1989 Legislative Session: 3rd Session, 34th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, JUNE 8, 1989

Afternoon Sitting

[ Page

7325 ]

CONTENTS

Routine Proceedings

An Act to Amend the Vancouver Charter (Bill PR402). Mr. Mowat

Introduction and first reading –– 7325

Oral Questions

Milk Board jurisdiction. Mr. Barlee –– 7325

Western Media Institute. Mr. Jones –– 7326

Accreditation of private colleges. Mr. Jones –– 7326

Dumping of Expo soils. Mr. Cashore –– 7326

Knight Street Pub investigation. Mr. Sihota –– 7327

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. Mr. Couvelier)

On vote 25: minister's office –– 7328

Mr. Clark

Mr. Sihota

Mr. Blencoe

Mr. Harcourt

Ms. Marzari

The House met at 2:06 p.m.

HON. MR. VANT :

I'd like to introduce two budding young artists who are in the gallery

this afternoon. It's National Transportation Week in Canada, and in

celebration of this event my ministry held a poster contest for junior

secondary students throughout the province. The theme was the

importance of transportation in British Columbia, and we received some

masterpieces. Two posters stood out from the crowd, and their creators

are our contest winners. So I'm very pleased today to introduce to the

House Rodney Sanches of Terrace, in the Skeena constituency, and Bob

Culver of Kimberley, in the Columbia River constituency. They are in

Victoria for the very first time. Would you please give Rodney, Bob and

their mothers a warm welcome.

HON. J. JANSEN :

Visiting in the House today from Wageningen, Holland, are my uncle and

aunt, Mr. and Mrs. A. Jansen, with their grandchild, Miss M. Roelofsen.

My brother-in-law and sister, Mr. and Mrs. Vermeer, are also here from

the wonderful constituency of Chilliwack. Would you please make them

welcome.

MR. CASHORE : Visiting in the gallery and

precincts today are 44 grade 5 and grade 7 students from Our Lady of

Lourdes School in Coquitlam. They're here to learn about democracy.

They are accompanied by their principal, Mr. Mike Boreham, and teachers

Mr. Brian Fader, Ms. Christine Aldus and Ms. Anna Maria Cusati. I ask

the House to join me in welcoming them.

MR. PERRY :

I'd just like to welcome, on behalf of the House, the members of the

B.C. Pharmacists' Society who are visiting today. I know the Minister

of Health (Hon. Mr. Dueck) is away, and I'm sure if he were here he

would join me in making them welcome.

MR. PELTON :

Hon. members, in the members' gallery today we have some visitors from

Ottawa, Ontario, Irmgard and Stan Jaknunas. Would you please give them

a warm welcome.

HON. MR. REID : In the precincts

today is a constituent of mine, a fellow I have a lot of respect for,

Father Nunzio Defoe. Would this House give him a special welcome.

MR. MOWAT :

I too would like to welcome the B.C. Pharmacists' Society to the House

today. They really do look after the health, safety and well-being of

our citizens, and I think they are some of the most underrated members

of the health care team.

MR. DAVIDSON : On behalf of my colleague the hon. Minister of Agriculture

and Fisheries (Hon. Mr. Savage) and myself, I would like the House to bid a

warm welcome today to Mr. Steve Ferguson, Joyce Williams and Yashoda Reddy from

Seaquam Secondary School, along with six students.

Introduction of Bills

AN ACT TO AMEND THE

VANCOUVER CHARTER

Mr. Mowat presented a bill intituled

An Act to Amend the Vancouver Charter.

MR. MOWAT :

This bill will amend the Vancouver Charter in a number of important

ways. Most of the provisions are of a housekeeping nature, to bring the

charter into accordance with the Municipal Act. There are some sections

of note, however.

Section 5 provides that if a building

inspector decides that a structure should be boarded up for safety

reasons, the owner of the structure shall pay the costs of that

procedure.

Section 6 gives the city the power to

temporarily close streets to allow for a number of activities. Among

them is the making of motion pictures and television shows, a

burgeoning business and industry in Vancouver, as the members are well

aware. It also allows the streets to be closed for the street

celebrations often staged in Vancouver — our very many

multicultural activities in the community, such as Greek Days on West

Broadway and Italian Days on Commercial Drive. They will now be able to

proceed more easily, thanks to this provision.

Section 7

gives the power to regulate the destruction or removal of trees. As I

am sure you know, there have been some disagreements in some of the

neighbourhoods when owners wish to clear their property for development

while nearby residents would like to see some of their stately trees

saved.

Bill PR402 introduced, read a first time and

referred to the Select Standing Committee on Standing Orders, Private

Bills and Members' Services.

Oral Questions

MILK BOARD JURISDICTION

MR. BARLEE :

To the Minister of Agriculture. The British Columbia Milk Board just

lost its court case concerning industrial production outside the

jurisdiction of the Milk Board. The minister stated today that he

intends to change the present law to protect the members of the milk

marketing board. Can the minister assure the House that he will move

quickly to change the law and once and for all stop this small band of

milk producers, who by their own admission are friends of the

government, from doing an end run around the Milk Board?

HON. MR. SAVAGE :

As my hon. critic has reported, the court decision this morning was to

not allow the Milk Board to appeal to the Supreme Court of Canada. We

have looked at the Milk Industry Act itself, which will require some

amendments. Al-

[ Page 7326 ]

though

I share your views that we need to change it, I obviously cannot speak

to the time-frame, because that would have to be in a policy decision

relative to drafting amendments or whatever before they're brought

forward. I can't speak to the time-frame, but let me assure you that

I'll do my best.

WESTERN MEDIA INSTITUTE

MR. JONES :

I have a question for the Minister of Advanced Education and Job

Training regarding the Western Media Institute. On May 18 the minister

indicated to this House that he had asked for a report and

recommendations several weeks previously and that he was dealing with

this matter very seriously. I would like to ask the minister at this

time: has the report been completed and is he willing to make it public?

HON. S. HAGEN : I have not yet received the, report.

MR. JONES :

To my knowledge, the students of this school showed up on June 1 to

find the doors closed. I wonder if the minister has taken any steps to

ensure that this situation is remedied.

HON. S. HAGEN : I'll take the question on notice.

ACCREDITATION OF PRIVATE COLLEGES

MR. JONES :

A new question to the same minister. Does the minister still feel that

one staff person is adequate to oversee the operations of over 400

private training institutions in this province? Is he still unwilling

to bring in an accreditation process which would serve to protect the

students in these situations?

HON. S. HAGEN : As I said previously, Mr. Speaker, I will deal with that when I receive the report from my ministry.

[2:15]

DUMPING OF EXPO SITE TOXIC SOILS

MR. CASHORE :

Mr. Speaker, I have a question to the Minister of Environment. I'm glad

to see that he has returned to his seat. On June 1, during the

minister's absence, the acting Minister of Environment told this House

that the province would assume complete responsibility for cleaning up

the toxic soil removed from the Expo site and would seek to recover

costs from responsible parties if this dumping was unauthorized.

Yesterday the minister told this House that the persons who removed

those toxic soils would be responsible. Does this mean that neither

you, Mr. Minister, nor BCEC gave permission for the contractors to haul

away and dump this toxic soil?

AN HON. MEMBER : Who's right?

HON. MR. STRACHAN :

We're both right. I'm trying to sort this one through. Since we have

allegations only of the soil being contaminated and that it was known

to be contaminated by the person who removed it, I don't think it's

appropriate for me to comment further until those allegations are

proven or disproven. We're making an assumption about a mystery area at

this point.

MR. CASHORE : A supplementary, Mr.

Speaker. This question is not a difficult one, and I'm sure the

minister can answer it. Did you or did you not give permission for the

dumping of Expo soils at Westwood, at the foot of Penzance Drive in

Vancouver harbour and at other locations around the lower mainland?

HON. MR. STRACHAN : No, I wouldn't have. I was Deputy Speaker during those days.

MR. CASHORE : The point is well taken. Did your ministry give permission?

HON. MR. STRACHAN : I'll take that question on notice.

MR. CASHORE :

I have a question to the Minister of Crown Lands. Did BCEC give

permission for the dumping of this toxic soil? What is the minister's

position on whether the taxpayers should be stuck with the cost of

cleaning up?

HON. MR. DIRKS : It's a little difficult

to find out who should answer, because it's difficult to understand the

question, and certainly the way it's worded, I object wholeheartedly.

What I said the other day was that we would investigate, and if there

were indeed contaminants on that Westwood site, we would clean them up.

MR. CASHORE :

A question to the Minister of Government Management Services, Mr.

Speaker, on the same subject. Did BCEC give permission for the dumping

of its toxic soil, and what is your position on whether the taxpayers

should be stuck with the cost of cleaning up?

HON. MR. MICHAEL :

The question has certainly been well canvassed, as the member, I'm

sure, is aware. Had he been present during my estimates — and I'm

sure he was present during most of the estimates, and in those areas

where he wasn't present, I'm certain he read the Blues and was kept

posted of all the questions being asked and the answers being given

regarding the cleaning up of the Expo site — I'm sure that the

member would recall that this government, through me, made it very

clear to the House and to the people in the province of British

Columbia that this government is indeed very proud of the position that

it has taken regarding the cleanup of the soils on the Expo site. We

have undertaken without any equivocation that we will meet the

standards as set down by the Minister of

[ Page

7327 ]

Environment. We will see that those soils are

delivered to the purchaser of those lands to the standards as set by

the ministry, and we are proud of that. Perhaps it may cost them money,

but money is no object when it comes to the environment, Mr. Member,

and this government is very proud of the position that we have taken on

that.

MR. CASHORE : Another bad deal for the taxpayers of British Columbia.

new question to the Minister of Environment. Has testing been completed

at all the sites where soils from Expo are believed to have been dumped?

HON. MR. STRACHAN :

If the operative word is "completed," the answer is no. We have been

doing some testing at the Westwood site. We found some hydrocarbons and

some polyaromatic hydrocarbons, but that could be from refuse asphalt,

and that's the extent of it at this point.

KNIGHT STREET PUB INVESTIGATION

MR. SIHOTA :

Question to the Minister of Labour. Has the Minister of Labour had an

opportunity to talk to Mr. Doney with respect to his knowledge of the

conversation between Mr. Hick and Mr. Poole and when he became aware of

that conversation?

HON. L. HANSON : The question the

member refers to was taken on notice and will be addressed in

appropriate time. Mr. Speaker, in recent days this issue has been

addressed thoroughly in this Legislature. Again, we have had the

ombudsman's report on it; we've had the Crown counsel look at; we've

had the RCMP look at it. As a result of that, a number of actions were

taken by various members, and there is simply nothing to add to that.

It's almost two years old; it's history.

MR. SIHOTA : I guess Mr. Doney has been in meetings seven days a week 24 hours a day.

Question

to the government House Leader. Does the government intend to call Mr.

Doney to the bar of the Legislature to answer questions as to his

knowledge of these events?

HON. MR. RICHMOND : First

of all, I doubt very much if the question is in order. I think that the

young member for Esquimalt-Port Renfrew confuses this place with a

court of law. Perhaps he should return to the courtroom and

cross-examine people in a court of law and not in this House. The

answer to his question is no.

MR. SIHOTA : If it's

the government's position that they don't want to hear what Mr. Doney

has to say, then it seems to me that the government House Leader wants

to further a cover-up.

Interjections.

MR. SPEAKER : Order, please.

MR. SIHOTA : Yesterday the minister confirmed that he had read the report....

Interjections.

MR. SPEAKER :

Order, please. Would the government House Leader take his seat for a

moment. I have noticed in the last few days that members are making

comments that cut a very fine line. If one member wants to make them,

it's going to happen on both sides. I would ask members to take some

care when they are asking questions and making accusations, and this

House will function a lot better. If we're going to have free speech in

this House, we have to be very careful how we phrase our questions and

make sure the answers are done the same way.

HON. MR. RICHMOND :

On a point of order, I find the term "cover-up" offensive and

unparliamentary and would ask the member to withdraw that remark.

MR. SIHOTA : I'll withdraw the remark.

Yesterday

the Minister of Labour confirmed that he had read the report prior to

its issuance at a press conference and that no changes had been made by

him to reflect his knowledge of conversations between Mr. Hick and Mr.

Poole. Does the minister not agree that it's fair to say he chose then

to cover up that matter?

HON. L. HANSON : I would again ask the member to withdraw the reference to cover-up.

MR. SIHOTA : I put it in a different vein.

SOME HON. MEMBERS : Withdraw! Withdraw!

MR. SPEAKER : Order, please. The member has asked the member to withdraw.

MR. SIHOTA :

Fine, Mr. Speaker. I'll withdraw the word "cover-up." Could the

minister then explain why it was that he chose not to correct the

report that was issued under his signature to reflect the conversation

between Mr. Hick and Mr. Poole?

HON. L. HANSON : I

guess I have some difficulty in referring to the member as being old

and tired, because obviously he's not a very old man, but his questions

certainly are very old and very tired. The fact is, the issue has been

carefully scrutinized by the ombudsman. It has been carefully

scrutinized by a police investigation and by Crown counsel. Appropriate

action was taken. I'd like to point out again that this is question

period, not history time.

MR. SIHOTA : I guess the minister's going to become history if this keeps up.

have a question to the Premier. We now have a confession that the

Minister of Labour sat quietly through a press conference while one of

his senior officials lied. We also had a confession yesterday

[ Page 7328 ]

from

the Minister of Labour that he read this report and chose not to deal

with the matter of political interference. Political interference is a

very serious matter. Is the Premier now prepared to ask for the

minister's resignation?

Orders of the Day

HON. MR. RICHMOND : I call Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

On vote 25: minister's office, $316,724 (continued).

MR. CLARK :

I want to begin my remarks by canvassing a very serious matter which

has come to my attention. It has to do with a breach of security that

has taken place in an office under the auspices of the Ministry of

Finance. I think this is something of the most serious nature, so I'd

like to ask a series of questions. Will the minister confirm that on

the weekend of May 13 and 14, the office of the comptroller-general was

burglarized?

HON. MR. COUVELIER : I understand that there was a break-and-enter. I can't confirm the dates, but that can be made available.

MR. CLARK : Can the minister inform the House whether the police were informed of the break-in?

HON. MR. COUVELIER :

I don't wish to comment any further on the matter, pending the receipt

of a full report. I don't think getting into that issue in any great

depth is in the interests of the citizens we're attempting to serve

here.

MR. CLARK : That's a curious answer from the

minister, and I want some specific answers. Will the minister confirm

that computer disks containing confidential information, confidential

material, were stolen during that break-in?

[2:30]

HON. MR. COUVELIER : No, Mr. Chairman.

MR. CLARK : Is the minister aware of what was stolen during the break-in?

HON. MR. COUVELIER : I'm awaiting a report on the matter.

MR. CLARK :

This happened more than three weeks ago. We're talking about a very

serious security breach. The minister has refused at the moment to tell

us whether the police were informed about the break-in. I want to ask

him again a very simple question: did they phone the police and report

the burglary?

HON. MR. COUVELIER : I've responded to

the question by informing the member that there is no useful purpose in

pursuing this any further. I am awaiting a full report, and when that's

received, then I might feel a little more comfortable about to what

degree disclosure or discussion is required in a public forum. But the

member has repeatedly described this as some sort of high-profile,

great, serious matter. My information is that the issue is far less

than that and not worthy of the description assigned to it by the

questioner.

MR. CLARK : Well, the minister can choose

to define a break-in where confidential material was stolen regarding

personnel matters or others that the comptroller-general is in charge

of as a minor matter. I think most citizens of British Columbia would

not feel that way. It seems to me that the minister has said that he

knows the magnitude of the break-in. It appears — while he might be awaiting a report — that

he has now confirmed for us that he is aware of it, and he's trying to

rebut our remarks by saying that it's not serious. Surely he can inform

the House whether the police were called regarding a break-in at the

comptroller-general's office. It's a very simple question. He has

indicated that he is aware of the break-in.

I assume the minister is discussing with the Premier some of these questions.

HON. MR. VANDER ZALM : We're listening.

MR. CLARK : You're listening out of one ear, I'm sure, Mr. Premier.

It's

a very simple question. The minister has indicated that he's aware of

the break-in. He even indicated that we're overstating the case. So I'm

giving the minister the chance to clear this matter up. Were the police

informed of the break-in at the time it happened?

HON. MR. COUVELIER : I'm advised that the police were informed.

MR. CLARK :

Okay. Can the minister inform the House whether the police were

informed that computer disks were stolen that contained confidential

information?

The minister is not going to answer that

question. Can the minister inform the House what type of public

information was stored in that

section of the comptroller-general's

office?

HON. MR. COUVELIER : Mr. Chairman, as I've

indicated earlier, I'm waiting for a full report on the matter. The

issue is of no substantial consequence. The value of the material that

the member is asking for information on is a couple of hundred dollars.

You know, I don't know what more I can add until we get a full and

complete report. In any event, it

[ Page 7329 ]

certainly is not worthy of the attention that seems to be directed to it.

MR. CLARK :

The minister wants to have it both ways. On the one hand, he said that

this is a minor matter, which is the kind of thing we've heard before

from governments. This is a minor break-in; don't be worried about it.

But on the other hand, he doesn't want to answer questions about a

minor break-in, because he's concerned about confidentiality and the

like, or he appears to be. It seems to me that there's an inherent

contradiction in the minister's answers.

I am advised that

the building was broken into and that this particular information was

stolen on the third floor. The very interesting question arises: why is

it that the burglars chose to bypass other floors, go to the third

floor and steal computer disks in that branch of government? The

minister can laugh. He has not done one thing in this House today to

allay any concerns about the information that could have been stolen.

Could he tell us what is stored in that branch of government on that

floor so that we can maybe allay the concerns of others about computer

disks containing information that were stolen?

I might add,

Mr. Chairman, that a computer disk is not a valuable item in itself;

you can buy them in the store for a couple of dollars. It's the

information on the list that we want to know about. Can he tell us what

sort of information is contained or filed in that

section of the

comptroller-general's office?

MR. CHAIRMAN : The Minister of Advanced Education asks leave to make an introduction.

Leave granted.

HON. S. HAGEN :

Mr. Chairman, it's a pleasure for me to welcome to the House this

afternoon some gifted students, grades 6 to 8, from Parksville Middle

School, accompanied by their teacher Ms. D. Arnold. Would the House

please bid them welcome.

HON. MR. COUVELIER : Mr.

Chairman, as I've said, I'm waiting for a full report on the matter and

until I receive it, I'm not in a position to respond to specific

questions. The issue, as I've said, is of relatively minor importance.

Had there been a higher degree of importance attached to it, obviously

the report itself and the subsequent completion of discussion on the

matter would have been expedited. It's not of major consequence, and we

will be getting a report in due course. Until I receive the report, I'm

not in a position to deal with specific questions of this nature.

MR. CHAIRMAN : Does the second member for Vancouver East have a new question?

MR. CLARK : Yes, Mr. Chairman. So far today, they have been all new questions, I might add.

Can the minister inform the House whether there were personal effects stolen during the same break-in?

The

minister refusing to answer questions does nothing to allay any

concerns or suspicions that people might have. It seems to me that he

cannot continue to say this is a very minor matter of no consequence,

which implies that he knows about it, and not deal with concerns. Will

the minister confirm that staff were told by the comptroller-general's

office not to discuss the fact that computer disks with confidential

information were stolen?

Is the minister aware that the comptroller-general communicated with his staff about this burglary?

Is the minister aware what the content of the comptroller-general's remarks were to members of the staff?

HON. MR. COUVELIER :

Mr. Chairman, I fail to understand the importance of whether a

supervisor would or would not have discussed an issue of an alleged

break and entry and what relevance that has to the issue. The picayune

questions seem to be designed to try to elevate the issue so that all

of a sudden this becomes some sort of valuable leakage of government

documentation, such that the citizens of the province are placed at

great risk.

I have told you repeatedly that I am waiting

for a full report. Based on the preliminary information that has been

made available to me, the issue is of minor consequence and not one

that has any earth shattering implications. Until I receive the report,

I'm not in a position to discuss details. We can go on here all day.

"Did somebody speak to somebody, and what was the conversation?" The

relevancy of all this is beyond me. In any event, I don't know what

more I can add to it at this point of time.

MR. CLARK :

I fail to see how the minister can tell the House that the public was

not at risk on the one hand, and on the other hand refuse to tell us

what it was that was stolen.

HON. MR. COUVELIER : I

have not refused to tell the member. I have told the member that when I

get the information, I'll be in a position to judge. But I have not

refused to tell him, so the record should be clear on that point. As

I've said, it doesn't justify this amount of attention, but if the hon.

member wishes to treat it in a serious way.... And I gather he does,

given the attendance of the members opposite. They're like a group of

vultures perching on a telephone wire, thinking they've got something

here that's worthy of all this attention. You can go back to your

offices, ladies and gentlemen; there's nothing here to justify the

attention you give it.

In any event, when the report is received I will be in a position to judge what should be done.

MR. G. JANSSEN : On a point of order. I take exception to being referred to as a vulture.

MR. CHAIRMAN : Perhaps the minister wouldn't mind withdrawing that.

[ Page 7330 ]

HON. MR. COUVELIER : I was looking for some sort of a winged creature. How about crow? Would that be more acceptable, Mr. Chairman?

MR. CHAIRMAN : I would still ask the minister if he would withdraw, please.

HON. MR. COUVELIER : I'm happy to withdraw vulture and substitute crow.

MR. CLARK : On a point of order. I would ask the minister to withdraw the last reference as well.

MR. CHAIRMAN : Would the minister please withdraw.

HON. MR. COUVELIER :

I'm surprised that members would find offensive the name given to one

of the most beautiful creatures that inhabit the planet. I happen to

think crows serve a very valuable function and hardly deserve to be

vilified in the House. They certainly don't deserve the assumption by

the hon. members opposite that there's something dishonourable about

being a crow. If that's the assumption, I'm surprised.

I am

generally intrigued with the thought that they should want that

reference withdrawn. Can I verify that the members find something

offensive about being called crows, Mr. Chairman?

MR. CHAIRMAN : If the minister would withdraw it would bring the whole matter to rest, and we could get on with vote 25.

HON. MR. COUVELIER : Mr. Chairman, I'm always pleased to follow your instructions. I take it that you feel I should withdraw that reference?

MR. CHAIRMAN : Thank you.

HON. MR. COUVELIER : Then I'll withdraw the reference.

MR. CLARK :

The minister said he has not refused to tell us what's in it, that he's

awaiting a report. I assume he has had some interim report on this

matter; therefore it would seem in order for him to inform the House

what the substance of the interim report was so that he can attempt to

convince the House that this is a trivial matter which should not

concern us. Given the minister's own logic, will he inform the House

what the contents of the preliminary investigation are?

MR. CHAIRMAN :

I'll just remind members, as I'm sure I did once this morning, that

while members are free to ask any question they wish, providing it's

relevant to the estimates that we're dealing with, there's no

compulsion for the person being asked the question to respond.

[2:45]

MR. CLARK : I appreciate the Chairman's remarks. The point I was making — and I'll make it again —

is that the minister's logic is that he will release the report when

the report is finished. Therefore it seems only appropriate, given that

he has already given a commitment to let the public know what's in the

final report, to let the public know what's in the interim report; in

other words, what he is aware of at this point.

I know the

minister does not have to respond, but the force of his own logic would

indicate that he respond with what he knows while he's awaiting the

final report. Could he tell the House what he knows to date about what

he has mentioned repeatedly he thinks is a trivial matter, and then

subsequently tell us what comes out of the final report?

MR. SIHOTA :

The minister has a preliminary report, obviously, because this break-in

occurred about three weeks ago. Could the minister advise this House

why he's not prepared to share with us the content of that preliminary

report?

HON. MR. COUVELIER : I have said I haven't got the report. How can I share something I don't have?

MR. SIHOTA :

Just to help the minister recollect what he said, he advised us, to use

his own words, that he had a preliminary indication of what had

transpired — a preliminary report, shall we say. Could he advise

the House just what the contents were of that preliminary report? If

he's not prepared to do so, could he explain why?

HON. MR. COUVELIER :

I'm not going to feed the flames of assumption and supposition. I'm

waiting for a full report with all of the facts. It would be totally

inappropriate for me to go along with this attempt to magnify the issue

far beyond its legitimate proportions. I'm not going to feed that. The

plain fact is that I was advised of the alleged offence.

MR. WILLIAMS : Alleged? It didn't happen?

HON. MR. COUVELIER :

I understand that the word "alleged" is traditionally used in legal

circles until someone is found guilty of an offence. It was in that

sense that I used the phrase, Mr. Chairman.

In any event,

having been informed and having been given the belief or the feeling

that nothing of great import was missing, there appeared to be no

particular purpose to the event. It seemed to be a random thing. A full

report is being prepared, and when it's received I can consider what

further steps should be taken. In the meantime, until it arrives, I'm

not prepared to embark on conjecture or alleged consequences. That

would be less than responsible.

MR. SIHOTA : I just

want to ask the minister this. He says he doesn't want to fan the

flames of suspicion here. If he looked at this, he'd recognize that it

is an opportunity for him to suppress any suspicion by advising the

House what transpired. If he continues

[ Page 7331 ]

dodge the question and doesn't provide any clarity as to what was taken

and the circumstances of the taking, then he simply heightens the

suspicion. Quite frankly, the minister should utilize the opportunity

to explain. He says that nothing important is missing. Could he then

tell the House what is missing?

MR. CHAIRMAN : Hon.

members, the Chair has been listening very carefully to what has

transpired over the last 30 minutes or so. It seems to me that we must

bear in mind our rule about tedious repetition, because even though it

is being put in a different way, I've heard the same question asked

four or five times.

MR. CLARK : Can the minister inform the House when he asked for the report?

HON. MR. COUVELIER : Obviously when I received the first preliminary information.

MR. BLENCOE : When was that?

MR. CLARK :

The question from my colleague is one I would ask: when was he informed

of the break-in? The break-in was discovered on May 15. How close to

that date did the minister find out about it, and did he request a

report?

HON. MR. COUVELIER : We'll check my records.

I don't even know if I was in Victoria on May 15 or May 16, but I'm

satisfied that when I returned to my desk, the preliminary information

was there. I don't want to mislead the House as to dates, in terms of

when I knew, as if this was some sort of Watergate interrogation. In

any event, as I've said, I don't have any more information to provide

the House until I receive the full report.

MR. CLARK :

The minister is implying that he found out about it shortly thereafter,

at the first possible opportunity. Could he tell the House who informed

him of the break-in?

HON. MR. COUVELIER : No, I

can't. I don't remember. It might have been my deputy. It might have

been one of the assistant deputies. It might even have been my

secretary. I'm sorry, I don't have that information.

In any

event, Mr. Chairman, when I receive the information I'll be pleased to

deal with it. If the members persist in trying to make something out of

this, I think what I'll do is just have the staff make careful notes of

the questions, and we will take them as notice and attempt to get back

to them. That's about the best I can do. I don't see any purpose in me

jumping up here, just telling you what little I'm prepared to share at

this time.

MR. CLARK : Could the minister tell the House who he asked to do the report?

Interjection.

MR. CLARK :

Mr. Chairman, that seems to me to be a pretty straightforward request,

which does not require notice. The minister does not require research

to answer it. The strength of his answers in the House this afternoon

has totally been on waiting for a report. If he wants to rely on that

as a defence, it seems incumbent upon him to tell the House when he

asked for the report, who he asked to do the report and when the report

is likely to be tabled, so that further questions can flow from it.

Those are three elementary questions that I'd ask the minister to

answer now.

MR. SIHOTA : The minister must surely

have left it up to somebody. He must have provided a deadline for the

report. What is the deadline for the report? That's not a difficult

question.

Will the minister confirm that in the preliminary report — which he obviously got sometime in the last three weeks —

was there any reference to the loss of computer disks? I don't think

that is required to be on notice. The minister can just tell us: were

computer disks taken? It's a yes-or-no question. Is the minister

prepared to stand up and answer that very simple question: were

computer disks taken?

MR. BLENCOE : I think it's

incumbent upon the minister to answer some basic, fundamental questions

about, in his words, an alleged break-and-enter. My colleague has

asked who you requested to do the investigation or the report. I don't

think you can just take that on notice. That's a very fundamental

question, and we'd like to know in this chamber who the minister asked

to do the report, what time-frame was given to report back to the

minister and whether a break-in that happened three weeks ago.... The

time-frame that elapsed between that break-in and the minister asking

for a detailed report.... There may be some concern that that is far

too long a period.

The question is a very straightforward

one. Who did the minister request to do the report, and in what

time-frame was that request made? I think the people would like to know

those answers before we proceed with this issue.

[Mr. Rogers in the chair.]

MR. CLARK :

The minister wishes to confer with his staff, and we want to give him

every opportunity to answer the questions he's chosen not to. So if the

Chair will bear with me for 20 seconds, we'll see whether their

discussion bears any fruit, so to speak.

MR. CHAIRMAN :

As the committee has already been advised, there is no requirement for

a minister to answer a question. He may choose to answer a question,

but there is also a requirement for order. If the matter has been

thoroughly canvassed, there's a point in time at which the Chairman

must ask you to move on.

[ Page 7332 ]

MR. CLARK : I will then move on. We've come to expect this kind of stonewalling from many members of cabinet.

HON. MR. COUVELIER :

I find the reference to stonewalling offensive and unparliamentary. I

have repeatedly told the members of the House that I am waiting for a

full report. The members of the House are aware that the police have

been informed; that implies court action.

MR. CHAIRMAN : Is the minister asking for a withdrawal of that particular word?

HON. MR. COUVELIER : Yes, Mr. Chairman, I was going to ask for a withdrawal.

MR. CHAIRMAN :

When these matters come before the committee, if a minister or a member

wishes to ask for withdrawal, it would be nice if we would just bring

the matter to the Chair's attention and ask for the offending word....

It is offensive according to the standing orders, because it imputes an

improper motive. The Chair must ask the second member for Vancouver

East to withdraw.

MR. CLARK : I'm happy to withdraw

if that's offensive. I'm not conversant with all the words we are not

supposed to use here, so I strayed into that. I'll have to study to see

which words are allowed. I wonder how the minister would characterize

his remarks today, which are essentially silence in the face of

questions. We know the Minister of Finance has a thesaurus in his desk

which he uses or reads every day, because he's good at those words.

will take this opportunity to move on to another issue, which is the

question of Principal Trust and the government's inaction in that

regard. To kick off the debate, I would ask my colleague the member for

Esquimalt-Port Renfrew (Mr. Sihota) to begin debate on that section.

MR. SIHOTA :

I'd still like to know how the minister would characterize his response

to the previous set of questions. Perhaps the minister could tell us

what word he would use to describe his actions.

MR. CHAIRMAN :

I'm not so certain that's a ministerial responsibility, because it

doesn't follow that it's the minister's responsibility to find what

words are parliamentary or unparliamentary. However, if you're asking

adjectives he may choose to use, he may choose to answer. We'll try to

see if that's in order.

MR. SIHOTA : That's okay. I

want to raise the matter of Principal Trust. I do so because I think

it's tragic the way in which this government has dealt with people who

have had their financial security stripped away from them by the

collapse of Principal Trust. Many of the people involved are seniors;

many of the people involved had put their money away in a rainy-day

account to attend to their needs, should and when they decide to

retire. In most cases, they had gone with some care to select very

conservative investments to make sure that the money they had worked so

hard to save in their working lives would generate some level of income

later on in their lives. To others who are younger, the purpose was to

make sure money was put aside now that could grow and provide them with

a measure of comfort to deal with their needs in the future, whether it

be kids' education, personal retirement, paying off the mortgage or

whatever.

[3:00]

The government was seen as a group that would protect that

investment. Many investors have relied upon the representations of the

company that their funds were guaranteed and felt secure in that. Many

more relied on the fact that all of this was regulated by the

superintendent of brokers. Many more found comfort in the fact that the

Investment Contract Act was there to protect them. Others were led to

believe that the Canada Deposit Insurance Corporation would secure

their funds.

The combination of those events led people to

believe that the money they were saving for themselves was going to be

secure. It now turns out that there was a collapse of Principal Trust

and, with it, a critical failing of the regulatory process. Some

governments in Canada have recognized their responsibility to deal with

that regulatory failure. They have chosen to provide measures of

assistance to the people who were deeply affected by the Principal

Trust situation.

This government in British Columbia, in my

view, has been noted for its insolence in dealing with these people. It

has chosen to provide little of the kind of financial assistance that

was afforded to investors in Alberta. It has been said that these

people.... The Premier, who I see is in the House, is the one who made

this comment. He inferred that these people are gamblers, that they

risked their funds and, as a consequence of that risk, there is no need

for the government to provide any assistance. This totally overlooks

the nature of the investment that these people made.

The

Premier has been asked on several occasions to apologize for his

statements in that regard, and to date he hasn't. As I say, he is in

the House, and perhaps he can use this opportunity to put forward an

apology to the people he offended by those comments. I will let him be

the determiner of whether he wishes to respond to what I have said.

At the same time, the provincial government — to the Minister of Finance —

has said that it "does not matter a whit" what the ombudsman will find

in this case, that the government will not be prepared to live by his

recommendations. It is really astonishing, when you consider the role

of the ombudsman in our society and the obligation that flows to

government to attend to his reports and recommendations. To say in

advance of his report that it does not matter a whit what he will be

saying is, I think, a sad indication of

[ Page 7333 ]

the lack of sensitivity that the minister and his government are showing to these people.

Most

recently, the government of Alberta paid out a number of costs

associated with this to investors. It paid out the costs of the Coopers

and Lybrand accounting and review of the matter. It represented a small

percentage — about 2 percent — of the total money lost. This

was a payment made as a gratuity by Alberta to the investors. The

province of Alberta recognized that Principal Trust would have to incur

some costs in the winding down of its affairs, and it felt that

investors should not have to pay those costs.

It shows a

gratuitous action to compensate the people in Alberta with that 2

percent of the overall costs. That was not the case in Saskatchewan and

British Columbia. My question to the minister is this: is he now

prepared to, in the same fashion that Alberta has, without prejudice

and on a gratuitous basis, pay out those costs and reimburse British

Columbia investors?

I see that the minister is occupied

with a conversation with another minister, and I will follow him back

to his seat and ask him now for a response to that question.

HON. MR. COUVELIER : I heard parts of the preface. I didn't catch the question. Was there a question in there somewhere?

MR. CHAIRMAN : The member for Esquimalt-Port Renfrew did have a question, but he will repeat it, I gather.

MR. SIHOTA : I think that those investors in Principal Trust, when they read this extract from Hansard ,

will be most disappointed to learn that the minister has chosen to walk

off and talk to a colleague and not pay attention to the comments I am

making on their behalf. Nonetheless my question to the minister is

this: will the province of British Columbia, on a gratuitous basis, as

has the province of Alberta, pay out those accounting and other

associated costs incurred to Coopers Lybrand, and compensate the

investors for that 2 percent loss?

HON. MR. COUVELIER :

That represents future government policy. I certainly don't intend to

discuss those options here in the House prior to discussing them with

my colleagues.

MR. SIHOTA : I'm not asking as to

future policy. The Minister of Finance knows, of course, what dollars

have been put aside by the government for various needs within his

budget. Is he saying that there is no money — because he is responsible for the Principal Trust situation — and that his budget does not make provision for this type of payout?

MR. CHAIRMAN : The Minister of International Business and Immigration seeks leave to make an introduction.

Leave granted.

HON. J. JANSEN :

In the House today are 75 grade 5 and 6 students from Agassiz, the corn

capital of the world. They are here with their teachers, Mr. Fraser and

Mrs. Froehlich. Would you please make them welcome.

MR. SIHOTA :

I will ask the minister again: is there no provision within his

ministerial budget to attend to this need? Given the fact that

Principal Trust falls under his mandate, is he saying that there is no

money allocated in this year's budget to attend to this need?

HON. MR. COUVELIER : Mr. Chairman, that relates to future policy, and therefore it is out of order.

MR. SIHOTA :

Mr. Chairman, I would ask that you make the determinations as to what's

in order and what's out of order, not the Minister of Finance, who

chooses to be both the minister who's being asked questions and the

member of this House who decides whether or not questions are in order.

wasn't asking for future policy. I am asking the minister what

provision is made in this year's budget. We are in the middle of

estimates. We're talking about the minister's budget, and I am asking

what provision is made in his budget to attend to this need. That's not

a matter of future policy, I would say, Mr. Chairman. It's a matter of

asking the minister what is contained in the budget he is asking us to

approve. We want to know, before we decide to approve or not approve

his budget, whether a provision is made in this regard. It's a very

simple question; it's not a matter of future policy.

MR. CHAIRMAN :

On the matter of what's in order and not in order, that's correctly the

determination of the Chair. However, when a minister identifies

something as future policy, then the decision as to whether or not the

minister wishes to speak on the matter is entirely up to the minister.

As has been pointed out to the committee before, there is no

requirement for a minister to answer a specific question.

Having said that, who wishes to speak next on vote 25?

MR. SIHOTA :

I do. This is just a little infuriating. Is this now the practice of

all of the ministers? The minister laughs, as if he finds some joy in

not answering questions. I'm asking the minister a very basic question.

The matter of future policy is whether or not the payment will ever be

made. That's something that's clearly a matter of future policy, and

that's what I interpret the minister taking exception to. But I have

reworded my question to deal with whether or not provision has been

made in his budget to attend to that need, that's all. We're just

asking what's in his budget.

HON. MR. COUVELIER : Mr. Chairman, any decision to expend funds is a government decision. Insofar as there has been no announcement on spend-

[ Page 7334 ]

ing funds for that purpose, it is future policy, and therefore my objection is quite in order and appropriate.

MR. SIHOTA :

Well, there is no announcement as to whether or not the government

intends to meet the payroll next week, but there is a provision in the

budget that deals with making sure that people get paid their wages.

the minister saying we can't ask that basic question? Or is he just

saying that he's not prepared to state what his ministry has planned

for those people? Could the minister explain, since he refused to

answer the last question after I sat down again, why he is fearful of

telling people what provision is made in his budget in this regard? It

may be that no provision is there, and if that's the case, then we know

where the minister stands. Can he explain his reluctance and fear to

answer this very basic and timid question?

HON. MR. COUVELIER : Mr. Speaker, I am not fearful or afraid or timid or even, for that matter, reluctant — once all of the reports and studies surrounding the Principal Trust collapse that are presently underway have been completed.

surely has not escaped the hon. member's attention that we have an

ombudsman's report underway at the moment. There are press reports that

there will be a court case in short order in British Columbia. The Code

inquiry in Alberta has still not released its report. I understand that

the Alberta ombudsman will possibly have a report. I think there were

one or two RCMP investigations in Saskatchewan and Manitoba; I'm not

sure whether they've been completed, received or published, so there

obviously is much smoke and not much clarity as the issue of the

Principal Trust collapse continues to get the scrutiny that it's

getting.

This government's record in terms of the Principal

Trust collapse is beyond criticism. I believe the record shows, if I

was to research Hansard , that

the member opposite was quick to leap to his feet when we were the

first province off the mark by appointing the Lyman Robinson

commission. I can remember comments made in this House by this very

same member lauding this government's action. The record shows that we

were the first to deal with the issue — the first of all

governments. The record shows that the Lyman Robinson findings set the

stage for any individual investor who wished to launch any action

concerning possible fraud charges against individual salesmen. The

result of the Robinson inquiry gave us the comfort that we had legal

basis on which to freeze assets of the family of the principal

shareholder of the Principal group of companies — which we did.

This government moved quickly, it moved first, and it moved with proper

sensitivity to the needs of those citizens who lost with the collapse

of those companies, and also with due regard for the balance of B.C.

citizens in terms of what would be an appropriate response in terms of

public policy to this sad situation.

[3:15]

The government is sensitive to the fact that there are many citizens

of the province who would not agree that government has any obligation

to provide bail-outs for people who have made investments in these

companies. Deposit insurance is provided for financial institutions

that are In the deposit-taking business. That is deemed to be an

appropriate response for governments, in the sense that governments

have assumed an obligation to monitor and regulate and apply deposit

insurance to deposits. I'm not aware of any government anywhere in the

world that's taken any initiatives to provide insurance on lost

investments, and as a consequence of that, this government is still

maintaining a close watching brief on the Principal Trust situation as

it unfolds.

We will deal with the options that are

available to us after we are satisfied that all the facts surrounding

those companies are in the public record; that obviously is not the

case at the moment. The chief source of information regarding the

collapse of the companies will undoubtedly flow from the Code inquiry,

which has been in process for almost a year.

The record

shows that we provided information willingly to the Code inquiry. We

sent witnesses to the Code inquiry to assist their examination as it

affected Alberta transactions. This government's record as it relates

to the Principal Trust collapse, I believe, cannot fairly be

criticized. What we might do in the future, with more information and

data as it becomes available, is future policy, and I can't comment on

or even predict how we might deal with that situation.

MR. SIHOTA :

The minister says that he takes some pleasure in the fact that we

supported the appointment of Mr. Robinson. We did; there's no problem

about that. But we pointed out at the time — and we point out again —

that the terms of reference the minister provided to Mr. Robinson

precluded him from looking into the matter of the Investment Contract

Act, which of course was the pivotal issue. The minister says that his

actions are beyond criticism. Maybe he could explain why it was that in

the terms of reference he provided to Mr. Robinson he prevented Mr.

Robinson from dealing with the very pivotal issue of the Investment

Contract Act and whether or not the regulatory process under that act

had failed.

As it turned out, Mr. Robinson did a good job

in his report, to the extent that he was allowed to do a job; but the

government, through the Minister of Finance, chose to limit the job

that he could do and excluded him from entering upon territory that

would have embarrassed the government. Now that's history.

want to ask the minister about another matter of history. He said last

year that it did not matter a whit that the ombudsman says. He says

today in the House that they are monitoring the ombudsman's report here

in British Columbia as well as in other jurisdictions. Is the minister

now saying that he has changed his attitude about the ombudsman's report

[ Page 7335 ]

and

is prepared to retract the comment that he made last year about it not

mattering a whit, and to tell this House now that the government will

be paying attention to the recommendations of the ombudsman?

MR. CHAIRMAN : That may be canvassing future policy, but the minister....

HON. MR. COUVELIER :

The answer to the first two questions is no. In regard to the third

question, that is future policy, and we will deal with that at the

appropriate time.

MR. SIHOTA : It's amazing. On the

one hand, the minister says he wants to see what happens to the

ombudsman's report, but then he also wants to stay on record as saying

it doesn't matter a whit what the ombudsman says. Which is why, of

course, you've invited litigation from your own citizens. Your own

citizens of this province have to take you to court to get you to do

your job, to explain why it was that you did what you did, to get you

to account for the negligence, if any, on this matter.

It's

a pretty sad record for this government when it comes down to Principal

Trust. It's not one where the minister should stick out his chest and

boast about their performance. You are forcing your own citizens....

HON. MR. COUVELIER :

On a point of order, this comment seems to be leaping to a conclusion.

We have already got on the record that there are examinations underway

to determine exactly whether that allegation just made is accurate.

Until those reports are received, we shouldn't be aiding and abetting

the debate here.

MR. CHAIRMAN : But it's not a point

of order. If you rise on a point of order, it should be on a point of

order. Otherwise, you have to wait until the member finishes his

remarks, and then you have ample opportunity to correct them. If in the

process of making his remarks a member says something that is offensive

or that needs to be withdrawn, that's the only time that I will be

prepared to accept it as a point of order.

MR. SIHOTA :

It's amazing how a senior minister of the Crown still doesn't

understand some of the rules with respect to the way the House

operates. You're quite correct, Mr. Chairman; there is no point of

order in the minister's comment. But I see him smiling now, so I take

it he figures he's made his point.

The fact of the matter

is, as I was saying, that there's nothing to be proud of in the

approach that he's taken, and there's an inconsistency in the approach

he's taken as it relates to the ombudsman and the findings of the

ombudsman.

Since we're dealing with the minister's

budget, perhaps he could tell me what provisions, if any, are being

made in his budget to deal with the Principal Trust matter. Just

to make clear that I'm not rephrasing the question I asked earlier on,

I want to know what money has been put aside to reassess the situation

in light of the impending report of the ombudsman, whether or not any

funds are being made available to attend to the needs of people — which is what I've already put to the minister —

and what steps are being taken by his ministry this year to bring about

changes to the regulatory process in this regard. I just want to see

where we've gone in that regard. I'd like the minister to respond to

that.

MR. CHAIRMAN : The member's first two questions

are questions that have already been heavily canvassed, and the

minister has already indicated that.... The remaining question's in

order. The first two questions asked are just a repeat of the earlier

question that the minister gave a detailed answer to. The second

question is in order.

HON. MR. COUVELIER : Mr. Chairman, I wasn't keeping a count. Which particular question, then, have you considered appropriate?

MR. CHAIRMAN :

The Chair is only trying to assist the committee. The committee was so

disorderly this morning that it was brought to my attention that a

little firm hand might be in order this afternoon, and I've endeavoured

to do that. I don't wish to restrict the debate. However, the matter

that was canvassed by the member for Esquimalt-Port Renfrew pertaining

to what funds had been set aside by your ministry had already been

discussed. I found the second question which the member put forward

completely in order.

HON. MR. COUVELIER : Could I ask the member to repeat that question?

MR. SIHOTA :

The Chair and I are getting the first question and the second question

confused. I'll put it all back again. It would be a lot easier if the

minister just sat and listened to the questions instead of chatting off.

HON. MR. COUVELIER : If you would get to the question instead of the boring monologue, it wouldn't be so bad.

MR. SIHOTA :

The minister should understand that this is not boring monologue. There

are a lot of people in this province who are affected by the Principal

Trust fiasco, and they're angry at the government. The minister should

understand that he's got a responsibility to attend to those people.

can stand here and read all the letters I've got on file. There are two

files full of letters here, if you want to hear about some of the

tragedies that people are experiencing. It's clear from the

correspondence that the minister sends off to these people that he

doesn't take the time to read anything they've got to say. A young

couple who had $200,000 to $300,000 two days before the collapse, from

an inheritance,

[ Page 7336 ]

through the savings of their families, lost that money. They intended to build a future on it.

HON. MR. COUVELIER :

On a point of order, the issue before us, as I understand it, is my

estimates. Any letters received a year ago or two years ago are not

really relevant to my request for some funding so I can pay my staff.

MR. CHAIRMAN :

The relevancy determination should be made by the Chair. The tradition

in this House, and especially in this committee, is that under vote 25

all of the expenditures under your ministry would be discussed, not

just the expenses of your ministry office. Matters pertaining to this

trust company may be of some age in terms of this discussion; it seems

to me it was canvassed last year. But again, the Chair only guides the

committee; I am the servant of the committee. I take some interest in

the fact that the member for Esquimalt-Port Renfrew points out that

only a few people know the rules. I think the number of people who know

the rules is diminishing rapidly. I wish more of them did, because it

says in the book, "strictly relevant." On that basis, I think I could

have adjourned this committee long ago.

MR. SIHOTA :

If the minister had his way, all we could talk about is whether or not

he could pay his staff. He's been through estimates for the last two

years, and he knows full well that we've canvassed these types of

issues with him in the past. Maybe he's just getting a little upset

with the fact that he has to deal with these issues. There is a level

of political embarrassment that sometimes flows to the minister, not

necessarily on Principal Trust but on some of the other matters that we

canvass. I can hardly wait till we get to the Vancouver Stock Exchange,

at this rate, and hear what position the minister takes then with

respect to his estimates and what further refuge he will seek from the

rules.

We've seen changes in the minister in this set of

estimates. In the past we just saw bafflegab and hyperbole; now we're

getting refuge behind rules. Either way, the minister just wants to

narrow it all down so that he get on to his meeting and get on with the

world in a somewhat arrogant way. He's coming to believe now — as I see the change over the last three years — that he doesn't have to account to this House for much. That's how he now interprets his position.

Interjection.

MR. SIHOTA :

I'm not going to retort to the Minister of Municipal Affairs (Hon. Mrs.

Johnston) because I enjoy doing her estimates. She's one of the few

ministers who actually answer questions. I mean that. Sure, you're

tempted to take a shot at some of the other ministers, but I give the

Minister of Municipal Affairs this much credit: she answers her

questions legitimately and gets on with the job. That's why we got

through her estimates a lot quicker than we have with others. My

colleague for Vancouver East talked about the glacial rate of progress, and it's true.

[3:30]

What provision has the minister made in the budget this year to

review the Principal Trust situation, with respect to regulatory

schemes, first of all?

MR. CHAIRMAN : The member continues.

MR. SIHOTA :

The minister has thrown his head back against the desk of the minister

who sits behind him. I'm sure he's awake, but I'm not sure why he sees

no reason to answer this question. What provision have you made in your

budget, Mr. Minister, in that regard?

HON. MR. COUVELIER :

Mr. Chairman, the issues surrounding Principal Trust that will require

government action are not known at this time and won't be until all of

the material is at hand. Were government actions or reactions to be

required, the solutions or any financial implications of remedies would

be found in other accounts than my own ministry's budget. That

question, in my judgment, has been answered, as you suggested earlier,

in comments maybe as much as an hour ago.

MR. SIHOTA :

Perhaps the minister could tell us what other ministries have

responsibility for Principal Trust. Is he suggesting that Consumer

Services is responsible for this matter? Since I've been around, it has

always fallen within the purview of this minister. Is the minister

saying that the matter of Principal Trust is now delegated to another

ministry? If so, he should tell us, and we'll deal it with during that

minister's estimates.

HON. MR. COUVELIER : The member

opposite should be aware that in legal matters, the Attorney-General

has statutory obligations under law. I thought he passed a bar exam; at

least he should have learned that, Mr. Chairman. So there's one

ministry. To the issue of the ombudsman's report, the costs incurred by

the ombudsman in assembling his data would obviously be included in his

budget. In terms of any larger issues that may or may not result in

future government action, funding might come from a variety of sources,

not the least of which might be contingencies account.

any event, those are unknown future events which I can't predict with

any certainty, and I certainly don't wish to now. The question was:

have I put money in this budget to handle any outflow or consequential

action required on the Principal Trust issue? The answer to that is no.

If there is a government response, it will be found from sources other

than my budget.

MR. SIHOTA : Let me just ask the

minister this one question then. I certainly appreciate the role the

Attorney-General played, but there are not writs filed yet. The

minister knows that, and I know that. There is no legal action in front

of the courts.

[ Page 7337 ]

Interjection.

MR. CHAIRMAN : Order, please. Come on, let's give Hansard a break this afternoon. Let just the ones who are standing speak.

MR. SIHOTA : It's just an amazing comment from the minister — who is not a lawyer —

trying to tell me how lawyers make money. The ombudsman, I appreciate,

has incurred some costs, but my questions didn't relate to that. I

stand to be corrected on this. The minister can tell me: is he not

responsible for contingencies accounts?

Well, is the minister going to answer that question?

HON. MR. COUVELIER :

That's right, I am responsible for contingencies. But as to whether any

expenditure will be required from that fund, it's future government

policy, Mr. Chairman. As I've said repeatedly for the last hour, I

can't predict what may or may not be done with that.

MR. SIHOTA :

Fair enough. The minister hasn't offered one bit of comfort for the

people who are affected. He hasn't answered the first question we

asked, the most basic question: whether or not this government is

prepared to do what Alberta has done now with respect to those costs

associated with the windup of Principal Trust, the Coopers and Lybrand

costs. He has not at all indicated that any financial provision has

been made in his budget to deal with Principal's.... He has either

tried to hide behind the rules or, alternatively, tried to suggest that

others are responsible.

Mr. Chairman, that's unfortunate.

This situation, in terms of Principal Trust, occurred because of a

regulatory process, in my view. There are some fundamental questions

around that regulatory process which the minister has never accounted

for and to date has refused to answer. For example, the superintendent

of brokers did not issue a licence to Principal Trust between April 1,

1986 and August....

HON. MR. COUVELIER : On a point

of order, Mr. Chairman. I gather we're about to embark on another

litany of events which occurred in past years. The issue before us is

purely and simply my estimates. It seems to me to be out of order to

regurgitate issues that are history — some of them going back five, six and seven years.

MR. CHAIRMAN : The Journals of the House, Parliamentary Practice

by Sir Erskine May, Beauchesne, MacMinn and all of the other

authorities we have should be made available to members. However, the

Chair is reluctant to believe they'd actually read them and consider

what is relevant and what is irrelevant. There has been such

wide-ranging scope that I will endeavour to listen to what the member

has to say and determine whether it's current or not. If, as the

minister points out, these matters refer to some past time.... We are

really dealing with the administrative expenses that take place for

this calendar year. With that in mind, the member for Esquimalt-Port

Renfrew can continue.

MR. SIHOTA : The minister

doesn't want to hear about the regulatory failure as it relates to

Principal Trust. He doesn't want to answer questions. The simple way

for the minister to handle all this is to explain why the

superintendent of brokers did not take the action I referred to. It's a

crucial question as it relates to Principal Trust. The minister must

therefore believe that it's not his responsibility to answer questions

as it relates to the regulatory failure of people who come under his

ministry's mandate. I find it difficult to believe that the minister

doesn't want to handle it. I would suspect the real reason is that the

minister has obviously been told by counsel not to refer to any of

these issues for fear of litigation. I've seen the minister in the past

attend to some of these issues in other forms and also to some extent

in this House.

Fine. If the minister doesn't want to hear

of the failings of the regulatory process, we'll put those aside for

the time being. I come back to the minister and ask him this. He

referred to the Robinson report on Principal Trust. The report of the

commission primarily under the provisions of the Trade Practice Act had

a fundamental weakness and flaw in it. But again, we'll leave that

aside. The report made several recommendations, one of which was that

the government will give legal advice to contract-holders with respect

to proceedings against the company. Could he tell us how many requests

his ministry received for that type of advice?

HON. MR. COUVELIER : I don't have that information.

MR. SIHOTA : Is the minister prepared to provide the House with that information, to table it?

HON. MR. COUVELIER : I'll take that under advisement, so I will take the question as notice.

MR. SIHOTA :

I would also like to know in that regard if the minister could tell us

not only the number of people who sought the advice, if any.... My

suspicion is that, really, at the end of the day, what we said about

the Robinson report will be true: that it didn't amount to much in

terms of the recommendations the minister undertook on October 19,

1987, on behalf of the people.

Another recommendation is

that his ministry will provide forms and information to investors in

pressing claims. Once again, that was quite the undertaking, Mr.

Minister. I'd like to know again how many people sought that assistance

from you. Are you prepared to provide us with that information?

HON. MR. COUVELIER : Yes, Mr. Chairman.

MR. SIHOTA : Again, I will venture to say to the minister that very few people took advantage of that,

[ Page 7338 ]

and it will demonstrate what we said at the time — that,

indeed, the offering you made to the people affected by Principal Trust

amounted to a hill of beans. That's exactly what the record will show.

I certainly look forward to the minister showing us otherwise.

the time, the government indicated that it would be making some changes

in legislation and regulations with respect to the words "deposit" and

"guarantee." Can the minister tell us what steps have been taken in

that regard?

HON. MR. COUVELIER : I am not sure that I grasp the question properly. Would the questioner repeat it, please?

MR. SIHOTA :

The minister should pull out his press release. In his press release

they made a number of recommendations, and the government made a number

of commitments with respect to use of the words "deposit" and

"guarantee, " as they relate to these types of investments. The

government committed itself to making some regulatory and legislative

changes with respect to the use of those words. What's been done?

HON. MR. COUVELIER :

I am pleased to advise the House that much has been done, Mr. Chairman.

The new Financial Administration Act will contain

definitions of those

terms, and we've made much progress in discussing these issues with our

colleagues across Canada. Indeed, as a result of this government's

initiative, other western provinces joined us in a memorandum of

understanding wherein we agreed to share financial information as it

relates to provincially incorporated companies. Further, we agreed to

have ongoing discussions about common legislation and regulatory

practices.

The government was so successful in terms of

leading that initiative that we were asked to chair a similar committee

that would use and incorporate all of the provinces of the country, not

just those in western Canada. As a consequence, we undertook that task

and were successful. Even early this year we were able to sign

memoranda of understanding with all of the provinces of Canada. That

initiative was led by this government, as was the issue of the

Principal Trust collapse.

The consistent allegations by the

opposition that this government has been negligent in regulatory

practices of financial institutions is grossly inaccurate and totally

refuted by the historical record. You could hardly assume that we would

have been given the tasks of chairing these different organizations and

completing the tasks so successfully had we been as

insensitive and uncaring as is alleged by the hon. member.

The

record shows that we are continuing to lead the country in introducing

needed changes to the regulations and legislation affecting financial

institutions. I am proud of our record. I think it stands unassailable.

Indeed, if the member has any contacts in the financial community

across the country, I do believe they would likely confirm what I have

just been telling him. This government leads the country in that

respect.

[3:45]

MR. SIHOTA : I can comment about what the minister leads this country in.

The

fact is that no financial administration act is before this House. It's

nice to talk about it, but it isn't here. The fact is that no new

regulations have been introduced, because I am sure if they had been,

the minister would have said so. The fact is that there has been a lot

of talk between provinces but no limitations on the ability of

financial companies to seduce and lure people into making the type of

investments they did in Principal Trust and not to face any

consequences for those acts of seduction. It's all talk or discussion;

there's no legislation or regulation. The minister is right: this

province probably has led the rest of the country in talk, but that's

about it.

The minister says that the comments we made with

respect to negligence on the part of the province are refuted by the

historical record and are grossly exaggerated. Could the minister tell

us what he relies on when he refers to the historical record and what

documents and evidence he relies on for that statement?

HON. MR. COUVELIER :

There will be legislation brought forward in this session as announced

in the throne speech and the budget speech. There will be the financial

institutions act and the complete rewrite of the way in which personal

property is secured. Indeed, if you pile the legislation affecting that

and brought forward by this ministry this session, I suspect it would

total something in excess of six inches high. If you judge the merit of

legislation by column inches, I think we win the issue hands-down.

However, more importantly, you should judge those things by their

content.

As I said just a few brief moments ago, we have

led the country in coordinating the provincial regulatory authorities.

We first of all organized the western provinces. It was deemed to be

such a success that we were asked by central Canadian provinces to lead

that initiative. We concluded it just a few months ago. We are

continuing to have discussions on further refinements of regulatory

practices. Indeed, I have a meeting set up either later this month or

early next month in which we expect the federal government to join us

in that cooperative venture.

I say it again: all these initiatives have been led by this government. The record is clear and unassailable.

Mr.

Chairman, I wonder if I might just add to my statement a response to

earlier questions raised by other speakers this afternoon dealing with

the break-in.

As a consequence of the attempt at drama

surrounding the issue, I have just authorized the release of a press

statement, and I'd like to read it so that Hansard 's record is complete as to exactly what was referred to a few hours ago.

[ Page 7339 ]

The press release will say that police are investigating — current tense — two incidents of theft from the offices of the comptroller-general.

"The offices are located on the second floor of the Douglas Building, 617 Government Street, Victoria.

"The

first instance, which occurred over the weekend of April 8-9, involved

the theft of two Toshiba laptop computers missing from the locked

office complex. There were no signs of forced entry.

"The

second theft occurred over the weekend of May 13-14. While there were

no visible signs of forced entry into the building, an access door to

the comptroller-general office complex was forced. Thieves searched

employee desks and removed $180 in cash and a clock radio.

"In

addition, government losses included less than six blank computer

diskettes, a fiche file containing a list of government employees as of

January 7, 1989, one diskette containing a listing of government

guarantees and indemnities with supporting details for fiscal year

1988-89.

"Police noted that entry into

several offices was gained through the forced entry of doors. In

addition, one locked filing cabinet was damaged but not entered.

"Both

instances were reported to Victoria city police by Ministry of Finance

and Corporate Relations officials following discovery by employees

arriving to work."

Furthermore, to another question that

was asked on the same incidents, I am advised that contrary to the

allegation, the comptroller-general did not give any instructions,

written or oral, to staff regarding the break-in.

Mr.

Chairman, I hope that clarifies the inevitable public confusion that

would have resulted from the misinformation contained in the

allegations earlier this afternoon.

MR. CHAIRMAN :

There was a question earlier about whether the discussion on various

legislation was in order. The Chair would advise the minister that if

he would in fact introduce the legislation, then discussion of that

legislation would be out of order because it's before the House.

Because it's just something that has been mentioned in the throne

speech, it's quite in order until such time as your officials decide to

bring it forward as a message.

MR. CLARK : We thank

the minister for responding to questions we asked earlier. I think that

assists us somewhat. I will have some further questions down the road

with regard to details and how the government has responded; I'll

mostly leave it for now. I would be interested in the minister's

response to the fact that there was a break-in on one weekend, and it

appears that no steps were taken in the interim period to deal with

what clearly was lax security. In the event certain things were stolen,

one would think there would be some attempt to tighten up security with

respect to confidential information. In the absence of tightening up

that security, it's now clear that confidential information was stolen

and is widely available.

The minister said this was a minor

B and E, and $180 in cash was stolen. Does it not seem odd to the

minister that a microfiche would be stolen at all, or that computer

diskettes with information on them, like government guarantees, would

be stolen? I don't wish to cast any aspersion, but if this was a

penny-ante thief stealing money, it just seems odd to me that a

microfiche containing confidential information would also be stolen.

We'll have more to say about security matters with respect to this

ministry later. I will leave it at that, and quite frankly thank the

minister for at least responding to those questions in a more or less

timely fashion.

Maybe we can continue with some further discussion of the Principal Trust fiasco.

MR. SIHOTA :

It's interesting to see how the minister has come out with that press

release. Given the statements earlier in the week about the

government's concern about its lending to private companies, the loss

of guarantees and backup documents — guarantees and indemnities —

is information that I'm sure the government doesn't want broadly

disseminated. It seems to me you would have had some concern. I

certainly would not classify that as trivial information.

Going

back to Principal Trust, the Personal Property Act doesn't deal with

the issue. A financial administration act has yet to be introduced. The

Investment Contract Act, which dealt with the issue, has been repealed

by government because it wasn't working, and there's no substitute in

terms of regulation. Again, it's very unfortunate that the minister

chooses to give examples, which aren't germane to the situation, as

some measure of government action when one statute doesn't apply, the

other statute hasn't been introduced and the third statute has been

repealed because it didn't work. If the minister takes that as some

measure of progress, then I'm quite frankly surprised, but that's how

it is if the minister would measure progress in these matters.

The

minister said earlier that the comments we made about negligence are

grossly exaggerated and the historical record would suggest otherwise.

Could the minister tell me what evidence he points to in terms of the

historical record that would refute those allegations of negligence?

HON. MR. COUVELIER :

Not having been in office in the years in which these offences or

discussion items occurred, I am not sure that I can add much to the

record of knowledge until all of these investigations that are

currently under way are completed. I just wasn't there; I wasn't party

to it all.

My reference to the progress that has been made

and the leadership that has been exhibited as it related to financial

institutions was referring to this administration. This administration

has been in office about two and a half years and we have brought

forward, as I have said, a whole series of legislation dealing with

financial institutions. To repeat again, the leadership we have

exhibited has resulted in many similar actions being instituted across

the country, and I am very proud of our record.

[ Page 7340 ]

MR. SIHOTA :

You know, the minister didn't say that; he knows exactly what he said,

that those allegations that we made of negligence are refuted by the

historical record. Now he tells us he doesn't know what that record is.

So either you retract your earlier comment and say that it's not

refuted, or you give us the evidence of the historical record.

[Mr. Pelton in the chair.]

The

minister was the minister responsible when these things collapsed in

June 1987, so he can't say it happened before. Sure, the matter of the

licence not being issued occurred between April 1, 1986, and August 26,

1986, but when the collapse occurred, the minister was the minister of

record. It happened between October '86 and June '87, so you were the

minister responsible, through you, Mr. Chairman. The minister knows,

and this isn't a light matter that hasn't come to his attention.

want the minister to do one of two things: either retract that comment

that says that the historical record refutes those allegations of

negligence, or put it on the record what it is that he refers to when

he talks about historical record. It's misleading to suggest that the

record would suggest otherwise and to try to say that we're

exaggerating when indeed it may be the minister who is exaggerating.

either retract your earlier comment, Mr. Minister, and admit that you

don't have any evidence of a historical record, or tell us what the

historical record is.

HON. MR. COUVELIER : I don't

feel compelled to have any knee-jerk reaction to orders from members

opposite. I suppose I have no choice but to repeat what I have been

saying all afternoon: the record of this administration as it relates

to the monitoring and handling of the Principal Trust collapse is one I

am very proud of. We were first out of the chute in terms of dealing

with the collapse of the Principal Trust companies. Indeed, if the hon.

member at all has followed reports of the evidence submitted in the

Code inquiry, that statement of mine is confirmed as fact. So we led

the issue; we were first out of the chute; we created the Lyman

Robinson inquiry.

[4:00]

The purpose of that inquiry was for the stated purpose of

determining whether we should freeze the assets in British Columbia

immediately. We were the first government to take that action. The

second objective of the Lyman Robinson commission was to determine if

sufficient evidence could be obtained to justify charges of fraud by

those who were offended by any alleged fraudulent action.

Now,

Mr. Chairman, the member opposite is a member of the legal profession,

so he knows this better than anyone. The fact of the matter is that

charges of fraud can only be laid by those individuals who claim to

have had misrepresentations made to them. That, of consequence, means

that it has to be an individual action, not something that the

government can take on in some sort of a generic fashion. Each

individual alleged person must make the claim. Therefore the Lyman

Robinson inquiry served a very useful purpose: providing the evidence

with which those persons who felt abused could launch their own

individual civil suits.

The pressures of the moment, because we were the first one to deal with the issue, the first government to deal with it....

Interjection.

HON. MR. COUVELIER :

The member laughs. Does he deny the truth of what I just said? The fact

of the matter is that the record shows, Mr. Chairman, that we were the

first government to deal with the collapse of the Principal Trust

companies — the first government. And the member cannot deny that.

He tries to make light of it. He tries to ridicule us for our failure

to deal and move. We moved first; we moved quickly; we moved with

conviction; and we appointed one of the most prominent legal minds in

British Columbia to deal with the question. Indeed, at the time, the

hon. member himself even leapt to his feet. He almost broke his leg

grabbing the microphone so quickly to join the march towards dealing

with this sensitive public issue. I can remember his words. It was

sweetness and light.

Now, of course, when he determines

that there may be more news in taking a reverse position, he chooses

the opportunity to do so. In the process all he does, in my judgment,

is lower the esteem in which those of us who have to work with him

might hold him. In any event, that's up to him if he chooses to

continue in that action.

I was also asked to give a record

of performance of this government, which I'm happy to provide. I've

asked the staff to go down and prepare a list of all the legislation

dealing with financial institutions that this government has instituted

since it has taken office. That will be impressive, and it's one that

I'm very proud of. I'm confident that it will show that this government

has introduced more legislation dealing with these matters than most of

our predecessors, if not all of them.

Furthermore, as I say

again, this government, by virtue of understanding the need to deal

with the new realities in financial institutions all over the

world — that is to say, the collapse of the four pillars; the

erosion of the traditional independent roles of the banks, the

insurance companies, the trust companies and the brokerage houses —

and by having the perception to understand that these traditional

fortresses were being eroded at a rapid rate by governmental action and

forces of marketplace, introduced wide-ranging discussion on those

issues and raised them with our peers across the country.

a consequence of our discussions on those issues, this government was

asked to chair a committee of the western governments to determine at

least in western Canada that we had our act together and acted in the

consumer's interest. As a consequence of our success in those

discussions, in concluding a memorandum of agreement which was signed,

this government was also asked to chair a national com-

[ Page 7341 ]

mittee

to do the same good thing, and we delivered that early this year. The

document was signed early this year, and we're going to have meetings

within the month in which we'll discuss the same issue with the federal

government, and we invite them to share with us the obligation to

protect the consumers of Canada.

We have led that

initiative from day one, and the record clearly shows it. Public

comments by the financial community across the country have confirmed

it. I could read into the record speeches by the investment dealers'

associations, speeches by members of the different banking institutions

in the country, and comments from the insurance industry. I could read

all of that into the record, which would confirm what I've just said,

that this government's record in relation to the regulation and

management of the financial markets stands unassailable. I'm very proud

of our contribution to the national interest, the provincial interest

and, most important, the interest of the consumers of British Columbia.

The Principal Trust issue will have much further discussion. Once all of the detailed reports are available —

the B.C. ombudsman's report; the Code inquiry report; the Alberta

ombudsman's report; all the RCMP reports, which, as I say, I'm not sure

have been made public yet across the prairie provinces — all that

information will form a data bank with which we can assess the new

realities. But until that information is received, it would be

inappropriate for me to either confirm or deny that we may or may not

have any continuing interest in the matter.

Certainly, it

seems to me, in the interests of the public and in the interests of the

taxpayers of this province, it's important that we don't act

precipitously. We acted quickly to protect the interests of British

Columbia investors by freezing the assets of the principal of the firm,

and we did obtain information necessary so that individuals might be in

a position to launch individual civil suits. We were the first

government to deal with the issue, and that has been recognized right

across the country. So I make no apologies for the Principal Trust

issue.

The circumstances around which the issues will be

settled, or at least decisions made, all deal with events that occurred

prior to this government assuming office. I wasn't around in those

days. I can't speak to what happened. I don't have to defend what

happened. I don't have to speak to it, where there's no specific

knowledge that I have on those subjects The inquiries that are ongoing

will deal with those, and when they're received, then the public

interest will be addressed.

Until they are received,

there's no useful purpose in regurgitating, replaying, asking me what

if and trying to manufacture another headline while the agony of those

poor individuals who have lost, many of them, their savings in these

institutions continues to be manipulated on a daily basis for the

personal.... Well, I won't describe motives. But certainly the

consequences of that public recounting in the pages of the newspapers

across the province do no one any good, other than those whose names

happened to be mentioned in the articles. I'll leave that matter lie as

said.

MR. SIHOTA : Well, I read the minister's letter

on the VSE too. I want to say the following things to the minister.

Look, you have gone out of your way to see that the historical record

shows that there was no negligence on the part of your regulators

regarding Principal Trust. Those are your words, Mr. Minister. We're

asking you to tell us what is the historical record that you take so

much pride in. Do you take pride in the fact that your regulators in

front of the Code inquiry said that they wrote memos saying that they

would not invest a single penny in Principal Trust? Is that the type of

historical record...?

HON. MR. COUVELIER : On a point

of order, Mr. Chairman, the member refers to items that evidently

occurred prior to our assumption of office. I've repeatedly said during

these discussions that I can't speak to those issues and that they are

being addressed. I can't respond to this line of questioning, and we

are wasting valuable time. We should be getting on with the people's

business.

MR. SIHOTA : There were 18,000 people in

British Columbia victimized by the collapse of Principal Trust. If the

minister doesn't think that's the people's business, I don't know what

he thinks is.

The minister says: "Well, these things were

said in front of the Code inquiry before I became minister." Did the

minister not know that the Code inquiry was in place and hearing

submissions from his regulators while he was in power? We were just

talking about evidence. The minister himself said earlier that he

understood that the Code inquiry had been hearing witnesses for the

past year. Surely the minister is prepared to concede that he was

Minister of Finance over the past year. They were his regulators who

went to those hearings and said: "Yes, we would not invest one penny in

Principal Trust." It was his ministry that was allowing for the

issuance of those licences when he was in charge. It was his ministry

that was aware of the fact that between April 1 and August 26, 1986, no

licences were issued, and when it came to issuing the licences in

1987 — when the minister was in charge — mindful of that earlier experience, still issued the licences.

Does

he forget that it was his ministry that issued the final set of

licences some three months prior to the collapse of Principal Trust?

Does he realize that it was his ministry that requested accounting

records of Principal Trust to satisfy itself that the company was

solvent? Does he realize that it was his ministry that acted on the

basis of those accounting records that questioned the status of the

company and still allowed for the issuance of the licences?

The

minister can't pretend that he wasn't in charge. He was there. He was

the minister. It was his ministry. They were his officials, and they

gave evidence in front of the Code inquiry during his tenure as

Minister of Finance. And he's still Minister of Finance today. If

somebody else was the Minister

[ Page 7342 ]

Finance in the intervening period, yes, they would have to answer these

questions. But the minister has been there throughout. And when you

look at the record.... I can't remember the name of the firm that gave

the accounting record to his department at Christmas '86 and in the

early part of '87, but he was there. When he says that the historical

record would prove that there was no negligence, is he referring to the

evidence of the accountants?

HON. MR. COUVELIER : Point of order. This member, by his shouting harangues, keeps embellishing the spoken record of Hansard .

I haven't made most of the statements he's alleging that I made in the

words and context that he's applying them. He's manufacturing and

fabricating another argument, whipping himself into a froth, for no

effective purpose other than to make his own point. I have not made

those statements, Mr. Chairman, in the context that the member is using

them.

MR. SIHOTA : I would ask the minister to withdraw the word "fabricating" and also the imputation of motive contained in his comment.

MR. CHAIRMAN : Would the minister withdraw those comments, please.

HON. MR. COUVELIER :

Frankly I find nothing wrong, Mr. Chairman, with "fabrication" being

applied to the fabrication of statements. In my judgment, that's what

is going on. I believe that. If, however, in your judgment, I should

withdraw the word "fabrication" in order to continue to sit here, I

will oblige your interests. But surely, in the name of sanity, it

should not be allowed that members make artificial statements, build

their arguments around these assumptions and continue to try to make

something out of nothing. I have said, Mr. Chairman, on the record that

this government, when it assumed office, assumed a requirement to act

on previous events, and we did act, and I have said for the last hour

and a half that as evidence has been provided we have acted. Indeed, we

have led the country in most respects.

[4:15]

MR. SIHOTA :

The minister is rising on a point of order. I have asked him to

withdraw a comment with respect to fabrication, and he's sort of

charged off onto some tangent that has nothing to do with the point of

order; it has nothing to do with the request for the withdrawal, but

gets right back to everything that he's been saying about his

government's record.

So I want to ask the minister if he will withdraw the word "fabrication?"

MR. CHAIRMAN : I believe I heard the minister withdraw the word "fabrication."

MR. SIHOTA : On a point of order, I would also rise and ask the minister to withdraw the words "artificial statements."

HON. MR. COUVELIER :

Mr. Chairman, I don't think anyone has a more sensitive appreciation of

the parliamentary system, but I'm somewhat at a loss to understand how

simple words which of themselves are not defamatory or worthy of the

kind of reaction I'm getting.... If I continue to concede that I can't

withdraw, I might as well withdraw from the chamber entirely.

does seem to me that I am having questions put to me that require

addressing. I am attempting to do that. I don't wish to offend the

House. I certainly wouldn't wish to offend the member. But, Mr.

Chairman, in all sanity, seriously.... What was I asked to withdraw?

MR. SIHOTA : "Artificial statements."

HON. MR. COUVELIER : I am at a loss to take seriously the suggestion that that's a matter of such gravity that would require me to withdraw.

MR. CHAIRMAN :

The Chair thoroughly appreciates what the minister says and couldn't

agree more: he does everything possible to make sure that he never

offends the House. But I think that sometimes it's not so much the word

as the context in which it is used. And I think that's probably what

started this little conversation back and forth. The minister did

withdraw, but I haven't heard him withdraw the last remark. I wonder of

you would be so kind as to do that as well, and then we can proceed.

HON. MR. COUVELIER :

I see: "crows" is offensive; "artificial statements" is offensive. Mr.

Chairman, I just wonder, then, is it possible for the opposition to

continue to take any alleged offence with any phrase that offends and

require withdrawal? Is that how the system works? I would appreciate a

reaction to that.

MR. CHAIRMAN : I must hasten to add

that really it's not the opposition that takes offence; it's the Chair

that would ask for the withdrawal. I am sure the minister would be so

kind as to do that for me and then we can proceed.

HON. MR. COUVELIER :

Mr. Chairman, you're a nice chap; besides, you're the boss, so I'll

have to defer to your request, and I happily do so. I will withdraw the

phrase, although I wonder just what phrases I might use in an

opportunity to have my normal freedom of speech that I thought went

with the House.

MR. SIHOTA : As I was saying before

that interruption, this minister was in charge during the course of all

of those events. When he talks about the historical record, is he proud

of the fact that his people allowed for a licence...?

Interjection.

[ Page 7343 ]

MR. SIHOTA :

Obviously the minister wants to leave; he's not going to stay here to

deal with his estimates. So I'll just come back later on, Mr. Chairman,

and pick up the matter of Principal Trust. He's obviously chosen, Mr.

Chairman. He doesn't want to hear the government's record. He doesn't

want to hear those attributes of negligence that I refer to and refute

his argument that the historical record shows otherwise. So we'll just

come back when the minister is back.

HON. MR. REID : I would like to know if we are still talking about vote 25, and I'll make some notes.

MR. CHAIRMAN :

This debate this afternoon is concerned with vote 25, the Ministry of

Finance and Corporate Relations, the minister's office, in the sum of

$316,724.

Interjection.

MR. SIHOTA : The

House Leader says, "since he's arrived," which reminds me of the

comment by Alexander Haig when the President of the United States was

shot. He said: "I'm in charge." If the Minister of Tourism is in charge

of the finances of this province, we're really, truly in trouble. I'll

be back when the minister is back.

MR. CLARK : An interesting thing happens when the minister leaves the House. The government House Leader — whoever that happens to be —

takes his place in his absence, and this is a time-honoured tradition,

when the minister has pressing, urgent, personal business to attend to

for a brief period during these estimates. But what has happened on the

government side is that they've relied on a critic on the opposite side

to fill the void. I'm quite convinced that it's the role of the

government House Leader — that's part of his job description —

to fill the vacuum that exists in the event of these periods. So I

think that we would like to hear from the House Leader on this.

HON. MR. REID :

In filling the capacity of acting House Leader, I'm here to take notes

on vote 25, and I'll certainly make sure that the minister, when he

arrives back in.... If you can keep it relevant so that I can be sure

to give him the questions around vote 25, we'll keep this momentum

going. If the Leader of the Opposition wants to talk about vote 25, the

estimates of the Minister of Finance and Corporate Relations, I'm happy

to take notes.

MR. HARCOURT : I wanted to talk to the

Minister of Finance, who is off on urgent business, about Principal

Trust. In particular, I wanted to make clear to him that it's not

necessarily his words that we're concerned about, because we couldn't

possibly be concerned about all the words that we get from that

minister. There are so many of them, it just numbs your senses. It's

impossible for us to be able to keep tabs on all of the words that come

from the Minister of Finance.

It's his actions or, more

importantly, the wrong actions or lack of action on behalf of those

poor citizens in British Columbia who have been done in by their

investments in Principal Trust and subsidiaries of Principal Trust.

That's really the issue that we're trying to deal with with the

Minister of Finance. He keeps getting huffy about words that are said

or that he's said. He would make a good solicitor, in terms of drafting

very extensive contracts that don't mean a great deal. That's the

problem we have.

We're not concerned about the millions of

words that he's constantly uttering; we're concerned about a lot of

British Columbians who have been severely harmed financially by

Principal Trust and, more importantly here in Victoria and throughout

the province, by subsidiaries of Principal Trust — two in particular —

that led people to the conclusion that they were investing in two

subsidiaries of Principal Trust that were covered by deposit insurance

of up to $60,000 each. That is the problem. There are a lot of elderly

British Columbians and other British Columbians who invested a very

significant part of their life savings in these outfits in the 1980s

when the Social Credit government was the government. They lost those

savings because those companies were found to be misleading, in a

fraudulent way, people into investing their funds that were not secured

by deposit insurance. And they're now left holding the bag.

[Mr. Rabbitt in the chair.]

The

province will not meet its responsibilities for their inspectors not

realizing early enough that this was happening, that this advertising

was wrong. It was misleading. It was leading people to make investment

decisions which were going to lead to the path that it did: they lost

those savings. That's the issue.

In the face of all of that, not enough of the inspectors being on top of it....

HON. MR. REID :

On a point of order, can I ask the Leader of the Opposition to please

define in vote 25 where Principal Trust is indicated? I want to pass

these notes on; the minister is back. But I can't find it under vote

25. So since it's out of order, it's not relevant and it's very

tedious, maybe we should just call closure and get it over with.

MR. HARCOURT : So a more secretive government, more closing down of debate in this House.

Mr.

Chairman, it's very clear that the finances of the people of British

Columbia invested in B.C. financial institutions are very clearly

within the responsibility of the Minister of Finance; and if they

aren't, God help us. What I am talking about are the hard-earned

savings of the people of British Columbia being invested in financial

institutions located in this province that misled the people of this

province that their savings would be secured by deposit

[ Page 7344 ]

insurance.

That proved to not be true. The inspectors of this province could see

this misrepresentation. They didn't take action, and people have lost

their savings. What is the response of the Minister of Finance on

behalf of this Social Credit government? His words: "Sue us." What a

disgraceful way to deal with the citizens of this province. That's the

point we're trying to make.

We don't expect anything more

than bafflegab and hiding behind a lawsuit and the endless delays that

will result in these citizens not being dealt with in an expeditious

and fair way by government. It should just admit that it made a tragic

miscalculation, mistake, and didn't take care of the investments of the

people of this province. That's what we're asking for. We're not asking

for a long speech from the minister. We're just saying: "Don't put

people through this agony. Settle up." Let them get on with their

lives. Let them recoup some of those savings so they can get on with

their lives. If that isn't part of the duties of the Minister of

Finance and Corporate Relations, then Social Credit is back to their

original theory of funny money and their original attitude towards the

economy and finances of Canada and British Columbia.

I just

want to make that point loud and clear: the people who invested in

Principal Trust deserve action from this government, not millions of

words of bafflegab. They deserve to be recompensed for the

misrepresentation and fraud the financial institutions perpetrated on

them. The inspectors and the staff of our provincial government didn't

pick up on that There's an obligation on the part of the Minister of

Finance and this Social Credit government to those British Columbians.

That's the point we're trying to make.

MR. CLARK : I

am responsible for Corporate Relations on our side of the House, and,

as a result, Principal Trust. But I have deferred, as the minister

noticed, to both the member for Esquimalt-Port Renfrew (Mr. Sihota) and

the Leader of the Opposition to elucidate our position on this

question. I might say that both are more familiar with the details than

I am.

I am struck, coming to this issue somewhat fresher,

and having only received the responsibility fairly recently, by some

glaring omissions on the part of the government. Perhaps I could

canvass briefly a few of the remarks the minister made from a fresh

point of view, in terms of a new person — me. I am interested in

the government's response to Principal Trust. There's no doubt that

there has been some response. It's our strong view that that response

has been very clearly inadequate.

It seems to me that when

you peel away the layers of the Principal Trust affair, or the events

as they unfolded, there are several areas where there's been regulatory

failure. Some of those areas were more dramatic, I guess, than others.

The one that strikes me, again looking at this issue as a relative

newcomer, is that relatively short period of time when the licence was

lifted — essentially not renewed — by the provincial government and the company continued to sell investment contracts, and then was subsequently renewed.

It seems to me — and I would ask the minister this specific question —

that of all of the Principal Trust issues, of all of what on our side

of the House one might call the regulatory failures of the government,

very clearly the interregnum, or the period between the time when the

licence was not renewed but the company continued to sell investment

contracts.... And in the words of the government's own regulator: "They

wouldn't put a penny into the project." It does seem to me that at that

point, in that period, anybody who purchased investment contracts when

the government knew the company was insolvent, when the government knew

there was no licence given.... The government has some responsibility,

at the very least, to deal with the people who purchased investment

contracts when there was no provincial licence given and when the

regulators knew the company was insolvent.

[4:30]

I wonder if the minister could answer that specific question. One could argue — and I certainly argue — that

there was regulatory failure on the part of both provincial

governments, with a range of compensation that I strongly support on

this side of the House. Aside from the general question, I would ask

the minister to respond to the specific period when they operated in

British Columbia with no licence, in full view of the regulators and

with the full knowledge of the regulators that the company was

insolvent. Surely the government has some responsibility for those

investors during that period. Does the minister not agree with that?

HON. MR. COUVELIER :

I notice that all the members who got in for their comments have now

left. Some of the comments I wanted to make address issues that they

raised, which is unfortunate. Nevertheless, the Hansard

record should be corrected. I repeat again, to the last question put to

me, that those events transpired prior to this government assuming

office.

The record clearly shows that when this government

assumed office, once the circumstances and the situation of the

Principal Group became known to us, we acted. We were the first

government in the country to act, even though the head office of those

firms was located in a neighbouring province, and even though, as a

result of that, we didn't have all of the information at hand. We did

have sufficient information at hand for us to determine that we should

act.

As I say, we created the Lyman Robinson inquiry. The

evidence obtained through that inquiry enabled us to freeze the

assets — the first government to move in that respect, long before

the Code commission was even created. I defend this administration's

actions in respect to the Principal Group.

I take it that

the members opposite and the sequence of speakers who appeared in the

House for brief, flashing moments of glory take the position

[ Page 7345 ]

that

somehow or other all the citizens of British Columbia should be

guaranteeing investments of some of those who might have lost money on

investments. If that's the position of the opposition, it's an

interesting one, and it would be useful to take it to the polls and

determine just how the citizens of this province felt about the

suggestion.

However, I say it again: the issues are being

examined by a multifaceted group of inquirers, and once all that

documentation and factual material is at hand, then we can deal with

it — and we will.

Earlier I told the House that I

would introduce for the record the various legislative initiatives that

this government has undertaken since we assumed office only two and a

half years ago. I will tell the members and for the record that we have

implemented the Credit Union Amendment Act (No. 1), Credit Union

Amendment Act (No. 2), Securities Amendment Act, Real Estate Amendment

Act, Insurance (Captive Company) Act, International Financial Business

Act, International Financial Business (Tax Refund) Act, Insurance

Amendment Act and Cooperative Association Amendment Act. We've had

various amendments in miscellaneous statutes this session. As we

announced in the throne speech and in the budget speech, we will be

introducing a new financial institutions act, a total rewrite of the

Credit Union Act and a securities amendment act as we continue our

efforts to refine and strengthen legislation and regulatory powers in

the securities industry.

The record of this government in

dealing with the concerns of the financial community and the concerns

of our citizens who deal with financial institutions stands

unassailable. We have introduced and dealt with in two and a half short

years in office nearly twice the legislation, if not more than that,

brought forward by any previous government. To the suggestion that we

haven't been responsible custodians of the public interest, the record

shows it not to be true, and that we have consistently led the country

in dealing with some of these contentious issues, issues on which other

governments are now following suit in terms of addressing them.

addition, we gave the very difficult question of how to regulate the

financial planners in British Columbia to an all-party committee of

this House. Indeed, we gave them that task a year ago; one of the first

jurisdictions across the country to try to highlight the difficulties

associated with the definition of financial planner and the regulation

of financial planners.

This government has nothing to be

ashamed of in terms of how seriously we view these matters. As I have

said many times before, we have consistently led the country in

bringing our attention to them. I am proud of our record in this

respect, and I won't sit still, stand still, stand aside or move over

for any suggestion that we're less than responsible in these issues.

MR. CHAIRMAN :

Just before I recognize the next speaker, I would like to comment that

the reply, which was full in nature, did refer to legislation. I would

not want either the minister or the questioner to digress and get off

on that tangent. If we could still keep it in an objective way.

MR. CLARK : I think some of the initiatives the government has taken in this field — regulatory, legislative or other —

are commendable. I wonder if the minister would agree with me that the

policy changes the government has brought about are an attempt to

redress some of the inadequacies of the previous legislation.

HON. MR. COUVELIER :

No. As the hon. member knows, these matters are the subject of

inquiries. I'm certainly not going to feed inflammatory statements to

those inquirers. They will be making judgments in that respect. I'm not

particularly interested in the views of the members opposite on those

matters. There are properly appointed individuals, and those are the

answers that I'm interested in receiving. We will get them in due

course, and we will deal with them when we get them.

MR. CLARK :

It seems to me that the minister is somewhat trapped by his remarks. He

wants to say how many changes the government has made to legislation

and to policy — and I can commend him for many of those changes —

but at the same time he must recognize that he's making those changes

because of problems with the existing legislation or regulation.

Otherwise, why would they bring in all these amendments and policy

changes?

It seems to me that the crux of the matter is

simply this. If the government is going to regulate, then it accepts a

certain responsibility. The minister referred to the Leader of the

Opposition, my colleagues and people on this side of the House as

wanting to guarantee all investments in British Columbia. We have no

desire to do that, but if the government regulates and people advertise

that there is a government guarantee — as the government offers certain guarantees to credit unions or through the Canada Deposit Insurance Corporation —

then the public have a right to expect that they're being regulated and

that the guarantee means something. That goes to the heart of the

matter. In the Principal Trust case there was advertising taking place

that they were government-regulated operations; that they were licensed

by the provincial government; that there was an Investment Contract Act

in place to protect the public interest. If the government wants to

wander into the realm of regulating those investments, then it must be

responsible for the failure to regulate them.

That is

precisely the point. It's quite clear that the government failed to

regulate adequately. There were regulatory failures with respect to the

provincial government. That has been admitted by the government

regulators at the Code inquiry. It has been admitted that the company

operated without a licence. It has been admitted that they

continued to accept investment contracts while they were operating

without a licence. The government regulators knew they were

operating without a licence and did

[ Page 7346 ]

not

shut them down. Therefore the government is responsible for

compensating individuals who lost money during that regulatory failure.

The

government clearly recognizes that there were regulatory inadequacies,

and that's why they have moved to respond through legislative changes.

HON. MR. COUVELIER : On a point of order, Mr. Chairman, the government hasn't recognized that there were administrative failures.

MR. CHAIRMAN : That's not really a point of order, but the point has been made.

HON. MR. COUVELIER : Is there no requirement to be factual on the floor?

MR. CHAIRMAN : No.

Interjections.

MR. CHAIRMAN : All members will have a chance to get the record set straight.

MR. CLARK : It clearly wasn't a point of order.

The

government has recognized implicitly that there were regulatory

failures by bragging about the host of regulatory changes they've made

flowing from the failure of the Principal Trust group. The evidence is

absolutely clear.

It is not that members on this side of the House want government to bail out all investors. There's a certain amount of caveat emptor ;

we all accept that. But if the government is going to regulate and

therefore give the public assurance that it is being regulated with

respect to certain criteria the government has laid down, then if the

company does not act according to those criteria or regulations, the

government has to accept culpability in those instances. That is

precisely the point we're making on this side of the House. We feel

very strongly about it.

I know that all members of the

House, regardless of their politics, are concerned about people who

have lost money in that regard, but I think the government is being

obstinate and not willing to accept a range of culpability with respect

to its regulatory failure in this regard.

I might add, just

briefly, that many of the people we have talked to about Principal

Trust are elderly. I appreciate that the government, from what I've

read, say they are going to pay attention to the ombudsman's report and

to the Code inquiry report, and act accordingly, or at least act with

that input. That seems to me to be a new position in the government I

think it's laudable if they do act according to what transpires.

The problem is that people are dying —

if I can be so blunt. Elderly people who lost their life savings are

waiting for some compensation that has not been forthcoming from the

provincial government. It seems to me that the provincial government

should recognize and accept its responsibility, at least in certain

areas of the Principal Trust fiasco, and deal with it judiciously,

forthrightly and quickly in order to try and alleviate the kind of

stress that I know the minister knows these investors are feeling.

don't want to set a precedent to guarantee investment of all people at

all times in British Columbia, but the facts, it seems to me, are

absolutely clear in this regard, and people should be compensated

because of the failure of the government to regulate.

I will leave the Principal Trust fiasco — if I can call it that —

at this time, and just briefly touch upon one other relatively small

matter which deals with the regulation of financial institutions.

guess one of the problems with the failure of western-based

institutions, by and large, is a real concern that people have about

the regulatory capacity of government. The government has indicated

that they've moved in some regards — whether the minister wants to admi