1976 Legislative Session: 1st Session, 31st 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, APRIL 27, 1976

Afternoon Sitting

[ Page

1115 ]

CONTENTS

Routine proceedings

Oral questions

Lighthouse Communications Ltd. Mr. Gibson — 1115

Human rights branch inquiries. Mr. King — 1115

Administering of secrecy oath to M.H. Davidson. Ms. Brown — 1115

Cooperation with federal government on Kootenay Lake. Hon. Mr. Nielsen answers

— 1116

Vancouver East by-election. Mr. Stupich — 1116

Keep Women Alive Programme. Mr. Levi — 1117

Government impact on inflation. Mr. Gibson — 1117

Employment of Ron Worley. Ms. Brown — 1117

Wages of Harry Jerome. Mr. Lea — 1117

Committee of Supply: Department of Finance estimates.

On vote 61

Mr. Stupich — 1118

Hon. Mr. Wolfe — 1119

Mr. Stupich — 1120

Mr. Lea — 1120

Hon. Mr. Wolfe — 1121

Mr. Lea — 1121

Hon. Mr. Wolfe — 1122

Mr. Gibson — 1122

Mr. Cocke — 1123

Hon. Mr. Wolfe — 1124

Mr.Lauk — 1124

Hon. Mr. Wolfe — 1125

Mr. Gibson — 1125

Mr. Stupich — 1125

Hon. Mr. Wolfe — 1126

Mr. Lea — 1126

Mr.Lauk — 1127

Mr. Stupich — 1127

Hon. Mr. Wolfe — 1128

Mr. Lea — 1128

Mr. Gibson — 1128

Mr. Macdonald — 1128

Mr. Stupich — 1128

Hon. Mr. Wolfe — 1128

Mr. Stupich — 1129

Mr.Cocke — 1129

Mr. Lea — 1130

Mr. Stupich — 1131

Hon. Mr. Wolfe — 1132

Mr. King — 1132

Hon. Mr. Wolfe — 1133

Mr. Stupich — 1133

Mr. Cocke — 1134

Mr. Gibson — 1135

Mr. Nicolson — 1136

Hon. Mr. Wolfe — 1136

Mr. Gibson — 1136

Mrs. Wallace — 1136

Hon. Mr. Wolfe — 1137

Ms. Sanford — 1137

Hon. Mr. Wolfe — 1137

Ms. Sanford — 1138

Mr. Cocke — 1138

Mr. Stupich — 1139

Mr. Macdonald — 1140

Mr. Lea — 1141

Mr. Wallace — 1142

Hon. Mr. Wolfe — 1143

Mr. Wallace — 1144

Hon. Mr. Wolfe — 1145

Mr. Wallace — 1145

Hon. Mr. Wolfe — 1146

Mr. Wallace — 1146

Hon. Mr. Wolfe — 1146

Mr. Wallace — 1147

Hon. Mr. Wolfe 1147

Mr. Wallace — 1147

Ms. Sanford — 1147

Mr. Stupich — 1148

Hon. Mr. Wolfe — 1148

Mr. Lea — 1149

Ms. Brown — 1149

Mr. Gibson — 1150

Mr. Lea — 1151

Hon. Mr. Wolfe — 1151

Mr. Gibson — 1151

Hon. Mr. Wolfe — 1152

Mr. Gibson — 1152

Mr. King — 1152

TUESDAY, APRIL 27, 1976

The House met at 2 p.m.

Prayers.

HON. W.N. VANDER ZALM (Minister of Human Resources): Mr.

Speaker, I would ask the House to join me in welcoming a group of

students from various lower mainland municipalities. They are here

today travelling Victoria, and are sponsored by Crown Zellerbach. They

are in the legislative session today, and I'd like to welcome them.

HON. K.R. MAIR (Minister of Consumer Services): Mr. Speaker,

I would like the House to welcome a visitor from Australia, Mr. David

Pluckrose, Commissioner for Consumer Affairs for the State of

Queensland, Australia. Mr. Speaker, Mr. Pluckrose is on a world tour to

observe legislation and administration of other consumer affairs

jurisdictions. He is commencing his North America tour here and I would

ask the House to make him welcome.

MR. G.H. KERSTER (Coquitlam): Mr. Speaker, visiting the House

and in the gallery today are a group of students from Centennial high

school in Coquitlam with their teacher Mr. Dubasov. I'd like the House

to make them welcome.

Oral questions.

LIGHTHOUSE COMMUNICATIONS LTD.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Speaker, I

have a question for the Minister of Mines. Could the Minister advise

the House if Lighthouse Communications Ltd., headed by Mr. Ian

Fothergill, is serving his department in any capacity?

HON. T.M. WATERLAND (Minister of Mines and Petroleum Resources):

In answer to the question from the hon. member, Mr. Speaker, no, at

this time Lighthouse Communications is not. I did ask Lighthouse

Communications a couple of weeks ago to make a presentation for me to a

group of mining support companies, but at this time it is not employed

by the department.

MR. GIBSON: On a supplementary, Mr. Speaker: is the minister

then confirming that he approached Lighthouse to do work for a mining

industry group? Did he make any suggestions to that group that

Lighthouse would be an appropriate communications consultant?

HON. MR. WATERLAND: The Lighthouse Communications group was employed

by the department, and no suggestion whatsoever was made to the mining group

that Lighthouse should do any work for them.

MR. GIBSON: On a further supplementary, Mr. Speaker: the

minister just said the Lighthouse group was employed by the department,

but I understood his first answer to say they were not doing any work

for the department. Could he say which it is?

HON. MR. WATERLAND: To the hon. member — perhaps he has a

hearing problem: I said they were not at this time doing any work, but

they have in the past done a short job for the department.

HUMAN RIGHTS BRANCH INQUIRIES

MR. W.S. KING (Leader of the Opposition): A question to the

Minister of Labour, Mr. Speaker. Yesterday I queried him regarding the

status of the Human Rights case involving Dr. Johanna Bruhn-Mou and the

College of Dental Surgeons. I would ask the minister whether he has

received representation on behalf of either of those parties, either

from them individually or through a solicitor on their behalf.

HON. L.A. WILLIAMS (Minister of Labour): I gave the hon.

member the answer yesterday in my request for advice from Dr.

Bruhn-Mou. I have not had representations made to me by solicitors for

either party. However, to make it perfectly clear so that there is no

question as to the meaning of my answer, I did communicate with the

solicitors for the College of Dental Surgeons for one purpose only:

that was to obtain as quickly as I could a copy of the reasons for

judgment in the Supreme Court of British Columbia action. They provided

me with a copy of those reasons for judgment. But no representations

have been made to me by lawyers for either party.

ADMINISTERING OF

SECRECY OATH TO M.H. DAVIDSON

MS. R. BROWN (Vancouver-Burrard): Mr. Speaker, my question is

to the hon. Provincial Secretary. On April 15, there was an

order-in-council 1248 which appointed a Mr. M.H. Davidson consultant to

the Treasury Board on labour negotiations relating to the public

service. I think the order-in-council also said that he was to be paid

$250 a day. I am wondering whether you could tell me whether Mr.

Davidson did take the public service oath, first of all, as required by

law and, secondly, could you tell the House what Mr. Davidson's

qualifications are?

HON. G.M. McCARTHY (Provincial Secretary):

[ Page 1116 ]

Mr. Speaker, to the hon. first member for Vancouver-Burrard:

firstly, to answer your question regarding the oath of secrecy, I do

not, from my office, have the oath of secrecy administered. It is done

through the Clerks' office and, as such, the Clerks' office calls the

various consultants, employees and so on. That is why, in a previous

question period, I was not aware that one former questioner had not

taken the oath of secrecy, nor had they. In answer to whether or not

Mr. Davidson has indeed taken the oath of secrecy, I cannot tell you

that. As you have pointed out, his appointment was approximately April

15, and whether or not the Clerks' office has got around to that at

this point, I am not sure.

As to what Mr. Davidson's position is with the Treasury Board, he is

appointed to the Treasury Board and is responsible to them but will act

in a capacity to give advice to the government — i.e. the employer —

through the Treasury Board on all of the negotiations that are done in

the public service. He is hired as a consultant at the present time at

the rate that you mentioned.

MS. BROWN: Mr. Speaker, to the minister: I am wondering

whether it wouldn't be a safeguard to check whether the oath has been

taken by consultants before actually getting them to do jobs for the

government since there seems to be a law somewhere on the books that

says this is necessary.

SOME HON. MEMBERS: Order!

MR. SPEAKER: First of all, hon. member, that was more of a statement than a question.

MS. BROWN: A supplemental then, Mr. Speaker.

Interjections.

MS. BROWN: Is there a regulation that says that consultants

to the government should take the oath of secrecy? That's my first

question. My second question is: since, hopefully, the answer is yes,

wouldn't the minister be advised to check — out of curiosity, if

nothing else — whether appointments have taken the oath before giving

them jobs to do on behalf of the government?

HON. MRS. McCARTHY: Mr. Speaker, I think the member knows

that this is a new policy which was initiated that we felt that all

members who are working in confidential positions should, indeed, take

the oath of secrecy. Since that time there have been a number that have

had to be processed and I don't think we should reflect on the speed

with which that is being done. However, I would be very pleased indeed

to take your advice that once in a while we should check to see if they

are all done. We should not reflect on the efficiency of the Clerks'

office; I think it's being done very well and we are not certainly....

Interjections.

MS. BROWN: On a further supplemental question, Mr. Speaker. I

would certainly like to clarify that I wouldn't dare reflect on the

efficiency of the Clerks' office.

SOME HON. MEMBERS: Oh, oh!

MS. BROWN: My second question had to do with Mr. Davidson's

qualifications. I am wondering whether the minister would outline those

for the House.

HON. MRS. McCARTHY: Mr. Davidson comes very well qualified to

the government. If the member would like to have the background

information I would be glad to make it available to her, and to the

House if necessary, but you appreciate that we had established that

before we hired him.

CO-OPERATION WITH FEDERAL

GOVERNMENT ON KOOTENAY LAKE

HON. J.A. NIELSEN (Minister of Environment): Mr. Speaker, in

answer to a question brought forward by the member for Nelson-Creston

(Mr. Nicolson) regarding the Kootenay Lakes, in January of 1975, the

Inland Waters Directorate was approached for assistance, identification

and analysis of biological samples. The province has expressed its

willingness to consider a cooperative involvement in efforts on

Kootenay Lake, has provided some information on the nature of the

sampling programme in progress at this time, but to date the federal

government has not advised us as to the details of the programme nor

the extent to which they wish to involve the province. It's believed

that additional information will perhaps be made available from the

federal government to our regional staff in the near future.

VANCOUVER EAST BY-ELECTION

MR. D.D. STUPICH (Nanaimo): Mr. Speaker, to the Provincial

Secretary. I wonder if she could tell us whether or not she has

requested a report from the registrar of voters, Mr. Morton, as to the

progress of enumeration in Vancouver East.

HON. MRS. McCARTHY: To the member for Nanaimo, Mr. Speaker, the answer is yes.

[ Page 1117 ]

MR. STUPICH: Mr. Speaker, a supplementary. Can she tell us what was the answer to that request for information?

HON. MRS. McCARTHY: I would like to give you the answer, but I have not received the reply, but when I do I'll be pleased to give you the answer.

KEEP WOMEN ALIVE PROGRAMME

MR. N. LEVI (Vancouver-Burrard): To the Provincial Secretary,

Mr. Speaker. Before the Easter break, the minister reported on the

$17,000 grant to the breast cancer project, and at that time I asked

her if she could inform us whether the professional advisory committee

was consulted by your department before the grant was made. You said

you would report back.

HON. MRS. McCARTHY: I believe I took that question as notice and I'll have to report to you at a later date.

GOVERNMENT IMPACT ON INFLATION

MR. GIBSON: Mr. Speaker, to the Minister of Consumer

Services. In view of the tremendous concern, a proper concern,

expressed by the minister in the rise in the cost of living in British

Columbia of 2.4 per cent, more than any other part of Canada by far,

and in view of the revelation that 2.1 points of those 2.4 were caused

by the ICBC increases, and in view of the report by Dr. Cragg of the

University of British Columbia that the sales tax increase will boost

up the cost of living in British Columbia next month by another 1 per

cent, will the minister ask his own government to cease its devastating

impact on inflation in this province?

AN HON. MEMBER: Hear, hear!

HON. MR. MAIR: No.

AN HON. MEMBER: Oh, arrogance!

EMPLOYMENT OF RON WORLEY

MS. BROWN: Mr. Speaker, the hon. Provincial Secretary also

took one of my questions as notice on April 13, and I'm wondering

whether she has a reply for us to date. The question had to do with Mr.

Ronald Worley and the question at that time was: in what capacity was

he employed by the government? On that date you said that you would

take the question as notice and that you would return as quickly as

possible with a complete answer. I'm wondering whether you have that.

MR. SPEAKER: The hon. member knows that the hon. minister has

the right to take a question as notice. You can perhaps refer the

question to her by suggesting that you would like an answer. You can't

insist on any particular time, Hon. Member, when any hon. minister has

to provide the answer to the House.

MS. BROWN: I appreciate that, Mr. Speaker, and I'm not insisting. I was merely asking whether the hon. minister now had the answer.

WAGES OF HARRY JEROME

MR. G.R. LEA (Prince Rupert): Mr. Speaker, a question to the

hon. Provincial Secretary. As I recall it, when Mr. Harry Jerome was

made an employee of the province, it didn't state in the

order-in-council his wages. Could you tell us how much money and fringe

benefits Mr. Jerome will be making?

HON. MRS. McCARTHY: To the member for Prince Rupert, Mr.

Jerome's salary is $24,000 annually. As far as fringe benefits are

concerned, he would receive the ordinary benefits that accrue to that

kind of an appointment. It would not be anything more than his

expenses. His expenses are curtailed within the province of British

Columbia and to give the report within six months. Naturally it's a

study on all of the recreational and sports programmes within the

province of British Columbia, so he will have some travelling expenses

which this province will pay. for. He is extremely qualified to do this

position. We're very proud to have him.

MR. LEA: As I understand it also, it is a six-month

appointment, I believe. But under an order-in-council appointment there

are certain fringe benefits like pension, medical and that sort of

thing. Is there any possibility that Mr. Jerome will be kept on after

the six-month period?

MR. SPEAKER: Hon. member, I think that at this point that

question is out of order in that you're asking a minister to reflect on

and anticipate an event that may not happen.

HON. MR. MAIR: Mr. Speaker, at this time I would like to

table an answer to a question raised about a week ago by the hon.

member for Comox (Ms. Sanford). I think this answer will also take care

of that question which is on the order paper — if I may at this time.

(See appendix.)

Presenting reports.

HON. P.L. McGEER (Minister of Education): Mr. Speaker, with leave I wish to table the annual report and the audited financial statement of the Insurance

[ Page 1118 ]

Corp. of British Columbia for the year ended February 29, 1976.

Leave granted.

Hon. Mr. Waterland presents the 1975 annual report for the British Columbia Forest Service.

Hon. Mrs. McCarthy presents a statement of receipts and

disbursements of the Capital Improvement District Commission for the

year ending March 31.

Hon. Mr. Waterland files answers to questions 23, 40 and 41. (See appendix.)

HON. MR. WILLIAMS: Mr. Speaker, yesterday in responding to a

question from the hon. Leader of the Opposition in connection with the

board of inquiry involving the College of Physicians and Surgeons, I

indicated that the hearing would commence May 3. I wish to correct

that; the hearings will commence May 10 and 11.

Orders of the day.

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

ESTIMATES: DEPARTMENT OF FINANCE

(continued)

On vote 6 1: minister's office — $78,246.

MR. D.D. STUPICH (Nanaimo): I suppose the Minister of Finance

is being consistent, at least, in not telling us anything at all before

he asks us to vote for something, and he's not really telling us

anything about the thrust....

HON. E.M. WOLFE (Minister of Finance): That's right.

MR. STUPICH: I'm not sure whether you were saying that's

right when the member down here suggested you were telling all you knew

by saying nothing. You were agreeing that that's right?

Well, Mr. Chairman, it would seem that the minister is trying to

prove that as time goes on. We would like to have some explanation from

him from time to time ask just what he has in mind, how he sees things

developing in the province.

For example, we've gone through a tough year economically, not just

for the province but for the whole country, for the whole western

world. Certainly B.C., along with the rest, has gone through a very

tough year. I take it from the estimates of revenue for this year that

the government is expecting some improvement in the economy, but I

would like to have the Minister of Finance tell us something about his

expectations.

I expect, for example, from the figures for forestry revenue that he

does expect an upturn in our largest of all industries. He does show

that he expects to take more money in from stumpage than the latest

revised figures for the fiscal period 1975-76. I think we'd like some

explanation from him as to just what he is basing this kind of

expectation on — not that we disagree, but we would like to hear

something from the Minister of Finance before we consider whether or

not we will vote for his salary — something from him as to just what he

used in basing some of his revenue forecast.

Royalties and stumpage are up. We expect the same thing from the

information that I did give earlier in a debate. I pointed out that the

number of housing starts in the United States are expected to be some

50 per cent higher than last year — a figure of 1.6 million, as a sort

of an average among the estimates that have been prepared. I wonder

whether the Minister of Finance, in projecting stumpage revenue of $80

million, has some other information that would enable him to come down

with a more definitive appraisal as to just what is going to happen in

logging. What does he expect this is going to do to the rest of the

economy?

Certainly, stumpage is obviously going to be up. If stumpage is up,

we would expect the forestry companies to be doing better; we would

expect an increase in logging tax revenue. We expect an increase in

logging corporation revenue and hence in corporation income tax, which

was not all that good last year.

Apart from the direct improvements in revenue, as a result of

increased expectations from forestry, there is, of course, the effect

this will have on the total community. In spite of the measures that

the government seems to have followed, to have adopted in an apparent

attempt...or at least the result will be to depress the economy.... It

would seem as though in this period of inflation along with high

unemployment they have chosen a route which can do nothing other than

decrease our possibilities of coming out of this economic slump.

What do they expect will be the indirect results of improvement in

logging — in revenue from logging industries? Personal income tax, for

example, for the whole community is bound to be up if our largest of

all industries increases. Of course, we have already moved the sales

tax rate increase, but what effect will this have on our total economy?

Does he really expect that there will be a 40 per cent increase on top

of what would be a normal increase this year simply by changing the

rate? Has he given any thought at all to what effect the increased

levies that the government has imposed will have on our total

[ Page

1119 ]

economy?

Surely in preparing the budget he must have given thought to all

these questions and should be able to tell us something about his

general opinion as to the direction the economy is moving and what he

expects this year — if not quarter by quarter, certainly as the year

moves along.

We all expect that the forest industry is going to improve. Of

course, the government in power will likely try to take unto itself the

credit for this improvement in the forest industry, just as last year

the then opposition party tried to blame us for the downturn in

forestry. They are now in a position, if it does improve, to take the

credit for it.

But I think the minister could perhaps give us something more

reasonable in the way of a presentation than was presented in the

budget speech itself, which was admittedly.... I think the minister

himself admitted that it was a straight political document when he....

Maybe this is a question we will come to later, Mr. Chairman: whether

it was he or someone else who authorized or instructed that a revised

edition be printed for circulation.

As I said, we know that B.C., along with many other governments, is

in the middle of a bad economic cycle — perhaps at the bottom of it.

Certainly anything I've read would indicate that we are not so much

approaching the bottom or just leaving the bottom; we are right at the

bottom now. Any change at all is bound to be a change for the better.

We have already indicated to the minister that he should have taken

this into account a little more in his planning, that he perhaps would

have been wise to have considered not so much the necessity to balance

a budget in a fiscal year, which is really quite an artificial period;

he might better have been looking at a period of a cycle, rather than

one simple year. What, in his opinion, is an economic cycle? Would it

be three years, five years, or would it be 10 years or some such figure?

These are the kinds of things that maybe he had in mind when he was

considering the budget, or at least some of the things to which he

should have been giving some thought.

Apart from the straight matter of finance, Mr. Chairman.... I don't

intend to speak long now. I'd like to get some kind of a general

statement from the minister. I would appreciate it very much if he

could or would respond at this time in a general way as to how he sees

the economic situation in the province.

But there is one other thing I think we really want to know early in

the debate of this vote: exactly what are the areas of responsibility

we should question this minister about?

For example, Hydro: would that come under the Minister of Finance or would

there be some other minister responsible for it? In former years the Premier

has had a tremendous load of responsibility, not just in the last three years

but in the last 23 years. Now I think we have to be clear in our minds as to

just exactly which minister is responsible for the various areas of responsibility

that were previously accepted by the Premier.

HON. MR. WOLFE: Mr. Chairman, in answer to the member's

question: I would ask for his indulgence in suggesting that questions

surrounding Hydro might properly be placed under the Premier's

estimates. Secondly, questions covering the B.C. Railway might properly

come up under Economic Development since the minister there is

responsible for the railway.

I would like to take this opportunity to table an answer to a

question which came up a few days ago under the debate on the social

services tax Act. I just forget which member raised the question, but

he wondered what impact the removal of building tax on materials would

have. I have the answer to that question here.

Interjection.

HON. MR. WOLFE: I am advised that I should not table it in committee. We will table this in the House at a later time.

The indication is that the amount of social service tax applied to

all building materials would, at 7 percent, be $85 million, and on

residential building materials only, $34 million.

I rather expected the member for Nanaimo might go into other matters

and go on a little longer than he did. He wanted to hear our attitude

about the general viewpoint of the economy and our expectations for the

coming year. I wouldn't say that those have changed to a great degree

with what you found in the budget speech on page 13. We look upon the

coming year with, you might say, cautious optimism, primarily accenting

the fact that we expect greater things from the second half of the year

than from the first half of the year.

A very important thing that affects logging and lumber, which you

have asked about, is, of course, housing starts in the United States,

It's highly important to this province — housing starts both in the

eastern side of the United States as well as the western side. Our

estimates covering next year's increased revenues are based on an

overall year's housing starts of 1.5 million in the United States.

Anything we've been able to determine since even budget day, in talking

to people knowledgeable in this field, still seems to bear out the fact

that this is neither a high nor a low figure; it seems to be a

reasonable expectation for the coming year in the United States. We all

know the importance this bears on our own estimates of revenue.

Secondly, an influencing factor is the anti-inflation

[ Page 1120 ]

programme in Canada, which we have mentioned in the

budget speech. One can wonder whether this would have an optimist

effect or a pessimistic effect on the expectations of revenue for the

year.

As you well know, the estimates on increased revenues without tax

increases for the coming year were based on 14 per cent overall

improvement. I realize there are some members who believe this is low,

but even at this stage I don't think I could say in my own opinion that

it is low. We have given this very constant review, prior to arriving

at these budget figures, to the extent that we were all persuaded — on

Treasury Board and within the cabinet — that this was quite a

reasonable figure. As you can imagine, there are many members in the

cabinet who would wish to estimate revenues higher, but they were

finally persuaded that this is not necessarily a reasonable expectation.

Mr. Member, you asked about logging tax, income tax and corporation

taxes. These are individually developed on the advice of federal

departments. You can imagine, and as you well know from your past

experience, these are cold, hard figures when you start talking about

income tax and corporation tax. After all, corporation taxes represent

previous year's income and represent what has gone by during a previous

period.

By and large, our expectations for the estimates of revenue for the

coming year — a question which you were asking — are based on the facts

of a reasonably cautious optimism, based on a definite pickup as the

year goes along, particularly in the second half.

MR. STUPICH: Mr. Chairman when the minister makes reference

to my past experience I perhaps should point out at this time that he's

had more experience in the office of the Minister of Finance than had I.

However, our concern is that he has not been anxious enough to try

to collect a larger share of his revenue demands, or even more dollars,

from, the resource industries. Certainly it was our conscious effort

during our time in office — that is, the previous administration's time

in office, not simply my time as Minister of Finance — to try to get a

larger share of our revenue from the exploitation of our resources and,

in particular, to attract more attention to the exploitation of our

depleting resources. Of course, part of that was the Mineral Royalties

Tax Act that has been criticized widely in B.C., and perhaps even

outside of B.C. to some extent. While it has been blamed for some of

the downturn in our economy in the province, I think, Mr. Chairman,

that you'll recognize that we were not properly blamed for that — that

it was international economics rather than what was happening in the

province of British Columbia that hit our mining.

If I could just comment from a publication — certainly not known to be an NDP

one — it's the Executive and it's from the October, 1975, issue. They

are quoting from a Bank of Commerce newsletter to the effect that the Canadian

Diamond Drillers Association in projecting their trends, and projecting them

years ahead.... I think that's one of our concerns, and we tried to bring

that out in the earlier debate, that instead of planning for one year ahead

or several months ahead, a maximum of one year ahead, we should be trying to

develop plans that are much further ahead.

But certainly the diamond drillers association are prepared to go

ahead and are projecting the trend that there will be no drilling in

Newfoundland by 1976; none in New Brunswick by 1980; none in Ontario,

Manitoba, Saskatchewan or British Columbia by 1982. Now at a time when

they had no reason to believe that the NDP would not remain in office,

they anticipated that drilling for ore in British Columbia would go on

even longer than they expected it would go on in Ontario; so they

weren't blaming the lack of drilling in B.C., or what was happening in

B.C., on the previous administration.

What about coal, for example, Mr. Chairman? Perhaps this isn't the

time to raise it if the minister has in mind doing something. But we

did increase the return for coal to the province quite substantially —

from $0.5 million up to in excess of $10 million, but we were still

bringing in just a little over 4 per cent of the value of that coal to

be returned to the people from the exploitation of this resource.

We've increased the sales tax on people. Does the minister have in

mind doing anything at all about getting a higher return to the people

of the province from the exploitation of this depleting resource?

What about copper? We can't really tell from the estimates of

revenue whether the government feels this is the time, now that copper

prices have started moving up. Through nothing that has happened here

in the province of British Columbia but rather something that has

happened in Africa, copper prices have started moving up. Does the

minister really believe that this is the time to abandon our policy of

getting for the people of the province a share of the revenue from the

exploitation of this resource? I would like him to comment on what he

thinks should be the direction. Should we be getting more money from

direct development, in particular depleting resources, or do they

intend to follow their campaign promises to back away from getting

money from the development of resources?

MR. G.R. LEA (Prince Rupert): Mr. Chairman, I would like some

help from the minister, because I've been trying to sort out in my mind

exactly what happened to the $181 million cheque that was written to

ICBC and then after that the $181 million loaned back by ICBC to

government. Try as I may, I

[ Page

1121 ]

can't find one dollar of money that changed hands.

I can just follow through as I see it and see if the minister can

correct me and tell me if I am correct, or maybe there is some other

explanation.

The government, as I understand it, wrote a cheque. Well, first of

all they brought in a bill, Bill 3, asking for the authorization for

the government to borrow $400 million. Mr. Chairman, $181 million of

that was said to be because ICBC needed the money. Then a cheque was

written to ICBC by the government for $181 million. After that the $181

million was loaned back to the government.

Now if I can just follow that cheque for a moment — a cheque written

to ICBC drawn on the account of the government, in the bank, I would

suppose. So ICBC gets the cheque. They take the cheque to the bank and

say: "Here's a $181 million cheque that we would like deposited to our

account in ICBC." Now at the time the government said they didn't have

any money in the bank, but they do have an overdraft situation if they

want it. So it's like having money in the bank. So there were two

ledger entries that happened in the bank as I see it — an overdraft of

$181 million in the bank on the government's part, so they say you have

$181 million less, or you have an overdraft of $181 million; then in

the ICBC account they say you have $181 million. Then ICBC lends the

money back to the government.

Then the government, it seems to me, would put the cheque in the

bank again. Then there would be the ledger entries again. They'd say:

"Well, the government doesn't have an overdraft at this point because

the $181 million is returned to the bank." So, in fact, ICBC at no

time, except maybe for one or two days, had $181 million in their bank

account. So actually they didn't get $181 million to lend back, because

there was an overdraft on the government's part that they were lending

back to the government. (Laughter.)

Now it just seems a little irregular. You know, maybe I just can't

get it straight but I wonder if the minister, when he gets up, would

explain where one dollar actually changed hands. All I can see are four

ledger entries at the bank, and what finally ends up is that the

government of British Columbia, the people of British Columbia, owe

ICBC $181 million, approximately $19 million or $20 million a year at

10 per cent interest, which could be termed by some people as a sneaky

subsidy of $20 million to ICBC a year. If they need a little more they

can say we'll pay a little on the principal that didn't exist. No money

existed! Two, four ledger entries are all that happened. No money

changed hands! No cash changed hands!

Now I would like the minister to explain. Maybe I have it all wrong,

Mr. Chairman, but it seems to me that that's what happened. If you

logically follow the sequence of the cheques, no money changed hands.

Now possibly the minister can set me straight. A lot of my constituents

are worried about it, because they seem to feel the same way as I do. I

talked to a lot of people in the province, Mr. Chairman, and there are

a lot of people convinced that no money actually changed hands.

They're saying — and I can't say that I agree with them — that maybe

it was a sham, that maybe $181 million of that Bill 3 wasn't needed

after all and that no money changed hands. Four ledger entries and the

province ends up getting a sneaky subsidy to ICBC, if they need it,

but, at very best making it look like the NDP government, the former

administration, put the province $181 million in the hole. Now it seems

just a bit strange. I'm a bit perplexed. Maybe the minister will answer

that one before we let him get his salary.

HON. MR. WOLFE: Mr. Chairman, I imagine I'll be getting my salary any moment now, so I will, with pleasure, try to answer that question.

I think the fact that the member raises the question demonstrates

the fact that lie is a candidate to have been on the previous board of

ICBC, because they went into this whole situation without seeming to be

able to appreciate the problem that was developing. I would ask him a

question in answer to this, as to whether he felt that the insurance

company was overdrawn by $26 million before the end of their fiscal

year in cash and if, in fact, they billed all their premiums for the

coming year at the beginning of the year and had 80 per cent of their

revenues in their pocket before the end of March, whether it wouldn't

be, in fact, a good investment for them to loan the government money at

10 per cent. Would you indicate to me whether you think that's a good

policy for the insurance corporation to follow, and therefore whether

you might have been eligible to sit on the insurance corporation board?

MR. LEA: I've accepted the fact that we lost the election,

but the Minister of Finance hasn't. Now what I'm asking him — and I

wasn't on the board of directors of ICBC — is to trace that $ 181

million and let this House and the people of British Columbia know

whether there was actually any money changed hands. I'm suggesting that

no money changed hands — none at all — except for the period of a few

days when there were four ledger entries in the bank.

Now I would like to know why the government owes ICBC $181 million

when no money changed hands. It's called "kiting." In other circles,

it's called "kiting."

HON. K.R. MAIR (Minister of Consumer Services): No, it's not!

MR. LEA: Oh, I'll tell you, that minister should know.

Now let me just ask again. Maybe the minister

[ Page 1122 ]

didn't understand me. I'd like to have him trace

for the House and for the people of British Columbia what actually

happened. I'd like him to take the cheque from the time it was written

to ICBC, what happened in the bank and what the ledger entries were,

because I can't see where any money changed hands.

All that happened is that the government now owes ICBC $181 million

when no money changed hands. I suggest, Mr. Chairman, that corporations

do that all the time to try....

Interjection.

MR. LEA: That's right. Do they ever!

I'd just like to know why that kind of corporate trickery was pulled

on the people of British Columbia. I want the minister, in detail, to

explain to me where that cheque went and what the ledger entries were

in the bank, because no money changed hands, I suggest. All that has

happened is that the province owes ICBC $181 million, which I assume

they're not all getting this year. They would only be getting the

interest on that and possibly some payment on the principal, so to

suggest that they needed that $181 million immediately doesn't make

sense.

HON. MR. WOLFE: I think it's very clear in questions

previously placed in the House, and answered, that the money did change

hands. The member is not correct in stating and assuming and alleging

that the money did not change hands. The cheque was issued to ICBC,

they wrote a cheque in return and received treasury bills to this

extent. That is very clear. I think you follow that.

MR. LEA: Oh, I followed that.

HON. MR. WOLFE: Yes, you do. It seems clear also that as the

year goes along with the insurance corporation its claims will exceed

its revenues and, in the course of several months passing, they will

need to retrieve some of these treasury bills. This is a fact of life

in the insurance business where all of the premiums are billed at the

initial stages and they have to refinance the money as they go along.

So a cheque did change hands, went through the bank, and was issued

back in exchange for treasury bills.

Interjections.

MR. LEA: I would like the minister to explore what I have put

forward: that actually four ledger entries took place in the bank but

really no money changed hands.

When the ICBC deposited their cheque, on their bank card they were

up $181 million. I can only assume by remarks made by the government

that there wasn't enough money in the bank in the government's account

to cover that cheque, so there was an overdraft situation. Then ICBC

loaned the money back. I would assume that they wrote a cheque back to

the government. What happened in the bank then? Two more ledger

entries. ICBC doesn't have the $181 million on their card any more, and

the overdraft is covered by the cheque from ICBC. No money changed

hands.

I would like the minister to go into detail and tell me exactly the

flow of that cash, over there and back, and actually whether ICBC ever

received the $181 million for more than a few days when the government

didn't have any money anyway. It doesn't make sense.

HON. MR. WOLFE: Mr. Chairman, I think it's very clear that

ICBC did receive a cheque, did deposit it, and did issue a cheque back

to the government. Now the alternative would have been, Mr. Member, for

the insurance company to loan the same amount of money to some New York

bank, which I don't think you would have recommended yourself. So the

simple fact that they loaned the money back to the government by

issuing a cheque is a simple way of recording the transaction in a

businesslike manner, and there is nothing untoward about it. It's a

simple fact that they loaned the money to the people of the province of

British Columbia.

MR. LEA: I would just like to get it straight that ICBC

didn't receive any money. They didn't use any of that money. There were

four ledger entries in the bank. That's all that happened. That's all

that happened, and I admit that they received a cheque, that they

deposited the cheque; then the cheque came back to the government and

the government deposited the cheque and the overdraft situation was

taken care of. But ICBC did not have the $181 million, Mr. Minister,

through you, Mr. Chairman. They just didn't have it. They didn't have

the use of that money. Why not just give them the equivalent of the

interest? Why go through all that jiggery-pokery?

I think, Mr. Chairman, what it was was to make Bill 3 look

justifiable. That's the only reason that it was done that way. They

could just as easily, Mr. Chairman, have written a cheque for $20

million a year, or the equivalent amount of what the interest on $181

million is going to be. I would like the minister to tell me whether,

in fact, that isn't true: that that could have been done just as easily

that way as opposed to going through all of that cheque writing back

and forth, and for ledger entries.

MR. G.F. GIBSON (North Vancouver – Capilano): Mr. Chairman, I'd like to pursue this a little bit from another direction. I well remember the day in this

[ Page 1123 ]

House — I'm pretty sure it was March 30 — when the

minister reported to us that the government had $25 million in the bank

that day. I think he said there were cheques outstanding of $245

million with another $14 million in payroll cheques to come through the

next day. The minister said that one of those cheques which was

outstanding was a $181 million ICBC cheque.

Now the particular question of internal departmental control that I

wish to raise is: who is charged with authorizing the issuance of

cheques? Did that person authorize the issuance of a cheque in the

amount of $181 million in full knowledge that there was not that kind

of cash in the bank at that time? Nor, if I may so, sir, within the

next little future — because we were coming to the end of the fiscal

year, and at that time the province had to be debt-free by law — was

there likely to be that kind of cash in the bank. Who in the department

has the authority to authorize the issuance of an NSF cheque? Who did

that specifically? That's the first question.

Interjection.

MR. GIBSON: Because the minister told us, Mr. Member. A

cheque is NSF when you issue a cheque and there's not enough money in

the bank to cover it. You know that perfectly well, Mr. Minister of

Education (Hon. Mr. McGeer), and if you handle your own finances in any

other way but that you're in bad shape.

AN HON. MEMBER: He should talk to the president of ICBC.

MR. GIBSON: Annual income 20 shillings, annual expenditure 19/6; result: happiness. Annual expenditure 20/6; result: misery.

MR. G.S. WALLACE (Oak Bay): Micawber.

AN HON. MEMBER: Speaking of whom?

MR. GIBSON: You! That side of the House, of all groups, Mr. Chairman, should understand that philosophy.

MR. WALLACE: Why are you Liberals fighting among yourselves?

MR. GIBSON: Here we have a case where, according to the

minister's own admission in this House, there were $245 million worth

of cheques outstanding on a day when we had $25 million cash in the

bank and 24 hours before the time when this province had to be

technically, completely debt-free. I say that's an NSF situation.

So back to my question before the ridiculous intervention by the

Minister of Education, who should know better, as to who authorized the

issuance of that NSF cheque. Question No. 1.

Question No. 2: As these moneys went back and forth....

AN HON. MEMBER: Washed.

MR. GIBSON: Washed back and forth, indeed, Mr.

Member...between the bank and the Government of the Province of British

Columbia and the Insurance Corporation of British Columbia, with the

exchange of instruments like treasury bills, were there financial

charges from the banks or from any fiscal agent that made this

transaction a charge on the people of British Columbia, other than the

strict bookkeeping entries? Were there transfer charges — and I assume

there were, Mr. Chairman, because there usually are when you're

shuffling cheques back and forth — paid to the bank or any other fiscal

agent? Just as an example, was there an NSF charge? There may not have

been on of those because you may have a friendly banker, I don't know,

but what were the financial charges in moving those funds back and

forth? I'll leave it with those two short questions right now, Mr.

Chairman.

MR. D.G. COCKE (New Westminster): Mr. Chairman, I didn't want to rise on the $181 million but I did notice some of my colleagues....

Interjection.

MR. COCKE: Well, the fact of the matter is, Mr. Chairman, that....

Interjection.

MR, COCKE: The Finance minister sits over there, mute as

usual, and he starts talking from his chair. He never stands up to the

microphones and answers the questions the way he is supposed to in this

House. Let me read to the Minister of Finance a

section from

an Act....

Interjection.

MR. COCKE: Mr. Chairman, this is the kind of answer that we

get from the Minister of Finance. A little while ago the member for

Nanaimo (Mr. Stupich) asked the question: who's going to answer for

Hydro in this House? He said: "The Premier will answer for Hydro." You

know what will happen two or three days from now when the Premier comes

back? The Premier won't answer for Hydro, and I'll tell you why. He'll

refer us to the British Columbia Hydro and Power Authority Act in this

province.

[ Page 1124 ]

He'll say: "Would you care to check

section 4 of

the B.C. Hydro and Power Authority Act?"

Section 4 says: "The authority

is for all its purposes an agent of Her Majesty the Queen in right of

the province, and its powers may be exercised only by and as an agent

of Her Majesty, the Minister of Finance as fiscal agent of the

authority."

MR. WALLACE: Good try, Evan.

MR. COCKE: Mr. Chairman, wouldn't that have been interesting

if we'd been caught in that bind? Some of us have been around long

enough to know that that's the kind of bind we've often been caught in,

over on this side of the House.

He won't answer for Hydro, Mr. Chairman, and I'm awfully sure that

his colleague, the Premier, or Prime Minister, or whatever he's calling

himself today, won't answer either, certainly if he's looking at the

law.

Now I'm going to sit down on this one because I'd like us to get

back to $181 million and I've got a number of other questions I'd like

to ask later. But I certainly didn't want to let that one slip by. Mr.

Chairman, who answers for Hydro in this House? That's the question.

HON. MR. WOLFE: Mr. Chairman, I'd like to answer that

question because there might have been some ambiguity earlier. You

should direct your questions on Hydro either to the Premier or to the

Minister of Transport and Communications (Hon. Mr. Davis) . This is

very natural. The Minister of Transport and Communications is on the

board and I am advised that previously the former minister of forestry,

who was a director of Hydro, took the questions on the estimates for

the Hydro. I am sure you are aware of that.

MR. G.V. LAUK (Vancouver Centre): There are some questions, I

am sure, that can be asked of the ministers who are on the board of

directors of Hydro, but by virtue of the fact that the Minister of

Finance is the fiscal agent for Hydro, he must answer the financial

questions with respect to Hydro. That's always been the case; there has

never been any departure from that.

But I have a question on the $181 million ICBC rubber cheque. Could

the minister or the government have guaranteed the account payable of

ICBC rather than issuing a cheque? If so, why wasn't that done?

Are you going to answer the question? Did you hear what I said?

I will repeat it again. Could the hon. minister have guaranteed the

accounts payable of ICBC without issuing a cheque from the government?

If so, why wasn't that done?

Let me answer the question for the minister. (Laughter.) It's always

sufficient to guarantee the accounts payable of Crown corporations, and

Crown corporations' accounts payable are always guaranteed. There's

absolutely no reason whatsoever why this government could not have done

so, but they didn't, because politically they had to have some excuse

to pay a subsidy to ICBC. The minister nods his head. They had to pay a

subsidy. They had to go through this cheque-cutting operation, pay the

interest on a loan back and then they say to the public: "Well, we

don't subsidize Crown corporations. We're just paying interest on a

loan from ICBC." It was just a shell game.

Now that's the answer I know the minister is about to give.

HON. MR. WOLFE: Mr. Chairman, I think the member was asking

whether in fact the government could guarantee the payables of the

insurance corporation. I believe that was the question. Well, the

payables of the insurance corporation, Mr. Member, are 90 per cent

represented in claims — thousands of claims. Now you suggest that the

insurance company, in a position to not pay those claims, simply asked

the government to guarantee them and that this would satisfy thousands

of claim-holders. I suggest to you that that wouldn't be proper. As we

covered in previous questions in this House and today, a cheque was

issued. It's a businesslike transaction. There's no rubber cheque or

fraudulent matter involved. The cheque went through the bank and was

returned in exchange for treasury bills.

MR. LAUK: Clearly, you're answering a question on behalf of all of the possible claimants and projected....

Interjection.

MR. LAUK: No, that $181 million does not represent the debt of ICBC, and you know it. You're projecting....

Interjection.

MR. LAUK: I didn't mention an amount. I said you're

projecting also in that $181 million projected possible — or even, if

you like, probable — claims against the insurance corporation. However,

it doesn't amount to that. It doesn't amount to $181 million. That's

just a bunch of nonsense. Get back to your human rights branch and

straighten it out.

Mr. Chairman, it's quite clear that this hoax — this smokescreen —

was put up to avoid breaking yet another promise that you made to the

electorate of this province. It's also quite clear that you did it to

avoid dealing responsibly with whatever debt the ICBC had, and

"responsibly" would be to avoid the

[ Page 1125 ]

tremendous increases in rates that were suffered by

every automobile user in this province. You did so because you were not

careful in thinking of the possibilities — you and the Minister of

Education (Hon. Mr. McGeer) and your colleagues. You were not careful

in the same way that you designed a budget that also has provided great

hardship to the people of this province. You did so without thinking of

the effects of such rate increases and tax increases on the people. You

did so not heeding the words of W.A.C. Bennett when he said that such

tax and rate increases were just excuses for lack of careful budgeting.

Now getting back to that rubber-cheque situation, you issued a

cheque to ICBC for $181 million. The Minister of Education, who got

that cheque, rushed over to the president of ICBC and spoke to him and

got his commitment that he would not cash the cheque, because it was

NSF.

You immediately then borrowed $181 million from the insurance

corporation. It was a shell game. You must admit it was a shell game.

You could have done the same thing by entering in our books an account

payable guarantee or some item that would have satisfied the budget

representation, but you didn't do it. You did it to create a hoax and

this is what we're after now. We want you to come clean. As I said

before, Mr. Minister of Finance, all the letters and calls that I've

received from all over this province say: "Get Evan to come clean."

That's what we're asking you to do.

HON. MR. WOLFE: Mr. Chairman, the reason we continue to hear

questions about a cheque to ICBC for $181 million is based on the fact

that the members opposite aren't happy with the government paying over

the deficit in the insurance corporation. Look at them, Mr. Chairman,

the architects of this deficit, sitting there in absolute piety, as

though their hands are clean of this whole mess, asking why we had to

pay the insurance company the amount of that loss last year — just

nothing but ridiculous.

Not only did they object to us paying that $181 million, but when we

had to have the borrowing authority, they delayed the passage of the

bill for some eight or 10 days, because it hurt them, didn't it? They

just didn't like us paying for this deficit which they created, Mr.

Chairman, and which the insurance company needed to start out from

scratch on a clean bill for the coming year. It's very clear why they

keep raising this point. They don't like us paying the insurance

corporation for their loss.

MR. GIBSON: Mr. Chairman, if I may speak to the minister's

recent remarks as someone who was certainly not an architect of the

ICBC's deficit and indeed a constant critic of it, the minister has

failed to answer two very clear questions I asked him.

No. 1, who in his department has the authority to authorize the

issuance of such a cheque — and that specific cheque in the amount of

$181 million — and did they do it in the knowledge that at that time

there was nothing like sufficient money in the bank to cover it? That

is question No. 1.

Question No. 2 is: what financial charges were made upon the Crown

and eventually on the people of British Columbia as these funds washed

back and forth between the banks and the government and the Insurance

Corporation of British Columbia, either in terms of bank charges or

payments to financial agents, or any other kind of charges?

Two very simple, specific questions.

HON. MR. WOLFE: Mr. Chairman, there are no charges for these

cheques that I'm aware of. I would like to ask the member whether he

would advocate that the Minister of Finance handle the funds of this

province on the basis that enough cash is left in the bank at all times

to cover outstanding cheques. To my mind, it would be a substantial

waste of funds to leave funds in the bank to cover all outstanding

cheques at all times.

MR. GIBSON: I'm glad to give him a little bit of advice, Mr.

Chairman. I would say that there should be enough money in the bank

every day to cover the cheques that come into the bank that day. That

much is very clear. A not unusual way of doing that is to arrange for a

sufficient line of credit so that if more cheques come in than you

expect, they're automatically covered by the bank. The fact of the

matter is that in this particular case we were nearing the end of the

fiscal year. We were a little more than 24 hours away, at which time no

line of credit with any bank was legally possible. That is why in this

particular situation we were in an NSF period, and I would like to know

who authorized that. Who authorized the issuance of that cheque?

MR. STUPICH: Mr. Chairman, I would like to pursue this

question of the cheque just briefly, but first I would ask for your

cooperation for a moment. I realize this isn't the time for it, but the

students weren't in the gallery until 3 o'clock. I would ask the House

to join me in welcoming a group from the Nanaimo Senior Secondary

School. I suggested to them that this might be the time for estimates

and it's a much more interesting period than normal debates. It's a

period of questions and answers, and I'm hoping that we'll get the kind

of answers that will make it interesting to them as they observe the

proceedings.

Now I'm going to ask the questions, and I'll give the minister an opportunity, Mr. Chairman, to answer them.

With respect to this cheque that seems to be attracting so much of our attention today — and

[ Page 1126 ]

simple answers, of course, would get us off that

and onto something else — I'd like to know what date the cheque for

$185 million, or whatever the precise amount was, was cleared through

the government's bank account and what day the ICBC cheque cleared

through ICBC's bank account. Now there are two very specific questions,

Mr. Chairman. I'd like the minister to answer those.

I'd like also to give him an opportunity to correct or rephrase

something he said about this money earlier in response to a question. I

think maybe he didn't mean to say what I heard, at least, when he said

that ICBC would probably need this money back, sometime during this

period. Now, Mr. Chairman, it concerns me that the minister is nodding

in agreement. I would remind him that last year, last fiscal period

ending February 29, 1976, ICBC was able to finance its operations

completely by borrowing only $28 million from the bank. That was enough

to keep it going until its premium revenues started coming in.

I would remind him that one of the ICBC directors — the actuary who

did the calculations — said that the premiums for the 1976-77 period

were set at a level higher than was required to meet the obligations of

ICBC during this fiscal period. On that basis, in that ICBC seemed to

have almost enough cash last year with the rates being very low and

that the premiums for this period that have already been collected or

that are going to be collected on the instalment plan are higher than

will be needed for what is expected to be the loss experienced this

year, it would seem to me that it is entirely unlikely that ICBC will

need any of that $181.5 million back prior to the time that premiums

will start to be collected, hopefully in January of 1977. Because we

think this year the government will not have the need to deliberate for

two months as to what it is going to do with respect to premium levels.

So the dates the cheques cleared the two accounts.... I'd like him

to comment again on the need — the unlikely need — for ICBC to have

that money back.

HON. MR. WOLFE: Mr. Chairman, the member just on his feet

must have missed an earlier question in the House which dealt with the

dates that these cheques were cleared. I am looking at the member for

North Vancouver – Capilano (Mr. Gibson) who asked this very question. Is that not so?

Interjection.

HON. MR. WOLFE: Yes, you asked the entire question. I gave the answer.

Interjection.

HON. MR. WOLFE: Just nod your head, Mr. Member.

MR. CHAIRMAN: Order, please!

HON. MR. WOLFE: You asked a specific question as to when the

two cheques were cleared. The answer to the question, Mr. Member, is

approximately April 8, maybe the 9th.

Interjection.

HON. MR. WOLFE: That's correct. Secondly, I answered that question some time ago in this House.

Mr. Chairman, there seems to be some doubt as to whether the

insurance corporation will, as the year goes along, require funds. I am

advised on their own forecasts that, come about mid fall to late fall,

they definitely are going to be in requirement of further cash based on

their own estimates. As you get into the last four, five, six months,

it is definitely forecast that they will require funds.

MR. LEA: Mr. Chairman, there is no doubt in my mind, and I

don't think any other member's mind, that there probably will be money

needed by ICBC. That is not the point in question.

But I'd like to put it into a different sort of circumstance if I can.

HON. MR. WOLFE: I'll bet you would.

MR. LEA: Let's take the government and call it the parent and

call the child ICBC — the subsidiary of the government. Let's relate it

to a family situation because I want the minister to understand. The

parent has two children, possibly. So the child comes to the parent and

says: "By the way, I am $ 10 short a year in my operating expenses. I

would like another $10." The government says: "Right" — or the parent

says: "Right. I want to give that $10 to you, son, but I want to do it

in a way that will let your brother think that you owe quite a bit of

money — more than you actually owe — because I want it to look like I

am helping you but I don't want to help him. So I want to make it look

kind of fun. So what I am going to do — I am going to write you a

cheque for $100. Now I don't have any money in the bank but I do have

an overdraft situation at the bank. They'll honour the cheque. What I

want you to do is take the $100 cheque to the bank and cash it. I don't

want you to spend any of the money. What I want you to do is loan back

to me the $100. Then I will give you 10 per cent. I will give you $10.

Interjection.

MR. LEA: With interest, of course — right. Thank

[ Page 1127 ]

you, Mr. Minister — right. We're going to compound

this all the way along the line. You see, the kid didn't actually get

any money. He didn't get the $100 to loan back.

HON. MR. MAIR: Is this a clean story, Graham?

MR. LEA: Oh, it's clean. If it weren't, I'm sure you wouldn't understand it. (Laughter.) I know you, Rafe.

Now so we get this ridiculous situation of the parent company giving

no money to the subsidiary, no money at all, no money coming back, but

the parent owing the child some money. But we don't want the brother to

know. But the brother finds out — the brother being the public in B.C.

It's absolutely ridiculous. As the member for Nanaimo found out, both

cheques cleared the bank on the same day — on the 8th. He's his own

grandpa. I mean, it's getting more ridiculous all the time. Why don't

they just admit they wanted to get some money to ICBC? They found a way

to do it but they didn't need $181 million that they said they needed

in Bill 3. They didn't need the money. If they did need it, why didn't

some money...?

The government said they had to borrow money; that's why they

brought in Bill 3. Now they have said they've borrowed $181 million of

that $400 million from ICBC, which they say they gave to ICBC. They

said they didn't have any money so they had to borrow some money. Then

they said: "Well, we'll write them an NSF cheque and when they loan us

back the nonexistent money, that's half of that Bill 3 taken care of."

It's just absolutely ridiculous. Unless the minister gets up in the

House and explains everything in detail....

AN HON. MEMBER: Bill 1-1/2.

MR. LEA: It's absolutely ridiculous. I think the minister

knows it; I think he knows it. He's an accountant, he's been around, he

runs his own business. He knows that it is ridiculous. Is he asking the

people of this province to swallow that cock-and-bull story? It is

absolutely ridiculous. The $181 million from Bill 3 wasn't needed. The

money didn't exist.

HON. MR. MAIR: Sure it was.

MR. LEA: The government borrowed back their own money they

didn't have! It's stupid! It's absolutely stupid! Let's hear the

answer, in detail. What happened?

Interjections.

MR. LAUK: The minister indicated that ICBC will need some

money by middle or late fall. Those estimates were indicated in this

House by the Minister of Education (Hon. Mr. McGeer) some time previous

in debate in this House. However, since that time, the Minister of

Education has announced that the accident rate upon which those

projections were based is declining from day to day. He also said that

in the House.

Now if we are to believe the Minister of Education is consistent....

Would anyone here believe that the Minister of Education would not be

consistent...

AN HON. MEMBER: Shall we raise our hands? (Laughter.)

MR. LAUK: ...the fact that he was once a Liberal

notwithstanding? (Laughter.) Let's put it this way: if the Minister of

Education is consistent, then the projections that the Minister of

Education talked about — the ICBC projections for the need for this

kind of money by October of this year — should have to be revised.

Those projections also did not amount to $181 million. They were based

on the claims as they were coming in, on a month-to-month basis, and

didn't amount to that much by any stretch of the imagination. So really

it's a rather specious argument for the minister to say: "Well, why are

you arguing that ICBC doesn't need the money?" The fact is that they

don't need $181 million. They just don't. They certainly don't need any

money until October, yet we went through the charade to justify Bill 3,

which was a total and complete political hoax. It should not have been

brought before this House. It was a sham and I think that we on the

opposition side of the House proved to the public of British Columbia

that it was a sham. All we want from the minister now is for him to

admit that an easier way could be found. You just guarantee, as we

guarantee automatically anyway, the debt of Crown corporations. That's

why the whole contingency liability nonsense was thought up in the

first place by someone in the past, Mr. Chairman: so we could eliminate

the direct provincial debt. I think that probably it has some merit —

not for the reasons it was first done — but why didn't we do that with

ICBC? I'll tell you why — political revenge act, Bill 3. It was a sham.

I think the hon. Attorney-General (Hon. Mr. Gardom) should ask the

registrar of companies and the chairman of the securities commission

and the deputy minister and six puny judges to investigate this

terrible situation. (Laughter.)

MR. STUPICH: Mr. Chairman, I don't know whether we're

finished ICBC or not. I'm not sure we're going to get any more answers.

We may get more questions.

On April 9, 1976, order-in-council 122 1, under the British Columbia Deficit Repayment Act, provided

[ Page 1128 ]

for the sale of treasury bills in the amount of

$250 million. I wonder whether this was sufficient to cover the bank

position as at March 31, 1976. Is that why this amount of $250 million

is in the order-in-council, or just exactly how did we arrive at this

amount?

HON. MR. WOLFE: Mr. Chairman, the amount indicated by the

member was just an outside amount that might be required, inside of

which we could borrow up to, of which we have borrowed now $181 million

in treasury notes. Incidentally, these are very flexible and can be

repaid at any time, on demand.

MR. STUPICH: My question, Mr. Chairman, was whether or not

this was sufficient to cover the bank position as at March 31, 1976.

Was that what you had in mind at the time you arrived at this figure —

enough to cover the bank position as at March 31, 1976?

MR. LEA: Mr. Chairman, I would like to ask the minister if

there was any money — cash on hand — in the British Columbia Petroleum

Corp. or any asset that could have been turned into cash readily

without leaving that corporation in dire straits? Was there

approximately $25 million that could have been transferred from the

British Columbia Petroleum Corp. Into general revenues in this province

prior to the end of the last fiscal year?

MR. GIBSON: Mr. Chairman, following up these questions about

cash status, I have a question that I just like to ask from time to

time: I wonder if the minister could tell me, just very roughly, what

British Columbia's cash position is today?

MR. LEA: Mr. Chairman, I asked the minister whether or not he

would tell me whether there was any cash in the British Columbia

Petroleum Corp. that could have been transferred to general revenue

prior to the end of the fiscal year 1975-76. I see he's not getting up

and I'd like to redirect that question to the former Attorney-General,

the member for Vancouver East (Mr. Macdonald), and see whether he could

answer that question.

AN HON. MEMBER: No. (Laughter.)

MR. A.B. MACDONALD (Vancouver East): Mr. Chairman, in answer

to the hon. member's question (laughter): BCPC always had a cash

reserve which was part of the assets of the province and would have

existed up to March 31. There could have been — and I would think it

would be at least $25 million — transferred from BCPC. Now I hope I've

answered your question and, if you have supplementaries, between the

two of us we will answer them. (Laughter.)

HON. MR. WOLFE: I appreciate the answer from the member for

Vancouver East (Mr. Macdonald) — the only member for Vancouver East —

and I am sure that he would want to point out, if he had more time to

do so, that we'd have had to pay interest on that transfer of funds.

MR. MACDONALD: Oh, yes. That's true. You should, in fairness to the corporation.

HON. MR. WOLFE: Yes, only fair.

MR. CHAIRMAN: Order, please.

MR. STUPICH: Mr. Chairman, I'm wondering whether there is

anyone to whom I could direct this question about the $250 million —

other than the Minister of Finance. Perhaps you could help me.

(Laughter.)

Really, the point of my question — and maybe this will help him

answer it — is that we went through a considerable debate that, as he

pointed out earlier, lasted some eight days — not a period during which

we delayed passage of the bill, Mr. Chairman, but a period during which

the Minister of Finance delayed passage by not answering questions, and

he seems to be following the same route here.

Now what I want to know is: was $250 million enough to cover the

bank overdraft at March 31, 1976? It took us several days to decide

that the government needed authority to borrow $400 million — that's

what Bill 3 was all about. Now does this order-in-council mean that

when they came right down to borrowing the money, they found out that

all they needed was $250 million out of that $400 million? That's what

I want to know, Mr. Chairman. Now to whom shall I address this

question? The former Attorney-General (Mr. Macdonald)?

HON. MR. WOLFE: Mr. Chairman, it was stated repeatedly during

the debate on Bill 3 that the authority under Bill 3 was to obtain

authority to borrow up to $400 million, which would have been the

anticipated book deficit of the Province of British Columbia for the

year ended March 31.

The warrant, or the order-in-council you referred to earlier, of

$250 million was an initial authority required under order-in-council,

which is required under Bill 3, to advance a loan against that, and

which was just the maximum amount required at that time.

MR. COCKE: Mr. Chairman, if the member for Nanaimo would like to pursue that, I would certainly yield to him.

MR. CHAIRMAN: The member for New Westminster defers to the member for Nanaimo.

[ Page 1129 ]

MR. STUPICH: Mr. Chairman, as I said earlier, we went through

a long debate in this House deciding whether or not it was proper for

the government to borrow $400 million to meet a deficit that they

attributed to the previous administration. The Premier said that he

commissioned Clarkson Gordon to come up with a report proving that we

needed $400 million, that we were going to be $400 million overdrawn by

March 31, 1976.

It would now appear from this order-in-council that instead of being

$400 million overdrawn on March 31, 1976, we were overdrawn an amount

within $250 million — something less than $250 million — because $250

million was going to be enough to cover the overdraft position at March

31, 1976.

Of that $250 million, $181.5 million — or $185 million — was

transferred to ICBC. So it would appear that something less than $65

million was enough to cover the rest of the deficit of the province

that included a lot of transfers to Crown corporations which we had not

anticipated transferring. So the deficit was much less than the

projected figure in the Clarkson Gordon report of $400 million — $150

million, at least, less, Mr. Chairman. Does the minister have any

comment on that?

MR. COCKE: Mr. Chairman, I'd be embarrassed, too, and I feel for the Minister of Finance.

Interjections.

MR. COCKE: No, no, I understand. I have a warm feeling for

him in my heart, because he recognizes he got sucked into a situation

where he had to justify all that campaign material that was spouted

across this province.

Let me just read for a second from the economic outlook, 1976,

published by friends of the Socreds, the Employers' Council of British

Columbia. And if they aren't friends of the Socreds, they ain't got no

friends.

What do they say on their very first page? Page 1: introduction

summary, the very first paragraph, and the first few words say as

follows: "The recession in the western industrialized world has now

passed its low point...." In the western industrialized world. We were

told by the Socreds that the only place there was a recession was in

British Columbia, and that recession was caused by the New Democratic

Party. And if it wasn't caused by the New Democratic Party, it was

caused by the New Democratic Party government. The Minister of Labour

(Hon. Mr. Williams) doesn't quite understand, but in any event.... You

know, they weren't your very best friends when you were a Liberal, but

now that you're a Socred, they accept you.

Mr. Chairman, they go on to say: with most countries either poised for or already

into recovery. The United States is clearly the leader; Japan, Canada, western

Europe, aided by the momentum of a U.S. recovery, are gearing up."

In view of that, and in view of any government and its fiscal

responsibility to the people, shouldn't they have been watching cash

flow very carefully so as not to hurt people? Yes, they should have.

And that's exactly what the NDP were doing. But what did the Socreds do

immediately they took power? They saw to it that cash flow was adjusted

in such a way as to not only hurt but to abuse the people in this

province worse than they have ever been abused in history.

Let me just give you a couple of historical points. Remember the

situation where the Minister of Finance was saying that they had to pay

their claims.

Interjection.

MR. COCKE: Yes, I should know that. But, Mr. Chairman, when I

was on that board we saw to it that the premiums got out so the people

could pay us so there could be a cash flow in that company.

What did you do? You delayed and you delayed; you couldn't make up

your minds. You sat around like a bunch of people who were completely

unused to doing business. What kind of a business government is this?

You were waiting and waiting so you could really put it to the people.

Mr. Chairman, it was either incompetence or abusing the people of this

province — creation of an illusion that wasn't really in the best

interests of anybody in this province.

Mr. Chairman, we're now paying $40 million a year in interest, according to the minister's own estimates. He's got it set aside.

Interjection.

MR. COCKE: Check your estimates, Mr. Member. You're not

likely to speak in the estimates, but in any event, why don't you just

check them for fun?

MR. WALLACE: Yes, vote 69.

MR. COCKE: That's right, and that's precisely what we're being asked to endorse today.

I just can't understand what's going on in that minister's mind. You

know, he was a very nice chap; he's always tried to get along. But then

he gets stuck with a political vendetta, and he has to be the guy

that's out in the forefront. I feel sorry for him because really he's a

nice fella. He really is; he's a real nice guy.

Mr. Chairman, I want to ask one more question of that nice guy. I'd

like the minister to stand up and give us an absolute undertaking that

the first

[ Page 1130 ]

minister.... I'm worried about getting hoarse

and.... Even some of my colleagues kind of agreed that Ray Williston

used to answer on Hydro.

I happen to have been sitting in the House when that member, when

that Minister of Lands, Forests, Water Resources, and practically

everything else under heaven, did not answer. He would point out, when

we got down to his estimates, that the fiscal agent was the Premier and

that we'd missed our chances. Now I don't want to be placed in that

position. If the Premier is going to answer the questions on Hydro —

great. Fine. Just as long as we know somebody's going to answer the

questions on Hydro.

Certainly, Mr. Chairman, as I read the Act, the Minister of Finance

is the fiscal agent —

section 4, verse 2. Would the minister just give

us, an undertaking? — a little more than a nod of the head; let's put

it in Hansard . Will the first minister answer questions on Hydro?

HON. MR. WOLFE: Mr. Chairman, I answered that question

earlier — I guess you were out of the House, Mr. Member. I indicated

with your cooperation that questions on Hydro would properly come up

either under the Premier's estimates and/or the Minister of Transport

and Communications.

MR. G. MUSSALLEM (Dewdney): Why don't you stay in the House — stick around and pay attention?

Interjections.

MR. CHAIRMAN: Order, please.

MR. LEA: One final question on ICBC and the $181 million. I

don't think there's any doubt in anybody's mind what really happened.

It was as I outlined earlier: no money changed hands. If that's the

case — that they said that ICBC needed $181 million, but ICBC didn't

get the $181 million because both cheques cleared on the same day —

they didn't get it. So if they needed it, what did they need it for

when they didn't get it? There has to be some answer to that, I would

think, other than political jiggery-pokery. It either means that they

didn't need it, or it was needed politically. If it was needed

politically, then we're back to Bill 3.

Mr. Chairman, either the Prime Minister, or the Premier, takes upon

himself to be the Minister of Finance himself, or he gives it to

someone who is strong or someone who is pliant, depending on the

personality of the Premier himself.

I would suggest to you that in this case, because of the lack of

answers that we've been getting in this House, he appointed someone who

is pliant so he can really, in fact, be the Minister of Finance himself.

That's exactly what is happening here. That is why we're not getting

any answers, because that minister is not even kept abreast of what is

happening within his own department.

I'd suggest to you, Mr. Chairman, that he's being bypassed. He was

bypassed, he admits, when there was an order given to change the budget

speech. He admits that. I suggest to you that he doesn't know the

answer to the questions that are being asked of him. He doesn't know

because he's being by-passed by civil servants; he's being bypassed by

his colleagues, and he doesn't know the answers.

I suggest to you, Mr. Chairman, that there are members in that

government back bench sitting there right now who know that when I tell

the story of the $181 million...especially a person who has a long

history in the credit unions in this province and knows how that thing

is done, the member for Boundary-Similkameen (Mr. Hewitt); a member who

sat in this House as a cabinet minister, the member for Skeena (Mr.

Shelford); a business person, the first member for Victoria (Mr.

Bawlf); Vancouver South (Mr. Rogers and Mr. Strongman ;

Burnaby-Willingdon (Mr. Veitch). They all know but they're not willing

to stand up and question it because the carrot is being held out of

cabinet posts after the session.

SOME HON. MEMBERS: Oh, oh!

MR. LEA: That's what they're doing. They know darned well

that there's political chicanery going on with that $181 million, but

they're not willing to stand up and take their place and talk about it,

but I'll guarantee you after the new cabinet posts are filled that

those who remain there will be on their feet once in a while. That's

how it works. Did you ever notice, Mr. Chairman, how when some votes

are taken, like the social services tax, that some members aren't even

in the House to be recorded?

MR. CHAIRMAN: Order, please.

MR. LEA: Like the member for Skeena (Mr. Sheford) — he

learned some tricks over the years. They can't hold your name up and

say you voted for it, Mr. Member.

MR. CHAIRMAN: Order, please.

MR. LEA: So I'm suggesting....

MR. CHAIRMAN: May I interrupt the member?

MR. LEA: Sure!

MR. CHAIRMAN: May I interrupt the member just long enough to

remind him that standing order 40 (3) says: "No member shall reflect

upon any vote

[ Page 1131 ]

of the House passed during the current session,

except for the purpose of moving that such vote be rescinded." So I ask

that the member refrain from reflecting on votes that have already

passed.

Interjections.

MR. LEA: It seems to me, Mr. Chairman, that we may as well

forget the $181 million and what happened to it, because the minister

is not going to answer.

HON. MR. WOLFE: Mr. Chairman, you must forgive them. They know not what they do. (Laughter.)

MR. WALLACE: Author!

HON. MR. WOLFE: This question has been answered over and over

and over again, but they don't like the answer. It hurts! The $181

million smarts a little, doesn't it, Mr Member?

MR. LEA: No.

HON. MR. WOLFE: Oh, yes. That's $181 million you created.

That's the whole reason they keep asking the question, because it

hurts. Deep down it hurts, that $181 million. So that's why they keep

asking the question. They know the money was paid to pick up the

deficit for last year. They know full well, and they just don't like it.

MR. LEA: One final question. If the money was needed, why didn't they get the money? They don't have the money.

HON. MR. MAIR: They did get it!

MR. LEA: They don't have it. They loaned it back to the government. So they didn't need it, right?

AN HON. MEMBER: They got it!

MR. LEA: They got it? They had it for how many hours on the same day?

HON. L.A. WILLIAMS (Minister of Labour): How do you pay your debts?

MR. LEA: "How do you pay your debts," the Minister of Labour

says. When you owe money you pay the person you owe and he keeps the

money. You know that's how you pay debts. I mean, you are a lawyer. You

may not do it that way, you know.

The fact of the matter is that the ICBC does not have the $181

million. If they needed it, why don't they have it? It's that simple.

Tell us why they don't have it.

Interjections.

MR. CHAIRMAN: Order, please.

MR. STUPICH: Mr. Chairman, I was hoping we could keep this on

a relatively high plane, at least for the first hour while the Nanaimo

students are here. It is, as I say, a period of questions and answers.

So I dissociate myself from these wild political.... (Laughter.)

Mr. Chairman, I would like to ask some questions. We have had some,

you know.... The member said we'd like to have some answers. Mr.

Chairman, we have an answer. We found out that one day after we

finished debating a bill that was supposed to prove to the people of

the province, and to the members in the Legislature who were asked to

vote for it, that the government needed $400 million to meet an

overdraft at the bank, one day after we finished debating that bill

they found out that all they needed was $250 million, and that included

the $181.5 million transferred to ICBC. There were other things in

there that weren't needed, but we found out that rather than $400

million, we had really been debating something within $250 million. I

appreciate.... I'm not reflecting on what the House did. I'm just

saying that perhaps we should move a motion to do that and start all

over again on the basis of this order-in-council.

However, Mr. Chairman, I would like to ask some questions and,

granted, some of these may have been answered. I am out of the House

sometimes. I'm not sure whether anyone has asked about the costs of the

Clarkson Gordon report. That question may have been asked. If it hasn't

been asked, I would like to ask the minister if he knows the cost of

that report.

I would like to ask him a little more about the report itself.

AN HON. MEMBER: The cost of the Clarkson Gordon report?

MR. STUPICH: The cost of the Clarkson Gordon report.

The minister, on an occasion somewhere or other — I think not in the

House but somewhere — did say that he received a copy of the report as

early as February 10. That is eight days before the report itself was

actually dated and 10 days before it was released. The minister said

that it was.... He described it, I believe, at that time as an

incomplete draft. The hon. member for North Vancouver – Capilano

(Mr. Gibson) on April 5 asked a question about the Clarkson, Gordon

report — asked: "Did he, or any other member of the government, receive

in whole or in part an advance draft of the

[ Page 1132 ]

Clarkson Gordon report before its final

submission?" Well, as I say, that question was answered. The minister

admitted receiving it on February 10.

But under further questioning about the fact that he apparently had

this report eight days before the final report was dated, the minister

did say, in a very specific.... "I would like to assure the House, Mr.

Chairman, with regard to the Clarkson Gordon report, that I received

the only copy of this report and that no change was made in any figure

supplied by this report."

Now my question, Mr. Chairman.... I think the wording there is very

precise: "No changes were made in any figures." What I'm wondering, Mr.

Chairman, is: were there any additional figures supplied in the eight

days between the initial incomplete draft — in other words, was it

incomplete with respect to some of the figures, was it incomplete with

respect to some of the wording, were words added or words subtracted?

There would be nothing wrong in this if the government was trying to

present its particular point of view, and assuming that it was not

imposing anything on Clarkson, Gordon that they were not prepared to

sign, there would be nothing wrong with that. But were there any

changes made — I don't think changes in figures supplied, but were

additional figures supplied that were incorporated in the report after

the initial draft was received? Were some figures deleted, or were

there changes in the prose itself that made the initial draft an

incomplete one?

HON. MR. WOLFE: The member asked the cost of the Clarkson

Gordon report. I indicated earlier, I think, that it was $50,000

including expenses. I recognize the continuous attempts to throw

disfavour on the report and the fact that it was influenced in some

way, and I can assure you this has not been the case. It's the report

of the Clarkson Gordon Co. and there have been no figures altered.

MR. STUPICH: Mr. Chairman, I note again that the minister is

very careful to say that there were no figures changed. Now that, Mr.

Chairman, with respect.... Lawyers always say with respect when what

they mean is no respect, and I leave it to the Minister to decide

whether or not I mean that in this case, because he keeps saying no

figures were changed. He's being very careful not to answer the

question as to whether additional figures were supplied after the first

draft was received, whether some figures were deleted, or whether the

prose of the report itself was changed.

I'm not trying to throw any disfavour on the Clarkson Gordon report

at all, Mr. Chairman. I may be trying to throw some on the government

itself, and I did say that there could be some changes made in this

report that would be entirely consistent with Clarkson Gordon still

putting their name to it, because they say in this report that all they

were asked to do and all they were doing was consolidating information

that the Minister of Finance had made available to them. That's what

they were asked to do and that's what they were doing.

It would be entirely within the scope of this description of the

report had the government said: "Some of the figures that were given to

you we want to withdraw. We want to add some additional figures. We

want to change some of the prose in your report." As I say, that could

well have been done in negotiation with Clarkson Gordon. Now I don't

know why the Minister has to be so precise in his wording if indeed

such changes were made.

Why not admit what changes were made and let it go at that rather

than coming back over and over and saying no figures were changed?

Because in saying that, Mr. Chairman, he leads us to suspect that many

other things were changed. We have to draw our own conclusions or use

our own imagination to determine just what changes were made when the

Minister insists on saying over and over no figures were changed.

Now is the Minister standing with that answer? Is that all he's going to say about changes in the Clarkson Gordon report?

MR. W.S. KING (Leader of the Opposition): Mr. Chairman, I'd

like to explore this matter of the $181 million cheque that was

directed to ICBC and the subsequent revelation that this amount had

been loaned back to the government one day after its receipt by ICBC.

I'm curious, Mr. Chairman. I have difficulty understanding finance

matters. It's not one of my long suits and I'm looking for some help

from the Minister of Finance in terms of understanding this kind of

procedure.

I wonder what the term of that loan is? I wonder if the Minister of

Finance could tell us how long the government has loaned this $181

million back from ICBC which was directed to ICBC from the government

in the first place. Is it a one-year term? Is it two, or is it three?

Because I'm interested in knowing what's going to happen with the

interest that accrues to ICBC presumably from that $181 million to the

government. As I calculated, it'll be somewhere in the order of $18

million if that loan is of a one-year tenure.

On the other hand, if the loan is for three years and it's not

reduced — the principal is not reduced — then similarly it would

multiply in that amount over those years that it's in effect. I'm

wondering why the government chose to put ICBC in such a financial

position that they could not only liquidate alleged debts that that

corporation had at the time, but appreciate interest on a loan to the

government to the tune of $18 million a year.

Now I can only conclude as a layman that that will

[ Page 1133 ]

be a surplus in the hands of ICBC. I'm wondering

whether or not the government has a master plan to use this interest

payment, in effect as a subsidy to ICBC, to generate a surplus which

might be used two or three years down the road for the purpose of

coming up with reduced automobile insurance rates — perhaps even

fortuitously on the eve of a new election.

AN HON. MEMBER: Oh, oh!

MR. KING: I wonder if that's the motivation, because it seems

difficult for me to conceive of this poor Crown corporation, which the

government claims was in dire straits from a financial point of view,

now in the happy position of sitting back and reaping $ 18 million a

year in interest rates from the government. For what purpose? For what

purpose? What is the tenure of that loan? What is the precise interest

rate? I understand it's 10 per cent. What is the anticipated use to

which that accrued interest will be put within the corporation?

HON. MR. WOLFE: Mr. Chairman, the member has asked the term

of the treasury notes. Those are drawn for a one-year term and they can

be liquidated on demand from either party in question. It's very

doubtful that any one of those treasury notes would be outstanding a

year from now. As I explained earlier, because of the surplus of cash

in the insurance corporation at the beginning of the year which will

decrease as the year goes along, they won't be in a loaning position or

an investing position come mid year or a little later. We are all aware

of this. Therefore it is also doubtful that the interest revenue to the

insurance corporation for the entire year from the loan to the Province

of British Columbia would be as much as $18 million.

I think it's an obligation of the insurance corporation to show good

financial prudence to put out its money as it's available. It has done

so with a loan to the Government of British Columbia as well as other

short-term investments. But they are definitely going to have to draw

down and demand these notes back as the year goes along. We anticipate

this. Therefore there won't be as much as 10 per cent of $181 million

accruing to them from this investment for the year. I would not

anticipate that.

MR. KING: Mr. Chairman, I assume, then, that the province's

finances are not in all that bad shape either if we are going to be

able to liquidate that loan within the period of one year.

HON. MR. WOLFE: We'll have to get another loan.

MR. KING: It's not a loan?

HON. MR. WOLFE: I said we'll have to get another loan.

MR. KING: Oh, you'll have to get another loan. Well, that's

quite interesting. I am to assume then, apparently, that a portion of

this debt will be liquidated over the course of one year so that we

might be looking at even half of that revenue in interest to ICBC over

the course of the one-year tenure. That's assuming the loan is not

renewed at the expiry of the one year. But we are still looking at

something perhaps in the order of $10 million to ICBC, which is a

pretty significant chunk of cash.

As I say, the indications were, on the basis of the government's

figures, that the $181 million loan completely liquidated any alleged

debt which ICBC had. So we are looking at a situation now where ICBC

will have a brand new source of revenue guaranteed from the government

which, in effect, in my view, is a subsidy for the current operating

year. I wonder if the government is anticipating reducing premiums

commensurate with that increased windfall of cash that ICBC has

received. I wonder if the minister can answer that question.

HON. MR. WOLFE: Mr. Chairman, I don't understand the member's

inference that there is a subsidy. This money which was in the hands of

the insurance corporation could have been loaned to anyone else.

MR. STUPICH: Mr. Chairman, with your permission, I will move on to a slightly different tack.

Interjections.

MR. STUPICH: I seem to have the minister's permission anyway.

I did raise this in an earlier debate, and I think the minister

registered a bit of surprise at the time, but perhaps he has had some

time to look into it in the meantime. The Clarkson Gordon report shows

the forecast of budgetary revenue to be $2.9 billion. The budget

figures — that is, the budget speech figures — show a figure in excess

of that, Mr. Chairman, of $2.918 billion, almost $2.919 billion. Now

can the minister tell us why the figures are different? I think perhaps

it's because they used figures that were a different month, but I would

like some confirmation of this.

HON. MR. WOLFE: Mr. Chairman, I think about the only

explanation I can give, without going into the detail of all the items,

would be that the one estimate was prepared perhaps two months later

than the other one.

MR. STUPICH: I did suggest, I think, when I spoke on this a couple of weeks ago, that likely that

[ Page 1134 ]

was it, that the Clarkson Gordon forecast was based

on December figures and the budget probably on January figures. Now the

minister has had plenty of time since then to see the

comptroller-general's figures for February, and even for March, and I

am wondering whether, in view of those figures, he would now be able to

revise the budgetary revenue for 1975-76. The total here is shown as

almost $2.92 billion, up almost $20 million from the forecast that was

prepared on the basis of information available a month previous. There

is now two months' additional information available and I wonder what

the revised figure is.

HON. MR. WOLFE: Mr. Chairman, I am not sure I understand the

question, but I believe the answer would be, if it's the question I

think it is, that we have indicated as a matter of policy that we will

be publishing quarterly reports as soon as we can get these established.

It would be, I think, even if I had the figure in front of me,

misleading to indicate at this stage what the position was in those

intervening two months until the final figures have been taken off.

MR. STUPICH: Mr. Chairman, we had no hesitation in

reporting.... Well, the previous administration, Mr. Barrett and

myself, reported in mid December as to what we felt the budgetary

revenue forecast would be on the basis of November information, and

that was $2.98 billion, the budgetary revenue. The government had no

hesitation in presenting the Clarkson Gordon report and the Premier

even introduced it as an investigation, as research into finance,

although Clarkson Gordon say it was nothing of the kind. Yet we had no

hesitation at all in saying: "Well, our forecast for revenue for the

period is $2.9 billion, down $80 million from the figure that we had a

month earlier. We had no hesitation in coming up with a budget speech

prepared probably on the basis of information available in February —

January information, that is — no hesitation in saying, well, the

forecasts for revenue are going to be higher.

It would look as though the economy or the government revenue is

going to be better than we anticipated when Clarkson Gordon were

supplied figures up to the end of November or December. Now the

minister seems to be reluctant to tell us whether in the light of the

experience of the last two months we can expect an even higher revenue.

During the course of the debate, I believe, on Bill 3, I pointed out

that the difference between the figures that Mr. Barrett and I

presented in December and the figures in the budget speech, the

difference in budgetary revenue of $80 million.... The gap had been

closed by $30 million in that one month and I asked whether or not the

minister would be able to tell us whether the gap was still closing.

Now I did that several weeks ago and I was hoping the minister would be

able to give us some indication. Certainly we don't want a precise

measure. We know that the figures for March cannot be complete for some

time yet, but there is the same kind of interim information available

now for February and for March as was available when the budget speech

was presented and as the Clarkson Gordon material was put together.

MR. COCKE: Mr. Chairman, in line with what the member for

Nanaimo (Mr. Stupich) is talking about, and just how invalid the

Clarkson Gordon report was as far as the government was concerned,

their direction, let me give you an idea of how this government was

operating.

We recall that the Clarkson Gordon report came out on February 20. Three days

after that report came out, what did the Minister of Health (Hon. Mr. McClelland)

say about his own particular area of activity? Let me quote from the Vancouver

Sun of February 23: "The Health minister, Bob McClelland, said today there

is no active proposal within the government to raise hospital or medicare rates."

No active proposal to raise hospital or medicare rates, Mr.

Chairman. That's flying in the face of the old Clarkson Gordon syndrome.

Mr. Chairman, this group really have done a great disservice to this

province. They have hit both ways. They created this artificial debt

and then they kicked the pants — as the Consumer Services minister

(Hon. Mr. Mair) would recommend....

Interjection.

MR. COCKE: I'm not going to say it as graphically as you did,

because you said it outside the House and you can get away with that

sort of thing. But you can't say those kinds of words in the House, Mr.

Chairman, and particularly with a chairman who is so very much opposed

to that kind of language. He, however, associates himself with you.

I also look today at the Victoria Times

and they talk about how a one-two punch could mean a 16 mill increase,

a 16 mill rise. This is the Minister of Finance who during an election

campaign fought recently was going around this province as a campaigner

suggesting to the municipalities: "What you need is the Socreds. We'll

look after you." Boy, how they've looked after them! They've hurt them

in health. They've hurt them in municipal affairs. They've hurt them in

education. Mr. Chairman, and with all of that, they're trying to

justify this no-answer position with respect to the kite work that was

going on with the $181 million, the work....

Interjection.

[ Page 1135 ]

MR. COCKE: Well, Mr. Chairman, have you heard any answers?

You're unbiased. You're sitting there in that chair totally unbiased.

We know that you were elected as a Social Crediter, but we know that

the minute you get into that chair, you become totally unbiased. He's

nodding his head. He's unbiased, and he's agreeing with me totally, Mr.

Chairman. I like a Chairman like that who will be unbiased and will let

his feelings be known by the way he nods his head.

HON. G.B. GARDOM (Attorney-General): He's biased if he agrees with you totally. (Laughter.)

MR. COCKE: Mr. Chairman, so much for the....

AN HON. MEMBER: You're attacking the Chair.

MR. CHAIRMAN: Order, please! We're on vote 61.

AN HON. MEMBER: The Liberals are trying to get rid of you, Harv! (Laughter.)

MR. COCKE: Mr. Chairman, I don't really think that we have to

make too many points with respect to the direction of this province,

but we certainly must say that as an opposition we have to do our very

best to see to it that the people in this province understand what this

government is all about. We have to let the people in this province

know that even the Health minister (Hon. Mr. McClelland) having a good

grip on his portfolio, surely, by February 23 and having met....

Mr. Leader of the Opposition (Mr. King), don't you dare tell me that

that Minister of Health hadn't been in cabinet meetings discussing the

draft of the Clarkson Gordon report well before the public knew about

that report. Despite that he was able to get up....

AN HON. MEMBER: The Liberals lot him into cabinet once in a while.

MR. COCKE: Yes, I was wondering how come he got there. I

guess they just didn't have enough sprinkling of Liberals to get

around, I would hate to be the Highways minister (Hon. Mr. Fraser)

right now, Mr. Leader of the Opposition. Ohhh, his record isn't very

good! He's been a Socred.

MR. CHAIRMAN: Vote 61, please.

MR. COCKE: Oh, Mr. Chairman, I must get back to vote 61. The

whole thing, I think, I am trying to prove here is that the Minister of

Health said that there had been absolutely no discussion as late as

February 23 around the question of increasing hospital rates to

individuals or, for that matter, increasing the rates to medicare

participants. What happened? There was a 150 per cent increase to

medicare participants because the Minister of Finance said: "Look we've

got to keep it going across the board. We've got to keep those revenues

rolling so that we can....

Interjection.

MR. COCKE: What? — 400 per cent, however. I beg your pardon —

400 per cent to those people who are ill, going to the hospital, the

acute-care

section of the hospital, and 700 per cent to those

chronically ill, even those in the constituency of Cariboo, Mr.

Minister of Highways. Watch your back! I'm not sure what these people

are trying to do to you.

Mr. Chairman, they have been all over the ball park. They won't

answer questions with respect to how come, why they need all this

money, and at the same time they are rapping it to every sector of our

society. Let the Minister of Finance get up and prove once again, as he

did in the good old days when he sat just over there — that was between

'69 and '72 when he was probably as straightforward a member as you

could ever find in this House. Mr. Chairman, he didn't fluke into that

cabinet surely. He has had sound experience with either the Liberals or

the Conservatives over the years. I suggest that he can answer a few

questions here that would be revealing to the people in B.C.

MR. GIBSON: Mr. Chairman, I'll just very briefly start out by

repeating the two outstanding questions I have on the floor that the

minister hasn't answered: who authorized the $181 million NSF cheque

for ICBC at a time when the money wasn't in the bank? Question 1.

Question 2: what is the approximate cash position of British

Columbia today? Because I think that Ministers of Finance traditionally

have known that; this minister ought to know if he hasn't answered the

question.

Just having recapped those questions — I'll keep repeating them

briefly until the minister does answer them — I would ask: what is his

intention with respect to the report on the cash management of the

Government of British Columbia as reported in the column of George

Froelich in the Vancouver Sun the other day and done by the B.C. Central Credit Union?

Mr. Froelich suggested that this was an excellent report, of such

excellence indeed that another government — the Government of

Massachusetts, I believe — had already been making inquiries of the

minister to ask if they could receive a copy. But again, according to

the columnist, the minister is sitting on that report, I would ask him

first of all if it is correct that this report exists — I assume it was

commissioned by the previous government; secondly,

[ Page 1136 ]

what it contains; thirdly, when he plans to release it.

MR. L. NICOLSON (Nelson-Creston): The same question that has been raised by the member for North Vancouver – Capilano

(Mr. Gibson) also brings another question to my mind: that is, about

the authority under which the $181 million cheque was signed.

We see that the cheque was dated on March 30, 1976. We also note

that the order-in-council which would apparently give some of the

authority for the writing of that cheque was passed by the executive

council on March 30.

But it was not passed by the Lieutenant-Governor, it was not

approved by the Lieutenant-Governor, did not become law until March 31.

Therefore the cheque was passed without approval of the

Lieutenant-Governor. It was written without approval.

I want to know, also, who authorized the signing of that cheque, or

the vouchering of that cheque, without approval of the

Lieutenant-Governor. It hadn't been up to Government House; it hadn't

been back. That's a law, and it's a law that should be kept. You know,

if a person is caught driving impaired, it's an automatic suspension,

lifting of licence. When government breaks the law, we don't even have

a clear admission that it was done and that it won't happen again.

AN HON. MEMBER: Was this a case of signing impaired?

MR. NICOLSON: Well, yes, it was sort of an impaired signing.

A very good suggestion, Mr. Member. I think that whoever was signing

impaired should maybe have their licence lifted or something for a

number of months.

AN HON. MEMBER: Hear, hear!

MR. NICOLSON: Really, seriously, you know, what laws are we

going to obey in this province? Who did it? Who authorized the signing

of that cheque?

HON. MR. WOLFE: Mr. Chairman, we've had repeated questions on

the ICBC, which I believe we've canvassed pretty well. Perhaps the

member didn't hear some of the earlier ones. But they obviously don't

like the answers to those questions, because they don't like the

government paying the insurance corporation for their deficit, period.

Yes, this is correct. As a matter of fact, the member for North

Vancouver – Capilano (Mr. Gibson) supported the payment for that

deficit, and I'm curious to know why he doesn't understand why we

wanted to pay them.

I'd like to answer his question — if he wouldn't mind just waiting a

moment. He raised a question regarding a study of cash management which

was in a newspaper column recently, and I'd just like to inform him

that this was presented to us, shortly after we took office, by the

credit union. It's a fantastically large document, about two feet deep,

of studies relating to the various matters of government — one of them

being, I understand, having to do with cash management.

Now we have been in discussion with the previous ministers involved

with ordering this study over the matter of a bill which they had been

presented with for $155,000. We received this report at the request of

the task force who prepared it, not at our request.

But, in the meantime, we have not read the report or given it study.

I've recently had a look at one volume of it — just as recently as last

week, Mr. Member. We're now dealing with the matter of looking at it,

and we're negotiating in an attempt to arrive at a proper conclusion to

the bill which is owing for this, because we really feel that it is

excessive, that there is no proper documentation on our files or

provided to us by the former ministers for having authorized the

purchase of this, or the amount authorized for it. So this has been our

reticence in approving it.

We have made, I might say, quite some improvements in attempts to

upgrade our cash-management system, and these are still going on.

MR. GIBSON: Mr. Chairman, I thank the minister for that

information. I would ask him again, though: will he undertake to make

that study public? Because irrespective of how the payment of the bill

is eventually arrived at, presumably this is an important study for

British Columbians to have to appreciate potential improvements in the

internal workings of the government, and I would ask him if he would

make that undertaking.

HON. MR. WOLFE: Mr. Chairman, until I have reviewed the

matters in report and know what they contain, and also members of my

department, I would hesitate to give that commitment, but I certainly

would at a later date.

MR. GIBSON: Just a follow-up. I wonder if the minister might

undertake to, say, have that done within a couple of months, make that

decision within a couple of months?

MRS. B.B. WALLACE (Cowichan-Malahat): Mr. Chairman, my

question deals with a slightly different aspect, and hopefully we can

get some more precise answers than we've been getting.

I note that vote 61, of course, is much larger than it was last

year, because we now have a separate Minister of Finance. It makes up a

fairly considerable

[ Page 1137 ]

portion of the total moneys for which the Minister

of Finance is responsible. I note, too, that the staff increase has

increased from one to four in vote 61. But I note, too, that in the

overall staffing of the Department of Finance there appears to be an

increase of some 47 bodies within the department.

AN HON. MEMBER: How many skeletons?

MRS. WALLACE: Yes, I'm just wondering how many skeletons are

in there. I'm wondering if there is an increased responsibility — you

know — just what has gone in to making up this quite sizable increase

in staffing in a department that, as far as I can see, has really not

gone into any increased or extended endeavours or included any

additional responsibility, nor any drastic increase in other funding

apart from these bodies.

I'm wondering whether we could have some explanation of why we have

so many additional people and just how they are going to be used.

HON. MR. WOLFE: That's a very good question, Madam Member. In

answer to it, if I just may summarize, there's an increase of 47

positions indicated in the department. Of course, as you know, the new

minister's office being separated from the other accounts for one

increase. General administration is an increase of six. Control and

audit is an increase of 23. The other major one is the Purchasing

Commission, which is an increase of 11 positions.

Most of these that I am now answering to were covered in

orders-in-council back in April, 1975, under the former government,

which saw fit to increase the staff at that time in the Finance

department. There would appear to be a need for increased coverage both

in the audit and control department, in the Purchasing Commission, and,

as I mentioned, in general administration, but these were, by and large

— 90 per cent — involved in orders-in-council passed last April by the

former government which were not included in last year's budget.

MS. K. SANFORD (Comox): Mr. Chairman, I would like to ask the

Minister of Finance who did authorize the change in the budget speech.

I still shudder at the blatant political nature of that speech, and

particularly do I shudder at the direct attack on other administrations

around the world. If he is not able to tell us who authorized it, I

wonder if he could let us know whether or not, at least, he did not

authorize it. I wonder if he could give us that information.

The other question that I have relates to the possibility of a surplus in this

year's budget. I recall that a couple of years ago when the Minister of

Finance (Mr. Barrett) was answering questions on the budget at that time, he

indicated to the House how the money would be spent — on what kinds of services

and where the money would go.

I know that the Minister of Consumer Services (Hon. Mr. Mair) had

indicated that he feels that the predictions made by this government

will be within $1,000 of the actual amount collected. I find that'a

rather incredible statement for the Minister of Consumer Services to

make, because it's obvious that a lot of things can happen that will

change the circumstances. Budgets do not always come within $ 1,000,

particularly when you're talking about a $ 3.6 billion budget.

We have seen various cuts in services such as the ambulance services

and cuts in funding for various programmes such as Women's Place at

Campbell River, for instance. We've also seen cuts in the Highways

budget itself. I'm wondering if the minister could indicate to us, if

there is a surplus this year, how the money might be allocated

throughout the various departments.

HON. MR. WOLFE: Mr. Chairman, I'm glad the member raised the

question which perennially comes up regarding the budget speech, and

the versions of it, and so on, because I believe this is entirely

magnified out of all proportion. I have last year's budget speech here,

and as I attempted to mention earlier, the discrepancies between it and

the published and distributed version are really substantial. There's

not a page in this where I can't point out financial, substantial

differences between what was said in the House and what was said in the

distributed version. I'd just like to quote two. For instance, in the

Minister of Finance's (Mr. Barrett'

s) speech of a year ago February,

there's an item not in the budget speech which was distributed: "I am

informed that we will be able to announce for the Ocean Falls company a

profit for this year. It's not going to be very much, but it's better

than a loss. We said that we would buy Ocean Falls and operate it et

cetera.

Now that was not in the distributed version of the budget speech.

Second item: "Bank profits last year are up 23 per cent in one year.

I think there's even an admonition against that in the Bible." This is

a favourite topic of the former Finance minister, as you all know, but

I could go through this document and on every page there's a

substantial matter referred to in the speech as spoken in the House

that is different completely from the distributed version of the budget

speech.

HON. MR. MAIR: On a point of order, Mr. Chairman, unless I'm

mistaken in what I heard when I was in my office picking up a file, the

member for Comox (Ms. Sanford) suggested that I said to the House to

the effect that I did not see our budget

[ Page 1138 ]

going over $1,000, or being out more than $1,000. I did not say that.

AN HON. MEMBER: Order!

HON. MR. MAIR: No, I think I'm on a legitimate point of

order, Mr. Chairman. If that statement was made about something I said,

I did not say it.

MS. SANFORD: Mr. Chairman, if I could just follow up on that,

I did not indicate that it had been stated in the House, Mr. Minister,

but it refers to an

article that I read in the press, and perhaps the

press misinterpreted what you had said. That could well be, but this is

something that I did read and pick up, and I could certainly provide

you with the copy of that if you so wish, Mr. Minister, and if you wish

to correct it.

To follow up, Mr. Chairman, the Minister of Finance indicated that

there were several discrepancies in the version of the budget speech as

presented in the House from that which was distributed throughout the

province and throughout the rest of the world. I think he misses the

point, which is that the original distributed version is the one that

has been altered. I assume that the government was so embarrassed when

they recognized what damage they had done in terms of attacking these

other governments in other countries that they reconsidered and halted

the printing, in effect, in order to make the changes.

We have two distinct versions that are printed and published. My

question to the minister is whether or not he is the one who authorized

the Queen's Printer to halt the printing and to make that change

deleting the references to the other nations.

MR. COCKE: Mr. Chairman, there's no question that the

Minister of Finance has difficulty, but it's early in his trip in this

particular area, and I certainly feel somewhat sorry for him. But every

time I think of how sorry I should feel for him, then I'm admonishing

myself sort of unconsciously, because I sat here and I listened to that

Minister of Finance on budget day read a speech that I found pretty

darned hard to take — so much so, of course, he found it hard to take.

You know, he dances around. He uses Hansard , and then the

budget speech.... How many of those things were printed? You printed

some and then you got embarrassed; then you stopped printing them and

you started printing others. Mr. Chairman, I despair. I really do. All

the time he was reading that budget speech what was he doing? He was

saying: "We want everyone to be full of restraint" — full of restraint,

representing a government that hasn't shown one inkling of restraint,

raising prices, raising this, raising that. And the Minister of

Transport (Hon. Mr. Davis), I guess, is away creating those new ferry

rates right now.

Mr. Chairman, there is no restraint from their standpoint. They want

the people to restrain themselves, but they're not prepared to restrain

the government in this province.

I can give you a little bit of the philosophy of that. That same

minister wasn't in the House when I suggested before that he and I had

a chat prior to mid April, 1975. At that time he wasn't suggesting

restraint, Mr. Chairman; at that time he was telling us on behalf of

his own company.... We had other admonitions from the Automotive

Retailers' Association, telling us what the ICBC should be paying body

shops.

Interjection.

MR. COCKE: Why don't you go back to Hawaii and rest for a

while? Mr. Chairman, the member for Coquitlam (Mr. Kerster) rides his

white charger into this House. He doesn't stand up and speak into his

microphone and talk about the Finance department; he sits back in his

chair and admonishes me to be careful.

Let me suggest that the required rate by the Automotive Retailers'

Associat