1986 Legislative Session: 4th Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 27, 1986

Morning Sitting

[ Page

8363 ]

CONTENTS

Committee of Supply: Ministry of Consumer and Corporate Affairs. (Hon. Mr. Veitch)

On vote 14: minister's office — 8363

Mr. Blencoe

Mr. Stupich

Ms. Sanford

Income Tax Amendment Act, 1986 (Bill 8). Committee stage — 8369

Third reading

Motor Fuel Tax Amendment Act, 1986 (Bill 9). Second reading

Hon. Mr. Curtis — 8369

Mr. Stupich — 8370

Mr. D'Arcy — 8370

Hon. Mr. Curtis — 8370

Insurance Premium Tax Amendment Act, 1986 (Bill 10). Second reading

Hon. Mr. Curtis — 8371

Mr. Stupich — 8371

Mr. Cocke — 8372

Hon. Mr. Curtis — 8372

Taxation Statutues Amendment Act, 1986 (Bill 11). Second reading

Hon. Mr. Curtis — 8373

Mr. Stupich — 8373

Income Tax Amendment Act (No. 2), 1986 (Bill 23). Second reading

Hon. Mr. Curtis — 8373

Mr. Stupich — 8373

TUESDAY, MAY 27, 1986

The House met at 10:05 a.m.

Prayers.

MR. SKELLY: Mr. Speaker, I have the honour to introduce today

in the gallery the visiting delegation from Abashiri, Japan, led by

Mayor Tetsuo Ando, and the chairman of the Abashiri twinning committee

from Japan, Mr. Kobun Ohbayashi, and also their delegation who has come

to visit us in Port Alberni from the city of Abashiri on the island of

Hokkaido in Japan. The twin city arrangements were formalized in an

unseasonable downpour, Mr. Minister of Forests (Hon. Mr. Heinrich), on

Saturday of last week, and a good time was had by all. We're looking

forward to a closer relationship between the city of Abashiri and the

city of Port Alberni, which we hope will expand into cultural, travel

and economic exchanges in the future. I ask the House to welcome our

delegation from Japan, who are accompanied today by alderman Don Whyte

from Port Alberni.

HON. MR. HEWITT: As a person who has visited the beautiful

island of Hokkaido, and I enjoyed visiting many farm operations there,

may I say on behalf of the government side: "Kanishua."

Orders of the Day

ESTIMATES: MINISTRY OF

CONSUMER AND CORPORATE AFFAIRS:

(continued)

On vote 14: minister's office, $212,804.

MR. BLENCOE: Mr. Chairman, I want to mainly speak this

morning about tenant issues and the residential tenancy branch, some of

the concerns we have with the current branch and some of the issues we

think have to be resolved.

Before I get into that, I would like to go back to yesterday's

discussion and get a clarification from the minister concerning

Victoria Mortgage Corporation. The Victoria Mortgage Corporation, as

you know, ran into serious difficulty and the member for Vancouver

Centre and myself have prepared a number of recommendations for the

government.

One of the things that struck me as odd was that the minister said

he is still investigating the perhaps false advertising, or the

misleading advertising, of that company. Before this minister took

over, I had a number of discussions with the former minister and put

before him things that I considered to be misleading in terms of how

they purport to do business and what they do for their depositors. The

former minister said they were not going to investigate, that they

didn't see anything wrong with what the Victoria Mortgage Corporation

had done or how it advertised itself. I ask the minister to clarify

this conflict, because yesterday he said the investigation was ongoing.

HON. MR. VEITCH: For the clarification of the member, what I said yesterday

was that there was an investigation or there is an investigation underway regarding

a question of misrepresentation, We weren't talking about your advertising,

or anything else, not necessarily in that particular.... I don't intend

to comment any further while the investigation is underway. There is an investigation

underway concerning possible misrepresentation.

MR. BLENCOE: I'm certainly pleased to hear that, because

there are 300 or 400 mainly elderly in this community who have been

waiting for that kind of investigation for it must be nearly a year now.

Although I welcome the investigation, I do have to say that the

delay in this situation has been somewhat disturbing. The former

minister gave no indication that the investigation was going to

continue, and it would appear he didn't think it was a priority, and

now we have a minister saving the investigation is continuing. I think

the work in this area has been sloppy, to say the least, and there are

a lot of people, particularly elderly, who have been waiting for some

response from this government — I would add that it's not only with the

Victoria Mortgage Corp. but with the Teachers' Co-op, which, as you

know, is another issue.

With Victoria Mortgage Corp. I have to really indicate from this

side of the House that we are concerned and really don't support the

way the government has handled this issue and the delay. I forget

exactly how long ago, but I put before this government — and so did the

member for Vancouver Centre — the issues and have asked a number of

times for investigations and for some follow-up policy or legislation

that can clear up and deal with this kind of problem in the long term.

I will leave it there, but on behalf of the people that I have talked

to in my riding and Vancouver who have been waiting for a long time for

something to happen, the delay is really quite disturbing.

I want to talk a little bit this morning about the residential

tenancy branch. I will commence by stating that we would like to see

some major changes there. I am sure the government side will recall the

debate when the rentalsman's office was cancelled, and I'm not going to

go through why we thought the rentalsman did a terrific job, because

those things are all on the record. I think those things have all come

true in terms of the problems that have been created by the

cancellation of the rentalsman's office.

In our estimation, we need to return to the office of the rentalsman

in the province of British Columbia. We need to have that very

high-profile office that works on behalf of tenants and landlords in a

very financially efficient way and which is efficient in terms of

dealing with issues on behalf of tenants and landlords. We find now

that the majority of tenants have just no idea that there is any

mechanism to deal with their problems. Most tenants today just forgo

trying to deal with issues. We constantly — I know I do — meet tenants

who say: "Such and such is happening but why bother to do anything,

because there's such a long process now." In terms of trying to deal

with problems, we will continue to advocate the return of the office of

the rentalsman in British Columbia.

[10:15]

I think it's a very useful study that has

been done by the tenants' rights coalition in Vancouver. I'm sure the

minister has received a copy. I hope the minister and his staff have

gone through it because I think it's a serious indictment of the

residential tenancy branch and what it's not doing. I might add that

thousands of British Columbians live in tenancy situations. It's not a

matter of dealing with just a handful of people. I don't have the

statistics in front of me, but they're astronomical in terms of the

number of households that live in tenancies. The study highlights a

number of the problems in

[ Page 8364 ]

the residential tenancy area. I'll go through some of them, and the minister may wish to respond.

Again, it's a frustration on this side of the House; we'll present

these concerns, but this government has shown no support for tenant

problems in the last few years. As a matter of fact, they have weakened

the legislation so badly that, as I say, a majority of tenants now

don't bother approaching the residential tenancy branch.

Let me go through some of the reports that come out of the tenants'

rights coalition recommendations. I should add, Mr. Chairman, that the

coalition is made up of a number of well-established and well-respected

organizations in Vancouver, and I think they speak for thousands of

British Columbians who require better protection in tenancy. Here are

some of the problems.

Licensees. It's the feeling of the tenants' coalition — and we agree

with this — that all permanent residents of hotels and rooming-houses

be included as tenants under the Residential Tenancy Act. We've

advocated that a number of times in this Legislature. We believe it's a

loophole in the legislation that needs to be plugged. We faced that

with the Expo evictions. In our estimation, the people who live in

those kinds of accommodation hold permanent tenancy arrangements and

should be included. They have the right to be included, and to some

protection.

Tenancy agreements. A prescribed standard tenancy agreement should

be introduced and authority given to the arbitrators to enforce

compliance. We don't have a standard tenancy agreement. The minister

shakes his head, but this is the area....

HON. MR. VEITCH: Point of order, Mr. Chairman. While I

wouldn't mind addressing these situations with the hon. member in

another forum, the need for legislation and changes in legislation are

certainly not something that ought to be addressed in estimates.

MR. CHAIRMAN: The minister has a valid point of order. On the administrative functions of the minister....

MR. BLENCOE: I won't refer to legislation. I will refer to

weaknesses we see in the current policies. The weakness that I've just

outlined is the lack of a standard tenancy agreement, and we feel that

that should be in place for arbitrators to utilize and to enforce

compliance.

A third area of concern, Mr. Chairman, is repairs. Provincewide

minimum repair standards should be set, incorporating municipal

authority for local enforcement with avenues for expedient tenant....

MR. CHAIRMAN: Order, please. Hon. member, you are involved in

necessity for legislation or changes to legislation. We are debating

here today the administrative functions of the minister under vote 14.

MR. BLENCOE: Mr. Chairman, if I cannot put before this House — and I won't mention the word "legislation" — the concerns with

existing policies.... All I'm stating are problems with repairs. This

is the House that we bring tenants' concerns before and where we ask

the minister to respond. I'm suggesting that repair standards are poor

under current policy, regulations and legislation. That's

straightforward. There's nothing wrong with stating that, I hope.

The whole area of security deposits is a boondoggle and should be

cleared up. Many tenants never see their security deposits returned

because landlords hold onto them, don't return them, and all sorts of

disputes arise over security deposits. There needs to be some serious

thought given to that. I also believe that security deposit disputes

should be removed from the court system and handled by a rentalsman's

office, currently called the residential tenancy branch.

The whole area of affordable rents and security of tenure is a major

issue for us, Mr. Chairman, and I wish to go through that in a little

more detail this morning. Security of tenure has been an issue in the

last few months, and I refer again to what's happened in the downtown

east side. We believe that security of tenure should include the

following specific measures in addition to the fundamental principles

of adequate and affordable housing as a basic right in the province of

British Columbia.

First, Mr. Chairman, in terms of security of tenure, provisions for

repairs should be enforced. Tightening of control over evictions to

just cause....

MR. CHAIRMAN: Order, please, hon. member. We're on the

minister's administrative functions. Local bylaws, repair bylaws, are

not in the purview of the minister. Tenures are a common-law type of

agreement between people. If you would get within the minister's

estimates....

MR. BLENCOE: Mr. Chairman, there's a tradition that usually we put forward our concerns in this part of the estimates.

MR. COCKE: On a point of order, Mr. Chairman, I'm amazed that

the minister jumps up on a point of order. One of the minister's

functions in the past has been: how about some constructive criticism?

The member comes up with constructive criticism, and now all of a

sudden the Chairman calls him to order every time he makes a move. As

far as I'm concerned, the minister's vote has latitude, and that

latitude is one of constructive criticism, and it can't be interpreted

always as being anticipating legislation. What the member is talking

about is the policy of the department, and what that policy should lead

to.

MR. CHAIRMAN: The comments are accepted.

MR. BLENCOE: Mr. Chairman, let me just continue with the

issue of security of tenure and finish by saying that we should be

tightening up the control over evictions for just cause. There are some

real abuses in that area. I know the minister is aware of the things

I'm talking about, and it's an area that we should be discussing,

perhaps by all sides of the House, Mr. Chairman.

The whole question of security deposits. Either abolish security

deposits or provide better management through a trust arrangement. I'm

not going to go into details. I'm sure the minister is aware of that.

I'm sure his staff can tell you that.

The $30 user fee. Either do away with it or bring back a cheaper

method of using the rentalsman's office with full powers returned,

appeals to be dealt with through the courts. No problem with that.

On the whole question of rent review, we don't have rent control or rent review in the province of British Columbia

[ Page

8365 ]

today. We feel that we don't want to go to rent control, but what we would

like to see is a process of rent review whereby in a fair way — tenants who

feel their rents don't fit the marketplace — a landlord can't put them

up any amount he or she desires. There should be a process of rent review, and

it should be aimed at a prescribed sector of the housing market and pegged to

the inflation rate. The system would protect mobile-home owners and residents

of hotels and rooming houses. And rent review does not affect housing starts,

because it would not be on new construction. That myth has been discredited

years ago and is not.... I don't wish to go into details of that today.

A better approach in terms of the question that the rent-review process hurts

housing starts is to look at the external factors such as U.S. Interest rates

and federal policies. I think we need to look at a fair, balanced rent-review

process, one that is fair to both landlords and tenants, and at the moment we

don't have any process like that.

On the whole question of displacement of low-income people again,

we've gone over that for a number of weeks in this House in terms of

the Expo situation, and that re-emphasized the need for much better

legislation. We would hope the government will pay attention to that.

MR. CHAIRMAN: The hon. member is aware that we are not

talking legislation. A great deal of the debate has been made at

previous legislative debates.

MR. BLENCOE: I mentioned the word legislation. This morning

all I am trying to do is offer positive suggestions to the government

for change that I think would help British Columbians. It is meant in a

sincere way, and if I refer to the word legislation.... I will do my

best not to use that word.

Mr. Chairman, I feel that the working poor of this province are

particularly affected by the lack of security of tenure and by the

problem of no rent review, and, again, I think that has to be looked at

in the province of British Columbia.

MR. STUPICH: A constituent of mine has had some exchange of

correspondence with the ministry. It's the Ladysmith Nursery School,

and I have copies of the letters back and forth. The most recent one

I've seen is dated April 7. There might have been another one I'm not

aware of. It was to do with a Mr. Currie, of Currie Weatherley and

Associates, and some problems they were having with him. The insurance

administrator in the ministry said that if there wasn't something

further very soon, then further action would be taken. I can wait for

the answer to this if the minister doesn't have it with him at this

time.

HON. MR. VEITCH: Just first of all referring to some of the

statements the hon. member made relative to financial institutions in

the province of British Columbia, the hon. member, as I mentioned

yesterday, when this document is finally released, will do well perhaps

to have a look at this discussion paper which we will be putting out:

"Perspectives for Growth in British Columbia's Financial Sector." Some

of the items that he addressed are addressed in there by way of

questions.

The Teachers' Investment and Housing Cooperative, hon. member — I don't

want to reopen that one again, by any stretch of the imagination. However, having

said that, it's important to realize that the institutions....

Interjections.

MR. CHAIRMAN: The member for Victoria.

MR. BLENCOE: Point of order. Mr. Chairman, the minister and I

are trying to have a fairly good conversation this morning, and the

member for Surrey (Mr. Reid) is being incredibly rude and disturbing a

rational, intelligent discussion. Perhaps you would just ask him to

come to order.

MR. CHAIRMAN: The Chair is confident that the member for

Surrey will recognize that the minister is on his feet and has the

opportunity to speak. The member for Surrey will have an opportunity as

he so desires.

HON. MR. VEITCH: Thank you for protecting the committee, Mr. Chairman.

At any rate, the institutions which do fall within our control and

which are controllable, such as trust companies and credit unions....

We're very careful, hon. member, to ensure that any financial

instrument that flows from those institutions is clearly delineated on

the face of it; or at least there's full and absolute disclosure as to

whether or not that instrument is covered by deposit insurance. I

referred yesterday to the so-called Ethical Growth Fund that the

Vancouver City Savings has in place. Across the top of each one of

those certificates is the notice that "this instrument is not protected

by any form of deposit insurance" — or words to that effect. I would

like the House, the committee and the people of British Columbia to

understand that.

[10:30]

With respect to the residential tenancy situation, hon. member, the

legislation remains essentially the same with respect to the resolution

of disputes. Arbitrators are dealing with repair standards, wherever

these situations are reported to them, and legislation does provide for

arbitration in cases where there is a rent increase, or where that rent

increase may be intended to evict someone.

Just a few numbers for you: during the first ten months of the

fiscal year, 2,504 arbitration applications were processed. There were

76,753 telephone inquiries answered, 641 information files resolved,

and 9,742 office interviews conducted. I honestly believe that by and

large, except for a few isolated situations.... If you're referring to

hotels at Expo or something of that nature, the hon. member is

completely aware that that does not fall under any legislation which I

administer. Since 1983. when this government removed rent controls, the

vacancy rate has hovered at about the 2 or 3 percent range. We found

most landlords to be quite reasonable in not dramatically increasing

rents. Vacancy rates in Vancouver have been relatively high,

approximately 2.3 percent, and in such a climate it's unlikely that

there will be any real need to have rent controls or anything of this

nature.

As I said before, other types of accommodation, such as hotels,

boarding-homes, and bed and breakfast houses and so forth, are not

covered under existing legislation.

[Mr. Strachan in the chair.]

MR. BLENCOE: I'm going to go back and continue to list some

of the concerns we have in this area. I want to respond to the

minister's use of statistics this morning in terms of what the

residential tenancy branch is doing. The survey by the tenants'

coalition is a very exhaustive study. I

[ Page

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think it's an excellent one, and I would hope that

the minister quietly — he would never admit to the opposition, of

course, that he would even take anything like this seriously or make

any changes — might take a took at some of these things, because there

is, I think, somewhat of an indictment of the current process.

They did a survey of problems, particularly non-monetary problems,

and that's one of the areas where a lot of things are not taken up or

not resolved. Non-monetary problems, actions taken, percent of tenants

with problems: problem taken up with the landlord/manager, 89 percent;

residential tenancy branch, 0.9 percent; city inspectors, 4.1 percent;

other actions, 6 percent. The bottom line is that only 26 percent of

those tenants with non-monetary problems got any success; 74 percent of

tenants who had any non-monetary problem in this — and it's

scientifically done; it's a well recognized study — were unsuccessful

in resolving problems. The serious indictment — I use that word a lot

this morning, because I think this branch is in serious trouble — is

that only 0.9 percent of those with problems bothered with the

residential tenancy branch. That's no reflection on staff, or anything

like that. You know why? It's because they don't get anything resolved

there. There's a feeling out there that the government's not serious

about the tenants' issues.

MR. REID: Oh, come on!

MR. BLENCOE: There is a feeling about that. When we had the

office of the rentalsman, there was a feeling that the province of

British Columbia was serious about dealing with tenant issues. Today

there isn't that feeling at all.

MR. REID: It's a caring, feeling government.

MR. BLENCOE: A caring government. Well, the record speaks for itself.

About some of the other problems: a number of trends were apparent in the study.

Interjection.

MR. BLENCOE: Mr. Chairman, I really ask again if I could

perhaps ask the member for Surrey to come to order and allow us the

opportunity to discuss with the minister some of these issues. He has

many tenants in his riding, and if they knew....

Interjection.

MR. CHAIRMAN: Order, please. The second member for Surrey will come to order.

MR. BLENCOE: Thank you, Mr. Chairman. The study found that a

number of trends were apparent: a vast increase in the number of

security deposit cases, a severe drop in the number of repair order

applications to the new residential tenancy branch, an increase in the

level of illegal acts and a greater incidence of harassment of tenants,

just to name a few. In the interviewing of tenants — and this is a

serious point for the minister to take note of — there was an

overwhelming response from tenants that with the office of the

rentalsman being abolished, tenants' rights had been abolished and

landlords were free to act as they wished in managing their properties.

Illegal rent increases and illegal seizures of goods were not uncommon.

There was an overwhelming feeling that the province of British Columbia

had very much abandoned tenants here. That came through loud and clear

in the study.

The type of tenancy problems which are not being resolved were

non-monetary tenancy problems; I gave you the statistics a minute ago.

The largest involved major and minor repairs such as heating problems,

plumbing, appliance repair, broken windows and frames, etc., etc.

Tenants are just not getting those things resolved. Heating problems —

in my riding here, I have spent two or three days trying to get heat

turned on in buildings that house senior citizens, because the

landlords.... Let me say, let me really clarify very quickly here, that

the majority of landlords are very dedicated and very sincere people

who try to do a job, but unfortunately in all walks of life there are

those who abuse the system. Unfortunately, we now have a system that

really does not.... I talk to a landlord who has turned off the heat

for whatever reason and won't repair it, and you get a bad landlord who

says: "Oh, I don't have to bother with that; no one's going to do

anything to me. I'll take a couple of days. I'll get it fixed

sometime." I remember that in one building here in James Bay, if I

recall, during that cold snap there were senior citizens without heat

for at least a day and a half. That landlord just didn't seem to really

care.

When we had the office of the rentalsman, I could phone the office

up. I phone the residential tenancy branch up now, and I just get a

runaround. "Oh, well, we don't really deal with that issue." "Well, I

suppose if someone comes and complains, we might look at it." When I

talked to the rentalsman's office, the rentalsman officer was on that

issue tout de suite, on top of the landlord and saying: "Hey, you get

that heat turned on fast." Really all you've got now is a storefront, a

PR number, with the residential tenancy branch. It doesn't resolve

issues quickly and efficiently at all. Those are the kinds of issues

that have got to be dealt with. You've got to find better mechanisms.

Do you want to respond to that?

HON. MR. VEITCH: The hon. member has just proven that the

Residential Tenancy Act is working. If you have a situation where — no,

just a moment — you have 89 percent of the disputes that he spoke of

being dealt with between the landlord and the tenant, isn't that the

proper place? Isn't that the proper place to deal with these things?

The intent of the legislation is that the tenants take their problems

up with the landlord without resorting to arbitration.

You also mentioned that the majority of landlords are trying to do a

good job. Hon. member, we do have the arbitration

section 1n case they

are not. I can tell you right now, if heating or severe repair problems

are in evidence, and if the tenant makes an application, the arbitrator

will immediately deal with this problem. If it's not happening, I would

like the hon. member to bring this to my attention. There are very few

landlords that are causing problems. There may be a few lawyers or a

few accountants or a few anything that are causing problems in our

society. If you want to legislate, hon. member, for the minority to the

detriment of the majority, I don't think that's what it's all about. I

may be just broaching into another ministry and I'll try not to, but

the idea is to provide accommodation at the best possible rate. That is

best done, in our opinion, by the checks and balances of the

marketplace, not by legislating against every incident and by

[ Page 8367 ]

setting up a bureaucracy that causes as many problems as benefits.

MR. BLENCOE: The minister didn't get the point I was making

with the numbers I was quoting. He's right, the majority of people are

going to the landlord to try to resolve problems. But I said 74 percent

of those problems are unresolved; the landlord doesn't bother with

them. That's the survey. Only 0.9 percent of those people go to the

residential tenancy branch. You might as well cancel that residential

tenancy branch in terms of its effectiveness. Seventy-four percent of

people trying to get non-monetary problems resolved don't get them

resolved; totally unsuccessful. You don't have any strength in the

legislation, in your policies, to give tenants the right to say: "Here

I have" — whatever you want to call it — "the policy that says you have

to do this, this and this." At the moment they don't have that.

Seventy-four percent are unsuccessful in resolving problems. That's in

your riding and all the other Vancouver and greater Victoria tidings.

For the majority of people living in tenancies, 74 percent of

non-monetary problems are being unresolved. People are just not

bothering; they're taking it. I don't think that's satisfactory.

I think what it comes down to, Mr. Chairman, is that it is a

philosophical question of how we view the kind of homes. We tend to

still sometimes think that if you don't own your own home, it's really

not a home. Well, Mr. Chairman, more and more in today's society people

live in tenancies or live in apartments; that's their home. They're

entitled to better protection. Seventy-four percent. It's an

indictment, Mr. Chairman. It's something I think the minister can't

refute and should look into.

Another area of concern, Mr. Chairman, is seizure of goods and

lockout. I think there should be some resolution that gives the

residential tenancy branch the authority to require landlords to

rectify illegal acts, and authority to levy fines for non-compliance.

Non-compliance is astronomical because there's no clout, no clout at

all. The landlord doesn't have to do it. Non-compliance is the norm in

the province of British Columbia.

Abandonment: I think the definition of abandonment, Mr. Chairman,

has to be redefined. And I think the residential tenancy branch has to

have the right to enforce the return of goods and to prosecute for

non-compliance. Non-compliance is the norm in the province of British

Columbia.

Harassment, security of tenure: I think this whole area of

harassment of tenants, Mr. Chairman, is something that has to be looked

into. I constantly get letters and hear from tenants who are being

harassed, being threatened with eviction. There's no mechanism where

that can be dealt with at all. It's something that's totally

unsatisfactory.

Tenants in the province of British Columbia, Mr. Chairman, really

are second-class citizens in terms of the current legislation. I think

there has to be a far more accessible arbitration system. Restore all

the offices of the rentalsman, with full staffing, as set out in the

Residential Tenancy Act of 1974. I'm sorry, Mr. Chairman, I'm referring

to future legislation, but I'm saying the current system is not

adequate. The minister knows that; he knows that. Abolish the $30 user

fee. Abolish it and establish an internal administrative review system.

It just goes on day to day, that department.

[10:45]

When I think of the staff and the people we used to have in that

rentalsman's office, and how dedicated they were and the things they

resolved quickly and efficiently, and then I think of what happens

today.... I think most MLAs will say they don't bother with the

residential tenancy branch anymore. I certainly don't bother with it

any more, I don't get any answers, and it's no reflection on staff.

It's just that they have no clout. They sit there, and there's very

little for them to do.

Most people in the province of British Columbia.... I have some

statistics on that, Mr. Chairman, and I'm sure the minister is aware of

them. People don't even know the residential tenancy branch exists.

About 5 percent of all those surveyed in this study-an extensive survey

in Vancouver correctly identified the residential tenancy branch as the

body replacing the office of the rentalsman. Five percent! Well, you're

not doing a job. I know that you're a new minister, but you're part of

that government and part of the problem.

Interjection.

MR. BLENCOE: Good. I'm glad to hear you're part of the

solution as well. But only 5 percent, Mr. Chairman! I know they're a

good staff, and some of them who are around still were part of the

rentalsman's office and have got good ideas. But we happen to feel on

this side that tenants in British Columbia deserve better treatment and

better policies — let's not talk about legislation.

There's another area. I'm listing them all, and the minister may not

wish to respond to them, but I think it's important to get these on the

record, Mr. Chairman, because we've had this residential tenancy branch

now for a few years. We believe there should be an appeal procedure

with a 30-day limitation period at no cost to the parties. As you know,

at the moment the arbitrator's decision is binding. I think there has

to be.... I know of some arbitration decisions that have been somewhat

questionable. I think there has to be an appeal system. I'm not sure

that system is working as effectively as it should.

I think there should be a separate body in charge of investigations

and issuance of charges for all offences under the Residential Tenancy

Act. At the moment nobody — landlords and, I guess, tenants as well —

really feels there is any teeth there or that they have to comply with

the regulations. There needs to be some tightening up. I think tenants

have to feel — and landlords too.... We need fair legislation. I happen

to feel, though, that this current legislation is stacked somewhat in

favour of landlords, and I think we need to balance that out a little

bit.

I want to go back, Mr. Chairman.... Those are some of the major

concerns that we have on this side with the current approach to tenant

issues in the province of British Columbia. There are a couple of other

things that I want to bring to the attention of the minister before I

leave this. The level of awareness among tenants facing problems was

very low in terms of their rights. When asked about the current legally

allowable rent increase, 42 percent could not answer. Only about 30

percent were able to correctly state that rent increases could now be

any amount; and only 18 percent could identify that a written

three-month notice of rent increase is legally required. There is a

real lack of awareness of that particular branch. When asked about what

kind of notice a landlord must give of an eviction for failing to pay

rent, 45 percent could not answer. Only 67 percent could respond that a

standard form was required and/or that the notice period was ten days.

When asked how soon after one moves a

[ Page 8368 ]

security deposit must be paid back, 65 percent were

not aware that deposits must be returned within 30 days. When asked

whether a tenant has to notify a landlord before moving out, almost all

— 98 percent — were aware that notice was required. Only 35 percent,

however, could properly state that the notice must be in writing and

given one month prior to moving out.

There are all sorts of.... I recommend the study. Maybe the minister

hasn't looked at it. Maybe his staff has. There are all sorts of other

sections of this study that I think are really very useful. Of course,

I think the indictment is the recognition that only 5 percent of those

surveyed correctly identified the residential tenancy branch as the

body replacing the office of the rentalsman.

Mr. Chairman, those are a number of concerns that we have with

residential tenancy. We feel that we need to tighten up on tenant

issues such as tenant rights, security of tenure and eviction for just

cause. We feel that those who live in rooming-houses need protection.

We feel there's a need for a decent process of rent review, when it can

be determined that a rent is indefensible in terms of the market. Quite

frankly we feel the residential tenancy branch is not doing the job for

thousands and thousands of British Columbians who are tenants, and we

would ask sincerely for some objective review of that branch.

HON. MR. VEITCH: Well, I've read the document that the hon.

member is alluding to, and yes, there are a lot of questions asked. I

suppose, if you were not having any problems and someone came up to you

on the street and asked a legal question, you might or might not know

the answer. The only time you know the answers to these things is when

you have a problem, and it's up to the individual citizen to search out

the areas and find out. The particular organization to which the hon.

member alluded asked tenants if they were having any problems, and to

their dismay they said: "No, we're not having any problems." Does that

bother the hon. member too much?

What is the point of the exercise? The point of the exercise is to

have accommodation at the best possible price and to control any

untoward practices. The residential tenancy legislation is very

detailed about the landlord's obligations, and deliberately so. The new

legislation, as the hon. member may or may not know, has exactly the

same procedures as the previous legislation regarding abandonment of

chattels and seizures. The same remedies are available as prior to this.

Interjection.

HON. MR. VEITCH: The way it gets enforced is for someone to

put the case before the arbitrator. That's why we have a system of laws

in this country. You talked about the $30 fee. I'm instructed that in

almost all cases where there is an emergency, Human Resources pays this

particular fee.

No legislation is perfect, but I think it is a better system. It

certainly follows more closely my philosophical bent to have as few

controls as possible, but what are we looking for in the end? We are

looking to establish a climate where we can have proper rental

accommodation for people, and I think you do that better without a

proliferation of unnecessary controls.

MS. SANFORD: Mr. Chairman, I want to raise a couple of issues

with the minister with respect to the grape industry and find out what

is happening regarding imposition of the surcharge on all wines sold in

B.C., which was to pay for the bail-out program of the grape growers,

and more particularly the bail-out of Calona wines, as I understand it.

I don't know that that bail-out was ever necessary for Calona Wines. I

can certainly understand the bail-out required for the grape growers,

but I have a lot of reservations about the money that was paid to

Calona Wines to buy out their surplus red wine and convert it.

I would like to know what moneys have been collected under the

program. I don't know if the minister has that information available

right now or if he can give me even an approximation of the amount that

has been collected under that program, and whether or not that program

will end at the end of December this year. I understand it was

originally suggested that the program would end then and that surcharge

be dropped. Can he give me some assurance that the surcharge on the

wine will be dropped regardless of whether or not they have recouped

all of the money that was paid out under that bail-out program?

The other question I have relates to the wine standards that have

been proposed and advocated by the grape marketing board for a number

of years. In a copy of correspondence from the previous minister dated

September 13, 1985, they had established a special committee to look

into this whole grape industry. At that time, one of the guidelines for

this particular committee was the possible establishment of provincial

wine standards. I know the industry is still concerned about this. I

don't know what the delay is through the provincial government for

establishing some kind of standards for the wine industry.

Would the minister comment on those?

HON. MR. VEITCH: In my discussions with the wine group, the

red wine problem appears to be dissipating; it is now becoming

manageable. The replanting to other varieties of grapes is now in

process. It is intended that the surcharge will be in place until

approximately $3 million in costs is collected. We haven't collected

that yet. I can't tell you exactly what we've collected to date; I

suppose I could get that information for you if you want it and bring

it back to you.

Interjection.

HON. MR. VEITCH: I don't know when the cutoff will be, but

it's assumed it will be around the previously announced date. It's hard

to tell on the consumption. With increased wine sales during Expo,

perhaps it will be sooner.

I might also mention to the hon. member that we will be meeting with

the wine and grape producers in the next few days to talk about their

opportunities and their problems and see how we can cooperate with them

to help to increase that industry in British Columbia, which employs

about 2,000 people at the present time.

A standard is now is place: for each four tonnes of local grapes,

they're allowed to import one tonne of grapes from another source.

MS. SANFORD: Mr. Chairman, I didn't hear the minister say anything about the wine standards. Has he established any criteria there?

If the minister is going to be meeting with the people from the

industry over the next few days, I wonder if he would talk about wine

standards and give the industry some assurance

[ Page 8369 ]

that that's going to be established. I know that

the grape growers are very concerned about this, and I would like the

minister to put this on the agenda for the meeting. In addition to

that, the minister has talked about the 80/20 formula, which doesn't

really work out to an 80/20 formula, Mr. Chairman, because of the fact

that they now have these import credits on new plantings, and other

ways and means in which that 80/20 can be circumvented and changed

around drastically. It's more like 55/45, when you look at all of the

problems that are involved with the present formula.

[Mr. Ree in the chair.]

It was fine for the minister to get up and talk about this easy

formula that's been established, but that's not the way it's working at

all. I hope that he will put that as number two on the agenda, because

I think that the minister and the government have an obligation to

ensure that the grapes that are produced in this province are utilized

here so that we don't get into the kind of mess which was created by

government prior to the bailout program.

Government knew what was happening respecting imports. They knew

that the wine industry was not insisting on replanting white grapes or

replacing red grapes that they were producing far more of than the

industry could use. That wasn't happening. The ministers were aware of

that, the government was aware of that, and yet they took no action

until they got to the stage where the wineries simply cancelled the

contracts with the grape growers, forcing the government to bail out

the grape growers. In the process, Mr. Chairman, they bailed out Calona

Wines as well. I had a lot of questions about that, a lot of

reservations around the decision that was made surrounding that bailout.

Those are issues: the wine standards and the import quotas at this

stage, with respect to the special import credits that are now given to

the wineries for new plantings with the contracts that they have. What

is happening right now with those wine standards — anything?

[11:00]

HON. MR. VEITCH: Mr. Chairman, the hon. member will

appreciate that there's an industry standard, and you can't do it on a

case-by-case basis. You'd have to work it across the industry. What

happens here — you talk about the grape credits — is that there's a

time lag. I'm not a gardener or a botanist. People come from miles

around to sneer at my petunias, but I know that it takes five years to

produce a growing grapevine that is going to produce an acceptable,

usable grape.

There are certainly some allowances there where the product is not

available because the demand is still for the white variety and not for

the red variety.

This is a bit of a two-edged sword. The grape growers in British

Columbia are now paid the highest price for grapes in the world. Some

of the wineries will tell you that that doesn't help them when they try

to sell their B.C. product and produce it in its final form, which is

wine. That is a fact, that the growers in British Columbia are paid the

highest prices for their grapes in the world.

The 80/20 standard will be enforced when it is possible to enforce

it completely, but the hon. member will appreciate that it takes time

to get the product on board and to process the proper grapes.

Vote 14 approved.

Vote 15: ministry operations, $20,771,055 — approved.

The House resumed: Mr. Ree in the chair.

The committee, having reported resolutions. was granted leave to sit again.

HON. MR. McCLELLAND: Committee on Bill 8, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1986

The House in committee on Bill 8: Mr. Lauk in the chair.

Sections I to 4 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, may I draw the Chair's

attention to the straddle provision and seek the Chair's advice as to

whether that needs to be dealt with by the committee' Probably the

answer is no.

MR. CHAIRMAN: No, it's all

section 4, Mr. Minister.

HON. MR. CURTIS: I move then that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed: Mr. Ree in the chair.

Bill 8, Income Tax Amendment Act, 1986, reported complete without amendment, read a third time and passed.

HON. MR. McCLELLAND: Second reading of Bill 9.

MOTOR FUEL TAX AMENDMENT ACT, 1986

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill

9, the Motor Fuel Tax Amendment Act, 1986. This also is proposed

legislation which flows from budget day of 1986, implementing a number

of measures announced in the March budget with respect to motor fuel

taxes. Most importantly, it caps motor fuel tax rates, and it

implements a number of changes to improve the fairness and the

administration of motor fuel taxes.

With respect to improving the fairness of the tax system, may I say

that this has been and continues to be an important priority of my

ministry and of this government. I'm pleased to have been able to table

the measures in this bill, to further improve the fairness of taxes

related to motor fuel.

Earlier this year, as world oil prices began to fall, I announced a

review of the appropriateness of indexed tax rates for motor fuel in

this situation. I'm pleased that the formulas and the tax rates were

demonstrated to be just as appropriate in this environment as when they

were implemented in 1981. But we did discover early on a potential

anomaly. Despite reduced prices for gasoline and other fuel at the

pumps, it appeared that provincial taxes could have risen by April I of

1986 if no action had been taken. Mr. Speaker, this was expected to

occur because of the data upon which the

[ Page

8370 ]

indexing formula is based: it must, of necessity,

be collected some six to eight weeks earlier. To prevent a tax

increase, therefore, Bill 9 places a cap on all fuel taxes levied by

the Motor Fuel Tax Act for the 1986-87 fiscal year. To restate what was

said some two months ago, at no time during the fiscal year will taxes

rise above the rates prevailing on March 31, 1986.

I'm pleased to report to hon. members, Mr. Speaker, that in fact the

gasoline component of the consumer price index for February, released

on March 21, 1986, reflected the initial decrease in gasoline prices.

That, as a result, indicated that the indexing formula has

automatically produced a fuel tax decrease of about 0.1 cent per litre,

effective April 1, 1986. Although the cap on fuel prices did not have

any effect on April 1, 1986, the tax decrease demonstrates that our

confidence in the current fuel tax system in the province of British

Columbia is justified. In addition, although gasoline prices are not

expected to rise over the course of the coming year, if prices do rise,

then fuel tax increases will automatically be limited by this cap. The

cap indicates that we are committed to a fair fuel tax system, with

reasonable tax rates and a stable indexing formula.

Another important measure implemented in this proposed legislation

is the broadening of eligibility for the fuel tax rebates to

handicapped drivers. Mr. Speaker, in addition to the existing criteria

under which an individual can qualify for a full rebate of fuel tax,

anyone suffering a permanent impairment of locomotion so that public

transportation would be hazardous to the user can also now qualify.

Since the program is directed at assisting those who must drive their

own vehicles, the requirements that an individual must have a valid

driver's licence and must own or lease a vehicle still apply. The

measure ensures that the legislation reflects the spirit of the

program. So because of this measure, the program will address the needs

of handicapped or disabled drivers more fairly and more consistently.

The bill also closes a loophole in the taxation of marine fuel,

whereby some fuel was unintentionally escaping taxation. This was

occurring for some marine diesel fuel purchased outside the boundaries

of British Columbia but delivered on ships within provincial

boundaries. It also occurred for some very light blends of marine

bunker fuel, unfairly allowing some purchasers to avoid taxation.

Again, in the interests of fairness, the bill ensures that all marine

fuel will be taxed at the appropriate rate, and that taxpayers will be

treated consistently in this respect.

Consistent with changes being made to the social service tax and the

hotel room tax in other legislation, the refund period for motor fuel

taxes is being extended to six years for taxes paid after April 1,

1983. Consistent with common law, there will be no refund in the case

of a mistake in law. This measure improves the fairness of the Motor

Fuel Tax Act by relaxing the constraint presently imposed by the

relatively short three-year limit on refunds.

Mr. Speaker, the several measures implemented through this bill

represent, in my view, a significant improvement to the taxation of

fuels within the province of British Columbia. The bill prevents

undesirable tax increases while maintaining the integrity of the fuel

tax indexing formulas, and it improves the fairness and administration

of these taxes.

Mr. Speaker, I look forward to the views of other hon. members, and again move second reading of Bill 9.

MR. STUPICH: The opposition will support this bill. But I look forward to seeing the copy of the minister's notes in Hansard .

I had a little difficulty following his argument that the indexing

system that we have is working so well and is doing exactly what we

wanted it to do, and therefore we have to change it. That's my

summary

of what I thought I heard him say.

As I say, Mr. Speaker, I look forward to reading exactly what he did

say, to see whether I can understand it a little better with my eyes

than I could with my ears. The opposition will support this bill.

MR. DARCY: First of all, we are supporting it and I welcome the changes, particularly for handicapped people.

The minister is arguing that because he was concerned that

provincial fuel taxes would raise themselves automatically to

unconscionable levels, he felt a cap should be put on them, although as

he himself pointed out to the House, it turned out that that was not

necessary, at least for the most recent quarter. Considering where fuel

prices are going, it probably won't be needed for the foreseeable

future. I would have to ask the minister, though — perhaps rhetorically

— why he is concerned only for the 12 months of the fiscal year

beginning April I if he has a concern about unconscionably high

gasoline taxes and other fuel taxes in British Columbia, which I think

is long overdue. I think we all should have had that concern long

before.

Why does he have this concern for only 12 months, and why the sunset

provision in this particular statute? Why is there not a permanent

capping? If it's bad to have fuel taxes increase over what they were in

the first quarter of 1986, surely it would still be bad to have them

increase over that level at any point following March 31, 1987.

[11:15]

HON. MR. CURTIS: Mr. Speaker, I thank the hon. members for Nanaimo and Rossland-Trail for their comments. I will also enjoy reading Hansard ,

Mr. Member. I believe that I said what I intended to say. Perhaps I can

deal with both points in closing debate on second reading.

First of all, as the members will recall, budget day was March 20,

and there is considerable preparation in terms of revenue forecasts,

revenue measures, etc. For argument's sake, let us say this was

occurring around the beginning of March. We were then two-thirds of the

way through the first quarter of the year in terms of reviewing what

might happen to any indexed taxes, and I had to make the decision with

respect to what might occur.

I think all hon. members will know that the fall in world oil prices

occurred quite dramatically, but as I recall it had not started at the

very beginning of the 1986 calendar year. Therefore I was somewhat in

the dark. I did not know what all the data would show for the full

quarter — January, February and March of 1986 — yet I had that

immovable deadline of March 31 — April 1, 1986, to be more correct —

when whatever had occurred would be reflected if we did nothing. As I

indicated, we had to take a precautionary move, and I made the decision

to cap the tax rate as of December 31, 1985, ensuring that regardless

of what the index might tell us or might demand of us, indeed it would

not exceed that level as of April 1, 1986.

As subsequent events proved, and as I indicated in my earlier

remarks, we did in fact see a slight decrease in the formula; but that

was not known to us until March 31, or just

[ Page 8371 ]

a couple of days before that. I indicated that the

indexing formula automatically produced a fuel tax decrease of 0.1 cent

per litre for April 1, 1986, but I had no knowledge that would occur

when the final decision had to be made with respect to this bill. It is

sunsetted — through you, Mr. Speaker, to the member for Rossland-Trail

— in the confident expectation that there will be a provincial budget

in 1987, and one can assume that it will be in the first part of 1987.

So I was addressing the next 12 months — in other words, April 1, 1986

to March 31, 1987, the period covered by the budget presented on March

20 — knowing there would be an opportunity to make further adjustments:

to extend, to introduce another cap, to do any number of things as are

deemed appropriate when the 1987 budget is in preparation.

So I don't think any hon. member should be alarmed at the fact that

it is a one-year measure. That seemed to be the most sensible thing to

do, rather than try to guess what revenues we might require from fuel

taxes, what world oil prices might be, what other factors may be at

play some nine months from now. That is the reason. We have an

opportunity to do any number of things in preparing the 1987 budget.

Mr. Speaker, I am pleased the opposition is supporting this. I therefore move second reading of Bill 9.

Motion approved.

Bill 9, Motor Fuel Tax Amendment Act, 1986, 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. McCLELLAND: Mr. Speaker, second reading of Bill 10.

INSURANCE PREMIUM TAX

AMENDMENT ACT, 1986

HON. MR. CURTIS: I move second reading of Bill 10. This bill,

another budget measure, provides for one of the more important such

items introduced in the 1986-87 British Columbia budget: the

elimination of the insurance premium tax for companies with their

permanent headquarters in the province.

I think we will all agree that the insurance industry forms a

significant part of the financial services sector. The government is

committed to encouraging the development of this as part of its broad

program to stimulate British Columbia's economic renewal. Institutions

such as banks, trust companies, credit unions, investment dealers and

the insurance industry all benefit from initiatives which will promote

a variety of aspects of the financial service sector, including both

international and domestic financial activities.

The passage of this bill and the regulations which flow from it will

make a significant contribution to the development of the insurance

industry. It will help existing British Columbia companies be more

competitive, and will help to induce new and existing companies to

locate their headquarters in the province. As a result, not only will

employment in the insurance industry be maintained through this

particular period, but there will also be an opportunity for our native

industry — our British Columbia insurance industry — to grow, creating

new jobs and considerable spin-off activity.

The measure will not provide a way for companies located elsewhere to avoid

British Columbia's insurance premium tax by incorporating subsidiaries to

run their B.C. operations. Concerns that companies will create subsidiaries

but not undertake any additional activity here or employ any more people have

been addressed in the bill. B.C. — headquartered companies must be certified

by the commissioner, pursuant to regulations that will be made under the bill,

before becoming eligible for the tax exemption. Limiting the exemption to institutions

making a significant contribution to the British Columbia financial services

sector will, in our view, ensure that it is not abused.

In short, Mr. Speaker. this bill represents another important

measure in a series being implemented or being considered by the

government of the province to encourage financial sector development in

B.C.

MR. STUPICH: The opposition will support this bill but, I

must confess, with something less than unbridled enthusiasm. It's one

more gift to corporations. To the corporations that have proven their

ability to be able to pay, we're saying, here's $4 million a year that

the government has no better use for than the companies themselves

have. But we're not asking the companies what they're going to do with

it. We're not even asking the companies whether or not they're going to

increase the investment of their funds in B.C. There's nothing in the

bill and nothing in the minister's remarks that would indicate that

there will be any inducement for them to provide employment in B.C., to

invest their funds in job-creating opportunities in B.C. We're simply

saying to them: to make it easier for you to compete with companies

that have their head offices in other places, we're going to reduce the

cost for you to do business in the province of British Columbia,

because certainly paying income tax is one of the costs.

Information that I've had in the past — I'm not sure whether it's

current and I wonder if the minister could maybe bring back some

information when we get to committee stage of this bill — is to the

effect that the companies with head offices in B.C. have not done quite

as good a job of investing their funds here as have companies with

their head offices elsewhere. The large companies have done a better

job of investing in B.C. But I don't know if that's the case today.

There's nothing in this bill that would indicate that the minister is

concerned about what's happening in that regard.

Certainly it will help companies with head offices in B.C. to be

more competitive. But how will that help the province? The minister

suggests that they could be more competitive, but they needn't be, Mr.

Speaker. There's nothing in here that says they will be or that obliges

them to be more competitive. They may simply make greater profits that

they will distribute to their shareholders. There's nothing to say that

they're going to reduce the cost of insurance, and nothing to say that

they're going to be persuaded to enter the liability insurance field in

greater volume than they have in the past. And certainly currently

there are some real problems with liability insurance. Yet there's

nothing in this bill that deals with that, unless the minister has had

some discussions with them and is expecting some change.

The minister suggests it will help them to grow. If they do become

more competitive then it will help them to grow, but they're not

creating new business. They may take business away from some of the

other firms, and while they might employ more employees it would seem

to me that the companies losing the business would have to let some

employees go.

So I can't see that this will mean any total increase in the amount of insurance business being done in the province, and

[ Page 8372 ]

therefore it's unlikely that there will be any new jobs created; as a matter of fact, quite possibly the reverse.

The minister in his press release talked about the tax relief for

the insurance industry, for a small part of it. He also talked about

complementary initiatives such as the establishment of small business

venture capital corporations and the Equity Investment Plan, about

which I would like to ask him when and if we get to his estimates to

find out just how these programs are working. I can't ask him how this

is going to work, but maybe a year from now I will be able to ask him.

It's quite possible that he'll still be there and I'll still be here a

year from now.

We will support it but, as I say, not with enthusiasm.

MR. COCKE: I, too, stand with the member for Nanaimo

respecting this bill. I can remember years and years ago chatting with

a president of a major North American life insurance company who said

that what British Columbia needs is a major life insurance company with

its head office here. That sounded very reasonable to me at the time

and, as a matter of fact, still sounds quite reasonable if we're ever

to become a financial centre.

Our problem has been — and I'm not sure that this bill addresses

anything other than a continuity of what's occurred in the past —

providing a crutch for local corporations, for local companies, which

have not necessarily adhered to what I consider to be a good, sound

business philosophy. The life insurance companies.... Now I'm not

dealing with casualty, because everybody in this House knows how I feel

about casualty companies. I think they've been darned irresponsible

over the years and, as a result, we see that we have ICBC here in

answer to their irresponsibility.

As far as their investment attitude is concerned, B.C. Is a place

where you put your buck for a fast buck and forget about it. As far as

their firm investments are concerned, they're — as they always were —

decisions based in Hartford, Connecticut; or Bay Street; or Waterloo,

Ontario; or whatever. The life insurance companies, on the other hand,

did a good job, and I'm quite sure they're still doing a good job in

terms of their proportion of investments. They had a policy, and I'm

quite sure it still exists, where they invest proportionately. Their

investment is proportionate to the premium income that they receive

from a particular jurisdiction, and as far as I'm concerned, that's

fair enough.

[11:30]

But this bill, Mr. Speaker, is going to enable some of the companies

— and there are none of them that are significantly large at the moment

— to continue with their investment decisions that take their money all

over the place. Nothing to do with proportion; nothing to do with

anything except the fast-buck syndrome. We have seen some absolute

disasters in the financial aspect of our province. We've seen trust

companies go broke, we've seen investment companies go bankrupt,

because of their decisions to invest in far-off real estate and all

sorts of other areas of bad management.

If we could see in this bill, as the member for Nanaimo pointed out,

something that would indicate to us that there were criteria other than

the home-office criteria.... Now I recognize the bill is subject to

regulation, but the problem is that when we have access in this House

to the legislation, which is at best vague under these circumstances,

we can't argue about regulations that we don't know will or will not

exist. So, Mr. Speaker, it's really not addressing the problem.

Now the second point that I would like to raise is the concern that

I have that other companies — and I mean very significant investors in

our province — may change their policies vis-Ã -vis investment in

British Columbia as a result of this premium tax; that they will still

be paying, and that hose who are headquartered here are not. We may be

raising a red flag to some of these corporations, who may say: "Well,

if B.C. wants to play the game of looking after its own, then let them,

and we'll look after our own as we see it." I would hate to see the

life insurance industry in this country withholding investments from

our province or not dealing with us, as they have in the past, on a

proportional basis. I can just imagine what would occur in B.C. If the

life companies became as irresponsible as the casualty companies have

been. It would be a bit of a disaster. The amount of mortgage money

that comes into this province as a result of the major assignments of

capital from the life companies is very significant. I just don't want

to see us putting ourselves in a position where we might jeopardize

that.

Having said that, I understand — and listen, I'm not criticizing the

motivation here — what the Minister of Finance wants to do. He wants to

encourage as much development in this area as possible. When you think

about British Columbia, all of British Columbia, a province with 2.7

million, 2.5 million, 2.6 million — we'll see after the census is over

— with its limited number of financial institutions compared to little

places like Kitchener-Waterloo, which has two huge life insurance

companies headquartered there, plus a number of casualty companies....

Then there's London, Ontario — and on and on it goes, Mr. Speaker. If

that's what the intention is, I applaud the intention. But I suspect

that what we have before us is not going to be as significant in those

terms as the minister might feel, and as the government backing him may

feel in this instance.

As the member for Nanaimo said, we will, of course, support the bill, but we have some hesitations.

HON. MR. CURTIS: Mr. Speaker, the member for Nanaimo asked

for some specific information which I shall have for him in committee

stage. I'm sorry that I don't have it here today in closing debate, but

I can readily have it when it is called for committee.

As I indicated, this should be seen as one element of a series. The

bill is vague, yes. Regulations will flow from it, yes. Not

unexpectedly some insurance companies not headquartered in B.C. have

conveyed their views to me in no uncertain terms, but we have their

attention. That was one of the elements I took into consideration when

I decided to take this particular step.

I also hold open the opportunity to make further changes to the

Insurance Premium Tax Act if and as such are deemed appropriate at some

time in the future. That's not a commitment; that's not getting into

any specifics; but, again, we have an opportunity to change this act

with the will of the Legislature on an annual basis. I don't mean to

rescind that which we are approving today, but rather to introduce

other elements into it if that is felt appropriate.

[Mr. Speaker in the chair.]

The member for New Westminster has touched on the amount of

investment money which flows from companies other than those

headquartered in B.C. That's a fair comment. Mr. Speaker, without

spending a great deal of time on

[ Page 8373 ]

another piece of legislation which is on our books,

I think I can refer him to the fact that the corporation capital tax,

as it phases out, is now limited only to Canada's chartered banks not

headquartered in B.C. So there is some parallel.

If I may offer some reassurance, I am not aware of any decision

being taken by Canada's major chartered banks to stop doing business in

the province of B.C. because of a specific piece of legislation, a

specific move which we took earlier on. I trust that the same will be

the case in terms of the insurance industry. They may not like it, but

now is their opportunity to be more innovative, to show ways in which

they can have a greater and a more useful presence in British Columbia,

and without just setting up some sort of B.C. shell.

There may be ways in which some companies — it's a competitive

business — can assist us in our goal of strengthening this element

through this bill, this element of the very broad financial spectrum in

the province of B.C. It's a single move, but it must be seen in the

context of a whole series of moves which have been taken over time, and

others which I trust will follow.

Mr. Speaker, I move second reading of Bill 10.

Motion approved.

Bill 10, Insurance Premium Tax Amendment Act, 1986, 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. McCLELLAND: Second reading of Bill 11, Mr. Speaker.

TAXATION STATUTES AMENDMENT ACT, 1986

HON. MR. CURTIS: Mr. Speaker, this is an omnibus bill,

so-called. It deals with a number of tax fairness measures and

administrative steps. They touch a number of different statutes. They

have in common, however, the theme of improving the tax system and

attempting to treat taxpayers more equitably. I would think that the

members of the Legislature will want to discuss points of interest in

the committee stage.

I move second reading of Bill 11.

MR. STUPICH: I agree with the minister on that. We will support it, certainly in second reading and I expect in committee stage as well.

I do want to make this one observation. When it comes to handing out

tax revenue to corporation, the minister is very generous. When it

comes to handing it out to individuals, he is very stingy. We will get

into the details of that as we work our way through in committee stage.

But we will support second reading.

Motion approved.

Bill 11, Taxation Statutes Amendment Act, 1986, 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. McCLELLAND: Mr. Speaker, second reading of Bill 23.

INCOME TAX AMENDMENT ACT (No. 2), 1986

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill 23, the Income Tax Amendment Act (No. 2), 1986.

This bill introduces amendments to the Income Tax Act in two areas.

First, a number of the amendments bring administrative, enforcement and

collection provisions of the provincial act in line with Income Tax

Canada, which has been done, I believe, almost every year. The

amendments have been initiated by changes made to the federal act from

1983 to the present. Changes to the provincial act have been requested

by Ottawa under the terms of the Canada-British Columbia tax collection

agreement, by which the province agrees that it will maintain its

taxation statute on the same basis as the federal act.

Secondly, a minor change is being made to correct a technical

anomaly in the appeal provision of the act. Taxpayers who calculate

taxable income under

section 8 of the Income Tax Act will now be

permitted to file an appeal with federal authorities. Prior to the

introduction of this bill, taxpayers who calculated their income under

section 8 of the act had, we understand and found out, no right of

appeal even though provincial taxable income differed from federal

taxable income. That is the essence of the Income Tax Amendment Act

(No. 2). Mr. Speaker. I move second reading.

MR. STUPICH: Mr. Speaker. the opposition will support second reading.

HON. MR. CURTIS: Mr. Speaker, how would you feel if I moved

that the bill be referred to Committee of the Whole House for

consideration at the next sitting after today?

MR. SPEAKER: Pretty good.

Motion approved.

Hon. Mr. McClelland moved adjournment of the House.

Motion approved.

The House adjourned at 11:44 a.m.

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