1975 Legislative Session: 5th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, APRIL 28, 1975

Afternoon Sitting

[ Page

1767 ]

CONTENTS

Oral questions

Discussions with Shell on proposed oil refinery. Mr. Bennett

— 1767

Appointment of commissioner for Columbia River inquiry. Mr. D.A. Anderson

— 1767

Further meetings with federal energy Minister. Mr. Wallace — 1767

Bilingual plaques in Rotunda. Mrs. Webster — 1768

Purchase of Beacon Body Shop. Mr. Phillips — 1768

Municipal assessment charges. Mr. McGeer — 1768

Allocation for Marguerite refit. Mr. Curtis — 1768

Statisticians, librarians in Consumer Services offices. Hon. Ms. Young —

Houston community resources board. Mr. McClelland — 1769

B.C. Intervention in CTC hearings on PWA. Mr. Gibson — 1770

Committee of Supply: Department of Transport and Communications estimates.

On vote 250.

Mr. Phillips — 1770

Hon. Mr. Strachan — 1774

Mr. Gardom — 1779

Hon. Mr. Strachan — 1784

Mr. Wallace — 1787

Hon. Mr. Strachan — 1791

Mr. Schroeder — 1792

Mr. McGeer — 1796

Mr. Morrison — 1797

Hon. Mr. Strachan — 1800

Division on time of next sitting — 1805

The House met at 2 p.m.

Prayers.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Speaker,

I would like to draw the attention of the Legislature today to a gentleman

in the gallery who hails from Kimberley. I don't know whether you will give

him a welcome or not, but he was the one who caused it all; he nominated me

back in 1949 to run for the Legislature: Mr. Ed Johnson.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, we have two young

gentlemen visiting us from Alberta who are Members of the Young

Progressive Conservative Association in Alberta, Mr. Tim

Woolstencroft and Mr. Robert Woolstencroft. And I would ask the

House to give them a welcome.

HON. J. RADFORD (Minister of Recreation and Conservation):

Mr. Speaker, I would ask the House to welcome here today

students from David Thompson high school in South Vancouver.

They are accompanied by their teachers: Mr. Ellis, Mr. McCoy

and Mr. Young.

Oral questions.

DISCUSSIONS WITH SHELL

ON PROPOSED OIL REFINERY

MR. W.R. BENNETT (Leader of the Opposition): To the Premier.

As three jets from Shell International were in Victoria over

the weekend and the president of Shell Oil was here, I wonder

if the Premier could advise the House whether any agreement

with Shell Oil was reached in regard to the proposed oil

refinery.

HON. D. BARRETT (Premier): No.

MR. BENNETT: Then would the Premier advise if discussions

are still going on between the government and Shell Oil?

HON. MR. BARRETT: Discussions are going on, Mr. Speaker,

with unnamed oil interests.

MR. BENNETT: Was Shell Oil, with their three jets from the

States, just here to compare air forces with the Government of

British Columbia? (Laughter.)

HON. MR. BARRETT: There was no announced invasion that I was aware

of, and I have no knowledge of three jets from Shell Oil. I find it interesting

that the Leader of the Opposition would ask.

Interjection.

HON. MR. BARRETT: I thought, according to him, that our

government had driven all business out of the province. They're

rushing to get in — in jets.

APPOINTMENT OF COMMISSIONER

FOR COLUMBIA RIVER INQUIRY

MR. D.A. ANDERSON (Victoria): To the Minister of Lands,

Forests and Water Resources: may I ask the Minister whether his

inquiry commissioner has been appointed and whether he is ready

to make the name public at the present time of the inquiry

commissioner on the Columbia River treaty?

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources):

The answer is no, Mr. Speaker.

FURTHER MEETINGS WITH

FEDERAL ENERGY MINISTER

MR. WALLACE: I would like to ask the Premier and Minister of

Finance: in the light of last week's meeting in Ottawa between

the federal government and American officials regarding the

export price of natural gas, has the Premier been in touch with

the federal Minister of Energy, Mines and Resources (Hon. Mr.

Macdonald) since these talks?

HON. MR. BARRETT: No, Mr. Speaker. I don't expect the

federal government to back down on its pledge to the Province

of British Columbia made in public in front of all

Canadians.

MR. WALLACE: A supplementary, Mr. Speaker. I guess the

Minister anticipated the supplementary. I was going to ask if

the Minister has any evidence to indicate that there has been

any softening or changing of position, as far as he can

determine, in the commitment made by Donald Macdonald to the

public of Canada at the energy meeting in the light of his

discussions with the Americans last week.

HON. MR. BARRETT: No, Mr. Speaker, nor have I asked. I do

not believe that any federal government, once having given its

commitment in public, would ever renege on that commitment to

not only the people of British Columbia but to all of Canada,

including the municipalities.

MR. WALLACE: Just a final quick supplementary. Has the

Minister set up any arrangements for the next meeting with the

federal authority to deal with the subject of the continuing

decisions about the price of natural gas?

[ Page 1768 ]

HON. MR. BARRETT: Mr. Member, we are told that perhaps

sometime in July the federal government will either announce a

new price for oil on its own or we might be summoned together

again. In terms of natural gas, to my knowledge there is no

backing down by the federal government for the commitment to

have a price increase on August 1.

BILINGUAL PLAQUES IN ROTUNDA

MRS. D. WEBSTER (Vancouver-South): Mr. Speaker, a question

to the Provincial Secretary. I was disturbed this weekend when

I read in The Vancouver Sun that some of the beautiful

bronze plaques in the rotunda over here will be removed because

the federal government has made the decision that all the

plaques here have to be bilingual. What control has the federal

government over this building? Are these plaques to be replaced

with bilingual plaques?

HON. E. HALL (Provincial Secretary): I am afraid I don't

have the answer to that question.

Interjections.

MR. SPEAKER: May I point out to the Hon. Members that I don't intend

to do as the Speaker in Ottawa did — incur the wrath of a lady Member for

not acknowledging her in question period?

HON. MR. HALL: I intend to find out what is going on, Madam

Member, but I have no correspondence. Of course, I am not the

only person who has some responsibility for this building. The

Speaker has the majority of the responsibility.

PURCHASE OF BEACON BODY SHOP

MR. D.M. PHILLIPS (South Peace River): I would like to

direct my question to the Minister of Transport and

Communications and president of the Insurance Corp. of B.C.

Would the Minister advise if the government has purchased

Beacon Body Shop?

HON. R.M. STRACHAN (Minister of Transport and Communications): Yes.

MR. PHILLIPS: Would the Minister advise the House what price

was paid for Beacon Body Shop?

HON. MR. STRACHAN: It is my understanding $422,000.

MR. PHILLIPS: Would the Minister advise the House what

method of appraisal was used to determine the value of over

$400,000 for this body shop, in view of its recent value being

less than that?

HON. MR. STRACHAN: Normal business practices.

AN HON. MEMBER: Normal for who?

MUNICIPAL ASSESSMENT CHARGES

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, for the

Minister of Finance. Opposition is growing around the province

to the new policy of the government with regard to assessment

charges. Some municipalities are being charged six times what

it previously cost them to carry out the assessment. I wonder

if the Minister of Finance would detail why the costs have gone

up so much, for the benefit of the cities and municipalities

who are opposed to this policy.

HON. MR. BARRETT: Yes, I find it difficult to understand the

reaction, Mr. Member, since all Members of this House voted in

favour of establishing the authority. Then the UBCM submitted

the list of people they wanted on the authority. However, I

will check, take the question as notice and file the detailed

cost. But after they endorsed the programme in the House and by

the UBCM, now they are critical. I just don't understand

politics sometimes, Mr. Speaker. I don't understand it; I get

confused sometimes.

ALLOCATION FOR MARGUERITE REFIT

MR. H.A. CURTIS (Saanich and the Islands): To the Minister

of Lands, Forests and Water Resources. I wonder if the Minister

will now indicate to the House, and therefore to the people of

British Columbia who pay the bill, the budgetary amount which

has been allocated for renovation and refit of the Princess

Marguerite for the 1975 season.

HON. R.A. WILLIAMS: Mr. Speaker, it will be necessary to

form a new Crown corporation with respect to this operation. We

anticipate the name will be the British Columbia Steamship Co.

We will put the legislation before the House in terms of a vote

and then we can see how Her Majesty's official opposition feels

about this matter.

MR. CURTIS: A supplementary, Mr. Speaker. I thank the

Minister for that piece of information at any rate, but has a

budget been determined? The work is ongoing right now in

preparation for next month's season, I think.

HON. R.A. WILLIAMS: A tentative budget is available, but

details will be brought to the House at a later stage.

[ Page 1769 ]

MR. PHILLIPS: How much?

MR. CURTIS: Mr. Speaker, a supplementary to the same

Minister and in connection with the same vessel and the Crown

corporation. What connection and interchange will there be

between this new Crown corporation for one vessel and existing

B.C. ferry personnel, shore side staff and full....

HON. R.A. WILLIAMS: There will be full discussion among all

the parties. There is full cooperation among all the various

Crown entities these days. It is not the way it used to be.

STATISTICIANS, LIBRARIANS IN

CONSUMER SERVICES OFFICES

HON. P.F. YOUNG (Minister of Consumer Services): Mr.

Speaker, on Thursday last, I took as notice a question from the

Hon. Member for South Peace River (Mr. Phillips). He asked if

there are statisticians and librarians in the various

storefront offices of the Department of Consumer Services.

My reply was that such personnel were only in Victoria. They

are actually in the department located in Victoria, not in the

storefront office.

On a supplementary the Hon. Member said he had been advised

that there is a statistician and a librarian in the Prince

George office. To me, Mr. Speaker, a statistician is a person

who has a degree in economics, accounting or the related

mathematical sciences. A librarian is one who has a degree in

library science.

Mrs. Linser, who has held herself out to be a statistician and a

librarian to the Hon. Member, is employed as a clerk 2 in the Prince

George office. She has no degrees in any of those disciplines. She is

required to keep records of phone calls, visits, numbers of complaints

and to check books in and out of our small library in that office as

they are borrowed by interested consumers. In view of Mrs. Linser's

recent actions, I feel some clarification is necessary. She commenced

employment with the department on January 9 of this year as a clerk 2.

On February 18 she applied for the position of Consumer Services

officer in the Prince George office, as did Mr. Rick Clements, the

trade practice....

MR. SPEAKER: Order, please. I wonder if the Hon. Minister

could give the biography by tabling the document, or something

of the sort.

HON. MS. YOUNG: I can do that, Mr. Speaker, but I would just

like to comment that she has made some rather serious

allegations, and they may result in legal action. I want the

House to be aware of the background of the matter.

MR. PHILLIPS: I would just like to ask the Minister if she doesn't

feel that she moved hastily and brutally in taking political revenge against

this employee. Should she not have given her a medal for standing up and telling

the truth? And due to the sloppy operation of that office, should not the

manager of the office have been fired instead of the employee?

HON. MS. YOUNG: No, I most certainly do not, Mr. Speaker. In

fact, I was the one who ordered that she be relieved of her

duties.

MR. PHILLIPS: On what grounds?

Interjections.

AN HON. MEMBER: Political firing!

MR. SPEAKER: Order, please. The Hon. Member asked the

question; why not hear the answer?

HON. MS. YOUNG: Thank you, very much, Mr. Speaker, for

drawing that to the Member's attention. I would like to point

out that she submitted her resignation on April 15 to become

effective April 30. She is on the payroll and will remain on

the payroll until such date. However, there are matters of

confidentiality in our department dealing with debtors,

creditors, businesses, consumers, consumer complaints, and

inasmuch as there is a

section in the Trade Practices Act that

requires confidentiality of all people of the department, I

felt that her actions were jeopardizing the confidentiality of

a great many people and that she should be relieved of her

duties.

MR. PHILLIPS: Mr. Speaker, would the Minister just confirm....

MR. SPEAKER: Order, please. I'm not inviting speeches. Do you have a question?

MR. PHILLIPS: Yes. I'd like to ask the Minister: does she

not believe that this is political interference in firing a

person who does not hold an NDP card?

MR. D.E. LEWIS (Shuswap): Shame! Shame!

HOUSTON COMMUNITY RESOURCES BOARD

MR. R.H. McCLELLAND (Langley): Mr. Speaker, a question to

the Minister of Health. I wonder if the Minister could confirm

that he, or at least a government source, has ordered an

election for a community resources board in Houston on June 26. Is that correct?

HON. D.G. COCKE (Minister of Health): I guess you got a phone call from the mayor of Houston this

[ Page 1770 ]

morning, didn't you? (Laughter.)

I was in Houston on the weekend. I found the town completely

divided over a question of when the election should be. I found

some of the opposite Member's people making political hay out

of what I consider to be a very serious matter. There was no

question but what there was going to be an election. As a

matter of fact, all they asked in Houston was that it be

delayed until November. When I saw the kind of thing that was

going on up there, I felt that there was no reason for a delay

because there was an unfortunate situation where the Houston

clinic couldn't work under the present circumstances, in my

view. Therefore, I've set up a situation where they're going to

have an election on June 23, yes.

MR. McCLELLAND: A supplementary, Mr. Speaker. Is it true

that the new community resources board, when it's elected on

June 23, will replace the present hospital board elected by the

hospital society?

HON. MR. COCKE: Mr. Speaker, the Community Health Centre in

Houston no longer is a hospital. In this province in the past,

in order to facilitate doctor services within some communities,

we've set up non-bedded hospitals with a hospital society. The

area in Houston no longer requires a hospital society. They,

along with the other four community health centres, are being

asked to set up a new board under an entirely different

circumstance, because now it encompasses other services.

Why they asked for the moratorium I'm not quite sure. But I

suggest to you that I felt there was no reason for a

moratorium, Particularly going up there and finding that a

hospital society wasn't presently serving the community, to the

best of my knowledge, when I had a good look at it.

MR. SPEAKER: The Hon. Member....

HON. MR. COCKE: There's nothing particularly disadvantageous

here.

MR. McCLELLAND: Mr. Speaker, aren't we allowed to have

supplementaries? I've only asked one.

MR. SPEAKER: Well, you've had two questions.

MR. McCLELLAND: No, I haven't.

MR. SPEAKER: There are two other Members who are desperately

seeking the floor who haven't been heard yet. The Hon. Member

for North Vancouver-Capilano seeks the floor.

MR. McCLELLAND: What do we get? Do we get two now? Two? Is

that what we get?

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: It's a matter of discretion. One has to use

discretion; that's all one can do.

MR. McCLELLAND: Oh, I see. Okay.

MR. SPEAKER: The Hon. Member for North Vancouver-Capilano,

please. I'll come back to you if there's time. (Laughter.)

B.C. INTERVENTION IN

CTC HEARINGS ON PWA

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, a

question for the Premier. Has the government had any

conversations with Ottawa with respect to intervening in the

proposed Canadian Transport Commission hearings into the

takeover of PWA by Alberta?

HON. MR. BARRETT: I'll take that as notice, Mr. Member.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF

TRANSPORT AND COMMUNICATIONS

On vote 250: Minister's office, $131,898.

MR. D.M. PHILLIPS (South Peace River): Did the Minister wish

to make an opening statement?

MR. W.R. BENNETT (South Okanagan): All his statements are

deficit.

MR. PHILLIPS: Maybe the Minister considers that devastating

statement he tabled in the Legislature on Friday his statement.

I'd just like to ask the Minister, in view of the enormous

deficit which the Insurance Corp. of British Columbia has run

up during the first year, how he is ever going to keep his

election promise of $25 car insurance if he can't do it with

the rates he has been charging.

I'd also like to ask the Minister how he's going to keep his

promise that the Insurance Corp. of British Columbia is going

to stand up on its own two feet and not be subsidized by the

taxpayers of British Columbia.

Mr. Chairman, I'd like to ask the Minister if it is true

that in the fall of 1973, before Autoplan actually began,

ICBC's insurance personnel, aided by actuarial advice, proposed

a break-even rating schedule. Were there, indeed, two

schedules, one recommending a 10

[ Page 1771 ]

per cent increase in the rates over the existing rates of

those of private insurance companies and another rate

schedule

which recommended that the existing rates be carried on, which

would have brought in either a break-even position at the end

of the first year or the second one showing a slight

profit?

Is it true, Mr. Chairman, that the decision to use a lower

rate structure was a political decision of a caucus committee

of the New Democratic Party? Was this a political decision to

lower the rates and to bring in a rate structure which would

run up this huge deficit in the first year of operation? Was

this a political decision without any regard whatsoever to

business principles, without any regard for inflation or other

cost-increase factors?

Was the decision to decrease the rates by 10 per cent as

recommended by the actuaries a political decision of caucus,

and did the now Minister of Agriculture (Hon. Mr. Stupich), who

was a chartered accountant, speak out against this rate

structure?

Mr. Chairman, this was a politically foolish act of

mismanagement that guaranteed this whopping deficit that the

Insurance Corp. of British Columbia has run up during its first

year of operation.

I'd like to ask the Minister if there is a plan to go to

more realistic rates, or will the taxpayers of British Columbia

be subsidizing the Insurance Corp. not only this past year but

maybe twice that much in the year that we're in at the present

time? I'd also like to ask the Minister if he's holding back on

a rate increase until after the next election.

I'd like to ask the Minister how many vehicles owned by the

government are insured by the Insurance Corp. of British

Columbia. I'd like to ask what rates the government is paying,

and in view of the fact that the government was paying only

approximately $25 per car to have their cars insured or to pay

for damage to their vehicles, does not the Minister consider

this a subsidy to the Insurance Corp. of British Columbia by

the taxpayers?

What rate is B.C. Hydro paying to have their vehicles

insured? What rate is the British Columbia Railway paying? Are

Hydro now insuring their electric trolley buses, which they

were not insuring before? Is the insuring of these buses part

of the huge operating deficit of B.C. Hydro that was not

prevalent before? Is this why the Hydro has lost $17 million in

the operation of transit in the lower mainland?

Mr. Chairman, on page 8 of the report we see where 26,000 motorists were

refunded approximately $835,000. I would like to ask the Minister where in

this report that $835,000 shows up. Were the refunds paid out of the insurance

corporation funds, or are they going to be paid by the Government of British

Columbia out of consolidated revenue? The decision to give a refund to anybody

who paid more insurance through ICBC than through a private source was a

political decision, and it was made without consultation with the management

of the Insurance Corp. of British Columbia.

Who ordered it? Was there a survey done before it was

ordered, before it was announced by the Premier? Did the

management team of the insurance corporation realize that the

Premier was going to make this announcement when he made it?

Was there a study done to determine how much money this was

going to cost the insurance corporation? No, Mr. Chairman. The

answer is no.

Did the auditors recommend that this had to be paid by the

government and should not be an operating deficit of the

insurance corporation because it was a political decision? I

would like to know who is going to pay, and why. Is there going

to be a supplementary report sent out to advise the public

exactly how much money is going to have to be paid? There is

not only the $835,000, Mr. Chairman, that shows up in the

report, but there is no figure estimated as to how much it

costs to administer the refund.

Was there a special department set up? Were there special

personnel hired? Who paid those personnel? Will there be

another subsidy from the government to look after this

particular phase of the operation that was a political

decision?

Mr. Chairman, this is the problem with the Insurance Corp.

of British Columbia — political interference. That's why the

taxpayers of this province are faced with a whopping

$34,179,000 deficit in the first year of this operation.

AN HON. MEMBER: Who pays?

MR. PHILLIPS: Who pays? The taxpayers pay.

Was there a commitment, Mr. Chairman, through you to the

Minister, from the Premier and Minister of Finance to pay this

$835,000 refund? Was there a commitment from the Minister of

Finance? He's the man who made the decision. I would like to

ask the Minister what would have happened had the refund been

$5 million. Was there any study done at all?

Mr. Chairman, I would like to ask the Minister how many

consultants and how many consulting firms were hired during the

past year and during the amount of time until February 28. How

many consultants and how many consulting firms were hired by

the Insurance Corp. of British Columbia to do surveys when

anomalies appeared in the operation of the corporation? What

fees were involved? Where were the consulting firms from? Were

any consultants hired to analyse the reports of

consultants?

Can the Minister supply a complete accounting of fees and

expenses paid to cabinet Ministers who serve as directors on

the Insurance Corp. of British Columbia? Were they paid any

fees for any of their meetings, Mr. Chairman? What expenses

were cabinet

[ Page 1772 ]

Ministers allowed to collect from the Insurance Corp. of

British Columbia for attending board meetings?

What were the other directors who are not cabinet Ministers?

What

schedule of fees do they have for the services they

perform for the Insurance Corp. of British Columbia? How much

are these directors who are not cabinet Ministers paid per

meeting for attending directors' meetings?

Mr. Chairman, I'd like the Minister to advise me if David

Korbin, a director of the Insurance Corp. of British Columbia

and president of the B.C. Development Corp., engineered the

purchase of land for the Insurance Corp. of British Columbia

near Vernon which is to be used as a salvage yard. I'd like to

ask the Minister how much per acre was paid for this land. What

realty firm was involved and who carried out the appraisal on

the land to determine the price?

Mr. Chairman, I'd like to move on to another area in the

Insurance Corp. of British Columbia. I'd like to ask the

Minister why the top personnel in the management team of the

Insurance Corp. of British Columbia are from Regina. How many

of the top management team in the Insurance Corp. of British

Columbia are from B.C.? If the majority of them are from

Regina, I'd like to ask the Minister if he has no faith in the

insurance personnel in British Columbia.

MR. D.E. LEWIS (Shuswap): They're all Canadians.

MR. PHILLIPS: Mr. Chairman, there seems to be a very high

turnover in the top management of the insurance corporation,

and I read in the report that the morale is high. Well, if the

morale is high in the insurance corporation, how come the high

turnover and deterioration of employee relations? Do we have in

the insurance corporation management by confrontation? Of the

14 original directors, how many are still there? What is the

percentage of turnover? Maybe we should call the top management

in the insurance corporation the Regina Roughriders because

they're all from Regina, and it appears to me that they ride

roughshod over the rest of the employees and the rest of the

management.

I'd like to ask the Minister where the management meetings

of the insurance corporation are held. Were any of these top

management meetings held on yachts? Were any of these top

management meetings held in the Hotel Vancouver? Were any of

the top management meetings held in the Hyatt Regency? Were any

of the top management meetings held at Harrison Hot Springs? Of

these meetings, I'd like to ask the Minister who was invited to

attend these meetings and if their expenses were paid, other

then those who work for the insurance corporation.

I'd like to ask the Minister if Dunsky Advertising organized a meeting held

in the Hyatt Regency on or about August 13, 1974, at which Pat Rose and his

group of singers entertained about 100 of the top management of the Insurance

Corp. of British Columbia. Was this meeting organized by Dunsky Advertising?

Who paid for the entertainment? Who paid the booze bill? Who paid for the

dinner, Mr. Chairman?

AN HON. MEMBER: The taxpayers of British Columbia — who

else?

MR. PHILLIPS: Mr. Chairman, is that the reason for the huge

deficit? Is this some of the deficit money that the taxpayers

are going to have to pick up? I'd like the Minister to answer

me.

Interjections.

MR. PHILLIPS: Yes, that's right, Mr. Chairman. Is 10 cents a

gallon of gasoline going to pay for this meeting? Is

entertainment necessary at these management meetings or is this

to improve the morale of management? We don't seem to have too

much competition in the Insurance Corp. of British Columbia.

You wouldn't think it was necessary to entertain the top

management to keep their morale up when they have no

competition. I'd like to know what....

MR. N.R. MORRISON (Victoria): A farewell party.

MR. PHILLIPS: Yes, maybe it was a firing party, a farewell

party for those who were going. Maybe it was a party to

encourage new management into the top echelon.

I'd like the Minister to advise me what tenant improvements

were made on the 33rd floor where the insurance corporation has

its offices. I'd like the Minister to tell me how much it cost

to redecorate and renovate the general manager's office on the

33rd floor and the other executive quarters on the 33rd

floor.

I'd like to ask the Minister: was the 33rd floor under the

original lease-purchase with the Royal Bank? Or was it taken

out as an afterthought?

I'd like to know how many times the 33rd floor executive

suites were redecorated and what the costs are. I understand

that the boardroom table in the executive suite on the 33rd

floor is large enough to be used for a log barge.

AN HON. MEMBER: Even bigger than Levi's desk.

MR. PHILLIPS: Yes, far bigger and far more impressive and

expensive than the desk of the Minister of Human Resources

(Hon. Mr. Levi). I'm given to understand that this meeting

table is 30 feet

[ Page 1773 ]

long. Maybe the Minister would advise me, while he's at it,

how much this table cost and why it was manufactured in

Calgary, Alberta. Were there no plant facilities large enough

in the Province of British Columbia to manufacture a

30-foot-long boardroom table?

AN HON. MEMBER: We're short of timber here.

MR. PHILLIPS: I understand that the table is made from

British Columbia wood, but it had to be shipped in eight pieces

from Calgary. How much was the extra cost for this 33rd floor?

What did it cost to install the full kitchen facilities on the

33rd floor in the general manager's suite of offices?

MR. D.E. SMITH (North Peace River): What are they for?

MR. PHILLIPS: When we're suffering a deficit position and

the taxpayers are going to have to subsidize this insurance

corporation, don't you think that the lavish furnishings are

just a little bit too much for the taxpayers of British

Columbia?

I'd like to ask the Minister in charge of the insurance

corporation if they've ever had a champagne party on the 33rd

floor. If they have, who supplied the champagne? Was it paid

for by the Insurance Corp. of British Columbia? If it was

donated, who donated it?

I'd like also to find out from the Minister in charge of the

insurance corporation if they're going to take these lavish

furnishings and the kitchen with them when they move, in three

short years, to New Westminster. It must have cost thousands of

dollars to redo this 33rd floor, and now we're going to have to

leave all of these kitchen facilities and catering facilities

behind. Is the Royal Bank going to reimburse the Insurance

Corp. of British Columbia for these facilities? What is in the

agreement? "Leasehold improvements." Will the taxpayers of this

province be reimbursed?

I'd like to ask the Minister if there have been any problems

with internal theft from the Surrey salvage yard. If so, what

security measures have been taken to see that there is no

recurrence of this? Were these thefts external or internal?

While you're at it, Mr. Chairman, I'd like to ask the Minister

why the security officer for the Surrey salvage yard recently

quit. Is there any accounting to determine that the same

accessories are on an automobile when it's sold as were on it

when it went in there as a wrecked vehicle?

I'd like to ask the Minister what the total employee population of the Insurance

Corp. of British Columbia is today. What is the total number of people employed,

including temporary staff? And I'd like the Minister to advise me if the number

of people employed in the insurance corporation today is greater than it was

a year ago. If so, why, when you needed extra personnel on start-up, are there

more people employed today than there were a year ago?

Mr. Chairman, I'd like the Minister to advise me of the

complete cost of the computer installation in the Insurance

Corp. of British Columbia? Was it in excess of $10 million?

And if it was in excess of $10 million, how come it is not

fully functional now that we're into our second year of

operation? Is it not true that due to the inefficiency, the

rating structure of premiums and losses will not be available

from the computer in time for the 1976-77 fiscal year, and this

information will have to be developed by an outside

computer?

Who made the deal for the computer in the first place? Who

set it up? And if we paid over $10 million, why is it not fully

operational now? Why can we not get all of the information out

of the computer that we'd like to have?

I'd like the Minister to advise me if any of the directors

of the Insurance Corp. of British Columbia have arranged

employment for any of their friends at the insurance

corporation. If so, has the Minister condoned these

actions?

I'd like to ask the Minister what Dunsky Advertising

billings were for the first year. For the year reported, what

is the total amount of Dunsky Advertising's billings to the

Insurance Corp. of British Columbia?

I would like the Minister to answer me, while he is at it:

did Dunsky Advertising perform any service for the Insurance

Corp., apart from advertising? Did Dunsky Advertising have any

charge to the Insurance Corp. of British Columbia for advice to

the top management of the Insurance Corp. In dealing with the

media? Was there any charge for this service?

Were Dunsky Advertising charges reasonable and can the

public be assured that the costs and profits were reasonable?

What method is used by the insurance corporation to ascertain

that the costs and profits of Dunsky Advertising are not out of

line with those which would be charged by another advertising

agency?

I might ask the Minister, while I am at it, whether there

was any competition for the account. Was there a competitive

bid? Did anybody else bid? Did the advertising firm supply

copies of their material so they could be scrutinized? I'd like

to know how the decision was made. How did they reach the

conclusion that Dunsky Advertising should have the Insurance

Corp of B.C. account?

While we are at it, Mr. Chairman, I would like the Minister

to advise me of the complete and total cost of "operation

turnaround" — where we had the full page ads in all the daily

and weekly newspapers in British Columbia. It was a campaign

which was meant to change the image of the Insurance Corp. of

British

[ Page 1774 ]

Columbia for the taxpayers of this province. These were the

ads, Mr. Chairman; you will recall them well: "This Is Your

Insurance Company." What was the total cost of that campaign?

And, mainly, could the Minister advise me if the campaign was a

success? Was the campaign a success? Did that million or so

dollars paid to Dunsky Advertising for that campaign change the

image? Did it make the taxpayers of British Columbia really

feel that the insurance corporation is owned by them?

I would like the Minister to tell me if he, personally, is

satisfied with the performance of Dunsky Advertising. Or are

the Minister's hands tied due to the fact that the Premier has

affiliations with Dunsky Advertising? Maybe he made the

recommendation that Dunsky Advertising have the account for the

Insurance Corp. of British Columbia. Does the Premier thank

Dunsky Advertising for winning the election in 1972? Is that

why Dunsky Advertising has the insurance corporation account?

I'd like the Minister to advise me if he personally is

happy.

Did Dunsky Advertising, on behalf of the Insurance Corp. of

British Columbia or the government or on its own, retain any

outside research firms to carry out opinion surveys to

determine public attitudes toward the Insurance Corp. of

British Columbia or Autoplan? I would like to ask the Minister,

also, if he would file with the House the results of these

surveys...

MR. R.H. McCLELLAND (Langley): Hear, hear!

MR. PHILLIPS: ...so that the Members of the Legislature can

look at these surveys and determine whether the people of

British Columbia feel that the insurance corporation is being

well run. Or, Mr. Chairman, were there political questions in

this survey? Were there questions in this survey with regard to

the performance of the government, with regard to the public's

attitude about the New Democratic...the northern depression

party — I mean the no-deficit party or no-debate party? I think

the Members of this Legislature have a right to see these

surveys.

[Mr. Kelly in the chair]

It would be very interesting. Are these surveys still going on? Are they

being carried on by Dunsky? Are they being carried on by a firm hired by Dunsky,

or are they being carried on now by an independent firm? If the surveys that

are being carried on are not under the rule and thumb of Dunsky, how come?

I understand Dunsky did the first surveys. It would be interesting to see

the results of these surveys so that we would know how many were done and

what questions were asked. I would like to have the Minister advise me who Dunsky Advertising is responsible

to.

MR. CHAIRMAN: Hon. Member, the green light is on.

MR. PHILLIPS: Yes, I have no trouble with colours

either.

Who is Dunsky Advertising really responsible to — to the top

management of the Insurance Corp. of British Columbia, or are

they responsible directly to the Premier of this province? Are

they responsible to the directors who are cabinet Ministers?

Are they responsible to the cabinet, or are they responsible to

that caucus committee that put their political fingers in and

made the political decision on the rate structure? To whom is

Dunsky Advertising really responsible?

I hope the Minister will be frank and candid in answering

these questions I have posed this afternoon. I hope that he

will endeavour to assure the taxpayers of British Columbia who

are going to have to subsidize this huge deficit on which the

Minister said there would be no deficit. I would like to remind

the Minister in closing, Mr. Chairman, of his remarks that the

Insurance Corp. of British Columbia will stand on its own two

feet and that there will be no subsidization of the insurance

corporation. I hope that the Minister will be able to assure

the taxpayers of British Columbia that the Insurance Corp. of

British Columbia is being well run, that there is no waste,

that all of the costs involved in redoing the 33rd floor will

be returned, that the millions of dollars being spent in

advertising and public relations surveys are doing the job.

It amazes me, Mr. Chairman, when we have an insurance

corporation with no competition whatsoever, that we would have

to spend these huge amounts of taxpayers' money and huge

amounts of the motoring public's money on advertising to sell

them their own company.

AN HON. MEMBER: Right on.

HON. R.M. STRACHAN (Minister of Transport and Communications): I want

to thank the Member for that interesting dissertation extended over a considerable

period of time, asking many questions that I have already answered in the

House on a number of occasions.

SOME HON. MEMBERS: Oh, oh!

HON. MR. STRACHAN: Could I have some order, please, Mr.

Chairman?

AN HON. MEMBER: Let's get some answers out of you.

[ Page 1775 ]

HON. MR. STRACHAN: Well, look, I just got out of my seat. I

listened to him very carefully and didn't say a word.

AN HON. MEMBER: Nobody is bothering you.

HON. MR. STRACHAN: You've just been babbling from the minute

I stood up.

AN HON. MEMBER: Oh!

HON. MR. STRACHAN: You've been making a lot of

statements.

MR. CHAIRMAN: Order! The Minister has the floor.

HON. MR. STRACHAN: The Member who just sat down has been

making a lot of statements, many of them absolutely false....

Interjection.

HON. MR. STRACHAN: I listened to him without interruption; I

demand the same thing. Many of them were due to the kind of

rumour that is going around; many of them were due to the fact

that that Member didn't read this report.

There is a significant line in this report that has never

before appeared in any financial statement put forward by any

insurance company in the Province of British Columbia. I refer

you, first of all, to the auditor's statement which says that

this report....

MRS. P.J. JORDAN (North Okanagan): What page?

HON. MR. STRACHAN: Page 14.

"The financial statement indicates the financial position

for the year" — when it then ended — "in accordance with

generally accepted accounting principles applied on a basis

consistent with that of the preceding period, after revision of

the financial statement for that period explained in note

2."

Then I want you to turn to note 2, "The Basis of Reporting," on page 20.

I want the Member for Vancouver–Point Grey to remember that a few years ago

I gave him a copy of an

article that appeared in the Harvard Business Review

commenting on the need for standard accounting practices and reporting. That

note 2 points out that last year the Canadian Institute of Chartered Accountants

decided that there should be a standard form of accounting procedure and reporting.

This is the first time that has been available for any insurance company accepting

that standard reporting practice of any insurance company anywhere in Canada.

I think that is significant and is a measure of the figures that are in here.

With regard to the questions the Member asked, insofar as

the rates were concerned they were decided by the directors of

the corporation based on the information and decisions they

made and the situations they saw at that time.

Is there a plan to go back to more realistic rates? You have

my press statement of the other day. I warned that unless there

was an improvement in the accident rate, we would certainly

have to consider an increase in the rates.

How many vehicles insured by government are owned by the

government? The figure is 9,642.

AN HON. MEMBER: Whew!

HON. MR. STRACHAN: The government has always had lots of

vehicles. They are paying the same rate as anyone else. The

B.C. Hydro rates are the same as anyone else's. You are turning

around there. If you are saying that the fact that they are

paying for insurance is the cause for the deficit, it's

indicating that the insurance is no costlier than

previously.

As far as the $25 figure is concerned, I've explained that

to you previously. That was a figure that was presented to this

House on the basis of a report made by the previous

administration. We didn't know, and we were never told when we

were in opposition, that on top of that there were all the

Attorney-General's costs and a series of costs, and that

individual civil servants involved in accidents found

themselves involved in court cases because of that procedure. I

will not leave any civil servant in this province without

protection and have him hauled into court for something he's

done while he was working for the people of this province. You

were quite prepared to do that; I am not. That is why every

government vehicle carries insurance in the same way as any

other vehicle.

As far as consultants are concerned, naturally when you

start up a major operation you have to have consultants. There

were a number of consultant firms retained for a variety of

reasons, and every one of them did a first-class job in helping

us get that large organization on the road.

You talked about turnover in directors. There have only been

two or three people in the senior group who have left the

organization, and that is public knowledge.

Top management meetings have been held in a number of

places. There was a meeting of the directors at Harrison Hot

Springs.

What improvements were made on the 33rd floor? Yes, it was

in the original lease, and the former Attorney-General of this

province, Mr. Peterson, who drew up the terms of that lease for

the owner, said that we had received an exceptionally good

[ Page 1776 ]

agreement.

You are completely wrong about that fancy kitchen. It is a

standard kitchen. (Laughter.)

Interjections.

HON. MR. STRACHAN: I listened to you. I listened to your

phony, false accusations in quietness. I expect the same

treatment. But you don't want the answers. You're great at

asking questions, but you are not very good at taking the

answers.

Interjections.

HON. MR. STRACHAN: Do you want any answers to questions, or

don't you? If you want me to shut up, I'll shut up and sit

down. But don't go out of here and say I don't answer

questions.

MRS. JORDAN: Tell us about the yacht.

HON. MR. STRACHAN: There has never been a meeting of the

directors on a yacht.

AN HON. MEMBER: Why not?

HON. MR. STRACHAN: Somebody says: "Why not?" I don't know

why not. The Member for North Vancouver-Capilano (Mr. Gibson)

didn't invite us to have a meeting on his yacht. That's why.

Otherwise we might have had one.

MRS. JORDAN: He pays for his own tub.

HON. MR. STRACHAN: I pay for my own too. Do you want answers

or don't you about this 33rd floor?

It's an extremely good rate. We had people going without

their lunch period, working at night in order to get this show

on the road. That kitchen was there to provide them with

sandwiches and that sort of thing so that they could do the job

for the people of this province. Yes, we can take the kitchen

with us when we go.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): How soon will

you go, Bob?

HON. MR. STRACHAN: I announced the fact that the new

headquarters office would be in the City of New Westminster at

the end of the present lease, which is the end of 1978.

As far as the so-called table you made a fuss about, when

you have an organization that size you must have an adequate

room and an adequate table for them to sit around when they are

discussing the affairs and the problems that any organization

of that size faces.

Theft from Surrey goods yards, internal-external. There have

been thefts from the Surrey yards, yes, as there have been from

every yard in the province, publicly or privately owned. Theft

is something that happens every day, whether it is public or

private. But we certainly have some security checking into

that.

There are 2,300 employees.

The computer didn't cost $10 million. In our first year of

operation the lease fees are $2,600,000.

MR. PHILLIPS: How much was the start-up cost?

HON. MR. STRACHAN: Dunsky Advertising. We had submissions

from a variety of public relations firms. I want to remind you

that under my jurisdiction there are three operations that

utilize public relations firms. In each case submissions were

asked for and received from a variety of companies in that

field. Three different companies have the individual public

relations business for the different operations.

As far as a survey is concerned, yes, there is a survey

being made. But it is not being made by Dunsky. How do you like

that?

MR. PHILLIPS: That's what I asked you!

HON. MR. STRACHAN: Oh, but all the inferences, all the

rigmarole that surrounded the questions....

AN HON. MEMBER: Who paid for it?

HON. MR. STRACHAN: Regional Marketing Surveys are doing

it.

MR. PHILLIPS: Market?

HON. MR. STRACHAN: Yes, we do marketing because it's a

marketing survey to find out....

Interjection.

HON. MR. STRACHAN: Certainly. We're providing a service to

the people and we want to determine in what areas the people

think our service is inadequate, where they have complaints and

that sort of thing. Any operation of any size worth its salt

that is providing a service to the people does just that.

MR. AN. FRASER (Cariboo): If you read your mail, you'll find

out what they think.

HON. MR. STRACHAN: Yes, I should have brought it in here. It

would be stacked that high with people who like the service

that ICBC is giving.

[ Page 1777 ]

Interjection.

HON. MR. STRACHAN: Right. Let me tell you, you had better

check the surveys, fella. You had better check them.

MR. PHILLIPS: Well, I asked you to table them.

HON. MR. STRACHAN: Check them.

MR. PHILLIPS: Table them. I asked you to table them.

HON. MR. STRACHAN: I tell you, my mail shows very clearly....

MR. CHAIRMAN: Hon. Members, I'd like you to address the

Chair, please.

AN HON. MEMBER: Right on.

MR. PHILLIPS: Yes, Mr. Chairman, I'd just like to ask him if

he's going to table those surveys so we can determine what

questions were asked.

MR. CHAIRMAN: Order!

HON. MR. STRACHAN : I want to assure you that it's a

straightforward commercial survey — nothing whatever to do with

politics. It's to help us better serve the people of the

Province of British Columbia.

With regard to the deficit, I

would like to make a few remarks about that. First of all, I

want to point out to you what is happening in the insurance

field and what has been happening. First of all, in April of

this year, there's a report from the Colonist about insurance

firms withdrawing from Canada — from Canada — because of the

state of the insurance market today.

I want to quote to you the Royal Insurance Co. Ltd. report

as published in The Globe and Mail , April

"The underwriting loss of $14.9 million was

the largest in Royal's history in Canada. The principal cause

of this highly unsatisfactory result was the continued

acceleration in the rate of inflation and the market's totally

inadequate pairing of some major lines of business.

"Payments on behalf of policy holders, including adjustment

costs, average about half-a-million dollars for every working

day of the year. Inflationary pressures were also mainly

responsible for the jump in administrative expenses, the

operating ratio, the salaries and so on."

So what happened to us happened all over the insurance

field.

Interjection.

HON. MR. STRACHAN: There are a number of things involved in

the operation of the Insurance Corp. of British Columbia, which

the opposition has chosen to ignore, that were not part of the

previous insurance operations in the Province of British

Columbia.

First of all, we're involved in a driver-training programme

to encourage young people to take driver training. We pay $50

of the fees for taking a professional course from a

professional driver trainer. There's $600,000.

MR. CHABOT: That's not new.

HON. MR. STRACHAN: Yes, it is.

There was included in this report the interim plan support,

paid for by the drivers of this province. The minute we became

government, before we had even said what we were going to do or

when we were going into the business, some members of the

private industry withdrew from the automobile insurance field.

In fairness to the people of this province, through the B.C.

Automobile Association we had to support that market.

Next, we had to assume the accidents that happened after

November 10 and for the ensuing four months before we carry

into ICBC because the private field had withdrawn from that

period. There were some rate changes on the basis of further

information; there was an increase in the auto body rates;

there was an increase in the payments to agents at their

request as of January a year ago because they said: "Well, we

didn't know whether to fill out this form, that form or some

other form." That's one of the factors.

Drivers' certificates brought in $3 million

less than we had anticipated. Obviously, there are some people

who are just not buying the driver's certificate insurance.

I want to point out, insofar as efficiency is concerned, the

very low expense ratio that's involved with this corporation.

Insofar as the accident rate.... When you go back over the

accident record, you'll find that January — for instance, in

1972 and 1973 — was a month of

low accidents. In 1973, January was 50 per cent

less than the worst month of the year. In our year of

operation, January was 50 per cent more than the previous worst

month of the year. If it had followed the 1973

trend, our January costs for accidents would have been $10

million instead of having been $30 million. In one month, just

$20 million difference between the....

MR. PHILLIPS: That only happens in monopoly.

HON. MR. STRACHAN: No, no, no, no, no. No,

[ Page 1778 ]

no. I've been back over the years and I find that there is a

variation in years.

Interjection.

HON. MR. STRACHAN: No, no, no. That's what 1973 shows.

AN HON. MEMBER: Oh, come on!

HON. MR. STRACHAN: 1973 shows that January was the second

lowest....

MR. CHAIRMAN: Order! Order, Hon. Members. Let the Minister

speak; he has the floor.

HON. MR. STRACHAN: I listened to you. I'm just showing you

what happens in this business, that's all.

Interjection.

HON. MR. STRACHAN: Sure, that's right. But I make no

apologies because I want to remind you that there's a social

concept to ICBC that didn't exist before. We're bringing....

Interjections.

HON. MR. STRACHAN: You were rarely here when I read that

section. If you'd stay and hear.... Are you questioning the

accuracy of that statement? Are you questioning the accuracy of

that annual report?

Interjections.

HON. MR. STRACHAN: No, you'd better not.

MR. CHAIRMAN: Order!

MR. PHILLIPS: Tell the whole truth.

HON. MR. STRACHAN: Here we go. You listen, and then they

bark.

MR. PHILLIPS: You are just telling half the truth.

HON. MR. STRACHAN: We have a lower expense ratio; we're

giving better service than we've ever provided before. We've

moved to bring equality into the rate structure in the Province

of British Columbia. We've maintained the rates at the 1972

rate, when all across the country they've been increased by 40

and 50 per cent. We're bringing in the territorial

equalization.

MR. MORRISON: Take it out of gasoline.

HON. MR. STRACHAN: We give grants for training teachers for

driver training in schools. Added to that is the fact that the

cash flow left capital in the Province of British Columbia that

used to disappear out of this province all over the world. It

provided many jobs in the Province of British Columbia.

Interjections.

HON. MR. STRACHAN: All right, all right. They don't want to

listen.

It provided many jobs in that head office that were not

available previously to people in the Province of British

Columbia. They were siphoned off all over the world in a variety

of cities.

MR. BENNETT: How much is Dunsky costing?

HON. MR. STRACHAN: As a matter of fact, again, this Member

asks how much Dunsky costs. He doesn't know how public

relations firms work. When they place ads in a paper....

Interjections.

MR. PHILLIPS: How much did you spend on advertising?

MRS. JORDAN: How much commission did Dunsky get off the

advertising?

HON. MR. STRACHAN: Dunsky does not get his commission from

ICBC; he gets it from the newspapers in which he places the

ads. That's the standard procedure, and I wish you'd get that

through your head.

MR! PHILLIPS: How much did operation turnaround cost?

HON. MR. STRACHAN: Autoplan.... It was $471,486....

Interjection.

HON. MR. STRACHAN: Well, do you want the answers, or don't

you?

MR. PHILLIPS: Yes.

HON. MR. STRACHAN: Well, if you do, shut up and...

SOME HON. MEMBERS: Oh, oh!

HON. MR. STRACHAN: ...let me answer.

MR. PHILLIPS: Well, answer. You've been on

[ Page 1779 ]

your feet for 20 minutes.

HON. MR. STRACHAN: You were on your feet for half an hour

and said nothing.

Interjections.

HON. MR. STRACHAN: And that's a vast improvement on any

record you've had in this House, my friend. I can tell you

that.

Autoplan, $471,486. The rest of his work was related to

brochures and booklets, employee recruitment, legal notices,

signs.

MR. MORRISON: How much was that?

MR. PHILLIPS: What was the total cost of operation

turnaround, I asked you.

HON. MR. STRACHAN: What do you mean, operation

turnaround?

MR. PHILLIPS: That big campaign you had. You know very well

what I'm talking about. Those big full-page ads trying to...

HON. MR. STRACHAN: His total Autoplan thing, I have told

you, was $471,486....

MR. PHILLIPS: What was your total advertising bill?

HON. MR. STRACHAN: If you'd be quiet, I'd tell you. You make

it very difficult. I'm trying to answer your questions.

MR. PHILLIPS: About time, too.

HON. MR. STRACHAN: The total for radio, newspaper,

magazines, signs, legal notices, employee recruitment,

brochures and booklets, Autoplan and general insurance was

$731,000. I think that answers most of your questions.

MR. PHILLIPS: Just a minute. Who's going to pay back

department R — the refund. You didn't answer that question.

HON. MR. STRACHAN: Department R is part of the operations of

the whole Autoplan.

MR. PHILLIPS: Is it paid by ICBC or by the government?

HON. MR. STRACHAN: It's paid by the people of this province,

as everything related to automobile insurance is. Everything

related to automobile insurance is in a separate fund. Read the

report.

MR. PHILLIPS: Is that $835,000 shown as a deficit in

here?

HON. MR. STRACHAN: Yes, it's part of.... No, it's instead

of.

MR. PHILLIPS: Aha! Who's going to pay it? It's not in

here.

HON. MR. STRACHAN: Well, it all comes from the public of the

Province of British Columbia. If you don't know that....

MR. PHILLIPS: It's in addition to this lot. Another

$835,000. Plus another $835,000....

HON. MR. STRACHAN: It says in there that start-up costs are

amortized over a five-year period.

MR. G.B. GARDOM (Vancouver–Point Grey): The remarks from the

Member for South Peace River (Mr. Phillips) were extremely

interesting, and without any question of a doubt they

established the need for an auditor-general in the Province of

British Columbia, because the Member gave specific

illustrations of this government not only not giving value, but

also committing absolutely wanton and shameful waste. That just

can't go on. The public is not getting a proper deal; they are

being ripped off.

The Minister talked a lot about answering questions. I still

see on the order paper some six questions that are unanswered.

One I notice, dealing with the capital cost expenditures

contemplated and had for ICBC, has been on the order paper for

better part of a year and is still unanswered.

The Minister referred to a standard form of accounting.

Well, it seems, in taking a look at his balance sheet —

which he is, oddly enough, proud of — that there's another $8

million of cost allocated to start-up one year after ICBC

started up. Is it ever in a process of not starting up?

According to the way I read the balance sheet — we find $19.8

million for unamortized start-up costs for 1975 and, for 1974,

$11.6 million. Unless I'm incorrect, this came into being,

didn't it, well over a year ago? Does this mean we are going to

continue to have costs allocated to start-up, or should they

properly be in administration and operation costs? I pose that

question to the Hon. Minister.

The point that was made by the Member for South Peace River

today is that the public has not received value. And there is

absolutely nothing in these statements to indicate that the

public has received value. I would ask the Hon. Minister if he

is prepared to furnish complete working papers in order that a

breakdown of these figures can be obtained and the Members of

this Legislature and the general public can properly scrutinize

this statement.

We all remember, Mr. Chairman, that the Premier

[ Page 1780 ]

was very roundly criticized by the press for not making this

Member his Minister of Finance. Well, we find that this Member

has produced a deficit of $36.2 million, which is more than the

combined estimates of Consumer Services, Economic Development,

Mines and Petroleum Resources, Travel Industry, the Minister

Without Portfolio — even the Premier's office and the cost of

running this Legislature. I'd say that we're very fortunate,

indeed, in this case that the Premier did not appoint this

Minister the Minister of Finance.

But then again, how does this Minister's deficit reflect

into the budget that the Premier presented to this House? We

can all remember that he talked about a $600,000 surplus.

"Pretty thin," said the opposition. "Pretty thin,

" said everybody. But when we take a look at this $36.2

million deficit here, we find we've got $600,000 to take care

of it. You have put the Province of British Columbia in the

position of deficit financing, make no mistake of that already,

and the Premier's budget speech isn't worth the paper it's

written on.

Deficit has been created, and they knew it was coming, Mr.

Chairman; they knew it was coming. They had that information;

they had that material. In the Premier's budget speech, which

he carefully did not read in this Legislature when he was

standing up, there was a reference to the fact that the

Insurance Corp. of British Columbia would have to receive funds

from consolidated revenue. That's printed, but it wasn't read

in this House when the television cameras were on. Was that

oversight? Remarkable coincidence, if it was.

As the result of this $36.2 million, according to the

Premier's budgeting, his cupboard is bare. And that's what ICBC

has produced. This was supposed to be the jewel in the Crown of

NDP. I tell you, Mr. Chairman, that it's the fallen idol. ICBC

was supposed to be the NDP-promised money maker, and it's

turned into a loser; and but for taxpayers' subsidies, it is

bust. It is unable to meet its obligations but for taxpayers'

subsidies, and but for taxpayers' subsidies this corporation

would be having a meeting with the corporate undertaker known

as the receiver. If this was in the private sector, this

company would be placed into receivership. That's the way it

stands today in the Province of British Columbia. What a

tribute for a new plan. What a tribute to the executive. What a

tribute to the administrators. Didn't they know what was

happening? Can we put it down to ignorance, or did they know?

And that's even worse.

But you know, Mr. Chairman, they said it was going to make its own way; it

was going to stand on its own two feet. Witness the Hon. Minister who wishes

us to take his statements at face value: Hansard , March 5, 1973, page 1001:

"The plan will be self-sustaining. Payment of all losses and expense of administration

will be made from the plan funds." April 11, 1973, Hansard , page 2536 — and

he was talking about this: "...the pledge I made that no public money

be used to operate this corporation."

We take a look also, Mr. Chairman, at his written report

that was given to Members of this Legislature, to the press and

to the general public when these bills were introduced. I refer

to page 2: "The premiums, to be set by regulation later, will

not be subsidized by any tax dollars and will be based on

actuarial principles."

Then carrying on with Hansard on April 11, 1973, at

the same page, 2536, he says this: "Every penny expended in

that corporation gets charged to that corporation and not to

the public treasury through the accounts of this province."

MR. MORRISON: He said that, eh?

MR. GARDOM: April 18, 1973, Hansard , page 3022: "I

want to repeat what I said when I introduced this bill for

second reading: the plan will be self-sustaining." The Hon.

Minister of Transport is speaking as, I believe he was then,

the Minister of Highways. The Hon. Robert M. Strachan:

...the plan will be self-sustaining; all services

rendered by any department of government or otherwise will be

paid for from moneys belonging to the plan — payment of all

losses and expenses of administration will be made from plan

funds. I repeat that and I guarantee it will be carried

out.

What was the worth of that promise? What was the price of

that guarantee?

Now all of this points to either complete incompetence or

misleading the public, or a combination of both, at both the

administrative and executive levels.

AN HON. MEMBER: You wouldn't buy a muffler from a guy that

gave that kind of guarantee. (Laughter.)

MR. PHILLIPS: The Midas touch.

MR. GARDOM: It's even more serious than that, Mr. Chairman.

Why has no one levelled with the people at either the executive

level or at the administrative level on what happened with this

insurance corporation? Why didn't they give a proper account of

what was going on?

Whenever anybody, be they legislators, or trained,

experienced people in the industry, or columnists or hotliners

or editorialists said: "There's trouble in River City" — Red

River City it would be — "the plan isn't working; your rates

are haywire; your administrative costs are out of whack; can we

really afford to build a bunch of expensive claims centres?

[ Page 1781 ]

— you've been wanton; you've been wasteful;" was there ever

any criticism or, even worse, any request for information?

What was the response for requests for information when we

asked what the start-up costs are? How many employees are there

in there? What is the amount of the payroll? What have been the

capital cost expenditures since this corporation was started,

and how much more is contemplated? What claims are contemplated

and projected over a given period, and at what cost? What is

the projection for bodily injury claims? What's the projection

for property damage? What sort of premium income is

contemplated? Well, we got one figure, and I notice this

current report is very, very careful not to forecast anything.

But in the last one there was a premium income of $207

million anticipated. It didn't even come close to that. What

went wrong?

What type of interest income was contemplated? Why were

paraplegics not receiving their settlements? Why were people

representing them told the money wasn't there? Well, I guess

they were told that the money wasn't there because it wasn't

there. It's pretty simple.

How much was paid for the advertising? We had an answer here

this afternoon. Is that going to continue? Why, indeed, Hon.

Members, do you have to advertise the only game in town?

Shouldn't its own advertisement be performance in doing the

proper kind of a public job? That's what it should be.

But open government they talked about, and they said: "Let

the sunshine in." But I'll tell you one thing, Mr. Chairman, in

response to the questions that we've received in this House:

the assumption that we have got to make on this side of the

House is that obtaining information about ICBC is much like

trying to hold a public inquiry into the inner workings of

NKVD. If the socialists wish to use the Insurance Corp. of

British Columbia as their Linus blanket, well, I say let them

pay for it themselves. Failing that, they've got to level with

the public as to just how it is being operated. Boy, oh boy, oh

boy, do we ever need an auditor-general!

From the moment of its conception, Mr. Chairman, it has

never been really truly represented. We've got to get back to

the beginning, before the 1972 general election.

Twenty-five dollar car insurance was inferred in the NDP

material. The Member for Langley (Mr. McClelland) made a very

excellent speech in the House last year on that particular

point, dealing, if I recall, with the Members for Vancouver

East. There was no mention by the NDP when they went to the

people of this province that the plan they were going to bring

in would be, by law, the only game in town. Oh, no, it would be

like the other provinces, Manitoba and Saskatchewan, where the

private sector could compete. Now wasn't that misleading?

Then, when you brought in these two bills in 1973,

you made it illegal in British Columbia for a lawful,

nonpolluting, taxpaying organization to carry on business. I'd

say that with all of the art and the subtlety of a fireplug you

expropriated the automobile insurance industry without trial,

without hearing, without appeal and without compensation.

HON. MR. STRACHAN: Point of order. That matter is now before

the courts.

MR. GARDOM: You closed the doors and said it's illegal to

carry on business in the province of B.C. Did anyone say that

to the general public when they ran for office in

1972? No way! Was that misleading? You bet your darn

boots it was. But the Waffle Manifestoes in that socialist

party over there, Mr. Chairman, had control, and so did all of

their great subscribers: the Hon. Premier (Hon. Mr. Barrett)

and the Deputy Premier (Hon. Mrs. Dailly) and the

Attorney-General (Hon. Mr. Macdonald), the Minister of

Municipal Affairs (Hon. Mr. Lorimer) and the Speaker (Hon. Mr.

Dowding). They had control, and they Waffle-manifestoed this

organization right into existence by expropriative measures —

make no mistake of that. They denied that; they denied they

expropriated the industry. Wasn't that misleading? Wasn't that

misleading when they denied that they expropriated the

industry? I say it certainly was misleading, Mr. Chairman.

Then they spent thousands and thousands and thousands of

dollars on advertising, which we talked about earlier today.

They talked about the buck stopping here, how the buck was

working for ICBC and it was going to be paying its own way.

Well, that's pretty misleading. I don't know how you can really

work with the bucks when you owe $36 million-odd.

Then the next thing they absolutely swore and committed

themselves and avowed and solemnly guaranteed was that it would

never ever have to be publicly transfused. Wasn't that

misleading, Mr. Chairman?

MR. McCLELLAND: Not one penny.

MR. GARDOM: I would suggest to you it was indeed

misleading.

There are lots of ways to prime that pump. They've got more

than one way. Out of the gas tank — that's publicly known.

They can also do it out of the electric light bulb by setting

the premiums in B.C. Hydro. How much does it cost to insure a

dam? I'm pretty low in my revenues.

It's a manipulative process, Mr. Chairman, but why should

the consolidated revenue fund of this province be siphoned to

subsidize the motoring public to make it cheaper for those

people with cars, who usually are in better circumstances than

those people without

[ Page 1782 ]

cars? Where is there any kind of fairness there?

Can we possibly say that there are not more pressing needs

and economic requirements for health, hospitals, education,

extended care, intermediate care, roads, aid for the

underprivileged? Is it wrong to ask the consumer of automobile

services to pay his own way? Why anyone less fortunate should

be put in the position of subsidizing him I cannot

understand.

I think that concept, Mr. Chairman, has been goofy from the

start. The state interest is taking care of the welfare of

people. Fine and dandy. Provide assistance for injuries, for

the loss of their blood and their bones but, for goodness'

sake, the province doesn't have any place in straightening the

Detroit-made fenders of people who drive in this province. What

have the fenders got to do with taxation policies? It is quite

beyond me.

Then they indicated to us throughout that ICBC was doing

fine — oh, just fine. It's the best thing that ever happened to

the province. There weren't any problems. The dollars were

rolling in and it was all the rosy-glow stuff. Wasn't that

misleading, Mr. Chairman, when they knew or must have known

that it was in red ink right up to its armpits? The dollars

were rolling, all right, but they just made a 180 degree error

in direction. They weren't rolling in; they were rolling right

out.

Then, in the fall of last year, anyone who suggested to the

Minister of Transport and Communications that ICBC was in

serious financial circumstances was essentially accused of

fabrication. Yet, at just about the same time, the Premier

confessed to its floundering to the extent of $18.5 million. We

find it is $36.2 million. In what kind of light does that put

the Hon. Minister of Transport and Communications? He was

completely and categorically wrong. In what sort of light does

this put the Premier? Well, he is out close to 100 per

cent.

AN HON. MEMBER: A terrible situation.

MR. GARDOM: Didn't he know, Mr. Chairman? If he did not,

surely there must have been incompetence along the line. Or did

he know? That is indeed worse.

Have they got a computer down there, Mr. Chairman, or have

they got a Tinker-toy? Have they got administrators or what

have they got? Do these people know what they are doing?

AN HON. MEMBER: No.

MR. GARDOM: On March 5, 1973, in Hansard , page 1001, the Hon. Minister

was talking about revenues from Autoplan. He called them a "virtual tax" and

said it wouldn't be exploited for private profit. Well, there wasn't any private

profit, so we don't have to be concerned about that. He carried on and said

nothing would be "squandered in wasteful administrative costs," yet the taxpayers

of this province had to foot the great bill, I believe of about $52,000 —

I've got the precise figure here — because the chief administrative officer

of ICBC happened to have a philosophical difference with Mr. R.W. Adams. Mr.

R.W. Adams, according to a letter from Mr. N. Bortnick to Mr. Adams of October

24, 1973, was paid at the rate of $35,000 a year, from October 24, 1973, to

April 19, 1975, for not turning a finger.

[Mr. Dent in the chair.]

I am really unaware of the philosophical renown of either of

these gentlemen or whether their philosophical differences are

worth this kind of money. But I do know one thing, Mr.

Chairman: this has no business at all coming out of the public

funds.

I have to ask the Minister: did Mr. Adams proffer advice

that was not accepted? Was his advice correct? Did it prove

out? Did Mr. Bortnick, did the administration, did the

Minister, did the government refuse to accept Mr. Adams'

professional expertise as to when the computer could properly

come down the line and do a job? Was Mr. Adams dismissed for

cause? If so, why was he paid, if he was dismissed for cause?

If there wasn't any legal cause for his removal, which appears

to be the case, according to the information that the public

has received, why wasn't he kept on or permitted to quit if he

so chose — but without this kind of a boondoggle?

A monthly salary of $2,916.67. Is that correct? Is that what

Mr. Adams received from October, 1973, to April, 1975, for not

working? That's pretty good welfare. But this isn't supposed to

be a welfare organization. If this isn't a squandering of money

and a wasteful administration, to use the Hon. Minister's

words, then, indeed, what is it?

This organization, Mr. Chairman, is a government monopoly.

It's a government combine. It has every resource at its

disposal. It promised a profit. It rejected subsidies and it

denied losses. Yet with all of those powers and all of those

resources, it comes out with this kind of a sorry account. Can

anyone say that that is a tribute to good husbandry? It seems

to blame everyone but itself — world conditions, the private

carriers, the traffic victims' indemnity fund, the weather —

the fact that we have winters and that we have summers in the

Province of British Columbia — the fact that there are cars on

the road and motorists are driving them, that safety programmes

are not up to scratch, and all sorts of faults.

But what happened to its capacity to function and forecast?

Surely it must have a monthly, if not weekly or daily,

experience of premium income, of interest income, of claims, of

administrative expense and of rating variations. But it seems

to me, from the

[ Page 1783 ]

results that are in this catalogue of ineptitude, that the

words "forecast" or "projection" or "estimates" are not in

their lexicon. What's happened? That's what insurance is

supposed to be all about — prepaid funds, paid in trust, to pay

for the unexpected based on experience, and probable

expectations over a given period of time. That's what we are

supposed to see.

There's been a lot of talk, Mr. Chairman, about level of

rates. Why were they wrong? Why didn't the premium income

reflect the amount it should? It is conceivably the biggest

insurance corporation in the world. It's had unlimited

resources to work with and it's produced dismal results. That's

not good. Premiums? They talk about premiums of $187.6 million.

They forecast, as I said, last year $207 million — pretty badly

out in their forecast. Well, how many premiums did that consist

of, I would ask the Minister, and what was the average

premium?

Dealing with expenses, under the auto side, they record

claims and adjusting of $214.5 million. I would ask the Hon.

Minister how many of those claims are bodily injuries. How many

of those claims are fenders and motor vehicle damage and how

much is property damage? Also, why is adjusting expense related

into claims when you are the only game in town conceivably

which, would fall within the operational expense? What expense

is there allocated to adjusting in this $214.5 million? Why is

that not included essentially as an expense in

administration?

Administration is referred to as $16.4 million.

Conceivably, that would be talking about salaries, I guess, and

rent. Would anyone think that would be incorrect? Yet according to

figures that the Minister furnished in the House, which were incomplete

the last time I asked him...and he promised to have them complete today

and I hope that he had, on the salary payroll which only went up to

$17,000. You said you would look into it and get better understanding

of the question. My recollection is that that indicated a monthly

salary payroll of over $2 million. So we are going to look to $24 million at today's rates for salaries

over the coming period, not $16.4 million.

Is it true, Mr. Minister, that the employees of the Insurance Corp.

of British Columbia have been promised by the chief administrative

officer and/or yourself salary increases retroactive to last year, when

they received their increases? If so, to what date? The 10 per cent

salary increase that is shown in your statement is interim only. Are

there any reserves set in this statement? I have been unable to find

them, but I am not an accountant, and I could be misreading it. Are

there any reserves established for the salary increases that are now

under negotiations?

If so, how much?

Then let's take a look at the general side. We find $5.1 million revenue, which is up from $252,000 for the previous five-month

period. That's a revenue increase of 20 times and a loss — I'll be darned,

it increases, too. You find losses of $2.2 million up from $505,000, and the

loss increases four times. So the revenues under general insurance are up

20 times as much — 2,000 per cent — and the losses under general insurance

are up four times as much at 400 per cent. That's ghastly underwriting. It

must be just absolutely ghastly underwriting.

Look at the differences in administrative costs: under the

automobile side of your balance sheet you show $214 million for

premiums, and so forth, $16.4 million in administrative costs.

But under the general, for $5.1 million revenues, you show $2.3

million of administrative costs. So in round figures you're

talking about 8 per cent, which is not correct in my assessment

of this for administrative expense on the auto side because it

doesn't take into account the start-up costs and other factors

that I've been mentioning. But under the general side you find

that the administration is 40 per cent of the income. Well,

I'll tell you, there's not a company in creation that could

carry on on that basis. If this were a private company, the

superintendent of insurance would be knocking at their

door.

AN HON. MEMBER: Kaput.

MR. GARDOM: "Kaput," says the Hon. Member. Fair

words. The creditors would be there. It could be put into

receivership. But the total direct loss to the B.C. taxpayer

for socialistic, subsidized insurance in his statement is $36.4 million. And there is every single

solitary indication that that figure for the next period is

going to be up, up, up, up. Make absolutely no mistake of that

fact whatsoever. The indicators are everywhere. At the present

time $3 million-plus a month is going down the drain. Over

$100,000 a day is the loss — about $4,000 an hour. It's going to get worse

because it's conceivably going to need more capital costs; the

costs of co-insurance are going to increase, and where the

specifics of the costs of co-insurance.... Is the Hon.

Minister able to satisfy his House that co-insurance is necessary? Remember all the

promises, Mr. Chairman? "The buck stops here." How much money

went out of the country into co-insurance? Is that needful?

MR. CHAIRMAN: The green light is on.

MR. GARDOM: Wages are going up and up, as I have indicated. The amounts of awards are going up and up.

Mr. Chairman, I ask the Minister again: what is the salary

schedule in the Insurance Corp. of B.C., from top to bottom? I

asked him that all last year. I'd ask him what the Insurance

Corp. of B.C. claims about projection is for 1975-76. There is

not an insurance company operating today that doesn't have hose kinds of figures available.

[ Page 1784 ]

I'd ask him the Insurance Corp. administrative expense

projection for the period 1975-76. I'd ask him on the capital

cost expenditures that have been spent to date: where they have

been spent? How have they been spent? Has the public received

value? The Hon. Member for South Peace River (Mr. Phillips)

indicated that they have not. How much more is being set aside

or allocated for capital cost expenditures?

How much money has been set aside and estimated for salary

increases which are coming down the line? Are those going to be

retroactive? I'd ask the Minister before sitting down finally:

what is the projection of the insurance corporation for its net

for 1975-76? How much worse shape is it going to be in? How

much more will the taxpayer of B.C. have to carry on his

back?

HON. MR. STRACHAN: Mr. Chairman, again I listened with

interest.

Interjections

HON. MR. STRACHAN: Look, if you don't want to listen, move out. Again,

this Member, unfortunately, moves from a pre-established position and talks

from a pre-established position. He knows who he speaks for: a very select

group in the Province of British Columbia — the private insurance companies.

I speak for the people of British Columbia. That Member....

Interjection.

HON. MR. STRACHAN: They ask questions; they don't like the

answers.

AN HON. MEMBER: Hokum!

HON. MR. STRACHAN: All right. See — I sat and I listened —

that Member went through the old record again. I'd like him to

listen. He went through the old record about Mr. Adams — how he

couldn't get information. I want to remind that Member that

last October he got up playing that old record about how he's

asked for information for a month and hadn't got it. I had to

finally get up and tell him that I had tabled it last June.

MR. GARDOM: The final day of the House.

HON. MR. STRACHAN: It was four or five months earlier, but he didn't

know. But there he was going around the province, rattling that old record

— completely false, completely wrong. The information was there, but you didn't

know it. You don't do your job. You speak from that pre-established position;

you speak for the insurance companies of British Columbia. You always have

and you always will.

Unfortunately, Mr. Chairman, I went through the same thing

again today. He gets up and he complains that we haven't

provided the full schedule. I provided a

schedule here a month

or so ago, as it was provided to me. He got up in the House and

he asked a question. I had some difficulty in knowing exactly

what he was asking, but he repeated it later. I said I had got

the question. Fine, good.

Mr. Chairman, he is up here complaining that the answer I

gave was only partial. Mr. Chairman, I tabled that last

week.

MR. GARDOM: When?

HON. MR. STRACHAN: Last week. I don't know — on Thursday,

Friday.

MR. GARDOM: Why didn't you send a copy to...?

HON. MR. STRACHAN: In the House. For Pete's sake, that's why

we print Votes and Proceedings . Downright incompetence!

He doesn't care what he says. He gets up and speaks these

canards, time after time after time without having done his

homework. Absolute incompetence!

MR. GARDOM: That's what you did last year.

HON. MR. STRACHAN: Read the record. Go and look at it. You

get up here and shout at me. Mr. Chairman, through you to that

Member, he thinks because he represents the insurance people,

because he represents Point Grey, because he has been to

university, because he has a law degree, because he is twice as

big as me, that he can bully me. Well, he can't! I refuse to be

bullied by you or anyone else.

Interjections.

HON. MR. STRACHAN: All right. He asked me a question and I

told him I filed it last week.

Interjections.

HON. MR. STRACHAN: Come on, you listen to me. I had to take

his guff and his guff. Now let me answer the questions in a

forthright manner, without interruption, please.

One year after — ICBC start-up costs. I don't know how often

you have to explain these facts that the Autoplan is a separate

fund. Part of the start-up costs were incurred prior to the

beginning of the operation of Autoplan. Naturally, in good

accounting procedure, they are charged to where they should be

charged: to Autoplan. That is why they are all in there.

[ Page 1785 ]

The public has not received value. Well, I'll argue that

with you.

The Member over here talked about property in Vernon. Yes,

we purchased property in Vernon. The property was zoned light

industrial. It was appraised in late April of 1973, I guess, by

General Appraisal of Canada Ltd. for a market value of

$120,000. We were advised at that time that today's appraised

value is $140,000. An independent appraisal commissioned by

Johnson Associates Management Ltd. at the end of December,

1973, placed the value of this land at $157,000. The total

price paid was $140,000.

Interjection.

HON. MR. STRACHAN: Oh, I don't know. I don't know. But

anyway, there were two appraisals made. That was the question

he asked me, and what we paid for it. Two appraisals. We got it

for less than one of the appraisals indicated it was worth. As

far as the information we have indicates, yes, value was

received for the money expended in this and in a multitude of

other cases. But he asked me about that specific case.

As far as any funds required for the future: as you know,

this House provided legislative authority. What that

requirement will be I don't know, but we have brought in a

territory equalization system which brings some equality into

the whole field.

The question re capital, et cetera, costs are answered in

this report I tabled the other day. That's where it is supposed

to be answered: at the end of the year when we have the total

costs and the total expenditures. That's when you answer

questions on capital expenditure and all the rest of it.

Why were paraplegics not receiving payment? I'll tell you

why they were not receiving payment. The private insurance

companies wouldn't accept the responsibility they had been paid

to accept. But part of the costs in this deficit are payments

made by ICBC for responsibilities that properly and truly

belong to private insurance companies. Rather than see them go

without, we paid them from ICBC. You stand up there and talk

about deficits. Because the insurance companies didn't do their

job and we accept that responsibility, that's part of that

deficit. Are you opposed to it?

Interjections.

HON. MR. STRACHAN: Let me answer these questions. Come on

now.

AN HON. MEMBER: Don't shout now.

HON. MR. STRACHAN: I'll do that when I'm angry at you, but I

am not going to get angry.

Why should anyone subsidize motorists? You asked me that question. I've been

hearing for months that every time a motorist drives up to the gas pumps he

is paying for his insurance. Now you are saying that that's not true, that

when they drive up to the gas pumps they are not paying for insurance. You

are going to have to make up your minds. You can't go out and say one thing

one day and something else the next about where that money is coming from.

Interjection.

HON. MR. STRACHAN : That's all right. That was before

territory equalization.

Wasteful administrative costs. I challenge you to show any

other insurance company with administrative costs of 8 per

cent. I challenge you. You won't find them.

The matter of Mr. Adams. I've explained this before, but

evidently the Member seems to have a fixation on this. When the

corporation was starting up, in order to get the first key

personnel, there were, I think, two contracts provided. I think

there were two in order to get the very start-up personnel.

These men were involved in pretty major jobs in the industry;

we wanted them to leave these jobs. They asked for some basic

security, and on that basis they left their well-paid jobs and

came to ICBC. Only two of the executive were in that

position.

You asked me a lot of questions as to why he left the employ

of the company. He had an agreement. But then you want to know

all the details. Now, Mr. Member, there's something involved

here — you say public money. There's also the matter of...how will

I put it? You may not understand this as a concept or as a

belief, but I think we have to approach such matters with at

least some semblance of humanity, because....

Interjection.

HON. MR. STRACHAN: Now just a minute and you can stutter all

you want to. You stuttered all Saturday night on that

broadcast. It was terrible. However, let me say this.

Interjections.

HON. MR. STRACHAN: Now I'm about to talk to my friend about

his fixation on Mr. Adams. Here is a man who left a good job, a

man with competence; otherwise he wouldn't have been in the job

he had. Oh, he's not listening, but the others may.

Any time there comes a parting of the ways in a position of

that kind, to go into the reasons why the parting of the way

came, I think the onus on whether or not that is to take place

belongs to the individual. A matter of confidentiality. If he

wants to go to the public and say that this happened or

that happened

[ Page 1786 ]

or something else happened, then I'm quite prepared to make

my position clear. But as long as that individual does not wish

to engage in that kind of debate or discussion...it's bound

to do damage to the individual, and I'm not prepared to embark

on that kind of situation.

MR. MORRISON: Are you suggesting he should be fired?

HON. MR. STRACHAN: No, no. Now look, when people

part

company there can be a variety of reasons. I certainly never

claimed perfection for myself or any group with whom I've

worked, but I want to tell you that that's my feeling. If he'd

wanted to go to the press, or anything like that, and lodge a

complaint, then I would have been prepared to say.

MR. MORRISON: Is that a policy of your government?

HON. MR. STRACHAN: This is a matter of how you treat human

beings. You may have some difficulty understanding that, but,

as far as I'm concerned, I'm not going to go into any detail

about the difference of opinion we had with Mr. Adams unless he

himself pursues it in the public press. I just don't think

that's the way you treat people, and that's all I'm going to

say.

Interjections.

MR. CHAIRMAN: Order, please. I would ask the Hon. Member not

to speak from his seat but wait until he gets the floor.

Interjections.

HON. MR. STRACHAN: Your criticism of the general insurance

sector....

Interjections.

HON. MR. STRACHAN: No, no. The Member just finished speaking

and he seemed most urgently to want an answer to this question,

so I want to be sure he is listening.

He was critical of the general insurance sector of the ICBC

and the ratio of cost to the business done. Well, you have to

have staff to do all the multiple number of things that are

required in an insurance business even before you start to do

business. Through the year, as your business increases, you're

only allowed to take a portion of the premium into income for

that particular year. We file our reports to the superintendent

of insurance in the normal way.

You talked about co-insurance; I think you meant

reinsurance. Yes, I thought that was what you meant. Yes, you said co-insurance twice or three times but I was

quite sure you meant reinsurance.

Actually, the amount ceded to reinsurance in the Autoplan,

out of the gross vehicle premiums written of $201 million, was

$1.24 million. In other words, about 0.5 per cent — about half of

a cent of every dollar of premium — is all that went anywhere

else but co-insurance. Now I answered that question previously

in the House during question period, about a year ago.

Interjection.

HON. MR. STRACHAN: Well, as you know, there have been some

pretty big awards made, and it's for anything over a certain

amount, a fairly high figure.

AN HON. MEMBER: How much?

HON. MR. STRACHAN: It's $300,000.

Interjection.

MR. CHAIRMAN: Order, please. I would like the Hon. Member....

HON. MR. STRACHAN: There'd be no loss to the province, no

loss.

MR. CHAIRMAN: Order, please. I would ask the Second Member

for Vancouver–Point Grey (Mr. Gardom) to respect the rules of

the House and not speak from his seat.

Interjection.

MR. CHAIRMAN: Order, please. Before we proceed, I think it's

proper that we should proceed with some semblance of order.

There are reasons, obviously, for these rules, not the least of

which is that nothing is recorded on Hansard when the

Member speaks from his seat. Therefore I would ask them to wait

until the Minister has completed his remarks and then get up

and ask further questions. I would be pleased to recognize them

at that time.

HON. MR. STRACHAN: I'll try and answer the questions. Any

cost of $300,000 is not met by Autoplan. The other factor as to

why we should have that in operation is because, in the case of

any major disaster such as an earthquake or anything like that

which just could envelope thousands and thousands of vehicles

in one fell swoop, it gives us that kind of protection

also.

You repeated the question about the public receiving value.

I think the public have received value. A comparison of what

it costs the drivers in this province with what it costs

drivers in other parts of

[ Page 1787 ]

the country indicated the kind of value that the public of

this province have received for the job ICBC is doing. Just in

case you've forgotten the figures, I would like to give you the

figures on some of the comparable rates.

For instance, in a 1973 Mustang in Victoria, driven to and

from work, the cost would be $115; in Prince George, $182; in

Edmonton, $204; in Moncton, $252; and in St. John's,

Newfoundland, $304. The same car occasionally used by an

under-25 driver: in Victoria, $125; in Vancouver, $169; in

Nanaimo, $161; in Chilliwack, $171; in Kelowna, $171; in Prince

George, $232; in Edmonton, $337; in Toronto, $375; in Montreal,

$534; in Moncton, $432; in Halifax, $379, in Charlottetown,

$429; and in St. John's, Newfoundland, $504. For what it costs

the Victoria driver — $125. I would suggest that the public are

getting exceptionally good value for the money that is being

spent in ICBC.

[Mr. D'Arcy in the chair.]

MR. G.S. WALLACE (Oak Bay): This certainly has to be high noon for

the Minister of Transport and Communications. Regardless of the figures, I

think any objective person reading that report or any person coming into Canada

in a completely unprejudiced position and expecting to agree with the overall

conclusion that the Minister has just mentioned in that it is an excellent

programme and that people are getting value for their money.... To make that

statement in the light of the figures has to be nothing less than an insult.

How anyone can suggest that a programme which was brought in with such noise

and such promise as to what it would accomplish and how we could have all

the assurances we had........

I won't bore the House by repeating all the quotations. I

think the best one is the notes which we all received as MLAs

on the day this bill was introduced in the House. On page 2 the

Minister says: "The premiums, to be set by regulation later,

will not be subsidized by any tax dollars and will be based on

actuarial principles." The other quote was the one that the

Second Member for Vancouver–Point Grey (Mr. Gardom) mentioned

on page 100, Hansard , March 5: "The plan will be

self-sustaining. All services rendered by any department of

government or otherwise will be paid for from moneys belonging

to the plan." We don't need to go into any great detail on

that. The evidence is there unquestionably that the plan was to

pay the cost.

I say that anybody who reads this report in an objective way and remembers

the tremendous ballyhoo that accompanied its introduction and the very sober

and serious commitment made to the people of British Columbia that the plan

would pay for itself.... To turn around today in the face of a deficit of

$36.4 million and say that this plan has been a great success really has to

make one question the use of the word "success."

I think that basically it is 100 times more clear now than

it was in the 1972 election that this government has chosen to

use this particular issue, regardless of its elements,

regardless of its cost and regardless of almost every other

financial factor, as the clearest political tool of any issue,

perhaps, in any election before or since the 1972 election.

We have the headline from The Province , eight days

before election day: "B.C. Drivers Would Save 20 per cent —

Barrett."

Interjection.

MR. WALLACE: Regarding the question of figures, in saying

that they're saving 40 per cent, when every citizen in the

province is contributing towards a $34 million deficit, I just

can't equate these two statements either. The fact is that

Autoplan on its own is $34 million in the hole.

One of the reasons I think that this report is somewhat

insulting is that the Minister makes the statement in the

report and brags about the refund programme. Because some

people claimed they were paying more and were shown to have

paid more, they received a refund. If that isn't an admission

of guilt right there that the people drawing up the premiums

didn't even know what the rate being paid was at the present

time...and they submitted premium notices to certain owners

in excess of existing rates, and then the government had to set

up a cumbersome and costly refund plan. Surely the fact that

that refund plan had to be implemented was an admission of

mistakes of a substantial order by Autoplan in setting up the

premiums in the first place. I keep making the point that it

wasn't a commitment just to keep premiums the same as the

Minister keeps repeating; it was a commitment, as Premier

Barrett said on August 22, 1972, to reduce premiums.

Be that as it may — and we obviously disagree on the

interpretation of that — I think the fact that the refund

programme was necessary showed there were some substantial

mistakes. I forget how many thousands of people the Minister

mentions in the report....

Interjections.

MR. CHAIRMAN: Order, please. There's a persistent buzz on my

left.

MR. WALLACE: At any rate, I just want to make one particular

point in regard to the ideology of this whole subject, and that

is that I have to think that this government has its priorities

sadly mixed up. We not only have a deficit of $34 million on a

subject

[ Page 1788 ]

involved with automobiles, but we have many areas of serious

human need in our society where $34 million would go a very

long way to look after some people in this province who are not

only not getting the kind of help and medical care they need,

but not eating as well as they should.

This government believes in running a $34 million loss on

cars — metal and rubber and steel — which are not essential to

many people, and then has the gall and the contradiction to

suggest that that money would come from gasoline revenue and

that at least it would be motorists that would pay the deficit,

and then we have this bland statement somewhere in the report

that it was not considered appropriate to close the deficit by

adjusting rates. What ridiculous farce is this?

MR. GARDOM: Political hokum — that's what it is.

MR. WALLACE: Page 5 of the report: "In the coming year, an

increase in automobile premium rates of the magnitude necessary

to absorb claims and administration expense increases was not

considered to be a satisfactory means of balancing the

Automobile Insurance Act fund." Well, I'd like to ask the

Minister what is considered a satisfactory method. Or is the

interest of this $34 million just being carried into next year

to further increase the deficit for next year? You don't have

to be a financial wizard to know that the cost of a $34 million

deficit has to be entered somewhere in the books.

I shall ask another question. The Minister so blandly put it

in the report, as a footnote almost, that of course legislation

exists whereby the government may take money from gasoline and

motor fuel funds to neutralize this kind of deficit. This

report, as I said a moment ago, not only tends to gloss over a

very substantial deficit, but it leaves the public completely

uninformed on several very fundamental points.

First of all, how is this government going to deal with the

$34 million deficit? Secondly, the statement is left hanging in

the air that the government may take money from motor fuel and

gasoline tax. Then we have this other bland statement. The most

obvious way in which this matter should be solved is to make

the premium rates realistic to the costs. That would be the

third way in which this deficit could either be closed, or a

deficit in next year's budget obviated. So there are three very

fundamental questions, none of which are answered in this

report.

As I think a former speaker said this afternoon, let's be reasonable and

let's be fair to the people of British Columbia. If any private or public

company or government brings in a plan with a great deal of promise and noise

and claims of instant success and finishes up with this kind of financial

deficit after one year, surely the people of British Columbia are entitled

to ask how the deficit is to be wiped out. There are at least these three

methods: (1) take the money out of the gas tax; or (2) take the money from

every citizen, which I presume is what's happening at the present time, to

pay for the debt charges and carry the $34 million; or (3) bring the premiums

up to a realistic level to meet the cost of the claims.

As I say, it seems a very simple question and I am sure one

of these three answers has to be the one, or, I suppose

tragically, the fourth option would be just to let things

continue the way they are and carry the deficit and have the

cost of that paid for by every citizen in the province, whether

he owns a car or drives a car or never even gets into a car.

Surely we are not going to subsidize a cost of this nature,

incurred through one particular government programme — namely,

in relation to automobiles — and have it subsidized in part by

every citizen who pays taxes in the province whether he ever

even gets into a motor car. This would have to be the most

unfair way to deal with the problem.

As far as we are concerned, surely the straightforward and

logical and reasonable way to solve this sorry financial mess

is to take the kind of actuarial figures and advice which I

presume are available. The Minister said that he took actuarial

advice in the first instance in setting the rates to begin

with. So in trying to get the proper rates, I would suggest

that he take different advice the next time. At least this

would seem to make sense in terms of vindicating the promise

the government made when they brought in the plan that it would

be self-sustaining and that they would be able to do so much

better.

Another interesting comment in the report which makes it a

bit insulting is the fact that the Minister brags that Autoplan

invests capital throughout the year and made 10 per cent on

their money, which was something the private companies never

did. That may well be so. But to come out with that boast and

at the same time lose $34 million when they had been able to

make $10 million off investment makes you realize how very

much better in the business world the private enterprise guys

must be if this Minister had an extra $10 million from

investment income which the private companies never had, or

never put towards the cost of premiums, and this company still

manages to lose $34 million. It seems to me that time and time

again this report just insults the basic intelligence of

anybody who takes a realistic look at it.

MR. LEWIS: Look at private industry rates.

MR. WALLACE: The private industry rates are a lot more

realistic in relation to the cost.

The trouble with this government is that it thinks that all

it has to do is to get into business and

[ Page

1789 ]

somehow or other, even if it makes a loss, being

government, there is always another pocket out of which it can take the

money. And they are right.

That pocket is your pocket and my pocket and the pocket of every

taxpayer in the province. All this mud that has been thrown at the

private companies and the way this government can do things so much

better and cheaper and faster and everything else certainly has to be

the most colossal failure of all the much-vaunted programmes this

government said it would bring in when it fought in the 1972 election.

I don't want to leave the very essential point, as far as I

see it from our side of the House, Mr. Chairman: regardless of

the financial mess they are in, I just want it very clearly on

record from our part of the House that we do not see it

necessary now or in the future that government revenue from

whatever source — because it comes from the taxpayer in the in

first place — should be used to subsidize automobile

insurance, period. There are so many areas of genuine human

need far more important than paying your car insurance premium

that I could list for the people of t this House, and they have

been mentioned many times in previous debates. I am talking

about the human factor — the health, the education, the human

resources that are needed in this province. We are sitting with

a $34 million deficit on car insurance when the Minister of

Health (Hon. Mr. Cocke) told me a week or two ago: "Oh, my

goodness, we couldn't afford intermediate care." When I said we

could do a great deal with $20 million, "Oh," he said,

"that wouldn't be nearly enough." It would be a very

respectable, substantial start to looking after the real human

health care needs of many people in this province of all age

groups!

It really burns me to stand here and think that we are

pouring $34 million down the drain on a car insurance subsidy.

It just doesn't make sense. I wish this government that is

supposed to be the people's government would get its priorities

straightened out for a start. That has to be the No. 1 mistake

they are making in their priorities.

They can't even be consistent, Mr. Chairman. On the one

direction, we have the Premier of this province saying that he

is putting 2 cents on every gallon of gas. When we say that

this is inflationary and makes life more expensive for the

consumer, he says: "Well, we want to get them out of their cars

and on to the buses." With the next breath, we find the

government subsidizing car insurance to the tune of $34 million

to make it cheaper for people to drive their cars. If that

isn't running in opposite directions at the same time, I just

don't know what is.

It is a sad debate and it is an unfortunate situation. I really think that

for a Minister who in opposition gave so much to this province and who worked

for many years as a tireless leader of the opposition to have found himself

in government landed with this job reflects...and I personally feel sorry

for this Minister for that reason.

He has been stuck with a job he never deserved to have. It was an ideological charade, the whole business, and

he was landed with this job because probably the Premier

himself saw the kind of mess that was down the road and didn't

want to be associated with it as the present leader. But it

seemed like a sorry and unfair task to land on the shoulders of

the former leader.

Be that as it may, this government is in one of the biggest

boondoggles it could be in by financial mistakes and bad

planning of this particular scheme. Then they don't even have

the common decency, when they're in the hold to $34 million, to

at least come up clean to the public of British Columbia and

explain that they've made some mistakes and say that in the

light of these mistakes, the logical, honest thing to do is put

up the premiums to meet the realistic costs of the plan. Oh,

no! Instead of that we get every kind of excuse under the sun —

from bad weather in the winter to advice from the accountants

who want to include unclaimed costs as a certain percentage.

I find on inquiry that even at that you haven't included the

standard amount of 10 per cent of claims that are paid. That

$11 million in this report, which is apologized for somewhere

in this report. The auditors thought it would be prudent to put

X million dollars aside. I find that the average percentage is

10 per cent of the claims. So 10 per cent of $214 million,

which is what the claims are recorded as, would be $21 million,

not $11 million. So if you still want to get picky about the

figures, we could even ask whether or not the advice the

auditors gave is absolutely on target. If not, tell me, or show

us, or tell the House what other similar companies put aside 5

per cent as the figure representing anticipated claims still

unpaid.

So instead of getting a clean breast of this whole

situation, which I'm sure would have helped the province and

certainly built a measure of confidence back into this

government, by some people at least, oh, no, we get this report

which leaves so many questions unanswered and, which as I say,

has the one central, pathetic feature that when we have so many

areas in which money might be well spent on behalf of the

people of the province, we have this tragic mismanagement of

funds related to the automobile, which this government and this

Premier and many other Ministers have said is so much a scourge

in society, that it's a polluter and it kills people. These are

all true.

Even there the Minister, somewhere in the report, complains

about the increasing number of road accidents — we would all

agree with that — and the increasing number of deaths. But when

the population is increasing at 3 per cent and, presumably, the

vehicles on the road are increasing by

[ Page 1790 ]

a substantial percentage every year, what kind of dummies

does the Minister think we are to sit and read this report and

not realize that a lot of these factors are inevitable? More

people — more cars, more accidents, more deaths.

I just say time and time again that this report is full of

rather weak-kneed excuses when the facts and the figures and

the changing world around us explain many of these sad and

sorry figures in relation to human mortality and morbidity.

I think it would have served this Minister a better purpose

to come right out in this report and make it plain that one

basic reason they're in a financial mess is that the premiums

are too low; they're not related to the realistic cost of the

plan. I think that for the year ahead to have left it hanging

in mid-air saying, "We may do this and we may do that and we

may do the next thing," is just another example of

evasion.

I think, as I said a moment ago, that I find it rather

tragic in this Minister, who sweated blood for years in

opposition for the people of this province, to have developed

what can only be described as a somewhat evasive response to

much of the criticism and questioning which he has been

subjected to right through the history of this whole sorry

Autoplan business.

I would like to ask him some specific questions on some of

the costs — the $7 million which is to be considered as earned

premium. Was the manner in which that was decided any different

from the usual procedures? The $7 million figure for unearned

premiums. I'd like to ask why there isn't, specifically, a

balance sheet for the Automobile Insurance Act fund. The page

has no statement of assets and liabilities. It simple has....

There's no specific breakdown, for example, of some of the

costs which we've all heard debated before.

Even in the House today the whole question of advertising

and adjusting costs and claims costs — everything is lumped in

in large ballpark figures with no kind of breakdown. Surely

when we heard over the months repeated criticism of advertising

about the people's plan and the one-page ads saying, "thank you

for the wonderful job the people did in setting up the plan," and all....

Interjection.

MR. WALLACE: I'm glad the Minister of Labour (Hon. Mr. King)

applauds that move, because I suppose it has some spin-off of

producing employment for some of the people involved in the

advertising industry. But I think the cost-benefit ratio might

open people's eyes.

Although this is not included in a breakdown in the report, I wonder if the

Minister could tell us in total, in one year, what has been the total cost

of advertising. We won't even ask for the breakdown on different....

HON. MR. STRACHAN: I gave that.

MR. WALLACE: When did you give that?

Interjection.

MR. WALLACE: Well, I'm sorry if I was out of the House when

you gave that figure. With the kind of costs that are described

on page 16 of the report — revenue and claims and adjustment

costs — it seems to me that we're entitled to some kind of a

breakdown of figures of that dimension. Surely advertising

would have been one.

I wonder if the Minister could tell me, in regard to the

heading, "Claims Incurred and Adjustment Costs," which

are put together as $4.8 million....

Interjections.

MR. WALLACE: On page 16: "Claims Incurred and Adjustment

Costs."

Interjection.

MR. WALLACE: Why would this not be given separately? Why is

there no breakdown on that large ballpark figure?

Administrative costs: $2.229 million. Does it not seem

reasonable that the opposition should ask how some of these

very large figures are compiled and not just have the simple,

all-inclusive statement for such a large sum of money?

I touched on another point earlier. Has the Minister or the

cabinet decided how the $34 million deficit is to be handled? I

mentioned the three or four options that perhaps present

themselves.

I'd like to know at the present time whether there is

available a

schedule of costs for lands and buildings. There

again, on another page in the report, this is just put in as

one large ballpark figure. I know that one of the speakers this

afternoon asked the Minister about a specific piece of land.

But doesn't the Minister feel that, there again, dealing with

millions and millions of dollars, it would be a fair way in

which this opposition could function to have a

schedule showing

the breakdown in the report of all the different lands and

buildings involved in these costs?

What about the agricultural land that was bought for a

claims centre and could not meet zoning requirements? Could you

tell us what was the ultimate history of that piece of land?

Was it resold to the Land Commission, or what happened?

We would also like to ask how many square feet of space is

leased by ICBC.

Interjection.

[ Page

1791 ]

MR. WALLACE: How many square feet of space are leased by

ICBC from month to month from the B.C. government? Does it

lease any space from the B.C. government or any of its

agencies?

Interjection.

MR. WALLACE: Well, there's certainly a lot of it around the

country that could be occupied if there's any more needed. What is the current monthly rate of expense for leasing

property and equipment? I notice somewhere in the report that

there are figures projected for the next four years on property

and equipment leased for periods of more than one year. In

1976, I notice, $3.3 million is scheduled to be paid on

property and equipment leased....

MR. CHAIRMAN: I'll have to interrupt the Member to remind

him that his green light is on. No longer forever amber.

MR. WALLACE: There are so many other questions, it's

difficult to know which one to leave with the Minister.

Can the Minister make a commitment at this point either to

increase or not to increase premiums? I think this is the most

essential question that the people of British Columbia want

answered. The report leaves things unsettled. The government

may take money from the gasoline fund or you might have to

review premiums. There are several other "I mights."

Is the Minister in a position to tell the House which way

this deficit is going to be handled? I think perhaps we can get

back to him later on.

HON. MR. STRACHAN: The Member made reference to the

statement, as others have, which I made about two years ago. As

this book shows, we have not yet received a single penny of tax

dollars. I want to make that very clear. There are people going

around saying that we have a $30 to $40 million deficit on top

of $120 million received from general revenue. That is and has

been said by people who should know better. I want to make that

clear: not one penny has come to ICBC from the Government of

British Columbia.

MR. CHAIRMAN: I would like to interrupt the Minister for a

minute. It has been brought to my attention that neither the

present speaker nor the previous one was addressing the

Chair.

HON. MR. STRACHAN: I am sorry, Mr. Chairman. I will speak to

you.

Well, that's as I pointed out to you; I don't know whether you were in the

House. There was legislation passed which allows it.

The Member made reference to the refund plan.

Interjections.

HON. MR. STRACHAN: A little order, please. A little

order.

Interjections.

HON. MR. STRACHAN: There were 200 companies in operation in

the province. It was impossible to know what every one of them

was charging for a given coverage, especially in view of the

fact that very often an individual agent would give special

consideration to one of the old-time customers. They would end

up with different rates. That's one of the things we faced: the

sheer impossibility of knowing what every company had been

charging. I think the minority of people who have made

application indicate that.

I can understand the Member's high dudgeon about all this

money, $200-odd million, going for — what was his phrase? —

"cars, metal and rubber." But one of the reasons that people

take automobile insurance is to protect themselves against

bodily injury. As a matter of fact, because of the rapid

settlement in cases of bodily injury and death, we are giving

you much better service to overcome that than was ever provided

previously. Very substantial sums go for that. Bodily injury,

$38 million; death benefits, $3.2 million; others, $7 million.

That would be the paraplegics in there. So when you talk about

that, remember. The other is protection for the individual as a

human being.

Interjection.

HON. MR. STRACHAN: Okay. I'm not going to argue with you. I

just want to point out that a very large portion of this money

goes to help individuals who have had bodily injury or who have

been....

[Mr. Dent in the chair.]

Interjections.

MR. CHAIRMAN: Would the Hon. Minister address the Chair?

HON. MR. STRACHAN: No questions answered in this report