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)

FRIDAY, APRIL 15, 1988

Morning Sitting

[ Page

3885 ]

CONTENTS

Routine Proceedings

Private Members' Statements

Erosion of public confidence in the government of B.C. Mr. Blencoe –– 3885

Ms. Campbell

Mr. Rose

Employee stock ownership plans. Mr. Loenen –– 3886

Mr. Clark

Sale of BCEC land. Mr. Williams –– 3888

Hon. Mrs. McCarthy

International financial business in Vancouver. Mr. Mercier –– 3890

Mr. Stupich

Mr. Sihota

Committee of Supply: Ministry of Attorney-General estimates. (Hon. B.R. Smith)

On vote 14: minister's office –– 3892

Mr. Sihota

Mrs. Boone

Ms. Edwards

The House met at 10:06 a.m.

Prayers.

HON. MR. STRACHAN :

On behalf of all Members of the Legislative Assembly, I'd like to

extend greetings: welcome to British Columbia and our best wishes to

students from the Cashmere Middle School, visiting us from Cashmere,

Washington. With them today are Mrs. DeRubertis and Mrs. Miller. These

students are with the Corps of Discovery; they're the seventh and

eighth grades of an academic enrichment program. Welcome to British

Columbia.

MRS. BOONE : I'd like the House to join me in welcoming two women from Saturna Island with us today: Betty Spiers and Doris Ackerman.

Private Members' Statements

EROSION OF PUBLIC CONFIDENCE

IN THE GOVERNMENT OF B.C.

MR. BLENCOE :

Mr. Speaker, this morning I want to address a very critical issue today

in British Columbia: the crisis in confidence of the people of British

Columbia in this government to manage in the interests of the people,

to manage with integrity and honesty, to maintain public trust and to

do the public's business in an open and democratic way.

the last six months we have seen all sorts of evidence that this

government has lost the confidence of the people. We have gone from one

scandal to another. In the last few weeks we have seen the activities

of the Premier trying to make deals for friends. We have seen the

exposed land situation with BCEC lands, the prices and the land flips.

I believe we've seen clearly that this government cannot distinguish

between private and public business, and that is a critical factor if a

government is to maintain the confidence of the people of the province

of British Columbia.

Just a few days ago in my riding, for

instance, a radio poll was taken. The question was: "Has your

confidence in the government of the province of British Columbia

declined or increased?" In the calls, 60 people out of 82 said their

confidence in the government had dropped dramatically. Seventy-three

percent showed that they no longer have confidence in this government

running this province in an honest and open way. That is dangerously

close to a total loss of faith in this government's honesty by the

people.

People feel cheated. You are hearing statement

after statement of people feeling they are being cheated. They feel

that this government is not working in their interests, but for the

interests of private entrepreneurs. It is quite clear, for instance,

when it comes to dealing with the people's assets, that when this

government buys they spend too much and when they sell they sell for

far too little. When we're dealing with the assets of the people, you

have an opportunity and a responsibility to maximize the return for the

people. When we see the inside trading and the discussions that have

gone on with the Premier and Mr. Toigo and other situations, we have to

wonder what is happening in British Columbia.

In my own community, for example, I have consistently asked for an open process

on the Songhees land development. I have written to the Premier. I put it to

him last year: "Who is bidding? How much have all the bidders offered?

How much is being asked for the land by the Crown? Upon what land appraisals

are decisions being made? How are the successful bidders being chosen and what

are the criteria used? Were all the bidders given the same information? Were

the highest bidders accepted and, if not, how were decisions made in terms of

preference and place?"

For

the Songhees land we still do not have, as we have for other BCEC

lands, a public tendering process. It's all behind closed doors in

terms of dealing with the people's assets. Because we were so concerned

in this community, I had a meeting with the Premier and put this before

him. I had a fairly lengthy meeting with the Premier, and do you know

what? He stated publicly that I made some good points. Yet what has

happened? It's clear the Premier is not to be trusted, and this

government is not to be trusted with the assets of the people of the

province of British Columbia. This government has lost the confidence

of the people of the province.

We may disagree vehemently

with the policies of this government, but the fundamental roots of a

democratic society require that any government must maintain the

fundamental pillars of decency and honesty and integrity in government,

or the very roots of our system are jeopardized. I believe, as our side

of this House believes, that we are in a crisis in confidence in

British Columbia. It is not good that people are feeling cynical, angry

and cheated, and they want this government to clean up its act.

the last few weeks, this province has been scandalized by the deceit,

the Coquihalla situation, the appearance of inside trading, and by the

friends of the government. We are doing the people's business. It is in

our hands; it is in the hands of the government. If you break that

trust, you no longer deserve to be in office.

We are deeply

concerned — as the people of this province are — with the breaking of

public trust and confidence. We hope this government will change its

course or will continue to get the expression from people of this

province of a lack of confidence, a breaking of integrity and a feeling

of being cheated when it comes to their assets and their government and

the things they believe are sacred in a democratic society. We feel

most strongly about that. When I hear people....

[10:15]

MR. SPEAKER : I regret to inform the member the time under the standing orders is up.

MS. CAMPBELL :

I saw the first member for Vancouver East (Mr. Williams) wanting to get

up. Since there is not an absolute rule of response in the House on

private member's statements, I will certainly try to leave him some

time, if he wants to add a comment.

The comments made by

the hon. member are appropriate coming from an opposition member in the

House. I don't think that many of us would disagree about the

importance of public confidence in government, but I think that there

are a number of things that have to be said.

First of all,

the hon. member and his colleagues often make it difficult to

distinguish issues in government in this province by attributing or

characterizing certain things in ways that are inaccurate and highly

politicized — highly partial views. Examples are the unwillingness to

look at positive things that have happened and to recognize increased

public investment in certain areas such as health and education.

[ Page 3886 ]

Interjection.

MS. CAMPBELL :

No, I'm not suggesting, hon. member, that the comments should be

non-partisan. I'm saying that the question of public confidence in

government is a very complex one, and when the hon. members politicize

issues and seek partisan gain by distorting them, they also contribute

to a lack of confidence in the public process. The adversarial nature

of our governments, the structure of government and opposition, is a

two-way street. Just as the people must have confidence, they also have

to have confidence in the opposition, and confidence in the ability of

the opposition to be critics of intelligence and honesty in this House.

So,

for example, when the hon. member talks about the government's approach

to assets, that we buy too dear and sell for too little, I'd like to

ask the hon. member what he's talking about. All the issues that have

been raised in this House on that line, from my perspective, have been

more than adequately answered by members of the government. So the hon.

member does not contribute to the confidence that the people have in

the process of government, and in the important adversarial nature of a

parliamentary system, by the distortions and exaggerations on his side

of the House.

I agree very much with the hon. member that

confidence in the democratic process is important. I had the

opportunity in a speech I made two years ago to comment that political

cynicism is a cancer on democracy, and I think all of us feel that very

strongly, hon. member. But it is important to remember that there is

government, and there is the parliamentary process, and the kinds of

attacks which the hon. member is well known for, the kinds of

performances he puts on in this House, do not contribute to a sense of

the legitimacy of the parliamentary process.

Whether the

government has or has not lost the confidence of the people of British

Columbia is something that will be determined at the next election. I

don't think there's any member of this House who denies the people of

British Columbia the right to make that determination, but the hon.

member has to remember that opposition also has a role to play in that.

Mr.

Speaker, I see that the green light is on, and I know the hon. first

member for Vancouver East wanted to make a comment, so I'll leave him

some time.

MR. ROSE : Mr. Speaker, we can usually

count upon the first member for Vancouver-Point Grey to make a reasoned

and logical contribution to debate. I would hope that she hasn't lost

her partisanship entirely. It's something we're forced into many times,

because it's the sensational that tends to attract the attention, and

the more reasoned and thoughtful approaches seldom become headlines. I

think we're all caught up in this, in terms of recognition. It has been

said that public recognition is the opposition politician's substitute

for accomplishment. I don't know whether that is truly the case, but

our role here is one of watchdog of the public purse, and I think that

should we not pursue that vigorously, then we're not pursuing our role

properly in preserving the democratic process.

Certainly

there is sensationalism and cynicism, and none of us is very pleased

about it. But the fact is, my hon. friend from Victoria quoted a poll

which indicates a decline in public confidence.

MR. SPEAKER : I regret to inform the hon. member his time is up, under the standing orders.

MR. BLENCOE :

I appreciate the remarks of the member from Point Grey, but in a

roundabout way she is trying to lay the blame for the lack of public

confidence on the opposition. Who's in government? Who have been

conducting themselves in the way they have been conducting themselves

in the last few months? Who's been playing the games behind closed

doors? Who's been talking to Mr. Toigo? Who's been doing Coquihalla?

Who's been carrying on overruns? Who's been raising the deficit beyond

our wildest expectations? Not this side of the House, Madam Member.

But

come over — come on over! Because I know you too are troubled by the

shenanigans and the deceit on the other side of the House. I know you

are troubled, Madam Member. All decent British Columbians with

integrity are troubled also, Mr. Speaker. We're tired of the Socred

memories; we're tired of the wild parties of the Minister of Economic

Development (Hon. Mrs. McCarthy). We're tired of the wild spending and

the open-backed truck on Coquihalla. We're tired of this government

that says: "What's a million?"

MR. HARCOURT : What's a billion!

MR. BLENCOE : What's a billion! In 13 years, what's happened to the deficit? It's gone up five times under the Socred administration.

When

I say you spend too much, boy, did you spend too much on Coquihalla.

And you still haven't come clean, hon. member. The people know you

haven't come clean. When you sell land, you don't get an outside

appraisal; you don't get an honest

interpretation of the value; you

deal on the inside. No public tendering. No accountability. You deal

with your friends. "Scratch my back, and we'll scratch your back with

the public dollars." That's what it's all about with this Socred

administration.

The tradition continues. Public business

for private gain. That's what it's been about in the last ten years.

When we hear the results of the people speaking out and their

overwhelming response to a confidence poll, then it's time to clean up.

EMPLOYEE STOCK OWNERSHIP PLANS

MR. LOENEN :

On January 7 last, the Minister of Economic Development issued a White

Paper on a made-in B.C. employee stock ownership plan. Since then, her

office has received 1,100 requests for information and some 30

submissions from organizations and professional bodies. The interest

has been phenomenal and the submissions very constructive.

know of no government initiative that can affect more British

Columbians in a more positive way than the ESOP initiative. In years to

come this will rank with such Social Credit accomplishments as the

homeowner grant. It benefits both employers and employees. Politically,

the ESOP combines the personal initiative and responsibility of

capitalism with the social justice concerns of socialism.

appreciate the significance of this undertaking, we should look at its

benefits. First is improved productivity. Companies listed on the

Toronto Stock Exchange which have a share-ownership plan rate 24

percent higher in productivity and 95 percent higher in profits than

companies that don't.

On the New York Stock Exchange,

publicly traded companies at least 10 percent owned by their employees

outperformed 62 percent to 75 percent of their competitors on various

measures of company performance. The increased

[ Page

3887 ]

productivity results because when workers are given a share of the ownership,

they take greater interest and assume a more responsible attitude.

ESOPs

establish a direct relationship between the worker's effort and his

rewards. The ESOP unleashes the talent, the abilities and the

creativity of the working men and women of this province. If we can

capture that initiative, drive and enthusiasm of the people on the shop

floor in our factories and offices, work can be fun, profitable and

rewarding as a responsible human activity leading to a deep sense of

personal fulfilment. Happy, successful workers lead to successful

businesses.

ESOPs dramatically improve productivity, but

there is far more that can be done. Studies in the U. S.A. have shown

that where there has been employee participation in the day-today

management, as well as employee ownership, the results are even more

dramatic. ESOP companies that instituted participation plans grew at a

rate three to four times faster than those that did not. It is often

the workers who are the real experts. They know the answers. They know

what it takes to be more efficient and productive. Employee owners are

partners, together with management, in the business enterprise. They

should be treated as such.

ESOPs are a powerful tool to

promote democracy in the workplace. That in turn will result in less

confrontation and more cooperation and harmony between employers and

employees.

However impressive these economic and

quality-of-work-life benefits may be, there are in addition social

benefits of far greater significance. In our industrial, technological

society, most wealth is generated by investment, not human labour.

Income from wages and salaries is increasingly insufficient to buy what

people need and want. To correct this imbalance, governments provide

free education, health care, social services, etc. In effect, these

represent programs to redistribute wealth.

Every

technological advance means more income from investment and less from

labour; hence the increasing pressure for governments to grow and grow.

Every government, including our own, makes bold promises about reducing

government, but we do the opposite. Our national government — a

Conservative government in name — has just embarked on a day care

program which in a few years will cost some $20 billion annually. We

say we want less government, but we can't do it. The answer is ESOP.

Through it, the working men and women in British Columbia can augment

their labour income with investment income. In time they will have

sufficient income to purchase the goods and services that they need and

want. Only then can we dismantle the welfare state.

Winston

Churchill said the problem with capitalism is that not everyone shares

in its beneficence; the problem with socialism is that everyone does

share its misery. Someone else wrote that the problem with capitalism

is that there aren't enough capitalists. Our problem is that wealth is

increasingly held by fewer and fewer people. Political democracy

requires a large measure of economic democracy. Corporate integration

and central control is not healthy.

[10:30]

Most Canadians have no capital income, only labour income. Between 10 and 11

percent of the Canadian adult population own stock. About 17 percent of Canadian

households with family income over $25,000 own stocks. Of that 17 percent,

roughly one-third have incomes of more than $75,000 a year and hold significant

stock portfolios. Economic power is increasingly more concentrated, and that

threatens the choice, freedom and opportunity of those without.

summary, ESOPs promote economic growth, workplace democracy and, most

importantly, social equity, which alone will lead to the possibility of

downsizing government. I want to thank the Minister of Economic

Development (Hon. Mrs. McCarthy) for the B.C. ESOP initiative. It is

the most exciting and significant initiative that this government has

put on the agenda. I look forward to the actual legislation, and I know

that there are scores of businesses and labour unions that welcome this.

MR. CLARK :

I note that the member said that we have a real problem in society with

economic power being concentrated in a few hands. We hear this from a

government that has allowed the forest sector to be controlled by a

handful of giant corporations, that has shown no interest whatsoever in

coming to grips with that very real problem. Then he goes on to say

that they are friends of the workers and that's why they've brought

this in. Does anybody really believe that in this province" Of course

not.

The fact of the matter, Mr. Speaker, is that ESOP is

really based on the narrow ideology of the government, and the real

agenda is to undermine those legitimate organizations that represent

workers and fight on their behalf: the trade unions in this province.

If they really believed in worker participation and employee share

ownership plans, then they would have brought in legislation that took

advantage of the federal tax advantages, which have been forgone by

this legislation. This legislation will say that you're only eligible

if you invest in your own company.

As Peter Drucker said in his book on pension-fund socialism, The Unseen Revolution ,

one-third of all corporations go bankrupt every year. In argument he

said that it makes more sense to let employees participate in business,

to invest in the stock market — but not simply in their own company.

That's what the federal Conservatives have done in fact; that's what

they've done in Quebec with the Solidarity fund, where workers can get

provincial and federal tax credits to invest in essentially a mutual

fund which then invests in provincial corporations. As Drucker points

out, that protects workers from the disadvantage of investing only in

their own little company, which has a very high chance of going

bankrupt, while in fact, they're still investing in the province. So if

they were smart they would have done what they've done in Quebec and

other provinces: use the provincial tax credit and the federal tax

credit to have significant tax advantages for individual workers to

invest in British Columbia. That's something that we on this side of

the House would support.

But once again we see the ideology

of the government intervening in what could be a very exciting and good

idea. By making it so narrow and so restrictive to small businesses, to

only your business that you work in, it undermines the success of the

plan and the advantages to workers to participate in it. The real

agenda is simply to undermine the organizations that fight on behalf of

workers to protect their wages.

If we really had an

employee share-ownership plan that was broad, that took advantage of

the federal initiative and tied it with provincial initiatives, it

could be a major economic initiative. But instead it's a very small

initiative with a

[ Page 3888 ]

small amount of provincial money going into it and no federal money going into it. So in a sense it is doomed to failure.

he really believed in worker participation, if he really believed that

economic concentration was a problem and if he really was a friend of

workers, he wouldn't be on that side of the House; he'd be over here.

MR. LOENEN :

I am thoroughly disappointed in the response. I had dearly hoped that

for once we could put the narrow, petty, partisan politics behind us

and rise to the occasion. Your colleague the member for Maillardville

Coquitlam (Mr. Cashore) took us to task for using this chamber for

serious debate. I have put forward a serious proposal. You've made

light of it. You've not only offended me and the Minister of Economic

Development (Hon. Mrs. McCarthy), Mr. Member; you have offended the

working men and women of this province.

I'll tell you, we

have absolutely no objection to entering into shared arrangements with

the federal government. But we will not follow the example of Quebec;

we will not simply put up another mutual fund. Because what we are

after is to make sure that the workers see a direct relationship

between their effort and the rewards they are about to gain. That is

the key.

I know that as socialists you are all in favour of

redistributing wealth. What we have here is a plan whereby workers can

earn their way towards financial security. You would much sooner see

the state move in and simply take from the rich and give to the poor,

without any effort on the part of people. That is your type of

redistributing wealth.

This is not an untried plan. This is

something that we have examples of the success of right here in this

community, and I am referring to such efforts as the Lamford Forest

Products, the Point Hope shipyards and Victoria Plywood. All of these

are examples. What we are talking about is not merely a theory or

abstract notions. We know that these plans work and that they are able

to give people a greater part of the financial rewards of the

enterprise in which they are busy.

I put my proposal in

terms that I thought would be welcomed by the members opposite, and I

hope that you will yet reconsider if indeed you care for those who are

poor. You know, all week long you stand there and tell us we have

hearts of stone and we are in the pockets of big business. This is an

effort to represent the aspirations and hopes of the ordinary people in

British Columbia. For you to pour cold water on that, for you to stand

up and deny that, is an affront to their aspirations.

Interjections.

MR. LOVICK : Hypocrite!

MR. SPEAKER : Order, please. Would the second member for Nanaimo withdraw that comment, please. It's unparliamentary.

MR. LOVICK : If I have offended parliament, Mr. Speaker, I shall indeed withdraw.

SALE OF BCEC LAND

MR. WILLIAMS :

I just wanted to review this morning the sorry spectacle of the

Premier's involvement in the disposition of the Expo lands, properties

and assets and the sorry evidence that bubbles out daily in the press.

Today again, there is more information about the Premier of British

Columbia hustling and shilling for his friend in terms of cutting a

deal on the Expo lands and other lands. Now we hear he was hustling and

shilling for his friend as early as last April — a year ago — with

respect to the convention centre at Whistler. That's in today's press.

Let's

look at this. He had the grand plan to buy it all. It was an insulting

offer that he put forward. It was so insulting that fortunately the

BCEC board turned it down. But with more pushing by the Premier and his

assistant, the matter was considered again by the BCEC board. It was an

insulting offer, without any money put forward as a sign of good faith.

We had this phony, naive response of the Premier when he was asked:

"Did he put a deposit down for this half-billion dollar deal?" That was

news to him. The Premier has bought and sold property — tens and tens

and tens of times — personally. He knows you put a deposit down. That

naive act would not sell in the most amateur theatre company in the

land.

It was a king's ransom, in terms of assets, Mr.

Speaker. There was the Expo lands, Roberts Bank, Whistler, Coquitlam,

Duke Point and — I would hope, Madam Minister — hundreds of millions in

value of bank loans or Enterprise Corporation loans as well. He offered

$445 million and a boondoggle tax write-off of $180 million for the

domed stadium. The gall is limitless, in terms of this man who has had

a hotline to the Premier's office over the last year.

Worse,

we've had weaseling statements from the Premier continuously. He has

never been forthright and admitted that he has clearly talked with Mr.

Toigo countless times over this issue. He has weaseled continually. He

begs naivet in terms of the tax dodge benefits, when they weren't even

in the letter. At another time in Whistler, we had a pleasant, beaming

Premier — healthy from his years out of office — who appeared to be

open. That has changed dramatically.

There was another

letter from Mr. Toigo to the cabinet in the last few days, and that

stretches all credulity. No wonder the cabinet or others leaked the

document — the members of the Enterprise board. Mr. Toigo said it was

never intended that he would interfere with their process regarding

disposition of the Expo lands. Come on! That was his game throughout

the piece — to interfere and to use his buddy, the Premier. That was

constant.

We now hear in today's press, from Mr. Brown,

that the story was indeed a little different. He wants to correct the

record, and he will continue to talk to correct the misleading record

that Mr. Toigo has put forth in the public press. Mr. Toigo's plan was

clear.

But let's remember where Mr. Toigo comes from, in

terms of his recent involvements with government. Let's remember he was

on the Pavilion Corporation board. That is the board that manages the

domed stadium, Mr. Speaker. He was on the board where he was a tenant —

the White Spot operation in the B.C. Enterprise building. We should

know more about that deal too, Mr. Speaker, in terms of the ten-year

lease that he has there. So he was a tenant, and he had inside

information on the Pavilion Corporation, and he was offering money for

the assets of the Pavilion Corporation.

This all has the

distinct smell of impropriety, to say the least. It has the distinct

smell of insider trading. It stretches credulity for Mr. Toigo to say

that he went all the way to Hong Kong to talk to Mr. Li Ka-shing about

a video game. You can't sell that one anywhere. You, Madam Minister,

wouldn't try that kind of story, I'm sure.

[ Page 3889 ]

it any wonder that the Minister of Economic Development was offended by

all this? Is it any wonder that the Attorney-General was offended by

all this? Is it any wonder that the leaks continue? Good Lord! Last

week the Premier was shopping a press release around to his

Attorney-General trying to get him to say that everything was clean,

and everything was fine in the garden and that there was no

investigation. We found yesterday that he was refused.

[10:45]

What's

happening with this Premier of ours is that he is harming the

reputation of British Columbia and Canada by his activities. He is

harming the reputation of this province abroad. Even he finds that he

has to apologize to the people in Hong Kong — Mr. Li Ka-shing — about,

in fact, his own performance. It just doesn't wash.

Now the

winner in this particular messy sweepstakes is the Minister of Economic

Development. She has got the deal that she wanted established by the

process she wanted established, and as a result it now seems abundantly

clear that the local people of British Columbia will be closed out.

HON. MRS. McCARTHY :

We have just heard from the member for Vancouver East. He's consistent.

I've sat in this House with the member for Vancouver East for.... I

guess as long as I've been in the House, he's been in the House. I'm

really disappointed that in these last few years his cynicism, his

disappointment, his necessity to settle old scores comes out in each

and every speech he makes. Whether he speaks on this subject or

agriculture or forestry or anything else, his deep concern with having

to settle old political scores comes to the fore. It's disappointing,

because this House deserves a much better approach than that. This

House deserves to get out of the personality attacks and consider what

we are here for.

I'm going to tell you what I'm here for. I

was elected and am proud to be a member of a government that has the

responsibility for taking what has been a tremendous site, the B.C.

Place lands, which has been the site of the greatest exposition the

world has known.... The world tells us that. It was a world-class fair.

After the government bought these lands — took them from the Canadian

Pacific Railway and purchased them — the process has been tremendous.

We have placed on those lands a world-class fair. We have cleaned up

those lands, which were at that time an industrial slum, and had

nothing happened from that day until this day or even a decade from

now, that in itself — the cleaning up of an industrial slum — was a

great contribution.

Now we come to the end of the fair, and

we have legacy buildings: the B.C. Plaza of Nations, a very beautiful

B.C. Pavilion now converted into the B.C. Enterprise Centre doing a

service for the people of British Columbia — a beautiful building that

will always be a legacy of Expo 86. We have a geodesic dome which is

going to be a world-class science and technology centre. We have a

roundhouse which has been saved for all time from the bulldozer's

wreckage and the construction people tearing it down. And all of that

is in place.

Now we have established a board to take care

of the sale of those lands. As minister responsible for that board, I'm

going to tell you that the process that board has followed has been

filled with integrity. I take you back to statements that were made

last year at a speech to the Board of Trade on April 9 which is

important to revisit today. The procedures that were announced on that

date have been followed and have been open and very fair ever since.

1 spoke then about the process for development: "that will deliver the

full potential of this land in a way that will meet both the expectations of

the people of B.C. and the financial responsibilities of our provincial government.

" I said at that time that we would invite the creative genius of the Canadian

and world-class international development industry to join with us in building

tomorrow's use of these lands, and I said: "We want private investment

partners — their money, rather than your tax dollars — involved right from the

beginning." We want their initiative, their imagination and, yes, their

dollars working within our overall objectives for the site.

Then,

Mr. Speaker, last year, as the process was developing, on September 14,

I made yet another statement. Again, showing that the process was well

in place, I said: "From the formal proposals received through this

process, the B.C. Enterprise Corporation will develop a short list to

proceed to final negotiations." That has been done.

MR. SPEAKER : I regret to inform the minister that her time is up under the standing orders.

HON. MRS. McCARTHY : Mr. Speaker, the process has.... I appreciate very much that my time is up.

MR. SPEAKER : Madam Minister, I can't extend the time. The standing orders are there.

MR. WILLIAMS :

It's true that we were both elected to this House in 1966. I, for one,

admire the political acumen of the venerable member from

Vancouver-Little Mountain, but she hasn't dealt with the issues, and

one would expect that from the venerable minister.

She

talks about name-calling. She said that she's been terribly

disappointed with the Premier because of his activities and his

interference — that it was quite improper. That's almost name-calling.

She said that the top civil servant in British Columbia was not

professional. Now that's very close to name-calling, Madam Minister,

especially if you're a professional civil servant.

The

minister does not deny the constant intervention by the Premier on

behalf of his friend, Mr. Toigo. She does not deny all of the early

meetings and interference. She had to threaten more information to the

press if he didn't get into line. She won, but it was one major fight.

There was interference with the Minister of Finance (Hon. Mr.

Couvelier) in the activities of your operation in conjunction with the

Premier's office, unbeknownst to you. All it took was a phone call from

the Premier to you; all it took was a phone call from the Minister of

Finance to you. That never occurred. Is it name-calling?

That's

the reality, Madam Minister. You were being cut loose. It was pretty

desperate stuff, and I've got to give you credit. You're going to

survive very well. We have some doubts about the Premier, but you're

going to survive. But in terms of what this whole exercise could and

should have been, you will have to answer to the public.

It's

pretty clear what the deal is. It's going to be a major player, and it

will be from outside British Columbia. It could have been.... We have

the best architects in the world, but you've chosen to blacklist Arthur

Erickson, for one, for more than a decade, so the best architects have

not been involved. We have the best. You are not going to involve local

people. There's pension money in British Columbia; there are sav-

[ Page 3890 ]

ings

in British Columbia. The trade unions wanted to use pension money to

develop those lands. Those opportunities are being foreclosed. Most of

all, the fine lands of the Expo site should be leased forever for the

benefit of all British Columbians, and that won't happen, because of

you.

MR. SPEAKER : The Minister of Economic Development seeks leave to table the documents that she referred to.

Leave granted.

INTERNATIONAL FINANCIAL

BUSINESS IN VANCOUVER

MR. MERCIER :

I wish to address the matter of Vancouver as an international financial

centre and, in particular, the Securities Commission and the Vancouver

Stock Exchange. In this matter, the government's role is to provide a

consistent and balanced tax and regulatory framework to support the IFC

initiatives. It's unreasonable to expect a broadly based financial

centre to emerge in Vancouver overnight.

The proposed

provincial legislation — namely, the International Financial Business

(Tax Refund) Act and the International Financial Business Act — goes as

far as the provincial government can towards setting in place the

taxation and regulatory framework. It still requires validation by

complementary federal government measures. The federal legislation

would allow foreign banks to set up in Vancouver and Montreal and bring

in foreign capital and send it out again, and it would allow local

banks to accept for deposit and loan money offshore without paying the

normal federal banking taxes. Unrestricted tax shelter banking is not

envisaged.

Apart from the foregoing, what we are dealing

with is also a state of mind. Vancouver is a financial centre. You do

not become an international financial centre by a quick fix but by a

steady, aggressive pursuit of international business and international

confidence. The tax incentive approach is okay as a component of a plan

but will not sustain the long-term objective. Confidence in the

marketplace, coupled with our resource base, will.

Think of

some international financial centres. When I spent ten years managing

the Canadian interests of a Swiss bank, I visited some of the

international financial centres in Zurich, Geneva, London, New York and

Hong Kong. They all developed over time. We will have to put in some

time. We can move more quickly because we can capitalize on our

resource base, the thing we have that the noted international financial

centres do not have. We will attract the banks, trust companies,

insurers and investment houses, but we must gain the increased

confidence of the world financial community.

There's not

time this morning to address all the complex economic and financial

matters involved as we strive for the international recognition we

crave, but I would like to address two relevant components with which I

am very familiar — the Vancouver Stock Exchange and the Securities

Commission. With 15 years in businesses listed on stock exchanges and

on the Vancouver Stock Exchange in particular, I think the experience

justifies the comments that I'm going to make.

[Mr. Pelton in the chair.]

Firstly, I condemn the recent attack on the Vancouver Stock Exchange by the second member for Delta (Mr. Davidson).

Secondly

— and the backward people on the opposition benches will really like

this one — I propose that we utilize the Vancouver Stock Exchange to

privatize the prospectus clearance procedures and related functions of

the superintendent of brokers and the B.C. Securities Commission. I

knew you'd like that.

During my comments, keep in mind what

I've said about the international financial centre being, for the most

part, a state of mind, and the importance of gaining international

confidence.

I have to take a minute to talk about the

history of securities regulation. Modem securities law was formulated

in the U.S. in the 1930s following a disastrous market collapse. There

was an overreaction by government which resulted in excess government

involvement in an otherwise commercial endeavour. It's noteworthy that

all the laws that have been passed have seldom resulted in recovery of

investment lost by the investor in frauds and other negligent

operations. Our laws are based on the government's processing business

materials such as prospectuses when they should simply be policing the

process.

[11:00]

It is time for an exciting new approach: privatization of a very

important part of the process. We have established basic ground rules

to maintain the balance, to protect investors from crooks, but on the

other hand not to be so tough that they unduly restrict the interaction

between the risk-taking investor and the business promoter. While the

old rule, "Let the buyer beware," is important, it is equally important

to let the marketplace function with as little government interference

as practical.

B.C. regulation standards are world-class.

Nevertheless, we can take a giant leap forward by privatizing certain

aspects — and I emphasize "certain aspects" — related to prospectus

clearance. Since less than 25 percent of the public purchase

securities, the market tends to be the playpen of the wealthy. It is

logical that less taxpayer money should be spent on the process.

Government should instead concentrate solely on the market trading

aspects where historically the bulk of the negative activity has taken

place.

The second member for Delta obviously did not sell

at the high and somebody else did. I can't think of any other reason

for the very negative comments he made. Those comments are actually

causing serious damage, and they have a very negative impact on our

international reputation. The status of the Vancouver Stock Exchange

has improved immensely over the last decade, and by commenting

negatively, like that member and the member for Esquimalt-Port Renfrew

(Mr. Sihota).... When they continually hammer on the market, they

ignore the thousands of honest people involved in making the market one

of the most active in the world in terms of share-trading volume and

dollar value.

The world is very competitive, and we must continue to support the advances of the Vancouver Stock Exchange.

MR. STUPICH :

I'm disappointed that the hon. member for Burnaby-Edmonds would be

talking so seriously about Vancouver as an international banking

centre. I'm a little amused when he said that it won't happen

overnight. I've been in the House in the last ten years when succeeding

ministers of finance have talked about Vancouver as an

[ Page 3891 ]

international

banking centre; it certainly won't happen overnight. As a matter of

fact, Mr. Speaker, the only two issues that I can recall being talked

about more with as little accomplished are the Vancouver Island highway

and the Vancouver Island gas pipeline. This ranks with them as issues

much talked about by succeeding Social Credit governments, with nothing

accomplished.

British Columbia is a small player. When it

comes to international trade, Canada is important; but by far the

largest bulk of our trade is with the United States. We don't need an

international banking centre for that purpose. Most of the companies

involved in international trade have their headquarters back east, and

they're not going to be travelling to Vancouver to talk about

international banking when they can do it so much easier in Toronto.

Mr. Speaker, I think we'll be talking about it for a long time to come,

with very little accomplished.

I'm going to leave the

Vancouver Stock Exchange discussion to one of my colleagues, but can I

just say this: the latest appraisal of the Vancouver Stock Exchange

I've seen coming from the east is that if you want to play a roulette

wheel, invest in the Vancouver Stock Exchange.

MR. SIHOTA :

I want to take issue with the comments the member made with respect to

deregulating the activities of the stock exchange. That would be a

hideous blunder on the part of this government, if it chose to embrace

the rather naive point of view of the member for Burnaby-Edmonds. I

want to deal with all the issues he raises. The thrust of his argument

is: "Look, I have faith in the private sector. It can regulate itself

quite well, thank you very much. We'll allow it to deal with the

prospectuses and other similar or analogous matters. "

You

have to ask yourself if that argument — or belief and faith — is

justified. In light of the situation with International Tillex, Marco

Resources, Lionheart Resource, Starfire Resources and, more

importantly, the evidence that's come out in the Carter-Ward trial of

the last few weeks, is that faith really justified? Of course not.

There has been sham after sham reported as a result of the inability of

the superintendent of brokers office or the VSE to adequately regulate

itself. If that private sector had been able to self-regulate, we ought

to have been able to prevent some of these things from happening.

It's

true; investors have seldom recovered their money. But there is a

growing number of cases where there is an abundance of negligence on

the part of those regulators. To say that the answer to eliminating

that negligence is to vacate the field and not to regulate at all is

simply crazy. It doesn't make any sense at all. More importantly, from

the member's own perspective, it is contrary to what his own Minister

of Finance has done. As a consequence of the demands that we've been

making on this side of the House, the minister has taken steps to

bolster the staffing levels of the superintendent of brokers; he's

appointed Mr. de Gelder and a special hit squad of four people to look

at all these frauds.

So if he just listens to the rhetoric

that flows from his own minister, he would recognize that the

government's own drift on this matter is in terms of increased

regulation — so much so that Mr. Brown has been complaining about it.

Let's

move on from there with respect to that international reputation. Those

who participate in the market and are involved in the scams on the

market create the international reputation that the stock exchange has.

These are not my words. The certified accountants from London, when

they came here and saw it, described it as a "cowboy exchange." People

in Hong Kong said they would not take on many of these investments that

refer people to Vancouver. It's been described by the New York Times

and in leading editorial comments in the last two months as being the

Reno or the Las Vegas of stock exchanges. This member says he wants to

deregulate that? Nonsense! Absolute, sheer nonsense! If he's got a

concern about prospectuses and prospectus filing and the turnaround

time on that, I think it's fair to say that Mr. de Gelder has done a

reasonable job of improving that. Obviously the member opposite has not

realized that, because if he had, he would not have made the type of

inane comment he made with respect to privatizing the prospectus.

The

point remains, Mr. Speaker, that you have to regulate a market.

Everybody in this whole world regulates their market. We have done an

inadequate and inferior job in regulating the junior exchange, and the

fear that happens now.... Sorry, Mr. Speaker. My time's up.

MR. MERCIER :

It's so typical. The member for Esquimalt-Port Renfrew was so intent on

attack that he actually missed the point. He misses the point regularly

when he is talking about the Vancouver Stock Exchange. The main point

is: it is a huge and outstanding success in what it does in economic

terms, and what he says in the House is an affront to the thousands

working honestly in one of the most important commercial endeavours in

this province.

I know his knowledge in a practical sense is

limited, and I've only had 15 years dealing with the exchange myself.

However, I know that prospectuses do take too much time to process,

time wasted on business judgments and non-regulatory matters which form

part of the prospectus. What we are talking about here is that we can

maintain and improve the disclosure standards by a system of bonding

the lawyers, the accountants and the engineers who lend their names to

the prospectuses.

We can create a speedy access — and as a

lawyer he might devise a way to do this — to redress for the investors

who think they have been duped or misled, so that they have access to

recovery by civil action from investment dealers, brokers and

promoters. Why doesn't he become positive and address himself to the

matter of getting redress for those investors who have suffered in this

system?

In closing, I would just like to say that it is

grossly unfair for the member to select a few transactions from the

millions of dollars and millions of shares that trade and ignore all

the risk capital that has been raised to the benefit of this province

and which employs thousands. He is so ignorant of the practical side of

the situation that he hasn't realized the impact he has made by

condemning all those honest people for his own benefit and

aggrandization, and doesn't realize that when you do that....

MR. SIHOTA : No such word.

MR. MERCIER : Tell me later.

When

you do that, you have really made an effort to destroy the market

system that creates employment and economic opportunity in this

province, as we work to become a world-class community — which I think

is achievable. It may take time; it is definitely achievable. So think

positively. Think of all those honest people and get off the negative

kick that you have displayed day in and day out in this House.

[ Page 3892 ]

Orders of the Day

The House in Committee of Supply; Mr. De Jong in the chair.

ESTIMATES: MINISTRY OF

ATTORNEY-GENERAL

(continued)

On vote 14: minister's office, $236,953.

HON. MR. STRACHAN :

I'd like to tell the committee about the great job the Attorney-General

has done in Prince George and at the remand centre in Surrey, but no,

I'd like to talk about the youth detention centre.

Interjections.

HON. MR. STRACHAN : Okay, I will defer to the member for Esquimalt-Port Renfrew; I'll talk about the youth detention centre later.

[Mr. Pelton in the chair.]

MR. SIHOTA :

I see the Attorney-General is not here, and I don't quite understand

where he is. Oh, there he is. Boy, I tell you, is the House Leader on

the government side ever relieved to see the Attorney-General in this

room.

MR. CHAIRMAN : We're supposed to be talking about vote 14.

MR. SIHOTA :

The government House Leader — for the benefit of the Attorney-General —

was about to talk about the Prince George youth detention facility or

something like that, and I thought I should spare him and allow him to

go back to the dictionary to figure out what the second member for

Nanaimo (Mr. Lovick) has been saying all morning.

In any

event, now that the Attorney-General is here, I want to deal with

several issues, and I am going to change my agenda a bit in order to

accommodate one of my colleagues and deal with the matter of

privatization of certain services in our correctional facilities. I

want to introduce the topic in a general fashion first and then deal

with some very specific questions.

It is of great concern

to me what's happening within our correctional realm right now. I don't

want to focus a lot on the inquiry at Oakalla. I'll be talking later

about Oakalla and some of my concerns about that institution, concerns

that I'm sure the Attorney-General shares. I want to focus on the

privatization of certain correctional facilities. Later on I'll go back

to the matter of the

schedule of fees and legal aid.

I'm

quite concerned about the components of the delivery system within

prisons which are currently being contemplated for privatization. I

hear my own rumours on what is being contemplated, and I am deeply

concerned about what the government intends to do, particularly with

shops — woodwork, metal, hobby, laundry, tailor, that kind of stuff. I

want to return to that later during debate. I'm also very concerned

about what is happening with privatization and the closure of various

camps. This morning, however, I want to start off on the matter of the

privatization of medical services within the realm of the correctional

program.

[11:15]

1 want an

indication from the Attorney-General as to the government's intentions

with respect to privatization of certain critical medical services in

the prison system. I raise them first of all because of my overriding

concern about risk to the public; second, of course, because of my

overriding concern about cost and whether there will be any savings to

the public. It is my understanding, for example, that the government is

contemplating the privatization of x-ray technician services at

Oakalla. It is my understanding that the government is considering the

privatization of blood-testing of people incarcerated at Oakalla. We're

concerned about that because it appears as if those services are very

cost-effective today. We are also concerned because there is a risk

involved. When you have to transport inmates from the facility at

Oakalla to a public health facility in New Westminster, there is a risk

to the public. More importantly, it means that certain people who are

regularly employed at Oakalla, for example, are then taken off shift —

and we're going to talk later about staffing levels — but it has a

consequent effect on staffing levels and interrupts things such that

either all the prisoners have to be locked up or there are an

inadequate number of staff looking after the prison population. So

there's an exposure to public safety, in both the potential for escape

from Oakalla, for example, and the potential for incident and escape at

the medical facility in a place like New Westminster.

Similarly

with blood tests. You have to ask yourself who's going to be doing the

transportation. If it indeed is true — and I would like confirmation on

this — two security officers that have to transport the person out, a

driver.... That's a removal of three staff from the facility.

But

what also causes me concern, Mr. Speaker, is what's happened at

Wilkinson Road, the Vancouver Island Regional Correctional Centre. Here

it's my understanding that the medical services have been contracted

out to a physician, and the physician has then hired the additional

nursing staff.

Will the Attorney-General confirm that

cabinet has authorized privatization of nursing services in correction

facilities, and that strategies are being developed with respect to the

removal of these important services, and that 24 or 25 jobs are

involved?

HON. B.R. SMITH : I'm going to make, first

of all, a general response, because a fairly broad brush of comments

have been made about privatization of health services and some other

services.

I would say right at the outset that there is no

contemplation of any privatization of any service that relates to the

security of people in custody. We're not looking at, considering or

studying whether we could have a contract service escort a prisoner to

a hospital. That's just not on, okay? That's a non-starter. But it's

certainly true that some components of health service are under

consideration for privatization, specifically nursing care.

Our

view of this, like all privatization, is that it has got to have some

justification and an element that is going to either provide the

service more efficiently or cost-effectively over a long period of time

or give us greater flexibility which, in turn, will lead to that. We

have not tried to approach privatization simply from the philosophical

standpoint that we want to eliminate full-time-equivalents, or whatever

the horrible bureaucratese is to describe individuals who are working

and doing a good job.

So privatization that we have looked at has been privatization in which we have an eye for some of these other

[ Page 3893 ]

ingredients.

But it is absolutely certain.... I confirm that one of those under

serious consideration is physician and nursing services.

might add, however, that we would be very cautious about fracturing or

breaking up the delivery of these sorts of services as a unit. You have

to have a range of services; you can't be buying little pieces. If

privatization occurs there, it's going to occur in a sensible,

comprehensive — within the unit anyway — cost-effective and efficient

way.

MR. CHAIRMAN : Just before we proceed, hon.

members, the member for Cowichan-Malahat has asked leave to make an

introduction. Shall leave be granted?

Leave granted.

MR. BRUCE :

In the precincts today are 26 students from Mill Bay Elementary School,

down here to take in the proceedings of the House and have a tour of

the buildings. They're with their teacher, Mrs. Turney, and I would ask

that the House make them feel welcome.

MR. SIHOTA :

Being a chap who was born and raised in Cowichan-Malahat, and having a

lot of friends and relatives there, it's always nice to see people from

that riding around here.

I want to continue with this line

for a minute or two. You see, we have a twofold concern on this side,

both with respect to cost-effectiveness — and I want to come back to

that in a minute — and also with respect to security and risk to the

community. It seems to me, Mr. Chairman, that when you remove a service

like nursing or physician, and if you remove it from site in

particular, as seems the case with x-ray and blood-testing and now

maybe with nursing, then there is a consequent ripple effect throughout

the system in that those who remain on staff have to stretch their

responsibilities, if I can put it that way — or, to put it more

bluntly, ignore other responsibilities in order to transport people

elsewhere.

It's true that we're talking about an incidental

security component when we talk about nursing, versus a direct security

component when we talk about security officers; we can use that

language. The fact remains that there is a ripple effect from the

privatization of those incidental services on the provision of direct

security services, so as to take people away from their security

responsibilities to, for example, transport someone to an institution

elsewhere. Now that may or may not be happening with respect to nurses.

It is clearly happening, because I didn't hear a denial, with respect

to x-ray and blood tests.

Our first concern is with respect

to exposure to the public, both within the institution when staff are

involved in a matter that they were not typically and traditionally

involved in.... Therefore they're not putting their eye on watching and

monitoring events, but are more concerned with transporting an inmate

somewhere. That reduces the staff complement that is watching the

incarcerated prisoner. The less they are watched, the greater the

exposure to escape and hence community fears.

Similarly, if

you've got someone out there in the community in a facility that is

public, like a hospital.... I did a whole bunch of these before, and

we'll do them again later on: all sorts of people who managed to escape

when they have been in the process of being transported or have been in

public possession, if I can put it that way, in a facility.

We're

concerned with those two elements of it with respect to public

security. We're also concerned about cost effectiveness. But since the

Attorney-General has mentioned that, I want to ask him: what evidence

does he have that he can bring to us today that would demonstrate that

it would be cheaper, more cost-effective, to privatize these nursing

and physician services?

HON. B.R. SMITH : To comment

on the concerns about people being off site, we don't have any plans

even if nursing services are privatized. They will remain on site.

We're not going to remove nurses from the site.

We've been

doing this, as the member knows, at Wilkinson Road — that's what I'm

going to call it; I can't stand that long appellation; I can't even

remember exactly what it is without reading it — which is an excellent

institution now that it's been rebuilt and modernized. When we opened

there, the contract was let for both the physician and medical

services, and that was with the existing doctor. We didn't dump him or

anything. We moved him onto contract. He's been doing that, and those

services and the nursing services have been performed there since April

I couldn't give figures right now as to whether

that would save money or not, because we'd be comparing those services

with the old institution and not the new institution, and I don't think

they'd tell us very much. Certainly our objective is to save money, but

not at the expense of either the service or the security.

mentions x-ray and blood tests. The only place we do that on site is

Oakalla; we do it on site and in house. We're not making any changes to

Oakalla in the delivery of any services until the inquiry's over, we've

seen the report and we've had a chance to digest it. We've no intention

of disrupting the operation of Oakalla, until such time as we have data

from the inquiry commissioner as to the many problems that exist in

that institution.

We've never had those services in other

institutions, and when Oakalla is relocated in the various elements

that we're now building, we won't have those services in those

locations; that's for sure. Those are done very well, we think, by

private contract. We may well not alter the situation in Oakalla

anyway, depending on what the inquiry commissioner tells us.

MR. SIHOTA :

I'll come back to the matter of Oakalla later on, because my

understanding of the situation may well be a little bit different. It

may well be true that you don't intend to privatize or make any changes

in the future. I don't know if you've already made those changes with

respect to blood-testing and x-ray technicians, or if those are under

contemplation. We'll get to that later on.

I want to deal

with the matter of the nursing services, because my colleague from

Prince George North is here, and she obviously has an interest in these

matters. The question that I had asked, and that I didn't think I

received an answer on — so I'll pose it again — is: is there any data

or evidence that would support the proposition that it is more

cost-effective to privatize these nursing services in correctional

facilities?

HON. B.R. SMITH : With nurses we're at

the exploratory stage, and we've had some proposals from nurses in some

institutions to do the service on contract, but we haven't evaluated

those. Those decisions are being made.

[ Page 3894 ]

[11:30]

We're in the exploratory stage with private contracting in Prince

George, as well. I can honestly say that I don't have any figures at

the moment to bring here. They are not in another office; they are not

here because we don't have them. I'd be in a position probably later to

comment on that in the House, or even to give the members some

information on that. There's nothing secret about that at all. We are

seeing whether we can get the service done more efficiently and

effectively by a private contractor. We don't have evidence that we can

yet, no.

MR. SIHOTA : Let me just crystallize this a bit. Is the Attorney-General

saying that the government has not decided whether it wishes to proceed with

privatization of nursing services in correctional facilities?

HON. B.R. SMITH :

I think, in general terms, I answered that. We would like to proceed

with privatization if it's effective and efficient and makes sense. But

we haven't that data to determine that. It may be that it will make

sense in one institution and one area and not in another. So we're

going to deal with it on the basis of the data we get. But yes, we

would like to privatize; I don't think that's any secret. But I'm not

very keen on privatization for the sake of privatization. I want

privatization with some results.

MR. SIHOTA : I'm

delighted to see when our points of view concur, because I concur. We

don't like to see privatization for the sake of it either, and that's

been the position that we've advocated all along.

Let's get

back to this matter to make sure I'm clear on it. I take it then that

the government has not made any decisions with respect to privatization

of nursing services in correctional facilities. Could the

Attorney-General advise us what stage their discussions are at? Have

you set some deadlines for reports or for information on this? Is it

something the government is just looking at? Is it something that it's

planning to do, and if so, what are the time parameters involved?

HON. B.R. SMITH :

My staff tell me that we're not very far down the road in the process.

As far as Prince George is concerned, we've had actual discussions with

an individual who's interested in providing the service, and we're

awaiting figures and data. In other institutions in the province we're

not even that far. We're at the stage of having had some proposals from

nurses and others to give some of these services, and we're looking at

them. It's no secret that the aim is to privatize these services as and

when it makes sense to do so and we get decent proposals, but not just

to go out and take the first contract so that we can say: "Well, we've

eliminated these FTEs." That's not the plan.

Yes, it is the

government's policy to privatize these services if it can be done

effectively, exactly the same as for the official court reporter

privatization, which was very much resisted at the time. There was

great concern not just from reporters but also from members of our

profession and by judges. I think that one has proven itself. There may

be some that haven't worked out. I don't want to get embarked and find

out down the route that it isn't going to work out. We will proceed

cautiously, but that's the direction we're going for sure.

MRS. BOONE :

The auditor-general's report of last year was very critical of the

privatization that had occurred in your ministry. The criticism stated

that prior to that privatization no studies were done that indicated it

was going to be cost-effective. In fact, the auditor-general could find

nothing to indicate that the privatization was cost-effective or more

efficient.

Therefore, I am wondering why the minister is

now proceeding in the same manner with the privatization of nursing

staff at the correctional institutions without having done his homework

and got the figures. Before you even contemplate privatization, before

you even look into it, find out if it is going to be cost-effective. No

studies have been done. We would very much like to see studies before

you get contracts or tenders from people as to the privatization of

those services. The homework wasn't done in the past; can the

Attorney-General assure us that this time the homework will be done

before any further steps are taken to privatize these areas?

HON. B.R. SMITH :

Like the member, we read the auditor-general's report. I think what it

was critical of was that we didn't do studies to document the existing

costs before we proceeded. That was with food services. The data we

have compiled there shows that we are achieving savings in food

services. But we've heard the auditor-general, so we have been doing

those studies in advance to determine exactly what the existing costs

are so that we'll have some basis of comparison. You may get the sort

of phenomenon where you don't save money in the first year of a

privatization, but over three years or five years you do make savings

and you start to get greater savings.

Unless we can show advantages to it, as I say, I'm not anxious to steam ahead with it.

MRS. BOONE :

I have a little difficulty even understanding how it's going to be

possible to save money in the contracting-out of the nursing services.

I don't see how you can cut the services. How can you be more

efficient? You've got staff that are there for a certain period of

time. Are you going to cut back in the number of staff? Is that how you

get more efficient when you privatize? Do they cut the wages of the

staff? Just where is a private contractor going to be more efficient,

and in what manner can a contractor save money? Where is money being

wasted right now in the nursing services? This seems to me to be a very

important part of the operation. I don't understand how you can cut

corners and pay your people reasonable wages, maintain the same

services, and give somebody else a profit. How is it possible to

achieve any of those things? I just don't understand it.

HON. B.R. SMITH :

I know that there is always that concern. Some of it is staff-driven

concern, and it relates to insecurity that people have; they wonder if

they're going to lose positions or not have a chance to do these things

if they are privatized. I understand that, and I think she's expressing

those concerns.

We don't intend to have reductions of hours

of service. But one thing these studies and this process are going to

do is allow us to standardize some criteria of hours and types of

service, so that we don't have the variety that we have in some of

these services from institution to institution. I mean it is not the

same service; some get more than others. We're going to try and

standardize and specify very clearly, if any contracts are let, both

the hours and the service that we expect.

[ Page 3895 ]

How

can we do all of that — the member says with her great faith in the

private sector — and still have a profit result? There are many costs

of providing government services that don't appear even when you look

at the ministry expenses and what appears in operating statements,

because government employees have additional payroll, liability and

fringe benefit costs, an overall part of administration of government

which we sometimes don't get costed in. We're going to try and do that

in this case.

I can tell you that exactly the same

arguments were made in relation to the privatization of food services.

Yet those contracted food services have achieved a saving of over 12

percent from what it cost us in '83-84, when the branch provided those

services. Those savings have continued to be realized and, based on

provincial standards, continue to be realized with the quality of

service being good. So I say it can be done.

It's the same

with some of our privatized.... If I can call it that, because I don't

consider that a service is necessarily privatized because it's not done

by a public servant. We've got community correction services — some are

done by agencies and some are done by people who have a profit motive

and, of course, therefore they are non-caring and all the rest of it;

that argument is sometimes made. But they are done with efficiencies

and they are good programs. I have seen these programs as I have been

going around, and I've met private contractors. I've tried to look for

some of those elements that people sometimes suspect are there, that

maybe they don't give the service or they don't care about the people

they are supervising, because there's a profit motive. If we have

people giving services that are activated by that, then we don't want

them. We want people who are prepared to run the service.

part company only on the one point, and that is that we don't believe

that, because you're in house, you have a monopoly on any of the

qualities of good service, caring or performance. We say that those

things can be done in house and those things can be done out of house.

They can be done by a person who is making a profit; they can be done

by a private agency.

I know the member is probably from

Missouri and not Prince George, but I'm from Missouri too, and I do

look at the saving we achieved in food services.

MRS. BOONE :

I'm still not getting the answers with regard to the nurses. I'm not

talking about food services. That's a fait accompli. I just don't

understand how you're going to be able to.... The minister has stated

that the nurses have come to him and suggested that they be on a

contract. Are you telling me that nurses have come to you and offered

to work on contract for wages less than they're making as government

employees?

HON. B.R. SMITH : No, I'm not. I'm saying

that it's exactly what we're exploring in Prince George now. I don't

have the answer to that. If I had the answer I'd produce a piece of

paper and we could look it over and compare it, but I don't. That's

what we're looking for.

[11:45]

MRS. BOONE :

So if people are coming to you — and obviously they're not going to ask

for wages less than what they're making — they're obviously contracting

out, such as the court reporters did, who are extremely happy with the

outcome of the privatization. They're making wages far in excess of

what they ever made as government employees, and it's costing the

government more money.

Is that what's going to happen, in

the long run, with the privatized services? Are you looking to

contracting out and paying these people large contracting-out wages? Or

are you looking to contract out to a doctor, who is going to be

pocketing profits and paying his staff substantially less than they are

making as government employees? The bottom line here has got to be that

you are interested in saving money. How do you save money in

contracting out these services, unless you are going to pay these

people less for contracted services, or unless the service is going to

be less? How is that possible?

HON. B.R. SMITH : If I

could answer that, we wouldn't have the debate today. That's exactly

what we're trying to do. But we're not going to cut back on nursing

service. We're going to ensure that the nursing service across our

whole system is properly defined in terms of hours and what it is we

want, so that we don't have variations from one area to the next, but

we have consistent standards. I don't believe we have a private sector

nurse that has come to us with a proposal at this stage, but we are

looking.

In Prince George, we are looking at physicians'

services and medical services generally, and there apparently have been

some discussions. But we know that we have to provide the service and

that we can't cut back on it, and we don't expect nurses to work at

some subsistence level. Goodness knows, they work at a subsistence

level anyway, compared to some segments of the workforce. I think

nurses have had a hard time, over the years, trying to get their fair

share of the advances in wages. We have a tremendous shortage of nurses

in this province and a pool of nurses who are attracted elsewhere. I

think that's a concern to the Minister of Health and certainly to the

government.

So I don't think you'd find this government is

either unsympathetic to nurses or is looking to find cut-rate,

bargain-basement nurses who are going to work in institutions. I have a

very high respect for the profession.

MRS. BOONE : A

final question. We have no problems with your going around and

standardizing the services. That certainly can be done, but it can be

done within the existing services. You don't need to privatize to

standardize.

I would like to get the assurances of the

minister that any studies done by the ministry in the privatization

which you say you are doing right now will be made available to us

before any privatization takes place.

HON. B.R. SMITH :

I won't give that undertaking, but what I would say is that I have

absolutely no problem with making public our data at some time if we do

decide to go ahead with the privatization — to show the data upon which

we based it. I have no problem in making that public and not keeping it

in a desk drawer. I think it should be public.

MR. SIHOTA :

Just to wrap up on that point, I am sorry to hear the last comment. It

would seem to me that if the case is strong and compelling, there ought

not to be any reason to delay the filing of that type of information in

advance of any privatization decisions. One would therefore hope that,

as we have asked in other matters of privatization in this Legislature,

the case would be presented to the public before the

[ Page 3896 ]

decision is made, because of the consequences it could have on the taxpayer.

want to move on to the issue which I had intended to commence with this

morning, although I must say we will come back to privatization.

Believe you me, we will come back to the 12 percent saving on food

services. I read with interest I think it was Mr. Robinson's

article in

April 1988 in Canadian Business .

I could be wrong, but I read it recently, and I was struck by that

figure of 12 percent. I've done some work on it myself, and at a later

juncture in our debate on this I intend to do a fair bit of talking on

the matter of food services. So that's notice to those who may have the

background information on it, so that when we do get into it everybody

can point to my failings as an accountant or one who takes into

consideration what should or should not be included when calculating

whether or not there is a saving.

I want to turn now to an

issue where I am sure the Attorney-General will not have to rely on his

experts as much. It's perhaps more of a philosophical issue, yet it has

profound implications in practical terms. This is the whole matter of

the new

schedule of fees the government has issued which dictate how

much one must pay before getting entry to the courts. Let me start off

largely on what I would call the philosophical track, first of all, and

then express my opinion in relation to the practical effect as I go on

in my opening comments on this very important matter, a matter on which

I may say I have received an unprecedented number of calls from people

of the profession to which both the Attorney-General and I belong. At

least, I still pay my insurance premiums; maybe the Attorney-General

doesn't. I still carry my card in my wallet.

Interjection.

MR. SIHOTA : Oh, you do. Good. I guess we always need something to fall back on, just in case.

HON. B.R. SMITH : Both of us.

MR. SIHOTA : That's what I meant — both of us.

Just

on a philosophical track, I don't think I have to talk about the

courts at any length. I think we both appreciate how in a free society

there must be an abundance of access to the courts. The courts in our

society are the ultimate arbiter of any type of dispute. Needless to

say, when human behaviour is involved, when the

interpretation of

complex laws is involved, when commercial matters, let alone family

matters, are involved, at some point the pot boils to the extent that

someone has to make a decision in order to maintain some structure in

society to prevent a level of chaos or riot — and I don't mean that in

the traditional sense of the word but in perhaps the untraditional

sense — to settle in.

It is imperative that all people in

society have access to the legal system, to the courts; that there not

be undue barriers to the courts. Most people in the course of their

lifetime do not have that many attendances upon lawyers. People go

through real estate deals; they make wills, and perhaps someone in the

family might die. But in everyone's lifetime there is usually one

instance — in the case of others, several instances — upon which one

needs to have access to that judicial system to resolve a dispute, be

it a foreclosure action, an ICBC accident action, a family dispute, a

divorce, a child custody or access, a matter of maintenance, a

difference of

interpretation of a business agreement between two

partners, or a strong feeling, by an individual that the law is running

against him and that the

interpretation of the authorities with respect

to a particular statutory provision is not what he thinks it ought to

be. If you can't come to some consensus or some type of negotiated

position at the end of the day, you go to a lawyer and say: "I think we

have to go to court on this." The lawyer tries negotiation as well, and

ultimately you have to go to court. We know there's a lot of that going

on, because we know the extent to which the courts are backlogged.

Given

the significant role that the judicial system plays in resolving

disputes between people, there must be minimal obstacles with respect

to getting access to that system. Lord knows there are already enough

obstacles. Certainly people are concerned about the legal fees they're

going to have to pay, and that's a variable they have to consider. It

poses itself in many ways as an obstacle, and we'll talk about that

later on in terms of legal aid. We know there is time involved in terms

of the courts being backlogged; that serves as an obstacle because

sometimes people's lives are held in suspension pending a decision by

the courts. Those are things that we deal with as a society.

Now

the government has imposed another obstacle, what I would submit is a

significant one, which we have not come to expect in society, which

alienates and frustrates that principle of access to the courts. That's

these new fees — the imposition, as I call it, of the user-pay

principle to the courts. These are not my words, but the words of all

the lawyers who have written or phoned me. These are the words of the

Law Society of British Columbia. These are the words of the trial

lawyers of British Columbia. They say — and I concur entirely — that

individuals who are poor, individuals of modest means, are going to

have difficulty meeting the new

schedule of fees.

It's $100

just to file the commencement of an action in court. That's up from

$50. I'm telling you, that poses itself as an obstacle. Then $100 for

every day that the trial goes on. It's not unusual to have a situation

where a custody case will take five days in court. It is an intense,

emotional, passionate debate between mother and father over the future

of a child. Judges, needless to say — all of us — don't like to see

these types of cases before us, but they happen in society because

we're talking about human behaviour and the breakdown of families. To

think that just to get access, just to be able to walk inside the door

of the courtroom and into the judge's chambers, before you even begin

to have a hearing, could cost you, in the case of a five-day custody

case, $600.

If that is not obstacle enough, there seems to

be an inherent contradiction in the

schedule of fees put forward by the

government, which says to a family having an emotional custody dispute

— five days in court — that they're going to pay $600; and which says

to the bank that wants to commence a foreclosure action that they're

going to have to pay $100 for the commencement and $20 for their

interlocutory application. That's $120 to get their form of justice —

the bank's — and to have access to the system, and $600 to the family.

So apart from the obstacle, there is the inconsistency. And there are

several other inconsistencies which I'll bring out later.

Obviously,

what I have said, from a philosophical point of view, is something that

the Attorney-General would have expected me to say. And I'm sure that

those were considerations when the government chose to implement this

type of

[ Page 3897 ]

policy.

Later on I want to talk about the timing of this, as well. But it just

occurs to me that this is too much, and it occurs to me that it will

deny people of modest means and limited incomes access to the courts.

[12:00]

Given the role that courts have played in this society, I can only

conclude that the decision to impose these fees is wrong and that the

decision, with respect to the user-pay philosophy, ought to be

rescinded. I don't think that that's a surprise, in terms of my own

view. It certainly is a view that others have articulated, including

the Law Society when they asked for an immediate rollback. I have not

heard the Attorney comment on that. It may well be that it's not a

matter of great media attention these days, but it is a matter of great

focus and debate within the community. One only has to do what I did

the other day, which is spend about 15 minutes on coffee row in the

courthouse, to find out the extent to which feelings run on this matter.

I will put to the Attorney-General the opening question on this matter

as to whether or not he will agree to a rollback of the

schedule of

fees.

MR. CHAIRMAN : Just before the Attorney responds, the member for Maillardville-Coquitlam has asked leave to make an introduction.

Leave granted.

MR. CASHORE :

It's a great pleasure to introduce two constituents of mine from

Maillardville-Coquitlam, people who have given me great moral support.

They are Naomi Manley-Casimir and her father Mike Manley-Casimir. Mike

is the past chairperson of the NDP policy committee on education, and I

ask the House to join me in making them welcome.

HON. B.R. SMITH :

It's certainly true that these fees were increased considerably in

percentage terms. It has to be borne in mind that many of these fees

had had no raise since 1976 and that there have been no increases in

fees of any substantial nature at all in the court system since 1982.

So these have the appearance of a sudden increase, but we were

recovering from court fees about 15 percent of the cost of operating

the courts under the old schedule, and now we're getting this up to, I

think, around 40 or 45 percent.

Because there are people

with no means who would be impacted by this, we of course have

provision in the rules, as the member knows, that the court can waive

those fees for a person without means. In much of the cost of

litigation, for people who are represented by counsel, I don't believe

these are going to produce much effect, because the cost of litigation

is largely the per diem or the hourly tariff of the solicitor or the

barrister. That's the major part of the fee; it isn't the filing or the

hearing fee. In cases where people are not represented by counsel,

they're going to pay more for access to the courts, and that's true,

and I guess in an ideal world we would always like to minimize that.

The

fees were brought in at this time so that they could be part of the

budget and the fiscal year; I don't think there's any mystery in that.

But I know there are concerns not just about the fees but about the way

they were done, in terms of apportioning them to various things — and

the member has mentioned some problem maybe with costs of custody

hearings. I'm certainly amenable to looking at those sorts of

suggestions. There may be ways of achieving this kind of revenue, but

achieving it in a way that is fairer to some classes of users. I know

also that the Hughes commission is going to look at this, as I think

they should. There will be submissions made to that, so I'll pay close

attention to what that commission tells me. But at the moment, no, I'm

not going to roll them back, and yes, it is the government's intention

to achieve the additional revenue from fees in some way or other. As to

how we do it, I am certainly receptive to some better or more workable

or more equitable proposals from the bar. I think that I'll probably be

getting some of those, and I look forward to them and similar proposals

from the member.

MR. BARNES : Mr. Chairman, I'd just like to ask leave to make an introduction.

Leave granted.

MR. BARNES :

I understand that a number of students from Britannia Secondary are

with us. I believe there are about 35 of them, along with one of their

teachers; there are two others I didn't get the names of, but Mr.

Walker, I believe, is one of them. I'd like to ask the committee if it

would join with me and the first member for Vancouver Centre (Mr.

Harcourt) and make them welcome.

MR. SIHOTA : The

Attorney-General says that he is amenable to looking at suggestions in

terms of how to wrinkle out the inconsistencies in the fees. It's my

suggestion to the Attorney-General — and I say this with respect — that

that concern ought to have been there prior to the implementation of a

schedule of fees, that there ought to have been a dialogue with the

legal community prior to the introduction of these fees. You may want

to talk to the legal community now, in light of what has transpired

here — great. But from my point of view, in terms of trying to address

this matter by taking a huge swoop, going from 15 percent of the court

costs, the Attorney-General says, to 45 percent, if I heard him

right.... To have done that without a scintilla of consultation with

the legal fraternity, I would submit, was wrong. It was an error. As a

consequence of that lack of consultation — and I say this again with

respect — some of the stature that was accorded to the Attorney-General

has been lost in this matter. It is a regrettable move. Many of us are

deeply concerned about it.

Not only that, but the

Attorney-General is correct in saying that he has a committee out there

looking at these very issues. It would seem to be preferable in logic

to have that committee come down with recommendations after input from

the community and the public. Yesterday I congratulated Mr. Hughes,

when he was here in the House, on his hard work on the matter of this

committee; I congratulated the Attorney-General upon establishment of

the committee. It's something that we wholly support, and it is a

series of recommendations that we look forward to with a great sense of

excitement.

Having said that, it seems to me that it would

have been far more appropriate to have waited until that committee made

its report instead of proceeding to quench this government's thirst for

additional revenue. It is a phenomenal thirst when one considers.... I

don't have the figures here in front of me, but I believe we're talking

about $13 million in terms of revenue, as opposed to about $4 million

before. The Attorney-General puts it another way: from 15 percent to 45

percent of court costs.

[ Page 3898 ]

Before

we get back to the Hughes commission, let me pose another question to

the Attorney-General. He has indicated during the course of his remarks

that we are now covering 45 percent of court costs as a consequence of

these fees.

HON. B.R. SMITH : Civil court costs.

MR. SIHOTA : Civil court costs, okay. I appreciate the correction there, because I may not have heard it the first time.

HON. B.R. SMITH : One hundred percent of the other.

MR. SIHOTA :

A hundred percent of the other, that's true, but 45 percent of the

civil court costs. My question to the Attorney-General is: has the

ministry established an upper limit or a percentage that it wishes to

achieve in terms of these fees? Is it the goal of the ministry to

achieve 50, 75 or 100 percent or 45 percent of the costs? Where are we

headed on this?

HON. B.R. SMITH : It's not the first

bite of many, if that's what you mean; it's the whole bite. I think we

should have been doing this on a gradual basis over that period. 1

guess the restraint program put that kind of consideration on hold. I

think that we're certainly content with that breakdown of cost ratio.

Yes,

there most certainly is an appetite for revenue, but in my ministry it

is for the very things that this member talks about so eloquently: to

provide better services for people, to give better attention and

counselling to young people in difficulty, to have supervision for

people on community orders and on probation, and to develop new

programs so that we can work with people to avoid their becoming guests

of Her Majesty in some sterile institution and help them do something

useful.

Absolutely, we have that thirst for revenue to do

those things; I make no apology about it. We do need revenue and we do,

in this government, hope to get more out of the fare box, but I don't

see this as the first of many bites. I think this is a substantial bite

— and it may be that the teeth of the bite can be more evenly filed,

shall I say.

MR. SIHOTA : Earlier on, the

Attorney-General and the member for Prince George North (Mrs. Boone)

were talking about Missouri, and I must confess I don't entirely buy

the line that this will then free up money to spend on much-needed

services elsewhere. Let me deal with that quickly, because we'll deal

with it in greater depth in debate in some of those other areas, such

as youth and probation and so on.

I don't see it that way

at all. What's happened here is that the government has increased

revenue from one side, and there has been only a nominal level of

assistance provided to the other, and there is no correlation between

the two. The Attorney-General is correct: there is an appetite for

funds, because there's a larger game being played here in terms of the

government and its fiscal policies, trying to get a balanced budget by

the year 1990 and to vacuum in as much revenue as it can.

I said at the outset of my comments on this ministry, we would all like

to see more money applied to these other services, and I appreciate

that it's a matter of dollars and cents at the end of the day. But I

don't buy for a moment that all of this money is then going to those

important services. It's not, because in some instances those services

have been cut back; in other instances those services are being

privatized or contracted out; and in other instances some of those

services are being eliminated in their entirety. I don't swallow that

line of reasoning, nor the line of reasoning that says we should have

done it during the restraint period. It seems to me that the whole

purpose of the restraint period was to try to increase revenue and cut

back on expenditures. This is a revenue generation item, and I guess it

could have been done then. Fair enough.

I wish to pursue

another aspect of this. The Attorney-General has pointed out the

exception to the fees. He said that if you are of limited means, there

is a clause in there about having the fees waived. It talks about if an

individual is in indigent circumstances — if I recollect it correctly —

the court may release the payment of the fees to commence, defend or

continue a proceeding in court. It seems to me to be demeaning to have

to then go into chambers in front of a court and argue on an

individual's indigent circumstances and to throw in front of the court

the full breadth of his financial status and also to allow the courts

to begin to define the word "indigent" under these circumstances. It

may help in the health context because all of us are still trying to

figure out what "indigent" meant in

section 4 of the Hospital Act when

we were talking about abortion payments. But that's another issue.

[12:15]

Let's

deal directly with the matter of "indigent," and I want to come at it

from a different point of view. It is abundantly clear, given the

limited criteria for legal aid eligibility — and we'll talk about legal

aid and eligibility later on — that those who apply for legal aid are,

in the full measure of the word, in indigent circumstances. It has come

to my attention that the consequence of these fee increases will have

an effect, needless to say, on the legal aid budget to the tune of

$100,000 to $200,000 — and that's estimated.

Given those

criteria — which I am sure we would both agree are such that you have

to be making somewhere around $800 if you're single and $1,200 if

you're not — in order to get assistance from legal aid, will the

Attorney-General now agree to pass another provision here in his

schedule of fees which would allow for the waiving of those fees for

the commencement and the proceeding of an action if the individual has

been accepted as eligible for legal aid? That would only be fair and in

keeping with the spirit of the provision from which I quoted earlier on.

HON. B.R. SMITH :

First of all, we know that this will have some impact on the legal aid

budget, and we intend to provide for that. But I don't dismiss the

suggestion out of hand. It may be that we should review that, rather

than deal with it as a pass-through. It may be possible to do it that

way and look at it. So I don't dismiss it out of hand. It's an idea

that has some appeal to me, and I certainly am prepared to look at it.

MR. SIHOTA :

Believe me, I don't make that comment lightly, either. But it seems to

be somewhat incongruous that on one hand you are charging for an

increase in fees to people who want access to the court system, and on

the other hand you are collecting that money from the legal aid

apportionment when it is government itself providing that

apportionment. I don't raise it lightly, and it's obvious the Attorney-

[ Page 3899 ]

General

hasn't dismissed it and finds some appeal in it. Why don't we just

agree that it will be done? It's just logical that provision be

provided. So I am going to be a little more forceful on this matter

rather than just simply leave it at the comment that was made.

HON. B.R. SMITH :

I would hope that, having just gently admonished me for raising fees

without sitting down with the bar — who would have, of course, loved

the proposal and been all in favour of it if I had spent a quiet

evening with a brandy in their company.... I should say that I did send

the proposed schedules, as I'm required to do, to both Chief Justices

and the Chief Judge. I would do them a disservice if I said that they

were fond of them; they weren't. They weren't fond of the timing

either. They represented the bar well. I heard that, and I still went

ahead and did it. Having admonished me for that process, I hope that he

would now concede that maybe I should follow some process; that is, I

should talk to the Legal Services Society, which administers legal aid,

and I should look at the best way of doing this administratively.

Sometimes it's easier, rather than setting up a separate system of

bookkeeping, to get the fee and put in the subsidy, rather than have

all the exemption papers each time. I don't know. Maybe that isn't so.

I have to say that the proposal has appeal to me, but I'm going to do

some consultation on it and see if it will work.

MR. SIHOTA :

That's fair enough. I look forward to the outcome of that process, and

I know it will be dealt with seriously. I think I've made it clear that

we feel very strongly about that aspect of it. That's not to concede in

any way my opening comments, with respect to my frustration with this

schedule of fees; but it certainly ought to be looked at. I'm sure

you'll get a fascinating reply from the Legal Services Society, if I

can put it that way.

There are other matters that ought to

be looked at, again with respect to this

schedule of fees. I have made

the comment with respect to custody, although I believe there is an

exception here, if my memory is correct, on the matter of maintenance,

so I don't think we have to deal with that. On family matters a

different approach should be taken.

I'm also very concerned

with respect to provision No. 12, dealing with probate administration

and resealing. The good member our House Leader is sitting here before

me, and he will quickly tell me when these were abolished, but I

remember there was a time when we used to have death taxes in this

province. They were abolished at one time. It was done under the

auspices of Mr. Barrett and the fine, first-class administration that

he provided in this province. If I'm wrong in that, I'm sure the

Attorney-General will correct me and tell me that it was under the

auspices of others.

In any event, this provision is

tantamount to that. I don't have my calculations with me right now; I

left them in my office. When you look at the item, it says $4, and you

don't think too much of it. But it says: " ...for each $1,000 or part

thereof by which the gross value of all the real and personal property

of the deceased situated in the province which passes to the personal

representative exceeds $25,000, whether disclosed to the court before

or after the grant is issued or resealed, the sum of $4." That's $4

from every $1,000 in an estate. In this day and age, it's fair to say

that a $200,000 estate is nothing extraordinary, in that housing prices

are what they are and people sort of accumulate wealth, and with

inflation being what it was over time.

1 say to the

Attorney-General that those provisions.... Maybe it's stretching it to

say that they amount to a death tax, but they come very close to it.

It's quite an expensive proposition. I respect the sensitivity of

$25,000 as being the floor on this, although I would argue that it

should have been somewhat higher. But when you begin to add $4 for

every $1,000 by which the estate increases, you're paying $8,000 for a

$200,000 estate. I'm doing my math quickly in my head here. That is a

lot of money to simply receive a grant of probate. That's an

extraordinary fee that accrues to....

HON. B.R. SMITH : Eight hundred dollars.

Interjections.

MR. SIHOTA :

I grew up during the age of calculators, I guess. I used to know my

times table right up to 12 times 12, and then I went to NDP school, as

the member says, where they told us to add a zero to everything. I

should stop giving all of you ammunition to toss back in my direction,

because I'm sure in some future year someone will pull that quote out

and say: "Sihota, have you learned, or have you not?" In any event, it

just seems to me to be a little excessive under the circumstances. and

I think that that's another matter that ought to be looked at. I know

I've received quite a few comments in relation to that.

course, there's a whole set of, I guess, new fees that weren't there

before, and I have some questions about that. There is, of course, one

overriding concern around all of this, and that is the role of the

Hughes committee. The timing, as the Attorney-General said, was no

mystery, because it occurred prior to budget; but I did think it was an

affront to the commission to have that, and I assume that there would

be no further decisions being made in advance of the Hughes commission

report.

Finally, I want to deal with the effect that these

fees have on 35 percent of the cases that go in front of the courts; 35

percent of all of the cases, as I can best determine from my

information, are motor vehicle personal injury cases — some of which do

not go to the international arbitration centre, by the way — and 90

percent of those cases are situations where there is recovery by the

plaintiff. In those instances, of course, the Insurance Corporation is

obliged to pay those court costs, which, I would argue — and I know the

Minister of Labour (Hon. L. Hanson) is not here — would have an effect

on ICBC rates next year and in subsequent years, but particularly next

year, because you're seeing this jump in court costs from 15 percent to

45 percent. It's another situation of one public entity, the Ministry

of the Attorney-General, charging additional fees and another public

entity, through the Insurance Corporation of B.C. , having to pay the

piper for that amount because it's going to have an implication for its

budget. I'm wondering if the Attorney-General would care to comment and

to advise this House to what extent they considered the relationship

between these fees and the Insurance Corporation of B.C.'s rate

structure.

HON. B.R. SMITH : I guess I'll deal with

the last matter first, because it still remains in my soggy Friday

brain. ICBC costs, I would think, would be minuscularly affected by

this. ICBC legal costs have been of great concern to me over the past

four years, and had we not stepped in and organized, rationalized and

standardized that work, I think the cost of legal fees in ICBC would

have continued to increase, not just arithmetically but geometrically.

[ Page 3900 ]

One

thing we've done is standardize the rates and base them on experience,

and I have to tell the member that I've had criticism about that — that

we're not paying enough in some categories, that the categories are

maybe too rigid. I'm probably going to have to review that.

have greatly brought down the top level, and we've done a good job. Mr.

Ian Jessiman, who worked for me, was a tenacious terrier in getting

hold of those costs and that work, and we did it as well as the other

part of the policy, spreading it around geographically and, within

geographic regions, breaking the policy of having maybe one or two

firms doing all of it and the rest doing none. I think the old policy

of dealing with public work was bad. We now have the work greatly

spread around and not just a few law firms doing well.

So I

would say that ICBC legal costs are in very good shape now compared to

what they would have been if we hadn't done what we did. There may be

some disbursement increase, but of course I know that that member, with

his personal injury files, will be over in Vancouver in alternative

dispute resolution. He's one of the pioneers who's tried to unclog the

justice system and the courts, and he'll be sitting down there.... You

see, the member for Vancouver Centre is nodding, because it's in his

riding and he wants that business too. They'll be down there with

commercial mediators, cutting court times and saving ICBC a lot of

money, and the premiums will go down, thanks to the efforts of the

member. I welcome that.

[12:30]

Let

me just talk for a moment about the level of probate fees based on

value, which is an approach that is not novel to this province but has

been adopted by a number of other provinces. Probably the safest basis

of comparison is to take an estate of $100,000, which is not uncommon

for a moderate estate these days. In the great free enterprise province

of Saskatchewan — groaning under the yoke of previous policies —

they'll pay $606 in probate fees on a $100,000 estate; in Manitoba,

soon to be relieved of policies foreign to the growth of free

enterprise, $437; in Ontario, the pace-setter in spending money in this

country, $500; in British Columbia, under this new tariff, $400. So I

don't think we're out of whack at all with what's going on; we're right

in the middle of the spectrum. We're exempting the very small estate,

under $10,000. For those between $10,000 and $25,000, there'll be a

$100 filing fee. Then when we get over $25,000, they'll pay the $100

filing fee and $4 per $1,000 of value.

There is an

exception to that: the probate fees do not apply to total assets, but

to assets personally held by the deceased. So if the assets include a

house held in joint tenancy or pensions or life insurance for which

there is a designated beneficiary, those are not valued as part of the

deceased's estate for probate fee purposes, but rather pass directly to

the survivor or beneficiary. I think that's very important, because

we're not making a beneficiary or joint tenant dig into their pockets

to meet those fees. So I don't think these are going to present a

great squeeze, hon. member. I think they are a reasonable way of

raising court revenue.

MR. SIHOTA : If I heard the

Attorney-General correctly on those probate fees, he said $400 for B.C.

I thought it would be $500 for a $100,000 estate, because there would

be $100 for the filing.

HON. B.R. SMITH : It's $500; I'm sorry.

MR. SIHOTA : I wanted to correct the Attorney-General's math, because he corrected mine a few minutes ago. So we're even now.

don't know how that changes us in the overall pecking order in relation

to other provinces. The extent to which it has an effect on ICBC rates

remains to be seen. Certainly it's a matter that I'll take up with the

Minister of Labour, who is responsible for the Insurance Corporation,

when we get to his estimates.

I want to terminate my

comments on this matter by making a comment on the effect that this has

on the small practitioner, the young practitioner particularly, who

often attends to the payment of these fees — as do large firms, for

that matter. We always try to be meticulous in the procurement of our

retainers, but seldom, if ever, are we so meticulous as to secure

retainers from 100 percent of our client. Inevitably, large firm or

small, at some time we have a fair number of unbilled disbursements out

there. That gives great anxiety to each of us who is a practitioner.

For those of us who come from larger firms, it gets accountants and

partners asking us all sorts of embarrassing questions. The fact

remains that there is this financial load on firms that is particularly

acute, I submit, with respect to the young practitioner or the small

firm. I think that burden has now been increased as a consequence of

the changes in these fees.

I know that the member for

Kootenay has some comments to make on another matter. Accordingly, I

will bow to her before returning to further debate on these estimates.

MS. EDWARDS :

I wanted to ask the Attorney-General some questions on the victim

assistance program. The basic information on which I have been able to

gather together my questions still depends a whole lot on this

discussion paper which came out in June of 1987 called "The Victim

Assistance Program." I have some information that we got from your

ministry, and I'm trying to put this all together.

I wonder

if I could ask you some questions beginning with this paper, which gave

six particular types of services that you plan to make available

through this program. The first is the toll-free victim information

line which you have recently made an announcement on. I think that line

has just been put into service. There were five others. One is the

police-based victim-witness services. I believe the information I got

was on what are called police-based programs. I will go back a bit.

This was a two-year program when you announced it, and the budget that

you announced for it was $1.8 million to $2 million. I don't know how

that was to be divided by year, so I'm asking you: what is the budget

and how does it compare to last year for the two-year program on

police-based victim-witness services? If you wanted this particular

structure to discuss it, that would be fine with me.

The

witness assistance services that you described in this document, I

assume, are Crown-based programs as they described them to me under the

criminal justice branch. I don't know what is in there of the budget. I

understand from the police-based victim-witness services that there may

be about half a million dollars this year. I don't know about the

witness assistance services. Specialized support services, I assume,

relate to what are now called special assistance programs, to which may

be assigned another half a million. I'm not sure of that. The victim

reparation program, which operates under Corrections, I assume, has

about $200,000 assigned to it. Then the program support services — that

looks like it could be the part that simply refers people to

[ Page 3901 ]

services

in other ministries. But I'm not sure on that, and as I say, in order

to give my questions properly, perhaps you could give me some kind of

structure to work with, with a budget, with an idea of how the two-year

budgeting works on this.

HON. B.R. SMITH : I don't

know that I'll try and do all those things in detail today. I may have

them for you on Monday, and probably I can be a little more exact.

had a two-year program only in this sense. We immediately got funds

committed for two years because it was a new program, and it was new

money. We got $1.7 million for the first year and $2.1 million for the

second year. Depending on when these programs started, grants were

given for what remained in the 1987-88 fiscal year. So it might have

been in your community that, say, arrived in November, and we'd

approved a program that had been applied for. Therefore they would be

getting, say, four months' or five months' funding out of this year.

But then they would get the full $25,000, or whatever the assistance

was, for the fiscal year that we now have estimates for, '88-89. It was

one of the few new programs for which we were able to commit money for

two years,

It is certainly my intention that this is a

permanent program, and it is for that reason that I'll be bringing in

later in this session a victims bill with some framework which will put

this kind of funding on a permanent statutory basis.

This

is the way we started it up. The police-based programs were the ones

that a number of centres opted for, and of course there's a very large

component of money in there for police-based programs. You've mentioned

support services; what I probably should do is find out what you want

and give you some sort of breakdown. I can probably give you a sheet on

Monday, and then we can talk again in here on it, if you want. I think

it's probably better at this stage if I do that, rather than try and

anticipate.

MS. EDWARDS : I think it would be very

useful to have that sort of thing for the discussion, because in some

senses this is a little vague because of the lack of it. However,

perhaps you can tell me.... Maybe you would prefer to put this off till

Monday as well; I'm not too sure. On the police-based programs, I

understand they would be 50 percent funded by municipalities. I'm

curious to know how many municipalities across the province have opted

for this kind of program. In other words, what kind of response have

you had? How many of the communities throughout the province now have

this kind of service, and was it in fact encouraged by the ministry or

was it simply something that if somebody had a choice, they came...?

What has been the experience with this?

I might put that in

a bit of a context, because to go back to your discussion paper again,

when you talked on page 2 about police-based victim-witness

services.... This was the paper distributed at the time you toured the

province, I believe. At that time, you had such programs existing or

being developed in.... You mentioned 22 communities. At that time, nine

of them were on the lower mainland, nine were on Vancouver Island, and

there were only four in the interior. So I'm curious as to how much

response has come to this program from throughout the interior, and

whether or not the distribution is becoming more equitable as time

progresses.

HON. B.R. SMITH : We've got 22 of these

municipal police-based programs at the last count. They're not all

lower mainland or southern Vancouver Island. It's true that we've got

one in Victoria and one in Vancouver, but we also have one in

Cranbrook, one in Campbell River, one in Clearwater, one in Kitimat,

one in Merritt, one in Penticton, one in Port Alberni, one in Port

Coquitlam, and one in Revelstoke and Terrace and Vanderhoof. I have

mentioned most of them.

We've had good response. But there

is no doubt that the UBCM's position is that they would like the

province to pay for 100 percent of the cost of those. There is no doubt

that's their position, but many municipalities have gone into this

program because they also realize that the program, if it works, should

in the long term be preventive and save police costs. I really believe

that it will if it works. I think there has been pretty good general

cooperation. I'll be happy to give you the breakdown as to how we

intend to allocate that $2.1 million and also tell you what the

categories mean.

The emergency line has been in operation,

I think, since November, and it has been very successful. It's

particularly good for dealing with people who don't have these programs

right in their community — people who are isolated and live in parts of

the province where they maybe are an hour away from a policeman. I can

think of places like....

[12:45]

MR. BLENCOE : Oak Bay.

HON. B.R. SMITH :

We don't have need for the same intensity of police services as you do

in James Bay, because we are a community that repeatedly has the lowest

crime rate in Canada. I am very proud of the work that the Oak Bay

police force does in preventive community policing — as with the other

police forces in greater Victoria and the province who do that.

Hon. member, if there is more I can give you here, I will do so, but I will give you a breakdown of the budget.

MS. EDWARDS :

Mr. Minister. because you said we have 22 in place and I noted that

back in June you had 22 in place and some of the names that you’ve

mentioned today are certainly different names than were in here,

perhaps we could have a list of those. I am interested to know how well

they are going, across the province, and also, as I say, to talk about

the necessity for police services in that line. The need may be not so

great in your area, but in our area, where unemployment has been great,

these problems that lead to abuse have increased considerably.

Certainly the victims of that kind of crime are those that we're

talking about. It's related also to the questions that I had yesterday

to the Minister of Social Services and Housing (Hon. Mr. Richmond)

about transition houses and the availability of that kind of thing.

I'm curious to know what kind of response this program has been able to get

from the smaller communities and the interior communities — the ones from which

Victoria is quite remote. I want to know how many programs have been put in

place and what the expectation is for the immediate future.

understand that the program on restitution, compensation and

reconciliation has been a little slower to get going. So I would be

interested to know what your response and experience is with it,

whether there is an attitude of acceptance for this program throughout

the province and whether there has been the time for ministry

employees, who are very busy in Corrections, to get this program going.

Again, I'm curious to know why there is only 10 percent of the budget

on this. What is happening, what is the attitude on it, and where is it

going?

[ Page 3902 ]

for the Crown-based programs — as they were named to me — where the

programs operate out of Crown counsel locations, I was told was that

this was very slow in expanding and that it might exist in locations

where Crown counsel has offices. I don't know how well that is going.

Again, I'm always curious about the interior. I'm also curious about

where the initiative is coming from for these things. Is there a very

accepting attitude in the communities in your experience with this?

What has happened with your ministry, where numbers of employees have

been shrinking? Have they been able to find time to promote these

programs?

I'm particularly interested in the special

assistance programs, which I assume operate through local community

agencies. Again, this is one that has a fairly high percentage of the

funding, I understand. Is that program being well used by community

organizations? Is there more demand than supply? What kind of services

are being served, and what is your experience as to the kind of thing

that can happen when you're giving money to community-based

organizations for these services? Is there an overlap? I would like to

know that about this program. I suspect it would be better to come back

with other questions after Monday, when you've been able to give me a

better idea of how this will work.

HON. B. R. SMITH :

To do justice to the member's good questions, I think it's really

better that I come back. I could list off a whole host of programs that

are geared to the interior and that range from the special support

service programs. The funding that you're looking at was the start-up

funding in some of these areas, and I think you'll be pleased to see

that the funding.... Take specialized support services: we're putting

$600,000 into that this year, not the original start-up figure for last

year. When I give you that, I'm quite happy to go over some of the

programs that we have in the interior.

I might add, my

whole orientation in this program has been the north and the interior.

As a matter of fact, that's where my tour went. I didn't do a tour,

really, of the lower mainland or around this area. I figured they know

about it; they read the urban media, and they've got access to a lot of

police-based facilities here. We have some good services, and the

communities here are much better informed that those services exist.

spent a lot of time in small communities like Atlin, Cassiar, Dease

Lake, Lower Post; places that only see a trav