1987 Legislative Session: 1st Session, 34th 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)

THURSDAY, MAY 21, 1987

Afternoon Sitting

[ Page

1275 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 1275

Oral Questions

Government policy on gaming. Mr. Sihota –– 1275

Ms. Edwards

Mr. Rose

Mr. Barnes

Delisting of International Tillex Enterprises Ltd. Mr. Sihota –– 1276

Lyell Island logging. Mr. Kempf –– 1277

Motions –– 1277

Oral Questions

Prince George mortality rate. Hon. Mr. Dueck replies –– 1278

Presenting Reports –– 1278

Property Purchase Tax Act (Bill 17). Second reading

Mr. Stupich –– 1278

Mr. Rose –– 1280

Hon. Mr. Couvelier –– 1281

Division –– 1282

Committee of Supply: Ministry of Attorney-General estimates. (Hon. B.R. Smith)

On vote 12: minister's office –– 1283

Mr. Cashore

Mr. Sihota

Mr. Barnes

Mr. Miller

Ms. Edwards

Mrs. Boone

Mr. Blencoe

The House met at 2:07 p.m.

HON. MR. STRACHAN :

Mr. Speaker, probably a lot of the new members don't know that all of

us in this room and many hundreds of thousands of elected people — such

as we are — from throughout the world belong to the Commonwealth

Parliamentary Association. It's interesting to note that over one

billion citizens in the world are represented by elected members who

are members of the Commonwealth Parliamentary Association. So it's an

exclusive but rather significant club.

We're pleased to

have with us, in the precincts today, the former Commonwealth

Parliamentary Association librarian and chief information officer from

Westminster, the mother of parliament. Would you please welcome Mrs.

Miriam Alman.

MR. ROSE : I wonder if I could add my

word of welcome to our visitor from Great Britain. I personally, with

delegations studying rules and regulations and changes in parliamentary

reform, have been hosted by this office, which is attached to

Westminster, and as a parliamentarian have for years now had a great

deal of assistance through the various conferences that this

organization sponsors throughout the Commonwealth world.

HON. MR. COUVELIER :

In the galleries this afternoon is a very dear acquaintance of mine and

a gentleman whom I would characterize as a good friend of British

Columbia. I'm referring to Mr. Eugene Nesmith, president and chief

executive officer of the Hongkong Bank of Canada. For those members of

the House who might remember the difficulties surrounding one of our

premier financial institutions about six or seven months ago, it became

very evident to me, as part of the government negotiating team, that

around the table discussing British Columbia affairs were many

individuals who had the province's interests at heart. Mr. Eugene

Nesmith was one of them.

I refrained from describing Gene

as a friend of government; I didn't want to offend him. He is a friend

of British Columbia, and I ask the House to welcome him to the House

this afternoon.

HON. B.R. SMITH : Today in the

diplomatic gallery, if I may call it that, is the consul-general of the

Polish People's Republic, Mr. Grodecki, who is a lawyer. He operates on

behalf of his country, Poland, and he is here today visiting with

government officials. I'd ask the House to make Mr. Grodecki welcome.

MR. DIRKS :

In the public gallery today, from the great constituency of

Nelson–Creston, I have the pleasure to introduce Valerie and Bill

Sutherland. Accompanying them is Flo Mackay from Scotland, a retired

headmaster. Would the House please welcome them.

MRS. GRAN : Mr. Speaker, I would like to introduce to the House today,

in your gallery, the entire Langley constituency Social Credit executive. If

the House would bear with me — this is their first visit in this term — I would

like to name them: Mrs. Fern Wilson, Mrs. Wendy Wallace, Mrs. Ida Fallowfield,

Mr. Ken Thompson, Mr. and Mrs. Mike Radakovich, Mr. and Mrs. George Dyck, Mr.

and Mrs. Jim Greenwood, Mr. Harry Fassbender, Mark Tremblett, Kathy Mason, Mr.

and Mrs. Ralph Snell and Mr. Steven Dornian. Would the House please make them

welcome.

HON. MR. RICHMOND :

In the precincts today we have 60 students, teachers and parents from

the Duniway elementary school in Portland, Oregon. They're here as a

class, studying our country and our province, and I would like the

House to make them welcome.

MR. MERCIER : Mr.

Speaker, today in the gallery are David Paterson, a chartered

accountant and chairman of the government affairs committee of the

Institute of Chartered Accountants of B.C., and a number of members of

that committee. I would ask the House to make them welcome.

MR. CHALMERS :

This afternoon in your gallery is a gentleman from the constituency of

Okanagan South to whom I would like to ask everybody to give a warm

welcome; a man who has a distinguished record of service to the

community, being involved in many organizations such as the hospital

board and others. I'd ask that you give a warm welcome to Mr. Jim

Stewart, please.

Hon. Mr. Veitch tabled the report for the Ministry of Consumer and Corporate Affairs for the period ending March 31, 1986.

Oral Questions

GOVERNMENT POLICY ON GAMING

MR. SIHOTA :

Mr. Speaker, a question to the Attorney-General. The question is this:

given the claim by the Attorney-General yesterday that the government

has no policy on gambling until the report of the commission comes in,

and given now the evident divisions in his own caucus on the wisdom of

expanded gambling, would the Attorney-General advise this House as to

his own views on the question of expanded gaming in this province?

HON. B.R. SMITH :

I don't think it's fair to characterize my comments as saying that the

government has no policy on gambling. The member opposite has tried on

a number of occasions to construct a policy for us, but our policy on

gaming I think is well known, and that is that we favour very limited

gaming in this province. The only gaming that is permitted is under

government supervision, save for that done by recognized charities in

the casino and bingo field, and we do not favour an expansion of gaming

at this time. We have set up an independent Gaming Commission which

will be making recommendations to us later in the year, and those

recommendations will be made public and there will be public debate.

But we have taken a very limited and extremely conservative view of

gaming in this government, and we will continue to do so.

[2:15]

MS. EDWARDS :

Mr. Speaker, a supplementary to the Attorney-General. The charities

first lost lottery revenues to Expo debts. Now they've lost revenue

from the at-sea casinos

[ Page 1276 ]

B.C. Steamships. What assurance can the Attorney-General offer

charities that they won't next be squeezed out of the on-land casino

operations by for-profit gambling?

HON. B.R. SMITH :

Well, everybody thinks that they lose revenues due to someone else. I

can't imagine that there is a loss of revenues to anyone in that area

as a result of gaming devices on a ship, which are played by 90 percent

U. S. visitors. So I completely disagree with that assumption in your

question.

As for the loss of money that charities have

received from gaming, it was that very reason that prompted the

government prior to setting up a Gaming Commission to change some of

the rules which would ensure that a clear 50 percent of those proceeds

from casino gaming would go to the charities. We believe that that

policy will work and will restore revenues to the charities. We are

very much in favour of charities having a source of revenue of this

kind, and making sure that the money goes to them and isn't just taken

by others.

MS. EDWARDS : I wonder if we could just

dwell a bit on terms. Is it policy that there should be no for-profit

public sector gambling in B.C.?

HON. B.R. SMITH : No public sector gaming does take place in B.C. for profit, save and except . . .

AN HON. MEMBER : Oh, oh!

HON. B.R. SMITH : Now just a minute. Let the poor, beleaguered questioner have his day.

. . . save and except the operation on the Princess Marguerite and Vancouver

Island Princess , number one; and number two, the lotteries branch of the government,

which produces some $140 million in revenue. I will of course he

absolutely delighted to read, hon. member, the charities in your constituency

that are beneficiaries from that and all other sources.

MR. SPEAKER : I just might mention, before the next question, that we're into the third question on this issue. I

understand that the minister will be before this House this afternoon

in estimates. I just wonder if it's fair to other members to continue

in this, when his estimates are there.

MR. ROSE : I

understand your concern, Mr. Speaker. My question is really a new

question, but related to this issue. It's very controversial, and the

views on this subject cross party lines. Misgivings have been expressed

by the first member for Boundary–Similkameen (Mr. Hewitt) and others —

the member for Yale–Lillooet (Mr. Rabbitt) yesterday. I'd like to ask

the House Leader of the opposition — of the government, soon to be

opposition — whether or not he has decided to allow any legislation

dealing with any further expansion, or the justification or

legalization of the current practices that come before this House . . .

. Will a free vote be allowed?

HON. MR. STRACHAN : I hate to see the opposition take so much time in question period, because it's their question period.

The only legislation that I would initiate, Mr. Member, would be legislation from the Ministry of Environment and Parks.

MR. BARNES :

Supplementary to the Attorney-General. Notwithstanding the

Attorney-General's assurances that there will be no proliferation of

gambling outside government control, the Premier has said in the past

that all government activities and operations will be subject to sale

under the privatization policies of this government. What assurances

does the Attorney-General give this House that at some time in the

future the Gaming Commission will not itself become available under

that privatization program?

HON. B.R. SMITH : Would

you buy a commission that had to try to reach some kind of consensus on

an issue like that in this province that there isn't even consensus

over here on?

DELISTING OF INTERNATIONAL

TILLEX ENTERPRISES LTD.

MR. SIHOTA :

A question to the Minister of Finance, whom I'd like to welcome back to

the House. During the course of the investigation into the Tillex

affair it has now become a matter of public record that one of the main

promoters of the Tillex scheme was an ex-convict by the name of Sam

Ford, who was convicted in 1977 of wire fraud and perjury. A simple

scratching of the surface would have revealed that information. Has the

minister determined why it was that that information was not secured by

the VSE and why it was not forwarded to investors for their protection

during the course of the Tillex matter?

HON. MR. COUVELIER :

Mr. Speaker, the questioner didn't give me any dates in terms of when

this individual might have been associated with this venture. In the

absence of that information, of course, I have some trouble dealing

with it extemporaneously. In any event, I'm happy to take the question

on notice.

MR. SIHOTA : I'll provide the information

right now to the minister. Mr. Ford was involved right from the outset

with the promotion of Tillex. Accordingly, would the minister now

answer the question?

MR. SPEAKER : I think, hon. member, the minister took the question as notice. If you have a new question . . . .

MR. SIHOTA :

A new question, then. The minister is aware that there is a

self-regulating committee that determines whether or not brokers or

brokerage houses should be fined in instances like the Tillex affair.

In the case of the Vancouver Stock Exchange, the principals of the

brokerage houses themselves sit on the committee that passes judgment

on themselves and their own brokers. In light of what happened in the

Tillex affair, what regulatory changes is the minister reviewing which

will ensure that this potential for conflict is eliminated?

HON. MR. COUVELIER :

I can agree with the questioner that there's an ipso facto conflict of

interest. Dealing with the question of the apparent disparity on the

penalties imposed on the respective participants, it's evident, as a

result of the examination I had in the matter and questioning the staff

involved with monitoring that operation, that there were varying

degrees of complicity involved, and those varying degrees were

reflected in the penalties imposed.

[ Page

1277 ]

I do understand that, as a consequence of that affair, there have been continuing

discussions, which are still going on, in terms of regulatory devices that might

be put in place to minimize the risk that they may reoccur; but at the same

time, I think we all must realize that no stock exchange anywhere in the world

is without its problems in terms of abuse. The New York Stock Exchange attracted

much media attention a few months back with a well-known case.

the fact of the matter is that I am not aware of any legislature

anywhere in the world that can legislate honesty. That is something

that we have to monitor and penalize when we see its absence. But to

suggest that it is within government's power or authority to do

anything in a meaningful way to ensure that dishonesty is totally

eliminated is absolutely ridiculous, and I trust that the questioner

himself would be the first to concede that.

MR. SIHOTA :

The minister clearly does not have the facts at hand. In the last 45

cases investigated, in only three instances have these brokerage houses

been fined. In fact, in many of these, the principals in the brokerage

houses are famous bagmen for the political party that the minister

represents.

Has the minister now decided to put the

interests of the small investors ahead of protecting the interests of

those friends of government?

HON. MR. COUVELIER : Mr.

Speaker, the questioner does not make it clear whether he finds

offensive the title "bagman" or the party that the person was alleged

to be raising money for. We should first of all define what the offence

is.

In any event, to suggest that these kinds of

relationships have any impact in terms of how violations might be

treated I find offensive in the extreme; offensive not only to the

House, not only to the government and the minister responsible, but

most importantly probably to those innocent staff members who find

themselves in a position of being held up to ridicule and abuse and

unable to present any defence. I think that is beneath the dignity of

any member of this Legislature.

Mr. Speaker, if there are

positive suggestions that might be made, that might assist in dealing

with these kinds of situations, we would be delighted to hear them. But

let me assure the House and the questioner that serious efforts are

ongoing, not only with the staff of the securities commission but also

the staff of the Vancouver Stock Exchange, to address the concerns

exhibited by the series of questions we have just heard.

MR. SIHOTA :

Mr. Speaker, the minister would have us believe that there is no

connection or interplay between these bagmen of that political party

and ministerial activities.

Would the minister confirm that

prior to the dismissal of Miss Bodkin he received representations from

such individuals as Mr. Brown, head of Canarim?

HON. MR. COUVELIER : When the Premier appointed his cabinet and held

his first caucus meeting, one of the first points he made was that this is an

open government. We welcome participation in the process of governance not only

from our own members and supporters but from all the citizens of the province.

To suggest that I, as a minister responsible for a function, should deny a hearing

to anyone who asks for it, because of his name or his particular business connection,

I find somewhat ridiculous. We are elected to represent all the people of this

province. I have met not only with key principals of the Vancouver Stock Exchange,

but key principals of every industry with which my ministry is involved. I'm

quite happy to provide a list of those individuals I've met so far in the

brief six months we've been in office. I can tell you that it would exceed

many hundreds.

MR. KEMPF : I'd like to table a document of which I spoke last week in question period.

Leave granted.

LYELL ISLAND LOGGING

MR. KEMPF :

I have a question for the Minister of Forests and Lands, Withdrawals

for non-industrial use of forest lands in Washington and Oregon have

reduced the annual allowable cut in those jurisdictions by up to 35

percent. In British Columbia the potential of various land claims and

withdrawals from resource use may appear insignificant on an individual

basis, but collectively they're disastrous. In fact, they could be

proportionately more serious than those in Washington and Oregon. In

light of this, my question is: has the minister decided to issue

further cutting permits on Lyell Island — emphasizing the fact that

logging should continue on Lyell as it has been carried out there for

over 50 years?

HON. MR. PARKER : The answer to the question is no.

Motions

MR. ROSE :

I believe the appropriate standing order is 69(2), and I'd like leave

of the House to move a motion substituting a couple of names on a

standing committee.

Leave granted.

Interjection.

MR. ROSE :

It's resolution 66. Is that agreed? I move resolution 66, which says,

under the provisions of standing order 69(2), that Messrs. Stupich and

Lovick be substituted for Messrs. Rose and Williams on the Select

Standing Committee on Standing Orders, Private Bills and Members'

Services.

HON. MR. STRACHAN : The government has no

reason not to approve of the motion by the hon. opposition House

Leader. I'm going to miss him at the Old Bailey, I can assure you of

that, but outside of that . . . .

MR. ROSE : Old Bailiff.

HON. MR. STRACHAN :

Old Bailiff, is that the place? I could never remember, it was always

so much fun. So we will agree with this resolution, Mr. Speaker, but

with regrets.

Motion approved.

Hon. Mr. Parker tabled replies to questions on May 1 and May 12.

[ Page 1278 ]

PRINCE GEORGE MORTALITY RATE

HON. MR. DUECK :

Mr. Speaker, I would like to respond to a question asked me yesterday

in the House. It was from the member for Prince George North (Mrs.

Boone), who asked a question about high death rate in the Prince George

area. The medical health officer for the northern interior health unit

reviewed available health unit data and major causes of death for the

union board of health submission to the liquor policy review commission

hearing in Prince George.

The findings he obtained require

his further review to better define the problems, determine the

causative factors and recommend means of prevention which can be

implemented in the community. I would like to say that it is under

review further, but at the present time the figures that were quoted

are perhaps correct.

[2:30]

Presenting Reports

Mr.

Crandall, Chairman of the Select Standing Committee on Standing Orders,

Private Bills and Members' Services, presented a report, which was read

as follows and received:

"Report No. 2, May 21, 1987:

"Mr.

Speaker, your Select Standing Committee on Standing Orders, Private

Bills and Members' Services begs leave to report as follows:

"That

the

preamble to Bill PR405, intituled Vancouver Museum Foundation Act,

has been proved and the bill ordered to be reported, as amended in

committee, and to proceed to second reading.

"All of which is respectfully submitted. D. Crandall, Chairman."

MR. CRANDALL : I move that the rules be suspended and the report adopted.

Motion approved.

Orders of the Day

HON. MR. STRACHAN : Mr. Speaker, I call adjourned debate on second reading of Bill 17.

PROPERTY PURCHASE TAX ACT

(continued)

MR. STUPICH :

Mr. Speaker, as the Leader of the Opposition said in his opening

remarks, the opposition will be voting against this legislation. I'd

like to advance just a few more thoughts on the subject.

spent all morning discussing six bills which in total will positively

affect the provincial government revenue by some $37.1 million, but at

this point we're getting into something that is much more important

from the point of view of the Minister of Finance. With this one bill

alone we're doing almost four times as much, from the point of view of

revenue, as we did all morning. The revenue from this source alone is

expected to be $140 million.

It's a new tax, Mr. Speaker. That gives me some cause for concern. I

don't intend to talk about the sales tax legislation at this time at

all, except to ask the question which I'll be asking several times, I

would think, unless the first answer convinces me. The minister is

giving up one point from a source of revenue that to my knowledge

wasn't really attracting any negative attention — I haven't heard one

comment about it for some years — and is exchanging that one point for

a brand-new tax. It makes me wonder whether or not he did that simply

so that he could say he had effected a tax reduction and thereby ease

the blow of a new tax being imposed, with the thought further down the

road that the rate of tax on property purchases might be increased, and

indeed the sales tax itself might be increased. Then he's not doing

anything new.

really, from his point of view, he said that what he was doing was

replacing ad valorem fees with the property purchase tax — and just by

the by and by the way, in the course of changing one thing for another,

which would make one think, if he weren't listening and weren't

reading, that all we're doing is changing the way of collecting a

certain amount of revenue. But the net effect of that, as the minister

pointed out in the budget speech, is to bring in a new $140 million of

government revenue — quite a neat exchange. If he can do that with a

few more exchanges, perhaps the minister will start reducing rather

than increasing the . . . .

MR. ROSE : Sounds like a shell game to me.

MR. STUPICH : Well, it's a pretty healthy shell game from the point of view of the Minister of Finance.

The

minister did say in his remarks and in correspondence and during his

speech, I think, that it's not the first time that this kind of tax was

imposed, and indeed that's true. There are many such taxes imposed even

in Canada.

Nova Scotia, for example, does have a property

purchase tax. It's not called exactly that, I think. In Nova Scotia

it's the municipal land transfer tax, where municipalities may approach

the government and ask for the right to impose this kind of tax on

property within the municipalities and raise money for municipal

purposes. Now certainly municipalities, as the minister knows from his

previous experience, are always looking for new ways to raise money,

and in Nova Scotia they dealt with this to some extent by giving the

municipalities the right to impose this tax up to a certain limit. Of

course, the government has to approve the bylaws, and the government

still has the reins of control. But the rate there is a maximum 0.5

percent, which is just half of the rate that's being imposed at the

lowest levels here in the province of British Columbia.

New

Brunswick has a real-property transfer tax. There the rate is 0.25

percent — significantly lower than the rate being imposed here in

British Columbia, and the exemptions in New Brunswick are much more

extensive than they are, as proposed to date, in the legislation before

us.

In Quebec they have a much higher rate of tax, Mr.

Speaker: a 33 percent rate. But it applies only to the transfer of raw

land to non-resident speculators. There they are getting at a real

source of revenue, and I would find it very hard to argue against that

kind of thing. If raw land is being traded to non-residents —

speculation involved — there it's a very healthy 33 percent. As I say,

I'd find it very hard to argue against that. But that is not the

principle in this legislation.

Quebec is the one with the

33 percent. Ontario has a rather similar one, I suppose, except there

again the rate is 0.5 percent on the first $55,000. I think the second

member for Vancouver–Point Grey (Ms. Marzari) said 0.05 percent. I

[ Page 1279 ]

believe

it's 0.5 percent — unless we're reading different dates or something

like that — with a higher rate on additional transfers.

There's

one more thing I'd like to say about the Ontario legislation. When it's

dealing with the exemptions, it raises an interesting wording: "The

registration of a conveyance of land where the whole of the value of

the consideration is natural love and affection is exempt from tax."

Now the minister might want to look at just what Ontario means by that

wording.

The minister in his remarks referred to other

provinces, in particular Manitoba. I think the hon. member for

Maillardville–Coquitlam (Mr. Cashore) dealt quite adequately with the

fact that in Manitoba there is a significant exemption so that people

who are buying residences, for the first time or not necessarily for

the first time . . . . There is a significant exemption which does not

apply in the province of British Columbia under the proposed

legislation, with the exception of transfers to direct family members.

The minister, I thought, might have listened to that argument earlier —

the argument that has been put to him by many people — and might have

made some change in the amendments. So far the amendments tabled have

not indicated that he appreciates that concern about first-time

residential buyers with limited money at their disposal and limited

available properties. I think the minister mentioned Washington state,

but Washington state is another jurisdiction where it's something that

municipalities can impose if they want to increase their sources of

revenue. I have information here about what's being done in England as

well, but I'm not going to bother with it.

I'm sure all of

us have had representations from many people — from individuals and

also from the real estate industry — about their concerns as to what

effect this tax will have. It hasn't been there long enough to really

measure it, but there are concerns. Here's one story from the Province :

"Tax Troubles Industry. The commercial real estate industry has lost

out on millions of dollars in property deals." As I'm speaking now,

though, who can say they've really lost anything? We don't know. But

their concern is the one that was voiced by the Leader of the

Opposition when he spoke on this before lunch. I'll read from this

story:

"While saying the tax itself is not

out of line, what is out of line . . . is the arbitrary way it was

introduced. 'If a tax had to be imposed to raise revenue, that's fair.

But what is patently unfair and inequitable is the fact there was

absolutely no consultation with the industry about the tax or how it

was to be implemented."'

Mr. Speaker, this is a government

that promised to be open, to listen, to consult, to discuss, and to

cooperate with the people who were going to be affected by changes in

legislation. In this case it's patently obvious that the government did

not consult at all with the people involved in the buying and selling

of properties.

Another story:

"'For those who are buying

a new home, the sales tax reduction will more than compensate for the

property purchase tax,' the minister said. 'Secondly, there are many

players involved in real estate transactions — bank managers, mortgage

companies, real estate agents, buyers and sellers — who can absorb the

tax."'

We had discussions about the banks this morning, in

other legislation, where it was admitted by the minister — at least,

admitted in the budget speech — that the taxpayers are making a $6

million gift to the payers of corporation tax, which are the banks and

trust companies. So we're giving them more money now. No doubt they

could afford to absorb this in some instances, but I have yet to find a

lending agency of any kind that is prepared to do as much as it could

for the prospective purchaser — as much as they have to, sometimes, to

make a deal maybe, but certainly not as much as they could. For the

minister to say that it really won't matter because these other people

can share the cost of that 1 percent fee is not doing one thing to help

the people, in particular those who are purchasing a residence, and

most especially those who are purchasing one for the first time.

There's

no question but that it's intended to expand and diversify the

government's sources of revenue — that's the point I was trying to make

at first. It's bringing in one new way of making revenue, one more way,

which I'm sure is in the minister's long-term goal of trying to reduce

the provincial deficit. But doing that, and in hitching it to a sales

tax reduction, is not giving any assurance that there won't be both

increases in this tax and further increases in the sales tax, the

income tax and all other taxes. It's leaving the door open for him to

make a massive tax grab whenever he thinks the timing is right to do

that, giving him one more opportunity to extract a lot of money out of

the community.

The point that the Leader of the Opposition

made, that others on my side of the House have made and that I'm making

now is that it's a unique burden on the first-time purchasers of

property, those who are buying their home for the very first time.

Those who are selling and buying at least have some equity established

in property that they can use to trade up, but for people who are

trying to buy for the first time it's not just a 1 percent tax; it's an

approximately 10 percent impost on the deposit that they have to be

able to put up at the beginning. And it's little solace to them, I

think, to be told: "Go to the real estate agent, go to the banker, go

to anybody else like that, and ask them to share the burden."

would think that the concerns have been passed on to all of us from . .

. . One from Bar X Enterprises came addressed to the Minister of

Finance, with copies, I suppose, to everyone. They're in the business

of buying properties, working on them, improving them and then selling

them. Yet in their case the tax has to be paid when they first buy the

property; then they spend sales tax money. It's not as though these

properties have been exempt from sales tax up to this point. If there

is a building on them, unless it was built some time before 1952 . . .

. No, the 3 percent tax came in earlier than that. Unless it was built

before the imposition of a sales tax in British Columbia, sales tax was

paid on the construction of those buildings. In this case, Bar X

Enterprises pays the 1 percent tax — or more, depending on the value of

the property at the time they buy it — they pay the sales tax on

everything they put into that property, and then the purchaser of the

property several months or even a year or more down the road has to pay

the tax on the whole value at that particular point in time. Is that

really what the minister intended? I suspect that it is, from the

figure in the budget; but I wonder if he considers that fair and

equitable.

National Land Inc. presented three scenarios.

This morning one of my colleagues — I believe it was the second member

for Point Grey — dealt with scenario one, about a developer buying a

six-acre parcel. By the time it is divided

[ Page 1280 ]

into

lots and the lots are sold, a tremendous amount of tax revenue from

that one particular development has accrued to the government. The

question of the amount of money involved in a commercial property

transfer at the 1 percent and 2 percent rates may slow down some deals.

I doubt that it will stop any in the long run. But once again, at this

point in our economy does the minister really want to put that

impediment in the way of property transfers, with new businesses

possibly coming in to establish and buying properties, and hesitating,

knowing that the cost has suddenly gone up?

The concern

about the down payment is one I've voiced already. Carman Briscoe,

another licensed real estate agent: concern again about the effect. A

handwritten letter addressed to the two members for Langley from Glen

Beauchamp. He has also addressed it to the New Democratic Party and to

the B.C. Liberal Party. He doesn't seem to address it to anybody else

in the Social Credit caucus, but at least it has gone to the other two

parties.

[2:45]

Interjection.

MR. STUPICH : Someone says they remember. I wasn't looking to see who was speaking at the time. It doesn't matter; there is this concern.

think the greatest concern, and the concern we have expressed since

this Legislature first met, is the fact that the government, in spite

of all its promises to the contrary, has been imposing new taxes,

making changes, new legislation, without any consultation, without

listening to the people in the community, without submitting its ideas

to the community. I know there has always been this idea that you can't

discuss budget matters in advance of budget day, but I really think

that is old; it's no longer appropriate. I can see nothing wrong at all

with discussing measures like this in public. Is the minister really

afraid that people might complete the purchase of a house in advance of

budget day in case this might come into effect? To warn people ahead of

time that there's going to be a tax increase, or that there might be a

tax increase, could have nothing but a good effect because it would

spur the economy in the meantime. Then if it didn't happen, well,

there's no harm done. If you were going to reduce, I can see the reason

for not talking about it, not telegraphing your punch. That's another

matter that we'll talk about later with another bill.

There

would have been no harm at all in the government discussing this

openly. If they discussed it with anybody, it certainly wasn't any of

the people from whom we've had letters, like the one I have in my hand

right now from Mitten Realty:

" The fragile

recovery in the real estate market currently is fuelled by stable

prices and low interest rates. I don't think the Minister of Finance

realizes that deficit reduction can also be achieved through a rise in

retail sales and a better profit level . . . for small business so

that, instead of closing and failing, small business can profit,

survive and pay taxes."

From the real estate board in

Vancouver, an excellent letter: "Consider the young first-time buyer."

I've talked about that already; I won't read any more. But it does go

on to contrast this with other moves by the minister. "High-income

earners have received an income tax increase of only 4.5 percent, while

those with lower . . . incomes will pay 8.3 percent more. Those

struggling to attain the basic privilege of necessary shelter will . .

. be penalized, while those able to buy luxuries get a tax break." It

would seem as though the minister is determined to go the wrong

direction in the legislation before us right now.

The

Leader of the Opposition and quite a number on this side of the House

have said that we are opposed to this legislation. If it had to be

done, it's the wrong time to do it. There is this suspicion in my mind

that all it is is a new form of raising tax revenue so that the

government — the minister — will have that many more options available

to him when he decides the time has come to tighten the screws and to

raise more money so that he can pull a plum out of a pudding and say:

"I have been able to reduce the deficit."

Mr. Speaker, the opposition is opposed to this legislation.

MR. ROSE : I wouldn't want to let this opportunity go by without contributing my little bit to the debate. I won't speak very long.

happen to represent a riding in which there is a good deal of building

going on. Sometimes that is rather comforting when you look at the

health of the riding; for a politician it's sometimes a bit unnerving,

because you don't know who's coming in there. Nevertheless, we welcome

them. As long as they behave the way they have been, I'm very pleased

to represent them.

But all facetiousness aside, the fact

is, I am concerned. I think it was mentioned in one of the letters;

I'll use the same term. The fragility of the recovery is a very tender

thing. We've had a down cycle for the past three years, ever since we

brought in this restraint program. The instability created by that, the

turmoil and the uncertainty, we were just getting over. We were looking

forward to what was called euphemistically a fresh start. In many ways

it has been a fresh start; in many ways it hasn't.

concern about this whole thing is that the area that I represent is

inhabited by a broad cross-section of income groups. We have everything

in there from homes up to $500,000 being built right above Colony Farm,

to townhouses, the future destination of many first-time homebuyers and

young families. We're concerned that there may be a disincentive not

only for the people to purchase . . . . They have to lower their sights

in terms of what they can purchase. There's also the concern about the

fact that the employment level in the house-building trades has begun

to climb and recover, and we wouldn't want anything that threatens that.

Our

main concern has to do with the first-time homebuyer, who buys a house

now . . . . The median price for a home now . . . . The last figures

I've seen in British Columbia, or at least in the lower mainland area,

are around $125,000 to $130,000. That is what we would call, maybe 20

years ago, a $13,000 or $14,000 or $15,000 home. What we used to pay

for a house we now pay for a car, so there have been vast changes in

the numbers. But still it's possible for young families — first-time

buyers — to get into a townhouse for under $80,000. But if you add 1

percent on, I think it will be a disincentive. It will mean people will

have to wait longer, will have to remortgage or get a second mortgage,

or will have to go without and lower their sights, I think I said. So

we see this with some concern.

What the minister has done,

in his attempt to seek greater tax revenue, really has moved into the

area vacated by the federal Conservative Party when they put an

exemption on capital gains of something like $500,000. This allows him

to move into an area where people sell their house and try to

[ Page 1281 ]

upgrade,

and they don't have to pay capital gains on that particular sale. The

minister has moved into it with his own real estate transfer tax.

think it's probably not worth the trouble. It seems to be a little bit

of a shell game between lowering — which was a very good political

move, I suppose; considered to be astute, if not crafty — the sales tax

by 1 percent, and then taking the money somewhere else. At least

everybody pays the sales tax. People have argued for years that it's

regressive. It's not progressive, because the poor pay as much as the

rich in a sales tax. But the point is that it's really a tax on

consumption. So there is some argument about that, even among

egalitarian economists. We'll argue forever, I suppose, about the

equitability and the equity in terms of taxation.

It's the

signals you send out that count more than anything. If your recovery is

fragile, then people are going to be a little bit less confident about

major purchases. They all remember the 23 percent interest rates and

how many people got into very serious trouble. And they weren't just

the flippers; they weren't just the people who work in the downtown

office buildings. There were a lot of very, very modest income-earners

who got burned. It was a very sad story.

I don't know why

the government wants to do this, personally. I'm opposed to it, and I

want people to know that I've spoken against it. Somewhere down the

road, when we find a suitable spot in another stage of this bill, we

are probably prepared to move an amendment which would exempt

first-time buyers. We haven't discussed the level quite firmly yet.

seems to me that all this has happened . . . . The government's got the

teachers mad at them now. They've got the working people mad at them —

at least the trade unionists. They've got the elderly mad at them for

user fees. Now they've got the real estate industry mad at them. What

the hell? Do you think they are going to forget in three years anyway?

I don't know if they are. It seems to be an unfair imposition on the

lower-income people, if your aim is to use your tax system to improve,

enhance and nourish the economy. I think it is a negative signal, and

for that reason, as well as the others I've mentioned, I don't think it

can be supported.

MR. SPEAKER : Pursuant to standing orders, the minister closes debate.

HON. MR. COUVELIER :

Mr. Speaker, the opposition opened this debate by its leader expressing

the view that he was confused. He said the legislation was confusing.

That's not surprising; he's a lawyer. To make matters worse, he's a

lawyer from Vancouver. After hearing the other speakers from the

opposition expressing their views on this bill, it's clear that they're

all in that same sort of confused camp.

I find a little bit

absurd the suggestion of the first speaker that there should be

consultation on a taxation measure with the individuals who might be

impacted. I ask: what sort of a conflict-of-interest position would

that put those individuals in, for they would have advance knowledge of

a tax change and subsequently have to deal, in the course of their

daily affairs, with matters that they would be taxed on a day or two

later. Clearly, Mr. Speaker, that suggestion was and still is

inappropriate. You cannot, on a matter of a new tax initiative, invite

comments or widen the circle of knowledge, for the very purpose that

you must never extend a benefit to some insiders. I find it somewhat

amusing that "the party of the common folk" should be suggesting that

we should bring into a net of knowledge some privileged group of

individuals who might thereby be in a position to benefit from that

inside knowledge. I find that a little bit strange.

One of

the questions dealt with the question of co-op shares and taxation on

those shares. I suppose the questioner is aware that there are many

devices by which co-ops are formed in this province. Some of them have

share ownership in a larger building. Some of them have individual

share ownerships in individual dwelling residences in a larger

building. Similarly, a lot of them have different financial

arrangements such that a simple answer to the question put would be

impossible. You really would have to find the particulars of the

instance to deal with the question, and I suspect the questioner knew

that when he put it.

The opposition went on at length about

the philosophy of this bill. I find it passing strange that the

initiative or the philosophy behind a property purchase tax is in place

not only in traditionally Tory country, Ontario, but, lo and behold,

also in NDP country, Manitoba. I have some trouble understanding how it

might be that members of the New Democratic Party would have some

trouble with the philosophy when, presumably, the premier example of

wise taxing jurisdictions, jurisprudence and leadership comes from

Manitoba. If you could have heard the comments on the budget speech,

that message came across incessantly: "Look at Manitoba." Well, as you

know, I dealt with Manitoba at some length in my rebuttal. But in any

event, Manitoba has a similar property purchase tax. So much for the

objections to the philosophy from the members of the opposition party.

heard some comment from the last few speakers that there is a fragile

market. Can you believe it? The market is booming. It's never been

stronger in Vancouver, Victoria or B.C. at large. It's fragile? My

goodness, Mr. Speaker, have they been so long confined in this room

dealing with two narrow bills that they've lost their wider perception

of what's happening in the marketplace? Are you not aware of the fact .

. . ?

MR. SIHOTA : It's fallen since your budget was introduced.

HON. MR. COUVELIER :

Let me tell the members opposite, Mr. Speaker, that the Vancouver

market rose 143 percent this March over last March. The Vancouver

market rose 45 percent this April over last April. Where have you been?

A fragile market? That's absurd. My goodness, you would think that if

we're going to have some valid debate it would at least be based upon

some factual material other than pure emotionalism that doesn't deal

with the issue at all.

The other point, dealing with the

philosophy, is that this is a tax paid by the vendor. It is a tax on

wealth. It is not a tax on shelter, as suggested by the opposition

members. It's a tax on wealth. I find it astounding that a party that

is supposed to be in bed with the principle that the wealthy must pay

more would find some objection to the idea of taxing wealth. Because

it's the vendor who pays this tax, not the buyer. Therefore it would be

folded into the dynamics of the transaction.

[3:00]

Let's

talk about the first-time home-buyer. I've heard ad nauseam about this

first-time home-buyer, as if all of us would qualify. I suspect none of

us would qualify in this room. In any event, there is no evidence

whatsoever given to

[ Page 1282 ]

that there has been any hardship regarding first-time home-buyers. I

have challenged the real estate industry and everybody who has come to

me to provide some evidence so we can deal with it in a constructive

way, and I have not received one shred of evidence. I find it somewhat

ridiculous to suggest that, given all the parties in a real estate

transaction, for the sake of a few hundred dollars a deal will be lost

to some young couple buying their first home. It totally ignores the

dynamics of any transaction between buyers and sellers. If you add to

that the number of players in a real estate transaction — the real

estate agents themselves, the real estate company, the banker, the

mortgage company, the buyer and the seller — there is all kinds of

latitude amongst all those players to find the $100 or $200 that may be

required to close the deal. And the fact of the matter is that anybody

who has ever made a real estate transaction knows full well that it is

a subject of negotiation. It is a subject of give and take, and

frequently one of those players might give more than the other because

it's in their interest to do so at any given time. That's a fact of the

marketplace.

I find it startling to suggest that there is

some simple way by which first-time home-buyers might be protected, and

I've yet to hear a suggestion that is practical in that respect. On

real estate transactions — if not for every kind of a transaction — the

seller will get what the market will bear. That is the first rule of

buying and selling. There's no indication whatsoever that a break for a

first-time home-buyer is going to be reflected in a reduction of the

asking price. None. The fact is, the asking price sought will be what

the seller can get in the marketplace, irrespective of taxation

measures, irrespective of the income levels of the purchaser,

irrespective of anything other than the best possible deal for the

seller. That's the first rule, Mr. Speaker.

I can

appreciate that individuals who have not had the experience in

governance, individuals who possibly don't have the business background

or the broad-ranging overview of these kinds of affairs, might not

understand that basic precept. But it's basic, it's fundamental. It's

the first thing that a seller determines when he decides to sell: what

will the market bear? There's no indication that you could write a

piece of legislation that would capture any saving passed on to a

first-time buyer and ensure that that first-time buyer received the

benefit. None whatsoever. There is no model in place in any

jurisdiction that I'm aware of that provides that kind of a safety net

or umbrella which works effectively. The market will get what it can,

when it can. There doesn't appear to be any remedy to that basic truth,

so it seems to me that to continue to hammer away at that desire

expresses a basic ignorance of how the marketplace functions. That's

not surprising, of course, coming from across the floor.

There

seemed to be some confusion about our cancellation of the ad valorem

rates. We not only cancelled ad valorem fees for registration of sale;

we also cancelled ad valorem fees for mortgage registrations. As a

consequence, the sums of money involved were somewhat different than

expressed by the Leader of the Opposition this morning.

There's another factor, Mr. Speaker, that has occurred at the federal level.

The Central Mortgage and Housing Corporation announced on May 1 that they would

be requiring lower down payments for certain categories of house purchases.

For a house with a value of $90,000, the old CMHC rate was 11 percent; it has

now been reduced to 10 percent. For a house valued at $100,000, the old rate

was 12; it's down to 10. It was 13.6 for $125,000, and it's down to

10. For $150,000 it used to be 14.7 percent; it's down to 11.7 percent.

We have said repeatedly that there is evidence that the possibility of the first-time

buyer, if you like, purchasing a home will be enhanced as a consequence of the

federal initiatives. Certainly we are closely monitoring the performance of

the marketplace to see what effect that has on the marketplace. We've also

said that after that monitoring it may be appropriate for us to examine our

own mortgage assistance programs, but certainly not before we've seen a

need and not before we can properly determine the consequences of any changes

that might be contemplated. It's premature to talk of those things, and

I certainly don't hint at or make any firm commitment to them now. I merely

make the point that we are aware of changes that are occurring and have occurred

at the national level, and we are monitoring them.

One

of the speakers had the good grace to notice the sales tax cut. With

the 2 percent cut that will be in place before the end of this fiscal

year, the property purchase tax payable on a new home is more than

offset by the savings in sales tax on the building materials in that

new home. So we're tilting at almost a ghost here in the sense of its

impact as it relates to new home purchases.

I heard some

criticisms that this is a tax on the poor. The fact is, 20 percent of

the taxation base comes from the commercial-industrial sector, and 30

percent of the revenue comes from that same source. Quite clearly it is

not a tax on the poor at the expense of the rich.

Mr.

Speaker, I believe I've answered the comments that I heard, aside from

the repetitions, but I won't deal with those, of course. Therefore I'm

pleased to move that this bill be now read a second time.

Motion approved on the following division:

YEAS - 30

Brummet

Savage

L. Hanson

Dueck

Richmond

Michael

Parker

Loenen

Crandall

De Jong

Dirks

Mercier

Peterson

Veitch

Strachan

Vander Zalm

B.R. Smith

Couvelier

Davis

Johnston

Weisgerber

Jansen

Gran

Chalmers

Ree

Bruce

Serwa

Vant

Long

Huberts

NAYS - 16

G. Hanson

Barnes

Marzari

Rose

Harcourt

Stupich

Boone

D'Arcy

Gabelmann

Blencoe

Cashore

Smallwood

Sihota

Miller

A. Hagen

Jones

[3:15]

Bill 17, Property Purchase Tax Act, read a second time and referred

to a Committee of the Whole House for consideration at the next sitting

of the House after today.

HON. MR. STRACHAN : I call Committee of Supply, Mr. Speaker.

[ Page 1283 ]

The House in Committee of Supply; Mrs. Gran in the chair.

ESTIMATES: MINISTRY OF ATTORNEY-GENERAL

(continued)

On vote 12: minister's office, $219,629.

HON. B.R. SMITH :

There are a few matters that I promised members I'd bring back to

committee yesterday. One of them involved the questions on the

Coquitlam area court facilities in School District 43, which the member

for Maillardville–Coquitlam (Mr. Cashore) asked me about.

Let

me just say for a moment that the facilities now in place in Port

Coquitlam are only temporary trailer facilities. They are by no means

adequate, and they are not facilities that we are content with. We have

planning money this year to proceed to a facility and to construct a

court facility there which we will need.

I have also looked

into the adequacy of those facilities in terms of getting the cases

out, and the cases have been getting out all right. There is no backlog

in family or youth cases. The first appearances for youth occur within

two weeks, and trials are set within a two- or three-month period,

which is quite exemplary.

By saying that, I don't suggest

that those facilities are satisfactory. We know they aren't, and we

have planning money this year. We hope to get a site and to proceed. It

is one of our justice priorities, to have a proper courthouse, a

Coquitlam justice building of some kind to serve the area. I can't give

the member an exact location, but I can assure him that it is part of

our priority to proceed with that.

Another matter, while

I'm on my feet, is that I thought I should give the total cost of

outfitting the two ships for slot machines. Several figures were used

in the media. I didn't have an exact figure; I gave some individual

items. The total amount spent, including the rental of the machines of

$106,000, was $280,000. That's the capital cost, cost of all parts,

labour, installation, major purchase of tokens, computers, security

equipment and so on. That is the total cost projected over the entire

fiscal year; that is, right up to March 30. That's what it will cost:

$280,000.

MR. CASHORE : I would like to thank the

minister for his response to my question with regard to the family

court facility. I would like to affirm what he has said, that the court

and the staff there are doing an excellent job of processing the work

coming through that facility. I think they deserve a tremendous vote of

thanks for accomplishing a task in such a fine manner in such difficult

circumstances.

On behalf of the people of my constituency

and the Coquitlam–Moody constituency, I would hope that in the near

future we would be able to have a very clear indication of when that

project will proceed.

I would like to now move on to some

other aspects for a few moments and discuss the issue of youth custody

centres. Quoted both in the annual report and in the estimates of the

Attorney-General, we find that in the accounting for youth custody

centres, recoveries from the federal government for shareable

expenditures are for youth custody. This is not a loaded question; it

is simply a question for clarification and information. I would like to

ask the minister to explain what the formula is, and how that recovery

process for shareable expenditures functions. I would also appreciate

it if I could have a breakdown with regard to each youth custody centre.

HON. B. R. SMITH : I could send you this material later — apart from telling you that the

formula arrived at for Young Offenders Act construction was a 50-50

capital formula; that is, for things that had to be provided under the

Young Offenders Act.

There is no other magic in it, and if

you are seeing figures, those are amounts that are starting to come in

under that formula. But we have to pay the upfront costs, and then we

get these recoveries. I would be glad, though, to give the cost of each

of the facilities, if he would like those. I will certainly send those

to him.

Our attitude on young offenders, I think, is very

similar to that of the other side, which is that we believe that the

money should be spent in keeping them out, not in housing them in. We

are most interested and anxious in the upfront expenditures that are

made in the area of youth and in the diversion, rehabilitation and that

end of it. We have had to spend a great deal of money under the Young

Offenders Act on construction of facilities, not because we are wedded

to more facilities to house young people but because we must comply

with that act.

We think the money is always better spent in keeping them out and not having them in.

MR. CASHORE :

Notwithstanding the point that the Attorney-General has just made, I

think that we have to recognize that with the increase in construction

of youth custody facilities, there is a simple truth there. That is

that neither the federal or provincial government in the wisdom of

either would proceed to construct unnecessary facilities.

other words, the construction of these facilities is a recognition of

an increase in the volume of the requirement of this type of custody

resource. I think that is a fairly plain and simple fact. I don't think

the Attorney-General is arguing that youth custody facilities are being

constructed because there is a federal-provincial program. I think that

youth custody facilities are being constructed because there is a

significant increase in the number of youths requiring this type of

service.

I wish to suggest that the evidence is very clear

that this Social Credit government and its restraint policy has sown

the wind. It has been sowing it for quite some time, but particularly

in 1983, and is now reaping the whirlwind in terms of this very tragic

and sad situation where, because of the lack of support services,

because of the lack of preventive services, because of the lack of

family counselling services, because of the lack of child care workers,

we now find ourselves in a situation where we are having this tragedy

of having to deal with our youth in the most alarming of circumstances

within a custody procedure.

Just as I was cautioned during

the estimates on Social Services and Housing that we were moving over

the line into an area that was not within this issue, I come back to

this issue now and say that there is a connection, and I would really

hope that the minister in cabinet would use the evidence that is so

plainly available within his ministry to argue for a new approach to

real prevention that would be functioning within the government so that

it would not be necessary, within the vote that we vote on when we are

voting on the Attorney-

[ Page 1284 ]

General's

estimates, that we would have to be putting resources into an area that

would be far better served if those resources could be used for

prevention.

When the minister began his remarks two days

ago on this issue, he said that the building of youth containment

centres is a major priority. He made the point at that time about

meeting the requirements of the Young Offenders Act and he referred to

federally driven regulations having "produced a considerable boom in

the building industry in this province for youth containment centres."

Now,

Madam Chairman, I find it very disappointing and distressing and

disturbing to think that we might even see the burgeoning need for

youth containment as something that is somehow fuelling industry, that

it is seen as a growth industry, as something that we would somehow

celebrate because of the requirement that that take place.

HON. B.R. SMITH :

Maybe I could just interject, Madam Chairman, with your permission. I

think he misunderstood me. I can tell you I wasn't cheering it. I'm not

interested in make-work projects in this field at all. We have had to

build a lot more than otherwise we would need to because we have had to

house the 17-year-olds, and the 17-year-olds have accounted for a very

major increase in our costs. In fact, probably it will cost us over the

completion of our program about $100 million in extra capital cost

expenditure just to take those 17-year-olds into our system.

Now

in addition to that we do have, as the member has alluded to, some

increase in the number of youths in custody over and above the

17-year-olds — probably about one-third up. We're up, I think, now to

about 350 young offenders in custody in this province. But I am

heartened, and I know you will be too, by the fact that we still have

the lowest rate of custody of young offenders of any province in

Canada. Our last StatsCan figures, which were a year ago, showed that

we had 13.7 per 100,000 population compared to Ontario's almost 32 per

100,000 population and Alberta's 24.5. So I think we're on the same

wavelength here. We see custody as a very last resort, and we see that

these other things that we're talking about are very important to

prevent custody.

MR. CASHORE : Madam Chairman,

actually the figure is 362. According to our research, up to May 17 the

average number of youths in custody including remands was 362. For

'83-84 the average number of youths in custody was 140. So that is, as

you have acknowledged, quite an increase there. That understandably did

not include the 17-year-olds who would have been in adult centres at

that time. In '83-84 there were 66 17-year-olds in custody on a daily

average. So a good rough comparison would be 206 to 362, or an 80

percent increase. I think we can get into comparing ourselves with

other provinces. Probably there are different types of regulations in

each of those jurisdictions, but I think we have to be in a situation

of comparing ourselves with ourselves on a longitudinal basis.

Now I just want to say that the number of youths in pre-trial services or on

probation averages 3,867 a month. The human face that's on this tragedy

. . . . I do understand, Madam Chairman, that the Attorney-General is very concerned

that this is not the way to go about resolving these problems; but I think that

we do have to call on the Attorney-General to use his influence so that a proper

apportionment of resources goes into the kind of networks that are able to minimize

the impacts on this type of facility.

[3:30]

For

instance, if we look at . . . . I'm not saying here that this is the

position of the minister, but it does appear, without this being the

minister's statement, that youth containment custody services really

are a growth industry. In '83-84, the actual cost was $4,895,000,

after recoveries, for youth containment. I recognize that there was the

change there with regard to 17-year-olds, etc. The estimate for '87-88

is $13,716,033 after recoveries. I think that's an indication that we

are into a situation that while we have been trying to cut back in some

areas, we're seeing a monumental increase in an area that we really

don't feel . . . . I'm glad to know that the Attorney-General has said

this: we really don't feel that this is the way to go; there are better

ways of dealing with these situations.

Recently, just to

put a human face on it, some of us were in Kamloops and were getting

onto the plane. We saw two children — two young lads — handcuffed

together, being taken onto the plane at far too great a cost, and sadly

going down into a setting that is upsetting for all of us on both sides

of the House. I know that you share that view.

We do have

to look upon what is happening in this area as an indictment of the

restraint program and its impact, and the way in which the

Attorney-General, in some ways, is having to reap the whirlwind.

would like also to tie this in with legal services, because I believe

that legal services symbolizes prevention to some extent. So we can

really talk about legal services in the context of this ministry's

estimates. When low-income people have access to legal services to make

sure that justice is done and seen to be done, and they are not in a

situation of justice delayed being justice denied, we can see that

this is a kind of preventive program in itself, because people have the

opportunity to participate in the justice system.

According

to the annual report, the actual cost in legal services in 1980-81 was

$11,715,000, and in '87 the estimates were $8,637,000. Granted,

according to the budget that's going to be increased to some extent. My

friend the member for Esquimalt–Port Renfrew (Mr. Sihota) will be

commenting further on this. What we have to notice here is that during

restraint the resources for legal services went down, and the

requirements for custody went up. I think that's telling us something.

Those

who consider themselves very adept at reading bottom lines can draw the

logical conclusions from that. I think that we have made a very strong

case that there is a need to try to deal with some of the problems that

the Attorney-General is having to face by dealing with them through the

preventive process within the Ministries of Education, Health and

Social Services and Housing.

I would like to conclude by

saying that I believe that all the ministries are connected, and

definitely we have seen a situation of sowing the wind and reaping the

whirlwind in dealing with human problems within our society. The time

has clearly come, the evidence is clearly before us now on a

longitudinal basis — not on the basis of the bottom line for one year's

financial statements, but on the basis of what we can see over a period

of five, six or seven years. We can see that an error was made. It is

time for the Attorney-General to remind his colleagues that this error

must be corrected, and that what is called restraint is not dealing

effectively at all with the mounting social problems that we find in

our society.

[ Page 1285 ]

MR. SIHOTA :

Madam Chairman, I want to talk a little this afternoon about legal aid.

I don't know if the Attorney-General has seen the report yet, but this

morning the Law Society of British Columbia released a public opinion

survey conducted by Goldfarb Consultants, which, I think we all know,

is a reputable firm in this type of stuff. As I say, I don't know if

the Attorney-General has had an opportunity to read that report, or to

review its findings, but the Goldfarb report that was released on

behalf of the Law Society this morning indicates that there is indeed

broad public support for legal aid. In fact, that support is

overwhelming, in the view of the Law Society. The basic finding in the

survey was that the public opinion on legal aid in British Columbia is

such that the people feel either very strongly or . . . . Ninety

percent of the people feel strongly or moderately in support of legal

aid, and when people were given a brief description of legal aid and

how it's funded, support for the program rose to 95 percent, according

to the survey. Just to quote some of the findings: 88 percent of the

people surveyed said that legal aid is a necessary expense for the

taxpayer; 90 percent thought a lawyer was essential to defend a

criminal charge; 98 percent said it was essential that all people who

cannot afford a lawyer be provided with one to ensure equal treatment

before the law; 87 percent said it is government's responsibility to

provide a lawyer for those who can't afford it; 91 percent said that

without legal aid the justice system would be biased against the poor

and the less fortunate; 98 percent said that funding legal aid is

necessary in any society that believes in justice for all; and 95

percent said that it was essential that people who cannot afford a

lawyer be provided with one in civil cases. Those are findings that

come from the Goldfarb research report that was released today and

prepared at the request of the Law Society of British Columbia. They're

some very interesting findings.

The Premier knows as well

as I do that the mandate to provide these types of services is of

course under the Legal Services Society Act, and the mandate is to

ensure that legal counsel is provided to people who do not have access

to a lawyer for financial or other reasons. The Attorney-General knows,

I'm sure, of the inadequacies in the current system. I'm sure that he

has reviewed the report that came down in 1984. We know that there is a

tremendous lack of coverage when it comes to legal aid, and in 1985-86

there were 18,000 applications for family law alone, of which 9,000

had to be refused. I'm told by the people at legal aid that for last

year the numbers are a little bit more shocking, in that of the 15,000

requests for assistance for legal aid only 12,000 were approved. There

is a shortage of coverage in other areas aside from family law.

Let

me dwell a little bit on family law. It is also clear that there is

inadequate coverage for those who do get legal aid, particularly in the

case of maintenance, custody cases. The criteria only allow people to

receive it in urgent cases, and in most cases they're finding that the

people involved in maintenance cases simply do not get the type of

legal aid coverage that's required.

There is an inadequacy of coverage in terms of administrative law — UIC, WCB,

that kind of thing — which then of course forces people to perhaps bypass a

UIC board of review or a referral to an umpire and fall back on social assistance

for support. They do not get coverage for workers' compensation matters,

and accordingly, as I think we all know, as MLAs we're inundated with WCB

matters, in part because lawyers or legal coverage cannot be provided under

the legal aid program,

There

are very, very narrow eligibility criteria for legal aid. I believe

that the number is . . . . I think you have to be making, depending on

your situation, either $780 or $1,080 a month in order to be covered.

So if you're making $1,081 you're not covered. There's no flexibility

in the system to base the provisional legal aid services on real

ability — the ability to be able to afford a solicitor or not depending

on the real disposable income of people. I know, and I would hope the

Attorney-General also recognizes, that the people who administer the

legal aid program have said over and over again that if people do have

some excess income they'll take that to defer some of the costs of

legal aid, and that's not a bad approach from their point of view. But

right now we have a situation where there is no coverage, for example,

if you're $1 over the eligibility criterion, and I would suggest that

very few people at $1,100 a month could afford legal coverage because

of the absence of legal aid coverage. There is, then, a total lack of

legal coverage for the working poor of this province. Clearly there has

to be an improvement in the eligibility criteria, a broadening of those

criteria.

The legal aid tariff is nominal. I think I was

reading somewhere the other day — in fact I think it was in the news

release that was put out today by the Law Society — that the revised

tariff which is to come into effect on August 1 will still only

represent 67 percent of the 1973 tariff adjusted for inflation. So you

can see that no lawyer is going to get rich on legal aid. In addition

to that, of the 5,500 lawyers practising in B.C., only about 1,500

even bother to take on legal aid cases, and of those 1,500, 80 percent

accrue an income of less than $10,000 a year in legal aid billings.

The point is that no one is getting rich on legal aid, and in fact the

Law Society has estimated that in every case . . . . I know this is the

case in my law practice as well. We subsidize all sorts of cases. I

must confess that I've never kept a track record of the time that we've

put into both legal aid matters and matters that we simply do for free,

because we know that there is a compelling case there but no ability to

pay. The Law Society has estimated that each year, through that method

alone, lawyers subsidize the legal aid system in this province by $21

million.

Although I think the tab should be increased, I'm

not suggesting that the goal ought to be to make those practitioners

rich. But to have something that represents only 67 percent of the 1973

tariff speaks for itself.

There is no legal aid office in some larger communities, and the Attorney- General, I am sure, is aware of those problems.

any event, much of this was highlighted in the task force report that

the Attorney-General commissioned in 1982, I believe, and which

reported in August 1984. Really, the bottom line of that report is that

they're asking for an increase in funding. In 1984, it was suggested

that in order to make the system just adequate, bare bones, it required

support to the tune of $33 million, and now, in today's figures, we're

talking about $38 million.

My question to the Attorney-General is this: what plan does the government have to realize that target of $38 million?

HON. B.R. SMITH : I think the member has quite well and fairly described

the situation in legal aid. It is certainly far from the perfect objective that

the task force set out, and it is some distance away. But it has improved, and

there has

[ Page 1286 ]

been,

I think, a real and considerable improvement in this present budget,

which I won't dwell on because I mentioned it last day, but it will

amount to the $3 million added into the base that was short from last

year, and then the $2 million plus probably $600,000 in new money.

[3:45]

Probably

the member and I agree that the real area in need of help is the family

law area. It is certainly true that it is a very arbitrary set of

criteria which they use, which I guess they have to use to be able to

administer the thing readily and speedily. But it does penalize that

great area of working poor. I have absolutely no quarrel with what he

says. We're in discussions now with legal services on some ways this

year that we can improve in the family law sphere by expanding the

eligibility and by allowing some greater flexibility in the application

of criteria, in restructuring the family law tariff, which is probably

the worst of all tariffs, and in providing some duty counsel in the

area of family law. This will probably involve as well the need to open

some additional service in some areas that don't have that service now,

where the services are being provided out of law firms or others and

where we do need some assistance.

I quite agree with you

that we have to make progress. We're going to be some distance from that

ideal world of $38 million. There has been tariff improvement last

year, 12.5 percent tariff restoration, the criminal law side. The Legal

Services Society this year decided to increase the tariff as of August

1, on the criminal side, of 25 percent. I wasn't particularly thrilled

with that decision, because I felt that before they did that, decisions

should have been made to improve the coverage in family law. To me,

extending that coverage and providing some broader base of access to

family law legal aid is a much higher priority than another 25 percent

going to the practitioners who are already doing criminal law.

the member knows from his more recent days in practice, and as I

remember long and hard from my days in practice . . . . I did a number

of legal aid murder cases. I never paid my overhead on them. I never

did them to make money; I did them because I felt I had a duty to do

them, and when I was first practising it was a very good means of

getting experience and access into the courts myself. I may be

idealistic and out of touch in this — and some have said that I am —

but I do believe that those still are the overriding criteria in the

field of criminal legal aid: that is, a willingness to give some

service. Unfortunately there are a few lawyers — a very few in terms of

all the lawyers in this province — who give the most sacrifice. So,

service and experience.

The tariff should be something that

allows you to go in there and not lose money, and perhaps make some

return. You don't expect ever, even with the improved tariff . . . .

Even if we went to the task force recommendations, people would not get

rich off legal aid. Our legal aid tariff is a very modest one indeed.

But more to my concern has to be that the public gets service, and that

it cannot be said that we are turning away someone who is very much in

need of a lawyer in a case of necessity. I'm happy to note that legal

aid do not do that: they do not turn people away in cases of necessity,

where someone's job, health or livelihood is seriously threatened. They

do provide coverage. We provide coverage now, under the Young Offenders

Act, for those young offenders who require legal counsel. They have a

special higher right to that counsel than old offenders do, and we

provide that coverage.

The member's remarks are generally

fair-minded and I don't quarrel with them. I wish we could do better.

People like himself and myself, who know the importance of legal aid,

will work away at improving it.

HON. MRS. JOHNSTON : Madam Chairman, I seek leave to make an introduction.

Leave granted.

MRS. JOHNSTON :

Madam Chairman, on your behalf, I'm very pleased to introduce a visitor

in the gallery today from Langley. I would ask the House to please

welcome Peter Fassbender.

MR. SIHOTA : I'm glad that

the Attorney-General agrees with me that there's a problem there. We

can argue about whether or not the 12 percent increase in the criminal

tariff did the trick or not. I think he knows, and I know, that the

decision to implement the tariff on August 1, 1987 . . . . Although the

decision is made at that time, he knows and I know that that legal work

won't be completed for some time, so that money won't have to be paid

until sometime after August 1. And that's how it works. It's no great

victory, no great solace, for any of the lawyers that work in this

field. Sure, maybe there's an argument it shouldn't have gone up in the

criminal field, and there should have been eligibility increases in

family counselling. But I don't want at this stage of the game to get

into protracted debate, especially given the time constraints that

we're operating under.

My question to the Attorney-General,

which I'm looking for an answer to, is: what specific plans does the

Attorney-General's department have to achieve the task force

recommendations, to take us to the figure of $38 million? Are there or

are there not any plans in place?

HON. B.R. SMITH :

If I could make promises in this place to double the budget in any

particular area, I would indeed be unique. We are working to improve

it; that I have said before and that I will say again, particularly

specifically working to improving the eligibility and the restructuring

and access to family law counsel. But I cannot tell you that I am going

to be able to get to $38 million next year or the year after; I'm not,

but I intend to try to improve it each year.

The

improvement we've made this year, while it doesn't seem a great deal to

a legal aid lawyer who is handling a murder case and working probably

for about $5 an hour, still represents a major increase for government

in the field of legal did. That was achieved, I think, by and large by

the visit over here of the entire hierarchy of the bar, not just the

legal services people but also the master treasurer and the head of the

Canadian Bar Association, B.C. branch. They sat down and they had

three-quarters of an hour with the Premier, which in my experience in

this place, which is not as long an experience as my friend the member

for Vancouver South, who's an old hand in these things . . . . When did

your dear former Premier ever have a meeting with anyone on legal aid?

I bet you it was a frosty Friday. They don't usually meet on things

like legal aid. It was a breakthrough and we did get major improvement.

I'd like to be able to say yes, next year we'll be at $25 million, and

the year after we'll be at thirty, and then thirty-eight. I guess if I

was parceling out the money, I'd probably get there a lot quicker, as

would you. But

[ Page 1287 ]

the realities are that we do our best, and I will try to improve it each year.

MR. SIHOTA :

Am I then to take it from the Attorney-General that there is no three-

or five- or seven-year plan to meet the financial target, as placed in

the task force report?

HON. B.R. SMITH : There is a continuous plan to do better.

MR. SIHOTA : I think we could debate that answer, but the point is this. The

Attorney-General made reference to the meeting between the people from

the Law Society, concerned about legal aid, and the Premier earlier on.

During the course of their submission they put forward a plan that

would see the funding go from $21.7 million in 1986 to $38.5 million in

1990 to reach that target. Is the minister saying that he is not

prepared to follow that plan?

HON. B.R. SMITH : Yes, he is.

MR. SIHOTA :

Is that to mean that the minister then intends that over the next three

years at least, while he's in the chair, and after that, when he's

replaced, I hope . . . . Is the Attorney-General then making a

commitment that he will go to Treasury Board with those figures each

year: for '86-87, $21.7 million; for '87-88, $27 million; and for

'88-89, if we have an election by then, $33 million, which were the

figures that they put forward?

HON. B.R. SMITH : No,

he's not making that commitment at all. His commitment is to fight for

improvement of legal aid and expansion of eligibility and access to

legal aid, and to do what can be done within the system. But blueprints

of target figures — ideal target figures — are certainly for the Legal

Services Society to put forward to us and for task force to recommend.

But they are not for ministers to deliver on, and I don't like to make

promises I can't deliver on. If indeed you're in the same position

sometime, I dare say that you'll strive as I do to improve it. But you

will find that you cannot double legal aid allotment within two or

three years.

MR. SIHOTA : Well, first of all it's not

a doubling. Secondly, he's correct: three years from now I will be

striving to do that. But the point simply is this: the people who

practise law, who do legal aid work, and the society itself are looking

for some indication from this government that it's not only willing to

make verbal commitments but that it's willing to take some steps. If

they've got an assurance that you're taking these things to Treasury

Board, Mr. Minister, then of course they know that at least there's a

signal of support, and they're looking for that. And right now, in my

conversations with them, they don't know what the intentions of the

government are. They don't know whether or not there's a plan or

whether it's a three-, five- or seven-year plan. They don't know why

they went to the exercise and came down with a report in August 1984,

because they don't see the government moving towards those

recommendations.

Having said that, let's go back to comments that the Attorney-General made

earlier on, which were as follows. The argument is that there was more money

put in this year, and I guess I'm trying to figure out exactly how much

money was put in. According to the information with the budget, if I recollect

it correctly, it indicates that the money went up from $14 million last year

to $19 million this year. But is it not true there was about $4 million in extra

warrants and expenditures on top of that $14 million last year? I could be wrong

on the formula; it could have been $3 million. Am I not correct in that?

Interjection.

MR. SIHOTA :

The Attorney-General has confirmed that. So if it was $4 million, then

really the actual expenditure last year was $18 million, and if we've

gone up to $19 million this year, then the increase is only $1 million.

Am I not correct that half of that increase is paid for by the federal

government?

HON. B.R. SMITH : Yes, substantially

correct. Let me just try to deal with those figures more exactly. The

last budget was $14.04 million and there was a special warrant of $3.9

million. Of that $3.9 million, $3 million was an expansion in service

and tariff, which we have permitted since the budget was drawn up last

year. Just under $1 million was to retire a carry-forward deficit, so

it was a once-only, nonrecurring expenditure. So if you discount that,

then $3 million was put in to enrich service after the budget last

year, and that $3 million has been given again this year and put into

the base. So we have that $3 million and then we have another

additional $2 million of new money plus the deficit that will be

accumulated, which is projected at $600,000 as a surplus, which we've

said that they can keep. So in reality, it's $2.6 million of new money

plus the $3 million that we agreed could be rolled into the base for

new programs and tariff.

That's the increase. There's a

letter that I wrote to Lenny Doust, the chairman of the Legal Services

Society, that sets all that out, and I'll give you a copy of that; I'll

file it — no, I'll give you a copy of it; nobody else wants it.

MR. SIHOTA :

The point is this. It is not $5 million of new money that they are

getting this year. I was a little frustrated when the budget came down.

It is not even $2.6 million, because the $600,000 is an accumulated

surplus from the previous year, as I understand it; I am just using the

words that the minister used. Therefore there is $2 million that is

new, and of that, one-half is provided by the federal government. Is

that not correct?

HON. B.R. SMITH : That probably would be their total cost-sharing, yes. They don't give us very much, as you know.

MR. SIHOTA :

I think the figure is 93 percent, or something like that, which would

translate into 46.5 percent of the amount. In other words, would the

Attorney-General agree with me that at the end of the day it is really

an increase of approximately $1 million in new money, given the federal

contribution?

HON. B.R. SMITH : I think you can scour

the barnacles off the bottom of the boat until you have no boat left,

and you continue doing this sort of thing. I have set out what the

figures are: $3 million for tariff increases and new programs, which we

agree to accept, is new money, as we see it. We provided the money last

year by warrant, and now we have agreed to provide it on an ongoing

basis. So we have made

[ Page 1288 ]

that

commitment. Then there is $2 million of entirely additional money, and

there is a $600,000 surplus that they are permitted to retain.

But

you know, we have to pay the deficits of the society, and it doesn't

mean that they keep all their surpluses. That is not an automatic

thing. The collection of federal moneys that you talk about and the

contribution of federal moneys to legal aid, of course, are woefully

inadequate in the field of civil law.

[4:00]

MR. SIHOTA :

Okay, I think the Attorney-General is correct in sort of saying that

the figures speak for themselves. When they are looked at, I think the

frustration is that the public impression that went out there when the

budget came down, a big announcement by the Premier and the Minister of

Finance (Hon. Mr. Couvelier) that we are putting $5 million into legal

aid . . . . That is simply not true. We can quibble about whether it is

two-fifths of what was announced or one fifth of what was announced.

The fact was that it wasn't $5 million in new money.

Before I leave legal aid, I just want to make one quick point, and that is

that yesterday there was an argument put forward by the second member

for Richmond (Mr. Loenen). I just want to put on the record that that

complaint that he put forward yesterday about his concerns about abuse

of the legal aid system . . . . The Law Society, in its report today,

said that in its investigation of 100 cases, it could find only one

case of abuse within the legal system, and that is stretching the word

"abuse."

On the specific matter that the second member for

Richmond raised, I am told by the Law Society again that they have

corresponded with him on it, and they are satisfied that there were

enough checks and balances to make sure there wasn't any abuse. I say

that on the record, recognizing that the Attorney-General also came to

the defence of the system.

I want to switch now from legal

aid to another matter: corrections in this province. I want to spend a

little bit of time talking about the corrections system. I want to

start off by asking a question of the Attorney-General. We know that

there is indeed a committee of government looking at the matter of

privatization. Can the Attorney-General assure this House that the

correction facilities in this province will not be privatized?

HON. B. R. SMITH :

No, I can't make the assurance that they won't be privatized, but I

think it unlikely that there will be privatization. There has been a

fair bit of privatization already. During the restraint period, we

tried to find ways of doing the essential things that we had to do in

this ministry and others with a leaner component of staff, and also

doing them efficiently. We were able to find some parts of the

correctional field that we felt were well done under private operation.

We have always put out a certain number of youth work contracts to

non-profit organizations, but we found that there were some things that

we could privatize. We did privatize such things as food services, and

we even went so far as to privatize the chaplain operation.

don't think there is a whole lot there now that is likely to be

privatized. But there are some jurisdictions in North America that have

experimented with and actually do operate some privatized containment

facilities. I don't think one can close one's mind to that. But we

don't have any committee out studying those or actively considering

going that route.

Take the containment of young people, for

instance. I don't think we'd be much interested in privatization in

that field — as a government or at all. With adult prisoners it may be

that some programs could be run in the private sector, not programs of

close confinement but some of a more community or work-oriented nature.

My mind's not closed to that. But I don't have a ministerial task force

looking at it. I'll await, as other ministers are, the suggestions of

my colleague the Minister of Intergovernmental Relations (Hon. Mr.

Rogers). I'm not actively drawing up privatization agendas. I looked at

that with a fine-tooth comb in '83.

MR. SIHOTA : The

reason I asked the question is that the Attorney-General has

acknowledged that not only is there a trend within the present

government to take a look at privatization of correctional facilities,

but there has also been a trend in the United States. According to my

reading on the matter, if my recollection isn't faulty, about nine

states have now gone the full route of privatizing correctional

facilities for adults.

I recognize that food services have

been privatized — and I have some problems with food services being

privatized, which I will get to in a minute; I think there is some

downside to that. I also recognize that non-profit societies — John

Howard, Elizabeth Fry and so on — have been involved in one way or

another, and that there are probation facilities as well.

I've

been reading quite a few studies, I must confess, on privatization of

correctional facilities. In September 1986 in a volume of Federal

Probation — which is something I am sure the minister reads from time

to time — there is quite an

article on privatization of correctional

services which defines the issues. I think it's worth reading, because

in a very fair and balanced way it lays out the pros and cons of

privatization of these types of services. It really tends to conclude

that privatization is not the way to go, and that there is indeed a

movement towards . . . .

There is always a tension between

maximization of profit and the provision of quality services. There are

certainly concerns about accountability and liability when there are

problems with services that have been contracted out. There are really

serious problems with peace officer powers, especially in privately-run

facilities, in terms of who will do the disciplining, who will deal

with criminal responsibility in some of its aspects, and who will be

responsible for the conduct of searches. There are some real questions

in terms of the costs of privatization and the long-term benefits. The

short-term benefits are obvious; the long-term benefits are certainly

nebulous.

I'll take the Attorney-General's point at face

value and not quiz him any further on government's intentions to

privatize. I can understand the argument that there may be . . . . I

don't want to pin the Attorney-General down exclusively to saying he

won't privatize anything, because I don't think, realistically, I can

achieve that. I take the comments to mean that if there is to be

privatization, it will be very, very limited. That's how I interpret

the comments, and I see the Attorney-General nodding, so we'll leave it

at that.

AN HON. MEMBER : He's falling asleep.

MR. SIHOTA : No, he's not falling asleep, Mr. Member, and the question to the Attorney-General is this . . . .

[ Page 1289 ]

MR. BLENCOE : He's asleep.

MR. SIHOTA : That silly — but intelligent — second member for Victoria is interrupting my train of thought.

MR. BLENCOE : Take that back.

MR. SIHOTA : I take that comment back. I don't know what prompted me to say that.

any event, the question to the Attorney-General is this. I have some

concern about individuals who are given the authority to issue food or

provide food services. If my reading of the Correction Act is correct,

the people who provide these food services are deemed to be

correctional officers. If they are correctional officers, approved

under the Correction Act by the commissioner of corrections, my concern

is: given the fact we're placing these people in food services in a

prison environment, and given the fact that they're deemed to be, as I

understand it, officers under the act, what training do these people

have to deal with the kinds of situations that arise in prisons?

HON. B.R. SMITH :

There is an orientation training. You couldn't call it a peace officer

training. The peace officer function is performed by other correctional

officers, who supervise the preparation of the food and are there for

the serving of it on the tiers. We've had pretty good results, I think,

with the privatization of food services.

You always have

complaints in institutions, not just correctional institutions, about

food. You know that. I remember that from my institutional evening

days, too. You always get those complaints. Generally, I think the

results have been that they've been happier. If we did a survey, if we

were to get Goldfarb into our institutions and get him to do some

meaningful surveys — something solid to get his teeth into like the

privatized food in our institutions — I think he'd find that the

results were more favourable.

Privatization agendas this

ministry doesn't have, as I said. Our view on it always was that it

might be do-able in some of the support service areas, but it really

isn't do-able when you have somebody performing the core functions of a

peace officer, as you and 1 know those duties. That is something you

can't privatize.

I don't think that there has been any

privatization in the U.S. of core custodial secure functions, save and

except perhaps in the field of federal immigration holding custody for

immigration detainees. The states haven't gone to a private prison

system.

MR. SIHOTA : I really don't want to get into

the debate of that last point, but my information is that in Montana

they seem to have gone pretty well the full gamut in terms of

privatizing the whole thing. But that really doesn't matter. I'll

provide the Attorney-General with a copy of the study that I have that

looks at a number of American experiences, and Montana is one that they

point to. But it doesn't really matter; that's not my point at this

stage of the game.

My concern is this. It seems to me that

these people who are involved in food services and providing those

programs do not have a lot of training, and the information that I'm

getting from people within the field is that there is a tremendous

amount of concern about the inadequate training. Instead of once again

standing here and trying to make a lot of political Brownie points out

of the issue, I think the point is made that if there is one area that

the ministry should be looking at within that food services area, there

ought to be better training of these people who come in and provide

that food service. It was interesting, because I was reading a 1986 or

'85 ombudsman's report — once again I'm operating on memory — which

talked about the connection between quality food services and problems

in correctional facilities, saying that if there's decent food and

decent food services, that in itself is a preventive mechanism against

ongoing problems.

I'm wondering if the Attorney-General

could provide me with a little more specific detail in terms of the

orientation program that they have for people in the food services

program.

[4:15]

HON. B.R. SMITH :

No, I don't claim it's a training program. We're not training security

guards who are working in the kitchen. I guess there will always be

some feeling on the part of correctional staff that there shouldn't be

anyone working in the place or in the kitchen who doesn't have the same

training or experience that they have. We can judge it not on the basis

of some of the complaints, but on the basis of incidents, and there

have not been security incidents or others arising out of having

privatized staff in the kitchen. But I guess it's always a matter that

one has to watch.

I always have concern about the quality

of food. The ombudsman did comment on this in his annual report in '86

about food services. He said:

" . . . we have made it a point to dine with residents in

the institutions we visit. We are pleased to report that most of these meals

have been perfectly acceptable, some of them have been outstanding."

Gosh,

I shouldn't be reading this; everybody will want to get in.

"The cook-managers at Boulder Bay and Stave Lake camps,

for instance, have in the past year prepared meals that would go a long way

toward satisfying the most discerning of palates."

I don't know why I'm reading this. I'm trying to show you that

this was the privatized food service program which saved us money and was well

administered, yet the results from the standpoint of the inmates and those who

sampled it were very good.

hear what you say, that security is terribly important as well. If we

had any indication that there was some lack of security arising out of

privatization, we would intensify our training and orientation.

Orientation does deal with security. I recognize that when you bring a

privatized service into a system where it used to be done in-house,

you're going to have some tensions from that, but it seems to have

worked quite well.

MR. SIHOTA : Continuing on the

line of correction and correctional facilities, as I understand it we

have some correction facilities that the government intends to phase

out, and obviously Oakalla is one of them. There are also two female

containment facilities that I understand will be replaced over time as

well. If I'm not mistaken, they are Twin Maples and Lakeside. Could the

minister advise whether or not those facilities currently house federal

inmates?

HON. B.R. SMITH : Yes, they do by arrangement with the federal government. One day very soon we will have a

[ Page 1290 ]

joint

federal-provincial institution to house female prisoners in this

province, so that federal prisoners — that is, female prisoners serving

over two years — will not have to go to Kingston. But by agreement we

do have federal prisoners in those institutions.

MR. SIHOTA :

That being the case, I take it there will be more federal prisoners at

that one joint facility than there are now at Twin Maples and Lakeside

simply because we're bringing in people from Kingston.

HON. B.R. SMITH : Considerably more.

MR. SIHOTA :

I take it, of course, that the federal government will be providing

additional money with respect to those federal inmates. There will be a

payment from the federal government, I assume. My concern is this, and

before I label the concern, let me also say this: am I correct in

assuming that the same will occur with respect to Oakalla — that when

Oakalla is phased out and replaced by, I believe, three facilities, we

will be seeing a greater number of federal inmates in that regard as

well? Or am I wrong in that?

HON. B.R. SMITH : Wrong

in the last conclusion. That is simply a decentralization of provincial

prisoners — Oakalla, male. The other is a repatriating of female British

Columbians serving federal sentences who will now be able to serve them

in a federal institution. The joint facility for women that we propose

to construct here in the province will have capacity for about a

maximum of 40 federal prisoners.

MR. SIHOTA : First

of all, I have some concerns which I think are self-evident about

housing federal inmates next to provincial inmates, given that federal

inmates are of course convicted of more serious crimes and provincial

inmates could be in there for nominal crimes.

If you

increase the number, will the federal government also be providing

additional funding for parole and probation services to deal with these

new federal inmates?

HON. B.R. SMITH : I don't think

the member has to believe that there's going to be a general uniting of

people serving very short sentences with those who are serving long

sentences. Unless there's a specific personnel and behavioural record

of compatibility, that's not going to occur. Any prisoners who are

considered to be dangerous or a bad influence on others will be kept

separate from the provincial prisoners. I guess that what we're doing

is sharing some land, and some joint staff for sure, but it doesn't

mean that we're going to mix dangerous long-term female offenders with

non-dangerous short-term provincial offenders. We are certainly not.

MR. SIHOTA :

It seems to me that there's going to be a limit to the number of

prisoners that the ministry is able to house in any of the facilities.

More provincial inmates will then probably be released and out on

probation. What I'm trying to get at is the capability of probation

services to handle that. And who is going to pay for that? Is that

going to be federal dollars or provincial dollars? Are we or are we not

going to increase the staff load of probation people? The reason I

raise that is because in the last while we've seen a 30 to 40 percent

increase in the caseload of these probation officers. We have seen them

provincially doing all types of custody, family and maintenance matters

as well, and now we have this potential influx of federal inmates down

the line. It's my submission, and I trust the Attorney-General will

agree with this, that the probation services in this province are

already overtaxed and that someone is going to have to pick up the

influx of people coming out and requiring probation services. Hopefully

we're not going to be putting electronic bracelets on all of them, so

I'm wondering what it is that the province is proposing.

HON. B.R. SMITH :

No, we're not going to do the latter and we're also not going to follow

the Alberta system where the province takes over the responsibility of

parole facilities and monitoring that for all these federal prisoners

that will now be housed here. That will be dealt with by the National

Parole Service in Alberta. The province is taking it all over on some

cost-recovery basis. We'll be dealing with our own prisoners and

they'll be dealing with theirs.

MR. SIHOTA : If

that's the case, then it still remains the fact that there will be more

provincial prisoners requiring probationary services. My question now

is: what plans does the Attorney-General's department have to increase

the number of probation officers and people involved in the probation

services program to deal with this problem of increased caseload? Apart

from the new ones that we're going to have out there, currently their

caseloads have gone up 30 to 40 percent, and currently they are

required to do custody, family and maintenance matters as well. So what

are the plans?

HON. B.R. SMITH : Madam Chairman, my

recollection of the last time the auditor-general looked at this within

the past year is that he found that our probation staffing levels were

about right and our caseload has been recently stable. But if there

were suddenly to be a marked increase in our caseload, there would have

to be an increase in probation staff. I don't quarrel with that, but I

don't think that the analyses that have been done bear out that we're

understaffed.

MR. SIHOTA : It just amazes me. I guess

we can all fall back on the auditor-general's report, which I've also

had a chance to read, but when you compare that with what people who

work in the system tell you, it just doesn't seem to match. I know,

both as a social worker, when I was doing that, and as a lawyer and

someone who operates next door to some of these facilities, that there

is a tremendous demand there. We'll continue to track it and if we need

to we'll ask questions on it later as well.

I want now to

move to the matter of inspections and standards within the

Attorney-General's department, the internal policing arm in inspections

and standards. I've always been a little troubled to see that it's

essentially an internal or self-regulating body. Can the

Attorney-General tell me whether or not he has any plans in place to

set up a neutral committee with lawyers, guards, and perhaps even

prisoners to deal with that type of regulation?

HON B.R. SMITH :

No, we do not intend to establish further esoteric levels of process

within the system other than what we have now; but anyone who feels

that they have been aggrieved by internal review not only has the right

to go to court, but also has the right to go to the ombudsman, as some

[ Page 1291 ]

have done. The ombudsman usually deals with these matters very thoroughly.

MR. BARNES :

Is the Attorney-General saying then, with respect to internal reviews

and the problem that some people feel exists with respect to police

investigating themselves, especially in matters of conflict . . . ? You

know the most recent one, Clark Winterton — and others. The

Attorney-General was quoted in the Times-Colonist of November 27, 1986,

when he suggested that a police watchdog might be arranged with a

citizens' committee, and I'm just wondering if the Attorney-General

still intends to pursue that approach to a serious problem. I think he

would agree that in a society that believes in due process and

fairness, perceptions are as important as any facts that might appear.

So I think his suggestion was a good one. There have been quite a few

inquiries — certainly through my office — wondering whether the

Attorney-General has in fact pursued this idea of a citizens' body that

would hear complaints against police and would be participating in the

investigations that might follow.

[4:30]

HON. B.R. SMITH :

I said no, we aren't planning that for internal security into our

custodial institutions; yes, for police we are. The reason I haven't

brought a bill into this place up till now is that we've been having

some heavy consultation about various proposed ways of doing this with

the constituency out there: that is, the local police boards, mayors,

the police association, the chiefs, and all those who are directly

affected. But I can tell you that my target is still to get a bill in

here this session in which there will be a mechanism to ensure that

ultimately the police don't just investigate the police — that there is

some sunshine into that system. I happen to believe that there needs to

be this; the time has come.

There's no better time than

with the introduction of the new process under the RCM Police Act,

which does have such sunshine. I think we need that provincially. I

think that's the experience that many have had; even if the police do

an exemplary job, as they usually do in these internal investigations,

the poor guy out there who's aggrieved, who watches this . . . . It

doesn't sit right with him; there's something wrong. People suspect a

coverup when there's no coverup — in fact, when the police have gone

overboard, sometimes even to victimizing officers, possibly, in doing

so, to try to ensure that there isn't a coverup. But still there's a

gnawing feeling out there in the craw of people who watch it; they say

no, these guys are just self-serving. I think that we've got to dispel

that. I definitely am committed to bringing in that bill. I'm sure

going to try to get it in here in this session, with some sunshine in

it.

MR. BARNES : I certainly want to commend the

Attorney-General for his response and for reassuring those people who

are anxiously awaiting his actions pursuant to his promise of some

sunshine in there, with police investigations of themselves, and

complaints, etc.

I want to commend the Attorney-General,

though — this isn't entirely a session of doom-and-gloom. I had the

good fortune to visit the Willingdon school not too long ago, and met

the director, and had a tour of the facilities. I must say, in all

candour, that I went looking for business. You know how it is when

you're in the opposition. At the time I was concerned about the growing

degree of teen suicides that seem to be quite exceptional in British

Columbia, and that was part of my investigation, to check some of the

facilities where teens were being detained. I think at this particular

time, at least at that school, there are cyclical problems with respect

to facilities being available. At the present time, however, it seems

to be a very well-run institution. The staff are highly committed. I

think the Attorney-General should be given any credit that he may be

able to glean from that situation, because certainly there are times

when we're not as happy with the activities of the government.

This

is sort of a miscellaneous series of things that I want to bring to the

Attorney-General's attention. I'd like him, before concluding his

remarks for today, to bring us up to date on the situation concerning

the One Way Adventure Foundation in Hedley. Perhaps he has already, but

I missed that.

HON. B.R. SMITH : You have not missed

it — through you, Madam Chairman. The report is not yet concluded, but

we expect it soon to be. We should have a report, I would hope, maybe

sometime in the latter part of next week, and it will be a report that

I will be making public — no question about it. I'll make public the

report, together with response to it.

MR. BARNES : I

guess I should as well give the Attorney-General a semi-commendation

for his response to an inquiry I made concerning B.C. Tel's Teen

Partyline program. There were some concerns, as the Attorney-General,

I'm sure, knows. No doubt he had quite a representation from different

quarters of the province. He did respond eventually to a letter. I

imagine he's pressed for time. I don't know if the Attorney-General is

aware, but I understand that that service will no longer be continued

by B.C. Tel. Your most recent correspondence indicated that you were

looking into the matter — you know, the usual approach. But I think

they have concluded that there will be no program, so you might be

interested in knowing that.

Interjection.

MR. BARNES :

Yes, sort of like that. He got a response back to me, although it

wasn't exactly up to date; but it was better than one I got from the

Health minister (Hon. Mr. Dueck) recently. I'll deal with that one

later.

Okay, if you want to respond to that, I'll give

you a chance. We're having some light exchanges here; nothing too

heavy. It's up to you.

HON. B.R. SMITH : I think your

comments on that are correct. I understand that it is being

discontinued. I was so flushed with the commendation mood that was

radiating from that side of the House that I just put on a tiny little

sort of commendation pin for that.

MR. BARNES : Madam

Chairman, just one final matter. I'll start by saying that I wrote the

Attorney-General on May 5. Did you get my note telling you I was going

to raise this? I hope you have it, because I wanted you to have a

chance to reflect on it. It's to do with a Doug Collins comment.

HON. B.R. SMITH : Yes.

MR. BARNES : You do have that? Okay.

[ Page 1292 ]

Well, as you know, I wrote you on March 5, simply stating:

"Enclosed is a copy of a Doug Collins column, "Get This Straight,"

published in the February 15, 1986, edition of the North Shore News . It

was sent to me by a citizen concerned that the contents are in

violation of the hate propaganda

section of the Criminal Code of

Canada. Please undertake to see if this is so, and advise of your

findings."

For the benefit of the House, Madam Chairman, I think I should read to you

the correspondence that I received from Mr. Colin R. Jones. It's a very

brief letter dated February 15:

"Dear Mr. Barnes,

"I am

writing to you concerning a column written by Doug Collins in a recent

edition of the North Shore News , and I am enclosing a copy together

with a letter that I wrote to the editor.

am personally against censorship, and I believe people have a right to

express their views. However, this

article is outright promotion of

hatred and prejudice, and as such needs to be stopped. I have read of

your concern for human rights and dignity, and I wonder if there is any

more that can be done to protest against this man and his diatribes in

a positive way."

"My wife and I were so

incensed by this

article that we felt we had to do something about it.

I will be writing to Ian Waddell, John Turner, Pat Carney and Grace

McCarthy."

And it is signed: "Yours truly, Colin R. Jones."

I wrote

a letter to the editor of the paper. I won't go into that, but the

column is in your hands, and I will just mention briefly what he has to

say in some of the contentious parts. I won't go through the whole

column. It just starts off in part: "For what do we hear now but that

another boatload of bulbous-eyed bug-hunters from Sri Lanka is on its

way to Canada by way of Germany, all yelling 'alms' and claiming to be

refugees — the liars." And with reference to the United Nations

protesting any action by the Department of Immigration, he says: "Do

they give a good god-damn if this country becomes another Third World

stew-pot? Do they pay our bills? Tell them to shut their traps."

He's talking again here about the Immigration department:

"For

years now, you've been keeping white folk out and letting every other

s.o.b. in. It's all the same to you if we all wind up wearing

loincloths. All you care about is kissing Third World ass at cocktail

parties. What we get from you is a lot of dog's vomit . . . ."

MADAM CHAIRMAN :

Hon. member, could I just intervene for a moment? I'm not absolutely

certain that some of the language in that letter is appropriate under

our parliamentary rules.

MR. BARNES : I would agree

with you, Madam Chairman. I appreciate your bringing me to attention.

But it shows you the seriousness of the subject. I will be pleased to

withdraw if those terms are unparliamentary, but they were written by a

columnist in this province. This is why I'm raising the issue with

respect to whether it violates the Criminal Code of Canada.

MADAM CHAIRMAN : Thank you, hon. member. A point of order has been called by the Attorney-General.

HON. B.R. SMITH :

Perhaps the member would consider filing a copy with the committee so

that other members can read it. I might just say to the member that I

think it's the most appalling stuff that I've read for some time. I

read it only yesterday, and I was quite appalled by it, and appalled

that the newspaper would print it. We're going to have a legal opinion

on the thing, but it's an appalling piece of journalism.

MADAM CHAIRMAN :

Could I suggest to the second member for Vancouver Centre that he table

the letter after committee. It can't be done during committee.

MR. BARNES :

Madam Chairman, I appreciate your suggestion. I accept it. I want to

thank the Attorney-General for his undertaking to look into this

matter. My only regret — with some understanding that he's quite busy —

is that he hasn't been able to reply before now. Nonetheless, I will

conclude my remarks.

MR. MILLER : I'm raising an

issue that really is of concern to me locally, but it's probably an

issue of concern around the province: the treatment of juvenile

offenders. I raise this, and I intend to raise it again under the

Minister of Health's estimates. I raised it originally under the

Minister of Social Services and Housing (Hon. Mr. Richmond), because as

that minister indicated in his remarks, there are children who fall

between the cracks.

If I could sort of broadly outline the

problem, we have a serious problem in terms of street kids in Prince

Rupert. Generally there is a correlation through the three ministries,

in that we find that some of those children, or a good number of those

children, really come from homes where parents are reliant on social

assistance, and it's a vicious circle with respect to these children

and their families. We also find in the area of health care that there

is a severe shortage of professionals to offer assistance in dealing

with these children; for example, psychological counselling. There is a

really serious problem in the community.

I'll ask the

Attorney-General a question. It seems to me that there is a need to go

beyond the norm in terms of the three ministries interconnecting, and

trying to deal with this question on an interministry basis. I was

assured by the Minister of Social Services and Housing that the

deputies meet once a week and are cognizant of the situation. I want

the minister to respond to that general concern in terms of the

approach in dealing with that question, the approach that his ministry

is taking and perhaps should be taking with regard to the other

ministries in attempting to reach some solutions in terms of delivery

of services.

Secondly, we had a situation there where the

supervision of community service work was contracted out to a private

individual. I'm perhaps more aware of this than others might be,

because that individual had his office down the hall from mine. It was

a daily, common occurrence for young kids, tripping up the stairs,

going to the door, to find the office locked, with a little note on the

door: "I'll be back later." It's a serious matter. The sentence t