1989 Legislative Session: 3rd 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)

THURSDAY, MAY 18, 1989

Afternoon Sitting

[ Page

6881 ]

CONTENTS

Routine Proceedings

Oral Questions

Vancouver Stock Exchange. Mr. Harcourt –– 6881

Race relations. Mr. Clark –– 6882

Accreditation of private colleges. Mr. Jones –– 6882

Ministerial Statement

Lead solder in water systems. Hon. Mrs. Johnston –– 6883

Mr. Cashore

Property Purchase Tax Amendment Act, 1989 (Bill 10). Second reading

Mr. Blencoe –– 6884

Mr. Cashore –– 6884

Mr. Miller –– 6885

Mr. Sihota –– 6887

Hon. Mr. Couvelier –– 6888

Committee of Supply: Ministry of Labour and Consumer Services estimates.

(Hon. L. Hanson)

On vote 41: minister's office –– 6891

Hon. L. Hanson

Mr. Sihota

Mr. Clark

Mrs. Boone

Ms. Marzari

Mr. Rose

The House met at 2:08 p.m.

HON. MR. WEISGERBER :

It's my pleasure today to introduce four visitors to the House. With us

today in the members' gallery are Paul Perko and his wife Maria, along

with Cveta Mogus and Barbara Novak. The Perkos are from Ambrus,

Yugoslavia, which is the capital of Slovenia. Cveta and Barb are from

Prince George. Would you please join with me in making them welcome.

HON. MR. DIRKS :

In the House this afternoon, visiting from the good constituency of

Nelson Creston, are two of my constituents. Would the House please make

Lily Edgren and George Veale welcome.

MR. PELTON :

Hon. members, in the members' gallery this afternoon with my wife

Louise are two longstanding friends of our family, Anna and Bob Paul.

Would you please make them welcome.

MR. ROSE : I'm

informed that there are a number of grade 10 students, 28 in number,

from Moody Junior Secondary School in Port Moody, and they're here with

Mr. D. Meronuk. I would like to welcome them because they're here

studying government, and I hope they're not disappointed. Would you

please welcome them.

Oral Questions

VANCOUVER STOCK EXCHANGE

MR. HARCOURT :

Mr. Speaker, I have a question for the Finance minister. The minister

is by now surely aware of the damaging concern caused by his

unfortunate reference to unnamed scumbags that he says are operating on

the Vancouver Stock Exchange. He has added fuel to the fire and sent a

very damaging message to the world. Is the minister now prepared to

name names and clearly define who he means when he says "scumbags," and

then apologize to the thousands of legitimate people associated with

the Vancouver Stock Exchange?

HON. MR. COUVELIER : That's really priceless, Mr. Speaker. Here we

have been listening to the members of the opposition — in the absence of the

Leader of the Opposition, I admit; he wasn't here; maybe he was unaware....

For the last three or four days his colleagues have been lambasting people who

operate on the VSE for past practices. If the hon. member wishes to read Hansard

he would be able to see specifically the allegations, many of them spurious;

many of them misinformed; and many of them deliberately manipulative in terms

of public opinion. If the issue is what damage is being done to the VSE, the

record is quite clear: the damage to the VSE is being done by members of the

loyal opposition.

am just now getting the chance to read the press stories — I haven't

had time this morning. I do understand that some commentators are

making a point about my remarks dealing with certain operators on the

VSE, and I have no hesitation in repeating them.

It is the

intention of this government to continue to pursue those who violate

the accepted standards of practice on the VSE. To the extent that we

catch scumbags who are violating those kinds of rules and regulations,

we will prosecute. I am very proud of that statement. I stand behind

it. There certainly is no need to apologize.

The reference

clearly did not refer to all the operators on the VSE. Indeed, I have

spent the last two and a half years of my life standing in this House

defending the majority of the operators on the VSE and their methods of

doing business. The record is clear in that respect. I find it humorous

in the extreme to see the Leader of the Opposition all of a sudden

trying to have it both ways. I put it down to the fact that he fails to

regularly attend, and therefore would be unaware of comments made by

his colleagues.

MR. HARCOURT : While the minister may

find what he has done a laughing matter, we on this side of the House

don't think it is a laughing matter at all.

We want to see

the Vancouver Stock Exchange be a successful venture capital market. It

is building towards that goal, but the minister has a responsibility to

repair the damage which has been caused in large part by his careless

attitude and his careless remarks. New Democrats have demonstrated

their commitment to improving the exchange by meeting with the

superintendent of brokers, the governors of the exchange and the

Securities Commission, and by putting specific names and instances

before the minister.

Is the minister now ready to cooperate

with the opposition in bringing this matter before an all-party

committee of the Legislature? Today I have tabled a motion to that

effect. Is the minister prepared to support our initiative and take up

our offer to help?

[2:15]

HON. MR. COUVELIER :

If I had any confidence that the genuine motive of those members

opposite would be to do what the Leader of the Opposition portrays, I

might have a different reaction. For the last two and a half years we

have stood in this House defending the VSE and the majority of

operators who practise their craft on the VSE.

I am the one

who has been making the speeches about the role the VSE can play in our

developing financial community. I am the one, as recently as two days

ago, who made exactly those comments. Admittedly, the Leader of the

Opposition wasn't in the House to hear them. At the very least, while

he's traveling around at taxpayers' expense, he might read Hansard so that he's aware of what occurs in his absence.

[ Page 6882 ]

day or two ago I referred to the chameleon-like approach taken by

certain members of this House in respect to some of these matters. This

is a classic illustration of the point I was attempting to make. That

is to say: on the one hand, we have the Leader of the Opposition who

tries to portray himself as a friend of business and certainly the

Vancouver business community; and on the other hand, we have other

members of the crew opposite who seem to be making it their life

mission to destroy the reputation of the VSE and maliciously malign

individuals who have been operating on the VSE.

We are

convinced — and have been since we took office — that there is a

marvellous opportunity for the Vancouver Stock Exchange to improve its

profile in the Pacific Rim and to expand its business dealings with

other stock exchanges in the world. We have consistently put in place

regulations and legislation which will enable us to reach that

objective. Each of those initiatives rebuts the suggestion that this

government is less than serious about the matter. We clearly are

serious. We will bring forward regulations and legislative changes this

session to further refine the opportunity for our regulators to do

their job more effectively. That is in the interests of all British

Columbians, and we will continue to pursue that objective.

MR. HARCOURT :

While the Social Credit government laughs and smiles about the damage

that they've caused to British Columbia's reputation, while the

Minister of Finance refuses to take this matter seriously and refuses

to answer my question, which I offered in a genuine way to deal with

this very dramatic situation, I will once again ask the minister if he

is prepared to accept our genuine offer and refer this matter to an

all-party committee of the Legislature to assist the VSE to become the

venture capital Pacific Rim exchange it is becoming and to deal with

the blackening of the financial reputation of British Columbia that he

has caused.

HON. MR. COUVELIER : I repeat the answer

I provided to that question originally. If I was satisfied that the

motivation of the members opposite was genuine, I would have a

different reaction than I am presently inclined to bring to the issue.

The members opposite have accused the Vancouver Stock Exchange of being used for a laundering operation. That's in Hansard ,

Mr. Member. Such a ridiculous accusation hardly deserves mention, and

yet it gets publicity and gets trumpeted around the world. It's absurd

to suggest that a relatively minor market, with that relatively small

opportunity to actually launder money, would be used for such a

purpose. Yet the allegation was made in this House It's quoted in Hansard

— I'll find you the reference — and it gets trumpeted all over the

world. There could be no more absurd suggestion to make. Anyone who

understands anything at all about stock exchanges would understand that

if laundering was to occur, it would occur In New York, Tokyo or

Toronto long before it would occur in Vancouver. The sums of money

being moved there wouldn't facilitate that objective.

The

hon. member suggests that they have something to contribute in talking

about the rules and regulations and legislation affecting the VSE. If

that kind of comment is exhibited or brought forward as an example of

the kind of contribution you might make to such an examination, I tell

you, hon. member, we would all be wasting our time.

RACE RELATIONS

MR. CLARK :

I have a question for the Provincial Secretary in his capacity of being

responsible for multiculturalism. It's a serious question. I have here

copies of two leaflets produced by neo-Nazis, which have been handed

out in the streets in my constituency and in the school grounds of East

Vancouver over the last two days. The so-called "skinheads" are

apparently holding a rally tonight near Commercial Drive. Racism is

clearly at a dangerous level. This isn't funny at all, Mr. Member. I

wonder if the minister could tell us what concrete steps he has decided

to take to deal with the dangerous outbreak of racial tensions in

Vancouver.

HON. MR. REID : In response to that, I

wish the Attorney-General (Hon. S.D. Smith) were here, because it is

more legitimately a question to the Attorney-General. But I am not

aware of the material; this is the first time I've heard about it. I'll

certainly look into it following this question period.

MR. CLARK :

I will be raising this with the Attorney-General and the

Solicitor-General (Hon. Mr. Ree), of course, but there are two ways of

dealing with outbreaks of racial tension. One is legitimately a police

action; the other, in my view, is more appropriately an education

response. It seems to me that the policies on multiculturalism of the

ministry responsible appear to be little more than a publicity gesture.

would like to ask you whether you have now decided — in light of these

or after you see these — to deal with some of the legitimate concerns,

such as funding for ESL for adults in our schools, and to embark on any

kind of race relations education program and other efforts to deal with

this problem.

HON. MR. REID : I take the comments

made by the member seriously. Since I am not aware of what prompts

them.... When you get into discussion about ESL and education, I have

the hon. ministers for post-secondary education who deals with ESL and

also the Minister of Education (Hon. Mr. Brummet). My ministry does

not, under the multiculturalism component, deal with education at all.

ACCREDITATION OF PRIVATE COLLEGES

MR. JONES :

I have a question for the Minister of Advanced Education and Job

Training. This week, I think the minister is aware, students from

Western Media Institute, a private career college, who were

[ Page

6883 ]

misled about course content, instruction time and

school facilities, have had no recourse but small claims court in order

to retrieve their $3,000 in tuition fees. Given that present government

policy does not protect students from this type of deception, will the

minister finally accept the need for an accreditation process to ensure

that these private colleges deliver the services they advertise

publicly?

HON. S. HAGEN : I do thank the member for

the question. It's a very timely question. I can assure the member

opposite that I asked my staff several weeks ago to bring me a report

and recommendation on this matter, and I will be dealing with it as

soon as I get that report.

MR. JONES : The minister

indicates that he's studying the issue. He said that a year ago. He was

studying it two years ago. Obviously the minister is not a quick study.

The

Ministry of Advanced Education and Job Training claims in its policy

that it protects the interests of these consumers. However, only one

person oversees more than 400 of these colleges, with something in the

order of 40,000 students involved in the process. Given the litany of

problems we've had in the past couple of years, where students have

experienced serious deception and serious financial problems, does the

minister not now see the need for a proper accreditation process and

proper staffing to ensure that these schools operate ethically and

responsibly?

HON. S. HAGEN : In answer to the member

for Burnaby North, I dispute his statement that there is a litany of

complaints. We do have, in fact, over 400 private training institutions

in this province, and the vast majority operate very effectively and as

a matter of fact are very effective in finding graduates jobs. I guess

this seems like the same sort of brush they were using a couple of days

ago in dealing with the Vancouver Stock Exchange. The members opposite

always want to paint all of the organizations and all the colleges and

schools with the same brush, which is not true. I can tell you that we

deal with these matters very seriously. I know the member knows that,

and I will be dealing with this matter seriously.

Ministerial Statement

LEAD SOLDER IN WATER SYSTEMS

HON. MRS. JOHNSTON :

Mr. Speaker, I would like to make a statement concerning this

government's commitment to the purity of our drinking water and the

measures my ministry is taking to ensure that the buildings in which we

live and work are free of contaminants which might threaten that purity.

In doing so, I would like to assure the member for Maillardville-Coquitlam

(Mr. Cashore) that the bill he is proposing is entirely unnecessary, as he would

have discovered if he had taken the freedom that is his to inquire of me or

my ministry. We are entirely aware of the potential for harm that exists in

the use of lead solder in our plumbing systems and have been making arrangements

to accelerate the introduction of Building Code components to eliminate the

use of lead solder and adopt approved lead-free varieties. Originally, the National

Building Code target for such a measure was to have been 1990. However, my colleague

the Minister of Health (Hon. Mr. Dueck) and I concurred that the situation warranted

swifter action. Therefore, as long as two months ago we initiated the process

to change our code, with a target for adoption of approximately four to six

weeks from today. These new standards will eliminate the use of lead solder

in British Columbia's water systems.

Our

resolve in this area is easily verified, because it has been acted upon

through open and thorough consultation with the building industry,

trade schools, manufacturers and environmental groups. In fact, this

commitment was known to the West Coast Environmental Law Association

back in March.

All this would have been available to the

member for the asking. The member opposite has indeed succeeded only in

raising the level of fear in our wider community unnecessarily and

without consultation with the ministry responsible for public safety. I

am happy to say that we do not follow his party's lead in these cases,

but have moved swiftly and effectively, in a highly coordinated manner,

to eradicate the danger.

MR. CASHORE : Mr. Speaker, I

would like to thank the hon. minister for making a copy of this

statement available to me just prior to question period.

HON. MR. RICHMOND : Did you give her a copy of your bill?

MR. CASHORE : Yes, I believe she now has a copy of the bill, thank you.

would like to say to the minister that I appreciate the announcement. I

take it in good faith, I believe that the initiatives the minister has

just announced are worthwhile, and I applaud them.

I find

it difficult, however, to know why the minister would use this as an

opportunity to be defensive. Surely it's an item that requires a

proactive approach, and there's no necessity here whatsoever to attack

the messenger.

I appreciate what the minister said about

the West Coast Environmental Law Association. I too have been in

consultation with them, and last November I announced that I would be

introducing this bill.

Mr. Speaker, I make no apology for

introducing a private member's bill. This is a time-honoured tradition

in this House whereby the opposition has an opportunity to put forward

viable alternatives, and it means that democracy is healthy in this

place. If democracy were as healthy as it could be in this place, this

bill would be brought forward.

[2:30]

[ Page 6884 ]

While

I appreciate this announcement, it is not legislation. What we are

putting forward is legislation to protect the health and safety of

British Columbians. It should not be a time for this type of an

unnecessary attack, but a time to get on with it, and I appreciate the

fact that the minister has said that she should.

Having

said that, I would point out that the government's track record on

enforcement is abysmal in this and other areas, especially where it has

to do with the environment. The minister started off her comments by

stating that she was concerned about the purity of our drinking water.

I would remind this minister that to ensure the purity of our drinking

water in the lower mainland, keep that pipeline out of the watershed!

I appreciate the fact that we on this side of the House with our private members' bills are setting the agenda.

MR. SPEAKER :

Order, please. Would the member resume his seat for a second. The

member knows the rules of ministerial statements; he's now gone into

three different items. Would he finish up his reply, sticking to the

minister's statement, please.

MR. CASHORE : Mr.

Speaker, I appreciate that, and I would invite all cabinet ministers to

respond to each one of our private members' bills in this House. We

would appreciate the opportunity to respond.

Orders of the Day

HON. MR. RICHMOND : I call second reading and adjourned debate of Bill 10, Property Purchase Tax Amendment Act, 1989.

PROPERTY PURCHASE TAX

AMENDMENT ACT, 1989

(continued)

MR. BLENCOE :

I said before the adjournment that I was going to relate to a letter

that I think really states quite well the general feeling about the

property purchase tax and the amendment currently before us. I think

most people, particularly young British Columbians who want to get into

the market for the first time, have seen that this amendment really

does little to help the majority of first-time purchasers to buy that

dream home.

I have here a letter from a constituent in

Victoria addressed to the Minister of Finance and Corporate Relations.

I just want to read some parts of it, and the minister can take note. I

think it really says it all in terms of how ridiculous this amendment

is:

"I am baffled by your plans to give a

break on the property purchase tax to purchasers with small down

payments. I have scrimped, saved, sold inherited furniture, etc., to

amass life savings of $40,000 for a down payment and have managed to

qualify for a maximum pre-approved mortgage of $90,000 based on income.

In Victoria, the resulting maximum purchase price of $130,000 won't

result in much of a house. The place will likely need $5,000 to $10,000

worth of repairs, updating, new appliances, roof, etc.

"Your

property purchase tax of $1,300 on this purchase represents a large

burden for me and for my family. I'm trying to put a roof over our

heads, not speculate in real estate. It is baffling why some people" —

and this is the major point — "with whom I am competing for a house in

the $130,000 price range should get a break on the tax while I will

not. My $40,000 down payment is 30 percent of the purchase price of a

$130,000 house. The tax break will go to someone with only 10 percent

down" — that's $13,000 — "requiring a 90 percent mortgage, or $117,000.

"This

means one thing to me: to get such a large mortgage would require a

much larger income than mine. So it seems you are favouring high-income

people with low down payments...over people like me with lower incomes

and larger down payments. This doesn't make sense to me."

The constituent is absolutely right.

[Mr. Rabbitt in the chair.]

"Please

explain the rationale behind this tax and why your tax break is limited

to people with small down payments. Why the tax inequity? How does the

tax assist the average B.C. family trying to attain its own home? We

need help in this regard, not yet another hurdle.

"In

my opinion, the purchase of dwellings serving as principal residences

should not be subject to any purchase tax. Charge speculators and

investors, but not B.C. families who could put the scarce funds to much

better use. Please don't penalize people with reasonable down payments

entering the world of real estate with their life savings prudently and

with caution as though we are playing the stock market, purchasing

luxuries or trying to get rich quickly."

I think this

constituent says it all. This is an average young British Columbian

with a family hoping to obtain that dream of a home, who not only

disagrees with the property purchase tax but has seen right through the

amendment that's before us today. It's basically unfair. It continues

to penalize the average British Columbian, the ordinary British

Columbian family that just wants to get into a home and to purchase

that dream. This government should have at least exempted the

first-time buyer.

Let's do something for home ownership in

British Columbia. Let's do something for those British Columbians who

want to own their home, and exempt the first-time buyer. This

government purports to speak for the interests of home ownership.

They've always said that. Well, their policies speak.

MR. MILLER : Actions speak louder than words.

MR. BLENCOE :

Thank you. Actions speak louder than words. Let's at long last do

something and exempt the first-time buyer at least. This letter that

I've read into the record I think says it all.

MR. CASHORE :

This is the second opportunity we have had to canvass this subject

since we first arrived here in March 1987 and the act was originally

introduced.

[ Page 6885 ]

that time, you may recall, there was a tremendous outpouring of

response from concerned citizens who sent us letters, petitions and

postcards. I know the minister is well aware of that. People could see

the hardship that was going to be coming their way as a result of this

inappropriate initiative. It's certainly not a progressive way of

dealing with the fact that taxes must be collected, because it was

being applied in such a way that it was hurting those who could least

afford to deal with it.

Here we saw a situation which this

amendment now purports to try and address. It perhaps addresses it for

some small segment of people but certainly does not address it in a

significant way for the people who would nevertheless still be hurting

from this law that was not well thought out in the first place.

too, have constituents who have come to me with their concerns about

diminished earning power, and yet they have been frugal. They have

tried to make it possible to get into the housing market so that they

too could share that dream of owning their own homes and raising their

families in a neighbourhood of their choice, only to find that what it

was amounting to for them was not really — even for those properties

under $200,000 — a tax of 1 percent but in many instances a tax of 10

percent, because it was 10 percent of the down payment that they were

able to raise at that time. It's a very serious incursion into their

carefully honed budget.

It appears that the government has

recognized that there is a certain unfairness and a certain

unpopularity in this tax and has decided that they must do something

about it. They have come forward with this amendment. As one wades

through this amendment and tries to analyze it, it is dealing to a very

little extent with the actual problem as defined. It's being called the

Property Purchase Tax Amendment Act. Yet we know the topic out there in

the mind's eye of the public is the property purchase tax. It is made

to appear as though this act is dealing with that issue. There is much

verbiage within the act that deals with anything but.

doesn't, for instance, really deal with the loopholes that enable those

who are very wealthy to avoid having to deal with this tax altogether.

It is a situation that leaves British Columbian families in a great

deal of difficulty.

It was only a few days ago that I was

out visiting several of the homes in my constituency. When I was

talking to people on the doorstep this was a topic that came up,

especially among young people on many different occasions. Young people

in rental accommodation were finding that it was going to be extremely

difficult for them to be able to get the wherewithal to get into the

housing market, given the rising prices and the fact that this tax

would still be taking a very significant portion of what they had

available away from them.

As the second member for Victoria

has said, this isn't really helping the first-time buyer. It's the

first-time buyer that we look to become a part of the citizenry who is

going to be able to participate in a very significant way in the

development of our province. We look to the first-time buyer to be the

person who is out there in the workforce, who through entrepreneurship

is developing those businesses that help to make this province strong

and grow in an environmentally sustainable way. We think of the

families and we think of the children. What we end up with is something

that is seen by these people to be an attack on their situation.

Recently

I received a letter very similar to the one that was read by the second

member for Victoria. One of the points that this particular constituent

was referring to was that this was not going to be any help to them at

all, although they might have qualified for some relief from it, simply

because of timing, because they had been unfortunate enough to have

purchased their property prior to this taking place.

find there is an administration of taxation throughout our society that

is becoming more and more onerous for low- and middle-income people,

more and more of a burden for those who can least afford it and more

and more of a problem for the people who we look to to solve the

problems of tomorrow.

So I too — while I am speaking very

briefly on the subject — would like to say that this amendment is not

addressing the issue that needs to be addressed. This amendment is not

going to deal with the dilemma being faced by people who are being cut

out of the market because of this very draconian measure that still

exists in their case.

I would ask the minister to go back

to the drawing board, take a look at the mistakes that were made in

1987 when the legislation was first brought in and come back with

something that is equitable and fair for British Columbians and doesn't

create this unnecessary burden.

[2:45]

MR. MILLER : I wanted to add — not a very long segment — but my voice to the issue.

First

of all, I think it's legitimate. Those who have been describing the

general plight of the first-time home-buyer are completely accurate.

All of us — if we cast ourselves back — were probably at one time or

another in that position. I don't know too many people who were born

into or who easily accumulated the wherewithal to make that initial

leap. It's a very difficult one, at least in my experience with the

people that I have associated with throughout my life, and that has

generally been the people I worked with.

I recall my own

first home and the manoeuvring that was required to get into it. It's

hard these days to go back to 1972 and 1973. In 1973 I bought a home,

which was a reasonable home for $30,000. Those days are long gone. I

look back with some fondness, though at the time I thought $30,000 was

a heck of a lot of money.

Nonetheless, I was able to do

that with the cooperation of an agent who said: "Look, I'll just pass

up my commission for a short time." That coupled with the outright B.C.

second mortgage at the time,

[ Page 6886 ]

and

we were able to work the deal and get in. It proved to be — as

home-ownership normally does prove to be — a good and prudent move.

think it's legitimate also — and I hope I'm not offending anybody by

saying this — to tax the appreciated value of homes. It seems to me

that this scheme is simply a means of doing that, particularly in a

very hot housing market.

It is not unrealistic, in my

opinion, to capture some portion of that value through taxation. After

all, the government or the state also has programs, although we have

been quite critical — and I think rightly so — of the programs that

have been put in place to develop housing. Nonetheless, there is an

expenditure of public money in terms of development of housing, and I

think it's reasonable for the state to tax a portion of the appreciated

value, as they do in many other areas.

The problem with

this scheme is that it puts the onus on the purchaser as opposed to the

vendor. I recall when this was originally suggested. I believe it was

the Premier who, in his feeling — which obviously must have been much

the same as many of us had, and I suspect many members on the

government side probably had the same feeling — and in responding to

the criticisms about the policy, said: "Well, we'll just switch it so

that the vendor pays."

The Premier did this kind of

simplistic analysis and came to the conclusion that really the scheme

was an attempt to tax a portion of appreciated value, and if we make

the vendor pay, the pain will be minimized if not completely done away

with. Of course, you can't put that kind of system in place. So the

government has chosen to remain with a system that will tax the buyer.

All

we're proposing — and I recall that members on the opposite side have

also been in favour of it — is that there be relief for the first-time

home-buyer. I haven't seen any analysis of where those first-time

home-buyers — and obviously it varies regionally.... You can still buy

a fairly low-grade home in my constituency in the $70,000 range.

Obviously that is completely out of the question in a market like

Vancouver, the lower mainland or even here in Victoria, but there are

areas in the province where that is still possible. Nonetheless, the

aim of the opposition in proposing that there be some relief is, I

think, quite legitimate.

I know it's not always easy to

introduce new taxation measures. There is an element of resistance. I

know it's not always easy to implement housing programs, because again,

there is an element of resistance. I can recall when the New Democratic

Party government, for example, introduced the tax deferment for

seniors, which I think has continued to this day. In fact, I believe

there's another bill, but I won't get into that. I think it was a good

scheme. It was an attempt to provide some relief to seniors.

MR. BLENCOE : We passed it, and they attacked it.

MR. MILLER :

My colleague from Victoria advises me that the opposition of the day,

which was the Social Credit Party, apparently attacked that scheme.

realize it's not always easy when you introduce new programs and new

measures. Sometimes they do meet with some opposition, and I think it's

incumbent on the minister to separate this sort of straight political

opposition from legitimate suggestions that come from both sides of the

House. I recall the program of leasehold that we attempted to

introduce. Again, I thought it was legitimate in terms of some of the

difficulties, particularly the land value question. It was tried with

very little success in my constituency; there was resistance from

consumers who thought they didn't like the concept of leasehold.

Nonetheless, it is appropriate in some circumstances, and simply to

oppose for the sake of opposition sometimes is not the wisest course.

Getting

back to this particular tax, it seems to me that it's regressive in its

impact on the first-time home-buyer, particularly as we enter this new

era of taxation in which the federal government has embraced the

concept of what is essentially a sales tax — I believe they call it the

goods and services tax — on many commodities. I think that will be an

inflationary factor as well in terms of house prices, and an added

burden, along with the property transfer tax, for those people —

normally we're talking about young couples — in the market for their

first home. As we all know, with advancing years that home in fact

becomes your collateral in many instances. That's what allows you to

retire. Hopefully there's an asset there that will allow individuals to

enjoy a quality life, to have the kinds of things we all require and

enjoy when we're no longer in the workforce.

I think it's a legitimate attempt by the opposition to advance an amendment that is meaningful.

AN HON. MEMBER : Are you advancing the amendment?

MR. MILLER :

Haven't we advanced the amendment yet? That's all right. No doubt there

will be further debate, Mr. Speaker. The minister knows what I'm saying.

With

that, I think I'll conclude. There will be more debate on this issue

along the same lines, and the opposition will continue to pursue what

we think is a reasonable and legitimate course in terms of dealing with

this revenue measure. Given the fullness of time and the reasonableness

of the opposition's points, I hope we can fully expect the Minister of

Finance to acquiesce and give a legitimate break, particularly to those

young couples who struggle so hard to get into their first home.

DEPUTY SPEAKER : Before the Chair recognizes the next speaker, I would

very much like to remind the members of the House that the Chair ruled earlier

today that debate on a bill amending

an act is such that only the matter being

amended may be canvassed, and not the entire original act. The Chair has been

more than lenient to date as the principle of

[ Page

6887 ]

taxation has been discussed. What the bill is

addressing is the exemption. I would request that in further discussion

members limit their discussions to that bill and to the exemption.

MR. SIHOTA :

It's too bad that the Attorney-General (Hon. S.D. Smith) is not here,

because this government talks over and over again about rights to

property, how that should be enshrined in the constitution, and how

it's the only way to make sure that people's homes and property are

protected. In a funny sort of way, if there was a right-to-property

clause, maybe this taxation measure with respect to homeowners could be

thrown out on the basis of right to property. I find it paradoxical

that the government, which so strongly advocates right to property and

its inclusion in the Charter of Rights, would now introduce measures

that would deny individuals the opportunity to own a home.

For

one sentence I'm going to digress by saying that it's interesting that

it was our party, federally, which sought to introduce an amendment to

the Charter to include the right to home-ownership.

implementing a taxation measure which serves to increase the cost of

acquiring a new home, this government really is adding to the barrier

that most people feel when they are trying to acquire their first home.

If this government truly had at heart the interests of young couples

and families who wanted to buy a house, they would introduce changes to

this legislation which would make it easier and exempt them from the

payment of taxation. Instead, we have this half-baked measure by the

government to try to curry some political favour by implementing this

measure that tries to give a break to people intending to buy a home.

[3:00]

MR. BLENCOE : It's a leaky band-aid.

MR. SIHOTA :

It's worse than that. It's an ill-conceived, poorly-thought-out program

by government, because it encourages people to go further into debt in

order to get the maximum benefits of the program.

The

Minister of Finance would laugh and chortle, as he often does when we

make legitimate comments. I appreciate the minister has had a bad week

with all the talk about the Vancouver Stock Exchange this week. Maybe

he'd like to go back to Saanich council.

DEPUTY SPEAKER : And maybe the Chair would like to get this discussion back to relevancy. Please proceed.

MR. SIHOTA : As I was saying, Mr. Speaker, it's a program which actually

encourages people to go into further debt to take the maximum benefits of the

program. It's strange indeed that a government that talks about balanced

budgets, fiscal responsibility and fiscal prudence would actually introduce

a program that.... I didn't bring in the two or three letters from people

in my riding who have pointed out the weakness and the flaw — former members

of the Social Credit Party, I might say. Real estate agents are upset with what

the government is doing in this regard.

would have been a simple matter for the government to say: "If you're

buying a home for the first time, you're exempt." I know it would

boggle the Minister of Finance's mind to think there could be an

administrative scheme set up to achieve this. I understand from what I

hear around town that that's the reason the government didn't implement

this blanket exemption for first-time home-buyers. It's very easy to

do, Mr. Minister. It's very easy to ask people who are buying a home

for the first time to sign a declaration to that effect. We do it with

respect to all sorts of aspects of real estate transactions, when these

matters come before lawyers or notaries, and they're filed in the land

title office. You sign all sorts of declarations, and you can have all

sorts of penalties if people take advantage and bypass those

declarations. So there is no administrative barrier to the

implementation of an exemption from the property purchase tax for

first-time home-buyers.

Others will argue that apart from

the administrative concerns, there's a financial concern: the fact that

the government would lose some of its much-desired revenue by creating

this exception. I'll tell you where you can make up that money and, in

fact, surpass the amount of money you'd lose. You would make it up,

quite frankly, by closing the loophole that allows corporations to

transfer property through share transfers and avoid the tax. That's how

you can make up the money, literally tens and millions of dollars that

the government could accrue in additional revenue if it said to someone

who wanted to sell a 50-storey skyscraper in downtown Vancouver....

DEPUTY SPEAKER :

The Chair regrets to interrupt the member, but we are now talking about

the principle of taxation. The bill is dealing with the exemption, and

I would ask that the member abide by the earlier ruling of the Chair

this morning. Please proceed.

MR. SIHOTA : Mr.

Speaker, in all respect, I was talking about a taxation measure and

other taxation exemptions available to government. I don't see how that

can possibly be out of order.

MR. BLENCOE : On a

point of order, this government is always calling on this side of the

House to suggest positive ways to help them out with their financial

constraints, and my colleague from Esquimalt-Port Renfrew is showing

them, if indeed they could exempt the first-time buyer, where they

could make up the revenue shortfall. I think that's quite in order, Mr.

Speaker. It's a positive suggestion, and it's what the Minister of

Finance continually calls on us to do. I suggest that you should allow

him to continue in that vein.

DEPUTY SPEAKER : The Chair thanks you for your remarks and will abide by the earlier ruling of

[ Page 6888 ]

the Speaker this morning, and allow those remarks to be canvassed in the committee stage. Please proceed.

MR. SIHOTA :

Thank you, Mr. Speaker. I'm just trying to talk about how government

can raise revenue and plug a particular loophole. I certainly don't

want to get into trouble with the Chair, because next time I go to

Yale-Lillooet I might not get the warm reception he always gives me

when I go up there.

The point I'm trying to make here is

that there are no administrative or financial barriers to going full

bore and implementing the type of exemption that we ought to have seen

in this legislation. Instead, we've had a situation in this

legislation, with the taxation exemption that's been introduced, which

really sort of tangles a further web for the government. It recognizes

itself that there is a need to show fairness to those people who are

entering the marketplace in terms of home acquisition for the first

time, but it's not prepared to forgo the revenue necessary to make the

full exemption, to make it up.

When this legislation was

being drafted, the choice was between, on one hand, the principle of

saying to young people buying a home for the first time — people my

age, quite frankly, or the second member for Vancouver East (Mr. Clark)

or, almost, the second member for Victoria (Mr. Blencoe) — that yes, we

in this society believe that first-time homeowners ought to get a

break, and on the other hand, a matter of financial greed in terms of

not wanting to give up the quantum of money the minister had latched

onto from the tax grab that occurred two years ago when he first

introduced this legislation.

He tried to go halfway. By

going halfway, who does he appease? He doesn't appease anybody in the

greater Victoria or greater Vancouver area, because the limit on the

program is $100,000 or $150,000, and the price of most housing has gone

beyond that threshold. He doesn't appease the people who have been

prudent and have saved up $30,000 or $40,000 to increase the equity in

what they will buy. In fact, he does the opposite by telling them to go

out and borrow some more — certainly a move which the banks would like,

but not ordinary young couples in British Columbia.

doesn't appease the real estate industry, which has made submission

after submission to him. I had the opportunity the other day to have

lunch with the current president of the Greater Victoria Real Estate

Board — a very decent chap — and we discussed this problem. And he was

perplexed at why it was that the government wasn't prepared to do that

which it had been lobbied to do. It led him to conclude, Mr. Speaker,

that this was a government that was not prepared to listen, a

government that's out of touch.

[Mr. Pelton in the chair.]

This

is not, Mr. Speaker, the Social Credit Party of W.A.C. Bennett, which

was known for the sober second thought, which was known for

home-ownership. This is a narrow-minded, insulated, radical government

that's not prepared to listen to the people of British Columbia when

they make a legitimate and fair request. It is a government that is

more fixed on some of the internal squabbles and leadership

difficulties that they're having than on attending to the needs of the

people of British Columbia.

Interjection.

MR. SIHOTA :

The member for Surrey asks which party I'm talking about. I should say,

Mr. Speaker, I'm speaking about his party, that's having all these

difficulties.

HON. MR. REID : You're just rudderless.

MR. SIHOTA : That is, indeed, as he says, rudderless.

Interjection.

MR. SIHOTA :

It's going downhill fast. I don't know if I should feel sorry for the

minister because he isn't in on what's happening, or if he's just

simply unaware of what's happening.

Anyway, Mr. Speaker, the government should move to do what people on both sides

of his House have said: the government should create a full exemption for first-time

buyers. People on both sides of the House have said that. The real estate industry

has said that. Families have said that. Ordinary British Columbians have said

that.

It's

only an invitation to cynicism if this government waits until the eve

of the next provincial election to say that yes, it has now seen the

light and that finally the penny has dropped, that they were wrong and

that there is going to be a new beginning, a fresh start. Mr. Speaker,

it's disappointing in the extreme.

The members from the

government side are giving me all kinds of signals, asking me to

terminate my debate — and I will, at this stage.

Interjection.

MR. SIHOTA : You didn't applaud, though. [Applause.] Thank you.

Like

I say, it is a disappointment to families in ridings like mine, where,

quite frankly, real estate values are competitive and still relatively

low. These types of benefits really could have helped people in my

riding. And you fail to deliver again; the government has failed again.

DEPUTY SPEAKER : The members are advised that pursuant to standing order 42, the minister closes debate.

HON. MR. COUVELIER : They wore themselves out, Mr. Speaker. Isn't that something!

attempted to listen closely — as closely as I could, given the

dreadfully repetitive nature of the comments — and have captured some,

I think, of the

[ Page 6889 ]

essence of the comments that I heard expressed over the last hour or so.

First

of all, there seemed to be some comment about the original act, and

many of the comments dealt with the basic act produced two years ago.

Despite repeatedly being told that they were out of order, the members

continued to use up their allotted time with those kinds of

irrelevancies.

The fact of the matter is, Mr. Speaker, that

with the tremendous expansion of social program spending this

government has embarked on since it assumed office, it's necessary to

finance these essential human services. Obviously, all governments have

been looking at property purchase taxation as one device to accomplish

not only, of course, a new revenue source, but maybe more importantly,

and certainly in our case, a larger motivation was to attempt to take

some heat out of the Vancouver real estate market of the day and at the

time. There was every indication that that market was getting more and

more overheated and overpriced. Those members who spoke, some of whom

have municipal experience, would, I think, have the generosity of heart

to admit that this whole issue of how to capture for local government

the windfalls that accrue to those kinds of property escalations has

captured local government's attention for many years.

[3:15]

So the ethic of government imposing

some kind of a tax on that kind of inflationary effect — that is to

say, escalating property prices — is not new or unique. Many provinces

have such a tax. I notice in Ontario's budget announced yesterday that

they increased their tax to approximately our rates. The ethic of the

tax, then, is long established at the provincial government level. We

spoke to that two years ago when we passed the act.

This

bill — that we are supposed to be discussing, Mr. Speaker — provides a

device by which some people can have their property purchase tax

lowered The members of the opposition consumed much of the clock,

despite the fact that, I gather, they're all going to vote for the

bill. They couldn't resist the opportunity to see their names in print,

so they decided to consume the allotted time with some comments that I

don't think were relevant at all.

One speaker commented

about the fact that only 15 percent of renters will be affected by this

program The issue seems to be — at least in that speaker's mind — that

the program should be universal. This brings us back to where we were

in discussing the previous bill and, I think, characterizes the major

philosophical difference between members opposite and members on this

side of the House. This side of the House is committed to promoting

home-ownership. This side of the House is hopeful that we can, in the

fullness of time, ensure that every British Columbian owns his own

home. Therefore we consider things like rental assistance programs and

those kinds of things to be of a temporary nature.

In a

similar sense, we see no compulsion to ensure that all citizens of

British Columbia be able to live in downtown Vancouver at government

expense. I couldn't afford to live in the West End of Vancouver and

most British Columbians could not. I see no necessity for government to

subsidize such an event. Therefore I take no offence that 15 percent of

the population are going to benefit by this program. I take pride in

that. It's a targeted program, and it's targeted to need.

Many

members spoke about the fact that it fails to address first-time

home-buyers. Of course it does. It completely fails to address the

narrow issue of first-time buyers. That's deliberate. The issue is not

first-time buyers; the bulk of first-time buyers in British Columbia in

the last 12 months have come from outside the province, probably buying

their third, fourth, fifth or tenth home. By your definition, I take

it, members opposite, you would give them a tax break and not charge

them the property purchase tax, despite the fact that most of them come

here with their retirement plans intact and well funded.

The

fact of the matter is that what was needed was a device to address the

need for those people who had a large mortgage, not the need to address

first-time buyers. As I've said, the majority of first time buyers

don't need help. Certainly last year that was true. What we've done is

designed a program — a very narrow program — to fill the need of people

who, by virtue of requiring a high mortgage, obviously are going to

have some difficulty paying an extra 1 percent tax.

It was

suggested by some speakers that what we should be doing is eliminating

the exemption completely in that instance. I would merely point out

that traditionally there has been a fee for property title changes in

the land title office. This initiative eliminates that charge. Indeed,

with this benefit for those with relatively high mortgages, some of

them will wind up paying less than they would have paid under the old

ad valorem system in place at the land title office. It's an

improvement in that respect.

There were other comments

about the ineffectiveness of this bill in terms of the marketplace. I

must point out to the hon. members present that 38 percent of

condominiums sold in the greater Vancouver area were sold for less than

$100,000 over the last 12 months, up until March 31, 1989. Certainly in

suburbs of Vancouver even single-family detached homes had similar

kinds of buying opportunities.

To the allegation that the

facets of this housing action plan that we've implemented do not

address or offer any relief to people in Vancouver or greater

Vancouver, the facts clearly refute that. However, facts don't have

relevance in these debates, I've learned over the last two and a half

years.

The incidence of the tax has clearly not dampened

the housing market. It was alleged when we introduced the tax that the

housing market would come to a crunch, sales would cease and home

ownership transactions or changes would be dramatically reduced. Of

course, the facts have totally refuted that. As a matter of fact, in a

perfect world, if we were designing housing market activity, I think

that all of us would still say that housing activity in greater

Vancouver, and to some extent Victoria, is still over-

[ Page 6890 ]

heated

and that there are price levels which likely cannot be sustained in the

long haul. So the tax has not impeded the marketplace or restricted it

in any way.

There was even one speaker who wanted to get

into the Expo lands issue, which has had much discussion over the last

two and a half years. That speaker seemed ignorant of the fact that the

purchaser of the Expo lands did indeed pay property purchase tax. I am

surprised that the speaker was ignorant of that fact. It's an

oft-repeated fact. I have said so often, and the House has been told

before. Once again it's another indication of how desperate and

difficult it is to fill allotted time when you don't have much to speak

to.

MR. ROSE : You're taking quite a bit.

HON. MR. COUVELIER :

I am attempting to respond to points made by your colleagues, Mr.

Opposition House Leader. I have been led to believe that that's part of

the democratic process. Believe me, I would rather be doing important

people's business at my desk. I must stand here and attempt to deal in

an intelligent way, if I can, with the comments that have been raised.

has been raised during this discussion that a loophole exists with the

issue of being able to transfer shares in a company which owns real

estate, and avoid the property purchase tax. As we have said often in

debates previously in this House, there is no such loophole. The fact

of the matter is that if anybody wishes to buy any real property that's

held by a corporation, the first question that the accountant or lawyer

you retain — and hopefully if you are smart you will do that — will put

to you is: "Are you buying shares or are you buying assets?" If you are

ignorant of the impact of that question, they will explain to you that

you can buy shares and escape sales tax, for example. You can buy

shares and escape property purchase tax, if the property purchase tax

has been paid in the first instance. That's a long-established practice

in taxation law.

When the members opposite seemed to wish to continue to meet the point, I had said to them....

MR. BLENCOE :

On a point of order, an interesting point of order was ruled earlier

that talking about the loopholes was out of order. Now I understand it

is clearly back in order, because the minister has deemed it

appropriate to address that issue. That is indeed fine with us, Mr.

Speaker. We are pleased that we are going to be able to expand the

debate in committee to talk about those issues. I thank the minister

for doing that.

DEPUTY SPEAKER : Thank you, second member for Victoria. Would you please continue, minister.

HON. MR. COUVELIER : I was going to respond to the point of order, but you are going to allow me to continue?

DEPUTY SPEAKER : Mr. Speaker made a ruling this morning, I believe, on this selfsame subject. I think we are all aware of it.

HON. MR. COUVELIER :

I was just going to point out to the Chair that the point of order that

was raised this morning, to my memory, was not this issue of the

loophole. The point of order raised was the constant reference to the

original bill.

In any event, Mr. Speaker, I am merely

responding to statements made in this House in a way that I would have

assumed the hon. members wish to hear me respond. It is a democratic

process. I listened patiently to many of these irrelevancies, and I do

feel compelled to put on the public record some kind of response to

these comments that have consumed our time over the last few hours.

The

issue of the loophole, I think, has been adequately dealt with in

previous conversations, but once again was raised here. The fact of the

matter is that it has long been established law in terms of taxation

matters that purchase of shares in a corporation does not require the

payment of sales tax, for example, for assets acquired through that

process, nor does it require property purchase tax.

When we

made that point to the members opposite and pointed out to them, "How

would you apportion a consumer's purchase of ten shares in MacMillan

Bloedel between real estate and between assets, etc.?" of course, it

becomes an imponderable question. We pointed out to the members

opposite during that debate that there was a socialist government, I

believe, in Manitoba that attempted to introduce this kind of

legislation that would do exactly what you claim to want to do, and it

had to withdraw from the imposition of such a tax because of its

impossibility to enforce and its philosophical lack of justification.

So I did close that discussion many months back by challenging the

members opposite to draft for our interest some legislation that we

could look at seriously to see if it would accomplish the objective

they claim to desire. Of course, they have not yet brought forward such

draft legislation, which I think adequately indicates the impossibility

of the task which they asked us to perform.

Much was made

of the issue by one speaker that this bill wasn't going to help people

in greater Vancouver. As I mentioned before, it clearly will. The point

that arose in my mind the second time it was raised was: "Are these

people opposite somehow opposed to Maple Ridge? What's wrong with

living in Maple Ridge? Are they saying that we shouldn't be providing

assistance for people to live in Maple Ridge, Surrey, Burnaby, New

Westminster, the suburbs of Vancouver? They seem to be saying that they

want a program that enables everyone to move into Vancouver." Well,

I've just got to tell my friends opposite that that would be the worst

thing in socialistic terms, or humanistic terms, that could occur to

the citizens of the lower mainland.

We're proud of the fact

that this program will allow 96 percent of the condominium transactions

in Maple Ridge to qualify for this program: 54 percent

[ Page 6891 ]

the citizens of Coquitlam will be able to qualify with this program in

condominium purchases; 69 percent of the citizens in New Westminster

will be able to qualify; 78 percent of those residents of Vancouver

East. The first member for Vancouver East — or second member for

Vancouver East (Mr. Clark); we don't want to promote him yet — might be

interested in that comment: 78 percent of the properties changing hands

in Vancouver East from the condominium sector would be eligible for

this act.

Clearly it does address the issue of need,

despite what we've heard over the last two hours. What's wrong with

dealing with a question of need? Are the members opposite telling us

that need should not be a criterion of government assistance? Are they

all of a sudden abandoning their long-held socialistic values where

universality should apply to all? Are they now saying that need should

be ignored when we design government programs? What do they really want

to do? I am at a loss to understand.

Here we are, designing

a program that conserves public expenditures and attempts to manage

public money effectively, and the members opposite seem to be saying

that need should be irrelevant, that the only criterion should be

first-time buyers. All you have to do is move to B.C. and you're going

to qualify for a freebie.

The members opposite seem to be

mesmerized by this giveaway to people who won't even be able to vote

for the first few months. After all, isn't there some benefit to being

a British Columbian? Shouldn't we be serving our own citizens' needs

first?

My goodness, when I listen to the rhetoric from the

members opposite around this first-time-buyer issue, I am confused. To

the suggestion that this program is an incentive to borrow money, I

just broke up. I'd never heard such drivel in all my years, and I've

heard some drivel, because I've had to sit here for the last two and a

half years and listen to it. But to suggest that someone is going to be

duped into borrowing more money because the interest rate declines, I

find absurd. If that's the degree of expertise that these financial

wizards opposite bring to these questions, I really have to shake my

head in wonderment.

And they want to be government? They really believe they can manage public

money when they have this thought that: "Oh boy. If I can cut the interest

rate by 1 percent, I'll borrow another $50,000." I mean, is that really

what you believe? We had this very erudite member opposite from Esquimalt-Port

Renfrew trying to sell us that bag of hogwash. They might be able to sell the

Brooklyn Bridge to some citizens of B.C.; they certainly can't sell it to

us on this side of the House.

[3:30]

Mr. Speaker, I think I have adequately addressed some of the

concerns that we heard, and I'm very pleased now to move second reading

of the bill.

Motion approved.

Bill 10, Property

Purchase Tax Amendment Act, 1989, read a second time and referred to a

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

the House after today.

HON. MR. RICHMOND : I call Committee of Supply.

The House in Committee of Supply; Mr. Loenen in the chair.

ESTIMATES: MINISTRY OF LABOUR

AND CONSUMER SERVICES

On vote 41: minister's office, $273,577.

Interjection.

HON. L. HANSON : I will be pleased to serve you in the manner that you are accustomed to.

[Mr. Pelton in the chair.)

am pleased to take my place in debate of the Ministry of Labour and

Consumer Services estimates for the year 1989-90. Last year at this

time, I said that government had reaffirmed its commitment to launch a

coordinated attack on alcohol and drug abuse problems in our society.

At that time the alcohol and drug program from the Ministry of Health

and the Counterattack program from the Ministry of Attorney-General

were transferred to Labour and Consumer Services. Previous to that, the

liquor distribution function had also been transferred to my ministry.

am pleased to say that these moves have resulted in a systematic,

effective approach to the most serious matter of substance abuse and

use in this province. I am sure that hon. members are aware of our

comprehensive TRY program, which stresses prevention of substance abuse

problems at the community level. We have already seen a dramatic

increase in the number of referrals to our regional alcohol and drug

off ices. A recent public survey indicated that TRY has enjoyed a

remarkably high level of recognition and acceptance by the public. I

should point out that the TRY campaign is only a small part of the

overall program.

Enhanced funding under our community

awareness and action plan now covers 101 out-patient clinics, up from

the 55 in place last year. We now have nine detox centres, up from

seven. We have 13 supportive recovery homes, as opposed to only ten

last year, and 11 residential centres for intensive treatment, which is

an increase of two. Last year the program recorded more than 32,000

admissions, including clients and their families. Now that all these

new services are fully operational, we expect the figures to increase

even more.

During 1989-90, government will spend a total of

$48.9 million for the prevention and treatment of substance abuse. We

will add to that $1 million on the Counterattack program, bringing the

total to in excess of $50 million. That $48.9 million is: $10.8

[ Page 6892 ]

million

on prevention programs, which includes the TRY program; $31.6 million

on treatment programs, including expanded residential treatment

programs, out-patient counselling, detoxification centres and

supportive recovery programs; $4.2 million on the community action

program and innovative programs; and $2.3 million on research and

evaluation.

Many of the changes we have made in our

approach to substance abuse problems arose from the liquor policy

review which is commonly referred to as the Jansen report. In our

administration of liquor control and licensing matters, one of our

major objectives last year was to implement that Jansen report. I am

pleased to report that we have now implemented 70 of the 99

recommendations, with work proceeding on the others. At the same time,

we have developed new referendum guidelines for neighbourhood pubs,

along with strict new review and control measures to ensure that

referendums are administered consistently and fairly.

are in the process of developing a licensee training program, and I

look forward to industry's continued support when it is implemented.

The purpose of the program is to teach licensees and servers their

rights and responsibilities regarding the service of liquor. All

holders of liquor licences will be required to obtain training within

one year of the date of program launch; this will include management of

licensed establishments. We will phase in similar requirements for

servers in licensed establishments within two years of program launch.

At this time we estimate that the program will be launched on September

15. It's interesting to note that British Columbia is already

considered a leader in this field I've had a number of inquiries for

speaking engagements for my staff from both the United States and

Canada.

As I said a moment ago, government is fully

committed to fostering an attitude of moderation in the use of alcohol,

an attitude which the people of British Columbia expressed over and

over during the policy review. In line with this commitment we have

more reasons and resources for the enforcement of our liquor laws.

Accordingly, the liquor control and licensing branch conducted 125

hearings last year They wrote 212 warning letters and issued 72

suspensions for violations of the Liquor Control and Licensing Act.

Day-to-day operation of the branch continues to be one of the largest

jobs in the ministry. Currently the branch regulates more than 6,000

licensed premises. Added to that list are four breweries, seven cottage

breweries, three brew pubs, seven distilleries, nine commercial

wineries and nine estate wineries.

Another major part of

this equation is our highly successful Counterattack program. Over the

12 years that this program has been in existence, the proportion of

alcohol-related casualty traffic accidents has been reduced by 50

percent. This represents a saving of lives, a saving of injuries and

the emotional and other problems associated with those injuries, and of

more than $10 million in costs each year.

As an indication

of how important we consider this program to be, especially in the

context of our overall assault against alcohol- and drug-related

problems, we have increased the Counterattack budget by 180 percent.

The budget is now $1.15 million. In 1989-90 Counterattack will receive

an additional $650,000 in special funding for equipment purchases,

bringing the total of this year's budget to $1.8 million. These new

funds will help increase the public education component through the

production of new television and radio messages — some of which are

already on the air and you have probably viewed — new brochures and new

display material for the public and the police.

We are also

increasing our production of roadside signage for the enforcement

campaigns and increasing our efforts at publicizing these campaigns.

Also, my colleague the Solicitor-General (Hon. Mr. Ree), and I recently

announced that convicted impaired drivers now face a one-year

prohibition from driving, which is up from the six months in place

prior. They also face an automatic jail sentence for violation of that

prohibition. It is a sad fact that drinking drivers are responsible for

almost 40 percent of all road fatalities.

That leads me to

another area of responsibility: ICBC. In 1988 claims exceeded the

corporation's expectations. The 649,000 claims filed represent a 13

percent increase over the previous year. For every $100 of earned

premiums, the corporation paid $101 out in claim payments. Put another

way, ICBC paid out $8,400 for every minute of every business day last

year. At the same time, on a more positive note, wise investments saw a

surge of investment income to $213 million. This income helped offset

premium costs by about $105 per policy.

In the final

analysis, the corporation produced a modest operating surplus of $26.2

million, about 2.5 percent of the earned premium. To address the

increased need for claims service, the corporation found it necessary

to add staff and new facilities. Average staffing in the claims

division grew by 159 people last year, and new claims centres were

opened in Victoria, New Westminster and Richmond.

Another

major program responsibility in my ministry is consumer affairs. The

mandate is to seek a fair balance in the marketplace by promoting

fairness through the development, administration and enforcement of

consumer legislation without infringing on the legitimate rights of

responsible businesses. We continue to educate consumers, most notably

through publications such as our recently updated Consumer Assistance Directory ,

which consolidates important consumer information. This pamphlet is

aimed at helping consumers help themselves in teaching them their

rights and responsibilities.

In another area, our motor

dealer registrar maintains standards for motor dealers through the

administration of the Motor Dealer Act and the regulations attached. In

1988-89 a total of 1,565 registrants were renewed, and 286 new licences

were issued. The registrar conducted 27 disciplinary hearings and laid

26 charges.

Another consumer program, the investigation services branch, investigates alleged contraventions of

[ Page 6893 ]

consumer

protection laws. Last year this branch received 25,000 complaints. They

issued 231 warnings and laid 15 criminal charges. Our cemeteries branch

approved 294 annual reports. They approved 69 rate increases and 40

changes to cemetery rules, regulations and bylaws. This branch handled

almost a thousand inquiries.

Another consumer office, the registrar of reporting agencies, administers the

Credit Reporting Act, which regulates the activities of B.C.'s credit industry.

As an indication of the impact this industry has on the economy of British Columbia,

there is currently $26 million in homeowner debt outstanding in B.C.

Also

under the umbrella of consumer services is our residential tenancy

branch, which encourages a positive relationship between landlords and

tenants. The branch provides information and arbitration services to

landlords and tenants, investigates alleged contraventions of the act

and conducts public information seminars. Last year the branch received

5,300 arbitration applications, an increase of almost 25 percent over

the previous year. This increase is partially the result of our strong

economy and certainly is partly attributable to the increased migration

from British Columbia, which in turn resulted in lower vacancy rates.

The branch opened almost 1,500 information files and assisted more than

114,000 people with questions and problems relating to tenancies. The

rental housing council has also been very cooperative in dealing with

the lower vacancy issue.

Our travel assurance fund, another

consumer protection program, paid out almost $180,000 in claims on

behalf of 295 customers last year. The registrar was successful in

recovering $10,000 in reimbursements from agents who went out of

business. The balance of the travel assurance fund at year end was just

short of $490,000.

[3:45]

Another

of our high-profile programs in consumer services is the debtor

assistance branch. Last year they counselled 4,770 debtors and arranged

almost 900 repayment plans for debtors facing financial hardship. As

well as helping debtors directly, these payment plans help divert

costly court actions, and in addition the branch helped return almost

$4 million to the economy. That's an impressive increase of $1 million

over 1987.

Another piece of good news is the fact that

complaints against debt collectors fell to their lowest level in seven

years. This happened during a period when gross debt collections rose

by almost 10 percent. This improvement is largely the result of the

ongoing effort by the ministry both to communicate with the debt and

consumer industry and to educate the debt collection industry.

the labour side of the ministry, the hon members will be aware that we

are in the process of preparing new legislation that will see a major

restructuring of the Workers' Compensation Board and system. The report

submitted to me last year by Don Munroe, chairman of the Labour

Relations Board, was an excellent example of the cooperative effort by

labour and management. They were unanimous in their recommendations, a

fact that speaks to the climate of cooperation that can and often does

exist between labour and management in this province.

Last

year in the Workers' Compensation Review Board the backlog of appeals

continued to fall. By the end of the year it was reduced to 633 cases,

As of March 31, 1989, there were only 319 appeals older than one year,

compared with 724 at this time last year. It is significant that most

of these appeals were delayed at the request of the appellant. They do

not represent inherent problems with the system. In 1988, 5,365 review

board findings were issued. On average, the time taken from appeal to

finding is now eight or nine months. That is a significant improvement

over last year's average of 11 to 14 months. Simple appeals are taking

only about three to four months. In short, we are no longer receiving

complaints about the backlog.

Our worker's advisory office

continued to help workers and their dependents with advice and

assistance regarding WCB matters. Some 15,000 workers came to us for

assistance, and our employers' advisers provided similar assistance to

the employers.

On the industrial relations side of our

operations, the adjudication division of the Industrial Relations

Council received 3,695 new applications during the year and disposed of

3,614 cases. The dispositions made during 1988 included the remaining

undecided files which the IRC had inherited from the former Labour

Relations Board. During 1988 the Industrial Relations Council

streamlined the registry and adjudication procedures. This resulted in

significant improvements in the average time between the receipt of

applications and the disposition of those cases. In 1989 the council

expects an increase in the number of applications.

The

dispute resolution division of the Industrial Relations Council

monitors collective bargaining and helps parties to successfully

negotiate new collective agreements. In 1988 the chairman appointed

mediators in 88 disputes covering 103 employers and over 10,000

employees. Mediators were successful in reaching agreements 84 percent

of the time.

The preventive mediation program is designed

to bring labour and management together in a non-confrontational

setting to achieve common goals and improve their ongoing relationship.

In 1988 the division responded to eight applications for participation

in this program. Also during the year that division began to develop

and implement a computer-oriented database containing compensation

information on all collective agreements in the province.

the labour field, my ministry's employment standards branch handled

over 14,000 complaints and recovered almost $5.5 million in unpaid

wages, vacation pay and severance pay for British Columbia workers.

Another

important program that is my responsibility is the British Columbia

Council of Human Rights. Last year the council received more than 7,200

human rights inquiries. They opened 348 formal

[ Page 6894 ]

investigations

and referred 80 cases to hearings. The council also performs a valuable

role in educating our citizens about their human rights. The council

developed a curriculum unit on human rights for social studies and law

students at the senior secondary school level. As a result of such

target educational programs, there was a 31 percent increase in

complaint files opened last year. The council has a high profile and

remains a credible and effective agency for protecting human rights in

British Columbia.

Just before I close, I would like to

introduce my staff members who are present: my deputy minister, Mr. Lee

Doney; Jacquie Rice, who is the assistant deputy minister on the

consumer affairs side; and the assistant deputy minister on the labour

relations side, Mr. Claude Heywood.

I hope these remarks

give the hon. members a sense of the scope and importance of my

ministry's programs and activities. We look forward to another

productive year in Labour and Consumer Services.

Interjection.

MR. SIHOTA :

I don't know if the minister heard that comment, but I hope not. I can

assure him we won't be doing this for the next five consecutive days.

We're taking the weekend off.

I want to thank the minister for his opening comments. I listened with care to what he had to say.

responsibilities as critic fall in the labour end of his ministry. My

colleague for Prince George North (Mrs. Boone) has jurisdiction with

respect to the consumer end of the ministry and will be handling that

aspect of it. Of course, the minister has the benefit of having two

rookies who have just assumed critic responsibilities taking on the

challenge of estimates this time round, and I'm sure that gives the

minister great comfort. He doesn't have to deal with all the rather

experienced individuals he had before; and with the repertoire of

assistants he has in the House, I'm sure we will be able to plow

through these estimates fairly quickly and resolve many of the issues

that are at the forefront of our minds on this side of the House.

always have enjoyed estimates in the House, particularly in my capacity

as the Attorney-General's critic. I think we've tried to operate within

a particular spirit which is different than one would see in question

period. I'm sure, knowing the minister, that we'll be able to succeed

in that regard this go-round on the Labour estimates.

It's

been an interesting experience for me to be involved in a new area of

responsibility. What I've enjoyed about it is that I get up and around

and have an opportunity to meet with people involved in different

endeavours in a different walk of life than I've been accustomed to. As

someone who never did practise labour law, I didn't have as much

contact with employers and employees or with management and trade

unions to the extent I do now as a consequence of inheriting this

critic's area.

I should tell the minister, as an aside,

that one of the things we've been doing on this side of the House....

The minister talked about some of the positive things he saw in the

performance of his ministry, and there are also positive things we're

doing on this side of the House as New Democrats. We believe firmly —

this is no surprise to the minister — that Bill 19 and Bill 20 are

unacceptable legislation. Having said that, I'll leave it at that and

go on to what I consider to be the most exciting aspect of what I'm

doing and certainly the most time-consuming.

We've been

going around privately meeting with employer organizations, trade

unions, management and labour in this province and talking to them

about Bill 19 in particular and getting their views on that

legislation. We've been determining what they don't like about it, what

they do like about it, where the common ground is, where the

differences are and what solutions can be directed towards those

differences. It's been a very informative process for me, probably

similar to what the minister went through when he first engaged in this

portfolio. I have on my desk stacks of correspondence and submissions

from groups, because we firmly believe we're going to win the next

provincial election, and we made a commitment prior to the next

election to tell the people of British Columbia what we would do in

terms of principles to guide us on new labour legislation.

MR. LOENEN : It's about time.

MR. SIHOTA :

We're proud of that, and we only wish — the member for Richmond wishes

to heckle — that the provincial government had undertaken this process,

because I will commend the minister for this. I have no hesitation in

applauding the minister when he does something right, and I commend the

minister for the process that has resulted in the Munroe

recommendations coming forward in the legislation he spoke of in his

opening comments. I will be talking about a few things during the

course of that debate in terms of areas where we think you can make

some improvements. I'm sure those comments will be taken in the spirit

with which they are put forward to the minister.

Having

said that, if only that process had taken place with respect to Bill

19, 1 think the issues which occupy a lot of my time and a lot of the

minister's time and some of the issues that perplex both myself and the

minister with respect to the IRC, the boycott and the credibility of

the instruments of Bill 19.... A lot of those things which cause both

of us a fair bit of worry need not be there.

From my

experience in the meetings I've had.... Because I've kept the meetings

in confidence, I don't want to talk about who I've met, but I think

it's fair to say that we've met with most of the significant players on

the scene already. Really, it's not as difficult a task as one would

first imagine in terms of patching up the pitfalls in Bill 19 and

patching up the differences between government, management and labour

in this province.

[ Page 6895 ]

The

discrepancy I see in what the minister had to say is in saying: "Yes,

this government recognizes now that the process of Bill 19 was

unacceptable, inadequate, flawed, confrontational — call it what you

will." In my way of thinking, if there is one commitment that this

ministry ought to be making as we go into this fiscal year, it is a

commitment to deal with that legislation. I think that this government

would get universal applause if it said it was going to do that, and

sincerely went and did it, and started to repair the harm in this

province that it caused by the introduction of Bill 19, which is

unnecessarily confrontational. I believe, quite frankly, Mr. Chairman,

that the Minister of Labour himself understands precisely what I'm

saying, and I believe that he too would like to see some of these

things remedied. It is in the hands of, perhaps, his cabinet to

determine whether these things will ever occur.

I'm going

to talk a little bit more about the IRC and Bill 19 and that component

of the ministry during the course of my more detailed comments in this

session of estimates. But I put that on the table, because the minister

should know where we're coming from and what we see as the item which

ought to be the number one priority within his ministry this year.

May

I also tell the minister, having said that, what the other priorities

are that the New Democrats feel are important in terms of labour

matters in British Columbia. I do this for two purposes: one, for

putting them on the record and to be positive about where we're coming

from as a caucus and where I'm coming from as a critic; also I do it to

kind of give the minister notice of where I'm going to be going in the

estimates, so that both he and his staff are prepared when we get into

these issues, so that the people know what we're going to be raising. I

think that's only fair, because it lends itself to a thorough debate

and it helps to expose those areas where we might be wrong or where the

minister might be wrong.

[4:00]

Other areas of importance to us: employment standards in British

Columbia. Both of us, I think — the minister and I — recognize that

there's a huge segment of people in British Columbia who are

non-unionized and have few protections, very few protections, and rely

on the instrument of the employment standards legislation for the

procurement of those advantages and protection which that legislation

provides.

[Mr. R. Fraser in the chair.]

I was

reading last night a very interesting paper on representational issues

by Paul Weiler. It's a very interesting thought-piece — if the minister

hasn't seen it, I'll make sure he gets a copy of it — which talks about

the presence of legislation to cover many of those things which trade

unions have fought for to include, through legislative reform as

opposed to trade unionism, the implementation of basic minimum rights

in society. Mr. Weiler looks at the experiences of the Reagan

government and the Thatcher government in terms of how they deal with

trade unionism and how they in some way supplant trade unionism with

the introduction of strong workers' rights — if I can put it that way —

legislation. It's an interesting piece of work.

It's

flawed, I think, by one thing. It's flawed by the notion that even when

you get to the use of legislation like employment standards, it's only,

unfortunately, legislation of last recourse. Very few people use

employment standards legislation, or have the need to use it, when

they're working. They use it, of course, after they've had a negative

experience in the workforce. So there will be a lot of discussion, I

want to tell the minister, during the course of debate on the

employment standards legislation.

There's going to be

discussion, I want to tell the minister, on human rights, because I

think this is where we

part company. I think that the human rights

situation and the legislation and the delivery of that legislation and

the nature of the system that the province has right now are

inadequate. Again, I would have preferred to have seen an announcement

from the minister that there is consideration on the side of government

to begin to deal with the human rights problem.

In question

period today, my colleague from Vancouver East had a very interesting

point with respect to a race-relations problem in Vancouver. I was glad

he made it, quite frankly; in some way, I'd prefer that he would make

it, rather than me from a visible minority. I think it was important

that that point be made in the House, and if he wasn't going to make

it, I would have been quite happy to make it. But the point here is

that we have significant problems with respect to human rights in

British Columbia. It's sad to see that the government is not moving to

deal with that problem in an affirmative way. Part of the

responsibility falls with the Minister of Culture (Hon. Mrs. Johnston),

part of it with the Attorney-General (Hon. S.D. Smith), part of it with

the Minister of Labour, and part of it in the Ministry of Municipal

Affairs. Actually it's across the board, but to the extent that it

falls within the purview of the Minister of Labour, we're going to be

canvassing that. I feel strongly that there are tremendous gaps in

protection and, more importantly, gaps in promotional things like race

relations that the human rights commission should be doing yet is not

doing.

Interjection.

MR. SIHOTA : Some of

the comments that that colleague makes cause me some concern, too. I

read with a tinge of sadness what the member for Burnaby-Edmonds (Mr.

Mercier) had to say about multiculturalism. He doesn't understand the

nexus which can exist between multiculturalism and patriotism.

Bordering on bigotry is the way I would describe his comments.

MR. MERCIER : You or me?

MR. SIHOTA : If he wants to get into the debate in this House on that matter, I would be happy to do so.

[ Page 6896 ]

MR. CHAIRMAN : Pardon me, Mr. Member. We will avoid personal approaches when talking to the minister's estimates, please.

MR. SIHOTA :

Thank you, Mr. Chairman. It was the member who started to heckle. It's

the member who advocated his views; it's the member who can account for

them.

Another area where we are going to

part company,

which I want to spend a fair bit of time on during the course of

estimates, is farmworkers. I raised this in passing during a question

period and a statement period that we had in the House a couple of

Fridays ago. The minister can expect some questions from me on the

absence of protection for farmworkers in British Columbia and the need

for government, through legislative intervention, to provide these

people with the most basic of rights that really....

MR. CHAIRMAN : Mr. Member, we don't discuss legislation when we are talking about the minister's estimates.

MR. SIHOTA :

I understand that, Mr. Chairman. I am in a broad way — as the minister

was laying down in a broad way where his ministry was coming from —

letting him know where we are coming from on the agenda. I am not

talking about legislation; I am talking about farmworkers and Workers'

Compensation Board protection for them. That falls under the purview of

this minister: the funding of appropriate programs for farmworkers in

British Columbia. I don't think that's out of the scope of what is

discussed here.

The point I want to start on is workers'

compensation, and I listened with interest to what the minister had to

say. I chuckled when he said that there is a backlog of 663 cases. I

don't think the minister heard me. I was wondering if they were all in

my riding, because most of us tend to get the feeling that the problems

with the Workers' Compensation Board are far greater than what was

suggested during the minister's comments. We will explore that sometime

later on during the estimates.

Dealing with financial

matters, last year the Workers' Compensation Board announced that it

had accredited back to employers in this province some $99 million. I

think the minister knows that at the time the move was harshly

criticized, and appropriately so. I don't think that that quantum of

money ought to have left the purview of the board.

I want

to ask the minister whether this year there were further credits

provided to employers through the Workers' Compensation Board, in the

same vein as the $99 million the previous year.

HON. L. HANSON :

I appreciate the member opposite giving me some indication of where the

questions are going to come from, and that is probably helpful for good

debate from both sides of the House.

The $99 million that

the member refers to, which I believe is his question, was given as a

result of an overage in a particular classification and was not rebated

but credited so that the assessment had a credit on the account. Then

as charges were added to it, it eventually balanced. As the member

said, that is within the purview and mandate of the commissioners of

the Workers' Compensation Board. There are none contemplated this year

that we have knowledge of at this point.

I think the member

would be aware that each year as the various categories' experiences

are looked at, there are assessments of payroll reductions and

increases as per the experience of whatever that particular segment of

industry is being referred to. While there aren't — I believe this is

the question — any cuts at this moment for that same sort of thing to

happen this year, there have been at the start of the year different

rates established for different classifications according to the

experience.

I would point out to the member, and I am sure

he would understand, that the legislation we have brought forward will

change some of the ways that the policy is formed through the board of

governors. The determination of that policy for a credit in the case of

the assessment would be one the board of governors would deal with when

they are in place. I guess the short answer to your question is that

that isn't anticipated this year.

MR. SIHOTA : The

$99 million came out of various categories, as the minister said;

"various occupation categories" is the way they defined it last year,

if my memory serves me correctly. I think that was in the 1987 annual

report. Will the minister agree with me then that in the 1988 annual

report there is a $14.8 million credit to employers through various

categories as well?

HON. L. HANSON : I think my statement was that that is not anticipated this year.

MR. SIHOTA :

I take it that the minister is confirming that in 1988, in the annual

report filed this year — in 1989, but for the year 1988 — there was

about a $14.8 million credit in about eight employer categories. I

could be wrong in terms of the number of employer categories, but I

don't think there is any dispute that there was $14.8 million.

don't quite understand the policy of the ministry in that regard. I

know that last year my colleague from North Island raised the matter

that under

section 67 of the act, surpluses had to be fed back into the

trust funds that were established. That section, as the minister said

at the time, deals with all surpluses, not a portion of surpluses, and

I take it again that the argument will be the same this year: that we

are dealing with a portion of the surplus. That being the case, I think

it's really taking advantage of the wording of the legislation.

From

a policy point of view, is the minister saying that the determination

of the rebating or crediting of any further surpluses would be left to

the new board to resolve as a matter of policy, assuming that the

legislation goes through?

[ Page 6897 ]

HON. L. HANSON :

It has certainly been my instruction to the acting chairman of the

Workers' Compensation Board not to make any significant policy changes

until we have the structure in place.

I think the member

would agree with the philosophy behind the classification of the

various industries. Those classifications are dealt with as individual

ones. The assessment made at the start of the year is simply a very

educated intelligent guess, if you will, about the amount of claims

that are going to be experienced by that particular segment of

industry. There are, from time to time, requirements to adjust that

assessment rate.

[4:15]

1 look forward to the new administrative process when the board of

governors will be in place. They will have a number of issues to deal

with that relate to policy very early in their mandate. I expect that I

am going to get a number of recommendations from that committee that

would look at a lot of the aspects of the Workers' Compensation Act as

it exists now.

It is difficult for me to comment on what

might happen in the future, because the process is that we are going to

have the representatives of that community of interest — the employers

and the employees — sit in on that policy-making process to thereby get

a consensus on how all of the parties of interest see that the process

can be bettered for all of the people covered by it.

MR. SIHOTA :

Just in case the minister thinks I am sending some very clever note to

get something from a researcher down below, all I did was send down for

throat lozenges.

I was looking at the fiscal 1988 financial

highlights of the Workers' Compensation Board, and I noticed that — I

don't know if the minister has them there for 1988 — the assessment

income for 1988 was about 36 percent higher than, for 1987. What I was

trying to determine when I was reading was whether or not the 1988

figure reflected the $99 million credit — if you can call it that —

that was paid out. The '87 credit, sorry.

HON. L. HANSON :

I think that's what you are referring to. The assessment in '87 was

less because of the almost $100 million credit that was issued That

same credit wasn't there in 1988; therefore the assessment income was

that $100 million difference. I think that accounts for the majority

other than some small increases in assessments for different rate

classifications.

The employment levels in 1988 were much

higher than they were the previous year because the economy of British

Columbia and the number of people working has been higher than it has

in the past Those two factors are the 36 percent difference that you

are referring to.

MR. SIHOTA : I'll tell you what

concerns me. if you factor in that $99 million for 1987, and if you

actually look at it — I don't have the 1986 figure; it would be in the

'87 report — the assessment income for 1986 was $421 million. For 1988,

according to the numbers here, it was $441 million. It would seem to me

that over that time period between '86 and '88, the actual increase in

assessments has really been about 5 percent. First of all, would the

minister agree with that reasoning? The minister nods, yes.

you take a look at the information with respect to claims, in 1988 the

claims rose to $369 million. In 1986, those claims stood at $290

million. Over that two-year time-period, the actual claims increased at

a rate of 27 percent, which of course is a faster rate of increase than

the assessments. That's the nub of my point in terms of my concern.

Again,

if on one hand you're having assessment income going up about 4 percent

and the cost of claims going up 27 percent, they are going almost — I

wouldn't say opposite, but they aren't keeping up with one another.

That's what causes me a lot of concern in the sense that you're

rebating or crediting back some money. You're not keeping up with the

increases through assessment. It seems to me that in the long run, you

may end up inflicting some type of economic harm on yourself by not

keeping some greater level of parallel increases between the two items.

It would be interesting to hear what the minister has to say about that.

HON. L. HANSON :

That's an interesting comment. I suppose that the bottom line of an

operation such as the Workers' Compensation Board is the fact that they

do an actuarial study of the liability that the Workers' Compensation

Board faces from claims and so on. At the end of the year, they measure

that against the assets or surplus that is reserved for that coverage

to determine if the Worker's Compensation Board do have the financial

ability to look after what they see as the claims potentials that are

developed over the years.

I guess about five or six years

ago the Workers' Compensation Board was determined to have an actuarial

deficit in that liability of some $500 million. Through changes in the

assessment and through changes in the benefits that they've received

from the investment income, that liability is determined by an

independent outside audit and is fully funded in the reserves that the

Workers' Compensation Board have. As the statement and the member would

certainly agree, the unappropriated surplus as of December 31 was still

$60 million. That was a slight decline of $18 million or $20 million

from the previous years. I suppose, in that sense, it's gone down a

little bit. It's still an unappropriated surplus that was not needed to

look after the liabilities that the WCB had or as determined by that

actuarial auditing of the WCB's liabilities. I think that the WCB, in

the 1988 year, in the amount of assessments and so on, and its income —

and the bottom line showing that there still is an unappropriated

surplus — has been well managed and well administered.

suppose the member could argue with the method of determining that

outstanding liability, but far be it from me to argue with that method,

because

[ Page 6898 ]

there are professional people who make that determination.

MR. SIHOTA :

As the minister correctly notes, that unappropriated surplus actually

fell. If I can use the BS fund analogy as perhaps another way of

looking at it, you as government have set up a BS fund to try to help

you through rainy days. It seems to me that you could have done the

same through the Workers' Compensation Board. Instead of crediting back

to employers $99 million two years ago and $14.8 million in the 1988

fiscal year, you could have been putting that aside to deal with

increased costs of claims or building up your reserves for rainy-day

years, if I can put it that way, when you're going to have some type of

unanticipated difficulty. You could have used that money to eliminate

some of the capping that you did some years ago on awards made to

workers. All sorts of other options existed.

I don't

understand — and if I'm wrong on this, I'd like to hear where — why the

Workers' Compensation Board did not choose to take that type of

approach here and instead chose to credit the money back to employers.

Or are we just talking about apples and oranges here?

HON. L. HANSON :

Well, that's an interesting theory. I suppose somewhere inherent in

that theory must be an assumption or a suggestion that there was

something not done in the WCB as a result of shortage of funds,

because, obviously, the $99 million credit that was given.... The

member is suggesting it was used for more benefits, or whatever. The

policy of the WCB, I would reassure the member opposite, was lived up

to 100 percent. There was no indication of a shortage of funding in the

year.

Also, the member would have some difficulty in

arguing with the philosophy that the various segments of WCB, or

industry, as they are classified, that stand on their own two feet....

And there are different rates of payroll assessment for different

classes of industry, simply because there is more danger in certain

things than there are in others. With that philosophy in mind, if one

particular segment of industry does have an assessed rate that proves

to be in excess of the actual experience, it seems to me that it's only

a fair process that there be some sort of credit for that.

The

Workers' Compensation assessment establishment, at the start of each

year, is done on the basis of what is expected to happen during that

year. It's done on the basis of the amounts of settlements that may

come forward in that year that happened in prior times. I think that in

an organization that had some $700 million in income, to come out with

a change in its financial position of less than $18 million is not a

bad estimate for the start of the year. I think that's made before the

actual experience is felt.

So I think the WCB does an

excellent job of setting those rates. Those adjustments that come up

from time to time to the various industry rates are the proper way to

be fair in industry paying the cost of the claims that are attributable

to its operations.

MR. CLARK : I want to be

absolutely clear about this. Are you saying that the only people who

received rebates on the WCB were people who had improvements in their

safety record? There was no across-the-board forgiveness or rebate or

reduction in their rates, except for those who enhanced their standing

as an industry, and that's where the rebate went?

HON. L. HANSON :

I would be wrong to stand here and say to the member that there wasn't

some individual operation within a class who had a record that was

better than the previous year, but it's on a class basis, and the class

encompasses a number of different operations. Generally speaking, that

classification would have had an improvement in their safety record,

but not necessarily measuring each individual operation.

MR. CLARK :

You're saying that no class of employers received a reduction unless

that class claim rating went down. Is that what you're saying?

[4:30]

HON. L. HANSON :

Maybe we're talking about the same thing; I'm not sure. The

classification of industry and the collection of the payroll amount

that was assessed against it was in excess of the actual experience, so

there was a surplus — if you will — within that classification as a

result of that assessment.

MR. CLARK : Well, that's a

little different. You're saying that the class therefore exceeded the

expectations of the actuarial consultants who rated that class. It

doesn't mean that they've improved their safety record; it means that

they did better than was anticipated by the consultants. Is that

correct?

HON. L. HANSON : I think, generally

speaking, that's correct. The overall class record was better than

anticipated. As an example, take the forest industry — one we all know

about. If it was anticipated that there would be ABC dollars of claims,

and an assessment on payroll to raise that sort of money proved that it

was higher than the actual experience, then there would be a surplus

created. That particular classification would get the benefit of that

in the rebate procedure.

I might point out to the member,

though, that I don't think that the $99 million, which is the subject

of this discussion, was necessarily created over a one-year period. It

was a surplus that had been gathered in a particular classification for

a period of time.

MR. CLARK : So how many classifications saw increases in their costs as a result of not meeting actuarial estimates?

HON. L. HANSON : I'd be pleased to get that information for the member. I don't have it at my fingertips — or the individual classification.

[ Page 6899 ]

Interjection.

HON. L. HANSON : I can't actually answer that but I would be very surprised if there weren't some increases.

MR. CLARK :

I appreciate that the minister is going to get that information, but I

just want to know whether there were any classifications of industry in

British Columbia that saw their WCB premiums increase in the last year

because the injuries or the claims exceeded the actuarial estimates.

Were there any?

HON. L. HANSON : I'm pleased to

provide that information. I can't say to the individual here now that

that is exactly the case, but I'd be really surprised if it wasn't, and

if there weren't some classifications that didn't have an increase. As

I said, the assessment that starts at the first of the year is a very

educated, scientific process that they go through to come to that, but

it's still an estimate. When that estimate falls short, there is the

requirement for change in rate.

MRS. BOONE : Mr.

Minister, I would like to go on to something slightly different. While

claims are being worked out, and if there's some question on the

claims, and employees have medical expenses, those medical expenses are

paid by both B.C. Medical Services Plan and by private insurance

companies at times. Once the claim is settled and it is acknowledged

and the claimant has had their claim recognized, it is my understanding

that private insurance companies are reimbursed for the moneys they

paid out on behalf of that person while the claim was being settled.

But

it is also my understanding that B.C. Medical is never reimbursed for

the costs that are paid out, for example, for physicians or what have

you. My question to the minister is: is it true that private insurance

companies are repaid moneys paid on behalf of people while their claims

are being worked out, and B.C. Medical is not paid?

HON. L. HANSON :

If I understand the question correctly, the private insurance companies

— if it's a case of disability insurance or something that kicks in

during this process that you're talking about — are reimbursed. But the

health care system is reimbursed also. As a matter of fact, it's

reimbursed by the WCB at a rate that has a larger figure than the

actual Ministry of Health pays, because it includes administration

costs. I'm not sure of the exact figure, but it's higher than the per

them rate paid by the Ministry of Health to a hospital or whatever it

is. It's reimbursed to the ministry at that higher rate.

yes to your first question: private insurers are; and no to your second

question: they are reimbursed. It's not true that they do not get

reimbursement — the Ministry of Health.

MRS. BOONE :

Are they reimbursed then for not just the hospital care but for

physician's care as well, so they are entirely reimbursed — B.C.

Medical — for all procedures, for all care that is given to an employee

during that time?

HON. L. HANSON : The member may not

be aware that the doctors generally bill directly to the Workers'

Compensation Board. In most cases it never even enters the health care

system. If it should enter the health care system, then the health care

system is reimbursed where the WCB accepts liability.

MRS. BOONE :

Would the minister be able to provide me — not today, but at some point

or other — with the dollars that have been reimbursed to B.C. Medical

from WCB?

MR. CLARK : I missed some of the earlier

discussion, and I don't want to go over some of the ground my colleague

the member for Esquimalt-Port Renfrew (Mr. Sihota) has, but the numbers

intrigue me, given the minister's answers to my questions. If I

understand it, the cost of claims went up this year 27 percent. The

premiums went up 4.9 percent. It doesn't seem possible to me that those

increased premiums could have not only covered the 27 percent increase

in claims but covered it to such an extent that reductions to companies

were warranted or justified. In other words, a 27 percent increase in

cost of claims and only a 4.9 percent increase cost of assessments to

pay for the claims. That 4.9 percent increased cost of assessments not

only paid for the 27 percent increase in cost of claims but also paid

for a rebate of $14.8 million to certain classifications of employers.

Intuitively, those numbers don't make sense to me. I wonder if the

minister could explain what appears to be a variance.

HON. L. HANSON :

I think that the member, who is also the finance critic.... Maybe I'm

sparring with an accountant here. I'm not sure what the qualifications

are.

In any case, I think the member would recognize that

investment income is up about $30 million. The WCB is a very

well-funded organization. It has done well on its investments; they've

made some very astute investments. I don't think the member would argue

with the statement — I'm sure he has it in front of him — that shows an

$18 million decline in the unappropriated surplus after the 1988 year

operation. While I wouldn't want to get into a long technical argument

— I'd bring an accountant here — I assume that that audited statement

is an accurate account of the operations of the WCB. My layman's

interpretation is that the operation had a small loss of $18,000 or

something along those lines in terms of income and payments.

MR. CLARK : I assure the minister that in these matters I am a layman as well.

I understand that the minister's argument is that investment income is $30 million, plus you dipped

[ Page 6900 ]

into

your surplus. That doesn't jibe with what you said, which is that

certain companies' claim ratings were down. I don't quite understand.

It seems to me you've paid back money to certain classifications of

employers out of your accumulated surplus and investment income. It

still doesn't quite fit that the cost of claims would be up 27 percent

when you're arguing that claims must have been down for certain

industries to warrant a reduction.

Let me put it another

way. Your actuarial statement would take into account investment and

the assessments. On that basis, they estimated a 4.9 percent increase.

It seems to me that if they estimated a 4.9 percent increase, they must

have either assumed there would be greater than a 27 percent cost of

claims — that must have been in their assumption — or you're playing a

few games and essentially giving a bit of a subsidy or a break to

certain classifications out of your surplus revenue; not out of the

assessment revenue, but out of accumulated surplus over time. They

don't quite match.

HON. L. HANSON : The operations of

the WCB are an ongoing thing. The credit of $14.8 million after the

year-end is complete.... I can see how the member would make that

interpretation, but that $14.8 million was based on particular

classifications of industry that did have a good previous experience.

The WCB auditors, the actuarial people, made the determination that, as

an example, if the rate was $1.80 per $100 of payroll, they only needed

$1.60. Therefore there was a reduction from the previous year's

experience.

Again I go back — and I'm not an accountant —

to the bottom line on the statement that.... I think the member would

have some difficulty in arguing that the Workers' Compensation Board

did not collect from the employers in the payroll program the amount of

money it needed to satisfy the claims it experienced in that year, with

a very slight difference in the real amount, which it could tell after

the year's business was complete, as opposed to the amount it estimated

at the start of the year as being correct.

MR. CLARK : But to use the minister's own words, the bottom line

is that the cost of claims was up 27 percent, and premiums were only increased

4.9 percent. It seems to me that giving a rebate to certain classifications

doesn't seem warranted by the net result, when the net result is a 27 percent

increase in the cost of claims. That's pretty dramatic: a 27 percent increase

in the cost of claims last year. I would assume that a lot of that has to do

with the fact that the economy has picked up, and that means there were more

claims; but the reality is that something doesn't quite jibe.

The

minister said: "Well, nothing has happened at the WCB. Nothing has gone

for want because of lack of money." I would dispute that, by the way.

think almost every MLA — I certainly speak for Vancouver East — gets

dozens of WCB complaints. I know the member for Vancouver South must

get complaints about the WCB in his constituency office.

Given

that, with respect to dealing with that very important agency, it seems

to me that money could be used to improve services to injured workers

and to cut down the waiting time for appeals on any variety of matters.

In spite of that, I can't escape the conclusion that what you've done

is to take money out of the surplus and give it, essentially as a tax

break, to certain classifications of industry.

[4:45]

One option, by the way, would have been not to do that, but to

increase it dramatically on those who have found the reverse. In other

words, those who have done well in their injury rate would see no

increase, and those who have done worse would see an increase. It

doesn't matter how you cut it. It's a $14.8 million tax break to

certain classifications of industry that doesn't seem to be warranted,

based on the 27 percent increase in the cost of claims, and it is

really taken out of the WCB surplus.

I appreciate the logic

that the minister is trying to convince us with, and I understand the

logic that those who have more injuries should pay more. But it seems

to me that at the current time, the money could have been better used

for other things. In fact, there is clearly a dramatic increase in the

cost of claims and no corresponding increase in premiums; therefore the

money had to come out of the surplus. Eventually that means that money

is going to continue to come out of the surplus. If costs of claims

continue unabated — and presumably they will — there will have to be

some adjustment down the road, to use the bottom line as the bottom

line. You can't continue to take out of surplus to pay back to

employers. I think it would have been more prudent to keep the money,

penalize those whose injuries have gone up, and use that money to

improve services to injured workers than to give rebates to certain

classifications of industry.

HON. L. HANSON : That's

certainly an interesting argument that the member puts forward. I'm not

sure if the member is saying that we should have kept that $14.8

million in there and somehow distributed it among the claimants. In the

scope of the volume of dollars the WCB goes through, I think their

assessment of what the rate should be at the year-end was pretty darned

accurate.

I hope the member is not suggesting that any

worker got less in the settlement of his claim last year because the

$14.8 million....

Interjection.

HON. L. HANSON :

I'd point out to the member that there is about a $140 million reserve

for stabilization of rates, plus that $60 million there, so I have some

difficulty in accepting your argument.

MS. MARZARI :

I would like to address for a moment the problem of domestic workers.

It is a problem that domestic workers have. These are a class of

workers who are almost exclusively women and often go under the name of

"nanny, " meaning

[ Page 6901 ]

that they basically raise children and tend other people's houses in our communities.

They

have largely been ignored by the legislation that we presently have in

place, and it is important to note that there are a goodly number of

them in B.C. It's not a number that we can readily identify or

tabulate, but the Canadian Advisory Council on the Status of Women

suggested that in 1983 there were 35,000 women in Canada who came to

Canada under temporary work permits, and more than half of these were

destined for some kind of service occupation. That would make them

live-in domestics in private homes.

Based on '81 census

data, we can extrapolate that 48,000 women were employed as domestic

workers, and that would suggest we take one-tenth of that number for

B.C. That very often is the case when we are extrapolating other social

service expenditures, costs, population and demography of the country;

we should be looking at one-tenth of that number. That would suggest

that we have as many as about 5,000 domestic workers — overseas and

local women — working in B.C. as domestics and nannies.

What

is interesting is that their jobs are so invisible and that very often

they suffer serious harassment, a serious, chronic shortage of dollars

and poor working conditions. Poor working conditions are hard to

imagine in the lovely homes in my own riding, but it is true. The

complaints have piled up in an invisible working population. These

complaints, although they are there and I have heard them, are few and

far between because the women themselves are very reluctant to take

complaints against their employers for fear of losing their status in

this country as landed residents or for fear of losing their jobs for

good, because they are largely untrained.

They are excluded

from protection under the employment standards legislation largely,

although they do have some minimum rights. In British Columbia I am

told that provincial legislation distinguishes between live-in and

live-out domestic workers. Live-out domestic workers are entitled, I

gather, to the protections of all the regulated areas in provincial

employment centres legislation. Domestics who live in are defined

specifically as persons who reside in private residences, or they are

persons employed by an agency engaged in providing homemaking services

on a 24-hour basis.

These workers are excluded from the

hours of work and overtime pay provisions and are covered by a special

minimum wage which happens to be lower than the general minimum wage. A

nanny who is hired exclusively to care for children and who has no

housekeepi