1987 Legislative Session: 1st Session, 34th Parliament

HANSARD

The following electronic version is for informational

purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JULY 15, 1987

Afternoon Sitting

[ Page 2555 ]

CONTENTS

Routine Proceedings

Ministerial Statement

Investigation under Trade Practice Act.

Hon. Mr. Couvelier –– 2555

Mr. Sihota

Tabling Documents –– 2555

Family Farm Protection Act, 1987 (Bill

M207). Mr. Rose

Introduction and first reading –– 2556

Fair Election Practices Act (Bill M208).

Mr. G. Hanson

Introduction and first reading –– 2556

Oral Questions

Recommendations of auditor-general. Mr.

Harcourt –– 2556

Dismissal of Mr. Ron Butlin. Ms. Edwards

–– 2557

Attendance of ministers in House. Mr.

Williams –– 2557

SkyTrain bridge construction. Ms.

Smallwood –– 2557

Mr. Miller

Admission fees to provincial museums. Ms.

Edwards –– 2557

Mr. Blencoe

Mr. G. Hanson

Mount Klappan coal project. Mr. Miller –– 2558

Motor Vehicle Amendment Act, 1987 (Bill

36). Committee stage. (Hon. Mr. Michael) –– 2558

Mr. Miller

Third reading

Motor Carrier Amendment Act, 1987 (Bill

47). Committee stage. (Hon. Mr. Michael) –– 2559

Mr. Miller

Third reading

Forest Amendment Act, 1987 (Bill 40).

Committee stage. (Hon. Mr. Parker) –– 2560

Mr. Miller

Mr. Jones

Mr. Williams

Third reading

University Endowment Land Amendment Act,

1987 (Bill 46). Committee stage.

(Hon. Mrs. Johnston) –– 2561

Third reading

University Amendment Act, 1987 (Bill 32).

Committee stage. (Hon. S. Hagen) –– 2562

Ms. Marzari

Mr. Jones

Third reading

University Foundations Act (Bill 57).

Committee stage. (Hon. S. Hagen) –– 2562

Mr. R. Fraser

Ms. Marzari

Third reading

British Columbia Enterprise Corporation

Financial Restructuring Act (Bill 53).

Second reading

Hon. Mr. Couvelier –– 2563

Mr. Stupich –– 2564

Mr. Williams –– 2564

Ms. Marzari –– 2566

Hon. Mr. Couvelier –– 2566

Ministerial Statement

SkyTrain bridge construction. Hon. Mrs.

Johnston –– 2567

Ms. Smallwood

Miscellaneous Statutes Amendment Act (No.

3), 1987 (Bill 55). Committee stage.

(Hon. B.R. Smith) –– 2567

Mr. Williams

Hon. Mrs. McCarthy

Mr. Stupich

Hon. Mr. Couvelier

Ms. Marzari

Hon. Mr. Veitch

Committee of Supply: Ministry of

Intergovernmental Relations estimates.

(Hon. Mr. Rogers)

On vote 44: minister's office –– 2575

Hon. Mr. Rogers

Mr. Skelly

Mr. Miller

Mr. Lovick

On vote 45: ministry operations –– 2583

Mr. Skelly

Committee of Supply: Ministry of

Provincial Secretary and Government Services estimates. (Hon. Mr.

Veitch)

On vote 52: minister's office –– 2583

Hon. Mr. Veitch

Mr. G. Hanson

Mr. R. Fraser

Mr. Rose

Mr. Miller

Mrs. Boone

Committee of Supply: Legislation estimates.

On vote 1: legislation –– 2592

Mr. Rose

Hon. Mr. Strachan

Appendix –– 2593

The House met at 2:05 p.m.

MR. DIRKS: In the gallery this afternoon we

have the good mayor of a city right next to my riding, Mayor Audrey

Moore of Castlegar. Would the House please make her welcome.

HON. MR. DUECK: In the galleries today are

friends of my family, Virginia and David Fairbrother and their three

children. Will the House please make them welcome.

MR. D'ARCY: On behalf of myself and

yourself, Mr. Speaker, I'd like to welcome a former constituent of mine

and a former president of the Young Socreds of British Columbia, John

Landis Jr. I must say that when he was president of that particular

organization, they had a reputation for somewhat better decorum and

discipline than that which they enjoy today. But I welcome him to this

House anyway.

MR. PELTON: Mr. Speaker, on your behalf I

would like to echo the greeting to John Landis, president of the UBC

Young Socreds, who is from Castlegar, which I don't think the member

for Trail mentioned.

HON. MR. REID: Mr. Speaker, in your gallery

is a special friend of both the Speaker and myself, the unofficial

mayor of Birkenhead Lake, Bob Thompson. Would the House please make him

welcome.

MR. REE: In the galleries today are the

special guests of our chief librarian, Joan Barton: her aunt and her

uncle, Mavis and Keith Ellis from St. Andrew, Jamaica, and also her

friends from Victoria, Don and Joyce Cowan. Would the House please

welcome them.

MR. HARCOURT: Mr. Speaker, as I'm

duty-bound to do as part of the agreement that we have with the Scrum

of the Earth, whom we played another basketball game with today, I have

to report the sad news that we lost 24 to 23 — missing the second

member for Vancouver Centre (Mr. Barnes), who is putting his roof on.

But the good news is that, after four hard-fought matches, it ended up

a 76-76 tie.

HON. MR. REID: I just want to advise the

Leader of the Opposition that he's on a roll and should keep going.

AN HON. MEMBER: It's too bad you're not.

HON. MR. REID: I'm not, you're right.

It's with extreme pleasure, Mr. Speaker, that I introduce

somebody who is on a roll. There is an alderman here from the city of

White Rock, who had the opportunity to be the lead person for the Prime

Minister's visit to the world-famous sand-castle contest, which over

200,000 people visited. Certainly the alderman, Jim Coleridge from

White Rock, had a lot to do with it. Would this House make him welcome.

HON. MR. DUECK: In the precinct today are

some officers from the Mexican tall ship everyone has seen in our

harbour. I had the pleasure of having lunch aboard that ship,

representing the provincial government. Would the House please make

them welcome.

Ministerial Statement

INVESTIGATION UNDER TRADE PRACTICES

ACT

HON. MR. COUVELIER: Mr. Speaker, I'd like

to make a ministerial statement.

As the hon. members are aware, certain Alberta-based financial

companies have recently found themselves in serious financial

difficulty. Among those companies are First Investors Corp. Ltd. and

Associated Investors of Canada Ltd., who were placed under

court-appointed management in Alberta on June 30. A number of other

related companies may also be involved. Some 14,000 B.C. Investors with

more than $150 million worth of investments are affected.

While this issue would normally entail the involvement of two

ministries of government — my own and the Ministry of Labour and

Consumer Services — my ministry will take the lead role in this

instance. This comes about because my colleague the Minister of Labour

and Consumer Services (Hon. L. Hanson) holds investments in related

companies.

Because of the large number of investors and the amount of

money involved, I am appointing Lyman Robinson, QC, as investigator,

pursuant to

section 12 of the Trade Practice Act.

Mr. Robinson, former dean of law at the University of

Victoria, where he is currently a professor of law, is also a

commissioner with the Law Reform Commission. Mr. Robinson will report

his findings to me as soon as possible.

MR. SIHOTA: This side of the House welcomes

the announcement by the minister. First of all, I want to thank the

minister for giving us the benefit of seeing the ministerial statement

in advance and also thank him for his careful comments with respect to

the interests of the Minister of Labour and Consumer Services.

I want to applaud the choice of Prof. Lyman Robinson. He is an

individual with impeccable credentials, someone with whom I'm also very

familiar because of my tenure at the University of Victoria. I cannot

think of a better choice in this regard.

The inquiry is, as I understand it, being made pursuant to the

provisions of the Trade Practice Act, which are sufficiently broad to

allow an individual conducting an inquiry under that act to take a look

at representations with respect to the status of various accounts — in

other words, the whole issue of whether these funds were or were not

insured; to take a look at representations under

section 3 of the act

that were made with respect to the transactions — and of course there

has been many a story from the public with respect to representations

that were made at the time of executing and investing in contracts with

Principal Trust and its group of companies; and it allows clearly for

one to investigate with respect to deceptive acts — and I think I made

a comment in the House about that earlier on with respect to

advertising.

It is a much appreciated and welcome move. I think it is one

that ought to provide some comfort to those who have lost funds through

investments, and is certainly welcomed by all of us on this side of the

House.

Hon. Mr. Davis tabled the 1986-87 annual report of the British

Columbia Hydro and Power Authority.

[ Page 2556 ]

Introduction of Bills

FAMILY FARM PROTECTION ACT, 1987.

Mr. Rose presented a bill intituled Family Farm Protection

Act, 1987.

MR. ROSE: I'd like to explain a little bit

about the bill. It's designed to address a neglected need in British

Columbia the need to help farmers protect and sustain their farming

operations. Over 2,000 farms passed out of individual ownership between

1981 and 1986, and that's about one a day.

This bill is modelled on Manitoba's current act, complements

the present Debtor Assistance Act and proposes three major tools to be

put in place to keep farms in family ownership. First, farmers will be

guaranteed a day in court before a bank or other lending institution

can foreclose, and the court will be empowered to look for alternative

solutions to prevent arbitrary foreclosures; second, creation of

mediation panels of farmers to mediate between the lender and the

creditor; and finally, in extreme cases, that a cabinet can be given

authority to proclaim foreclosure moratoriums for all or any part of

the farming industry.

Agriculture is a vital resource industry for British Columbia.

This bill or something like it is needed now, because there is more

financial stress in B.C. agriculture than exists in any other part of

Canada.

Bill M207 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next sitting of

the House after today.

[2:15]

FAIR ELECTION PRACTICES ACT

Mr. G. Hanson presented a bill intituled Fair Election

Practices Act.

MR. G. HANSON: In commenting on this bill,

its main purpose is to establish a permanent electoral commission that

could operate independently of the party in power. This bill would

provide the commission with a mandate to establish fair electoral

boundaries, set election spending limits and oversee all aspects of

provincial elections to ensure fairness and the greatest possible

access to voting rights.

The bill also reduces the voting age from 19 years to 18

years, to fall in line with legislation with other provinces in Canada.

It calls for the appointment of a chief electoral officer to be

recommended by an all-party committee of the Legislature, and provides

for a thorough enumeration after each writ of a general election is

issued.

Bill M208 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next sitting of

the House after today.

Oral Questions

RECOMMENDATIONS OF AUDITOR-GENERAL

MR. HARCOURT: I would like to ask the

Premier a question about the acting auditor-general's recommendations

this morning to the Public Accounts Committee, when unfortunately he

made two recommendations that were rejected by the government

back-benchers. So I'd like to ask the Premier if he would accept the

recommendation that the auditor general conduct a full review of the

process of accountability of Crown corporations to this Legislature.

HON. MR. VANDER ZALM: I don't have the

benefit of all that was said and presented to the committee, but I

understand that the recommendations were in fact tabled — not rejected,

but tabled. In light of that, I think in fairness to the committee and

the process which we all support, we ought to see the result of the

tabling motion before anything further is done here.

MR. SPEAKER: I might remind the Leader of

the Opposition that any detailed discussion of what happens in the

committee before the report is brought before the House is not a proper

subject for question period.

MR. HARCOURT: It's an open meeting, Mr.

Speaker, and I think that this is an important matter that has been

left too long — to have an acting auditor-general. I would like to ask

a supplementary.

MR. SPEAKER: If the Leader of the

Opposition could take his seat for a moment. I can't change the rules.

The rules are made by all members of the House, and the rules are that

the matter that's before the committee cannot be discussed in question

period, or in the House, until that committee reports to the House. If

the Leader of the Opposition wants to rephrase his question in another

manner that doesn't interfere with the committee discussion this

morning, then the Chair could accept that question.

MR. HARCOURT: In general terms, Mr.

Speaker, I would like to ask the Premier, because he's made statements

on this whole question of the accountability of Crown corporations....

I would like to know if he personally is going to bring forward

recommendations — he has made these statements, so I'm assuming that we

will be seeing these shortly — about the auditor-general being able to

conduct a full review of Crown corporations.

HON. MR. VANDER ZALM: Mr. Speaker, I can't

give the House any assurance that I will bring forth recommendations,

but I can assure the House that accountability is certainly a matter of

concern to me, and accountability for Crown corporations as much as

anything else in government, and it will be fully looked at.

MR. HARCOURT: Supplementary on that, Mr.

Speaker. The auditor-general, to do that, requires some independence

and some staff, and I would like to have the assurance of the Premier

that he will make sure that the auditor-general reports to the

Legislature and has proper staff. Will he give the assurances that

there will be independence for the auditor general to the Legislature,

and with a proper budget, that his staff will be restored?

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

can't give the hon. member of the House the assurance that I or anyone

would in any way recommend a change in the procedure or the involvement

by the auditor-general in Crown

[ Page 2557 ]

corporations, because it could perhaps be quite improper in

some instances for the auditor-general to be involved with the

reporting or the auditing of a Crown corporation, if in fact such Crown

corporation is part private and part public; for example, the Workers'

Compensation Board. So before we run off and make statements as to what

should be or what might be, it should be carefully considered.

DISMISSAL OF MR. RON BUTLIN

MS. EDWARDS: My question is to the Minister

of Tourism, Recreation and Culture. You have suggested that you put the

issue of the firing of the B.C. Games manager into "the context of the

second contract" with him. Was there any requirement that the minister

be silent about the disposition of the contract signed in late 1986?

HON. MR. REID: The answer is no.

MS. EDWARDS: A supplementary. Why has the

minister made reference to the 60-day contract when expressing his

interpretation of the termination in late May of the director's

then-current contract?

HON. MR. REID: In reference to the response

on number one contract and number two contract, the reason for my

explanation is that one contract had to be seceded before the second

contract could be put in place.

MS. EDWARDS: There seems to have been no

requirement, however, that there be any silence on your part about the

contract that was terminated, the one signed in late 1986.

ATTENDANCE OF MINISTERS IN HOUSE

MR. WILLIAMS: To the Premier. Yesterday the

House was dealing with the restructuring of B.C. Place and B.C.

Development, and the Minister of Economic Development (Hon. Mrs.

McCarthy) chose to not participate in the debate of this monumental

transfusion of $396 million. Is that kind of behaviour acceptable to

the Premier?

HON. MR. VANDER ZALM: If we're going to use

question period to discuss who should or should not participate in

debate, then I suppose we could spend the whole of each question period

discussing where people are when the debates are going on. I don't

think this is at all in order. However, there will be a further

opportunity to debate in committee.

MR. WILLIAMS: I take it this is a new

policy of government: that ministers are simply not expected to be in

the chamber even when borrowings of as much of $400 million are

involved, and they don't have to respond.

HON. MR. VANDER ZALM: Mr. Speaker, that was

an omnibus bill presented by the Provincial Secretary (Hon. Mr.

Veitch), and it was properly presented. Now it will be debated in

committee, and there will be every opportunity for every member on the

other side to debate each and every

section of the bill.

SKYTRAIN BRIDGE CONSTRUCTION

MS. SMALLWOOD: My question is to the

Minister of Municipal Affairs, with regard to reported major structural

problems with the concrete supports of the Kerkhoff-Hyundai SkyTrain

bridge. I'd like the minister to confirm that for the House. I'd like

the minister also to make comment on the fact that the construction at

that bridge now has been down for two to three days. Will the bridge he

finished on time?

HON. MRS. JOHNSTON: In response to the

first question, the member did bring that question to me some time ago,

and I obtained a written report from the officials and inspection

officials on the SkyTrain project. The report indicated that there was

no problem. At most times there are up to ten inspectors on the job, so

we are very conscious of the safety aspects. I have no reason to

suspect that there is anything other than first-class workmanship going

into the job. As for the project itself, it continues on

schedule and

within budget.

MS. SMALLWOOD: I raised concerns over the

construction with the minister quite a while ago. My question is

specifically to the last two or three days. My information is that the

job is down now, and it is down because of major structural problems in

the concrete. Can the minister comment on the job at the moment?

HON. MRS. JOHNSTON: If the member has some

information to that effect, I would certainly appreciate receiving it,

because if it is down because of structural problems I am certainly not

aware of that. I would very much appreciate having some specifics, and

I look forward to having them as soon as question period concludes, so

I can follow that up without delay.

MR. MILLER: In view of the information that

came to light earlier today during estimates and the questions that

were raised initially on the expertise of the company Kerkhoff-Hyundai

in terms of this project, and in view of the questions raised by my

colleague from Surrey, would the minister undertake to do a very quick

investigation? We certainly don't want a repeat of the Coquihalla

experience, in terms of the doubling of budgets on these kinds of

projects. Would the minister do a very quick check to ensure not only

that the project is on budget, but that the completion

schedule will be

met and the budget projection will be met in terms of that completion

date?

HON. MRS. JOHNSTON: I'm in constant contact

with the officials, and the information given me as recently as

yesterday afternoon would suggest that we are on time and on budget.

ADMISSION FEES TO PROVINCIAL MUSEUMS

MS. EDWARDS: I have another question to the

Minister of Tourism, Recreation and Culture. The minister has refused

to reconsider his decision to impose fees at the Provincial Museum and

the two heritage parks in British Columbia, and at several other

facilities. In light of the fact that there was major advertising in

government publications that these facilities are free, would the

minister at least consider one free day throughout the year for these

facilities?

HON. MR. REID: I'm pleased to announce that

starting October 1 and through to the end of April, every Monday all

facilities will be free.

[ Page 2558 ]

MR. BLENCOE: I have a question for the

Minister of Municipal Affairs on the Provincial Museum. As the minister

is probably aware, the Minister of Tourism has erected a used hotdog

stand from Expo outside the museum to collect the fees. It turns out

that the Minister of Tourism has not obtained a municipal permit, and

it's in violation of the zoning and the development permits. As the

minister responsible for municipal affairs, does she approve of a

ministry of the provincial government disobeying the local laws of a

municipality?

HON. MRS. JOHNSTON: I was made aware of

that situation on this morning's news broadcast on a Victoria station.

I would really prefer to have that question put to the Minister of

Tourism, because I really have no further knowledge of that, and I'm

sure he's much better informed on that subject than I am.

HON. MR. REID: In response to the question

from the member for Kootenay, inasmuch as the museum is just a tenant

of BCBC and we are only responsible to pay the rent, the building

itself comes under the direction of BCBC. And it's not a hotdog stand;

it's a stand to sell passes for $10 to families and to children. We

understand they're lined up waiting to get in over there today, so it's

having a very successful day; and I will report daily the attendance at

the museum and the income to the province.

[2:30]

MR. BLENCOE: With all the buck-passing,

nobody wants to deal with this issue. A question to the Minister of

Tourism. Does he believe — clearly the Minister of Municipal Affairs

doesn't want to deal with the issue — that his ministry, which is

responsible for this used hotdog stand, should disobey the local laws

which all other Victorians and British Columbians have to observe when

they put up or erect buildings? Does he believe his ministry should be

separate from the laws that apply to other people?

HON. MR. REID: The answer is no.

MR. G. HANSON: A supplementary to the

Minister of Tourism. Is the minister aware that in 972 days there will

no admission charges to the Provincial Museum?

MOUNT KLAPPAN COAL PROJECT

MR. MILLER: My question is to the Minister

of Energy on behalf of my colleague the member for Atlin (Mr. Guno).

Over 35 groups have petitioned your ministry for public hearings on the

Mount Klappan coal project. Has the minister decided to hold public

hearings on Gulf's stage 2 proposal for the Mount Klappan project?

HON. MR. DAVIS: Mr. Speaker, hearings will

be held if, as and when the company makes a serious proposal.

Orders of the Day

HON. S. HAGEN: Mr. Speaker, I'd like to ask

for leave to make an introduction.

Leave granted.

HON. S. HAGEN: It's my pleasure this

afternoon, Mr. Speaker, to welcome two friends of mine to the

galleries. They are two friends whom I haven't seen for a long time but

with whom I attended school — it seems like a few years ago. I'd like

to introduce to the House Don and Verneal Kallevig, and ask you to make

them welcome.

HON. MR. STRACHAN: Committee on Bill 36,

Mr. Speaker.

MOTOR VEHICLE AMENDMENT ACT, 1987

The House in committee on Bill 36; Mrs. Gran in the chair.

Sections 1 to 6 inclusive approved.

section 7.

MR. MILLER: Very briefly, Madam Chairman, I

raised a cautionary note in terms of the introduction of the amber

arrow, and the minister, I believe, stated that yellow lights are now

used. Perhaps the minister could briefly advise the House how quickly

we will be proceeding in terms of installing the yellow arrow. What is

the configuration? Will it be another device affixed below the green

arrow that will operate substantially as the yellow light does now with

the normal traffic signal? Will you try a few installations and monitor

the effect? Those are general questions in terms of my concern about

monitoring and any accidents that might happen as a result of

unfamiliarity with the device.

HON. MR. MICHAEL: I don't know the complete

technicalities as to the design, but the concept is plain and simple.

Drivers who are currently entering intersections where the green arrow

starts to flash to indicate that a left turn is permitted.... The

problem we seem to be having is the lull between the time that the

green arrow ceases to flash and the time in which the oncoming traffic

commences to move. There is hesitation in there, which causes the

drivers to be uncertain of whether they can proceed to make a left-hand

turn, because the oncoming traffic doesn't seem to be moving. There are

a few seconds in there, which is the problem. It is, indeed, resulting

in a number of accidents. All we intend to do, through technical design

— whether it's going to be in the same circle or in an additional

circle....

All we're doing, Mr. Member, is making the law. It will be up

to the municipalities and the cities to make the changeover. I can

assure you that we will not be putting any undue pressure on the

municipalities and cities to install these devices overnight. However,

the guidelines, laws and regulations will be in place to have this

requirement as the changes are made and designed.

We have experienced a good number of accidents as a result of

this uncertainty, and all we're doing is trying to correct that problem.

MR. MILLER: I assume, and the minister can

simply indicate by nodding his head, that these will only be installed

where the left turn is only to be made on the green arrow; in other

words, not in those situations where there is a green arrow to assist

the movement of that left-turn traffic but there is nothing prohibiting

a left turn when the green arrow is not on — for example, just to give

that left-turn traffic a break to

[ Page 2559 ]

get out there, but you can still make that left turn on a

green light. I assume it's only going to be where you can only make the

left turn when the green arrow indicates that you can.

HON. MR. MICHAEL: The clear intention of

the legislation is to eliminate the uncertainty in the instances where

the green arrow indicates a left-hand turn and is flashing to the point

at which it ceases and the traffic in the opposite direction commences

to move. That's the only purpose of the legislation: to have an amber

light there to indicate the same message exactly as an amber light does

under normal circumstances.

Sections 7 to 12 inclusive approved.

Title approved.

HON. MR. MICHAEL: Madam Chairman, I move

the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 36, Motor Vehicle Amendment Act, 1987, reported complete

without amendment, read a third time and passed.

HON. MR. ROGERS: Committee on Bill 47, Mr.

Speaker.

MOTOR CARRIER AMENDMENT ACT, 1987

The House in committee on Bill 47; Mrs. Gran in the chair.

Sections 1 to 10 inclusive approved.

section 11.

MR. MILLER: First of all, with respect to

31.1: "The commission shall (

a) comply with any general directive of

the minister with respect to the exercise of its power and

functions...." Can the minister briefly outline the need for this

section, what kind of directives he would intend to send to the

commission and what will be done by the commission with respect to

these directives that is now not being done?

HON. MR. MICHAEL: Currently the commission

has a right to hold public hearings and do things that are provided for

by legislation and within the regulations. The minister will now be in

a position to send a directive, a policy statement of the government,

to the commission that perhaps a hearing should be held to consider the

impact of the trucking regulations on small communities and hamlets in

the isolated areas of the province. It's a tool that may or may not

ever be used, but if an occasion should arise when the minister, in the

public interest, feels that a firm policy directive is required from

government, the provision is now there for the minister to act.

MR. MILLER: First of all, when the minister

— or any minister — brings in a specific piece of legislation and then

says it may or may not ever be used.... I have some difficulty with

that, because obviously there was a feeling on the part of the

minister, and perhaps the cabinet, that there was something urgent

enough to bring in amendments to legislation.

The example that the minister used was that there may be a

directive issued by the minister to protect the interests of a small

community in terms of holding hearings, etc. Yet if I'm not mistaken,

and I don't think I am, the Motor Carrier Act clearly sets out matters

that are there to protect the public interest. That is one of them: the

impact on communities of a particular service; how they would be

impacted if other carriers were allowed to come in, whether they be bus

or transport carriers. So clearly the commission's mandate, at this

point, is to consider those very items that the minister has just

suggested that he would be issuing directives to the commission to

consider.

Again, I have a bit of difficulty. Is the commission not doing

its job now in terms of the legislation that exists, and the kinds of

issues and protections that are included — the public interest in a

number of issues, in terms of rates and service levels? Is the

commission not doing an adequate job of meeting those concerns?

HON. MR. MICHAEL: Madam Chairman, I have no

complaints up to now. Having been the minister for a short period of

time, I have no complaints. But it's the feeling of the minister that

section will perhaps give an opportunity in the future, if and when a

situation may arise when the minister feels it's important in the

interest of the citizens of the province and in the interest of

carriers and shippers and small communities that perhaps some direction

may be required — I repeat, may be required. It could be it will never

be required; let's hope it won't. In the changing world we're living

in, with regulations being changed nationally, some regulations being

changed provincially and future changes anticipated, perhaps it may be

in the interest of the public in general in British Columbia to have

the powers given under

section

[2:45]

MR. MILLER: Mr. Minister, we know there

have been some changes made already at the branch level. For example,

the manager of some years has departed, and in his place we now have a

former civil servant who used to be responsible for some items — the

superintendent of brokers, I believe. Obviously there are some changes

taking place within the branch, and it's not surprising, perhaps, in

light of the move to deregulation that we see.

I want to repeat a concern that I talked about in second

reading, which is that the amendments introduced in

section 11 of Bill

47 create a bit of a danger, I think, which is that the door is open to

the politicization of the commission and its functions. I say this not

because I'm accusing this particular minister of wanting to be able to

exercise that kind of political influence, but when we change

legislation we must remember that we can't deal with it personally.

It's a piece of legislation, and anybody at any given time will be

dealing with it.

So we've opened the door for that kind of politicization, that

kind of flow from the minister, to what has been an independent

commission appointed by the minister. Obviously the minister should

exercise that kind of judgment, concerning who sits on the commission.

But the minister

[ Page 2560 ]

may find that, in the final analysis, it might be a bit

uncomfortable in terms of the seeming appearance of politicization,

that the commission is no longer separate and independent, although

appointed by the minister. We've opened up the door that swings both

ways, presumably, between the minister and the commission.

I add that cautionary note. We're not going to oppose the

legislation, as I indicated in second reading, because the government

has — to their credit — agreed that, prior to any substantive changes

in deregulation in the transportation industry, there will be an

all-party committee of this House. We haven't established exactly how

that's going to be done. I know the minister has indicated that he

intends to distribute a paper — a Green Paper, I believe he called it.

Again, I don't particularly object to that. I suppose that would be the

appropriate time a committee would be struck — perhaps a subcommittee,

who knows? — to tour the province in terms of the interests of those

communities. After all, the smaller, remote communities need special

attention, I think. So the committee would do the work necessary before

we would get into any legislative change.

I do have some concern, and I do hope that the changes do not

lead to a deterioration of the function of the commission, which over

time has really done a decent job. I think they've tried to keep

abreast of the times; they've tried to be nonbureaucratic. But they've

really been carrying out the function as laid out in the Motor Carrier

Act, and that is something we agree on, not something the commission

decides. We decide that.

Having said that, I have no further problems with any other

sections of the bill, and we will be supporting it.

Sections 11 to 29 inclusive approved.

Title approved.

HON. MR. MICHAEL: Madam Chairman, I move

the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 47, Motor Carrier Amendment Act, 1987, reported complete

without amendment, read a third time and passed.

HON. MR. ROGERS: Committee on Bill 40, Mr.

Speaker.

FOREST AMENDMENT ACT, 1987

The House in committee on Bill 40; Mrs. Gran in the chair.

Sections 1 to 13 inclusive approved.

section 14.

HON. MR. PARKER: Madam Chairman, I move the

amendment standing in my name on the order paper. [See appendix.)

On the amendment.

MR. MILLER: I wonder if the minister would

give a brief explanation of the amendment.

HON. MR. PARKER: It's just a matter of

terminology. According to the forest council, the word "rent" is more

appropriate than "rental."

Amendment approved.

Section 14 as amended approved.

Sections 15 to 18 inclusive approved.

section 19.

HON. MR. PARKER: Madam Chairman, I move the

amendment standing in my name on the order paper. [see appendix.]

section 19.1.

HON. MR. PARKER: By way of explanation,

Madam Chairman, the

section calls for cost information to be collected,

and the amendment provides for the confidentiality of the cost

information from each individual source.

Section 149(3) of the act

provides: "Subject to a lawful requirement, no person employed in the

Ministry of Forests shall release or divulge a report submitted under

subsection (1)(

b) or (c)...." We're amending that to read: " (1)(

b) to (

d) or information contained in it unless (

a) the person who

submitted the report gives his consent; or (

b) the information is

released or divulged as part of a

summary that presents it in such a

way that it cannot be identified with the person who submitted it."

MR. JONES: In light of that, I can

appreciate the minister's not desiring to divulge information about

specific companies with respect to pricing and contracts and that kind

of thing. But does the minister's statement imply that information in

general will be available without the names of the companies but some

idea of the pricing of important commodities in this province will be

available to the public? Will persons interested in obtaining such

information have to go through the minister's office?

HON. MR. PARKER: The information gathered

in building the cost data bank will be available in

summary form. It

will be available in stumpage calculation information. So it's readily

available.

MR. JONES: I'd like clarification on the

definition of "readily available." Can members of the opposition and the

public obtain that information in

summary form, or must they go through

the minister's office to do that, or can they go through the ministry

itself?

HON. MR. PARKER: Whatever will be, will be.

I don't know what's going to happen down the track.

MR. JONES: I don't think che sara, sara is

an answer. It's the Minister of Forests who determines the degree of

availability of information in his ministry. I would like to know

whether he feels that this kind of information should be public

information or whether he wants to maintain a degree

[ Page 2561 ]

of confidentiality and control of that information by having

it go through his office, or whether it will be readily available

through his ministry.

HON. MR. PARKER: The cost information is

available in the stumpage appraisal system. It's available in the

stumpage appraisal manual. If a person has a stumpage appraisal manual,

he'll have that data. That information is available from the public

information

section of the Ministry of Forests and Lands.

MR. JONES: There's a relationship, then,

between the amounts in the manual, or the allowances, and the real

numbers, and this will vary with the manufacturing facility or the

harvesting group or whoever is involved. So the question is, is that

relationship — which is the interesting one in terms of public policy,

one would think.... Could we have some assurance from the minister,

then, that that will be available to members at least, in terms of

review, so that we will know what the relationship is between the real

numbers of the range — and there's going to be a significant range, of

course — and the allowance that the ministry allows?

HON. MR. PARKER: We could provide

information on range, but we will not provide specific information to

members of the House.

MR. JONES: Just to clarify, Madam Chairman,

the point is that we're not asking for the cost of a particular

company. It could be company A, B, C or D, without knowing what the

company was specifically. Then having that data, in effect having the

range, and not just broad averages but being satisfied in terms of

those specifics, and the implications of, and the information around,

the differences between what is allowed and what the real numbers

are.... Because as the minister knows, the Hopwood report prepared for

the truck loggers, with the cooperation of the ministry, clearly showed

a significant difference — in fact, it was a 25 percent difference, if

my memory serves me right — between what the Crown allowed and the

actual cost the corporations faced. That's a significant difference in

terms of reasonable return to the Crown in those circumstances. So

that's a question.

HON. MR. PARKER: The purpose of this

section and the amendment is to provide the legislative authority to

get the real numbers. That's the intent here. We will have the real

numbers on the costs of doing business in the forest industry. The

specifics, according to each licensee, will not be released; that

confidentiality will be kept. However, the data can be shared providing

the anonymity is assured.

MR. WILLIAMS: Madam Chairman, I'd like to

thank the minister for that position. It's thoughtful and reasonable.

[3:00]

Sections 19.1 to 23 inclusive approved.

section 24.

MR. WILLIAMS: Madam Chairman, the whole

transitional period is just not clear to me. Maybe the minister could

give us an overview of how he sees this transitional period evolving

vis--vis the export and refunds relative to export and implementation

of the new system, and what sort of general time-frame he sees here.

HON. MR. PARKER: Madam Chairman, the

purpose of this

section is to cover the period of time it takes to get

all the different licences in line with this amendment act. It ensures

that the stumpage rental and the royalty charges can be implemented on

all forest tenures. So it's to cover a grey period of time.

MR. WILLIAMS: I'm not sure I understood,

Madam Chairman. The minister must have some kind of calendar in mind

with respect to this transitional period, and the likely implementation

of the new system. Is it something like September as the goal, or

something like that as the minister announced previously?

HON. MR. PARKER: Madam Chairman, we have a

tentative date, on or about September 1. Whether that's achievable is

not clear at this time, but it will be before the end of calendar 1987.

Sections 24 and 25 approved.

Title approved.

HON. MR. PARKER: Madam Chairman, I move the

committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 40, Forest Amendment Act, 1987, reported complete with

amendments.

DEPUTY SPEAKER: When shall the bill be read

a third time?

HON. MR. PARKER: With leave of the House

now, Mr. Speaker.

Leave granted.

Bill 40, Forest Amendment Act, 1987, read a third time and

passed.

HON. MR. ROGERS: Committee on Bill 46, Mr.

Speaker.

UNIVERSITY ENDOWMENT LAND

AMENDMENT AC77, 1987

The House in committee on Bill 46; Mrs. Gran in the chair.

Sections 1 to 9 inclusive approved.

Title approved.

HON. MRS. JOHNSTON: Madam Chairman, I move

the committee rise and report the bill complete without amendment.

[ Page 2562 ]

Motion approved.

The House resumed; Mr. Pelton, in the chair.

Bill 46, University Endowment Land Amendment Act, 1987,

reported complete without amendment, read a third time and passed.

HON. MR. ROGERS: Committee on Bill 32, Mr.

Speaker.

UNIVERSITY AMENDMENT ACT, 1987

The House in committee on Bill 32; Mrs. Gran in the chair.

Sections 1 to 7 inclusive approved.

section 8.

MS. MARZARI: I address

section 8 in the

context of the things I said yesterday during second reading of this

bill. I believe that

section 8 basically takes the responsibilities and

functions of the Universities Council and transfers them to the

Minister of Advanced Education.

The powers that are conferred upon the minister suggest that a

university will not establish a new degree program without the approval

of the minister. It strikes me that this is the very instance in which

the ministry and the government should be looking for an arm's-length

agreement between universities and a board or a body that sits

somewhere between institutions called universities and the ministry

itself. Although 46.1(1) clearly outlines and reiterates, basically,

that the universities are autonomous in terms of "the formulation and

adoption of academic policies...and the establishment of standards

for admission and graduation...and the selection and appointment of

staff," subsection (2) talks about the university not establishing any

new degree programs without ministerial approval.

I only point this out because I think it's a symbolic move for

the ministry to abandon the Universities Council, although I and the

opposition understand completely that the Universities Council has

atrophied and hasn't been used as a tool. I understand completely that

the universities themselves had lost any respect for the council.

I believe that this bill should not become

an act without

these comments being made.

Sections 8 and 9 approved.

section 10.

MR. JONES: Yesterday I raised a concern

with the minister with respect to the loss of input on the part of

school trustees in this province into the Joint Board of Teacher

Education — the loss of input into deciding how teacher education

should take place in this province. The minister responded by more or

less saying that it's really a matter for the Minister of Education

(Hon. Mr. Brummet).

I'm a very forgiving person. I am sure that the minister is

very busy and, by all accounts that I've heard, he is doing an

excellent job. However, it seems to me, as a former school trustee and

board chairman — as are a number of people who sit in this chamber —

that the loss of their voice in what is certainly an important part of

our education system in this province deserves a little more than:

"Don't bother me with that kind of question."

It seemed to me that it was the responsibility of this

minister, when he saw that amendments in this bill would bring about

the demise of the Joint Board of Teacher Education.... If he had

concerns about his former role as a school trustee and about teacher

input into an important part of the education system in this province,

he would have ensured and discussed with the Minister of Education

himself some alternative mechanisms for seeing that that trustee voice

was totally lost through the changes brought about by Bill 20.

I think it's an omission. The gravity of it is a question, but

it's still an omission on the part of this minister. Perhaps he has

talked to the Minister of Education, and perhaps he does have an answer

today.

HON. S. HAGEN: I believe that there will be

an opportunity for input into the new board. If I didn't feel that way,

I wouldn't have agreed with this section. I think you know me well

enough to know that I believe in input, that I believe in gathering

input from as broad a spectrum of society as I can. I rest assured that

there will be an opportunity for the B.C. school trustees to have input.

Sections 10 to 15 inclusive approved.

Title approved.

HON. S. HAGEN: Madam Chairman, I move the

committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 32, University Amendment Act, 1987, reported complete

without amendment, read a third time and passed.

HON. MR. STRACHAN: I call committee on Bill

57, Mr. Speaker.

UNIVERSITY FOUNDATIONS ACT

The House in committee on Bill 57; Mrs. Gran in the chair.

Section 1 approved.

section 2.

MR. R. FRASER: Madam Chairman, under the

title "Agent of the Crown," I believe the minister said yesterday,

according to my reading of the Blues, that as agent of the Crown this

act would enable donors to deduct up to 100 percent of the value of the

gifts from their income tax. I want to ask the minister through you: is

that what he meant?

HON. S. HAGEN: Yes, to the hon. member,

what I said is what I meant, and the situation does not change. The

same tax provisions were available under the Universities Council of

British Columbia, which had an agent-of-the-Crown status.

[ Page 2563 ]

MR. R. FRASER: If I was to say that a

person who had an income tax bill of $5,000 could then donate $5,000 to

the university, thereby having a tax of zero, is that right?

HON. S. HAGEN: It's been a long time since

I've done any tax work. I don't think it's quite that simple. As I'm

sure the member knows, there's a long, complicated tax calculation on

the sheet. What we are trying to do is achieve agent of-the-Crown

status for the three universities by this bill.

MR. R. FRASER: Then could I ask the

minister if this will enable....? I don't believe, for openers, that

there should be 100 percent tax-deductible credits to anybody, and so I

would like to ask the minister if he could assure me that this will

give the universities no more or less leverage than any other

charitable organization.

[3:15]

HON. S. HAGEN: To the first member for

Vancouver South, this will give the universities the same benefits they

had under the Universities Council of British Columbia, and I'm sure

that the member would be familiar with that, since he was the previous

minister.

MR. R. FRASER: What I wanted to establish

is whether or not it would be a greater advantage to a taxpayer to

donate to the universities than to the CNIB, the Red Cross or other

charitable agencies. Is there a difference now?

HON. S. HAGEN: Madam Chairman, I'm not an

income tax consultant. I would suggest that the member contact an

income tax consultant or possibly his Member of Parliament.

MR. R. FRASER: I don't think the statement

in the Blues is correct. I don't think you can deduct 100 percent of a

tax by making a donation, and I want to be certain that we can't. I

don't want universities to be given a special advantage over other

charities, which would then distort charitable giving.

I want the minister to review this question and look at it

very carefully. If in fact there is a differential, I would encourage

the government to remove it.

Sections 2 to 6 inclusive approved.

section 7.

MS. MARZARI:

Section 7 deals with

investments made by the three corporations being created under this

act. I would like to suggest to the minister that investment policies

be made by the boards with regard to B.C. companies, with regard to

investment in British Columbia, and perhaps with regard to an ethical

investment program, which is being readily adopted by many of our

credit unions and which might be extended to the universities.

I ask the minister if he would take that as a recommendation,

to think that through and possibly suggest it, if not write it into the

act or into the terms of reference or regulations of the act, so that

these new corporations — this new foundation — will in fact reflect the

values of British Columbians, as they try to promote economic growth

and development.

HON. S. HAGEN: I'd like to thank the hon.

member for that good comment. Without wanting to interfere with the

autonomy of the universities, I would be pleased to make that

recommendation to the universities. I don't have any difficulty with

what she said. I just don't want to restrict them to any large extent.

Sections 7 to 18 inclusive approved.

Title approved.

HON. S. HAGEN: Madam Chairman, I move the

committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 57, University Foundations Act, reported complete without

amendment, read a third time and passed.

HON. MR. STRACHAN: Second reading of Bill

53, Mr. Speaker.

BRITISH COLUMBIA ENTERPRISE

CORPORATION

FINANCIAL RESTRUCTURING ACT

HON. MR. COUVELIER: Mr. Speaker, the B.C.

Enterprise Corporation Financial Restructuring Act, Bill 53, provides

for two transactions which are prerequisites for the government's plans

for establishing the British Columbia Enterprise Corporation and for

placing it on a sound financial footing. These transactions, combined

with other transactions provided for by the amendments to the B.C.

Place Act contained in Miscellaneous Statutes Amendment Act (No. 3),

1987, Bill 55, will enable the government to restructure the finances

of the company so that it will not have to borrow funds to service its

debt.

The principal transaction contemplated under the amend ments

to the British Columbia Place Act is the conversion of an appropriate

amount of the company's government debt to equity, to be held by the

government. This conversion, which will relieve the company of a

substantial interest burden, is appropriate in view of the large land

holdings being held for development by the company. These land

holdings, while still substantial in value, cannot be relied upon over

the next few years to generate a steady stream of revenue for servicing

the existing debt of the company.

The first transaction under Bill 53 will effect the

consolidation of the British Columbia Development Corporation and

British Columbia Place Ltd. Into the British Columbia Enterprise

Corporation. This consolidation was announced by the Minister of

Economic Development (Hon. Mrs. McCarthy) on March 6 this year.

The second transaction under Bill 53 will enable the

government to assume some of the debt of the British Columbia Buildings

Corporation in consideration for the transfer of the share in the

British Columbia Enterprise Corporation from the British Columbia

Buildings Corporation to the government, provided for in Bill 55. Such

consideration is appropriate, given that the British Columbia Buildings

Corporation debt financed its equity investment in British Columbia

Place Ltd. Transfer of the share is required to enable the government

to assume direct responsibility for the British Columbia Enterprise

Corporation.

The provisions of Bill 53 have been separated from the

amendments to the British Columbia Place Act contained in

[ Page 2564 ]

Miscellaneous Statutes Amendment Act (No. 3), 1987, as the

transactions contemplated under Bill 53 are expected to be one-time

events. Therefore, the provisions providing for these transactions

should be of a temporary nature. They will cease to have effect on

December 31, 1987, and should not be enshrined within the more

permanent British Columbia Enterprise Corporation Act, which is to be

the new name for the amended British Columbia Place Act.

The transactions provided for by Bill 53 will be made

retroactive to March 31, 1987, to enable the Crown corporations

involved to begin the 1987-88 fiscal year with a clean slate. This will

enable the government to more readily monitor the financial performance

of these Crown corporations during 1987-88 and to utilize 1987-88 as a

base year for assessing their future performance.

To conclude, Mr. Speaker, I move second reading of Bill 53,

British Columbia Enterprise Corporation Financial Restructuring Act.

MR. STUPICH: Mr. Speaker, at least one can

say that the minister didn't say this was housekeeping. It's not

getting rid of any debt; it's transferring it from one entity to

another. It is transferring it from a couple of Crown corporations to

the Crown itself, so it's the public accounts of British Columbia that

will reflect the total increase in debt, and who knows how much more,

because we don't know the figures. We do not have the statements for

B.C. Development Corporation. We don't know what the figures are going

to be.

I don't know whether the minister can handle this in second

reading or whether it would be more appropriate to committee, but I

want to put some questions to him. I note in

section 2(

a) that all the

property and assets of the Development Corporation are going to be

transferred to this new British Columbia Enterprise Corporation.

A question.... I might say it disturbs me, but I don't know

whether it does or not yet, because I don't know what the answer is.

The value of all those properties and assets is not going to be book

value, or at least the possibility of them not being book value is

there. We don't know that they're going to be appraised. All we know

from

section 4(

a) of the bill is that the

Lieutenant-Governor-in-Council may, by order made before December 31,

1987, establish the value of property, assets and rights for the

purpose of this transfer to the Crown. So the assets could presumably

be inflated tremendously in value and wipe out the $87.4 million

deficit that BCDC had on March 31, 1986. We don't know what it will be

by March 31, 1987, but if the rate of increase in the deficit is

anywhere near what it was in the year ending March 31, 1986, we're

looking at a deficit in the neighbourhood of $200 million. We don't

know; we have nothing to go on other than the increase in the deficit

in the year ended March 31, 1986.

That could be wiped out, of course. The Crown could come out

looking real good if the assets were inflated to the tune of $200

million; at least it would break even. I wonder what the guidelines

will be that the Lieutenant-Governor-in-Council will use. Will they

employ appraisers to look at the properties? Will they have an analysis

done of the accounts receivable, the investments and the loans

outstanding? How will the cabinet arrive at a value of the property and

assets to be transferred?

Then in 2(l)(b): "all of the obligations and liabilities of

the development corporation...." Some of the obligations and

liabilities are real, but beyond that there are the guarantees. Will

they be looked at? Here again, we look at 4(

b) and we see that the

Lieutenant-Governor-in-Council will specify the indebtedness of the

Buildings Corporation. Presumably, we'll look at the guarantees and

arrive at a figure as to just how much the corporation owes at that

point in time.

Specify the indebtedness of the corporation for the purposes

of the section.... I'm sorry; I'm onto 3(

l) now; I didn't mean to do

that. Just back up a bit now. We're talking about the current

obligations and liabilities of the Development Corporation. When I say

"current," I don't mean March 31, 1986, which are the figures we have,

but those that will exist sometime in 1987. We're not even assured that

it will March 31, but sometime in 1987.

Then we look at

section 3: "Assumption of Other Liabilities".

The minister said that some of the debt of B.C. Buildings Corporation

will be transferred to this new corporation, British Columbia

Enterprise Corporation. The "some" is going to be defined by the

Lieutenant-Governor in-Council. In 4(b), the

Lieutenant-Governor-in-Council will specify the indebtedness of the

Buildings Corporation for the purposes of 3(l). How are they going to

arrive at the indebtedness? What do they intend to do, shift all of it?

Make an allowance for losses that may not be realized yet — that is,

contingencies in some of the investments made by the Buildings

Corporation? I just don't know how they're going to arrive at that, and

I'm not sure that the minister does at this point in time. Maybe this

time would be more useful during committee, but I wanted to alert him

to some of the things that I think we should look at.

Looking at

section 3(3) a little further, it's not just March

31, 1987. "On and after March 31, 1987, any part of the indebtedness

referred to in subsection (2), in respect of the period on and after

March 31, 1987...." When is this going to end? At what point in time do

we say: "Well, enough is enough; all of the indebtedness incurred to

that point is going to be transferred to the new corporation"? We just

don't know.

Again in

section 4(c), the cabinet is going to make the

determination. That information — the cabinet discussions — will not be

available to the House. We won't know what arguments are presented in

council. All we'll know is that cabinet has made a decision to make

certain transactions, based on what? Based on the political needs of

the day to make something look good or bad and to have the Crown absorb

the whole of the loss and even enough of the loss to make sure that the

new corporation gets a good start? We just don't know. There are a lot

of questions about this.

At the present time, unless the minister is very persuasive

when he winds up second reading, I expect the opposition will be voting

against this bill on second reading.

[3:30]

MR. WILLIAMS: I think that the points

raised by the member for Nanaimo are significant. We look at the amount

of debt you're shuffling off to the general public and the taxpayer

here. You admit to some $396 million in this exercise, although it

isn't limited. There is $205 million through the Buildings Corporation,

and then that's not limited. So we're talking about shovelling off the

back of the truck a debt load unprecedented in the modern history of

the province, and with no clear end at any regard.

[ Page 2565 ]

But the point made by the member for Nanaimo about the land

assets is especially significant. I am sure that the minister

understands the significance of it in countless ways. These valuable

lands were transferred, many of them, for a dollar. Let's think about

that. Wasn't all of Songhees transferred for one dollar? Just imagine

walking out of this building and standing on the steps and almost for

as far as you can see on the other side of this Inner Harbour — from

the Johnson Street Bridge up to the Bay bridge, up the Gorge, around

the comer and out to Esquimalt — that incredible, magnificent

waterfront transferred for one dollar. What's it going to be on the

books, Mr. Minister? One dollar. What do you think that waterfront is

worth, in terms of dollars per front foot on the harbour — $100,000 a

foot? That might not be out of line. Maybe it's $50,000 a foot on the

waterfront. Maybe the minister has some numbers there.

That's just one piece of real estate transferred here. We've

talked about debt burial and shovelling debt off the back of a truck

onto the backs of the taxpayers on a scale unprecedented in the modem

history of the province. You've owned up to the $601 million, but you

already wrote off $54 million in the B.C. Development Corporation, as

the auditor-general reports. You've thrown in interest payments to B.C.

Buildings Corporation for good measure, and that ups the ante again.

But this lump that's buried in these land transactions may be even more

significant in terms of debt burial.

So that's a dollar. Now, what about the other pieces of land

that are being played with here? All of the land above Riverview, that

huge area when you go over the Port Mann Bridge — you look at the

Riverview area and you see the development above it. All of those

remaining lands from Riverview were transferred into this corporation

too, and if my memory serves me right, that too was for a dollar. But

that's not just Riverview alone. That's the stuff that Andre Molnar is

developing now. We read the ads in our newspapers every weekend in

terms of those lots being sold and fancy houses on them. We're talking

hundreds — nay thousands — of acres in the suburbs of greater

Vancouver. That's part of your debt burial scheme as well. Not only

Riverview: the Westwood Plateau. That is thousands of acres — all the

lands behind the Coquitlam shopping centre. And what was that

transferred for? Was that not for a dollar as well? So we're talking

about a monumental cleanup here.

You've got the $396 million that you admit to, the $205

million that you admit to, and then there are hundreds of millions in

land values as well that are wallpapering over this scheme and hiding

other losses, other problems within these corporations. It's absolutely

extraordinary what you're trying to cover here. As the member for

Nanaimo says, there are the guarantees of the B.C. Development

Corporation that you're dealing with here as well. There is $1.6

billion out in guarantees of the Development Corporation: how are we

satisfied about the security and the quality of the loans under those

guarantees? Where do we stand? Are you saying they're 100 percent good?

Your track record in the Development Corporation is abysmal. In the

last reported year, the loss of B.C. Development Corporation, which

that minister there is responsible for, was $87 million, and about $60

million the year before. You still haven't delivered to this chamber

the annual report of the Development Corporation for the last fiscal

year, even though that ended at the end of March.

The other liabilities: my God, you've still got the

dismantling of Expo in this garbage bag of debt. The dismantling of

Expo is a new cost. The stuff has been sitting there; the interest

clock is continually ticking with respect to all of this stuff. So the

demobilizing of Expo is still to be dealt with, because that shunted

into B.C. Place after Expo. You still see those rides when you go over

the Georgia Viaduct. Whatever they call those rides that you see from

the viaduct, they're still not demobilized, still not broken up, still

not sold. Another hare-brained scheme of the minister's — not this

minister, but the other one that spends so lavishly — is to dump all of

those playthings, for some ridiculous low price per acre, into a public

park in North Surrey at tonehead, with some play land outfit from the

United States of America.

This is covering screwball deal after screwball deal, and it's

to accommodate new screwball deals. As the member for Nanaimo says:

"Where will it end?" What about the Development Corporation's loans,

Mr. Minister? What kind of allowances have you got in terms of bad

loans still within the B.C. Development Corporation? What have you set

aside so far for major bad loans within BCDC? We look at these crackpot

schemes you people consider again and again, and can't help but think

about the gasohol one coming down the pipe.

AN HON. MEMBER: That's not theirs.

MR. WILLIAMS: They shunted it off to

Agriculture, because even these guys knew it was too screwball to

accommodate within the Development Corporation, which is already in a

river of red ink. Mr. Minister of Finance, what are the provisions for

loan losses within the Development Corporation currently with respect

to loans under $1 million? Mr. Minister of Finance, what are the

provisions for loan losses currently within the Development Corporation

for loans over $1 million? What percentage of your portfolio is in a

bad-loan category? What percentage of your portfolio is in a watch-list

in terms of being wobbly loans, in terms of the likelihood of payment

being narrow?

All of these are reasonable questions, Mr. Speaker. Yet here

we are, entertaining this financial restructuring act, this statute

that's before us now from the Minister of Finance. It's an abysmal

track record — unequalled, I think, in this part of the world, in modem

years. There's no indication that it's going to end. There's absolutely

no indication whatsoever that the profligate spending tendencies of the

minister responsible for this corporation will ever cease until there's

another provincial election. There's no indication that the minister is

going to be shuffled off, as should clearly be the case. There's no

indication that she's being harnessed in in any regard in her spending

habits.

There has been profligate spending under this minister in this

ministry, unequalled in this province. It is no small wonder that we

have to do some debt restructuring around these corporations that she's

responsible for. She is the most profligate spender in the modem

history of British Columbia, and much of that spending is with no

return. It's all too clear. We have not been provided with adequate

material at all, in terms of the nature of the problems you face. It is

an open-ended situation in terms of accommodating the debt here. It may

well not be just the $396 million that you talk about here, and the

$205 million that you talk about here, that you're shovelling off

onto the backs of the taxpayers.

There are untold millions in terms of the land deals that are

accommodating the underlying waste within these corporations. At

Songhees, as I've said; at Riverview, as I've said; at Westwood, as

I've said, we have incredibly valuable land

[ Page 2566 ]

assets handled in a questionable way, in every respect. That

is another cover for the debt and the waste being handled by this

minister. To come before this House and ask for approval of this kind

of bill at this stage, and with this limited reporting, requires that

the opposition say no. We want an end to the profligate spending of the

Minister of Economic Development (Hon. Mrs. McCarthy).

MR. SPEAKER: The first member for Victoria

seeks leave to make an introduction.

Leave granted.

MR. G. HANSON: With us on the floor is

Judyth Watson, a Member of the Legislative Assembly for Western

Australia. She's a Labour MLA for the riding of Canning, and her home

is in Perth. I'd like you to join me in making her welcome here.

MS. MARZARI: In rising to speak to this

bill, one has to look back over a number of months of announcements

that have been made regarding B.C. Place and its folding into BCEC. We

knew then that BCDC's debts would also be folded into the new

Enterprise Corporation. We were barely able to digest that when we were

looking at a deficit of $400 million at that point. The opposition has

tried very hard, I think, using various techniques, to find out what

that debt structure looked like.

[3:45]

There's basically nothing wrong with consolidating debt to pay

it off, but we are a public body, and when that debt is consolidated, I

think it's incumbent upon us and upon the government to disclose what

that debt looks like. When we know about BCDC being folded into the

Enterprise Corporation, it's very important, before this move is

formally ratified, that the debt be looked at, that it be accounted

for, that the Public Accounts Committee perhaps be asked to look at it.

It's something that the Public Accounts Committee, the deputy Chair and

I have talked about doing. It has not yet come before the Public

Accounts Committee, but I would suggest that it might be a good idea

for this government to ask the committee to look at the BCDC debt.

But that's only one component of the new bill now before us.

The new bill adds $205 million. When I read that I realized, as we now

add the B.C. Pavilion Corporation, that we are layering on yet another

level, another public body to absorb yet more debt and to run two

additional public corporations, the convention centre and the pavilion.

In looking at this additional $205 million, which I believe

was addressed last night, I feel I should read into the record the BCDC

annual report of 1983, which states:

"In September 1982 the BCBC made a $205

million equity investment in B.C. Place Ltd. and holds the only

outstanding share. The investment is long-term and is expected to

return excellent future dividends. Our investment is already fully

covered by the significant increase in land values over costs realized

since acquisition. To assist BCBC in this venture...the interest

costs until such time as the cash flow from the investment exceeds our

interest payments on related borrowings."

Well, we all know the sad tale of the operating deficits on

B.C. Place: $162, 000 in 1984, $3.889 million in '85, and almost $4.6

million in'86. This was no investment. This was debt from the very

beginning. The government must have known this, but only now, as I see

it being folded into the overall package now called BCEC, can we even

begin to understand the full nature of this debt that needs to be made

up for or written off.

I would say, Mr. Speaker, that the time has really come for

reckoning, and that before this bill is put forward.... As I say,

there's nothing wrong with consolidating debt, but there is something

very wrong with not reporting on that debt and ensuring that there is

public accounting for that debt.

The other question, of course, which comes to mind and which

cannot be overlooked is the timing. The consolidation of this debt

before March 31 or April 1 of this year, no matter when transactions

are conducted, no matter when the land is sold off, is beyond

understanding. The so-called clean sweep seems to neglect basic

principles of accounting and public accounting.

There is a way of consolidating debt. There is a way of doing

it with some integrity. There is a way of producing reports and of

laying it on the table that people can understand, that the opposition

can look at. By doing it in this way and by choosing the timing that

you've chosen, this government lays itself open to accusation, to

suspicion. Your integrity is questionable by doing it this way. There

must be a way of coming around it.

I would suggest — this is just one small step — that certain

of the transactions, certainly the loan portfolio of BCDC, could be

sent to the Public Accounts Committee. That would be one small step. As

for the rest of it, I would suggest that we need an inquiry before a

bill of this nature goes through and before we get on with the business

of packaging and selling those lands, so that we have a complete

accounting.

MR. SPEAKER: Pursuant to standing orders, I

advise the House that the minister closes debate.

HON. MR. COUVELIER: There were so many

points made there that there was no way I could capture them all, but

I'll try to address the few that I did catch.

First of all, the opening speaker dealt with accounting

policies. I think it's clear that the House should understand that the

accounting policies that were implemented here in the determination of

the transfer of assets were in an effort to simplify the relationships,

not complicate them.

The major accounting policies followed were.... First of all,

land and projects are recorded at the lesser of current market value or

cost. Loans are recorded at principal outstanding, less provision for

losses. Public facilities are recorded at cost, and trust funds are the

loans administered on behalf of the government, for which BCDC is fully

indemnified.

We can get into further detail during committee stage, and I

am happy to do that. Some of the comments I heard implied that Songhees

lands were being transferred. They're not. There is no suggestion that

Songhees lands are being transferred.

There was reference to Expo. There will be a statement on the

Expo dismantling in short order, in a reasonable period of time in the

near future. I can tell the House that there is no embarrassment

associated with that exercise. It will be a good-news story. Dealing

with the rides on Expo, we have offers on the rides, and there are

three proposed locations. So

[ Page 2567 ]

we are not without remedies in terms of that portion of the

dismantling.

There is constant reference to a sum of $396 million and, by

virtue of the loose phrasing used, listeners might wonder whether we're

talking here about a write-off of bad debts or something. The fact of

the matter is that the proposal deals with the necessary write-down and

simplification of some of these relationships, and $396 million is

being converted to equity. It is believed, using the properly accepted

accounting principles I introduced a minute ago, that those sums that

we have worked out are defensible, and we're very happy to deal with

that.

I think it's important to understand the government's motive

with these two pieces of legislation. The objective is to clarify the

accounting records of past years, made in different times by different

players. I heard some suggestion that this is a coverup. Of all the

absurdities! The reverse is true. We are here dealing with the subject

so that the records can be set straight, so that there can be a public

debate in this room on these matters.

Furthermore, I heard some suggestion.... There was a query

from one of the speakers, wondering about the write-off provision for

bad debts. In the interest of full disclosure, we did provide the

questioner with that very same material today.

AN HON. MEMBER: Yesterday.

HON. MR. COUVELIER: No, he was given

further material this morning, and if he cared to read the material we

provided him, he would note that on the bottom of the page there is a

write-off provision for bad debts. It would have answered the very

question he put to me. Anyone observing this absurdity would wonder

what it is that we are trying to cover up. We are covering nothing up.

We are bringing it all before the House for clarification, and there

will be full and ample opportunity to get into some of these details

during the committee stage.

I am happy, therefore, to move the question.

[4:00]

Motion approved on the following division:

YEAS — 34

Rogers

L. Hanson

Reid

Dueck

Michael

Parker

Pelton

Loenen

Crandall

De Jong

Rabbitt

Dirks

Mercier

Veitch

McCarthy

S. Hagen

Strachan

Vander Zalm

Couvelier

Davis

Johnston

R. Fraser

Weisgerber

Jansen

Hewitt

Gran

Chalmers

Ree

Serwa

Vant

Long

Messmer

Jacobsen

S.D. Smith

NAYS — 16

G. Hanson

Marzari

Rose

Harcourt

Stupich

Skelly

Boone

D'Arcy

Gabelmann

Blencoe

Cashore

Smallwood

Lovick

Williams

Miller

Edwards

Bill 53, British Columbia Enterprise Corporation Financial

Restructuring Act, read a second time and referred to a Committee of

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

after today.

Ministerial Statement

SKYTRAIN BRIDGE CONSTRUCTION

HON. MRS. JOHNSTON: Mr. Speaker, I rise to

make a ministerial statement.

Earlier this afternoon, during question period, the member for

Surrey-Guildford-Whalley (Ms. Smallwood) made statements to the effect

that would support allegations regarding serious structural problems

were evident at the SkyTrain bridge. I would like to read the report

sent over to me.

"The allegations are untrue. What is

happening is that construction crews working on the north tower are

removing the sheet-steel panels used in the water — the form mould for

the tower. Divers, as they normally do, are assisting and helping to

dismantle the water frame. A short distance away on the north shore, a

crew is driving preliminary piles where the cable anchor tower will

shortly be built.

"Work on the SkyTrain bridge is as

normal: on time and on budget."

MS. SMALLWOOD: Mr. Speaker, I'd like to

first thank the minister for the information, and I'll be pleased to

relay it to the numbers of people who have been phoning over the last

few months about the specific concerns that I raised with her

previously.

I want to take exception, however, to the comments the

minister made about allegations. I'm afraid the minister doesn't

understand the process of question period — that the questions were put

to the minister to clarify some of the concerns expressed to me.

The minister provides information. We are pleased that the

project is on time and that there are no significant problems.

HON. MR. STRACHAN: Committee on Bill 55,

Mr. Speaker.

MISCELLANEOUS STATUTES

AMENDMENT ACT (No. 3), 1987

The House in committee on Bill 55; Mrs. Gran in the chair.

section 1.

MR. WILLIAMS: Madam Chairman, I just wonder

what flight of fancy, what wild moment of imagination, resulted in the

renaming of the Titanic the B.C. Enterprise Corporation.

We've had a session in which we've never seen the Minister of

Economic Development — she's so busy out wheeling and dealing. Last

night she was too busy eating cake to even deal with the matters before

the House. Maybe she can advise us: did she hire a marketing

corporation to find a nice new name for the Titanic?

HON. MRS. McCARTHY: No.

MR. WILLIAMS: Madam Chairman, you mean she

did it all on her own? Is that the situation — the name of the

[ Page 2568 ]

Enterprise Corporation was developed by the minister herself?

HON. MRS. McCARTHY: Madam Chairman, the

member has asked whether the name was requested by me. It was a

decision made by the board of directors of the two corporations and

accepted by the two corporations, which will now come under the name of

B.C. Enterprise Corporation.

I know the name "Enterprise" raises the colour in the face of

the first member for Vancouver East.

Sections 1 and 2 approved.

section 3.

MR. WILLIAMS: This is the shares of the

company, Madam Chairman, and the shares of the company deal with backup

— all of these assets, presumably. It's in this area of assets of the

corporation that one is intrigued. One would ask, with respect to the

land values of this corporation: what numbers are there in terms of the

assets behind these shares?

HON. MRS. McCARTHY: The audited values,

Madam Chairman.

MR. WILLIAMS: Could the minister then

advise the House, Madam Chairman, what those audited values are? For

example, what are the audited values of the Songhees lands in the Inner

Harbour of Victoria?

HON. MRS. McCARTHY: Madam Chairman, I

wonder if the member would just phrase that once more. I'm afraid I've

not quite caught whether he's asking about a specific. piece of land or

the total amount of land.

MR. STUPICH: Madam Chairman, before he

does, I think we're on

section 4 rather than 3. I believe

section 3 has

passed and we should be on

section 4.

MADAM CHAIRMAN: We're on

section 3, hon.

member.

MR. STUPICH: I think not, Madam Chairman.

Section 4 starts at the bottom of the page; it's just the very

beginning of it. The material we're into right now — and there's a lot

more.... It says

section 3 at the top of page 2, but that's

section 3

of the original act. We're talking about

section

Section 3 approved.

section 4.

MR. WILLIAMS: Madam Chairman, we would

appreciate it if the minister would provide us with both those areas

she just referred to, i.e., the value established by audit for all of

the lands — in saying "all of the lands," I mean the major components —

but specifically, in terms of those major components, Songhees, the

False Creek lands, the Riverview lands, the Westwood lands, and

Whistler as well.

HON. MRS. McCARTHY: That is fully explained

in the recent Public Accounts, and the amount is $131.313 million in

total.

MR. WILLIAMS: The minister also asked

regarding the specific elements. Yes, we indicated we were concerned

about the specific elements. What then is the value that you have in

terms of audit for the Songhees lands?

HON. MR. COUVELIER: I might be able to

assist here, insofar as it was primarily my staff members who were

involved with the numbers we're describing here. The Songhees

valuation, after these adjustments are made, will be $3.411 million.

MR. WILLIAMS: I hope we can get the

additional information as well regarding the other lands, if we might.

HON. MR. COUVELIER: I'm happy to advise

you. The total valuations for the properties, after the write-down

exercise, are: False Creek, $96.872 million; Songhees, $3.411 million;

Westwood properties, $1.969 million; Whistler properties, which I might

add are still under review — they might, as a consequence of

discussions with the community up there, require further adjustment —

but at the moment we project $9.513 million; for a total of $111.765

million.

MR. WILLIAMS: The audit, then, accepts

these numbers. So we're talking about $3.4 million for the Songhees

lands. That's not very much money for the lands over there on this

magnificent Inner Harbour. We're talking about virtually everything

from the Rainbow Park site in Vic West around to the Johnson Street

Bridge, and then continuing up to the Bay Street Bridge and the lands

behind. With a few alienations, it's the original Indian reserve in

Victoria West. It is a huge piece of land, and you're attributing to it

a value of $3.4 million.

The Minister of Finance seems keen to respond, so maybe he

could elaborate some more.

HON. MR. COUVELIER: That figure is the cost

of the land acquisition, which as I said obliges the accounting

principles that we agreed upon when we embarked on this exercise.

MR. WILLIAMS: I think this confirms the

business of more debt burial. There is no way in the world that any

appraiser would put that kind of ridiculous low value on the Songhees

lands. That would never happen. You've also got a staff in the

Assessment Authority that reviews these questions constantly.

[4:15]

As part of completing acquisition of all lands in the Songhees

area, two and a half acres that isn't even waterfront were acquired by

the Crown to consolidate the lands. That 2.3 acres, I think it is — not

waterfront, but rock backland — was bought by the Crown. It was only a

couple of acres, out of what? A hundred in Songhees, or something like

that. A clearly modest part of Songhees was bought by the Crown in the

last few years from Mr. Hartwig, a prominent supporter of the

government. Does the government have the figures for the acquisition of

a small part of the Songhees lands? What was paid for that two acres?

HON. MRS. McCARTHY: I think that this is

not related whatsoever to the

section we are debating. However, I think

the point was made in another debate just earlier. The Minister of

Finance made the point that the whole restructuring of

[ Page 2569 ]

these companies was done in a way in which there would be, by

the sale of the lands, a return to the people of British Columbia. It

should be noted that in a recent announcement on that very land that

the member for Vancouver East is discussing, there was a sale of over

$5 million.

I don't know the piece of property to which you are referring

by the name of Hartwig, because I don't know that transaction, nor do I

know the gentleman. That was certainly before my time, so I have no

idea as to what the finances are in that; perhaps the Minister of

Finance would know. But again, that was before this Minister of

Economic Development was involved.

MR. WILLIAMS: I am aware of the actual sale

figure, Madam Chairman. It was $1.1 million for a couple of acres. It

wasn't waterfront land at all; it was backland — you know the rock that

you see as you come off the Johnson Street; Bridge back of the

waterfront. Yet you've got an evaluation down here of $3.4 million, and

as the minister says, there is a sale underway which we've not had the

details of to date. She says it's in the $5 million range — for some of

the waterfrontage, I presume.

HON. MRS. McCARTHY: It seems that the

member is only giving substance to what the two acts are doing; that

is, getting a return for the people of British Columbia on the land. He

is arguing book value as opposed to assessed value, and you can't

compare oranges and apples.

MR. WILLIAMS: I think it's very clear

what's happening. I think it's very, very clear; I think the minister

knows it's very, very clear. You're putting down unreal numbers in

terms of the value of these lands so that you can look good, so that it

can accommodate any kind of perceived problems within these

corporations. Because if a couple of acres of Songhees in a free-market

transfer are worth over a million dollars, and it's backland, and you

say that all of the Songhees lands are worth only $3.4 million, well,

that's certainly a natural setup to try to make you look as if you're

really very able in marketing land, and as if you've made these huge

profits, when in fact the real numbers are very different.

Those lands are extremely valuable, but you're not recognizing

that in these numbers. So that's going to again accommodate the kind of

waste that's been going on within these corporations that are now being

amalgamated. It's a way of dealing with previous profligacy, waste and

bad judgment within these corporations that you're now parenting in the

name of the Enterprise Corporation.

The Songhees reserve lands are clearly worth huge amounts of

money, and I suggest that you have these other lands down.... The

Westwood Plateau is at $1.9 million. If my memory serves me right,

we're talking about something like 1,000 or 1,500 acres in the Westwood

Plateau — a whole new city back of Coquitlam Centre — and you're

telling us that it's worth $1.969 million. It isn't worth $1.969

million; it's worth a king's ransom, and you've put it down here with

this kind of number. You're talking about creating a clean slate, and

that's not the circumstance at all. You're putting a slate together

here that has no relationship to reality, in terms of what those values

are.

We've talked about the debt-restructuring thing; the land side

is another major side. So you have these huge suburban lands at

Westwood, the land at Riverview, the land in False Creek, the land in

Songhees, and you've put them down with very modest values. I assume

that these numbers include some of the private acquisitions and then

the dollar for the free Crown grant. Is that how you came up with these

numbers?

HON. MR. COUVELIER: The hon. member can't

have it both ways. He cannot criticize us for using conservative

accounting principles — that is to say, valuing the land at the lesser

of cost or market — then at the same time attack us for correcting

price valuations made at different times by previous governments who

did use that kind of market approach. What we're trying to do is ensure

that the accounting dealing with these assets is done in a properly

recognized fashion, a fashion that is approved by every accounting

house of any stature in Canada, and one that we endorse.

Dealing with the Songhees land itself, the member should

appreciate that all of the Songhees land is not serviced. There will be

a servicing cost, and that cost will be sizeable. Until that servicing

occurs, the valuations of the other parcels will be somewhat less. As

the member knows, raw land is far less valuable.

So you can't read anything into a $5 million sale of

waterfront land and extrapolate that over the balance of the lands. The

balance of the lands are not serviced. As the member just pointed out,

it is rock; so servicing will be an expensive item. It is appropriate

to value these lands at cost. If, in the fullness of time, the

government is able to service them and still make a profit, should we

not applaud? Surely the purpose of the game is to get ourselves on a

basis that can be judged and where performance can be rated. Until we

get to that stage, I submit to the hon. member that he is going to be

faced with continuing to make the weak arguments he's making today. I'd

like him to be on a little firmer ground a year or two from now, when

he comes back to judge the performance of this government in settling

these matters.

MR. STUPICH: I look forward to that time as

well. I notice two ministers popping up to answer the questions. I

think my questions would be more appropriate to the Minister of

Finance, but I'll leave it to them.

I'm looking particularly at

section 3 of the original act,

which is

section 4 of this one. Near the top of page 2 and under

3(2)(a): "...purchase or otherwise acquire shares, notes, bonds,

debentures or other securities of the company or of B.C. Pavilion

Corporation...." The Minister of Finance will have the authority to do

any of those things in any amount without coming back to the

Legislature, subject only to the approval of the cabinet. That's the

way I read it. It can buy any number of shares; it can loan absolutely

any amount of money by way of note or buying bonds or debentures or any

other security that the minister chooses to use. There is no limit on

the amount that the B.C. Enterprise Corporation or the B.C. Pavilion

Corporation may get from the government, other than the good nature of

the Minister of Finance. Am I reading this correctly?

HON. MR. COUVELIER:

Section 5.1 has the

effect of limiting the indebtedness. In any event, as a consequence of

this restructuring, I can tell the hon. member that the government does

not anticipate having to make further borrowings as a requirement for

keeping these companies whole. It is anticipated that this

restructuring will enable a transfer and a sale of assets in the

marketplace that will be orderly and,

[ Page 2570 ]

given the rising market situation we're faced with, will not

require a drain on government expenditures.

MR. STUPICH: It's not very long since the

Minister of Finance stood in this House and said that he would never

borrow to pay for groceries. What the minister anticipates today may

not hold true two or three years from now.

When the minister said

section 5.1 limits the amount of

indebtedness, he's looking at

section 7, which refers to 5.1 of the

old act, where it says that the amount shall not exceed a prescribed

amount. Is that a limitation? Who can tell me what "prescribed amount"

means today, next year and five years later?

HON. MRS. McCARTHY: We're not on

section 5,

but it refers to borrowings. I think you're not referring to borrowings

in this

section we are now on.

MR. STUPICH: The minister is quite correct.

I was sidetracked by the Minister of Finance referring to that section.

In answer to what I said about 3(2)(a), he said that it's

limited by another

section we're coming to later. Looking at 3(2)(b),

the Minister of Finance, again with the concurrence of the

Lieutenant-Governor-in-Council,"may...convert any government held

shares," etc., and then under (ii) convert any "indebtedness owed by

the company or B.C Pavilion Corporation to the government into other

shares...." So any amount that the B.C. Development Corporation or the

B.C. Enterprise Corporation may borrow from the government — any amount

at all, subject to a

section we're coming to later — the government at

any time may write off and say, "We're not going to call it a debt any

longer; we're going to call it an investment in shares," as opposed to

a loan of some form. That's the way I read it. Am I correct in that?

Madam Chairman, the minister indicated to me.... Oh, I'm sorry.

HON. MR. COUVELIER: I guess Hansard doesn't

record nods. The answer is yes.

MR. STUPICH: Madam Chairman, I'm going to

read briefly from a rather long editorial that appeared in the Vancouver

Sun .

"The provincial government is asking more

than the Legislature should give.... The bills before the Legislature

concerning B.C. Place...are disturbingly vague — too vague. These

bills as now written amount to a blank cheque from the people of B.C.

They give the government extraordinary powers.

"Our first concern.... Is for the

citizens and taxpayers of B.C. who are being asked to give the

government this blank cheque.

"The government will never have to come

back to the Legislature for any money to deal with B.C. Enterprise

Corporation or B.C. Pavilion Corporation. Now they say they're going to

make it in the marketplace. Their record is not all that good; but

whatever — if they ever want any more money from the taxpayers of the

province, they'd never have to come back to the Legislature.

"The government would be able to pay off,

without further reference to the Legislature, any debts incurred for

these projects, in any amount, from general revenue, under powers

specifically granted in the bills.

"'Extraordinary' — the word we used at

the outset to describe these bills — is perhaps an understatement of

the seriousness of the powers being sought by the government to enforce

its will on the people of the province.... The Legislature should not

pass these bills."

Madam Chair, that editorial was not written yesterday. It's

dated July 30, 1980, and here we're doing it again. We're giving the

minister and the cabinet.... You know, for this kind of authority, even

for B.C. Hydro, the government used to have to come back to the

Legislature every year when it wanted to increase borrowing for B.C.

Hydro, and there was some handle on it. We knew what B.C. Hydro was

doing, because there was that legislative authority to say no to B.C.

Hydro, had we chosen. We didn't. We always passed the bills that the

government introduced, whether we were in government or whether the

Socreds were in government. But at least there was that accountability.

[4:30]

There is no public accountability as far as B.C. Enterprise

Corporation is concerned. They're not responsible to the Legislature.

They never report to the Legislature. They never report to the

auditor-general. The auditor-general can't look at them. The

auditor-general would like to at least review his right to look at

them, but that apparently has not been agreed to yet. No

accountability; they never have to come back; a blank cheque for

anything that B.C. Enterprise Corporation or B.C. Pavilion Corporation

wants to spend at any time; and we're being asked in this

section to

say: "That's okay with us. We don't care how much you spend. We don't

care what you do with it. We don't care whether you ever tell us about

it. But go ahead and do it and have fun while we do something else."

Madam Chair, we can't allow this

section to pass without

opposing it the best way we are able to.

HON. MR. COUVELIER: B.C. Place's auditor

will be the auditor-general, Madam Chairman.

MR. STUPICH: Madam Chair, B.C. Place —

there's no such place any more; it's going to be something else. The

minister is telling us that. Well, we have to take his word that it

will be the auditor-general, but that hasn't happened yet and the

minister may change his mind by tomorrow. There's nothing here to

assure us of that. I would prefer that it were, but I have no knowledge

at this point in time that it will be other than the minister telling

us what's going to happen sometime in the future. But whatever, we're

still giving the government a blank cheque in this. Why not put a limit

on it? I appreciate that in another

section we might argue the point of

the limit more forcefully, but certainly in this one it's absolutely

limitless, subject to another section.

MS. MARZARI: What I'd like to ask pursuant

section 4, called 3 on page 2, is for clarification of the process

being used here for the B.C. Pavilion Corporation. As I read it, and

how I see these transfers operating, the government is intending to

transfer the 80-year lease on the trade and convention centre, and the

title to the stadium and the related assets of those facilities, to the

Pavilion Corporation. Then you're going to transfer the shares to the

Minister of Economic

[ Page 2571 ]

Development, and those facilities are going to operate

separately from BCEC, and report directly to the minister. Am I correct?

My question is this: why do you take two operating entities

and run them through the process this way? Why do you want to confuse

the loans and lands with operating entities? Why not create the

Pavilion Corporation, which makes some sense, and keep it separate and

distinct from the beginning? Wouldn't the accounting be a lot clearer?

It seems to me that we're creating a step here that does things that I

must admit I can't really get my hands around.

Further questions — I should just go through them. What are

the related assets of the stadium and the convention centre? Is there

any balance sheet to show the value of these assets?

HON. MR. COUVELIER: Madam Chairman, the

B.C. Pavilion Corporation already existed, so we had a corporate shell.

We did the logical thing, I submit: that is to say, transfer the

operating assets, the assets that have to go out on the marketplace and

sell themselves and have a daily profit-and-loss kind of operation. We

did consolidate those in the new structure of B.C. Pavilion Corporation.

In answer to the question as to what the assets will consist

of, they will consist of $157.1 million for the stadium, which is the

cost, and $300,000, which represents the value of the lease on the

convention centre. These are the two entities that, as I said, have a

daily operating requirement. As such, it was deemed appropriate that

they should be spun off in a corporation of their own where their

performance can be judged, and where the staff can be properly charged

with a mandate to keep the facilities full, occupied and profitable,

all that kind of thing.

So the balance sheet will consist of those two assets. The

other side of the balance sheet will show an equity for the total of

$157.4 million. It's a very simple balance sheet.

MS. MARZARI: From this point forward, will

the operating deficits of those facilities show up on the B.C. Pavilion

Corporation's balance sheet, rather than on the BCEC's? I can see

taking the value of B.C. Place as a stadium and its original value some

years ago when it was built, and putting it as a capital asset on the

new B.C. Pavilion balance sheet, but the buildup of debt there has been

substantial. Are you saying that the operating debt from this point

forward is going to be on the Pavilion Corporation's balance sheet,

rather then back there with the old stuff?

HON. MR. COUVELIER: Madam Chairman, there's

no debt accumulated here. What the balance sheet shows is equity. In

other words, they have two assets and they have an equity, which is the

ownership's interest in the assets. As to future operating expenses, I

do believe — the Minister of Economic Development may wish to expand —

that the operations of the convention centre and the stadium will be,

and are now, the subject of some discussion with people in the greater

Vancouver community. So that may yet remain unaddressed.

In any event, there is certainly no harm.... As a matter of

fact, I think it's entirely preferable that these assets should be spun

off so that their performance can be judged. The very objective that

I've heard from the opposition benches is obliged here. I see nothing

for you to criticize. It is a straightforward accounting transaction

where the books will be clean. Isn't it preferable that you start off

this fresh-start government with clean books so that you can have some

facts to deal with next time we meet on this subject? It's a public

corporation. The facts will be made available.

HON. MRS. McCARTHY: Madam Chairman, in

answer to the member for Point Grey, I think she would want to know

that there is a community board of directors in the Pavilion

Corporation, and they will be responsible and report to the minister.

MR. WILLIAMS: I think it's necessary to

reinforce the comments made by the member for Nanaimo. What we have

here is a blank cheque again. There was a reference in 1980 to the

blank cheque that was delivered for B.C. Place. We are now going

through the miserable process, again, of offloading this huge mountain

of debt. We've used up the truck to throw off the debt onto the backs

of the taxpayer, and now it's a new truck and a new debt that can be

handled here. You can call it what you like. You can buy shares and

that whole fiction, in terms of additional shares in the name of giving

you money or getting rid of new debt. But that's what the exercise can

be.

We have here a minister who has shown profligate spending

ways. None of her colleagues in the government benches and none of her

colleagues in cabinet would attempt to spend in the profligate manner

that this minister does. None of her colleagues have her royal spending

habits. None of them entertain in the grand manner that the member from

Shaughnessy does — at public expense, all too often.

This

section is asking for blank cheque number two for that

minister. We won't buy that one. We won't buy a blank cheque for this

minister. She has shown what she does with the money. We won't buy

another blank cheque. I think the people on the government back benches

should reflect on that. Have you been happy with the recent weeks and

months of the spending of this minister? Have you all been happy with

the spending that has gone on with the million-dollar party last week

and all of the other stuff`? This is your opportunity to show where you

stand on profligate spending. This is an opportunity for everybody in

this House to say we won't go along with this nonsense any longer. The

public purse is not open; it's not bottomless. We want some real

economic development in British Columbia. We don't want any more of

this razzle-dazzle stuff. That's what we mainly get for our money out

of this Minister of Economic Development. We say no, no, no. No more

wasteful spending by this minister.

HON. MRS. McCARTHY: When I took on the

responsibilities for B.C. Place and BCDC, it was very clear that there

were several responsibilities that were duplicated. What we have here

today is the sorting out of a very confused state of affairs in terms

of financial management and responsibility. This government — with a

new minister in charge of those responsibilities, and with a new

Finance minister responsible — has divided off those responsibilities

in their proper areas.

Heretofore, if the member who has just taken his place were to

ask for an accountability on the stadium, he would have found it all

mixed up with land development on B.C. Place and 12,500 acres all

throughout the province. We've taken on a new responsibility. We've put

the stadium under the Pavilion Corporation, and as the Minister of

Finance has

[ Page 2572 ]

clearly stated, you'll be able to know and see the

accountability of the stadium and its operations in the future under

the Pavilion Corporation's responsibility and its board of directors

responsible to this minister and to this House. In addition, there is a

trade and convention centre that has been added to those

responsibilities — again, in the same manner. Those responsibilities

will be well reported to the Pavilion Corporation, operated by the

Pavilion Corporation, not mixed up with land development, not mixed up

with sales of land, but divided off in its proper context. I think

that's just good business judgment.

Although it has nothing to do with the

section we're

discussing, I also think, including the reflections I have and the mail

I've been getting in the last couple of days, that the $300,000

expenditure by the board of directors on the opening of a building

worth $160 million was a very good investment in marketing. Although

the member who has just taken his seat wishes to call that profligate

spending, we would call it on this side of the House.... I can tell you

that, from what I have heard from the community, including the

community which hires more people in this nation, let alone in this

province — the hospitality and tourist community — it's probably the

best investment made in marketing for a very great return.

MR. WILLIAMS: That's all very interesting,

but the minister doesn't deal with the question of the blank cheque.

She wants it; she wants it bad. She wants a blank cheque — no two ways

about that. That's the way she operates. It's the rest of you who

should be harnessing her in and saying: "No, we will not give this

minister a blank cheque." Pure and simple — enough, enough, enough.

There's no question the minister travels in elite circles, and

I am sure those people who whisper in your ears say that everything's

rosy in the garden, but that's....

Interjection.

MR. WILLIAMS: She says, all of a sudden,

that it's okay for her to discuss these things, but not the opposition.

This minister is a venerable member of this government, as our House

Leader has indicated in the past. This minister was involved through

the whole evolution of B.C. Place. This minister was part of the

cabinet throughout the piece in terms of this mixed-up mess she's

talking about. Land development was mixed up with seats in B.C. Place

Stadium; development problems were mixed up with a convention centre.

It's as if we have some new saviour on our hands, all dressed in white,

who's going to clean up the mess. But this person has been part of the

mess since 1976 — has been part of the whole evolutionary process. She

voted for the last blank cheque for B.C. Place, and now she says she

wants blank cheque number two.

[4:45]

It seems to me it's too much like Lady Macbeth: "Out, out,

damned spot!" As if to say: "I was never a part of this; I'm part of

this new administration as of last October, and I really had nothing to

do with that terrible, confusing, wastefull, debt-ridden mess." The

reality is that you have been a major player on the government benches

for the modem decade — for the modem era. You have been part of the

mess. Now you're coming here and saying: "I have the solution in terms

of dealing with the mess, and the solution is another blank cheque."

That's the kind of unmitigated gall that's parading before us today —

pure and simple.

MADAM CHAIRMAN: Hon. member, I think the

Chair would like to see fewer personal attacks on the other members of

the House. If we could just deal with a little more relevancy on this

section....

MR. STUPICH: Just very briefly, I'd like to

appeal to the members of this House.

We're being totally irresponsible if we vote in favour of this

section as it stands here, in my opinion. We go through the motions — a

charade, if you like, in some instances — of passing a $10 vote in

estimates. The reason for putting that $10 vote there is that it gives

us an opportunity to discuss whatever government service is being paid

for in that vote. No, it's not $10; it's a lot more than that spent.

But we go through the motions.

We're being asked to give the minister a blank cheque to spend

any amount of taxpayers' money without ever coming back to the

Legislature. It's done by the Minister of Finance in consultation with

his cabinet — a totally blank cheque for any amount.

We're not sent here to give government that kind of authority.

Why, would we be here? If it were that easy, why bother bringing us

together at all? Why not let cabinet do everything, if we're not going

to have the opportunity to discuss with the minister the way in which

money is spent? It is a totally blank cheque.

I have been assured that there is another

section later on

that limits the amount, but that

section does not limit the amount. My

attention has been drawn to

section 7, which limits the amount in only

one respect: it limits only the amount that may be borrowed. But

section 4 before us now says that the minister can spend any amount of

money whatever, buying shares in these two corporations. It is a

totally blank cheque, without ever having to refer to the Legislature

at any time for any of this.

Madam Chairman, I appeal to the members. Is that really what

you came here to do, to support cabinet, whatever cabinet asks for,

whatever they say, and to say: "We don't care what you do; we're going

to give you this authority, and then we'll all go home"? That's not why

you were elected; that's not part of the democratic system.

The one safeguard we have is that the elected members of the

Legislature have control of the purse-strings. We go through it, and

certainly the government will win in the end, but at least we must

maintain that structure, that system, or what's the point in having

this Legislature at all?

Madam Chair, I appeal to the government to withdraw this

section, and I appeal to the members to vote against it if the

government doesn't have the decency to withdraw it on their own.

HON. MR. COUVELIER: Madam Chairman, there

has been constant reference here to blank cheques, etc. There should be

an understanding of what is happening here. One of the hon. members was

provided this morning with this material. There are, at the moment,

approved obligations of BCDC for loans not yet made that will have to

be covered by borrowings whenever the applicants meet the requirements

to qualify for the funds. The opposition isn't intending, I hope, that

government should be paralyzed and unable to

[ Page 2573 ]

fulfil its obligations. We have to have the freedom to

increase the borrowings for obligations made....

Interjection.

HON. MR. COUVELIER: As was suggested, you

keep wanting to jump ahead. If you'd approve this one, we could move

ahead and deal with the question of the limit.

I have some trouble with the straw-man approach, Madam

Chairman. If you call the question we will get on with the question of

the limit.

Section 4 approved on the following division:

YEAS — 34

Rogers

L. Hanson

Reid

Dueck

Richmond

Michael

Parker

Pelton

Loenen

Crandall

De Jong

Rabbitt

Dirks

Mercier

Veitch

McCarthy

S. Hagen

Strachan

Vander Zalm

Couvelier

Davis

Johnston

R. Fraser

Weisgerber

Jansen

Hewitt

Chalmers

Ree

Serwa

Vant

Long

Messmer

Jacobsen

S.D. Smith

NAYS — 17

G. Hanson

Marzari

Rose

Harcourt

Stupich

Skelly

Boone

Gabelmann

Blencoe

Cashore

Smallwood

Lovick

Williams

Sihota

Miller

A. Hagen

Edwards

section 5.

MR. WILLIAMS:

Section 5 enables the

minister to exercise the powers of a shareholder. We are dealing with a

retroactive capability. Can the minister advise what action she has

taken as a shareholder, in terms of how many major sales have been

pursued in the name of this corporation?

HON. MRS. McCARTHY: Three sales were

announced publicly in regard to the Songhees land.

MR. WILLIAMS: There were three sales with

respect to the Songhees land, and major long-term leases with respect

to False Creek lands?

HON. MRS. McCARTHY: No, Madam Chairman.

[5:00]

MR. WILLIAMS: So the leases would be leases

within existing buildings, and not land leases, in the old Plaza of

Nations or whatever.

HON. MRS. McCARTHY: Yes.

MR. WILLIAMS: Could the minister advise the

House what bidding process was involved in the various elements of

either the leases or the land sales? What kind of public tendering

process took place?

HON. MRS. McCARTHY: We called for public

proposals, and I think the member would be aware of that. They were all

advertised.

MR. WILLIAMS: Can the minister then assure

the House that that's the case with respect to the leases in the Plaza

of Nations area as well?

HON. MRS. McCARTHY: Most of those leases

were arranged prior to my coming on board. I cannot answer for that.

Any that are there since my coming into this position of

responsibility, I think, were really a response to people who have come

to the Plaza of Nations to request space, and I don't believe there was

an advertisement on any of them. There is a party that they can apply

to, just as you would on seeing an empty store, and I think that is

just the way it was done in the past.

MR. WILLIAMS: Would the minister table with

the House the information regarding these major sales? We're talking

with respect to those sales.

HON. MRS. McCARTHY: In response to the last

question, I'm told that most of those tenants came to the

administration through Expo 86. They were Expo tenants and wanted to

stay on the Plaza of Nations after Expo closed.

In response to the very last question, that would all come

forward to this House through the audited statements of the corporation.

MR. WILLIAMS: No, it's a basket of

statements that comes in a final form years after the fact. We're

talking about significant huge property sales currently underway. It is

reasonable....

Interjection.

MR. WILLIAMS: Yes, okay. But the whole

question of process is important. For the benefit of the minister in

terms of any public debate, any public questioning of the whole

exercise, this process — the information and documentation — should be

as open as possible.

HON. MRS. McCARTHY: The bid proposals are

all public. In fact, they've gone through a lengthy process. We're

talking about the only ones that we have. As I mentioned in the earlier

question, there are three pieces of land at the Songhees. Those are the

only transactions that have taken place. They were made public by

public announcement, and they've had a long history of vetting with the

local government as well as our government and the administration of

the corporation.

MADAM CHAIRMAN: Hon. member, the Chair has

been listening intently, and I am at a loss to understand the relevancy

of the questions.

MR. WILLIAMS: You might have a point, Madam

Chair.

[ Page 2574 ]

Sections 5 and 6 approved.

section 7.

MR. STUPICH: This is the

section that we

talked about earlier, when the minister said that the limits on the

amount of taxpayer money that may be shovelled over to these two

corporations are set by this section. As I read

section 7, there's a

limit on the amount of money that may be loaned, and the limit is to be

set by cabinet. The cabinet, of course, can change it daily or weekly —

whatever it likes. It is no more a limit than is the whole business of

cabinet's approval in the first place. There is no limit with respect

to loans, and such limit as there is applies only to loans; it doesn't

apply to shares. The reference to the government being able to buy

shares in these two corporations on the recommendation of the Minister

of Finance, as approved by the Lieutenant Governor-in-Council, is still

there with no limit.

So it would seem as though everything I said about there being

absolutely no limit to the amount of taxpayers' money that may be.

shovelled over to B.C. Enterprise Corporation or B.C. Pavilion

Corporation is true. The only limit is the minister's ability to

persuade his cabinet colleagues to endorse the recommendation he has

made. Is that not the way we're standing?

HON. MR. COUVELIER: Madam Chairman, the

member is quite right that the Lieutenant-Governor-in-Council will have

— and must have, in our judgment — the ability to amend limits as

required.

In answer to the specific questions, because it is our desire

to be forward and to fully satisfy the opposition members here, it is

our expectation that when the order-in-council dealing with this matter

comes before us, it will be in the order of $350 million. The member

should understand that right off the bat we have an obligation of

approved loans of $200 million which will require covering. I suspect

and I hope that the hon. opposition members don't desire to see this

government go out of business. We have to have some ability to continue

to operate for this very necessary economic stimulus; that is to say,

of providing some financial help to firms who qualify under certain

strict criteria.

Dealing with the second question of the ability to sell

shares, I think it's important for the House to remember that part of

this exercise was intended to allow the disposal of government assets

in these areas, and also intended to allow the marketplace to become

shareholders in ventures that would prove to be marketable in the

marketplace. If, for example, as a consequence of the creative efforts

of these very capable British Columbians who are lending their services

to us on a voluntary basis, they were to create entities which have

some value in the marketplace and therefore a public offering is deemed

advisable, surely in the interest of protecting the government's

position in the matter we've got to have the flexibility to acquire

shares in that eventuality.

Hon. members have to understand that this is intended to be a

device to allow the private sector to participate in the coming

prosperity of the province, and we have to have those latitudes and

freedoms to best protect the interests of the citizens of this province.

MR. STUPICH: Madam Chair, I don't know

which bill the minister is discussing right now. I'm talking about Bill

55,

section 7. In the first place, certainly it's not our intention to

hold up the ongoing transactions of BCDC, as much as we might like to

hold up some of them; I don't know. But that's not the point right now.

Obviously the minister didn't understand, and perhaps that's why the

members all voted with the government: they didn't understand what I

was saying either.

I just feel that there should be some legislative limit.

Otherwise we've given up our total responsibility to have anything at

all to do with B.C. Enterprise Corporation and B.C. Pavilion

Corporation. We have said to the government: "Do whatever you want, we

don't care. Just don't bother us." But with respect to the shares,

we're not talking about shares of ventures that are going on out in the

marketplace or anything else.

Section 4, which you're talking about

right now, refers to shares of B.C. Enterprise Corporation and B.C.

Pavilion Corporation. I don't think the minister in his remarks meant

to say that he was going to be putting those on the market. The only

reference to selling those shares in this legislation is that the

government may buy any unlimited number of shares in B.C. Enterprise

Corporation and B.C. Pavilion Corporation, and thereby shovel money to

the corporations without ever asking for it back. It's just a grant

then. It's a gift rather than a loan.

Let's not talk about shares in other corporations. That's got

nothing to do with the legislation before us now, as I see it.

MR. WILLIAMS: I enjoyed the comments of the

Minister of Finance, Madam Ch