1979 Legislative Session: 1st Session, 32nd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JUNE 27, 1979

Afternoon Sitting

[ Page

415 ]

CONTENTS

Routine Proceedings

Oral questions.

Oil Price increase. Mr. Barrett –– 415

Pesticide controls. Mr. Howard –– 416

Free bus passes. Mr. Cocke –– 416

B.C. Government News. Mr. Macdonald –– 417

Denman Island subdivision. Ms. Sanford –– 419

Committee of Supply: Executive Council estimates.

On vote 6.

Mr. Levi –– 419

Hon. Mr. Bennett –– 419

Mr. Barrett –– 421

On vote 7.

Mr. Barrett –– 422

Hon. Mr. Bennett –– 422

British Columbia Resources Investment Corporation Amendment Act, 1979 (Bill 12).

Committee stage.

On the amendment to

section 2.

Mr. Barber –– 422

Mr. Leggatt –– 423

Hon. Mr. Bennett –– 423

Mrs. Wallace –– 424

Hon. Mr. Bennett –– 425

Mr. Howard –– 426

Mr. Levi — 427

Mr. Barber –– 428

Division — 429

On the amendment to

section 3.

Mr. Barber –– 429

Hon. Mr. Bennett –– 429

Mr. Howard –– 429

Hon. Mr. Bennett –– 430

Mr. Levi –– 430

Hon. Mr. Bennett –– 430

Mr. Howard –– 430

Hon. Mr. Bennett –– 430

On the amendment to

section 4.

Hon. Mr. Bennett –– 431

On the amendment to

section 5.

Hon. Mr. Bennett –– 431

section 7.

Hon. Mr. Bennett (amendments) –– 431

On the amendment to

section 7. (Mr. Levi)

Mr. Levi –– 431

Hon. Mr. Bennett –– 431

Mr. Howard –– 431

Hon. Mr. Bennett –– 432

On the amendment to

section 7 (Mr. Leggatt)

Mr. Leggatt –– 432

Hon. Mr. Bennett –– 433

On the amendment to

section 7 (Mr. Leggatt)

Mr. Leggatt –– 433

Hon. Mr. Bennett –– 434

Division –– 434

On the amendment to

section 7 (Mr. Leggatt)

Mr. Leggatt –– 434

Hon. Mr. Bennett –– 434

Mr. Barber –– 434

Division –– 434

On the amendment to

section 7 (Mr. Leggatt)

Mr. Leggatt –– 435

Hon. Mr. Bennett –– 435

On the amendment to

section 7 (Mr. Stupich)

Mr. Stupich –– 435

Hon. Mr. Bennett –– 435

Mr. Leggatt –– 436

Division –– 436

On the amendment to

section 7 (Mr. Howard)

Mr. Howard –– 436

Hon. Mr. Bennett –– 437

On the amendment to

section 7 (Mr. Stupich)

Mr. Stupich –– 437

Hon. Mr. Bennett –– 437

On the amendment to

section 7 (Mr. Levi)

Mr. Levi –– 437

Hon. Mr. Bennett –– 438

On the amendment to

section 7 (Mr. Barber)

Mr. Barber –– 438

Hon. Mr. Bennett –– 439

Mr. Leggatt –– 439

Division –– 439

section 8.

Mr. Howard –– 440

Hon. Mr. Bennett –– 440

On the amendment to

section 11 (Mr. Barber)

Mr. Barber –– 440

Hon. Mr. Bennett –– 440

Report and third reading –– 441

Presenting Reports

B.C. Ferry Corporation annual report.

Hon. Mr. Fraser –– 441

Special Committee on Selection report.

Hon. Mr. Curtis (see appendix) –– 441

B.C. Development Corporation annual report.

Hon. Mr. Phillips –– 441

Appendix –– 442

WEDNESDAY, JUNE 27, 1979

The House met at 2 p.m.

Prayers.

HON. MR. VANDER ZALM: Mr. Speaker, I

ask the House to welcome the former mayor of Duncan for six years, now

a resident of Nanaimo and a long-time friend of mine, Jim Quaife.

HON. MR. WILLIAMS:

Mr. Speaker, there are three generations of my family in this House

today, and I would like you to welcome my wife Marjorie, our

daughter-in-law Diane, my son Louis, my grandson Scott — and me.

HON. MR. NIELSEN:

Mr. Speaker, the person I would like to introduce to the House today

spans three generations in his own lifetime, but doesn't have any of

the family with him. We have a distinguished member of the media with

us today, who makes infrequent visits to the capital. Seated among the

members of the press is the news director and commentator from radio

station CKWX, Vancouver, Mr. Roy Jacques.

HON. MR. MAIR: This seems to be media day. With us today in the members' gallery is Mr. Jack McMahon, general manager of the Nanaimo Times , and its well-known publisher, Mr. Stanley Burke. Would the House make them welcome.

MS. SANFORD:

I would like to introduce to the House today Bill Moncrief, mayor of

Cumberland, and Bill Moore, mayor of Courtenay, who on occasion takes

the Leader of the Opposition fishing in the Courtenay area. Sometimes

the fishing expeditions are successful.

MR. STRACHAN:

I would like the House to welcome Mr. Gary Willison, who is an

outstanding contributor to education in our province and a

representative of the British Columbia School Trustees Association,

MR. REE:

We have in the gallery this afternoon a very strong supporter of mine,

who was responsible for erecting all the signs and keeping them up

during the campaign. Would the House welcome Mr. Ian Naylor?

MR. SMITH:

I would like to welcome to the House today a resident of Huntington

Beach, California. Mrs. Anne Harrington, who was a resident of Victoria

for many years and who is also the aunt of one of our Pages, Gail

Abbott.

MR. SEGARTY: In the Speaker's gallery today

are Ian and Suzanne Turner. Mr. Turner is well known in the Cranbrook

area. He's the clerk of the city of Cranbrook; he's also chief of the

small kingdom between the Alberta and British Columbia borders. He's

known in the area as Rex Wifukitsak. Would the House welcome them?

Oral Questions

OIL PRICE INCREASE

MR. BARRETT: Is the Premier aware that the oil price increases slated

for British Columbia will take the gasoline pump price to approximately $1.15

by the end of this year? Legislation was passed in 1973, through the B.C. Energy

Commission, to control gasoline prices in British Columbia. Will the Premier

take any action to stop this dramatic gasoline price increase in the province?

HON. MR. BENNETT:

The national energy policy of the federal government is to gradually

move Canadian petroleum product prices closer to world prices. A number

of staged increases have come in to prevent the subsidies of the

producing provinces — that is, Saskatchewan, Alberta and British

Columbia. With the price of their energy they subsidize the rest of the

country. The producing provinces have more to gain than to lose in

moving towards this price level.

As you know, the First

Ministers last year agreed to hold off the proposed January 1 increase

as part of an agreement to contain prices. It was then agreed to by

this unilaterally, to continue with the gradual price rise. No

interference with this is planned by British Columbia.

MR. BARRETT:

The Premier says that the federal government can impose prices

unilaterally, and because of this there is no interference. Is it not

true that British Columbia has the power to interfere in this

"unilateral" decision by the federal government?

HON. MR. BENNETT: Mr. Speaker, the one way we could hold the price would be to subsidize the prices, but we're not planning to do that.

MR. BARRETT:

On April 13, 1976, the former Minister of Energy, the member for North

Vancouver (Mr. Davis), said: "The fact that the federal government has

permitted an increase in gasoline prices doesn't necessarily require

that the provincial government authorize a similar increase." There was

a federal supreme court decision in this regard back in 1940. The

Premier has indicated he does not intend to interfere with this price

rise. In the future, if there are dramatic increases in gasoline

prices. will there be intervention by the government of British

Columbia to stop a dramatic continuation of increases? You've said no

to this one increase. What about the future?

HON. MR. BENNETT:

The province would always be prepared to prevent unwarranted increases,

but not as part of a national economic strategy, and not in those areas

where the only alternative would be government subsidy.

MR. BARRETT:

On a supplementary, Mr. Speaker, on what criteria has the Premier made

the decision not to interfere with this increase that's scheduled for

the fall'?

HON. MR. BENNETT: The decision was taken

at the last First Ministers' Conference, unanimously with the other

First Ministers, on the information available, and that was that the

producing provinces were losing substantial amounts of money. In fact,

you wouldn't have to give away the constitutional rights to your gas

and oil if you allowed it not to get full value for it and subsidized

the other provinces. This is a movement toward world prices which, in

part, service our country.

[ Page 416 ]

Right

now the western provinces are subsidizing to a large degree the rest of

Canada's fuel prices. My alternative to this is not to have any one set

of people, with their resource, subsidizing another. That would be like

asking us to subsidize the rest of Canada on their lumber prices, and

I'm not prepared to do that. The full value for that resource comes to

the people of British Columbia. Anyone who argued differently would be

arguing for that sort of program; that's not practical.

PESTICIDE CONTROLS

MR. HOWARD:

I'd like to ask the Minister of Environment when he will be able to

announce the effective date of the regulations which, I understand, are

currently being drafted to exempt from the provisions of the Pesticide

Control Act those who contract to spray pesticide such as Tordon and

2.4-D on private land. Can the minister say when he'll be in a position

to announce the effective date of those regulations?

HON. MR. MAIR:

It's very difficult to answer something in the future. It has not been

discussed by the government, so I can't even tell you when that will

happen, much less when any regulations may or may not be passed.

MR. SPEAKER: The hon. minister should be aware that the question was really not an answer, but I must recognize him when he stands.

MR. HOWARD:

Would the House be correct in understanding that the minister and the

government have no intention of putting into effect such regulations?

HON. MR. MAIR:

Mr. Speaker, I recognize that that question is clearly out of order.

But if I told the member that there is a case before the courts on the

very point that he is talking about now, the result of which we are

awaiting before we suggest to the government any course of action,

perhaps that would help him with the quandary he finds himself in.

MR. HOWARD:

Is it not correct that the counsel representing the government plans to

agree to an extension in that case before the courts in order that the

regulations may be drafted?

HON. MR. MAIR: Mr. Speaker, I don't know.

FREE BUS PASSES

MR. COCKE:

Mr. Speaker, I would like to direct a question to the Minister of Human

Resources. Prior to the last election the minister sent out a letter to

a number of people which said: "Enclosed is your bus-pass application

form." Then she went on to tell people that the bus-pass program

sponsored by the Ministry of Human Resources provides pass holders with

free transportation on metropolitan buses in Vancouver and Victoria.

The

person writing to me indicates that he is not very happy about that and

encloses a cancelled cheque for $5, which was cancelled by the Ministry

of Finance, in payment for this bus transportation. Why would the

minister talk about free transportation and why, particularly, just

before an election?

HON. MRS. McCARTHY: Thank you for

bringing this question to the House. I would like to respond by telling

the member that I have frequent communications with people within my

ministry, and not just before or during an election campaign. That is

not the first of such letters that have gone out to recipients.

also would like to say that a member of our ministry made an

unfortunate error. The error was caught and only a few hundred of those

letters with that erroneous information were sent out. We apologize to

those who drew it to our attention and we are sorry that that happened.

Human errors happen in Human Resources, and unfortunately the erroneous

information was sent out. I don't think the letter created very much

difficulty. It was explained to those who drew it to our attention very

early. There were just a very few that went out before the ministry

realized the error of their ways and corrected it.

MR. COCKE:

"Nothing is freer than free, my friend!" But, Mr. Speaker, the letter

goes on to state that all this lucky recipient of the letter must do is

write back and they can get a "Good Times '79" traveller's cheque book.

"Please feel free to write me at the parliament buildings." The

minister cannot let go of that old portfolio. Mr. Speaker, is she

ambitious and does she want to get back to travel industry?

MR. SPEAKER: Really, the question is not in order.

HON. MRS. McCARTHY:

Mr. Speaker, I'm very pleased to give an answer to the out-of-order

question. May I just say to all of those recipients of either income

assistance or GAIN that we feel that all of the services of government

that are provided, either by virtue of a service or by the travel

industry minister, or by the Minister of Agriculture, the Minister of

Economic Development or whatever.... Anything that should be available

and could be available should be mentioned to them, and that was put in

among other things that were available in the way of services. I might

add, Mr. Speaker, that I had a very good response from that letter. I

had very many senior citizens write, and many today are travelling and

taking advantage of that program throughout the province.

MR. COCKE: Why would the minister have signed the letter when it was erroneous?

MR. SPEAKER: I think that's self-explanatory.

MRS. DAILLY:

I have a supplementary on the letter and the reply the minister gave

regarding the handing out of the "Good Times" booklet, which she said

is available throughout the different ministries, I wonder if she could

then explain why the "Good Times" booklets were available only to

Social Credit candidates to hand out during the election period?

HON. MRS. McCARTHY:

As you know, government issues and government material are available to

all members of this House and all members of the public. As for the

distribution of same, that question should be properly asked of the

Minister of Tourism and Small Business Development.

[ Page 417 ]

B.C. GOVERNMENT NEWS

MR. MACDONALD:

This question is to the Provincial Secretary, Mr. Speaker. I asked a

question about the B.C. Government News and sent him a little note

asking that it be made available for the Premier's estimates yesterday.

At 11:03 last night the minister characterized it as an arrogant demand

on my part. Is it the attitude of his ministry that requests of elected

members for public information constitute arrogant demands?

HON. MR. CURTIS:

Mr. Speaker, I'm a quiet man, though the opposition find that funny.

I'm a quiet man, and I have never spoken to any member of this House in

the way the member for Vancouver East spoke to me last night. I will

not respond to arrogant demands or to intimidation in this House or in

this corridor with respect to answering a question.

MR. SPEAKER:

Order, please, hon. members. Matters pertaining to activities outside

of this chamber are not necessarily of interest to the chamber.

MR. MACDONALD:

Mr. Speaker, I am going to ask the minister if he will file the

question and leave aside all this business. You say the answer's

readily available.

HON. MR. CURTIS: Mr. Speaker, I don't have the information in the House today.

Interjections.

MR. SPEAKER:

I would remind the hon. member for Vancouver East that we can ask

questions in this chamber. We can even anticipate answers, but we

cannot demand answers.

HON. MR. CURTIS: On a point of

order, Mr. Speaker, the second member for Vancouver East (Mr.

Macdonald) has quite clearly on two occasions this afternoon accused me

of a cover-up. I ask him to withdraw that most irresponsible accusation.

MR. SPEAKER: Would the second member for Vancouver East please withdraw.

Interjections.

[Mr. Speaker rose.]

MR. SPEAKER:

Has the second member for Vancouver East no regard for the standing

orders of this chamber? Order, please! There has been a clear request

for withdrawal of the word "coverup," which has been found to be

offensive. I ask, in the sense of good humour which normally occupies

this chamber, that the member please withdraw the word "coverup. "

[Mr. Speaker resumed his seat.]

MR. MACDONALD:

Mr. Speaker, what words can I use to describe a minister who has

information readily available and has so stated, and refuses to give it

to an elected member?

MR. SPEAKER: Order, please.

MR. MACDONALD:

Mr. Speaker, there is another side to the coin, and that is the

public's right to know, and that should be respected in this chamber

also. I think the word "suppression" or — "coverup" are perfectly in

order.

HON. MR. CURTIS: You cannot intimidate any member of this House, and that's what you are doing. You should know better.

AN HON. MEMBER: He went berserk.

HON. MR. CURTIS: I'll say he did.

[Mr. Speaker rose.]

MR. SPEAKER: Hon. members, may I please read for you from standing order 19:

"Whenever

any member shall have been named by Mr. Speaker, or by the Chairman of

a Committee of the Whole House, immediately after the commission of the

offence of disregarding the authority of the Chair, or of abusing the

rules of the House by persistently and wilfully obstructing the

business of the House, or otherwise, then, if the offence has been

committed by such member in the House, Mr. Speaker shall forthwith put

the question, on a motion being made, no amendment, adjournment, or

debate being allowed, 'That such member be suspended from the service

of the House'; and, if the offence has been committed in a Committee of

the Whole House, the Chairman shall forthwith suspend the proceedings

of the Committee and report the circumstances to the House; and Mr.

Speaker shall, on a motion being made thereupon, put the same question,

without amendment, adjournment, or debate, as if the offence had been

committed in the House itself."

Hon. members, I have been

watching the decorum of our House, a House of which we are all proud,

and I have seen, with some dismay, a degradation of the same. I

recommend to all members that we should perhaps reflect for a few

moments on our reasons for being here and on the standing orders that

have been put in place because of the experiences of this House in the

past. We should commit ourselves to the standing orders which alone can

guarantee that business can be conducted in an orderly fashion.

I recommend these to you, hon. Members, and trust that I will have your commitment.

[Mr. Speaker resumed his seat.]

SOME HON. MEMBERS: Withdraw!

MR. SPEAKER:

Order, please. The question has not been resolved. There was an

offensive remark made related, as I recall, to "coverup," and I ask

the hon. second member for Vancouver East to please withdraw.

MR. NICOLSON:

On a point of order, on page 111 of Beauchesne it says that since 1958

it has been ruled parliamentary to use certain expressions. and

"coverup" is mentioned there in reference to the debates of the House

[ Page 418 ]

Commons,

November 16, 1977, page 941. In order that we might keep good temper in

this House, Mr. Speaker, I would perhaps just suggest some reference to

those debates. I don't pretend to know exactly what was said by the

Speaker of the House at that time, but this could perhaps be referred

to before proceeding.

MR. SPEAKER: I refer the hon.

member to page 105 to what we might call a headline to those very

words. It seems to me that subsection 2 says: "Since 1958 it has been

ruled unparliamentary to use the following expressions." I thank the

hon. member for drawing that to my attention.

MR. NICOLSON:

On page 110 of the fifth edition, under subsection 3, it says: "Since

1958 it has been ruled parliamentary to use the following expressions:

"arrogant, ashamed, aspersions, black sheep, blackmail, change,

clownery, coverup...." It's another alphabetical listing. It just happened

I was passing the time of day in reading this a couple of days ago —

just a sheer stroke of luck and inspiration.

MR. SPEAKER:

I thank the hon. member. The practice of this House has been,

regardless of what happens in other Houses — as some new members have

learned since arriving here — that the practice is established by the

precedents of this House itself. Since I have observed the proceedings,

whenever a remark which has been found to be offensive has been asked

to be withdrawn, the request has usually been complied with. I would

ask the hon. member, now that the heat of the debate is over, to please

withdraw the phrase.

MR. MACDONALD: Perhaps you could

also rule on the accusation the minister made against me, which doesn't

really bother me at all, that I was guilty of intimidation and an

arrogant demand — which he just said — in asking for public information

which he said was readily available. What about that? Is that worse

than my saying he is suppressing the information deliberately?

MR. SPEAKER:

I would suggest that perhaps if the phrase was found offensive on both

sides of the House, we could clear up the matter by withdrawal on both

sides, and we could then proceed with the business. May I ask the

second member for Vancouver East to withdraw?

MR. MACDONALD: I want to know what the answer is on the first one. If he's going to withdraw, I will; but not otherwise.

Mr.

Speaker, we're having a fairly good time, but there's a very essential

principle involved here and that's the right to have public information

put on the table and not deliberately delayed. While we're all in a

good humour about it, I'll stand by that principle. Now if the minister

is ready to withdraw "it's intimidation and an arrogant demand to ask

for it," I might reconsider my position; but otherwise no.

MR. SPEAKER: The member refuses to withdraw?

MR. MACDONALD: Yes.

MR. SPEAKER:

The Chair has no alternative but to order the second member for

Vancouver East to withdraw the phrase "coverup." Does the member

withdraw?

The member does not withdraw.

I ask the member the second time: will he withdraw?

MR. MACDONALD: No, Mr. Speaker.

MR. SPEAKER: The member does not withdraw.

I ask the member a third time: will he withdraw the phrase "coverup"?

MR. MACDONALD: No, I'm sorry, Mr. Speaker, I can't do that. I think that's what's happened. I have to say it.

MR. SPEAKER:

Under standing order 19 the Chair would entertain the motion that such

member be suspended from the service of the House. Is there such a

motion?

HON. MR GARDOM: I move that Mr. Macdonald,

the second member for Vancouver East, be suspended from the service of

the House for one sitting day.

Motion approved on the following division:

YEAS — 29

Waterland

Nielsen

Chabot

McClelland

Williams

Hewitt

Mair

Vander Zalm

Heinrich

Ritchie

Strachan

Brummet

Ree

Segarty

McCarthy

Phillips

Gardom

Bennett

Wolfe

McGeer

Fraser

Jordan

Kempf

Davis

Davidson

Smith

Rogers

Mussallem

Hyndman

NAYS — 21

Barrett

King

Stupich

Dailly

Cocke

Lea

Nicolson

Lorimer

Leggatt

Howard

Levi

Sanford

Skelly

Lockstead

Brown

Barber

Wallace

Gabelmann

Hanson

Mitchell

Passarell

Division ordered to be recorded in the Journals of the House.

MR. SPEAKER: Hon. members, since this is a procedure that is

not really common to the House, and it is the first time that I have

had to carry through this procedure since my coming to the Chair, I

would just like all members to know that it is appropriate. As a matter

of fact, Beauchesne provides that it is in order that the member under

question should withdraw from the room, and I'm delighted to see that

the hon. member did follow suit.

I am advised that before we

went into this exercise the time for question period had expired. There

was one further matter that I must care for and that was....

[ Page

419 ]

MS. SANFORD:

On a point of order, Mr. Speaker, this relates to the information that

you have received with respect to the end of question period. I was on

my feet seeking the floor well before the point of order took place,

and had I been recognized at that time I would have been allowed to

proceed with my question before the Clerk would have rung the bell to

indicate the end of question period. I'm wondering, Mr. Speaker, if, in

view of that, we could have an extension of question period.

MR. SPEAKER: Shall leave be granted for the one question?

Leave granted.

MR. SPEAKER: So ordered, immediately following the statement which you interrupted, hon. member.

were asking for a withdrawal from both sides of the House. The second

part I must carry through with, and I ask the hon. Provincial Secretary

to please withdraw the offensive phrases which he used.

HON. MR. CURTIS:

Mr. Speaker, I think that it would be appropriate for me to withdraw,

but to make it clear, sir, that intimidation in the corridor is not

acceptable as far as I am concerned.

MR. BARRETT: Mr. Speaker, that is not an unconditional withdrawal.

MR. SPEAKER: Order, please. I think it was an unconditional withdrawal.

MR. BARRETT: Mr. Speaker, that wasn't an unequivocal withdrawal.

MR. SPEAKER: Order, please. I ask the hon. member if it was an unequivocal withdrawal.

HON. MR. CURTIS: Yes, Mr. Speaker.

DENMAN ISLAND SUBDIVISION

MS. SANFORD: Mr. Speaker, I thank the House for allowing question period to extend beyond the point of order that we were dealing with.

question is to the Minister of Transportation, Communications and

Highways. Have the minister or any of his senior officials met with

Peter Rainsford or any of his representatives concerning the Seaview

Land Estates subdivision on Denman Island?

HON. MR. FRASER:

Mr. Speaker, I certainly haven't, to my knowledge, and I don't know

whether my senior people have or not. I'll have to take that part of the

question as notice.

MS. SANFORD: Mr. Speaker, a new question then. I'm wondering if the minister....

MR. SPEAKER: Order, please. A clarification: if the question was taken

on notice we can't take a supplementary, and I think leave was granted for

only one question. Shall leave be granted for this extra question?

SOME HON. MEMBERS: No!

MR. SPEAKER: I hear several noes, hon. member.

MS. SANFORD: Mr. Speaker, I'll save it till Tuesday.

MR. KING:

On a point of order, Mr. Speaker, I would like to ask leave of the

House to correct the statement which I made last night during the

course of my speech.

Leave granted.

MR. KING:

I would like to thank the hon. member for North Peace River (Mr.

Brummet) for drawing it to my attention, along with a number of other

people. In giving statistics from the Ministry of Labour review I

referred to the work force of the year 1973 as being 1,200,000; the

figure should have been 1,020,000. And I referred to the year 1974 as

being 1,600,000 when, in fact, it should have been 1,060,000. I would

like the House to note that.

Hon. Mr. Mair tabled the annual report of the Provincial Agricultural Land Commission for the year ending March 31, 1979.

Orders of the Day

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

ESTIMATES: EXECUTIVE COUNCIL

(continued)

On vote 6: Premier's office, $245,047 — continued.

MR. CHAIRMAN:

Just before I recognize the first member, the members have had several

dissertations from the committee in the last day of debates, but I

would refer to a standing order which does stick to relevance. I would

hope, perhaps, as this particular estimate has taken some time, that we

could stick to things of relevancy and avoid the poetry. Please

continue.

MR. LEVI: Mr. Chairman, just so you have an

idea what I'm going to be doing, I just want to cover three items: the

issue of freedom of information — I'd like to get some answers from the

Premier on that; the question of investment; and a general question on

the proceedings that took place during the election in respect to

advertising.

I want to just say to the Premier that his

apparent refusal to make available the Schroeder report is not in

keeping with the spirit of his intent to do something about freedom of

information.

HON. MR. BENNETT: I've got an answer on the Schroeder report.

MR. LEVI: Okay. Do you want to give the answer now?

HON. MR. BENNETT:

Mr. Chairman, regarding the questions on the Schroeder report, this

report examined in some detail the Vancouver Stock Exchange and the

investment community in British Columbia. The report,

[ Page 420 ]

having

been received by the ministry, is being utilized by the Ministry of

Consumer and Corporate Affairs to assist government in modifying, if

necessary, the procedures involving the Vancouver Stock Exchange. The

Schroeder report is not an end unto itself but is a research tool and

will be released after it has been studied by the ministry and

recommendations have been brought to cabinet. The government may

introduce either regulations or legislation, depending on the

considerations of the report. It will be made public after that time.

MR. LEVI:

I thank the Premier for the response. I'd just like to say that last

year, during the debate on his estimates, he was asked a question by

the former member for North Vancouver–Capilano about the availability

of information — in fact, the topic of freedom of information. The

Premier did say on May 12 — it's in Hansard , page 340 — that

"some areas on freedom of information have been a direction in which

the government is moving." At that time he was making reference to the

quarterly reports. Later on he said: "A number of other areas are being

looked at. What we do need is freedom of information between

governments." He was then going on to talk about the problem of getting

information from the federal government.

However, we've had

some difficulty in terms of getting information. Now in respect to the

Premier's statement about the Schroeder report, I'd like to just quote

from a statement that was made by the former Minister of Consumer and

Corporate Affairs (Hon. Mr. Mair) on May 31, 1978. I had asked him at

that time about the Schroeder report, which was a capital market study,

and he said:

I'm not at liberty to go into great detail on

the matter, but let me just give you this answer. They've given us a

number of drafts from time to time as to what they've been doing and

the conclusions they've reached. In so doing, in the eyes of the

Ministry of Economic Development and our ministry, they have identified

new problems. We have asked them to go into these problems and to

identify them and to report upon them before they give the final

report. That is the reason that it's going to take a little time,

longer than we anticipated. It's an extremely detailed report. I think

it's a comprehensive report that certainly matches our original hopes.

If it doesn't exceed them. So I think, all in all, we are better served

in the government, in the province and in this Legislature to give a

little more time to go into the matter in great detail than to ask them

to come in with an interim report at this time.

Now this was

over a year ago. The reason I raise the matter of the Schroeder report

is because the Schroeder report did not just deal with the Vancouver

Stock Exchange. At that time there was a desire by the government and

apparently by the investment community in British Columbia to look at

all of the facets of investment in the province. I'm aware that there

was some concern expressed about the Vancouver Stock Exchange because

shortly after, I think, almost on the same day that there was a CBC

show called "Connections" which dealt with some aspects of the

Vancouver Stock Exchange, the minister announced that there would be an

inquiry. The minister, of course, had prior knowledge because he'd

evidently seen a screening of the show. Okay, that's on the Vancouver

Stock Exchange, and we've heard from the Vancouver Stock Exchange that

they have been tightening up their procedures. That's okay; they

presumably have been.

But as for the other aspects of the report, it would seem to me that it would

be in the interest of the government to make those available. That is the whole

question of the investment climate and the investment field in the province.

That's basically what I've been asking for in respect to the releasing

of the report. The report is a costly one; it cost at least $125,000. I was

extremely sceptical when we were told last year that the government needed time

to took at it. All sorts of things went through my mind as to whether they wanted

to censor it, or whether they worried about what information was in there. Quite

obviously there is some information in there about the investment climate, which

is a bit of a problem, perhaps, to the government, and they haven't released

it. However, it would seem from the statement made by the Premier that we're

going to wait quite a long time. If it's a question of reflecting what goes

on on the Vancouver Stock Exchange, we're probably going to be looking at

possibly some amendments to their Act, and also some amendments to the Securities

Act. That's not likely to take place this year. So it may very well be that

we won't get access to that report.

That,

Mr. Premier, is not in the spirit of the feeling of freedom of

information which you expressed last year, that we want to move towards

freedom of information. While I don't want to reflect on a decision

that was made in the House just previously, again there was a

discussion about the obtaining of information.

Now I just

want to go to the other side of the question of freedom of information,

and this really relates to the kind of thing that took place in the

election. In order to illustrate for the Premier the kind of mixed

problems that he and his party seem to have, I want to just point out

this particular advertisement that appeared on May 9 in the Victoria

Times and numerous papers around the province in which it said: "The

NDP doesn't want you to vote in the May 10 election. " It's put out by

the committee to re-elect sensible government. The information talks

about why the NDP doesn't want us to vote.

Part of the

problem they don't mention in here is the problem that I hope we're

going to deal with sometime this session, and that's the problem of the

mess that was made during the election in terms of the enumeration. The

Premier must be held responsible for the mess because he is the

individual that makes the decision about when the election will be

called, and it's his responsibility as the First Minister of the Crown

to see that the election machinery is in good order. Having been in

government well over three years, one would have thought that he would

have put it in good order. I was particularly annoyed myself in respect

to the riding that I run in, a riding....

MR. CHAIRMAN:

Order, please. Hon. member, just in keeping with our standing orders,

perhaps that line of debate would be better addressed to the estimates

of the Provincial Secretary, under whose particular purview this matter

comes. Admittedly, all ministers are responsible to the First Minister,

but the particular matter is perhaps addressed best under the estimates

of the Provincial Secretary.

MR. LEVI: I'm not

dealing with the mechanics of enumeration, Mr. Speaker. I'm dealing

with the function of the Premier to direct his ministers to do

particular work, particularly with respect to the Elections Act. After

all, he is the one that calls an election. One presumes that he has to

say to the person in charge of that Act: "Is everything ready? Are

people going to have access to the polls? Is the

[ Page

421 ]

democratic process going to be fully accomplished by everybody in the province?" In other words, is everything in order?

After

all, we did hear from the Premier in 1976 that we were going to get a

revision of the Provincial Elections Act, we were going to get an

election expenses Act. We didn't get any of this. But we must have a

concern about this. After all, he's the First Minister of the Crown. He

has to be able to direct his ministers in this respect. That's mainly

what I'm saying. That's his function. He is the one that is privy to

the decision to be made as to whether to go to an election.

MR. CHAIRMAN:

Hon. member, if I were to accept that line of argument, then I would

accept the fact that the Premier can answer questions for every

minister on every subject that all ministers are responsible for.

Within

the realm of the Premier's personal responsibilities, it's well in

order. I know you appreciate the role and the position of the Chairman,

so you will conduct yourself accordingly.

MR. LEVI: I

don't want to get into a debate with the Chairman. He's right, he wants

to keep order. The main thing is that the only person in this House who

is responsible for calling elections is the Premier, and we're dealing

with his estimates. That's really what I wanted to say.

Now

I want to talk about one other thing, the Premier's new role as a stock

touter. He's got into the habit of going to the press and talking about

the value of various corporations and whether we should have different

kinds of investment in the province. Mr. Chairman, you will recall that

at the time of the statement regarding the issue of free shares there

had to be an order-in-council passed —

section 37 of the Securities

Act — in order that the Premier wouldn't be liable as someone who was

touting stock. He did that in respect to the BCRIC shares.

The

second time he went into the touting business was in respect to a B.C.

Telephone and General Electric Telephone inter-corporate share transfer

that was going to take place. He insinuated himself into that. He also

insinuated himself earlier in the year into the question of MacMillan

Bloedel and the CPI. One of the issues that he raised was that he had

some concern about the power of CPI in respect to MacMillan Bloedel.

According to the Financial Post ,

in a recent issue of their regular series on the largest 500

corporations in Canada, the fourteenth largest corporation is MacMillan

Bloedel. The Post listed two major shareholders. One is in the United

States with 9 percent, and the other is Canadian Pacific Investments

with 13 percent. I don't know whether the Premier was aware that 9

percent of the shares of MacMillan Bloedel are held in the United

States. That's a fairly significant number of shares. They are

characterized in this report as major shareholders.

But that

has been a process that the Premier has gotten into. During the

previous government, he was always worried about the government getting

involved in the private sector. He's not only been getting involved in

the private sector, but he's been directing the private sector as to

what he would like to see happen within the private sector. There is

concern in boards around this country whether it is the role of a

Premier to start insinuating himself into the private sector. He says

that he represents the free enterprise system, and he wants to be able

to see if free and enterprising, and not see any government

interference.

We've had three cases where that Premier has

insinuated himself into the private sector. He has created some

concern, particularly with people who were thinking about investing in

this province and then realized that their investment might be

questioned by the Premier. He used the theme: "B.C. is not for sale."

Of course, that's "B.C. is not for sale to some people, but B.C. is for

sale to other people.'' It depends on whether it happens to be Panco or

Weyerhauser or what suits his purpose best. He's made a practice in the

last seven or eight months of insinuating himself into the private

sector and has had some adverse effect on the whole question of

investments.

These things are inconsistent with statements

made earlier by the Premier in terms of his role, the free enterprise

system of which he is the spokesman and in terms of the business of

freedom and freedom of information.

He's been a great talker

on that. He used to say when he was in opposition: "We have to get all

the information we can get." I don't recall that he was able to name

one report that he did not get on request from the government. But for

over a year we've been trying to get a report which is essential to the

investment climate. It's essential that we know about it. We've had no

other definitive report on investment in this province. We heard that

the Minister of Finance (Hon. Mr. Wolfe) had done some studies, which

apparently are non-existent, in respect to the effects of succession

duties, and if you remove them how effective they would be in terms of

promoting investment. We've had none of that.

Is the Premier

going to be consistent in his sharing of information, the open

government, and in moving towards the kind of legislation that he has

talked about over the past three years? He's talked about conflict of

interest legislation, he's made comments about freedom of information,

he's made comments about the Provincial Elections Act, and yet we have

none of this available. What he wants to share with the province is

completely inconsistent.

The investment question will

presumably continue to be a key question in the debates in this House

when we get to economic development. We have completed the finance

area. We need to be armed with more up-to-date information. Presumably

that information is available in the Schroeder report. I would say to

the Premier that if it is important to leave aside that part of the

report that relates to the Vancouver Stock Exchange, then well and good

leave it aside. Surely there must be other information available in

terms of a release of part of that report. I doubt very much if that

report is in one piece; perhaps it's in several pieces.

That

would be serving a useful purpose in making the debate in this House

far more informative in terms of the investment climate. We're not

asking for what goes on in the Vancouver Stock Exchange. We can leave

that to the legislation. But if parts of that report can be made

available to assist this House, to assist the investment people, then

that should be done. That should not in any way infringe on anybody's

business independence in terms of what he said in that.

MR. BARRETT: Mr. Chairman, I would like to ask the Premier if he also checked on the credit union report on the

[ Page 422 ]

financial institutions Act, and if that central credit union report is available.

Would

the Premier check, and sometime let us know, rather than hold up his

vote? On the same basis as the Schroeder thing, would you check and let

us know which minister has it? That's all I want to know at this point.

Thank you for the undertaking.

The other thing I want to say

in conclusion of the Premier's estimates is that I am pleased to see,

Mr. Premier, through you, Mr. Chairman, that the Prime Minister has

changed his position on Petro-Canada and has now said that a move to

sell Petro-Canada will not be a high priority. That's today, and that

is good news for Canadian industry and Canadian manufacturing.

There

is the concern, however, of the dramatically rising cost of energy in

the marketplace for Canadians. The Premier has indicated that the

increase scheduled for the price of gasoline will not be stopped. I

asked the Premier to consider if the present increase cannot be

stopped, to consider his government looking at the dramatic impact of

such increases, especially of transportation for working people outside

metropolitan areas who have to use their cars to travel to work. It is

an added cost for those in rural areas, who don't have the benefit of

publicly subsidized transit. I'm not suggesting a form of

subsidization, but the fact is that public transit is subsidized for

lower mainland or urban users.

I think we canvassed the

Premier's estimates thoroughly. I welcome the undertaking to identify

who has the B.C. Central Credit Union report.

MR. BARBER:

If I may, I would like to apologize for a remark I made last night. I

referred to a couple of individuals who are not members of this House.

One is an order-in-council appointee, the other is in private

employment. My remarks were not fair. They were not called for. I

apologize for them now.

Vote 6 approved.

On vote 7: executive council, $535,833.

MR. BARRETT:

I ask the Premier if he would give consideration to the tradition in

this province of having opposition members attend as observers at

federal-provincial conferences, under this executive council vote,

because it is usually the cabinet ministers who go back. During our

administration we encouraged such participation. Every other province,

I understand, does. If not, fine. But I think it would be useful for

British Columbia. We did it when we were in government, and I would

hope the Premier would do the same.

HON. MR. BENNETT:

It was not initiated by the government. I think the energy conference

allowed delegations to be expanded to include observers. They have not

been consistent. Not every First Ministers' Conference is held in the

same manner, but in those where it is expanded, it may be possible to

include observers. I know of one conference where it was allowed that

we missed merely through oversight. It's not our intention to prevent

people going to watch. They're welcome. But the opening of the

conference is a conference decision. It hasn't been consistent.

Vote 7 approved.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolution, was granted leave to sit again.

HON. MR. HEWITT: With leave, Mr. Speaker, I move we proceed to public bills and orders.

Leave granted.

HON. MR. HEWITT: Committee on Bill 12, Mr. Speaker.

BRITISH COLUMBIA RESOURCES INVESTMENT

CORPORATION AMENDMENT ACT, 1979

(continued)

The House in committee on Bill 12; Mr. Rogers in the chair.

On the amendment to

section 2.

MR. BARBER: For whatever value it may have, I wonder if I might repeat the amendment now.

MR. CHAIRMAN: Please do.

MR. BARBER:

The government proposes to repeal altogether

section 4 of the 1977

bill. We propose to add to the language contained in Bill 12 the

following words, by adding after the word "repealed"; "and the

following substituted: 'on any offering of shares of the company to the

public at large orders shall only be received from residents of the

province'." That amendment was ruled in order. I have every confidence

that the government will support it.

Our amendment, which is

in order, will guarantee that British Columbia is not for sale. It will

guarantee that shares in the resources corporation may be sold only to

residents of British Columbia. It will guarantee that the Premier meant

what he said when he told us months ago that the assets, the resources,

the general inheritance of the province of British Columbia will not be

abandoned to other than citizens of the province of British Columbia.

The amendment, which is in order, would commit the province of British

Columbia to restrict sales of shares in the resources corporation to

British Columbians only. I would remind the Premier — I'm sure it's not

necessary, but let me do it anyway — that

section 4 in the 1977 bill,

until amended, read: "On any offering of the shares of the company to

the public at large, preference shall be given to orders received from

residents of the province."

The Premier knows that we opposed

the 1977 legislation. We opposed it on a number of grounds. However,

it's only fair to point out that there were some sections in the 1977

Act that were good;

section 4 was one of them.

Section 4 would

guarantee and did guarantee for two years, in law if not in practice,

that residents of British Columbia would be given first choice in the

share offerings of the resources corporation. What we discover is that

in this

[ Page 423 ]

unfortunate

government amendment they propose to repeal altogether that guarantee,

that protection, that means of ensuring that British Columbians come

first. Even more unfortunately, they don't add to it some better

protection, some better device, some better means of guaranteeing that

British Columbians come first. They repealed it totally and replaced it

with nothing. It’s a big mistake.

What it means is that

anyone anywhere in the country can purchase and eventually control

together with others sufficient shares in the resources corporation,

and we may end up, lo and behold, having to fight off another CPI

takeover of another British Columbia corporation. We wouldn't want that

to happen. Those were strenuous days for the Premier and for us in the

opposition. We wouldn't want to see that happen to the resources

corporation, as the Premier tells us it almost happened to MacMillan

Bloedel.

When the Premier gets up, as I see him doing — he's

drinking water; that's the usual signal he's going to rise — he will

tell us that, because of the $6-a-head share offering that was

concluded on June 15, and because of the free shares as well, every

possible means of guaranteeing preferential treatment for British

Columbians has already been obtained and exercised. If that's what the

Premier is going to say — one can anticipate he might — let me save him

the trouble of making the argument by telling him on behalf of the

official opposition that that protection is simply not adequate.

Reasonably

enough, the law allows that the board of directors of the resources

corporation may in the future go to the public with other share

offerings. By and by, the number of shares obtained through those

subsequent future offerings may well be enough to guarantee that

non-British Columbians hold the majority of shares in the Resources

Investment Corporation.

Accordingly, the protection the

Premier may feel is no longer required in law, because it was obtained

in the practice up until June 15, is protection that we don't think is

worth very much. We're not writing a law here today for next week.

We're writing it for next year. and perhaps ten years from now, if it

stands unamended. The protection the Premier may genuinely feel has

been exercised and obtained, as of June 15, we would simply argue

should be enshrined in law for a long time to come. As we announced

some time ago, the official opposition is proposing, today and in the

future, a series of amendments which we think are consistent with the

basic principle of "British Columbia Ain't For Sale." I refer to the

author of the remarks, and I ask the author to accept our amendment.

They

enhance what you yourself have already said is government policy. They

strengthen what you have already said is a government object. They add

to the weight and the burden of an argument that you yourself have

made, through you, Mr. Chairman, that British Columbia is not for sale.

Our amendment provides that, on any offering of shares of the company

to the public, at-large orders shall be received only from residents of

the province. If ever there were an amendment that guaranteed that

British Columbians come first, this is the amendment. If ever there

were an opportunity for opposition and government together to guarantee

that British Columbians come first, this is the opportunity. We ask the

Premier to support the amendment, to take the opportunity and join with

us in guaranteeing that these inherited assets that belong to all

British Columbians shall continue to belong exclusively to them, so

long as this amendment prevails and this law holds. Others of my

colleagues will speak on the matter. For the moment I would appreciate

comments of the Premier on the same question.

[Mr. Strachan in the chair.]

MR. LEGGATT:

I'd like to add just a bit to what my colleague said about this

proposed amendment. One of the reasons we feel this is one of the most

significant and important amendments that we're proposing is the

concern of a great many people in British Columbia that ultimately

these shares will fall into the hands of foreign owners.

The

Premier is looking at me quizzically, and I want him to try to follow

this logic — it's not that tough to follow. We had a bill originally

passed which provided for a clear B.C. preference in respect to this

particular corporation and its shares. The second bill takes away that

B.C. preference and says, in fact. exclusively Canadian. The clear

reason for that, and I know the Premier will want to get up and explain

this to us, was to expand the market — probably to expand the value of

those shares, if you examine the law of supply and demand. The risks of

foreign ownership are that in the event it isn't successful — if we

have some reverses — what will be the policy of that corporation next

year? Will they not come before this House and suggest: "We'll have to

expand the market even further. We should have these shares on the New

York market so that the range of purchasers is increased and therefore

the share value is increased, through the normal processes of the

marketplace. "

So the reason why this is such an important

amendment is that it gives the Premier an opportunity to support what

he said about B.C. assets not being for sale. It gives him a chance to

put on record right now by simply standing up in this House and saying:

"Yes, we accept this reasoned amendment to guarantee to the people of

British Columbia that these shares won't be sold anywhere but in

British Columbia." It seems to me an easy step for the Premier to take.

I'll be interested to hear his reasoning for wishing to expand the

market outside of British Columbia. But I suspect behind it is the same

reasoning one would use to expand it beyond Canada as well.

[Mr. Rogers in the chair.]

HON. MR. BENNETT:

Mr. Chairman, the government will not accept the amendment for a number

of reasons, the main one being that when this

section was put in the

initial bill, the drafters of the bill at that time anticipated a small

offering in which British Columbians would get first purchase.

The

members may have some knowledge of how the Alberta Energy Corporation

floated such a share. The share was never to be un-Canadian; it was to

give their own people a first opportunity, and when the Alberta Energy

Corporation offering was made, Albertans had a preference for a period

of time. After that time, if the share offering wasn't sold — and there

was a fixed limit — it would be made available to other Canadians. It

has the same restrictions concerning continual Canadian ownership as

does the Canadian Development Corporation. I believe you will find

that, in fact, much of the language in this legislation guaranteeing

future Canadian ownership and

[ Page 424 ]

only

Canadian ownership is utilizing the best parts and strengthening the

best parts of those bills, both of them having the same partial intent.

We all have the same intent to guarantee forever that only Canadians

can own the shares, and the same restriction on the amount that any

person or associated persons or company or associated companies can

own. That logically provides the protection as with any law we pass.

Members

here can question whether people can try and break the law. I say that

when they break the law there are ways of dealing with them. We pass

laws that people should wear motorcycle helmets for safety. When

someone finds the law is not adequate, the law is strengthened. But you

can't guarantee that someone is not going to break the law. There are

laws against murder. It doesn't mean that I can tell you that because I

passed a law no one is going to go out and murder somebody.

But

I can say this: we have here the strongest law, and the only one

providing this type of opportunity and this type of protection, because

it has gone much further than in those other areas with those other

corporations. This has not become a quasi-public corporation, nor is it

a quasi-Crown corporation; it is truly a public corporation in the

private sector, which carries with it these restrictions for all time.

Now

we changed the method of distribution, Mr. Member. We had two offers,

one from the government of British Columbia of the free shares, and the

other at the same time offering only qualified British Columbians or

Canadians an opportunity to purchase into their company. We have had

both a distribution and an offering that has not only given preference,

but has been exclusive to British Columbia, and it has been

enthusiastically subscribed. I think it has gone beyond the

expectations of anyone, myself included. It has made the whole of not

only the financial community but also the political community reassess

the need for individual ownership and the willingness to participate in

it that is out there amongst the Canadian people. It's something that

only they can express. It gets lost in election issues and lost in

debate; but it is significant that when given the opportunity, they

answer not with a ballot but with their money, and with their

application, and with their participation. That's probably the

strongest expression that you're going to see, or that you could see

and they've responded.

I say to the members that this

company is going to have the broadest participation by shareholders of

any corporation in Canada. As of today, with processing of applications

still taking place, an estimated 86 percent of those who qualify

applied for the free shares. As you know, there is provision for appeal

until the end of the year, so it may be that we will have right off the

bat a corporation with well over two million shareholders who are

British Columbians, two million-plus British Columbians who are

Canadians will in effect own the company.

Can anyone take

it away from them? No, nobody can take it away from them. Can anyone

buy it? Yes, but only if they are willing to sell. My advice to them is

— and I know the member supports me in this, because I know he has

great confidence in the future of this province and the opportunities

that lie there — not to sell. I don't want to see our people offering

those shares. I want them to hold them, because I believe that the

future of that company can be bound up in the future of this province,

not through government direction or government control, but through the

opportunities that lie in British Columbia. Obviously no one can take

it from them, nor can control be taken outside the country, nor would

even ownership go beyond the borders of British Columbia, except by

choice of someone being willing to sell — and I don't think many will

be willing to sell; I think they look on it as an investment.

But

is there something wrong with a few other Canadians wanting to own? If

we set up that type of balkanization on a permanent basis — not

allowing other Canadians to own — they could do likewise to British

Columbians who own elsewhere.

It is not the same as a large

company moving in to dominate an area. This legislation would not be

aimed at the CPRs; it would be aimed at the little people of the

country, the average people — average Canadians. I know it would not be

the intent — at least, I hope it would not be the intent — to move

against the ordinary, average Canadian. It's one thing to stand up

against CPI when it would have an unwarranted position in our forest

industry, but it would be another for any member of this Legislature to

put in legislative roadblocks before the little guy in Canada. How

could I go anywhere and say: "We have legislators who don't want you,

as an ordinary Canadian citizen, to have a share in a company which

believes if you find a willing seller you may be a willing buyer."?

They'd find it very unusual, and they'd wonder what Canadian

citizenship offered.

Because of the very volume of the

shares, the number of shareholders, the large equity base and because

of the tremendous leverage the company now has, they won't need to ever

float another equity issue. The problems facing the shareholders and

the directors of the corporation will be the very success of the

subscription, the utilization of that equity base and the leverage it

has to make other acquisitions and develop other projects.

The

amendment is rejected by the government as not being necessary. British

Columbians already have security, and working against opportunities for

average Canadians is hard to defend. It isn't similar to the CPI move;

it merely puts in roadblocks before other Canadians who want an

opportunity in what can only be a Canadian-owned company. We're not

prepared to support that. We have, in effect, guaranteed the British

Columbia dominance in ownership. In fact, at this time that's total in

British Columbia and, in my view, always will be.

MRS. WALLACE:

I'm interested in the Premier's remarks when he indicates that only

British Columbians presently have the opportunity to hold shares in

BCRIC. That's not entirely true. Certain brokerage firms in this

province have encouraged people who indicated that they didn't have

funds to buy any other shares to give their proxy to those brokerage

firms and the agents of those firms. Under the proxy terms they are

able to get that proxy and have purchased shares in BCRIC backed by

funds from Alberta and the United States. That has happened already.

HON. MR. BENNETT: Give me the names.

MRS. WALLACE: I can do that later.

HON. MR. BENNETT: Will you give me examples right now?

MRS. WALLACE: Right now I can't name names.

[ Page 425 ]

HON. MR. BENNETT: Madam, it's a very serious thing....

MRS. WALLACE: Well, that has been done, Mr. Premier. That has taken place.

MR. CHAIRMAN: Order, please.

MRS. WALLACE: By proxy those people are investing, funds from out of this province. That has taken place.

MR. CHAIRMAN: Order, please. The member has the floor, unless you're rising on a point of order.

HON. MR. BENNETT: No, Mr. Chairman, if I could ask the member.... It's a very serious accusation to make.

MR. CHAIRMAN: That's not a point of order. I must ask the member to take his seat.

HON. MR. BENNETT: You're willing to go along with something that's untrue?

MR. CHAIRMAN: Order, please. Please continue.

MRS. WALLACE:

Rather than weaken this legislation, we should strengthen it, and

that's exactly what this amendment does. To remove the clause in this

bill which does away with the preference to B.C. residents is a step

that weakens the legislation, while this amendment is a step that

provides a much greater degree of protection for British Columbians.

The

Premier has said that there is no way that the control of this company

can ever get out of the hands of British Columbians. I want to just

review for him what has happened with another B.C. company, and I refer

to Block Bros. Block Bros. was a local British Columbia company with a

lot of small investors. Block Bros. held the controlling interest. In

1978, I believe, there was a move by a firm in eastern Canada to buy up

those shares that were held independently. Olympia and York bought up a

great number of the independent shares at something like $8. They, in

fact, now have by far the largest block of shares in Block Bros. Block

Bros. maintained their own block of shares. I think the present

holdings are 1,049,700 in the hands of Olympia and York, and some

740,852 in the hands of Block Bros., and some small amount of shares

out in

the hands of independent shareholders — a fair number, but small

holders.

What Block Bros. is now moving to do is a

consolidation of shares, Mr. Chairman — a thousand to one. So any

shareholder who holds less than a thousand shares is automatically out

because there are no fractional shares allowed. Block Bros. have

maintained their block of shares and will be allowed to stay in there

and sell at a higher price later on, but that amounts to expropriation

of shares at a price fixed by Olympia and York for those small

shareholders.

I am suggesting, Mr. Chairman, that exactly

the same thing can happen with BCRIC. The small shareholders, the

100-share holders who have one block, have a board lot and are able to

vote, could well be just simply ruled right out if this company gets

out of control of British Columbians. We could lose our heritage, and

that's the direction this could well go, Mr. Chairman.

That's

why I believe we need much, much stronger controls and that's why I

believe this amendment is so important that it makes it absolutely

impossible for anyone outside of British Columbia to gain any control,

because we're talking about our British Columbia resources. That's what

makes up the value of BCRIC. That's what's in there that makes it

valuable, and if we allow something to happen in BCRIC that could very

easily happen, as it is happening right now with Block Bros., that kind

of thing could take the control right out of British Columbians' hands

and put it in an eastern Canadian firm and that eastern Canadian firm

could very well be a subsidiary of some international corporation. We

would have lost our heritage. We would have lost the right to share the

returns from our own resources here in British Columbia.

That's

what this amendment is all about, Mr. Chairman to prevent that kind of

thing from happening. I have pointed out the Block Bros. illustration

as a case in point of how that could take place with BCRIC, very

easily, very readily and without any infringement of the BCRIC

legislation as it is presently written.

I am very concerned

that if this legislation goes through without this amendment, that is

exactly what is going to happen to the resources of British Columbia.

because believe me, we have a valuable province here. We have a lot of

very valuable resources. We have a tremendous wealth. It's our

heritage here in British Columbia and no government has the right to

transfer that out of this province or to let the opportunity be

established for the loss of that heritage to British Columbians. That's

exactly what this legislation will do without the protection of this

amendment and that's why I am supporting this amendment,

MR. CHAIRMAN:

May I remind members to read the amendment and try to keep to the

amendment? That would be appropriate. There will be other times to

discuss this after the amendment.

HON. MR. BENNETT:

Mr. Chairman, I must question the member for Cowichan-Malahat. I'm sure

we all want the protection and we also do not want to take away someone

else’s opportunities — people who are Canadian citizens. Are you

fearful of Ed Broadbent owning shares in this company? Would you deny

him that opportunity of being a Canadian owning a share in a Canadian

company? Would you deny him as another Canadian?

You see,

I'm not fearful. The whole of your argument seems to boil down to one

fact. About two million British Columbians will have applied for the

shares and own the shares. You're in essence saying you don't trust

them to own them. You don't trust them to keep them. You don't trust

them to Keep them, is what you're saying. and I say I trust them to

keep them. Obviously there's a difference. You don't trust those people

to keep the shares. I say I do. I think they applied for them because

they wanted them. I think they bought them because they wanted them. I

think the major asset of this company is its future. I trust them. I

trust them to hang on.

The member has tried to compare this

with some other corporation who had ownership in large blocks that are

prohibited by the legislation in this company — a broad base of

ownership of two million shares. I don't know if the member has taken

the trouble to look at the number of shareholders in any of the major

companies in Canada or the

[ Page 426 ]

United

States and what it would take with this type of broad shareholding,

because there is no other like it where the ownership is so broadly

based over a number of people, where it is restricted.

Mr.

Chairman, the opportunity is there for other British Columbians to

further their ownership if they find other British Columbians to sell

to them as they want to increase their holdings. If they haven't been

able to or didn't bother to or wanted to take a vacation this year

rather than pick up additional shares, they may want to make a choice

in the future to spend less in that manner and have a piece of

investment in British Columbia and work to what is a practical board

lot.

I just say that I have the confidence that the people

will own the shares — the protections are in the bill; the British

Columbian distribution is there. I'm not in favour of denying other

ordinary Canadians from being Canadians in British Columbia as well. I

was willing to give preference to British Columbians in the first

distribution, but I cannot, as a Canadian, say: "I'll deny other

Canadians." And you can't hold out just a few bogeymen. You're denying

all the ordinary people in this country who are Canadians as well the

opportunity to share in what is a Canadian company should someone

decide to sell it to them willingly. I'm not prepared as a Canadian to

accept your point of view, and I'm not prepared to accept your distrust

of the British Columbians who have these shares, that they're going to

let them go in some grand manoeuvre, because I don't think that will

happen.

The member for Cowichan-Malahat has said

specifically she has knowledge of specific firms and individuals who

have some special trust agreements taking these shares away from the

people — agreements made before the application date — and I've asked

that member to provide the names. It's very serious to me. I would be

interested in knowing, because no knowledge of those people or

individuals has come to me. I would be very interested in that specific

information, where that member has said they have specific knowledge of

these people, because under the distribution system that's impossible.

MRS. WALLACE: It's illegal, but not impossible.

HON. MR. BENNETT:

Then if you have knowledge of an illegal act, you should have taken it

to the authorities. Bring it to me and I'll take it to them. Bring it to

me, and I would like those names this afternoon. Table them in the

House.

It's very serious, and the member has stated it. I

would like to know how long you've had the names. Mr. Chairman, I'm

asking the member a question, because it's important. How long have you

had the names?

MRS. WALLACE: In response to the

Premier, Mr. Chairman, sometimes people give us confidential

information and I just simply cannot divulge the names on the floor of

the Legislature. There is nothing illegal about what has been done, and

that's the point I'm trying to make. A person who comes in and us

confident applies for his or her five free shares and has no money to

buy the additional shares, the 5,000 additional shares.... If someone

then gets their proxy to sign for those shares, and that has been done,

according to my informants who are, of course, employees of particular

brokerage houses.... The names are privileged.

I will talk

to some of the people and see if they can give me specific cases or if

they will contact the Premier. But this is the information that I have,

and there is nothing illegal. It has simply been happening, Mr.

Chairman, and I felt that the Premier should be aware of that.

HON. MR. WOLFE: Not to non-residents.

MR. CHAIRMAN:

Order, please. Of course, the committee has no right to ask a private

member for a submission of anything, and that's an order. I must admit

I find the debate rather confusing because to the best of my knowledge

proxies are only issued to people who own shares.

HON. MR. BENNETT:

That's right. Perhaps part of your incorrect statement is the term

"proxy." You may be talking about provision for people who are unable,

through being physically incapacitated, to sign a power of attorney,

not a proxy. Did you mean power of attorney?

MRS. WALLACE: Yes.

HON. MR. BENNETT:

Well, there is a power of attorney for where they could not physically

go to the application place with their two pieces of identification to

apply for their shares. You also know that to get those shares they

also have to appear with their pieces of identification; they have

nothing to transfer. But I know the member has stated they have the

names and they have the firms and they have this identified, so I look

forward to it being provided.

MR. HOWARD: Mr.

Chairman, apropos that last exchange, I think the Premier would agree

that there is nothing illegal, no prohibition in the Act or in the bill

before us, that would prevent an individual British Columbian from

applying for the five shares, buying an additional 5,000 shares, and

then entering into an agreement to sell those 5,000 shares to somebody

outside the province. There's nothing illegal or prohibitive about that

in the Act. Apart from the use of words "proxies" or "powers of

attorney" or whatever it is, that, I think, was probably what the

member for Cowichan-Malahat was talking about. It was that type of

transaction, and that goes on.

HON. MR. WOLFE: No, that wasn't what she was talking about.

MR. HOWARD: The Minister of Finance can shake his head and say: "It doesn't go on." There is nothing illegal about it.

But

that's not really the prime issue we're talking about; that's a side

issue. The primary issue we're talking about is foreign ownership.

Regardless of what is in the bill, or is in the Act the bill seeks to

amend, while it may prohibit foreign ownership of B.C. Resources

Investment Corporation itself, it does not prevent B.C. Resources

Investment Corporation selling off its assets or a portion of its

assets to foreign owners. For example, this government gave to B.C.

Resources Investment Corporation ownership in Can-Cel to the extent of

80 percent. In return, the government got a note for $151 million,

which it's going to give back; in return for that it receives some

shares. That's the transaction.

[ Page 427 ]

B.C.

Resources Investment Corporation is the owner of 80 percent of the

shares of Can-Cel. There is nothing to prevent B.C. Resources

Investment Corporation, if it so desires, making a deal with

Weyerhauser and selling those 80 percent share holdings in Can-Cel, or

50 percent, or any other percentage for some other kind of share

transaction deal. If that happens, then foreign ownership intrudes into

a resource that at one time belonged to British Columbia. There's

nothing to prevent that from happening. There's nothing to prevent B.C.

Resources Investment Corporation selling Kootenay Forest Products

completely, or anything else which it owns, or entering into any kind

of transactions across the border, and have the assets which B.C.

Resources Investment Corporation own also partly owned, in the majority

or otherwise, by foreign interests. There's nothing whatever to prevent

that in this piece of legislation.

From the way the Act is

constructed, from what this bill does, and from what the prospectus of

the corporation says, prior to the election this was fully and

completely anticipated by the government of the day, who are still the

government.

It established in the Act a provision that says

the government wouldn't have any say beyond a certain limited number of

directors, if it held a certain percentage of the shares. With respect

to the petroleum and natural gas licence transferred to B.C. Resources

Investment Corporation, for which, incidentally, B.C. Resources

Investment Corporation say they paid $40 million — that's not correct.

They did not pay, as is provided in the prospectus, $40,000, 843 for

that particular licence. All they did was get the licence and issue a

note, and they are now issuing shares to cover the note. They didn't

pay the government anything for that particular licence which was

reputed to value $40 million. No money changed hands. Nothing came into

the treasury. It was a gift.

Another aspect indicates that

the government fully anticipated — indeed, hoped — that so far as that

petroleum and natural gas licence was concerned, foreign corporations

would be involved in it one way or another. One of the terms of the

licence is that B.C. Resources Investment Corporation is not permitted

to drill in its own right on that licence property. It must farm it out

to somebody else. In an oil and gas licence, "farming out" means you go

to some other company and ask them to drill on the property. As a

result of that drilling, the other company earns an interest in that

property. Depending on how much money they have put up, and whatever

the deal is, they can acquire virtually the whole interest in that

particular property. Some of those deals have already been made. Gulf

Oil, for instance — not a Canadian Company — is involved in a farm-out

program with B.C. Resources Investment Corporation. Esso, a well-known

Canadian company, is involved in a farm-out deal with B.C. Resources

Investment Corporation.

The very fact that government itself

saw fit to deny B.C. Resources Investment Corporation the right to

drill in its own right on that licence indicates it wanted —

specifically and deliberately — to step out of British Columbia and

find foreign corporations to drill on that property. That's what

they've done.

The Premier can shake his head until it falls

off. The facts of the matter are there to look at. The words are there,

of the licence. That's what's involved in foreign ownership.

The

restriction in the Act of I percent containment, subject to

order-in-council, indicates that government wants to expand that I

percent at some time if so requested. I know that the Premier said he

didn't mean that. What he meant was that that I percent limit subject

to change by the cabinet was a control measure and meant the cabinet

could reduce it if necessary. If that's what he wants to do. do it. But

again it's the whole part and parcel, Mr. Chairman, apropos of the item

before us right now, of the deliberate and conscious approach of the

government to say: "We really do want somebody else other than British

Columbians to have control and authority over the resources in this

province, specifically those resources which the people owned at one

time and that have now been given away." The Premier, as I say, can

shake his head as much as he likes, and rattle what's inside his head

around in it. He can't deny those facts as are contained in the Act, as

are contained in the prospectus.

MR. LEVI: Mr.

Chairman, I just want to go over a couple of remarks that the Premier

made and the fact that the reason they want to extend it to the rest of

Canada is to give every Canadian an opportunity to participate in BCRIC.

HON. MR. BENNETT: Not to give it, not to deny it.

MR. LEVI:

Not to deny it. Oh, he doesn't want to deny any Canadians the

opportunity. Well, at the moment, of course, Canadians are not denied

that opportunity. If they want to go out and buy shares in any of the

companies that are contained in BCRIC, they can do that anyway.

The

Premier goes on and he keeps pushing the issue that in some way there

are over two million shareholders. There are two million people that

are holding five pieces of paper, and they have no rights whatsoever in

the company. Now we are told that there are over 110,000 people who do

have voting rights in the company. There is no similarity in size

between the corporation he talks about, for instance, and General

Motors. General Motors has 1,225,000 shareholders. They all are able

to participate in the function of the corporation. This is not the case

in terms of BCRIC.

One of the difficulties I have with this

debate is that here we are in this Legislature, commenting on the

affairs of a company that is a public company operating in a private

field. We had the Premier saying to the member for Cowichan-Malahat

(Mrs. Wallace): "Give me the information. If you have any information,

give it to me." Now he is going to have to make up his mind that this

company is at arm's length from the government — it is in fact a

private corporation — and that any business which the member for

Cowichan-Malahat might have should be dealt with in terms of the

company and not in terms of the Premier.

But going back

specifically to the amendment, it seems to me that the whole process

that we have gone through with this Act.... For instance, we have never

had an explanation from the Premier why it was that we set out setting

up a company which was going to have investment, in the first instance,

of British Columbians, and then somewhere along the line he changed his

mind and what it became in fact was a free share giveaway. Then people

who had the free shares could go on to buy others. What was the reason

for that? Why did we move from one particular form of the company, in

terms of the share issuing, into another? The

[ Page 428 ]

difficulty

that we have in terms of this particular amendment is that what the

Premier wants to do is, in fact, to add three types of people that are

going to be dealing with the corporation: people who got free shares

who have no votes: people in British Columbia who were able to buy

shares in the first instance; and then we deal with the third category

that the Premier wants to create — the absentee people from the

province who are going to participate in the operation of the

corporation. Those are three different types of shareholders.

Our

concerns have been expressed by my colleagues in terms of who actually

gets to own those particular shares. We'll only know later on just what

kind of arrangements have been made. We do have to have some concern,

both in the province and outside of the province, with people who can

obtain large numbers of shares which put them into a position, along

with other people who have large numbers of shares, to control the

company. What is going on every day in this country are squeeze-outs of

small shareholders. It would seem to me that it would be in the

interests of this province that if the

section here was defeated, and

if the amendment we are proposing be accepted.... Then let us see what

happens in terms of the shaking down of this corporation — but not

making it wide open. Nobody is being denied the opportunity to invest

in British Columbia. There are all sorts of companies outside of BCRIC

that are involved in investment in this province where they have

adequate opportunity. After all, people who do invest in corporations

usually look to see if they can get dividends. We've already been told

by the corporation that there are no dividends accruing here. There are

no tax credits accruing here, because there will be no dividends paid.

don't want to deny people. People aren't going to bother to do this

unless — as we suspect, as we are somewhat suspicious of — shares sold

at $6 at this stage later on, when they go on the market, may go to $9

and there is some quick profit-taking. That is the concern that we

have. That is the concern that we have as well about this. You feel

that you don't want to deny people this.

What have we got

here — an investment corporation? Or have we got a kind of Las Vegas

crap game where people can take out a lot of money very quickly,

profit-taking of enormous amount, because of the kind of approach that

has been used? That is the concern that we have as well. What is going

to happen to the corporation?

MR. BARBER: Summing up

for the opposition, which has proposed this amendment, Mr. Chairman, I

would like to reply to a couple of other comments of the Premier which

I think are simply not adequate. As my colleague from

Coquitlam-Maillardville has pointed out, the Premier has said

repeatedly that there are two million shareholders. That's true. The

Premier didn't tell the whole story. What is also true is that they

don't have a vote.

If it was just the ordinary Canadian Joe

who wanted to buy into the B.C. Resources Investment Corporation and if

any of us were so naive as to believe that's what will happen, it would

be harder for us to make our case.

The point is that we're

not that naive and I doubt the Premier is either. Even the member for

Prince George North (Mr. Heinrich) isn't so naive as to think that

other than what will happen is as follows. It won't be the ordinary Joe

who wants to buy into the resources corporation from Toronto and

Montreal. It will be the major investment houses that buy in. It will

be the other major resource companies in this country. It will be the

other centres of capital in Canada that invest here. Let it be noted as

well that if this amendment fails, inevitably those resource companies,

many of whom are controlled in other countries, will thereby control

second-hand what the Premier pretends they cannot control first-hand.

When

you allow a resource-based company headquartered in Toronto and owned

in New York to buy shares in this corporation in British Columbia, you

are defeating what you tell us you stand for.

AN HON. MEMBER: You can't do it.

MR. BARBER:

What do you mean, you can't do it? Esso Canada is supposedly a Canadian

corporation. Your legislation permits Esso Canada to own up to 1

percent of the shares in this corporation.

Mr. Chairman,

there is specific provision for corporate ownership of shares in the

resources corporation — specific provision in the 1977 Act, unamended

in this bill, to allow corporations to own shares in BCRIC. Do you deny

that? It's in your own bill.

Now when you open up and create

an opportunity for corporations outside of British Columbia to take

shares in BCRIC, you have to recognize the fact that we have all sorts

of companies in this country that call themselves Esso (Canada) Ltd. or

Gulf Oil (Canada) Ltd. They are no more Canadian than a Japanese kite

is Canadian that happens to be sold by a distributor in Vancouver. They

are fronts only for foreign corporations. They always have been. That's

how they're established; that's why they are established. And this is

what they will do: if you don't accept our amendment, they will as

corporations, purportedly Canadian, end up taking shares in this

company and inevitably taking control.

I would remind the

Premier that in a widely held company like this it is a relatively easy

matter for a small number of shareholders to exercise effective

control. CPI, it is widely rumoured, with 14.1 percent of the shares in

Macmillan-Bloedel, effectively controls that company. Macmillan-Bloedel

is a widely held company, and 14 percent of the voting shares allow one

organization within the corporate ownership of Macmillan-Bloedel to

control the board of directors.

There's another problem with

the Premier's inadequate response. Apart from the fact that he is

trying to make us believe there are two million shareholders, which

isn't so — there are only 110,000 with voting rights; only 110,000 have

shares that count for anything — he's also tried to persuade us that

somehow the only people who would be interested outside of B.C. in

buying into these resources are the ordinary Joe. May I say it again:

that's just naive. That's absolutely naive and simple-minded. It won't

work like that. There will be a couple of grandmothers on Yonge Street

whose stock-broking grandsons advise them to pick up shares. And they'll

do so. They'll buy 500 and they'll put them away in a sock. They'll write

them into their will and they will give them to their grandchildren

when they pass away. But in fact, unless this amendment is accepted,

corporate concentration and corporate control of BCRIC will result. It

will result all the more speedily when the major centres of corporate

capital and decision-making in

[ Page

429 ]

this country, which are back east and not in British Columbia, are invited in.

They

will be invited in when a subsequent share offering occurs. They will

take over inevitably. It is all the more dangerous when you realize

that many of these corporations — (Canada) in their name — are in fact

no more than puppets of foreign interests and are not fundamentally

committed to Canadians or to Canadian interests. One of the many

amendments that we are presenting would attempt to forestall that. We

don't think that's unreasonable. We don't think that's unfair. We think

that it is appropriate.

In any case, I don't propose to

prolong this any more. The Premier said he won't accept the amendment.

I'm sorry. We'll call a division and we'll be required to go around the

province and tell the people that British Columbia is for sale, after

all, thanks to Social Credit.

Amendment negatived on the following division:

YEAS — 22

Barrett

King

Stupich

Dailly

Cocke

Lea

Nicolson

Hall

Lorimer

Leggatt

Howard

Levi

Sanford

Skelly

Lockstead

Brown

Barber

Wallace

Gabelmann

Hanson

Mitchell

Passarell

NAYS — 29

Waterland

Nielsen

Chabot

McClelland

Williams

Hewitt

Mair

Vander Zalm

Heinrich

Ritchie

Strachan

Brummet

Ree

Segarty

Curtis

McCarthy

Phillips

Gardom

Bennett

Wolfe

McGeer

Fraser

Jordan

Kempf

Davis

Davidson

Smith

Mussallem

Hyndman

Mr. Barber requested that leave be asked to record the division in the Journals of the House.

Section 2 approved.

section 3.

HON. MR. BENNETT:

I'd like to move an amendment inserting as

section 3(

l) of the bill

the following: "Section 10(

c) is amended by striking out '5,000' and

substituting '20,000'."

On the amendment.

MR. BARBER:

I rise only to ask if the Premier could identify what

section is

amended in the original Act — the 1977 Act — because I confess I can't

tell from here which one is being amended.

MR. CHAIRMAN: Hon. member, it is

section 10(

c) of the original Act

that is being amended.

MR. BARBER:

I want to be very clear on this, and I wonder if the Premier could

correct me if I've misread, but it would appear that this amendment

would provide that

section 10(

c) would then read: "Where it appears

from the register of members of the company that not more than 20,000

of the voting shares of the company are held by a member, he shall not

be deemed to be associated with any other members, and no other members

shall be deemed to be associated with him." Is that what it would read

if this amendment passes? I wonder if the Premier could tell us why he

wants this amendment.

HON. MR. BENNETT: Mr. Chairman, it was deemed, with so many shares, then to be a more realistic number for association.

MR. BARBER: Realistic as a means of solving what problem?

HON. MR. BENNETT: Creating what would be a legal definition of association at a lower level, that's all.

MR. BARBER:

The argument that our party has repeatedly made is that among many

provisions of Bill 12 we find no adequate protection against effective

corporate control of the B.C. Resources Investment Corporation.

Previously, a legal association was defined as persons who had 5,000 or

more shares acting in common. If I'm not correct, I would be happy to

be corrected. I didn't have the amendment before, and I don't have my

notes on that

section of the bill.

But working from memory

only, a legal association was determined when it could be established

that persons holding more than 5,000 shares were acting in common.

Could the Premier tell me if that's correct? I then have some

questions.

HON. MR. BENNETT: Yes, it was. The member

should realize we were dealing with a company with 15 million shares

and an unknown additional quantity. Now we're dealing with a company

that has 85 million, perhaps 90 million shares issued. The association

limits are even safer, even with the higher limit of association,

because of the large number of shares that will be outstanding.

MR. HOWARD:

One company which is a subsidiary of another can hold 20,000 shares and

still not be considered to be, for voting purposes, a subsidiary. For

instance, Canadian Pacific Investments could hold 20,000 shares, and

Marathon Realty could hold 20,000. But they would not be considered to

be associated companies within the meaning of this Act, even though one

is a subsidiary of the other.

I have two thoughts to

express. First, this has been a very inappropriate way to go about

drafting such complex legislation. Almost no notice was given. You came

in and tore sheets off and said: "Here we are: we want to expand the

authorities and the restrictions contained in this particular piece of

legislation." Admittedly, when members in opposition give notice of

amendments many times they don't expect them to pass. Maybe the

government can say you don't really need to tell us. But when the

Premier comes into the House and introduces an amendment, there is

every expectation that he is serious and that he expects it

[ Page 430 ]

pass. I think it would have been proper and appropriate to have given

some prior notice so that members in opposition, who have just as much

concern about this as anybody else, could have had the time to examine

it and come to some conclusions about it.

On the surface I'm

not disposed to support it, but there may be some rationale that would

alter my opinion. In the general flurry of the way we've been doing

things, no such rationale has appeared.

HON. MR. BENNETT:

Mr. Chairman, there was no attempt to bring it in at the last minute,

but the confusion of my visit with the Prime Minister and the Finance

minister taking part of the committee and then myself taking the other

has led to some procedures not being followed. I would like to have had

all of the amendments in your hands in advance.

There is a 1

percent limit on ownership in the company, and it is not anyone's

intention to increase it; it is there as the protection. It means that

if the final accounting was 95 million shares, 1 percent would be

950,000 shares. Now 20,000 out of that is far less than I percent; it

is infinitesimal. What we're saying is that for association purposes

it's far less heavy than the original. When we put it in, we really

only had the base of the 15 million shares to calculate against as to

what the impact would be. This would have no impact. You'd have to get

thousands and thousands. The number of associations you'd have to have

to get up to I percent is so significant that it wouldn't be practical.

We just felt it was a more significant figure. We felt that with the

number of shares issued the realistic figure of 1 percent provides the

same protection.

MR. LEVI: I'd like to be assured by

the Premier, but I'm not. After all, the prospectus said it was a $100

million share issue. It's some months ago since that took place — and

it's not because the Premier was in Ottawa seeing the Prime Minister.

This is not something that has just sprung up because they were able to

get 95 million shares. This was in the original prospectus. One would

have thought that it conformed in all respects to the Act we dealt with

in 1977.

The Premier now increases it to 20,000. So it reads

that he shall not be deemed to be associated with any other members. If

he was deemed to be associated, what would be the effect? What are we

then looking at?

HON. MR. BENNETT:

The reason for

deeming someone to be associated is to make sure they don't go over the

1 percent limit with associations. It's to prevent someone having

almost 1 percent, so we arrived at a limitation. It isn't practical to

get that number under the 20,000 that together could defeat the 1

percent provision. If you take a look at the mathematics of it now, you

can see that isn't practical. The only reason to declare an association

is so they cannot contravene the I percent. As I say, 1 percent now

may be 950,000 shares. When you're speaking of $100 million.... It's

authorized for $100 million capital. Nobody expected the people to

subscribe to the number of shares issued. It was an arbitrary figure

that was picked. The original association question was looking at a

much lower share issue. Because it's much higher, the association

problem of what 1 percent would be is far different.

MR. LEVI:

I'm having some difficulty with what the Premier said: if 190 people

had 20,000 shares apiece, that would take them to the 950,000 level.

But there is another safeguard in the bill. The bill says that nobody

can own more than I percent. Somehow I think that the import of this is

not related to the 1 percent. After all, we have the safeguard in the

bill about the 1 percent.

HON. MR. BENNETT: This is

so nobody, through association, can defeat the 1 percent. This is a

safeguard against a number of people getting just under 1 percent....

We put the low figure so that any association wouldn't be practical.

You can see that with 950,000, even at 1 percent you'd need an awful

lot of 19,999s to even get close to the 1 percent which is legal. It

may be financially impossible for most of us. It would be the upper

limit.

MR. HOWARD: Insofar as that protective device

is concerned which he's talking about, would the Premier be prepared to

go so far as to prevent proxies being given back and forth so that one

one company can come in and vote whatever number of proxies it has?

HON. MR. BENNETT:

It's not in this section, but with shares you can't prevent proxy

voting. Proxy voting is allowed for anyone through power of attorney,

and it's allowed for many reasons. Perhaps you can't show up for an

annual meeting, or you sign your ballot and send it in. That's common

with public companies in the private sector, and the method of voting

is controlled by the Securities Commission, and falls under the Act.

Certainly proxies are allowed. If I'm flat on my back in the hospital

and want someone to go to the annual meeting and speak for me, I sign a

proxy so they can vote my shares.

Interjection.

HON. MR. BENNETT: Why would anyone give it to someone? I would give it to someone because I was ill.

MR. CHAIRMAN:

Order, please. First, I should have ruled the debate out of order,

because we're not dealing with proxies here; we are on an amendment.

MR. HOWARD: I thought you had permitted tremendous laxity in the rules. Now that we've got sections 3, 4 and 5 all together....

MR. CHAIRMAN: Because of the cooperation of the House, we've allowed some laxity. Please continue.

MR. HOWARD:

All the Premier's talk about protecting and preventing and guaranteeing

the 1 percent rule so that no corporations can associate one with the

other and be members and subsidiaries and thus offend the 1 percent

rule is just superficial nonsense, because they can accomplish the same

thing by the proxy mechanism. I'm asking whether he would be prepared

to extend that and deny proxies in order to ensure that there isn't a

gang-up where one company comes in with a handful of proxies and

controls the company. As long as the Premier is not prepared to do

that, then what's before us now doesn't really matter.

Amendment approved.

Section 3 as amended approved.

[ Page

431 ]

section 4.

HON. MR. BENNETT: I'd like to move

an amendment to

section 4 as follows: (

a) In

section 10.1(1) by

striking out "in the name of" and substituting "by" and (

b) in

section

10.1(2) by striking out "by" and substituting "in the name of."

Amendment approved.

Section 4 as amended approved.

section 5.

HON. MR. BENNETT:

Mr. Speaker, I propose to move the following amendment for the same

reasons as in

section 3: to strike out — 5,005" and substitute

"20,000," and to insert "or deemed to be associated" after

"associated."

On the amendment.

MR. BARBER: What page is this on in the original Act? This is an addition to the original Act, right?

HON. MR. WOLFE: No, it's a substitution.

HON. MR. BENNETT:

That's to the amendments. This is to the bill, not to the original Act.

It is on page 2 of the amendments, if you go on

section 6.

MR. BARBER: Okay, I see it. Thank you.

Amendment approved.

Section 5 as amended approved.

Section 6 approved.

section 7.

MR. CHAIRMAN: There are two amendments on the order paper.

HON. MR. BENNETT:

Mr. Chairman, I'd like to move the following amendments to

section 7,

on pages 9 and 10: (

a) in

section 18.26(l), by striking out "entitled"

and substituting "authorized"; (

b) in

section 18.26(2), by inserting

"hold," before "own"; and (

c) in

section 18.26(3)(a), by inserting

"own" after "hold."

MR. CHAIRMAN: The members will

appreciate that

section 7 goes from page 2 of the bill to page 11 of

the bill, and the subsections are really under the numbers.... Pardon

me, it goes to page 12 of the bill — 18.10, et cetera.

On the amendment.

HON. MR. BENNETT: Mr. Chairman, if I could just explain this, this is

only the strength in the wording. The legal people advising the drafters of

the bill suggested the word "authorized" is much stronger and more

appropriate than the word "entitled." We are inserting "hold"

before "own" and "own" after "hold" for the same reason.

They consider it to give more strength in legalese, and it's technically

more correct.

Amendment approved.

MR. LEVI:

I move the amendment standing under my name on the order paper. Have

you got it there, Mr. Chairman? It deletes the word "not" in line 1.

This is

section 7(18.1)(5).

MR. CHAIRMAN: This amendment is in two specific sections, and we should deal with the one that deals with 18.1(5), line 4 first.

On the amendment.

MR. LEVI:

That's the one I want to deal with. We had a very extensive debate on

this particular principle in the first section, which dealt with giving

the free shares the right to vote. I don't intend to repeat that

debate. That was the principle that we enunciated in the other

section

and we simply restate it here as well. For all other reasons, I'm not

going to repeat it again unless some of my colleagues are going to say

something. We feel that this is essential to the proper maintenance of

this corporation, that people who have free shares, in fact, do have

the right to vote. That's why we moved the amendment.

HON. MR. BENNETT: Mr. Chairman, we reject the amendment.

MR. HOWARD:

I just want to say, apropos of what the Premier said earlier about

trusting residents of B.C., that I, like him, trust them. I'd like to

trust them a little bit more than the Premier does by permitting them

to go to the annual meeting and have a say with the five shares that

they've got in their hands, and not to deny it to them.

One

of the arguments put forward — I believe it was by the Minister of

Finance when he had a lawyer here representing the B.C. Resources

Investment Corporation — was that it would cost too much money. It

would cost too much money — between $3 and $5 per shareholder — to send

out these various notices and advise shareholders of annual meetings

and send out proxy forms, annual reports and whatever other pieces of

paper go along with it. For the 1.8 million shareholders who have

applied for their five shares and will receive them — assuming that

there is no consolidation and assuming that none of them sell them or

otherwise dispose of them — we're talking of a cost between $5.4

million and $9 million to give notification to these shareholders about

meetings and the like to permit them to come and vote.

would seem to me that the company now has such a fantastic

capitalization, that it would be overjoyed to spend somewhere between

$5 million and $9 million to give the citizens of B.C., who own the

resources that BCRIC now has under its control, the fundamental right

to come to the annual meeting and, even though they may have only

five-share certificates, to be able to cast a ballot to be able to ask

questions of the company, to be able to see what's happening with

respect to the resources that they own. I think that on that ground it

would be very worthwhile to accept the amendment.

[ Page 432 ]

Five

dollars per shareholder is a maximum cost, because I think that

regardless of the appeal of the Premier, a lot of people understand

that some people may very well sell their five-share certificates to

others. If that happens, then the number of shareholders decreases and

the cost to the company decreases. I'm talking of the $9 million per

year as being the outside figure advanced by the Minister of Finance

earlier — $5 per shareholder to mail it times the maximum number of

holders of the five-share certificates, which is 1.8 million.

HON. MR. BENNETT:

Mr. Chairman, these shareholders own the company, and the ability of it

to grow and pay dividends depends on it having streamlined methods and

not a lot of costs. I just feel that it was in their interests to try

and provide ways in which the company can operate efficiently without a

lot of cost, without a lot of paperwork.

We in government

get so used to paperwork and accept it as a cost that we forget that

out there in the private sector the people who own the shares expect to

get dividends, and if they don't get dividends because you insisted

they have this tremendous expense, then, of course, they'll have some

reason to complain. If only governments were under the same constraint

to continually have to give dividends because of good management, we

probably wouldn't have as much paperwork as you're suggesting this

company have. I'm just saying it's out of concern for those very

investors and shareholders that you talk about, so that they have the

opportunity some day for dividends, that money won't be wasted on a lot

of costly systems.

Now they had an opportunity — and it is a

continuing one — to increase to what is called a board lot. But there

has to be some sense in administration.

MR. HOWARD: These people had their opportunity, I gather, to buy their right to vote and didn't avail themselves of it.

When

it comes to dividends, B.C. Resources Investment Corporation is going

to make the payment of dividends to the holders of these five-share

bearer certificates through the process of advertising, not by mailing.

They are just going to advertise, presumably in a newspaper, and say

they're going to declare dividends payable at so much on certain dates

and identify a dividend-paying agent, probably a bank. As I understand

it, maybe what will occur is that the person will take his five-share

certificate into the bank and say: "Here I am. My company has declared

a dividend of X dollars or cents." And he collects it in that way. If

it's a question of excessive cost and paperwork, if that is the reason

the Premier hangs onto for saying, "No, you cannot go to the annual

meeting and vote your five shares," then how about approaching it as

the company intends to approach — with the endorsement of the

government — the payment of dividends, and just advertise that there is

going to be an annual meeting? People don't have to mail them

information or anything of that sort Let the individual come with his

five-share certificate if that's all he has and say: "Here I am as a

shareholder, as an owner, a part of this company. Here are my five

shares. I know they're insignificant compared with the 95 million that

are out there, but here they are." Why not approach it on the basis of

an advertisement'?

HON. MR. BENNETT: Mr. Chairman,

the company always has the right to call an annual meeting. They have

the right to advertise. In this case you're talking about the reason

why it couldn't be done by the mailing out of notices and things. We've

given you the reason. It was a cost factor for the shareholders

themselves. As I say, it's just less paperwork, and a saving.

MR. CHAIRMAN:

Hon. members, we have a large number of amendments on

section 7. If it

is agreeable, I would like to do them in sequence — if that is possible.

The next amendment is to

section 7.

MR. BARBER: On a point of order, could the Premier do us the courtesy of sending all the amendments to

section 7 he has in hand?

MR. CHAIRMAN: All the amendments I have before me are put forward by the opposition.

MR. BARBER: Oh, well, I've got those. I'm sorry. I thought the Premier had some.

HON. MR. BENNETT: No more. Ours are all done. Have I got all yours?

MR. CHAIRMAN: I might point out that the government benches have not had a chance to see these amendments yet.

HON. MR. BENNETT: I haven't got those.

MR. BARBER: But you've told us you won't accept any of them anyway.

MR. CHAIRMAN: Order, please. The next amendment is to

section 7(18.11), line 1, moved by the member for Coquitlam-Moody (Mr. Leggatt).

On the amendment.

MR. LEGGATT:

Mr. Chairman, I will try to be fairly brief. This particular

section of

the amending bill attempts to delete certain sections of the Companies

Act as it applies to this particular corporation. First of all, the

amendment before you, Mr. Chairman, is to leave certain of the sections

of the Companies Act in as they apply to this legislation, rather than

to delete them.

Now this particular

section in the amending

Act attempts to delete quite a number of provisions that normally apply

to the operation of any company in British Columbia — as the Premier

calls it, any public company in the private sector. Let's deal with the

first one I am attempting to put back into the law and to apply to this

particular company. That is

section 172.

Up until now, up

until today,

section 172(1) applies to every corporation in British

Columbia, and I'll perhaps paraphrase it in reading it. But it says, and

I am reading from the Companies Act:

"Where

for any reason it is impractical to call a general meeting or a class

meeting of a company in the manner in which meetings of the company may

be called, or to conduct a meeting in the manner prescribed by the

memorandum of articles of this Act, or for any other reason the court

considers appropriate, the court may, on application of the

[ Page

433 ]

company, a director, a member entitled to vote at the meeting,

or on its own motion, order a general meeting or a class meeting of the company

to be called, held and conducted in such manner as the court considers appropriate,

and may give such direction as it considers necessary."

Now

the purpose of the amendment before you, Mr. Chairman, is to see that

that

section does apply to the BCRIC. I realize there is a subsequent

section we are going to be arguing in terms of the flexibility that the

Premier is asking in terms of the annual general meeting. This

amendment is simply to make 172(

l) apply to this particular

corporation so that the flexibility in the Companies Act remains.

The

second

section that I wish to still have apply to this corporation is

section 195 of the Companies Act. The government is seeking to have

this

section not apply to the BCRIC. We think it still should.

section

195 simply says:

"Every reporting company

shall, at least ten days before the date of its annual general meeting,

send by prepaid postage to the auditor and to each member at his latest

address as shown on the register of members a copy of the financial

statement referred to in

section 168 and the report of the auditor

thereon."

The purpose again, Mr. Chairman, of asking that

this still apply is that if we are so concerned that the little people

of British Columbia are involved, we want them to have the right to

attend meetings, we want the people who hold those bearer shares to

attend meetings, and we want them to have the right to get financial

information from that company. The attempt in this amending Act we have

before us is to see that this does, in fact, not apply.

Now the third section, which was 258(

l) of the Companies Act, that we think should still apply, says as follows:

"Where

a proposed purchase by a company of its shares (

a) is not to be made

through a stock exchange, or (

b) is not to be made from a bona fide

employee, or bona fide former employee of the company, or an affiliate

of the company or his personal representative in respect of shares

beneficially owned by the employee or the former employee, the company

shall make its offer to purchase pro rata to every member who holds

shares in the class or series to be purchased".

We believe that should still apply to this corporation, as it does to every other corporation.

Now

the Premier may have an explanation on that third one. I'm ready to

admit, Mr. Chairman, I wasn't too certain as to what the Act was

getting at, but my instincts are that if the general terms of the

operation of the company law in the province are to be changed and

amended by this Act.... In making this company such an exceptional one

that the normal provisions of the Companies Act don't apply to it. I

think the Premier should be under an obligation to give us a very

detailed and good explanation as to why he doesn't want the Companies

Act to apply to this corporation in each of these cases.

HON. MR. BENNETT:

Mr. Chairman, this

section modifies provisions of the Companies Act so

that they will apply to the bearer shareholders more appropriately.

What we've done in deleting these sections means they'll be picked up in

other sections later on and actually will then be more appropriate and

better for the shareholders. I'd say that where we're deleting 172,

relate that to 18.13 in the amendments; 194, relate that to 18.15; 195,

relate that to 18.16; 258, relate that to 18.19 and 18.22; and 315,

relate that to 18.24. What we're actually doing — because of the size

and the uniqueness of this company — is making more appropriate

protection rules concerning the bearer shareholders. This was done to

provide more opportunity to the company, and for them to deal with the

company. In all those areas it's a matter where their opportunities

would not be appropriately covered under the present Act.

MR. CHAIRMAN:

The next amendment to

section 7, 18.13, again moved by the member for

Coquitlam-Moody, is to delete subsection (1) of this

section and

substitute the following: "A general meeting of the company shall be

held and conducted annually."

MR. LEGGATT: This one

is a little easier to explain. The corporation has fairly requested an

Act which would give it something quite unique in the history of

companies and in the history of company law in British Columbia. They

have asked for something really very exceptional: they want the right

to avoid the annual meeting. I'm not saying they're going to avoid the

annual meeting, but this clearly does give them the right to go to

court and say to a supreme court judge: "We think it's inappropriate

that we hold an annual meeting." If they can convince that judge to

that effect, they do not have to hold an annual meeting.

The

Premier stated in this House today that their concern with regard to

this corporation is to see that the little people have some interest in

this corporation: to see that the people of British Columbia — all

these 1.8 million people who took their free shares — have this

experience of ownership. But he doesn’t want them, according to my

reading of this bill, to have the experience of attending an annual

meeting and having some say in this corporation. He doesn't give those

bearer-shareholders a vote. There is clear capacity in this bill to

make sure they're denied access to an annual meeting to find out who

the directors are, what they're being paid; to get some real

information about the operation or the assets of this corporation.

Before

we moved on this corporation, and before the original BCRIC bill was

introduced, I, as an MLA, had the right to come to this place and ask

questions of the ministers about these assets. But if this bill passes

— and if this

section passes — it will mean that no one who holds the

bearer-shares will have the right to vote. It will also mean there may

be no annual meeting at all. It may not be needed to have one.

terms of this bill, the Premier had better have a first-class

explanation why this exceptional rule should apply to this company only

and not to the rest of the corporations of the province. There is a

clear reason why they want this provision in. They don't want the

bearer-shareholders to get together and try to register those shares

and assign proxies and allow people to come to that meeting to vote.

They don't want it at all. Otherwise. If you want to have the bearer-

shareholders — who, incidentally are quite insignificant in terms of

ownership in this corporation, but nevertheless are out there —

interested in the company, Mr. Premier, it's very easy. Just stand up,

accept this amendment and say: "Yes, we'll allow the law to apply to

BCRIC

[ Page 434 ]

it does to every other corporation in British Columbia. We don't need

an exception with regard to BCRIC. We've got a public corporation in

the private sector, and we're willing to play the rules by the same

game that all the other private corporation are." But the Premier has

something different here. He's got an exceptional corporation. He wants

to rewrite the rules and change the game. The reason is he doesn't want

those little people at that annual meeting. That's the reason, Mr.

Chairman, and I would urge you to support this amendment.

HON. MR. BENNETT:

In rejecting the amendments it's not our intention to prevent anyone to

deal with practicalities or allow at least the opportunity for a proper

procedure to deal with the practicalities of meetings. I'd say that

section 172 of the Companies Act empowers a court to prescribe specific

procedures for the holding of a meeting of shareholders of a company in

circumstances where it is impractical to follow the normal procedures

established by the company's articles. This

section expands the

procedures slightly for the the resources corporation. This broader

language, Mr. Member, would permit the courts to provide that corporate

business could be transacted by some other mechanism than at an actual

meeting, for example, by means of a mail ballot — you could have a

number of ways. And it deals, of course, with the court making such a

determination.

It's really to allow additional practical

ways for the shareholders to deal with them; it isn't to restrict them.

If you were suddenly thrust into some unusual situation, such as the

new stadium that is going to be built in the greater Vancouver area not

being able to house all of the shareholders — although you would like

them all there, there is no practical housing to fit them all in — a

court may decide on some way they could manage in that particular

circumstance. That's really to expand the opportunity, not to restrict

it.

Amendment negatived on the following division:

YEAS — 22

Barrett

Stupich

Dailly

Cocke

Lea

Nicolson

King

Hall

Lorimer

Leggatt

Howard

Levi

Sanford

Skelly

Lockstead

Brown

Barber

Wallace

Gabelmann

Hanson

Mitchell

Passarell

NAYS — 28

Waterland

Nielsen

Chabot

McClelland

Williams

Hewitt

Hyndman

Vander Zalm

Heinrich

Ritchie

Strachan

Brummet

Ree

Segarty

Curtis

McCarthy

Phillips

Gardom

Bennett

Wolfe

McGeer

Fraser

Jordan

Kempf

Davis

Davidson

Smith

Mussallem

Mr. Barber requested that leave be asked to record the division in the Journals

of the House.

MR. CHAIRMAN:

The next amendment creates 18.25(2): "No