2004 Legislative Session: 5th Session, 37th 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)

TUESDAY, MAY 11, 2004

Afternoon Sitting

Volume 25, Number 9

CONTENTS

Routine Proceedings

Page

Tributes

Paul Tennant

Hon. C.

Richmond

Hon. G.

Abbott

J. MacPhail

J. Kwan

Introductions by Members

Tributes

Paul Tennant

Hon. G.

Campbell

Introductions by Members

Statements (Standing Order 25 B )

Women of Distinction Awards

B. Kerr

Kiwanis cycling tour for juvenile

diabetes research

G. Trumper

Canadian women's wrestling team

D. MacKay

Oral Questions

Canada Health Act and surgery on

Liberal MLA

J. MacPhail

Hon. C.

Hansen

Facility fees for private surgeries

J. Kwan

Hon. C.

Hansen

Skills training requirements in B.C.

Brenzinger

Hon. S. Bond

Status of RAV line

Halsey-Brandt

Hon. K.

Falcon

Facility fees for private surgeries

J. Kwan

Hon. C.

Hansen

Regional planning issues and

responsibilities of agricultural land commission

R. Hawes

Hon. G.

Abbott

Tabling Documents

Legislative Assembly Management

Committee, annual report, 2002-2003

Second Reading of Bills

Community, Aboriginal and Women's

Services Statutes Amendment Act, 2004 (Bill 36)

Hon. M.

Coell

Committee of the Whole House

Real Estate Development Marketing Act

(Bill 42)

R. Stewart

Hon. G.

Collins

Halsey-Brandt

B. Kerr

D. Hayer

R. Sultan

D. Jarvis

Report and Third Reading of

Bills

Real Estate Development Marketing Act

(Bill 42)

Committee of the Whole House

Highway (Industrial) Amendment Act,

2004 (Bill 46)

D. MacKay

Hon. K.

Falcon

G. Trumper

V. Roddick

Report and Third Reading of

Bills

Highway (Industrial) Amendment Act,

2004 (Bill 46)

Committee of the Whole House

Transportation Act (Bill 47)

M. Hunter

Hon. K.

Falcon

D. MacKay

R. Masi

V. Roddick

Report and Third Reading of

Bills

Transportation Act (Bill 47)

[ Page 11015 ]

TUESDAY, MAY 11, 2004

The House

met at 2:04 p.m.

Tributes

PAUL TENNANT

Mr.

Speaker: Good afternoon, hon. members. It is my pleasure to introduce today

Dr. Paul Tennant, who is with us in the members' gallery. Dr. Tennant, a

recently retired political science professor from the University of British

Columbia, was the academic director of the British Columbia legislative intern

program for 13 years. As academic director, he provided leadership to the annual

six-month program and the many legislative interns who benefited from his years

of political knowledge. He is joined today by Dr. Patrick Smith, the new

academic director, and Dr. Norman Ruff. I would ask you to please make them feel

welcome.

[1405]

Hon. G.

Abbott: I'd like to join with you in introducing, actually, three of my

former professors at UBC and UVic: Norm Ruff, Paddy Smith and Paul Tennant.

Everything I know about local governments I learned at the knee of Paul Tennant.

I can only imagine what I might have been able to do if I had taken provincial

politics from him, but I didn't, regrettably.

It is a

good time to salute, I think first of all, the efforts that Paul Tennant has

made, especially with respect to the legislative internship program. That was

something I benefited from close to 30 years ago in the inaugural internship

program. Paul has done a great job. On behalf of all of us who have enjoyed that

program and been a part of that program, thank you very much.

MacPhail: I join with you to acknowledge the…. Well, I was going to call

them the three wise men until I found out that they taught the member for

Shuswap, so I'll have to think of something else. But really, it is….

Interjections.

MacPhail: I'm trying to insult the minister, not them. I'm just kidding. I

am. I'm kidding.

But I do

want to join with everybody to say that Dr. Tennant has served the internship

program so well through all of those years and has, through that program, served

us as MLAs. I can only speak with the experience of the last three years and say

that we would have not survived without the program. Thank you all, and good

luck to Dr. Smith in the future.

J. Kwan:

Just to counterbalance the member for Shuswap, I must say that one of the three

wise men taught me when I was in university — to make sure and to verify, in

fact, that they are non-partisan in that sense. I, too, would like to welcome

them all and thank them for the good work they do in our community and

especially with the internship program.

Introductions by Members

J. Kwan:

I have the pleasure to introduce 25 grade 7 students. Who knows? They might be

aspiring politicians. These are 25 grade 7 students from St. Joseph's school,

and they're accompanied by five adults, including Mr. Don MacDougall, their

teacher, and Mr. Mike Boreham, who is their principal.

Last but

not least, I would like to acknowledge — and I see in the gallery — Aileen

Randall visiting us today. She is the widow of the late Fred Randall. Aileen has

been certainly a good friend to the opposition caucus, to myself and to my

colleague from Vancouver-Hastings. I would like the House to please welcome all

these special guests.

Tributes

PAUL TENNANT

Hon. G.

Campbell: I just couldn't sit here and not stand and say thank you to Paul

Tennant for what he has done for the province in many, many ways. I first met

Dr. Tennant when he was running for office. Let me just explain to people that

the fact that you study politics doesn't mean you have a clue about how to get

elected.

Hon. G.

Collins: And vice versa.

Hon. G.

Campbell: And vice versa, I must say. Yeah, right. I do want to say this,

though. Paul Tennant is someone who has given the spirit of public life to

people throughout this province. You talk with young people who he's touched in

his career as a professor, and he was willing to share not just his commitment

to public life but his passion for public life. Regardless of the party that

people may have gone to from that foundation he gave, I think he has made a

significant contribution to all of us in British Columbia. I want to say thank

you for that contribution. Thank you for that commitment, and let's hope we have

many more Paul Tennants in the future of our province.

Introductions by Members

B. Kerr:

I'm going to be speaking on the Women of Distinction Awards in just a few

minutes, so I'd like to introduce two special guests in the gallery today.

They're Veronica Osborn, the 2004 Women of Distinction Council chair, and Brenda

Parkinson, 2004 program chair. I'd ask that all members of the House please

recognize and welcome these women today.

Statements

(Standing Order 25

b) WOMEN OF DISTINCTION AWARDS

B. Kerr:

The few minutes went by very quickly, Mr. Speaker.

[ Page 11016 ]

[1410]

It gives me

great pleasure to stand on the floor of this House to recognize the tenth annual

Victoria Women of Distinction Awards. Sponsored by and a fundraiser for the

YM-YWCA of Greater Victoria, the event not only honours the inspirational women

of Vancouver Island but also supports women, children and families and their

involvement in the programs and services of the Y.

Since the

first awards night was held in 1995, the Victoria Women of Distinction has

honoured 667 women as nominees and 91 as award recipients. More than 6,700

people have attended the event over the years, and over $370,000 has been raised

for the YM-YWCA of Greater Victoria.

This year

73 women from all walks of life on Vancouver Island have been nominated in ten

categories. Individuals and organizations have nominated these women for their

achievements, vision and inspiration to others. The 2004 categories are lifetime

achievement; arts, cultural and heritage; communications; community legacy;

education, training and development; health, sports and fitness; neighbourhood

enhancement; science, information technology and research; workplace innovation;

and young women of distinction.

Tomorrow a

gala awards night will be held at the Victoria Conference Centre, at which time

the organizers will shine the light on these exceptional women, ten of whom will

become recipients of a prestigious Women of Distinction award.

KIWANIS CYCLING TOUR FOR

JUVENILE DIABETES RESEARCH

Trumper: Coming up at the end of this month is the Kiwanis cycling tour to

raise money for juvenile diabetes research. The event will kick off in Victoria

on May 30 and will finish in Port Alberni on June 4. The group of ten to 12

riders, led by Robin Nadick, will leave the Oak Bay Kiwanis Club in Victoria

after a pancake breakfast on May 30. They will ride up to Duncan, Nanaimo,

Parksville-Qualicum, Courtenay-Comox, Powell River and Campbell River before

they finish in Port Alberni.

The group's

mandate is to raise awareness of type 2 diabetes in children. To do this, they

have made several presentations in elementary schools encouraging healthy

lifestyles and prevention. It is the mandate of Kiwanis to serve the children of

the world.

This type

of diabetes is showing up in children as young as eight years old. Kiwanis is

doing what it can do to encourage parents and children to make healthy lifestyle

choices. This type of diabetes is preventable, and proper nutrition and regular

exercise are two of the easiest ways to prevent the onset of the disease.

The

cyclists are not only raising awareness, but they are raising money, as well,

for research and for sending kids with diabetes to summer camp. Some of the

major corporate sponsors include the Royal Bank, Dennis Jonsson Motor Products,

Safeway and Weyerhaeuser in Port Alberni. I would encourage everyone in the

House to attend the pancake breakfast at Oak Bay Kiwanis Club at 8 a.m. on May

30 and show your support for this very important cause.

CANADIAN WOMEN'S WRESTLING TEAM

MacKay: I would remind the House that the 2010 Olympic Games aren't going to

happen for another six years, so I'd like to talk more about the 2004 Olympic

Games, because I have an interesting story for you.

For the

first time ever, the 2004 Athens Olympic Games will include women's freestyle

wrestling. Canada qualified women in each of the four weight categories. Lindsay

Belisle was the six-time senior national champion. She was the gold medallist in

2003 at the World Cup. She was Canada's first-ever female champion in this

competition. The Canadian Amateur Wrestling Association named her the female

wrestler of the year for 2003.

Lindsay

grew up in the Kispiox Valley, a rural community north of Hazelton. She attended

school in Kispiox and graduated from the Hazelton Secondary School and Douglas

College. She is a student in the UBC faculty of education.

Lindsay

will represent Canada at the 2004 Olympic Games, but I'm not finished yet. Carol

Huynh, who was born and educated in Hazelton, is also going to the 2004 Olympic

Games as an alternate for the Canadian women's wrestling team. Carol also has a

distinguished list of wrestling victories. Lindsay Belisle beat Carol Huynh

during the Canadian qualifier.

I would ask

the House to join me as we wish these athletes our best as they compete for

Canada in Athens later this summer.

[1415]

Mr.

Speaker: That concludes members' statements.

Oral Questions

CANADA HEALTH ACT AND

SURGERY ON LIBERAL MLA

MacPhail: Yesterday the Minister of Health insisted that the member for

Chilliwack-Kent would have to file a complaint on himself for the government to

investigate whether his surgery was in violation of the Canada Health Act, so I

doubt very much that that will happen.

Charging

facility fees for medically necessary procedures violates the Canada Health Act,

but it also violates provincial law.

Section 17 of the Medicare Protection Act

specifically prohibits charging facility fees for medically necessary

procedures, but the act also gives the government, through the Medical Services

Commission, the authority to investigate abuses and ensure that private surgical

outfits don't charge patients directly for services.

[ Page 11017 ]

Yesterday

the Minister of Health dodged the question. Will he admit that charging facility

fees for medically necessary procedures violates provincial law and that he has

a legal responsibility to investigate to ensure that private surgical outfits

operate within the law?

Hon. C.

Hansen: The big challenge that governments across Canada have is around the

lack of definition flowing from the Canada Health Act for the terms

"medically necessary" and "medically required." That is

something that has been raised with us. Certainly, there have been indications

from the federal government that they are prepared to address that issue in the

coming months, and we look forward to that.

Mr.

Speaker: The Leader of the Opposition has another question.

MacPhail: Well, the Minister of Health is surely backing away from the

position that he took just months ago about how it was his responsibility. The

reason for the law is to prohibit taxpayers subsidizing private surgeries for

medically necessary procedures performed on people who can afford to pay the

extras. That's why those acts exist. This government is reneging on its

responsibilities, turning a blind eye to the violations of its own laws.

Last year a

patient was charged a $6,125 facility fee for sinus surgery at the False Creek

Surgical Centre, the very centre that the member for Chilliwack-Kent used. Her

doctor then billed the Medical Services Plan for $882.47, the full amount

payable for those services under the Medical Services Commission payment

schedule — a clear violation of the Medicare Protection Act. When the patient

complained, the Health ministry told her to take it up with the False Creek

Surgical Centre. This minister's ministry said they would check into it as well.

Nothing has happened.

Mr.

Speaker: Order, please. Order. Hon. member, time to put the question now.

MacPhail: Yes. Will the minister explain why his government is allowing

private surgical centres like False Creek to operate in clear violation of the

law and he's doing nothing to stop it, even though his bureaucrats said they

would?

Hon. C.

Hansen: This member's memory is rather short. Last year B.C. was actually

docked transfer payments from the federal government because of procedures that

took place while they were in office. It actually was a front-page story of a

woman from Prince George who came down to Vancouver to have surgery performed at

the False Creek Surgical Centre.

Interjections.

Mr.

Speaker: Order, please, hon. members.

Hon. C.

Hansen: What I said to the member yesterday and what I said in the media

interviews that I did yesterday, which I know the member listened in on

intensely, is that we follow up on all patient complaints that come to us. If a

patient feels that there has been a violation of the Canada Health Act, we do

open files on all of those. We do follow up on them. We encourage patients to

get reimbursement if they feel they were falsely charged for services by any

facility in this province. All of those are pursued.

Mr.

Speaker: The Leader of the Opposition has a further supplementary.

MacPhail: The minister says that because we have a law in place — the best

in Canada — and the law is enforced, somehow that's the opposition's fault.

The fact of the matter is that the law is now not being enforced by this

government at all, and I just demonstrated that with a case that his government

has done nothing about.

Let's look

again at the case of the member for Chilliwack-Kent.

Interjections.

Mr.

Speaker: Order, please.

[1420]

MacPhail: The member has put the facts — his own facts — on his website.

He was charged a large fee for an injury that caused him debilitating pain, but

he didn't pay the whole cost. I'm certain we all agree that the member was in

pain, and we can understand his motivation. But what I can't understand is why

the Minister of Health would not be concerned that his surgery is part of a

larger abuse of the Medical Services Plan, violating provincial law.

Again, to

the minister: will he comply with the laws of this province and take steps to

investigate whether or not the surgery performed in the case of the member for

Chilliwack-Kent by False Creek Surgery Centre violated provincial law?

Hon. C.

Hansen: If the member has information that somehow a law has been violated,

I would be pleased if she provided that to me, and I would be pleased to have

that looked at. The practice in this province that has been in place from, I

believe, when she was the Health minister in this province is that we will

respond to patient complaints. If a patient feels that they….

Interjections.

Mr.

Speaker: Order, please. Order. Let us hear the answer.

Hon. C.

Hansen: If a patient feels there may perhaps be a violation of the law, then

that patient can raise that with us, and we will investigate.

[ Page 11018 ]

FACILITY FEES FOR PRIVATE SURGERIES

J. Kwan:

The minister knows full well that two examples have now been brought to his

attention, and he has done nothing to address the issues. Let us be clear about

what is at stake. Private surgical facilities are double-billing. They charge

the public system for their surgery's services; then they charge patients a huge

fee to get into the door.

Let me

quote again from the 1995 federal letter on facility fees: "Facility fees

are objectionable because they impede access to medically necessary services.

Moreover, when clinics which receive public funds for medically necessary

services also charge facility fees, people who can afford the fees are being

directly subsidized by all other Canadians."

Again to

the Minister of Health: why is he forcing average taxpayers to subsidize private

surgeries for people who can afford huge facility fees in violation of the

Canada Health Act and in violation of his own Medicare Protection Act?

Hon. C.

Hansen: I can only repeat that if any patient in this province feels they

have been inappropriately charged fees that may be in violation of the Canada

Health Act, they can raise that issue. We will investigate. We will open a file.

We may encourage them to go back to the physician to get reimbursement of those

moneys, but we will make sure that those are followed up on.

SKILLS TRAINING

REQUIREMENTS IN B.C.

Brenzinger: For decades B.C. has been the blueprint of the trades training

curriculums across Canada. Now the changes — namely, the stripping of the

necessary requirements needed for the apprenticeship training and journeypersons

status — that this government implemented mean that the Red Seal endorsement

has become an option, not a requirement, and is therefore meaningless in B.C.

Other jurisdictions in Canada are questioning the capabilities of the B.C. trade

certificate holders.

My question

is to the Minister of Advanced Education. Why was the Industry Training and

Apprenticeship Commission, or ITAC, not given an opportunity to meet its full

mandate before this government arbitrarily changed the responsibility of

overseeing the apprenticeship process to the Industry Training Authority, or

ITA?

Hon. S.

Bond: First of all, I think it's very interesting that this is the first

time I've ever heard a concern expressed by that member about anything to do

with skills or trades training in British Columbia. In fact, we have a system

that….

Interjections.

Mr.

Speaker: Order.

Hon. S.

Bond: We've put a system in place that will begin to deal with trades

training in this province in a flexible, responsible way as we look at the boom

that British Columbia is now experiencing. Apprenticeship numbers are up in the

province. Red Seal will stay in place in British Columbia.

[1425]

Just as

recently as Friday we opened a brand-new spot for trades training excellence at

Kwantlen University College in this province. We intend to move forward and

provide the skilled workforce that British Columbia needs.

STATUS OF RAV LINE

Halsey-Brandt: My question is to the Minister of Transportation. Despite

extensive evaluation of the RAV line — all of which ensured the economic

viability, the environmental benefits and the ridership of the line — as we

know, the vote taken last Friday on whether or not to build the RAV line failed.

There are

still, however, hundreds of thousands of people in Richmond and Vancouver who've

been waiting patiently for years to see this transit link built and still want

to see the project happen. The best and final offer has not yet been tabled, yet

the people who voted against the project were concerned about cost overruns and

taxpayer risk. Can you tell my constituents what the facts are, and most

importantly, where do we go from here?

Hon. K.

Falcon: As Minister of Transportation I will tell you that I'm disappointed

for a couple of reasons. I'm disappointed, first, because I believe passionately

that we need to invest in public transportation. We actually need to get people

out of their cars and into public transit. If we don't provide a viable

alternative, they won't.

Secondly, I

think there was an opportunity for what I call a generational decision — a

decision that those board members had the opportunity to make, which would have

benefited our children and our grandchildren, would have had benefits for a

cleaner environment and would have had benefits for a greener environment.

Unfortunately, that opportunity was lost.

Interjection.

Hon. K.

Falcon: You know, I hear the member opposite heckling. That's unfortunate,

because it would have been helpful if the member opposite had been talking to

some of her allies that voted against this. At the end of the day, we've lost an

enormous opportunity for British Columbia to have a transportation alternative

that would have moved hundreds of thousands of people efficiently and

effectively.

In terms of

your comment about cost, to the member from Richmond, all I can say is the real

tragedy of this is that we never got to best and final offer stage, so we were

never able to know and will never know what the real costs would have been and

how many hun-

[ Page 11019 ]

dreds of millions of dollars the private sector was prepared to invest in

this program.

FACILITY FEES FOR PRIVATE SURGERIES

J. Kwan:

Last year a patient did complain to this minister of having been charged a

facility fee of over $6,000, and this minister did nothing. Last year the

government brought in legislation to crack down on this behaviour, supposedly,

but then turned tail and ran. Given the minister's refusal to enforce laws

already on the books, I guess that's no surprise.

An average

two-income family of four making $30,000 a year has seen their taxes go up by

$435 this year. Contrast that with a person making $80,000 a year, who saw their

taxes go down by $221. Let's be clear about what's going on. Average taxpayers

who cannot afford $7,000 facility fees are paying more in taxes so that those

who could afford those facility fees can bill the public system for private

surgery. Those same taxpayers…

Interjections.

Mr.

Speaker: Order, please. Order, please.

J. Kwan:

…are waiting longer than ever on the wait-list.

Mr.

Speaker: Time for the question now, hon. member.

J. Kwan:

To the Minister of Health, who's refused to take action to date. This is

clear; the law is clear. How can the public have any confidence in this Minister

of Health who refuses to protect health care for all British Columbians by

wilfully allowing taxpayers to subsidize private health care?

Interjections.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: I challenge the member to pull a document out of the library. It's

called the budget report. It was actually brought in as the last budget report

by the previous government, when the member for Vancouver-Hastings was the

Minister of Finance. Look in the tables, in the charts in there, in terms of

what low- and middle-income families would pay, and compare that to what they

pay today in terms of taxes. You will realize…

Interjections.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: …and anyone who wants to do that and check that in their library

will realize that there is more money in those people's pockets today. What is

more important…

Interjections.

Mr.

Speaker: Order, please.

Hon. C.

Hansen: …is the money that's been put into the health care system — an

increase of $2 billion over the last three years to help make sure that people

can get access to the health care they need in this province.

Interjections.

Mr.

Speaker: Order, please.

[1430]

Hon. C.

Hansen: The biggest interruption that we have had in the delivery of

surgeries in this province was the week before last…

Interjections.

Mr.

Speaker: Hon. members, order, please.

Hon. C.

Hansen: …when a strike by the hospital….

Interjections.

Mr.

Speaker: Order, please, on both sides of the House. Let us hear the answer.

Hon. C.

Hansen: It was the week before last when 6,000 British Columbians were

denied access to the surgeries they thought they were going to get because of a

strike action that shut down those operating rooms throughout the province.

There are 6,000 people who were denied access to the health care that they

thought they were going to get, and that's the issue that we've got to be

looking at fixing as we go forward.

REGIONAL PLANNING ISSUES

AND RESPONSIBILITIES OF

AGRICULTURAL LAND COMMISSION

Hawes: My question is to the Minister of Sustainable Resource Management. My

community, Mission, is in the middle of a regional growth planning exercise, as

are many of the cities within the Fraser Valley. As part of that exercise,

they're trying to get some land released from the Agricultural Land Commission

to promote intensive job creation. Five years ago the same requests that they

are now going to be making were made when I was the mayor of the community I

live in. The Agricultural Land Commission that was in place under the previous

government told me and my council that we should perhaps think about buying up

some subdivisions and tearing them down.

To the

minister. Our new-era commitment says that we will be making the Agricultural

Land Commission more responsive to regional needs. Has that taken

[ Page 11020 ]

place? What, if anything, has been done to make the Agricultural Land

Commission more responsive?

Hon. G.

Abbott: As the member notes, local governments — whether they're regional

districts or municipalities, of course — have local planning responsibilities.

Interjections.

Mr.

Speaker: Order, please.

Hon. G.

Abbott: The province, through the Agricultural Land Commission, through the

agricultural land reserve….

Interjections.

Mr.

Speaker: We'll continue when we have order in the chamber. Maybe you should

start over.

Hon. G.

Abbott: Thank you. I'd be pleased to, Mr. Speaker.

The

province, through the Agricultural Land Commission and the agricultural land

reserve, has responsibility for preserving agricultural land and for promoting

agriculture in the province. There are about 4.75 million hectares of ALR land

in the province. The province has leads on that.

appreciate, actually, the Leader of the Opposition reminding me about Six Mile

Ranch as a time when the needs of local government and provincial

responsibilities didn't perfectly line up. It's a very good example, and I thank

her for reminding me of it. Where those provincial and local responsibilities or

interests don't line up perfectly, we work together to try to resolve them, as I

know we are in respect of Maple Ridge.

In terms of

making the commission more regionally responsive — because I think it is a

very important element — we have, I am pleased to note, increased the regional

panels from three to six. My understanding from local governments is that they

feel very pleased — unlike back in the sad days of the NDP and Six Mile Ranch

— that things are actually working reasonably well.

Interjections.

Mr.

Speaker: Order, please. Order, please.

[End of question period.]

Tabling Documents

Mr.

Speaker: Hon. members, I have the honour to present the Legislative Assembly

Management Committee annual report, 2002-2003.

Orders of the Day

Hon. G.

Collins: I call second reading of Bill 36.

[1435]

Second Reading of Bills

COMMUNITY, ABORIGINAL AND

WOMEN'S SERVICES

STATUTES AMENDMENT ACT, 2004

Hon. M.

Coell: I move that Bill 36 be read for a second time now.

This act

makes amendments to local government statutes for which my ministry is

responsible in order to respond to some specific requests and issues identified

on five different matters. These amendments reflect this government's commitment

to local governments' autonomy and to ensuring that the legislation is flexible,

clear and effective for local governments and their communities. This act

includes amendments to fine-tune the development finance system.

B.C.

communities are experiencing growth. This is welcome news and proof that more

and more people are recognizing that our province is the best place in Canada to

live. Community growth puts pressure on local governments to build new

infrastructure and expand services. Our proposed amendments to the Local

Government Act, Community Charter and the Vancouver Charter will increase

responsiveness and equity in the development finance system by authorizing local

governments to waive the exemption from development cost charges that exist for

projects with fewer than four units, by authorizing local governments to set the

threshold at which development cost charges become payable higher than the

default of $50,000 and also by authorizing local governments to use the money

from capital reserve funds to temporarily finance capital projects.

These

proposed changes are the result of the recommendations of the development

finance review committee, a committee of local government, the development

industry and provincial government representatives. These changes will make the

development finance system more responsive to the needs of both developers and

local government.

This act

also includes amendments to the Vancouver Charter. These amendments respond to

requests by the city of Vancouver. One of these amendments will clarify the

scope of the charitable property tax exemption in light of a recent court

decision. The amendment will ensure that charities that have a registered lease

on a property owned by a charity benefit from that tax exemption.

Another

amendment to the Vancouver Charter clarifies the size of the city of Vancouver's

board of variance. You may recall that in 2003 we placed the authority to

appoint the board of variance members where it belongs, with the city of

Vancouver, rather than with the provincial government. This amendment keeps that

intent while clarifying the number of members on that board.

This act

also contains amendments to provide greater flexibility for regional districts

to recover the costs of administrative-type services. Local govern-

[ Page 11021 ]

ments need this flexibility so that cost recovery can meet the unique local

needs — for example, so that they could divide the costs of a regional

district administration building among members, based on the floor area of the

building used for various purposes rather than on the more arbitrary basis of

assessed values in properties. This increased flexibility is part of our

government's demonstrated commitment to provide greater local autonomy and the

authority to make local decisions that meet local needs.

Finally,

this act makes further technical and housekeeping amendments to the Community

Charter, Local Government Act and related legislation. These include legislating

a number of clarification and correction amendments to the Community Charter

that had, on an interim basis, been done by regulation. This fixes and will

ensure the clear and effective operation of the Community Charter. We consulted

with the Union of British Columbia Municipalities on the amendments in this act

to ensure that there were no concerns.

I would ask

members to lend their support to this worthwhile and necessary piece of

legislation.

[1440-1450]

Motion

approved.

Hon. M.

Coell: I would move that Bill 36 be placed on the orders of the day for

committal at the next sitting of the House after today.

Bill 36,

Community, Aboriginal and Women's Services Statutes Amendment Act, 2004, read a

second time and referred to a Committee of the Whole House for consideration at

the next sitting of the House after today.

Hon. M.

Coell: I move committee stage for Bill 42.

Committee of the Whole House

REAL ESTATE DEVELOPMENT

MARKETING ACT

The House

in Committee of the Whole (Section

B) on Bill 42; J. Weisbeck in the chair.

The

committee met at 2:54 p.m.

On

section

Stewart: I want to ask the minister several questions related to the way in

which real estate marketing will now be handled and the way in which we've

managed, I hope, to reduce some costs for residential real estate marketing.

I remember

— and I bring to the minister's attention and to the attention of the House

— being in this Legislative Assembly more than a dozen times over a decade and

with at least half a dozen different ministers responsible for housing begging

for the simple changes that would permit, for example, the use of deposits for

construction if they were insured.

[1455]

It was

clear that we had everybody on our side on that one. We had consumer groups on

our side. The last government was on our side. Everyone agreed that this is

something that has to happen. It's something that ought to happen, and there's

no good reason why we can't permit the developer to use deposits for the

purposes of construction if he could ensure, essentially, that the deposits were

safe in the event of default by the developer. I know that is now included in

this bill.

I want to

ask the minister to explain: how come this took a decade of the previous

government and still no action, and why are we able to do it now?

Hon. G.

Collins: Those are actually questions for sections 18 and 19. If members

want to approach it in a more ad hoc way, I'm prepared to do that. If the member

has time, okay. That's fine.

I'm not

sure. Perhaps staff might have a better sense of why this took so long. I do

know that as part of this government's attempt to embark upon a deregulation

initiative across government, this type of legislation was moved forward as a

change that could be undertaken in an attempt to meet the targets that were put

there in our election platform of reducing the regulatory burden and ultimately

the count by one-third in our first three years in office. In fact, most of the

legislation that's come before the House this spring — or a great deal of it,

anyway — deals with various deregulation initiatives in various ministries.

The rewrite

of the Real Estate Act, of which this was part — and there's another bill

we've introduced, which is the other part of the act — actually constitutes a

fairly significant reduction in the regulatory burden. Committing to reduce that

burden has triggered the rewrite of a number of pieces of legislation. This is

one of them.

This was an

issue, as the member mentioned, that has been out there. There's been a lot of

support across the spectrum for this type of innovation that's contained in

sections 18 and 19. Government felt it was an appropriate time to do it. It's

done in other jurisdictions, and there's a way to do it which facilitates the

use of those funds in the meantime and which also protects the consumers through

an insurance process to make sure that those funds are secure.

Stewart: I thank the minister for those comments.

I want to

explain that my main purpose for bringing them up now, rather than in 18 and 19,

is because they're part of a general concern I've always had that if we can

protect the consumer just as well while we get rid of the regulatory burden that

is unnecessary and if we can make real estate marketing, if you will — the

transfer of real estate from seller to buyer — as efficient as possible, we

will save consumers money as long as the protections are always there.

[ Page 11022 ]

I note, for

example, on this one that we are now able to tell the consumers out there that

they're just as protected as they used to be, but the money they're going to pay

as deposit will actually be part of the process. It will continue to provide

savings for them as it's being used during the construction process.

I think

it's particularly important that with each one of these regulations that are

deemed necessary to protect consumers — particularly consumers in the

residential housing market that is as hot as it is today, for example — as we

strive to make certain that consumers are protected, we at the same time make

certain that none of the regulations that we're putting in place or that are

already in place are creating an unnecessary burden. Each time we look at a

regulation, we will ask: first of all, will it serve the need to protect

consumers? Secondly, is there a simpler way to do that?

This one

that I bring up as an example,

section 18, provides for a way in which the cost

to the consumer — the end cost of housing — can be lowered by a simple

change in a regulation that makes it possible for the developer of a property to

use the money he has received from purchasers for construction and thereby

reduce the cost of his having to borrow during the construction process.

[1500]

Hon. G.

Collins: I agree that this is a good innovation. It certainly provides

greater flexibility and opportunities. I was asked by a member — I can't

remember which member it was; some time ago, or in the last couple of days,

anyway — whether or not developers would be required under the act to pay

interest on the money they're utilizing. The act doesn't prescribe that they

need to. However, they may, and many already do. Certainly, a consumer could put

that in as part of the transaction — that they would receive a certain amount

of interest for the use of those funds in the intervening period — but we're

not prescribing that in the act.

I don't

know if the member had additional questions. I was just going to suggest that if

he did, he could remain standing in between, because I know it's an effort to

get up and down with his temporary disability.

Interjection.

Hon. G.

Collins: Yeah — ejection seat.

I agree

with the member. I think this is a welcome change and will certainly help

facilitate greater activity in this sector, reduce costs for consumers

potentially, as well as help the industry in moving these developments forward.

I think it's a great innovation, and I hope members will support it.

Sections 1

and 2 approved.

On

section

Halsey-Brandt: My questions on

section 3 are about the timing of marketing

of development property. I know they'll spill over a wee bit into division 2,

but I think it sort of starts with

section 3, so I'm going to ask the minister

that question.

Right now,

as I understand it — and perhaps your staff can correct me if I'm wrong — if

someone's doing condos or if they're doing a fee simple subdivision, they can at

least sell the condos when they have a development permit as opposed to a

building permit from a municipality and file a prospectus.

On the

subdivision, I'm not exactly sure of the criteria they hit when they do that. I

think it's when they file the subdivision plan. Perhaps I could just ask you to

clarify what the situation is now and what the change is going to be under this

legislation, particularly around condos — whether it's development permit or

building permit. I've been approached by some developers in my municipality over

the weekend who were concerned that they have to wait longer now before they can

sell their property than what it was before.

[1505]

Hon. G.

Collins: With regard to condominiums, what we're doing in the legislation is

just codifying the existing practice. There will be no change to that. I believe

the superintendent will bring in rules, etc., to implement that, but it's going

to be essentially the existing practice.

With regard

to other developments, however, we are trying to put in place processes whereby

the pre-selling can happen earlier — not later, but earlier. Particularly on

subdivision lots and other types of developments outside municipalities,

provided they have approval by the local government or whatever building

permitting approval process within that local government…. Once they have that

and if that is satisfactory to the superintendent of real estate, then they can

actually start the process earlier. What we're trying to do is advance it where

possible. Where we're already in a position to do early pre-sales, as in the

case of condominiums, we're continuing that. There is certainly nothing in the

legislation that would delay it. In fact, what we're trying to do is move that

forward a little bit.

Halsey-Brandt: Just to clarify that, which I believe is excellent news….

Generally for a condo, most municipalities — certainly the larger ones —

require a development permit in terms of the architectural renderings and

drawings of the floor plans and that sort of thing — not building drawings,

but ones they take to a public hearing so everyone knows pretty well what's on

the ground. That's the stage that they're usually doing the pre-sales on now,

because the building permit may take them…. It could be a year after that in

terms of doing all their architectural drawings and putting up the money. If

they can still do that at that stage, that's great.

On the

subdivision in the legislation. This is jumping ahead a wee bit, but it's still

under marketing in

section 10. It talks about approval-in-principle according to

the local municipalities. I would take that this would be a subdivision approval

subject to construc-

[ Page 11023 ]

tion of roads, sewers and all that sort of thing. They put up the bond that

they're going to do that. Then the developer could go ahead and do some

pre-sales of those lots and would have a time frame, certainly with the

municipality. They put up a bond that they are in fact going to build the

municipal services — the roads, sewer, water and that sort of thing — and

file a subdivision plan. I would assume that's what that approval-in-principle

stage means.

Hon. G.

Collins: With regard to developments within a municipality, it's entirely a

local government matter, so we aren't involved in that. The local government

makes those decisions and determinations.

If it's

outside of a municipality, as long as they have approval-in-principle from

whoever the body is that they need to get approval-in-principle from — it

could be a regional district or someone else — they're allowed to start the

pre-sells. When the pre-sale is made and the deposit is paid, that deposit is

held in trust. If the developer does not deliver on the commitments they've

made, then that trust money goes back to the purchaser. We're not stepping in as

government at a provincial level to play some sort of a bonding role that will

administer that. That's not what we're trying to do.

[1510]

It's

approval-in-principle. That's a fairly early stage. It can be different in

different places, but the backstop for the consumer protection on that is the

deposit, the trust of that deposit and the fact that if the developer doesn't

deliver, they can get their funds back.

Halsey-Brandt: Just going back within a municipality, and then maybe you

could clarify this for me: does the act not cover that if it is a municipality?

Or is this

section we're referring to outside of a municipality? I'm assuming

the act does cover what happens in a municipality.

Hon. G.

Collins: For example, I think the case the member raised was a subdivision,

a lot — the lots in the subdivision. If you are inside a municipality, this

act will exempt that development by regulation from the provisions in this act.

It is assumed that the municipality has processes in place through their

development approval process and their bonding, or however it is they choose to

do it in their municipality, to make sure that the project gets completed and

that individuals are dealt with fairly.

We don't

step into the municipal role and try and create room for ourselves there.

They're fully competent — as the members knows, having been a longstanding

mayor of one of the larger municipalities in the province. Municipalities handle

that very well on their own, and they don't need any particular guidance from

the provincial government. They are exempted from this act by regulation. We

would list that, and then the development is under the purview of the municipal

government.

Sections 3

to 17 inclusive approved.

section

B. Kerr:

I have a few questions with regards to deposits. The first one is on subsection

(1) where it's mentioning: "…must promptly place the deposit with a

brokerage, lawyer, notary public…." Can these people be in-house, working

for the developer?

[1515]

Hon. G.

Collins: Let me give the member an example. If you had a trust or a

development company and one of the people in the company — one of the

employees — was a lawyer, while that lawyer may be working with the developer,

they also have professional obligations. They pay dues through the Law Society.

There's professional recourse provided through the Law Society, for example.

There is that insurance that goes with being a member of the Law Society.

The lawyer

could set up a trust and act, I believe, as the trustee. However, all the

professional requirements that go along with being a lawyer and the insurance

that the Law Society has for professional misconduct of lawyers would apply. My

understanding is that yes, that would be possible. But again, there are

professional obligations and insurance that go with that.

B. Kerr:

I believe it's another act in which the lawyer's trust accounts and all

these trust accounts are audited — I think four-man audits, we used to call

it. So that would be under the various societies' acts. They would be audited by

an independent party. That was fine. I was just wondering whether that was

precluded.

section

2 we've got the trustee, which could be any one of the number of people

mentioned in

section 1. They hold a deposit for the developer and the purchaser,

not as an agent for each of them. Usually, I think, when you go to a brokerage

house now, they're either acting for the purchaser or acting for the seller. I'm

just wondering how they can be acting for the purchaser or the seller and then

at the same time hold the money, not acting for either party.

Hon. G.

Collins: It is the same provision that currently exists in the Real Estate

Act and has been used for years. It's a fairly common stakeholder provision.

That's my understanding. It's something that's worked in the past and that we

anticipate will continue to work in the future.

B. Kerr:

I'm concerned when I look at where the trustee must turn the funds over to

the developer. I'm concerned about the protection for the potential purchaser,

because there doesn't seem to be anything in there to protect the purchaser if

the deal is sliding. I'm talking about the timing of when things can be

registered and when he can actually have title registered in his name.

There's a

section here under

section 4. It says that if the period under

section 21 has

expired…. But what would happen if he can't register title? He doesn't get it

[ Page 11024 ]

when he's supposed to get it on the closing date, yet the time for rescission

has expired. What protection does the purchaser have?

[1520]

Hon. G.

Collins: I'm trying to understand the question properly. If I have it wrong,

the member should please let me know.

Subsection

(4) deals with an obligation of the purchaser. If the purchaser has paid their

deposit and if there is an agreement and they have to put some additional money

into the deposit, as long as they're doing that, there is no trigger on

section

4. There is no default by the purchaser, and there is no ability for the trustee

to pay or the developer to request payment of any money that's in the deposit.

There is subsection (4) and the four sub-subsections (a), (b), (

c) and (

d) underneath that, and there is a requirement that the purchaser would miss a

payment or not live up to their part of the deposit schedule, if that were the

case. As long as the purchaser is making their payments as was agreed upon, then

section 4 can't be triggered. The developer can ask, but there's no ability for

the trustee to pay out any funds.

Maybe what

the member was getting at, and that's why I'm not sure if I understood his

question…. If the example the member has is…. Let's say the purchaser and

the developer have entered into an agreement that money will be paid at monthly

intervals until such amount of money is built up in the deposit. The project is

being delayed, the developer isn't living up to their end of the bargain, and

the purchaser says: "Lookit, until you get this project back on track, I'm

not putting one more penny into the deposit." Then there are remedies that

are available to the purchaser that they should probably be taking first. Those

exist in subsection (2). There are some requirements under subsection (2) that

have impact.

The second

last one is sub-subsection (h), which is in accordance with a court order. If

the purchaser wanted their money back, they could go to court and say:

"Look, this guy isn't living up to his end of the agreement. I have been

making my payments. This project is way behind schedule. It doesn't look like

it's going to go ahead." The company may be failing; the development may be

failing. "They haven't lived up to their part of the contract. I want my

money back." The court can say: "Yup, give him his money back."

They can direct the trustee to give the purchaser their money back.

B. Kerr:

Getting close. I think that's what I'm getting at, but it seems to me that the

incumbency to take this person to court to get the deposit back would be more

suitable if it was just that they could rescind the deal if it went sideways,

because under

section 4, the trustee must release the deposit. Even if the

trustee recognizes that something's sliding, there's no right of rescission for

the purchaser.

[1525]

If a

developer is getting into some real financial difficulty and needs some money

and the right of the 21-day rescission period is over, he could just go and

write the letter and say, "I want the money; it's a one-sided deal,"

then get the money and say to the purchaser: "You can fight me in court

later to get it back." There is no protection in there to protect the

purchaser.

Hon. G.

Collins: Both parties have to live up to their side of the agreement. The

purchaser could allege that the developer wasn't living up to their side, and

they could have that discussion. It would ultimately, I suppose, be up to the

courts to decide whether or not that were the case. There is a simple test for

whether or not the purchaser is living up to their commitment, and that is if

they stop paying — right? It is a little clearer.

Hopefully,

you never get there. Obviously, at some point in the future there will be a case

where you end up in this situation. If I were the one putting money on deposit,

and I was going to go to court — I didn't think this deal was moving ahead —

I would want to be…. You'd probably first approach the developer and say:

"Lookit, you're not living up to your requirements; I want my money

back." You know, you could probably get it back voluntarily. I don't know.

I'm assuming if you both agreed, then the money could come back to you. If there

was a discrepancy, there is a process by which you can go to court and get a

determination on that.

While

that's happening, as the other party to the contract, I would think you would

want to keep living up to your commitments. The money you're putting on deposit

is not going to the developer; it's actually going into trust. As long as you

live up to your part of the bargain and you make your payments, then it seems to

me you're in pretty good shape under the act.

There could

be the reverse, where you've got a purchaser and the rescission period has

passed. For whatever reasons — maybe in their own life they've lost their job;

maybe there is a divorce; maybe they just have buyer's remorse — they would

like to get out of this deal. They can go and say: "Oh, you're running

behind schedule." There may have been some disruption in the schedule, but

the developer feels they will be able to catch up. It may not have a lot of

credibility in fact, but the purchaser believes or is trying to put a case

forward that the developer isn't living up to their commitments and says:

"That's it. I'm not paying you any money, because you're behind

schedule."

There has

to be some protection for the developer in that agreement as well. I think

that's what this

section is trying to do. Subsection (4) is saying that there

are recourses in subsection (2), but there needs to be some protection for the

other party of this contractual arrangement if the purchaser stops making their

payments and fails to live up to their agreement. They shouldn't just be able to

trigger it like that. That's why there is a rescission period. Once you go

beyond that and the contract has gone a little further, you are both expected to

live up to your duties and responsibilities. If either of you don't, then there

is a resolution process. That's how it would work.

[ Page 11025 ]

B. Kerr:

I guess that's the concern. I can see that the protection for the developer is

here, and I think that's great, because these are the guys who are investing big

dollars. For a person in relation to the money that they have…. If they're a

first-time buyer and it is a small deposit — say $5,000 or $10,000, which

could be a substantial sum of money for them — they can't really afford to

take the developer to court if things go sideways and the developer says:

"I want my money on a technicality." I guess I'm concerned that there

should be some protection in there for the purchaser. I just don't see it.

[1530]

Hon. G.

Collins: I think it is fair to say that that could be…. If it's a very

small amount of money, then the investment you would have to make in going

through the court system or the legal system may be more onerous or more costly

than the amount of money you are going to recover.

Let me give

the member an example. Let's say that the development goes bankrupt. If that

happens, then the bankruptcy trustee has to present a new prospectus, a new set

of documents, and put that before the people who've already put their money on

deposit, and then there is a new seven-day rescission option for them. At that

point you say: "I've had enough of this. I don't like the new prospectus

either. I don't think this thing is ever going to fly. I'm outta here." You

can take your money at that point. So there are some provisions.

These two

sections are, I would say, a fairly significant improvement over what's there

currently. Currently, the money is held by the developer, and the developer gets

to decide if it goes back. This is far more balanced. There is far greater

consumer protection here than there is in the current act.

If you look

at subsection (2)(i), there are other provisions. If we observe a problem

developing or some scenario, as the member described, where an injustice could

be done or is being done, there are provisions under this for regulations to be

brought in under this act that would allow for the flow of those funds in the

trust back to the purchaser. We have in this case eight provisions, up to (h),

and then there is the ninth provision under sub-subsection (i), which gives us

broader powers to do other things if there's a problem that arises that we don't

foresee at this point. There is a provision to deal with that should a problem

like that arise.

B. Kerr:

Moving on. On subsection (4)(

c) and (d), just for my benefit, I wonder if

there is a redundancy here. On the penultimate line of sub-subsection (

c) it

says: "if the developer elects to cancel the purchase agreement, the amount

of the deposit is forfeited to the developer, and (

d) the developer has elected

to cancel the purchase agreement." I just wonder if that's a redundancy

there.

Hon. G.

Collins: Sub-subsection (

c) is, "under the terms of the purchase

agreement," if they have chosen to do that, and (

d) is: and they actually

do it.

B. Kerr:

On the penultimate line, though, isn't it saying that they have to do that in

order for the deposit to be forfeited — if the developer elects to cancel the

purchase agreement? They have to make that election anyway before it can be

forfeited.

Hon. G.

Collins: Under (c), the terms of the purchase agreement would have to allow

for the developer to cancel, and then under (d), the developer would have to

actually cancel. Both of those have to be in place. If it's not in the terms of

the agreement, then it doesn't work.

B. Kerr:

That's all I have, Mr. Chair, under

section 18.

Halsey-Brandt: I had mentioned

section 19, but I think they are probably

more appropriate under this

section because it is around the deposits.

Under

section 18(2), if the money is in the hands of the trustee and a purchaser or

the developer has a problem, it is not up to the trustee…. They don't have a

decision-making power unless both parties agree to release a deposit. In other

words, they don't have any quasi-judicial system. They have to go to court to

get that unless both the purchaser and the developer agree. Is that correct?

[1535]

Hon. G.

Collins: It's not a discretionary role. The trustee has to act within the

confines of this section. It says the trustee "must not release the deposit

from trust except as follows…." Then there are nine ways that could

happen, and only nine. There are eight that are in some detail, and then (

i) would be regulations that may be developed at a later date. So if the money was

paid into the trust account in error, then the trustee can look at it and say:

"Oh, it's an error. Get your money back." Or (

b) could repay it to the

purchaser with the written consent of the purchaser and developer. There's an

example where the two parties, the purchaser and developer, could agree,

"Let's part our ways," or "Yeah, you paid too much," or

"We don't need that much anymore," or however it might work. They

could agree to release some of that. Or (c), and I could go on. There's an array

of things. The trustee must act within those provisions.

Halsey-Brandt: What I'm getting at around that — and I think you've

covered it off — is really they have to go to court even if the trustee… For

example, it happens a lot on pre-sales where the developer says that the

apartment building is going to be finished in May of 2004. So the purchaser sold

their house and is moving out this month — right? It's going to be six months

away. Or they've got some bankruptcy problems or whatever and they're short of

tradesmen. You know the purchaser is really upset — right? They have to go and

rent a place. They'd would just as soon take the money back and go and walk.

Even if the trustee might agree with that in terms of the agreement, the

[ Page 11026 ]

trustee doesn't have the ability to make that decision. They would have to go

to a court to decide that.

Hon. G.

Collins: Yes. And I take this opportunity for thanking my former in-laws for

putting me and my ex-wife up for three months while we were in a very similar

position. They were very gracious about it. They put us up in a two-bedroom

apartment — and our dog as well. So it does happen from time to time.

In that

scenario, let's say, it is not up to the trustee to say you are hard done by, so

therefore you can have your money back. You have to go through the processes as

prescribed here. They don't get to sit in judgment. They have professional

obligations to follow this and to deliver upon it. If in that case, for example,

the purchaser and the developer…. Let's say it's a great development, but

somebody's got kids, and it's just not going to work. It's going to be six

months longer, and they say: "Look, this is just killing me. I can't do

this. I've got all this money tied up there. I can't go live in a one-bedroom

apartment. I really need to go find something else."

They sit

down with the developer. The developer says: "Okay, there are 83 units;

you're one. It's not going to hurt me. Fine, I understand." They come to an

agreement, and they release the funds. That could happen.

But it's

not up to the trustee to say this person is really inconvenienced here. Give

them the money, and if you don't give it to them, I'm going to give it to them.

They don't have that power to do that. Somebody could go to court, I suppose,

and claim an undue hardship. I don't know how that might work; I'm not a lawyer.

They could, I suppose, try and do that, but that would again have to be a

decision of the court and an order of the court, not at the discretion of the

trustee.

Halsey-Brandt: My next question is around the deposit protection insurance.

Is there a letter of credit involved in this at all? Does the developer have to

put up a letter of credit to guarantee the insurance company, or is it just a

question of the developer paying the premiums — whatever they are — having

the insurance and then using the deposits?

Hon. G.

Collins: The Financial Institutions Act would regulate how insurers are able

to operate for solvency, etc. There may be an array of products that come

forward. I don't know what they might be. I could probably try and get a sample

of what they might be and what they are in other jurisdictions. It may not be

just one type of policy. There may be an array of products that are available.

Provided that they meet certain standards, then they would be eligible to

release those funds or let the developer have access to those funds and use them

in their development.

[1540]

Halsey-Brandt: My last question on this section. If they decided to go the

insurance route instead of the trustee route, are those provisions, as it sets

out under (2) and (3)…? Could we just insert "insurance company" as

opposed to trustee if they choose to have an insurance for the deposit as

opposed to a trustee? If I'm a purchaser that is upset, I look at this list of

things and decide to go to court. I go the insurance route instead of a trustee,

but it's virtually the same thing in terms of what's available to the purchaser.

Hon. G.

Collins: We're sort of looking at 18 and 19 together here. I think if you

look at 18(2)(d) — those nine scenarios under which the trustee can release

the funds — (

d) is in accordance with

section 19. That's the insurance one,

where there's deposit insurance in place or some sort of mechanism by which

those deposits are insured.

If the

requirements under

section 19 are in place, then the trustee can say:

"Okay, you've set up insurance, whatever model that is. The deposits are

guaranteed or insured, etc. Then I can release those funds to the developer, and

they can use that for the project." If the developer subsequently defaults

on that, then it's the insurance company that has to come in and pay out the

purchasers who've put those deposits forward. That's how the system would work.

I expect they'll try and recover it from the developer through the many means

that they would have at their disposal.

I notice

the member for West Vancouver–Garibaldi is in the chamber. I recall now there

was a question by that member, who asked me a day or so ago — not in the House

but outside — about the interest being paid on deposits. I think it was in

response to a question, perhaps, by his seatmate. The act does not require that

interest be paid on those deposits to the purchaser. However, many do.

Certainly, it's something that could be negotiated as part of the contractual

arrangement between the purchaser and developer as part of pre-sale that a

certain rate of insurance would be paid.

I know that

the larger ones do as a part of their marketing. They want to make sure they

treat people fairly. Many do. It's not required in legislation, but certainly if

it is not offered by the developer, then a purchaser could ask that it be put in

the contractual arrangement. I just wanted to answer that, because I think I had

given an erroneous answer to the question a couple of days ago.

Hayer: How does this

section work to protect the consumer more than the

protection they have available now, and what extra flexibility does it give to

the developer?

Hon. G.

Collins: As far as the consumer goes, as I think I mentioned in response to

an earlier question, previously those funds were held by the developer. Now,

under this act, those funds will need to be held by a trustee — a lawyer, a

notary public, a broker, etc. There are people who will act as trustees. They

have responsibilities — professional responsibilities, fiduciary

responsibilities — to manage those trust funds in accordance with other

legislation that prescribes the

[ Page 11027 ]

actions of their profession, and they have some form of insurance.

The Law

Society manages the funds. If there is improper behaviour or fraud perpetrated

by a member of the Law Society, the Law Society steps in and provides

restitution. They levy a fee on their members in order to ensure that's there.

Notaries have an insurance plan; brokers, I think, have a similar type of an

insurance plan. Previously, you put your deposit in, and the developer held

those deposits. Now the deposits are held by trustee. In that regard, the

consumer protection is enhanced.

As for the

developer, there's greater flexibility here. If you're building a large project,

access to capital is often an issue. It's short-term capital. Interest rates on

short-term capital can be higher — depending, I suppose — so you have this

pool of money sitting there from people who made a deposit. They're going to

live there. They're basically buying the development from you, and there's this

money sitting there.

We've now

provided in this legislation a mechanism that exists in other jurisdictions

whereby if the developer goes and secures insurance on that money, they can

actually apply to the trustee and have the money released to them. They can use

that money in building the development and getting it up and ready. They have

access to the capital.

[1545]

That helps

them and gives them other ways of getting capital. They could still choose to go

and get it on the financial markets. They could borrow it from partners. There

are any number of ways that people can acquire capital. Here's one more way

that's available to them.

As I said

earlier, should the developer default on those funds or have them released by

the trustee and take them into their possession and then the development fails,

there is an insurance policy in place that would provide restitution to the

purchasers who had put that money into deposit. So the protection is there for

the consumer. It's somewhat enhanced, and the flexibility is there for the

developers in that they have another source of capital.

Sections 18

to 20 inclusive approved.

section

Halsey-Brandt: My question is around the three days, which I think deals

with buyers of new condominiums, going to seven days. I think this is just

great, particularly when the market… You've got people lining up all night and

this sort of thing and pressure on people to buy something. Having the seven

days is just great. Although we don't have a lot of time-shares, I think most of

us in this chamber have probably been in some part of the world where we've run

into time-share salespeople. The pressure does get pretty heavy on you, so

having that seven days is a great benefit for consumers.

I'm

assuming that by going to this seven days, where it's…. First of all, no other

conditions apply. You don't have to write into your purchase agreement that it's

subject to seven days or anything. The statute, in fact, overrides anything. If

I didn't write it in there or if I wrote in that I waive the seven-day

rescission period — which is ultra vires or something, I guess the term is —

the seven days applies no matter what. It's in provincial legislation as opposed

to what people can write in there.

My second

question, if I can just ask it now, and my last one on this bill, relates to….

This is only for new purchasers of homes, condominiums and time-shares. In the

resale market out there this does not apply; it's just as it is now. Secondly,

not to put too fine a point on it, but with the market we have now, a lot of

people do what I guess we might call flipping. They've never actually lived in

the place, but they resell it. It just covers the first purchase — I guess

that's the clearest way to put it — of a condo or of a new home.

Hon. G.

Collins: We are in a bizarre period of time right now. I was just sort of

joking here that people go out for a latte and on the way to Starbucks stop and

buy a condominium. It's sort of like the Soviet Union. You walk down the street,

and there's a big lineup. Get in line, because you don't know what they're

selling. You may want some. It's sort of a weird time right now. I've driven by

a few of the lineups in the last couple of months — not my constituency but in

the member for Vancouver-Burrard's constituency, in particular.

The act

standardizes it to be seven days. There was different number, depending on the

product, previously. Now it's seven for everything, so it's clear. It's not less

than seven, so even if you write in the contract, "I waive it," it

doesn't work. It's seven — right?

However,

apparently you can agree to make it longer if you wanted. If the developer

agrees and you agree, you could make it longer. Seven is a pretty good number,

but maybe there's a reason why you might need it longer. Maybe your spouse is

off on safari in Africa or is one of those medical researchers down at the South

Pole. I don't know the reason why you might want it longer. But it's no shorter

than seven days, and it applies to the first purchase of the new product.

This is

with developers. If I go and get in that lineup while I'm on my way to get a

drink and I buy one, and if I turn around because I got the last one and there

are three people behind me who want it and I flip it to them for the price of

the coffee, then there is no rescission agreement or period between me and them.

That's pretty extreme, but it gives you a sense of the nature of it.

[1550]

Sultan:

Section 21 says: "

(1) A purchaser does not have a right of

rescission under this

section (

a) if the purchaser is not entitled to receive a

disclosure statement under this Act…." When would a person not be

entitled to receive a disclosure statement but nevertheless have, perhaps, some

imagined right of rescission?

[ Page 11028 ]

Hon. G.

Collins: If I come back to the line of questioning we had with the member

for Richmond Centre — if I remember correctly — an example would be if

somebody were in a subdivision lot within a municipality, in which case that

would have an exemption. It would not apply under this act. Previously, there

was not a rescission period under this act. We haven't added one. The current

practice would be in place in that the municipality is exempt. That subdivision

lot would not have the seven-day rescission period, because it doesn't fall

within this act and wasn't previously part of it either.

Sultan: Continuing with

section 21, there's a reference here, in fact, to

the disclosure statement. The disclosure statement is defined in the act as a

statement that discloses material facts in accordance with

section 14(2). If you

go to

section 14(2), you discover that a disclosure statement must, without

misrepresentation, plainly disclose all material facts. I guess this does beg

the question: what's a material fact? I think it's a very practical question, in

the sense that it would helpful to people making use of this act to understand

the mindset of the ministry and the minister in framing these words. For

example, is the fact that a condominium was previously used as a grow op a

material fact, in the opinion of the officials and the minister present?

Hon. G.

Collins: Given that this act deals with new developments, unless the

contractor was running the grow op while they were constructing the project,

it's unlikely there would be one. I know that's just an example the member is

raising.

If you go

back to

part 1,

section 1, and you go to page 5 of the bill, you'll find in the

definitions that "material fact" is actually defined. There's actually

a listing of some of the…. There are four points there. The last one is other

prescribed matters. We could add to that as well. If (a), (

b) and (

c) don't

cover it and we decide there's a problem and we need to add to it, then we could

do that.

Sultan: I presume the same reply would apply to termites and leaks in the

roof.

Hon. G.

Collins: Again, it's new development, so they would be very fast termites,

or it would be a very poorly constructed roof, but it wouldn't be the first

time.

Interjection.

Hon. G.

Collins: Or a very wet season. I don't know.

If you look

at "material fact," it says: "…means, in relation to a

development unit or development property, any of the following: (

a) a fact, or a

proposal to do something, that affects, or could reasonably be expected to

affect, the value, price, or use of the development unit or development

property."

[1555]

I suppose

the construction of a new highway off the back yard might be an example of that.

Whether it's a tunnel or not, it might be part of it. So "(

b) the identity

of the developer; (

c) the appointment, in respect of the developer, of a

receiver, liquidator or trustee in bankruptcy, or other similar person acting

under the authority of a court; (

d) any other prescribed matter." It's

really pretty much what it sounds like. It needs to have a material impact on

the price or the value of what you're buying.

Sultan: Since I would gauge that many of the officials who assisted in

drafting this new act also worked on the recently adopted new B.C. Securities

Act, and since I suppose one could make the case that a statement of disclosure

for a real estate project is not unlike a security prospectus perhaps, are there

some similarities here? And are we living up to the same degree of rigour and

disclosure that might apply to financial securities?

Hon. G.

Collins:

Section 1 of Bill 38, which is the Securities Act — which I think

passed through the House this morning in committee stage and third reading —

lists "material information." It's not exactly the same word, but

they're trying to do similar things. It says: "…means information

relating to the business, operations or securities of an issuer that would

reasonably be expected to significantly affect the value or market price of the

issuer or a security of the issuer." In here you can see we're trying to do

similar things. There's a bit more detail. There's the identity of the

developer, bankruptcy trustee, etc. I suppose that could be assumed to be rolled

into that. This says: "…that affects, or could reasonably be expected to

affect…." In one it's "significantly affect," and in this one

it's "affect or reasonably be expected to affect."

I don't

know. Maybe it's a wash. The goal is the same: to try and provide information to

the purchaser so that they have some sense of what they're purchasing. They are

different products and can be different in many other ways, as the member is

aware. Securities can be quite different. When you're buying here, you're buying

real property, and you can actually see it. It's tangible, and you know where it

is. Anyway, I think the effort is the same. Different words are used, but we're

trying to protect the consumer in similar ways.

Hayer: Under this

section it says that the purchaser can rescind with seven

days of written notice. How can this notice be delivered? I think it's going to

be in regulation. What different ways or methods are you looking at for how the

purchaser can deliver this notice? You know, if they're out of town or after

they have purchased…. Sometimes we have people living out of the location.

Hon. G.

Collins: Subsection (4) says it needs to be done by regulation. That means

that's yet to come. At this point the regulations aren't drafted. Aren't com-

[ Page 11029 ]

pleted — let me put it that way. It's expected at this point that you would

need to provide written notice to the business address of the developer — or

to the brokerage if they were using a brokerage — in order to do that. That's

what we're looking at, at this point. But if the member comes across a loophole

there or a better way of doing it, then I'd be thrilled to hear the suggestion.

Or if he hears from somebody who's got a concern or a better way of doing it,

then we'd love to hear that as well.

[1600]

Hayer: Will the purchaser be able to use e-mails or faxes? Or will they have

to use a courier service or a delivery service or postage or any other system?

As technology changes, will there be flexibility available for the purchaser to

use new technology to rescind if they have to?

Hon. G.

Collins: We'll look at that. More and more, electronic transfers —

electronic exchange of information — have more traction under the law, I would

say, so that would certainly be something. These contracts may be done

electronically, sent electronically, and there would be no reason, one would

think, why one couldn't send an e-mail that you could verify came from the

sender that would qualify.

We'll take

that into consideration when we draft the regulations and see if that would be a

proper way. If it could be done in a way that you could be secure and be sure of

it, then maybe that's something we could do. We'll certainly look at it.

Hayer: Under

section 21(6), it says: "…the person must promptly

return the deposit to the purchaser." Does the minister have any idea what

"promptly" is looking at? Is it weeks or a few days or a month?

Sometimes people assume a different definition — just some idea so that people

can understand.

Hon. G.

Collins: Yeah. We don't define every word or everything that we do. When one

puts "reasonable" in there and "promptly" return it, it's

assumed that it's done in a reasonably prompt time. It doesn't have to be done

within five minutes. If you start to get into months, it's probably pretty long.

Maybe you want to do it, and your accountant's away for a couple of days — or

the person who writes the cheque. Then it might take a few days.

I would

think it would need to be reasonable and would have to pass that threshold. If

you're still waiting for it after some period of time that's unsatisfactory to

you, then there are ways you can try and move that along — but promptly.

Everybody understands what's reasonable, and there would have to be a compelling

reason not to do it in a reasonable length of time.

Section 21

approved.

section 22.

B. Kerr:

We have a situation in 22(3)(

b) where we have a right of action for damages

against a developer, a director, a person who consented to be named as a

developer, a person who authorized the filing and the person who signed the

disclosure statement.

Then I just

want to go down to subsection (5). It says: "A person is not liable to a

purchaser under subsection (3) if the person proves that the purchaser had

knowledge of the misrepresentation at the time at which the purchaser received

the disclosure statement." Does the fact that it uses the words "a

person" and leaves out the words "a developer or director" mean

that the director and the developer and, I guess, the person who consents to be

named as a developer would still be liable? I hope you understand my question.

Under

subsection (5), we use the words "a person is not liable." I'm just

wondering if the words "a developer or the director" are intentionally

left out there, meaning that they would still be liable, rather than just using

the word "person."

Hon. G.

Collins: In subsection (5) a person is a broader definition, I would say,

than a director or developer, but a director or developer could be a subclass of

a person. It's a broad definition, and others could fit within that, I think, if

that's what the member is asking.

[1605]

B. Kerr:

Just to clarify, then. We're saying that nobody is liable to a purchaser if the

purchaser was aware of the misrepresentation before they signed the agreement.

Hon. G.

Collins: Subsection (5) is a broad exemption from the liability. It is with

regard to if the purchaser, the developer and their representatives all know

what they're dealing with and they enter into that agreement, there's no

liability because they knew what they were doing.

However, if

one goes down to subsection (6), it talks about an individual. If an individual

within the company was doing their due diligence, acting in their best interests

and putting forward what they thought was true, they could be exempted from the

liability, but the corporation itself would not. Does that answer the member's

question?

B. Kerr:

Thank you for that. I was leading right into that in subsection (6). I'll move

right on, then, to subsection (9), and I want to follow up with the question

that my colleague from Richmond Centre had.

subsection (9) it says that you've got two years after the time you recognize

that there's been a misrepresentation. I've got two questions. If it takes 20

years — possibly a latent defect in there where the work wasn't done — would

you still be able to have the two years after you discover that to file a claim

of damages?

The second

one is: would this succeed to a subsequent purchaser, this particular section?

Would this go to a subsequent purchaser, or is it just for the purchaser at the

time?

[ Page 11030 ]

Hon. G.

Collins: First of all, to answer the last question, resales aren't covered.

These are only for the first transaction. But yeah, for example, if you were to

find out 20 years from now that the developer stuck urea formaldehyde in your

basement wall or something and you didn't find it until 20 years from now and

you had to rip it all out…. That might not be the best example, but maybe that

would work. It's from the time you find out. If you discover that, you've got

time to take action. That could be any length of time.

Hon. K.

Falcon: I'd like leave to make an introduction.

Leave

granted.

Introductions by Members

Hon. K.

Falcon: Mr. Chair and hon. members, I'm pleased to say that today in the

House we are joined by a class of grade 5 students from Surrey Centre

Elementary. This is half the class, I imagine. I had the pleasure of meeting

them along with their teacher, Ms. Scarlett. They are here along with a bunch of

the parents. I would ask the House to please recognize them and to understand

that Surrey Centre Elementary is one of the finest schools in Cloverdale, if not

the province.

Debate Continued

Sultan: This question may be grossly out of sequence, but I've been

pondering the very thoughtful comments on termites and leaks given to us by the

Finance minister. It occurred to me that perhaps some people picking up this new

act would not be aware that in fact it pertains only to new developments, as I

understand his response. I was reading the

preamble and the definition of

development units, etc. Is it not conceivable that some people might interpret

this act as pertaining to existing properties as well?

Hon. G.

Collins: It's difficult for me to know what people might draw from the

legislation, although I think the title tries to steer them in the right

direction. It's called the Real Estate Development Marketing Act. I don't know

what more I can do about that. In the definition sections and in the application

section of

part 1, it does talk about what this means — what we're talking

about. Certainly, if one sort of glances through that, you can get a sense of

what the act is trying to deal with.

[1610]

I suppose

people could misinterpret the function of the act and come to different

conclusions. That's always one of the risks of even legislators reading

legislation and understanding what it means, let alone the general public. I

suppose that's what lawyers are for ultimately. Certainly, I would hope that

we're clear enough in the title and in the gist of the act, when you get into it

fairly quickly, that it doesn't apply to existing legislation.

I expect,

though, in the case of the issue raised by the member for Malahat–Juan de

Fuca, that if you…. You could easily, 20 years later, discover that problem

with your home and not be the original purchaser and find that you don't have

the recourse, because it's sold in between. That's just how the system works. I

guess we've tried as best we can. I think from a plain reading of the act, one

can understand it deals with new developments and not pre-existing ones. I hope

people understand that.

Sections 22

to 36 inclusive approved.

section

Sultan: This is the

section of the act, division 3,

section 37, laying out

appeals to the financial services tribunal. What is the financial services

tribunal?

Hon. G.

Collins: The member will recall that as part of the core review process, the

commercial appeals process was done away with — was eliminated. In its place,

in order to try and deal with possible small to medium-sized conflicts that

people perhaps don't want to take to court, the government put in place the

financial services tribunal to try and deal with those. It's much smaller, much

more focused. Government is putting that into place. It will be an avenue to

which somebody could take a concern as prescribed under this

section of the act

and hopefully have it resolved to their satisfaction. It's just a cheaper way,

rather than going to court, of resolving a dispute.

Sultan: I take it from the minister's reply that the financial services

tribunal exists today and is operational.

Hon. G.

Collins: That legislation setting up that tribunal…. That tribunal we

anticipate being set up in the early summer — hopefully June. We're working

towards it. It's in place. It deals with provisions under this act, the Real

Estate Act, the Financial Institutions Act, the Credit Union Act — those types

of financial pieces of legislation. We anticipate it being up and running

relatively shortly. I think we've already identified people to sit on the

tribunal through the board and commission resourcing process. It's well

advanced, and we hope to have it up and operating very soon.

Sultan: What would be the relationship between the financial services

tribunal and — if I got the name straight — the Financial Institutions

Commission?

Hon. G.

Collins: The chair of the Financial Institutions Commission is also the

chair of the tribunal. Beyond that, the other members of the tribunal will be

completely outside that and will be and have been sourced for their broad range

of skills and experiences that they can bring to this table. It's not like we

just went and picked somebody off the street. We've actu-

[ Page 11031 ]

ally tried to search out people with a set of skills and familiarity with

this legislation and these various business practices that they will be acting

as members of the tribunal for, so that they can make decisions and resolve

disputes. They are separate bodies other than the fact that the chair is the

same.

[1615]

Sultan: Would it be fair to assume that the proposed members of this

tribunal would be citizens who are perhaps holding down other jobs or doing this

on a part-time basis for a small stipend, or would they actually be full-time

employees of the tribunal?

Hon. G.

Collins: As the member is well aware, there are people with great CVs who

hold down public office for a very small stipend and do it more than full-time.

We are looking for people who have a set of skills. It will, we anticipate, be a

part-time position. We hope it's not used to great extent. We don't believe it

will need to be, but it's there and available. We anticipate they'll be

part-time positions. People may have other jobs, other things they do.

In many

cases, though, this is a perfect position for somebody with a long history in a

particular field of practice who has retired or is semi-retired and is willing

to offer their expertise, experience and service for, as the member mentioned, a

very small stipend. We look for people who are willing to provide some public

service. This is certainly the role they'll play — that of public service.

It's not something anyone could make a living off, I don't think.

Sections 37

to 39 inclusive approved.

section

B. Kerr:

I guess I'm looking at the penalties and piercing the corporate veil. In

section 40 we talk about a "person who commits an offence," and then

we go on and say "(

a) in the case of a corporation" and "(

b) in

the case of an individual." I'm just wondering whether we step back into

the same…. When we talk in terms of a person, do we go back to the definition

under

section 39(3)? It says: "If a developer commits an offence under this

Act, an officer, director, controlling shareholder or partner of the developer

who authorizes, permits or acquiesces…." Would that be the same

definition? Do we pierce the corporate veil in this case for somebody that has

misrepresented?

Hon. G.

Collins: The only difference is that it's hard to put a corporation in jail,

and there is a provision in (

b) in the case of an individual. Otherwise, the

penalties are the same. In the case of an individual, one could imprison them

for a period of not more than two years, either in lieu of a fine or penalty or

in addition to. That's really the only difference in the penalties between the

two. I hope that was the member's question. I didn't hear all of this.

B. Kerr:

That's what I'm getting at. Would the fine just go against the corporation? If

the corporation is ultimately bankrupt or has no money, would they go on to the

directors then?

Hon. G.

Collins: First of all, it's feasible that you could apply a penalty to the

corporation as well as an individual, a director, etc., and put the director in

jail. I mean, it's conceivable that all those things could happen.

B. Kerr:

Okay, that answers my question. As you know, a lot of the development companies

form subsidiaries. The subsidiary has absolutely nothing that does development,

so if anything happens, they can hide behind the protection of the corporate

veil, as we call it, and not have to pay out anything.

This

morning we passed

an act, the Securities Act. In the Securities Act there were

fines of up to a million dollars, and in real estate there can be some pretty

heavy numbers. I'm looking at this, and my first question is: why are the

maximum fines so low? Why are we keeping them so low? Second, wouldn't they be

better put in regulation where they could be changed as circumstances dictate as

opposed to being locked into the act?

Hon. G.

Collins: The $100,000 fine — it's a penalty — is there currently.

However, we have added an additional penalty for subsequent offences, which

could go up to $200,000, as well as a jail term. It's a fair comment, I think,

for the member to suggest that it could be in regulation, and then one could

adjust it accordingly. Those are pretty significant amounts. I mean, I know that

in the case of securities, it's $1 million, but the opportunity for securities

violations could be an awful lot higher perhaps.

[1620]

There could

be an example of a large development, I suppose, where one could have a big

problem. For the most part, I think these are up-to amounts. I don't think you

would use a million-dollar penalty in the Securities Act unless it were a pretty

significant violation of the act that somebody had perpetrated.

I think

these are reasonable, but it is a valid point for the member to make that one

could have put them in regulation and then adjusted them accordingly. This is

the way we chose. It's probably arbitrary — and just the fact it was done that

way previously.

B. Kerr:

I guess my comment is that we've locked ourselves into what could…. If there

was a huge misrepresentation or something, we haven't allowed to be able to

really go after somebody on the second offence. If that becomes their method of

doing business, $200,000 could just end up being a cost of doing business.

That's the maximum for subsequent events, and a person could be developing this

apartment block, then another apartment block and another apartment block —

each under a separate company. Maybe it's a first offence under each company,

and we've sort of locked

[ Page 11032 ]

ourselves into what could be a cost of doing business for a developer —

albeit a high cost, but nonetheless just a cost of doing business.

Hon. G.

Collins: We did canvass and look around in other legislation as well as

other provinces to see what the amounts were. This is not wildly out of line in

any way, shape or form. In fact, we're sort of there.

Saskatchewan

is $10,000 for a first offence, $20,000 for a second offence, $20,000 for

further offences and $50,000 maximum for a corporation. That's Saskatchewan. In

Ontario it's $50,000 for an individual and $250,000 for a corporation. We're not

wildly out of whack. Manitoba has a higher maximum. They go up to $4,000. In

Alberta it's $25,000.

I think

these are reasonable amounts. If somebody really was very bad and perpetrated a

fraud, then there's a criminal procedure that could fall into place as well, so

this isn't necessarily the limit of the penalties that could be imposed on

somebody. There are other remedies as well.

B. Kerr:

I guess that would be the real serious one. The imprisonment would be the real

catch-all for somebody that was a bad actor.

Mr. Chair,

those are all the questions I have on this act. Thank you very much to the

minister for being forthright in his answers.

Sultan: I have a final question and then perhaps some concluding remarks

which might close the debate. Standing back and looking at this statute, I

believe one can reach the conclusion that it, in fact, will substantially — in

the marketing of new and perhaps even not-so-new real estate developments —

reduce risk, reduce transaction costs and shorten time periods. At least, those

are the goals that we've seen this minister and this ministry produce in the

past with respect to important financial legislation.

Comparing

the new act with the old, is it possible to give the new users of the act some

assurance that, in fact, risk will be reduced, costs will be reduced and time

will be shortened?

[1625]

Hon. G.

Collins: That's really the whole goal behind this rewriting. This is

legislation that hasn't had a comprehensive rewrite for over 40 years, I think.

It's faster. People can engage in pre-sales earlier. It's more flexible with

regard to access to deposit moneys, and that can help to reduce the transaction

costs on developments. From the consumer point of view, we've taken a lot of the

superintendent's policy that's been in practice and evolved over time and

codified it, stuck it in legislation, so there's some certainty. People can see

it, and it's clearly stated.

I think

this is a major improvement. I think those people who engage in these — both

from the purchaser as well as from the developer side — will find this easy to

work with, will find it clear, practical and flexible, and will be comfortable

with the level of security and protection that they're granted. It's the kind of

change to legislation that, quite frankly, should happen more frequently.

I've

probably said this in the House before; I know I've said it publicly before. One

of the real benefits of the deregulation initiative of government has been to

force government to look at legislation like this, update it, put it in a

position where it's more results-based and actually ask questions about the

burden that's placed on those people who use legislation or fall under the

purview of legislation. I hope that over the years, it's not another 45 years

before this legislation is updated again. In fact, I hope it's updated on a more

frequent basis. That's always at the discretion of what's on government's agenda

and how quickly the House deals with legislation when it does come forward.

We had a

good debate here today and examined some of the sections in detail. That's good

to do that, because I think it clarifies what's in the legislation. In future I

hope that as little bits, little amendments, of legislation come forward in

time, the House can deal with them in a relatively expeditious way. You're able

to then bring this legislation before the House more frequently, update it more

frequently — not just this, but other legislation.

I think

we've achieved a great deal here. Certainly, those that work with it and are out

there purchasing homes — new developments — will find it works better for

them. I thank the members for their comments, and I notice the member from West

Vancouver–Seymour may have an additional question. I always eagerly await

them.

The

Chair: The member for North Vancouver–Seymour.

Jarvis: Yes, I'm glad you got that right, Mr. Chair.

I just

wanted to ask the minister…. I'm sorry; I've been busy on some other meetings,

so I wasn't sure whether the question was answered. Basically, most of the

realtors I've talked to are happy with the new act and all the rest of it. The

only question and concern that ever came up was — and maybe I'd like to get it

down in writing — how the rules and regulations were going to appear and if

there would be any consultation by the minister with the members of the

industry.

Hon. G.

Collins: There are actually two pieces of legislation before the House right

now. This is the Real Estate Development Marketing Act, and it deals with the

marketing of new developments. The other one is the real estate act which deals

with the professions, etc., and previously both of those were in one act. We're

rewriting that and separating them into two pieces of legislation. The one we're

dealing with here today is the development act. We will be having a discussion

about the other act probably in the next day or so — the Real Estate Services

Act.

Certainly,

I know from the realtors that they're very pleased with the changes that are

coming before the

[ Page 11033 ]

House. There was previously in that act a series of exemptions for

individuals and professions, so they didn't need to comply with this act in

order to do the work that they do in their profession. Auctioneers spring to

mind. Lawyers and notaries have been looking for an exemption — accountants

and other people who have to transact in real estate as part of their profession

but aren't really in the business of real estate. Government had tried to

resolve all of the issues with regard to those exemptions.

There was a

conflict between the legal profession and the realtors from lawyers who would

like, as a big part of their business, to engage in the sale of real estate —

not just as a course of doing the financing or dealing with estates but actually

getting out there and selling real estate. The problem was that they were

bumping up against the realtors. One could say that it's a fight over market

share or a fight over business.

[1630]

I think the

lawyers made good points. They said: "We already have some of the strictest

codes of conduct under the Law Society, and we're insured. We have a lot of

training, a legal degree, etc. We should be able to do this, and certainly

there's no risk to consumers." I think they make a valid point in that

regard. I don't think there's a huge risk to consumers.

Realtors

are saying: "Well, we're the realtors. This is what we do. This is our

profession. This is our market share. We want to be able to do it, and other

people shouldn't be coming in and doing that."

We have the

same issue with optometrists and opticians and ophthalmologists. It happens a

lot in areas where we regulate. What we tried to do was send those parties away

on their own to try and resolve that dispute. They did come back with a

resolution, which we've tried to put in place. As we've done in other acts —

like the Securities Act, which passed through the House this morning — and

other provisions, we've tried to take those exemptions out of the act and

provide for those exemptions in regulations.

That's our

intent with the Real Estate Services Act as well. We've heard representations

from others that they'd like to have a

part in drafting those regulations. I'm

happy to have anybody give us their submissions or their comments or

suggestions. It's fair to say that the legal profession would rather see their

exemption in the act, and they have made representations to me as late as

yesterday morning. Government is trying to come to a conclusion, a determination

as to what we do with that — whether we put it in the act or whether we leave

it in regulations, as was the original intent. Certainly, if it's part of the

regulation, then I would hope that the various professions that have exemptions

would be able to offer to us their view on how those regulations might work.

The goal

here is how to put a real estate act in place that works for consumers, for the

people of British Columbia. We have to somehow get past the positions of the

various parties, the various professions, and their goals and take into

consideration their concerns but do what's right for British Columbians. Any

input we have from those professions, we'd be pleased to have. We'll try and do

the right thing, but we have not concluded the final decision on that.

Sultan: If I just may make some concluding remarks. I think this new act is

representative of the kind of nuts-and-bolts legislation that is not as

glamorous or headline-grabbing as, say, the Olympic project or a new bridge over

the Fraser River but nevertheless affects hundreds of thousands of people and

the lives of many, many persons on both sides of these transactions. I think

it's a tribute to this ministry, taking the time and energy in a very busy

schedule to try and clean up some ancient legislation that really was no longer

doing the job.

As I gauge

the legislation, it strikes a very fair balance between the rights and interests

of consumers and the liberating elements so that developers can get on with

providing the housing and other infrastructure that British Columbia needs,

since the population growth has resumed and the building boom is in full swing.

This sector

of industry is probably the single largest asset in the lives of ordinary people

in British Columbia. One's equity in a home or a condominium is a huge fraction

of the net worth of British Columbians. Getting the marketing arrangements by

which these units are bought and sold and governing the marketing practices, I

think, is vitally important to the financial health of the consumer. Again,

particularly given the overheated market — I guess some of us would hope it

might last forever; we know it won't — it's particularly timely that the

legislation would be introduced to make sure that disreputable practices are not

engaged in, that there's full disclosure and transparency, and that both

consumers and developers know exactly what the rules of the game are.

I again

compliment the minister and his officials for bringing in legislation which

brings a very complex subject up to date, which is timely and which will be for

the benefit of all British Columbians.

Hon. G.

Collins: I thank the member for his comments.

I want also

to thank the staff people who have worked long, long hours on this. It is a

major progression, I think, in the legislation. They've also, obviously, engaged

in a lot of work on the Real Estate Services Act, and we'll get to that. I do

want to thank them for their effort, their energy and their time, as well as the

countless hours of consultation that have gone on with the various third

parties, and their assistance in helping to put in place a piece of legislation

that actually works. I thank the members for their questions as well.

[1635]

Hon. K.

Falcon: Mr. Chair, I would like to seek leave to make an introduction.

Leave

granted.

[ Page 11034 ]

Introductions by Members

Hon. K.

Falcon: Today in the precinct we are joined by 25 additional students who

are also from Surrey Centre Elementary School in Cloverdale. They are joined by

their teacher, Mr. Tito, and several other parents. I would ask that the members

please make them welcome.

Debate Continued

Sections 40

to 62 inclusive approved.

Title

approved.

Hon. G.

Collins: I move the committee rise and report the bill complete without

amendment.

Motion

approved.

The

committee rose at 4:36 p.m.

The House

resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

Bill 42,

Real Estate Development Marketing Act, reported complete without amendment, read

a third time and passed.

Hon. G.

Collins: Mr. Speaker, I call Committee of the Whole for consideration of

Bill 46.

Committee of the Whole House

HIGHWAY (INDUSTRIAL)

AMENDMENT ACT, 2004

The House

in Committee of the Whole (Section

B) on Bill 46; L. Stephens in the chair.

The

committee met at 4:40 p.m.

Section 1

approved.

On

section

MacKay: Looking at Bill 46 and in particular at

section 2, I'm noticing that

we're adding the following definition, and that is the definition of a highway.

Could the minister tell me: is that new, or is it a change to the previous

Highway (Industrial) Act — the new definition of a highway?

Hon. K.

Falcon: One of the problems we have is that today a highway is just

described in legislation as a public road. What we're doing is changing the

definition to more appropriately describe it as a public highway.

MacKay: It begs the question then, because we're dealing with the new

Industrial Roads Act: why is it necessary to include the definition of a highway

so that it has the same meaning as in the Highway Act? If we're dealing with an

industrial road, why are we including one more definition of a highway under the

Industrial Roads Act?

Hon. K.

Falcon: In order to appropriately describe an industrial road, you also have

to describe what it isn't, and it is not a highway. You'll see that, actually,

in the section, where it excludes what it isn't. Therefore, it's important that

we do appropriately define what a highway is and clarify that.

MacKay: Looking at the previous Highway (Industrial) Act that will be

amended on passage of this new Bill 46, I notice the definition of a highway is

not included in there. It begs the question: how did we manage under the

previous act without the definition of a highway? And why is it now necessary to

include the new definition of a highway under Bill 46, which will change and add

to a rather complicated definition

section of what a highway, a road, a forestry

road and an industrial road are?

[1645]

Hon. K.

Falcon: Essentially, what happened was that 50 years ago, when this

legislation was written, the terms that were utilized back then were a public

road, street, lane or other public communication. That was the terminology used

50 years ago. So 50 years later what we're doing is providing some clarity

around that. We want to make sure that the Highway (Industrial) Amendment Act is

not to be confused with highways. Therefore, by providing clarity around the

definition of highway, we can make it clear that we are not talking about

industrial roads, for example.

MacKay: Just to touch on the minister's statement about providing clarity to

what an industrial road is. I have to remind the minister that I spent 28 years

in law enforcement. If I were still in the field of law enforcement, which I

have been out of for some time now, and I had to look at an investigation of a

motor vehicle accident or under what specific act I should proceed with on a

charge…. We have certainly created a bit of a quagmire here.

I'm

confused about why we have to add a highway to an industrial road. We talk about

industrial roads. We talk about the definition of a highway. Then we also go on

to talk about what a highway does not include, and it gets rather confusing. It

may not be confusing for the people that write the legislation, but from a law

enforcement side, it does create some problems. I guess that's the reason I ask

why it is that now we're including the definition of a highway to say what is

not an industrial road.

Hon. K.

Falcon: Really, all we're saying is that what we're excluding under the

definition of industrial roads

[ Page 11035 ]

are highways. It's just that 50 years ago they didn't call it a highway. They

called it a public road or street. So all we're doing is taking the old sentence

that used to be there, which said "public road" or "street,"

and replacing it with the term "highway" to provide more clarity and

more understanding in terms of what people now call public roads, which are

highways.

I realize

all of this can sound enormously fascinating to the folks out there listening.

It's part of our effort, when we're streamlining this, to try and write it in

plain language. That erases a lot of the confusion you're actually talking about

and makes it easier for the public out there to understand what government is

talking about — when they talk about an industrial road, for example. They can

easily look under the new rewritten

section 2 and see, for example, that:

"Oh, I see. That's not a highway. It excludes a highway under that

definition." Hopefully, that's helpful.

[1650]

MacKay: When we move down to subsection (b), when we talk about an

industrial road, we've left the highway definition and we're now talking about

an industrial road. That means "a road on Crown or private land used

primarily for transportation by motor vehicle of…." And then we go into

subsection (a), which is natural resources.

Does the

definition of a highway include an industrial road?

Hon. K.

Falcon: No, it would not. The exact reverse of that question is demonstrated

there by the definition of "industrial road," which appropriately, as

you pointed out, under (

a) and (

b) describes what an industrial road is and then

below that says: "…and includes all bridges, wharves, log dumps and works

forming a part of the road, but does not include (

c) a highway."

MacKay: All right. Just to go back to the industrial road, it's a road that

is used primarily for the transportation of natural resources. I don't know if

the minister is familiar with the Eskay Creek road which services the mine of

Eskay Creek. That, to me, comes under the industrial road definition because

it's used primarily for the transportation of the ore concentrate from Eskay

Creek. Is that portion of the road determined to be an industrial road?

Hon. K.

Falcon: I think when you read the entire

section in its totality, then you

sort of get a better appreciation of it. Reading the top half of the section,

you would rise to the natural conclusion that the member correctly did — or

actually incorrectly did — that if you're moving natural resources along a

road, then by definition it must be an industrial road. Actually, if you read

through and complete that right down to the very bottom of

section 2, then you

will realize that after you get through the exclusions, that's not the case.

Your question is: because you are moving natural resources along what is

considered a highway, does that make it de facto an industrial road? The answer

is no.

MacKay: Well, I'm really confused now, minister, because we're talking about

the definition of an industrial road. Reading the definition of industrial road,

it means "a road on Crown or private land used primarily for transportation

by motor vehicle of (

a) natural resources." A natural resource would be the

ore concentrate coming from Eskay Creek. I understand that once it hits Highway

37 and starts travelling south, we're now on a public highway. But that

industrial road that was developed and that services the Eskay Creek mine….

Are you saying now that it is not an industrial road? If not, what definition

would that private road that has a gate on it come under?

[1655]

Hon. K.

Falcon: I'll try it from a different angle. I realize that on the surface

I'm not in any way trying to mitigate the seriousness and importance of the

question. This answer will hopefully frame it appropriately. It is an industrial

road, exactly as you described, as long as that road is not a highway, like the

one you described, or as long as that road is not a Forest Service road as

defined or as long as it's not a petroleum development road, which are the other

specific sections under other specific acts that define what a road is. If it's

not any of those, which are identified from subsection (

c) on…. In fact, in

subsection (

e) you'll see the reference to the Petroleum and Natural Gas Act. As

long it's not a highway, as long as it's not a road as defined under the

Petroleum and Natural Gas Act or under the Forest Service road act, then it is

by definition an industrial road.

MacKay: This is where I have to talk about the difficulty in understanding

what class of road that is. Now, as a previous law enforcement personnel, I

would have trouble understanding. When I read the definition of an industrial

road, I would assume that that Eskay Creek road, which is a gated road and

services the Eskay Creek mine only, would be an industrial road because it's

used primarily for the transportation of an ore concentrate. I don't know if

it's a Forest Service road. It may very well be.

certainly creates some problems from an enforcement perspective when we have to

do the research to find out if in fact it's a Forest Service road or an

industrial road. My

interpretation is for meeting the industrial road…. From

the fact that it's used primarily for the transportation of a natural resource,

it should be an industrial road.

I am

somewhat confused, as you can probably tell from the questions, minister.

Hon. K.

Falcon: A short answer to your example about the Eskay Creek road with a

gate is: you're right. That would be an industrial road. It does, of course,

bring along the question of the example of your experience as a police officer

and others that may not understand this distinction. That always has been a

challenge. One of the reasons we brought in this act to streamline and try and

clarify some of these terms in

[ Page 11036 ]

plain language is so that at the end of the day, somebody will actually be

able to understand the difference between a petroleum development road, an

industrial road, a highway and a Forest Service road. In large part, that will

be experience that will only come to a police officer or somebody else, frankly,

after having spent years in the field and starting to get an appreciation and an

understanding of what distinction there is on those different roads.

[1700]

I'm not

going to pretend that overnight this has turned on a light that will make that

easier now for all those police officers out there to understand what can

sometimes appear to be a fine distinction. But at least when they do a quick

referral to this, hopefully they will have a clearer sense as to what an

industrial road actually is.

MacKay: That concludes my questions on

section 2, but I have further

questions later on.

Trumper: I'm not sure whether this is the right place to be asking these

questions, because I'm not quite sure of the designations of the roads when

we're going through the

definitions. To give an exact example which I know you

are aware of, there is a route that goes from Port Renfrew to Lake Cowichan and

from Lake Cowichan up to Port Alberni. It's what is known as a logging road. Is

that a Forestry road? I understand there are different designations on that

road, so I'm unclear.

Hon. K.

Falcon: The road of which you speak, I'm pretty certain, is a private forest

road, which would be captured under the definition of an industrial road.

Trumper: It's my understanding that there are different designations on that

access, and I do know that the ministry of highways does pay for some upkeep on

a certain part of the road. I believe there is a contract with Weyerhaeuser for

part of it. I guess the issue I just want to be clear on is that this is an

industrial road, but it also provides access to about three communities on the

west coast that have no other access except by water or helicopter, as a matter

of fact. By it being an industrial road per se, how does that cover the public

traffic that uses those particular roads?

Hon. K.

Falcon: Yes, we have contributed to upkeep on that road, because as the

member correctly points out, that is a road that sees some portion of the

traffic being utilized there as public traffic. She's correct in that

assessment.

The other

thing that I would really want to emphasize, which I think was the second part

of the member's question, is that there is nothing in this act which alters any

of the public's ability to use and continue to use whatever access they've had

prior to and post the passage of this bill on industrial roads.

[1705]

Trumper: Thank you for that. I think the question I would like to ask is….

This is designated as an industrial road. So is there anything in the act which

somehow would be able to…? If in the long term, down the road in the planning,

we are going to make that — as there is a hope by the people on Vancouver

Island — another access for Vancouver Island, because as a circle route….

I'm looking at that for tourism. Would it change the definition of that road if

it were included in the highway corridors?

Hon. K.

Falcon: The answer to that question largely depends on how far we as a

government wanted to go in terms of deciding what kind of circle route we wanted

to have. For example, as a measure we could work with the industrial road

administrator and say: "Okay, let's get some signage and do some things

there to make that existing industrial road part of a circle route, largely in

its existing form, with some signage."

If — what

I think the member might have been driving at — we were to decide that it was

going to be an alternative route that we wanted to