1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 21, 1985

Afternoon Sitting

[ Page

6195 ]

CONTENTS

Oral Questions

Location of O'Keefe ranch. Mr. MacWilliam –– 6195

Holiday travel planner. Mr. MacWilliam –– 6195

Ms. Sanford

Manning Park sale. Mr. Mitchell –– 6195

Mr. Lockstead

Mr. Passarell

PCB spill at Kennedy substation. Hon. Mr. Pelton –– 6197

Mrs. Wallace

B.C. Transit Amendment Act (No. 2), 1985 (Bill 38). Second reading

Hon. Mrs. McCarthy –– 6198

Mr. Gabelmann –– 6198

Mr. Williams –– 6201

Mr. Skelly –– 6202

Hon. Mrs. McCarthy –– 6203

Division –– 6205

Income Tax Amendment Act, 1985 (Bill 18). Second reading

Hon. Mr. Curtis –– 6205

Mr. Stupich –– 6205

Hon. Mr. Curtis –– 6205

Compensation Stabilization Amendment Act, 1985 (Bill 32). Second reading

Hon. Mr. Curtis., –– 6206

Mr. Gabelmann –– 6206

Mr. Stupich –– 6207

Hon. Mr. Curtis –– 6208

Division –– 6208

Securities Act (Bill 37). Second reading

Hon. Mr. Hewitt –– 6208

Mr. Howard –– 6209

Mr. Ree –– 6210

Hon. Mr. Hewitt –– 6210

Income Tax (Small Business Employment Tax Credit) Amendment Act, 1985 (Bill 5). Second reading

Hon. Mr. Curtis –– 6211

Mr. Stupich –– 6212

Mr. Lea –– 6213

Mr. Ree –– 6214

Mr. MacWilliam –– 6214

Mr. R. Fraser –– 6214

Mr. Veitch –– 6215

Hon. Mr. Hewitt –– 6215

Mr. Michael –– 6216

Hon. Mr. Phillips –– 6217

Mr. Howard –– 6218

Hon. Mr. Curtis –– 6218

TUESDAY, MAY 21, 1985

The House met at 2:06 p.m.

[Mr. Strachan in the chair.]

Prayers.

MR. VEITCH: Mr. Speaker, in your gallery this afternoon is

Mr. Ross Carter, the director of college resources for Vancouver

Community College, and Mr. Gerry Sylvester, the dean of administrative

and student services for VCC. I'd ask the House to bid them welcome.

HON. MR. HEWITT: In the gallery today we have from the city

of Penticton Alderperson Joanne Grimaldi and Alderman Peter Rawkins,

along with Dr. Higgs from the White Lake observatory. I'd ask the House

to welcome them.

HON. MR. PELTON: In the gallery this afternoon are Mr. and

Mrs. William Glasson from my favourite place, the corporation of the

district of Maple Ridge. With them are Mr. and Mrs. David Owen, who are

visiting from Exmouth, Devon, England. I would ask the House to make

them welcome, please.

MR. REID: Mr. Speaker, in your gallery today are two lovely

ladies. They're over here helping the economy of Victoria. One of them

is my daughter, Laurie, and the other is also an employee of Woodward's

in Surrey, Janette Kristensen. Would the House bid them welcome, please.

HON. MR. GARDOM: In the gallery today is a very good friend

of this assembly, the former MLA for Shuswap. Joined with him is his

charming wife. I'd ask all members to pay a very cordial welcome to Mr.

and Mrs. Len Bawtree.

MR. R. FRASER: In the galleries today are students from

Killarney Secondary School, here with their teacher Mr. Brown. Would

the House please make them welcome.

Oral Questions

LOCATION OF O'KEEFE RANCH

MR. MacWILLIAM: Mr. Speaker, several weeks ago I questioned

the Minister of Tourism about a Tourism B.C. ad for a national magazine

which locates the O'Keefe ranch north of Kelowna, rather than in its

correct location north of Vernon. In view of the fact that this ad has

subsequently appeared several times in the same magazine, would the

minister advise why he has not made this correction?

HON. MR. RICHMOND: As I pointed out to the member at the

time, the ad is not incorrect. Perhaps it could have been more precise,

and I did take the trouble to point that out to those people who placed

the advertisement.

HOLIDAY TRAVEL PLANNER

MR. MacWILLIAM: Have you decided to move the ranch? I'm sure the

people of Okanagan North will be pleased to hear about that.

A supplementary, Mr. Speaker, to the same minister. More recently

the Minister of Tourism has circulated a glossy magazine-style insert

in all of the province's daily newspapers, at a cost of hundreds of

thousands of dollars. One of the maps in this publication shows the

town of Needles as part of a regional holiday itinerary. Is the

minister aware that the town of Needles was in fact flooded out when

the Arrow Lakes were raised over 20 years ago today? If the minister

does plan on visiting the town of Needles, may I suggest that he take

his scuba gear?

DEPUTY SPEAKER: There may be a question there.

HON. MR. RICHMOND: I doubt very much, Mr. Speaker, if there

was a question there, but I would like to let that member know that our

travel planner, of which we have sent out 4.2 million copies in the

northwest, has received rave reviews.

MS. SANFORD: My question is to the same minister. The

publication that my colleague referred to does not receive rave reviews

from the people on Vancouver Island, because for some reason the

publication fails to mention passenger service on the E&N Railway.

It has neglected the railway entirely. I am wondering why this has

happened, and if the minister could make some corrections in that area

as well.

HON. MR. RICHMOND: Yes, Mr. Speaker, I would love to answer

that. Contrary to what the member said, if she looked in the Sunday

edition, I believe it was, of the Times-Colonist , it does receive rave reviews on Vancouver Island.

I should also like to point out that all nine regions and regional

directors and the various industry groups in the province had input

into this travel planner. It was not done in isolation. So all of the

blame, if there are omissions — and there are a few, Mr. Speaker; there

will always be some — could be equally spread through all nine regions

of the province, including Vancouver Island.

MS. SANFORD: In view of the fact that everyone seems to have

had input into this particular publication, I'm wondering why the same

paper also neglects to mention B.C. Rail. There is no mention

whatsoever of any kind of rail transportation on Vancouver Island or on

B.C. Rail. I'm just wondering why that has come about.

MANNING PARK SALE

MR. MITCHELL: My question is to the Minister of Lands, Parks

and Housing. On May 2 and again on May 7 I asked the minister if the

$500,000 for the $20 million worth of Manning Park assets had been

paid. I haven't received an answer yet.

HON. MR. BRUMMET: Yes, Mr. Speaker, the amount was $500,000,

and that amount has been received by the ministry. The member's figure

about the $20 million of assets is incorrect.

MR. MITCHELL: A supplementary. When was the final payment made, and was it a total of $500,000?

[2:15]

[ Page 6196 ]

HON. MR. BRUMMET: Yes, I have been informed that at the time of the signing of the agreement, the $500,000 was paid.

MR. LOCKSTEAD: Mr. Speaker, I have a question to the same

minister in connection with the sale of assets at Manning Park. Did the

government purchase a brand-new generator costing some $350,000 just

before transferring the assets to the private consortium?

HON. MR. BRUMMET: No, Mr. Speaker, not just before — the year before, in order to keep the operation going before we got the agreement made.

MR. LOCKSTEAD: Mr. Speaker, a $350,000 generator and you sold the whole park for half a million dollars. Ridiculous!

My next question, Mr. Speaker: did the government undertake a

thorough renovation of the Manning Park ski lodge just before

transferring the assets to the private consortium?

HON. MR. BRUMMET: No, Mr. Speaker. First of all, may I

correct the impression the member is trying to leave that we sold the

park. We felt that the ministry should get out....

Interjections.

DEPUTY SPEAKER: Hon. members, question period time is precious.

HON. MR. BRUMMET: Perhaps the member is not aware that there

was an ongoing maintenance program at all times — nothing unusual in

that. We did not give away the park; we did not sell the park. We felt

that we should get out of the ski and motel business as a government.

That motel and ski business, for the member's information, was costing

the taxpayers of this province a loss of $500,000 per year. In turning

that over to the operation, we now get a percentage of the gross

revenues, and the taxpayers are much better off, the people are still

served, and we still own the park.

MR. LOCKSTEAD: Mr. Speaker, we have at our disposal

information indicating that the government, at taxpayers' expense,

renovated that lodge prior to that sale. However, I'd like to know from

the minister — I know he won't have this information at hand — the cost

of that renovation of the lodge before the government sold it to their

friends at this ridiculously low price.

I have a new question for the minister. Did the government use

taxpayers' money to overhaul the two large ski lifts at Manning Park

before transferring the assets of those ski lifts to the private

consortium? And how much did that cost the taxpayers?

HON. MR. BRUMMET: Well, contrary to what the member said, we

did not sell that to friends. It was put out to tender, and the

successful tenderer got the property.

The other thing about fixing the ski lifts. The member may recall

that sometime before that there was an accident; that accident was

investigated by the Ministry of Transportation and Highways, and the

recommendation was that something should be done to fix that lift

before it was continued in operation. It was continued in operation

under our jurisdiction, so it made sense for us to fix it. We did not

fix it to sell it. We fixed it to operate it, and then we decided,

because that operation was costing the taxpayers so much money, that we

should get rid of it and let somebody else operate it.

MR. LOCKSTEAD: To clarify my question to the minister: what

was the cost to the taxpayers of this province of overhauling those ski

lifts? I expect it was well in excess of $1 million. I don't disagree

with the minister that the thing should have.... But we spent

multimillions of taxpayers' dollars on renovations on that park, and

then we gave it away.

HON. MR. BRUMMET: I'm not sure, Mr. Speaker, whether the

member had a question. When he asked how much it cost.... I don't have

the exact figure, but I can tell the member that it was costing us far

too much; it was costing the taxpayers of this province far too much to

run a ski hill. That's why we decided to turn it over to the private

sector.

MR. PASSARELL: A question to the Minister of Transportation

and Highways. Part of the reason for selling Manning Park assets was to

reduce government spending. Has the government agreed to gazetting the

roads to the property, causing the taxpayer rather than the consortium

to be responsible for maintaining the roads?

HON. A. FRASER: I'll have to look into the member's question and come back with an answer.

MR. MITCHELL: A question to the Minister of Lands, Parks and

Housing in line with the question I asked him on May 2. One of the

directors of the Gibson Pass resort, a Mr. Ralph Rossi — who was a

member of the Yale-Lillooet Social Credit association — was a member of

the group that purchased this $20 million asset. I ask again: is there

anything in that agreement for sale or lease which prevents Mr. Rossi

and his company from flipping the property or any parts of the property

without the consent of the government?

HON. MR. BRUMMET: No, any transfer.... It is written right

into the agreement that there must be the consent of the minister

before any transfer can be made.

MR. MITCHELL: Has there been any application to flip or

divide any of the assets from the original agreement? Has any

application been made to the minister, and what will his position be if

this application has been made?

DEPUTY SPEAKER: Part of the question is in order.

HON. MR. BRUMMET: I don't know whether part of the

insinuation was about the member being a Socred. Well, I can tell you

that in the ministry when somebody applies for a piece of land or when

somebody bids on a contract, we do not decide whether or not

politically they are eligible. It depends on whether financially,

economically and in any way they are eligible. We have even been known

to donate some land or give free Crown grants to municipalities in NDP

ridings. So that has no bearing on his affiliation. And neither will

this ministry, to satisfy the NDP, ever turn around and refuse

applications from people simply because they have been Socreds. I think

they have the right like anyone else in this province to bid on any

tender.

[ Page

6197 ]

So to my knowledge there.... I don't know what discussions are going

on in the private sector between operators, between owners. I can tell

you this: if any deal is in the making, then it must come to the

minister for approval before anything is done.

MR. MITCHELL: As the minister in charge of protecting a $20

million asset of the citizens of British Columbia, does he look at the

price that was asked for these assets? Maybe he is correct in that you

don't look at the fact he was a member of the Yale-Lillooet Social

Credit Constituency Association, but there is still the fact that $20

million of our assets were sold for half a million dollars. I say to

the minister that it didn't matter who made the application; it is his

responsibility to protect the public's tax assets, and what did he do?

In reviewing the total assets, the millions of dollars that were spent

in renewing this equipment.... When he accepted that final bid, that

responsibility left with that minister, Mr. Speaker; it left with him.

He could refuse the final offer if it was too low. I ask what he did to

protect our assets.

HON. MR. BRUMMET: Obviously the member, when he has his

questions written, will not modify them even if his figures are

incorrect. I told you, you were very incorrect on the $20 million

figure. There was one appraisal done that suggested that the total

replacement value of all those facilities was around the $12 million

mark. So that is a fair....

Interjections.

HON. MR. BRUMMET: The total replacement value was in that

amount. However, the value is really determined by what someone is

willing to pay for it. And that was in open tender, not by just one

person.

The other thing, of course, that the member seems to neglect to pay

attention to is that those assets.... Whatever their replacement value,

it was a case of what it was making for the province and what it was

losing for the province. So to retain those when no one was willing to

pay for them, just through stubbornness.... To insist on costing the

taxpayers of this province at least $500,000 — that's a half a million

dollars per year loss on those operations — in order to keep the

government in the ski and hotel business, I would suggest, was a

ridiculous assumption. Therefore we looked at all aspects of it, and

the repair bills that were mounting, as the members have indicated....

We did not need to be in that. We didn't want to see it closed, so we

gave the private sector an opportunity to run it. We are saving all of

those operating costs and all of the future maintenance costs in a ski

hill operation. The park remains under the jurisdiction of our ministry.

PCB SPILL AT KENNEDY SUBSTATION

HON. MR. PELTON: Mr. Speaker, I would ask leave to respond to

a question that was placed by the hon. member for Cowichan-Malahat

(Mrs. Wallace) during the course of my estimates.

Leave granted.

HON. MR. PELTON: The question related to the PCB spill in the B.C. Hydro

storage area at Kennedy in Mackenzie, just about 120 miles north of Prince George.

The B.C. Hydro and Power Authority stores some 14,000 unused electrical capacitors

at the Kennedy substation. On May 7, 1985, on a routine inspection of the site,

ministry staff noted an oily substance leaking from unused electrical equipment

in the storage yard. B.C. Hydro staff were immediately notified, and steps were

taken to stop the escape of this substance into adjacent Colbourne Creek, which

flows into the Parsnip River. Soil samples were taken by the ministry from the

storage area and drainage ditches, and were found to contain unacceptable concentrations

of PCBs. A soil sample from the bed of Colbourne Creek contained traces of PCB,

while preliminary tests of downstream water samples indicated PCB concentrations

below the detection limit of the tests. These tests were taken at parts per

million. When you have concentrations below the detection level, you just get

a blip on this machine; you don't get a reading which you can record. However,

subsequent to that, more sensitive tests detected PCB concentrations — these

were parts per billion — which could pose a long-term hazard to humans and to

fish life. As a result, the public have been advised not to drink the waters

of Colbourne Creek and the Parsnip River, and not to eat fish caught in these

streams.

At the request of my ministry, B.C. Hydro has agreed to take the

following steps immediately; and they are already on site with staff of

the Ministry of Environment. They're going to inspect the stored

electrical equipment and place any leaking units in appropriate

containers. They will clean out the contaminated soil from the drainage

ditches. They will cover the remaining stored equipment and provide the

ministry with an inventory of their unused electrical equipment

containing PCBs located in the province. Further, B.C. Hydro has agreed

to do the following by October of this year. They are going to

construct a suitable covered storage facility at the Kennedy substation

and place the unused electrical equipment in that storage facility, and

remove all contaminated soil from the area and place it in suitable

containers inside the storage facility. They will take low-water

sediment samples in Colbourne Creek and Parsnip River, which we will

monitor. They will also determine the concentration of PCBs in the

flesh of fish in downstream watercourses; we will also be monitoring

this. And we will continue to monitor the situation at the Kennedy

substation.

[2:30]

MRS. WALLACE: I thank the minister for the action he has

taken and for the message that he has brought to the Legislature. But I

am concerned that this has been allowed to happen. This is not a new

occurrence; this is not something that has just happened overnight.

This is something that has been in process for some time.

Hydro was requested — in fact, ordered — to remove those capacitors

several years ago, and it didn't happen. Why didn't it happen, Mr.

Speaker? It didn't happen because Hydro persuaded two ministers of the

Crown to let those capacitors remain there. It persuaded two ministers

of the Crown to agree to let those capacitors be stored just inside a

wire fence, in the open air covered with snow several months of the

year, and to remain there until some facility for destruction was

available to them in Alberta. It is absolutely unfair to the people of

Mackenzie and to the people of British Columbia to allow such a

situation to continue and to allow those pieces of equipment to stay

there causing the kind of pollution that has now occurred.

[ Page 6198 ]

We all know that PCBs are harmful, even in minute quantities. To

allow that to continue over a period of years is absolutely foolish. It

is absolutely immoral. For the government and this cabinet to agree to

go along with that for the length of time that it has is.... Well, I'm

just shocked that this has happened. Now we have the proof.

What we need in this province is a hazardous waste disposal centre,

and it hasn't happened. The former minister bungled it, and at this

point this minister has done nothing. If we don't move now, we're going

to have more and more of these spills and more and more people

subjected to the poisonous effects of PCBs.

Orders of the Day

HON. MR. NIELSEN: Second reading of Bill 38, Mr. Speaker.

B.C. TRANSIT AMENDMENT ACT (NO. 2), 1985

HON. MRS. McCARTHY: In introducing second reading of this

bill, I would like to draw the attention of the House to the fact that

this legislation will fulfil a commitment made by this government in

September 1984. At that time, I announced the government's intention to

address the administration and delivery of transit services to the

people of British Columbia by correcting an organizational structure

which, while previously adequate for the administration of the bus

services, was no longer appropriate to meet the requirements of a

dramatically expanded system with the arrival of the new light rapid

transit.

It's important to point out that this is not change for the sake of

change, Mr. Speaker. I am well aware that modifying the structure of an

organization does not automatically create efficiency. In coming to

terms with a number of outstanding issues, however, it was obvious that

concurrent with steps that were required in such areas as labour

relations, ALRT funding and future planning, a single unified structure

was required now more than ever before. With this legislation, we will

see planning, policy, financing and operations all under a single board

of directors for the first time. The board will be composed of civic

officials, community leaders and representatives of the public at

large. This new board of directors will work closely with the regional

transit commissions in Vancouver and Victoria and with the more than 30

operating companies serving the smaller communities throughout the

length and breadth of this province.

There are many challenges ahead for this new board. In the short

term they will have to address the needs of the millions of visitors

who will come initially to the lower mainland and spread eventually

throughout British Columbia in response to the attractions of Expo 86.

In the mid-term they will be charged with ensuring that the ALRT

fulfils its exciting potential for the people of the lower mainland in

making their lives easier by reducing their travelling times and giving

them greater mobility than ever before.

In the long-term the new British Columbia Transit board must have

the foresight to look beyond the year 2000, and we must all keep in

mind that a brand new century awaits us only 15 years from now. It will

be their role to advise the government on the most efficient and

socially and environmentally desirable ways of meeting the challenges

of the year 2000 and beyond.

While much of their attention will be focused on the lower mainland,

it will be a clear part of their mandate to apply that same

administrative and creative energy to today's problems and tomorrow's

potential for every community in this province now served by

provincially funded transit systems, and to continue to assess smaller

communities who will face that need in the future through their own

economic and social growth.

B.C. Transit and Metro Transit have long since established a

reputation among other operating companies in North America which gives

them a very prominent place in the record book. The greater Vancouver

system serves a wider geographic region than any other major city in

Canada. The extensive provincial fleet also services a greater

geography than any other system in North America, and the financial

commitment to transit by this government is greater than that of any

other provincial jurisdiction.

Since my announcement in September 1984 regarding our commitment to

unify and simplify the system, I'm very pleased to report to this House

that we have overcome several major obstacles on the road toward our

objectives. We have seen through negotiation the conclusion of a

four-year labour agreement between the operating committee and its

almost 2,000 bus drivers and mechanics in a contract which I believe to

be the basis for a new cooperative labour-management partnership. These

operators today enjoy the highest standard of wages and benefits in the

country. They are provided with a very high standard of training and

modern, efficient equipment.

We have also, since September, seen agreement reached on a funding

formula for the $854 million ALRT system. The financial arrangement

received the full and enthusiastic support of the members of the

greater Vancouver Transit Commission as a fair and equitable solution

which would not place an unreasonable burden upon the taxpayers of

greater Vancouver or the taxpayers of the rest of the province. With

some seven months still to go before the ALRT meets its January '86

commitment to enter service in trial runs and previews, we have

demonstrated the ALRT to many thousands of British Columbians in speed

and in comfort. This is truly a remarkable system designed and built by

Canadian technology and applied with British Columbia skill and

ingenuity, which will be on time and on budget, a system in which every

British Columbian can and will take an immense amount of pride.

Mr. Speaker, in meeting the challenges of Expo and the planning for

tomorrow, B.C. Transit, to achieve success, will require the support of

every British Columbian, the determination of its new board, its

revised management structure and the 3,000 men and women who make the

system go. This is a people-responsive service. As with every private

enterprise company and with every Crown corporation in existence today,

it must at the same time recognize the financial constraints and act at

all times in a way which will not place an unfair burden on the

taxpayers of British Columbia.

But within those constraints, I am confident that the success will

go on and British Columbia, through B.C. Transit, will continue to set

the pace for other transit systems in Canada and, I may say,

internationally.

So at this time I move that the bill be now read a second time.

MR. GABELMANN: Mr. Speaker, this is an outrageous bill and the minister's comments were equally outrageous in

[ Page

6199 ]

failing to take into any consideration what she is doing with this legislation.

Interjection.

MR. GABELMANN: She didn't talk about the bill at all, Mr. Speaker.

What this bill does is wipe out a contract that was signed between

two responsible parties in British Columbia, a contract that was

reached with full agreement on both sides after a long and protracted

and difficult set of negotiations. The bill wipes out that contract in

some of its major elements. Mr. Speaker, who in this province can trust

a government that, having entered into an agreement, later comes to the

Legislature to wipe out that agreement? Where is the sanctity of a

contract in this province when this kind of legislation can be

introduced, wiping out, as I said, a freely reached agreement?

Mr. Speaker, I'm not going to deal — others will — with the question

of the consolidation which is an element of this legislation. I want to

deal with those sections of this bill that do what this Legislature has

collective agreement; in fact, worse than that, to abolish terms and

conditions of a collective agreement when the government doesn't like

them.

Is this a free society, Mr. Speaker, where people can enter into

contracts freely and democratically and expect to have them honoured?

Or is this a society where a government will determine that it doesn't

pen will wipe them out? I didn't think we lived in that kind of

society, and I don't think most British Columbians did either.

This is the worst kind of labour legislation, masked in nice

rhetoric about pretty transit. I don't think, Mr. Speaker, that members

on that side of the House understand what the minister has done with

this bill.

Last year, in the lower mainland and lower Vancouver Island, people

spent difficult months, first of all in what was described as an

un-strike and then later in a lockout, attempting to reach a collective

agreement. This Legislature, following several months without bus

service, ordered an end to the dispute. Fortunately — at least at the

time fortunately — the parties were able to reach a collective

agreement without third-party intervention, which is the way it should

be. At the bargaining table was an indication that legislation would be

coming in to deal with the fact of ALRT — dealing with management

rights clauses in that respect. The parties to the agreement understood

that.

That's not what we have here. We have that and much more. We have

here some of the most outrageous intervention in a collective agreement

that I think has ever existed in this province. I doubt that anyone can

cite an instance, in the modern history of labour relations in British

Columbia, where anything like this has ever been done, where an

agreement was reached under certain understandings, and then those

understandings were broken.

[2:45]

Let me say that it's more than questions of contract. There are

other questions that need to be looked at. A very basic principle in

the workplace is that when workers are involved in the decision-making

and have a say in how work will take place, work is done more

effectively, more efficiently, and productivity is increased. When you

involve people in decisions that affect their lives, they take some

pride in the conclusions, even though they may not always agree with

the conclusions. But when they have a part and a role to play in

reaching those kinds of conclusions, they work more effectively, more

efficiently and more happily.

What this legislation does is to take away the fundamental questions

that govern the livelihoods and the daily working lives of people who

operate buses and trolleys in this province. Scheduling on the bus

system and questions of part-time work are difficult — no question

whatsoever — but they are properly and best left to negotiation between

the parties. This Legislature does not have a role in determining that

all of those rights should be management rights. Yet this bill does

just that.

section 6.1(7), Mr. Speaker, the legislation gives the new board

the right to contract out work, contrary to the collective agreement

that was reached between the parties. If the employer didn't like that

particular part of the collective agreement, why did he sign it? Did

the employer sign that part of the collective agreement knowing that

that was a false signature, and that in fact the collective agreement

would be made null and void some months later by this Legislature? I

certainly would like the answer to that question when the minister

responds, when she's able to tell us.

Mr. Speaker,

section 6.2 of the legislation says that "the

employment, complement and organization of employees necessary to carry

on the business and operations of the authority, and the work methods

and procedures applicable in the provision of transit services" are the

exclusive right of the employer, "and any provision to the contrary in

a collective agreement by which the authority is bound is of no effect."

We're dealing with a difficult industry here, because for the most

part the busy times are at two different parts of the day. If you were

to work right through, from the beginning of the busy time in the

morning until the end of the busy time in the afternoon, it would be a

long day; so unusual procedures have to be developed to make sure that

the provision of services is carried out during the rush hours and the

busy times. As a result, in some cases workers are in effect working

12- and 14-hour days, even though they don't get paid for a number of

hours in the middle of their work day. It's bad enough when workers are

asked to work in those kinds of difficult and unusual circumstances,

but when they have no say whatsoever through their collective agreement

in determining how that scheduling will take place, it becomes

reprehensible. It becomes impossible.

The minister said at one point — I'm paraphrasing — that the

four-year labour agreement reached earlier will lead to cooperation and

partnership. There is no longer a collective agreement reached. A

collective agreement is one that is reached collectively by both

parties bargaining. That didn't happen, and the major frustrations —

apart from having to drive in city traffic — of an unusual and

difficult work

schedule will now be made worse by the people involved

in performing that work

schedule having no say whatsoever in

determining how it's to be performed. Doesn't that strike the

government as a bit counterproductive in terms of having a happy and

efficient workforce and a "harmonious relationship" in the transit

services in our province? It doesn't work that way in real life, Mr.

Speaker.

The minister also said that the whole mess will be on time and on

budget. Mussolini's great claim to fame was that he too would make the

trains run on time. You don't do those

[ Page 6200 ]

kinds of things in a free and democratic society.

I'm not suggesting that the minister has yet gone as far as he went,

but she's sure on that track with this kind of legislation: taking away

a freely bargained collective agreement and, as I pointed out, in

section 6.2 denying the people who work for her and for us and for

every person in this province the right to participate in discussions

about their work schedule.

There's another

section in this bill that I find reprehensible.

Whenever this government is told by the courts, or by an organization

that has the power of the courts in this province, that what they're

doing is wrong and immoral and not to be done, they quickly come in

with a piece of legislation to circumvent the decision of the courts.

Under the Labour Code, the Labour Relations Board in this province is

charged with managing, governing and being the court for labour

relations. It has a number of purposes. Among the most important of

their objectives is to ensure that labour relations are harmonious in

this province. One of things they did in this particular situation was

to declare there was a single employer in transit services in this

province. That struck most of us who watch from the sidelines as quite

reasonable. In effect, the employer was the government through the

board that it established, which I think under the old legislation was

a little more representative of the communities than it is now.

Nevertheless, the Labour Relations Board said there was a single

employer. I think any person looking at transit services in this

province would say: "Yes, there is a single employer; it's the

government through a particular agency." This bill seeks to fly in the

face of that reasonable and reasoned judgment of the Labour Relations

Board and in effect say, in 6.3, as the heading says, that the

authority is not treated as one employer. So while we have one

employer, this Legislature, if this bill passes, says it's not one

employer. That's not how you achieve harmonious and productive labour

relations in the province: by flying in the face of all of the

principles and traditions that say if an employer is an employer, he's

the employer. There are very good reasons for the Labour Relations

Board making the kind of decision it did.

This

section says: "For the purposes of the Labour Code, the

authority shall not be treated as one employer with any corporation,

individual, firm, syndicate or association with whom it contracts for

the provision of transit services under this Act." Mr. Speaker, under

that

section the government could declare that the No. 9 bus running

across Broadway has its own separate agreement and the government is an

employer for that bus and that bus alone. That's the extent. I'm not

suggesting that's what the government intends by this section, but this

section would allow that.

[Mr. Ree in the chair.]

By using these various sections, the government can contract out any

future services that might be put on stream, which as I read it

includes new bus routes. They can declare that every or any part of the

transit services have separate employers.

Mr. Speaker, we are being asked to vote for legislation that says

black is white, that says night is day. We're being asked to vote for

legislation that says there isn't one employer in the delivery of

transit in this province. Every school kid and every person who pays

any attention to current events in British Columbia would know that

there is one employer. Yet the government is asking us to vote for

legislation saying no, there isn't one employer, there are all kinds of

employers. The fact that these various different employers are all the

same employer doesn't seem to sink in.

What the government wants to do in this particular legislation is to

deny the civility that can come from properly managed labour relations,

governed by a Labour Relations Board in this province. Now that is not

going to lead to the kind of conclusions the government wants, for one

thing. But it will also lead, in my view, to poisoned labour relations

in every aspect of our society. Which group of employees in this

province will now know that what they bargain at the bargaining table

with the employer is actually what they're going to get? No one will.

Every person who goes to a bargaining table, and this includes both

sides, will now know that there is a knife — a blackout pen — hanging

over that collective agreement that might be freely and happily

reached. They will now know that this Legislature might be called upon

to wipe out freely agreed upon provisions in a collective agreement.

Mr. Speaker, so much has happened in this province in the last few

years in terms of a denial of basic democratic rights that we become a

little bit used to this kind of thing, and people have marched

themselves out; people have given up trying to persuade the government

by reasonable methods that what they're doing violates some very basic

principles in our democratic society.

I said the other day in reference to the B.C. Rail legislation that

the International Labour Organization covenant, which we signed — this

is a United Nations organization — was violated. It is again here.

Canada has not been a member of a community of nations where contracts

between individuals or between groups can freely be wiped out. We

expect those kinds of things to happen in the Soviet Union, Chile,

South Africa or East Germany. That's where we expect that kind of

government intervention and denial of basic rights.

Mr. Speaker, if an NDP government had ever brought in legislation

which made null and void a contract freely reached by both parties, we

would have heard speeches around this province by members of Social

Credit like you've never heard before, talking about the dark days of

dictatorship and no doubt many other nice slogans. But you know, if

Social Credit does it it's all right somehow.

[3:00]

What's to stop a government that once has started on this slippery

slope from saying to any groups of people in any part of our society:

"No, we don't like the agreement you just signed. We're going to wipe

it out. You've just agreed to sell your lumber for $140 a unit, and we

think it should be $150, so we're wiping out your contract with the

purchaser on theAtlantic seaboard." Outrageous, isn't it? No one would even think

twice that the government might be tempted to wipe out a contract between a

seller and a purchaser of goods. Why then is it that the contract can be wiped

out when it's between a supplier and a seller of services? Why is somehow

a contract sacrosanct and not to be violated when it relates to goods or capital,

but when it comes to the rights of individuals — people, whom we're

supposed to be governing — somehow it's all right. There's something

pretty sick about a society that isn't outraged and alarmed by that kind

of trampling of democratic rights.

I don't blame the society, Mr. Speaker. The society has been so

conditioned to these kinds of activities by this government that it no

longer can react, because it happens with such astonishing rapidity and

frequency. Every week now we

[ Page 6201 ]

get this kind of legislation that no other

government in this country introduces. No other government in this

country even contemplates introducing it.

I'll conclude by saying that I am outraged that a government would

go to the bargaining table and sign a collective agreement knowing full

well that it would use its legislative might to strip from that

collective agreement provisions which it freely agreed to at the

bargaining table. That is outrageous, it is shameful, and it is

reminiscent of societies with which I want nothing whatsoever to do.

MR. WILLIAMS: The minister gets up and reads the statement

that was prepared for her to read with second reading. It's become

typical of what we've got from this minister in this session. It was

abundantly clear when we were dealing with her estimates that she no

longer has a hands-on operation, no longer is really involved in the

managing of her departments and agencies as she should be. You ask her

how much it's going to change the budget, throwing ALRT into the lower

mainland system — will it double it? — and she doesn't have the answer.

She actually has to check with officials. She has to rifle through

notes, and then she can tell you: "Yes, it will pretty well double the

costs of the system in the coming year when ALRT is plugged into the

rest of the transit system."

That and other aspects of her department that have been quizzed in

the last few weeks indicate to us that one of the few ministers of this

administration that used to have a hands-on operation no longer does.

The purple prose that we got this afternoon is just one more indication

of that situation. The kind of stuff we just heard. To the year 2000

and beyond. Great purple prose. Somebody is hired in the back room to

turn out that kind of nonsense. "The permanent place in the record

book....blah, blah, blah, blah."

As the member for North Island (Mr. Gabelmann) indicated, this is

primarily legislation that deals with the trade unions and the workers

within Metro Transit, within the system. It's legislation that reneges

on agreements that were reached between these parties after a long and

miserable dispute last year, a dispute that cost the people of the city

of Vancouver, and downtown merchants, countless millions, but saved

this administration a few million, so they let it go on. It's just an

indication that the minister isn't on top of it all. She said it's on

time and on budget. Which time? Which budget? This is what I would ask.

Check with the earlier minister, Mr. Vander Zalm. His budget was a

quarter of this budget. So it's four times the budget, Madam Minister.

Let's sort it out.

She says, through her hired hack in the back room turning out the

purple prose for today: "It's people-responsive." Well, you look at the

legislation and, clearly, workers — the bus drivers and the rest —

aren't people. If it were people-responsive legislation, you'd live

with the terms of the previous agreement that allowed some input, some

participation on the part of the employees within the system. If you

attend any sessions at all where the representatives of the transit

union are, or you listen to bus drivers, you develop some appreciation

for the complexity of the system, and the complexity of scheduling. It

isn't just a simple computer operation. It isn't just a top-down

management function, the whole business of making a transit system in a

metropolitan area work. But to read this legislation, that's what you

would think it was. It's a top-down orientation from beginning to end.

No system will respond properly if it's designed that way. The whole

problem in North America in the last generation or two has been a

continuing laying on of middle and senior management to monitor

workers, rather than giving workers more authority, more independence

to be productive on their own. All of this is geared in the opposite

direction. The Americans are finally wising up to the problem of excess

middle management. There's no indication here at all that we're in the

learning stream with the Americans. We're always a generation or two

behind.

Consultation. Even when we had the old system that was supposed to

involve more representatives of the Greater Vancouver Regional District

— and you're changing that — you still made arbitrary decisions on your

own anyway. The extension to Surrey was a unilateral decision by the

provincial government. There was no participation or decision-making

with the GVRD in terms of the priorities or the alternatives or what

might be better; it was a unilateral decision. Yet the costs are going

to be laid on the Greater Vancouver Regional District regardless. So

that will go ahead anyway. The pattern is there.

What we have here is an intervening legislative solution to labour

problems. It establishes far-reaching management rights beyond what is

reasonable. It provides new authority for contracting out on a

significant scale. It gives a lot of powers to management. Presumably

Mr. Hodgson will be the new chief executive officer with respect to

this operation. Mr. Hodgson has a respectable background in labour

relations and has been able to resolve disputes in areas that have been

difficult and have not been readily resolved in the past. He has a good

kind of background. He doesn't need these kinds of tools in order to

make the system work successfully. That's what's strange. I think what

we have here is a middle-management product that the minister has

accepted and coated over with the purple prose by some backroom hack.

It really doesn't reflect what would be reasonable in the circumstances.

When there has been consultation between the workers at Metro

Transit and management in terms of working conditions, and when there

has been consultation, as there was under the previous agreement.... On

the two occasions that that occurred, when there was full consultation

between the workers and management, they were resolved satisfactorily.

The history, even in more difficult times, is relatively good. The

problem in the last year was when management wanted to remove that

consultative process; when that was finally resolved, again with the

intervention of Mr. Hodgson, who understood the reasonableness of the

proposition, then the government comes along and removes it.

They're not really listening to the competent people that they have

available to them. When it comes to dealing with municipalities under

this legislation, if the municipalities don't agree in the end: "Again,

off with their heads." It's the school-board syndrome operating again:

if the municipalities and elected people won't reach agreements with

the Transit authority, then there will be a binding agreement laid on

them, courtesy of Grace and the provincial government. That is hardly

the way to deal with elected representatives.

What we've got here is the growing pattern of arrogance on the part

of a government that is determined to have its own way, no matter what.

It's determined to have its own way with the municipalities and elected

people at the municipal level; it's determined to have its own way with

respect to the workers and the people who work within the system,

regardless of contractual arrangements, as the member for

[ Page 6202 ]

North Island (Mr. Gabelmann) has said. It's a

pattern of arrogance that seems boundless under this administration and

can only be dealt with with a change of government.

MR. SKELLY: I guess this is only one further example of the

colossal mess that this government has placed transit in over the last

several years. Transit is not a thing that the new right likes to deal

with — here or anywhere else where the new right is in power in this

country or around the world — mainly because transit serves people.

It's a way that government or society distributes benefits to people,

in terms of transportation, that people can't always afford on the same

basis. Not everybody can afford to drive a car or have their own

transportation, so transit distributes the right to get around. It does

it through a process of subsidy, which is why new-right and right-wing

governments don't like to deal with transit.

This government has messed up the system unbelievably. They've

overlaid commissions on authorities and on operating companies, so that

nobody understands it. The funding system for transit in this province

is so confused that most municipalities and most individuals in the

province can't understand it. It's an unbelievable confusion, and this

new bill only adds to that confusion, Mr. Speaker. It's really hard to

believe that a government like this, or any government, could get

involved in a system that is so confused.

This government is really hard to believe. Mr. Speaker, we came into

this House last fall, and we ordered the Transit workers in Vancouver

and Victoria back to work. We ordered the transit workers in Vancouver

and Victoria back to work. We ordered them back to work by legislation,

and we forced them to negotiate a collective agreement. This

Legislature forced them to negotiate a collective agreement; otherwise

the threat was contained in that legislation that if they didn't

conclude a collective agreement, one would be imposed upon them by this

Legislature. Management of the transit companies and the employees of

those transit companies were successful in concluding a collective

agreement. Then, Mr. Speaker, this legislation comes down and abridges

the terms of that collective agreement — changes the terms of that

collective agreement that the employees and the employer were forced to

negotiate under the threat of legislation.

It's impossible to believe that a government in a free society would

operate the way this government has done. Those employees and employers

reached a collective agreement, signed it in good faith. Both sides,

from the media reports, expressed their support of the collective

agreement and their appreciation that it was arrived at and reached in

good faith, and then the government turns around and introduces

legislation which essentially does away with the collective agreement

under the sections that my colleague described —

section 6.1(7) and

section 6.2.

[3:15]

Mr. Speaker, two things must have happened. The government employers

either didn't negotiate in good faith, or the government allowed them

to negotiate, knowing that in the future they were going to change the

terms of that collective agreement. The minister said in her opening

remarks that the collective agreement was signed for four years. In

fact the collective agreement really ends today if this legislation is

passed in the House. What the employees thought they were negotiating

in good faith and what the government's representatives may have been

negotiating in good faith is done away with by these sections in this

legislation.

Mr. Speaker, government was described by French philosophers in the Age of

Reason as a social contract between the citizens and their government, a contract

that was entered into and based on trust between the citizens and their government.

What this government is doing with this legislation is saying to the citizens

of British Columbia: "You have no reason to trust this government."

There is absolutely no reason any more to trust this government, because what

they agree on with you one day — what they conclude with you in the form of

a contract — they'll change tomorrow. You simply cannot trust this government.

Any social contract which may exist between the people of British Columbia and

their government no longer exists as a result of this kind of legislation. There

is no basis of trust between the citizens of this province and that minister

and the government she represents. That's what she's saying in those

sections of this legislation: they cannot be trusted. They cannot be trusted

by the citizens of this province.

Mr. Speaker, this is a government that changes words and changes the content

of its words. I was listening to some of the comments that were made by the

previous speakers and by the minister in her opening remarks: "On time

and on budget." It's amazing. Expo, we're told, is on time and

on budget. The original budget was $75 million. We're now told that the

budget is $806 million but the project is on time and on budget. When this minister

came into this portfolio with the responsibility for transit, she was forced

to admit to the public that ALRT had run over its original budget by a huge

amount of money, and then she turns up in this Legislature today and says the

project is on time and on budget. This government changes the meaning of words

to suit its own political purposes.

A few months ago the union applied to the Labour Relations Board to

have B.C. Transit and the Metro Transit Operating Company considered a

common employer, because they had a problem dealing with Metro Transit

Operating Company when they were negotiating their collective

agreement. The problem was that MTOC said they had no ability to pay

salary increases, or they had no ability to pay for the working

arrangements that were included under the collective agreement of the

day. But strangely enough, at the same time B.C. Transit had a surplus,

and B.C. Transit was the agency that funded, in part, Metro Transit

Operating Company. This is how this government has changed the content

of the phrase "ability to pay." They've changed it with school boards

in the education budget, and they've changed it with municipalities,

and they've changed it in order to pass legislation like Bill 3 in

1983, so they could do away with employees or arbitrarily cut back on

their salaries and working conditions because "the government didn't

have the ability to pay."

[Mr. Strachan in the chair.]

The employees in this case saw that it was false. They applied to

the Labour Relations Board. The Labour Relations Board recognized that

there was an artificial distinction between B.C. Transit and MTOC, and

so they combined them as employers. It put the lie to the phrase

"ability to pay" in this case. I'm sure that anybody who looked at the

government's budget as opposed to what they're willing to pay for

education or social services or hospitals and health care would easily

see the lie in that connection as well. Ability to

[ Page 6203 ]

pay! This government constantly changes the meaning of words and phrases, and inserts new meanings.

The government has gone over the decision of the Labour Relations

Board — in fact, totally turned it on its head — and now they can

create separate employers out of every service operated by B.C. Transit

or Metro Transit Operating Company. They can set up a separate service

for handicapped transport, and maybe contract it out or privatize it.

They can set up a separate service for Seabus, contract that out and

possibly privatize it, as they did with the Manning Park ski

development. So the whole system will become even more confused as a

result of this legislation than it was to begin with.

The problem with this legislation is that it says to the people of

British Columbia that anybody who negotiates on behalf of this

government for a collective agreement or any other type of contract

that this government enters into, perhaps even for a tree-farm licence,

cannot be trusted. The negotiators for this government are not as good

as their word. Their words can't be trusted, because this government

has no compunction about coming back into the Legislature subsequent to

that agreement and changing all the terms of the agreement to suit

itself. There is no basis of trust between citizens of British Columbia

and people who enter into contracts for the government of British

Columbia in good faith. There is no basis of trust between those two,

because the government will come in and use its superior legislative

authority to change the terms of an agreement and totally wipe it out.

This legislation talks about management's exclusive rights.

Management rights is a theory that came about, I suppose, at the time

of the Industrial Revolution, when managers were deemed to have all the

rights to allocate capital and labour. In fact, labour and capital were

considered their property. Over the years, as society has become a

little more democratic and as individuals have become more highly

valued, agreements have abridged management rights. Management has

profited from those agreements, because workers who are involved in

making decisions in the companies, businesses or governments that they

work for are found to be more productive. They're willing to give more

in serving the company or enterprise in which they have a say in making

management decisions. So management has found it to their advantage and

their profit to allow their rights to be abridged and to allow

employees to provide more input to management decisions.

What this legislation says is that management goes back to the

theory of exclusive management rights to allocate capital and labour,

to a theory that is 200 years dead — and we're all thankful for it. But

it has been revived in the last little while by the New Right.

There are a number of economists who talk about how you can increase

productivity. This government seems to believe that you can increase

productivity by coercion, by forcing workers to work harder. In fact,

you can increase productivity a very small amount by forcing workers to

work harder and longer. You can force workers to increase their

productivity in other ways. You can reduce the costs of occupational

health and safety regulations and environmental regulations, and force

workers to work harder and longer under unsafe conditions. You can

threaten workers so that they are insecure about their jobs or their

wages. You can force them to increase their productivity a little bit.

But there is what is called by economists the social component of

productivity, and that is that workers will only give their best to a

government, enterprise or company that involves them in establishing

the objectives and in decision-making with respect to the operation of

the company, especially to the relationship between the employees and

the employer. That's how you get the best.

What this government hasn't learned and is probably incapable of

learning is that the only way you can get people to give their best is

to inspire them to do it, to involve them in making those management

decisions. To go back to a theory of management rights that's 200 years

old, and became obsolete then — if it ever had any application at all —

is ridiculous.

Mr. Speaker, what this government is telling us in this legislation

is, first, they can't be trusted; second, their agents can't be trusted

when they're entering into agreements and contracts with people; and

third, they have no understanding whatsoever of how to involve workers

in the kind of decisions that are going to make them more productive,

and more able and more willing to produce the best they can for this

province. It's a shame that this kind of legislation is being presented

in this House in the twentieth century. The minister talks about the

new transit system taking us beyond the year 2000. This legislation

takes labour relations in our transit system back beyond the year 1900.

HON. MRS. McCARTHY: I'm pleased to respond to the old left,

and their comments regarding this bill, because as always the members

opposite have tried to confuse the issue and have taken an opportunity

in this case to utterly read into this act an entirely different

interpretation. I can only interpret that as being a scare tactic which

they would like to carry forward into the community to frighten those

people who are charged with the responsibility of operating the bus

services of this province.

First of all, may I say that it is absolutely incorrect what the

member from — I'll go in the order in which they spoke — North Island

(Mr. Gabelmann) tried to imply, that we are completely undermining the

collective bargaining system and the collective bargaining contract

which we already have in place with MTOC drivers and with the MTOC.

Interjection.

HON. MRS. McCARTHY: Yes, you didn't imply, you actually said

it. And you didn't read the bill, or you would know differently. You

didn't read the bill or you would realize that it was absolutely not

true. That's absolute rubbish, and he knows it.

Mr. Speaker, we reached an agreement some months ago, and it was on

labour matters that we discussed with ICTU prior to either the company

or the union signing the collective agreement. All of the management

rights that are implied in this bill.... Everything was discussed with

them. It's wrong to say that in any way this bill reneges on any

agreement that is reached between MTOC and ICTU. In short, there's been

no breach of understanding or no breach of contract at all.

It's important to understand the effect that this bill has on the

employees. As a result of this merger, employees of Metro Transit

Operating Company will become employees of B.C. Transit. That's very

clear. But

section 6 of the act specifically protects the rights of

MTOC employees in regard to salary, seniority, group insurance and

medical benefits, and any

[ Page 6204 ]

other benefits that they have under the present

agreement are totally intact as this group of employees transfers in

name to B.C. Transit. It also states that B.C. Transit is bound by all

collective agreements between Metro Transit and its employees. That's

very, very clear in the bill. That this member on the floor of this

House should try to confuse the issue and to confuse the public in that

respect is totally misleading to the people of this province.

Secondly, he is talking too in terms of contracting out. He mentions

contracting out. I don't know.... We've had comments made by the member

for Vancouver East (Mr. Williams) about how much the minister knows

about the ministry. He certainly knows nothing about the B.C. Transit.

He would know full well that B.C. Transit has been contracting out for

a long time. They contract out for handicapped services and for

operators to provide services in small communities, and have done so

for a long time. The only thing that contracting out changes....

There's no change in contracting out. It preserves the ability of the

B.C. Transit — the old B.C. Transit — to continue to do what they have

always done. It does not in any way impose upon the old MTOC, which now

moves into the overall general body. It does not in any way change the

contractual arrangements that were made with them heretofore. But it

does protect B.C. Transit to continue to do what they have done in a

historic fashion all of these many years.

[3:30]

The members talk about the right to manage. Let me tell you that in

the years leading up to the labour strike of last year, it was

recognized by many people, and the misinterpretation at the time was,

that management indeed, if they had the right, were not ever allowed

the right to manage in total. This bill simply makes it clear, as Mr.

Morris made it clear in his recommendation. Mr. Morris took a long time

to bring it in as an industrial inquiry commissioner. He is a

well-respected labour leader and certainly has been applauded both

nationally and internationally in that regard. He has very properly and

clearly laid out his comments, and I'd like to quote those, because the

members should have read them if they haven't. I quote:

"I have examined the contract provision and find no

basis for the assumption of the veto by either party to the contract.

The contract is an agreement entered into by two parties, in this case

the MTOC and the ICTU, presumably for the mutual benefit of both the

company and its employees, and each party has obligations to the other.

If a problem arises and there is machinery in the agreement to settle

the problem, then it should be used.

"On one hand, when policy changes are being

contemplated by management that affect their employees, it is

appropriate for them to consult with the union, but it is not

appropriate for the union to use a, 'veto.' They too should consult and

discuss the questions raised by the employer and offer such advice as

they can. That way, problems may be resolved without confrontation.

"It must be recognized that MTOC has the right to manage the

operation of the transit system and to provide a proper level of service to

the community."

I have to say, Mr. Speaker, that after that was clearly enunciated in Mr. Morris's

report, we did not hear the union say at any time that they disagreed with that.

I think that they too agree with this, and that's why I feel quite comfortable

in saying that I think there is a new era of cooperation between the union and

our management. I put a great deal of appropriate and suitable commendation

for that with our new chairman of the board of MTOC, Mr. Stu Hodgson.

A couple of other things were mentioned which I would like to

comment on. First of all, I've handled the right to manage and Mr.

Morris's recommendation. That's all that this legislation does. But

there was an implication by the member for Vancouver East that we do

not consult with the employees. Well, let me tell you there's a very

new era in our transit services, and there has been a lot of

consultation. We've had to make some changes with the fareboxes of

late, and it has been our own bus drivers, our own people, mechanics

working within the system, going to Toronto.... We sent them to

Toronto; we sent them to California; we sent them to Washington. It was

not some consultation from above; it was not somebody brought in to do

the job. It was done within MTOC, and it was done very well.

We have other examples of that kind of cooperation. They are

assisting us in upgrading in ideas of safety. They have been consulted

in the problems that we had with the new Flyer buses in January. All of

that has been going on apace, and it will continue to do so because we

do recognize that there has been, over a very long period of time, a

real difficulty in terms of this large company which has grown even

larger. In order to manage and get the kind of morale that we want in

order to serve the public better, we need to have that kind of

cooperation and consultation. I will pledge on the floor of this House,

and I don't care if the people opposite believe me or not.... I pledged

a long time ago when I took on this responsibility that we will have

that kind of service and that kind of morale in B.C. Transit in the

months and the years to come. I know that those people who belong to

the system want that kind of reputation and will certainly give it to

us.

I want to say that it always has been the ability of B.C. Transit to

contract out; it's never been changed and isn't changed now. It is just

that we did not want to have the implication that that would be taken

away from B.C. Transit with the two groups taken together. That's very

clearly enunciated in the bill, and so it should be. It's not wiping

out anything they had before, either, but it is protecting what MTOC

has had.

Anything said on the floor of this House in terms of going back on

contracts and making null and void agreements and collective agreements

which have been reached in good faith by both parties is absolutely

balderdash. It is totally misleading, and I am sorry to say that that's

the only kind of debate that has come out of this bill, because it is a

sincere attempt to take a very large organization.... It is one that

has grown, I might add, and funnily enough that you should mention in

this debate about our lack of desire to assist in transportation on

this side of the House and in this government.... This government is

the one that produced all of the small community services. Now you can

have a bus service in Prince George, in Penticton and in other parts of

the province, not just in Victoria and Vancouver; now there's a

handicapped service throughout this province that rivals any on the

North American continent. Also, the whole of this system, which I think

each and every member of this House should be proud of, is done over a

larger geographical area than any other in this nation, and has by far

the most generous financial input of any provincial government in this

nation.

[ Page 6205 ]

So I very proudly — proudly, I say — move second reading of this

bill at this point in time, and I do so knowing full well that this is

an excellent move to better transit services in the province of British

Columbia.

[3:45]

Motion approved on the following division:

YEAS — 25

Waterland

Brummet

Rogers

Segarty

Heinrich

Hewitt

Richmond

Pelton

Michael

Kempf

A. Fraser

Chabot

McCarthy

Nielsen

Gardom,

Smith

Bennett

Curtis

Phillips

McGeer

R. Fraser

Reid

Ree

Mowat

Veitch

NAYS — 17

Macdonald

Dailly

Howard

Skelly

Stupich

Lank

Nicolson

Gabelmann

Williams

Hanson

Rose

Lockstead

MacWilliam

Wallace

Blencoe

Passarell

Sanford

Bill 38, British Columbia Transit Amendment Act (No. 2), 1985, read

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

consideration at the next sitting of the House after today.

HON. MR. NIELSEN: Second reading of Bill 18, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1985

HON. MR. CURTIS: This bill makes two changes to the British

Columbia low-income notch provision, and amends an assessment provision

to harmonize the British Columbia Income Tax Act and the Canada Income

Tax Act. The British Columbia low-income notch provision, which was

introduced in 1979, is designed to provide that British Columbia

taxpayers do not normally pay more provincial tax than federal tax.

This provision is being extended by Bill 18, effective for the 1985

taxation year, to include the health care maintenance surtax. When that

surtax was introduced last year — 1984 — it was excluded from the

low-income notch provision and therefore payable by all British

Columbians with taxable income. The amendment contained in this bill

will eliminate the health care maintenance surtax for British

Columbians whose provincial tax liability is reduced by the low-income

notch provision.

[Mr. Ree in the chair.]

A further amendment provides an additional provincial income tax

reduction for low-income taxpayers who are able to claim all or a

portion of their spouse's federal tax reduction. Under the federal act,

if an individual has no taxable income or has basic federal tax payable

of less than the federal tax reduction available to all taxpayers, the

unused portion of the individual's tax reduction can be transferred to

his or her spouse. The federal tax reduction has been set at $100 in

1985, $50 in subsequent years. This amendment will ensure that, for all

low-income British Columbia taxpayers who claim all or a portion of

their spouse's federal tax reduction, provincial tax will not exceed

federal tax after the amount of any federal tax reduction transferred

between spouses is claimed.

Finally, the bill amends a

section of the Income Tax Act to bring

administrative enforcement and collection provisions in line with the

federal Income Tax Act. Under the terms of the tax collection

agreement, British Columbia has agreed that it will maintain its taxing

statute on the same basis as the federal act. This change was requested

by the federal government, and arises from previous amendments to the

federal Income Tax Act imposing a liability on directors of companies

for payroll source deductions which were not remitted to the

receiver-general. This amendment is retroactive to November 13, 1981,

the date the federal change was effective.

Mr. Speaker, I believe that these amendments will improve the

fairness and efficiency of the British Columbia Income Tax Act, and I

move second reading.

MR. STUPICH: The opposition will certainly support these

modest changes in the income tax legislation. I understand, with

respect to the notch provision, that it's effective for 1985, so those

who were caught in 1984 are paying something that really hit them

because of an increase in provincial income tax. It seems that every

time we increase the provincial income tax we forget about the effect

on low-income taxpayers, and it has happened before. That's not a

fault, but it's something that does happen. I just want to make the

point that it happens whenever B.C. increases the Income Tax Act.

One other thing we did was do away with the low-income tax credit,

unfortunately. This is a very small step to protect the lowest-income

people in the province. While we support it, we wish we could be doing

much more. We'd certainly like to see the low-income tax credit

reinstated at some point.

HON. MR. CURTIS: I note the comments made by my critic the member for Nanaimo.

Interjection.

HON. MR. CURTIS: On, I'm sorry, there's a new phrase on the other side. I've not heard that, Mr. Speaker.

Nonetheless, we can deal a little more with a couple of these things in committee. I move second reading of Bill 18.

Motion approved.

Bill 18, Income Tax Amendment Act, 1985, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. NIELSEN: Second reading of Bill 32, Mr. Speaker.

[ Page 6206 ]

COMPENSATION STABILIZATION

AMENDMENT ACT, 1985

HON. MR. CURTIS: I would like to make a few remarks regarding

this amendment act. The bill before you introduces various housekeeping

amendments to the Compensation Stabilization Act. I don't intend to

spend a great deal of time on the proposed changes, inasmuch as from my

point of view they simply streamline the administrative process.

The amendments cover three areas. (

a) They reduce the time allowed

for employers to file a compensation plan with the commissioner. That

reduction is proposed from 30 days to 10 days. When the program was

first introduced in 1982, 30 days was considered reasonable; after

three years of experience, we believe employers do not require that

amount of time.

(

b) Under

Part 3 of the Compensation Stabilization Act, the

regulations section, the program review over time has revealed minor

drafting flaws which prevented the implementation of a compensation

plan determined under the regulations. This proposed amendment

addresses this omission by specifying that a plan may be determined

according to the formula in the regulations and implemented by the

commissioner. I would note that as most members would know — if indeed

all members, Mr. Speaker — to date no plan has been placed under the

regulations. All have been reached under the guidelines

section of the

program.

(

c) In

section 12, the confidentiality of information obtained by a

mediator appointed by the compensation stabilization commissioner is

protected, as is the practice under the Labour Code. This detail should

have been caught earlier, but it is dealt with here. For easy

reference, I refer members — those who don't have it immediately — to

section 127 of the Code passed some 12 years ago.

Depending upon their philosophy, the citizens of B.C. and members of

this House are, I believe, well aware of the value of the compensation

stabilization program and the effect it has had in preserving

collective bargaining while ensuring the taxpayers' ability to pay. We

consider this to be still the paramount consideration.

Mr. Speaker, I see that the member for North Island is present. He

undoubtedly will have something to say. The amendments are essentially

technical in nature. It is an amendment act. Perhaps they lend

themselves to be debated more fully in committee. I move second reading

of Bill 32.

MR. GABELMANN: Let me just say we will do this in more detail in committee; at least I hope to.

I don't have any particular problem with sections 1 and 2. In fact,

if we have to have this kind of scheme, I would endorse those

particular changes. The nub of this legislation, however, is in

sections 3 and 4. To begin with, Mr. Speaker, I must say that I do not

share the view of the minister, as he indicated in first reading and

again today, that this is a technical bill — minor amendments. The

major reason I say this is not minor is because we have gone from a

system where the collective agreement needed to be worked out by the

parties. We now have Mr. Peck or his successors given the right to

That's a major departure, Mr. Speaker.

In making any comments about compensation stabilization, I think

it's necessary for us to make very clear that the objectives of

restraining government expenditures are not at issue. What is at issue

are the methods chosen by the government to accomplish those goals. We

believe that government should give to its agents the authority to

bargain, and to bargain toughly. Give them the limits of the ability to

expend, but send them to the bargaining table with those instructions.

Don't give those agents of government this kind of legislative

authority which effectively puts an end, in any real sense, to

collective bargaining in the public sector.

This major debate in principle took place at the time of

introduction of the Compensation Stabilization Act. I don't believe

it's appropriate under these amendments to repeat that debate, and I

shan't.

I want to say that, in respect to

section 3, this legislation now

gives in clear and unmistakable form the right to the compensation

agreement. He now has the ability, under this amendment, to "fix the

terms of a compensation plan." Mr. Speaker, a compensation plan in the

act is defined.... I should read it all, rather than just taking out

the

section I want to refer to. "'Compensation plan' means the terms

and conditions, however established, for the determination and

administration of compensation of an employee or group of employees and

hourly wage or for the amount that goes into a pension plan or for the

amount that goes into a dental plan, but in fact in other ways are cost

items. So what we're basically doing with this amendment, number 3 in

this bill, is giving to the compensation commissioner the right to fix

collective agreements in a wide variety of areas, far beyond anything

that people in this province would accept if they were given all of the

information about how and why we have or did have free collective

bargaining in this province.

Number 4 of the bill deals with arbitrators, to get around the

problem that the minister has had with interest arbitrators' awards in

particular areas. It seems to me, Mr. Speaker, that you effectively

destroy the interest arbitration system by establishing an authority

that can look upon a judgment made by an interest arbitrator and vary

the collective agreement should be, looks at a whole variety of things,

including compensation. He or she looks to contract language and many

issues that might be in dispute. And you trade them off, one for

another: you give something there; you don't give it there. You make

trade-offs that, in the arbitrator's opinion, will fairly represent a

balance between the parties.

[4:00]

Now what you're saying to those arbitrators is that some elements of

that interest arbitration award are subject to review and deletion from

the contract or amendment in the contract. That leaves interest

arbitrators in an untenable position, because they no longer will know

or have the ability to make judgments about the appropriate trade-offs.

The contract won't emerge in its final form in the way that they had

anticipated it emerging. Quite frankly, it makes the job of interest

arbitration impossible. I've read a number of judgments by interest

arbitrators suggesting that they cannot work in that field under this

legislation; and that will be even more so should this bill pass.

If society is looking for ways in which to resolve disputes in

difficult areas — areas in which strikes and lockouts are if not

difficult sometimes impossible — and where appropriate

[ Page 6207 ]

resolution cannot be found through the normal

collective bargaining process, we have had the option of the parties

saying to each other: "We will refer these matters to an interest

arbitrator." It's an idea which has a lot of critics in industrial

relations, but it's also an idea that has met with fairly wide support

— witness how widely it's used, particularly in health care and other

fields where the strike or lockout weapon is really virtually useless.

With the Compensation Stabilization Act and with

section 4 of this bill

in place, the whole concept of interest arbitration is at least

threatened and perhaps made impossible as an alternative for resolution

of industrial disputes in this province. Not only is free collective

bargaining made meaningless in the public sector; so too is that

alternative choice of arbitration that some people have decided to

choose.

Mr. Speaker, I said I wasn't going to reopen the debate about the

whole principle of people who have a dispute sitting down and resolving

it without some third party intervening, but that's what this is all

about. I must say in parentheses that I'm getting tired of this speech.

I had to make it earlier this afternoon; I had to make it last week; I

had to make it last September; I had to make it last spring. The

government feels so free to intervene when it comes to people's labour

and determining what their compensation should be, but it never makes

the same kind of arbitrary determination in respect of goods.

Mr. Speaker, if the lowest bid for a particular government project

to supply knives and forks for the parliamentary restaurant is too

high, the government doesn't bring in a bill saying the price shall be

10 percent less. It doesn't set up an agency to do that for it, but we

do it with people's labour. On that score I agree with Abraham Lincoln,

when he said that labour is intrinsically of more value than is

capital, because people are more important than things. But when it

comes to the way this government operates, it has the opposite view. A

contract for goods is somehow sacrosanct and not to be interfered with,

but one that deals with people delivering services is there to be

interfered with.

Mr. Speaker, I'll conclude with this: if the government wants to

keep costs down, then it should make sure that its negotiators are

given those instructions, and it should have some confidence in them.

The price of this in a free society is more than I'm willing to pay.

MR. STUPICH: Mr. Speaker, I think the member for North Island

has made it quite obvious that the opposition will be voting against

this legislation. Perhaps the thing that disturbs me more than the

legislation itself is the government's attitude toward this

legislation. For the minister to say that these are simply housekeeping

amendments is something equivalent to using a fire hose to dust window

ledges in a house, without thinking at all of what damage is going to

be done — the dust is simply being removed so obviously he has achieved

what he wants to achieve.

[Mr. Kempf in the chair.]

To give to one person the authority to say what the terms of the

contract between employers and employees will be, without necessarily

listening to any of the arguments advanced by either side or both, or

to the interested arbitrator.... There certainly is provision for him

to listen. But there can be no knowledge outside of his office as to

whether he has listened, because no one else has access to the

information he has been given by the parties, as I read this

legislation. It was enough before. The commissioner had the authority

to refer back to the parties any agreement that they had reached, and

to say, "This is not good enough," or, "It's not small enough; it

doesn't meet my guidelines; have another go at it and bring in another

recommendation." To say to them now in advance, "If I don't like what

you come up with, I may or may not pay attention to the information

you've used in arriving at this; but whatever, once you have reached

your decision I have the absolute right to write the agreement that I

think should be signed between the two parties...." As I say, Mr.

Speaker, to say, with that kind of authority being given to him, which

is substantially more authority than he had under the legislation

before this amendment was introduced, that these are simply

housekeeping changes gives just that much more evidence as to the kind

of attitude this administration has toward democracy.

For the past three or four years, bill after bill introduced in this

House has taken out of the Legislature the authority to do one thing

after another. Even income tax may be increased now at the will of the

government, simply by passing a regulation within the cabinet room. I

don't know of that coming up in any other jurisdiction among the

western democracies. It may, but I don't know of any such case. Step by

step they have taken authority away from the Legislature. They come to

the Legislature with bills and ask for approval for bills for which

they already have the authority, simply because they want, for

political reasons, to have the Legislature vote certain workers back to

work or some such proposal. But when they don't want the political

argument, they want the authority to deal with everything in cabinet —

in this case not even cabinet. Cabinet may offer advice. I don't know.

I don't know the relationship between the Compensation Stabilization

Commission and the cabinet, but I'm sure they would have opportunity to

discuss such things with the commissioner.

In any case, with or without the advice of cabinet and with or

without having listened to any of the arguments put before him, under

this bill the commissioner will have the authority to say, in effect:

"All of your bargaining is a useless and expensive waste of time. Why

bother with it? When you're finished with that whole process, I, the

commissioner, am going to write the agreement, so why do you waste your

time and everyone else's time? Why do you waste the effort? Why do you

spend the money, when you know that when it comes right down to it, I

have the authority to write the agreement?" That's the attitude of the

government.

As I say, Mr. Speaker, the worst part of it is that they say that

this very substantial change is simply housekeeping. That's their

attitude to taking that kind of authority not just away from the

Legislature, as in this instance, but away from many groups in the

community who have had, up until now, some purpose in trying to

negotiate contracts. From here on it will be seen by people as an

exercise in futility and will be, I believe, interpreted as just one

more attempt to destroy the trade union organization by making it a

useless organization, which is a course upon which they set after the

election in 1983 with the legislation that was introduced with the

budget of July 7, 1983. This is one more step in the process of

attempting to destroy the usefulness of trade union organizations, in

the hope that the organizations themselves will be destroyed. The

opposition will be opposing this legislation.

[ Page 6208 ]

DEPUTY SPEAKER: The minister closes debate on Bill 32.

HON. MR. CURTIS: Mr. Speaker, I have noted the comments by

the member for North Island (Mr. Gabelmann) and the member for Nanaimo

(Mr. Stupich). The phrase "housekeeping amendments" is a phrase that is

perhaps overworked in government. I first heard it when I was sitting

over there. Nonetheless, I am still of the view, Mr. Speaker,

notwithstanding the comments made by the two members of the NDP, that

these are essentially clarifications of a bill that has worked very

well.

The member for North Island shakes his head in disagreement. Mr.

Speaker, I recall the debates — and I will respect the fact that he did

not want to revisit the entire compensation program — following

introduction of the main legislation in 1982, which this act amends.

The fact remains that the process has worked surprisingly well. There

are those who had hoped it would not work, but indeed it has.

I think there may be, if I may say so, a slight overstatement of

precisely what would occur in one of the sections. We can deal with it

further in committee, if that is the committee's wish at that time. As

I indicated in opening second reading, in effect the program staff, the

small staff associated with the office of the commissioner, discovered

some minor and technical matters that required amendment in a regular

program review, and that's why the bill is here. There is no hidden

deep-seated conviction behind the bill. It says what it means and means

what it says, nothing more. I therefore reject the comments made by the

member for Nanaimo in this particular debate.

It was always envisaged that if in the very unlikely event that the

parties involved in attempting to reach an accord failed to reach a

compensation plan under the guidelines, then a fixed formula under the

regulations would generate a compensation plan. The act, then, requires

the commissioner to refer this regulation-generated compensation plan

to the parties to see if they can establish a compensation plan within

the regulations. If this is not possible, then the commissioner would

impose the compensation plan generated by the regulations. That's the

final step.

I attached the phrase "in the very unlikely event, " and I restate

that. Under the

section which we will get to in committee, which is one

of the key parts of this amending bill, the commissioner does not make

up a plan; he simply acknowledges the one generated by the fixed

formula within the regulations. Both speakers for the official

opposition — certainly the first speaker — indicated that we could

touch on it more in committee debate. This is clarification, and after

careful review, it is an amending bill for a major program which has

been one of the cornerstones of the move towards recovery in British

Columbia. I feel as satisfied with it today as I did when we had the

strenuous and lengthy debate of 1982 — in fact, even more so because of

its proven success — and I'm convinced that with the amendments which

are before us today that success will be further ensured. I move second

reading of Bill 32.

[4:15]

[Mr. Strachan in the chair.]

Motion approved on the following division:

YEAS — 24

Waterland

Brummet

Rogers

Segarty

Heinrich

Hewitt

Richmond

Pelton

Michael

Kempf

R. Fraser

Chabot

McCarthy

Nielsen

Smith

Bennett

Curtis

Phillips

McGeer

A. Fraser

Mowat

Reid

Ree

Veitch

NAYS — 18

Macdonald

Dailly

Howard

Skelly

Stupich

Nicolson

Sanford

Gabelmann

Williams

Hanson

Rose

Lockstead

MacWilliam

Barnes

Wallace

Mitchell

Blencoe

Passarell

Bill 32, Compensation Stabilization Amendment Act, 1985, read a second time

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

sitting of the House after today.

HON. MR. NIELSEN: Second reading of Bill 37.

SECURITIES ACT

HON. MR. HEWITT: I rise to move second reading of Bill 37,

the Securities Act. Our existing securities legislation, Mr. Speaker,

was enacted in 1967, at which time it was considered to be uniform with

Ontario and the western provinces. Since then, there have been major

changes in other jurisdictions, and therefore the bill before the House

is intended to bring our securities law in line with — and, I might

add, in some cases ahead of — the rest of the country, to provide the

best possible protection to Canadian citizens who deal in the

securities markets in this province and to provide greater certainty to

those issuers who raise capital in this market.

There are three main areas in which we can now claim to be uniform.

First, we are now consistent with the rest of the country in the area

of registration and prospectus requirements and their exemptions.

Second, continuous disclosure, presently regulated by policy, now forms

an integral part of the proposed bill, and with it its exposure to

civil liability for those who choose to ignore its provisions. Third, a

part relating to the mutual fund industry under the heading of "Self

Dealing" codifies another area dealt with at present by policy. This

generally deals with the insiders of mutual funds, its managers and

advisers, and describes prohibited loans and investments, indirect

dealing and disclosure of fees. Again, a civil liability provision is

imposed for wrongful dealing.

In addition to the uniformity provisions of the bill, there are

extensive changes made to our takeover bid legislation. Here we are out

in front of the rest of the provinces and have adopted the proposals

agreed upon by the securities administrators. Other provinces are

expected to follow with comparable legislation. Introduced as an

offence is the situation where an insider tips another that a bid is

about to take place before the information is generally known. This

offence also incurs civil liability.

[ Page

6209 ]

Another feature of the bill allows the government to provide a

framework for the special investment conditions in this province,

including the creation of a Securities Commission appropriate to the

province's unique circumstances.

Finally, the bill sets out penalties of up to $100,000 and/or

imprisonment for a term of up to five years less one day for wrongful

dealings. Protection of the public interest is paramount, and some

offences, particularly those in the area of misrepresentation, call for

more severe penalties than are presently provided.

As hon. members are aware, the bill before the House represents a

long and arduous of consultation with many segments of the business,

investment and professional communities. I am satisfied that we now

have a workable consensus that overcomes the objections raised against

previous drafts of this important legislation. This bill puts our

securities law at the forefront in this country.

With those remarks, I would be prepared to receive any debate there

might be on this bill, and I therefore move that the bill now be read a

second time.

MR. HOWARD: Mr. Speaker, I think not only the primary but

probably the exclusive function of securities legislation — not only

now but dating back to the time that such legislation was first

developed — should be the protection of the general public, the

protection of the investor. I noticed that the minister used the words

"protection of Canadian citizens who are investors," but I think it

should protect those who are not Canadian citizens but still investors;

in other words, everybody. That's the primary purpose of it.

The necessity has become more of an obligation of society because of

the increasing complexities of the securities market. Over the years

various types of investment securities have been developed by the

issuer, with different components to those securities designed to suit

the convenience of the issuer and not the convenience of the investing

public. There is a rash of components to bonds and debentures as to

retractability and convertibility features. Similarly with equities,

with types of common shares, some of which do not have voting rights

and some of which do, and with various types of preferreds. The list

could go on to identify what all of these investment vehicles are, but

I don't think that's necessary, except to indicate that there are so

many of them and there will undoubtedly be more types of such

investment vehicles.

The one which is probably attracting some interest at the moment,

given the expectation of the federal budget two days hence, is as to

whether or not the concept of flow-through shares will be made

available to the forest industry. The forest industry is praying that

will happen so that flow-through shares being issued to the general

public may become more attractive than might otherwise be the case,

with treasury shares being issued by some of those forest companies. It

will put them in a position to readjust their balance sheet and get

some more money into the treasury to do something with it. But all in

all, the public is the one that needs to be protected.

[4:30]

There are other factors which are not only oft-times confusing to the general

public, but which are not generally known to the general public in moments of

investment: that is, what factors prevail within the financial structure of

a company at any given time that would affect its potential ability to meet

dividend payments, for argument's sake. How many times over does a particular

company earn money to ensure that the dividend payments are somewhat secure?

There's a variable formula for that, but the formula cannot come

into play and be applicable until the company reports its financial

position regularly on a quarterly basis. People inside know what that

information is before it gets out. That places insiders, as they are

loosely referred to, in a different position vis-à-vis the general

public.

I've heard varying views from members of the public about insider

trading, ranging from the absolute prohibition against insiders being

able to trade in shares at all, to the other extreme. We know that's

not so. An insider can trade, and all that has been required up until

now is a report — I believe a month-end report — about his position of

insider trading in the preceding month, or whatever the period of time.

In any event, that's not terribly relevant. The fact of the matter is

that people who are in the know inside a corporation know the affairs

of that corporation before the general public knows them. The

continuous or full disclosure provisions in the bill may be a move to

somewhat dilute the opportunity of insiders to have knowledge of

material facts before the general public, and to use them to their

advantage. That's a move in the direction of protecting the public more

so than has been the case in the past.

I want to submit that it may be virtually impossible by way of

legislation to prevent insiders or others from having material-fact

information and using it to their advantage in the marketplace in

dealing with securities on the various exchanges. For instance, those

who may not have access to material facts but who are close to the

market, who watch it every day or who work in the market, become pretty

good judges in watching what used to be called the ticker-tape but is

now an electronic device that displays what is happening. People who

work in or close to the industry, or those who may have television sets

in their offices that run a continuous flow of information about moves

on the marketplace, are able to have immediate information about moves

in the market, and are thus in a better position to take advantage of

moves up or down to protect their investments. They have that capacity

much more so than the general public has.

There are also, and there will likely always be, the stock-market

manipulators — those who want, by one means or another, in the buying

or the selling of stocks, to influence their price in such a way that

an advantage accrues to the person who is successful in doing that.

It is also, regardless of what this bill may say, a fact of life

that some people with that capacity and intellectual desire — maybe I

should say mental desire — to find a way around the law will find it.

If they want to do it, they will find it. They will either find that

there is a legal way to do something which the law seeks to prohibit,

or they will try to do it illegally. That has been the history of a

number of people in the market game for decades now.

What I'm getting at with respect to that is that I think the process

of enacting securities law should be like one of the provisions in the

bill which requires continuous disclosure; the enactment of statutes

relating to the protection of the public should be a continuous process

as well, so that we don't go through this.... I think the minister's

predecessor had some idea about a bill. In fact, didn't he introduce a

bill in the House that has this...? And this appears some years later.

So the whole process of developing.... Even though it's patterned after

the Ontario model — and I gather that the Ontario securities

legislation has been the model for Canada for some length of time,

because they ran into a great many difficulties on speculative-grade

securities 20 or 30 years ago

[ Page 6210 ]

and felt constrained to fix that.... So we've

looked at Ontario, and other places have looked to Ontario as being the

model to follow. This appears to be what has gone on here.

But it shouldn't stop there. I think that any time it is discovered

that somebody has found a way around the law, where the words are not

clear and precise enough to protect the general investing public, then

it should be plugged immediately. It should be examined, and I know

that the administrators of securities law will certainly keep an eye on

that, and they may well even prepare the loophole-plugging legal words

to put in a bill. That's not the problem, Mr. Minister. The problem is

the guy or woman who happens to sit in the minister's seat and whether

or not that next stage will be taken. That's what I'm talking about —

the obligation to keep this on an upgraded basis.

One thought I want to express with respect to the bill is that one

of the minister's predecessors — I don't know whether it was Mr.

Hyndman — spoke about the need to establish a different process or

mechanism to protect the public with respect to what were loosely

called investment grade certificates or investment grade securities,

and those that might be called speculative securities, and to identify

somehow or other that the mechanisms for the commission to deal with

those sorts of things should be different. I don't think it's

impossible; it's done with respect to the options market. A company

cannot have options on its shares listed on the trans-Canada options

market unless that company meets a certain set of criteria involving

the payment of dividends, a certain size, a certain capitalization and

so on. In other words, resource-based or speculative penny stocks can't

list their stock on the options market.

What I'm saying is that there are criteria established by Trans

Canada Options Inc., and you've got to meet these criteria or you can't

make it. The Bank of B.C., for instance, has discontinued, if it ever

did.... I think it did sell options at one time, or was listed on the

options market, but when it discontinued paying dividends, that took it

off the options board. So it is possible to identify or to set some

criteria for securities to meet in order to qualify for certain

activity under the securities legislation. I think that is what should

be done as well.

I think Mr. Hyndman expressed that when he said in one of his

background papers that "the regulation of investment grade securities

and regulation of speculative securities requires different

approaches." He pointed out further that "the inappropriateness of the

regulatory scheme designed for investment grade companies for the

regulation of junior resource securities will be proposed as a means of

providing better protection of the speculator with fewer burdens on the

companies." That was eminently sage and sound advice.

I think that if we are intent upon ensuring the protection of the general public

who invest in securities, there should be some indication shown to them that

there are some corporations, such as B.C. Tel or Bell Tel, for argument's

sake — or Bell Canada, as it's known now.... There's probably no

problem whatever investing your money in a group like B.C. Tel, which is a regulated

monopoly, but there might be some difficulty if you invest your money in Canola

Resources or some other name on the board. But a lot of people in the general

public don't have that capacity of understanding the distinction between

the two, nor the types of securities that they issue and so on. If we're

going to get to the protection of investing — those in the general public who

are investors — I think that question raised by Mr. Hyndman might have been

appropriately dealt with in the bill now before us, to have established a different

thing.

But I think the most important point of it all is the necessity,

once having embarked upon this course of drawing the statute on the

models that exist in this country that have proven, as it is best

possible to prove it, that they do reach a high point in protecting the

investing public.... Once you've embarked upon that course and followed

what other jurisdictions have done, we shouldn't stop there but should

continue to forge on. Every time something inappropriate occurs or

somebody finds a way around a provision of the act in order to line

their own pockets at the expense of the uninitiated general public,

that should be plugged.

MR. REE: I intend to be very brief in my comments on this,

and compliment the minister for eventually bringing in such

legislation. This province has needed it for many, many years. I recall

when the predecessor bill, the 1967 Securities Act, was proclaimed. I

might indicate that it had passed through first and second readings of

this House and, I believe, also got through the committee stage. It was

brought in in such a rush that at that time the legislation did not

even recognize our corporations or companies terminology. They still

had in the Securities Act of that time letters patent, which is the

term used in Ontario. The whole bill had been brought in in its initial

state, completely as it had been passed and proclaimed in Ontario.

This bill, Bill 37, has adopted a great number of the provisions of

the Ontario securities legislation — a lot of the good provisions — in

order to have uniformity, but it has also been drafted to recognize the

uniqueness of our securities industry in British Columbia and the

uniqueness of the Vancouver Stock Exchange — the practice of trading on

the Vancouver Stock Exchange. I feel very strongly that it certainly is

B.C. legislation, although protecting uniformity across the country. It

is B.C. legislation applicable to British Columbia, and it is for that

reason that I particularly commend the minister for bringing in this

legislation. Naturally I will be supporting it.

HON. MR. HEWITT: In closing debate, I just want to touch on a

few things that the member for Skeena (Mr. Howard) raised. He zeroed in

very quickly on probably the whole thrust behind the bill: the

protection of the investor, the protection of the public, not so much

on the actual transaction or activity on the stock exchange, but the

whole feeling for what the securities market does and how it is

regarded, not just by the person who buys and sells shares on the

market but also by the businessman, by the manager of estates, by the

consumer himself or herself, in trying to understand this very complex

market which is used to raise capital for economic activity in the

province.

[4:45]

Full disclosure. We've identified that, I think, after a lot of

discussion with the industry itself, with the legal profession, the

accounting profession. Continuous disclosure: the opportunity to make

sure that if there are material changes they should be disclosed so all

the players have equal protection and equal information, and they

aren't "taken advantage of."

Various types of securities. Mr. Member, you're quite right; there

will always be new, innovative investment instruments. One that I

learned about, which I didn't know about when I first took over this

portfolio, was the non-voting

[ Page

6211 ]

common shares. You raised it. I wasn't aware of

that until I got involved in reading a transcript of the Ontario

commission's hearing. I had to go back and ask the experts: was there

truly such a thing? I was not aware that a common share could not have

a vote.

Insider information. They know before the public does; they're in

that position of trust. You can't eliminate that. But we have certainly

outlined again in the legislation that those who don't recognize they

are in a position of trust and take advantage of that position commit

an offence and can face civil liability for doing so.

In essence, the whole system is much tighter and clearer in the new legislation,

and all the players are aware of that. Certainly, as I said before, it makes people

more comfortable with the securities market in British Columbia.

[Mr. Ree in the chair.]

Your point about continuous update of legislation. Mr. Member, you have my commitment

that I'm going to be asking my colleagues, particularly the House Leader

in charge of the legislative program, that we should at least be given a slot

on the legislative calendar, in anticipation that there may be need for change,

for amendment, because of the ongoing uniqueness of the marketplace and the

new investment instruments that may come on the scene. We should continuously

try to update that.

My predecessor, the former Minister of Consumer and Corporate

Affairs, introduced a bill in this House in, I believe, 1982. That's

really where we started. It's taken this long, through good discussion

with the investment dealers, the Vancouver Stock Exchange people, the

accountants and the lawyers, to come up with Bill 37, which is, I

think, a very concise, well-written, well-researched document and one

where we really have good consensus that it will assist us in making

sure that the investment market in British Columbia is a market that we

can truly be proud of.

I should also mention the member for North Vancouver–Capilano (Mr.

Ree) ; I appreciate his comments about updating. He's been very closely

in touch, I guess, over the years with the Vancouver Stock Exchange. He

certainly has expressed an ongoing interest about making sure our

securities legislation is up to date and in tune with the investment

community.

Mr. Speaker, with those remarks, I would now move that the bill be read a second time.

Motion approved.

Bill 37, Securities Act, read a second time and referred to a

Committee of the Whole House for consideration at the next sitting of

the House after today.

HON. MR. ROGERS: I call Bill 5, under the name of the

Minister of Finance (Hon. Mr. Curtis). For the information of the

opposition House Leader, it's our intention to call Bill 31 following

Bill 5.

INCOME TAX (SMALL BUSINESS EMPLOYMENT

TAX CREDIT) AMENDMENT ACT, 1985

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill

5, the Income Tax (Small Business Employment Tax Credit) Amendment Act,

1985. This bill was dealt with at some length — at least, the thrust of

the bill — in the budget of March 14. It is designed to implement an

important program, through which the government will provide

substantial assistance to small businesses in the form of an employment

tax credit. In introducing this legislation, the government is seeking

to help defray the substantial non-wage costs associated with

employment. These costs, well-known to members of the House — Canada

Pension Plan contributions, unemployment insurance contributions,

Workers' Compensation Board assessments and others — impose a

substantial overhead burden on small business, and consequently can be

a disincentive to the hiring of new employees. Assistance given in the

form of an employment tax credit available to all small businesses will

provide relief from these high employment overhead costs and encourage

small small businesses to hire more employees.

It's important to note — not for members of this House, I'm sure,

who clearly understand it, but simply for the record — that, unlike

many other income tax credits, the small business employment tax credit

will be paid to all eligible small business corporations, whether or

not they have taxable income. As this credit is intended to defray high

overhead employment costs, the taxability of the small business

corporation is not an issue before us with this bill.

The program is directed at encouraging employment. It addresses, as

I said, the problem of high non-wage employment costs, and it touches

another cornerstone in the government's economic renewal program by

providing assistance to the small business sector. It is our view — a

view quite widely held — that a healthy small business sector is vital

to a healthy economy, and to renewal and growth in the province of

British Columbia.

This credit will be available to corporations for their first two

taxation years commencing after March 31, 1985, and will provide a

benefit to small business corporations of about $300 per taxation year

for each employee of a small business corporation — and a small

business corporation is clearly defined in statute. It is to be based

on eligible salaries and wages paid by a small business corporation,

where total salaries and wages paid to employees in a year do not

exceed $750,000. The credit will be calculated using the following

formula: salaries and wages paid in British Columbia divided by $20,000

times $300, equalling the annual credit. The maximum small business

employment tax credit available to a small business corporation will be

$11,250 in a taxation year. The maximum credit is reached when eligible

salaries and wages in a taxation year total $750,000. Above $750,000 in

eligible salaries and wages, a notch provision will gradually eliminate

the credit. A gradual reduction of the credit is required in order to

ensure that the program does not, on that margin, act as a disincentive

to hire additional employees as the $750,000 salary threshold is

reached. Above $850,000 of salaries and wages, the credit will not be

available.

The small business employment tax credit will only be available to

active businesses as defined under the federal Income Tax Act. In order

to prevent possible abuse of this program, the associated corporation

rules in the federal Income Tax Act are adopted to negate claims for

multiple small business employment tax credits. A small business

corporation which is a member of an associated group of companies will

only be entitled to claim the credit if the total salaries and wages

paid by the associated group are less than $850,000.

[ Page 6212 ]

The Ministry of Finance has asked the federal government to

administer the British Columbia small business employment tax credit,

and I'm confident that it will. In the event that an agreement is not

reached with the federal government, then this tax credit will be

administered by the Ministry of Finance in B.C. The need for this form

of assistance is clear. The government is determined that the program

will be implemented. I simply offer that as an aside, Mr. Speaker. I

have no reason to believe that Ottawa, on the basis of what I have

heard thus far, will not cooperate with the province in this regard.

It's estimated that the small business employment tax credit will

provide $75 million in relief annually to small business corporations.

This credit, if I may emphasize, is targeted toward employment. It

addresses the problem of high non-wage employment costs. It provides,

we believe, a significant measure of relief to small business and will

enable small business to play a major role in the province's economic

renewal. I move second reading of Bill 5.

MR. STUPICH: The opposition will be supporting this

legislation, but certainly not with the optimism and enthusiasm with

which the minister presents it. We are obliged to support anything that

holds out any suggestion, let alone promise, of economic renewal. But

we feel that there really isn't much evidence — the minister hasn't

presented much evidence to this point — that this bill will achieve a

great deal towards economic renewal.

The minister made the comment that overhead for small business is

high. Well, of course, overhead for every business is high, and,

indeed, overhead for the provincial government is high. But it is high,

and the minister is trying to alleviate that. That will certainly help

the owners and operators of small business, whether they need it

individually or not. It will help those who need it; it will help those

who can get along very well without it. So that's one of the problems

with it. It doesn't seem to be directed towards those who need this

kind of assistance; it's a shotgun approach that will help everyone who

qualifies.

The minister argued that high overhead of itself is a disincentive

to hiring. It would seem to me that an employer would hire when he

feels that he can make more money by hiring an additional employee, and

if he feels he can make as much by letting one go, then he'll do that

as well. The overhead itself is not a factor, in my mind, when it comes

to hiring another employee or letting one go. It's what that potential

employee might contribute to the success of the business, or what that

existing employee is contributing, and whether or not it would make any

significant economic difference to the corporation hiring as opposed to

firing.

While every expense may be a disincentive to expanding, I cannot see

that any employer would make his decision as to whether or not that

employer would hire one more or a number more individuals purely on the

basis of the cost of overhead. The minister argues that it will

encourage small business to hire more employees, and that was another

point that he made. I believe I've dealt with both the disincentive to

hiring as well as the encouragement to hiring more. I just don't

feel....

I would welcome perhaps some report from the minister as to

representations he got from people during that very productive process

of travelling around the province and speaking and listening to people,

whether some employers did present what he considered to be hard

evidence that in the event this kind of program were initiated, it

would actually lead to more employment. If the minister has any such

information, I'd like to see it.

[5:00]

[Mr. Veitch in the chair.]

It applies to corporations only. Certainly small business is

important, and the minister went on to talk about the government's

attitude towards small business. Perhaps it isn't the greatest employer

in total, but it employs in excess of 40 percent of those employed in

our economy. A large sector of that small business is not incorporated.

There's nothing in this that would help those employers who have not

incorporated.

Perhaps I'm wrong in saying that this legislation will not lead to

more employment, because it is quite conceivable that it will lead to

the employment of more lawyers who will be asked to proceed with

incorporations of more presently unincorporated small businesses so

that they can get in on this program. The cost of incorporating is a

one-shot deal. I know the program lasts for onl