1975 Legislative Session: 5th Session, 30th 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)

MONDAY, MAY 5, 1975

Afternoon Sitting

[ Page

1993 ]

CONTENTS

Privilege Clarification of Ministerial answers. Mr. Speaker — 1993

Possible breach of privilege. Mr. D.A. Anderson — 1993

Routine proceedings

Automobile Insurance Amendment Act, 1975 (Bill 69). Hon.

Mr. Strachan.

Introduction and first reading — 1994

Insurance Corporation of British Columbia Amendment Act, 1975 (Bill 68). Hon.

Mr. Strachan.

Introduction and first reading — 1994

Oral Questions

Burning of logs on Hydro right-of-way. Mr. Fraser —

Payments for Nancy Greene property. Hon. R.A. Williams answers —

Proposed oil refinery. Mr. Smith — 1994

Beacon Body Shop appraisals. Hon. Mr. Strachan answers — 1995

Helping Hand Club investigation. Hon. Ms. Young answers — 1995

Statements by Premier on Social Credit organization. Mr. McGeer —

l995

Charge to regional districts for park improvements. Mrs. Jordan —

Supervision of inmates. Mr. Wallace — 1997

Salary for legal officer. Mr. Curtis — 1997

Severance pay for senior officials. Mr. Chabot — 1997

Statement

Natural gas price increases. Hon. Mr. Barrett — 1997

Routine proceedings

Committee of Supply: Department of Housing estimates

the amendment to vote 102.

Mr. Phillips — 1998

Point of order

Possible conflict of bills. Mr. Curtis — 2029

MONDAY, MAY 5, 1975

The House met at 2 p.m.

Prayers.

HON. D. BARRETT (Premier): I ask the House to welcome a

group of students from Port Coquitlam Senior Secondary School,

grades 11 and 12, who are accompanied by Mr. Anderson, their

teacher.

MR. H.D. DENT (Skeena): Mr. Speaker, I ask the House to join

with me in welcoming a group of 27 students from Cassie Hall

Elementary School in Terrace together with their teacher, Mr.

Ed Ansems, and his wife, Mrs. Sharon Ansems.

MR. P.C. ROLSTON (Dewdney): Mr. Speaker, there are several

people from the United Church convention who are celebrating

the 50th anniversary of the United Church in Victoria. Included

in the gallery are Dr. Al Forrest, the well-known editor of the

United Church Observer, Bet Starkey and Lois Boyce from

the Outreach division of the United Church. It seems that some

of the Christians are in the gallery today watching the lions

fight it out on the floor of the House. I'd like them to be

welcome today.

MRS. K. SANFORD (Comox): Mr. Speaker, seated in the gallery

today are three community-minded citizens from the village of

Cumberland. I would like the House to join me in welcoming Dede

Hofmann, Myrtle Knowles and Grace Coulter.

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, in

the gallery today is another group of about 21 students,

accompanied by Mrs. H.E. Bryan, from Gulf Island Secondary

School, School District 64. I would ask the House to welcome

them.

MR. SPEAKER: Hon. Members, on Friday the Hon. Member for Oak

Bay (Mr. Wallace) was questioning a matter of privilege dealing

with something that occurred in the Committee of the Whole

House. I think what he was asking for was some information,

really, rather than a question of privilege. I can't find that

it's a question of privilege, but I do point out to Hon.

Members that in examining the estimates you'll find, in keeping

track of expenditures that are required, that they must be

under the Audit Act, either issued by warrant of the

Lieutenant-Governor or by a direct legislative sanction

contained in the Audit Act, sections 18, 19, 21, 24 and 25.

His difficulty in this matter would have been explained, I think, had he looked

at those sections, because where there is an expenditure for this year for staff

and there was no expenditure shown in the estimates for last year in the left-hand

column showing the 1975 estimates, you look then to contingency expenses as

shown in vote 60 in the Finance department estimators, which is for all departments

of government. There is $5 million set aside in that vote to take care of contingencies

that would include the item that he was questioning. I think it may clear it

up for him if he looks at those sections.

MR. G.S. WALLACE (Oak Bay): Thank you, Mr. Speaker. Perhaps

you could explain to me, then, since I'm no wizard in

understanding all the minutiae of the Audit Act, how a warrant

for $500,000 shows that $263,000 came out of that special

warrant and not out of contingency.

MR. SPEAKER: All I know is that a warrant for a new

provision that has not previously existed has to be authorized

through those sections. If you read that, I think it will

explain itself. I don't want to take the time of the House

doing it; I just refer those sections to you to study. If you

have any further problems in relation to tracking this down,

I'm sure that the public accounts committee would be of

assistance.

MR. D.A. ANDERSON (Victoria): On a point of privilege, Mr.

Speaker, In the light of serious statements made recently by he

Hon. J.V. Clyne, one of B.C.'s most noted industrialists and

jurists, namely to the effect that the senior administrative

officer of the government has been lying — and this has been

printed by the Province newspaper this morning — may I

ask, Mr. Speaker, whether you'll take under advisement the

question as to whether a breach of privilege has occurred, a

breach of privilege affecting all Members of this House, and

whether the said J.V. Clyne and the Province newspaper

should be called to the bar of the House?

MR. SPEAKER: I think the Hon. Member knows that statements

that he or any other Member may make outside the House are

really not the business of the House, nor anything that the

public may say about him or any other Member of this House,

including in this case the Member to whom you referred. It is

not the business of this House unless it occurred to do with

something in our duties within the House. I think that's a

clear distinction. Without even having to go further, I think

you can understand that that is the situation in this

particular instance you referred to.

HON. MR. BARRETT: Mr. Speaker, to put the Member's mind at

rest, I've already stated that I did

[ Page 1994 ]

not name Mr. Clyne as a fund-raiser for the Social Credit

Party. The notes of one of the reporters there confirm

that.

MR. SPEAKER: In any case, it is not a matter of privilege

for this House.

Introduction of bills.

AUTOMOBILE INSURANCE

AMENDMENT ACT, 1975

Hon. Mr. Strachan presents a message from His Honour the

Lieutenant-Governor: a bill intituled Automobile Insurance

Amendment Act, 1975.

Bill 69 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

INSURANCE CORPORATION OF BRITISH

COLUMBIA AMENDMENT ACT, 1975

Hon. Mr. Strachan presents a message from his Honour the

Lieutenant-Governor: a bill intituled Insurance Corporation of

British Columbia Amendment Act, 1975.

Bill 68 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

Oral questions.

BURNING OF LOGS ON

HYDRO RIGHT-OF-WAY

Mr. A.V. FRASER (Cariboo): I have a question to the Minister

of Lands, Forests and Water Resources and also in his capacity

as director of B.C. Hydro. Has the Minister any justification

to give the House on a reported order that 2,000 truckloads of

logs will be burned on the Hydro right-of-way between Telkwa

and Terrace because of decisions of the fish and wildlife

branch preventing their removal?

HON. R. A. WILLIAMS (Minister of Lands, Forests and Water Resources):

I'll take the question as notice, Mr. Speaker.

PAYMENTS FOR

NANCY GREENE PROPERTY

HON. R.A. WILLIAMS: On another question last week from I think, one

of the Members of the Liberal bench whom I don't recall regarding the acquisition

of property held by Nancy Greene Ltd. Further information, I would note, indicates

that the payments, as I understand it, up to April, 1975, for the said property

at Lost Lake are some $163,500. In addition there are ski survey analyses and

outside consultants' fees of some $33,000. Legal fees, interest, taxes and others

would bring the total to approximately $210,000. Our Lands department appraisals

on the basis of current values are $246,450 for the said property.

MR. G.B. GARDOM (Vancouver–Point Grey): As a supplementary

to the response of the Hon. Minister, is he prepared to table

in the House the appraisals of his department? It's been our

understanding there weren't any independent appraisals outside

of the department.

HON. R.A. WILLIAMS: I've given the House the information,

Mr. Speaker.

MR. GARDOM: Mr. Speaker, on a supplementary to the Hon.

Minister, he has not given the House the appraisals. I'm asking

the Hon. Minister if he will undertake to file with the House

the de facto appraisals, the documents themselves. It's a

pretty simple question.

HON. R.A. WILLIAMS: The figures that I've been given are

those, and that is the data the House is receiving.

MR. GARDOM: Was that the only appraisal?

Interjection.

PROPOSED OIL REFINERY

MR. D.E. SMITH (North Peace River): Mr. Speaker, my question

is to the Hon. Minister of Mines and Petroleum Resources. In

view of the 180 degree about-face in policy between your

statements to a resource conference indicating you are not

happy about having another refinery in the province and the

Premier's statements indicating that a refinery will be built

by the B.C. Petroleum Corp., will you indicate whose policy is

the correct one — at least, for today, Mr. Minister — yours or

the Premier's policy? We'd like to know, for the benefit of the

House.

MR. FRASER: You'd better leap for it.

MR. SMITH: Leap where?

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Speaker,

you read the

article in the paper. If the paper felt that I was, in my statement

there, unhappy, I didn't intend to give them that idea, except that I did say,

the same as the Premier had said, that if there's no oil there'll be no

[ Page

1995 ]

refinery. I feel that a lot of people are going off

half-cocked about this refinery, that it's a fait accompli; and

it is not a fait accompli.

MR. SMITH: A supplemental. Assuming a supply of oil was

found, either here or from our neighbouring province of

Alberta, are you in favour of the B.C. Petroleum Corp. building

a refinery in the Province of British Columbia at this

time?

HON. MR. NIMSICK: That's a decision to be made in cabinet,

not on the floor of the House.

MR. SPEAKER: I must point out that the question as such is

hypothetical and also has to do with what advice a Minister is

prepared to give the Crown in cabinet.

MR. D.A. ANDERSON: To the Premier and Minister of Finance:

In view of the doubts of the Minister of Mines about the

security of the source of supply of crude oil, may I ask the

Premier once more whether or not he has received any assurance

from Alberta or from any other source of crude oil for the

projected refinery?

HON. MR. BARRETT: Mr. Speaker, we've canvassed this

thoroughly, and I'll repeat the answer I gave to the Member on

the same question and what the Minister is saying. know it's

very elementary and difficult to appreciate; so I'll say it

slowly as I've said two other times in this House: if there is

no oil there will not be a refinery.

MR. D.A. ANDERSON: Your statement said there would be a

refinery regardless.

BEACON BODY SHOP APPRAISALS

HON. R.M. STRACHAN (Minister of Transport and Communications): Mr.

Speaker, last week the Member for South Peace River (Mr. Phillips) asked me

some questions regarding the acquisition of the Beacon Body Shop by ICBC. There

were appraisals made and the appraisal figures, with the additional $41,000

for equipment, came to $437,000 as made by Robert Bridge & Associates of

Vancouver. An appraisal, with the addition of the $41,000, of $407,000 was made

by Penny & Keenleyside Appraisals Ltd., of New Westminster, and the actual

purchase price, again including the addition of $41,000 for equipment, was

$422,000 which, as you know, comes right between the, two appraisals that were

made.

You asked me some supplementary questions a second day. The purchase was made

on the basis that all buildings, improvements, fixtures and equipment shall

be sold and conveyed to the Insurance Corp. of British Columbia free and clear

of all encumbrances. To give effect to the purchase the solicitor for the vendor

was to discharge, release and remove from public record a list of various things,

some of which you mentioned the other day. A cheque in the amount of $422,000

less an adjustment for the vendor's portion of property taxes was delivered

to the barrister and solicitor for the vendor in trust on the day of the closing

on the understanding that all encumbrances should be discharged or released

and removed from public record and a deed of land be registered in the appropriate

land registry office in the name of the Insurance Corp. of British Columbia

before any funds are released.

MR. D.M. PHILLIPS (South Peace River): I also asked the

Minister last Thursday if there were any mortgages on that

property that were past due or behind in payment when the

negotiations started. Would the Minister advise?

HON. MR. STRACHAN: There was a mortgage in favour of the

Industrial Development Bank dated August 28, 1972, in the

amount of $195,000, of which approximately $186,000 represented

the unpaid balance at the date of closing. It's my

understanding that it may have been a couple of days late, but

not to any consequence. That's not important. The important

factor is that everything must be discharged before the money

is paid out. The corporation must come out absolutely clear

and clean from any encumbrance of any kind.

HELPING HAND CLUB INVESTIGATION

HON. P.F. YOUNG (Minister of Consumer Services): Mr.

Speaker, the Hon. Attorney-General (Hon. Mr. Macdonald) took as

notice a question during my absence some weeks ago pertaining

to a question asked by the Hon. Member for Langley (Mr.

McClelland) regarding Pat's Unique Plan and the Helping Hand

Club.

We have received information from the consumer protection

division of the Department of Justice in Portland, Oregon, to

the effect that these two enterprises have agreed to cease

business. A postal inspector met with the operator on April 18

and obtained his written agreement to return all mail

addressed to either of the two businesses. He was described as

a retired man of no apparent criminal intent, and he had only

received a few replies to the mailing. I trust that will settle

the matter for the Member.

STATEMENTS BY PREMIER ON

SOCIAL CREDIT ORGANIZATION

MR. P.L. McGEER (Vancouver–Point Grey): Mr.

[ Page 1996 ]

Speaker, to the Premier. He was called a bald-faced liar by

Mr. Clyne, and he said that one of the reporter's notes

confirmed that he, indeed, did not name Mr. Clyne. I wonder if

the Premier could tell us today what the reporter's notes did

say. Who did he name in that speech?

MR. SPEAKER: I don't think this is a proper subject for

question period since it does not relate to any department that

I know of.

MR. McGEER: It relates to the....

MR. SPEAKER: ...publicity department is all that I can

think of at the moment that it relates to.

MR, McGEER: No, no. This relates to the Premier, Mr.

Speaker, and his discharge of duty to the public of British

Columbia and his credibility as a witness. Mr. Speaker, you are

running interference for the Premier.

[Mr. Speaker rises.]

MR. SPEAKER: Order! I ask the Hon. Member to withdraw that

statement. If you can show me anywhere in our books of

authority that you can ask questions that have nothing to do

with the business of this House or any department of

government, please inform me of it so that I may bear it in

mind in future. But I don't run interference for anyone in this

House. I want you to withdraw that statement. I think it's

disgraceful. Would you withdraw that statement?

[Mr. Speaker resumes his seat]

MR. McGEER: Yes, Mr. Speaker, I'll withdraw that statement. Now you

have given me an opportunity to rephrase the question, perhaps making it a little

more relevant to the Premier's duties to the public and to this House.

The Premier apparently made assertions about the behaviors

of one political party in this House. The veracity of his

statement was challenged and the Premier has said to this

House this afternoon, in answer to a question raised about

privilege, that the reporter's notes said, in fact, he did not

make that statement. But, Mr. Speaker, the Premier did not

explain to us what he did say at that meeting. There were three

individuals named; he mentioned only one.

MR. SPEAKER: Order, please!

MR. McGEER: We would like to know whether he names Mr.

Bonner...

MR. SPEAKER: Order. This is not a proper question for....

MR. McGEER: ...both of whom have also denied....

[Mr. Speaker rises.]

MR. SPEAKER: Would the Hon. Member be seated? This is not a

proper question for question period. If you have a point of

privilege to do With this matter, you should raise it as a

point of privilege. But it does not occupy question period.

Interjections.

[Mr. Speaker resumes his seat.]

MR. SPEAKER: I suggest you look in Beauchesne and you

will readily see why it doesn't. I have already explained.

Interjection.

MR. SPEAKER: Delighted.

Interjection.

MR. SPEAKER: Would the Hon. Member for North Okanagan please

ask the question.

CHARGE TO REGIONAL DISTRICTS

FOR PARKLAND IMPROVEMENTS

MRS. P.J. JORDAN (North Okanagan): I found the topic so

fascinating I nearly forgot my question. But I would like to

address it to the Minister of Lands, Forests and Water

Resources in hopes that he knows something that's going on in

his department.

Would he confirm the fact that he has initiated a new policy

which would charge regional districts a percentage of capital

improvements of parklands when such a parkland or parklands are

turned over to the regional district for local administer

ration?

HON. R.A. WILLIAMS: I'll take the question as notice.

MRS. JORDAN: A supplementary.

MR. SPEAKER: Well, why not wait until you get the answer and

then ask your supplementary and make a note of it?

MRS. JORDAN: This is pertinent. He can't possibly look it

up, because I'd like to give him the specific case that would

help him. I'd like to ask him if this will apply to Silver Star

Park in North

[ Page 1997 ]

Okanagan. Why did this statement come out surreptitiously

from a member of the Lands branch when negotiations between the

regional district and the Department of Recreation and

Conservation were all but completed? Why, in fact, doesn't the

Minister seem to know anything about what's going on in his

department, even policies?

HON. R.A. WILLIAMS: I can understand the frustrations of the

Hon. Member. North Okanagan at last has new parks which it

didn't have when she was a cabinet Minister.

SUPERVISION OF INMATES

MR. WALLACE: To the Attorney-General. In view of the percent

tragic suicide in a New Westminster jail due to inadequate

supervision of an inmate, has the Attorney-General taken any

action to recommend the installation of closed-circuit

television in city cells as recommended by the coroner's jury

in New Westminster?

HON. A.B. MACDONALD (Attorney-General): This was the

question of a belt, I think. I think that has to be looked at

very closely to make sure that such belts are not available to

prisoners in that situation. On the question of closed-circuit

television, we haven't given consideration to that.

MR. WALLACE: A supplementary, Mr. Speaker. In view of the

fact that there is a fairly regular incidence of suicides under

somewhat similar circumstances, has the Attorney-General made

any decision about carrying out a general investigation of

supervisory procedures in jails?

HON. MR. MACDONALD: I'll take that under consideration.

SALARY FOR LEGAL OFFICER

MR. CURTIS: To the Attorney-General. Newspapers including the Daily Colonist of Victoria for April 22 of this

year, carried a display advertisement for the Province of

British Columbia headed: "Career Opportunities." Under the

category in that ad of legal officer, competition No. 75-1290,

is a position offered by the Department of the Attorney-General

for a qualified person with a recognized Bachelor of Laws

degree with "preferably one year's experience in criminal law."

Would the Minister confirm that the salary is as quoted in the

advertisement — that is, a salary range of $24,290 to $30,900

per annum?

HON. MR. MACDONALD: I'll take it as notice, Mr. Speaker.

SEVERANCE PAY FOR SENIOR OFFICIALS

MR. J.R. CHABOT (Columbia River): To the Minister of

Economic Development. The Minister on the weekend admits

creating somewhat of a precedent in offering severance pay to

the former Deputy Minister, Mr. Les Hempsall, on his

resignation. Could the Minister advise the House whether all

senior officials resigning from any government department are

now to be offered the equivalent of six months' severance pay?

If not, on what basis is the decision to offer severance pay to

be made?

HON. G.V. LAUK (Minister of Economic Development): Well, Mr.

Speaker, in this isolated incident I think the severance was

justified. As far as creating a precedent in general policy, I

don't think it does so.

HON. MR. BARRETT: May I ask for leave to make a brief

statement to the House on natural gas, rather than take up

question period?

Leave granted.

NATURAL GAS PRICE INCREASES

HON. MR. BARRETT: Mr. Speaker, I wish to inform the House

that the federal Minister of Energy, Mines and Resources, Mr.

Donald Macdonald, has notified us and made a public

announcement on the new increases in natural gas, simultaneous

to our announcement today, The announcement is that on August 1, 1975, the price of

exported natural gas will go to $1.40, and on November 1 it

will rise to $1.60. I said at that time it was a welcome

increase. We are still under priced according to the United

States' own evaluation of natural gas.

I want to congratulate and thank people who helped us so

much — the B.C. Energy Board and the B.C. Petroleum Corp. — and

I want to say how welcome it is that we are finally beginning

to get a fair return from our natural gas, for which,

unfortunately, we have a long-term contract, signed by the

former administration. Nonetheless, the price must go up again,

and this is confirmation that the municipalities will receive

the $20 million as announced earlier.

MR. D.A. ANDERSON: Mr. Speaker, I would like to congratulate

the Premier on making this announcement, which is a

long-standing policy of boot governments going back at least a

year in both cases. We, as he does and as his party does,

believe that the price of gas should reflect world value.

The question comes, of course, as to what the

[ Page 1998 ]

amount of money obtained from the United States customers

for this gas will be used for if, indeed, it is not possible to

put this into a refinery because of a lack of a raw material

source from Alberta. I trust that in the near future we will be

receiving some word from the Premier on the success or

otherwise of his negotiations with the Alberta authorities,

which he keeps telling us about.

MR. WALLACE: Mr. Speaker, we also are pleased at the

announcement. I just have one question, in the light of a great

deal of the discussion that preceded the energy conference and

subsequent publicity. On November 1 the price will go to $1.60,

which is still well below the kind of target figure which the

Premier and many others have stated would be reasonable. I

wonder if, in the agreement with the federal government, the

Premier can tell us what kind of frame has been committed from

November 1 at that $ 1.60 price?

In other words, is there any suggestion that within the

not-too-distant future that $1.60, which is still unreasonable

in world values, is to be renegotiated, or is there any

commitment that this price must pertain for at least a year or

18 months? What is the condition on which we are being allowed

to charge $1.60 on November 1?

HON. MR. BARRETT: Mr. Speaker, may I have leave to

respond?

Leave granted.

HON. MR. BARRETT: Mr. Speaker, there is no commitment from

the federal government beyond the commitment to raise the price

to $1.60 on November 1.

You must recall that there is a certain atmosphere that

these negotiations have taken place in. When British Columbia

increased the price from 32 cents to 57 cents, at that time the

present federal Minister of Energy attacked us for being savage

for increasing the price so rapidly. He's increased it on the

basis of his own approach now, a year later. I would never

accuse him of being savage; I am just responding in retrospect

of what the stage was in history. We have made the case to

$1.40 and to $1.60.

Dr. Tussing, who is on President Ford's own staff, has

publicly stated that the equivalent price of natural gas in BTU

exchange, with oil, should be between $2.10 and $2.25 per 1,000

cubic feet. We hope that the natural gas price will rise to

that equivalent as soon as possible.

I am pleased again that the federal government has moved to

$1.60. Hopefully there will be another increase within the

year.

MR. PHILLIPS: In response to the Premier's announcement today, I would

like to say that I am glad that he took the suggestion of this party in the

spring of.... (Laughter.)

HON. G.V. LAUK (Minister of Economic Development): Once more

with feeling, Don.

MR. PHILLIPS: The statement from this party is clearly in

the record in the spring of 1973, and I would also like to say

that in view of the tremendous increase in the price of

petroleum products in the last two years, the Premier has

stepped in and taken advantage of this bonanza to the province

in view of the world prices for petroleum products.

HON. R.A. WILLIAMS: You voted against the legislation.

HON. MR. BARRETT: You voted against the petroleum

corporation.

MR. SPEAKER: The Hon. First Member for Vancouver–Point Grey

(Mr. McGeer) wanted the citations. I thought I would give them

to you right now, before we go on.

Page 148 of Beauchesne , item (

x) and (dd) are matters that

deal with matters not officially connected with the government

and deal with an action of the Minister which is not

responsible to parliament. So I would point out that while it

was great fun politically, I can't find any authority for your

question.

MR. McGEER: I'll be back.

MR. SPEAKER: I'm sure you will.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF HOUSING

(continued)

Vote 102: Minister's office, $150,127 — continued.

On the amendment.

MR. D.M. PHILLIPS (South Peace River): I am pleased to be

able to have some time this afternoon to speak on this

amendment. As I recall when the amendment was first made, the

closure motion which the Premier brought into the House

precluded me from finishing my remarks at that particular

time.

Before getting into the actual responsibilities and the

problems that we have in housing in British

[ Page 1999 ]

Columbia, Mr. Chairman, I would like to spend just a few

moments, I hope, candidly surveying the Casa Loma issue with

the Minister of Housing.

Before we get into the fact that the Minister has turned a

crisis in housing in British Columbia into a complete

catastrophe, before we discuss the Minister's inability to make

decisions, before we discuss the scandal which surrounds the

purchase of Dunhill Development over one year ago — and to

which we still have no answer from the Minister — and before we

discuss his unusual methods of land acquisition in the

province, before we discuss the Meadowbrook deal, before we

discuss the Burke Mountain issue and the numerous other

unanswered questions in the department, and as I say, I want to

be perfectly candid with the Minister and I would like him to

be candid with the House, I would like the Minister to answer

some of the questions which we have posed prior to this

date.

Mr. Chairman, I think it is the responsibility of that

Minister to be completely candid with this House and to be

honest with this House. He must realize that when given

information which does not entirely agree with the information

which he has, it is our responsibility, as Members of the

opposition to explore and find out where the truth is. I would

like the Minister to look at it in this light. We have been

given information; if we are wrong, I would like the Minister

to tell us we are wrong. But I would like the Minister to come

down off of his high horse and the defensive attitude which he

has taken prior to this date about this whole Casa Loma issue.

It should be out in the open. If what he says is completely

true and if what the directors of Casa Loma say is completely

true, he certainly has no right to be defensive about Casa

Loma. None whatsoever.

I am afraid, Mr. Chairman, that the Minister is not being

completely candid with the House.

MR. CHAIRMAN: Order, please. I would ask the Hon. Member if

he is suggesting that the Hon. Minister has been dishonest in

his remarks?

MR. PHILLIPS: You are the one who is making the suggestion.

Are you asking me to say yes to that question?

If you will allow me to continue, I intend to bring up some

areas where I don't feel the Minister has been completely

candid with the House. If you will just leave me alone, we will

go into those areas almost immediately.

MR. CHAIRMAN: Order, please. Would the Hon. Member

continue?

MR. PHILLIPS: Thank you, Mr. Chairman.

The one unanswered question that seems to be most prevalent with regard to

the Casa Loma issue is: when did Dunhill Development actually start negotiating

with the directors of the Casa Loma project? That has a great deal of bearing

on the whole situation, even though the Minister has filed with the House an

affidavit saying that the directors of Casa Loma at no time offered the assets

of Casa Loma for sale at less than $3.1 million.

There were negotiations going on between the directors of

Casa Loma and the sub trades and all the creditors. All of a

sudden, the attitude of the directors of Casa Loma is

completely changed from one of wanting to unload the whole

project, trying to do maybe what is right by the creditors, to

one of having a little muscle and saying: "Okay, we don't have

to settle."

I feel, and I have every right to feel, that that change in

attitude toward the creditors came when Casa Loma either

approached Dunhill Development or Dunhill Development

approached Casa Loma to purchase the entire assets and to

purchase them at a very good price.

That would allow the Casa Loma people to come out of it

without any indebtedness and to make, as the Minister has said,

a profit. I think this is very, very important because it does

have a bearing.... The Minister can hide under all the

legality he wants to; we're looking here at possibly a moral

issue.

We also want to know when that first application was made to

CMHC for mortgage money. Was it made before Dunhill made their

approach to Casa Loma or was it made after?

There is still a further unanswered question: what appraisal

was carried out on the Casa Loma project to determine the price

the government paid? I am in no way referring to the

quantitative survey that was done by the creditors and the Casa

Loma directors to determine how much of the project was

complete. I want to know what other appraisal of the assets was

carried out. Would the Minister table them in the House? Who

did the survey? When were they done?

AN HON. MEMBER: Hear, hear!

MR. PHILLIPS: The Minister has not given us those

answers.

I feel that there was the promise of a deal with the Casa

Loma directors and Dunhill that gave the directors the muscle

to settle their claims for 40 cents on the dollar.

The date is very important because here we have a renewal of

a mortgage to borrow an additional $170,000. The agreement is

between Casa Loma Motel Ltd., Coronation Credit Corp. Ltd. and

Mr. Gangji, a businessman, who is one of the directors of Casa

Loma. After Coronation Credit agreeing to put up $1.3 million,

and the mortgage payment being somewhat in arrears, then on

September 18, 1974, with the mortgage payments in arrears,

Coronation

[ Page 2000 ]

Credit advances an additional $170,000 to Casa Loma Motel

Ltd. I am just wondering if it was not on the basis of some

agreement made between Dunhill and Casa Loma that would give

the directors of Casa Loma the muscle, as it were, to go the

Coronation Credit and borrow an additional $170,000. This was

executed on September 18, 1974, just shortly after the

settlement of 41 cents on the dollar to the creditors.

Then again, on October 1, 1974, we have SG&S Investments

Ltd., which we have proven is owned by some of the directors of

Casa Loma, going to the Toronto Dominion Bank and borrowing

money on their mortgage. This again is dated in October. I'm

just wondering on what basis, the directors had to go and

receive these additional moneys if it were not for a prior

arrangement made to sell. If, as the Minister says, the

agreement was made on the basis of getting rid of all the

creditors, did the directors of Casa Loma actually force the

creditors to settle at 40 cents on the dollar?

This morning, all of the debts have not been settled yet on

the Casa Loma deal. I have a letter here which went to the MLA

for the area — Dennis Cocke, Parliament Buildings — from the

Credit Bureau of New Westminster Ltd. re Beaver Lumber &

Supply Co. Ltd. versus Coastside Construction Co. Ltd. — $213.80 — and

Northwest Propane Ltd. versus Coastside Construction Ltd.— $2,974. The letter says:

"We wish to draw to your attention as MLA for this area

a matter concerning the Casa Loma development. We have been asked to act as

agents for the creditors shown above. The accounts are owed by Coastside Construction

Ltd. But we are informed by Mr. Gerry Taylor of the company that no moneys have

been paid to Coastside Construction by the developers of Casa Loma apartments.

Coastside Construction is therefore unable to discharge these commitments."

Now it appears that the agreement was made on the basis

that all of the creditors would be satisfied. So I say right

now that the government has to take a second look at this deal,

because all of the creditors have not been satisfied. I wonder

actually how much, how far and how deep did the research of the

Department of Housing or Dunhill Development go. How deep did

they go into this matter of credits and liens before Dunhill

Development backed the Minister into this wasps' nest, or this

Minister backed in of his own accord?

Is the Minister completely naive? If he is, he can be

completely forgiven. It isn't the Minister who's getting stung;

it's the taxpayers of this province that are getting stung. He

can stand up and give us all the speeches about motherhood and

providing housing for senior citizens, but the fact is that

this is immoral.

This whole deal is immoral. If the Minister knew what he was

doing, then he should resign. If he didn't know what he was

doing, he should get up and explain to the House that he's made

a mistake and that he'll try to rectify the situation.

HON. L. NICOLSON (Minister of Housing): A point of order,

Mr. Chairman. I believe the Member is trying to suggest an

improper motive on behalf of myself. I would ask him to

withdraw.

MR. CHAIRMAN: Order, please. The Chair would rule that he

has not yet suggested an improper motive — he's asking

questions. I would ask the Hon. Member for South Peace River to

so phrase his remarks that they take the form of questions

rather than to imply an improper motive.

MR. PHILLIPS: Mr. Chairman, I'll accept your ruling. As I

said, I think it's time the Minister came down off his high

horse in this and got off the defensive position and started

to.... If the Minister had been completely candid....

Interjection.

MR. PHILLIPS: If you had been completely candid with this

House....

MR. CHAIRMAN: Order, please.

Interjections.

MR. PHILLIPS: I'll come up with something. You just leave

me. You just....

MR. CHAIRMAN: Order, please. Would the Hon. Member address

the Chair, please?

MR. PHILLIPS: Yes, Mr. Chairman. But the Minister is

defensive on this issue; his conscience is bothering him. He

knows he's in the wrong.

Mr. Chairman....

Interjection.

MRS. P.J. JORDAN (North Okanagan): You should know. You're

offensive to the taxpayers because you waste their money

stupidly.

MR. PHILLIPS: If this whole deal does not smell somehow or

other, how come some of the creditors on the Casa Loma project

were paid out at 100 cents on the dollar — particularly the

ones that had been previously in business with some of the

directors of the Casa Loma project? Goldwood Industries, for

instance, received payment in full — a settlement for their

lien of $9,200.

[ Page 2001 ]

Interjection.

MR. PHILLIPS: Payment in full — 100 cents on the dollar.

Interjection.

MR. PHILLIPS: Well, I'm asking you, Mr. Chairman: is there a

double standard here? Why did the Minister advise the House

that the cost of the completed project was $3,177,000 when the

completed cost is going to be $3,527,000? He made his statement

in the House specifically that it was the cost of the completed

project. Look it up in Hansard ; it's in there. He went

out of his way to specify that that was the completed price of

the project. Then when he was pinned down, he said: "That isn't

so at all. It's another third of a million dollars."

The Minister has still not advised the House if the 3 2

motel units are to be completed as living quarters for senior

citizens or if they are to be completed as motel units. I've

asked the question of the Minister several times in the

House.

I think that the House should be advised of the entire story

behind the Casa Loma project, because it has been taxpayers'

money that has been advanced to bring this project some air of

respectability.

But let's go back and talk about the history of the Casa

Loma project. The fact that $560,000 of the taxpayers' money is

being used to pay off interest on mortgages which were there

before the government moved in maybe hasn't got that much to do

with it. But if some of the subcontractors are going to suffer,

all of the sub trades should suffer, and so should the

directors of the Casa Loma project.

Mr. Chairman, the Minister advised the House that there was

a cut-and-dried contract with the original prime contractor and

the directors of Casa Loma. I would like to ask the Minister if

he has seen a copy of that contract.

Again, I'll say that if I'm wrong, I'd like the Minister to

advise me. But I would like to know if he's seen a copy of this

cut-and-dried contract, because I am advised....

Interjection.

MR. PHILLIPS: No, you tried to mislead the House and say

there was a cut-and-dried contract the other day.

MR. CHAIRMAN: Order, please. I would ask the Hon. Member to

withdraw the imputation that the Hon. Minister deliberately

misled the House.

MR. PHILLIPS: I didn't.... Well, I'll withdraw it if it

....

MR. CHAIRMAN: Would the Hon. Member continue?

MR. PHILLIPS: I'll tell you what happened, Mr. Chairman.

Along came a couple of young fellows in the contracting

business who had never had a contract this size before. They

gave an estimate as to what it would cost to built this motel.

Looking at the original blueprints, which, by the way, were

purchased for the sum of, I'm told, $5,000 by the directors of

Casa Loma.... They weren't purchased, they were bought at a

fire sale, because these blueprints originally cost about

$70,000, I'm given to understand. They looked at the blueprints

for the original deal and they sat down with the directors of

Casa Loma. There were certain deletions made from the original

blueprints. There was an estimate given by these young fellows.

I'm going to say, Mr. Chairman, that maybe these young fellows...as I say, they'd never had a contract this size before.

They weren't able to obtain a bond and they were at fault for

not properly checking out the people they were doing business

with and getting a cut-and-dried contract. They were at fault,

but they had faith in these people. They gave an estimate of

what it would cost to build this project, but that was all

right.

Even George Frizzel, the chartered quantitative surveyor,

when he did a survey for the barristers and solicitors in

charge of this project for the creditors, said: "We have not

attempted to value any of the variations but can provide some

figures for this work if required, and after the decision is

reached as to the type of contract entered into by the

parties." In other words, the quantitative surveyor could not

even find the contract.

So the contractors had faith in the people that they were

dealing with. They had faith in the directors of the Casa Loma

project. It was

an act of faith on behalf of these young

fellows who had been in the construction business but never had

a project this large before.

What happened, Mr. Chairman? One of the directors of the

Casa Loma project comes onto the project and starts changing

the estimate that was originally made. There again, Mr.

Chairman, if I'm wrong, I'd like the Minister to tell me I'm

wrong, but this is the information I have. The information was

gained from a meeting with the lawyers and the creditors where

Mr. Gangji actually admitted to changing the original

specs.

Maybe I could outline for the House some of the specs that

were changed on the job by one of the directors, Mr. Gangji,

who went around to the subtrades. He didn't even go through the

prime contractor. What was changed? The carpeting was changed

from a reasonably priced carpeting to a high-priced carpeting.

The fireplaces, which were deleted in the original estimate,

were added. The fire

[ Page 2002 ]

alarm system was changed. That's just to mention a few.

These were changed from the original estimates. Then when the

prime contractor wanted his money for these changes, what was

said? "Oh," the director said, "that was in the original

contract."

That's where these young fellows fell down, because they

didn't have a cut-and-dried contract. They were dealing with

people in

an act of faith....

MR. CHAIRMAN: Order, please. I would ask the Hon. Member to

relate his remarks to the administrative responsibility of this

Minister under this amendment.

MR. PHILLIPS: Mr. Chairman, it is the Minister of Housing

who purchased this project on behalf of the taxpayers of

British Columbia. As I said before, the Minister may be able to

cover this deal over with an air of respectability insofar as

the legal aspects of it go but, as I said in this Legislature

before, the Minister has a moral obligation to these

subcontractors, the families and children of which are

affected, because most of them have gone broke because of this

very project.

Even in the report from the quantitative surveyor, Mr.

Frizzell, dated July 23, 1974, he outlines the additions that

he felt were not in the original estimate: changes to the

reception area, changes to carpet grade, adjust for change in

lumber supply costs, supply and installation of drape track,

scored concrete block to exterior court areas in lieu of

siding, change in electrical service, change in the fire

system. This is where this project went afoul, Mr. Chairman —

not because the prime contractors did not do a good job of

building the building, but because one of the directors in

midstream was changing the specs, adding in the fireplaces

which were deleted from the original estimate.

That's why this government has a moral obligation to those

subcontractors, some of whom were paid off at 100 cents on the

dollar, others of whom were ground out at 41 cents on the

dollar.

interjection.

MR. PHILLIPS: Well, why did somebody get paid in full? As I

say, I want the Minister to be candid and I want him to advise

this Legislature how much checking Dunhill or the people acting

on behalf of Dunhill did. Did they meet with the lawyers who

were working on behalf of the creditors? Did they ask the

lawyers if one of the directors of the Casa Loma project had

admitted that he made changes to the original estimate? Where

do we stand on this, Mr. Chairman? Where do we stand?

We have this document which was tabled by one of the directors of Casa Loma

stating that the project had never been offered for sale before. But the document

says that Casa Loma Motel Ltd. had never offered the project for sale. Maybe

they didn't have a board meeting, but why was the prime contractor, when he

was going broke, trying to raise sufficient funds to buy the project out at

$2.4 million if it had never been offered for sale?

I want to know who is lying! If I've been lied to I want to

be told I've been lied to. If the directors of Casa Loma are

lying, they should appear before the bar of the House.

interjection.

MR. PHILLIPS: I've just read it.

HON. MR. NICOLSON: It was never a completed project. They

never offered a completed project for sale.

MR. PHILLIPS: Oh. I want to....

MR. CHAIRMAN: Order, please. I would ask the Hon. Minister

to wait until the Hon. Member for South Peace River has

finished his remarks.

MR, PHILLIPS: Aha! All right. Now we're getting down. Yes, I

appreciate that comment from the Minister of Housing. I

appreciate that comment very much.

Will the Minister, then, when he stands in this Legislature,

advise how much was in the contract, how much additional work

is going to have to go to complete the project? Is it

$750,000?

Mr. Chairman, I'm not going to belabour this point. I'm

going to sit down and let the Minister of Housing.... As I

said, I hope he's candid with the House. I hope he gets off the

defensive because, as I say, if we have been misinformed in the

opposition and the people who have given us this information

have been misinformed, I'd be quite happy to stand in this

Legislature and apologize, but what I want about this whole

Casa Loma deal is to have the truth and the facts so that this

project can be cleared of the smell that surrounds it in the

province today. That's why I'm asking the Minister to be candid

and truthful with this Legislature.

MR. D.A. ANDERSON (Victoria): Mr. Chairman, I wonder whether

the Minister would like to comment upon the remarks made with

respect to Casa Loma. Would he like to indicate whether he's

going to answer?

MR. CHAIRMAN: Would the Hon. Member address the Chair,

please?

MR. D.A. ANDERSON: Mr. Chairman, I wonder whether you might

indicate whether he's.... Well,

[ Page 2003 ]

as he apparently is sitting in his seat and is not getting

up, there are a large number of questions on the very specific

topic of Casa Loma which remain outstanding.

Let me point out, Mr. Chairman, that the Minister got into

hot water on Casa Loma because of the conflicting statements

given with respect to what was a completed project; that was

the original problem he ran into. Since then other questions

have come up. A question was raised a moment ago about Goldwood

Industries receiving 100 cents on the dollar on their lien,

while most others received 41 cents. I even have here a letter

from one subcontractor who received nothing. The letter is

dated February 26, 1975, signed by S. Hind, accountant for

Fiber-Cann Chemical Toilet Rentals Ltd. They received nothing

at all.

These questions have come up. The Minister has so far simply

thrown up flak, Mr. Chairman, in terms of "Well, are you for or

against senior citizens' housing?" and other equally fatuous

remarks when we are trying to deal with specifics of the Casa

Loma contract.

There is one very pertinent item of information which is

something as yet unanswered but should be answered — something

we've requested time after time, going right back I think to

March 5, two months ago. We've tried to find out when the

negotiations with the government began. Did they begin as the

Minister stated? Did they begin following the settlement of the

liens? Or did they begin before, as one lawyer for the Casa

Loma group, Thomas A. Dohm, Q.C., stated?

There is a very definite difference of opinion as to when

the negotiations started. I would like the Minister to focus

his mind in the few minutes ahead on that specific point: was

the government dealing with the Casa Loma principals at the

same time that the Casa Loma principals were dealing with the

lien holders? Were they offering to purchase the property? Were

they negotiating at the same time as those Casa Loma principals

were trying to settle with those lien holders at 40 cents on

the dollar or, indeed, in some cases, less? Does the Minister

know whether or not the CMHC loan was supplied for prior to the

settlement of the liens?

I wonder whether he would indicate to the House when the government applied

for that loan. Was it, in fact, within three days of the Casa Loma lien holders'

accepting the 41 cents on the dollar? Did all that work, in terms of evaluating

the property, deciding that it was a good thing, take place in those three days?

Did all the negotiations with the Casa Loma principals take place within those

three days? Was the request for the mortgage of over $3 million drawn up in

that period as well, Mr. Chairman? The critical question is whether or not the

lien holders were fairly dealt with. The question has been raised before: why

did Goldwood get 100 cents on the dollar and others, in

particular N.B. Electric, get so substantially less?

The most important question for us is the dates when the

government started negotiating for the Casa Loma property. We

have had very differing views on this. The Minister has had two

months to find the information. I think today is the day that

he should come clean with the House.

Another question is whether or not the building now meets

the NHA standards, which would permit a CMHC contract. Are the

electrical receptacles now more than the minimum 12 feet apart?

How about soundproofing? How about electrical outlets,

switchboxes? Are they back-to-back or are they three feet apart

as CMHC and NHA require? Is there a sprinkler system in the

parking lot? These are all questions which would affect the

CMHC loan. Although asked previously, none of those questions

have yet been totally answered.

Mr. Chairman, there are many, many things about the Casa

Loma which are questionable. I raised one with the

Attorney-General when I failed to get any success from the

Minister of Housing. I raised the question of registration

fees, and what happened? My letter went to the Attorney-General

on March 5. One week later, the lawyer for the principals went

on and paid an extra $210 registration fee on the basis of a

totally different registered value. That was the result of a

letter to the Attorney-General. But we have had absolutely no

success whatsoever with respect to the Minister of Housing, who

has consistently adopted the head-in-the-sand attitude that if

you are building or purchasing senior citizens' housing, it is

irrelevant who got taken, or whoever got cheated in the

construction. It is irrelevant as to whether the provincial

government perhaps assisted — and this is a question — in the

defrauding of those lien holders by dealing with the principals

at the same time that they in their turn were trying to fob off

the lien holders at a lower rate. Until we get some information

on this, Mr. Chairman, until we find out precisely what the

provincial government did, we are not going to be very

satisfied with the explanation.

Let me point out that the only area where we have had any

inquiry was done by the Attorney-General. Within seven days of

my letter to him, we get not an admission of guilt but just a

cheque, which would indicate that the property had been quite

undervalued, totally undervalued. But all the questions that

have gone to the Minister of Housing have been met with a stone

wall. If we don't get answers today, of course, or if we don't

get answers very quickly, the question is quickly going to come

up as to why he is stalling in this way. Why do we have to go

after him time after time to find out what the total completed

price would be? Why did he not tell us earlier on? Why did we

have to demonstrate to him that he had lost some $315,000 in

his

[ Page 2004 ]

calculations and then later on lost other thousands in his

calculations? Only when we came up with these errors, when we

came up with these areas which he had not explained, would he

in turn furnish an explanation. Up to that point, he just said:

"all is well; all is fine; we got our money's worth; that's all

we care about."

We think that that is not good enough because the question

still remains, and it is the fundamental question, essentially

the first one asked, Mr. Chairman, and that is: when did the

government start dealing with the Casa Loma principals? Today

is the day that this should be answered.

HON. MR. NICOLSON: Going back to the Member for South Peace

River, he asked when Dunhill started negotiations. I answered

this in Hansard April 17, 1975, in the evening, page

1482 of Hansard , in response to questions by the Member

for West Vancouver–Howe Sound (Mr. L.A. Williams).

I don't know, Mr. Member, whether those answers satisfy you,

but I recall that Member saying that finally he had some

response to those questions, and I believe at that time he

seemed to be satisfied. It was quite thoroughly canvassed at

that time.

When the application was made to CMHC? Mr. Member, that

application has been filed in this House. The House has

knowledge of that application.

Interjection.

HON. MR. NICOLSON: What appraisal was made? Central Mortgage

and Housing made an appraisal. It's their internal document. I

have said that the cost of this project is about $26 per square

foot. Comparable projects coming on stream at this time are

over $30 a square foot. This one also involves underground

parking, I believe, at the ratio of 1.25 to 1. It's underground

concrete parking, and I would say that at current costs that

would run about $4,000 per unit.

Interjection.

HON. MR. NICOLSON: Well, Mr. Member, I'll get to that.

Now you have talked about additional loans from Coronation Credit — September

18, 1974, you said. A mortgage from Toronto Dominion — you mentioned some date

in October. But, Mr. Member, I have pointed out that there was no way we could

make what I would call a final, binding agreement with Casa Loma until we had

commitment from Central Mortgage and Housing. There was no way that we could

know whether Central Mortgage and Housing had the funding until December. Talks

did go on, as I said in response to the Member for West Vancouver–Howe Sound,

and started at some fairly early date. I think the first contacts were prior

to that September date. If they decided to take some chances, if Coronation

Credit decided to go along on that type of an assurance, well, that was their

risk because there was certainly no firm assurance from the Crown, because there

is no assurance until I sign the agreement; and that didn't take place until

well into December.

MR. D.A. ANDERSON: Negotiations took place, though.

HON. MR. NICOLSON: Well, what you call negotiations, you

know haggling over prices and such — we knew that things were

available and we talked to all kinds of people. As I mentioned

once, Mr. Link had a piece of property for sale. We were

courteous and we talked to him about it, and the next thing you

know it's in headlines: "Department of Housing Making Deal with

Mr. Link;" Well, it just turned out that his price wasn't

right, and there was no deal.

MR. D.A. ANDERSON: Don't speculate yourself. Tell us what

happened. Link is another case. Tell us what happened here.

HON. MR. NICOLSON: There was talk about why I said that the

price was $3.1-some odd million. That is the completed purchase

price from Casa Loma Motel Ltd. As I've explained, the funding

will be advanced, I believe, this June. The anniversary date of

the mortgage will be January 1, 1976. That is Central Mortgage

and Housing policy. Mr. Member.

I don't like to be an apologist for Central Mortgage and

Housing policy, but our purchase price was $3.1 million, There

will not be a payment made on that mortgage, because of the

Central Mortgage and Housing policy, until June of 1976, I am

informed. We will therefore capitalize the interest, and that

is the difference between the approximately $3.1 million and

the $3.5 million price.

There were a couple of other things. There was a contingency

for the B.C. Housing Management Commission for possible

improvements that they might request, but the purchase price

for the completed agreement was as announced.

MR. D.A. ANDERSON: How come you didn't tell us that until spilled the beans on you?

HON. MR. NICOLSON: Spilled the beans? Mr. Member, that

wasn't what I was asked. The concern was about what we were

paying Casa Loma Motel Ltd., not what the face value of the

mortgage was going to be from Central Mortgage and Housing. If

the questions had been more explicit, then we could have

answered the question.

[ Page 2005 ]

MR. D.A. ANDERSON: That was in all those unanswered

questions you have taken as notice.

HON. MR. NICOLSON: Well, look at the order I paper, Mr.

Member.

MR. D.A. ANDERSON : I'm looking at the record in Hansard .

HON. MR. NICOLSON: Well, if you want to ask questions like

that — excuse me, Mr. Chairman, through you — that require

detailed financial things...is someone supposed to be able to

recite back to the last cent, from memory, each and every

purchase price, et cetera? I think if you want that type of

answer, it should be put on the order paper.

MR. D.A. ANDERSON: You've had two months and you haven't got

it.

HON. MR. NICOLSON: Look at the order paper, Mr. Member. How

many questions are remaining there? Very few, and they'll all

be cleared up.

Okay, the contract and spec changes between directors and

contractors.

I must say that I am pleased to see that the quality changes

were upward revisions, as you mentioned: the rugs were of a

better quality, fireplaces, I would assume improved fire

alarms. But these changes, Mr. Member are something not to be

decided by myself.

I will say this: the matter was referred to the

Attorney-General (Hon. Mr. Macdonald), I believe that

investigation is still going on between those early contractual

matters among Casa Loma, Coastside and the subcontractors. It

is not for me to sit as judge and jury. I do know this: the

Crown, Her Majesty, is well protected.

Another question that was asked was how much it would cost

to complete the project. Well, our agreement is for the

completed project. If there should be a default, Mr. Member,

our contract is of such a nature that it would come to us at an

even lower price.

Dunhill. I don't believe that Dunhill met with Mr. Macdonald

until after matters were raised in this House, and that pretty

well handles that.

To the Second Member for Victoria (Mr. D.A. Anderson), an

inquiry is being done. It is being done by the office of the

Attorney-General. But it is nothing that really involves the

Department of Housing; it is a matter that transpired prior to

that time. We are amply protected by the terms of the j

agreement; it is a favourable agreement to the Crown.

I would like to read a letter. You say it is a motherhood

issue. Well, you can't seem to treat it that way. But I

anticipate some sort of criticism. I expect that from the

opposition in this type of case. But you know that....

Interjection.

HON. MR. NICOLSON: Yes, I'm willing to take a little bit of

heat for the senior citizens of this province, Mr. Member.

You're darned right I am!

Interjections.

HON. MR. NICOLSON: Here's a letter from the administrator of

the Senior Citizens' Service Bureau, and as administrator of

the Senior Citizens' Service Bureau in New Westminster she

says:

"I am constantly aware of the problem our seniors have in

finding decent accommodation at a reasonable rate. In New

Westminster alone there are some 8,000 seniors over the age of

60. The surrounding areas of Burnaby, Coquitlam, et cetera,

have many, many more. The need for housing in this area is

now."

Now that is the basis upon which this decision was made.

"How can I tell a pensioner to put his name on an

application form for subsidized housing with a list that is a

year or two long. He'll say: 'I may be gone by then. That's no

use to me.'

"The purchase of the Casa Loma complex in Burnaby through

the Department of Housing is a positive step by our government

toward a crisis situation, and a step that I personally

commend. Since the announcement of the purchase, our bureau has

received dozens of calls from interested seniors. We've

assisted in completing approximately 25 applications for this

accommodation in our bureau alone."

We've had these applications in our office.

Frankly, Mr. Member, or Members of the opposition, we don't

take these matters lightly. Certainly everything should be

looked into. But when all of that is settled and it sits there

idle, you have to take a little bit of responsibility. When you

realize that those units will be ready — I think they will be

ready by the end of this month — and it is a choice between

that or going to some place where zoning doesn't exist, going

through the whole thing, the planning and everything, it means

about 200 senior citizens will be displaced or have to wait for

two years longer than they would have to wait by this

particular action.

MR. G.F. GIBSON (North Vancouver–Capilano): Why did you

throw them out of Brentwood? It was must down the road.

MR. G.S. WALLACE (Oak Bay): If these gentlemen wish, Mr.

Chairman, to respond to previous questions, I'm quite willing

to give up my place for the moment.

[ Page 2006 ]

MR. PHILLIPS: Mr. Chairman, I can appreciate the Minister of

Housing, as I said, talking about the need for senior citizens

housing. That need has been there, evidently, or was it just

created a short time ago? You've had your portfolio since the

spring of 1973....

HON. MR. NICOLSON: It's been there since 1972.

MR. PHILLIPS: I presume it is growing. But we can't have the

end justifying the means. We've got to have consideration for

these 40-odd sub trades that were ripped off in this deal.

HON. MR. NICOLSON: Are you a judge?

MR. PHILLIPS: I'm just asking the Minister how much checking

he did. The Minister has said that all liens and encumbrances

must be paid off before they would advance any money to Casa

Loma. Well, how come Beaver Lumber and Supply Co. Ltd. and

Northwest Propane have not been paid off?

HON. MR. NICOLSON: They didn't have a lien.

MR. PHILLIPS: Oh, they didn't have a lien. And you didn't

check to see....

Well, there again, I say it is legal. But did you and/or

anyone from Dunhill have a meeting to determine what was

happening or did you just go in and make a deal with the

directors of Casa Loma without any regard whatsoever for those

40-odd small subtrades and the prime contractors? Did you have

a meeting with them? Did you try and determine why they were in

financial difficulties? Did you determine that one of the

directors of Casa Loma had changed the original estimate and

added, and this is what caused the financial difficulties of

the prime contractor? Did you determine this, Mr. Minister? Did

anyone from Dunhill determine this? Or did you just go in under

the guise of motherhood and say: "Look, get rid of all these

sub creditors and we'll buy it"?

You said in Hansard that the first deal was made on

September 20. Now on Casa Loma, and I am quoting from

Hansard : "When did negotiations come in?" "Casa Loma

Motels approached Mr. Paulus with an offer to sell in late

summer." In late summer. Now I asked you a moment ago: was it

the promise of a deal that allowed the directors of Casa Loma

to renegotiate their mortgages? And when do the mortgages come

due? How did they know that on the 15th day of July, 1975, they

would have money to pay off these mortgages?

HON. MR. NICOLSON: A point of order, Mr. Chairman.

MR. CHAIRMAN: The Hon. Minister on a point of order.

HON. MR. NICOLSON: The Hon. Member has, I am sure,

inadvertently misled the Members of the House. He has tried to

summarize some of my remarks by saying "first deal". I don't

believe that was what I said concerning activities in

September.

MR. CHAIRMAN: Order, please. The correction is accepted on

the part of the Hon. Member. Would the Hon. Member for South

Peace River continue?

MR. PHILLIPS: Well, I am just going by what you said. You

said that the first contact was made by the Casa Loma partners

and the Casa Loma directors to Dunhill.

HON. MR. NICOLSON: Is that a deal if someone comes into your

used car lot and says "hello"?

MR. PHILLIPS: No, that's not a deal.

HON. MR. NICOLSON: Well, that's not a deal then.

MR. PHILLIPS: But what commitments were made? Were any

minutes kept of this meeting between Dunhill and Casa Loma?

Were any minutes kept, and what was said?

HON. MR. NICOLSON: No, it wasn't at Watergate.

MR. PHILLIPS: Well, it wasn't. All right. I'd like to know

what was said because it seems to me more than coincidental

that the directors of Casa Loma would be able to go and raise

more money shortly after. The deal was made in the late part of

the summer, and on the 15th day of September they are able to

raise an additional $170,000 when the mortgage was already in

arrears with Coronation Credit. October 1 they are able to sell

their mortgage to the Toronto Dominion Bank — this is more than

coincidental. More than coincidental.

Had you talked to the people from Dunhill who entered into

negotiations? They must have had some strength, some assurance,

that the deal was going to go through. I can't see mortgage

companies and the Toronto Dominion bank advancing more money on

a project that just three short months before was completely

broke. They did offer it for sale in its uncompleted stage for

$2.4 million. They tried to raise mortgage money in every

brokerage house in Canada and some in the United States.

Do you mean to tell me — you are not that naive, Mr.

Minister — that without some basis and some strength of an

assurance that the government was

[ Page 2007 ]

going to buy this project, they could raise more money when

they were bankrupt? Then all of a sudden they are not bankrupt;

they can raise more money. It had to be on the assurance from

somebody from Dunhill that the government was going to buy

this. This is the whole point of this situation, Mr. Chairman.

It was this assurance that the directors of Casa Loma received

from Dunhill which gives them the muscle....

MR. CHAIRMAN: I would point out to the Hon. Member that

asking questions and making charges are two different things.

If the Hon. Member is making a charge, it should be done on a

substantive motion rather than in committee.

MR. PHILLIPS: Oh, we've gone through this motion that dies

on the order paper with this government with its crushing

majority. You might as well put the motion in the wastepaper

basket, Mr. Chairman, and you know it. You might as well put

the motion in the wastepaper basket — at least then the

janitors will probably read it and that's more than the

government will do.

MR. CHAIRMAN: Will the Hon. Member address himself to the

amendment, please?

MR. PHILLIPS: Mr. Chairman, the quantity survey I have here

indicates the project to be approximately 85 per cent complete

on July 23, 1974. Some of the areas of construction were 100

per cent complete such as the excavation, the demolition of the

previous building, the drainage, the framing material, the

aluminum entries, patios, doors and windows. As you go through

the project the entrance was 100 per cent completed, appliances

were 75 per cent installed — the project was approximately 85

per cent completed.

General conditions — 70 per cent completion; framing — 98

per cent; masonry — 89 per cent; rebar — 86; exterior siding —

98; roofing — 96; drywall — 76.

The project was 85 per cent completed. They offered it for

sale for $2.4 million. So it will take on that basis

approximately $360,000 to complete the project. How can the

government justify paying the difference between $2.4 million

and $7.1 million when the project would only require an

additional $360,000 to complete?

You say that the directors are not going to make any profit

on this deal. Who is going to make the profit which is going to

be made off of the backs of those small subcontractors? How

come some of the subtrades and creditors were paid off at 100

cents on the dollar while others only received 41 cents on the

dollar?

HON. MR. NICOLSON: It's not like a dredging contract.

MR. PHILLIPS: Mr. Chairman, how come? Did the Minister know

of this? Did the Minister bother himself to find out, or is

this another deal like when he bought Dunhill in the first

place and ripped off the taxpayers of this province to the tune

of $2 million? Even today, with this year's financial

statement, the assets are still not there. He ripped off the

taxpayers of this province over $2 million in the original

acquisition of Dunhill Development that hasn't created one

single housing unit in this province but has gone out and

purchased from private contractors housing projects already in

the planning stage.

Interjection.

MR. PHILLIPS: This whole sorry deal smells; the whole sorry

deal smells.

Maybe, Mr. Chairman, the Minister would like to advise us

once again on how much money was figured to complete the

construction from the condition the project was in when the

original deal.... I say "original deal" because I think there

was a deal made between Dunhill and Casa Loma originally. I

think there was a deal.

MR, CHAIRMAN: Order, please. Is the Hon. Member making a

charge?

MR. PHILLIPS: I'm just suggesting that I think there was a

deal made there.

MR. CHAIRMAN: Order, please. I think the Hon. Member is

making a very serious allegation. This should be done by a

substantive motion, not by making statements on the floor of

the House. It is an abuse of the rules.

MR. PHILLIPS: Oh, Mr. Chairman, let's take this motion

bit.

MR. CHAIRMAN: Order, please! Is the Hon. Member questioning

the rules of the House?

MR. PHILLIPS: No.

MR. CHAIRMAN: Is he suggesting that the rules of the House

should not be followed?

MR. PHILLIPS: I'm not questioning the rules of the House;

I'm questioning the motives of that government over there. You

put a motion on the order paper and you might as well throw it

in the wastepaper basket. I've said it before...

MR. CHAIRMAN: Order!

MR. PHILLIPS: ...and I'll say it again if you

[ Page 2008 ]

want me to.

MR. CHAIRMAN: Order, please. The Chair has no interest on

whether or not a motion will be called in committee. The

purpose here is to obey the rules in committee. I would ask the

Hon. Member to follow the rules in committee. The rules are

that no charge can be made in committee; it must be made by a

substantive motion against the Minister or a Crown agency. Will

the Hon. Member continue with the amendment?

MR. PHILLIPS: I would like the Minister to advise the House

how much money was determined to complete the construction of

the project from the condition it was in when the original

negotiations were carried out between Dunhill and Casa Loma.

The Minister just told me a few short moments ago that the

Government of British Columbia, or Dunhill, did not carry out

an appraisal on the Casa Loma project. I don't think, Mr.

Chairman, the Minister even carries out a proper appraisal. As

a matter of fact, I don't think anything the government does

has any bearing on appraised values.

Would the Minister table the appraisal that was carried out

by Central Mortgage and Housing Corp.?

HON. MR. NICOLSON: My name is not Barney Danson. You get

elected to Ottawa and you can ask him to table it.

MR. PHILLIPS: Does the Minister have a copy of the

appraisal? Does the Department of Housing or Dunhill

Development have a copy of the appraisal that was made by

Central Mortgage and Housing?

In other words, Mr. Chairman, he is telling me that if I

want to go buy a used car, I'll pay for it what any finance

company will mortgage it for. That's exactly what the Minister

is telling me. In other words, if Central Mortgage and Housing

will mortgage the project for $3.52 million, that's what he

should pay for it. He stands in this Legislature and says that

the cost is only $26 per square foot when other projects of

this type are costing $30 a square foot. I'll tell you why, if

that's the case: it's off the backs of those small

subtrades.

Does the Minister truly not figure that he has any moral

obligation to the families of these subtrades?

Interjection.

MR. PHILLIPS: Would the Minister like to advise if he feels

he has no moral obligation?

I am sorry, Mr. Member for Oak Bay (Mr. Wallace). I didn't

mean to be this long, but this project has got to have the

scrutiny of the taxpayers of this province, and we have got to

have the answers.

Will the Minister tell me: does he have a copy of the appraisal that was carried

out by Central Mortgage and Housing Corp., or did he just go on the figures

that were released to him by CMHC? Did he have a cost for completing the unit

from the state if was in when Dunhill started dealing with them through to the

completion of the project? Were the 32 motel units to be completed as living

quarters or as motel units? Would the Minister please advise us?

HON. MR. NICOLSON: Mr. Chairman, the Member has suggested

that somehow we gave a document or something, some sort of

assurance, whereby they could go and get a further line of

credit from Coronation Credit or the Toronto Dominion Bank.

Surely the Member doesn't underestimate the competence of the

Toronto Dominion Bank in that they would accept hearsay.

MR. PHILLIPS: They did have a document.

HON. MR. NICOLSON: To my knowledge, there have been no

questions asked, no inquiries made by the Toronto Dominion Bank

to my department and, to the best of my information, none to

Dunhill...

MR. PHILLIPS: They did have a document.

HON. MR. NICOLSON: ...nor to Coronation Credit.

MR. PHILLIPS: You are just proving they did have a

document.

HON. MR. NICOLSON: What document did they have, Mr. Member?

You are imputing this. You are the one who raises all the

spurious questions.

MR. PHILLIPS: They did have a document.

Interjections.

HON. MR. NICOLSON: You ask how much and I have said many

times how much we have paid for a completed project. I have

pointed out that the cost of that project was approximately $26

per square foot. There are CMHC inspectors there, there are

Dunhill inspectors and there are Burnaby inspectors on that

site to find out the quality of the project.

Take a currently-being-completed project, however, in

Burnaby, not of the Department of Housing, not of CMHC, but of

the Greater Vancouver Regional District. It is senior

citizens' housing. If you want to go look at it and make

comparisons, Mr. Member, it is right next to the Cascade

Drive-In on Canada Way. Laurel and Lynnwood is the address, Mr.

Member. The estimated cost of that is $38 per square foot. That

is the kind of appraisal that one can very readily make, Mr.

Member. You cannot make a

[ Page 2009 ]

normal appraisal of a half-completed building.

For you to suggest that the past history of this should

somehow enter into our figures.... I would imagine that

...

MR. PHILLIPS: You take no responsibility?

HON. MR. NICOLSON: ...because the project was started years

ago and because the capital costs came in before the cost of

materials went up, the price of this project is considerably

lower.

The lien settlements between contractors and subcontractors

might have a small bearing on that. I think you can figure

that out, Mr. Member. You know the amount that was settled

upon; you know it was settled at, what? — 40 or 42 cents on the

dollar. You said a dollar on the dollar, by the way, Mr.

Member, but I know you didn't intend to say that.

MR. PHILLIPS: To some of them. Why to some and not to

others?

HON. MR. NICOLSON: But that was a very small thing. Mr.

Member, you might have such an inflated ego that you think you

are judge and jury, but I don't.

MR. PHILLIPS: Do you not feel you have a moral

obligation?

HON. MR. NICOLSON: I happen to think that agreement's

reached on the advice of upstanding members of the bar, by

Bruce Macdonald, that opinions put forth by His Honor — and

still His Honour — Thomas Dohm, have some bearing, but neither

you nor I have that legal expertise. Neither of us were

consulted...

MR. PHILLIPS: I'm asking you.

HON. MR. NICOLSON: ...and to this date, I have not been

asked....

MR. PHILLIPS: How do you feel about your moral

obligation?

HON. MR. NICOLSON: I have had, I think, one letter...

MR. PHILLIPS: Do you have a moral obligation or not?

HON. MR. NICOLSON: ...from one of these people.

MR. PHILLIPS: Do you have a moral obligation or not?

HON. MR. NICOLSON: Mr. Member, it is a legal matter.

MR. PHILLIPS: You are naive.

HON. MR. NICOLSON: That is not my moral obligation.

MR. PHILLIPS: You're just plain naive and ignorant.

AN HON. MEMBER: Order!

HON. MR. NICOLSON: Agreements have been made. It was

settled. It is not for me to go back....

MR. PHILLIPS: You are naive and ignorant.

HON. MR. NICOLSON: No, I am not naive, Mr. Member. You are

naive. You talk about a deal happening when two people just

talk together. I'm sure you didn't run Aspol Motors that way,

Mr. Member. I am sure you didn't.

Interjection.

MR. D.A. ANDERSON: Mr. Chairman, the Minister has given us

some interesting details about a property at some other address

where it is $38 per square foot. He has talked about the bank

and accepting hearsay evidence. Thank goodness, my bank accepts

hearsay evidence all the time. He talked about a lot of things

which are irrelevant to the questions which have been put to

him. The questions which have been put to him....

HON. MR. NICOLSON: You ask irrelevant questions.

MR. D.A. ANDERSON: He keeps saying "irrelevant questions."

The fact is that for more than two months, back to February 25, I have been working on this matter and questioning him in the

House, and there is a string of unanswered questions in

Hansard as long as your arm. The Minister knows this. He

knows it is totally specious to talk about the order paper when

we have been talking about oral questions in the House. He

knows that too, or he should.

The fact is that the Minister today talked about what he

said to the House back in April when he talked about the

details of what took place before the lien holder settled with

the principals. He simply has not given, in that statement or

today, the details which would have cleared up this matter way

back when the question was first raised, somewhere between

February 25 and March 5. He's never given us the details of

that.

[ Page 2010 ]

What we want is information as to whether or not the Casa

Loma principals had some assurance, on the strength of what

they were told by Dunhill, Paulus or Housing department people,

that the government was going to get in there and buy that

property, because at the same time, Mr. Chairman — now admitted

by the Minister — as there were discussions taking piece, the

creditors were eventually to accept some 42 cents on the

dollar, and some, in the case of suppliers or people who

provide rental equipment, were to receive nothing. One person

even received 3 cents. Fiber-Cann received nothing for $600

worth of services.

Now was the government or Dunhill negotiating with the

principals of Casa Loma at the time that the principals of Casa

Loma were settling this outstanding account of some

$400,000-odd? That's the critical point. It's no use giving us

a lecture on people in senior-citizen rental agencies wanting

to make sure there's plenty of rental accommodation for

seniors; we all agree. But now the Minister of Housing is

getting coaching from the Attorney-General (Hon. Mr.

Macdonald), who was requested way back before to look into the

whole business of this Casa Loma mess, and he refused. He gave

a reasonable explanation, saying he can't look into everything

that he's requested to look into. Fair enough, but the

government was warned by N.B. Electric that N.B. Electric's

principals thought the whole thing was very poor and they felt

this matter should be investigated by the government.

Mr. Chairman, I've got one list of $390,841.65 worth of

approved claims on which payment was $160,894.90. I've given

you examples of companies which have been paid even less. There

is at least one company which received substantially more — 100

cents on the dollar — and there is some suspicion that the

principals involved in that company will show up elsewhere in

this business in terms of principals of other companies

involved.

The question for the Minister is not to get up and lecture us about the need

for senior citizens' housing, but the question for the Minister, as it has been

for two months, is when the negotiations began, what type of negotiations were

taking place and whether or not any assurances were given to the Casa Loma principals.

He has consistently refused to give that information. Indeed, on page 1482 of

Hansard , which he quoted to us a moment ago, he said: "From this information,

there is no evidence to support the contention that a commitment to purchase

by the department, or even negotiations between Dunhill and Casa Loma were either

made or going on prior to the settlement of the lien claims." Now he's backed

off that today by saying there were odd negotiations earlier. He wouldn't like

to put his finger on what exactly took place, but he went on to say there had

been discussions previously. He went on to mention that. Well, now all we want

him to do is go a little further and come clean.

He's talked about this whole question of liens as being a

very small matter. Sure, it's a small matter for him — he's

getting his $48,000 a year plus expenses — but it's a major

matter for some of these suppliers. One in particular has

indicated to me that he figures it will be three or four years

before he recovers from the substantial losses that he has

incurred on the Casa Loma deal. Sure, it's a small thing for a

man who's used to throwing around millions, the way the

Minister is. But it's a big thing to individual British

Columbia contractors.

The Minister today, Mr. Chairman, has told us that of course

prices were considerably lower; therefore there'll be a profit

in this. Well, that again is contradictory to what he said

previously, which was that the Casa Loma principals would not

be making a profit. Now I'd like to know how much.

Interjection.

MR. D.A. ANDERSON: Now he's backing down on the question of

how much profit the Casa Loma principals will be making. If he

will recall way back to February 24, that was the very first

question asked: what was the difference between purchase price

and sale price to government? It was only then that we got onto

the other aspect, so he's now backing off that as well.

But the fundamental question is: when did you negotiate, and

what commitments were given to the Casa Loma principals? That,

Mr. Chairman, is something that I have been after for two

months — more than two months. We still haven't had an answer

today and I'm going to sit down right now so the Minister can

get up and come clean and give the details of the negotiations

with Casa Loma prior to the settlement of the liens by Casa

Loma itself.

HON. MR. NICOLSON: I can understand the reason for some of

the remarks and why the Hon. Second Member for Victoria hasn't

had a chance to do some of the homework and read some of the

documents that have been filed in this House carefully. He's

already proven his administrative abilities. He can't even

supervise a caucus of four, but it will be a simpler task, Mr.

Member — maybe even one within your competence.

I tabled some time ago a letter from His Honour Mr.

Dohm.

MR. D.A. ANDERSON: That's right. He denies your statement

about the negotiations.

HON. MR. NICOLSON: He concluded that the contract was 72 per

cent completed. Well, okay.

[ Page 2011 ]

MR. D.A. ANDERSON: Come on, now. It's so simple you're going

to do it just like that.

HON. MR. NICOLSON: Based on the findings of Mr. Frizzell,

the quantity surveyor, Mr. Macdonald reported in a letter dated

August 22, 1974, that it was his opinion that the liability of

Casa Loma Motel Ltd., as register-.d owner of the property, did

not exceed $170,000. He would be prepared, to recommend to the

committee of claimants that all liens be released upon payment

of the said sum by Casa Loma Motel Ltd. So while agreements

might have been signed a little bit later than that, on August

22 Mr. Macdonald seemed to have some agreement with his

clients.

In point six of his letter he says: "As registered owner of

the above lands, Casa Loma Motel Ltd., through its directors,

decided to attempt to sell the project. Negotiations with the

Government of British Columbia commenced sometime in September

of 1974, the first contact being made in the month of

September, 1974, after the settlement..."

MR. D.A. ANDERSON: You've denied that. You've denied that

was the contact then. You've said it was earlier.

HON. MR. NICOLSON: The first contact, Mr. Member — not a

deal, not an agreement.

MR. D.A. ANDERSON: The first contact. You said it was back

early in the summer.

HON. MR. NICOLSON: "....after the settlement was reached

with the mechanic's lien claimants."

MR. D.A. ANDERSON: You said it was earlier. That's the

point.

HON. MR. NICOLSON: Well, Mr. Member, it isn't the point.

MR. PHILLIPS: It is!

HON. MR. NICOLSON: The point is this. On December 5, 1974, a

proposal call selection committee was advised that the

proponent, Casa Loma Motel Ltd., had been advised that the only

circumstance under which the project would be acquired was in

the event that the 1974 surplus funds were available under

section 43 of the National Housing Act. So on December 5 there

was not a deal, Mr. Member. In September, in July, in October,

in November and still even on December 5 there was not a

deal.

MR. D.A. ANDERSON: Mr. Chairman, the quotation that was read

with such glee by the Minister proves, if he's taking that at face value, that

we've been misled in this House by the Minister, who has talked

of contacts prior to September, 1974. He's stated that in this

House. He said it was early in the summer and things. Now is

Paulus right, is the Minister right, or is he now trying to

hide behind the lawyer and the lawyer's letter for the other

people, the Casa Loma principals? When did that first contract

take place? Are you standing behind this statement? Up to now

you've said something very, very different.

HON. MR. NICOLSON: Is the Member suggesting that we can't

even talk to anybody, that we have to log everything, that we

have to run tape recorders at every meeting that's ever held,

or have minutes? Well, Mr. Member, how can I know? I wasn't

there, Mr. Member. I can take information, I can take recall

from other people, information that's given to me, but am I to

deny that somebody from Dunhill might have talked to them at

that time? How can I do that? Do you know what one of your

relatives is doing right now, or something?

MR. D.A. ANDERSON: I'll be happy to point out this once

more. It states here in this letter, which he gave as proof,

that the first contact was made in the month of September,

1974. That is the statement read by the Minister. Now

previously we've been told that Paulus and other people had

been in touch before. We've been told that by the Minister,

among others. There can only be one first contact. It's not a

question of whether there have been discussions before; it's

not a question of the Minister being forced to answer for

people he doesn't know about. Is he now saying that he's

reversing his previous statements and reversing the previous

statements of Paulus and telling us that he accepts the

statement that the first contact was in September, 1974? If he

isn't saying that, why on earth did he read this letter, if

it's wrong on the basis of what the Minister and Paulus have

told us before?

MR. WALLACE: Mr. Chairman, this amendment is one of no

confidence in the Minister. I have listened very carefully to

both sides of the argument on the Casa Loma deal. Frankly, I

would think that the debate would range a great deal wider than

one specific instance when trying to decide whether or not we

should have confidence or not have confidence in the Minister.

But I have listened very carefully to the long debate on the

Casa Loma deal and the points expressed by both the Minister

and by the Members of the other opposition parties.

For the record, it's my conclusion that the whole situation

represents substantial fumbling by the Minister, albeit without

dishonesty, as has been applied by some speakers. I accept the

Minister's

[ Page 2012 ]

statement that he acted in good faith and that there was no

deal. I accept that statement.

But to sum it up, in listening to all the arguments, it does

seem to me that we have a situation which is legally correct

but which morally smells, particularly from a government which

promotes and espouses a great belief in fair play and a fair

deal for the little man.

In opposition this party was always committing itself,

particularly in the face of the government actions of that day,

that if it ever became government, it would be much more

sensitive to the, rights of the individual and the necessity

always in government to at least give the little man fair play.

Regardless of the details of the debate on Casa Loma, it's

quite obvious that a lot of tradesmen got taken and there is a

very unpleasant odour around the whole situation, which

suggests that the principals in the deal came out smelling like

a rose by being able to sell the property to the

government.

The Minister has insisted on many occasions and in several

of his comments today that nothing was done which was wrong and

nothing was done which was illegal. But I have to ask the

Minister: does he feel that from an ethical point of view — or

do ethics not matter in government — if he was one of the

tradesmen who was paid 3 cents or 40 cents, or whatever cents,

on the dollar — and I think that's another factor in the

argument, that they didn't all seem to get hosed to the same

degree — how would he feel to pick up 40 cents on the dollar

one day and very shortly after find that the government had

bailed out the principals?

I really don't think it's an argument in defence to say that

you stuck to the letter of the law and insisted that all the

liens and encumbrances and all the other commitments would be

cleared out of the way legally before the government moved in

and acquired the property. It's my opinion that if that is the

kind of argument the Minister is presenting to this House in

explaining the total project and all the dealings that went on,

I'm sorry but I have to reject that as an inadequate

explanation. It may be absolutely legally watertight, but

morally and ethically it is certainly not the kind of example I

would want to be part of if I were ever part of a government.

It very much sounds like the argument that the end justifies

the means.

I think the Minister was less than fair to this House to

start talking about $26 a square foot and the need for senior

citizens' housing in answering some of the opposition

accusations. The price per square foot has nothing to do with

the issue that the Minister is being confronted with this

afternoon. The issue has two or three very central thrusts to

it.

First of all, was there some deal? The Minister has given his word that there

was not a deal, and I accept that. The second point is: does a government function

honourably simply by living within the letter of the law, or does it have some

ethical standards and moral standards by which it deals in human affairs? I

would say that the number of tradesmen who finished up losing a lot of money

cannot have a great deal of respect for the ethics and moral standards set by

this government on this particular issue.

So I feel that either the Minister carried out this

transaction having weighed up some of these points that I've

mentioned and made one of two decisions. He either did not

fully realize the implications of this kind of action, or he

chose to decide that the need for the housing was so great

that, from a point of view of his responsibility to find units

for senior citizens, the sacrifice that had to be paid in this

case was the financial rewards that were due to the various

construction people who found themselves in this difficulty

because of the bankruptcy of the principals. I've decided that

it was one of these two decisions which the Minister had to

make.

Personally, although I am as sensitive as anyone to the need

for senior citizens' housing in this province, I do not feel

that the government can hold its head very high at having

obtained a certain number of units at the sacrifice of the

honest labour and the reasonable commitment that the trades had

made expecting that they would be paid for that commitment —

namely, their materials, their time and their services.

My considered opinion on the Minister's management of this

Casa Loma situation is that either the Minister showed a

surprising lack of competence or he made a calculated decision,

admittedly in favour of getting units on stream more quickly,

but at the cost of the legitimate interests and the financial

well-being of men who as trades and subtrades have genuinely

done their jobs. They are the ones being sacrificed for the

advantage of completing the project and making the units

available to the senior citizens. If that's the equation, I

have to disagree with it.

I did want to make a few more comments on the amendment over

and beyond the Casa Loma project. The general responsibility of

the Minister is to solve on a wide front the overall housing

and accommodation problem in the province. I would criticize

the Minister in one or two ways.

First of all, it seems to me that there's really no

integrated, overall plan by the Minister to deal with the

housing problems in the province. The impression one gains from

his speech on the budget debate in this House and from his

press releases is very much a piecemeal approach to the

problem. There seems to be no real estimate of the exact needs

in the province in terms of what type of accommodation is

needed where. I've yet to see any definitive target with

statistical backing for the next 12 months.

I know, for example, from this excellent

[ Page

2013 ]

document, "Canadian Housing Statistics," put out by Statistics Canada, that

nationally it is calculated we need 250 000 units per year and that British

Columbia's share of this is approximately 30,000. The figures, very quickly:

in 1971 there were 34,800 starts; in 1972, there were 35,300 starts; in 1973,

37,600 starts; and in 1974, it dropped to 41,400 starts.

My criticism would be that basically the government has not

made a real estimate of the actual needs in housing. They have

not outlined the various types of housing that are required and

in some general, considered way, where these differing types

are most required. I suppose, on the basis of that criticism, I

have to acknowledge that, if you don't know that it would be

difficult to set a target. We do know that the population is

increasing at 3.5 per cent per year and that a vast amount of

that increase is in the lower mainland.

I'm saying that there is a tremendous need for basic

information on the type of need and the location. I would ask

the Minister perhaps to respond to my criticism by asking — I'm

not quite finished, Mr. Minister — if you could give us some

idea, in the light of the criticism I've made, of what our

target is for 1975-76 and what the overall plan is for the

province. Give us some kind of breakdown. With respect, all the

information we hear is of cooperatives and leased property.

There seems to be limited overall planning for various other

types of accommodation.

Some of these points I have raised already in debate

regarding the use of prefabricated homes and the increasing use

of mobile homes. The fact is that the mobile homeowner often

finds himself in some very serious difficulties because of lack

of appropriate legislation to protect the mobile homeowner.

To expand a little on this general question, how many

projects in total does the Minister expect to see started this

year and what general breakdown? How many of them will be

rental accommodation? How many of them will be owner-type

accommodation? How many does the Minister expect to see

completed in the current fiscal year, 1975-1976? Indeed, it

would be interesting to know if the Minister has a total target

figure related in whatever way he cares to relate it to the

approximately 30,000 figure I quoted from Statistics

Canada.

I think it's unfair to discuss housing in isolation when

many of the problems the Minister has related are

attributed to the municipalities. The Minister has repeatedly

in public and in this House made it quite clear that one of the

main obstacles he finds in speeding up the construction and

provision of units of all kinds is the attitude of the

municipalities.

I just want to make it plain that we feel that the reason for that is very

obvious. The per capita funding of the municipalities no longer bears much sense

at all when the funding by the provincial government to the municipalities is

so predicated on the number of people living in a community regardless of the

tax base in that community in relation to industrial and commercial properties.

I don't propose to go all around that argument, as we have done so many times

in this House.

But I think if the Minister had shown a greater awareness

that that is where all the trouble starts with the

municipalities, that the reason they are often apprehensive,

reluctant and hesitant to get into certain housing developments

relates to their concern about the net financial effect on the

municipality. With the rising costs of servicing and many of

the other costs involved where there is a limited tax base

within that municipality and a lack of commercial and

industrial development, then they are very apprehensive about

getting involved in housing projects where the net effect might

be increased costs to the municipality because of the very

inappropriate per capita method of funding by the

government.

While I have no wish to repeat the arguments we presented to

the Minister of Finance (Hon. Mr. Barrett), I think it is

relevant just to say in passing that while the per capita grant

system is causing a lot of the problems for this Minister in

his dealings with the municipalities, this first venture into

tax-sharing through natural gas profits is such an unreliable,

uncertain and unpredictable source of funding at the whim of

the senior level of government, it certainly is no solution to

the problem, in our view. It is a step which is better than

just giving a flat increase in the per capita grant, but this

is not the solution.

We hope that this Minister will take to his leader, the

Premier of this province, the same kind of initiative that the

Minister of Education (Hon. Mrs. Dailly) apparently took in

pointing out the need for initiatives in different methods of

funding. Perhaps this Minister would suggest to the Premier

that he look at Manitoba and Quebec, for example, who are now

beginning to consider municipalities receiving a share of other

forms of financing which are often of a more reliable,

consistent and predictable nature. I think it would be papering

over the gulf between the provincial government and the

municipalities if it were just assumed that for reasons of

convenience municipalities are being awkward and sometimes

apparently obstructive to the Minister and his department in

plans to bring certain other units on stream.

The Minister has also talked about impost taxation. I think

we have discussed this, and left the clear implication that the

municipalities are playing games on this way of raising money.

I think this brings us back to the basic problem I mentioned a

moment ago, that the municipality wouldn't have to try various

gimmicks or manoeuvres to raise a few more bucks by rezoning

fees or impost charges or

[ Page 2014 ]

whatever if the basic financing available to the

municipality was stable, predictable and adequate in the first

place. It seems to me that the real explanation is that the

municipalities, in various ways through these impost charges

and fees, are trying to bolster their inadequate financial

situation.

If the root cause of the attitude, namely the lack of basic,

consistent annual financing, was solved, I think we would

quickly see a removal of some of these charges which are

presently being levied by the municipalities.

I hope that this is the route we go and that the Minister,

in frustration or whatever, doesn't finish up following a path

of greater centralization of planning and control within the

provincial government sphere, and blame the municipalities as

the reason for his greater centralization of authority and

planning. One of the real measures which worries me about what

this government has done is the way it has put itself about

municipalities and individuals in the measures it can take in

land use by amendments to the Laws Declaratory Act.

One of the reasons I would criticize this Minister is that

there does seem to be a clear impression left by him in many of

his statements that if the municipalities won't get along with

his suggestions, then, of course, the power does exist in the

hands of the provincial government to put land to whatever use

the government chooses.

I think it is vital, if we are to solve this housing problem

in the province, that the provincial government must work

within the framework of regional and municipal legislation, and

in the strongest possible harmony and cooperation with the

regional and municipal politicians, because certainly in

matters as important as housing, the right decisions and the

speed with which progress can be made would have to depend on

mutual confidence between the provincial and municipal

governments.

I don't see how this can be achieved if the municipal

governments realized that at the stroke of a pen the Minister

really can very readily impose decisions on the municipalities

simply because of the amendments I've mentioned to the

Legislation.

Another area where I would feel justified in criticizing the

basic housing policy and the Minister's position has been

basically in the vehicle used by the government to expedite

housing — namely, Dunhill Development Corp.

I suppose that again it might represent an action taken in

good faith and with good intentions — that the government would

acquire expertise to enable it to enhance the housing

construction programme. But again I would have to leave the

Minister with a few questions.

The impression I have had is that all that Dunhill seems to have done in large

measure is to acquire land from developers and then call for proposals by the

developers to undertake projects. In my view, for Dunhill to

acquire land — it seems to be doing so at very substantial

prices — why would it not have made more sense to provide the

incentives to the developers to retain ownership of the land

and do the developing themselves.

It seems to me that by having Dunhill acquire the land and

then call for proposals must inevitably add to the total cost

of the project, because developers owning land are not about to

sell to Dunhill at anything but a very substantial price. I

happen to know personally of one developer, a very highly

honourable man, who was approached by Dunhill and sold on their

terms. When I asked him about that, his answer to me was, "they

offered me a price I couldn't afford to refuse,"

although that developer was quite prepared and had plans afoot

to go ahead and do his own development.

I just wonder what the rationale of the acquisition of

Dunhill Development really was other than the acquisition of

expertise. Even if that were the rationale, I have to say that

we don't feel that it was necessary in the first instance or

that it has been successful in the second instance.

A further element of criticism would be the fact that

Dunhill seems to have become involved in the acquisition of

many projects that are already under way. That leads to the

question: could the Minister tell us actually how many new

projects have been initiated by this government, not simply

picked up at various stages of completion of projects which

have been started by either non-profit groups or developers or

any particular group? The impression, I think, is quite clearly

that. Yet some of the statements in the annual report of

Dunhill Development leave the impression that they have some

pretty substantial projects going on which they themselves have

begun.

I would like to just ask one or two questions in that

regard. For example, this statement appears in the Dunhill

annual report: "We have provided incentives to local government

to develop municipal land or provide servicing on a rational

basis for privately-held land." I wonder if maybe the Minister

could give us some of the details. What exactly does it mean by

that?

Another statement on page 5 says: "We are implementing programmes which are

designed to drastically increase the supply of serviced land on the market.

Hopefully, these programmes will have the effect of stabilizing land prices."

Once again I don't think we've had the information to know whether that statement

is accurate, that the programmes "are designed to drastically increase the supply

of serviced land." If so, is it mainly the land I mentioned a moment ago where

Dunhill acquires the land from developers and then asks the developers to go

ahead and submit proposals for projects?

There is a whole raft of questions; I think

[ Page 2015 ]

probably I've almost used up my half-hour for now. But it's

on that kind of basis that I have to question the judgment and

the efficiency or otherwise of the administration of the

Minister.

I think the Casa Loma matter, important as it is, has been

zeroed in on today. It would be a pity, I think, if we lost

sight of the much broader concept of what a Housing department

of government should be doing, and the fact that there does not

seem to be a general overall plan upon which opposition

politicians or the man in the street can, in fact, judge the

efficiency and the foresight of this department. I wonder,

perhaps, if the Minister could answer some of these questions

before we go further.

HON. MR. NICOLSON: Mr. Chairman, the Member for Oak Bay (Mr.

Wallace) did question me about my views on the ethics and to

disregard legal opinion and such. I think that it is unethical

for me to sit in judgment of an agreement that was made under

the Mechanics' Lien Act, one way or the other. I think it would

be very easy to get involved in it on a basis that there are

racial overtones, that there are all kinds of underlying things

that maybe haven't been said.

But I always come back to this thing that an investigation

has been launched, it's been requested, and it has been

launched by the Attorney-General's department. What comes out

of that will come out of it. I don't feel that I should sit as

judge and jury and say that one side was wrong or the other

side was wrong. I do feel that there is no agreement until I

get some kind of assurance. As late as December we said there

was no assurance and that everything was contingent.

I do believe that the Mechanics' Lien Act needs amendment,

and I think the Attorney-General has said that he feels it

needs amendment. It could be improved and I should think it

could be. I've seen people suffer under the Mechanics' Lien Act

in other ways before I was elected as a Member. I've seen

people sold prefabricated homes by companies from Kelowna and

the companies have silently folded up and went away and only

one person got any redress under that, and that was because he

had signed a mortgage.

In my riding alone, I think about five people were left

holding the bag, having made $2,500 or $5,000 down-payments.

That company moved to Alberta and it seemed there was no

redress. I think certainly nothing was done when appeals were

made to the government of the day about that type of problem. I

think it's an area that does need a lot of improvement.

You mentioned the housing crisis and CMHC's statistics. I believe CMHC has

set a target of, I think it was, 210,000 for this year; 25 0,000 was suggested

by the provincial Ministers, but one does have to be realistic. I think you

said that the B.C. share was 30,000, so obviously our starts have been higher

than that even last year when they were down.

You are concerned that no assessment has been made and no

targets have been set. As far as the assessment is concerned,

we have recently completed a demand and needs study for all

municipalities in the province. We have it right down to places

like Chetwynd and smaller villages, towns and municipalities.

But it's very difficult to set targets when you have these

problems that you've mentioned. Our thrust is not merely with

co-ops and leasehold lands, but we have always stressed that

these things should add to what would occur naturally.

You talk about mobile homes and the need to protect owners.

I think we are caught in a very drastic dilemma there because

there is also the need to encourage owners to build and, on the

other hand, to protect owners of the mobile homes. Today in the

present shortage — which really reflects the majority attitude

toward mobile homes, which is not good — people object to mobile

home parks in their neighbourhood. In fact, people are

objecting to almost any kind of development in their own

neighbourhood. But it's become much more acute in the case of

mobile homes.

There is a tremendous scarcity there and there are two

problems that can happen. Right now there are many things wrong

at the present time because there's a scarcity, but there's a

practice of a thing called an exit fee, and that is that if you

want to sell your mobile home on a mobile home pad, you have to

pay a fee to the owner. We have been requested to legislate

against that. On the other hand, if the scarcity is there,

perhaps if you protected the owner of the mobile home against

the owner of the mobile home park charging such a fee, he might

be able to avail himself of that scarcity.

So you know, the real solution to that is a good supply of

mobile home parks. We have endeavoured to build quite a few and

we have had excellent cooperation from some municipalities,

but others have a pretty clear policy against the building of

mobile home parks.

Our record for the first three months of this year: our

housing starts are down 34 per cent, according to CMHC figures.

But it isn't a local phenomenon. They are down 37 per cent in

Alberta. In Saskatchewan they are down 48 per cent; 72 per cent

in Manitoba; 58 in Ontario, and 44 per cent in Quebec. In fact,

just three of the Maritime provinces are doing better — or were

less worse.

It's not just a local phenomenon, in fact, it's not even

isolated to Canada. In the United States it has been even

worse, and housing starts are not picking up in the United

States as was hoped.

A great deal depends upon whether Mr. Turner

[ Page 2016 ]

gives Mr. Danson the type of money.... You mentioned the

letter from the Minister of Education (Hon. Mrs. Dailly) to our

Minister of Finance (Hon. Mr. Barrett). In my not-too-recent

visit to Ottawa I could see that there is a little drama being

played there. I hope that Mr. Danson is successful. We were

suggesting ways of jumping the economy in a proper way, not an

inflationary way. I think our input was received well. But Mr.

Turner wasn't at the meeting. Some other Members of cabinet

were in addition to Mr. Danson, but not Mr. Turner.

There is resistance which has taken place in many

municipalities, but others are quite actively encouraging

building. As I suggested recently to the Real Estate Institute

of British Columbia, I think it's time for constructive

dialogue with the municipalities. I see many encouraging signs

in the Capital Regional District and in greater Vancouver.

You mention the per capita grant. I think the distribution

of natural gas revenues is a more significant step than you

tend to give it credit for being. Also the sewerage treatment

plant assistance Act, transit subsidy Act, and these things.

But as much money as municipalities get, they will always be

able to spend it, and on worthwhile things. I know that some

places are building long-overdue municipal halls. Frankly,

compared to some schools and hospitals and other institutions,

they looked a little bit like palaces with the fountain in the

front and the fountain in the back. But they'll be there for a

long time. Right now, that's where a lot of money is being

spent by municipalities. I see long-overdue park development

taking place and more awareness about the need for parkland and

development of raw parkland into something that people will

actually make use of.

In spite of these other inputs from natural gas revenues, I

think there are also expanded activities being undertaken. It's

not necessarily hold the line, although we hear talk about

having to cut staff, et cetera, et cetera. There are some very

large capital projects being undertaken by some of these

municipalities.

That notwithstanding, you referred to something from the Dunhill report, and

that is something I would like to talk about — that is, in Saanich, the municipality's

pre-service privately-held lands. There are many areas in the greater Vancouver

and also greater Victoria area where key services are required. It's not a priority

for the municipalities at that time but it's a priority to people holding lands

who want to develop them. We are negotiating agreements with a couple of municipalities

in greater Vancouver and we will probably be doing something similar in the

greater Victoria area where we can bring in this maybe for half-a-million dollars.

We might be able to bring a couple of thousand housing units on stream, and

then we will prorate the charge back to the development with interest as it

comes on stream. It will be a way of springing projects that might lack maybe

a road connection, a sewer, water connection, or one or two things — something

that's holding up the development for the piece of land or of a large area.

Maybe there are a number of ownerships in the area, but nobody wants to take

the first step, being the first in. That's really a considerable problem which

we've identified as a result of having had a "Housing expediter." This was one

of the problem areas which was identified.

Servicing other lands, the Riverview project, Burke Mountain

project, and also properties in Burnaby which are being

serviced: these will be all on leasehold tenure or perhaps go

to social housing. It could be long-term lease, a 99-year tax

sale lease, or it could be a month-to-month lease, Mr. Member,

of various tenures. It will be an opportunity for the

construction industry to get involved in creating more housing

units.

MR. WALLACE: The Minister referred to the federal problems

and his impressions from the meeting in Ottawa and so on. I'd

like to be clear on one other point, very much related to a

public comment which I believe the Minister made last week.

Is the Minister saying that he does not agree with the

federal concept of using housing as an economic tool? From our

side of the House, housing and shelter is like food and health

care — you don't turn on the money or turn off the money to use

it as an economic regulator.

Last week the Minister made a statement. I can only

paraphrase him to the effect that the sooner we have some

financial institution here in British Columbia which affords

the Housing department access to funding under its own terms of

reference, the better it will be. But, at the moment, to be

confined within the constraints of CMHC simply by lack of

funding is, if not the main obstacle, one of the main obstacles

to making more rapid progress in bringing more units into

construction. I would like an answer to that question.

The other simple, quick question was: because of the example

set by the federal government to subsidize interest rates for

private developers on the understanding that the resulting

units created will be rented at a lower rate for a specified

number of years — as I understand it, that is the kind of

proposal that the federal government makes in certain cases —

what is stopping us provincially from taking the same approach,

that to some degree we would subsidize the interest rate for

construction work undertaken by private developers if we got a

commitment from the private developer as to some moderate-range

rent or price that would be charged for the construction? I

gather that the federal government has taken this

[ Page 2017 ]

initiative. Have we got any such plans?

HON. MR. NICOLSON: My statements about using housing as a

financial tool were more directed toward the fact that while

you might have problems in the in manufacturing- based economy

of the cast, a cut-off of the supply of housing funds might be

used to cool off the economy. That could have the absolute

opposite effect here in British Columbia. For instance, for one

thing it would cut down on the sales of lumber. Also, our needs

for housing are something I think we have to decide at the

local provincial level, and even more locally than that.

Interjections

HON. MR. NICOLSON: I certainly wouldn't object to it being used to heat

up things a little bit at this time, but I don't think it should be used to

cool things off, Mr. Member. I know that is a bit of contradiction.

You asked another question, too, which I didn't....

Interjecti