1988 Legislative Session: 2nd Session, 34th Parliament

HANSARD

The following electronic version is for informational

purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 27, 1988

Afternoon Sitting

[ Page

4093 ]

CONTENTS

Routine Proceedings

Oral Questions

Ambulance dispatch service. Mrs. Boone –– 4093

Heart surgery waiting-lists. Mr. Harcourt –– 4094

Privatization of provincial park campgrounds. Ms. Edwards –– 4094

Vancouver Island tourism. Mr. Blencoe –– 4095

Ambulance dispatch service. Hon. Mr. Dueck –– 4095

Ministerial Statement

Organ Donor Awareness Week. Hon. Mr. Dueck –– 4095

Mrs. Boone

Committee of Supply: Ministry of Finance and Corporate Relations estimates. (Hon. Mr. Couvelier)

On vote 37: minister's office –– 4096

Hon. Mr. Couvelier

Mr. Stupich

Mr. Clark

Mr. Sihota

Mr. Rose

Mr. Blencoe

Presenting Reports –– 4117

The House met at 2:08 p.m.

Prayers.

HON. MR. SAVAGE:

It gives me a great deal of pleasure to introduce one of my

constituents and a past president of the B.C. Social Credit Party,

Melody Harris; accompanying Melody today is Al MacLean. Would this

House please make them very welcome.

MR. SKELLY: I would like the House to welcome Shirley Cherwak, who is my constituency assistant.

HON. L. HANSON:

In the House today are two constituents of mine who are also relatives:

my daughter Nancy and her husband Wayne from Vernon. Would the House

please make them welcome.

MR. BLENCOE: This morning

the House was privileged to have a group of young people from George

Jay Elementary School in Victoria who came to see the activities. Two

members of that school group were so interested that they have returned

this afternoon to watch the proceedings. Will the House please welcome

Tammy Barnatt and Anne Belanger.

MR. MOWAT: In the gallery today are two guests who were over having

meetings with the government this morning: Dr. F.M. Swangard, managing director

of Paracomp Technologies Inc., and Mr. Bill Lewis, the marketing manager of

communications for Paracomp. In the precincts is Mr. Sucha Gill, president of

that company. I'd ask the House to please make them welcome.

MR. JONES:

On behalf of the member for North Island, I would like to introduce to

the House a friend and constituent of that member, Hugh McConnell, who

is an officer of the International Union of Operating Engineers. I know

the House will join me in a warm and enthusiastic welcome.

MR. PELTON:

Hon. members, my seatmate the member for Shuswap-Revelstoke (Mr.

Michael) and his wife Dilys are celebrating their eighth wedding

anniversary today, and I wonder if it might not be appropriate that we

extend them our heartiest congratulations not just for today but for

many years to come.

MS. MARZARI: I'd like to draw

the House's attention to the fact that the member for Prince George

North (Mrs. Boone) celebrated her forty-first birthday yesterday and

was properly bestowed with a hula hoop in honour of the occasion at a

banquet given in her honour and paid for by her last evening. It fell

within four days of the birth of her grandson, a son born to her foster

daughter six days ago now. Happy birthday to the member.

MR. PETERSON:

I'd like to introduce two people in the members' gallery who are very

dear to me: my brother, Gregory Peterson, and his wonderful wife,

Devinder Gil. Will the House please join me in making them welcome.

MRS. GRAN: I wonder if the members of the House would join me in paying

tribute today to all of the secretaries who serve us so well, and the secretaries

throughout this province in Secretaries Week.

MR. DE JONG:

On behalf of the first member for Central Fraser Valley (Hon. Mr.

Dueck) and myself, I am pleased to introduce to the House today Len and

Jaquelene Jansen. They have been longtime residents and successful

farmers in the Matsqui area, and I would ask the House to give them a

cordial welcome.

Oral Questions

AMBULANCE DISPATCH SERVICE

MRS. BOONE:

A question to the Minister of Health. Beginning Sunday, priority 4

patients in the lower mainland will no longer be transported by

ambulance but delivered through private contractors. Will the minister

confirm that he is still proceeding with moving patients by private

contractor rather than by ambulance beginning May 1?

HON. MR. DUECK:

I think I have answered this question a number of times in the House,

and I am quite willing to do it again. We have transferred

non-emergency patients for some time — as a matter of fact, for about

two or three years — and we will continue to do so. This in no way will

hinder the service of the ambulance. As a matter of fact, it will

enhance the service, because they will be available for emergency

service which in some instances has been lacking because of overloading

of calls. When we speak about transferring patients who are not

emergent, that will continue; we have done that in the past very

successfully. No one will lose their job over it.

[2:15]

MRS. BOONE:

Supplementary. British Columbians count on our public ambulance service

because they know it's staffed by well-trained ambulance paramedics —

professionals who have saved lives during the course of so-called

routine transfers. Will the minister tell the House exactly what health

care or paramedic training the staff of private contractors will be

required to have?

HON. MR. DUECK: I have said that

for non-emergent transfers, the hospital, the physician or the nurse on

staff — the administration — will make the decision, not the Ministry

of Health or me as the minister. If it's a transfer from one facility

to another, which is not considered emergent, it can well be done by

way of other than our medics. We do not require two medics in an

ambulance for an ordinary transfer — and that will continue.

MRS. BOONE:

I take it, then, that there are no standards whatsoever for any of

their staff. Will the minister tell the House exactly what standards

have been established for vehicles of private contractors which will be

transporting patients?

HON. MR. DUECK: First of all,

I should say "Happy Birthday" to you; I neglected to do that. I feel

much more comfortable now that you're a grandmother and I'm a

grandfather. We're on an even keel.

As far as that question

is concerned, I'll have to take it on notice because I have not had any

word back on the inspection of a private ambulance versus a public one

run by us.

[ Page 4094 ]

MRS. BOONE:

Mr. Minister, I'm a little concerned. You have no standards for the

vehicles and no standards for the staff. This takes place on May 1.

The

municipal councils of Vancouver, New Westminster, Burnaby, Richmond,

Delta, White Rock, Langley and North Vancouver have all passed motions

opposing the privatizing of priority 3 and 4 ambulance services,

because they believe that it puts British Columbians at risk. I know

the minister doesn't like to hear that he's putting patients at risk,

but I ask him: how can he reconcile the legitimate and real fear that

private transportation companies will put profits ahead of standards of

care, that this government is willing to lower standards for staff and

vehicles transporting ill people, and that many British Columbians in

the lower mainland will no longer have access to reliable ambulances

staffed by skilled paramedics?

HON. MR. DUECK:

Again, many statements were made that are erroneous, and of course it

would take a long time to explain to that member. She could have had

all that information from me, if she had desired, before the House sat.

However, I said that in the metropolitan areas of Vancouver and

Victoria, where we need the ambulance service on duty for emergency

calls, we're using transfers from other than ambulances that are

non-emergent, as declared by the hospital in charge. I don't know what

more information you want than that.

HEART SURGERY WAITING-LISTS

MR. HARCOURT:

I have a question for the Minister of Health. British Columbians in

need of heart surgery still face an unacceptable wait for what is, in

many cases, lifesaving health care. Will the minister tell the House

exactly how many British Columbians are on the heart surgery waiting

lists at this time?

HON. MR. DUECK: That's a

question that requires an answer from my staff, because that changes

from minute to minute and day to day. I can't give him the exact

figure, but I can sure as heck get it. I'll take that question on

notice.

MR. HARCOURT: The Vancouver General Hospital

alone has a waiting-list of 250 patients in need of cardiac surgery.

The minister knows that such delays put British Columbians at risk. As

a matter of fact, at least three people on British Columbia's

waiting-lists have died this year waiting for surgery. How can the

minister reconcile the long waiting-lists we still find with his

promise of last December to allow for more heart surgery for British

Columbians?

HON. MR. DUECK: Again, the Leader of the

Opposition is making certain assumptions that are not correct. We

had a fairly large waiting-list last year, which has improved

significantly. I can't give you the numbers to the last figure, but

since the new theatre was opened at Vancouver General, they have

informed me in the last couple of days that they are catching up and

doing many more, and that the situation now is under control. There

always will be some waiting period.

I reject the statement

that three people have died. I wish he was as good a lawyer as he is a

doctor, because he's making statements that doctors wouldn't make. I

reject the statement that three people have died because they were on

the waiting list. You cannot say that, because even a physician

wouldn't make that statement. So again, you're trying to make a few

Brownie points by going on the backs of the poor people and the sick

people. You keep saying that we do that, and you're doing the same

thing.

MR. HARCOURT: While the shepherd is away, the

sheep will play. They finally got their voice. They wouldn't offend the

Premier when he was here earlier.

Interjections.

MR. HARCOURT:

Mr. Speaker, that is exactly my point. When is the minister going to

deal with the sick? When is he going to deal with the disadvantaged in

this province? What we're looking for is a commitment in this

Legislature from the minister that he will end these long waiting-lists

for heart surgery so more people don't die in this province. We want a

commitment, Mr. Minister.

PRIVATIZATION OF

>PROVINCIAL PARK CAMPGROUNDS

MS. EDWARDS:

My question is to the Minister of Parks. I have in my hand the document

which outlines the government's strategy for privatizing park

campgrounds. The document lists disadvantages to privatization,

including admissions that there will be pressure to commercialize

campgrounds and that there will be conflict with free public access.

How can the minister reconcile privatizing campgrounds with these

particular disadvantages found in the ministry's own report?

HON. MR. STRACHAN:

When you undertake any initiative, Mr. Speaker, you look at the pros

and cons, advantages and disadvantages of what you're doing. That's

just good management. If the member is suggesting that ministry

officials don't take into account all the details of any management

plan, then that's her suggestion, but we want to have a look at

everything that concerns good park management. One has to consider at

all times the pros and cons and what benefits or lack of benefits there

are. I think it's only appropriate and only responsible that in

developing our position paper on the contracting of services in the

parks, we do identify the potential disadvantages.

MS. EDWARDS:

A supplementary. Since these disadvantages are very clearly there,

according to the minister's answer, and there are other disadvantages

such as a reduction in the quality of facilities and private operators

dictating public park management.... In the light of all these

disadvantages, is the minister still prepared to give control of park

campgrounds to private operators for periods of ten to 20 years, as

suggested in the same report?

HON. MR. STRACHAN:

We're dealing with future policy here, essentially, Mr. Speaker. Let me

respond by again saying that listing the disadvantages is part of

good management. It doesn't mean they're going to occur; it's just

identifying to the management personnel that we do have these potential

problems to consider. When we consider the potential problems, then we

can develop means and strategies of organizing ourselves so we don't

have to worry about them.

The member is quite correct in what she reads. Those were the briefing papers developed for my benefit, and she

[ Page

4095 ]

quite correctly points out what the disadvantages are. But I see no problem

in identifying them. I think it's of benefit to the management operations

of the parks branch that we have those problems identified, so we can take future

action when it's considered necessary.

MS. EDWARDS:

Supplementary. Will the minister tell the House if he has developed

tendering packages for privatizing campground operations for the 1988

season, and if so, how many of B.C.'s 206 park campgrounds are included?

HON. MR. STRACHAN:

To begin with the last question first, I told you yesterday that I

believe 158 use contracted private services now, and have since 1983.

This is by no means a new program, a new step into privatization. It's

been in place for some time now — five years.

I don't know

where they are in terms of new tendering documents being prepared; but

as soon as they are, I'll let you know. I have no knowledge as of 2:27

this afternoon what the extent of tendering-document preparation

is.

MS. EDWARDS: Supplementary. The minister's

report says that privatization will result in a reduction in staff,

particularly seasonal auxiliary workers. Yet it also says the

government will fulfil its obligations under the collective agreement.

How can the minister reconcile that with job and wage cuts due to

privatization that fail to honour in spirit the government's agreement

with its workers?

HON. MR. STRACHAN: That's a

difficult one to answer. We do know what the collective agreement says

with respect to auxiliary employees. We are prepared to honour that,

and yet we still know that we have an appropriate mechanism within the

collective agreement for further privatization — it can be done.

VANCOUVER ISLAND TOURISM

MR. BLENCOE:

I have a question for the Minister of Tourism. Your generic marketing

budget has been reduced dramatically this year from $15 million to $10

million. We also know from your own research that Canadian visitors to

Vancouver Island, and in particular the capital, are also down

dramatically in the last few years. It's been made up for by U.S.

visitors. With that dramatic cut in budget of $5 million, there's a

distinct possibility that visitors to Vancouver Island, even American

visitors, might drop dramatically in the next few years. What is the

minister prepared to do to ensure that Vancouver Island and the capital

keep the number of visitors they should be getting?

HON. MR. REID: I am pleased with that question because it indicates

to that member, I would hope, the success of other organizations and government

agencies of the province, such as the B.C. Steamship Company, B.C. Ferries.

B.C. Transit and others, who do marketing on behalf of this government — and

not on behalf of the ministry primarily, but internationally — in drawing people

to Vancouver Island. The marketing of the product called Vancouver Island in

Alberta and Saskatchewan is the mandate of the area of Vancouver Island, but

the government's mandate is to draw people from primarily California, Oregon

and Washington, in relation to other organizations who are also funding the

marketing.

The

international tourism coming to Victoria and Vancouver Island will

continue to grow,

whereas the Canadian market and B.C. market in

Vancouver Island.... Unless the Vancouver Island communities market

this product in British Columbia and in the rest of Canada, there isn't

an opportunity for further people from those communities to be invited

here. The increase in tourism to Vancouver Island from Washington,

Oregon and California is primarily as a result of a strong focus that

we had during Expo '86 and a strong focus we had in '87 to continue

that marketing thrust. We increased the tourism to Vancouver Island and

will continue to do that — and not to the detriment of the rest of

Canada — but it certainly is incumbent upon the community of Vancouver

Island to market British Columbia.

[2:30]

AMBULANCE DISPATCH SERVICE

HON. MR. DUECK:

Mr. Speaker, I would like to respond to a question I took on notice as

of yesterday, and following that I would like to make a ministerial

statement.

The member for Prince Rupert (Mr. Miller)

mentioned three instances of delayed ambulance service in the Prince

Rupert area. I could only find one, and that was of the 25th. He has

chosen not to give me the other details, so I couldn't follow up on

those.

However, the one on the 25th: the call was received

at 14:26; crew paged at 14:28: crew en route to scene at 14:29: crew

arrived at scene at 14:37. Mr. Speaker, this response time is

acceptable, given that the unit had to respond a distance of seven

kilometers through downtown traffic.

I'm really concerned

that these things are coming up again and again, because we keep

absolutely accurate time when an ambulance is dispatched and when it

leaves and when it arrives at the scene. When fear-mongering tactics

are used, like someone dying because the ambulance service wasn't there

on time, and they're blaming people who are working hard, who are

conscientious.... Here I have 11 minutes and travelling 7 miles; you

couldn't do it any faster by any means. I want the members to know that

if there is a problem, I want to know about it, but don't give me this

stuff, this....

SOME HON. MEMBERS: Garbage.

HON. MR. DUECK:

Well, it is. This time is exceptionally good, and I don't like having

that used to have people fear that the ambulance service is not doing

its job. These are good, conscientious people and I think, again, that

they deserve an apology.

Ministerial Statement

ORGAN DONOR AWARENESS WEEK

HON. MR. DUECK: Mr. Speaker, I'd like to make a ministerial statement, and this is much more pleasant.

This

week, April 24-30, is National Organ Donor Awareness Week, and I ask

all British Columbia families to mark this week by discussing this

vital issue. This national week helps to encourage organ tissue

donations by increasing public awareness of the growing number of

patients requiring such transplantation.

Two main developments have contributed greatly to the success of transplants: medical progress and widespread

[ Page 4096 ]

public

acceptance of the concept of organ donations. A recent public survey

indicates that as many as 88 percent of North Americans would give

permission to donate a loved one's organs under the appropriate

circumstances. Consenting to participate in an organ donor program

means each individual could potentially contribute to the beginning of

many new lives.

Organ donation can include kidney, liver,

lungs, heart, pancreas, skin tissue, corneas and bone. In 1985 the

provincial government and the medical community established the B.C.

Transplant Society, which subsequently initiated the Pacific Organ

Retrieval for Transplantation program. Funded by the Ministry of

Health, PORT has responsibility for coordinating organ retrieval

efforts throughout the province. Last year alone, 270 patients

underwent corneal transplants, a procedure that now has a 95 percent

graft survival rate after the first year. This compares to fewer than

50 such operations before the Eye Bank of B.C. was set up five years

ago. In 1987, 137 kidney transplants were done in British Columbia,

compared to 98 in 1986 and 37 in 1985. This year a goal of 180 kidney

transplants has been set. Per capita, B.C. is ranked second in Canada

after Ontario. Graft survival rate at one year following transplant is

85 percent.

Roughly 20 percent of the B.C. population have

signed up as potential donors. Many have done so by completing the

organ donor consent card that accompanies their B.C. driver's licence.

Improvements to this system are presently under active review by the

government. Most important, people who have chosen to become potential

donors should discuss their desire with their next of kin. Make your

wishes clear to them so that they know what to expect and understand

what to do in case of your death. The presence of a signed donor

consent card carried in your wallet or purse, indicating your wishes,

makes discussion between the doctor and your family much less difficult

at a time of critical medical judgment and decision.

MRS. BOONE: I'd like to thank the minister for notice of his statement.

on the New Democratic side would like to add our voice to that of the

minister in congratulating people who have signed up as organ donors,

and to encourage people to make that commitment to save lives, to sign

their names on the card when they get a licence. These are very

important things. We all hear about individuals who require organs, and

the ones that really touch us are usually the young children that we

see requiring kidneys or what have you.

I would like to

take this opportunity, though, to voice my concern and raise once again

something that I've brought up with the minister. It has to do with the

bone marrow registry, which is something that could potentially save

the lives of many leukemia victims. It is something that I know I've

brought up with the minister, and I understand that you are looking

into it to develop a way to develop this registry. I have spoken with

the Red Cross, and this is a registry that can be done strictly through

computerization, so that people have knowledge of what type of bone

marrow you have so that they can potentially save lives. In addition to

the bone marrow transplant, I'd like to see us make that commitment to

the bone marrow registry so that we can start saving lives, not just

with organ transplants but also with the lives of the many leukemia

victims out there.

Orders of the Day

HON. MR. STRACHAN: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF

FINANCE AND CORPORATE RELATIONS

(continued)

On vote 37: minister's office, $293,411.

HON. MR. COUVELIER:

The ministry's main operating estimates are shown under votes 37, 38

and 39. As Minister of Finance and Corporate Relations, I'm also

responsible for the management of the public debt, vote 72;

contingencies, vote 73; and new programs, vote 74, shown at the back of

the estimates.

With respect to its operating estimates, the

ministry is asking for an '88-89 budget of $62 million. This represents

a decrease of $2.3 million from '87-88. The decrease primarily relates

to the establishment of a self-financing B.C. Securities Commission.

The commission's budget will be fully recovered through fees and

licenses charged to the securities industry. This self-financing

initiative will enable the commission to adjust its activities and

budget in accordance with the market.

On a comparable

basis, excluding the Securities Commission, the ministry's operating

estimates are up 3.7 percent, while FTEs, again after adjusting for the

Securities Commission, are down 6.7 percent. A significant amount of

moneys is being placed into improving productivity. The estimates

include $2.2 million for systems development, compared with $1.4

million for '87-88. These investments will save operating costs in the

future.

With respect to the corporate relations division,

funding is up 14.5 percent over last year. There has also been a

reorganization of the division's activities in Vancouver and a

realignment of responsibilities between the division and the B.C.

Securities Commission. The revenue division also remains a priority, in

that their estimates are being increased by 9.6 percent over '87-88.

This is where a significant portion of the ministry's systems

development is being directed.

It should be noted that our

estimates include $257,000 for the operation of the compensation

stabilization program until the office closes on September 30, 1988.

The requested funding is less than half the amount for '87-88. It will

allow the commission to monitor the compensation plans not yet expired

under the program, as well as maintain its data bases and produce a

windup report.

That concludes my overview of the estimates. I now welcome any questions.

MR. STUPICH:

First, I'd like to comment a bit and ask the minister some questions

about some of the remarks he made in closing the budget debate. He took

issue with some of the remarks made on this side of the House, and now

I'd like to come back and have my turn at him.

First, quoting from Hansard ,

page 3776: "During this debate it was claimed that the gross provincial

product is still at the level of 1981 in constant dollars. This is

totally incorrect." I agree with the minister that that statement is

incorrect, but as I recall it — and I haven't checked it — what was

said on this side of the House was that 1986 was the first year that we

reached and passed the gross product that was achieved in 1981.

[ Page 4097 ]

The

next comment I'd like to make is that he says: "This clearly means that

the standards of living are higher now than they were then.

Furthermore...." I'll leave that; it's just about wages.

don't think we can afford to rest on our laurels. Stats Canada says

B.C. families are poorer than they were in 1980. B.C. family income

fell 9.7 percent from 1980 to 1985. B.C.'s 775,820 families earned an

average $37,655 in 1985, down from $41,688 in 1980. Canada-wide, the

decline was only 1.2 percent, from $38,277 to $37,827.

Further

on that, a new report released in Ottawa today and dated April 26,

1988, shows just how far B.C. is lagging behind other provinces in

recovering from economic recession in the early eighties. Those below

the poverty line have increased significantly. In 1981 there were

69,000 families; in 1986 it had grown to 105,000, a 52 percent

increase. In terms of percentage of overall population, the poverty

rate in B.C. jumped from 9.4 percent in 1981 to 13.3 percent in 1986.

Ontario has the lowest poverty rate at 8.7 percent. B.C. trails behind

Ontario, Prince Edward Island and Alberta.

If the minister

wants at any time to get up, that's fine with me. If he indicates

otherwise, I'll keep on going for another ten minutes or whatever.

The

minister went on to say in his closing remarks: "Much comment was made

about our fee increases in the two budgets that we have brought

forward. The suggestion was that these are somehow hidden taxes." He

goes on to argue that they are simply recovering the costs of

delivering services.

Mr. Chairman, you were in the House

and heard the previous Minister of Finance embark on a three-year

project, I believe it was, to rationalize the fees that were being

levied by government for various government services. He was trying to

bring them in line with the cost of delivering those services, and he

achieved that, according to what he told us. Since this minister took

office as Minister of Finance, we have had over 700 fee increases.

We're still getting them. Almost on a daily basis another list of fee

increases is.... I was going to say made public. I think they are

released. I'm not sure the public ever hears about them except for the

individuals directly involved — that is, the ones who are paying.

[2:45]

Nevertheless,

after we were supposed to have rationalized them, we then started on a

series of fee increases — over 700 to date. In some cases the fees have

not just increased marginally; they have increased three and four and

ten and twentyfold. If the minister is just recovering the costs, is he

telling us that the costs of delivering some government services have

in the last three years in some cases increased tenfold? I find that

difficult to believe, but if he has any examples of costs having gone

up that fast, I'd like to hear about them.

He says they're

"sensible alternatives to tax increases." Sensible from the point of

view of politics. As I say, there is no debate in the Legislature, no

justification, no discussion here as to whether.... And I'm not saying

there should be; I think the Legislature would be dealing with nothing

else if it had to deal with every single fee increase. But it would

seem to me that when the minister is putting out press releases — and

he does so regularly — he might put out some about these fee increases

and tell us exactly why they are going up with respect to that

particular service, especially the ones where there are the most

dramatic increases.

"A statement was made that B.C.'s small business income

tax rate of 9 percent is the second-highest tax rate in Canada. That is totally

incorrect.... "

I'll leave it to you as to which one of us is on in this case. The minister

said there are six that have higher rates, and indeed there are. Six provinces

have 10 percent. We were at 11 until this recent budget. We still are, I guess,

until we pass the legislation. He said there's another one that has the

same rate as us, and that is the case — one other. exactly the same. Six at

10, two at 9. We have company — there's lots of company for first place.

We're the second highest. So the minister is wrong in saying that our statement

was totally incorrect. Maybe it wasn't telling the whole truth any more

than he did, but neither one of us was totally incorrect.

The

minister argued with respect to Medical Services Plan premiums that

they contribute "only 12 percent of the total cost of health care in

this province and, indeed, are less than the premiums charged in the

richest province in Canada — that is, Ontario. " Yes, they are less

than Ontario's. The minister didn't say there are only three provinces

where such premiums are charged. I just want you to note, Mr. Chairman,

that the minister is now comparing the amount of medical services

premium revenue to the total cost of health care and saying that it's

only 12 percent. In the budget, the minister wasn't comparing the

Medical Services Plan premiums with the total cost of health care. I'm

reading from the budget: "Effective May 1, 1988, MSP premiums will fund

50 percent of physicians' fees and 100 percent of the taxpayers' costs

of enhanced medical benefits." In saying that by using a different

yardstick we can get the percentage down lower — that if we compare it

to total health costs, it's not 50 percent; it's only 12 percent — the

minister is not incorrect. But he might just as well have said that by

comparing it to the total cost of the provincial budget, it's only 4.7

percent. I don't see the relevance of it, Mr. Chairman.

The

fact of the matter is that we have dramatically increased Medical

Services Plan premiums in British Columbia. That is not happening in

other jurisdictions, to the best of my knowledge. There are still seven

provinces — again, to the best of my knowledge — that charge absolutely

no MSP premium. Everything we said in complaining about MSP premiums

was true.

The minister talked about us complaining about

the increase in charges for seniors living in extended-care homes. We

referred to seniors having just $3.69 a day left to them. The minister

described that as a distortion of fact, and went on to say: "The fact

is that if these seniors are getting GAIN...the amount of money left

for them is $4.95 per day, not the $3.69 that the hon. members waxed

eloquently about." That's right, if the senior is a single. Of course,

a single gets a maximum of $50 under GAIN; a couple gets a maximum of

$60 between the two of them. So if you're looking at a single person,

the minister's figure is correct; if you're looking at a couple and

looking at each one of them separately, the figure is much lower than

the $4.95 and much closer to the $3.69 quoted on this side of the House

— whether it was me or somebody else I'm not sure right now. When we

say what they are left, whether it's $3, $4 or $5, or $3.73 or $3.63,

let's bear in mind that these seniors, either from their own resources

or from those of their families or friends or other agencies, still

have to pay for things like wheelchairs, denture relining, glasses,

user fees for physiotherapy, dispensing fees for prescriptions, and

personal items that we can't count at all.

[ Page 4098 ]

Let's

remember also that in the minister's rush to increase fees, the fees

for ambulance service have gone up to $35 for the first 40 kilometres.

That is a significant increase, and often the residents of such places

are called upon to use the services of an ambulance. So it doesn't

really matter when we're down that low just how much it is — it takes a

lot of saving to pay for a trip in an ambulance.

Costs of

education: "He" — that was me — "claimed that the regressive property

taxes account for 37 percent of education funding, and the funding

shortfall is caused by the reduction in non-residential property taxes

which has been assumed by residential property owners, individual

homeowners." He went on to say that this government's contribution to

education amounts to 80 percent of the cost of education. I suppose

it's true. The government is collecting money from the rural areas.

They have been increasing the rural rate of taxation regularly; it's

now up to 17 percent. I think it was 10 percent when it started going

up just a few years ago. They've removed the right from local school

boards to tax non-residential property, but the residential property

tax in total is still covering the 37 percent that it was covering

before. When you take the 20 percent the minister spoke of that's left

to the control of the school boards and add the 17 percent that is

being collected by the government in rural areas — and which is being

turned over to the school boards — we're still left with the property

tax raising 37 percent.

The only study that was done on

this, to my knowledge, was the McMath commission, which delivered its

report to the Bennett administration in 1976. Their recommendation was

that it should be 75 percent covered from other than property taxes.

There has been no positive action in response to that McMath commission

report.

Interjection.

MR. STUPICH: My

colleague from Coquitlam-Moody (Mr. Rose) assists me now by asking:

when was the last time you can recall an increase in the homeowner

grant? I recall that when the NDP were in office it happened every

year. I think it's happened twice since. Both of them — entirely by

coincidence — were election years.

AN HON. MEMBER: A good Social Credit program.

MR. STUPICH:

Yes, Mr. Chairman, I'll give the Social Credit the credit for having

introduced that program. But what's happened to it under this regime?

Are we waiting until election year before there's any adjustment upward

in the homeowner grant? I'm asking, Mr. Chairman; it's a question. I

know it would be a coincidence, but let's ask the question.

"The hon. member" — myself — "also talked about this budget having

an impact of $700 for each family." Then he went on to talk about how

his middle-income family — with one smoker; moderate drinking; two cars

— would have an annual effect of only $317; and for seniors with

$20,000 income, $116.

Mr. Chairman, there were representatives of the

Institute of Chartered Accountants in the lockup. They arrived at

figures somewhat close to what the minister arrived at — and maybe that

was what he was quoting; I don't know. They sat down with some of our

staff afterwards and went over the figures, and they agreed with us

that the average is $700. An average is not very comforting, perhaps,

to some people.

Tommy Douglas used to talk about having

your head in an oven and your feet in a block of ice, and the average

might be satisfactory, but it's kind of tough on the extremities. If

the minister is saying that some people are getting away with a figure

of $116 or $317 — I think that is what he said — then some people are

paying a lot more, to bring the average to $700. Some of them are

paying $1,400, at that rate, to get the average. I don't know what the

minister can do about the average, but I'm telling you what it is, and

I'm telling you that the Institute of Chartered Accountants

representatives agreed that that was the figure from their examination

of this year's budget.

Now we get into the amount of the

debt. I said that the B.C. debt at March 31, 1989, will be $19.2

billion. I don't know what it's going to be, Mr. Chairman. The minister

did say in a press release that the direct debt of the government and

its Crown corporations on March 31, 1989, will be 28 percent of the

gross domestic product — the lowest level in six years. Looking at

table B1 of the budget, the gross domestic product is $68.97 billion,

and 28 percent of that figure is $19.3 billion. Was the minister

telling us the truth when he said 28 percent? Was he telling us the

truth when he said the gross domestic product will be $68.97 billion?

If either of those statements was wrong, then it's conceivable that the

debt will be less than $19.3 billion. But if he's right in those two

other figures, then 28 percent of the gross domestic product equals

$19.3 billion. He must have been using some other figures to come up

with a figure that indeed is shown in the budget, in

schedule B1, in

the amount of $18 billion. I'd like to know: if he can, will he tell me

whether his 28 percent was wrong? Or will he tell me that, in

calculating, he used different figures for the gross domestic product

for 1988?

This is a specific question, Mr. Chairman. In the

budget speech of last year, 1987, social service tax was reduced from 7

percent to 6 percent, and a further reduction to 5 percent was to be

made later in the 1987-88 fiscal year. What I'd like to know is: how

much did the minister estimate it was going to cost in forgone revenue?

He didn't say in exactly what month it was going to be reduced, but he

did say it would be reduced a further 1 percent. He must have allowed

something for that in arriving at his figures in the budget, and I'm

wondering what the amount might have been.

I didn't bring

my Public Accounts for 1987 with me. Oh, I guess I did; I have

photocopies here. I'm just wondering about an item in the farm income

assurance fund. The government did put a total of $11 million into this

fund, to meet deficits of individual programs in 1979-80. I think both

amounts went in that period. I note now that there's a fund balance of

$22.28 million. I'm wondering whether the minister has any intention of

recovering that $11 million from the farm income assurance fund at some

time.

Another question about Public Accounts for 1987 with

respect, again, to special funds. I noted that the lottery fund — the

balance as at March 31, 1987 — was in a deficit position of

$45,048,721. Was it just a coincidence that that included the election

year 1986, or is there some other reason that there was a deficit for

the first time in the history of the fund, which was established just

in the year ending March 31, 1975? Did the government feel that it was

called upon to put out a lot of extra money in election year, and is

that why the fund is in a deficit position?

[3:00]

I've seen something, I'm not sure whether in a press release or in something similar, to the effect that the govern-

[ Page 4099 ]

ment

has changed its position on the sales tax exemption with respect to

agricultural chemicals — not agricultural; I don't mean to say

agricultural, because agriculture was involved but I understand that

the forest industry was involved to a much greater extent — and that

it's going to cost us a total of $1 million in forgone revenue.

understand also that the government has rethought its position on the

$50 deduction from single-parent mothers with young children. It was

supposed to be implemented, and I think the government has said that it

has changed its mind on that. I'm wondering what that is going to cost

in forgone revenue as well.

This is a golden oldie, as they

would say on JR Country. I used to ask the former Minister of Finance

about money that was advanced in the ill-fated attempt to save the

Canadian Commercial Bank, and the previous Minister of Finance used to

tell me year after year that the government was still hoping to recover

this. The government of British Columbia put up $13 million in the form

of a debenture; the Workers' Compensation Board put up $5 million of

its fund in a debenture; B.C. Rail had a $500,000 note. That's a total

of $18.5 million. I wonder if we've recovered this, whether there's any

hope of recovering it, or just what the score is.

There's

one other item I want to ask the minister about. When the federal

government embarked upon its fair taxation scheme, included in that was

a total change in sales tax, or whatever we want to call it — it's

consumer tax, really — and there were going to be negotiations with the

provinces to see whether there could be a common approach to this, or

even a common rate. I wonder if the minister can tell us anything at

all about these negotiations, and whether he or his staff have been

meeting with their federal counterparts on the negotiations with

respect to a Canadian consumer-tax system.

HON. MR. COUVELIER:

Mr. Chairman, I had no difficulty with the hon. member's opening

comments, because they were sort of generic and I was well able to deal

with them en masse, so to speak. But towards the end of his

presentation he got rather specific, and I'm not sure that we captured

all of the specific questions on this side of the floor.

First

— with the permission of the House — I would like to introduce my

staff, who are here this afternoon to assist me in dealing with some of

these technical matters: my deputy minister, Mr. Frank Rhodes; the

secretary to the Treasury Board, Mr. Philip Halkett; the director of

corporate relations, Mr. Gerry Armstrong; and the chap in the corner is

Mr. Doug Hyndman, who is the securities commissioner for the province

of British Columbia.

Mr. Chairman, there are a number of comments. The question of B.C. families

doing poorly, and the reference to some StatsCan figures which show that family

income is down: I also was interested in that release, and upon examining it

satisfied myself that it's another classic illustration of taking selected

information and making something out of it. There's an old truism that figures

lie and liars figure, and while I wouldn't want to characterize our loyal

public servants in StatsCan of being guilty of that offence, nevertheless I

think there is the opportunity for all of us to be selective in the kind of

material we would use.

is certainly true that the B.C. economy went through some very rough

times in the early '80s, and all of us were agonizing about the

solutions we might be able to embrace in order to help pull ourselves

out of that economic slump. It's undoubtedly true that many dual-income

families during those hard times became single-income families, and in

looking at that StatsCan information, it occurred to me that that was

the most obvious illustration or example. Family income is down or was

down, but that was family income. If you look at the record of this

government since it has assumed office — just a very brief year and a

half ago, Mr. Chairman — the fact that we have increased employment and

created 90,000 new jobs in that short year and a half.... The economy

has clearly turned around. Revenues are up, certainly in a governmental

sense. But more importantly, the level of vitality in the economy is

without question much stronger than it has been in recent years.

would be less than honest and a little too bombastic if this government

were to claim credit for all that marvelous recovery. On the other

hand, I trust that my critic from the opposition side might have the

generosity of heart to concede that we at least were participants in

that recovery. Obviously none of our actions had the effect of

minimizing or reducing that tremendous record of re-energizing our

society.

There's just no question that the B.C. economy has

had an outstanding year just past. That's not to say that we are

resting on our laurels. Clearly we are continuing to work very hard in

every line ministry to ensure that we continue to build for the future.

The

hon. member dealt with fee increases. He referred to them, if I'm not

mistaken, as "hidden" increases in cost to our citizens. As a matter

fact, nothing could be further from the truth. The fact that they are

user fees means that they are perfectly obvious to those paying them.

Far from being hidden, they're quite evident to all. That's by design.

This

government believes that whenever we are able to identify a service

being provided to a small segment of society and being heavily

subsidized by the general taxpayer, we should then be examining the

level of fee charged to make sure that to the maximum extent possible

the average taxpayer does not pay for those very specialized services.

Admittedly,

governments have been traditionally slack and reluctant to address that

philosophical issue because we can quite properly be criticized for

"nickel and diming," which I've heard alleged from time to time. It's

easy to understand why that has not traditionally been done. Therefore,

when we came to office and learned to our amazement that some of these

fees hadn't even been looked at since the early 1900s, it was clearly

time to deal with that issue even though we may, in the process, suffer

some criticism for doing so.

As to the philosophy that the

average general taxpayer should not be subsidizing those very

specialized services being provided only to a small sector of the

economy, I think that we can support and defend it. That is to say that

we recognize that some sectors must be subsidized for the average

taxpayer, even though they may be a narrow service provided only to a

few. Those instances are rare, by and large, and when you look at the

range of government services provided by all the line ministries, it's

clear that the need to address this question of user fees was overdue.

to the suggestion that we should be having press releases to justify

each decision, may I just point out to the hon. member that we in the

Finance ministry do not normally become involved in the setting of

individual fees. We leave that to the line ministries. We merely point

out to the line ministries that they have not addressed the various fee

issues since x number of years, or that in our judgment they should be

expected to recover x percent of their operation costs from

[ Page 4100 ]

fees. We will offer generic advice, but we seldom get down into the specifics of each fee schedule.

The

hon. member pointed out that our MSP premiums took a large rise and

spoke critically of that. I think he also mentioned that only three

provinces charge medical service premiums, and therefore our claim to

be second best in Canada was a little fatuous. While I don't have any

trouble agreeing that there are only three provinces in Canada that

charge fees, nevertheless may I point out to the hon. members opposite

that those provinces that don't charge medical service premiums collect

their taxes with other devices. May I remind the hon. member that

probably a contributing factor to the election results in Manitoba

yesterday might well be attributable to the fact that they charge a

payroll tax to help finance medical costs in that province — probably a

taxation system far more onerous and less sensitive and less fiscally

responsible than an MSP premium charge.

The hon. member

also mentioned the increase in OAS-GIS rates from 75 percent to 85

percent. My colleague the hon. Minister of Health (Hon. Mr. Dueck) just

reminded me that he and his ministry are adjusting the rate for couples

so that there is no penalty to them in a financial sense for that

relationship. I don't know if the hon. member opposite was aware of

that fact.

The hon. member gave us a quote from Tommy

Douglas, dealing with the issue of averages: "Head in the oven, feet in

the ice," which was appropriate. I am reminded of a quote from one of

our famous sages on this side of the House, W.A.C. Bennett, who on the

same subject of averages said: "It is possible to drown in an average

of six inches of water if you're at the deep end." We now have two

quotes from two sages of the respective philosophical basis of both

parties on the record.

Dealing with lost sales tax, the

question was: how much did we expect to forfeit had we followed through

with our statement that we were to cut another 1 percent off the sales

tax before the end of the fiscal year '87-88? It is very difficult to

be specific in this sense. We were very uncertain how much vitality

there would be in retail sales generally in British Columbia after the

Expo year. I can tell you that our target figure in terms of a

financial balancing act was about $20 million in expected forfeited

sales tax revenue had we followed through with a further 1 percent cut,

which likely would have been for a period of a month or less.

The

reason for my vagueness is, as I say, the difficulty we had in

predicting how much vitality there would be in the retail sales sector

12 months before its occurrence.

The hon. member asked whether we would attempt to recover the funds from the farm income insurance program. The answer is yes.

were also asked about the lottery deficit over year-end. The deficit

arose because of our decision to accrue the Expo debt over that

year-end. For that brief period of the financial statements, when they

took the snapshot of the province's affairs, it had the consequence of

leaving a deficit. Dealing with the lottery deficit, it was a

consequence of a decision we made to accrue Expo debt. During the time

the snapshot was taken over that year-end, you are quite correct; there

was a deficit in the account.

We were also asked about the

extra expense that would flow from our decision not to institute the

15-week requirement for mothers on welfare. My memory of that issue,

and no staff member has corrected me here, is that that decision cost

$8 million.

Dealing with the question of the federal

government's willingness to consider recompensing the province for our

deposit in the commercial bank, I unfortunately must advise the member

that that request was declined. We have absorbed that cost into our

statements.

To the best of my ability, I have answered the

specific questions I was able to catch. If I've missed any, I would be

pleased to have another stab at it.

[3:15]

MR. STUPICH:

In spite of the reassurances from the former Minister of Finance, I

never believed for one moment that we'd ever see a penny of that money

come back, but at least now we know the answer.

I'm not

sure whether I should raise this question or not, but I really want the

answer. There's nothing about it other than that it's a shortcut for me

to find out something. Since Mr. Prowse left, I don't know who to talk

to over there; shows how far behind I am.

In any case, the

mining tax is administered by your ministry. The mineral resource tax

is administered by the Minister of Energy. The mining tax, to some

extent at least, is a deductible item in calculating corporation tax —

I'm not sure who I should be looking at here. I'm not sure whether the

mineral resource tax is a deductible item, and I'm not sure which one

you calculate first. I've never done a mining tax return. There is

legislation coming up, and this is information I'd like to have before

we get to that. I just thought I'd ask today, and if you want to refer

me to someone in the ministry, I would be only too happy to take this

up with them.

While people are maybe thinking about

that.... The minister said that nothing done by this government would

hold back the economy. I think there will be some comment about that

from this side of the House, but there is one thing that I want to

raise. I am concerned that there will be a lot of damage done in the

not too distant future partly because of the support this government

has given to the federal government in its entering into a free trade

deal with the United States. I believe it is going to do a lot of

damage to British Columbia.

I'd like to quote none other

than the Premier, who recently said that it is going to cost B.C.

taxpayers "multimillions of dollars" to assist those industries which

are going to require assistance once we get into the free trade deal.

He may have mentioned more, but one industry that he mentioned was the

grape producers and the wine industry. He said "industries" — plural —

and I'm not sure what others he had in mind; I don't recall from the

article. I wonder whether the minister has made any provision in the

budget for the multimillions of dollars about which the Premier spoke,

or when he believes it will be necessary to include this in the budget;

whether he really expects any help from the federal government in this

program to try to rescue some of the B.C. industries that are going to

be damaged or even wiped out as we get into this free trade deal, or

exactly what plans the Ministry of Finance has to deal with the

difficulties this is going to cause a lot of British Columbians.

HON. MR. COUVELIER:

I will take the technical question of the mining tax calculation on

notice, and I trust we'll have the answer back soon for the hon. member.

Dealing

with the grape industry question and the other issue related to the

free trade agreement, I can tell the hon. member that the government is

aware of the need for us to provide support services to those

industries affected. You're

[ Page 4101 ]

quite

right: the grape industry is one of those identified. I find myself

unable to go much further than that generic statement because we are in

the midst of negotiating the matter with the federal government; and

insofar as the federal government will have considerable exposure to

the Ontario wine and grape industry, the matter is still the subject of

active negotiations by the hon. minister in charge. I can only say that

we have provided in this budget for an expectation that assistance

would be provided. Its amount. I'm afraid, will have to be left

unaddressed in this public chamber until the negotiations with the

federal government are complete.

MR. STUPICH: I did

ask the minister earlier — and it's one of the things that he missed, I

guess — about the negotiations with the federal government about an

all-over federal-provincial consumer tax; a sales tax, if you like, but

the federal tax proposals included in negotiations with the federal

government.

HON. MR. COUVELIER: The province has

been actively engaged in discussions with the federal government, in

concert with other provincial governments, on the issue of a national

sales tax. We have not yet given our support to the concept. We are

interested in a number of specific questions dealing with application

and the matter of uniformity across the country. At the moment, I don't

believe any province has made a categorical statement on the issue. I

can just assure the hon. member that the discussions we are having are

amicable and are proceeding at the appropriate political pace, given

the dynamics of the moment. I don't imagine there will be any great

difficulty in finally resolving the issue at some point in the distant

future.

MR. STUPICH: Just one clarification, Mr.

Chairman. Does the minister believe that there will not be great

difficulty in getting the ten provinces and the federal government to

reach agreement on this plan? I hope that is what he said.

HON. MR. COUVELIER:

If I said it, Mr. Chairman, I would retract it; I wouldn't want to be

hoist by my own petard a year from now. But at the moment I can just

repeat that negotiations are amicable, all sides recognize the validity

of the others' points, and there are frank discussions going on. It

will be a negotiation process. Each province of Canada expects

something it might get as a consequence of embracing the national

scheme. It's rather convoluted, but I can just repeat: we are involved

in negotiations at the staff and political level. I think we might have

met on this subject three times last year at the political level and

far more frequently at the staff level.

MR. STUPICH:

On the same subject, the minister said that one of the areas of

discussion is the application. Is he able to tell us anything about the

scope of the application of the tax? I would think not, but if he can,

I'd like to.... I wasn't going to mention food.

HON. MR. COUVELIER:

Food is clearly one of those issues. The matter of municipalities,

universities. school districts and hospitals is another. But the issues

are even larger than that, in the sense that each province, as I said,

has some unique ambitions that they're attempting to roll into these

considerations. At the moment there is no cause for concern; at the

same time, I wouldn't anticipate that you'll see a national sales tax

in place in British Columbia within the next 12 months.

MR. STUPICH:

Mr. Chairman, the remark from behind me was: "That's comforting." I

know the federal target was January 1989, and the minister says not

within the next 12 months. So it appears as though the federal target

of January '89 is not going to be met.

He also said that

food is one of the items that has been discussed, and something even

larger. I can't think what might be larger.

HON. MR. COUVELIER:

I think we're dancing around on the head of a pin here. The reason I

felt the other issues might be larger is that I think the food issue

has been publicly addressed by the national Minister of Finance; so

it's a non-issue in my terms. I’m not sure he has publicly addressed

the other issue: municipalities, universities, school districts,

hospitals. That explains my choice of words.

MR. CLARK:

Just a couple of points on the same topic. Does the provincial

government have a position with respect to the food tax yet? I know

it's negotiations and you're sensitive, but Nova Scotia and Manitoba,

for example, have already rejected a food tax. One other province, I

believe, has categorically rejected it. This province to date hasn't

taken a public position on it. Is the government prepared to take a

position on that?

HON. MR. COUVELIER: Mr. Chairman,

I want to state categorically that this province is totally opposed to

a national sales tax on food, and I conveyed that message most

aggressively and emphatically to the Minister of National Revenue. I'm

pleased to advise the hon. member that as a consequence of our

protestations, he agreed and said publicly there will be no national

sales tax on food. I take absolute, total credit for that victory — a

small victory for the average British Columbian.

MR. CLARK:

It's ironic, because I asked the Premier this question in the House

last year, and he refused to reject a sales tax on food. If the

government has seen the light on this question, then we applaud them.

The

second point on the same topic: does the government have a position

with respect to the variance of the sales tax that is being promoted?

For example, does the provincial government prefer a business transfer

tax or a national sales tax? There are at least three models floating

around. The business transfer tax seems to be the one the feds are

leaning toward. I don't want to prejudge sensitive negotiations, but I

wonder whether the province has a preference in terms of the kind of

national sales tax they would prefer to see.

HON. MR. COUVELIER:

The hon. member would like to know the answer to that question, and I'm

sure so would the national Minister of Finance. That's one of the

issues around which the negotiations swirl, and I trust the House will

understand my inability to deal with it in a specific sense.

MR. SIHOTA:

I want to deal with a number of issues during the course of these

estimates. I want to deal first with the matter of Principal Trust and

subsequent to that with the matter of the stock exchange. I intend to

put in a fair bit of time on Principal Trust and to ask some very

specific questions

[ Page 4102 ]

to the minister. I hope those seated around him will be able to provide equally specific responses to the questions posed.

The

reason for this is quite clear: there are 18,000 British Columbians who

have been affected by the collapse of the Principal group of companies,

FIC and AIC included. Somewhere in the neighbourhood of $156 million in

savings are deposited with those companies — savings that are now at

risk. Affected individuals are walking around in a state of shock

really, from the letters and phone calls that I get, wondering how this

could have happened, wondering where the government stood on this issue

in terms of protecting investors. They're asking themselves about the

responsibilities of government regulators — responsibilities they had

been led to believe were there, and apparently were not. We'll get into

that a little bit more.

I'm touched by the personal stories

that I get of seniors who have contributed their life savings to

Principal Trust in the expectation that it would provide them with a

reasonable income. Many of the people involved in Principal Trust are

individuals who worked hard during the course of their lifetime,

contributed taxes, thought that they had built up a bit of security for

their retirement days and looked forward to enjoying those retirement

days. They were people who had participated in a very positive way in

this society.

I am always reminded of one instance in my

riding where a couple who didn't have any children retired at an early

age, at 55. They had $150,000 which they deposited with Principal

approximately a month before the collapse. Worse still, there is

another situation of a couple in Duncan who had come into an

inheritance of $200,000. The woman's family had worked hard to

accumulate that level of wealth and had passed it on carefully and

conscientiously to the children. The money was deposited at Principal

the day before the collapse.

It destroys people to learn

now that that money is in jeopardy and there is limited or no chance of

them securing that money. What is particularly galling — and I think

that is the best way to describe it — to many of these people is

picking up the newspaper in the ensuing months and reading what is

happening in Alberta and the type of evidence that's coming out of the

Code inquiry. They see that some of their money which they had put into

this institution is now being used to hire the daughter of the

principal of Principal Trust to the tune of $150,000 a year to do

studies on weather patterns.

[3:30]

shakes them up when they read that the family in charge of Principal

Trust — the Cormie family — is able to transfer millions of dollars out

of British Columbia and Alberta into foreign jurisdiction in the United

States to make sure that they have wealth in the future, despite the

outcome of the hearings. Yet, on the other hand, the investors don't

have the same level or any level of individual security. It is galling

for them to hear about family members on payrolls, exclusive houses in

the Victoria area, yachts and leather furniture and briefcases, all

really being there as a function of their investment. Small people

working hard, seniors working hard, families working hard to raise a

level of capital for their future.... To see it being abused by these

people as the evidence comes out really hurts the people that had

invested.

I want to emphasize to the minister the extent of

personal stress caused by the collapse of Principal Trust. In British

Columbia 18,000 people are very carefully watching what is transpiring

in Alberta these days. They are also looking to their provincial

government for some leadership and assistance.

I want not,

however, to overly stress the personal situation. I think I've sketched

it out fairly to the minister. I want to move to the actions of the

provincial government in comparison to other governments to assist the

individuals affected by the collapse of Principal Trust.

The

provincial government appointed a commission, headed by Mr. Lyman

Robinson, which reported last year, and from that commission came a

number of recommendations. I want to point out what those

recommendations were, and then I want to point out the shortcomings of

that inquiry and ask the minister a whole series of questions.

the end of the day, after Mr. Robinson's efforts were completed, his

investigations were in and his report tabled, the government said it

would assist investors in several ways. It said that the government

would seek a court declaration that the Principal group of companies

cheated and defrauded depositors. What is the benefit of that to those

investors who have lost their life savings? I would submit that the

benefit is nothing. If the minister disagrees, I would like to hear

why. The net effect of that action on the part of government would be

to have the courts declare what we already know. We already know that

these small, innocent investors were cheated and defrauded. To seek a

court declaration stating that is of no benefit, no assistance and

little comfort to those individuals who have lost their life savings.

The

government, after the completion of the Robinson report, came down and

said, as its second action, that it would stop Principal from carrying

on cheating and defrauding the public. Again you have to ask yourself:

what was the benefit of the government saying that at that time? After

all, the Principal group of companies were no longer in business. It

might well have been useful if the provincial government had stopped

Principal from carrying on cheating and defrauding the public while it

was in business and while it had access to some assets, but there is no

benefit in that government action to try to stop Principal from

carrying on cheating and defrauding the public. The government took

great pains to indicate that in a press release which I have a copy of

somewhere. Again you have to ask yourself: how did that assist or stand

to benefit the average investor? It did not. Accordingly, that

government action after the Lyman Robinson report really is of no

benefit to investors.

The government went on to say that it

would seek damages for the losses accrued to the investors by a court

action or by assisting the individual investors through some type of

court action. Again you have to ask: what was the benefit of that to

the small investors? What's the benefit of a dry judgment against

Principal Trust? As we say in the legal community, a dry judgment is

just that: you may well have secured yourself some kind of declaration

or damage award from court, but if there are no assets to attach to,

what is the benefit?

[Mr. Rabbitt in the chair.]

Again,

the government's supposed willingness to assist investors in this

regard really amounts to nothing. Where would the money come from? The

Principal group of companies is bankrupt. Their major creditors, the

promissory note holders who stand to lose a greater percentage of their

savings than the contract holders, were just as much victims of the

cheating and fraud. Any damage award to contract

[ Page 4103 ]

holders

would have the effect of increasing the losses to these note holders.

The process, in part, would set victim against victim, and more

importantly, as I said, there's nothing really there to attach to

because the companies are insolvent.

The fourth action that

the government indicated it was prepared to take after the Robinson

report, in a gesture demonstrating its overt and ongoing concern for

the investors, was to seek a declaration from the courts that the

defendants in each of them, namely the Principal group of companies,

were suppliers within the meaning of the Trade Practice Act. Well,

that's fine if you want to do that in court and seek that declaration

from the court, but there are no real tangible benefits and no

assistance to the individuals affected, the small investors.

guess fifth was the commitment on the part of the provincial government

to seek other relief through bankruptcy proceedings. Again, there was

no real benefit in any tangible sense to the investors, because of

course the investors will have little or nothing to attach to.

you review those supposed commitments made by the provincial government

after the filing of the Robinson report, really not much comes out of

it in terms of actual, tangible benefit to the investors. You see, Mr.

Speaker, what the investors are looking for is an assertion of

leadership from government. They're looking for this government to

assist them in seeking recovery of their funds. They're walking around

in a somewhat dazed and stunned state saying: "How could this have

happened? We had faith in government regulators. We had faith in the

Investment Contract Act. We put faith in the assurances that were given

to us when we went down to the Principal offices as to the solid

stature of the company." They are walking around in a dazed state

asking the government to give them some assistance in proceeding

against Principal and also, of course, proceeding against the

provincial government should it be found to be negligent. I'll come

back to that latter point in a few minutes.

I see that my time is running short.

MR. ROSE:

I was fascinated, Mr. Chairman, with the trend and the line that the

hon. member for Esquimalt-Port Renfrew was taking in relation to the

Principal Trust collapse and the tragedy associated with it. I'm sorry

that his 15 minutes ran out, and as an intervening speaker, I urge him

to carry on.

MR. SIHOTA: The point I was making in a

brief way to the minister — and I really wanted to flush out some

introductory comments so as to allow us to get into some specific

questions later on — was really that any action this government has

taken to date is of no benefit to the investors, and there's a vacuum

of leadership that requires some type of government action. What I

intend to do is compare what this government has done for those

investors, which is nothing, with the commitments the Alberta

government has made, in order to demonstrate some of the things that

should be done by this government. I'm not saying that what the Alberta

government has done is in and by itself perfect — there certainly are

shortfalls there. But I want to bring to the attention of the minister

the assistance provided by the Alberta government.

The Alberta government, unlike British Columbia, has agreed to have a public

inquiry. They are paying 100 percent of the costs of the Code inquiry. The Alberta

government is paying 100 percent of the costs of special counsel — namely, Mr.

White. Mr. White is there to represent the interests of all Principal contract

holders, including the 18,000 individuals from British Columbia. However, I

think it's fair to say that the focus of his questioning is in relation

to the Alberta aspect of the problem. The Alberta government is also paying

100 percent of the Milvain committee costs — that's the committee representing

contract holders in Alberta. We have, of course, a similar group in B.C., which

is self-funded, which is not receiving any type of assistance from the province

of British Columbia.

It's

interesting to note again.... I'm not saying that government ought to

be providing assistance for the sake of providing assistance, but I

think it speaks volumes about the extent to which the Alberta

government has some sympathy for the investors that it is prepared to

fund 100 percent the Code inquiry, 100 percent the special counsel and

100 percent the costs of the Mulvain committee, the committee of

investors, so that the investors can get out and talk in communities

across the province of Alberta — explain to them what's happening with

the hearings to indicate to them where people stand in terms of

recovering their funds. That communications device is very important to

those seniors and to those investors who have lost money, because they

feel as if they're left in the dark.

The Alberta government

has also paid 44 percent of the Coopers and Lybrand fees. They are the

people responsible now for looking after and managing the assets of

both FIC and AIC. These are the companies that triggered the collapse

of the Principal group of companies, and Coopers and Lybrand are acting

in the interests of the investors. The Alberta government is prepared

to pay 44 percent of those costs. B.C. has refused to pay, as I

understand it, any portion of those costs,. and I stand to be corrected

if the minister wishes to correct me on that point. What will happen,

and the way it works, of course, is that B. C. residents will not

benefit from the Alberta contribution, because that 44 percent

contribution goes back to the Alberta investors. A cheque is written by

the Alberta government to those investors to offset the fees of Coopers

and Lybrand, and that's how they arrived at the 44 percent figure. So

the British Columbia investors will have deducted from any money they

see at the end of the day the accounting fees to Coopers and Lybrand.

But Alberta has agreed to put in 44 percent of the costs of Coopers and

Lybrand.

As I say, there is a level of sympathy and

tangible assistance to the investors in Alberta,

whereas in British

Columbia there certainly is no tangible benefit flowing from the

actions which government has committed itself to. Secondly, there is no

assistance to the investors to pursue their matter through the Code

inquiry, through special counsel, through the committee and through

other processes that are involved, save for the nominal assistance the

government has said it's prepared to give in terms of legal matters

and, of course, the costs of the Robinson report.

[3:45]

first question to the minister: is he now prepared to pay some of these

costs. and in particular, is he prepared to pay the costs that relate

to Coopers and Lybrand fees so as to provide some level of assistance

and comfort to those who are affected?

HON. MR. COUVELIER:

This is an issue and a matter that I think has to concern all British

Columbians in a way that tugs at the heart-strings. I suspect that I

have received

[ Page 4104 ]

more

human-interest stories than the hon. member opposite from individuals

and British Columbian citizens who unfortunately found themselves

caught in the decline in the prosperity of western Canadian financial

institutions over the last few years. I suppose that's natural; that's

my responsibility. I of all people have no difficulty whatsoever in

agreeing with the hon. member's comments about the difficult human

problem — in a humane sense — that all of us are faced with when we

hear of these sad matters.

I'd like to remind the hon.

member that the individuals so affected are not only those who had a

relationship with Principal Trust, but those who've had relationships

with many other western Canadian financial institutions. As government,

we are denied the opportunity that members of the opposition have to

deal only with a narrow issue. When government looks at this matter —

that is to say: what is government's responsibility to deal with

people's investments that have gone sour? — we must be cognizant at all

times of the generic problem and consider the consequences of

addressing a solution at only one narrow sector who have been abused by

the process. The opposition, of course, have the luxury of being able

to use a rifle, and that is always difficult to deal with, in a

public-relations sense, for the government of the day.

think it's important that this government goes on record as confirming

that we are no less concerned about the humane issues here than the

members of the opposition are. Our responsibilities in dealing with

those, however, are somewhat different. We happen to be in government,

and therefore we have to find the remedies that can be acceptable not

only to all of those affected by their unfortunate financial

circumstances but also — our larger responsibility — to all citizens in

this province, who have an interest in making sure that we spend our

money prudently and responsibly.

The hon. member had some

comments to make about the Lyman Robinson commission which surprised

me. I didn't come to the House today with clippings, but I'm sure the

hon. member has not forgotten that this government was the first to

move on this matter. This government received international applause

for being the first to move on this matter. This government took

decisive action at the time it was most critically needed to get the

profile of the issue elevated in western Canada. May I remind the hon.

member that this government funded that cost entirely, 100 percent,

ourselves.

This government, by virtue of the Lyman Robinson

inquiry, was able to acquire enough evidence for us, on behalf of all

the investment contract holders, to lay charges against Principal

Trust, Principal Group, Principal Consultants and the owner Don Cormie

himself, and the hon. member knows full well we took that action in the

interests of protecting the investment contract holders of this

province. So we have nothing whatsoever to be ashamed of as a

government in terms of the actions taken on this matter. We provided

leadership on the issue.

The hon. member said that the

Principal investors are seeking leadership on this issue and not

getting it, if I understand him properly. I'd like to point out to the

hon. member that in my judgment it's not leadership they are seeking so

much as restitution, and that's an entirely different issue.

The

hon. member made reference to the Alberta government being sympathetic

to the plight of the investors in the Principal Group companies, and

seemed to imply that this government was less sympathetic. We are, I

can assure you, sensitive to the difficult situation these people find

themselves in. I must point out to the hon. member that by virtue of

the Alberta government having its own unique legislation and by virtue

of the Alberta government being the head office of many of these

companies and having unique ability to access records as they relate to

intercorporate matters and transfers between this group of companies,

their degree of sympathy, to some extent at least, is motivated by

their assessment of their degree of responsibility for the litany of

events as they unfolded.

This government is monitoring the

Code inquiry closely. Like most observers, we are learning more almost

every day. I would remind the hon. member that much of the information

that is coming out of the Code inquiry can only be obtained by an

Alberta court or inquiry. It is useful for all affected parties to

allow the Code inquiry to unfold so that full and complete knowledge is

available to all who may then wish to move to a second stage of legal

activity.

For the record, Mr. Chairman, this government was

first, was most responsible and was applauded nationally for its

leadership in dealing with this difficult matter. This government

funded 100 percent of the Lyman Robinson inquiry which provided the

documentation necessary for any citizen who wishes or feels comfortable

launching a fraud suit to institute that suit, as we have accumulated

the data for them to do so. In addition, to make sure that the issue

didn't die there, we ourselves launched a suit in the interests of all

investors against all of those companies.

I am at a loss to

understand, given the state of affairs as they are unfolding, what more

this government could possibly do in the interest of protecting not

only the investment contract holders in those companies but also the

interests of all British Columbians.

MR. SIHOTA: Let

me tell the minister what he should be doing, because he's asking what

he can do. The minister is saying that he has all sorts of compassion

and understanding as to the human element as it relates to these

problems. I think that's where he started in his comments. We're saying

on this side of the House: if you have that compassion and that

sympathy, if you suggest that you've got that understanding, then back

it up financially and make some commitments to these people. Make the

commitment today to pay the costs of the Coopers and Lybrand fees as

one small gesture of your government's commitment. That's the first

thing that you can do. Make a note of it, or I'll come back to it later

on and ask you that question, because I want to go through all the

comments you made first.

If you have that sympathy, then

provide the assistance that is required in terms of the Coopers and

Lybrand fees. The Alberta government is doing it to the tune of 44

percent. The B.C. investors, who are relatively impecunious as a

consequence of that collapse — and we'll get to the causes of that

collapse later — are in the least position to pay those fees.

The

minister said in his comments: "You've got to look at the generic

issue. You've got to talk about what the government's responsibility is

in all of these matters and that the government has to provide

remedies." I want to say to the minister, in a generic sense and in the

sense of Principal Trust, that your requirement, when these types of

things go sour, is to assure those who relied on government regulators

that the regulators did their job properly.

You're quite correct when you say that the Code inquiry is only looking at Alberta matters. It is set up under the

[ Page 4105 ]

auspices

of the Alberta courts, so it can't reach out to what is happening in

British Columbia and in Saskatchewan. If you want to say in this House

that your government should be applauded — and let's not forget I also

applauded the government for the establishment of the Robinson inquiry;

we didn't hesitate to say "well done" in that regard.... If you want

real applause now, and if you are still committed to the type of

leadership that you are talking about, then my suggestion to you, in

keeping with that generic comment, is to extend the terms of reference

of Mr. Robinson's inquiry to allow him to do what you did not allow him

to do in the original terms of reference. In other words, allow Mr.

Robinson to take a look at the inactions of government regulators.

Allow Mr. Robinson to do precisely what Mr. Code is doing in a public

way. Extend those terms of reference if you want real applause and to

show real leadership. I didn't raise the matter of restitution; I

raised the matter of leadership. You raised the matter of applause, and

I'm saying if you want it.... It's easy to say that you're taking

leadership, but if you want to demonstrate it in some tangible way,

then get Mr. Robinson back doing what you prevented him from doing in

the first place, which is to take a look at the actions of government

regulators in this regard in an open and public way.

The

minister made two other comments. He said Alberta has unique

legislation, and the head offices and the records are there. Look, the

Alberta legislation parallels our Investment Contract Act — that's the

first point — so it's not so unique. Secondly, those records can be

gotten. Records had to be presented by Principal in British Columbia in

order to get their licences and to meet all the other regulatory steps

that were required under the Investment Contract Act. Those powers are

well within your reach, so don't try to faze and buffalo us all by

false jurisdictional arguments.

[4:00]

Finally, the minister says: "Well, we launched a suit." Again I say,

wonderful. What's the benefit of that suit to investors? Nothing,

because all you'll secure at the end of the day is a dry judgment.

There's no money there that you're going to secure by way of that suit.

That doesn't get you anywhere.

To go back to what the

minister said, let me put the questions to him one by one. First of

all, Mr. Minister, it's very easy to say that you've got that human

interest at heart and that you feel the same way that we do on this

side of the House. But you're right when you say that you've got the

ability to exercise some remedies. My first question that flows from

the minister's comments is: will the minister demonstrate his

understanding, sympathy and compassion by agreeing to fund the matter

of Coopers and Lybrand's fees?

HON. MR. COUVELIER:

The member, as usual, rambled all over the place. I'll attempt to

address the many issues that he incorporated in his ten- or 15-minute

monologue.

The question of the Lyman Robinson inquiry being

expanded strikes me as being a typical indication of the NDP

opposition's inclination to drag an issue out, despite the hardship

that this dragging out would bring on those affected.

These

people who got involved and lost their money with these investment

contracts can't afford to wait for any further studies, hon. member.

It's time to resolve these issues. There's no good in creating an RCMP

investigation. There's no good in expanding the Lyman Robinson inquiry.

What for? You've got the Code inquiry unfolding more information than

Lyman Robinson could ever legally obtain. You know that full well. It's

not the absence of information that we need; it's action. The action

can only be obtained by taking the issue to the courts, as I have said

repeatedly.

For the hon. member to be sanctimoniously

protesting and claiming to be representing the interests of those

unfortunate citizens trapped in this situation, I find difficult to

accept. To suggest that we would have more studies — a typical

socialist attitude. My goodness. We can study these issues to death.

You've got more committees running around this country looking at this

matter, and we've consumed almost a year and a half with nothing of

consequence flowing through to benefit those citizens who have been

impacted by this, and what does the hon. member do? He calls for

another study. My goodness, that's ridiculous. It's the kind of

uninformed comment we get from people who have never been accustomed to

having to deal with an issue and solve it.

The matter can

be solved quite simply by taking this issue to the courts. As I've said

repeatedly, it is absolutely not in the scheme of things that the

government of British Columbia is going to be prepared to make

restitution to people who have made investments. If anyone thinks that

we should be doing that, then they should take that matter to the

courts, and we will be happy to honour any verdict that comes down.

Furthermore,

I've said repeatedly that we will do everything we can to expedite

resolution of the matter by that device. I understand full well that as

these weeks and months and years go by, these people are placed in

greater jeopardy. We can pontificate and make speeches across the floor

at each other, but it doesn't affect us. Those people out there need

some help. The sooner we can get the issue in front of the courts, the

better it will be for them, and we have said that we will do everything

we can to make sure that happens. To suggest that we're going to do

this little thing and that little thing, and we're going to create

another study, as if it's going to help those poor, unfortunate people,

is ridiculous. As I've said, the issue is beyond the ability of any

elected government to deal with, and it will require addressing in the

courts.

The government obviously does not agree that our regulators have done the job improperly.

May

I also remind the hon. member, Mr. Chairman, that the ombudsman is

studying this matter now and that we are giving absolute, total

cooperation to the ombudsman in the conduct of his study. As a matter

of fact, I've just received compliments from the ombudsman's office

about the degree of cooperation we're giving him. We've got the

Securities Commission providing him with details; we've got the

corporate relations division providing him with details. He has the

issue before him. Surely, to suggest that we should create vet another

investigation or another inquiry.... What for? They all know that the

issue will have to go to the courts sooner or later. The sooner it gets

there the better, not only for those people who are, as I say,

unfortunately caught in this web, but also for all British Columbians

and for us as a government, so we can have clarified in people's minds

exactly what our obligations are.

The hon. member asked

about this question of our making a contribution to Coopers and

Lybrand's expenses, as the Alberta government has done. I can only

repeat what I said earlier: the degree of responsibility of the Alberta

government is entirely different from the degree of responsibility of

the British Columbia government. It is the view of

[ Page 4106 ]

this

government that the Alberta government, if found in some way to be in a

position of having to make some sort of accommodation to these

people.... It should not be restricted to the citizens of Alberta

exclusively but should be extended to all investors who were affected,

because, let me remind the hon. member, these were primarily Alberta

registered companies, and therefore that government had the greater

responsibility.

MR. SIHOTA: Oh, come on! You know better than that.

HON. MR. COUVELIER:

Well, with respect, I didn't pass the bar examination, so I don't

profess to be the ultimate authority, as does my egotistic friend

across the floor. But let me just tell the House that all Canadian

provinces have enacted a simple licensing procedure which enables

extraprovincial companies to act within their boundaries. This

licensing of extraprovincial companies does not absolve the

incorporating jurisdiction of its primary responsibility over the

creation of a company and the definition of its business powers.

Presumably the hon. member passed his exam, and he would have been able

to understand that. We can wave our arms and flannel-mouth all we like.

The fact of the matter is that we've got many British Columbians who

are looking for some action. I say again: the action will flow from a

court decision, and the sooner we get the issue before the courts, the

better for all concerned.

MR. SIHOTA: This minister

can stand here and bellow as long as he wants to and speak as loudly as

he wants to, but the inactions of his government won't go away. What's

come from the minister in the last few minutes is absolute garbage, in

terms of what this government has or has not done.

I'll

tell you why we ought to have a study — and it's not just another

study. There ought to be an inquiry into the actions or the inactions

of your government on this matter. If you want to know some specifics,

we'll get to them in a minute, in terms of the kinds of questions that

should be put to your regulators, who screwed up this whole situation

to the detriment of 18,000 investors in this province. You want some

specifics? I'll give you some specifics in a minute, in terms of what

your regulators have to be hauled out on the carpet for to answer.

You,

Mr. Minister, when you drafted those regulations as they apply to Mr.

Robinson, limited those regulations so as not to allow Mr. Robinson to

take a look at the actions or inactions of government. If you say, Mr.

Minister, what you have the gall to say in this House — that those

regulators did nothing wrong — then it would seem to me that you have

nothing to hide; that you'd be more than willing to allow Mr. Robinson

to conduct an inquiry into the actions of those regulators. It's only

if you've got something to hide that you're prepared to limit those

terms of reference.

I'll tell the minister something. We

need Mr. Robinson to look at that issue, because we need to know what

the government did and why the government did not do what it was

supposed to do under the provisions of the Investment Contract Act.

That's why we need that inquiry.

It's not another study.

I'm sick and tired of this government.... Mr. Chairman, I'm going to

wander for exactly one minute here. I remember that the government

said, when it came to prisons: "Well, we don't want to spend a long

time looking at the escapes from Oakalla. We don't want to agree with

what the NDP says, when they want a full inquiry into the matter of

corrections in this province." Accordingly, the government said: "We

just want a quickie — a quick two-week investigation." It's taken you

six months. You said the same thing on the Coquihalla — "We just want

something quick" — and it took them six months, because there are a lot

of issues here to investigate.

I would venture to say that

if Mr. Robinson were given the same liberties that the Coquihalla

inquiry was, he'd come to similar conclusions with respect to the

actions or the inactions of government. But I'll get to that.

The

minister stands up and wails away. He has the gall to stand up in this

House and say to us: "Well, look, what these people want is some

action." I agree that there ought to be some action. That's what we're

saying to you: give these people some financial assistance in deferring

those accounting costs.

More importantly, Mr. Minister, if

you want to assist these people in court, if you think that is the

appropriate form of action, will you agree to fund all actions in court

by Principal Trust investors, including those against both the company

— which you've agreed to do — and the government? Are you prepared to

make that action a reality? Are you prepared to fund that action,

instead of asking these investors to go and look for legal assistance

and provide their own funding? If you want to provide court action, if

you think that's the way to go, then will you agree to provide

financial assistance to these people, in the case of an action against

both Principal and government regulators? That's the question, Mr.

Minister. So let's for a change hear once from you a commitment to

these people in some financial sense, instead of all that garbage we

heard a few minutes ago and all that junk about compassion and

understanding. Let's put it in action; let's see some remedies.

MR. CHAIRMAN:

Before we proceed, I would like to ask the members to direct their

remarks to the Chair and to keep the language parliamentary.

HON. MR. COUVELIER:

I am very pleased to continue to address the Chair as I have done all

afternoon. It's only those emotional participants in this discussion

who seem unable to control themselves.

The issue here is,

quite simply: is there a responsibility of government to make

restitution for those investors who have lost money as a consequence of

a failed investment? The hon. member has said yet again, for another 15

minutes, that we should be creating, expanding and reopening another

Lyman Robinson inquiry to look into the role of the regulators in this

affair. The hon. member went further. He even accused this government

of deliberately denying Mr. Robinson the opportunity to look at the

question of the responsibility of regulators.

The hon.

member, on the other hand, admits that this government moved with

alacrity and was first out of the gate in dealing with this issue. May

I just remind the hon. member that at that time the issue of

culpability of regulators was far from anybody's mind. The issue was

purely and simply to stop any bleeding of assets by the people who were

managing those assets and making those investments on behalf of the

people who made investments.

The hon. member would now have

us resurrect the Lyman Robinson committee to look into the regulators.

I say it again: that's merely another indication of this socialistic

jingoism, which would create two bodies to look into the role

[ Page 4107 ]

of regulators. As I said earlier, we already have the ombudsman doing exactly the same thing.

MR. BLENCOE: Get serious.

HON. MR. COUVELIER:

I understand that the hon. member seemed to take exception to my

remarks. Let me read for the record the news release issued by the

ombudsman on the question, and if the hon. members will take the wax

out of their ears and climb down off the walls, maybe they might learn

something.

The B.C. ombudsman, Mr. Owen, announced today

that he is commencing an investigation into the role of the B.C.

superintendent of brokers office in the regulation of the Principal

group of companies. The hon. member opposite would have us make yet a

further public investment in a second inquiry to examine exactly the

same subject. If ever there were needed an illustration of a wasted

public expenditure, and more possibly a confusing consequence, that

would be it. What would the hon. members do if they were faced with two

different reports on the same subject with two different conclusions?

What would the hon. members do in any event, no matter what those

reports say, if the issue still is not resolved?

I tell the

House again: this government is anxious to see the matter addressed by

the courts. This government will abide by the court's ruling in the

matter, and irrespective of how many investigations are conducted in

the interim, the issue will eventually have to go there.

[4:15]

will matter not a whit to this government what the ombudsman may

finally decide in terms of influencing our ability or willingness to

make restitution. It will be a useful public service and we're happy to

participate, because our view is that we are not responsible. In any

event, the degree of responsibility and the amount of restitution that

may be required in the unlikely event we were found responsible will

have to be settled by a court of law. Notwithstanding all the brave

words of the member opposite, the fact of the matter is that that's

where it will have to go. To delay and obfuscate and suggest that we

should create other bodies to investigate.... My goodness, nothing

could work more against the interests of those poor citizens who have

made these investments than to have further investigations and delay.

we are very pleased to repeat again that we will be expediting, to the

maximum of our ability, the addressing of this matter in the

appropriate place, which is a court of law.

MR. SIHOTA: Let's deal first with the matter of the inquiry. Then I want to deal with the matter of the courts.

First,

the minister has obviously forgotten that in Alberta we have the Code

inquiry going on as well as an ombudsman's inquiry. So there's nothing

wrong with that happening. Secondly, I want to point out to the

minister that the position I'm taking, which he calls a socialist

position, isn't that at all. That position is the position advocated by

the investors' association — by those people who speak out in favour of

the investors who have been affected by the collapse of Principal

Trust. I'm sure the minister has met with Mr. Charbonneau and knows

full well that that is his position and also that group's position —

and they represent those 18,000 investors. So they're calling for it.

I'm

not taking an ideological position; I'm asking the government to do the

commonsense thing, which is to react positively to the demands made by

the groups affected. The minister talks about delay. I'm sure they

would be glad to wait for the outcome of any inquiry, because it's

that.... You know, the minister was correct originally; the idea was to

stop Mr. Cormie, etc., from running the company. But after that,

questions were asked about the role of government. Mr. Robinson's

report dealt with the actions of Principal Trust, not with the actions

of government. But salient questions were being asked as a consequence,

and it's those questions which now ought to be investigated. But don't

describe it as some type of socialist plot.

I'm only

telling you what the investors want, and you're telling me that you're

not prepared to accede to any of the investors' requests. You're not

prepared to assist them in the deferment of accounting fees. In the

course of your comments, Mr. Minister, you told me and the House that

these people want court action and that the government is prepared to

assist. I want to ask you again because you haven't answered this

question: will the minister tell us now, one way or the other — yes or

no; it’s not a skill-testing question, Mr. Minister — whether you will

agree to pay the court costs of these groups so that they can bring

forward actions against both Principal and government?

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

MR. SIHOTA:

So there we have it. The minister stands up in the comfort of this room

and listens to what I've got to say, and says: "Well, you know, I have

all sorts of compassion; I have all sorts of understanding; I have all

sorts of sympathy; I have all these fuzzy feelings about these

investors." Then he says: "Because I am the Minister of Finance, I've

got the ability to provide the remedies." When we ask him to provide

remedies and assistance, he's not prepared to do anything. So because

he hasn't answered this question, I'll ask the minister again on a

yes-or-no basis — again, no skill-testing question: will he do what the

Alberta government has done in terms of assistance to these people to

defray those Coopers and Lybrand fees? What type of financial

assistance, to back up all those sanctimonious words from the minister,

is he prepared to give to Principal investors?

HON. MR. COUVELIER:

It would be inappropriate, I think, for me to deal with that question

now. After all, there are further inquiries unfolding. So I don't wish

to deal with the question now. And I will refuse to answer that

question on the basis that it's future government policy, and therefore

the question itself is out of order.

MR. SIHOTA:

This minister talked about leadership. This minister talked about

applause. This minister talked about action. And now he's not prepared

to do one thing, not prepared to invest one dime, not willing to

provide any type of assistance, not willing to do anything to provide

any comfort or sympathy. Hollow, shallow words, Mr. Chairman — that's

what emanates from the Minister of Finance: hollow words of no

substance, of no assistance and of no comfort to the individuals

involved. It's obvious why the people affected are losing faith in this

government.

In stark contrast we have the Alberta

government providing all sorts of assistance to these people to see

them through these very difficult times, to help them in getting

through to the courts, getting through the inquiry and getting through

on the matter of the accounting fees. If only this province would

demonstrate the same level of sympathy.

[ Page 4108 ]

I was

speaking of hollow words. I want to say to the minister.... I have my

file here; I have the ombudsman's report. I trust you have Mr.

Charbonneau's press release. On February 9, 1988, your government was

sent a letter by Mr. Charbonneau, president of the Principal Investors'

Protection Association of British Columbia — the group, by the way, Mr.

Minister, who want the terms of reference of the inquiry extended; if

you want to call them socialists, I guess that's your prerogative, but

you're off the wall. The letter, addressed to the Premier — and I know

a copy was subsequently forwarded to the minister — says:

"Your

government was in power February, March and April of 1987. During that

period, the superintendent of brokers approved the licence renewals of

First Investors Corp. Ltd. and Associated Investors of Canada Ltd. The

renewal application of FIC was received on February 26 and it was

approved March 18; the dates for AIC were April 6 and April 7

respectively.

"At the time of the applications, financial statements available

to the superintendent showed combined losses for FIG-AIC of about $23 million

in 1985 and a further $28 million in 1986. According to the books of the companies,

their combined operating deficit on December 31, 1986, was...$48 million.

"Section

9(

a) of the Investment Contract Act states that the superintendent

shall grant renewal if the applicant is suitable for registration.

However,

section 5(

l) states that: 'No corporation shall be registered

as an issuer unless...(

b) at least $100,000 of its authorized capital

stock has been subscribed and paid in, in cash, and the aggregate of

its unimpaired paid in capital and its surplus is at least $200,000.'

"These

companies were in clear violation of the laws of the province of

British Columbia, yet a senior civil servant granted almost immediate

renewals of licences, apparently with no regard for the financial

security of thousands of citizens. In fact, it appears to us that our

own watchdog facilitated the out-and-out theft of millions of

hard-earned savings.

"As spokesman for the 18,000 British Columbians affected

by this regulatory debacle, I would like to receive a direct answer from you

to this simple question: do you, Mr. Premier, believe that regulators have a

duty to the public to enforce regulations established by the Legislature of

British Columbia and intend to protect the public?

Yours truly,

A.L. Charbonneau"

We'll

get back into the specifics of that letter in a moment. This letter was

written to the minister on February 9, 1988. Can the minister tell this

House why he has chosen not to respond to this letter?

HON. MR. COUVELIER: As I understand the question, Mr. Chairman, the letter was addressed to the Premier.

MR. SIHOTA:

It was sent to you, Mr. Minister, from the Premier's office shortly

thereafter. If you want the exact date, I'll go down and pull it. But

it was shortly after the February 9 letter.

HON. MR. COUVELIER:

Yes, I would appreciate that piece of privileged confidential

information, and I'm sure the Premier's office would be delighted to

receive it, Mr. Chairman.

MR. SIHOTA:

I'll say this on the record so that my research staff will hear me and

send me up the reply from the Premier, which indicated that the letter

had gone to the Minister of Finance. I'm sure it will be up here in a

matter of minutes.

Is the minister prepared to accept my

word that this letter was relayed over to the Minister of Finance, so

we can continue this discussion? I can assure the minister I have a

letter which demonstrates it was sent over to the Minister of Finance

for comment. Is the minister prepared to accept my word on that so I

can proceed with questioning on this matter.?

HON. MR. COUVELIER:

It may well be that the hon. member has the copy of the letter that was

supposed to come to me. I've asked my staff members if they have seen

such a letter, and they said no. I'm led to the conclusion that not

only are there leaks from a variety of different sources, but now we've

got the mail going right to the NDP when it should have come to me. I'd

like to know what on earth the hon. member is doing with my letter, Mr.

Chairman.

MR. SIHOTA: I've said this before, but

more huff and puff from the Minister of Fluff. Anyway, here's the

letter, Mr. Chairman. I now have it, so the minister will have to

accept my word.

It's not as if there are leaks from your

department, Mr. Minister, although we can talk about the Toigo affair,

if you wish, and the role of your officials on December 2. Perhaps we

will later on.

On March 3, Mr. Chairman — and I'll table this, if the minister wants it tabled — the Premier wrote as follows:

"Thank

you for your recent communication regarding the failure of Principal

group of companies. I appreciate you taking the time to write me about

this matter.

"As you raised a number of

specific questions which I feel would be best answered by the minister

responsible for this area, I am referring this matter to the Hon. Mel

Couvelier, Minister of Finance and Corporate Relations, for his direct

reply.

"I am certain you will hear from the

minister in the near future. Thank you again for advising me of your

concerns, with best wishes for the days ahead. Sincerely yours,

Premier."

A copy to was sent to the Hon. Mel Couvelier.

Now that we've established to the satisfaction, I'm sure.... Do you want me to table the letter, Mr. Minister?

[4:30]

HON. MR. COUVELIER: Yes, I'd appreciate seeing it.

MR. SIHOTA: Here's the letter, Mr. Chairman. I'll table the letter to the minister.

MR. CHAIRMAN:

You must request, hon. member, that on reporting, permission be granted

to table the letter. You cannot table it directly in committee.

MR. SIHOTA: Mr. Chairman, on reporting, may this letter be tabled.

MR. CHAIRMAN: When we report, you may then request to table.

[ Page 4109 ]

MR. SIHOTA: In the interim, may I pass it to the minister.

MR. CHAIRMAN: Send it right over with the Page, hon. member. Please continue.

MR. SIHOTA: Okay.

enjoy dealing with this minister. If he can avoid, duck or pontificate,

he will. He has to have all the proof in his hands. There you see, Mr.

Minister, the letter in your hand that says the letter was sent to you.

It is dated February 9. In fact, Mr. Minister, let me tell you this....

MR. CHAIRMAN: Through the Chair, please.

MR. SIHOTA: Through you, does the minister want the letter of February 9 as well?

HON. MR. COUVELIER: I understand the rules are that two of us can't stand at the same time.

Interjection.

HON. MR. COUVELIER: I'm astounded that a member of the legal profession should be so ignorant of the proprieties of this House.

I understood the introduction of this subject, the hon. member talked

about a transmittal letter coming from the Premier's office to my

office. What he has provided here is a carbon copy of a letter

addressed to a third party. I can understand that. What got my

curiosity piqued was the reference to a transmittal letter. If I've

misunderstood the hon. member, I'd be pleased to be corrected.

MR. SIHOTA:

I don't know what the minister did or didn't understand. Let me just go

over it again in simple terms for the Minister of Finance. On February

9, 1988, Mr. Charbonneau wrote a letter to the Premier of this

province. I have already read for the record what that letter says. I

have but one copy in my possession; I will refer to it later. However,

if you would like a copy of it, I shall transmit it over to you now.

The

Minister of Finance, I thought, then said he didn't recollect this

letter. Because it was addressed to the Premier, he went to some length

to say that he probably didn't receive it. I then told the Minister of

Finance that the letter had been sent to him, because the Premier in a

subsequent letter had indicated so. That letter is the one I tabled,

dated March 3, 1988.

Interjection.

MR. SIHOTA:

No, Mr. Minister. None of these letters were sent to me; they were sent

to you or to the Premier. Is that clear? I have the letter, so I'll

send over the letter of February 9 as well, with permission to table it

upon...whatever it is that we do.

I would ask the minister

to take just a brief moment to read the letter of February 9, 1988 —

not the one to Mr. Riis, but the one on the other side, to the Premier.

Is the minister following me? Will he read the letter, and will he tell

this House whether he recollects receiving that letter, so that I can

get on with my line of questioning on this matter without any further

cheap shots from him as to my profession?

HON. MR. COUVELIER:

In answer to the question, I do not recollect receiving this letter,

but that's not to say that I didn't receive it; we will make inquiries.

But as I understand it, when the hon. member first introduced the

subject, he was implying that I had not responded to it. I have a

practice of responding to every letter I receive. I'm not aware of any

letter sent to me that has not been answered. If this letter dated

March 3, of the Premier's, copied to me, has not been answered by me,

then I either did not get the letter or it's been misplaced or misfiled

somewhere, because I am very strict about this question of responding

to correspondence.

MR. SIHOTA: It's like a courtroom

in here in the sense that the minister's trying to bring out every

technicality in the book. I want to ask questions in relation to that

letter, and if he and his officials aren't prepared now, we'll get back

to it later.

The point here is.... Before I get to the

point, let me first deal with the minister's comment. Mr. Minister, you

may have replied; I can't say with certainty that you haven't replied.

You may have replied in the traditional sense — to help you out here,

Mr. Minister — to Mr. Charbonneau and said: "Thank you for your letter.

I'll be looking at it." You may have done that, but you haven't done

any more than that. You haven't answered the question in the letter, I

can tell you that. If you want to doubt me on that. I'll get affidavits

to prove it. Let me also say — I will say this in the House and outside

the House, Mr. Minister — that it's my understanding that you have been

asked about the letter by representatives of the investors, and in

particular by Mr. Charbonneau. You've had verbal discussions with him,

so I find it difficult to believe that you're not aware of the letter,

and I'll repeat that both inside and outside the House.

[Mr. Pelton in the chair.]

Now

let's get to the meat of the matter, finally, Mr. Minister. The meat of

the matter is this: you're talking about action; you're talking about

these people not wanting delays; you're talking about responding.

Interjection.

MR. SIHOTA:

Why, Mr. Minister, has it taken you so long? Why to date have you not

replied in any substantive form, if at all, to this letter? If you're

not prepared to respond to the points in this letter by way of letter,

will you do it on the record here today?

MR. CHAIRMAN:

Just before I recognize the Minister of Finance and before we proceed,

hon. members, I would like to talk to you for a moment about the

necessity of addressing questions through the Chair. The Chair is here

so the debate on any given subject will proceed in an orderly manner.

In order to achieve that, questions and statements must be addressed

through the Chair, not directly across the floor. Over the past five

minutes or so, I think the hon. member for Esquimalt-Port Renfrew has

been asked on at least two occasions if he would kindly address his

remarks through the Chair. So if we can accomplish that and if that can

be the way we proceed, this debate will proceed in a much smoother way,

and we will accomplish what we are setting out to do.

Now I will recognize the Minister of Finance.

HON. MR. COUVELIER: I will recognize that it does require humility to live by the rules of the House. If that

[ Page 4110 ]

human characteristic is missing from some, it's easy to understand the variation from the procedure.

answer to the question, I have asked staff to research the issue now to

verify whether I actually did receive the letter, because as I've said,

I do not recollect receiving it. But let me just tell the House and the

hon. member that my mail is voluminous on a variety of subjects.

Indeed, it touches most subjects that each ministry of the government

is involved in. If the actions of that ministry have resulted in a

citizen feeling that addressing the Minister of Finance will somehow

assuage the concerns of the issue.... So I get voluminous mail. As a

matter of fact, I am told that our mail is second only to the volume

received by the Premier; I don't know if that's true or not. In any

event, there is absolutely no way I could retain in my memory bank the

specifics of the thousands of letters I get on a variety of subjects.

Now my staff member has returned. No, we don't have an answer yet, but we will verify whether we received this letter or not.

Interjection.

HON. MR. COUVELIER:

No, I think the issue of whether I received the letter isn't critical.

Obviously the member has a purpose for introducing the issue. I am

quite happy to have him follow up on the contents. Whether I received

the letter or not, he can certainly make his statement and make his

outrageous claims as he has been doing for the last two hours. So go

ahead.

MR. SIHOTA: I would venture to say, Mr. Minister, that you haven't even replied to the letter, despite your comments....

AN HON. MEMBER: Through the Chair.

MR. SIHOTA:

...through you, Mr. Chairman. Because the minister seems to be having

so much difficulty with this letter, we will put the letter aside until

his officials have had a chance to look at it. I want to approach the

problem from a different angle, and maybe the minister will be able to

follow this, because he certainly had some difficulty following the

matter of the letter.

I talked earlier about the

government's lack of financial support for these investors and compared

it to the Alberta government. I want now to move on to another aspect

of this and ask the minister some questions with respect to the actions

of his officials during his tenure as Minister of Finance, to ascertain

what checks and balances were in place from within his ministry which

would have allowed action to be taken at an earlier date so as to

protect the interests of investors. I am going to suggest to the

minister that his regulators were not as conscientious as the minister

would have us believe, in terms of monitoring the affairs of Principal

Trust. I want to deal with some very specific questions in this regard.

I want to ask the minister about the granting of the licence to Principal Trust

on April 1, 1987. Can he tell this House whether or not the financial statements

submitted in support of the application for licence by Principal and its group

of companies complied with the provisions of the Investment Contract Act? The

reason I want to ask that question of the minister is that I think he would

agree with me that his regulators had a responsibility to ensure and to assure

themselves that the provisions of the Investment Contract Act were being met.

If those provisions were being met, a licence ought to have been issued; if

those provisions were not being met, then, of course, no licence should have

been issued. Can the minister assure this House, in full confidence, that all

of the provisions of the Investment Contract Act were complied with prior to

the issuance of the licence