s in the mail" to me, I am automatically suspicious of the person I

am talking to. There are other expressions which would occur to you and

I, Mr. Chairman. which may be used just as often, but we'll deal with

those in another debate.

Here's another letter: "My car was stolen and, a month later, recovered.

It then took three weeks of constant phoning and negotiating just to replace

the windshield, door locks, and repair a seat and the front burnper," etc,

This is the kind of frustration that goes on. I replied to this gentleman, Mr.

Harvey.

[ Page 7880 ]

"Thank you for your letter dated April 23, 1982, regarding

ICBC and the difficulties you have encountered in receiving your rebate. I can

offer little help at this end other than advise you to stick to it and make

them provide what should rightfully be yours. In addition, let me say that this

is not the corporation that we built, not the corporation that we designed.

We do not believe the corporation conforms to the practices and policies that

we think a government monopoly insurance company should subscribe to.

"Lastly, if you have not received any better news or treatment,

please advise me. This will mean that I should have your licence plate number

and your driving licence number in order to make enquiries for you."

That

is the kind of letter we are getting by the dozen, Mr. Chairman. You

yourself know that, as an MLA. That is just one that deals with the

image of the corporation. There are hundreds. We could go to the file

of any backbencher, government member or opposition member and get that

kind of letter. That kind of complaint, that kind of observation about

the unthinking bureaucracy — the unmoving, stilted kind of reaction you

get from that corporation — is now echoed by none other than the

ombudsman. Mr. Friedmann claims that ICBC is obstructing the

investigations of his office. That adds spice and flavouring to the

12-month picture that's taken place since we were last here discussing

this estimate with this minister.

What does this particular

article say?

"Ombudsman Dr. Karl Friedmann is prepared to take legal

action against ICBC officials, who, he charges, have been obstructing his investigations.

The ombudsman said: 'ICBC has, in typically bureaucratic fashion, set out

to try and contain or control the ombudsman. I know the public is most disturbed

about ICBC's practices and procedures, and I would fail the public and the

Legislature if I allowed ICBC to continue its efforts to keep the ombudsman

at bay.'"

What an incredible indictment against a Crown corporation and against this

minister who sits on the treasury bench, if that's the best he can do. The

ombudsman. An all-party committee and a first-class piece of legislation picks

a firs-tclass person who works on this. He produced a report saying that a

Crown corporation has refused to provide investigators with information when

contacted directly. Mr. Chairman, you'd be interested to know that he's

categorized this as a serious form of obstruction and added that he's not

prepared to tolerate this situation. I ask the minister what he'd like to

say about that, together with any general comments he may have about the general

image of the corporation.

While

we're looking at that, the president, Mr. Holmes, conjectures that the

Insurance Corporation of B.C. is considering wiping out a person's

right to use a lawyer and his right to sue when making a claim. These

changes would come if the ICBC moved to a no-fault system of handling

claims as in Quebec and moved to operating in much the same way as the

Workers' Compensation Board. Mr. Holmes says: "Leave the lawyers right

out of it." You cannot sue. You would just automatically get paid

according to the schedule: one thumb, so much; one finger, so much; one

eye, so much; one thumb, one leg, one eye, so much. One thumb, one leg,

one eye, one knee, so much, etc. That's the way they do it, Mr.

Minister, in case you didn't know. You wouldn't be allowed to hire a

lawyer in a property damage suit or other claim either. Any

disagreement between you and ICBC would be resolved through arbitration

or an ICBC appeal system.

I have a letter here from a lawyer

who points out: "Such a suggestion is totally contrary to our concept

of individual freedom, and the division of power is between the

government and the judiciary to have a person's right to seek legal

redress against tort teasers, and where necessary the Insurance

Corporation of British Columbia, through the courts rather than having

to submit to arbitrary powers on the part of the Insurance Corporation.

You know, political parties the length and breadth of this country have

fought to remove barriers for people to get to the courts. We've fought

for a long time, for instance, Mr. Chairman, to remove the practice of

the government having to issue a fiat for a person to sue the

government. I see no difference in the principle of individuals having

the right to sue the Crown corporations, especially in matters which

are more serious than some of the other matters which come up as

ordinary suits against the government.

This whole question

of how the public perceives this major corporation that affects every

single household in this province is of major importance. I don't

suppose there is a household in the province that does not have some

direct connection with the Insurance Corporation of British Columbia.

As I said to this minister a couple of years ago and as I've said to

his predecessors and to members of the cabinet when I sat over there,

there is no way that you can escape the political consequences of this

Crown corporation. You may as well face up to it. There's no way that

you can have a Crown corporation that enters into your house in some

way every year — with this corporation twice a year in a great number

of cases — and set the fees by cabinet order every November.... The

Premier can stand up if he likes and get into this debate. I'd enjoy

that. There is no way you can avoid the political consequences, so you

may as well make it work correctly, get into it and try to do some of

the things that Sherrell tried to do. They criticized some of the

things that Sherrell tried to do. One thing he did try to do was

improve the customer relations and customer service. All that is gone

you know where in a handbasket, since his departure.

In this

last 12 months we've seen the abandonment of the accident penalties and

the abandonment of the FAIR program. We've heard the minister saying

that he's in favour of crash premiums. For instance, in April of this

year he said that he's in favour of driver-accident premiums. He said

that because good drivers are recognized by the safe-driver discount,

it seems fair to penalize with driver-accident premiums.

That's

not what the FAIR program did. The FAIR program did not have

safe-driver discounts. It only had, in effect, a penalty for bad

drivers. You see how careless those kinds of statements are, how you

can confuse people. You can shake your head and say no, but the fact of

the matter is that you can't run up one side of the street and not

expect somebody on the other side of the street to say: "Wait a minute.

That's not what your program did." You can't settle a premium which is

the going rate for the car, apply a 20, 30 or 35 percent reduction to

it and call it a safe driver's discount, and on top of that have a

crash premium as well. I must ask the minister to be more specific in

some of his activities when he is talking about the corporation.

What

about the corporation's labour relations? We know the sad story of last

year's strike. The interesting thing is that on November 20, 1981, the

Insurance Corporation sent out a

[ Page 7881 ]

letter

to every employee, signed by Mr. Holmes. The fourth paragraph of this

letter said: "What I can do is to take the lead in establishing a

climate in our company where relations with the employees are based on

mutual trust, and where each employee feels a strong sense of

self-worth, is proud of the corporation, and is committed to doing a

good job in support of our corporate objectives." An estimable

objective — one with which I can certainly find no fault. He goes on to

say: "I do not have a magical formula for success. The more I look into

it, the more I have to find that most companies are searching for ways

to achieve a more motivated, energized, cooperative, trusting

workforce. Success does not come easy. The attached

article which

appeared in the September-October edition of the Harvard Business Review makes this point."

I read the Harvard Business Review ,

and it says that you should build up, in your own corporation, the best

team of labour-management experts you can get: people who will sit down

and negotiate a contract and live with the consequences of that

contract that they work out across a table. Did ICBC do that last year?

No, sir. They appointed a hired gun. As usual, they imported a hired

negotiator who does not have to live with the consequences of those

activities. They do not produce the kind of energetic, creative people

who were referred to in the

article in the Harvard Business Review .

That's sheer puffery that goes around from the president to the

employees. I wrote to the president on February 3 of this year because

the president wrote to me. Mr. Chairman, about the time of the

beginnings of the Crown corporations committee examination of this

corporation, I said some of the things that I've said to you today. Mr.

Holmes wrote back to me and said: "In light of your recent comments

concerning conditions at the Insurance Corporation, I would hope that

you could find a moment to read the current issue of our employees'

biweekly newspaper." And he goes on to extol the virtues of this

newspaper. So I read the newspaper, which I happen to get, as a matter

of fact — every publication. I wrote back to Mr. Holmes and said:

"Thank

you for your letter, which arrived while I was enjoying a short break

away from my duties. I am a regular reader of the company's broadsheet,

People , and I'm on the mailing

list of a number of other newsletters from union suppliers, the ARA and

others. Read together, and in conjunction with the hundreds of

complaints that our MLAs receive, you would, I am sure, come to hold

the same view as myself. The

article you referred to, by the way,

extols the virtues of the new bodily injury centre in Surrey, and yet

dismisses the major complaint on the possible cause of its eventual

failure in one small paragraph."

You will be interested to know, because this covers your area, Mr.

Chairman. I quote from this newsletter which is extolling the virtues

of the new Surrey bodily injury centre: "The only difficulty with the

new system is that claimants still call adjustments in the other

centre. In short, the staff like it — especially those who escape from

doing claims — but the public doesn't."

The fact is that nobody knows where to call in Surrey for which

service, whether the ordinary claim or the bodily injury claim. That

problem is dismissed just in one sentence in this whole article. The

very complaint that is mounting in Surrey, White Rock and North Delta

is dismissed in one paragraph. Even the one sentence and the one

paragraph refer to what some of the staff are concerned about.

Mr. Chairman, when we were last here a year ago discussing the corporation,

the minister said: "Everything is fine; the second member for Surrey doesn't

know what he's talking about. We've got a great group of people doing

marvellous work." He rejected all of the things we've warned him about,

all of the things I've said: yet the corporation, on January 23 of this

year, engaged the services of a polling company, Delphi Consultative Surveys

and Research Ltd., Winnipeg, Canada, who locally use Jacqueline Burns Marketing,

for a survey of public opinion. He said everything was fine, we didn't know

what we were talking about; yet I notice there are questions about all the complaints

we raised last year, all the areas of tribulation and concern. Done by a firm

from Winnipeg, east of here, it asked whether the average policy-holder gets

a generous settlement, a stingy settlement, or is just about right. It asked

what percentage the person would guess was paid unjustly to people who were

ripping off the company; it asked about the appeals procedure and whether or

not the people questioned had dealt with the claims people. In addition to that,

they asked the political questions. Let's start with these:

"We're

interested in people's opinions about auto insurance in B.C. and how

well or poorly people think ICBC is handling B.C.ers' auto insurance

needs these days. Purely as a practical matter, to what extent would

you say that government ownership of ICBC helps or harms the true

interests of ICBC, the true interests of the government of British

Columbia, the true financial interest of the average British Columbian,

the true interests of democracy in Canada? Compared with ICBC's premium

rates during the past three years, would you guess that ICBC's rates

for the average B.C. driver would increase faster, more slowly or about

the same during the next three to five years with a Social Credit

government, an NDP government. a Conservative government, a Liberal

government?"

It asks political questions, questions about

drugs, questions that I think are completely beyond the scope and

requirements of any business, any Crown corporation.

asked questions about that, as you know, Mr. Chairman, and we got some

fatuous answers from the minister. He said public money wasn't

involved. Nobody said it was. We said that premium money was involved.

Whose money is it, anyway? The Crown wanted to know to what extent

government ownership helps or harms the true interests of democracy in

Canada. What a fatuous question!

"Improper Suggestion" was the editorial in the Vancouver Sun ,

which said: "The ICBC has been asking some strange questions. In a

recent public survey, ICBC wanted to know if respondents thought

off-track betting and the sale of marijuana will become legal within

the next five years. Another question was whether B.C. was about to be

plunged into a severe 1930s-style depression." We know we've got one of

those, right? We've got a 1930s-style depression; we've got lotteries

to pay for government megaprojects. We must wait for the estimates of

the Attorney-General to ask about the third one, I suppose.

But

that's abuse by a Crown corporation of its income; there is no doubt

about that. I'd like the minister to explain that away and to tell us

the costs. Surely by now he knows how much that survey cost.

Mr. Chairman, much was made last year of the question of safety, and the minister said we spend a lot of money on

[ Page 7882 ]

safety.

I didn't know just how much, and I wasn't sure that they spent any

money at all on safety, directly affecting what I consider to be the

true safety program that should be going on in this province at the

time. I'm told it's $2 million, of which $400,000 probably goes to the

attack program. There are eight people on staff and it's probably

another $350,000 or $400,000 by the time they've got all the expenses

and the costs associated with that. They've produced a lot of material

that they advertise in the annual report on safety, but I'd like to ask

the minister to break down for us, in his answer in this committee,

exactly what is being paid out of that huge amount of money that the

minister referred to last year — I'm not sure that $2 million out of a

total of hundreds of millions is huge — for a realistic safety program.

the annual report, the safety study on page 4 has a lot of excellent

pictures showing young people in kindergarten and similar grades being

instructed about road safety. I'm not decrying any of that, but I'd

like to know more about that safety program. While I'm on that, can I

say that I don't know whether the Minister of Education (Hon. Mr.

Smith) has read the annual report, but I wonder if he would be as

disappointed as I am when I see the excerpts from the comments by the

children that intersperse this annual report. In every single comment —

pages 4 through to 8 inclusive — there is a gross spelling error that's

supposed to be cute. I wonder if the minister thinks it's serving the

cause of safety or education when the words safety, eternal, were,

much, pounds and so on are misspelled. I wonder if the minister can say

what he thinks of that. I have more for the minister later on.

HON. MR. HEWITT:

Mr. Chairman, I'll try to cover some of the questions that are raised.

I'm sure the member can appreciate that in questions where he has asked

for dollar figures, they will be coming to him as the detail is

obtained from the corporation. I can advise the member that rather than

bring a staff member or senior management member over from the

corporation, the staff in my office are in communication by telephone,

getting these figures as quickly as possible to enable me to respond to

the members opposite.

The second member for Surrey (Mr.

Hall) dealt with the drop in public confidence in 1981 and the period

of time following that into 1982. It's fair to say that we went through

a five-month management-labour dispute. Any corporation the size of

ICBC that gets involved in a work stoppage....

You can see

that with the volume of work they handle, once the wheels are put into

motion again it takes a considerable length of time to catch up with

the backlog and to be up to date. I'm pleased to say that we are now,

for all intents and purposes, up to date in the corporation. We had

some difficulties, as members would know, with regard to time payment

plans for premiums. We took into consideration some of the problems

caused by the backlog of work in ICBC and in some instances paid

interest on refunds that had not gone back to the motorists in a

reasonable length of time.

When the member says public

confidence is down, I can only say that after a strike such as we went

through it takes time to gear up that corporation. Maybe that's one of

the problems with the monopoly in the sense that when it does shut down

for any reason, it's 100 percent shut down,

whereas if you were

competing in the marketplace and you had a number of companies where

one may be on strike or lo