Manitoba Hansard — 4 March 1969 (Sitting 4, 28th Legislature, 3rd Session)

28-3-4

Manitoba — Debates (Hansard)

THE LEGISLATIVE ASSEMBLY OF MANITOBA 2:30 o'clock, Tuesday, March 4, 1969 Opening Prayer by Mr. Speaker MR . SPEAKER: Presenting Petitions Reading and Receiving Petitions Presenting Reports by Standing and Special Committees 41 MR . WILLIAM HO MER HAMTI.,TON (Dufferin): Mr. Speaker, I beg to present the report of the Special Committee on the Sale and Use of Farm Machinery. MR . CLERK: Your Special Committee on Sale and Use of Farm Machinery begs leave to present the following as their report.

Your Special Committee on Sale and Use of Farm Machinery appointed on the 25th day of May, 1968, at the Second Session of the Twenty-eighth Legislature, met on the 21st day of October, 1968, on the 18th and 19th days 'Jf November, 1968, on the 9th day of December; 1968, and on the 17th day of February, 1969. Immediately after the prorogation of the Second Session of the Twenty-eighth Legislature, your Committee met and appointed Harry P. Shewman as Chairman. Mr. Hamilton was elected Chairman to replace the late Harry P. Shewman.

Your Committee visited the Versatile Manufacturing Ltd. '\ Your Committee received presentations from the following Associations or interested parties with respect to artificial insemination. 1. Independent Breeders Association- Mr. Keeley 2. Manitoba Aberdeen Angus Association - Clayton Canning 3. Manitoba Stock Growers Association - Ross Mitchell 4. Herdbuilders Incorporated - Dr. K. Robson 5. Manitoba Pool Elevators 6. Manitoba Department of Agriculture- A. J. Church 7. Brandon Milk Producers Association- Keith Campbell 8. Herdbuilders Incorporated - Vern McFarlane 9. American Breeders' Service- Mr.

Jim Clark 10. Dairy Cattle Breeders' Association- Mr. Ray Chandler 11. Ontario Association of Animal Breeders- Mr. Roy Snyder 12. Canada Department of Agriculture- Dr. J. Andrich 13. Manitoba Ayrshire Breeders' Association- Mr. G. Scheach 14. Manitoba Aberdeen Angus Association- Mr. Clayton Canning 15. Independent Breeders' Association- Mr. Vie Lund 16. Winnipeg District Milk Producers' Co-operative Ltd. - Mr. H. Holtmann 17. Herdbuilders' Technicians - Mr. Jerry Bowes 18. Hereford Association- Mr. Bob Kerr 19. Holstein Breeders' Association- Mr. L. Nicholson 20. Shorthorn Breeders' Association- Mr. C. S.

Thomas 21. Mr. L. V. Robson- Private Brief 22. Manitoba Charolais Association- Mr. C. Geddes 23. Manitoba Beef Cattle and Performance Association- Mr. Donn Mitchell 24. Dr. K. Robson- Private Brief Your Committee recommends that a knowledgeable individual be invited to make a study of artificial insemination in MJ.nitoba and would be made privy to the information before this Committee.

Your Committee has not completed its work and is awaiting the final report of the Barber Commission and recommends that it be reconstituted with the same powers as set out in the resolution passed in the House on the 25th day of May, 1968. All of which is respectfully submitted. MR . HAMTI.,TON: Mr. Speaker, I beg to move, seconded by the Honourable Member from Rock Lake, that the report of the Committee be received. MR . SPEAKER presented the motion and after a voice vote declared the motion carried .. HONOURABLE STERLING R. LYON, Q. C. (Attorney- General) (Fort Garry): Mr.

Speaker, I beg to present the report of the Special Committee on Law Revision. MR . SPEAKER: Order please. Would the honourable members please retain their seats while the Chair is being addressed.

42 March 4, 1969 MR . CLERK: Your Special Committee on Law Revision begs leave to present the follow ing as their report. Your Special Committee of the Legislature appointed on the 24th day of May, 1968 at the Second Session of the 28th Legislature for the purpose of examining and approving drafts of Statutes, consolidated or revised, met on the 5th of November, 1968 and appointed Honourable Mr. Lyon as Chairman, and the quorum was set at four members. The Committee also met on November 6th and November 25th. The Committee examined 219 Statutes, which were approved.

This left some Statutes still to be considered. The Revising Officer reported that the revision of a few of these was not completed. In other cases files were in the hands of persons preparing the indices. Your Special Committee still has a few Statutes to review and it therefore recommends that it be reconstituted with the same personnel and the same terms and conditions under which it was originally established. All of which is respectfully submitted. MR . LYON: I move, seconded by the Hon. the Provincial Treasurer, that the report of the committee be received. MR .

SPEAKER presented the motion and after a voice vote declared the motion carried. MR . LYON: Mr. Speaker, I beg to present the report of the Standing Committee on Statutory Regulations and Orders with respect to Manitoba Regulations, and in presenting this report I may say that this report deals with regulations only and this is the report that will r require a motion of concurrence at a later date. There will be a second report dealing with the other matters that were before the committee MR .

CLERK: Your Standing Committee on Statutory Regulations and Orders with respect to Manitoba Regulations begs leave to present the following as their report. Your Standing Committee on Statutory Regulations and Orders appointed on the 25th day of March, 1968 met on the 25th day of October, 1968 and on the 24th day of February, 1969 and considered the regulations tabled in the assembly at the last session, being Manitoba Regula tions 121/67 to 145/67, both inclusive, and 1/68 to 25/68, both inclusive.

Your Committee makes the following comments on, and recommendations with respect to, regulations consid ered by it. 1. Manitoba Regulation 14/67 prescribed forms of bills of lading. In the bills of lading there is reference to conditions on the back thereof. However, the conditions were not printed with the regulations. This appeared to be an oversight. These conditions have now been enacted by Manitoba Regulation 16/69, so that no further action is required. 2. Manitoba Regulation 63/67 sets out provisions respecting collective bargaining pro cedures between The Workmen's Compensation Board and staff.

The regulation was made by The Workmen's Compensation Board. Under The Workmen's Compensation Act the board is given the authority to appoint employees to its staff, but the fixing of salaries, superannuation, conditions, etc., are "subject to the approval of the Lieutenant-Governor-in-Council". Your Committee recommends that this regulation be repealed. 3. Manitoba Regulation 111/67. This regulation deals with bursaries made under the provisions of the old Department of Agriculture Act which was repealed prior to the making of the regulation.

At the time the regulation was made there was no authority in The Department of Agriculture Act to make the regulation. Your Committee recommends that the regulation be repealed. All of which is respectfully submitted. MR . LYON: Mr.· Speaker, I beg to move, seconded by the Honourable Provincial Treasurer that the report of the Standing Committee on Statutory Orders concerning regula tions be received. MR . SPEAKER presented the motion and after a voice vote declared the motion carried. MR . LYON: Mr. Speaker, I beg to present the report of the Standing Committee on Statutory Regulations and Orders.

This report, because of its length, I would suggest that there is agreement in the House that it be printed in full in Hansard - it's a very voluminous report - if that would meet with the satisfaction of the members rather than have the Clerk read it at length at the present time. I would like to present this report. MR . SPEAKER: Agreed? MR . LYON: This report is not required to be concurred in. Your Standing Committee on Statutory Regulations and Orders, appointed on the 25th of

L March 4, 1969 43 (STANDING REPORT cont'd.) .... March, 1968, met on the 25th day of October, 1968, on the 24th day of February and the 25th day of February, 1969. On the 25th day of October, 1968, Hon. Mr. McLean was appointed Chairman. Quorum was set at seven. On February 24th, 1969 Hon. Mr. McLean resigned and Hon. Mr. Lyon was appointed Chairman. Your Committee had before it the proposed Draft Expropriation Act that was referred to it and considered certain other recommendations for expropriation law, attached hereto as

Schedule "A". While your Committee.was not unanimous in adopting all the recommendations and a number of proposals for variation in the recommendations and further recommendations were raised and discussed, your Committee recommends that a new Expropriation Act be introduced based largely on the proposed Draft Expropriation Act referred and varied to conform with the general recommendations, shown in

Schedule "A". Your Committee considered draft proposals for legislation to establish the office of a provincial Ombudsman as submitted to it by the Honourable J. B. Carron, Minister of Con sumer and Corporate Affairs and attached hereto as

Schedule "B". While your Committee was not unanimous in concurring with all the aforesaid proposals, and while other proposals were raised and discussed, your Committee recommends that legis lation to establish a provincial Ombudsman be proceeded with at the next Session of the Legislature. Professor A. E. Braid of the Faculty of Law,. University of Manitoba addressed your Committee and explained the essential points dealt with in the proposed Draft Personal Property Security Act.

While your Committee has not examined the proposed Draft in detail, your Com mittee recommends that legislation along the general lines of the Draft Act be brought forward when feasible. Your Committee has considered the recommendations and comments on the briefs sub mitted on the Draft Consumers' Protection Act as prepared by Messrs. Harold Buchwald, Q. C., Reginald B. Cantiie and Gordon Snider, attached hereto as

Schedule "C". Amendments to the proposals contained in

Schedule "C '.' were discussed and in some cases agreed to. Your Committee recommends that the Draft Act and amendments as reviewed form the basis of legislation to be brought forward as soon as feasible. Your Committee heard comments from the Attorney-General on the matters of Legal Aid and Compensation to Victims of Crime. Your Committee recommends that the government con tinue its review of these matters with a view to enlarging these programmes as and when it becomes financially feasible so to do.

Schedule "A" RECOMMENDATIONS RE PROPOSED EXPROPRIATION ACT 1. The Expropriation Act should govern all expropriations in Manitoba within the jurisdiction of the Legislature, including expropriations by the government and agencies of the government. 2. The Act should contain provisions relating to procedures for expropriation and the rules by which compensation is fixed. 3.

The Act should provide for compensation being paid not only where land is taken but also for injurious affection where land is not taken where damage is done to the land by reason of con struction, not the use, of the works by the expropriating authority. 4. The Act should require that before an expropriation notice or declaration is filed it be approved by a minister, an elected council or an elected board. 5. The expropriation should become effective on the fi ling of proper documents in the Land Titles Office and the date of filing should be the basic date for fixing compensation. 6.

The expropriating authority should be required to give notice to all owners with registered interests as soon as possible and in any case not later than ninety days, or such further period as may be allowed by the court on ex parte application. 7. The expropriating authority should be required to make an offer to the owners with regist ered interests as soon as possible but not in any case later than ninety days after giving notice of expropriation to the owner. 8. Where the owner does not refuse to accept an offer within thirty days of receiving it, he should be deemed to have accepted it.

However, if he refuses to accept the offer within thirty

44 March 4, 1969 (STANDING REPORT cont'd) . . . . days, the owner should be free to accept it at any time thereafter as long as it has not been withdrawn by the expropriating authority. The expropri ating authority should be required to have an offer always open to the owner which can be accepted by him until the compensation is fixed by the court. 9.

The owner should always have the right to demand payment up to. a high percentage of the offer is so far as it relates to land and improvements at any time without prejudicing his right to continue negotiations or to go to arbitration to have the actual amount fixed. 10. The expropriating authority should have the right to obtain possession on reasonable notice and on payment of a hundred per cent of the compensation for land and improvements that they are willing to pay at that time, but not including compensation for injurious affection unless that amount has been agreed upon. · 11.

The owner should not be permitted to vacate expropriated premises without reasonable notice to the expropriating authority. 12. Compensation for taking of land should be based primarily on the market value at the date of the filing of the expropriation with further consideration for (

a) damages attributable .to disturbance, (

b) damages for injurious affection, and (

C) any special diff iculties in relocation. 13. The market value should be described as the price that a willing buyer would be prepared to pay to purchase the land on the open market by a willing seller. 14. Where market value is based on a use of land other than existing use, and that value is higher than a market value based on the existing use plus compensation for disturbance of the existing use, no compensation should be paid for disturbance that would have been incurred by the owner in using the land for that other use. 15. The Act should provide for special rules similar to those contained in the Ontario Expro priations Act, 1968-69 including use respecting (

a) cost of equivalent reinstatement in certain instances, (

b) the method of determining injurious affection where part of land is taken, (

c) certain matters which are not to be taken into consideration in determining market value, e. g. special use to expropriating authority, variation in value resulting from the works for which the expropriation is made, and increase in value because the land is being put to a use that could be restrained by a court, (

d) separate valuation for separate interests, valuation of security interests, (

e) Payment to security holders, (

f) valuation of disturbance, damages, injurious affection and relocation, (

g) valuation of tenants compensation, (

h) the time at which business losses should be assessed, (

i) valuation of loss of goodwill where business is not continued after expropriation, (

j) compensation for improvements that did not enhance the market value of the land, (

k) prepayment of mortgages. 16. There should be provision for a special compensation of five percent of compensation pay able in respect of the market value of the land expropriated where the residence of an owner other than a tenant is expropriated. 17. There should be a limitation period for claiming compensation for injurious affection where no land is taken from the owner. 18. Where land that has suff ered injurious affection also obtains an advantage from the work for which the land was taken, the injurious affection damages should be set off by the value of the advantage gained. 19.

There should be provision for procedure for abandonment of expropriations in whole or in part and for compensating damages by reason thereof. 20. Where an expropriation has been commenced, the expropriating authority should not be able to enter into an agreement settling any compensation with respect thereto without the prior approval of the land value appraisal commission. 21. Interest should be required to be paid by the expropriating authority from the date of pos session on any unpaid compensation at a rate established from time to time by the Lieutenant Governor-in-Council. 22.

Compensation, where not agreed upon, should be determined by the County Court of the district in which the land is situated. The court could make special rules respecting the

March 4, 1969 (STANDING REPORT cont'

d) procedure under The County Courts Act. 45 23. Where an expropriation matter is settled by the courts, the expropriating authority should pay the costs of the owner where the owner gets more than a fixed percentage of the amount offered by the expropriating authority, and where the owner gets less than eighty-five per cent of the amount offered, the costs should be in the discretion of the court. 24. There should be a full right of appeal in all matters dealt with by the court.

Schedule "B" THE OMBUDSMAN. 1. Use of the name "Ombudsman" to conform with the name given to the official in New Zealand, Alberta and New Brunswick rather than the title "Legislative Commissioner for Administration" used in the United Kingdom. 2. Appointment to office and revocation. The Ombudsman would hold office during good be haviour and shall cease to hold office upon attaining the age of 65 years. He would be appointed in the same way as the Comptroller-General and removable from office in the same way by resolution by 2/3 vote of the Legislative Assembly. 3.

The Ombudsman would have generally jurisdiction to investigate all written complaints of any decision or recommendation made, including any recommendation made to a minister, or any act done or omitted relating to a matter of administration by any department or agency of "--' the government or by any officer, employee or member thereof, whereby any person is or may be aggrieved. 4.

The Ombudsman would take an oath of office before the Speaker or Clerk of the Legislative Assembly and the oath would include an undertaking not to divulge information received except as required to establish grounds for his conclusions, recommendations and reports. 5. Investigations by the Ombudsman would be conducted in private. 6. The Ombudsman would have the powers conferred on a Commission under

Part V of The Manitoba Evidence Act. 7. The Ombudsman would not be authorized to investigate any matter with reference to which a complainant has a right of appeal or right of remedy by proceedings in a court of law, pro vided that he would be authorized to investigate such cases if satisfied under the circumstances, that it would have been unreasonable to expect the complainant to appeal to the courts. In such cases no investigation would be commenced until the appeal period had expired. 8.

The Ombudsman would not be authorized to investigate any decision, recommendation, act or omission of any person acting as a solicitor for the Crown or as counsel for the Crown in respect of any claim or legal proceeding. 9. The Ombudsman would not make a recommendation or report in respect of any decision, act or omission by a department or agency of the government or its officials, that is a matter of discretion vested in the department or agency, unless the Ombudsman concluded that such discretionary action was clearly wrong or unreasonable. 10.

The jurisdiction of the Ombudsman would not, of course, extend to judges or the function of any courts or to awards or decisions of an arbitrator under The Arbitration Act. 11. Provision will be made whereby statements made or answers or evidence given by any person in an investigation or proceeding before the Ombudsman would not be admissible in evidence in any court or related proceeding, except on the trial of a person for perjury and no person would be guilty of an offence under

an act of the legislature by reason of the require ment to furnish evidence or information to the Ombudsman. 12. The Ombudsman would have authority to enter department of government premises and the premises of government agencies for the purpose of carrying on any investigation within his jurisdiction. 13. The Ombudsman would be authorized to make recommendations to government depart ments or agencies in respect of investigations within his jurisdiction so that corrective meas ures in areas of mal-administration could be taken. 14.

Provision will be made that no proceeding of the Ombudsman, except on the grounds of lack or jurisdiction, shall be subject to challenge in the court. 15. Provision would be made that no proceeding would lie against the Ombudsman or persons employed under him in respect of the exercise of his office, unless he acted in bad faith. 16. The Ombudsman would be required to report annually to the Legislative Assembly on the exercise and performance of his functions and duties of office and would be as well authorized

46 March 4, 1969 (STANDING REPORT cont'd) . . . . to make other reports public as circumstances required. 17. It would be an offence to willfully obstruct or resist the Ombudsman in the exercise of his jurisdiction or to willfully fail to comply with the lawful requests of the Ombudsman. It will also be an offence willful ly to make a false statement to the Ombudsman or to mislead him or his staff in the exercise or performance of his functions of office.

Schedule "C" COMMENTS ON THE BRIEFS SUBMITTED ON THE DRAFT CONSUMERS' PROTECTION ACT TO THE STANDING COMMITTEE ON STATUTORY REGULATIONS AND ORDERS Members of the Committee will recall that the Draft Consumers' Protection Act was tabled early in 1967 following the White Paper on the proposed Citizen's Remedies Code in December, 1966. The Draft Consumers' Protection Act sought to implement virtually all of the recommendations of the Report of the Special Committee on Consumer Credit, 1966, which was tabled in January of that year.

The Special Committee recommended that all specific consumer credit legislation be con solidated, with the result that the Draft Consumers' Protection Act presented an omnibus code of the law in this area. In many respects the Manitoba Draft Act preceded much of the legislation that was to appear in other Provinces and by the Federal Government (with respect to The Bank Act).

Now , --'! that there is considerable legislation in many comparable areas in a number of other jurisdic- tions, there has been the opportunity to compare, refine and improve the Draft Act in terms of experience elsewhere and in the interests of uniformity. The fourteen written submissions and the accompanying verbal representations to the Committee at its Public Hearings have been thoughtful and enl ightening.

All of the recommen dations have been collated and carefully considered , and we are in the debt of those who took the time and trouble to analyze the Draft Bill and appear before the Committee for the consid erable assistance and guidance they have provided, based upon their own experience, research and interest in the subject matter.

A re-appraisal in depth of the Draft Consumers' Protection Act has been made, and we are proposing a number of recommendations which, while not altering the underlying principles, should considerably improve the workability of the Legislation from the perspectives of both Consumers and Credit Grantors. Perhaps the most significant drafting alteration is our recom mendation that real property mortgages and the sale of land be removed from the Consumers' Protection Act as such, and the disclosure requirements for these instruments of Consumer Credit be introduced separately as amendments to The Mortgage Act.

Their inclusion in the Draft Consumers' Protection Act creates considerable confusion and problems in draftsman ship, and, on reconsideration, the underlying principles can better be preserved through The Mortgage Act. A direct consequence of removing real property mortgage transactions is that The Unconscionable Transactions Act remain and continue as a separate Statute, rather than being included in the Consumers' Protection Act because, of course, its application is much broader than simply consumer credit transaction (e. g. real property mortgages).

Other existing legis lation, such as, The Law of Property Act and The Bills of Sale Act should also be amended to embrace the consumer protection provisions in the Draft Act. These are commented upon more specifically in the recommendations which follow. RECOMMENDATIDNS AND COMMENTS ON THE BRIEFS SUBMITTED ON THE DRAFT CONSUMERS' PROTECTION ACT TO THE STANDING COMMITTEE ON STATUTORY REGULATIONS AND ORDERS 1. We recommend that all provisions regarding real property mortgages and the sale of land be removed from this Act. The provisions regarding the sale of land are not of importance and can be dropped.

Those concerning real property mortgages can be put into The Mortgage Act which is a more logical place for them. 2. We recommend that The Unconscionable Transactions Act be left as a separate statute and not embodied in this Act; amongst other reasons for this, it applies to land transactions and to

March 4, 1969 47 (STANDING REPORT cont'd) �· .. non-consumer transactions. 3. As regards chattel mortgages, we recommend that there be inserted in The Bills of Sale Act a provision for relief against acceleration on default similar to that now contained in The Mortgage Act; in brief this would entitle the mortgagor to avoid foreclosure by paying up the arrears with interest and any costs incurred by the mortgagee. This provision in The Mort gage Act applies to all real property mortgages, and the suggested new provision would likewise apply to all chattel mortgages.

The provisions regarding chattel mortgages contained in the draft Act would remain in it, and, in addition, there should be inserted in it a statutory right to prepay in full at any time. These provisions, like others in this Act, should apply only to consumer transactions; how a consumer transaction should be defined is a matter discussed later. 4. We recommend that the remaining matters comprised in this draft Act should all be retained in it, and that there should be no further subdivisions of it into separate acts. One reason for this conclusion is the licensing provisions in

Part X; licences can be cancelled for breaches of the Act, and it is desirable that the statutory provisions which licence holders are required to observe should all be contained in the one Act and not spread over several. 5. We recommend that in

Section 2 (1)(

e) the words "or hiring" be added at the end of the Section. 6. Considerable criticism was directed at the definition of "cost of borrowing" in paragraph (

g) of

Section 2 ( 1). Our definition is very different from that used in other Provinces and, undoubtedly, this could give rise to inconvenience. We recommend that there be substituted a definition similar to the definition of "credit charges" in the Alberta Credit and Loan Agreements Act, 1967, which definition is as follows: " credit charges means (

i) when used in relation to a time sale agreement, the difference between (

A) the total amount that the buyer has to pay in the .transaction (if the payments are made as they become due), and (

B) the sum of the regular cash selling price and the insurance charges, if any, actually paid by the credit grantor to an insurance company on behalf of the buyer on his request. (ii) when used in relation to a loan agreement, the difference between (

A) the total amount that the borrower has to pay in the transaction (if the payments are made as they become due), and (

B) the sum of the amount the borrower ac:;tually receives from the credit grantor and the insurance charges, if any, actually paid by the credit grantor to an insurance company on behalf of the borrower on his request, and (iii) when used in relation to a continuous deferred payment plan or a revolving loan agreement, the charges that the buyer or borrower is required to pay periodically on the un paid balance from time to time for the privilege of purchasing or borrowing on the plan;" (Minor changes will be required in this definition, as it uses terms which are different from some used in this Act, e. g.

"continuous deferred payment plan" instead of "variable credit"). It will be observed that this does not permit the making of a separate charge for insurance on a revolving credit account, except, of course, where the buyer himself purchases insurance and pays for it on this plan. This is inevitable, because the insurance charges with which we are concerned are those which are intended to insure the repayment of the debt. As the amount owing on a variable credit account is variable, it is impossible to calculate the insurance charge in advance and make a separate charge to the buyer for it.

However, as a result of this change, three points should be considered, viz: (

a) If the lender insures the life of a borrower and the cost thereof is charged separately to the borrower, then if the borrower prepays his debt, he should be entitled either to an _ assignment of the policy or to a rebate of part of the premium. Under our previous definition. this premium would have been part of the cost of borrowing, and the borrower would have been entitled to a rebate of it on prepayment. Now that it is not part of the cost of borrowing, sepa rate provision is required. (

b) Where the lender makes a separate charge for insurance, he should be required to produce to the borrower some proof that the insurance has been placed. (

c) The principal reason for including life insurance premiums in the cost of borrowing

48 March 4, 1969 (STANDING REPORT cont'

d) was to discourage the charging by a lender of excessive premiums for such insurance. This is a problem that has arisen under the Federal Small Loans Act. This Act is, however, enforced by the Superintendent of Insurance who is able to keep a close eye on the rates of insurance premiums charged. This will not be possible under this Act without incurring considerable administrative expenses. If, therefore, it should be come apparent that excessive premiums are being charged, amending legislation may be required. 7.

We agree with Professor Ziegel's suggestion that the word ''lender" should be changed to "credit grantor". The draft Act uses "lender" to mean anyone who extends credit; if "credit grantor" is used instead, "lender" can be used, where necessary, in its usual sense of a person who lends money. 8. It was suggested in at least one Brief that we ought not to exclude Banks from the definition of "money lender" in

Section 2 (1)(o). We would point out that the only effect of this exclusion is to exempt the Banks from provincial control of their actual money lending operations; it in no way affects their position as assignees of lien notes, chattel mortgages or other obligations. In our opinion, the actual money lending operations of Banks are so obviously a federal matter that any attempt by this Province to control it would be obviously ultra�. and would just lead to a head-on collision between this Province and the Federal Government. We would point out that the word "which" in this paragraph ought to be changed to "who". 9. The definition of "retail hire-purchase" in

Section 2(1)(

s) was criticized. The problem here is to exclude genuine leases of chattels which happen to contain an option to purchase, while at the same time including transactions which are really only camouflaged time sales. We have found a useful suggestion in the American draft Uniform Consumer Credit Code. This defines "sale of goods" as including a "bailment or lease of goods which is intended as a means whereby the bailee or lessee will ultimately become the owner of the goods". This could usefully be adopted as a definition of "hire-purchase", except that an assignee will not necessarily know what the intention was.

To protect assignees, the Act should state that, prima facie, a hiring agreement which contains an option to purchase exercisable only at the end of the hiring period, and cannot be determined by the hirer at any time on not more than two months' notice without penalty, is a hire-purchase, and any other hiring is not. 10. The exclusion of commercial transactions (i.e. sales of chattels which are to be used in the buyer's business) requires careful thought.

There is not really any sound distinction between a small business man buying for use in his business and an individual buying for domestic use, and the Act endeavours to cover them both. This has been criticized, and it was suggested that we should specifically exclude commercial transactions. This, however, would raise other problems. As is well known, credit sales are largely financed by the vendor assigning the contract to a finance company. The finance company must have a simple and reliable way of knowing whether any given contract is within the Act or not.

This is impossible unless the distinction is one which is apparent on the face of the contract itself. We, therefore, recommend that in this respect the Act remain as it stands, except that- (

a) All sales, hire-purchases or loans to corporations, partnerships or persons buying or borrowing under a registered business name be excluded, and not just those to corporations in which there is no individual guarantor, as is proposed in the existing draft. (

b) The exclusion of transactions over $7, 500.00 be removed from Sections 9 and 10 and put in the definition section. We recommend that the last line of the definition of "sale" which is

Section 2 (1)(

u) be changed round, so as to read, "other property, real or personal;". 11. The definition of "variable credit" (Section 2 (1)(

y) should be amended by adding at the end, the words, "but does not include any agreement or arrangement in which there is no cost of borrowing payable by the borrower". Without this, the definition might include straight charge. :tcco�ts and credit cards, which is not intended. A further minor change should be made in this paragraph; the words "or services" should be inserted after "goods" in line five. 12. Several comments were made in regard to

Part I (Unconscionable Transactions). We have already recommended that this be left as a separate Act. Apart from changes in terminology to make the terms used conform to the rest of the Act, only two real changes in the existing Act were made in the draft. Neither of these has

March 4, 1969 49 (STANDING REPORT cont'd) • • . . been the subject of criticism. There has, however, been criticism of existing provisions of the Act. The Act has been in force for three and a half years, and does not seem to have caused any trouble yet. However, two of the criticisms have substance and should be implemented:- (

a) This Act is based on the corresponding Act of Ontario. However, our Act applies where "the cost of borrowing is excessive .2.!'. the transaction is harsh or unconscionable",

whereas the Ontario Act says "and" instead of "or". The criticism is that our Act may be un constitutional because the first alternative, by itself, infringes on the Interest Act. We recommend that this be investigated, and our Act reworded if thought advisable. How ever, we should not adopt the Ontario wording; this requires that both our alternatives be satis fied, and in consequence their Act does not apply to a transaction which is harsh for some reason other than the cost of borrowing. (

b) The Act should be confined to transactions entered into within Manitoba; this is because an assignee is not protected unless an acknowledgment is made before a barrister or solitlitor of this Province, and it is not practicable to do this outside the Province. 13. We recommend that the requirement that the annual rate of the cost of borrowing has to be stated in dollars and cents per hundred dollars as well as in a percentage be dropped. What this requirement means is that if the rate is 12 1/2 percent, it would have to be shown both as 12 1/2 percent and $12. 50 per hundred dollars.

The latter is an unusual way of stating a rate, and was included in the draft only because the Premier's Committee recom mended it; this recommendation was itself based on submissions made to it on behalf of the credit industry who are now the people who are attacking it. We consider that their second thoughts are right, and that this unusual method of stating a rate could easily cause misunder standings and in fact did cause some misunderstandings on the part of some persons who sub mitted Briefs. 14.

We have given considerable thought to the suggestion that transactions in which the cost of borrowing is $10. 00 or less should be excluded from the Act, as it is in some other Prov inces. We have come to the conclusion that this suggestion should be adopted. Admittedly, it may lead to high rates on very short term credit, but after all the amounts involved will be small.

As against that there are quite a large number of transactions, particu larly involving the payment of insurance premiums by instalments, in which small credit ch arges are made (e. g. it costs an additional $1. 00 to pay the Manitoba Bar Association Group Life Assurance premium in quarterly instalments). It would serve no useful purpose to require the rate that this represents to be disclosed, and, furthermore, one consequence of setting this $10. 00 exemption limit is likely to be to keep the credit charges on all such transactions down to a maximum of $10. 00.

We feel there will also have to be a power to exempt, by regulation, certain types of transaction from the Act. For instance, it has been brought to our notice that the cost of obtain ing credit until harvest time for a hail insurance premium is $5. 00 per $1, 000. 00 irrespective of when the insurance is taken out. This seems a reasonable charge, but the annual rate it represents will vary from one farmer to the next depending on when he applies, which will make the calculation most difficult. 15.

We recommend that the requirement that the contract contain a description of the �oods "by which they may be readily and easily known and distinguished" be dropped in Part n of the Act, that is to say, Sections 9 and 10. This is actually only necessary in contracts covered by

Part V and is repeated in that Part. The proposal is simply that the words "by which they may be readily and easily known and distinguished" be omitted; the contract should still contain some description of the goods otherwise no one would know what it related to. 16. We also recommend that at the beginning of these two Sections (9 and 10), the words, "or within twenty days after" be omitted. This will mean that the agreement must be signed by the buyer before the goods are delivered or on delivery. The words concerned appear in this Act solely because they have simply been carried forward from the existing Time Sale Agreement Act. We agree with Professor Ziegel's com ment (Paragraph 18 (

c) on page 10 of his Brief) that their retention would defeat the whole ol;>ject of the disclosure requirement. We note that all other Provinces require that the agreement be s igned, or the required information disclosed, before the credit is extended, which must be

50 March 4, 1969 (STANDING REPORT cont'd) . . . . before the goods are delivered. If. this is feasible in the rest of the country, it is feasible in Manitoba. 17. The draft Act proposes a minimum limit of $100. 00 in

Section 9 and 10; other Provinces have one of $50. 00. There is no valid argument based on uniformity for us to conform. We are merely saying that if the transaction is under $100. 00, you need not comply with the Act. But any vendor who wants to comply with the Act in smaller transactions is perfectly free to do so. We believe it will be found that most small credit transactions will now be done under a variable credit arrangement, which is governed by

Section 13. Individual credit contracts are becoming unusual except on major appliances, and these are likely to exceed $100, 000 in price. Therefore, this minimum limit is somewhat academic. We believe that in transactions under $100. 00, the cost of complying with the Act (which must ultimately be reflected in the rates charged) is likely to exceed any potential saving to buyers caused by disclosure of rates. 18. The requirement contained in

Section 9 (3)(

i) and 10 (3)(

i) to state the total payment period measured from the date of delivery is causing trouble. These sections may apply to something that has to be specially made, specially ordered, or altered for the buyer's requirements. As a result, the delivery date may be unknown when the contract is signed. But a buyer who starts paying before delivery is paying in advance, and this is the financial equivalent of paying addi- tional interest. __, There is a serious problem here. Some people like to order for future delivery, but to start paying at once.

If such people are quoted a rate of cost of borrowing calculated over their whole payment period, the result will be misleading. Extensive amendments to Sections 9 and 10 are recommended to cover: - (

a) Cases where delivery is to be at a fixed date in the future, but pay rrents are to com mence before. (

b) Cases where the delivery date is uncertain, but the buyer wants his first payment date to be fixed. (

c) Cases where the delivery date is uncertain, and payment is to commence on or after delivery. 19. The Retail Council of Canada request that the buyer not be required to sign the contract under Sections 9 and 10; the Bar Association asks that he sign an acknowledgment that he has received a copy. The Retail Council's comment on this seems to be misplaced as they appear to be thinking of variable credit transactions.

The Bar Association's suggestion that the buyer is to be given a copy of the contract is sound; it is not, however, necessary for the Act to require that he acknowledge this; the vendor will see to this. 20. Sections 9 (3) and 10 (3) will have to be amended if any alteration is made in the definition of "cost of borrowing", so as to ensure that there is no conflict between these Sections and that definition. 21. It was suggested in some Briefs that these two subsections, 9 (3) and 10 (3), should be changed to conform with those of Ontario and Saskatchewan.

The purpose of these two sub sections is to set out the information that must be contained in the contract. After studying the Ontario and Saskatchewan requirements, we feel that the only additional information required by our Act is information that would in fact be given anyway; furthermore, the requirements of our Act are very similar to those of Alberta in this respect. In addition to the changes recommended in the last six paragraphs, we recommend that: (

a) In

Section 9 (3), there be inserted after "description of the goods", the words "or services". This is because a credit sale of services only is possible; a hire-purchase of ser vices under

Section 10 (3) is, on the other hand, impossible, and these words are not required in that subsection. (

b) In paragraph (a), strike out the words, "�elusive of any delivery or installation charge;", and in paragraph (b), add at the end, the words, "if not included in the cash price of the goods;". This change will bring our Act more closely in conformity with the Alberta Act. The purpose of requiring a statement of the delivery or installation charge is to make sure that the buyer is not faced, when the goods are delivered, with a demand for an additional pay ment over and above what is shown in the contract; the draft Act attempts to do this by insisting that the delivery or installation charge be shown separately, but this has the effect of preventing

March 4, 1969 51 (STANDING REPORT cont'

d) a seller from quoting an overall price for the goods and the installation of them; this prohibition is au unnecessary regulation of commerce and the buyer can be given the same protection against an undisclosed charge by making this alteration. (

c) In paragraph (e), change the words, "credit allowed" to "allowance made"; this is to remove this use of the word "credit" in a meaning which is different from that in which it is used elsewhere in the Act. (

d) In paragraph (g), after "expressed" insert the words, "as one sum". (

e) Delete paragraph (

i) entirely; this is a requirement which is not found in any other Act, and in fact the information that would be given under this paragraph will be repeated in a slightly different way in paragraph (j). 22. There has been criticism of

Section !.l (4) and 10 (4). We believe this is based on a mis understanding of these subsections. To remove the source of this misunderstanding, we recommend that the word "thereof'' in line six be changed to, "of such succession of instalments". 23. If our recommendation in regard to insurance premiums and the cost of borrowing is accepted,

Section 11 will require rewriting and

Section 12 can be dropped. 24. It is apparent from the Briefs submitted that extensive alteration will be required in

Section 13 which deals with the disclosure of cost of borrowing on variable credit. The alterations that will be required relate to the following points:- '"\. (

a) In view of the information given by representatives of the industry, it appears that paragraphs (

a) and (

b) of subsection (2) are unnecessary and can be omitted. (

b) Paragraph (

d) can also be omitted, but paragraph (

c) should be retained; the buyer is entitled to know whether he is going to be required to make payments once a month, twice a month or once a quarter. (

c) Paragraphs (

e) and (

f) must be retained. (

d) Other Provinces required, in addition, that the buyer should be furnished with a table showing the scale of monthly charges. Thus, if he is quoted an annual rate of 15 percent, he must also be given a table showing what 15 percent per annum produces as a monthly charge; obviously, this cannot be given for every sum from one cent upwards, but it could easily be given for each dollar between $1. 00 and $10. 00, for each $10. 00 up to $100. 00, and for each $100. 00 thereafter.

The requirement for such a table should be put in the Act, but the exact form that the table is to take can be left to be fixed by regulation after consultation with the industry because we believe it is the practice of credit grantors now to furnish such tables. (

e) Paragraph (g), dealing with increases in the interest rate, is part of a problem, the full nature of which does not seem to be comprehended by the representatives of the industry. li a store extends variable credit at the rate of 15 percent to a particular customer, and that customer buys goods totalling $500. 00, then the bargain between them is that he is to pay interest at 15 percent on this $500. 00 until it is paid off; once he has made a purchase, the store cannot raise the rate on that purchase without his consent.

The store can, however, raise the rate at any time on future purchases, and by going on buying the customer by implica tion agrees to the new rate, provided he is aware of the increase. Furthermore, a store can require the payment of an increased rate on the existing balance as a condition of permitting further purchases on credit. In this case, the making of further purchases would be an implied consent to the raising of the rate on the existing balance. It is obvious that some change must be made in paragraph (g). A seller must be permitted to raise the rate on future purchases on reasonable notice.

At the other end of the scale, he must not be permitted to raise the rates on an existing balance when no new purchases are made. The Committee must decide whether he should be allowed to require an increased rate on the existing.balance as a condition of allowing further purchases. If he is not, he will haveto apply two different rates to diff erent parts of the same account, which will be awkward. But if he is allowed to do this, it could be said that he is penalizing a buyer who is unable to switch to a cash basis for future purchases.

Exactly the same question arises in regard to increases in the minimum monthly payments. (

f) We also recommend that the above information need not be necessarily all contained in the contract signed by the buyer, provided that it is given to him in other documents which are delivered to him at the time of signature. This will bring our Act into conformity with those of other Provinces on this point.

52 March 4, 1969 (STANDING REPORT cont 'd) (

g) A minor change is also required in paragraph (f), because it contemplates that a single interest rate must be charged on the full amount of any balance owing; we believe that the practice of some stores is to charge, say, 18 percent up to $500. 00 and 15 percent beyond it, because this reflects the fact that the size of the account does not increase the amount of paper work. An amendment is required to permit this practice. (

h) Similarly, an amendment is required in subsection (3), because this contemplates that there can be only one master agreement between a vendor and a customer; it is very prob able that some stores may want to operate two diff erent types of variable credit accounts, one of which would be a time sale and the other would not.

The first of these would be used for major items on which the vendor wished to retain a lien for the price and the other, smaller items in which this was an unnecessary complication. (i) Subsection (5) requires amendment, because of the possibility that the borrower or buyer will send in the signed agreement to the lender by mail; to cover this possibility, the words "of signature thereof" should be changed to, "the lender accepts the agreement". (

j) A change will be needed in subsection (8) and also in subsection (2) to permit a higher rate of interest to be charged on payments in default provided such a provision is contained in the master agreement. In addition, the words, ''but shall not incur any other pecuniary liability by reason of such default" can be omitted, as the point is covered by

Section 28. f (

k) In view of our recommendation that the rate of interest on future purchases can be raised on notice, subsection (9) will become unnecessary. (1) Subsection (10) is not necessary and should be omitted. (

m) When the Act was drafted, it was contemplated that all existing variable credit customers would be required to sign new contracts in accordance with the Act. It is apparent that such an idea is impracticable. This

Section should, therefore, provide that all existing contracts should be continued in force, but that any provision therein which is inconsistent with the Act will be invalid on sub sequent purchases, except that if the existing contract does not disclose the interest rate, or does not contain a table of monthly payments, this information can be given to the buyer in writ ing by registered mail and if so given is thereafter deemed to be incorporated in the contract. 25. If real property mortgages are excluded as we have recommended,

Section 14 can be omitted, and chattel mortgages (including those for securing the price of goods sold) brought within

Section 15.

Section 15 (2) will require slight alteration if the definition of "cost of borrowing" is changed. 26. Professor Ziegel's comments on prepayments on refinancing have made us realize that the Act contains no provision for disclosure of the cost of borrowing on a refinancing. Clearly it should. Such a transaction is very similar to an ordinary loan, and, therefore, requires a

Section similar to

Section 15. The important point, however, is the principal sum on which the cost of borrowing is to be calculated. It should be the outstanding balance less the unearned portion of the cost of borrowing, i.e. the amount required to prepay the original obligation, without the allowance to the seller permitted by

Section 23. 27. As regards

Section 16, the experience of other Provinces show that the method of comput ing the cost of borrowing should be contained in regulations rather than the Act so that necessary changes can be made more easily. We would recommend that the regulations follow either those of Ontario or those made under The Bank Act. There does not seem to be much practical difference between them. 28. Since the draft Act was prepared, we have learnt of a new development in time sales which requires drastic action to prevent evasion of the spirit of the Act.

This new development is that at the time of the purchase, the buyer signs a conditional sales contract which contains a very low interest rate but which is expressed to be payable on demand. The contract is then discounted to a finance agency of some sort, and as soon as this agency receives it, it immediately makes a demand for payment on the buyer and tells him that he can refinance the contract at a higher rate. We are disturbed to find that this idea seems to have originated with one of the Banks.

The possibilities of misleading a buyer in this way are enormous, and after careful considera tion, we have come to the conclusion that the only way to prevent it is to prohibit the making of

March 4, 1969 53 (STANDING REPORT cont'

d) retail time sales payable on demand and to declare that the seller's lien on any such sale is void. We cannot believe that a retail time sale payable on demand would ever serve any useful purpose, but just in case it might, we would recommend that this prohibition should be qualified so that such a contract could be made with the prior consent of the Registrar. 29. In

Section 18 (1), the words "prevailing rate" will have to be changed to "prevailing rate or rates" to allow for the quotation in a variable credit agreement of varying rates. In addition, the words "of interest" should be added at the end of this Section.

Section 19 has attracted comment only from the Bar Association. This is probably because it is really only applicable to real property mortgages. We recommend that it be removed from this Act and put in The Mortgage Act. 31. Two Briefs have questioned whether

Section 20 is constitutional, and one of them raises the same question in regard to some of the adjoining Sections. The federal Interest Act prohibits the statement of an interest rate per month or week, unless the annual rate is also stated. Lenders have evaded this by charging, instead of interest at a specified rate, a finance charge stated only as a lump sum, which they claim is not inter est. We do not see how a provincial attack on this practice can be unconstitutional.

However, we must remember that if a loan agreement simply obligates the borrower to repay the loan with interest at a specified annual rate, the transaction is squarely within The Interest Act, and we cannot reduce the rate that the borrower has to pay. There is no objection from our point of view to such a contract, but nevertheless it would not in fact comply with Sections 9, 10 or 15. In case this might invalidate this legislation, we recommend inserting in

Section 17 (1) , 18 (1) and 20 (1) the words, "except as otherwise provided by The Interest Act".

Section 20 (1) requires amendment to cover mis-statement of the rate, as well as the omission to state it.

Section 20 (2) may be unconstitutional because it deals with promissory notes. It is an attempt to tackle the problem in a way that may be constitutional; we can only hope that it is, because we cannot think of a better one. 32. There has been criticism of

Section 21, but practically all of it was based on a mis reading of the Section. This

Section was included to meet a specific evil, namely, the quoting of a monthly payment and nothing else, e. g. "You can have this for $10. 00 a month". This is, actually, dishonest advertising, and it is to be noted that only one of the Briefs asks that this form of advertising be permitted. The -others all ask that other forms of advertising be permit ted; as these are not prohibited by the Section, we see no need to change it. 33. The reaction to Part m of the Act (Prepayment Privileges) is curious.

One Brief prefers it to the corresponding provisions of other Provinces; others ask us to conform with those other Provinces. On investigating, it is our impression that we should adhere to the system of the Rule of the 78ths or sum of the digits, instead of adopting the Ontario system which is based on a slightly different principle known as the sum of the balances.

One reason for this recommenda tion is that it appears to be a great deal easier to explain the Rule of the 7.8ths than it is to ex plain the sum of the balances, because the relevant part of the Ontario Regulations is extremely hard to follow. (It must, however, be noted that the explanation of the Rule of the 78ths in

Schedule B of the Act contains four clerical errors which must be corrected - at the foot of page 43, 2/78ths should be 3/78ths and 3/78ths should be 6/78ths; on page 44, 2/66ths should be 3/66ths and 2/91sts should be 3/91sts. ) On the other hand, we believe that the Ontario provision allowing the lender to deduct from the rebate one-half thereof up to a maximum of $2 0. 00 is fairer to both parties than the deduction of a straight 10 percent regardless of the amount involved which is the deduction permitted in the draft Act. It must be appreciated that the result of

Section 25 will be to make every unsecured loan to an individual (other than small loans and loans by Banks) prepayable. We do not see any objec tion to this. Additional provisions are required, either here or elsewhere, for prepayment of chattel mortgages.

Section 25 requires a minor alteration. The reference to "blended payments" should be

54 March 4, 1969 (STANDING REPORT cont'd) • • . dropped, and instead it should refer to the cost of borrow- ing being "precomputed". 34. The Draft Act deals only with prepayment of the whole balance. Professor Ziegel sug gested that it should also provide for partial prepayment. We do not agree with this suggestion. In the first place, the provisions required would be extremely compl icated, see, for instance, paragraph 8 of the Alberta Regulations.

In the second place, it would be impossible to provide tables showing the amount of the rebate on a partial prepayment because the prepay ment might be of any portion of the unpaid balan ce; as a result, the credit grantor would have to calc ulate it each time from the Regulations, and many people would, we believe, find this im possible.

Finally, we do not see why a borrower woul d be given a statutory right to vary his repayment schedule; it is one thing to allow him to pay it all off at once, but it is quite another to allow him to insist on paying it back in instalments which are diff erent from those agreed on. 35. It has been suggested that some of Part N of the Act (Relief Against Acceleration and Forfei ture) could be unconstitutional . On investigation, it proves that

Section 26 is probably ultra vires of the Province, because its purpose is to prohibit a rate of interest on payments in default which is higher than the basic rate payable on the debt while not in defau lt.

Section 8 of The Interest Act specifically prohibits an increased rate of interest on pay ments in default on real property mortgages. Parliament has no right to legislate on mortgages as such; only on interest. By limiting its prohibition to real property mortgages, it has im pliedly sanctioned increased rates of interest on other defaulted payments.

Section 26 would purport to alter this and is, theref ore, probably ultra vires.

Section 28, however, which prohibits any other penalty for late payment would be valid because it has nothing to do with interest at 211 . It is, therefore, recommended that

Section 26 be withdrawn and the appropriate changes made in the wording of

Section 28.

Section 27 deals with relief against acceleration of payment of the balance on default in payment of an instalment. This is unquestionably valid. The references in it to

Section 26 will have to be alter ed. Two changes in the scope of

Section 27 are recommended: (

a) It should not apply to sales of land. (

b) It should apply to chattel mortgages. Paragraph (

f) should be amended to make it cl ear that it applies only where the borrower does not pay up the arrears, and also to include in the amount that may be recovered all ex penses actually incurred by the lender as a result of the default. It should also be made cl ear that where the borrower has been granted an extension of time, the time of default referred to is the time when the borrower fails to comply with the terms of the extension.

Section 29 requires amendment to provide that the lender may recover any expense he has incurred in remedying the borrower's default (e. g. paying an insurance premium) , in case this would not be properly cla ssifiable as a loss. 38. The Manitoba Motor Dealers' Brief suggests that many people are selling cars in a small way without being licenSed to do so. This is a matter that comes under the purview of the High way Traffic Act and not this act. 39. The Manitoba Motor Dealers also complain that the restrictions on advertising of rates of interest, etc. , on Banks are less onerous than those contained in

Section 21 of this Act. In fact, the reverse seems to be the case. Actually,

Section 21 prohibits nothing except the adver tising of the monthly payment. Their complaints about Bank loans payabl e on demand will be taken care of by our earlier recommendation on this point. 40. We can see no reason to abandon in

Section 33 (Part V), the requirement that the goods must be fully described. In many jurisdictions the contract has to be registered and must, therefo re, contain a full description. Nor can we see any sound reason for lengthening the period for del ivering a copy of the contract; it is also 20 days in Ontario under the Conditional Sales Act of that Province. In practice a copy of the sales slip is almost always delivered with the goods. Frankly, there seems to be an air of unreality about these criticisms. If an

article is sold on an individual conditional sale (i. e. not on variable credit), the buyer must, in practice, be required to sign the contract bef ore or at delivery, and will then get a copy. If the sale is on variable credit, only a sales slip is required. Surely if the goods are suff iciently valuable to

March 4, 1969 55 (STANDING REPORT cont'

d) be worth selling on a conditio nal sale, the buyer will be required to sign the sales slip and can be given a copy, and the sales slip can describe the goods. 41. Like Sections 9 and 10,

Section 33, as drawn, allows the agreement to be signed within 20 days after delivery. It is important to understand the relationship between Sections 9 and 10 on the one hand, and

Section 33 on the other. The former are in

Part II which deals solely with the disc losure of the amount the borrower has to pay and the annual rate of the cost of borrowing.

Section 33 is in

Part V which deals with the reservation to the seller of a lien on the goods. In practice, most credit sales will probably fall within both

Part II and

Part V, but nevertheless, if the seller reserves no li en the sales is not within

Part V, and on the other hand if the seller re serves a li en but requires no payment beyond the cash price, the sale will be within

Part V but will not be with in

Part Il. Because the seller is reserving a li en, the agreement must contain a detailed descri ption of the goods, including, for instance, the serial number. This presents a practical problem. Consider, for instan ce, the purch ase of a refrigerator from a retail store. The buyer selects the model, he is told the price and the credit charges and this is all put down in the agreement and signed by him at that time. But the serial number of the refrigerator that is to be delivered to him will not be known until it is taken from the warehouse and put on the delivery truck.

It will greatly inconvenience buyers if they cannot sign any agreement until the serial number is known. It will confuse them if they have to sign two agreements, one dealing with credit disclosure and the other with the vendor 's li en. The solution we suggest is that where a sale is within both

Section 9 or 10 and

Section 33, the buyer should be given a copy of the agreement at the time of signature, but that if the serial number or other dist inguishing mark of the

article sold is not then known, the seller can sub sequently insert it in the agreement and give the buyer a second copy of the agreement with this in it not later than 20 days after delive ry.

Section 36 requires elaboration. If three articles are sold in one transaction, and two are adequately descr ibed and one not, there is no reason why the seller's rights in the other two should be affected. If the Committee feels it necessary, the words, ''but this does not affect the buyer's obligation to pay for them" can also be added.

Section 37 has been criticized. It is, however, essential to the Act. There is a di stinct danger that sellers of major appliances could evade this part of the Act by making what is in law a cash sale with a chattel mortgage back to secure the price. The definition of "time sale" in

Section 2 (1) (

x) prevents this by classifying such a transaction as a time sale. However, it will still look like a chattel mortgage, and an assignee may take one over not realizing that it is a time sale. To protect assignees,

Section 57 provides that in this event the assignee is not subject to the vendor's obligations. To prevent this exemption being used as a means of evading the Act, vendors who use this method must be made to disclose that the transaction is in fact a time sale. That is the purpose of

Section 37. 44. Most of the criticism of

Part V has been directed at Secti on 38 which imposes certain statutory conditions and warranties. The attack on it comes from two di rections. The merchants and credit institutions say it goes too far in favour of the consumer, while Professor Ziegel says it does not go far enough. It is important to realize the present position. There is very little that is new in

Section 38; most of it is taken from the Sale of Goods Act. What is new is the prohibition against contracting out. This is done very frequently by some such expression as, "All implied war ranties and conditions are excluded", which, of course, is practically meaningless to most buyers. It is to be noted, however, that in practice this cannot be done unless there is some written agreement signed by the buyer. It is very unusual to have a written agreement on a cash sale to a consumer, so that there does not seem to be any real need to extend

Section 38 to all consumer sales. However, it could usefully be extended to all credit sales to consumers (or alternatively to all consumer sales evidenced by a written agreement, which in practice will come to much the same thing) and not confined exclusively to time sales, that is to sales on which the seller reserves a li en. This answers Professor Ziegel's criticism.

56 March 4, 1969 (STANDING REPORT cont'd) ... . Turning to the other criticism, and again bearing in mind that the real change is only the prohibition against contracting out, the question to be decided is whether, and to what extent, contracting out should be permitted. We can see no good reason for allowing any contracting out of paragraphs (a), (

b) and (c), which deal with the vendor's title to the goods, nor of para graph (

d) which merely says that the buyer is entitled to new and unused goods unless he has expressly bought used ones. Nor can we see any good reason for permitting contracting out of paragraph (e) ; sales which are within this paragraph will be rare anyway. The real issue is over paragraph (f) . It is not in fact so harsh on sellers as it has been made to appear, particularly in view of paragraph (2) . If a man buys a five year old car, he wlll not be able to complain if it has defects which are normal in a car of that age. Further more, one can, as it were, contract out by simply listing the defects in the article. The only problem is where the

article being sold suff ers from a large number of minor defects which it would be tedious to li st. It seems to us, therefore, that the only chariges required are as follo ws:

(1) Extend the

Section to all retail credit sales.

(2) Permit the desc ription "used" and the defects to be put on the sales slip in the case of sales on variable credit, as there will in fact be no agreement in which to put them.

(3) Under paragraphs (

e) and (f), make it unnecessary for the defects to be stated specifi cally if the general condition of the

article sold is stated with reasonable accuracy. There should also be a statutory condition similar to paragraph (

f) in retail credit sales of services. Subsection (2) has been criticized for penalizing too harshly an accidental omiss ion of the age of the goods. This could be remedied by inserting afte r "agreement" the words, "or is proved beyond reasonable doubt to have been known to the buyer at the time of the sale". 45. It has been suggested that these statutory conditions ought to be required to be reproduced in the agreement, like the statutory conditions in insurance policies. As we are not agreed on this, we have no recommendation to make one way or the other. 46. Objection was taken to the 5 percent limit in

Section 39 (1)( c). We recommend that the figu re be raised to 10 percent or $25. 00, whichever is the greater. 1f the seller can prove that the expenses were more than this, he should be allowed to add them to the balance owing by the buyer, but he cannot demand payment thereof at the t4D.e of redemption. The same applies to

Section 40 (3) (a) . 47. We recommend that Saturdays, Sundays and hol idays be excluded in reckoning the 48 hour period in Sections 39 and 40. 48. We feel that insuff icient provision has been made to allow for dishonest buyers in connec tion with repos sessi on. We recommend that if the buyer has (

a) persistently failed to meet his obligations, and (

b) deliberately evaded repossessi on of the goods, the Court should have the power, on the application of the seller, to cancel the buyer's right to redeem except on payment of the entire balance and expenses of repossess ion.

Section 41 has also been criticized from both sides. We can see no reason whatever to modify it in favour of the seller, as in other Provinces he has to apply to the Court before he can repossess in these circumstances. The first question for the Committee to decide is whether we should fall into line with the other Provinces in this respect. The se cond question is whether there should be a substantial reduction in the amount the buyer has to have paid before he is entitled to this protection, as suggested by Prof essor Ziegel on pages 15 to 16 of his Brief.

The object of our provision is to protect buyers who have built up a substantial equity in the goods. The object of Prof essor Ziegel 's suggestion is quite diffe rent; it is to use this pro vis ion as a weapon against irresponsible credit granting. Whether it should be so used is a question of social policy. 50. To remove some fears that have been expressed, we recommend that a

section be inserted in The Law of Property Act, to the effect that the seller's ownership of the goods and his right to repossess on default are not prejudiced by --

(1) An extension of time to the buyer, or any other variation agreed to in writing by both parties.

March 4, 1969 57 (STANDING REPORT cont'd)

(2) The redemption of repossessed goods by payment of the amount in default, or remedy ing of a default, or

(3) Any order of a Court which has the effect of extending the time for payment of the balance. 51.

Section 44 (1) and (2) are the "seize or sue" provisions. If the buyer pays up the arrears and thus gets relief from acceleration of the balance, the seller's choice between seizing and suing should be restored for the future. Subsection (3) restores it where the buyer has paid the arrears after being sued. We need another subsection to restore it where the buyer has paid the arrears after a seizure. 52 . In connection with

Section 44 (7), some Briefs have asked why a buyer should not be liable for damage caused byv.'ilful act of buyer or by his neglect before repossession. We would agree that he should be liable for damage caused by his deliberate act or wilful neglect. Liability for mere neglect could too easily lead to liability for ordinary wear and tear. 53. We recommend an amendment to

Section 45 to cover cases where a component has been replaced, but is itself subject to a lien. 54. As pointed out by Professor Ziegel, the word "chattels" appears in

Section 47, where the rest of the Act uses "goods". This is because it is usual to refer to a mortgage on them as a chattel mortgage. Nevertheless, it would be more logical to use the word "goods" in this

Section also. 55.

Section 47 (2) contains another 48 hour time limit which requires the same treatment as before.

Section 48 overlaps

Section 29 of The Bills of Sale Act. We recommend that it be omitted and its object accomplished by an amendment to

Section 29 of The Bills of Sale Act. 57. We recommend that Direct Sellers be required to be bonded as is the case in Saskatchewan.

Section 51, dealing with direct sale agreements, should require that a copy of the agree ment be given to the buyer. 59. Certain Briefs asked, in effect, that bona fide retail stores be exempted from the provi sions of

Part VII (Direct Sellers). This raises a difficult question. There is no doubt that the large retail stores do from time to time send out circulars advertising sales of such things as wall-to-wall carpeting and drapes, or wall-paper; that, as a result of these circulars, people telephone the store and a salesman comes to their home with samples, measures the rooms involved, and prepares a contract which is signed there and then. Such a contract would fall within this Part. If no change is made, two consequences will follow from this: - (

a) The store and the salesman concerned will have to be licensed under

Part X, and also bonded, if bonding is required. (

b) The contract will have to be cancellable for four days, which could be a nuisance if the buyer is in a hurry. As regards (b), it is to be observed that such a contract has been cancellable under the existing Consumer Credit Act since 1966; if the buyer is really in a hurry, he can exempt the transaction from the Act by going to the store to sign the contract. Really, the only new feature will be the licensing requirement.

In practice, this only means that the employees in one or two departments of the store will have to be li censed; the employees concerned will all require training for this job, so that the individuals who require licensing will be known in advance. We believe, therefore, that the inconvenience involved will not be substantial. There are only four possible ways in which it can be avoided, viz ; -

(1) Omit paragraph (

b) of

Section 49. This would remove from the category of direct sales transactions initiated by the seller sending out a circular, and confine it to those initiated by a personal or telephone solicitation. We believe this would also exempt a lot of undesirable transactions which should not be exempted.

(2) Insert in the Act a definition of "bona fide retail store", and exempt from this part any store that fulfills this definition. This will cause undesirable uncertainty for buyers. A buyer who has signed a direct sale contract which does not contain the wording required by Sec tion 51 will often not know whether he has been dealing with a seller who is violating the Act, or · with one who is exempt from it.

(3) Empower the Registrar to grant certificates of exemption to bona fide retail stores. The store could be required to quote its certificate number on its printed contracts in place of

58 March 4, 1969 (STANDING REPORT cont'd) .•• the wording required by

Section 51. The trouble with this is that it confe rs a somewhat invidious di scretion on the Registrar, the exercise of which is almost certain to cause hard feelin gs.

(4) Exempt direct sales �de under a pre-existing variable credit agreement; this would exempt sales made to existing customers of the seller. 60. It was suggested by the Winnipeg Motor Dealers Association that "motor vehicle" in

Section 50 (

b) should be changed to "vehicles" and that this word and the word "trailers" should bear the meanings given in The Highway Traff ic Act. The latter suggestion has definite merit; there is no objection to the former, although it will make little practical diff erence. Apparently it will exempt draglines from this Part; we wonder how many direct sales of draglines occur. 61. We agree with the suggestion, that the liability of an assignee under

Section 56 (1) should be restricted to the amount owing on the contract when it was assigned to him. This

Section should also be extended to cover sales of services as well as goods. 62. This is a logical place at which to deal with Profe ssor Ziegel's suggestion that the taking of promissory notes to secure the price of goods or services sold on credit should be prohibited. We agree with this suggestion. Because promissory notes are a subject of federal legislation, we cannot invalidate such a note. All we can do is to prohibit licensed credit grantors from taking them. A note taken in violation of this prohibition will be valid, but if a credit grantor persists in taking them his licence can be cancelled. This should ensure compliance. 63. An alteration is required in

Section 64. At present it would prohibit any money lender from making a non- consumer loan unless he has a li cence. This is not, of course, intended. In view of the conclusion we have come to as to what is to be treated as a commerci al transac tion, the change will be that only loans to individuals will require a licence. 64. A further change is recommended in subsection (3) of

Section 64. This exempts lenders who make less than ten loans a year. It should also exempt sellers who make less than ten credit sales a year. 65. The words, "except as otherwise provided" should be inserted at the beginning of

Section 88 (1). 66. The Act should contain a prohibition against contracting out. 67. Fi nally, we have some comments to make on certain suggestions in Prof essor Ziegel's Bri ef, which are to be found on the pages indicated:- Page 21, paragraph 33. (

a) We agree, and the necessary change should be made. (

b) We agree, but the power to do this is already contained in Sections 74, 75 and 83 (3). (

c) We feel that the general residuary power suggested would be too vague. We do not believe that the Registrar should be required or entitled to lay down the rules of commercial morality. Page 23, paragraph 37. 1. We are generally in fa vour of such a prohibition, but it is outside our original instruc tions. 2. This prohibition is already contained in Rule 31 (2) of the Queen's Bench Rules. This Rule also applies to the County Courts. 3. We are not in fav our of such a provisi on. 4.

A prohibition of fal se or deceptive advertisements seems to be, in general, a good idea, but a little difficult to apply in practice. Is it really true that things go better with Coke ? A prohibition against misleading or deceptive advertisements would be preferab le. 5. The practice referred to is used almost exclusively in direc t selling. We feel the cooling-off period is a sufficient protection. 6. We agree that such a prohibition is required. It can probably be accomplished by an amendment to

Section 44 making it clear that the seller's lien for the pri ce is confined to the goods comprised in that sale.

SCHEDULE "C" SUPPLEMENT ARY COMMENTS ON DRAFT CONSUMERS PROTEC TION CODE RESULTING FROM FED ERAL-PROVINCIAL MEETINGS A. Page 2 of recommendation of March 4, 1968, #6 -- Alberta has amended their act by adding the words "the of ficial fee, if any, " in (

B) of (

i) and of (ii) and, for uniformity, our

March 4, 1969 59 (STANDING REPORT cont.' d. ) .. . recommendation should be changed accordingly. B. Page 8 of recommendation of March 4, 1968, #20 -- In view of Alberta's amendment to, their definition of cost of borrowing above referred to, the second paragraph of #20 should be deleted as of ficial fees will not now be included in the cost of borrowing. It is now felt that Sections 9(3) should remove the requirement of 10 point type in view of our recommendation for a standard form of contract which will be provided by regulation. C. Definition of time sale in

Section 2(1)(

x) should be amended to include services as well as goods. D. Page 12 of recommendation of March 4, 1968, #25 -- Loans made by insurance companies to policy holders should be excluded from the Act. E. Page 14 of recommendation of March 4, 1968, #31 -- (Last Paragraph) -- It is recom mended that the provisions of

Section 16(1)(

d) and 27 of The Ontario Act be included in our

Section 20. These will require: (

a) That the Contract itself contain particulars of any additional security being taken (e. g. promiss ory notes, conditional sale agreements, chattel mortgages, etc. ); and (

b) a copy of the Contract itself, setting out the Sta tement of the Cost of Borrowing, etc. , be passed on with any transfe r of a promissor y note given to secure the credit. F. Page 15 of recommendation of March 4, 1968, #33 -- Both Alberta and Ontario have found that the Rule of 78ths can be used in calculating rebates only when regular monthly payments are provided for in the contract and that it is not possible to apply this rule to uneven payments or skipped payments. As experience in the other provinces has shown that it is difficult to spell out the rebate provisions in the statute , it is recommended that

Section 23(3 ) be amended to authorize the rebate provision as prescribed in the regulations and that the Sum of the Balances method similar to Ontario and Alberta be covered by regulation. G. Page 20 of recommendation of March 4, 1968, #45 -- Progress is being made on a standard form of conditional sales contract and, while it is not possible at this time to provide for such a contract in the Act, it is recommended that provision be made to authorize such a standard contract by regulation when agreement has been reached on same. It is, therefore, recom mended that

Section 86 be enlarged to so provide. H. Page 22 of recommendation of March 4, 1968 , #57 -- Consideration should also be given as to whether or not all direct sellers should be licensed and bonded rather than the present limitation on only direct sales in which a written contract is made. Saskatchewan's problems in this area indicate that all direct sales should be subject to the cooling-off period.

ADDITIONAL RECOMME NDATIONS OF A GENERAL NATURE L lf real property mortgage transactions are removed from the draft, the disclosure pro visions, particularly with respect to balloon payments, should be contained in The Mortgage Act or Regulations. 2.

In redraf ting the Act, the draftsman should consider whether or not the more commonly used terms such as "consumer credit sale", "consumer lease" and "consumer rental-purchase" might not be substituted for the terms in the draft Act. (See American Consumers Credit Code. ) 3. lf The Unconscionable Transactions Act is to be left as a separate statute , it should be amended to provide that an acknowledgment contemplated by

Section 8(2) could be made before a barrister or solicitor entitled to practice in any Canadian Province -- not just Manitoba. 4. Specific penalty provisions should be included in the draft for failure to comply with the provisions thereof. All the consumer protection acts of other provinces provide for specifi c penalties (i. e. Alberta

Section 24 -- maximum fee fine $1000. if a corporation or $500. if an individual. Ontario

Section 32 -- $25, 000. for a corporation and $2000. for an individual). 5. As it is not possible to guarantee protection to consumers in all aspects of consumer activities in Manitoba the Bureau under

Part XX should be referred to simply as the Consumer Bureau. Consideration should be given to expanding

Section 62(

c) to include dissemi nation of information respecting business practices and consumer legislation generally. The educational function of the Bureau should not be restricted to consumer credit. While

Section 63 permits the bureau to examine books and records there is no authority to investigate by taking evidence under oath. In many instances examination of records would be of little value without inquiry relative thereto and explanation by the custodian of the books and records. Consideration should be given to empowering the Registrar of the Bureau to conduct examinations under oath and for such purposes to summons witnesses. (See Powers of

60 March 4, 1969 (STANDING REPORT cont'd.) ... Commissioners under

Part V of The Manitoba Evidence Act. ) 6. Credit Cards -- The use of credit cards is expanding each year and in most cases such credit charges would not be considered a credit transaction unless payments are not made within the 30 day or more time limit, after which default charges are assessed. The draft Act should be clarified in this respect as many credit card companies are actually assessing credit charges but are calling them default charges. 7.

Balloon payments -- Consideration should be given as to whether or not such payments should be outlawed entirely in consumer credit transactions or, in the alternative, whether provision should be made that the borrower should be entitled to refinance with the same lender at a no less favourable rate. 8. Wage Assignments -- Consideration should be given as to whether or not wage assignments in consumer credit purchases should be prohibited either in this draft or in other legislation. Ontario has banned such assignments in consumer transactions by an amendment to The Wages Act. 9.

Relief Against Acceleration and Forfeiture -- There should be a provision in the Draft Act to the effect that upon payment of the instalments in default, or acceleration and forfeiture are · otherwise relieved, the Seller's rights under the Contract are restored to their previous position prior to default, acceleration, etc. so that he could re-accelerate, repossess, etc. in the event of subsequent default by the Buyer. This may be implied in the Draft, but would be useful for the purposes of certainty and a Sel ler's future rights and position. This might be included as a subsection to

Section 27 of the Draft. MR. LYON: Mr. Speaker, I beg to move, seconded by the Honourable Provincial Treasurer, that the report of the committee be received. . . . . . . . . continued on next page.

March 4, 1969 61 MR. SPEAKER: The Honourable Member for St. Matthews. MR. ROBERT STEEN (S t. Matthews): Mr. Speaker, I beg to present the Report of the Special Committee on Professional Associations . MR. CLERK: Your Special Committee on Professional Associations begs leavf'l to present the following as their first report. Your Special Committee appointed March 28, 1968 met on Feb. 26th, 1969 and appointed Mr. Steen as Chairman. Quorum was set at 7. Your Committee heard a report from Mr. J.

O• Sullivan on a study undertaken by the Manitoba Bar Association at the request of the previous Committee on existing Manitoba legis lation establishing the various professional associations. Mr. O'Sullivan indicated that his Committee would be in a position to make a final report in six weeks time.

Your Committee requested that it be reconstituted with the same powers and personnel and that it holds its first meeting during the course of the 3rd Session of the 28th Legislature, and that all members of the Committee be supplied with copies of the final report of the O' Sullivan Special Committee of the Manitoba Bar Association, and the pertinent parts of the report of the McRuer Royal Commission inquiring into civil rights in Ontario. The Committee was unanimous in expressing its gratitude to Mr. o•Sullivan and his Committee for the work done to date. All of which is respectfully submitted. MR . STEEN: Mr.

Speaker, I beg to move, seconded by the Honourable Member from Fisher, that the report of the Committee be received. MR. SPEAKER presented the motion. MR. SPEAKER: The Honourable Member for St. John' s. MR. CHERNIACK: I beg to move, seconded by the Honourable Member for Elmwood, that the debate be adjourned. N:R. GORDON E. JOHNSTON (P ortage La Prairie): Mr. Speaker, I would like to speak on the motion if the mover would hold the motion. MR. CHERNIACK: Mr . Speaker, if the Member of the Liberal party wishes to speak, I will speak as well. MR. T. P. HILLHOUSE G. C. (Selkirk): ...... privilege, Mr.

Speaker, of speaking after the Honourable Member for Portage la Prairie .. MR. SPEAKER: May I put the motion to the House please. Moved by the Honourable Member for St. John's, seconded by .. .. MR . CHERNIACK: Mr. Speaker, may I be permitted to withdraw the motion in view of the fact that other members wish to speak today. I thought there wouldn•t be that desire because of the fact that the Leader of the New Democratic Party was going to speak on the Speech from the Throne. I thought we wouldn't be speaking, but if we will be speaking today then I wruld like permission to withdraw the motion.

I am prepared to speak. MR. SPEAKER: The Honourable Member from Portage la Prairie. MR. JOHNSTON: Mr. Speaker, I begin by apologizing to the Leader of the New Demo cratic Party, but I believe last week a precedent had been established where a similar motion was dealt with and spoken to at that time and I assure you I will not take much time today. I think the members of the House should be aware of how this committee was established and what has happened in the intervening years. The committee dealing with the professional services was first constituted in 1966 .

I believe after the initial meeting an election was called and that was the end of the committee in that year. The Committee was reconstituted in 1967 and I believe one meeting was held. The same in 1968, Mr. Speaker. In 1969, the yearly meeting was held again on the day before the session was called. At that time, although I was not aware that the chairman had been in hospital and I'm certainly not criticizing him for his lack of effort because of that disability, but I think, Mr.

Speaker, it should be pointed out that the history of this committee, and the action· that has he� taken over the �by it. if! a disgrace. There is presently lying on a shelf gathering dust a very expensive report and a very time consuming operation by the members of the committee . I'm referring now to the Committee on Dental Services . This report has been lying on the shelf for three years I believe.

The public are waiting for action in this regard; the so-called denturists are looking for some direction; the Dental Association is very upset at this time; and here we have a committee which is set up to deal with the problems of this nature, and what are they doing? They are going through

March 4, 1969 ( MR. JOHNSTON cont'd) .... the motions once a year of meeting and pretending to do something. This final meeting, Mr. Speaker, a few days ago was so bad that the Honourable Member for St. John's felt that there should be another chairman so that some action could be proceeded with. Another chairman was nominated and the government f<rces voted this chairman down. This Committee in its previous meeting had appointed a voluntary committee from the bar association to take into account all the Acts of self-governing bodies in the province. This committee was headed up by Mr.

Joe o•Sullivan, and I might say that they have done a great deal of hard work in compiling the results of all of the Acts of self-governing bodies in the province, and you know, Mr. Sp:laker, when the meeting was called last week Mr. 01Sullivan and his group were not notified of the meeting. We had to adjourn the meeting to give the chairman the chance to go to the telephone to consult with Mr. O•Sullivan to ask him if he would care to attend and to ask him if he had a report to make. Now that' s what' s been happening in this particular committee and I think the members of the House should be aware of this.

In my opinion, and in the opinion of others on the committee, it's been a farce; it's been treated as a smokescreen to cover up problems that exist in this area; and I think that when this committee adjourns again, certainly next year when they report progress, it will surely mean progress and not what the report is this time. MR. SPEAKER: The Honourable Member for Selkirk. MR. HILLHOUSE: Mr.

Sp3aker, I am speaking as a member of this committee, and in what I have to say I am not casting any reflection on the chairman of that committee because the chairman of that committee is not at all responsible for the lack of action on the part of the committee, he only having been appointed chairman on the morning of the 26th day of Feb ruary, 1969, but I do criticize the government most severely for their lack of action in respect of this committee. I consider that their lack of ac tion was

an act of the greatest discourtesy towards the members of the Manitoba Bar Association who agreed voluntarily, and gratuitously, to undertake the work of this association, and I think, Mr. Speaker, I should put on record, in chronological order, what transpired at that committee. When that committee meeting was called on the morning of the 26th of February, there was a wrangle over the appointment of the chairman. Finally, Mr. Steen was appointed chair man. Then the chairman was asked if he had anything to report; there was nothing to report.

I asked the chairman whether or no he had had any communication from the Manitoba Bar Asso ciation, as I had been ad vised that the Manitoba Bar Association had set up a committee to work on this particular subject and that {rofessors and lecturers from the Manitoba Law School en gaged in the work of that committee. I also advised him that I was of the opinim that that com mittee was pretty nearly ready to report. Just about that time the Honourable Member for St.

James, he produced a typewritten motion which was to the effect that this committee be aban doned and that a commission be appointed to look into this particular work. I pressed my point then on the basis of courtesy towards the Manitoba Bar Association, and asked the chairman if he would not make some investigation there to find out what had happened. He decided that he would and the meeting was adjourned for some 15 or 2 0 minutes while they got in touch with Mr. Joe O•Sullivan. Mr Joe o•Sullivan, who was the chairman of that committee, sub sequently appeared and he gave to the committee a

summary of the work that they had done to date and advised the committee within the course of the next three or four weeks that that committee would be ready to submit its report. Now I am bringing these things out, Mr. Chairman, to show you and to show the members of this House the lack of interest that this government is taking in these special committees that they're appointing. This committee was set up to do a work which was needed. The reason why the committee was set up was on the motion of the Honourable Member for St.

John's, and he is to be commended for bringing that motion into this House, but the attitude of the government was expressed through the Minister, the Honourable Provincial Secretary, who said that this was not a government motion. Now that was the attitude of the government members in that committee towards the work of the committee. Simply because that committee was not constituted initially by a government motion, they felt that they should not take any

part in it. Now I think it's a crying shame. There's two bills that were before this House that are being held up simply on account of the fact that that committee has not submitted any report, and I think it's a shame that the people of Manitoba should be faced with such dilatory tactics on the part of this government. This government wants to give everybody the impression that they are a government of action, that they're setting up this, that and every other committee to

March 4, 1969 63 (MR. IDLLHOUSE cont'd) ..... do certain things, and, Mr. Chairman, they're doing nothing. MR. SPEAKER: The Honmrable Member for St. John' s. MR. CHERNIACK: Mr. Chairman, I should start out by thanking the members of the Liberal Party for recounting the history of this committee and saving me the trouble. of doing that. I think it's quite clear that the government has been most neglectful in going ahead with the business of this Legislature and what was delegated to a committee .

The stupidity of it all is revealed by the fact that there is no party principle involved; it's not that it's a matter which involves either the Conservative Party or the Liberal Party or the New Democratic Party in sofar as platform is concerned.

When I presented this motion originally way back in 1966 - and there are some members of this House who were not even in the House when this was first brought in - it was greeted with a unanimous - and I'm sure it was unanimous - reaction by the House that this was a matter worthy of study, and then from year to year committees have been appointed which didn't meet, but - I mean didn't meet often - but on the occasion when it met last, which is over a year ago as I recall it, some definite lines of procedure were estaltlished by the committee as to what was to be done .

Incidentally, this matter's been dragging for so long that the Honourable Member for Selkirk has forgotten that the bills that were presented and referred to this committee were not referred on the last occasion but two times ago, or one time beyond that, so that those bills just died sort of a natural death, but much premature, simply because of what I call the stupid action of the government for not proceeding with something like that.

It would have been a matter to their pride only had the matter proceeded, but peculiarly enough the Honourable the Minister of Transportation- I think he's going to be called - is the one who said, "Well, what do you want from us? This is Cherniack•s idea and we're just going ahead with it. " Well, that• s absolutely wrong. This was the unanimous decision of this Legislature to proceed with it, and when we, the committee, discussed how we wanted to deal with the problem - and it's a difficult problem and it doesn't have obvious solutions - we decided that we wanted to know what is the situation in Manitoba now .

There was some 18 or 20 different Acts with different rules, conflicting principles involved as to how you establish these associations, as to what powers would be given to them. I recall that the question of citizenship arises in different ways. You hare to be a citizen of Canada in order to treat a horse, but you dOn't have to be a citizen in order to treat a human being, which may be a justifiable approach to the problem but it's certainly one that needs some kind of consideration.

You don't have to be a citizen to be a pharmacist but you apparently have to have applied for citizenship, and just what the distinction there is, I'm not clear on. This was gone into three years ago and the House considered then that it was important, and we said, let's study the existi ng situation.

Secondly, let's study what is happening in other jurisdictions because the problem is not unique to Manitoba, and I had occasion to re count to the committee the studies I had made, and what I had learned was the way in which these matters, and various aspects of them, were being dealt with in dher jurisdictions - Great Britain, Alberta, Oregon, California, New York and there are more that have studied an approach to this . There are important principles involved, so we said we would involve the Bar Association in the preliminary study as to what is being done so that we• d have the facts.

We would then try to assess the general principles on which they ought to be governed, where they ought to be handled, and then consider any further legislation. But again I use the word "stu pidity'' and I don't withdraw it.

We come along a week ago - well, less than a week ago, the day before the session was due to start - the first meeting of this committee, and the spokesman for the government and I assume tlui.t the Whip was the -· spokesman for the government, he may not have been - but he was ready on behalf of himself, if not of the government, with a mimeographed draft report of the Committee of Professional Associations, which I think was really something.

We met for the first time, we elected a chairman, and he already had printed in mimeographed form the report, a draft of the report that this committee would present, and that draft" report involved the appointment of a com missioner to be authorized to examine the statutes and regulations governfug all the professional and other vocational associations, their licensing, etc. Mr.

Speaker, where was the government, or its representatives, at all the meetings, the very few meetings of this committee which had dealt in the past with proceeding with the request to the Bar Association to do exactly what the government now came up with and said, "Let's have a commissioner. "

64 March 4, 1969 MR. DOUGLAS M. STANES (St. James): Mr. Chairman, I want to correct a matter. My attempt here was to bring in a motion of some help to the committee at that stage. It was not a report in any form; it was a suggested motion. MR. CHERNIACK: I appreciate the Honourable Member from St. James' remarks. The fact is, it reads: "D raft Report of the Committee on Professional Associations", and I didn' t acquire this by any surreptitious means. He pushed it across the table to me to have and I have it from him and it says: "Your committee recommends ...

" Now this may be a motion, because I suppose all reports start with a motion that the following be the report, but what I'm getting at, not only was the fact that he wanted to be helpful to the committee but that either he, or whoever else may have drawn this, was ignorant of the fact that the committee, the previous committee, had commenced to do certain work. This is really what I call stu pidity, in the sense that the government apparently didn' t know what the committee had done and the government has the majority of members on the committee -didn•t know what had been done.

It would seem to me that even the former chairman, who has been chairman for each d. these committees in the past, could not have read this proposal because had he done so he would have known, because he does know what has been done. So that the government proceeds as if nothing had been done and proposes, or one of the members proposes, that we start to do what we had already embarked on doing, and that is a study.

One of the important statements made by Mr. o• Sullivan, who agreed on behalf of the committee to voluntarily and without cc:st proceed with this very study, was that they had had no deadline and things proceeded in a ca!llal manner because the people with whom he was dealing, to whom he had delegated portions of tlE work, didn't have any impetus to proceed and have it done by a certain time . He said there was no deadline and we proceeded, and they've done a very large piece of work. They have almost completed the first step and a very voluminous job they did. Of course the governmeii: doesn't know that.

Well, I didn' t know it either but then I don't have the responsibility that the Ministers in the front row have of seeing that business of the Legislature proceeds.

But one can say, "You were a member of the committee." That has been said to me in the pastwhenihave complained about committees not meeting and someone said, "Well, you're a member of the committee; you had the same status as did any other member of the committee." So because I had that responsibility I did take the trouble to write to the Honourable the Attorney-General in his capacity as House Leader on two occasions - I think one was last August and the other letter was last October - I may be wrong in the dates but I have them here in case the Honourable the Attorney-General would like the dates, or anyone else.

I wrote and I pointed out that this committee and the other committee of which I am a member, Statutory Regulations, had not met and should meet because there was important business that it had to do, and I received a reply on very nice stationery of the Attorney-General, concise and brief - no use wasting too much verbiage on it - the reply of July 25th acknowledges receipt of the letters and the body, the main content of this letter is, "You can be assured that the committees will be con- __r. vened in due course, 11 and of course having been assured that, I knew they would be.

On Dec- ember 2O th I received a reply from him: "F urther to your recent letter I can advise you that you will be receiving, before long, notification of the next meetings of the committees of the House about which you were enquiring'', and I suppose it's not too long from December 20th until sometime in February for a meeting held in March, but that's the fact.

This was, as I say, a problem of a committee which I don't think required any appre hension on the part of the government, there was no reason for the government to fear the calling together of the members, no reason for the government to feel embarrassed for its failings, of which it has many, but in this respect the only failing was the very one of which they are guilty and which I have termed as being stupid. The only failing was not to call the meeting.

There is nothing else that the government should have done in connection with this project than to call a meeting and see that the work is done, because the chairman of the com mittee was - - there was no committee and therefore there was no chairman.

Had there only been one meeting called for five minutes to appoint that chairman, then assuming the same c,hairman would have been appointed as was appointed, I'm certain that the work would have l:ren proceeded with much more quickly, because having the responsibility and the authority he would have been in official communication with the Bar Association and would have proceeded to see that the work was done and ready and well advanced. I know that to be true because I know his interest in this; I know he recognizes its importance; I know he would have seen that

March 4, 1969 65 (MR. CHERNIACK cont'd) .... it was done. But not having had the opportunity to be appointed, I can understand what I assume was his reluctance to appear officious when he had no office to justify it. So that I can only say, Mr. Speaker, the government having been so stupid in the past in its failure to call meetings to see that this work was being done, may yet mend its ways. Wf!re getting closer and closer to an election and maybe it shouldn't have this stigma of lack of actim and a stupid approach and lethargic attitude.

Boy, the way they move, or fail to move, is something that they wouldn't like the people to see! People have lately seen that the First Minister has the ability to sit on his seat and insist on remaining until something happens. Well, that's a matter of immd:lility for which he has received credit, but the mobility that any government should have in regard to dealings of committees has yet to be seen.

Possibly they will proceed a little more hastily, and I would suggest, since I expect that in line with the recommendation that there will be a Imtion before us that a new committee be appointed to deal with this matter, and since it's obvious that on this side we have no confidence based on past records that the committee would be called to meet as soon as it should, I would suggest that the least that that resolution ought to do, and maybe all - not maybe - I think all resolu tions appointing committees should contain in their body the appointment of a chairman or of a convenor, so at least a finger can be pointed at a convenor by the members to say, "Here's a man; call a meeting.

" I think that• s a helpful suggestion, and I offer it in that straightfonard way as being a way of doing it because I am not aware of any Minister who has within his realm of responsibility the convening of a meeting of, let's say, this committee dealing with profes sionals. It doesn't to my mind fall in neatly into any particular department, and therefore al though I addressed myself to the House Leader when I wrote to him, I don't know whether he himself had the authority to call a meeting or to see that a meeting was called.

So I offer this suggestion for consideration that when committees are appointed by the House the reso lution should contain within it the appointment of a chairman. The goverrumnt knows in ad vance whom they're going to appoint anyway. Besides, they can always shift them around if they want to, just as we can members of the committee, that they put in there the name of the convenor so that at least he will know that it is his responsibility to do. Mr.

Speaker, I want only to point out that the criticism that has been launched against the government is a general one which the government I believe has earned, but the work of this committee I think is still an important one.

There is really great confusion in the Acts, and now we find the peculiar situation that two people appeared before this last meeting and indicated to the meeting that they were told by responsible civil servants that there's no use presenting a bill for one or another association or professional bodies as a Private Member's Bill because it would probably be routed to this committee and that this committee would want to consider llt.

They came ready to discuss with this committee proposed legislation which they wanted to bring in, and I don't fault anyone for their having been routed to the committee, ,.. except of course I fault the government for not having appointed one. But there are profes sional associations that are now in a dilemma as to how to proceed.

To come in the usual way would mean that they are possibly bringing in proposed legislation which would not be accep table in the light of the study that we should have had, and to come to this committee would not give them any sort of assurance that they are going in the right direction because the committee hasn't progressed that far.

I believe that the members of the committee that was in existence were anxious to pro ceed, and if they or anyone else appointed to the committee would have an opportunity to meet, there is much that they could do and much they could do for the welfare of the people who con sume the services offered by these professional associations .

Procedures by way of appeal, procedures for complaint, procedures for the public to be protected are all involved in this really important issue, and I would urge that the government mend its ways and see to it that a resolution is brought in quickly appointing a new committee and see to it that that committee is constituted so it can proceed to deal with those· matters which we know now will be coming very soon to the committee from the Bar Association sub-committee. MR. SPEAKER:' The Honourable Member for Rhineland. MR. JACOB M. FROESE (Rhineland): Mr.

Speaker, just a few words on this matter that has been discussed quite fully at this time. I appreciate the suggestion made by the Honourable Member for St. John's that a convenor be named to a committee who would be responsible for calling the first meeting. Failing that, I would suggest that all committees have their first

66 March 4, 1969 (MR. FROESE cont•d) .. .. meeting while the session is still on. This would involve no cost at all and certainly the committees wmld then be established and wmld be operative and that they would have a chairman, and also the objectives and so on could be outlin ed. I think it was only because of the Honourable Member for St.

John's presence at the committee meeting that we had the minutes of a previous committee meeting from the previous year which gave us some information as to what had transpired and what had happened, so that we as a result were in formed what had taken plac e previously and that a committee had been assigned some work and which later on reported. I sh ould mention one other thing, in that I along with the Member for St. James were not members of the previous committee and probably were not aware of what had been going on.

I am saying this not as an excuse on his part but certainly it could well be that he was not in formed as to what had transpired on previous occasions. MR. SPEAKER: Are you ready for the question? The Honourable Member for St. Boniface. MR. LAURENT DESJARDINS (St. Boniface): Mr. S}ll aker, I'd like to move, seconded by the Honourable Member for Selkirk , that the debate be adjourned. MR. SPEAKER presented the motion and after a voice vote declared the motion carried. MR. SPEAKER: Adjourned debate on the proposed motion of the Honourabl e Member for Winnipeg Centre. The Honourable Member for Gla dstone. MR.

NELSON SHOEMAKER (Gladston e): Mr. Speaker, I beg the indulgence of the House to have the matter stand once again, but if there is anyone else that wishes to speak today they can feel free to do so so far as I'm concerned. MR. SPEAKER: Does the honourable member have lea ve? -- Agreed. The proposed motion of the Honourable Minister of Municipal Affairs . The Honourable Member for Seven Oaks. MR. SAUL MILLER (Seven Oaks): Mr. Speaker, I would ask the indulgence of the House to let this matter stand. MR. SPEAKER: Agreed.

Before the Orders of the Day, I would like to direct the atten tion of the honourable members to my gallery and inform them that a major industry in Manitoba is represented in the House today in the person of Miss Marilyn Muirhead. Miss Muirhead was crowned the HQney Queen for Manitoba on March 3rd. For the further edifi cation of the honourable members, Miss Muirhead will travel to Ottawa shortly to take

part in the National Honey Queen Contest and she is accompanied today by Mr. and Mrs Bob Dougl as, President of the Manitoba Beekeepers• Asso ciation of Manitoba. On behalf of all the honourable members, I welcome you here today and wish you every success in Eastern Canada. Orders of the Day. The Honourable the Attorney-General. MR. LYON: Mr. Speaker, on Friday last I was questioned by the Honourable the Member for Inkster concerning a complaint by the Manitoba Indian Brotherhood against Magistrate Isaac Rice. I can now report on that situation.

On receiving the complaint from the Indian Brotherhood a transcript of the telecast was obtained -- the telecast that is of the portion of the Public Eye Program of February 5th, and it was reviewed.

Last weekend when Magistrate Rice was released fran hospital -- and I interject that as honourable members may already know the Magistrate has recently been hos pitalized and on the advice of his physician will require a further extended period of sick leave -- on his release from hospital the complaint was made known to the magistrate and I have now received his comments thereon and I would like to read this to the House. It's a letter ad dressed to me dated March 3rd, 1969 . "Dear Mr. Lyon: Re: Manitoba Indian Brotherhood.

I have received from Chief Magis trate Gyles a copy of the letter dated February 24th, 1969, which he received from Messrs . Grafton Dowhan and Company on behalf of the Manitoba Indian Brotherhood in which it is sub mitted that remarks made by me on a CBC TV program, The Public Eye, broadcast on Feb ruary 5th, 1969, were defamatory of the Indian people and indicated on my part a bias against them. Without giving any consideration to whether or not on a fair

interpretation of what I said my remarks reasonably could be held to be defamatory, I am aghast at the mere possibility that they could have been so understood. I assure you that I had no intention whatever of de faming our Indian fellow citizens. I am too acutely aware of the problems that afflict them without adding that of being defamed, and I hasten to offer my most sincere apology for having

March 4, 1969 67 (MR. LYON cont'd) ..... said anything that could lend itself to any such

interpretation. As regards bias , I am not conscious of any except to the extent that a deeplyfelt regard for our Indian and Metis fellow citizens, particularly those who have come before me as a magistrate, and an abiding desire to do everything in my power to help them properly can be described as a bias. I would appreciate your conveying the contents of this letter to the Manitoba Indian Brotherhood in your capacity as the Minister responsible for the good adminis tration of jus tice in Manitoba. 11 Signed •'Yours sincerely, Isaac Rice . 11 Mr.

Speaker, after reviewing the whole situation I can report that I accept Magistrate Rice's statement of his position and am advising the Indian Brotherhood that I do not propose to take any further action on their complaint. MR. SPEAKER: Orders of the Day. The Honourable Member for Hamiota. MR. EARL DAWSON (Hamiota): Mr. Speaker, I'd like to address my question to the Minister of Mines and Natural Resou rces. You recall yes terday I asked you about the problem of deer in the Rivers area.

I have information, and I wanted to know if you are aware of the same thing, that there is a herd of 60 deer floundering in snow up to their shoulders without any food nearby and there is already one carcass lying there. Are you aware of this problem? HON. HARRY J. ENNS (Minister of Mines and Natural Resources) (Rockwood-Iberville): Mr. Speaker, this specific incident has been brought to my attention. MR. DAWSON : My ques tion -- another one -- is: Are you prepared to do anything about ·\,._ this ? I feel it's an emergency. So do the people of that area. HON. J.

DOUGLAS WATT (Minister of Agriculture) (Arthur): Mr. Speaker, before the Orders of the Day, I'd like to draw your attention to a slight error in Hansard of March 3rd. In the second line in my remarks near the top of the page reference is made to a polled heifer bull. That should read polled Hereford, Mr. Speaker. HON. GURNEY EVANS (Minister of Finance) (Fort Rouge): Mr. Speaker, I'd like to lay on the table of the House the following reports: A Return under

Section 1-ll-2 of The Insurance Act dated March, 1969; report on the annual examination of acco lllD.ts as required by The Mental Health Act for the year ended March 31st, 1968; statements �repared pursuant to

Section 20 of The Public Officer's Act as amended by

Chapter 56 of the Statutes of Manitoba, 1955, as at February lOth, 1969; a cow of the Public Accounts which have already been sent out to mem bers of the Legislature; a detailed statement of all remissions made under the authority of

Section 50 of

Chapter 272 of the Revised Statutes of Manitoba, 1954 since the last similar statement was submitted to the Legislature-- this document dated March, 1969; a report of the Treasury Board on the statement of public accounts for the Province of Manitoba for the fiscal year ending the 31st of March, 1968; the Manitoba Hydro-Electric Board's 17th Annual Report for the year ended March 31st, 1968; the 60th -- correction there-- the Annual Report 1967-68 of the Manitoba Telephone System. MR. ENNS: Mr. Speaker, I wonder if I could also take this opportunity to lay before the House th

Document details

Collection	Manitoba — Debates (Hansard)
Citation	28-3-4
Type	hansard
Volume / chapter	28th 3rd hansardpdf 4.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	4c3d07be6efd43818790f0e469387b744f5a8ed8

Source file is stored in the law ingest library (pdf).