1990 Legislative Session: 4th Session, 34th 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)

FRIDAY, JUNE 8, 1990

Morning Sitting

[ Page

10177 ]

CONTENTS

Routine Proceedings

Ministerial Statement

National Access Awareness Week. Hon. Mr. Reynolds –– 10177

Mr. D'Arcy

Private Members' Statements

Preventive health care. Ms. Pullinger –– 10177

Hon. J. Jansen

Working with the Charter in the 1990s. Mr. Chalmers –– 10180

Mr. Sihota

The changing world. Mr. Bruce –– 10182

Ms. Pullinger

A strategy to improve health care in British Columbia. Mr. Perry –– 10184

Hon. J. Jansen

Electrical Safety Amendment Act, 1990 (Bill 10). Committee stage.

(Hon. L. Hanson) –– 10186

Mr. Blencoe

Third reading

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. Mr. Couvelier)

On vote 28: minister's office –– 10187

Mr. Clark

Mr. Barnes

Mr. Perry

Mr. Sihota

The House met at 10:03 a.m.

Prayers.

HON. J. JANSEN :

Mr. Speaker, I would ask this House, on your behalf, to welcome the

federal Minister for Veterans' Affairs, Hon. Gerry Merrithew. The

minister and I signed an agreement between the governments of Canada

and British Columbia to provide an additional 200 extended-care beds

for veterans in British Columbia. Would you please make him welcome.

HON. MR. VEITCH :

In the members' gallery today are the mother and father of my executive

assistant in Burnaby. I'd like to introduce to the House the Rev. Bob

Ratzliff and his wife Margaret from Saskatchewan. I'd ask the House to

bid them welcome.

MR. BRUCE : In the gallery today

are 24 grade 10 and 11 students from a school in Cowichan, Duncan

Christian Secondary School, which is a growing and expanding school.

With them is their teacher Mr. Douglas and several adults who have

brought them down here today to see how this Legislature works. Would

you please make them welcome.

Ministerial Statement

NATIONAL ACCESS AWARENESS WEEK

HON. MR. REYNOLDS :

Mr. Speaker, I and the second member for Vancouver–Little Mountain (Mr.

Mowat) would like to bring to all members' attention National Access

Awareness Week, which is from June 10 through June 16. A number of

events will be held across British Columbia and Canada to raise the

profile of persons with disabilities.

The concept of access

has two facets. First, buildings and public facilities must be made

physically accessible to persons with disabilities. Second, disabled

individuals must have access to all aspects of society and participate

as full citizens. This is why the Committee for National Access

Awareness Week has identified a five-star approach to integration. The

community areas of transportation, housing, employment, recreation and

education will be the focus for Canadian municipalities throughout the

week. Communities throughout British Columbia are finding ways to

promote and participate in Access Awareness Week.

Sunday, June 10, from 11 until 3, the Vancouver Parks Board will have a

display at Queen Elizabeth Park and Bloedel Conservatory, and B.C.

Transit will be there to demonstrate their new lift-equipment bus.

In Kamloops, at the Aberdeen Mall, there will be displays by organizations

for the disabled and a wheelchair basketball demonstration. There will be many

other projects right across the province.

Today

Dr. David Strangway and Rick Hansen are hosting a reception to unveil

plans for the UBC disability resource centre. The centre will find ways

to make the university's buildings and programs more accessible.

University faculties will be encouraged through the resource centre to

introduce courses that have a particular focus on or benefit for

persons with disabilities. For example, students in architecture might

study barrier-free design. Our government is supporting this

breakthrough.

These are just a few of the many events

taking place. Our government continues to support the disabled through

our programs and the Premier's Advisory Council for Persons with

Disabilities.

It was the courage of Rick Hansen and his

accomplishments through the Man In Motion tour which inspired the

Minister Mulroney signed the declaration which brought it into being in

June of last year. A new understanding of the great potential and

contribution of persons with disabilities is being adopted throughout

Canada. I invite and challenge all hon. members to seek out the events

scheduled in their home communities and participate in some way in the

National Access Awareness Week.

MR. D'ARCY : I

welcome this initiative on the part of the provincial and federal

governments. However, I have to let it be known that it sounds a whole

lot as though the minister and the provincial government are

encouraging access awareness and the addition of more disabled accesses

to be done by someone else.

There have been great strides

made in this province in the last few years in the provision for

disabled access, but virtually all of it has been done by municipal

government, by private property owners and by other areas of local

government. In other words, the taxpayers of B.C. have funded this

either as private property owners or in their capacity as municipal or

school district taxpayers. Certainly in my own area there have been

great strides made in this field by both the school districts and the

city and village governments.

While I very much appreciate

the effort at increased public awareness by the provincial and federal

governments, we on this side of the House would like to see a little

more substance in the provincial government's initiatives, and perhaps

that will be forthcoming. We would like to see the province be a

partner with local government and the school districts in a greater way

than they have been. But the initiative and the awareness of the

government is welcomed on this side of the House, and let's hope it

expands and continues.

Orders of the Day

Private Members' Statements

PREVENTIVE HEALTH CARE

MS. PULLINGER : I think we're all agreed in this Legislature — in fact, I suspect that there's a general

[ Page 10178 ]

consensus

out there at all levels of our society — that the focus of health care

ought to be wellness care. I think we all agree that preventive health

care, or wellness care, is the best way to ensure both the best quality

of life for the people of B.C. and the most effective and efficient use

of our health care dollars.

What I want to talk about today

is the whole area of preventive health care. I want to talk about the

kinds of services we should be providing and the way we should be

spending our health care dollars if we're going to promote wellness

rather than merely treating illness. I want to argue further that in

spite of all the rhetoric, the government seems to be unaware of the

fact that where we ought to be focusing and spending those dollars is

in wellness care.

Let me establish at the outset that,

contrary to popular belief and what we hear from the Minister of

Finance (Hon. Mr. Couvelier) and some of the members opposite, health

care costs in British Columbia are not out of control. The facts are

quite clear that health care spending in British Columbia is below the

Canadian average. In fact, it ranks fifth in the country among the

provinces.

Hospital costs in B.C. are also well below

average. We rank eighth for hospital costs, with only Saskatchewan and

Prince Edward Island spending less than we do. We have the lowest

number of staff hours per patient in western Canada. Health care costs

as a percentage of our budget are not rising; they're stable and in

fact have decreased slightly over the past few years. However, I think

it's fair to acknowledge that health care is the single largest budget

expenditure and must be closely- monitored. Health care dollars must be

spent wisely, and I think there is agreement on that.

Clearly

we all ought also to agree that the less expensive forms of care — care

that works to keep people out of hospitals — ought to be encouraged.

What I'm going to argue is that this is not the case with this

government, in spite of all the rhetoric and claims that we hear. We

are not giving preventive health care the kind of priority and emphasis

it ought to have in this province. The problem is that this

government's actions speak so loudly that they're drowning out its

words. Let me give you three examples from my own community to

exemplify that.

The first one I'd like to talk a little bit

about is the Nanaimo Regional General Hospital. It has had a

significant shortfall in its operating budget for a considerable length

of time now. Members of the board visited the ministry and declared

very clearly what the problems are. My colleagues and I have written to

the minister and we've told him about the impact of this continued

shortfall of funding. We have, sadly, seen no relief provided. It is

documented and is part of a brief presented that the Nanaimo Hospital

is spending its money wisely. In fact, for its population size and the

type of facility it is, it's outstanding in its efficiency and

effectiveness.

The board members and my colleague the first member for Nanaimo (Mr. Lovick)

and I have simply asked for equity with other hospitals. We are, by comparison,

underfunded by something like 17 percent. Sadly, we haven't seen any response.

The consequence of that is that last week the Nanaimo Hospital was forced to

cut over $600,000 in services.

What

that meant, among other things, was the elimination of the entire

mental health out-patient program. The counselling service and what is

known as day care psychiatry in the hospital are gone, eliminated.

Contact House, which is a lifeline for more than 30 people in the

community, people who have diseases such as schizophrenia or are

survivors of suicide, is also gone. We have insufficient resources now

in our community to deal with mental health care needs. We're left with

mostly a volunteer sector for mental health care.

What

we've seen here is a relatively inexpensive program eliminated. There's

no doubt that those who need those services are going to suffer. We

have a number of letters from those people pleading for the

re-establishment of those programs. The long-term costs, both human

costs and economic costs, will be significantly more.

[10:15]

If the government is serious about preventive health care, and I

hope it is, and if it's serious about keeping people out of expensive

institutions, we ought to ensure that these important services in

Nanalmo are restored immediately.

The second example I

would like to speak about is the ministry's approach to funding and

supporting community and public health services. First, it's clear that

we are facing a crisis in staffing in community health. If the nurses

in public health continue to see a decline in their wages and working

conditions relative to nurses in hospitals, we will soon not be able to

get nurses at all to work in these vital areas. These are people who

provide things like home nursing home diabetic care, palliative care,

long-term care at home, post-surgical care and all types of care that

keep people out of hospitals and in their homes. This is obviously more

effective spending of our health care dollars, as well as a more

comfortable way to deal with illness for these people.

see I'm running out of time, so I'd just like to read into the record

that there is an awful lot of room there, and the government was served

notice last year in the auditor-general's report, which in its

discussion of health care states: "Provincial spending on preventive

services makes up less than 2 percent of the ministry's budget. The

size of the budget belies the importance of public health, since many

of its programs prevent disease, thereby reducing demands on programs

such as hospitals that make up the majority of the health budget."

Mr.

Speaker, preventive health care and out-of-hospital, at-home,

in-the-community kinds of care are far cheaper and far more effective

in terms of health dollars and prevention of illness.

would just like to wrap up my comments by saying that I hope the

government and particularly the Minister of Health (Hon. J. Jansen)

begin to recognize this fact, because for the long-term it's an

Important one.

[ Page

10179 ]

MR. SPEAKER : Just before recognizing the Minister of Health,

I would ask members to refer to standing order 25 (a)(v). When the

Chair sees the private members' statements, which appear on the orders

of the day, we only have a title by which to guide us. Yet on occasion

the member today skated very close to being out of order. We have no

idea what the subject matter is.

Where the subject has been

previously canvassed in the House, it's not permissible to discuss it

in private members' statements. The subjects that we've discussed today

have been previously discussed in the House, but you occasionally

skated into areas that we hadn't previously discussed, so I allowed it

to proceed.

HON. J. JANSEN : I too was listening to

the comments from the hon. member opposite, and I too had some problem

focusing on what she was saying. She was wandering somewhat with her

topic. At one point she very much encouraged preventive health care and

then moved on to deal with specific problems of the Nanaimo Regional

General Hospital. I should point out to the member that funding for

that hospital has been substantially increased by 9 percent and

included two adjustments: a retroactive one-time adjustment of $0.5

million and another $929,000 demographic adjustment, which placed this

hospital very high on our list in terms of funding adjustments

also inform her that staff are meeting with ministry staff in terms of

looking at the budget. Such a meeting was held recently, on May 23, and

there will be other meetings to deal with what they perceive as their

budget shortfall.

Mr. Speaker, the topic that the member

wanted to speak about was wellness. Wellness is a program that instead

of placing people in an institution such as a hospital environment,

encourages people to stay out of hospitals. So the two areas of her

presentation to this House are somewhat at odds with each other.

Preventive

health care is an area that I as minister have placed a significant

priority on, given that unless we in the province — and indeed all

Canadians — come to grips with the rising cost of health. The rising

cost, as the member indicated, is very significant — about an 11.2

percent increase in our budget this year. Somehow the member is tying

it into the amount of money that is spent as a total percentage of the

provincial budget. I'm not quite sure why that type of logic or

reasoning is being used.

I feel it's very important that if

programs are cut, the health care budget is not cut proportionately. If

other programs are increased, I think that they should be done without

tying them into health care. Health care should stand alone as being

fundamental to our society. We're very pleased that our government

increased the budget dollars by the significant amount that was

permitted this year.

We have a number of initiatives in terms of preventive health care: Heart Health,

which reduces and controls the risk of heart disease; Smoking Cessation, for

reducing tobacco use and related lung cancer — a healthy community program. Perhaps

the member should take some time and update her knowledge about all these issues.

We have a very significant native health program underway; vision screening,

a family health initiative; speech and language; hearing; mental health; radiation

projects; dental health. Choosing Wellness is a major program. Recently we introduced

a publication called Your Better Health , which has received outstanding support

from a number of agencies that are saying that the government is focusing on

preventive health and encouraging wellness rather than placing its emphasis

on illness. Food Safe is a great program that encourages and gives an educational

program for food handlers to prevent food-borne illnesses. Water quality assurance,

on-site sewage disposal programs, the health hazard assessment program, community

care facility licensing.... You'll see a new act brought into this House very

soon. During the estimates debates we'll be talking at length about initiatives

in the community health part of our budget which focus on wellness.

would have hoped that the member opposite had spent more time talking

about this issue, because I would very much appreciate the opportunity

to explain in more detail what this government is doing to achieve its

objectives of wellness.

MS. PULLINGER : At the

beginning of the minister's response he suggested that perhaps I was

wandering in my comments. I would like to suggest that perhaps his mind

was wandering, because it was a very clear statement that we need

preventive health care. The government is not providing preventive

health care other than in a whole lot of rhetoric and pamphlets. What I

showed were two very concrete examples of a contact house — a community

care facility for mental health — and out-patient day care psychiatry

in the hospital that keeps people out of the hospital. These two

programs have been cut because of chronic underfunding.

on the one hand we hear all sorts of rhetoric about the importance of

wellness and preventive medicine and out-of-institution care; on the

other hand we see actions by this government that are eliminating that

kind of care in my community.

I would just like to mention

one other example of what I mean. My colleague the first member for

Nanaimo (Mr. Lovick) and I have led a campaign in this province to

include diabetic-testing equipment under Pharmacare. I see that we've

managed to take a first step towards that. The government has allowed

testing strips under Pharmacare, and I commend you for that. It's good;

it's a step in the right direction.

HON. J. JANSEN : The only province in Canada.

MS. PULLINGER :

Well, I'd dispute that. In any case, they're covered under Pharmacare.

But what we get is a new program and no money behind it, because....

Interjections.

[ Page 10180 ]

MR. SPEAKER : Order, please. The member for Rossland-Trail on a point of order.

MR. D'ARCY :

Mr. Speaker, is it possible that the Minister of Health could allow the

second member for Nanaimo to compliment his government without

interrupting her?

MR. SPEAKER : That's not a valid point of order, but an amusing one.

MS. PULLINGER : It's a rare occurrence, and not to be let happen; I must agree.

any case, in Nanaimo we have this new program of the government whereby

people can receive testing strips; however, they must be trained or

retrained, in spite of the fact that some of them have been using them

for 20 years. This has increased the load on our resources, and there's

no funding for that. There are no resources behind this program.

Diabetic day care used to have two requests for service per day; now it

has eight. In Nanaimo it's been chronically underfunded.

What

we're seeing is a three-month backlog. Other hospitals of comparable

size have three or four staff and are open five days per week. In

Nanaimo we are running one day a week, with one registered nurse and

one nutritionist. Ergo we have a three-month backlog, which is simply

not a commitment to preventive medicine, as we see diabetics who are

not able to monitor their glucose ending up with other illnesses and

often in the hospital.

WORKING WITH THE

CHARTER IN THE 1990s

MR. CHALMERS :

Mr. Speaker, the reason I gave my statement this title was because I

believe that we must work with the Charter of Rights and Freedoms to

incorporate a fundamental right that is currently missing from that

document.

I speak, of course, of the question of private

property rights; for make no mistake, it will take a lot of work to

have them enshrined in the Charter along with the other rights covered

under

section 7. It will take a lot of work to convince the members

opposite that constitutional protection should be given to the right to

own property.

We believe individuals should have this

protection; they believe that this right should be secured Moreover,

it's important to recognize that all of us as individuals are now

working within a relatively new constitutional framework that's very

different from the system this country was founded upon.

Some

time ago in this House our own Attorney-General (Hon. Mr. Smith)

pointed out that in the past, the Charter of Rights and Freedoms

fundamentally altered the legal framework that determines the nature

and scope of the protection relating to our fundamental rights.

Prior

to 1981 our rights were protected under the British parliamentary

system, where it is assumed that the individual has those rights that

parliament doesn't specifically take away or restrict. Property rights

were protected, as all rights were, by the force of common law and the

weight of history and culture.

The Charter changed that

system. In fact, it stood it on its head. Now we have a system where

all the rights are supposedly enumerated and written into the Charter.

That's why the members opposite were rightly concerned about Meech

Lake's distinct-society clause as it affects the quality of rights.

That's why they want native rights included in the Charter, because

they realize that in our Americanized approach to constitutional

rights, real protection of any right is only guaranteed if it is

specifically written into the constitution.

Even then, we

still have the notwithstanding clause to worry about. But

notwithstanding the notwithstanding clause, the NDP also know that

enshrining property rights into the Charter will make it much more

difficult for them to have control over people's property in the event

that, heaven forbid, they ever form another government in this country.

The

concept of private property is, I guess, foreign to the socialist

mind-set. I suspect that the democratic socialists aren't much more

favourably disposed to the idea. Indeed, we need only look as far as

their party constitution to see how they view private property rights.

They speak about a mixed economy today and their commitment to

respecting private property rights. But does anyone believe them when

they say, for example, that the settlement of native land claims will

not affect private property? Does anyone believe them when their own

constitution declares that, as democratic socialists, they are bound to

reject the motive of profit as a major determinant of the production

and distribution of goods and services? Is it any wonder they don't

want property rights in the Canadian constitution, when their own

constitution declares that their avowed goal as socialists is to modify

and control private enterprise through the extension of social

ownership?

[10:30]

[Mr. Lovick in the chair.]

The

former leader of the NDP, Mr. Bob Skelly, I guess you could say was

honest when he said that in this House the governments have

traditionally restricted the unfettered enjoyment of property rights

through zoning, land use, minimum wage and labour standard rights.

That's what governments tend to do: restrict people's rights.

Indeed,

the esteemed House Leader opposite was also right to note in a previous

debate on this very subject that whenever there is concern about

private property or private power, it's the power of the state that

worries people most. That's what worries me about what they stand for

and why we need to say yes to the protecting of our land, personal

property, pensions, intellectual property and seniority rights.

The

NDP said yes before putting property rights into the Charter. Remember,

you agreed back in September 1982, when Garde Gardom made a motion

[ Page

10181 ]

to include the right to the enjoyment of security

of property under

section 70 of the new Constitution Act. The first

member for Victoria (Mr. G. Hanson) voted for it, notwithstanding his

position today that that would somehow negatively impact on the native

land claims issue. The main member for Vancouver Centre — their

leader's current seatmate — voted for property rights at that time. The

NDP leader of the day and his successor said yes to putting property

rights in the Charter.

Even the member for North Island

(Mr. Gabelmann) voted in favour of this basic right that is so

intrinsic in our concept of freedom. Bear in mind that the last

individual that I mentioned is the same one who made all those wild

statements about denying people their right to even own property back

in the early 1970s. Free-enterprisers will never forget those gems from

the member for North Island. We can't forget that there are still

people in that party who continue to subscribe to the hard-line beliefs

the member expressed. I'll quote from that member: "Maybe we have to

say that land can no longer be owned privately. No one ever suggested

air should be owned privately. There's no real difference between land

and air, and we would think it absurd and insane if air were owned

privately. I think it's the same situation for land." That was the

member for North Island in September 1973.

That's the

point. We can forgive the member for those words perhaps, but we should

never forget that our rights are vulnerable to the beliefs of

ideologues under the system we have with the Charter, a system where

rights must be codified to prevent their abuse by well-meaning

politicians who believe that some sort of Utopia exists for all in a

place that is foreign to the very concept of private property.

This

explains why the right to property was included in the United Nations

Declaration of Human Rights. Why else would it have been put into the

Canadian Bill of Rights prior to the Charter? Moreover, why else do you

suppose Mr. Trudeau included this right in Bill C-60, the original

draft of the Charter back in 1978? Why else do you suppose that the

same right dates back to Mr. Thomas Paine's Rights of Man in the French and American Revolutions? I'm sure the member for Nanaimo....

Interjection.

MR. CHALMERS : Sure, that's right. I'm sure you could give us a lecture on pain, but it's not in the neck, Mr. Speaker. He's the one....

DEPUTY SPEAKER : Excuse me. I must inform the member that his time has now expired.

MR. SIHOTA : It's amazing to hear what the member opposite has had

to say. If he wants to engage in political rhetoric, that's one thing. If

he wants to engage in a decent, philosophical discussion about property rights,

it's another. I'm sorry to say that the purpose of that little diatribe

we've heard is just for some sort of mail-out that he wants to send to some

of his constituents. Hopefully, when he does that, he'll include the comments

that I'm making in the House now.

First

of all, let me say that when you are taking a look at property rights

and the incorporation of property rights into the constitution, you

have to be mindful of a number of things. The first thing that one

ought to be mindful of is that over the last 200 to 300 years in this

country, under a British Commonwealth system, there have been all sorts

of commonly protections provided for property. The argument that those

protections are there through our common law has persuaded people not

to put a provision in the Charter with respect to property rights.

addition to that, the member should be mindful of the fact that there

are all sorts of statutory interventions by this legislature and others

to ensure that private property ownership is not threatened. Let me

give the member some examples that came off the top of my head as I was

sitting here listening to him. We have the Personal Property Security

Act which was just introduced last week; copyright legislation, both

federal and provincial; the Land Title Act; the Mobile Home Act; the

mortgages act; the Flood Relief Act; the Expropriation Act — all

legislation that's designed to ensure that property is protected.

addition to that, the member should be mindful of the Charter of

Rights. He has quoted what doesn't exist in the Charter, but on the

other side of the coin, he hasn't talked about what exists in the

Charter, including a provision that talks about use and enjoyment of

property, the right to maintain a residence and the right to security

of the person. Surely many have argued that security of the person

protects many of the concerns that he has articulated.

Let

me go further. There are all sorts of other questions that arise if we

are to have a property rights provision in the Charter of Rights. The

member himself comes from a riding that has a huge agricultural belt.

The agricultural land reserve would never withstand a challenge under

the Charter under the provision that allowed for ownership of private

property. I want to ask the member this: what is the trade-off? He

wants to have that provision within the Charter. Is he prepared, on the

other side of the coin, to lose the agricultural land reserve?

MR. G. JANSSEN : Yes or no.

MR. SIHOTA : Yes, it's a simple yes or no question.

seems to me that the members opposite would love to see the

agricultural land reserve go. All of our zoning laws and provisions

that exist within our municipal acts will be subject to challenge under

that type of provision. In the United States, we've seen a number of

zoning provisions tossed out because of that kind of provision in their

Charter of Rights.

I don't think I'd like to see the ALR

go. I don't think I'd like to see our municipal legislation and zoning

system under attack as they would be if that provision was incorporated

under the charter.

Let me also say in conclusion that I think all of these reasons are compelling as to why one should be

[ Page 10182 ]

cautious

about the inclusion of these rights in the Charter. I suspect that is

the reason why neither the Premier of this province nor the

Attorney-General right now, in the middle of constitutional debate in

Ottawa, has even suggested the incorporation of property rights into

the Charter. Even they understand that there is more method in

attending to the problem in the fashion that we have as a society than

going the American route and bringing forward litigation that only

serves the interests of lawyers and does little to advance the

interests of property owners.

Consequently, in a funny sort

of way, I think that their leader and the Attorney-General are quite

correct in taking the posture that they are, and not demanding the

inclusion of this in the Charter of Rights as part and parcel of the

negotiations that are going on with Meech Lake right now.

say to the member that making those politic rhetoric comments and

trying to suggest that there is some kind of socialist bogeyman out

there Is not going to work. You want to deal with the basic

philosophical....

DEPUTY SPEAKER : Excuse me, Mr. Member. I must advise you that your time has expired.

MR. CHALMERS :

I'm going to be very brief now, but I guess the question that I was

asking in my statement today of the members opposite was.... Eight

years ago they thought it was a good idea. They voted for Garde

Gardom's resolution on this floor saying that it was okay. Today

they're suggesting that we shouldn't have that basic right to own

property. I guess people could let their imaginations run away a little

bit as to why they would now take that stand.

I think it's

time that the people of British Columbia had that answered by people

who hold themselves out to be the alternative to the free enterprise

system in British Columbia. They've got the leader; he's never here;

he's running around the province in a three-piece suit and that

briefcase in a rented car meeting with every chamber of commerce group

trying to say: "We're okay. We won't touch your property rights. Don't

worry about us." No, don't worry about you.

Yet today the

one who would be the Attorney-General will stand up and suggest that

they're not prepared to make the statement now that they don't want us

to have those basic rights in British Columbia. If you were for it in

1982, have the nerve to stand up there now and say that you're for it

in 1990.

THE CHANGING WORLD

MR. BRUCE :

Today is a historic day in the development of the world. For those of

you who perhaps are not aware, Czechoslovakia is going to elections

today for the first time in more than 40 years.

Most of you

know that I had the opportunity to visit Czechoslovakia a little while

ago, and indeed the spirit and the determination of the people there is

something for all of us to take to heart and to understand what they

are doing.

They have fought long and hard to free

themselves of the communist rule. They've fought long and hard for the

freedoms that we take for granted and enjoy here in this country.

One

of the things specifically they are looking at doing is moving to a

free-market system. This is happening not only in the eastern bloc

countries of Hungary, Czechoslovakia and Poland but in a number of

other countries that have had, over a period of time, socialist types

of government.

It's a changing world, and if I could quote for just a moment....

AN HON. MEMBER : It's an improving world.

MR. BRUCE : It is an improving world, my friend.

I would like to quote an

article out of the Financial Post ,

and I think this is fairly apropos to what Is happening around the

world. The quote is from Paul Roberts, and he says: "The collapsing

image of the Swedish welfare state coincides with the collapse of

communism in eastern Europe and massive economic failure in the USSR."

There

is no doubt about it; that is indeed what is happening. There are a few

other excerpts that I wouldn't mind reading to this House on Sweden,

because the opposition often uses Sweden as an example of what they

would do if they were government. God forbid!

I would like

to quote to you a few other things about what has happened with

Sweden's social democrats. That's a term that's spoken quite often by

the Leader of the Opposition as a social democrat. Their tax-and-spend

philosophy resulted in the government — this is the Swedish government

— absorbing 56 percent of the gross national product. They now admit

that has damaged their economy.

Swedes — and you can feel

for them, the people of Sweden — encounter a 72 percent tax rate at an

income of $35,000. High tax rates and the rapid expansion of government

have left Sweden mired in one of the lowest economic growth rates and

one of the highest inflation rates in the industrialized world.

HON. J. JANSEN : How's the GST?

MR. BRUCE : Excuse me, I'll come to that.

But what does the finance critic of the opposition say that they would do if they became government?

HON. J. JANSEN : What did they say?

MR. BRUCE : The first thing he said he would do would be to raise the tax rate.

But

let me come back to Sweden. The Finance minister declared recently in

Sweden: "We don't believe we can get this economy to function if we

increase the tax burden." That is from a social democrat minister of

finance in Sweden who is now saying: "We don't believe we can get this

economy to

[ Page

10183 ]

function if we increase the tax burden." It might be something we want to keep in the back of our heads.

The

final thing that comes out in all this — and I think that my colleagues

opposite would be interested — is that some of the architects of the

Swedish welfare state who have worked over the years to put this

together are going further today. They are saying that privatization

may ultimately be required to revive the economy. Isn't that

incredible? How the world does change.

A few other

snapshots of socialist-style governments around the world might be

worth reading into the record just to see how they've doing, and

especially on this eve today — it will be the eve there in

Czechoslovakia now as the people demonstrate themselves to move to a

free market economy.

[10:45]

France, a socialist government elected in 1980 tackled labour

legislation as its first priority — something that I think I've heard

our colleagues opposite say would be one of the first things they would

do. In its first 30 days of office it cut the length of the workweek,

it raised the minimum wage by 10 percent — I think I've heard that

quite often — and added a fifth week to the minimum paid vacation for

all workers. Do you know what the result was? It was absolutely

devastating for the French economy. Not only did productivity and

capital investment drop, but by 1983 the unemployment rate had grown

from 6.9 percent to 10.2 percent.

Interjection.

MR. BRUCE : That was a socialist government.

Let's

take a look at New Zealand. Since World War 11, National Party

governments in New Zealand have consistently kept unemployment under 2

percent. However, my friends, since the election of the Labour Party in

1983 and the implementation of blatantly pro-union labour

legislation.... Would you believe this? Listen to this. The

unemployment rate has risen steadily, and today it sits at an historic

high of 7.4 percent. It was 2 percent prior to the Labour government

being elected in New Zealand; since the Labour government took power,

it has risen to 7.4 percent. That's a socialist government.

Let's

take a look at Denmark. The social democratic government in Denmark

resigned in 1982, after its labour policies witnessed a rise in

unemployment — listen to this — from 1.3 percent in 1970 to 9.8

percent, and they were finally rooted out. Absolutely incredible!

HON. J. JANSEN : What kind of government was that?

MR. BRUCE : That was a Labour socialist government in New Zealand.

DEPUTY SPEAKER : I must advise the member that his time has expired.

MR. BRUCE : Oh, how unfortunate!

MS. PULLINGER :

I listened with fascination to the current member for Cowichan-Malahat.

What he has done is to show us an incredible ignorance of what

socialism actually is. It's a very broad concept. For him to ramble on

about all these countries and socialist governments, and to make

comparisons between communist governments and social democracy in

British Columbia, is absolutely ludicrous. I thought that the members

opposite had learned something after the Minister of Transportation and

Highways (Hon. Mrs. Johnston) did her famous tanks-and-guns diatribe in

the Oak Bay by-election and was laughed right out of the riding. I am

simply astounded that we're going at this silliness again. It's quite

amazing.

If we're going to compare left and right, let's

compare what these people are doing to what's happening in Argentina or

Peru, for instance. Maybe that's what we're doing here. Or we could

even look at Margaret Thatcher's fiasco in Britain, where they have

widespread, massive unemployment and widespread poverty. They've shut

down manufacturing in all of the country pretty well, other than a

little bit at the southern end. Margaret Thatcher has centralized power

in a terrible way, undermining the democratic process. We now have

riots on the streets of Britain. That's neo-conservatism; that's what

we have here in Social Credit.

I would simply say that the

member for Cowichan-Malahat may want to go back and learn a bit about

social democracy and the growth of the social democratic movement in

Canada and British Columbia, which has been very much a movement of the

people and has had its roots in the social gospel movement — that

should please the members opposite. It has grown out of a uniquely

Canadian movement that is representative of the interests of the vast

majority of people in this country. Again, I would like to suggest that

the member simply should go back and learn a bit about what social

democracy is in British Columbia and in Canada.

MR. BRUCE :

Well, indeed I've tried to learn as best I can. I think it would be

important for this House and for British Columbians throughout the

province to understand what socialism is. Probably the best way to do

that is to read into the record Webster's Dictionary's

definition of "socialism." I'd like you to listen to this, colleagues:

"socialism: any of various economic and political theories advocating

collective or governmental ownership and administration of the means of

production and distribution of goods; a system of society or group

living in which there is no private property; a system or condition of

society in which the means of production are owned and controlled by

the state. . . ."

It's really quite interesting. They stand

and say they are social democrats, as if there is a difference between

socialism and social democrats. Let me quote for you, just in case

you've forgotten what the Leader of the Opposition says he and his

party are. I think it's important that the people of British Columbia

clearly understand what they are, by any other name.

[ Page 10184 ]

quote the Leader of the Opposition: "When did I ever sound like a

socialist? I've never been a socialist. I've been a social democrat all

my life, and I'm proud of it. They're throwing socialism out of eastern

Europe and the Soviet Union because of its bureaucratic centralism and

collectivism." Isn't that interesting? That's what he says they are.

Well,

let me tell you what social democrats are. I think this is really

important for the people of B.C. to understand. Social democracy is a

political movement advocating a gradual and peaceful transition from

capitalism to socialism by democratic means. Who does that? Social

democrats do that. What does the Leader of the Opposition say he is? He

says he and his party are social democrats. So I say to you my friends:

it's not a question of tanks, guns and armour — I'm far from suggesting

that. What I'm trying to get on the record is just what the opposition

actually stands for and represents. They represent socialism. They may

try to use another name. They may try to move into the term "social

democrats, " because they think that has another ring to it. But the

fact is that whether they call themselves socialists, labour or social

democrats, one only needs to look around the world at the countries

that have experimented with either labour governments, socialism in its

true and pristine form or social democracy....

DEPUTY SPEAKER : I'm sorry, Mr. Member, I must advise you that your time has expired.

MR. BRUCE : How unfortunate.

A STRATEGY TO IMPROVE HEALTH

CARE IN BRITISH COLUMBIA

MR. PERRY :

Mr. Speaker, may I say how distinguished you look today. I asked my

colleague from Oak Bay–Gordon Head (Ms. Cull) to remind me of the

appropriate salutation from Little Red Riding Hood. She said it's: "My,

what big teeth you have today." But I say you look distinguished. With

all respect, Mr. Speaker.

I've set myself a daunting task

today to address a health strategy for British Columbia. In looking

over my notes, I decided I will attempt to take a relatively

philosophic view of this question. I asked myself in preparing: what

are the most serious long-term problems we face in preserving health

care and maintaining a high-quality system while controlling costs in

this province?

Obviously the most immediate concern must be

preventable illness, a topic touched on by my colleague the second

member for Nanaimo (Ms Pullinger). But I'd like to elaborate briefly on

some of the key challenges in illness prevention. Obviously the

greatest of these is smoking. Suffice it to say that our record in

British Columbia is far from enviable. In this province we continue to

see an increasing population of young women and teenage girls smoking.

Although I'm told that something in the range of 80 percent of British

Columbians — if I'm not mistaken — no longer smoke, we still have 20

percent addicted to tobacco who are progressively condemning themselves

to early illness and often premature and very unfortunate death. We

need to set goals in this direction. I spoke at length about those last

year in a statement, and I will not elaborate on them now. But I think

we can be doing much more.

With alcoholism, I am pleased to

say that the TRY program has been a good start, but I feel we need a

commitment to a much-longer-term and coordinated approach. For example,

the movement of alcohol and drug programs in a bureaucratic shuffle a

few years ago from their logical home in the Health ministry to Labour

has been of no apparent benefit. Recently we've seen the system

increasingly struggling to meet the needs of those British Columbians

who have come forward, partly through the success of the TRY program.

The

Ministry of Health is aware and acknowledges the difficulty in meeting

those needs, but I have to question where we're going in the long term,

when recently the Ministry of Labour failed to renew the contract of

its senior medical adviser on alcohol and drug programs, provoking the

resignation of the executive director of that program in protest. We

need a very clear, coordinated, long-term strategy that will see us

well into the next century in this area.

The problem of

drug abuse continues to worsen, as you know, Mr. Speaker, and although

I'm encouraged by the progress in educational efforts, we are still

facing a serious shortfall in treatment facilities for those people who

wish to cure themselves of their addiction.

This brings us

to the problem of AIDS, where we continue, in my view, to face

educational and treatment programs which fall short of what is

necessary and where we have a relatively modest attempt at planning for

community care and hospice needs of patients. There is great room for

improvement in dealing with long-term costs and alleviating the

long-term suffering of British Columbians.

Recently I was

apprised of the case of a young woman who requires home intravenous

treatment for an AIDS-related disease and who found it all but

impossible to set up treatment facilities which could not only improve

her quality of life but also save the taxpayer money.

This

takes us into native health issues which increasingly involve all four

issues that I've just referred to: smoking, alcoholism, drug abuse and

AIDS — a problem now beginning to strike into our native population. It

prompts the following question: how can we ever seriously deal with the

unique burden of these problems on native people in B.C. without

addressing the issue of poverty, land entitlement and the human dignity

of the native people in B.C.? This is an area where I see the admirable

goals of the Health ministry in direct conflict with the rest of

government policy in its refusal to acknowledge the legitimacy of

native land claims.

Let us turn to women's health issues. Here is an area where I find that the first chapters of a famous book, Second Opinion , by Dr. Michael Rachlis and Carol Kushner.... The first chapters are often cited

[ Page

10185 ]

by the government, but the subsequent chapters are never mentioned.

find, for example, in

chapter 10 of this book the following admonition:

"The Canadian Advisory Council on the Status of Women estimates that

one million women are beaten, at least to some extent, every year."

Further

in that

chapter they say: "The real answer to this society-wife problem

rests with the community approach. We need economic policies that

promote equality between the sexes. We need a society that values

mothers and children. We need a society that will not tolerate violence

in intimate relationships. In short, we need healthy public policies."

[11:00]

recent letter — that I will not have time to refer to at length today,

but perhaps I can later in our debates — from Dr. Romayne Gallagher, a

physician who has great ethical difficulty with abortion, makes the

same points in dealing with those measures that would be necessary to

support single women with children, if they were to choose to continue

their pregnancy and give birth to the child.

Let us

consider the issue of people with disabilities. Today is the first day

of the National Access Awareness Week, which reminds me of how people

with serious disabilities, particularly children in this province, are

often second-class citizens in terms of health services. Their mothers

and fathers often have to fight for the basic rights to surgical

treatment, to physiotherapy or to rehabilitation services that we would

take for granted as members of this assembly.

I see a need

for social commitment to the equal rights of disabled people as full

citizens in society and for a real social commitment, not only by

government but also by society, that such people are the equal of any

of the rest of us and entitled to those rights.

HON. J. JANSEN :

Mr. Speaker, it's indeed a pleasure to respond to the member. I had

hoped that I'd have some good, substantive comment on the other side of

the House that I could respond to.

Many of the issues that

the member is addressing in his member's statement today we addressed

some time ago, and they're all issues where we have resolutions being

developed or resolutions already in hand.

I'm surprised at

him criticizing our non-smoking initiatives. We in British Columbia

have one of the lowest rates of tobacco use in Canada. I have asked our

office of health promotion to put together a strategy with a goal of

less than 20 percent of the population being smokers. Also, Mr.

Speaker, just recently, as you are aware, we put in place a program to

have a smoke-free workplace in provincial buildings.

Alcoholism. I guess the member has been aware of the TRY program, an acknowledged

outstanding program, which is internationally recognized as a commitment for

this government to address the seriousness of alcoholism. As you're aware,

the problem of alcohol abuse spreads into the family home environment and causes

many, many more problems. In fact, it was estimated at one time that alcohol

abuse costs the economy approximately $5 billion a year.

have had much work done on alcoholism, as your member is also aware. I

was commissioned to review alcohol policies in British Columbia and to

identify that alcohol abuse programs are a very fundamental aspect of

dealing with alcohol abuse.

We're also taking a significant

leadership role on drug abuse. We have established a cabinet committee

chaired by the Premier to deal with the problem of drug abuse. We are

also taking a number of very strong actions in that regard. I have

personally dealt with people who are treating drug abuse. I've talked

to those who have problems with drug abuse. I've been on street walks.

I'm very much aware of the problem.

We recently became the

first in North America to have a new technology called TIP-DART, which

is being used to assist our young people in making informed choices.

AIDS

has been raised by the member. I was listening to his comments, and I

couldn't quite understand what he was saying, because there was a lot

of rambling going on in his comment today. The strategy we have put out

just recently for AIDS has received outstanding support. Dr. John

Blatherwick from the city of Vancouver praised it as a document that

puts us in the forefront of dealing with the AIDS problem in North

America. It's incredible to listen to some of these things. The member

isn't informing himself of some of these things that are happening.

Native

health. We are now on a strategy, working with our federal

counterparts. We have employed a consultant, Mr. Doug Wilson, who is a

native. He is working with my colleague the Minister of Native Affairs

(Hon. Mr. Weisgerber). We are showing leadership in dealing with native

health issues.

Women's health issues. We are working with

Shaughnessy Hospital to put in place a program that shows how much

vision this government has in terms of dealing with these issues. The

member talked about abuse. We will very soon be announcing an

interministerial program. It can't be just one ministry; it's a problem

that is across our entire society. In order for us to address it, I

believe it should be an interministerial initiative. We will be

bringing forward a very extensive program in the next few weeks that

deals with family violence, abuse and the whole spectrum of concern in

terms of family violence.

MR. PERRY : I'm glad that

the minister recognizes that there are some interrelationships between

social problems and health problems. Perhaps he would then agree on the

roots of the problem. At present only 14 of the 140 women in B.C.

thought to be infected with the human immunodeficiency virus are on AZT

treatment, the optimum medical therapy, which reflects the poverty and

the abused backgrounds from which most of those women have probably

come.

I want to briefly mention the problem of the mentally ill in this society. I feel we still do not

[ Page 10186 ]

regard them as full and valued members of society. Again, to quote Dr. Michael Rachlis' book:

"When

it comes to the third constituency, the mentally ill, we face a

problem. These people aren't as well organized as seniors and women's

groups are. They have little political clout. Yet this is a group whose

rights are systematically denied and whose urgent needs are frequently

ignored. Chronic mental illness is a devastating condition made worse

by an uncaring society."

We see that again in the problem

facing the triage centre in Vancouver on Main Street, a facility for

the most-desperate mentally ill street people that faces imminent

problems as its lease expires due to redevelopment.

I could

talk about elderly people and the demographic change, but I want to

come back to one problem affecting our sickness-care system and the

continuing and increasing difficulties we have in retaining the kind of

skilled people we need in the system. We've discussed this often, but

one thing which disturbs me is the gradual denegation of those helping

professions in our society. We seem to have become obsessed with

materialism and the uncritical worship of the entrepreneurial ethic.

Don't

misunderstand me. Entrepreneurial spirit is essential to a vital

economy, but in many ways it is antithetical to the underlying

philosophy of the health professions which is, and must remain,

selflessness. We were reminded of that recently by the eminent medical

ethicist, Dr. Pellegrino, when he visited Vancouver. While selflessness

is not a very popular concept these days, I think it's disturbing that

even in the health professions we've seen some erosion, however slight,

of the ethic that the patient always comes first. We need to arrest

that trend and reverse it.

I think we've seen one example

of how we can do that with the Registered Nurses' Association's recent

videotape. The RNABC has released a video explaining to the public the

exciting possibilities for personal self-fulfillment in self-sacrifice

and selflessness for a highly skilled and humane health professional,

the nurse. I think we need more of that ethic in our society, and I see

some role for government in strengthening, for a change, the morale of

the health care professions and the system, because health, after all,

is everyone's most precious asset.

DEPUTY SPEAKER :

Before proceeding to call on the government House Leader, the Minister

of Labour and Consumer Services has asked leave to make an

introduction. Shall leave be granted?

Leave granted.

HON. MR. JACOBSEN :

Today we have 60 students from Mission Central Elementary School. I

think half of them are in the gallery now, and the other half are going

to be in the gallery in a few minutes. They are here today with their

teacher, Mr. T. Watkinson, and some accompanying adults. On behalf of

the Deputy Speaker and myself, we'd like the House to give them a good

warm welcome. We'll be meeting with them a little later.

HON. MR. WEISGERBER : I call committee on Bill 10, Mr. Speaker.

ELECTRICAL SAFETY

AMENDMENT ACT, 1990

The House in committee on Bill 10; Mr. Pelton in the chair.

Sections 1 to 7 inclusive approved.

section 8.

MR. BLENCOE :

There's only one area. Since second reading I have had the opportunity

to talk to a number of people about this bill. It seems to be fairly

non-controversial, but I think it was referred to as "housekeeping." Of

course, when we hear the word "housekeeping" we tend to do a little

extra checking. We've heard this before. I don't know if we've heard it

from this minister.

This

section amends

section 18(3) and

says: "The council of a municipality shall ensure compliance with this

act...." I think I brought up these concerns of the UBCM executive in

second reading. They feel there may be some problems with this section.

It places a mandatory duty on the municipality to enforce, and a

liability perspective does arise. Of course any question of liability

perspective does create some concern, and UBCM, I understand, has

communicated its concern with this

section to the minister and staff. I

wonder if the minister has anything to report on that, and whether he

can alleviate the concerns on local government.

HON. L. HANSON :

Yes, the concerns have been communicated to me. I would point out to

the member opposite that there really is little change in the

responsibility or the liability that may be perceived from the old act.

The old act....

MR. BLENCOE : This

section has changed.

HON. L. HANSON :

I would have to disagree with the member. The wording in the old act,

under that section, said: "The council of a municipality, concurrently

with and in addition to the exercise by the inspectors of the powers

conferred on them by this act, shall see that this act and the

regulations are complied with within the limits of the municipality."

My legal advice is that that says the same as the wording in the new

act, except that it is clearer. But I might point out to the member

that the issue of liability is an issue that has been raised a number

of times as a result of some recent court decisions. It is a subject of

review within the ministry, but on a broader basis than within the

concept of this particular

section of the act.

[ Page

10187 ]

MR. BLENCOE : I refer to a statement by the UBCM executive. It

may have changed since this was made. The UBCM executive requested that

section 8 of Bill 10,

section 18 of the Electrical Safety Act, be

amended to reflect the wording currently being used in this

section and

to introduce wording that will make sections 18(3) and (4) apply only

to those municipalities and regional districts who offer electrical

Inspection. Am I misreading this whole thing?

[11:15]

HON. L. HANSON :

On the response from UBCM, I think the member is correct, although I do

question their

interpretation of that. The position of my ministry is

that the municipalities — and in this case the regional districts are

being added — do have a responsibility, even though they have not

adopted an electrical inspection bylaw, of reasonably ensuring that

there is an inspection done and that there is compliance with the act,

even though they may not be directly responsible for the actual

inspection. The act, as I'm sure the member knows, does confer that

responsibility also on regional districts, and that was missing in the

past. The

interpretation of the liability in the new wording and the

interpretation of the liability in the old wording are identical, on

the advice from our legal counsel.

Sections 8 and 9 approved.

Title approved.

HON. L. HANSON : Mr. Speaker, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 10, Electrical Safety Amendment Act, 1990, reported complete without amendment, read a third time and passed.

HON. MR. VEITCH : Committee of Supply, Mr Speaker.

The House in Committee of Supply; Mr. De Jong in the chair.

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

On vote 28: minister's office, $329,702 (continued)

MR. CLARK : I'd like to begin today with some discussion of taxes

and then perhaps we'll move on. In many ways the tax structure in our society

is a reflection of the values of the government. Taxes, and more appropriately,

who pays them and how much they are, are in some ways a question of public morality.

It's a philosophical question. It's a conscious decision made by government

which reflects their values. It's possible to determine the philosophy of

the government and the underlying value system of the Social Credit Party in

power by looking at the tax system in place in British Columbia today.

What

are those values? What have we seen under Social Credit? Under this

particular administration we've seen a shifting of the tax burden away

from corporations and the wealthy and onto the backs of working people,

the middle class and the poor. Let's look at the shifting burden. On

the personal tax side, in 1972 British Columbians paid 30.5 percent of

the basic federal tax. In 1989 and today, British Columbians pay 50.5

percent of the basic federal tax. While it's true that all provinces

have increased over time their share of the federal tax, five

jurisdictions in Canada have a lower personal tax rate than British

Columbia.

On the corporate side, the provincial share of

federal corporate income tax is almost exactly the same now as it was

in 1972, while federal corporate income taxes have been decreasing.

What has happened is that the federal corporate income tax rate has

been decreasing and the share of federal corporate income tax claimed

by the province is about exactly the same today as it was in 1972.

1975 taxes on personal Income comprised 21 percent of B.C.'s revenue

and corporations 10 percent. Today, personal income taxes comprise 25

percent of B.C.'s revenue and corporate income tax only 5 percent of

B.C. revenue. In Ontario, for example, this year corporations paid 10

percent of revenue in corporate income tax to the province of Ontario,

and the average in Canada is about 6 percent of provincial revenue. So

we are below the average in Canada in terms of the revenue generated by

the province from corporate income taxes.

Taxes are a

zero-sum game. If you cut taxes somewhere, then you have to raise them

somewhere else. In British Columbia, what the government has done very

consciously is cut corporate income tax and raise personal income tax.

They've cut the corporation capital tax, raised user fees.

fact, members might be interested to know that 693 fees have been

increased under this administration. In many cases, those fees have

been increased by over 100 percent, dramatic fee increases across the

board in British Columbia under this particular administration. We of

course have a $5 fee now on Pharmacare for senior citizens. We've a $5

fee in chiropractic services and physiotherapy services, again

predominantly for senior citizens. Medical services premiums have gone

up dramatically. In fact, they've more than doubled under this

administration.

At the same time, the government has cut

the wealth surtax which was a 10 percent tax put in place under the

Bennett administration, a very modest tax on the wealthy which under

the first budget of this administration was eliminated.

under Social Credit we've seen a $500 million annual tax flip, an

annual change in the burden. A $500 million tax cut to corporations,

$500 million in tax increases for the average citizens of British Co-

[ Page 10188 ]

lumbia;

that is a conscious decision by this administration that represents a

philosophical view, a moral judgment in many ways. It's a judgment that

income from capital should be taxed more favourably than income from

labour.

In my view, and in that of Linda McQuaig, Neil

Brooks and others, who discussed this as well at some length, the

provincial government, along particularly with the federal Conservative

government, by their tax changes are in many ways not rewarding the

work ethic. This is something which I think many British Columbians

would like to see. It's a value that I think most British Columbians

share. In fact, they're penalizing the work ethic. In other words,

people who work for a living have seen their taxes go up and up and up.

People who receive investment income get favoured treatment by our tax

system.

The tax system more and more passes a moral

judgment on people, in my view. The so-called "sin taxes" are the first

to be raised. It's bad to smoke, so let's tax smokers; it's bad to

drink, so let's tax drinkers. This administration has in place a 10

percent tax on draft beer. Gasoline is taxed because we want to

theoretically promote conservation. junk food is taxed. So those are

judgment calls by the administration.

I'm not arguing

necessarily against it. I'm making the case that the tax system

reflects a moral judgment by the government of the day. Gasoline, junk

food, cigarettes and liquor are taxed. At the same time, if you give

money to charity, you get a tax break; if you save for your retirement,

you get a tax break; if you insulate your home, you get a tax break; if

you convert to natural gas, you get a tax break.

So the tax

system is very puritanical in a way. What it does is clearly reflect

those kinds of moral decisions by government. All the time, those moral

decisions are made by government in a way which clearly identifies the

value system in place. I think objectively it is a fact that it

reflects those moral judgments, yet in such a system we see the

government constantly deciding to shift the burden.

The tax

system views working for a living the same way we view alcohol or

tobacco. All of the breaks now go to corporations, investors and even

speculators and inheritors. It reminds me of a quote by W.O. Twaits,

the former president of Imperial Oil, who argued fairly recently that

it was unfair to tax entrepreneurs at the same rate as "the drones in

society."

MR. CHAIRMAN : Order, please, hon. member.

I would like to ask you a question. Are you debating the administrative

actions of the ministry or the actions of the House in terms of

taxation?

MR. CLARK : I'm debating the Ministry of Finance estimates, Mr. Chairman.

Even

the language we use now reflects the morality of the tax system. I

would like to quote Thomas Walkom, who was a columnist in the Globe and Mail and is now a columnist for the Ottawa Citizen. He said:

"When

I was a kid in South Porcupine, a creative person was an artist, an

interior decorator or someone who worked for the CBC, and a risk-taker

was a person such as a hard-rock miner or a steeplejack who paid high

life insurance premiums. No more, The creative person is now the

capitalist, the risk-taker someone who risks money. When the government

says it is committed to rewarding risk-takers, it doesn't mean it will

give bonuses to hard-rock miners; it means it will give tax breaks to

anyone who has capital."

In British Columbia, of course,

you could substitute a faller — which has one of the highest death

rates of any profession — or a fireman for a hard-rock miner. When the

government says it's going to reward risk-takers, it doesn't mean

there's going to be a tax break for fallers. It means a tax break for

someone who has capital.

The government has a choice. It

chose to make moral decisions — those tax choices — in a way that in my

view penalized the middle class and the poor and helped corporations

and the wealthy. The cuts in corporate income tax are particularly

galling. Why cut corporate income tax? Why do we have one of the

lowest, if not the lowest, corporate income taxes in Canada? In many

respects it's the worst possible tax to cut, even for corporations,

because it's a profit-sensitive tax. Corporations are making record

profits. No company has moved to British Columbia because their

corporate income tax rate is 1 or 2 percent lower than the rest of

Canada.

The highest corporate income taxes in the world are

in West Germany and Japan, the two countries which arguably — not

arguably; factually — are the two most successful economies in the

world.

"We cut corporate income tax to create jobs, " the government says.

In a 1985 federal study conducted by the Mulroney government — hardly a progressive

administration — the Department of Employment and Immigration said that dollar

for dollar, a cut in personal income tax would create five times as many jobs

as cutting corporate income tax. Direct government spending creates six times

as many jobs as cuts in corporate income tax.

The

reason for that is rather obvious: not all of the money that

corporations receive from this government largesse through cuts in

taxes is passed on into the economy. Some of that is saved, some is

spent on trips around the world — not paid for in this case by Siemens

Electric.

Clearly the point that I am making is that the

government by its tax system reflects a moral judgment. This

administration has made those tax choices which penalize working

people, seniors and the poor, and hasn't made a decision to shift the

burden onto corporations and the rich. That is a trend that we see in

this administration and across Canada in other conservative

administrations, and it's one that I think is not representative of the

values that British Columbians or Canadians can hold.

think British Columbians believe that the work ethic should be

rewarded, and people who make their living off other people's sweat or

who speculate in real estate and those kinds of things should not be

[ Page

10189 ]

rewarded by the tax system. We have an unequal tax

system which benefits those who put the least amount into our system

and our economy. It penalizes those....

MR. CHAIRMAN : Hon. member, I would remind you that the taxation system is the result of legislation, not of administration.

[11:30]

MR. CLARK :

Tax policy is clearly within the scope of the Minister of Finance, Mr.

Chairman. In any event, I've concluded my remarks. For the record, I

wanted to discuss the policies of this administration in terms of taxes

and the fact that they have reflected a moral or philosophical position

of the government, which I think is not in concert with the values held

by British Columbians or Canadians. With that I would like to turn it

over to the second member for Vancouver Centre who wants to pursue the

question of the Financial Institutions Commission and its

interpretation.

HON. MR. COUVELIER : Before the hon. member for Vancouver Centre rises, I just wanted to respond to some selected comments by the member opposite.

First

of all, the issue of personal income tax rates across Canada is a

complicated one by virtue of many provinces having flat tax increases

and surtaxes on the personal income tax rate. The only credible way you

can compare tax rates across the country is to look at a category or

tax class and calculate the personal income tax paid. On that basis

there's only one province with a lower personal income tax rate than

B.C., and that's Alberta. The member said that there were four; the

fact is that there is only one — for a family in the $40,000 bracket.

Secondly,

the member talked about the corporation income tax rate and tried to

develop an argument that this government has been inattentive in taxing

corporations. Nothing could be further from the truth. The fact is that

over the period '86 to '91, the annual rate of growth of corporate

income tax has been 25.9 percent, as opposed to the annual growth of

the personal income tax rate of 13.2 percent. At least during this

administration, the facts clearly rebut the remarks made by the hon.

member.

In addition, those figures do not include resource

taxation. Over that same period, during this administration's term of

office, we have increased resource taxation on corporations in this

province by an annual rate of 10.5 percent. So the member is clearly

misstating the facts.

There is another angle here that I think I should put on the record, which

is the influence of corporate income tax rates on decisions of corporations

about how they report their income by province. One only has to look at the

Quebec corporate income tax rate, which works out to a general rate of 6 percent,

and that of most other provinces — in our case it's 14, while others run

up to 15 and 16 percent. One only has to compare those and wonder what effect

that low corporate income tax rate in Quebec has had on corporate decisions

to define which province they've earned their income in. We've looked

at that question often and wondered to ourselves whether, by such an artificial

device, you n-tight capture the reporting techniques of corporations.

During

that same period, it might be appropriate for me to mention now that

the contributions we've received from the federal government have

increased at an annual rate of only 1.7 percent during this term of

administration, which clearly shows that the federal government isn't

even keeping up with inflation. They are holding on to more of our

dollars every year than they're giving every year. And that's rising at

a steady pace in terms of their holdback.

The member

conveniently forgot to mention that this administration is the only one

in Canada that has cut the sales tax. We now have the lowest sales tax

rate in Canada. We did that in the first year of our administration. So

for the member to try to fabricate a fallacious argument that this

administration is somehow penalizing the personal taxpayer is

absolutely out of order. Not only did we cut the sales tax; we've cut

property taxes. Every year we have brought forward increases to

homeowner grants and looked at the assessment practices in a way that

reduces property taxes for individuals.

Mr. Chairman, I just wanted to get that rebuttal on the record in case the two or three people who read Hansard might be misled by the comments of the previous speaker.

MR. BARNES :

Mr. Chairman, I want to ask the minister if he would be good enough to

bring the assembly up to date on the situation of the Vancouver food

bank and the role being played there by the Financial Institutions

Commission, which launched an investigation into allegations against

the director Sylvia Russell at the end of last year or about six months

ago. I realize that this is a matter that I have no knowledge of as far

as the details are concerned, and I'm not asking the minister to judge

the value of the charges or whether they are correct or incorrect.

First

of all, this person was providing a very valuable service by helping

the food bank to acquire sufficient resources in order to fulfil a

critical need in the community. In other words, there are a lot of

people in this province who are hungry, and her role, primarily, was to

facilitate efforts by those who were trying to fill the gap due to the

voids in the social assistance program of the provincial government.

is with some urgency that the matter be resolved. We all know full well

that at this point in time the food bank has suffered tremendously due

to the lack of this person's involvement in the solicitation of

resources, not to mention the fact that she has personally suffered as

a result of no clear charge being laid. There have been quite a few

allegations in the newspapers and the media which are not being

substantiated — not being proven or disproved — but just left there for

public consumption. It's an extraordinary and flagrant example of lack

of due process and disregard for fundamental human rights and respect

for the individual.

[ Page 10190 ]

I'm

not suggesting there were ulterior motives behind her being in this

predicament, but some people have suggested that perhaps the actions

were politically motivated. My question then, Mr. Chairman, to the

minister is: would he please advise the House why, after six months,

this person remains in limbo and unsure of whether she's going to be

charged or exonerated. Could the minister indicate whether he feels

justice is being done and whether it is fair? How much longer is this

charade going to continue? When is the matter going to be resolved?

HON. MR. COUVELIER :

I appreciate the question. I, like you, have been much troubled by the

delay in these proceedings. It raises and illustrates a philosophical

problem here. I think the member would concede that It was the

individual herself who made public the fact that there was an

investigation. It was not Intended by the investigators to make that

issue public knowledge.

Investigations are conducted based

on allegations that are received during a business day at a fairly

large rate. To the best of our ability, we look into every one of those

allegations. We don't make them public. They are conducted with

attention to due process, confidentiality and to the prospect that

someone could be unfairly pilloried by someone with a personal vendetta.

Nevertheless,

it's part of the process, and it goes on every day. Our staff are

accustomed to dealing with these kinds of things. It was the person

herself who made public the fact that there was an investigation.

would be helpful for the member to know, in answer to his specific

question, that the investigation was extensive. It involved interviews,

I'm told, with over 50 persons. It involved the obtaining of numerous

search warrants. It involved a voluminous report, all in the interest

of ensuring accuracy and fair treatment.

The philosophical

question that I put to you, hon member, is the appropriateness of

political interference. I trust that you would agree with me that on

any issue involving a British Columbian citizen, it would be

inappropriate for government to interfere with the process which is

administered by the professional staff.

Like you, I have

been very concerned about the delay. It smacks of almost a deliberate

and wilful attempt to drag it out. I'm sensitive to your concerns But

it raises the philosophical question of what you would expect the

government to do about it. I have been very careful not to interfere

with the case. I can tell you that I have passed to staff numerous

times' over the last months, my concern about how long the process is

taking. I've had the response each time: "Mr. Minister, matters are in

hand. We are dealing with them professionally, and in our judgment,

they cannot and should not be rushed. We've got to be very sure that

every propriety is recognized and followed."

Hon. member, I

can only say to you that you raise a valid point. I have been concerned

about it, but I have deliberately not interfered to the point of giving

specific instructions to staff to rush it or to deal with it in

anything other than a thoroughly professional manner.

MR. BARNES :

Mr. Chairman, I very much appreciate the candour and the tone of the

minister's response. I certainly have no desire to extend this matter,

but I just want to ask a couple of brief questions for clarification.

It's my understanding that the FIC was under the minister's

responsibility, and that he did, with all respect to the political

interference possibilities, have a responsibility nonetheless to ensure

that they understand their responsibilities as an investigating

commission and will be guided by fairness and by traditions of due

process. Clearly this is a matter the public is very much aware of.

Hardly a day goes by when there isn't an editorial or some comment

about this unusual situation that the former food bank director finds

herself in, where she is basically, as you say, being pilloried on the

public stage. She is being hung out to dry, is clearly suffering a

personal loss of credibility and has been suggested as being

unemployable, at least for the immediate future. A very tragic

situation. I would think that she deserves at least an expeditious

result, something that she can relate to.

As things stand

now, it is a most unfortunate end for someone of clearly demonstrated

and dedicated commitment to public service. I've known her for many

years and feel very saddened by the predicament she finds herself in. I

would like to think that the minister would use the authority vested in

him to at least insist that this matter be addressed. Now this doesn't

mean interfere. But she deserves to know what the charges are as soon

as possible so that she can deal with them and defend herself one way

or the other. Six months seems to me to be an incredibly long time for

someone who was clearly doing a valuable service. As a result, this

delay seems to have been the death knell for the food bank. It may

recover, but it certainly has suffered as a result of this situation.

MR. PERRY :

I listened very carefully to my colleague, the second member for

Vancouver Centre (Mr. Barnes), and also to the minister's response. I

also appreciate the tenor of his response. Because the incident has

caused so much embarrassment and financial difficulty for the food

bank, I would simply like to put on the public record that the food

bank has been and remains a highly respected public institution in

Vancouver. As far as I am aware, the food bank has received nothing but

compliments from the general public, from the public media and from

those people in a position to know how important its services are. It's

also a matter of public record that the food bank has recently

experienced difficulty in meeting the needs of people who depend on it

to alleviate the difficulty of their poverty.

[Mr. Pelton in the chair.]

[ Page

10191 ]

I think it's also important that we record, as my colleague did a

few minutes ago, the distinguished contribution that Sylvia Russell

made in establishing the food bank and directing it for many years.

It's also a matter of public record — and it's appropriate to record it

— that she was widely lauded for those efforts and tremendously

respected in her community. Therefore I share my colleague's view that

it's extremely painful to see the current experience continue.

don't want to put the minister on the spot, but I wonder whether he'd

be willing, because of the importance of the food bank to the Vancouver

community, to reassure the public, on the record today, that he also

regards it as an important institution and one which is serving the

public interest faithfully.

[11:45]

HON. MR. COUVELIER :

Mr. Chairman, I've no reason to think otherwise, but I trust the member

would appreciate.... I haven't seen the report, and I'm not aware of

the substance of the allegations, other than what's been reported in

the press or released by the individual herself. So I'm not in a

position to endorse the operations of that entity.

MR. CLARK :

I think this is an important topic Anyone in public life certainly has

some sympathy for the plight of Ms. Russell. Regardless of the

substance of the allegations, the kind of public profile that

investigation has attained has not done anybody any good. It's

unfortunate that these things transpire.

I would like, Mr.

Chairman, to turn now to the Vancouver Stock Exchange — a favourite

subject of the Minister of Finance. I want to this year, not as I and

my colleague from Esquimalt–Port Renfrew have done in the past — which

is to expose new scandals in the Vancouver Stock Exchange.... Mr.

Chairman knows that that's rather easy to do, and we could with fairly

little work expose, Mr. Chairman....

HON. MR. WEISGERBER : Didn't you go for dinner with those guys the other night?

MR. CLARK : It's true, Mr. Member, we did. And I think it's true that we're more well informed now after that discussion.

Rather

than expose a new scandal on the Vancouver Stock Exchange — which, I

submit, is fairly easy to do, and we may do that later — I'd like to now

do something rather lengthy, and I don't apologize for that. I'd like

to talk about the Carter-Ward affair, which was the largest scandal in

the history of the Vancouver Stock Exchange and is still going on. We

know there have been lots of scandals on the Vancouver Stock Exchange,

but this is by far the largest.

I would like to spend some time dealing with the role of Mr. Peter Brown, who

continues to be an active player on the Vancouver Stock Exchange and who, I

think, has been thoroughly discredited by the events that have transpired and

by court cases. What I would like to do, with the indulgence of the House, Mr.

Chairman, is canvass the entire Carter-Ward affair — I don't think that's

been done anywhere — and particularly Mr. Brown's involvement, and expose

the inconsistencies, to be polite, in his remarks.

The

handling of the players in what's known as the Carter-Ward case shows

what has been wrong with the Vancouver Stock Exchange. David Ward and

Ed Carter are the two stock promoters who have been notorious for their

fraudulent VSE dealings with the United Services' Prospector Fund, one

of a group of mutual funds based in San Antonio, Texas. Carter and

Ward, with the help of the Vancouver investment community, sold shares

in over a dozen worthless VSE companies to the Prospector Fund after

bribing its manager. There is evidence that the pair continued their

manipulations with the assistance of Howe Street brokers and traders

long after the '84-85 period that resulted in the court cases against

them.

In fact, even with the new regime and the new

regulations that have taken place under this administration, there is

evidence — and I'll present evidence — that Mr. Brown and others

continued to trade in these fraudulent companies, even after the court

cases were filed. VSE brokerage houses continued to profit from the

Carter-Ward trading for years after the whistle was supposedly blown

and the scam was said to have ended. The funds stopped buying in May

1985, but Carter-Ward and their accomplices here in the brokerage

community continued without them.

Remember what has been

exposed so far by a civil action in 1988 and a criminal trial earlier

this year. Numerous VSE brokers and regulators — and regulators —

worked together to allow the systematic defrauding of the Texas mutual

fund of more than $22 million. What has the VSE done since the fact of

the Carter-Ward violations with respect to the Prospector Fund first

came to light in mid-1985? Firstly, they allowed the fact of the

violations to be covered up while stockbroker Peter Brown arranged with

the fund to buy back their VSE stocks without informing the public.

Then they allowed the Carter-Ward VSE stocks to continue trading, with

their tainted principals, until my colleague from Esquimalt raised this

in the House in 1988. They allowed the various individuals involved in

the scam to continue trading stocks and allowed the VSE brokers to

continue earning commissions off the pair years after their most

well-known crimes surfaced. Perhaps most significantly, apart from just

one firm, they have failed and continue to fail to act against any of

the brokerage houses or chief brokers who enabled the fraud to take

place on the VSE.

The superintendent of brokers office, the

Securities Commission and the VSE have dealt with only one of the

offending brokerage houses, fining Richardson Greenshields $250,000,

plus $10,000 investigative costs. Richardson is the one Prospector

Fund went after in its civil suit because it was the main house buying

shares for them on the VSE. Therefore that's who they had to go after

legally, after they lost money. There were numerous other VSE brokerage

houses that bought as well, and of these, local firms like Canarim — now

LOM Securities — and West Coast were also sellers to the fund.

[ Page 10192 ]

Finally,

after all the public disclosures in this House and in the media, after

all the bad publicity and widespread involvement of the Vancouver

brokerage community in the Carter-Ward affair, it appears the VSE

decided to do something. This past April, VSE regulators planned to

take on the now defunct firm of West Coast Securities and its then

senior floor trader Chris Wahlroth and former senior VP Jim Thomas,

who's now employed by Peter Brown at LOM.

We'll see, of

course, in the first Vancouver case that I raised last year — you'll

remember the Ferdinand Marcos involvement — that dubious members of the

VSE brokerage community have a way of sort of gravitating to Mr. Brown

and Canarim, now LOM. In the first Vancouver instance, two lead brokers

in the scandal, Tod Mabanta and George Delmas, are now both working for

Peter Brown. Neither of them had any sanctions taken by the VSE or by

the Securities Commission, in spite of the fact that they clearly

appear to have arranged funding from Ferdinand Marcos.

Nothing

has happened to the individual brokers in that case. In the Carter-Ward

instance, we'll see that when the VSE finally did get around to going

after their own members, they singled out the West Coast group rather

than other, more prominent individuals. After all, West Coast no longer

exists. That might make it easier for the VSE to say: "Well, these

problems were all done by firms in the past." The problem for the VSE

is that the West Coast principals, Wahlroth and Thomas, were being

called into hearings for having sought to use the VSE's own regulatory

delinquency to get themselves off the hook.

Two months

ago, in April 1990 — and this is interesting, Mr. Chairman — the date

was adjourned because the two individuals charged asked the Supreme

Court to quash the hearing for a number of reasons. The basic theme was

one that shows that the VSE today, despite improved rules and

penalties, is still failing to properly regulate the market.

West

Coast, in their petition to the court, point out: "Other than

Richardson, the VSE has not instituted disciplinary proceedings against

any other member or approved person in respect of the issues raised by

the civil and criminal proceedings and the investigations conducted by

the superintendent of brokers, the VSE and the RCMP." They go on to say

that they believe an examination of the case certainly makes this

belief appear reasonable — that the VSE and the superintendent of

brokers have singled them out as the only member and approved persons

to be penalized for all that went wrong in the Carter-Ward stocks.

other words, they finally got around to charging one company that's now

defunct, and their defence is: why are they picking on us; why are they

only charging us, when Peter Brown, Canarim and others were clearly

very active? They were at least as active as them and yet they only

singled out one firm. It is likely, Mr. Chairman, that that company will

get off on those charges, because clearly there is an attempt to single

out only one firm.

I would like to examine some of the

activities of Peter Brown, just to point out how the West Coast players

appear to be correct in suggesting that they have been singled out.

Instead we get arbitrary investigations and penalties that occur when

enough public pressure is put on the VSE and they have to act. Even

then, they still act in a very narrow and limited way.

We've

had Adnan Khashoggi, Ferdinand Marcos, Juan Carlos Schidlowski and now

David Eaton — which I might talk about later if we get a chance. We know

that there are unethical brokers in Vancouver, and as long as there

are, those kind of individuals will keep coming to the VSE.

Promoters

come and go in markets; it's the brokerage community itself that

determines the character of the marketplace. The Carter-Ward affair,

the role of Peter Brown in it and the inaction of the VSE regulators in

1989 as much as in 1985 show the system isn't working as well as it

should. While great strides have been made, clearly it's not working as

well it should.

I will revisit some of the events. Peter

Brown has publicly stated that his firm Canarim "ranks something like

fifteenth out of 17 brokerage houses who dealt in these stocks." In the

United Services Fund court documents it was revealed that there were

actually 21 brokerage houses operating 179 separate Carter-Ward and

Prospector Fund-related accounts. Of these numbers, Canarim. ranked

first, running 36 accounts. West Coast Securities was close behind with

35, Richardson placing third with 23 accounts, and on. Of the personal

accounts, Brown's Canarim led again with three.

It is

acknowledged that Richardson was the number one trader overall in the

Carter-Ward affair, and that involved the Prospector Fund deals. But

enough evidence has been presented in the court documents to indicate

that Canarim, in terms of volumes, was one of the other top traders and

that Canarim, and , Brown personally, sold shares in the scam companies

to the fund. Later in 1986 and beyond, after the fund and Greenshields

were exposed, the trading was done more by firms like Canarim because

Richardson had nothing to do with them after '85. So in fact, after it

was exposed and Richardson had nothing to do with them, Canarim in some

respects picked up the slack.

In addition to revealing

these trading accounts, Peat Marwick, in its two- and 17-volume reports

as reported in a 1988 civil trial, determined that there were other

people with trading accounts who had direct friendship or business

associations with David Ward, Ed Carter and Carter's son Colin, one of

the brokers involved in the manipulation. Among these 21 persons or

accounts that were closely related to the group — and listed, by the

way, by Peat Marwick, for easy reference, as closely related — are

Peter Brown and his wife Joanne's Conmere Estates. Two others who make

the royal distinction are brokers Roger Shallow of Continental and Bob

Randall of Canarim. So here we have the evidence of the civil trial

which clearly documents Mr. Brown's direct

[ Page

10193 ]

friendship and business relationship with David Ward and Ed Carter.

As well, during the civil trial, five primary brokers were named as

closely aiding the efforts of the promoters: the late Gus MacPhail,

Tammy Patrick — you might remember Tammy Patrick, Murray Pezim's

on-again, off-again wife — Jim Thomas, the VP of West Coast, along with

Canarim brokers Bob Randall and Cheryl More.

In Brown's own

words, he has claimed that in a scheme that began in February '84,

Canarim had no dealings to speak of at all until March '85. Mr. Brown

states: "The bulk of the phony deals were made in '84." The public

evidence, however, indicates the Carter-Ward deals accelerated in early

'85, as they wound up their promotions. Regardless, Canarim was

involved earlier as well as later in deals with the pair, in direct

contrast to his stated testimony.

[12:00]

The following partial list compiled from VSE and government files

provides a brief

summary of Brown's and Canarim's professional

involvement with Carter-Ward VSE stocks in the period prior to March

'85, when Brown claims he first got involved with the swindlers.

First,

Midnapore Resources. In the very first Ed Carter VSE deals, Midnapore

shares rose from 35 cents in '82 to $8 in mid-'83, with the addition of

Marshal Lundy, E. Carter and Ron Bieber, the former VSE listings

officer who acted as the lead scout for Carter-Ward to its board.

Canarim, in contrast to Mr. Brown's testimony, assisted the group's

initial entry into the VSE sweepstakes with a 100,000-share financing

of Midnapore in July '83 — exactly the opposite of what Mr. Brown

testified. The offerings were $8.90 a share. Within a year of Mr. Brown

selling at $8, the price went to 40 cents. It went from 35 cents in

1982 to $8 in 1983 to 40 cents at the end of 1983. This dramatic

price-change pattern was repeated, with variations, on all the

Carter-Ward stocks.

Score Resources. In May 1983, Canarim

financed this Carter-Ward deal by selling 300,000 units — shares plus

warrants — at $2.12. The next month, Score shares jumped to $5.

Carter-Ward sold for $2.12. The next month, the shares jumped to $5,

and then in April 1984 they were $6.25, before collapsing to 50 cents

in the next few months.

The next one is Flow Resources. On

March 7, 19841, Canarim...200,000 shares, and West Coast Securities,

100,000 shares — 300,000 shares of Flow distributed on a best-efforts

basis at 52 cents each. On June 28, 1984, Brown, Carter and Ward began

to purchase Flow in their three-way partnership account at Canarim

called Troika, which ironically means threesome.

MR. CHAIRMAN : Hon. member, your time has expired.

MR. SIHOTA : Mr. Speaker, this reminds me of days gone by. This is a

fascinating report from the second member for Vancouver East. I think all members

of the House would benefit if we heard more before we hear from the minister.

Interjection.

MR. CLARK :

I'll say it outside. This is all on the public record. Flow shares hit

$1.70 in the summer, and then by the end of 1984 had sunk to 11 cents.

Retlaw,

renamed Tarnavack Resources. Canarim was a sponsoring broker for its

original listing on May 17, 1984. Retlaw shares traded up to $3.60 in

1984 and then disintegrated in 1985 to 35 cents.

Preferred,

renamed Shallow Resources. Canarim, again through best-efforts

financing, underwrote 300,000 of the company's shares at $2.26.

Preferred went up in 1984 to $3.85 and then plummeted to 25 cents.

Nu-Start

Resources. On December 17, 1984, in a firm underwriting 650,000

shares, Canarim acted as the lead underwriter selling 300,000 shares

of the company at 45 cents. Nu-Start never quite managed to equal the

dramatic heights of Carter-Ward or other VSE listings. Still, in the

final two weeks of 1984 it went to 86 cents per share. In 1985 the

stock gradually slid back to 25 cents. Both Nu-Start and Shallow are

among the Carter-Ward stocks that continue to be traded for them by

Canarim and other brokerage houses, well after the news of the United

Services ripoff had become public knowledge.

Brown's firm

was still trading for Carter and Ward in 1988, despite the fact that

Brown has always tried to make out that he stopped dealing with them

once he knew of their violations. He says that he blew the whistle, but

he was still dealing in their stock in 1988.

Longboat

Resources. Canarim sponsored the company's original VSE listing on

January 11, 1985. After one million shares were distributed at 20

cents, Longboat stock ran as high as 80 cents before gravity returned

again and Carter-Ward, as all these deals do.... The 1985 resting-place

for Longboat was 16 cents.

All of this goes into

documenting the fact that Brown and his firm had a relationship with

Carter and Ward and were instrumental in helping the two fraudsters

establish themselves on the VSE and set up their bogus companies here.

In addition, Carter documents attest to the fact that Canarim was

managing Carter-Ward accounts and even selling directly to the

Prospector Fund well before March 1985. There appears to be some

question as to why the whistle was supposedly blown by Brown and his

clients. We get to the more relevant parts, now that we've laid the

case out.

According to the testimony of the former

superintendent of brokers, Rupert Bullock, Brown was called to a

meeting on April 23, 1985. 1 have the minutes of that meeting here. It

was St. George's Day. Bullock expressed his concerns in this matter.

This date being almost two years after Canarim financed the first

Carter-Ward deal, Brown made every effort to convince regulators that

the Carter-Ward stocks were not being manipulated and that their

unusual buying-and-price pattern was coming from Europe. Seemingly, VSE

and government officials were satisfied with Brown's explanation that

the unusual trading pattern was caused by unnamed buyers from Europe.

[ Page 10194 ]

Why

Brown was called in to handle the matter was also questionable. Why

would Rupert Bullock call in Peter Brown to discuss this unusual

pattern? It makes it clear that not only was he responsible for having

helped to establish Carter and Ward on Howe Street, but his defence of

the phony companies enabled them to continue selling. After he defended

them at this meeting in 1985 with Rupert Bullock, he continued to sell.

Brown provided the credibility for Carter and Ward's VSE manipulations.

The

story Brown wanted people to believe, once the scams became public, is

that he phoned the Texas funds chairman, Clark Aylsworth, in late May

of 1985. As soon as he found out about the violations, he stated that

he should be awarded the Order of Canada for blowing the whistle on the

scarn. We now know, through the court trials and other disclosures

since he made the statement he should get the Order of Canada, that it

was actually the fund that called Brown and not Brown who called the

fund — after the fund had learned from a dubious penny-stock hustler, I

might say, that Brown had information on trading irregularities. So at

the criminal trial last spring in Toronto, the funds manager testified

that prior to this call, the one that Brown says was whistle-blowing,

the fund had been blackmailed by two VSE promoters. Together with the

minutes of the Prospector Fund's meeting giving a more detailed picture

of the question of Brown's events, the reality is that his testimony at

the two trials, the civil trial and the criminal trial, means, in my

view, that Mr. Brown should be awarded an Oscar rather than an Order of

Canada.

Brown has publicly claimed to have known little or

nothing about the USF trades and investments. But when the scam

collapsed and he arranged what he called a "rescue operation, " thereby

earning rescue profits, he told the fund's managers that he kept a very

close eye on their portfolio. Brown, it's clear, was able to profit

from both sides of the manipulation. When the stocks rose he profited;

when they collapsed he profited. Brown met with Doug Garrod, former VSE

VP of listings and a key regulator in the exchange during this period,

and Mr. Bullock to inform them of the problem.

colleagues want me to ask questions, and I could do that, but I wanted

to lay out the key elements for the record, because it hasn't been

done. I will interrupt my flow of remarks to put a question to the

minister, Mr. Chairman. A few months ago Peter Brown testified what was

clearly at variance with the facts. Can the minister explain why Mr

Brown has had no sanctions by the regulators in this matter whatsoever?

He has not been rebuked; he has not been discussed; to this date he has

not been charged by anybody with respect to the superintendent of

brokers or the Securities Commission.

HON. MR. COUVELIER :

I'd like to ask the hon member whether he agrees that the regulations

have been significantly enhanced and improved and that conditions in

terms of the operation of the exchange have dramatically improved since

the events of 1984 to which he alludes.

MR. SIHOTA :

It's funny; the minister woke up there and asked a question, and didn't

deal with the question that the member... It's 12:10 p.m., so you've

got about 50 minutes yet, and then you can go home and go to sleep.

Mr.

Brown has repeatedly said on this matter that he blew the whistle, and

that's his position. There have been subsequent events which my

colleague from Vancouver East has outlined in some detail. Given the

fact that this has been the largest scam on the VSE, I'm sure the

minister must have taken more than simply a passing interest in the

matter and must obviously be well informed as to the Carter-Ward case.

Was there a deal, Mr. Minister, with Mr. Brown along the lines that if

he blew the whistle on this, no matter what came out later, there would

be no proceedings taken against him?

HON. MR. COUVELIER : I'm not certain I understand the question. What is meant by: "Was there a deal?" Between whom, Mr. Chairman?

MR. SIHOTA :

Were there any assurances given by security regulators to Mr. Brown

that no actions would be taken against him in light of his initial

reporting of this matter?

HON. MR. COUVELIER : This has been a great exercise in consuming the

clock. We could have just saved time by referring to Hansard over the last year

or the year before that; the members haven't said anything new or different.

I find offensive, frankly, the question put by the last member. It's typical

of him, of course, so I suppose we all should be inured to it.

Nevertheless,

I have no specific knowledge of discussions between the investigators

and those being investigated. They are independent bodies. The

Vancouver Stock Exchange is an independent body, as is the Securities

Commission. I find repulsive the suggestion that such an event could

have occurred. But if that's the member's wish, to stay down in the

gutter, then I suggest he might put that question in writing to the

Securities Commission. I've no knowledge of any such event, and I can

tell the member that I would be offended personally to find out that

such an event might have occurred. But I've no reason to think it did.

To suggest that it might have, it seems to me, might get a headline for

the hon. member over the weekend, but it doesn't do the integrity or

reputation of the stock exchange or the Securities Commission any good

and, as a matter of fact, might well do a great disservice.

think the member might remember, Mr. Chairman, how a couple of

publications published in the United States.... Every once in a while

they look for sensational issues that they can reproduce in their

monthly editions. The kinds of comments I just heard could — and would — be used by those slanderous

[ Page

10195 ]

publications to the detriment of the B.C. and Vancouver financial communities.

[12:15]

I'm disappointed once again in the socialists opposite, who seem

eager and keen to grab every short-term political advantage they can,

absolutely ignoring the damage they do not only to individuals but to

institutions that are key parts of B.C. It strikes me that we are

elected to represent the people and different points of view; that's

fair. It's appropriate that the government should be criticized by the

opposition from time to time on policies they find difficulty with, but

I can't stretch my mind to encompass a responsibility which would

incorporate destroying reputations. It seems to me that you, hon.

member, and your colleague — the other chap who comes from the forestry

capital of B.C., Vancouver East — consistently ignore the normal

proprieties that we would like to think are associated with being

elected to represent people and to discuss heavy issues.

The

events you have described occurred in 1984-85. They obviously had an

impact in terms of what this administration did to deal with the

problems when it took office in the fall of 1986. We brought in a

Securities Commission act. We were able to have the Vancouver Stock

Exchange revisit some of their practices. We have added considerable

resources to the Securities Commission. We're fortunate to have some

very bright, dedicated people applying their intelligence to the issue

of monitoring and protecting the public's interest in the operation of

the stock exchange and in the monitoring of the performance of the

individuals who are active in it. There can be no question of the

dramatic progress made since the fall of 1986 in this respect.

had a visit from the senior officials of the Investment Dealers'

Association of Canada. All of them were from central Canada and

certainly had no apparent interest in handing tributes out to British

Columbians, locked as central Canada is in a battle with Vancouver and

Montreal for financial activity. They had no reason or motive

whatsoever to tell me that in their opinion the British Columbia

Securities Commission is leading the country in terms of their

integrity, their thoroughness of application, and their creativeness

and ingenuity in bringing forward amendments to make sure that every

conceivable loophole is captured and headed off.

We all

know that you're not going to legislate crime out of existence; all you

can do is legislate penalties for violations. Unfortunately it will

never be a perfect world in the sense that crime will disappear.

Therefore the best we can expect our staff members to do is to make

very sure that we catch as many violations as we can — and that when

they're caught, they're prosecuted.

I find it ironic that here's an institution that's only two and a half

to three years old, and already it is perceived by those involved in the financial

community as being the best in the country. This is an institution which took

an ex-Premier of the province through the process in order to determine if there

was any violation. I can't imagine any government-created institution that

would have exhibited that degree of integrity and maturity in this short space

of time. To suggest, therefore, that there's more work to be done or that

there are serious defects to be addressed in this respect does a great disservice

not only to the staff members who are applying themselves to the problem but

to all of us who want to make Vancouver a significant player in the international

financial community.

think we've made dramatic progress; we're going to continue to make

more progress. The staff will continue to apply themselves diligently

to the tasks we've given them, and I'm very proud of what they've

accomplished in this short period of time. It would be nice once in a

while to have the members opposite also concede the tremendous progress

that has been made by individuals who work their hearts out developing

policies and assisting to develop policies and monitor performance, and

who every year are subjected to humiliation and unfair criticism from

the members opposite, who could have no other purpose than grabbing a

headline. After all, we're talking about events in 1984, before this

administration took office and before the commission was created. One

has to wonder what possible purpose you could have in this exercise.

You canvassed it thoroughly in 1986; you canvassed it thoroughly in

1987, 1988 and 1989. Now it is 1990, and you want to canvass it again.

What are your motives?

MR. CHAIRMAN : The Minister of Health seeks leave to make an introduction. Shall leave be granted?

Leave granted.

HON. J. JANSEN :

Mr. Chairman, I would ask this House to make welcome 28 grade 5

students from Sardis Elementary School, who are accompanied by their

teacher. Would you please make them welcome.

MR. SIHOTA :

Mr. Minister, you've commented on the fact that there have been some

changes in the past few years. I know that you found it "repulsive"

when we raised Joytec in this House, but we were right on Joytec. You

found it repulsive when we raised International Tillex in the House,

and we were right. You found it repulsive when we raised Technigen in

the House, and we were right. You found it repulsive when we referred

to Starfire Resources in the House, and we were right. I'll tell you

something. None of the changes that you speak of would have happened

had it not been for the efforts of people on this side of the House in

going after you and your ministry to clean up the Vancouver Stock

Exchange.

There are still problems. One of them relates to

the Carter-Ward trial. If you want to know why we're still raising it

in 1990, all of the facts that we referred to in the House today have

come out over the last couple of weeks. Surely the minister must be

concerned about some of the revelations that have occurred.

[ Page 10196 ]

take it the minister says that he has not inquired to determine whether

or not what I suggest is true. That's fine. Let me rephrase the

question and perhaps put it in a more direct way. Could you explain,

Mr. Minister, why the Securities Commission took action against West

Coast but failed to take action against Canarim?

HON. MR. COUVELIER :

The hon. member wasn't listening, I guess. I pointed out that these are

independent institutions, thankfully outside the realm of political

interference. And they should be. God help us if you turkeys ever got

into office, where you could start to interfere to the extent that

you're suggesting we should — God help the country. The arrogance that is

exhibited with the attitude that politicians should continue to

involve....

HON. MR. VEITCH : There are no red turkeys, you know that.

HON. MR. COUVELIER : We'll have to develop a new species of turkey, a red one.

The

member makes the same mistake they've made consistently when they like

to beat this subject as an annual event. They make the assumption that

because there has been no definitive comment by those independent

institutions, nothing is in progress or nothing will follow.

would suggest that a more fair way of looking at it — mind you, I know

they don't want to be fair — would be to complain when there has been an

announcement that an issue was dead. In the absence of that kind of

announcement, I think they make a false assumption when they leap

across this chasm of doubt to say that the institution is not

performing its role properly.

One of the problems we've got

in B.C. and in other jurisdictions is the difficulty of getting things

into courts. That seems to be a function of lawyers, primarily. I note

the last questioner is a member of that profession, so he might have a

unique appreciation of the difficulty there is in getting matters dealt

with quickly through the court system. However, I'm sure he would

quickly leap to his feet to defend the rights of all of those who might

be involved with it for the protection of due process and careful

examination of all their options and facts. But for the narrow

political purposes he's using today, I suspect he might take the

reverse argument. Once again, that shouldn't surprise us. They seem to

flip-flop on either side of a philosophical issue, depending on how

they feel at the moment and how likely they are to get a news story out

of the accusation.

In any event, back to where I was. They

are an independent body. If the member has any question to put to them,

I suggest he put it to them.

MR. CLARK : Mr. Chairman, for the minister, we raised these questions

this year because of the evidence that has come out of a criminal trial a couple

of months ago and a civil trial a few months prior to that, and that evidence

clearly contradicted the statements made by Mr. Brown. The evidence clearly

shows that Mr. Brown's comments are at variance with the facts.

could spend a lot more time, but I want to just talk about a couple of

other things that came out of the trial, which brings us to this point.

There is a pattern of large share purchases made personally by Brown

immediately prior to public disclosure of material changes.

What

happened is that Peter Brown purchased shares, and then at a subsequent

time a public disclosure was made of material changes, which increased

the value of the stock, and then Mr. Brown sold the stock. A month ago

I requested the daily trading information with respect to several

companies to prove that point, and that point has come out of public

documents and also the documents of the VSE that I requested.

won't go into all of them, but I'll just give you an example. In

Endatcom Ventures — renamed Borkin Industries — trading records show

that Brown purchased a total of 68,850 shares for between 35 cents and

85 cents for his RRSP account on March 18 and 19, 1985. On March 18

Endatcom announced to the public that there was no material change in

the company's affairs. So he buys stock, and there's an announcement of

no material change in the company's shares that would account for the

recent surge in trading activity in its shares.

It wasn't

until three days later, March 21, 1985, that trading on the VSE was

halted, and Carter-Ward associate Ron Bieber was appointed to the

board. That was disclosed three days later. By the time of this public

announcement, Endatcom shares had risen to $2 each. So they were

purchased by Brown personally for his RRSP account for between 35 cents

and 85 cents. Three days later an announcement was made which impacted

on the share price to $2. It's either a remarkable coincidence, Mr.

Chairman, that he would make this lucrative profit on this one share,

or else he had inside information. I suspect that it was a violation of

the Securities Act; in fact, I know It was. There are three other

stocks that I could mention where Mr. Brown purchased shares, and

material fact which impacted on the price was publicly disclosed after

he'd purchased the shares, at which time he sold for a profit in

Carter-Ward shares. These are personal accounts by Peter Brown.

[12:30]

I think the reality is that this brings a question about the

Securities Act. This evidence was alluded to in court trials a couple

of months ago. I researched these directly on these four companies. He

admitted having knowledge of the facts prior to his purchase. He

admitted on the stand to certain things. I think this brings a question

about the Statute of Limitations and a range of questions about the

Securities Act.

The question is: is Peter Brown's role

being investigated in this affair in light of the revelations that have

come out of the trial just a couple of months ago and the fact that his

position at the trial was completely different from the facts? Is

there, in the Securities Act, the wherewithal to prosecute an indi-

[ Page

10197 ]

vidual five years later? Evidence has come out at a trial five years

later which clearly shows him to be in violation of the Securities Act.

Is he being investigated for that violation now? Is it possible to

pursue charges against Peter Brown now, in light of the fact that the

Securities Act clearly prohibits it? In other words, Peter Brown was

not caught at the time. He is one of the major players in this

Carter-Ward scandal. He has taken positions in court which are now

proven to be untrue. Is it the intent of the superintendent of brokers

and the Securities Commission to pursue an investigation in light of

the new evidence which came out at these trials?

HON. MR. COUVELIER :

In the opinion of the hon. member for Esquimalt-Port Renfrew (Mr.

Sihota), you probably have in your caucus an expert lawyer who could

give you the legal opinion you seek, Mr. Member.

MR. CLARK :

Do you not think that Mr. Brown should be investigated if has taken

positions in the trial which show him to have been in contravention of

the Securities Act four years previously?

HON. MR. COUVELIER :

The member knows full well that I can't and should not make comment

about specifics that are being potentially looked at by entities that

report to the House through me. That would be inappropriate.

However,

the member seems interested in the legalities of the matter. I merely

point him to one of his own caucus members who, at least in his

opinio