1983 Legislative Session: 1st Session, 33rd Parliament

Hansard

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

( Hansard )

WEDNESDAY, OCTOBER 19, 1983

Afternoon Sitting

[ Page

2837 ]

CONTENTS

Routine Proceedings

Partnership Amendment Act, 1983 (Bill 34). Hon. Mr. Hewitt.

Introduction and first reading –– 2837

Oral Questions.

Beautiful British Columbia magazine. Mr. Cocke –– 2837

Motor vehicle testing stations. Mr. Lea –– 2837

Mortgage foreclosures. Mr. Blencoe –– 2838

Rent increases. Hon. Mr. Hewitt replies –– 2838

Committee of Supply: Ministry of Industry and Small Business Development estimates.

(Hon. Mr. Phillips)

On vote 53 –– 2840

Mr. Lockstead

Mr. Skelly

Mr. Davis

Mr. Howard

On vote 55 –– 2845

Mr. D'Arcy

Mr. Howard

Committee of Supply: Ministry of Consumer and Corporate Affairs estimates. (Hon.

Mr. Hewitt)

On vote 19 –– 2847

Hon. Mr. Hewitt

Mr. D'Arcy

Mr. Lauk

WEDNESDAY, OCTOBER 19, 1983

The House met at 2:03 p.m.

Prayers.

HON. MRS. McCARTHY: Mr. Speaker, I am very pleased to inform

the House that today we have visitors in the gallery originally from

Britain but now making their home in Ottawa: Patricia and Richard

Baker. Mr. Baker is the Deputy High Commissioner for Britain in Ottawa.

I would ask the House please to give them a very warm welcome for their

first visit to British Columbia.

MS. BROWN: Mr. Speaker, Dr. Gene Usdin, the Royal College of

Physicians and Surgeons McLaughlin-Gallie Visiting Professor from

Louisiana State University, is here, accompanied by his wife Cecile. I

would like the House to join me in bidding them welcome.

MR. CAMPBELL: Mr. Speaker, in the gallery today is a man from

Okanagan North. He was born in Okanagan North. His father was one of

the original settlers in Burton. Mount Marshall was named after his

father. Mr. Clark Marshall is in the gallery today, and I'd like to

give him a welcome.

Introduction of Bills

PARTNERSHIP AMENDMENT ACT, 1983

Hon. Mr. Hewitt presented a message from His Honour the Lieutenant-Governor:

a bill intituled Partnership Amendment Act, 1983.

Bill 34 introduced, read a first time unanimously on a division, and

ordered to be placed on orders of the day for second reading at the

next sitting of the House after today.

Oral Questions

BEAUTIFUL BRITISH COLUMBIA MAGAZINE

MR. COCKE: Mr. Speaker, just as an introduction to question

period, look at the decimated cabinet benches and this is supposed to

be question period!

SOME HON. MEMBERS: Order!

MR. COCKE: Don't give me that "order" stuff. That's disorder.

Mr. Speaker, I would like to ask the Attorney-General a question. Has the Attorney-General reviewed the agreement for sale of Beautiful British Columbia

magazine to the Jim Pattison group, prepared by his ministry, to see

whether there is a provision in that agreement that the province

covenants and agrees to exert its best efforts to cause B.C. Hydro to

mail subscription notices at no cost to the Pattison group for a period

of two years?

HON. MR. SMITH: He has not.

MR. COCKE: Mr. Speaker, I direct the Attorney-General to the Minister

of Tourism's (Hon. Mr. Richmond'

s) denials yesterday of government involvement

with B.C. Hydro. I'd ask the minister if he took any cognizance of the denials

of the Minister of Tourism yesterday, and under those circumstances would he

peruse the document? Has he decided to?

HON. MR. SMITH: I don't answer in the Legislature for other

ministers, nor do I peruse their answers to questions and respond later

when new questions come to me, but I will take your question under

advisement and consider it. But I have not decided at present to do as

you request me to do.

[2:15]

MR. COCKE: Just one other question: in view of the failure of

the Minister of Tourism to make this important agreement public — and

you have a copy — has the Attorney-General decided to table the

agreement himself?

HON. MR. SMITH: No.

MOTOR VEHICLE TESTING STATIONS

MR. LEA: A question to the Minister of Transportation and

Highways. The minister has stated that there have been a number of

reports done, within a number of different agencies of government. that

have looked at the possible effects of taking the motor vehicle testing

stations out of service. Has the minister decided to have government,

through him, make these reports and studies available to the

Legislature and to the public?

HON. A. FRASER: I would think that we could discuss that in my estimates.

Interjections.

MR. LEA: Yes, he's right, but the question I'm asking right

now is has the minister decided to make those reports available to the

Legislature within some time-frame — say, three days?

MS. SANFORD: Prior to the estimates.

MR. LEA: Yes. Has the minister decided to make those reports available to the Legislature and the public prior to the estimates?

HON. A. FRASER: Well, Mr. Speaker, I'll have to answer the member by asking him a question: which reports do you want?

MR. LEA: A question to the Minister of Consumer and Corporate

Affairs in his responsibility for ICBC. ICBC staff have worked up a

report looking into the possible effects of closing the motor vehicle

testing stations in the province. As I understand it, one report done

by the staff indicates that we will be in for more fatalities, more

injuries and more traffic accidents because of the action. Has the

minister decided to make all of the reports done by ICBC staff in

relation to the effects of closing the motor vehicle testing branches

available to the Legislature and the public prior to his estimates?

HON. MR. HEWITT: Mr. Speaker, I am not aware of any official

report being done by staff concerning the motor vehicle testing branch

and its closures. However, I will take the member's question on notice

and confer with the staff of ICBC to see whether or not they were

opinions, and express

[ Page 2838 ]

what we might do as ICBC to help ensure that there are fewer fatalities on the roads in British Columbia.

MR. LEA: Mr. Speaker, another question to the minister. I am

not asking for official reports, because an official report will

probably be one requested by government. As I understand it, the

reports were initiated by staff in ICBC and forwarded to the

government, and are on the desk of the Deputy Attorney-General and the

desk of the Deputy Minister of Consumer and Corporate Affairs. The

reports that I'm talking about, the ones initiated by staff and now in

the desks of government — has the minister decided to make those

reports available to the Legislature and the public prior to his

estimates?

HON. MR. HEWITT: Mr. Speaker, if there are such reports, I

assume they are staff reports giving comment with regard to what ICBC's

role might be in the future. I am not aware of the report, so I cannot

comment to the member. But as the minister responsible I would

certainly be interested in the comments of the staff members of ICBC. I

will go back to them and ensure that I obtain a copy of the report for

my information.

MR. LEA: To the Attorney-General, Mr. Speaker. It's my

understanding that the ICBC report that was initiated and carried out

by staff is on a desk of a deputy minister of the Attorney-General's

ministry. Will the minister give this House an undertaking that he will

seek out those reports, if he hasn't seen them already, and make them

available to the Legislature and the public of this province prior to

the estimates of the Minister of Consumer and Corporate Affairs. coming

to this House?

HON. MR. SMITH: In the event that there is such a report, or

some likeness of such a report, sitting on some desk, then the

probability is that that report, if it is sitting on some such desk,

would arrive on the desk of a minister and eventually be made public or

be laid before the Legislature in due course in the fullness of time.

MR. LEA: Mr. Speaker, the Minister of Consumer and Corporate

Affairs has already said there is no official report, which means they

didn't have any preliminary work done before they brought the

legislation into the House to do away with the testing stations. But

the responsible staff of different agencies have done it without the

government asking them. The Attorney-General says: "Some desk,

somewhere." I'll narrow it down. Would the minister give us an

undertaking to look on the desk of Mr. Bourne and then bring in the

report that I know is there? If the minister finds the ICBC report on

this topic on Mr. Bourne's desk, will he bring it to the Legislature

and make it public, prior to the estimates of the Minister of Consumer

and Corporate Affairs?

MR. SPEAKER: There is some hypothetical aspect to the question, hon. member, but the Attorney-General may wish to reply.

HON. MR. SMITH: Mr. Speaker, I will actively pursue the invitation contained somewhere in that hypothetical question.

MR. LEA: My last question. Why wouldn't the government be

bending over backwards to make these reports available to the

Legislature and the public? Why would they be taking this evasive

action? Why wouldn't they be only too glad to go back to their

ministries and bring these reports out? Or have they already seen the

reports and they don't like the results, because they show their

legislation to be a sham?

MORTGAGE FORECLOSURES

MR. BLENCOE: Mr. Speaker, I have a question for the Minister

of Consumer and Corporate Affairs — my favourite minister in this

House. British Columbia homeowners are still threatened with mortgage

foreclosures at an alarming rate. In Vancouver, for example, mortgage

foreclosures have increased 28 percent over the same period last year.

Has the minister decided to communicate with his federal counterpart to

press for changes to the Interest Act to ensure that any mortgage could

be opened upon the payment of no more than three months' interest in

penalties?

HON. MR. HEWITT: Mr. Speaker, to my favourite opposition

member who always asks me questions, I have had meetings with my

counterparts from other provinces and the federal Minister of Consumer

and Corporate Affairs. One of the items that we did discuss during our

meeting was the standardization and the full disclosure within mortgage

documents of all the terms of the contract. We also talked about

modernizing some of the legalese, if you will, that is in mortgage

documents. I hope that in the fullness of time and after the analysis

of the discussion we have had at our meeting, we may see some changes

contract. When that happens I would certainly be pleased to let the

member know.

MR. BLENCOE: I am glad to hear the minister has decided to

take some action with the federal.... Has the minister decided to

instruct his own staff to make full, detailed reports on the situation

for recommendations to this House for a course of action?

HON. MR. HEWITT: No, Mr. Speaker. Any determination with

regard to changes in legislation and policy certainly would be

discussed with and agreed to by cabinet and by the government in any

presentation. Amendments to legislation, of course, then would come to

the House.

RENT INCREASES

HON. MR. HEWITT: If I may, I'd like to have this opportunity

to respond to the member on questions I took as notice yesterday. The

second member for Victoria was concerned about increases in rents. He

raised three items of concern. One was 115 Haro Street, and he had

suggested a rent increase of 112 percent. I can advise the member that

the rentalsman has no file for this address, and no application has

been received for rent review, which is in place, Mr. Speaker, and

available to the tenant.

With regard to another address advising that there was a 60 percent

increase, I can advise the member that the party involved did apply for

review, and evidence has been given. The matter has not been resolved

yet, no decision being made. However, in preliminary investigation, I

can tell him that two other suites in the same building had increases

of 44

[ Page

2839 ]

and 50 percent. They had also applied for rent

review, and these cases have been completed. And under the rent review

and the rentalsman's office, these increases were allowed. Both were

one-bedroom suites in the west end of Vancouver renting, under rent

controls, for $205 and $206 per month. The statistical figures for the

surrounding area showed an average rent for a comparable unit to be

$418 a month. There has been a suggestion that the building was not

being properly maintained. However, a complete on-site inspection was

made and that was found to be incorrect.

Finally, Mr. Speaker, the last property the second member for

Victoria advised us of had a 48 percent increase. The rentalsman's

office shows no application for any suite showing that 48 percent.

However, they did have one at 38 percent that requested review. The

rentalsman's office now advises that they believe that the tenant has

abandoned his request for review.

MR. MACDONALD: Mr. Speaker, I ask leave that the rules of the

House be suspended so that I can make a motion relating to the Leader

of the Opposition.

MR. SPEAKER: Order, please. Hon. members, the Chair cannot

entertain the motion at this time. As has been ruled on previous

occasions, this is not the time for the motion to be made. The only way

such.... One method at the disposal of the hon. member would be to make

an arrangement with the government House Leader or acting government

House Leader. This has been the ruling of the Chair, and it is not a

matter for debate. At only one time can a member gain the floor, and

this is not that period. The Chair so rules.

[2:30]

MR. HOWARD: In the past, you personally, Your Honour, have

taken just the opposite view with respect to a request that I made

similarly asking leave. I think you cannot have it both ways. I

challenge your ruling.

MR. SPEAKER: While the division is taking place, I will try to ascertain the specific reference for the benefit of the House.

Mr. Speaker's ruling sustained on the following division:

YEAS –– 26

McCarthy

Nielsen

Smith

Bennett

Phillips

A. Fraser

Davis

Kempf

Brummet

McClelland

Heinrich

Hewitt

Richmond

Ritchie

Michael

Pelton

Johnston

R. Fraser

Campbell

Strachan

Veitch

Segarty

Ree

Parks

Reid

Reynolds

NAYS — 21

Macdonald

Howard

Cocke

Dailly

Stupich

Lea

Lauk

Nicolson

Sanford

Gabelmann

Skelly

D'Arcy

Brown

Hanson

Lockstead

Barnes

Wallace

Mitchell

Passarell

Rose

Blencoe

Division ordered to be recorded in the Journals of the House.

MR. SPEAKER: The reference that the Chair wishes to give to members is our own Journals . April 29, 1982, page 64, which clearly outlines the decision and the precedents of the House.

MR. HOWARD: I wonder if Your Honour would also have entered into the Journals

a decision that you yourself made on Monday, September 26, 1983, in

which you said substantially the same thing about the prerogative of

the House Leader, but you took the specific course of asking the House

whether leave would be granted. You denied the second member for

Vancouver East (Mr. Macdonald) that same opportunity. That I consider

perhaps to be the subject of another motion with respect to Mr. Speaker.

MR. SPEAKER: Whatever.

MR. NICOLSON: Mr. Speaker, I think before we look at previous

rulings of the House, we should look at the standing orders of the

House. Standing order 49 says: "A motion may be made by unanimous

consent of the House without previous notice having been given under

standing order 48." Standing order 48 requires two days' notice to be

given on a motion for leave to present a bill, resolution — which this

was — or address or for appointment of a committee, etc. We need not

look beyond the little red book to find out how this House must be

guided.

MR. SPEAKER: Hon. members, to briefly answer the point raised

by the member for Nelson-Creston, clearly that point would have to be

raised at the appropriate time in our debates. It cannot be raised at

this particular moment.

MR. NICOLSON: Mr. Speaker. I would ask when the appropriate time is.

MR. SPEAKER: Hon. members, again, so that, hopefully, we may

resolve this matter, I will read from the decision that I referred

members to earlier. That would be on page 66, and was the third point

of the ruling made by Mr. Speaker at that time. "Standing order 49,

which reads, 'A motion may be made by unanimous consent of the House

without previous notice having been given under standing order 48,'

contemplates motions of a substantive nature and should only be invoked

when the House is then engaged in the business of 'motions and

adjourned debates on motions' as designated on the order paper under

standing order 25."

MR. NICOLSON: On a point of order, Mr. Speaker, might I ask

how one gets the floor to ask leave to make introductions in the House,

and what is more important?

MR. SPEAKER: Hon. members, the Chair cannot instruct members.

Members here have a knowledge of the rules of the House. A member

should be aware of the proceedings of the House and know that this is

not the time for that motion to be entertained.

Orders of the Day

The House in Committee of Supply: Mr. Strachan in the chair.

[ Page 2840 ]

ESTIMATES: MINISTRY OF INDUSTRY

AND SMALL BUSINESS DEVELOPMENT

(continued)

On vote 53: ministry operations, $68,112,503.

MR. LOCKSTEAD: The Minister of Industry and Small Business

Development is the minister responsible to this House for Ocean Falls.

I don't want to belabour this question. During debate of a bill that

passed through this House not too long ago, I think the minister

basically answered all the questions that I had, and not much has

changed, which leads me to a couple of question I have. At that time,

Mr. Chairman, the minister, I believe, told me that if no permanent

sale or transaction had been completed by the end of this month, all of

the assets of that community would accrue to the Crown, the province of

British Columbia. I wonder if the minister could now just bring me up

to date very briefly on that situation. I'd appreciate it.

HON. MR. PHILLIPS: In answer to the member's question, I anticipate that we will be closing Ocean Falls down at the end of the month.

MR. LOCKSTEAD: I understand that there is a small sawmill

operation now operating in Ocean Falls, and I don't suppose that by the

fact the Crown owns the assets rather than the corporation that that

business would be in jeopardy. I wonder if the minister could tell this

House if there are any further negotiations going on with anybody in

British Columbia, or anywhere else, at the present time with regard to

that sawmill operation, future sawmill operations or other operations

for that community.

HON. MR. PHILLIPS: There are still negotiations going on, but

none sufficiently close to becoming a reality to warrant keeping it

open at this time.

MR. LOCKSTEAD: I wonder if the minister could then tell me if

he has had any negotiations with a company called Canarctic — that's

all I have here; I believe its president is a Mr. Rollie Back.

[2:45]

HON. MR. PHILLIPS: Not that I can recall offhand, but I'd be quite happy to check with Mr. Williston to see if he has, and get back to the member.

MR. SKELLY: My question relates to a brief that was submitted

to the Minister of Labour (Hon. Mr. McClelland) and to the Minister of

Industry and Small Business Development by Local 6613 of the United

Steelworkers of America. It relates to the closure of Gearmatic Co. In

Surrey by Paccar Inc. from the United States. Maybe I should read

through three points in the brief — I'll do it very briefly — and ask

the minister what has been done to try to keep the jobs involved in

Gearmatic Co. In the country. I'll outline in brief detail some of the

manufacturing that the company does.

This company is presently manufacturing six mechanical winches and

15 hydraulic winches. All of these winches have been designed,

researched and produced in Canada. Their basic application is for

logging, fishing, the oil industry and other varied operations

throughout Canada, the United States and international markets.

Until the current recession came upon us in 1982, they manufactured

650 winches per month. At its peak the workforce at Gearmatic Co. was

approximately 300 people. On page 3 of the brief it says:

"Secondary industry and vendors that this company deals

with across Canada and in British Columbia have been put into jeopardy because

of this move."

That is, the move to close Gearmatic's manufacturing operations in Surrey.

"At present this company deals with over 291 Canadian

vendors. The impact of the closure of this company will drastically

affect a large majority of these vendors and in some cases may

ultimately result in the closure of some of the smaller ones that rely

on Gearmatic for the bulk of their business.

"Gearmatic Co. has received federal government

assistance in the form of grants for research and development to enable

them to manufacture the winches they produce. This company has used

this money to develop and perfect the manufacture of the winches made

at Gearmatic. The engineering, research and development department will

continue to operate at Gearmatic" — in Surrey — "with federal

assistance, to further develop products for manufacture in the United

States. It is a known fact that prototypes are ultimately vastly more

expensive than the eventual manufacture of a winch. The money that is

used in the tooling and preparing of the dies, preparing the assembly

and production of winches to start the operation, is greater than that

needed to actually run and produce winches on an assembly line. This

money was Canadian taxpayers' money used to develop these winches."

Gearmatic doesn't have a great record of corporate

citizenship in Canada. I'll outline some of the previous record of

Gearmatic and Paccar as detailed on page 5 of the steelworkers' brief:

"Early in 1970 Paccar as a corporation bought out

Hayes Trucks, a truck-manufacturing firm in Vancouver. In 1975 they

closed Hayes Trucks, putting 350 people out of work, Once that

operation was closed, they imported Peterbilt trucks from the United

States, manufactured in the United States and owned by Paccar Inc. All

they accomplished was putting a competitor out of business. They also

owned Kenworth Trucks. They closed down their Kenworth operation in

Burnaby, which was a truck-manufacturing outfit. The only reason which

we can see was, again, to cut competition for their export trucks."

Mr. Chairman, here we see a corporation, Paccar Inc., which has

taken over a number of British Columbia companies including Hayes

Trucks, Kenworth Truck and now Gearmatic Co. In Surrey. They have

transferred all of their manufacturing operations for these companies

into the United States. Instead of manufacturing in British Columbia

and putting approximately 1,000 British Columbians to work — about

one-fifth of the proposed workforce in northeast coal — they put those

Canadians out of work. Now they manufacture the items, many of them

designed through subsidies from the federal government — subsidies to

product development and to process development — in the United States

and import them into Canada, with a loss of jobs and a loss of foreign

exchange.

[ Page 2841 ]

My question is: what has the minister done as a result of the brief

from Steelworkers Local 6613 to request that the minister contact

Paccar Inc. to request that they keep in Canada jobs which were

developed in Canada, products which were developed in Canada and

processes which were developed in Canada with taxpayers' subsidies'?

What has the minister done to keep those jobs in this province?

HON. MR. PHILLIPS: Mr. Chairman, I'm aware of the situation

that the member has brought up. My ministry has had several meetings

with the company involved. The short answer is that other than going

in, taking them over or buying them out, there is not a devil of a lot

we can do. I'm glad that you did highlight the fact that that was

federal government money that went into the company and not provincial

government money. I'm not all that happy with that. but it is the

situation.

The truth of the matter is that it would appear the closure is a

rationalization of the operation caused by declining markets in Canada

and an increasing market in the southern United States. Unfortunately

the decline of the winch market overall has led to the decision to

close the British Columbia operation and transfer manufacturing

activity to Ontario and the United States.

MR. SKELLY: Mr. Speaker, it just doesn't seem enough to me.

The minister obviously considers taking over the company not to be an

alternative. Of course, that's only one of the options. Surely this

government can exercise some persuasive pressure on the company to keep

their manufacturing operations going here. He says the markets in

British Columbia have slowed down; I suppose that's true of virtually

every market. The products we're talking about at Gearmatic in Surrey

were designed through federal taxpayers' subsidies to Gearmatic Co.,

and most of those products are designed for application here in British

Columbia. We're acing to see products sold into British Columbia which

were manufactured in the United States and developed by Canadian money

and British Columbia expertise.

When the minister says he's happy that the federal government put

the money into this operation to develop those products for export or

local sales, I suppose he's saying he's glad that the federal

government lost the money and not the government of British Columbia.

The fact is that British Columbians lost jobs, and that British

Columbia suppliers who supplied parts and equipment to Gearmatic in

Surrey have lost jobs and business. Federal taxpayers and provincial

taxpayers are precisely the same taxpayers: we pay to both levels of

government. The idea here was that we're paying into an operation to

produce in Canada, through the use of Canadian talent, research and

development, a product that has application mostly in Canada. Even if

it has application in export markets it should be manufactured by

Canadian labour right here in Canada. It is irresponsible of the

minister to say that just because the federal government lost their

Subsidies we're not all losing as a result of this closure.

It appears that the minister hasn't exercised sufficient persuasive

pressure on this company to keep them operating in Canada. He provides

the corporate excuse that it's simply a rationalization of the

company's business. and whatever is good and profitable for the

company, and for the company's United States operations, is okay by

him, as long as the federal government loses money and not the rest of

us. It simply doesn't make sense. We're talking about the lives, income

and employment of British Columbia's citizens. and we should be doing

our utmost, our best to see that those jobs remain in Canada.

HON. MR. PHILLIPS: I might ask the member a question. You stand up there and pontificate. What would you have me do?

MR. SKELLY: I'd have you resign right off, through you, Mr.

Chairman. If I was the Premier and he was the Minister of Industry and

Small Business Development, and he didn't have the talent necessary to

keep this company operating in British Columbia, he would be gone clown

the road, Mr. Chairman. and that's where he belongs right now. Here we

are spending hundreds of millions of taxpayers' funds to subsidize the

development of northeast coal. Each one of these jobs is just as

valuable, in terms of employment for the people of British Columbia, as

each one of those jobs in northeast coal, and the minister should at

least be prepared to put out the same kind of effort to persuade the is

company to keep its operations in Surrey as he puts out to spend

taxpayers' money to subsidize the northeast coal development.

To answer the minister's question. Mr. Chairman, I'd certainly have that man down the road as soon as possible.

HON. MR. PHILLIPS: I've got to tell the pontificating member

for Port Alberni that have no intention of resigning. I believe you

have a brother who is an MP in Ottawa, where the records are of what

commitments were made by that particular company when the loan from the

federal government was made to them. He has all the records available.

I'm sick and tired of doing MPs' work. They get paid better than a

cabinet minister, and they sit down in Ottawa and do absolutely nothing

to help the province of British Columbia. I'm a little sick and tired

of it.

MR. SKELLY: Start doing your own work.

HON. MR. PHILLIPS: You can stand up here and pontificate and

say that I can go in there with a golden wand and make that company

stay in British Columbia. You can pontificate all you want, my friend.

but you won't bother me.

MR. SKELLY: I'm talking about 300 jobs. That doesn't bother you either.

HON. MR. PHILLIPS: There are certain things I can do, and

certain things I can't. But I'm not a socialist interfering with the

marketplace. Why don't you write your brother and ask him to tell the

boys down in Ottawa, who made the decisions and have all the records,

to check with this company and see what commitments were made when they

got that money, instead of standing here harping at me?

MR. SKELLY: I'll do it because it's useless to talk to you

about it, that's for certain. When it comes to Canadian jobs, it's

useless to talk to this minister.

MR. CHAIRMAN: Order, please.

MR. DAVIS: Mr. Chairman, I know the Minister of Industry and

Small Business Development is aware of the concern of the shipping

companies about the exceptional new high tax the province is placing on

bunker oil that the ships

[ Page 2842 ]

take on. I think he must also be concerned about

the fact that the company that was looking into the possibilities of

carrying out a bunkering function in Prince Rupert has now put its

plans on hold. I wonder if the minister would look into this important

subject, either himself or through his ministry, and have someone

consult both with the shipping industry and with the buyers of bunker

oil with a view to maintaining this industry in the province, expanding

it from Vancouver northward to Prince Rupert, and make sure the

industry survives in Vancouver, despite our current tax policy.

MR. CHAIRMAN: Debate on that subject with respect to previous

legislation would be out of order; with respect to administrative

actions it is in order.

HON. MR. PHILLIPS: Mr. Chairman, I appreciate the member's

concerns, and because of the variations of stories and because of the

large file that the Minister of Finance has on it, I have set out to

have an independent study done. I hope to have it done very shortly,

and I will certainly be consulting with the Minister of Finance,

because I am concerned about what is happening in that industry in the

province.

[3:00]

MR. HOWARD: Mr. Chairman, there is a certain hazard involved

in putting forward thoughtful, positive and employment-creating ideas

in the House, especially when the minister takes umbrage at any

suggestion that he might be in error. I say there's a certain hazard

and we have to take that and recognize that. But I want to suggest to

the minister, through you, sir, that the government has got a pretty

scant interest in job creation and employment development, in the

northwest at least. Maybe elsewhere as well, but I'm particularly

talking about the northwestern part of the province.

It seems that the government, with its unholy marriage to the

capitalist system without question as to whether or not it's an

appropriate marriage, is blinding itself thereby to a few facts of

life. One is simply that if the government, as seems to be the case,

throws up its hands and says, "We can't do anything about this

particular subject," whatever it is, "because that's what industry

wants to do," then, of course, there is an abandonment of a

responsibility on the part of government to try to create jobs, and it

leaves it to the decision of somebody else. The decision that somebody

else will make will be based on what serves the interests or balance

sheet of that somebody else. That's primarily what the minister is

saying. He and the government are saying that really it is secondary

whether or not jobs are created so long as industry can do whatever it

pleases to do.

The result of that kind of philosophy, as I said from the beginning,

is that there is a scarcity of any promotional activity with respect to

the northwestern part of the province in the area of processing and

manufacturing. Primary resource extraction — that's fine and dandy.

That employs the fewest number of people possible out of the resource.

It also exports the resource to people in other lands, and people in

other lands are employed in the processing or the manufacturing of that

raw resource. In many instances it is shipped back to us and we buy the

finished product back again. While we may get a dollar for exporting

the primary resource, it could cost us $5 to $10 for the finished

product. That's what happens when you have a government — this

government is headed in that direction as well, and as this government

has said for quite a number of years — that does not pay attention to

the need to create jobs in the manufacturing and processing segment.

Let's just talk briefly about the lumber industry in the northwest.

We're engaged in primary production. We have a company active there —

B.C. Timber — that decided that it would go and buy lumber from other

producers rather than produce it itself. That's on the cash market. It

would go and buy carload lots of lumber on the futures market for

delivery at some time in the future, whenever those contracts were

deliverable, and whenever they came due. It would do that rather than

employ people locally to cut the lumber themselves, and to employ

people to do it. That works against the interests of the northwest. It

may work in favour of the interests of B.C. Timber. It may not, because

the process of a producer of a commodity or a product buying on the

futures market is contrary to established practice. What they should

have been doing is selling on the futures market, saying, "We will sell

our future production," instead of buying it. If they buy it it's a

gamble. The price goes up and they can sell out the contract, and they

may make money, but that is gambling with the employment of people in

the area.

Interjection.

MR. HOWARD: The member who just interrupted will have an

opportunity to put forward a view about this if he would like. I didn't

hear clearly what he said, but there is no need for him to repeat it.

The fact of the matter is that producers of products should not be

buying that product on the futures market — that's a gamble. If the

price goes up, as I said, they can close out the contract and they make

a profit and they say that's fine — that's helped our balance sheet.

But if the price goes down and they close out the contract and not take

delivery of the lumber, they lose money. Of if they take delivery of

the lumber at the lower price — which is, I gather, what has occurred

in some instances with respect to B.C. Timber — they have bought lumber

at a price higher than the market was at that particular time and

employed people, usually in the United States because that's where most

of the deliveries take place, and at the same time have laid off

workers here in this part of the province. That's what happens when

there is an abandonment on the part of the government of concern about

what takes place in the economy.

We also have the situation I raised in the House earlier where B.C.

Timber has been selling sawlogs to Metropolitan Trading for export at

the same time that they closed down shifts in some of their sawmill

operations in that very same part of the province. That is an

unconscionable sort of action, and it works against the interests of

people in that particular area.

MR. R. FRASER: Not necessarily true.

MR. HOWARD: If my friend from Vancouver South who indicated

that that is not necessarily true is prepared to stand up here and tell

the committee what he knows about what B.C. Timber is doing, I'd be

glad to listen to him. People in the area that I represent know that it

is true. They're the people who have been laid off. People working in

the Kitwanga mill one shift were laid off. They know what happened to

them. The same as elsewhere in that area. They know what occurred to

them. They see the same company for which they work buying lumber on

the futures market when that is the

[ Page 2843 ]

wrong thing to do, and selling sawlogs for export

while they're out of work. If the member knows something beyond that,

I'm sure it would be appreciated by the committee. And I'm sure that

information that he has or appears to have would be appreciated by the

workers who have been out of work for some period of time up there —

people who just got back to work in the sawmill industry after a long

layoff by that same company and have now been laid off again and have

found themselves at the point of layoff, unable to have had a

sufficient number of weeks of employment in the interim to qualify for

unemployment insurance. They're just a few weeks short in some

instances. What is going to happen to those people? The member for

Vancouver South, I am sure, has a concern about it. Whatever words of

wisdom he has to impart to the committee, I'll tell it to the people in

Terrace who are faced with a pretty dismal future and a pretty dismal

winter.

Unemployment is high and getting higher. What I am suggesting to the

minister is that we need to have an extraordinary effort in the area of

manufacturing and processing. We need to do something other than just

say: "I wish somebody else would do it." Because he knows as well as I

do — take aluminum for argument's sake — that the only interest that

Alcan has is in producing another smelting capacity or two other

smelting capacities in that area, dependent upon a potential

hydroelectric development, but I won't talk about that at this time....

Alcan, regardless of anything else, is primarily concerned with its

worldwide operations and is not concerned with moving into the

processing and manufacturing of aluminum unless it serves Alcan's

interests, and they won't do it unless government....

I remember the minister standing up in this House one day not too

long ago and saying: "I could snap my fingers and tomorrow we'd have

three new aluminum smelters in British Columbia." I wish he'd snap his

fingers and see whether we can get some aluminum processing and

manufacturing in British Columbia, especially in the northwest part

where the hydroelectric power is and where the smelter is. If he could

snap his fingers to get three new aluminum smelters, surely he could

snap his fingers and get some extra employment in an area where it is

much needed, namely something much more stable than relying upon the

prime resource development. It's possible to do that, and that's what I

would urge the minister to do. Instead of just concentrating his

activities on selling the raw resource to producers in other lands, let

us use our resources rather than receiving a minimum amount of money

for them and employing people in other lands to do the manufacturing

and processing and then ship the finished product back to us. That's

the kind of economic strategy we need in this province, and I would

surely urge the minister to embark upon that direction, rather than the

one he's been headed on in the last few years.

HON. MR. PHILLIPS: Well, what the member has said is on the

usual socialist high horse about what we should do for manufacturing

and that we're just shipping out our raw resources — hewers of wood and

drawers of water. I think that I should a reiterate few facts to the

House. There are actually very few raw materials that we ship out of

British Columbia that we might be able to process here. Coking coal,

for instance, happens to be an international commodity, and we have the

opportunity of leaving it in the ground or selling it on the world

market — the same as other nations have done, including the United

States, Australia, South America and practically every country in the

world.

As I said this morning, we supply about 4 percent of the known

production of coal, so you could say we're shipping out a raw resource.

Very few people understand that before that raw resource leaves the

province, it is processed through cleaning and scrubbing plants which

cost literally hundreds of millions of dollars to build and to process.

It isn't a case of just taking the coal out of the ground and putting

it into a boxcar and shipping it overseas. I guess maybe some day, when

our population increases and that investment that we're trying to

create the climate for brings more people to the province, a steel mill

in this province would be viable. I would hope that some day we would

be able to supply coking coal to our steel industry in Ontario, and I

would like to see us move in that direction.

I realize that those steel mills have interests. Do you know they

actually own interests in a natural resource in another country? That's

taboo, I suppose, as far as the socialists are concerned, but Canadians

actually own an interest in a natural resource in another country. Tut,

tut! We must not have that, my boy! No, that's bad! So we bring our

coking coal, about 12 million tonnes a years, into Canada from the

United States.

Now what other natural resource do we ship out? We ship out copper

concentrates, I guess, and maybe some day we might manufacture it into

wire — you know, copper wire and other copper products. We have a

copper smelter here at the present time, but because of the

overcapacity in copper smelters elsewhere in the world it is not viable

and they had to close it down. It's certainly not viable to build a new

copper smelter at the present time. I have checked into it. So

it's just a reality and a fact of life. I suppose if I were a socialist,

we'd build a steel mill and let the taxpayer be saddled with the burden

of running it uneconomically for the next X number of years, or we'd

put in a copper smelter.

What other products do we ship? What other of these great raw

materials do we ship out of British Columbia? What are they? I've named

two. What are the rest of them? Some molybdenum, I suppose. Molybdenum

is another worldwide commodity used in steelmaking and certain other

manufacturing processes that we don't have here. I suppose we should

leave the molybdenum in the ground and all those people that were

gainfully employed in extracting it should go without jobs. But the

member who just spoke is from an area that brings a natural resource in

from another country, and I don't know what the Australians and those

people who ship bauxite to Canada say. I suppose that they stand up in

their legislature and say: "We shouldn't be shipping that bauxite to

Canada; we should be processing it here." We do process it here. We

make aluminum of it, and when we announced that some of that aluminum

was going to be used in the manufacture of car wheels, what did the NDP

say? They pooh-poohed it. What's a $23 million investment? What's one

hundred jobs?

[3:15]

Processing aluminum. There are other manufacturing plants in British Columbia

that process aluminum. The Toyota plant is just the beginning, but eventually

we will be manufacturing not only aluminum wheels but also cylinder heads,

intake manifolds and mufflers. We could be manufacturing a number of aluminum

components for automobiles and shipping them into the world market. But here

you have the exact opposite of the concept that the member opposite is

[ Page 2844 ]

trying to foist on all British Columbians — that we're just hewers of wood and drawers of water.

They didn't listen to me this morning when I named five companies

that had nothing to do with hewing wood and drawing water and that

received awards for exporting the products they manufacture here or the

millions of dollars of sales and hundreds and hundreds of people

employed. They paid no attention to that whatsoever. They chose to

overlook that. Here we bring in a natural resource from another

country. We process it into a finished metal. We take some of it and

process it into a consumer product, and then we take that consumer

product and export it to another country for them to use in their

manufacturing and assembly of automobiles. If that isn't motherhood, I

don't know what it is. Nobody ever said anything about that.

With regard to our lumber industry, I hear the vibes coming out of

Ottawa that we have to be careful because there might be some combines

in Canada. We can't have any combines in Canada, because it might rule

out competition. So far as I'm concerned, if we had a combine in the

paper industry, we might be able to get all these little plants

together to manufacture some of the high quality paper that is

manufactured in bigger areas with a bigger market. But you can't have a

combine. You can't have those people get together and pool their

resources to seek out a market and put their technology and money into

one plant to manufacture fine paper. Oh, no, that would be a combine!

That's anti-socialist.

Here we are in a market of 27 million or more people. The majority

of manufacturing has been long established in that golden triangle of

Ontario. It used to be in the Maritimes, but because of Ottawa's

policy, we soon got rid of those manufacturers in the Maritimes. Boys,

we'll get them out of business and bring it all to the golden triangle.

That's been the policy of Canada.

But relatively speaking, we have a tremendously small market, and if

you're going to build up a large manufacturing base, as they have done

in the decades past, you build it to sell at home. That's how the

American manufacturing business was built up. It was built to sell to

the 200 million or more people in the American market. That's how

Japanese manufacturing was built up. It was built up to sell at home.

When they got their businesses established, they did some exporting.

That's how the European community did it. It built up its manufacturing

base to sell at home.

I suppose as Minister of Industry and Small Business Development, I

can go out and tap my little magic wand and make a lot of things that

the member was talking about economically viable. I happen to represent

a northern riding. I would love to see manufacturing in the north, but

I'll tell you, when the economics aren't there.... You as a socialist

may be able to make it economically viable by pouring gobs of

taxpayers' money into it — the same as you did when you bought up every

broken company in the province and tried to put it together to make it

work. It was great. It made a couple of bucks in the good times, but

when the crunch came, it didn't do so good. But we are encouraging the

lumber industry to add further value.

I have encouraged lumber manufacturers, and we are now manufacturing

doors, moulding and panel work a lot more than we were. We have one

kitchen cupboard manufacturer in British Columbia who has shipped

millions of dollars of kitchen cupboards into the Japanese market.

That's happening, but as long as the socialists keep painting the

picture of British Columbians as being hewers of wood and drawers of

water, the rest of the world will think we're all walking around with

pails on our back hauling water uphill to make electricity. Not so, We

have very sophisticated manufacturing,

As I pointed out this morning to the member — but he chose not to

listen — we have a number of highly developed high-technology

manufacturing industries in the province, We have enough now to start

forming what we call a family of high technology industries. Once that

basic family is established and the parts distribution and talent and

salesmen are all here, people will come and join that family. You've

got to have that nucleus. Once Dynatek gets going, we will have the

first chip manufacturing in British Columbia. Then it will grow. We

haven't had the advantage of being able to get Silicon Valley going,

like they have in Ottawa. But we're doing our part here in little

British Columbia, and we have the good nucleus and the good base.

We have, for instance, apparel manufacturers in British Columbia who

are selling sportswear in Japan. I haven't the figures here, but if you

look back in last year's estimates I could tell you how many people

were employed and what the payroll is in manufacturing clothing.

They're not ordinary black suits but sports suits, and we're actually

selling them in the international marketplace. We have another project

going in the north. He talks about the northwest. What about Ocelot?

Who do you think fostered Ocelot, which is the nucleus that someday

will grow into a petrochemical industry? That's manufacturing; that's

using a natural resource and adding further value in the northwest,

right there in little old Kitimat. We've got an LNG plant going in,

north of Prince Rupert, and the member for Prince Rupert pooh-poohed

it. He said: "Why ship it to Japan? My gracious sakes, why add further

value? Let's just shove it in a pipeline and take it down to the United

States. Why have more people employed? Why have tankers and why have an

investment and why have the security of a long-term market? Why have an

LNG plant? Let's just put it in a pipeline and send it down to the

United States, and when they don't want it they'll crank it off and,

boom! no more production, no more drilling, no more nothing." If we

don't go with that LNG plant, we might as well close the petroleum

industry in British Columbia down until 1990.

But all of those items — and I could name off thousands more that we

have.... Do you want me to name off some small manufacturing

industries? I've got a whole list of them here. I won't take up the

time of the House. But please, Mr. Member, as a British Columbian don't

stand up here in this Legislature and say that we're just hewers of

wood and drawers of water. We have had a concern about the

manufacturing industry. We have fostered it; it is growing; it is

coming. I'll tell you, we've got a lot of diversification, and those

companies are working and doing a lot of good sales work in the

offshore markets.

MR. HOWARD: Oh, what a message of despair and misery we just

heard from the minister! No hope whatever for the future, to listen to

him. I said from the beginning that there's a certain hazard involved

in putting forward suggestions to this minister, because he doesn't

listen to what they are; he has a pre-set bias about something, tosses

around clichés and label words that are supposed to mean something, and

passes it all off as it if isn't anything worth suggesting, indicating

that anybody in this House who raises any concerns with him about

employment, and the hundreds and hundreds of people who are out of work

in this province and

[ Page 2845 ]

are looking for some hope.... He's passing that off

as being not even worth talking about. Well, I can accept that from a

minister who was so concerned about subsidizing the Japanese steel

industry that he is digging into the taxpayers' pockets in this

province to the extent of somewhere between $1 billion and $1.5 billion

over the next 15 years. That's his perception of the way the economy

should run. Well, it isn't mine.

He talked about the copper industry. We had a person in this

province, the late W.A.C. Bennett, who had a vision about the copper

industry and copper smelting, and introduced legislation — which was

subsequently wiped out of existence — to set aside reserves of copper

underground for potential use in the future for copper smelting. That's

the kind of vision that we need now, not this claptrap that the

minister passes off as truth.

MR. CHAIRMAN: Let's be parliamentary.

MR. HOWARD: Well, he does tell the truth, but it's about fictitious situations most of the time.

He pulls out Dynatek and says: "Isn't this a wonderful thing?" How

much public money went into Dynatek? The taxpayers supported that. He

talks about the Toyota wheel manufacturing plant; no effort whatever

made to try to establish that plant close to where the primary

production takes place. How much public money went into Toyota? He

can't have it both ways. He can't condemn the use of public funds to

assist in providing jobs, and at the same time trot out as examples of

the worth and value of the capitalist system examples that involve the

use of public funds. That is why I say the minister's perception of

truth is primarily revolving around fictitious situations. The truth

needs to be told about the whole aspect of it. One does get a little

tired standing in the House, or even writing letters to the minister,

as has been the case, raising concerns about people in areas

disadvantaged by what's happening in this province, and then to listen

to the froth that comes forth masquerading as rational debate. If the

minister would spend a little more time concentrating on a direction

and a vision for this province, and a little less time in bombast,

perhaps we'd be a lot better off.

HON. MR. PHILLIPS: I would hope the member would stand there

and ask truthful questions, Mr. Chairman, but he prefers to heap

personal abuse, which is his nature, and I understand it. He's got to

be personal and heap personal abuse, because that's the only thing the

member knows. He wants to perpetuate....

MR. CHAIRMAN: Order, please. We've had enough of personal reflections, I think.

HON. MR. PHILLIPS: I just want to set the record straight, Mr. Chairman.

MR. CHAIRMAN: Maybe we can get back to the ministry.

HON. MR. PHILLIPS: Again, he's perpetuating the lie that

we're subsidizing the Japanese steel industry, when indeed that deal on

northeast coal happens to be the best deal ever put together, and the

member knows it. There has been nowhere else in the history of the

world where the revenue from the first two contracts would pay for the

entire infrastructure to be put in place.

MR. CHAIRMAN: Just one more item, hon. member....

HON. MR. PHILLIPS: The members knows that, but he chooses to

take the view that he can perpetuate a myth on the people of British

Columbia, and perpetuate lies so that....

MR. CHAIRMAN: Order! The minister will withdraw any improper motive imputed to the member.

HON. MR. PHILLIPS: I certainly wouldn't want to imply that that member over there was doing anything....

MR. CHAIRMAN: Thank you. Now if we can get back to some parliamentary language, using some courtesy and avoiding personal reflections.

HON. MR. PHILLIPS: We were getting on very nicely in the

Legislature until that member for Skeena had to stand up over there and

try to perpetuate on the people of British Columbia...and heap personal

abuse on the member. I just want to set the record straight, Mr.

Chairman. I realize where it comes from. Everybody in this province

understands where that member comes from, and understands his tactics,

so we know where we're at.

We did a study on the Kitimat and Terrace area, and I think that

member over there who represents the area was probably one of the first

to condemn it. He said we were going to take all the lumber in the area

out of use, and he didn't want this, he didn't want that. There

certainly was lots of vocal opposition. We have finished the study and

it shows there is ample land in that area for industrial development;

we will ensure that it stays ready and available for industrial

development. I would presume the member has read the study, and if he's

so concerned about his particular area, I would invite him to come to

my office sometime and sit down and have a discussion, rather than

stand up pontificating here in the Legislature.

[3:30]

Vote 53 approved.

Vote 54: British Columbia Railway — historic debt, $70,000,000 — approved.

On vote 55: financing transactions, $10.

MR. D'ARCY: It is my understanding that the travel industry

subsidiary agreement that we've had with the federal government expired

as recently as yesterday — October 17, 1983. Since I consider this

program to have been of tremendous value to the economy of British

Columbia, with a great ripple and multiplier effect of benefit to B.C.

taxpayers, as well as to the private sector involved in the travel

industry, I'd like to ask the minister if he has taken initiatives,

along with his colleague from Kamloops, to approach the federal

government and recharge this particular program with funds. In my view,

it has replaced itself several times over in value to the province of

British Columbia over the last two or three years that it has been in

effect.

[ Page 2846 ]

HON. MR. PHILLIPS: I appreciate the member's question, and I

want to say how pleased I am that the member recognizes the value of

the TIDS agreement. As you know, it was the first tourist industry

development subsidiary agreement of its kind to be signed in Canada,

and was put together by this ministry in cooperation with the Ministry

of Tourism and is part of that vision of diversification which this

ministry had, and which the member for Skeena doesn't seem to

recognize. The member for Skeena has a very short memory, because it

wasn't too long ago that he participated with me in the opening of

Hudson Bay Mountain in Smithers. He did absolutely nothing to foster

it. I went in and worked with the area and put the whole deal together,

and it's certainly been a benefit. That member certainly didn't waste

any breath or any effort in helping that particular riding, but it has

been a great diversification in the area.

MR. CHAIRMAN: We've had enough of the personal reflections. To the bill, please.

HON. MR. PHILLIPS: With regard to the questions, Mr.

Chairman, I'd like to say that yes, the program has wound down. I think

what we set out to accomplish with that program has been accomplished.

As you know, we wanted to assist in travel-generaters, and assist in

helping communities and societies build up something that would make

our province a tourist attraction twelve months of the year. I think

we've done that. What we're doing right now is assessing where we can

best help the industry. I don't think just putting more money into the

same agreement will accomplish what we really want to accomplish in the

next decade so far as the tourist industry is concerned.

I don't want to say that we're not going to, but I don't think we're

going to get another agreement with the feds. I think the feds will

carry out a part of the development that they want to carry out so

that, as you know, they can take the credit for it. It seems ironic to

me that they're more interested in the political credit they get than

they are in the results of their programs. However, we are assessing

where we can best assist the industry itself, and hopefully we will be

announcing a program in the not-too-distant future.

MR. D'ARCY: I'm not suggesting that we discuss the policy

regarding a renewed agreement on the floor of the House. The minister

does have that discretion. He has always had that discretion in

consultation with his colleague from the Ministry of Tourism. What I am

saying, Mr. Chairman, is that if there is any possibility that we can

get a new infusion of federal funds to match provincial funds,

regardless of how the minister and his colleagues decide to spend the

money in the future, then that opportunity should be pursued and should

be pursued forthwith. The minister, in my view, is trying to fudge the

question by talking about future policy. Future policy is at his

discretion. What I'm talking about is: is he going to recharge the

program. If he takes five years to spend the money, or ten years to

work out policy, that's unfortunate but a reality. What I'm saying is:

is he going to go after those federal funds? Simply saying that in his

view he doesn't think he can get those federal funds isn't good enough.

Has he been after his colleagues in Ottawa to see if the program could

be recharged?

In my view, it has been of no net cost to the Canadian taxpayer

living in British Columbia, because the program has, by and large, paid

for itself several times over, even taking away the odd bad investment

in Whistler, which may or may not repay itself in the future; I hope it

does. But most of the investments that the public has under the TIDSA

program have already repaid themselves with a good multiplier and

ripple effect throughout the economy.

HON. MR. PHILLIPS: I want to say that I have already pursued

that area with the federal government and will continue to pursue it.

Again, I appreciate the member's comments. I'm glad that he brought up

Whistler. We put into Whistler somewhere in the vicinity of $12 million

— $6 million federal and $6 million provincial.

It's great for opposition members to use Whistler as a whipping-boy,

but I want to tell you that the money the private sector has invested

in Whistler so far has more than repaid both the federal and provincial

governments for what they put in. We have in Whistler approximately a

20:1 ratio; in other words, for every dollar that the provincial and

federal governments have invested, the private sector has invested $20.

It happens to be the best ratio of any project anywhere. As far as I am

concerned, Whistler will be one of the finest recreational villages you

will find anywhere in the world. Certainly their land sales ran into

difficulties with the downturn of the economy, and the government moved

in rather than have somebody pick that up for a song. Whistler will go

down in history as being a great decision, and will be one of the

finest recreational villages that you will find anywhere in the world.

Already it is bringing literally thousands and thousands of foreign

skiers. With those skiers come millions and millions of tourist dollars

to the Vancouver area and to the Whistler area in the wintertime.

MR. D'ARCY: The minister might be surprised, but I agree with

what he just said. But the fact is that taking into account what he

just said, and the fact that I agree with it, Whistler has been the

worst use of the TIDSA funds. All the other uses have been better. If

it's that good — and the minister has said that even Whistler is good

in his view — it certainly should be renewed, and it should be renewed

immediately. In fact, it should not have been allowed to expire. It

should have been renewed several months ago.

HON. MR. PHILLIPS: Well, there again the member thinks that

the minister, because he accomplishes certain things, has a magic wand,

and I can just go down to Ottawa and wave that little wand and it will

be renewed. Mr. Member, it's not that easy dealing with Ottawa these

days, because Ottawa has taken the socialist approach and gone out and

spent all their money on airy-fairy programs and spent more than we can

afford and plunged the country into debt. Today they haven't got the

money or the flexibility to do the types of things that we need to do

in Canada to insure that the economy progresses. So I don't have a

magic wand. I wish that Ottawa had the money. I wish that Ottawa had

been prudent and cut back in government spending a few years ago. Today

there would be money in the bank and we could go down and get money to

help the economy of Canada. My friend, I wish they hadn't taken the

socialist approach. I wish that today they would come in with

government restraint so that they could get people to invest in this

great country instead of them being afraid. My friend, I wish I could

go down to Ottawa and get some of that money that they should have

there.

[ Page 2847 ]

MR. D'ARCY: Mr. Chairman, we ask for information; we get

rhetoric. For the minister's dubious benefit, in the last three or four

years the per capita debt under Social Credit in British Columbia has

been growing faster than the per capita debt in Canada under that

disgusting Liberal regime in Ottawa. So it's crazy for him to talk

about how much they've been borrowing. It's true that they have, but

his government has been borrowing far more.

HON. MR. PHILLIPS: Mr. Chairman, the member talks about the

per capita debt and then in the next breath he's saying: "Why don't you

spend more to build up the province of British Columbia?" When he talks

about the per capita debt, does that socialist over there talk about

the assets that have been built in this great and growing province?

When you've got a pioneering province, you have to spend money to

invest in the future. That's why our per capita debt has grown. But we

haven't been spending the province's daily grocery money, going into

debt, and borrowing. That's what Ottawa has been doing. I didn't say

that Ottawa had gone into per capita debt on national assets; that's

what has happened here in British Columbia, my friend. Keep the record

straight.

MR. HOWARD: I wonder if the minister would mind repeating that. I missed some of what he said.

What the minister said at the end was "keep the record straight."

Well, I'm attracted to do that on the basis of the minister's earlier

comments under this vote about my participation with respect to Hudson

Bay Mountain and the trip that he and I made together up the ski-lift

and in the helicopter. I'm not going to relate any of what went on

there; that is a matter between the minister and me and it's going to

stay that way. But for him to say that I've had no involvement whatever

in that is simply contrary to the facts and contrary to the record. I

don't know if the minister knows it, but I have to put it on the

record: if there is anybody in the whole northwest, excluding my

colleague the member for Prince Rupert (Mr. Lea), who has done more to

try to promote people locally to apply under TIDSA, it has been 1. I've

had dozens of conversations with people who are interested in TlDSA.

I've advised them about where to get the applications and provided them

with the application forms and the information. I did it without any

fanfare or asking for any credit, just as a normal, hard-working member

of the Legislature from Skeena trying to do his job on behalf of the

people up there. In spite of the minister's intransigence in such

matters, I've been fairly successful.

Vote 55 approved unanimously on a division.

An hon. member requested that leave be asked to record the division in the Journals of the House.

[3:45]

ESTIMATES: MINISTRY OF

CONSUMER AND CORPORATE AFFAIRS

On vote 19: minister's office, $184,197.

HON. MR. HEWITT: Mr. Chairman, it's a pleasure for me to

stand today and put forward my estimates for debate in the House, this

being my first opportunity since my appointment in August 1982.

The ministry is responsible for some 50-plus pieces of legislation.

As Minister of Consumer and Corporate Affairs, I also have the

responsibility for the Insurance Corporation of British Columbia and

the liquor distribution and liquor control and licensing branch. As we

proceed, I would be pleased to respond to any questions raised in those

two areas.

The major administrative theme during the past year in my ministry,

as in others, has been to live and operate effectively with fiscal

restraint and to deal positively with restraint as a challenge rather

than as a barrier to good administration. We take pride in setting as

our goal the carrying-out of our administrative and regulatory

responsibilities with the least possible interference in the activities

of those we regulate.

In Corporate Affairs, the emphasis during 1982-83 was on the

improving of regulatory systems and procedures. A major study was

undertaken at the central registry with a view to modernizing the

existing computer system. This initiative will ensure that the

information revealed by searches is up to date, and it will provide

capability for direct access to our information data base from remote

terminals throughout the province. The benefits of this new system will

be dramatic. My officials are now proceeding with its implementation,

with a targeted completion date of next spring.

Computerization is also very much in the fore in the office of the

superintendent of brokers, real estate and insurance. All licensing

under statutes administered by this office is now computerized, and the

securities, real estate and insurance industries all have access to the

records. In connection with security matters, Mr. Chairman, let me say

that my ministry has been watching very closely the processing of

financing documents through our regulatory authorities. We appreciate

that any delays in this process can have adverse effects on those

raising money, and we intend to take all reasonable steps to avoid such

delays.

In this respect, the superintendent of brokers has initiated a

number of measures to improve the processing time. These include the

reorganization of vetting procedures, deregulation of listings to the

sole responsibility of the Vancouver Stock Exchange, and the transfer

of authority to the exchange to approve new escrow releases and

transfers for listed stock. In addition, the superintendent has been

working closely with the exchange and the industry to develop

short-form statements of material fact. This is a simpler financing

document which will make it not only easier to prepare but also faster

to be vetted. It is now at the trial stage and, from all indications,

should prove very successful.

On the consumer side of the ministry, last year we completed ten

prosecutions under our trade practice legislation, along with one

substitute action, several assurances of voluntary compliance and one

Criminal Code charge. An additional ten legal proceedings were still

underway at the last year-end. At the same time, we investigated 55

complaints and laid 28 charges to offences under the Motor Dealer Act.

Those are an indication of the regulatory aspect of my ministry, but

related to the total operations in the retail consumer field. The

numbers are fairly small and indicate that the retail sector of our

economy and the consumer transactions are in the main carried out in an

honest and forthright manner by those involved.

Due to the economic situation in 1982, our consumer credit and

debtor assistance branch saw increases in the number of new clients who

sought our assistance. Many debt problems were related to mortgage

renewal penalties. In

[ Page 2848 ]

some cases consumers who were in the process of

renewing their mortgages at a high rate were told, or it was implied to

them, that they could renegotiate later if rates fell. When interest

rates did in fact drop significantly, some lenders refused to honour

those stated or verbal or implied commitments. Along with the federal

government, I can advise that we did consult and review with those

lenders, and in many cases we were able to assist in renegotiating

consumers' mortgages as was implied or promised by the lender.

With regard to the travelling public, I can advise that during the

past year we paid out over $300,000 from our travel assurance fund to

rescue more than 1,400 travellers whose holidays were threatened by

business failure of their travel agent or a wholesaler.

As hon. members are aware, we recently made the difficult decision

to close our consumer centres and to discontinue our complaint

mediation service. The centres provided a useful bridge between

consumers and business, but it was necessary to discontinue this

service as part of our overall restraint program. I would like at this

time to pay tribute, however, to those dedicated consumer centre staff

members and those funded groups whose members worked so hard to help

consumers and businesses resolve their differences. I am pleased to

note, however, Mr. Chairman, how quickly the private sector has

responded to fill the gap created by the closure of our centres.

Shortly after the announcement was made, the Victoria Better Business

Bureau stepped in to provide some expanded arbitration service to

assist consumers and business in resolution of problems. The Vancouver

Better Business Bureau has also done the same thing.

[Mr. Pelton in the chair.]

Also, it was interesting to note recently in the local newspaper a

listing of those agencies that could help the consumer. I for one feel

very strongly that government should provide the legislation and the

regulation to monitor and provide the law for the consumer and the

retailer to live by. However, sometimes I have some concern how we seem

to wedge ourselves between the two parties, and I'm hopeful that in the

years to come there will be more negotiation and dialogue between the

two parties involved in the contract. Failing that, there are many

agencies in British Columbia and in Canada that provide a service to

the consumer and the vendor, and I just wanted to refer to this ad that

was in the newspaper covering all those agencies that are available to

serve should there be problems in various areas of the marketplace. Let

me just read a few to you.

Under advertising there is a non-government agency, the Advertising

Standards Council of British Columbia, which deals with concerns in the

advertising field. In the automotive field, there is the Automobile

Protection Association, the Automotive Retailers' Association, the B.C.

Automobile Association — all agencies that work with consumers and

vendors if there are problems. They are not government or public

funded, but are there as agencies to help. For business complaints in

general, as we know, there are the Better Business Bureaus of Victoria

and Vancouver, the Consumers' Association of Canada, the Retail

Merchants' Association and the Retail Council of Canada. In various

individual sectors of the business world.... There is, for example,

with regards to carpets, the Canadian Carpet Institute, which assists

where there are problems with quality or accuracy of labelling their

products. In dry-cleaning there is the B.C.

Fabricare Association, which deals with problems that may occur.

There is the Restaurant Association, dealing with problems that may be

experienced by people eating out and not getting good service or

satisfaction. For electrical appliances there is the Canadian Standards

Association, an organization there to identify and endorse good-quality

products.

The Electronic Guild of British Columbia deals with complaints on TV

sets. On the financial aspect of our marketplace: the Credit Bureau of

Vancouver, the superintendent of credit unions, cooperatives and trust

companies. With regards to funerals, there's the B.C. Funeral Service

Association, the Memorial Society of British Columbia, the ombudsman's

office, Insurance Bureau of Canada and the Life Insurance Information

Centre. All these facilities are available to the consuming public

should there be problems in those areas. There's the B.C. Press

Council, of which we are of course aware, considering the recent

complaint that the Minister of Labour (Hon. Mr. McClelland) had with

the media, the B.C. Motor Transport Association, the photographers'

association, Law Society of British Columbia, the B.C. Optometric

Association, the housing manufacturing association, the Real Estate

Association, the condominium owners, B.C. tenants, the retail housing

council, the office of the registrar of travel services, and others.

[4:00]

I'm sorry if I expanded the list and carried on with more than a few examples,

giving you a fair amount of detail; I wanted to show people in the chamber and

to have on the record the number of agencies that are available to the consumer

should there be a problem. What happened was that government, responding in

good times to complaints of a few individuals who were concerned that they weren't

getting satisfaction, developed another government service. It worked well and

the people who were involved in it did their job well. But when we came to 1982-83,

I think it is fair to say that in attempting to live within our means we recognize

that these services, although useful to some, are not essential. We felt it

was an area where government could step away and allow the marketplace to work

with less government interference, but also allow those agencies who are there

to assist consumers and vendors, to step in and assist where it was necessary.

Moving to the residential rental area, we can say that we have been

experiencing the best rental market in British Columbia in more than 10

years. Vacancy rates in Vancouver are in the 3 percent vicinity. Other

vacancy rates around the province in smaller communities range anywhere

from 5 to 15 percent. So we're finding that it is a renter's market to

a great extent, and because of that, disputes between landlords and

tenants continue to decline. Within the context of this greatly

improved rental market, we have made some significant changes to our

legislation and dispute-resolution processes.

I would refer you, Mr. Chairman — although I cannot get into detail

on it — to Bill 5, the Residential Tenancy Act, which is before the

House. However, prior to that bill being passed, under the old act we

have removed rent controls. The new act offers the phase-out of rent

review and the office of the rentalsman. It is my belief that these

changes will in the long run benefit both landlords and tenants. In the

new legislation we deal with such areas as secure deposit provisions,

which I think strengthens the legislation and protects the tenant. We

also have taken into consideration some of the

[ Page 2849 ]

special requirements of tenants of manufactured

homes — or, as we call them, mobile homes — in their dealings with

mobile-home-park operators. It is fair to say that the items contained

in Bill 5 will be discussed in detail during debate on that bill;

however, in my estimates I'm sure we will be dealing somewhat with the

operation and office of the rentalsman, as it comes as part of my

estimates.

I think the office of the rentalsman has provided a valuable service

to the people of British Columbia since its inception in 1974. Our

rentalsman staff are as dedicated and hardworking as any employees of

government. But clearly we must live within the means of the economy to

pay for the services we provide if our economic recovery is to

continue. Accordingly, we have taken these steps to reduce the cost of

government and to return to a competitive marketplace. The total cost

of the rentalsman's office during the last full fiscal year was

approximately $4 million.

If we look to the need for a rentalsman's office, to the need for

dealing with problems between landlord and tenant, it is fair to say

that over the period of time the legislation has been in place, both

landlords and tenants are today far more familiar with their rights

than they were in 1974. In many cases the difficulties can be and are

resolved by both parties, rather than moving to a third-party

involvement: that is, government intervention between the two parties

to the contract. Furthermore, I believe these deregulatory measures

will ultimately result in new real estate development, more jobs and a

continuing healthy availability of rental accommodation.

Moving then to the other sectors of my responsibility, liquor

control and licensing, we continued our move to make our policies and

procedures clearer to those we regulate. Most notably, for the first

time, we published a comprehensive enforcement policy, which was

extremely well received by licensees and their association.

The major legislative change in the area of liquor during the year

was to permit beer and wine advertising on television and radio and the

electronic scoreboards in professional sports stadiums. To date we have

been pleased with the results of this amendment, and there have been no

serious problems resulting from that change in policy. We did

accomplish, first of all, the ability for British Columbia to control

the quality of TV ads, as opposed to having them produced and

transmitted from areas outside of our boundaries but, nevertheless,

coming into our TV sets and homes. They will be controlled here as to

their content. If they're manufactured in British Columbia, of course,

there is a result of jobs in keeping funds at home in paying for the

cost of those TV commercials.

Finally, one of the major benefits, I think, that came from the

change in the policy, and one which I compliment the broadcasters'

association for, is the fact that of the air time devoted to

commercials on beer and wine, 15 percent must be devoted to commercials

which are educational in content and advise people of the downside of

consuming alcoholic beverages. I compliment the broadcasters'

association and the breweries and wineries involved for the quality of

some of their educational ads that they have put on to indicate to

people that there is a downside to promoting alcoholic beverages. I

think the policy was well thought out and well described to the

industry — and, I think, well accepted by the public.

You might be aware, Mr. Chairman — and if you're not I'm going to tell

you — that I'm a strong supporter of the B.C. wine industry, considering

that probably about 50 percent of the B.C. grapes that go into the wines come

from my constituency. I'm very pleased to advise that there has been excellent

growth in that industry — the production of good quality B.C. wines — and I

think it's fair to say we've come a long way in a short period of time.

We still have a long way to go, but our wines are matching up and competing

well with wines from offshore, and I appreciate the support that the B.C. consumer

has given our wine industry.

The estate wine industry, which is unique to British Columbia, has

continued to grow and gain acceptance with the general public. At

year's end there were five estate wineries in the province of British

Columbia, all with their own uniqueness.

Similarly, the concept of the brew pub, which produces its own draft

beer for sale on the premises, has proved to be successful, and the

emphasis on this program is to encourage production of high-quality,

truly unique draft beer. Guidelines have been developed by the branch

to permit expansion of this innovative concept to ensure good control,

if you will, and reasonable regulations to protect the consumer, but at

the same time still allow some innovative approaches regarding the

manufacturing of beer, or the retailing of it at the consumer level.

The liquor distribution branch sales during the year reached an

all-time high of some $836 million, with a net income to the branch,

and therefore to the government as part of government general revenue,

of $337 million. It could be argued that if you're into the sale of

alcoholic beverages, you may receive that type of revenue, but the

downside or offset to that, of course, is the cost of problems with

regard to the consumption of alcohol. In the distribution of alcoholic

beverages, we have to be careful that we ensure that alcohol is

consumed in a moderate fashion and that we have the proper regulations

and laws in place to deal with people who cause problems with regard to

the abuse of alcohol in order that our taxpayers don't have to pick up

the cost for the carnage on the highways, and the abuse in the home,

etc., from the over consumption of alcohol.

There is an educational side to it and I think the Attorney-General

(Hon. Mr. Smith), the Minister of Highways and Transportation (Hon. A.

Fraser) and myself, as minister responsible for ICBC, work well

together in attempting to educate — and penalize, where penalties are

necessary. If we keep that under control, we can provide the consumer

the opportunity to purchase alcoholic beverages and to drink in

moderation. Of course, the revenues to the government can be used to

cover other operating expenses of government.

I am pleased that my ministry has been able to accomplish a

considerable amount in the past year within the framework of fiscal

restraint, which was our commitment, and I took forward to continuing

to fulfill our mandate as a ministry in an efficient and responsible

manner. I'd be pleased to respond to any questions that may be raised

by the members opposite, or my colleagues, during my estimates.

MR. D'ARCY: Mr. Chairman, on vote 19, the minister's office.

I'll get right to the point. Since the minister's responsibilities,

especially in the consumer part, have, to all intents and purposes,

been completely eliminated, perhaps the minister can explain to the

committee why his total office salaries are up by an amount in excess

of 30 percent over last year. We have, after all, a period of

downsizing the government in general, and this minister's ministry, in

particular, has been

[ Page 2850 ]

hit by the downsizing acts of government — the

deregulation acts — and it is very difficult to justify a 30 percent

increase in the amount payable for salaries directly within the

minister's office when so much of his ministry has been eliminated or

reduced to a shadow of its former self

Mr. Chairman, proceeding on to some of the responsibilities under

this minister, I have a concern about the loss of the debt counsellors,

not just because it means a hardship for those British Columbians, many

of whom are in dire straits — some because of their own inability to

deal with their finances; some because hard times have been thrust upon

them by unemployment or underemployment; some, as the minister said

himself, simply due to the fact that they have unconscionably high

interest payments to make on their mortgages. Whatever the reason, many

British Columbians found themselves over the last couple of years in

need of debt counsellors. This was of tremendous value to the private

sector, to whom these people owed money, because without the debt

counsellors more and more people have declared personal bankruptcy,

simply skipped town or been unable to reorganize their personal debt

structure. One of the fundamental purposes of the debt counsellors was

to allow and help these individuals to reorganize their lives to the

point where they could make good on their obligations, to where they

could meet their contractual obligations, to where they could, shall we

say, meet their debts to society and to their fellow men.

Further, Mr. Chairman, I think there is general agreement on both

sides of the House that one of the very important parts of the B.C.

economy and certainly a leading edge of recovery is this province's

small business sector. I believe we all know, both subjectively and

probably through surveys if they've ever been taken, that the area of

the retail business which suffers the worst from bad debts and bad

debtors is the small independent businessman. The large retail

businesses — the department store, etc. — have their own system of

credit checks. They have their own system of evaluating credit

applications and therefore have fewer bad debts as a percentage of

their total sales than the small businessman. The small businessman has

kind of a Hobson's choice here. He can either have no credit

whatsoever, in which case perhaps his sales volume is severely undercut

by competitors, or he can grant credit, perhaps using his own

discretion, but without the comprehensive credit checks that the large

retail businesses have. As a result, the small businessman, no matter

how careful he is, if he grants credit at all, is far more likely to

have to take a bath on that credit than the large retailer. So the debt

counsellors were very important not only to the consumer who finds

himself in a tough situation but to the small businessman as well, who

in many cases recovered all or part of what otherwise would have been

completely bad debts and would have had to have been written off.

Mr. Chairman, further regarding the ministerial responsibilities, I

want to question the minister's assumption that the private sector has

taken over the cause of consumer protection and consumer complaints.

Let's remember that the consumer protection agencies help the

businessman too. As I and many other people have commented before, the

square-shooting businessman doesn't need a consumer protection agency.

The majority of small and large businesses never need a consumer

protection agency. It's the occasional bad one that needs it. The

minister has made the rather ridiculous statement that consumer

complaints would disappear if we didn't have a consumer complaint

department. Well, Mr. Chairman, this is rather like saying crime and

murder would disappear if we didn't have police and courts, because

none of it would ever get reported. Clearly, we want not only to

protect the consumer but also to protect the reputations and integrity

of the overwhelming majority of businesses in this province from the

actions of a few quick operators who would cut and get out and either

disappear completely or move out of the province and leave innocent

consumers, in many cases pensioners and other underprivileged people,

holding the bag.

[4:15]

Mr. Chairman, as I have done in question period before, I want to

question his decision to allocate in excess of $4 million for capital

expansion of new liquor stores and enlargements of others. His own

ministry has said that this year, and in

part last year, has seen

declining sales volume. That declining revenue is not necessarily

because of price increases largely due to tax increases brought by this

government and by the federal government in Ottawa, but the fact is

there has been declining sales volume. I'm unaware, Mr. Chairman, of

any great consumer or neighbourhood or community demand out there for

more liquor stores or expanded liquor store facilities. Remember, we're

not taking about normal renovation or maintenance; we're talking about

new and expanded liquor store facilities in this province. It's

absolutely inappropriate, Mr. Chairman, in a time of restraint, in a

time of cutbacks and declining sales. You certainly don't see the

private sector expanding their marketing facilities at a time when

their sales are declining; they hold the line. They might make plans

for future expansion, but they don't go out and invest that money.

Mr. Chairman, when you consider the deficit that this province is

running, when you consider the amount of money the province is

borrowing through its Crown corporations and other agencies, the

expenditure of $4 million-plus on expanded liquor-marketing facilities

simply makes no sense at all. Of course, if one really wanted to

moralize about it, we could connect it with the abandonment of the

Alcohol and Drug Commission and the insignificant amounts that the

government spends regarding the evils that some people perpetrate on

themselves and the rest of society through the abuse of alcohol. We

know that the government is the only wholesaler and also the major

retailer of alcoholic beverages in this province.

Further, Mr. Chairman, I would like to ask the minister if he could

release or at least comment on the Goldberg report on beer prices; I

understand it's been available to him for at least 12 months, perhaps

longer. Since the price of beer has been deregulated, what could there

possibly be in the Goldberg report that could prove embarrassing to the

minister or to the general public's interest? Surely we know that the

percapita consumption of beer has, by and large, been declining in this

province and other provinces, in part due to price increases — a real

increase in the price of beer over the last few years. Why cannot the

minister release this information, a non-political report that was put

out by a fairly distinguished academic in the business administration

field? As the minister himself said in his opening remarks, he is very

proud of the B.C. wine industry and a very strong supporter of that

industry, and certainly the gain in per-capita consumption of wine in

this province has clearly been, in part at least, at the expense of the

brewing industry. Surely the minister can make some of this information

available to the public.

[ Page 2851 ]

During the previous 12 months the minister has suspended the

publication of enforcement reports. He talked about the prosecutions

which his ministry took; he did not talk about whether or not they were

successful, and he did not talk about the fact that it's very difficult

for the general public to find out about those prosecutions. Once

again, as with the consumer complaint department, the minister said at

the time that he did not want to stigmatize all business with reports

on a few businesses that were irresponsible. Once again, Mr. Chairman,

most business people in a certain area — let's say automotive retailing

— do not want to be stigmatized. The overwhelming majority of

responsible people do not want to be stigmatized by the fact that there

may be a few people out there who are not responsible. Certainly the

publication of people who have been convicted by the courts of this

land — convicted not by the government but by the courts — of a

violation of federal and provincial statutes is a major factor in

bringing to the public's attention that most people in a particular

segment of the retail economy are good operators, I would think that

the minister should take that into account and let people know about

these enforcement situations.

Mr. Chairman, I want to talk in greater length about what the

minister is doing, because he didn't go into great detail about the new

Securities Act that was originally tabled as a sort of discussion paper

or legislative White Paper by his predecessor. A new, updated and

modernized Securities Act for the benefit of the economy of the

province of B.C. has been talked about by this minister and his

predecessor and his predecessor. I don't recall, but they were probably

talked about by their predecessors in the New Democratic government and

the predecessors in the W.A.C. Bennett government. Clearly, I think,

everyone in this chamber and certainly the entire investment community,

the brokerage community out there, would agree that we need not only an

updated superintendent of brokers' office but an updated act. It's been

a year and a half now since the last tabling, and perhaps the minister

has had sufficient time to gather information and have discussions with

the business community regarding that and bring that action in, because

a new, modernized and updated act that was supported by the investment

and brokerage community in this province, even though it would be very

lengthy and very complex, in my view would probably be given speedy

passage by this chamber if the minister would take that kind of

initiative.

Mr. Chairman, perhaps the minister can comment on the 1981 Stanley

report, which talked about the tremendous need to improve staffing of

the superintendent of brokers' office, not to improve the quality of

the staff but to improve the numbers there so that they could do the

job with which they have been charged by legislation passed by this

chamber and by the policies as laid down by the minister. The minister

did talk about some mechanical improvements to the operations in the

office, but he did not talk about meeting the time and quality

requirements that the brokerage industry in this province say they need

in order to compete properly for investment capital with other

financial markets in this country. In fact, the government seems to

have no sense of urgency about this and does not seem to want to assist

the Vancouver Stock Exchange to move away from its reputation as a

high-risk market that deals primarily in gold, silver and hot air. It's

our view on this side of the House that the VSE badly needs a new act —

it has for a number of years — and that we have missed a number of

business opportunities in this province because we have only what is

seen as a junior market. I'll be returning to that in greater detail.

Mr. Chairman, some time ago — back in 1978 — one of the minister's

predecessors, the former member for Kamloops, Rafe Mair, circulated a

White Paper regarding a new cooperative act. He thought it was a good

idea. There was generally favourable comment outside the chamber, but

nothing more has been heard of it since that time. We've been through

two ministers. If the minister has no interest in updating this act,

that's fine; at least he should let us know, because this has been

hanging fire for some time.

I am not going to deal at length with the rental housing situation

in this province, but I would like to note that the entire expenditure

for the rentalsman's office during the most recent fiscal year that we

have on record.... If you divided that by the number of suites and

rental units of all sorts, you would come up with a cost of slightly

less than $7.50 per unit. Mr. Chairman, the minister has, since last

April.... I don't know exactly what he calls the position, but he has

created a position called "user pay director." We're wondering if the

minister, because of his desire to downsize government and reduce the

tax burden, had ever considered having the rental industry, shall we

say, pay for the operations of its own rentalsman's office. It would

seem to me that we're looking at about 63 cents a month per rental

unit, which is hardly an imposition on either landlord or tenant in the

province in order to maintain this service. It is generally conceded it

has been operated with a great saving compared to the same operation if

it were looked after through the courts of this province. We'll leave

that part.

I would like to go into greater length on the need for a new

Securities Act in this province. His immediate predecessor, the former

member for Vancouver South, introduced and circulated a bill with a

certain amount of smoke and mirrors and ballyhoo, but it was generally

well received on this side of the House. Certainly it was generally

well received by the brokerage community. The proposed bill was of

great complexity and length. As the former minister said, in his view

it was of profound importance to the economy. It would boost the

economic activity on the Vancouver market and the reputation of the

Vancouver exchange. We needed an appropriate, modernized legislative

framework that would safeguard the investor and enable the Vancouver

exchange to compete for listings and market capital with markets in

Alberta, Toronto and Montreal.

It is my view that it is not just high time but way overdue that

B.C. took its rightful place in Canada's financial markets. The fact

that we have not done so has injured our provincial pride. Resource and

manufacturing majors located here such as MacMillan-Bloedel and

Cominco, which are based in Vancouver, including their head offices and

chief executive officers — are hardly ever traded on the industrial

board in Vancouver, certainly in no significant way.

I would ask why the minister has not proceeded. Maybe he's intending

to, but at least he could explain to us why he has not proceeded. How

much consultation and feedback does he need? As we mentioned earlier,

this has been going on for years. In the meantime, all kinds of

economic development in this province has passed us by. If we ever

needed economic development, it certainly is right now.

[4:30]

From my discussions with the brokerage industry, they really do want

revamped rules. Perhaps the minister could tell us some concerns that

he has. Or perhaps he has been lobbied

[ Page 2852 ]

negatively by somebody. Maybe he could tell us who

and why. Certainly I'm not suggesting that he bring in the proposed

bill from 1982 carte blanche, but modifications to suit his own

feelings and views of the changing situation since 1982 would be in

order.

The first and most obvious benefit that we would have from a new

Securities Act along the lines that I'm suggesting is that there would

certainly be greater knowledge for investors in the Vancouver market.

When we go through an unfortunate crash, as we've seen over the last

month or so on the Vancouver exchange — and I don't blame that on the

operation of the Vancouver market — there would certainly be fewer

investment losses if investors had better ongoing information. If they

have fewer losses, investors have more funds and, perhaps most

important, more confidence available to them for future or even

immediate reinvestment on that exchange — rather than taking their

depleted investment funds and putting them on some other exchange

because they no longer have confidence and trust in the future of their

money on the Vancouver market. So that's the first and immediate

benefit, I believe, of a revamped and updated and modernized Securities

Act in this province.

Going more immediately to his administrative responsibilities

regarding the superintendent of brokers office — and it's not directly

under that legislation, but it's related to it because it's all part of

the same problem — we find that there is little or no increase in the

staff of that office. But, as I mentioned earlier, the minister's own

personal staff is up by 30 percent. When his ministry has been

downsized, we on this side of the House have to wonder where the heck

his priorities are. We all know why the superintendent of brokers

office is important. Any company wanting to list on the Vancouver

exchange must go with a prospectus to the superintendent of brokers

office, must have the right kind of information, and the staff at that

office must have the time and ability to make a proper analysis of that

information before they can approve that prospectus. Unfortunately,

that takes too much time with the Vancouver superintendent of brokers

office. That's no criticism of the superintendent of brokers or any of

his staff; they do the best they can with a limited number of resources

and personnel.

The point I'm making is that in order to provide the proper service

they are mandated to, both by this Legislature and by the minister's

policies, they need greater resources at hand. If they do an incomplete

or too-slow job, investors, when the prospectus is approved and the

listing does go on the board.... First, there is some question

investors have as to the adequacy of the analysis that's been given by

the superintendent of brokers office. Perhaps even more important, the

companies that wish the listings get impatient waiting for something to

happen in Vancouver, so they go to some other market, probably Toronto.

We have lost listings of important junior companies and important

growth stocks from the Vancouver exchange simply because the

superintendent of brokers office has taken too long to analyze and

approve a prospectus. If the minister were prepared to make the kind of

increased staffing available to the superintendent of brokers that he

has made available to himself and his personal staff in his office, it

would be of tremendous benefit to the investment community, the

brokerage community and the economy of B.C. In addition to the factors

that I've just been mentioning, we do know that Toronto brokers have

been aggressively going after — because they know this situation exists

in British Columbia — what rightfully should be our junior companies,

and even some of our not-so-junior companies. And all too often they've

been getting them. The companies that wish to go on the Vancouver board

simply can't get on the board fast enough to satisfy their backers.

A further area where there have been no additions is this. As we

know, the Vancouver exchange has traditionally been, and still is,

primarily concerned with precious metals — too often gold and silver —

and that's one of the basic reasons why we see the low values on the

Vancouver exchange right now: gold, silver and hot air, as some people

would say. We'll deal with the gold and silver here. We have heard

discussions by many people on the government side and on this side as

well.... Certainly, the first member for Vancouver–Point Grey (Hon. Mr.

McGeer) and the member for South Peace River (Hon. Mr. Phillips) have

talked about how we need a high-tech revolution in this province, and

how we need to take advantage of it. Well, I am advised that there is

not a single person available to the office of the superintendent of

brokers who has any sort of investment analysis or understanding of

high-tech industry. So if we are to attract any — even junior —

companies in this very important field in British Columbia to a listing

on the Vancouver exchange, we're going to have to have some people

there who can deal with the new economic reality. But the minister in

his administrative responsibility, in my view, has not even thought

about this. He has listened to speeches by his colleagues on the

treasury benches; he's probably given them himself, talking about the

need for a high-tech industry in British Columbia. But he has not even

made the first move as far as the superintendent of brokers office to

see that when a company goes there with a prospectus for analysis for a

listing, there's anyone there with the experience and knowledge to deal

in a credible way with that particular application. Once again, we have

lost high-tech listings and junior companies to the Toronto market.

Quite frankly, the minister is simply not meeting the challenge

regarding the brokerage and investment community, which is under his

direct ministerial responsibility. We have seen opportunities slip

away, and this is only one other economic area in which B.C. Is seen as

a laughingstock in too many parts of Canada, and in more and more cases

it's blamed on Social Credit. I don't care whether they blame it on

Social Credit or not, but I'm a resident and taxpayer of this province,

and I don't like being laughed and snickered at by investors and other

communities in Canada. They're saying: "You guys are missing the boat.

You don't understand what's happening all around you."

What we need is an administration in Vancouver that is keyed to

attracting venture capital. That is what the Vancouver Stock Exchange

has been about, and I would like to see it do some different things. I

think the government can take some leadership in that, and I will get

to that in a minute or so. But at least the government could try to

continue to do a job in the area that we have traditionally been active

in, and that is in attracting venture capital — in any sector.

Interjection.

MR. D'ARCY: Do we have to have some intervening business? I

don't know how much more we have, but could I try, Mr. Chairman, to ask

leave to complete my remarks here?

MR. CHAIRMAN: I believe under the rules....

[ Page 2853 ]

MR. D'ARCY: Ten minutes at the most.

MR. CHAIRMAN: I was just going to suggest, hon. member, that....

MR. HOWARD: This is very interesting. I'd like to hear more of it.

MR. CHAIRMAN: Did the minister want to respond to some of the remarks made so far?

HON. MR. HEWITT: Mr. Chairman, the member for Skeena has made

a comment, and I gather that's the intervention in the debate. However,

I'll gladly respond, or I'll take my place and let the member for

Rossland-Trail continue with his questioning if he has a line he wants

to pursue. I certainly wouldn't want to interrupt him if he wants to

proceed at this time. Maybe he could nod and give me an indication.

Would you like to proceed?

MR. D'ARCY: Mr. Chairman, I was discussing the fact that the

province has simply not met the high-tech challenge as far as the

brokerage community is concerned — although I don't think it's too late

— in the main, because the minister has simply not authorized the

superintendent of brokers to hire staff with the correct specialized

qualifications. That is no reflection on the existing staff there. I'm

simply saying that there are specialized qualifications which have not

been needed until recently in the superintendent of brokers office, but

they're needed now. We would like the minister to broaden the abilities

they have to deal with those specific things.

While some of the major resource corporations, especially those ones

operating in British Columbia, are listed in Vancouver, our industrial

board is a joke. Again, that's no reflection on the exchange. It's

simply that the investors in major blocks of capital, dealing on what

would be the industrial board here, are in fact not using it. They're

dealing with the industrial boards in other exchanges — notably

Toronto. Other jurisdictions, both to the south of us in the United

States and in Canada, have met this problem of being saddled with only

the very junior resource companies, even though there was an industrial

board, by the government investing its trusteed funds through the

industrial board in its local exchange.

I'm not suggesting for a moment that the government alter its

investment policies in terms of what it buys. When I talk about

trusteed funds, I mean the ICBC investment funds, workers' compensation

and all of the various pension funds that the government has

jurisdiction over. I am not suggesting that the government make

different investment decisions. I'm simply saying that they channel

those investments through the industrial board of the Vancouver

exchange rather than simply assuming that they should go outside the

province in order to do this.

The first and most obvious benefit is that the brokerage fees, which

run anywhere from I to 3 percent, would accrue to the province. Since

that would be our gain and someone else's loss, it would in fact mean

an increase in net revenue of economic activity to the province of

somewhere between 2 and 6 percent of the brokerage fees on all of the

funds under the government's jurisdiction. Of course, it wouldn't

happen immediately, because it would take a while to build up, but at

least the move could be made. As I say, this has been successfully done

in other jurisdictions, both to the south and to the east of us, and

there's absolutely no reason why it couldn't and shouldn't be done in

British Columbia. That 2 to 6 percent, with all the attendant ripple

and multiplier effects, would have a great effect on economic activity

in British Columbia.

Of course, we know that the minister may say: "Oh, the private

sector wouldn't cooperate." The experience elsewhere has been that

because there are such large amounts of money involved, the private

sector has cooperated. The costs to the B.C. government, in this case,

or the agencies under the control of the B.C. government, would be no

higher. As we all know, where major blocks of money go, whether they be

public or private, private investment capital and trading tends to

follow. This is not just theory; it has happened in practice in other

jurisdictions. The government could prime the pump at no cost to itself

and gain a great deal of credibility and support from people in the

province who would be delighted to see the government, or any

government, take action to invest its trusteed funds through investment

agencies and brokerages right here in the province. As I say, there is

no attendant risk and no attendant cost. There might be some phase-in

period, and there might be a period in which not all of the investments

would be accepted at that rate, but it would come slowly but surely

because that is exactly what has happened with other exchanges in other

parts of the country — in Alberta, Quebec and to the south of us.

[4:45]

What we would see, then, is that the Vancouver industrial board, instead of

being, as I said, something of a joke at this point, with no volume at all,

would have real bids, real offers and real business, and the government could

take the credit for starting that action. Once started, the private sector would

sustain it. Certainly another major benefit is that overall we would develop

major liquidity on the Vancouver Exchange. We have to make the initial effort,

because it's not going to happen by itself.

I don't want to belabour these points. Hopefully the minister will

address them. The three basic needs of not only a revamped Securities

Act but a fresh new look at his policies and resources that he makes

available to the superintendent of brokers are: firstly, to protect

investors and investment confidence in a time of downturn on the

Vancouver market, such as we have now; secondly, to protect us from

losing investment to the Toronto exchange and other exchanges; and,

thirdly, to use the trusteed funds as a major tool at no cost or risk

to ourselves.

There is one other area I want to talk about. Perhaps the minister

could comment to the committee as to whether or not he has considered

bringing in simple laws to control commodity trading in this province.

I am sure he knows that commodity trading in B.C., when done by fast

operators and boiler-room operations, is totally chaotic. There is

virtually nothing illegal in the commodity trading business in British

Columbia. The stock market has rules. There are rules in this province

and in this country relating to chartered banks, credit unions and

trust companies. There are rules to protect the credibility and

operation of the real estate industry. There are other rules in the

public sector which do not for the most part overregulate. But an area

where there is no control whatsoever and no regulation is the commodity

exchange.

[ Page 2854 ]

[Mr. Strachan in the chair.]

Brokerage firms voluntarily follow Chicago and eastern regulations.

There is no problem with them. The problem, as I said, is with the

boiler room traders who, in fact, have deprived many innocent and small

investors, by their crazy operations, of a major part of their savings.

I'm not suggesting that the minister bring in regulations that prevent

small companies from getting into the field. We all know that in many

cases in this country, and in other jurisdictions, under the excuse of

saying, "Well, we've got to have regulations," they.... In fact, the

major function of regulation in many of these areas is to protect the

interests of the large concerns — which in Canada are the chartered

banks — and to prevent small companies from getting in on the action.

I don't want to move in that direction. I simply want to see some

rules put in place, similar to the rules that we're looking and asking

for and the brokerage community is asking for, that apply to the stock

exchanges and the brokerage companies to control — I don't like the

word "control," nor do I like the word "regulate" — and to protect the

investor from fast operators in the commodity trading area of this

province.

Once again, if you have these kinds of things going on in the

province, the entire investment community gets a bad reputation. Once

again, it frightens away legitimate investment, and it means that other

jurisdictions and investors in other jurisdictions simply don't take us

seriously in this province. We need to be taken seriously. We want to

see a strong investment and brokerage community in British Columbia,

and we want to take our rightful place, considering the tremendous

resources that we have in this province, in the financial markets of

Canada.

HON. MR. HEWITT: In regard to questions raised, I compliment

the member for setting them out in detail and raising, I think, issues

that are fair at this particular time — as an Opposition member wanting

answers. As I say, I compliment the member on how he has put them

today, very straightforwardly, and they're ones that deal with the

technical operations of the ministry.

Considering the minister's office, there is an increase there. You

can appreciate that when I came as minister in August 1982, I brought

with me the additional cost, you might say, of an executive assistant

dealing with the Insurance Corporation of British Columbia. That, of

course, has increased the cost of operations in my ministry office.

Also, though I don't have the exact dollar figures here, for a time my

predecessor had staff members seconded from the ministry to work in his

office. As a result, although the staff numbers don't change, the cost

is now, in my opinion, properly allocated to the minister's office.

The member raised the question of debt counsellors. I can advise him

that the debt counsellors are still in existence. They have not been

discontinued; that aspect of the program is not being discontinued. It

was the consumer advisory service that we had.... But the debt

counsellors dealing with problems under the debtors' assistance

program, etc., are still in place and still operating. They are in the

budget. The member was concerned that they had gone.

The liquor distribution branch. I believe the member mentioned $4

million with regard to capital expenditures for increasing government

liquor outlets. I'm sure the member is aware that we're talking about

the liquor distribution branch. We're not talking about taxpayers'

dollars. It is a marketing branch, one that distributes and markets

alcoholic beverages at the retail level. We are driven in that area by

providing service to a market. If it's a case of either upgrading a

store because it is not of sufficient size to serve the consumer or

putting a new store in an area that requires a store because of the

market in that area, we are no different in liquor distribution than

the private sector in that regard, whether it be a new Safeway store or

a new Woolco store or whatever. Those are management decisions to serve

a market area at the retail level, and it's not taxpayers' dollars;

it's a capital expenditure which is amortized over a period of time and

which, of course, provides a retail outlet to the consumer. We have to

recognize from time to time that we must either upgrade, renovate or

acquire new accommodation to provide service to the consumer. It's not

a loss to the taxpayer — that's the point I want to make. It is not

taxpayers' dollars when you're talking liquor distribution branch; it's

the administration of a distribution and retail service.

The Goldberg report deals with deregulation. The member was

concerned about it not being released. I appreciate his comments that

because of, I guess it's fair to say, an election in May 1983, plus a

restraint program, budgeting, legislation, etc., that report has not

been dealt with. I would certainly take the member's remarks and

consider when would be the opportune time that we could release that

report. There's no reason that it shouldn't be released. It's