1994 Legislative Session: 3rd Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 31, 1994

Afternoon Sitting

Volume 15, Number 23

[ Page 11225 ]

The House met at 2:05 p.m.

Hon. J. MacPhail: It gives me great pleasure to introduce members of the association of CGAs, who hosted a luncheon for many of us in the Legislature today. Joining us today is Jay Norton, president of the Certified General Accountants' Association of B.C.; Bob Vincent, the first vice-president of the association; and Bill Caulfield, the executive director. They were wonderful hosts, and now I would ask everyone to please make them welcome.

A. Hagen: It's my pleasure to introduce a good friend, Christine Hayden, who is visiting in the gallery today and with whom I've had an enjoyable time. Welcome her to Victoria, everyone.

W. Hurd: I'm pleased to introduce the jazz band from Semiahmoo Secondary School in my riding, that entertained members and the public on the front steps of the Legislature today. I would ask the House to make them welcome and thank them for their concert.

Introduction of Bills

FAMILY MAINTENANCE ENFORCEMENT AMENDMENT ACT, 1994

Hon. C. Gabelmann presented a message from His Honour the Lieutenant-Governor: a bill intituled Family Maintenance Enforcement Amendment Act, 1994.

Hon. C. Gabelmann: This bill will amend the Family Maintenance Enforcement Act to increase the effectiveness of the family maintenance enforcement program. It will introduce a mechanism to make it easier to enrol in the program and to reduce the time it takes to enrol.

The bill will introduce new enforcement mechanisms and streamline enforcement procedures to speed up the enforcement of maintenance orders and make enforcement more effective. The bill contains provisions which will make it possible to reach people who are required to pay maintenance and who have been able to hide their assets and thereby avoid their maintenance obligations. The bill will remove ambiguities in the act which are interfering with the enforcement process and will clarify the intent of the act.

Bill 51 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

RELOCATION OF PUBLIC SERVICE APPEAL BOARD

F. Gingell: My question is to the Minister of Finance. The minister seemed unaware last week that the Public Service Appeal Board would be moved to Nanaimo. It appeared to us that this was done with an eye to satisfying Joy Leach, the latest of many NDP patronage appointments. Could the minister please advise us what studies were conducted prior to the decision to move the appeal board to Nanaimo?

Hon. E. Cull: I'm surprised that the member would attack somebody like Joy Leach, who has an impeccable reputation. However, for the member's information, decisions with respect to the location of various parts of the public service are made by the public service. Not all of those decisions run across the cabinet table. Otherwise we would constantly be dealing with the location of various employees in different communities.

Nonetheless, as a result of the questions that have been raised on this matter, I have asked for all of the reports with respect to the decision to be brought to my attention so we can ensure that the most cost-effective decision has been made by the public service.

The Speaker: Supplemental, hon. member.

F. Gingell: Clearly the issue has been a disaster right from the start. With appeals limited to in-service applicants, there is no need to move this board from Victoria. Will the minister give us the assurance that if it is better for the taxpayers of British Columbia, she will reverse this overtly partisan decision?

Hon. E. Cull: Perhaps the member didn't hear me. I just said I was asking for all reports on this matter.

I want to tell the member that he is misinformed. The budget for the Public Service Appeal Board has gone down this year. The number of staff has been reduced. Unlike the member, the vast majority of civil servants do not live in Victoria; they live all around the province. We will ensure that they are provided with the best service possible in this regard.

The Speaker: The final supplementary, hon. member.

RELOCATION OF MOTOR CARRIER COMMISSION

F. Gingell: Will the minister give us the assurance that she will, at the same time, review the decision to move the Motor Carrier Commission to Victoria from Vancouver for another patronage appointment -- Don Johannessen -- when the majority of people who have dealings with that commission live in the lower mainland?

Hon. E. Cull: Hon. Speaker, I'm sure the member would like to put that question to the appropriate minister.

REGULATION OF OVERTIME WORK

W. Hurd: I have a question for the Minister of Skills, Training and Labour. Can the minister tell us whether his government intends to regulate or reduce the amount of overtime that employees will be allowed to work in British Columbia?

Hon. D. Miller: It's actually quite a timely question. No, we don't have any plans, but it's certainly an area that begs a look. Upon examination, if it is determined that there are significant amounts of overtime being worked, then it may be a legitimate question for some debate as to whether that indeed should be regulated. In fact, years ago, under labour legislation in this province as I recall it, major employers, at least, required the approval of the Minister of Labour to work excessive overtime. That system has long since disappeared. But again, it's an issue that I think, given the kind of unemployment rates that unfortunately seem to exist in our society....

The Speaker: Thank you, hon. minister.

Supplemental, hon. member?

[ Page 11226 ]

W. Hurd: The minister will recall being quoted in a Kamloops newspaper to the effect that government used to have the means to regulate overtime. "We need to recapture that power so that the ministry can say to industries with chronic overtime that it's too high." Again to the minister: how long will it be before this government says to the business people of the province: "Your overtime is too high"?

Hon. D. Miller: It's somewhat appalling that when we muse aloud about some ways in which we can address the chronic unemployment in our society, the members opposite are always, always opposed. If that is the position of the Liberal Party in this province -- that it's okay to work any amount at all of overtime, and it's okay to have unemployment, particularly in the youth field, that goes up to 17 percent -- it's a position that we on this side of the House reject.

The Speaker: Final supplemental, hon. member.

W. Hurd: My supplemental is to the Premier. Can the Premier tell us: when he travels abroad to preach the virtues of investment in B.C., does he also tell them that his government intends to ban or reduce overtime in the province? Does he believe the government should be limiting and saying no to overtime and to foreign investment in British Columbia?

TEACHERS' RIGHT TO STRIKE

J. Weisgerber: My question is to the Premier. Implementing provincewide bargaining for teachers without banning school strikes is a recipe for provincewide school strikes. Does the Premier believe education should be...?

The Speaker: Order, hon. member. Are you referring to a matter which is before the House? If it is, that would be inappropriate at this time. Please direct your question on a matter which does not reflect on legislation that is before the House, hon. member.

J. Weisgerber: My question to the Premier is: does he believe that education should be classified as an essential service, or does he believe that teachers should be allowed to shut down the province with teacher strikes?

[2:15]

Hon. M. Harcourt: I have made it very clear that this government believes in collective bargaining and believes in the right of workers to make that decision. It believes in the right of democratic citizens to form their own associations, and that that is something that should be done on a level playing field through labour legislation that this government has brought in. So yes, this government does believe in free collective bargaining.

I don't know why the Leader of the Reform Party would automatically assume that it would be a strike and not a lockout, or why the parties wouldn't negotiate a settlement without any strikes or lockouts, as they do in 95 percent of the agreements in this province.

J. Weisgerber: If we've learned anything, surely it must be that there shouldn't be school strikes anywhere in this province. What polling has this government done to gauge the support with British Columbians for a provincial policy that would eliminate school strikes entirely and classify education as an essential service?

Hon. M. Harcourt: It may be okay for the Reform Party to govern themselves by polling and hotlines, but this government is always willing to go back to the basic principles that we stand for, and that's free collective bargaining.

The Speaker: The final supplemental, hon. member.

J. Weisgerber: It's incredible to believe that the government would poll people to find out how popular the Premier, the Minister of Finance and the Minister Employment and Investment are and not ask British Columbians what they think about an issue as important as strikes in the school system.

The Speaker: The question.

J. Weisgerber: Can the Premier tell us that the government really doesn't have any idea how British Columbians feel about this important issue?

Hon. M. Harcourt: This government has listened to the people of British Columbia. The people have said that the collective bargaining system allowed by Social Credit -- I'm not quite sure what they'll be called next week, but they're called Reform this week -- under

an act they brought in created the unworkable situation that students, parents, school trustees and teachers have had to face over the last five or six years. This government has preserved free collective bargaining, but it will be bringing some sanity to that, so that kids can be in schools and parents can make sure their kids are getting the skills they need for the 1990s.

MANAGEMENT OF WORKERS' COMPENSATION BOARD

K. Jones: My question is to the Minister of Skills, Training and Labour. It's increasingly apparent to the official opposition that the Workers' Compensation Board is greatly mismanaged. In 1991, 42 percent of wage-loss claims were paid within the standard 17 days; now only 30 percent are handled within 17 days under this NDP government. My question to the minister is: how can he justify this rapidly declining level of service to injured workers in light of the fact that today there are more WCB staff and fewer claims being processed?

Hon. D. Miller: It's becoming increasingly evident to me that the Liberal opposition doesn't do its homework and doesn't really know what it's talking about. I would remind members opposite that the WCB is run by an appointed board of governors drawn from the business community, the labour community and the public at large. I would remind members opposite that the system in British Columbia is 97 percent funded. Let's compare it to the systems where the Liberals are in power across this country -- including in Ontario, where they drove that system into a $12 billion unfunded liability. As we look at those Liberal governments across the country, we see Quebec, 57 percent funded...

The Speaker: Order, hon. member.

Hon. D. Miller: ...Nova Scotia, 30 percent; Ontario, 38 percent.

The Speaker: Please conclude your remarks, hon. minister.

[ Page 11227 ]

Hon. D. Miller: The members rise all too often without the basic facts. In my absence last week, that same member rose and made what I consider to be a spurious accusation.

The Speaker: Order, hon. minister.

The supplemental, hon. member.

K. Jones: The minister really has it wrong when he starts to claim that the NDP is doing a fine job. In Ontario the NDP has an $11.4 billion unfunded liability. That's the kind of operation.... Here we've got almost a half-billion-dollar unfunded liability.

The Liberal opposition WCB review panel, which held its latest forum in Prince George yesterday, has learned that serious inequities exist among the regional offices of the WCB in terms of the level of service provided to injured workers.

The Speaker: The question, hon. member.

K. Jones: For example, recent statistics illustrate that in Richmond it took an average of 42 days -- I'm getting to it, hon. Speaker -- from the date of registration to the determination of eligibility of a claim, while it took only 22 days in Prince George. My question to the minister is this: why is he content to watch over a WCB that is unresponsive to the needs of injured workers, and why does he expect injured workers to further suffer from a WCB that is out of control?

Hon. D. Miller: Isn't it interesting that the Liberals in Ontario are pointing to the British Columbia WCB system and saying: "That's where we'd like to be"? Isn't it interesting that the Liberals in Ontario are going to solve the problem they created, that staggering debt, by reducing benefits to workers? Isn't it interesting that the Liberals in Ontario have set a target of 75 percent funded? British Columbia is 97 percent funded.

The Speaker: Thank you, hon. minister.

WEST COAST SALMON DISPUTE

H. De Jong: My question is to the Minister of Agriculture, Fisheries and Food. In view of the lack of resolution to the west coast salmon dispute with the United States, talk is now running rampant about a salmon war. Can the peace-loving minister please tell the House what commitments he has received from the federal authorities concerning the specific measures they have prepared to undertake to protect the B.C. fishermen who are caught in the crossfire?

Hon. D. Zirnhelt: As we speak, specifics with respect to the national fishing plan are being worked out between the stakeholders, the federal and the provincial governments. The specifics won't be available until early next week, but the principles behind any plan will be that we have to be cognizant of the conservation needs and the needs of communities up and down this coast. You won't hear the words "fishing war" from me, because I don't want to see a fishing war.

Interjection.

Hon. D. Zirnhelt: No, the words that we're using refer to a national fishing plan which would be aggressive in protecting British Columbia's interests.

Orders of the Day

Hon. G. Clark: I call Committee of Supply in Committee A for the purposes of discussing the Ministry of Social Services estimates. In this chamber, I call continued second reading debate on Bill 30.

Hon. D. Zirnhelt: I ask leave to make an introduction.

Leave granted.

Hon. D. Zirnhelt: I've been informed that Imogene Jackson and Linda Olsen from my constituency are visiting here, watching us as we debate matters of state. Please make them welcome.

AGRICULTURAL LAND COMMISSION AMENDMENT ACT, 1994

(continued)

The Speaker: The hon. minister closes debate on Bill 30.

Hon. D. Zirnhelt: I think there was a full airing, as I read the Blues, of the issues before the Land Commission. I'm sorry I wasn't here to be able to participate. I was in Vancouver helping to launch a major communication strategy on Buy B.C., which we know will help the farmers of British Columbia.

We anticipate doing as much as we can, within the financial means of the taxpayers of British Columbia, to support farming. A lot of what we have to do is clearly not just financial. It has to do with making sure that they can continue to carry on activities unencumbered by unnecessary intrusions from outside. One of the purposes of the agricultural land reserve is to preserve that land base. I'd just like to close because I think we've had a good airing, and we're going to get into it

section by section.

I have to say, with respect to some of the comments that have been made about what happens to land values in the land reserve, that some of the indications we have are that land prices within the ALR follow urban land prices. They go up when urban land prices are up, and down otherwise.

I just have to remind members, too, that affordable, good agricultural land will provide a comparative advantage to our farmers over other farmers who are involved with ever-escalating land prices. I am assured by the Land Commission that sufficient land exists outside and can be negotiated for development. It may well be that we have to manage growth and not just let it spill over onto the most easily developed land. But worldwide, we have problems in agriculture that have to be addressed by consumers and citizens of countries. It's a fundamental choice that we make in our society to preserve the very substrate of agriculture, which is the farmland.

These amendments are there to secure the land reserve, to make it more efficient and to allow us to work with those municipalities that want to work closely with planning activities. We need to recognize that over the last couple of years, the Land Commission has begun to move back to one of its original purposes, which is to assist in the management of growth and to be more proactive in working with the local municipalities. But that doesn't mean just offering land to be developed at the will of the local governments. There's going to have to be direction for growth and development into that land that's outside.

I need to remind people that some 45,000 hectares outside the agricultural land reserve in the lower mainland are available for development. It isn't always where particular municipalities want it, but it is there.

[2:30]

[ Page 11228 ]

I think the growth of British Columbia will continue apace, with the land reserve in place and stronger than it has ever been. I look forward to getting into the next phase, which is to go that extra mile to support farmers who have chosen to stay on the land in the agricultural land reserve. With that, I move second reading of Bill 30.

Motion approved on the following division:

YEAS -- 49

Marzari

Priddy

Edwards

Zirnhelt

Garden

Perry

Hagen

Dosanjh

Hammell

B. Jones

Lortie

Smallwood

Cull

Harcourt

Gabelmann

Clark

MacPhail

Ramsey

Barlee

Pullinger

Janssen

Evans

Randall

Beattie

Farnworth

Conroy

Lord

Streifel

Sawicki

Jackson

Stephens

Gingell

Hurd

Farrell-Collins

Dalton

Chisholm

Tanner

Jarvis

Anderson

Warnke

K. Jones

Symons

Boone

Hartley

Lali

Schreck

Copping

Krog

Kasper

NAYS -- 8

Weisgerber

Hanson

Serwa

Wilson

Tyabji

H. De Jong

Neufeld

Fox

Bill 30, Agricultural Land Commission Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Clark: Hon. Speaker, I call second reading of Bill 12.

LIBRARY ACT

Hon. D. Marzari: It's my pleasure to put forward Bill 12 for second reading. This legislation will repeal the existing Library Act and replace it with a new revitalized act that will provide a solid foundation for the continued vitality of B.C.'s libraries well into the twenty-first century. Libraries are among our most vital resources and are a rich source of inspiration, recreation and instruction and an important repository of the cultural heritage of our province. Libraries are central to the educational and social infrastructure that helps British Columbians compete in the global markets of today's knowledge- driven economy.

A strong library system will make a vital contribution to Skills Now, our government's forward-looking skills training program for British Columbians.

Interjections.

The Speaker: Order, hon. members.

The hon. member for Saanich North and the Islands on a point of order?

C. Tanner: I believe that the mover of this motion deserves the attention of the House, and we should all be prepared to listen or leave.

The Speaker: The point is well taken, hon. members. The hon. Minister of Municipal Affairs has the floor and would appreciate the courtesy of an opportunity to speak without interference. Please proceed.

Hon. D. Marzari: In light of the growing need for easy access to information, we need a Library Act that looks to the future. The present act is locked into the past. It has evolved only slightly from the Public Libraries Act of 1919 and has only seen minor amendments since 1978. The new Library Act, introduced through Bill 12, will modernize outdated and obscure public library legislation, protect public access to free basic library service and help make library boards more accountable to local government -- those people who pay for them.

Developed through three stages of consultation over the last seven years, the act offers new opportunities for local governments to meet the changing needs of their communities, without undermining the established library systems that continue to meet the needs of British Columbians who rely on them.

This bill provides a choice of two library authorities: municipal library boards for municipalities and adjacent areas, and regional library district boards for larger geographic areas comprising municipalities and rural areas within one or more regional districts.

Existing public library associations and integrated public library systems will be supported under the new legislation, although no new ones will be established. Municipal library boards will be incorporated with powers appropriate to their management responsibilities. Regional districts, rather than school districts, will now represent rural electors on regional library district boards and participate in sharing the cost of library service.

In addition, every library board operating under the act will be required to provide free access to basic library services, including borrowing privileges, to the people they serve. This guarantee of public access to core library services represents a major improvement over the vague and partial provisions in the old act. Our public libraries should be open to all British Columbians -- rich and poor, young and old -- and the new Library Act makes such access everyone's right.

This legislation maintains the strong tradition of community involvement on library boards balanced with accountability to local governments. It clarifies provisions respecting councils' powers to approve and amend municipal library budgets and makes regional library district budgets subject to the approval of representatives of municipal councils and rural directors. Most of all and most important, it ensures equal and fair access to information for the people of British Columbia. I'm happy to move that Bill 12 be read now for the second time.

C. Tanner: I rise to reply to Bill 12, the Library Act, just now introduced by the Minister of Municipal Affairs. I suppose I'd better set out my position right at the beginning and tell the members of this House that I got this portfolio as a consequence of moves on that side of the House. I end up speaking on libraries, even though I could be pointed to as having a vested interest -- not personally, but my wife does run a business which helps to support my political activities. As long as everybody understands that in the first place, I feel I can continue in discussion of this bill.

[ Page 11229 ]

This is an interesting bill because in actual fact, while the member who introduced it referred to 1919, that 1919 bill was a reconsideration of a bill that came out of this House in 1891. That's the same year this province set up a library outside here and also set up a fleet that went up to the Yukon and gave me a living, happily, for a number of years also.

There is an interesting facet to this bill which I think we should all be aware of. I would like the minister's reassurance, when we come to discussion of the bill, that what I see missing is what is presently in the bill that we are totally replacing. While I appreciate we should be talking to the principle, to illustrate this principle I need to refer to a specific part of the present Library Act,

section 39, which guarantees that:

"Subject to the rules as to its use made under this Act, every municipal public library board or board of management of a regional library district shall permit the residents and electors of the municipality or regional library district in which the library for which it is responsible is situated to have free use of the circulating and reference books and other services it thinks practicable...."

In this new act, which entirely replaces the old act, I don't see the word "free" anywhere. I'm not absolutely convinced that in the rewriting of the act, we do have a free library service. There is another point in that same section, which says: "...but the board may charge fees for other services as it thinks necessary." That means, in my view, that in the original bill they wanted it to be free, but there was some choice. I don't see that same choice in this new bill, and I would like, when we get into discussion of the various sections of the bill, to be assured that in fact it is free.

There will be members of this House that I suspect will say that libraries are one of the areas in which perhaps a more conservative -- I use the word knowingly -- government might want to charge a fee for service. I would be against that. I believe that library service is an essential part of our lives in this province. However, I do have some problems with the fact that the library service in this province comes under the Minister of Municipal Affairs. I would have preferred to see it either in the Ministry of Culture or in the Ministry of Education, which seem more appropriate to me.

The only reason I can see for it being in the Municipal Affairs ministry is that that's where it's administered; it's not where it's appreciated, necessarily.

There is another facet of the bill which worries me somewhat -- and again, when we get to the details, I would like the minister to address it. As far as I can see, there is no definition of a librarian. I think the minister should give some attention to thinking, in the future, of bringing in a librarians act, in the same way as we have acts for other professions -- for example, lawyers or architects. I believe librarians are professionals and deserve their own act, so that they can operate and manage themselves in the same way as the other professions do.

As for the necessity of talking of librarians in the bill, I think there is a question in some librarians' minds as to why there is no definition. I think their feeling is that the variety of libraries this act covers -- from those in large munici- palities like Vancouver to smaller ones in townships and villages of 300 or 400 people -- makes it impractical to expect a librarian to be in every single department. Consequently, they have attempted here to cover that necessity by having one librarian look after a number of areas. I believe that's the way to go; however, I think librarians are concerned by that.

[2:45]

The other concern I have is that I think it's a dangerous precedent for the government to revamp the Library Act in such a way that someone simply appointed by the minister could be put in charge of a library and deemed to be a librarian. For this reason, Mr. Minister, I'm suggesting that a librarians act would be necessary to protect the librarians in that aspect of the bill.

Other than that, my party and I support the bill in general content. We will be making specific recommendations on detail when we get to the next reading of the bill, and I look forward to that debate with the minister.

[L. Krog in the chair.]

D. Mitchell: I'm pleased to rise today to say a few words on second reading of Bill 12, the Library Act. The Library Act brings in a brand-new statute in the province of British Columbia. It basically repeals the old act and brings in a brand- new statute that has been the subject of some consultation. I commend the minister for bringing it in. I can support most elements of this act, but I do have a number of concerns. I think most of them can most appropriately be raised during committee stage.

One of my concerns that I wish to flag at this stage relates to some crucial

definitions. We're living in an age of information; it has almost become trite to say that. Libraries are the repositories and disseminators of information in so many of the communities of British Columbia, small or large. Public libraries are crucial resources, and increasingly so, as we head into an age dominated by technology and the dissemination of information through technological means -- through computers, computer networks, etc.

In this statute we have no definition of a library -- which is interesting. I'm not sure if that's an oversight or if it's deliberate. But the concept of a library is being redefined in terms of a community resource, not just by young people but by library users of all ages. We have no definition in this statute of a librarian, and there are some key concerns about whether or not chief librarians of public libraries, appointed by library boards in our province, should have at least a base accreditation. After all, at the University of British Columbia we have a school of library science.

It's one of the best schools of library science on the continent, to my knowledge. That school provides accreditation for a master's in library sciences and other degrees. It trains librarians not only in the traditional skills of librarianship but also in modern management skills. Why would we not have a definition of a librarian in the statute? Why would we not require basic accreditation so that all chief librarians have those basic skills, drawing upon the strength of our educational institutions in the province?

That's one question I'm hoping the minister can perhaps address when she winds up second reading of this bill.

There are a number of other issues relating to access to library information. I think the official opposition critic referred to the

section in

part 5 of this new Library Act that refers to free basic public library service. I think we have to ask whether or not that's realistic in an age dominated by technology, when members of the general public are increasingly coming to libraries seeking information through computerized means. Are we going to be able to live up to the goal of free access? Or are we going to have to deal with user fees of a modest nature in order to access information on the information superhighway?

Increasingly, librarians do not fit the traditional image we have of a librarian. They are traffic managers on the new information superhighway. When individual members of the public come into libraries to seek information through computerized means, I think we have to anticipate whether a modest fee is going to be required for them to use that or

[ Page 11230 ]

whether computerized information retrieval services are going to be free for all British Columbians. That's one portion of the statute that does not seem to anticipate some changes of the information age.

Bill 12, the Library Act, is an important statute. Libraries are an important resource for all British Columbians. For that reason, I think it's important to go into this bill in some detail, and we should do that during committee stage. But speaking to this bill in principle in second reading, I'd like to say that I can support it, although I do have some concerns which I look forward to raising with the minister at a later time.

L. Fox: It's a pleasure to stand in my place and speak on the principles and philosophies of Bill 12. As the previous two speakers have articulated, this has been a total rewrite of the Library Act, which I think has been in place since 1918. It's obviously due, and it's certainly timely that it should be revisited and updated.

The previous speaker pointed out a couple of concerns which I have perceived from a different perspective. The member for West Vancouver-Garibaldi suggested that we should have a definition of a library in the legislation. I would be somewhat concerned about that, because I think a library will be different in every community and to define it may reduce the flexibility that allows it to react to the needs of a community. I would suggest that a definition may be a negative rather than a positive.

However, the need for a definition of a librarian is interesting. Historically, in the rural parts of the province, somebody has seen a need in a community, has volunteered to be a part of that process, has evolved into a part-time employee of a library and has ended up being a librarian. If we define it, do we limit those opportunities and, as well, limit the flexibility of a small rural library to have a part-time paid employee? That is a concern of mine, and obviously we would discuss that further in third reading.

The member for Saanich North and the Islands talked about the fact that he was concerned about the fee aspect of the legislation, and the member from West Vancouver, I think, articulated it very well. Libraries have evolved from what we have historically known as a house of books into a house which today houses opportunities for educational purposes, whether they be videos, electronics or whatever. It may very well be necessary for a respective library to look at the cost of delivering a specific service for a specific purpose; it may have to levy a fee in order to offer that service.

That option should be open to them. I do not believe that we want to limit services, particularly in the smaller communities, because the library doesn't have the flexibility to charge a small fee to offset the cost of delivering those new services. The technological age is offering us a whole new line of opportunities for promoting education through library networks in the province.

One area where the bill lets us down, given that it's a total rewrite, is where it could have played a major role in promoting the incorporation of many small libraries in small communities into one; that is, if it had had a

section to accommodate and encourage school districts and local libraries to put their efforts into one -- particularly in small communities like the one that I live in, where we have a duplication of services within a population of 4,000. The library in the school is used from nine till three, and the public library is used for a small number of hours. Neither can afford to offer a full service to the community. Many times a duplication of those services limits the opportunity to have a lot larger service within that community.

We could have encouraged those groups to work together and develop a library that would accommodate school needs as well as community needs, instead of both working on their own and therefore splitting the resources and talent available within small communities. It's too bad that we hadn't put in a clause that would have accommodated and encouraged that kind of cooperation within smaller communities.

With those few words, I must say that we in the Reform caucus support Bill 12. We look forward to the clause-by-clause examination of the bill to discuss some of the ramifications of those clauses.

D. Jarvis: Talking on Bill 12, the proposed amendment to the Library Act, I'll say that I'm in favour of it to a certain degree. But there are a few things in it that did raise some questions which are important to keep in mind. Members of our library boards are volunteers, and their status before the community and the law is a little different from that of elected officials and paid employees of a library.

I have several concerns before me that I wanted to mention. I have a query on the need for corporate status for library boards. Is it really necessary for municipal libraries to have corporate status, given that they are presently part of incorporated municipalities? Similarly, there could be a concern raised about associated libraries as well, because they are considered part of the parent institutions. The advantages and disadvantages are inherent, and the corporate status of a volunteer library board should be further examined. We'll probably do so when we come to committee stage.

Another concern I have is the question of their right to sue and be sued. It's both a blessing and a curse in some instances. While the boards could commence actions without municipal council's approval, they could also be the object of actions by suppliers and contractors -- and even members of the public, if they see fit. I believe the advantages and disadvantages of volunteer library boards that are inherent in the right to sue and be sued should be further examined in committee stage.

[3:00]

Finally, as the minister is obviously aware, it's common for libraries to end their financial year at the end of December and receive the funding five or six months later. I'm not quite sure if this is going to be addressed or not. I believe they have just received the funding in my own riding. The boards of the district of North Vancouver and the city of North Vancouver receive this funding six months after their year-end, and I believe it causes them some hardship. It may be suggested that the minister address this situation and perhaps even require that interim budgets be passed to cover this four- or six-month lapse.

Other than that, I should say that I agree with the basic premises of this bill and that I shall be supporting it.

J. Tyabji: I rise in support of the Library Act. I would like to congratulate the minister for bringing this forward. From consultation I have had around the province -- and especially in my riding, where there's a very active library association -- people are saying that a piece of legislation that governs the libraries is long overdue.

There are a number of questions, however, that will come up in committee stage. Although in principle I definitely support the bill and most of its provisions, I will have some questions with regard to how the libraries will be administered and why the boards have been structured in the way they have. I think it's a bit unclear. For example, parts 2 and 3 are very well defined. Does

part 4 supersede parts 2 and 3? Do existing associations, which then become

[ Page 11231 ]

the boards, supersede the first two? If that's the case, in the event of a municipality or regional district setting up their own boards from scratch -- meaning there's no association in place -- and the local government appointing the boards to govern the library, what would happen if an association forms when the library is put in place?

The way the act is written right now, if there's an existing association, that's fine, and the association has a direct say in the governing and directing of the library. But if there isn't, one would expect that in the event of the local government taking the initiative and appointing a board, a library association would form around the library. The way the act is written right now -- at least as I've read it, and when we get to committee stage we might know further -- the board would continue to be appointed by the local government.

You would have communities where an association becomes a board, which would then be governed under the Society Act and would have its own bylaws and be constituted on its own empowerment. You would have community direction of the library,

whereas the way it's written now -- unless there is going to be a clause introduced or some regulations will come in -- in the places where communities didn't have a library, if an association formed after the fact, it would be almost impossible for that association to have representation on the board unless the local government appointed it, which might not necessarily happen.

I have some question with regard to the

definitions. I'm sure there have been submissions to many of the opposition members about the fact that librarian is not defined. As the member for West Vancouver-Garibaldi put it, there are different standards of librarian, and because there's a reference in

section 51, I think it is, to "qualified librarian," there should be something stating what a qualified librarian is. That's an essential part of the act. I would like to canvass the minister, because the very first definition we come across is "aboriginal government," and there is very little reference to that in the act. Is that going to be coming by regulation, is it going to come later on, or what was the purpose of putting it in the

definitions if we don't see it in the rest of the act?

There are a lot of detail questions that have to be asked later. With the principle of representation, when a board is going to be appointed by local government, how does the association, if it's formed after the fact, get itself represented on the board? I think that's a legitimate question. Will we see

part 4 supersede the first two parts? It's not written up that way, but maybe the minister has some thoughts on that, and we can go to that in committee stage.

I would also like to talk a little bit about the position of an executive director or how a committee of 13 will be able to regulate library hours and fees.

With that, I congratulate the minister on bringing this bill in and hope that we have speedy passage of some amendments in committee stage.

T. Perry: I wasn't intending to speak in this debate, but in deference to the member for Okanagan East I have to admit that like Sissy Jupe in Charles Dickens' Hard Times, who could not define a horse even though she was the daughter of a farrier, I can't define a librarian any better than the member for Vancouver East can. But I do know one when I see one, just like Sissy Jupe. I think I can still tell one, and I don't think that's going to be a major barrier preventing me from voting in favour of this act.

I hadn't intended to speak for what seemed like a self- evidently good bill, but coincidentally I received a letter today from the chairman of the board of the Vancouver Public Library, Kyle Mitchell, on behalf of himself and the director of the Vancouver Public Library, Madge Aalto, urging me in the strongest possible terms to support this bill. In case you're watching out there, Kyle or Madge, I'm going to be supporting it. I'm going to be voting for it definitely, absolutely and fully as many times as I'm allowed, which is probably only once. But I look forward to doing so as soon as possible.

Deputy Speaker: The minister closes debate.

Hon. D. Marzari: I appreciate the support of the whole House as we carry this bill into committee stage. This is the week that we will be announcing the new library foundation for British Columbia, in which libraries throughout this whole province will stand to benefit from a fundraising opportunity that I think every community should be looking towards taking advantage of, just as the Vancouver Public Library will probably be taking full advantage of it in its first incarnation. So this is an appropriate week to bring this bill into the House for second reading and, hopefully, committee stage.

The bill does not pretend to begin to define a librarian. In fact, one can only say that perhaps librarians should begin that process to define and credit the profession. I believe that that would be a singularly useful activity. The bill does not pretend to define "library." I take the points made by the other side of the House on this issue. Particularly as we approach the year 2000, libraries in the coming decades will be much more than they are now. In fact, the electronic highway, as it is termed, will have everything to do with access to information.

Libraries, being the free repository of community access to information, should be the hub of that particular electronic technology, which should benefit us all.

The bill does rationalize and bring into focus a model for the distribution of the service itself. It starts to relate, in a more accountable way, the Library Association and library boards of this province with municipal governments and regional districts -- which very often fund them -- bringing taxpayers' dollars into the provision of literacy and services to promote literacy. That is the nature of the focusing that happens in Bill 12.

How can we bring the activity called "library" into the tax framework in a way that municipal councillors and regional districts -- those who end up paying the bills -- can best afford? They work best with those people appointed from the community who wish to sit on library boards. This Library Act respects the diversity that exists in existing communities and does not denigrate them or put them down in any way. In fact, it respects and wishes to work in partnership with those associations that have formed voluntarily. The bill attempts to give the exercise focus, and it attempts to give libraries the status in the community that they richly deserve.

Nothing in this act precludes future activity or future definition. Nothing in this act precludes the possibilities for multipurpose centres or multiple functions in communities. It would encourage school and community libraries to continue their partnership. Nothing precludes community colleges or universities from thinking more about community use. The important thing about this bill is that it pulls the functions of the libraries into the late twentieth century and looks forward to the twenty-first century.

With that, I move second reading of Bill 12.

Motion approved.

Bill 12, Library Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

[ Page 11232 ]

Hon. G. Clark: I call second reading of Bill 25.

MUNICIPAL AFFAIRS STATUTES AMENDMENT ACT, 1994

Hon. D. Marzari: It's my pleasure to put forward Bill 25 for second reading.

This legislation contains a number of amendments to the Municipal Act and related local government legislation, along with two additions to the Municipalities Enabling and Validating Act that were designed to meet some very particular needs in the Regional District of Fraser-Cheam and the communities of Fraser Lake, Fort St. James and Telkwa.

This bill continues our initiative to modernize the legislation administered by the Ministry of Municipal Affairs and to enable local governments to serve their communities more efficiently and effectively. Modernization is a flexible, balanced and practical program of legislative change that involves consultation with local government representatives, particularly with the Union of British Columbia Municipalities.

It has three goals: to empower local governments with the authority they need to deal with today's challenges, to streamline legislation that governs their day-to-day business and to clarify provisions that have been made in years gone by that might have become obscure over the decades.

The amendments related to the Municipal Act in this bill give those local governments that want to undertake social planning explicit authority to do so and to include social policies in their community plans. They make local governments more autonomous by reducing the constant need for ministerial approval of certain bylaws, and they straighten out some minor administrative wrinkles experienced during the 1993 general local elections.

In addition to these amendments, I'd like to remind the hon. members of my intention to introduce a House amendment during committee stage, extending the filing deadline for candidates' financial disclosure statements for civic elections. This amendment is a one-time-only, commonsense response to problems experienced with a new piece of legislation in last November's elections at the local level. This is not a retreat from our strong position on disclosure of election campaign expenses.

Other amendments introduced in this bill provide the additional authority needed by the Islands Trust to improve its administrative procedures. And they address issues of concern to the city of Vancouver, through traditional amendments to the Vancouver Charter generally raised through these bills.

[3:15]

I'd like to stress that these proposed amendments are part of an ongoing legislation modernization program. More can and will be done on an annual basis to improve and help local governments do business at the local level.

I'm happy to move that Bill 25 be read for the second time now.

C. Tanner: The minister and I very rarely get up together. But we've got a surfeit of bills today, so I guess the other members can enjoy our company this time when they don't often get that opportunity.

An Hon. Member: Nor do we want it.

An Hon. Member: Oh, great. I'm looking forward to this. It's going to be a good afternoon.

C. Tanner: I knew that would get them going. Now at least I've got their attention.

Bill 25 is, as any member can see, an omnibus bill covering a number of subjects. Of course, we'll be discussing those at committee stage. It is really difficult to have a total point of view on this bill, because it covers so many subjects and a number of bills.

I notice that last year we passed a Municipal Act of some 555 pages and took a great deal of time to do it. In fact, some members of this House spent a lot of time in committee stage on that bill. One must wonder why we are here, just one meeting of this House later, and at it again. It says one of three things: either they were remiss the first time; or some of the suggestions we made on this side of the House have been taken to heart. Or alternatively, some of the stuff was so badly drafted last time that very shortly after, they had to come back and amend it. As a consequence, we will be addressing these items with very close attention.

A subject which I am particularly interested in is the Islands Trust amendments. While I welcome these amendments, because I know that's what the trustees and the trust bureaucracy want, they don't go nearly far enough to address the very serious problem we have in the trust, and that is a basic one of representation. That's got to be addressed quickly -- hopefully in the life of this parliament.

Definitions to the Municipal Act are, in my opinion, an admission that we're in the municipal business here, when we should be leaving it to the municipalities to be doing a lot of those things. I don't know why we have to act as Big Brother to the municipalities. There's an interesting innovation in this act, when there's a discussion of social planning -- just a very brief reference to it. I suspect that's going to bear some interesting repercussions for the minister.

Finally, I cannot let go of the fact that while the minister is going to bring in an amendment allowing members who omitted to file their returns to late file, particularly those who got in by acclamation or who were acclaimed, she is not bringing in an amendment -- at least, not to my knowledge -- allowing them to forgo the $500 fine. I believe that's an omission on the minister's part.

You can obviously detect from my remarks that there's a great deal to talk about in Bill 25. We will be addressing that in great detail during committee stage. In the meantime, we look forward to that debate.

L. Fox: Before I get into one of the real property rights issues that is contained within this bill, I want to first thank the minister for recognizing and bringing forth the legislation which allows Fort St. James, Fraser Lake and Telkwa to sign a franchise agreement that's been sitting on their desks for about three years. There has been ongoing correspondence from myself as well as from the municipalities to the ministry, requesting this legislation so that they could legally do something that in fact has been in place and been happening for some time.

It was very unfortunate that they got left out of the equation back in '88 or '89, when other communities along that same pipeline were allowed to sign those agreements. These three communities, for whatever reason, fell off the table and didn't get the same permission. So I congratulate the minister for bringing that forward, and thank her for doing that.

There are other very good points contained in this legislation, and for the most part the bill is very good. The one thing that we must not overlook is the one little clause which essentially overturns the ruling of Hall v. Maple Ridge and a couple of other cases which ruled in favour of the property owner against the heavy hand of government.

[ Page 11233 ]

There is no question that communities have to be able to plan and zone to accommodate growth and infrastructure needs. The problem is that when the municipality has the authority to put your property into a long-term plan without paying you any compensation, as a property holder you are obviously in limbo. You can't market or develop it, but you do have the privilege of paying tax on it. That's extremely unfortunate.

With regard to Maple Ridge, we should be made aware that in the case of one family, whose property was tied up for an extreme length of time, the Ministry of Transportation and Highways eventually bought that piece of property, because they decided this family was a hardship case, and paid $675,000 -- but only after discovering the fact that this couple had virtually no means of servicing the land. At least, that's what we hear from the ministry.

Therein lies the problem. This

section of the bill flows contrary to democratic property rights and individual freedoms. If municipalities are going to be allowed to plan your land, my land or whomever's land, then they ought to have the responsibility to negotiate with the respective ministry and purchase those lands at that point in time so people are free to go on and do something else. It's extremely unfair that this legislation allows municipalities to put private property in limbo for untold periods of time. In fact, it may never, ever be developed, because somewhere down the road the criteria and the priorities of that municipality may change.

There is no question that this bill will overturn the case of Hall and others v. Maple Ridge. These people have spent countless dollars and court time defending their rights as property holders. They legitimately should have the right to either sell off this land to the Ministry of Highways -- or whatever agency is looking to buy it -- or market it after the appropriate zoning makes it marketable.

We know that the NDP does not value property rights nearly as much as some other parties. Certainly we in the Reform Party do. But we should point out that at least they should respect the small homeowner or property owner that they claim to represent in government. This particular change in this legislation could affect the ordinary homeowner or property owner and not just a rich landlord, rich developer or somebody in the development field.

It could very well be some ordinary, working individual who has invested their life savings in a piece of property because they see an opportunity where property values are going up. This particular act could wipe out that investment, that security. I firmly believe that the minister and the government have not looked at this issue deeply enough and do not understand the ramifications of this particular

section of the legislation.

An even greater concern to me is that this legislation will create more hardship cases and more costs to the government. If we look at the Kenkels on 232 Street.... That was the case I referred to earlier. Perhaps because these people supported this government -- I'm not sure -- they ended up paying $675,000 for that piece of property in Maple Ridge. Why not do it upfront? Why not do it at the time that you're planning for it? Why not create an opportunity for the respective ministry and municipality to work together in the planning process?

Purchase the land at that point, and therefore take the liability off the landowner. Why not allow that process to happen? This legislation would not allow that process to happen. In fact, it gives the heavy hand to local government to do the planning and zoning irrespective of who owns the land and irrespective of the impact on that particular landowner.

It seems to me that if we're going to be fair in situations like the Maple Ridge situation, then we should look at how to create legislation that is indeed fair to all sides: fair to the municipality, fair to the landowner and fair to the ministry that is requesting that particular plan.

[D. Lovick in the chair.]

With that in mind, I move an amendment. The amendment is that this motion for second reading of Bill 25 be amended by deleting the words after "that" and substituting therefor the following: "...that Bill 25 not be read a second time, but that the subject matter be referred to the Select Standing Committee on Transportation, Municipal Affairs and Housing."

Deputy Speaker: I'm just going to ask the member if he would be willing to share a copy of that amendment with me. I have a question. Perhaps the member could proceed speaking to his motion, and I will have a look at this.

On the amendment.

L. Fox: I believe that this particular

section deserves wide public scrutiny. This government talks about the fact that it believes in wide consultation from all stakeholders, and I think property owners in British Columbia would want the opportunity to give input. What better mechanism is there to receive that input than an all-party select standing committee? I hope that the minister understands the ramifications and supports the intent, which, I believe, is a very important principle with respect to property rights and the right to own property in British Columbia.

I will wait and listen with interest to the minister's comments with respect to that particular amendment.

J. Tyabji: I rise to support the amendment. It's unusual, I'm sure, for the Alliance and Reform to be supporting amendments in second reading, but the reason I support it is that this bill before us is very detailed and impacts quite a number of other statutes. We've received some submissions on sections of the bill. To be honest, without consulting all the different statutes that are amended by the bill, it's very difficult to know if the amendments are going to impact the public as we are being told that they will.

We received a submission from people in Maple Ridge. The member who moved the amendment was speaking about the Maple Ridge case, and the allegations coming forward from the public about the impact of Bill 25 on decisions -- such as occurred in Maple Ridge -- are very serious. It's not possible to adequately address them in second reading. To some extent we'll be addressing them in committee stage, but I think one could argue quite successfully that by the time a bill gets to committee stage it's almost a fait accompli. Unless you can get a consequential amendment through in committee stage, you won't be able to affect the impact of the bill.

[3:30]

What I find interesting is that these submissions we're getting from Maple Ridge are very compelling. The reason that they're compelling is that they're talking about the direct impact this bill would have on people on an individual level. Their lives would be dramatically impacted.

Without time to look at this bill, cross-reference it to other statutes and study the court cases as they've occurred in Maple Ridge, it becomes extremely difficult to give due consideration to the submissions coming to us from the public. Even if, after addressing the bill, we find out that

[ Page 11234 ]

those concerns are ill-founded, then we can communicate that to the members of the public and allay their fears. However, if they are well-founded, then we would have the opportunity in a select standing committee to address those portions of the bill that would impact people this severely -- if it would be doing that -- and amend it so that it won't have that kind of impact.

The reason I speak in favour of this amendment is that we have enough legislation in front of us right now to look at, anyway. It's not as if we'd be running out of things to do if we put this before a select standing committee. If we put this to a select standing committee and gave proper consideration to the impact of it.... It does become extremely cumbersome, this being the third year that we've had consequential amendments to the Municipal Act. The Municipal Act that we can get from the library to reference the amendments in front of us right now doesn't yet contain last year's amendments.

Although it might be on computer, it hasn't been printed out for our purposes. We know that last year's amendments alone took up over 100 pages.

I rise in support of the amendment. A lot of research needs to be done on this bill before we can give it proper consideration. We're being asked to support Bill 25 in principle in second reading, and I don't think we can do that unless we know what the impact of this bill will be on people when it is implemented after passage. Given the allegations that have come before us so far, I think it's very important that we move very slowly and cautiously, and that we bring something else before the House for consideration and hoist this bill.

L. Hanson: I'm not sure that the greatest motivation behind the motion before us is the workload we have in bills. But certainly the principle of private property rights and the confiscation of private property without compensation, if we interpret the bill correctly, are very serious concerns for every British Columbian. The court case in Mission -- I believe it was -- seemed to say that by reserving it for highway purposes, the property rights and the value of that property had been taken away from the owners as a result of that decision. If our

interpretation of this bill is correct, it would seem to override that decision and provide circum- stances whereby the zoning for various public purposes could, in effect, cause private land to be confiscated, affecting the value and the owner's ability to enjoy that property as we would normally expect. If the minister recognizes that the confiscation of private property through zoning and other public uses is a very serious concern to all British Columbians, I'm sure that she would consider that very seriously and would at least give us an opportunity to look at this bill further before it is finalized.

C. Tanner: I too am very concerned about that particular

section of the bill. I've had correspondence with Mr. Hall and other people in that area who have had a problem. In fact, this amendment in the bill is motivated by not one but two court cases: one against Delta and one against this municipality. Like the other members, I agree that it effects a hardship on individuals.

We must give municipalities the right to plan ahead. It's a classic problem in this province. Because we don't have regional planning -- which was taken away by the previous government in '87, I think it was -- and because we so obviously suffer all over this province from a lack of planning, we must give municipalities and regions the ability to plan ahead. I don't think anybody would argue that point. But when we do that, we must recognize the basic Canadian truism that property rights are sacred. There is no way that we should take away the ability of people to be compensated when planning puts them in hardship.

I don't agree with the amendment, though, and I don't think this is the place to be discussing an amendment. I don't want to see this bill go down, because it's going to get shuffled off into a committee. If the minister would be prepared to give us some understanding that when we come to that clause in committee stage we can have adequate discussion on it, and if we want to make an amendment it will be discussed, I would be far happier using that procedure than trying to give this bill the hoist right now. There are other things that one member has already admitted are of particular interest to his constituency, and I don't think this is the way to behave. We will not support the amendment.

Hon. D. Marzari: I have a few brief words on the amendment. If one were going to engage in a full-scale debate of property rights in British Columbia or in the country, I would not choose this particular amendment to this particular bill to stage that argument around. The amendment in this

section in the bill is introduced to clarify a court decision, not to quash it. It was inserted to clarify the role of a municipality versus other planning agencies. There is a thin line that one must tread. In a planning position in any ministry or government, one has to be careful about individual or corporate property rights. But if we read the amendment carefully -- and I can guarantee that we will be reading it carefully at committee stage -- it will inform this House that the amendment is attempting to help a municipality clarify its own position vis-a-vis a court decision about the lands involved in Maple Ridge.

[3:45]

Therefore the government and I are very negative towards the amendment as it has been put forward in second reading, when a more detailed discussion should be engaged in during committee stage.

Amendment negatived on the following division:

YEAS -- 7

Weisgerber

Hanson

Serwa

Tyabji

Fox

Neufeld

H. De Jong

NAYS -- 50

Marzari

Priddy

Edwards

Zirnhelt

Garden

Perry

Hagen

Dosanjh

Hammell

B. Jones

Lortie

Miller

Smallwood

Cull

Gabelmann

Clark

MacPhail

Ramsey

Barlee

Blencoe

Pullinger

Janssen

Evans

Randall

Beattie

Farnworth

Conroy

Lord

Streifel

Sawicki

Jackson

Kasper

Krog

Brewin

Copping

Schreck

Lali

Hartley

Boone

Symons

M. de Jong

K. Jones

Warnke

Anderson

Jarvis

Tanner

Chisholm

Dalton

Farrell-Collins

Hurd

H. Lali: I seek leave to make an introduction.

[ Page 11235 ]

Leave granted.

An Hon. Member: Introduce your tailor.

H. Lali: I guess the member opposite wants me to introduce my tailor.

Interjection.

H. Lali: He could use the advice, as I've been told.

I would like to make an introduction on behalf of my hon. colleague the Minister of Education. Visiting us in the precincts today are 27 students from Summit Elementary School in Kamloops and their teacher, Mr. Corey Yamaoka. Would the House please make them welcome.

C. Serwa: I request leave to make an introduction.

Leave granted.

C. Serwa: I note that in the gallery is a good supporter of mine in the great constituency of Okanagan West. He's a hard worker, an entrepreneur and a great builder. Would the House please make Mr. John Zuk welcome.

On the main motion.

J. Tyabji: In reviewing this bill, as I said when speaking in favour of the amendment to send it to a select standing committee, there are a lot of details that I think can only be examined when looking in conjunction with other statutes and the constitutions of the various groups that will be changed in terms of votes cast and a quorum. There are consistent amendments to these throughout the bill. I have some concerns when I see some of the changes that are being made with respect to votes cast.

Rather than there being the reference that's usually made to quorum, we're having a change to two-thirds of the votes cast. That will certainly change the nature of an association's annual general meeting, for example, where there's an attempt to introduce a bylaw which may actually pass by two-thirds of the votes cast but may not be reflective of the membership or the people who would be eligible to vote on the change.

That might seem to be a fairly superficial change, but it could have dramatic ramifications, depending on how a meeting is called, how the groups are constituted and how far the number of votes cast is from the quorum that would normally be required when you're introducing a change in bylaw. So that's of great concern.

We see that throughout the bill there is a change with respect to non-resident property electors. That can, obvious- ly, be canvassed in committee stage as to why the minister felt that all these statutes had to be changed in this way.

When we spoke on the amendment to hoist the bill or send it to a select standing committee.... One thing that I think we need to canvass is to what extent expropriation without compensation is going to be allowed in this bill. I think the main reason we needed some time for it to go to a select standing committee is so we could actually find out who's right. There is a basic difference of opinion between the minister and the government, and the members of the public who have reviewed this bill by cross-referencing it with their experiences with the courts.

There certainly is a great fear that there will be expropriation without compensation as a result of this bill. The minister has said that that's not true, and I guess it remains to be seen -- either in committee stage or once it's implemented.

I note that one of the statutes that's amended is the Municipal Finance Authority Act. I'm very interested in how

section 8.1, which is being introduced in this bill in

section 117, is going to be enacted through the Municipal Finance Authority Act and in the way that it will secure the loans, for example. There is some strange wording that we can canvass in committee stage, but it says quite specifically in

section 8.1(3) that the Municipal Finance Authority "may lend securities and interest coupons...if the loan is fully secured" to a level "satisfactory to the trustees." Well, "satisfactory" is

not defined in the act. If that turns out to be an arbitrary designation by the trustees, that's a fairly responsible position for them to be in -- certainly not one the Alliance would feel comfortable with, on a point of principle. That should be defined. There's no point in leaving it to someone's own determination of what's satisfactory. Clearly, if loans are going to be made, there should be some security to an equal value or to the extent necessary, so that, in the event that the loans are defaulted on, it doesn't then impact on the public through the Municipal Finance Authority.

We see that through this bill we've moved from property elector to non-resident property elector in all the various statutes. I hope the minister is going to be defining the need for that and hopefully citing some precedents that led her and her ministry to rewrite all these statutes that way. Especially -- in my own opinion with regard to the School Act, anyway -- when we see all the various jurisdictions being redefined, that will have some serious ramifications locally if we don't understand why we should do that.

I notice that there's an amendment in this bill. I don't have it in front of me, but it appears that the bill is amending the voters list to allow people who do not have a home to vote -- at least the way I've read one

section of the bill. On a point of principle, I think it's commendable if we're going to allow homeless people to have the right to vote or to register. I just don't know how one is going to determine who they are, because there's nothing else in the bill that talks about how we determine whether that person lives in that area. If I could find it -- this is a fairly substantial bill.... The way I remember it being referred to is that in the event of a residential address not being available, the location of the area in which that person resides is deemed satisfactory to provide the person a place on the voters list.

If that is indeed geared toward the homeless -- which it seems to be, unless I've misread this

section -- could the minister tell us first of all how there's going to be some validation that those people actually exist? Although I'm sure it would never happen, you can see it would actually be possible to invent people, call them homeless people and pad the list with them. Could the minister tell us how we're going to be reassured on that point and how that will be implemented? And if there are people who actually can be determined to be voters but are homeless, to what extent will the other ministries be monitoring that, whether through Social Services or the Ministry of Health?

With that, I would like to end the debate on principle with a lot of concerns for committee stage. If this bill does indeed stand for expropriation without compensation, then of course we can't possibly support it in principle. Unfortunately, we don't know at this stage, because we haven't had a chance to adequately determine it.

And if it is going to allow people to appear on the voters list when there's no verification that they even exist, then we can't support that in principle. I will be very interested to cross-reference the bill in committee stage, to make sure we're not allowing such an open-ended construction of the voters list that there will be some room for manipulation. We

[ Page 11236 ]

know that in Surrey, for example, there continues to be a large question as to whether that was a valid election. I wish that now, having the opportunity to bring it up, the minister would call for a review of that. When the mayor of a municipality and enough of the residents are calling for a review, saying that the vote is not valid because the voters lists were tampered with, then this bill leads me to believe that it opens the door to that even wider. Yet we haven't even had a review of what exists in Surrey.

With that, I end on a matter of principle on this bill. After committee stage, obviously there will be a determination about whether it can be supported.

Hon. D. Marzari: Bill 25 is the culmination of a year's worth of consultation with the Union of British Columbia Municipalities and related agencies. It pulls together and rectifies a number of issues that were of concern to many of us during the elections at the civic level last year, most notably in the area of non-resident electors. It answers a lot of the questions that people ask. It validates a number of issues around contracts that have been signed but have not been recognized legally; communities have been waiting for validation for a number of years.

It is a housekeeping bill that pulls together a number of issues that relate to municipalities and how they do business in this province. It is certainly the business of Municipal Affairs to ensure that municipalities can function efficiently and effectively in their day-to-day workings.

There is no clause in this bill which threatens to expropriate without compensation. There is no clause in this bill which threatens to reduce or remove voters' privileges and rights. There is no clause in this bill which threatens the integrity and stability of the Municipal Finance Authority or its ability to do business on a day-to-day basis with money that comes to it through its municipal members. There is no threat in this bill to any structures involving or revolving around local government.

[4:00]

I know it's always tempting at second reading of a bill to bring in issues that would be better canvassed during committee stage. It's regrettable that some questions have been asked today in a way that actually casts a charge at municipal councils and how they do business. I am looking forward to committee stage of this bill so that those questions can be answered in full and detailed form, so that security and stability will continue to reign around those aspects of modernization that this bill represents for municipal councils across this province. With that, I move second reading.

Motion approved on division.

Bill 25, Municipal Affairs Statutes Amendment Act, 1994, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. E. Cull: Hon. Speaker, I call committee on Bill 15.

CORPORATION CAPITAL TAX AMENDMENT ACT, 1994

The House in committee on Bill 15; D. Lovick in the chair.

section 1.

F. Gingell: Perhaps we could have a discussion about sections 1, 2, 3, 4 and 5. I'd like to ask the minister whether the purpose of the first four sections is to put in place a method by which you can bring in

section 5. Did you get rid of the definition of "amount taxable" and "taxable paid up

capital" in order to use only the term "adjusted paid up capital" for the purposes of calculating the amount of tax?

Hon. E. Cull: Hon. Chair, I just want to clarify, because the member has mentioned sections 1, 2, 3, 4 and 5.... I do have an amendment standing in my name on the order paper for

section 5, so I don't want to allow us to move beyond

section 4 without me making that introduction. If the member wants to discuss all five sections together -- and I agree that they are interrelated -- the answer to his question is yes, the changes made in sections 1, 2, 3 and 4 are to make possible the new

definitions contained in

section 5.

I will then move the amendment right now, and we can discuss all five sections together. But I seek your clarification, hon. Chair, as to how you want to deal with these sections.

The Chair: I think I'm going to take guidance from the member for Delta South, as critic.

F. Gingell: I'd be quite happy to pass sections 1 to 4.

Sections 1 to 4 inclusive approved.

section 5.

Hon. E. Cull: I move the amendment standing in my name on the orders paper.

[SECTION 5(d), in paragraph (b)(iii) of the proposed definition of "cooperative corporation" by adding ", family

farm corporations" after "individuals" wherever it appears.

SECTION 5(g), in paragraph (

c) of the proposed definition of "family farm corporation" by deleting "80% of the corporation's shares" and substituting "at least 80% in number of the issued shares of each class of shares of the corporation that have attached to them the right to vote in the election of directors".]

On the amendment.

F. Gingell: Perhaps the minister could quickly brief us on what the amendment means.

Hon. E. Cull: There are two amendments made to

section 5. The first one is to 5(d), which modifies the definition of a cooperative corporation. Previously, 90 percent of a cooperative's shares had to be owned by individuals or other cooperatives in order for the cooperative to be exempt. With this amendment, 90 percent of a cooperative's shares must be owned by individuals, other cooperatives or a family farm corporation. So it adds family farm corporations.

The second amendment, to 5(g), clarifies the ownership test that a family farm corporation must pass if it's to be exempt. Eighty percent of the voting shares must be owned by a related group of individuals engaged in farming in order for the corporation to be exempt. This is being done simply to avoid the use of artificial share structures to get around the exemption.

F. Gingell: I'm glad the minister gave us this explanation, because I was wondering what "in the current or future fiscal year" meant -- which happens to be an amendment to

section 5 of the Financial Administration Amendment Act. You might have them keep them separate next time.

Amendment approved.

[ Page 11237 ]

section 5 as amended.

F. Gingell: I was most intrigued by the explanatory note for subsection (a), which says: "...is consequential to the amendments affected by sections 1 to 4 of this Bill and defines the term 'adjusted paid up capital'." I'm surprised that you didn't put in there that the purpose of this is to deprive non- residents of the provisions for the notch provision and the investment allowances applicable to residents of British Columbia. If I'm wrong, and that's not what is being accomplished here, I'd like you to advise me.

Hon. E. Cull: The member is incorrect. These amendments do not change in any way the calculation of the current tax base. It deals with a matter of clarity, which has been brought to our attention by legal advisers, and makes it very clear that it is a direct tax, as has always been intended with this tax. That was not clear in the original wording of the legislation, so this change has been made to do that. It does reflect our current administrative practice and, as I said at the outset, does not expand the application of this tax.

Indeed, as the member knows, the intent of this legislation overall is to exempt more businesses from the application of the corporation capital tax. It doesn't add any more through the changes and provisions.

I will confess at the outset -- because I have spent the last hour poring over this legislation again in preparation for this committee debate -- that there are quite a number of administrative, legal and wording changes which are complex and perhaps a little mystifying to those of us who are more laypeople as opposed to tax experts. You will see that there are a number of changes. I have assured myself that the only change to the application of the tax is the one that was set out in the intent of the legislation, with respect to exempting more corporations by raising the threshold and by adding family farms and cooperatives, and the change that was made to financial institutions.

F. Gingell: I must admit that I was looking at this in the last hour also. It is very difficult to do, because the statutes here do not reflect the 1993 amendments. There were quite a lot of amendments last year that aren't in there yet. What you're saying is that the notch provision and the investment allowance were not allowable deductions or reliefs for non-resident corporations before this date, and that has not been changed.

Hon. E. Cull: Yes, that's correct.

F. Gingell: You added in subsection (c).... Mr. Chairman, even though this goes on for many pages, I presume we will go through them in sequence.

Section 5(c)(

d) says: "...any arrangement or endeavour conducted with a view to earning revenue or profit from an activity or an investment." Clearly there must have been some reason for adding this description before the word "business." Can you tell us why that was added?

Hon. E. Cull: This is another one that is being done to clarify our current administrative practice. As an example, someone who has established a holding company could be doing business in British Columbia and trying to determine from our tax policy branch whether they are a permanent establishment under the definition of the act. This language is intended to clarify that situation.

L. Fox:

Section 5(

c) changes the definition of "business" from the previous legislation. Can the minister tell me if this change is to make the circle wider or to exempt some types of businesses?

Hon. E. Cull: It has no impact. It doesn't make it wider or narrower. It simply clarifies our existing administrative position with respect to what constitutes a permanent establishment under the act. This clarifies the legislative language, because we have had uncertainty and questions about it in the past. As I said a minute ago, it does not extend the application of the tax.

F. Gingell: Moving on to

section 5(d), I appreciate that this isn't the place for debate, but it's sometimes difficult to deal with these amendment bills. What happens with these cooperative corporations is that you're taking one particular type of business and exempting it from tax. Their competitor is doing exactly the same kind of thing and providing exactly the same kinds of services, and will be subject to tax -- at least I presume they will be subject to tax. An example would be Dairyland, or whatever Dairyland is now called.

I would presume that that milk and dairy products cooperative will be excluded by this description, but that a privately run dairy that purchases its milk from independent farmers and markets it under its own label will not be exempt from tax.

[4:15]

When you get to the business of "purchasing supplies, equipment or household necessities for, or to be sold to, its members or customers," the minute you put in "customers"....

Just like the Surrey cooperative lumber yard that was in Ladner for many years before they got into financial problems, it would have been exempt. There are cooperatives within the province.... My son, who now operates a similar business in that same location, will not be exempt. It seems to me that if you are as intent upon being as fair as you say you want to be, you have to be awfully careful that you don't exclude some people who do business in a certain fashion and catch others who do the same business in a different fashion and who do compete.

When you come to the issue of the family farm, you've exempted them all, whether they operate as cooperatives, as partnerships of corporations or in whatever manner. You've exempted the whole range of different organizations that do that business. It seems to me that in this

section you are exempting one group and putting them at an advantage over another group in the same business.

Hon. E. Cull: Hon. Chair, I'm going to seek your guidance on this again.

Section 5(

d) deals with the definition of "cooperative corporation" and the matters that the member is referring to are, in fact, dealt with in

section 9. I don't have any objection to getting into the debate about the exemption of cooperatives under the definition here, provided that we have some agreement from the House that we're not going to revisit it again in

section 9. On that understanding -- I see members opposite agreeing -- I will just continue as if we were dealing with

section 9, which does provide the exemption.

We made a policy decision as part of our overall commitment to reduce the impact of the corporation capital tax as the finances of the province improved. We have said that from the outset. The tax was introduced in 1992 to deal with the deficit and to ensure that we managed to bring the deficit down as quickly as possible. As the deficit has been reduced in each successive year, we have also reduced the impact of the corporation capital tax by raising the threshold.

[ Page 11238 ]

This year -- besides the strict financial criteria that have eliminated another 1,000 businesses from the corporation capital tax and reduced the tax for another 1,000 on top of that -- we have added family farms and cooperatives. I agree that there are circumstances where similar businesses providing similar services will have a different tax treatment as a result of their method of organization. I don't think that's unusual, although it certainly is a new twist with respect to this particular act.

But we have made a decision to support cooperative operations that support family farms through the amendments we're bringing in this year. As we move forward and review the tax in each successive year, we will look at other classes of business for which the tax will be reduced or eliminated.

F. Gingell: I was hoping that the reason you brought in the exemption for family farms was because of the recognition of particular circumstances of farmers. One doesn't like to pick out one particular trade or profession and its importance to the province -- and the difficulty, again, of the unfairness of incorporated farms, unincorporated farms, and farms that were bought in the fifties or in the 1980s, which have completely different inflated or deflated dollar values attached to their accounting records.

Are you saying that you have a series of business types that you will go through year by year and start knocking them off at the top? I appreciate that you're not going to discuss future policy, but I'd like to suggest that in this case, future policy would only be naming the particular businesses you were going to knock off rather than confirming that, yes, the intent is to think about the kinds of industries rather than do two things: first of all, just get rid of the damn tax -- it has caused you more trouble, more heartache and more bad media than you deserve, because it was his tax...

The Chair: Could we go through the Chair.

F. Gingell: Sorry.

...or secondly, just keep pushing up the exemption levels until there is no more tax. I was under the impression that it was pressure from farmers and cooperative organizations, which your party is very close to, that may have encouraged you to make this kind of change.

Hon. E. Cull: If the member is asking me to present him with a list of planned future exemptions, I'm sure he'll understand when I say that he's going to have to wait for future budgets and budget legislation to see that list.

But he's quite right. The situation with family farms has been brought to the attention of the government not only directly by the B.C. Federation of Agriculture and various other farming organizations but also by the Minister of Agriculture, who has lobbied very clearly on behalf of family farms and the farming industry in general, and has tried to ensure that their tax treatment is as equitable as possible.

We will continue to review the impact of this legislation in each budget year and will, as we did this year, receive a number of proposals from different types of businesses and business organizations concerning why their tax treatment should be different from others. We will evaluate each of those in turn.

F. Gingell: If there's no further discussion on (d), I will move on to (e), if I may. As I said, it's difficult with these bills. Trade accounts payable were, of course, allowable before as long as they were trade accounts payable. Maybe we could just deal with that. I came to the conclusion that (e)(

d) was something new.

Hon. E. Cull: No, (e)(d), which is "its trade accounts payable," is not new. What is new is that we've clarified the definition of "current accounts payable" and added the definition of "deferred credit," to remove the ambiguity in the calculation of a corporation's tax base. Again, these amendments confirm the original policy intent and strengthen the existing administrative position of the branch but don't expand the calculations of the current tax base.

F. Gingell: I'll move on to (e)(e). I'm quite impressed. I have to presume that members of the Reform caucus and the Social Credit caucus were successful in dealing with this item. It is new, I presume. It says that when you have a current account payable -- something that's clearly going to be paid -- at the moment the particular inventory item has been sold, even though it may happen to be secured by some form of chattel mortgage or lien or title, it is going to be treated as what it really is, which is an account payable that happens to be secured. I take it that (e)(

e) is in fact where you've made changes to provide for this to be exempt, and I'd like that confirmed.

Hon. E. Cull: This is how we have administered the act and have always administered it. Now we're just codifying our administrative practice in the legislation.

J. Weisgerber: Am I to understand from this that the liabilities of an automobile or machinery dealership with respect to inventory -- that may or may not be registered in the name of the dealer -- are not considered as part of the capital owned by that corporation? That is not a taxable inventory or value for the corporation.

Hon. E. Cull: That's correct.

J. Weisgerber: I'm pleased with that

interpretation, but I'm surprised by the response that that's the way it's always been treated. Certainly many of the representations made to me by corporations involved in that business suggested that they were in fact being taxed on an inventory they didn't necessarily own. They felt very much put upon by those early

interpretations in the legislation.

Hon. E. Cull: I have with me staff who are involved in administering this tax on behalf of the Ministry of Finance, and they are not aware of any such circumstances. If the member can bring specific details to my attention, I'd be happy to look into them for him and satisfy whether in fact the act as we have administered it, and now will be amending it, has been properly applied.

J. Weisgerber: I expect that it will probably go one better than that. I don't think those people, having read these copies or read or listened to these debates, who believe they've paid taxes inappropriately will need me to come to your door. I'm sure in fact they will be there, indicating.... I've been under the very clear impression that dealer inventory has been one of the real sore points with automobile and machinery dealers, who believe they were being taxed on an inventory they didn't own and on something that didn't represent a real asset in their business.

I'm quite surprised -- but quite pleasantly surprised -- to learn that if not in the past, at least in future, this will be dealt with in an appropriate way.

[ Page 11239 ]

F. Gingell: Just to ensure that there are no misunder- standings and that I understand the circumstances here, the questions of the member for Peace River South have focused on inventory. I'd like to suggest that they should focus on the debt. It is the accounts payable. If the inventory is on the books, then obviously it's part of the accounting record. It is the disallowance of the secured debt against that inventory, which this will clarify as being allowed as a deduction. Is that correct?

[J. Pullinger in the chair.]

Hon. E. Cull: Yes. This treats it as an accounts payable, which is exempt from tax. I can see the interest not only of the people who will be reading this and may want to pursue it a bit further, but of the members. Again, I'd be happy to have my tax policy people clarify this and give you the opportunity to probe with examples or questions, if you wish to do so.

F. Gingell: I know I can't go back and refight the famous case of 1970 or whatever. But having dealt with the automobile dealers, has the ministry given any thought to deal with other types of retailers, people who merchandise things, whose saleable inventory is paid on a regular, periodic basis -- every 30 days, in the normal course of business -- and happen to be secured by some form of floating-charge debenture? The creditworthiness of the organization simply doesn't sustain those terms of credit.

[4:30]

Hon. E. Cull: We're not specifically looking at the suggestion the member has outlined, but as I said, we are constantly reviewing this tax and trying to ensure that it works as fairly and efficiently as possible. We'll continue to do that on an ongoing basis each year.

F. Gingell: If there is nothing more on paragraph (e), I'd like to move on to paragraph (f).

Deferred credit is not a particularly comfortable term in my lexicon, but I see that you have defined it here. The first form of deferred credits I think of, which are better termed deferred revenues, is revenues received in advance for services that will be performed in the future -- or more commonly in many industries these days, funds received for the delivery of products in the future, as in the oil and gas industry, a means by which financing of the construction of pipelines and connections has been carried out.

To ensure that the amount is repaid, the lender has purchased, in effect, a volume of material to be delivered in future years, and it has loaned the funds for the purpose of getting those products to market.

Does this definition of deferred credit, or any other

section of the act, not allow for the deduction of those unearned revenue styles of deferred credits?

Hon. E. Cull: Perhaps the member would clarify that question. We're a little mystified as to what exactly he is getting at.

F. Gingell: The term "deferred credit," which you have now defined for the purposes of the corporation capital tax, is defined herein as: "...government assistance, government grants, investment tax credits or tax incentives that are reported or accounted for in the financial statements of the corporation, partnership or joint venture." Accountants use the term "deferred credit" to cover a large number of items.

The other major one, besides these things you have defined here, are what your staff and I would call unearned revenues, or revenues received in advance. I wonder if you could advise me whether those types of liabilities are allowed as deductions, and whether this changes that.

Hon. E. Cull: I am advised that that type of unearned revenue has always been included in the tax base.

F. Gingell: Moving on to subsection (g), this is the

section that defines the family farm corporation. I appreciate it also applies to

section 9. But in sub-subsection (c), you include what we'll call British Columbia-controlled family farms and exclude farms located in British Columbia that are not owned by residents of British Columbia. In this list of things that you're gradually going to knock off the list to be taxed under this act, did you have British Columbia-owned farms first and non-resident-owned farms on a lower scale? It surprises me that this might be read as being against other Canadians, such as residents of Ontario and Alberta. Maybe you'd just like to cover that item for us.

Hon. E. Cull: The family farms, particularly those that are owned primarily by British Columbians, tend to be the smaller farms. The foreign-owned farms tend to be the larger operations. Part of what we're attempting to do here is to provide some relief to the small family farm. This is consistent with the treatment in other provinces.

F. Gingell: I'm sure that in the Peace River -- I am not sure, but at least I'm sure the member for up there can tell us -- the farms don't necessarily know any provincial boundaries, particularly since in that part of the world the provincial boundaries are a nice straight line. A British Columbia farmer who happens to reside on the 40 acres, say, that are on the Alberta side of the border would happily be exempt from provincial sales tax on many consumer goods, but your intention is to catch them in the corporate capital tax.

Hon. E. Cull: Yes, you have to draw the line somewhere on this, and we have done so in favour of British Columbia and British Columbians.

J. Weisgerber: If I could, with the indulgence of the minister, under subsection (e), which deals with current accounts payable, sub-subsection (e)(ii) is getting back to this question of inventory or dealers' inventory. Since our discussions, I've been advised by someone who is reasonably knowledgeable in the area that the practice has been to accept as accounts payable notes on goods, vehicles and equipment that have been in inventory up to 90 days. But once an automobile or piece of farm machinery has been in inventory more than 90 days, it's then treated as an asset of the corporation.

I'm assuming, then, since there is no indication of that restriction in this newly amended legislation, that that represents a change, or at least that that restriction with regard to the amount of time the goods have been in inventory wouldn't exist with this legislation.

Hon. E. Cull: My understanding is that it won't matter whether it's under or over 90 days; we won't be including it.

J. Weisgerber: I'm sure that will be welcome news. If there's a change to this legislation or to the

interpretation of the rules, it must reflect a change from the policy that has

[ Page 11240 ]

existed for the benefit of those people who are involved in this kind of business.

F. Gingell: Could the minister please tell this House what apiculture is?

Hon. E. Cull: I'm told it's the raising of bees.

F. Gingell: That's p-e-a-s?

Hon. E. Cull: No, b-e-e-s.

F. Gingell: Thank you. Could the minister please tell me what "raising or producing prescribed biological control agents" means?

Hon. E. Cull: This is one that I'm better informed on. It's things like raising ladybugs or other insects that would be used as biological pest control. I recommend it for your garden.

F. Gingell: I presume that would include bees, too, if they were there for the purpose of pollination.

You have the ability to add "other animals designated by regulation" to the definition of livestock, which seems to make sense. If someone invents a new animal or decides to farm it, you add it. But you didn't give yourself the same provision under (b), the growing of crops, cereals, fruits, vegetables, etc.

Hon. E. Cull: I think the member will appreciate with respect to these

definitions that we have taken guidance from the Ministry of Agriculture, and I'm advised that the definition in (

b) is broad enough to cover just about anything.

F. Gingell: If there's no more on (g), we'll go on to (

h) and (i), which we can bracket. This is a

section that was dealt with in Bill 40 last year, and you're making amendments to it now. In trying to go back, it looks as though the original sections dealt with funds, with savings institutions, and that doesn't make sense to me. Could you please advise us what your briefing notes say this does?

Hon. E. Cull: This, again, is another one of the changes that's being made to clarify the

definitions that are in the act. This one clarifies the

definitions of "loans and advances to other corporations." The revised wording now ensures that the qualifying loans and advances made between certain associated corporations may be included in the investment allowance deduction. That deduction is available to corporations, and it's provided to make sure that the same capital isn't taxed twice -- in other words, it's not taxed in the hands of both the lender and the borrower, since it forms part of the capital base of each company. This is just a way of ensuring and clarifying that definition again. We've been advised that the wording is ambiguous and confusing to both the regulators and those who are regulated by it.

[4:45]

F. Gingell: When I go back to Bill 40 of 1993, which dealt with the amendments to

section 1 of the Corporation Capital Tax Act that went through last year -- I'm not in the consolidated statutes -- subsection 1(1)(

e) dealt with:

"...any amounts provided to or for the benefit of a savings institution by the corporation as a result of which the savings institution is or becomes indebted to the corporation including (

i) a deposit by the corporation with the savings institution, and (ii) rights held...." It seemed that this was to make sure that some institution didn't have to include their deposits in the calculation of the tax. That, I presume, has now been taken out. Or am I looking at the wrong page and in the wrong place? I'm looking at what I believe to be

section 1 of the act, under the definition "loans and advances...to corporations," which includes, in relation to a corporation, (a), (b), (

c) and (d), and then this is (e).

Hon. E. Cull: If the member will assist us, we'll stand that definition down, and I'll just have one of my staff check on exactly what has happened there. It's not clear to us what the correct answer to your question is.

F. Gingell: I have no more questions on

section 5. We can pass

section 5.

Hon. E. Cull: Do you want to pass it? I was going to get the answer.

F. Gingell: Yes, subject to that.

Section 5 as amended approved.

section 6.

F. Gingell: I have a similar question with respect to

section 6. I understand what subsection (4) is, but could you tell me what subsection (3) is?

Hon. E. Cull: I don't have the consolidated act with me, because the person who has gone to obtain the information on the last question has taken the copy with him. The amendment is only to subsection (4), so I'm not sure what the relevance of inquiring about subsection (3) is. You have the act open in front of you. It's confusing when you don't have a consolidated, up-to- date act. We only have a working copy, not an official version of it.

F. Gingell: I would like to have some words to that, then. When I go back to the original act, there was a subsection (1) and a subsection (2). I can't find the creation of a subsection (3) in last year's Bill 40, so I am mystified as to why we have a subsection (4).

Hon. E. Cull: I am certain that a subsection (3) was added in the amendments last year, and we can clarify that with the consolidated bill. The purpose of this amendment is simply to ensure that the Income Tax Act concept of associated corporations is used, its current administrative practice, and how other provincial governments treat their corporation capital tax.

Sections 6 and 7 approved.

section 8.

F. Gingell: The minister may wish to wait until the official returns, but I am interested to know why, under subsection (c), you're bringing in subsection (6.1): "Where a corporation is, under this section, required to pay a tax, this

section imposes that tax on that corporation...." Is it true that some corporation found some way of not paying the tax?

[ Page 11241 ]

Hon. E. Cull: I'm not aware of any instances like that. Sometimes legislative drafting becomes a bit obscure in terms of its reason for having those

section in there, but I assume that we have been advised that that clarifies the intent of the act, and it's one of the ambiguities we have been advised to clarify in our legislation this year. I am not aware of any particular circumstances arising that may have caused that.

F. Gingell: If something did happen that caused this change to be made -- i.e., some major flaw in the previous legislation -- would the minister give me an assurance that she will so advise me? Then we can carry on.

Hon. E. Cull: Yes, I'll undertake to do that.

Section 8 approved.

section 9.

C. Serwa: With respect to

section 9 -- amendments to exclude a family farm corporation and a cooperative corporation -- I have a little difficulty with the cooperative corporation, because many cooperatives engage in business ventures that are paralleled by private corporations. I can point to one example in the forest industry. The Saskatchewan co-op at Canoe by Salmon Arm is a large, well-capitalized industry working under cooperative title, with a substantial investment in plant and equipment. Is it going to be given some special incentive that other mills will not get simply because it is a cooperative? If so, what is the basis for that sort of judgment call?

Hon. E. Cull: We did get into this when we were going through the definition. Because these sections are related, I'll refer the member back to the definition. A large cooperative organization that was not based in the province would not be exempt from the corporation capital tax, because of the definition. The definition is fairly clear. If you go back to page 2 of the bill, you'll see that it is eliminating from the exemption the kind of cooperative you've just described.

C. Serwa: That's based on the assumption that the cooperative is owned by a cooperative in Saskatchewan. I don't know whether that is the actual name. My concern is that it is a cooperative. It's here in British Columbia, and perhaps the ownership is spread throughout residents in British Columbia. There are a number of co-ops in the distribution industry. For example, in our community there is the Growers co-op, which was originally set up by growers. They're competing in the same format with other commercial businesses and providing a wide array of materials for the horticultural and agricultural industries.

Are they going to be given this special concession in opposition to the industries that they must compete with?

Hon. E. Cull: As I said when we were discussing the definition of cooperative corporation, the government has decided to provide an exemption to certain types of cooperatives. We appreciate that that means there may be some similar businesses that will not get this break because of their organizational structure. If they do meet the ownership, residency and share provisions of the definition, then those businesses will be exempt.

I know the member was in the House, but I saw him reading intently during that part of the debate, so he may have missed some of the discussion. The intent of our government is to continue to review the application of this tax each year and to listen to those businesses and categories of businesses that come forward asking for different treatment. Besides just dealing with the financial threshold limitation, this year we have dealt with farms and co-ops. That's not to say that in future years we might not deal with other types of businesses.

C. Serwa: I certainly understand the logic and the rationale for farming co-ops. Sun-Rype is an obvious example, and a variety of packing houses in the Okanagan are examples. But generally they are not competing with the private sector; they are grower- owned. My concern is with cooperatives not related to agriculture that are competing with other commercial industries in a similar field. I have a great deal of difficulty understanding the basis for the government's choice of cooperatives carte blanche. I could understand the logic if it referred to agricultural cooperatives.

But with cooperatives per se competing against other corporations that have to pay taxes, it makes me wonder whether this is a very narrow political philosophy or if there is something more substantial to the decision. Is it that they use their money for social engineering or something? I don't really know if this is true or not, but it doesn't seem to make any solid practical sense.

There is a reason, because the farming industry is certainly hard-pressed in British Columbia, and we went through the exercise of explaining their challenges this morning. But what we have here appears to be more of a moral judgment than a judgment based on anything substantial, eliminating all cooperatives as long as the ownership criteria are met. I have a great deal of difficulty with that.

Hon. E. Cull: The member should be aware that probably about 200 co-ops are affected by the change in this legislation, and that at least three-quarters of them are agricultural co-ops. The vast majority that will benefit from this will be tied to agriculture.

[5:00]

This is a policy decision of government. We support cooperative enterprise and have decided -- as we have decided to support family farms in this change -- to provide additional support for cooperative enterprise this year through the elimination of the tax. I want to repeat what I said earlier. We will continue to look at the application of this tax. I received a number of presentations from the business community this year about ways that we could change the tax, and I expect I'll receive a similar number over the next year. I will review those then and see what we can afford and what makes sense.

F. Gingell: Seeing that we were allowed to discuss the implications of

section 9 when we discussed

section 5, I'd now like to stretch it a little and discuss

section 5 as we discuss

section 9.

There were two things. The first thing was that I heard the minister say that there was some residential ownership requirement in

section 5(d), and I couldn't find that.

Hon. E. Cull: I apologize. I was mixing in the farm definition, which, of course, goes with the cooperative corporation. The definition doesn't apply to residency.

F. Gingell: One second thought came to me during this discussion.

Section 5(d)(a)(iii) says: "...performing services for its members or customers...." Would that service include the provision of a job -- i.e., will this cooperative exemption

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exempt work cooperatives? For instance, I'm thinking of Richmond Plywood as an example of a business that is not intended to be exempt, and the cooperative exercise has to do with the ownership of the equipment and the employment therein.

Hon. E. Cull: I don't believe it would. That's certainly not the intent.

F. Gingell: I was also interested in the matter that was brought up by the member for Okanagan West. The discussion evolved from the belief that this sawmill is owned in another province because it has another province's name on its title. But it's hard to imagine how a sawmill operation would fit within this category, unless it was a cooperative of individuals who are in the logging business or the retail lumber business. I would like to know whether it is intended that those might be caught in this, because the term "cooperative" has a lot of meanings.

Hon. E. Cull: No, I don't believe the definition would capture that type of business.

L. Fox: I was down getting ready to watch the hockey game, but this discussion actually got interesting. I want to get some clarification. The minister stated earlier....

Interjection.

L. Fox: Right on! I'm not ashamed to admit that I want to watch the hockey game this evening. I'm sure most British Columbians are in fact already glued to that channel rather than this one.

With respect to the definition of "cooperative," I heard the minister talk earlier about the cooperatives who service their members being legitimate in terms of having an exemption under this. I guess that begs the question: if you have a cooperative that serves members but is also in the retail business, for instance, and serves non-members in that retail business, and therefore competes with other retail outlets within that community, does that in fact make that cooperative subject to the capital tax?

Hon. E. Cull: The member should have turned the channel from the hockey game to the legislative channel sooner, because I have already answered that question twice in this debate. The definition of "cooperative corporation" says "performing

services for its members or customers," so you don't have to be a member to qualify. You don't have to service only your members; you can be in a cooperative that is in a retail situation.

Sections 9 to 12 inclusive approved.

section 13.

F. Gingell: I was going to make a suggestion. If the minister, in view of her earlier statements about dealing with this tax, wishes to make an amendment to increase these exemptions -- which at this moment would not be accepted; and if I were to make it, it would be ruled out of order -- I can assure her that we will cooperate in every way possible.

Sections 13 to 15 inclusive approved.

section 16.

F. Gingell: The purpose is, I take it, to just take out subsection (4) and pop it up into subsection (1). It gets rid of subsection (4). Is that all this accomplishes?

Hon. E. Cull: I'm not sure about removing subsection (4) and plopping it up and all the rest that was described over there. What this

section does is ensure that the return on the final balance of the tax has to be submitted within 184 days of the taxpayer's year-end. It clarifies that and makes some changes to make that effective.

F. Gingell: Subsection (

c) brings in this new section: "If a corporation fails or neglects to comply with subsection (1)(b), the corporation shall pay interest on the amount it failed...." Is this being put in there to ensure that payments are applied to interest first and principal second?

Hon. E. Cull: Yes.

Section 16 approved.

section 17.

F. Gingell:

Section 17 surprises me. This is a little exercise to increase the revenues of the province in one year only. And that's exactly what it does: it will increase revenues by one-twelfth of the annual amount of the tax -- roughly $30 million.

Interjection.

F. Gingell: Well, Alan says no. If it doesn't bring the payments forward by one month, perhaps the minister will advise me what it does do.

Hon. E. Cull: No, it doesn't get extra money by doing this. What this does is clarify the time in the month that the tax has to be paid. It deals with situations where the tax would be paid in the middle of a month, and it makes sure that we don't end up doing exactly what the member said: collecting an additional amount of revenue.

F. Gingell: As I understood this, the instalments were previously payable on the fifteenth day of the fourth, seventh, tenth and thirteenth month after the beginning of the current taxation year, and this makes it the fifteenth day of the third, sixth, ninth and twelfth month of the taxation year.

Hon. E. Cull: This is particularly obscure in terms of the effect of it. But if the corporation had its year-end on, say, January 15, what used to happen was that you would go back to the beginning of the month and count four months forward: your instalments would begin in April. If your corporation has a year- end of January 15, what this does is move you ahead a month and add three months, and you still start in April. I'm sure that this improves the understandability of the tax laws to those who have to collect taxes and pay them. Again, the impact on the taxpayer is absolutely neutral.

Sections 17 to 20 inclusive approved.

section 21.

F. Gingell: Do I understand that if somebody files one day late and pays the tax with that one-day late filing, they are subject to a 20 percent penalty of the amount of the unpaid tax at the due date?

[5:15]

Hon. E. Cull: There are various penalties under the act. This

section clarifies that if you are late in paying a tax you are subject to both interest and penalty, which is consistent with other tax laws.

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F. Gingell:

Section 43(1) of the act provides for a 10 percent penalty if you file late.

Section 43(2) provides for a penalty of 10 percent if you fail to pay the tax. If you forgot to fill in one of the squares or boxes in the return, under

section 43(3) there is a further penalty of $50. Perhaps it's inappropriate for me to ask these questions, because I'm not really dealing so much with the amendment, but to more properly understand sections 43(1) and 43(2) as they presently stand, could the minister advise if it is administrative policy to ever charge two 10 percent penalties?

Hon. E. Cull: No, it isn't. We wouldn't stack the penalties on top of one another. Again, I do make the offer: if you would like a technical briefing on the whole act, not just the amendments that we're bringing in here, I'm quite willing to provide that to you.

C. Serwa: It is my understanding that in this

section the government has actually been double-charging the penalty as well as interest for the last two years. Is that correct?

Hon. E. Cull: Yes, that is correct. What the member for Delta South was asking a minute ago was whether we would charge two penalties and have several penalties all stacked up on one another -- charge multiple penalties. The answer to that is no. This

section does clarify that you would be liable if you were delinquent in paying your taxable interest and a penalty. I've just said that is consistent with other tax law; it's quite common.

C. Serwa: Can the minister confirm that they have been charging this double penalty for the last two years without any legislative authority to do so?

Hon. E. Cull: No, we have not been charging it without the authority to do so.

C. Serwa: This

section is new and gives the government the authority to do so. Where did you get the authority to make this double charge -- penalty and interest -- for the previous two years, without legislative authority?

Hon. E. Cull: The member wasn't hearing me correctly. I've said that we have not charged penalty and interest in the past two years.

Section 21 approved.

section 22.

F. Gingell: I just cannot allow a

section that gives retroactivity for such a long period of time to pass without comment. It really is important for people to have a sense of certainty -- to know what the rules are -- and not be in a position whereby the rules can be changed after the game has started. I appreciate that there were only dormant regulations, but when you have regulations as we do in this bill, they have a fair